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:
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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.
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