Reader's Guide

Welcome!

You are looking at the published Town of Northlake budget for the fiscal year beginning October 1, 2021, and ending September 30, 2022. This document has been specially prepared to help you, the town resident, learn about your town's financial management, administration, and operations.

This Reader's Guide provides some foundational information for readers unfamiliar with municipal budget documents.

Budget documents provide a large amount of information about topics and functions that may not be well-known to all readers. This section is intended to ensure that every resident has the opportunity to read and understand their Town's budget.

What is the purpose of the town budgeting process?

Budgeting is how the Town of Northlake decides how to use its financial resources to fund services and projects that benefit town residents. The process is complicated because, unlike private businesses, the Town of Northlake has an extensive range of responsibilities. It has to be accountable to its residents, the State, and the Federal government. Also, unlike private businesses, the town cannot drop services simply because they are unprofitable.

This budget document summarizes the town's financial policy and plans for the fiscal year. The operating budget represents the annual plan for allocating town resources for the period beginning October 1, 2021 and ending September 30, 2022 (Fiscal Year 2022). Amounts are shown to the whole dollar, so there may be slight variances.

What is the budget development process?

The budget process does not follow the calendar year. Instead, it follows the "Fiscal Year" (also shown as FY for short). The fiscal year begins October 1st and ends September 30th. Northlake's budget process can be broken down into three distinct phases: Strategic Planning, Budgeting, and Accounting/Auditing.

Strategic Planning is the first phase of the budget process. During this phase, the Mayor meets with the Town Administrator to set budget goals for the upcoming year. During Strategic Planning, the Town reviews financial information from the previous year's Comprehensive Annual Financial Report (CAFR) and the progress made towards achieving the goals outlined within the town's strategic plan. This is a time for review, reflection, and planning.

Budgeting is the second phase of the budget process. Financial projections are compiled, synthesized, and presented to the Town Council during this phase. This phase begins with the Budget Kickoff in the spring and ends when the budget is formally adopted in the fall.

Accounting/Auditing is the last phase in the budget process. Financial information from the previous fiscal year is compiled, tested, and certified by the Town Auditor during this phase. This phase begins in late fall and ends during the winter.

The Town keeps its money in multiple separate funds. What do these funds do? How are they different from each other?

The Town's money is financially organized into many separate accounting entities known as funds. Each fund is a distinct division for accounting and budgeting purposes. The fund accounting process allows the Town to account for revenues restricted by law or policy to a specific use or purpose. Town Council adopts the budget at a fund level. The council must approve any unbudgeted movement of monies between funds. The Town Administrator's level of control is at the fund level.

The State requires fund accounting. Texas law governs how municipalities in the State will account for their revenues and expenditures. All cities are audited annually by an outside accounting/auditing firm to ensure they have followed the accounting rules.

The Town of Northlake maintains three Fund Types, which support different primary functions:

Governmental Funds are used to account for "traditional" governmental activities.

Proprietary Funds are based on the premise that some town services should be conducted as businesses.

Special Taxing Districts are separate taxing entities created for a specific purpose.

Fund Categories are groupings of funds into similar groups depending on either their funding source or use of funds. For example, the "Property Tax" category consists of the General Fund and Debt Service Fund, funded primarily (although not entirely) by property taxes.

There are only two funds that are not a part of the budget. The Canyon Falls MUD & Argyle Sewer funds are comprised only of liability & receivable accounts and thus have no budgeted lines.

How is this budget document organized?

This budget document is divided into three main sections: The Introduction, Budget Details, and the Appendix.

Introduction: This section has several valuable informational items that can be reviewed quickly, including the Mayor's Message, the Town Council's Strategic Plan, the Property Tax Calculation, and the Budget-in-Brief.

Budget Details: This is the central portion of the budget document. It is divided into two significant sub-sections: Departmental Summaries and Fund Summaries.

Departmental Summaries: These contain detailed information about each department's purpose, accomplishments, goals, revenues, expenditures, and changes for the upcoming year. This section aims to demonstrate how each department is actively supporting the achievement of the Town Council's strategic goals.

Fund Summaries: These contain detailed information about each fund's purpose, revenues, expenditures, and changes for the upcoming year. This section provides financial context about which services are provided from each fund.

Appendix: This section provides additional helpful information for further references, such as the Town's organizational chart and a glossary of terms.