HomeMy WebLinkAboutBack-Up from Law Dept5/11/2016 Miami, FL Code of Ordinances
Sec. 18-542. - Financial integrity principles.
The following financial integrity principles are hereby adopted:
(1) Structurally balanced budget. The city shall maintain a structurally -balanced budget. Recurring
revenues will fund recurring expenditures.
(2) Estimating conference process. The city shall adopt budgets and develop its long and short-term
financial plan 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) lnterfund 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, and unless the estimating conference has determined that (a) the funds to be
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 in the comprehensive
annual financial statements report (CAFR) to the extent allowed under accounting principles
generally accepted in the United States of America (GAAP). 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 comprehensive annual financial report
(CAFR). City-wide deficit for any fiscal year is defined as the decrease in unreserved general fund
balance as reflected in the city's comprehensive annual financial report (CAFR). Budget surplus of
any office, department or elected official is defined as the excess of budgeted expenses over
actual expenses in any fiscal year.
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 comprehensive annual financial report (CAFR) 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.
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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 be
appropriated for discretionary use 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
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.
(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 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 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). Amounts designated as "contingency" reserve in subsection
5a. shall be included in the 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 two fiscal years and the city manager shall present an oral report at the second
commission meeting of every month, except during the month of September, regarding: i)
the status of the current fiscal year budget and ii) the proposed budget for the subsequent
fiscal year. Such oral report shall appear on the city commission agenda as a discussion item
under the agenda category titled "Budget." Amounts in excess of the ten percent threshold
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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). 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 50 percent of such the liabilities are 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.
(7) Multi year financial plan. The city commission shall annually adopt a five year financial plan by
September 30 of each year, reflecting as the base year, the current year's budget. For fiscal year
2004 the multi -year financial plan will be adopted no later than 30 days after the completion of
labor negotiations. Such plan will include cost estimates of all current city operations and pension
obligations, 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) Multi year capital improvement plan. The city commission shall annually adopt a capital
improvements plan ("CIP") by November 30th of each year. The CIP shall 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 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
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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 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 and the net direct and
overlapping general obligation debt shall not exceed ten percent of the taxable assessed
valuation of property in the city.
c. The weighted average general obligation bond maturity shall be maintained at 15 years or
Less.
d. Special obligation debt service shall not exceed 20 percent 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.
(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 30 days after the close of each month.
The external auditor shall prepare the city's comprehensive annual financial report (CAFR) by
March 31 of each year. The single audit and management letter of the city shall be prepared by
the external auditor by April 30 of each year. The external auditor shall present the findings and
recommendations of the audit, single audit and management letter, to the mayor and city
commission at a scheduled commission meeting prior to July 30 of each year.
Financial reports, offering statements and other financial related documents issued to the public,
shall provide full and complete disclosure of all material financial matters.
(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 and made available within 30 days of
such adoption.
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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, 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.
(12) Evaluation committees.
a. Solicitations. An evaluation committee, consisting of a majority of citizen and/or business
appointees from outside city employment, shall be created, to the extent feasible, to review
city solicitations ("requests for proposals," "requests for qualifications," etc.). The
recommendation(s) of the evaluation committee shall be provided to the mayor and city
commission on all such solicitations prior to presentation to the city commission for official
action.
b, Collective bargaining agreements, The city finance committee, established pursuant to city
commission resolutions 98-631 and 98-767, shall review and provide recommendations to
the city manager regarding all collective bargaining agreements. The finance committee shall
provide its recommendations regarding such collective bargaining agreements to the city
manager not less than 14 days prior to consideration by the city commission of any said
collective bargaining agreement for ratification. In the event that the finance committee is
unable to meet within the timeframes provided herein, then the city manager shall proceed
to the city commission for ratification.
(13) 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.
(Ord. No. 11890, § 4, 2-10-00; Ord. No. 12113, § 1, 9-25-01; Ord. No, 12276, § 2, 9-11-02; Ord. No, 12353, §
2, 4-10-03; Ord. No. 12427, § 2, 10-23-03; Ord. No. 12518, § 2, 3-25-04; Ord. No. 12727, § 2, 9-22-05; Ord.
No. 13107, § 2, 10-8-09; Ord. No. 13212, § 2, 10-14-10; Ord. No, 13303, § 2, 1-12-12)
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