Chapter 3.05
BUDGET
Sections:
3.05.010 Budget submission – Contents.
3.05.011 City Manager’s budget message.
3.05.012 Complete financial plan.
3.05.015 Review – Hearing – Adoption – Appropriations.
3.05.017 Minimum annual transfer for Homer Accelerated Roads and Trails capital accounts.
3.05.030 Unencumbered balances of appropriations – Transfers.
3.05.035 Lapse of appropriation at end of fiscal year.
3.05.045 Balanced budget requirements.
3.05.047 Capital asset repair and maintenance allowance fund.
3.05.048 Capital improvement fund.
3.05.049 General fund – Fund balance.
3.05.005 Budget assumptions.
The City of Homer operates on a traditional biennial budget beginning with the two-year biennium commencing January 1, 2020. The 2020-21 biennial budget and all subsequent budgets shall be prepared, considered and adopted under the provisions of this chapter. The budget shall be adopted every second year of a mayoral term. By the third Friday in April the City Manager shall present to the Council an overview of preliminary budget assumptions for a budget period containing the next two fiscal years. These preliminary assumptions will address, by fund, revenue projections, tax and utility rates, program additions or deletions, wages and benefits, or other issues with potential effects upon the City’s overall financial condition. [Ord. 20-89 § 2, 2020; Ord. 19-35(S)(A) § 1, 2019; Ord. 13-17(S) § 5, 2013; Ord. 93-14 § 2, 1993].
3.05.010 Budget submission – Contents.
By the third Friday in May of a budget year, the City Manager shall present to the Council a budget proposal covering each of the next two fiscal years of the City. [Ord. 20-89 § 2, 2020; Ord. 19-35(S)(A) § 1, 2019; Ord. 93-14 § 2, 1993].
3.05.011 City Manager’s budget message.
The City Manager’s budget message shall explain the budget in fiscal terms and in terms of work programs. It shall contain an outline of the proposed financial policies of the City for the ensuing two fiscal years, describe the important features of the budget, indicate any major changes from the prior budget period and from current financial policies, expenditures, and revenues, together with the reasons for such changes, summarize the City’s debt position and include other material as deemed desirable. [Ord. 20-89 § 2, 2020; Ord. 19-35(S)(A) § 1, 2019; Ord. 93-14 § 2, 1993].
3.05.012 Complete financial plan.
a. The budget shall provide a complete financial plan of all City funds and activities for the next two fiscal years. In organizing the budget, the City Manager shall utilize the most feasible combination of expenditure classification by fund, organizational unit, program, purpose or activity and objective.
b. The budget shall begin with a clear general summary of its contents, which summary shall show principal sources of anticipated revenue, stating separately the amount to be raised by property taxes, and by department the kinds of expenditures in such a manner as to present to the public a clear and simple estimate of budget detail.
c. The budget shall show in detail all estimated income, including the proposed property tax levy, but shall exclude State revenue sharing, which will be appropriated when received. The budget also shall show in detail all proposed expenditures, including debt service, for the ensuing budget period.
d. The budget shall be prepared on a modified accrual basis and subsequent reporting shall recognize revenues when they become available and measurable and recognize expenditures when liabilities are incurred.
e. The budget shall include in separate sections:
1. Proposed expenditures for current fund operation during the ensuing budget period detailed by offices, departments and agencies in terms of their respective work programs, and the method of financing such expenditures;
2. Anticipated net surplus or deficit (fund balance) for the ensuing budget period of each fund owned or operated by the City and the proposed method of its disposition; subsidiary budgets for each such fund, giving detailed income and expenditures information, shall be presented in the budget;
3. Proposed capital budget will be presented as a separate section of the biennial budget. The capital budget shall show capital expenditures during the ensuing budget period, detailed by offices, departments and agencies, when practicable, and the proposed method of financing each such capital expenditure.
f. Comparative data for the previous and ensuing budget periods shall be provided in a format for ease of comparison of previous proposed revenues and expenditures. [Ord. 20-89 § 2, 2020; Ord. 19-35(S)(A) § 1, 2019; Ord. 15-16 § 1, 2015; Ord. 93-14 § 2, 1993].
3.05.015 Review – Hearing – Adoption – Appropriations.
a. At a Council meeting held not less than 10 days prior to the end of the current budget period, the Council shall, by ordinance, appropriate the money needed for the ensuing budget period.
b. The budget proposal of the City Manager shall be reviewed by the Council and shall be available for public inspection in the office of the City Clerk and posted on the City’s website.
c. A public hearing on the appropriation ordinance shall be held in accordance with provisions for adoption of an ordinance. All interested parties shall be given an opportunity to be heard on matters relative to the budget.
d. A separate appropriation shall be made to each of the various funds of the City. From the effective date of the budget, the amounts stated therein as expenditures shall be and become appropriated to the objects and purposes therein named. The City Council may make supplemental and emergency appropriations, but payment may not be authorized or made and an obligation may not be incurred except in accordance with approved appropriations.
e. The City Council shall provide for a midbiennium review, and any modification shall occur no sooner than eight months after the start, but no later than the conclusion, of the first year of the biennium. The City Manager shall prepare a proposed budget modification and the City shall provide for publication of notice of hearings consistent with publication of notices for adoption of other City ordinances. Such proposal shall be submitted to the City Council and shall be a public record and be available to the public. A public hearing shall be advertised at least once and shall be held no later than the first regular Council meeting in December and may be considered from time to time. At such a hearing or thereafter, the Council may consider a proposed ordinance to carry out such modifications. [Ord. 20-89 § 2, 2020; Ord. 19-35(S)(A) § 1, 2019; Ord. 98-20(A), 1998; Ord. 93-14 § 2, 1993].
3.05.017 Minimum annual transfer for Homer Accelerated Roads and Trails capital accounts.
The annual budget will transfer a minimum of $550,000 of the three-quarters percent dedicated sales tax levied for Homer Accelerated Roads and Trails exclusively for the purpose of funding street reconstruction improvements and related utilities, construction of new local roads, and construction of new local trails. [Ord. 20-89 § 2, 2020; Ord. 17-40(A) § 1, 2017].
3.05.020 Amendments.
The Council may, by ordinance, increase or decrease appropriations during the course of the budget period, and may also amend the budget using the same method used for its initial adoption. [Ord. 20-89 § 2, 2020; Ord. 19-35(S)(A) § 1, 2019; Ord. 93-14 § 2, 1993].
3.05.025 System of accounts.
All City accounts shall be organized in a manner consistent with the approved budget. The City Council may supplement or further delineate designations. [Ord. 20-89 § 2, 2020; Ord. 19-35(S)(A) § 1, 2019; Ord. 93-14 § 2, 1993].
3.05.030 Unencumbered balances of appropriations – Transfers.
a. The necessary accounting records shall be maintained to reflect the unencumbered balances of all appropriations. The Finance Director/Treasurer shall submit to the City Council a quarterly report reflecting operating activity and anticipated expenditures.
b. Unencumbered appropriation balances may be transferred from one budget line item to another within the same department by the City Manager at any time. Transfer of appropriations within departments which would permanently amend the approved staffing level or level of service delivery shall require Council approval.
c. At the request of the City Manager, or on its own initiative, the Council may, by resolution, transfer unencumbered appropriation balances from one department to another within the same fund. [Ord. 20-89 § 2, 2020; Ord. 19-35(S)(A) § 1, 2019; Ord. 93-14 § 2, 1993].
3.05.035 Lapse of appropriation at end of fiscal year.
a. Except as provided in this section and in HCC 3.05.047 through 3.05.049, appropriations shall lapse at the end of the fiscal year to the extent that they have not been fully expended or fully encumbered. Any earnings from investment of monies accumulated in a fund shall accrue to the fund.
b. An appropriation for a capital expenditure shall continue in force until the purpose for which it is made has been accomplished or abandoned; the purpose of such appropriation shall be deemed abandoned if three years pass without disbursement or encumbrance of the appropriation. [Ord. 20-89 § 2, 2020; Ord. 19-35(S)(A) § 1, 2019; Ord. 94-5 § 2, 1994; Ord. 93-14 § 2, 1993].
3.05.040 Equipment replacement reserve fund.
Repealed by Ord. 19-35(S)(A). [Ord. 93-14 § 2, 1993].
3.05.042 Alternative funding for depreciation.
Repealed by Ord. 19-35(S)(A). [Ord. 05-11(S) § 2, 2005].
3.05.043 Health insurance reserve fund.
Repealed by Ord. 19-35(S)(A). [Ord. 94-5 § 1, 1994].
3.05.045 Balanced budget requirements.
Projected expenditures shall not exceed projected revenues in the operating budget.
Any action to reconsider, rescind, or veto the budget which would affect a balanced budget must be accompanied by action which maintains a balanced budget. [Ord. 20-89 § 2, 2020; Ord. 19-35(S)(A) § 6, 2019; Ord. 93-14 § 2, 1993].
3.05.047 Capital asset repair and maintenance allowance fund.
a. There is established in the general fund a capital asset repair and maintenance allowance fund (CARMA). The amount of the fund shall be established by City Council in the biennial budget based on the projected maintenance and repair needs of the City.
b. Purpose. Capital asset management is essential to extending the life and use of taxpayer funded assets, facilities and infrastructure.
c. Funds in the capital asset repair and maintenance allowance fund shall be available for appropriation and expenditure for equipment replacement, fleet replacement, engineering, or planning services, major maintenance of City facilities, or any other purpose as identified and recommended by the City Manager and authorized by the City Council. [Ord. 20-89 § 2, 2020; Ord. 19-35(S)(A) § 7, 2019].
3.05.048 Capital improvement fund.
There is established a capital improvement fund (CIF). The fund shall be comprised of various Council appropriations for capital projects, acquisitions or initiatives as identified and authorized by the City Council which shall not be limited to only the current budget period. [Ord. 20-89 § 2, 2020; Ord. 19-35(S)(A) § 8, 2019].
3.05.049 General fund – Fund balance.
a. Purpose – General Fund. The fund balance of the general fund represents the net assets of the general fund and serves as a measure of financial resources.
b. There is established within the fund balance of the general fund an amount equal to four months; revenue for the current fiscal year that is restricted to emergency use only. Emergency restricted fund balance shall only be spent to help the City of Homer provide quick response to weather, economic uncertainty and unexpected situations such as natural disasters so as to avoid the need for short-term borrowing.
c. Unassigned fund balance shall be available for appropriation by City Council.
d. Any general fund budget surplus at the end of a fiscal year will lapse into the general fund – fund balance. [Ord. 20-89 § 2, 2020; Ord. 19-35(S)(A) § 9, 2019].
3.05.050 Priority of funding.
Within the general fund during the biennial budget process available revenue will be budgeted in the following priority order in order to meet the financial obligations of the City of Homer:
a. Operating budget.
b. General fund – fund balance restricted.
c. Capital asset repair and maintenance allowance fund.
d. General fund – fund balance unrestricted. [Ord. 20-89 § 2, 2020; Ord. 19-35(S)(A) § 10, 2019].