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HomeMy WebLinkAboutFiscal and Budgetary policiesbe made only in cases of emergency, and a detailed account shall be recorded and reported. The proceeds shall be disbursed only by transfer to departmental appropriation. All transfers from the contingent appropriation will be evaluated using the following criteria: ❖ Is the request of such an emergency nature that it must be made immediately? • Why was the item not budgeted in the normal budget process? • Why can't the transfer be made within the department? A. REVENUE DESIGN PARAMETERS. The Town will pursue the following optimum characteristics in its revenue system: ® Simplicity - The Town, where possible and without sacrificing accuracy, will strive to keep the revenue system simple in order to reduce costs, achieve transparency, and increase citizen understanding of Town revenue sources. Certainty - A knowledge and understanding of revenue sources reliability increases the viability of the revenue system. The Town will understand, to the best of its ability, all aspects of its revenue sources and their performance, as well as enact consistent collection policies to provide assurances that the revenue base will materialize according to budgets, forecasts, and plans. ® Equity - The Town shall make every effort to maintain equity in its revenue system: i.e. the Town shall seek to minimize or eliminate all forms of subsidization between entities, funds, services utilities, and customer classes within a utility. Administration - The benefits of a revenue source will not exceed the cost of collecting that revenue. Every effort will be made for the cost of collection to be reviewed annually for cost effectiveness as a part of the Town's indirect cost and cost of service analysis. ® Adequacy, Diversification and Stability - The Town shall attempt, in as much as is practical, to achieve a balance in its revenue system. The Town shall also strive to maintain a balanced and diversified revenue system to protect the Town from fluctuations in any one source due to changes in local economic conditions which adversely impact that revenue source. B. OTHER CONSIDERATIONS. The following considerations and issues will guide the Town in its revenue policies concerning specific sources of funds: 5 Use of Debt Financing - The useful life of the asset or project shall, at a minimum, exceed the payout schedule of any debt the Town assumes. Debt financing instruments to be considered by the Town may include: ®®® General obligation bonds. These must be authorized by a vote of the citizens of Westlake. •®® Revenue bonds. These bonds generate capital requirements necessary for continuation or expansion of a service which produces revenue and for which the asset may reasonable be expected to provide for a revenue stream to fund the debt service requirement. ®®® Certificates of obligation. These can be authorized by Council approval with debt service by either general revenues or backed by a specific revenue stream or a combination of both. Lease /purchase agreements. These shall only be used to purchase capital assets that can not be financed from either current revenues or fund balance /retained earnings and to fund infrastructure improvements and additions. ® Assumption of Additional Debt - The Town shall not assume more tax - supported general purpose debt than it retires each year without first conducting an objective analysis as to the community's ability to assume and support additional debt service payments. Affordability Targets - The Town shall use an objective multi -year analytical approach to determine whether it can afford to assume new general purpose debt beyond what it retires each year. This process shall compare generally accepted standards of affordability to the current values for the Town. The process shall also examine the direct costs and benefits of the proposed expenditures. The decision on whether or not to assume new debt shall be based on these costs and benefits and on the Town's ability to "afford" new debt as determined by the aforementioned standards. The Town shall strive to achieve and /or maintain these standards at a low to moderate classification. ® Debt Structure - The Town shall structure its debt payment schedules for general purpose debt to ensure level principal repayment schedules. The Town shall not assume any debt with "balloon' repayment schedules which consist of low annual payments and one large payment of the balance due at the end of the term. While balloon payment structures minimize the size of debt payments during the period, they force a large funding requirement on the budget of the final year. Given the uncertainties of the future, level payment schedules improve budget planning and financial management. E