Finance Department


Introduction

The 2023-2024 Budget is presented in an easy-to-read format and should be interesting to readers. The budget message from the City Manager to the Mayor, City Council and Citizens of Fredericksburg outlines the business plan for the 2023-2024 fiscal year.

The budget is one of the most important policy documents provided by the City. It is a document that can help a citizen understand the factors that affect the programs and services provided to the public. It serves multiple purposes, including:

  • Policy document – The budget document defines the goals and strategic plan established by the City Council and the objectives of each department to accomplish these goals.
  • Financial plan – The budget document provides a financial plan that includes both summary and detail information on revenues and expenditures to ensure that the City operations are funded, and reserves are maintained in accordance with the financial management policy.
  • Operations guide – The budget document provides detailed objectives for each of the City’s departments.
  • Communication device – The budget document communicates additional information on City operations to the public.

Basis of Accounting

The basis of accounting is the method by which revenues and expenditures are recognized in the accounts and reported in the financial statements. The basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. All governmental funds for the City of Fredericksburg are accounted for using the modified accrual basis of accounting. Revenues are recognized when they become measurable and available as net current assets.

Basis of Budgeting

The annual budget is adopted on a basis consistent with Generally Accepted Accounting Principles (GAAP). Governmental fund type budgets are prepared on a modified accrual basis. Governmental revenues are budgeted when they are measurable and available, and expenditures are budgeted in the period in which the liability is incurred. All proprietary funds are budgeted using a flow of economic resources measurement focus and use the accrual basis of accounting. Revenues are budgeted when they are earned and measurable and expenses are budgeted in the period in which the liability is incurred.

Financial Structure

The City of Fredericksburg accounts are organized based on funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund balance, revenues, and expenditures or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

Fund Balance

In accordance with the requirements of the Governmental Accounting Standards Board (GASB), the City of Fredericksburg describes fund balance as:

  1. Non-spendable – identifying amounts (such as inventory).
  2. Restricted – includes amounts that can only be used for a specific purpose stipulated by the constitution, external resource providers, or through enabling legislation.
  3. Committed – includes amounts that can only be used for a specific purpose determined by the City Council.
  4. Assigned – includes amounts that can be used for a specific purpose but do not meet the criteria to be classified as “restricted” or “committed.”
  5. Unassigned – includes all spendable amounts not contained in other classifications.

The City has reserved unassigned fund balance at 90 days of current year budgeted expenditures for both the General and Utility Funds. In other operating funds, the City shall strive to maintain a positive fund balance to provide sufficient reserves for emergencies and revenue shortfalls. Except for special revenue funds, the fund balance shall be used only for emergencies, non-recurring expenditures, or major capital purchases that cannot be accommodated through current year savings.

Description

The Finance Department for the City of Fredericksburg contains both Financial and Utility Billing personnel. Finance personnel manage, control, and accurately report on the financial affairs of the City of Fredericksburg. Utility Billing personnel oversee all aspects of both Utility Billing and customer service. The Finance department functions under the direction of the City Manager's office through which the needs, concerns, and desires of the citizens are ultimately expressed.

As a support function, the Finance Department works in partnership with other City departments to develop budgets, implement control measures, and establish policies and procedures aimed at accurately accounting for, safeguarding, and maximizing the value of the City's assets.

Goals and Objectives

  • Collect and record receipts for taxes, licenses, fees, grants, and other revenues
  • Oversee and assist other Departments with the purchasing of goods and services
  • Maintain accurate financial records
  • Monitor investments and debt
  • Oversee adherence to budgetary restrictions
  • Prepare and distribute financial information
  • Safeguard assets
  • Provide excellent customer service
  • Listen to and manage customer utility issues
  • Process and reconcile utility payments
  • Electric meters will all be changed out to Sensus meters and software will be purchased to integrate with the Sensus software
  • Process utility billing in a timely manner

In order to meet these goals, we will

Establish and maintain an internal control structure designed to ensure that the assets of the City are protected from loss, theft, or misuse and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with Generally Accepted Accounting Principles. These statements are issued in the form of the City of Fredericksburg's Basic Financial Statement. The Basic Financial Statement details the City’s financial activity and position, which is audited by an independent firm of Certified Public Accountants. The report is the culmination of the City’s fiscal year financial activity.

For the Utility Billing aspect of the Finance department, we will continue to treat all customers, the public and fellow personnel of the City of Fredericksburg with the utmost respect and integrity. There are established rules and safeguards between the Utility Billing personnel and the Finance personnel that ensures customer payments are processed efficiently and with minimal errors.

Additionally, the department is instrumental in the compilation of the City of Fredericksburg Budget. The Budget establishes management's fiscal plan for the City and is the control tool employed and referenced throughout the period by City staff. The services, programs, revenues, and expenses contained in the Budget reflect the methods and use of resources through which staff intends to accomplish the goals, objectives, and long-term plans of the City of Fredericksburg.

What we accomplished in 2022-2023

  • Maintained good accounting policies and procedures
  • Received Distinguished Budget Presentation Award from the Government Finance Officers Association
  • Received unmodified, clean opinion on annual audit
  • Monitored customer water usage and alerted them if there was a change in their usage which could indicate a water leak
  • Provided excellent customer service to the public and utility billing customers
  • Worked with IT to implement and go live with new EAP system (Electronic Accounts Payable)
  • Cross trained Finance Department personnel
  • Educated customers on Stage 4 Water restriction issues
  • Assisted customers on Water Portal set up
  • Trained and onboarded two new hires (City Accountant, and Hotel Occupancy Tax Collection Specialist)
  • Filed Winter Storm Uri close out with Texas Department of Emergency Management
  • Successful execution of our FY 2024 Budget within our new online budgeting software OpenGov (Sept 2023)
  • Finance staff member participation in Local Government Leadership course (Texas Tech)
  • Attended the GFOAT conference in Round Rock, TX (April 2023)
  • Attended continuing education to improve accounting knowledge and practices and add/expand skills that are beneficial to our work
  • Constructed a short-term rental data spreadsheet for Development Services to use to manage short-term rentals within the community
  • Provided input and assistance with the implementation of short-term rental and hotel occupancy tax collections software through Granicus
  • Attended the annual GFOA conference in Portland, OR (May 2023)
  • Began to cross train City Accountant in Utility Billing procedures
  • Filed second annual reporting of American Rescue funding for city and local non-profit awards (April 2023)

What we plan to accomplish in 2023-2024

  • Continue to maintain good accounting policies and procedures
  • Continue to receive unmodified, clean opinion on annual audit
  • Continue to obtain the Distinguished Budget Presentation Award from the Government Finance Officers Association
  • Continue to provide excellent customer service to the public and utility billing customers
  • Continue to cross train Finance Department Personnel
  • Participate in Staff Development by touring city infrastructures and familiarizing staff with areas that are continuing to be developed in the city
  • Increase customer satisfaction by implementing an Online Bill Pay option (Xpress Bill Pay)
  • Work with our IT department to develop an automated phone tree system
  • Continue monitoring spend of American Rescue for city and local non-profits awards in order to file annual report (April 2024)
  • Prepare FY 2025 City Budget that addresses City Council priorities
  • Train and onboard new Utility Analyst/Customer Service Specialist
  • Work with our IT department to continue training supervisors on electronic ap program
  • Continue to look for ways to generate revenue in general fund to minimize tax burden on local residents
  • Continue to attend continuing education to improve accounting knowledge and practices and add/expand on skills that are beneficial to our work
  • Identify ways to make Finance processes more streamlined and/or automated
  • Develop a plan to mitigate inflation on the cost of goods and services
  • Update Purchasing and Financial Management policies
  • Work with Security State Bank & Trust to set up Positive Pay program
  • Meet with department heads and City Council to review challenges and look for new ways of preparing our annual budget

Finance Department Performance Measures