CHAPTER XVIII. FINANCE AND TAXATION1

1 Fiscal year.

The fiscal year of the City shall commence upon the first day of July of each year.

2 Council to provide for tax system; use of County tax services.

The Council shall by ordinance provide a system for the assessment, levy and collection of all City taxes, not inconsistent with the provisions of this Charter.

The Council shall have power to avail itself by ordinance of any law of the State of Arizona, now or hereafter in force and comply with the requirements thereof whereby assessments may be made by the assessor of the county in which the City of Phoenix is situated, and taxes collected by the tax Collector of said county for and in behalf of the said City of Phoenix. Other provisions of this Charter concerning the assessment, levy and collection of taxes shall be subject to the provisions of any such ordinance while the same shall be in force.

3 City Manager to prepare annual estimate.

On or before the first Monday in May in each year, or on such date in each year as shall be fixed by the Council, the Manager of the City shall prepare a careful estimate in writing of the amounts of money, specifying in detail the objects thereof, required for the business and conduct of the affairs of the City during the next ensuing fiscal year.

4 Submission of estimates to Council; scope of Manager’s estimate.

On or before the first Monday in June of each year, or on such date in each year as shall be fixed by the Council, the Manager shall submit to the Council the estimates of each department and his own personal report and recommendation and estimate as to the probable expenditures of the City for the next ensuing fiscal year, stating the amount in detail required to meet all expenditures necessary for City purposes, including interest and sinking funds for outstanding indebtedness, if any therein, also an estimate of the amount of income expected from all sources in each department, and the probable amount required to be raised by taxation to cover such expenditures, interest and sinking funds.

5 Council to prepare budget; scope of budget.

The Council shall meet annually prior to fixing the tax levy and make a budget of the estimated amounts required to pay the expenses of conducting the business of the City government for the ensuing fiscal year. The budget shall be prepared in such detail as to the aggregate sum and the items thereof allowed to each department, office and subdivision of the City government, as the Council shall deem advisable.

6 Preparation of estimates; budget; Council action.

A.    Estimates and budget. On or before the first Tuesday in June of each year, or on such date in each year as shall be fixed by the Council, the Manager of the City shall submit to the Council a proposed budget for the ensuing fiscal year. The budget shall provide a complete financial plan of all City funds and activities for the ensuing fiscal year, and, except as required by law or this Charter, shall be in such form as the Manager deems desirable or the Council may require. The budget shall be so arranged as to show comparative figures of estimated income and expenditures for the current year; and estimated income, including the estimated property tax levy and the proposed expenditures for the coming fiscal year. Actual revenue and expenditure figures for the preceding fiscal year also may be included at the option of the Manager.

The budget shall show proposed expenditures for operating requirements and debt service during the ensuing fiscal year in such detail as the City Manager deems appropriate, proposed capital expenditures during the ensuing fiscal year; and anticipated fund balances at the beginning and end of the ensuing fiscal year.

The total of proposed expenditures shall not exceed the total of estimated income and fund balances.

B.    Council action on budget.

(1)    Notice and hearing. The City Council shall publish in one or more newspapers of general circulation in the City the general summary of the budget and a notice which states the time and places where copies of the budget are available for inspection by the public and the time and place, not less than two weeks after publication, for a public hearing on the budget.

(2)    Amendment before adoption. After the public hearing, the Council may adopt the budget with or without amendment. In amending the budget, it may add or increase programs or amounts and may delete or decrease any programs or amounts, except expenditures required or limited by law or for outstanding bonded indebtedness, provided that no amendments to the budget shall increase appropriations to an amount greater than the total of estimated financial resources available to finance such appropriations.

(3)    Adoption. The Council shall adopt the budget on or before the last day of June of the fiscal year currently ending. If it fails to adopt the budget by this date, the amounts appropriated for operating requirements and debt service for the current fiscal year shall be deemed adopted for the ensuing fiscal year on a month to month basis, with all appropriations prorated accordingly, until such time as the Council adopts the budget for the ensuing fiscal year. Adoption of the budget shall constitute appropriations of the amounts specified therein for the purpose of expenditure from the funds indicated.

(Election of 11-9-1971)

7 Annual tax levy.

The Council must finally adopt, not later than the last regularly scheduled meeting in July, an ordinance levying upon the assessed valuation of the property of the City, subject to the provisions of this Charter, a rate of taxation upon each one hundred dollars or valuation sufficient to raise the amount estimated to be required in the annual budget, less the amounts estimated to be received from fines, licenses and other sources of revenue. The City Clerk shall then certify a copy of the tax levy ordinance to the county assessor, who shall compute and carry out the amount of the taxes so levied upon each parcel of property contained within the City limits.

(Election of 11-5-1985)

8 Limitation on tax levy.

The tax levy authorized by the Council to meet the municipal expenses for each fiscal year shall not exceed, except as herein provided, the rate of $1.00 on each one hundred (100) dollars of the assessed value of all real and personal property within the City.

9 Taxes to be uniform and for public purposes only; property to be assessed at full cash value; full cash value defined.

All taxes shall be uniform upon the same class of property within the corporate limits, and shall be levied and collected for public purposes only; and all property shall be assessed at its full cash value. The term "full cash value," as used herein shall mean the price at which the property would sell if voluntarily offered for sale by the owner thereof, upon such terms as like property is usually sold and not the price which might be realized if it were sold at forced sale.

10 Tax exempt property; widow’s exemption; provisions for making certain other classes of property exempt; limitation on tax ordinances.

There shall be exempt from taxation all federal, state, county and municipal property; property of educational, charitable and religious associations and institutions not used or held for profit shall be exempted from taxation.

Public debts, as evidenced by the bonds of Arizona, its counties, municipalities, or other subdivisions, shall be exempt from taxation. There shall further be exempt from taxation the property of widows, resident of this City, not exceeding the sum of one thousand (1000) dollars, where the total assessment of said widow does not exceed two thousand (2000) dollars.

All property in the City not exempt under the laws of the United States, the laws of the State of Arizona, under the Charter and ordinances of this City, shall be subject to taxation, to be ascertained as provided by ordinance; provided, however, that when not in conflict with law the Council may by ordinance submitted to and approved by the qualified electors of the City, under the provisions of Chapter XVI of this Charter, exempt in part or in whole improvements on real estate, also personal property, exclusively used in the operation and maintenance of manufactories in the City.

No tax shall be levied except in pursuance of this Charter, and every ordinance imposing a tax shall state distinctly the object of the tax, to which object only it shall be applied.

11 Additional taxes for special purposes.

The Council shall have the power to levy and collect taxes in addition to the taxes herein authorized to be levied and collected, sufficient to pay the interest and maintain the sinking fund of the bonded indebtedness of the City and to provide for the establishment and support of free public libraries and reading rooms.

12 Cash basis fund set up; transfer of sums from cash basis fund to other funds; transfer of sums from any funds to interest funds.

The Council shall create and maintain a permanent revolving fund to be known as the Cash Basis Fund, for the purpose of putting the payment of the running expenses of the City on a cash basis. For this purpose the Council shall provide that from the money collected from the annual tax levy, and from the money received from other sources, a sum equal to not less than two and one-half (2 1/2) cents on each one hundred (100) dollars of the assessed value of said property shall be placed in such fund until the accumulated amount of such fund shall be sufficient to meet all legal demands against the Treasury for the first four (4) months or other necessary period of the succeeding fiscal year.

The Council shall have power to transfer from the Cash Basis Fund to any other fund or funds such sum or sums as may be required for the purpose of placing such fund or funds, as nearly as possible, on a cash basis. It shall be the duty of the Council to provide that all moneys so transferred from the Cash Basis Fund shall be returned thereto before the end of the fiscal year.

Whenever there shall not be sufficient moneys, in any of the interest funds for the bonded indebtedness of the City to pay the interest on such bonded indebtedness when due, the Council shall direct the transfer from the general or any other fund having moneys therein to such interest funds the necessary amounts of money to pay the interest on said bonded indebtedness, and the amounts so transferred shall be returned to the respective funds from which such transfer was made whenever sufficient moneys shall accrue in said bonded indebtedness funds, from the regular tax levied therefor.

13 Tax liens.

All taxes assessed, together with any percentage imposed for delinquency and cost of collection, shall continue liens on the property assessed; every tax on personal property shall also be a lien upon the real property of the owner thereof. The lien provided for in this section shall attach as of the first Monday in January of each year, and may be enforced by actions in any court of competent jurisdiction to foreclose such liens, or by a sale of the property affected and the execution and delivery of all necessary certificates and deeds therefor, under such regulations as are now prescribed by Statutes of Arizona for the foreclosure and collection of tax liens, or under such regulations for the foreclosure and collection of tax liens, as may hereafter be prescribed by the Council by ordinance, power to prescribe which regulations is hereby given and vested in said Council. Provided, however, that when real estate is offered for sale for City taxes due thereon, and there is no bidder therefor, the same shall be struck off and sold to the City, in like case and in like manner and with like effect and with like right of redemption, as it may be struck off and sold to the State when offered for sale for State and county taxes; and the Council shall have the power to provide for the procedure to be followed in such sales to the City and redemption thereafter.

14 Claims or demands against the City.

The City Manager or his designee must not hear or consider any claim in favor of anyone against the City unless an account properly made out giving all the items of the claim, is presented to him within one year after the last item of the account accrued, except claims of officers and employees of the City for their salaries. When the Manager finds that any claim presented is not payable by the City, or is not a proper City charge, it must be rejected; if he finds it to be a proper City charge but for a greater amount than is due, the Manager may allow the claim in part and order paid the portion allowed. A claimant who is not satisfied with the rejection of his claim or demand, or the amount allowed him on his account may sue the City therefor at any time within three months after final action of the Manager. No demand on the City shall be allowed by the Manager in favor of any person in any manner indebted to the City, without first deducting such indebtedness, or in favor of any officer whose accounts shall not have been rendered and approved or who shall have neglected or refused to make his official returns or reports in writing, as required by the provisions of this Charter, or in favor of any officer who shall willfully neglect and refuse to perform any of the duties of his office.

The Manager or his designee shall have the power to question any person presenting a demand on the City, or the agent or attorney of such person, or any other person, in order to ascertain any facts necessary or proper for him to know in order to determine the allowance or disallowance of such demand. Only those claims and demands being duly allowed by the Manager or his designee shall be drawn from money from the Treasury, except as otherwise provided in this Charter.

(Election of 11-9-1971; election of 8-25-2015, eff. 10-22-2015)

15 Payment of claims and demands.

Payment of claims and demands authorized by the Manager or his designee shall be drawn from money from the Treasury in the form of warrants, checks, electronic transfers or any other form or method of payment authorized by the Manager and City Clerk only if money is available in the appropriate fund; claims for running expenses and purchases not to exceed amount appropriated for running expenses.

No payment shall be drawn from the Treasury for running expenses, nor shall any claim for such expense be allowed, unless there shall then be money in the appropriate fund in the Treasury sufficient to pay the same. Any payment issued in violation of this section or any claim allowed contrary to its provisions, shall be invalid and unenforceable.

And no claim, on account of running expenses, which with the aggregate with all other claims theretofore allowed for such expenses during any fiscal year, which exceeds the amount appropriated for running expenses for that year, shall constitute a valid demand against the City.

And it shall be unlawful for any officer, agent, or employee of the City to purchase any materials, or supplies, or employ any labor, or service, the cost of which, with the aggregate of the cost of materials, or supplies, labor or service theretofore purchased or employed during the then current year, shall exceed the amount appropriated for running expenses for that year.

Notwithstanding any provision of this Charter to the contrary the Council shall have the power to establish a Check Purchase Order System utilizing an Imprest Checking Account for limited routine expenditures. Any Ordinance establishing such a system shall specify the circumstances under which the system may be employed, including the limitations on the type of transactions subject to the system, amounts that may be expended and the classes of employees that may be authorized to make use of the system. The City Manager shall designate and appoint in writing those individual employees authorized to use the Check Purchase Order System. The Imprest Checking Account shall be funded by warrant in an amount determined by the Council.

(Election of 11-6-1979; election of 8-25-2015, eff. 10-22-2015)

16 Disposition of City funds collected or received.

Every officer collecting or receiving any moneys belonging to or for the use of the City shall settle for the same with the City Treasurer on or before the last day of each month or at more frequent intervals as may be directed by the Manager, and immediately pay the same to the City Treasurer, for the benefit of the funds to which said moneys severally belongs. When the last day of the month falls on Sunday or a legal holiday, the said payments shall be made on the next preceding business day.

17 Depositories for City moneys; investments.

In addition to authority granted by Arizona Statutes, the Council may cause City moneys to be deposited or invested in Certificates of Deposit or other forms of deposit or investment, in any financial institution within the United States, upon sufficient security being given the City therefor by said financial institution, the policies and administration relating to such investments and security to be as provided by ordinance adopted by the Council.

(Election of 11-9-1971; election of 11-1-1983)

18 Capital improvement program.

A.    Preparation. The City Manager shall prepare and submit to the Council a five year capital improvement program at least three months prior to the final date for submission of the budget, or on such date in each year as shall be fixed by the Council. The capital improvement program shall list all capital improvements proposed to be undertaken during the next five fiscal years next ensuing, including appropriate supporting explanations of the necessity for improvements, costs estimates, proposed methods of financing and recommended time schedules for each improvement. The program shall be in such form as the Manager deems appropriate. The program may be revised and extended each year with regard to capital improvements still pending or in the process of construction or acquisition.

B.    Council action on capital improvement program. The Council shall hold a public hearing on the proposed capital improvement program submitted by the City Manager. A notice of the time and place of such public hearing shall be published in the official City newspaper not less than two weeks prior to such public hearing. After the public hearing, the Council, by resolution, shall adopt the tentative capital improvement program with or without amendment.

(Election of 11-9-1971)

19 Exemption of certain goods from taxation.

In accordance with the provisions of Chapter XVIII, Section 10, of this Charter, all goods, merchandise, raw material, finished products, stock and inventory, whether unfabricated, partly fabricated, or fully fabricated, exclusively used or intended for use in and about, or in connection with the operation or maintenance or both of any manufactory or manufactories located within the City of Phoenix shall be exempt from all taxation. This exemption shall pertain exclusively to personal property known as inventories of manufactories. In accordance with the provisions of Chapter XVIII, Section 10, of this Charter all equipment and machinery exclusively used in the operation or maintenance or both of any manufactory or manufactories located within the City of Phoenix which shall be primarily engaged in the fabrication of products shall be assessed for tax purposes at thirty percent (30%) of their valuation based on cost less depreciation.


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State Law reference—Taxation, A.R.S. § 42-1001 et seq.