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O N 0) Cl) N U- O W 4 0 tN4�. 4 C {p�m C N W E o � a g N m m LL .spy T �c wf rf N O m m O jp O � N id Q O 7 N V Q O � O Y N Q O 7 O V N Q r 0 0 N H � D W 9 N N m O V O O O o C E o � N m IL a QQ S LL 0 0 0 m vS � uS o � n n n o a Y N Q C m N N N t0 tp Oac nl N N N V Q _ � ct ct O O q O O N Q � O O n n r 0 0 0 N Q h w c� tt Wa� U n m '6 O N LO N ! � u . . r � IL � U- \) 3 kI &\ W . .. CC .. Ci- .ƒ2\ _ , ... ®2 ®J ;J ®J $ } j § /E k i} . . �/ |( \§ �L »k` ); (0 (1. £ 77$ #4 0 §)6- $§ dE zC. /- ) )) �\ {�� /® kA§ }) \uj 2§8 § ( k. 22§ § Jk (}£$ .f»ec »f \ 04 ,. ci��166 C6 ... '^© § § .E,m}«¢ > �?K$ «§§»7 \\/;/\ k 40 \..,,..} „}\/}. „\ Ch \ OQ(k (\ k k vs E \ § m City of Medina, Washington Financial Management Policies General Financial Goals: Ensure a financial base that is sufficient to sustain City of Medina Municipal Services, able to withstand local and regional economic challenges, able to adju�, changes in service requirements and maintain sound fiscal policies in support oee goals. Financial Management Policies: The Financial Management Policies assembles They are the tools to ensure that the City is fine service objectives. The individual policies conti financial planning and the internal financial mar The City of Medina is accountable toy athzens must be used wisely to ensure adequ� fiu� infrastructure necessary to meet the co i, safeguard the fiscal stability..required to a` 'afire Policy Objectives The Financial Manager i • Gui "' 'cil a ve the all of the City's finar policies in one document. Ally able to meet its ediate and long-term i6ed herein serve as guic " s for both the 3gef�nt operations of the ` y for the use,,_ public dollars. Murrrcipal resources I for the services, public facilities, and "sent and future needs. These policies licy objectives for the City's fiscal performance: •.1, '" lish operatihat minimie''the cost of government and financial risk. • Main evenue poli hat ehs� adequate funding for desired programs, currently, as well as f future. ; • Promote souancial , agement by providing accurate and timely reporting information on t a condition of the City. �. • Protect the City's crerating and provide for adequate resources to meet the provision of any debt incurred by the City. • Ensure the legal use of financial resources through an effective system of internal controls. • Promote cooperation and coordination with other governments and the private sector in the financing and delivery of services with the goal of obtaining the best value for the tax dollar. 1 Budget Policies a. The annual budget will be designed in support of the Strategic Goals of the City and will focus on continual evaluation of the City's success at achieving the goals and policies it has set for itself. The operating budget is the City's comprehensive annual financial plan which provides for city services based on City priorities. b. The annual budget shall be developed consistent with state law and in a manner which encourages early involvement with the public and City Council. ,y, c. The City Council will establish municipal service levels fehdpriorities for the ensuing year prior to and during the development of the prelimiraa -,', d. The City will maintain a balanced budget. A b le`t bd budget is defined as current revenues + plus fund balances are = equal to or gre 4an currenteted expenditures. e. The Finance Department will maintainrs-em for monitoring tine City's financial performance. The system will provide th �,Qjty Council with monthi r and/or quarterly information in a timely manner at the fund�t, by rev �e resources �d department level /,� ' 0 expenditures. Jyg .,. ,����s``� Under the provisions of state `lew(r ti the City's 6W ing procedures, the budget is adopted at the fund level. Adjustments,or reallocate - s,�apf existing appropriations within the fund level, which do not change the bottom line of the �, may be done administratively and do not require Council action. }editions or reduc' ,fs of fund level appropriations, which change the a of the'fuOd, requirean amencfnt of the budget and City Council action dins x g. Supplemental ;ot appro ' tions (ap�riations requested after the original budget is adopted) will be s ed err form of a�dget Amendment and will be considered as a resul#t�yailabi es. o,- h. Tfrnuavc will p� �e forth ,construction, maintenance and replacement o"1e City s Capifa�, facilities d equipm consistent with the Capital Facilities Plan/ C ehensive Plan/apital� ovement Plan, including the associated cost for operating the fa f S. , M y=ry i. The City ttmaintain allets at such a level that it protects the City's capital investment and minimize uture main*ance and replacement costs. AR j. The City will dew q ark �ipment replacement and maintenance needs list by department for the life cycle o�pment and will utilize this list during the annual budget er, development process k. Small and attractive assets: accurate inventory of all physical assets, their physical location, and serial numbers/asset id numbers will be maintained at the direction of the Finance Department to ensure proper stewardship of public property. I. Fixed assets: inventories of larger physical fixed assets costing more than $5,000 and having a useful life of more than one year, will be maintained on a Fixed Asset Schedule and will be updated as the property is added, retired or sold. 2 Reserve Fund Policies Adequate reserve levels are a necessary component of the City's overall financial management strategy and a key factor in external agencies' measurement of the City's financial strength. General Fund Operatina Balance: 25% Fund Balance ($1.25M in 2011 The City will maintain General Fund Operating Balances at a level of 25% of the Total General Fund Budgeted Expenditures. The GFOA recommends at a I� m, that general purpose governments, regardless of size, maintain a minimum of tw �' oaths of General Fund Operating Expenditures (16.691o) in their Unrestricted General Fund�N Historically, over the past 10 years, the lowest Balance of the General Fund was $1Ml �aaaa,.. The General Fund Operating Balance shall be flow to meet the daily financial operations neei In general, the City shall endeavor to support ongoil use General Fund Operations Balanp,4!!_a one-time development of a longer term fi The General Fund Operating Balance s of being unable to sustai policy level stated above fund balance level Budget surpluses in the operations,ft i 'i General ese a)'`'fre are s u r p b) The' has made sufficie '_support A surplus is defined as 11111 beginning fund balance. I/' above the amounts included porta rmi the and maintain edaft, rovi'de sufficient cash M ME perk with ongoi enues, but may 6ii/ 14o support City sere ' s pending the in a�r�iper that puts the City in danger 0,fund p, ating Balance falls below the ; ' „e a long term plan to replenish the nce may be used to fund one-time ppital Improvement Plan, or placed into the ining after all current expenditure obligations are met. n that revenues for the ensuing budget year are General Fund Operating needs. e between the actual beginning fund balance and budgeted of "under -expenditures" and/or "excess revenues" over and the following annual budget. Capital Fund Reserve Account: 20% Account Balance ($1M in 2011) The City may elect to maintain a Reserve Account within the Capital or General Fund to sustain City services in the event of a catastrophic event such as a natural/manmade disaster (e.g. earthquake, windstorm, flood, terrorist attack) or a major downturn in the economy. All expenditures which are transferred into and out of the Reserve Account, shall either be authorized by City Council during the annual budget process, or shall require separate City Council approval. 3 Equipment Replacement Account: The City may elect to maintain an Equipment Replacement Account for the purpose of funding fleet maintenance (police and public works) or a capital equipment reserve for the purpose of capital asset replacement. The City may elect to maintain a Capital Reserve Plan. Revenue Policies a. To the extent possible, a diversified and to improve the City's ability tortpw Ole flu to the Capital Improvement n will b" intained in order "o revenue sees. b. Revenue forecasts should be rdjs` ' ,yestimated' i based on the best information available. The Citywill take into sidet that revues are subject to local and �? , regional economic a�tavities c. Short-term (le.tln one) econo3% urn emporary gaps in cash flow: Expense reducs and/or r 011" rictions a imposed. ouncil may approve a transfer from the General Fund ResdtV0 Account dress a temporary downturn in City d. 10,E=term (grea .an one dear) revert downturns: Revenue forecasts will be revised. ses will be re d to'help, stabilize the long term impacts and/or revenue increases will nsidered. e. All potent ants shall arefully examined for matching requirements. Some grants 'IVmay not be ted if th cal matching funds cannot be justified. Grants may also be rejected if prog "�" r m continued with local resources after grant funds are exhausted. Prior t6, �pproval, future expenditure impacts (e.g. ongoing repairs and 1, maintenance) should ` "e identified and communicated to management. f. The City will set fee schedules at levels sufficient to cover the entire cost of service delivery. The City will systematically review user fees and consider adjustments as necessary to take into account the effects of additional service costs and inflation. g. The City will review contracts and leases, which result in revenues to the city on a timely basis in order to ensure approval by the Council and ongoing revenue streams. 4 Expenditure Policies Pu a. The City budget will provide for sustainable levels of service. b. The City will propose only those operating expenditures, which can be supported from on- going operating revenues. c. The City's operating budget will not use one-time expenditures. Before the City undertakes any ag expenses, the cost implications of such agreeme future years. Capital expenditures may be furfeC operating budget expenditure impacts of c E compliance with this policy provision. d. Department heads are responsible for for their department. �nues to support ongoing omits that would create fixed on -going ! e fully determined for current and �n o' me revenues, but the nditures''will be reviewed for their JW_dgets within" "total appropriation e. The City will maintain expend if 7-11 ones acc6` to state statute and administrative regulation. f. All compensation g and coll�d#tve barg �g will fot, n the total cost of y, � y¢ compensation, es direct salary, f�ealtfi ca'r6,beneits, pension contributions, education, tra allowan nd other nefits of a non salary nature, which are a cost to the City. j P; yfr chasm policies 4� ha. T�;ity will follow w� ted resolutions, ordinances and policies regarding proc6 i6ent. b. The Directo Finance s develop detailed procedures for purchasing, credit card usage, petty expere authorization and/or contract management activities. c. Federal funds or Grad# hen procurement involves the expenditure of federal funds or grants, the purchase shall be conducted in accordance with any applicable federal/grant laws or regulations. When purchasing items to be reimbursed by a grant, the purchaser will perform the due diligence required to ensure that the purchase meets the criteria of the specific grant prior to initiating the purchase and requesting a release of City funds for the purchase. d. Emergency Procurement: The City Manager or designee may make or authorize others to make emergency procurements of materials, supplies or equipment or services when a threat to public health, welfare or safety exists. State Laws relating to emergency declaration and emergency purchases will be followed. 5 Capital Investment Policies a. The City will make capital improvements in accordance with an adopted Capital Improvement Plan. b. It will be the policy of the City to maintain a Capital Facilities Fund to provide funding for future facilities including debt repayment. The use of any funds within the Capital Facilities Fund will be as approved by City Council. c. The Capital Improvement Plan and the base budget reviewed at the same time to ensure that the City's capital and operating needs 0hded and that the Capital Improvement Plan is aligned with the City's othe1 s plans. d. The City will identify the estimated costs and potential funds ����urces for each capital project proposal before it is submitted to Co�ncil for approval e. The City will comply with state and local (REET) Revenue. Accounting, Auditing and Financial The City will maintain funds in order to prov of n rdino "Use of Real"Mto Excise Tax reporting for all operations and ity goals and objectives are met. Accounting Records and I;kqportmg The City will ntain its accounting records in accordance with state a regula r d'-" acco 'ng and reporting will conform to Budgeting, IV „��, may,,, AccountsSysfeARS) fier ents as prescribed by the Washington � State A r s Office f3(r mir and ann�inancial reports will present a summary of financial ay by fund type wily rovided to the City Council. Auditing: The to Shall prepay ' d subn*in a timely manner, the Annual Financial Report to the Washington State' 'tor's Offic accordance with the standards established for the Annual Financial Report. Th �/;� shing tate Auditor's Office will perform the City's financial and compliance audits on a . � is. Results of the audit will be provided to the City Council in a timely manner. The Finance Department will develop, maintain, and consistently seek to improve cash management systems and processes which will ensure the accurate and timely accounting, investment and security of all cash assets. Cash received will be deposited in a timely manner and monies will be safeguarded (e.g. kept in a safe) until they are deposited. The City will establish a Petty Cash Fund in the amount of $200. The Petty Cash Fund is to be used solely for the purpose of making payment and/or small reimbursements for city related purchases. 2 Debt Policy The City will maintain adequate available debt capacity for specific priority projects. (See Attachment A as an option) Investment Policy The City will use the State Investment Pool for all funds not reqLN for cash flow. 7 Attachment A Debt Policies The objectives of the City's Debt Management Policy will be to minimize the need for debt by maintaining strong revenue sources which meet or exceed expenditures. Debt may be utilized to address short-term cash flow needs and/or to finance significant capital or other obligations. Debt will not be used to fund long-term reverishortages. City Council approval is required to approve the issuance of debt. Current Operations will not be financed with long term de event that the need for long term debt arises, the term of the long term debt will eed the of the projects financed. When evaluating the use of non -voted Council �,` obligations, an analysis shall be performed to payments, taking into account revenue fluctuatior Debt may be considered where the Director of Fina projected discretionary revenue to serva a debt delivery or programs. Voted and non -voted Councilmanic Debt impact on the City's creme p, ability Upon the issuance of assure compliance with and regulations;�g„ Debt and the asspciated debt service ine the City's ability ake debt service sociate 'th periodic gnomic cycles. nstrate that t is sufficient it h rupting the City's existing service wdently anner to avoid an adverse nol,"t , tot or a Tonal debt. will est-rsh the appropriate procedures to icable federal, state and local laws, policies In the e4;1517,7�itiat the use' ebtTb4 uired, f viiill raise capital at the lowest cost, consistent with the ne�l to borrow. r wilompli'she y keeping a high credit rating, and maintaining a good repgn in the crec��arkets anaging the annual budget responsibly. 0