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Processes and Policies

Budgeting Philosophy and Basis of Budgeting

Budgeting Philosophy

The City Council is responsible for legislation, policy formulation, and the overall direction of the government. This
includes the approval of financial policies that establish and direct the operations of the City of Fort Worth. The
city manager is responsible for carrying out the policy directives of the City Council and managing the day-to-day
operations of the executive departments.

The City’s framework for fiscal decision-making is a comprehensive set of Financial Management Policy
Statements. As required by charter, the City adopts an annual balanced budget for which the level of expenditures
for each department or fund may not legally exceed the appropriations for that department or fund. The budget
is prepared in a manner that reflects the full cost of providing services. Estimated beginning fund balance/net
position, estimated revenues and receipts, appropriations and the estimated year-end fund balance/net position
for key operating funds can be found in the Citywide Fund Balance Summary in the Budget Highlights section of
this document.

The City shall take an objective and analytical approach to forecasting revenues, expenditures, and expenses as
accurately as possible. While absolute certainty is impossible, should revenues or expenditures be inaccurate,
necessary corrections will be completed to bring the budget into balance.

The overall budget appropriation may be increased via a supplemental appropriation ordinance that allocates
funds that are certified as being more than those included in the budget but unencumbered. Amendments shall
be considered and adopted by the City Council except for specific adjustments when limited authority is delegated
to the city manager.

The city manager, as empowered by the charter, may transfer part or all of any unencumbered appropriation
balance among programs within a department upon compliance with any conditions established by the City
Council. Upon request by the city manager, the City Council may transfer part or all of any unencumbered
appropriation balance from one department to another through an appropriation ordinance.

Basis of Budgeting

The City budgets for governmental funds, which include the general fund, capital project funds, special revenue
funds, and debt service funds, are prepared using the modified accrual basis of accounting; with the exception of
a change in the fair value of investments that are not treated as adjustments to revenue in the annual operating
budget.

The budgets for all proprietary funds, which include enterprise funds and internal service funds, are prepared
using the full accrual basis of accounting. Internal service funds are maintained to account for services provided
primarily to departments within the City. Under this method, with limited exceptions, revenues are recorded
when they become measurable and available to pay expenses, and expenses are recorded at the time liabilities
are incurred. Exceptions to the foregoing general principles for the operating budget are:
· Changes in the fair value of investments are not treated as adjustments to revenue
· Debt service and capital lease principal payments are treated as expenses
· Depreciation expense is not recognized
· Capital purchases are recognized as expenses

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