KC Skyline

City Clerk Web Search

Search the Ordinances:

Legislation #: 140424 Introduction Date: 5/29/2014
Type: Ordinance Effective Date: none
Sponsor: None
Title: Amending Chapter 2, Code of Ordinances, Article XIV, Budgetary and Financial Policies, Division 1, Financial Planning Policies by enacting one new section, Section 2-1955, Structurally Balanced Budget Policy.

Legislation History
DateMinutesDescription
5/28/2014 Filed by the Clerk's office
5/29/2014 Referred to Finance, Governance & Ethics Committee
6/4/2014 Do Pass
6/5/2014 Assigned to Third Read Calendar
6/12/2014 Passed

View Attachments
FileTypeSizeDescription
140424.pdf Authenticated 224K Authenticated
140424 Fiscal Note.pdf Fiscal Note 14K Fiscal Note
140424 Fact Sheet.pdf Fact Sheet 21K Fact Sheet

Printer Friendly Version

ORDINANCE NO. 140424

 

Amending Chapter 2, Code of Ordinances, Article XIV, Budgetary and Financial Policies, Division 1, Financial Planning Policies by enacting one new section, Section 2-1955, Structurally Balanced Budget Policy.

 

WHEREAS the National Advisory Council on State and Local Budgeting recommends cities and counties develop strategies to facilitate attainment of programs and financial goals; and

 

WHEREAS, the Government Finance Officers Association establishes best practices for a structurally balanced budget; and

 

WHEREAS, the City Council adopted a strategic plan for the City with the passage of Resolution No. 130025; and

 

WHEREAS the strategic plan includes, among other items, the City Council’s intent to adopt a plan to develop a structurally balanced budget by fiscal year 2015-16 to fund basic services adequately; and

 

WHEREAS, a structurally balanced budget results in the City funding recurring services with recurring revenue; NOW, THEREFORE,

 

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

 

Section 1. That Chapter 2, Code of Ordinances of the City of Kansas City Missouri, is hereby amended by enacting one new section to read as follows:

 

Sec. 2-1955. Structurally Balanced Budget Policy.

 

(a)    Policy. It is the policy of the City to maintain a structurally balanced budget to assure the City’s ability to sustain agreed upon service levels. The City’s structurally balanced budget policy is the City's official source for developing sustainable service delivery on an annual basis.

 

(b)   Authority. Under the authority granted by the Constitution of the State of Missouri and the City Charter, the City Council is authorized to direct the financial affairs of the City. It is the City Council's intent to use this authority responsibly in order to fulfill the service objectives of the City. Management’s responsibility for the structurally balanced budget policy is delegated to the Director of Finance.

 

(c)    Scope. The structurally balanced budget policy is inclusive of all governmental activity of the City and incorporates recommended best practices of the Government Finance Officers Association (GFOA), National Advisory Council on State and Local Budgeting (NACSLB) and the City’s Forging Our Comprehensive Urban Strategy (FOCUS) Governance Plan.

 

(d)   Definitions.

 

(1)               Non-recurring expense. A charge or expense that is unlikely to occur again in the normal course of business.

 

(2)               Non-recurring revenue. A revenue gain or increase of an infrequent or unique nature that is unlikely to occur again in the normal course of business.

 

(3)               Recurring expense. A cost that is highly likely to occur annually such as salaries, benefits, materials, services, and asset maintenance costs.

 

(4)               Recurring revenue. The portion of a government’s revenues that can reasonably be expected to continue year-to-year, with some degree of predictability.

 

(5) Reserves. The portion of fund balance set aside as a hedge against the risks of underperforming revenue streams.

 

(6) Structurally balanced budget. A budget that supports financial sustainability for multiple years into the future.

 

(7) Year-end surplus. Funds not expended within the fiscal year to fund services that are recurring or non-recurring.

 

(e)    Guidelines for Structurally Balanced Budget.

 

(1)               The City shall annually adopt a balanced budget, which requires recurring revenue to be equal to or exceed recurring operating expenses.

 

(2)               Increases in expenses, decreases in revenue, or a combination of the two shall be used to balance the budget.

 

(3)               Non-recurring revenues shall be used to fund non-recurring expenses under normal circumstances.

 

(4)               Any year-end operating surpluses shall revert to the unappropriated fund balance to assist in reaching the required reserve levels as set by the Fund Balance and Reserve Policy. Any surplus above the required levels may be used to support one-time expenses only.

 

(5)               The City shall assure decision makers and stakeholders have information during all phases of the budget process, including but not limited to, the current financial condition of the City, the impact of the proposed or actual budget, and the outlook and trends.

 

(6)               The City shall adjust its policies, plans, programs and management strategies during a current budget period, as appropriate, to stay within funds available. In addition, the City shall use its long-term financial planning and budget processes to develop a strategy that provides details for using and replenishing fund balance to levels outlined in the Fund Balance and Reserve Policy.

 

(7)               The City shall identify major revenue sources it considers unpredictable and define how those revenues may be used.

 

(8)               The City shall develop a policy to guide the financial actions it shall take in the event of emergencies, natural disasters, downturns in the economy, or other unexpected events. The policy shall include methods of regaining a structural balance if draws on reserves are required.

 

_____________________________________________

 

Approved as to form and legality:

 

 

___________________________________

Cecilia Abbott

Assistant City Attorney