HomeMy WebLinkAbout2010-0104 Study Session MINMINUTES FOR CITY COUNCIL STUDY SESSION
Monday, January 4, 2010
Siskiyou Room, 51 Winburn Way
Mayor Stromberg called the meeting to order at 5:30 p.m.
Councilor Navickas, Chapman, Silbiger, Voisin, Jackson and Lemhouse were present.
1. Look Ahead Review
City Administrator Martha Bennett reviewed the items on the Council Look Ahead.
CITY COUNCIL STUDY SESSION
January 4, 2010
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2. What changes should be considered for the Financial Policies used by the City?
Financial Director Lee Tuneberg provided the staff report and a presentation on City Financial
Management policies and covered the following:
Goals
Financial Management Policies and Accounting Methods
Things that changed over time but were not updated: General Fund Restrictions (Parking,
Forfeiture and Housing reserves), AFN Ending Fund Balance, AFN Insurance Contingencies,
Location of programs (Facilities, Airport CIP, AFN debt, Claims management) and an added
Reserve Fund
Mr. Tuneberg explained not every fund required an Ending Fund Balance and provided examples. The
percent of contingencies used yearly depended on the fund and requirement. He described what constituted
a supplemental budget and how transfers from contingencies created a categorized appropriation that was
previously uncategorized.
Potential Discussion Groups
Council and Staff discussed the Capital Improvement Plan (CIP) process, the Budget Committee's role
with CIP and having staff prioritize the CIP list for Council's initial review. Staff explained it would be
two years before a comprehensive prioritized list would be available. The current CIP list showed a one
year project plan and a 6 -year wish list. Developing the Master Plan would introduce phasing, lifecycles,
maintaining the system in the most cost effective way and help determine priorities.
Scope
Financial Policy objectives
Investments
TOT Resolution, Projections Granting Process for 2011
Staff and Council addressed the Budget Committee's role in relation to the grant process and the need for
Council to provide better direction to the Budget Committee regarding grants.
Operating Budgetary Policy #1 of 6: The Budget Committee will be appointed in conformance
with state statutes. The budget committee's chief purpose is to review the City Administrator's
proposed budget and approve a budget and maximum tax levy for City Council consideration. The
Budget Committee may consider and develop recommendations on other financial issues as
delegated by the City Council.
Council agreed with the recommendation to revise the policy, clearly define roles, responsibilities and
develop specific criteria that determines whether a budget is responsible.
CITY COUNCIL STUDY SESSION
January 4, 2010
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Operating Budgetary Policy #2 of 6: The City will finance all current expenditures with current
revenues. The City will avoid budgetary practices that balance current expenditures through the
obligation of future resources.
Staff clarified guidelines regarding borrowing and proposed a revision to include "current operating
expenditures."
Operating Budgetary Policy #3 of 6: Policies addressing Fiscal Responsibility.
Operating Budgetary Policy #4 of 6: Multi -year projections in the annual budget and managing
each fund as an independent entity in accordance with applicable statutes and with generally
accepted accounting principles.
Operating Budgetary Policy #5 of 6: The City will allocate direct and administrative costs to
each fund based upon the cost of providing these services. The City will recalculate the cost of
administrative services each year to I identify the impact of inflation and cost increases. Annual
recalculation of these inteinal service charges may not be possible but should be reviewed annually
and recalculated at least every three years.
Operating Budgetary Policy #6 of 6: The City documentation annually to obtain the Award for
Distinguished Budget Presentation from the Government Finance Officers Association.
Ending Fund Balance (EFB) Policies
Chart of EFB Longer -Term History (excludes APRC) Chart
Staff explained there are several budget documents used to recreate budget history. The EFB Longer -Term
History Chart indicated financial activities that had occurred and were mostly capital improvements.
Mr. Tuneberg distributed additional presentations on the General Fund EFB and the Water Fund
Contingency. He explained contingencies are related to activities and programs that need to be expenditure
related. Traditionally departments used 95 -97% of their budgets and the remainder acted as a contingency
for unexpected events. With current budget cuts and decreases, departments are now using 98 -99% of their
budgets reducing the cushion used for soft contingencies. Increasing contingencies would cover
unexpected events and avoid Oregon Budget violations.
Council agreed to consider updating the policies discussed at this Study Session prior to the start of the
budget process and directed staff to add the AFN Ending Fund Balance as a topic for a future agenda.
Meeting adjourned at 7:11 p.m.
Respectfully submitted,
Dana Smith
Assistant to the City Recorder