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HomeMy WebLinkAbout05844RESOLUTION NO. 5844 A RESOLUTION APPROVING AND ADOPTING FINANCIAL POLICIES FOR THE CITY OF PUEBLO BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, COLORADO, that: SECTION 1. The Financial Policies for the City of Pueblo consisting of four parts, Purpose, Operating Budget Policies, Capital Improve- ment Budget Policies and Revenue Policies, copies of which are attached hereto and incorporated herein as if set out herein in full, are hereby approved and adopted. INTRODUCED: June 23, 1986 ATTEST: I CiLy Clerk By PAUL JONES Councilman APP R0 D: PrZraident of the City Council I P � =L COUNCIL POLICY PAPER FINANCIAL POLICIES PURPOSE The purpose for establishing financial policies is to allow the City Council to approach the Budget and financial policy management from an overall, long -range vantage point. Many of these policies already exist informally or are written policies contained in the Budget, Capital Improvement Plan or in the Charter, Council resolutions or other City documents. By having financial policies spread over so many documents, it can lead to conflicting policies, inconsistent policies and a lack of adequate administrative follow -up on Council directions. Other benefits to establishing financial policies are outlined below: 1. Having publicly adopted policy statements contributes greatly to the credibility of and public confidence in the governmental organization. To the credit rating industry and prospective investors, such state- ments show a city's commitment to sound financial management and fiscal integrity. 2. Having an established policy can save time and energy for both the manager and council. Once certain decisions are made at the policy level, the issues do not need to be discussed each time a decision has to be made. 3. The process of developing overall policy directs the attention of management and council members to the city's total financial condition rather than single issue areas. Moreover, this process requires management and council to think about linking long -run financial planning with day -to -day operations. 4. Discussing the financial issues and adopting a formal position will help in preparing for a financial emergency and thereby avoid relying on short -run solutions that may be creating worse problems in the long run. 5. Setting policy can improve the city's fiscal stability. It can help city officials look down the road, set tax rates and plan expenditures for a two to three -year period and create a consistent planning approach. 6. Finally, having explicit policies contributes to a continuity in handling the city's financial affairs. The manager and membership of the council may change over time, but policies can still guide whomever holds these positions. These financial policies can be expanded or modified on a regular basis or by the adoption of the Budget if financial conditions change or as priorities change. The Council will review these policies annually prior to staff pre- paring the Annual Budget Plan for consistency of the guidelines with the City's financial condition. -2- OPERATING BUDGET POLICIES 1. The City will cover all current expenditures with new revenues generated during the budget year. The City will avoid budgetary procedures that balance current expenditures at the expense of future years expenses such as pension benefits or postponing debt or reserve financial policy statements. 2. The City will maintain a minimum General Fund balance of $2,000,000 for the purpose of unplanned contingency or emergency one -time expenses that could not be budgeted for annually. All requests to utilize the fund balance must be presented to the City Council for appropriation prior to the expenditure of funds. 3. The City will continue to maintain a Budgetary Control System to help it adhere to the Budget. 4. The City Administration will prepare quarterly reports assessing the City's financial position and compare budgeted revenues and expen- ditures to actual figures. 5. The City will appropriate 1.55% of the current expenditures General Fund Budget (excludes CDBG, HUTF and dedicated revenues) for Health and Human Service programs. 6. Where possible, the City will integrate performance measurement and productivity indicators as part of the Annual Budget. 7. The City will annually appropriate 0.5% of the Budget for the purpose of replacing heavy equipment for the Budget Years 1987 through 1990. 8. The City will establish a vehicle replacement account within the Shops Division of the Public Works Department in Budget Year 1987 to expend annually. 9. The City Council will not consider any outside organization's proposal for funding which is not part of the regular budget preparation cycle unless: a. There is an emergency situation that justifies the expenditure of public funds, or b. The funds are to be used to match a Federal Grant and the project would be to the benefit of the public health, safety or general welfare. -3- CAPITAL IMPROVEMENT BUDGET POLICIES 1. The City will make all capital improvements in accordance with Section 7 -16 of the Charter and adopted Capital Budget. 2. The City will develop a Six -Year Improvement Plan for capital improve- ments and will update the CIP annually to be adopted by the Council annually. 3. The City will coordinate development of the Capital Improvement Budget with the development of the Operating Budget. Future operating costs associated with new capital improvements will be projected and included in Operating Budget forecasts. 4. 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. 5. The City will budget a minimum of $631,000 from the General Fund annually into the Capital Improvement Fund (generally a 2.25 mill levy), plus 35% of Lottery Funds for capital improvement projects in 1987 and 40% in 1988. -4- REVENUE POLICIES 1. The City will try to maintain a diversified and stable revenue system to shelter it from short -run fluctuations in any one revenue source. 2. Each program area will evaluate the User Fee Plan annually based upon the type of service provided: a. The Recreation Department will develop the Recreation Services User Fee System based upon a 75% subsidy for youth programs and 50% for adult programs. b. The Planning and Development Department will establish Planning and Zoning Fees based upon the cost of providing the service. c. All City licenses and individual provision of services issuance fees will be covered 100% by the fees charged for such services. d. The Sewer User Charges shall cover the full cost of direct and indirect operational and maintenance costs plus capital cost, plus the cost of debt service. e. The Airport Combined Service Fee will increase to cover 20% of the cost of services in 1987 (a rate of $525 /acre per year) and then increase at a rate of at least 10% for the years 1988 to 1993 depending on the cost of providing the City services at the Airport Industrial Park. 3. 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. 4. The City will utilize General Revenue Sharing Funds for Health and Human Services and for necessary capital items needed for the effective and efficient operation of the City.