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R4bs3--- -----------------V Memo To: Mayor and Council, Neal Beets, City Manager From: Chris Miller, Finance Director Date: July 29,2002 Re: Budget Primer Introduction In an effort to facilitate the budget process, the following budget primer has been prepared. This overview will address a number of budget fundamentals, and clarify some of the language and terms that are commonly used during budget discussions. City Fund Structure Like all municipalities, the City of Roseville accounts for the City's financial activities through what is known as "fund accounting." The City has many "funds" each with a specific purpose. A comparison can be made to an individual having separate checkbooks; one to pay bills, one for entertainment and other discretionary purchases. The City utilizes the following types of funds: The General Fund provides for the basic or "general" activities of the City. These include police, fire, streets, fleet maintenance, and general government activities. Approximately one- half of these activities are funded through property taxes, with the remaining coming from state- aids, court fines, charges for service, and interest earnings. Special Revenue Funds are used to account for monies that are collected and expended for specific purposes. The City has the following special revenue funds: ❑ Parks & Recreation ❑ Community Development ❑ Communications ❑ Information Technology ❑ License Center ❑ Lawful Gambling Regulation ❑ Parks Maintenance ❑ Housing Programs Each of these funds has separate funding sources. With the exception of Parks & Recreation, and Parks Maintenance, all programs currently operate without property tax dollars. The Debt Service Fund accounts for the payment of principal and interest on bonds issued by the City. Funding sources include property taxes, special assessments, and interest earnings.