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ADOPTED | BUDGET

Financial Plan

The Annual Budget and Capital Budget both serve as the financial plan for the City over the
upcoming fiscal year and outline significant infrastructure and equipment expenses identified in
future years. This plan is guided by the goals and objectives of the City Council and serves as a
financial planning tool for management. In addition it serves to guide the City in financing cost
effective services, programs, and capital needs; and at the same time focus on a stabilized tax
rate 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 ensure the
compliance of financial objectives.

Financial Structure
The City accounts for financial activities through fund accounting. A fund is an independent fiscal
entity with assets, liabilities, reserves, a residual balance or equity, and revenues and
expenditures for undertaking activities. Using these accounts, the revenues and expenditures
(expenses) are budgeted and approved before the beginning of each fiscal year by ordinance
passed by the City Council. All of the funds of the City can be divided into two categories:
governmental funds and proprietary funds. Governmental funds are used for most governmental
activities, while proprietary funds cover cost through user fees. Listed below is a description of the
funds maintained by the City and included in this document.

Governmental Funds

General Fund - accounts for all financial resources except those to be accounted for in another
fund. Resources are generated by property tax, sales tax and other general taxes, franchise fees,
fines, licenses and fees for services. Operating expenditures provide support for most traditional
tax-supported municipal services such as Police, Fire, Parks and Recreation, Libraries,
Neighborhood Services, Planning and Development, and Public Works operations.

Special Revenue Funds - account for the accumulation and disbursement of legally restricted
resources to expenditures for a specific purpose. Funds in this category include Park & Recreation
Facilities Development Fund, Crime Control & Prevention District Fund, Promotional Fund, Special
Investigation Fund, Drainage Utility Fund, Donations Fund, Gas Utility Fund and Traffic Safety
Fund.

Debt Service Funds - account for the accumulation of monies that are set aside to pay principal
and interest on debt incurred through the sale of bonds and other debt instruments. These bonds
finance long-term capital improvements to streets, utilities, and buildings.

Capital Project Funds ‐ account for the accumulation of resources designated to construct or
acquire capital facilities and improvements. Resources include proceeds from the sale of general
obligation bonds, revenue bonds, and certificates of obligation.
Proprietary Funds

Enterprise Funds - account for operations financed and operated in a manner similar to private a
business. The intent of the City is that the cost of providing the goods or services to the general
public on a continuing basis will be financed or recovered through user charges. The City
maintains the following enterprise funds: Utility Fund (Water & Sewer), Golf Course Fund, and the

Aquatic Park Fund.

93 NRH | TEXAS