City of Alexandria, Virginia
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MEMORANDUM
DATE: NOVEMBER 6, 2019
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
FROM: MARK B. JINKS, CITY MANAGER /s/
DOCKET TITLE:
TITLE
Consideration of Modifications to the City's Debt-Related Financial Policies.
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ISSUE: Modifying the City's financial policies to reflect an updated level of General Fund Fund Balance as a ratio of the City's General Fund Revenues,
RECOMMENDATION: That City Council adopt the proposed amendments to the City's Debt-Related Financial Policies (Attachment 1) in order to:
(1) Establish a Target of 15 percent for the Spendable Fund Balance as a percent of the General Fund Revenues.
(2) Delete Unassigned/Uncommitted Fund Balance as a percentage of General Fund Revenue as a measure; and
(3) Establish a replenishment policy to prioritize repayment of fund balance following draw down.
BACKGROUND: The City's Debt-related Financial Policies were initially adopted in 1987. These guidelines when they were adopted were considered innovative by the national bond rating agencies, and those debt-related financial policies have been used as a model by many other localities. The policies were substantially updated in 1997. With the exception of a few minor changes since then, these policies have continued to guide Council and staff in financing the 10-year Capital Improvement Program of the City, managing the impact of debt service on the operating budget and maintaining adequate fund balances to cope with unexpected financial problems or emergencies.
The City has established policies to help guide financial decisions, provide financial discipline, and ensure that spending decisions are made through the lens of sound financial management. In the United States there are 282 cities, counties and towns who possess a Aaa rating from Moody's Investor Service out of a possible 25,859 entities. The City...
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