HomeMy WebLinkAbout09/06/2011 08B Report re: Budget Policy / Guideline Recommendation Concerning Non-recurring Expenditures •
BUSINESS OF THE CITY COUNCIL
® YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No.
For Meeting Of Sept. 6, 2011
-
ITEM TITLE: A Report from the Council Budget - committee 'regarding a budget policy /
guideline recommendation concerning non - recurring expenditures.
SUBMITTED BY: Finance Department on Behalf of the Council Budget Committee
CONTACT PERSON /TELEPHONE: Rita DeBord, Director Finance & Technology
Cindy Epperson, Deputy Director Acct. & BudgetsC)-
575 -6070
SUMMARY EXPLANATION
Last year, during the preparation for the 2011 budget, Council approved several budget policies
and guidelines; including direction to staff to budget non - recurring General Government
expenditures in a special account. Examples of non - recurring expenditures include special
elections, retirement cash -outs, and special one -time studies. Prior to this policy direction, all
expenditures for a general government division were budgeted within that division's operating
budget. (A copy of the policy approved by Council at the August 3, 2010 business meeting is
attached for ease of reference.)
However, as of the August 2010 Council meeting, staff had not yet determined the precise
0 manner in which to implement this change within the budget and still be able to properly track
actual non - recurring expenditures; and Council agreed that further refinement of the process
was needed. Over the course of finalizing the 2011 budget, staff developed this process. At the
Council Budget Committee (CBC) meeting on August 24, 2011, staff requested confirmation
concerning the Committee's desire to adopt the policy of budgeting for non - recurring general
government expenditures in a special account which will be excluded from the Priority of
Government (POG) revenue allocation, and utilizing reserves to cover these expenditures. Note:
the reserve policies cannot be superseded by designating expenditures as "non- recurring ".
The CBC agreed to forward to the full Council for consideration their recommendation to
continue to exclude non - recurring expenditures from general government division operating
budgets, to budget these costs in a special account and to utilize reserves to cover these costs.
(Staff has updated the 2010 draft non - recurring policy for Council's consideration, see attached.)
Resolution Ordinance Other (Specify)
Funding Source
APPROVED FOR SUBMITTAL: City Manager
STAFF RECOMMENDATION: This is a Council policy issue.
BOARD /COMMISSION /COMMITTEE RECOMMENDATION: The CBC agreed (by a 2 -1 vote)
to forward this budget policy to the full council for consideration.
COUNCIL ACTION:
•
•
Draft
(09- 06 -11)
Fiscal Policy
Budgeting for Non - Recurring Genera! Government Expenditures
Definition: Non - Recurring. Expenditures are expenditures that are significant in amount
and unique to the normal, annual business cycle of the City. Additionally, such an
expenditure is not expected to occur again in the foreseeable future, or is of a nature that
it occurs very infrequently and budgeting for it in its normal Division / Department would
cause a significant and unusual "anomaly" in the budget for the related area in the year(s)
it occurs.
Examples include: election costs; some retirement cash -outs; costs related to
Purchasing Division's consolidation with the County; special one -time studies.
Policy:
> When expenditures fitting the above description occur, such expenditures will not
be budgeted in their normal manner within the affected Division / Department.
Instead, such expenditures will be budgeted in a special account(s) within General
Government.
These expenditures will be budgeted within the appropriate "Basub" and "Object
Code" classifications (State mandated classifications) within the special General
Government account to ensure proper accounting and accuracy of financial
statements.
> Due to the inconsistent and non - recurring nature of these expenditures, they will
not be considered part of the Priorities of Government (POG) revenue allocation;
the non - recurring expenses budgeted / charged to this special account will be
funded from General Government Reserves.
> All designation of non - recurring expenditures must be considered within the use
of reserve and minimum reserve policies.
> The applicable Division / Department to which the expenditure relates will be
identified when recording the actual expenditure. Budget staff will maintain a
record of all such budgeted expenditures, by year, for future reference and
tracking.
\\ Apollo\ Users \cepperso\ Bob -s -files- taxes - reports\AGENDA- STATEMENTS \Agendas 2011 \09 -06 -11 Policy - Non-recurring -Exp
.docx
Last printed 9/1/2011 12:09:00 PM
Draft - Conceptual Framework
(08- 03 -10)
Fiscal Policy
Budgeting for Non- Recurring General Government Expenditures
Definition: Non - Recurring Expenditures are expenditures that are significant in amount
and unique to the normal, annual business cycle of the City. Additionally, such an
expenditure is not expected to occur again in the foreseeable future, or is of a nature that
it occurs very infrequently and budgeting for it in its normal Division / Department would
cause a significant and unusual "anomaly" in the budget for the related area in the year(s)
it occurs.
Examples include: election costs; some retirement cash -outs; costs related to
Purchasing Division's consolidation with the County; special one -time studies.
Policy:
> When expenditures fitting the above description occur, such expenditures will not
be budgeted in their normal manner within the affected Division / Department.
Instead, such expenditures will be budgeted in a special account(s) within General
0
Government. These expenditures will be budgeted within the appropriate
"Basub" and "Object Code" classifications (State mandated classifications) within
the special General Government account to ensure proper accounting and
accuracy of financial statements.
> The applicable Division / Department to which the expenditure relates will be
identified when recording the actual expenditure.
> Budget staff will maintain a record of all such budgeted expenditures, by year, for
future reference and tracking.
Note: the information above outlines the conceptual design for handling non - recurring
expenditures in the budget in the future; further refinement and details need to be
developed before this concept could be implemented.
\\Apollo\ Users \cepperso\Bob -s- files- taxes - reports \AGENDA- STATEMENTS\Agendas 2011 \09 -06 -11 Draft Policy fr 2010 re Non-
recurring Exp .docx
Last printed 9/1/2011 12:11:00 PM