07 - Annual Comprehensive Financial Report

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CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 I. Summary of Significant Accounting Policies (Continued) F. Budgetary Information (Continued) 1. Budgetary Basis of Accounting (Continued) financial activities, which are not subject to an appropriated budget and the appropriation process or to any legally authorized nonappropriated budget review and approval process. The community development block grant fund is not annually appropriated. The City has no special revenue funds which are reported as major funds. At the close of each fiscal year, any unencumbered appropriation balance (appropriations including prior year encumbrances less current year expenditures and encumbrances) lapse or revert to the undesignated fund balance. At least thirty days prior to the beginning of each fiscal year, the City Manager submits to the City Council a proposed budget for the fiscal year beginning on the following October 1. The operating budget, which represents the financial plan for the ensuing fiscal year, includes proposed expenditures and the means of financing them. Public hearings are conducted at which all interested persons' comments concerning the budget are heard. The budget for the next fiscal year is legally enacted by the City Council through passage of an ordinance not later than the twenty-seventh day of the last month of the fiscal year. If the City Council does not enact the budget within this time period, then the budget as submitted by the City Manager becomes the legally authorized budget. 2. Excess of Expenditures Over Appropriations For the year ended September 30, 2021, expenditures may not legally exceed appropriations at the department level for each legally adopted annual operating budget. The City Manager may, without Council approval, transfer appropriation balances from one expenditure account to another within a department or agency of the City. The City Council, however, must approve any transfer or unencumbered appropriation balances or portions thereof from one department or agency to another. During the year ended September 30, 2021, the City Council approved a transfer of $785,000 from various departments to other departmental line items. Expenditures exceeded appropriations in the following departments: Council $93,412, Manager $2,250, Attorney $25,146, Police $303,882, Fire $307,187, Public Works $58, Parks and Recreation $153,053, Traffic and Public Lighting $13,972, Health $2,000,060. G. Assets, Liabilities, and Equity I. Cash and Cash Equivalents For purposes of the statement of cash flows, cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from date of acquisition. 2. Investments Investments are reported in the accompanying balance sheet at fair value with changes in fair value being reported as part of investment income. PEDC holds investments in two external investment pools, Texas Class and Lone Star Investments. Both investment pools carry investments at amortized cost, which 30