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Consideration of and action on amending the Financial Management Policy.
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Summary: The City's Financial Management Policy was last reviewed and updated on September 25, 2018 as part of the annual review. While the policy is reviewed annually and, if necessary, updated at that time, the policy may also be updated during the year. At this time, the City recommends two updates to the Financial Management Policy as it relates to (1) the use of contingency funds in an emergency situation and (2) purchasing.
Section III. Budgeting and Long Range Financial Planning includes a subsection for an "Amended Budget." The City recommends an update to the Financial Management Policy to address the immediate need to expend funds in an emergency or unforeseen circumstance with funding for such an expenditure from contingency funds, unassigned fund balance, or prior year revenue. City Council action would follow at their next regular meeting.
Typically the City's annual budget includes a contingency line item in the General Fund (Dept. 105-General Government) as a funding source for emergency or unforeseen expenditures that may occur during the fiscal year. For accounting purposes, an expenditure that will be funded by the contingency in Dept. 105 will still be charged to the particular department's budget, not the budget for Department 105. Until the City Council has approved the use of these contingency funds, by way of a budget amendment to cover the emergency or unforeseen expenditure in a departmental budget, the expenditure of those funds equates to spending funds not appropriated in that departmental budget. By its very nature, an emergency or unforeseen circumstance may need to be addressed prior to City Council approval of a budget amendment to cover the expenditure. To avoid potentially costly delays (e.g., additional damage to an operating system requiring repair), the City recommends that the Financial Management Policy be amended to allow the Cit...
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