City of Laguna Niguel Adopted Budget For Fiscal Year 2024‐25 CLASSIFICATION OF FUNDS The accounts of the City are organized on the basis of funds. A fund is defined as an independent fiscal and accounting entity with a self-balancing set of accounts recording resources, together with all related liabilities, obligations, and equities, which are segregated for the purpose of carrying out specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations. The City currently uses the following funds: General Fund - The General Fund is used to account for the financial resources and expenditures associated with most City operations where revenue is not required to be recorded in a separate fund. Revenues collected in the General Fund are not restricted as to the program or purpose they may be spent upon. They are derived primarily from taxes which account for approximately 89% of all General Fund revenues. Other General Fund revenue sources include licenses and permits, fines and forfeitures, use of money and property, intergovernmental revenues, charges for services, and other miscellaneous revenues. Gas Tax Fund - Accounts for revenues received and expenditures made for general street maintenance. Financing is provided by the City’s share of state gasoline taxes collected under the Street and Highway Code, Sections 2103, 2105, 2106, 2107 and 2107.5. Sections 2103, 2105, 2106, and 2107 revenue can be used for street maintenance and construction, while Section 2107.5 revenue is restricted to street engineering activities. Measure “M2” Fund - Accounts for revenues received and expenditures made for street improvement and maintenance. Financing is provided by the City’s allocation of County Measure M2 funds. Ai r Quality Improvement Fund - Accounts for revenues received under AB2766 and expenditures made for air quality improvements. AB2766 was enacted to authorize air pollution control districts to impose fees on motor vehicles. The California Department of Motor Vehicles collects the fees by assessing an amount on each registered vehicle in the South Coast District. This fee is distributed by the South Coast Air Quality Management District to local governments on a prorated basis based on population in the area. Law Enforcement Fund - Accounts for various law enforcement revenues received and expenditures made for certain law enforcement and crime prevention expenditures in the Police Services Department. Financing is provided by the State of California’s Citizens Options for Public Safety (COPS) program and the Regional Narcotics Suppression Program. Community Development Block Grant Fund - Accounts for revenues received and expenditures made for Community Development Block Grant eligible grants and capital projects. Financing is provided by the U.S. Department of Housing and Urban Development. 117