Operating Budget 2025-2026

Principles of Sound Financial Management

Introduction These principles set forth the broad framework for overall fiscal planning and management of the Town’s resources. In addition, these principles address both current activities and long-term planning. Every two years, following a Council election, these principles will be reviewed to assure the highest standards of fiscal management. Overall Goals The financial goals of the Town of Blacksburg are designed to ensure the Town’s sound financial condition at all times. 1. Sound Financial Condition may be defined as:  Cash Solvency - The ability to pay bills.  Budgetary Solvency - The ability to annually balance the budget.  Long Term Solvency - The ability to pay future costs.  Service Level Solvency - The ability to provide needed and desired services. 2. Flexibility is a goal that ensures that the Town is in a position to react and respond to changes in the economy and new service challenges without measurable financial stress. 3. Adherence to Best Accounting and Management Practices in conformance with generally accepted accounting procedures as applied to governmental units, and the standards of the Governmental Accounting Standards Board (GASB) and the Government Finance Officers Association (GFOA). Financial Principles 1. A balanced budget should be prepared annually by the Town Manager and forwarded to the Town Council for consideration. 2. Ongoing operating costs should be funded by ongoing revenue sources. This protects the Town from fluctuating service levels and avoids concern when one-time revenues are reduced or removed. In addition: a. Cash balances should be used only for one-time expenditures, such as land acquisition, capital improvements and capital equipment or special one-time expenditures. b. Federal grants should not financially support essential Town services. Federal grant monies should be tied to programs and services with the understanding that those services delivered with grant funding may be revised and altered based on grant funding availability. c. New operating costs associated with capital projects should be funded through the operating budget but identified and outlined in the Capital Improvement Program. 3. The Town Manager should forward to the Town Council a quarterly financial report identifying meaningful trends in budget to actual for both revenues and expenditures for all major funds.

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