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City of Redwood City 7.1.A. - Page 33 <br /> Management's Discussion and Analysis <br /> For the year ended June 30, 2014 <br /> The Basic Financial Statements <br /> The Basic Financial Statements comprise the City -wide Financial Statements and the Fund Financial <br /> Statements; these two sets of financial statements provide two different views of the City's financial <br /> activities and financial position. <br /> The City -wide Financial Statements provide a longer -term view of the City's activities as a whole, and <br /> comprise the Statement of Net Position and the Statement of Activities. The Statement of Net Position <br /> provides information about the financial position of the City as a whole, including all its capital assets and <br /> long -term liabilities on the full accrual basis, similar to that used by corporations. Over time, increases or <br /> decreases in net position may serve as a useful indicator of whether the financial position of the City is <br /> improving or deteriorating. The Statement of Activities provides information about all the City's revenues <br /> and all its expenses, also on the full accrual basis, with the emphasis on measuring net revenues or <br /> expenses of each of the City's programs. The Statement of Activities explains in detail the change in Net <br /> Position for the year. <br /> All of the City's activities are grouped into government activities and business -type activities, as explained <br /> below. All the amounts in the Statement of Net Position and the Statement of Activities are separated <br /> into governmental activities and business -type activities in order to provide a summary of these two <br /> activities of the City as a whole. <br /> The Fund Financial Statements report the City's operations in more detail than the government -wide <br /> statements and focus primarily on the short -term activities of the City's general fund and other major <br /> funds. The Fund Financial Statements, which are prepared using the modified accrual basis of accounting, <br /> measure only current revenues and expenditures and fund balances; they exclude capital assets, long- <br /> term debt, and other long -term amounts. <br /> Major funds account for the major financial activities of the City and are presented individually, while the <br /> activities of non -major funds are presented in summary, with subordinate schedules presenting the detail <br /> for each of these other funds. Major funds are explained below. <br /> The Government -wide Financial Statements <br /> The Statement of Net Position and the Statement of Activities present information about the following: <br /> Governmental Activities — All of the City's basic services are considered to be governmental activities, <br /> including general government, community development, public safety, public works, culture- recreation, <br /> public improvements, planning and zoning, and general administration services. These services are <br /> supported by general City revenues such as taxes, and by specific program revenues such as developer <br /> fees. <br /> Business -type Activities — All the City's enterprise activities are reported here, including water, sewer, <br /> parking, the Port of Redwood City, and Docktown Marina. Unlike governmental services, these services <br /> are supported by charges paid by users based on the amount of the service they use. <br /> Government -wide financial statements are prepared on the full accrual basis, which means they measure <br /> the flow of all economic resources of the City as a whole. <br /> 5 <br />