For the year ended September 30, 2022 Functions/Programs Primary Government: Governmental activities: General government Public safety Transportation Parks and recreation Economic development Physical environment Interest on long-term debt Total governmental activities Business-type activities: Water and sewer system Sanitation services Total business-type activities Total primary government City of Groveland, Florida Statement of Activities Charges for Operating Services Grants and Expenses and Fines Contributions S 5,081,122 S 1,030,858 3,940,220 13,514,366 2,513,752 267,904 11,393,520 - - 2,416,405 41,971 g 910,080 1,206 84,676 1,684,095 2,272,844 - 404,813 - - 35,404,401 5,860,631 4,292,800 8,469,997 8,285,940 - 8,469,997 8,285,940 g 5 43,874,398 S 14,146,571 5 4,292,800 General revenues and transfers: Taxes: Property taxes, levied for general purposes Franchise fees and utility taxes Intergovernmental Investment earnings Miscellaneous Transfers, net Total general revenues Change in net position Net position, beginning of year MNet position, end of year Program Revenues Capital Grants and Contributions 5 $ 71,091 611,916 1,455,970 3,390,799 5,529,776 4,146,090 4,146,090 9,675,866 $ $ Primary Government Governmental Activities (38,953) (10,120,794) {9,937,550) 1,016,365 (824,198) 588,749 (404,813) (19,721,194) (19,721,194) 6,788,699 3,208,929 7,024,280 16,051 352,030 1,411,319 18,801,308 (919,886) 49,194,539 48,274,653 5 Business-type Activities 3,962,033 3,962,033 3,962,033 31,539 42,376 (1,411,319) (1,337,404) 2,624,629 51,316,529 53,941,158 3 Net (Expense) Revenue and Changes in Net Position Total (38,953) (10,120,794) (9,937,550) 1,016,365 (824,198) 588,749 (404,813) (19,721,194) 3,962,033 3,962,033 (15,759,161) 6,788,699 3,208,929 7,024,280 47,590 394,406 17,463,904 1,704,743 100,511,068 102,215,811 \fBalance Sheet - Governmental Funds Community General Redevelopment September 30, 2022 Fund Agency Fund ASSETS Cash and cash eqguivalents S 14,408,134 S 477,072 Accounts receivable 819,299 - Lease receivable 217,860 - Due from other funds 112,040 - Due from other governments 1,043,054 - Prepaid items 50,932 22,917 Loan receivable - 65,701 Total assets 16,651,319 565,690 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable S 893,955 46,181 Retainage payable - - Accrued payroll and related liabilities 666,510 2,106 Due to other funds 3,176 - Due to other governments 810,044 - Total liabilities 2,373,685 48,287 Deferred inflows of resources: Unavailable revenue 154,612 - Deferred inflows related to leases 213,198 - Total deferred inflows of resources 367,810 - Fund balances: MNonspendable 83,432 88,618 Restricted Community development - 428,785 Capital projects - - Infrastructure - - Public safety - - Debt service - - Committed General sinking fund 3,122,125 - Assigned 3,050,000 - Unassigned 7,654,267 - Total fund balances 13,909,824 517,403 Total liabilities, deferred inflows of resources, and fund balances $ 16,651,319 S 565,690 City of Groveland, Florida Statement of Net Position Primary Government Governmental Business-type As of September 30, 2022 Activities Activities Total ASSETS Cash and cash equivalents $ 23472223 8,201,204 5 31,673,427 Investments - 4,516,104 4,516,104 Beceivables, net 823,219 1,101,986 1,925,205 Lease receivable 217,860 - 217,860 Prepaid items 183,849 - 183,849 Due from other governments 1,611,299 2,311,942 3,923,241 Internal balances (3,176) 3,176 - Loan receivable 65,701 - 65,701 Restricted assets: Cash and cash equivalents - 3,020,611 3,020,611 Capital assets: Non-depreciable 9,760,086 4,960,346 14,720,432 Depreciable (net) 36,806,009 44,155,611 80,961,620 Total assets 72,937,070 68,270,980 141,208,050 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to other post- emloyment benefits 133,538 10,438 143,576 Deferred outflows related to pensions 323,980 - 323,980 Total deferred outflow of resources 457,518 10,438 467,956 LIABILITIES Accounts payable 1,379,476 2,769,817 4,149,293 Accrued liabilities 680,516 - 680,516 Due to other governments 810,044 - 810,044 Accrued interest 134,146 11,457 145,603 Customer deposits payable - 1,157,088 1,157,088 MNon-current liabilities: Due within one year: Compensated absences 478,059 34,840 512,899 Other post-employment benefits 34,665 2,710 37,375 Lease liability 131,996 - 131,996 Bonds, notes and financed purchases 625,152 498,011 1,123,163 Due in more than one year: Compensated absences 520,602 37,936 558,538 Other post-employment benefits 447,804 35,003 482 807 Lease liability 548,484 - 548,484 Bonds, notes and financed purchases 18,508,270 9,745,910 28,254,180 Total liabilities 24,299,214 14,292,772 38,591,986 The gccompanying notes are an integral part of this financal statement. Z16= Primary Government Governmental Business-type As af September 30, 2022 Activities Activities Tatal DEFERRED INFLOWS OF RESOURCES Deferred inflows related to leases 213,198 = 213,198 Deferred inflows related to other past- emlayment benefits 607,523 47,488 655,011 Total deferred inflows of resources 820,721 47, 868,209 NET POSITION Net investment in capital assets 26,664,236 38,851,628 65,515,864 Restricted for: System expansion - 11,199,292 11,199,292 Economic development 428,785 - 428,785 Infrastructure 2,350,957 - 2,350,957 Capital projects 4,715,244 - 4,715,244 Public safety 1,352,412 - 1,352,412 Debt service 179,259 2,020,182 2,199,441 Unrestricted 12,583,760 1,870,056 14,453,816 Total net position $ 48,274,653 53,941,158 102215811 City of Groveland, Florida Notes to Financial Statements Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 9. Categories and classification of net position and fund balance (continued) Fund balance policies Fund halance of governmental funds is reported in various categories based on the nature of any limitations requiring the use of resources for specific purposes. The government itself can establish limitations on the use of resources through either a commitment (committed fund balance) or an assignment (assigned fund balance). The provisions of Section 1800: Classification and Terminology of the GASB Codification, specifies the following classifications: Nonspendable Fund Balance Nonspendable fund balances are amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted Fund Balance Restricted fund balances are restricted when constraints placed on the use of resources are either: (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation. Committed Fund Balance - The committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the government's highest level of decision-making authority. The governing council is the highest level of decision-making authority for the government that can, by adoption of an ordinance prior to the end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the ordinance remains in place until a similar action is taken (the adoption of another ordinance) to remove or revise the limitation. Assigned Fund Balance - Amounts in the assigned fund balance classification are intended to be used by the government for specific purposes but do not meet the criteria to be classified as committed. The governing council (council}) has by resolution authorized the finance director to assign fund balance. The council may also assign fund balance as it does when appropriating fund balance to cover a gap between estimated revenue and appropriations in the subsequent year's appropriated budget. Unlike commitments, assignments generally only exist temporarily. In other words, an additional action does not normally have to be taken for the removal of an assignment. Conversely, as discussed above, an additional action is essential to either remove or revise a commitment. Unassigned Fund Balance Unassigned fund balance is the residual classification for the General Fund. City of Groveland, Florida Notes to Financial Statements Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and enterprise funds are reported as separate columns in the fund financial statements. C. Measurement focus, basis of accounting and financial statement presentation The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements. The government-wide financial statements are reported using the economic resources measurement focus and the aecrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility and timing requirements imposed by the provider have been met. The governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, and claims and judgments, are recorded only when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds. Issuance of long-term debt and acquisitions under capital leases are reported as other financing sources, City of Groveland, Florida Notes to Financial Statements Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Property taxes, sales taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Entitlements are recorded as revenues when all eligibility requirements are met, including any time requirements, and the amount is received during the period or within the availahility period for this revenue source (within 60 days of year-end). Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other eligibility requirements have been met, and the amount is received during the period or within the availability period for this revenue source (within 60 days of year-end). All other revenue items are considered to be measurable and available only when cash is received by the government. The proprietary funds are reported using the economic resources measurement focus and the accrual basis of accounting. Government-wide financial statements While separate government-wide and fund financial statements are presented, they are interrelated. The governmental activities column incorporates governmental funds, while business-type activities incorporate the City's enterprise funds. Separate financial statements are provided for governmental funds, proprietary funds, even though the latter are excluded from the government-wide financial statements. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments in lieu of taxes where the amounts are reasonably equivalent in value to the interfund services provided and other charges between the City''s wastewater functions and various other functions of the City. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Fund financial statements The fund financial statements provide information about the government's funds, including its blended component unit. Separate statements for each fund categorygovernmental, and proprietaryare presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements. The government reports the following major governmental funds: The General Fund is the government's primary operating fund. It accounts for all financial resources of the general government, except those accounted for in another fund. During 2022, the sanitation services were moved from an enterprise fund to the General Fund. City of Groveland, Florida Notes to Financial Statements Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The Community Redevelopment Agency Fund accounts for the resources accumulated and payments made for the rehabilitation, conservation and/or redevelopment of the Community Redevelopment Area. The Community Redevelopment Agency fund is presented separately as a major fund, which is also in compliance with Florida Statute 163.387. This fund receives special incremental ad-valorem tax levies to pay for rehabilitation and redevelopment of the specified area in need of improvement to sustain the tax base. The Construction Fund is used to account for the acquisition and construction of the City's major capital facilities, and other than those financed by proprietary funds. The government reports the following major enterprise funds: The Water and Sewer System Fund accounts for the operations of the City's water, sewer, and reclaimed water utility operations, which are financed in a manner similar to private business enterprises, where the costs, including depreciation, of providing service to the general public on an ongoing basis are financed primarily through user charges. During the course of operations the government has activity between funds for various purposes. Any residual balances outstanding at year end are reported as due from/to other funds and advances to/from other funds. While these balances are reported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Balances between the funds included in governmental activities (i.e., the governmental and internal service funds) are eliminated so that only the net amount is included as internal balances in the governmental activities column. Similarly, balances between the funds included in business-type activities (i.e., the enterprise funds) are eliminated so that only the net amount is included as internal balances in the business-type activities column. Further, certain activity occurs during the year involving transfers of resources between funds. In fund financial statements these amounts are reported at gross amounts as transfers infout. While reported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Transfers between the funds included in governmental activities are eliminated so that only the net amount is included as transfers in the governmental activities column, Similarly, balances between the funds included in business-type activities are eliminated so that only the net amount is included as transfers in the business-type activities column. City of Groveland, Florida Notes to Financial Statements Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Other information Budgetary Information Budgetary basis of accounting Annual budgets are adopted on a basis consistent with generally accepted accounting principles for the General Fund, Community Redevelopment Fund, special revenue funds and debt service fund. The capital projects funds are appropriated on a project-length basis. Certain special revenue funds do not have appropriated budgets since other means control the use of these resources (e.g., grant awards and endowment requirements) and sometimes span a period of more than one fiscal year. The appropriated budget is prepared by fund, function, and department. The City's department heads may make transfers of appropriations within a department. Transfers of appropriations between departments require the approval of the council. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the department level. E. Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Net Position or Equity | Fund Balance 1. Cash and cash equivalents The government's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition. 2. Investments Investments for the government are reported at fair value (generally based on quoted market prices) except for the position in the State Treasurer's Investment Pool (Pool). The State Treasurer's Investment Pool meets all of the specified criteria in Section 150: Investments to qualify to elect to measure their investments at amortized cost. Accordingly, the fair value of the City's position in the pool is equal to the value of the pooled shares. 3. Receivables and payables All account and tax receivables are shown net of allowance for uncollectible accounts. As provided by law, the Lake County Property Appraiser assesses all properties for ad valorem taxing purposes and the Lake County Tax Collector collects and distributes all taxes, Ad valorem taxes are levied based on property valuation as of January 1. The fiscal year for which ad valorem taxes are levied begins on October 1. Taxes are due beginning November 1, delinquent on April 1, and liened on May 30, Property tax revenues are recognized in the fiscal year for which they are budgeted and also become due and payable. Virtually all unpaid taxes are collected via tax sale certificates sold on or prior to June 1; therefore, no material taxes are receivable at fiscal year-end. City of Groveland, Florida Notes to Financial Statements Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3. Receivables and payables (continued) Unbilled receivables An amount for unbilled revenue is recorded in the Water and Sewer System and sanitation services in the General Fund for services rendered, but not yet billed as of the end of the fiscal year. The receivable is derived from the cycle billings generated subsequent to fiscal year end and prorated for usage in September. Lease receivables - The City's lease receivables are measured at the net present value of future lease payments to be received for the lease term and an offsetting deferred inflow of resources at the beginning of the term. The periodic amortization of the discount on the receivable is reported as interest revenue for that period. This recognition does not apply to short-term leases, contracts that transfer ownership, leases of assets that are investments, or certain regulated leases. Any initial direct costs are reported as an outflow of resources for that period. Re-measurement of leases receivables occur when there are modifications, including but not limited to changes in the contract price, lease term, and adding or removing an underlying asset to the lease agreement. In case of a partial or full lease termination, the carrying value of the lease receivable and the related deferred inflow if resources will be reduced and be recorded as a gain or loss for the difference. Loan receivable An amount established through the anchor tenant loan to grant program by the Groveland Community Redevelopment Agency to allow property owners within the area to apply for and receive loan to grant funding to improve their property. The amount of the loan to grant that the recipient would repay is reduced by 20% annually until the loan to grant amount is reduced to zero after five years and completion of the facility improvements. The receivable is recognized as long- term on the governmental fund balance sheet. Allowance for doubtful accounts Accounts receivable have been reported net of the allowance for doubtful accounts. Accounts receivable in excess of 120 days are subject to being considered as uncollectible. Unearned revenue Unearned revenue recorded on the governmental fund balance sheet represents amounts received before eligibility requirements are met. 4, Interfund activities and transactions During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as \"due from other funds\" or \"due to other funds\" within the fund financial statements. Long-term borrowings between funds are classified as \"advances to other funds\" or \"advances from other funds\" in the fund financial statements. These amounts are eliminated in the government and business-type activities columns of the statement of net position, except for any residual balance outstanding between the government and business-type activities at the end of the fiscal year, which are reported in the government-wide financial statements as internal balances, City of Groveland, Florida Notes to Financial Statements Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 4. Interfund activities and transactions Interfund transactions are reflected as services provided, reimbursements, or transfers. Services provided, deemed to be at or near market rates, are treated as revenues and expenditures/expenses. Reimbursements are when a fund incurs a cost, charges the appropriate benefitting fund, and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers between governmental or business-type funds are funds are netted as part of the reconciliation to the government-wide presentation. 5. Prepaid items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased. 6. Restricted Assets Certain assets of the City are classified as restricted assets on the statement of net position because their use is limited by law through constitutional provisions or enabling legislation; or by restrictions imposed externally by creditors, grantors, contributors or laws or regulations of other governments, Special restricted asset accounts have been established to account for the sources and uses of these limited use assets as follows: Debt service accounts Includes certain proceeds from issuance of revenue bonds, as well as certain resources set aside for the repayment of notes or financed purchase obligations. 7. Capital assets Capital assets, which include property, plant, equipment, leased assets, right-to-use assets, and infrastructure assets (e.g. roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities column in the government-wide financial statements. Capital assets, except for infrastructure assets, are defined by the government as assets with an initial, individual cost of more than 55,000 and an estimated useful life in excess of one year. For infrastructure assets the same estimated minimum useful life is used (in excess of two years), but only those infrastructure projects that cost more than 550,000 are reported as capital assets. In the case of the initial capitalization of general infrastructure assets (i.e., those reported by governmental activities), the government chose to include all such items regardless of their acquisition date or amount. The government was able to estimate the historical cost for the initial reporting of these assets through back trending (i.e., estimating the current replacement cost of the infrastructure to be capitalized and using an appropriate price-level index to deflate the cost to the acquisition year or estimated acquisition year). City of Groveland, Florida Notes to Financial Statements Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 7. Capital assets As the government constructs or acquires additional capital assets each period, including infrastructure assets, they are capitalized and reported at historical cost. The reported value excludes normal maintenance and repairs which are essentially amounts spent in relation to capital assets that do not increase the capacity or efficiency of the item or increase its estimated useful life. Donated capital assets are recorded at their estimated acquisition value at the date of donation. Land and construction in progress are not depreciated. The other property, plant, equipment, and infrastructure of the primary government are depreciated using the straight line method over the following estimated useful lives: Capital asset classes Lives Buildings 40 Improvements other than buildings 25-40 Water and sewer systems 25-40 Machinery and equipment 5=15 8. Deferred outflows/inflows of resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The City has two items that qualifies for reporting as deferred outflows of resources, the deferred outflows related to other-post employment benefits and pensions, reported in the government-wide and proprietary funds statements of net position. The deferred outflows related to other post- employment benefits and pensions are an aggregate of items related to OPEB and pensions, reflecting amounts resulting from experience gains/losses that have not been recognized in the current OPEB and pension expense calculations, but will be potentially reflected in future years as calculated in accordance with GASB Codification Section P52: Postemployment Benefits Other than Pensions Reporting Benefits Not Provided through Trusts That Meet Specified Criteria and GASB Codification Section P20: Pension Activities Reporting for Benefits Provided through Trusts That Meet Specified Criteria. The deferred outflows related to OPEB and pensions will be recognized as either OPEB and pensions expense or a reduction in the net OPEB and pension liability in future reporting years. City of Groveland, Florida Notes to Financial Statements Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 8. Deferred outflows/inflows of resources In addition to liahilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has one (1) item that qualifies for reporting as deferred inflows of resources. The deferred inflows related to other-post employment benefit are an aggregate of items related to OPEB, reflecting amounts resulting from experience gains/losses that have not been recognized in the current OPEB expense calculation, but will be potentially reflected in future years as calculated in accordance with GASE Codification Section P52: Postemployment Benefits Other than Pensions Reporting Benefits Not Provided through Trusts That Meet Specified Criteria. The deferred inflows related to other-post employment benefits will be recognized as a reduction to OPEB expense in future reporting years. The deferred inflows related to leases are recognized at the inception of leases in which the City is the lessor. The deferred inflow of resources is an amount equal to the corresponding lease receivable plus certain additional amounts received from the lessee at or before the commencement of the lease term that relate to future periods, less any lease incentives paid to, or on behalf of, the lessee at or before the commencement of the lease term. The inflow of resources is recognized in a systematic and rational manner over the term of the lease. Unavailable revenue, which arises only under a modified accrual basis of accounting, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from two sources: grants and other intergovernmental revenues. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 9. Categories and classification of net position and fund balance Net position flow assumption Sometimes the government will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government's policy to consider restricted net position to have been depleted before unrestricted net position is applied. Fund balance flow assumptions Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the government's policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. City of Groveland, Florida Notes to Financial Statements Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Groveland, Florida (the \"City\"), was incorporated in 1923 under the provisions of the Special Acts of 1923 of the State of Florida, Chapter 9764, The current City Code authorizes the following services: public safety, public utilities, public works (including roads and streets), planning and zoning, sanitation, parks and recreation, community redevelopment, and general administrative services. The accounting policies of the City conform to generally accepted accounting principles (GAAP) as applied to government units. The more significant accounting policies used by the City are described below. A. Reporting entity The City is a municipal corporation governed by an elected mayor and five-member governing council {council). The accompanying financial statements present the government and its component units, entities for which the government is considered to be financially accountable. Blended component units are, in substance, part of the primary government's operations, even though they are legally separate entities. Thus, blended component units are appropriately presented as funds of the primary government. The City has no discretely presented component units, Blended component unit The City of Groveland created the Community Redevelopment Agency in 2002, This is a dependent taxing district established in accordance with Chapter 163, Part lll, Florida Statutes. Notification to affected taxing agency was done in compliance with Chapter 163.346, Part lll, Florida Statutes. The incremental annual increase in tax over the base years will be used to fund projects designed to enhance and improve the described area. The City Council, being the duly elected governmental body for the designated area, passed Ordinance 2002-05-15, which established the City of Groveland as the Redevelopment Agency for the purpose of carrying out the community redevelopment programs and plans within the area. Through the Ordinance, the City established the Community Redevelopment Trust Fund to account for all transactions generated by this special revenue fund. The Groveland Community Redevelopment Fund is presented as a blended component unit since the City Council serves as 5 of the 7 members of the governing board and the City has operational responsibility for the Fund. B. Government-wide and fund financial statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. Governmental activities, which normally are supported by taxes, intergovernmental revenues, and other nonexchange transactions, are reported separately from business-type activities, which rely to a significant extent on fees and charges to external customers for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable