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HomeMy WebLinkAboutO-12276J-01-1047 9/3/02 7/22/03 SE ORDINANCE NO. 12276 AN ORDINANCE OF THE MIAMI CITY COMMISSION AMENDING CHAPTER 18, ARTICLE IX/DIVISION 2 ENTITLED "FINANCIAL POLICIES" TO CLARIFY AND EXPAND THE FINANCIAL INTEGRITY PRINCIPLES; CONTAINING A REPEALER PROVISION, A SEVERABILITY CLAUSE AND PROVIDING FOR AN IMMEDIATE EFFECTIVE DATE. WHEREAS, the City recognizes it has made improvements in its financial position through adherence to financial "best practices;" and WHEREAS, the City has formalized a series of financial principles, many of which are currently utilized by the City, which will serve as the basis for governing the City's finances in the future; and WHEREAS, these principles are crucial to assuring potential investors. that investments in the City are safe as the City plans to reenter the bond market; and 12276 WHEREAS, the City desires to clarify and expand the financial integrity principles it had adopted and implemented; NOW, THEREFORE, BE IT ORDAINED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1. The recitals and findings contained in the Preamble to this Ordinance are adopted by reference and incorporated as if fully set forth in this Section. Section 2. Chapter 18, Division 2, entitled "Financial Integrity Principles," is amended in the following particulars: 1/ "Chapter 18 FINANCE ARTICLE IX. FINANCIAL POLICIES DIVISION 2. FINANCIAL INTEGRITY PRINCIPLES Sec. 18-541. Established; implementation; review; reports. Financial Integrity Principles and Policies to assure and maintain financial integrity in the City are hereby established and shall be implemented immediately upon adoption of this Ordinance. 1� Words and/or figures stricken through shall be deleted. Underscored words and/or figures shall be added. The remaining provisions are now in effect and remain unchanged. Asterisks indicate omitted and unchanged material. Page 2 of 14 12276 2`' The Financial Integrity Principles as set forth herein shall be reviewed and updated as necessary, at least every three years.. The City's Internal Auditor shall be responsible for preparation of a written report to be transmitted to the Mayor and the members of the City Commission by July 1 of each year as to compliance with the principles and policies set forth in this Division. The report shall include recommendations for additional policies or actions, to be considered for action after reviewing the latest annual audit and management letter comments. The City's Finance Director shall prepare a report on the status of these Principles prior to the issuance of anv bonded debt for the City of Miami. Sec. 18-542. The Financial Integrity Principles. The following Financial Integrity Principles are adopted: (1) Structurally Balanced Budget. The City shall maintain a structurally -balanced budget. Recurring revenues will fund recurring expenditures. Nen reeurramn�� i�even,aes and budget surpluses shall replenish _ _-ereleveis, sappert eutst-anding liabilities and ei nen— rTeiirri ng upend i tom^ s, in the ei=der set f. r-th h (2) Estimating Conference Process. The City shall adopt budgets and develop its long and short-term financial and capital improvement plans containing estimates developed utilizing a professional estimating conference process. Conference principals shall include, but not be limited to: one principal from the Budget Office; one principal from the Finance Department and two non -staff principals with public finance expertise. (3) Interfund Borrowing. The City shall not borrow or use internal fund transfers to obtain cash from one fund type or reserve to fund activities of another fund type or reserve unless such use is deemed lawful, Page 3 of 14 12276 and unless the' Estimating Conference has determined that (a) the funds to be ber-rewed loaned will not be needed during the lending period, and (b) the funds for repayment will be available within a two-year period. Any actions taken to borrow funds under these conditions must be separately presented to and approved by the City Commission and the term of such borrowing shall not extend beyond the last day of the subsequent fiscal year. Recognizing that some programs are funded by grants or other entities on a reimbursement basis, the City shall apply` for such reimbursements on a timely basis to minimize the period that City funds are used as float. In the event loans/float for these reimbursements extend beyond the end of a fiscal year, such reimbursements shall be reflected as receivables and net d aspa_'- ef the annual budget preeess in the annual financial statements to the extent allowed under Generally Accepted Accounting Principles. The Department of Finance shall make a quarterly determination of the amount of expenses incurred which may not be reimbursable under these programs. A quarterly report of expenses incurred but not reimbursable shall be presented to the City Commission, together with the actions needed to avoid Droiect deficits. (4) For purposes of this section, City-wide Surplus for any fiscal year is defined as the increase in Unreserved General Fund Balance as reflected in the City's annual financial statements. City -Wide Deficit for any fiscal year is defined as the decrease in Unreserved General Fund Balance as reflected in the City's annual financial statements. Budget Surplus of any office, department or elected official is defined as the excess of budgeted expenses over actual expenses in any fiscal year. Page 4 of 14 6. 12210, Notwithstanding anything to the contrary in this Section, the total amount of Budget surplus to be added to designated reserves and special revenue funds pursuant to this Section (together, the "Rollover Amounts") is limited to City-wide Surplus for any fiscal year. In the event the Rollover Amounts would result in a City -Wide deficit, then each Budget Surplus within the Rollover Amounts shall be reduced proportionately so the City's annual financial statements will reflect no change in Undesignated, Unreserved General Fund Balance. In the event that a City-wide Deficit would result before effecting the Rollover Amounts in any fiscal year, then no Rollover Amounts shall be available. a. Budget surpluses in an elected official's budget in any fiscal year shall be reflected as designated reserves at the end of the fiscal year in which such surplus arose and added to the budget of such elected official for the following fiscal year. b. Budget surpluses of the Parks and Recreation Department shall be allocated, as of the end of the fiscal year in which such surplus arose, to a Parks Special Revenue Fund. Allowed expenditures from the Parks Special Revenue fund shall be limited to the purchase of parks recreational and maintenance equipment and the direct operations of recreational programs in and for the City's parks, subject to appropriation by the City Commission. C. Budgeted surpluses of the Department of Conferences, Conventions and Public Facilities shall be allocated, as of the end of the fiscal year in which such surplus arose, to a Public Facilities Special Revenue Fund. Allowed expenditures of the Public Facilities Special Revenue Fund shall Page 5 of 14 12 27 6 be limited to capital improvements for the City's public facilities, subject to appropriation by the City Commission. d. Budgeted surpluses of the Department of Information Technology shall be allocated, as of the end of the fiscal year in which such surplus arose, to an IT Strategic Plan Special Revenue Fund. Allowed expenditures of the IT Strategic Plan Special Revenue Fund shall be limited to expenditures, excluding those related to permanent City staff, necessary for the implementation of the City's Information Technology Strategic Plan, subject to appropriation by the City Commission. (4-5) Reserve Policies. The following three Reserve Policies categories are established for the General Operatinq Fund of the Citv: (a) Current Fiscal Year Contingency. A "contingency" reserve level of $1,G09,999.9n $5,000,000 shall be budgeted annually. Such contingency reserve shall be available for use, with City Commission approval, during the fiscal year, to fund unanticipated budget issues which arise or potential expenditure overruns which cannot be offset through other sources or actions. This reserve level shall be iceplenished at the beginning ef ea -eh fseal year se it is available en ai.g. en geing bas The unused portion of the budgeted contingency reserve in any fiscal year shall be reflected as designated reserves until such time as the City has funded fifty percent (500) of the liabilities in its general long- term debt account group. Amounts not needed to satisfy the 50% requirement shall be considered General Fund Undesicmated Reserve and be treated in Page 6 of 14 12276 accordance with paragraph 5(b) of this Section. (b) General Fund Undesignated Reserve. The City shall retain undesignated reserves equal to a threshold eft ten percent (4100) of the prior three years average of general revenues. Such reserves may only be used for offsetting an unexpected mid -year revenue shortfall 'or for funding an emergency such as a natural or man-made disaster, which threatens the health, safety and welfare of the City's residents, businesses or visitors. At - Any eiaeh time that these reserve funds ai= .-.ende,a fall below the ten percent (10%) threshold, the City Commission shall adopt a repayfRcnt _eked,_ le pr-eviding fer replenishment of these reserves plan to achieve the threshold within two fiscal years. Amounts in excess of the ten percent (10%) threshold may be used for capital improvements, unanticipated expenditures necessary to assure compliance with legal commitments, and for expenditures that will result in the reduction of recurring costs or the increase in recurring revenues of the City. (c) Designated Reserves. The City shall retain reserves equal to ______ ten percent (10%) of the prior three years average of general revenues.. Such reserves shall be used for funding long-term liabilities and commitments of the City such as: i. UneCompensated absences and other employee benefit liabilities, including liabilities related to post-retirement benefits, ii. Self -Insurance (including workers Page 7 of 14 Plan deficits compensation, x.2276 liability claims and health insurance); iii. Infrastructure to be funded on a cash basis; iv. Strategic Initiatives (until completed); V. Blue Ribbon Commission Initiatives (until completed); vi. Anticipated adjustments in pension plan payments resulting from market losses in plan assets and other unanticipated payments necessary to maintain compliance with contractual obligations. Payment for these--speeifi compensated absences and other employee benefit liabilities and self-insurance plan deficits may be drawn from this reserve during the fiscal year and shall be replenished each year until fifty percent (500) if such the liabilities that aversely affeet t4-,-- riffs—balanee—sheet are fully funded. Other designated reserves may be drawn upon without the need for replenishment. 6. Proprietary Funds. The City shall establish proprietary funds only if the costs to provide the service are fully funded from the charges for the service. 1�7. Multi -Year Financial and G pi Plan. The City Commission shall annually adopt a Five Year Financial Plan by September 9 March 31 of each year, in eeneert with the annual buudgelc , whieh eentains five years of fina-ne-ial feiceeast reflecting as the base year, the current year's budget. Such plan will include cost estimates of all current city operations and pension obligations, pi-epesed eapi tat eut1 ,y eiEenrim Page 8 of 14 12276 the Capital !FRP-e'oLe, ents— Pre gra\\ e // anticipated increases in operations, debt service payments, reserves to maintain the City's officially adopted levels and estimated recurring and non-recurring revenues. This Plan will be prepared by fund and reflect forecasted surpluses or deficits and potential budget balancing initiatives, where appropriate. -78. T -h -e Multi -Year eCapital -iImprovement eefapenent ef the Plan - The City Commission shall annually adopt a Capital Improvement Plan ( \\CIP" ) by March 31 of each year. The CIP shall eek address cost estimates for all necessary infrastructure improvements needed to support City services, including information technology, with an adequate repair and replacement (\\R&R") component. Funded, partially funded and unfunded projects shall be clearly delineated The CIP shall be detailed for the current fiscal year and for five additional years and, if practicable, additional required improvements aggregated for two additional five year periods. To the extent feasible, department heads shall be required to submit independent needs assessments for their departments for use in preparing the CIP. The Plan CIP will be detailed by fund, include recommended project prioritization rankings, identified revenue sources, planned financing options and unfunded projects. The CIP shall include estimates of the operational impacts produced for the operation of the capital improvements upon their completion. The CIP shall include a component reflecting all on-going approved capital projects of the City, the date funded, amount budgeted, amount spent since the start date, remaining budget, fiscal impact of known changes to financial assumptions underlying the project, estimated expenditures by fiscal year for the project and estimated completion date. Approved projects, with circumstances that arise which change the funding requirements Page 9 of 14 12276 of the project, shall be addressed in the CIP annually. 9. Debt Management. The City shall manage its debt in a manner consistent with the following principles: (a) Capital projects financed through the issuance of bonded debt shall be financed for a period not to exceed the estimated useful life of the project. (b) The net direct general obligation debt shall not exceed five percent (5%) and the net direct and overlapping general obligation debt shall not exceed ten percent (10%) of the taxable assessed valuation of property in the City. (c) The weighted average general obligation bond maturity shall be maintained at fifteen (15) years or less. (d) Special obligation debt service shall not exceed twenty percent (20%) of non - ad valorem general fund revenue. (e) Revenue based debt shall only be issued if the revenue so pledged will fully fund the debt service after operational costs plus a margin based on the volatility of the revenues pledged. .6-10. Financial Oversight and Reporting. The City shall provide for the on-going generation and utilization of financial reports on all funds comparing budgeted revenue and expenditure information to actual on a monthly and year-to-date basis. The Finance Department shall be responsible for issuing the monthly reports to departments, the Mayor and City Commission, and provide any information regarding any potentially adverse trends or conditions. These reports should be issued within thirty (30) days after the close of each month. Page 10 of 14 The annual external audit of the City shall be prepared and presented to the Mayor and City Commission within 120 days of the close of each fiscal year. The City Commission shall convene a workshop meeting with the external auditors to review the findings and recommendations of the audit. The City shall prepare an annual report to provide information to bondholders and the secondary marketplace. Financial reports, offering statements and other financial related documents issued to the public, shall provide full and complete disclosure of all material financial matt Rrs _ -711. Basic Financial Policies. The City shall endeavor to maintain formal policies, which reflect "best practices" in the areas of: 4--.(a) Debt. Such policy shall address affordability, capacity, and strategies for re-entering the bond market in the future, debt issuance and management. i4—(b) Cash Management and Investments. Such policy shall require twenty-four (24) month gross and net cash-flow projections by fund and address adequacy, risk, liquidity and asset allocation issues. iii.(c) Budget Development and Adjustments. Such policy shall establish proper budgetary preparation procedures and guidelines, calendar of events, planning models by fund, budget adjustment procedures, establishment of rates and fees, indirect costs/interest income and the estimating conference process. The proposed budget should be scheduled to allow sufficient review by the Mayor and City Commission while Page 11 of 14 122,1079 allowing fbr sufficient citizen input. The City budget document reflecting all final actions as adopted by the City Commission on or before September 30 of each year, shall be printed and made available within thirty (30) days of such adoption. 4-v—. (d) Revenue collection. Such policy shall provide for maximum collection and enforcement of existing revenues, monitoring procedures, and the adequacy level of subsidy for user fees. (e) Purchasing Policy. Such policy shall establish departmental policies and procedures and provide appropriate checks and balances to ensure the City departments adhere to the City's purchasing policies. $12. Evaluation Committees. Such committees shall be created, to the extent feasible, and contain a majority of citizen and/or business appointees from outside City employment to review City solicitations (bids, "requests for proposals", etc.), contracts or contract amendments over $10,000 a d all collective bargaining contract issues. The recommendations of the evaluation committee shall be provided to the Mayor and City Commission on all such contracts prior to presentation for official action. -313. Full Cost of Service. The City shall define its core services and develop financial systems that will determine on an annual basis the full cost of delivering those services. This information shall be presented as part of the annual budget and financial plan. 314. Promoting Operating Efficiencies. The City shall develop programs and incentives to encourage operating efficiencies through the use of technology, outsourcing, or any other curriculum. Page 12 of 14 - 276 Section 5. All ordinances or parts of ordinances insofar as they are inconsistent or in conflict with the provisions of this Ordinance are repealed. Section 6. If any section, part of section, paragraph, clause, phrase or word of this Ordinance is declared invalid, the remaining provisions of this Ordinance shall not be affected. Section 7. This Ordinance shall become effective IMMEDIATELY after final reading and adoption thereof.'I PASSED ON FIRST READING BY TITLE ONLY this :_25th day of July, 2002. z/ This Ordinance shall become effective as specified herein unless vetoed by the Mayor within ten days from the date it was passed and adopted. If the Mayor vetoes this Ordinance, it shall become effective immediately upon override of the veto by the City Commission or upon the effective date stated herein, whichever is later. Page 13 of 14 12,276 PASSED AND ADOPTED ON SECOND AND FINAL READING BY TITLE ONLY this 11th day of September-/ 2002. ATTES,W : �sY-''/Al/G 11 / / V,//l��tir PRISCILLA A. THOMPSON CITY CLERK ..® APPROVED AND CORRECTNESS: W1179SE:BSS Page 14 of 14 YL A. DIAZ, MAYO 12276 CITY OF MIAMI CITY ATTORNEY'S OFFICE MEMORANDUM TO: Priscilla A. Thompson City Clerk .® FROM: Alejandro Vi City Attor DATE: July RE: Co ected Scrivener's Error -Ordinance No. 12276, adopted September 11, 2002 01-1047) Ordinance No. 12276, adopted September 11, 2002, contains a scrivener's error as the proposed ordinance did not reflect the amount to be amended for the Current Fiscal Year Contingency. A review of the Cover Memorandum that was part of the Agenda Packet distributed for consideration for the September 11, 2002 City Commission Meeting clearly expressed that City Code Section 18-542(5)(a) was to be amended to change the Current Fiscal Year Contingency from $1,000,000 to $5,000,000. The attachment, which is a substitute original ordinance to replace the document you presently possess as Ordinance No. 12276 has been revised to reflect the proper amount of $5,000,000 for the Current Fiscal Year Contingency. After the correct document has been executed, please forward a copy to this Office, and to Marcello Penha, Department of Management and Budget. This memorandum may be attached to Ordinance No. 12276 so that any concern regarding the substitution of said Ordinance is clarified. W913:BSS Attachments c: Marcello Penha, Department of Management and Budget Anna M. Medina, City Clerk' Office x.2276 9/3 J%J- 1-1047 1047 ORDINANCE NO. 12276 AN ORDINANCE OF THE MIAMI CITY COMMISSION ENDING CHAPTER 18, ARTICLE IX/DIVISION 2 E ITLED "FINANCIAL POLICIES" TO CLARIFY AN EXP D THE FINANCIAL INTEGRITY PRINCIPL ; CONTA NING A REPEALER PROVISION, A SEVERA LITY CLAUSE AND PROVIDING F AN IMMEDIAW EFFECTIVE DATE. WHEREAS, the City recognizes itha made improvements in its financial position t rough adhe enc to financial "best practices;" and WHEREAS, the /thbasis forma 'zed a series of financial principles, many of curren ly utilized by the City, which will serve as for governing the City's finances in the future; and WHEREAS, hese principles are crucial to ass ing potential investors at investments in the City are safe s the City plans t reenter the bond market; and SUPERSEDED 12'2 7 6 EREAS, the City desires to clarify and expand t financia integrity principles it had adopted and implemented NOW, THE FORE, BE IT ORDAINED BY THE COMMISSI CITY OF MIAMI, F RIDA: OF THE Section 1. Th recitals and finXdb contained in the Preamble to this Ordi ance are adopreference and incorporated as if fully se forth in thison. Section 2. Chapter 18, iv' ion 2, entitled "Financial Integrity Principles," is amended ' the following particulars:-� "Cha ter 18 INANCE ARTICLE I FINANCIAL POL CIES DIVISION 2. FINANCIAL INTEGRITY PRNINCIPLES Sec. 18-541. Established; implementation;\theity reports. Fin cial Integrity Principles and Pol assure nd maintain financial integrity in are reby established and shall be im imme ately upon adoption of this Ordinance. 1�rds and/or figures stricken through shall be delete nderscored words and/or figures shall be added. The remainin provisions are now in effect and remain unchanged. Asterisks indicate omitted and unchanged material. Page 2 of 14 SUPERSEDED 12276 The Financial Integrity Principles as set forth he in shall be reviewed and updated as /naA ary, a leas every three years. The City's IntAudit r shall be responsible for preparation writ en report o be transmitted to the Mayor anme ers of the ty Commission by July 1 of eacs to compliance with the principles and policforthin this ivision. The report sincluderecommendati s for additional policies oons, tobe considered for action after reviewinlatestannual audit d management letter coTheCity's Finance Director shall prepare aon the status of these Ninciples prior to tV issuance of anv bonded debt for he Citv of Miami. Sec. 18-542. The Fin tial Integrit/ rinciples. The following Finan 'al Inte ity Principles are adopted: (1) Structurally Balan e Budget. The City shall maintain structurally -balanced budget. Recurr' g revenues will fund recurring expen iture Nen reearr±ng (2) EstimatiConference Process. The City shall a opt budgets and develop it long and short- erm financial and capital i\veloped /expertise. containing estimates ing a professional ence process. Conference include, but not be limitedpalfrom the Budget Offpalfrom the Finance Depar n-staff principals with public finance (3) Interfund Borrowing. The City shall not borrow or use internal fund transfers to obtain cash from one fund type or reserve to fund activities of another fund type or reserve unless such use is deemed lawful, Page 3 of 14 SUPERSEDED and unless the Estimating Conference has \app ned that (a) the funds to be will not be needed during the lendi and (b) the funds for repayment w' 1 lable within a two-year period. Any taken to borrow funds under hese ons must be separately presen ed to oved by the City Commission and thef such borrowing shall no extendthe last day of the subseq nt fiscal Recognizing t at some programs are funded by grants or otlh entities on reimbursement basis, the Ci y shall pply for such reimbursements on a timely asis to minimize the period that City nds are used as float. In the eve t 1 ans/float for these reimbursements exten eyond the end of a fiscal year, such r imbursements shall be reflected as receiv 1 s and ne.ted as pa -r -t in the annual financial statemeylts to \the extent allowed under GeneralXy Accepted Accounting Principles. T Department of Finance shall make a quarte y determinate of the amount of expenses incurred which may not be reimbursabl under these p o rams A g quarterly report of expenses ncurred but not rei ursable shall be prese ed to the City Co mission, together with t e actions needed to avoid project deficits. (4) For purposes of this section, Ci -wide Su plus for any fiscal year is defin d as t -e<_,. increase in Unreserved General and alance as reflected in the City's ann al financial statements. City -Wide Deficit ftr in Unreserved General Fund Balance as reflected in the City's annual financial. statements. Budget Surplus of any office, department or elected official is defined as the excess of budgeted expenses over actual expenses in any fiscal year. Page 4 of 14 27 6 SUPERSEDED Notwithstanding anything to the contrary in this Section, the total amount of Budget Vurplus to be added to designated reserves a d special revenue funds pursuant to this Se tion (together, the "Rollover Amounts" is imited to City-wide Surplus for y fisc a year. In the event the Roll er Amount would result in a City -Wide de cit, then ea h Budget Surplus within the R9,11over Amounts Xhall be reduced proportion ely so the City' annual financial statenjLLts will reflect Np change in Un esignated, Unreserved GNneral Fund Balance. In the event that a ity-wide Deficit would result before effectinj the Rollover mounts in any fiscal year, the no Rollov r Amounts shall be available. a. Budget s official's rev lAes / in an elected shall be ref: reserves at in which si to the budc for the fol: Fin any fiscal year ted as designated !k of the fiscal year is arose and added of sucN elected official ing fisca year. Budget Vurpluses of t e Parks and Recreat'on Department shall be alloca ed, as of the end o the fiscal year in which such surplus a ose, to a Par,Ws Special Revenue Fund .Allowed Parks e enditures from the ParSpecial evenue fund shall be limited o the purchase of parks recreational and maintenance equipment and the d1 ect operations of recreational programs in and for the City's parks, subject o appropriation by the City Commission. C. Budgeted surpluses of the Department of Conferences, Conventions and Public Facilities shall be allocated, as of the end of the fiscal year in which such surplus arose, to a Public Facilities Special Revenue Fund. Allowed expenditures of the Public Facilities Special Revenue Fund shall Page 5 of 14 SUPERSEDED be limited to capital improvements for the City's public facilities, subject \to appropriation by the City Commission. d.Budgeted surpluses of the Department of nformation Technology shall be a located, as of the end of the f scal ye r in which such surplus arose, to an IT trategic Plan Special Reven44 Fund. Allo d expenditures of Xhe IT Strate is Plan Special Rev ue Fund shall e limited to ex enditures, excludin those related t,6 permanent City st ff, necessary for the implementation of Ahe City's Information echnology trategic Plan, subject to a ropriat'on by the City Commission. (4-5) Reserve Policies. e following three Reserve Policies categ ies are established for the General Operating Fund of the City: (a) Cur/en iscal Year ontingency. A "cocy" reserve level of $1,.0 shall e, budgeted annSuch conting ncy reserve shavailable for use with City Comapproval, during he fiscal yeafund unanticipate budget isswhich arise or ptential expe overruns which can of be offthrough other source or act This reserve level shalk- he 'en geing bas The unused portion oiC the budgeted contingency reserve in any fiscal year shall be reflected as designated reserves until such time as the City has funded fifty percent (50%) of the liabilities in its general long- term debt account group. Amounts not needed to satisfy the 50% requirement shall be considered General Fund Undesignated Reserve and be treated in Page 6 of 14 SUPERSEDED 1 2 2 7 0A accordance with paragraph 5(b) of this Section. General Fund Undesignated Reserve. The City shall retain undesignated \disaste es equal to a threshold eight to t ($10%) of the prior three yea s e of general revenues. S ch es may only be used for ting an unexpected mi year e shortfall or for fund' g an cy such as a natural or an -made e which threatens the health, d welfare of t City'snts, businesses or vis tors. At-ueh ti e these r serve fundsare r_crd_? all below th ten ercent (10%) thresho the C' y Commission shall adopt ehedule reserves plan to within two fiscal excess of the ,eve the threshold ars. Amounts in percent (10%) threshold may be u d for capital improvements, unanticipated expenditures rAcessary to assure compliance wit legal com 'tments, and for expenditu/es that will result in the reductio of recurring co is or the increase in recurring revenueX of the City. (c) Designat d Reserves. The City hall retain reserves equal to ___ en perce (10%) of the prior three yea s aver e of general revenues. Suc res rves shall be used for funding to g -term liabilities and commitments o the City such as: i. UneCompensated absences and other employee benefit liabilities, including liabilities related to post-retirement benefits,- ii. enefits; ii. Self -Insurance Plan deficits (including workers compensation, Page 7 of 14 1 2 2 SUPERSEDED e C liability insurance); �J claims and health iii. Infrastructure to be funded/ntil cash basis; iv. Strategic Initiatives completed); v. Blue Ribbon Commission Ini iatives (until completed); vi. A ticipated adjustmentV in pension pl n payments re lting from mar t losses in p an assets and other unanticip ed payments necesskry to ma' tain compliance with mikractual obligations. Payment foT compensated other employee benefit liself-insurance plan deficrawn from this reserve duscal year and shall be ach year until fifty perif such the liabilitie City,--arefunded. y Other d signated reserves be drawn upon without the n ed for reDleAishment . 6. ProprieVary Funds. The City shall es ablish propri tary funds only if the cosN to provi e the service are fully funded rom the charges for the service. �7. M lti-Year Financial Plan. The ity Commission shall annually adopt a Five Year Financial Plan by Septeffib0 March 31 of each year, ��eeneert with the annual bud t, wh e eenc-ainfive ear_ of f -aneial feree reflecting as the base year, the current year's budget. Such plan will include cost estimates of all current city operations and pension obligations, prepesed ea-pital eutlay expenditures frem Page 8 of 14 SUPERSEDED 122700- the —a -tal imprevefRents - Pregraf— „ , anticipated increases in operations, debt service payments, reserves to maintain the City's officially adopted levels an/ stimated recurring and non-recurr' g r venues. This Plan will be prepared by fu and reflect forecasted surpluse or def' its and potential budget bal ncing initi tives, where appropriate. 48. Thre lti-Year eCapital eempenent-\—P the Plan - The Cit shall annu lly adopt a Capital Plan ("CIP") by March 31 of ea -iIrArovement y ommission )rovement ar. The CIP shall address cost estimates for all necessary infrastructur improvements needed to suppo t City ser ices, including information tech ology, w th an adequate repair and repla ment "R&R") component. Funded, partially fu ed and unfunded projects shall be cle r y delineated The CIP shall be detailed fo the current fiscal year and for five a46ilsional years and, if practicable, dit' nal required improvements aggre ated f\ckr two additional five year periods To the extent feasible, departm/head shall be re ired to submit independs assessmen for their departmuse in prepar g the CIP. Thewill be detai1e by fund, includended project pri itization rankingntified revenue sources, planneding options and nfunded projectCIP shall include es 'mates of theal impacts produced fo the opera on of the capital improvements on thei completion. The CIP shall include a Vhe onent reflecting all on-going approve tal projects of the City, the date ed, amount budgeted, amount spent since start date, remaining budget, fiscal impact of known changes to financial assumptions underlying the project, estimated expenditures by fiscal year for the project and estimated completion date. Approved projects, with circumstances that arise which change the funding requirements Page 9 of 14 SUPERSEDED . 22 7 6 of the project, shall be addressed in the CIP annually. 9. ebt management. The City shall manage its d t in a manner consistent with th fo owinq principles: (a) Xapital projects financed through the i suance of bonded debt shal be fi nced for a period not to excq4d the C --qt- i ated useful life of the project. (b) The ne"� direct general obligg'tion debt shall not exceed five perce t (5%) and the net direct and overlap ing general obligation debt shall no exceed ten percent (16%) of the t able assessed valuation of"property irVthe City. (c) The weighted average eneral obligation bond maturity al be maintained at fifteen (15) year r less. (d) Special obligat' n ebt service shall not exceed twen y pe ent (20%) of non - ad valorem gen ral fun revenue. (e) Revenue basEYd debt shall \only be issued if the re enue so pledgN will fully fund the &ebt service afte operational costs Ous a margin bas d on the volati ty of the revenues Dle qed. -6-10. F/hly Oversight and Reporting. e City svide for the on-going gene ation aation of financial reports o all fmparing budgeted revenue and ee information to actual on a md year-to-date basis. The FinanD shall be responsible for issuin e monthly reports to departments, the /adverse yor and City Commission, and provide any formation regarding any potentially trends or conditions. These reports ould be issued within thirty (30) days after the close of each month. Page 10 of 1427 SUPERSEDED The annual external audit of the City shall be prepared and presented to the Mayor an City.Commission within 120 days of the clo e gf each fiscal year. The City Commiss'on all convene a workshop meeting with the ex ernal auditors to review the finding and rec mmendations of the audit. The C'ty shall prepare an annual r port to provide information to bondholderV and the secondarNy marketplace. Financial `Keports, offering stoftements and other finan ial related documeyfts issued to the public, Nhall provide fulX and complete disclosure oaf all mate ial financial -711. Basic Financial licies. The City shall endeavor to mainta fo al poli -cies, which reflect "best practi es" in the areas of: i--. (a) Debt. Such olicy shall address affordability, capacity, and strategies or r -entering the bond market in he fut e, debt issuance and manag ent. 1 -i --(b) Cash nagement and Investments. Such p licy shall requi twenty-four (24) onth gross and n t cash-flow proj ctions by fund a address ade uacy, risk, liquidity nd asset al ocation issues. iii. (c) udget Development and Adjust ents. Such policy shall establish p oper budgetary preparation procedures and guidelines, calendar of even s, planning models by fund, budg .adjustment procedures, establishment of rates and fees, indirect costs/interest income and the estimating conference process. The proposed budget should be scheduled to allow sufficient review by the Mayor and City Commission while Page 11 of 14 SUPERSEDED 12 allowing for sufficient ' citizen input. The City budget document reflecting all final actions as adopted Vbefo City Commission on or September 30 of each year, shprinted and made available thirty (30) days of such adopti }(d)evenue collection. Suc policy s all provide for maximum ollection an enforcement of existi g revenues, mons oring procedures, and the adequ cy level of sub idy for user fees. (e) Purchasin Policy. Such policy shall establish epart ntal policies and procedures d provide appropriate checks and b ances to ensure the City departme t adhere to the City's purchasing p lici S. $12. Evaluation Committees Such cc mittees shall be created, to the ex ent feasible, and contain a majority of citiz n and/or busin ss appointees from outside Cy employment to review City solicitations ids, "requests for roposals", etc.), contra is or contract amend m nts over $10,000 a d all collective bargaining contract issues. T e recommendations of the ev uation committee hall be provided to the Mayor an City Commissi on all such contracts prior to present tion for official action. 1313. Full Cost of Service. The City shall define its /and services and develop financial systems that determine on an annual basis the full cost delivering those services. This information l be presented as part of the annual budget financial plan. 14. Promoting Operating Efficiencies. The City shall develop programs and incentives to encourage operating efficiencies through the use of technology, outsourcing, or any other curriculum. Page 12 of 14 12276 SUPERSEDED Sectio\5.All ordinances or parts of ordi nces insofar asare inconsistent or in conflict w' h the provisions Ordinance are repealed. Section 6. If ny clause, phrase or word o the remaining provisions affected. section, part of /sect"on, paragraph, this Ordinance iared invalid, of this Ordinahall not be Section 7. This OrdinanceAd all become effective IMMEDIATELY after final reading andion thereof.V PASSED ON FIRST READING Y TITLE ONLY July 2002. is 25th day of This Ordin nce shall become effective as specified herein unlesss, vetoed by the Mayor within ten days from the date it was passed and adop ed'. If the Mayor vetoes this Ordinance, it shall become effect' e immediately upon override of the veto by the City Comm � sion or upon the effective date stated herein, whichever is later. Page 13 of 14 SUPERSEDED 12276 Ask Adlk 12276 Page 14 of 14 SUPERSEDED J-01-1047 9/3/02 • ORDINANCE NO. AN ORDINANCE OF THE MIAMI CITY COMMISSION AMENDING CHAPTER 18, ARTICLE IX/DIVISION 2 ENTITLED "FINANCIAL POLICIES" TO CLARIFY AND EXPAND THE FINANCIAL INTEGRITY PRINCIPLES; CONTAINING A REPEALER PROVISION, A SEVERABILITY CLAUSE AND PROVIDING FOR AN IMMEDIATE EFFECTIVE DATE. WHEREAS, the City recognizes it has made improvements in its financial position through adherence to financial "best practices;" and WHEREAS, the City has formalized a series of financial principles, many of which are currently utilized by the City, which will serve as the basis for governing the City's finances in the future; and 0 WHEREAS, these principles are crucial to assuring potential investors that investments in the City are safe as the City plans to reenter the bond market; and WHEREAS, the City desires to clarify and expand the financial integrity principles it had adopted and implemented; NOW, THEREFORE, BE IT ORDAINED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1. The recitals and findings contained in the Preamble to this Ordinance are adopted by reference and incorporated as if fully set forth in this Section. Section 2. Chapter 18, Division 2, entitled "Financial Integrity Principles," is amended in the following particulars:V "Chapter 18 FINANCE ARTICLE IX. FINANCIAL POLICIES DIVISION 2. FINANCIAL INTEGRITY PRINCIPLES Sec. 18-541. Established; implementation; review; reports. Financial Integrity Principles and Policies to assure and maintain financial integrity in the City are hereby established and shall be implemented immediately upon adoption of this Ordinance. 1� Words and/or figures stricken through shall be deleted. Underscored words and/or figures shall be added. The. remaining provisions are now in effect and remain unchanged. Asterisks indicate omitted and unchanged material. Page 2 of 14 The Financial Integrity Principles as set forth herein shall be reviewed and updated as necessary, at least every three years. The City's Internal Auditor shall be responsible for preparation of a written report to be transmitted to the Mayor and the members of the City Commission by July 1 of each year as to compliance with the principles and policies set forth in this Division. The report shall include recommendations for additional policies or actions, to be considered for action after reviewing the latest annual audit and management letter comments. The City's Finance Director shall prepare a report on the status of these Principles prior to the issuance of anv bonded debt for the Citv of Miami. Sec. 18-542. The Financial Integrity Principles. The following, Financial Integrity Principles are adopted: (1) Structurally Balanced Budget. The City shall maintain a structurally -balanced budget. Recurring revenues will fund recurring expenditures. Nan reeal-ring replenish reserve levels, eidpp Outstanding --liabilities and pay €er nen– i-e=u_=ing expenditures, the —ender s (2) Estimating Conference Process. The City shall adopt budgets and develop its long and i short-term financial and capital improvement plans containing estimates developed utilizing a professional estimating conference process. , Conference principals shall include, but not be limited to: one principal from the Budget Office; one principal from the Finance Department and two non -staff principals with public finance expertise. (3) Interfund Borrowing. The City shall not borrow or use internal fund transfers to obtain cash from one fund type or reserve to fund activities of another fund type or reserve unless such use is deemed lawful, Page 3 of 14 i and unless the Estimating Conference has determined that (a) the funds to be berrewed loaned will not be needed during the lending period, and (b) the funds for repayment will be available within a two-year period. Any actions taken to borrow funds under these conditions must be separately presented to and approved by the City Commission and the term of such borrowing shall not extend beyond the last day of the subsequent fiscal year. Recognizing that some programs are funded by grants or other entities on a reimbursement basis, the City shall apply for such reimbursements on a timely basis to minimize the period that City funds are used as float. ,In the event loans/float for these reimbursements extend beyond the end of a fiscal year, such reimbursements shall be reflected as receivables and neted as p of theannualbe4get—preeess in the annual financial statements to the extent allowed under Generally Accepted Accounting Principles. The Department of Finance shall make a quarterly determination of the amount of expenses incurred which may not be reimbursable under these programs. A quarterly report of expenses incurred but not reimbursable shall be presented to the City Commission, together with the actions needed to avoid project deficits. (4) For purposes of this section, City-wide Surplus for any fiscal year is defined as the increase in Unreserved General Fund Balance as reflected in the City's annual financial statements. City -Wide Deficit for any fiscal year is defined as the decrease in Unreserved General Fund Balance as reflected in the City's annual financial statements. Budget Surplus of any office, department or elected official is defined as the excess of budgeted expenses over actual expenses in any fiscal ear._ Page 4 of 14 Notwithstanding anything to the contrary in this Section, the total amount of Budget_ surplus to be added to designated reserves and special revenue funds pursuant to this Section (together, the "Rollover Amounts") is limited to City-wide Surplus for any fiscal year. In the event the Rollover Amounts would result in a City -.Wide deficit, then each Budget Surplus within the Rollover Amounts shall be reduced proportionately so the City's annual financial statements will reflect no change in Undesignated, Unreserved General Fund Balance. In the event that a City-wide Deficit would result before effecting the Rollover Amounts in any fiscal vear, then no Rollover Amounts shall be available. a. Budget surpluses in an elected official's budget in any fiscal year shall be reflected as designated reserves at the end -of the fiscal year in which such surplus arose and added to the budget of such elected official for the following fiscal year. b. Budget surpluses of the Parks and Recreation Department shall be allocated. as of the end of the fiscal year in which such surplus arose, to a Parks Special Revenue Fund. Allowed expenditures from the Parks Special i Revenue fund shall be limited to the purchase of parks recreational and maintenance equipment and the direct operations of recreational programs in and for the City's parks, subject to appropriation by the City Commission. C. Budqeted surpluses of the Department of Conferences, Conventions and Public Facilities shall be allocated, as of the end of the fiscal year in which such surplus arose, to a Public Facilities Special Revenue Fund. Allowed expenditures of the Public Facilities Special Revenue Fund shall Page 5 of 14 be limited to capital improvements for the City's public facilities; subject to appropriation by the City Commission. d. Budgeted surpluses of the Department of Information Technology shall be allocated, as of the end of the fiscal year in which such surplus arose, to an IT Strategic Plan Special Revenue Fund. Allowed expenditures of the IT Strategic Plan Special Revenue Fund shall be limited to expenditures, excluding_ those related to permanent City staff, necessary for the implementation of the City's Information Technology Strategic Plan, subject to appropriation by the City Commission. (45) Reserve Policies. The following three Reserve Policies categories are established for the General Operating Fund of the City: (a) Current Fiscal Year Contingency. A "contingency" reserve level of $1,000,000.00 shall be budgeted annually. Such contingency reserve shall be available for use, with City Commission approval, 'during the fiscal year, to fund unanticipated budget issues which arise or. potential expenditure overruns which cannot be offset through other sources or actions. This —Eeserve—level shall- be fIsealyear se it is available--ei3 an The unused portion of the budgeted contingency reserve in any fiscal year shall be reflected as designated reserves until such time as the City has funded fifty percent (50%) of the liabilities in its general long- term debt account group. Amounts not needed to satisfy the 50% requirement shall_ be considered General Fund Undesignated Reserve and be treated in Page 6 of 14 accordance with paragraph 5(b) of this Section. (b) General Fund Undesignated Reserve. The City shall retain undesignated reserves equal to a threshold eft ten percent (.&10.x) of the prior three years average of general revenues. Such reserves may only be used for offsetting an unexpected mid -year revenue shortfall' or for funding an emergency such as a natural or man-made disaster, which threatens the health, safety and welfare of the City's residents, businesses or visitors. At- A� eft time that these reserve funds are ex-petided fall below the ten percent (101) threshold, the City Commission shall adopt a repayment sehedale previding €ei- replenishment e f these -__eyes plan to achieve the threshold within two fiscal years. Amounts in excess of the ten percent (1096) threshold may be used for capital improvements, unanticipated expenditures necessary to assure compliance with legal commitments, and for expenditures that will result in the reduction of recurring costs_ or the increase in recurrin§ revenues of the City. (c) Designated Reserves. The City shall retain reserves equal to seven ten percent (10%) of the prior three years average of general revenues. Such reserves shall be used for funding long-term liabilities and commitments of the City such as: i. UReCompensated absences and other employee benefit liabilities, including liabilities related to post-retirement benefits; ii. Self -Insurance Plan deficits (including workers compensation, Page 7 of 14 liability claims and health insurance); iii. Infrastructure to be funded on a cash basis; iv. Strategic Initiatives (until completed); V. Blue Ribbon Commission Initiatives (until completed); vi. Anticipated adjustments in pension plan payments resulting from market losses in plan assets and other unanticipated payments necessary to maintain compliance with contractual obligations. Payment. for compensated absences and other employee benefit liabilities and self-insurance plan deficits may be drawn from this reserve during the fiscal' year and shall be replenished each year until fifty percent (50%) if such the liabilities that ---adz=ems e l y of f e t die City's balanee sheet are full y funded. Other designated reserves may be drawn upon without the need for replenishment. 6. Proprietary Funds. The City shall establish proprietary funds only if the "costs to provide the service are fully funded from the charges for the service. r,7. Multi -Year Financial and Gapitcl Plan. The City Commission shall annually adopt a Five Year Financial Plan by Septe;:ber '*March -31 of each year, in eeneert- With the —tea fi a feree reflecting as the base year, the current year's budget. Such plan will include cost estimates of all current city operations and pension obligations, prepesed eapi-tal eet-lay e3ependitures F em Page 6 of 14 the--Gapitaail ­ vlaev -Przegr-anr—z"GIPU ) , anticipated increases in operations, debt service payments, reserves to maintain the City's officially adopted levels and estimated recurring and non-recurring revenues. This Plan will be prepared by fund and reflect forecasted surpluses or deficits and potential budget balancing initiatives, where appropriate. �8. The Multi -Year ecapital Improvement eempenent ewe Plan - The City Commission shall annually adopt a Capital Improvement Plan ("CIP") by March 31 of each year. The CIP shall eever address cost estimates f -or all necessary infrastructure improvements needed to support City services, including informat4on technology, with an adequate repair and replacement ("R&R") component. Funded, partially funded and unfunded projects shall be clearly delineated The CIP shall be detailed for the current fiscal year and for five additional years and, if practicable, additional required improvements aggregated for two additional five year periods. To the extent feasible, department heads shall be required to submit independent needs assessments for their departments for use in preparing the CIP. The Plan CIP will be detailed by fund, include recommended project prioritization rankings, identified revenue sources, planned financing options and unfunded projects. The CIP shall include estimates of the operational impacts produced for the operation of the capital improvements upon their completion. The CIP shall include a component reflecting all on-going approved capital projects of the City, the date funded, amount budgeted, amount spent since the start date, remaining budget, fiscal impact of known changes to financial assumptions underlying the project, estimated expenditures by fiscal year for the project and estimated completion date. Approved projects, with circumstances that arise which change the funding requirements Page 9 of 14' C] of the .project, CIP annually. �J shall be addressed in the 9. Debt Management - The City shall manage its debt in a manner consistent with the following principles: (a) Capital projects financed through the issuance of bonded debt shall be financed for a period not to exceed the estimated useful life of the project. (b) The net direct general obligation debt shall not exceed five percent (5-*) and the net direct and overlapping general obligation debt shall not exceed ten percent (10%) of the taxable assessed valuation of property in the City. (c) The weighted average general obligation bond maturity shall be maintained at fifteen (15) years or less. (d) Special obligation debt service shall not exceed twenty percent (20%) of non - ad valorem qeneral fund revenue. (e) Revenue based debt shall only be issued if the revenue so pledged will fully fund the debt service' after operational costs plus a margin based on the volatility of the revenues pledged. G10. Financial Oversight and Reporting. The City shall provide for the on-going generation and utilization of financial reports on all funds comparing budgeted revenue and expenditure information to actual on a monthly and year-to-date basis. The Finance Department shall be responsible for issuing the monthly reports to departments, the Mayor and City Commission, and provide any information regarding any potentially adverse trends or conditions. These reports should be, issued within thirty (30) days after the close of each month. Page 10 of 14 0 . 0 The annual external audit of the City shall be prepared and presented to the Mayor and City Commission within 120 days of the close of each fiscal year. The City Commission shall convene a workshop meeting with the external auditors to review the findings and recommendations of the audit. 1 The City_ shall prepare an annual report to provide information to bondholders and the secondary marketplace. Financial reports, offering statements and other financial related documents issued to the public, shallprovide full and complete disclosure of all material financial matters. 411. Basic Financial Policies. The City shall endeavor to maintain formal policies, which reflect "best practices" in the areas of: -i(a) Debt. Such policy shall address affordability, capacity, and strategies for re-entering the bond market in the future, debt issuance and management. . 14-(b) Cash Management and Investments. Such policy shall 2equire twenty-four (24) month gross and net cash-flow projections by fund and address adequacy, risk, liquidity and asset allocation issues. ii -i (c) Budget Development and Adjustments. Such policy shall establish proper budgetary preparation procedures and guidelines, calendar of events, planning models by fund, budget adjustment procedures, establishment of rates and fees, indirect costs/interest income and the estimating conference process. The proposed budget should be scheduled to allow sufficient review by the Mayor and City Commission while Page 11 of 14 allowing for sufficient citizen input. The City budget document reflecting all final actions as adopted by the City Commission on or before September 30 of each year, shall be printed and made available within thirty (30) days of such adoption. Iiv-(d) Revenue collection. Such policy shall provide for maximum collection and enforcement of existing revenues, monitoring procedures, and the adequacy level of subsidy for user fees. :(e) Purchasing Policy., Such policy shall establish departmental policies and procedures and provide appropriate checks and balances to ensure the City departments adhere to the City's purchasing policies. 512. Evaluation Committees. Such committees shall be created, to the extent feasible, and contain a majority of citizen and/or business appointees from outside City employment to review City solicitations (bids, "requests for proposals", etc.), contracts or contract amendments over $10,000 a d all collective bargaining contract issues. The recommendations of the evaluation committee shall be provided to the Mayor and City Commission on all such contracts prior to presentation for official, action. 1313. Full Cost of Service. The City shall define its core services and develop financial systems that will determine on an annual basis the full cost of delivering those services. This information shall be presented as part of the annual budget and financial plan. 3-414. Promoting Operating Efficiencies. The City shall develop programs and incentives to encourage operating efficiencies through the use of technology, outsourcing, or any other curriculum. Page 12 of 14 Section 5. All ordinances or parts of ordinances insofar as they are inconsistent or in conflict with the provisions of this Ordinance are repealed. Section 6. If any section, part of section, paragraph, clause, phrase or word of this ordinance is declared invalid, the remaining provisions of this Ordinance shall not be affected. Section 7. This Ordinance shall become effective IMMEDIATELY after final reading and adoption thereof.21 PASSED ON FIRST READING BY TITLE ONLY this day of 2002. Zi This ordinance shall become effective as specified herein unless vetoed by the Mayor within ten days from the date it was passed and adopted. If the Mayor vetoes this Ordinance, it shall become effective immediately upon override of the veto by the City Commission or upon the effective date stated herein, whichever is later. Page 13 of 14 PASSED AND ADOPTED ON SECOND AND FINAL READING BY TITLE ONLY this day of , 2002. ATTEST: PRISCILLA A. THOMPSON CITY CLERK APPROVED AS TO FORM AND CORRECTNESS: ALEJANDRO VILARELLO CITY ATTORNEY W1179:BSS i Page 14 of 14 MANUELA. DIAZ, MAYOR SECOND READING • • ORDINANCE 14 r, The Honurable Mcrnbcrs, DATE . June 20, 2002 ru r City of Miami Commission suasecT : First Recoding Ordinance Financial Integrity Ordinance Ma.auel . D' Mayor n �Catra, ��.2 nkiPk tt"Cefd . ENcLDSUREs In 1404, the City Commission revised Chapter 18, Article 1X / Division 2 entitled "Financial Policies". The amended ordinance required the use of financial best practices and codified policies regarding the establishment of proper General Fund reserves in the waive of the City's past financial crisis. The result of this past work has been the establishment of substantial General Fund reserves. Today, the City has substantial reserve balances and is projected to meet all of the requirements of the revised financial integrity ordinance by the end of FY 2002. Chapter 18, Article IX / Division 2 currently requires reserves equal to S% of 3 -year average General Fund revenues to 100/o for undesignated reserves. The designated reserve requirement is currently the grower of 100% of General Long -Term Debt Account Group (GLIDAO) non -bond liabilities or 7% of 3 -year average General Fund revenues. This proposed amendment to Financial Integrity Ordinance will allow the City greater Flexibility in the use of certain surpluses of budgeted expenses over actual expenses making them automatically available to the originating aroa in subsequent periods for either strategic or practical reasons. The proposed amendment before you for consideration essentially provides the City the flexibility to utilize certain surpluses of budgeted, expenses over actual expenses in the originating area in subsequent periods for either strategic or practical reasons. Surpluses not needed to comply with the minimum requirements for designated and undesignated reserves can be used fnr strategic purposes rather than continuing to increase reserves. Additionally, per the proposed amendmei►t, the Commission can designate surpluses for use in complying with existing contractual commitments. Specifically, tho proposed ordinarnce does the following; Modifies Sect. 18-542, subsection (1) entitled "Structurally Balanced Budget" striking the prior language in sentence three_ (3) that requires non-recurring 06/20 '06:37 N0.543 04/05 Modifies Sect. 18-542, subsection (1) entitled "Structurally Balanced Budget" striking the prior language in sentence three (3) that requires non-recurring revenue and budget surpluses to be used to increase reserve levels, wpport outstanding liabilities, and pay for non-recurring expenditures. ' Adds language to Sect, 18-542, subsectioa (3); paragraph (2) entitled "Interfund Borrowing" recognizing the receipt of grant program reimbursements for prior year loans/float as receivables in the annual financial statements to the extent allowed under Generally Accepted Accounting Principlps. It further requires that the Finance Department make quarterly detarminations regarding the amount of expenses incurred which may not be reimbursable and requires that a quarterly report of non -reimbursable expenses and recommendations regarding necessary actions to avoid project deficits be presented to the City Commission. Creates a new subsection (4) to Sect. 18-542 establishing definitions for City. Wide Surpluses and Deficits and for Budget Surpluses of any office, department or elected official. a. Limits the total amount of budget surplus to be allocated to designated reserves and special revenue funds (i.e. "Rollover Amounts") from City- wide surpluses. b. Sets requirement that rollover amounts be reduced proportionately prior to being set-aside in the event of a City-wide deficit. c. Requires that budget surpluses of elected officials be noted in year in which arose and added to respective budgets in the following fiscal year. d Establishes a Parks Special 'Revenue Fund to be funded by mrplums in the Parks & Recreation Departments budget. A lows for the proceeds of that fund to be utilized to purchase recreational and maintenance equipment, as well as programming at City parks. e. Establishes an IT Strategic Plan Special Revenue Fund to be funded by surpluaw in the information Technology Department budget, Proceeds from the naw special revenue fund shall be used to implement the IT Strategic Plan. Modifies the "Reserve Policies" for the General Operating Fund in Section 18- 542, subsection (5), it, Seta the "Current Fiscal Year Contingency" at $5 million dollars and requires that any unused portion of this contingency be reflected as designated reserves to help meet 50% of liabilities in the general long- term debt account group. Balance not needed to satisfy the 50% requirement to be considered "General Fund Undesignated Reserve." b. Increases "General Fund Undesignated Reserve" requirement from eight percent (8%) to ten percent (10%) of the prior three-year average of general revenues, Affords the Commission a two-year timeframe to achieve 10% threshold should reserve funds fhll below the required level. Gives the Commission the ability to utilize excess reserve for capital 2 0 06/20 '1:37 H0.543 05/05 improvements, for expenditures that will reduce recurring casts, and for unanticipated expenditures necessary to meet contractual commitments. c. increases "Designated Reserves" requirement from seven percent (7%) to ten percent (I(Wa) of prior three -years average of general revenues and allows the City to utilize this reserve for: i.Compensated absences and emplpyee.benefit liabilities; ii.geif-Insuraace Plan deficits; ii.i.Infirastructure needs; iv, Strategic Initiatives; v.Blue Ribbon Commission Initiatives; vi.Anticipated adjustments in pension plans to maintain compliance with contractual obligations. Requires that .Multi -Year Financial plan and Long -Term CIP plan be separate documents with due dates of March 31" of each year, rather than September 301' to ensure that the documents reflect Commission budget actions and to help control work flow, ■ Requires that the Long -Term CIP plan reflect both funded and unfunded projects, including the operational impact of planned construction per this amendment. This change will help to enhance the City's long-term planning processes. Establishes a Debt Management Policy that reflects best practices. a. Requires that term of debt shall not exceed the life of the project Handed; b, Limits General Obligation debt to 5% of the assessed value of property within the City; c. Establishes a limit for direct and overlapping General Obligation debt at 1004 of assessed value of property within the City. d. Requires that the weighted average maturity of debt not exceed 15 years. e. Limits special obligation debt service to 20% of non -ad valorem revenue; f Requires that revenue bonds be fully funded by tho projected revenues. Cc: honorable Members. City Cemminion Akjandro Vilamlio, Clty Attorney Eivi Wleategui-Alonso, Agenda Coordinator