CITY COUNCIL WORKSHOP AGENDA PACKET

Page 14 of 16 services and programs and address the significant deference maintenance needs. Budget Policies and Principles Key Financial Policies Financial policies provide guidelines for financial decision-making and set the strategic intent for financial management. Financial policies promote long-term thinking, manage risks to financial conditions, and ensure best practices are utilized by an organization. The City’s key financial policies include: • Investment Policy—The policy was comprehensively reviewed and updated in FY 2022/23. The City Council approved the policy in June 2023 and re-adopted it in June 2024 as part of the annual review. • Purchasing Policy – The policy was last updated and approved by the City Council in April 2024. • Debt Management Policy – The policy was reviewed as part of the 2024 Water Bond issuance in June 2024. There were no recommended changes from the finance team. • Reserve Policy – The policy was updated and approved by the City Council in June 2023 as part of the budget adoption. 1. The reserve target and reserve range for the General Fund and key Enterprise Funds (Water and Sewer) are presented below. It should be noted that Water and Sewer revenues and other restricted resources cannot be used to support General Fund operations. • General Fund: Reserve range: 16.7% to 25% Target: 20% • Water Fund and Sewer Fund: Reserve range: 30% to 40% Target: 35% Budget Principles The City is always guided by the GFOA general principles in developing the budget. 1. Establish broad goals to guide government decision making 2. Develop approaches to achieve goals 3. Develop a budget consistent with approaches to achieve goals 4. Evaluate performance and make adjustments. For the upcoming two-year budget development, additional discussion and alignment around Page 16 of 109