Financial Overview

Financial Overview

As of December 31, 2019, the City of Leavenworth has received the Government Finance Officers’ Association (GFOA) Certificate of Achievement for Excellence in Financial Reporting for twenty-five consecutive years for its Comprehensive Annual Financial Report (CAFR). The City has submitted its 2019 CAFR to the GFOA for review.

Additionally, the City received the Government Finance Officers’ Association (GFOA) Distinguished Budget Presentation Award for the second time for its 2020 Budget. The City will submit its 2021 budget to the GFOA for review.

Effective financial management involves oversight from several people within the organization, as well as, strong internal controls. Financial policies help strengthen internal controls by providing guidelines for daily operations, decisions, and long-term financial planning. These policies are designed to ensure financial stability, provide adequate funding for services, and to maintain public facilities.

Financial policies are developed by the Finance staff, reviewed by the City Manager and are approved by the City Commission to ensure the City is functioning in a financially responsible manner and is prepared for changes in economic conditions. Once in place, financial policies need to be reviewed and updated on a regular basis to ensure that they are still relevant to the organization’s activities and processes.

The Commission has reviewed and approved the following policies:

February 2017: The Commission approved an Economic Development Incentive Policy, which identifies types of incentives the City will offer and the eligibility requirements for each type of incentive. The policy also identifies the methods of evaluation used for each project to determine eligibility. This policy encourages consistency in the application of economic development incentives.

March 2017: The City’s Budget Policy formalizes the City’s commitment to a balanced budget, a fund-type of budget format that provides three years of applicable revenues and expenditures presented in financial statement manner. The City’s basis of budgetary accounting conforms to Kansas Cash Basis Budget Laws.

March 2017: The City’s Budgetary Reserve Policy was previously approved in December 2003. The policy addressed reserves only for the General Fund and established that goal as 8.33% of annual General Fund expenditures. The new policy incorporates the GFOA recommended minimum of two months of revenues or expenditures as the City’s minimum reserve levels and includes the CIP Sales Tax, County Wide Sales Tax, Sewer, and Refuse Funds. The new policy specifies the acceptable uses of excess unassigned reserve balances, mandates periodic reviews and updates, as necessary.

March 2017: The City Commission adopted Charter Ordinance 56, which became effective March 1, 2016, exempting the City from the provisions of K.S.A. 13-1024a related to paying for infrastructure improvements. This was the first step toward implementing a debt management policy, which the Commission adopted in March 2017. The City’s current Debt Management Policy addresses debt limitations, and includes specific ratios, which the City will not exceed, debt structures, post-issuance disclosures, when the City will issue debt, and the repayment schedule. The policy also mandates periodic review and updates as necessary.

March 2017: Prior to the adoption of the current Revenue Control Policy, the City only had informal policies. The current Revenue Control policy addresses segregation of revenue related duties; revenue diversification that reduces the impact of short-term fluctuations in a revenue source; reviewing and updating the effect of fluctuations in property values and mill levies; identifying and obtaining additional revenue sources, and using forecasting and revenue ratios to identify whether rates and user fees are adequate.

September 2019: In September of 2019, the City Commission approved the current purchasing policy, which the City utilizes. Since adoption, there have been changes in operations and purchasing that have made aspects of the policy obsolete. In addition, items previously omitted have been added. At the request of the Commission, Finance staff revised the policy. They include increasing the threshold for construction bonds, changes to the Affirmative Action procedure, the addition of Request for Information policies, and ethics section.

October 2020: In October 2020, the Commission approved a revised Investment Policy in order to expand the types of investments the City may participate in to include Certificates of Deposit Registry Service (CDARS)‐type of investments. It also identifies other additional types of allowable investments. The main objectives of safety, liquidity, yield, and local investments remain unchanged, as do collateralization requirements and other internal control measures.

During 2020-2021, the Finance staff will propose the following policies: Cash Management, Capital Planning, and Grant Management for consideration and approval by the Commission. Summaries of these policies can be found on page 317.