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THE BUDGET AS A POLICY DOCUMENT

The City Council has approved the adoption of financial policies that outline a budget process that
encompasses the broad scope of governmental planning and decision-making with regard to the use
of public resources. The Government Finance Officers Association (GFOA) and the National
Advisory Council on State and Local Budgeting (NACSLB) have endorsed these policies.

Financial Planning Policies

Section 9.14 of the Grapevine Code of Ordinances establishes a policy to maintain a prudent level
of financial resources to protect against one-time expenditures. Provision is made for a contingent
appropriation of not more than three percent of the total budget, to be used in case of unforeseen
items of expenditure. Such contingent appropriation shall be under the control of the city manager,
and distributed after approval of the City Council.

Section 9.15 of the Grapevine Code of Ordinances establishes a balanced budget provision for the
General and Debt Service funds. Total estimated expenditures within these funds shall not exceed
the total estimated resources

Section 9.16 of the Grapevine Code of Ordinances provides for disclosure when a deviation from a
balanced budget is necessary. The budget may be amended and appropriations altered in cases of
public necessity, upon declaration of the City Council.

Section 10.31 of the Grapevine Code of Ordinances establishes policies and guidelines governing
cash management and investment of City funds. Safety of principal is the foremost objective of the
City in managing its portfolio. The City will also maintain sufficient liquidity to provide adequate
and timely working funds.

Section B, Number 5.0 of the Grapevine Administrative Policy Manual establishes the fund balance
reserve policy to ensure fund availability for unforeseen emergencies that would severely impact the
City’s ability to pay for basic operations and guarantee the payment of debt obligations. Any
exceptions are to be noted at the time the budget is approved. The emergency reserve is established
at the following minimum levels:
o General Fund – 20% (72 days) of total current budgeted expenditures.
o Debt Service Fund – 20% (72 days) of total current budgeted net debt service expenditures.
o Convention & Visitors Fund – 16% (60 days) of total current budgeted expenditures.
o Utility Enterprise Fund – working capital reserves of 16% (60 days) of total budgeted
expenses.
o Lake Enterprise Fund – working capital reserves of 25% (90 days) of total budgeted
expenses.

Section B, Number 14.0 of the Grapevine Administrative Policy Manual outlines the fixed asset
capitalization policy, which establishes a uniform and consistent standard for the capitalization of
fixed assets owned by the City. This policy also establishes the procedure to inventory and assess
the condition of all major capital assets.

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