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FINANCIAL ANALYSIS OF THE CITY'S FUNDS (CONTINUED) <br />The Enterprise Funds consist of the Water Utility Fund, Sewer Utility Fund, Street Light Utility Fund, Recycling <br />Utility Fund, and Storm Water Utility Fund. <br />CAPITAL ASSETS AND LONG-TERM LIABILITIES <br />Capital Assets — The City's investment in capital assets (net of accumulated depreciation) for its governmental <br />and business -type activities as of December 31, 2025 are as follows: <br />Governmental Activities Business -Type Activities Total <br />2025 2024 2025 2024 2025 2024 <br />Capital assets - not depreciated $ 11,797,451 $ 19,744,715 $ 35,551,809 $ 23,943,526 $ 47,349,260 $ 43,688,241 <br />Capital assets - depreciated 107,759,535 91,451,714 78,627,715 73,877,561 186,387,250 165,329,275 <br />Total capital assets, net of depreciation $119,556,986 $1 11,196,429 $114,179,524 $ 97,821,087 $233,736,510 $209,017,516 <br />Depreciation expense $ 6,565,986 $ 5,844,465 $ 2,418,234 $ 2,265,148 $ 8,984,220 $ 8,109,613 <br />The City's investment in capital assets for its governmental and business -type activities as of December 31, 2025 <br />amounts to approximately $234 million (net of accumulated depreciation). <br />The governmental activities show a net increase of $8,360,557 in capital assets attributable to the construction <br />and reconstruction of City streets. Business -type activities show a net increase of $16,358,437 in capital assets. <br />The increase is attributable to the construction of a water treatment plant. Additional details of capital asset <br />activity for the year can be found in Note 5 of the notes to basic financial statements. <br />Long -Term Liabilities — The Debt Service Funds account for the accumulation of resources to finance all of <br />the City's governmental activity general obligation bonds. The revenue sources for these funds include annual <br />tax levies and special assessments. At year-end, the City had fund balance of $622,753 restricted for debt service. <br />The following table summarizes the City's long-term liabilities: <br />Governmental Activities Business -Type Activities Total <br />2025 2024 2025 2024 2025 2024 <br />Governmental activities <br />G.O. improvement bonds $ 33,875,000 $ 36,740,000 $ — $ $ 33,875,000 $ 36,740,000 <br />Capital equipment certificates 1,180,000 1,295,000 — — 1,180,000 1,295,000 <br />Unamortized bond premiums 1,730,740 1,915,176 — — 1,730,740 1,915,176 <br />Compensated absences payable 1,467,069 1,270,328 — — 1,467,069 1,270,328 <br />Net pension liability 4,936,498 5,448,915 — — 4,936,498 5,448,915 <br />Total OPEB liability 1,457,811 1,379,460 — — 1,457,811 1,379,460 <br />Business -type activities — Net pension liability 362,265 370,664 362,265 370,664 <br />Total $ 44,647,118 $ 48,048,879 $ 362,265 $ 370,664 $ 45,009,383 $ 48,419,543 <br />During the current fiscal year, the City saw a decrease of $2,980,000 in bonds and certificates. Compensated <br />absences liability increased by $196,741. Net pension liability saw a decrease of $520,816 to reflect the change <br />in the City's proportionate share of the state-wide PERA pension plan obligations. Other Post -Employment <br />Benefits (OPEB) increased $78,351 due to experience losses. <br />35 <br />