HomeMy WebLinkAboutResolution No. 2016-C12RESOLUTION NO. 2016-C12
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA,
CALIFORNIA, ADOPTING AND APPROVING THE LONG-TERM FISCAL
SUSTAINABILITY POLICY
WHEREAS, the City of Azusa ("City") desires to maintain current and comprehensive
financial policies; and
WHEREAS, there is a need to formalize the policies regarding long-term fiscal
sustainability; and
WHEREAS, the City desires to adopt a Long -Term Fiscal Sustainability Policy (Exhibit
A);
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Azusa,
California does hereby find, determine and declare as follows:
Section 1. Approve and adopt the Long -Term Fiscal Sustainability Policy attached
hereto as Exhibit A;
Section 2. Authorize City staff to take all actions necessary to carry out the Policy.
PASSED, APPROVED and ADOPTED this 19th day of January, 2016.
ea
oseph omero Rocha
Mayor
ATTEST:
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF AZUSA )
I HEREBY CERTIFY that the foregoing Resolution No. 2016-C12 was duly adopted
by the City Council of the City of Azusa at a regular meeting thereof on the 19's day of January
2016, by the following vote of City Council Members:
AYES: COUNCILMEMBERS: GONZALES, MACIAS, ALVAREZ, ROCHA
NOES: COUNCILMEMBERS: NONE
ABSENT: COUNCILMEMBERS: CARRILLO
City Clerk
APPROVED AS TO FORM:
Best Best MKrieger, LL j
City Attorn
INTERNAL CONTROLS (ACCOUNTING) POLICY
(See Exhibit A)
LONG-TERM FISCAL SUSTAINABILITY
POLICY
City of Azusa Lona -Term Fiscal Sustainability Policy EXHIBIT A
SECTION 7 - GOAL STATEMENT
1.1 Long-term fiscal sustainability is the ability of a government to meet its service delivery and financial
commitments by balancing revenues and expenditures over a long-term period. It reflects the adequacy
of available revenues to ensure the continuance of providing the service and capital levels demanded
by the public. This Long -Term Fiscal Sustainability Policy sets forth a framework and general
parameters to achieve the following goals for the City of Azusa ("City"):
1.1.1 Structural Balance - This is achieved when budgetary spending is based on sustainable
levels of revenue, excluding fluctuations that can occur as a result of the economic
cycle.
1.1.2 Sustainable Spending Growth - This is targeted to maintain structural balance
throughout a three to five-year rolling forecast period and evaluated by comparing
annual spending growth to projected long-term rates of revenue growth.
1.1.3 Disciplined Management of Long -Term Liabilities - This is necessary to protect
intergenerational equity by preventing the costs associated with debt and unfunded
retirement benefit obligations from crowding out other government services and
investments in the future.
1.2 This policy is intended to describe particular elements or aspects a long-term financial plan to ensure
the City's on-going financial sustainability beyond a single fiscal year budget cycle.
1.3 While this policy provides guidelines for general use, it allows for exceptions in extraordinary
conditions. In the event there are proposed exceptions to the policy, those exceptions will be
discussed in the applicable staff reports at the time the exception is identified for City Council
consideration.
SECTION 2 - LONG-TERM FINANCIAL PLAN
2.1 A long-term financial plan (LTFP) is a process evaluating known internal and external issues
impacting the City's fiscal sustainability.
2.2 Issues are identified, presented and mitigated.
2.3 The process begins by identifying critical areas which have, or are expected to have an impact on
the financial condition of the City over the next five (5) years.
2.4 Specific goals and objectives are developed for structural deficiency once issues are identified.
2.5 The LTFP is a constantly changing and moving document which will be routinely updated and
presented on an ongoing five-year rolling basis.
2.6 The LFTP will be presented to the City Council annually.
SECTION 3 - OBJECTIVES
3.1 The LTFP is intended to help the City achieve the following objectives:
3.1.1 Ensure the City can attain and maintain fiscal sustainability.
3.1.2 Ensure the City has sufficient long-term information to guide financial decisions.
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City of Azusa Lona -Term Fiscal Sustainability Policy EXHIBIT A
3.1.3 Ensure the City has sufficient resources to provide programs and services for the
stakeholders.
3.1.4 Ensure potential risks to on-going operations are identified in the LTFP process and
communicated on a regular basis.
3.1.5 Establish mechanisms to identify early warning indicators.
3.1.6 Identify changes in expenditure or revenue structures needed to deliver services or to
meet the City's goals.
SECTION 4 — SCOPE OF THE PLAN
4.1 Time Horizon — The LTFP will forecast revenues, expenditures, and financial position at least five
(5) years into the future or longer where specific issues call for a longer time horizon.
42 Comprehensive Analysis —The LTFP will provide meaningful analysis of key trends and
conditions, including but not limited to:
4.2.1 Analysis of the affordability of current services, projects and obligations:
4.2.1.a An analysis of the City's environment in order to anticipate changes that could
impact the City's service and/or financial objectives.
4.2.1.b Revenue and expenditure projections, including the financial sustainability of
current service levels over a multi-year period.
4.2.1.c The affordability of current debt relative to affordability ratios prescribed by City
policy and/or State law.
4.2.1.d The affordability of maintaining and replacing the City's current capital assets.
4.2.1.e The ability to maintain reserves within the target ranges prescribed by City policy
over a multi-year period.
4.2.1.f The impact of non-current liabilities on the City's financial position.
4.2.2 Analysis of the affordability of anticipated service expansions or investments in new assets:
4.2.2.a The operating costs of any new initiatives, projects, or expansion of services where
funding has been identified through alternative sources (CIP, grants, debt issuance,
etc.) or adopted and approved by the City Council through other actions. Service
delivery of administrative services and functions shall be included to the extent
needed proportionately with the expansion of other services.
4.2.2.b The affordability of the City's long-term CIP, including operating and maintenance
costs for new assets.
4.2.2.c The affordability of other master plans that call for significant financial investment by
the City.
4.2.3 Combination of the above to present the City's financial position:
4.2.3.a A presentation of resources needed to accomplish the capital improvements
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City of Azusa Long -Term Fiscal Sustainability Policy EXHIBIT A
identified in the City's CIP and to maintain the existing capital assets.
4.2.3.b A presentation of the resources needed to maintain existing services at their
present level in addition to the expansion of services identified through the
analysis described above.
4.2.3.c Identification of imbalances between the City's current direction and the conditions
needed for continued financial health.
4.3 Solution -Oriented —The LTFP will identify issues that may challenge the continued financial health
of the City and the plan will identify possible solutions to those challenges. Planning decisions
shall be made primarily from a long-term perspective and structural balance is the goal of the
planning process.
SECTION 5 — CONTINUOUS IMPROVEMENT
5.1 Continuous Improvement — City staff will regularly look for and implement opportunities to improve
the quality of forecasting, analysis, and strategy development that is part of the planning process.
These improvements will primarily be identified through the comparison of projected performance
with actual results.
SECTION 6 — STRUCTURAL BALANCE
6.1 Structural Balance — long-term structural balance is the goal of LTFP. Should the long-term
forecasting and analysis show that the City is not structurally balanced over the five-year
projection period, staff will make recommendations to the City Council on how to achieve a
balance.
SECTION 7 — NON-CURRENT LIABILITIES
7.1 The LTFP will address strategies for ensuring that the city's critical long-term liabilities remain
affordable such as debt service, asset maintenance, pensions and other post -employment
benefits.
SECTION 8 — RESPONSIBILITIES
8.1 It is the responsibility of the Director of Finance to ensure the presence of procedures that provide
sufficient guidance to affected City personnel to fulfill the intent/objectives of this policy.
8.2 This policy will be reviewed at least annually and updated on an as -needed basis to ensure the
long-term fiscal sustainability of the City.
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