Chapter 3.05
GENERAL PROVISIONS
Sections:
3.05.010 Public works bond requirements.
3.05.020 Charge for returned checks and the like.
3.05.030 Vouchers that may be paid prior to council allowance.
3.05.050 Payments to the city and municipally owned utilities.
3.05.060 Cash handling policy and procedure.
3.05.070 Procedures and guidelines to designate an accounts receivable as uncollectible.
3.05.080 Fund balance financial policy.
3.05.010 Public works bond requirements.
(A) For public work estimated to be not more than certain amounts as specified by Indiana Code, the city shall require a bond or a certified check to be filed with each bid by a bidder. The amount of the bond or certified check is set at five percent of the bid.
(B) In addition, the city shall require payment and performance bonds as stated in the Indiana Code. [Ord. 1602-2019 §§ 1, 2.]
Statutory reference: Evidence of financial responsibility, see IC 5-22-16-5.
3.05.020 Charge for returned checks and the like.
For any check, draft, order, or like instrument tendered to the city, dishonored or returned unpaid for any reason, a service charge of $25.00 shall be assessed. [Ord. 1261-2007; Ord. 1210-2005; Ord. 912-96, 1996. Code 2000 § 33.002.]
3.05.030 Vouchers that may be paid prior to council allowance.
(A) The following types of vouchers are allowed to be paid prior to Common Council or Park and Recreation Board allowance:
(1) Utility payments or connection charges;
(2) General grant programs where advance funding is not prohibited and the contracting party posts sufficient security to cover the amount advanced;
(3) Grants of state funds;
(4) Bond or coupon payments;
(5) Payroll;
(6) State, federal or county taxes;
(7) Expenses that must be paid because of emergency circumstances;
(8) A product or service for which the city legislative body has accepted a bid;
(9) Deposits or bonds for street cuts and to raze buildings made payable to and held in escrow by the city and to be refunded to the payee upon satisfactory completion of construction or work associated with said deposit or bond;
(10) Registration fees associated with conferences, seminars, or workshops that city employees wish to attend; and
(11) Credit card payments.
(B) The Common Council or Park and Recreation Board having jurisdiction over the allowance of the vouchers shall review and allow the vouchers at the next regular or special meeting following the preapproved payment of the expense. [Ord. 1128-2003; Ord. 914-96, 1996. Code 2000 § 33.003.]
Statutory reference: Claim payments in advance of board allowance, see IC 36-4-8-14.
3.05.040 Credit card policy.
(A) Credit Card Issuance.
(1) The Clerk-Treasurer is authorized to make application for credit cards for use by city officials and employees for official city business.
(2) The Mayor, Clerk-Treasurer, or department head shall designate which city officials and employees shall be issued credit cards. The credit card maximum limit shall not exceed $5,000. Thirty-day emergency limit increases are permitted.
(B) Credit Card Use Policies and Procedures.
(1) When not in use, the credit cards shall be secured in the Office of the Clerk-Treasurer or at the office of the department head.
(2) Upon request by a city official or employee, the Clerk-Treasurer, department head, or designee shall issue the credit card for use and shall keep a record showing the name and position of the individual requesting use of the card, date of issuance, date of return, and purpose of use. When the purpose for which the credit card was issued has been accomplished, the card shall be returned to the custody of the Clerk-Treasurer, department head, or designee.
(3) Itemized invoices in connection with the use of credit cards shall be submitted to the office of the Clerk-Treasurer for processing when the purpose for which the credit card was issued has been accomplished. The invoices shall be properly itemized and documented as provided in IC 5-11-10 before approved and paid. The credit card account will be paid in full every billing cycle. Improperly itemized and documented items as well as all interest, carrying charges or penalties shall be the personal responsibility of the individual user. [Ord. 1545-2016 § 1; Ord. 1366-2011; Ord. 1243-2006; Ord. 1148-2004; Ord. 1100-2002; Ord. 1025-2000. Code 2000 § 33.004.]
3.05.050 Payments to the city and municipally owned utilities.
(A) Payments to the city and municipally owned utilities for any purpose may be made by the following financial instruments:
(1) Cash.
(2) Check.
(3) Bank draft.
(4) Money order.
(5) Bank card or credit card.
(6) Electronic funds transfer.
(B) If there is a charge to the city or municipally owned utility for the use of a financial instrument, the city or municipally owned utility may collect a sum equal to the amount of the charge from the person who uses the financial instrument, however, the charge may not exceed the transaction charge. [Ord. 1510-2015; Ord. 1282-2008. Code 2000 § 33.005.]
Statutory reference: Authority, IC 36-1-8-11.
3.05.060 Cash handling policy and procedure.
(A) Departments receiving cash must be approved by the office of the Clerk-Treasurer (the “Clerk-Treasurer”).
(B) “Cash” is defined as coin, currency, checks, money orders, and credit card transactions.
(C) Required procedures for departments receiving cash include:
(1) Accounting for cash as it is received;
(2) Adequate separation of duties and checks and balances, which includes cash collecting, depositing, reconciling and reporting;
(3) Proper prenumbered receipts given for all cash received;
(4) Approval of any voided cash receipts by the department head;
(5) Deposit of cash promptly or routinely at the office of the Clerk-Treasurer;
(6) Reconciliation of validated deposit forms to supporting documentation and to the account statement;
(7) Approval by the Clerk-Treasurer of any changes in cash handling procedures;
(8) Proper safeguarding of cash; and
(9) The use of checking or other bank accounts by city personnel for depositing city cash is prohibited unless the checking or other bank account has been established by the Clerk-Treasurer.
(D) Establishing Cash Collection Departments. The Clerk-Treasurer must authorize all departments before cash collection begins. The department request must include:
(1) Reason why cash collection is needed;
(2) A list of those positions involved with cash collection and how segregation of duties will be maintained;
(3) Whether there is a need for a cash change advance;
(4) A description of the reconciliation process, including frequency of reconciliation;
(5) A description of the process for safeguarding cash until it is deposited; and
(6) A schedule of how often cash deposits will be made.
(E) Operation of Cash Collection Departments.
(1) All cash received must be recorded through a computerized accounting system with computer generated official city receipts or a department prenumbered receipt form with a duplicate record being retained by the receiving department. All numbered receipts must be accounted for, including voided receipts.
(2) The cash collection department must maintain a clear separation of duties. An employee should not have responsibility for more than one of the cash handling components: collecting, depositing and reconciling.
(3) The cash received must be reconciled to a cash register or drawer or to the prenumbered receipts at the end of the day or at the end of each shift. Cash must be reconciled separately from checks and credit cards by comparing actual cash received to the cash total from the cash register or drawer or to the sum of the cash sales from the prenumbered receipts.
(4) All cash and receipts must be protected by using a cash register, safe or other secure place until deposited.
(5) Checks must be made payable to the city and must be endorsed promptly with a restrictive endorsement stamp payable to the city.
(6) Checks or credit card transactions will not be written or cashed for more than the amount of purchase.
(7) Collections of more than $500.00 must be presented to the Clerk-Treasurer by the next business day. Amounts less than $500.00 must be presented no less than weekly.
(8) Refunds or expenditures must be paid through the appropriate budget with a city check generated by the Clerk-Treasurer.
(9) The Clerk-Treasurer will issue a receipt to be used for reconciliation of the supporting documentation issued by the department.
(F) Instruction for Cash Received.
(1) A receipt must be issued for each payment received. At a minimum, manual prenumbered receipts must include the date, method of payment (cash, check or credit card), purpose of the receipt, and the identification of the department and person issuing the receipt.
(2) All checks must be endorsed immediately with a restrictive endorsement stamp payable to the city.
(3) All voided transactions must be approved and initiated by the department head.
(4) Cash must be kept in a safe or a secure place until presented to the Clerk-Treasurer for deposit.
(G) Balancing of Cash Receipts. All cash collected must be balanced daily by method of payment by comparing the total of the cash, checks and credit cards to the cash register or drawer totals and to the prenumbered receipts totals.
(H) Prenumbered Receipts.
(1) Department prenumbered receipts may be obtained by the department. A log shall be maintained that includes the numbers of the receipts and the dates of issuance.
(2) The department shall retain one copy of all receipts, including void, until submittal to the Clerk-Treasurer.
(3) When submitting the cash to the Clerk-Treasurer, the department shall include the department receipt copy and a city prenumbered receipt prescribed by the State Board of Accounts that includes the total of all department receipts.
(I) Record Retention. All cash receipts and related documents must be maintained in accordance with record retention schedules established by the Indiana Commission on Public Records.
(J) Exceptions to Procedures. The Clerk-Treasurer must approve exceptions to these procedures. For example, in cases where there is not enough staff available to maintain complete separation of duties, an alternate process to safeguard city funds must be established and approved. [Ord. 1427-2012. Code 2000 § 33.006.]
3.05.070 Procedures and guidelines to designate an accounts receivable as uncollectible.
(A) Applicability. These procedures apply to all accounts receivable (“account”) at the city. The office of the Clerk-Treasurer (“office”) has the primary responsibility for ensuring compliance with these procedures.
(B) Procedures.
(1) Once an account is created, it becomes subject to collection procedures.
(2) The office will review outstanding accounts monthly.
(3) The office will determine which accounts are considered uncollectible and write them off annually.
(4) An account is determined to be uncollectible if it meets one or more of the following criteria:
(a) Collection procedures have been followed and remain unpaid.
(b) The debtor cannot be located, nor any of the debtor’s assets.
(c) The debtor has no assets and there is no expectation they will have any in the future.
(d) The debt is disputed and the office has insufficient documentation to pursue collection efforts.
(e) The debt is discharged in bankruptcy.
(f) The debtor has died and there is no known estate or guarantor.
(g) It is determined that it is not cost effective to continue collection efforts.
(C) Guidelines.
(1) For accounts less than $40.00, the account will be written off upon approval by the Common Council.
(2) For accounts $40.00 and more, the account will be reviewed by the office that collection procedures were followed and documented. Upon approval of the Common Council, these accounts will then be written off.
(3) Accounts that have had a write-off as having had an uncollectible balance in the past will be flagged by the office. Any future transactions for those account holders will be denied until the uncollectible balance is paid in full. However, this guideline will not apply if the debt is fully discharged in bankruptcy or if the account was disputed and the office has insufficient documentation to pursue collections. [Ord. 1458-2013. Code 2000 § 33.007.]
3.05.080 Fund balance financial policy.
(A) This policy shall be known as the fund balance financial policy of the city (“policy”).
(B) This policy will be used to frame major policy initiatives, and those initiatives shall be summarized in the annual budgets for the city governmental funds, Waterworks Utility and Wastewater Utility. Initiatives may include staffing levels and compensation, maintenance programs, capital improvements, and debt management. During the annual budget process, the policy will be reviewed to ensure initiatives are followed within the limits of a structurally balanced budget that is financially sustainable within the context of long-term forecasting.
(C) This policy will be used to define the appropriate level of unrestricted fund balance target levels in governmental operating, special revenue, debt service, and capital funds and in enterprise operating and maintenance, sinking, and improvement funds.
(1) A variety of factors shall be considered, including:
(a) The predictability of revenues and the volatility of expenditures;
(b) The perceived exposure to significant one-time outlays (for example, disasters, immediate capital needs, budget cuts);
(c) The potential drain upon general fund resources from other funds as well as the availability of resources in other funds (that is, deficits in other funds may require that a higher level of unrestricted fund balance be maintained in the general fund just as the availability of resources in other funds may reduce the amount of unrestricted fund balance needed in the general fund);
(d) Liquidity (that is, a disparity between when financial resources actually become available to make payments and the average maturity of related liability may require that a higher level of resources be maintained); and
(e) Commitments and assignments (that is, the city may wish to maintain higher levels of unrestricted fund balance to compensate for any portion of unrestricted fund balance already committed or assigned by the city for a specific purpose).
(2) Unrestricted Fund Balance Target Levels.
(a) Governmental Funds.
(i) Operating Funds. The minimum unrestricted fund balance target level for operating funds shall be no less than two months and not more than six months of budgeted expenditures.
(ii) Special Revenue Funds. The minimum unrestricted fund balance target level for special revenue funds shall be no less than two months and not more than six months of budgeted expenditures.
(iii) Debt Service Funds. The minimum unrestricted fund balance target level for debt service funds shall be no less than the next debt service payment and not more than the total debt service due in the fiscal year for which the minimum is established.
(iv) Capital Funds. The minimum unrestricted fund balance target level for capital funds with a dedicated revenue source shall be no less than six months of budgeted expenditures. For those funds without a dedicated revenue source, the minimum unrestricted fund balance target level shall be equal to the forecasted capital improvements.
(b) Enterprise Funds.
(i) Operating and Maintenance Funds. The minimum unrestricted fund balance target level for operating and maintenance funds shall be no less than two months of operation and maintenance expense.
(ii) Sinking Funds. The minimum unrestricted fund balance target level for the sinking fund bond and interest account requires an amount equal to one sixth of the next interest payment and one sixth of the next principal payment to be deposited in the account. The minimum unrestricted fund balance target level for the sinking fund debt service reserve account requires an amount equal to the maximum combined annual debt service.
(iii) Improvement Funds. The minimum unrestricted fund balance target level for improvement funds shall be equal to the forecasted capital improvements for the ensuing year.
(D) This policy will be used to replenish unrestricted fund balances below target levels as soon as budgetary and economic conditions allow and preferably within one to three years of use.
(1) In the event unrestricted fund balances are below minimum target levels set by this policy, this policy will be used to determine which resources will be directed to replenish those funds.
(a) For governmental funds, those resources may include:
(i) New revenue streams;
(ii) Changes to existing revenue streams;
(iii) Nonrecurring revenues;
(iv) Budget surpluses;
(v) Excess resources in other funds, if legally permissible;
(vi) Year-end resources; and
(vii) Moneys accumulated in the rainy day fund.
(b) For enterprise funds, those resources may include moneys in the improvement funds.
(2) If all resources have been directed to replenish those funds, the following strategies shall be considered for governmental and enterprise funds:
(a) Reevaluate goals that guide budget decision making and the approaches to achieve those goals by reassessing needs, priorities, challenges, and opportunities, such as:
(i) What services are top priorities, such as public safety, culture and recreation, highways, and economic development;
(ii) What has to be accomplished, including staffing levels and compensation, maintenance programs, capital improvements, and debt management;
(iii) What is the appropriate level of property taxes to apply toward such services as trash collection, hydrant rental, public safety, highways, and culture and recreation;
(iv) What services should be cost based;
(v) What level of cost sharing with other governments, private entities, and institutions is appropriate for such items as municipal utilities;
(vi) What are unrestricted fund balance targets for operating funds, special revenue funds, debt service funds, and capital funds.
(3) For enterprise funds, in addition to subsection (D)(2) of this section, the city, with the assistance of a financial advisor, will annually review current rates and charges and nonrecurring charges to determine if adequate to meet initiatives. [Ord. 1577-2018 § 1; Ord. 1461-2014. Code 2000 § 33.008.]