Budget Policies

About The Balanced Budget PolicyThe operating budget shall be balanced with anticipated revenues, including appropriated unencumbered surplus, equal to proposed expenditures. All funds within the budget shall also be balanced. The City is prohibited from balancing current expenditures through the obligation of future year’s resources. 

Summary Of Investment PolicyThe City shall invest public funds in such a manner as to comply with Federal and State laws and within the authority granted by the Mayor and Council; ensure prudent money management; provide for daily cash flow requirements; and meet the objectives of this policy in the priority order of safety, liquidity, and return on investment (yield).  

About The Debt PolicyThe objective of the debt policy is to guide City elected officials and staff as they consider the proper use of debt to fund capital projects. The policy will be reviewed on an annual basis by the City Manager and Finance Director or their designee. Any substantive modifications to this policy must be approved by City Council.

The City of Chamblee recognizes that, in order to maintain flexibility in responding to changing service priorities, revenue inflows, and cost structures, a debt management strategy is required. The City strives to balance service demands and the amount of debt incurred. The City realizes that failure to meet the demands of growth may inhibit its continued economic viability, but also realizes that too much debt may have detrimental effects as well.

Debt is a financing tool which should only be used when the City has legal, financial and market debt capacities and will be considered when some or all of the following conditions exist:

  1. Estimated future revenue is sufficient to ensure the repayment of the debt obligation; 
  2. Other funding options have been considered but are not viable for the timely or economic acquisition or completion of a capital project;
  3. A capital project is mandated by federal or state authorities with no other viable funding option;
  4. The capital project or asset lends itself to debt financing rather than pay-as-you-go funding based on the expected useful life of the project and the City’s ability to pay the debt service;
  5. Debt will not be used to fund ongoing operating and maintenance expenses of the City;
  6. Debt financing should not be used for enterprise activities without a designated revenue source for retiring principal and interest. The City should identify a specific source of revenue for the repayment of each debt issuance and calculate the expected impact on rates and user fees in order to maintain adequate debt service coverage and cash levels;
  7. Debt should be structured that the principal will be retired over the useful life of the project financed. The City should not issue debt for a period longer than the period during which it intends to use the capital improvement being financed;
  8. Total tax-supported debt as a percentage of total taxable full value will not exceed 1.75%;
  9. Debt service as a percentage of Total Governmental Fund Expenditures will not exceed fifteen (15) percent, excluding any Special Purpose Local Option Sales Tax (SPLOST) debt or self-supporting debt; and
  10. The City will manage its cash in a manner that will prevent any borrowing to meet needed operating expenses. The City will primarily rely on current revenue cash setasides or debt to finance capital improvement projects.
It is important to note that under Georgia financing laws, the City’s outstanding general obligation debt shall not exceed 10 percent of total assessed property value. By law, the general obligation debt subject to the limitation may be offset by amounts set aside for repaying the general obligation bonds. 

About The Capital Budget PolicyA capital projects plan will be developed and updated annually. A five-year Capital Improvement Program (CIP) will assist in the planning, acquisition, and financing of capital projects. A major capital project is generally defined as a non- recurring capital expenditure that has an expected useful life of more than 10 years and an estimated total cost of $50,000 or more. Examples include parks improvements, streetscapes, computer systems, and construction or expansion of facilities.  

Major capital projects will be budgeted in the Capital Improvement Fund (CIF) reflecting all available resources. With the involvement of responsible departments, the City Manager will prepare the capital budget annually. The City’s capital budget will be formally adopted by City Council with the operating budget. 

About The Fund Balance PolicyFund balance is the cumulative difference between revenues and expenditures at the end of the City’s fiscal year. It is also understood to be the difference between assets and liabilities on the balance sheet. The practice of conservative revenue estimates and carefully monitored expenditures may result in a fund balance. The City intends to maintain an unreserved, unassigned fund balance in the general fund of twenty-five percent of the operating budget at the end of the fiscal year. The City does not budget for contingencies and therefore, must rely on the fund balance for emergency expenditures. In the event the fund balance falls below twenty-five percent at year end, the City Council shall adopt a plan for replenishment of the reserves within two years.  

In accordance with the Governmental Accounting Standards Board (GASB) Statement 54, the City recognizes the following five classifications of fund balance for financial reporting purposes:  

  • Non-spendable – non-cash assets such as inventories or prepaid items.  
  • Restricted – funds legally restricted for specific purposes, such as grant funds.  
  • Committed – amounts that can only be used for specific purposes pursuant to a formal vote of the City Council.  
  • Assigned – amounts intended to be used for specific purposes. The City Council can choose to delegate this authority.  
  • Unassigned – residual spendable fund balance after subtracting all above amounts and are available for any legal purpose. 

The City of Chamblee conforms to the generally accepted accounting principles (“GAAP”) as applicable to local governments.  

The diverse nature of governmental operations and the necessity of assuring legal compliance preclude recording and summarizing all governmental financial transactions and balances in a single accounting entity. Therefore, from an accounting and financial management viewpoint, a governmental unit is a combination of several distinctly different fiscal and accounting entities, each having a separate set of accounts and functioning independently of each other.

Each accounting entity is accounted for in a separate fund. A fund is defined as a fiscal accounting entity with a self-balancing set of accounts recording cash and other financial resources together with all related liabilities and residual equities or balances, changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with regulations, restrictions, or limitations.  

The city’s accounting records for governmental funds are maintained on a modified accrual basis with the revenues being recorded when available and measurable and expenditures being recorded when the services or goods are received, and the liabilities are incurred. Accounting records for the city’s proprietary funds are maintained on an accrual basis.  

All funds are classified into fund types and the number of funds a government issues may vary. The City of Chamblee currently uses twelve governmental funds and three proprietary funds to account for the use of financial resources. The city’s funds are detailed below by fund type.