City of Pittston, PA Budget, Financial and Debt Management Policy

The City fiscal year shall begin on January 1 and end on December 31.

Disbursements.

[Amended 3-21-2018 by Res. No. 12101]

Authorization required. No disbursement of funds shall be made without authorization and appropriations in accordance with § C11.08 of the Home Rule Charter;

Interfund operating transfers. No interfund operating transfers shall be executed except as appropriated in the adopted budget and under warrant of the City Administrator;

Restricted funds. Use of special purpose revenue funds, enterprise funds, trust funds, proprietary funds, capital project funds, and any other type of restricted use funds shall be strictly limited to uses permitted under applicable enacting legislation.

Designated signatories. Checks issued for duly authorized payments from any city account or fund shall be signed by the City Treasurer, City Controller and a member of the City Council designated by the City Council.

Automated clearing exchanged (ACH) remittances ACH transactions shall be made by the City Treasurer with approval from the City Administrator.

(f)

Payroll clearing account. The payroll clearing account (payroll fund) shall be within the general fund. Disbursements from this fund shall be direct deposit with advice of credit forms provided to each employee. ACH and checks issued from this account shall follow all applicable policies of the city.

(g)

Vacancy in City Controller position. In the event of a vacancy in the position of City Controller (Chapter 61), the City Administrator shall immediately designate in writing a qualified member of the Administration Department to fulfill all of the duties of the City Controller.

(h)

Imprest (petty cash) fund.

Custody. The imprest fund shall be in the custody of the City Treasurer.

[2]

Accounting. The City Treasurer shall maintain accounting records for the imprest fund in accordance with the city accounting and auditing policies.

[3]

Disbursements. No disbursement shall be made from the imprest fund without a receipt approved by the City Administrator or his designee.

Appropriations, other than capital appropriations, shall lapse at the end of the fiscal year unless specifically authorized by law to continue in accordance with § C11.09 of the Home Rule Charter.

The budget shall consist of a general fund and such special purpose and other designated funds as authorized by law. All revenue and expenditures not specifically authorized and appropriated to a special purpose or other designated fund shall be budgeted and appropriated within the general fund.

(5)

Each fund shall be organized by revenue and expense category at the department or function level, to a level of line-item detail not less than a separation for personnel services, nonpersonnel services and debt service. The City Administrator shall determine the level of budget line-item detail required below department by personnel and nonpersonnel services, based on practical and efficient accounting and the need to track programmatic expenditures.

(6)

The Pennsylvania state government chart of accounts shall be used as a general guide to the numbering and organization of budget line items and the tracking of revenue and expenditures. For the liquid fuels fund, all requirements of the Pennsylvania State Department of Transportation and guidelines of the Pennsylvania State Auditor General Office shall be followed.

(7)

Emergency appropriations in accordance with § C11.07 of the Home Rule Charter may be made following the declaration of an emergency by the Mayor of the City in accordance with § C3.04J of the Home Rule Charter. The City Council may, by resolution, establish policies and procedures for emergency appropriations and expenditures during a declared emergency.

Budget formulation policies.

Proposed budget. In accordance with §§ C4.04B, C11.02 and C11.03 of the Home Rule Charter, the City Administrator shall provide to the Mayor and City Council a proposed budget in the form of an ordinance for all funds of the City budget not later than October 31 of the preceding year. The City Administrator shall include a budget message with the transmittal of the proposed budget that shall detail major changes from the previous year and specify any new programs or programs to be ended.

Balanced budget. The proposed budget shall be balanced for all funds. Expenditures shall not exceed the sum total of anticipated revenue and available fund balance.

Revenue. The budget shall include all anticipated revenue and a summary of the assumptions made to project the revenue. Any changes to existing revenue ordinances or the enacting of new separate revenue ordinances required to adopt the budget as presented shall be noted.

Revenue cap. The proposed budget revenue shall adhere to the revenue cap established in § C11.06A of the Home Rule Charter.

Homestead property tax deduction. The proposed budget property tax revenue must include the anticipated effects on property tax revenue of the homestead deduction required by § C11.06D of the Home Rule Charter.

Fund balance/reserves.

[Amended 9-16-2020 by Res. No. 12454]

Designated and/or reserved fund balance may be used only in accordance with the designated and reserved purpose. Undesignated and unreserved fund balance may be appropriated for general or specified purposes. Sufficient fund balance as determined by the City Administrator in consultation with the City Treasurer and City Controller shall be retained to ensure available cash flow and for unanticipated contingencies.

Adoption of standards. The City of Pittston hereby adopts the definitions and standards set forth in Governmental Accounting Standards Board (GASB) Statement Number 54, Fund Balance Reporting and Governmental Fund Type Definitions, as the basis for defining fund type and fund balances for all appropriated funds. Furthermore, the City of Pittston will follow the guidance of the "best practice" for fund balance as set forth by the Government Finance Officers Association (GFOA) entitled "Fund Balance Guidelines for the General Fund."

Unreserved and undesignated fund balance levels. The City establishes a policy for unreserved and undesignated fund balance levels for each appropriated fund:

General fund. The City hereby establishes a goal to develop and maintain an unreserved, unrestricted (unassigned) fund balance for the general fund equal to not less than 5% of the appropriated general fund budget, with a long-term goal of attaining an unrestricted and unreserved fund balance of two months' average operating expenditures.

[2]

Sewer maintenance fund. The City will maintain an unrestricted and unreserved fund balance of not less than 25% of the annual appropriated budget in order to ensure the ability to always make debt service payments from this fund in full and on time while maintaining operational funding.

[3]

Liquid fuels fund. The City will maintain an unrestricted and unreserved fund balance of not less than 50% of the annual appropriated budget to support the annual pay-go capital road resurfacing project while ensuring operational funding given the variability of winter weather costs.

Annual review and determination of fund balance reserve amounts. Compliance with the provisions of this policy shall be reviewed as a part of the annual budget adoption process, and amounts of the minimum level of unrestricted and unreserved (unassigned) fund balance for each appropriated fund shall be determined during this process.

(5)

Expenditures. The budget shall include all anticipated expenditures and a summary of assumptions made to project the expenditures, including for personnel services, nonpersonnel services, employer pension contributions, insurance, utilities and debt service. Any changes to existing expenditure authorization ordinances or the enacting of new separate expenditure authorization ordinances required to adopt the budget as presented shall be noted.

(6)

Public inspection. In accordance with § C11.03 of the Home Rule Charter, following introduction, the proposed budget shall be available for public inspection for a period of not less than 30 days. A copy of the proposed budget shall be available in the office of the City Administrator during normal business hours for public inspection. The City Administrator may also direct that the proposed City budget or a summary of the budget be posted on the City website. Printed copies of the City proposed budget shall be available at the normal document copying cost as set by resolution of the City Council.

(7)

Budget adoption. In accordance with § C11.03 of the Home Rule Charter, the City Council shall, following the thirty-day public inspection period, but prior to January 1, enact the budget by approving the budget ordinance with or without amendment, except that any amendments approved shall increase expenditures beyond the certified total of anticipated revenue and available fund balance unless provision is also made to increase the revenue, and no amendment shall be approved that shall reduce any expenditure required by law to fund existing debt service, to meet existing unpaid obligations or to fund existing collective bargaining agreements. The public shall be afforded a chance to comment on the budget prior to its adoption. The public may provide written comments to the City Council or address the City Council in public session in accordance with the rules of the City Council for public testimony.

(8)

Failure to adopt budget. If the City Council fails to adopt a budget by January 1, in accordance with § C11.04 of the Home Rule Charter, the proposed budget as introduced by the City Administrator shall become the approved budget.

Budget administration policies.

In accordance with § C4.04G of the Home Rule Charter, the City Administrator shall provide a monthly summary report of the actual year-to-date expenditures and revenue compared to the budget level to the City Council.

On a quarterly basis, the City Administrator shall provide to the Mayor and each member of the City Council and to the City Controller a comprehensive year-to-date budget report showing the actual expenditures and actual revenue compared to the budget levels for each line item for each fund of the approved City budget.

The City Council may, at any time, by motion or resolution, request a budget report or analysis from the City Administrator.

Approved budget reports shall be available for public inspection. Copies of budget reports shall be available for purchase at the regular document-copying cost as approved by resolution of the City Council.

Budget amendment and supplemental appropriations policies.

Budget amendment following election. In the January following a municipal election, the approved budget may be adopted by the City Council in accordance with the provisions of § C11.05 of the Home Rule Charter.

Budget amendment. Whenever actual or anticipated revenues and expenditures change from the budgeted level or are expected to change from the budgeted level, the City Administrator may recommend to the City Council that the approved budget be amended by resolution or ordinance in accordance with the provisions of § C11.05 of the Home Rule Charter. No budget amendment shall increase the total expenditures unless supported by an increase in total revenue.

Supplemental appropriation. When the City receives a grant, the proceeds of authorized borrowing, a donation, or other allocation whose receipt and expenditure was previously approved by the City Council, the City Administrator shall be authorized to receive and disburse such appropriation as provided by law, and the City Council shall, by resolution, amend the budget to show the receipt and disbursements in the actual amounts.

Budget and policies for private donations.

The City Administrator is authorized to accept private donations to the City government for general or specified purposes and authorize the expenditure of such funds for authorized purposes. The City Administrator shall prepare written regulations for how private donations shall be handled.

All donations shall be entered into the accounting system of record in the general fund and budgeted transparently in the general fund and subject to audit by the City Controller and as part of the annual audit process. Private donations shall be treated as City revenue and shall be remitted to the City Treasurer.

No City employee or officer shall solicit or accept private donations except as authorized by the City Administrator.

The City Council and City Controller may request a report from the City Administrator and City Treasurer on private donations received and expended.

§ 23-2.1 Staffing.

[Added 1-20-2021 by Res. No. 12516]

To facilitate the development, implementation, monitoring and management of the Budget, Financial and Debt Management Policy, the City Administrator shall have the assistance of the following City staff and officials: Director of Operations (Pittston City Code § 7-2A); the City Controller (Pittston City Code § 61-9); and the City Comptroller (Pittston City Code § 61-11).

§ 23-3 Debt management policies.

The following policies on debt management shall be followed by the City of Pittston:

Debt management policies.

The City of Pittston shall adhere to the Pennsylvania Local Government Unit Debt Act[1] and all other applicable state laws and regulations in the issuance of debt.

Editor's Note: See 53 Pa.C.S.A. § 8001 et seq.

The following policies shall be followed for incurring long-term debt:

Adherence to the Local Government Unit Debt Act.

Borrowing shall be undertaken only when necessary.

Borrowing shall be accomplished at the lowest possible interest rate and the most favorable terms, including retaining favorable options for future refinancing in the event of a change in financial conditions.

Borrowing should be for capital improvement, economic development or unfunded debt as authorized by law and not to support recurring regular operational costs.

Overall borrowing of nonelectoral debt shall be within the limits of the Local Government Unit Debt Act, and the annual impact of servicing costs for proposed electoral debt must be clearly set forth in the referendum for electoral debt.

(f)

Necessary debt service for authorized debt shall be included in the annual approved budget and the long-term plan.

The following policies shall be followed for incurring lease rental debt:

Adherence to the Local Government Unit Debt Act.

Borrowing shall be undertaken only when necessary.

The length of the lease shall not exceed the projected service life of the financed equipment or vehicle.

Necessary debt service for authorized debt shall be included in the annual approved budget.

The following policies shall be followed for incurring tax revenue anticipation notes (TRANs):

To ensure adequate cash flow, the City may take out an annual TRAN as recommended to the City Council by the City Administrator in consultation with the City Treasurer.

Such borrowing shall be undertaken only when necessary.

Necessary debt service for the interest on the TRAN shall be included in the annual approved budget.

The City Administrator shall report to the City Council with the required budget reports the current balance on the TRAN and shall inform the City Council when the TRAN is repaid.

§ 23-4 Long-term planning policies.

The following policies on long-term planning shall be followed by the City of Pittston:

Long-term plan, budget and financial. By December 31, 2014, the City Administrator shall prepare and submit to the City Council a five-year budget financial plan to the City Council accounting for necessary capital improvements to the City's infrastructure, public property, and City equipment. Each subsequent year, the City Administrator shall update and extend the plan by at least one year and submit the same with the proposed annual budget.

Comprehensive Plan.

By December 31, 2014, the City Administrator shall make a recommendation to the City Council on the creation of a Comprehensive Plan for the future development of the City. The recommendation shall detail the scope of the plan, a time line for development, and an estimated cost.

The City Planning Commission and Office of Community Development and any other designated City offices, departments, boards and commissions shall assist in the development and execution of this plan.

The final Comprehensive Plan shall be approved by ordinance of the City Council.

§ 23-5 Violations and penalties.

Anyone who willfully violates any provision of this policy shall be subject to the disciplinary provisions of § C12.06 of the Home Rule Charter and/or the existing personnel policy, administrative regulations and ordinances of the City.

§ 23-6 Financial management policies.

[Added 7-18-2018 by Res. No. 12144]

Policy for collection of delinquent fees.

Delinquent refuse fee collection policy.

Establishment and administration of receivables. Any refuse fee levied pursuant to Pittston City Code § 412-15 that remains due and unpaid at the end of the fiscal year shall be deemed a receivable for financial accounting purposes for seven fiscal accounting years. Any such debt older than seven fiscal accounting years shall be deemed bad debt and written off in the accrual accounting records of the City but such action shall not prevent the continued attempted collection of said debt.

Procedure for attempted collection of delinquent accounts. On an annual basis, the City Treasurer shall provide to the City Administrator a comprehensive list of all of the delinquent refuse accounts for pursuit of collection of said delinquencies as follows:

Late notices. The City Administrator shall on an annual basis have a late notice sent to all delinquent refuse accounts demanding payment within 30 days or that the matter will be referred to the City Solicitor.

[2]

Liens. After the late notices have been served and time for payment is elapsed, the City Administrator may direct the City Solicitor to place liens on the properties with the outstanding delinquent accounts for which fiscal analysis deems the costs of placing such liens to be cost effective and to the extent for which the cost of placing the liens shall have been appropriated in the annual general fund budget. The City Solicitor shall provide the method and notification procedure for the placement of such liens and all of the legal and administrative costs associated with the placement of the liens shall be added to the lien amount for cost recovery. The placement of such liens shall be reported to the independent auditor.

[3]

Additional enforcement. Nothing shall prevent the City Administrator and/or City Council from taking any and all means as provided by law and ordinance to further collect outstanding delinquent refuse accounts, including, but not limited to additional notices, the placement of liens, assignment to a third-party collection company, lawsuit, or any other applicable method.

Delinquent sewer maintenance fee collection policy.

Establishment and administration of receivables. Any sewer fee levied pursuant to Pittston City Code Chapter 386, Article IV that remains due and unpaid at the end of the fiscal year shall be deemed a receivable for financial accounting purposes for seven fiscal accounting years. Any such debt older than seven fiscal accounting years shall be deemed bad debt and written off in the accrual accounting records of the city but such action shall not prevent the continued attempted collection of said debt.

Procedure for attempted collection of delinquent accounts. The financial policy for the collection of delinquent sewer fees levied pursuant to Pittston City Code Chapter 386, Article IV shall be as set forth in Pittston City Code §§ 386-19 through 386-21.

Policy for fixed asset valuation.

Establishment of fixed asset inventory. In order to comply with requirements established for auditing set forth by the Government Standards Accounting Board (GASB), the City shall maintain a fixed asset inventory that is used in the preparation of the annual financial statements and independent audit. This inventory shall be prepared and maintained by a vendor qualified to perform such duties as defined by GASB. The fixed asset inventory shall be provided to the independent auditor annually. The City Administrator shall report all changes to the fixed asset inventory to the vendor to update the fixed asset schedule as necessary. Changes include but not are limited to the acquisition and sale of property and equipment applicable to the inventory and material changes to the same that would affect the valuation.

Appropriation. The City Council shall appropriate such funds as may be required in the annual general fund budget for the establishment and maintenance of the fixed asset inventory.

Criteria for valuation. The City defines a "fixed asset" as being any real property owned by the City of Pittston as well as any equipment owned by the City of Pittston that has a value of $5,000 or greater and a life expectancy of seven years and greater. The criteria may be altered by the City Administrator upon recommendation from the independent auditor, the fixed assets vendor, or regulations set by GASB and the same shall be reported to the City Council.

Policy for post-employment benefits (GASB 75).

[Amended 8-21-2019 by Res. No. 12291]

Establishment of other post-employment benefits (OPEB) liability policy. To maintain best practices in accounting and auditing, the City of Pittston does hereby adopt Government Standards Accounting Board (GASB) policy GASB 75, "Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pensions."

Preparation of GASB 75 Report. To comport with regulations for auditing set forth by the Government Standards Accounting Board (GASB), specifically GASB 75 "Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions," the City shall contract with a qualified vendor to provide the required OBEP valuation for inclusion in the annual financial statements and independent audit.

Appropriation. The City Council shall appropriate such funds as may be required in the annual general fund budget for the establishment and maintenance of the OBEP valuation.

Transmittal. The City Administrator shall transmit copies of the OPEB 75 reports as received to the City Council, the City Controller and the Independent Auditor and maintain copies on file in the administrative offices.

Policy for pension funding (GASB 68).

Establishment of pension funding liability policy. To comport with regulations for auditing set forth by the Government Standards Accounting Board (GASB), specifically GASB 68 "Accounting and Financial Reporting for Pensions," the City shall contract with a qualified vendor to provide the required GASB 68 valuation for inclusion in the annual financial statements and independent audit.

Appropriation. The City Council shall appropriate such funds as may be required in the annual general fund budget for the establishment and maintenance of the GASB 68 valuation.

One-time revenue use policy. One-time (nonrecurring) revenue shall be utilized to support nonrecurring costs including pay-go capital expenditures. One-time revenue shall not be used to support recurring costs nor included in long-term financial planning to support recurring costs.

[Added 2-19-2020 by Res. No. 12380]

Investment policy.

[Added 2-19-2020 by Res. No. 12380]

Short-term investments: Pursuant to any statutory limitations on arbitrage, the City Treasurer shall prudently invest idle cash and fund balance so as to maximize interest earnings. Short-term investments shall be fluid to ensure availability for cash flow, and depositories shall be those authorized by the City Council.

Long-term investments: City pension funds shall be invested in accordance with long-term investment policies and procedures as set forth by the City Council and City Pension Boards and more fully set forth in Chapter 68.

Containment of risk. The following policies are designed to limit risk to City finances:

[Added 2-19-2020 by Res. No. 12380]

Insurances. The City shall obtain cost-effective third-party insurance for workers compensation, general liability, public officials liability, automobile, inland marine, property, crime, fire, police liability, cybersecurity, fiduciary and any and all other such risk as deemed prudent by the City Administrator and City Council and in such levels of coverage as recommended given the City's size and risk factors. The City Administrator shall, on an annual basis, review levels of coverage and cost of said insurance to make appropriate recommendations to the City Council for approval and appropriation for the cost of the same.

Employee and officials bonds. Any employee or official required to be bonded by this Code, state law, or third-party insurance requirements shall be bonded at the cost of the City. The City Administrator shall ensure all such bonds be in place.

Continuity of operations. To ensure continuity of operations, all City financial data shall be backed up in an off-site location. The City Administrator, in coordination with the City Emergency Management Agency Director, shall promulgate policies and procedures for continuity of financial operations in the event of an emergency.

Fund balance policy. It shall be the long-term financial goal policy of the City to develop a fund balance for each appropriated fund that will provide for 60 days of working capital.

[Added 2-19-2020 by Res. No. 12380]

Fiscal impact statements. The City Administrator and/or the City Council may request a short-term and/or long-term fiscal impact statement from the City Budget Director prior to the approval of any ordinance, resolution or contract which is determined to have a fiscal impact, either in the current fiscal year or in a forthcoming fiscal year. Such statement shall include a forecast, adjusted for projected inflation and other fiscal factors known at the time of the analysis. The Budget Director shall submit such fiscal impact statements to the City Administrator.

[Added 2-19-2020 by Res. No. 12380]

Policy for fiduciary activities (GASB 84). The City hereby adopts Governmental Accounting Standards Board (GASB) 84 Fiduciary Activities, effective for all activities after December 15, 2018.

[Added 2-19-2020 by Res. No. 12380]

Policy for disclosure of tax abatements (GASB 77).

[Added 3-17-2021 by Res. No. 12541]

Adoption of standards. The City of Pittston hereby adopts Governmental Standards Accounting Board (GASB) Statement No. 77, "Tax Abatement Disclosures," as the auditing disclosure policy for all tax abatements approved by the Pittston City Council.

Applicability. The City Independent Auditor shall include all required disclosures pursuant to GASB 77 within the annual independent audit and financial statements required by state law and Home Rule Charter § C10.02.