Chapter VI.
BUDGET PROCEDURE AND GENERAL FINANCE PROVISIONS

Section 6.1. Fiscal Year. The fiscal year of the city shall be as established by the council, unless otherwise provided by law.

Section 6.2. Budget Statement of City. During or prior to the sixth week preceding the first day of the fiscal year, a budget proposal for the next fiscal year of the city shall be prepared. Such budget proposal shall set forth the recommendations for and an analysis of the anticipated income and expenditures of the city during the next fiscal year, together with comparative figures showing the estimated corresponding amounts for the current year and comparisons with the previous year. The proposed expenditures set forth in the budget proposal shall not exceed the expected revenues of the city. Unencumbered funds remaining at the end of the current fiscal year may be reallocated for the purposes set forth in the budget proposal.

Section 6.3. Budget Adoption Procedure. (a) The budget proposal shall be reviewed by the council and shall be available for public inspection in the office of the city clerk.

(b)    The council shall direct that a public hearing on the budget proposal be held not less than one week before its final adoption. A notice of the public hearing shall be published at least one week prior to the date of hearing.

(c)    At a regular meeting held not less than ten days prior to the end of the fiscal year, the council shall, by resolution, adopt a budget for the following fiscal year and make an appropriation of the money needed therefor.

(d)    If the council does not adopt a budget prior to the third day preceding the commencement of the next fiscal year, the budget proposal shall become an appropriation and the budget for the fiscal year without further council action.

Section 6.4. Budget Control. (a) Unencumbered appropriation balances may be transferred within a department by the council at any time on its own initiative; the council may transfer unencumbered balances from one office, department or agency to another.

(b)    There shall be submitted periodically to the council information comparing estimated and actual revenues and expenditures to the end of the preceding month.

Section 6.5. Withdrawal of Funds. (a) All funds drawn from the treasury shall be drawn pursuant to the authority and appropriation of the council.

(b)    The council shall prescribe the method for the disbursement of city funds.

Section 6.6. Independent Audit. An independent audit shall be made of all accounts of the city at least annually and more frequently if deemed necessary by the council. The annual audit shall be made by a certified public accountant firm employed by the council and shall be completed within one hundred eighty days following the close of the fiscal year. An analysis of the audit shall be published by the council. (Reso. 08-40 § 1; 10-2-01)

Section 6.7. Permanent Fund. (a) There is established as a separate account, the Valdez permanent fund. All amounts received by the city from the sale of Marine Terminal Revenue Bonds for its own use and expenditure, as well as any other funds that may subsequently be so designated by the city council, shall be placed in the fund. Each year on the first business day of the city’s fiscal year, one and one-half percent (1.5%) of the permanent fund’s market value, as determined on the last day of the last accounting year that has been certified by an annual audit, shall be transferred into the general fund for appropriation for operational and capital expenses of the city. The remaining funds and any other funds appropriated for deposit in the permanent fund shall not be spent, but shall be held perpetually in trust for the benefit of the present and future generations of Valdez residents. The fund shall be administered in accordance with the provisions of this section.

(b)    Funds placed or deposited in the permanent fund are fund principal which shall be invested in perpetuity only in investments specifically designated in this section, regardless of other provisions of law dealing with permissible investments of city funds.

(c)    The assets of the fund may be invested in the following:

(1)    Publicly traded equity investments, including but not limited to preferred and common stock and investment company shares;

(2)    Debt instruments that have been issued by domestic and non-domestic entities including but not limited to the U.S. government, its agencies and instrumentalities;

(3)    Obligations secured by reserves paid in by the United States or agencies or instrumentalities of the United States or corporations in which the United States is a shareholder or member;

(4)    Bank certificates of deposit which are secured as to the payment of principal and interest in accordance with Alaska law; and

(5)    Corporate obligations of prime or equivalent quality as recognized by a nationally recognized rating organization;

(6)    Domestic and foreign common stocks and preferred stocks of publicly traded companies, provided that the total exposure to stocks shall be diversified among issuers and will not exceed sixty-five percent (65%) of the market value of the permanent fund;

(7)    Real estate investments in a portfolio of institutional quality properties (as defined in the investment policy), held in a collective investment vehicle, and managed by a registered investment advisor; provided, that total exposure to real estate investments shall not exceed fifteen percent (15%) of the market value of the permanent fund.

(d)    Investment policy shall be formulated by the city council. In formulating investment policy, the council shall consider maximum income and appreciation, consistent with prudent levels of risk and diversification, governed by the prudent investor rule. If an allocation in section 6.7(c) is exceeded, corrective action shall be taken in a reasonable time in accordance with the policy adopted by the city council or its designee.

(e)    The council has the power to:

(1)    Delegate the power to invest the fund to the city manager or other city official, and require reports relating to the investment as it prescribes;

(2)    Hire other persons as necessary to assist the council in the exercise of its powers; and

(3)    Take whatever other actions are reasonably necessary in furtherance of the purpose of this section. (Reso. 07-59, § 1; 6-6-06; Reso. No. 97-27, § 1; 7-19-77.)