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HomeMy WebLinkAbout09172008Specialcm ~ SE~~ HOME OF PELICAN ISLAND SEBASTIAN CITY COUNCIL AGENDA SPECIAL MEETING FY 2008/2009 MILEAGE AND BUDGET WEDNESDAY, SEPTEMBER 17, 2008 - 6:00 P.M. CITY COUNCIL CHAMBERS 1225 MAIN STREET, SEBASTIAN, FLORIDA THE PROPOSED BUDGET MAY BE INSPECTED IN THE OFFICE OF THE CITY CLERK OR ON THE CITY WEBSITE 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL 08.046 4. FINAL PUBLIC HEARING ON MILEAGE AND FY 2008/2009 BUDGET A. City Manager Announces Proposed Millage Rate of 3.3646 Mills Which is 9.21 % Less than Rolled-Back Rate of 3.7060 Mills. B. Mayor Opens Public Hearing C. Council Discussion 1-4 5. ADOPT RESOLUTION NO. R-08-17-Millage Rate for Calendar Year 2008 (Finance Director Transmittal, R-08-17) A RESOLUTION OF THE CITY OF SEBASTIAN, INDIAN RIVER COUNTY, FLORIDA, ADOPTING A PROPOSED MILEAGE RATE OF 3.3646 MILLS FOR THE CALENDAR YEAR 2008; PROVIDING FOR CONFLICTS; AND PROVIDING FOR AN EFFECTIVE DATE. 5-14 6. ADOPT RESOLUTION NO. R-08-18 -Fiscal Year 2008/2009 Budget (Finance Director Transmittal, R-08-18, Schedule "A") A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEBASTIAN, INDIAN RIVER COUNTY, FLORIDA ADOPTING THE TENTATIVE BUDGET FOR THE FISCAL YEAR BEGINNING OCTOBER 1, 2008 AND ENDING SEPTEMBER 30, 2009; MAKING APPROPRIATIONS FOR THE PAYMENT OF OPERATING EXPENSES, CAPITAL EXPENSES, AND FOR THE PRINCIPAL AND INTEREST PAYMENTS ON THE BOND AND OTHER INDEBTEDNESS OF THE CITY IN THE CITY'S GENERAL FUND, SPECIAL REVENUE FUNDS, DEBT SERVICE FUND, CAPITAL IMPROVEMENT FUNDS, GOLF COURSE FUND, AIRPORT FUND, AND BUILDING DEPARTMENT FUND AS PROVIDED FOR IN SCHEDULE "A", ATTACHED HERETO, ESTABLISHING AUTHORITY OF THE CITY MANAGER TO IMPLEMENT THE BUDGET; PROVIDING FOR SEVERABILITY; PROVIDING FOR CONFLICTS; AND PROVIDING FOR AN EFFECTIVE DATE. 15-27 7. ADOPT RESOLUTION NO. R-08-19 -City Financial Policies (Finance Director Transmittal. R-08-19) A RESOLUTION OF THE CITY OF SEBASTIAN, FLORIDA, READOPTING AMENDED FINANCIAL POLICIES GOVERNING VARIOUS AREAS OF BUDGET AND FINANCE AS PROVIDED FOR IN ATTACHMENT "A"; PROVIDING FOR CONFLICTS; AND PROVIDING FOR AN EFFECTIVE DATE. 8. ADJOURNMENT (AII special meetings shall adjourn at 10:00 pm unless extended for up to one half hour by a majority vote of City Council) HEARING ASSISTANCE HEADPHONES ARE AVAILABLE IN THE COUNCIL CHAMBERS FOR ALL GOVERNMENT MEETINGS. City Council Meetings are Scheduled for Live Broadcast on Comcast Channel 25 ANY PERSON WHO DECIDES TO APPEAL ANY DECISION MADE WITH RESPECT TO ANY MATTER CONSIDERED AT THIS MEETING WILL NEED A RECORD OF THE PROCEEDINGS AND MAY NEED TO ENSURE THAT A VERBATIM RECORD OF THE PROCEEDINGS IS MADE, WHICH RECORD INCLUDES THE TESTIMONY AND EVIDENCE UPON WHICH THE APPEAL IS TO BE HEARD. (286.0105 F.S.) IN COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT (ADA), ANYONE WHO NEEDS A SPECIAL ACCOMMODATION FOR THIS MEETING SHOULD CONTACT THE CITY'S ADA COORDINATOR AT 589-5330 AT LEAST 48 HOURS IN ADVANCE OF THIS MEETING. QIY~ ~~ ~.~ .~ HOME OF PELICAN ISLAND City of Sebastian, Florida Subject: Resolution No. R-08-17 Agenda No. ~ ~, U~(,~ (~ Adoption of Millage Rate for Calendar Year 2008. ~ ~~ Department Origin: Finance City Attorney: - Approv d f uhmittal by: City Manager City Clerk: ~ Date Submitted: September 9, 2008 For Agenda o£ September 17, 2008 Exhibits: - Resolution No. R-08-17 EXPENDITURE AMOUNT BUDGETED: APPROPRIATION REQUIRED: N/A N/A REQUIRED: N/A SUMMARY In accordance with Florida Statute 200.065 (7)(a.)(1.), a proposed millage tax rate for calendar year 2008 and for the budget year beginning October 1, 2008 and ending September 30, 2009, was adopted by City Council on September 8, 2008. The tentatively adopted millage tax rate of THREE POINT THREE SIX FOUR SIX (3.3646) MILLS is 9.21% lower than the "rolled-back" tax rate of 3.7060 mills and will provide sufficient operating revenue for the proposed budget for fiscal year 2008/2009. There have been no changes from the tentatively adopted millage tax rate to the final millage rate presented to the Council tonight for final adoption. RECOMMENDED ACTION Move to adopt Resolution R-08-17 establishing the millage tax rate of 3.3646 mills for calendar year 2008. ~~J RESOLUTION NO. R-OS-17 A RESOLUTION OF THE CITY OF SEBASTIAN, INDIAN RIVER COUNTY, FLORIDA, ADOPTING A MILEAGE RATE OF 3.3646 MILLS FOR THE CALENDAR YEAR 2008 AND ALLOCATING SAME TO THE FISCAL YEAR BEGINNING OCTOBER 1, 2008 AND ENDING SEPTEMBER 30, 2009; PROVIDING FOR CONFLICTS; AND PROVIDING FOR AN EFFECTIVE DATE. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SF,BASTIAN, INDIAN RNER COUNTY, FLORIDA, that: Section 1. MILEAGE RATE LEVY. There is hereby Levied an Ad Valorem Tax of THREE POINT THREE SIX FOUR SIX (3.3646) MILLS against all real and tangible personal property for the calendar year (January 1, 2008 through December 31, 2008) and the resulting tax revenue is hereby appropriated for the General Operating Fund of the City of Sebastian for the fiscal year beginning October, 1, 2008 and ending September 30, 2009. Section 2. ROLLED-BACK RATE. The tax rate established in Section 1. is 9.21 % lower than the computed "rolled-back" tax rate of 3.7060 mills. Section 3. CONFLICT. All resolutions or parts of resolutions in conflict herewith are hereby repealed. Section 4. EFFECTIVE DATE. This resolution shall take effect immediately upon its adoption. The foregoing Resolution was moved for adoption by Councilmember The motion was seconded by Councilmember and, upon being put into a vote, the vote was as follows: Mayor Andrea B. Coy Vice-Mayor Sal Neglia Councilmember Al Paternoster Councilmember Dale I. Simchick Councilmember Eugene Wolff 3:! The Mayor thereupon declared this Resolution duly passed and adopted this 17th day of September 2008. CITY OF SEBASTIAN, FLORIDA By: ATTEST: Sally A. Maio, MMC City Clerk Andrea B. Coy, Mayor Approved as to form and legality for the reliance by the City of Sebastian only: Rich Stringer, City Attorney ~'. - y xo~~ ~~ F~a.~cara ~s~r~a of deb Subject: Resolution R-08-18 Adoption of a Budget for Fiscal Year 2008/2009 Approved~for S~Smittal by: City Manager Exhibits: • Resolution R-08-18 • Schedule "A" r toriaa Agenda No. ~~ ~ ~' ~~ Department Origin: Finance ~~ C;JtJ' City Attorney: City Clerk: f~v`.- Date Submitted: September 9, 2008 For Agenda of: September 17, 2008 EXPENDITURE AMOUNT BUDGETED: APPROPRIATION REQUIRED: N/A N/A REQUIRED: N/A SUMMARY In accordance with Florida Statute 200.065, a tentative budget for fiscal year 2008/2009, beginning October 1, 2008 and ending September 30, 2009, was presented to the City Council on September 8, 2008. The tentative budget was adopted by the City Council as presented. There have been no changes from the tentatively approved budget to the final budget presented to the Council tonight for final adoption. RECOMMENDED ACTION Move to adopt Resolution R-08-18 establishing the budget for fiscal year 2008/2009. J U ~i RESOLUTION NO. R-08-18 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEBASTIAN, INDIAN RIVER COUNTY, FLORIDA ADOPTING THE BUDGET FOR THE FISCAL YEAR BEGINNING OCTOBER 1, 2008 AND ENDING SEPTEMBER 30, 2009; MAKING APPROPRIATIONS FOR THE PAYMENT OF OPERATING EXPENSES, CAPITAL EXPENSES, AND FOR THE PRINCIPAL AND INTEREST PAYMENTS ON THE BOND AND OTHER INDEBTEDNESS OF THE CITY IN THE CITY'S GENERAL FUND, SPECIAL REVENUE FUNDS, DEBT SERVICE FUND, CAPITAL IMPROVEMENT FUNDS, GOLF COURSE FUND, AIRPORT FUND, AND BUILDING DEPARTMENT FUND AS PROVIDED FOR IN SCHEDULE "A", ATTACHED HERETO, ESTABLISHING AUTHORITY OF THE CITY MANAGER TO IMPLEMENT THE BUDGET; PROVIDING FOR SEVERABILITY; PROVIDING FOR CONFLICTS; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City Manager has submitted a Proposed Budget for the City of Sebastian for the fiscal year beginning October 1, 2008, and ending September 30, 2009; and WHEREAS, on September 8 and September 17, 2008, the City Council conducted Public Hearings on the Proposed Budget. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEBASTIAN, INDIAN RIVER COUNTY, FLORIDA, that: Section 1. The City Manager's Proposed Budget is hereby adopted for the Fiscal Year beginning October 1, 2008 and ending September 30, 2009. Section 2. The amounts shown on the attached Schedule "A" are hereby appropriated out of the Treasury of the City, including any revenues accruing to the City available for purposes of the City's budgetary accounts. Section 3. The City Manager is hereby authorized and directed to proceed with the implementation of the service programs and projects provided for in the budget. Such implementation is to be consistent with the provisions of the City Code of Ordinances and policies established by the City Council. Section 4. The City Manager is authorized to make budget adjustments within budgetary accounts, as he deems appropriate. He is further authorized to make budget adjustments between budgetary accounts when necessary to implement programs, ~. projects, and expenditures authorized by the City Council. All other budgetary adjustments will require prior approval by the City Council. Section 5. If any clause, section, or other parts of this Resolution shall be held by any Court of competent jurisdiction to be unconstitutional or invalid, such unconstitutional or invalid part shall be considered as eliminated and shall in no way affect the validity of the other provisions of this Resolution. Section 6. All Resolutions or parts of Resolutions in conflict herewith are hereby repealed to the extent of such conflict. Section 7. This Resolution shall become effective October 1, 2008. The foregoing Resolution was moved for adoption by Councilmember The motion was seconded by Councilmember and, upon being put into a vote, the vote was as follows: Mayor Andrea B. Coy Vice-Mayor Sal Neglia Councilmember Al Paternoster Councilmember Dale I. Simchick Councilmember Eugene Wolff The Mayor thereupon declared this Resolution duly passed and adopted this 19th day of September, 2008 CITY OF SEBASTIAN, FLORIDA By: Andrea B. Coy, Mayor ATTEST: Sally A. Maio, MMC City Clerk Approved as to form and legality for the reliance by the City of Sebastian only: Rich Stringer, City Attorney ATTACHMENT TO RESOLUTION R-07-38 SCHEDULE "A" BUDGET SUMMARY FISCAL YEAR 2008/2009 GENERAL FUND REVENUES: 001501 Taxes and franchise fees 001501 Licenses and permits 0015 O 1 Intergovernmental 001501 Charges for services 001501 Fines and forfeits 001501 Miscellaneous 001501 Transfers in 001501 Restricted cash balance carryforward Total Revenues EXPENDITURES: 010001 City Council 010005 City Manager 010009 City Clerk 010010 City Attorney 010020 Finance 010021 Management Information System 010035 Human Resources 010041 Police Administration 010043 Police Patrol Division 010047 Police Detective Division 010048 Police Support Services 010049 Police Dispatch Unit 010051 Engineering 010053 Stormwater Utility 010052 Roads and Maintenance 01004 Garage 010056 Facilities Maintenance 010057 Parks and Recreation 010059 Cemetery 010080 Growth Management 010045 Code Enforcement Division 010099 Non-departmental Total Expenditures $ 7,958,921 55,200 2,052,529 327,301 59,600 490,759 849,000 81,400 $ 11,874,710 $ 54,065 269,986 321,087 239,086 401,990 266,344 176,553 666,255 2,491,553 714,798 307,179 503,931 464,968 1,286,528 790,037 210,111 277,264 1,112,395 166,187 338,264 141,614 674,515 $ 11,874,710 Ci ATTACHMENT TO RESOLUTION R-07-38 SCHEDULE"A" BUDGET SUMMARY FISCAL YEAR 2008/2009 SPECIAL REVENUE FUNDS LOCAL OPTION GAS TAX FUND 120010 REVENUES Taxes $ 650,000 Miscellaneous 70,047 Appropriation from prior year 34,753 Total Revenues $ 754,800 120051 EXPENDITURES Operating $ 204,800 Debt service 300,000 Transfers out 250,000 Total Expenditures $ 754,800 DISCRETIONARY SALES TAX FUND 130010 REVENUES Taxes $ 2,400,000 Miscellaneous 78,000 Appropriation from prior year 789,957 Total Revenues $ 3,267,957 130051 EXPENDITURES Transfers out $ 3,267,957 Total Expenditures $ 3,267,957 RECREATION IMPACT FEE FUND 160010 REVENUES lmpact fee $ 100,000 Miscellaneous 35,000 Restricted cash balance carryforward 40,000 Total Revenues $ 175,000 160051 EXPENDITURES Transfers out $ 175,000 Total Expendihires $ 175,000 STORMWATER UTILITY FUND 163010 REVENUES Stormwater utility fee 850,000 Miscellaneous 47,200 Restricted cash balance carryforward 46,435 Total Revenues $ 943,635 163051 EXPENDITURES Operating $ 3,500 Transfers out 940,135 Total Expenditures $ 943,635 l L) z ATTACHMENT TO RESOLUTION R-07-38 SCHEDULE"A" BUDGET SUMMARY FISCAL YEAR 2008/2009 SPECIAL REVENUE FUNDS -CONTINUED LAW ENFORCEMENT FORFEITURE FUND 190010 REVENUES Fines and forfeits Miscellaneous Restricted cash balance carryforward Total Revenues 190051 EXPENDITURES Operating Total Expenditures G.R.E.A.T. PROGRAM FUND 191010 REVENUES Intergovernmental Revenue Total Revenues 191051 EXPENDITURES Operating Total Expenditures COMMUNITY REDEVELOPMENT AGENCY FUND 163010 REVENUES Tax Increment -Sebastian Tax Increment -Indian River County Miscellaneous Total Revenues 163051 EXPENDITURES Operating Transfers out Unappropriated Total Expenditures DEBT SERVI CE FUNDS DISCRETIONARY SALES SURTAX REVENUE BONDS 230010 REVENUES Miscellaneous Transfers in Total Revenues 230051 EXPENDITURES Operating Debt service Total Expenditures 8,000 3,000 4,500 $ 1 S,S00 $ 15,500 $ 1S,S00 $ - $ - $ - 277,000 252,239 26,000 $ SSS,239 $ 103,100 60,000 392,139 $ SS5,239 1,974 1,032,957 $ 1,034,931 $ 300 $ 1,034,631 $ 1,034,931 3 ' ' ATTACHMENT TO RESOLUTION R-07-38 SCHEDULE"A" BUDGET SUMMARY FISCAL YEAR 2008/2009 (2 STORMWATER UTILITY REVENUE BONDS 263010 REVENUES Miscellaneous Transfers in Total Revenues 263051 EXPENDITURES Debt service Total Expenditures 875 440,135 $ 441,010 $ 441,010 $ 441,010 ATTACHMENT TO RESOLUTION R-07-38 SCHEDULE"A" BUDGET SUMMARY FISCAL YEAR 2008/2009 CAPITAL PROJECTS FUNDS REVENUES Transfer from Local Option Gas Tax Fund - Transfer from Discretionary Sales Tax fund 2,235,000 Transfer from Recreation Impact Fee Fund 175,000 Transfer from Stormwater Fund 125,000 Transfer from Cemetery Trust 50,000 Airport Operating Revenues 290,000 Grants 1,160,000 Total Revenues $ 4,035,000 EXPENDITURES Transportation 3,000,000 Recreation facilities projects 175,000 Stomlwater Improvements/Physical Environment 475,000 Public Safety 385,000 Debt service $ - Total Expenditures $ 4,035,000 ENTERPRISE FUNDS GOLF COURSE FUND 410010 REVENUES: Charges for services Miscellaneous revenues Restricted cash balance carryforward Total Revenues EXPENSES: GOLF COURSE ADMINISTRATION 410110 Personal services Operating expenses Debt service Total Administration GOLF COURSE GREEN DIVISION 410120 Operating expenses Capital Outlay Total Golf Course Green Division GOLF COURSE CARTS DIVISION 410130 Personal services Operating expenses Capital Outlay Total Golf Course Carts Division Total Golf Course Expenses 5 $ 1,649,610 33,423 18,750 $ 1,701,783 $ 302,903 346,047 304,990 $ 953,940 572,350 11,750 $ 584,100 83,398 73,345 7,000 $ 163,743 $ 1,701,783 ATTACHMENT TO RESOLUTION R-07-38 SCHEDULE "A" BUDGET SUMMARY FISCAL YEAR 2008/2009 AIRPORT FUND 450010 REVENUES Charges for services $ 404,465 Miscellaneous revenues 4,095 Total Revenues $ 408,560 450110 EXPENSES: Personal services $ 232,065 Operating expenses 156,495 Transfer out 20,000 Total Expenses $ 408,560 BUILDING DEPARTMENT 480010 REVENUES Charges for services $ 503,207 Miscellaneous revenues 33,000 Total Revenues $ 536,207 480110 EXPENSES: Personal services $ 398,841 Operating expenses 137,366 Total Expenses $ 536,207 TOTAL BUDGET SUMMARY GENERAL FUND SPECIAL REVENUE FUNDS DEBT SERVICE FUNDS CAPITAL PROJECT FUNDS ENTERPRISE FUNDS TOTAL BUDGET FOR ALL FUNDS $ 11,874,710 5,712,131 1,475,941 4,035,000 2,646,550 $ 25,744,332 L-~ 6 i cm o~ _ J~ ~ r.--~ EE{3l~E (3~ PELIC.Ai'd FSLAC~It3 (~itv of finhactian Flnrirla Subject: Resolution No. R-08-19 Readopting Agenda No. (; ~ , ~ ((e C% Amended Financial Policies Department Origin: Finance Cw~ A roved for Submittal b : Ci Mana er pP Y h' g J Cit Attorne Y Y City Clerk: ~,.t~r~- 2008 Date Submitted: September 9 , For Agenda of: September 17, 2008 Exhibits: • Resolution R-08-19 Readopting Financial Policies Governing Various Areas of Budget and Finance. • Attachment "A" -Financial Policies EXPENDITURE REQUIIZED: AMOUNT BUDGETED: N/A APPROPRIATION REQUIl2ED: N/A N/A SUMMARY Pursuant to City of Sebastian Resolution 06-20, the financial policy shall be readopted annually. Although there are no changes made to the policies, it should be noted that for fiscal year 2008/2009, the City will be suspending the Fund Balance Policies regarding the Operating Contingency Account and the Capital Contingency Account. This is expected to be a temporary measure to allow the budget to be balanced this year with the decline in revenues as a result of Amendment #l and the economic slowdown. RECOMMENDED ACTION Move to adopt Resolution R-08-19. 1'j l~ RESOLUTION NO. R-08-19 A RESOLUTION OF THE CITY OF SEBASTIAN, FLORIDA, READOPTING AMENDED FINANCIAL POLICIES GOVERNING VARIOUS AREAS OF BUDGET AND FINANCE AS PROVIDED FOR IN ATTACHMENT "A"; PROVIDING FOR CONFLICTS; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the Government Finance Officers Association of the 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 AMENDED FINANCIAL POLICIES: The City Council of the City of Sebastian hereby readopts amended Financial Policies governing the Operating Budget, Financial Reserves, Use of Surplus, Performance Measurement, Capital Improvement Program, Debt Management, Revenue, and Investment. SECTION 2. Fund Balance Policies regarding the Operating Contingency Account and the Capital Contingency Account will be suspended for Fiscal Year 2008/2009. SECTION 3. All resolutions or parts of resolutions in conflict herewith are hereby repealed. SECTION 4. This Resolution shall take effect upon adoption. The foregoing Resolution was moved for adoption by Council Member Motion was seconded by Council Member and, upon being put to a vote, the vote was as follows: Mayor Andrea Coy Councilmember Sal Neglia Councilmember Al Paternoster Councilmember Dale I. Simchick Councilmember Eugene Wolff 17 The Mayor thereupon declared this Resolution duly passed and adopted this 19th day of September, 2008. CITY OF SEBASTIAN, FLORIDA By: Andrea Coy, Mayor ATTEST: Sally A. Maio, MMC City Clerk Approved as to Form and Legality for Reliance by the City of Sebastian Only: By: Rich Stringer, City Attorney Ih, Attachment "A" 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 the city is in a solid financial condition at all times. This can be defined 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 financial 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 fiords 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, Building Maintenance, 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 Community Redevelopment Agency (CRA) Fund of the city. This assessment will be based on the total tax increment ~9~ Attachment "A" City of Sebastian, Florida Financial Policies 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. Pursuant to Ordinance OS-16, stormwater utility fees can be utilized to fund the General Fund stormwater operation. The amount being utilized should be approved by the city council through the budget process. 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.) 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 amlual 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 governmental funds (General, Special Revenue, Debt Service Funds, and capital project funds) shall be prepared on a modified accrual basis of accounting. This means that unpaid financial obligations, such as outstanding purchase orders, are immediately reflected as encumbrances when the cost is estimated, although the items may not have been received yet. However, in most cases revenue is recognized only after it is measurable and actually available. The budgets for the proprietary funds -Golf Course, Airport and Building Department -are prepared using the accrual basis of accounting. Proprietary funds also recognize expenses as encumbered when a commitment is made (e.g., through a purchase order). Revenues, on the other hand, are recognized when they are obligated to the City. Purchase orders for goods and services received prior to the end of the current fiscal year will be eligible for payment immediately following the close of the fiscal year. Encumbrances for all other purchase orders, excluding the capital projects funds purchase orders, will automatically lapse. The Comprehensive Annual Financial Report (CAFR) presents the status of the City's finances on the basis of Generally Accepted Accounting Principles (GAAP). Since FY 2001, the CAFR has been prepared in compliance with Governmental Accounting Standards Board (GASB) Statement 34 requirements. The CAFR shows fund expenditures and revenues on both a GAAP basis and budget basis for comparison purposes. In most cases, this conforms to the way the City prepares its budget with the following exceptions: 1. Principal payments on long-term debt within the enterprise funds are applied to the outstanding liability on a GAAP basis as opposed to being expended when paid on a budget basis. 2. Capital outlay within the proprietary funds are recorded as assets on a GAAP basis and expended on a budget basis. 3. Depreciation expense is not budgeted as an expense. 4. Inventory is expensed at the time it is used. 5. Compensated absences liabilities that are expected to be liquidated with expendable available financial resources are accrued as earned by employees on a GAAP basis as opposed to being expended when paid on a budget basis. zo 2 Attachment "A" City of Sebastian, Florida Financial Policies 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 timely budgetary recommendations and adjustments to make sure no budgetary expenditures are in excess of appropriations at fiscal year 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. 2. Uses of contingency appropriations 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 aFive-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 improvement plan. Fund Balance Policies On an annual basis, after the year-end audit has been completed, but no later than April 1, 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 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 twenty- five percent (25%) of the annual General Fund Expenditures budget. This amount approximates three months or 90 days of working capital. 3 Z/ Attachment "A" City of Sebastian, Florida Financial Policies 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 claim deductibles. All retirement programs, Police Pension, CWA/ITU and 401a 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 table listed below is a summary of all reserve and contingency requirements for the General Fund. Reserve Descri tion Re uirement Workin Ca ital Reserve 25% of annual General Fund Ex enditures bud et Emer ency Reserve $350,000 Pro ert and Casualty claims Reserve $100,000 Capital Equipment Replacement Reserve 50% of the current year's operating surplus (revenues in excess of ex enditures) General Fund Operating Contingency (for bud et u ose onl) 1.5% of the General Fund total expenditures budget, less debt service, interfund transfers and ca ital ex enditures Capital Contingency (for budget purpose only) 0.5% of the General Fund total expenditures budget, less debt service, interfund transfers and ca ital ex enditures All retirement programs 100% Funded per independent actuarial analysis performed at a minimum of every two years, or as needed Use of Surplus Policies Use of Surpluses It is the intent of the 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 the 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: ~ 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 should be carried forward to the next fiscal year. ~Z 4 Attachment "A" City of Sebastian, Florida Financial Policies - 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: 1. 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 purpose of providing sufficient fiords 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 Stormwater Master Plan adopted by the City Council.) Performance Measurement Policies Establishing Performance Requirements Annually, each department shall develop departmental performance measures that correspond with the department programs and file them with the City Manager'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. 5 z~ Attachment "A" City of Sebastian, Florida Financial Policies 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 Plamzing -Specific functions and processes are included in written plans, such as the Comprehensive Plan, Stormwater 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; •:• Performance 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; Capital Improvement Program Policies Definition Capital improvements include streets, buildings, building improvements, new parks, park expansions/improvements, airport runways, infrastructure improvements, and major, one-time acquisitions of equipment. Projects 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 plan 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 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). Z~f 6 Attachment "A" City of Sebastian, Florida Financial Policies Capital Improvement Plan The City shall adopt an annual Capital Budget based on the Capital Improvement Plan. 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 plan 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 Plan. The City will determine and use the most prudent financial 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 financial 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 afive-year period and will update this projection each year. From this projection, a maintenance and replacement schedule shall be developed and implemented. Funding should be obtained through year-end surpluses as identified in the Use of Surplus Policies. Maintenance programs shall be paid for on apay-as-you-go 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 Inventory An annual physical inventory (see Fixed Asset Policies) will be conducted to ensure that 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 and incur less debt service costs. In order to consider the possible refunding of an issue, a Present Value savings of three percent (3%) over the life of the respective issue, at a minimum, must be attainable. Capital hprovements, equipment and facility projects shall be classified into "pay-as-you-go" and "debt financing" classifications. Pay-as-you-go capital items will be $150,000 or less with lives of ten years or less. Debt financing will only be used for major,_non-recurring items with a minimum of ten (10) years useful life. 7 ZS Attachment "A" City of Sebastian, Florida Financial Policies Debt Financing for Capital Assets 1. Short-term Borrowing Short-term borrowing or lease/purchase contracts should be considered for financing major 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. 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) financed. If General Obligation Bonds are issued, the City's goal will be to limit the maturity to fifteen (15) years. 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 financial 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. z~ 8 Attachment "A" City of Sebastian, Florida Financial Policies 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 the adopted financial policies, the City Finance Department shall prepare analyses in conjunction with the annual budget process to assist department/division with budget projections. The analyses include the following= - Five-Year Forecast of Revenues and Expenditures - A planning tool prepared and used by the Finance Department to forecast and project various funds (General, Local Option Gas Tax, Discretionary Sales Tax, Golf Course, Building, and Airport); - Financial Trend Monitoring System - A set of financial trends and ratios used as leading indicators and as a measurement of relative performance. - Revenue Manual - A guide to the major revenue sources that indicates the source, calculation, legal requirements, and accounting guidelines. Updated annually and included in the annual budget document 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 Policies Investment Management The City Finance Department shall perform a cash flow analysis of all funds on a regular basis. Disbursement, collection, and deposit of all funds will be scheduled to insure optimum cash availability. (See Investment Policy.) When permitted by law, the City shall pool cash from each respective fund for investment purposes. The City's Finance Director shall manage all City investments with the assistance from athird-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. 9 27