Res 2017-074/approving a Budget Policy Statement for preparation of the 2017-2018 fiscal year budget

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THE CITY OF SAN MARCOS ilii4 *. City of San Marcos 2018 Proposed Budget Policy Statement 0 I. Fund Balance Goals • General Fund: Minimum of 25% (of recurring operating expenses) • Water/Wastewater Fund: Minimum of 25% (of recurring operating expenses) • Electric Utility Fund: Minimum of the equivalent of 60 days of operating expenses including purchased power • Drainage Utility Fund: Minimum of 25% (of recurring operating expenses) II. Capital Improvements Program • In-depth review of Capital Improvements Projects underway. Will evaluate funding needs on existing projects, staff capacity to complete current and future projects. Initial Recommendations will be presented to Council • Total general fund project cost, not including any voter approved bond projects, will be limited to approximately $10 million annually • Issue only up to an appropriate amount of debt in the general fund to maintain at least a 50/50 debt to operations ratio • Utility CIP capacity calculated through the rate model Ill. Revenue Goals GENERAL FUND • Property tax rate increase will be limited to voter approved amounts • Property Values increase based on a conservative trend estimated at 8% • Maintain utility fund franchise fee transfers to the General Fund at 7% • Sales tax will be projected based on current trends with a maximum 3% increase to recurring revenues over prior year • Adjust Community Services fees based on the results of the cost of service study • All other revenues will be adjusted based on historical trends • Fees for services will be adjusted 1% based on the average CPI index for the calendar year 2016 WATER FUND • Rate study to determine possible rate increases and structure changes • Recommendations related to rate structure and future rate increases will be made by Citizens Utility Advisory Board • Preliminary rate study results available in June ELECTRIC FUND Budget Policy Page 1 April 18,2017