Public Notices

Posted on: November 24, 2017

Ordinance Amending Fridley City Charter Chapter 7 - Taxation and Finance

A public hearing to review a proposed amendment by ordinance to the City Charter related to taxation and finance to bring the language current and up to date to state and federal laws and todays accounting standards and procedures.


ORDINANCE NO. ____

 

AN ORDINANCE AMENDING FRIDLEY CITY CHARTER CHAPTER 7.  TAXATION AND FINANCES 

The Fridley City Charter has completed its review of Chapter 7 and has recommended an amendment of the City Charter by Ordinance to the City Council on ______, 2017.

The Fridley City Council hereby finds after review, examination and recommendation of the Charter Commission that Fridley City Charter Chapter 7 related to taxation and finances should be hereby amended and ordains as follows:

FRIDLEY CITY CHARTER

CHAPTER 7.  TAXATION AND FINANCES


SECTION 1:  THAT SECTION 7.02.3 BE HEREBY AMENDED AS FOLLOWS: 

Section 7.02.  POWER OF TAXATION

3.                  Any other fees created, or increased beyond the limits set forth in subsection 1, shall require voter approval as stipulated in subsection 2. 

A.    For the purposes of this subsection, "fees" includes sales and use taxes, recycling fees, gas and electric franchise fees and any other fee that produces a tax burden or direct financial obligation for all property owners and/or residents of Fridley. (Ref Ord 1152, 1244)

B.    For the purposes of this subsection, the term "fees" does not include:  utility charges, recycling fees, Parks and Recreation Department participation fees, charges for photo-copying, sales of municipal liquor store products, or civil and criminal fines and other charges collected in cases of restitution or violation of law or contract.  The term "fees" also does not include rental housing fees, building permit fees, liquor license fees, the extension or transfer of cable television service authority to additional service providers for which fees are already being charged, fees for the operation of junk yards, annual license fees for the operation of pawn shops and other regulated business, and any other charge for services, including health and safety related Code enforcement, and other goods, services or materials routinely provided by the City to its citizens or other members of the public which, by law, must be limited to the actual cost of the service being provided.  The term "fees" shall not include any special assessments made under Minnesota state law. Statutes Section 429.  (Ref Ord 1152, 1244)

C.    All fees and other charges referenced in section B above shall be designed to cover the cost of the service and anticipated future costs. For the purposes of this subsection, "fee increase" includes a new tax or fee, a monetary increase in an existing tax or fee, a tax or fee rate increase, an expansion in the legal definition of a tax or fee base, and an extension of an expiring tax or fee.  (Ref Ord 1152) 

SECTION II:  THAT SECTION 7.04. PREPARATION OF ANNUAL BUDGET BE HEREBY AMENDED AS FOLLOWS:

Section 7.04.  PREPARATION OF ANNUAL BUDGET

1.      The City Manager shall prepare the estimates for the annual budget. The budget shall include all funds identified by the City Manager as requiring annual budget estimates.  The budget which shall include any estimated deficit/surplus for the current year.  The budget shall contain sufficient detail to be readily understood and contain explanatory statements as deemed necessary. 

The estimates of revenues and expenditures for general and special revenue funds shall be by organizational unit and include comparative figures for the current fiscal year and actual figures for the two preceding fiscal years. submitted by each department to the City Manager.  Each Expenditure estimates shall be divided into three (3) major subdivisions as follows:

A.    Salaries and Wages,

B.     Ordinary Expenses,

C.     Capital Outlay. 

In funds other than general and special revenue, the proposed expenditures shall be presented in an understandable manner according to the discretion of the City Manager. 

2.      Salary detail shall show a list of all salaried officers and positions with salary allowance and number of persons holding each.  Wages shall be broken down in sufficient detail to justify the request.  Ordinary expenses shall be broken down into such detail as the City Manager shall direct.  Capital Outlay shall be itemized as to items and amounts. (Ref. Ord. 625) In parallel columns shall be added the amounts expended under similar headings for the two (2) preceding fiscal years, and, as far as practicable, the amounts expended and estimated for expenditure during the current year. In addition to estimates of expenditures, the City Manager shall prepare a detailed statement of revenues collected for the two (2) preceding completed fiscal years with amounts estimated to be collected for the current fiscal year, and an estimate of revenues for the ensuing fiscal year.  The estimates shall be submitted to the Council at its last regular monthly meeting in August and shall be published twice in summary in the official Publication prior to November 15. (Ref. Ord. 625, Ord. 946) 

SECTION III:  THAT SECTION 7.06 ENFORCEMENT OF THE BUDGET BE HEREBY AMENDED AS FOLLOWS:

Section 7.06.  ENFORCEMENT OF THE BUDGET.

It shall be the duty of the City Manager to enforce strictly the provisions of the budget in accordance with the City Council budget resolution and other financial policies of the City.  The City Manager shall not approve any order upon the City Treasurer for any expenditure unless an appropriation has been made in the budget, nor for any expenditure covered by the budget unless there is sufficient unencumbered balance left after deducting the total past expenditures and the sum of all outstanding orders and encumbrances.  No officer or employee of the City shall place any orders or make any purchases except for the purposes and to the amounts authorized in the budget resolution.  Any obligation incurred by any person in the employ of the City an officer or City employee for any purpose not authorized in the budget resolution or for any amount in excess of the amount therein authorized shall appropriated in the budget resolution or in excess of available moneys in any fund of the City may be considered a personal obligation upon the person incurring the expenditure.  (Ref. Ord. 857)

SECTION IV:  THAT SECTION 7.07. ALTERATIONS IN THE BUDGET BE HEREBY AMENDED AS FOLLOWS:

Section 7.07.  ALTERATIONS IN THE BUDGET.

After the budget shall have has been duly adopted, the Council shall not have power to increase the amounts therein fixed in the budget resolution, whether by the insertion of new items or otherwise, beyond the estimated revenues, unless the actual receipts shall exceed such estimates, and in that event, not beyond such actual receipts.  The sums fixed in the budget shall be and become appropriated at the beginning of the fiscal year for the several purposes named therein, and no other.  The Council may at any time, by resolution passed by a vote of at least four (4) members of the Council, reduce salaries or the sums appropriated for any purpose by the budget resolution, or by vote of at least four (4) members of the Council authorize the transfer of sums from the unexpended balances of the budget to other purposes.  (Ref. Ord. 946) 

SECTION V.  THAT SECTIONS 7.10. TAX SETTLEMENT WITH COUNTY AND 7.11. DISBURSEMENTS HOW MADE BE HEREBY REPEALED IN THEIR ENTIRETY AS FOLLOWS:

Section 7.10. TAX SETTLEMENT WITH COUNTY.

The City Treasurer shall see to it that all moneys in the county treasury belonging to the City are promptly turned over to the City according to law. 

Section 7.11.  DISBURSEMENTS, HOW MADE.

All disbursements shall be made only upon the order of the City Manager or designee, duly authorized by a resolution or motion of the Council, and every such order shall specify the purpose for which the disbursement is made, and indicate the fund out of which it is to be paid.  Each such order shall be directed to the Treasurer, and the latter shall issue a check payable to the order of the person in whose favor the order was drawn.  The Treasurer shall issue no check upon any City funds except upon such order.  In the discretion of the Council the order and check may be a single instrument.  No claim against the City shall be allowed unless accompanied by either an itemized bill, or a payroll, or time sheet, each of which shall be approved and signed by the responsible City  officer who vouches for the correctness and reasonableness thereof.  The Council may by ordinance make additional regulations for the safekeeping and disbursement of the City's funds.  The Council may by resolution or motion provide for the regular payment without specific individual authorization by the Council of salaries and wages of regular employees, laborers, and fixed charges which have been previously duly and regularly incurred.

SECTION VI:  THAT SECTION 7.12. FUNDS BE KEPT BE HEREBY AMENDED AS FOLLOWS:

Section 7.12 10.  FUNDS TO BE KEPT.

There shall be maintained by the Finance Director a classification of funds which shall provide for a general fund and funds required by law, ordinance, or resolution and meet generally accepted accounting standards and procedures.  The Council may, by resolution, make interfund loans where permitted by law except from funds held by the City as a trustee or custodian or in the capacity of an agent. in the City Treasury the following funds: 

A.        A general fund for the payment of such expenses of the City as the Council may deem proper.  Into this fund shall be paid all money not provided herein or by statute to be paid into any other fund.

B.        A debt service fund, into which shall be paid all receipts from taxes or other sources for the payment of principal and interest of all obligations issued by the City except bonds issued on account of any local improvement to be financed wholly or partly by special assessments and bonds issued on account of any municipally owned utility.  Out of this fund shall be paid the principal and interest of such obligations when due.  Any surplus in such fund not needed immediately for debt service may be invested under the direction of the Council in such securities as are authorized by statute for the investment of such funds and such investments may be liquidated at any time.

C.        A bond fund, into which shall be paid and disbursed the proceeds of all bonds issued by the City except bonds issued on account of any local improvement to be financed wholly or partly by special assessments and bonds issued on account of any municipally owned utility.  A separate bond account shall be kept for each issue of such bonds.

D.                A special assessment fund, which shall be used to finance local improvements that are to be paid for, in whole or in part, from special assessments against benefited property.  There shall be paid into this fund:  (1) collections of special assessments, with interest, levied against benefited property; (2) proceeds of bonds or certificates of indebtedness sold by the City in anticipation of assessment collections and the proceeds of interfund loans; (3) amounts from other City funds representing either (a) apportionments of costs against the City at large, (b) benefit assessments against City property, or (c) appropriations to maintain the integrity of the fund.  There shall be paid out of this fund:  (1) all expenses and costs of the improvement projects that are financed through the fund; (2) the redemption of all special assessment fund bonds and certificates of indebtedness, with interest, at or before maturity, and any interfund loans; (3) transfers to the general fund of any unencumbered surplus of the fund, in the discretion of the Council; and (4) abatements of assessments and refunds of receipts in error.  The Council shall maintain the integrity of this fund by appropriations from tax funds if necessary, and in addition may by ordinance create and maintain in the fund a cash reserve sufficient for working capital purposes.  In order to anticipate the collection of special assessments the Council may by a majority vote issue and sell bonds and certificates of indebtedness, pledging the full faith and credit of the City, or pledging only special assessments, in such amounts and maturities as it may determine, regardless of the provisions of Section 7.16 of this Chapter; provided that the aggregate amount of such bonds and certificates outstanding at any time shall not exceed the sum of the following;

(1) all assessments levied and uncollected; (2) assessable cost of work in progress; and (3) the cash reserve for working capital as previously determined by ordinance.  In order that the fund may be administered on a self-sustaining basis, all improvement projects financed through it shall upon completion be certified by the City Manager as to total cost, which shall thereupon be apportioned by the Council either as assessments against benefited property or as amounts due from other City funds.  Amounts apportioned against other City funds shall be due not later than the dates of adoption of the corresponding assessment rolls, shall be charged interest as in the case of assessments and shall be paid into the fund, with any interest due, not later than one (1) year after the due dates.

E.         A public utility fund into which shall be paid all money derived from the sale of bonds issued on account of any municipally owned utility and all money derived from the sale of utility services, and from the sale of any property acquired for or used in connection with any such utility.  There shall be paid out of this fund the cost of the purchase, construction, operation, maintenance and repair of such utility, including the principal of and interest upon obligations which have been or shall be issued on its account.  Separate accounts within the public utility fund shall be kept for all utilities which are operated separately.

F.         In addition to the foregoing funds, there may be maintained in the City Treasury, whenever the Council deems it advisable, the following funds:

(1)  A working capital or revolving fund, for financing self-sustaining activities not accounted for through other funds.

(2)   A trust and agency fund, for the care and disbursement of money received and held by the City as trustee or custodian or in the   capacity of an agent for individuals or other governmental units.

(3)  Such other funds as may be required by statute or ordinance.  In lieu of establishing any of the three (3) foregoing types of funds, Subsections 1, 2, and 3, the Council may provide for the recording of operations or activities for which the use of such funds night be suitable through the maintenance of separate accounts in any appropriate fund already established.  The Council shall have full power to make by duly adopted ordinance such interfund loans, except from funds held under Subsection 2 hereof, as it may deem necessary and appropriate from time to time.

SECTION VII:  THAT SECTION 7.13 RECEIPTS TO GO TO CITY TREASURER BE HEREBY REPEALED IN ITS ENTIRETY AS FOLLOWS:

Section 7.13.  RECEIPTS TO GO TO CITY TREASURER.

All receipts of money belonging to the City, or any branch thereof, excepting only those funds collected by the County Treasurer, shall be paid to the City Treasurer by the person authorized to receive the same.  All such moneys, and also all moneys received upon tax settlements from the County Treasurer, shall be deposited as soon as possible in a bank or banks approved by the City Council, subject to state laws regulating the designation of depositories for municipal funds.

SECTION VIII:  THAT SECTION 7.14 ACCOUNTS AND REPORTS BE HEREBY AMENDED AS FOLLOWS:

Section 7.14 11.  ACCOUNTS AND REPORTS.

The accounts of the city shall be maintained in accordance with generally accepted governmental accounting standards and procedures.  The City Manager shall submit such reports as will be necessary in order to keep the Council fully informed of the financial conditions of the City.  Once a year in accordance with Minnesota state law, the City Manager shall submit a complete financial report of the City, for the preceding fiscal year.  This report shall contain audited financial statements and disclosures which present the City’s financial position.  A summary of the report shall be published in the official newspaper in a format consistent with the Minnesota State Auditor requirements.  be the Chief Accounting Officer of the City and of every branch thereof, and the Council may prescribe and enforce proper accounting methods, forms, blanks, and other devices consistent with the law, this Charter and the ordinances in accord with it.  The City Manager shall submit to the Council a statement each month showing the amount of money in the custody of the City Treasurer, the status of all funds, the amount spent or chargeable against each of the annual budget allowances and the balances left in each and such other information relative to the finances of the City as the Council may require.  The Council may at any time and shall annually provide for an audit of the City finances by a certified public accountant or by the department of the State authorized to make examination of the affairs of municipalities.  On or before the first day of April in each year the City Manager shall prepare a complete financial statement in form approved by the Council of the City's financial operations for the preceding calendar year, and quarter, which statement may be published in such manner as the Council may direct and a summary thereof shall be published in the official newspaper on or before the third week in April, July, October and January as appropriate. (Ref. Ord. 625, Ord. 857)

SECTION IX:  THAT SECTION 7.15. BONDED DEBT AND DEBT LIMIT BE HEREBY AMENDED AS FOLLOWS:

Section 7.15 12.  BONDED DEBT AND DEBT LIMIT INDEBTEDNESS.

1.         In addition to all the powers in respect to borrowing and the issuance of bonds and other obligations for the payment of money specifically or impliedly granted by this Charter, and any amendments thereto, the City shall have all the powers in reference to these subject matters granted to cities of its same class by the laws of the State of Minnesota state law. in force from time to time.  The City shall have the power to issue and sell its bonds to the State of Minnesota and to comply with all provisions of law relative to loans to municipalities from the permanent State funds.  The City shall also have such powers as are necessary to obtain loans or funds from the Government of the United States and any of its instrumentalities or from the State of Minnesota or any of its instrumentalities, and to comply with all provisions of law relative to obtaining such loans or funds.

2.         The Council by a vote of at least four (4) of its members may authorize the issuance of the bonds to provide funds for any public purpose not prohibited by law,. or The City Council may in at its discretion, by a majority vote of all of its members, submit to the electorate propositions for the issuance of such bonds.  When such a proposition is submitted to the electorate, no bonds or other term obligations of the City may be issued except pursuant to a favorable vote of a majority of those voting on the proposition of their issuance.  By the proceedings for the issuance of any bonds, by the terms of the bonds and by agreements with the purchasers of bonds, they may be made special in character and limited in their payment to earnings or to part earnings and part tax funds.  To the extent that they are thus payable out of earnings or other than tax funds, such bonds shall not be paid out of taxes.  The total bonded debt of the City at the time of the issuance of any bonds shall not exceed ten percent (10%) of the last assessed valuation of the taxable property therein, or the limit authorized by State law for cities of the same class, whichever is the greater, but in computing the total bonded debt, certificates of indebtedness, bonds, warrants or other obligations issued before or after adoption of this Charter shall not be included or counted if (1) held in a sinking fund maintained by the City; or (2) issued for the acquisition, equipment, purchase, construction, maintenance, extension, enlargement or improvement of street railways, telegraph or telephone lines, water, lighting, heat and power plants, or either, or any other public convenience from which a revenue is or may be derived, owned and operated by the City, or the acquisition of property needed in connection therewith, or for the construction of public drainage ditches, storm and sanitary sewers, or for the acquisition of lands for streets, parks, or other public improvements or for the improvement thereof, to the extent that they are payable from the proceeds of assessments levied upon property especially benefited by such improvements; or (3) issued for the creation of maintenance of a permanent improvement revolving fund; or (4) for the purpose of anticipating the collection of general taxes for the year in which issued.  (Ref. Ord. 857)

SECTION X:  THAT SECTION 7.16. FORM AND REPAYMENT OF BONDS BE HEREBY REPEALED IN ITS ENTIRETY AS FOLLOWS:

Section 7.16.  FORM AND REPAYMENT OF BONDS.

No bonds shall be issued to run for longer than the reasonable life expectancy of the property or improvement for which the bonds are authorized, as ascertained and set forth in the resolution authorizing such bonds, and in no case shall bonds be issued to run for more than thirty (30) years.  The purposes for which bonds are authorized shall be set forth in the resolution authorizing them and the proceeds from such bonds shall not be diverted to any other purpose.  It shall be the duty of the City Manager to include in the budget estimates each year a sum or sums amply sufficient to pay the principal of, and the interest on, any bonds which are to fall due in the coming fiscal year, and another sum sufficient to pay the interest for the same year on the Bonds which will be still outstanding.  It shall be the duty of the Council, enforceable by mandamus upon the suit of any bondholder or taxpayer, to include such sum or sums as may be necessary for this purpose in the annual budget which it passes.  (Ref. Ord. 857)

SECTION XI:  THAT SECTION 7.17. DEBT AND TAX ANTICIPATION CERTIFICATES BE HEREBY AMENDED AS FOLLOWS:

Section 7.17 13.  DEBT AND TAX ANTICIPATION CERTIFICATES.

In a manner consistent with Minnesota state law, at any time after January 1, following the making of an annual tax levy, the council may issue certificates of indebtedness in anticipation of the collection of taxes levied for any fund and not yet collected.  The total amount of the certificates issued against any fund for any year with interest thereon until maturity shall not exceed ninety percent (90%) of the total current taxes for the fund uncollected at the time of the issuance.  Such certificates shall be issued on such terms and conditions as the Council may determine but they shall become due and payable not later than the 1st day of April of the year following their issuance.  The proceeds of the tax levied for the fund against which tax anticipation certificates are issued and the full faith and credit of the City shall be irrevocably pledged for the redemption of the certificates in the order of their issuance against the fund.

1.                  If in any year, the receipts from taxes or other sources should from some unforeseen cause become insufficient for the ordinary expenses of the City, as provided for in the budget, or if any calamity or other public emergency should subject the City to the necessity of making extraordinary expenditures, then the Council may authorize the sale by the City Treasurer of emergency debt certificates to run not to exceed eighteen (18) months and to bear interest at not more than allowable by State Statutes.  A tax sufficient to redeem all such certificates at maturity shall be levied as part of the budget of the following year.  The authorization of an issue of such emergency debt certificates shall take the form of an ordinance approved by at least four (4) of the members of the Council; the ordinance may, if deemed necessary, be passed as an emergency ordinance. (Ref. Ord. 592)

2.         For the purpose of providing necessary moneys to meet authorized expenditures, the Council may issue certificates of indebtedness in any year prior to the receipt of taxes payable in such year, on such terms and conditions as it may determine, bearing interest at a rate not more than allowable by State Statutes; provided that such certificates outstanding at any one time shall not exceed forty percent (40%) of the tax levy payable in the current year belonging to the fund for the benefit of which the borrowing is authorized. (Ref. Ord. 592)

SECTION XII:  THAT SECTION 7.18. BONDS OUTSIDE THE DEBT LIMIT BE HEREBY REPEALED IN ITS ENTIRETY AS FOLLOWS:

Section 7.18.  BONDS OUTSIDE THE DEBT LIMIT.

Without limit as to amount, the Council may issue bonds for legal purposes outside of the debt limit: (a) for the creation and maintenance of a permanent improvement revolving fund, (b) for extending, enlarging, or improving water supply system, lighting and heat and power plants, or either, or other revenue-producing public utilities of whatever nature, owned and operated by the City, or of acquiring property needed in connection therewith, (c) for public improvements payable from special assessments.  The Council may also purchase equipment for street department, water or sewer utility, or fire department use on conditional sale contracts, provided that the installment payments do not extend beyond the estimated useful life of the equipment so purchased.

SECTION XIII:  THT SECTION 7.14. EMERGENCY DEBT CERTFICATES BE HEREBY CREATED AS FOLLOWS:

Section 7.14.  EMERGENCY DEBT CERTIFICATES

If in any year, the receipts from taxes or other sources should from some unforeseen cause become insufficient for the ordinary expenses of the City, as provided for in the budget, or if any calamity or other public emergency should subject the City to the necessity of making extraordinary expenditures, then the Council may by resolution, issue and sell certificates.  A tax sufficient to pay principal and interest on such certificates with the margin required by law shall be levied as required by law.  The authorization of an issue of such emergency debt certificates shall take the form of a resolution approved by at least four (4) of the members of the council.  It may be passed as an emergency resolution and would be exempt from voter approval.


 


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