Page 41 - City of Mansfield FY22 Operarting Budget

Existing capital equipment shall be replaced when needed to ensure the optimal productivity of City
employees. Existing capital equipment associated with General Fund operations in excess of $5,000 will
be charged to individual departments who purchase those items.

Expenditures for additional capital equipment shall be made only to enhance employee productivity,
improve quality of service, or expand scope of service. To assist in controlling the growth of operating
expenditures, operating departments within the General Fund will submit their annual budgets to the City
Manager within a ceiling calculated by the Financial Services Department from the General Fund’s Long-
Term Financial Plan. Projected expenditures that exceed the ceiling must be submitted as separate
expanded level of service requests.

FUND BALANCE POLICY

The annual budget shall be presented to Council with each fund reflecting an ending fund balance that is
no less than 25% of that fund’s annual operating expenditures. To satisfy the particular needs of
individual funds, ending fund balances may be established which exceed the 25% minimum. Fund
balance that exceeds the minimum level established for each fund may be appropriated for non-recurring
capital projects or programs.

FUND TRANSFER POLICY

With the exceptions noted below, there will be no operating transfers between funds. Any costs incurred
by one fund to support the operations of another shall be charged directly to the fund. (For example,
actual hours worked by General Fund employees for Water & Sewer Fund events.)

Fund transfers may occur when surplus fund balances are used to support non-recurring capital expenses
or when needed to satisfy debt service obligations.

DEBT EXPENDITURES

The City will issue debt only to fund capital projects that cannot be supported by current, annual
revenues. To minimize interest payments on issued debt, the City will maintain a regular debt retirement
policy by issuing debt with maximum maturities not exceeding twenty (20) years. Retirement of debt
principal will be structured to ensure constant annual debt payment. Post issuance compliance policy was
implemented in 2012. The City will attempt to maintain base bond ratings of Aa1 (Moody’s Investors
Service), AAA (Standard & Poor’s) and AA+ (Fitch, IBCA), on its general obligation debt (see Debt
Policy). Annual financial reviews are conducted by Fitch, Moody’s, and Standard & Poor’s.

CAPITAL PROJECTS EXPENDITURE POLICY

The City will develop a multi-year plan for capital projects, which identifies all projects likely to be
constructed within a ten-year horizon. The multi-year plan will reflect for each project the likely source
of funding and attempt to quantify the project’s impact to future operating expenditures. Capital projects
will be constructed to protect or improve the community’s quality of life, protect, or enhance the
community’s economic vitality, and support and service new development. To minimize the issuance of
debt, the City will attempt to support capital projects with appropriations from operating revenues or
excess fund balances, i.e., “pay-as-you-go.”

41