Page 47 - City of Bedford FY20 Approved Budget

III. OPERATING BUDGET MANAGEMENT

BUDGETARY ACCOUNTING BASIS. 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. Accounting records for the City’s
utilities and other proprietary funds are maintained on a full accrual basis. 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. Capital purchases
for the proprietary funds are listed in the budget document in order that proposed purchases can
be reviewed by the City Council. The budgetary accounting basis follows GAAP except that
fund balances/retained earnings are presented in the budget as a measure of available spendable
resources. Unexpended appropriations for budgeted funds lapse at fiscal year end, except for
appropriations for Capital Project Funds, which are for the length of the project.

OVERVIEW. Budgeting is an essential element of the financial planning, control and
evaluation process of municipal government. The City’s “operating budget” is the City’s annual
financial operating plan. It comprises governmental and proprietary funds, including the Debt
Service Fund, and various capital improvement funds.

PREPARATION. The budget is prepared by the City Manager with the cooperation of all City
departments, and is submitted to the City Council. The budget should be presented to the City
Council no later than forty-five (45) days prior to fiscal year end, and should be enacted by the
City Council prior to fiscal year end.

The budget shall include four basic segments for review and evaluation. These segments are:

(1) Personnel Costs;
(2) Base Budget for Operations and Maintenance Costs;
(3) Supplemental Funding Packages for Capital and Other Non-capital Projects (i.e.,
new or expanded programs); and
(4) Projected Revenues.

The base budget represents funding for the current level of service, and does not include capital
outlay, new programs or new services. Any increase in the base budget request will be limited to
no more than the average of the Consumer Price Index (CPI) for the most recent three-year
period available. Any item requested for capital outlay, new programs or new services is shown
as a Supplemental Funding Package. Supplemental Funding Packages are above and beyond the
prior year base, and are considered individually for funding approval.

A Combined Budget Summary with scheduled inter-fund transfers is included in the budget
presented to the City Council. The Fund Balances will be identified as to restricted and
unrestricted, designated and/or reserved.

The budget review process shall include Council participation in the development of each of the
four segments of the proposed budget and a Public Hearing to allow for citizen participation in
the budget preparation.

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