Sarasota County, Florida Notes to Financial Statements September 30, 2023 Proprietary Funds Proprietary Funds focus on the determination of operating income, changes in net position (or cost recovery), financial position, and cash flows. The proprietary fund category includes enterprise and internal service funds. Enterprise Funds may be used to account for any activity for which a fee is charged to external users for goods or services. Activities are required to be reported as enterprise funds if any one of the following criteria is met: (a) the activity is financed with debt that is secured solely by a pledge of the net revenues from fees and charges of the activity; (b) laws or regulations require that the activitys costs of providing services, including capital costs be recovered with fees and charges, rather than with taxes or similar revenues; or (c) the pricing policies of the activity establish fees and charges designated to recover its costs, including capital costs. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary funds principal ongoing operations. The principal operating revenues of the Countys enterprise and internal service funds are charges to customers for sales and services. These operating revenues are pledged for debt service bond covenants. The County also recognizes as operating revenue the portion of capacity fees intended to recover the cost of connecting new customers to the system. Operating expenses for the Countys enterprise and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. The County reports the following proprietary funds: The Utility System Fund (a major fund) is used to account for the operations of the Countys water, wastewater utility services, and all activities necessary to provide such services, including administration, operations, maintenance, financing, billing, and collection. The Solid Waste System Fund (a major fund) is used to account for the Countys solid waste disposal facilities and all activities necessary for the provision of this service. The Stormwater Utility Fund (a major fund) is used to account for the operations of the Countys Stormwater utility facilities and all activities necessary for the provision of this service. The Transit Fund (a non-major fund) is used to account for the operations of the public transportation activities and all revenues, including state and federal grants, and all expenses related to the operation of these services. Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the government and to other government units, on a cost reimbursement basis. The Countys internal service funds are: Fleet services, information technology, risk management, medical benefits, workers compensation, public works, field and general services and Sheriffs insurance. Additionally, the County reports the following fund types: A Permanent Fund is utilized to account for permanent endowments established for the benefit of the Countys library system. All principal is held in the permanent fund. Investment income is allocated to the specific endowments based on average cash balances and it is then transferred out for expenditure in accordance with laws, donor instructions, and County policy. Fiduciary Funds are used to account for assets held in a trustee or custodial capacity for others and therefore cannot be used to support the Countys own programs. The County utilizes a private-purpose trust fund to account for the receipt and expenditure transactions of the Sarasota County Law Library and utilizes custodial funds to account for abandoned property, bond money, and other resources held in a purely custodial capacity. 82
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