Page 24 - CityofColleyvilleFY25AdoptedBudget

Financial Policies
The City of Colleyville's nancial policies are designed to establish and maintain effective long-term management of the
City's nancial resources. These policies aim to ensure a sound nancial condition, preserve the City’s creditworthiness,
and balance the needs of the community with their ability to pay. Below is a summary of the key nancial policies that
guide Colleyville’s nancial management:

Summar y of Financial Policies
Maintain a Balanced Budget: The City adopts a balanced budget each year, where current resources (revenues and
appropriated reserves) equal or exceed budgeted expenditures. Long-term debt is not used to nance current
operations, and non-recurring resources are used only for non-recurring expenditures.
Prudent Tax Rate Management: The City seeks to set the lowest tax rate possible while ensuring that it continues to
provide the high level of service residents expect. A tax rate increase will only be requested when necessary, and will
not be pursued if it is not needed.
Budgetary Control and Financial Reporting: The City exercises strong budgetary control with monthly reports
provided to the City Council, comparing budget versus actual performance, prior year actuals, and total annual
actuals.
Rate Stability and User Fees: The City seeks to avoid signi cant increases in taxes and user fees by anticipating and
phasing in any necessary changes. User fees are charged to cover the cost of services where appropriate, reducing
the reliance on property taxes.
Maintain Adequate Reserves: The City maintains reserves equivalent to three months of operating expenditures for
the General Fund and Utility Fund. These reserves provide a buffer for unforeseen contingencies and future capital
needs.
Debt Management: Debt is issued only when necessary and is structured to ensure that repayments do not exceed
the useful life of the nanced assets. The City adheres to a pay-as-you-go philosophy where feasible, with long-term
debt reserved for major capital projects.
Capital Planning and Investment: The City utilizes a rolling 5-year Capital Improvement Plan (CIP) to guide capital
acquisitions and improvements. Projects are prioritized based on their community impact, strategic alignment, and
risk management considerations.
Accounting and Auditing: The City follows GAAP and GASB principles, undergoes annual audits by an independent
CPA rm, and maintains internal controls to safeguard assets and ensure nancial accuracy.

Balanced Budget
The City ensures a balanced budget for all funds subject to appropriation, with current revenues and reserves meeting
budgeted expenditures. Long-term debt is never used to nance operating expenses, and non-recurring revenues are
allocated exclusively to one-time expenditures to maintain nancial sustainability.

Tax Rate
Colleyville aims to set the lowest tax rate possible while maintaining high-quality services. Tax rate increases are
considered only when necessary to sustain service levels. This scally responsible approach ensures careful stewardship
of taxpayer funds.

Annual Budget and Budgetar y Control
The City prepares an annual budget, detailing sources and uses of funds, with public hearings for transparency. Monthly
nancial reports compare budgeted versus actual performance, prior year results, and total annual actuals, ensuring
close monitoring. Year-end surpluses not required for reserves are allocated to capital projects to meet long-term
infrastructure goals.

Rate Stability and User Fees
To minimize nancial impacts on residents, the City stabilizes rates and avoids sudden increases in taxes and user fees.
User fees recover costs where services exceed basic municipal functions. In cases where full cost recovery is impractical,
fees are set to partially offset costs. Utility rates are reviewed annually to cover operating costs, bond covenant
requirements, and capital improvements, ensuring the sustainability of services.

Reser ves
The City of Colleyville maintains reserves equivalent to three months of operating expenses for the General Fund and
Utility Fund. These reserves provide nancial stability and allow the City to manage unforeseen scal challenges, such as
economic uctuations, legal matters, changes in tax rolls, variations in sales tax receipts, and revenue uctuations from
city-operated utilities. This reserve policy applies to all major operating funds of the City.

City of Colleyville | Budget Book 2025 Page 24