Policies and Procedures


Our Mission Statement

We are dedicated to the citizens of Uvalde in providing services to sustain and enhance the quality of life in the community. We will provide these services in the most effective, efficient and equitable manner possible.

Budget Policies and Procedures

The City of Uvalde has an important responsibility to its citizens to carefully account for public funds, manage municipal finances wisely, manage growth and plan the adequate funding of services desired by the public, including the provision and maintenance of public facilities. The City needs to ensure that it is capable of adequately funding and providing those local government services for the community.


The following Fiscal and Budgeting Policy statement is designed to establish guidelines for the fiscal stability of the City. The watchwords of the City’s financial management include integrity, prudent stewardship, planning, accountability, and full disclosure.


The scope of these policies generally spans among other issues, accounting, auditing, financial reporting, internal controls, operating and capital budgeting, revenue management, debt management, cash and investment management, expenditure control, asset management, and planning concepts in order to:


  1. Demonstrate to the citizens of Uvalde, the investment community, and bond rating agencies that the City is committed to a strong fiscal operation;
  2. Provide precedents for the future police makers and financial managers on common financial goals and strategies;
  3. Present fairly and with full disclosure the financial position and results of the financial operations of the City in conformity with Generally Accepted Accounting Principals (GAAP); and
  4. Determine and demonstrate compliance with finance related legal and contractual issues in accordance with the provisions of the Texas Local Government Code and other pertinent legal documents and mandates.

Uvalde’s financial policy encompasses both adopted policy, legally required, and generally accepted financial policy for organizations and specifically cities. These policies include balanced budgets, defined as budgeted expenditures do not exceed budgeted revenues and estimated year beginning available fund balances; fund reserves necessary to sustain general government services for 120 days in the event of a local emergency which could hinder revenue collections; enterprise funds to be financially self-sustaining; monitoring and reporting to management and elected officials major capital assets and infrastructure conditions and needs by city staff; the continued achievement of an A stable bond rating of the City’s debt issues; diversification of fees and charges, and period reporting of actual to budgeted revenues and expenditures.


Annual Budget:


An annual budget shall be prepared in accordance with State law, applicable Charter requirements, as well as meet the reporting requirements of the Government Finance Officers Association Distinguished Budget Presentation Award Program. The budget document is used to communicate our policies and to serve as a financial plan as well as an operations guide. These policies are important guidelines that are reviewed at least annually and updated when necessary.


Designated Budget Officer:


The City Manager, designated as the City’s Budget Officer, is primarily responsible for the development of the annual budget to be submitted to the City Council for approval and adoption. The Finance Director and the Budget Specialist assist in the preparation. A Finance Committee was established in November 2013, which consists of the City Manager, Assistant City Manager, Finance Director, Budget Specialist, and three Councilmembers to serve in an advisory capacity to the City Council.


Funds Included in the Annual Budget:


The budget shall include all the City’s governmental funds, internal service funds, enterprise funds, debt service funds, special revenue funds, capital projects funds and permanent funds. Not included in the annual budget is an agency fund which accounts for resources held for others in a custodial capacity. The City accounts for the Police Holding Fund as an agency fund.


Balanced Budget Required:


The City Manager, acting in the capacity of the Budget Officer, is required to submit a balanced budget. A balanced budget is one in which total financial resources available, including prior year’s ending financial resources plus projected resources, are equal to or greater than the budgeted expenditures. The City will avoid budgetary practices that raise the level of current expenditures to the point that future year’s operations are placed in jeopardy.


Basis of Accounting:


The modified accrual basis of accounting is used by all governmental fund types, expendable trust funds, and agency funds. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). “Measurable” means the amount of the transaction can be determined and “available” means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. A one-year availability period is used for revenue recognition for all governmental fund revenues, except property taxes for which 60 days is used. Expenditures are recorded when the related fund liability is incurred. Principal and interest on general long-term debt are recorded as fund liabilities when due. Those revenues that are susceptible to accrual are property taxes, franchise taxes, special assessments, licenses, interest revenue, and charges for services. Sales taxes collected and held by the State at year-end on behalf of the government are also recognized as revenue. Fines and permit revenues are not susceptible to accrual because generally they are not measurable until received in cash.


The accrual basis of accounting is utilized by proprietary fund types and nonexpendable trust funds. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred.


Budget Process:


During the initial process of developing the budget, certain departments were identified as needing to be separated in order to ensure better control of costs. To that end, the General Government Department was separated into Administration, Finance, General Government, and an IT Department. The Parks and Recreation Department was separated into Parks, Golf Course, Swimming Pool, Civic Center, and Cemeteries.


The Planning and Development Department also underwent changes over the last two years to arrive at the Planning and Development Department in the FY 16 – 17 Budget. The Director of Planning and Development, as well as, the Fire Marshal were placed in this department. In addition, certain line-items were changed from this department to another in order to more accurately reflect the actual day-to-day activity associated with this department.


Decisions regarding the restructuring of the departments was made early on so that the rest of the process ran smoothly including initial input by the department heads.


The following is the budget process for developing, adopting, and implementing the budget:


A budget calendar is prepared, which presents the chronological order of specific dates that take place during the process as well as the timing. The budget calendar for this year’s budget process follows this discussion of the policies and procedures.


During April the budget worksheets are created and issued by the Finance Director and distributed to the department heads. They have a deadline of 3 weeks to submit all upcoming requests, including capital outlay requests. The finance committee meets the month of May (and possibly June) to review all requests and to allow the department heads the opportunity to make their presentation to the committee. Once all presentations are complete and the committee has had ample time to make the appropriate cuts the preliminary budget is presented in August to the City Council. At the discretion of the City Council budget workshops will also be scheduled to allow department heads to present their requests (if necessary). All public hearings regarding the tax rate and budget are held to allow citizens to voice their opinions or concerns. The budget will then be legally adopted on or before the 4th Tuesday of the month of September. The budget will be implemented on October 1st. The ordinance approving and adopting the budget appropriation spending limits are at the departmental level.


The annual budget is a master financial plan that specifies the goods and services that will be provided to the community, and designates the source of the funds required to perform those services.


The Texas Uniform Budget Law regulates the budget developed by the City of Uvalde throughout the process. State law requires an incorporated City to develop an annual budget, which itemizes proposed revenues to fund all proposed expenditures of the government (Article 689a-13). The City of Uvalde, incorporated in 1889, is self-governed under the direction of the City Council, which derives its authority from voters. The City Council is authorized to adopt the budget, to set the tax rate, and to impose taxes, user fees, and other charges to generate revenues.


The appropriation process determines the revenue available for distribution to fund proposed expenditures. The City of Uvalde estimates revenue based on recent collection history and monitors revenue throughout the fiscal year. When revenue is less than estimated, management initiates action consistent with prudent financial management policy to reduce expenditures, mitigating the impact on City reserves.


Availability of Proposed Budget to the Public and Public Hearings:


The preliminary budget, prepared as a result of many budget sessions, is available for public inspection and is filed with the City Secretary thirty (30) days prior to the date when the City Council sets the property tax rate for the next fiscal year (Article 689a-14). The City Council is required to hold a public hearing on the budget not less than fifteen (15) days after the budget is filed, and must issue a “Public Notice” in the newspaper(s) fifteen (15) days prior to the hearing (Article 689a-15). The vote by City Council to adopt the budget must be separate from the vote to set the tax rate. The rate must be established by October 1st and cannot exceed the calculated effective tax rate by more than three percent (3%) (Property Tax Code, Section 26.05) without compliance with additional public notification and hearing requirements. The adopted budget must be filed with the City Secretary and be made available for public inspection (Article 689a¬15).


Prior to adopting the budget and tax rate, including the levy, the City Council shall hold a public hearing according to the dates established by the budget calendar. The City Council shall provide for public notice of the date, time and location of the hearing.


Budget Amendments:


Any change to the originally adopted budget, which will exceed the appropriated amount at the department level, requires City Council approval.


Compliance with Budget:


Amounts presented in the budget document shall be compared with actual revenues and expenditures for each month and current year-to-date for the same time period. The monthly reports will be presented in such a format that will enable the City of Uvalde to maintain control over its financial resources. The monthly reports are distributed to the Mayor and City Council members; the City Manager; all departmental supervisors; and the various advisory boards and oversight committees.


Encumbrances and Uncompleted projects:


Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is utilized as an extension of formal budgetary integration in governmental funds. Although appropriations lapse at year end for annually budgeted funds, the City honors encumbrances outstanding at year end. Since these commitments will be honored during the subsequent year, outstanding encumbrances at year end should be included, by the department heads, in the subsequent year’s budget.


Budget Priorities:


Maintenance and expansion of the general infrastructure is a high priority of the City of Uvalde.


Capital Programs:


The City of Uvalde has and will continue to use the following methods of financing capital purchases and improvements:

  1. Lease-purchase contracts for major equipment,
  2. Short-term notes for major construction projects with a limited life expectancy,
  3. Long-term bonds for major construction projects with a longer life expectancy,
  4. "Pay as you go" financing on moderate cost projects or an in-kind match to community development, park, or airport grants.

Expenditures:


The City of Uvalde allocates its scarce resources based upon priorities of need and long-term organization goals. Our main goals are:

  • To provide municipal services to the citizens of Uvalde in an effective, efficient, and pleasant manner; and
  • To maintain existing infrastructure and levels of service without increasing costs to the citizens of Uvalde beyond the rate of inflation.

Basis of Budgeting:


The budgets of general governmental type funds, such as the general fund, are prepared on a modified accrual basis. This means that obligations of the City are budgeted as expenditures but revenues are recognized when they are actually received. The proprietary type funds which include utility, sanitation and airport are budgeted on a full accrual basis. That is, expenditures are recognized when a commitment is made and revenues are recognized when they are obligated to the City.


Financial Policies

Minimum Fund Balance:


The General Fund shall maintain a minimum fund balance of 120 days of operating expenditures.


Operating Reserves:


The City shall attempt to maintain an operating reserve in the major funds at a level sufficient to allow for variation in cash flows during the year, unanticipated emergency expenditures, and unanticipated revenue shortfalls.


For the purpose of this policy operating reserve is defined as current cash and investments less current liabilities at the end of the most recent fiscal year.


The targeted operating reserve shall be equal to approximately 90 days expenditures of maintenance and operations costs.


Revenue Bond Reserve Fund:


The City shall be in strict compliance with the requirements of any bond ordinance that calls for a reserve fund.


Debt Service Fund:

The City shall be in strict compliance with the requirements of any and all ordinances that call for a general obligation bond sinking fund. Property taxes shall be deposited as received. An adequate balance will be maintained to meet semi-annual principal and/or interest payments.


Investments

The policy regarding the investment of available funds is as follows:


A. The City shall strive to earn the highest rate of return on invested funds without sacrificing either safety or liquidity.

B. The Investment Officer shall have the authority to invest idle funds in fully collateralized certificates of deposit within the designated City depository or in direct obligations of the U.S. Treasury. Absolute security of the invested principal is required at all times.


C. All deposits and investments with the official City depository shall be secured by collateral in an amount equal to at least 102% of the maximum amount on deposit during any calendar month. The securities comprising the pledged collateral shall be valued as par or market, whichever is lower. The securities pledged must satisfy the requirements established under current state and federal law. The pledged collateral shall be above any coverage provided by the Federal Deposit Insurance Corporation.


D. The City depository shall be required to provide pledged security reports. The report should contain the following information for the end of each month:

  • a. Name
  • b. Type/Description
  • c. Par Value
  • d. Market Value at Month End
  • e. Maturity Date
  • f. Moody’s or Standard & Poors Rating

and state maximum amounts of City funds on deposit during the month.


E. Pledged securities shall be held in safekeeping by a separate and different bank other than the depository bank. Safekeeping receipts reflecting the pledging of securities as collateral for City of Uvalde depository accounts will be furnished to appropriate City Officials.


F. Any substitutions of the securities or reductions in the total amount pledged shall be made only with proper written authorization approved by the City Manager or his designated representative.


Basis of Presentation-Fund Accounting:


The accounts of the City are organized on the basis of funds and account groups. Fund accounting is designated to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group, on the other hand, is a financial reporting device designated to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect net expendable and available financial resources.


Funds are classified into three categories: governmental, proprietary, and fiduciary. Each category, in turn, is divided into separate “fund types.”


Governmental funds are used to account for all or most of a government’s general activities, including the collection and disbursement of earmarked monies (special revenue funds), the acquisition or construction of general fixed assets (capital projects funds), and the servicing of general long-term debt (debt service funds). The General Fund is used to account for all activities of the general government not accounted for in some other fund.


Proprietary funds are used to account for activities similar to those found in the private sector, where the determination of net income is necessary or useful to sound financial administration. Goods or services from such activities are provided to outside parties.


Fiduciary funds are used to account for assets held on behalf of outside parties, including other governments, or on behalf of other funds within the City. When these assets are held under the terms of a formal trust agreement, a pension trust fund, a nonexpendable trust fund or an expendable trust fund is used. The terms “nonexpendable” and “expendable” refer to whether or not the City is under an obligation to maintain the trust principal. Agency funds generally are used to account for assets that the City holds on behalf of others as their agent.