Page 87 - CityofWataugaAdoptedBudgetFY24

BUDGET SUMMARY

BUDGETARY FINANCIAL POLICY GUIDELINES

Numerous financial policy guidelines are followed for the fiscal management of the City
and enable the City to maintain financial stability. The financial policy statements are
reviewed annually and provide a framework for fiscal decision-making to ensure that
financial resources are available to meet the present and future needs of the citizens of
Watauga.

The benefits of a financial policy are:
▪ Improve and expedite the decision-making process by allowing elected officials
and staff to consider approaches to financial management from a long-term
perspective.
▪ Enhanced credibility with the public, investors, and bond-rating agencies.

▪ Provide a sense of continuity as changes occur among elected officials and staff.
• Provide a means for dealing with fiscal emergencies.

Financial policies should be reviewed periodically (at least annually) by the City Council
and revised and updated as necessary.

The following are the fiscal objectives of this policy:

• Revenues: Design, maintain, and administer revenues that will ensure reliable,
equitable, and sufficient amounts to support desired services.

➢ Balance and Diversify Revenue Sources: Maintain a balanced and diversified
revenue system to avoid adverse fluctuations in any one source due to changes
in economic conditions.

➢ Property Tax Revenues: Strive to reduce reliance on property tax revenues by
implementation of user fees, economic development, and revenue
diversification.
➢ User fees: Establish and collect fees to recover the costs for services that
benefit specific users. When feasible, the City shall recover full direct and
indirect costs. These fees should be reviewed on a regular basis to calculate
full-cost recovery levels, compare them with current structures, and
recommend adjustments when necessary.
➢ Utility/Enterprise Fund Service Fees: Utility rates shall be set at sufficient levels
to recover operating expenditures, meet debt obligations, provide funding for
capital improvements, and provide an adequate level of working capital. The
City should seek to eliminate all forms of subsidization to utility funds from the
General Fund.
➢ Administrative Service Charges: A method should be established to determine
the annual administrative service charges due the General Fund from

79