Ritzville City Council agrees to update city financial policies

The Ritzville City Council agreed to update its financial policies beginning next year, after approving Resolution No. 2019-18 at its Dec. 17 meeting.

The 16-page resolution was approved on a 6-1 vote, with councilmember Michelle Plumb voting nay. The beginning of the resolution states that the city is adopting these new policies to establish consistent guidelines for municipal fiscal budget and planning.

“It is the City’s goal to assure prudent financial management and responsible stewardship of the City’s financial and physical assets,” the resolution says.

Some of the city’s stated financial goals include:

-Ensure the financial integrity of the city;

-Manage the financial assets in a sound and prudent manner;

-Improve financial information for policy makers as they contemplate decisions that affect the city on a long-term basis;

-Improve financial information for department heads as they implement policy on a day-to-day basis.

The resolution covers 12 different areas of financial policy that the city deems “major,” such as revenue and expenditure policies, operating budget policies and cost allocation policies.

In terms of revenue, the resolution states that “revenue forecasts will be neither overly optimistic nor overly conservative. They will be as realistic as possible based on the best available information.”

In the event of a revenue shortfall, the resolution says that deficit financing and borrowing to support on-going operations will play a part. It also states that expenses will be reduced to conform to the long-term revenue forecast, and that interfund loans are permissible to cover temporary gaps in cash flows.

The city’s expenditure policies state that high priority will be given to expenditures that will reduce future operating costs, “such as increased utilization of technology and equipment and proven business methods.”

The resolution says that the city will also carefully examine all potential grants for matching requirements. If local matching funds for a potential grant cannot be justified, some grants may be turned down. They may also be rejected if programs must be continued with local resources after grant funds have been used.

In the city’s operating budget policies, more leeway has been given to the mayor to approve city purchases. For extraordinary purchases or capital items that cost $5,000 or less, those purchases may be reviewed and approved by the mayor. Purchases or items up to $10,000 are reviewed and approved by the Finance Committee, and purchases or items greater than $10,000 are approved by the council, after review and recommendation by the Finance Committee.