2024-03-12 Council FIN Packet1
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ti Agenda
Edmonds City Council
1,00
FINANCE COMMITTEE
CITY COUNCIL CONFERENCE ROOM
121 - 5TH AVENUE N, EDMONDS, WA 98020
MARCH 12, 2024, 5:30 PM
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COMMITTEE MEMBERS: WILL CHEN (CHAIR), JENNA NAND, COUNCIL PRESIDENT (EX-OFFICIO
MEMBER)
CALL TO ORDER
COMMITTEE BUSINESS
1. Electronic Funds Transer (EFT) Policy (10 min)
2. Fund Balance/Reserve Policy Amendment Discussion (20 min)
3. January Monthly Report (15 min)
ADJOURNMENT: 7:30 PM
Edmonds City Council Agenda
March 12, 2024
Page 1
2.1
City Council Agenda Item
Meeting Date: 03/12/2024
Electronic Funds Transer (EFT) Policy
Staff Lead: Kim Dunscombe
Department: Administrative Services
Preparer: Kimberly Dunscombe
Background/History
The State Auditors Office (SAO) recommends the City implement a written policy to include all elements
required by the BARS manual 3.8.11 and in accordance with RCW 39.58.750 for all electronic funds
transfer (EFT) transactions. The attached policy effectively achieves the goals and recommendations
outlined by the SAO.
Staff Recommendation
Forward City of Edmonds Electronic Funds Transfer policy to the next available consent agenda.
Narrative
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Attachments:
Resolution XXX - Edmonds EFT Policy with Attachment A
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2.1.a
RESOLUTION NO. XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EDMONDS,
WASHINGTON, ADOPTING THE ELECTRONIC FUNDS TRANSFER (EFT)
POLICY AS ATTACHED HERETO.
WHEREAS, the City of Edmonds is committed to the highest standards of responsible financial
management; and
WHEREAS, the City Council Finance Committee reviewed the Electronic Funds Transfer Policy at
the March 12, 2024 Finance Committee meeting; and
WHEREAS, best practice shows that finance related policies should be formally adopted by
Resolution; now therefore,
THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, HEREBY RESOLVES
AS FOLLOWS:
Section 1. ADOPT THE CITY OF EDMONDS ELECTRONIC FUNDS TRANSFER (EFT)
POLICY. The city council hereby adopts the following attached document:
City of Edmonds Electronic Funds Transfer (EFT) Policy to read as set forth in Attachment A
hereto, which is attached hereto and incorporated herein by this reference as if set forth in full.
1. RESOLVED this day of 2024.
CITY OF EDMONDS
MAYOR, MIKE ROSEN
ATTEST:
CITY CLERK, SCOTT PASSEY
FILED WITH THE CITY CLERK:
PASSED BY THE CITY COUNCIL:
RESOLUTION NO.
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2.1.a
Attachment A
1.0 PURPOSE:
The City of Edmonds recognizes the use of various electronic payment methods as a safe and efficient
method to process certain disbursements. The City of Edmonds is committed to establishing controls and
procedures for the utilization of electronic funds transfer (EFT). This EFT Policy outlines the necessary
internal controls and incorporates best practices to ensure secure, efficient and compliant electronic
funds transfers within the City of Edmonds.
2.0 FUNDS AFFECTED:
All City funds.
3.0 REFERENCES
• RCW 82.32.085: Electronic funds transfer —Generally. (wa.gov)
• RCW 39.58.750: Receipt, disbursement, or transfer of public funds by wire or other electronic
communication means authorized. (wa.gov)
• BARS Manual 3.8.11 Electronic Funds Transfer (EFT) - Disbursement
• GFOA Best Practices Electronic Payments
4.0 DEFINITIONS
• Automated Clearing House (ACH): movement of funds in a batch process, which is best for high
volume, low dollar transactions such as payroll, expense reimbursement, and routine vendor
payments, as the cost per transaction is low relative to other forms of electronic payment.
• Electronic Funds Transfer (EFT): The electronic exchange means any transfer of funds, which is
initiated through an electronic terminal, telephonic instrument, or computer so as to order,
instruct, or authorize a financial institution to debit or credit a checking or other deposit
account. Wire transfers and ACH payments are examples of EFT's. This form of disbursement is
authorized by RCW 39.58.750.
• Wire Transfer: immediate movement of funds between bank accounts with guaranteed
settlement, which is most suitable for high dollar transactions because the cost per transaction
is high relative to other forms of electronic payment.
5.0 ELECTRONIC FUNDS TRANSFER POLICY
The Administrative Services Department is the only department authorized to initiate EFT's. This policy
applies to all employees and authorized individuals involved in initiating, approving, or managing
electronic funds transfers on behalf of the City. All EFT payments are subject to applicable Purchasing
Policies and all other policies and procedures in relation to the purchase of goods and services.
The following concepts are adhered to when developing procedures.
• Payroll ACH Payments: Payroll ACHs are initiated by the Accounting Specialist that is responsible
for processing and uploading payroll ACH files to the bank's secure site. After the file is
uploaded, a secondary approval from either an Accountant or the Director of Administrative
Services is required to complete the transaction.
• Accounts Payable Template EFT's: Director preapproved templates are used for low dollar
routine vendor EFT's. These payments are initiated with all the same procedures and controls
that govern disbursements by any other mechanism. Template EFTS are restricted to an
Accountant or the Director and necessitating only one approval at the time of transfer.
• Accounts Payable One-time EFT: One-time vendor EFTS are initiated with all the same
procedures and controls that govern disbursement by any other mechanism. Only Accountants
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2.1.a
Attachment A
and the Director of Administrative Services are authorized to initiate a one-time EFT, with two
separate approvals required.
• ACH Vendor Payments: The procedure to initiate an ACH payment is subject to the same
procedures and controls that govern disbursement by any other mechanism including a check
payment. ACH payments will not be made without proper authorization of affected parties.
Currently, with limited exceptions, vendors are paid through a check process.
6.0 INTERNAL CONTROLS
The following internal controls have been adopted to ensure all available safety precautions are utilized.
• Authorization and Access Control:
o Access to initiate or approve EFTs shall be restricted to authorized personnel only.
o Authorized users initiating or approving bank transactions shall have separate User IDs
and bank tokens.
o Authorization levels shall be clearly defined based on job roles and responsibilities.
o Access to EFT systems and applications must be regularly reviewed and updated
according to personnel changes within the organization.
o All EFT transactions must be conducted over secure, encrypted channels to protect
sensitive financial information.
• Transfer Verification and Approval:
o All EFT transactions must be verified and approved by authorized personnel before
processing.
o Dual authorization shall be required for significant or high -value transactions, involving
multiple personnel.
o Approval processes must be clearly documented and followed for each type and
amount of EFT.
• Segregation of Duties:
o Responsibilities for initiating, approving, and reconciling EFTS shall be divided among
multiple individuals to prevent any single point of failure or fraud.
o Individuals responsible for initiating EFTs should not be responsible for reconciling bank
statements or account balances.
o Multi -factor authentication (MFA) must be tools used for access to EFT systems to
enhance security.
• Record Keeping and Audit Trails:
o Complete and accurate records of all EFT transactions, including approvals, must be
maintained and retained in compliance with regulatory requirements.
o Audit trails of all EFT activities, including date, time, user, transaction details, and
approvals, shall be generated and preserved for auditing purposes.
• Training and Awareness:
o Regular training and awareness programs on EFT policies, procedure, and best practices
shall be provided to employees involved in EFT transactions.
o Training should cover security protocols, compliance requirements, and proper handling
of EFT -related responsibilities.
• Incident Reporting and Response:
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2.1.a
Attachment A
o Any suspected or actual EFT fraud or security breaches must be reported immediately to
designated personnel for investigation and appropriate action.
• Compliance with Laws and Regulations:
o All EFT activities shall comply with applicable laws and regulations, and industry
standards, including but not limited to the Payment Card Industry Data Security
Standard (PCI DSS), the Electronic Fund Transfer Act (EFTA), and the Bank Secrecy Act
(BSA).
• Compliance and Enforcement:
o Violation of this policy may result in disciplinary action, up to and including termination.
Compliance with this policy is mandatory for all employees and authorized individuals
involved in EFT transactions.
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2.2
City Council Agenda Item
Meeting Date: 03/12/2024
Fund Balance/Reserve Policy Amendment Discussion
Staff Lead: Councilmember Will Chen
Department: City Council
Preparer: Beckie Peterson
Background/History
On July 2, 2019 Council passed Resolution No. 1433 adopting the Fund Balance / Reserve Policy. Article
VI of this Fund Balance /Reserve Policy states that the policy should be reviewed every five years.
(Resolution attached)
During the January 9, 2024 Finance Committee, it was discussed to make the review part of the
committee's workplan for the year. The plan was to form a policy review group (Councilmembers Chen
& Nand and 1-2 Finance staff) to review and rewrite the policy prior to review by the city attorney.
(Minutes attached)
A Finance Policy Advisory Group was formed to review and make recommendations to strengthen the
existing Fund Balance Reserve Policy. This group includes Councilmember Chen, Councilmember Nand,
and citizen advisors Dave Teitzel, Diane Buckshnis, Darrol Haug and Thatcher Baudendistel.
Recommendation
Discuss and determine next steps for city attorney review and consideration by full council.
Narrative
In November 2023, Council passed Resolution 1532 (attached), declaring a fiscal emergency and
authorizing the use of General Fund Operating Reserves. This was the first time the 2019 Fund Balance
Reserve Policy was put to the test. As a result, there are several areas identified as needing clarification
or refinement.
The Finance Policy Advisory Group established the following goals to accomplish this policy
improvement effort:
1. Provide clear guidance for the appropriate level of Fund Balance Reserve for our city.
2. Set reporting and monitoring requirements.
3. Define the appropriate triggering warning mechanism.
4. Set Council approval before any Restricted Reserve can be used.
5. Define replenishment timeline and requirements.
6. Obtain consensus between the Council and Administration that our city's finances should be
managed responsibly, and that uncommitted fund balances should not be spent down to
the ceiling of the GF reserve level.
7. Earn a consistent AAA bond rating from the bond rating agencies.
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2.2
8. Ensure early action is taken to stabilize the city's finances when projections show we are
approaching using reserves.
9. Establish a clear mechanism to restore reserves that are used, including specific reporting
requirements to Council that must be regularly scheduled until the reserves are replenished.
10. Ensure all definitions relating to the General Fund reserve are included in the policy and that
all Councilmembers and members of the Administration affected by the policy clearly
understand them.
The Finance Policy Advisory Group reviewed Fund Balance Reserve Policies of several cities comparable
to Edmonds (attached).
Proposed changes to the Fund Balance Reserve Policy have been shared with Mike Bailey of the Blue
Ribbon Panel, Finance Department and Mayor Rosen. (Attached, both red -line and clean versions, for
the committee review).
Attachments:
Resolution 1433
Minutes Finance Committee January 9 2024
Resolution 1532
Mukilteo Financial Balance Reserve Policy 2019
Issaquah Fiscal Policy 2024
Bainbridge Island financial and budget policies 2018
Redmond Fiscal Policy
Fund —Bala nce_Reserve_Policy Finance Committee edits 3.5.24 - Redlined
Fund —Bala nce_Reserve_Policy Finance Committee edits 3.5.24 - Clean
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2.2.a
RESOLUTION NO. 1433
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EDMONDS,
WASHINGTON, ADOPTING THE FUND BALANCE / RESERVE POLICY
AS ATTACHED HERTO.
WHEREAS, the City Council heard a detailed introduction to the City's Fund Balance / Reserve
Policy at the May 7, 2019 council meeting; and
WHEREAS, the May 7, 2019 introduction focused on amending the Fund Balance / Reserve
Policy to incorporate the Governmental Accounting Standards Board Pronouncement No. 54
Fund Balance Reporting and Governmental Fund Type Definitions, and
WHEREAS, the May 7, 2019 introduction focused on amending the Fund Balance / Reserve
Policy for the City Contingency Reserve Fund to incorporate Washington State Revised Code of
Washington Chapter 35A.33.145, setting statutory limitations at $0.375 per $1,000 of assessed
property valuation; and
WHEREAS, the May 7, 2019 introduction focused on amending the Fund Balance / Reserve
Policy target levels for the City; now therefore,
THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, HEREBY
RESOLVES AS FOLLOWS:
Section 1. ADOPT THE CITY OF EDMONDS FUND BALANCE / RESERVE POLICY. The
city council hereby adopts the following attached document:
1. City of Edmonds Fund Balance / Reserve Policy to read as set forth in Attachment A
hereto, which is attached hereto and incorporated herein by this reference as if set forth in
full.
RESOLVED this 2nd day of July, 2019.
CITY OF EDMONDS
t
MA OR, DA E EARLIN a
ATTEST:
C CLERK, SCOT"I` SEY
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2.2.a
FILED WITH THE CITY CLERK: June 28, 2019
PASSED BY THE CITY COUNCIL: July 2, 2019
RESOLUTION NO. 1433
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2.2.a
City of Edmonds
Fund Balance Reserve Policy
July 2019
w
Q
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2.2.a
Table of Contents
DRAFT .................................................... ...... ............................. ,................ Error! Bookmark not defined.
ARTICLEI INTRODUCTION................................................................................................. . ................... 5
ARTICLE II CRITERIA FOR ESTABLISHING APPROPRIATE FUND BALANCE RESERVE
LEVELS......................................................................................................................................................... 6
Section1. Volatility...................................................................................................................................6
Section2. Operating Fund Size.................................................................................................................6
Section 3. Purpose of Fund Balance Reserves...........................................................................................6
Section4. Bond Ratings.............................................................................................................................6
ARTICLE III COMMITTED GENERAL FUND BALANCE RESERVES POLICY.................................6
Section 1. Establishment and Purpose of Operating General Fund Operating Reserve ............................ 6
ARTICLE IV CONTINGENT RESERVE FUND BALANCE POLICY.....................................................7
ARTICLE V ANNUAL FUND BALANCE TYPES - STATUS REPORT.................................................9
ARTICLE VI FIVE-YEAR RESERVE RATE REVIEW.............................................................................9
ARTICLE VII DEVIATIONS FROM POLICY........................................................................................... 9
ARTICLEVIII DEFINITIONS.....................................................................................................................9
ARTICLEIX EFFECTIVE DATE..............................................................................................................12
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2.2.a
ARTICLE I INTRODUCTION
The overall objective of Fund Balance/Reserve Management Policy is to define that portion of fund balance
that is unavailable to support the current budget. In many ways, fund balance represents working capital,
which can either be used as a liquidity reserve or for spending in future years. A comprehensive fund
balance/reserve management policy provides guidelines for the major funds of the City of Edmonds and
provides a structured approach in setting reserve levels in specifically designated funds.
This Fund Balance/Reserve Management Policy is intended to guide prudent use of resources to provide
for the much needed services to taxpayers and to maintain sound management policies. It is essential that
governments maintain adequate levels of fund balance reserves to mitigate risks and provide a back-up for
revenue shortfalls.
Policy
It is the policy of the City of Edmonds to provide for the continuity of City government by planning ahead
for economic uncertainties and unforeseen or unplanned major expenditures. In order to achieve reserve
goals the City must exercise prudent debt and liability management policies and follow sound fiscal
management policies that prioritize the City's core services. This policy establishes reserve fund balance
accounts that will provide funding for emergencies, economic uncertainties and for unanticipated operating
expenses or revenue shortfalls. In addition, this policy incorporates provisions of Governmental
Accounting Standards Board Statement (GASB) no. 54, Fund Balance Reporting and Governmental Fund
Type Definitions.
Objectives
The purpose of this Fund Balance/Reserve Management Policy is to assist the City in the pursuit of the
following equally important objectives:
1. Build adequate reserves which will provide the City the resources necessary for financial
stabilization, particularly during times of unforeseen emergencies and economic downturns;
2. Establish sound fiscal reserve policies that will serve as the foundation for ensuring that
strong fiscal management policies guide future City decisions;
3. Provide prudent guidelines regarding the establishment, use and replenishment of City
committed or assigned fund balances/reserves;
4. Establish a process for periodic reporting and review of the City's various fund balances
(reserves); and
5. Enhance the City's credit ratings received from rating institutions through the establishment
of clearly delineated Fund/Reserve policies that promote strong fiscal management;
6. Establish reserve policies that are in full compliance with GASB 54 financial reporting
requirements.
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2.2.a
ARTICLE II CRITERIA FOR ESTABLISHING APPROPRIATE FUND BALANCE RESERVE
LEVELS
There are key elements that must be reviewed and analyzed to determine the appropriate size of a given
fund balance reserve. Failure to follow the guidelines established in this policy can result in developing
unattainable fund reserve goals or unsustainable fund balance reserve levels. The following criteria shall
be used in determining the appropriate fund balance reserve levels:
Section 1. Volatility.
The predictability and/or the volatility of its revenues or its expenditures (i.e., higher levels of fund balance
reserves may be needed if significant revenue sources are subject to unpredictable fluctuations or if
operating expenditures are highly volatile).
Section 2. Operating Fund Size
The overall size of the fund's budgetary events should be taken into consideration in setting the required
fund balance reserve level and type for a particular fund.
Section 3. Purpose of Fund Balance Reserves
Another consideration for determining the size of each reserve will be the purpose of the reserve: Is there
significant or perceived exposure to one-time outlays (e.g., disasters, immediate capital needs, state
budget cuts, or are there potential drains upon fund resources from other funds, or conversely, are there
potential reductions in funding transfers from other funds)?
Section 4. Bond Ratings
The potential impact on the entity's bond ratings and the corresponding increased cost of borrowed funds.
ARTICLE III COMMITTED GENERAL FUND BALANCE RESERVES POLICY
This Policy shall establish a committed fund balance reserve within the General Fund, define funding levels
and call the reserve the General Fund Operating Reserve. The purpose of the reserve is for meeting
economic uncertainties, and unanticipated expenses or revenue shortfalls. This Policy requires the City to
establish and maintain a General Fund Operating Reserve, within the General Fund, in an amount equal to
or greater than 16% of the General Fund's Adopted Annual O erating Expenditure Budget. If it is
determined that the reserve balances are not adequate, the Finance Director shall propose an amendment to
these policies.
A detailed accounting of this reserve account will be maintained by the Finance Department to show
deposits, withdrawals (when authorized pursuant to policies contained herein) and interest earned. All
accounting for these accounts shall be recorded in the City's ERP system. A detailed report, prepared by
the Finance Department, shall be presented annually to the Council.
Section 1. Establishment and Purpose of Operatin_g General Fund Operating Reserve
A separate balance sheet account shall be setup by the Finance Director for the General Fund Operating
Reserve, to be used in instances of fiscal emergencies that include: economic uncertainties, unforeseen
emergencies and unanticipated operating expenses or revenue shortfalls.
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2.2.a
The Mayor has the power to declare a fiscal emergency based upon one of the following:
1) A natural catastrophe;
2) An immediate threat to health and public safety; or
3) A significant decline in General Fund revenues.
The fiscal emergency declared by the Mayor must be approved by a simple majority of the City Council.
Limitations of Fund Use
Any use of the committed General Fund Operating Reserves shall be used only in cases of fiscal emergency
and shall not be used to augment ongoing budgetary/operating spending increases. The committed General
Fund Operating Reserve may also be used for one-time non -reoccurring expenditures and/or capital projects
(operations and maintenance shall not be included), all as submitted by the Mayor and approved by the
Council.
The amount of funds to be withdrawn from this committed fund balance reserve shall be determined by the
Mayor. In his/her presentation to the Council, the Mayor or his/her designee shall include a detailed list of
how the funds will be applied. A simple majority vote of the Council shall be required to approve the
amount and use of funds.
Transition Policy
Council adoption of this policy will trigger moving an amount not less than 16% of the General Fund's
unrestricted fund balance to the General Fund Operating Reserve.
General Fund Operating Reserve Replenishment
If any use of the committed General Fund Operating Reserve has occurred, the Finance Director must
present to Mayor and City Council an annual Replenishment Report during the month of November. The
Replenishment Report must be presented each year, until the Reserves are fully replenished. The
Replenishment Report must include the following information:
1) Amount of Reserves used
2) Whether it is anticipated additional Reserves will be needed in the following budget cycle, or
3) If no additional Reserves are needed, then the Replenishment Report must include a plan for
replenishing the Reserve to policy mandated levels.
The committed General Fund Reserve shall be restored pursuant to the guidelines delineated below:
1) If a reserve is drawn down by 0-10% of reserve fund balance, then a solution to replenish to at
least the minimum shall be structured over a 1 to 3 year period.
2) If a reserve is drawn down by 11-25% of reserve fund balance, then the budgetary plan to restore
the reserve shall be structured over a 3 to 5 year period.
3) If the reserve is drawn down by 26-50% of reserve fund balance, then a budgetary plan shall be
implemented to return the reserve level to between 75% and 100% of the minimum balance over a
5 to 7 year period.
ARTICLE IV CONTINGENT RESERVE FUND BALANCE POLICY
This Policy shall establish a fund and define funding levels for a committed Fund Balance Reserve to
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2.2.a
be called the Contingent Reserve Fund. The primary purpose of the reserve is for meeting
emergencies of the City and, secondarily, if the General Fund Operating Reserve have been
exhausted, the Contingent Reserve Fund can be use in times of economic uncertainties, and for
unanticipated expenses or revenue shortfalls. The target balance of the Reserve shall 1) not exceed the
limitations set forth by RCW 35A.33.145, which sets the statutory maximum at $0.375 per $1,000 of
assessed valuation and 2) when combined with the General Fund Operating Reserve, the two fund
balance reserves shall not exceed 20% of the General Fund's Adopted Annual Operating Expenditure
Budget. In other words, if the General Fund Operating Reserve balance equals 16% of operating
budget, then the Contingent Reserve Fund balance cannot exceed 4% of the operating budget. It
further requires a simple majority vote of Council with a statement declaring the reason for their use.
A detailed accounting of the Fund shall be maintained by the Finance Department to show deposits,
withdrawals (when authorized pursuant to policies contained herein) and be presented annually to the
Council.
The Mayor has the power to declare a fiscal emergency based upon one of the following:
1) A natural catastrophe;
2) An immediate threat to health and public safety; or
3) A significant economic decline in General Fund revenues.
The fiscal emergency declared by the Mayor must be approved by a simple majority of the City Council.
Limitations of Fund Use
Any use of the committed Contingent Reserves shall be used in cases of fiscal emergency, shall not be used
to augment ongoing budgetary/operating spending increases and should be used only after the General
Fund Operating Reserves have been exhausted or when City Council approves specific used of the
committed Contingent Reserve for one-time non -reoccurring expenditures and/or capital projects
(operations and maintenance shall not be included).
The amount of funds to be withdrawn from this committed fund balance reserve shall be determined by the
Mayor. In his/her presentation to the Council, the Mayor or his/her designee shall include a detailed list of
how the funds will be applied. A simple majority vote of the Council shall be required to approve the
amount and use of funds.
Contingent Reserve Replenishment
If any use of the committed Contingent Reserve has occurred, the Finance Director must present to Mayor
and City Council an annual Replenishment Report during the month of November. The Replenishment
Report must be presented each year, until the Reserves are fully replenished. The Replenishment Report
must include the following information:
1) Amount of Reserves used
2) Whether it is anticipated additional Reserves will be needed in the following budget cycle, or
3) If no additional Reserves are needed, then the Replenishment Report must include a plan for
replenishing the Reserve to policy mandated levels.
The committed Contingent Reserve shall be restored pursuant to the guidelines delineated below:
1) If a reserve is drawn down by 0-10% of reserve fund balance, then a solution to replenish to at
least the minimum shall be structured over a 1 to 3 year period.
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2.2.a
2) If a reserve is drawn down by 11-25% of reserve fund balance, then the budgetary plan to restore
the reserve shall be structured over a 3 to 5 year period.
3) If the reserve is drawn down by 26-50% of reserve fund balance, then a budgetary plan shall be
implemented to return the reserve level to between 75% and 100% of the minimum balance over a
5 to 7 year period.
ARTICLE V ANNUAL FUND BALANCE TYPES - STATUS REPORT
Once a year, in August, the City Finance Director shall present to the Council Finance Committee a
comprehensive report on the City's fund balance reserve types as of June 30th. The report shall include an
updated fund balance reserve level for each fund balance type. This report shall include the following
funds:
1. General Fund Operating Reserve balance;
2. Contingency Reserve Fund balance.
ARTICLE VI FIVE-YEAR RESERVE RATE REVIEW
Every five years, during the annual budget hearings, the Mayor, based upon a comprehensive financial and
economic review of all City fund balance types and in consultation with the City Finance Director, and
Department Directors as necessary, shall make recommendations to the City Council for either maintaining
existing fund balance reserve polices or revising fund balance reserve policies including percentage ranges
established by category herein and replenishment requirements by categories established herein.
ARTICLE VII DEVIATIONS FROM POLICY
No deviations from the fund balance reserve polices set forth in this Policy will be allowed except as
approved by a simple majority of vote by the Council. This includes any increase or decrease in the base
fund balance reserve levels established by this policy and expenditures from fund balance reserve accounts
for anything other than the intended budgeted use of said fund balance.
ARTICLE VIII DEFINITIONS
Budget - A plan of financial operation containing an estimate of proposed expenditures for a given period
(usually a fiscal year) and a proposed forecast of revenues (receipts) to cover them. A budget is also a
plan that outlines an organization's financial and operational goals and strategies in monetary terms.
Capital Expenditures are expenditures incurred when monies are spent either to buy fixed assets or to add
to the value of an existing fixed asset with a useful life that extends beyond the fiscal year. In accounting,
a capital expenditure is added to an asset account ("capitalized"), thus increasing the asset's basis (the cost
or value of an asset). The general rule (even for municipalities) is that if the property acquired has a useful
life longer than the fiscal year, the cost must be capitalized. The capital expenditure costs are then amortized
or depreciated over the life of the asset in question.
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2.2.a
Comprehensive Annual Financial Report (CAFR) - A CAFR is a set of financial statements for a state,
municipality or other governmental entity that comply with the accounting requirements established by
the Governmental Accounting Standards Board (GASB). It must be audited by an independent auditor
using generally accepted government auditing standards.
The CAFR consists of three sections: Introductory, Financial and Statistical.
The Introductory section orients and guides the reader through the report. The Financial section presents
the entity's basic financial statements as well as notes to the statements and the independent auditors'
report. The Statistical section provides additional financial and statistical data, including data about
financial trends that may better inform the reader about the government's activities.
Council - Means the legislative body (the city council) that governs the City of Edmonds.
Expenditure - The actual payment of cash or cash equivalent for goods delivered or services rendered,
or a charge against available funds in settlement of an obligation as evidenced by an invoice, voucher or
other such document during the fiscal year. For governmental reporting purposes, expenditures include
expenses or a provision for debt retirement not reported as a liability of the fund from which retired.
Fiscal Year - A 12 month period to which the annual operating budget applies and the end of which a
governmental unit determines its financial position and the results of its operations. The City has specified
January I through December 31 as its fiscal year.
Fund - A fund is a self -balancing set of accounts recording cash and other financial resources, together
with all related liabilities and "residual" equity or balances, and changes therein, which are segregated for
the purpose of carrying on specific activities or attaining certain planned objectives in accordance with
special regulations, restrictions or limitations.
Fund Balances - The overall objective of fund balance reporting is to isolate that portion of a fund balance
that is unavailable to support the following period's budget (see GASB 54 definition below). In general,
an unassigned fund balance shall be defined as those amounts that are not restricted, committed, or
assigned, of a particular fund at the end of the fiscal year.
GASB 54 - Fund Balance Reporting and Governmental Fund Type Definitions - The City of
Edmonds's CAFR Financial Statements are required to comply with GASB 54 beginning with its Fiscal
Year End 2011 CAFR going forward. GASB 54 changes and identifies fund balance classifications that
can be more consistently applied by clarifying existing governmental fund type definitions.
Fund balance is basically the difference between the assets and liabilities reported in a fund. GASB
statement No. 54 provides the following five categories for classifying fund balance and related
definitions to be used for describing the components of fund balance:
1. Nonspendahle Fund Balance Amounts that are not in a spendable form or are required to be
maintained intact. Due to the nature or form of the resources, they generally cannot be expected
to be converted into cash or a spendable form (e.g. Inventories and prepaid amounts). This also
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2.2.a
includes long-term loan and notes receivable and property held for resale. Applies as well to
amounts that must be retained intact legally or contractually.
2. Restricted Fund Balance — Amounts that can be spent only for the specific purposes stipulated.
Constraints are placed on the use of resources by external parties (e.g. by creditors, grant
providers, contributors) or by laws or regulations (e.g. constitution or legally enforceable
language). Restrictions may be changed or lifted only with the consent of the resource provider.
3. Committed Fund Balance.— Amounts can only be used for the specific purposes determined
by a formal action of City Council. Constraints on fund balance use are imposed by internal
formal action of the government's highest level of decision -making authority (e.g. City Council)
and can only be removed or changed by taking the same type of action it employed to commit
those amounts through legislation, resolution, or ordinance (e.g. funds committed to satisfy
contractual obligations). Action to constrain resources must occur prior to year-end; however
the amount can be determined in the subsequent period.
4. Assigned Fund Balance — Assigned fund balances include amounts that are limited by the
Council, Mayor, or his/her designee, for its intended use, but little or no formal action is required
to modify or eliminate those limitations. Assigned fund balances comprises amounts intended
to be used for a specific purpose. Amounts reported as assigned should not result in a deficit in
unassigned fund balance. Also relates to all governmental funds other than the General Fund,
with any remaining positive amounts not classified as nonspendable, restricted or committed.
5. Unassigned Fund Balance — Comprises the residual classification for the General Fund and
includes all amounts not contained in the other classifications. Unassigned amounts are available
for any purpose. This represents the residual amount of the fund balance that has not been
restricted, committed, or assigned.
General Fund - In public sector accounting, the General Fund is the primary operating fund for all
revenues of the City that are not otherwise restricted as to their use, including monies from local property
and sales tax, and other revenue sources that are not assigned for a specific purpose. The General Fund
provides the resources necessary to pay/sustain the day-to-day activities for City services such as
administration, community services, parks and recreation, police, fire, public works, elected officials,
Mayor, and City Council. When governments or administrators talk about "balancing the budget" they
typically mean balancing the budget for their general fund.
Government Accounting Standards Board (GASB) - GASB is the private, nonpartisan, nonprofit
organization that works to create and improve the rules U.S. state and local governments follow when
accounting for their finances and reporting them to the public. While the GASB does not have the power
to enforce compliance with the standards it promulgates, the authority for its standards is recognized
under the Rules of Conduct of the AICPA. Also, legislation in many states requires compliance with
GASB standards, and governments usually are expected to prepare financial statements in accordance
with those standards when they issue bonds or notes or otherwise borrow from public credit markets. The
GASB was established in 1984 and is funded by publication sales, contributions from state and local
governments, and voluntary assessment fees from municipal bond issues.
Operating Budget — A detailed projection of all estimated income and expenses based on forecasted
revenue during a given period (usually one year). Since an operating budget is a short-term budget, capital
outlays are excluded because they are long-term costs. One-time revenues, such as grants, settlements,
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2.2.a
sales of assets and transfers are excluded because often they are non -recurring sources of revenues and
cannot be counted on coming in from one budget cycle to the next.
Revenue - The income of a government from all sources appropriated for the payment of the public
expenses. It includes such items as tax payments, fees from specific services, receipts from other
governments, fines, forfeitures, grants, shared revenues and interest income.
Structural Budget Deficit or "Gap" - A budget deficit (Gap) that results from a fundamental imbalance
whereby current year governmental expenditures exceed current year revenues without any consideration
of carryover or prior year unspent revenue balances if they exist. A structural deficit remains across the
operating fiscal cycle because the general level of government spending is too high for the prevailing
revenue structure (e.g., taxes, fees and other sources). A fiscal Gap, is a structural budget deficit over an
extended period of time and not only includes the structural deficit at a given point in time but also the
difference between promised future government commitments, such as health and retirement spending,
and future planned or anticipated tax and other revenues. Another description is that the current revenue
structure is insufficient to maintain services at the current level.
ARTICLE IX EFFECTIVE DATE
This policy shall take effect upon its final adoption by the City Council.
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2.2.b
FINANCE COMMITTEE MEETING
January 9, 2024
Elected Officials Present
Staff Present
Councilmember Will Chen (Chair)
Dave Turley, Administrative Services Director
Councilmember Jenna Nand
Kim Dunscombe, Deputy Admin. Serv. Director
Council President Olson (ex-officio)
Scott Passey, City Clerk
Councilmember Susan Paine
Mayor Mike Rosen
Councilmember Michelle Dotsch
1. CALL TO ORDER
The Edmonds City Council Finance Committee meeting was called to order virtually and in the City
Council Conference Room, 121 — 5th Avenue North, Edmonds, at 5:31 p.m. by Councilmember Chen.
2. COMMITTEE BUSINESS
1. November 2023 Monthly Financial Report
Mr. Turley advised the November 2023 Monthly Financial Report is included in the packet and he
offered to respond to council questions. Discussion followed regarding whether to add structure to the
committee's review of the monthly report such as a presentation from staff highlighting figures in the
report or to have staff respond to council questions. As the 30-page report with financial information
was included in the packet, Mr. Turley's preference was Q&A.
Questions and discussion followed regarding ability for staff to answer detailed questions outside of
committee meetings, monthly General Fund expenditures and what it was spent on, concern the
monthly financial report is historical data and difficult to react to, budget forecasts included in the
monthly reports, anticipation use of the contingency reserve would be necessary by February, difficulty
forecasting monthly expenditures as each department is responsible for their own budget, Finance as
a central department that reports information provided by individual departments, new process that
would be required to forecast monthly expenditures by department, appreciation for moving funds to
the state investment pool to generate more interest income, and staff's plans to make the adopted 2024
budget available by the end of next week,
Committee recommendation: Consent Agenda
2. Finance Committee 2024 Work Plan
Councilmember Chen referred to his email listing a few key items:
Use of contingency fund reserve
If the City does not borrow from the utilities, there is potential to dip into the contingency reserve in
February/March. Councilmember Chen suggested the city attorney prepare a resolution authorizing use
of the contingency fund reserve to avoid using it without council approval.
Questions and discussion followed regarding the reporting mechanism from finance to the mayor
regarding use of the General Fund reserve in accordance with the fund reserve policy, confusing
language in the fund reserve policy and varying interpretations, when the process is triggered and how
the council is notified, risk of not preparing a resolution in advance and spending contingency reserve
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2.2.b
01/09/24 Finance Committee Minutes, Page 2
funds without authority, the adopted budget does not forecast using contingency fund reserves, and
whether there is a strategy to replenish reserves used in 2023.
Fund balance reserve policy review and update
Questions and discussion followed regarding the process for updating the policy, preparation of an
interfund loan policy, a suggestion to hold a public hearing or council workshop when an interfund loan
is proposed, and formation of citizen advisory groups in the past. It was agreed to form a policy review
group (Councilmembers Chen & Nand and 1-2 Finance staff) to review and rewrite the policy prior to
review by the city attorney.
Property tax revenue discussion
Questions and discussion followed regarding diversifying the City' revenue streams, the legislature's
consideration of an increase in the 1 % property tax limit, Seattle's capital gains income tax that targets
high earners, inflation versus the 1 % property tax limit, increases in the City's expenses, opportunity for
a sales tax increase to support cultural arts that potentially could generate $300,000/year in revenue,
considering revenues opportunities now for 2025, increases in construction costs, timing for ballot
measures, concern with impacts of increasing Edmonds' sales tax rate, and considering ways to make
City events more revenue neutral.
Stopgap/bridge public safety levy
Councilmember Chen proposed council begin planning to put a public safety levy on the ballot to cover
2025 public safety expenditures. Questions and discussion followed regarding the deadline to have a
levy on the ballot (Feb 23 for April ballot), importance of a public education campaign, accurately framing
a public safety levy, importance of the council and the public's support of a public safety levy, budget
for police and fire in 2024, involving the RFA in town halls and public outreach, information staff could
provide related to a levy, and council action required to proceed with a levy.
Borrowing from the utility fund
Questions and discussion followed regarding borrowing from the utility fund as a short-term solution as
it takes less time than a levy, options to raise short-term revenue (borrow from the utility fund, levy lid
lift, bank loan, councilmanic bonds), voter approval required for a levy lid lift, process for borrowing from
the utility fund, when a public hearing is/is not appropriate, whether borrowing from the utility fund would
have an adverse impact on rate payers, and the need for an interfund loan policy.
Fire and EMS services
Councilmember Chen referred to Fitch & Associates' presentation to the PSPHSP committee regarding
the scope of the fire feasibility assessment.
Questions and discussion followed regarding whether project numbers can be assigned to allow council
to track expenditures on multi -department projects, whether project reporting could be incorporated into
monthly financial reports, whether project reporting could be done for 3-4 large projects, and assigning
a project number to the Landmark project.
Committee recommendation: Discussion.
3. ADJOURNMENT
The meeting was adjourned at 6:58 p.m.
SCOTT PASSEY; CLERK
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2.2.c
RESOLUTION NO. 1532
A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF
EDMONDS, WASHINGTON, AUTHORIZING THE USE OF
GENERAL FUND OPERATING RESERVES FOR 2023
GENERAL FUND EXPENSES AND ADDRESSING THE
STRUCTURAL BUDGET IMBALANCE AND
DECLARATION OF A FISCAL EMERGENCY
WHEREAS, the City of Edmonds adheres to the Fund Balance Reserve Policy as adopted on
July 2, 2019 by Resolution 1433; and
WHEREAS, the City Council adopted a balanced budget in December of 2022 for fiscal year
2023; and
WHEREAS, the recent high inflation and tight labor markets necessitated increased wages and
led to other higher costs; and
WHEREAS, during the course of 2023, budget amendments increased expenses to levels not
sustainable for revenues creating a structural budget deficit as defined by Article VIII in the Fund
Balance Reserve Policy; and
WHEREAS, the Strategic Outlook in the Mayor's Proposed 2024 Budget shows estimated
spending of $2,204,692 of the minimum required amount of the General Fund Operating
Reserves in 2023; and
WHEREAS, the Fund Balance Reserve Policy states that the General Fund Operating Reserve
shall be used in cases of fiscal emergency; and
WHEREAS, Article III, section 1 states "(a)ny use of the committed General Fund Operating
Reserves shall be used only in cases of a fiscal emergency", which are broadly defined to include
"economic uncertainties, unforeseen emergencies and unanticipated operating expenses and
revenue shortfalls"; and
WHEREAS, Article VII, Deviations from the Fund Balance Policy, allows for deviation from
the fund balance reserve policy with a simple majority vote of Council; and
WHEREAS, this spending of the 2023 General Fund Operating Reserves represents such a
deviation; and
WHEREAS, this significant structure imbalance was caused by two specific ordinances adopted
in March and April 2023. These negative fiscal trends coupled with the shortfall in General Fund
Operating Reserves is now considered a fiscal emergency as defined in Section III section 1 by
the City Council.
NOW THEREFORE, THE CITY COUNCIL OF EDMONDS WASHINGTON HEREBY
RESOLVES AS FOLLOWS:
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2.2.c
SECTION 1. On November 6th, the City Council recognizes the de facto fiscal
emergency represented in the 2024 Mayor's Proposed Budget and approves the
deviation per Article VII of the Fund Balance Reserve Policy.
SECTION 2. After City Council approves the 2024 budget, a fiscal emergency may
continue to exist in 2024 because of the structural imbalance of future expenses
exceeding projected revenues unless the Administration and City Council take strong
corrective measure during the course of 2024.
SECTION 3. The City Council approves the use of General Fund Operating Reserves to
support the 2023 General Fund Operations and requests the Administration provide in
accordance with Article III Section 1 a General Fund Reserve Replenishment schedule
for Council approval in November 2023 (and all subsequent Novembers until the reserves
are replenished).
RESOLVED this 6"' day of November, 2023.
CITY OF EDMONDS
MAYOR, MIKE NELSON
ATTEST:
LER ,SC TT SSEY
FILED WITH THE CITY CLERK: November 6, 2023
PASSED BY THE CITY COUNCIL: November 6, 2023
RESOLUTION NO. 1532
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2.2.d
CITY OF
MUKILTEO
Finance Department
11930 Cyrus Way Mukilteo, WA 98275
Fund Balance Reserve
Policy
rKIM
Packet Pg. 25
2.2.d
City of Mukilteo
Fund Balance Policy
RESERVE AND CONTINGENCY FUND POLICIES
Adequate fund balance and reserve levels are a necessary component of the City's overall
financial management strategy and a key factor in external agencies' measurement of the City's
financial strength.
Maintenance of fund balance for each accounting fund assures adequate resources for cash flow
and to mitigate short-term effects of revenue shortages. Reserve funds are necessary to enable
the City to deal with unforeseen emergencies or changes in condition.
A. General Policy
The City shall maintain reserves required by law, ordinance and/or bond covenants.
All expenditures drawn from reserve accounts shall require prior Council approval unless
previously authorized by the City Council for expenditure within the City's annual
budget.
If reserves and/or fund balances fall below required levels as set by this policy, the City
shall include within its annual budget a plan to restore reserves and/or fund balance to the
required levels.
All reserves will be presented in the City's annual budget.
B. Contingences
The City will maintain a Contingency Fund and shall maintain a reserve equal to
$1,000,000 to provide a financial cushion to cover revenue shortfalls resulting from
unexpected economic changes or recessionary periods or to provide funds in the event of
major unplanned expenditures the City could face as a result of landslides, earthquake or
other natural disaster.
C. General Fund Operating Reserves
The City will maintain a General Fund Operating Reserve to provide for adequate cash
flow, budget contingencies, and insurance reserves. The General Fund Operating
Reserves will be determined as follows:
1. Cash Flow Reserve: The City will maintain a cash flow reserve within the General
Fund in an amount equal to two months of budgeted operating expenditures. The
City will review annually the required cash flow reserve level that is necessary to
meet the City's cash flow needs. If it is determined that the two months of operating
expenditure reserves is not adequate, the Finance Director shall propose an
amendment to these policies.
D. Hotel/Motel Lodging Tax Reserves
The City will maintain a Hotel/Motel Lodging Tax Reserve of allocating grants to fund
tourism promotional opportunities within the City. The City will maintain a cash flow
reserve within the Hotel/Motel Lodging Tax Fund in an amount equal to one prior
complete year's revenues in ending fund balance. For example, the 2010 budgeted
expenditures cannot exceed the 2008 actual revenues receipted into the fund.
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2.2.d
City of Mukilteo
Fund Balance Policy
E. Technology Replacement Reserves
The City will maintain a Technology Replacement Reserve for replacement of entity -
wide computer hardware, software, or telephone equipment identified in the City's
Technology Replacement listing. The required level of reserve will equal each year's
scheduled replacement costs. For example, if the 2010 equipment replacement costs are
budgeted at $100,000, the fund reserve balance must equal or exceed $100,000.
Contributions will be made through assessments to the using funds and maintained on a
per asset basis.
F. Health Self -Insured Administration Reserves
The City will maintain a Health Self -Insured Administration Reserve to provide
Washington State mandated reserves for the City's self -insured dental and vision benefits
for City Employees. Reserves will be determined as follows:
1. The City will maintain a reserve in an amount equal to 16 weeks of budgeted expense
as required by Washington State's Office of Financial Management. The City will
review annually the required reserve level that is necessary to meet the State's
requirements (Washington Administrative Code, WAC 82.60).
G. Equipment and Vehicle Replacement Reserves
The City will maintain fully funded reserve for the replacement of vehicles and
equipment identified on the City's equipment replacement listing. The required level of
reserve will equal each year's scheduled replacement costs. For example, if the 2010
equipment replacement costs are budgeted at $100,000, the fund reserve balance must
equal or exceed $100,000. Contributions will be made through assessments to the using
funds and maintained on a per asset basis.
H. Surface Water Utilitv Fund Reserve
The City shall maintain an operating reserve within the Surface Water Utility Fund an
amount equal to no less than 20% of budgeted operating revenues.
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2.2.e
ORDINANCE NO.3045
AN ORDINANCE OF THE CITY OF ISSAQUAH,
WASHINGTON ADOPTING AMENDMENTS TO THE CITY
FINANCIAL MANAGEMENT POLICY; AND ESTABLISHING
AN EFFECTIVE DATE OF APRIL 1, 2024.
WHEREAS, the City Council adopts financial management policies to provide
guidance to City staff and officials and to set internal controls and oversight over financial
transactions; and
WHEREAS, the City Council adopted the City's current Financial Management
Policy on September 5, 2017 (Ordinance #2805); and
WHEREAS, the Policy has been subsequently amended on January 21, 2020
(Ordinance #2899), September 8, 2021 (Ordinance #2950) March 21, 2022 (Ordinance #2969) and
April 4, 2022 (Ordinance #2971); and
WHEREAS, the Administration has recommended amendments to sections of the
Financial Management regarding donations to the City, acceptance of grants, contracting authority
and thresholds, and disposal of surplus property; and
WHEREAS, the proposed amendments to the Financial Management Policy would:
facilitate more efficient procurement and contracting; resolve existing ambiguities; allow the City
to accept donations with greater ease; and provide for consistency with other City policies and
codes; NOW THEREFORE,
THE CITY COUNCIL OF THE CITY OF ISSAQUAH, WASHINGTON, DO
ORDAIN AS FOLLOWS:
-1-
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2.2.e
Section 1. Financial Policy Amended. The Financial Management Policy is hereby
amended as set forth in Exhibit A, which is incorporated by this reference as fully set forth herein.
Section 2. Effective Date. This ordinance or a summary thereof consisting of the
title shall be published in the official newspaper of the City and shall take effect and be in full
force April 1, 2024.
PASSED by the City Council of the City of Issaquah, the 16th day of January, 2024
APPROVED by the Mayor of the City of Issaquah, the 16th day of January, 2024
ATTEST/AUTHENTICATED:
EDocuSigned by:
11S t dd(`
TISHA GIESER, CITY CLERK
APPROVED AS TO FORM:
DocuSigned by:
ned :
RACHEL BENDER TURPIN, CITY ATTORNEY
PUBLISHED: Jan. 19, 2024
EFFECTIVE DATE: April 1, 2024
ORDINANCE NO.: 3045 / AB 8735
Exhibit A: Financial Management Policy
DocuSigned by:
9AA4F54C7RRR4Rn
LINDSEY WALSH, MAYOR PRO TEM
-2-
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2.2.e
CITY OF
ISSAgYAH
W A S H I N G T O N
FINANCIAL MANAGEMENT
POLICY
Adopted: September 5, 2017
Ordinance 2805
Amended: January 21, 2020
Ordinance 2899
Amended: Sept. 7, 2021
Ordinance 2950
Amended: March 21, 2022
Ordinance 2969
Amended: April 4, 2022
Ordinance 2971
Amended: Jan. 16, 2024
Ordinance 3045
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2.2.e
CITY OF ISSAQUAH
FINANCIAL MANAGEMENT POLICY
1.0 INTRODUCTION AND OBJECTIVES
The financial management policy of the City of Issaquah is established by the City Council. The
policy is designed to provide guidance to all stakeholders whether they be directly involved in
financial processes, internal control oversight, or any financial transaction. The financial
management policy is intended to serve as a blueprint to achieve fiscal stability required to
accomplish the City's Strategic Plan, Comprehensive Plan, all master plans and City Council goals.
The City Council sets forth the authorities, responsibilities, and accountability requirements of
those participating in the operations of Issaquah City government at all levels of the organization
and endeavors to:
• Set forth financial principles;.
• Reduce financial risks to withstand the ups and downs of local and regional economic
environments;.
• Maintain appropriate financial capacity for present and future levels of servicei
• Ensure the legal use of financial resources through an effective system of internal controlsi
and
• Provide financial transparency to the public.
2.0 RESERVES AND FUND BALANCE
Fund balance is an approximate measure of liquidity. Reserves are a cornerstone of financial
flexibility and provide the City of Issaquah with options to respond to unexpected issues and
provide a buffer against minor fiscal challenges. This section defines thresholds and descriptions
for fund balances, reserves, and retained earnings of all funds of the City of Issaquah. It is the intent
of the City to provide a stable financial environment for which its citizens- residents can depend on a
consistent and quality level of service and for planned future expenditures. The Finance
DiFectorChief Financial Officer is responsible for monitoring reserve levels and reporting current
and projected reserves during each budget development cycle.
2.1 Fund Balance Definitions
As defined by GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type
Definitions, the City will reserve funds per the following:
2.1.1 Non -spendable Fund Balance
Inherently non -spendable portions of net resources that cannot be spent because of their
form or portions of net resources that cannot be spent because they must be maintained
intact.
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2.2.e
2.1.2 Restricted Fund Balance
Externally enforceable limitations; on the use of funds; that are imposed by creditors,
grantors, contributors, or laws and regulations of other governments or limitations imposed
by law through constitutional provisions or enabling legislation. Debt Service fund balance
will be designated as restricted.
2.1.3 Committed Fund Balance
-Self-imposed limitations, on the use of funds; that are set in place prior to the end of a
period. Limitations imposed at highest level of local decision making that requires formal
action at the same level to remove. Capital Project fund balances typically will consist of
funds designated by City Council for future capital improvement projects.
2.1.4 Assigned Fund Balance
Limitations resulting from intended use that i-sare established by the highest level of
decision making or intended use established by the City Council for a specific purpose. The
resources for these funds may be acquired through the budgeting process or funds that are
deposited with the city for specific purposes. Special Revenue fund balances typically
consist of funds assigned by other governmental agency for specific use or by the City
Council specific use.
2.1.5 Unassigned Fund Balance
Residual net resources that make up the fund balance in the general fund more than non -
spendable, restricted, committed, and assigned fund balance (i.e., surplus) or excess of non -
spendable, restricted, and committed fund balance over total fund balance (i.e., deficit). The
General operating fund balance typically will consist of unassigned funds for use by the City
Council.
2.2 Reserve Level Target - General Fund
A healthy unassigned fund balance is needed to provide cash flow to pay expenditures when due. A
fund balance reserve target allows for cash flow while the city waits to receive its tax collections
and shared revenues. The unassigned fund balance is also a security against unforeseen changes or
needs, i.e. natural disasters, loss of state shared revenues, etc.
The general fund unassigned fund balance should be approximately 15-20% of expenditures of the
general fund. The unassigned fund balance of the general fund may never fall below 15% of
operating expenditures unless authorized by the City Council.
2.3 Conditions for Using General Fund Reserves
The City shall endeavor to avoid the appropriation of fund balance for recurring operating
expenditures. If at any time the utilization of a fund balance to pay for operating expenditures is
necessary to maintain the quality or a defined level of services, an explanation of the circumstances
for the utilization of fund balance and demonstration of strategy through the long-term financial
model on future fund balance targets will be included in the budget transmittal letter prepared by
the Mayor in the Proposed Budget and deliberated by the City Council.
Reserves may be used at the discretion of the City Council to:
• Provide temporary resources in the event of an economic downturn while expenditure
reductions are implemented or alternate sources of revenue are determinedi
• Provide resources to meet emergency expenditures in case of flood, fire, earthquake,
landslides or other catastrophic failures-, or
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2.2.e
• Provide resources for one-time capital outlay expenditures which include capital equipment
as part of the capital improvement plan.
2.4 Reserve Level Target - Enterprise Funds
It is the goal of the enterprise funds to cover the cost of operations, debt obligations and capital
infrastructure improvements and annual maintenance, to maintain a financially healthy enterprise.
Enterprise fund balance is a product of revenues over expenditures over time and consists of the
net result of assets minus liabilities. The City will establish utility rates and capital connection fees
that are structured to meet several financial requirements. The Enterprise fund balance financial
indicators are as follows:
2.4.1 Capital funding obligations -as defined through the 5-Year Capital Improvement
Plan (CIP) - Utility Categories.
2.4.2 Debt coverage ratio — a ratio of 1.5 of net revenues to total debt service.
2.4.3 Operating reserves-90 days of operating expenses reserved for water, wastewater
and storm water.
2.4.4 Debt service -the amount needed to pay for current and future debt (125% or as per
bond covenants).
2.4.5 Emergency capital repairs -amounts required to pay for unanticipated capital
costs.
2.5 Reserve Level Target - Special Revenue, Capital Project and Other Fund Types
The main purpose of special revenue, capital project and debt funds is to account for resources and
track spending that is specific to the fund's purpose and it is presumed that all fund resources will
eventually be spent. Capital Project Funds will reflect items represented in the CIP approved during
the capital budget adoption process. It is the intent of the City of Issaquah to set aside funds, when
operations allow, for large capital projects to help minimize the debt service needs for these
projects. Current commitments for Capital Project fund reserves are transportation, parks,
sidewalks and trails, utilities, and civic facilities as defined in the Comprehensive Plan - Capital
Facilities Plan element.
Special revenue funds by their nature are funds used for specific purposes, and the corresponding
fund balance will be used to solely support that purpose. Fund balances in special revenue funds
will be monitored to stay consistent with the need and use of the specific purpose of that fund.
2.5.1 Seizure Fund
As defined by Ch. 69.50.505 RCW and inter -local agreement, between the City and County
Drug Task Force, law enforcement asset seizure funds shall be used for payment of all
expenses of the investigation that led to the seizure, including the proceedings for forfeiture
and sale, expenses of seizure, maintenance of custody, advertising, actual costs of
prosecuting, city attorney and court costs.
2.5.2 REET Fund
As defined by Ch. 84.46.035 RCW, the City of Issaquah is authorized to levy REET funds and
use in accordance tewith State Law. REET sources are allocated towards various Capital
Improvement projects as defined in the 5-year adopted CIP and may be leveraged towards
debt service obligations - see Section 6.3.1 of this policy. REET Fund reserves may be
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2.2.e
maintained at a level sufficient to ensure viability of future CIP funded projects with a
minimum reserve balance authorized by the City Council.
2.5.3 Contingency Fund
The City of Issaquah may establish a separate special revenue fund for contingencies or may
adequately set aside assigned or committed reserves within the General Fund for
unforeseen expenditures.
2.6 Reserve Level Target - Internal Service Funds
Reserve targets established for internal service funds shall ensure that the fund continues to
provide service without interruption including self-insurance and equipment replacement plans.
Internal service fund reserves are funded through the City of Issaquah Cost Allocation Plan (CAP).
The equipment reserve funds will be maintained at a level sufficient to meet scheduled equipment
replacement to sustain an acceptable level of municipal services and prevent a physical
deterioration of city assets. If CAP charges are sufficient to cover internal service operations,
maintenance and equipment replacement expenditures then the minimum reserve balance may be
30% of the fund's operating budget expenditures.
2.7 Replenishment of Reserves
Should assigned fund balance targets fall below a 15% threshold, the City will strive toward
regaining the minimum threshold during the next budget cycle and forecast the timing of the
unassigned fund balance improvement within the long-term financial plan.
2.8 Excess Reserves
Reserves above the targeted reserve levels may be used for new expenditures, with emphasis on
one-time uses that achieve future operating cost reductions, capital asset investments with a long-
term benefit or prepaying existing debt. Use of excess reserves will be determined by the City
Council through the next available budget cycle or budget amendment defined through an
agenda bill.
3.0 REVENUES
3.1 Revenue Objectives
The City will maintain a diversified and stable revenue system to shelter it from short-term
fluctuations. To protect and better develop future tax base, revenue guidelines will emphasize
preserving the City's ability to grow and expand. The following are revenue objectives based on
type of revenue:
3.1.1 Revenues That Align with Cost Recovery
Fees or taxes are based on anthe objective of recovering a stated percentage of a given
program's expenses. The City will consider user fees when the character of the service and
its users seems appropriate and if the user fees are charged, the fee will be structured to
recover the full cost of the service including all direct and indirect costs. Full cost recovery
may not be implemented if the fees prevents rn event an individual from obtaining an
essential service or results in the City being economically disadvantaged or as otherwise set
by the City Council.
3.1.2 Revenues Related to Economic Development
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Fees or taxes are based on objectives that foster growth related activity. The City's overall
revenue structure should be designed to recapture some of the financial benefits resulting
from City economic and community development investments. The City will strive to keep a
total revenue mix that encourages growth and keeps Issaquah economically competitive
and a city of choice for people to live in and do business.
3.1.3 Revenues with a Relationship to the Value of Money and Market Forces
Fees are based on maintaining a logical relationship with local market forces. Fees that are
subject to ongoing inflationary or other indexes may be adjusted.
3.1.4 Revenues that Enforce Compliance
Fines and Infractions are set at a level that assists with enforcing compliance with City rules
and regulations.
3.1.5 Revenue that is Self -Supporting
Fees and charges usually associated with a governmental "business" enterprise. Fees are
based on a formal rate model for factoring in relevant operational, capital, and debt service
cost components.
3.1.5.1 All utility enterprise funds shall be self-supporting; that is, they should
generate enough revenue to pay for all costs without a subsidy from the general
fund, from each other or from other sources. Utility rate studies will be conducted
every five years and should divide costs equitably among customer classes per
benefit and cost of service. If rates are set that subsidize one class of customer at the
expense of another, this action should be taken in support of explicit City policy.
Because of the vital importance of water, sewer and storm water as public services,
a minimum level of service should be available at a relatively low cost to all utility
customers.
3.2 Fee Schedule
Charges and fees, including utility rates, should be reviewed and updated periodically based on
factors such as impact of inflation, other cost increases, adequacy of coverage of costs, and current
competitive rates. On a periodic basis, the Fee Schedule, as adopted by City Resolution, may be
amended in conjunction with a budget development cycle.
3.3 Cash Management
Deposits and cash receipting procedures, as defined in financial procedures, must be adhered to, by
all Departments and at all City Facilities per Ch. 43.09.240 RCW. Only authorized personnel can take
cash receipts from customers. The Finance DiF *^rChief Financial Officer, through financial
procedures, will provide guidance and strict enforcement of internal control, deposit of collections
and oversight on all changes to revenue items in the financial system.
3.4 Bad Debt and Collections
Revenue collection guidelines, as defined in financial procedures, will provide processes for the
recognition of bad debt and the computation of an allowance of doubtful accounts, define
procedures for determining refunds and discounts as allowed in City Code and provide for the
administration of escrow accounts used for land use projects.
3.5 Revenue Distribution to Non -General Funds
Sales tax is a major revenue source of the City; however, it is also the most volatile and elastic
source impacted by local, regional and national economic conditions. The City of Issaquah's growth
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has been supported by retail -oriented business activity and such growth impacts the need for
maintaining, improving and adding new capital assets. During the budget development cycle, the
City Council will determine the amount of sale tax sources to be distributed to other funds, such as
capital project funds, as a source of funding, within the adopted Capital Improvement Plan (CIP).
3.6 Grants
Grant funding can significantly leverage City resources to provide services, equipment and capital
projects that would otherwise be unaffordable. The City is committed to pursuing grant funding as
an appropriate funding source. Any grant programs must be consistent with the City's mission and
Strategic Plan goals. The Administration will seek out, apply for, and effectively administer Federal,
State and other grants that address the City's policy objectives and provide a positive benefit.
3.6.1 Pre -Award
All grants, regardless of the amount must be reviewed by the Finance Department prior to
pursuit of the funding to ensure that the grant, if awarded, aligns with the City's financial
objectives (e.g., are matching dollars required and can the City fulfill those requirements;
are there special contractual obligations required in the administration of the grant funds
and is the City positioned to meet these obligations; does the grant create future on -going
costs and is the City prepared to assume those costs; etc.).
Before any grant above $5-01001000 is pursued, departments shall provide detailed pro -
forma information to the Mayor, City Administrator and Finance Dire *^rChief Financial
Officer that addresses the immediate and long-term costs and benefits to the City.
3.6.2 Award Acceptance
The
('o,,neil a al Once a ed by Gouneil, the Mayor- may sign these a „ram
Chief Financial Officer may approve grant awards of $100,000 or less, including those
requiring matching funds from the City in the amount of $100,000 or less, provided
sufficient funds to cover the match have been appropriated by the City Council in the
biennial budget and the match would not require expenditures exceeding available fund
balances. All other grant awards must be approved by the City Council.
A summary of grant awards received by the City will be included in one or more of the City's
quarterly financial reports annually.
3.6.3 Post -Award
Responsibility for the administration of grants is the joint responsibility of the applying
department, Finance Department and City Administration. The City will adhere to all State
and Federal laws, regulations and guidelines in the administration of grants funds.
Once appFoved by Council, the An-,.,^,- m sign these agreements. > xt^ sion- Post -award
amendment to grants that were approved by the Chief Financial Officer may be approved by
the Chief Financial Officer unless such amendment would cause the total award amount to
exceed $100,000 or require the City to contribute matching funds that have not been
appropriated by the City Council in the biennial budget or that would cause the City to
exceed available fund balances. Amendments to the scope, dollar amount or award terms of
grants originally approved by the City Council must be approved by the City Council;
provided, extensions and reductions to the length of an agreement without any other
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changes to scope, dollar amount or award terms de not Fequ Fe Council appFoval but
mu-stmay be signedadministratively approved by the Mayo -Chief Financial Officer.
3.6.4 Signature
The Mayor may sign a grant agreement once it is approved by the Chief Financial Officer or
City Council.
3.7 Donations & Gifts
The Mayor or their documented designee may administratively accept any donation valued
$100,000 or less, provided no terms or conditions are attached to the donation. All other donations;
as .,r C . -
35 2 1 00 RCW pr-ovide to the City shall be presented to the City Council for approvah
If pursuant to RCW 35.21.100 and, if no terms or conditions are attached to the donation, the
Administration will prepare a summary of the funding source and recommended use of proceeds
for City Council approval.
3.7.1 Substantial Gifts
The City of Issaquah seeks to recognize donors who, through a distinguished effort or
substantial financial gift, wish to support a City facility or structure. For example, structures
may include pavilions, shelters, plazas, real estate to be used for parks, trails or open space,
interpretive areas, or active recreation; or other large-scale projects as discussed with the
Advisory Boards and City Council. The following guideline will be used for recognizing
donations for amenities or projects, in addition to defining the period in which the donation
or gift will be received by the City.
For the purposes of this policy, "Substantial Financial Gift" is defined as at least 50% of the
estimated cost of:
1) New construction, remodeling, or renovation
2) Developing a new real property, such as park buildings, structures, or real estate
3) Replacement of an existing, unnamed facility or landmark that requires substantial
renovation at the time of the gift
3.7.2 Program Specific Donations.
The Mayor or their documented designee may administratively accept any donation that is
restricted for use by a specified City of Issaquah program, provided such donation stays
within the limit set forth in 3.7 and that the terms of such gift allow the funds to be used for
any equipment, items or expenses that are directly related to the City of Issaquah program
or its related needs. These donations shall be kept in a separate project fund that is
restricted for use by the specified program.
3.7.3 Other Donation Funded Projects
The City of Issaquah will review projects that are proposed by private individuals or groups,
where the project funding source will come from donations collected by the individual or
group, (e.g. trees, park benches and other equipment or fixtures) on a case -by -case basis.
The Administration, including the associated Department Head and the Chief Financial
Officer, will review the donation project with the Finanee DiFeeterwith the Chief Financial
Officer- _prior to City Council acceptance and will oversee the donation funded projects per
financial procedures.
3.8 Gifts to City Officials
With a few exceptions, no City official or City employee shall accept any gift as per Ch. 42.23 RCW or
the City of Issaquah Code of Ethics.
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4.0 EXPENDITURES
4.1 Expenditure Objectives
The City of Issaquah endeavors to connect expenditures to a fundamental level of stewardship by
committing to a level of expenditures that are sufficient to ensure the on -going health, safety, and
welfare of its citizensresidents. Operating expenditures, within funds, must be supported by
resources available within the fund (e.g., revenues, fund balances, interfund transfers, etc.).
Expenditures will not expand beyond the approved budget.
The objectives of the expenditure guidelines are:
• To obtain supplies, equipment, and services as economically as possible and that are best
suited to the specific City needs.
• To maintain compensation packages which are competitive with other public sector
employers and that are sufficient to attract and retain quality employees.
• To enhance service methods that increase efficiency and effectiveness of the delivery of City
services through technology improvements.
• To improve the speed of delivery of City services by predetermining sources of supply
before actual needs through contracts or other appropriate means.
• To ensure compliance with all applicable City, State and Federal policies and statutory
requirements.
• To support diversity and equity in firm and merchant selection, while also meeting other
expenditure objectives as per City, State and Federal requirements.
4.2 Efficiency
The City will make efficient use of limited resources and will continually look for and implement the
most cost effective and reliable methods of delivering services. The Administration will develop
service level changes that are needed to respond to budget shortfalls using system -wide and
productivity measures. Opportunities may be found to improve efficiencies by pursuing a range of
productivity -enhancing techniques such as:
• Analyzing systems and procedures to remove unnecessary requirements
• Evaluating new technologies and capital investments
• Establishing a systematic, ongoing process for periodic formal reviews of operations
• Maintaining the right balance between centralization and decentralization in managing the
City support functions
4.3 Purchasing Standards
All employees of the City shall comply with the City of Issaquah Code of Ethics, State Law, and
Federal statutory requirements regarding purchase of materials or services. The following
practices are specifically forbidden so as not to create a conflict of interest:
• Using information available to an employee solely because of their position for personal
profit, gain, or advantage.
• Directly or indirectly furnishing estimating services, or any other services or information
not available to all prospective bidders, to any person bidding on, or who may reasonably
be expected to bid on, a contract.
• Using their position or status in the City to directly or indirectly solicit business of any kind
for private use or to obtain supplies and equipment at special discounts or with special
concessions from any vendor who sells or solicits sales to the City.
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Soliciting, accepting, or agreeing to accept any gratuity for themselves, their families, or
others that would or could result in personal gain.
Participating in the selection, award, or administration of a contract if he or she has a real or
apparent conflict of interest. Such a conflict of interest would arise when the employee,
officer, or agent, any member of his or her immediate family, his or her partner, or an
organization which employs or is about to employ any of the parties indicated herein, has a
financial or other interest in or a tangible personal benefit from a firm considered for a
contract.
4.4 Purchasing Authorization & Accountability
Failure to follow financial procedures for procurement may result in disciplinary action, loss of
purchasing privileges and personal liability for purchases.
Department Directors are accountable for procurement through contracts and other appropriate
means within their departmental budgets. Purchases that exceed a departmental an-nualbiennial
budget are not allowed.
Pursuant to Ch. 42.24.080 RCW, warrants presented for payment to the City Council must be
documented, itemized and audited by the Auditing Officer. The Finance Dir- *^rChief Financial Officer
or his/hertheir documented designee is designated as the City of Issaquah Auditing Officer.
Department directors or a documented designee will be responsible for ensuring invoices are
presented to meet this documentation requirement and provide them to the Finance Department for
prompt payment and audit review.
4.5 Level of Purchasing and Contract Commitment Authority
Contracting with other public agencies or the private sector for the delivery of goods and services
may provide the City with opportunities for cost containment and pr",Lor service
enhancement. As such, the City is committed to using outside resources for delivering municipal
services as a key element in our continuing effort to provide effective and efficient programs while
minimizing costs.
Purchasing & Contract Commitment Thresholds
Limit Per Year
Role
Citv Re uirements
$1 - $9,999
Manager
multiple quotes not required unless subject to more
restrictive State/Federal requirements
$10,000 - $24,999
Manager
obtain 3 quotes unless subject to more restrictive
State/Federal requirements
$25,000 - $49,999
Department Director
obtain 3 quotes unless subject to more restrictive
State Federal re uirements
$50,000 - $74,999
City Administrator
obtain 3 quotes unless subject to more restrictive
State/Federal requirements
$75,000 - $99,999
Mayor
obtain 3 quotes unless subject to more restrictive
State/Federal requirements
$100,000 - $349,999
City Council
obtain 3 to 5 quotes unless subject to more restrictive
State/Federal requirements
$350,000 and up
City Council
invitation to bid or request for proposals required
Zero dollar s'^*'City contracts and MOUs may be signed by purchases.
EXCLUDING CONTRACTS CTS FOR PUBLIC WORKS PROIECTQ are subject to the following signing
thresholds:
Dollar Value UL Authorized MEOW
$0 - $24,999 Manager
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$25,000 - $49,999
Department
Director
$50,000 - $99.999
City
Administrator
$100,000 - $299,999
Ma
or
$300,000 or more
CWLCouncil
• . • .1nss�:se:*sra . :sara:nr:ra
-- - -- - - - :.�
Through this policy. the Citv Council deleL-ates authoritv to the Mavor. Citv Administrator
Department Directors ;fde , and Managers (or their documented designee(s)l to purchase
materials, supplies and equipment and execute contracts, without individual city council approval
of each contract, in accordance with Purchasing and Contract Commitment Threshold set forth
above. provided: (1) funds have been appropriated by the City Council in the biennial budget and
the contract does not require expenditures that exceed available fund balances: and (2) the
expenditure is consistent with the City's goals and policies.
This delegation of authority to execute contracts shall include, but is not limited to, the following
types of agreements:
• Affidavits of ownership and agent authoritv. or similar documents that maybe reauired for
certain land use approvals when requested bye A lessees of City property.
• Easements, or similar agreements conveying property rights to or from the City.
• Right of entry agreements or similar agreements authorizing access to City property or
allowing City staff or consultants to enter property not owned by the City for limited
purposes such as surveying, environmental testing, geotechnical analysis. etc.
• Contracts or contract amendments that are for the sole purpose of housekeeping changes or
clarifications to an existing contract where such changes do not alter any material term or
condition, such as cost. See Sections 4.5.3 and 4.5.7 for more information regarding changes
to existing contracts.
• Lease agreements for materials supDlies. eauipment. or property (real or Dersonall where
the City is either- the lessee of the lessor.
• Contracts, memorandums of understanding, voluntary correction agreements, inter -agency
agreements, etc. that do not involve the payment of money by the City and that are not
"interlocal agreements" as defined by Chapter 39.04 RCW (see Administrative Contracting
and Procurement Manual for more information).
• Contracts for the short-term use of City facilities when such use is controlled by and
consistent with the City's policies.
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This delegation of authority specifically excludes the following types of contracts and therefore
require approval by the City Council:
• Legal settlement agreements, EXCEPT agreements relating to laborlpersonnel matters and
that do not exceed $50,000, which may be approved administratively.
• Real estate purchase and sale agreements.
• Agreements to lease all or a portion of City -owned property, EXCEPT when such lease is for
a term of less than one year AND the value of the lease agreement is below the contract
threshold amount set forth above.
Maximum contract length, including aDy-contract amendments and extensions, without Council
approval is twethree years, with the fello inn exceptions:
• Softwme as service and exception of software license antsas service and software
licensing agreement, which are permitted for up to five years and easements, which may be
for any duration without Council approval.
• CIP Project / Plan contract extensions aFe peFmitted, as appFoved by Council, through
eempletion of the pr-ejeet
Itemized vendor receipts or invoices including vendor name, a description of items or services, the
transaction or service date(s), and amount paid or to be paid are always required.
All purchases should be made e-F onsistent with the City's Purchasing and Contract Commitment
Threshold, the Administrative Contracting and Procurement Manual, and in accordance with
applicable City, State, and Federal requirements fOFacquiring quotes, estimate` and competitive
Wig. Dollar amount thresholds include freight, handling, set-up costs, and applicable sales tax.
Splitting purchases into smaller purchasing components to circumvent thresholds or applicable
laws, policies, or procedures is never allowed.
Purchases and/or contracts that include Federal funding shall also comply with the Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards,
published under Title 2 of the Code of Federal Regulations (2 CFR 200). In circumstances where
requirements differ between City, State or Federal policy, the most restrictive of Federal, State or
City policy -level requirements will be met.
4.5.1 Non -Budgeted Expenditures
Non -budgeted expenditures require Council budget amendments before the purchase or
commitment may be made. Examples include Fogova and OF State grants r
4.5.2 Interlocal Agreements and Leases
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Interlocal agreements and leases require Council approval and the Mayor's signature.
Please see the Administrative Contracting and Procurement Manual for more information
regarding what constitutes an interlocal agreement.
4.5.3 Change Orders/Amendments to Contracts for Public Works Projects
ChangeA change order is the formal document that alters some condition of a contract for a
1public works" project, as defined in RCW 39.04.010. A change order may alter the contract
price, schedule of payments, completion date, or the plans and specifications, among other
things. A change order or an accumulation of change orders pushing a contract or purchase
total into a higher commitment dollar threshold shall be approved and signed by she F0le
assigtedas required for that higher signature dollar threshold.
FEW a-CapitalPr-E)}eet,, aPUFchaseOF EeHtFaEt changeorder-1imit-The Department Director
overseeing the project is , 0% of authorized to execute change orders to public works
contracts that were originally approved by the City Council, so long as accumulated change
orders for such project do not exceed the amount of the total project budget, including
contingency ham, established by the City Council.
Notwithstanding the forgoing. the Mavor or their documented designee may authorize an
change order that is necessary to avoid unacceptable project delay or $25,000 ..,h;,.i,,.yer- is
greaterto comply with grant funding deadlines or the like: provided, any such change order
that would otherwise require Council approval iS Fequ;,-oa for- amount -per this section will
be brought to the Council for ratification at a subsequent regular meeting.
4.5.4 Retainage and Bonds
RCW 60.28.011(l)(a) generally requires the City to reserve contract retainage in an amount
not exceeding the Ng#five percent of the monies collected by a contractor engaged in a
public works project. The purpose of retainage is to provide a financial incentive for
contractors to finish the project and so that there are funds available to pay certain
obligations for the project should the contractor fail to do so.
4�4However, managing retainage is resource intensive and time consuming for City staff.
Pursuant to RCW 39.04.155(2)(0 and (3)(b). to the City shall waive the retainage
requirements of RCW 60.28.011(l)(a) for public works contracts procured using the small
works roster or limited public works process, thereby assuming the liability for contractor's
nonpayment of taxes or any laborers, mechanics, subcontractors, materialpersons, or
suppliers for the project. The City retains the right of recovery against the contractor for any
such payments made on the contractor's behalf. This provision applies only to contracts
procured using the small works roster or limited public works process.
4.5.5 Procurement/Solicitation Requirements
Competitive solicitation requirements shall be as set forth in state law and Chapter 3.70
IMC. More detailed information regarding those requirements can be found in the
Administrative Contracting and Procurement Manual.
4.5.6 Exceptions to Solicitation Requirements
Exceptions to competitive solicitation requirements per RCW 39.04.280 include but may
not be limited to:
Emergency purchases as outlined in Section 4.7 of this policy
• Sole source situations if appropriate, documented, and approved by Finance or
their documented designee
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• Auctions or "special market conditions" if items are at better than market price
• Purchases using master contracts established by Council -approved agencies
• Equipment leases
• Insurance or bond purchases
• Renewals of software maintenance and proprietary IT hardware maintenance
• Professional licenses and memberships
• Publications and subscriptions
• Conferences and seminars including registration, tuition, room and board, etc.
The "" aye r''^More detailed information regarding the c^'^ ^*''^r�*�• *^ �• .•^ exceptions to the
City's procurement/solicitation requirements but are contained in the Administrative Contracting
and Procurement Manual.
4.5.7 Amendments to Contracts Other than Public Works Contracts
Only contracts that have not yet expired may be extended or amended. An amendment to a
contract that pushes the total contract or purchase price (including any prior amendmentsl
into a higher commitment dollar threshold shall be approved and signed as required for
that higher signature dollar threshold.
If Council approval was required for the original contract. Council approval is necessary for
amendments to the scope of work or cost of the work. Council approval is not required for
amendments that modify the term of the contract only to the extent as author-ize'or when
the authority to amend was delegated by State La Council in the original contract.
Notwithstanding the forgoing. the Mayor or their documented designee may authorize any
amendment that is necessary to avoid unacceptable delay or to comply with grant funding
deadlines or the like: provided, any such amendment that would otherwise require Council
ap rpm oval per this section will be brought to the Council for ratification at a subsequent
regular meeting.
4.6 Purchasing Controls & Methods
Primary responsibility and authority for the expenditure of monies per the adopted budget will be
vested by the Mayor in the City Administrator and Department Directors ored
designee. documented designees. In addition to the primary responsibilities, the Dance
Pir-eete Chief Financial Officer shall exercise a secondary oversight responsibility for all budget
expenditures and contractual obligations. This shall include the right to audit all City contracts,
regardless of department, to ensure compliance with applicable laws and policies.
A purchase order system and/or procurement -card programs may be used for all purchases.
Procurement card purchases must comply with the Procurement Card Policy and the Travel and
Meals Policy.
Opening retail accounts, lines of credit and other accounts in the name of the City shall not be
allowed unless approved by the Finance Dire *^rChief Financial Officer or his/hertheir documented
designee.
In general, departments and/or department employees shall make purchases for the requirements
of the City. To facilitate a sound and cost-effective purchasing operation, authorized personnel shall
follow procurement policies and methods, including but not limited to, bidding and awarding
contracts.
4.7 Emergency Purchases
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Emergency purchases as per RCW 39.04.280 and °G`^' -2Q'6' -20- are those made by the Mayor or
—a edtheir documented designee where an immediate purchase is necessary to correct a
situation which Nvould adveFsely affect the noses a real, imminent threat to life, health, or safety -of
citizens,the of members of the public, staff or Deis likely to result in damage to City and or other
property. The emergency purchase process may also be followed if waiting for Council approval
would cause unnecessary, often expensive delays for a project r, epair, or other City endeavor.
Before proceeding, approval of the Mayor, City Administrator or Finance DiF *^rChief Financial
Officer is required.
To the greatest extent possible, procurement policies should be followed for emergency purchasing.
However, in case of an emergency, the Mayor, City Administrator, Department Director or a
documented designee may purchase directly any supplies, materials or services necessary to
alleviate the emergency. Every effort shall be made by the purchaser to contact the Mayor and City
Administrator or Finance Dire *^rChief Financial Officer whether the emergency occurs during or
after normal working hours. The purchaser must provide the following to the Finance DiF *^rChief
Financial Officer or his/he-Ftheir documented designee within three business days: a description of
the purchase and emergency as well as an explanation as to why the emergency purchase was
required. If City Council -level approval would typically be required for the purchase, the purchase
shall be reported to the City Council at the next Regular City Council meeting.
In the event emergency purchasing is related to natural disaster events, a Declaration of Emergency
Resolution shall be considered by the City Council per State Law at the first opportunity available.
The Finance DiFe *^rChief Financial Officer shall review and approve account coding for all
emergency purchases and maintain a tracking system per FEMA requirements, Emergency
Management Plan, BARS and GFOA recommended practices for emergency management
recordkeeping.
4.8 Personnel Expenditures
Because personnel costs are the largest expenditure area of the ann-ualbiennial budget,
compensation guidelines are defined in the Personnel Policy, Exempt Employee Benefit Handbook
and Local Bargaining Agreements which establish salary ranges, performance evaluation
requirements and total compensation costs as the basis for all compensation planning and
bargaining.
5.0 BUDGET
5.1 Budget Objective
The formal operating and capital budget development process provides the primary mechanism by
which key decisions are made regarding the levels and types of services to be provided, given the
anticipated level of available resources. The City Council will meet to discuss Council goals and
priorities prior to the start of the budget development process. The budget will be developed per
Ch. 35A.34 RCW.
5.2 Budget Principles
5.2.1 Link the budget to long-term, strategic financial plans
The City's budget will be developed in accordance with the policies and priorities set forth
in the five-year Strategic Plan, Comprehensive Plan, City Council goals, the needs of the
community and federal and state laws.
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5.2.2 Critically examine past spending patterns
The City seeks to maximize the value the public receives through its spending. Accordingly,
management should develop budget tools and methods to measure and maximize value,
particularly by critically examining existing spending patterns to make sure they continue
to provide value.
5.2.3 Prioritize programs and services
The City will prioritize essential and discretionary programs services based on a results
approach relative to the importance in preserving the community's health, safety, and
welfare; mandates; risk assessments; long-term costs and evidence of their effectiveness in
meeting strategic plan initiatives, comprehensive plan elements, annual goals and required
mandates. Essential services may receive priority for funding. The City will attempt to
maintain current service levels for all essential services. The City will identify low -priority
services for reduction or elimination, if necessary, before essential services. New services
shall be evaluated for long-term sustainability.
5.2.4 Maintain existing services over providing new services
The City will ensure that it maintains the quality of existing core services before it adds new
services unless there is an explicit decision to lower the quality of existing services in favor
or providing a new service based on strategic goals and objectives.
5.2.5 Risk management and mitigation of liabilities
The City intends to fund the current portion of liabilities within the budget to maintain trust
of creditors and to avoid or mitigate accumulating an unmanageable liability.
5.2.6 Establish preferences for budget balancing strategies
The City's preferred strategy for balancing the budget is to reduce expenditures through
improved productivity. Except during dire economic circumstances, service and program
elimination is preferable. At no time, will the ann-u-albiennial budget be balanced at the
expense of long-term financial health.
5.3 Budget Scope & Basis
The City will adopt budgets for all funds on a biennial basis per Washington State law. A budget
calendar will be prepared by the Administration and include all required public hearings. Proposed
budgets will be viewed and discussed by the City Council and the public at the fund and department
summary object code levels per BARS. The final budget will be adopted by ordinance of the City
Council, at the fund level, by December 31 of each biennium. To encourage synchronization
between the budget document and financial reporting, the City will establish the budget based on
the accrual basis of accounting.
5.4 Balanced Budget
The objective of the operating budget is to pay for all current expenditures with current revenues.
The budgets for all city funds should be structurally balanced throughout the budget development
process. Recurring revenue should equal or exceed recurring expenditures in both the proposed
and adopted budgets. If a structural imbalance occurs, then a plan will be developed and
implemented to bring the budget back into structural balance. The City will endeavor to avoid
budgetary allocations that balance current expenditures at the expense of meeting future years'
expenses. Beginning fund balance sources may be used to fund capital improvement projects or
other one-time, non -recurring expenditures if the fund reserve targets are met.
5.5 Performance Management
Placeholder for Performance Management and Performance Measurements when implemented.
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5.6 Cost Allocation
The Cost Allocation Plan (CAP) is a method used to determine and assign the cost of indirect
services to the internal government users of those services or direct operating funds.
5.6.1 References
OMB Circular A-87, "Cost Principles for State, Local, and Indian Tribe Governments."
RCW 43.09.210 states in part, "all service rendered by ... from, one department... to another,
shall be paid for at its true and full value by the department... receiving the same, and no
department... shall benefit in any financial manner whatsoever by an appropriation or fund
made for the support of another..."
5.6.2 Definitions
Indirect Costs are incurred for a common purpose benefitting more than one cost
function or organizational unit. They cannot be directly assigned without effort
disproportionate to the benefit received.
Indirect Services are activities that support the departments that provide direct
service to the public. Examples include accounting, purchasing, human resources,
engineering, and fleet and information technology.
Direct Services are activities that provide services directly to or for the public and
are supported by indirect services. Examples include parks, streets and utilities
(water, sewer, storm water).
5.6.3 Costs to be allocated
Costs shall only be allocated to departments that receive indirect support services. Only
costs allowable for allocation in accordance with the requirements of OMB Circular A-87
shall be included in the cost allocation plan. This means that the City's resulting allocation
plan will meet federal grant cost allocation requirements. It is the responsibility of staff
creating the department's indirect cost allocation plan to review OMB Circular A-87 and
ensure that only allocable costs are included.
As part of the annu-albiennial budget development process, costs will be allocated based on
the projected year budget forecast. Annually, a year-endmid-biennium adjustment or true
up will be completed for the previous year's difference between budget -to -actual results or
allocated based on actual costs. The true up will occur as part of the mid -biennium
adjustment and year-end financial reconciliations in preparation for the annual audit.
5.6.4 Basis of Allocation
Indirect cost allocation methods, as defined in financial procedures, shall be reasonable,
consistent, and equitable to distribute shared costs across funds and departments. Different
factors are necessary to equitably allocate the various overhead costs. The ;wee
Dir-ectoTChief Financial Officer is responsible for preparing and determining which factor(s)
will best accomplish this based on input from Direct Service Department Directors.
5.7 Budget Amendments
All budget amendments, such as shifting budget allocations from a) one fund to another fund; b)
personnel and benefits and c) capital outlay or capital project expenditures must be approved by
the City Council. Budget amendments changing the authorized appropriation level are subject to
public hearing requirements in State Law
5.7.1 Administrative Budget Adjustments
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Department managers may, upon approval by the Mayor and City Administrator, request
inter -departmental line item budget adjustments for operating purposes only. These
administrative budget adjustments, authorized as per Ch. 35A.33.120 RCW, may be for
contractual, supplies and materials and other miscellaneous line items within the
department. No administrative adjustments are allowed for personnel and capital outlay
items. The process for requesting an administrative budget adjustment is defined in
financial procedures.
5.8 Service Levels and Funding
The City will endeavor to maintain its present service levels for priority and essential services
subject to available revenues. The objective is to maximize the benefit of available resources. The
results or outcomes that matter most to citizens should be defined by the City Council.
New services or programs will be considered for funding within available resources.
Department managers will be given the opportunity to request personnel, goods, and capital items
needed to carry out the department responsibilities. Department requests must include supporting
documentation and justification of needs for operating requests. Requests should integrate
strategic plan priorities and departmental objectives into the budget.
5.8.1 Non -Profit Organization Funding Requests
The City receives requests from non -profits and other entities seeking grants and funding.
As part of the budget development cycle, the City Council will consider these requests and
include a listing of entities to be included for grant giving and funding.
5.9 Maintenance and Replacement
Maintenance and replacement funding will be prioritized each year to ensure that capital facilities
and equipment are sufficiently maintained to avoid service disruptions. Non -current liabilities have
important implications for a local government's fiscal health. The City will maintain its capital
assets in a manner adequate to protect the City's capital investment and to minimize future
liabilities for maintenance and replacement costs. Financial procedures will identify the processes
to include:
• Complete inventory and periodic measurement of physical condition
• Establish condition/functional standards by asset class
• Evaluate infrastructure and other assets and then set priorities
• Monitor and communicate progress
5.9.1 Capital Asset Management
The City inventories and assesses the condition of its buildings, equipment and vehicles on a
periodic basis. The budget process includes a multi -year projection of facilities, equipment and
vehicle replacement requirements. The budget will provide sufficient funding for adequate
maintenance and orderly replacement of capital plant and equipment. Future maintenance
needs and repairs will be cost out and included as budgetary decision criteria through the
Internal Service Fund designated for Fleet and Facility maintenance.
5.10 Enterprise Fund Budgets
Enterprise operations are to be self-supporting, including capital improvements and depreciation.
Enterprise operations are to be reviewed annually for self-sufficiency and proper cash -flow needs.
Utility Rate studies, which occur every five years, will be included in the budget development
process in the year for which new rates are established. Enterprise operating budgets will
incorporate year one capital projects as identified within the Capital Improvement Plan (CIP).
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5.11 Budget Reporting
The recommended and adopted budget documents will be available on the City website and at City
Hall. The City will maintain an internal control system to help adhere to the budget allocations.
Regular reports comparing actual revenues and expenditures to budgeted amounts will be
provided to departments monthly. The City Council will review quarterly budget versus actual
reports.
6.0 CAPITAL BUDGET
6.0 Objective
The City of Issaquah Capital Budget will have a major impact on quality of local government services,
the community's economic vitality, environmental stewardship, social equity and overall quality of
life for city residents, businesses and visitors. The Capital budget will identify, prioritize, and address
community needs through careful long-term planning and balanced public investment in physical
infrastructure. Capital budget goals include:
• Support the City"s Strategic Plan, other plans and the community vision for growth and levels of
service
• Acknowledge and communicate capital investment priorities as community conditions change
• Ensure appropriate planning efforts to changing demands on a diverse infrastructure and capital
asset.
• A financial assessment of capital funding resources available to meet future capital project
planning needs per the financial policy
• Maintain a high -quality service infrastructure able of meeting community needs today and in the
future
6.1 Capital Improvement Plan (CIP)
The Capital Budget plan will be formally known as the Capital Improvement Plan (CIP) and will
describe the capital investments the City intends to make over a period of six years with a long-term
outlook. The CIP will incorporate all master and functional plans and programs wherever projects
are identified in those plans. Master plan changes will be incorporated into the CIP during the next
biennial capital improvement plan cycle. The CIP will serve as a comprehensive guide for all capital
projects - based on asset types -- where the City Council will address capital infrastructure
improvements, capital equipment needs, and the effect on the City's resources.
The City Council will review the CIP biennially and coordinate development of the multi -year Capital
Budget prior to the development of the a*n-u-albiennial operating budget. The off-year capital budget
cycle will allow for public engagement efforts to discuss potential projects with the community and
include major capital project changes that occur or are discovered. As resources are available and
projects are financially feasible, the most current year of the CIP will be recommended for
incorporation into the upcoming operating budget as capital project budget line items. The operating
budget will refer to the capital budget for detailed project information. Subsequent years of the CIP
are for planning purposes only and may be altered as they advance toward the budget inclusion year.
6.2 CIP Criteria and Ranking
Criteria, project ranking and overall priority guidelines, defined in fi,,-.ncia' rFaced +F-&sas part of the
development of the Capital Improvement Plan, will be utilized by the City Council. CIP projects will
be evaluated and ranked using the criteria set forth in the City's currently adopted CIP. All projects
submitted to the CIP will be initially ranked by departments. The Administration will assess project
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rankings plus other factors such as minimizing construction impacts through project sequencing or
a need to respond to emergent issues. The City Council, as part of biennial capital budget
deliberations will modify and/or finalize project rankings. Funding is a critical component of the
criteria and ranking schedule. In addition to project scoring, projects need an overall description,
justification for the project and the connection to a master plan or strategic plan reference as needed.
Projects shall also be identified as unfunded, partially funded or fully funded.
City of Issaquah
Capital Improvement Plan
Capital Project Priority Definitions based on project ranking score
Priorities
Category
Definition
Scoring
CIP Priority
Essential
Project must comply with court order, legislative mandate or is critical to the
90-100 points
1
health, safety and general welfare of citizens
Project is important to general welfard of the community, operation or
Desirable
maintenance of a physical facility. Due to the nature of the project or its timing,
70-g9 points
2
Project provides a public operational improvement. Due to the nature or
Acceptable
scheduling of the project, it is not critical or important in relation to financial
50-69 points
3
capabilities, needs or other program requirements
Deferrable
Project is conflict with a master plan or for which there are serious need, cost,
30-49 points
4
justification or timing questions
Hold
Project will not be started until the completion of a study, submission of
0-29 points
5
additional data or significant funding source
6.3 Project Source and Use Identification
Capital project submissions shall include multi -year funding sources, including grants, applicable
impact fees, special funding and other outside sources. Multi -year project costs shall include
acquisition, right-of-way, design, permitting, inspections, mitigation, construction, in-house staff
time, inflationary costs and contingency shall be included in the project identification.
6.3.1 Project Sources
Capital funding comes from operating revenues, grants, local improvement districts, impact
fees, user fees and the issuance of debt. Washington State law limits the City of Issaquah's
ability to raise funds for capital improvements such as tax rate limits and amount of debt
capacity. Given the extensive number of capital improvement projects and finite funding
sources available, the following are capital financing strategies used by the Issaquah City
Council when preparing or updating the Capital Improvement Plan:
• Seek out federal, state and county resources
• Seek out private contributions or donations through public/private partnerships
• Similar departmental capital projects will be combined for efficiencies and cost savings
such as street improvements combined with utility improvements to minimize
construction impact to the community
• Mitigation and impact fees may be applied toward projects defined by the contributing
source or agreement authorized by the City Council
• REET funding
• Local Improvement or Utility Local Improvement District (LID or ULID) assessments
• Enterprise (utility) fund projects must be paid for by user rates and capital connection
charges
6.3.1.1 Funding Source Cash Flow
Funding sources, such as REET or Mitigation, that are accumulated within special
revenue funds will be reviewed as part of the biennial CIP development process for
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sufficient cash flow and long-term impact on the fund. The availability of special
funding sources is subject to reserve targets set by the City Council as per the Reserve
section of the Financial Policy.
6.3.2 Project Costs
For the CIP, capital outlay is distinguished from capital projects. Capital outlay may include
expenditures for small minor projects, such as equipment replacements, between $5,000 and
$49,999 and/or having less than an estimated five years of useful life. Capital outlay type
expenditures will be included in the operating budget, as well as, master planning or
professional services of any size and scope, adopted by the City Council, shall be budgeted for
within the operating budget as a separate line item identified as capital outlay.
All capital projects or capital equipment purchases at least $50,000 and/or having a useful
life of five years or more are included in the CIP. These projects include large capital
maintenance and replacement items that extend the useful life of the capital asset. Projects
may not be combined to meet the minimum standard unless they are dependent upon each
other. Projects may not be separated to forego the maximum standard. Items that are
operating expenditures (such as non-specific capital project related professional services,
master plan updates, maintenance agreements, technology items, etc.) will not be considered
within the CIP.
6.3.2.1 Impact on Operating Budget
All projects submitted to the CIP will be reviewed by a capital results team for its long-
term impact on the operating budget in terms of:
• Future year revenue generation
• Additional personnel, equipment and/or vehicle requirements
• Future operating and maintenance expenditures
• Return on investment potential
6.4 Planning Process
The capital budget and CIP development process will begin in February of each year. CIP
development shall include all city departments and capital project result teams, Council committees
and public engagement efforts, utilizing the administrative public engagement toolkit, to ensure the
community has ample time to comment on and contribute to the CIP. The Mayor and Administration
will present the CIP to the City Council for approval prior to the start of the annual operating budget
development. Any substantive change to the CIP after approval must be approved by the City Council.
7.0 DEBT MANAGEMENT
7.1 Debt Purpose
Debt financing is primarily used for capital project expenditures. Use of long-term debt financing
for operations and maintenance costs are forbidden. Debt financing will be considered if the City
can repay debt without causing financial distress. It is the City's objective to:
• Only obtain financing when necessary
• Identify the timing and amount of debt required as specifically as possible
• Achieve the most favorable interest rates and other related financing costs
• Ensure that future financial flexibility be maintained
• Utilize inter -fund loans from one fund to another as a first source of debt financing
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7.2 Debt Practices
The City Council may authorize the following types of debt financing only for those purposes as
provided by Ch. 39 RCW:
• Utilization of the Public Works Loan Fund, per WAC 399.30 for allowable purposes, if
available
• Utilization of Inter -Fund Loans as per the BARS Manual Part 3, Chapter 4, Interfund
Transactions, Section 1
• Issuance of Councilmanic Bonds to fund proprietary capital infrastructure projects such as
water, sewer and storm water
• Issuance of Councilmanic Bonds for capital projects that generate adequate revenues from
user fees to support operations and or debt service requirements
• Issuance of Councilmanic Bonds for capital projects that are authorized to be supported by
the General Fund for debt service requirements
Utility System replacements, due to age or the need to upgrade to meet minimum standards, should
be financed by a combination of:
• Reserving portions of the Enterprise fund balance for capital improvement projects
• Borrowing and repaying on a schedule that matches the useful life of the capital
improvement
The City of Issaquah will never issue debt more than limitations as prescribed in Ch. 39.36.020 RCW
based on percentage of its total market value.
7.3 Bond Terms & Methods
Long-term debt will be structured in a manner so that the life of the debt does not exceed the
expected useful life of the capital asset being funded by the debt. The City will obtain the most
competitive pricing on debt issuances to ensure a favorable value to the community.
7.4 Refunding Bonds
As a rule, existing debt obligations will be refunded through the issuance of refunding bonds unless
the refunding plan will achieve a net present value savings of at least 2.5%.
7.3 Bond Rating
Strong financial management is a key credit rating factor. For the City of Issaquah to respond
quickly to economic and financial demands, the City will seek to maintain or continually improve its
bond rating to seek the lowest possible interest rate available OR maintain its AAA Bond Rating.
The City will also maintain a "strong" Financial Management Practice (FMA) score - as defined by
Standard & Poor Financial Management rating criteria - to provide transparent and consistent
information about financial management practices.
7.4 Financial Guarantees
Should financial guarantees be utilized to defer public improvements required of development
projects or to ensure that disturbed public facilities will be restored, the developer or property
owner shall provide an irrevocable letter of credit issued by a banking institution approved by the
Finance DiFec*^rChief Financial Officer, a bond, an assignment of savings, or a cash deposit. The
form of the financial guarantee shall be at the discretion of the Finance Di - *^rChief Financial
Officer. The amount of any approved financial guarantee shall be at least 150% of the estimated
improvement cost and may be increased to reduce risk to City resources based on the professional
judgment of the Finance DiF *^rChief Financial Officer.
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8.0 INVESTMENTS
8.1 Policy and Scope
It is the policy of the City of Issaquah to invest public funds in a manner which will provide the
highest investment return with the maximum security while meeting the daily cash flow demands
of the City and conforming to State law governing the investment of public funds.
The investment policy applies to all financial assets of the City of Issaquah. These funds are
accounted for in the City of Issaquah's Annual Financial Report and include all operating, special
revenue, capital project, enterprise, debt service and trust funds.
8.2 Prudence
Investments shall be made with judgment and care, under circumstances then prevailing, which
persons of prudence, discretion and intelligence exercise in the management of their own affairs,
not for speculation, but for investment, considering the probable safety of their capital as well as
the probable income to be derived.
The standard of prudence to be used by investment officials shall be the "prudent person" and/or
"prudent investor" standard and shall be applied in the context of managing an overall portfolio.
Investment officers acting in accordance with this policy and with Ch. 35.39 RCW and exercising
due diligence, shall be relieved of personal responsibility for an individual security's credit risk or
market price changes, provided deviations from expectations are reported in a timely fashion and
appropriate action is taken to control adverse developments.
8.3 Objective
The primary objectives, in priority order, of the City of Issaquah investment activities shall be:
8.3.1 Safety: Safety of principal is the foremost objective of the investment program.
Investments of the City of Issaquah shall be undertaken in a manner that seeks to ensure
the preservation of capital in the overall portfolio. To attain this objective, the City of
Issaquah will diversify its investments by investing funds among a variety of securities
offering independent returns and financial institutions.
8.3.2 Liquidity: The City of Issaquah investment portfolio will remain sufficiently liquid to
enable the City to meet all operating requirements, which might be reasonably anticipated.
8.3.3 Return: The City of Issaquah investment portfolio shall be designed with the
objective of attaining a benchmark rate of return throughout budgetary and economic
cycles, commensurate with the City's investment risk constraints and the cash flow
characteristics of the portfolio. Short-term investment returns should attain a return rate of
at least equal to the Washington Local Government Investment Pool (LGIP).
8.4 Delegation of Authority
Management responsibility for the investment program is hereby delegated to the Finance
Dir-ectoTChief Financial Officer or their documented designee who shall be responsible for all
transactions undertaken and shall establish a system of controls to regulate the activities of
subordinate personnel and their procedures in the absence of the FiHaHe^ Dire^*^rChief Financial
Officer.
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8.5 Investment Procedures
The Fin „^^ Pir^^*^rChief Financial Officer shall establish written financial procedures for the
operation of the investment program consistent with this policy. The procedures should include
reference to safekeeping, repurchase agreements, wire transfer agreements, banking service
contracts and collateral/depository agreements. Such procedures shall include explicit delegation
of authority to persons responsible for investment transactions. No person may engage in an
investment transaction except as provided under the terms of this policy and the procedures
established by the Firer^^ Dire^*^rChief Financial Officer.
8.6 Ethics and Conflicts of Interest
Public officials and city employees involved in the investment process shall refrain from personal
business activity that could conflict with proper execution of the investment program, or which
could impair their ability to make impartial investment decisions. Employees and investment
officials shall disclose to the City Council any material financial interest in financial institutions that
conduct business within their jurisdiction, and they shall further disclose any large personal
financial/investment positions that could be related to the performance of the City of Issaquah.
8.7 Authorized Financial Dealers and Institutions
The Finance T1-0"^^*^rChief Financial Officer will maintain a list of financial institutions authorized to
provide investment services. In addition, a list will also be maintained of approved security
broker/dealers selected by credit worthiness who are authorized to provide investment services in
the State of Washington. These may include "primary" dealers or regional dealers that qualify
under Securities & Exchange Commission Rule 15C3-1 (Uniform Net Capital Rule). No public
deposit shall be made except in a qualified public depository as established by Washington State
laws.
All financial institutions and broker/dealers who desire to become qualified bidders for investment
transactions must supply the F;n^^^^ n4^^*^rChief Financial Officer, upon request, with annual
audited financial statements, proof of National Association of Security Dealers (NASD) certification,
and proof of State of Washington registration. Annual completion of Notification to Broker and
Certification by Broker will be done.
8.8 Authorized and Suitable Investments
From the governing body perspective, special care must be taken to ensure that the list of
instruments includes only those allowed by law and those that local investment managers are
trained and competent to handle. Interest -bearing deposits in authorized depositories must be
fully insured or collateralized.
The following is a list of investments which the City of Issaquah will be authorized to invest in as
per Ch. 39.58 and 39.59 RCW:
Government Securities: Instruments such as bonds, notes, bills, mortgages and other
securities which are direct obligations of the federal government or its agencies, with the
principal fully guaranteed by the U.S. Government or its agencies.
Certificate of Deposit: A negotiable or nonnegotiable instrument issued by commercial
banks, located in the State of Washington and insured up to $100,000 by the Federal
Deposit Insurance Corporation (FDIC), or, if exceeding $100,000 FDIC coverage, is fully
insured or collateralized.
Prime Commercial Paper: An investment used by corporations to finance receivables. A
short-term (matures in 270 days or less) unsecured promissory note is issued for a
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maturity specified by the purchaser. Corporations market their paper through dealers who
in turn market the paper to investors.
State of Washington Securities and Pools: Any security which is a general obligation of
the State of Washington or any of its municipalities. Statewide investment pools which
invest in authorized instruments.
Money Markets: Money market mutual funds which invest in authorized instruments.
8.9 Safekeeping and Custody
When a broker dealer holds, investments purchased by the City of Issaquah in safekeeping, the
broker -dealer must provide asset protection of $500,000 through the Securities Investor Protector
Corporation (SIPC) and at least another $49.5 million supplemental insurance protection.
8.10 Diversification
The City will attempt to diversify its investments per type and maturity. The portfolio, as much as
possible, will contain both short-term and long-term investments. The City will attempt to match
its investments with anticipated cash flow requirements, as per the long-range financial plan.
Extended maturities may be utilized to take advantage of higher yields and to match investment
maturities with debt obligations; however, no more than 20% of the total investments should
extend beyond five years. Unless prior City Council approval is received, no investment with a
maturity exceeding 10 years will be purchased.
The City will attempt to d itydiversify its investment portfolio per broker -dealer or
financial institutions. No more than 65% of the entire investment portfolio shall be held
with one broker.
8.11 Reporting
Periodic required investment reports to policymakers and elected officials provide necessary
written communication regarding investment performance, risk analysis, adherence to policy
provisions, as well as other information. The Finance Dire Chief Financial Officer shall provide
the City Council periodic investment reports, which provide a clear picture of the status of the
current investment portfolio. The management report should include a summary of securities held
at the end of the reporting period by authorized investment category, percentage of portfolio
represented by each investment category, percentage of portfolio represented by each financial
institution, and overall portfolio values.
9.0 LONG-TERM FINANCIAL PLANNING
The City's budget process involves incorporating the goals and strategies identified by the City
Council to provide for the community's highest priority needs. Long-term planning begins with
determining the City's fiscal capacity based upon long-term financial forecasts of recurring
available resources.
9.1 Model Objective
A 5-year Financial Model that integrates the 5- year Capital Improvement Plan (CIP) is utilized to
assist the City Council, Executive Department and Department Directors in strategizing and aligning
financial capacity with the City Council Strategic Plan and objectives. The long-term financial model
serves as a foundation for conversations regarding purchases and project planning. The forecasting
model utilized will be conservatively objective to minimize the risk of being too optimistic in
forecasting revenue sources.
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The model will include an analysis of historical, current and future year's financial environment,
revenue, operating and capital expenditure forecasts, debt positions and affordability analysis. The
financial model will be updated as needed to provide direction to the budget process and other
fiscal decision making actions of the City Council.
10.0 AUDITING, ACCOUNTING & INTERNAL CONTROL
The City of Issaquah will establish and maintain a high standard of accounting practices and
procedures. Accounting standards will conform to Generally Accepted Accounting Principles
(GAAP) as outlined by the Governmental Accounting Standards Board (GASB). Accounting
standards will reflect Best Practices recommended by the Government Finance Officers Association
(GFOA) and chart of accounts required by the Washington Office of the State Auditor (SAO) BARS
manual.
After each fiscal year, the City will prepare a Comprehensive Annual Financial Report (CAFR) and
the Washington SAO will conduct an audit of the City financial transactions, contract management
and internal control. The report will include a financial opinion and a management and compliance
report on internal controls. Annually, a comprehensive annual financial report will be prepared by
the City. This report shall be made available to elected officials, city management, bond -rating
agencies, and the public.
10.1 Internal Control
The City Council and City Management is responsible for ensuring and maintaining a system of
internal control to safeguard its assets against loss, check the accuracy and reliability of its
accounting data, promote operational efficiency, and encourage adherence to prescribed financial
procedures.
The Finance Di - *^rChief Financial Officer shall develop internal control processes or financial
procedures to ensure and maintain a strong internal control function. Periodic updates and new
recommended practices set forward by the SAO and GFOA are communicated and addressed with
the City Council. Any weakness in internal control and accounting procedures shall be addressed
immediately by the Mayor, City Administrator or Finance Di - *^rChief Financial Officer so a
timeline to remedy improvement can be established.
10.2 Accounting Write-offs
The Finance Di - *^rChief Financial Officer shall make every effort to collect all receivables owed to
the City and will comply with RCW Ch. 4.16 regarding collection actions by local governments. The
following is criteria that must be met before a receivable is allowed for write-off:
• Standardized collection procedures have been exhausted
• A determination has been made that the debt is uncollectible or that further measures to
collect the debt are inappropriate and deemed to exceed the cost of collection
• The characteristics of the debt are such that write-off is appropriate - If funds are
uncollectible, the Fifia ee P -e Chief Financial Officer would decide for write offs to a bad
debt expenditure up to $5,000. City Council approval is required for balances above this
threshold and must accompany the write off to the bad debt expenditure.
• The reason for the write-off is documented adequately and is made available for audit.
10.3 Petty Cash and Bank Account Controls
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The FiN^„^^ Dire Chief Financial Officer shall establish processes for control and handling of
petty cash funds, which include investigative buy funds. The Fi„I„^^ Dire^*^rChief Financial Officer
will oversee and manage all City of Issaquah Banking Accounts such as Imprest accounts, Claims
accounts, and Payroll accounts within financial procedures. Bank accounts will be reconciled
monthly.
10.4 Capital Assets
10.4.1 Capital Asset Classes
Capital assets are tangible and intangible assets acquired either by purchase or lease for use
in operations that will benefit the local government for more than a single fiscal period.
Typical examples of capital assets include:
• Land and improvements to land, including right of ways and easements (real
property)
• Buildings and building improvements
• Vehicles
• Machinery and equipment
• Works of art and historical treasures
• Infrastructure assets (roads, bridges, sidewalks, and utility system components
(such as water lines, sewers, drainage systems)
• Intangible assets (easements, licenses, and computer software)
10.4.2 Capital Asset Records
The City shall maintain an accurate and updated listing of capital assets containing the
following for each asset:
• Category of asset
• General ledger fund and asset account the asset is recorded in
• Individual or department assigned custody of the asset
• Acquisition information, including references to source documents and acquisition
dates
• Source of payment (example: grant or bond proceeds) for regulatory compliance
and the fund that "owns" the asset
• Historical cost
• Name and description of asset
• Any identifying numbers or legal descriptions (if applicable)
• Estimated useful life
• Disposition information (including the date and method)
• Insurance, maintenance, and repair instructions
• Physical inspection dates or condition of asset when it was inspected
10.4.3 Capital Asset Threshold
Capital asset thresholds are based upon the asset class with a useful life greater than 3 years
purchased, constructed, leased or donated and the dollar amount stated below:
• Land and improvements to land, including right of ways and easements (real
property): $5,000 or greater
• Buildings and building improvements: $50,000 or greater
• Vehicles: $5,000 or greater
• Machinery and equipment: $5,000
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Works of art and historical treasures: $5,000
Infrastructure assets (roads, bridges, sidewalks, and utility system components
(water lines, sewers, drainage systems): $50,000 or greater
Intangible assets (easements, licenses, and computer software): $50,000 or greater
10.4.4 Capital Asset Depreciations
For purposes of asset disposition and equipment replacement planning, the City shall
depreciate capital assets under a straight-line method, based on the asset's useful life to a
book value of $1.00 or salvageable value. Asset life is determined in accordance with IRS
guidelines, Publication 946 ARpendix B:
• Land and improvements to land, including right of ways and easements: 30-50 years
• Buildings and building improvements: 30-50 years
• Vehicles: 3-20 years
• Machinery and equipment: 3-20 years
• Infrastructure assets (roads, bridges, sidewalks, water lines, sewers, drainage
systems): 30-40 years
• Intangible assets (easements, licenses, and computer software): 3-5 years
10.4.5 Capital Asset Impairment
GASB Statement 42, Accounting and Financial Reporting for Impairment of Capital Assets
and for Insurance Recoveries Summary of Statement No. 42 (gasb.org) requires
the immediate recognition of decreases in the productive capacity of capital assets
(impairment) that are expected to remain in service, even if there is no change in the
estimated useful life of the asset.
GASB 42 identifies four indicators of possible impairment:
• Evidence of physical damage - such as an office building damaged in a storm
• Changes in legal or environmental factors - such as an underground storage tank
that is no longer usable due to changes in environmental standards
• Changes in manner or duration of use - such as an administrative building being
used as a warehouse
• Construction stoppage - legal or practical reasons may cause to abandon a
construction project, such as a road construction that threatens the habitat of
endangered species
GASB 42 notes that the presence of one of these indicators does not automatically prove
that the impairment has occurred. The nature of the impairment should be only permanent.
A permanent impairment is based upon judgement of the asset function and/or purpose.
10.4.6 Inventory
An inventory of capital assets should be performed at least once every two years per the 2
CFR §200.313. The inventory shall be performed by the Finance DiF *^rChief Financial
Officer or his/her designee.
10.5 Inventory of Small and Attractive Items
Operating departments shall be responsible for conducting regular inventory of their small and
attractive items (i.e., cell phones, tablets, hand tools, power equipment, etc.) and submit a physical
inventory to the Finance Dir- *^rChief Financial Officer or his/her -their documented designee.
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10.6 Surplus Assets
The Mayor or ^iiedtheir documented designee may administratively surplus non public
„til�ccrity-office og ods, equipment, computer- equipment, small tool computer- soft , a and minor
equi-pmentother personal property with a value of less than $5,000. Titled vehicles, real property,
and any City property with a value of greater than $5,000 will be surplused by the City Council by
resolution. Surplus of real property shall comply with the City's Surplus Real property Policy. The
Finance Dir-ec*^rChief Financial Officer or his/hertheir documented designee shall be responsible
for the accounting of all surplus property transactions.
10.6.1 Surplus and Disposition of Public Utility Assets
As per C-h-.RCW 35.94.0404ZCW. titled vehicles -surplus of any real property, an-d-personal property,
or equipment that was originally acquired (in whole or part�for public utility purposes and which
aremay be surplused if no longer required for providing continued public utility service may be
used. If the estimated value of the property is less than $5,000, the property may be
administratively surplused by the Mayor or their documented designee. If the estimated value of
the property is between $5000 and $50,000, the property must be surplused by the City Council via
resolution. If the estimated value is greater than $50,000, a public hearing and subsequent City
Council resolution are required before the item is surplused. Surplus of real property originally
acquired for public utility purposes must also comply with the City's Surplus Real Property Policy
10.7 Risk Management
The City will periodically review its insurance options for each risk or hazard and medical options
to determine whether it is most cost effective to purchase commercial insurance, to fund a self-
insurance program or to participate in a "pooled" self-insurance program with other jurisdictions.
Such a determination should consider the long-term financial obligations of such a decision as well
as the regular fluctuations in commercial insurance markets. Where the City decides to self -insure a
risk, the City shall fully fund the expected costs of those risks through actuarial or other
professional estimates of those costs.
FINANCIAL MANAGEMENT POLICY ADOPTION
The City of Issaquah Financial Management Policy shall be adopted and amended by action of the
City Council. The Issaquah City Council shall review the policy periodically and any modifications
made thereto must be approved by the City Council.
Policy Approved on: September 5, 2017- Ordinance 2805
This policy replaces separate, previously adopted policies and procedures regarding revenue
management, procurement and contract management, fund reserves, purchasing or commercial
credit cards, asset management policies or any other policy regarding financial management and
financial procedures.
Policy Amended on: January 21, 2020 -Ordinance 2899
September 7, 2021- Ordinance 2950
March 21, 2022 - Ordinance 2969
April 4, 2022 - Ordinance 2971
Jan. 16, 2024 - Ordinance 3045
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RESOLUTION NO. 2018-07
A RESOLUTION of the City of Bainbridge Island,
Washington, establishing a consolidated set of
updated financial and budget policies, updating
policies adopted by the City during 2016.
WHEREAS, the City Council ("Council") is responsible for setting financial policy for
the City of Bainbridge Island ("City"); and
WHEREAS, state law, including Chapter 35A.33 RCW, provides guidance for budgets
in Code Cities; and
WHEREAS, Chapter 35A.34 RCW authorizes cities to establish biennial budgets under
which authorization, and the authorization of the Bainbridge Island Municipal Code ("BIMC"),
including Chapter 2.82 BIMC, the City prepares a biennial budget with a mid -biennial review;
and
WHEREAS, in the past, the Council has approved policies, and passed resolutions
related to financial policies, that continue to guide City financial practices including, but not
limited to: Resolution No. 1993-52, which establishes investment policies; Resolution No. 2008-
01, which establishes an Emergency Rainy Day Reserve Fund and a Contingency Reserve within
the General Fund; Resolution No. 2008-14, which establishes debt management policies;
Resolution No. 2010-35, which set targets for General Fund reserves; Resolution No. 2013-13,
which provides that funds from the City's utilities shall not be expended for general
governmental services; Resolution No. 2014-17, which sets a minimum fund balance policy for
the General Fund; Resolution No. 2016-20 adopting a Municipal Securities Disclosure Policy,
which establishes public disclosure rules for City -issued municipal securities; Resolution No.
2016-18, which establishes procedures for the surplus and sale of City real property; and
Resolution No. 2016-19, updating the consolidated Financial Policies, and
WHEREAS, the City Administration ("Administration") requested, as part of the 2019-
2020 biennial budget process, that the Council update the financial and budgetary policies that
were adopted by the City prior to 2018; and
WHEREAS, the Council last updated the financial and budgetary policies as Resolution
2016-19; and
WHEREAS, the Council and Administration wish to establish an ongoing consolidated
set of Financial and Budget Policies ("Financial Policies") to be administered by the
Administration and to guide Council action on an ongoing basis.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BAINBRIDGE ISLAND
DO RESOLVE AS FOLLOWS:
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Section 1. PURPOSE
The primary purpose of financial policies is to provide guidelines for the City Council and staff
to use in making financial decisions that ensure core services are maintained and the Council's
vision for the community is achieved.
The financial policies guide the City to be able to withstand local and regional economic
variations, to adjust to changes in service requirements, and to respond to other changes as they
affect the community.
It is the policy of the City to maintain an excellent credit rating and assure taxpayers that the City
of Bainbridge Island is maintained in sound financial condition.
SECTION 2. OPERATING BUDGET POLICIES
The biennial budget is the City's comprehensive two-year financial plan, which supports the
City's approved programs and services.
City programs and services support achievement of the following results, as identified and
approved by the City Council:
• Green, Well -Planned Community
• Healthy and Attractive Community
• Reliable Infrastructure and Connected Mobility
• Safe City
• Vibrant Economy
• Good Governance
Biennial budgets should provide for design, construction, maintenance and replacement of the
City's capital assets and equipment consistent with the Capital Facilities Plan including the
related cost for operating new assets.
The City will maintain all its assets such that it protects the City's capital investment, preserves
public safety, and minimizes future maintenance and replacement costs.
All general government current operating expenditures will be paid from current revenues and
cash carried over from prior years.
The City shall adopt a balanced budget. The City defines a balanced budget as one in which
current biennium budgeted revenues in addition to fund balances are equal to or greater than
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current biennium budgeted expenditures. In addition, the City's budget shall maintain recurring
expenditures for each fund at a level less than recurring revenues for that fund.
Reports on revenues and expenditures shall be prepared monthly and provided to the Council.
Mid -year and annual reports will also be prepared and provided. These reports will also be
posted to the City's website or reporting portal.
The City shall consider its financial capacity when making budget decisions. Staff shall deliver
to Council a ten-year Financial Capacity Analysis as part of the biennial budget process. For
each Financial Capacity Analysis, the financial assumptions shall be reasonable and shall take
into account an appropriately chosen set of inflation factors and an appropriate set of economic
projections. The Administration's chosen assumptions for revenues, expenditure inflation
factors and economic measures shall be disclosed to the Council.
SECTION 3. REVENUES
The City will strive to maintain a diverse and stable revenue stream to protect against short -run
volatility of any single revenue source.
Because revenues, especially those of the General Fund and other tax -supported funds, are
sensitive to economic changes, the City will use a conservative approach to revenue forecasting.
Departmental revenues of the tax -supported funds shall be considered unrestricted revenue of the
City — subject to any applicable legal restriction, and subject to any applicable provision of the
Financial Policies, that may apply to a particular revenue source.
Revenues from the Commercial Parking Tax shall be treated as revenues of the Street Fund.
Real Estate Excise Tax revenue shall be first applied to current capital debt service and then, to
the extent available, to other eligible expenses.
The City shall maintain a structure for all fees and charges where the beneficiary of the service
pays the cost of that service except to the extent that the Council has determined that provision of
the specific service in question provides a general public benefit.
On a periodic basis, Building and Development Services (B&DS) rates shall be reviewed, with a
goal of full cost recovery for the B&DS Fund.
The City will maintain water, sewer and storm water utility rates adequate to ensure that each of
these three utility funds is fully self-supporting. Additionally, for analysis and rate modeling
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purposes, the proposed rates shall take into account debt service coverage commitments, if
applicable. The capacity to support identified utility reserves will also be taken in to account.
SECTION 4. EXPENDITURES
The City budget will provide for a sustainable level of service to meet the City's identified
results.
The City will maintain expenditure categories according to state statute and administrative
regulation. Capital expenditures shall meet the requirements of generally accepted accounting
principles (GAAP).
The City shall use major one-time revenue to fund capital improvements, debt reductions, or
reserves. The use of one-time revenues to fund operating expenditures is strongly discouraged.
The Council shall review the Administration's recommended plan for the allocation of City costs
to various funds as part of the biennial budget process.
As a general rule, when an expenditure is incurred for which both restricted and unrestricted fund
balance is available, the City will consider the more restricted amounts to have been spent first.
On a periodic basis, the Administration shall compare the cash compensation and the value of
benefits for City employee positions to the compensation and benefit levels to a set of
comparable employers, to provide data for potential compensation and benefit policies which
may be adopted by the Council.
SECTION 5. CAPITAL
The Capital Facilities Goals and Policies that are stated in the City's Comprehensive Plan, as
amended from time to time, are hereby included in full in the Financial Policies.
The Capital Improvement Plan and the City operating budget will be reviewed at the same time
to ensure that capital and operating needs are balanced with each other and support overall City
goals.
The City shall develop a six -year plan for capital improvements and update it at least biennially.
The City will identify the estimated costs and proposed funding sources for each capital project
proposal before it is submitted to Council for approval. The City will use intergovernmental
assistance and outside resources whenever possible. In the event that a grant, or other type of
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intergovernmental assistance, is identified as a funding source for a project and the outside
funding is not secured, the City will reconsider the financial viability of that project at that time.
Each individual project included in the capital improvement plan (CIP) shall have a budget with
identified contributions by fund. Each fund amount shall be distinct and cannot be transferred
without amending the CIP. Reporting will be presented at the project and fund level.
When a capital project is complete and has been capitalized in accordance with Generally
Accepted Accounting Principles, any remaining project budget appropriation authority shall
lapse and all remaining funds shall return to their original source.
SECTION 6. RESERVES
Reserve funds enable the City to deal with unforeseen emergencies and changes in economic
conditions.
General Fund Reserves
Emergency Reserve: The City shall maintain an Emergency Reserve with a budgetary target
amount of $1.0 million. These funds shall be used only to pay for emergencies that cannot
reasonably be accommodated by current budget appropriations. These funds may be appropriated
only by a vote of not less than five (5) members of the City Council or the unanimous vote of a
legal quorum. It is the Council's policy that if funds are spent from the Emergency Reserve, it
should be replenished as resources become available.
General Fund Minimum Fund Balance. The City shall maintain a minimum fund balance of
25% of ongoing revenues in the General Fund. The General Fund minimum fund balance shall
mean the dollar amount of unencumbered fund balance, excluding any amounts held in reserves
or otherwise committed funds. This fund balance is intended to provide stability in the event of
unexpected changes to revenues or expenses.
Utility Fund Reserves
Capital Contingency Reserve. Each utility fund shall maintain a separate capital contingency
reserve. Each reserve shall have a targeted level of at least one percent (1%) of the utility
system's capital assets at net book value. The primary purpose of the reserve is to provide a
ready source of cash in case of an emergency, should a major piece of equipment or a portion of
the utility's infrastructure fail unexpectedly.
Operating Reserve — Water and Sewer Funds. These reserves shall have a targeted level as of
each year-end of at least sixty (60) days' operating expenses. The primary purpose of the reserve
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is to provide cash for operations in case of seasonal variations in revenue or expenses, or to
support operations in a year in which revenues are abnormally low.
Operating Reserve — Storm and Surface Water Management Fund. This reserve shall have a
targeted level as of June 30 and December 31 of at least 90 days' operating expenses. The
primary purpose of the year-end reserve is to provide cash for operations during the period
between the payment of the fees, which occurs in two large payments in April and October.
Restricted Debt Reserve. To the extent that the City issues a form of debt (e.g. Revenue Bonds)
that requires the City to maintain a restricted cash reserve during the term of the debt repayment
period, the utility shall maintain a restricted reserve for such purpose. This reserve is to
safeguard the purchasers of the utility's debt, and may be used to fund the final installment or
last year's debt service.
SECTION 7. ACCOUNTING, AUDITING AND FINANCIAL REPORTING
The City will establish and maintain a high standard of internal controls and accounting
practices. The City accounts and budgets for revenue and expenditures on a modified accrual
basis for general government and enterprise activities. Year-end financial statements for
enterprise activities shall use full accrual accounting.
The accounting system will maintain records on a basis consistent with accepted national
standards for local government accounting and the Washington State Auditor's Budgeting,
Accounting and Reporting System.
The annual financial statements shall conform to Generally Accepted Accounting Principles
(GAAP) and be in the form of a Comprehensive Annual Financial Report as recommended by
the Government Finance Officers Association.
A capital asset system will be maintained to identify all City assets and their location.
The City will ensure that City records are audited annually, resulting in a financial opinion. The
results of the audit will be available to the public through the City's website.
SECTION 8. DEBT
The City's Debt Policy, as it may be amended from time to time, is hereby included in the
Budget Policies,
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SECTION 9. INVESTMENT
The City's Investment Policy, as it may be amended from time to time, is hereby included in the
Financial Policies.
SECTION 10. BANKING AND MONEY MANAGEMENT
Safety
The City shall engage in relationships, and conduct its business, with one or more banks,
repositories of public pooled funds, and financial institutions in a manner that avoids
concentrating City balances in a way that may expose the City to material losses in the event of
an adverse development affecting any bank or financial institution in which City assets are held.
Money Management
The City Administration shall seek to form relationships with banking and financial institutions
that offer the City efficient and effective tools and technologies to manage and track transactions
and balances.
SECTION It. MUNICIPAL SECURITIES DISCLOSURE
The City's Municipal Securities Disclosure Policy, as it may be amended from time to time, is
hereby included in the Financial Policies.
SECTION 12. SURPLUS REAL PROPERTY
The City's Surplus Real Property Policy, as it may be amended from time to time, is hereby
included in the Financial Policies.
SECTION 13. PROCUREMENT POLICY
The City's Procurement Policy, as it may be amended from time to time, is hereby included in
the Financial Policies.
PASSED by the City Council this 27"' day of March, 2018.
APPROVED by the Mayor this 27t" day of March, 2018.
By: �; L -
Kol Medina, Mayor
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ATTEST/AUTHENTICATE:
By:
LC'ruistine Brown, City Clerk
FILED WITH THE CITY CLERK:
PASSED BY THE CITY COUNCIL
RESOLUTION NO.:
March 2, 2018
March 27, 2018
2018-07
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FISCAL POLICY
CITY OF REDMOND, WASHINGTON
1. General Financial Goals
a. To provide a financial base sufficient to sustain municipal services to maintain the social
well-being and physical conditions of the City.
b. To be able to withstand local and regional economic trauma, to adjust to changes in the
service requirements, and to respond to other changes as they affect the community.
c. To maintain an excellent credit rating in the financial community and assure taxpayers
that Redmond city government is maintained in sound fiscal condition.
d. To consider and provide for the needs of future generations in the Redmond community
2. Operating Budget Policies
a. The base operating budget is the City's comprehensive two-year financial plan which
provides for the desired level of city services as defined by the City's priorities. A
budget will be developed every two years using a "budgeting by priorities" process.
b. The goals of the budgeting by priorities process are:
• Align the budget with citizen priorities
• Measure progress towards priorities
• Get the best value for each tax dollar
• Foster continuous learning in the City
• Build regional cooperation
c. "One-time" expenses require specific authority to be carried forward into subsequent
budgets.
d. Revenues and expenditures for the General Fund and all major operating funds shall be
projected for the current biennium and the ensuing four years.
e. Biennial operating budgets should provide for design, construction, maintenance and
replacement of the City's capital, plant, and equipment consistent with the Capital
Facilities Plan including the related cost for operating such new facilities.
f. The City will maintain all its assets at a level such that it protects the City's capital
investment and minimizes future maintenance and replacement costs.
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g. The City will maintain an equipment replacement and maintenance needs analysis for the
life cycle of the equipment and will update this projection every two years consistent with
budget development.
h. All general government current operating expenditures will be paid from current
revenues.
Reports on revenues and expenditures will be prepared on a timely basis monthly and
reviewed quarterly by the City Council.
The city will avoid budgetary and accounting procedures which balance the current
budget at the expense of future budgets.
The City of Redmond defines a balanced budget as current biennium revenues (including
fund balances) are equal to or greater than current biennium budgeted expenditures.
The City further defines a structurally balanced budget as current on -going revenues
(without including fund balances) as equal to or greater than current on -going expenses
The City will not use one-time revenues for operations.
i. All supplemental appropriations for programs (appropriations requested after the original
budget is adopted) will be considered as a result of changes since the adoption of the
biennial budget including the availability of new revenues (such as unanticipated grants).
All supplemental appropriations will conform to the "budgeting by priorities" process.
j. Budget Calendar
• In order to facilitate and implement the budget process, the Mayor will propose a
biennial budget calendar at the first regular Council meeting in April in every even
year.
The calendar will be comprehensive in nature and generally provide for a process that
resembles the Best Practices for municipal budgets as published by the Government
Finance Officers Association.
3. Revenue Policies
a. The City will strive to maintain as diversified and stable a revenue system as permitted
by state law to shelter it from short -run fluctuations in any one revenue source. The
revenue mix should combine elastic and inelastic revenue sources to minimize the effect
of an economic downturn. To pursue this policy goal the City Council will consider
revenue changes in the context of its review of the City's Long Range Financial Strategy.
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b. Because revenues, especially those of the General Fund, are sensitive to both local and
regional economic activities, revenue estimates provided to the City Council shall be
conservative.
The City will estimate its biennial revenues by an objective, analytical process using best
practices as defined by the Government Finance Officers Association. Economic
assumptions will be based on reliable and relevant sources such as the Washington State
Office of Forecast Council.
d. The City will project revenues for the next six years and will update this projection
biennially. This projection will be consistent with policy 2d above and the overall "price
of government" as described in the Long Range Financial Strategy.
The Finance Department will biennially review and make available to the Finance,
Administration and Communications Committee an analysis of each potential major
revenue source before going to the full Council for review.
The City will refrain from making budgetary decisions (specifically allocating resources
to be expended) outside of a budget process as described by this policy (inclusive of the
biennial budget as well as a formal budget amendment).
The City will establish all user charges at a level related to the cost of providing the
service and within policy parameters established by the City Council.
f. In each odd numbered year, the City will review user fees to adjust for the effects of
inflation and other factors as appropriate. The City will set fees for user activities, such
as recreational services, at a level to support the direct and indirect costs of the activity in
accordance with cost recovery policies adopted by Council.
g. The City will set fees and user charges for each enterprise fund at a level that fully
supports the total direct and indirect cost of the activity including the cost of annual
depreciation of capital assets. For rate modeling purposes the City will utilize three
financial tests: Net Income Test, Cash Flow Test, and Coverage Test, to evaluate revenue
sufficiency. The results of these tests will be used in the rate setting process to ensure
that the enterprise funds generate the appropriate level of revenue to satisfy all operating
costs, cash obligations, and debt coverage requirement of 1.2 times annual debt service.
4. Expenditure Policies
a. The City budget will provide for a sustainable level of service as defined in the context of
the Budgeting by Priorities process.
b. The City's operating budget will not use one-time revenues to support ongoing
expenditures.
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c. The City will maintain expenditure categories according to state statute and
administrative regulation. Capital expenditures shall meet the requirements of generally
accepted accounting principles (GAAP).
d. The City will forecast its General Fund expenditures biennially for the next six years.
The drivers and assumptions used in the forecast will be described.
e. A cost allocation plan will be maintained and updated as a part of each City budget. The
cost allocation plan will be the basis for distribution of general government costs to other
funds or capital projects (also known as indirect costs).
5. Capital Investment Budget Policies
a. The City will make capital improvements in accordance with an adopted capital
investment program. Capital funds may be used on:
1. Non -recurring capital expenditures (such as capital projects).
a. Qualifying non -recurring capital projects should be at least $50,000 (or part of
a system with a value of more than $50,000); and
b. towards an asset with a useful life of at least five years; or
c. directly for related costs (such as studies, plans, monitoring of capital asset
performance, etc.); or
d. planning efforts that result in specific capital improvements identified in the
City's Capital Investment Strategy and approved by the Capital Investment
Program Governance Committee.
b. The capital investment program and the base operating budget will be reviewed at the
same time to ensure that the City's capital and operating needs are balanced with each
other and that the capital investment program is aligned with the City's other long-range
plans.
c. The City will develop a six -year plan for capital improvements including operations and
maintenance costs and update it every biennium. Capital expenditures will be forecasted
taking into account changes in population, changes in real estate development, or changes
in relevant economic condition of the City and the region.
d. The City will identify the estimated costs and potential funding sources for each capital
project proposal before it is submitted to Council for approval. The City will use
intergovernmental assistance and other outside resources whenever possible.
e. All staff (FTEs) related to capital project implementation will charge directly to capital
projects if the projects are a part of the Capital Investment Strategy and approved by the
City's Capital Investment Program Governance Committee.
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f. The City will determine the least costly financing method for all new projects.
g. The City will transfer, annually, at least five percent (5%) of General Fund revenues
(excluding development and significant one-time revenues), available one-time money
and the pavement management contribution to the capital investment program as part of
the City's biennial budget.
h. The City will develop and maintain a "Capital Investment Strategy" (also known as the
"Vision Blueprint") that facilitates the planning for meeting the facility and other capital
needs of the community consistent with the City's vision, comprehensive plan and
functional area plans (in that order).
i. Discretionary capital investment revenues collected from the five percent (5%) or more
General Fund transfer and real estate excise tax will be utilized for capital improvements
that support the vision of the city consistent with the City's Capital Investment Strategy.
j. Real Estate Excise Tax will be used for one-time capital project funding, not for general
maintenance of the City's infrastructure as allowed by law.
k. A contribution ($1.1 million) from sales tax on construction, adjusted annually for
inflation, will be transferred into the capital investment program.
1. Applications to receive grant funding will only be submitted if the project receiving the
funding is a part of the City's Capital Investment Strategy and/or approve by the Capital
Investment Program Governance Committee.
m. The City will utilize the Business Fee and Tax Advisory Committee to advise the City on
expenditures from the transportation surcharge portion of the Business Tax as outlined in
City Council Resolution Number 1375.
6. Short -Term Debt Policies
a. Short-term debt is defined as a period of three years or less.
b. The City may use short-term debt to cover temporary cash flow shortages, which may be
caused by a delay in receipting tax revenues or issuing long-term debt. The City will not
use short-term debt for current operations.
The City may issue interfund loans rather than outside debt instruments to meet short-
term cash flow needs. Interfund loans will be permitted only if an analysis of the affected
fund indicates excess funds are available and the use of these funds will not impact the
fund's current operations. All interfund short-term borrowing will be subject to Council
approval and will bear interest based upon prevailing rates.
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7. Long -Term Debt Policies
a. Long Term debt is that debt which exceeds three years.
b. The City will utilize long-term borrowing for capital improvements that cannot
reasonably be financed on a pay-as-you-go basis from anticipated cash flows.
Acceptable uses of bond proceeds are items which can be capitalized and depreciated.
Refunding bond issues designed to restructure currently outstanding debt is also an
acceptable use of bond proceeds provided that the net present value (NPV) of savings is
at least 4%.
d. The City will determine whether self-supporting bonds (such as special assessment
improvement district bonds) are in the City's best interest when planning to incur debt to
finance capital improvements.
e. The City will not use long-term debt for current operations.
f. The City will maintain proactive communications with the investment community about
its financial condition. The City will follow a policy of full disclosure on financial
reports and bond prospectus including proactive compliance with disclosure to the
secondary market.
g. General Obligation Bond Policy
1. Every project proposed for financing through general obligation debt shall be
accompanied by a full analysis of the future operating and maintenance costs
associated with the project.
2. Bonds cannot be issued for a longer maturity schedule than a conservative estimate of
the useful life of the asset to be financed.
3. Before general obligation bond propositions are placed before the voters, the capital
project under consideration should have been included in the Capital Improvement
Program. The source of funds should describe the intended use of bond financing.
h. Limited Tax General Obligation Bond Policies
As a precondition to the issuance of limited tax general obligation bonds, alternative
methods of financing should also be examined.
2. Limited tax general obligation bonds should only be issued under certain conditions:
• A project requires monies not available from alternative sources;
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Matching fund monies are available which may be lost if not applied for in a
timely manner; or
• Catastrophic conditions.
i. Financing of Lease Purchases
Under Washington State law, the public may vote to approve bond issues for general
government purposes in an amount not to exceed 2.5% of assessed valuation. Within
the 2.5% limit, the Redmond City Council may approve bond issues and/or lease
purchases up to 1.5% of the city's total assessed value. In addition, state law provides
for an additional 2.5% of assessed valuation for parks and open space purposes with a
vote of the public.
2. Lease purchase financing may be used when the cost of borrowing or other factors
make it in the City's best interest.
j. Long Term Interf ind Loans
1. The City may issue interfund loans rather than outside debt instruments as a means of
financing capital improvements. Interfund loans will be permitted only if an analysis of
the affected fund indicates excess funds are available and the use of these funds will not
impact the fund's anticipated operations. All interfund borrowing will be subject to
prior approval by the City Council and will bear interest based upon prevailing rates.
2. The decision to use interfund loans rather than outside debt will be based on which is
deemed to be the most cost effective approach to meet city capital needs. Such
assessment will be reviewed by the City's Financial Advisor who shall provide an
objective analysis and recommendation to the City Council.
8. Reserve Fund Policies
a. The City will maintain a General Operating Reserve of at least 8.5% of the total General
Fund budgeted revenue, excluding the beginning fund balance, development review
revenue, and any significant one-time revenue.
This reserve shall be created and maintained to:
1. Provide sufficient cash flow to meet daily financial needs.
2. Sustain City services in the event of a catastrophic event such as a natural/manmade
disaster (e.g. earthquake, windstorm, flood, terrorist attack) or a major downturn in the
economy.
b. Biennium surpluses in the General Fund will be used to fund one-time operations and
capital expenditures, dedicated to the Capital Improvement Program or placed in an
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economic contingency account if there are surplus balances remaining after all current
expenditure obligations and reserve requirements are met.
c. A surplus is defined as the difference between the actual beginning fund balance and the
budgeted beginning fund balance. It consists of under -expenditures and excess revenues
over and above the amounts included in the biennial budget.
d. The City will also maintain an Economic Contingency to serve as a hedge against
economic fluctuations, fund future one-time operational and capital needs or support City
services on a one-time basis pending the development of a longer term financial solution.
The City shall maintain 4% of total General Fund budgeted revenue, excluding the
beginning fund balance, development review revenue, and any significant one-time
revenue as a target for the Economic Contingency.
This contingency shall serve as a hedge against underperforming revenue estimates with
council's approval prior to its use. The City shall endeavor to support ongoing operations
with ongoing revenues, but may use reserves on a one-time basis to support City services
pending the development of a longer term financial solution. However, in no event shall
reserves be used longer than one biennium to support City operations. If reserves are
used, the City will begin to replenish these reserves at the end of the biennium if a surplus
exists, but no later than the biennium following their use.
e. The City will maintain operating reserves in the following funds: 12% (55 days) for the
Water/Wastewater Operations and Maintenance Funds, not including Metro Wastewater
Treatment expenses, 5% for the Stormwater Management Fund and 12% for the Solid
Waste/Recycling Fund. This operating reserve shall be created and maintained to
provide sufficient cash flow to meet daily financial needs and will be based upon total
operating expenses. The reserve requirement for the Water/Wastewater Operations and
Maintenance Funds can be met by the fund balance of the rate stabilization fund. For
budgeting purposes, operating expenses will be calculated upon the funds' total expense
budgets excluding ending fund balances, capital purchases, and the current year's portion
of principal paid on outstanding debt.
f. In order to maintain the significant investments in utility capital assets there shall be a
transfer from the utility operations funds to the utility capital project or reserve funds to
be expended on future utility capital projects. The transfer will be calculated on the
current year's depreciation expense, less the annual principal payments on outstanding
debt.
g. The City will establish a revenue stabilization fund for the Water and Wastewater
utilities. The required fund balance shall be set at 15% of the total of water and
wastewater revenues collected through monthly rates excluding the portion of monthly
revenues for King County wastewater treatment. The balance of this fund can be utilized
to meet the reserve requirement for the Water/Wastewater Operations and Maintenance
Funds. Monies may be withdrawn from the revenue stabilization funds to supplement
operating revenues in years of revenue shortfalls caused by reduced sales due to weather
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or restrictions on water use. The revenue stabilization funds will be replenished within
four years of a withdrawal.
h. Bond reserves shall be created and maintained by the Water/Wastewater and Stormwater
Utilities in accordance with the provisions set forth in the bond covenants. These shall be
in addition to the reserves described above.
The City shall additionally maintain the following Equipment Replacement Reserve
Funds:
1. Fleet Maintenance Reserve;
2. Fire Equipment Reserve; and
3. Capital Equipment Reserve for general asset replacement.
The Equipment Reserve Funds will be maintained at a level sufficient to meet scheduled
equipment replacement so as to sustain an acceptable level of municipal services and
prevent a physical deterioration of City assets. An assessment of the sufficiency of this
reserve will be made during each budget cycle.
j. The City shall also maintain Reserve Funds as follows:
1. All statutorily required reserve funds to guarantee debt service; and
2. A vacation accrual reserve.
A reserve to stabilize contributions to state retirement systems due to temporary
fluctuations in state rates, as necessary.
No reserve shall be established for sick leave. One-fourth of accrued sick leave is payable
only upon qualifying retirement and is not considered material.
9. Investment Policies
The Finance & Information Services Director will biennially submit any recommended
amendments to the City's investment policy to the City Council for review.
10. Special Revenue Policies
a. The City will establish and maintain Special Revenue Funds in accordance with
Generally Accepted Accounting Principles which will be used to account for the proceeds
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of specific revenue sources to finance specified activities which are required by statute,
ordinance, resolution, or executive order.
1. The City will comply with GASB Statement 54 which defines the appropriate use of
Special Revenue Funds for reporting purposes. The City Council may determine to
separate the General Fund into supporting "sub -funds" for budgeting and
management purposes. These "sub -funds" will be combined for financial reporting
purposes to comply with GASB Statement 54.
b. Special Revenue Funds having biennial operating budgets will be reviewed by the City
during the budget process.
11. Accounting, Auditing, and Financial Reporting Policies
a. The City will establish and maintain a high standard of internal controls and accounting
practices. The City budgets and accounts for revenues and expenditures on a modified
accrual basis in its day to day operations.
b. The accounting system will maintain records on a basis consistent with accepted
standards for local government accounting and the State of Washington Budgeting,
Accounting, and Reporting Systems.
Regular monthly and annual financial reports will present a summary of financial activity
by major types of funds. Such reports will be available via the City's website
(www.redmond. gov).
d. The annual financial report shall conform to Generally Accepted Accounting Principles
and be in the form of a Comprehensive Annual Financial Report as described by the
GFOA. This report will contain all required information necessary to comply with
secondary market disclosures for outstanding bonds (see policy 7f above).
e. A fixed asset system will be maintained to identify all City assets, their location,
condition, and disposition.
f. The City will ensure that City records are audited annually and which will result in the
issuance of a financial opinion. The results of such audit are to be available to the public
via the city's web site.
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City of Edmonds
Fund Balance Reserve Policy
July 2019
Amended March 2024
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Table of Contents
DRAFT......................................................................................................... Error! Bookmark not defined.
ARTICLE I INTRODUCTION......................................................................................................................5
ARTICLE Il CRITERIA FOR ESTABLISHING APPROPRIATE FUND BALANCE RESERVE
LEVELS..........................................................................................................................................................
6
Section1. Volatility....................................................................................................................................
6
Section2. Operating Fund Size..................................................................................................................6
Section 3. Purpose of Fund Balance Reserves............................................................................................6
Section4. Bond Ratings..............................................................................................................................6
ARTICLE III COMMITTED GENERAL FUND BALANCE RESERVES POLICY .................................
6
Section 1. Establishment and Purpose of Operating General Fund Operating Reserve .............................
6
ARTICLE IV CONTINGENT RESERVE FUND BALANCE POLICY......................................................7
ARTICLE V ANNUAL FUND BALANCE TYPES - STATUS REPORT ..................................................
9
ARTICLE VI ANNUALF T�'�R RESERVE RATE REVIEW.............................................................
9
ARTICLE VII DEVIATIONS FROM POLICY............................................................................................9
ARTICLE VIII DEFINITIONS......................................................................................................................9
ARTICLE IX EFFECTIVE DATE...............................................................................................................12
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ARTICLE I INTRODUCTION
The overall objective of Fund Balance/Reserve Management Policy is to define that portion of fund balance
that is unavailable to support the current budget. In many ways, fund balance represents working capital,
which can either be used as a liquidity reserve or for spending in future years. A comprehensive fund
balance/reserve management policy provides guidelines for the major funds of the City of Edmonds and
provides a structured approach in setting reserve levels in specifically designated funds. It is financially
prudent for Edmonds to retain a modest level of unrestricted/uncommitted working capital in addition to
explicitly defined reserve levels identified in this policy to address unforeseen expenditure needs each
budget cycle. Please see Article VIII for financial definitions referenced in this Policy.
This Fund Balance/Reserve Management Policy is intended to guide prudent use of resources to provide for
the fneeh Meede'much-needed services to taxpayers and to maintain sound management policies. It is
essential that governments maintain adequate levels of fund balance reserves to mitigate risks and provide a
back-up for revenue shortfalls or unanticipated expenditures.
Goals
The goals of this Fund Reserve Policy is to provide clear guidance for the appropriate level of Fund Balance
Reserve for our ci . ; set reporting and monitoring_ requirements, define the appropriate triggering warning
mechanism, set Council approval before any Restricted Reserve can be used, define replenishment timeline
and requirements, obtain consensus between Council and Administration that our city's finances should be
managed responsibly, and that uncommitted fund balances should not be spent down to the ceilingof f the
General Fund reserve level, and earn a consistent AAA bond rating from the bond rating a eg ncies.
Policy
It is the policy of the City of Edmonds to provide for the continuity of City government by planning ahead
for economic uncertainties and unforeseen or unplanned major expenditures. In order to achieve reserve
gealsgoals-, the City must exercise prudent debt and liability management policies and follow sound fiscal
management policies that prioritize the City's core services. This policy establishes reserve fund balance
accounts that will provide funding for emergencies, economic uncertainties and for unanticipated operating
expenses or revenue shortfalls. In addition, this policy incorporates provisions of Governmental Accounting
Standards Board Statement (GASB) no. 54, Fund Balance Reporting and Governmental Fund Type
Definitions.
Objectives
The purpose of this Fund Balance/Reserve Management Policy is to assist the City in the pursuit of the
following equally important objectives:
I . Build adequate reserves which will provide the City the resources necessary for financial
stabilization, particularly during times of unforeseen emergencies and economic downturns;
2. Establish sound fiscal reserve policies that will serve as the foundation for ensuring that
strong fiscal management policies guide future City decisions;
3. Provide prudent guidelines regarding the establishment, use and replenishment of City
committed or assigned fund balances _/reserves;
4. Establish a process for periodic reporting and review of the City='s various fund balances
(reserves); and
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5. Enhance the City='s credit ratings received from rating institutions through the
establishment of clearly delineated Fund/Reserve policies that promote strong fiscal
management;
6. Establish reserve policies that are in full compliance with GASB 54 financial reporting
requirements.
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ARTICLE II CRITERIA FOR ESTABLISHING APPROPRIATE FUND BALANCE RESERVE
LEVELS
There are key elements that must be reviewed and analyzed to determine the appropriate size of a given fund
balance reserve. Failure to follow the guidelines established in this policy can result in developing
unattainable fund reserve goals or unsustainable fund balance reserve levels. The following criteria shall be
used in determining the appropriate fund balance reserve levels:
Section 1. Volatility
The predictability and/or the volatility of its revenues or its expenditures (i.e., higher levels of fund balance
reserves may be needed if significant revenue sources are subject to unpredictable fluctuations or if operating
expenditures are highly volatile).
Section 2.Operating Fund Size
The overall size of the fund"s budgetary events should be taken into consideration in setting the required
fund balance reserve level and type for a particular fund_
Section 3. Purpose of Fund Balance Reserves
Another consideration for determining the size of each reserve will be the purpose of the reserve: Is there
significant or perceived exposure to one-time outlays (e.g., disasters, immediate capital needs, state budget
cuts, or are there potential drains upon fund resources from other funds, or conversely, are there potential
reductions in funding transfers from other funds)?
Section 4. Bond Ratings
The potential impact on the entity's bond ratings and the corresponding increased cost of borrowed funds
ARTICLE III COMMITTED GENERAL FUND BALANCE RESERVES POLICY
This Policy shall establish a committed fund balance reserve within the Gener-a Ftm , define funding levels
and call the reserve the General Fund Operating Reserve. The purpose of the reserve is for meeting
economic uncertainties, and unanticipated expenses or revenue shortfalls. This Policy requires the City to
establish and maintain a General Fund Operating Reserve, within the Genera rued, in an amount equal to
or greater than 16% of the General Fund's Adopted Annual Operating Expenditure Budget. If it is determined
that the reserve balances are not adequate, the Ma or Fin nee Direete shall propose an amendment to these
policies.
The General Fund Operating Reserve Fund shall be a separate fund outside of the General Fund. This is to
achieve its visibility, much like the Contingency Reserve Fund. Fund number 011 shall be the designated
fund number for The General Fund Operating Reserve.
A detailed accounting of this reserve account will be maintained by the Finance Department to show
deposits, withdrawals (when authorized pursuant to policies contained herein) and interest earned. All
accounting for these accounts shall be recorded in the City's ERP system (Will. is the to,,,,, ,,,,,,,,,,,atop r
*het lA we have sinee implemefAed a new ageounting s to A detailed report, prepared by the Finance
Department, shall be presented annually to the Council. In addition, a monthlyport by the Finance
Department shall be presented to Council showing a projection of end of year general fund balance. If in
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any two consecutive months, this report indicates the City's end of year fund balance will be less
than 2-521 % of budgeted_ operating expenditures, the Mayor shall implement measures to ensure the end of
year general fund balance does not drop below N16% of adopted budgeted operating expenditures unless
Council explicitlyqpproves use of general fund committed reserves.
Note: A 5% of the budgeted general fund operating expenditures is built in as the warning mechanism.
During the time when the restricted reserve is already below the required 16%, the 5% warning mechanism
is waived. The Mayor and the administration shall focus on rebuilding the reserve back to its required 16%
level.
Section 1. Establishment and PurUose of Operating General Fund Operating Reserve
A separate balance sheet account shall be setup by the Finance Director for the General Fund Operating
Reserve, to be used in instances of fiscal emergencies that include: economic uncertainties, unforeseen
emergencies and unanticipated operating expenses or revenue shortfalls.
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The Mayor has the power to declare a fiscal emergency based upon one of the following:
1) A natural catastrophe_;
2) An immediate threat to health and public safety; or
3 _A significant decline in General Fund revenues. Or
3) 4) Unexpected expenditures that outpaced General Fund revenue.
The fiscal emergency declared by the Mayor must be approved by a simple majority of the City Council._
if the ,Y, ,, ,ble t aetor- refuses t aet t deel r-e fise ,4 emer-eeney when atw one fth, e throe
Limitations of Fund Use
Any use of the committed General Fund Operating Reserves shall be used only in cases of fiscal emergency
and shall not be used to augment ongoing budgetary/operating spending increases. The committed General
Fund Operating Reserve may also be used for one-time non -reoccurring expenditures and/or capital projects
(operations and maintenance shall not be included), all as submitted by the Mayor and approved by the
Council.
The amount of funds to be withdrawn from this committed fund balance reserve shall be determined by the
Mayor subject to City Council approval. In his/her presentation to the Council, the Mayor or his/her designee
shall include a detailed list of how the funds will be applied. A simple majority vote of the Council shall be
required to approve the amount and use of funds.
Transition Pa�
Getineil adoption of this pokey will trigger- m otmt not less than o of the General Ftmd's
tinr-estr4eted flind i..,i, nee t the General Fund Operating Reserve.
General Fund Operating Reserve Replenishment
If any use of the committed General Fund Operating Reserve has occurred, the Finance Director must present
to Mayor and City Council an annual Replenishment P1anRel e during the month of November as well as
a monthly status report of the level of replenishment. The Replenishment Report must be presented each
month and year, until the Reserves are fully replenished. The Replenishment Report must include the
following information:
1) Amount of Reserves used--
2) Whether it is anticipated additional Reserves will be needed in the following budget cycle, or
3) If no additional Reserves are needed, then the Replenishment Report must include a plan for
replenishing the Reserve to policy mandated levels.
The committed General Fund Reserve shall be restored pursuant to the guidelines delineated below:
1) If a reserve is drawn down by 0-10% of reserve fund balance, then a solution to replenish to at
least the minimum shall be structured over a 1 to 3 year period.
2) If a reserve is drawn down by 11-25% of reserve fund balance, then the budgetary plan to restore
the reserve shall be structured over a 3 to 5 year period.
3) If the reserve is drawn down by 26-50% of reserve fund balance, then a budgetary plan shall be
implemented to return the reserve level to iey, ee '7G% and 100% of the minimum balance over a
5 to 7 year period.
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ARTICLE IV CONTINGENT RESERVE FUND BALANCE POLICY
This Policy shall establish a fund and define funding levels for a committed Fund Balance Reserve to
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be called the Contingent Reserve Fund. The primary purpose of the reserve is for meeting
emergencies of the City and, secondarily, if the General Fund Operating Reserve have been
exhausted, the Contingent Reserve Fund can be use in times of economic uncertainties, and for
unanticipated expenses or revenue shortfalls. The target balance of the Reserve shall I) not exceed the
limitations set forth by RCW 35A.33.145, which sets the statutory maximum at $0.375 per $1,000 of
assessed valuation and 2) when eembined with the General mound O,,,., atin,. Reserve, the two fun
0 of the General Fund's Adopted Annual Q2ff2jjL+g Expenditufe
Budget. in other- words, if the Genepal Fund OpeFating Reserve balanee e"als 0 of opef-ating
budget, Thor the Contingent Reserve Fund balance eannet exeova shall be 4% of the General Fund
expenditures operating budget. The actual dollar amount shall be determined based on the annual
adopted General Fund expenditures. It further requires a simple majority vote of Council with a
statement declaring the reason for their use.
A detailed accounting of the Fund shall be maintained by the Finance Department to show deposits,
withdrawals (when authorized pursuant to policies contained herein) and be presented semi-annually_
in February and August to the Council.
The Mayor has the power to declare a fiscal emergency based upon one of the following:
1) A natural catastrophe;
2) An immediate threat to health and public safety; or
2)_A significant economic decline in General Fund revenues.
3-)4) Unexpected expenditures that outpaced General Fund revenue.
The fiscal emergency declared by the Mayor must be approved by a simple majority of the City Council._
Note: if the mavor is unable to act or refuses to act to declare a fiscal emerLyencv when anv one of these dffee
conditions are present, City Council may declare a fiscal emergency y a simple majori . vote.
Limitations of Fund Use
Any use of the committed Contingent Reserves shall be used in cases of fiscal emergency, shall not be used
to augment ongoing budgetary/operating spending increases and should be used only after the General Fund
Operating Reserves have been exhausted or when City Council approves specific used of the committed
Contingent Reserve for one-time non -reoccurring expenditures and/or capital projects (operations and
maintenance shall not be included).
The amount of funds to be withdrawn from this committed fund balance reserve shall be determined by the
Mayor. In his/her presentation to the Council, the Mayor or his/her designee shall include a detailed list of
how the funds will be applied. A simple majority vote of the Council shall be required to approve the amount
and use of funds.
Contingent Reserve Replenishment
If any use of the committed Contingent Reserve has occurred, the Finance Director must present to Mayor
and City Council an annual Replenishment Plano pe during the month of November as well as a monthly
status report of the level of replenishment.. The Replenishment Report must be presented each month and
year, until the Reserves are fully replenished. The Replenishment Report must include the following
information:
1) Amount of Reserves used
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2) Whether it is anticipated additional Reserves will be needed in the following budget cycle, or
3) If no additional Reserves are needed, then the Replenishment Report must include a plan for
replenishing the Reserve to policy mandated levels.
The committed Contingent Reserve shall be restored pursuant to the guidelines delineated below:
1) If a reserve is drawn down by 0-10% of reserve fund balance, then a solution to replenish to at
least the minimum shall be structured over a 1 to 3 year period.
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2) If a reserve is drawn down by 11-25% of reserve fund balance, then the budgetary plan to restore
the reserve shall be structured over a 3 to 5 year period.
3) If the reserve is drawn down by 26-50% of reserve fund balance, then a budgetary plan shall be
implemented to return the reserve level to between 7G0100% of the minimum balance over a
5 to 7 year period.
ARTICLE V ANNUAL FUND BALANCE TYPES -STATUS REPORT
Once a year, in August, the Mayor shall present to the Council Finance Committee a
comprehensive report on the City's fund balance reserve types as of June 30th. The report shall include an
updated fund balance reserve level for each fund balance type. This report shall include the following funds:
1. General Fund Operating Reserve balance;
2. Contingency Reserve Fund balance.
ARTICLE VI FIVE YEARANNUAL RESERVE RATE REVIEW
Every five year- Once a year, during the annual budget hearings, the Mayor, based upon a comprehensive
financial and economic review of all City fund balance types and in consultation with the City Finance
Director, and Department Directors as necessary, shall make recommendations to the City Council for either
maintaining existing fund balance reserve polices or revising fund balance reserve policies including
percentage ranges established by category herein and replenishment requirements by categories established
herein.
ARTICLE VII DEVIATIONS FROM POLICY
No deviations from the fund balance reserve polices set forth in this Policy will be allowed except as
approved by a simple majority of vote by the Council. This includes any increase or decrease in the base
fund balance reserve levels established by this policy and expenditures from fund balance reserve accounts
for anything other than the intended budgeted use of said fund balance.
ARTICLE VIII DEFINITIONS
Budget - A plan of financial operation containing an estimate of proposed expenditures for a given period
(usually a fiscal year) and a proposed forecast of revenues (receipts) to cover them. A budget is also a plan
that outlines an organization's financial and operational goals and strategies in monetary terms.
Capital Expenditures are expenditures incurred when monies are spent either to buy fixed assets or to add
to the value of an existing fixed asset with a useful life that extends beyond the fiscal year. In accounting,
a capital expenditure is added to an asset account ("capitalized"), thus increasing the asset's basis (the cost
or value of an asset). The general rule (even for municipalities) is that if the property acquired has a useful
life longer than the fiscal year, the cost must be capitalized. The capital expenditure costs are then amortized
or depreciated over the life of the asset in question.
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Comprehensive Annual Financial Report (CAFR)-A CAFR is a set of financial statements for a state,
municipality or other governmental entity that comply with the accounting requirements established by
the Governmental Accounting Standards Board (GASB). It must be audited by an independent auditor
using generally accepted government auditing standards.
The CAFR consists of three sections: Introductory, Financial and Statistical.
The Introductory section orients and guides the reader through the report. The Financial section presents
the entity's basic financial statements as well as notes to the statements and the independent auditors'
report. The Statistical section provides additional financial and statistical data, including data about
financial trends that may better inform the reader about the government's activities.
Council - Means the legislative body (the city council) that governs the City of Edmonds.
Expenditure - The actual payment of cash or cash equivalent for goods delivered or services rendered,
or a charge against available funds in settlement of an obligation as evidenced by an invoice, voucher or
other such document during the fiscal year. For governmental reporting purposes, expenditures include
expenses or a provision for debt retirement not reported as a liability of the fund from which retired.
Fiscal Year - A 12 month period to
which the annual or bienneial operating budget applies and the end of which a governmental unit
determines its financial position and the results of its operations. The City has specified January 1 through
December 31 as its fiscal year. Regardless of whether annual or biennial budget is used, the Fund Balance
Reserve and Contingency Fund Reserve are reviewed on an annual basis.
Fund - A fund is a self -balancing set of accounts recording cash and other financial resources, together
with all related liabilities and "residual" equity or balances, and changes therein, which are segregated for
the purpose of carrying on specific activities or attaining certain planned objectives in accordance with
special regulations, restrictions or limitations.
Fund Balances - The overall objective of fund balance reporting is to isolate that portion of a fund balance
that is unavailable to support the following period's budget (see GASB 54 definition below). In general,
an unassigned fund balance shall be defined as those amounts that are not restricted, committed, or
assigned, of a particular fund at the end of the fiscal year.
GASB 54 - Fund Balance Reporting and Governmental Fund Type Definitions - The City of
Edmonds's CAFR Financial Statements are required to comply with GASB 54 beginning with its Fiscal
Year End 2011 CAFR going forward. GASB 54 changes and identifies fund balance classifications that
can be more consistently applied by clarifying existing governmental fund type definitions.
Fund balance is basically the difference between the assets and liabilities reported in a fund. GASB
statement No. 54 provides the following five categories for classifying fund balance and related
definitions to be used for describing the components of fund balance:
1. Nonsgendable Fund Balance Amounts that are not in a spendable form or are required to be
maintained intact. Due to the nature or form of the resources, they generally cannot be expected
to be converted into cash or a spendable form (e.g. Inventories and prepaid amounts). This also
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includes long-term loan and notes receivable and property held for resale. Applies as well to
amounts that must be retained intact legally or contractually.
2. Restricted Fund Balance - Amounts that can be spent only for the specific purposes stipulated.
Constraints are placed on the use of resources by external parties (e.g. by creditors, grant
providers, contributors) or by laws or regulations (e.g. constitution or legally enforceable
language). Restrictions may be changed or lifted only with the consent of the resource provider.
3. Committed Fund Balance - Amounts can only be used for the specific purposes determined by
a formal action of City Council. Constraints on fund balance use are imposed by internal. formal
action of the government's highest level of decision -making authority (e.g. City Council) and can
only be removed or changed by taking the same type of action it employed to commit those
amounts through legislation, resolution, or ordinance (e.g. funds committed to satisfy contractual
obligations). Action to constrain resources must occur prior to year-end; however the amount
can be determined in the subsequent period.
4. Assigned Fund Balance - Assigned fund balances include amounts that are limited by the
Council, Mayor, or his/her designee, for its intended use, but little or no formal action is required
to modify or eliminate those limitations. Assigned fund balances comprises amounts intended to
be used for a specific purpose. Amounts reported as assigned should not result in a deficit in
unassigned fund balance. Also relates to all governmental funds other than the General Fund,
with any remaining positive amounts not classified as nonspendable, restricted or committed.
5. Ueu*sig*edUnassi2ned Fund Balance - Comprises the residual classification for the General
Fund and includes all amounts not contained in the other classifications. Unassigned amounts are
available for any purpose. This represents the residual amount of the fund balance that has not
been restricted, committed, or assigned. Any reserve amount over the combined 20% of the
adopted General Fund Operating Expenditure is considered Unrestricted/Uncommitted reserve.
General Fund - In public sector accounting, the General Fund is the primary operating fund for all
revenues of the City that are not otherwise restricted as to their use, including monies from local property
and sales tax, and other revenue sources that are not assigned for a specific purpose. The General Fund
provides the resources necessary to pay/sustain the day-to-day activities for City services such as
administration, community services, parks and recreation, police, fire, public works, elected officials,
Mayor, and City Council. When governments or administrators talk about "balancing the budget" they
typically mean balancing the budget for their general fund.
Government Accounting Standards Board (GASB) - GASB is the private, nonpartisan, nonprofit
organization that works to create and improve the rules U.S. state and local governments follow when
accounting for their finances and reporting them to the public. While the GASB does not have the power
to enforce compliance with the standards it promulgates, the authority for its standards is recognized under
the Rules of Conduct of the AICPA. Also, legislation in many states requires compliance with GASB
standards, and governments usually are expected to prepare financial statements in accordance with those
standards when they issue bonds or notes or otherwise borrow from public credit markets. The GASB was
established in 1984 and is funded by publication sales, contributions from state and local governments,
and voluntary assessment fees from municipal bond issues.
Operating Budget - A detailed projection of all estimated income and expenses based on forecasted
revenue during a given period (usually one year). Since an operating budget is a short-term budget, capital
outlays are excluded because they are long-term costs. One-time revenues, such as grants, settlements,
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2.2.h
sales of assets and transfers are excluded because often they are non -recurring sources of revenues and
cannot be counted on corning in from one budget cycle to the next.
Revenue - The income of a government from all sources appropriated for the payment of the public
expenses. It includes such items as tax payments, fees from specific services, receipts from other
governments, fines, forfeitures, grants, shared revenues and interest income.
Structural Budget Deficit or "Gap" - A budget deficit (Gap) that results from a fundamental imbalance
whereby current year governmental expenditures exceed current year revenues without any consideration
of carryover or prior year unspent revenue balances if they exist. A structural deficit remains across the
operating fiscal cycle because the general level of government spending is too high for the prevailing
revenue structure (e.g., taxes, fees and other sources). A fiscal Gap, is a structural budget deficit over an
extended period of time and not only includes the structural deficit at a given point in time but also the
difference between promised future government commitments, such as health and retirement spending,
and future planned or anticipated tax and other revenues. Another description is that the current revenue
structure is insufficient to maintain services at the current level.
ARTICLE IX EFFECTIVE DATE
This policy shall take effect upon its final adoption by the City Council.
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2.2.i
Q
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2.2.i
City of Edmonds
Fund Balance Reserve Policy
July 2019
Amended March 2024
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2.2.i
Table of Contents
DRAFT......................................................................................................... Error! Bookmark not defined.
ARTICLE I INTRODUCTION......................................................................................................................5
ARTICLE Il CRITERIA FOR ESTABLISHING APPROPRIATE FUND BALANCE RESERVE
LEVELS.......................................................................................................................................................... 6
Section1. Volatility.................................................................................................................................... 6
Section2. Operating Fund Size..................................................................................................................6
Section 3. Purpose of Fund Balance Reserves............................................................................................6
Section4. Bond Ratings..............................................................................................................................6
ARTICLE III COMMITTED GENERAL FUND BALANCE RESERVES POLICY ................................. 6
Section 1. Establishment and Purpose of Operating General Fund Operating Reserve ............................. 6
ARTICLE IV CONTINGENT RESERVE FUND BALANCE POLICY......................................................7
ARTICLE V ANNUAL FUND BALANCE TYPES - STATUS REPORT .................................................. 9
ARTICLE VI ANNUAL RESERVE RATE REVIEW..................................................................................9
ARTICLE VII DEVIATIONS FROM POLICY............................................................................................9
ARTICLE VIII DEFINITIONS......................................................................................................................9
ARTICLE IX EFFECTIVE DATE...............................................................................................................12
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ARTICLE I INTRODUCTION
The overall objective of Fund Balance/Reserve Management Policy is to define that portion of fund balance
that is unavailable to support the current budget. In many ways, fund balance represents working capital,
which can either be used as a liquidity reserve or for spending in future years. A comprehensive fund
balance/reserve management policy provides guidelines for the major funds of the City of Edmonds and
provides a structured approach in setting reserve levels in specifically designated funds. It is financially
prudent for Edmonds to retain a modest level of unrestricted/uncommitted working capital in addition to
explicitly defined reserve levels identified in this policy to address unforeseen expenditure needs each
budget cycle. Please see Article VIII for financial definitions referenced in this Policy.
This Fund Balance/Reserve Management Policy is intended to guide prudent use of resources to provide for
the much -needed services to taxpayers and to maintain sound management policies. It is essential that
governments maintain adequate levels of fund balance reserves to mitigate risks and provide a back-up for
revenue shortfalls or unanticipated expenditures.
Goals
The goals of this Fund Reserve Policy is to provide clear guidance for the appropriate level of Fund Balance
Reserve for our city; set reporting and monitoring requirements, define the appropriate triggering warning
mechanism, set Council approval before any Restricted Reserve can be used, define replenishment timeline
and requirements, obtain consensus between Council and Administration that our city's finances should be
managed responsibly, and that uncommitted fund balances should not be spent down to the ceiling of the
General Fund reserve level, and earn a consistent AAA bond rating from the bond rating agencies.
Policy
It is the policy of the City of Edmonds to provide for the continuity of City government by planning ahead
for economic uncertainties and unforeseen or unplanned major expenditures. In order to achieve reserve
goals, the City must exercise prudent debt and liability management policies and follow sound fiscal
management policies that prioritize the City's core services. This policy establishes reserve fund balance
accounts that will provide funding for emergencies, economic uncertainties and for unanticipated operating
expenses or revenue shortfalls. In addition, this policy incorporates provisions of Governmental Accounting
Standards Board Statement (GASB) no. 54, Fund Balance Reporting and Governmental Fund Type
Definitions.
Objectives
The purpose of this Fund Balance/Reserve Management Policy is to assist the City in the pursuit of the
following equally important objectives:
1. Build adequate reserves which will provide the City the resources necessary for financial
stabilization, particularly during times of unforeseen emergencies and economic downturns;
2. Establish sound fiscal reserve policies that will serve as the foundation for ensuring that
strong fiscal management policies guide future City decisions;
3. Provide prudent guidelines regarding the establishment, use and replenishment of City
committed or assigned fund balances reserves;
4. Establish a process for periodic reporting and review of the City's various fund balances
(reserves); and
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5. Enhance the City's credit ratings received from rating institutions through the establishment
of clearly delineated Fund/Reserve policies that promote strong fiscal management;
6. Establish reserve policies that are in full compliance with GASB 54 financial reporting
requirements.
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ARTICLE II CRITERIA FOR ESTABLISHING APPROPRIATE FUND BALANCE RESERVE
LEVELS
There are key elements that must be reviewed and analyzed to determine the appropriate size of a given fund
balance reserve. Failure to follow the guidelines established in this policy can result in developing
unattainable fund reserve goals or unsustainable fund balance reserve levels. The following criteria shall be
used in determining the appropriate fund balance reserve levels:
Section 1. Volatility
The predictability and/or the volatility of its revenues or its expenditures (i.e., higher levels of fund balance
reserves may be needed if significant revenue sources are subject to unpredictable fluctuations or if operating
expenditures are highly volatile).
Section 2. Operating Fund Size
The overall size of the fund's budgetary events should be taken into consideration in setting the required
fund balance reserve level and type for a particular fund.
Section 3. Purpose of Fund Balance Reserves
Another consideration for determining the size of each reserve will be the purpose of the reserve: Is there
significant or perceived exposure to one-time outlays (e.g., disasters, immediate capital needs, state budget
cuts, or are there potential drains upon fund resources from other funds, or conversely, are there potential
reductions in funding transfers from other funds)?
Section 4. Bond Ratings
The potential impact on the entity's bond ratings and the corresponding increased cost of borrowed funds
ARTICLE III COMMITTED GENERAL FUND BALANCE RESERVES POLICY
This Policy shall establish a committed fund balance reserve, define funding levels and call the reserve the
General Fund Operating Reserve. The purpose of the reserve is for meeting economic uncertainties, and
unanticipated expenses or revenue shortfalls. This Policy requires the City to establish and maintain a
General Fund Operating Reserve in an amount equal to or greater than 16% of the General Fund's Adopted
Annual Operating Expenditure Budget. If it is determined that the reserve balances are not adequate, the
Mayor shall propose an amendment to these policies.
The General Fund Operating Reserve Fund shall be a separate fund outside of the General Fund. This is to
achieve its visibility, much like the Contingency Reserve Fund. Fund number 011 shall be the designated
fund number for The General Fund Operating Reserve.
A detailed accounting of this reserve account will be maintained by the Finance Department to show
deposits, withdrawals (when authorized pursuant to policies contained herein) and interest earned. All
accounting for these accounts shall be recorded in the City's ERP system A detailed report, prepared by
the Finance Department, shall be presented annually to the Council. In addition, a monthly report by the
Finance Department shall be presented to Council showing a projection of end of year general fund
balance. If in any two consecutive months, this report indicates the City's end of year general fund
balance will be less than 21% of budgeted operating expenditures, the Mayor shall implement measures to
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ensure the end of year general fund balance does not drop below 16% of adopted budgeted operating
expenditures unless Council explicitly approves use of general fund committed reserves.
Note: A 5% of the budgeted general fund operating expenditures is built in as the warning mechanism.
During the time when the restricted reserve is already below the required 16%, the 5% warning mechanism
is waived. The Mayor and the administration shall focus on rebuilding the reserve back to its required 16%
level.
Section 1. Establishment and Purpose of Operating General Fund Operating Reserve
A separate balance sheet account shall be setup by the Finance Director for the General Fund Operating
Reserve, to be used in instances of fiscal emergencies that include: economic uncertainties, unforeseen
emergencies and unanticipated operating expenses or revenue shortfalls.
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The Mayor has the power to declare a fiscal emergency based upon one of the following:
1) A natural catastrophe.
2) An immediate threat to health and public safety; or
3) A significant decline in General Fund revenues. Or
4) Unexpected expenditures that outpaced General Fund revenue.
The fiscal emergency declared by the Mayor must be approved by a simple majority of the City Council.
Limitations of Fund Use
Any use of the committed General Fund Operating Reserves shall be used only in cases of fiscal emergency
and shall not be used to augment ongoing budgetary/operating spending increases. The committed General
Fund Operating Reserve may also be used for one-time non -reoccurring expenditures and/or capital projects
(operations and maintenance shall not be included), all as submitted by the Mayor and approved by the
Council.
The amount of funds to be withdrawn from this committed fund balance reserve shall be determined by the
Mayor subject to City Council approval. In his/her presentation to the Council, the Mayor or his/her designee
shall include a detailed list of how the funds will be applied. A simple majority vote of the Council shall be
required to approve the amount and use of funds.
General Fund Operating Reserve Replenishment
If any use of the committed General Fund Operating Reserve has occurred, the Finance Director must present
to Mayor and City Council an annual Replenishment Plan during the month of November as well as a
monthly status report of the level of replenishment. The Replenishment Report must be presented each
month and year, until the Reserves are fully replenished. The Replenishment Report must include the
following information:
1) Amount of Reserves used;
2) Whether it is anticipated additional Reserves will be needed in the following budget cycle, or
3) If no additional Reserves are needed, then the Replenishment Report must include a plan for
replenishing the Reserve to policy mandated levels.
The committed General Fund Reserve shall be restored pursuant to the guidelines delineated below:
1) If a reserve is drawn down by 0-10% of reserve fund balance, then a solution to replenish to at
least the minimum shall be structured over a 1 to 3 year period.
2) If a reserve is drawn down by 11-25% of reserve fund balance, then the budgetary plan to restore
the reserve shall be structured over a 3 to 5 year period.
3) If the reserve is drawn down by 26-50% of reserve fund balance, then a budgetary plan shall be
implemented to return the reserve level to 100% of the minimum balance over a 5 to 7 year period.
ARTICLE IV CONTINGENT RESERVE FUND BALANCE POLICY
This Policy shall establish a fund and define funding levels for a committed Fund Balance Reserve to
be called the Contingent Reserve Fund. The primary purpose of the reserve is for meeting
emergencies of the City and, secondarily, if the General Fund Operating Reserve have been
exhausted, the Contingent Reserve Fund can be use in times of economic uncertainties, and for
unanticipated expenses or revenue shortfalls. The target balance of the Reserve shall I) not exceed the
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limitations set forth by RCW 35A.33.145, which sets the statutory maximum at $0.375 per $1,000 of
assessed valuation and 2) the Contingent Reserve Fund balance shall be 4% of the General Fund
expenditures operating budget. The actual dollar amount shall be determined based on the annual
adopted General Fund expenditures. It further requires a simple majority vote of Council with a
statement declaring the reason for their use.
A detailed accounting of the Fund shall be maintained by the Finance Department to show deposits,
withdrawals (when authorized pursuant to policies contained herein) and be presented semi-annually
in February and August to the Council.
The Mayor has the power to declare a fiscal emergency based upon one of the following:
1) A natural catastrophe;
2) An immediate threat to health and public safety; or
3) A significant economic decline in General Fund revenues.
4) Unexpected expenditures that outpaced General Fund revenue.
The fiscal emergency declared by the Mayor must be approved by a simple majority of the City Council
Note: if the mayor is unable to act or refuses to act to declare a fiscal emergency when any one of these
conditions are present, City Council may declare a fiscal emergency by a simple majority vote.
Limitations of Fund Use
Any use of the committed Contingent Reserves shall be used in cases of fiscal emergency, shall not be used
to augment ongoing budgetary/operating spending increases and should be used only after the General Fund
Operating Reserves have been exhausted or when City Council approves specific use of the committed
Contingent Reserve for one-time non -reoccurring expenditures and/or capital projects (operations and
maintenance shall not be included).
The amount of funds to be withdrawn from this committed fund balance reserve shall be determined by the
Mayor. In his/her presentation to the Council, the Mayor or his/her designee shall include a detailed list of
how the funds will be applied. A simple majority vote of the Council shall be required to approve the amount
and use of funds.
Contingent Reserve Replenishment
If any use of the committed Contingent Reserve has occurred, the Finance Director must present to Mayor
and City Council an annual Replenishment Plan during the month of November as well as a monthly status
report of the level of replenishment.. The Replenishment Report must be presented each month and year,
until the Reserves are fully replenished. The Replenishment Report must include the following information:
1) Amount of Reserves used
2) Whether it is anticipated additional Reserves will be needed in the following budget cycle, or
3) If no additional Reserves are needed, then the Replenishment Report must include a plan for
replenishing the Reserve to policy mandated levels.
The committed Contingent Reserve shall be restored pursuant to the guidelines delineated below:
4) If a reserve is drawn down by 0-10% of reserve fund balance, then a solution to replenish to at
least the minimum shall be structured over a 1 to 3 year period.
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5) If a reserve is drawn down by 11-25% of reserve fund balance, then the budgetary plan to restore
the reserve shall be structured over a 3 to 5 year period.
6) If the reserve is drawn down by 26-50% of reserve fund balance, then a budgetary plan shall be
implemented to return the reserve level to 100% of the minimum balance over a 5 to 7 year
period.
ARTICLE V ANNUAL FUND BALANCE TYPES -STATUS REPORT
Once a year, in August, the Mayor shall present to the Council Finance Committee a comprehensive report
on the City's fund balance reserve types as of June 30th. The report shall include an updated fund balance
reserve level for each fund balance type. This report shall include the following funds:
1. General Fund Operating Reserve balance;
2. Contingency Reserve Fund balance.
ARTICLE VI ANNUAL RESERVE RATE REVIEW
Once a year, during the annual budget hearings, the Mayor, based upon a comprehensive financial and
economic review of all City fund balance types and in consultation with the City Finance Director, and
Department Directors as necessary, shall make recommendations to the City Council for either maintaining
existing fund balance reserve polices or revising fund balance reserve policies including percentage ranges
established by category herein and replenishment requirements by categories established herein.
ARTICLE VII DEVIATIONS FROM POLICY
No deviations from the fund balance reserve polices set forth in this Policy will be allowed except as
approved by a simple majority of vote by the Council. This includes any increase or decrease in the base
fund balance reserve levels established by this policy and expenditures from fund balance reserve accounts
for anything other than the intended budgeted use of said fund balance.
ARTICLE VIII DEFINITIONS
Budget - A plan of financial operation containing an estimate of proposed expenditures for a given period
(usually a fiscal year) and a proposed forecast of revenues (receipts) to cover them. A budget is also a plan
that outlines an organization's financial and operational goals and strategies in monetary terms.
Capital Expenditures are expenditures incurred when monies are spent either to buy fixed assets or to add
to the value of an existing fixed asset with a useful life that extends beyond the fiscal year. In accounting,
a capital expenditure is added to an asset account ("capitalized"), thus increasing the asset's basis (the cost
or value of an asset). The general rule (even for municipalities) is that if the property acquired has a useful
life longer than the fiscal year, the cost must be capitalized. The capital expenditure costs are then amortized
or depreciated over the life of the asset in question.
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Comprehensive Annual Financial Report (CAFR)-A CAFR is a set of financial statements for a state,
municipality or other governmental entity that comply with the accounting requirements established by
the Governmental Accounting Standards Board (GASB). It must be audited by an independent auditor
using generally accepted government auditing standards.
The CAFR consists of three sections: Introductory, Financial and Statistical.
The Introductory section orients and guides the reader through the report. The Financial section presents
the entity's basic financial statements as well as notes to the statements and the independent auditors'
report. The Statistical section provides additional financial and statistical data, including data about
financial trends that may better inform the reader about the government's activities.
Council - Means the legislative body (the city council) that governs the City of Edmonds.
Expenditure - The actual payment of cash or cash equivalent for goods delivered or services rendered,
or a charge against available funds in settlement of an obligation as evidenced by an invoice, voucher or
other such document during the fiscal year. For governmental reporting purposes, expenditures include
expenses or a provision for debt retirement not reported as a liability of the fund from which retired.
Fiscal Year - A 12-month period to which the annual or biennial operating budget applies and the end of
which a governmental unit determines its financial position and the results of its operations. The City has
specified January 1 through December 31 as its fiscal year. Regardless of whether an annual or biennial
budget is used, the Fund Balance Reserve and Contingency Fund Reserve are reviewed on an annual basis.
Fund - A fund is a self -balancing set of accounts recording cash and other financial resources, together
with all related liabilities and "residual" equity or balances, and changes therein, which are segregated for
the purpose of carrying on specific activities or attaining certain planned objectives in accordance with
special regulations, restrictions or limitations.
Fund Balances - The overall objective of fund balance reporting is to isolate that portion of a fund balance
that is unavailable to support the following period's budget (see GASB 54 definition below). In general,
an unassigned fund balance shall be defined as those amounts that are not restricted, committed, or
assigned, of a particular fund at the end of the fiscal year.
GASB 54 - Fund Balance Reporting and Governmental Fund Type Definitions - The City of
Edmonds's CAFR Financial Statements are required to comply with GASB 54 beginning with its Fiscal
Year End 2011 CAFR going forward. GASB 54 changes and identifies fund balance classifications that
can be more consistently applied by clarifying existing governmental fund type definitions.
Fund balance is basically the difference between the assets and liabilities reported in a fund. GASB
statement No. 54 provides the following five categories for classifying fund balance and related
definitions to be used for describing the components of fund balance:
1. Nonspendable Fund Balance Amounts that are not in a spendable form or are required to be
maintained intact. Due to the nature or form of the resources, they generally cannot be expected
to be converted into cash or a spendable form (e.g. Inventories and prepaid amounts). This also
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includes long-term loan and notes receivable and property held for resale. Applies as well to
amounts that must be retained intact legally or contractually.
2. Restricted Fund Balance - Amounts that can be spent only for the specific purposes stipulated.
Constraints are placed on the use of resources by external parties (e.g. by creditors, grant
providers, contributors) or by laws or regulations (e.g. constitution or legally enforceable
language). Restrictions may be changed or lifted only with the consent of the resource provider.
3. Committed Fund Balance - Amounts can only be used for the specific purposes determined by
a formal action of City Council. Constraints on fund balance use are imposed by internal. formal
action of the government's highest level of decision -making authority (e.g. City Council) and can
only be removed or changed by taking the same type of action it employed to commit those
amounts through legislation, resolution, or ordinance (e.g. funds committed to satisfy contractual
obligations). Action to constrain resources must occur prior to year-end; however the amount
can be determined in the subsequent period.
4. Assigned Fund Balance - Assigned fund balances include amounts that are limited by the
Council, Mayor, or his/her designee, for its intended use, but little or no formal action is required
to modify or eliminate those limitations. Assigned fund balances comprises amounts intended to
be used for a specific purpose. Amounts reported as assigned should not result in a deficit in
unassigned fund balance. Also relates to all governmental funds other than the General Fund,
with any remaining positive amounts not classified as nonspendable, restricted or committed.
5. Unassigned Fund Balance - Comprises the residual classification for the General Fund and
includes all amounts not contained in the other classifications. Unassigned amounts are available
for any purpose. This represents the residual amount of the fund balance that has not been
restricted, committed, or assigned. Any reserve amount over the combined 20% of the adopted
General Fund Operating Expenditure is considered Unrestricted/Uncommitted reserve.
General Fund - In public sector accounting, the General Fund is the primary operating fund for all
revenues of the City that are not otherwise restricted as to their use, including monies from local property
and sales tax, and other revenue sources that are not assigned for a specific purpose. The General Fund
provides the resources necessary to pay/sustain the day-to-day activities for City services such as
administration, community services, parks and recreation, police, fire, public works, elected officials,
Mayor, and City Council. When governments or administrators talk about "balancing the budget" they
typically mean balancing the budget for their general fund.
Government Accounting Standards Board (GASB) - GASB is the private, nonpartisan, nonprofit
organization that works to create and improve the rules U.S. state and local governments follow when
accounting for their finances and reporting them to the public. While the GASB does not have the power
to enforce compliance with the standards it promulgates, the authority for its standards is recognized under
the Rules of Conduct of the AICPA. Also, legislation in many states requires compliance with GASB
standards, and governments usually are expected to prepare financial statements in accordance with those
standards when they issue bonds or notes or otherwise borrow from public credit markets. The GASB was
established in 1984 and is funded by publication sales, contributions from state and local governments,
and voluntary assessment fees from municipal bond issues.
Operating Budget - A detailed projection of all estimated income and expenses based on forecasted
revenue during a given period (usually one year). Since an operating budget is a short-term budget, capital
outlays are excluded because they are long-term costs. One-time revenues, such as grants, settlements,
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sales of assets and transfers are excluded because often they are non -recurring sources of revenues and
cannot be counted on corning in from one budget cycle to the next.
Revenue - The income of a government from all sources appropriated for the payment of the public
expenses. It includes such items as tax payments, fees from specific services, receipts from other
governments, fines, forfeitures, grants, shared revenues and interest income.
Structural Budget Deficit or "Gap" - A budget deficit (Gap) that results from a fundamental imbalance
whereby current year governmental expenditures exceed current year revenues without any consideration
of carryover or prior year unspent revenue balances if they exist. A structural deficit remains across the
operating fiscal cycle because the general level of government spending is too high for the prevailing
revenue structure (e.g., taxes, fees and other sources). A fiscal Gap, is a structural budget deficit over an
extended period of time and not only includes the structural deficit at a given point in time but also the
difference between promised future government commitments, such as health and retirement spending,
and future planned or anticipated tax and other revenues. Another description is that the current revenue
structure is insufficient to maintain services at the current level.
ARTICLE IX EFFECTIVE DATE
This policy shall take effect upon its final adoption by the City Council.
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2.3
City Council Agenda Item
Meeting Date: 03/12/2024
January Monthly Report
Staff Lead: Dave Turley
Department: Administrative Services
Preparer: Dave Turley
Background/History
January monthly report.
Staff Recommendation
Information only, recommendation if to place report on Received for Filing on a future agenda.
Narrative
N/A
Attachments:
January Monthly Report
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O-V
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CITY OF EDMONDS
MONTHLY BUDGETARY FINANCIAL REPORT
JAN UARY 2024
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GENERAL FUND SUMMARY
2.3.a
General Fund Revenues and Expenses (Rolling 24 months)
r. General Fund Revenues .—General Fund Expenses
10,000,000 — —
9,000,000 —�
8,000, 000
7,000,000
6,000,000
5,000,000
4,000,000
3,000 000 — _ /-
2,000,000
1,000,000 - --
February May August November February May August November
General Fund Tax Revenue (2018 through 2023)
— — -- Sales Tax Property Tax EMS Tax Other Taxes
12,000,000 --
10,000, 000
—�—��
8,000,000 — a —
6,000,000
4,000,000
2,000,000
2,000,000
1,800,000
1,600, 000
1,400, 000
1,200,000
1,000, 000
800,000
600,000
400,000
200,000
2018 2019 2020 2021 2022 2023
General Fund Tax Revenue (2024 YTD)
Sales Tax Property Tax
$599,964
6,012 W_
EMS Tax Other Taxes
Y1m
O
d
_
0
_
ca
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0
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City of Edmonds, WA
Monthly Revenue Summary -General Fund
2024
General Fund
Cumulative Monthly YTD Variance
Budget Forecast Budget Forecast Actuals %
January $
2,696,328 $
2,696,328
February
5,382,958
2,686,630
March
8,188,834
2,805,875
April
12,797,317
4,608,484
May
21,760,095
8,962,778
June
24,435,228
2,675,133
July
27,403,259
2,968,031
August
30,732,913
3,329,654
September
33,505,242
2,772,329
October
39,039,376
5,534,133
November
47,850,227
8,810,851
December
51,056,792
3,206,565
Real Estate Excise Tax 1 & 2
$ 2,532,339 -6.08%
General Fund
o: vw.wV -
50000.W0
45,000,000 /
40AW,000
35,000,000
300W.W0 ;
25 000,000
20,OMWO
15,000,000
10,000,000
5,000,000
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
--*--Current Year Budget � Prior Year
City of Edmonds, WA
Monthly Revenue Summary -Real Estate Excise Tax
2024
Cumulative Monthly YTD Variance
Budget Forecast Budget Forecast Actuals %
January $
225,388 $
225,388 5
February
376,297
150,909
March
569,768
193,471
April
775,427
205,659
May
1,036,020
260,593
June
1,293,139
257,119
July
1,573,012
279,874
August
1,849,679
276,667
September
2,151,102
301,423
October
2,420,735
269,633
November
2,687,175
266,440
December
3,000,000
312,825
158,734-29.57%
Real Estate Excise Tax 1 & 2
0 Z70.000
700,OW
400,000 r
2,100,000 /
1.800.000
1,500,000 /-
1.200.000 -
900,000
600,000
300,000
0—r-
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
--oCurrent Year Budget Prior Year
*The monthly budget forecast columns are based on a five-year average.
2
Packet Pg. 108
2.3.a
SALES TAX SUMMARY
Health &
Personal
Care,
$5,207
Construction Trade,
$141,832
Accommodation, $3,451
Clothing and
Accessories, $30,451
Communications,
$20,914
Wholesale Trade,
$32,242
Sales Tag Analysis By Category
Current Period: January 2024
Year -to -Date
Total $975,066
Amusement &
Automotive Repair, Recreation, $8,083
$23,007
Business Services,
$112,981
_ Gasoline, $0 Retail Food Stores,
$32,250
Retail .Automotive.
$226.620 A
Misc Retail, 5202.1 IS
Others, $22,777
Manufacturing, $8,081
Eating & Drinking,
$105,051
Annual Sales Tax Revenue
14,000,000 -
12,000,000 $11,257,927 $11,614,826
$10,302,518
10,000;000
$8,406,296 $8 452 715 $8,317,046
8,000, 000
6,000, 000
4,000,000
2,000,000 — $975066
2018 2019 2020 2021 2022 2023 YTD 2024
I
3
Packet Pg. 109
City of Edmonds, WA
Monthly Revenue Summary -Sales and Use Tax
2024
Sales and Use Tax
Cumulative
Monthly YTD Variance
Budget Forecast Budget
Forecast Actuals %
January
$ 956,967 $
956,967 ; 975,066 1.89%
February
2,084,047
1,127,080
March
2,987,849
903,802
April
3,814,928
827,079
May
4,821,039
1,006,111
June
5,796,759
975,721
July
6,836,449
1,039,690
August
7,953,072
1,116,623
September
9,995,564
1,042,491
October
10,116,626
1,121,062
November
11,238,239
1,121,613
December
12,300,000
1,061,761
City of Edmonds, WA
Monthly Revenue Summary -Real Personal/Property Tax
2024
Real Personal/Property Tax
Cumulative Monthly YTD Variance
Budget Forecast Budget Forecast Actuals %
January $
28,172 $
28,172 $
February
156,833
128,661
March
877,571
720,738
April
5,200,702
4,323,131
May
6,113,323
912,621
June
6,167,757
54,434
July
6,192,819
25,062
August
6,247,276
54,457
September
6,423,953
176,676
October
10,550,884
4,126,931
November
11,287,789
736,905
December
11,327,000
39,211
15,003 -46.75%
*The monthly budget forecast columns are based on a five-year average.
4
Packet Pg. 110
City of Edmonds, WA
Monthly Revenue Summary -Water Utility Tax
2024
Water Utility Tax
Cumulative
Monthly YTD Variance
Budget Forecast Budget
Forecast Actuals %
January
$ 90,844 $
90,844 92,691 2 03%
February
154,355
63,511
March
244,152
89,797
April
304,356
60,204
May
393,634
89,278
June
463,947
70,313
July
573,149
109,202
August
666,476
93,327
September
791,033
124,557
October
881,630
90,597
November
983,292
101,662
December
1,047,289
63,997
City of Edmonds, WA
Monthly Revenue Summary -Sewer Utility Tax
2024
Sewer Utility Tax
Cumulative Monthly YTD Variance
Budget Forecast Budget Forecast Actuals %
January $
101,297 $
101,297 $ 101,472 0.17%
February
185,730
84,433
March
286,530
100,799
April
371,027
84,497
May
472,427
101,400
June
557,139
84,712
July
659,773
102,634
August
744,838
85,065
September
850,226
105,388
October
936,127
85,902
November
1,039,506
103,379
December
1,123,814
84,308
Sewer Utility Tax
1.2(w.000 - - -
1,100,000
I.M0,000 I
900,000
800,000
i
700,000 '
600,000
500,000
400,000
300,000
1
200,000
100,000 '
0 I -�
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Current Year Budget Prior Year
*Tire monthly budget forecast columns are based on a five-year average.
5
Packet Pg. 111
City of Edmonds, WA
Monthly Revenue Summary -Meter Water Sales
2024
Meter Water Sales
Cumulative Monthly YTD Variance
Bu dget Fo re ca st Budget Forecast Actuals %
January
$ 907,961
$ 907,961 S 927,056 2.10%
February
1,542,839
634,879
March
2,440,331
897,492
April
3,042,049
601,718
May
3,934,362
892,313
June
4,637,093
702,731
July
5,733,149
1,096,056
August
6,665,886
932,738
September
7,911,002
1,245,116
October
8,816,518
905,516
November
9,832,625
1,016,107
December
10,472,890
640,265
City of Edmonds, WA
Monthly Revenue Summary -Storm Water Sales
2024
Storm Water Sales
Cumulative Monthly YTD Variance
Budget Forecast Budget Forecast Actuals %
January
$ 493,589
$ 493,589 S 474,260 -3.92%
February
1,573,695
1,080,106
March
2,071,892
498,197
April
2,515,478
443,586
May
3,014,352
498,874
June
3,458,035
443,682
July
3,948,598
490,563
August
5,030,812
1,082,214
September
5,530,169
499,357
October
5,974,369
444,200
November
6,473,743
499,375
December
6,901,960
428,217
*The monthly budget forecast columns are based on a five-year average.
6
Packet Pg. 112
2.3.a
City of Edmonds, WA
Monthly Revenue Summary-UnmeterSewer Sales
2024
Unmeter Sewer Sales
Cumulative Monthly YTD Variance
Budget Forecast Budget Forecast Actuals
January
$ 1,013,537 $
1,013,537 $ 1,015,482 0.19%
February
1,857,511
843,974
March
2,866,119
1,008,607
April
3,710,735
844,616
May
4,725,346
1,014,611
June
5,572,110
846,764
July
6,598,121
1,026,011
August
7,448,415
850,294
September
8,502,903
1,054,488
October
9,361,565
858,662
November
10,395,964
1,034,399
December
11,238,143
842,179
*The monthly budget forecast columns are based on a five-year average.
7
Packet Pg. 113 1
City of Edmonds, WA
Monthly Expenditure Report -General Fund
2024
General Fund
Cumulative Monthly YTD Variance
Budget Forecast Budget Forecast Actuals %
January
$ 4,809,941
$ 4,809,941 $ 4,652,570 -3.27%
February
8,929,460
4,119,519
March
12,949,656
4,020,196
April
16,605,542
3,655,886
May
20,680,830
4,075,289
June
25,263,943
4,583,113
July
29,265,855
4,001,912
August
33,410,962
4,145,107
September
37,568,248
4,157,286
October
41,684,233
4,115,985
November
46,834,881
5,150,648
December
51,892,793
5,057,912
General Fund
60,000.000 ,
55,000.000 +
50,000,000
45,000,000
40,000,000
35,000,000
30.000,00u t
25,000,000
20.000,000
15,000,000
10,000,000 /
5,000,000 it
—
0
JAN FEB
—
MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
--s—Current Year — Budget Prior Year
City of Edmonds, WA
Monthly Expenditure Report -Non -Departmental
2024
Non -Departmental
Cumulative Monthly YTD Variance
Budget Forecast Budget Forecast Actuals %
January $
926,027 $
926,027 $ 1,244,387 34.38%
February
1,489,596
563,569
March
2,012,000
522,404
April
2,395,260
383,260
May
2,923,480
528,220
June
3,677,256
753,776
July
4,126,291
449,035
August
4,662,507
536,216
September
5,123,698
461,191
October
5,544,111
420,414
November
6,294,725
750,614
December
6,857,495
562,770
Non -Departmental
20,UTAi tIVO
18,000,000
16,000,000 - — - --- — — -
14,000,000
12,000.000
10,000,000
8,000,000
6,000,000 -
4,000,000 `
1,000,000
0
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
— —Current Year Budget Prior Year
*The monthly budget forecast columns are based on a five-year average.
.
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Packet Pg. 114
I 2.3.a I
City of Edmonds, WA
Monthly Expenditure Report -City Council
2024
City Council
Cumulative Monthly YTD Variance
Budget Forecast Budget Forecast Actuals %
January
$ 34,240 $
34,240 $ 40,574 18.50%
February
71,153
36,913
March
112,189
41,036
April
150,403
38,214
May
193,081
42,678
June
234,428
41,347
July
275,019
40,591
August
316,493
41,474
September
357,868
41,375
October
394,551
36,684
November
435,285
40,734
December
479,286
44,001
Office of Mayor
City Council
500,000--
450,000
400,000
350,000
300,000
250,000
200,000
150,000 /
100,000
50,000 �.
0
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
-Current Year Budget Prior Year
City of Edmonds, WA
Monthly Expenditure Report -Office of Mayor
2024
Cumulative Monthly YTD Variance
Budget Forecast Budget Forecast Actuals %
January
$ 40,561
$ 40,561 $ 33,901-16.42%
February
82,159
41,598
March
124,596
42,436
April
165,441
40,846
May
205,791
40,350
June
245,843
40,052
July
287,251
41,408
August
327,468
40,217
September
367,326
39,858
October
406,988
39,662
November
449,726
42,738
December
490,875
41,149
Office of Mayor
500,000
450,000
400,000
350,000
300,000
250.000
'_'00.000 -
150,000
100,000
50,000
0
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
--0--Current Year -Budget Prior Year
*The monthly budget forecast columns are based on a five-year average.
9
Packet Pg. 115
City of Edmonds, WA
Monthly Expenditure Report -Human Resources
2024
Human Resources
Cumulative Monthly Y-rD Variance
Budget Forecast Budget Forecast Actuals
January
$ 110,919 $
110,919 $ 129,960 17A7%
February
206,083
95,165
March
293,020
86,937
April
385,026
92,006
May
477,507
92,481
June
609,764
132,257
July
691,435
81,671
August
781,445
90,009
September
882,461
101,016
October
976,331
93,870
November
1,084,356
108,025
December
1,222,438
138,082
Human Resources
1,300,000
11200,000
1,100,000
1,000,000
900,000
800,000
700,000
600,000 ti
500,000
400,000
300,000
200,000
100,000
0
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
*-Current Yea Budget Prior Year
City of Edmonds, WA
Monthly Expenditure Report -Municipal Court
2024
Municipal Court
Cumulative Monthly Y-rD Variance
Budget Forecast Budget Forecast Actuals
January $
133,120 $
133,120 $ 136,698
February
268,761
135,641
March
408,462
139,701
April
549,323
140,861
May
702,755
153,432
June
841,629
138,874
July
987,720
146,091
August
1,144,145
156,425
September
1,291,990
147,845
October
1,441,979
149,989
November
1,629,476
187,497
December
1,811,176
181,700
2.69
Municipal Court
2.000,000
1,800,000
1,600,000
1,400.000
1,200,000
1.000,000
800,000
600,000
400,000 -
200,000
0
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
-+-Current Yea Budget Prior Year
*The monthly budget forecast columns are based on a five-year average.
10
Packet Pg. 116
I 2.3.a I
City of Edmonds, WA
Monthly Expenditure Report -Community Services/Economic Development
2024
Community Services/Economic Development
Cumulative Monthly YTD Variance
Budget Forecast Budget Forecast Actuals
January $
70,938 $
70,938 $ 84,711 19.42%
February
150,629
79,691
March
228,686
78,058
April
308,932
80,246
May
391,061
82,128
June
480,392
89,331
July
570,789
90,397
August
679,369
108,580
September
777,142
97,773
October
877,976
100,834
November
1,007,121
129,145
December
1,162,045
154,924
*The monthly budget forecast columns are based on a five-year average.
11
Packet Pg. 117
2.3.a
City of Edmonds, WA
Monthly Expenditure Report - Fund 512 - Technology Rental Fund
2024
Fund 512 - Technology Rental Fund
Cumulative Monthly YTD Variance
Budget Forecast Budget Forecast Actuals %
January
$ 278,067
$ 278,067 5 450,425 61.98%
February
459,653
181,586
March
687,018
227,364
April
781,894
94,876
May
882,974
101,080
June
1,005,318
122,345
July
1,131,059
125,740
August
1,299,834
168,775
September
1,465,789
165,955
October
1,643,179
177,391
November
1,772,621
129,442
December
2,011,076
238,455
Fund 512 - Technology Rental Fund
2,200,000
2,000,000
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000 -
400,000 -
200,000 -
0
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Current Year Budget Prior Year
City of Edmonds, WA
Monthly Expenditure Report -Administrative Services
2024
Administrative Services
Cumulative Monthly YTD Variance
Budget Forecast Budget Forecast Actuals %
January $
288,918 $
288,918 $ 274,596
February
523,687
234,769
March
733,695
210,008
April
944,992
211,297
May
1,157,177
212,186
June
1,442,022
284,845
July
1,684,828
242,805
August
1,896,259
211,431
September
2,116,379
220,121
October
2,344,386
228,007
November
2,598,917
254,531
December
2,825,453
226,536
-4.96%
Administrative Services
3,000,000
2,800,000
2,600.000
2,400,000 �l
2,200.000
1000.000 -
1,800.000
1,6000111
1,400,000
1,200,000
i,000,000 -�
800,000
600,000
400,000
200,000
0
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
-Current Year Budget Prior Year
'The monthly budget forecast columns are based on a five-year average.
12
Packet Pg. 118
City of Edmonds, WA
Monthly Expenditure Report -City Attorney
2024
City Attorney
Cumulative Monthly YTD Variance
Budget Forecast Budget Forecast Actuals %
January
$ 96,815 $
96,815 $ 0.00%
February
193,630
96,815
March
290,445
96,815
April
387,260
96,815
May
484,075
96,815
June
580,890
96,815
July
677,705
96,815
August
774,520
96,815
September
871,335
96,815
October
968,150
96,815
November
1,064,965
96,815
December
1,161,780
96,815
City of Edmonds, WA
Monthly Expenditure Report -Police
2024
Police
Cumulative
Monthly YTD Variance
Budget Forecast Budget
Forecast Actuals %
January
$ 1,325,644 $
1,325,644 $ 1,320,779 -0.37%
February
2,644,333
1,318,689
March
4,027,557
1,383,224
April
5,378,981
1,351,424
May
6,782,808
1,403,826
June
8,239,937
1,457,130
July
9,689,531
1,449,593
August
11,039,396
1,349,866
September
12,478,176
1,438,780
October
13,942,747
1,464,571
November
15,677,275
1,734,528
December
17,478,540
1,801,265
Police
18,000,000
16.000,000 — -
14,000,000
12,000,000 -
10,000,000
8,000,000 - - - -
6,000,000
4,000,000
2,000,000 -
0
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
--*--Current Year Budget Prior Year
*The monthly budget forecast columns are based on a five-year average.
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Packet Pg. 119
City of Edmonds, WA
Monthly Expenditure Report -Planning & Development
2024
Planning & Development
Cumulative Monthly YTD Variance
Bu dget Fo re ca st Budget Forecast Actuals
January
$ 328,959 $
328,959 $ 269,177-18.17%
February
671,531
342,572
March
999,838
328,306
April
1,348,844
349,006
May
1,692,557
343,714
June
2,024,917
332,360
July
2,387,504
362,587
August
2,727,099
339,594
September
3,071,846
344,748
October
3,418,696
346,949
November
3,799,763
381,067
December
4,251,605
451,842
City of Edmonds, WA
Monthly Expenditure Report -Parks & Recreation
2024
Parks & Recreation
Cumulative Monthly YTD Variance
Budget Forecast Budget Forecast Actuals %
January
$ 498,850 $
498,850 5 453,277 -9.14%
February
986,757
487,907
March
1,483,576
496,818
April
1,955,557
471,981
May
2,461,256
505,698
June
2,984,923
523,667
July
3,580,661
595,738
August
4,186,784
606,123
September
4,840,484
653,700
October
5,394,700
554,215
November
5,962,605
567,905
December
6,520,597
557,992
*The monthly budget forecast columns are based on a five-year average.
14
Packet Pg. 120
City of Edmonds, WA
Monthly Expenditure Report - Fund 016 - Building Maintenance Fund
2024
Fund 016 - Building Maintenance Fund
Cumulative Monthly YTD Variance
Budget Forecast Budget Forecast Actuals
January
$ 93,773 $
93,773 $ 138,032 47.20%
February
187,546
93,773
March
281,318
93,773
April
375,091
93,773
May
468,864
93,773
June
562,637
93,773
July
656,410
93,773
August
750,182
93,773
September
843,955
93,773
October
937,728
93,773
November
1,031,501
93,773
December
1,125,275
93,773
Facilities Maintenance
Fund 016 -Building Maintenance Fund
1,200,000
1,100,000
1,000,000
900,000
800,000
700,000 -
600,000
500,000 -�
400,000
300,000
200,000
100,000
0
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Current Year Budget Prior Year
City of Edmonds, WA
Monthly Expenditure Report -Facilities Maintenance
2024
Cumulative Monthly YTD Variance
Budget Forecast Budget Forecast Actuals
January
$ 156,777 $
156,777 5 280,811 79.11%
February
389,680
232,903
March
593,580
203,900
April
769,287
175,707
May
948,286
178,999
June
1,082,262
133,976
July
1,241,226
158,964
August
1,449,125
207,900
September
1,701,717
252,591
October
1,994,291
292,575
November
2,251,871
257,580
December
2,638,179
386,308
*The monthly budget forecast columns are based on a five-year average.
15
Packet Pg. 121
I 2.3.a I
City of Edmonds, WA
Monthly Expenditure Report -Engineering
2024
Engineering
Cumulative Monthly YTD Variance
Budget Forecast Budget Forecast Actuals %
January $
301,531 $
301,531 $ 283,081 -6.12%
February
604,565
303,034
March
913,824
309,259
April
1,223,821
309,997
May
1,553,842
330,021
June
1,868,266
314,424
July
2,185,239
316,973
August
2,491,236
305,997
September
2,797,476
306,240
October
3,102,475
304,999
November
3,439,952
337,477
December
3,777,853
337,901
Engineering
4.000.000
3.500.000
3A00,000 - -
2.500,000
2.(X1U,000
1,500,OD0
1,000,000
500,000 — - - -
0
JAN FEB MAR APR MAY JUN JUL AUG SEP OCr NOV DEC
Current Year Budget Prior Year
"The monthly budget forecast columns are based on a five-year average.
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Packet Pg. 122
I 2.3.a I
Page 1 of 1
CITY OF EDMONDS
REVENUES BY FUND - SUMMARY
Fund
2024 Adopted
1/31/2023
1/31/2024
Amount
No.
Title
Budget
Revenues
Revenues
Remaining
%Received
001
GENERAL FUND
$ 51,056,792
$ 2,320,252
$ 2,532,339
$ 48,524,453
5%
009
LEOFF-MEDICAL INS. RESERVE
250,000
-
-
250,000
0%
016
BUILDING MAINTENANCE FUND
112,290
7,854
9,461
102,829
8%
017
MARSH RESTORATION & PRESERVATION FUND
-
-
200
(200)
0%
019
EDMONDS OPIOID RESPONSE FUND
50,000
-
-
50,000
0%
104
DRUG ENFORCEMENT FUND
4,520
127
292
4,228
6%
III
STREET FUND
2,630,600
120,069
102,407
2,528,193
4%
112
COMBINED STREET CONST/IMPROVE
4,946,998
14,713
39,657
4,907,341
1%
117
MUNICIPAL ARTS ACQUIS. FUND
87,776
1,283
4,702
83,074
5%
120
HOTEL/MOTEL TAX REVENUE FUND
124,371
7,918
9,099
115,272
7%
121
EMPLOYEE PARKING PERMIT FUND
38,900
9,050
7,182
31,718
18%
C
122
YOUTH SCHOLARSHIP FUND
1,740
29
128
1,612
7%
r-
123
TOURISM PROMOTIONAL FUND/ARTS
44,193
2,799
3,627
40,566
8%
0�
T
125
REAL ESTATE EXCISE TAX 2
1,627,900
81,737
94,784
1,533,116
6%
126
REAL ESTATE EXCISE TAX 1
1,639,520
82,970
108,305
1,531,215
7%
C
O
127
GIFTS CATALOG FUND
215,830
9,751
22,140
193,690
10%
130
CEMETERY MAINTENANCE/IMPROVEMT
152,990
23,518
11,561
141,429
8%
M
136
PARKS TRUST FUND
-
303
-
-
0%
137
CEMETERY MAINTENANCE TRUST FD
55,580
4,628
9,790
45,790
18%
138
SISTER CITY COMMISSION
5,680
37
134
5,546
2%
p
O_
140
BUSINESS IMPROVEMENT DISTRICT
79,209
29,798
23,822
55,387
30%
4)
141
AFFORDABLE AND SUPPORTIVE HOUSING FUND
65,000
7,639
8,397
56,603
13%
>%
142
EDMONDS RESCUE PLAN FUND
6,550,000
350
1,834,501
4,715,499
28%
t
C
143
TREE FUND
220,930
425
1,646
219,284
1%
O
231
2012 LT GO DEBT SERVICE FUND
310,420
-
350
310,070
0%
O
332
PARKS CAPITAL CONSTRUCTION FUND
316,240
341
30,104
286,136
10%
411
COMBINED UTILITY OPERATION
-
11,010
12,430
(12,430)
0%
421
WATER UTILITY FUND
12,314,744
986,743
1,090,370
11,224,374
9%
422
STORM UTILITY FUND
8,499,216
471,107
542,348
7,956,868
6%
d
423
SEWER/WWTP UTILITY FUND
20,019,768
1,225,668
1,476,339
18,543,429
7%
s
0
O
424
BOND RESERVE FUND
1,996,270
-
2,147
1,994,123
0%
Q
511
EQUIPMENT RENTAL FUND
2,706,730
192,708
249,620
2,457,110
9%
512
TECHNOLOGY RENTAL FUND
2,173,664
117.106
181,567
1,992.097
8%
S 118,297.871 S
5,729,932 S
8,409,447
S 109.888,424
70%
17
Packet Pg. 123
I 2.3.a I
Page 1 of 1
C TTY OF EDMO NDS
EXPENDITURES BY FUND - SUMMARY
Fund
2024 Adopted
1/31/2023
1/31/2024
Amount
No
Title
Budget
Expenditures
Expenditures
Remaining
%Spent
001
GENERAL FUND
$ 51,892,793
$ 4,868,760
$ 4,652,570
$ 47,240,223
9%
009
LEOFF-MEDICAL INS. RESERVE
367,140
27,422
25,348
341,792
7%
014
HISTORIC PRESERVATION GIFT FUND
11,701
-
-
11,701
0%
016
BUILDING MAINTENANCE FUND
1,125,274
81,158
138,032
987,242
12%
104
DRUG ENFORCEMENT FUND
39,000
-
-
39,000
0%
III
STREET FUND
2,662,492
450,818
340,359
2,322,133
13%
112
COMBINED STREET CONST/IMPROVE
4,699,705
-
-
4,699,705
0%
117
MUNICIPAL ARTS ACQUIS. FUND
282,880
475
-
282,880
0%
120
HOTEL/MOTEL TAX REVENUE FUND
131,400
3,222
-
131,400
0%
121
EMPLOYEE PARKING PERMIT FUND
26,880
-
-
26,880
0%
122
YOUTH SCHOLARSHIP FUND
3,000
-
75
2,925
3%
O
123
TOURISM PROMOTIONAL FUND/ARTS
43,400
780
-
43,400
0%
C
125
REAL ESTATE EXCISE TAX 2
2,460,645
7,348
9,268
2,451,377
0%
126
REAL ESTATE EXCISE TAX 1
1,379,355
855
1,378,500
0%
t
127
GIFTS CATALOG FUND
618,646
3,731
26,382
592,264
4%
C
130
CEMETERY MAINTENANCE/IMPROVEMT
290,559
32,414
15,594
274,965
5%
137
CEMETERY MAINTENANCE TRUST FUND
25,000
-
-
25,000
0%
3
138
SISTER CITY COMMISSION
11,900
-
-
11,900
0%
140
BUSINESS IMPROVEMENT DISTRICT
103,545
17
-
103,545
0%
142
EDMONDS RESCUE PLAN FUND
6,550,000
241,583
1,834,084
4,715,916
28%
0
143
TREE FUND
214,800
-
-
214,800
0%
CL
4)
231
2012 LT GO DEBT SERVICE FUND
310,420
-
-
310,420
0%
>,
332
PARKS CAPITAL CONSTRUCTION FUND
139,685
141,463
-
139,685
0%
421
WATER UTILITY FUND
13,568,408
688,320
503,314
13,065,094
4%
0
422
STORM UTILITY FUND
8,495,157
409,316
397,818
8,097,339
5%
423
SEWER/WWTP UTILITY FUND
22,720,243
1,340,398
1,373,009
21,347,234
6%
ca
3
C
424
BOND RESERVE FUND
1,988,830
-
-
1,988,830
0%
511
EQUIPMENT RENTAL FUND
1,976,212
423.902
148,912
1,827,300
8%
512
TECHNOLOGY RENTAL FUND
2,011,076
355,645
450,425
1,560,651
22%
d
E
S 124,150,146
$ 9,076,775
$ 9,916,045
S 114,234,101
8°/a
u
CU
Z
Q
18
Packet Pg. 124
2.3.a
Page 1 of 3
CITY OF EDMO NDS
REVENUES - GENERAL FUND
2024 Adopted
1/31/2023
1/31/2024
Amount
Title
Budget
Revenues
Revenues
Remaining
%Received
TAXES:
REAL PERSONAL / PROPERTY TAX
$ 11,327,000
$ 26,466
$ 15,003
$ 11,311,997
0%
EMS PROPERTY TAX
4,578,000
10,534
6,012
4,571,988
0%
VOTED PROPERTY TAX
500
-
1
499
0%
4 LOCAL RETAIL SALEWSE TAX 1
5 NATURAL GAS USE TAX
6 1 /10 SALES TAX LOCAL CRIM JUST
7 ELECTRIC UTILITY TAX
8 GAS UTILITY TAX
9 SOLID WASTE UTILITY TAX
10 WATERUTILITY TAX
11 SEWERUTILITY TAX
12 STORMWATER UTILITY TAX
13 T.V. CABLE UTILITY TAX
14 TELEPHONE UTILITY TAX
15 PULLTABSTAX
16 AMUSEMENT GAMES
17 LEASEHOLD EXCISE TAX
LICENSES AND PERMITS:
18 FIRE PERMITS -SPECIAL USE
19 POLICE -FINGERPRINTING
20 VENDINGMACHINE/CONCESSION
21 FRANCHISE AGREEMENT -COMCAST
22 FRANCHISE FEE-EDUCATION/GOVERNMENT
23 FRANCHISE AGREEMENT-ZIPLY FIBER
24 OLYMPIC VIEW WATER DISTRICT FRANCHISE
25 GENERAL BUSINESS LICENSE
26 DEV SERV PERMIT SURCHARGE
27 RIGHT OF WAY FRANCHISE FEE
28 BUILDINGPERMITS
29 FIRE PERMIT
30 ENGINEERING PERMIT
31 ANIMAL LICENSES
32 STREET AND CURB PERMIT
33 STREET AND CURB PERMIT W/LEASEHOLD TAX
34 OTRNON-BUSLIC/PERMITS
35 SPECIAL EVENT REVIEW
INTERGOVERNMENTAL:
36 DOJ 15-0404-0-1-754 - BULLET PROOF VEST
37 HIGH VISIBILITY ENFORCEMENT
38 STATE GRANTS- BUDGET ONLY
39 PUD PRIVILEDGE TAX
40 TRIAL COURT IMPROVEMENT
41 CJ - POPULATION
42 CRIMINAL JUSTICE -SPECIAL PROGRAMS
43 MARIJUANA EXCISE TAX DISTRIBUTION
44 DUI - CITIES
45 FIRE INS PREMIUM TAX
46 LIQUOR EXCISE TAX
47 LIQUORBOARD PROFITS
48 MISCELLANEOUS INTERLOCAL REVENUE
49 INTERLOCAL GRANTS
50 FIRST RESPONDERS FLEX FUND
12,300,000
879,231
975,066
11,324,934
8%
9,600
-
1,205
8,395
13%
1,150,000
85,227
84,922
1,065,078
7%
1,900,000
185,846
-
1,900,000
0%
895,000
125,375
88,533
806,467
10%
384,000
30,272
41,273
342,727
11 %
1,047,289
86,092
92,691
954,598
9%
1,123,814
89,935
101,472
1,022,342
9%
690,196
41,771
47,430
642,766
7%
850,000
66,442
65,149
784,851
8%
773,000
14,206
69,318
703,682
9%
80,200
19,201
7,969
72,231
10%
350
-
-
350
0%
326,000
0
-
326.000
0%
37,434,949
1,660,598
1,596,045
35,838,904
4%
250
-
-
250
0%
700
75
40
660
6%
84,500
12,476
6,128
78,372
7%
702,700
-
165,020
537,680
23%
41,000
2,796
2,497
38,503
6%
100,600
-
-
100,600
0%
450,000
101,463
-
450,000
0%
250,000
24,287
27,400
222,600
11%
80,000
6,360
9,450
70,550
12%
30,000
13,962
62,575
(32,575)
209%
160,000
32,405
8,194
151,806
5%
-
-
700
(700)
0%
-
-
10,607
(10,607)
0%
24,000
7,060
2,801
21,199
12%
50,000
5,830
(330)
50,330
-1%
-
-
1,587
(1,587)
0%
20,000
-
1,486
18,514
7%
-
1,664
-
-
0%
1,993,750
208,378
298,154
1,695,596
15%
9,000
-
-
9,000
0%
11,100
-
-
11,100
0%
20,000
-
-
20,000
0%
210,500
-
-
210,500
0%
16,740
-
-
16,740
0%
13,070
3,758
4,002
9,068
31%
50,600
13,294
14,091
36,509
28%
125,000
-
-
125,000
0%
4,500
53
1,429
3,071
32%
75,000
-
-
75,000
0%
325,000
71,223
73,033
251,967
22%
343,200
-
-
343,200
0%
-
500
-
-
0%
-
-
94,684
(94,684)
0%
1.000
-
-
1.000
0%
1,204,710
88,828
187,239
1,017,471
16%
1 2024 Local Retail Sa/es(Use Tax revenues are $95,835 higher than 2023 revenues Please also see pagespages3 & 4.
19
Packet Pg. 125
Page 2 of 3
CITY OF EDMO NDS
REVENUES - GENERAL FUND
2024 Adopted
1/31/2023
1/31/2024
Amount
Title
Budget
Revenues
Revenues
Remaining
%Received
CHARGES FOR GOODS AND SERVICES:
1 RECORD/LEGAL INSTRUMENTS
$ 3,000
$
$ 1,295
$ 1,706
43%
3 ATM SURCHARGE FEES
600
16
61
539
10%
4 CREDIT CARD FEES
1,000
1,000
0%
5 COURT RECORD SERVICES
150
150
0%
6 D/M COURT REC SER
300
300
0%
7 WARRANT PREPARATION FEE
4,000
4,000
0%
8 IT TIME PAY FEE
1,000
6
1
999
0%
9 MUNIC.-DIST. COURT CURR EXPEN
50
32
32
18
64%
10 CLERKS TIME FOR SALE OF PARKING PERMITS
25,000
-
-
25,000
0%
12 PHOTOCOPIES
100
-
20
80
20%
13 POLICE DISCLOSURE REQUESTS
1,000
-
-
1,000
0%
14 ENGINEERING FEES AND CHARGES
190,000
9,238
-
190,000
0%
15 ELECTION CANDIDATE FILING FEES
1,400
-
-
1,400
0%
16 CUSTODIAL SERVICES(SNO-ISLE)
80,000
11,605
600
79,400
1%
17 PASSPORTS AND NATURALIZATION FEES
70,000
2,380
3,320
66,680
5%
18 POLICE SERVICES SPECIAL EVENTS
30,000
-
-
30,000
0%
19 CAMPUS SAFETY-EDM. SCH. DIST.
14,000
-
-
14,000
0%
20 WOODWAY-LAW PROTECTION
210,970
56,856
-
210,970
0%
23 FIRE DISTRICT #1 STATION BILLINGS
67,000
19,794
-
67,000
0%
24 LEGAL SERVICES
1,050
-
-
1,050
0%
25 ADULT PROBATION SERVICE CHARGE
38,000
643
509
37,491
1%
26 BOOKING FEES
3,000
21
38
2,962
1%
27 FIRE CONSTRUCTION INSPECTION FEES
10,000
1,300
827
9,173
8%
28 EMERGENCY SERVICE FEES
3,500
59
111
3,389
3%
29 EMS TRANSPORT USER FEE
1,200,000
-
-
1,200,000
0%
30 FLEX FUEL PAYMENTS FROM STATIONS
5,000
303
-
5,000
0%
32 ZONING/SUBDIVISION FEE
65,600
12,960
-
65,600
0%
33 BUILDING PLAN REVIEW AND INSPECTION
940,000
40,074
67,186
872,814
7%
34 FIRE PLAN REVIEW
19,000
1,422
1,639
17,361
9%
35 PLANNING REVIEW AND INSPECTION
50,500
-
8,148
42,352
16%
36 S.E.P.A. REVIEW
6,000
740
-
6,000
0%
37 ENGINEERING PLAN REVIEW AND INSPECTION
225,000
-
12,103
212,897
5%
38 CRITICAL AREA STUDY
14,000
1,705
2,331
11,669
17%
39 GYM AND WEIGHTROOM FEES
9,500
1,138
1,315
8,185
14%
40 PROGRAM FEES
787,792
29,730
54,777
733,015
7%
41 HOLIDAY MARKET REGISTRATION FEES
5,000
455
140
4,860
3%
42 UPTOWN EVENING MARKET FEES
5,000
-
-
5,000
0%
43 WINTER MARKET FEES
5,000
4,680
4,060
940
81%
45 LUNAR NEW YEARS FEES
-
-
740
(740)
0%
46 BIRD FEST REGISTRATION FEES
1,000
-
-
1,000
0%
47 INTERFUND REIMBURSEMENT -CONTRACT SVCS
4,027,314
106,755
138,726
3.888,588
3%
8,120,826
301,913
297,980
7,822,846
4%
20
Packet Pg. 126 1
2.3.a
Page 3 of 3
CITY OF EDMO NDS
REVENUES - GENERAL FUND
2024 Adopted 1/31/2023 1/31/2024 Amount
Title Budget Revenues Revenues Remaining %Received
FINES AND PENALTIES:
1 PROOF OF VEHICLE INS PENALTY
2 TRAFFIC INFRACTION PENALTIES
3 NC TRAFFIC INFRACTION
4 TRAFFIC CAMERA INFRACTIONS
5 CRT COST FEE CODE LEG ASSESSMENT (LGA)
6 CURRENT TRAFFIC INFRACTIONS
7 NON -TRAFFIC INFRACTION PENALTIES
8 OTHER INFRACTIONS'04
9 PARKING INFRACTION PENALTIES
10 PARK/INDDISZONE
11 DWI PENALTIES
12 DUI - DP ACCT
13 CRIM CNV FEE DUI
14 DUI - DP FEE
15 CRIMINAL TRAFFIC MISDEMEANOR 8/03
16 CRIMINAL CONVICTION FEE CT
17 CRIM CONV FEE CT
18 OTHER NON-TRAF MISDEMEANOR PEN
19 OTHER NON TRAFFIC MISD. 8/03
20 COURT DV PENALTY ASSESSMENT
21 CRIMINAL CONVICTION FEE CN
22 CRIM CONV FEE CN
23 PUBLIC DEFENSE RECOUPMENT
24 BANK CHARGE FOR CONV. DEFENDANT
25 COURT COST RECOUPMENT
26 BUS. LICENSE PERMIT PENALTY
27 MISC FINES AND PENALTIES
MISCELLANEOUS:
28 INVESTMENT INTEREST
29 INTEREST ON COUNTY TAXES
30 INTEREST - COURT COLLECTIONS
31 LOAN INTEREST
32 SPACE/FACILITIESRENTALS
33 BRACKET ROOM RENTAL
34 LEASESLONG-TERM
35 DONATION/CONTRIBUTION
36 PARKSDONATIONS
37 BIRD FEST CONTRIBUTIONS
38 POLICE CONTRIBUTIONS FROM PRIV SOURCES
39 SALE OF JUNK/SALVAGE
40 SALES OF UNCLAIM PROP ERT Y
41 CONFISCATED AND FORFEITED PROPERTY
43 POLICE JUDGMENTS/RESTITUTION
45 OTHER MISC REVENUES
46 SMALL OVERPAYMENT
47 NSF FEES - PARKS & REC
48 NSF FEES - MUNICIPAL COURT
51 US BANK REBATE
TRANSFER IN:
54 TRANSFERFROM014
55 INTERFUND TRANSFER FROM 016
TOTAL GENERAL FUND REVENUE
$ 2,000 $
151 $
295 $
1,705
15%
130,000
12,824
4,310
125,690
3%
18,000
208
139
17,861
1%
500,000
-
-
500,000
0%
10,000
317
49
9,951
0%
50,000
-
6,994
43,006
14%
1,000
-
-
1,000
0%
1,500
108
-
1,500
0%
125,000
1,370
5,685
119,315
5%
2,000
-
83
1,917
4%
7,000
297
330
6,670
5%
300
-
-
300
0%
100
-
-
100
0%
1,500
87
164
1,336
11%
25,000
469
137
24,863
1%
2,000
84
103
1,897
5%
700
-
2
698
0%
100
-
-
100
0%
12,000
75
-
12,000
0%
800
-
-
800
0%
1,000
13
-
1,000
0%
200
-
-
200
0%
6,000
480
51
5,949
1%
4,000
477
654
3,346
16%
1,000
172
25
975
2%
1,000
-
-
1,000
0%
150
-
-
150
0%
-902,350
I7,
2%
527,860
19,518
25,378
502,482
5%
22,630
2,560
3,824
18,806
17%
2,430
169
49
2,381
2%
7,270
-
55,316
(48,046)
761%
194,500
1,535
6,290
188,210
3%
2,100
-
-
2,100
0%
219,192
18,869
20,922
198,270
10%
1,500
-
-
1,500
0%
5,000
500
500
4,500
10%
1,500
-
-
1,500
0%
5,000
-
231
4,769
5%
300
-
-
300
0%
3,800
34
225
3,575
6%
2,000
-
-
2,000
0%
200
-
13
187
7%
5,000
216
21,123
(16,123)
422%
100
1
-
100
0%
100
-
30
70
30%
150
-
150
0%
8.500
-
-
8,500
0%
1,009,132
4 ,402
133,900
7 ,232
13%
5,801 - - 5,801 0%
385,274 - - 385,274 0%
391,075 - - 391,075 0%
S 51,056,792 S 2,320,252 S 2,532,339 S48,524,453 5%
21
Packet Pg. 127
Page 1 of 6
C ITY OF EDMO NDS
EXPENDITURES BY FUND - DETAIL
2024 Adopted
1/31/2023
1/31/2024
Amount
Title
Budget
Expenditures
Expenditures
Remaining
%Spent
GENERAL FUND EXPENDITURES (001)
1 SALARIES AND WAGES
$ 23,095,383
$ 1,976,003
$ 1,868,992
$ 21,226,391
8%
2 OVERTIME
643,080
75,728
116,684
526,396
18%
3 HOLIDAY BUY BACK
294,001
-
-
294,001
0%
4 BENEFITS
7,868,408
662,382
740,340
7,128,068
9%
5 UNIFORMS
126,931
14,473
13,909
113,022
11%
6 PENSION AND DISABILITY PAYMENTS
141,668
7,431
2,932
138,736
2%
7 SUPPLIES
677,285
10,870
13,474
663,811
2%
8 SMALL EQUIPMENT
239,791
5,535
1,388
238,403
1%
9 PROFESSIONAL SERVICES
10,918,360
1,040,754
414,539
10,503,821
4%
10 COMMUNICATIONS
236,105
1,967
11,170
224,935
5%
11 TRAVEL
51,187
4,360
695
50,492
1%
12 EXCISE TAXES
30,000
1,365
2,725
27,275
9%
13 RENTALILEASE
3,913,541
218,020
315,916
3,597,625
8%
14 INSURANCE
883,686
625,650
910,495
(26,809)
103%
15 UTILITIES
663,800
55,926
56,826
606,974
9%
16 REPAIRS & MAINTENANCE
388,300
73,337
81,539
306,761
21%
17 MISCELLANEOUS
424,867
94,959
66,908
357,959
16%
18 INTERGOVERNMENTAL PAYMENTS
25,000
-
-
25,000
0%
19 INTERFUND SUBSIDIES
650,000
-
-
650,000
0%
20 BUILDINGS
-
-
34,040
(34,040)
0%
21 PRINCIPAL PAYMENT LEASES
300,000
-
300,000
0%
22 GENERAL OBLIGATION BOND PRINCIPAL
197,120
-
-
197,120
0%
23 INTEREST ON LONG-TERM EXTERNAL DEBT
123,780
-
123,780
0%
24 OTHER INTEREST & DEBT SERVICE COSTS
500
-
-
500
0%
51,892,793
S 4,86
7
7, 4 +
LEO FF-MEDICAL INS. RESERVE (009)
25 BENEFITS
$
206,650
$
24,129 $
22,055
$ 184,595
11%
26 PENSION AND DISABILITY PAYMENTS
152,990
3,293
3,293
149,697
2%
27 PROFESSIONAL SERVICES
7,000
-
-
7,000
0%
28 MISCELLANEOUS
500
-
-
500
0%
�67,140
S
27,422 S
25,348
S 341,792
7%
HISTORIC PRESERVATION GIFTFUND (014)
29 SUPPLIES
$
100
$
- $
-
$ 100
0%
30 PROFESSIONAL SERVICES
200
200
0%
31 MISCELLANEOUS
5,600
5,600
0%
32 INTERFUND SUBSIDIES
5,801
5,801
0%
I 1,701
s 11,701
%
BUILDING MAINTENANCE FUND (016)
33 PROFESSIONAL SERVICES
$
-
$
- $
138,529
$ (138,529) $
-
34 REPAIR & MAINTENANCE
740,000
81,158
-
740,000
0%
35 INTERFUND SUBSIDIES
385,274
-
-
385,274
0%
36 CONST RUCT IONS P ROJECT S
-
-
(497)
497
0%
5, 74
S
81,158 S
138,032
S 987,242
/o
DRUG INFO RCEMENTFUND (104)
37 SMALL EQUIPMENT
$
39,000
$
- $
-
$ 39,000
0%
0 0
O
Q
d
t
C
O
C
to
O
CL
O
(L'
t
c
O
to
c
CU
C
a�
E
t
0
O
Q
22
Packet Pg. 128
2.3.a
Page 2 of 6
CITY OF EDMO NDS
EXPENDITURES BY FUND - DETAIL
Title
2024 Adopted
Budget
1/31/2023
Expenditures
1/31/2024
Expenditures
Amount
Remaining
%Spent
S TREET FUND (l l 1)
1 SALARIES AND WAGES
$
974,440
$
224,815
$
83,744
$
890,696
9%
2 OVERTIME
38,400
4,014
5,827
32,573
15%
3 BENEFITS
444,582
61,857
36,399
408,183
8%
4 UNIFORMS
6,000
-
1,768
4,232
29%
5 SUPPLIES
263,000
1,407
6,685
256,315
3%
6 SMALL EQUIPMENT
90,000
-
-
90,000
0%
7 PROFESSIONAL SERVICES
23,210
4,184
34
23,176
0%
8 COMMUNICATIONS
4,500
128
557
3,943
12%
9 TRAVEL
1,000
-
-
1,000
0%
10 RENTAL/LEASE
311,630
25,244
25,815
285,815
8%
11 INSURANCE
167,350
126,467
172,427
(5,077)
103%
12 UTILITIES
273,730
2,703
3,633
270,097
1%
13 REPAIRS& MAINTENANCE
52,000
-
2,044
49,956
4%
14 MISCELLANEOUS
8,000
-
1,427
6,573
18%
15 GENERAL OBLIGATION BOND PRINCIPAL
4,420
-
-
4,420
0%
16 INTEREST
230
-
-
230
0%
$
2,662,492
$
450,818
$
340,359
$
2,322,133
13%
COMBINED STREEI'CONST/IMPROVE(112)
17 PROFESSIONAL SERVICES
$
3,319,856
$
-
$
-
$
3,319,856
0%
18 REPAIRS&MAINTENANCE
541,167
-
-
541,167
0%
19 INTERFUND SUBSIDIES
320,002
-
-
320,002
0%
20 LAND
375,000
-
-
375,000
0%
21 CONSTRUCTION PROJECTS
89,000
-
-
89,000
0%
22 INTERGOVERNMENTAL LOANS
54,070
-
54,070
0%
23 INTEREST
610
-
610
0%
$
4,699,705
$
-
$
-
$
4,699,705
0%
MUNICH'ALARTS ACQUIS. FUND (117)
24 SUPPLIES
$
4,700
$
475
$
$
4,700
0%
25 SMALL EQUIPMENT
1,700
-
-
1,700
0%
26 PROFESSIONAL SERVICES
266,500
-
266,500
0%
27 TRAVEL
80
-
80
0%
28 RENTAL/LEASE
3,000
-
3,000
0%
29 REPAIRS& MAINTENANCE
300
-
-
300
0%
30 MISCELLANEOUS
6,600
-
-
6,600
0%
S
282,880
$
475
$
-
$
282,880
0%
HO TEL/MO TEL TAX REVENUE FUND (120)
31 PROFESSIONAL SERVICES
$
127,400
$
3,222
$
-
$
127,400
0%
32 TNTERFUND SUBSIDIES
4,000
-
-
4,000
0%
S
131,400
S
3,222
S
-
$
131,400
0%
EMPLO YEE PARKING PERMIT FUND (121)
33 SUPPLIES
$
1,790
$
-
$
-
$
1,790
0%
34 PROFESSIONAL SERVICES
25,090
-
-
25,090
0%
S
26,880
S
-
S
-
$
26,880
0%
YOUTH SCHOLARSHIP FUND (122)
35 MISCELLANEOUS
$
3,000
S
-
$
75
$
2,925
3%
$
3,000
S
-
S
75
5
2,925
3%
TO URISM PRO MO TIONAL FUND/ARTS (123)
36 PROFESSIONAL SERVICES
$
43,400
$
780
$
$
43,400
0%
S
43,400
S
780
S
$
43,400
0%
23
Packet Pg. 129
Page 3 of 6
CITY OF EDMO NDS
EXPENDITURES BY FUND - DETAIL
2024 Adopted
1/31/2023
1/31/2024
Amount
Title
Budget
Expenditures
Expenditures
Remaining
%Spent
REAL. ESTATE EXCISETAX 2 (125)
I PROFESSIONAL SERVICES
$ 760,293
$ -
$ 2,685
S 757,608
0%
2 REPAIRS& MAINTENANCE
1.132.992
7,349
5,928
1,127,064
1%
3 INTERFUND SUBSIDIES
1,060
-
-
1,060
0%
4 CONSTRUCTION PROJECTS
566,300
655
565,645
0%
$ 2,460,645
5 7,348
S 9,268
S 2,451,377
0%
REAL ESTATE EXCISETAX 1 (126)
5 PROFESSIONAL SERVICES
6 REPAIRS & MAINTENANCE
7 INTERFUND SUBSIDIES
8 GENERAL OBLIGATION BONDS
9 INTEREST
GIFTS CATALOG FUND (127)
10 SALARIES AND WAGES
11 OVERTIME
12 BENEFITS
13 UNIFORMS
14 SUPPLIES
15 SMALL EQUIPMENT
16 PROFESSIONAL SERVICES
17 RENT AL/LEASE
18 MISCELLANEOUS
19 INTERFUND SUBSIDIES
CEMETERY MAINTENANCFAMPRO VEMFNT (130)
20 SALARIES AND WAGES
21 OVERTIME
22 BENEFITS
23 UNIFORMS
24 SUPPLIES
25 SUPPLIES PURCHASED FOR INVENTORY/RESALE
26 PROFESSIONAL SERVICES
27 COMMUNICATIONS
28 TRAVEL
29 RENTAL/LEASE
30 UTILITIES
31 REPAIRS& MAINTENANCE
32 MISCELLANEOUS
C EVIE EERY MAINTENANC E TRUS T FUND (13 7)
33 SMALL EQUIPMENT
SISTER CITY COMMISSION (138)
34 SUPPLIES
35 TRAVEL
36 MISCELLANEOUS
BUSINESS IMPRO VEVIENT DISTRICT FUND (140)
37 SUPPLIES
38 PROFESSIONAL SERVICES
39 MISCELLANEOUS
EDMONDS RESCUEPLAN FUND (142)
40 PROFESSIONAL SERVICES
TREE FUND (143)
41 SUPPLIES
42 PROFESSIONAL SERVICES
43 LAND
$
295,291
$
$
855
$
294,436
0%
680,288
-
680,288
0%
141,026
141,026
0%
165,700
165,700
0%
97,050
-
97,050
0%
$
1,379,355
5
5
855
S
1,378,500
0%
$
269,146
$
$
16,046
$
253,100
6%
-
-
0%
127,000
-
6,469
120,531
5%
2,240
-
-
2,240
0%
170,000
2,272
2,478
167,522
1%
500
-
-
500
0%
32,500
-
-
32,500
0%
16,660
1,459
1,388
15,272
8%
600
-
-
600
0%
-
0%
S
618,646
$
3.731
S
26,382
S
592,264
4%
$
152,092
$
23,988
$
10,101
$
141,991
7%
3,500
-
234
3,266
7%
82,132
6,277
1,627
80,505
2%
11120
-
-
1,120
0%
7,000
164
1,765
5,235
25%
20,000
1,006
18,994
5%
4,200
793
-
4,200
0%
1,700
144
144
1,556
8%
500
-
-
500
0%
8,250
795
709
7,541
9%
5,565
253
9
5,556
0%
500
-
-
500
0%
4,000
-
-
4,000
0%
$
290,559
S
32,414
S
15,594
$
274,965
5%
$
25,000
$
$
$
25,000
0%
25,000
S
S
- S
25,000
06/.
$
1,500
4,500
5,900
$
- $
- $
-
-
1,500
4,500
5,900
0%
0%
0%
$
11,900
$
S
- $
11,900
0%
$
10,750
88,425
4,370
$
$
17
$
10,750
88,425
4,370
0%
0%
0%
103,545
17 S
4
/o
$
6,550.000
$
241,583 $
1,834,084 $
4,715,916
28°/
y
6,5 5 1,000
S
241,583 S
1.834.084
6
$
1,000
14,800
199,000
$
- $
- $
-
-
1,000
14,800
199,000
00/(
0°/
00/(
S214,800
S
24
Packet Pg. 130
2.3.a
Page 4 of 6
C ITY O F EDMO NDS
EXPENDITURES BY FUND - DETAIL
2024 Adopted 1/31/2023 1/31/2024 Amount
Title Budget Expenditures Expenditures Remaining %Spcnt
2012 LTGO DEBTSERVIC FUND (231)
1 GENERAL OBLIGATION BOND $ 240,000 $ $ $ 240,000 0%
2 INTEREST 70.420 70.420 0%
10.42(i S - b $ 310,420 0%
PARKS CONSTRUCTION FUND (332)
3 PROFESSIONAL SERVICES
4 CONSTRUCTION PROJECTS
5 GENERAL OBLIGATION BONDS
6 INTEREST
WATER FUND (421)
7 SALARIES AND WAGES
8 OVERTIME
9 BENEFIT S
10 UNIFORMS
11 SUPPLIES
12 WATER PURCHASED FOR RESALE
13 SUPPLIES PURCHASED FOR INVENTORY/RESALE
14 SMALL EQUIPMENT
15 PROFESSIONAL SERVICES
16 COMMUNICATIONS
17 TRAVEL
18 EXCISE TAXES
19 RENTAL/LEASE
20INSURANCE
21 UTILITIES
22 REPAIRS & MAINTENANCE
23 MISCELLANEOUS
24 INTERFUND SUBSIDIES
25 CONSTRUCTION PROJECTS
26 GENERAL OBLIGATION BONDS
27 REVENUE BONDS
28 INTERGOVERNMENTAL LOANS
29 INTEREST
STO RM FUND (422)
30 SALARIES AND WAGES
31 OVERTIME
32 BENEFITS
33 UNIFORMS
34 SUPPLIES
35 SMALL EQUIPMENT
36 PROFESSIONAL SERVICES
37 COMMUNICATIONS
38 TRAVEL
39 EXCISE TAXES
40 RENTAL/LEASE
41 INSURANCE
42 UTILITES
43 REPAIR&MAINTENANCE
44 MISCELLANEOUS
45 INTERFUND SUBSIDIES
46 CONSTRUCTION PROJECTS
47 GENERAL OBLIGATION BONDS
48 REVENUE BONDS
49 INTERGOVERNMENTAL LOANS
50 INTEREST
$
-
$
2,938
$
$
-
U
39,535
138,526
-
39,535
0%
55,000
-
-
55,000
0%
45,150
-
-
45,150
0%
$
139,685
b
141,463
$
-
5
139,685
0%
$
1,126,709
$
167,623
$
71,935
$
1,054,774
6%
24,000
253
2,814
21,186
12%
505,643
43,274
35,399
470,244
7%
4,000
551
1,311
2,689
33%
150,000
227
8,308
141,692
6%
2,398,000
-
-
2,398,000
0%
180,000
11,871
19,471
160,529
11 %
22,460
-
-
22,460
0%
2,707,750
28,111
43,408
2,664,342
2%
35,000
1,095
2,633
32,367
8%
200
-
-
200
0%
1,487,289
118,468
125,737
1,361,552
8%
189,052
15,339
15,428
173,624
8%
135,625
225,379
139,740
(4,115)
103%
35,000
2,993
3,574
31,426
10%
216,130
11,338
10,508
205,622
5%
203,600
14,514
23,049
180,551
11%
642,130
-
-
642,130
0%
2,955,000
47,283
-
2,955,000
0%
2,970
-
-
2,970
0%
353,590
-
-
353,590
0%
25,840
-
25,840
0%
168,420
-
-
168,420
0%
$
13,568,408
$
688,320
$
503,314
S
13,065,094
4%
$
1,013,672
$
198,434
$
104,456
$
909,216
10%
26,000
1,415
150
25,850
1%
413,048
51,177
33,425
379,623
8%
6,500
-
2,118
4,382
33%
46,000
1,000
801
45,199
2%
4,000
-
-
4,000
0%
3,200,481
27,176
34,811
3,165,670
1%
3,200
24
467
2,733
15%
41300
-
-
4,300
0%
754,196
47,866
53,689
700,507
7%
314,693
23,976
25,762
288,931
8%
110,972
31,680
114,339
(3,367)
1030/c
13,125
1,603
2,016
11,109
15%
289,130
10,796
10,508
278,622
4%
240,300
14,169
15,277
225,023
6%
279,560
-
-
279,560
00/(
1,345,000
-
-
1,345,000
00/c
108,240
-
-
108,240
00/c
168,500
-
-
168,500
00/(
61,600
-
61,600
00/(
92,640
-
92,640
00/(
S
8,495.157
$
409,316
S
397,818
S
8,097,339
50A
O
Q
O
t
C
O
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cc
3
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O
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25
Park+ Pn 149
2.3.a
Page 5 of 6
CITY OF EDMO NDS
EXPENDITURES BY FUND - DETAIL
2024 Adopted
1/31/2023
1/31/2024
Amount
Title
Budget
Expenditures
Expenditures
Remaining
%Spent
SEWER FUND (423)
1 SALARIES AND WAGES
$ 3,111,357
$ 440,524
$ 259,732
$ 2,851,625
8%
2 OVERTIME
130,000
23,412
18,966
111,034
15%
3 BENEFITS
1,199,819
122,066
93,702
1,106,117
8%
4 UNIFORMS
11,500
888
1,601
9,899
14%
5 SUPPLIES
571,500
46,146
15,224
556,276
3%
6 FUEL CONSUMED
20,000
-
-
20,000
0%
7 SUPPLIES PURCHASED FOR INV OR RESALE
5,000
-
-
5,000
0%
8 SMALL EQUIPMENT
75,000
642
-
75,000
0%
9 PROFESSIONAL SERVICES
4,811,500
93,468
76,216
4,735,284
2%
10 COMMUNICATIONS
48,000
1,476
3,309
44,691
7%
11 TRAVEL
5,000
-
-
5,000
0%
12 EXCISE TAXES
1,338,814
105,265
119,748
1,219,066
9%
13 RENTAL/LEASE
438,031
25,451
35,861
402,170
8%
14 INSURANCE
553,988
360,663
570,794
(16,806)
103%
15 UTILITIES
1,972,060
74,201
81,190
1,890,870
4%
16 REPAIR & MAINTENANCE
600,630
19,061
65,067
535,563
11%
17 MISCELLANEOUS
338,350
27,134
31,597
306,753
9%
18 INTERFUND SUBSIDIES
3,066,814
-
-
3,066,814
0%
19 MACHINERY/EQUIPMENT
1,580,000
-
-
1,580,000
0%
20 CONSTRUCTION PROJECTS
2,202,000
-
-
2,202,000
0%
21 GENERAL OBLIGATION BONDS
130,980
-
130,980
0%
22 REVENUE BONDS
57,930
-
-
57,930
0%
23 INTERGOVERNMENTAL LOANS
104,730
-
-
104,730
0%
24 INTEREST
347,240
-
-
347,240
0%
S 22,720,243
S 1,340,398
S 1,373,009
$ 21,347,234
6%
BOND RESERVE FUND (424)
25 REVENUE BONDS $ 875,020 $ - $ - $ 875,020 0%
26 INTEREST 1,113,810 - - 1,113,810 0%
$ 1,988,830 5 - $ - S 1,98 ,930 0%
26
Packet Pg. 132
I 2.3.a I
Page 6 of 6
CITY OF EDMO NDS
EXPENDITURES BY FUND - DETAIL
2024 Adopted
1/31/2023
1/31/2024
Amount
Title
Budget
Expenditures
Expenditures
Remaining
%Spent
EQUIPMENT RENTAL FUND (511)
1 SALARIES AND WAGES
$ 425,142
$ 75,618
$ 36,332
$ 388,810
9%
2 OVERTIME
2,000
-
-
2,000
0%
3 BENEFITS
155,443
18,292
13,058
142,385
8%
4 UNIFORMS
1,500
80
65
1,435
4%
5 SUPPLIES
149,120
2,146
8,366
140,754
6%
6 FUEL CONSUMED
1,000
-
-
1,000
0%
7 SUPPLIES PURCHASED FOR INVENTORY/RESALE
458,880
50,024
7,635
451,245
2%
8 SMALL EQUIPMENT
58,000
-
-
58,000
0%
9 PROFESSIONAL SERVICES
47,500
192
138
47,362
0%
10 COMMUNICATIONS
3,000
138
346
2,654
12%
11 TRAVEL
1,000
-
-
1,000
0%
12 RENTAL/LEASE
16,830
1,399
1,343
15,487
8%
13 INSURANCE
70,797
50,178
72,881
(2,084)
103%
14 UTILITIES
24,000
2,681
2,793
21,207
12%
15 REP AIRS & MAINTENANCE
60,000
3,851
5,320
54,680
9%
16 MISCELLANEOUS
12,000
623
635
11,365
5%
17 MACHINERY/EQUIPMENT
490,000
218,681
-
490,000
0%
5 1,976,212
S 423,902
5 148.912
$ 1,827,300
8%
TECHNOLOGY RENTAL FUND (512)
18 SALARIES AND WAGES
$ 654,329 $
40,955 $
48,279
$ 606,050
7%
19 OVERTIME
2,000
-
-
2,000
0%
20 BENEFITS
226,298
12,215
19,193
207,105
8%
21 SUPPLIES
5,000
78
126
4,874
3%
22 SMALL EQUIPMENT
220,300
(1,447)
8,750
211,550
4%
23 PROFESSIONAL SERVICES
61,860
-
-
61,860
0%
24 COMMUNICATIONS
58,770
4,213
2,952
55,818
5%
25 TRAVEL
1,500
-
-
1,500
0%
26 RENTAL/LEASE
5,190
137
183
5,008
4%
27 REPAIRS & MAINTENANCE
664,229
299,495
370,941
293,288
56%
28 MISCELLANEOUS
55,600
-
-
55,600
0%
29 MACHINERY/EQUIPMENT
56,000
-
-
56,000
0%
S 2,011,076 S
355,645 $
450,425
S 1.560.651
TOTAL EXPENDITURE ALL FUNDS
S 124,150,146 5
9.076,775 S
9,916,045
S 114,234,101
Q
27
Packet Pg. 133
Title
CITY OF EDMO NDS
EXPENDITURES - GENERAL FUND - BY DEPARTMENT IN SUMMARY
2024 Adopted 1/31/2023 1/31/2024 Amount
Budget Expenditures Expenditures Remaining
2.3.a
Page 1 of 1
%Spent
CITY COUNCIL
$ 479,286
$ 33,649
$ 40,574 $
438,712
8%
OFFICE OF MAYOR
490,875
32,343
33,901
456,974
7%
HUMAN RESOURCES
1,222,438
93,116
129,960
1,092,478
11%
MUNICIPAL COURT
1,811,176
114,975
136,698
1,674,478
8%
ADMINISTRATIVE SERVICES
2,825,453
253,437
274,596
2,550,857
10%
CITY ATTORNEY
1,161,780
24,570
-
1,161,780
0%
NON -DEPARTMENTAL
6,857,495
1,642,894
1,244,387
5,613,108
18%
POLICE SERVICES
17,478,540
1,041,369
1,320,779
16,157,761
8%
SATELLITE OFFICE
172,105
8,786
11,538
160,567
7%
COMMUNITY SERVICESIECONOMIC DEV. 1,162,045
84,200
84,711
1,077,334
7%
PLANNING& DEVELOPMENT
4,251,605
286,492
269,177
3,982,428
6%
HUMAN SERVICES PROGRAM
320,940
11,995
13,526
307,414
4%
PARKS & RECREATION
6,520,597
589,720
453,277
6,067,320
7%
PUBLIC WORKS
4,500,279
316,193
358,635
4,141,644
8%
FACILITIES MAINTENANCE
2,638,179
335,018
280,811
2,357,368
11%
$ 51,892,793
$ 4,868,760
$ 4,652,570 $
47,240,223
9%
CITY OF EDMO NDS
EXPENDITURES - UTILITY- BY FUND IN SUMMARY
Title
2024 Adopted
Budget
1/31/2023
Expenditures
1/31/2024
Expenditures
Amount
Remaining
%Spent
WATER UTILITYFUND
$ 13,568,408
$ 688,320
$ 503,314
$ 13,065,094
4%
STORM UTILITY FUND
8,495,157
409,316
397,818
8,097,339
5%
SEWER/WWTP UTILITY FUND
22,720,243
1,340,398
1,373,009
21,347,234
6%
BOND RESERVE FUND
1,988,830
-
-
1,988,830
0%
$ 46,772,638
$ 2,438,035
$ 2,274,141
$ 44,498,497
5%
28
Packet Pg. 134
2.3.a
Page 1 of 2
C ITY O F EDMO NDS
EXPENDITURES - GENERAL FUND - BY DEPARTMENT IN DETAIL
2024 Adopted
1/31/2023
1/31/2024
Amount
Title
Budget
Expenditures
Expenditures
Remaining
%Spent
C ITY C O UNC H,
SALARIES AND WAGES
$ 253,724
$ 18,593
$ 21,296
$ 232,428
8%
BENEFITS
106,715
8,644
14,970
91,745
14%
SUPPLIES
1,462
69
81
1,381
6%
SERVICES
117385
6,342
4.227
113.158
4%
$ 479,286
$ 33,649
$ 40,574
$ 438,712
8%.
O FFIC E O F MAYO R
SALARIES AND WAGES
BENEFIT S
SUPPLIES
SERVICES
HUMAN RESOURCES
SALARIES AND WAGES
BENEFIT S
SUPPLIES
SERVICES
MUNICIPAL C O URT
SALARIES AND WAGES
BENEFITS
SUPPLIES
SERVICES
ADMINISTRATIVE SERVIC ES
SALARIES AND WAGES
BENEFIT S
SUPPLIES
SERVICES
CITY ATTO RNEY
SERVICES
NON -DEPARTMENTAL
SALARIES AND WAGES
BENEFIT S
SUPPLIES
SERVICES
INTERFUND SUBSIDIES
DEBT SERVICE - PRINCIPAL
DEBT SERVICE- INTEREST
POLICESERVICES
SALARIES AND WAGES
BENEFIT S
SUPPLIES
SERVICES
DEBT SERVICE - PRINCIPAL
SATELLITE O FFIC E
SALARIES AND WAGES
BENEFIT S
SUPPLIES
SERVICES
$ 302,809 $
21,423 $
23,423 $
279,386
8%
96,402
7,476
7,629
88,773
8%
1,097
265
104
993
9%
90,567
3.179
2,744
87.823
3%
$ 490,875 $
32,343 $
33,901 $
456,974
7%
$ 752,306 $
43,217 $
53,124 $
699,182
7%
241,822
15,560
20,351
221,471
8%
10,026
-
172
9,854
2%
218,284
34.340
56.313
161,971
26%
$ 1,222,438 $
93,116 $
129,960 $
1,092,478
11%
$ 1,137,525 $
80,791 $
84,316 $
1,053,209
7%
349,462
25,506
28,789
320,673
8%
11,600
-
-
11,600
0%
312,589
8,677
23.592
288,997
8%
$ 1,811,176 $
114,975 $
136,698 $
1,674,478
8%
$ 1,886,891 $
134,674 $
142,090 $
1,744,801
8%
539,701
39,141
45,251
494,450
8%
11,965
105
1,539
10,426
13%
386.896
79,518
85.716
301.180
22%
$ 2,825,453 $
253.437 $
274,596 $
2.550.857
10%
$ 1.161.780 $ 24.570 $ $ 1,161,780 0%
$ 1,161,780 $ 24,570 $ $ 1,161,780 0%
$ (2,100,000) $ - $
- $ (2,100,000)
0%
(805,332) 16,905
4,628 (809,960)
0%
5,000 -
- 5,000
0%
8,761,427 1,625,989
1,239,759 7,521,668
14%
675,000 -
- 675,000
0%
197,120 -
- 197,120
0%
124,280
124.280
0%
$ 6,857,495 $ 1,642.894 $
1,244,387 $ 5,613,108
18%
$ 11,085,782 $
667,834 $
834,888 $
10,250,894
8%
3,799,900
245,766
317,002
3,482,898
8%
276,426
1,852
2,161
274,265
1%
2,016,432
125,917
166,728
1,849,704
8%
300,000
-
300,000
0%
$ 17,478,540 $
1,041,369 $
1,320.779 $
16,157,761
8%
45,689 $ 3,640 $ 3,807 $ 41,882 8%
31,570 692 2,844 28,726 9%
12,000 - - 12,000 0%
82,846 4,454 4,886 77,960 6%
$ 172,105 $ 8,786 $ 11,538 $ 160,567 7%
29
Packet Pg. 135
I 2.3.a I
Page 2 of 2
CITY OF EDMO NDS
EXPENDITURES - GENERAL FUND - BY DEPARTMFNTIN DETAIL
2024 Adopted
1/31/2023
1/31/2024
Amount
Title
Budget
Expenditures
Expenditures
Remaining
%Spent
COMMUNITY SERVICES/ECON DEV.
SALARIES AND WAGES
$ 673,413
$ 52,358
$ 56,531 $
616,882
8%
BENEFIT S
168,009
13,447
16,770
151,239
10%
SUPPLIES
233
-
72
161
31%
SERVICES
320,390
18,396
11.338
309,052
4%
$ 1,162,045
$ 84,200
$ 84,711 $
1,077,334
7%
PLANNING & DEVELOPMENT
SALARIES AND WAGES
BENEFIT S
SUPPLIES
SERVICES
HUMAN SERVICES PROGRAM
SALARIES AND WAGES
BENEFITS
SUPPLIES
SERVICES
PARKS & REC REATIO N
SALARIES AND WAGES
BENEFIT S
SUPPLIES
SERVICES
PUBLIC WORKS ADMINISTRATION
SALARIES AND WAGES
BENEFIT S
SUPPLIES
SERVICES
FACILITIES MAINTENANCE
SALARIES AND WAGES
BENEFIT S
SUPPLIES
SERVICES
MACHINERY/EQUIPMENT
$ 2,394,050 $
182,385 $
166,784 $
2,227,266
7%
870,471
64,899
63,741
806,730
7%
15,879
171
-
15,879
0%
971,205
39,038
38.652
932,553
4%
$ 4,251,605 $
286,492 $
269,177 $
3,982,428
6%
$ 121,472 $ 9,290 $ 10,203 $ 111,269 8%
34,330 2,670 3,107 31,223 9%
10,968 - - 10,968 0%
154,170 35 217 153,953 0%
11,995 S 13,526 $ 307,414 4%
$ 3,394,355 $
403,588 $
256,349 $
3,138,006
8%
1,200,364
109,575
104,654
1,095,710
9%
433,980
3,630
5,797
428,183
1%
1,491,898
72,926
86.477
1,405,421
6%
$ 6,520,597 $
589,720 $
453,277 $
6,067,320
7%
$ 422,973 $
34,412 $
46,434 $
376,540
11%
128,003
10,535
15,259
112,744
12%
8,740
2,684
635
8,105
7%
162,710
7,144
13,227
149,483
8%
$ 722,426 $
54,775 $
75,554 $
646,872
10%
1,132,741
217,058
99,554
1,033,187
9%
488,518
59,632
41,977
446,541
9%
115,500
7,629
4,301
111,199
4%
901,420
50,699
100,940
800,480
11%
34,040
(34,040)
0%
$ 21638,179 $
335,018 $
280,811 $
2,357,368
11%
ENGINEERING
SALARIES AND WAGES
$ 2,528,734 $
182,468 $
186,877 $
2,341,857
7%
BENEFITS
887,072
63,838
70,208
816,864
8%
SUPPLIES
2,200
-
-
2,200
0%
SERVICES
359,847
15,113
25,996
333,851
7%
$ 3,777,853 $
261,418 $
283.081 $
3,494,772
7%
TOTAL GENERAL FUND EXPENDITURES
$ 51,892,793 $
4,868,760 $
4,652,570 $
47,240,223
9%
30
Packet Pg. 136
2.3.a
GENERAL FUND SUBFUNDS OVERVIEW
BALANCES
CHANGE IN FUND BALANCES
GENERAL FUND
--- ESTIMATES ----
---- ACTUAL ----
SUBFUNDS
1 /31 /2024 1 /31 /2024
C-1 YTD
Fund Balance Cash Balance
009-Leoff-Medical Ins. Reserve
123,405 123,405
(25,348)
011-Risk Management Reserve Fund
- -
-
012-Contingency Reserve Fund
2,228,672 2,228,672
-
014-Historic Preservation Gift Fund
8,944 8,944
016-Building Maintenance
3,681,471 3,681,471
(128,572)
017 - Marsh Restoration & Preservation
853,795 853,795
200
018 - Edmonds Homelessness Response Fd
200,000 200,000
0
- CL
019 - Opioid Response Fund
74,119 74,119
Total General Fund Subfunds
$ 7,170,406 $ 7,170,406
$ - $ (153,719)
c
0
There are no interfund loans outstanding at this time.
3
C
fE
GOVERNMENTAL FUNDS OVERVIEW o
CL
0
BALANCES
CHANGE IN FUND BALANCES
GOVERNMENTAL
---- ESTIMATES ----
---- ACTUAL 0 ----
3
FUNDS
1 /31 /2024 1 /31 /2024
(0-1 YTD
Fund Balance Cash Balance
c
m
General Fund Subfunds
$ 7,170,406 $ 7,170,406
$ (153,719) t
Special Revenue
13,768,651 20,079,880
55,556
Capital Projects - Fund 332
168,037 159,273
r
30,104 Q
Total
$ 21,107,094 $ 27,409,559
$ - $ (68,060:
Please note that these revenues and expenses occur within annual cycles.
This Interim Report is not adjusted for accruals or those annual cycles.
31
Packet Pg. 137
2.3.a
SPECIAL REVENUE FUNDS OVERVIEW
BALANCES
CHANGE IN FUND BALANCES
GOVERNMENTAL
---- ESTIMATES ---
--- ACTUAL --
SPECIAL REVENUE
1 /31 /2024 1 /31 /2024
Q1 YTD
Fund Balance Cash Balance
104 - Drug Enforcement Fund
$ 40,610 $ 40,610
$ 292
111 - Street Fund
(376,998) (345,917)
(237,952)
112 - Com bined Street Const/Im prove
1,853,251 1,218,217
39,657
117 - Municipal Arts Acquis. Fund
653,483 653,483
4,702
120 - Hotel/Motel Tax Revenue Fund
142,482 142,482
9,099
121 - Employee Parking Permit Fund
89,919 89,919
7,182
122 - Youth Scholarship Fund
17,691 17,766
53
123 -Tourism Promotional Fund/Arts
134,817 134,817
3,627 a-
125 - Real Estate Tax
2,059,779 2,111,199
85,516 IY
126 - Real Estate Excise Tax 1 "
4,014,080 4,014,080
107,450 %
127 - Gifts Catalog Fund
3,095,630 3,095,630
(4,242) _
0
130- Cemetery Maintenance/improvement
189,541 189,561
(4,033)
137 - Cemetery Maintenance Trust Fund
1,206,330 1,206,330
9,790
138 - Sister City Com mission
18,571 18,571
134
140 - Business Improvement Disrict
62,170 62,170
23,822
141 -Affordable and Supportive Housing Fd
309,127 309,127
8,397
142 - Edmonds Rescue Plan Fund
37,349 6,901,015
417 0
0
143 - Tree Fund
220,820 220,820
1,646
Total Special Revenue
$ 13,768,651 $ 20,079,880
$ $ 55,556 >,
*$200,000 fund balance in Fund 126 has been reserved for Marsh Restoration Funding, as well as $1,000,000 w
of the
for the purchase of Open Space. 0
ENTERPRISE FUNDS OVERVIEW
_
_
E
BALANCES CHANGE IN FUND BALANCES
ENTERPRISE --- ESTIMATES ---- --- ACTUAL --- Q
FUNDS 1 /31 /2024 1 /31 /2024 011 YTD
Fund Balance Cash Balance
421 -Water Utility Fund
$ 33,272,522 $ 10,373,086
$ 587,057
422 -Storm Utility Fund*
18,810,709 6,863,386
144,529
423 - Sewer/ W TP Utility Fund
61,366,899 15,265,882
103,330
424 - Bond Reserve Fund
864,341 864,341
2,147
411 - Combined Utility Operation
12,430 70,425
12,430
Total Enterprise Funds
$ 114,326,901 $ 33,437,120
$ $ 849,493
*$250,000 of the Storm Utility Fund Balance has been reserved for Marsh Restoration Funding.
*Please note that these revenues and expenses occur within annual cycles.
This Interim Report is not adjusted for accruals or those annual cycles.
32
Packet Pg. T8
2.3.a
INTERNAL SERVICE FUNDS OVERVIEW
BALANCES CHANGE IN FUND BALANCES
INTERNAL SERVICE --- ESTIMATES -- --- ACTUAL ---
FUNDS 1 /31 /2024 1 /31 /2024 CL11 YTD
Fund Balance Cash Balance
511 - Equipment Rental Fund $ 9,584,878 $ 5,298,063 $ 100,707
512 -Technology Rental Fund 465,059 169,176 (268,858)
Total Internal Service Funds $ 10,049,937 $ 5,467,239 $ (168,150)
Q
*Please note that these revenues and expenses occur within annual cycles.
This Interim Report is not adjusted for accruals or those annual cycles.
33
— Packet Pg. 139
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Packet Pg. 140
INVESTMENT PORTFOLIO SUMMARY
City of Edmonds Investment Portfolio Detail
As of January
31, 2024
Years
Agency/
Issuer
Investment
Type
Purchase
Price
to
Maturity
Par
Value
Market
Value
Maturity
Date
Coupon
Rate
FHLB
Bonds
954,866
0.19
1,000,000
990,515
04/10/24
0.35%
FM
Bonds
996,082
0.38
1,000,000
990,360
06/17/24
2.80%
FNMA
Bonds
992,693
0.42
1,000,000
985,417
07/02/24
1 75%
FFCB
Bonds
1,960,906
062
2,000,000
1,980,007
09/13/24
3.50%
FHLB
Bonds
950,774
0.80
1,000,000
966,143
11/18/24
0.90%
Spokane County WA
Bonds
207,260
0.84
200,000
195,326
12/01/24
2 10%
First Financial - Waterfront Center
CD
245,000
091
245,000
245,000
12/27/24
2.47%
FHLMC
Bonds
974,798
1.12
1,000,000
988,290
03/13/25
3 75%
Farmer Mac
Bonds
1,995,088
1.21
2,000,000
1,987,416
04/17/25
425%
FHLB
Bonds
969,524
1.49
1,000,000
986,091
07/28/25
3.60%
US Treasury Note
Note
964,597
1 54
1,000,000
979,414
08/15/25
313%
FFCB
Bonds
1,982,692
1.85
2,000,000
1,986,639
12/08/25
4.13%
Farmer Mac
Bonds
1,994,172
2.01
2,000,000
1,984,322
02/02/26
3.95%
FHLMC
Bonds
993,661
2.47
1,115,000
1,020,976
07/22/26
0.83%
Farmer Mac
Bonds
2,057,309
2.80
2,305,000
2,117,373
11/17/26
1 15%
First Financial - ECA
CD
2,803,516
3.79
2,803,516
2,803,516
11/15/27
2.96%
TOTAL SECURITIES
21,042,939
1.40
21,668,516
21,206,805
Washington State Local Gov't Investment Pool
27,481,195
27,481,195
Demand
5 42%
Snohorrish County Local Gov't Investment
Pool
11,529,768
11,529,768
Demand
2.44%
TOTAL PORTFOLIO
$
60,679,479 $
60,217,768
Issuer Diversification
Spokane
County
Farmer WA, 1%
Mac, 29°!
FFCB, 18%
FFII:IVIG,
Cash and Investment Balances Checking,
(in $ Millions)
_55.61, 8%
Note,
$1.00, 2% Bonds,
$17.62 ,
CD's, $3.05 27°o
,5%
County
LGIP,
11.,
17%
34
Packet Pg. 141 1
INVESTMENT PORTFOLIO SUMMARY
2.3.a
$2,000,000
$1,500, 000
$1,000, 000
$500,000
$-
Annual Interest Income
$1 236 875
$947,931
2019 2020
72
2021 2022 2023
$224,417
_jw
YTD 2024
I
35
Packet Pg. 142