Page 104 - Hurst FY19 Approved Budget

Budgetary Accounting Basis

Accounting procedures according to Section 5.11-3 of the City Charter shall be
maintained to record in detail all transactions affecting the acquisition, custodianship
and disposition of anything of value. They shall be reported to the City Council and
to the public, as necessary, to show the full effect of transactions upon the finances
of the City. The City’s accounting records for general governmental operations are
maintained on a modified accrual basis according to Generally Accepted Accounting
Principles (GAAP). The revenues are recorded when actually received, and expenditures
are recorded when the liability is incurred (for example, with purchase orders).
Accounting records for the City’s utilities and other proprietary funds are maintained on
a full accrual basis with the exception of outstanding debt principal, which is included
in the budget. For example, expenditures are recognized when a liability is incurred,
and revenues are recognized when they are obligated to the City. Depreciation is
budgeted as an operating expense. The budgetary basis follows GAAP except that
fund balances/retained earnings are presented in the budget, a measure of available
spendable resources. Unexpended appropriations for budgeted funds lapse at fiscal
year end. Encumbrance accounting is used for all funds; however, appropriations of
Capital Bond Funds uses a full encumbrances method of budgetary accounting which
means that appropriations lapse at year end only to the extent of the unencumbered
balance. Revenues are budgeted on a cash basis. Indirect cost allocations to the General
Fund are considered revenues in budgeting, but are a reduction to expenditures in the
accounting system at year-end.

Budget Type

For each operational fund, the 2018-2019 Budget is a program budget prepared on a
line item basis. The comprehensive budgetary process requires line item justification
by departments each year. The City Manager then presents budget programs and
special issues to the City Council, but line item justifications are available for all
budgetary requests if needed. The approved operational budgets are included in the
Comprehensive Annual Financial Report (CAFR) for comparison purposes. Any excess
revenues over expenditures for the General Fund are transferred to the Special Projects
Fund at the end of the fiscal year to purchase unfunded budget needs approved by the
City Council.

Bond Rating Information

The City issued Sales Tax Revenue Refunding Bonds and General Obligation Refunding
Bonds in fiscal years 2002-2003, 2003-2004, 2006-2007, 2008-2009, 2010-2011, 2011-
2012, 2012-2013, 2014-2015, 2015-2016, and 2016-2017. Proceeds from the sale of these

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