Page 27 - ClearGov | Documents

Debt Policies

The City follows prudent debt management , preferring pay-as-you- go {nancing where possible. Debt is issued only for
capital projects and is structured with level repayment schedules. The City avoids balloon payments, and any revenue
bonds are issued with a coverage ratio of at least 1. 25 times the average annual principal and interest requirements. All
debt issuances are carefully matched to project needs, and any required arbitrage rebates are calculated annually.

Accounting and Auditing Policy

The City of Colleyville adheres to GA AP and follows the standards set by the Governmental Accounting Standards Board
(GASB). The City's accounting practices include:

Modi{ed accrual accounting for governmental funds, ensuring revenues are recognized when measurable and
available, and expenditures when liabilities are incurred.
Full accrual accounting for proprietary funds, recognizing revenues when earned and expenses when incurred.

The City undergoes an annual audit by an independent CPA {rm to assess {nancial statements' accuracy and compliance
with GA AP. An audit committee meets periodically throughout the year to oversee the audit process, with the results
presented to the City Council and posted on the City's website. Any audit {ndings are transparently repor ted and
addressed by management .

The City maintains internal controls designed to prevent fraud and ensure {nancial accuracy. These controls are reviewed
by the Finance Depar tment and the City Manager's Of{ce, which have the authority to conduct internal reviews. Fraud
prevention is integrated within the internal control framework .

Budget monitoring is conducted monthly by the Finance Depar tment and depar tment heads, with regular presentations
made to the City Council. The City complies with all federal and state regulations regarding grant management , and audit
repor ts are publicly available online.

The City's history of clean audit opinions re|ects its strong commitment to {nancial transparency and responsible
management . In the event of audit {ndings, management , par ticularly the Finance Director, is responsible for responding
and implementing corrective actions.

Deposits and Investment Policies

The City's investment activities are governed by state statutes and the City's written Investment Policy and Strategy. The
primary objectives, in compliance with state law, are to preser ve capital, provide liquidity, and maximize earnings while
prioritizing capital preser vation and liquidity. All City funds are deposited in FDIC-insured banks within the City. Deposits
held at authorized depositories are fully collateralized by securities, held by an independent third par ty, to ensure the
security of City funds.

Interfund Transfers

Interfund charges are applied based on material costs, and only when deemed substantial. These charges are determined
case -by- case to ensure operational ef{ciency.
Pension Plans and Other Long- term Liabilities

To ensure future {nancial stability and prevent undue burden on future generations, the City fully funds pension and other
long- term obligations on an annual basis. The City par ticipates in the Texas Municipal Retirement System (TMRS) and
ensures monthly contributions to meet the actuarially required amount . This proactive approach ensures that the City
meets its long- term commitments without shifting liabilities to future budgets.

FY 2025-2026 Annual Budget | Colleyville Page 27