Page 20 - CityofKennedaleFY25AdoptedBudget

USING THIS DOCUMENT

The budget is created on a fund basis with similar activities, goals, and funding sources grouped
within each area. Each fund is self-balancing and is accounted for on its own. The General Fund,
which encompasses most operational activities, is primarily funded by maintenance and
operation ad valorem (property) tax, sales tax, and fees, and contains departmental line item
expense budgets.

The financial reporting entity (the city government) includes all funds of the primary
government (i.e., the City of Kennedale as legally defined), as well as each of its component
units. Component units are legally separate entities for which the primary government is
financially accountable. Discretely presented component units are legally separate entities and
not part of the primary government's operations. The Kennedale Economic Development
Corporation (EDC) is included in the budget and account records as a discretely presented
component unit.

It is the goal of operational funds like the General Fund, Stormwater Utility Fund, and Water
Sewer Fund, to have revenue that exceeds expenditures to maintain a healthy reserve balance.
Leadership aims to achieve and maintain an unassigned fund balance in the General Fund equal
to 18% (with a goal of 25%) of budgeted annual expenditures to be used for unanticipated
costs, unforeseen revenue fluctuations, or other adverse circumstances, as provided for in the
Fund Balance Policy, a copy of which is included in the Appendix Section.

The financial structure is defined by the City’s fund types. Funds are established for specific
revenues and expenditures related to certain activities of the City. They are further organized
into various groups to identify their purpose.

• Governmental Funds: Used to account for all government-type activities. These
activities consist of all financial resources that cannot be categorized into other funds.
• Proprietary Funds: Account for activities where the cost of providing services is financed
primarily through user charges. These funds operate similarly to a private business.
• Component Unit Funds: Account for activity related to the City’s only discretely
presented component unit, the Kennedale Economic Development Corporation (EDC).

The following chart identifies the City’s funds, organized by their fund type:

CITYOFKENNEDALE.COM/BUDGET 20