Page 34 - CityofForestHillFY25AdoptedBudget

Fund Structure Chart (Continued)

GOVERNMENTAL FUND TYPES (CONTINUED)

The Debt Service Fund is used to account for tax revenues and for the payment of principal,
interest, and related costs on long-term debts for which a tax has been dedicated. Any unused
sinking fund balances are used to lower outstanding bonds. The Debt Service Fund appropriations
are adopted as part of the annual budget process. Debt Service Funds are accounted for and
budgeted on the modified accrual basis.

Capital Projects Funds are used to account for capital outlay projects financed from general debt
issued by the City. Capital Project Funds are not part of the annual budget process. Capital Project
Fund appropriations require specific action by the City Council, are adopted on an individual
project basis, and may be appropriated on a multi-year basis. General Capital Project funds are
accounted for and budgeted on the modified accrual basis.

These types of funds are also used to account for activities to plan the replacement of capital
transportation, information technology and other heavy equipment in accordance with
replacement schedules based on life of equipment and usage.

Enterprise / Proprietary Fund Types
The Water and Sewer Fund accounts for revenues and expenses on a full accrual basis. Water,
sewer, and solid waste services are delivered to the citizens and businesses of the City. The total
operating, capital and debt costs are recovered from the utility rates charged for the delivery of
these services. The Water and Sewer Operating Fund appropriations are adopted as part of the
annual budget process. The Water and Sewer Operating Fund is budgeted on the modified
accrual (working capital) basis.

Reconciliation between the net changes in working capital to the change in net assets GAAP
(Generally Accepted Accounting Principles) basis are provided in the utility fund summary
schedule in the Enterprise Funds section of this document. Water and Sewer Fund capital projects
are not part of the annual budget process.

Utility Capital Project Fund appropriations require specific action by the City Council, are adopted
on an individual project basis, and may be appropriated on a multi-year basis.

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