Page 55 - Hurst Adopted FY22 Budget

APPROVED FISCAL YEAR 2022 BUDGET

BUDGETARY ACCOUNTING BASIS

Accounting procedures according to Section 5.11-3 of the City Charter shall be
maintained to record in detail all transactions affecting the acquisition,
custodianship and disposition of anything of value. They shall be reported to the
City Council and to the public, as necessary, to show the full effect of transactions
upon the finances of the City. The City's accounting records for general
governmental operations are maintained on a modified accrual basis according to
Generally Accepted Accounting Principles (GAAP). The revenues are recorded
when actually received, and expenditures are recorded when the liability is The City’s Bond Ratings
incurred (for example, with purchase orders). Accounting records for the City's
utilities and other proprietary funds are maintained on a full accrual basis with the
exception of outstanding debt principal, which is included in the budget. For Moody’s
example, expenditures are recognized when a liability is incurred, and revenues Aa2
are recognized when they are obligated to the City. Depreciation is budgeted as
an operating expense. Standard & Poor’s
AA
The budgetary basis follows GAAP except that fund balances/retained earnings
are presented in the budget, a measure of available spendable resources.
Unexpended appropriations for budgeted funds lapse at fiscal yearend.
Encumbrance accounting is used for all funds; however, appropriations of Capital
Bond Funds uses a full encumbrances method of budgetary accounting which
means that appropriations lapse at year end only to the extent of the
unencumbered balance. Revenues are budgeted on a cash basis. Indirect cost
allocations to the General Fund are considered revenues in budgeting, but are a
reduction to expenditures in the accounting system at year-end.

BUDGET TYPE

For each operational fund, the FY 2022 Budget is a program budget prepared on a line item basis.
The comprehensive budgetary process requires line item justification by departments each year.
The City Manager then presents budget programs and special issues to the City Council, but line
item justifications are available for all budgetary requests if needed. The approved
operational budgets are included in the Annual Comprehensive Financial Report (ACFR) for
comparison purposes. Any excess revenues over expenditures for the General Fund are
transferred to the Special Projects Fund at the end of the fiscal year to purchase unfunded
budget needs approved by the City Council.

BOND RATING INFORMATION

The City issued Sales Tax Revenue Refunding Bonds and General Obligation Refunding Bonds in
fiscal years 2002-2003, 2003-2004, 2006-2007, 2008-2009, 2010-2011, 2011-2012,
2012-2013, 2014-2015, 2015-2016, 2016-2017 and 2019-2020. Proceeds from the sale of
these bonds were used to refund, or “refinance,” outstanding debt in order to achieve
savings for the City. Such financial management has allowed the City to maintain extremely
favorable ratings from bond rating agencies.
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