HomeMy WebLinkAboutIR 7227 INFORMAL REPORT TO CITY COUNCIL MEMBERS NO. 7227 p-1
November 7, 1987
To the Mayor and Members of the City Council
Subject: Special Revenue Sub-Fund for the Fort Worth Zoo
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The Fort Worth Zoological Association, during the negotiations with the City
staff of their contract, expressed a desire to have the contractual payments
made to the City for concession rights to be used only for the operation
of the Zoo. Staff has investigated this possibility and determined that a
Special Revenue Fund could be used to obligate revenue for a specific purpose.
Generally Accepted Accounting Principles (GAAP) states that Special Revenue
Funds are used to account for resources legally restricted to expenditures
for specified current operating purposes. Historically, the City has maintained
one Special Revenue Fund with multiple sub-funds.
Under the current system, any revenues paid into the General Fund are
co-mingled with all other revenues to provide the overall revenue support
for the entire fund. At the end of the fiscal year, any excess of revenues
over expenditures lapses into the General Fund's Undesignated Fund Balance
and are subject to reappropriation wherever the Council desires. By contrast,
a Special Revenue sub-fund is self-contained where revenues and current
expenditures for that one unique function are recorded. At the end of the
fiscal year, any excess of revenues over expenditures, lapses to the
Undesignated Fund Balance of the Special Revenue Sub-Fund and is available
for reappropriation to the same sub-fund.
The use of a Special Revenue sub-fund will allow for the accounting of any
revenues specifically or legally obligated to be used for the operation of
the Zoo. This will not be like an enterprise fund which captures the full
cost of providing zoo services, but merely a method of matching current
operating expenditures with current revenues which are (1) the proposed
revenues from the Fort Worth Zoological Association contract, (2) gate fee,
and (3) the General Fund subsidies to the Zoo operations.
Any General Obligation Bonds issued on behalf of Zoo improvements would still
be handled as before and serviced from General Debt Service.
In order to ensure that all revenue legally obligated to the Zoo is used
for the entended purpose, staff recommends that the Zoo operation be placed
in sub-fund of the Special Revenue Fund. Unless otherwise directed, staff
will establish a zoo sub-fund in next fiscal year's budget.
Should the City Council desire additional information on this matter, it
will be provided upon request.
Douglas Harman
amity Manager
-ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS