Finance Committee Agenda and Packet 2020 12 15

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L City{)f FINANCE COMMITTEE Louis- ville COMMUNICATION COLORADO -SINCE 1878 SUBJECT: NEW MEMBER ORIENTATION — FINANCIAL POLICIES DATE: DECEMBER 15, 2020 PRESENTED BY: KEVIN WATSON, FINANCE DIRECTOR BACKGROUND Financial policies are central to a strategic, long-term approach to financial management and are intended to serve as a blueprint to achieve the financial stability required to accomplish the City's goals and objectives. More specifically, the intent of adopting a written set of financial policies is to institutionalize good financial management, clarify strategic intent for financial management, define certain boundaries and limits on actions that staff may take, support good bond ratings, promote long-term and strategic thinking, manage risks to financial condition, and comply with established best practices in public management. The City's Financial Policies have been written in relatively broad terms as guidelines for financial management decisions. These policies should not be confused with administrative statements of operating procedure, which cover the detailed steps needed to accomplish business processes. The City of Louisville's initial Fiscal Policies were adopted in 1984 and were updated intermittently until 1997. In 2015, staff updated and modernized the policies. Staff worked closely with the Finance Committee and on December 15, 2015, the City Council formally approved the new Financial Policies by Resolution 92, Series 2015. The process for developing the 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 actual policies from various counties and municipalities throughout the country. Staff attempted to include all relevant policy elements deemed "recommended best practices" by the G FOA. Prior to Council adoption, the Debt Policies were reviewed by the City's Financial Advisor and the Investment Policies were reviewed by the City's Investment Advisor. Standard and Poor's reviewed the City's Financial Policies during their rating review of the 2017 Recreation Center General Obligation Bond issue and responded with very positive comments. Future policy sections under consideration include long-term financial planning, internal controls, risk management, and an update to the current procurement policy. FINANCE COMMITTEE COMMUNICATION 14