Fiscal planning is the process of identifying resources and allocating them among numerous and complex competing purposes. The primary vehicle for this planning is the preparation, monitoring, and analysis of the budget — incorporating a long-term perspective and monitoring the performance of the programs competing to receive funding.

The City Manager will submit to the Council a proposed annual budget, based on Council's established goals, and will execute the budget as finally adopted, pursuant to Title 42, Chapter 17, Article 3, Section 17105 of the Arizona Revised Statutes, as amended.

1. Revenue and expenditure forecasts will be prepared annually and will include a Five-Year Forecast for each major operating fund (General Fund, Enterprise Funds, and certain Special Revenue Funds), prepared at the start of the operating budget process to (1) provide a long-term view of current-year budget decisions and (2) estimate fund balance and its sensitivity to revenue and expenditure changes over the forecast period.
   • The budget will be balanced, by fund, when all projected ongoing revenue sources exceed all ongoing expenses proposed for the current and upcoming fiscal year. Use of the unassigned fund balance will occur only as authorized by Council and to address one-time costs, not ongoing costs or planned utilization of fund balance.
   • Revenues will not be dedicated for specific purposes unless approved by Council or required by law. All non-restricted revenues will be deposited in the General Fund and appropriated through the annual budget process.
2. To ensure ongoing General Fund stability, the primary property tax levy will be evaluated each year to determine where it should be set.
3. Any proposed new service or program initiative will be developed to reflect current Council policy directives and considered in the context of balancing ongoing anticipated revenues against ongoing anticipated expenses, following all related Council Financial Policies.
4. All grant programs and any programs supplemented by outside funding will include a sunset provision consistent with the projected end of funding. Personnel paid with these funds will be considered temporary with no certainty of continued employment beyond the life of the funding unless otherwise approved by Council. Equipment and technology purchases with these funds are subject to the policies for replacement funds.
5. The City Manager's recommended budget presented to Council will contain, at a minimum:
   • Revenue projections by major category, by fund;
   • Expenditure projections by program level and major expenditure category, by fund, including support provided to or received from other funds;
   • Debt service principal and interest amounts;
   • Proposed inter-fund transfers;
   • Projected fund balance by fund;
   • Proposed personnel staffing levels;
   • Detailed schedule of capital projects;
   • Any additional information, data, or analysis requested by Council.
6. The operating budget will be based on the principle that current ongoing operating expenditures, including debt service and support for other funds, will be funded with current ongoing revenues. The enterprise funds (water/sewer, solid waste, and landfill) and the transportation sales tax fund will pay the indirect cost charges for services provided by other funds. Additional funds may be added upon Council approval.
7. The budget will not use one-time (non-recurring) sources to fund continuing (recurring) expenditures.
8. Addition of personnel will be requested only to meet existing program initiatives and policy directives after service needs have been thoroughly examined, and only if increased net ongoing revenue is substantiated.
9. The Budget and Finance Department and Human Resources Department will work together to manage position control. The number of full-time and regular part-time employees on the payroll will not exceed the total number of full-time equivalent positions that Council authorizes and adopts with the annual budget.
10. Benefits and compensation will be administered in accordance with Council policy direction.
    • Total compensation will be evaluated periodically for competitiveness.
    • A cost containment strategy means total costs for health insurance premiums will be shared between the employer, employees, and retirees. Total premiums will be evaluated annually to ensure they are reasonable, competitive, and expected to address anticipated claims plus maintenance of an adequate reserve for the Employee Benefits Fund, based on an annual actuarial report and its 75% confidence funding level recommendation.
    • A policy will be developed regarding continuation of retiree health insurance after a comprehensive evaluation of the impact of GASB 67 and presentation of results to Council.
11. Ideas for improving the efficiency and effectiveness of the city's programs and the productivity of its employees will be considered during the budget process.
12. Carryover of unspent appropriation from one fiscal year to the next is not automatic. Budget and Finance Department staff will evaluate carryover requests and make recommendations to the City Manager; recommended requests will be included in the City Manager's budget presented to Council.
13. Salary savings will be retained to the greatest extent possible to build fund balance. Salary savings may be used for expenses upon the City Manager or designee's approval if within the same fund/department, or between funds/departments upon Council approval within the last three months of the fiscal year.
14. Total fund appropriation changes must be approved by Council. These changes must also comply with the city's Alternative Expenditure Limitation in accordance with Article IX, Section 20, Constitution of Arizona and A.R.S. § 41-563, where final budget adoption sets the maximum allowable appropriation for the upcoming fiscal year.
15. The replacement of General Fund capital equipment and related support for technology, vehicles, and telephonic equipment (except cell phones) will be accomplished through a "rental rate structure" revised annually as part of the annual budget process.
    • Any equipment purchased with grant funding will be considered for ongoing replacement and replacement premium funding only if specifically authorized by the City Manager and noted in the budget submittal.
    • Ongoing replacement costs for new technology and vehicle purchases will be incorporated into the upcoming fiscal year's rental rate structure regardless of whether initially purchased through a lease or pay-as-you-go funding.
    • Replacements will be based on equipment lifecycle analyses by the Public Works Department for City vehicles, or the Budget and Finance Department for technology and telephonic systems.
16. The City Council supports economic development objectives that support the creation and retention of quality jobs (25% greater than the median average wage in Maricopa County), add revenue, and enhance the quality of life in Glendale. City Council will consider incentives when circumstances of the economic development opportunity warrant them necessary and appropriate, and in the best interest of the city.

Purpose & Restrictions. This policy implements an effective and efficient process by which the adopted City budget may be amended. Throughout the fiscal year, amendments are necessary to address new issues, increased prices, changes in scope of existing projects, and unforeseen issues affecting City operations. It applies to all cash and budget appropriation transfers initiated by the Mayor and City Council, the City Manager's Office, and/or departments; the Budget and Finance Department processes budget amendments in the financial management system following appropriate authorization.

Article VI, Section 11 of the City Charter establishes the legal restriction for budget appropriation transfers: "The city manager may at any time transfer any unencumbered appropriation balance or portion thereof between general classifications of expenditures within an office, department or agency. At the request of the city manager and within the last three months of the fiscal year, the council may by ordinance transfer any unencumbered appropriation balance or portion thereof from one office, department or agency to another."

Policy.

• Cash Transfers — between funds can only be authorized by Council in the last three months of the fiscal year.
• Cash & Appropriation Transfers Between Funds — can only be authorized by Council in the last three months of the fiscal year.
• Appropriation Transfers
  • Between Funds — can only be authorized by Council approval in the last three months of the fiscal year.
  • Between Departments — can only be authorized by Council approval in the last three months of the fiscal year.
  • Within the Same Fund, Within the Same Department — can be authorized by City Manager approval throughout the fiscal year.
  • Between Capital Improvement Projects — between departments, only by Council approval in the last three months of the fiscal year; within the same department and fund, by City Manager approval throughout the fiscal year.
• Restricted Fund Transfers — cash and/or appropriation transfers into and out of restricted funds can only be authorized by Council approval, and only within the intent of the restricted funds. Council must be provided justification that the transfer is consistent with restricted fund purposes, assurance it has been legally reviewed by the City Attorney, and assurance it meets this transfer policy's restrictions.
• Contingency & Miscellaneous Grant Appropriation Transfers — not specific to any particular department: Contingency transfers can be authorized by Council throughout the fiscal year; Miscellaneous Grant appropriation transfers can be authorized by the City Manager throughout the fiscal year.
• Approval of Expenditures in Excess of Budget Appropriations — in emergency situations requiring a transfer before formal Council approval is possible, the Budget and Finance Department will advise the City Manager of the emergency condition and request approval, then seek Council ratification at the first possible Council meeting.

Management will ensure compliance with the City Council adopted budget.

1. Expenditures will be controlled by an annual appropriated budget. Council will establish appropriations through the budget process and may transfer these appropriations as necessary through the budget amendment process.
2. The purchasing system will provide commodities and services in a timely manner to avoid interruptions in service delivery. All purchases will be made in accordance with the procurement code, purchasing policies, guidelines and procedures, and applicable state and federal laws. The city may join cooperative purchasing agreements to obtain supplies, equipment, and services at the best value.
3. A system of internal controls and procedures using best practices will be maintained for the procurement and payment processes.
4. The State of Arizona sets a limit on the expenditures of local jurisdictions. Compliance with these expenditure limitations is required — the city will submit an audited expenditure limitation report as defined by the Uniform Expenditure Reporting System (A.R.S. § 41-1279.07) along with audited financial statements to the State Auditor General within the required timeframe.

Long-term debt is used to finance capital projects with long useful lives. Financing capital projects with debt provides for "intergenerational equity," because the actual users of the capital asset pay for its cost over time, rather than one group of users paying in advance for the costs of the asset.

The city will not give or loan its credit in aid of, nor make any donation, grant, or payment of any public funds, by subsidy or otherwise, to any individual, association, or corporation, except where there is a clearly identified public purpose and the city either receives direct consideration substantially equal to its expenditure or provides direct assistance to those in need. Long-term debt will not be used to fund current operations or smaller projects that can be financed from current revenues or resources.

1. A 10-year Capital Improvement Plan (CIP) will be updated annually as part of the budget process and will include projected life cycle costing. Only the first year of the plan will be appropriated; the remainder are projections addressed in subsequent years. Life cycle costing calculates the total cost of a physical asset throughout its life, accounting for all costs from acquisition to disposal, including design, installation, operating, and maintenance costs.
2. The 10-year CIP will address capital needs in order: (a) improve existing assets; (b) replace existing assets; (c) construct new assets.
3. All projects will be evaluated annually by a multi-departmental team regarding accuracy of projected costs; consistency with the General Plan and Council policy goals; long-range master plans; ability to finance initial capital costs; ability to finance life cycle costs; and ability to cover associated additional ongoing operating costs.
4. All projects funded with general obligation bonds will be undertaken only with voter approval through a bond election. General Obligation debt is supported by secondary property tax revenues, assessed based on the ability to finance the City's debt service obligations; the rate depends on revenue requirements and the assessed valuation of taxable property. At minimum, the general obligation debt service fund balance will be at least 10% of the next fiscal year's property tax supported debt service.
5. Non-voter approved debt supported by General Fund revenues — such as Municipal Property Corporation (MPC) bonds, excise tax bonds, and lease obligations — will be used only when a dedicated ongoing revenue source is identified to pay the associated debt service. This debt service will not exceed 10% of the 5-year average of the General Fund's operating revenue available to support it. For FY26-27, debt service is 15.6% of General Fund operating revenue as defined above.
6. For non-voter approved debt, the following are considered prior to pledging projected revenues for ongoing debt service: the project requires ongoing revenue not available from other sources; matching monies are available that may be lost if not applied for in a timely manner; or catastrophic conditions exist.
7. Short-term borrowing or lease/purchase contracts should be considered for financing major operating capital equipment only when the repayment term does not exceed the equipment's expected useful life, an ongoing revenue source is identified to pay the annual debt service, and the Budget and Finance Director, along with the city's financial advisors, determine it is in the city's best financial interest.
8. These policies are in addition to the policies incorporated in the Debt Management Plan.

Fund balance is an important indicator of the City's financial position. Adequate fund balances allow the City to continue providing services to the community in case of economic downturns and/or unexpected emergencies or requirements. Use of fund balances is limited to unanticipated, non-recurring needs and planned future one-time or non-recurring obligations; unassigned balances may be used to allow time to restructure operations, but must be approved by City Council.

1. The minimum fund balance in the General Fund (the unassigned amount) shall total 25% of total budgeted ongoing expenditures for the upcoming fiscal year. Any usage must be approved by a majority of the City Council, should only occur for unexpected revenue shortfalls, unforeseen circumstances, and emergencies, and should be replenished within the subsequent fiscal year if possible (extendable up to five years based on circumstances).
2. For the Water and Sewer Enterprise Fund: the target for fund balance will be 50% of operating expenses; the Senior Lien Debt Service Coverage Ratio target will be 1.85; the target for Days Cash on Hand will be 250 days.
3. The minimum fund balance in the Solid Waste Enterprise Fund will be maintained at 10% of operating revenues.
4. The minimum fund balance in the Landfill Enterprise Fund will be maintained at 15% of operating revenues.
5. For the other major governmental operating funds, the minimum unassigned fund balance shall be: PSST 5% of operating revenue; HURF 15% of operating revenue; others 10% of operating revenue.
6. If fund balance at the end of the current fiscal year is less than the Council-approved level, the deficiency should be replenished in coming fiscal years, not to exceed a total of five consecutive years.
7. The City Manager may establish additional assigned fund balance reserves for certain anticipated obligations or other purposes.
8. Any balance in excess of the fund balance reserves may be used to support one-time expenditures; Council approval is required to use these funds to supplement "pay as you go" capital outlay, one-time operating expenditures, or to prepay existing debt.
9. The fund balance for the various Trust Funds will be based on annual actuarial reports, with a target funding level at the 75% confidence funding level.
10. Separate fund balance operating reserves may be required by bond issuance documents for funds with outstanding bonded debt. These requirements will not be viewed as additional fund balance needs unless greater than those established by these goals.