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<br />Redevelopment Agency of the City of Redwood City <br />Notes to Basic Financial Statements, Continued <br />For the year ended June 30, 2008 <br /> <br />1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued <br /> <br />B. Basis of AccountinWMeasurement Focus, Continued <br /> <br />Governmental Fund Financial Statements - Governmental fund financial statements include a Balance <br />Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major <br />governmental funds. An accompanying schedule is presented to reconcile and explain the differences <br />in net assets as presented in these statements to the net assets presented in the government-wide <br />financial statements. The Agency has presented all funds as major funds. <br /> <br />The followings are the Agency's major funds: <br /> <br />Redevelopment Agency Fund <br />This fund accounts for funds to be provided by loans and/ or property tax increment from specific <br />redevelopment areas for redevelopment projects within those areas. <br /> <br />Low and Moderate Income Housing Fund <br />This fund accounts for redevelopment property tax increment revenues which may be used strictly for <br />low and moderate income housing. <br /> <br />.~, <br /> <br />~~~ <br /> <br />1997 Tax Allocation Refunding Bonds Fund <br />This fund accounts for bonds issued in 1997 to prepay a loan received by the Redevelopment Agency <br />from the Redwood City Public Financing Authority, which in turn used the proceeds to defease the <br />Public Financing Authority Series B bonds. <br /> <br />2003 Tax Allocation Bonds Fund <br />This fund accounts for bonds issued in 2003 to finance various downtown improvements by the <br />Redevelopment Agency <br /> <br />All governmental funds are accounted for on a spending or II current financial resources It measurement <br />focus and the modified accrual basis of accounting. Accordingly, only current assets and current <br />liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in <br />Fund Balances present increases (revenues and other financing sources) and decreases (expenditures <br />and other financing uses) in net current assets. Under modified accrual basis of accounting, revenues <br />are recognized in the accounting period in which they become both measurable and available to finance <br />expenditures of the current period. <br /> <br />Revenues are recorded when received in cash, except that revenues subject to accrual (generally 60 days <br />after year-end) are recognized when due. The primary revenue sources, which have been treated as <br />susceptible to accrual by the Agency, are property tax, sa.les tax, intergoverrunental revenues and other <br />taxes and investment incon1e. Expenditures are recorded in the accounting period in which the related <br />fund liability is incurred. <br /> <br />Deferred revenues arise when potential revenues do not meet both the "measurable" and "available" <br />criteria for recognition in the current period. Deferred revenues also arise when the government <br />receives resources before it has a legal claim to them, as when grant monies are received prior to <br />incurring qualifying expenditures. In subsequent periods when both revenue recognition criteria are <br />met or when the government has a legal cIaitn to the resources, the deferred revenue is removed from <br />the combined balance sheet and revenue is recognized. <br /> <br />23 <br />