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:
7. TAXATION AND FINANCES
SECTION 1: THAT SECTION 7.02.3
BE HEREBY AMENDED AS FOLLOWS:
Section 7.02. POWER
Any other fees created, or increased beyond the limits set forth in
subsection 1, shall require voter approval as stipulated in subsection 2.
For the purposes of this subsection, "fees"
includes sales and use taxes,
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)
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
Section 429. (Ref Ord 1152,
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
SECTION II: THAT SECTION 7.04.
PREPARATION OF ANNUAL BUDGET BE HEREBY AMENDED AS FOLLOWS:
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
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.
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:
7.06. ENFORCEMENT OF THE BUDGET.
It shall be the duty of
the City Manager to enforce
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.
SECTION IV: THAT SECTION 7.07.
ALTERATIONS IN THE BUDGET BE HEREBY AMENDED AS FOLLOWS:
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
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.
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:
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.
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.
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;
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
SECTION VII: THAT SECTION 7.13
RECEIPTS TO GO TO CITY TREASURER BE HEREBY REPEALED IN ITS ENTIRETY AS FOLLOWS:
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:
14 11. ACCOUNTS AND REPORTS.
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.
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:
15 12. BONDED DEBT AND DEBT LIMIT
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
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:
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:
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.
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:
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
SECTION XIII: THT SECTION 7.14.
EMERGENCY DEBT CERTFICATES BE HEREBY CREATED AS FOLLOWS:
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.