What is Depreciation? How does the City manage it?

Depreciation is a non-cash expense that reduces the value of an asset as a result of wear and tear, age, or obsolescence and recognizes the expense for an asset over its useful life (rather than all at once when the asset is purchased). Most assets are depreciable because they lose their value over time and must be replaced. Land and related items are not depreciable. The City recognizes depreciation in all funds in accordance with generally accepted accounting principles for Government Wide statements required for the Comprehensive Annual Financial Report (CAFR). However, the City is also statutorily required to recognize depreciation in its utility rate structure (§15-7-407) so that income generated by rates is sufficient to fund future replacements. In the Financial Outlook Report the depreciation is stated as a “memo” only number and is not included in the report of actual expenditures. This allows the reader to compare how much the City is funding in capital and equipment related to the depreciated number.

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1. What is the General Fund?
2. What are the primary General Fund revenue sources?
3. What is the 4th Cent Sales & Use Tax and how is it allocated?
4. What is the 5th Cent Sales & Use Tax (local option) and how is it allocated?
5. We have a 6th cent specific purpose tax (1% SPT local option) in Albany County. Why don’t I see it in General Fund revenue sources? How is this tax being managed?
6. How much debt can the City carry?
7. What are the current types of general fund debt and the terms associated with the debt?
8. What is an Enterprise Fund?
9. What types of enterprise fund debt are held by the City and what are the terms associated with that debt?
10. What determines how much the City can spend?
11. What is the City’s Bond Rating?
12. What is Depreciation? How does the City manage it?
13. What are Fund Balance and Net Position?
14. What do the different components of fund balance mean?
15. What is a Modified Balance Sheet?
16. What are the Days of Operation Reserves?
17. What are the Recreation Center’s primary revenue sources?
18. What is the percent of Cost Recovery for the Recreation Center?
19. What is the Enterprise Fund Shared Services Transfer?
20. How does the City plan its budget for Enterprise Funds?
21. Are the revenues in the Enterprise fund only user fees?
22. How does the Financial Outlook Report differ from the Comprehensive Annual Financial Report (CAFR)?