Agenda

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Consent

Brentwood City Commission Agenda

Meeting Date:	04/22/2024
Resolution 2024-51- A Resolution Amending the City of Brentwood Financial Policies
Submitted by:	Karen Harper, Finance
Department:	Finance

Information

Subject

Resolution 2024-51 - Amending the City of Brentwood Financial Policies

Background

The City's Financial Policies consist of Operating Budget Policy; Fund Balance Policy; Revenue Policy; Debt Management Policy; and Investment Policy. The Operating Budget Policy was originally adopted dating back to 1990 and amended in 2016. The Fund Balance Policy was adopted in 2011. The Debt Management Policy was originally adopted in 2011 and was amended in 2016 and 2021. The Investment Policy was originally adopted in 1987 and amended in 2010. All stated policies were amended in 2021.

These policies serve as a guide in formulation of the City's annual budget and State of Tennessee and/or GASB compliance requirements. Basic priorities and procedures are established in these policies and include but are not limited to: the establishment of a minimum unassigned fund balance in the General Fund of 40% of annual operating expenditures; ensuring the collection of all revenues due the City; the management of the City's debt to achieve long-term capital improvement objectives while minimizing risks; and the investment of the City's idle funds, with the primary objectives to be safety of principal, liquidity, and yield, in that order.

As part of the process of updating and analyzing the City's financial policies, staff has identified a few minor updates to the following two policies that are appropriate for consideration by the City Commission: the Operating Budget Policy and the Fund Balance Policy.

The first proposed change is to update the Operating Budget Policy item number 13 (see attached) which states the following: "The City will maintain a minimum retained earnings reserve in the Water and Sewer Fund more than 180 days of budgeted annual operating expenses." Terminology requirements have changed, replacing "retained earnings" with "unrestricted net position."

The second proposed change is to update the Fund Balance Policy item number 2 (a) (i) (see attached), changing the reference of $40,000 to $45,000 in the following statement: "The Equipment Replacement Fund balance is committed by the City Commission as set forth in the annual budget (and any amendments thereto) to provide for the systematic accumulation of funds needed to purchase large vehicles and equipment (generally greater than $40,000) without the issuance of capital outlay notes or general obligation bonds."

The attached Resolution amends the Operating Budget Policy and Fund Balance Policy.

Staff Recommendation

Staff recommends approval of the attached resolution amending the Operating Budget Policy and the Fund Balance Policy,

Previous Commission Action

Resolution 2022-129 - A Resolution Amending the City of Brentwood Debt Policy
Resolution 2021-46 - A Resolution Amending the City of Bretnwood Financial Policies
Resolution 2016-37 - A Resolution Amending the City of Brentwood Operating Budget Policy
Resolution 2011-37 - To Establish a Fund Balance Policy for the General Fund and All Governmental Funds
Resolution 2011-66 - Adopting a New Debt Management Policy for Debt Obligation Undertaken by the City
Resolution 2016-38 - A Resolution Amending the Debt Management Policy
Resolution 2010-32 - Adopting an Amended Policy for Investment of City Idle Funds

Fiscal Impact

Attachments
Resolution 2024-51
A - Operating Budget Policy
B - Fund Balance Policy
Signed Resolution