Page 40 - FY 2021-22 ADOPTED BUDGET

The General Fund’s 2021-22 Budget includes the payment of current ad valorem taxes for property located within
the Tax Increment Financing (TIF) area to the TIF Fund. The General Fund 2021-22 Budget includes the transfer of
General Fund reserves to the Capital Asset Replacement Account to finance capital outlays for the current year and
for future years through this special expense account.

BASIS OF BUDGETING

The information presented in the City's Budget Document is based on the same basis as the City's general ledger
accounting practices. The accounting policies of the City of Benbrook conform to generally accepted accounting
principles as applicable to governments. The City of Benbrook uses a modified accrual basis of accounting.

The 2021-22 Budget consists of the Operating Funds (Combined General Fund and Debt Service Fund). The
Operating Funds Budget is approved annually by the City Council through the adoption of an ordinance. City
Council also sets the property tax rate for the Operating Funds on an annual basis through the adoption of an
ordinance; separate property tax rates are adopted for the General Fund and for the Debt Service Fund.

GOVERNMENTAL FUNDS

Governmental funds are used to account for all or most of the City’s general activities, including the acquisition
or construction of general fixed assets and other improvements (Capital Projects Funds), and the servicing of
general long-term debt (Debt Service Fund). The General Fund is used to account for all activities of the general
government not accounted for in some other fund.

The various funds are grouped - in the City’s financial statements, financial reporting system, and budget
documents and reports – into generic fund types and broad fund categories as follows:

The General Fund is the main operating fund of the City. This fund is used to account for all financial resources
not accounted for in other funds. All general tax revenues and other receipts that are not restricted by law or
contractual agreement to another fund are accounted for in the General Fund. General operating expenditures,
fixed charges, and capital improvement costs that are not paid through other funds are paid from the General
Fund.

The Debt Service Fund is used to account for the accumulation of financial resources for the payment of principal,
interest, and other related costs on long-term debt paid primarily from taxes levied by the City. The fund balance
of the Debt Service Fund is reserved to signify the amounts that are restricted exclusively for debt service
expenditures.

BASIS OF ACCOUNTING

The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All
governmental funds are accounted using a current financial resources measurement focus. With this measurement
focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements

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