11-12-12 Regular Meeting of La Porte City Council

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FINANCIAL MANAGEMENTPOLICIES OBP 1. PERATING UDGET OLICIES The objectives of the operating budget policies are to maintain adequate service levels at reasonable costs by following sound financial management practices. Balanced budget The city shall annually adopt a balanced budget where revenues are equal to, or exceed, operating expenditures.Any increase in expenses, decrease in revenues, or combination of the two that would result in a budget imbalance will require budget revision, rather thanspending unappropriated surpluses or designate reserves to support ongoing operations. Any year end operating surpluses will revert to unappropriated balances for use in maintaining reserve levels set by policy and the balance will be available for capital projects and/or “one-time only” General Fund expenditures. Cost Recovery Government Budgets are under constant pressure to stay within limits. This forces local government to seek ways to lower costs associated with delivering services. The City of La Porteis very proactive in its drive to identify methods for reducing and/or recovering costs. The City staff performs internal reviews of operations to define those services or products in which an element of cost recovery can be implemented, and at what level: full cost recovery, partial cost recovery or no cost recovery. The City has defined four major elements of cost recovery, which include reducing costs, increasing returns, researching alternative service providers and seeking alternative funding sources. When evaluating a reduction in costs, the City will consider downsizing (staff reduction), operating efficiencies, outsourcing and in-kind services as possible alternatives. When implementing cost recovery by way of increasing returns, the City will focus on user fees, fee increases, increasing markets, new products and advertising. Alternative service providers include, but are not limited to, privatization, nonprofit spin-offs and volunteers. Alternative funding sources include foundations, grants, dedicated taxes (hotel/motel tax), corporate underwriting and sponsorships Annually, as part of the budget/planning process, each departmentwillreport their achievements in the area of cost recovery to management and to the City Council. Borrowing for operating expenditures (expenses ) The City shall not use debt or bond financing to fund current operating expenditures (expenses).