Fort Walton Beach Ordinance — 1740 Adopt Budget FY07-08 — reading text

Overview City Council Budget Review O~ The Mayor and City Council are responsible for reviewing the proposed budget to ensure it meets the goals and objectives of the City, conducting meetings on the budget to enlist public comment, and conducting public hearings prior to the final adoption of the budget. In August, budget meetings are held with the City Council to review and discuss the proposed budget. The City Manager reviews major issues and Department Directors are present for the discussions and study of the proposed budget. The workshops are open to the public and the public is encouraged to attend and participate. The City Charter requires that the budget be adopted by Ordinance and requires two public hearings prior to adoption. During September, two public hearings on the millage ( Le. property tax) rate and budget are held before final budget consideration. These meetings are advertised as part of the agenda and Florida Law requires certain newspaper advertisements prior to the second and final budget hearing. At the public hearings, the public may make formal comment either for or against the proposed budget and ask questions of City Council about the bu"dget. Budget adoption occurs in September after City Council deliberations and two public hearings. City Council may take action to modify the proposed budget at its discretion. Prior to budget adoption, City Council must adopt a millage rate to support budgeted funding levels. An adopted budget is published no later than October 1. Budget Maintenance Budget maintenance is a year- round activity of the Department Directors, Finance Director, and Budget & Grants Manager. Spending control mechanisms include Finance Department review of purchase requisitions and Departmental review of reports presenting budget versus actual revenues and expenditures. These financial reports are prepared and reviewed by staff monthly and provided to City Council quarterly to identify and communicate any spending variances. Performance measures are prepared and reported to Council quarterly to monitor progress against goals and objectives, citizen satisfaction, and benchmarks. Operationally, the City functions at a fund level basis allowing budget transfers within funds for individual line items that exceed the budgeted amount without a formal budget amendment. Budget transfers are used. only to transfer appropriations between line items, not to increase the total budget or to transfer resources between funds. Transfers between funds are permitted through the formal budget amendment process described below. Annual appropriations lapse at fiscal year end with the exception of encumbrances and appropriations related to multi- year projects and other items identified by City Council to be carried over to the next fiscal year. These carry-overs are included in the ensuing year' s adopted budget. Budget Amendment I The adopted budget is revised, as necessary, with a budget amendment approved by City Council. The budget ordinance provides that the budget may be amended by resolution provided that a corresponding funding source supports any additional expense. Although the budget may be amended periodically City of Fort Walton Beach, FL 28-  Budge1:Overview budget the for throughout the year, a resolution is traditionally prepared in August of each year amending the entire year. The budget amendment increases or decreases the total amount of the adopted budget of each fund. However, any increase in the budget must be supported by a corresponding revenue source. The adopted budget in the form of an amended budget is available for public review in late September. BUDGET BASIS & FUND STRUCTURE Annual appropriated budgets are adopted by ordinance for all governmental and proprietary funds. However, the City is not legally required to report budgets for proprietary or fiduciary funds and those budgets are not included in the City's audited financial statements. Fund, and Budgets for the General Fund, Special Revenue Funds, Debt Service Fund, Capital Projects Enterprise Funds are adopted on a basis consistent with generally accepted accounting principles GAAP) and generally follow the basis of accounting with few exceptions. During the year, the City' s accounting system is maintained on the same basis as the adopted budget, which enables department budgets to be easily monitored through the accounting system. The major difference between this budget and GAAP for governmental funds is that certain revenues and expenditures ( e. g. compensated absences and depreciation) are not recognized for budgetary purposes, but are recorded in the and GAAP is accounting system at year-end. For enterprise funds, the difference between this budget that debt principal payments and capital outlay are budgeted as expenditures for budgetary purposes, while deprecation and compensated absences are not budgeted. Staff believes this provides a better at year-end in day-to- day financial plan. However, all these items are recorded in the accounting system accordance with GAAP. of the budget into An important concept in governmental accounting and budgeting is the division categories called funds. Funds are separate fiscal accounting entities. Budgeting and accounting for revenues and expenditures in these funds is called fund accounting. Fund accounting allows a government to budget and account for revenues and expenditures restricted by law or policy. Governments may use any number of individual funds in their financial reporting; however, generally l accepted accounting principles ( GAAP) require all these individual funds to be aggregated into specified fund types. Any fund constituting 10% or more of the appropriated budget is considered a " major" fund. General Fund - Accounts for all financial resources not accounted for in other funds. Revenue Funds - Account for the proceeds of specific revenue sources that are legally Special restricted to expenditures for specific purposes. Law Enforcement Trust Fund - grants, forfeitures Law Enforcement Training Fund - traffic fines Community Development Block Grant - entitlement grant Community Redevelopment Agency - tax increment financing ( Le. ad valorem taxes) Beal Memorial Cemetery Perpetual Fund - lot, crypt, and niche sales Debt Service Fund - Accounts for the accumulation of resources for, and the payment of, general long- term debt principal and interest. or construction of Capital Projects Fund - Accounts for financial resources to be used for the acquisition major capital facilities, thereby more accurately accounting for a variety of one- time facility improvements and construction projects. similar to Enterprise Funds - Account for operations that are financed and operated in a manner a cost ( expenses, including private business - where the intent of the governing body is that the the services to the public continuing basis be financed and recovered depreciation) of providing on a charges. Related capital projects are accounted for in the individual enterprise primarily through user funds. Utilities Fund - water, sewer, storm water Sanitation Fund - garbage, yard waste Golf Fund - golf courses The graph on the following page depicts the relationships within the City' s fund accounting structure. City of Fort Walton Beach, FL 29- Budget Overview The chart below illustrates the relationship between the City' s fund financial structure ( e. g. accounting) and the City' s departments ( e. g. operations). Accountina Law Law Enf. General CDSG CRA Utilities Sanitation Golf Department/Division Enf. Training Fund Fund Fund Fund Fund Fund Trust Fund Fund City Council ~ City Manager ~ Human Resources ~ General Government City Clerk ~ Finance ~ Purchasing ~ Information Tech. ~ Public Safety Police ~ ~ ~ Fire ~ Parks & Recreation ~ Parks & Senior Center ~ Recreation Library ~ Museum ~ I/) Community Community Develop. ~ ~ .. j c 2 Development Building & Zoning ~ Public Works ~ Q) c.. Engineering ~ 0 Fleet Maintenance ~ Public Works Service Maint. ~ Streets Maint. ~ Right-of-Way Maint. ~ Cemetery ~ Solid Waste ~ Utilities .. j Customer Service ~ Water Operations ~ Utilities Sewer Operations ~ Water Distribution ~ Sewer Collection ~ Storm Water Mgmt ~