Financial Policies

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The City of Raymore currently produces financial information that is in conformity with generally accepted accounting principles, inclusive of GASB 34 requirements. The financial information structure of the City is organized on the basis of funds and account groups within each fund, with each fund considered a separate accounting entity.  The activities and operations of each fund are accounted for separately, with a set of self-balancing accounts that comprise the funds assets, liabilities, fund equity, revenues and expenditures or expenses as appropriate.

 The City’s financial information is audited annually by a firm of independent certified public accountants, in accordance with generally accepted governmental auditing standards.

 The following is an overview and summary of the policies and practices used to develop the annual budget. 

Operating Reserves 

Resolution 10-70

The City of Raymore believes that in order to provide security for any foreseeable contingency, a restriction of 20% of the proposed fund expenditures should be held in reserve for application to next years fund balance.

Resolution 10-70 adopted September 27, 2010 states, “It shall, in the budget annually adopted by the City Council, be the policy of the Council to hold an amount equivalent to twenty percent of the departmental operating expenditures in the General Fund, Park Fund and Enterprise Fund in reserve, in order to be prepared for unforeseen emergencies that may occur.”

Investment Policy

It is the policy of the City of Raymore, Missouri, to invest public funds in a manner which will provide a reasonable investment return with the maximum security while meeting the daily cash flow demands of the City and conforming to all State and local Statutes governing the investment of public funds.

Except for cash in certain restricted and special funds, the City of Raymore will consolidate cash balances from all funds to maximize investment earnings. Investment income will be allocated to the various funds based on their respective participation and in accordance with generally accepted accounting principles.

Investment through external programs, facilities and professionals operating in a manner consistent with this policy will constitute compliance with this policy.

General Objectives

The primary objectives, in priority order, of investment activities shall be safety, liquidity, and yield.

View the full Investment Policy here.

Debt Policy

The ability of the City to incur debt is limited by Article VI of the Constitution of the State of Missouri. Section 26(a) of the Article provides that a city may not become indebted in an amount exceeding in any year, the income and revenue provided for such year plus any unencumbered balances from previous years, except as set forth in Section 23(a) and Sections 26(b-e). Section 27 of the Article provides that a city may issue revenue bonds for the purpose of paying all or part of the cost of purchasing, constructing, extending or improving municipal utilities. 

The City of Raymore is authorized under the aforementioned Articles, to issue General Obligation Bonds, Revenue Bonds, Special Revenue Bonds and Certificates of Participation. When determining the type of bond to issue, the following factors are considered:

  • The direct and indirect beneficiaries of the project to be financed. The larger proportion of citizens should benefit from projects financed with General Obligation Bonds.
  • The lifetime of the benefits generated by the project.
  • The revenues that may be raised by alternative types of user charges.
  • The cost-effectiveness of user charges.
  • The effect of the proposed bond issue on the City’s ability to finance future project of equal or higher priority.
  • The true interest and net interest cost of each type of bond.
  • The impact on the City’s financial condition and credit ratings.

 View the full Debt Policy here.

Capitalization Policy 

Resolution 03-23

To establish for the City of Raymore a policy for capitalization for real property, infrastructure, equipment, works of art and historical treasures, intangible assets, donated assets and leased property.

Historically, City of Raymore has complied with the financial reporting requirements of the Government Accounting Standards Boards (GASB.) City assets for the Proprietary Funds have been recorded and depreciated. Governmental fund assets will be recorded in the General Fixed Asset Account Group (GFAAG) at original or historical cost and adjusted each year for new assets purchased and assets replaced due to obsolescence, damage, theft or loss.

The GASB issued Statement No. 34, effective June 30, 2003, requires City infrastructure, works of art, historical treasures, intangible assets and depreciation to be recorded for all funds in the government-wide financial statements.
This policy addresses the new elements of financial reporting introduced by GASB Statement No. 34 and ensures that capital asset transactions are accounted for consistently and in accordance with generally accepted accounting principles.

View the full Capitalization Policy here.

Purchasing Policy

City Code Chapter 135
Section 135.010: General Provisions

This Chapter provides guidelines to be followed in purchasing goods and services for the City. These policies and procedures supersede all prior purchasing directives, memoranda, and practices. The City Manager shall be responsible for enforcing this policy.

View the full Purchasing Policy here.

Fund Structure 

General Fund The general fund is the chief operating fund of a state or local government. GAAP prescribe that the general fund be used “to account for all financial resources except those required to be accounted for in another fund.” That is, it is presumed that all of a government’s activities are reported in the general fund unless there is a compelling reason to report an activity in some other fund type.

Special Revenue Funds
Special revenue funds most often have certain revenue sources set aside for a specific purpose. GAAP provide that special revenue funds be used “to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditure for specified purposes.” Parties outside the government as well as the governing body itself can impose these legal restrictions.

Debt Service Funds
Resources set aside to meet current and future debt service requirements on general long-term debt are recorded in a Debt Service Fund. GAAP permit the use of debt service funds “to account for the accumulation of resources for, and the payment of, general long-term debt principal and interest.”

Capital Project Funds
Capital Project Funds are used to report major capital acquisition and construction separately from their ongoing operating activities. Separate reporting enhances an understanding of the government’s capital activities, and it helps to avoid the distortions in financial resources trend information that can arise when capital and operating activities are mixed.

Enterprise Funds
An enterprise fund may be used to report any activity for which a fee is charged to external users for goods or services. GAAP also require the use of an enterprise fund for any activity whose principal revenue sources meet any of the following criteria: 1) debt backed solely by fees and charges; 2) legal requirement to recover cost; or 3) policy decision to recover cost.

Internal Service Funds
Governments often wish to centralize certain services and then allocate the cost of those services within the government. Internal service funds are generally used for central garage and motor pools, duplicating and printing services, information systems, purchasing, and central stores. The goal of an internal service fund is to measure the full cost of providing goods and services provided and recouping that cost through fees or charges.

Fiduciary Funds
Fiduciary Funds are used “to report assets held in a trustee or agency capacity for others and therefore cannot be used to support the government’s own programs.” Fiduciary funds include pension (and other employee benefit) trust funds, investment trust funds, private-purpose trust funds, and agency funds. The distinction between trust funds and agency funds is that trust funds normally are subject to a trust agreement that affects the degree of management involvement and the length of time that the resources are held.