RES 2009-30 UPDATED FINANCIAL AND BUDGET POLICIESRESOLUTION N. 2009-0
RESOLUTION of the City of Bainbridge Island, Washington, establishing a consolidated -set
of updated financial and budget policies, -supplementing, superseding, amending ars re-
affirming
-
affirming certain policies adopted by the City during or prior to 200 9.
WHEREAS, the City CQuncil (the "Council") is responsible for setting financial policy for the City of
Bainbridge Island (the "City"); and
WHEREAS, the Council wishes to update., rescind, arnend and/or re -affirm sever t financial and
budgetary policies that were initially adopted by the City during or prior to- 2009; and
WHEREAS, the Council wishes to establish ars ongoing consolidated set of Financial and Budget
Policies (the "Budget Policies") to be administered by the City Administration, the "Administration")
and to guide Council action on an ongoing basis.
THE CITY COUNCIL CI of THE CITY OF BAINBRIDGE ISLAND] DOES RESOLVE AS
FOLLOWS:
SECTION I. SGT POLICIES
1.1 Adoption
There is hereby established a consolidated set of Budget Policies, in accordance with this resolution.
Such Budget Policies shall be documented iiia consolidated manner for ease of reference by City
Council, Administration arra the public. Once adopted, the Budget Policies replace and supersede all
budget, finance and debt policies previously adopted by the Council.
1.2 Review and Amendment
The Council's Finance arra Personnel Committee (Tinance Committee" shall, with the support of the
Administration, review the Budget Policies not less frequently than annually, and shall recommend any
necessary or appropriate ar endrn nts to the Council, for approval. by simple majority. In 2010 and later
years, the Finance Committee shall, by March 3 1, recommend any proposed. amendments, and the
Council shall act on any such proposals by April 30. Promptly after Council approval of any
amendment of the Budget Policies, the Administration shall publish restated pages of the Budget
Policies incorporating any such amendments
SECTION 2. APPLICABLE LAS CITE' CODE AND COMPREHENSIVE PLAN
2.1 RCW Chapter 35A.3
Chapter 35A.33 of the Revised Code of Washington "RCW" , pertaining to budgets for Code Cities, is
hereby incorporated by reference, as it may be amended from time to time.
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2.2. BIMC Chapter 2.82 -- Cily Budget Process
(a) City Budget Process: Effective with the biennial budget of 2009-10, and thereafter, the
ro i io s'f Chapter 2.82 of the Bainbridge Island Municipal Code ("BIMU") that contemplate
.rt
an annual budget graces shall be superseded by'a biennial budget proc6ss.,
(b) Even Years: In each even -numbered calendar year, starting in 2008, the Council shall
adopt budget for the following year and endorse a budget for the next ensuing even -numbered
year.
(c) odd Years: In each odd -numbered calendar year, starting in 2009, the Co it shall, with
the advice and assistance of the City Manager, review and reprise the previously endorsed budget
and shall adopt, not later than December 31 t, a budget for the ensuing year.
(d) Budget Calendars: By January 3 1 of each year, starting in 201 , the Council, with the
advice and assistance of the City Managerl shall approve an annual calendar or schedule for the
pro cess .of preparing and -adopting any Capital Facilities Plan update, and the one or two-year
budget (whichever is applicable under the biennial cycle. Such calendar may be amended. at any
time by the Council, and the current version of any such calendar or schedule shall be considered
to be included in the Budget Policies by reference.
2,3. Applicable Provisions of BIMC Inco orated by Reference
These Budget Policies incorporate by reference the provisions of the City's Municipal Code IMC
that are applicable to the budgetary and financial policies and practices of the City.
2.3. Applicable Provisions of BIMC Inco orated by. Reference
These Budget Policies incorporate by reference the provisions of the City's Municipal Code IMC
that are applicable to the budgetary and financial policies and practices of the City.
2.4. Comprehensive Plan — Capital Facilities Goals and Policies
The Capital Facilities Goals and Policies that are stated in the City's Comprehensive Plan, as amended
from time to time, are hereby included 'in full in the Budget Policies.
SECTION 3: - MONITORING, ANALYZING AMID PR JECTING
3.1 Monthly,.Quarterlyand Mid -Year Budget Reports
On a monthly basis, the Administration shall make available to the Finance Committee a report ofthe
ear--to-date revenues and expenditures hough month-end of the reported month, against budget, and
shall report to the Finance Committee any material trends and unexpected developments. The
Administration shall furthermore report monthly on the year-to-date status (through the end of the
reported month) and the annual forecast of cash inflows and outflows, including a projecti n of end-of-
year
nd- f -
ye r cash balances. Moreover, starting with the second quarter of 2009, the quarterly end -of -month
reports for March, June, September and December shall be more detailed and shall include a variance
report on the City's larger capital projects. The mid -year report though June 30 shall provide
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comprehensive details and summaries and shall be accompanied by the Administration" s mid -year
report. Each such report for the year-to-date through a reporting month shall bePresented to the ' Finance
Committee not later than the it Finance Committee meeting occurring in the second month following
the reporting month.
.2 Financial Capacity Analysis
(a) In General, Based on the schedule stated -in the annual budget calendar approved by
Council, the Administration shall deliver to Council a 10 -year inanci l Capacity Analysis,
depicting i detailed revenue and expenditure forecasts for the current year, and also including
(H)the three prior years, and(iii) projections for the ensuing six future years. The.
Administration shall present to Council one or more updated Financial Capacity Analysis
versions not later than the dates stated on the Co cii's .budget calendar. The purposes of the
Financial Capacity Analysis shall bei to enable Council to' utilize this data to analyze and
evaluate the long-term fiscal impacts of up to date cash forecasts and eurrerit budget choices,
decisions. and policy options, and ii to meet the requirements of Growth Management Act for
Financial Capacity. Analysis to accompany the Capital Facilities Plan."
(b) Conservative Forecasts. For each Fixrancial Capa-city Analysis, the Admin'i'stration shall
prepare each such analysis as follows: i underlying economic and financial assumptions shall
be reasonable and shall take into. account an appropriately chosen set of inflation factors and an
appropriate set of economic proj ctins from recognized' governmental or professional bodies,
and(ii) all projections of revenues for fat re years, and all adjusted estimates for the current
year, will be conservatively forecasted. The Administration's chosen assumptions for revenues,
expenditure inflation factors and economic measures shall be disclosed to the Council. The
City's revenue estimates will be realistically forecasted and will employ revenue policies which
prevent undue or unbalanced reliance on any one revenue source, The City's budget amendment
process small be used to adjust- speculative revenue estimates when they become certain and
measurable,. City tax --supported funds revenue forecasts shall not assume growth rates that
exceed general inflation (Seattle Tacoma CPI - J for December of the prior year). Real growth
that exceeds inflation .will be recognized through the City's, budget amendment process,
SECTION 4, RESERVES
4.1 Emeraencv Rainv Dav Reserve
Section l of Resolution No. 2008-01 1, establishing lishing a.n Emergency Rainy flay Reserve within the City's
General Fund, and providing for the budgetary target amount for such a reserve, is hereby included in
the Budget Policies. Effective January 1, 2009, it is the Council's policy that the Emergency Rainy Day
Reserve shall be treated as a Restricted Reserve, which shall ideally be funded as and when resources,
such as from the sale of surplus property, brae available.
4,2 Contingency.Reserve
Section 2 of Resolution No. 200 8-0 1, establishing a Contingency Reserve within the City's General
Fund, and providing for the funding of such a reser e, is hereby included in the Budget Policies. When
adopting a budget, the Council shall determine whether or not there are adequate revenues to support a
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Contingency'Reserve, and, if so, the amount of the Contingency Reserve shall not he greater than the
limitatio�is imposed by Resolution 2008-01 and State law.
43 Reserves — Genera
(a) Restricted Reserves: Each restricted reserve shall be accounted f r on the City's hooks,
and may not be obligated or expended by the Administration in the absence of a vote o
Council. Thetity's General Fund restricted reserve -(as of 2009) are:
• General Fund: Emergency Rainer Day 'Reserve
• General Fund: Police Investigations Reee
• General Fund: Marine Operations Reserve
• General Fund; Su rematsu Sinking Fund
General Fund: Public Arts
fib) Designated Reserve: Each designated reserve will be a budgetary allocatiort that is
accounted for on the City's books, and may be expended by the Administration sollr for the
designated purpose for which the reserve i
■ Development Services Fund
Clearing Fuad
f General Long Terre Debt Fuad
■ LID Capital Construction Fuad
■
LID Bond Fuad
Tax -Supported Special Funds: The subfunds of which shall be the following:
■ Civic Improvement Fund (LTAQ
■ .Affordable Housing Fund
■ Expendable Trust Fund
■
Agency Fuad
Water Utility Fund
o Sever Utility Fund
9 + :SSWM Utility Fund
5.2 In General. Resolutions 2006-3 5 and 2006-41 are hereby rescinded and are replaced bythis
Section 5. Statements in this subsection 5.1 apply to :both the tax --supported and utility funds of the City:
(a) The City shall use major one-time revenue to fund capital improvements, debt reductions,
contingency funds or reserves. The use of one-time revenues t fund operating expenditures is
discouraged.
(b) The City shall maintain a structure for all fees and charges where the beneficiary of the
service pays the cost of that service except to the extent that the City Council has determined that
provision of the specific service in question provides a general public benefit. The Council shall
review, at least ar ually, thedr inistration's recommended policy for the allocation of City
costs to various funds.
(c) The City is authori ed -to' allocate up to % of unrestricted revenues of the tax -supported
.d respective utility funds for replacement of capital equipment as deemed appropriate by the
Administration.
,2 For Utility Punas
a. In each Ofthe three Utility Funds, the working capital will be equal to tree months of
operating expenditures for the corresponding fund.
(b) The City will maintain water, sewer and storinwater utility gates ad uate to ensure that
each of the three utility funds is frilly self-supporting.
5.3 For Tax -Supported, Funds
(a) Departmental revenues of the tax -supported funds shall be considered unrestricted
revenue of the City — subject to any applicable legal restriction, and subject to any applicable
provision of the Budget Policies, that may apply to a particular revenue source.
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(b) Revenues from the City Parking Lot and Commercial Parking Lot Tax shall be treated as
revenues of the Streets Fund.
4
(c)
Annually, the City shall ideally to the extent revenues pennit alloc .te at least $800,000
4.
(in 2009 dollars, adjusted for inflation thereafter) to help fund roads preservation projects. For .....
yeas after 200 9, the Wash OT inflation factor will be used to adjust for inflation.
(d) RET revenues shall be first applied to current capital debt service service end then, to
the extent available, to current capital projects.
(e) and Development Services &DS) revenucs shall be'maintained at a level
that contributes no less than % expenditures n planning basis for the & S Fund.
(t) Organizations that are not part of the City, but which receive finding from the City for
contractual services, shall not have their appropriation carried forward from year to year unless
expressly authorized under the terns of a contract approved by Council. Contractual documents
may include inter -local agreements, memorandums of agreement, contracts or othef forms of
agreeem nt, Except as expressly stated contractually to the contrary, annual review and
reauthorization by the Council of any such funding shall be required.
SECTION 6, EXPENSES PERTAINING o PERSONNEL
6.1 ; City Staffing _Levels
(a) Authorized Limit on Full --Time Eguivalent Emplftyees. The City's overall
authorized level ofstaffing shall be n reater than 152 full-time equivalents in 2008, 144
in 2009 and 127 in 2010.
(b) I1 onitorin , The Administration shall include a report of the number of FTEs, by
Department, in each month's regular year-to-date revenue and expenditure report to the Finance
Committee. For each position vacated year-to-date. and each carry-over vacancy to be re -filled,
the Administration shall report whether the position is intended to be re -filled, and, if so, whether
from internal or external applicants.
(c) CityIan. er's Discretion to Approve Part-time Service: Nothing in the
assumptions that underly the Administration's estimates of full-time a uivaleri t employees
p y
for a budget year shall eliminate the City Manager's discretion to encourage dor agree
to one or more employccs performing on a part -tine basis (e.g. 0% or other p.-ercentage
rather than a hall -time basis during part or all of a budget year.
6.2 Compensation and Benefits
(a) Prior Compensation and Benefits.., Policies: Except as pr viced below, the
compensation and benefit policies approved by the Council in 2007 or any prix gear) are
rescinded.
b Comparison of Compensation and Benefits: In 2010, the City A�d inistiration shall
compare the cash compensation, and the value of benefits, for City employee positions to
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the compensation and benefit levels of approximately a dozen comparable cities In
Washington, to provide data for potential compensation and benefit policies which may be
adopted by the Council from time to time.
(c) Training and Staff DevelopmentExpenses: The City is authorized Wallocate up t.o 0.5%.
of unrestricted revenues of the tax -supported and respective utility f nds t 'professional tralrri
and development for staff as deemed appropriate by the Administration.
SECTION '7. DEBT
7.1 Debt Polies
The City's Debt Policy, as it may be amended from time to time, is hereby included in the Budget
Policies.
SECTION 8,, STRATEGIC PRIORITIES
.1 Strategy
The budget shall be built on an understanding of the Priorities of Go ennn nt, and a commitment by the
Council .and Administration to an ongoing process of identifying and implementing strrategic priorities of
government as described in Benchmarking Critical Recommendations 2 and 3, end the Strategic
Priorities section of these Budget Policies).
SECTION 9, INVESTMENT
9.1 IMC: The provisions of BIMC 3.12 (Investments) are incorporated by reference.
SECTION 10. BANKING AND MONEY MANAGEMENT
10,1 Safet : The City shall engage in relationships, and conduct its business, with one or more banks,
repositories of public pooled funds, and financial institutions in a manner that avoids concentrating City
balances in a way that may expose the City to material losses in the event of an adverse development
affecting any bank or financial institution in which City assets are held.
10.2 Money Mma ement; The City Administration' shall seek to form relationships with banking and
0'
financial institutions that offer the City efficient and effective tools and technologies to manage and
trach transactions and balances.
PASSED by the City Council this Whday f November 2009.
APPROVED by the Mayor this 19'h clay of November 2009.
Christopher Snow, Mayor
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ATTEST/AUTHENTICATE:
Rosalind. ; Lasoff, CiClerk
FILED WITH THE CI'T'Y CLERK:
PASSED BY THE CITY COUNCIL:
RESOLUTION NO.:
November 1, 2009
November 1 5 X009
2009-28
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