CITY ORGANIZATION

The City of Marble Falls is a home rule City operating Council-Manager form of government. All powers of the City are vested in an elected Council, consisting of a Mayor and 6 council members. The Council enacts local legislation, determines City policies and appoints the City Manager.

The City Manager is the Chief Administrative Officer and the head of the administrative branch of the City government. The City Manager is responsible to the Council for the proper administration of all affairs of the City.

The City government provides a broad range of services to its citizens. The programs and personnel required to provide these services are organized into broad managerial areas called Funds. Funds are separate fiscal and accounting entities with their own resources and budgets necessary to carry out specific activities and attain certain objectives.

Funds are further organized into groups called Departments. A department is a group of related activities aimed at a major city service or program. At the head of each department is a director of the City. Directors have supervision and control of a Department, but are subject to supervision and control of the City Manager.

The City Charter establishes the fiscal year, which begins October 1 and ends September 30. The budget process begins in April with department directors receiving packets from the Finance Department. The packets contain information about the department’s historical expenditure amounts, along with current expenditures and budget amounts.

The Finance Department calculates personnel costs, debt service requirements and revenue projections for the new fiscal year, while the departments are preparing their budget requests. All the data combined with the department’s requests compile a preliminary budget. At this point, the budget is usually unbalanced with expense requirements exceeding revenue projections.

During the month of June the City Manager and the department directors meet with City Council to determine goals and objectives for the new fiscal year. At this time the budget is not yet presented to City Council.

After listening to the goals and objectives as determined by City Council, the City Manager reviews and discusses the preliminary budget with the department directors. The City Manager modifies the budget after this review; and the resulting proposed budget is given to the City Council in July.

A series of City Council budget workshops are scheduled in July. The workshops are open to the public and are posted per open meetings law. The workshops allow the City Council to receive input on the budget from the City Manager and the department directors. It is through these workshops that Council forms its priorities for the next fiscal year.

With guidance from the City Council, the City Manager formulates a proposed budget. The City Charter requires that public hearings be held before adopting the budget. The hearings provide an opportunity for citizens to express their ideas and concerns about the proposed budget.

After the public hearings the City Council votes on adoption of the budget. This year’s budget calendar is on the following page.

Budget Amendment Process

The City budget is reviewed at mid-year and is considered for any amendments at that time. The departments submit any recommended amendments to the City Manager and are reviewed with the Finance Director. If the items are deemed necessary they will be presented to City Council for approval. All budget amendments require a public hearing and are then approved by Council vote.

For fiscal purposes, a fund is a separate accounting entity with a self-balancing set of accounts in which cash and other financial resources, all related liabilities, and the changes therein are segregated and recorded. There are three basic types of governmental funds:

Governmental – Includes activities usually associated with a typical local government’s operations, such as police protection. Governmental funds also include special revenue funds that account for proceeds of specific revenue sources that are legally restricted to expenditure for specified purposes.

Proprietary – This fund more closely resembles private business enterprises. The intent is that the costs of providing certain goods and services to the public should be financed or recovered primarily through user charges.

Fiduciary – These funds are created to account for money in which the City acts in a trustee capacity or as an agent for other entities.

The budgeted funds for the City of Marble Falls are as follows:

01 General Fund (Governmental)

Accounts for all financial resources except those required to be accounted for in another fund. The General Fund of the City of Marble Falls contains the following departments or functional units: Administration, Municipal Court, Non-departmental, Finance, Human Resources, Mayor and City Council, Communications, Police, Fire, Engineering, Development Services, Street, and Parks & Recreation. The respective General Fund department codes are the following: 542 Administration, 543 Municipal Court, 544 Non-departmental, 545 Finance, 546 Human Resources, 547 Mayor and City Council, 551 Communications, 552 Police, 553 Fire, 554 Engineering, 555 Development Services, 557 Street, and 565 Parks & Recreation.

02 Water & Wastewater Fund (Proprietary)

Accounts for the operations related to providing water and wastewater services to customers in the City of Marble Falls service area. The Water & Wastewater Fund contains the following departments or functional units: Water Services, Water Plant, Wastewater Services, Wastewater Plant, Wastewater Irrigation System, and Debt Service. The respective Water and Wastewater Fund department codes are the following: 560 Water Services, 561 Water Plant, 562 Wastewater Services, 563 Wastewater Plant, 564 Irrigation System, and 570 Debt Service.

04 Debt Service Fund (Governmental)

Accounts for the accumulation of resources from property taxes or transfers from other funds, and the payment of general long-term debt principal and interest.

Special Revenue (Governmental)

Accounts for specific revenue sources that are legally restricted to expenditure for specific purposes. The Special Revenue funds for the City of Marble Falls are Hotel/Motel Tax Fund, Cemetery Fund, Police Forfeiture, MF Trunked Radio System, Economic Development Corporation, Hotel Conference Center Fund, TIF Fund, Equipment Replacement Fund, Impact Fee, Police Federal Forfeiture, Court Technology, Building Security Fund, and Juvenile Case Manager Fund.

Capital Projects Fund (Governmental)

Accounts for the revenues, most of which are derived from bond proceeds, and expenditures related to the acquisition of major capital facilities. The funds for the City of Marble Falls are: Utility Improvements, Parks Improvements, and General Improvements.

Basis of Accounting and Budgeting

The City’s accounting for all general governmental funds are maintained on the modified accrual basis. This method recognizes revenues when they are measurable and available and expenditures when goods and services are received. The exception would be the principal and interest on long term debt, which is recognized when paid. The proprietary fund is accounted for using the full accrual basis. The budgetary basis for both the general governmental and proprietary funds is the modified accrual basis, which differs from the accounting basis for the respective funds.

REVENUE DESCRIPTIONS

General Fund

Property Tax Rate and Property Tax Revenue. The City's property tax revenue is generated by the total assessed value of all taxable properties on the tax roll within the City. The City contracts with the Burnet Central Appraisal District for the appraisal of properties and for the collection of property taxes.

Under state law there are five separate tax rates calculated by the appraisal district.

1. No-New-Revenue Rate: If adopted, this rate would provide the same amount of revenue collected last year from properties on the tax roll. This rate calculation requires the taxing entity to account for changes in the value of existing properties. This rate calculation is not affected by new properties.

2. Notice and Hearing Rate: This rate is any amount above the No-New-Revenue Tax Rate. A public hearing must be held regarding the tax rate if this or a higher rate is adopted.

3. Maintenance and Operations Rate: This rate is one of two component rates that make up the total tax rate. Revenue generated by this rate is used to fund general operations of the City.

4. Debt Service Rate: This rate is the second of two component rates that make up the total tax rate. This rate is set by law in an amount sufficient to generate enough revenue with which to pay the City’s maturing general obligation debt.

5. Voter-Approval Rate: The Voter-Approval rate is the highest tax rate that the City may adopt without holding an election to seek voter approval of the rate.

Sales Tax Collections. Sales and use taxes are levied on all taxable sales within the City. The current sales tax rate is 8.25%. The Texas state sales and use tax rate is 6.25%; per state statute the City levies the local 2% for a total maximum combined rate of 8.25%.

Franchise Fees. These fees are derived from major public utilities operating within the City and are intended to reimburse the City for the use of public streets and rights of way. The fee is generally computed as a percent of gross receipts and the percentages vary among the utility classes. The fees are applicable to Pedernales Electric Cooperative, ATMOS, Northland Cable, Waste Management and various telephone service providers.

Licenses, Permits and Fees. Revenue from these categories is intended to cover the costs of general government services such as building inspection, plat recording and consultation and other various services. The City increased the fees in October 2016. These fees have been very low in comparison to other neighboring communities.

Proprietary Fund (Water and Wastewater Fund)

Water & Sewer Revenues. These revenues are generated from water and wastewater billings. Projections of these revenue items are partly determined by historical collections and projected growth. This year we utilized our forecasting projections of five years in the future in order to assist us in setting the utility rates. The various assumptions used to project the growth are continuously reviewed and adjusted as needed.

Other Charges for Services. Revenues included in this category are water and wastewater connection fees, connects and disconnects of services. These fees are usually one time fees and are directly related to the housing growth in the city.

Purpose

The City of Marble Falls has established financial policies to achieve and maintain positive long-term financial condition. These policies provide guidance to the Finance department in planning and managing the City’s financial affairs and in developing recommendations to the City Manager and City Council. The policies are adopted and amended by City Council or are stipulated in the City Charter or by state law.

Budget Policies

1. The City shall adopt a balanced operations budget, where operating revenues are equal to, or exceed, operating expenditures. In cases, where there is an excess of expenditures over revenues the City Council may approve utilizing unappropriated reserves for the shortage.

2. Departmental budgets are divided into two categories: Operating and Capital Outlay. The department director may exceed budgeted line item amounts, making sure to not spend over the limits of the total Operating budget, net of salary and benefits. No additional personnel positions may be added without City Council approval. The Capital Outlay budget is allocated for specific projects with specific amounts. Any alteration to the Capital Outlay portion of the budget requires an approved budget amendment.

3. The City Council may amend the budget by ordinance, but shall not authorize expenditures in excess of the total estimated revenue plus fund balance. Amendments are regularly reviewed at midyear. Approved amendments are filed with the City Secretary.

4. Financial control systems shall be in place to monitor compliance with the adopted budget.

Capital Expenditure Policies

1. Any item costing $5,000 or more and having an estimated useful life of 5 years or more will be classified as capital outlay expenditure. These items are itemized separately in the department line item budget.

2. All capital outlay items shall be inventoried annually and shall have a fixed asset tag when feasible.

3. Construction in progress and capital improvement projects that will be funded during the fiscal year will be shown in the appropriate budget.

4. The City Council may issue bonds, certificates of obligation, tax notes, or other evidences of indebtedness for the purpose of buying or constructing capital assets.

5. All capital projects shall be financially monitored to ensure compliance with the approved funding for the project.

Capitalization Policy

Capital assets categories, thresholds and useful life will be:

Classes of Assets Threshold Useful Life

Land $5,000 capitalize only

Land improvements $5,000 10-20 years

Buildings $5,000 25-40 years

Building Improvements $5,000 25-40 years

Vehicles $5,000 5-10 years

Equipment/Machinery $5,000 5-10 years

Infrastructure $5,000 20-40 years

Utility Systems $5,000 25-40 years

For clarification purposes of this policy the above items are generally defined as but not expressly limited to the following definitions:

1. Land is the purchase price or fair market value, in the case of donated property, at the time of acquisition. Right of way acquisitions are included in this category.

2. A building is a structure that is permanently attached to the land, has a roof, and is partially or completely enclosed by walls. A building improvement must extend the life of the building or increase the value of the building.

3. Building improvements include fences, parking lots, recreation areas, etc.

4. Infrastructure and Utility Systems are considered stationary and can be utilized for a significantly greater number of years than most capital assets. Examples are streets, water lines, wastewater lines, gutters, curbs, fire hydrants, bridges, dams, etc.

Reporting Policies

1. The budget will be prepared in accordance with GASB (Governmental Accounting Standards Board) and GFOA (Government Finance Officers Association) guidelines. Copies of the budget will be available for public viewing at City Hall and on the City’s website.

2. Quarterly financial statements will be given to the City Council.

3. Quarterly investment reports will be given to the City Council.

4. An annual audit will be performed by an independent public accounting firm and the results of the audit will be summarized in a Comprehensive Annual Financial Report. The report will be presented to the City Council upon completion and will be available for public viewing at City Hall and on the City’s website.

Fund Balance Requirements

The City of Marble Falls requires that General Fund, Water & Wastewater Fund and Economic Development Corporation Fund maintain a minimum fund balance of 25% of the current year operations and maintenance budget for each of the mentioned funds.

Donation Acceptance Policy

Scope

The purpose of this policy is to establish procedures for authorizing the acceptance of donations to the City of Marble Falls for any purpose.

Definitions

A "Donation" is defined as any monetary or nonmonetary gift, equipment, in-kind goods or services or bequest to the City of Marble Falls for which the donor has not received any goods or services in return. A monetary donation can include cash, check, money order or other negotiable instrument. A nonmonetary donation includes real or personal property as well as in kind goods or services. A nonmonetary donation's "value" must be assessed and documented by the donor, not by staff.

Accounting

The city of Marble Falls finance department is responsible for providing for the deposit and financial administration of any donation to the city. If necessary, the finance department shall track the proposed use of any such donation and shall maintain separate records of accounts showing receipts and disbursements. The finance director may establish further rules and regulations for the accounting and administration of donations, consistent with this policy, as deemed necessary by the director.

Acceptance of donations in general – Donor’s desired use or conditions

The city has the discretion to accept or decline any proposed donation, whether conditioned or not, subject to the provisions of this policy. In the event a department head has reason to believe a donation could cause or result in an appearance of impropriety, the department head shall consult with the city manager who may then elect to consult with the city attorney and/or city council, prior to accepting the donation. Conditioned donations shall be assigned to a project or existing fund consistent with the donor’s desired use, as long as such condition(s) do not conflict with city, state or federal law, in which case the city shall ask that the condition(s) be removed or decline the donation.

Generally

The procedure for approval of accepting donations is contingent upon the value and shall generally follow the requirements set forth in this policy, and in any instance shall be in accordance with all applicable laws.

Acceptance of monetary donations

A. Donations under $1,000. The city manager or all department heads are authorized to accept any monetary donation of less than $1,000 on behalf of the city, and shall

deposit such monies with the finance department.

B. Donations between $1,000 and $5,000. Donations of this amount must first be approved by the city manager, so that he/she can evaluate any potential policy

implications associated with the donation. The city manager may elect to consult with city council prior to accepting any monetary donation.

C. Donations over $5,000. Any monetary donation over $5,000 must be approved by city council so that the council can evaluate any policy implications associated with

the donation.

D. Conditioned Donations. In the event that a monetary donation is conditioned or donated for a special purpose, prior to acceptance, the city manager, department

head or city council (depending on who is accepting the donation under subsections A, B, or C of this section), shall consider the long-term impacts of the donation,

particularly where there could be significant future or ongoing operations and maintenance or capital costs associated with the donation.

E. Council Notification. The City Manager may elect to notify council of any accepted donation, regardless of value, in order for the donor’s generosity to be officially

acknowledged by council.

Acceptance of nonmonetary donations

A. Donations of Personal Property Valued under $5,000. All donations of personal property with a current value of less than $5,000 may be accepted by any department director or the city manager, except as follows. In the event of a donation of personal property which could require future maintenance or repair (e.g., office equipment), the department director should first assess all related future costs and submit the assessment of expenses to the city manager for approval prior to acceptance of the donation. In addition, if a conditioned donation could have long-term impacts, such as significant operations and maintenance or capital costs, the city manager shall consult with the city council prior to accepting the donation.

B. Donation of Personal Property Valued at Over $5,000. All donations of personal property with a current value of $5,000 or more must first be approved by the city

council. If the personal property could require future maintenance or repair, the department director should first assess all related future costs and submit the

assessment of expenses to the city council. For conditioned donations, the department director should also provide the city council with an assessment of long-term impacts, such as significant operations and maintenance or capital costs.

C. Donations of Real Property. All donations of real property, whether conditioned or unconditioned, must first be approved by the city council by resolution.

Donations of art work.

Notwithstanding any other provision of this policy, determination whether to accept art work proposed for donation to the city for permanent or long-term (exceeding one year) public display shall be made by the city council.