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(Draft January 2002) Key Financial Strategies <br /> For Elk River <br /> <br />POLICIES <br /> <br />Financial management pohcies are essential elements of a strong financial future. <br />The pohcies serve as an on-going guide for decision-making. The policies <br />describe actions to be taken and the rationale for the actions. The creation of <br />pohcies requires city officials to consider imphcations of their actions. Pohcies <br />promote continuity and stability. They minimize the affects of changes in <br />Council and management staff. <br /> <br />The following section describes the financial management policies of the City of <br />Elk River. These policies expand on existing City policies with new criteria <br />developed in the financial management planmng process. All financial <br />management policies should be reviewed periodically to maintain relevance and <br />effectiveness. <br /> <br />1.1 <br /> <br />1.2 <br /> <br />1.3 <br /> <br />1.4 <br /> <br />1.5 <br /> <br />1.6 <br /> <br />The flow of revenues is subject to fluctuation from growth, legislative <br />change and other factors. The City seeks to promote financial stability <br />through diversification of revenues, good financial planning and <br />maintenance of adequate reserves. <br /> <br />All non-tax revenues should be reviewed at least every three years. The <br />purpose of the review is to determine if adjustments are needed to <br />produce additional revenues, more equitably allocate costs, and/or <br />achieve other objectives determined by the City Council. All revenue <br />forecasts shall be conservative. <br /> <br />Due to the lack of local control and the uncertainty of future <br />commitments, limited reliance should be placed on revenues from <br />intergovernmental sources. All new intergovernmental revenues should <br />be carefully studied to determine stability and stipulations (if any) <br />regarding use. <br /> <br />To the extent feasible, one-time revenues will be applied toward one- <br />time expenditures or placed into reserves. One-time revenues will not <br />be used to finance ongoing programs. <br /> <br />The City will maximize utilization of user charges in lieu of property <br />taxes for services that can be individually identified and where the costs <br />are directly related to the level of service. User fees will be reviewed <br />each year to ensure that related costs are recovered. <br /> <br />The growth and development of Elk River directly influences revenues <br />available from many sources. Financial planning must consider <br />anticipated community growth. All planning must recognize the <br />relationship between finance and community development. Much of the <br />General Fund fee revenue comes from development related charges, such <br />as building permit fees. As growth slows, revenue from these sources <br />will decline. <br /> <br />Revenues <br /> <br />Page <br /> 12 <br /> <br /> <br />