Page 78 - Forest Hill FY20 Annual Budget

CITY OF FOREST HILL

PROPRIETARY FUNDS

WATER / SEWER, STORM WATER

DRAINAGE, and SANITATION FUNDS

The Water and Sewer (Fund 60), Waterworks Construction (Fund 61), Sanitation (Fund 62), and Storm
Water Drainage (Fund 65) Funds comprise the City proprietary fund and accounts for all operations and
maintenance of the City’s water distribution, wastewater collection, trash, and drainage systems.
Revenues to support the Proprietary Fund are derived from user fees billed to commercial and
residential customers in the City. The Water and Sewer (Fund 60) is sometimes referred to as an
Enterprise Fund.

Proprietary Funds / Enterprise Funds are funds established to account for operations of an enterprise
activity that acts like a “for profit” entity. Enterprise funds generally are segregated as to purpose and
use from other funds and accounts of the governmental entity with the intent that revenues generated
by the enterprise activity and deposited to the enterprise fund will be devoted principally to funding all
operations of the enterprise activity, including payment of debt service on securities issued to finance
such activity. In some cases, however, the governmental entity may be permitted to use funds in an
enterprise fund for other purposes and to use other funds to pay costs otherwise payable from the
enterprise fund.

As a proprietary fund, the fund is accounted for on a full accrual basis, and is budgeted on a modified
accrual (working capital) basis. The proprietary fund is included in the annual operating budget of the
City.

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