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SUBJECT: <br />FINANCIAL POLICIES <br />DATE: <br />JULY 16, 2019 <br />PAGE 3 OF 5 <br />Operating Budget Policies <br />• Defines the City's "budgetary basis" of accounting. <br />• Formalizes the City's legal level of budgetary control at the fund level. In other <br />words, expenditures do not legally exceed appropriations until they do so at the <br />fund level, as opposed to at the department or line item level. Therefore, budget <br />amendments are not legally necessary until appropriations at the fund level are <br />being exceeded. <br />• Defines "balanced budget" and states the City's intent to also have a structurally <br />balance 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 />• These are the same policies (just reformatted) that were approved by Council in <br />2012. No changes were made on December 15, 2015. <br />• Sets safety, liquidity, and yield objectives. <br />• Defines legal investments. <br />• Defines standards of care and performance. <br />Capital Asset Management Policies <br />• Broadly defines the 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 />CITY COUNCIL 1 COMMUNICATION <br />