Section 7:
Financial Matters

7.1 Council Compensation

The Olympia Municipal Code outlines a modest compensation for members of the City Council. A seated City Council may not increase or decrease its own compensation. Councils may only pass an ordinance to adjust the compensation of an incoming City Council. See OMC Section 02.04.100, in Appendix A, for more detail.

The City Annual Operating Budget includes appropriations for expenses necessary for members to undertake official City business. Funding provided includes membership in professional organizations; attendance at conferences or educational seminars; travel to Olympia’s sister City, Kato City, Japan; and the purchase of publications and office supplies.

7.2 Annual Operating Budget and Capital Facilities Plan (CFP)

The City’s annual Operating and Capital budgets are prepared on a calendar year basis. The Operating Budget is prepared each year. The Capital Facilities Plan (CFP) is updated each year as it is the estimated amount planned to be expended for capital facilities in the next six years. Capital facilities are fixed assets such as roads, parks, buildings and equipment. The CFP folds into the Operating Budget process. There are five distinct phases in the City’s budget cycle:

7.2.a Development and Preparation

A preliminary CFP is usually submitted in July, followed by a public hearing in October and adoption as part of the Annual Operating Budget in December. The Planning Commission and other advisory boards and commissions review the document and provide comment to the Council.

Each summer, City departments develop and submit their budget requests to a Budget Review Team. The Budget Review team balances projected revenue and projected expenses and develops the City Manager’s proposed budget. The Budget Review team meets several times during August and September.

7.2.b Review and Adoption

The City Manager’s Annual Operating Budget must be presented to the City Council no later than the first Tuesday in November. In November, the City Council reviews the City’s Manager proposed budget, holds public hearings, and makes budget adjustments. The City Council then adopts the annual budget for the next fiscal year. The Annual Operating Budget must be balanced and adopted prior to December 31 of the preceding year.

7.2.c Implementation

Services financed by the approved budget are carried out.

7.2.d Monitoring

Expenditures are monitored by department and the City Treasurer throughout the year to ensure that funds are used in an approved and adopted manner.

7.2.e Evaluation

Financial and Compliance audits are conducted annually by the State Auditor’s Office and annual Comprehensive Annual Financial reports are produced by the City Treasurer’s office. Performance Audits may be performed by the State Auditor’s on specific topics at the sole discretion of the State Auditor.

Please refer to the current year Operating and CFP budgets for more information, including State policies and guidelines for the municipal budget process. These are available on the City’s website, olympiawa.gov.

7.3 Long-Term Financial Strategy

The Council adopted the following long-term financial strategy:

7.3.a Key Principals:

•    Make Trade-offs (Do not initiate major new services without either (a) ensuring that revenue to pay for the service can be sustained over time, or (b) making trade-offs of existing services.

•    Do it Well (If the City cannot deliver a service well, the service will not be provided at all.)

•    Focus Programs on Olympia Residents and Businesses (Give priority to existing infrastructure.)

•    Use Unexpected One-Time Revenues for One-Time Costs or Reserves (One-time revenues, or revenues above projections, will be used strategically to fund prioritized projects.)

•    Invest in Employees (The City will invest in employees and provide resources to maximize their productivity.)

•    Pursue Innovative Approaches to Service Delivery (Continue to implement operational efficiencies and cost saving measures in achieving community values. Pursue partnerships and cost sharing strategies with others.)

•    Contract In/ Contract Out (Consider alternative delivery to maximize efficiency and effectiveness.)

•    Maintain Capacity to Respond to Emerging Community Needs

•    Pursue Entrepreneurial Initiatives

•    Address Unfunded Liabilities

•    Selectively Recover Costs (On a selective bases, have those who use a service pay the full cost.)

•    Recognize the Connection Between the Operating Budget and The Capital Budget.

7.3.b Guidelines:

What should the City do in the following year’s budget when the financial forecast is positive?

•    Assess the situation

•    Maintain adequate reserves

•    Use one-time revenues only for one-time expenses

•    Use recurring revenues for recurring costs OR for one-time expenses

•    Stay faithful to City goals over the long run

•    Think carefully when considering revenue cuts

•    Think long-term

What should the City do every year, whether the financial forecast is positive or negative?

•    Increase operating cost recovery

•    Pursue cost sharing

What should the City do in the following year’s budget when the financial forecast is negative?

•    Assess the situation

•    Use revenues sparingly

•    Reduce services

•    Continue to think carefully when considering tax increases

7.4 Council “Goal Money”

During the development of the Operating Budget, money deemed “Council Goal Money” may be set aside for the Council to use at its discretion throughout the year. The decision to use the money and how much will be determined by a motion and a majority vote of the Council. The amount set aside varies each year, according to the flexibility of the General Fund.

7.5 Financial Disclosure

Candidates for the office of Councilmember must file a financial disclosure statement with the Washington State Public Disclosure Commission within two weeks of filing a nomination paper. When appointed to fill a vacancy on the Council, the appointee must file a financial disclosure statement with the Commission, covering the preceding 12-month period, within two weeks of being so appointed. Councilmembers are required to file a financial disclosure statement with the Commission on an annual basis after January 1 and before April 15 of each year covering the previous calendar year. Councilmembers whose terms expire on December 31 must file the statement for the year that ended on that December 31. Statements filed in any of the above cases will be available for public inspection.

7.6 Contracting

The City’s contracting procedures and contract documents are reviewed by the Legal Department.

7.7 Gift of Public Funds

Article 8, section 7 of the Washington Constitution prohibits the city from giving money or property, or lending money or credit, except for the necessary support of the poor and infirm. Most commonly referred to as “the gift clause,” it reads as follows:

“No county, city, town or other municipal corporation shall hereafter give any money, or property, or loan its money, or credit to or in aid of any individual, association, company or corporation, except for the necessary support of the poor and infirm, or become directly or indirectly the owner of any stock in or bonds of any association, company or corporation.”

Transactions in which the city pays money, gives property or lends money or credit must be carefully scrutinized in light of the restrictions concerning the gift of public funds.

7.8 Travel Policy

It is the general policy of the City to pay for mileage, transportation, lodging, meals, and other necessary travel expenses incurred while on official City business. This Policy applies to staff and Councilmembers and only for travel outside the metropolitan Thurston County area. Reimbursements will be made only when valid receipts are presented.

Please see Appendix A for a full copy of the Travel Policy.

7.9 Miscellaneous Expense Policy (Reimbursements)

The Miscellaneous Expense Policy establishes policies and procedures related to employee expenses incurred when conducting City business in the Metropolitan Thurston County area (Olympia, Lacey, and Tumwater). Expenses under this policy shall be paid only if the activity serves a public purpose, involves specific City business, and expenses are incurred by or for individuals directly involved with the City business being conducted. This policy applies to expenses not covered under the Travel Policy.

Reimbursements will be made only when valid receipts are presented. Please see Appendix A for a full copy of the Miscellaneous Expense Policy.

7.10 Food Policy

The City policy regarding meal reimbursements is described in detail in the Miscellaneous Expense Policy (see Appendix A). In general, City funds may be used to pay for meals for Councilmembers and staff during intergovernmental meetings so long as the meeting deals with issues directly involving the City of Olympia, and it is shown that it is not practical or reasonable to schedule the meeting at a time other than during a meal time.

7.11 Recognition Policy

The City’s Recognition Policy establishes policies and procedures related to expenses incurred for Council recognition, celebration, retirement or resignation events.

Please see Appendix A for more detailed information

7.12 Credit Card/ Merchant Card Procedures and Guidelines

Please see Appendix A for information and forms to obtain a city credit card.