Fiscal Year 2019 Budget

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BUDGET DEVELOPMENT Fund Structure The financial matters of the City of Spencer are arranged into groups called funds. Each fund is a separate accounting activity. The funds are: Governmental Funds using cash basis accounting: General Fund is the chief operating fund of the City. All general tax revenues and other receipts that are not allocated by law or contractual agreement to some other fund are accounted for in this fund. From this fund are paid the general operating expenses, the fixed charges, and the capital improvement costs that are not paid from other funds. Special Revenue Funds account for proceeds from specific sources (other than those accounted for within capital projects funds) which are usually required by law or regulation to be accounted for in a separate fund and to be expended for specific purposes. Debt Service Funds account for money dedicated to paying the city’s bonded general obligation debt. Debt associated with proprietary funds are included in those budgets. Capital Project Funds account for the larger construction projects in the city. This includes projects for both general fund departments as well as proprietary fund departments. It also includes the city’s general capital improvement reserve fund which is utilized for a varying degree of projects. Permanent Funds account for resources that are legally restricted to the extent that only earnings, and not principal, may be used to purposes that support the City’s programs for which the resources were given for. Proprietary Funds using cash basis accounting: Enterprise Funds account for business-like activities of the city. There are five proprietary funds that include the Sanitary Sewer, Northern Plains Regional Landfill, Solid Waste Collection, Northwest Iowa Regional Airport and the Spencer Municipal Golf Course. Proprietary fund operations do not receive support from property tax dollars. Internal Service Funds account for providing goods or services to various city departments. These include the Central Garage and Fuel Equipment Fund. The Central Garage accounts for the purchase of stock parts utilized in the repair and maintenance of city equipment. The Fuel Equipment Fund accounts for the operation of the central fueling facility that is utilized by the City, Spencer Schools and Spencer Hospital. Major Funds Major funds are the funds of the city that are larger in terms of assets, liabilities, revenues or expenditures. The General Fund is always a major fund as well as the Road Use Tax Fund, Local Option Sales Tax, Debt Service, Capital Projects, Sanitary Sewer, Solid Waste and Landfill Funds. Funds considered non-major funds may be considered major for one or more years depending on the activity in that fund.