Financial Policy Handbook 2017

City of Spencer  Financial Policy  Handbook  Adopted: October 16, 2017  Resolution: 5700

Table of Contents

Accounts Payable Policy Budget Carryover Policy Cash-Check Receipt Policy Check Acceptance & Returned Checks Credit Card & Account Charge Financial Records Retention Fixed Asset Policy General Financial Policies Internal Control Policy Investment Policy Municipal Securities Disclosure Policy Post Issuance Compliance Policy Public Improvement Policy and Procedures Public Purpose Expenditure Purchasing Card Policy Purchasing Policy Surplus Property Disposal Policy TIF Incentive Policy

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FINANCIAL POLICY AND PROCEDURES MANUAL

Title: FINANCIAL POLICY

Date of Version: 10/16/2017

Section: ACCOUNTS PAYABLE POLICY

Resolution No.: 5700

SECTION 1 - POLICIES A. All invoices must be faxed, emailed or mailed directly to the Finance Department. B. Department Directors are responsible for the proper approval of all accounts payable paperwork, however, they may delegate (except employee reimbursements) such duties for certain activities to a Supervisor if that individual is responsible for preparing and managing that particular activity’s budget. Approval from this level of management or higher is required on all invoices, store receipts, disbursement claims, and requests for payment. It is the responsibility of the Department Director to notify the Finance Department who is authorized to approve invoices within their department and the max aproval amount. C. All applicable documents must be properly approved, coded, and forwarded to the Finance Department by 12:00 p.m. the Wednesday prior to a City Council meeting. A schedule will be sent annually to each department listing City Council dates and the corresponding due dates. D. Requests for payment not received prior to the applicable due date will be held until the next scheduled City Council meeting. E. Vendor payments are authorized at City Council meetings on the first and third Monday of each month, unless the meeting is changed due to a Holiday or other conflict. F. Accounts payable checks/electronic payments will be distributed/initiated the day following the City Council meeting unless otherwise authorized. G. No purchase made by an employee shall bind the City to receive and/or pay for the goods or service procured, unless authorized by the purchasing methods described in the purchasing policies.

H. Noncompliance with these policies and procedures may result in the return of improperly authorized or prepared documents, nonpayment of vendor invoices, or other sanction as determined necessary after consultation with the department director and/or city manager. I. The City does not prepay for goods or services or utilize prepaid devices such as gift cards. If a vendor requires prepayment for goods or services, authorization must be obtained from the City Manager and/or Finance Director. J. Proof of Purchases required to obtain rebates from vendors (i.e., Menards, etc.) shall be supplied to the Finance Department along with a Rebate form for Completion. No rebates shall go to individual employees. K. Employee reimbursements should be kept to a minimum (i.e. emergencies and travel/training). Step 1 - Receipt of goods and services - proof of receipt/acceptance a. Goods purchased (over the counter) - appropriate signatures on store receipts indicate goods have been received and are acceptable. b. Goods purchased (ordered and delivered) - receiving stamp must be placed on packing slip and be completed by the individual receiving the goods to indicate that goods have been received and are acceptable. Individual must verify that the shipment matches the packing slip and note any deficiencies. c. Maintenance agreements, ongoing service contracts, rents and leases, subscription renewals, or annual dues - appropriate signatures on monthly, quarterly, or annual statements/invoices indicate the acceptance, completion, or continuance of service. d. All employee reimbursements must use the travel and conference request (TCR) forms (training and travel expenses) or the employee reimbursement claim form (all others). e. Services and/or equipment contracted or ordered (informal or semi-formal bid) - appropriate signatures on invoices indicate goods and services have been received and are acceptable. SECTION 2 - PROCEDURES A. Department Paperwork Processing

f. Capital improvement projects for services or public improvements in excess of $50,000 (informal, semi-formal, or formal bid) - require the use of the contractor payment form and must be signed by the contractor and City employee and contract engineer overseeing the contract verifying quantities and level of completion. Final payments and retainage releases for public improvement contracts also require a Certificate of Completion from the responsible engineer. g. Packing slips are a useful tool for departments to keep to assure that all items purchased are received. However, they are not considered an invoice and will not be used to process payment. Step 2 - Preparing and authorizing payment a. The manager receiving the documents described in Step 1 must review the documents to ensure that the documentation requirements have been met and that the goods and services meet the required specifications, contract terms, or purchase order. At this step, any deficiencies to the original purchase or contract, including vendor information, quantity, price, sales tax, etc. should be noted and appropriately documented on a copy of the receiving documents. b. The finance assistant processing accounts payable in the Finance Department will stamp and date invoices received in the mail. The invoices will then be sent to the department making the purchase for coding and approval. If there is a not a vendor invoice for the payment, the department must contact the business for a duplicate invoice. Vendor statements or letters are not sufficient documentation for payment and will not be paid from. Employee reimbursements must use the employee reimbursement claim form or the training and conference request (TCR) form, whichever is applicable. All receipts must be attached or submitted electronically with the reimbursement form. A one time exception per year for one missing receipt may be allowed, with approval from the Finance Director. In the case of a missing receipt, the missing receipt form must be completed. If receipts are submitted electronically, the employee must keep the original receipts for a period of one month and be able to produce them upon request of the Finance Department. c. The invoice, disbursement claim form, employee reimbursement claim form, of the training and conference request (TCR) form must be reviewed by the appropriate manager (Section 1(B)) within the department for correct quantities, rates, product numbers, etc. and compared to the receiving documents and purchase order or contract.

d. The invoice or store receipt must be stamped with the accounts payable stamp provided by the Finance Department. It should be filled out entirely and should clearly indicate the fund/department, amount, project # (if applicable), description to be used by the Finance Department to enter into the accounting system. The proper level of management (Section 1(B)) within the department should then sign or initial on the appropriate blank indicating that the invoice is ready to be paid. Disbursement claim forms required the same signature requirements as invoices and employee reimbursement claim forms must be signed by the Department Director. Step 3 - Forwarding for payment a. The properly stamped and signed invoice, employee reimbursement claim form, training and conference request (TCR) form, or disbursement claim form should include some or all of the following attachments: i. Contractor payment form ii. Other documentation available such as contracts, correspondence, bid summaries, statements, quotes, etc. b. The above documents should be assembled and forwarded to the Finance Department by the required due dates (Section 1(C,D,E)). c. Certificates of Completion for public improvement contracts must be accepted by a separate action of the City Council prior to the approval of final payment and retainage release.

B. Check/EFT Issuance

1. Payment Processing Step 1 - Invoices with the proper paperwork and approvals will be entered into the

computer system for payment by the Finance Department on a daily basis. All requested payments received by the applicable due date will be processed.

Step 2 - Accounts payable checks will be printed two working days prior to the City Council meeting and held by the Finance Department until the meeting date. Step 3 - All checks will be signed by the City Clerk and the Mayor. The computer will sign the checks with digital signatures that are password protected. Actual signatures and signature stamps will be used only in situation where the digital signatures are unavailable. If stamped signatures are used, then only one of the two signatures may be a stamp. The remaining signature must be handwritten. Step 4 - Two claims lists of all checks/EFTs issued since the previous City Council meeting will be given to the City Clerk’s office. One list will be published in the local newspaper as prescribed by State law, and one will be provided to the City Council for approval The Finance Director will review all claims lists. Step 5 - Copies of each vendor check/EFT will be made. The invoice, receiving report, and/or other paperwork submitted as documentation will be attached to the check/EFT copy and electronically filed in the Finance Department. 2. Special checks/EFTs are payments that are processed outside of the normal check processing schedule. Special checks/EFTs may be permitted for the following reasons: a. In order to meet vendor due dates; b. Emergencies; c. Payments previously authorized by City Council; d. Postage;

e. Payroll taxes, benefit contributions, insurance premiums; f. To void and reissue previously authorized checks; and g. As approved by the City Manager or Finance Director

Unless listed above, all payments must be approved at a regular City Council meeting

3. Lost or stolen checks (void and reissuance) a. Payee must wait 30 days for replacement of a check. b. A stop payment is only required in cases where risk of loss is considered high or the check is for amount over $1,000 c. Replacement checks may only be requested by the payee listed on the original check. Requests for a replacement check must complete the Replacement Check Request form. 4. Outstanding checks a. A letter will be sent to the payee notifying them of the outstanding check after 90 days outstanding. b. If the payee responds, the old check will be voided and a new check issued to the payee, if necessary, during the next check run. c. Amounts owed to vendors from outstanding and voided checks will be turned over to the Treasurer of the State of Iowa as prescribed by law. SECTION 3 - VENDOR MANAGEMENT The IRS requires the City to issue a Form 1099 reporting certain payments made to individuals and/or organizations other than corporation, governmental agencies, and tax-exempt organizations. Whether a payment is reportable on Form 1099 depends upon the payment amount, payment type and the supplier’s business entity type. Reportable payments include, but are not limited to: independent contractor services, consultant services, professional services (e.g., accounting and legal services), medical services (e.g., lab tests, physician services, billing/collection), commissions to non-employees, rent royalties, copyright payments, prizes and awards to non-employees, honoraria to non-employees, etc., as specified in IRS rules. The IRS allows for an exception to the requirement of producing a Form 1099 for most payments if the supplier’s business type is a corporation (as verified by Form W-9). This is called the “corporate exception.” However, the corporate exception never applies to suppliers that provide medical and legal services. Medical services include: Ambulatory services such as medical technician services, nursing services, physician treatment/care, therapy (all types), lab exams, consultations, billing and collections, but excludes prescriptions.

Guidelines The City is responsible for monitoring compliance with applicable IRS 1099 rules for all vendors. Effective July 1, 2017, all new individuals or businesses wishing to become a vendor of the City, will be required to submit a completed IRS W-9 form and a Vendor Registration Form prior to any payments being generated. These forms provide the City with verifiable tax identification numbers and addresses as required by the IRS. Without these forms, Accounts payable will be unable to process the payment.

The only exception to the above requirement is for reimbursements/refunds. If we are issuing payment for any type of customer refund or reimbursement,etc. No W-9 is needed.

For existing vendors in the City’s payables system, the Finance Department is actively pursuing each vendor to obtain current information as payment requests come in, if a W-9 is not already on file. Any vendors that have not been used in the prior three fiscal years will be inactivated in the system. In order to reactivate, all vendor forms will be required. All W-9 forms received will be filed in vendor number order in a locked filing cabinet. Once a W-9 for a specific vendor has been received, there is no need to request a second one for services at a later date, unless the business changes name or restructures. Once the Finance Department receives the W-9, they will use the IRS TIN matching service to verify the accuracy of the W-9 Name/TIN combination. If no record is found using this process, the city will consider the Name/TIN combination to be incorrect. The APPENDIX includes flow charts of the procedures for handling a Name/TIN combination that is incorrect and from letters that will be used to notify vendors. If a TIN/Name combination is not accomplished by using the flowcharts, a First B Notice will be sent to the vendor for completion.

If a TIN/Name combination is not found, backup withholding and related reporting will begin until proper TIN information is provided.

SECTION 4 - REFUNDS Refunds will only be issued on credit balances greater than $5.00, unless specifically requested by the customer. Refunds for any operation within the City shall never be made in cash directly from a department to the customer. All refunds shall be processed through the Finance Department based on proper

documentation presented to the Finance Department by the Department requesting the refund. That documentation shall include the following: 1. A copy of the contact information for the person receiving the refund including: a. Phone number b. Address c. City, State, Zip 2. Written proof of the original transaction which could be the original receipt given at the time of purchase 3. Written authorization from the Department Manager authorizing the refund to be given.

FINANCIAL POLICY AND PROCEDURES MANUAL

Title: FINANCIAL POLICY

Date of Version: 10/16/2017

Section: BUDGET CARRYOVER POLICY

Resolution No.: 5700

SECTION 1 - POLICIES

A. All appropriations carried forward from one fiscal year to the next fiscal year must be approved by the City Manager. B. The appropriation must be for an item or service specifically listed in the requesting department’s budget. Appropriations for regular and ordinary operating expenditures may not be carried forward. Purchases of items and services not listed in the requesting department’s budget are not eligible for carryover. C. The amount of the appropriation may not cause the requesting Department's ending budget to exceed 95% YTD balance. If a requesting department has exceeded the 95% YTD balance, the request shall be denied. D. All appropriations to be carried forward are contingent upon adequate and available resources and fund balance. E. Invoices and payments to vendors should not be manipulated, delayed, postponed, split, prepaid, incorrectly billed, or otherwise in order to manipulate and control budget expenditures.

F. The spend down of budget appropriations at fiscal year end should be avoided in order to prevent problem in cash flow, budget monitoring, and potentially wasteful spending.

SECTION 2 - PROCEDURES

The following procedures should be completed within 5 days after the second Council meeting in June:

A. A memo requesting budget appropriations to be carried forward to the next year should be submitted to the Finance Department. The memo should include a list of all

appropriations to be carried forward by the department, the activity and account they are budgeted in, and the justification for carrying the items forward. B. The Finance Director will review the requests to determine if the items qualify for carry forward and if funds are available to cover the expenditures. C. The Finance Director will summarize the requests along with recommendation for approval or denial to the City Manager. D. The City Manager will approve or deny the carry forward requests and return the results to the Finance Director. Each requesting department will then receive a notice of the result of their requests. E. New fiscal year budgets will then be modified to include the appropriate amounts carried forward and will be included in the revised budgets during the budget process.

FINANCIAL POLICY AND PROCEDURES MANUAL

Title: FINANCIAL POLICY

Date of Version: 10/16/2017

Section: CASH/CHECK RECEIPT POLICY

Resolution No.: 5700

SECTION 1 - POLICIES 1. All receipts shall be entered into the cash register or cash box at the time of receipt and a receipt shall be issued to the customer as that time. 2. All cash and checks received must be deposited the same day or if received after the daily deposit, must be held in a safe overnight and deposited the following day. 3. Payments in any form other than cash (personal check or credit card) require that the cashier request personal identification from the customer such as a driver’s license. 4. A sign must be displayed notifying customers of the City’s returned check fee. 5. All checks must be made out to the City of Spencer. Checks not issued to the City shall not be signed over as payment. 6. Checks written to the City shall not be written for an amount greater than what is owed. Checks should be restrictively endorsed upon receipt. 7. No post dated checks will be accepted. 8. Employees are not allowed to record transactions between the City and themselves. Another employee must receive the payment and tender the employee a receipt. Employees are expected to pay for all concessions, merchandise, etc. 9. Cash shall not be loaned to any employee or any customer. 10. No purchases of any kind may be made with starting cash or with collected monies. Purchases must follow the purchasing policy and petty cash policy. 11. All $100 and $50 bills will be checked with a Counterfeit Detector Pen . Any other suspected bills shall also be checked. If counterfeit bills are detected, the employee is directed to accept the bills and notify their department head immediately after the customer has left the facility.

SECTION 2 - PROCEDURES 1. Deposits

a. The cash registers/cash boxes must be reconciled and balanced and the funds must be deposited in their entirety at the designated institution, pursuant to the schedule outlined in Section 2, subsection 2 of this policy. b. The daily deposit must be brought to the Finance Department for recording and depositing or should be deposited at the appropriate institution with the proper paperwork being forwarded to the Finance Department, whichever arrangements have been established. All night deposits should be done by two people for safety. c. Reconciliation forms, daily cash register tapes, and other deposit or reconciliation documentation should be forwarded to the Finance Department daily or as arranged. d. Daily, monthly and annual records must be kept regarding the department's financial activity such as receipt copies, deposit ticket duplicates, register tapes, or other documentation as necessary. Receipt numbers must be sequential and accounted for. e. The Finance Department shall post the daily receipts to the accounting system unless other arrangements have been made. Daily deposit shall be completed no later than 3:00 pm daily to ensure that the batch can be closed and finance charges can be applied in the Accounts Receivable system in a timely manner. 2. Deposit Schedule a. Deposits shall be reconciled and deposited daily for all departments with the following exceptions: i. Police Department - Deposits shall be made not less frequently than bi-weekly. ii. Library - Deposits shall be made not less frequently than bi-weekly. iii. Northern Plains Regional Landfill - Deposits shall be made not less frequently than weekly. iv. Campground - Deposits shall be made not less frequently than weekly.

b. Deposits shall be delivered to City Hall by 9:00 AM, except for the Aquatic Center and Golf Course.

c. Deposits for the Golf Course and Aquatic Center shall be deposited at the City’s Financial Institution at the end of each day of business. The deposit bag should include a completed bank deposit slip. Each department will be responsible for delivery to City Hall a deposit reconciliation form, detailing the budget line items to receipt the deposit to. The Bank shall deliver the City’s copy of the bank deposit slip to City Hall for deposit reconciliation.

3. Starting Cash a. Beginning cash or change shall be established by the Finance Department. The cashier should count and verify starting cash every morning. This amount should be reconciled,with the excess being deposited daily. b. Cash is not to be removed from a deposit or derived from any other source in order to increase starting cash or change. c. Additional starting cash or cash reserves must be requested through the Finance Department. d. Seasonal activities should return starting cash amounts to the Finance Department at the end of each season and request starting cash at the beginning of each season.

e. Starting Cash amounts shall be as follows: i.

Municipal Golf Course - 2 Cash Drawers valued at $680.50

ii.

Campground - 1 Cash Drawer valued at $50.00

iii. iv.

Spencer Public Library - 1 Cash Drawer valued at $200.00

Spencer Police Department - 1 Cash Drawer valued at $300.00 v. Spencer City Hall - 1 Cash Drawer valued at $50.00 vi. Spencer Aquatic Center - 2 Cash Drawer valued at $350.00 vii. Solid Waste Transfer Station - 1 Cash Drawer valued at $150.00 viii. Northern Plains Regional Landfill - 1 Cash Drawer valued at $300.00

FINANCIAL POLICY AND PROCEDURES MANUAL

Title: FINANCIAL POLICY Date of Version: 10/16/2017 Section: CHECK ACCEPTANCE & RETURNED CHECKS Resolution No.: 5700

SECTION 1 - POLICIES 1. A sign must be displayed at the usual place of payment notifying the customers of the City’s returned check fee. The City’s returned check fee is $25.00 and is allowable per the Code of Iowa Section 554.3512. However, if the maker of the check stops payment, the fee will not be assessed. 2. Each department will contact and collect all monies owed for returned checks. All customers should be referred to the applicable department for replacement of a returned check. 3. If a check is returned for any reason, the customer shall replace the check by cash, debit card or credit card only. A returned check may not be replaced by another check. 4. Business shall not be conducted with an individual or business that has outstanding returned checks with the City until those checks have been replaced. 5. When a customer has previously presented the City a returned check and the check has subsequently been replaced, it will not preclude the City of conducting business with the customer in the future. However, the City is not under any obligation to accept checks from that customer. The department and the Finance Director should take into consideration the customer’s payment history, the nature of the previous returned transaction and the type of business being conducted. 6. Returned check fees apply to checks and ACH/electronic payments. SECTION 2 - PROCEDURES 1. The $25 returned check fee will be assessed at the time the check is returned. 2. When a personal check is presented to the City, the cashier must request personal identification from the customer such as a driver’s license.

3. When the check is returned from the bank for insufficient funds, the applicable department may attempt to collect the check by contacting the customer. 4. If the customer doesn't replace the returned check within 10 days following contact, the check and all supporting evidence may be turned over to the City Attorney for collection procedures.

FINANCIAL POLICY AND PROCEDURES MANUAL

Title: FINANCIAL POLICY

Date of Version: 10/16/2017

Section: CREDIT CARD & CHARGE ON ACCOUNT

Resolution No.: 5700

SECTION 1 - CREDIT CARD POLICIES & PROCEDURES 1. Credit Card numbers shall not be retained within any Spencer electronic cash handling, email or management system at any time. This means that each time the customer shall desire to make payment by credit card they shall physically present the card to a customer service representative. 2. No payments shall be accepted over the telephone to prevent fraudulent use. If a customer is not present and wants to pay remotely, they may do so by utilizing the Credit Card Authorization form and return it via fax. 3. The City shall not provide cash back for debit card transactions. 4. Any refunds to a transaction that was originally made by credit card shall only be made through a refund check issued by the City’s Finance Department through the Accounts Payable procedure, or through the same credit card that was charged, provided all policies and regulations of the card company are made. 5. Credit Card transaction receipts and the end of day reconciliation batch report shall be submitted along with the deposit record to City Hall. SECTION 2 - CHARGE ON ACCOUNT POLICIES & PROCEDURES 1. Before credit is extended to any business customer, they shall first complete a Business Credit Application. 2. At the discretion of the City, a customer may be required to establish a payment history with the City by using city facilities regularly for ninety (90) days on a cash basis prior to being granted credit. 3. The City will only allow Charge Accounts for customers of the Transfer Station and Northern Plains Regional Landfill. No other department may extend a line of credit to any customer.

4. Minimum charges: a. At the Transfer Station, there shall be a minimum charge of 1 C.Y. or the actual amount of debris brought to the Transfer Station, whichever is greater. For customers wanting the charge the disposal of appliances, tires, furniture, carpet, other white goods or Electronic Waste, there shall be a minimum charge of $15, or the actual disposal fees, whichever is greater. The minimum charge applies per transaction ticket. Transactions on separate visits shall not be combined to avoid being assessed a minimum charge. b. At the Northern Plains Regional Landfill, the minimum charge shall be equal to the fee for disposing of 1-ton of material, or the actual cost of disposal, whichever is greater.

FINANCIAL POLICY AND PROCEDURES MANUAL

Title: FINANCIAL POLICY

Date of Version: 10/16/2017

Section: RECORDS RETENTION - FINANCIAL

Resolution No.: 5700

SECTION 1 - PURPOSE

State law does not specify retention policies for local government records, however, the Code of Iowa, Chapter 372.13(5) does set minimum record retention periods for certain municipal records. Per Iowa Code, general city records, or accurate reproductions should be kept a minimum of five (5) years, eleven (11) years following the final maturity of bond obligations, and permanent retention of ordinances, resolutions, council proceedings, and real property transactions. Chapter 372.13(5) also authorizes the retention of documents or accurate reproductions from electronic or other forms of retention.. Chapter 622.30 authorizes electronic reproduction and destruction of original documents as admissible documents in court. The City of Spencer adopted its overall Records Retention Manual on October 17, 2016 by Resolution 5558. The City has adopted the Record Rection Manual for Iowa Cities (Created by the Iowa League of Cities, State Historical Society of Iowa’s State Archives and Records Bureau and Iowa Municipal Finance Officers Association) as it’s offical retention policy. While the full policy addresses several types of City records, this policy pertains just to those records that are of a financial background and is a subset of the overall city adopted policy.

SECTION 2 - RESPONSIBILITIES

The Finance Director shall be responsible for the implementation of this policy and shall sign off on any destruction of documents that are covered by the schedule that is set forth in the Policy.

SECTION 3 - RETENTION SCHEDULE

The following retention schedule is adopted for Finance Department Records and/or those records created by another Department that have a financial nature.

Record Title

Retention Period

Reason

I. Finance / Purchasing Records A. Leases

1. Agreements and Related Documents Acted on by Council

Upon expiration, 5-year minimum

Administrative value ends

2. Agreements not

5 years after expiration, 5-year minimum Administrative value ends

Requiring Council Action

B. Bids, Quotes, Proposals 1. Official Copy, Bid/Proposal RFP

10 years after the completion of contract Administrative value ends

2. Copies of Bids Received and Related Documents for Public Improvement Projects and Acted on by Council 3. Copies of Bids Received and Related Documents 4. Copies of Bids Received and Related Documents for Other Equipment and Service Projects Acted on by Council 5. Originals of Bids, Quotes and Proposals Received for Contracts Not Awarded by Council for Fleet Equipment Acted on by Council A. Notice of Property Tax Allocation from County B. Notice of Liquor Tax Allocations from State C. Property Tax Assessment Books D. Investments (Notice of interest earned or reports

10 years after completion of contract; accepted bids retained permanently

Administrative value ends; continuing administrative value

Lifetime of equipment; unaccepted bids: 1 year after acceptance of winning bid

Administrative value ends

10 years after completion of contract; unaccepted bids: 1 year after acceptance of winning bid

Administrative value ends

10 years after completion of contract except: fleet equipment and buses; lifetime of equipment and other capital equipment; 10 years after completion of contract or upon expiration of warranty, whichever is more

Administrative, grant and warranty issues are active until equipment is taken out of service

II. Revenue

5 years

Fiscal value ends

5 years

Fiscal value ends

Permanent

Continuing historical value

5 years

Fiscal value ends

of growth, dividends, purchase, sales, etc.)

Record Title

Retention Period

Reason

E. Road Use Tax Funds 1. Application for

5 years

Fiscal value ends

Financial Aid (Forms 230001, 230002, agreement, invoices, payment vouchers, certificate of audit) 2. Annual Street Finance Report 3. Street Construction

5 years

Fiscal year ends

5 years

Fiscal value ends

Program (Form RUT 1-A, 220001, 220002)

4. Aerial Street Maps

Permanent

Continuing historical value

F. Claims for State Sales Tax 5 years G. Claims for State Fuel Tax 5 years

Fiscal value ends Fiscal value ends

H. Special Assessments 1. Certified Mail stubs

5 years after final payment

Fiscal and legal value ends

from Notice to Property Owners

2. Assessment Title Searches

5 years

Fiscal and legal value ends

3. Preliminary and Final Assessment Schedules 4. Petition and Waiver (agreements to special assessments)

5 years after final payment

Fiscal and legal value ends

5 years after final payment

Fiscal and legal value ends

5. Assessment Plats

5 years after final payment 5 years after final payment

Fiscal and legal value ends Fiscal and legal value ends

6. Certificate of Levy and Final Assessment

I. Bond Issues and Proceedings

1. Bond Certificates 2. Redeemed Coupons

5 years after final recall 5 years after final recall

Fiscal value ends Fiscal value ends

3. Bond Register

Permanent

Code of Iowa , 372.13(5). Also continuing administrative, legal and historical value

Record Title

Retention Period

Reason

4. Proceedings (notice and call of public meeting, minutes and certificate of meeting, certificate of referendum, legal opinions) 5. Remittance Advice Received with Payments Improvement Projects (applications, contracts, accounting and banking records, payroll, EEO compliance records) A. Source Documents 1. Accounts Payable a. Requisitions b. Invoices, statements, bills c. Claims presented to Council d. Check/warrant copies or stubs J. Records of Federally Funded Public

Premenanent

Code of Iowa , 372.13(5). Also continuing administrative, legal and historical value.

5 years

Fiscal value ends

5 years after final payment, if audited

Fiscal value ends

III. Accounting

5 years 5 years

Fiscal value ends Fiscal value ends

5 years

Fiscal value ends

5 years

Fiscal value ends

5 years

Fiscal value ends

e. Vendor history

2. Accounts Receivable a. Receipt copies or books 5 years

Fiscal value ends Fiscal value ends

5 years

b. Daily cash receipt tabulation (cash register tapes, tallies, etc.) c. Invoices, statements, bills

5 years

Fiscal value ends

5 years

Fiscal value ends

d. Customer history

Record Title

Retention Period

Reason

B. Books of Original Entry 1. Receipt Journal 2. Disbursement Journal

10 years 10 years 10 years

Fiscal value ends Fiscal value ends Fiscal value ends Fiscal value ends

3. General Journal

4. Appropriations Journal 10 years

C. Ledgers

1. General Ledger

Permanent

Continuing fiscal value

2. Subsidiary Revenue Ledger Cards

10 years

Fiscal value ends

3. Subsidiary

10 years

Fiscal value ends

Appropriation/Expendi ture Cards

IV. Banking

A. Checking Account Statements

5 years

Fiscal value ends

B. Check/Warrant Register (same as Disbursement Journal above)

10 years

Fiscal value ends

C. Cancelled

5 years

Fiscal value ends

Checks/Warrants

D. Savings Account Statements E. Reconciliation Worksheets

5 years

Fiscal value ends

5 years

Fiscal value ends

V. Financial Reports A. Annual Financial Report Permanent

Continuing fiscal value

B. Treasurer’s/Clerk’s Report

5 years

Fiscal value ends

C. Sales Tand and Use Tax Reports

5 years

Fiscal value ends

D. Grant Reports

5 years after audit; 7 years if not audited; grant terms it not stated therein

Fiscal value ends

VI. Audits

Permanent

Continuing fiscal value

Record Title

Retention Period

Reason

VII. Budget

A. Appropriation Requests from Department B. Annual budget forms C. Final budget and Certificate Summary D. Budget Amendments

5 years

Fiscal value ends

5 eyars

Fiscal value ends

Permanent

Continuing fiscal and historical value

Permanent

Continuing fiscal and historical value

VIII. Tax Increment Financing A. Annual Urban Renewal Report B. Annual TIF Certifications to County Auditor C. Urban Renewal Plan (including amendments)

Permanent

Continuing fiscal and historical value

Permanent

Continuing fiscal and historical value

IX. Payroll

A. Payroll Journal (shows name, SSN, earning, deductions, net pay / period and yearly totals)

60 years

Fiscal value ends (satisfies long-term need for future salary and pension inquires)

B. Payroll Support Documents

5 years

Fiscal value ends

C. Federal Reporting Forms 1. W-2, W-3, W-4

5 years

Fiscal value ends Fiscal value ends Fiscal value ends Fiscal value ends

2. 941E Quarterly Report 5 years

3. Copy of Deposit Card

5 years 5 years

4. 1099,1096

D. State Reporting Forms 1. Withholding Agents Reports 2. Job Service Report

5 years

Fiscal value ends

5 years 5 years 5 years 5 years

Fiscal value ends Fiscal value ends Fiscal value ends Fiscal value ends

3. Copy of Deposit Card

4. IPERS

5. MFPRSI

E. Individual Employee File 1. Job Description and History

Permanent

Continuing historical value

Record Title

Retention Period

Reason

2. Application and Resume 3. Civil Service Test, Scores, Placement

60 years

Administrative value ends (satisfies long-term need for future inquiries)

60 years

Administrative value ends

4. Evaluations, Discipline, Demotion, Promotion, Awards 5. Continuing Education 6. Medical Information (separate file) 7. Resignation, Reasons for Leaving

60 years

Administrative value ends

60 years 60 years

Administrative value ends Administrative value ends

60 years

Administrative value ends

8. Claim for IPERS 9. Unemployment Insurance Claims 10. Garnishments

60 years 5 years

Administrative value ends

Fiscal value ends

Through closure plus 1 year

Fiscal value ends

11. Enrollment for Direct Deposit, Insurance, Etc.

While current

Administrative value ends

F. Health Insurance

Payments, Claims 1. Employer’s Report

5 years 5 years

Administrative and fiscal value ends Administrative and fiscal value ends Code of Iowa, 85.26. Legal value ends

2. OSHA Report

3. Worker’s Compensation Reports

2 years from date of occurrence which benefits are claimed or 3 years from last payment of weekly compensation benefits

X. Capital Projects

A. Construction Phase 1. Work Orders

5 years after project completed, if audited 5 years after project completed, if audited 5 years after project completed, if audited 5 years after project completed, if audited 5 years after project completed, if audited

Administrative and fiscal value ends

2. Payroll Records

Administrative and fiscal value ends

3. Change Orders

Administrative and fiscal value ends

4. Cement of other Purchases 5. Pay Requests

Administrative and fiscal value ends

Administrative and fiscal value ends

FINANCIAL POLICY AND PROCEDURES MANUAL

Title: FINANCIAL POLICY Section: FIXED ASSET POLICY

Date of Version: 10/16/2017

Resolution No.: 5700

SECTION 1 - POLICIES 1. For an asset to be capitalized (recorded and depreciated), its cost must exceed certain cost thresholds. An asset's cost includes any cost involved with the purchase of the asset and readying the asset for use, except consultant fees, and parts received 30 days after vehicle is received (ex. Tool box, etc). Capitalization thresholds are set as follows:

Vehicles and equipment Land and right-of-way 0 Land and building improvements 25,000 Buildings 25,000 Infrastructure 50,000 $5,000

In addition, the asset must be tangible in nature and have a useful life of three or more years. Certain improvements will only be capitalized if they improve or significantly alter the use, value, or useful life of the asset. The threshold for insurance coverage is $2,500 for all assets except land and right-of-way ($0) 2. A current inventory ledger of capitalized assets will be maintained by the Finance Department that will include depreciation, cost and useful life. 3. All departments are responsible for the custody, safekeeping, and maintenance of the assets belonging to their department. The Finance Department will be responsible for and maintain adequate insurance coverage. The City Clerk’s Office will be responsible for and maintain title security and license plate records. 4. All City vehicles and equipment will be assigned an equipment number by the Central Garage. 5. Any disposals, trade-ins, sales, or transfers of any assets should be identified by serial number, make, model ot other and reported to the Finance Department. Disposals of fixed assets will be made in accordance with the Code of Iowa.

6. The Finance Department will periodically select assets at random from the ledger to be inspected and will periodically select assets from a department to trace in order to ensure the accuracy and completeness of the ledger. SECTION 2 - PROCEDURES 1. Fixed assets should be acquired in accordance with the City’s purchasing policies and the following steps: a. The department making the purchase should complete a Vehicle/Equipment Record form which should include the model number, serial number, manufacturer, and any other information such as color, size, weight, etc. that will help identify the asset. The form should be submitted to the designated fixed asset manager in the Finance Department. b. After receiving the proper paperwork, the Finance Department will assign a budget code to the asset which will direct where the asset’s operating expenses will be charged. For assets that require insurance coverage, the Finance Department will make arrangements for coverage to be started prior to placing the asset into service. c. For vehicles, equipment, and other assets that are maintained through the Central Garage, the asset should be directed to the Central Garage prior to being placed into service for numbering, decals and lettering, and other field preparation work. The Central Garage will assign the asset a vehicle/equipment number. d. For assets that require title recording, license plates, copies of the acquisition paperwork along with the title transfer documents and other relevant documentation should be forwarded to the City Clerk’s office prior to placing the asset into service. 2. The disposal of all fixed assets should be conducted in accordance with City policies, and the Code of Iowa. For detailed steps on disposing of property, please refer to the City’s Surplus Property Disposal Policy . 3. Asset transfers between department should be conducted using the steps outlined in the City’s Surplus Property Disposal Policy.

FINANCIAL POLICY AND PROCEDURES MANUAL

Title: FINANCIAL POLICY Section: GENERAL POLICIES

Date of Version: 10/16/2017

Resolution No.: 5700

SECTION 1 - GENERAL PURPOSE

It is the expectation and the general understanding of the City Council and the citizens of Spencer that the City conducts its financial affairs in a thoughtful and prudent manner. The following financial policies are established to provide direction and limits within which the City is to fulfill its fiscal responsibilities. The policies are presented in the following categories: revenue policies, operating expenditure policies, reserves and contingencies, capital improvements planning, debt management policies, and financial reporting, and accounting.

SECTION 2 - REVENUE POLICIES

Generally, the City of Spencer’s revenue policies are meant to furnish guidelines for determining the revenues necessary to provide basic municipal services to the community. To guard against the possibility of wide variations in any of its revenue sources, a primary goal of the City is to maintain a diversified, yet consistent revenue stream. An important factor in the City’s ability to preserve a strong, uniform revenue stream is the diversity and growth of its tax base, which is largely dependent on the vitality of the area’s economy. Thus, the City resolutely encourages economic development through the implementation of financial policies that create a favorable tax climate, while meeting service demands of businesses and residents. General Revenue Policies A. A diversified, yet stable, revenue system will be employed to protect the City from possible short-term fluctuations in any of its revenue sources. B. A continuous effort will be made to obtain new revenue sources in order to maintain a balanced budget and to reduce the reliance on property tax as a major source of funding. C. Through community and economic development, a broader tax base will be pursued to increase tax revenue and help reduce annual fluctuation in the property tax rate.

Property Taxes A. In order to provide stability and consistency, the property tax levy should remain unchanged unless determined necessary through an annual review. B. The City’s total levy rate shall be reviewed annually and evaluated using the fundamental underlying conditions, economic conditions, service level changes, State or Federal mandates or any other changes that affect the City’s ability to provide basic City services or maintain sufficient cash reserves. The increase or decrease in the total levy rate shall not exceed the cumulative effect of the underlying changes. These changes shall be quantified and documented. The City creates urban renewal districts to: A. Respond to an individual capital project or capital projects within designated areas: B. Support investment in an area believed to have development potential; C. Promote neighborhood revitalization; D. Generate money for infrastructure incentives to leverage community growth; E. Finance infrastructure construction and repair; F. To provide economic development grants as incentives for businesses to locate to or expand within the community; and G. Distribute the cost of local development incentives among the various taxing units benefiting from a long-term increase in property tax revenues. Urban Renewal - Tax Increment Financing Policy Purpose

Guidelines

The City shall adhere to Chapter 403 of the Code of Iowa, in the creation of urban renewal plans and subsequent implementation of those plans. The powers granted in this chapter constitute the performance of essential public purposes for the State of Iowa and the City of Spencer. The powers conferred by this chapter are for public uses and purposes for which public money may be expended and for which the power of eminent domain and police power may be exercised;

and that the necessity in the public interest for these provisions is declared as a matter of legislative determination.

The assessed value of property within each urban renewal district, which is subject to a division of revenue from taxation - tax increment financing (TIF), is determined by the Clay County Assessor each year. The City uses TIF to leverage economic activity, offset taxpayer burden, build public improvements, incentivise job creation, and finance public investment in infrastructure deemed necessary for community growth. Process A. Notify all affected taxing jurisdictions 30 days prior to filing certification with the Clay County Auditor. The amount of value reservation required for the next fiscal year is due annually by December 1st. And, upon written request from a taxing jurisdiction, meet and confer with that jurisdiction on the intended reservation. B. Taxable valuation reservation will be based upon the debt and contractual obligations certified with the Clay County Auditor. C. Prepare and distribute exhibits, including formulas and calculations of TIF dollars. Restrictions A. Distribution of Incremental Property Taxes No less than 40% of the incremental value from all urban renewal districts combined will continue to be release to all taxing jurisdictions. B. Sunsets The City establishes sunset dates for all TIF districts as provided in Chapter 403.17(10), Code of Iowa, as follows: in an urban renewal area designated an economic development area in which no part contains slum or blighted conditions, the plan shall be limited to twenty years from the calendar year following the calendar year in which the city first certifies to the county auditor the amount of any loans, advances, indebtedness, or bonds which qualify for payment form the division of revenue provided in the Code of Iowa, Chapter 403.19. C. Powers of Municipality The City shall have all the powers necessary or convenient to carry out and effectuate the purposes and provisions of Chapter 403.6 and the additional powers granted in Chapter 403.12 of the Code of Iowa.

D. Fluctuation/Reserves Tax increment reserves will be established to help offset major fluctuations in the reservation requirements. Funds held in reserves will be specifically identified and held for a future debt or contractual obligation. Municipal Enterprises A. User charges and fees will be established at a minimum level sufficient to cover all costs of providing the service, including operating, debt service, capital and replacement expenses. B. At least every three years, user fees and charges should be reviewed. When necessary, user fees and charges should be re-calculated and revised to reflect the actual cost of activities. C. All utilities, including sewer, solid waste, and landfill enterprise programs, should be fully self-supported through user fees or charges. Federal & State Assistance All available funding from federal and state sources will be pursued to finance appropriate programs, services and capital improvements projects, including those mandated by statute. Operating expenditures must meet the City’s requirements to provide services, within the framework of available revenues. Fiscal control and long range financial planning is necessary to guarantee that the City’s current and future finances remain sound. The following operating expenditure policies guide the evaluation and control of the City’s appropriations and expenditures. General Policies A. For all business enterprises, expenditure projections for a five year period will be developed on an annual basis. Projections should include estimates of anticipated operating costs for programmed capital improvement projects, equipment and capital facilities replacement and maintenance schedule. B. Current expenditures should be paid with current revenues or excess cash reserves. SECTION 3 - OPERATING EXPENDITURE POLICIES