12.02 - Amendment to Accounting and Reporting Procedures

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C. ANNUAL OPERATING BUDGET L-' The purpose of establishing an operating budget is to ensure the City's annual operating expenditures are based on a stable stream of revenues. The City follows these procedures in establishing the budgetary data reflected in the financial statements. 1. During May or June of each year, the City Clerk and Finance Administrator provide all department heads with budget worksheets. Department heads prepare a proposed operating budget and return the worksheets to the City Clerk and Finance Administrator for review. The City Clerk and Finance Administrator meet with department heads and accept proposed budget work - papers. 2. Prior to September 1, the City Clerk submits to the City Council a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them. 3. Public meetings or hearings are conducted in accordance with the state truth in taxation statutes to obtain taxpayer comments and adopt the final tax levy and budgets for the govermnental, special revenue, and enterprise funds. 4. Formal budgetary integration is employed as a management control device during the year for the general fund, special revenue funds and enterprise funds. 5. Operating budgets are prepared for the following funds as recorded in the general ledger: General Government - general, police, roads, parks, planning and zoning, cemetery, fire, library, Business Park, housing and redevelopment authority, and Enterprise — water and sewer. D. REVENUE CLASSIFICATION AND USE General Fund revenues typically consist of various taxes, rental income, grants and contributions, special assessments, fees and charges, fines and forfeits, and grants that are budgeted or indicated for a specific purpose, activity or program. Fees, Charges, and Fines are charges to customers, applicants or others who purchase, use, directly benefit from, or are directly affected by the goods, services or privileges provided. These charges are meant to offset the cost associated with the purpose, activity or program. The purpose of this revenue policy is to provide a diversified set of revenues to ensure a stable revenue system for the City, to match similar sources and uses to ensure adequate funding for various City services and programs, and to ensure equitable funding among City programs and services. The City will establish user charges and fees at a level relative to the cost of providing these programs and services. The charges and fees will be reviewed on an annual basis. User fees and charges for the enterprise funds (water and sewer) will be set at a level that supports the total direct and indirect costs of the activity. Indirect costs will include depreciation of capital assets and each fund's share of administrative and general government costs incurred by the enterprise fund. 12 -1 -08 ACCOUNTING AND REPORTING POLICIES (amendments): 11/29/2010 4