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HomeMy Public PortalAboutResolution 16-89 Regulating the Budgeting, Management and Accounting for Funds and other assets of the City of Mccall Resolution No . 16-89 FINANCIAL POLICY A policy of the City of McCall , Idaho, regulating the Budgeting, Management and Accounting for Funds and other assets of the City of McCall . A. FINANCE POLICY STATEMENT The governing body finds and declares that the citizens of the City of McCall , Idaho expect and desire that public funds be managed so as to provide the maximum services at the lowest reasonable cost ; that measures be taken to protect those funds from improper use or loss ; that the funds be accounted for in a manner consistent with state and federal law; and that when not immediately needed that funds be prudently invested. To that end, we hereby adopt these basic policies to guide and govern financial management and accounting of City funds . B. BUDGET DEVELOPMENT SECTION 1 -- PURPOSE An annual budget is a written financial projection setting forth the planned activities for the city for the coming year in terms of available dollars . Its primary purpose is to effectively utilize the city' s scarce resources in providing services to citizens . An effective budget performs four major functions : 1 . It is a forward-looking or planning document . Its preparation prompts managers to anticipate future costs and (in the case of some funds) future receipts . 2 . It is a statement of the policies of the governingbody for the budget year . It outlines the governing body' s priorities and precedences . 3 . It is a communication tool . It should therefore be presented in such a way as to be easily understood and followed by the public . 4 . It is a management tool . The budget guides management decisions throughout the budget year and at the end of the budget year provides a 1 measure of the planning process and, with a number of conditions , a measure of managerial effectiveness . Its ability to measure managerial effectiveness extends only to those items that the manager can effectively influence . SECTION 2 -- PREPARATION Preparation begins with planning sessions with the various department heads and City administrative officers . Each department head shall estimate expenditures in three major areas : 1 . Personnel Services . This area shall include anticipated salaries , benefits and obligatory contributions such as workmen' s compensation, social security and the city' s contribution to the employees' retirement plan . Elements to be considered shall include the current number of employees and their salaries , anticipated merit promotions , additional personnel to be hired and their benefits , an estimate of the workmen' s compensation insurance premiums based on the total salaries and category of position, an allowance to be contributed to the Unemployment Trust Fund, current health benefits and anticipated rate increases , and the city' s associated contributions to the employees' social security and public retirement plans . 2 . Capital Outlay . This area shall include anticipated expenditures to acquire fixed assets for the city . Include are land, buildings , equipment and improvements that increase the value of fixed assets . 3 . Service and Supply . This area shall include purchased services , utilities , professional services , consumable supplies and other expenditures that are not described in 1 or 2 above . The City Administrator/Clerk and City Treasurer shall be responsible for estimating revenues for the budget year . This estimate shall be prepared from consultation with state and county agencies responsible for dispersing revenues . The Mayor and City Council , together with the City Administrator/Clerk and City Treasurer shall , using the 2 information gathered during interviews with Department Heads , shall prepare a proposed operating budget . The proposed operating budget shall include any fund balances accumulated from the prior fiscal year and the necessary adjustments , either the reduction of proposed expenditures or the increase of revenues through increased tax rates or user charges in order to achieve a balanced budget where expenditures are less than or equal to available funds . Following tentative approval of the budget , a public hearing shall be held so than any interested person may appear and comment on the proposed budget . The notice of time and place of the public hearing will be published in the official newspaper of the City . This notice shall be published twice, seven (7) days apart . After the tentative operating budget has been approved by the City Council and the Notice of Hearing published, the budget may be decreased but may not be increased. Following the public hearing, the City Council shall approve the budget and legally enact the budget through an appropriations ordinance . The annual appropriations ordinance shall be published in the official newspaper of the City in the same manner in which all ordinances are published. The preparation of the proposed operating budget , the notice of public hearing, the public hearing and approval of the final budget shall be completed on or before the Friday before the second Monday in September of each year . The annual appropriation ordinance shall be passed in sufficient time to allow its publication in the official newspaper of the City on or before the last day of September of each year . The Council shall certify to the Valley County Commissioners , the total amount required from a property tax on the property in the City so as to raise the required funds fixed by the budget . The amount certified shall not exceed the maximum levy prescribed by law. Idaho Code Sections 50-1002 and 50-1003 govern the budget process and in all cases of conflict with this policy the state code shall prevail . C . PURCHASING PLAN SECTION 1 -- PURPOSE The purpose of the City' s Municipal Purchasing plan shall be : 3 1 . To obtain the most suitable services and commodities at the lowest price . 2 . To provide a means of control over expenditures . 3 . To have definite control over the quality of the products that are purchased. SECTION 2 -- SELECTION OF VENDORS There shall be no discrimination in the selection of vendors . The selection of a particular vendor shall be determined by the suitability of the product or service to the City' s needs , its cost , and such factors that make a particular offering more beneficial to the City such as the time or place of delivery . All vendors shall be given equal consideration without regard to political affiliation, race, color , creed, national origin or ancestry, age, sex, religion or handicap . SECTION 3 -- PURCHASING AUTHORITIES 1 . The City Administrator shall be the purchasing agent for the City and shall have overall responsibility for carrying out the purchasing plan . The purchasing agent shall personally approve all expenditures of more than $1 , 000 before the purchase is made . The purchasing agent shall sign a completed purchase order for each expenditure of $1 , 000 or more that does not require a competitive bid. 2 . Expenditures for the following departments indicated in Table 1 may be approved by the department head indicated, subject to the $1 , 000 limitation above . The purchasing agent may further restrict this authority . Expenditures of $300 or more but less than $1 , 000 must be approved, in advance, by the applicable department head. The approval shall be evidenced by the department head' s signature on a completed purchase order . 4 Table 1 Departmental Purchasing Authorities Department Approving Authority Mayor/Council Mayor or Member of the council making the purchase . Magistrate Court Court Clerk City Administrator City Administrator City Treasurer City Treasurer City Attorney City Administrator Planning & Zoning City Administrator Building Inspector Building Inspector General Government City Administrator Building Maintenance Building Maintenance Supervisor Police Police Chief Fire Fire Chief Animal Control Police Chief Public Works Public Works Director Parks Public Works Director Streets Public Works Director Library Librarian and the Library Board Tort Liability City Administrator Recreation Recreation Director Water/Sewer Administration • City Treasurer Water/Sewer Operation • Public Works Director Sewer Treatment Treatment Plant Manager Golf Course Golf Course Superintendent Airport Administration • City Administrator Airport Maintenance • Public Works Director 3 . The authority to make minor purchases of not more than $100 may be delegated in writing to members of the department by the appropriate department head. 4 . When purchased commodities are received, they shall be inspected by the department head, When he or she is satisfied that the commodities are as ordered in terms of quality and quantity, that approval will be noted on the invoice or vendor statement and forwarded to the City Treasurer for processing. Such approval shall include the 5 date, the account to be charged, the amount , and where not clear in the vendor' s documents , a description of the items purchased. D. CLAIMS Claims represent demands against the City' s assets . They fall into three general categories : Claims by vendors of goods and services furnished; tort claims which are claims for damages ; and reimbursements or claims for expenses incurred by city employees while conducting City business . All claims must be approved by the City Council before they can be paid. The method of presenting claims to the Council differs slightly by category . SECTION 1 - CLAIMS BY VENDORS OF GOODS AND SERVICES Invoices and statements by vendors will first be routed to the head of the department that ordered the services or goods . The department head shall verify that the goods were received in acceptable quantity and condition or that services were satisfactorily rendered and that the amount billed is correct . The department head shall then certify his or her approval using a stamp provided for that purpose by providing the date of approval , his or her initials , the amount approved and the expenditure account to which the claim is to be charged. If the invoice amount exceeds $300 . 00, the department head will attach a copy of the pre-approved purchase order authorizing the expenditure . The invoice or statement (claim) will then be forwarded to the City Treasurer for payment . At each City Council meeting, the Treasurer shall present a list of the claims to be paid. The list of claims shall include the claimant , the department and account to which the claim is to be charged, the amount of each claim and a concise description of item(s) or service (s) for which payment is claimed. Upon approval of the City Council , the City Treasurer shall issue checks or warrants in payment of the approved claims . SECTION 2 - TORT CLAIMS These claims must be made on forms provided by the City and reasonably present the nature of the claim and the details of the events . 6 Generally, claims for damages shall be forwarded to the City' s liability insurance carrier for resolution . A copy of the Notice of Claim shall be sent to the City Attorney . Each claim shall be signed and the time of receipt indicated thereon by the City Clerk. A copy of the claim shall be forwarded for formal action at the next City Council meeting. In some instances , when the amount claimed is less than the deductible; and the City' s liability is not questioned, such claims may be paid directly from the Tort Liability Fund. Since these claims may represent subsequent legal action, any admissions of liability or comment by staff or elected officials is discouraged. SECTION 3 - CLAIMS FOR EXPENSES From time to time, City employees must pay for expenses that are rightly the City' s . This section describes the expenses that may be reimbursed. Travel expenses may be reimbursed subject to the following limitations : a . The travel shall use the most economical and practical mode of transportation both from the standpoint of time and cost . b . Commercial transportation shall be coach class or the lowest cost available transportation . c . City Vehicles shall be used for local travel (up to 30 miles from the city) . Reimbursement for use of personal vehicles forlocal travel shall not be paid unless approved in advance and in writing by the City Administrator . d. Employees shall be reimbursed for travel by personal vehicle at the rate of $0 .205 per mile when it is more practical than other transportation . Mileage shall be computed using current State Highway maps or charts . Reimbursement is allowed for travel in the vicinity of the area or city being visited while on official business . The traveler shall keep track of such "vicinity" mileage in addition to the mileage to and from the location . e . Employees may use personal vehicles for their own convenience when commercial travel would be more 7 practical but reimbursement shall not exceed the cost of commercial transportation . f . Vehicle rental , after reaching a destination by commercial transportation is permissible when it is necessary and is the most economical and practical means of transportation . Vehicle rental shall be limited to subcompact , compact or intermediate sizes . g. Claims for travel by commercial carrier shall be accompanied by a copy of the ticket or receipt by the commercial carrier . A credit card receipt is not sufficient . Claims for travel by personal vehicle shall be supported by the traveler' s certification of the miles traveled. h . Employees shall be reimbursed for meals consumed while on official business away from the City . Reimbursement shall not exceed the actual costs of the meals or $25 . 00 per day whichever is less . Claims for meals shall be supported by receipts . Credit card receipts are not acceptable to support claims for meals . Requests for advances toward travel expenses shall be approved by the Department Head and forwarded to the City Treasurer at least one week prior to the departure . The request for advance will contain an itemized estimate of the cost of travel , the account (s) to be charged and the amount requested. The City Treasurer shall prepare a check payable to the employee . Such check shall not be released to the employee more than two working days prior to departure . If an employee does not commence travel , he or she shall return the check to the City Treasurer, or if the check has been cashed, the employee shall reimburse the city for the full amount advanced within one (1) day of the date travel was to begin . If the employee fails to reimburse the city as required, the full amount of the advance shall be deducted from the employee' s next regular pay . If an advance is paid, the employee must file a claim for expenses as outlined above within seven (7) days of his or her return . This claim shall include the required receipts and documentation . If the employee is due additional reimbursement , the claim shall be processed as a claim for expenses . 8 If the amount due exceeds the amount of the advance, the employee shall include a check or money order payable to the City of McCall or the excess amount shall be deducted from that employee' s next regular pay . Similarly , if an employee does not file a claim for expenses within seven (7) days of return, the full amount of the advance shall be deducted from the employee' s next regular pay . E. CASH MANAGEMENT For the purposes of this discussion, "cash" shall be defined as funds in demand deposits in the City' s checking accounts , the petty cash fund maintained by the City Treasurer , the evidence fund maintained by the City Treasurer for the use of police officers to purchase evidence and/or to pay informants , and the various change funds needed to transact business with the public . SECTION 1 - CHECKING ACCOUNTS . Funds received in the transaction of business shall be deposited daily . This shall include all payments and reimbursements and cash in excess of the designated change fund amounts . The City Treasurer shall monitor the balance of each checking account of the City on a daily basis in order to ensure that sufficient deposits are available to pay checks as they are presented and to ensure that the balance of each account does not exceed $100, 000 . The Federal Depositor' s Insurance Corporation protects each depositor' s account up to $100, 000 and in order to ensure that the City' s funds are fully protected, the City Treasurer shall invest all funds in excess of $100, 000 as provided in F below and when required withdraw such investments to fund the operations of the City . SECTION 2 - CHANGE FUNDS . Each department that routinely conducts financial transactions with the public shall maintain a change fund. Said fund shall be maintained a specified amount which shall be the minimum amount necessary to transact a day' s business . Receipts shall be deposited daily so that the specified amount of cash is maintained. Cash in change funds shall not be used to make purchases or for any type of dispersal . 9 SECTION 3 - PETTY CASH. There is often a need for the payment of small amounts , such as for postage due or transportation charges where payment by check would result in delay and excessive expense in maintaining the records . Though each transaction is small they can accumulate to a considerable amount and it is essential that adequate controls be established. This is accomplished through the petty cash account . A specific amount shall be established for petty cash and when the petty cash account is nearly depleted, it shall be replenished. The replenishment shall be by check drawn on the City and charged to the expense accounts for which the funds were used. Whenever a cash expenditure is required, the employee requiring the expenditure shall request the amount needed and sign a receipt therefore, indicating the purpose of the expenditure . Upon completion of the transaction the employee shall present a receipt and return any unused cash to the City Treasurer . Petty cash shall not be used to pay expenses and for reimbursements that require processing in accordance with D above . SECTION 4 - EVIDENCE FUND. The evidence fund is for the exclusive use of the Police Department for the sole purpose of payment of informants or to conduct undercover investigations . This fund shall also be maintained at a specific level and shall be replenished as used. Any police officer requiring such funds shall request them in writing from the City Treasurer . Because of the confidential nature of these transactions the police officer shall not be required to disclose the purpose of the funds , but each request shall include the case number and shall be countersigned by the Chief of Police . The evidence fund shall not be used to pay expenses and for reimbursements that require processing in accordance with D above . 10 F. INVESTMENTS From time to time, the funds available to the City exceed the funds needed to finance the City' s operations . At such times it is prudent to invest these idle funds in such a way as to generate additional funds . The City Treasurer may be empowered by resolution of the Mayor and the City Council to invest funds in the securities authorized by section 50-1013 of the Idaho Code . The City Treasurer shall make such investments to provide the greatest yield consistent with the City' s future needs for funds . HISTORY This policy was adopted under Resolution No . 16-89 on July 13, 1989 by the McCall City Council at a regular meeting. M. or ATTEST : /21/// City Clef — — Revisions to the Policy are hereto attached: Resolution No ._ Date : Resolution No . Date : Resolution No . Date : Resolution No . Date : Resolution No . Date : — — ----------- --- ----- Resolution No . Date : Resolution No . Date : 11 /6, 7 TREASURER'S REPORT July 13, 1989 1. Aspen Village Water Bill: (Letter in Packet) I received a letter from the attorney for Aspen Village Homeowners Association in reply to my letter requesting payment of past due water/sewer bills. I've passed the correspondence to the City Attorney. 2. Financial Report: In Packet. 3. Financial Policy: In Packet. Our last auditor recommended we have an accounting manual. This policy is a step towards that. In summary, the policy: a. Implements the budgeting procedure as outlined in the State Code. b. Establishes a purchasing plan which, in turn: 1) Establishes a purchase order system. 2) Assigns responsibility for purchases in the various departments. 3) Sets dollar limits on the purchasing authority of city employees. c. Reduces to writing our present claims procedure. d. Establishes a policy of managing and controlling cash and investments. I recommend that this policy be referred to the City Attorney to draft an adopting resolution. 4. Unpaid Non-property Tax: On May 28, 1987, Dautis Pearson executed a Promissory Note to the City in the amount of $357.31 plus interest. This note was due on November 15, 1987. I recommend we pursue this matter in small claims court and that you grant me or some other person specific authority to initiate this action.