Financial Policies Joan Jadali, Assistant City Manager/ Director

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Financial Policies Joan Jadali, Assistant City Manager/ Director of Finance & Admin. City of Webster Groves

Purpose of Financial Policies: Ensure the public’s trust is upheld. Establish a framework under which the City will conduct its fiscal affairs. Provide a level of certainty that adequate funding of local government services will continue.

Objectives of Financial Policies: To maintain Council policy-making ability by ensuring that important fiscal decisions are not driven by emergencies or financial problems. To provide Council information so that policy decisions can be made timely and accurately. To protect and maintain the City’s credit rating. To ensure legal compliance with the budget through systems of internal control.

Revenue Policy: The City will continually engage in efforts designed to both broaden and diversify its revenue base to prevent revenue shortfalls due to reliance on a single revenue source. All existing and potential revenue sources will be reviewed annually to ensure revenue trends are kept current. One-time revenues will be used only for one-time expenditures. The City will avoid using temporary revenues to fund ongoing services. Monthly reports comparing actual to budgeted revenues will be prepared by the Finance Department and presented for administrative review. User charges and fees will be established at a level related to the cost of providing the service.

Operating Policy: When necessary, the City will institute expenditure controls in an attempt to ensure that current operating expenditures/expenses will not exceed current operating revenues. Monthly reports comparing actual to budgeted expenditures/ expenses will be prepared by the Finance Department and presented for administrative review. The City will maintain a competitive pay structure for its employees. The annual financial report and the annual budget shall be submitted to the Government Finance Officers Association for the purpose of obtaining the awards presented in each category.

Accounting Policy: The City will use generally accepted accounting principles (GAAP) in all external financial records and transactions. These principles will be monitored and updated as mandated by the Governmental Accounting Standards Board. An independent annual audit will be performed by a public accounting firm, which will issue an official opinion on the annual financial statements and a management letter detailing areas needing improvement. Full disclosure will be provided in the financial statements and bond representations. Financial systems will be maintained to monitor revenues and expenditures/expenses on a monthly basis, with an analysis and adjustment of the Annual Budget at appropriate times. The Finance Department will monitor the financial systems with reports presented monthly for administrative review. The City will annually submit documentation to obtain the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association.

Cash & Investment Policy: The City of Webster Groves will invest idle funds in obligations of the United States Treasury and United States agencies, obligations of the State of Missouri, or the City itself, time deposit certificates and repurchase agreements as authorized by state statutes of Missouri. Public funds will be invested in a matter which will provide the highest investment return with the maximum security while meeting the daily cash flow demands of the City and conforming to all state and local statutes governing the investment of public funds. The City will monitor compliance with the City’s Investment Policy that stipulates the objectives, delegation of authority, ethics and conflicts of interest, authorized financial dealers and institutions, authorized and suitable investments, collateralization, safekeeping and custody, diversification, maximum maturities, internal controls, performance standards, and reporting requirements.

Cash & Investment Policy: Our City policy is a modification of the Investment Policy provided by the Missouri State Treasurer’s Office:

Debt Policy: These policies were implemented to standardize and rationalize the issuance and management of debt. These policies apply to all general and limited obligation debt issued by the City of Webster Groves, including bonds, notes, leases, debt guaranteed by the City, and any other forms of indebtedness. This policy has several criteria, and below is a short listing of some of the main factors: The City will not issue debt to finance operating expenditures. Capital projects, financed through bond proceeds, shall be financed for a period not to exceed the useful life of the project. The City will follow the bonded indebtedness requirements as limited by Sections 95.115 and 95.120 of the Missouri Revised Statutes (1986) to 10% of the assessed value of taxable tangible property.

Debt Policy: Creditworthiness Objectives Credit Ratings-to maintain the highest possible credit rating Financial Disclosure-committed to full and complete financial disclosure Capital Planning-committed to systematic capital planning, intergovernmental cooperation and coordination, and longterm financial planning. Debt Limits-will keep outstanding debt within the limits prescribed by the State Constitution, state laws, and the City’s Charter.

Debt Policy: Purposes and Uses of Debt Capital Financing-will normally rely on internally generated funds and/or grants and contributions from other government entities its capital needs. Asset Life-will consider long-term financing for the acquisition, maintenance, replacement, or expansion of physical assets with a useful life of at least 5 years. Debt Guarantees-the amount allowed by federal and state law that does not negatively impact the City’s creditworthiness.

Debt Policy: Debt Standards and Structure Length of Debt Debt Structure Variable Rate Debt Subordinate Debt Derivatives Refundings BANs/TANs Credit Enhancement Conduit Debt

Debt Policy: Debt Administration & Process Investment in Bond Proceeds Costs and Fees Competitive Sale Negotiated Sale Underwriters Bond Counsel Compensation for Services Arbitrage Compliance

Capital Improvement Policy: The City will prepare for the Council’s adoption annually, a five year Capital Improvement Program (CIP) which will detail each capital project, the estimated cost, the description, and funding source. Future operating costs associated with new capital improvements will be projected and included in the operating budget forecast. The City will determine and use the most effective and efficient method for financing all new capital projects.

Purchasing Policy: Basic Goals To comply with legal requirements of public purchasing. To assure vendors that impartial and equal treatment will be afforded all who wish to do business with the City. To receive maximum value for each public dollar spent. To provide city departments needed supplies and services at the time and place needed in the proper quantity and quality. To purchase only supplies and services for which funds have been approved and not previously encumbered.

Purchasing Policy: Purchasing Requirements Purchases Under 1,500: use the most advantageous method of purchasing available. Purchases from 1,500 to 5,000: 3 bids solicited by mail or phone call. Purchases from 5,000 to 15,000: 3 written bids. Purchases in excess of 15,000: Formal bids requested. Requires Council approval.

Purchasing Policy: Cooperative Procurement Agreements Missouri Department of Transportation State of Missouri St. Louis County US Communities National Intergovernmental Purchasing Alliance Interlocal Purchasing System (TIPS-USA) Consortium headed by the City of Chesterfield for the purchase of salt.

Purchasing Policy: Sole Source/Exclusive Supplier Competitive shopping procedures can be waived by Director of Finance and City Manager. When purchase is sole source, documentation must be provided designating why only one company or individual is capable of providing the supplies or services required.

Purchasing Policy: Blanket Purchase Contracts For long-term contracts for supplies or services awarded after receiving competitive bids. Contract remains open for a period up to one year to purchase these items on an “as needed” basis. Examples: emergency plumbing services, construction materials such as rocks, trees, and other landscape materials; automotive supplies

Purchasing Policy: Green Procurement Preference will be given to green products and services; however, all factors include level of service, price, quality and budget should be considered. Examples of Green Purchases: Recyclable items Biodegradable items Items with minimal packaging Minimal content and use of toxic substances in production

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