Page 174 - PowerPoint Presentation

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 adequate level of working capital, and recover applicable general/administrative costs.
The Solid Waste function will have rates that fully recover all costs and maintain an adequate
balance. The Cemetery Fund will be structured to operate on lot sales and endowments.

• General and Administrative (G&A) Charges – Where feasible, G&A costs will be charged to
all funds for services of indirect general overhead costs, which may include general
administration, finance, customer billing, facility use, personnel, technology, engineering,
legal counsel, and other costs as deemed appropriate. These charges will be determined
through an indirect cost allocation study following accepted practices and procedures.

E. Intergovernmental Revenues. As a general rule, intergovernmental revenues (grants) will not
be utilized for on-going operating costs. Any potential grant opportunity will be examined to
identify all costs related to matching and continuation of program requirements. Staff will
focus on one-time grants to avoid long-term implications. If it is determined that accepting a
grant with on-going cost conditions is in the interests of the Town, all the operating and
maintenance costs must be included in the financial forecast and their ultimate effect on
operations and revenue requirements be known.

F. Revenue Monitoring. Revenues as they are received will be regularly compared to budgeted
revenues and variances will be investigated. This process will be summarized in the
appropriate budget report.

G. Special Revenue/Educational Funds. Where feasible and practical, General and Administrative
Charges (G&A) for special revenue and educational funds of the Town of Westlake will be
determined on an annual basis and transfers will be made where sufficient revenue exists to
cover the associated expenditures.

V. EXPENDITURE CONTROL
A. Appropriations – The point of budgetary control is at the department level in the General Fund
and at the fund level in all other funds. When budget adjustments among Departments and/or
funds are necessary, they must be approved by the Town Council.

B. Current Funding Basis - The Town shall operate on a current funding basis. Expenditures shall
be budgeted and controlled so as not to exceed current revenues plus the planned use of fund
balance accumulated through prior year savings. (The use of fund balance shall be guided by
the Fund Balance/Retained Earnings Policy Statements.)

C. Avoidance of Operating Deficits - The Town shall take immediate corrective actions if at any
time during the fiscal year expenditure and revenue re-estimates are such that an operating
deficit (i.e., projected expenditures in excess of projected revenues) is projected at year-end.
Corrective actions can include a hiring freeze, expenditure reductions, fee increases, or use of
fund balance within the Fund.

D. Balance/Retained Earnings Policy - Expenditure deferrals into the following fiscal year, short-
term loans, or use of one-time revenue sources shall be avoided to balance the budget.

147