Chapter 4.01
FINANCIAL POLICIES
Sections:
4.01.030 Operating budget policies.
4.01.070 Accounting, auditing, and reporting policies.
4.01.080 Capital budget policies.
4.01.010 Financial policies.
The financial policies of the City establish the framework for overall fiscal planning and management and set forth guidelines for both current activities and long-range planning. These policies are reviewed annually to assure the highest standards of fiscal management. The Mayor and the department heads have the primary role of reviewing financial actions and providing guidance on financial issues to the Council. (Ord. 09-05 § 4, 2009)
4.01.020 Financial goal.
The overall financial goal underlying these policies is:
A. Fiscal conservatism to ensure that the City is in a solid financial condition at all times and which can be defined as:
1. Cash solvency, the ability to pay bills;
2. Budgetary solvency, the ability to balance the budget;
3. Service level solvency, the ability to provide needed and desired services.
B. Flexibility to ensure that the City is in a position to respond to changes in the economy or new service challenges without an undue amount of financial stress. (Ord. 09-05 § 4, 2009)
4.01.030 Operating budget policies.
The budget is a plan for allocating resources. The objective is to enable delivery of services with allocated resources. The City’s goal is to pay for all recurring expenditures with recurring revenues and to use nonrecurring revenues for nonrecurring expenditures. Budgetary review by the administration and Council will focus on the following basic concepts:
A. Staff Economy. The size and distribution of staff will be a prime concern. The Council will seek to limit staff increases to areas where approved program growth and support absolutely requires additional staff and to reduce staff where this can be done without adversely affecting approved service levels.
B. Program Expansions. Proposed expansion to existing programs and services must be submitted as budgetary increments requiring detailed justification. Every proposed program or service expansion will be scrutinized on the basis of its relationship to the health, safety, and welfare of the community.
C. Existing Service Costs. The justification for base budget program costs will be a major factor during budget review.
D. Administrative Costs. In all program areas, administrative overhead costs should be kept to an absolute minimum.
The budget will provide for adequate maintenance of capital plant and equipment and for its orderly replacement. (Ord. 09-05 § 4, 2009)
4.01.040 Debt policies.
A. The City will not fund current operations from the proceeds of borrowed funds.
B. The Council will consider short-term borrowing or lease/purchase contracts for financing major operating capital equipment when the Council determines that this is in the City’s best financial interest. (Ord. 09-05 § 4, 2009)
4.01.050 Revenue policies.
A. The City will try to maintain a diversified and stable revenue structure to shelter it from short-run fluctuations in any one revenue source.
B. The City will attempt to maintain a diversified and stable economic base by supporting policies that promote tourism and commercial and industrial development.
C. The City, where possible and reasonable, will institute user fees and charges for specialized programs and services. Rates will be established to recover operational, as well as capital or debt service costs.
D. The City will aggressively identify funding possibilities and pursue grant monies to assist in providing improvements to service programs such as, but not limited to, fire and rescue, roads, and animal control. (Ord. 09-05 § 4, 2009)
4.01.060 Investment policies.
A. The Mayor, with the assistance of the City Treasurer, shall be responsible for funds management.
B. The Mayor shall invest money only in the following types of investments:
1. Bonds, notes or other obligations of the United States;
2. Bonds or other evidence of indebtedness of the state;
3. Savings accounts or certificates of deposits of banks authorized to do business in Alaska to the extent that the account is insured;
4. Federally insured savings and loan associations to the extent that the investment is insured.
C. No investment shall be made for a term beyond the time when the City expects to need the funds.
D. The cost for accounting procedures, including the audits, shall be budgeted in the general appropriations. (Ord. 09-05 § 4, 2009)
4.01.070 Accounting, auditing, and reporting policies.
A. The City will establish and maintain a high standard of accounting practices in conformance with generally accepted accounting principles.
B. The City will use a modified-accrual accounting method in conformance with generally accepted accounting principles.
C. Regular monthly financial statements and annual financial reports will present a summary of financial activity by departments within all funds.
D. All City checks shall require two signatures. All checks shall have at least one primary signature. Primary signatures shall be the Mayor, Deputy Mayor or a designated signer to serve as acting Mayor in the Mayor’s absence. Designated secondary signatures shall be the Treasurer or City Clerk. These signatures shall be placed on the signature cards with the banks.
E. The Council will provide for an audit or certified financial statement of annual income and expenditures. The City’s previous fiscal year’s certified financial statement shall be developed by the Mayor and Treasurer for approval by the Council no later than March 31st of the current fiscal year. The Council shall then, if in agreement, accept the City’s financial statements for public record. If, in any year, state or federal law requires an audit, financial records and financial statements shall be examined by a certified public accounting firm, licensed to perform financial audits in the state of Alaska. The certified financial statement shall be submitted to the Department of Community and Regional Affairs by May 31st of each year. (Ord. 09-05 § 4, 2009; Ord. 16-01 § 5, 2016; Ord. 17-04 § 5, 2017)
4.01.080 Capital budget policies.
A. The Council will make all capital improvements in accordance with an adopted capital improvement program.
B. The Council will develop a multi-year plan for capital improvements. It shall include all improvements which are proposed to be undertaken during the six fiscal years next ensuing after the budget year, with appropriate supporting information describing the need for those improvements, estimated costs, and available revenue sources. At the public meeting after the public hearing the Council may approve by quorum, with or without amendment, the proposed capital improvement program by the first meeting in July of each year.
C. The Council may authorize expenditures from the capital projects fund for the approved capital improvements program provided there is a sufficient fund balance.
D. Future operating costs associated with new capital projects will be projected and included in operating budget forecasts. (Ord. 23-09 § 4, 2023; Ord. 23-04 § 4, 2023; Ord. 09-05 § 4, 2009)