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HomeMy WebLinkAbout80861 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 m RESOLUTION NO. 8,086 A RESOLUTION APPROVING FISCAL POLICIES FOR THE CITY OF LITTLE ROCK, ARKANSAS. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF LITTLE ROCK, ARKANSAS: SECTION 1. The Board of Directors of the City of Little Rock hereby approves the attached fiscal policies for the City of Little Rock which establishes specific financial management guidelines. ADOPTED: January 3, 1989 ATTEST: CITY C6RK JANE ZEC' H APPROVED 8 TO ORM: 'W MARK STODOLA, CITY ATTORNEY APPROVED: j V MAYOR E OYD G. VILLINES, III 13 c•� ob GENERAL FISCAL POLICIES In order to protect its fiscal well being on both a short and long term basis, the City will continually analyze the City's financial condition and act before a financial crisis arises. Operating needs and funding sources will be considered and planned on a five -year basis with annual updates. Capital needs will be identified for a multi -year period and methods of financing will be developed. Major factors affecting the City's finances will be monitored on a continuing basis. These encompass the following: o The City's economic activity level. Is it healthy and growing? o Are significant revenue sources stable; will they grow and keep pace with inflation and budgetary requirements? o Are new sources of revenue available? If not, what must the City do to provide additional income? o Will the City grow through annexations and, if so, will the added tax base offset the impact of new service delivery costs? o How will the City fund rising costs, employee benefits, and increases in citizen demands? o Are fund reserves sufficient to meet unforseen emergencies? o Is the City's infrastructure being maintained at a reasonable level of repair? o Will the City continue to be in a position to issue bonds to fund major improvements as needed? 1 14 ACCOUNTING POLICIES.AND - BASIS -OF ACCOUNTING - 1 Little Rock's accounting and reporting policies conform to generally accepted principles for state and local government as defined by the Governmental Accounting Standards Board. Revenues and expenditures of government funds are recognized on a modified accrual basis. Revenues are recognized in the accounting period in which they become both available and measurable. Accrued revenue includes property taxes, state tax turnback, utility franchises, federal revenue, and investment income. Expenditures are recognized in the accounting period in which current liability is incurred. Non - current liabilities are recorded in the long -term debt account group. 2 AUDIT POLICIES All funds controlled by the governing body will be audited annually by a nationally recognized firm of certified public accountants. The annual audit will be made available to the general public, bond and financial firms, consultants and other interested citizens and organizations. The audit will be completed and submitted to the Board of Directors within 120 days of the close of the fiscal year. The City Manager and his financial staff will be responsible for maintaining an internal audit program. This program will encompass audits not performed by the independent auditor and will cover cash transactions, revenue collections, budget expenditures, or any City activity where taxpayers' money is involved. Formalized audit reports will be prepared by the staff and submitted to the City Manager on a regular basis. Findings of the internal auditor will be dealt with in the same manner as those reported by the independent auditor. Internal audit transactions will be prioritized with a goal of performing those that will result in the greatest savings to the City or address areas of greatest risk of asset loss. The program will be expanded as the budget grows and resources permit. 3 16 li BUDGET POLICIES AND GOALS By ordinance, the City Manager will prepare and submit to the Board of Directors an annual budget which recommends programs of service. The City Board of Directors will adopt a balanced budget in which expenditures will not be allowed to exceed reasonably estimated resources and revenues. The City will pay for all current operation and maintenance expenses from current revenue sources and balances available from prior periods. The impact of additional operating budget costs resulting from new capital expenditures will be considered prior to the capital outlay. Subsequent operating budgets will be balanced with these new costs included. The operating budget will provide for the adequate maintenance and replacement of fixed assets and equipment. The City will prepare and maintain a system of regular fiscal reports comparing actual revenues and expenditures to budgeted amounts. These will be available to the Board of Directors and general public. The City will maintain a budgetary control system to help it adhere to the adopted budget. This includes a centralized purchasing effort and a record keeping system to be followed by all agencies, departments, and programs receiving annual Board appropriations. The budget will provide for funding of all retirement systems to the extent of the City's legal obligation to participate in such fundings. 9 The City will maintain its risk management program to minimize losses and reduce costs. This will include performing employee safety training programs as well as providing insurance coverage where appropriate. The City will encourage delivery of services by other public and private organizations whenever and wherever greater efficiency and effectiveness can be expected. Management will develop and internally use technology and productivity advancements that will help reduce or avoid increasing personnel costs. The intent is to control personnel costs as a proportion of the total budget; to more productively and creatively use available resources; and to avoid duplication of effort. o New services will be considered in light of: (a) Additional revenue or identification of offsetting reduction in expenditures; (b) New services falling within the broad framework of existing City services; (c) Mandates by State or Federal law. In some cases, the City will seek legislative support to pay local costs of mandated Federal and State service programs. o The City will continue its efforts to develop measurable performance goals for each program and activity. 5 16- IMPROVEMENT BUDGET POLICIES AND GOALS 19 The need for long -term capital improvements will be considered on a city -wide basis. Major project priorities will be established by the Board of Directors after input from citizens and City staff; The City will fund capital improvements first to the extent possible on a pay -as- you -go basis using year -end operating and other fund balances; then by borrowing. The City will update its multi -year plan for capital improvements annually. The City will consider an annual Capital Budget based on the multi -year capital improvement plan. Future capital expenditures necessitated by changes in population, changes in real estate development, or changes in economic base will be calculated and included in Capital Budget projections. The City will coordinate development of the Capital Improvement Budget with development of the operating budget. Future operating costs associated with new capital improvements will be projected and included in operating budget forecasts. The City will maintain all its assets at a level adequate to protect the City's capital investment and to minimize future maintenance and replacement costs. The City will project its equipment replacement and maintenance needs for the next several years and will update this projection each year. From this projection a maintenance and replacement schedule will be developed and followed to the extent practical in the Fleet Internal Service Fund. Cl - ..... �.. ice.. � �...�.... �... 20 -. The City staff will identify -the estimated -costs and - i potential funding sources for each capital project proposal before it is submitted to the Board for approval. The City will determine the least costly financing method for all new projects. 7 _ 2�1 DEBT POLICIES The City will limit long -term borrowing to capital improvements or projects that cannot be financed from current revenues. When the City finances capital projects by issuing bonds, it will pay back the bonds within a period not to exceed the expected useful life of the project. The City will attempt to keep the average maturity of General Obligation Bonds at or below 15 years. Total general obligation debt will never exceed 10 percent of the assessed valuation of taxable property. Where possible, the City will use special assessment revenue, or other self - supporting bonds instead of general obligation bonds. The City will not incur short or long term debt to support current operations. The City will maintain good communications with financial institutions and bond rating agencies about its financial condition. The City will follow a policy of full disclosure on every financial report and bond prospectus and continually strive to obtain ratings higher than AA from Standard & Poor's and A -1 from Moody's. It will be a general policy of the City to sell bonds by competitive bidding. Exceptions to this policy may be made when the City finds unusual circumstances surrounding a proposed issue. In that event, a report is to be made to the Board of Directors before action is taken to market the bonds. LN - FINANCIAL REPORTING POLICIES 22 Little Rock will always maintain a policy of full and open disclosure of all financial activity. Decisions to appropriate and spend tax money will be made at public meetings where citizens are invited to participate. The annual budget is being prepared in a manner that is understandable and contains thorough information about City operation. Copies of the budget, monthly budget reports, interim and annual financial reports, and all other financial documents are available to interested parties. 9 23 RESERVE POLICIES The City will maintain its current General and Street Fund emergency reserve to: A. Provide funding of unforseen emergency and non- recurring needs. B. If needed, provide the required cash flow to meet operating expenses. C. Provide for budget adjustments of revenue or expenditures on a temporary basis. As the City's budget increases, the reserve will be increased to ensure that the balance never drops below 5% of the current operating budget total. 10 REVENUE POLICIES The City will strive to maintain its diversified revenue base thereby providing stable sources of operating budget income. The City will estimate its annual revenues by a realistic, objective, and analytical process. This will include considering local and national economic levels, the CPI, population, the building industry, changes in tax laws, past collections, and other related factors. The City will follow an aggressive policy of collecting all taxes, fines, service fees, etc. The annual level of uncollected taxes and fees will generally not exceed one -half percent. The City will generally establish user charges and fees at a level related to the cost of providing the services for all programs with the exception of the garbage fees and certain recreational programs. Each year, the City will recalculate the full costs of activities supported by user fees to identify the impact of inflation and other cost increases. The City staff will automatically recommend revised user fees with review by the Board on an annual basis, to adjust for the effects of inflation on the City's cost of providing services. The City will set fees and user charges for the Fleet Internal Service Fund at a level that fully supports the total direct and indirect cost of the activity. Indirect costs include the cost of replacing capital assets. 11