For the 38th consecutive year, the City has earned the Certificate of Achievement for the Comprehensive Annual Financial Report (CAFR) from the Government Finance Officers Association for last year’s audit. The Certificate recognizes the spirit of transparency and full disclosure.
The 2019-20 budget was adopted in September 2019 using a millage rate of 1.18 mills, the same as the FY 2018-19 millage rate, and all statutory requirements were met. For the 15th year in a row, the City received the Government Finance Officers Association’s Budget Award, considered the highest form of recognition in public sector financial reporting.
On the one hand, the City Debt Policy establishes parameters and provides guidance governing the evaluation, issuance, management and reporting on all debt obligations issued by the City in compliance with Federal and State laws and the City’s Charter ordinances and resolutions. The City will only utilize debt obligations for acquisition, construction or remodeling of capital improvement projects that cannot be funded from current revenue sources or in such cases wherein it is more equitable to finance the project over its useful life. The City will not issue debt or use debt proceeds to finance operational costs.
Finally, the policy seeks to create procedures to minimize the City’s debt service and issuance costs, retain the highest practical credit rating, and provide full and complete post-issuance financial disclosure and reporting.
On the other hand, the City Investment Policy sets forth the investment objectives and parameters for the management of public funds for the City. The Policy is designed to safeguard the City’s funds, assure the availability of operating and capital funds when needed while providing an investment return competitive with comparable funds and financial market indices. The primary objectives, in order of importance, are safety of principal, liquidity, and return on investment.
Fact You Should Know to Dispel Inaccurate Information
Revenues will exceed Expenditures thus leading to an increase in Fund Balance
One Cent Sales Tax
This tax began in 2019 and is earmarked for infrastructure and building repair. . The utilization of the One Cent Sales Tax Fund Balance of $1.9 M from 2019 is doing exactly what the intent of the money was collected for. It is not an operational fund designed to accumulate and hold fund balance.
The water fund has significant ($18.8 M) in capital expenditures budgeted in 2019-2020 for water infrastructure and capacity improvements. this capital investment in Water fund assets will increase value of assets and decrease fund balance by $8.4 while leaving $19.3 in expected Fund Balance reserve.
A Fund Balance of $19.3 M remains 3 times greater than required by Fund Balance Policy and is approximately 56% of the 2020 projected revenue of $35 M. This clearly demonstrates fiscal responsibility reinvestment into infrastructure and Fund Balance stability.
Storm Water Fund
The Storm Water Fund has capital expenditures budgeted in 2019-2020 including $7.9 M for Phase I water outfall project.
The capital investment is essential in target water quality issues for the City. While the budget book (page 7) indicates the Fund balance being reduced to $6.8 M for this important project. Council also discussed an overall Stormwater Master Plan acceleration and directed staff to prepare financing alternatives for additional acceleration.
The current City Council has committed significant funds in the 2019-2020 Budget to water quality issues and have directed staff to bring additional funding options for additional acceleration.
The Budget was step 1. The workshop was step 2. In late April early May Council will be asked to approve financing options to preserve fund balance and to tackle additional items in the Stormwater Master Plan.
This expenditures exceeding revenues in the budget to invest and water quality while providing directive for staff to prepare additional financing alternatives demonstrates both commitment and prudence with Fund Balance stability.