HomeMy WebLinkAboutResolution - 2006-R0149 - Amendments To Budget Financial Policy Language - 03_23_2006Resolution No. 2006-RO149
March 23, 2006
Item No. 5.32
RESOLUTION
WHEREAS, the City of Lubbock has an important responsibility to its citizens to
carefully account for public funds, prudently manage municipal finances, and plan for the
adequate funding of services desired by the public; and
WHEREAS, the purpose of the financial policies is to enable the City to achieve a
long-term stable and positive financial condition by exercising integrity, prudence,
responsible stewardship, planning accountability, and full and continuous disclosure;
WHEREAS, pursuant to Resolution No. 2001-R0195, adopted by the City
Council of the City of Lubbock on May 24, 2001, the City of Lubbock adopted financial
policies (the "Financial Policies") as described therein;
WHEREAS, the City of Lubbock now desires to amend the Financial Policies by
revising or addressing (i) the General Fund Unrestricted Fund Balance; and (ii)
Appropriable Net Assets for all other Funds as regard to the General Fund; Water and
Wastewater Funds; Solid Waste, Airport and Storm Water Funds; and Internal Service
Funds; NOW THEREFORE:
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK
THAT the Financial Policies of the City of Lubbock are hereby amended by
deleting in their entirety the subparagraphs entitled, "General Fund", "Capital Project
Funds", "Enterprise Funds", "Rate Stabilization Funds" and "Internal Service Fund" of
Article I, Paragraph C, "Financial Conditions, Reserves and Stability Ratios", and
replacing the above named subparagraphs with the following, to -wit:
GENERAL FUND. The City targets an unrestricted fund balance in an amount equal to
at least 20% of regular general fund operating revenues to meet unanticipated
contingencies and fluctuations in revenue. Staff develops a General Fund rate model,
which is a rolling ten-year average multi -year financing plan that is used to forecast fiscal
year-end balances. By compiling all projected resources, General Fund disbursements,
general capital needs and operating transfers, staff develops a rate model. If the rate
model indicates an impending deficit, contingency plans are developed for City Council
approval to relieve those deficits.
WATER AND WASTEWATER FUNDS. The City targets appropriable net assets in the
Water and Wastewater funds in an amount equal to 25% of regular operating revenues.
Rate models are maintained in the Water Fund and Wastewater Fund to identify all
sources and uses of funds and provide a 10-year rate model which is used as a planning
tool for rate setting. The rate model is a model where all projected revenues, operating
and capital disbursements, debt service requirements, and transfers in/out are compiled to
determine the rate necessary to yield the targeted ending balance. When the model
predicts the need for a rate increase, further. intensive review is performed to determine if
capital project construction timelines can be adjusted in order to smooth the rate. The
rolling ten-year rate models are updated and analyzed as part of the budget preparation
process and again mid -fiscal year, once prior year financial statements are issued.
SOLID WASTE, AIRPORT AND STORM WATER FUNDS. The City targets
appropriable net assets in the Solid Waste, Airport, and Storm Water funds in an amount
equal to 15% of regular operating revenues. Rate models are maintained in the Solid
Waste Fund, Airport Fund and Storm Water Fund to identify all sources and uses of
funds and provide a 10-year rate model which is used as a planning tool for rate setting.
The rate model is a model where all projected revenues, operating and capital
disbursements, debt service requirements, and transfers in/out are compiled to determine
the rate necessary to yield the targeted ending balance. When the model predicts the need
for a rate increase, further intensive review is performed to determine if capital project
construction timelines can be adjusted in order to smooth the rate. The rolling ten-year
rate models are updated and analyzed as part of the budget preparation process and again
mid -fiscal year, once prior year financial statements are issued. In the Solid Waste Fund,
funds are designated in landfill closure and post closure care reserves for the purpose of
covering the City's landfill sites when they stop accepting waste and to perform certain
maintenance and monitoring functions at the sites for thirty years after closure.
INTERNAL SERVICE FUNDS. The City targets appropriable net assets in the Internal
Service Funds in an amount equal to 8% of regular operating revenues.
Passed by the City Council this 23rd day of March , 2006.
i
TOM MARTIN, MAYOR PRO TEM
ATTEST:
Reb cca Garza, City Secretary
APPROVED AS TO CONTENT:
Financial Officer
APPROVED AS TO FORM:
% �Z�_ -
Richard K. Casner, First Assistant City Attorney
ml/ccdocs/Financial Policies Amend.res
March 22, 2006