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HomeMy WebLinkAboutLegislationCity of Miami Legislation Ordinance City Hall 3500 Pan American Drive Miami, FL 33133 www.miamigov.com File Number: 11-00776 Final Action Date: AN ORDINANCE OF THE MIAMI CITY COMMISSION AMENDING CHAPTER 18/ARTICLE IX/DIVISION 2 ENTITLED "FINANCE/FINANCIAL POLICIES/FINANCIAL INTEGRITY PRINCIPLES" BY MODIFYING THE FINANCIAL INTEGRITY PRINCIPLES TO INCREASE THE AMOUNT OF TIME THE CITY OF MIAMI HAS TO ADOPT PLAN TO ACHIEVE THE PRESCRIBED LEVEL OF RESERVE FUNDS; CONTAINING A SEVERABILITY CLAUSE AND PROVIDING FOR AN IMMEDIATE EFFECTIVE DATE. WHEREAS, the City of 'Miami ("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 used by the City, which will serve as the basis for governing the City's finances in the future; and WHEREAS, the City desires to modify its current Financial Integrity Principles to increase the amount of time the City has to adopt a plan to achieve the prescribed level of reserve funds; 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/Article IX/Division 2, entitled "Finance/Financial Policies/Financial Integrity Principles," is amended in the following particulars: {1} "CHAPTER 18 FINANCE ARTICLE IX. FINANCIAL POLICIES DIVISION 2. FINANCIAL INTEGRITY PRINCIPLES Sec. 18-542. Financial integrity principles. The following financial integrity principles are hereby adopted: City of Miami Page 1 of 4 File Id: 11-00776 (Version: 1) Printed On: 8/30/2011 File Number. 11-00776 (5) 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 $5,000,000.00 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. The unused portion of the budgeted contingency reserve in any fiscal year shall be reflected as unassigned assigned fund balance reserves until such time as the city has funded 50 percent of the liabilities of the long-term liabilities (excluding bonds, loans, and capital lease payables) as reflected in the city's comprehensive annual financial report (CAFR). Amounts not needed to satisfy the 50 percent requirement shall be considered general fund unassigned assigned fund balance reserve and be treated in accordance with subsection (5)b. b. General fund unassigned fund balance reserves. The city shall retain unassigned fund balance reserves equal to a threshold ten percent of the prior three years average of general revenues (excluding transfers). " calculation of meeting the ten percent of the prior three years average of general revenues for the unassigned fund balance category. 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. Any time these reserve funds fall below the ten percent threshold, the city commission shall adopt a plan to achieve the threshold within twe seven fiscal years. Amounts in excess of the ten percent 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. General Fund assigned fund balance reserves. The city shall retain assigned fund balance reserves equal to ten percent of the prior three years average of general revenues (excluding transfers). Amounts designated as "contingency" reserve in 5(a) shall be included in the calculation of meeting the ten percent of the prior three years average of general revenues for the assigned fund balance category. Such reserves shall be used for funding long-term liabilities and commitments of the city such as: 1. Compensated absences and other employee benefit liabilities, including liabilities related to post -retirement benefits; 2. Self-insurance plan deficits (including workers compensation, liability claims and health insurance); 3. 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 are funded. Other designated reserves may be drawn upon without the need for replenishment. City of Miami Page 2 of 4 File Id: 11-00776 (Version: 1) Printed On: 8/30/2011 File Number: 11-00776 (11) Basic financial policies. The city shall endeavor to maintain formal policies, which reflect "best practices" in the areas of: a. Debt: Such policy shall address affordability, capacity, debt issuance and management. b. Cash management and investments: Such policy shall require 24-month gross and net cash -flow projections by fund and address adequacy, risk, liquidity and asset allocation issues. 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 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 an -el made available within 30 days of such adoption. 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. f. Collective bargaining management practices: Such policy shall require that all memorandums of understanding (M.O.U.$) entered into between the city and any collective bargaining unit that amends, alters, or modifies any existing collective bargaining agreement and that may have a fiscal impact of $40,000.00 or more be reviewed by the budget director; and reviewed by the finance committee with recommendations to the city manager. The finance committee shall provide its recommendations regarding such M.O.U.s to the city manager not less than 14 days prior to consideration by the city commission of any said M.O.U. for ratification. In the event that the finance committee is unable to meet within the timeframes provided herein, then the city manager may proceed to the city commission for ratification. Section 3. 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 4. This ordinance shall become effective immediately after final reading and adoption thereof.{2} APPROVED AS TO FORM AND CORRECTNESS JULIE 0. BRU CITY ATTORN City of Miami Page 3 of 4 File Id: 11-00776 (Version: 1) Printed On: 8/30/2011 File Number: 11-00776 Footnotes: {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. {2} 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. City of Miami Page 4 of 4 File Id: 11-00776 (Version: I) Printed On: 8/30/2011