BUDGET GUIDELINES
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered available when they are collected within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences are recorded only when payment is due. Taxes, licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and are therefore recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered measurable and available only when the City receives cash. The City reports the following fund types: Special Revenue Funds account for proceeds of specific revenue sources that are legally restricted or otherwise designated for specific purposes; Debt Service Funds account for the accumulation of resources for and the payment of principal and interest on general long-term debt; Capital Projects Funds account for financial resources used for the acquisition or construction of infrastructure and major capital facilities; Permanent Funds account for resources that are legally restricted, to the extent that only earnings and not principal, may be used for purposes that support City programs. Adult day health services and senior citizen programs are funded from interest earnings and additional donations; Internal Service Funds account for operations that provide services to other departments of the City on a cost reimbursement basis. These services include self-insurance; acquisition, replacement and maintenance of the City’s vehicle fleet; mail, telephone and duplicating; strategic technology; Civic Center maintenance and operations; and the central supplies warehouse; Pension and Employee Benefit Trust Funds account for the activities of the City’s Defined Benefit Pension Plan for sworn employees, the Defined Contribution Pension Plan for non-sworn employees; Private-Purpose Trust Funds serve as custodian for the assets and liabilities of the Successor Agency Trust pending distribution to the appropriate taxing entities and the payment of enforceable obligations; and, Agency Funds are used to account for various activities in which the City acts as an agent, not as a principal. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Audit and Financial Reporting Each year, as specified within Article X, Section 1008 of the City’s Charter, entitled “Independent Audit,” an audit will be conducted by an independent Certified Public Accountant Firm (CPA Firm). The selection of the independent CPA Firm shall be in conformance with the City’s competitive bidding procedures. The City shall request bids for audit services no less frequently than every five years. The CPA Firm shall provide the City Council with an Audit Communication Letter addressing significant findings of the auditors in conjunction with their opinion on the City’s Comprehensive Annual Financial Report. These reports shall be submitted to the City Council within 60 days of receipt of the report.
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FY 2019-21 Proposed Budget
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