R-313-94 Approving statement of village financial policiesITEM VI.B.2
RESOLUTION 3/3
RESOLUTION APPROVING
STATEMENT OF VILLAGE FINANCIAL POLICIES
WHEREAS, the Village of Lemont seeks to identify those financial policies and
procedures which will foster prudent fiscal management of public funds; and
WHEREAS, the Statement of Village Financial Policy provides guidelines on
budgetary matters, general financial management and capital improvement financing; and
WHEREAS, approval of this Statement will provide the staff and Village Board with
a basis for making future financial decisions.
NOW, 'THEREFORE, BE IT RESOLVED by the President and Board of Trustees
that the Village of Lemont Statement of Financial Policy is hereby adopted.
PASSED AND APPROVED BY THE PRESIDENT AND BOARD OF TRUSTEES OF
'1'HE VILLAGE OF LEMONT, COUNTIES OF COOK, WILL, AND DU PAGE, ILLINOIS,
on this - 5 —L1t day of , 1994.
Barbara Buschman
Alice Chin
Keith Latz
William Margalus
Richard Rimbo
Ralph Schobert
Approved by me this
ATTEST:
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AYES NAYS PASSED ABSENT
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CHARLENE M. SMOLLEN, Village Clerk
ENE M. SMOLLEN, Village Clerk
VILLAGE OF LEMONY
STATEMENT OF
FINANCIAL POLICY
April 1, 1994
Jean M. Nona, Treasurer
VILLAGE OF LEMONT
STATEMENT OF FINANCIAL POLICY
BUDGETARY POLICY
Revenue and Expenditure Estimates 1
Funding Expenses 1
Use of Carryover Funds 1
Fund Reserves 1
Balanced Budget 1
FINANCIAL MANAGEMENT
Debt Policy 2
Investment of Funds 2
Bond Payback Period 2
Use of Working Cash Fund 2
Disposal of Village Property 2
Accounting Manipulations 2
Labor Contract Financial Analysis 2
Maintenance of Municipal Assets 2
User Fees 3
Insurance Analysis 3
Deposit of Funds 3
Required Signators 3
Internal Financial Controls 3
Procedures Manual 3
Purchasing Manual 3
Village Board Approval of Accounts 3
Periodic Review of Policy 3
CAPITAL IMPROVEMENT FINANCING
Capital Improvement Program 4
Capital Planning Grants 4
Utility Extension 4
Special Assessment Consideration 4
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VILLAGE OF LEMONT
STATEMENT OF FINANCIAL POLICY
BUDGETARY POLICY
REVENUE AND EXPENDITURE ESTIMATES.
In preparing the budget, all revenues shall be projected conservatively, and all
expenditures shall be projected liberally.
FUNDING EXPENSES
Any proposed spending program must also be accompanied by a revenue plan to
fully meet the expenditure. As an alternative, new spending programs may be
presented with an offsetting reduction of expenses in another program.
USE OF CARRYOVER FUNDS
A previous year's carryover may be considered as revenue in a subsequent year,
however, only to fund specific items which were budgeted but not purchased in the
previous fiscal year.
FUND RESERVES
Accumulated fund reserves may be used as revenues to fund projects, provided that
they are either capital items, or an unforeseen expense specifically approved by the
Village Board.
BALANCED BUDGET
Unless a true emergency occurs, the Village Board shall not pass a budget in which
the proposed revenues are less than the proposed expenditures. If such an emergency
occurs, the Board must understand the cash balance for the fund will be reduced,
borrowing may have to occur, or revenues may have to be increased.
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FINANCIAL MANAGEMENT
DEBT POLICY
The Village will not borrow money to meet current expenses.
INVESTMENT OF FUNDS
All monies not needed for dispersal shall be invested at a competitive rate of return.
BOND PAYBACK PERIOD
When the Village finances capital projects by issuing bonds, it will pay back the
bonds within a period not to exceed the expected useful life of the project.
USE OF WORMING CASH FUND
The Village will use its Working Cash Fund only to avoid short term borrowing
expenses and will not use it to fund programs. The Working Cash Fund will be paid
back immediately when property taxes become available.
DISPOSAL OF VILLAGE PROPERTY
The money from the sale of property or equipment will normally not be used to meet
current operating expenses, but rather for the purchase and replacement of other
equipment or other assets.
ACCOUNTING MANIPULATIONS
The Village will avoid accounting manipulations which: 1) postpone current
expenses to future periods; or 2) accrue revenues from a future year to the current
fiscal year to make current revenues appear higher.
LABOR CONTRACT FINANCIAL ANALYSIS
The Village will avoid entering into long -term labor contracts without carefully
costing out fringe benefits. Such costs include health insurance, vacation /holiday
leave, sick leave, education provisions, etc.
MAINTENANCE OF MUNICIPAL ASSETS
The Village will maintain its utilities, streets, buildings and other assets at a level
adequate to protect the Village's capital investment and to minimize future
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maintenance and replacement costs.
USER FEES
The Village will periodically recalculate the full costs of activities supported by user
charges to identify the impact of inflation and other cost increases. User charges
will be adjusted accordingly.
INSURANCE ANALYSIS
The Village shall periodically investigate if insurance pools will save money as
compared to alternative insurance coverage. The Village will also periodically
investigate levels of coverage.
DEPOSIT OF FUNDS
The Village and any persons representing the Village will remit to the Finance
Department all monies received to be deposited in designated financial institutions
in a timely manner.
REQUIRED SIGNATORS
The Village will require all disbursements, interfund and intrafund transfers to be
signed by two of the three authorized signators which have been approved via Village
Board resolution.
INTERNAL FINANCIAL CONTROLS
The Village will establish internal controls within the Finance Department which will
physically separate the functions of collection, deposition and reporting of monies
received as much as possible.
PROCEDURES MANUAL
The Finance Department shall maintain a Procedure Manual outlining procedures
for the receiving of Village funds.
PURCHASING MANUAL
The Finance Department shall monitor purchasing activity to insure it complies with
requirements of the Purchasing Manual.
VILLAGE BOARD APPROVAL OF ACCOUNTS
No accounts shall be opened or closed without Village Board approval via a
resolution.
PERIODIC REVIEW OF POLICY
This Statement of Financial Policy shall be reviewed periodically.
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CAPITAL IMPROVEMENT FINANCING
CAPITAL IMPROVEMENT PROGRAM
The Village shall maintain a five year capital improvement plan and update it
annually. It will acquire and replace all equipment and undertake all construction
projects only in accordance with the plan. The Village will not propose any
equipment purchase or project in the budget unless it has been anticipated in the
capital improvement program.
CAPITAL PLANNING GRANTS
Because state and federal grants tend to have local match requirements and may
result in long -term financial commitments, the Village will seek grants to finance
only those capital improvements that are consistent with the capital improvement
plan.
UTILITY EXTENSION
The cost of extending utilities and improvements in new subdivisions will be paid by
the developers or benefiting residents rather than the general public, unless
oversizing or some engineering issue warrants Village participation.
SPECIAL ASSESSMENT CONSIDERATION
Special assessments or special service areas will be considered to make
improvements in existing subdivisions.
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