FINANCE/BUDGET/AUDIT COMMITTEE

1. ITEMS FOR DISCUSSION 1.A. FEES/CHARGES RECOMMENDATION: It is requested that members of the City Council Finance/Budget Committee consider recommended changes to the City’s Consolidated Tax and Fee Schedule. A change in the Schedule will require an update to Resolution 1241. 1.B. INVESTMENT POLICY, FINANCIAL, BUDGET AND DEBT POLICIES AND RESOLUTION NO. 953 - ASSET CAPITALIZATION POLICY. RECOMMENDATION: It is recommended the City Council Finance/Budget Committee review and confirm NO. 2 PORTUGUESE BEND ROAD ROLLING HILLS, CA 90274 (310) 377-1521 FAX (310) 377-7288 AGENDA Finance/Budget/Audit Meeting FINANCE/BUDGET/AUDIT COMMITTEE Wednesday, May 19, 2021 CITY OF ROLLING HILLS 4:30 PM This meeting is held pursuant to Executive Order N-29-20 issued by Governor Gavin Newsom on March 17, 2020. All Finance Committee Members will participate by teleconference. The meeting agenda is available on the City’s website. Members of the public may observe and orally participate in the meeting via Zoom and or submit written comments in real- time by emailing the City Clerk’s office at cityclerk@cityofrh.net. Your comments will become part of the official meeting record. You must provide your full name, but please do not provide any other personal information that you do not want to be published. Join Zoom Meeting https://us02web.zoom.us/j/81645083903?pwd=MmEzR21hNU50MDZoNGlrSkNzKzVBdz09 or Call (669) 900-9128 Meeting ID: 816 4508 3903 Passcode: 589441 Please contact the City Clerk at 310 377-1521 or email at cityclerk@cityofrh.net for assistance. 2019-2020_Consolidated_Tax_and_Fee_Schedule.pdf 1

the Investment Policy, the Financial, Budget and Debt Policies, with changes as recommended and Resolution No. 953 – Asset Capitalization Policies as presented. 1.C. FY21-22 PROPOSED BUDGET. RECOMMENDATION: It is recommended that the City Council Finance/Budget/Audit Committee review the draft proposed Fiscal Year 2021/22 Budget for the General Fund and provide staff with comments and direction. With the Committee’s input, the budget documents will be finalized for presentation to the City Council at its Budget Workshop meeting on May 24, 2021. 2. PUBLIC COMMENT 3. ADJOURNMENT AssetCapitalization_Policy_Resolution No. 953.pdf Financial_Policies.pdf Investment_Policy.pdf Rolling Hills 1 year extension FY 2021.pdf CIP_3Years_2021-May-16.pdf FY_21-22_Proposed_Budget-1.pdf Notice: Pursuant to the Brown Act, no action will take place on any items not on the agenda. This is the appropriate time for members of the public to make comments regarding items listed on this agenda. Documents pertaining to an agenda item received after the posting of the agenda are available for review in the City Clerk's office or at the meeting at which the item will be considered. In compliance with the Americans with Disabilities Act (ADA), if you need special assistance to participate in this meeting due to your disability, please contact the City Clerk at (310) 377-1521 at least 48 hours prior to the meeting to enable the City to make reasonable arrangements to ensure accessibility and accommodation for your review of this agenda and attendance at this meeting. 2

1. ITEMS FOR DISCUSSION 1.A. FEES/CHARGES RECOMMENDATION: It is requested that members of the City Council Finance/Budget Committee consider recommended changes to the City’s Consolidated Tax and Fee Schedule. A change in the Schedule will require an update to Resolution 1241. 1.B. INVESTMENT POLICY, FINANCIAL, BUDGET AND DEBT POLICIES AND RESOLUTION NO. 953 - ASSET CAPITALIZATION POLICY. RECOMMENDATION: It is recommended the City Council Finance/Budget Committee review and confirm NO. 2 PORTUGUESE BEND ROAD ROLLING HILLS, CA 90274 (310) 377-1521 FAX (310) 377-7288 AGENDA Finance/Budget/Audit Meeting FINANCE/BUDGET/AUDIT COMMITTEE Wednesday, May 19, 2021 CITY OF ROLLING HILLS 4:30 PM This meeting is held pursuant to Executive Order N-29-20 issued by Governor Gavin Newsom on March 17, 2020. All Finance Committee Members will participate by teleconference. The meeting agenda is available on the City’s website. Members of the public may observe and orally participate in the meeting via Zoom and or submit written comments in real- time by emailing the City Clerk’s office at cityclerk@cityofrh.net. Your comments will become part of the official meeting record. You must provide your full name, but please do not provide any other personal information that you do not want to be published. Join Zoom Meeting https://us02web.zoom.us/j/81645083903?pwd=MmEzR21hNU50MDZoNGlrSkNzKzVBdz09 or Call (669) 900-9128 Meeting ID: 816 4508 3903 Passcode: 589441 Please contact the City Clerk at 310 377-1521 or email at cityclerk@cityofrh.net for assistance. 2019-2020_Consolidated_Tax_and_Fee_Schedule.pdf 1

the Investment Policy, the Financial, Budget and Debt Policies, with changes as recommended and Resolution No. 953 – Asset Capitalization Policies as presented. 1.C. FY21-22 PROPOSED BUDGET. RECOMMENDATION: It is recommended that the City Council Finance/Budget/Audit Committee review the draft proposed Fiscal Year 2021/22 Budget for the General Fund and provide staff with comments and direction. With the Committee’s input, the budget documents will be finalized for presentation to the City Council at its Budget Workshop meeting on May 24, 2021. 2. PUBLIC COMMENT 3. ADJOURNMENT AssetCapitalization_Policy_Resolution No. 953.pdf Financial_Policies.pdf Investment_Policy.pdf Rolling Hills 1 year extension FY 2021.pdf CIP_3Years_2021-May-16.pdf FY_21-22_Proposed_Budget-1.pdf Notice: Pursuant to the Brown Act, no action will take place on any items not on the agenda. This is the appropriate time for members of the public to make comments regarding items listed on this agenda. Documents pertaining to an agenda item received after the posting of the agenda are available for review in the City Clerk's office or at the meeting at which the item will be considered. In compliance with the Americans with Disabilities Act (ADA), if you need special assistance to participate in this meeting due to your disability, please contact the City Clerk at (310) 377-1521 at least 48 hours prior to the meeting to enable the City to make reasonable arrangements to ensure accessibility and accommodation for your review of this agenda and attendance at this meeting. 2

Agenda Item No.: 1.A Mtg. Date: 05/19/2021 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: TERRY SHEA, FINANCE DIRECTOR THRU: ELAINE JENG P.E., CITY MANAGER SUBJECT: FEES/CHARGES DATE: May 19, 2021 BACKGROUND: Annually, staff provides the Finance/Budget Committee and City Council with information for consideration to adjust City’s current fees and charges. As such, staff is proposing the following changes to the Consolidated Tax and Fee Schedule for FY 2021/22. Increase Construction and Demolition permit fee from $100 (single project permit) to $150 and collect a deposit of $1,000 from applicant at the time of permit issuance, up from the current deposit amount of $750. The deposit will be returned to applicant upon the submittal of waste diversion report from applicant. Wireless application Fee of $1,000. There is no current fee associated with the Wireless Application, however between staff time, advertising and mailings there is approximately $1,000 of City costs. No other fees and charges are proposed for next fiscal year. DISCUSSION: See above. FISCAL IMPACT: Depending on changes and level of activity for proposed Fee increases. RECOMMENDATION: The Committee’s recommendations will be forwarded to the City Council for review. The Implementation of new fees or an adjustment to any existing fees will require public hearing. If a public hearing for modifications to the Schedule of Fees and Charges is desired by the City Council, staff will proceed to schedule the public hearing. 3

ATTACHMENTS: 2019-2020_Consolidated_Tax_and_Fee_Schedule.pdf 4

CITY OF ROLLING HILLS CONSOLIDATED TAX, FEE AND FINE SCHEDULE for FISCAL YEAR 2019/20 ITEM FEES CODE/RESO NO. DATE ADOPTED TAXES Real Property Transfer Tax Property value exceeds $100,000 - Ordinance No. 72 December 11, 1967 a tax at the rate of 27.5 cents for each five hundred dollars or fractional part thereof. Cable Television Franchise 2.50% of gross annual receipts Resolution No. 823 July 28, 1997 BUILDING AND SAFETY PERMITS BUILDING, PLUMBING, MECHANICAL, AND ELECTRICAL PERMITS (LA COUNTY) Resolution No. 496 August 23, 1982 Building Permit Two and one quarter the amount set forth in Resolution No. 1226 July 9, 2018 the LA County Building Code for each fee. Plumbing Permit Two and one quarter times the amount set forth in the LA County Plumbing Code for each fee. Mechanical Permit Two and one quarter times the amount set forth in the LA County Mechanical Code for each fee. Electrical Permit Two and one quarter times the amount set forth in the LA County Electrical Code for each fee. Park & Recreation Fund Fee New residential dwelling - Resolution No. 1206 May 22, 2017 2% of the first $100,00 of construction valuation, plus 0.25% of such valuation over $100,000 Solar and Photovoltaic Systems and The amount set forth in the Los Angeles CounResolution No. 1064 July 13, 2009 Appurtenant Equipment Bulding and Electrical Codes for each fee, table and schedule therein, plus $60.11 City administrative fee. GEOTECHNICAL FEES 0.42% of the valuation of the proposed structuResolution No. 931 April 14, 2003 Minimum charge - $535 Maximum charge - $3,588 PERMITTING PROCESS THROUGH A CITY APPROVED CONSULTANT Building, Plumbing, Mechanical, and Electrical25% surcharge on Los Angeles County Resolution No. 1034 February 11, 2008 Department of Building and Safety fees Solar and Photovoltaic Systems and 25% surcharge on Los Angeles County Resolution No. 1064 July 13, 2009 Appurtenant Equipment Department of Building and Safety fees, plus $60.11 City administrative fee PLANNING, ZONING AND SUBDIVISIONS Resolution No. 691 September 28, 1992 Conditional Use Permits $1,500 Site Plan Review $1,500 Variance $1,250 Variance, Minor $750 Discretionary Approval Modification 2/3 of original application fee Zone Change $2,000 Zoning Amendment $2,000 General Plan Amendment $2,000 Lot Line Adjustment $1,500, plus county fee Tentative Parcel Map $1,500 and county fees plus 20% Tentative Tract Map $1,500 and county fees plus 20% Revised 06/24/19 Page 1 Copy of 2019-2020 Consolidated Tax and Fee Schedule.xlsx 5

CITY OF ROLLING HILLS CONSOLIDATED TAX, FEE AND FINE SCHEDULE for FISCAL YEAR 2019/20 ITEM FEES CODE/RESO NO. DATE ADOPTED Appeal Fee 2/3 of original application fee Appeal of Zone Clerance $375 Resolution No. 1149 July 22, 2013 Environmental Impact Report City consultant fee plus 10% Resolution No. 1206 May 22,2017 Extension of Time $200 Resolution No. 1149 July 22, 2013 Final Parcel or Tract Map County fees Resolution No. 1206 May 22, 2017 County Clerk Processing Fee County fee Resolution No. 1149 July 22, 2013 Multiple Discretionary Reviews Most expensive fee for the first review and Resolution No. 1060 May 11, 2009 1/2 of the fee for the second review. No fee for third or more reviews Accessory Dwelling Unit Appl. Processing Fee $375 Resolution No. 2120 February 12, 2018 Stable Use Permit $375 Resolution No. 1149 July 22, 2013 Major Remodel Review $375 Resolution No. 1149 July 22, 2013 Lighting Ordinance Modification $375 Resolution No. 1206 May 22, 2017 Outdoor Lighting Audit $150 Resolution No. 1149 July 22, 2013 City Council and Planning Commission $375 - fee to be credited if results in filing of Resolution No. 1149 July 22, 2013 Intrepretation and Misc. Reviews forml application to the Citry Council or Planning Commission Environmental Review fees for Discretionary Permits Preparation and Staff Review of Initial Study $200 Resolution No. 1119 April 23, 2012 Preparation of Negative Declaration or $50 plus fee charged by the CA Dept. of Fish Resolution No. 1206 May 22, 2017 Mitigated Negative Declaration and Game, if applicable, as adjusted annually Service Request County fees plus 20% Resolution No. 1119 April 23, 2012 Construction and Demolition Waste Permit $100 single project permit/ $750 deposit, refundable upon submittal of Certificate of Compliance Resolution No. 1060 June 24, 2019 ADDITIONAL PROCESSING FEE Resolution No. 854 January 25, 1999 Planning & Zoning Applications involving illegalAdministrative Fee $1,500 Resolution No. 1206 May 22, 2017 or "as built" structures or grading that require Stop Work Order $200 Resolution No. 1060 May 11, 2009 Planning Commission review. TRAFFIC COMMISSION REVIEW Resolution No. 691 September 28, 1992 New driveways or other traffic related items $300 VIEW IMPAIRMENT Resolution No. 1119 April 23, 2012 Review by Committee on Trees and Views $2,000 Processing fee Environmental Review Fees Preparation and Staff Review of Initial Study $200 Preparation of Negative Declaration or $50 plus fee charged by the CA Dept. of Fish Mitigated Negative Declaration and Game, if applicable, as adjusted annually GENERAL ADMINISTRATION - PROCESSING FEES Resolution No. 691 September 28, 1992 General Plan $30 Zoning Code $25 Budget $30 Zoning Map $3 Xeroxed Copies, each page $0.25 Revised 06/24/19 Page 2 Copy of 2019-2020 Consolidated Tax and Fee Schedule.xlsx 6

CITY OF ROLLING HILLS CONSOLIDATED TAX, FEE AND FINE SCHEDULE for FISCAL YEAR 2019/20 ITEM FEES CODE/RESO NO. DATE ADOPTED Subdivision Code $25 FALSE ALARM Resolution No. 1119 April 23, 2012 Fee for 1st incident involving a false alarm is waived 2nd $50 3rd $100 4th $150 5th $200 6th $250 BAIL/FINE SCHEDULE FOR VEHICLE AND TRAFFIC VIOLATIONS Resolution No. 791 August 12, 1996 As set forth in Bail/Fine Schedule for Resolution No. 799 October 28, 1996 Title 10 Violations,. Resolution No. 824 July 28, 1997 Resolution No. 1072 September 14, 2009 Resolution No. 1101 January 10, 2011 PARKING VIOLATION/CITATION PENALTY SCHEDULE Resolution No. 717 November 22, 1993 Pursuant to California Vehicle Code Section Resolution No. 740 May 9, 1994 40203.5 and 40225 Resolution No. 824 July 28, 1997 FINE SCHEDLE FOR ADMINISTRATIVE CITATIONS Social Host Liability (RHMC Chapter 9.58) Resolution No. 1206 May 22,2017 1st Volation $2,500 2nd Violation within one year of first $5,000 Each add'l violation within one year of first $7,500 DOG/CAT LICENSE FEES Resolution No. 527 April 23, 1984 Dog, unaltered $18 Dog, spayed/neutered $9 with Certificate of Sterility Metallic dog tag $5 Penalty for not renewing license $25 Duplicate dog tag $5 Transfer fee $3 Appeal fee $40 Cat, unaltered, lifetime (optional) $10 Cat, spayed/neutered, lifetime (optional) $5 with Certificate of Sterility QUIMBY ACT FEES FOR SUBDIVISIONS Park in-lieu fees and/or dedication Municipal Code March 2005 of land when subdividing property. Section 16.28.150 SOLID WASTE COLLECTION FEES FY 2017/18 Annual Fee - $1,100 * Resolution No. 1051 January 12, 2009 PERMITS RELATIVE TO EXTRA LARGE VEHICLES ACCESSING THE CITY Resolution No. 637 March 25, 1991 $75 per vehicle (The City does not collect this fee.) * Solid Waste Collection Fee last updated 7/1/14 for FY 14/15 (City absorbed CPI increase for FY15/16, FY16/17, FY17/18, FY 18/19 and FY 19/20) Revised 06/24/19 Page 3 Copy of 2019-2020 Consolidated Tax and Fee Schedule.xlsx 7

Agenda Item No.: 1.B Mtg. Date: 05/19/2021 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: CONNIE VIRAMONTES , ADMINISTRATIVE ASSISTANT THRU: ELAINE JENG P.E., CITY MANAGER SUBJECT: INVESTMENT POLICY, FINANCIAL, BUDGET AND DEBT POLICIES AND RESOLUTION NO. 953 - ASSET CAPITALIZATION POLICY. DATE: May 19, 2021 BACKGROUND: As a component of the City’s annual financial audit, the City auditor is asked to review the City’s financial policies consisting of the Investment Policy, the Financial, Budget and Debt Policies and Asset Capitalization Policy. By law, according to the auditor, and as a best management practice the City Council is also required to annually review the City’s Investment Policy. DISCUSSION: The City’s auditors reviewed the Policies as listed above during the FY 2019/20 audit and did not recommend any changes. Staff has reviewed the City’s Investment Policy and we are in compliance with the California Government Code Section 53600, and we are not recommending any changes to the Investment Policy at this time. Staff has reviewed the Financial, Budget and Debt Policies and we are not recommending any changes at this time to the Financial, Budget, and Debt Policies. In 2019 the Policy was amended for the selection of independent external auditors requiring the City to go out for competitive bidding every six years beginning with the Fiscal Year 2021-22. However, out current contract with Lance, Soll & Lunghard, LLC expired with the Fiscal Year 2019-20 audit. Staff would like to extend the Contract for one year for the Fiscal Year 2020-21 audit and then go out for competitive bid. Staff is not recommending any changes to the Asset Capitalization Policy for FY 2020-21 currently. FISCAL IMPACT: There is no fiscal impact upon the City with review and confirmation of the City’s financial policies as 8

presented. The Fiscal Year 2019-20 Audit Fees were $17,120 and LSL has proposed a fee of $17,623 for the FY 2020-21 Audit. RECOMMENDATION: It is recommended the City Council Finance/Budget Committee confirm the Investment Policy, the Financial, Budget and Debt Policies, and Resolution No 953 – Asset Capitalization Policy as presented or direct staff accordingly. In addition authorize staff to enter into a one year contract with Lance Soll Lunghard, LLC for the FY 2020-21 Audit for $17,623. ATTACHMENTS: AssetCapitalization_Policy_Resolution No. 953.pdf Financial_Policies.pdf Investment_Policy.pdf Rolling Hills 1 year extension FY 2021.pdf 9

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FINANCIAL POLICIES 05/11/2020 1 CITY OF ROLLING HILLS ADMINISTRATIVE POLICY/PROCEDURES FINANCIAL, BUDGET AND DEBT POLICIES Original Version Effective: 09/24/2007 See end of document for complete policy history. Current Version Effective: 05/11/2020 Policy Framework: The purpose of the Financial, Budget and Debt Policies is to guide the City Council and other City officials in developing sustainable, balanced budgets and managing the City’s finances in a prudent manner consistent with best practices. The City’s commitment to adopting and operating within a balanced budget is a core financial value and policy of the City. The City of Rolling Hills Financial Policies represents the City’s framework for planning and management of the City’s fiscal resources. Adherence to the Financial Policies promote sound financial management which can lead to unqualified annual audits, provide assurance to the taxpayers that tax dollars are being collected and spent per City Council direction and provide a minimum of unexpected impacts upon taxpayers and users of public services. The City Council Finance / Budget Committee shall serve as the City’s audit committee for the purpose of recommending the selection of an auditor to the City Council, meeting with the City Auditor, reviewing the annual audit and necessary financial statements, responding to conflicts between management and the auditor and responding to fraudulent activities. The City Council will conduct a competitive process for the selection of the independent external auditor every 6 years to be in conformance with California Government Code Section 12410.6. (b). commencing for Fiscal Year 2021-22. Any non- audit work performed by the independent external auditor, if allowed, will be done under a separate contract approved by the City Council. The City Manager shall be responsible for developing and, as appropriate, implementing and managing these policies as well as subsidiary policies that execute the City’s Financial Policies. The City’s Financial Policies shall be in conformance with all state and federal laws, generally accepted accounting principles (GAAP) and standards of the Governmental Accounting Standards Board (GASB) and the Government Finance Officers Association (GFOA). 1. Financial Reporting Entity: The City of Rolling Hills was incorporated in 1957 under the general laws of the State of California. The City operates under the Council-Manager form of government. The City Council consists of five members elected at large for overlapping four-year terms. The Mayor and Mayor Pro-Tem are selected from the City Council members and serve a one-year term. The City Council appoints a City Manager, City Attorney and City Treasurer. In addition, the City Council appoints the members of advisory Commissions and Committees. The City, directly or by contract, provides municipal services as authorized by statute. Services provided include:  Public safety through the Los Angeles County Sheriff and Fire Department  Refuse collection by contract with a private hauler  Water through California Water Service Company 12

FINANCIAL POLICIES 05/11/2020 2  Sewer through Los Angeles County Sanitation Districts  Recreation  Public improvements  Planning and zoning  General administrative and support services 2. Financial Reporting Policies: The City’s accounting and financial reporting systems will be maintained in conformance with all state and federal laws, generally accepted accounting principles (GAAP) and standards of the Governmental Accounting Standards Board (GASB) and the Government Finance Officers Association (GFOA). Further, the City will make every attempt to implement all changes to governmental accounting practices at the earliest practical time.  The financial report should be in conformity with GAAP, demonstrate compliance with finance related legal and contractual provisions, disclose thoroughly with detail sufficient to minimize ambiguity and potential for misleading interferences.  An annual audit will be performed by an independent public accounting firm with an audit opinion to be included with the City’s published Comprehensive Annual Financial Report.  The City’s budget should satisfy criteria as a financial and programmatic policy document, as a comprehensive financial plan, as an operations guide for all organizational units and as a communications device for all significant budgetary issues, trends, and resource choices.  The City shall evaluate the fiscal impact of proposed changes in employee benefits to be provided. Prior to assuming liability for expanded benefits, a viable funding plan with estimates of long term impacts shall be incorporated into the analysis.  The City shall endeavor to avoid committing to new spending for operating or capital improvement purposes until an analysis of all current and future cost implications is completed.  The City shall endeavor to maintain cash reserves sufficient to fully fund the next present value of accruing liabilities, obligations to employees for vested payroll and benefits and similar obligations as they are incurred.  The City shall prepare and present to the City Council monthly interim revenue and expenditure reports and a Mid-Year Review to allow evaluation of potential discrepancies from budget assumptions. 3. Internal Control Accounting Policies: To provide a reasonable basis for making management’s required representations concerning the finances of the City.  Accounting Records – Maintain accounting records in accordance with Generally Accepted Accounting Principles (GAAP).  Monthly Posting – Post a monthly record, which maintains each month’s activities separate and distinct from another month’s work. This provides visibility in locating errors and fixing corrections. Accounting ledgers will be reviewed and reconciled on a monthly 13

FINANCIAL POLICIES 05/11/2020 3 basis to supporting documentation – Cash Receipts, Accounts Payable, Payroll and Monthly Journal Entries.  Sequential Number – Sequentially numbered instruments will be used for checks and cash receipts. Pre-numbered receipts are controlled and accounted for by an individual with no accounting handling responsibilities. The City’s pre-numbered checks and pre-numbered cash receipts should be safeguarded in the Vault. All copies of voided receipt forms are retained, accounted for, and documented.  Audit Trail – The City’s accounting records and systems shall provide an audit trail (e.g. paper document) that allows for the tracing of each transaction from its original document to completion. 4. Operating Management Policies: The budget process is intended to weigh all competing requests for City resources within expected fiscal constraints. Requests for new, on-going programs made outside the budget process will be discouraged.  Budget development will consider multi-year implications of current decisions and allocations and use conservative revenue forecasts.  Revenues will not be dedicated for specific purposes, unless required by law or Generally Accepted Accounting Practices (GAAP). All non-restricted revenues will be deposited in the General Fund (or other designated fund as approved by the City Manager) and appropriated by the City Council.  Current revenues will fund current expenditures. City revenues will be managed to protect programs from short-term fluctuations that impact expenditures.  The City will endeavor to identify entrepreneurial solutions to cover or recover costs of operating program.  The City shall strive to avoid returning to the City Council for new or expanded appropriations during the fiscal year. Exceptions may include emergencies, unforeseen impacts, mid-year adjustments or new opportunities.  Additional personnel will be requested after service needs have been thoroughly examined and is substantiated for new program initiatives or policy directives.  All non-Enterprise user fees and charges will be evaluated at least every three years to determine the direct and indirect cost recovery rate. The analysis will be presented to the City Council.  The City shall endeavor to maintain adequate cash reserves to fund 100% replacement of capital equipment. Replacement costs will be based upon equipment lifecycle financial analysis developed by the Finance Director and approved by the City Manager.  Balanced revenue and expenditure forecasts will be prepared to examine the City’s ability to absorb operating costs due to changes in the economy, service demands, and capital improvements. The forecast will be updated annually and include a four-year outlook. 14

FINANCIAL POLICIES 05/11/2020 4  Cash and investment programs will be maintained in accordance with the Government Code and the adopted investment policy will ensure that proper controls and safeguards are maintained. City funds will be managed in a prudent and diligent manner with an emphasis on safety of principal, liquidity, and financial return on principal, in that order. Pursuant to State law, the City, at least annually, revises and the City Council affirms a detailed investment policy. 5. Capital Management Policies:  Capital improvement projects are defined as infrastructure or equipment purchases or construction which results in a capitalized asset and having a useful (depreciable) life of at lea