New Search
continued relevance and to identify any gaps that should be addressed with new policies. The <br />results of the review should be shazed with the governing board during the review of the <br />proposed budget. <br />Policy categories that should be considered for development, adoption and regular review <br />are as follows: <br />Financial Planning Policies <br />These policies address both the need for along-term view and the fundamental principle of a <br />balanced budget. At a minimum, jurisdictions should have polices that support: <br />1. Balanced Budget - A jurisdiction should adopt a policy(s) that defines a balanced operating <br />budget, encourages commitment to a balanced budget under normal circumstances, and <br />provides for disclosure when a deviation from a balanced operating budget is planned or <br />when it occurs. (NACSLB Practice 4.5) <br />2. Long-Range Planning - A jurisdiction should adopt a policy(s) that supports a fmancial <br />planning process that assesses the long-term financial implications of current and proposed <br />operating and capital budgets, budget policies, cash management and investment policies, <br />programs and assumptions. (NACSLB Element 9, GFOA Recommended Practice) <br />3. Asset Inventory - A jurisdiction should adopt a policy(s) to inventory and assess the <br />condition of all major capital assets. This information should be used to plan for the ongoing <br />financial commitments required to maximize the public's benefit. (NACSLB Practice 2.2) <br />Revenue Policies <br />Understanding the revenue stream is essential to prudent planning. Most of these polices seek <br />stability to avoid potential service disruptions caused by revenue shortfalls. At a minimum <br />jurisdictions should have policies that address: <br />1. Revenue Diversification - A jurisdiction should adopt a policy(s) that encourages a <br />diversity of revenue sources in order to improve the ability to handle fluctuations in <br />individual sources. (NACSLB Practice 4.6) <br />2. Fees and Charges - A jurisdiction should adopt policy(s) that identify the manner in which <br />fees and charges aze set and the extent to which they cover the cost of the service provided. <br />(NACSLB Practice 4.2) <br />3. Use of One-time Revenues - A jurisdiction should adopt a policy(s) discouraging the use of <br />one-time revenues for ongoing expenditures. (NACSLB Practice 4.4) <br />4. Use of Unpredictable Revenues - A jurisdiction should adopt a policy(s) on the collection <br />and use of major revenue sources it considers unpredictable, (NASCLB Practice 4.4a) <br />Expenditure Policies <br />The expenditures of jurisdictions define the ongoing public service commitments. Prudent <br />expenditure planning and accountability will ensure fiscal stability. At a minimum jurisdictions <br />should have policies that address: <br />1. Debt Capacity, Issuance, and Management - A jurisdiction should adopt a policy(s) that <br />specifies appropriate use for debt and identifies the maximum amount of debt and debt <br />2005 MWMC Financial Plan -Appendix III Page 43 <br />