HomeMy WebLinkAboutRes 2014 - Financial Policies (Repealed by Res 2096)
Cover page to Resolution 2014
The full text of the resolution follows this cover page.
Resolution 2014 was amended or repealed by the
following resolutions.
REPEALED
Section(s) Repealed Repealed by Res #
2096
I
Washington
rXesolution ,; ZID 19
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUKWILA, WASHINGTON, ADOPTING FINANCIAL POLICIES,
AND REPEALING RESOLUTION NOS. 1919 AND 1950.
WHEREAS, the City Council is committed to the highest standard of financial
management; and
WHEREAS, financial policies adopted by the legislative body are a best practice to
provide written guidance for how local government officials and staff should approach
fiscal issues and core financial areas; and
WHEREAS, financial polices outline a clear vision of how the City of Tukwila will
manage its financial resources to provide the best value to the community; and
WHEREAS, periodically updating and revising financial policies are important steps
toward ensuring consistent and rational financial management; and
WHEREAS, financial policies have traditionally existed in many different documents
and the City Council desires to minimize confusion and eliminate redundancies or
conflicts by consolidating financial policy direction to the extent feasible;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY RESOLVES AS FOLLOWS:
Section 1. The Financial Policies attached hereto as ExhibitA are adopted.
Section 2. The Financial Policies shall be reviewed on at least a biennial basis and
updated as necessary.
Section 3. Repealer. Resolution Nos. 1919 and 1950 are hereby repealed.
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PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at
a Regular Meeting thereof this day of 12020.
ATTEST/AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk
APPROVED AS TO FORM BY:
Office of the City Attorney
Attachment: Exhibit A -Financial Policies
De'Sean Quinn, Council President
Filed with the City Clerk: I-Z-2-ZO
Passed by the City Council: ('Z-4-ZV
Resolution Number: 20141
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Financial Policies
Section 1. Purpose
a. The City of Tukwila is accountable to the public and shall maintain the fiscal
integrity of its operating, debt service, and capital budgets while providing an
appropriate level of public services within theCity'sfiscal responsibility.
b. The City's Financial Policiesare intended to provide guidelinesfor the financial
planning and internal financial managementof the City.
Section 2. Budgeting
Cross references: TMC Chapter 3.30
a. The City of Tukwila shall prepare and adopt a biennial budget in accordancewith
RCW Chapter 35A.34, and Tukwila Municipal Code (TMC) Chapter 3.30. Fiscal
years begin January 1 and end December 31.
b. The budget shall be prepared with a priority -based approach that enables
resources to be allocated to the programs and services that provide the greatest
value to the community.
c. The budget must be developed in accordance with the policies and priorities set
forth in long-term policy documents including the Equity Policy, Strategic Plan,
Comprehensive Plan, CityCouncil and commu n ity priorities, and federal and state
laws.
d. Within each budget cycle, the budget should be structurally balanced, which
means that ongoing expenditures shall be provided for by anticipated ongoing
revenue and one-time revenue should only be used for one-time expenditures
unless explicitly authorized bythe City Council.
e. The City shall maintain a six-year Capital Improvement Program and update it
with each budgetcycle to ensure that all costs are addressed.
f. As part of each biennial budget process, the City shall prepare six-year
expenditure and revenue forecasts for the principal operating and capital funds.
Revenues will be estimated on a conservative basis.
g. The City Council may informally approve mid -year budget amendments by motion
prior to the submission of a comprehensive formal budget amendment at the end
of the fiscal year.
Section 3. Revenues
Cross references: TMC Title 3
a. The City will maintain a diversified and stable revenue system to shelter it from
short-term fluctuations.
b. The City shall develop and maintain a comprehensive schedule of fees and
charges, which should be reviewed biennially.
Financial Fblicies 11-30-20 Page 1 of 5
Section 3. Revenues (continued)
c. The City shall develop and maintain a Revenue Guide that describes major
revenue sources available to the City of Tukwila.
d. Revenue sources should be reviewed in off-budgetyears to accountfor inflation,
to stay in line with market, or to ensure cost recovery at a prescribed level
depending on the revenue source.
Section 4. Expenditures
Cross references:
- Purchasing Policy (Resolution TBD)
- Procurement Card Policy (Resolution No. 1750)
- Expense Reimbursement Policy (Resolution No. 1874)
a. The City shall maintain expenditure categories according to state statute and
administrative regulation known as the State Auditor's Budgeting, Accounting,
and Reporting System (BARS).
b. Operating expenditures within funds must be supported by the operating
revenues generated by that fund.
c. Purchasing will be conducted with appropriate internal controls, observe fair and
ethical business practices, and use wise and prudent judgement in the
expenditure of publicfunds.
Section 5. Grants
Cross references: Grant Policy/Procedure in progress
a. The City shall, whenever practical and advantageous, pursue grant funding. All
potential grants shall be examined carefully for matching requirements, and to
determine whether programs must be continued with local resources after grant
funds are exhausted.
b. Staff shall obtain approval from the appropriate City Council Committee before
applying for grants requiring a local match, and staff shall obtain City Council
approval prior to accepting grant agreements in amounts above the Mayor's
signing authority.
Section 6. Capital Improvement Program (CIP)
a. Transportation improvements will be coordinated with related improvements such
as utility, landscaping, sidewalks, etc.
b. Whenever feasible, capital improvements shall be coordinated with related
improvements of adjacent jurisdictions.
c. Capital Improvement Program projects shall, whenever possible, take advantage
of grants, loans or other financing external to the City. If the proposed grants or
mitigation are either notfunded or are reduced, the City Council will reevaluate
the respective project on the basis of its value and priority level placement in the
Capital Improvement Program.
Financial Policies 11-30-20 Page 2 of 5
Section 6. Capital Improvement Program (CIP) (continued)
d. Residential streets with safety issues, high traffic volumes, high pedestrian activity
and poor roadway conditions will be considered the highest priority projects.
e. Residential street designs will follow basic designs for arterials, collectors, and
local access streets. Designs to accommodate individual properties shall be
avoided.
f. Design of connecting streets is strongly encouraged.
g. For City -scheduled projects located on residential streets, the City will require the
undergrounding of new electrical and communication facilities pursuantto TMC
Chapter 11.28.
h. Street and road improvement projects on slopes will include roadside plantings
wherever feasible to help mitigate the land used for roadway and sidewalk
improvements.
i. Donation of the property needed for rights-of-way and easements shall be
pursued.
j. Latecomer agreements, where appropriate, shall be considered an acceptable
means of funding capital projects, improvements and replacements, in whole or
in part.
k. Right-of-way agreements for cable and electrical services should be utilized to
discourage excessive wiring throughoutthe City.
I. Current arterial street improvements determined in the six-year CIP may be
funded through a Local Improvement District (LID) or financing external to the
City. The City may participate using operating revenues, grants or bonds based
on health and safety needs or public benefit. The City may participate in the
funding byfinancing the preliminary engineering design and professional service
costs associated with planning and creating the LID.
m. A majority of property owners on a street may petition the City to set up an LID to
pay for residential street improvement projects, sidewalks and undergrounding of
utilities. The City will evaluate the possibility of paying for the design, preliminary
engineering, construction engineering, and LID formulation. The residents will
pay for undergrounding utilities in the street, undergrounding from the street to
their residence, the actual construction costs, and any improvements on private
property such as rockeries, paved driveways, or roadside plantings.
n. Non -transportation capital projects and improvements should be funded by
operating revenues, grants or bonds as determined in the six-year Financial
Plan n ing Model.
o. Pursuantto TMC Chapters 3.56 and 3.60, thefirst 1/4 cent Real Estate Transfer
Tax (REST) shall be dedicated to park and open space land acquisition, and the
second 1/4 cent shall be used for arterial streets, along with the parking tax,
unlesstheCity Council enacts other priorities consistentwith state law distribution
of REST fu n ds.
Financial Policies 11-30.20 Page 3 of 5
Section 6. Capital Improvement Program (CIP) (continued)
p. Street and road improvement projects shall be evaluated for the inclusion of
features that support the City's "Walk and Roll Plan" in order to encourage
walking, bicycling, and use of publictransit.
q. Policies will be reviewed annually and in concert with the adoption of growth
management policies to ensure continuity.
r. Transportation impact fees shall be collected so that "growth may pay for growth"
and growth -caused improvements may be constructed.
Section 7. Enterprise Funds
a. Utility fund expenditures shall be fully supported by their own rates, fees, and
charges and notsubsidized by the General Fund.
b. Utility rates should be structured to ensure adequate infrastructure development
and replacement.
c. Each Enterprise Fund shall be reviewed bi-annually to ensure a rate structure
adequate to meet its operations, maintenance, and long-term capital
requirements.
d. Enterprise Fund rate increases shall be small, applied frequently, and staggered
to avoid an overly burdensome increase and undue impactin any given year.
e. Enterprise Fund rate increases of external agencieswill be passed through to the
customer.
f. Infrastructure improvements such as water reuseshould considerconservation of
resources such as water and electricity.
Section 8. Debt
Cross references: Debt Policy (Resolution No. 1840)
a. Appropriate management of debt is an important factor in measuring the City's
financial performance and condition.
Section 9. Reserves
a. Prudentfinancial managementdictates that some portion of fundsavailableto the
City be reserved for future use.
b. At the close of each fiscal year, the General Fund unassigned balanceshall equal
or exceed 18% and the Contingency Fund reserve balance shall equal orexceed
10% of the previous year General Fund revenue, exclusive of significant non-
operating, non-recurring revenues such as real estate sales or transfers in from
otherfunds.
Financial Policies 11-30-20 Page 4 of 5
Section 9. Reserves (continued)
c. At the close of each fiscal year, the unrestricted balances of the Enterprise Funds
shall equal or exceed 20% of the previous year revenue, exclusive of the effects
of GASB Statement 68, as well as significant non-operating, non-recurring
revenues such as real estate sales, transfers in from otherfundsordebt proceeds.
d. Use or draw down of minimum balances shall occur only upon recommendation
of City Administration and approval by City Council through a resolution. Should
use or draw down occur, the City Administration shall establish a plan, no later
than the end of the fiscal year following the year of decline, to restore the fund
balance to the prescribed minimum level. The plan shall be presented to and
approved by the City Council.
e. A One-time Revenue Reserve shall be established and maintained in the
Contingency Fund. The One-time Revenue Reserve shall be credited annually
with 10% of the prior year one-time revenues to the extent General Fund surplus
for the year is sufficientto cover the reserve funding. Use of the reserve shall
occur only upon recommendation by City Administration and approval by City
Council resolution.
f. The City shall maintain a reserve in each of its self-insured health care funds in
an amount equal to 1.5 times, or 150%, of the actuarially determined IBNR
(incurred but not reported) balance. Use of the reserve shall occur only upon
recommendation by City Administration and approval by City Council resolution.
Section 10. Investments
(Cross references: TMC 3.28, Resolution 1828,
a. The City will strive to maximize the return on its investments with the primary
objective of preserving capital in accordance with city policy and prudent
investment practices.
Section 11. Minimum Reporting Requirements
a. The Finance Directorshall provide a financial status update at least quarterly.
b. City Administration shall provide the City Council with financial reports that reflect
actual performance in various expenditures and revenues.
c. City Administration shall provide the City Council with a quarterly report of all
newly -executed contracts, including the amount, responsible department, scope
of work, and expiration date.
d. Once the annual audit is complete, City Administration shall provide a report to
the City Council showing compliance with the Financial Reserve Policy.
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