07-10-07 FPAC Agenda - Laserfiche WebLink

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The jurisdiction's adopted financial policies should be used to frame major policy • initiatives and be summarized in the budget document. It is further recommended that these policies, along with any others that may be adopted, be reviewed during the budget process. Professional staff should review the policies to ensure continued relevance and to identify any gaps that should be addressed with new policies. The results of the review should be shared with the governing board during the review of the proposed budget. Policy categories that should be considered for development, adoption and regular review are as follows: Financial Planning Policies These policies address both the need for a long-term view and the fundamental principle of a balanced budget. At a minimum,jurisdictions should have policies that support: 1. Balanced Budget-A jurisdiction should adopt a policy(s)that defines a balanced operating budget, encourages commitment to a balanced budget under normal circumstances, and provides for disclosure when a deviation from a balanced operating budget is planned or when it occurs. (NACSLB Practice 4.5) 2. Long-Range Planning-A jurisdiction should adopt a policy(s)that supports a financial planning process that assesses the long-term financial implications of current and proposed operating and capital budgets,budget policies, cash management and • investment policies,programs and assumptions. (NACSLB Element 9, GFOA Recommended Practice)1 3. Asset Inventory-A jurisdiction should adopt a policy(s)to inventory and assess the condition of all major capital assets. This information should be used to plan for the ongoing financial commitments required to maximize the public's benefit. (NACSLB Practice 2.2)2 Revenue Policies Understanding the revenue stream is essential to prudent planning. Most of these policies seek stability to avoid potential service disruptions caused by revenue shortfalls. At a minimum jurisdictions should have policies that address: 1. Revenue Diversification -A jurisdiction should adopt a policy(s)that encourages a diversity of revenue sources in order to improve the ability to handle fluctuations in individual sources. (NACSLB Practice 4.6) 2. Fees and Charges - A jurisdiction should adopt policy(s) that identify the manner in which fees and charges are set and the extent to which they cover the cost of the service provided. (NACSLB Practice 4.2) • I See also GFOA's recommended practice on Establishment of Strategic Plans(2005). 2 See also GFOA's recommended practice on Sustainabilitv(2002).