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6.A. - Page 34 of 191 City of Redwood City Management's Discussion and Analysis For the fiscal year ended June 30, 2019 The Basic Financial Statements The Basic Financial Statements comprise the City-wide Financial Statements and the Fund Financial Statements; these two sets of financial statements provide two different views of the City's financial activities and financial position. The City-wide Financial Statements provide a longer-term view of the City's activities as a whole, and comprise the Statement of Net Position and the Statement of Activities. The Statement of Net Position provides information about the financial position of the City as a whole, including all its capital assets and long-term liabilities on the full accrual basis, similar to that used by corporations. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The Statement of Activities provides information about all the City's revenues and all its expenses, also on the full accrual basis, with the emphasis on measuring net revenues or expenses of each of the City's programs. The Statement of Activities explains in detail the change in Net Position for the fiscal year. All of the City's activities are grouped into government activities and business -type activities, as explained below. All the amounts in the Statement of Net Position and the Statement of Activities are separated into governmental activities and business -type activities in order to provide a summary of these two activities of the City as a whole. The Fund Financial Statements report the City's operations in more detail than the government -wide statements and focus primarily on the short-term activities of the City's general fund and other major funds. The Fund Financial Statements, which are prepared using the modified accrual basis of accounting, measure only current revenues and expenditures and fund balances; they exclude capital assets, long- term debt, and other long-term amounts. Major funds account for the major financial activities of the City and are presented individually, while the activities of non -major funds are presented in summary, with subordinate schedules presenting the detail for each of these other funds. Major funds are explained below. The Government -wide Financial Statements The Statement of Net Position and the Statement of Activities present information about the following: Governmental Activities — All of the City's basic services are considered governmental activities, including general government, community development, public safety, public works, culture -recreation, public improvements, planning and zoning, and general administration services. These activities have been broken down into various functions, such as community development, human services, public safety, transportation, environmental support and protection, leisure, cultural and information services, and policy development and implementation. These services are supported by general City revenues such as taxes, and by specific program revenues such as developer fees. Business -type Activities — All of the City's enterprise activities are reported here, including water, sewer, parking, the Port of Redwood City, and Docktown Marina. Unlike governmental services, these services are supported by charges paid by users based on the amount of the service they use. Government -wide financial statements are prepared on the full accrual basis, which means they measure the flow of all economic resources of the City as a whole. 6 41