Page 408 - Keller FY20 Approved Budget

2.3 At the end of each fiscal year, the City shall establish a goal that the fund balances of
each fund be within requirements of the Fund Balance Policy.

2.4 The City should endeavor to maintain a diversified and stable revenue base in order to
prevent overall revenue shortfalls as a result of periodic fluctuations in any one revenue source.
Each existing and potential revenue source will be re-examined annually.

2.5 The City shall use non-recurring resources and fund balances to fund non-recurring
expenditures. Recurring expenditures shall be funded with recurring revenues only.

2.6 User charges, rates and fees shall be established at a level related to the cost of providing
the services. These charges, rates and fees shall be reviewed not less than annually in order to
determine the appropriate level of funding anticipated to support the various related activities. In
order to mitigate the magnitude of rate increases necessary for the Water and Wastewater
Enterprise Fund, an independent cost of service study will be conducted at least every three (3)
years to review rate methodology and ensure revenues will meet future obligations. The cost of
service study shall include operating costs, anticipated capital improvements and use of
associated impact fees, provision for an adequate level of working capital, and requirements
necessary to meet all current and future revenue bond covenants.

2.7 Rates for water and wastewater enterprise activities shall be maintained at levels
sufficient to ensure that annual revenues will be available to pay all direct and indirect costs of
the enterprise activities, including costs of operation, capital improvements, maintenance, and
principal and interest requirements on outstanding debt, and interest and sinking fund and reserve
fund requirements. The City recognizes an obligation to provide water and wastewater services
to customers as economically as possible, while also maintaining the fiscal integrity of the Water
and Wastewater Enterprise Fund; therefore, the City will seek to pass through (recover) increases
in water supply costs and wastewater treatment services from customers of the City of Keller.

2.8 Net earnings of enterprise funds for any fiscal period should be adequate to meet all bond
covenants, especially the debt coverage ratio. Net earnings shall be defined to include non-
operating revenues available for debt service, excluding depreciation and transfers to other funds.

2.9 Enterprise funds shall adequately compensate the General Fund (and other applicable
funds) for administrative and/or management services provided to the enterprise funds. Transfers
from enterprise activities to the general fund for administrative services shall not exceed the esti-
mated costs incurred by the General Fund in providing such services. Payments in-lieu-of-taxes
and franchise fee payments shall be paid by enterprise funds to other appropriate funds. The
basis for each transfer shall be fully identified each year in the proposed budget.

2.10 A proposed budget for all budgeted funds shall be submitted to the City Council by the
City Manager on or before August 15 of each year, for the ensuing fiscal year. [Keller Charter,
Section 8.02]. The City Manager’s proposed budget shall be filed in accordance with State law
including filing with the Office of the City Secretary and at the Keller Public Library, and on the
City’s website.

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