 Appendix A – Summary of Financial Policies

APPENDIX A

Summary of Financial Policies

Finance Staff are committed to adopting and implementing financial best practices as laid out by the Government Finance Officers Association. Currently, the staff is developing, revising, and proposing new policies to the City Manager and City Commission.

Unlike private entities, there are no “bottom line” profit figures that assess the financial performance of the City, nor are there any authoritative standards by with City officials can judge themselves. Instead, the City Commission and the City management team work together to set goals and objectives that measure the performance and effectiveness of municipal programs and services.

Financial policies can be used to establish similar goals and targets for the City’s financial operations so that the City Commission and City Officials can monitor how well the City is performing. Formal financial policies provide a consistent approach to financial strategies and set forth guidelines to measure financial performance and future budgetary programs.

The following is a summary of policies adopted by the City Commission. The full text of each policy can be found on the City’s website.

 Budgetary Policy  Budgetary Reserve Policy  Capital Asset Policy  Economic Development Policy  Debt Management Policy  Procurement Policy  Revenue Control Policy  Investment Policy

Budget Policy

The City of Leavenworth adheres to State statutes, which requires all local governments to operate with a balanced budget. A balanced budget is defined as a budget in which projected revenues and available unencumbered cash are equal to expenditures.

Budgetary Reserve Policy

The City adheres to the Budgetary Reserve Policy to establish a framework to ensure sound financial management, reduce the need for issuing debt through effective use of reserves, and maintaining two months of expenditures level as budgetary reserves.

Capital Asset Policy

The City of Leavenworth defines capital assets as tangible and intangible assets with a value exceeding $5,000 and a useful life exceeding one business cycle. Capital assets are those items with an acquisition cost of less than $5,000, but which are particularly at risk or vulnerable to theft or loss. The City’s capital assets are resources used to provide public services to the community.

Debt Management Policy

The City uses debt financing for capital improvement projects and equipment purchases. The City traditionally uses Temporary Notes and General Obligation Bonds to finance the development of infrastructure.

Procurement Policy

The City’s procurement policy is based upon Kansas State Statutes and City Ordinances. The purpose of this policy is to provide guidelines to all City personnel, establishing authority and limits for the purchase of materials, supplies, equipment, and services by the City.

Revenue Control Policy

The City uses the revenue control policy to maintain effective revenue controls and cash management practices, including compliance with federal, state and local requirements and industry standards.

Economic Development Policy

The purpose of this policy is to establish the official policy of the City of Leavenworth for the granting of economic development incentives, including uses in accordance with the provisions of of the Constitution of the State of Kansas. The appropriate purpose and use of incentives is to broaden and diversify the tax base, create new job opportunities for the citizens of the City of Leavenworth, and promote the economic growth and welfare of the City of Leavenworth.

Investment Policy

Kansas statutes authorize cities to invest cash that is not immediately needed for their intended purposes.

The City’s investment policy incorporates the types of investments that are authorized by state statutes. However, during the past year, some of the local banks offered investments in Certificates of Deposit Registry Service (CDARS)-type programs. The CDARS-type program and other qualifying reciprocal deposit programs allows for a participating institution to arrange for the allocation of deposits in excess of the Federal Deposit Insurance Corporation (FDIC) insurance limit of $250,000 among other participating institutions in amounts that would be eligible for FDIC coverage.