2009-10 Adopted Budget - City of Hoquiam

the highest level of service. During periods of economic upturn, long-termexpansion of core services will be limited to the anticipated increase of thosesources.e. The City will attempt to forecast its General Fund expenditures for each of thenext six years and will endeavor to update this forecast every year. Expenditureforecasts should be cognizant of the fixed and variable nature in its structure ofrevenues.5. Capital Investment Budget Policiesa. The City will attempt to make all capital improvements in accordance with anadopted capital investment program.b. The capital investment program and the base operating budget should bereviewed at the same time. This will insure that the City’s capital and operatingneeds are balanced with each other.c. The City will attempt to develop a multi-year plan for capital improvementsincluding operations and maintenance costs and update it every two years.Future capital expenditures necessitated by changes in population, changes inreal estate development, or changes in the economic base should be calculatedand included in capital budget projections.d. The City will identify the estimated costs and potential funding sources for eachcapital project proposal before it is submitted to Council for approval. The Citywill use intergovernmental assistance (grants) and other outside resourceswhenever possible.e. The City will determine the least costly financing method for all new projects.6. Short-Term Debt Policiesa. Short-term debt covers a period of three years or less.b. The City may use short-term debt to cover temporary cash flow shortages whichmay be caused by a delay in receipting tax revenues or issuing long-term debt.c. The City may issue interfund loans rather than outside debt instruments to meetshort-term cash flow needs. Interfund loans will be permitted only if an analysisof the affected fund indicates excess funds are available and the use of thesefunds will not impact the fund’s current operations. All short-term borrowing willbe subject to Council approval by ordinance or resolution, and will bear interestbased upon prevailing rates.7. Long-Term Debt Policiesa. The City will confine long-term borrowing to capital improvements that cannot befinanced from current revenues.b. Acceptable uses of bond proceeds can be viewed as items which could becapitalized and depreciated. Refunding bond issues designed to restructurecurrently outstanding debt is also an acceptable use of bond proceeds.19