Conference/Public Meeting Agenda/Documents — Packet

Best Practices Worksheet CY 2012/SFY2013 West Orange Township (Essex) 0722 Please see Color Key at bottom of sheet for limits on answers Answer Question Comments Has your municipality fully and accurately disclosed in the "Budget Message" section of your CY2012/SFY 2013 budget the following: Revenues at Risk; Non-Recurring Cost 19 Yes Reductions; Anticipated CY2013/SFY 2014 Appropriation Increases; and Structural Balance Offsets as detailed in Local Finance Notice 2011-37? In preparing your annual budget it is important for both the governing body and public to understand the concept of surplus and how it accumulates (or declines) over the years. A While this review and analysis is formal policy regarding surplus serves as a basis for decisions concerning future financial performed extensively during the solvency, and the lack of a policy could lead bond rating agencies to downgrade your budget process, no formal policy has 20 Prospective municipality's credit rating. In developing said surplus policy your CFO should analyze been established. We will work toward and explain at least a five-year trend of surplus; illustrating the factors causing each establishing such a policy for the annual increase or decrease. A surplus policy with realistic and sustainable goals can upcoming budget season. then be determined. Does your municipality have a written policy goal

upcoming budget season. then be determined. Does your municipality have a written policy goal for the amount of surplus available in support of municipal operations, and is this goal evaluated annually? In preparing your annual budget for the current year it is important that the impact that these decisions may have on future years' budgets be presented, evaluated and considered before final action is taken. Long term plans concerning revenue, appropriations, tax levy, tax levy cap and surplus are critical toward sustaining (or 21 Yes achieving) a solid fiscal condition. Are projections calculated and discussed in sufficient detail so that the governing body understands the impact that the current year's budget may have on the future tax levy (as restricted by the levy cap) and future surplus balances for at least two (2) future year's budgets? Certain municipalities have indirectly pledged prompt payment (i.e. issued a guarantee) of debt service with respect to debt issued by counties, independent authorities or developers. Bond Rating Agencies (e.g. Moody's, Fitch, Standard & Poor's) have downgraded certain municipalities' bond ratings to below investment grade for lack of preparation in the event a lender calls in a The Township has not issued any such 22 N/A debt guarantee. If your municipality guarantees any debt, are direct service revenues that may debt. be pledged against debt repayment monitored by the municipal CFO; and to the extent that cash flow from pledged revenue will not satisfy the debt repayment, are sufficient funds held in reserve to satisfy the guarantee or is an existing authorization in place to issue debt (e.g. a bond ordinance) in the event a lender calls in the guarantee?