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CITY COUNCIL AGENDA ITEM NO. 15

Meeting Date: June 28, 2005

Subject/Title: Approve a resolution to amend Budget and Fiscal Policies No. 10-5

Prepared by: Denise Davies, Finance Operations Manager

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

RECOMMENDATION
Approve a resolution to amend Budget and Fiscal Policies No. 10-5.

PREVIOUS ACTION
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.
On April 24, 2001, by Resolution No. 2275, City Council updated Council Policy No. 10-5, City of Brentwood Budget Policy and repealed Resolution No. 93-65.

On February 24, 2005, the City Council passed Resolution No. 2004-38, amending Budget and Fiscal Policies No. 10-5 to add the balanced budget, recreation cost recovery, minimum fund balance/reserve, replacement fund information and the capital financing and debt management section to the policy.

BACKGROUND
The Budget and Fiscal Policies establish guidelines for budget development, administration, and management as well as outline the City’s fiscal policies in regard to user fee cost recovery goals and capital financing and debt management. The current Budget and Fiscal Policy has been updated in order to address issues that have arisen, provide clarification as needed and has been expanded to include items that were not previously addressed in the policy.

Changes in the attached policy have been displayed in red. Some of the changes affecting the amendment to the existing policy are verbiage clarifications to better define the guidelines. However, additions to the policy are highlighted below:

Budget Administration
The Director Finance has been given authority to make administrative adjustments to appropriations as long as there is not a funding source incompatibility and provided the change does not increase overall appropriations or have an affect on budgeted year-end fund balances. Previously, only the City Manager had this authority.

Language has been added to the policy which defines questions that must be answered in the fiscal impact of a staff report when requesting a budget amendment from the City Council. These are:

1. The total cost of the amendment and basis for the cost estimate.
2. Whether the cost is “one-time” or recurring.
3. Whether or not funds may be transferred from another source and if so, what effect the transfer would have on that source.
4. Whether or not the purchase or contract will later require additional resources and if so, how much and describe/outline how it will be funded.
5. A summary of any revenue offsets that are expected due to the amendment and when they will be received.
6. Whether there will be a future reduction of costs and if so, how long it will take to recover the initial cost.

Uncollectible Receivables
It is the intent of the City to reflect the value of its receivables and ensure that resources are used efficiently and not devoted to the recovery of uncollectible receivables. The timely identification of losses is an essential element in appropriately measuring the value of the City’s assets. The write-off process is a critical component in valuing receivables. The City Manager and/or Director of Finance have the authority to write-off uncollectible receivables not to exceed $5,000 per transaction. Any uncollectible account exceeding $5,000 per transaction will require the City Council’s approval.

Minimum Refund Threshold for Overpayments
It is the intent of the City to ensure that resources are used efficiently. The cost to process a refund check exceeds $25.00. Therefore, refunds of overpayments shall not be issued for amounts less than $25.00.

Insurance Fund
The City will maintain an Insurance Fund to provide a funding source for future insurance costs. This fund consists of the savings realized from Public Employees Retirement System (PERS) due to prepayment of the employer portion of retirement costs. The PERS Retirement and Worker’s Compensation Insurance savings associated with having unfilled positions are also included in this fund. These savings may be used to pay for PERS Retiree Medical benefits. Departments are also charged for Property and Liability Insurance which funds the payments made to our insurance authority. Interest earnings will be credited to the Insurance Fund.

Facilities Maintenance Fund
The City will maintain a Facilities Maintenance Fund to provide for the custodial and maintenance needs of the City’s buildings. The annual contribution for this fund will generally be based on square footage. Interest earnings will be credited to the Facilities Maintenance Fund.

Regular Staffing
Adjustments to employee allocations will only be made in conjunction with the first or second year of the two-year budget process unless authorized by the Director of Finance.

FISCAL IMPACT
None

Attachments:
Resolution
Budget and Fiscal Policies

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING A RESOLUTION TO AMEND BUDGET AND FISCAL POLICIES NO. 10-5.

WHEREAS, 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; and
WHEREAS, on April 24, 2001, by Resolution No. 2275, City Council updated Council Policy No. 10-5, City of Brentwood Budget Policy and repealed Resolution No. 93-65; and

WHEREAS, on February 24, 2005, the City Council passed Resolution No. 2004-38, amending Budget and Fiscal Policies No. 10-5 to add the balanced budget, recreation cost recovery, minimum fund balance/reserve, replacement fund information and the capital financing and debt management section to the policy; and

WHEREAS, the Budget and Fiscal Policies establish guidelines for budget development, administration, and management as well as outline the City’s fiscal policies in regard to user fee cost recovery goals and capital financing and debt management. The current Budget and Fiscal Policy has been updated in order to address issues that have arisen, provide clarification as needed and has been expanded to include items that were not previously addressed in the policy.

NOW, THEREFORE BE IT RESOLVED, that the Budget and Fiscal Policies will be amended to clarify and better define the policy as attached.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 28th day of June 2005 by the following vote:

Attachment:
Budget and Fiscal Policies

City Administration
City of Brentwood City Council
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Brentwood, CA 94513
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Fax (925) 516-5441
E-mail allcouncil@brentwoodca.gov