(A resolution establishing policy for preparing the Hood River Municipal Budget, replacing Resolution 2012-22)
WHEREAS the State of Oregon requires all cities to maintain balanced budgets;
WHEREAS the City Council wishes to promote maximum transparency in the budgeting process;
WHEREAS the City Council desires to ensure the City uses the most sustainable, fiscally responsible budgeting processes practicable;
WHEREAS the City’s financial health will benefit from an increased planning horizon;
NOW, THEREFORE, BE IT RESOLVED by the Hood River City Council that:
1. The budget will show an operating surplus of at least $100,000 per year in the General Fund. The $100,000 will be indexed for inflation annually.
2. The priority of funding reserves in the General Fund is first unrestricted ending balance (contingency plus unappropriated ending fund balance), then equipment replacement, then accrued compensated absences.
3. The General Fund shall maintain an unrestricted ending fund balance of at least 15% of regular General Fund operating revenues except for extraordinary circumstances. The opportunity to internally-finance capital acquisitions will also be considered when establishing the unrestricted reserve amount.
4. As General Fund debt service is retired (regardless of whether internally or externally financed), the amount previously budgeted to repay the loan will be added to the annual amount transferred to the equipment replacement fund. This methodology will continue until the requirements for equipment replacement are funded.
5. Equipment Replacement Reserves will be considered funded when the backlog amount is budgeted and the transfer to equipment replacement equals the annual amount from the equipment replacement schedule.
6. The accrued compensated absences liability will be calculated annually and presented to the Budget Committee. This reserve will be considered to be funded when 100% of the liability for all employees who are PERS age-eligible is funded and the liability for all other employees is 25% funded. After funding this reserve, the annual amount of change in the accrued compensated absences liability calculation will be funded each year.
7. Each year, the City Council shall review the actual beginning fund balances shown in the external audit. If the General Fund amount is in excess of the budgeted amount, the City Council shall determine the disposition of the excess.
8. All operating funds shall have a budgeted contingency reasonable to the purpose of the particular fund.
9. Fund accounting and expense allocation shall reasonably reflect actual intended resource use as established by City Council resolution, goal setting, and City management policies.
10. Special revenue funds shall be created only as needed to segregate funds due to statutory requirements, ordinances or contractual commitments.
11. Except for extraordinary circumstances, current City services shall be funded by current resources. Under normal circumstances, cash carryover from previous years shall be used only after reserves are funded.
12. The City Budget Officer shall annually present to the Budget Committee a three-year forecast of revenues and personnel service expenses. Forecasts will be based on a reasonable indexing of the current year and the Budget Officer will also note significant changes in revenue expectations. Forecasts will not be included in the annual Budget Message.
13. The City Council shall, as part of annual goal setting, prepare a resolution with any specific guidance for the following fiscal year’s budget preparation.
14. The Budget Message, as prepared by the Budget Officer, will present a clear description of the financial policies for the coming fiscal year as outlined by the City Council at Goal Setting. The Budget Message will also describe the changes from the prior year budget in sufficient detail to provide transparency and assist the public and Budget Committee to understand the proposed budget.
15. The City Council shall approve all collective bargaining agreements.
16. The City shall have a replacement plan for all motorized equipment used in ongoing operations.
17. The City shall annually review its fees or charges for services provided and consider the extent to which cost of services is recovered. Annual automatic increases should be indexed to an acceptable factor.
18. Capital facilities improvement plans shall be reviewed annually for progress and compliance.
Adopted this 22 day of February, 2016, and effective for the FY 2016-17 budgeting process.
Paul Blackburn, Mayor
Jennifer Gray, City Recorder