HomeMy WebLinkAboutR-2013-012 Operating Budget PolicyRESOLUTION NO. R- 2013 -012
A RESOLUTION APPROVING THE ADOPTION AND IMPLEMENTATION OF AN
OPERATING BUDGET POLICY
WHEREAS, the adoption and updating of various city operating policies and
procedures is advisable from time to time and adoption of an Operating Budget Policy to set
forth the principles the city will follow in preparing the budget together with the responsibilities
of elected officials and city staff in compiling the annual budget as attached hereto in Exhibit
"A" has been reviewed and recommended; and
WHEREAS, the Board of Aldermen find it in the best interest of the citizens of the City of
Riverside to approve the implementation of such policy;
NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF ALDERMEN OF THE
CITY OF RIVERSIDE, MISSOURI, AS FOLLOWS:
THAT adoption and implementation of the Operating Budget Policy attached hereto,
marked Exhibit "A ", and made a part hereof by reference is hereby approved;
PASSED AND ADOPTED by the Board of Idermen and APPROVED by the Mayor of
the City of Riverside, Missouri, the /9Id day o 2013.
Kathleen L. Rose, Mayor
-ATTEST.
� Y p
Robin Litfrell, City Clerk
City of Riverside, MO
Operating Budget Policy
Objective - The objective of the budget policy is to set out:
• The principles which the municipality will follow in preparing each budget
• The responsibilities of the Mayor, Board of Aldermen, City Administrator, the Finance Officer and other senior
managers in compiling the budget
State of Missouri Requirement — In compliance with Section 67.010 RSMo, the Board of Aldermen will adopt an
operating budget in each year. The operating budget will include the following:
• A budget message describing the important features of the budget and major changes from the preceding year;
• Estimated revenues to be received from all sources for the budget year, with a comparative statement of actual
or estimated revenues for the two years next preceding, itemized by year, fund and source;
• Proposed expenditures for each department for the budget year, with a comparative statement of actual or
estimated expenditures for the two years next preceding, itemized by year, fund, activity, and object;
• The amount required for the payment of interest, amortization, and redemption charges on the debt of the City
of Riverside;
• A general budget summary.
Balanced Budget —The operating budget approved by the Board of Aldermen in any given year must be balanced; which
means that the total proposed expenditures from a fund shall not exceed the estimated revenues to be received plus
any unencumbered fund balance.
Basis of Budgeting - The City of Riverside develops its Operating and Capital Budgets on a modified accrual basis. Only
revenues that will be earned and available during the budget year are included in the revenue budget; expenditures are
recorded when incurred based upon receipt of goods and services or the creation of a legal obligation to pay.
For budgeting purposes capital assets are not amortized over their useful lives. For accounting purposes, once the asset
is acquired and put into service, the cost of the asset is depreciated (expensed over its useful life). For example, if the
asset cost $1,000,000 and is expected to last 10 years, $100,000 would be expensed each year representing one -tenth of
the asset's cost. The City does not budget for depreciation as it is an approximation of the asset's consumption and, as
such, is a non -cash item.
Budget Development —
Funds available to be budgeted will be established by the revenue and expenditures assumptions set by the Board of
Aldermen.
Available funds will be allocated in the following order:
• To maintain stabilization fund balance as set by fund balance policy
• Debt service expenditures
• Board of Aldermen priorities of following
• Current service levels of operations
• Addition or elimination of service levels
• Capital equipment
• Capital Improvement Projects
• Contingency funds
Adopted February 19, 2013
Contingency Funds —A contingency fund is the money approved in the operating budget to provide funding for one-
time expenditures that were not known or expected at the time the operating budget was approved by the Board of
Aldermen. Contingency funds may only be used for: (i) one -time non - recurring costs that were not identified at the time
the operating budget was approved; and (ii) unforeseen expenditures resulting from economic, climatic, in -year
legislative changes from senior levels of government and legal settlements. The funds shall not be used for over -
expenditures by programs, and approval must be obtained by the Board of Aldermen for any use of the contingency
funds.
Budget Calendar
January Mayor and Board of Aldermen review financial position and set goals
• Ending Fund Balance
• Board Budget Priorities
• Revenue Assumptions
February Finance Division distributes budget worksheets to departments
• Current Service Level Request
• New Programs or Personnel
• Capital Equipment Replacement
• Capital Improvement Requests
Early March Departments submit budget requests to Finance Division for initial review
Late March City Administrator, Finance Division and individual departments review requests
April City Administrator, Finance Division, and department heads set budget priorities
May City Administrator presents Staff Recommended Budget
June Board of Alderman adopt budget by resolution
Operating Budget Amendments
Adjustments to the Operating Budget require the following level of approval.
Object Account Department Head may approve transferring budget from one object
account to another object account.
Division /Department City Administrator may approve transferring budget from division to
another division within a department.
Fund Board of Aldermen prior approval required to increase the funds total
budget
Adopted February 19, 2013