Page 39 - CityofGrapevineFY26AdoptedBudget

THE BUDGET AS A POLICY DOCUMENT

Financial Planning Policies
Section 9.14 of the Grapevine Code of Ordinances establishes a policy to maintain a prudent level of financial resources to protect against one-time
expenditures. Provision is made for a contingent appropriation of not more than three percent of the total budget, to be used in case of
unforeseen items of expenditure. Such contingent appropriation shall be under the control of the city manager, and distributed after approval of the
City Council.

Section 9.15 of the Grapevine Code of Ordinances establishes a balanced budget provision for the General and Debt Service funds. Total estimated
expenditures within these funds shall not exceed the total estimated resources.

Section 9.16 of the Grapevine Code of Ordinances provides for disclosure when a deviation from a balanced budget is necessary. The budget may be
amended and appropriations altered in cases of public necessity, upon declaration of the City Council.

Section 10.31 of the Grapevine Code of Ordinances establishes policies and guidelines governing cash management and investment of City funds. Safety
of principal is the foremost objective of the City in managing its portfolio. The City will also maintain sufficient liquidity to provide adequate and timely
working funds.

Section B, Number 3.0 of the Grapevine Administrative Policy Manual establishes the fund balance reserve policy to ensure fund availability for
unforeseen emergencies that would severely impact the City’s ability to pay for basic operations and guarantee the payment of debt obligations. Any
exceptions are to be noted at the time the budget is approved. The emergency reserve is established at the following minimum levels:

General Fund – 20% (72 days) of total current budgeted expenditures.
Debt Service Fund – 20% (72 days) of total current budgeted net debt service expenditures.
Convention & Visitors Fund – 16% (60 days) of total current budgeted expenditures.
Utility Enterprise Fund – working capital reserves of 16% (60 days) of total budgeted expenses.
Lake Enterprise Fund – working capital reserves of 25% (90 days) of total budgeted expenses.*
*This requirement was suspended for FY26 in Ordinance 2025-054.

Section B, Number 9.0 of the Grapevine Administrative Policy Manual outlines the fixed asset capitalization policy, which establishes a uniform and
consistent standard for the capitalization of fixed assets owned by the City. This policy also establishes the procedure to inventory and assess the
condition of all major capital assets.

Section D, Number 4.2 of the Grapevine Administrative Policy Manual outlines the Vehicle & Equipment Replacement policy, and establishes a standard
schedule of vehicle and equipment replacement intervals. Under normal budgeting constraints, it is advantageous to replace vehicles and equipment at
specific intervals. Replacement in accordance with this schedule provides the users with the most efficient and reliable vehicle and/or equipment as
possible. Fleet replacement procedures consider the most economic replacement point at which the vehicle has the greatest salvage value and has
been depreciated to its fullest.

Investment Policy
It is the policy of the City of Grapevine that, giving due regard to the safety and risk of investment, all available funds shall be invested in conformance
with State and Federal Regulations, applicable Bond Resolution requirements, adopted Investment Policy and adopted Investment Strategy.

Effective cash management is recognized as essential to good fiscal management. Fiscally conservative, effective cash management and investment
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strategy development will be pursued to take advantage of interest earnings as viable and material revenue to all City funds. The portfolio of the City is