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Capital Replacement Funds account for monies set aside for the purposes of replacing existing <br /> capital assets. This includes park improvements, pathways, vehicles, heavy equipment, and <br /> building renovations. Funding sources include property taxes, interest earnings, and the <br /> accumulation of depreciation charges. The use of depreciation charges allows for a steady on- <br /> going funding source thereby avoiding large "spikes" in the budget. <br /> Capital Project Funds provide separate accounts for major street improvements, and include <br /> both total reconstruction, and the City's Pavement Management Plan. The improvements of <br /> MSA streets are accounted for in these funds. <br /> Enterprise Funds operate like private-sector businesses and operate on revenue generated by <br /> user fees. The City current operates five enterprise funds which include: <br /> ❑ Water <br /> U Sanitary Sewer <br /> 0 Stormwater <br /> ❑ Solid Waste Recycling <br /> ❑ Golf Course <br /> Rates are set annually by the City Council to provide for their activities. <br /> Trust and Endowment Funds <br /> Trust and endowment funds or "permanent" funds are designed to provide a long-term funding <br /> source for specific city services, whereby the interest earnings of the funds are used to support <br /> operations, while leaving the principal funds intact. The City currently utilizes the Parks <br /> Infrastructure Maintenance Fund, Infrastructure Replacement Fund, Tax Reduction Fund, and <br /> Cemetery Fund. <br /> Role and Purpose of the Budget <br /> The budget is an integral tool in the management of the City's finances. A budget can serve both <br /> as a financial plan which specifies how resources are allocated, as well as a management control <br /> tool to monitor how those resources are expended over a City's fiscal year. The budget can also <br /> serve a communication device to provide the community with information on city programs and <br /> services. <br /> By State Statute, municipalities are required to adopt a preliminary budget and tax levy for the <br /> following year by September 15'h. Once the preliminary levy is set, it can be reduced, but not <br /> increased, except in very unique circumstances. <br />