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HomeMy Public PortalAboutCity Council Fiscal Year 2008 Budget Policy GuidelinesTown Council FY08 BudLet Policv Guidelines (Adopted January 23, 2007) The Town Council is adopting these budget policy guidelines pursuant to Section 5-1 of the Watertown Home Rule Charter. Based on these guidelines, the Town Manager will develop budgetary goals and the Town budget for FY08. L Financial Policies Watertown has benefited from many years of sound financial management. In order to solidify the sound practices currently in effect, increase public understanding of the framework within which the Town's budget is developed, and focus attention on future budgetary challenges, the Town Council believes formal financial policies should be established in the following areas: A. Unreserved fund balance: In order to respond to emergencies and other unanticipated needs, preserve financial flexibility, and maintain favorable bond ratings, the Town should seek to maintain an unreserved fund balance (including stabilization funds) equal to 7-10% of the annual operating budget. The Council and Town Manager will work to develop a formal policy on the unreserved fund balance, including the use of free cash in excess of the target for the unreserved fund balance. B. Capital expenditures: In order to maintain and improve its infrastructure, facilities, and equipment, the Town should seek to make annual capital expenditures (exclusive of enterprise funds) equal to at least 7.5% of the operating budget. The Council and Town Manager will work to develop a formal policy on the financing of capital improvements, including a debt management policy. C. Post -employment benefits: In order to achieve long-term financial stability and meet the Town's obligations to its employees and retirees, the Council and Town Manager will work to develop a plan to address the Town's unfunded pension liability and other post -employment benefits. IL Revenues (ranked in order of priority) The Town Council believes that identification of cost -savings and new revenues should be a precondition to additional expenditures. To this end, in developing the FY08 budget, the Town should: A. Seek to contain increases in health insurance costs by negotiating structural changes in health benefits for Town employees (plan design and/or contribution rates) while maintaining a commitment to quality, accessible health care and encouraging responsible and appropriate health care decisions. To reduce the immediate impact of changes in health benefits on lower -paid Town employees, consideration should be given to establishing a Town -financed account to reimburse certain out-of-pocket costs on a sliding scale based on salary. B. Explore whether adding a second ambulance to the Fire Department would generate sufficient revenue to cover or exceed the incremental cost, while enhancing the Town's emergency medical response capability. C. Explore potential savings in energy costs through an energy audit of all Town buildings, facilities, and equipment (including street and traffic lights) and establishment of an energy action plan. D. Explore whether adding Building Department inspectional staff would generate sufficient revenue to cover or exceed the incremental cost, while strengthening the enforcement of the Town's building laws. E. Explore ways to increase the Town's capacity to identify and obtain grant funding from federal, state, and other sources. F. Analyze whether the Town's revenue from licenses, permits, and fees is low compared to similar communities and determine whether certain fees should be increased or new fees instituted, while adhering to the principle that fees should not exceed the cost of services provided. III. Program Enhancements/Expenditures (ranked in order of priority) To the extent that resources allow, in light of the financial policies stated above and the principle of first identifying cost -savings and new revenues, the following program enhancements and, if necessary, new expenditures should receive priority in the FY08 budget. Education program enhancements and expenditures should be considered subsequently in light of the recommendations of the School Committee. A. Strengthen the capacity (including staffing) of the Department of Community Development & Planning in order to improve long-range planning, stimulate economic development, and enhance enforcement of the zoning ordinance. B. Repair and improve the Town's streets and sidewalks and enhance its trees and planting strips. Consideration should be given to funding such repairs, improvements, and enhancements from a variety of sources, including tax revenues, debt, and a betterment program. C. Strengthen the capacity (including staffing) of the Recreation Department in order to provide more recreational opportunities to Town residents. D. Undertake a facilities assessment study to identify and prioritize maintenance and infrastructure needs in public facilities. E. Enhance the Town's website as a cost-effective means of delivering information and services, increasing public awareness, and encouraging public feedback. F. Analyze how the chief administrators of others cities and towns allocate their professional responsibilities in order to enhance the services and oversight provided to the community. IV. Budget Monitoring A. In order to improve its ability to monitor the implementation of the Town budget, the Town Council will receive quarterly reports on revenues and expenditures during the fiscal year.