City of Culver City, California
City Council Agenda Item Report
RECOMMENDATION:
Staff recommends the City Council adopt a Resolution revising City Council Policy
Statement No. 5002 – Financial Policies, to include an additional provision in the
Fees and Charges section of the Policy, and rescinding Resolution No. 2007-R043.
BACKGROUND:
Over the past 18 months, the City Council has received information at various times
on Government Accounting Standards Board Statement No. 45 (GASB 45) which
requires governmental agencies to report the actuarially determined value of the
liability for paying existing retirement benefits to current and future retirees (also
referred to as Other Post Employment Benefits or “OPEB”). At this time, this is only
a reporting requirement; there is no legal requirement to fund this liability. However,
it is reasonable to assume that at some point in the future, a funding requirement
may be implemented.
As a matter of prudent financial management, the City has started to identify
different ways to begin funding this obligation. One potential funding source that has
been suggested is to recover the OPEB cost for those positions that participate in
fee based activities.
On May 11, 2009, the City Council approved the updated fees and charges for fiscal
year 2009-10, which included a provision to earmark 1.5% of the actual fee receipts
from the Building & Safety Division, Engineering Division, Fire Department, Planning
Division, and Police Department toward the City’s OPEB liability. In that agenda
report, staff stated that the City Council Financial Policy would be updated to include
Meeting Date: 6/22/09 Item Number: C-9
AGENDA ITEM: Adoption of a Resolution Revising City Council Policy Statement
No. 5002 Financial Policies and Rescinding Resolution 2007-R043.
Contact Person/Dept.: Nick Kimball,
Finance Department
Phone Number: 310-253-6013
Fiscal Impact: Yes [] No [x] General Fund: Yes [x] No []
Public Hearing: [] Action Item: [] Attachments: [x]
Public Notification:
Master E-Mail Notification List (06/17/09)
Department Approval:
Jeff Muir (06/15/09)
City Attorney Approval:
Carol Schwab (by H. Baker) (06/17/09)
Chief Financial Officer Approval:
Jeff Muir (by M. Noller) (06/17/09)
City Manager Approval:
Mark Scott (06/18/09) City of Culver City, California
City Council Agenda Item Report
language requiring a portion of the actual fee receipts be earmarked each year and
set aside to pre-fund the City’s OPEB obligation if directed by City Council.
On May 11, 2009, the City Council unanimously adopted the following motion:
“Adopt a resolution establishing and amending various fees and charges
for services provided by the City, INCLUDING Section 12 which directs
the Finance Department to earmark 1.5% of actual user fee receipts for
certain departments/divisions toward Other Post Employment Benefits,
and rescinding prior fee Resolution(s)…”
DISCUSSION:
Pursuant to directive received on May 11, 2009 staff proposes the following
statement be added to the “User Fees and Charges and Development Impact Fees”
section of City Council Policy No. 5002 – Financial Policies (Attachment #1):
“…A percentage of certain fee revenues, as determined by City Council
Resolution, shall be earmarked and set aside in an irrevocable trust for
post employment benefits. After the fiscal year has ended, the earmark
percentage will be applied to the actual fee revenues received during the
respective fiscal year…”
It is staff’s intention to present the City Council with the percentage to earmark and
which department/divisions to apply the earmark to during the annual update of the
fee resolution. Therefore, as the specific percentage and applicable fee revenues
change over time, the City Council Financial Policy does not also need to be
changed. However, an action by City Council Resolution is required to change the
percentage and applicable fee revenues.
FISCAL ANALYSIS:
The City Council has already established the earmark percentage (1.5%) and
applicable fee revenues (Building Safety, Engineering excluding Preferential
Parking, Fire, Planning, and Police) for FY 2009-10. The associated fiscal impact
was considered and approved during the update of the user fees and charges on
May 11, 2009.
There is no fiscal impact associated with amending the current City Council Policy
No. 5002 – Financial Policies.
City of Culver City, California
City Council Agenda Item Report
ATTACHMENTS:
1. Proposed Resolution (including proposed City Council Policy No. 5002 –
Financial Policies)
MOTION:
That the City Council:
Adopt a Resolution revising City Council Policy Statement No. 5002 – Financial
Policies, and rescinding Resolution No. 2007-R043.
MEETING DATE: 06/22/09
AGENDA ITEM: Adoption of a Resolution Revising City Council Policy Statement
No. 5002 Financial Policies and Rescinding Resolution 2007-R043.
ATTACHMENTS
Pages
g
e
s
1. Proposed Resolution 2009-R___
2. Proposed City Council Policy No. 5002 – Financial Policies
1 - 2
3-12
-1-
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
)
30
31
RESOLUTION NO. 2009-R___
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CULVER CITY, CALIFORNIA, REVISING CITY COUNCIL
POLICY STATEMENT NO. 5002 – FINANCIAL POLICIES,
AND RESCINDING RESOLUTION NO. 2007-R043.
WHEREAS, on May 11, 2009, the City Council approved a motion as part of
the annual fees and charges update to earmark 1.5% of actual user fee receipts for certain
departments/divisions toward Other Post Employment Benefits (OPEB); and
WHEREAS, Government Accounting Standards Board Statement No. 45
(GASB 45) requires the City to report retiree benefits for current retirees and active
employees, as determined by an actuarial study, as a liability on the City’s audited financial
statements; and
WHEREAS, currently, GASB 45 is only a reporting requirement with no legal
obligation to fund the liability; and
WHEREAS, as a matter of best financial management practices, the City has
begun identifying potential funding sources and setting aside funds to offset the OPEB
liability; and
WHEREAS, the costs that are recovered through user fees and charges are
primarily personnel related costs; and
WHEREAS, the retiree benefits that are required to be reported as OPEB are
personnel related costs; and
WHEREAS, through the adoption of the revised policy attached hereto as
Exhibit “A,” the City Council desires to set a policy to earmark a percentage of actual user
1
-2-
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
)
30
31
fees and charges receipts from certain fee activities that will be set aside in an account set
up by the City to pre-fund the OPEB liability.
NOW, THEREFORE, the City Council of the City of Culver City, California,
DOES HEREBY RESOLVE, as follows:
SECTION 1. The City Council hereby adopts the revised City Council
Policy Statement No. 5002 entitled “Financial Policies,” attached hereto as Exhibit “A”.
SECTION 2. Revised City Council Policy Statement No. 5002 shall be
effective on July 1, 2009.
SECTION 3. The City Manager is hereby authorized to format this
policy statement in a format consistent with other City Council Policy Statements and shall
include the final version of this City Council Policy Statement with other adopted City
Council Policy Statements.
SECTION 4. The City Manager shall distribute this City Council Policy
Statement to interested parties, which include, but are not limited to: interested members of
the Public, City Commissioners, and City Staff.
SECTION 5. Resolution No. 2007-R043 is hereby rescinded.
APPROVED and ADOPTED this day of , 2009.
ANDREW N. WEISSMAN, Mayor
City of Culver City, California
ATTEST: APPROVED AS TO FORM:
MARTIN COLE CAROL A. SCHWAB
City Clerk City Attorney
2Page 1 of 10
CITY OF CULVER CITY
COUNCIL POLICY STATEMENT Policy Number 5002
General Subject: Finance Date Issued 1/23/1995
Specific Subject: Financial Policies Date Revised 6/22/2009
Effective Date 7/1/2009
Resolution No. 2009-R___
__________________________________________________________________
PURPOSE:
To establish a comprehensive set of financial policies for the City that will serve as a
guideline for operational and strategic decision making related to financial matters.
STATEMENT OF POLICY:
The following financial policies are intended to establish a comprehensive set of
guidelines for use by the City Council and City staff on decision-making that has a
fiscal impact. The goal is to maintain the City’s financial stability in order to be able to
continually adapt to local and regional economic changes. Such policies will allow the
City to maintain and enhance a sound fiscal condition. This policy should be
implemented in conjunction with associated subsidiary policies, i.e. Mission Driven
Budgeting Policy (5001), Purchasing Policy, Investment Policy, Grants Policy, etc.
This financial policy will be reviewed annually to ensure that it remains current. The
policy will be included as part of the City’s annual Adopted Budget. The City’s
comprehensive financial policies shall be in conformance with all state and federal
laws, generally accepted accounting principles (GAAP) and standards of the
Governmental Accounting Standards Board (GASB) and the Government Finance
Officers Association (GFOA).
LONG-TERM FINANCIAL PLANNING
1. The City shall seek a balance in the overall revenue structure between more
stable revenue sources (e.g. Property Tax and Utility Taxes) and economically
sensitive revenue sources (e.g. Sales Tax and Transient Occupancy Tax).
When new revenue sources are proposed, they should be designed to achieve
a desirable balance.
2. The City shall encourage the economic development of the community as a
whole in order to provide stable and increasing revenue streams. It should be
the City’s goal to not only attract new businesses but also to retain successful
businesses in the City. Objectives of the revenue strategy should also include:
avoiding an over reliance on revenue from any one particular industry;
recruitment and retention efforts to ensure a balance of revenue sources;
3Page 2 of 10
ensuring compatible uses; encouraging business synergies; and promoting the
growth of amenities and ancillary services to support business districts and
established industries.
3. The City shall develop and maintain methods for the evaluation of future
development and related fiscal impacts on the City budget.
4. The City shall develop and implement a five-year infrastructure, facilities and
equipment maintenance/replacement plan, which shall be updated annually
and included in the City’s Comprehensive Financial Plan. From this plan a
maintenance and replacement schedule will be developed and followed.
5. The City shall develop and implement a financial plan to address its funding
needs for issues like deferred maintenance and unfunded liabilities, which will
be included in the City’s Comprehensive Financial Plan.
OPERATING BUDGET POLICIES
1. The City Manager shall prepare and present a proposed two-year budget to the
City Council within all statutorily prescribed deadlines. The City Council will
adopt the first year budget with conceptual approval of the second year budget.
A public hearing will be conducted in June of each year to adopt the budget.
2. A Budget Resolution will be adopted by the City Council annually, which
describes the budget amendment process and also specifies budget
amendment authority.
3. All departments will participate in the responsibility of meeting the City’s
financial policy goals and ensure the City’s long-term financial health. Budget
control is maintained at the department level.
4. It is the City’s policy to adopt a balanced budget where operating revenue is
equal to, or exceeds, operating expenditures. In the event a balanced budget
is not attainable, and the cause of the imbalance is expected to last for no more
than one year, the planned use of reserves to balance the budget is permitted.
In the event that a budget shortfall is expected to continue beyond one year,
the planned use of reserves must be developed as part of a corresponding
strategic financial plan to close the gap through revenue increases and/or
expenditure decreases.
5. The operating budget shall serve as the annual financial plan for the City. It
shall serve as the City’s management plan for implementing goals and
objectives of the City Council, City Manager and departments. The budget
shall provide staff the resources necessary to accomplish City Council
determined service levels.
4Page 3 of 10
6. During the annual budget development process, the existing base budget
should be thoroughly examined to assure removal or reduction of any services
or programs that could be eliminated or reduced in cost.
7. The annual review process should include an assessment to determine if funds
are available to operate and maintain proposed capital facilities and other
public improvements. If funding is not available for operations and
maintenance costs, the City will delay construction of new projects.
8. Any year-end operating surpluses will revert to unappropriated balances for use
in maintaining reserve levels set by policy and will be available for capital
projects and/or one-time General Fund expenditures upon approval of the City
Council.
9. Where practical, the City’s annual budget will include performance measures of
workload, efficiency, and effectiveness.
10. The City’s Comprehensive Financial Plan (Plan) is a long-term picture of the
City’s finances and will be updated annually as part of the annual budget
development. The Plan shall include forecasted expenditures and revenues of
at least five (5) years for each fund; however, a ten (10) year forecast is
preferred. The update will include an analysis of any substantial discrepancies
of previous projections.
Revenues:
1. The City will estimate annual General Fund revenues using an objective,
analytical process; specific assumptions will be documented and maintained.
Budgeted revenues will be estimated conservatively using accepted standards
and estimates provided by the state, other governmental agencies, and/or
reliable economic forecasters when available.
2. Specific revenue sources will not be dedicated for specific purposes, unless
required by law or Generally Accepted Accounting Principles (GAAP). All non-
restricted revenues will be deposited in the General Fund and appropriated
through the budget process.
3. On-going revenues will fund on-going expenditures and a diversified and stable
revenue system will be developed and maintained to protect programs from
short-term fluctuations in any single revenue source.
4. The City shall prepare quarterly reports which discuss revenue projections in
light of actual receipts, and shall provide new projections, as appropriate.
5Page 4 of 10
Appropriations:
1. The City shall, to the extent possible, pay for current year expenditures with
current year revenues. Where authorized activities/equipment remain
incomplete and/or unpurchased, revenues and/or fund balance may be carried
forward at the City Manager's direction to the next fiscal year to support such
an activity/purchase.
2. The City shall avoid budgetary procedures which rely on financial strategies
that defer payment of current operating expenses to future years.
3. Department Heads are responsible for ensuring department expenditures stay
within the department's budgeted appropriation.
4. The City Manager will notify the City Council immediately of the necessity to
increase any departmental appropriation; a budget amendment needs to be
approved by a 4/5
th
vote of the City Council prior to such over-expenditure.
GENERAL FUND RESERVE POLICY
1. It is a goal of the City to maintain a general operating reserve of, at a minimum,
25% of projected General Fund operating expenditures for each fiscal year and
an additional 5% for emergency situations (excluding debt service, fund
transfers, and encumbered funds). These reserves are designed to be used in
the event of a significant financial emergency. Should the General Fund
reserve fall below 30%, the City will implement measures to restore the reserve
percentage to 30% in the following fiscal year.
2. The unreserved portion of General Fund Fund Balances can be loaned to the
Redevelopment Agency or to the Refuse or Sewer Funds for a total amount not
to exceed 50% of the “Unreserved” fund balance shown in the most current
Comprehensive Annual Financial Report (CAFR).
a. Such loans should be for a term of five years or less and have a call
provision of no more than 120 days. Furthermore, the loan must be secured
by assets such as real property, tax increment fund, or secured by the user
fee and/or other sound funding source.
b. The interest rate for a loan originated by the City will be determined by the
Chief Financial Officer and should be set based on rates of investments
and/or loans with comparable terms on or about the date the loan is
executed.
c. Such loan shall be considered as part of the reserve calculation.
3. The City shall establish, at the beginning of each fiscal year, an "appropriated
reserve" to provide funding for special projects/programs approved by City
Council after the annual budget is adopted, for unanticipated expenditures of a
nonrecurring nature, or to meet unexpected increases in current service
delivery costs. The amount of this reserve will be approved annually by the City
Council.
6Page 5 of 10
4. A portion of any uncommitted fund balance in excess of 30% of annual
revenues resulting from the previous fiscal year’s operations should be
committed to capital improvement projects or should be used to retire existing
debt, fund future liabilities or potential legislative impacts, establish or replenish
equipment replacement funds, and/or establish or replenish deferred
maintenance funds.
5. One-time funds should not be used to fund ongoing City programs. Any one-
time revenue receipt during the fiscal year should be recognized and recorded
in a “non-recurring revenue source” category. One-time revenue windfalls
include: sales of city-owned real estate, CalPERS rebates, lump sum (net
present value) savings from debt restructuring, litigation settlement, unexpected
revenues, and other similar sources of revenue as designated by the City
Council.
6. The City should establish and maintain a designated reserve fund for any
anticipated future expenses that will require a certain level of steady funding
source, i.e. unfunded future retiree medical cost and pension cost. It is prudent
to set aside these funding needs each year in order to maintain City’s financial
stability.
FINANCIAL REPORTING POLICIES
Accounting Standards:
1. The City’s accounting and financial reporting systems shall be maintained in
conformance with all state and federal laws, generally accepted accounting
principles (GAAP) and standards of the Governmental Accounting Standards
Board (GASB) and the Government Finance Officers Association (GFOA). The
City will make every attempt to implement all changes to governmental
accounting practices at the earliest practicable time.
Annual Audit:
1. An annual audit will be performed by an independent public accounting firm
with an audit opinion to be included with the City’s published Comprehensive
Annual Financial Report (CAFR).
2. The independent firm will be selected through a competitive bidding process at
least once every five years. The contract will be for an initial period of three
years with two additional one-year options at the City Council’s discretion. The
Budget & Finance subcommittee and City Manager will review the qualifications
of prospective firms and make a recommendation to the City Council. The
audit contract, and any extensions, will be awarded by the City Council.
7Page 6 of 10
OPERATIONAL MANAGEMENT POLICIES
1. The City shall endeavor to avoid committing to new spending for operating or
capital improvement purposes until an analysis of all current and future cost
implications relating to those programs and projects is completed.
2. All departments will participate in the responsibility of meeting policy goals and
ensuring long-term financial health. Future service plans and program
initiatives will be developed to reflect current policy directives, projected
resources and future service requirements.
3. Departmental requests for increases in staffing will be thoroughly analyzed;
only those that meet adopted program initiatives and policy directives will be
considered. To the extent feasible, personnel cost reductions will be achieved
through attrition.
User Fees and Charges and Development Impact Fees:
1. All non-enterprise user fees and charges will be examined or adjusted annually
to determine the direct and indirect cost of service recovery rate. Where direct
services to users can be measured, the City shall consider use of appropriate
fees, charges or assessments rather than general tax funds.
2. User fees and charges for specialized services shall be established at a level
related to the cost of providing such service except where the City Council has
determined there is a public benefit to subsidize the service with tax based
revenue. The acceptable recovery rate and any associated changes to user
fees and charges will be approved by the City Council following public review.
3. A percentage of certain fee revenues, as determined by City Council
Resolution, shall be earmarked and set aside in an irrevocable trust for post
employment benefits. After the fiscal year has ended, the earmark
percentage will be applied to the actual fee revenues received during the
respective fiscal year.
4. The City shall identify the costs associated with new development as a basis for
establishing development impact fees. The long-term benefit of the
development to the City should be considered in establishing such fees.
Grant Management:
1. The City shall actively pursue federal, state and other grant opportunities when
deemed appropriate. Before accepting any grant, the City shall thoroughly
consider the implications in terms of ongoing obligations that will be required in
connection with acceptance of said grant.
2. The term of Grant funded positions should be clearly identified and presented
to the City Council for approval. It is mandatory to disclose if General Fund
revenues will be needed to fund a position after the Grant expires.
8Page 7 of 10
3. Grant funding will be considered to leverage City funds. Inconsistent and/or
fluctuating grants should not be used to fund ongoing programs. Programs
financed with grant monies will be budgeted in separate cost centers, and the
service program will be adjusted to reflect the level of available funding. In the
event of reduced grant funding, City resources may be substituted only after all
program priorities and alternatives are considered.
4. All externally mandated services for which funding is available shall be fully
costed out, including overhead, to allow for complete reimbursement of
expenses.
Revenue Collection Policy:
1. The City will pursue revenue collection and auditing to assure that monies due
the City are accurately received in a timely manner.
2. The City will seek reimbursement from the appropriate agency for State and
Federal mandated costs whenever possible.
3. The City should centralize accounts receivable/collection activities so that all
receivables are handled consistently.
4. Accounts receivable management and diligent oversight of collections from all
revenue sources are imperative. Sound financial management principles
include the establishment of an allowance for doubtful accounts. Efforts should
be made to pursue the timely collection of delinquent accounts. When such
accounts are deemed uncollectible, they should be written-off from the financial
statements.
FINANCIAL MANAGEMENT POLICIES
1. Staff shall keep City Council apprised of financial opportunities available to the
City and shall develop appropriate recommendations.
2. All requests for City Council action shall include an analysis of the immediate
and future fiscal impact of such action. No appropriation for new or expanded
programs or staffing levels shall be approved without identifying the amount
and source of available funds.
3. All externally mandated services for which funding is available shall be fully
costed out, including overhead, to allow for complete reimbursement of
expenses.
Cash Management Investment:
1. Cash and investment programs will be maintained in accordance with California
Government Code Section 53600 et seq. and the City’s adopted investment
policy and will ensure that proper controls and safeguards are maintained.
Pursuant to State law, the City, at least annually, revises, and the City Council
affirms, a detailed investment policy.
9Page 8 of 10
2. Reports on the City’s investment portfolio and cash position will be developed
and presented to the City Council on a quarterly basis, in conformity with the
California Government Code.
3. City funds will be managed in a prudent and diligent manner with emphasis on
safety, liquidity, and yield, in that order.
CAPITAL IMPROVEMENT PROJECT POLICIES
1. A five-year Capital Improvement Plan must be developed and updated
annually, including anticipated funding sources. Capital improvement projects
are defined as infrastructure or equipment purchases or construction which
result in a capitalized asset and have a useful (depreciable) life of two years or
more.
2. The capital improvement plan will identify, where applicable, current operating
maintenance costs and funding streams available to repair and/or replace
deteriorating infrastructure and to avoid significant unfunded liabilities.
3. The City should develop and implement a post-implementation evaluation of its
infrastructures condition on a specified periodic basis, estimating the remaining
useful life, and projecting replacement costs.
4. The City shall actively pursue outside funding sources for all Capital
Improvement Projects. Outside funding sources, such as grants, shall be used
to finance only those Capital Improvement Projects that are consistent with the
five-year Capital Improvement Project and local governmental priorities, and
whose operating and maintenance costs have been included in future operating
budget forecasts.
5. Capital improvement lifecycle costs will be coordinated with the development of
the Operating Budget. Future operating, maintenance and replacement costs
associated with new capital improvements will be forecasted, matched to
available revenue sources, and included in the Operating Budget. Capital
project contract awards will include a fiscal impact statement disclosing the
expected operating impact of the project and when such cost is expected to
occur.
6. The City must carefully seek and analyze the appropriate type of financing
instrument appropriate for financing capital projects. Several options are
available – general obligation debt, fee-supported debt, fund reserves, etc. All
debt financing mechanisms shall be carefully considered and analyzed for fiscal
benefit and cost effectiveness. Long-term borrowing shall be restricted to
projects too large to be financed from current revenues (pay-as-you-go).
Where possible, special assessment, revenue or other self-supporting bonds
shall be used in lieu of general obligation bonds.
10Page 9 of 10
DEBT MANAGEMENT POLICIES
Issuance of Debt:
1. The City will not use long-term debt to pay for on-going operations. The use of
bonds or certificates of participation will only be considered for significant
capital and infrastructure improvements.
2. New debt issues, and refinancing of existing debt, must be analyzed for
compatibility within the City’s overall financial planning within the
Comprehensive Financial Plan. The review shall include, but not be limited to,
cash flow analysis and the maintenance of the City’s bond rating. Annual debt
service shall not produce an adverse impact upon future operations.
3. Debt financing should not exceed the useful life of the infrastructure
improvement with the average (weighted) bond maturities at or below twenty
years.
4. A ratio of current assets to current liabilities of at least 2 to 1 will be maintained
to ensure the City’s ability to pay short-term obligations (i.e. current
assets/current liabilities = 2).
Credit Rating:
1. The City will seek to maintain and, if possible, improve its current bond rating(s)
in order to minimize costs and preserve access to credit.
2. It is the City’s goal to maintain an AAA/Aaa credit rating from all three major
rating agencies. The City may pay the bond insurance which is considered as
part of the rating, however, the rating agency does evaluate the structure of the
bond to validate the bond rating. The factors that contribute to a high rating
include the City’s financial management practices, low debt levels, budgetary
and fiscal controls, and accountability. To support this policy, the City will
continue to maintain its position of full financial disclosure and proactive fiscal
planning.
INTERNAL SERVICE FUNDS
Self Insurance Fund:
1. The Self-insurance fund pays for insurance premiums, benefit and settlement
payments, and administrative and operating expenses. It is supported by
charges to other City funds for the services it provides. These annual charges
for service shall reflect the five-year historical experience and shall be set to
equal the annual expenses of the fund.
2. Self-insurance reserves (Liability and Workers’ compensation) will be
maintained at a level which, together with purchased insurance policies,
adequately indemnify the City’s property, liability, and health benefit risk. A
qualified actuarial firm shall be retained on an annual basis in order to
recommend appropriate funding levels, which will be approved by Council. The
11Page 10 of 10
City shall endeavor to maintain reserves equal to 30% of the net present value
of such future liabilities, with no less than $2 million to cover potential swings in
working capital.
Equipment Replacement Fund:
1. The City shall maintain a fund with a sufficient balance for replacement of
vehicles, equipment (including technology and communication equipment)
2. Vehicle replacement will be accomplished through the use of an amortization
methodology structure. The rates will be revised annually to ensure that
charges to operating departments are sufficient for operation and replacement
of vehicles and other capital equipment (fleet, computers, phones, copiers,
etc.). Replacement costs will be based upon equipment lifecycle financial
analysis.
ENTERPRISE FUNDS (Includes Sewer Fund, Refuse Fund and Transportation
Fund)
1. All Enterprise Funds user fees will be examined annually to ensure that they
recover all direct and indirect costs of service, provide for capital improvements
and maintenance, and maintain adequate reserves.
2. Rate increases shall be approved by the City Council following formal noticing
and a public hearing. Rate adjustments for Sewer Fund operations will be
based on five-year financial plans unless the City Council directs otherwise.
12