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APPROVED BUDGET FISCAL YEAR 2022-2023

1. Diligently monitor its compliance with bond covenants.
2. The City will maintain good communications with bond rating agencies regarding its financial
condition. The City’s present ratings are (Moody’s) Aa2 and (Standard & Poors) AA.
3. An analysis will be prepared for each long-term financing activity that shows the impact on
current and future budgets for debt service and General Fund Operations.
4. Debt capacity will be calculated annually. New debt will be issued only when sufficient capacity
exists under existing tax rates or when voters or the City Council approve an increase in the tax
rate to service new debt.

This policy and planned debt issuances will continue to be addressed in the City Council’s annual
strategic Planning meeting typically held in March each year.

FINANCIAL PLAN

PURPOSE OF FINANCIAL PLAN

The main purpose of a financial plan is to guide the City in financing cost effective services,
programs and capital needs, while focusing on a stabilized tax levy and appropriate levels for fees
and service charges as prescribed by approved financial objectives. The annual audit, internal
audits, and review of Monthly Financial Reports assure the compliance of financial objectives.

FUND ACCOUNTING

All City accounts are organized on the basis of funds, or account groups, and each is considered
a separate accounting entity. The operations of each fund are accounted for with a separate set
of self-balancing accounts. Using these accounts, the revenues and expenditures/expenses are
budgeted and approved before the beginning of each fiscal year by an ordinance passed by the
City Council.

The various funds are primarily grouped by two types, governmental fund and proprietary fund
types. Governmental funds finance most of the City's functions and include, but are not limited
to, the General Fund, Debt Service Fund, Special Revenue Fund, and Capital Projects Funds.
Proprietary funds are used to account for the City's organizations and activities which are similar
to those often found in the private sector. The Enterprise Fund is the City's main proprietary fund
and the Hurst Conference Center, Storm Drainage Utility, Information Technology, Fleet Services,
and Loss Reserve funds are the remaining proprietary funds. Governmental accounting further
classifies funds into major and non-major categories. The City’s major operating funds include:
The General Fund, Community Services, Half Cent Sales Tax Fund, Anti-Crime Fund, and
Enterprise Fund. All other debt service, capital projects and operational funds are considered

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