Major Funds

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City Budget by Fund 2017The budget is made up of different funds according to where the money came from and how it can be spent. Many of the key funds or fund groups are detailed in the following section.

General Governmental Funds

These are resources and expenses that are discretionary in nature and can be allocated based on the needs of the City. The majority of the funds go to Public Safety (Police, Municipal Court, Fire and Medical) and to departments that the support those efforts, like Information Technology and Business Services. These funds also support Parks, Library and Culture areas, as well as Community Development and Outreach.

Enterprise Related Funds

The Enterprise Related Funds consist of all of the utilities (Electric, Natural Gas, Water, Wastewater, Solid Waste and District Cooling), the Golf Course, the Mesa Convention Center, the Hohokam Stadium, and the Cubs Spring Training Facility. Falcon Field was previously included in the Enterprise Fund but because airports have certain funding restrictions, a separate restricted fund has been created in FY 2014/15 to account for Falcon Field activities.

Restricted Funds

Restricted funds are legally restricted to be used for a specific purpose as defined by federal, state or local governments.

  • Transportation Related Restricted Funds

State of Arizona collects Highway User Revenue Funds (HURF) and a portion is given to cities. This is the fuel tax paid at the pump by the consumer. Arizona’s three largest cities also receive an additional allocation of the revenues referred to as HURF 3%. The other component is a 0.30% City of Mesa transaction privilege tax dedicated to street expenditures referred to as Local Street Sales Tax (LSST).

HURF and LSST are managed together as both funds are restricted to streets related expenditures. The State’s diversion of HURF revenues and the reduced sales tax receipts due to the recession have caused some street maintenance activities to fall behind the schedule anticipated when the LSST was approved. More of this previous diversion has been restored, but it is still short of original levels. The City’s street maintenance program outlines the highest priorities for allocation of available resources. Expenditures are modified to remain within available resources. 

  •   Falcon Field Airport Fund

Starting in FY 2014/15, Falcon Field Airport expenditures and revenues are recorded in a separate fund. This is because of restrictions related to airport funding. Revenue generated by airport functions must be used to support airport operations. Profits from airport operations cannot be used to pay for general city purposes. Although Falcon Field revenue cannot be used to support other Mesa governmental operations, Falcon Field benefits the City by allowing customers from around the country to connect to business in Mesa.

  •  Environmental Fee Fund

The Environmental Fee Fund tracks the Environmental Compliance Fee that is applied to each utility account customer to meet the projected costs of Federal and State environmental mandates. Neither the Federal nor the State government provides funding for these environmental mandates.

Grant Funds

The City pursues grants to fund projects, implement or enhance programs, and fund the acquisition of new equipment. While the application for grant funding requires preparation time by City staff as well as subsequent tracking of grant expenditures, grant awards provide the City with the means to fund services that would not otherwise be funded in the City’s budget. Not all grants applied for are awarded to the City. The City includes grants currently being applied for in the adopted budget to allow for budget authorization capacity.

Trust Funds

The City of Mesa uses trust funds to provide funding for employee benefits, workers compensation, and city liability.

The Employee Benefit Trust (EBT) Fund is used to fund employee health benefits and other employee benefit programs that the City sponsors. It is funded through setting of medical and dental premiums that are paid partially by the employee and partially by the City.

The Worker’s Compensation Fund is used to fund claims related to employee work-related injuries.

The Property and Public Liability (PPL) Fund is used to pay claims related to lawsuits against the City. The value of claims paid can vary significantly by year. The length of time from the submission of a claim to its final resolution can take over a year, contributing to the high variability of annual costs.

Debt Service Funds

Debt Service funds are used to pay principal, interest, and related service charges on obligations resulting from the issuance of bonds. The City issues debt in the form of bonds in order to finance long-term capital improvements such as streets, buildings, utility systems, etc.

Bond Funds

Bond funds are used by the City for capital improvement projects.

Carryover Funds

Carryovers funds are for items that were budgeted last year and not received. For example, if Solid Waste plans on purchasing a new garage truck that would not arrive until the next fiscal year, they would carryover the funds from the current fiscal year to the next to pay for the vehicle when it arrives.

Contingency Funds

Contingency funds are for unexpected events or other unforeseen needs that arise during the course of the fiscal year. Examples include natural disasters, new unfunded mandates, or the receipt of unanticipated grant funding.