Page 66 - Watauga FY21 Budget

BUDGET OVERVIEW

For financial reporting purposes, the accounts of the City are organized on the basis of
funds or account groups, each of which is considered a separate accounting entity. The
operations of each fund are accounted for with a separate set of self-balancing
accounts, which comprise its assets, liabilities, fund balance/retained earnings,
revenues, and expenditures/expenses.

Governmental Fund Types

Governmental Funds are those that fund most governmental functions of the City.
Governmental funds also account for the acquisition, use, and balances of the City’s
expendable financial resources and the related liabilities. The measurement focus is
upon determination of changes in financial position, rather than upon net income
determination. The following are the City’s governmental funds:

General Fund

The General Fund is the general operating fund of the City. All general tax
revenues and other receipts that are not restricted by law or contractual
agreements to some other fund are recorded in this fund. The General Fund also
records the general operating expenditures, the fixed charges, and the capital
improvement costs that are not paid through other funds.

Special Revenue Funds

There are three major Special Revenue Funds:

The Parks Development Corporation Sales Tax Fund was established to account
for a ½ cent sales tax increase approved by the voters in May 1994. The purpose
of the increase in sales tax is to build city parks and improve existing parks under
the supervision of the Watauga Parks Development Corporation. In FY2018-
2019 the corporation’s name was changed to Economic Development
Corporation and the focus was redirected to economic development.

In May, 2012, voters approved a reallocation of ¼ cent sales tax from the Parks
Development Corporation to the Street Maintenance Fund to provide for the
maintenance of existing city streets. The reallocation was effective October 1,
2012 and reauthorized by voters in May, 2016.

The Crime Control and Prevention District was established to account for a ½
cent sales tax increase approved by voters in March 1996. The purpose of the
increase in sales tax is to enhance law enforcement in the area. In 2001 voters
approved a ten-year extension of this tax. A ten-year extension was passed in
November, 2010.

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