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HomeMy WebLinkAboutRES 22-24 RESOLUTION NO. 22-24 A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, ADOPTING A CERTAIN POLICY DOCUMENT FILED WITH THE CITY CLERK AND ENTITLED "FINANCIAL POLICIES ." WHEREAS, the City of Apache Junction ("City") has a responsibility to ensure it handles public funds appropriately; and WHEREAS, written, adopted financial policies and internal controls are the best practice to promote sound financial management of the City and to assist council with the financial management of the City. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION ARIZONA, AS FOLLOWS: 1) That a certain policy document entitled "Financial Policies" attached hereto is hereby adopted. 2) That a certain policy document entitled "Financial Policies" as referenced above, three copies of which are on file in the office of the City Clerk, is hereby declared a public record and that said copies are ordered to remain on file with the City Clerk and are available for public use and inspection. PASSED AND ADOPTED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, THIS DAY OF ff4o SIGNED AND ATTESTED To THIS c DAY OF Yt(n 20 -Y-r 01�� zl4v� WALTER `CHIP" WILSON Mayor ATTEST: $4 v JEN14IFER PENA RESOLUTION NO. 22-24 PAGE 1 OF 2 City Clerk APPROVED ,AS TO RCS RICHARD J. STERN City tt n RESOLUTION NO. 22-24 PAGE 2 OF 2 City of Apache Junction Financial Policies Fiscal Year 2022/23 The following City financial policies establish the framework for City of Apache Junction's overall fiscal planning and management.They set forth guidelines for both current activities and long-range planning. The policies are reviewed annually to assure the highest standards of fiscal management.The City Manager and the City Budget Committee have the primary role of reviewing financial actions and providing guidance to the City Council.The following policies will be affirmed and adopted per Council Resolution when the City Council adopts the final budget. The overall financial goals underlying these policies are: • Fiscal conservatism:To ensure that the City is at all times in a solid financial condition.This can be defined as: o Cash Solvency-the ability to pay bills. o Budgetary Solvency-the ability to balance the budget. o Long-run Solvency-the ability to pay future costs. o Service Level Solvency—the ability to provide needed and desired services • Flexibility:To ensure that the C is in a position to respond to changes in the economy or new service challenges without an undue amount of financial stress. • Adhering to the highest accounting and management practices as well as the financial reporting and budgeting standards established by the Government Finance Officers Association, by the Governmental Accounting Standards Board(GASB) and by other professional organizations. Operating 0 All departments will participate in the responsibility of meeting policy goals and ensuring long-term financial health. Future service plans and program initiatives will be developed to reflect current policy directives, projected resources,and future service requirements. Ongoing operating costs should be supported by ongoing,stable revenue sources as much as possible.Some corollaries to this policy are: o Fund balances should be used only for one-time expenditures,such as capital equipment and improvements or contingency accounts. o Ongoing maintenance costs should be financed through operating revenues rather than debt. o Fluctuating federal grants should not be used to finance ongoing programs. Revenues from growth or development should be allocated to one-time costs as much as possible. • User fees and charges will be examined periodically,and changes will be approved by the City Council. Comparison of service delivery will be made on a periodic basis to ensure that quality services are provided to citizens at the most competitive and economical cost.The review of service delivery alternatives will be performed on a periodic basis. • Addition of personnel will only be requested to meet program initiatives and policy directives;after service needs have been thoroughly examined and it is substantiated that additional staffing will result in increased net revenue or enhanced operating efficiencies. • Benefits and compensation will be administered in accordance with direction given by City Council.As part of a cost-containment strategy,total costs for health insurance premiums will be shared between the employer and employees.Total premiums will be evaluated on an annual basis to ensure they are reasonable and competitive. Budget in accordance with Arizona state law,the City annually adopts a balanced budget. Arizona Revised Statute§42-17151 requires all estimated sources of revenue,and restricted and unrestricted unencumbered balances from the preceding fiscal year, shall equal the total of amounts proposed to be spent in the budget for the current fiscal year.The budget must include sufficient contingency appropriation provisions for expenditures related to revenues that cannot be accurately determined or anticipated when the budget is adopted. • The budget process weighs all competing requests for City resources,within expected fiscal constraints. • The budget shall be considered balanced if all sources of revenue, as estimated,are equal to,or exceed,the total of amounts proposed to be used in the operating budget for the current fiscal year, by fund. Investment Cash and Investment programs will ensure that proper controls and safeguards are maintained. City funds will be managed in a prudent and diligent manner with an emphasis on safety of principal,liquidity,and financial return on principal,in that order. Capital Management 1. A five-year Capital Improvement Plan (CIP)will be developed and updated annually, including anticipated spending as well as funding sources. 2. Proposed capital projects will be reviewed and prioritized by a cross-divisional team regarding accurate costing(design,capital, and operating), prevention of existing infrastructure deterioration before the addition of new infrastructure and overall consistency with the City's General Plan and City Council's goals and objectives. 3. Future operating and maintenance costs associated with new capital improvements will be forecast and included in the Operating Budget. 4. Dedicated two tenths of percent(0.2%) privilege tax revenue for street improvements will be restricted to funding the planning,design,construction and acquisition costs associated with building,renovating, or enhancing capital projects for streets, highways,and traffic control. Debt Management City Debt Service costs should not exceed five percent(5%)of the City's current or future annual operating revenue in order to control fixed costs and ensure expenditure flexibility. Reserve Management All fund designations and reserves will be evaluated annually for long-term adequacy and use requirements. • The City will maintain an unreserved general fund balance of at least 20%of the budgeted operating expense if available. Financial Reporting The City's accounting and financial reporting systems will be maintained in conformance with all state and federal laws,generally accepted accounting principles (GAAP)and standards of the Governmental Accounting Standards Board (GASB). Prior to the end of each fiscal year the City shall designate certified public accountants who,shall perform an independent audit of the City's annual financial statements in accordance with generally accepted government auditing standards. The certified public accountants shall be independent of the City government, having no personal interest,direct or indirect, in the fiscal affairs of City government or any of its officers.The certified public accountants shall submit their reports to the Council.All such audit reports shall be a matter of public record. • Financial systems will maintain internal controls to monitor revenues and expenditures on an ongoing basis.