Which of the following correctly denotes the function of capital projects funds?

The correct answer highlights the primary purpose of capital projects funds, which is to account for the resources and expenditures related to the acquisition or construction of long-term capital assets. These funds are specifically designed to track financial activities related to projects such as infrastructure development, facility construction, or the purchase of significant equipment. By segregating these transactions, capital projects funds provide better transparency and accountability for capital expenditures, which may be funded through bonds, grants, or other financing mechanisms.

The other options, while they contain components of financial management, do not accurately describe the function of capital projects funds. Reserving resources for future improvements relates more to general fund management and planning rather than the accounting specific to capital projects. Managing special assessment debt pertains to a different financial instrument used for funding specific neighborhood improvements and is not directly tied to capital projects funds either. Lastly, daily operating expenses fall under operating funds, which are used for routine governmental activities rather than specific capital projects.