HomeMy WebLinkAboutORDINANCE NO 17 03 305I
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STATE OF GEORGIA
COUNTY OF FULTON ORDINANCE NO. 17-03-305
AN ORDINANCE OF THE CITY OF MILTON, GEORGIA TO AMEND CHAPTER 2, ARTICLE VI -
FINANCIAL MANAGEMENT PROGRAM TO PROVIDE FOR NECESSARY UPDATES AND
REVISIONS.
BE IT ORDAINED by the City Council of the City of Milton, Georgia while in regular called
council meeting on March 20, 2017 at 6:00 p.m. as follows:
SECTIO N 1. Division 3. Budgetary Policy, Sec. 2-345 -Operating Budget, (e)
Operating budget information, (7) Budget stabilization resources.
a . The city shall establish a fund-balance reserve in all operating funds for
working capital. The purpose of working capital is to:
b .
1. Cover the cost of expenditures caused by unforeseen
emergencies;
2. Cover shortfalls caused by revenue declines; and
3. Eliminate any short-term borrowing for cash flow purposes.
This reserve shall accumulate and then be maintained at an amount,
which represents no less than25 percent of the subsequent year's
budgeted revenues.
SECTION 2. Division 5. Cash and Investment Management, Sec. 2-433 . Primary
objectives, ( 1 ) Safety.
a. Credit risk. The term "credit risk" means the risk of loss due to the failure of
the security issuer or backer. The city shall minimize credit risk by:
1. Limiting investments to the safest types of securities (primarily
obligations of the U.S. government or obligations explicitly
guaranteed by the U.S. government or its agencies).
2. Requiring a credit rating of Aa3 or better from Moody's rating
agency and AA-or better from Standard and Poor's. [ ... ]
SECTION 3. Division 5. Cash and Investment Management, Sec. 2-433. Primary
objectives, ( 1 ) Safety.
d. Concentration risk. The term "concentration risk" means the risk
associated with a high concentration of government funds which are
note diversified. The city shall minimize concentration risk by:
1 . Limiting investments with any one issuer to less than fifteen percent
of the investment portfolio. [ ... ]
SECTION 4. Division 5. Cash and Investment Management, Sec. 2-438.
Reporting, (a) Methods. The investment officer shall prepare an investment
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report monthly to City Council which shall be included in the financial update
report. Additionally, investment holdings will be detailed at least once annually.
SECTION 5. Division 7. Debt Management Policy, Sec. 2-505. Sound financing
procedures. When the city utilizes debt financing, the following will occur to
ensure that the debt is soundly financed:
( 1) Analysis of the financial impact, such that the issuance of debt keeps
within the following guidelines;
a. Total tax-supported debt as a percentage of total taxable full value will
not exceed 1.753; and
b. Total tax-supported debt service as a percentage of General
Government Operating Revenues will not exceed 153.
SECTION 6. Division 13. Fund Balance Policy, Sec. 2-681 . Operational guidelines.
The following guidelines address the classification and use of fund balance in
governmental funds:
( l) Classifying fund balance amounts. Fund balance classifications depict the
nature of the net resources that are reported in a governmental fund. An
individual governmental fund may include nonspendable resources and
amounts that are restricted, committed, or assigned, or any combination
of those classifications. The general fund may also include an unassigned
amount.
(2) Encumbrance reporting. Encumbering amounts for specific purposes for
which resources have already been restricted, committed or assigned
should not result in separate display of encumbered amounts.
Encumbered amounts for specific purposes for which amounts have not
been previously restricted, committed or assigned, will be classified as
committed or assigned, as appropriate, based on the definitions and
criteria set forth in GASB Statement No. 54.
(3) Prioritization of fund balance use. When an expenditure is incurred for
purposes for which both restricted and unrestricted (committed, assigned,
or unassigned) amounts are available, it shall be the policy of the city to
consider restricted amounts to have been reduced first. When an
expenditure is incurred for purposes for which amounts in any of the
unrestricted fund balance classifications could be used, it shall be the
policy of the city that the committed amounts would be reduced first,
followed by assigned amounts and then unassigned amounts.
(4) Minimum unassigned fund balance. The city will maintain a minimum
unassigned fund balance in its general fund of 25 percent of the
subsequent year's budgeted revenues. This minimum fund balance is to
protect against cash flow shortfalls related to timing of projected
revenue receipts and to maintain a budget stabilization commitment.
(5) Replenishing deficiencies. When fund balance falls between 25 and 20
percent of the subsequent year's budgeted revenues, the city will
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replenish it over a period not to exceed one year. A deficiency resulting
in a minimum fund balance less than 20 percent of the subsequent
year's budgeted revenues shall be replenished over a period not to
exceed three years. The city will implement the following budget
strategies in the case of shortage/deficiencies:
• The city will reduce recurring expenditures to eliminate any
structural deficit; or
• The city will increase revenues or pursue other fund sources; or
•A combination of the two options above.
(6) Surplus fund balance. Fund balance will be considered a surplus if over
25 percent of the subsequent year's budgeted revenues. Should
unassigned fund balance of the general fund ever exceed 25 percent,
the city will consider such fund balance surpluses for one-time
expenditures that are nonrecurring in nature.
ORDAINED this the 201h day of March, 2017.
Joe Lockwooa, Mayor
Sudie AM Gordon, City Clerk
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