Laserfiche WebLink
COUNCIL FINANCIAL POLICIES <br />Over the years, the San Leandro City Council has followed a series of Financial Values that provide <br />guidance to budget administration, capital financing and debt management -which are also used to <br />guide the budget process. In addition, the City Council adopted, by resolution, specific budget <br />administration guidelines which set out guidance for fund balance designations and reserves <br />management. <br />The budget guidelines recommend sufficient fund balance to provide for: a) Economic unce1iainties, <br />local disasters, and other financial hardships or downturns in the local or national economy, b) <br />contingencies for unforeseen operating or capital needs and c) cash flow requirements. Further, the <br />guidelines call for such designated fund balances to be at least 16.67% of General Fund operating <br />expenditures (budgeted expenditures for the following year). Consequently, based on the General <br />Fund's budgeted operating expenditures for 2018-19 the guideline requirement is approximately $19 .6 <br />million. <br />The 2017-18 financial statements reflect unrestricted reserves thattotal $36.6 million. The Unassigned <br />Fund Balance aligns with the Council's fund balance guideline to provide at least 16.7% unrestricted, <br />General Fund reserve, as a percentage of next fiscal year's General fund Operating Budget. <br />FINANCIAL INFORMATION <br />City Budget & Budgetary Controls <br />The City Council is required to adopt a final budget through the passage of a resolution no later than <br />June 30, the close of the fiscal year, following a public hearing process conducted to obtain taxpayer <br />comments. This annual budget serves as the foundation for the City's financial planning and control. <br />The budget is prepared by fund, function (e.g., public safety) and department (e.g., police). The legal <br />level of budgetary control is at the fund level. The City Manager is authorized to transfer budgeted <br />amounts between departments and line items within any fund; however, any revisions which alter the <br />total expenditures of any fund must be approved by the City Council. Transfers between funds must <br />be approved by the City Council. At the end of the fiscal year, encumbered appropriations are canied <br />fo1ward and become part of the following year's budget while appropriations that have not been <br />encumbered lapse, unless otherwise authorized by the City Council and the City Manager. <br />Accounting System <br />The City's accounting records for general government operations are maintained on a modified <br />accrual basis, with the revenues being recorded when measurable and available. Expenditures are <br />recorded when the services or goods are received and the liabilities incurred. Accounting records <br />for the City's proprietary activities are maintained on the full accrual basis, with revenues recorded <br />when earned and expenses when incurred. In maintaining the City's accounting system, <br />consideration is given to the adequacy of internal controls. Internal controls are designed to <br />provide reasonable assurance regarding the safeguarding of assets and to ensure the reliability of <br />financial records and maintaining accountability for assets. The concept of reasonable assurance <br />recognizes that the cost of control should not exceed the benefits likely to be derived. The <br />evaluation of costs and benefits requires continuing estimates and judgments by City management. <br />We believe that the City's system of internal accounting controls continues to adequately safeguard <br />assets and provide reasonable assurance that financial transactions are properly recorded. <br />lX 460