HomeMy WebLinkAboutCity Council Committees - Operations - 05/15/2012 (3) •
KEN T
WASH NOTON
Operations Committee Agenda
Councilmembers: Dennis Higgins * Jamie Perry * Les Thomas, Chair
May 15, 2012
4:00 p.m.
Item Description Action Speaker Time Page
1. Approval of Minutes YES 1
Dated May 1, 2012
2. Approval of Check Summary Report YES
dated April 16-30, 2012
3. Temporary Flood Protection YES Kurt Hanson 5
Structure Extension - Adopt
4. Financial Policies Ordinance - Approve YES Jamie Perry 13
Unless otherwise noted, the Operations Committee meets at 4:00 p.m. on the first and third
Tuesday of each month. Council Chambers East, Kent City Hall, 220 4th Avenue South, Kent,
98032-5895. Dates and times are subject to change. For information please contact Pam Clark at
(253) 856-5723.
Any person requiring a disability accommodation should contact the City Clerk's Office at
(253) 856-5725 in advance.
For TDD relay service call the Washington Telecommunications Relay Service at
1-800-833-6388.
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KENT
WASHINGTON
OPERATIONS COMMITTEE MINUTES
May 1, 2012
Committee Members Present: Dennis Higgins, Jamie Perry, Les Thomas, Chair
The meeting was called to order by L. Thomas at 4:05 p.m.
1. APPROVAL OF MINUTES DATED APRIL 17, 2012.
J. Perry moved to approve the Operations Committee minutes dated April 17, 2012.
D. Higgins seconded the motion, which passed 3-0.
2. APPROVAL OF CHECK SUMMARY REPORT DATED APRIL 1 THROUGH APRIL 15,
2012
D. Higgins moved to recommend Council approve the Check Summary Reports dated April 1
through April 15, 2012. J. Perry seconded the motion, which passed 3-0.
3. 2013-14 BIENNIAL BUDGET KICKOFF PREPARATION. (INFORMATION ONLY)
Staff is beginning to outline the process for the development of the 2013-14 Biennial Budget. As
part of the process, the City Council will hold a Biennial Budget Kickoff Workshop on May 15th.
J Hodgson, Chief Administrative Officer, distributed a list of issues for discussion for the
Committee's review and priority, including revenue resources and how they are used to forecast.
This is the first time a budget kickoff workshop with City Council has been conducted.
4. BUDGET POLICIES UPDATE (INFORMATION ONLY)
Council member Jamie Perry has been working with Administration and Finance to review and
update the City's budget policies. A draft with proposed changes was distributed to the Committee
for review and discussion. A key item as explained by B. Nachlinger is to create two separate
reserves in addition to the cash flow reserve of 10%. This will cover any natural disaster, such as a
levee breach or extreme snow storm.
S. SUMMARY FINANCIAL REPORT AS OF MARCH 31, 2012 (INFORMATION ONLY)
Based on information available through March, the ending fund balance is projected to be $1,555,286 or
2.7% of the expenditure budget.
Many revenue sources, including utility tax, building permits and plan check fees are showing an
improvement over past years. Overall revenues are estimated to end the year very near budget. Highlights
include:
• Tax revenues, including Sales Tax and Utility Tax, are expected to come in very near budget.
• The Washington State budget cut Liquor Excise Tax distributions to local governments for their
fiscal year July 2012 thru June 2013. As a result, these revenues are expected to come in about
$284,800 under budget; $221,000 reflected in the General Fund and $63,800 in Annexation. Staff
is currently evaluating options to compensate for the lost revenues.
• Building Permits and Plan Check Fees combined thru March are up 42.4%from the same time last
year, which continues to be a positive sign.
2
Operations Committee Minutes
May 1, 2012
Page: 2
Current projections end the year at about $451,374 or 0.7% below the budget. A continued lag in hiring is
expected to contribute towards expenditures coming in below budget.
The meeting was adjourned at 4:37 p.m. by L. Thomas.
Pamela Clark
Operations Committee Secretary
3
2013/14 City Council Budget Kickoff Workshop
Issues for discussion:
Calendar
Strategic Plan (Programs and Projects) June update
Revenue Forecasts
Key elements of the updated budget policies (sustainability)
2 year budget cycle (year 1 and year 2 processes)
Issues on the horizon
Health Care
State Legislature/budget
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5
ECONOMIC & COMMUNITY DEVELOPMENT DEPARTMENT
440 Ben Wolters, Director
Phone: 253-856-5703
N'147KEN T Fax: 253-856-6454
WASHING—ON
Address: 220 Fourth Avenue S.
Kent, WA. 98032-5895
May 14, 2012
To: Operations Committee
From: Ben Wolters, Economic & Community Development Director
Regarding: Temporary Flood Protection Structures—Permitting Deadline Ordinance
MOTION: Recommend adoption of the proposed ordinance amending Ordinance
No. 3996 to extend the waiver of certain permitting requirements for temporary
structures constructed for flood protection purposes to July 1, 2013.
SUMMARY:
On September 15, 2009, the Kent City Council adopted Ordinance No. 3932,
temporarily waiving certain permitting requirements for temporary structures
constructed for flood protection purposes constructed because of the threat posed
by the diminished flood control capabilities of the Howard Hanson Dam.
Ordinance No. 3932, as amended, allowed property owners and tenants within the
City to install temporary flood protection structures without a permit, if those
structures were removed by July 1, 2012. The proposed ordinance extends that
time period by one year. If the structures are not removed by that date, the
ordinance provides that a permit would be required.
The U.S. Army Corps of Engineers has now satisfactorily made repairs to the
Howard Hanson Dam, and the flood threat is no greater now than it was before
problems were first discovered with the dam. However, for the city of Kent and for
some property owners, additional time is required to remove temporary flood
protection structures during the drier summer and fall seasons in this calendar
year. Accordingly, it is appropriate to extend the time for removal of temporary
flood control structures for one additional year.
BUDGET IMPACT: None.
P AClvllAlotons-BlueSheets\TempFloodPFotecStrucWFes-FMendPennitDeedllne2013-1otornSheet doc:
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6
ORDINANCE NO.
AN ORDINANCE of the City Council of the
City of Kent, Washington, amending Ordinance No.
3996 to extend the waiver of certain permitting
requirements for temporary structures constructed
for flood protection purposes due to the threat
posed by the diminished flood control capabilities
of the Howard Hanson Dam from July 1, 2012, to
July 1, 2013.
RECITALS
A. On September 15, 2009, the Kent City Council adopted
Ordinance No. 3932 temporarily waiving certain permitting requirements
for temporary structures constructed for flood protection purposes due to
the threat posed by the diminished flood control capabilities of the Howard
Hanson Dam. Ordinance No. 3933 was adopted shortly thereafter to
further clarify when the permitting requirements for temporary flood
protection structures would be waived under Ordinance No. 3932.
Ordinance No. 3959 was adopted June 1, 2010 extending the waiver
provisions of the prior ordinances to July 1, 2011. Ordinance No. 3996
was adopted April 19, 2011 extending the waiver provisions of the prior
ordinances to July 1, 2012.
1 Amending Ordinance No. 3996
Re. Permitting of
Temporary Flood Protection Structures
7
B. These ordinances provided that property owners and tenants
within the City of Kent could install temporary flood protection structures
without a permit, if those structures were removed by July 1, 2012. If the
structures are not removed by that date, the ordinances provide that a
permit for those structures would need to be obtained.
C. The U.S. Army Corps of Engineers has now satisfactorily
made repairs to the Howard Hanson Dam, and the flood threat is no
greater now than it was before problems were discovered with the dam.
However, for the city of Kent and for some property owners, additional
time is required to remove temporary flood protection structures during
the drier summer and fall seasons in this calendar year. Accordingly, it is
appropriate to extend the time for removal of temporary flood control
structures for one additional year.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF KENT,
WASHINGTON, DOES HEREBY ORDAIN AS FOLLOWS:
ORDINANCE
Ordinance No. 3996, is amended as follows:
SECTION 1, — Recitals Adopted as Findings. In addition to the
findings adopted by the Kent City Council in Ordinance Nos. 3932, 3933,
ate 3959, and 3996, the City Council finds the additional recitals listed
above to be true and correct in all respects and adopts and incorporates
them as its findings for the purposes of this ordinance, GFdoigaigee Ne
3933,, GFdoigaigee Pie. 3932, al9d GFdoigaigee Pie. 3959. The City Council
further finds that the threat of flooding caused by the structural
weaknesses in the Howard Hanson Dam abutment constituteed a real and
2 Amending Ordinance No. 3996
Re: Permitting of
Temporary Flood Protection Structures
8
imminent emergency that poseed a threat to the health, safety, and
welfare of the persons and property in and near the Green River Valley.
at this tinge, and n9ay On fact not OCCUF at a", the thFeat neveFtheless
rengainS reall, d ingn9inent, and it is apffOffiate and advisable to take
SECTION 2, — Definitions. The following definitions apply to the
words and phrases used in this ordinance:
A. Temporary Flood Protection Structure. "Temporary Flood Protection
Structure" means any sandbag, water-filled sack, earthen berm, concrete
block, or similar material, or any combination of these materials, placed or
installed within ten feet (10') of, or as close as is reasonably practicable to,
the outside perimeter of any critical facility for the sole purpose of keeping
potential Green River floodwaters from invading the critical facility.
B. Critical Facility. "Critical Facility" includes the following:
1. Any permanent building primarily used as a business or
residence that is regularly staffed or is lived in on a daily basis;
2. Any structure used to store bulk fuel or bulk hazardous or
dangerous wastes;
3. Any structure or building owned or operated by a public entity
whose preservation is necessary for public safety purposes; and
4. Any building or other structure necessary for the ongoing
operation of any public or government franchised sewer, water,
stormwater, power, gas, or telecommunications utility.
3 Amending Ordinance No. 3996
Re: Permitting of
Temporary Flood Protection Structures
9
Garages, sheds, or other outbuildings, parking areas, landscaping areas,
and other similar areas or structures are specifically excluded from this
definition.
SECTION 3, — Scope, Purpose, & Applicability.
A. This iswas an unanticipated emergency that posesd an imminent
threat to public health, safety, and the environment within the Green River
Valley that requiresd immediate action within a time too short to follow
established permit application and approval procedures.
B. The purpose of tkisthese ordinances +swas to provide property
owners the ability to protect life and property in advance of any flood,
should one occur, while making best efforts to control the placement of
these structures in a manner that attemptsed to maintain adequate
protection for flood storage, erosion and sedimentation control, and other
environmental and regulatory controls.
C. Temporary Flood Protection Structures placed or installed to protect
critical facilities located within the Green River Valley areremain exempt
from the City's permitting application and approval process for those
structures if the Temporary Flood Protection Structure is removed no later
than July 1, 201-23. While the permitting procedural requirements for
Temporary Flood Protection Structures are waived, these structures must
still comply with the substantive requirements of all applicable federal,
state, and local regulations, specifically including, without limitation, the
State Environmental Policy Act, the Shoreline Master Program, the
International Building and Residential Codes, or other International and
Uniform Codes, the Kent Zoning Code, and the Kent Design and
Construction Standards.
4 Amending Ordinance No. 3996
Re: Permitting of
Temporary Flood Protection Structures
10
D. Temporary Flood Protection Structures must be both maintainable
and removable; structures subject to degradation, deterioration, abnormal
wear and tear, or damage (for example and without limitation, from
deficient design, inappropriate fabrics, ultraviolet light, or excessive
erosion from flood waters or flood debris) are not Temporary Flood
Protection Structures for the purposes of this ordinance.
E. All Temporary Flood Protection Structures must be removed and all
materials used to place or install the structures must be properly and
legally disposed of no later than July 1, 201-23. Any Temporary Flood
Protection Structure that remains on site beyond July 1, 201-23, will
automatically be deemed a permanent flood protection device, structure,
or installation, will automatically be deemed subject to this ordinance and
to all applicable regulatory and permitting requirements, and will
automatically be deemed in violation of this ordinance and the Kent City
Code for failure to obtain necessary permits and approvals, enforceable
under chapter 1.04 of the Kent City Code and subject to civil and criminal
penalties
F. All flood protection structures that do not meet these requirements
for Temporary Flood Protection Structures must be properly permitted
under city, state, and federal regulatory requirements. HeweveF beeabis
this is an engeFgency and because the thFeat of fleeding is i
i
SECTION 4, — Severability. If any one or more section, subsection,
or sentence of this ordinance is held to be unconstitutional or invalid, that
decision shall not affect the validity of the remaining portion of this
5 Amending Ordinance No. 3996
Re: Permitting of
Temporary Flood Protection Structures
11
ordinance and that remaining portion shall maintain its full force and
effect.
SECTION 5, — Corrections by City Clerk or Code Reviser. Upon
approval of the City Attorney, the City Clerk and the code reviser are
authorized to make necessary corrections to this ordinance, including the
correction of clerical errors; ordinance section, or subsection numbering, or
references to other local state or federal laws, codes, rules, or regulations.
SECTION 6, — Effective Date. This ordinance shall take effect and
be in force thirty (30) days from and after its passage as provided by law
SUZETTE COOKE, MAYOR
ATTEST:
BRENDA JACOBER, CITY CLERK
APPROVED AS TO FORM:
TOM BRUBAKER, CITY ATTORNEY
PASSED: day of 2012.
APPROVED: day of 2012.
PUBLISHED: day of 2012.
6 Amending Ordinance No. 3996
Re: Permitting of
Temporary Flood Protection Structures
12
I hereby certify that this is a true copy of Ordinance No.
passed by the City Council of the City of Kent, Washington, and approved
by the Mayor of the City of Kent as hereon indicated.
(SEAL)
BRENDA JACOBER, CITY CLERK
P:\Civil\Ordinance\Flood Protection Measures-EAend 2013.doc
7 Amending Ordinance No. 3996
Re: Permitting of
Temporary Flood Protection Structures
13
KENT
WASHING-ON
FINANCE ADMINISTRATION
R. J. Nachlinger, Director
220 Fourth Avenue S.
Kent, WA. 98032
Fax: 253-856-6255
Phone: 253-856-5264
DATE: May 15, 2012
TO: Kent City Council Operations Committee
FROM: R. J. Nachlinger, Finance Director
THROUGH: John Hodgson, Chief Administrative Officer
SUBJECT: Approval of Financial Policies
MOTION: I move to recommend that the Operations Committee approve the
recommended Financial Policies and forward this matter to the City Council
meeting of June 5, 2012.
SUMMARY: Council member Jamie Perry and staff reviewed the current Financial
Policies and are proposing modifications to them. These revised policies bring the policy
document more in alignment with the City Council Strategic Plan. The City Council will
have more involvement in the budget development process. These policies also mandate
the creation of reserves to bring the City into more of a sustainable funding structure.
BUDGET IMPACT: The City budget will be adjusted to allow for the creation of the
reserve accounts mandated by the policies and will be incorporated into the biennial
budget process.
EXHIBITS: Financial Policy Draft
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FINANCIAL POLICIES
FINANCIAL STABILITY POLICIES
General Fund Reserves—The target forthe General Fund Contingency Reserve is 10%of the General
Fund budgeted expenditures or an amount that will maintain sufficient cash flow, whichever is greater.
The policy is designed to provide a fiscal cushion, meet seasonal cash flow shortfalls. If the General fund
reserves goes below 10%, based on the ending fund balance on December 31 of each year, the City
shall take steps to rebuild the reserve within the next fiscal year.
Strategic Opportunities Fund — The City shall annually transfer any amount in excess..of the 10%
contingency reserve in the General Fund to this fund. This fund will act as if it.is a permanent fund
except that it maybe used to take advantage of investment opportunities thatmayarise, This fund shall
only be utilized by an appropriation approved by City Council. In the event any of this fund is used in an
economic downturn to stabilize city finances, such appropriation shall be repaid to the fund annually over
the next three years.
Capital Reserve Fund —The City shall annually budget a minimum of$250,000 infix a reserve for the
general capital needs of the City. Such fund may be used for unanticipated capital_needs typically
resulting from a natural disaster. This fund is designated to act as a stabilization"fund for general capital
and may, with a specific appropriation by City Council, be used for investment in revenue producing
capital projects. This fund shall be enumerated in the budget and accrue each year.
Contingency for Unanticipated Costs — The City will annually budget no less than $500,000 in the
General fund for unanticipated costs This amount, if unused, will be transferred in to!a.project account
until the amount reaches a maximum of$.1500,000. If the fund or any portion of it is used, the City shall
restore the balance to its $1,500,000 within three years.
Equipment Replacement Fund-The City will maintain an Equipment Replacement Fund adequately
funded to replace a fleet of vehicles and other heavy equipment at then scheduled replacement time.
Technology capital replacement shall be funded through departmental charges and other revenues
sufficient to replace both<hardware and software at the end of their useful life.
Self Insurance Program - The City will maintain an actuarially sound self insurance program for
unemployment, worker's compensation, liability insurance and health insurance. All of the insurance
programs are accounted for as separate.cost centers within one parent insurance fund. Beginning in
2011, the liability insurance fund rs funded throagh`corr mercial insurance for claims over $250,000,
Pension Funds- The City wilhtnaintain an actuarially sound Firemen's Relief and Pension Fund.
Maintenance and Operational Planning 7,,Maintenance of current assets shall take priority over new
capital projects whenever possible+ The City Council shall ensure that there are stable sources of
revenue to fund ongoingmaintenance'of'capital assets. Before any new capital asset is approved, staff
shall present an estimate of the life-cycle and maintenance cost. Such costs shall be included in the
budgets for the following yaars. The City Council shall not approve of new capital projects unless there is
fundjn,g for the ongoing maintenance of the asset. The City shall maintain an inventory of all City assets
and`casts of maintenance=of those assets.
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OPERATING BUDGET POLICIES
City Target Issues-The City Council will update its strategic plan in the early spring of each year. The
staff will use this plan for development of the following year's budget priorities and the next biennial
budget.
Budget Kickoff—The Mayor and City Council shall meet in the Spring of even numbered years_tq plan
the following biennial budget and agree on the anticipated revenues on which the preliminary boogetwill
be based. The City Council shall review revenue estimates and preview potential changes to revenues.
The City Council shall then approve the revenue amount that will be used by the Mayor to form the initial
preliminary budget. The Mayor and City Council will meet additionally in late Summer tore-review the.
revenue estimates to adjust them more closely to the additional revenue information that.has become ':
available with the passage of time. Any changes resulting from this meeting shall be in into
the preliminary budget to be considered by City Council.
Program Reviews—The Mayor shall perform a periodic review of staff and programs'of the City for both
efficiency and effectiveness. Alternate methods of delivery will be evaluated for providing services.
Programs that are determined to be inefficient, ineffective, or,inconsistent with the City Council's
strategic goals shall be reduced in scope or eliminated.
Preliminary Budget — The Mayor shall propose a preliminary budget in,the Fall of`even numbered
years. The preliminary budget will be developed in accordance with the revenues approved bythe City
Council at the budget kickoff as amended. If the preliminary budget is based on revenues in excess of
those approved by City Council, the Mayorwill present the justification forthe increased revenues orthe
additional proposed revenue sources.
Structurally Balanced Budget—The Maybrshall present, and the City Council shall adopt a budget in
which ongoing revenues equal or exceed ongoing expenditures. Onetime revenues shall not be used to
pay for recurring expenditures.
Conservative Expenditure Budgeting-The City wlli.mairitain its conservative expenditure budgeting
with respect to budgeting existing full time positions fo,r.a full year.
Acceptance of Grants—The Cit shall review any requirements for ongoing costs from any grant for
operational purposes, Ahy require-mentto fund any portion,of the costs as a condition of receipt of the
grant shall be a consideration in the decision to accept or reject the grant.
Self Supporting Prop#etaryFurdI The dty's water-,.sewer and golf course enterprise funds will be
self supporting along withfts internal service funds. The cost of providing services is expected to be fully
funded from charges for the service. If the funds produce a loss, rates will be adjusted to achieve, at
minimum, a break even status; Jf debt has been issued which requires a certain level of return, rates
and crisarges wilfbe_adjusted to achieve those returns.
Health Insurance Reserves — The iargst reserve for the Health Insurance Fund shall be two times
IBNR.
+wF
Ft01 Cost of Service E e City will define its basic services to our residents. The services will be
evaluated as to their full cost. This information will be incorporated and presented as a section of the
annuati�?udget, T'
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REVENUE AND COLLECTIONS
Aggressive Collection Effort-The City will follow an aggressive policy of collecting all monies due the
City to the extent that the collection efforts remain cost effective.
Reimbursements on a timely basis—Many grants occur on a cost reimbursement basis. To maximize:
the City's available investable funds, reimbursement should be pursued on a timely basis.
User Charges Related to Costs - The City will review fees and charges on an annual basis and will
modify charges to adequately keep pace with increasing costs of providing services.
User Charges and Taxes Related to Market Rates-The City will consider its user charges and its tax
rates in connection with those of comparable sized communities and similar service providers, so that it
will provide reasonable rates to maintain its advantage in the market place in attracting businesses and
residences to the City of Kent.
CAPITAL BUDGETING
Committed Special Revenue Funds - The City will maintain its practice of designating its street and
capital improvement revenue sources including a percentage of itssales tax collections forthe funding of
its capital improvement program.
Capital Improvement Program - The City will update its capital facilities plan on an annual basis as
required by the Growth Management Act. A preliminary plan will be established early in the budgeting
process to serve as a guideline during the year, with a final amendment adopted with the adoption of the
operating budgets to reflect the necessary changes in the City's Comprehensive Plan.
DEBT POLICIES
Projects Funded by Bonds —The use of long-term debt shall be'minfmi Th 4ed. e City should issue
debt only for major capital projects. Debt should only be authorized for projects where the life of the
asset constructed or acquired exceeds the life of the debt.
Debt Service — To ensure that the Ci#y always meets alliof their debt obligations, payments on
outstanding debt shall be the highest priority before payment for other capital expenditures.
Bond Rating-The City will continue to strive to improve its band rating by improving its financial stability.
Debt Capacity - The City,strives tomafntain adequatp`available debt capacity for large top priority
projects.
Bonding Limitations—Dire ct'General Obligation Debt will not exceed 1.5%of assessed value;direct and
indirect�iebt wilt,nbt exceed 4% of assessed value; duration of the debt will not exceed 15 years.
Revenue Debt Covenants —Will be based on the volatility of the revenues.
Arbitrage regulations iNll be strictly followed.
Special Assessment Guaranty Fund-The City will strive to maintain adequate reserves for retirement of
sped ,assessment debt th ough the maintenance of a special assessment guaranty fund at least 10%of
outstandi�q special assessment debt.
Interfund Bbrrowing The City will use interfund borrowing where such borrowing is cost effective to both
the borrowing ant'd,th�`lending fund, and the funds will not be needed by the loaning fund during the term
of the loan Suptl!borrowing shall implement Council directed policy in a simplified manner, such as
borrowing assapla#ed with interim financing for local improvement district projects. A repayment plan
17
should be approved along with the loan. The Mayor may approve loans for a term of one year. The
Council must approve loans with terms longer than one year.
INVESTMENT POLICY
Investment Security&Earnings Maximization-An investment policy was implemented per Ordinance
##3278 in 1996 which detail the City's investment guidelines. The primary objective is to preserve the
principal of the investment portfolio while maximizing the portfolio's return.
FINANCIAL REPORTING
Reporting frequency—Monthly budget and actual reports will be available to departments and a quarterly
report will be presented to the City Council Operations Committee.
Annual Report—Will be completed within 180 days.
Reporting Improvements-The City will strive to continue to make improvements in its financial reporting
scheme so that information available to the public, the City's governing bodies and other,city departments
is timely and the best available for sound financial decisions.
Bondholders'Report—The City will prepare an annual report to bondholders,
Full Disclosure—All public reports will contain full and complete disclosure of all material matters.
Financial Trend Monitoring - The City will develop a program to evaluate its financial condition and
establish a system for correcting any deficiencies noted.
Annual Audits-The City will assist the State Auditors Office in whatever waypossible in conjunction with
the preparation of the annual audit, and will implement,modifications identified by the State Auditor to
improve the City's internal control and financial practice. `
Updates to these Policies=The Operations Committee of the City Council shall review these policies at
least every four years. it is recommended that the review is done biennially during the budget process.
10,11
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ACCOUNTING
Generally Accepted Accounting Principles-The City will maintain its position as a leader in producing
financial reports in conformance with generally accepted accounting principles and pronouncements by;,
the Governmental Accounting Standards Board.
Basis of Accounting - The basis for accounting for the general fund, special revenue debt!service,
capital projects and agency funds is modified accrual. Modified accrual recognizes revenues when-,they
become both measurable and available to finance expenditures of the Current period, The basis,of
accounting for the enterprise, internal service funds and pension trust fund is full accrual, The appropriate:
basis is used throughout the budgeting, accounting and reporting processes,with few exceptions as noted
below. Full accrual is a method of accounting that matches revenues and expenses with the period to
which they relate, rather than focusing on actual cash flows. In this method, for example, an asset is
depreciated as it is"used up", and the expense is recognized in periodic increments ratherthan assuming
the asset holds its value until it is actually disposed of. However, since the"focus in budgeting is on the
revenues and expendable accounts, depreciation and amortization are not considered budgetary
accounts, and are excluded from the budgeting system. Likewise, debt service and capital expenditures
are presented as the payments occur, departing from GAAP in this regard, in the budget document. Also,
Trust and Agency Funds that may not be expended for governmental operations are excluded from this
budget document.
The presentation of the program budget departs from the basis of the legal budget;by eliminating inter city
transactions and allocating the net increases or decreases from internal services to the using programs.
This is done to give the user a more complete picture of the total costs of the operating programs.
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BUDGET AND ACCOUNTING STRUCTURE
The City of Kent, as all governmental units, operates its budget and accounting system based on a fund
structure. Funds are established to segregate specific revenue to ensure their expenditure within:
applicable legal and contractual provisions. Revenues are allocated to and accounted for in individuaLi !:
funds based on the purposes for which they are to be spent and the means by which the spending
activities are to be controlled. The City of Kent operates with seven basic fund types. Within each fund
type there may exist one or more individual funds. The City of Kent operates with 26 individual funds-,'The
fund types are listed below under their three major subheadings.
FUND/PURPOSE RELATIONSHIP TO OTHER FUNDS
GOVERNMENTAL FUNDS
General Fund
The General Fund is the principal operating fund The General Fund "buys" services from the
of the City. It accounts for the financial Internal, Service Funds fuel and rental of
resources of the City which are not accounted vehicles '`from the Equipment Rental Fund;
for in any other fund. Principal sources of supplies, postage; photocopy, printing and
revenue are property taxes, sales and use graphics, cable TV services, data processing
taxes, utility taxes, licenses and permits, state and telephone services from Central Services;
shared revenues, charges for services and facility maintenance and .operation,services
interest income. Primary expenditures are for from Facilities; and insurance.:from the
general City administration, police and fire Insurance Fund. Costs are allocated to all
protection, engineering and planning services', funds in an effort to distribute accounting,
park and street maintenance, and cultural and budgeting', legal and human resource services
recreational services. as well as street, engineering and park
service's. General Fund also transfers funds for
mindr projects.
Special Revenue Funds
Special Revenue Funds are used to account for Taxes and grants are collected in the Street
specific revenue sources that would otherwise Fund, LEOFFI Retirees Fund, Lodging Tax
be accounted for in the General Fund, but for Fund, Youth Teen Programs Fund, Capital
which there existsceffair-legal restrictions as to Improvement Fund, Criminal Justice Fund,
the use of certain revenues. The, fpven,e Ts community Development Block Grant Fund,
segregated into individual special revenue funds -Other Operating Projects Fund, and the Kent
to ensure expenditure for a designated purpose. Events Center Operating Fund. Transfers from
Principal sourc-es.of revenue are:state shared the Street and Capital Improvement Funds are
fuel fax;earrnarked.sales and utiliky_taxes and
primarily to the Capital Project Funds or the
com,munity development block grant funds. T'he LTGO Debt Service Fund.
major portion of these resources are trans�Yred
MIo other funds for debt retirement- ,'rrcapital
"sition and specific purposes operations.
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BUDGET AND ACCOUNTING STRUCTURE
FUNDIPURPOSE RELATIONSHIP TO OTHER FUNDS
Debt Service Funds
Debt Service Funds are used to account for the The Debt Service Funds receive the transfers
accumulation of resources to be used for the from the Special Revenue Funds, Water Fund
retirement of general long-term debt. The City and Sewerage Funds to pay principal and
has three types of general long-term debt for interest on LTGO debt issues.
which resources are accumulated: general _.
obligation long-term debt (voted, general
obligation long-term debt and LTGO)and special
assessment debt. Sources of revenue to fund =
the retirement of general obligation long-term
debt are property taxes and transfers in from
other funds. Special assessments are levied and
received to retire special assessment debt.
Capital Projects Funds
Capital Projects Funds are used to account for Transfers are received from Special Revenue
the financing of major one time only capital and other funds a_s a,-partial source of funds
projects other than those financed by Proprietary needed to complete projects.
Funds. Sources of revenue are: proceeds of
debt issuance, grants, and transfers from other
funds.
PROPRIETARY FUNDS
Enterprise Funds
Enterprise Funds are used to account for the The Enterprise Funds "buy" services from the
financing of services provided to the,,,general Equipment Rental Fund for equipment rental and
public where all or most of the costs involved are fuel; from:, the Insurance Fund for insurance
paid for by user charges, Operations financed as needs;from the Central Service Funds for stores,
enterprise funds are operated in a manner similar telephone, postage, photocopying, printing and
to private business'eriterprises. Kenfs enterprise, graphics, cable TV services, data processing and
funds are funded through, water, sewer, and telecommunications; and from the Facilities Fund
drainage utility charges andrecreattonal charges for facility maintenance and operation services.
at the City's golf complex. The Enterprise Funds also reimburse the
General Fund for cost allocations for budgeting,
accounting, human resource, legal and
engineering costs which relate to Enterprise
Funds. Other funds purchase utilities at the
same rate as the general public.
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BUDGET AND ACCOUNTING STRUCTURE
FUND/PURPOSE RELATIONSHIP TO OTHER FUNDS
Internal Service Funds
Internal Service Funds are used to account for Centralizes costs for equipment rental,,;central
the financing of specific services performed by services and insurance. These services are
designated organizations within the City for "sold" to other funds at cost plus a"reseNbJor
other organizations within the City. The City's future needs.
Equipment Rental, Central Service, Facilities
Maintenance and Planning, and Insurance
Funds provide centrally administered services
then generate revenue by billing the
organization to which the service is provided.
FIDUCIARY FUND TYPES
Trust and Agency Funds
Trust and Agency Funds are used to account
for assets held by the City as trustee or agent
for individuals, private organizations or other
governmental units. Since their funds are not
expendable for City operations they are not
included in the budget. However, per state
auditor requirements, estimates are provided;
for their activities.
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BUDGET AND SPENDING CONTROL SYSTEM
Budgets serve as control mechanisms in the operations of governmental units. Legal budgetary
(expenditure) control in the City of Kent is maintained at the fund level. Administration can amend
budgets, with no overall dollar increase between departments, within a fund. Supplemental
appropriations that amend total expenditures, or in the case of Proprietary Funds amend working:,
capital, require a City Council ordinance. All operating budgets lapse at the end of the biennium ,-
Within each year of the biennium, a single year allocation will be adopted and operate as if it were
an annual budget.
General and Special Revenue Funds control expenditures with a legal biennial budget at the fund
level. Debt Service Funds operate under the control of the bond indentures which established them.
Capital Projects Funds operate under the control of total project authorization, rather than the annual
budget. Proprietary Funds control expenditures with a flexible budget whereby the expenditure
increases must be offset by increased resources. Though budgetary control is at the fund level,
budget and actual information is maintained by project, organization, program andobject. Both
budget and actual information is presented on a GAAP basis of accounting, when presented by
fund. 2111
The City must adopt its biennial budget by December of the preceding fiscal year, This usually
follows six months of analysis by staff and City Council, The first step involves the establishment of
the baseline revenue budget by the City Council. The second step is to review the City Council
Strategic Goals and begin budget development to assist in achieving,those goals. Third, undertake
a program review to ensure that current program offerings are in--agreement with City Council goals
and priorities. The emphasis is placed on the General and Special Revenue Funds since the
operation of other funds are tied to ordinances, contractual agreements,or separately established
rate structures. Once the. baseline operations have'been reviewed and adjusted based on
administrative policy, program expansion is included to the level of projected available resources
after the establishment of sufficient fund balances.
A mid-biennium,review is undertaken durin�the second year of the biennium in which any changes
to the initial estimates of revenues and expenditures are to be reviewed. Such changes will be
presented by the Mayor_and discussed by the City"Council. Any agreed upon changes shall be
approved with an ordinance adopting changes to the biennial budget.
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After the preliminary budget document is;;prepared, the City Council spends approximately one
;month reviewing it. �-Public meetings ar&held to gather public input. When the budget review and
final adjustment penodjs complete a balanced budget as required by state law is adopted by
ordinance. After adoption periodic budget adjustments that affect total fund expenditures are made
71�as approved by City Council, but a final budget adjustment ordinance covering all approved changes
s adopted at year end gr�the beginning of the next biennium.
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