HomeMy WebLinkAbout98-75 RESOLUTIONRESOLUTION NO. 90"r%S
A RESOLUTION DECLARING AN INTENT TO ASSIST IN THE ESTAB-
LISHMENT OF AN ASSOCIATION OF CITIES WHO WILL DECLARE THEIR
INTENT TO ESTABLISH RULES OF FISCAL RESPONSIBILITY IN THE
MANAGEMENT OF THEIR RESPECTIVE CITIES AND TO PARTICIPATE IN
THE NATIONAL ALLIANCE OF FINANCIALLY RESPONSIBLE LOCAL
GOVERNMENTS.
BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY
OF FAYETTEVILLE, ARKANSAS:
WHEREAS, there has been a great deal of public discussion
relative to the possible bankruptcy of several cities within
the United States and requests have been made to the federal
government for guarantees of municipal debt; and
WHEREAS, it has been suggested that all cities may feel the
repercussions of the bankruptcy of fiscally unsound cities in
the sale of their bonds and will pay higher interest rates as a
result of the financial activities surrounding these cities; and
WHEREAS, the City of Fayetteville has attempted to financially
manage its affairs in a responsible manner and comply with all the
statutes and regulations relating to the management of its funds
and does not wish to have its credit damaged by a few cities who
have not adhered to some of the basic rules of good fiscal
management; and
WHEREAS, if the City of Fayetteville intends to continue to
operate and provide services to its citizens as planned and not
at an inflated cost it must take steps to establish an association
of cities which are adhering to certain rules which operate as a
basis to provide good fiscal management and deter from creating
financial difficulties.
NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF
THE CITY OF FAYETTEVILLE, ARKANSAS:
Section 1. It is hereby declared a necessity to assist in
the establishment of a National Alliance of Financially Responsible
Local Governments who will each be asked to adopt rules relative to
the fiscal managements of their communities which will insure to
investors that each of these units of government will not allow
defaults to occur on its debt as a result of fiscal mismanagement.
Section 2. The City of Fayetteville hereby adopts the
following rules:
1. The City will establish and maintain a high degree of
accounting which will substantially conform to the
principles and standards of public financial reporting
as established by the Municipal Finance Officers Asso-
ciation and the National Committee on Governmental
Accounting; and each city will provide for an annual audit.
2. Each city will assure that current expenditures do not
exceed current revenues for any fiscal year.
3. All retirement systems will be financed in a manner to sys-
tematically fund liabilities. The City will assure that
sufficient funds are provided to pay current service
plus interest on unfunded liabilities plus amortizing the
unfunded liabilities over an established period.
4. There wi•11 be strict limitations on capitalization of
operating and maintenance expense; and no projects will be
financed for a period longer than the life expectancy of
the project.
5. The total general obligation debt of the municipality will
not exceed 8% of the true market valuation of the tangible
valuation of the property within the city. The total
general obligation debt of the municipality and the over-
lapping general obligation debt of all other units of local
government will not exceed 10% of the true market valuation
of the tangible valuation of the property within the city.
6. Efforts will be made to limit the average general obliga-
tion bond maturities to not exceed ten years; and under no
circumstances will general obligation bonds be issued to
exceed thirty years (excepting general obligation bonds
paid from revenues derived from the facility).
7. The City will not have defaulted for twenty-five years in
the payment of principal or interest on general obligation
bonds, special assessment bonds, and revenue bonds which
may become a legal obligation of the city under any circum-
stances.
8. Any debt involving the full faith and credit of the city
will not exceed three times the total annual expenditures
in those funds which are supported by general taxes; and
this excludes all utility and revenue -supporting functions
of the city.
9. All utilities operated by the city (excluding transportation
utilities) will have as.a minimum a rate that supports the
total cost of the utility.
10. All utilities will periodically and at least each five years
review the projected operating expenditures and revenues
for a period equal to the term of the outstanding debt.
11. Financial systems will be implemented to monitor performance,
expenditures and revenues of all municipal programs on an
ongoing basis.
s
12. Operating expenditures will be projected to implement capital
improvements; and future revenues for these expenditures will
be indentified prior to initiation of the capital improvement.
13. General revenues and expenditures will be projected annually
for at least two years beyond the current budget projections.
14. Tax anticipation debt will be retired annually, and bond
anticipation debt will be retired within six months following
completion of the construction of the project.
15. Full disclosure will be provided in annual financial state-
ments and bond registrations.
Section 3. That the City of Fayetteville will participate in the
organization of the National Alliance of Financially Responsible Local
Governments, will make the necessary certifications to this new organiza-
tion for membership; and hereby directs the City Controller to represent
our city to the National Alliance of Financially Responsible Local Governments.
Section 4.
and after its pa
PASSED AND
This Resolution shall take effect and be in force from
ssage.
APPROVED THIS /�pt%7 DAY OF riapt) , 1975:
ATTEST:
0 ,i)`(IL,,E _, 1 //�� �4.eLat
CITY CLERK
APPROVED:
)27a ) OG, (
MAYOR