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HomeMy WebLinkAboutR-05-34 RESOLUTION NO. R-05-34 A RESOLUTION OF THE CITY OF SEBASTIAN, FLORIDA, READOPTING FINANCIAL POLICIES GOVERNING VARIOUS AREAS OF BUDGET AND FINANCE AS PROVIDED FOR IN ATTACHMENT "1"; PROVIDING FOR CONFLICTS; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the Government Finance Officers Association ofthe United States and Canada recommends best practices in various areas for Finance and Budget; and WHEREAS, the City Council deems it to be necessary to adopt and readopt such financial policies on an annual basis, NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEBASTIAN, FLORIDA, as follows: SECTION 1. READOPTING FINANCIAL POLICIES: The City Council ofthe City of Sebastian hereby readopts Financial Policies governing the Operating Budget, Financial Reserves, Use of Surplus, Performance Measurement, Capital Improvement Program, Debt Management, Revenue, and Investment. SECTION 2. All resolutions or parts of resolutions in conflict herewith are hereby repealed. SECTION 3. This Resolution shall take effect upon adoption. The foregoing Resolution was moved for adoeti,:!,u by C()uncil Member ''7!l uYl ~ . Motion was seconded by Council Member 7/ ~ IJ.tL and, upon being put to a vote, the vote was as follows: Mayor Nathan McCollum Vice-Mayor Brian Burkeen Councilmember Lisanne Monier Councilmember Andrea Coy Councilmember Sal Neglia The Mayor thereupon declared this Resolution duly passed and adopted this 20th day of September, 2005. CITYOF.RIDA BY:~ .~ - Nathan B. McCollum, Mayor aYJ;~ Approved as to Form and Legality for Reliance by the City of Sebastian Only: By: 'v~ S\- Rich Stringer, Cit tomey Attachment "1" City of Sebastian, Florida Financial Policies City of Sebastian's financial policies set forth the basic 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 City Manager and the Management Team has the primary role of reviewing financial actions and providing guidance on financial issues to the City Council. Overall goals The overall financial goals underlying these policies are: 1. Fiscal Conservatism: To ensure that the city is in a solid financial condition at all times. This can be defmed as: A. Cash Solvency - the ability to pay bills B. Budgetary Solvency - the ability to balance the budget C. Long Term Solvency - the ability to pay future costs D. Service Level Solvency - the ability to provide needed and desired services 2. 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 fmancial stress. 3. Comply with All Statutory Requirements: As set forth by the State of Florida and the City ordinances. 4. Adherence to the highest Accounting and Management Practices: As set by the Government Finance Officers' Association standards for financial reporting and budgeting, the Government Accounting Standards Board and other professional standards. Operating Budget Policies The Finance Department, with support and direction from the Office of the City Manager, coordinates the budget process. The formal budgeting process, which begins in February and ends in September, provides the primary mechanism by which key decisions are made regarding the levels and types of services to be provided, given the anticipated level of available resources. Revenues and expenditures are projected on the basis of information provided by city departments, outside agencies, current rate structures, historical data and statistical trends. Budget Process The development of the budget IS guided by the following budget policies: 1. The budget must be balanced for all funds. Total anticipated revenues must equal total estimated expenditures for each fund (Section 166.241 of Florida Statutes requires that all budgets be balanced). 2. All operating funds are subject to the annual budget process and reflected in the budget document. 3. The enterprise operations of the city are to be self- supporting; i.e., current revenues will cover current expenditures, including debt service. 4. An administrative service fee will be assessed by the General Fund against all enterprise funds of the city. This assessment will be calculated based upon a percentage (number of full-time equivalent employees of the enterprise fund/total number of full-time equivalent employees of the city) of total General Fund administration expenditures budget (includes City Council, City Manager, City Attorney, City Clerk, Finance, Growth Management. and Human Resources) and will be used to reimburse the General Fund for the administrative and support services provided to these funds. 5. A 2.5 percent administrative service fee will be assessed by the General Fund against the Co=uuity Redevelopment Agency (CRA) Fund of the city. This assessment will be based on the total tax increment revenue estimate of the CRA Fund and will be used to reimburse the General Fund for the administrative support services provided to the CRA fund. 6. .\B admiBistratP/e service fee '.'Iil! be assessed by the General Flmd agaiBBt Sta_water Utility R-evilllue Fmul The asseosmilllt ,....ill be ealewated based an the mlH<imtmI alla'llable peroillllage set farth by the eity's Stormwater Ordinanee. Attachment" 1 " City of Sebastian, Florida Financial Policies Pu.-cUlmt ta the City OrEliflaHee ~ra. 0 Q1 15, flO flwre than 20?~ of the aHfllial flot GtafHI',':ater fee reveflues is te ee ,"sea fer the sj3eratisll. aHa maiateRlHlce aHhe stefHI'.vater J3regram. Pursuant to Ordinance 05-16. stormwater utility fees can be utilized to fund the General Fund stormwater operation. The amount being utilized should be approved bv the city council through the budget nfocess. 7. In no event will the City of Sebastian levy ad valorem taxes against real property and tangible personal property in excess of 10 mills, except for voted levies (Section 200.081 of Florida Statutes places this millage limitation on all Florida municipalities.) 8. The city will budget 95 percent of anticipated gross ad valorem proceeds to provide an allowance for discounts for early payment of taxes (Section 200.065 of Florida Statutes states that each taxing authority shall utilize not less than 95 percent of the taxable value.) 9. The city will coordinate development of the capital improvement budget with the development of the annual operating budget. Each capital improvement budget is reviewed for its impact on the operating budget in terms of revenue generation, additional personnel required and additional operating expenses. 10. A budget calendar will be designed each year to provide a framework within which the interactions necessary to formulate a sound budget could occur. At the same time, it will ensure that the city will comply with all applicable State legal mandates. Basis of Budgeting The basis of budgeting for General, Special Revenue, and Debt Service Funds shall be prepared on a modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized only when they become measurable and available to finance expenditures of the fiscal period. Expenditures are recognized when the fund liability is incurred except for unmatured interest on general long-term debt which is recognized when due, and the non-current portion of accrued fringe benefits (vacation and sick leave) which is recorded as a long- term liability in the Statement of Net Assets in the Comprehensive Annual Financial Report. The budgets for the Proprietary funds - Golf Course, Airport and Building Department - are prepared using the accrual basis of accounting. Under the accrual basis of accounting, expenditures are recognized when the liability is incurred. Revenues are recognized when they are obligated to the City (e.g., Airport leases). The differences between the budget basis and the accrual basis of accounting include: (1) budgeting the full amount of capital expenditures as expense rather than depreciating them and (2) presenting debt service, including principal as an expense. Guidelines The Comprehensive Annual Financial Report (CAFR) presents the status of the City's finances on a basis consistent with Generally Accepted Accounting Principles (GAAP) (i.e., a statement of net assets and statement of activities are presented on an accrual basis of accounting, including governmental funds, major governmental and proprietary funds are identified, governmental funds use the modified accrual basis of accounting, while the proprietary and trust funds use the accrual basis of accounting.) In order to provide a meaningful comparison of actual results to the final budget, the CAFR presents the City's operations on a GAAP basis and also shows fund revenue and expenditures on a budget basis for the General, Special Revenue, and Debt Service funds. Current revenues shall be sufficient to support current expenditures. The finance department will monitor each budgeted fund and make timelv budgetary recommendations and adiustments to make sure no budgetary expenditures are in excess of appropriations at fiscal vear end. which is not permitted under Florida State Statutes. The budget process and format shall be performance- based and focused on goals, objectives, programs, and performance indicators. The budget will provide adequate funding for maintenance and replacement of capital plant and equipment. Budget Amendment 1. Total fund appropriations changes must be approved by the City Council. Attachment "1" City of Sebastian, Florida Financial Policies 2. Uses of contingency appropnatlOns must be specifically approved by the City Council. 3. Shifts in appropriations within fund totals may be done administratively on the authority of the City manager. In most cases the City Manager will request City Council's approval since the item prompting the change will usually go to the City Council (e.g., award of contract, addition of staff, contract change order). Procedures for appropriation transfers and delegation of budget responsibility will be set by the City manager. 4. A Budgetary Control System will be maintained to ensure compliance with the budget. Monthly operating statements are provided to all Department heads and Quarterly budget status reports will be provided to the City Council comparing actual versus budgeted revenue and expense activity for all budgeted funds. Planning The City will annually prepare and distribute to departments and the City Council a Five-Year Forecast. The forecast will include estimated operating costs and revenues for future capital improvements, such as new parks and public works facilities, included in the capital budget. Fund Balance Policies On an annual basis, after the year-end audit has been completed, but no later than April I, the City Finance Director shall produce a schedule of all fund surpluses and deficits, with projections of reserve requirements and a plan for the use of any excess surplus for the current year in accordance with the Financial Balance Policies and Use of Surplus Policies. This document will be used not only to ensure compliance with stated and adopted policies, but also to analyze the total reserve and surplus picture to ensure that the policies as adopted do not inadvertently create adverse effects. The Director of Finance shall provide recommended changes to the City Council for any changes to the FiBaneial Fund Balance Policies and Use of Surplus Policies based on needs identified in this analysis. Working Capital The General Fund unappropriated fund balance will be maintained in an amount greater than or equal to fifteen percent (15%) of the annual General Fund Expenditures budget. This amount approximates two months or 60 days of working capital. The City shall include in the General Fund operating budget annually, an Operating Contingency Account equal to 1.5% of the General Fund total expenditures, less debt service, interfund transfers and capital expenditures. This contingency will be used for unforeseen and emergency events that occur during the course of the operating year and will expire at the end of each fiscal year and balances will not be brought forward. In order to provide the resources necessary to ensure continued operations of the City's programs should a natural disaster or significant changes in the weather pattern occur, the City shall maintain a reserve of $350,000 for emergency services. The City shall maintain a reserve of $100,000 for Property and Casualty claims representing f-eW" claims an a $25,000 deductible claim deductibles. All retirement programs, Police Pension, CW A!ITU and 40la programs will be funded at 100% of the obligations calculated annually. The defined benefit pension plan will be funded in accordance with an independent actuarial analysis performed at a minimum of every two years, or as needed. Capital Reserves The City shall include in the General Fund operating budget annually a Capital Contingency Account equal to 0.5% of the General Fund total expenditures, less debt service, interfund transfers and capital expenditures. This contingency will be used for unanticipated expenditures for the maintenance of buildings and replacement of related equipment and will expire at the end of each fiscal year and balances will not be brought forward. Annually the City shall transfer fifty percent (50%) of the current year's operating surplus (revenues in excess of expenditures) into a capital equipment replacement reserve for the purpose of creating a perpetual funding method for replacing City capital equipment. Prior to any funds being spent, the budget amendment procedure must be followed. The City shall maintain a reserve of $1,000,000 for the purpose of providing advances to the airport for capital improvements pursuant to a resolution establishing this loan reserve. The line of credit reserve shall have a term not to exceed five (5) years. The term expires September 30. 2007. Attachment" 1" City of Sebastian, Florida Financial Policies The table listed blow is a summary of all reserve and contingency requirements for the General Fund. Reserve Description Working Capital Reserve Em enc Reserve Property and Casualty claims Reserve Capital Equipment Replacement Reserve Capital Contingency (for budget purpose only) All retirement programs Requirement 15% of annual General Fund Ex enditures bud et $350,000 $100,000 50% of the current year's operating surplus (revenues in excess of ex enditures $1,000,000, expire September 12,2007 1.5% of the General Fund total expenditures budget, less debt service, interfund tmnsfers and capital ex enditures 0.5% of the General Fund total expenditures budget, less debt service, interfund transfers and capital ex enditures 100% Funded per independent actuarial analysis performed at a minimum of ev two ears, or as needed Use of Surplus Policies Use of Surpluses It is ilie intent of ilie City to use all surpluses generated to accomplish three goals: meeting reserve policies, avoidance of future debt, and reduction of outstanding debt. The City will not use existing fund balances or year-end surpluses to fund ongoing operating expenses. Any surpluses realized in ilie General Fund at year- end shall be used fIrSt to meet reserve policies as set forth in the Fund Balance Policies. Excess surplus will then be used for the following purposes, listed in order of priority: 'J;< Capital Replacement Programs. After General Fund reserves have been met, up to 50% of excess reserves may be set aside to provide the cash necessary to implement capital replacement programs (e.g., vehicle and equipment replacement and facility maintenance programs). Any excess surplus remaining after reserve polieies have seen met may se usea to pay aawn debt existiRg in the general fund or any other c6jlilal loans. should be carried forward to the next fiscal vear. ~ Cash Payments for Capital Improvement Program Projects. Using cash to purchase capital items that are budgeted to be purchased with the proceeds from any debt will reduce the future debt burden of the City. This strategy may be combined with retirement to reduce future debt service after performing a financial analysis to determine the greatest net present value savings. ~ Cemetery Permanent Trust Fund. After all other needs have been satisfied, excess surpluses may be transferred to the Cemetery Permanent Trust Fund that has been established to care for the Cemetery. The amounts transferred shall be deemed corpus to the Cemetery Trust fund for future earnings growth to fund Cemetery care and maintenance. ~ Riverfront Redevelopment Agency. After all other needs have been satisfied; excess surpluses may be transferred to the Riverfront Redevelopment Agency that has been established to provide infrastructure and public facility needs. Special Revenue Fund Surpluses Local Option Gas Tax Revenue Fund - A reserve will be maintained in an amount greater than or equal to fifteen percent (15%) of the annual Local Option Gas Tax Fund Expenditures budget. Excess surpluses shall first be used for the purpose of reducing debt for the Road Paving Note Payable. Discretionary Sales Surtax Revenue Fund - A reserve will be maintained in an amount greater than or equal to ten percent (10%) of the total annual Discretionary Sales Tax Fund Expenditures budget for the purpose of providing sufficient funds for unanticipated major repairs or replacements for eligible capital improvements or equipment. Discretionary Sales Tax revenues will be used in accordance with the following: I. fund annual debt service payments for which this revenue source is pledged, then; 2. fund emergency vehicles, then; 3. fund pay-as-you go eligible capital improvements, then; 4. fund equipment for the maintenance of Discretionary Sales Tax funded improvements. Stormwater Utility Revenue Fund - A reserve will be maintained in an amount greater than or equal to fifteen percent (15%) of the total annual Stormwater Utility Revenue Fund Expenditures budget for the Attachment "1" City of Sebastian, Florida Financial Policies purpose of providing sufficient funds for unanticipated major capital improvement program. (Pursuant to City of Sebastian Ordinance No. 0-04- 15, capital improvement program of the Comprehensive Growth Management Plan on furtherance of the Storm water Master Plan adopted by the City Council.) Performance Measurement Policies Establishing Performance Requirements Every two years, the City shall update the existing Strategic Plan that identifies Strategic Priorities for the following two years. Each Strategic Priority should provide three to five Key Intended Outcomes (KIOs) that measure appropriate results for each priority. Annually, each department shall develop departmental performance measures that correspond with the department programs and file them with the City Manger's Office. Goals should be related to core services of the department and should reflect stakeholder needs. The measures should be of a mix of different types, including effectiveness, efficiency, demand and workload. Measures should have sufficiently aggressive "stretch" goals to ensure continuous improvement. ~ Workload - Measures the quantity of activity for a department (e.g., number of calls responded to). ~ Demand - Measures the amount of service opportunities (e.g.. total number of calls). ~ Efficiency - Measures the relationship between output and service cost (e.g., average cost of the response to a service call). ~ Effectiveness - Measures the impact of an activity (e.g., percent of people who feel safe). Department Directors shall establish performance measures for each program within their department to monitor and project program performance. These objectives must be linked to the departmental measures they support. Supervisors shall insure that fair, objective and aggressive performance measures for each employee that directly supports program objectives and departmental measures are part of their annual review. Reporting Performance Quarterly summaries of progress on goals and objectives and departmental performance measures will be provided to the City Manager for publishing in the Council's Quarterly Budget to Actual Report. Decision Making and Analysis The City's Strategic Planning and budgeting decisions are based on a number of processes currently in place. The specific tools used are: .:. Citizen Advisory Boards - (e.g., Budget Review Committee) are teams made up of Residents and City staff to address specific concerns and provide direction and feedback. Several such advisory boards currently exist; .:. Master Planning - Specific functions and processes are included in written plans, such as the Comprehensive Plan, Storm water Master Plan, and the Airport Master Plan; .:. Fiscal Impact Model - Allocation methodology that quantifies average and marginal revenues and the costs of new development by land use type; .:. Revenue Forecasting Model - Statistical time series analysis and tracking model of major revenue sources; .:. Peiformance Measurement System - Quarterly performance evaluations and reports; .:. Capital Budgeting Tools - Present Value Payback, Net Present Value Analysis, Own/Lease Analysis, and Return on Investment (ROI) Analysis; .:. Five-Year Financial Plan - Multi-year forecasting of revenues and expenditures; .:. Ten-Year Fleet Replacement Program Equipment replacement covering the useful life of all vehicle classes; .:. Ten-Year Equipment and Maintenance Program - maintenance and replacement schedule covering the useful life of all equipment, other than vehicles; .:. Financial Trend Monitoring System - Systematic analysis of major financial indicators; Attachment "}" City of Sebastian, Florida Financial Policies Capital Improvement Program Policies Defmition Capital improvements include streets. buildings. building improvements. new parks. park expansions/improvements. airport runways., infrastructure improvements. and maior. one-time acquisitions of equipment. Proiects in the Capital Improvement PrOgram generally cost more than $50.000 and last at least five years. Alignment The City shall coordinate the development of the Capital Improvement Program budget with the development of the Strategic Plan and Operating Budget, as well as ensuring compliance with the Comprehensive Plan Capital Improvement Element. Future operating expenditures and revenues associated with new capital improvements will be projected and included in the e!leralmg badge! Capital Improvement Program Five-Year Forecasts. Project Selection All capital projects submitted for approval must be justified in terms of how the project supports the achievement of the City's Strategic Priorities. Projects are prioritized and approved based on the relevancy of the project to the City's Strategic Plan and the impact on the end stakeholder( s). Capital Improvement Budget The City shall adopt an annual Capital Budget based on the Capital Improvement Program. Future capital improvement expenditures necessitated by changes in population, real estate development, or in economic base will be calculated and included in the capital improvement budget projections. The originating department of the capital improvement project will identify the estimated costs and funding sources for each capital project proposal before it is submitted to the City Council for approval. The City shall make all capital improvements in accordance with an adopted Capital Improvement Program budget. The City will determine and use the most prudent fmancial methods for acquisition of capital improvement projects based upon market conditions at the time of acquisition. Capital Equipment Outlay Definition Capital equipment outlay is defined as capital assets purchased and/or constructed with a cost equal to or greater than $750 (with the exception of computer software cost which is equal to or greater than $5.000) with a useful life of one or more years The City will determine and use the most prudent fmancial methods for acquisition of new or replacement capital equipment, based upon market conditions at the time of acquisition. Capital Replacement Programs - The City shall establish equipment replacement and maintenance needs for at least a ttlB year five-year period and will update this projection each year. From this projection, a maintenance and replacement schedule shall be developed and implemented. Funding fer these jll'Elgmms will he made tlrreagh fimded d8Jll"eaiatien aharges te oomg departmeRts and held in s'-'''-g funds _aled for the jlUfjlese ef !laying fer replaaemllRts. .'\.dditienal funding may Funding should be obtained through year-end surpluses as identified in the Use of Surplus Policies. Maintenance programs shall be paid for on a pay-as-you-go pregram basis. Maintenance The City shall maintain all capital assets at a level adequate to protect the City's capital investment to minimize future maintenance and replacement costs. Physical Inyentory An annual physical inventory (see Fixed Asset Policies) will be conducted to ensure that the replaaement, maintenance, and Cajlital Impre'Jement Progmm projectieas are aaElW'ate, all capital assets listed in the City's financial system are accounted for. and that sufficient internal control over capital items is exercised. See Fixed Asset Policies for further information on capital purchases. Debt Management Policies Market Review The City, in conjunction with its financial Consultant, shall review its outstanding debt annually for the purpose of determining if the financial marketplace will afford the City the opportunity to refund an issue Attachment "1" City of Sebastian, Florida Financial Policies and incur less debt service costs. In order to consider the possible refunding of an issue, a Present Value savings of tbree percent (3%) over the life of the respective issue, at a minimum, must be attainable. Capital Improvements, equipment and facility proiects shall be classified into "pay-as-vou-gO" and "debt fmancing" classifications. Pav-as-vou-gO capital items will be $150.000 or less with lives of ten vears or less. Debt financing will only be used for maior, non-recurring items with a minimum of ten (10) vears useful life. Debt Financinl!: for Capital Assets 1. Short-term Borrowinl! Short-term borrowing or lease/purchase contracts should be considered for financing maior operating capital equipment when the Finance Director, along with the City's financial advisor, determines that this is the City's best financial interest. Lease/purchase decisions should have the concurrence of the appropriate department/division head. 2. Debt Issuance of Debt When the City finances capital projects by issuing bonds, it shall amortize the debt over a term not to exceed the average useful life of the project(s) fmanced. If General Obligation Bonds are issued, the City's goal will be to limit the maturity to fifteen (15) years. Capital Improvements, eqWflment ana facility J3fejects shall Be classified into "pay as you go" ana "aeBt finaneing" elassifieatians. Pay as you go capital items ','.'ill Be $150,000 or less with Ii'.'es of ten yearG ar less or r6J3lacement of existing equipment ?:here a6J3reeiation has Been flaia to a sinking fund. DeBt finaneing will only Be usea f-or major, non recurring items with a minimum often (10) years lisefu1life. The City shall confine long-term borrowing to capital improvements and projects that have useful lives in excess of twenty (20) years. When possible, the City shall use a special assessment or self-supporting financing instead of general obligation bonds, so those benefiting from the improvements will bear all or part of the cost of the project financed. Debt Service Levels Annual General Fund debt service expense, if any, will be limited to eight percent (8%) of the General Fund expenditures budget. The City will limit its total outstanding General Obligation debt, if any, to five percent (5%) of the assessed valuation of taxable property. The City will limit the amount of Variable Rate debt to fifteen percent (15%) of the total debt outstanding. Bond Ratings The City, along with its Financial Advisor, shall periodically review possible actions to maintain or improve its bond ratings by various rating agencies. The City shall maintain good communications with bond rating agencies and its bond insurers about its fmancial condition. The City shall follow a policy of "full disclosure" in its Comprehensive Annual Financial Report and bond prospectuses. Revenue Policies Revenue Projections The City shall estimate its annual revenues by objective and analytical processes. The City shall maintain a diversified and stable revenue system to the extent provided by law to insulate it from short-term fluctuations in any one- revenue source. User Fees The City shall recalculate on a bi-annual basis the full cost of selected activities currently supported by user fees and charges to identify the impact of inflation and other cost increases. The City shall set fees and user charges for the Golf Course fund at a level that fully supports the total direct and indirect costs of operation, including depreciation. Reporting and Analysis To ensure compliance with Revenue Policies, Fund Balance Policies, and Budget Policies, the City Finance Department shall prepare reports and analyses annually to monitor, project, and estimate revenue and expenditures, to wit: Attachment "1" City of Sebastian, Florida Financial Policies ~ Five-Year Forecast of Revenues and Expenditures - A planning too] prepared and used by the Finance Department to forecast and project various funds (General, Local Option Gas Tax, Discretionary Sales Tax, Golf Course and Airport); ~ Situational Analysis - Every two years, as part of the Strategic Planning Process, an analysis of the demographic, legislative, and customer requirements shall be made. Part of the project includes a "SWOT" (Strengths, Weaknesses, Opportnnities, Theat) analysis. ~ Financial Trend Monitoring System - A set of fmancial trends and ratios used as leading indicators and as a measurement of relative performance. The Finance Department shall produce this report annually. ~ Revenue Manual - A guide to the major revenue sources that indicates the source, calculation, legal requirements, and accounting guidelines. Updated annually, as necessary, by the Finance Department. ~ Reserve Analysis - The City Finance Director will annually review the reserve levels and produce a report that indicates up-to-date reserve levels as compared to policy goals. ~ Investment Portfolio Reports - A quarterly report designed to track and analyze the performance of our investment portfolio. Investment Policies Investment Management The City Finance Department shall perform a cash flow analysis of a1] funds on a regular basis. Disbursement, collection, and deposit of all funds wiI] be scheduled to insure optimum cash availability. (See Investment Po]icy.) When permitted by law, the City shall pool cash from each respective fund for investment purposes. Investments shaI] be managed by a third-party administrator to achieve optimal return on the City's investments. Investment Analysis The City shall review its investment policies established for investing surplus funds to account for changes in legislation and market conditions on an annual basis. The City shall prepare quarterly investment portfolio reports containing the overall performance of the fund.