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Resolution 2005-33 RESOLUTION NO. 200S-33(R) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WYLIE, TEXAS, ADOPTING FINANCIAL MANAGEMENT POLICY, PROVDING FOR PURPOSE OF THIS POLICY, PROVIDING FOR ACCOUNTING, AUDITING AND FINANCIAL REPORTING, PROVIDING FOR INTERNAL CONTROLS, PROVIDING FOR OPERATING BUDGET, PROVIDING CAPITAL BUDGET AND PROGRAM; PROVIDING FOR REVENUE MANGEMENT, PROVIDING FOR EXPENDITURE CONTROL, PROVIDING FOR ASSET MANAGEMENT, PROVIDING FOR FINANCIAL CONDITION AND RESERVES, PROVIDING FOR DEBT MANAGEMENT, PROVIDING FOR STAFFING AND TRAINING, PROVIDING FOR GRANTS FINANCIAL MANAGEMENT, PROVIDING FOR ANNUAL REVIEW AND REPORTING. WHEREAS, the goal of the Financial Management Policies is to enable the city to achieve a long-term stable and positive financial condition while conducting its operations consistent with the Council-Manager form of government established in the City Charter; and WHEREAS, the purpose of the Financial Management Policies is to provide guidelines for the financial management staff in planning and directing the city's day to day financial affairs; and WHEREAS, the City Council desires to adopt the City of Wylie Financial Management Policies. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WYLIE, that the Financial Management Policie attached hereto, is adopted as the Financial Management Policies of the City effective November 17, 2005. DULY PASSED AND ADOPTED by the City Council ofthe City of Wylie, Texas this 1 ih day of November 2005. - ~ ~ , ~- ~ ' ~\l:;<o\, ..;"'~ C " "'"Y, ~ ~~",.+",-;l" ,\>--::>" '>, t'L IE ''''t.-i-- ", Ilff ' ,\ \\" ffllllll!:\\\ ATTESTED BY: Resolution No. 2005-33(R) Amendment ofInvestment Policy Prepared by the Finance Department City of Wylie Financial Management Policies Adopted by the City Council TABLE OF CONTENTS I. PURPOSE STATEMENT II. ACCOUNTING, AUDITING AND FINANCIAL REPORTING A. Accounting B. Funds C. External Auditing D. External Auditors Responsible to City Council E. External Auditors Rotation F. External Financial Reporting III. INTERNAL CONTROLS A. Written Procedures B. Internal Audit C. Department Managers Responsible IV. OPERATING BUDGET A. Preparation B. Balanced Budgets C. Planning D. Reporting E. Control F. Performance Measures and Productivity Indicators V. CAPITAL BUDGET AND PROGRAM A. Preparation B. Control C. Program Planning D. Alternate Resources E. Debt Financing F. Street Maintenance G. Water/Wastewater Main Rehabilitation and Replacement H. General Government Capital Reserve 1. W ater/W astewater Capital Reserve J. Reporting VI. REVENUE MANANGEMENT A. Simplicity B. Certainty C. Equity D. Administration 2 E. Revenue Adequacy F. Cost/Benefit of Abatement G. Diversification and Stability H. Non-Recurring Revenues 1. Property Tax Revenues J. Parks and Recreation 4B Sales Tax Revenues K. User-Based Fees L. Impact Fees M. General and Administrative charges N. Utility Rates O. Parks and Recreation 4B Fund Balance P. Utility Fund Balance Q. Interest Income R. Revenue Monitoring VII. EXPENDITURE CONTROL A. Appropriations B. Vacancy Savings and Contingency Account C. Contingency Account Expenditures D. Central Control E. Purchasing F. Professional Services G. Prompt Payment H. Information Technology VIII. ASSET MANAGEMENT A. Investments B. Cash Management C. Investment Performance D. Fixed Assets and Inventory IV. FINANCIAL CONDITON AND RESERVES A. No Operating Deficits B. Interfund Loans C. Operating Reserves D. Risk Management Program E. Loss Financing F. Enterprise Fund Self-Sufficiency x. DEBT MANAGEMENT A. General B. Self-Supporting Debt C. Analysis of Financing Alternatives D. Voter Authorization XI. STAFFING AND TRAINING 3 A. Adequate Staffing B. Training XII. GRANTS FINANCIAL MANAGEMENT A. Grant Solicitation B. Responsibility XIII. ANNUAL REVIEW AND REPORTING A. Annual Review B. Reporting 4 I. PURPOSE STATEMENT The overriding goal of the Financial Management Policies is to enable the city to achieve a long-term stable and positive financial condition while conducting its operations consistent with the Council-Manager form of government established in the City Charter. The watchwords of the city's financial management include integrity, prudent stewardship, planning, accountability, and full disclosure. The purpose of the Financial Management Policies is to provide guidelines for the financial management staff in planning and directing the city's day-to-day financial affairs and in developing recommendations to the City Manager. The scope of the policies spans accounting, auditing, financial reporting internal controls, operating and capital budgeting, revenue management, cash management, expenditure control and debt management. II. ACCOUNTING, AUDITING, AND FINANCIAL REPORTING A. ACCOUNTING - The city's Accounting Manager is responsible for establishing the chart of accounts, and for properly recording financial transactions. B. FUNDS - Self-balancing groups of accounts are used to account for city financial transactions in accordance with generally accepted accounting principles. Each fund is created for a specific purpose except for the General Fund, which is used to account for all transactions not accounted for in other funds. Funds are created and fund names are changed by City Council C. EXTERNAL AUDITING - The city will be audited annually by outside independent auditors. The auditors must be a CPA firm of national reputation, and must demonstrate that they have the breadth and depth of staff to conduct the city's audit in accordance with generally accepted auditing standards, generally accepted government auditing standards, and contractual requirements. The auditors' report on the city's financial statements including any federal grant single audits will be completed within 120 days ofthe city's fiscal year end, and the auditors' management letter will be presented to the city staff within 150 days after the city's fiscal year end. An interim management letter will be issued prior to this date if any materially significant internal control weaknesses are discovered. The city staff and auditors will jointly review the management letter with the City Council within 60 days of its receipt by the staff. 5 D. EXTERNAL AUDITORS RESPONSIBLE TO CITY COUNCIL - The external auditors are accountable to the City Council and will have access to direct communication with the City Council if the city staff is unresponsive to auditor recommendations or if the auditors consider such communication necessary to fulfill their legal and professional responsibilities. E. EXTERNAL AUDITOR ROTATION - The city will not require external auditor rotation, but will circulate requests for proposal for audit services periodically, normally at five-year intervals or less. F. EXTERNAL FINANCIAL REPORTING - The city will prepare and publish a Comprehensive Annual Financial Report (CAFR). The CAFR will be prepared in accordance with generally accepted accounting principles, and will be presented annually to the Government Finance Officers Association (GFOA) for evaluation and possibly awarding of the Certification of Achievement for Excellence in Financial Reporting. The CAFR will be published and presented to the City Council within 120 days after the end of the fiscal year. City staffing limitations may preclude such timely reporting. In such case, the Finance Director will inform the City Manager and the City Manager will inform the City Council of the delay and the reasons therefore. III. INTERNAL CONTROLS A. WRITTEN PROCEDURES - The Finance Director is responsible for developing city-wide written guidelines on accounting, cash handling, and other financial matters which will be approved by the City Manager. The Finance Department will assist department managers as needed in tailoring these guidelines into detailed written procedures to fit each department's requirements. B. INTERNAL AUDIT - The Finance Department may conduct reviews of the departments to determine if the departments are following the written guidelines as they apply to the departments. Finance will also review the written guidelines on accounting, cash handling and other financial matters. Based on these reviews Finance will recommend internal control improvements as needed. C. DEPARTMENT MANAGERS RESPONSIBLE - Each department manager is responsible to the City Manager to ensure that good internal controls are followed throughout his or her department, that all guidelines on accounting and internal controls are implemented, and that all independent and internal auditor internal control recommendations are addressed. IV. OPERATING BUDGET 6 A. PREPARATION - The city's "operating budget" is the city's annual financial operating plan. It consists of governmental and proprietary funds, including the general obligation Debt Service Fund, but excluding capital projects funds. The budget is prepared by the City Manager with the assistance of the Finance Department and cooperation of all city departments. The City Manager transmits the document to the City Council. The budget should be presented to the City Council no later than August 5, and should be enacted by the City Council prior to fiscal year end. The operating budget may be submitted to the GFOA annually for evaluation and possible awarding of the Award for Distinguished Budget Presentation. B. BALANCED BUDGETS -An Operating budget will be balanced, with current revenues, exclusive of beginning resources, greater than or equal to current expenditures/expenses. C. PLANNING - The budget process will be coordinated so as to identify major policy issues for City Council D. REPORTING - Periodic financial reports will be prepared to enable the department managers to manage their budgets and to enable the Budget Manager to monitor and control the budget as approved by the City Council. Summary financial reports will be presented to the City Council within 45 days after the end of each quarter. Such reports will include current year revenue and expenditure projections. E. CONTROL - Operating Expenditure Control is addressed in another section of the Policies. F. PERFORMANCE MEASURES AND PRODUCTIVITY INDICATORS - Where appropriate, performance measures and productivity indicators will be used as guidelines and reviewed for efficiency and effectiveness. This information will be included in the annual budgeting process and reported to the City Council at least quarterly. V. CAPITAL BUDGET AND PROGRAM A. PREPARATION - The city's capital budget will include all capital projects funds and all capital resources. The budget will be prepared annually on a fiscal year basis and adopted by ordinance. The capital budget will be prepared by the City Manager with assistance from the Finance Department and involvement of all required city departments. 7 B. CONTROL - All capital project expenditures must be appropriated in the capital budget. Finance must certify the availability of resources so an appropriation can be made before a capital project contract is presented by the City Manager to the City Council for approval. C. PROGRAM PLANNING - The capital budget will include capital improvements program for future years. The planning time frame should normally be five years. The replacement and maintenance for capital items should also be projected for the next five years at a minimum. Future maintenance and operations will be fully costed, so that these costs can be considered in the operating budget. D. AL TERNA TE RESOURCES - Where applicable, assessments, impact fees, or other user-based fees should be used to fund capital projects which have a primary benefit to certain property owners. E. DEBT FINANCING - Recognizing that debt is usually a more expensive financing method, alternative financing sources will be explored before debt is issued. When debt is issued, it will be used to acquire major assets with expected lives that equal or exceed the average life of the debt issue. The exceptions to this requirement are the traditional costs of marketing and issuing the debt, capitalized labor for design and construction of capital projects, and small component parts which are attached to major equipment purchases. F. STREET MAINTENANCE - The city recognizes that deferred street maintenance increases future capital costs by an estimated 5 to 10 times. Therefore, the City's goal is to allocate a portion of the General Fund budget each year to maintain the quality of streets. The amount will be established annually so that repairs will be made amounting to a designated percentage of the value of the streets. G. WATERlWASTEWATER MAIN REHABILITATION AND REPLACE- MENT - The city recognizes that deferred water/wastewater main rehabilitation and replacement increases future costs due to loss of potable water from water mains and inflow and infiltration into wastewater mains. Therefore, to ensure that the rehabilitation and replacement program is adequately funded, the City's goal will be to dedicate an amount equal to at least 1 % of the undepreciated value of infrastructure annually to provide for a water and wastewater main repair and replacement program H. GENERAL GOVERNMENT CAPITAL RESERVE - A reserve will be maintained for general governmental capital projects. The reserve will be funded with operating surpluses, interest earnings, and payment-in-lieu-of- taxes. The reserve will be used for temporary loans to other capital loans, for major capital outlay and for unplanned projects. As soon as practicable after 8 each fiscal year end when annual operating results are known, any General Fund operating surplus in excess of budget which is not required to meet ending resources requirements may be transferred to the reserve with the approval of the City Council. The reserve will be used for temporary loans to other capital funds, for street maintenance, for major capital outlay and for unplanned projects. I. WATER AND WASTEWATER CAPITAL RESERVE - A reserve will be maintained for water and wastewater capital projects. The reserve will be funded with operating surpluses, interest earnings and transfers in from water and wastewater operations equal to at least 1 % of the undepreciated value of infrastructure. As soon as practicable after each fiscal year end when annual operating results are known, any W ater/W astewater Fund operating surplus in excess of budget which is not required to meeting ending resources requirements may be transferred to the reserve with the approval of the City Council. The reserve will be used for temporary loans to other capital funds, for water/wastewater main rehabilitation and replacement, for major capital outlay and for unplanned projects. J. REPORTING - Periodic financial reports will be prepared to enable the department managers to manage their capital budgets and to enable the finance department to monitor the capital budget as authorized by the City Manager. Summary capital projects status reports will be presented to the City Council quarterly beginning in April 2006. VI. REVENUE MANAGEMENT A. SIMPLICITY - The city will strive to keep the revenue system simple which will result in a decrease of compliance costs for the taxpayer or service recipient and a corresponding decrease in avoidance to pay. The city will avoid nuisance taxes, fees, or charges as revenue sources. B. CERTAINTY - An understanding of the revenue source increases the reliability of the revenue system. The city will try to understand its revenue sources, and enact consistent collection policies so that assurances can be provided that the revenue base will materialize according to budgets and plans. 9 C. EQUITY - The city will strive to maintain equity in the revenue system structure. That is, the city will seek to minimize or eliminate all forms of subsidization between entities, funds, services, utilities and customers. However, it is recognized that public policy decisions may lead to subsidies in certain circumstances, e.g., senior citizen property tax exemptions or partial property tax abatement. D. ADMINISTRATION - The benefits of revenue will exceed the cost of producing the revenue. The cost of collection will be reviewed annually for cost effectiveness as a part of the indirect cost, and cost of services analysis. E. REVENUE ADEQUACY - The city will require that there be a balance in the revenue system. That is, the revenue base will have the characteristic of fairness and neutrality as it applies to cost of service, willingness to pay, and ability to pay. F. COST/BENEFIT OF ABATEMENT - The city will use due caution in the analysis of any tax, fee, or water and wastewater incentives that are used to encourage development. A cost/benefit (fiscal impact) analysis will be performed as a part of such analysis and presented to the appropriate entity considering using such incentive. G.DIVERSIFICATION AND STABILITY - In order to protect the government from fluctuations in revenue source due to fluctuations in the economy, and variations in weather (in the case of water and wastewater), a diversified revenue system will be maintained. H. NON-RECURRING REVENUES - One-time revenues will not be used for ongoing operations. Non-recurring revenues will be used only for non- recurring expenditures. Care will be taken not to use these revenues for budget balancing purposes. I. PROPERTY TAX REVENUES - Property shall be assessed at 100% of the fair market value as appraised by the Collin County Central Appraisal District. Reappraisal and reassessment shall be done regularly as required by State law. A 97% collection rate will serve as a minimum for tax collection, with the delinquency rate of 3% or less. The 97% rate is calculated by dividing total current year tax collections for a fiscal year by the total tax levy for the fiscal year. All delinquent taxes will be aggressively pursued, with delinquents greater than 150 days being turned over to the City Attorney or a private attorney, and a penalty assessed to compensate the attorney as allowed by State law, and in accordance with the attorney's contract. Annual performance criteria will be developed for the attorney regarding the collection of delinquent taxes.. 10 J. PARKS AND RECREATION 4B SALES TAX REVENUE - Parks and Recreation 4B sales tax revenue shall supplement but not supplant the funding for the Parks and Recreation System in the General Fund. No more than 40% of Parks and Recreation 4B sales tax revenue may be used for operations. At least 60% of the revenue will be dedicated to capital expenditures and debt service for Parks and Recreation System improvements and for associated reserves. K. USER-BASED FEES - For services associated with a user fee or charge, the direct and indirect costs of that service will be offset by a fee where possible. There will be an annual review of fees and charges to ensure that fees provide adequate coverage of costs and services. User charges may be classed as "full cost recover," "partial costs recover," and "minimal cost recovery," based upon City Council policy. L. IMP ACT FEES - Impact fees will be imposed for water, wastewater, and transportation in accordance with the requirements of State law. The staff working with the particular impact fee shall prepare a semi-annual report on the capital improvement plans and fees. Additionally, the impact fees will be re-evaluated at least every three years as required by law. M. GENERAL AND ADMINISTRATIVE CHARGES - A method will be maintained whereby the General Fund can impose a charge to the enterprise funds for general and administrative services (indirect costs) performed on the enterprise funds' behalf. The details will be documented and said information will be maintained in the Finance Department for review. N. UTILITY RATES - The city will review utility rates annually and, if necessary, adopt new rates to generate revenues required to fully cover operating expenditures, meet the legal restrictions of all applicable bond covenants, and provide for an adequate level of working capital needs. This policy does not prelude drawing down cash balances to finance current operations. However, it is best that any extra cash balance be used instead to finance capital projects. O.PARKS AND RECREATION 4B FUND BALANCE - The Parks and Recreation 4B Fund Balance shall be established to protect property tax payers from excessive volatility caused by the fluctuations in the Parks and Recreation 4B sales tax revenue. It will be funded with revenues of the Parks and Recreation 4B Fund. The city's goal will be to maintain the Fund Balance at 25% of the annual Parks and Recreation 4B sales tax budgeted revenue. P. UTILITY FUND BALANCE - The Utility Fund shall maintain a Fund Balance to protect ratepayers from excessive utility rate volatility. It may not be used for any other purpose. It will be funded with surplus revenues of the 11 Utility Fund. The City's goal will be to maintain the Utility Fund Balance at 36 days of budgeted operating expenditures. Q. INTEREST INCOME - Interest earned from investment of available monies, whether pooled or not, will be distributed to the funds in accordance with the operating and capital budgets which, wherever possible, will be in accordance with the equity balance of the fund from which monies were provided to be invested. R. REVENUE MONITORING - Revenues actually received will be regularly compared to budgeted revenues and variances will be investigated. This process will be summarized in the appropriate budget report. VII. EXPENDITURE CONTROL A. APPROPRIATIONS - The level of budgetary control is the department level budget in the General Fund, and the fund level in all other funds. When budget adjustments (i.e., amendments), among departments and/or funds are necessary these must be approved by the City Council. Budget appropriation amendments at lower levels of control shall be made in accordance with the applicable administrative procedures. B. VACANCY SAVINGS AND CONTINGENCY ACCOUNT - The General Fund Contingency Account will be budgeted at a minimal amount ($50,000). The contingency account balance for expenditures will be increased quarterly by the amount of available vacancy savings. C. CONTINGENCY ACCOUNT EXPENDITURES - The City Council must approve all contingency account expenditures over $25,000. The City Manager must approve all other contingency account expenditures. The City Council will be informed of all contingency account expenditures of $10,000 or more by memorandum from the City Manager. The Finance Department is responsible for submitting this memorandum to the City Manager based on information submitted by the spending department. D. CENTRAL CONTROL - Significant vacancy (salary) and capital budgetary savings in any department will be centrally controlled by the City Manager. E. PURCHASING - All purchases shall be made in accordance with the city's purchasing policies as defined in the Purchasing Manual. Authorization levels for appropriations previously approved by the City Council in the Operating Budget are as follows: Below Directors $500.00, for Directors up to $1,000, for Finance Director up to $2,500 and for the City Manager up to $25,000 with any purchases exceeding $25,000 to be approved by the City Council. 12 F. PROFESSIONAL SERVICES - Professional services will generally be processed through a request for proposals process, except for smaller contracts. The City Manager may execute any professional services contract except for insurance less than $25,000 provided there is an appropriation for such contract. While City Council approval of other contracts less than $25,000 is not required, the Finance Department will inform the City Manager who will then inform the City Council by memorandum, whenever a professional services contract of $1 0,000 or more is approved. G. PROMPT PAYMENT - All invoices will be paid within 30 days of receipt in accordance with the prompt payment requirements of State law. Procedures will be used to take advantage of all purchase discounts where considered cost effective. However, payments will also be reasonably delayed in order to maximize the city's investable cash, where such delay does not violate the agreed upon terms. H. INFORMATION TECHNOLOGY - Certain information technology acquisitions will be centrally funded from the Information Technology Division. Acquisitions from this division may include all related professional services costs for researching and/or implementing an information technology project. Annual funding for replacements and for new technology will be provided through transfers from the major operating funds (General Fund, Utility Fund, and Parks and Recreation 4B Fund), based on the relative amount of their budgeted ending resources. Additional funding above the base amount may be provided for major projects with available one-time sources including debt proceeds. VIII. ASSET MANAGEMENT A. INVESTMENTS - The city's investment practices will be conducted III accordance with the City Council approved Investment Policies. B. CASH MANAGEMENT - The city's cash flow will be managed to maximize the cash available to invest. C. INVESTMENT PERFORMANCE - A quarterly report on investment performance will be provided by the Finance Director to the City Manager for presentation to the City Council. D. FIXED ASSETS AND INVENTORY - These assets will be reasonably safeguarded and properly accounted for, and prudently insured. IX. FINANCIAL CONDITION AND RESERVES A. NO OPERATING DEFICITS - Current expenditures will be paid with current revenues. Deferrals, short-term loans, or one-time sources will be 13 avoided as budget balancing techniques. Reserves will be used only for emergencies on non-recurring expenditures, except when balances can be reduced because their levels exceed guideline minimums. B. INTERFUND LOANS - Non-routine interfund loans shall be made only in emergencies where other temporary sources of working capital are not available and with the approval of the City Council. At the time an interfund loan is considered, a plan to repay it prior to fiscal year end shall also be considered. A fund will only lend money that it will not need to spend for the next 365 days. A loan may be made from a fund only if the fund has ending resources in excess of the minimum requirement for the fund. Loans will not be made from the city's enterprise funds (Water/Wastewater, etc.), except for projects related to the purpose of the fund. Total interfund loans outstanding from a fund shall not exceed 15% of the target fund balance for the fund. If any interfund loan is to be repaid from the proceeds of a future debt issue, a proper reimbursement resolution will be approved at the time the loan is authorized. C. OPERATING RESERVES - Failure to meet these standards will be disclosed to the City Council as soon as the situation is recognized and a plan to replenish the ending resources over a reasonable time frame shall be adopted. 1. The General Fund ending fund balance will be maintained at a level 15% of budgeted expenditures. 2. The Utility Fund ending fund balance will be maintained at a level 25% of budgeted expenditures. 3. The Parks and Recreation 4 B Fund ending fund balance will be maintained at a level 25% of budgeted 4B revenues. D. RISK MANAGEMENT PROGRAM - The city will aggressively pursue every opportunity to provide for the public's and city employees' safety and to manage its risks. E. LOSS FINANCING - All reasonable options will be investigated to finance losses. Such options may include risk transfer, insurance and risk retention. Where risk is retained, reserves will be established based on a calculation of incurred but not reported claims, and actuarial determinations. Such reserves will not be used for any purpose other than for financing losses. F. ENTEPRISE FUND SELF-SUFFICIENCY - The city's enterprise funds' resources will be sufficient to fund operating and capital expenditures. The enterprise funds will pay (where applicable) their fair share of general and administrative expenses, in-lieu-of-property taxes and/or franchise fees. If an enterprise fund is temporarily unable to pay all expenses, then the City 14 Council may waive general and administrative expenses, in-lieu-of-property taxes and/or franchise fees until the fund is able to pay them. The City Council may pay out-of-pocket expenses that a fund is temporarily unable to pay with interfund loans, to be repaid at a future date. x. DEBT MANAGEMENT A. GENERAL - The city's borrowing practices will be conducted in accordance with the City Manager approved Debt Management Policies. B. SELF-SUPPORTING DEBT - When appropriate, self-supporting revenues will pay debt service in lieu of tax revenues. C. ANALYSIS OF FINANCING ALTERNATIVES - The city will explore all financing alternatives in addition to long-term debt including leasing, grants and other aid, developer contributions, impact fees, and use of reserves or current monies. D. VOTER AUTHORIZATION - The city shall obtain voter authorization before issuing General Obligation Bonds as required by law. Voter authorization is not required for the issuance of Revenue Bonds. However, the city may elect to obtain voter authorization for Revenue Bonds. XI. STAFFING AND TRAINING A. ADEQUATE STAFFING - Staffing levels will be adequate for the fiscal functions of the city to function effectively. Overtime shall be used only to address temporary or seasonal demands that require excessive hours. Workload scheduling alternatives will be explored before adding staff. B. TRAINING - The city will support the continuing education efforts of all financial staff including the investment in time and materials for maintaining a current perspective concerning financial issues. Staff will be held accountable for communicating, teaching, and sharing with other staff members all information and training materials acquired from seminars, conferences, and related education efforts. XII. GRANTS FINANCIAL MANAGEMENT A. GRANT SOLICITATION - The City Manager will be informed about available grants by the departments and will have final approval over which grants are applied for. The grants should be cost beneficial and meet the city's objectives. 15 B. RESPONSIBILITY - Departments will oversee the day to day operations of grant programs, will monitor performance and compliance, and will also keep the Finance Department informed of significant grant-related plans and activities. Departments will also report re-estimated annual revenues and expenses to the Finance Department after the second quarter of each year. Finance Department staff members will serve as liaisons with grantor financial management personnel, will prepare invoices, and will keep the books of account for all grants. Finance Department staff will also prepare and distribute quarterly grant status reports. XIII. ANNUAL REVIEW AND REPORTING A. These Policies will be reviewed administratively by the City Manager at least annually, prior to preparation of the operating budget and will be presented to the City Council for confirmation of any significant changes. B. The Finance Director will report annually to the City Manager on compliance with these policies. 16