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APPROVED BUDGET FISCAL YEAR 2022-2023

life of the infrastructure with very little impact on current operating costs. Many projects provide
substantial savings to the operating budgets by reducing maintenance costs.

Drainage Bond Funds account for the financing and construction of various drainage projects. All
drainage projects reduce operational costs for future years.

Water and Sewer Bond Funds account for capital improvement programs and capital equipment
financed by bond sales. Although this fund is part of the Enterprise Fund, it is included in this
section because the projects are addressed by priority and funding in the Capital Improvement
Program. The ongoing capital improvement program for the replacement of utility mains and
lines does not add operating costs to the Enterprise Fund budget.

The General Obligation Bond Fund will ensure all debt issued for voter approved projects is
appropriately expended. Creation of a separate GO bond fund also assists the City in complying
with arbitrage calculation requirements. New or expanded facilities constructed with GO bond
funds increase the city’s operational costs for utilities and maintenance.

Other Project Funds account for other project funds utilized by the City to manage pay-as-you-
go projects. For example, the Special Projects Fund is used to account for Council and City
Manager approved projects, which are funded by operational reserves.

BUDGETARY ACCOUNTING BASIS

Accounting procedures according to Section 5.11-3 of the City Charter shall be maintained to
record in detail all transactions affecting the acquisition, custodianship and disposition of
anything of value. They shall be reported to the City Council and to the public, as necessary, to
show the full effect of transactions upon the finances of the City. The City's accounting records
for general governmental operations are maintained on a modified accrual basis according to
Generally Accepted Accounting Principles (GAAP). The revenues are recorded when actually
received, and expenditures are recorded when the liability is incurred (for example, with
purchase orders). Accounting records for the City's utilities and other proprietary funds are
maintained on a full accrual basis with the exception of outstanding debt principal, which is
included in the budget. For example, expenditures are recognized when a liability is incurred, and
revenues are recognized when they are obligated to the City. Depreciation is budgeted as an
operating expense. The budgetary basis follows GAAP except that fund balances/retained
earnings are presented in the budget, a measure of available spendable resources. Unexpended
appropriations for budgeted funds lapse at fiscal yearend. Encumbrance accounting is used for
all funds; however, appropriations of Capital Bond Funds uses a full encumbrances method of
budgetary accounting which means that appropriations lapse at year end only to the extent of
the unencumbered balance. Revenues are budgeted on a cash basis. Indirect cost allocations to
the General Fund are considered revenues in budgeting, but are a reduction to expenditures in
the accounting system at year-end.

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