Page 39 - CITY OF AZLE, TEXAS
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FUND BALANCE

                   1.  The annual budget shall be  presented to  the  City Council with each fund
                       reflecting an adequate fund balance.  As the financial situation allows, the goal
                       for fund balance level in the City’s major operating funds will be at least 120 days
                       of that fund’s annual operating expenditures.

                   2.  Fund balance that exceeds the minimum level established for each fund may be
                       appropriated for non-recurring capital projects or programs.

                   3.  The City will exercise diligence in avoiding the appropriation of fund balance for
                       recurring operating expenditures.  In the event fund balance is appropriated for
                       recurring operating expenditures to meet the needs of the Azle community, the
                       budget document shall include an explanation of the circumstances requiring the
                       appropriation  of and the methods to be  used to  arrest the  future use of fund
                       balance for operating expenditures.

               DEBT EXPENDITURES

                   1.  The City will issue debt only to fund capital projects that cannot be supported by
                       current annual revenues.

                   2.  To minimize interest payments on issued debt, the City will maintain a rapid debt
                       retirement policy by issuing debt maturities not exceeding twenty-five (25) years.
                       Retirement of debt  principal will be structured to ensure constant annual debt
                       payments.

                   3.  The City will attempt  to  maintain  base bond ratings (prior to issuance) of A1
                       (Moody’s Investor  Services) and A+ (Standard &  Poor’s, Fitch Ratings) on  its
                       general obligation debt.

                   4.  When needed to minimize annual debt payments, the City will obtain insurance
                       for new debt issues.

               CAPITAL PROJECT EXPENDITURES

                   1.  The City will develop  a multi-year plan for  capital  projects, which identifies all
                       projects likely to be constructed within a five year horizon.  The multi-year plan
                       will reflect for each project the likely source of funding and attempt to quantify the
                       project’s impact to future operating expenditures.

                   2.  Capital projects will be constructed to:

                          a.  Protect or improve the community’s quality of life.
                          b.  Protect and enhance the community’s economic vitality.
                          c.  Support and service new development.





               City of Azle FY 2022-2023 Budget                                                            28
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