HomeMy WebLinkAbout025280 RES - 04/29/2003RESOLUTION
REAFFIRMING AND AMENDING FINANCIAL POLICIES ADOPTED BY
RESOLUTION NO. 023319 AND PROVIDING A POLICY TO MAINTAIN
THE FUND BALANCE FOR 'tHE GENERAL FUND AT AN ADEQUATE
LEVEL
WHEREAS, the City of Corpus Christi has a commitment to citizens as expressed in its
Mission Statement:
"Our Mission is to provide the citizens of Corpus Christi, collectively,
excellent quality products and highly responsive services in the areas of:
Infrastructure Needs (including water, wastewater, gas distribution, solid
waste, aviation and streets); Protective Services (including law
enforcement, fire and health); Quality of Life Enrichment (including
housing and community development, libraries, cultural and leisure
activities); Economic Development (including support of existing economic
bases and encouragement of growth); and Development Services
(including engineering, planning and inspection...)"; and
WHEREAS, financial resources are budgeted to fulfill this commitment; and
WHEREAS, it is prudent to adopt financial policies and actions to rebuild General Fund
ending balances to acceptable levels and ensure that those levels are maintained in
future years;
WHEREAS, the City Council adopted a Financial Policy in January 1997 by Resolution
No. 022828, reaffirmed the Financial Policy in June 1997 by Resolution No. 022965,
modified the Financial Policy in July 1997 by Resolution No. 022992, adopted a new
Financial Policy in May 1998 by Resolution No. 023319; reaffirmed the Financial Policy
in May 1999 by Resolution No. 023657; reaffirmed the Financial Policy in May 2000 by
Resolution No. 024044; reaffirmed the Financial Policy in May 2001 by Resolution No.
024455; and reaffirmed the Financial Policy in May 2002 by Resolution No. 024863;
WHEREAS, this policy provides an essential guide to direct financial planning and to
maintain and strengthen the City's bond rating; and
WHEREAS, Resolution No. 023319 requires City Council to reaffirm the financial policy
annually in conjunction with preparation of the budget.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
CORPUS CHRISTI, TEXAS:
SECTION 1. Development/Effective Date of Financial Policy. This Financial Policy
reaffirms and amends the financial policies adopted by each year by the City Council
since 1997. This Financial Policy is made part of the City Comprehensive Policy
Manual. The City Manager is directed to prepare the FY2003-04 proposed budget in
Financial Policies.doc
accordance with this policy. The City Council is prepared to make expenditure
reductions that may be necessary to comply with this policy.
SECTION 2. Current Revenues Equal/Exceed Current Expenditures. Current
General Fund operating revenues will equal or exceed current budgeted expenditures.
SECTION 3. Fund Balance Reserve/Working Capital. To ensure that current and
future services or operations are not severely impacted by any economic slowdowns,
emergencies, natural disasters or other unforeseen circumstances, adequate financial
resources will be set aside in the General Fund unreserved fund balance. Accordingly it
is the goal of the City Council to build and maintain a reserve in the General Fund
unreserved fund balance which totals at least ten (10%) percent of total annual General
Fund appropriations, excluding anticipated reimbursements and inter-fund transfers,
within five years. The City Manager shall report on the progress toward achievement of
this ten (10%) percent goal at least annually as part of the budget process. Unique
situations may arise in which the timing of external actions out of the City's control may
require the use of the funds in the reserve. The City Manager shall note these
situations in the budget and in financial reports presented to the City Council on a
quarterly basis.
SECTION 4. Operating Contingencies. The City Manager is directed to budget at
least $200,000 per year as an operating contingency as part of General Fund
expenditures in order to further insulate the General Fund unreserved fund balance
from unforeseen circumstances. The City Manager is directed to budget similar
operating contingencies as expenditures in enterprise and special revenue funds of the
City.
SECTION 5. Multi-Year Financial Forecasting, The City will maintain a five~year
financial plan for the General Fund to anticipate potential budget imbalances and
unfavorable revenue or expenditure trends, thus allowing for the identification of
budgetary gaps long before they develop into fiscal crises. The City shall also maintain
business plans and/or rate models for enterprise operations.
SECTION 6. Revenue Enhancement. The City shall attempt to pursue and maintain a
diversified and stable revenue stream for the General Fund in order to shelter finances
from short term fluctuations in any one revenue source.
SECTION 7. Quarterly Financial Reporting and Monitoring. The City Manager shall
provide interim financial performance reports and updates to the City Council on a
quarterly basis. These interim reports must include detailed year to date revenue and
expenditure estimates, as well as explanations for major variances to budget. The
format of the quarterly report must be relatively consistent with the adopted budget.
SECTION 8. Use of Nonrecurring Revenue. The City shall endeavor to use
nonrecurring revenue to fund one-time expenditures. Nonrecurring revenue may
include items such as sale of fixed assets, court settlements, or revenue collection
windfalls.
Financial Policies.doc
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SECTION 9. Debt Affordability Reviews/Disclosure Practices. The City Manager
shall maintain strong debt management practices as evidenced by types and methods
of financing approved by the City Council. Debt affordability reviews will consider
overall exposure between invested assets and external debt issuance. Debt disclosure
will include measures beyond the standard audited financial statements and
publications. These measures must incorporate disclosure of material events impacting
the financial status of the City. Additional financial report disclosures will go beyond
GASB 34 requirements and may include supplementary information sections and data
on demographics and other key statistics.
SECTION 10. Debt Service Fund Balance. In order to provide additional financial
security, the General Obligation Debt Service Fund will maintain an acceptable level of
fund balance to cover a substantial portion of the subsequent year principal and interest
debt obligation.
SECTION 11. Debt Retirement Practices. The City shall not issue debt for a term
that exceeds the useful life of the asset or project being financed. In assessing the
desirability to refund existing debt, the City shall use a benchmark of at least three
percent (3 %) net present value savings. The City shall not refund debt for a period
beyond original maturity dates.
SECTION 12. Capital Improvement Plans/Funding. As part of the annual capital
budget process, the City shall update its short and long range capital improvement
plans. For the three-year short term plan, projects include any projected incremental
operating costs for programmed facilities. The long range plan extends for an additional
seven years, for a complete plan that includes ten years. Shod-term plan projects must
be fully funded, with corresponding resources identified. As part of a concerted effort to
reduce debt levels and improve financial flexibility, the City shall pursue pay-as-you-go
capital funding where possible.
ATTEST:
Armando Chapa
City Secretary
THE CITY OF CORPUS CHRISTI
APPROVED: 24th day of April, 2003.
Lisa Aguilar ~
Assistant City Attorney
for City Attorney
Financial Policies.doc
Brent Chesney
Javier D. Colmenero
Melody Cooper
Henry Garrett
Bill Kelly
Rex A. Kinnison
Jesse Noyola
Mark Scott
Corpus Christi, Texas
ay of ' ,20
The above resolution was passed by the following vote:
Samuel L. Neal, Jr.