City Council Agenda and Packet 2015 09 21 BUDGET

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SUBJECT: DATE: FINANCIAL POLICIES SEPTEMBER 21, 2015 PAGE 2 OF 3 The process for developing these polices included a review of Government Finance Officers Association's (GFOA's) Best Practices and other GFOA literature on each subject matter. It also included a review of GFOA's sample policies in each area, which included reviews of actual policies from various counties and municipalities throughout the country. Staff has attempted to include all the policy elements deemed "recommended best practices" in the proposed policies. Some of these elements are more technical and procedural in nature and may not be of interest to the City Council. Below is a summary of some policy elements that staff thought might be of particular interest to the City Council. Introduction • Contains a list of definitions related to all policy sections. General Policies • Proposes a new set of financial indicators to be calculated and disclosed in the City's budget documents. Reserve Policies • Proposes both minimum and targeted reserve levels for the General Fund, Open Space & Parks Fund, Cemetery Fund (which receives an ongoing subsidy transfer from the General Fund), and the three Enterprise Funds that comprise the Combined Utility Fund. Debt Policies • Discusses factors which may favor "pay -as- you -go" financing and factors that may favor "pay -as- you -use" financing. • Discusses and recommends general debt financing structures and methods of sale. • Does not apply to debt issued by the Urban Revitalization District. Revenue Policies • States that the City will value diversification, stabilization, and equity within its revenue structure. • Formalizes the desire to fund all recurring expenditures with recurring revenue and that non - recurring revenue should be used to fund only non - recurring, one- time expenditures. • Specifically states that the City will set fees for recreational services at a level to support seventy -five percent (75 %) of the direct and indirect costs of children's programs and that non - resident recreation participants pay the regular program fees plus an additional fee of 25% or $5.00, whichever is higher. The Finance CITY COUNCIL COMMUNICATION 5