Page 234 - Saginaw FY19 Annual Budget

CITY OF SAGINAW
FINANCIAL POLICIES
2018-2019
(Continued)

Cash and Investment Management Concepts
 The City shall manage and invest its cash with three objectives, listed in order of priority:
 Safety
 Liquidity
 Yield
 The safety of the principal invested shall always remain the primary objective.
 All investments shall be designed and managed in a manner responsive to the public trust
and consistent with state and local law.
 The City shall maintain a comprehensive cash management program which includes:
 Collection of accounts receivable.
 Vendor payment in accordance with invoice terms.
 Prudent investment of available cash.

Cash management is defined as the process of managing monies in order to ensure maximum
cash availability and maximum yield on short-term investment of idle cash. Periodic review of
cash flow position shall be performed to determine performance of cash management and
investment policies. Detailed policy structures (City Investment Policy and Depository
Agreement) shall be followed with respect to Cash/Treasury management. Interest earned from
investment of available funds, whether pooled or not, shall be distributed to the funds from which
monies were provided to be invested.

Fund Balance/Operating Position Concepts
 The City will maintain a fund balance (cash and investments), to be used for unanticipated
emergencies, between 15 and 20 percent of the operating budgets of the General and
Enterprise Funds (excluding capital outlay).
 These monies will be used to avoid cash-flow interruptions, generate interest income,
reduce need for short-term borrowing and assist in maintaining an investment-grade bond
rating.

Revenue Objectives
The City shall strive to operate a revenue system, which is simple and reliable, so that
assurances can be provided that the revenue base will materialize according to budget planning.

 Consistent monitoring and collection policies will be maintained to ensure the integrity of
the revenue system. Revenue collections will be consolidated under the Finance
Department.
 Monthly reports shall be prepared to compare actual revenues to budgeted revenues and
to determine the variances and associated corrective action necessary.
 The City will periodically review its fee structure to ensure that revenue collections are
adequate to meet corresponding expenditures (cost of service concept).
 The Enterprise Fund will pay a franchise fee based on the same rationale as used with
the electric, gas, and telephone companies. A franchise fee is paid to compensate the
City for street and alley usage.

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