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BUDGET OVERVIEW

The budget is an essential element of the financial planning, control, and evaluation process of municipal
government. The operating budget is the Town’s documented annual financial operating plan. The budget
includes all operating departments, debt service funds, capital projects funds, and the internal service funds of
the Town. The budget is a resource tool for Town Council, staff, and the citizens of Westlake.

BASIS OF ACCOUNTING & BUDGETING

The Town records and reports all financial transactions using standard set by the Governmental Accounting
Standards Board (GASB) and General Accepted Accounting Principles (GAAP).

The Town utilizes the modified accrual basis of accounting and budgeting for governmental funds ( General Fund,
Special Revenue Funds, Debt Service Funds, Capital Project Funds and Academic Funds). Revenues are accounted and
budgeted when they are measurable and available. Expenditures are accounted and budgeted when the liability is
incurred.

For proprietary funds ( Enterprise and Internal Service Funds), the Town uses a full accrual basis of accounting and
budgeting. Revenues or expenses are recorded when a transaction occurred.

The Town’s financials are fully reconciled to the accounting system at the beginning of the fiscal year when the budget
is proposed and at the end of the fiscal year in the Comprehensive Annual Financial Report. GAAP adjustments are
made to reflect balance sheet requirements and their effect on the budget. These include changes in designations and
recognition of accrued liabilities.

BUDGET PROCESS

The Town’s fiscal year begins on October 1st and ends on September 30th. The budget is prepared by the Town
Manager in collaboration with department directors.

PREPARATION
The budget preparation process begins early in the calendar year with the establishment of overall town goals,
objectives, and analysis of current year operations compared to expenditures. Budget policies and procedures
are reviewed at the same time to reduce errors and omissions.

The finance department forecasts current year revenues. To maintain a stable level of services, the Town uses a
conservative, objective, and analytical approach when preparing revenue estimates. The process includes analysis
of probable economic changes and their impacts on revenues, historical collection rates, and trends in revenues.
This approach reduces the likelihood of actual revenues falling short of budget estimates during the year and
should avoid mid-year service reductions.

As per State Law, current operating revenues, including Property Tax Reduction Sales Tax ( which can be used for
operations), will be sufficient to support current operating expenditures. Annually recurring revenue will not be less
than annually recurring operating budget expenditures ( operating budget minus capital outlay). Debt or bond
financing will not be used to finance current expenditures.

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