FINANCIAL POLICY REVENUES 1.
Development of Revenue Projection. Revenues are budgeted conservatively using an objective approach to analyze historical data and inherent trends. Adjustments are made to account for known events and projected economic activity within the city and surrounding areas
Additionally, a five year projection of revenues will be performed as part of the debt capacity analysis. This analysis is updated at least annually. It is utilized to plan the timing and amount of future bond issues so as to have the least possible impact on the overall tax rate.
2.
User Charges and Fees. General Fund. As part of the budget process, user charges and fees will be examined and compared to the cost of providing the services to facilitate City Council’s policy decision regarding the level of support to be provided. For services that provide significant indirect benefits to the community, the City will not budget to recover the full cost of those services with user fees; but will subsidize the cost of providing the services using other general revenues. Factors in setting of fees shall include but not be limited to: market and competitive pricing, effect on demand for services, and impact on users. Enterprise Funds. Utility rates and other fund user fees shall be set at levels sufficient to cover (direct and indirect) operating costs, meet debt obligations and debt service coverage, provide pay-as-you-go funding for utility (capital) projects, and provide adequate levels of working capital.
Additionally, for each of the operations accounted for by this fund a detail proforma will be presented projecting revenues and expenditures for three years.
3.
Non-recurring Revenues. Non-recurring revenues sources, such as a one-time revenue remittance, can only be budgeted/used to fund non-recurring expenditures, such as capital equipment purchases and small capital projects.
EXPENDITURES 1.
Budgeted expenditures in the General Operating Fund and Utility Operating Fund will not exceed projected revenues.
2.
Core services will be budgeted in order that outstanding quality services will be provided. Generally, only when known increases in revenues are going to take place or are planned (such as increased fees or industrial district revenue) will new or expanded services be considered.
3.
The capitalization threshold for fixed assets is $5,000. Minor purchases with a unit cost under $5,000 are included in the operating budget of the department making the request. The capitalization threshold of $5,000 will be applied to individual items, rather than to a group of similar items.
4.
Capital equipment purchases exceeding $5,000 are budgeted in the Equipment Replacement Fund. Other projects (drainage, street, facility, water, and wastewater) are budgeted in the General Projects Fund and the Utility Projects Fund, if funds are available. Larger projects, typically those over $500,000, are funded by issuing some form of debt (i.e. bonds), and are budgeted in multi-year bond construction funds.
FY 2021-2022 Adopted Budget - 32
