Page 39 - FY 2020-21 Budget Cover.pub

FUND BALANCE

1. The annual budget shall be presented to the City Council with each fund
reflecting an adequate fund balance. As the financial situation allows, the goal
for fund balance level in the City’s major operating funds will be at least 120 days
of that fund’s annual operating expenditures.

2. Fund balance that exceeds the minimum level established for each fund may be
appropriated for non-recurring capital projects or programs.

3. The City will exercise diligence in avoiding the appropriation of fund balance for
recurring operating expenditures. In the event fund balance is appropriated for
recurring operating expenditures to meet the needs of the Azle community, the
budget document shall include an explanation of the circumstances requiring the
appropriation of and the methods to be used to arrest the future use of fund
balance for operating expenditures.

FUND TRANSFERS

1. With the exception noted below, there will be no operating transfers between
funds. Any cost incurred by one fund to support operations of another shall be
charged directly to the fund.

2. Fund transfers may occur when surplus fund balances are used to support non-
recurring capital expenses or when needed to satisfy debt service obligations.

DEBT EXPENDITURES

1. The City will issue debt only to fund capital projects that cannot be supported by
current annual revenues.

2. To minimize interest payments on issued debt, the City will maintain a rapid debt
retirement policy by issuing debt maturities not exceeding twenty-five (25) years.
Retirement of debt principal will be structured to ensure constant annual debt
payments.

3. The City will attempt to maintain base bond ratings (prior to issuance) of A1
(Moody’s Investor Services) and A+ (Standard & Poor’s, Fitch Ratings) on its
general obligation debt.

4. When needed to minimize annual debt payments, the City will obtain insurance
for new debt issues.

City of Azle 2020-2021 Budget 28