CITY OF IONE  FINANCE COMMITTEE MEETING TIUASDAY,UIY2S,BA Diane Wratten, Vice Mayor Dominic Atlan, Councilmember 1E.Main Street, Ione, CA 95640  6:00 PM  The Agenda is also available on City's Website: www.ione-ca.com  A. CALL TO ORDER  B.  PLEDGE OF ALLEGIANCE  C. ROLL CALL  D. PUBLIC COMMENT: EACH SPEAKER IS LIMITED TO 4  MINUTES  NOTE: This is the time for members of the public who wish to be heard on matters that do not appear on the Agenda. Persons may address the Finance Committee at this time on any subject within the jurisdiction of the Finance Committee. Is there any person in the audience who wishes to address the  Committee at this time? E. DISCUSSTION ITEMS:  1. Loan for Captial improvements to WWIP/Tertiary  F.  PRESENTATIONS: None G. REGULAR AGENDA:  1. Review and Discuss Interfund Loan repayments for 2024-25 2. Review the City ofIone's Purchase and Bidding Ordinance and discuss a  Purchase and Bidding Policy  H. ADJOURNMENT  ADA COMPLIANCE STATEMENT  In compliance with the American with Disabilities Act, ifyou need special assistance toj participate in this meeting, please contact City Clerk Janice Traverso at (209) 274-2412, ext. 102. Notification 24 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting.    CITYOFIONE IONE, CA 95640  FOR  Agenda Item #G1  DATE: TO: FROM:  JULY25,2025 FINANCE COMMITTEE  JODI STENECK, FINANCE MANAGER  SUBJECT: INTERFUND LOAN REPAYMENTS FOR: 2024-25  RECOMMENDED ACTION:  Provide recommendation to bring to the City Council regarding interfund loan repayments for  2024-25. FISCAL IMPACT: To be determined BACKGROUND: 2 fiscal year. DISCUSSION: payoff.  The City of Ione has provided interfund loans throughout the years and for the last few years have been paying the minimum on each loan. Attached is the balance and payments for the last  Staffi is recommending paying above the minimum, where funds are available, to escalate the  ATTACHMENTS: Interfund Loans Recap to 6.30.2024 Fund balances as of 6-2024        Account  Description  Amount 1,898,580.77 187,269.00 262,177.00 1,325,023.91 1,011,574.18 2,427,382.21 1,047,816.98 163,841.33 48,924.61 10,131.05 1,206,518.60 55,070.67 85,615.20 778.51 161.60 323,581.05 101,222.42 63,964.56 557,954.87 2,932.23 152,762.61 16,849.21 -1,393.47 10,000.35 296,319.05 695,837.03 1,062,747.52 1,166,895.83 -237,153.60 253,383.08 126,972.45 1,763,012.58 142,477.96 24,615.92 326,584.18 983,963.61 2,761.91 534,830.99 722,789.45 8,563.55 53,715.10 14,787,109.24  1111-00-1000 GENERAL FUND 1222-00-1000 GENERAL FUND OPERATING RESERVE 1333-00-1000 GENERAL FUND CAPITAL RESERVE 2111-00-1000 GASTAX 3111-00-1000 WWTP- OPERATION & MAINT. 3121-00-1000 SEWER CIP 3131-00-1000 TERTIARY PLANT 4211-00-1000 TRANSP. COMMISION LOCAL 5117-00-1000 FEMA - SAFER GRANT (FIRE) 5118-00-1000 CALIFORNIA SURCHARGES 5119-00-1000 COVID RELIEF 7112-00-1000 REHAB HOUSING TRUST GRANT 7113-00-1000 LOW INCOME HOUSING GRANT 7114-00-1000 97 HOME 0260 GRANT 7115-00-1000 01 HOME 5180 GRANT 7116-00-1000 FIRST TIME HOMEBUYERS GRANT 7117-00-1000 06 HOME 2370 GRANT 7118-00-1000 05STBG 1381 GRANT 7119-00-1000 08 HOME 4711 GRANT 7120-00-1000 10 HOME 6852 GRANT 7121-00-1000 SELF HELP HOUSING GRANT 8211-00-1000 CONSERVATION MAINT. FIRE BREAK 8221-00-1000 LIGHTING & LANDSCAPE DIST1C 9111-00-1000 CFD COMMUNITYI FACILITIES DIST 9511-00-1000 IMPACT FEES-F FIRE DEPT 9513-00-1000 IMPACTI FEES-PD 9514-00-1000 IMPACTI FEES-P PARKS 9515-00-1000 IMPACTI FEES- GENERAL PLAN 9516-00-1000 IMPACTI FEES- - GENERAL ADMIN 9517-00-1000 CITY DRAINAGE CIP 9518-00-1000 IMPACT FEES - LOCAL TRAFFIC MITIG. 9519-00-1000 IMPACT FEES- REGIONAL TRAFFICI MIT. 9520-00-1000 RAILROAD DEPOT PARK 9612-00-1000 COPS 9613-00-1000 MEASURE M FIRE 9614-00-1000 PUBLIC SAFETY- - PROP 172 9670-00-1000 RESTRICTED POLICE 9675-00-1000 RESTRICTED FIRE 9721-00-1000 ASSET SEIZURE  8231-00-1000 ARSA  9731-00-1000 AFFORDABLE HOUSING DEV. FEE  Total    CITYOFIONE IONE, CA 95640  Agenda Item #G2  DATE: TO: FROM:  JULY25,2025 FINANCE COMMITTEE  JODI STENECK, FINANCE MANAGER  SUBJECT: REVIEW THE CITY OF IONE'S PURCHASE AND BIDDING  ORDINANCE AND FINANCIAL POLICIES AND PROCEDURES  HANDBOOK  RECOMMENDED ACTION: Procedure Handbook. FISCAL IMPACT: N/A BACKGROUND:  Review both the City ofIone's Purchase and Bidding ordinance and the Financial Polices and  The City of Ione last updated the Purchase and Bidding Ordinance in November 2019 and the Financial Policies and Procedure Handbook was created in June 2015 with an amendment  regarding Debt Issuance and Management Policy in May 2018.  DISCUSSION:  At the last City Council meeting, staff was directed to review the Purchase and Bidding ordinance and policies to determine ifa any changes were needed. It was also suggested that staff  insure that they adhere to the ordinance and policies. City of Ione's Purchase and Bidding Ordinance  ATTACHMENTS:  Amendment to the Financial Policies and Procedures Handbook - May 2018 City ofl Ione Financial Policies and Procedures Handbook - June 2015    7/18/24, 12:15F PM  lone, CAC Code of Ordinances  Chapter 2.44- PURCHASING ANDI BIDDING POLICY  Sections: Footnotes: --(4)--  Editor's note- Ord.No. 505, adopted November 6, 2019, amended Chapter 2.441 ini itse entirety to read asi herein set out. Former Chapter: 2.44, S5 2.44.010--2.44.120, pertained tot the purchasing department, and derived from Ord. No. 133, 1968; Ord. No. 436, adopted September 21, 2010and  Ord.No.462, adopted March 19, 2013.  2.44.010- Established. office director. O0d.A0.505-11-16209, 2.44.020-Intent.  The City of lonel hereby establishes a purchasing and bidding policy under the direction of the city manager and finance  The purchase and bidding policy provides ai fair and equitable process for alli interested and qualified vendors in providinga bid tot the city. The city will make an award ina ar manner consistent with the city purchase and! bidding policy. Any exceptions to this policy must be approved byt the city council. The city council may, byr majority vote andi in accordance withi its fiduciary responsibilities, approve expenditures of any amount, for any length of term, not otherwise inconsistent witha any applicable  law.  (Ord.No.505 11-16-2019) 2.44.030,2.44.040- -Reserved. 2.44.050- Duties.  The duties of the city manager and/or finance office director, or their designee, shall be to make and provide all purchases  ofmaterials and services for the city:  A. As are required and requested by the various departments and activities of the city which are usual, normal and necessary for the achievement of the end objective of said departments and are within and contemplated by B.A Asr requested by various departments and as specifically authorized byt the city council, whether included within  the regularly adopted budget oft the city for said department or departments; and  orw without the then valid budget for said city.  (Ord.No.505 11-16-2019) 2.44.060- Rules, regulations and definitions.  The city purchasing department will set up and submit to the city council, for its approval, and within 60 days after the appointment by the city council of the purchasing agent, proposed rules and regulations with respect to thep policy of purchasing, the manner of purchasing andt the coordination of such purchases with budgetary provisions andi limitations, and,  aboutblank  1/21    7/18/24, 12:15F PM  lone, CA Code of Ordinances  when such rules and regulations have been adopted byt the city council, then, and continuing from the date of said adoption until otherwise modified, such rules and regulations shall afford direction to the city purchasing department and to the city  purchasing agent in the exercise of the duties, responsibilities and authority granted byt this chapter.  Definitions:  "City manager" means the appointed city manager or a designee authorized to act on behalf oft the city manager. "Department director" means the city employee or consultant. authorized to act as the head ofa city department or  authorized designee acting on behalf of the director, regardless of title.  (Ord.No.505, 11-16-2019) 2.44.070- Chapter not to affect state law.  No provision int this chapter abrogates or alters the! basic legal requirements for competitive bidding for materials and  services where otherwise required by state law. (Ord.No.505 11-16-2019) 2.44.080-Local preference program.  A. Definition. "Local business" means a vendor, contractor, or consultant who has paid its local business tax to the City of lone at least 24 months prior tol bid or proposal opening date; does business in the City ofl lone by providing goods, services, or construction; and maintains ap physical business address located within the 95640 ZIP Code and performs business within such geographical limit on a day-to-day basis. Post office boxes shall not be used fort the purpose ofe establishing said physical address. However, should there be al lack of bids bya al local business, preference will be next given to bidders within Amador County and then to all others in that order. B. Local Preference in Purchasing. In bidding for, or letting contracts for procurement of, supplies, materials, and equipment, as described in the purchasing policies of the city, the city council, or other authorized purchasing authority, may give a preference to local businesses in making such purchase or awarding contracts in an amount The total bid price shalli include not only the base bid price, but also all alterations to the base bid price resulting from alternatives which were both part of the bid and actually purchased or awarded by the city council or other appropriate  not to exceed five percent of the local business' total bid price.  authority.  : Local Preference for Services. In awarding contracts for services, including consultant services, preference to local businesses shall be given whenever practicable, and, the contractor or consultant will also, to the extent! legally permitted, solicit applications for employment and proposals for subcontractors and sub-consultants for work associated with the proposed contract from local residents and firms as opportunities occur and hire qualified local  residents andi firms whenever feasible.  D. Local Preference in Public' Works Contracts Sub-Contracting.  1.Acontractor: shall use goodf faith efforts to sub-contract the: supply of materials and equipment to local business enterprises and to sub-contract services to businesses whose work force resides within the 95640 ZIP Code. 2. A"good faith" effort, includes but is not limited to, the following or similar actions to recruit and maintain a work  force that resides within the 95640 ZIP Code.  a. Contact local recruitment sources toi identify qualified individuals.  b. Advertise in local trade papers and local newspapers of general circulation int the 95640 ZIP Code area.  aboutblank  2/21    7/18/24, 12:15PM  lone, CACode of Ordinances  Ifportions of the work are performed by subcontractors, identify qualified subcontractorsi whose workforce includes persons living within the 95640 ZIP Code or demonstrate that no local subcontractors are qualified  top perform the work or supply the materials ore equipment. d. Develop a written plan to recruit a work force within the 95640 ZIP Code.  Establish a goal for local hiring thati is based upon the types ofs skills needed to complete the project with the 3. Any notice inviting bids that may require the use of subcontractors shalli include notification oft this section. 4. Every bidder must complete and sign under penalty of perjurya certification of good-faith effort to hire av work force that resides within the 95640 ZIP Code or within Amador County if not within the City of lone, on thef form providedi int the City of lone's bid package, and submit said certification with the sealed bid no later than the date andt time of the! bid opening. Bidder shall attach to the certificate documentary evidence supporting bidder's promise to meet or make ag good-faith effort to meet the local hirings goal. The purchasing agent may reject as non-responsive the bid of any contractor proposing to use subcontractors that fails to comply witht the 5. Ift the city finds that a contractor to whom a city contract for public works has been awarded, ora a subcontractor listed by contractor on a public works project, has failed to comply with the good-faith requirement during the performance of the contract, the city may disqualify the contractor and/or subcontractors' for bidding or being listed in any! bid on any city contract for public works for a period of one year from the date oft the city's disqualification. The city clerk shall keep a current list of all disqualified contractors and subcontractors ont file. E. Exceptions to Local Business Preference Policy. The preference seti forth in this section shall not apply to the  city.  requirements of this subsection.  following purchases or contracts:  1. Goods or services provided under a cooperative purchasing agreement.  2. Purchases or contracts which are funded in whole ori in part by a governmental entity, other than the city, and thel laws, regulations, or policies governing such funding prohibit application of that preference. 3. Purchases made or contracts let under emergency or noncompetitive situations. the city council is the awarding authority may be waived att the city council's discretion.  4. Application oft the local business preference to a particular purchase, contract, or categoryof contracts for which  (Ord.No.505 11-16-2019) 2.44.090- Small business preference.  A. In thel bidding ofa a construction contract, procurement of goods, or delivery of services, the purchasing agent shall give a preference to as small business in an amount not to exceed five percent of the small business total price. The totall bid price shall include not only the base bid price, but also all alterations to the base bid price resulting from alternatives which were both part of the bida and actually purchased or awarded by the city council or other appropriate authority. This preference shall not be in addition to any preference granted under Section 2.44.080(B). B. Asused in this section, "small business" means a business entity that has for at least the 241 months prior to submittal of its bid: () held a current business license issued byt the city, and (i) maintains its principal business office within the 95640 ZIP Code, and thate either employs fewer than 100 employees or has average annual gross Nop preference shall be given pursuant to this section where legal constraints on the expenditure of funds prohibit  receipts of $10,000,000.00 or less over the previous three years.  the giving of such contract.  about:blank  3/21    7/18/24, 12:15F PM (Ord.No.505. 11-16-2019) 244.100-Verfication of preference eligibility.  lone, CA Code of Ordinances  A. Any vendor or consultant claiming tol be al local business or small business shall sO certify in the bidi iny writing. The purchasing agent shall not be requiredt to verify the accuracy of any such certifications, and shall havet the discretion to determine ifay vendor or consultant meets the definition of "local business" or' "small business." The decision of the purchasing agent declaring that any person or business is not al local business or small business shall be subject  to appeal. B. Enforcement.  1. Thei information furnished by each bidder requesting al local business or small business preference shall be 2. No person or business shall knowingly and with intent to defraud, fraudulently obtain, retain, attempt to obtain or retain, or aid another int fraudulently obtaining or retaining or attempting to obtain or retain certification asa 3. No person or business shall willfully and knowingly make af false: statement with the intent to defraud, whether by affidavit, report, or other representation, to a city official or employee for the purpose of influencing the certification or denial of certification of any entity as al local business or small business. 4. Abusiness which has obtained city certification as al local business or a small business by reason of having furnished incorrect supporting information or by reason of having withheld information, and which knew or should have known thei information furnished was incorrect or thei information withheld was relevant toi its request for certification, and which by reason of such certification has been awarded a contract to whichit a. Pay to the city any difference between the contract amount and what the city's costs would have been ift the b. Bes subject to debarment from future award of contracts from the city at the discretion of the city.  under penalty of perjury.  local business or small business for the purpose oft this chapter.  would not otherwise have been entitled, shall: contract had been properly awarded;  (Ord.No.505 11-16-2019) 2.44.110-C Quality and fitness.  The preferences established int this section shalli in no way be construed toi inhibit, limit or restrict the righta and obligation of the city council and the purchasing agent to compare quality and fitness for use ofs supplies, materials, equipment, and services proposed for purchase and to compare the qualifications, character, responsibility, and fitness of all persons, firms, or corporations submitting bids or proposals. In addition, the preferences established int this section shalli ini no way be construed top prohibit ther right of the city council or the purchasing agent from giving any other preference permitted byl law ort this  chapter.  (Ord.No.505 11-16-2019)  2.44.120-P Pre-qualification of bidders for public works projects.  A. The city manager may designate public works projects or parts thereof that require specialized skills or costi in  excess of $2,000,000.00 tol be subject to prequalification of bidders.  B.  about:blank  4/21    7/18/24, 12:15 PM  lone, CA Code of Ordinances  Tol become a prequalified bidder, a contractor must: submit to the citya ap prequalification application consisting ofa standardized questionnaire, financial statement, and statement of experience. The forms for the questionnaire, financial statement, and statement of experience willl be provided as part of the prequalification bidding packet.  The questionnaires and financial statements submitted by prospective contractors are not publicr records anda are not subject to public inspection. Records of the names of contractors applying for prequalification status are public records ands subject to disclosure. Documents submitted by a prospective contractor will be submitted under D. The city will rate prospective contractors in accordance with the rating system attached as Exhibit' "A" ("rating system"). The city will devise the questions, process and scoring of the rating system, so as tol best evaluate a contractor's ability to successfully complete a particular project. The city will complete the rating system prior to closing of the period for submission of pre-qualification packages for any given project or pre-qualification process. The rating system willl be applied uniformly and objectively to all prospective contractors, which haves submitted  penalty of perjury.  properly completed documents in accordance with this policy. Editor's note- Exhibit' "A" was noti included in the codification of this chapter.  The city may determine that only a certain number of the top scoring rated contractors shalll be considered prequalified for aspecific project. This determination shall be made prior to issuing the notice inviting pre-qualifications for the specific  project.  E. When the city uses this pre-qualification process, the only contractors eligible to submit al bid are prequalified contractors. Further, such contractors shall submit bids only naming a prequalified subcontractor, ift the city also pre-qualifies subcontractors in a similar manner: as prime contractors. Any bid received listing an unqualified subcontractor will automatically be disqualified. as nonresponsive. No bid shall be accepted for the project from F.A Acontractor's pre-qualification status will immediately terminate if: (1) the contractor fails to give the city written notice of changes int thei information previously provided within ten days before al bid opening; (2) the contractor's license is suspended or terminated byt the California State Licensing Board; (3) the contractor is convicted of any crime ofr moral turpitude; (4) the contractor's application contains materially faise information; or (5) the contractor's control over a public works contract, whether within the city's) jurisdiction or otherwise, ist terminated G. The city shall give written notice to each contractor of the pre-qualification determination for that contractor. A contractor may appeal a rating of' "not qualified,"i including a decision to revoke a previous qualified rating. Thereis no appeal from at finding that ac contractor is not pre-qualified because of af failure to submit required information, because of failure tos submit required information in a timely manner, because oft the omission ofr requested information or because of the falsification of information. Without a timely appeal, the contractor waives any and all rights to challenge the decision of the City of lone, whether by administrative process, judicial process, or any other  unqualified contractors.  for cause.  legal process or proceeding.  H. A contractor may appeal the decision as follows:  1. By giving written notice of appeal to the city manager no later than ten days after receipt of ther not qualified  rating.  2. The notice of appeal shall contain at least thet following:  a. Ther name, address and telephone number oft the person making the appeal;  b.  about:blank  5/21    7/18/24, 12:15F PM  lone, CA Code of Ordinances  A description oft the determination whichi is the subject of the appeal, and the date of the notice of determination; and  Abrief description oft the grounds for the appeal.  I. The city will provide the contractor with a written statement oft the basis for the not qualified determination and Thei informal hearing is to be concluded no later than five business days after the City of lone's receipt of the notice ofappeal, and no later than five business days prior tot the last date for the receipt of bids on the project. It is the intention of the City of lone that the date for the submission and opening of bids willr not be delayed or postponed <. 7 The city manager or designee shall hear the appeal. Thel hearing shall be ani informal one. The contractor may rebut evidence whichi is the basis for the determination and present evidence whyt the contractor is qualified. The city manager or designee may affirm the earlier determination or reverse the determination. and assigna different rating. This decision willl be in writing containing a summary of the facts that led to the decision. The decision of the city manager is final. Ad contractor shall have no right to appeal that decision to the council. M. The city manager may cancel the pre-qualification process at anyt time during the prequalification process, even after receiving and scoring applications. Ift the pre-qualification process is cancelled, the normal competitive bidding rules will apply. The city assumes no liability for the cost a prospective contractor may! have incurred by submitting anapplication for pre-qualification, and the submittal ofa pre-qualification application is a waiver to claim any such  supporting evidence received from others or adduced as a result of investigation.  toa allow for completion of an appeal process.  cost or losses duet to cancellation of the process.  (Ord.No.505, 11-16-2019) 244130-Adminstratve guidelines.  A. Vendor Limit. Combined purchase orders cannot exceed $50,000.00 per vendor, per fiscal year except int the case of major expenditures in which a vendor has participated in ap public formal bidding process. B. Change Orders or Amendments. A change order or amendment is a change in a contract term, other thana as specifically provided for int the contract, that authorizes or necessitates any increase or decrease oft the cost oft the contract ori int the time of completion that can be authorized byt the city manager or department director. A valid  request fora a change order or amendment must meet the following criteria: 1. The change was not reasonably foreseeable att the time that the contract was signed; 2. The change must be relevant to the original contract; and 3. The change is authorized byt the contract provisions and int the besti interest of the city.  Conflict of Interest. No employee, officer, councimember, or agent shall participatei int the selection, award, or administration of a contract if he or she has a real or apparent conflict ofi interest. Such a conflict of interest would arise when the employee, officer, councilmember, agent, or any member of his or her immediate family, his or her partner, ora an organization which employs ori is about to employ any oft the parties indicated, herein, has a financial Nothingi in this policy does ori is to be construed as limiting the applicability of any other federal, state, orl local laws and regulations governing prohibitions against financial conflicts ofi interest, including but not limited tot the Political Reform Act (Government Code Section 81000 et seq.) andi implementing regulations from the Fair Political Practices Commission (Title 2, Section 18110 et seq., of the California Code of Regulations), and Government Code Sections 1090--1999 and 1126. All such  or other interest in or at tangible personal benefit from a firm considered for a contract.  laws andr regulations shall apply to every employee, officer, councimember, and agent of the city.  D. aboutblank  6/21    7/18/24, 12:15F PM required.  lone, CAC Code of Ordinances  Local Vendors. Purchasing goods and services from local vendors which stimulate the local economy is encouraged but not E. Green Purchasing Practices. The cityi is committed to green purchasing practices in obtaining goods and services. The city shall consider nvronmenalypreterabe products when appropriate. Nothing in this policy requires the procurement of products that do not adequately perform theiri intended use, requires procurement that excludes adequate competition, or requires the procurement of products that are unavailable at ar reasonable price or ata reasonable time. An nvrommenalypreterabe product meansa ap product that meets any oft thet following criteria:  1._Isdurable, repairable, reusable, or recyclable;  2. Has minimal packaging, toxic content, or chemical-hazard potential;  3. Isresource or energy efficienti in any or all phases ofi its manufacture, use, or disposal; or 4. Its use or disposal minimizes or eliminates the city's potential environmental liability.  (Ord.No.505, 11-16-2019) 2.44.140- Expenditure categories.  Purchases, which include those made by purchase order (PO), written agreement, amendment or change order that require city expenditures, are classified into five categories based on the anticipated expenditure amount. Each category establishes an authorization level, procurement method, andi maximum term, which shall apply unless specifically exempted in  accordance with this policy. A. Expenditures of $50.00 or less B. Expenditures of $51.001 to $5,000.00 C.E Expenditures of $5,001.00 to $15,000.00 D. Expenditures of$ $15,001.00 to $50,000.00 E. Expenditures over $50,001.00  (petty cash) (operational) (minor) (intermediate) (major)  A. Expenditures of $50.00 or Less.  Authorization: Procurement: Term Limit:  Department director, who may delegate to a department manager No bids or PO necessary; petty cash advances or reimbursement  N/A  Note: These transactions take the place of ordinary ongoing purchases and shall be limited in use.  aboutblank  7/21    7/18/24, 12:15PM  lone, CA Code of Ordinances  Acash disbursement or reimbursement may be obtained from the finance department and mustr not exceed $50.00.. Ap petty cash request form: shall be completed and: signed by the department director before submittal. Thei form: shalli include the date, description oft thei item to be purchased, and account number. Petty cash amounts willl be advanced to accommodate miscellaneous minore expenditure amounts of $50.00 or less and for which normal payment provisions are not practical. The finance department will periodically audit petty cash expenditures as to form andi regulations and may confirm purchases.  B. Expenditures of $51.001 to $5,000.00 During the Initial Term. (5]  Authorization: Procurement: Term limit:  Bepartment director, who may delegate to a department manager No PO necessary; three informal bids/proposals whenever  possible  Three years plus one three-year extension  C. Expenditures of $5,001.001 to $10,000.00 During the Initial Term.  Authorization: Procurement: Term Limit:  Department director  PO required plus three informal bids/proposals Three years plus one three-year extension  D. Expenditures of $10,001.00 to $15,000.00 During the Initial Term.  Authorization: Procurement:  City manager city contract [8]  PO required plus three informal bids/proposals plus  Term limit: Three years plus one three-year extension  E. Expenditures over $15,001.00.  Authorization: Procurement: Term limit:  City council  PO required plus formal bids/proposals plus city contract No limit, anyt term approved by majority vote of the city council  aboutblank  8/21    7/18/24, 12:15PM  lone, CA Code of Ordinances  Report to City Council. Any and all expenditures by department director or city manager in excess of $1,000.00 shall be reportedt to the city council att the next regular council meeting following said expenditure. Said report may bei int the form ofal list provided by the city manager describing the purpose and the amount of the  expenditure.  (Ord.No.505 11-16-2019) Footnotes: - (5)- -  ForA purposes oft this policy, the "initial term" shall be either: (jat term undert the contract or POI not toe exceed one year, or (ii) a term longer than one yeark but not to exceed the maximum number ofy years authorized undera" "Term limit" (set forth below) asl long ast the contract includes a continuing obligation forp performance byac contracting party and the city has and obligation for payment only fort the services actually performed: anda accounted for byi invoice or other monthly or regular periodic documentation acceptable tot the city. Under any contract or PO, eithert the contracting party or Designee must have signature authorization form ont file with the finance department, ora active designation. letter fora a specific date range.  city may terminate the contract or PO priort to the expiration oft thei initial term for the other parly's nonperformance.  - (6). (7) = - (8)-  "Informa!" bid/proposal means verbal orv written, viat telephone, e-mail ord other casual medium.  The city's templates for contracts, agreements, amendments and change orders shall be used for category DE and E purchases. The city manager may allow for modifications oft these templates or use ofo other contracts, agreements, amendments and change orders, or may require use ofd city templates! for category Ba and CA purchases when the city manager determines itis prudent due to the level ofr risk exposure tot the city, the needt to spell outa a complex scope ofv work, ora any other reason s/he believes to bei int the besti interest oft the city. To meet prevailing wage requirements any  maintenance or repair project over $15,000.00 or construction, project over $25,000.00 will require a written contract.  244.150-Procurement procedures--Major expenditures (over $50,001.00).  A. Formal Bids for Major Public Works Projects and Major Supplies and Equipment Purchases. Major public works projects and supplies and equipment are defined as purchases and projects having an actual or estimated value of greater than $50,001.00. The solicitation and selection of bids and award of contracts shall comply with the lone Municipal Code (publicworks contracts), and this policy, ands shall be administered through each city department, 1. Invitation for Bids. An invitation for bids (the "invitation"): shall be published atl least two times ina a newspaper, electronic bulletin board or online submission source, city website, or other generaly-recognized source ofl local public works contract information, at least ten days and atl least five days prior to the date of the opening of bids. Invitations shall include general descriptions oft the work to be performed, the time and place oft the opening of bids, the place where bidders may obtain bid documents, the amount oft bids security required, and the amount and nature of performance and labor materials security that will ber required. 2. Form of Bids. Bids conforming to the requirements of thei invitation shall be submitted to the department director (the' "director") in sealed packages or by other means which will prevent the divulging of bids prior to the stated time for opening of bids, all as specified in the invitation or the bid documents. Unopened bids, should be clearly marked or otherwise identifiable as bids for the project to which they apply. 3. Bid Security for Public Works Projects. Bids for public works projects shali be accompanied by cash, cashier's check, certified check, surety bond, or other form ofs security stated in thei invitation or bid documents, ina a sum  according to the following procedures:  equal to at least ten percent of the amount of the! bid.  about:blank  9/21    7/18/24, 12:15PM  lone, CACode of Ordinances  4. Opening of Bids. At thet time and place stated in the invitation, the bids shail be publicly opened and announced. The bid amounts shall be tabulated and thet tabulation shall be available for publici inspection att the public works department during regular business hours for ay period ofr not less than 30 calendar days after the bid Review of Bids. The director shall review alll bids received for completeness, accuracy, responsiveness to the invitation and the bid documents, andt the city's experience with or knowledge of the qualification and reliability of each bidder and shall preparea arecommendation to the city council. Written amounts shallt take precedence over associated numeric amounts. Mathematical errors, iff found, shall be corrected and: shall not disqualifya bid. The corrected total shall be the bid amount considered in determining thel lowest responsible bidder and 6. Award of Contract. Contracts shalll be awarded byt the city council to the lowest responsible bidder. Determination of thel lowest responsible bidder shall be at the sole discretion of the city council pursuant to findings andi recommendations presented byt the director at the time of the award of contract. 7. Equal Bids. Ift two or more equal low bids are received, the city council may award the contract to any one oft the  opening.  shall bet the contract amount awarded ift the bidi is selected.  equall low bidders byt the following: a. Select one bid; b. Reject all bids and re-solicit for bids;  Reject all bids and authorize negotiated agreement ifc consistent with federal and state laws; e. Take any other action that the city council deems to serve the besti interest of the city.  d. Select one bid, whichi ist the most responsible bidder; or  8. No Bids. When no bids are received from responsible firms, the city council may accomplish the project in any 9. Rejection of Bids. The city council may reject any or all bids presented and mayt then direct that the project be re-advertised, may authorize negotiation ofa a contract with one or more responsible firms, or may resolve that the project can be performed more economically by city forces, day labor, time and materials contract, or other 10. Execution of Contract. The: successful bidder: shall execute the contract and furnish required performance security andl labor and materials security when required pursuant to the bid document. 11. Forfeiture of Bid Security for Public Works Projects. If the successful bidder fails to execute the contract: and furnish security within the stated time, and said failure is not primarily duet to actions or omissions of the city or to acts of god, the bidder shall forfeit the bid: security provided. The city council may then consider the bid of the 12. Release of Bid Security for Public Works Projects. Bidders are entitled to the return of their bids security unless forfeited as provided! herein. The citys shall retain all bid: security until a contract has been executed or until the city council rejects all bids at which time alll bid: security not forfeited shall ber returned to the appropriate 13. Disposition of Forfeited Bid Security for Public' Works Projects. The city shall retain forfeited bid security untila a contract is awarded to another firm ort the project is cancelled. The citys shall retain an amount equal to the difference between the forfeiting firm's bid and the new contract. amount, if any, and an additional amount  manner it sees fit.  method.  nextl lowest responsible bidder.  bidders.  about:blank  10/21    7/18/24, 12:15P PM  lone, CAC Code of Ordinances  equal to administrative and other costs incurred as a result oft thei failure of thei forfeiting bidder to enter into a contract and provide required security, and shall return any remaining amount oft the bids security to the forfeiting bidder.  14. Performance Security and Labor and! Materials Security for Public Works Projects. The bidder to whom the contract is awarded (the' "successful bidder"): shall furnish performance security and! labor andi materials security B. Formal Proposals for Major Professional and Technical Services. Major professional and technical. services are defined as services having an actual or estimated value of greater than $50,001.00. The solicitation and selection of proposals and award of contracts shall comply with the lonel Municipal Code, and this policy, and shall be administered through each city department, according to thet following procedures: 1. Maintenance and Repair Services. Services intended to preserve and/or restore a public work to a clean, safe, efficient, and/or continually usable condition. Maintenance and repair services include, but are not limited to: carpentry, electrical, painting, plumbing, glazing, and other craftwork1 to preserve at facility in the condition for which it was intended; repairs, cleaning and other operations on machinery: and other equipment permanently attached to at facility as fixtures; the mowing, pruning, and trimming of lawns, grass, trees, shrubs, bushes and hedges; andt ther regular removal or relocation of by-products or waste products accumulated at city facilities as 2. The city manager shall approve the preparation and release of all requests for proposals (RFP) and requests for 3. City staff shall determine, based on professional judgment, whether an RFP or an! RFQ process best suits its needs and city staff, ora a city-authorized consultant, shall prepare the RFP/RFQ document. 4. City staff, or a city-authorized consultant, or both shall prepare a list of suitable firms from known registries, 5. City staff shalli issue the RFP/RFQ to suitable firms, and may also advertise for competitive proposals. 6. City staff shall form a selection committee, which mayi include private consultants, to review the RFPS/RFQs received, andt the selection committee may conduct interviews and/or hold discussions with proposing firms. 7. The selection committee shall rankt the proposing firms according to the criteria specified in the RFP/RFQ and 8. City staff, orac city-authorized consultant, shall negotiate with the top-ranked firm to arrive at mutually- 9. Citys staff, ori its authorized consultant shall terminate negotiations and! begin negotiations with the next-ranked firm ifa an agreement cannot be reached and continue this process until negotiations are successfully concluded or until thel list of qualified firms submitting proposals is exhausted and an agreement cannot be reached.  ina amounts specified in thei invitation or bid documents.  the result of ongoing environmental processes.  qualifications (RFQ).  professional organizations, and/or any other source.  city staff shall notifyf firms of their position in the ranking.  acceptable contract terms.  10. The city council shall award or reject the contract negotiated by city staff. Procurement Procedures-Non.-Maor Expenditures ($50,000.00 and Under).  Informal Bids or Proposals. Intermediate, minor, and operational expenditure category projects, including minor public works projects, supplies, goods, equipment and minor services are defined as projects having an actual or estimated value of $50,000.00 or less. The solicitation and: selection of bids anda award of contracts shall comply with thel lone Municipal Codet for public works projects, service contracts, and this Policy, and shall be administered through each city department, accordingt to  the following procedures:  1. Informal bids shall be obtained verbally ori in writing as dictated byt this policy from the open market anda a  written record ofi informal bids shall be kept with the related PO.  about:blank  11/21    7/18/24, 12:15F PM  lone, CA Code of Ordinances  2. Bid Security. Security and labor and material security shall conform tot the requirements for major public works projects but may be modified or waived by the city staff person authorized to make the Purchaseirwarranted 3. Execution and Award of Contracts. The city council may award contracts, or the city manager, or designated city director, or staff personnel may award and execute contracts, set forth in Categories A, B, Cor Da above, and may waive competitive bidding requirements ifi int the besti interest oft the city, provided there are unencumbered appropriations in the fund accounts against which the expenses are to be charged. D. Exemption to Any Procurement Method. Justification for exemption to any required procurement method may! be submitted to the city manager ori int the case of a major expenditure, to the city council under the following 1. Sole-Source or Select-Source Purchase. To determine that a sole-source or select-source purchase exists, a. Acquisition of brand name to insure compatibility with other city products and equipment. For example b. Change orders additions to an original scope of work when the original source ist the only reasonable one to provide the additional goods, construction work or service needed (select-source). c..Only one manufacturer or vendor makes and/or sells ther required equipment (sole-source). 2. State, county, or other public agency cooperative purchasing program or contracts utilizing funding or other participation from agencies which require conformance with state, federal or other contracting regulations. 3. The city does not require a contract for equipment purchases such as a specific type or brand ofs supply or part necessary for acceptable operation ofar machine or device, or as required by warranty or contract on the machine or device; written documentation supporting a purchase must! be provided. 4. Emergency purchases made necessary by an immediate threat to! life or property or as substantial disruption ofa a. Inadvance of any local emergency, the city seeks to retain al list of available local businesses willing to provide necessary supplies, materials, equipment, services, food, care or shelter to the cityt through the office of emergency management. Once the emergency operations center (EOC) is activated, these b. Int the event of an emergency, the city manager or designee may make immediate purchases of goods and services. Emergency purchases include any purchase required to prevent imminent danger or to prevent or mitigate the loss or impairment ofl life, health, property, or essential public services. Every effort shall be made to obtain advance approvals or to obtain approvals as soon as possible following the purchase. The cityi is not required to engage in either formal ori informal competitive bidding in ane emergency. The city council delegates to the city manager and city manager's designee the authority to waive any procedures in the policy that are not statutorily mandated when making emergency purchase of supplies, equipment, d. The city council shall ratify emergency suspension of procedures at the next properly noticed council meeting following the emergency procurement: and consider whether further suspension of proceduresis 5. The awarding officer(s) may waive irregularities in formal ori informal bids received provided that it isi in the best  andi in the! best interest of the city.  circumstances:  rationale and/or proof must be provided int the purchase requisition. standardization of fleeti inventory (select-source).  vital public service.  memorandums will be activated.  materials or services.  required to abate thei impacts of the emergency.  interest of the city to do so, and it does not resulti in unfair advantage to any bidder.  about:blank  12/21    7/18/24, 12:15PM  lone, CA Code of Ordinances  6. The city council may authorize the award and execution of contracts without competitive bidding provided that  such award isi int the besti interest of the city, or of the public health, safety and welfare.  (Ord.No.505 11-16-2019) 2.44.160-F Federally funded procurements.  This section pertains tot federal-funded projects and purchases.  A. Any procurement made pursuant to af federal award or subject to reimbursement, inv whole or inp part, with federal funds must comply with the city's procurement procedures and all applicable procurement standards  codified in2 CFR: 200.318-200.326 to include thet following: 1. Comply with general federal requirements and recommendations: b. Comply with the Solid Waste Disposal Act,2 CFR: section 200.322.  a. Comply with currently applicable Department of Homeland: Security Standard Terms and Conditions. Complete ac cost or price analysis, includingi independent estimates, when necessary under.2CFR d. Profit must be negotiated as a separate element of price, where required under 2 CFR2 200.323(b). Use of federal excess and surplus property is encouraged over purchasing new. G Geographical (local) preferences may not be used, unless expressly authorized byt the awarding agency. Atime and materials contract or a "cost-plus" contract may not be used. h. Intergovernmental. agreements are encouraged where appropriate.  200.323.  Procurements are: subject to requirements for monitoring and oversights, see2CFR2 200.318(b). Records must be maintained bye each department consistent with.2 CFR: 200.318(1). 2. Federal contractors must meet requirements of being responsible contractors (see CFR: 200.318(h). and the city will take all necessary affirmative steps to assure minority businesses, women's businesses and labor 3. Consistent with.2 CFR Section 200.320, the city will use one of thet following approved procurement methods: Micro-purchases, small purchase procedures, sealed bids (formal advertising), competitive 4. Contracts for federally-funded procurements must comply with2 CFR Section 200.326, by acknowledging that federal financial assistance willl be used to fund the contract, requiring that the contractor comply with all applicable federal law, regulations, executive orders and applicable federal policies; ands specifyingt the  surplus area firms are used when possible. proposals, and noncompetitive proposals.  federal government is not a party to the contract.  B. General Procurement Standards.  1. Code of Conduct. As representatives of the City of lone, all employees are expected to conduct themselves inap professional. and ethical manner, maintaining high standards ofi integrity and the use ofg good judgement. Employees are expected to be principledi in their business interactions and acti in good faith with individuals both inside and outside the city. The following code of conduct shall govern thep performance, behavior and actions of the city, including employees, directors, appointed or elected officials, volunteers, or agents who are engaged in any aspect of procurement, including, but not limited to, purchasing goods and services, awarding contracts and grants, and the administration and supervision of contracts:  a.  aboutblank  13/21    7/18/24, 12:15PM  lone, CACode of Ordinances  No employee, director, appointed or elected official, volunteer, or agent of the city shall participate in the selection, award, or administration of contracts supported by af federal award ifa conflict of interesti is real or apparent to a reasonable person.  b. Conflicts ofi interest may arise when any employee, officer, or agent of the city, any member of his or her immediate family, his or her partner, or an organization which employs ori is about to employ any of the parties indicated herein, has ar real or apparent financial or other interest in or a tangible personal No employee, director, appointed or elected official, volunteer, or agent of the city shall do business with, award contracts to, or showf favoritism toward a member of his or heri immediate family, spouse's family, or to any company, vendor, contractor, or parties tos subcontractors who either employ or has any relationship to at family member; or award a contract or bid which violates the spirit ori intent of federal, state and local procurement laws and policies established to maximize free ando open d. The city's employees, directors, appointed or elected officials, volunteers, or agents shall neither solicit nor accept gratuities, favors, gifts, consulting fees, trips, or anything having a monetary value in excess of$25.001 from a vendor, potential vendor, family or employees ofay vendor, contractor or parties to . Disciplinary measures for violations oft the code of conduct by employees, directors, appointed or elected officials, volunteers, or agents who are engaged in any aspect of procurement, including, but not limited to, purchasing goods ands services, awarding contracts and grants, and the administration and supervision of contracts could lead to disciplinary measures, up to andi including possible termination of  benefit form at firm considered for the contract.  competition among qualified vendors.  subcontractors.  employment. 2. Solicitation Procedures.  a. Acquisition of unnecessary or duplicative items must be avoided. Consideration should be given to consolidating or dividing procurements to obtain a more economical purchase. When appropriate, an analysis willl be made of lease versus purchase alternatives, and any other appropriate analysis to b. To foster greater economy and efficiency, andi in accordance with efforts to promote cost-effective use of shared services, the city shall enter into state and! local intergovernmental agreements ori inter-entity agreements where appropriate for procurement or use of common or shared; goods ands services. Procuring federal excess and surplus property in lieu of purchasing new equipment and property d. Value engineering clauses may! be used in contracts for construction projects of sufficient size to offer reasonable opportunities for cost reductions. Value engineering is a systematic and creative analysis of each contract item or task to ensure that its essential function is provided at the overall! lower cost. Contracts shall only be awarded to responsible contractors possessing the ability to perform successfully under the terms and conditions ofap proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and Records willl be maintained sufficient to detail the history of procurement. These records willi include, but are not necessarily limited to thef following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basisf for the contract price. The city clerk will be the repository for said records and: shall be maintained for period of no less than seveny years.  determine the most economical approach.  whenever such use is feasible and reduces project costs shall be utilized.  technical resources.  about:blank  14/21    7/18/24, 12:15PM  lone, CA Code of Ordinances  Time andi material type contracts (open-ended) may be used only after a determination that no other contract iss suitable. Time and material type contract means ac contract where the cost to the cityi is the sum of the actual cost of materials and direct labor hours charged ati fixed hourly rates that reflect wages, general and administrative expense, and profit. Eacht time and material contract will set a ceiling price that the contractor exceeds ati its own risk. Al higher degree of oversight is required in order to obtain reasonable assurance thatt the contractor is using efficient methods and effective cost controls. h. The city alone willl be responsible, in accordance with good administrative practice and: sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements. These issues include, but are not limited to, source evaluation, protests, disputes, and claims. These standards do not relieve the city of any contractual responsibilities under its contracts. Thet federal awarding agency will not substitute its judgment for that of the city unless the matter is primarilya federal concern. Violations of law will be referred to thel local, state, or federal authority having proper  jurisdiction. 3. Competition.  a. All procurement transactions must be conducted in a manner providing fulla and open competition. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft speciications, requirements, statements of work, andi invitations for bids or requests for proposals will be excluded from competing for such procurements. Some of the situations considered to ber restrictive of competition include, but are not limited to: .P Placingunreasonable requirements ont firms in order for them to qualify to do business; lii. Noncompetitive pricing practices between firms or between affiliated companies; iv. Noncompetitive contracts to consultants that are on retainer contracts;  i. Requiringumnecessary experience ande excessive bonding;  V. Organizational conflicts of interest;  vi. Specifying only al brand name product instead of allowing an equal product to be offered and describing the performance or other relevant requirements of the procurement, and  vii. Any arbitrary action in the procurement process.  b. Procurements shalll be conducted in a manner that prohibits the use of statutorily or administratively imposed state or local geographical preferences in the evaluation of! bids or proposals, except in those cases where applicable federal statutes expressly mandate or encourage, geographic preference. Nothing in this section preempts state licensing laws. When contracting for architectural ande engineering (A/E) services, geographic location may! be a selection criterion provided its application leaves an appropriate number of qualified firms, given the nature and size oft the project, to compete for the Alls solicitations will incorporate a clear and accurate description of the technical requirements fort the material, product, or service tol be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description mayi include as statement of the qualitative nature of the material, product or service to be procured and, when necessary, must: set forth those minimum essential characteristics and standard to which itr must conform ifiti is to satisfyi its intended use. Detailed product specifications should be avoided ifa at all possible. Wheni iti isi impractical or uneconomical to make a clear and accurate description of the technical requirements, a brand name  contract.  about:blank  15/21    7/18/24, 12:15 PM  lone, CAC Code of Ordinances  or equivalent description may be used as a means to define the performance or other relevant requirements ofp procurement.  The specific features of ther named brand which must ber met by offers must! be clearly stated.  d. Bids and proposals shall identify all the requirements which the offerors must fulfill and all other factors 4. Methods of Procurement. In addition to the city's purchasing policy approval limits, one oft thet following a. Micro-purchase: Purchases where the aggregate dollar amount does not exceed $3,000.00, or the current limitation set by the Federal Acquisition Regulation at 48 CFR Subpart 2.1, where this threshold is b. Small purchase: Purchases upt to the simplified acquisition threshold, which is currently $150,000.00. Informal purchasing procedures are acceptable, but price or rate quotes must be obtained from an Sealed bid: Purchases over the simplified acquisition threshold, which is currently $150,000.00. Under this purchase method, formal solicitation is required, and the fixed price (lump: sum or unit price) is awarded to the responsible bidder who conformed to all material terms and is the lowesti in price. This method is the preferred procurement method for construction contracts, ift the following conditions Acomplete, adequate, and realistic specification or purchase description is available; ii. Two or more responsible bidders are willing and ablet to compete effectively for the business, and, iil. The procurement lends itselft to a firm fixed price contract and the selection of thes successful bidder  to be used in evaluation bids or proposals.  methods should be used:  periodically adjusted fori inflation.  adequate number of sources.  apply:  can be made principally based on price. Ift this method is used, the following requirements shall apply:  Thei invitation for bids willl be publicly advertised and bids must! be solicited from an adequate number of known suppliers, providing them sufficient response time prior to the date for opening ii. The invitation for bids, which willi include any specifications and pertinent attachments, must define iii. All bids will be publicly opened at the time and place prescribed in the invitation for bids; iv. Afirm fixed price contract award will be made in writing to thel lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts will only be used in determining which bidi is lowest. Payment discounts will only be used to determine thel low! bid when prior experience indicates that such discounts are usually taken advantage of; and V. Any or all bids may! be rejected if therei is a sound documented reason. d. Competitive proposals: Purchases over the simplified acquisition threshold, whichi is currently $150,000.00. This procurement method requires formal solicitation, fixed-price or costreimbursement contracts, andi is used when sealed bids are not appropriate. The contract should be awarded to the responsible firm whose proposal is most advantageous to the program, with price being one of the Requests for proposals must be publicized andi identify all evaluation factors and their relative importance. Any response to publicized requests for proposals must be considered to the maximum  the bids;  the terms or services in order for thel bidder to properly respond;  various factors. Ift this method is used, the following requirements apply:  extent practical;  about:blank  16/21    7/18/24, 12:15F PM  lone, CAC Code of Ordinances  ii. Proposals must be solicited from an adequate number of qualified sources; ili. The methods for conducting technical evaluations of the proposals received andf for selecting recipients mayi include, but not limited to: Oral interviews, references, past performance, availability iv. Any response that takes exception to any mandatory items ini this proposal process may be rejected Contracts must be awarded to the responsible firm whose proposal isr most advantageous to the vi. Competitive proposal procedures may beu used for qualfications-based procurement of archtecturalengnerng (AE)professional. services whereby competitors' qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be usedi in procurement of A/E professional services. It cannot be used to purchase other types of services, though. A/E firms are a potential source to perform the proposed effort. Noncompetitive proposals: Alsol known as sole-source procurement, this may! be appropriate only when  to perform work, and certifications as determined by project scope.  and not considered;  program, with price and other factors considered; and,  one or more of the following criteria are met: The item is available only from as single source;  i. The public emergency for ther requirement willr not permit a delayr resulting from competitive iii. The federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response to av written request from the non-federal entity; or iv. After solicitation of ar number of sources, competition is determined inadequate. 5. Contract Cost and Price. Ad cost or price analysis shall be performed in connection with every procurement action in excess of the simplified acquisition threshold ($150,000.00) including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement: situation, but as as starting point, independent estimates shall be made prior to receiving bids and proposals. a. Profit shall be negotiated. as as separate element of the price for each contract iny which there is a no price competition and in all cases where cost analysis is performed. To establish af fair and reasonable profit, consideration must be given to the complexity of the work to be performed, the risk borne byt the contractor, the contractor's investment, the amount of subcontracting, the quality of its record of past performance, and industry profit rates in the surrounding geographical. areat for similar work. b. Costs or prices based on estimated costs for contracts under the federal award are allowable only to the extent that costs incurred or cost estimates included in negotiated prices would be allowable fort the city under Subpart E = Cost Principles of Part 200 = Uniform Administrative Requirements, Cost Principles, The cost plus a percentage of cost and percentage of construction cost methods of contracting shall be  solicitation;  and Audit Requirements for Federal Awards.  used.  6. Federal Awarding Agency or Pass-Through Entity Review.  a. The city shall make available, upon request of the federal awarding agency or pass-through entity, technical specifications on proposed procurements where the federal awarding agency or pass-through entity believes such review is needed to ensure thatt thei item or service specified is the one being  about:blank  17/21    7/18/24, 12:15PM  lone, CACode of Ordinances  proposed for acquisition. This review generally will take place prior to the time the specification is incorporated into a solicitation document. However, ift the city desires to have ther review accomplished after a solicitation has been developed, thef federal awarding agency or pass-through entity may stillr review the: specifications, with such review usually limited to the  technical aspects of the proposed purchase.  b. The city will make available upon request, fort the federal awarding agency or pass-through entity pre- : procurement review, procurement documents, such as requests for proposals or invitations for bids, or F Procurement procedures or operations fails to comply with the procurement: standards in this part; ii. The procurement is expected to exceed the simplified acquisition threshold ($150,000.00). andi ist to be awarded without competition or only one bid or offer is received in response toa as solicitation; iii. The procurement, which is expected to exceed the simplified acquisition threshold, specifies a iv. The proposed contract is more than the: simplified acquisition threshold and is to be awarded to V. Aproposed contract modification changes the scope ofa contract or increases the contract amount The cityi is exempt from the pre-procurement review in paragraph b. of this section ift thet federal awarding agency or pass-through entity determines that its procurement systems comply with the d. The city may request thati its procurement system be reviewed by the federal awarding agency or pass- through entity to determine whether its system meets these standards in order for its system to be certified. Generally, these reviews must occur where there is continuous high-dollar funding, and third- e. The city mays self-certify its procurement system. Such self-certification must not limit thet federal awarding agency's right to survey the system, Under as self-certification procedure, the federal awarding agency may rely on written assurances from the city that iti is complying with these standards. The city must cite specific policies, procedures, regulations, or standards as beingi in compliance with these 7. Bonding Requirements. For construction or facilityi improvement contracts ors subcontracts exceeding the simplified acquisition threshold ($150,000.00), thet federal awarding or pass-through entity may accept the bonding policya and requirements of the city provided that the federal awarding agency or pass-through entity has made a determination that the federal interest is adequately protected. Ifs such a determination a. Abid guarantee from each bidder equivalent tot five percent of thel bid price. The bid guarantee must consist ofa firm commitment sucha as a bid bond, certified check, or other negotiable instrument accompanying al bid as assurance that the bidder will, upon acceptance oft the bid, execute such b. Ap performance bond on the part of the contractor for 100 percent oft the contract price. A performance bondi is one executed in connection with a contract to secure fulfillment of all the contractor's  independent cost estimates, when:  "brand name" product;  other than the apparent low bidder under as sealed bid procurement; or  by more than the simplified acquisition threshold.  standards of this part.  party contracts are awarded on a regular basis;  requirements and have its system available for review.  has not been made, the minimum requirements must be as follows:  contractual documents as may be required within the time specified;  obligations under such contract; and,  about:blank  18/21    7/18/24, 12:15PM  lone, CA Code of Ordinances  Aj payment bond ont the part oft the contractor for 100 percent of the contract price. Ap payment bondi is one executed in connection with ac contract to assure payment as required byl law of all persons supplying! labor and material int the execution  of the work provided fori in the contract.  8. Contract Provisions. All federal funding source compliance provisions shall include thei following: a. Equal Employment Opportunity. All contracts, when funded in whole or partly by monies derived from the federal government (either directly or indirectly), shall contain a provision requiring compliance with Davis-Bacon Act. Applies to construction contracts in excess of $2,000.00. Itr requires contracts to pay laborers and mechanics wages not less than the prevailing wage as determined by the. Secretary of Labor and must ber required to pay wages not less than once a week. Each bid solicitation published by the city must contain the current prevailing wage determination. Any award of the contract must be conditioned on contractor's acceptance oft that wage determination and suspected or reported violations Copeland "Anti-Kickback" Act. Applies to construction contracts in excess of $2,000.00. Itp prohibits kickbacks in construction contracts funded with federal monies. Contractors and: subcontractors or subrecipients shall be prohibited fromi inducing any person employed int the construction, completion, or repair of public work, to give up any part of the compensation to which he or shei is otherwise entitled and: suspected or reported violations shall bei immediately reported to thet federal awarding agency. d. Clean Air Act and Federal Water Pollution Control Act. Applies to contracts and sub grants in excess of $150,000.00. Contractor shall be required to comply witha all applicable standards, orders or regulations issued pursuant to the Clean Air Act and the Federal Water Pollution Control Act. Suspected or reported violations must be reported to the Federal awarding agency and the Regional Office oft the Debarment and Suspension. Contracts funded with federal grant monies may not be awardedi to contractors that have been debarred or suspended from receiving federal monies pursuant to the B Byrd Anti-Lobbying Amendment. Contractors that apply or bid for an award of $100,000.00 must certify that they will not and have not used federal funds to paya any person or organization fori influencing or attempting to influence an officer or employee of any agency, ar member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any 9. Contracting with Small and Minority Business, Women's Business Enterprises, and Labor Surplus Areal Firms. Allr necessary affirmative steps willl bet taken to assure that minority business, women's business enterprises, a. Placing qualified small and minority businesses and women's business enterprises on solicitation lists; b. Assuring that small and minority businesses and women's business enterprises are: solicited whenever Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation bys small and minority businesses and women's business enterprises; d. Establishing delivery schedules, where the requirement permits, which encourage participation by small  Equal Employment Opportunity.  oft this act shall be immediately reported tot the federal awarding agency.  Environmental Protection Agency (EPA). System for Award Management (SAM).  federal contract, grant or any other award.  and labor surplus area firms are used when possible. Affirmative steps include:  they are potential sources;  and minority businesses and women's business enterprises;  e.  aboutblank  19/21    7/18/24, 12:15F PM  lone, CAC Code of Ordinances  Usingt the services and assistance, as appropriate, ofs such organizations as the Small Business Administration: andt the  Minority Business Development Agency of the Department of Commerce; and  f.R Requiring thep prime contractor, ifsubcontracts: are to be let, to take the affirmative steps listed in  paragraphs a. through e. of this section.  (Ord.No.505, 11-16-2019) 2.44.170- Emergency expenditures.  Ina accordance with! S2 20168 PCC, int the event of an emergency, the city council may pass a resolution bya a four-fifths vote of its members declaringt thatt the public interest and necessity demand thei immediate expenditure of public money to safeguard life, or property. Upon adoption oft ther resolution, itr maye expend any sum requiredi int the emergency without complyingv withs 20162 et sec PCC. Ifnotice for bids to let contracts willr not be given, the city council shall comply with chapter 2.5 (commencing  with! S2 22050 PCC.) (Ord.No.505 11-16-2019)  2.44.180- Gifts and unauthorized purchases.  Citye employees, officers or officials are not entitled to any special consideration from vendors and merchants int their personal affairs nor are such citye employees, officers, or officials to attempt to procure materials for the personal use of any. other person. City employees, officers or officials shall not solicit or accept gifts except fort thosei items that can be shared by all: staffs such as food and flowers. Except for emergencies or other authorized exemption, no purchases shalll be made without specific authorization as outlined in this policy, The person ordering the unauthorized purchase may be held personally liable  fort the costs of the purchase or contract. (Ord.NO.505 11-16-2019)  Chapter2.46- INFORMAL BIDDING PROCEDURES  Sections:  2.46.010-Informal. bid procedures.  Public projects, as defined by the Act andi in accordance with thel limits listed in Section 22032 of the Public Contract Code, may bel let to contract byi informal procedures as set forth in Section 22032, et seq., oft the Public Contract Code.  (Ord. No. 421,51,3-17-2009) 2.46.020- Contractors list.  Al list of contracts shall be developed and maintained in accordance with the provisions of Section 22034 oft the Public contract code and criteria promulgatedi from time to time byt the California Uniform Construction Cost Accounting  Commission. (Ord. No. 421,51,3-17-2009) 2.46.030- Notice inviting informal bids.  about:blank  20/21    7/18/24, 12:15F PM  lone, CAC Code of Ordinances  Where ap public project is to be performed whichi is subject to the provisions of this chapter, ar notice meeting the requirements of Section: 22034 of the Public Contract Code andi inviting informal bids shall! be mailed to all contractors fort the category of work to be bid, as shown on the list developed in accordance with_Section: 2.46.020, and to all construction trade journals as specified by the California Uniform Construction Cost Accounting Commission in accordance with Section 22036 of the Public Contract Code. Additional contractors and/or construction tradej journals may be notified at the discretion of the  department/agency: soliciting bids, provided however:  A. Ifthere is no list of qualified contractors maintained by the city for the particular category of workt to be performed, the notice inviting bids shall be sent only to the construction trade journals specified byt the B. Ifthep product or service is proprietaryi in nature sucht thati it be can obtained only from a certain contractor or contractors, the notice inviting informal bids may! be sente exclusively to such contractor or contractors.  commission.  (Ord. No.421,51,3472009) 2.46.040 Award of contracts.  The city manager is authorized to award informal contracts pursuant to this section.  (Ord. N0.421,51.3-17209)  about:blank  21/21    RESOLUTION NO. 2018-18  Al Resolution of the City Council of the City of lone Amending the City of lone Financial Policies and Procedures Handbook - June 2015 WHEREAS, the City of lone adopted a Financial Policies and Procedures Handbook : June 2015 to meet the requirements of the City Auditor; and WHEREAS, the Financial Policies and Procedures Handbook contains the City's WHEREAS, the purpose of the Debt Policy is to establish guidelines and parameters for the effective governance, management: and administration of debt and  Debt Policies; and  other financing obligations issued by the City of lone; and Handbook need to be updated from time to time; and  WHEREAS, the policies and procedures in the Financial Policies and Procedures WHEREAS, staff has provided an update to the City's Debt Policy that is consistent California Govemment Code Section 8855(i), which went into effect on NOW, THEREFORE, BE IT RESOLVED that the City Council of the City ofl lone hereby amends the City of lone Financial Policies and Procedures Handbook.  January 1, 2017.  1. The foregoing recitals are true and correct.  2. The City's Financial Policies and Procedures Handbook: Section 1) X. Treasury and Debt Management, Paragraphs B, Cand D are replaced with the language in The foregoing resolution was duly introduced and adopted by the City Councilo of the City of lone at their regular meeting held on May 1, 2018 by the following vote:  Attachment A.  AYES: Atlan, Epperson, Reed, Wratten, Lord  NOES: None ABSTAIN: None ABSENT: None  Dominic Atlan, Mayor  AK  Attest:  Janice Traverso, s  Clerk City    Pi   Debt Issuance and Management Policy  City ofIone  1.  Introduction  On May 1, 2018 the City Council of the City of Ione ("City Council") reviewed and considered this Debt Issuance and Management Policy ("Debt Policy") of the City of lone and this Debt Policy was approved by action of the City Council on May 1,2018. This Debt Policy provides guidelines for debt issuance, management and post-issuance related policies and procedures for the City. This Debt Policy may be amended by the City Council as it deems appropriate from time-to- time in the prudent management of the debt and finançing needs oft the City ofIone.  2. Purpose  The purpose of this Debt Policy is to establish guidelines and parameters for the effective governance, management and administration of debt and other financing obligations issued by the City of Ione and its related entities (such as, but not exclusive to, the City-formed Community Facilities Districts and any entities for which the City Council serves as the governing board or legislative body). This Debt Policy is intended to improve and direct decision making, assist with the structure of debt issuance, identify policy goals, and demonstrate a commitment to long-term tinancial planning, including the City of lone's five-year Capital Improvement Program (the "Capital Improvement Program"). Adherence to a debt policy helps to ensure the City of lone's debt isi issued and managed prudently in order to maintain a sound financial position and credit worthiness. When used in this Debt Policy, "debt" refers to all indebtedness and financing obligations of the City of  lone and its related entities (together referred to as "City").  3. Debt Policy Objective  This Debt Policy is intended to comply with the requirements of Senate Bill 1029 (SB 1029), codified as part of California Government Code Section 8855(i), effective on January 1, 2017 and shall govern all debt undertaken by the City. The primary objectives oft the City's debt and financing  related activities are to:  A. Maintain the City's sound financial position;  B. Ensure the City has the flexibility to respond to possible changes in future Ensure that all debt is structured in order to protect both current and future D. Minimize debt service commitments through efficient planning and cash E. Protect the City's credit worthiness and achieve the highest practical credit  service obligations, revenues, and operating expenses; taxpayers, ratepayers and constituents of the City;  management:  ratings, when applicable; and    F. Ensure the Cityi is in compliance with all relevant State and Federal securities  laws and other applicable laws and regulations. 4. Acceptable Uses ofDebt Proceeds  The City will consider the use of debt financing primarily for assets and capital projects only ifthe term, of debt shall not exceed the asset(s) or project's useful life or will otherwise comply with Federal tax law requirements. An exception to this long-term driven focus is the issuance of short- term instruments, such as tax and revenue anticipation notes, which are to be used for reasonable cash management purposes, as described below. Bonded debt should not be issued to finance normal operating expenses. General Fund debt will not be issued to support ongoing operational costs unless such debt issuance achieves net operating cost savings and such savings are verified by independent  analysis.  A. Long-Term Debt. I.  Long-term debt may be issued to finance the construction,  acquisition, and rehabilitation of capital improvements and facilities, equipment, and land to be owned and/or operated by the City. Long-term debt financings are appropriate when any of the  following conditions exist:  (I) When the project to be financed is necessary to provide basic (2) When the project to be financed will provide benefit to the City's constituents over a duration of more than one year; (3) When the total debt financing would not impose an unreasonable burden on the City and its taxpayers and/or ratepayers, as applicable; (4) When the debt is used to refinance outstanding debt in order to produce debt service savings or to benefit from debt restructuring. ii. The City may use long-term debt financings subject to each of the (1) The project to be financed has been or will be considered and (2) The weighted average maturity of the debt (or the portion of the debt allocated to the project) will not exceed the average useful life ofthe (3) The City estimates that sufficient revenues will be available tos service (4) The City determines that the issuance ofthe debt will comply with the applicable requirements of State and Federal law.  municipal services;  or  following conditions:  approved by the City Council;  project to be financed by more than 20%; the debt,through its maturity: and  2    B. Short-term Debi. Short-term debt may be issued to provide financing for the  City's operational cash flows in order to maintain a steady and even cash flow balance. Short-term debt may also be used to finance the City's short-lived capital projects, such as undertaking lease- behalf of other governmental agencies or private third parties in order to further the public purposes of the City. In such cases. thc City shall take reasonable steps to confirm the financial feasibility of the project to be financed, the financial solvency of any borrower, and that the issuance ofsuch debt  purchase financing for equipment.  C. Financings on Behalf of Other Entities. The City may also issue debt on  isc consistent with the policies set forth herein. 5. Standards for Use of Debt] Financing  The City recognizes that there are numerous types of financing structures and funding sources available, each with specific benefits, costs, and risks. The City will consider debt issuance only in those cases where public policy, equity and economic efficiency favor debt financing over cash funding. Prior to the issuance of debt or other financing obligations, the City will carefully consider the overall long-term affordability of the proposed debt issuance by conducting an objective analysis of the City's ability to support additional debt service payments. The City will consider its long-term revenue and expenditure trends, the impact on operational flexibility and the overall debt burden on the laxpayer/ratepayers. The evaluation process shall include a review of generally accepted measures of affordability and will strive to achieve and/or maintain debt levels consistent  with its current operating and capital needs. 6. Types of Debt exclusive to the following:  In order to maximize the financial options available to benefit the public, it is the City's policy to allow the consideration ofi issuing all generally accepted types of debt, including. but not COPs are limited-liability obligations tied to a specific enterprise or special fund revenue stream where the projects financed clearly benefit or relate to the enterprise or are otherwise permissible uses of the special revenue. Generally, no voter approval is required to issue this type of obligation buti ins some cases, the City must comply with proposition 218 regarding rate adjustments. COPs, the City may obtain financing through the issuance of debt by a joint exercise of powers agency with such debt payable from amounts paid by the City under a lease, installment sale construction or acquisition of improvements to real property that benetit the public at large. The California Government Code, Division 4. Chapter 4, Article I commencing with section 43600 authorizes cities to finance certain municipal improvements through GO bonds when a city determines the public interest and necessity demands the acquisition, construction or completion of such municipal improvements, including property or structures necessary or convenient to carry out the objects, purposes. and powers of a city. Examples of projects include but are not limited to  A. Revenue Bonds/Certficates of Participation (COPs). Revenue Bonds and  B. Joint Powers. Authority (JPA) Lease Revenue Bonds. As an alternative to  agreement, or contract ofi indebtedness.  C. General Obligation (GO) Bonds. GO Bonds are suitable for use in the  3    libraries, parks, and public safety facilities. All GO bonds shall be authorized by the requisite number obligations, or other similar funding structures secured byap prudent source or sources of repayment. developers for the use of debt financing secured by property-based assessments or special taxes in order to provide for necessary infrastructure for new development under guidelines adopted by City Council, which may include minimum value-to-lien ratios and maximum tax burdens. Examples of this type of debt are Assessment Districts (ADs) and Community Facilities Districts (CFDs), also known as Mello-Roos Districts. In order to protect bondholders as well as the City's credit rating, the. City will also comply with all State guidelines regarding the issuance of special tax or special secured by the allocation of tax increment revenues that are generated by increased property taxesi in the designated (now former) redevelopment project areas. Tax Allocation Bonds are not debt of the City. California Health and Safety Code, Division 24, Parts 18 and 1.85 limit the authority to issuance of tax aliocation bonds only as to refunding of bonds properly and timely issued prior to January 1, 2011; such laws are referred to as the "Dissolution Law" and govem successor agenciesto G. Short-Term Debt. Short-term borrowing, such as commercial paper, Tax and Revenue Anticipation Notes (TRANS), and lines ofcredit, may be considered as an interim source of funding in anticipation of long-term borrowing and may be issued to generate funding for cash flow needs. The final maturity of the debt issued to finance the project shall be consistent with the useful life of the project. Short-term debt may also be used to finance short-lived capital projects such as H. Refunding Bonds. The City shall refinance debt pursuant to the authorization thati is provided under California law, including but not limited to Articles 9, 10and II of Chapter 3 of Part lof Division 2 of Title 5 of the California Government Code, as market opportunities arise.  ofvoters in order to pass.  D. Loans. The City is authorized to enter into loans, installment payment E. Special Assessment/Special Tax Debt. The City will consider requests from  assessment debt.  F. Tax Allocation Bonds. Tax Allocation Bonds are special obligations thata are  now dissolved redevelopment agencies.  lease-purchase financing for equipment.  Refundings may be undertaken in order:  (I) To take advantage of lower interest rates and achieve debt service costs (2) To eliminate restrictive or burdensome bond covenants; or  savings;  (3) To restructure debt to lengthen the duration of repayment, relieve debt service spikes. reduce volatility ini interest rates or free up reserve funds. Generally, the City shall strive to achieve a minimum of 3% net present value savings. The net present value assessment shall factor in all costs, including issuance. escrow, and foregone interest earnings ofa any contributed funds on hand. Refundings which produce a net present value savings of less than 3% will be considered on a case-by-case basis. Upon the advice of the City Manager or the Finance Manager and with the assistance ofa financial advisor and bond counsel, the  4    City will consider undertaking refundings for other than economic purposes based that such a restructuring is int the City's overall best financial interest. The City may from time to time find that other forms of debt would be beneficial to further its public purposes and may approve such debt without an amendment oft this Debt Policy. Debt shall be issued as fixed rate debt unless the City makes a specific determination as to why a variable rate issue would be beneficial to the Cityi in that Circumstance. 7. Relationship to Capital Improvement Program and Operating Budget  a upon finding  The City intends to issue debt for the purposes stated in this Debt Policy and the decision to incur new indebtedness should be integrated with the City Council-adopted annual Operating Budget and Capital Improvement Program Budget. Prior to issuance of debt, a reliable revenue source shall bei identified to secure repayment of the debt and the annual debt service payments shall be included The City shall integrate its debt issuances with the goals of its Capital Improvement Program by timing the issuance of debt to ensure that projects are available when needed in turtherance of the  in the Operating Budget. City's public purposes.  8. Policy Goals Related to Planning Goals and Objectives  This Debt Policy has been adopted to assist with the City's goal of financial and financial prudence. In following this Debt Policy, the City shall pursue the following sustainability policy  goals:  i. The City is committed to financial planning, maintaining appropriate reserves leveis and employing prudent practices in governance, management and budget administration. The City intends to issue debt for the purposes stated in this Debt Policy and to implement policy decisions incorporated in the City's annual Operating ii. Itis a policy goal of the City to protect taxpayers, ratepayers and constituents by utilizing conservative financing methods and techniques sO as to obtain thc highest practical credit ratings, ifa applicable, and the lowest practical borrowing costs; lii. Iti is a policy goal of the City to reduce the unfunded liabilities for employee pension iv. The City will comply with applicable state and federal law as it pertains to the maximum term of debt and the procedures for levying and imposing any related When refinancing debt, it shall be the policy goal of the City to achieve, whenever possible and subject to any overriding non-financial policy, minimum aggregate net present value debt: service savings of at least. 3% of the refunded principal amount.  Budget;  and other post-employment benefits (OPEB); taxes, assessments, rates and charges; and  V.  5    9. Internal Control Procedures  When issuing debt. in addition to complying with the terms ofthis Debt Policy. the City shall comply with any other applicable policies regarding initial bond disclosure, continuing disclosure, The City will periodically review the requirements of and will remain in compliance with the Federal securities law, including any continuing disclosure undertakings under SEC ii. Any federal tax compliance requirements including without limitation arbitrage and li. The City'sinvestment policies as they relate to the investment ofb bond proceeds; and iv. Government Code section 8855(k) and the annual reporting requirements therein. The City shall be vigilant in using bond proceeds in accordance with the stated purpose att the time that such debt was issued. The City Manager, the Finance Manager or designee will monitor the expenditure of bond proceeds to ensure they are used only for the purpose and authority for which the bonds were issued. Whenever reasonably possible, proceeds of debt will be held by a third-party trustee and the City will submit written requisitions for such proceeds. The City will submit a requisition only after obtaining the signature of the City Manager or the Finance Manager.  post-issuance compliance, and investment of bond proceeds.  following: i.  Rule 15c2-12;  rebate compliance. related to any prior bond issues;  10. Amendment and Waivers of Debt Policy this Debt Policy are subject to specific City Council approval.  This Debt Policy will be reviewed and updated periodically as needed. Any amendments to While adherence to this Debt Policy is required in all applicable circumstances, on rare occasions there might be circumstances when strict adherence to a provision of this Debt Policyis not possible or not in the best interest of the City. If the City staff has determined that a waiver of one or more provisions of this Debt Policy should be considered by the City Council, it will prepare an analysis for the City Council describing the rationale for the waiver and the impact of the waiver on the proposed debt issuance and on taxpayers, if applicable. Upon a majority vote of the City Council, one or more provisions oft this Debt Policy may be waived for a debt financing. The failure of a debt financing to comply with one or more provisions of this Debt Policy shall in no way affect the validity ofany debti issued by the City in accordance with applicable laws.  11. SB 1029 Compliance  SB 1029. signed by Governor Brown on September 12, 2016. and enacted as Chapter 307, Statutes of2016, requires issuers to adopt debt policies addressing each of the five items below: A. The purposes for which the debt proceeds may be used. Section 4 (Acceptable Uses of Debt Proceeds) addresses the purposes for which debt proceeds may be used.  6    B. Ihe lypes of debt that may be issued. Section 6 (Types of Debt) provides C. The relationship of the debt 10, and integration with, the issuer's capital  information regarding the types of debt that may be issued.  improvement program or budget, if applicable. Section 7 (Relationship to Capital Improvement Program and Operating Budget) provides information regarding the relationship between the City's (Debt Policy Objective) and Section 8 (Policy Goals Related to Planning Goals and Objectives) address some of the City's policy goals and how this Debt Policy has implemented them. implement, to ensure that the proceeds oft the proposed debt issuance will be directed to the intended use. Section 9 (Internal Control Procedures) provides information regarding the City's internal control procedures designed to ensure that the proceeds ofi its debt issues are spent as intended. This Debt Policy, as written, complies with and meets the requirements ofSB 1029.  debt and Capital Improvement Program and annual Operating Budget.  D. Policy gouls relaled to the issuer's planning goals and objectives. Section 3 E. The internal control procedures that the issuer has implemented, or will  7    Agenda Item  #  DATE: TO: FROM:  June 29, 2015 lone City Council Jon G. Hanken, City Manager  SUBJECT: Cityof lone Financal Policies and Procedures Handbook.  RECOMMENDED ACTION: There is no recommended action requested.  Motion:  FISCAL IMPACT: None  BACKGROUND: The City had a footnote in the past few audit reports requesting the City adopt financial policies and procedures to assist in achieving long-term stable and positive financial positions. Council adopted the proposed handbook at their June 16th meeting. However, staff was unable to provide Councilors with an advance copy of the document for them to review and make recommendations. The motion to adopt the financial policies and procedures was done to remove the footnote from the upcoming audit. Tonight, Council will have the opportunity to review this document in more detail This document provides a guideline to the Finance Manager and the City Treasurer on directing the day to day financial affairs and developing policy recommendations to the City Council. Staff will continue to revisit this document with Council every quarter to discuss any necessary changes. One suggestion that staff would like to recommend for Council consideration is incorporating Resolution No. 2015-25: A Resolution of the City Council of the City of lone Establishing Policies on Interfund Transfers, Consolidating Funds, and Eliminating Funds into the adopted Financial Policies and Procedures manual. By adding this information, staff will be able to maintain financial policies in one The Financial Procedures and Policy Manual is divided into 19 sections and covers the issues of accounting, auditing, financial reporting, internal controls, operating and capital budgeting, revenue management, expense control, debt management, and planning. Staff wants to ensure that the City's financial position is presented in conformity to the Generally Accepted Accounting Principles (GAAP) and that we are in compliance with fiancé related legal and contractual issues as required by state and federal law.  and make any adjustments it deems necessary.  central location.  Page 1 of2    Attachments: City of lone Financial Policies and Procedures Handbook. June 2015  Resolution No. 2015-25: A Resolution of the City Council of the City of lone Establishing Policies on Interfund Transfers, Consolidating Funds  and Eliminating Funds. Adopted June 2, 2015  Page 2of2    Cityo ofIone  CITY OF IONE  FINANCIAL POLICIES AND PROCEDURES HANDBOOK  June 2015  Page 1 of60    City € ofIone  FOREWARD  This handbook provides information and guidelines to staff ont the financial principles ofthe City of lone. Iti is intended to help the City achieve al long-term stable and positive financial condition. The document was developed with the assistance of the City's accountant and As City Manager,! want to stress thei importance of revisiting these guidelines every few months or sO during thet first year to ensure accuracy. After the first year, the document. should be revisited annually toi incorporate recommendations byt the City Auditor and to update procedures to meet the objective ofmaintaining: a positive financial condition. This document will be used by the City Manager, Department Heads, the Financial and the City Treasurer in planning and directing the City's day to day financial affairs. Manager, The scope of these procedures generally spans accounting, auditing, financial internal controls, operating and capital budgeting, revenue management, cash reporting, and investment Full participation, cooperation, and: support of City personnel are vital to ensure soundi fiscal  finance personnel.  management, expense control, and debt management.  activities.  June 16, 2015  Jon G. Hanken City! Manager  Page 2 of60    Cityoflone TABLE OF CONTENTS  Section 1- FINANCIAL POLICIES AND PROCEDURES I. General implementation and Compliance Guidelines. II. Accounting, Auditing, and Financial Reporting.  I.  Statement of Purpose.. IV. Operating Budget.. V. Revenue Management. VI. Expense Control.. VII. Asset Management. VII. Capital Expenses.. IX. Financial Conditions, Reserves, and Stability Ratios.. X. Treasury and Debt Management. XI. Internal Controls.. XII. Staffing and Training.. Section 2- CASH CONTROL Statement of Purpose.. I. Policy Statement. HI. Basic Principles and Standards. IV. Safeguarding Cash.. V. Guidelines for Handling Cash.. VI. Guidelines for Handling Checks. VII. Returned Checks.. VILI. Cash Overages.. Section 3- ACCOUNTS RECEIVABLE  6 6 7 9 11 13 14 15 17 17 19 19 20 20 20 21 22 22 23 23 24 24 25 25 26 26 27  I.  I. Policy Statement. I. Receipt System.. III. Procedure..  IV. Automatic Debit/Credit Payment Procedure.. V. Posting Error Corrections.. VI. Tenant/Wastewater Deposits. VII. Accounts Other Than' Wastewater. Section 4- BANK ACCOUNTS  I. II.  Policy Statement.. Bank. Accounts. II. Bank Deposits.. IV. Endorsements/ Checks.. V. Bank Reconciliation. VI. Procedure.. VII. Bank Charges.. VIII. Bank Account Records.  29 29 29 30 30 30 30 30  Page 3of60    CityofIone  Section 5- WARRANTS I. II.  Policy Statement Replacement of Cancelled Warrants. II. Stop Payments.. IV. Imprest Cash Fund (Petty Cash).. Section 6- AUTHORIZED SIGNATURES  32 32 32 32 34 34 35 35 35 36  .. I. I.  Policy Statement Authorization..  Section 7- CHART OF ACCOUNTS Policy Statement II. Fund Accounting. I. Account Code. IV. Use of Account Numbers..  Section 8- FISCAL RECORDS RETENTION AND DISPOSITION I. Retention Schedule of Financial Documents. Section 9- FISCAL FORMS PREPARATION  I.  Policy Statement  37 37  I. H.  Official Manual City Receipt.. Statement of Purpose.. III. Preparation.. IV. Distribution.. V. Deposit Slip Books for Cash..  39 39 39 39 40  Section 10- CLAIMS/ACCOUNTS PAYABLE/CASH DISBURSEMENTS  I. Policy Statement II. Objective.. III. Procedure.. IV. Void Checks.. V. Vendor Setup.. VII. City Credit Card Use.. VII. Travel Claim..  41 41 41 42 42 42 43 44  VI. Requistion/Purchase Order Form- Request Form..  Page 4 of60    CityofIone  Section 11- BUDGET AMENDMENT RESOLUTION  I. Purpose II. Preparation.. I. Purpose.. II. Preparation. II. Procedure.  45 45 46 46 46  Section 12- PAYROLL PROCESSING  Section 13- CALIFORNIA PUBLIC EMPLOYEE'S RETIREMENT SYSTEM REPORTING  I.  Purpose I. Employer Contribution Rates.. III. Preparation. Section 14- FINANCIAL SYSTEM Section 15- DEVELOPER ACTIVITY Section 17- CAPITAL ASSETS  48 48 48 50 51 52 54 55 56 58  Section 16- YEAR END CLOSING AND FINANCIAL REPORTING Section 18- OTHER POST-EMPLOYMENT BENEFITS Section 19- FUND BALANCE POLICY  GLOSSARY.  Page! 5of60    CityofIone  SECTION 1-FINANCIAL POLICIES AND PRODCEDURES  I.  STATEMENT OF PURPOSE  This Financial Handbook is to enable the City of lone to achieve a long-term stable and positive financial condition. The watchwords of the City's financial management include integrity, prudent stewardship, planning, accountability, and full disclosure. The more specific purpose is to provide guidelines to the Finance Manager and City Treasurer in directing the day-to-day financial affairs, and in developing recommendations The scope of these procedures generally spans, among other issues, accounting, auditing, financial reporting, internal controls, operating and capital budgeting, revenue management, expense control, debt management, and planning concepts in order to:  tot the City Manager and City Council.  Present fairly, and with full disclosure, the financial position and results of financial operations of the City in conformity to Generally Accepted Accounting Principles Determine and demonstrate compliance with finance-related legal and contractual  (GAAP), and  issues as required by state and federal law. This directive is distributed to all City personnel.  II. GENERAL MPLEMENTATION AND COMPLIANCE GUIDELINES  A. Implementation, compliance, accountability, and review  The Finance Manager will be accountable for implementing these procedures and will, to the best of his or her knowledge make the City Manager aware of any variances in practice from these procedures or any other deviation from prudent financial practices in accordance with GAAP, federal laws, state laws, or ethics of the profession. Any  variances will be presented as soon as the variance is determined.  B. Annual Review  The Financial Handbook will be reviewed annually and updated, if necessary.  Page 6of60    CityofIone  III. ACCOUNTING, AUDITING, AND FINANCIAL REPORTING  A. Accounting  The City is solely responsible for preparing its financial affairs, both internally and externally. The Finance Manager is responsible for establishing the Chart of Accounts and for properly recording financial transactions int the General Ledger.  1. Reconciliation  All balance sheets and revenue accounts are reconciled monthly.  B. External Auditing 1. Annual Audit  The City will be audited annually by externai independent accountants (Auditor). The Finance Manager will be the contracting officer technical representative for the annual audit. The Auditor will meet with the City's Finance Committee prior tos starting the audit and when the draft audit report is prepared.  2. Auditor Reputation  The external auditor must be a CPA firm and must demonstrate that it has the breadth of experience and depth of staff to conduct the City's audit in accordance with generally accepted auditing standards and contractual requirements.  3. Schedule  The external Auditor's report on the City's financial statements will be completed  within 180 days of the City's Fiscal Year end.  4.  Management Letter  The external auditor will prepare and will jointly review the Management Letter with the Finance Committee, Finance Manager, and City Manager. Within 30 days of this receipt, the Finance Manager shall respond in writing to the City Manager regarding the auditor's Management Letter, addressing the issues therein. The City Manager, upon acceptance of the recommendations from the Finance Manager concerning the Management Letter, shall forward the  Management Letter and the response to the City Council.  Page 7of60    CityofIone  5. External Auditor's Accountability to City Council  The external auditor is accountable to the City Council and will have access to the City Council members as the external auditor considers such communication  necessary toi fulfill its legal and professional responsibilities.  6. Rotation of External Auditor  The City does not require an external auditor rotation, but may circulate requests  for proposal for audit services. 7. External Auditor Accountability to Staff  The following will be provided to City Staff by the external auditor:  Copies of all work papers, including diskettes and schedules, will be furnished to the City upon completion of the audit. Originals will be maintained at the  auditor's office  C. Financial Reporting  1. External Reporting  a. Scope- The City's basic financial statement shall be prepared in accordance with GAAP and the Governmental Accounting Standards Board b. Schedule- The City's basic financial statement shall be provided to the City Council within 180 calendar days of the City's Fiscal year end. The Finance Manager will inform the City Manager of any delay and the reasons therefore.  (GASB).  2.  Internal Reporting  The Finance Manager will prepare internal financial reports sufficient to plan, a. Scope/ Format- The level of detail presented should be line item. Information included should be current month budget and actual; budget and b. Schedule- On a monthly basis, the Finance Manager shall prepare a summary of the City's financial affairs. The report shall be submitted to the Manager following the end of each calendar month for his or her review. Each City such report shall accurately reflect the City's current cash position, revenue, and  monitor, and control the City's financial affairs.  actual year-to-date; and variance from budget.  Page 8 of60    CityofIone  expense performance as well as any additional information that reflects the City's  fisçal position: C.  Reconciliations- Reconciliation of all balance sheet and revenue accounts  shall be performed monthly.  V. OPERATING BUDGET A. Preparation  Budgeting is an essential element of the financial planning, control, and evaluation process of the City. The City's "Operation and Maintenance Budget" is the City's annual financial  operating plan.  1. Budget Scope and Format  The annual budget process shall begin by the City manager reviewing the current year's budget status, and any changes in policy requested by the City Council. A proposed budget shall be prepared by the City Manager and Finance Manager reflecting the guidelines set by the City Manager and City Council, with the participation of all the City's departments. The budget shall include three basic segments for review and evaluation. These segments are: (1) Financial Overview/Summaries of all Funds, including statements of operations, (2) Operation and Maintenance Program for the General Fund, Special Funds, and Enterprise Funds, and (3) Capital Maintenance and Improvement Program (CMIP). A five-column format should be used such that 2-years prior actual, prior year actual, current year adopted, current year estimate, and next year  adopted are all clearly shown.  2. Basis of Budgeting  The basis of budgeting will conform to a full accrual basis, except where adjustments for capital expenses, work in process or other financial adjustments are involved. These adjustments will be accommodated at year-end financial  reporting. Budgetary Process  3.  The budget is prepared by the City Manager based on guidelines outlined by the City Manager and City Council with the cooperation of all City departments. The budget is started by the Finance Manager using information compiled from prior year activity, current year, year-to-date activity, and information gathered for future projections. Departments are responsible for submitting budget requests including any capital purchases to be utilized in the preliminary budget  Page9of60    CityofIone  preparation. The City Manager and the Finance Manager will review all budget details to assure compliance with City policy and will present the draft preliminary budget to the Finance Committee for its review and recommendations. The City Manager and Finance Manager will make any adjustments as recommended and will present the draft final budget to the City Council at a Public Hearing. The City Council will review the budget presented and make recommendations if any to staff. If recommendations are made the adjustments will be implemented and the final budget will be brought back for official adoption at the City Council's regular June meeting (or at a special meeting in the month of June if circumstances sO require). The City Manager will inform the departments of the  approval, denial, or modifications to their budget submissions.  4. Budget Adoption  Upon presentation of a proposed budget to the City Council, it is the goal that it can be acted upon and approved by the City Council in the month of June.  5. Budget Amendments  Any time during the fiscal year, the City Manager may recommend amendments to the adopted budget. Budget amendments are submitted to the City Council for  approval and adoption.  B. Balanced Budget  Itis intended that the operation and maintenance budget be balanced with current revenues, exclusive of beginning resources, greater than or equal to current expenses. The City's share of net remaining revenue, depending on the fund, shall be transferred tot the City's Capital Fund or General Fund Contingency for use in establishing the  budget, for other capital expenses, or held in reserve.  C. Financial Plans  Before the start of the new fiscal year, the departments will prepare financial plans based on the approved Operation and Maintenance Budget. Financial plans will be updated quarterly or semi-annually to reflect changes in priorities as the fiscal year progresses. The Finance Manager will inform the departments of changes to their plans, including approvals, denials, and/or modifications to requested line items. The departments will track the execution of the Operation and Maintenance Budget using  the latest approved revision to their financial plans.  Page 10of60    CityofIone  D. Reporting  Monthly budget to actual reports will be prepared to enable the departments to manage their budgets and to enable the City Manager to monitor and control the budget as authorized by the City Council. These reports will be presented to the City Council for review and comments at the second meeting of each month. Summary financial reports will be presented to the City Council annually. Such reports will be in a format appropriate to enable the City Council to understand the budget status at a level of  summary executive detail.  E. Control  Operating Expense Control is addressed in Section 6.  F. Operating Position  The guidelines that the City should be following to assure fiscal stability are those outlined in Financial Conditions, Reserves, and Stability Ratios (Section 9).  V. REVENUE MANAGEMENT A. Characteristics  The City will strive for the following optimum characteristics in its revenue system:  1.  Simplicity  The City, where possible and without sacrificing accuracy, will strive to keep the revenue system simple in order to reduce compliance costs and to make it more  understandable. 2. Certainty  A thorough knowledge and understanding of all revenue sources increases the reliability of the revenue system. The City will understand its revenue sources and enact consistent collection procedures to provide assurances that the  revenue base will materialize according to budgets and plans.  3. Equity  The City shall make every effort to maintain fairness in its revenue system structure. The City shall require that there be a balance in the revenue system; i.e. the revenue base will have the characteristic of fairness and neutrality.  4.  Administration  Page 11 of60    Cityoflone  The benefits of a revenue will exceed the cost of producing the revenue. The cost of collection will be reviewed annually for cost effectiveness.  5.  Diversification and Stability  Inc order to protect itself from extreme fluctuations in a revenue source due to changing economic conditions, variations in weather, or other external issues, the City will maintain a diversified revenue system which will provide as stable  source of income with a goal of balancing.  B. Sources of Funds  The following considerations and issues will guide the City in its revenue policies  concerning specific sources of funds: 1. Non-Recurring Revenues  One-time or non-recurring revenues will not be used to finance current ongoing operations. Non-recurring revenues should be used only for one-time expenses such as long-lived capital needs. They will not be used for budget balancing  purposes. 2. Debt Collection Policy  a. Sewer Accounts- A 95 percent collection rate shall serve each year as as goal for current revenue collections. All delinquent accounts shall be aggressively pursued by the City. Accounts delinquent more than 90 days shall be considered in collection. A late charge, which shall include all collection costs or attorney's fees as permitted by applicable law and in accordance with the Municipal Code, shall be assessed on all revenues b. Transient Occupancy Tax (TOT) A95 percent collection rate shall serve each year as a goal for current concessions and other revenue collections. All delinquent accounts shall be aggressively pursued by the City. A late charge, which shall include all collection costs or attorney's fees as permitted by applicable law and in accordance with the Municipal Code, shall be assessed on all revenues delinquent more than 30 days.  delinquent more than 30 days.  3. Interest Income  Interest income earned from investment of available monies will be distributed to  each fund proportionately. Sewer Accounts  4.  Page 12 of60    CityofIone  Annually, the City will review and adopt rates and charges that will generate revenues required to fully cover operating expenses in the sewer, meet the legal restrictions of all applicable bond covenants, and provide for an adequate level of working capital needs. This policy does not preclude drawing down cash balances to finance current operations. However, it is recommended that any  extra cash balance be used instead to finance capital projects.  5. Transient Occupancy Tax (TOT)  The City may contract with an outside auditor to audit revenues received for TOT  toe ensure that all covered operations are reporting as required.  6. Other User-Based Fees and Service Charges  For special services associated with a user fee or charge, the direct and indirect costs of that service will be offset by the fee where possible. There may be an annual adjustment of rates and charges to ensure that fees provide adequate coverage of costs of services as required in the City's Fee Study.  7. Grants  Any potential grants will be examined for matching requirements. These revenue sources should be used for one-time expenses or to initially start a program and replace the grant funding with a steady revenue source or eliminate program  when grant funds are exhausted. Revenue Monitoring  8.  Revenues actually received will be compared regularly to budgeted revenues, and variances will be reviewed. This process will be summarized in the appropriate budget report. Any material discrepancy will be reported to the City  Manager for further review.  VI. EXPENSE CONTROL  A. Funding Authorization  The level of budgetary control for the 0&M program is the department budget. When budget adjustments between departments are necessary, they must be approved by the City Manager. Budget adjustments at lower levels of control shall be made in  accordance with the applicable administrative procedures.  B. Central Control  Upon recognition of any significant 0&M budgetary deficit or savings in a Department, it shall be reported to the Finance Manager for inclusion in the mid-year Budget Review  Page 13of60    Cityoflone  Reports. Any reprogramming of recognized savings should be reviewed by the Finance  Manager and the City Manager before the funds are recommitted.  C. Prompt Payment  All invoices approved for payment by the proper City officials shall be paid by the Finance department within thirty (30) calendar days of receipt, unless otherwise The Finance Manager shall establish and maintain proper procedures which will enable the City to take advantage of all purchase discounts. Where no payment discounts are offered, payment will be made by the earliest of the payment due date or 30 days from  specified int the contract.  receipt oft the invoice. D. Equipment Financing  Equipment may be leased or financed if the cost advantages provide a clear and  definitive benefit to the City. E. Risk Management  Every opportunity will be aggressively pursued to conserve and protect the City's resources from accidents and loss exposures affecting its human, financial, natural, and physical resources. The goal shall be to minimize and uncover significant loss exposures which would threaten the City's assets. The Risk Management program will emphasize a proactive safety and loss prevention program and a comprehensive claims management program as an important part of the City's management. All reasonable financing methods will be reviewed to provide sufficient funding to meet loss situations if and when they occur. Such options may include the purchase of insurance and self-insurance. Reserves for accident and loss exposures will be established by a combination of actuarial consultants, third party administrators, and the City Manager. The reserves will not be used for purposes other than for financing  losses.  VII. ASSET MANAGEMENT A. Investments  The City Manager or designee shall promptly invest available City funds in accordance with the provisions of the City's Investment Policy with the Local Agency Investment At the end of each Fiscal Year, a report on investment performance will be provided to  Fund or the City's investment broker.  the City Council.  Page 14of60    CityofIone  All investments will be reconciled quarterly.  B. Cash Management  The City's cash flow will be managed to maximize the cash available to invest. Such cash management will entail the centralization of cash collections, where feasible. The Finance Department shall, on payments authorized by the City, obtain the signature The Finance Manager, or designee, may transfer funds via electronic transfer through written instructions to the City's Depository for investment purposes or for payment of any obligation of the City under the conditions applicable to Paragraph 7.2. Payment authorization shall be in accordance with criteria as defined in the current Bank Depository Agreement, stipulating the conditions and control procedures on such  of the appropriate signing official.  activity.  All cash accounts will be reconciled monthly.  C. Fixed Assets and Inventory  Fixed assets will be reasonably safeguarded and properly accounted for an prudently  insured.  D. System Data Security  The Finance Manager shall provide for the security of its Financial Management system  and data files.  VIII. CAPITAL EXPENSES A. Scope  Capital expenses of the City may be budgeted in one of three categories:  1.  Equipment and facility projects of limited scope are budgeted as line items in the O&M Budget (ie., street sweeper, fire trucks, painting, rest room renovation). 2. The design and construction of major ongoing repair and rehabiltation work at the City facilities (i.e., road paving, roof replacement, construction of minor facilities, and design or planning of any facility) and the planning, design and construction of major improvements at the City facilities are budgeted by separate projects. Revenue enhancement and enterprise projects designed to increase revenues are budgeted as separate projects (i.e., renovation of park  facilities or sewer master plan implementation).  Page 15 of60    City - ofIone  3. The planning, design and construction of major improvements at the City facilities are budgeted, by project in the CCP budget (i.e., construction of new police  station or reconstruction of roadway.)  B. Budget Preparation  The City's Budget will be prepared annually on a fiscal year basis, including one, section for O&M expenses and capital expenses shown in one of the three categories identified The budgetary requirements for the equipment and small facility projects referred to in Section' VIL.A.1 will be addressed in the preparation of the 0&M Budget. The CMIP and CCP Budgets will be prepared independently and included with the O&M Budget with a notation of the source of funding for each project. Generally, funding for CMIP projects will be from fund revenues or reserve funds of the City while funding for  in the preceding paragraph.  CCP projects will be from debt financing and facility fees.  C. Budgetary Control  The City Manager must verify the availability of funds within the appropriate Budget before any equipment or capital facility project contract is presented to the City Council  for approval. D. Program Planning  The CCP Budget will be derived from the Engineering plans that will typically have a planning time frame of at least 5 years into the future. The budgetary requirements for replacement and maintenance of capital items should also be projected for the next 5 years. Future operation and maintenance costs will be considered, sO that these costs  can be included in the 0&M Budget.  E. Financing Programs  Where applicable, sewer fees should include the debt service for capital projects which Any City funds expended should be recovered over a reasonable time period and include an amortization factor. When debt is issued, it will be used to acquire major assets with expected life 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. The full cost of  have a primary benefit to sewer infrastructure.  debt should be recovered from the project's beneficiary.  Page 16of60    CityofIone  F. Equipment Maintenance and Replacement  The City recognizes that deferred maintenance and deferred replacement of equipment increases future capital costs. Therefore, a portion of the 0&M Budget may be set  aside each year to maintain the quality of the City's equipment.  G. Emergency Reserves  In addition to an on-going maintenance program as listed in Section VIL.F above, the City may establish Emergency Reserve Fund(s). The Emergency Reserve will be built from revenues and is to be used only in the case of a catastrophe occurring when the  CMIP fund is depleted.  IX. FINANCIAL CONDITIONS, RESERVES, AND STABILITYRATIOS A. Operational Coverage (No Operational Deficits)  Deferrals, short-term loans, or one-time sources will be avoided as budget balancing techniques. Reserves will be used only for emergencies or non-recurring expenses, except when balances can be reduced because their levels exceed guideline minimums  as stated in Section IX.B.  B. Liabilities  Procedures will be employed to maximize the realization of any discounts offered by creditors. Current liabilities will be paid within 30 days of receiving the invoice.  . Receivables  Sewer account receivables are due monthly. Other accounts receivable procedures are targeted to begin at 30 days from the invoice date, with any receivables aged past 30 days to be considered delinquent. Concurrence from the City Manager is required to write-off uncollectible accounts that are delinquent for more than 120 days, if the proper  delinquency procedures have been followed.  X. TREASURY AND DEBT MANAGEMENT A. Cash Management  The City's cash flow position will be reviewed periodically to determine performance of cash management and investment policies. Detailed procedures will be followed with respect to Cash/Treasury Management. The guiding principle will be that idle cash will be invested with the intent to (1) safeguard assets, (2) maintain liquidity, and (3) maximize return. Where legally permitted, pooling of investments will be done.  Page 17 of60    Cityoflone  The City will adhere to the investments authorized in applicable bond indentures and Investment Policies and Guidelines. Such policies will clarify acceptable investment securities, brokers, terms, and other pertinent investment information.  B. Types of Debt  1. Short-Term Debt 2. Long-Term Debt  No policy for short-term debt at this time.  Long-term debt will not be used for operating purposes, and the average life of a bond issue will not exceed the average useful life of projects financed  bond issue. 3. Special Facilities Debt  by that  When appropriate and in the interest of the City, special facilities debt issued by the City. Revenues derived from use of the special facilities may will be  used to pay debt service in lieu of general revenues.  be  C. Analysis of Financing Alternatives  Before undertaking any financing, the City will explore all reasonable alternatives in addition to long-term debt, including leasing, grants and other financing  use of reserves of current monies.  aid, and  D. Disclosure  Full disclosure of financial operations will be made to the bond other users of City financial information. The  rating agencies and  financial released.  City staff, with the assistance of its  advisor, feasibility consultant, and bond counsel, will prepare the materials for presentation to the rating agencies, will aid in the production necessary of Official Statements, and will take responsibility for the accuracy of all financial information  Page 18 of60    CityofIone  E. Legal Requirements  The City will maintain procedures to comply with grant requirements, arbitrage rebate,  and State and Federal requirements.  XI. INTERNAL CONTROLS A. Written Procedures  Wherever possible, written procedures will be established and maintained by the Finance Manager for all functions involving cash handling and/or accounting throughout the City. These procedures will embrace the general concepts of fiscal responsibility  set forth in this financial handbook. B. Department Head Responsibility  Each department is responsible for ensuring that good internal controls are followed throughout his or her department, that all internal controls are implemented, and that all internal control recommendations made by the internal and external auditors are  addressed.  XII. STAFFING AND TRAINING A. Adequate Staffing  Staffing levels will be adequate for the fiscal functions of the City to operate effectively. As a general rule, overtime shall be used only to address temporary or seasonal demands that require excessive hours. Workload shedding 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 encouraged and expected to communicate, teach, and share with other members all information and training materials acquired from seminars,  conferences, and related education efforts.  C. Credentials and Recognition  The City will support staffs efforts which result in meeting standards and receiving exemplary recitations on behalf of any of the City's fiscal policies, practices, processes, products, or personnel. Staff certifications may include, but are not limited to Certified Public Accountant, Management Accountant, Certified Internal Auditor, and Certified  Cash Manager.  Page 19 of60    CityofIone  SECTION 2- CASH CONTROL PURPOSE  I.  The purpose of the Cash Management Policy and Procedures is to provide  to  staff on proper accounting for all aspects of cash handling, recording, and guidance City of transactions in order to safeguard the City's financial well-being. This section processing will various processes for providing adequate internal control over the receipt of funds identify and formalize the procedures for cash receipt and billing operations. The Policy creates a general to performance standard for City employees who collect and process cash and is to be used as reference in the performance of their day to day tasks and responsibilities. The policies and a procedures contained in this document are applicable to all City departments under The Finance Department will provide assistance to City employees in performance of the procedures contained in this manual and the Finance Manager will be the interpreter of the  direction of the City Manager.  the  policies and procedures contained herein.  II. POLICY STATEMENT  Itshall be the responsibility of each department head to develop and implement the necessary procedures required to ensure that the provisions of these policies and procedures are  complied with by his/her department in the control of cash.  II. BASIC PRINCIPLES AND STANDARDS  A. Employee personal funds shall not be co-mingled with City Funds.  B. Deposits shall be made by the City Treasurer or Finance department staff other than the C. Bank accounts shall be reconciled monthly by the City Treasurer or Finance department D. The duties of cashiering and bookkeeping tasks shall be divided between two employees, neither of whom shall be permitted to have access to each other's records, E. Departments may accept payments in the form of cash, personal checks, bank checks and drafts, express and post office money orders, traveler's checks and cashier's checks. Wire transfers to the City's bank account will also be accepted with proper documentation supporting the wire transfer. Other methods of acceptable payment are credit cards, debit cards, and ACH transactions (Automated Clearing House).  person issuing receipts.  staff other than the person who makes deposits.  unless restricted by the number of personnel working.  Page 20 of60    CityofIone  F. When a payment is received in more than one form (check, money order, and currency) only one receipt shall be issued for the total payment. A memo notation shall be made on the receipt indicating the different forms of payment and the corresponding amount. G. When a check or money order is received covering payments on account for more than H. Nationally recognized traveler's checks may be accepted for payments subject to approval by the department head. Traveler's checks accepted in excess of the amount Checks drawn against foreign banks, including Mexican and Canadian banks should be J. All checks and money orders etc. shall be stamped with "Date Received" upon receipt. The department head or official in charge shall ensure that all cash received is adequately safeguarded until given to the City Treasurer or Finance department for deposit with the bank. A. Large amounts of cash shall not be allowed to accumulate. Frequent deposits shall be made by the City Treasurer, Finance department, or authorized employees to avoid  one person, a separate receipt must be issued for each.  due shall also be notated on the receipt. refused, including those drawn on U.S. dollars.  .  IV. SAFEGUARDING CASH  large amounts of cash on hand.  B. All cash held overnight shall be kept in the locked safe.  C. Safe combinations shall be restricted to as few employees as possible preferably memorized. When a written safe combination has to be maintained, it must be kept in a D. The Finance department shall ensure that combinations to safes are changed when an employee who has knowledge of the combination terminates City employment. E. During business hours, cash must be kept in a secure drawer or cash box not accessible to unauthorized persons. Cash drawers or cash boxes must be closed when F. Itis recommended that offices be locked during nonworking hours and office door keys G. Itis recommended that a record of office keys and other items issued be maintained and the department head should ensure that all items listed are returned by terminated  secure place.  not in use.  are restricted to as few responsible employees as possible.  employees.  Page 21 of60    CityofIone  V. GUIDELINES FOR HANDLING CASH  Employees shall exercise extreme care when handling cash. Losses of cash through careless handling of money are losses of money belonging to our citizens, and may be violation of the  law.  The following precautions shall be observed to guard against cash losses:  A. Keep the cash drawer neat at all times. C. Do not keep excess cash in the drawer.  B. Arrange currency neatly and attached to the corresponding receipt if any.  D. When making change, first count out the coins to the nearest dollar, then count the bills. E. Count the cash twice before paying out; once when removing it from the cash drawer F. Concentrate on each transaction. Do not permit any distraction while handling money. Ifthe transaction is interrupted for any reason, it should be started over.  and again as it is given to the customer.  G. Always keep cash secure and out of site in the cash drawer. H. Handle new bills with care as they have at tendency to stick together. At the close of each business day all cash is locked in the City's safe.  I.  VI. GUIDELINES FOR HANDLING CHECKS  Accepting checks in payments for amounts due is a convenience; however it can create costly problems and losses if bad checks are inadvertently accepted. The majority of all sewer customers pay their monthly sewer bills by check either at the front counter or by mail. The best way to keep bad check losses to a minimum is to follow sound and sensible practices and The following precautions shall be observed to guard against losses in accepting checks:  always use caution and common sense whenever accepting a check. A. The check must always be made payable to The City of lone.  B. Checks must be from a local or state bank.  C. The check writers name and address must be printed on the check.  D. Checks should only be written for the amount accepted; no cash or change shall be  given in return for a check written over the amount that is due.  E. Date must be current and not postdated.  Page 22of60    CityofIone  F. The check must have a bank I.D. number or routing number that runs across the bottom of the check along with the writers account number. These numbers are used to identify G. When checks are received through the mail for payment, staff opening the mail will ensure the required information is on each check, otherwise contact the payer by phone too obtain missing information before authorized staff deposits the check. H. All checks must be stamped with the date stamp and the City's endorsement stamp at  the transaction and resolve payment issues.  time of receipt.  VII. RETURNED CHECKS  The most common reason for checks to be returned by a bank is due to insufficient funds. The A. A copy of the returned check and returned check notice from the bank is made once notice of a returned check is received and confirmed through the City's bank. These copies will be kept in a file in the Finance department for audit and bank reconciliation B. All returned checks will be entered on a log showing date received, name of check C. The amount of the check, if written for waste water service, is charged back to the waste water account along with a $15.00 non-sufficient funds fee. If check was written for City services other that waste water, the check writer is invoiced for the returned D. If the funds have not been repaid in 30 days, the returned check file is turned over to the City Police Department for prosecution through the District Attorney's Office.  procedure for processing returned checks shall be as follows:  purposes.  writer, amount of check, action taken, and date paid.  draft amount and $15.00 non-sufficient funds fee.  VIII. CASH OVERAGES  A. Where cash overages occur and the reason for the overage cannot be determined, the custodian of the cash shall issue a receipt for the overage and deposit to the Miscellaneous' revenue in the appropriate fund, with the amount clearly identified as an B. Ifit is determined who paid the overage, the proper credit shall be issued to the customer's waste water account or a refund shall be made by submitting a claim form to Accounts Payable authorizing a refund be made from the same account as the original  overage soi it can later be identified if necessary.  deposit.  Page 23 of60    City ofIone  SECTION 3- ACCOUNTS RECEIVABLE POLICY STATEMENT  .  The majority of payment transactions received through the City are for monthly waste water fees. The Finance department bills all sewer customers on the first of each month which creates an accounts receivable record in the financial system. In addition, the Finance department also invoices contractors, governmental agencies or individuals for other services  which also creates an accounts receivable record int the financial system.  II. RECEIPT SYSTEM  The receipting system designed by the Finance department shall not be changed without prior approval of the Finance Manager. The Finance department must determine that the receipt form is adequate for the support of deposits, audit purposes and receipt control. Receipting systems used are front office receipt books in triplicate and post reports created in the City's  financial software, Blackbaud's The Financial Edge. A. WASTE WATER PAYMENTS & RECEIPTS  1.  PURPOSE services. PREPARATION  The majority of cash payments made at City Hall are for waste water utility  2.  a. When a payment is received through US Mail or over the counter by check, the check is date stamped by front office staff, the account number is written on the face of the check, and then puti in envelope in a secured drawer in mid lobby away from the front counter. If the check payment is received in person and the customer requests a receipt, a receipt is written from a triplicate receipt book. The account owner is given the white copy of the receipt, yellow b. When a payment is received in cash, it is logged in the triplicate receipt book listing the appropriate account number, account owner, and amount paid. The account owner is given the white copy of the receipt, yellow stays with the cash, and pink stays secured in the book. The cash is then placed in an envelope in a secured drawer located mid lobby away from the front countér. C. When a payment is made via credit or debit card, office staff will list the cardholder's information on a credit card transaction slip. The credit card transaction slip must include the cardholder's name, waste water account number, card number, expiration date, three- digit security code located on the  stays with the check, and pink stays secured in the book.  Page 24 of60    CityofIone  back of the card, and the customer's telephone. number. A receipt is issued from the receipt book and the customer is given the white copy and the credit card transaction slip is secured in the corresponding envelope in the secured drawer with the checks and cash. Credit or debit card transactions are received over the phone in the same method using the credit card transaction slip. All credit card transaction slips are to be destroyed after credit card information is entered into the electronic credit card terminal. All checks, cash, and credit card transaction  slips/receipts are locked in the safe nightly.  III. PROCEDURE:  A. Credit card transaction slips are ran through the credit card software Authorize.net partnered with Wells Fargo by the Finance department. This produces a printed, secure receipt; then the original transaction slips are then shredded. If the credit card transaction was declined the account owner would be notified by phone. The printed credit card receipts, checks and cash are then batched individually by the Finance department for posting. Each different tender is deposited separately where payments are balanced to the total in the City's Accounting Software, Financial Edge. Once transactions are balanced and posted by the business date they were received, a post report is generated and filed chronologically with the printed, secure receipts attached. B. Cash is paired with a triplicate deposit slip and sealed in a night drop security bag. One deposit slip stays with the cash deposit, one with the post report filed chronologically, and one int the deposit book. Authorized City employees make night drop cash deposits during business hours throughout the week at the Jackson Wells Fargo branch. C. Checks are placed in the treasurer's drawer in the safe until the Treasurer scans them through the Wells Fargo desktop check processer by deposit batches prepared by the Finance department which turns them into ACH transactions. After the checks have been scanned successfully, a deposit receipt is printed and filed with the corresponding post report, and the checks filed by date in the City's safe. Cancelled checks are kept for a period of three months, and then shredded. The City keeps these cancelled checks for 90 days in an effort to troubleshoot possible posting errors.  IV. AUTOMATIC DEBIT/CREDIT PAYMENT PROCEDURE  Account owners have the option to sign up for automatic payment via credit/debit card that draws on the 15th of every month. The customer fills out the Credit Card Authorization Form listing their name, service address, waste water account number, contact information & necessary credit card requirements. All forms are entered in a template located in the credit card software, Authorize.net partnered with Wells Fargo. On the 14th of every month all automatic credit/debit card clients' balances are verified, the template approved for payment, and the cards charged at midnight on the 15th. The next business day a confirmation email is  Page 25 of60    Cityoflone  sent to the credit card software administrators with an attachment of successful and unsuccessful transactions. The successful transactions are then uploaded in to the accounting software with an effective date of the 15th, which posts to the appropriate accounts and generates a post report to be filed chronologically. Customers are notified via phone or mail if they had unsuccessful transactions. The file containing all Credit Card Authorization Forms is kept in the City's safe and locked nightly. The Client can stop the automatic payment at any time by notifying the City. The original authorization form is then shredded. Since Finance staff is limited, the automatic debit/credit payment procedure is performed by the Account Tech V. Account owners have the option to sign up for automatic payment via checking account that draws on the 20th of every month. The customer fills out the Direct Payment Authorization Form listing their name, service address, waste water account number, contact information & necessary bank information. The form is then uploaded to a template through an Automated Clearing House provided by Wells Fargo. On the 19th of every month all Direct Payment client's balances are verified, the template approved and schedule to pull funds on midnight of the 20th. The next business day an ACH status of successful and unsuccessful transactions is accessed through Wells Fargo online and a detailed summary of transactions is uploaded into the City's financial software. The transactions then post to the client's account, which generates a post report that is filed chronologically. The file containing the Direct Payment Authorization forms is kept in the City's safe and locked nightly. The Client can stop the automatic payment at any time by notifying the City. The original authorization form is then  lland is periodically reviewed by the Finance Manager.  shredded.  VI. POSTING ERROR CORRECTIONS  Occasionally there will be a posting error in waste water accounts receivable that is typically found in the monthly bank reconciliation. In the event of a posting error the affected accounts are adjusted accordingly, with any interest and late penalties applied in error reversed. The  account owners are then notified in writing of the adjustments.  VII. TENANTIOWNER WASTE WATER DEPOSITS  A. PURPOSE  Property owners can have the City bill their tenant directly for waste water services.  B. PROCEDURE  A Renter/Owner Waste Water Agreement needs to be completed with the tenant's name, property address, billing address, contact information and property owner's signature. A property management company may sign for the owner of the property. This form must accompany a refundable deposit equivalent to three months sewer service charges. Once the form is submitted with the deposit, the waste water account  Page 26 of60    CityofIone  billing name and address is changed to the renter's name. The deposit is posted to the appropriate fund line item. When the tenant is ready to move from the property he/she notifies the Finance department. Finance staff checks the waste water account balance. Ifal balance is due it is deducted from the original deposit and the difference is then refunded to the tenant. If no balance is due, the full deposit of three months of waste water service charges is refunded to the tenant. The refund is processed by the Account Tech II via memo and given to Accounts Payable where the Finance Manager reviews request prior to payment. The billing name and address is then. changed back  into the property owner's name.  C. COLLECTION OF DELINQUENT WASTE WATER CHARGES  1. PURPOSE  Any waste water account with more than three months of unpaid charges are considered past due. Past due waste water accounts are verified and collected by way of a property lien through the Amador County Tax Roll. The delinquent account balance is rounded to an even dollar amount so it will be divisible by two property tax installments. The list of delinquent accounts by parcel number is prepared by the Account Tech II which is verified by the Finance Manager and is agenized at a regularly scheduled City Council meeting where it is approved by resolution or denied. Once approved, the parcel list, resolution, and letter of intent signed by the Mayor or Vice Mayor is sent to the Amador County Auditor's Office and placed on the upcoming roll. The delinquent dollar amount is then removed from the City's accounting software and tracked separately by the 2. The Account Tech II prepares the tracking spreadsheet and reconciles it periodically to the financial software, Financial Edge. All transactions on the tracking spreadsheet are reviewed by the Finance Manager. When a property tax installment is paid, the county sends payment along with a spreadsheet broken down by parcel number. The tracking spreadsheet is adjusted at that 3. When a property owner pays the balance in full at City Hall, they must pay the delinquent amount and a County imposed removal fee of $25.00 per parcel. The Finance department contacts the County in writing requesting the removal of the delinquent waste water lien. The tracking spreadsheet is then adjusted to reflect  Finance department.  time to reflect the balance due if any.  the balance as zero.  VII. ACCOUNTS RECEIVABLE PROCESSING OTHER THAN WASTE WATER  As soon as balances owed to the City for reasons other than wastewater are identified (such as for developer reimbursements), the Finance Department will set up a receivable in the  Page 27 of60    City ofIone  accounting system and generate an invoice. On a monthly basis, the Finance Manager will review an aging or other outstanding balance report for these non-wastewater receivables and generate delinquent invoices for unpaid balances. Balances over 120 days past due will be referred to the City Manager, who may refer them to the City Attorney or a collection agency  for follow up action.  The process for payments received other than for waste water services is processed similar to processing waste water payments. Payments received by front office staff are date stamped, placed in a separate envelope in a secured drawer in mid lobby of City Hall. The next business day the checks are batched and processed by the Finance department and dated the day they were received. The appropriate fund line item from the chart of accounts is identified to credit the payment in the Cash Receipts module of the City's accounting software. Once the payments are posted, a post report is generated, printed, and filed chronologically. Various payments are often received electronically from the State of California and the Federal Government. The sending party mails a notification to City Hall, once the electronic payment has been verified through Wells Fargo; it is posted individually according to the appropriate  fund line item. A post report is generated, printed and filed chronologically.  Page 28 of60    CityofIone  SECTION 4- BANK ACCOUNTS POLICY STATEMENT  I.  The Finance department and other authorized employees of the City make all deposits to the City's designated bank account as provided for in the agreement with Wells Fargo Bank.  II. BANK. ACCOUNTS  A. Wells Fargo Bank The City's main bank account which was established as a clearing account for depositing collections received by all City departments through conducting  of official City business and disbursements from City funds.  B. American River Bank-Savings C. American River Bank-Checking D. Local Agency Investment Fund (LAIF)  III. BANK DEPOSITS  All monies collected shall be deposited with the City's bank not later than 2-5 business days. Large sums of money shall not be held overnight, or over the weekends. All funds are deposited by scanning the check items through the desk top deposit scanner provided by the City's bank Wells Fargo. Cash deposits are made at least weekly by the Finance department or other authorized City employees int the night depository at the local Wells Fargo branch. Itise essential that deposits to the City's bank account consist of the same checks and/or money orders and currency as indicated in each deposit's receipts. No changes can be made to a deposit once it is prepared and awaiting deposit to the City's bank account. The amount of each cash deposit shall be the same as the total amount of the receipts issued during the The bank deposit slips must show the amount of the paper currency, coins, and each check and money order must be listed in the space provided. In some cases, scanned copies of checks and money orders have been approved. Prepare deposit slips in triplicate and  period covered by the deposit.  distribute the copies as follows: A. Original-Bank Copy  B. Duplicate-To serve as the official record of the deposit which is attached and filed with the corresponding receipts and post reports in the Finance department byt the employee C. Irplicate-Retained in the deposit book to assist in establishing accountability in the  ino charge of bank account records.  event a deposit is lost or needed in the bank reconciliation.  Page 29 of60    Cityoflone  IV. ENDORSEMENTICHECKS  All checks will be endorsed with the City's endorsement  at the stamp  Restricted endorsement ACH  time of receipt.  check  presentation stamps are printed on the reverse side of each  automatically by the desktop deposit scanner. The ACH presentation reads,  ELECTRONICALLYI PRESENTED-DATE:  V. BANK RECONCILIATION  The Finance department must keep track of bank account disbursement and receipt using Blackbaud's Financial Edge accounting software or other  activity by  bank accounts must be reconciled to the  bank monthly  acceptable software. The  bankreconciiation  statements. A copy of each month's  must be kept with the bank statement for audit purposes. All  statements, deposit slips, and cancelled checks are retained by the Finance department. bank  VI. PROCEDURE  The procedure for reconciling the bank accounts is as follows:  A. The City Treasurer along with the Finance department reconciles the bank statement monthly as part of the Treasurer's Report provided to City Council. All credit card transactions are verified and balanced by date and amount using the daily reports generated through Authorize.net, partnered with Wells Fargo. All EFT, and draft deposits are verified and balanced with the chronological post reports generated the City' S accounting software throughout the month. All issued drafts are balanced from date and amount as well as electronic debits. All payroll EFT are compared to the by payrol! reports from the City's payroll vendor, Paychex. A listing of outstanding checks is prepared indicating the check number, amount, and total of all checks outstanding. The reconciled balance must agree with the bank statement balance to maintain accuracy in deposits and withdrawals and must also agree with the General Ledger's cash in bank inthe City's accounting software system. This balance shall be calculated the cash in bank accounts from all funds as of the date of the reconciliation. by All totaling bank  accounts are reconciled every month.  VII. BANK CHARGES  The City's bank charges for returned checks, credit card service fees and wire transfers are charged directly to the City's bank accounts. The Finance department will make a entry at the end of each month for bank charges appearing on the City's bank statements. journal  VIII. BANK A ACCOUNT RECORDS  A. Cancelled checks can be accessed through the Wells Fargo on-line banking service for up to six months after they are presented for payment. All checks are retained the bank and copies can be requested as part of the fiscal audit or as needed. by Bank  Page 30of60    CityofIone  statements for all accounts and bank account reconciliations are retained fora a minimum B. Voided checks must be voided in the City's financial system and marked with the word "VOID" on the face of the check. In addition, the signature line and account numbers at the bottom of the check will be clipped of the check. The remainder of the voided check is then kept in a file for audit purposes. A separate folder must be maintained for all  of five years.  records pertaining to each bank account.  Page 31 of60    City ofIone  SECTION 5- WARRANTS POLICY STATEMENT  I.  In accordance with good governmental accounting and auditing practices, City warrants shall be voided and cancelled by the Finance department if not presented for payment within six  months from the date ofi issuance.  II. REPLACEMENT OF CANCELLED WARRANTS  Ifawarrant is returned to the Finance department after it has been mailed to the payee, the Finance department shall notify the department that requested the warrant. The department shall instruct the Finance department of the disposition of the returned warrant. All efforts will  be made to contact payee to re-send the warrant to the proper address.  II. STOP PAYMENTS  Ifaw warrant is not received by the payee, he must notify the department issuing the claim. The department in turn contacts the Finance department to see if such warrant has cleared the bank. Ifthe warrant has not cleared the bank, the department must submit a memo requesting  as stop payment on the warrant and initiate a new warrant.  IV. IMPREST CASH FUND (PETTY CASH)  An authorized Imprest Cash Fund shall be used by a department for payment of services or expenses on charges incurred in the conduct of official City business, subject to the following A. The Imprest Cash Fund shall not be used for payment of any single item of expenditure B. No disbursements shall be made for purchases of items available through the regular C. Regardless of the amount, no disbursement shall be made for employee travel D. All disbursements shall be covered by voucher supported by a receipt, approved by a responsible employee, and signed by the person receiving the cash. The vouchers shall be made out in permanent ink and the dollar amount clearly written out. Expenditures in excess of one dollar must have a receipt before reimbursement is E. The custodian of the fund must be able, at all times, to account for the fund in the form of cash or vouchers on hand or a combination of both. Upon demand of the Finance Manager or the City Manager, the custodian entrusted with the fund shall give an  limitations:  ine excess of $50.  purchasing process or on contract of blanket purchase orders. expenses unless expressly authorized by the Finance department.  made. The receipt shall be signed by an authorized employee.  Page32of60    CityofIone  accounting oft the fund. F. At any time, the Finance department may perform a surprise audit of a department's imprest cash fund to verify the fund is in balance. G. Any shortage in the fund shall be reported to the Finance Manager for the purposes of internal control. The Finance department shall review the circumstances concerning the shortage and make recommendations to the City Manager as to the final disposition of the case. Overages in the fund shall be deposited into miscellaneous revenue by issuing a receipt and depositing the amount as is done for other collections. H. The Imprest Cash Fund shall never be co-mingled with cash receipts of any other kind. The fund shall be replenished as often as required and prior to the end of each fiscal year. This will allow the recording of expenditures in the year in which they are incurred. The request of replenishment shall be made to the Finance Manager by preparing and submitting a claim form. The paid vouchers must be segregated by the type of expenditure, and the total of each expenditure code entered on the claim form, The paid vouchers must be attached to the claim. To avoid problems cashing the warrant at the bank, the claims payee should be stated as, "Petty Cash." J. The warrant should not be cashed by the department by substituting the warrant for K. The Finance Manager shall process the claim for replenishment and issue a warrant payable to the custodian. Upon receipt of the warrant, the custodian must cash the  I.  cash in the deposit to the City.  warrant and replenish the fund.  Page 33 of60    Cityoflone  SECTION 6- AUTHORIZED SIGNATURES POLICY STATEMENT  I.  The City Clerk shall provide the Finance Manager with a form that lists and contains specimen signatures of the employees whom she has deputized to sign specifically designated forms on their behalf. This list of signatures is passed via City Council meeting by way of ordinance in January of every year following the appointment of the mayor. The signatures are valid at all City used financial  institutions. II. AUTHORIZATION  A. Only authorized signatures approved by ordinance are allowed to sign the following:  1. Accounts Payable Claims/Checks  2. Requisitions 3. Contracts 4. Resolutions  B. No single employee should be given authority for all aspects of a transaction. For example, one employee should not prepare a claim, approve it as department head, and pick up the warrant. These duties should be segregated between at least two C. Claims prepared by one department employee must be approved by a different employee, preferably someone in a position of authority within the department. D. Temporary help employees cannot be authorized to pick up warrants. E. Exceptions to this policy must be approved by the Finance Manager.  employees.  Page 34 of60    CityofIone  SECTION7- CHART OF ACCOUNTS  I.  POLICY STATEMENT  All City Funds are accounted for and controlled by type of fund, budget unit or  department code, account type classification, and project code.  I. FUND ACCOUNTING  Governmental accounting systems are organized on a fund basis, funds being defined as a separate and distinct entity for tracking financial resources and uses for specific activities in accordance with government regulations and restrictions. The types of  funds used are as follows: A. Governmental Funds:  General Fund Special Revenue Funds Capital Project Funds Debt Service Funds Permanent Government Funds  B. Proprietary Funds:  Enterprise Funds Internal Service Funds  C. Fiduciary Funds:  Trust Funds Agency Funds  II. ACCOUNT CODE  A. The Chart of Accounts is developed to provide uniform accounting codes for classifying funds, and account codes. The Chart of Accounts is divided into four B. Funds - Lists the assigned code numbers for all Funds in the City. A Fund is a separate and distinct entity for accounting purposes. Fund numbers are four  sections as follows:  digits.  Page 35 of60    CityofIone  C. Department Code - Identifies a department or division within a department and is also known as an organization key. Department Codes are two digits. D. Account Codes Classifies all balance sheet, revenue, and expenditure codes into categories. Account Codes are also known as Object Codes and are four E. Project Codes - Identifies a specific project, program, grant, or other identifying  digits.  source needed to be tracked. Project codes are four digits.  IV. USE OF ACCOUNT NUMBERS  All documents sent to the Finance Manager for processing must contain a valid accounting code. The accounting code must contain 10 digits at a minimum, the fund digits), the Department Code (two digits), and the account code (4 digits). Ifa department is using a specific project, special program, or grant with a project number, the account number may also have 4 digits after the account code. specific The process to create a new Fund in Financial Edge is as follows: 1. In the General Ledger Module, click on Administration  (4  2. Click on Set up General Ledger 3. Click on Create Fund 4. Click on New Fund at top of page  5. Screen will pop up, enter new fund number and description  6. Click Save and Close  To create a new. Account Code in Financial Edge the same process above is followed except click on Create. Account Code with the following exception: 1. At the bottom of the screen in the Attribute tab drop down to Financial Group  2. Click on description that pertains to account  Page 36 of60    Cityoflone  SECTION 8-FISCAL RECORDS RENTENTION AND DISPOSITION  I.  POLICY STATEMENT  All City departments under the direction of the City Manager, except those which may be bound by special legal requirements, such as elected officials, shall retain their financial records in accordance with the City Clerks' Association of California Local Government  Records Retention Guidelines. Some basic guidelines are as follows: RETENTION SCHEDULE OF FINANCIAL DOCUMENTS  II.  Title  Retention Period AU+4 CU+2 T+4 AU+6 AU+4 P L AU+2  Accounts Payable, invoices, check copies, supporting docs  Utility Billing Journals Business License paid and reports Employee Timesheets RequistionsPurchase Orders Resoluntons.Ordinances Annual Financial Reports (Audits) Utility Billing Records Legend for Records Retention  AC-éActive AD=Adoption AU=Audit  CL-Closed/Completion CU=Current Year E=Election L=-Life P=Permanent  Page 37 of6 60    CityofIone  S-Supersede T=Termination  Note: As a general rule, records which are duplicates of an original on file with the Finance department should be retained for at least 2 years. If there are doubts regarding the retention  period, contact the Finance Manager before disposing of documents.  Page 38 of60    CityofIone  SECTION9-1 FISCAL FORMS PREPARATION OFFICIAL MANUAL CITY RECEIPT  I.  A. Form Title  Book-type official City receipts, pre-numbered, original and 2 copies.  II. PURPOSE  Toa acknowledge receipt and account for all monies received.  III. PREPARATION  All the necessary information shall be completed in the spaces provided for in thet forms:  A. Date the receipt is issued  B. Name of the person making the payment  C. Amount of the payment, both written out and ini figures. D. Nature of fee or payment, i.e. fines, fees, parking permit. E. Method of payment, i.e. cash, check or money order.  F. GL account code into which the payment will be deposited in the City's accounting  system  G. Signature of the employee authorized to accept payment.  In the event a receipt is spoiled in preparation and consequently must be voided, draw one straight horizontal line through the amount (do not obliterate it), and write "VOID" in large letters across the face of the original and all copies. The voided original receipt and the yellow copy must accompany the copies of valid receipts which are for monies included in the next One transaction per receipt. Réceipt must be issued at time monies are received.  deposit to the Finance department.  IV. DISTRIBUTION:  A. Original tot the person making the payment C. Copy (Pink) retained in the receipt book  B. Copy (Yellow) to the Finance department, attached to the deposit slip. D. When receipt book is full it is retained by the Finance department.  Page 39 of60    CityofIone  V. DEPOSIT SLIP BOOKS FOR CASH  A. Form Title: N/A  Deposit Slip Forms:  Standard Bank Deposit Slip Books provided by the City's bank.  1. PURPOSE:  The City of lone's Cash Policy and Procedures requires that all monies collected by a City in the conduct of their official duties be deposited with the Finance Manager unless permission has been obtained from the Finance Manager to deposit the funds in the City's bank account or a separate bank account. Each deposit must be authorized by the Finance Manager. The Deposit Slip Form serves as the authority to deposit money with the Finance department and/or the City's authorized banking institution and the Deposit Slip serves as the receipt for  money deposited. PREPARATION:  2.  a. Deposit Slips can be handwritten, providing all numbers are legible. b. Dollars must be written in the proper format on the Deposit Slip. C. Type of deposit must be included on the Deposit Slip Form. d. Amount must be listed and agree with the deposit total.  e. Total in the "Amount" column should agree with the dollar amount at the top of the Deposit Slip and must balance to the total receipts. Con/Curency/Checks must be listed on the Deposit Slip.  f. 3  DISTRIBUTION:  a. Original to the Finance department or City's banking institution, if being b. One copy to the Finance department, if directly deposited tot the bank.  deposited directly.  C. Second copy is the Depositor's Receipt.  Page 40of60    CityofIone  SECTION 10-CLAIMSACCOUNTS PAYABLEICASH DISBURSEMENTS  -  POLICY STATEMENT  Itis the policy of the City that the recording of assets or expenses and the related liability is performed by an employee independent of ordering and receiving. The amounts recorded are based on the vendor invoice for the related goods or services and are in accordance with good governmental accounting and auditing practices. This policy is in place to provide guidelines for the proper processing of accounts payable in a manner that will safeguard the assets of the  City. II. OBJECTIVE  The primary objective for accounts payable and cash disbursements is to ensure that:  Disbursements are properly authorized. All the required documentation is included. Invoices are processed in at timely manner.  Vender credit terms and operating cash are managed for maximum benefits.  III. PROCEDURE A.  Accounts payable should normally be processed twice a month, unless special B. All invoices are date stamped the day they are received, coded to the necessary expenditure account number, and approved by each department head. The account number indicates the fund, department code, appropriate account code, and project codei if applicable. C. Invoices are entered into the City's accounting software by the Account Tech lI or Finance Manager detailing the vendor name, address, invoice number, invoice date and brief D. All invoices and back up documentation such as packing slips and purchase orders are attached to a copy of each printed check in a packet and kept in the Finance department. E. A processing report is printed detailing the payable batch activity and filed in the F. The City Manager reviews all checks with backup documentation with the Finance Manager and signs accordingly. The City Manager, City Clerk, City Treasurer, Mayor, and Vice-Mayor are authorized signers. Two signatures must be on each check to make valid.  circumstance arise and is authorized byt the City Manager.  description of products or services rendered.  Finance department.  Page 41 of60    CityofIone  G. All checks willl be mailed the day they are signed unless after H. The check register report or "Warrant List" generated time month will be presented to the City Council for their  they will be mailed the next business  4:30pm where in that case of processing from prior  day.  at  scheduled meeting. IV. VOIDO CHECKS  review and approval at a regularly  There are times when a check would need to be "voided" out of the from the Finance Manager is obtained, the void check system. After clipping off the signatures block and the check is filed with the voided checks  system. Once approval  process is posted in the accounting account coding at the bottom of the check, and a copy is put in the monthly bank reconciliation  folder. V. VENDOR SET UP A. PURPOSE  To request establishment of a vendor number for vendors not numbers in the City's accounting software or to changeladd  already assigned vendor the name or address of an existing  vendor.  B. PREPARATION  1. Complete vendor name. 2. Complete remittance address.  3. Complete phone number and fax number, if applicable. 4. Al Form W-9 is requested from each vendor to establish 1099 status. 5. The social security number or federal tax ID number is entered into  system for 1099 reporting.  accounting  VI. EQUSTIONPURCHASE ORDER FORM-REQUEST FORM  A. PURPOSE  This form may be used for materials and supplies, airfare,  other type of purchase transaction. department purchases B. PREPARATION 1. Date of Order  professional services and any  Requstions/Purchase Order forms are used for  directly from vendors.  Page 42 of60    CityofIone  2. The department requesting the purchase order.  3. The vendor information: Vendor name, address, phone & fax number, and email  address. 4. Ship To.  5. The description, quantity, and unit price of the commodity to be purchased must be completed by the department prior to receiving approval from the City Manager and Finance Manager. The total item cost for each item must be computed and total of all items being ordered must be completed with correct sales tax, shipping, and total amount of the purchase listed at the bottom of the Purchase Order Request Form. The department authorized signature and date 6. The form is sent to the Finance department for processing. A purchase order is 7. After the department receives the items order, the proper documents, including invoice and shipping receipt, are given to the Finance department and attached to a copy of the Purchase Order, and filed. Copies of this packet are also paired  must appear on the form.  created and approved by signature of the City Manager.  with the invoice awaiting payment in accounts payable.  Note: Requistion/Purchase Orders should not cross fiscal years, unless the purchase is  related to a major capital project. VII. CITY CREDIT CARD USE A. PURPOSE  At times, small purchases and travel reservations can be made by authorized  employees on the City's credit card.  B. PROCEDURE  1. An authorized employee requests to use the credit card from the Finance 2. The credit card is kept in the City's safe and given to the employee. 3. After the purchase is made, the employee fills out the Credit Card Use Form and 4. The Form is submitted to the Finance department after it has been approved by  department.  attaches all receipts to the form. the employee's department head.  Page 43of60    CityofIone  5. The credit card is collected from the employee and returned to the City's safe.  VIII. TRAVEL CLAIM A. PURPOSE  The purpose of the travel claim is for employee reimbursement of approved travel, conference, or meeting reimbursements for related expenditures. All travel and meal expenses require prior approval and authorization per the Travel Expense The Travel Expense Claim form must be completed and fully signed by employee and  Reimbursement Policy for City Employees.  department head. B. PREPARATION  Once the travel is complete the employee or elected official traveling on behalf of the City must complete the Travel Expense Claim form, which must be signed by the employee or elected official and submitted to the City Manager for approval. In signing the Travel Expense Claim form for reimbursement, the employee and the department Any travel expenses that an employee needs to have prepaid, must be submitted with proper supporting documentation on a standard claim form. These prepaid expenses must be deducted from the total expenses incurred to calculate the net amount to be The completed Travel Expense Claim form and all backup must be sent to the Finance department. Claims for travel shall be submitted timely. Reimbursement and Note: At the April 21, 2015 City Council Meeting, the following daily stipends were approved that may be paid in advance to an employee while traveling or attending meetings or conferences which must be approved by Department Head prior to  head agrees that all expenses are valid City expenditures.  reimbursed.  substantiation of expenses shall be within 30 days of travel.  payment.  Breakfast-$10 Lunch- -$15 Dinner-$25  Page 44 of60    Cityoflone  SECTION 11- BUDGET AMENDMENT RESOLUTION  I.  PURPOSE  The budget amendment resolution is used to adjust or change the final adopted budget.  The Budget Amendment Resolution is used to:  increase/decrease estimated revenue and appropriations in a budget unit.  Establish new funds. Transfer from fund balances. Transfer from other funds.  II.  PREPARATION  Resolutions to increase/decrease estimated revenue and appropnations shall identify the specific accounts to be adjusted by the full 10-digit account string for each account as well as the account names. All budget adjustments that increase/decrease total appropriations must identify an equal amount of offsetting increase/decrease in either total estimated revenues or Departments wishing a budget amendment will submit the draft budget amendment resolution to the Finance Department. The Finance Manager will review the draft resolution to ensure  fund balance available.  that:  The resolution properly reflects the numbers and names of the specific accounts to be adjusted and that the accounts designated appear appropriate given the justification for  the budget amendment.  Any impact on the estimated revenues appears reasonable and realistic.  Ifa approved, the Finance Manager will sign the Budget Amendment Resolution and forward it to the City Manager for review. The City Manager will determine whether the amendment is appropriate and consistent with the City's priorities and, sign the resolution if approved, and submit with the Agenda through the City Clerk who provides the agenda to City Council and Upon approval by City Council, the resolutions will be signed and will be distributed to the originating department and the Finance department. The City Clerk will keep the original  the general public.  resolution on file for the permanent record.  Page 45 of60    CityofIone  SECTION 12-PAYROLL PROCESSING  I.  PURPOSE  The purpose of this document is to define the guidelines, policies and procedures governing the responsibilities of payroll personnel staff. These guidelines àre to ensure accuracy and consistency of City-wide payroll procedures among payroll personnel staff to strengthen internal controls, facilitate more timely access to payroll information; and enable department  personnel staff to address employees' payroll concerns more efficiently.  II. PREPARATION  Timesheets are due from each City department to Finance on Monday following the end of each bi-weekly the pay period. Each timesheet must be signed by the employee and the department head approving the hours worked. All timesheets are reviewed by the Finance department Accounting Technician who re-calculates all hours and checks for any other errors. Any questions are directed to either the employee or department head, and any changes to  timesheets are to be initialed by employee or department head.  II. PROCEDURE  After all the timesheets have been reviewed, payroll is ready to be entered into the Paychex software, the City's payroll processing vendor who also processes quarterly payroll tax reports A. The Finance department Accounting Technician prints an employee history of accruals report showing the balances for each individual employee as of the last pay period. Any accruals used or earned are notated in the margin of the report and retained with the timesheets and supporting documentation. This report is also used to verify that all B. Any changes to an employee's payroll record are made such as elected re-occurring C. Each employee's hours are entered from the timesheets for the new pay period. All employees on a salary have been pre-set into the payroll system and will automatically D. A register prior to processing report is printed and given to the Finance Manager with the timesheets to verify that all hours are entered correctly, and to review any changes E. Once the Finance Manager has reviewed payroll and changes made, if any, payroll is transmitted online to Paychex by the Account Tech II where a successful transmittal receipt is printed from the system and kept with the timesheets and supporting  and employee W-2 forms at the end of the year.  accrual adjustments from the prior period are accurately posted. earning and deduction changes and/or pay rates.  pay.  made to pay rates, or any other modifications.  Page 46of60    CityofIone  documentation. Payroll timesheets are also reviewed by the City Manager after payroll F. Fire Department officer pay and elected official stipends are included in the last pay period of each month. Planning Commissioner Stipends are issued quarterly. G. Payroll is delivered by courier to City Hall within 24 hours after submitted to Paychex. After the payroll packet is reviewed by the Finance Manager, paychecks and direct H. The final payroll register, included in the packet of payroll checks, is reviewed by the Finance Manager and payroll amounts are recorded. All payroll reports are filed in  has been submitted.  deposit payment stubs are distributed the morning of payday.  binders by pay period.  Page 47 of60    CityofIone  SECTION 13-CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM REPORTING  I.  PURPOSE  All full-time City employees are enrolled in the California Public System (CalPERS) where employees are assigned a retirement  Retirement plans are based  Employee's These plan.  on CalPERS regulations, plan and benefit and employee's date of www.alpers.ca.gov.  options adopted by resolution of the City Counci,  employment with the City. All  retirement benefits must be reported to the State employee via the compensation subject to  CalPERS website at  II. EMPLOYER CONTRIBUTION RATES  Annual CAlPERS actuarial valuation reports can be downloaded from the CalPERS during the month of October. These reports contain the City's the next fiscal year beginning July 1 and a projected rate for the Employer next fiscal  Contribution website Rates for year. Following are  the City's current plans: A. Miscellaneous: FirstL Level Second Level PEPRA-New B. Safety-F Fire: First Level PEPRA-New C. Safety - Police First Level Second Level PEPRA-New  2.5% at 55 Member Rate 2.0%at60 Member Rate 2% at62 Member Rate 2%at55 Member Rate 2.7%at57 Member Rate 3% at50 Member Rate 3% at55 Member Rate 2% at57 Member Rate  8.0% 7.0% 6.25% 7.0% 9.5% 9.0% 9.0% 11.5%  II. PREPARATION  A. A: spreadsheet is prepared after each pay period listing compensation for The spreadsheet has a section for all full-time employee  all employees.  section for all other employees including retired annuitants. compensation, and a separate  for full-time employees is as follows:  Reportable compensation  Page 480 of60    CityofIone  Regular earned wages for 80 hours or 84 hours Police  Longevity pay  Education/Post incentive pay Uniform allowance K-9 Officer pay Holiday pay Special assignment pay  The total of listed amounts on the spreadsheet should agree with the same totals for the B. After each pay period, the payroll for all full-time employees is entered into the CalPERS reporting module at www.capers.ca.gov and into the section marked "My CalPers/Reporting. Detailed instructions for entering payroll into the reporting section  above categories on the final payroll register for the pay period.  are located in the "My CalPERS" binder.  C. Retired Annuitants  Hours worked per pay period and amount earned must also be reported for retired annuitants. These amounts can be included in the same report for full-time employees  for the same pay period.  D. CalPERS Supplemental Income 457 Plan  All full-time employees are eligible toj join the CalPERS Supplemental Income 457 Plan. This Plan is a voluntary savings program that allows the employee to defer any amount, subject to annual limits, from their paycheck on a pre-tax basis. The employee's contributions and earnings, if any, are not taxable until the employee withdraws the contributions usually in retirement. The employee can elect to withdraw aset amount or percentage of earned income which is deducted from their bi-weekly paycheck. A separate check for all employee contributions is made out to CalPERS 457 Plan and is included in the packet received from Paychex (the City's payroll processing vendor) The contributions by employee are reported in the My CalPERS/Reporting section under CalPERS 457. Once employee contributions are entered by pay period, a report is generated that must be mailed along with the check to CalPERS. Detailed instructions for CalPERS 457 reporting are located in the "My CalPERS" binder.  along with the employee's paychecks.  Page 490 of60    CityofIone  SECTION 14-F FINANCIAL SYSTEM  The City uses a comprehensive financial system (currently The Financial Edge) to maintain books of account. Maintaining the security of this system is important to ensuring the accuracy of the its  accounting and financial statements.  City's  ACCESS  Access to the financial system will be limited to the Finance Department staff, the the City Manager. Access by otheri individuals will be approved in  City Treasurer, and  the Finance Manager, based  writing on a case-by-case basis by  on the need to access the information. The Finance  ensure that access to post or edit information in the financial system is limited to those with Manager a need will  do sO, and will also ensure that access is terminated when an individual's  with to the City approved  terminates.  relationship  To the greatest extent possible, journal entries should be initiated by other individuals and  for posting by the Finance Manager.  Page 50of60    City ofIone  SECTION 15-DEVELOPER. ACTIVITY PEVELOPER DEPOSITS  Developers make upfront deposits with the City for various purposes in connection with their development activity. Any portion of these deposits that does not represent current revenue to the City and will be used later should be recorded as a separate liability account for that developer in the financial system. As expenses are paid by the City that are chargeable to the developer accounts, the Finance staff will verify that sufficient deposit remains in the developer's account to pay those invoices. If the balance is low, the City Manager should be notified of the deficiency immediately. The City Manager may direct city staff and contractors to cease all work for that developer until the deficiency has been resolved. On a periodic basis, independent of the accounts payable process, the Finance Manager or designee will review the balances of developer deposit accounts and notify the City Manager of any deficiencies. After review, negative balances will be immediately converted to receivables and treated according to the process described in the Accounts Receivable section of this  policy.  DEVELOPERI AGREEMENTS  The Finance Manager will maintain summaries of the provisions of developer agreements currently in effect that impact the City's finances and accounting. The Finance Manager will review these summaries on a periodic basis to ensure that revenue is recognized and invoices are generated when  appropriate according to the provisions of the agreements.  Page! 51 of60    CityofIone  SECTION 16. - YEAR END CLOSING AND FINANCIAL For a period of two months following the end of the fiscal such items identified will be made and placed in the be made to add the items to the accrual list. identified in the preceding two months. The Manager will also continue to monitor cash  REPORTING  both incoming payments that are not  year on June 30, Finance Staff will review Finance Manager's accrual file and an entry will After August 31, the Finance staff will post a  determine whether entry to the financial are expected to be either  posted to accounts receivable and all cash disbursements  the transactions related to events that occurred system record the accounts payable  to journal  prior to June 30. Copies of any  to  and receivable at June 30 for all items Manager to identify any additional amounts that preceding fiscal year. The Finance  report after posting this entry and confer with Finance Manager will then review the budget to actual prior to finalizing the trial balance for audit receipts and payments until approximately two weeks  the City  paid or received that are related to the  and post any adjustments as necessary.  The Finance Manager or designee will then review the City's various  determine that the appropriate, most up-to-date applicable accounts occur from time to time that following represents a partial list of suggested displayed- in the previous year's audit. balances held with the fiscal agent.  balance sheet accounts to Although changes in  balances are reflected.  impact what procedures will be required, the  procedures:  Ensure that the beginning fund balance for each fund matches the Ensure the cash balances have been reconciled to the bank  audited ending balances statements, including the cash  Prepare an analysis calculating the new liability for other post-employment benefits.  Prepare an analysis updating the pension liability. Review cash receipts and disbursements after  related to the prior fiscal  year end, as noted above, to ensure amounts  year are properly adjusted.  Review developer deposit accounts, as noted elsewhere in this policy. Reconcile liabilities owed between funds to ensure that the amounts  receivable. Post interest if required.  owed equal the amounts  Ensure that any interfund reimbursements are posted.  Ensure that interfund transfer and reimbursement accounts balance to Review each of the city's loan and other long-term liability balances to enterprise funds (such as the sewer) and in a principal  zero among all funds. ensure that they have been  reduced by the proper amount of current  been  year. principal payments and that interest  properly calculated. Principal payments should be posted against the expense has  loan balance in  expenditure account in governmental  Page 52 of60    CityofIone  funds. A government-wide adjustment should be prepared and given to the auditor to reflect the Review the compensated absences (vacation and comp time) balances and post an adjustment to ensure the liability is correctly recorded in the enterprise furids for these. Prepare government- wide adjusting entries to furnish to the auditor for the portion of the liability that relates to Reconcile total payroll expenses to the amounts shown on the City's 941 payroll tax forms or Review payroll liability balances to ensure that they properly reflect the amounts owed by the City Compare balances to budget and prior year figures to identify any odd or unusual differences. For cost reimbursement grants, compare the expenditures on the grant during the fiscal year to the revenues received and post a receivable for any outstanding balance, where appropriate. Ensure that deferred revenue has been recorded in governmental funds for receivables that will Ensure that any capital assets (items or projects with a useful life extending beyond one year and an initial cost exceeding $5,000 per asset or project) are reflected in capital outlay accounts in governmental funds or are added to the appropriate capital asset account in enterprise funds. Add any new assets acquired during the year to the depreciation schedule, reconcile to the previous year financial statements and the current year capital asset balances in the enterprise Update schedules on CDBG loans receivable to show interest earned on the loans for the current year and account for any repayments. Prepare and post aj journal entry to record any activity not yet  correct principal balance for governmental fund long-term liabilities.  governmental funds.  PayChex payroll registers and to the amounts reported to CalPERS.  at June 30.  not be received by the City within 60 days of June 30.  fund, and compute current year depreciation.  recognized and agree the balances to the loans receivable schedules.  Page 53 of60    CityofIone  SECTION 17-0 CAPITAL ASSETS  DEFINITION  The City defines capital assets as those assets with a useful life exceeding one year and a cost (or fair market value at the time of receipt if received from an outside party) in excess of $5,000. Except for significant collections of like items, the $5,000 limit applies per individual asset, but expenditures for various items that all become fixed portions or components of a single item and cannot be easily separated are treated as a single item, such as expenditures for engineering work and materials that Capital assets include those assets with physical substance as well as those lacking physical substance that are nonfinancial in nature and used in operations, such as computer software and water rights. Financial instruments, investments, and derivatives, are considered financial in nature  become part of a single building.  and are NOT considered capital assets.  ACCOUNTING  In governmental funds, purchases of capital assets are recorded in capital outlay expenditure accounts only. In enterprise funds (sewer), purchases of capital assets are recorded as expenses during the year and then a journal entry is prepared at year-end to reduce expenses by the cost of The Finance Manager maintains a detailed capital asset listing in excel. During the audit process, the Finance Manager reconciles the total asset value on this schedule to the enterprise fund capital asset accounts and computes depreciation for the year. The Finance Manager will then approve a journal entry to post depreciation expense to the enterprise funds and provide a government-wide adjusting  any capital assets and add to the capital asset values in the general ledger.  entry to the independent auditor for posting in the City's financial statements.  Page 54 of60    CityofIone  SECTION 18-C OTHER POST-EMPLOYMENT BENEFITS  The City adopted a GASB 45 - Other Post Employment Benefits (OPEB) at the regularly scheduled  City Council meeting on. June 12, 2014. The policy reads. as follows:  Policy Statement:  Itshall be the policy of the City of lone to establish a pay-as-you-go approach toward the contribution requirement of post-employment health insurance plan members approved by the City Council, which may be amended from time to time. The City's funding policy is to contribute an amount sufficient to pay the current year's retiree premium and plan expenses. For fiscal year 2012-13, the City contributed $27,941 to the plan, all of which were premium payments for retiree insurance made directly to [Health Planj. Plan members receiving benefits contributed $9,197, or approximately 25-  percent of the total premiums.  Page 550 of60    CityofIone  SECTION 19-1 FUND BALANCE POLICY  The Governmental Accounting Standards Board (GASB )Statement 54 requires that all governmental agencies adopt a fund balance policy to enhance the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied and by clarifying the existing governmental fund type definitions. The City Council adopted the following Fund Balance  Policy at the June 12, 2015 Council Meeting.  Fund Balance Policy - GASB 54  .P PURPOSE:  The purpose of this policy is to establish procedures for reporting both restricted and unrestricted fund balance in the financial statements. The Governmental Accounting Standards Board (GASB) Statement No. 54 "Fund Balance Reporting and Governmental Fund Type Definitions" requires fund balance to be reported using five major classifications based on the extent to which the City is bound by the constraint on resources reported in the funds. The policy also authorizes and directs the Finance Director/Manager to prepare financial reports showing fund balance classifications as  required by GASB Statement No. 54. I. CLASSIFICATIONS: GASB 54:  Fund balance must be classified into one or more of the five following categories in conformance with  a. Nonspendable fund balance b. Restricted fund balance Committed fund balance d. Assigned fund balance e. Unassigned fund balance III. DEFINITIONS AND REPORTING:  Fund Balance - All financial assets less liabilities normally expected to be liquidated with current financial resources. The following are new categories and related definitions to be used for a. Nonspendable Fund Balance - Includes amounts that cannot be spent because they are not in an expendable form, or legally or contractually required to be maintained intact. This would b. Restricted Fund Balance - Amounts are constrained to specific purposes by the providers such as creditors, grantors, contributors, or laws and regulations of other governments. This  describing the components of fund balance:  include prepaid expense, inventories, or capital assets.  Page 56 of60    CityofIone  would generally include amounts in bonded capital projects funds, debt service funds, and Committed Fund Balance = Amounts constrained by limitations imposed at the highest level of decision making, such as the City Council, that require the same formal action at the same level to remove or modify. Resources in this category may include those that are committed for a specific purpose andlor future initiatives, funding designated for legally enforceable contracts but not yet spent, or resources committed as a local match for programs or projects. d. Assigned Fund Balance = Amounts that are intended by the City to be used for specific purposes, but are neither restricted nor limited. The City Council can delegate this authority to 1. Resources in this category may include appropriation of a portion of existing fund balance sufficient to eliminate a projected deficit in the subsequent year's budget. 2. Resources assigned to a specific program or project for which the City has an approved 3. Resources approved by the Council for a long range financial plan. e. Unassigned Fund Balance = Includes any remaining amounts after applying the above definitions. Planned spending in the subsequent year's budget would be included here and can no longer be described as "designated" unless formally committed or assigned. For the General Fund, these are amounts not classified as nonspendable, restricted, committed or assigned. No funds should report a negative amount for restricted, committed or  program funds funded with federal program dollars.  the City Manager or Finance Director/Manager depending on the situation.  plan or budget.  assigned fund balance. IV. FUND BALANCE SPENDING ORDER restricted in the following order: 1. Nonspendable 2. Restricted 3. Committed 4. Assigned 5. Unassigned  Unless legal requirements disallow it, the City will spend the most restricted dollars before less  This policy is in place to comply with GASB Statement No. 54. No other policy or procedure  supersedes the authority and provisions of this policy.  Page 570 of60    Cityoflone  GLOSSARY  City Council: The current elected officials of the City as set forth in the City's Municipal Code. entered into in accordance with the specifications of which sets forth the depository negotiated and Budget: The document containing separate budgets for General Fund, the Special Revenue Enterprise Funds and Capital Improvement Plan of financial operations embodying an estimate Funds, proposed expenses fori the fiscal year and the proposed means of financing them. CAFR: An annual financial report that includes financial statistics and related notes conformity with GAAP. Supplemental statistical and narrative information Capital Improvement Plan (CIP)E Budget: A plan recommended byt the  Bank Depository Agreement A contract between a municipality and a  parties regarding banking services.  agreements between the  of  prepared in  included.  regarding activities is also City Manager, and approved  by the City Council, for design and construction of  in the City.  major new facilities and improvements of facilities  Capital/Major Project Expense: An expense which results in the acquisition or addition Chart of Accounts: A chart detailing the system of general ledger accounts. Current Operating Expense: An obligation of the City as a result of an incurred Current Revenue: The revenues or resources of the City other than bond Debt Service Coverage: The margin of safety for payment of debt service,  asset or the improvement to an existing fixed asset.  of a fixed  for payment within a 12-month period. cash within a 12-month period. times (e.g., 125 percent annual debt service. unplanned use of City funds. Equity: See fund balance.  expense that is due proceeds convertible to reflecting the number of operating expenses exceed  coverage) by which annual revenues net of  Emergency: An unexpected occurrence, i.e., damaging weather conditions, that  requires the  Expense: Decreases in net financial resources for the purpose of acquiring goods or services. Finance Director/Manager The person appointed by the City Manager who is recording and reporting the financial activities of the City and for making recommendations responsible for  fiscal policies and procedures.  regarding  Page 58 of60    CityofIone  Fiscal Year: A 12-month budget period, generally extending from July 1 through the following June Fixed Assets: Assets of a long-term nature which are intended to be held or used, such as land, easements, building, improvements other than buildings, machinery, equipment and other items of Fund: An independent fiscal and accounting entity with a self-balancing set of accounts recording cash and/or other resources together with all related liabilities, obligations, reserves, and equities which are segregated for the purpose of carrying on specific activities or attaining certain objectives. Fund Balance (Equity): The excess of fund assets over liabilities. Accumulated balances are the result of an excess of revenues over expenses during some period. A negative fund balance is a  30.  personal property.  deficit balance.  GAAP: See Generally Accepted. Accounting Principles. GASB: See Governmental Accounting Standards Board.  General Ledger: The collection of accounts reflecting the financial position and results of operations Generally Accepted Accounting Principles (GAAP): Uniform minimum standards of and guidelines to financial accounting and reporting as set forth by the Government Accounting Standards  for the City.  City Board (GASB).  GFOA: Government Finance Officers Association of the United States and Canada.  Governmental Accounting Standards Board (GASB): The authoritative accounting and financial  reporting standard-setting body for government agencies.  Investments: Securities held for the production of income in the form of interest. Long-Term Debt: Obligation of the City with a remaining maturity term of more than 1 year. Management Letter: A written report from the independent auditors to the City Council reflecting Net Remaining Revenue: For any fiscal year, the total of revenues and transfers less (a) operation and maintenance expenses, including any lease payments; (b) debt service; (c) required deposits to maintain the operation and maintenance reserve and the emergency reserve. Non-Recurring Revenues: Resources recognized by the City that are unique and occur only one Office: Department Head level reporting to City Manager or City Council; for example, the Finance  observations and suggestions as a result of the audit process.  and (d)  time or without pattern.  Office.  Page 59 of60    CityofIone  Official Budget: The budget as recommended by the City Manager and adopted by the City Council.  City Manager: The individual appointed by the City Council who is of City Council policies and day-to-day activities oft the Reserves: An account used to designate a portion of the fund balance Revenue: An increase in assets due to the performance of a service or Risk: The liability, either realized or potential, related to the City's enough to cover possible losses in excess oft those estimated.  responsible for the implementation (equity) as legalysegregated the sale of goods. Revenues  City.  for a specific future use.  are recognized when earned, measurable, and  reasonably assured to be received within 60 days.  daily operations.  Self-nsurance: Appropriating sufficient funds in advance to meet estimated Short-Term Debt: Obligation of the City with a maturity term of less than 1 year.  losses, including  Page 60 of 60