Chapter 5.04
FISCAL PROVISIONS GENERALLY
Sections:
5.04.010 Fiscal year.
5.04.020 Annual budget.
5.04.025 Stabilization of funds.
5.04.030 General fixed assets.
5.04.040 Annual financial reporting.
5.04.050 Basis of accounting.
5.04.060 Examination of city financial records and financial statements.
5.04.070 Sales tax.
5.04.080 Real and personal property tax.
5.04.090 Motor vehicle registration tax.
5.04.100 Central treasury.
5.04.110 Central accounting.
5.04.120 Vouchers.
5.04.130 Checks.
5.04.140 Preparation and adoption of budget.
5.04.150 Transfer of appropriations.
5.04.160 Lapse of appropriations.
5.04.010 Fiscal year.
The fiscal year of the city will be the first day of July each year to the thirtieth day of June. (Prior code § 6.04.010)
5.04.020 Annual budget.
A. The annual budget will be compiled by the financial director based on detailed department estimates for approval by the council on or before May 30th of each year.
B. The combined budget will include detailed budgets for the following funds:
1. General fund;
2. Special revenue funds;
3. Special assessment funds;
4. Enterprise funds;
5. Debt service funds.
C. The council will adopt the annual budget before the thirtieth of June of each year.
D. Budget preparation shall begin at the department level requiring each department head to submit, before the thirtieth of April each year, a preliminary budget for the department to the financial director.
E. Capital projects in progress projected for the next five years should be detailed with descriptions, estimated costs, and available revenue sources. A separate section of the annual budget document should be labeled “Capital Projects.”
F. The annual budget will have a cover document recapping all funds, revenues and expenditures and presented as the annual city appropriation ordinance for approval by the council. (Prior code § 6.04.020)
5.04.025 Stabilization of funds.
A. It is the policy of the city to maintain the fund balances and retained earnings of the various city operating funds at levels sufficient to maintain the city’s creditworthiness, and to provide financial resources for unforeseeable emergencies. The purpose of this section is to carry out these policies.
B. Definitions. The following words or phrases, when used in this chapter, shall have the meanings set forth in this section:
1. “Maximum undesignated fund balance” means, with respect to any annual budget as amended from time to time, an amount that is equal to sixty (60) percent of the sum of:
a. Budgeted general fund operating expenditures, net of any budgeted reimbursement of such expenditures in the current fiscal year, plus
b. The budgeted amount of general obligation debt service, not including general obligation debt service with a dedicated revenue source.
2. “Minimum undesignated fund balance” means, with respect to any annual budget as amended from time to time, an amount that is equal to fifty (50) percent of the sum of:
a. Budgeted general fund operating expenditures, net of any budgeted reimbursement of such expenditures in the current fiscal year, plus
b. The budgeted amount of general obligation debt service, not including general obligation debt service with a dedicated revenue source.
3. “Minimum retained earnings” means, for any specified enterprise fund and with respect to any annual budget as amended from time to time, twenty (20) percent of the amount derived by deducting from the total amount of expenses budgeted for that fund, (i) budgeted expenditures from the fund for debt service and capital projects, and (ii) the budgeted allowance for depreciation for the fund.
C. General Fund.
1. The annual budget for the general fund that is presented to the council, and all amendments to the annual budget for the general fund that are presented to the council, shall provide for an undesignated general fund balance not less than the minimum undesignated fund balance and not more than the maximum undesignated fund balance.
2. It is the policy of the city not to approve an appropriation from the general fund that would cause the undesignated general fund balance to be less than the minimum undesignated fund balance, except where the appropriation is required for an emergency expenditure or a major capital purchase.
3. It is the policy of the city to appropriate to the capital projects reserve fund any amount in the general fund balance at the end of a fiscal year (as confirmed by the city’s annual audit) in excess of the maximum undesignated fund balance for the succeeding fiscal year, unless the annual budget for the succeeding fiscal year provides for the expenditure of that excess during the succeeding fiscal year.
4. If at the end of the fiscal year the undesignated general fund balance (as confirmed by the city’s annual audit) is less than the minimum undesignated fund balance, the mayor shall submit to the council a plan to cause the undesignated general fund balance to be not less than the minimum undesignated fund balance before the end of the succeeding fiscal year.
D. Enterprise Funds.
1. It is the policy of the city to maintain a positive retained earnings balance in each of the enterprise funds to provide sufficient reserves for emergencies and revenue shortfalls.
2. The annual budgets for the sewer and water enterprise funds that are presented to the council, and all amendments to the annual budgets for the sewer and water enterprise funds that are presented to the council, shall provide for an unreserved retained earnings balance in each fund at least equal to the minimum retained earnings for that fund.
E. It is the policy of the city not to maintain positive retained earnings balances in the internal service funds. The city shall transfer accumulated retained earnings from an internal service fund to other operating funds.
F. It is the policy of the city to maintain a reserve in each of its debt service funds in an amount not less than the sum of all reserve fund balances required by bond ordinances applicable to that fund. (Ord. 04-48 § 2, 2004; Ord. 02-28 § 2, 2002; Ord. 00-60 § 2, 2000)
5.04.030 General fixed assets.
The financial director shall maintain a general fixed asset group of accounts detailing all assets purchased from revenues of any source over five thousand dollars ($5,000.00) with proper account procedures. The general fixed assets should be part of the annual financial statement audit. (Ord. 01-33 § 2, 2001: prior code § 6.04.030)
5.04.040 Annual financial reporting.
A. The city shall prepare and publish, as a matter of public record, a comprehensive annual financial report that encompasses all funds and account groups.
B. The financial statements shall combine the general purpose financial statements:
1. Combining statements by fund type and account group; and
2. Combining statements by fund type and individual fund statements. (Prior code § 6.04.040)
5.04.050 Basis of accounting.
The modified accrual or accrual basis of accounting, as appropriate, should be utilized in measuring financial position and operating results. (Prior code § 6.04.050)
5.04.060 Examination of city financial records and financial statements.
The city’s financial records and its financial statements shall be examined by a certified public accounting firm, licensed to perform financial audits in the state of Alaska. The completion of this examination with the accountants’ opinion on the financial statements must be completed by November 30th of each year. The accountants shall present the results of this examination to the council. The council shall then, if in agreement, accept the city’s financial statements for public record. (Prior code § 6.04.060)
5.04.070 Sales tax.
The council may pass an ordinance for the levy of a sales tax not to exceed three percent of all retail sales and services within the city as prescribed by law. (Prior code § 6.04.070)
5.04.080 Real and personal property tax.
A. By ordinance the council may levy a general property tax in the manner provided for borough levies in AS 29.45.560 through 29.45.600. The city property tax levy will be subject to the statutory limitations referred to in AS 29.45.560.
B. Pursuant to AS 29.45.050(c)(3), the city adjusts the types of property subject to tax by the city to exempt all personal property.
C. The council shall by June 15th of each year present to the Matanuska-Susitna Borough Assembly, a statement of the city’s rate of levy unless a different date is agreed upon by the borough and city. (Prior code § 6.04.080)
5.04.090 Motor vehicle registration tax.
Motor vehicles shall be subject to the Matanuska-Susitna Borough motor vehicle registration tax, pursuant to MSB 3.15.035(B), levied and collected by the state in accordance with AS 28.10.431. As provided by AS 28.10.431(f), revenue received by the Matanuska-Susitna Borough shall be allocated to the city. (Prior code § 6.04.090)
5.04.100 Central treasury.
The municipal financial director is the custodian of all municipal funds. (Prior code § 6.08.010)
5.04.110 Central accounting.
The municipal financial director shall keep an itemized account of money received and disbursed. (Prior code § 6.08.020)
5.04.120 Vouchers.
The municipal financial director shall pay money on vouchers drawn against appropriations. (Prior code § 6.08.030)
5.04.130 Checks.
The city checks shall be signed by the mayor, and/or the mayor’s representative, and/or the council’s designee. These signatures will also be placed on the signature cards with the banks. (Prior code § 6.08.040)
5.04.140 Preparation and adoption of budget.
The council shall establish the manner for the preparation and submission of the budgets and the capital programs by the executive. After public hearings the council may approve by quorum the budgets proposed. (Prior code § 6.12.010)
5.04.150 Transfer of appropriations.
No transfer of an appropriation from one accounting fund to another accounting fund may be made except by ordinance appropriating the funds. Within an accounting fund, the council may by resolution transfer part or all of any unencumbered funds among functions, activities and departments. The mayor may transfer part or all of any unencumbered funds within a department and may transfer part or all of any unencumbered funds between departments up to ten thousand dollars ($10,000.00) per fiscal year. (Ord. 03-11 § 2, 2003: prior code § 6.20.010)
5.04.160 Lapse of appropriations.
Every appropriation, except appropriation for a capital expenditure, shall lapse at the close of the fiscal year to the extent that it has not been fully expended or fully encumbered by June 30th. An appropriation for a capital expenditure shall continue in force until the purpose for which it was made has been accomplished or abandoned; the purpose of any such appropriation shall be deemed abandoned if three years pass without any disbursement from or encumbrance of the appropriation. (Prior code § 6.20.020)