HomeMy WebLinkAbout029128 RES - 07/12/2011RESOLUTION
AMENDING FINANCIAL POLICIES ADOPTED BY RESOLUTION
028609 AND PROVIDING FINANCIAL POLICY DIRECTION ON
PREPARATION OF THE FY 2011-12 BUDGET.
WHEREAS, the City of Corpus Christi has a commitment to citizens as expressed in its
Mission Statement: "Provide exceptional service to enhance the quality of life"; and
WHEREAS, financial resources are budgeted to fulfill this commitment; and
WHEREAS, it has been the City's goal to rebuild the General Fund balance to
acceptable levels, a goal which was expressly stated in past policies with targets for
accomplishing that goal; and
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; reaffirmed the Financial Policy in May 2002 by Resolution No. 024863;
reaffirmed the Financial Policy in April 2003 by Resolution No. 025280; reaffirmed the
Financial Policy in April 2004 by Resolution No. 025737; and reaffirmed the Financial
Policy in May 2005 by Resolution 026265; and reaffirmed the Financial Policy in
January 2006 by Resolution 026605; amended the Financial Policy in April 2008 by
Resolution 027683; amended the Financial Policy in May 2009 by Resolution 028176;
and amended the policy in May 2010 by Resolution 028609;
WHEREAS, as a result of those policies, the City has achieved its goal for the General
Fund balance and desires now to articulate a strategy to maintain that balance and to
utilize any surplus balance to provide for enhanced financial stability in future years; and
WHEREAS, this policy provides an essential guide to direct financial planning and to
maintain and strengthen the City's bond rating; and
WHEREAS, it has been the City's practice to reaffirm its financial policy or to adopt new
or modified 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:
The Financial Polices adopted by Resolution 028609 are amended to read as follows:
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 FY 2011-12 proposed budget in
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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. Committed 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 committed
unreserved fund balance. Accordingly it_ --+s the goal of the City Council to build and
maintain a reserve in the General Fund committed unreserved fund balance which
totals at least ten (10%) percent of total annual General Fund appropriations. At the
end of each fiscal year, upon completion of the Comprehensive Annual Financial
Report, the amount calculated to be 10% of total annual General Fund appropriations
will be designated as ReseryeCommitted for Major Contingencies, and set up in a
separate account. The remaining balance in the unreserved fund balance will be
considered excess, and available for use in accordance with this section. The City
Manager shall report on the status of compliance with this ten (10%) percent policy at
least annually as part of the budget process. Uncommitted Uridecignated fund balance
in excess of the ten percent policy requirement may be recommended for expenditure
on one-time improvements, deferred maintenance, lifecycle replacement, and/or capital
items with a priority on infrastructure and equipment which will reduce the need for
future debt or avoid future maintenance costs. Such expenditures shall be subject to
the normal appropriations and expenditure approval process applicable to all other
funds. Finally, it is noted that extraordinary situations may arise in which the timing of
external actions out of the City's control may require the use of the committed funds, its
the reserve. The City Manager shall note these situations to the City Council as soon
as the information is known.
Amounts that can be used for specific purposes pursuant to constraints imposed by formal
action of the City Council will be reported as committed fund balance. Those committed
amounts cannot be used for any other purpose unless the City Council removes or changes
the specified use by taking the same type of action it employed to previously commit those
amounts. Committed fund balance will also incorporate contractual obligations to the extent
that existing resources in the fund have been specifically committed for use in satisfying
those contractual requirements.
Section 4. Property Tax Rate for Operations and Maintenance. The Proposed
Budget for FY 2011-2012 shall be prepared assuming that the City will be adopting a
tax rate necessary to be in compliance with Section 2 above. Full consideration will be
given to achieving the "effective tax rate" for maintenance and operations.
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Section 5. Priority of City Services. The City Council recognizes the need to
provide public services which support the continued growth of the local economy and
personal income growth to insure an adequate financial base for the future.
Section 6. 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, internal service and special revenue funds of the City.
Section 7. 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. Whereas many of the City's
fiscal goals require commitment and discipline beyond the one year considered within
the City's fiscal year, the City will also consider adoption of action plans necessary for
the accomplishment of City short term or long term goals. These action plans will be
presented and recommended to the City Council in the proposed annual operating
budget and shall be used for development of future budget recommendations as
necessary to accomplish these goals. The City shall also maintain business plans
and/or rate models for enterprise operations.
Section 8. Multi-year Budget Model. Preparation of annual budget will include model
for years two and three, with specific revenue and expenditure assumptions.
"Section 8Section 9. 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. In order to
meet the requirements outlined in Sections 2 and 4, every effort will be made to base
rates on a cost of service model so costs incurred for certain services are paid by the
population benefiting from such services.
respective utility, calcul: _ _ _ . - .. rent year estimatc and the -previous -two -years'
us -two -years'
ael:ual---revenues---taken-- the City--Gsr eher s ve—u l--mFinanciat--Report
Section 10. 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.
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Section 11. 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.
Section 12. Debt Management. The City Manager shall adhere to the Debt
Management Policy adopted by Resolution 028902 adopted by the City Council on
December 14, 2010.
Section 13. Capital Improvement Plans/Funding, The annual Capital Improvement
Plan shall follow the same cycle as the Operating Budget. 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. Short-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.
Section 14. Expenditures. Within the limitation of public service needs, statutory
requirements and contractual commitments expenditures included in the operating
budget shall represent the most cost efficient method to deliver services to the citizens
of Corpus Christi. Efforts to identify the most cost efficient method of service delivery
shall continue during the fiscal year after the operating budget is adopted and may be
implemented during the fiscal year as necessary and of benefit to the public."
Section 15. Zero Based Budgeting process. To prepare the General Fund operating
budget, the City shall utilize the Zero Based Budgeting process. The staff shall be
accountable for utilizing the Zero Based Budgeting process comprehensively for all
General Fund department budgets. Consideration may be given to expanding the Zero
Based Budgeting process to Non -General Fund Departments if deemed appropriate by
the City Manager.
ATTEST:
70)111,461
Armando Chapa
City Secretary
APPROVED: June 30, 2011
Lisa Aguilar
Assistant City Altttirney
for City Attorney
THE CITY OF CORPUS CHRISTI
Corpus Christi, Texas
of
,2011
The above resolution was passed by the following vote:
Joe Adame
Chris N. Adler
Larry Elizondo, Sr.
Kevin Kieschnick
Priscilla G. Leal
David Loeb
John E. Marez
Nelda Martinez
Mark Scott
wAff
ikbyAot,/-
9291.28