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SUBJECT: RECOMMENDATIONS FOR AMENDMENTS TO FINANCIAL POLICIES <br />DATE: OCTOBER 4, 2018 <br />PAGE 3 OF 6 <br />• Allows setting fees for children's recreational programs and senior services at <br />levels below the full cost of providing those services. <br />• Allows setting fees for non-residents at a higher level than those for residents. <br />Operating Budget Policies <br />• Defines the City's "budgetary basis" of accounting. <br />• Formalizes the City's level of budgetary control at the fund level. In other words, <br />expenditures do not legally exceed appropriations until they do so at the fund level, <br />as opposed to at the department or line item level. Therefore, budget amendments <br />are not legally necessary until appropriations at the fund level are being exceeded. <br />• Defines "balanced budget" and states the City's intent to also have a structurally <br />balanced budget. <br />• Requires a Capital Improvement Plan and a Long -Term Financial Plan to be <br />presented at the time of budget development. <br />Investment Policies <br />• Sets safety, liquidity, and yield objectives. <br />• Defines legal investments. <br />• Defines standards of care and performance. <br />Capital Asset Investment & Management Policies <br />• Broadly defines the Six -Year Capital Improvement Plan (C-I-P) process. <br />• Defines and requires a "balanced" C-I-P. <br />• States the City's intent to preserve existing infrastructure before allocating <br />resources to new capital projects. <br />Accounting, Auditing, and Financial Reporting Policies <br />• Officially designates the City's Finance Committee as the City's Audit Committee. <br />• Discusses the City's internal control structure and the COSO framework. <br />• Sets the City's capitalization threshold. <br />• Grants authorization to the Finance Committee, City Manager, and Finance <br />Director regarding "write-offs" of bad debt. <br />Staff is proposing to amend the Introduction section and the following policy sections from <br />the December 15, 2015 versions: <br />• General Policies <br />• Reserve Policies <br />• Revenue Policies <br />• Operating Budget Policies <br />• Capital Asset Investment & Management Policies <br />• Accounting, Auditing, and Financial Reporting Policies <br />CITY COUNCIL COMMUNICATION <br />