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

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Refundings City staff and the city’s financial advisor, monitor the municipal bond market for opportunities to obtain interest savings by refunding outstanding debt. As a general rule, the present value savings of a particular refunding should exceed 5% of the refunded maturities. CBP 5. APITAL UDGET OLICIES The objective of the capital budget policies is to ensure that the City maintains its public infrastructure in the most efficient manner. Capital improvement program Within the resources available each fiscal year, the City shall maintain capital assets and infrastructure at a sufficient level to protect the City’s investment to minimize future replacement and maintenance costs, and to maintain service levels. As part of the annual budget process, the City shall prepare and adopt a five-year Capital Improvement Program, which shall detail each capital project, the estimated cost, and funding source. When considering new projects, related costs such as operations and maintenance costs are evaluated along with capital expenditures to assess affordability prior to proposal of the projects. An adopted priority system shall be used to rank recommended projects. Capital Project summaries include the projects and funds necessary over the next five years as part of overall long-term capital planning. Major sources of funding for capital projects are Contributions from operating funds, debt issuance, Federal and State Grants, and surpluses in fund balances/retained earnings. Project costs are capitalized and added to the City’s Fixed Assets. If a project does not meet the criteria for capitalization, the costs will be treated as operating expenses and expensed as incurred. Operating budget impacts Operating expenditures (expenses) shall be programmed to include the cost of implementing the Capital Improvement Program and shall reflect estimates of all associated personal expenditures (expenses) and operating costs attributable to the capital outlays. Repair and replacement The City shall maintain its physical assets at a level adequate to protect the City's capital investments and minimize future maintenance and replacement costs. The capital budget shall provide for the adequate maintenance, repair and orderly replacement of the capital plant and equipment from current revenues where possible. Financing There are three basic methods of financing capital requirements: •Funds may be budgeted from current revenues •Purchases may be financed through surplus unreserved/undesignated fund balance/retained earnings balances, subject to policy •Debt may be issued in accordance with policy (Items financed with debt must have useful lives that are less than the maturity of the debt.) AP 6. CCOUNTING OLICIES The objectives of the accounting policies is to ensure that allfinancial transactions of the City are carried out in accordance to the dictates of the City Charter, State Statutes, and the principles of sound financial management.