HomeMy WebLinkAbout(1996, 05/13) - F-3 - Amendedr
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BUDGET ADOPTION AND ADMINISTRATION
PURPOSE:
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To establish the policy for the preparation, adoption, and administration of the City's
Annual Budget.
POLICY:
Organization and Development of the Annual Budget - Each year the City
adopt, by formal Resolution, an annual budget as required by the Ci
provided for in the City's Budget Instructions. Throughout this r,
Committee will be involved as necessary to provide broad polic guic
the full City Council is detailed more specifically below.
The City programs expenditures by three class
Benefits, Maintenance and Operations, and Capital
are subdivided into Capital Outlay, which is ge
equipment or other purchases in excess of $51
generally deal with Public Works related improvy
purpose and function. /
Budgeted Expenditures for all three cle
by Department Budget Units, which u
the City's organizational structure; ai
within each Division Budget, there
Maintenance and Operations, and C
Projects, which are identified by
Budgets.
ill prepare and
Charter and as
ss, the Finance
ce. The role of
These are Salaries and
ditures. Capital Expenditures
used for items of operating
and Capital Projects, which
for a distinct and identifiable
is ions are aligned in the Budget Document
coincide with Operating Divisions withinIn
separately, by Capital Projects. Therefore
ill be sections for Salaries and Benefits,
1 Outlay. The section dealing with Capital
and purpose, is located after the Division
During December of each year, he Administrative Services Department shall prepare
preliminary fund balance es ates for the current year and preliminary revenues
estimates for the next
ja ear. In January of each year, the Administrative Services
Department shall prZra a budget calendar and issue budget instructions and
expenditure detail to department for use in preparation of the next year's City
budget. Included in ese instructions will be budget guidelines and appropriation
limits for each department. These guidelines will be developed by the Administrative
Services Director and approved by the City Manager.
After submission of revenue and appropriation requests by each department, the
Administrative Services Department shall summarize the requests for review by the
City Manager and department. After review by the City Manager and department, the
Administrative Services Department shall prepare the City's proposed budget for the
next fiscal year and shall submit said proposed budget to the City Council as required
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by the City's Charter and the Budget Instructions. Thereafter, the City Council shall •
hold as many budget study sessions as it deems necessary. Council budget study
sessions shall be recorded. All proposed Council changes in the City Manager's
proposed budget shall be added to a budget check list. Subsequent to Council review
and prior to its final adoption, the City Manager shall provide each Council Member
with an itemized list of all proposed changes to permit a roll call vote by the City
Council on each item during the budget hearing at the regular Council meeting.
The City Council shall hold a budget hearing and shall adopt a budget on or before
June 30 as required by the City Charter.
Administration of the Annual Budget - During the budget year, Department Heads and
their designated representatives may only authorize expenditures based on
appropriations previously approved by City Council action, and only from accounts
under their organizational responsibility. In addition, budget expenditures may only
be authorized in the year appropriated. Any unexpended appropriations, except valid
encumbrances, expire at fiscal year end unless specifically reappropriated by the City
Council for expenditure during the new fiscal year. Department Heads are responsible
for not authorizing expenditures above budget appropriations in any given area,
without additional appropriation or transfer as specified below.
New Appropriations. During the Budget Year, the City Council may appropriate
additional funds for special purposes by a City Council Budget Amendment. The City
Manager has authority to approve requests for budget increases not to exceed $1,000 in
any Budget Activity or Capital Project. (This must be specifically included in each
year's Budget Resolution to remain valid.) All budget amendments exceeding $30,000
shall be referred to the City Council Finance Committee for review and
recommendation before acted upon by the City Council, except (a) projects that have
received prior City Council approval; (b) donations on projects from sources other than
City funds; (c) emergencies in which time does not permit prior Council Finance
Committee review.
Transfers. During the fiscal year, actual expenditures may exceed budget
appropriations for specific expenditure line items within departmental budgets. If a
total departmental budget, within a specific Classification, is not exceeded, the
Administrative Services Director has the authority to transfer funds within that
Classification and department, to make the most efficient use of funds appropriated by
the City Council. (Salaries and Benefits, Maintenance and Operations, and Capital
Outlay are the Cites three Classifications.)
Realignments. Further, funds may be realigned between one Department Budget
Activity and another, within the same Classification, with City Manager approval. For
example, if a Fire & Marine Department function and the employee who accomplishes
it are replaced by a slightly different function assigned to the Police Department, the •
W
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City Manger may authorize the transfer of appropriate salary and benefit funds to
support this function.
Reprogramming. Any reprogramming of funds among the three Classifications
Salaries and Benefits, Maintenance and Operations, and Capital Outlay) requires the
City Manager's approval by Budget Amendment. The City Manager may authorize up
to $30,000 into or out of any Classification within any department budget activity
during the budget year. Any reprogramming of funds in excess of $30,000 requires
City Council approval.
Coital Projects. The Department Head having primary responsibility for a Project,
usually the Public Works Director, is authorized to actually encumber and approve
subsequent expenditure of City funds for Capital Projects. However, contracts in
excess of $30,000 require specific City Council authorization at the time of contract
award. In addition, any contracts not of format and wording already approved by the
City Attorney require specific City Attorney review and approval prior to contract
award.
Once a contract has been awarded, change orders may be approved by the Public
Works Director, or other Department Head having responsibility for the Project, so
long as the net total amount committed to the Project remains below 110% of the
original contract award amount; and so long as the original amount appropriated for
the Project by City Council is not exceeded. Change orders exceeding those thresholds
may be approved by the City Manager as follows:
Total project spending may not exceed 125% of the original contract award
amount without City Council approval.
The total amount authorized for a project may be increased by transferring
funds from one Project to another, so long as the new total does not exceed 110%
of the original amount appropriated by Council.
This must be specifically included in each year's Budget Resolution to remain
valid.)
In all instances, notification of any changes to capital project contract amount or budget
authority, must be communicated to the Administrative Services Director.
All unexpended and unencumbered capital projects will be canceled on June 30 of each
fiscal year. The appropriation balance of these canceled projects will be placed in a
Reserve for Capital Projects." All such canceled projects must compete with other
projects for funding priority in the new fiscal year. The balance in the Reserve for
Capital Projects will be utilized to fund new year capital projects at the level deemed
appropriate by the City Council.
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Reserves. Funds from unappropriated contingency reserves may be transferred to •
active Classification accounts only by City Council Budget Amendment.
City Manager and Administrative Services Director Responsibilities. The
Administrative Services Director is responsible for checking purchase requests against
availability of funds and authorization as per the approved Budget. The City Manager
is responsible for approving expenditures which do not conform with the approved
Budget, but which fall within the exceptions noted in this policy statement. It is the
responsibility of the City Manager to administer the City's budget within the
framework of policy and appropriation as approved by the City Council.
Special City Council Expenditure Approval. Once the final Budget has been approved
by the City Council, specific City Council approval to make expenditures consistent
with the Budget will not be required, with two exceptions (see also Purchasing and
Accounts Payable Procedures):
Capital Projects in excess of $30,000.
Consultant Contracts in excess of $30,000.
All other budget administration actions, including the routine filling of vacancies in
staff positions authorized within the Budget, will not require further City Council
approval. However, new positions and other new expenditures do require City •
Council approval, and the City Council and City Manager reserve the right to impose
any special fiscal control measures, including a personnel hiring freeze, and other
spending controls, whenever circumstances warrant. Since the annual Budget is
approved by formal Resolution, a request by a City Council Member for review of a
portion or portions of the Budget, with a view toward changing amounts appropriated
or the purposes for which they were appropriated, requires a majority vote of the City
Council and will be referred to the Council Finance Committee for recommendation.
Fiscal Year End Closing - (Note: This policy was rescinded in error in 1991 and should
be rewritten and reinstated.) The Administrative Services Director has the authority to
close the books of accounts of the City of Newport Beach in accordance with generally
accepted governmental accounting principles as established by the Government
Accounting Standards Board, Government Finance Officers Association, and other
appropriate accounting or auditing pronouncements.
Adopted - January 24, 1994
Amended - February 27,1995
Corrected - February 26, 1996
Amended - May 13,1996
Formerly F -10, F -11, F -12, F -21 •
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