City Council Agenda Report
August 5, 2025
TO: Honorable City Council
FROM: Jesus M. Gomez, City Manager
BY: Jana Stuard, Director of Finance/City Treasurer
Jennifer Hernandez, Senior Management Analyst
SUBJECT: RESOLUTION NOS. 25-33 AND 25-34 – ADOPTING CASH HANDLING AND CAPITALIZATION POLICIES FOR FISCAL YEAR 2025/26
Background:
Annually, the Finance department presents to City Council, for consideration and approval, updates to routine policies as part of ongoing efforts to enhance fiscal responsibility, improve transparency and ensure alignment with best practices as well as compliance with municipal code, state and federal requirements.
To ensure policies are updated accordingly, staff are proposing changes to two existing policies, which are:
Cash Handling Policy
Capitalization Policy
Cash Handling Policy
As part of the City’s commitment to provide excellent customer service, and by extension the Finance Department’s responsibility to protect public funds, the cash handling policy was developed and adopted in 2019 to establish the proper and effective internal procedures over cash handling across the various departments who intake payments as part of day-to-day operations.
Since the adoption of the policy, staff have been limited to a maximum intake of $5,000 per transaction when payment is received via credit or debit card. This limitation was implemented to minimize the impact of the bank credit card processing fees the City would be required to pay on large transactions. However, on April 1, 2025, the City Council adopted an updated fee
City Council August 5, 2025
Fiscal Year 2025/26 Financial Policy Updates Page No. 2 1 4
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schedule to take effect July 1, 2025, which includes a 3% credit card processing fee that will be passed through to the payor and no longer paid by the City.
To minimize the disruption imposed by the existing transaction limitation and allow for a seamless transition to incorporating the credit card processing fee, an update to the Cash Handling Policy is required to remove transaction limits for payments accepted by the City.
Exhibit A to Resolution No. 25-33 includes the updated policy removing the credit card transaction limit.
Capitalization Policy (Fixed Assets)
The Governmental Accounting Standards Board (“GASB”) is responsible for setting accounting and financial reporting standards for U.S. State and local governments that follow generally accepted accounting procedures (“GAAP”). One of these standards includes the method in which governments account for fixed assets, also known as GASB Statement 34 which sets the reporting requirements of capitalization thresholds, depreciation, disposal of assets and criteria.
In 2003 when GASB statement 34 was established, the minimum capital asset threshold for capital purchases was set to $5,000 and the Fixed Asset Policy was developed in accordance with the standards set forth. Since then, various external factors have influenced the cost of capital outlay purchases, primarily inflation. In an effort to update the Fixed Asset Policy to account for these changes, as well as remain in compliance with GASB requirements, an update to the policy is needed. Included as Exhibit A to Resolution No. 25-34 is an updated Fixed Asset Policy the includes the following changes:
Raising the capitalization threshold from $5,000 to $10,000 in a manner consistent with GASB requirements and best practices.
Incorporate additional capital outlay expenditure types. Removal of obsolete language.
All policies proposed for adoption will become effective following approval by the City Council.
Fiscal Impact:
N/A
Citizens Advised:
N/A
Strategic Plan 2023 Implementation:
The recommended action will further the City’s Strategic Plan Goal 3: Partner with our stakeholders to create and sustain a resilient and economically prosperous City with opportunity for everyone.
City Council August 5, 2025
Fiscal Year 2025/26 Financial Policy Updates Page No. 3 1 4
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Recommended Action:
Staff recommends City Council adopt:
a. Resolution No. 25-33 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NORWALK ADOPTING THE CASH HANDLING POLICY; and
b. Resolution No. 25-34 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NORWALK ADOPTING THE FIXED ASSET CAPITALIZATION POLICY.
Attachments:
1. RESOLUTION NO. 25-33
2. RESOLUTION NO. 25-34