Page 390 - City of Westlake FY20 Budget

Section 11 Municipal Policies
Municipal Fiscal & Budgetary Policies

• Equity - The Town shall make every effort to maintain equity in its revenue system: i.e. the
Town shall seek to minimize or eliminate all forms of subsidization between entities, funds,
services utilities, and customer classes within a utility.

• Administration - The benefits of a revenue source will not exceed the cost of collecting that
revenue. Every effort will be made for the cost of collection to be reviewed annually for cost
effectiveness as a part of the Town’s indirect cost and cost of service analysis.

• Adequacy, Diversification and Stability - The Town shall attempt, in as much as is practical, to
achieve a balance in its revenue system. The Town shall also strive to maintain a balanced and
diversified revenue system to protect the Town from fluctuations in any one source due to
changes in local economic conditions which adversely impact that revenue source.

B. Other Considerations. The following considerations and issues will guide the Town in its revenue
policies concerning specific sources of funds:

• Cost/Benefit of Incentives for Economic Development - The Town will use due caution in the
analysis of any tax or fee incentives that are being considered to encourage economic
development. A cost/benefit (fiscal impact) analysis will be performed as a part of the
evaluation for each proposed economic development project.

• Non-Recurring Revenues - One-time or non-recurring revenues will not be used to finance on-
going operational costs. Non-recurring revenues will be used only for one-time expenditures
such as long-lived capital needs or one-time major maintenance projects that occur
infrequently. Non-recurring revenues will not be used for budget balancing purposes except
to cover the one-time expenditures described above.

• Investment Income - Earnings from investment of available monies, whether pooled or not,
will be distributed to the funds in accordance with the equity balance of the fund from which
monies were provided to be invested.

• Property Tax Revenues - The Town shall endeavor to avoid a property tax by revenue
diversification, implementation of user fees, and economic development.

C. User-Based (Demand Driven) Fees and Service Charges. For services that are demand driven and
can be associated with a user fee or charge, the direct and indirect costs of that service will be
offset by a fee where possible. The Town staff will endeavor to prepare a review of all fees and
charges annually, but not less than once every three years, in order to ensure that these fees
provide for, at minimum, full cost recovery of service.
D. Enterprise Fund Rates. Utility rates and rate structures for water and sewer services will be
constructed to target full cost of service recovery. Annually the Town will review and adopt water
and sewer utility rates and a rate structure that generates revenue sufficient to fully cover
operating expenses, meet the legal restrictions of all applicable bond covenants, provide for an

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