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<br />City of Paris, Texas <br />Notes to Financial Statements <br />September 30, 2006 <br /> <br />III. Stewardship, Compliance and Accountability (Continued) <br /> <br />A. Budgetary Information (Continued) <br /> <br />The budget for the next fiscal year is legally enacted by the City Council through passage of an <br />ordinance not later than the twenty-seventh day of the last month of the fiscal year. If the City <br />Council does not enact the budget within this time period, then the budget as submitted by the City <br />Manager becomes the legally authorized budget. <br /> <br />Expenditures may not legally exceed appropriations at the department level for each legally <br />adopted annual operating budget. The City Manager may, without Council approval, transfer <br />appropriation balances from one expenditure account to another within a department or agency of <br />the City. The City Council, however, must approve any transfer or unencumbered appropriation <br />balances or portions thereof from one department or agency to another. During the year ended <br />September 30, 2006, there were no budget amendments as no supplemental budgetary <br />appropriations were necessary during the year. <br /> <br />B. Excess of Expenditures Over Appropriations <br /> <br />For the year ended September 30, 2006, expenditures exceeded appropriations in the Public <br />Works, Emergency Medical Services, Traffic and Public Lighting, and Library. <br /> <br />These over expenditures were funded by available fund balance and other fmancing sources. <br /> <br />IV. Detailed Notes on All Funds and Component Unit <br /> <br />A. Deposits and Investments <br /> <br />Custodial Credit Risk for deposits is the risk that in the event of a bank failure, the City's deposits <br />may not be returned or the City will not be able to recover collateral securities in the possession of <br />an outside party. The City's policy requires deposits to be secured by collateral valued at market <br />or par, whichever is lower, less the amount of the Federal Deposit Insurance Corporation <br />insurance (FDIC). Collateral agreements must be approved prior to deposit of funds as provided <br />by law. The City was not exposed to custodial credit risk since deposits are insured or collaterized <br />with securities held by the pledging fmancial institution's agent in the name of the City. <br /> <br />34 <br />