Page 114 - Pantego FY22 Operating Budget

the adopted budget is not exceeded. Expenditures more than the adopted
budget appropriations for each fund require budget amendments.

11. Encumbrances. Encumbrances outstanding at the end of each fiscal year shall
expire at the end of the fiscal year, except for capital project funds. These shall
be reflected as reservations of fund balance. Subsequent year's payments on
previously encumbered capital project funds will be reflected as expenditures of
the prior year with a corresponding decrease of the reservation of fund balance.

B. BALANCED BUDGET. The operating budget will be balanced with current revenues and
other resources greater than or equal to current expenditures/expenses. Use of
beginning balances and other reserves to balance operations will be disclosed in the
document with the underlying rationale. The adoption of a balanced budget, where
current resources (current revenues plus fund balance or unassigned fund balance) shall
be required. Current resources will equal or exceed current expenditures for each
individual fund.

C. REPORTING. Monthly financial reports will be prepared to enable the Department
Managers/Directors to manage their budgets and to enable the Finance Director to
monitor and control the budget as authorized by the Town Manager. Such reports will be
in format appropriate to enable Council to understand the budget status at a level of
summary executive detail.

D. CONTROL. Operating Expenditure Control is addressed in Section VI-C.

E. ACTIVITY INDICATORS AND STATISTICS. Where appropriate, activity indicators and
statistics will be used as guidelines and reviewed for efficiency and effectiveness. This
information will be considered in the annual budgeting process and reported to the Town
Council regularly. The proposed annual budget shall integrate performance measures,
goals and objectives, service levels and productivity measures where appropriate.

F. OPERATING POSITION. The guidelines that the Town should be following to assure
fiscal stability are those outlined in Financial Condition/ Reserves/Stability Ratios
(Section IX - A and B).

V. REVENUE MANAGEMENT

A. ANNUAL ESTIMATES. Annual estimates of revenue in both the General Fund and
Proprietary Funds shall be based on historical trends and reasonable expectation of
growth. A conservative approach shall be observed in estimating revenues, so that
revenue estimates will not be overstated. The Town will strive for the following optimum
characteristics in its revenue system:

1. SIMPLICITY. The Town, where possible and without sacrificing accuracy, will strive
to keep the revenue system simple to reduce compliance costs and to make it more
understandable to the taxpayer or service recipient. The Town will avoid nuisance
taxes or charges as revenue source.

2. CERTAINTY. A knowledge and understanding of revenue sources increase the
reliability of the revenue system. The Town will understand its revenue sources and

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