City of La Porte Operating Budget 1996-1997

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I I I I I I I I I I I I I I I I I I I . The Utility Debt Service Fund also is designed for constant payments. The Utility Debt Service Fund receives its revenue from the Utility Fund. The Utility Fund also makes payments to the General Debt Service Fund for tax supported debt issued by entities annexed by the City where the bonds were sold for improvements to the annexed areas water and sewer system. The relationship of these payments is such where the payments from the Utility Fund to the two debt service funds equals a constant $1,200,000 each year for the next five years, then it will decrease to $1 million each year. This fund also has future debt issuances built into its plan. . The La Porte Area Water Authority is also designed to provide for an even revenue stream. This fund needs $800,000 each year to service its debt. All three debt service funds use fund balance in a manner to allow for level annual revenues. CASH MANAGEMENT The City drastically changed its cash management practices in fiscal year 1991-92. A new employee was hired and given the responsibility of monitoring the City's cash position. An investment policy was created and approved by City Council. An analysis of past operational cash flows was prepared. Using these tools, the City changed its philosophy from investing short term to matching our investments with cash flows and rate yields. The objectives of the Investment Policy are safety, liquidity, yield and risk of loss. A performance indicator was selected to measure the City's performance. RISK MANAGEMENT Liability insurance premiums are expected to remain constant for the new fiscal year. The premiums for 1996 are 23.5% lower than they were in 1988, when the City increased efforts aimed at reducing premiums. Workers compensation premiums are projected to decrease slightly for the new year, but this follows a 50% percent decrease in the previous year. The City attributes both of these favorable rates to the impact of internal review committees which have been active during the past seven years. LONG RANGE GOALS In June of 1988, the City started into motion the largest City wide planning effort ever to occur in the area. The effort involved over 100 citizens. The process took in excess of one year to complete and was coordinated by City staff. After countless committee meetings and various workshops, City Council adopted the plan, known as "Visions 89" on August 23, 1989. The executive summary from the Goals Statement is found starting on page 1-23. FINANCIAL MANAGEMENT POLICIES The City Council of the City of La Porte has adopted Financial Management Policies. These policies are used as guidelines by the City in financial decisions. A copy of the policy is found in section 9. Since the policy is a stand alone document, the City has elected to leave its Table of Contents with the document.. 1-13