Page 55 - Southlake FY20 Budget

Budget 101

The communications plan includes:
• Public hearings;
• Live, televised coverage of City Council work sessions, meetings and public hearings;
• Presentations to advisory boards and commissions;
• Access to all volumes of the Proposed and Adopted budgets through the Southlake Public Library system; and,
• Internet access to all budget documents and videos of public meetings at www.CityofSouthlake.com.

Basis of Accounting
The City of Southlake utilizes the modified accrual basis of accounting which is a method of accounting for revenues
and expenses when earned or incurred instead of when cash is received or spent.

Basis of Budgeting
The City of Southlake’s basis of budgeting for its major fund groups (General Fund, Utility Fund, Storm Water Utility
Fund, Southlake Parks Development Corporation Fund, Crime Control & Prevention District Fund and Tax Increment
Finance District Fund) and for all Special Revenue Funds is modified accrual, per the Generally Accepted Accounting
Principles (GAAP).

Revenues are budgeted according to when they are both measurable and available. Revenues are considered to be
available when they are collected within the current period, or soon enough thereafter to pay liabilities of the current
period. The City considers property taxes, franchise taxes, licenses, and interest associated with the current fiscal
period susceptible to accrual if they are collected within 60 days of the end of the current fiscal period. Only the
portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual
as revenue of the current period. All other revenue items are considered to be measurable and available only when
cash is received.

Expenditures are budgeted according to when the liability is incurred, regardless of the timing of related cash flow.
The exceptions are debt service, compensated absences, claims and judgments, which are budgeted as expenditures
according to when the payments are due. The City’s basis of budgeting is the same as the basis of accounting, as
reflected in the City’s Comprehensive Annual Financial Report (CAFR).

How the Budget is Amended
The City of Southlake Charter Sections 9.20 through 9.25 defines the process for budget amendments (see Appendix).
To meet these charter requirements, budget amendment requests, if necessary, are evaluated and processed each
year and presented to City Council for review and approval.

Structural Balance
The budget is structurally balanced which means the expenditures do not exceed the City’s projected revenues. Each
department operates from a base budget, in other words, the monies needed to operate at the current level of service.
In its review of the submitted budgets, the City Manager’s Office not only considers any new base budget numbers but
also any supplemental requests recommended by the executive leadership team. This process prevents incremental
budget “creep,” requiring departments to justify their supplemental requests each year, rather than embedding
them in line items where they are not easily identified. Supplemental requests for each department are brought
forth by department directors, then the executive team of directors reviews and ranks the requests according to a
set of criteria, prioritizing those requests most essential for meeting the City’s strategic objectives. This allows all
departments to weigh the needs across the City as a whole and present those requests that bring the greatest benefit
to the community. The overall process allows the City Manager’s Office to review the budget more thoroughly before
it is submitted to City Council.

54 www.CityofSouthlake.com