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HomeMy WebLinkAboutAppendix E - Fiscal PoliciesWorking together to serve, build community and enhance quality of life. Appendix E Fiscal Policies Fiscal Policies Operational Efficiencies  Implement and practice ongoing operational efficiencies to the extent reasonable;  Seek and consider opportunities to reduce future operating and maintenance costs, including energy costs and vehicle maintenance, even when some additional up-front investment may be required;  Enter into joint operating arrangements with other organizations so as to provide services more cost effectively;  Continue the use of valuable volunteers. Staffing  Continue to have the Executive Team evaluate key personnel needs of the City. A supplemental request is submitted by each Executive Team member for staffing needs within the department, and these are evaluated, discussed and prioritized. Tough decisions are made as part of the budget process based on Council priorities, safety concerns, and work volume changes;  Utilize private contractors when the same or higher level of service can be obtained at lower total cost;  Utilize consultants and temporary help instead of hiring staff for special projects or peak workload periods.  Attract and retain competent employees by providing a professional work environment, competitive salaries, safe working conditions, and adequate training opportunities;  Base salary increases on individual merit and job performance levels;  Strive toward maintaining competitive compensation packages in order to recruit and maintain the best and the brightest;  Work toward adequate staffing for the service levels being provided;  Be aware of and plan for state, federal and OSHA mandates which might have an effect on staffing levels;  Be aware of, monitor and avoid the “hidden” costs of employee turnover, burnout, and stress due to overwork;  Look for staff-level streamline opportunities and reductions in areas where there will be minimal impacts to citizens, thus “freeing” employee time. Education and Communication  Dissemination of important financial information to staff through City Manager roundtables, meetings, emails, and other means of communication;  Dissemination of user-friendly annual reports on sales tax measures to residents and local business owners;  Encourage employee ideas for efficiency, reduction in costs, or increases in revenues;  Provide Council and public with information regarding the City’s financial outlook through both the audit and budget process, and continue to update with any changes that occur. Economic Development  Provide a climate that encourages healthy commercial areas that capture more of the purchasing power of the community and creates more destination commercial activities to capture regional money;  Aggressively pursue new developments and businesses which are consistent with the community’s quality of life and add to the City’s economic base, particularly those that generate sales tax revenue or provide head of household jobs;  Promote a mix of businesses that contributes to a balanced community;  Continue to improve programs to enhance and retain existing businesses;  Continue the promotion and tourism programs as a key component of the economic development strategy. Community Development  Ensure that adequate funding is in place to provide essential services to new residents without diluting services for existing residents by: o Supporting the Community Facilities District to fund the addition of essential police, fire and parks personnel needed to provide services to these new households; o Continue, to the fullest extent possible, annexing projects into the Community Facilities District by requiring all residential projects consisting of five or more residential units to annex into the Community Facilities District, as allowed by State law; o Discontinue the use of Assessment Districts in lieu of Homeowner’s Associations or other similar mechanisms required of new development to provide ongoing revenue source for the maintenance of development-related infrastructure. These Homeowner’s Associations or other mechanisms would be privately managed to avoid City staff time otherwise required by Assessment Districts.  Require that new developments contribute toward the expansion of facilities and infrastructure necessary to serve the expanding population;  Plan community growth with service and maintenance funding requirements in mind. Infrastructure  Fully fund technology replacement funds;  Work toward fully funding vehicles, equipment, buildings, and other infrastructure;  Continue to determine and implement strategies to reduce the current backlog of deferred maintenance projects;  Provide vitally important maintenance each year to avoid increasing the deferred maintenance backlog;  Determine a maintenance plan and funding strategy prior to the construction, improvement or acceptance of new infrastructure. New Services  New or expanded programs should only be added when a new funding source has been developed or when an equal or greater cost program has been eliminated;  Require agreements for specific services and monitor effectiveness on an ongoing basis. Construction of New Facilities  Plan for new facilities only if construction and maintenance costs will not negatively impact the operating budget.  Plan efficient replacement of facilities when replacement is needed an achievable. Cash Investment  Follow adopted Investment Policy guidelines for the prudent investment of City funds not required for the immediate needs of the City;  Maximize the efficiency of the City’s cash management system;  Enhance the economic status of the City while protecting its pooled cash. Fiscal Management  Maintain appropriate reserve levels;  Consider the long-term and the short-term when making financial decisions;  Continuously monitor operations and make adjustments as necessary;  Take full advantage of opportunities to receive reimbursement funding at maximum rates possible;  Generate additional revenue by marketing City services to other agencies on a contract basis;  Maximize revenues by utilizing grants from other agencies to the fullest extent possible;  Charge fees for services that reflect the true cost of providing such services and review fee schedules on a regular basis;  Fully account for the cost of enterprise operations to avoid any subsidy by the General Fund and to charge all enterprise funds their fair share of the cost of City support services;  Maintain accurate accounting records to keep the City Manager, City Council and public informed of the financial condition of the City;  Think outside of the box to achieve revenue opportunities that wouldn’t otherwise exist;  Consider partnerships and taxing opportunities when appropriate. Reserves Management  Maintain fiscal stability, sustainability, and adequate reserve funds in order to keep General Fund expenditures stable, and be prepared for natural or fiscal emergencies, while avoiding excessive reserves that could instead provide services to the community;  Continue to build reserves in periods of financial growth and to judiciously use those reservices in periods of economic downturn;  As part of the biennial budget process, eleven key measurements of reserves should be analyzed to determine the prudent level of General Funds reserves for that two- year budget cycle: 1. State of the economy 2. The level of diversity in General Fund revenues 3. The stability of the revenue base 4. Potential actions of State and Federal agencies 5. Cash flow needs 6. Costs of potential natural disasters and emergencies 7. Asset replacement requirements 8. The consistency desired in service levels 9. Available opportunities 10. Needs of future commitments 11. Interest income earned on reserves  There is no upper limit on the amount of the General Fund Reserve;  Except in the case of natural or fiscal emergencies, the City’s General Fund Reserve shall not fall below 20% of budgeted General Fund expenditures;  In the event of natural or fiscal emergencies, the General Fund Reserve level may fall below 20%; however, within 6 months of the declared emergency, the City Council shall adopt a long-term financial plan to bring the General Fund Reserves up to 20%. Debt Policy  Long-term debt may be issued to finance the construction, acquisition, and rehabilitation of capital improvements and facilities, equipment and land to be owned and operated by the City, as well as management of other long-term obligation such as pension and OPEB obligations. Long-term debt financings are appropriate when the following conditions exist: o When the project to be financed is necessary to provide basic services; o When the project to be financed will provide benefit to constituents over multiple years; o When total debt does not constitute an unreasonable burden to the City and its taxpayers and/or ratepayers, as applicable; o When the debt is used to refinance outstanding debt in order to produce debt service savings or to realize the benefits of a debt restructuring.  Short-term debt may be issued to provide financing for the City’s operational cash flows in order to maintain a steady and even cash flow balance. Short-term debt may also be used to finance short-lived capital projects; for example, the City may undertake lease-purchase financing for equipment.  The following types of debt are allowable under this Debt Policy: o Loan agreements and revenue bonds; o Lease revenue bonds, certificates of participation (COPs) and lease- purchase transactions; o Pension obligation bonds; o General obligation bonds (GO Bonds); o Bond or grant anticipation notes (BANs); o Tax and revenue anticipation notes (TRANs); o Land-secured financings, such as special tax revenue bonds issued under the Mello-Roos Community Facilities Act of 1982, as amended, and limited obligation bonds issued under applicable assessment statutes; o Tax increment bonds, including refunding bonds issued by the Successor Agency; State Revolving Loan Funds; and lines of credit / interim borrowings.  The City Council may from time to time find that other forms of debt would be beneficial to further its public purposes and may approve such debt without an amendment of the Debt Policy. Debt shall be issued as fixed rate debt unless the City makes a specific determination as to why a variable rate issue would be beneficial to the City in a specific circumstance. Conclusion The policies and practices listed in this section have been practical guides toward a consistently healthy fiscal condition. The importance of these and a well-defined financial strategy to anticipate and conquer difficult issues cannot be understated. The responsibility to maintain a strong organization is shared community wide, but as the City Council and City employees, we agree to be the leaders in this effort. Council has shown integrity in the decisions made to maintain the conservative fiscal strategy. When resources are tight and needs are plenty, it is difficult to commit to saving some of those precious resources for the future. Clearly, the City’s Fiscal Strategy has been successful. The impacts of the fluctuations in the economy, while never easy, have been smoothed with the use of the Fiscal Strategy. We are seeing in re-shaping of our community through Council’s priorities, investment of the community, and hard work of the staff. However, resources will always be more limited that the community’s desire for new services and programs. Decisions will continue to be difficult, especially as public pressure continues to build to increase one-time and on-going spending. The fiscal strategy has provided the option to keep operations and service level stable and continues to provide the City with a sustainable future.