Page 35 - City of Mansfield FY22 Operarting Budget

BALANCED BUDGET POLICY

The City of Mansfield has adopted a balanced budget for all funds. Current appropriations in all funds are
limited to the sum available, unencumbered cash balances and revenues estimated to be received in the
current budget period. Expenditure and subsidy appropriations for mandated and priority programs are to
be made against current revenue sources and not dependent upon uncertain reserves or fluctuating prior
period fund balances. To the extent possible, current operations will be funded by current revenues. The
use of unencumbered prior period balances in all funds shall be scrutinized and carefully limited and
subject to review by the City Manager and City Council.

BUDGET CONTROL

As set forth in the City Charter, the City Council adopts an annual budget prepared in accordance with
Generally Accepted Accounting Principles. The City Manager may transfer part or all of any
unencumbered appropriation balance among programs within a department. The City Council may
require their approval of these transfers if the transfers exceed the adopted budget for each fund.

All unused appropriations, except appropriations for capital expenditures, lapse at the close of the fiscal
year to the extent they have not been expended or encumbered. An appropriation for a capital expenditure
shall continue in force until the purpose for which it was made has been accomplished or abandoned. The
purpose of any such appropriation shall be deemed abandoned if three years pass without any
disbursement from or encumbrance of the appropriation.

AMENDMENTS TO THE BUDGET

The City of Mansfield operating budget is adopted at the department level. Any transfers that exceed
budgeted expenditures may require City Council approval. Any change orders to budgeted capital
improvement projects must be approved by City Council.

USE OF CONTINGENCY RESERVE

When additional funding is required to offset unexpected revenue shortfalls, unexpected expenditure
increases or events that threaten the public health or safety, contingency operating funds may be
authorized by the City Manager and/or City Council so that budgeted service levels can be maintained.

FUND ORGANIZATION

The accounts of the City are organized on the basis of funds, each of which is considered to be a separate
accounting entity. The operations of each fund are accounted for with a separate set of self-balancing
accounts. Governmental resources are allocated to and accounted for in individual funds based upon the
purpose for which they are to be spent and the means by which spending activities are controlled.

GOVERNMENTAL FUND TYPES:

General Fund

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

35