The City of Sedalia is working to improve its credit rating and financial management practices with new and revised policies, which were presented to the Sedalia City Council during Monday’s meeting.
Finance Director Kelvin Shaw presented the detailed document to council, describing why it’s necessary to not only update current policies but to add new ones. A recent credit rating update from Standard & Poor’s affirmed the city’s A+ stable rating, but pointed out three “holes” in the city’s financial management procedures.
“They rated us in that section as adequate. … So it’s an area with a little bit of work we can improve at least our ability to be rating higher on our credit rating,” Shaw said. “As (City Administrator) Gary (Edwards) and I sat down and looked at those holes they pointed out we really started with ‘where are our policies’ and this was an issue when I was going through that rating (with S&P) — they’d ask for a policy and I’d have to go find it and whenever we adopted it. One of the things we found was there were several pieces or sections in place as standalone policies, which made it not conducive to periodic reviews.”
Shaw went through the proposed policies with council, noting which ones were new and which were simply updated. He offered the following recommendations:
• Replace the related individual sections with a set of financial policies all in one place (the proposed document).
• Fill the gaps, both perceived and real, with formalized policies.
“Some of the gaps you’ll see or the new policies you’ll see is stuff we’re doing and have been doing, but without it being in a formalized policy it was awful hard to tell Standard & Poor’s that we’re doing it because basically what they were saying was if it’s not in a formal policy that you can send to me, we can’t count it, we can’t give you credit for it. That’s what I mean by perceived and real,” Shaw explained.
• Employ systematic review strategy with each budget year. Shaw suggested he and Edwards review the budget each year from a staff standpoint and see if they have recommended changes to present to council.
• Move toward separating policy from procedure.
The document includes policies for accounting, budget, general fund balance, enterprise fund, capital improvements, debt, cash management and investments, revenue, operating expenditures, fixed assets, purchasing, and surplus property disposal.
Some of the changes include adding three-year financial forecasts, a request from S&P, and adding a public hearing regarding the budget in January before council’s annual strategic goal-setting session to allow for more public input in the budget process. S&P also requested the city create a five-year capital improvement plan, which that policy has been added and Shaw said city staff is already working on the plan.
Council will vote on adopting the policies during the Oct. 17 meeting.
During the meeting council also:
• Approved an ordinance amending Sections 64-43(7) and 64-12(27) to Chapter 64 (Zoning) of the Code of Ordinances relating to hotels.
• Approved an ordinance approving and annexing an unincorporated area, located behind Tractor Supply, owned by the Sylvia G. Thompson Charitable Trust and Thompson Hills Investment Corp. into the City of Sedalia.
• Approved an ordinance granting a special use permit to the Sylvia G. Thompson Charitable Trust for a four-story hotel at 850 Lamm Dr.
• Approved an ordinance approving and accepting a cooperative agreement with the Missouri Department of Conservation for a Tree Resource Improvement and Maintenance (TRIM) grant.
All members were present.
Nicole Cooke can be reached at 660-530-0138 or @NicoleRCooke.