Page 20 - Kennedale Budget FY21

USING THIS DOCUMENT

Thank you for taking the time to learn more about the City of Kennedale’s finances. It can be said that the
true priorities of a City are expressed within its budget (also called a Program of Services). This document

serves as guidance to leadership throughout the fiscal year and staff’s aim is to provide as much information
as possible in a format that is easily digested. It begins with a high level overview before delving into
individual funds, departments, and line items. When possible, charts, graphs, and trends are also provided.

The budget is created on a fund basis with similar activities, goals, and funding sources grouped within each.
The first major fund group are the Governmental Funds, which encompasses all major activities and is

primarily funded by ad valorem (property) tax, sales tax, and fees.

Within the Governmental Fund are the General, Debt Service, Other General, Special Revenue, and
Capital Projects Funds. Some of these each house multiple funds as well (e.g., the Street Fund is nested under
Other General Funds), and some contain entire departments (e.g., the Police Department is in the General Fund).

The expenditures of each department within a fund are added together to create the total fund

expenditures. It is the goal of each fund to take in more money than it spends while maintaining a healthy
reserve balance. Leadership aims to achieve and maintain an unassigned fund balance in the General Fund
equal to 18% (with a goal of 25%) of budgeted annual expenditures to be used for unanticipated costs,
unforeseen revenue fluctuations, or other adverse circumstances.

The basis of accounting and budgeting for general government operations are maintained on a modified

accrual basis, with revenues being recorded when available and measurable expenditures being recorded
when the services or goods are received and liabilities incurred. Budgeting and accounting records for the
City’s utilities are maintained on the accrual basis.

The next major fund group is Enterprise Funds, which are run more like a business than a government,
with a goal of service charges covering all expenditures. The Water Sewer Fund falls within this category.

The final major fund group is Economic Development Corporation (EDC) Funds. The EDC is a

component unit of the City with its own board, but with ultimate authority resting with the City.

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