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CITY COUNCIL AGENDA ITEM NO. 04



Meeting Date: April 24, 2001

Subject/Title: Adoption of a resolution updating Council Policy No. 10-5, City of Brentwood Budget Policy and repealing Resolution No. 93-65.

Submitted by: Pamela Ehler, Director of Finance and Information Systems

Approved by: Jon Elam, City Manager


RECOMMENDATION
Adoption of a resolution updating Council Policy No. 10-5, City of Brentwood Budget Policy and repealing Resolution No. 93-65.

PREVIOUS ACTION
The City budget is adopted and serves as the City Council’s policy statement on the direction that the City will take during the fiscal year and beyond. On June 22, 1993, the City Council passed Resolution No. 93-65, adopting Budget Policy No.10-5, to help insure that the legal restrictions of the budget are complied with and improve the Finance Department’s ability to regulate cash flows and make investment decisions. 

BACKGROUND
Finance staff believes the current Budget Policy has become restrictive and outdated. These policy changes will provide the guidelines that departments need in order to more expeditiously administer City funds appropriated through the budget process. 

This Budget Policy has been distributed to department directors as well as the City Council Finance Subcommittee for their review and comment 


RESOLUTION NO.


ADOPTION OF A RESOLUTION UPDATING COUNCIL POLICY NO. 10-5, CITY OF BRENTWOOD BUDGET POLICY AND REPEALING RESOLUTION NO. 93-65.


WHEREAS, on June 22, 1993, the City Council adopted Budget Policy No. 10-5; and 

WHEREAS, City staff recently reviewed the policy and found it restrictive and outdated; and
WHEREAS, a new Budget Policy has been created to enable staff to more expeditiously administer City funds appropriated through the budget process; and

WHEREAS, Resolution No. 93-65 is hereby repealed in its entirety.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood does hereby amend Council Policy 10-5 updating the City of Brentwood Budget Policy as shown on Exhibit I, hereto.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held April 24, 2001 by the following vote:

AYES: 
NOES: 
ABSENT: 




Budget Purpose and Organization

A. Budget Objectives

Through its Financial Plan, the City will link resources with results by:

1. Identifying community needs for essential services.

2. Organizing the programs required to provide these essential services.

3. Establishing program policies and goals, which define the nature and level of program services required.

4. Identifying activities performed in delivering program services.

5. Proposing objectives for improving the delivery of program services.

6. Identifying and appropriating the resources required to perform program activities and accomplish program objectives.

7. Setting standards to measure and evaluate the:

a. Output of program activities

b. Accomplishment of program objectives

c. Expenditure of program appropriations

B. Two-Year Budget

The City Council shall adopt a two-year budget for the ensuing fiscal year no later than June 30 of each year.

1. The first year of the two-year budget, the City Council will conduct a budget study session outlining the recommended budget for the two-year period.

2. The second year of the two-year budget, the City Council will conduct a budget study session which focuses on changes being recommended for the second year of the two-year budget.

3. For each of the two years, the City Council will adopt a resolution appropriating and approving the budget for the ensuing fiscal year.

4. Benefits identified using a two-year financial plan:

a. Reinforcing the importance of long-range planning for managing the City’s fiscal affairs.

b. Concentrating on developing and budgeting for the accomplishment of significant objectives.

c. Establishing realistic timeframes for achieving objectives.

d. Creating a pro-active budget that provides for stable operations and assures the City’s long-term fiscal health.

e. Promoting more orderly spending patterns.

f. Reducing the amount of time and resources allocated to preparing annual budgets.

C. Measurable Objectives

The two-year financial plan will establish measurable program objectives and allow reasonable time to accomplish those objectives.

D. Second Year Budget

Before the beginning of the second year of the two-year cycle, the Council will review progress during the first year and approve appropriations for the second fiscal year.

E. Operating Carryover

1. Operating Carryover: 

a. Operating program appropriations supported by a Purchase or Encumbrance Order, including Capital Equipment, may be carried over from one budget year to the next.

2. Department Expenditures:

a. Budget expenditures approved by the City Council as appropriated by major category:
1. Personnel Services; Transportation and Training
2. Repairs and Maintenance, Materials, Supplies and Services; and Capital Outlay

b. All budget transfers require the approval of the Director of Finance or designee except those affecting personnel which must be approved by the City Manager.

c. Budget transfers required to hire additional permanent personnel require the City council’s approval.

F. Goal Status Reports 

The status of major program objectives will be formally reported to the City Council on an ongoing, periodic consistent basis.

Financial Reporting and Budget Administration

A. Annual Reporting

The City will prepare annual financial statements as follows:

1. The City will contract for an annual audit by a qualified independent certified public accountant. The City will strive for an unqualified auditors’ opinion.

2. The City will use Generally Accepted Accounting Principles (GAAP) in preparing its annual financial statements, and will strive to meet the requirements of the GFOA’s Award for Excellence in Financial Reporting program.

3. The City will issue audited financial statements within 180 days after year-end.

B. Interim Reporting.

The City will prepare and issue timely interim reports on the City’s fiscal status to the Council and staff. This includes:

1. On-line access to the City’s financial management system;

2. Monthly revenue and expenditure reports to the City Council, City Manager and Department Heads;

3. Mid-year budget reviews; and

4. Status report during budget review process.

C. Budget Administration

The City Council may, by majority vote, amend or supplement the budget at any time after its adoption. The City Manager has the authority to make administrative adjustments to appropriations as long as there is no funding source incompatibility and provided those changes do not increase overall appropriations.

Budget Management

A. Diversified and Stable Base

The City will seek to maintain a diversified and stable revenue base to protect it from short-term fluctuations in any one revenue source.

B. Long-Range Focus

The City Council will emphasize and facilitate long-range financial planning through the development of a two-year budget and a five-year capital improvement plan.

C. Interfund Transfers and Loans

In order to achieve important public policy goals, the City has established various special revenue, capital project, debt service and enterprise funds to account for revenues whose use should be restricted to certain activities. Accordingly, each fund exists as a separate financing entity from other funds, with its own revenue sources, expenditures and fund equity.

Any transfers between funds for operating purposes are clearly set forth in the budget. These operating transfers, under which financial resources are transferred from one fund to another, are distinctly different from interfund borrowings, which are usually made for temporary cash flow reasons, and are not intended to result in a transfer of financial resources by the end of the fiscal year. In summary, interfund transfers result in a change in fund equity; interfund borrowings do not, as the intent is to repay in the loan in the near term. 

From time-to-time, interfund borrowings may be appropriate; however, these are subject to the following criteria in ensuring that the fiduciary purpose of the fund is met:

1. The Director of Finance is authorized to approve temporary interfund borrowings for cash flow purposes whenever the cash shortfall is expected to be resolved within 90 days. The most common use of interfund borrowing under this circumstance is for grant programs like the Community Development Block Grant, where costs are incurred before drawdowns are initiated and received. However, receipt of funds is typically received shortly after the request for funds has been made.

2. Any other interfund borrowings for cash flow or other purposes require case-by-case approval by the City Council.

3. Any transfers between funds where reimbursement is not expected within one fiscal year shall not be recorded as interfund borrowings; they shall be recorded as interfund operating transfers that affect equity by moving financial resources from one fund to another.

User Fee Cost Recovery Goals

A. Ongoing Review

Fees will be reviewed and updated on an ongoing basis to ensure that they keep pace with changes in the cost-of-living as well as change in methods or levels of service delivery.

B. User Fee and Utility Rates Cost Recovery

It is the intent of the City to collect user fees and/or utility rates for services provided to the public, where applicable.

C. Annual Review

User fees and utility rates will be reviewed and updated annually to ensure that they keep pace with the cost of providing the service.

D. Development Fees Review Program

The following cost-recovery policies apply to the development fees review program:

1. Services provided under this category include:

a. Planning (planned development permits, tentative tract and parcel maps, re-zonings, general plan amendments, variances, use permits, etc.).

b. Engineering (public improvement plan checks, inspections, subdivision requirements, encroachments, etc.).

2. Cost recovery for these services should generally be very high. In most instances, the City’s cost recovery goal should be 100%. Exceptions to this standard include appeals, where the fee is set very low to provide adequate opportunity for due process.

3. The City will clearly establish and articulate standards for reviewing developer applications to ensure that there is “value for cost.”

E. Other User Fees

1. Other User Fees include:

a. City Clerk (Agenda mailings, U.S. Passport Services, Public Record Requests, Municipal & Zoning Code Supplements, Manuals and other documents, certifications, etc.)

b. Police (DUI recovery costs, fingerprinting, arrest report copies, etc.).

c. Other (Graffiti removal, copying costs, cost for documents published by the City, costs for damaged property, or other costs reasonably anticipated to be covered by user fees).

F. Utility Fees and Rates

Water, Solid Waste and Sewer Enterprises: The City will set utility fees and rates at levels which fully cover the total direct and indirect costs, including operations, capital outlay, and debt service.

G. Recreation Programs

The following cost recovery policies apply to the City’s recreation programs:

1. Cost recovery for activities directed to adults should be relatively high.

2. Cost recovery for activities directed to youth and seniors should be relatively low. In those circumstances where services are similar to those provided in the private sector, cost recovery levels should be higher.

Although ability to pay may not be a concern for all youth and senior participants, these are desired program activities, and the cost of determining need may be greater than the cost of providing a uniform service fee structure to all participants. Further, there is a community-wide benefit in encouraging high-levels of participation in youth and senior recreation activities regardless of financial status

3. Cost recovery goals for specific recreation activities are set as follows:

High-Range Cost Recovery Activities (67% to 80%)

a. Classes (Adult & Youth) 80%
b. Day care services 75%
d. Adult athletics (volleyball, basketball,
Softball lap swim) 67%

Mid-Range Cost Recovery Activities (30% to 50%)

e. City/County Library room rentals 50%
f. Special events (triathlon, other City- 
sponsored special events) 50%
g. Youth track 40%
h. Minor league baseball 30%
i. Youth basketball 30%
j. Swim lessons 30%
k. Outdoor facility and equipment rentals 30%

Low-Range Cost Recovery Activities (0 to 25%)

l. Public swim 25%
m. Special swim classes 15%
n. Community garden 10%
o. Youth STAR 10%
p. Teen services 10 %
q. Senior services 10 %

4. For cost recovery activities of less than 100%, there should be a differential in rates between residents and non-residents.

5. Charges will be assessed for use of rooms, pools, gymnasiums, ball fields, special-use areas, and recreation equipment for activities not sponsored or co-sponsored by the City. Such charges will generally conform to the fee guidelines described above.

6. A vendor charge of at least 10 percent of gross income will be assessed from individuals or organizations using City facilities for moneymaking activities. 
Appropriations Limitation

A. The City Council will annually adopt a resolution establishing the City’s appropriations limit calculated in accordance with Article XIIIB of the Constitution of the State of California, Section 7900 of the State of California Government Code, and any other voter approved amendments or state legislation that affect the City’s appropriations limit.

B. The supporting documentation used in calculating the City’s appropriations limit and projected appropriations subject to the limit will be available for public and City Council review at least 10 days before consideration of a resolution to adopt an appropriations limit. The City Council will generally consider this resolution in connection with final approval of the budget.

C. The City will strive to develop revenue sources, both new and existing, which are considered non-tax proceeds in calculating its appropriations subject to limitation.

D. The City will annually review user fees and charges and report to the City Council the amount of program subsidy, if any, that is being provided by the General or Enterprise Funds.

E. The City will actively support legislation or initiatives sponsored or approved by League of California Cities which would modify Article XIIIB of the Constitution in a manner which would allow the City to retain projected tax revenues resulting from growth in the local economy for use as determined by the City Council.

F. The City shall seek a vote of the public to amend its appropriation limit at such time that tax proceeds are in excess of allowable limits.

Reserves

A. Equipment Replacement

For assets, the City will establish and maintain an Equipment Replacement Fund to provide for the timely replacement of vehicles and capital equipment with an individual replacement cost of $15,000 or more. The annual contribution to this fund will generally be based on the annual use allowance which is determined based on the estimated life of the vehicle or equipment and its original purchase cost. Interest earnings and sales of surplus equipment as well as any related damage and insurance recoveries will be credited to the Equipment Replacement Fund.

Capital Improvement Management

A. CIP Projects - $15,000 or More

Construction projects and equipment purchases which cost $15,000 or more will be included in the Capital Improvement Plan (CIP); minor capital outlays of less than $15,000 will be included with the operating program budgets.


B. CIP Purpose

The purpose of the CIP is to systematically plan, schedule, and finance capital projects to ensure cost-effectiveness as well as conformance with established policies. The CIP is a five-year plan organized into the same functional groupings used for the operating programs. The CIP will reflect a balance between capital replacement projects which repair, replace or enhance existing facilities, equipment or infrastructure; and capital facility projects which significantly expand or add to the City’s existing fixed assets.

C. Project Manager

Every CIP project will have a project manager who will prepare the project proposal, ensure that required phases are completed on schedule, authorize all project expenditures, ensure that all regulations and laws are observed, and periodically report project status.

D. CIP SubCommittee

Headed by the City Engineer or designee, this Committee will review project proposals, determine project phasing, recommend project managers, review and evaluate the draft CIP budget document, and report CIP project progress on an ongoing basis.

E. CIP Phases

The CIP will emphasize project planning, with projects progressing through at least two and up to ten of the following phases:

1. Designate. Appropriates funds based on projects designated for funding by the Council through adoption of the Financial Plan.

2. Study. Concept design, site selection, feasibility analysis, schematic design, environmental determination, property appraisals, scheduling, grant application, grant approval, specification preparation for equipment purchases.

3. Environmental review. EIR preparation, other environmental studies.

4. Real property acquisitions. Property acquisition for projects, if necessary.

5. Site preparation. Demolition, hazardous materials abatements, other pre-construction work.

6. Design. Final design, plan and specification preparation, and construction cost estimation.

7. Construction. Construction contracts.

8. Construction management. Contract project management and inspection, soils and material tests, other support services during construction. 

9. Equipment acquisitions. Vehicles, heavy machinery, computers, office furnishings, other equipment items acquired and installed independently from construction contracts.


10. Debt service. Installment payments of principal and interest for completed projected funded through debt financings. Expenditures for this project phase are included in the Debt Service section of the Financial Plan.

Generally, it will become more difficult for a project to move from one phase to the next. As such, more projects will be studied than will be designed, and more projects will be designed than will be constructed or purchased during the term of the CIP.

F. CIP Appropriation

The City’s annual CIP appropriation for study, design, acquisition and/or construction is based on the projects designated by the Council through adoption of the budget. Adoption of the budget CIP appropriation does not automatically authorize funding for specific project phases. This authorization generally occurs only after the preceding project phase has been completed and approved by the Council and costs for the succeeding phases have been fully developed.

Accordingly, project appropriations are generally made when contracts are awarded. If project costs at the time of bid award are less than the budgeted amount, the balance will be inappropriate and returned to fund balance or allocated to another project. If project costs at the time of bid award are greater than budget amounts, five basic options are available:

1. Eliminate the project.

2. Defer the project for consideration to the next Financial Plan period.

3. Rescope or change the phasing of the project to meet the existing budget.

4. Transfer funding from another specified, lower priority project.

5. Appropriate additional resources as necessary from fund balance.

H. Program Objectives

Project phases will be listed as objectives in the program narratives of the programs, which manage the projects.

Human Resource Management 

A. Regular Staffing

1. The budget will fully appropriate the resources needed for authorized regular staffing and will limit programs to the regular staffing authorized.

2. Regular employees will be the core work force and the preferred means of staffing ongoing, year-round program activities that should be performed by full-time City employees rather than independent contractors. The City will strive to provide competitive compensation and benefit schedules for its authorized regular work force. Each regular employee will:

a. Fill an authorized regular position.

b. Be assigned to an appropriate bargaining unit.

c. Receive salary and benefits consistent with labor agreements or other compensation plans.

3. To manage the growth of the regular work force and overall staffing costs, the City will follow these procedures:

a. The City Council will authorize all regular positions.

b. The Human Resources Division will coordinate and approve the hiring of all regular and temporary employees.

c. All requests for additional regular positions will include evaluations of:

· The necessity, term and expected results of the proposed activity.

· Staffing and materials costs including salary, benefits, equipment, uniforms, clerical support and facilities.

· The ability of private industry to provide the proposed service.

· Additional revenues or cost savings, which may be realized.

4. Periodically, and before any request for additional regular positions, programs will be evaluated to determine if they can be accomplished with fewer regular employees. 

B. Temporary Staffing 

1. The hiring of temporary employees will not be used as an incremental method for expanding the City’s regular work force.

2. Temporary employees include all employees other than regular employees, elected officials, and volunteers. Temporary employees will generally augment regular City staffing as extra-help employees, seasonal employees, contract employees, interns and work-study assistants.

3. The City Manager and Department Heads will encourage the use of temporary rather than regular employees to meet peak workload requirements, fill interim vacancies, and accomplish tasks where less than full-time, year-round staffing is required.

Under this guideline, temporary employee hours will generally not exceed 50% of a regular, full-time position (1,000 hours annually). There may be limited circumstances where the use of temporary employees on an ongoing basis in excess of this target may be appropriate due to unique programming or staffing requirements. However, any such exceptions must be approved by the City Manager.

Contract employees are defined as temporary employees with written contracts approved by the City Manager who may receive approved benefits depending on hourly requirements and the length of their contract. Contract employees will generally be used for medium-term (generally between six months and two years) projects, programs or activities requiring specialized or augmented levels of staffing for a specific period. The services of contract employees will be discontinued upon completion of the assigned project, program or activity. Accordingly, contract employees will not be used for services that are anticipated to be delivered on an ongoing basis.

Budget Purpose and Organization

G. Budget Objectives

Through its Financial Plan, the City will link resources with results by:

8. Identifying community needs for essential services.

9. Organizing the programs required to provide these essential services.

10. Establishing program policies and goals, which define the nature and level of program services required.

11. Identifying activities performed in delivering program services.

12. Proposing objectives for improving the delivery of program services.

13. Identifying and appropriating the resources required to perform program activities and accomplish program objectives.

14. Setting standards to measure and evaluate the:

e. Output of program activities

f. Accomplishment of program objectives

g. Expenditure of program appropriations

H. Two-Year Budget

The City Council shall adopt a two-year budget for the ensuing fiscal year no later than June 30 of each year.

5. The first year of the two-year budget, the City Council will conduct a budget study session outlining the recommended budget for the two-year period.

6. The second year of the two-year budget, the City Council will conduct a budget study session which focuses on changes being recommended for the second year of the two-year budget.

7. For each of the two years, the City Council will adopt a resolution appropriating and approving the budget for the ensuing fiscal year.


8. Benefits identified using a two-year financial plan:

g. Reinforcing the importance of long-range planning for managing the City’s fiscal affairs.

h. Concentrating on developing and budgeting for the accomplishment of significant objectives.

i. Establishing realistic timeframes for achieving objectives.

j. Creating a pro-active budget that provides for stable operations and assures the City’s long-term fiscal health.

k. Promoting more orderly spending patterns.

l. Reducing the amount of time and resources allocated to preparing annual budgets.

I. Measurable Objectives

The two-year financial plan will establish measurable program objectives and allow reasonable time to accomplish those objectives.

J. Second Year Budget

Before the beginning of the second year of the two-year cycle, the Council will review progress during the first year and approve appropriations for the second fiscal year.

K. Operating Carryover

1. Operating Carryover: 

a. Operating program appropriations supported by a Purchase or Encumbrance Order, including Capital Equipment, may be carried over from one budget year to the next.

3. Department Expenditures:

a. Budget expenditures approved by the City Council as appropriated by major category:
1. Personnel Services; Transportation and Training
2. Repairs and Maintenance, Materials, Supplies and Services; and Capital Outlay

d. All budget transfers require the approval of the Director of Finance or designee except those affecting personnel which must be approved by the City Manager.

e. Budget transfers required to hire additional permanent personnel require the City council’s approval.





L. Goal Status Reports 

The status of major program objectives will be formally reported to the City Council on an ongoing, periodic consistent basis.

Financial Reporting and Budget Administration

D. Annual Reporting

The City will prepare annual financial statements as follows:

4. The City will contract for an annual audit by a qualified independent certified public accountant. The City will strive for an unqualified auditors’ opinion.

5. The City will use Generally Accepted Accounting Principles (GAAP) in preparing its annual financial statements, and will strive to meet the requirements of the GFOA’s Award for Excellence in Financial Reporting program.

6. The City will issue audited financial statements within 180 days after year-end.

E. Interim Reporting.

The City will prepare and issue timely interim reports on the City’s fiscal status to the Council and staff. This includes:

5. On-line access to the City’s financial management system;

6. Monthly revenue and expenditure reports to the City Council, City Manager and Department Heads;

7. Mid-year budget reviews; and

8. Status report during budget review process.

F. Budget Administration

The City Council may, by majority vote, amend or supplement the budget at any time after its adoption. The City Manager has the authority to make administrative adjustments to appropriations as long as there is no funding source incompatibility and provided those changes do not increase overall appropriations.

Budget Management

D. Diversified and Stable Base

The City will seek to maintain a diversified and stable revenue base to protect it from short-term fluctuations in any one revenue source.




E. Long-Range Focus

The City Council will emphasize and facilitate long-range financial planning through the development of a two-year budget and a five-year capital improvement plan.

F. Interfund Transfers and Loans

In order to achieve important public policy goals, the City has established various special revenue, capital project, debt service and enterprise funds to account for revenues whose use should be restricted to certain activities. Accordingly, each fund exists as a separate financing entity from other funds, with its own revenue sources, expenditures and fund equity.

Any transfers between funds for operating purposes are clearly set forth in the budget. These operating transfers, under which financial resources are transferred from one fund to another, are distinctly different from interfund borrowings, which are usually made for temporary cash flow reasons, and are not intended to result in a transfer of financial resources by the end of the fiscal year. In summary, interfund transfers result in a change in fund equity; interfund borrowings do not, as the intent is to repay in the loan in the near term. 

From time-to-time, interfund borrowings may be appropriate; however, these are subject to the following criteria in ensuring that the fiduciary purpose of the fund is met:

4. The Director of Finance is authorized to approve temporary interfund borrowings for cash flow purposes whenever the cash shortfall is expected to be resolved within 90 days. The most common use of interfund borrowing under this circumstance is for grant programs like the Community Development Block Grant, where costs are incurred before drawdowns are initiated and received. However, receipt of funds is typically received shortly after the request for funds has been made.

5. Any other interfund borrowings for cash flow or other purposes require case-by-case approval by the City Council.

6. Any transfers between funds where reimbursement is not expected within one fiscal year shall not be recorded as interfund borrowings; they shall be recorded as interfund operating transfers that affect equity by moving financial resources from one fund to another.

User Fee Cost Recovery Goals

H. Ongoing Review

Fees will be reviewed and updated on an ongoing basis to ensure that they keep pace with changes in the cost-of-living as well as change in methods or levels of service delivery.

I. User Fee and Utility Rates Cost Recovery

It is the intent of the City to collect user fees and/or utility rates for services provided to the public, where applicable.




J. Annual Review

User fees and utility rates will be reviewed and updated annually to ensure that they keep pace with the cost of providing the service.

K. Development Fees Review Program

The following cost-recovery policies apply to the development fees review program:

4. Services provided under this category include:

a. Planning (planned development permits, tentative tract and parcel maps, re-zonings, general plan amendments, variances, use permits, etc.).

b. Engineering (public improvement plan checks, inspections, subdivision requirements, encroachments, etc.).

5. Cost recovery for these services should generally be very high. In most instances, the City’s cost recovery goal should be 100%. Exceptions to this standard include appeals, where the fee is set very low to provide adequate opportunity for due process.

6. The City will clearly establish and articulate standards for reviewing developer applications to ensure that there is “value for cost.”

L. Other User Fees

2. Other User Fees include:

d. City Clerk (Agenda mailings, U.S. Passport Services, Public Record Requests, Municipal & Zoning Code Supplements, Manuals and other documents, certifications, etc.)

e. Police (DUI recovery costs, fingerprinting, arrest report copies, etc.).

f. Other (Graffiti removal, copying costs, cost for documents published by the City, costs for damaged property, or other costs reasonably anticipated to be covered by user fees).

M. Utility Fees and Rates

Water, Solid Waste and Sewer Enterprises: The City will set utility fees and rates at levels which fully cover the total direct and indirect costs, including operations, capital outlay, and debt service.

N. Recreation Programs

The following cost recovery policies apply to the City’s recreation programs:

7. Cost recovery for activities directed to adults should be relatively high.

8. Cost recovery for activities directed to youth and seniors should be relatively low. In those circumstances where services are similar to those provided in the private sector, cost recovery levels should be higher.

Although ability to pay may not be a concern for all youth and senior participants, these are desired program activities, and the cost of determining need may be greater than the cost of providing a uniform service fee structure to all participants. Further, there is a community-wide benefit in encouraging high-levels of participation in youth and senior recreation activities regardless of financial status

9. Cost recovery goals for specific recreation activities are set as follows:

High-Range Cost Recovery Activities (67% to 80%)

a. Classes (Adult & Youth) 80%
b. Day care services 75%
h. Adult athletics (volleyball, basketball,
Softball lap swim) 67%

Mid-Range Cost Recovery Activities (30% to 50%)

e. City/County Library room rentals 50%
f. Special events (triathlon, other City- 
sponsored special events) 50%
g. Youth track 40%
h. Minor league baseball 30%
i. Youth basketball 30%
j. Swim lessons 30%
k. Outdoor facility and equipment rentals 30%

Low-Range Cost Recovery Activities (0 to 25%)

l. Public swim 25%
m. Special swim classes 15%
n. Community garden 10%
o. Youth STAR 10 %
p. Teen services 10 %
q. Senior services 10 %

10. For cost recovery activities of less than 100%, there should be a differential in rates between residents and non-residents.

11. Charges will be assessed for use of rooms, pools, gymnasiums, ball fields, special-use areas, and recreation equipment for activities not sponsored or co-sponsored by the City. Such charges will generally conform to the fee guidelines described above.

12. A vendor charge of at least 10 percent of gross income will be assessed from individuals or organizations using City facilities for moneymaking activities. 





Appropriations Limitation

G. The City Council will annually adopt a resolution establishing the City’s appropriations limit calculated in accordance with Article XIIIB of the Constitution of the State of California, Section 7900 of the State of California Government Code, and any other voter approved amendments or state legislation that affect the City’s appropriations limit.

H. The supporting documentation used in calculating the City’s appropriations limit and projected appropriations subject to the limit will be available for public and City Council review at least 10 days before consideration of a resolution to adopt an appropriations limit. The City Council will generally consider this resolution in connection with final approval of the budget.

I. The City will strive to develop revenue sources, both new and existing, which are considered non-tax proceeds in calculating its appropriations subject to limitation.

J. The City will annually review user fees and charges and report to the City Council the amount of program subsidy, if any, that is being provided by the General or Enterprise Funds.

K. The City will actively support legislation or initiatives sponsored or approved by League of California Cities which would modify Article XIIIB of the Constitution in a manner which would allow the City to retain projected tax revenues resulting from growth in the local economy for use as determined by the City Council.

L. The City shall seek a vote of the public to amend its appropriation limit at such time that tax proceeds are in excess of allowable limits.

Reserves

B. Equipment Replacement

For assets, the City will establish and maintain an Equipment Replacement Fund to provide for the timely replacement of vehicles and capital equipment with an individual replacement cost of $15,000 or more. The annual contribution to this fund will generally be based on the annual use allowance which is determined based on the estimated life of the vehicle or equipment and its original purchase cost. Interest earnings and sales of surplus equipment as well as any related damage and insurance recoveries will be credited to the Equipment Replacement Fund.

Capital Improvement Management

F. CIP Projects - $15,000 or More

Construction projects and equipment purchases which cost $15,000 or more will be included in the Capital Improvement Plan (CIP); minor capital outlays of less than $15,000 will be included with the operating program budgets.


G. CIP Purpose

The purpose of the CIP is to systematically plan, schedule, and finance capital projects to ensure cost-effectiveness as well as conformance with established policies. The CIP is a five-year plan organized into the same functional groupings used for the operating programs. The CIP will reflect a balance between capital replacement projects which repair, replace or enhance existing facilities, equipment or infrastructure; and capital facility projects which significantly expand or add to the City’s existing fixed assets.

H. Project Manager

Every CIP project will have a project manager who will prepare the project proposal, ensure that required phases are completed on schedule, authorize all project expenditures, ensure that all regulations and laws are observed, and periodically report project status.

I. CIP SubCommittee

Headed by the City Engineer or designee, this Committee will review project proposals, determine project phasing, recommend project managers, review and evaluate the draft CIP budget document, and report CIP project progress on an ongoing basis.

J. CIP Phases

The CIP will emphasize project planning, with projects progressing through at least two and up to ten of the following phases:

11. Designate. Appropriates funds based on projects designated for funding by the Council through adoption of the Financial Plan.

12. Study. Concept design, site selection, feasibility analysis, schematic design, environmental determination, property appraisals, scheduling, grant application, grant approval, specification preparation for equipment purchases.

13. Environmental review. EIR preparation, other environmental studies.

14. Real property acquisitions. Property acquisition for projects, if necessary.

15. Site preparation. Demolition, hazardous materials abatements, other pre-construction work.

16. Design. Final design, plan and specification preparation, and construction cost estimation.

17. Construction. Construction contracts.

18. Construction management. Contract project management and inspection, soils and material tests, other support services during construction. 

19. Equipment acquisitions. Vehicles, heavy machinery, computers, office furnishings, other equipment items acquired and installed independently from construction contracts.


20. Debt service. Installment payments of principal and interest for completed projected funded through debt financings. Expenditures for this project phase are included in the Debt Service section of the Financial Plan.

Generally, it will become more difficult for a project to move from one phase to the next. As such, more projects will be studied than will be designed, and more projects will be designed than will be constructed or purchased during the term of the CIP.

F. CIP Appropriation

The City’s annual CIP appropriation for study, design, acquisition and/or construction is based on the projects designated by the Council through adoption of the budget. Adoption of the budget CIP appropriation does not automatically authorize funding for specific project phases. This authorization generally occurs only after the preceding project phase has been completed and approved by the Council and costs for the succeeding phases have been fully developed.

Accordingly, project appropriations are generally made when contracts are awarded. If project costs at the time of bid award are less than the budgeted amount, the balance will be inappropriate and returned to fund balance or allocated to another project. If project costs at the time of bid award are greater than budget amounts, five basic options are available:

6. Eliminate the project.

7. Defer the project for consideration to the next Financial Plan period.

8. Rescope or change the phasing of the project to meet the existing budget.

9. Transfer funding from another specified, lower priority project.

10. Appropriate additional resources as necessary from fund balance.

H. Program Objectives

Project phases will be listed as objectives in the program narratives of the programs, which manage the projects.

Human Resource Management 

B. Regular Staffing

5. The budget will fully appropriate the resources needed for authorized regular staffing and will limit programs to the regular staffing authorized.

6. Regular employees will be the core work force and the preferred means of staffing ongoing, year-round program activities that should be performed by full-time City employees rather than independent contractors. The City will strive to provide competitive compensation and benefit schedules for its authorized regular work force. Each regular employee will:

d. Fill an authorized regular position.

e. Be assigned to an appropriate bargaining unit.

f. Receive salary and benefits consistent with labor agreements or other compensation plans.

7. To manage the growth of the regular work force and overall staffing costs, the City will follow these procedures:

d. The City Council will authorize all regular positions.

e. The Human Resources Division will coordinate and approve the hiring of all regular and temporary employees.

f. All requests for additional regular positions will include evaluations of:

· The necessity, term and expected results of the proposed activity.

· Staffing and materials costs including salary, benefits, equipment, uniforms, clerical support and facilities.

· The ability of private industry to provide the proposed service.

· Additional revenues or cost savings, which may be realized.

8. Periodically, and before any request for additional regular positions, programs will be evaluated to determine if they can be accomplished with fewer regular employees. 

B. Temporary Staffing 

4. The hiring of temporary employees will not be used as an incremental method for expanding the City’s regular work force.

5. Temporary employees include all employees other than regular employees, elected officials, and volunteers. Temporary employees will generally augment regular City staffing as extra-help employees, seasonal employees, contract employees, interns and work-study assistants.

6. The City Manager and Department Heads will encourage the use of temporary rather than regular employees to meet peak workload requirements, fill interim vacancies, and accomplish tasks where less than full-time, year-round staffing is required.

Under this guideline, temporary employee hours will generally not exceed 50% of a regular, full-time position (1,000 hours annually). There may be limited circumstances where the use of temporary employees on an ongoing basis in excess of this target may be appropriate due to unique programming or staffing requirements. However, any such exceptions must be approved by the City Manager.

7. Contract employees are defined as temporary employees with written contracts approved by the City Manager who may receive approved benefits depending on hourly requirements and the length of their contract. Contract employees will generally be used for medium-term (generally between six months and two years) projects, programs or activities requiring specialized or augmented levels of staffing for a specific period. The services of contract employees will be discontinued upon completion of the assigned project, program or activity. Accordingly, contract employees will not be used for services that are anticipated to be delivered on an ongoing basis.

RESOLUTION NO.


ADOPTION OF A RESOLUTION UPDATING COUNCIL POLICY NO. 10-5, CITY OF BRENTWOOD BUDGET POLICY AND REPEALING RESOLUTION NO. 93-65.

WHEREAS, on June 22, 1993, the City Council adopted Budget Policy No. 10-5; and 

WHEREAS, City staff recently reviewed the policy and found it restrictive and outdated; and
WHEREAS, a new Budget Policy has been created to enable staff to more expeditiously administer City funds appropriated through the budget process; and

WHEREAS, Resolution No. 93-65 is hereby repealed in its entirety.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood does hereby amend Council Policy 10-5 updating the City of Brentwood Budget Policy as shown on Exhibit I, hereto.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held April 24, 2001 by the following vote:

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