§ 2-3. Budget policies, officer, fiscal year.

(a)

Budget policies, criteria.

(1)

Purpose. The purpose of the annual budget shall be to serve as a plan for utilizing the available funding resources of the city during the fiscal year to accomplish established goals and objectives. The annual budget shall also serve to:

a.

Provide the public with an understandable financial plan which plainly describes the activities to be undertaken during the next ensuing year and the extent to which specific types of services will be performed.

b.

Establish priorities among programs, particularly new or expanded programs.

c.

Define the financial framework that will be used to periodically evaluate the status of operations.

d.

Determine the level of taxation and other revenue sources necessary to finance programs.

(2)

Criteria. The following criteria shall be considered as a regular part of each annual budget:

a.

Budget as policy document. The annual budget shall be viewed as an operating plan which shall identify, propose and clarify the policies of the city council.

b.

Budget as operations guide. The annual budget shall provide a framework for the departmental operations of the city, going beyond financial dimensions and addressing other factors which may affect departmental operations.

c.

Budget as financial plan. The annual budget shall be the primary instrument for promoting the solvency, efficiency and collective choices regarding distribution and allocation of resources between economic sectors and individuals.

d.

Budget as communications device. The annual budget shall offer to the citizens of the city and other interested individuals the opportunity to understand the financial condition and the responsibilities of local government.

(b)

Designation of budget officer. The city manager shall be hereby designated as the budget officer for the city and shall be responsible for preparation of the proposed annual budget, submission of the proposed budget to the city council for adoption, and shall be responsible for the administration of the budget after adoption. The city manager may so delegate any duties necessary for budget preparation and submission to the city council.

(c)

Fiscal year; term of appropriations.

(1)

Establishment of fiscal year. The fiscal year of the city shall begin on October first of each year and continue thereafter until September 30th of the following calendar year.

(2)

Term of appropriations. All unexpended or unencumbered appropriations, for all funds except capital project funds, shall lapse at September 30th of each year and shall not be carried forward to the budget of the subsequent year. Capital project fund budgets may be adopted for specific projects, and therefore, appropriations may exceed one (1) year. Funds encumbered at September 30th shall not constitute expenditures or liabilities in the current year but shall be reflected as a reservation of fund balance in the appropriate funds and reappropriated in the budget of the ensuing year.

(d)

Budget preparation, development, public hearings.

(1)

Determining council priorities. The budget shall be prepared on the basis of policy priorities as established by the city council for the city manager.

(2)

Budget calendar. To ensure that the goal of enacting the budget prior to the beginning of the next fiscal year is met, a budget calendar shall be prepared by the budget officer in order to establish specific dates in the budgeting process. The budget calendar shall list each step in the budgeting process, together with the dates and times for completion of each phase of the budget process.

(3)

Budget prepared from departmental requests. The city departments shall prepare budgetary requests as directed by the budget officer. Department heads shall also indicate funding priorities in the budget requests. The city manager shall review the departmental requests, determine the funding levels for each department and adjust departmental requests accordingly.

(4)

Balanced budget required. The budget officer shall propose, and the city council shall adopt, a balanced budget in which current resources (current revenues plus fund balance or reserves) will equal or exceed current expenditures for each individual budgetary fund.

(5)

Performance measures and productivity indicators. The annual budget, where possible, shall utilize performance measures and productivity indicators.

(6)

Line-item budget. Departments shall prepare, and the budget officer shall submit to the city council for adoption, an annual budget on the line-item basis. The line-item budget shall list separately each revenue source and expenditure appropriation for the ensuing fiscal year.

(7)

Proposed budget submitted to city council. At least thirty (30) days before the end of the current fiscal year, the budget officer shall submit to the city council a proposed budget, including all funds for the next fiscal year. The proposed budget shall provide a complete financial plan for the fiscal year, identifying as precisely as possible each project and activity the city proposes to fund during the next fiscal year and the estimated funding required for each project and activity.

(8)

Current year revised budget. The budget officer shall submit to the city council, in addition to the proposed budget for the ensuing year, a revised budget for the current year of operations. The city council shall consider the current year revised budget in the same manner in which the proposed budget for the ensuing fiscal year is considered. Upon budget adoption, the city council shall also adopt by ordinance the current year revised budget as the official budget. The current year revised budget shall be filed with the city secretary, published in the official newspaper of the city and attached to the budget originally adopted.

(9)

Proposed budget to be all inclusive. The proposed budget shall include amounts for all funding sources (revenues and fund balances and reserves), expenditure levels, supplemental departmental requests, personnel staffing levels and position summaries, debt service schedules, individual fund and departmental summaries, assessed taxable valuation and proposed tax rate, performance indicators and workload measures, and any other information necessary for the city council to use in order to consider the proposed budget. The proposed budget shall be filed with the city secretary and available for public inspection.

(10)

Public hearing on budget. The city council shall hold public hearing(s) on the proposed budget as required by state statues.

(e)

Adoption of budget; establishment of tax rate.

(1)

Adoption of budget. The budget shall be adopted by ordinance by favorable vote of at least a majority of all members of the city council.

(2)

Establishment of tax rate. The city council, by separate ordinance, shall also establish the tax rate necessary to fund the operations of the various tax-supported activities of the city. The adoption of the tax rate for the ensuing fiscal year shall be by favorable vote of at least a majority of all members of the city council.

(f)

Published budget document, public record.

(1)

The published budget document shall include the following:

a.

A budget message from the budget officer;

b.

Budget summaries of revenues and expenditures for all individual funds;

c.

Available fund balances at the end of the current year and projected fund balances for the ensuing year;

d.

Debt service schedules;

e.

Detailed fund, department and activity expenditure levels;

f.

Assessed taxable valuation and tax rate;

g.

Other financial and operational data necessary in order to fully communicate the priorities of the city council to the citizens of the city.

(2)

Presentation of financial data. Financial data presented in the published budget shall include comparisons of fund balances, resources and expenditures; prior-year audited actual amounts; current year adopted budget amounts; current year revised budget amounts; and adopted budget amounts for the budget of the ensuing year.

(3)

Published budget as public record. The published budget, including supporting schedules and narratives, shall be a public record, on file in the office of the city secretary and open to public inspection. The budget officer shall prepare or have prepared sufficient copies of the published budget document for distribution to interested citizens, individuals or persons.

(g)

Budget implementation, administration, budgetary control.

(1)

Budget implementation. The budget officer shall provide departments of the city with the final adopted budget amounts and direct those appropriations to be entered into the accounts of the city. Department heads shall be responsible for monitoring the available appropriation balances on a periodic basis. No expenditure shall be made from the appropriations except in compliance with the adopted budget.

(2)

Departmental budget reporting. Regular monthly or interim budget reports shall be provided to the various departments of the city, disclosing all pertinent budgetary information including, but not limited to, prior year actual amounts, current year budget amounts, current year actual amounts, amounts encumbered or obligated, and available budget balance.

(3)

Level of budgetary control. The level of control by which actual financial obligations (expenditures plus encumbrances) shall not exceed appropriations shall be established at the program or division level.

(h)

Revenue guidelines.

(1)

Revenue goal. The city shall endeavor to maintain a diversified and stable revenue base in order to prevent overall revenue shortfalls as a result of periodic fluctuations in any one (1) revenue source.

(2)

Development of revenue projections. The budget officer shall estimate the annual revenues using an objective analytical process. The projections shall be monitored throughout the budget year.

(3)

Use of nonrecurring resources. The city shall use nonrecurring resources to fund nonrecurring expenditures.

(4)

General and administrative transfers. Enterprise funds shall transfer to appropriate funds a general and administrative fee for services provided to the enterprise funds by administrative departments. These transfers shall be documented and shall fully disclose the cost of providing said administrative services to the enterprise funds.

(5)

In-lieu-of-taxes transfers. Enterprise funds shall also transfer to the general and debt service funds an amount in lieu of taxes. These transfers shall be calculated by using the audited depreciated value of all fixed assets at the end of the prior fiscal year in the enterprise funds, multiplied by the applicable ad valorem tax rate adopted by the city council for the prior budget year. In-lieu-of-tax amounts may be combined in the general and administrative amounts within the budget document.

(6)

User charges and fees. User charges and fees shall be established at a level related to the cost of providing the services. The budget officer shall review the fee structure annually in order to determine the level of funding anticipated to support the various activities.

(7)

Establishment of rate structure for enterprise funds. The city shall establish rates and charges that fully support the total direct and indirect cost of each enterprise activity. Costs shall include debt service retirement, capital maintenance and replacement, depreciation, the cost of administrative services provided to enterprise fund operations, and in-lieu-of-tax transfers.

(8)

Tax collection. The city shall follow an aggressive policy of collecting property tax revenues and assessments. It is anticipated that the annual level of uncollectible property taxes will not exceed three (3) percent.

(9)

Tax assessment. The city shall monitor the appraisal procedures of the Cooke County Appraisal District and provide necessary input to assure that sound appraisal procedures are maintained. Property shall be assessed at one hundred (100) percent of full market value, subject to the State Property Tax Code.

(10)

Fee schedule. Each year the budget officer will submit an updated list for all fees and charges for all funds including the enterprise funds. These fees are intended to be set at a level related to financing city programs as provided in the annual budget. Water, sewer, solid waste and storm drainage (if applicable) services provided outside of the corporate limits of the city will be charged one hundred fifty (150) percent of the rate charged for residents. Fees for fiscal year 2008-2009 are listed in appendix A, (listed in a schedule filed in the office of the city secretary). Any fees or charges that are not listed in appendix A, (attached to Ordinance No. 1214-09-2008) but are currently in city ordinances shall remain in effect until changed as established in this section. All future rate changes will be passed by the council in the form of a resolution amending the rates imposed by the city.

(i)

Establishment of fund reserves.

(1)

Contingency reserves. The city may establish budgetary contingency reserves in order to provide for unanticipated expenditures of a nonrecurring nature or to meet unexpected increases in costs. These reserves may be maintained separate and apart from other designated and undesignated fund balances of the operating funds.

(2)

Fund reserves. The city shall maintain fund balances and working capital balances of ninety (90) days of budgeted operating expenditures in order to meet unanticipated expenditures of a nonrecurring nature and to insure adequate balances at all times during the budget year for the general fund, water and sewer fund, and solid waste fund.

(j)

Budget amendment and modification.

(1)

Authority to transfer appropriations within a fund/department/division or program. The city manager may at any time approve transfers of unencumbered appropriations between general classifications of expenditures within a fund, department, division or program, provided the transfer amounts do not result in a net increase in total appropriations.

(2)

Budget amendments. All other amendments shall be made by separate ordinance or resolution, published in a newspaper of general circulation, filed with the original adopted budget and placed in the office of the city secretary for public inspection. In order to officially amend the original budget, the following amendments shall be made only upon the affirmative vote of a majority of the members of the city council:

a.

In case of grave public necessity, for emergency expenditures to meet unusual and unforeseen conditions which could not by reasonable diligent thought and attention have been included in the original budget.

b.

Any net increase in appropriations in the original budget.

c.

Transfer of unencumbered appropriations in general classifications of expenditures between funds/departments/divisions or programs.

(Ord. No. 433-2-90, § 1, 2-6-90; Ord. No. 1264-12-2010, § 1, 12-21-10; Ord. No. 1339-04-2014 , § 1, 4-1-14)

Editor's note

Ord. No. 433-2-90, § 1, adopted Feb. 6, 1990, repealed and replaced the former § 2-3, which pertained to the fiscal year and derived from Ord. No. 205-7-83, § 1, adopted July 19, 1983.

State law reference

Fiscal year, V.T.C.A., Tax Code § 1.05.