AgdaPkt 2021.04.26 Joint SA FPA - Laserfiche WebLink

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6.B. - Page 42 of 55 City of Redwood City Utility Users' Tax Fund Notes to Financial Statements For the fiscal year ended June 30, 2020 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity All transactions of the Utility Users' Tax and Communication Users' Tax are reported in a separate fund of the City of Redwood City, California (City). The separate fund is included as part of the General Fund in the basic financial statements of the City. The fund is used to account for the City's revenues earned and expenditures incurred according to the Communication Users' Tax Ordinance of the City of Redwood City. The accompanying financial statements are for the Utility Users' Tax fund only and are not intended to fairly present the financial position of the City. B. Basis of Accounting and Measurement Focus The accompanying financial statements are prepared on the modified accrual basis of accounting. Revenues are generally recorded when measurable and available, and expenditures are recorded when the related liabilities are incurred. The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus, wherein only current assets and current liabilities generally are included on the balance sheet. Operating statements of governmental funds present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. C. Fund Accounting The operations of the Utility Users' Tax Fund, which includes the Communications Users' Tax, are accounted for as part of the General Fund. Funds are separate accounting entities with a set of self -balancing accounts which comprise their assets, liabilities, fund equity, revenues, and expenditures. 2. UTILITY USERS' TAX AND COMMUNICATIONS USERS' TAX A Utility Users' Tax is imposed upon every person in the City using electricity and natural gas which is transported and delivered through a pipeline distribution system. The tax rate for natural gas and electricity is 5%. A Communications Users' Tax is imposed upon every person in the City using telecommunication services and cable television services. The tax rate for Communications Users' Tax is 4%. There is also a 3.5% tax on prepaid wireless phones, in accordance with AB1717, effective January 1, 2016, which is used for low and moderate income housing. All other funds are used for capital improvement and administrative expenditures.