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Home My WebLink AboutRes 1586 - Policies for Debt, Financial Planning Model and General Financial Nature (Repealed by Res 1839)City of Tukwila Washington Cover page to Resolution 1586 The full text of the resolution follows this cover page. A RESOLUTION OF THE CITY COUNCIL, OF THE CITY OF TUKWILA, WASHINGTON,, ,ADOPTING POLICIES RELATED TO DEBT, THE FINANCIAL PLAN NC MODEL, .AND POLICIES OE A GENERAL FINANCIAL NATURE Resolution 1586 was amended or repealed by the following resolutions. AMENDED Section(s) Amended Amended by Res # REPEALED Section(s) Repealed Repealed by Res # 1839 %O 2 y J G 1 0 �Q s 1908 C ity f T �a it o u Washington Resolution No. M U A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, ADOPTING POLICIES RELATED TO DEBT, THE FINANCIAL PLANNING MODEL, AND POLICIES OF A GENERAL FINANCIAL NATURE. WHEREAS, the City Council and Mayor are committed to high standards of financial management, and WHEREAS, adopting and periodically updating and revising financial policies are important steps towards assuring consistent and rational financial management; and WHEREAS, policies related to debt, the Financial Planning Model, and policies of a general financial nature are essential components of an overall financial management policy, NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS Section 1. The financial policies related to debt, the Financial Planning Model, and policies of a general financial nature, as evidenced in Attachment A, are adopted. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this (P day of YM &4 2005 Pamela Linder, Council President ATTEST/ AUTHENTICATED i Ja i� E. Cantu, CMC, City Clerk APPROVED-AS- S M. By i Office of he y A ey Filed with the City Clerk. Passed by the City Council. 0 0. Resolution Number 5 Financial policies KF bls 8/31/05 CITY OF TUKWILA Debt Policies The Debt Policies can be segregated into three areas Legal Debt limits, Practical or Fiscal limits and General Debt policies A. Legal Debt Limit The Revised Code of Washington (RCW 39.36) establishes the legal debt limits for cities. Specifically, this RCW provides that debt cannot be incurred in excess of the following percentages of the value of the taxable property of the City 1.5% without a vote of the people; 2.5% with a vote of the people; 5 0% with a vote of the people, provided the indebtedness in excess of 2.5% is for utilities; and 7.5% with a vote of the people, provided the indebtedness in excess of 5 0% is for parks or open space development. A sample schedule for the current 12 year period is attached to demonstrate the impact certain projections would have on debt capacity limitations. Policv DP -1 Prior to issuing any long -term bonds, the Administration must provide an impact analysis over the life of the new bonds. Bond issues must be approved by the City Council. B Practical or Fiscal Limitations More important than the legal limitations is the practical or fiscal limitations, i.e. ability to repay borrowed funds. Policv DP -2 Long -term debt cannot be issued prior to reviewing the impact on the Six Year Planning Model and its policy guidelines. The impact of other potential bond issues shall be considered. Policv DP -3 Fiscal Policy for large developments. To be determined. C. General Debt Policies Policv DP -4 The City will be cognizant of the criteria used by rating agencies to maintain the highest possible bond rating. Policv DP -5 Assessment Debt (LID) shall be considered as an alternativeis pref to General debtDebt. Policv DP -6 Debt issuance will conform to IRS regulations and avoid arbitrage consequences. CITY OF TUKWILA Financial Plannin Model Policies The Six -Year Financial Planning Model and Capital Improvement Program is the primary financial policy document. It represents the culmination of all financial policies. Revenues Policv FP -1— Revenues will be estimated on a conservative basis. Increases greater than inflation in Attachment A, Total Revenues and Expenditures, will require additional documentation. Policv FP -2 —Mayor revenue sources will require explanation in Attachment A -1, Notes to Revenues. Operations Maintenance Expenditures Policv FP -3 Expenditures for the General Fund operations (Attachment B, General Fund Operations Maintenance Expenditures) will only include basic inflationary increases at the beginning of the budget preparation process. Proposed increases in programs or personnel will require an issues and options paper and Council approval before being added to the operations maintenance expenditures estimate. CatDrtal Expenditures Poliev FP -4 Proj ect capital grants with local matching requirements can only be applied for with express approval by the City Council. Grant applications shall be made only for projects listed in the six -year Capital Improvement Program. Pohcv FP -5 If the proposed grants or mitigation are either not funded or are reduced, the respective project will be re- evaluated on the basis of its value and priority level placement in the Capital Improvement Program. Pohcv FP -6 The financing of limited benefit capital improvements (i.e. private development) should be borne by the primary beneficiaries of the improvement. The principle underlying limited benefit is that the property is peculiarly benefited and therefore the owners do not in fact pay anything in excess of what they receive by reason of such improvement. Fund Balances Policv FP -7 The General Fund will maintain a designated $1,100,000 "Rainy Day Fund" balance that is not included in Attachment A, Total Revenues Expenditures, of the Six -Year Planning Model. Furthermore, in order to assure a minimum cash flow scenario the Accumulated Totals within the Six -Year Planning Model may not recede below $3,000,000 in Attachment A, Total Revenues Expenditures Policy FP -8 If compliance with Policy FP -7 is at risk; the Administration will provide a list of revenue options, service level /program reductions or capital project deferrals for City Council consideration. Enteronse Funds Policy FP -9 Each Enterprise Fund will be reviewed annually and it must have a rate structure adequate to +meet its operations maintenance and long -term capital requirements. Policy FP -10 Rate increases should be small, applied frequently, and staggered to avoid an overly burdensome increase and undue impact in any given year Policy FP -11 Rate increases of external agencies (i.e. King County secondary wastewater treatment fees) will be passed through to the users of the utility CITY OF TUKWILA Other General Financial Policies Policv GF -1— The City's various user charges and fees will be reviewed at least every three years for proposed adjustments based on services provided and comparisons with other jurisdictions. Policv GF -2 The Finance Director will provide a financial status update at least quarterly Policv GF -3 Budget amendments during the year will be approved by budget motion until the end of the budget year, when a formal comprehensive budget amendment is submitted. Policv GF -4 Interfund loans will be permissible if practical. Interest rates will be computed based on the annual average of the State Investment Pool earnings rate. Policv GF 5 The City shall, whenever practical and advantageous, take advantage of grants, loans, or other external financing sources. With the exception o f c apztal i mprovement p rogram g rants r equinng a 1 ocal in atch, s taff shall report to and seek the approval of the appropriate council committee before finalizing the grant. CITY OF TUKWILA Projected Debt Capacity 2003 -2015 AV Non -Voted Net Remaining Debt Year (Billion Act x 1.5% D e b t Outstanding Capacit 2003 $3.384 $50,760 $26,359 $24,401 2004 3 452 51,780 25,165 26,615 2005 3.521 52,810 23,904 28,906 2006 3 591 0; 53,865 22,591 31,274 2007 3 863* 57,945 21,216 36,729 2008 4 018 60,270 29,784 30,486 2009 4 178 62,670 27,882 34,788 2010 4 345 65,175 25,880 39,295 2011 4 519 67,785 23,778 44,007 2012 4 699 70,485 21,428 49,057 2013 4 888 73,320 19,078 54,242 2014 5 087 76,305 16,828 59,477 2015 5.287 79,305 14,378 64,927 *Growth rate up to 3 591 at 2 Additional $.200 in 2007 then 4% growth rate thru 2015 *An additional $10,000,000 is borrowed for Ar AY" Lou n ncsl'�