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REQUIRED SUPPLEMENTARY INFORMATION NOTE 1 - BUDGETS AND BUDGETARY ACCOUNTING Formal budgetary integration is employed as a management control device during the year for the general fund, special revenue funds, debt service funds, and capital projects funds. Budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) for the general, special revenue, debt service, and capital projects funds (except the General Improvement District 1965 construction fund). However, capital outlay in special revenue and capital projects funds, is budgeted on a project length basis. The City Manager submits a recommended operating budget in May each year to the City Council for the fiscal year commencing the following July 1, showing proposed expenditures by programs and the means of financing them. The City Council conducts budget study sessions, which are open for public comment, before adopting the budget. Once the budget is adopted, expenditures may not legally exceed appropriations at program level except when the excess is attributable to a particular activity for which the City has been reimbursed. This is especially apparent in the Community Development Program where developers reimburse the City through sub-division fees and environmental impact report fees. At the request of the department head through the City Manager, the City Council may, by resolution, transfer appropriations between sub-programs and funds, but shall not change total appropriations. Any increase or decrease to the total appropriations provided for in the budget must be carried through by ordinance passed by the City Council. The City Manager may authorize the transfer of funds between object categories within a sub-program of a department. The adoption and administration of the Port of Redwood City budget, unless property tax revenues are requested, is exclusively under the control of the Board of Port Commissioners. Budgeted amounts are as originally adopted, or as amended by the City Council during the fiscal year. Individual amendments were not material in relation to the original appropriations. All unexpended appropriations lapse at the end of the fiscal year. Appropriations for capital projects carried over or encumbered are re-appropriated and carried over in the following year's budget. 59