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5 <br />expenditures will not exceed current revenues. Exceptions to this practice would be; <br />emergency situations, the use of prior year’s surpluses to minimize the current year levy <br />increase, or limiting the reliance on a state aid because its continuance in future years is <br />questionable. The operating budgets will provide for adequate maintenance of the capital <br />plant and equipment, and for their orderly replacement. <br />• The annual budget for the City’s enterprise operations will be self-supporting, providing <br />for the reasonable replacement of property, plant, and equipment, in addition to operating <br />expenses. Utility fees and other rates for service will be reviewed and adjusted annually to <br />ensure adequate funding for operating and capital expenses. <br />• Before adding a new program or service, the City will perform a cost benefit analysis of <br />proposed program or services. <br />• A summary of the City’s tax rates and Levy information based on the City’s Annual <br />Budget will be published in the City newsletter upon Council establishment of a <br />preliminary levy. <br /> <br />Financial Control <br /> <br />Purpose: Consistent application of accounting practices that conform to generally accepted <br />accounting principles and governmental accounting standards ensures public confidence in the <br />integrity of the City’s financial condition and provides meaningful information about the City’s <br />operations. <br />Policy: The City will use an accrual-based accounting system to maintain records consistent with <br />generally accepted accounting standards and principles for local government accounting as set <br />forth in the Government Accounting Standards Board (GASB) and in conformance with the State <br />Auditor’s requirements consistent with applicable state statutes and regulations. The following <br />considerations and procedures will be used to comply with this policy: <br />• The City will establish and maintain the highest standard of accounting practices, in <br /> conformity with Generally Accepted Accounting Principles (GAAP) <br />• The City will arrange for an annual audit of all funds and account groups by <br /> Independent certified public accountants. <br />• Staff is to bring these Financial Policies to the City Council periodically. <br />• Quarterly reports will present a summary of General Fund financial activity by <br />department as compared to Budget. Department Heads will review quarterly reports <br />comparing actual revenues and expenditures to the budgeted amounts. Any negative <br />variance in any revenue or spending category for their department as a whole <br />projected to exceed $10,000 by year-end will be reported in writing to the Finance <br />Director, City Administrator, and Council. Department heads can request <br />department financial activity at any time during the current quarter and it will be <br />provided. <br />• The City will comply with statements promulgated by GASB. <br />• Employee Wages and Benefits. <br />1. Employee adjustments shall be made annually based on reviews of the wage <br />surveys performed by the League of Minnesota Cities for the appropriate job <br />category and consideration for the rate of inflation.