Chapter 3.04 FISCAL PROCEDURES</h2>

(A) On or before the third Tuesday of April each year, the manager shall submit a comprehensive budget to the assembly with an accompanying message and the proposed appropriation and tax-levying ordinance.

(B) On or before the last Tuesday in March, the school board shall provide to the manager a proposed budget for school operations and capital outlay for the ensuing fiscal year. On the first day of April, the school board shall submit to the assembly the school budget for the following fiscal year, together with a school budget message. On the first Tuesday in April, the school board shall formally present to the assembly, the assembly shall establish a date for a budget study session with the school board and shall set a date for a public hearing on the budget ordinance. Prior to the public hearing on the budget ordinance, the assembly, the school board or both shall hold a public hearing on the proposed school budget. The assembly shall approve a total sum to be made available for the school board not later than the first day of May, by resolution or as a part of the ordinance adopting the budget.

(C) The attorney and clerk shall provide their budgets for each fiscal year to the manager, according to the manager’s budget timelines, and the manager shall include their proposed budgets, as submitted, in the comprehensive budget to the assembly.

(Ord. 02-089, § 2, 2002; Ord. 94-001AM, § 4 (part), 1994; Ord. 84-12, § 2, 1984; Ord. 81-159, § 2, 1982; Ord. 75-17, § 3, 1975; Ord. 66-8 (part), 1966)

3.04.030 BUDGET MESSAGE; CONTENTS.

The budget message shall explain the budget both in fiscal terms and in terms of work programs. It shall outline the proposed financial policies for the ensuing fiscal year, describe important features of the budget, indicate any major changes from the current year in financial policies, expenditures and revenues, together with the reason for the changes, summarize the debt position, and include other material as the submitting authority deems desirable or the assembly requests.

(Ord. 94-001AM, § 4 (part), 1994; Ord. 66-8 (part), 1966)

3.04.040 BUDGET; CONTENTS.

The budget shall provide a complete financial plan of all borough funds and activities for the ensuing fiscal year and shall be in a form as the manager deems desirable or the assembly may require. It shall begin with a clear general summary of its contents, shall show in detail all estimated income, indicate the proposed property tax levy, and show in detail all proposed expenditures, including debt service for the ensuing fiscal year, and shall be arranged as to show comparative figures for estimated income and expenditures of the current fiscal year and actual income and expenditures for the previous fiscal year. The total of proposed expenditures shall not exceed the total of estimated income and available fund balance from the prior year.

(Ord. 94-001AM, § 4 (part), 1994; Ord. 66-8 (part), 1966)

3.04.045 Funding formula for local school support. [Repealed by Ord. 18-014, § 2, 2018]

3.04.046 LOCAL EDUCATION FUNDING.

(A) Local education funding shall consist of two separate components: education annual operating funds and education annual debt service.

(B) Education Annual Operating Funds. The manager shall prepare the annual budget with education annual operating funds provided to the school district at dollar amount equivalent of a 6.30 mill tax levy on the full and true value of the taxable real and personal property for the upcoming fiscal year as of February 1st.

(C) Education Annual Debt Service. Education annual debt service is the local appropriation needed to cover the voter approved general obligation debt related to schools and educational facilities. The manager may not request an increase in the total amount of education annual debt service unless:

(1) mandated by state law;

(2) it is required by a failure of the state of Alaska to provide match funds for education debt service; or

(3) an increase is needed because the voters approve a bond measure for construction or repair of school buildings which requires addition to the amount needed for the borough’s portion of annual debt service.

(D) Expiration. The ordinance codified in this section shall expire July 1, 2023.

(Ord. 18-014, § 3, 2018)

3.04.050 SCHOOL SYSTEM BUDGET; CONTENTS.

(A) The contents of the school system budget shall include actual revenues for the previous year, budgeted and estimated revenues for the current year, and estimated revenues for the proposed budget year together with a narrative explanation of all revenues and the basis for revenue estimates; a narrative explanation of the functions of each major expenditure category and comments on the major changes proposed or required; the summarized costs of conducting each major category and a detailed listing of the costs within district services which are not identified with a particular school; the personnel complement of the school system by categories; enrollment data; and cost per student data for comparative years and an explanation of budget increases. Cost data shall include actual expenditure for the previous year, budgeted and estimated expenditures for the current year, and estimated expenditures for the proposed budget year, and to include a personnel comparison for fiscal years included in the budget document.

(B) School Budget Educational Operating Fund Expenditures Format.

(1) The annual projected budget prepared for the borough by the school district shall be presented and organized by line item with information for each school site or district department. For each site or department, provide itemized expenditures detailed by fund function, location, and object for site-centered programs. District-wide programs are reported by fund, function, and object. Items including but not limited to those noted below will be listed as objects in the budget:

(a) number and type of personnel (i.e., principals, teachers, aides, custodians, support staff);

(b) material and supply budgets;

(d) curriculum;

(e) utilities;

(f) co-curricular activities;

(g) travel;

(h) professional and technical services;

(i) special education services;

(j) projected class sizes;

(k) other;

(l) public facility use;

(m) school budget itemizations as required by state law;

(n) insurance;

(o) workers compensation; and

(p) legal and litigation costs.

(2) The budget shall also provide the cost for each line item from the previous fiscal year, including changes in the number of personnel, so year-to-year comparisons can be made.

(D) Non-Operating Fund School Budgets, including Pupil Transportation Fund, Nutrition Services Fund and Other Budgets (Including Grants).

(1) For expenditures outside the school district operating fund, funded by user fees, direct state and federal grants for educational support services provide a compiled detailed budget with the level of detail as specified in operating expenditures, subsection (B)(1) of this section. Grant budgets are available July 1st. The budget as formatted for the granting agency will be forwarded to the assembly to report these revenues and expenditures.

(E) Unfunded Mandate. For the current fiscal year, provide the borough with a report on unfunded state and federal education mandates. The report shall provide the cost to the district of providing mandated services above and beyond anticipated state and federal funding for the mandated educational services. The report should not be a line itemization or cost per student breakdown, rather a report on the cost of providing for the mandates and revenue provided.

(Ord. 09-168, § 2, 2010: Ord. 94-001AM, § 4 (part), 1994; Ord. 77-32, § 3, 1977; Ord. 66-8 (part), 1966)

3.04.055 LONG-RANGE EDUCATION FINANCIAL PLAN.

(A) The school district shall present to the borough assembly a three-year financial plan by May 1st of each year.

(1) The financial plan shall include projections of school district enrollment, expenditures and revenues for each of the next three fiscal years.

(a) The plan will include the operating costs of any projected new district-operated school or facility.

(b) The plan will identify any projected funding shortfalls and provide planning options to fill the gap, including: (i) revenue enhancements; and (ii) reductions, while providing cost, personnel impact and class size impacts for each option.

(2) The plan shall also include bar graphs to illustrate enrollment, expenditures and revenues for each of the next three fiscal years.

(Ord. 09-168, § 3, 2010)

3.04.060 CAPITAL PROGRAM; SUBMISSION AND CONTENTS.

(A) For all facility requirements for the school system, the school board shall submit a proposed capital improvement program to the manager by October 1st of each year.

(B) For all public facility requirements of general government, excluding schools, the manager shall prepare a proposed capital improvement by October 1st of each year.

(1) a clear general summary of its contents;

(2) a list of all capital improvements which are proposed to be undertaken during the six fiscal years next ensuing after the budgeted year, with appropriate supporting information describing the need for those improvements;

(3) cost estimates, including methods of financing and time schedules for completion of each improvement;

(4) estimates of all personnel, maintenance and operations costs, in present dollars, for each capital improvement project to be supported by appropriations made during the following fiscal year or supported through bond sales approved during the following fiscal year.

(D) By October 15th of each year, the manager shall submit capital improvement programs prepared by the administration and the school board to the planning commission for review and comment. The commission shall return the capital improvement programs together with its analysis to the manager no later than November 15th of every year.

(E) The manager shall submit the proposed capital improvement program for general government and for the school system to the assembly no later than December 1st of each year, together with implementing legislation. The manager’s capital improvement program shall contain the information described in subsection (C) of this section, the manager’s recommendation and commentary, together with any recommendations of the planning commission and the school board.

(Ord. 11-086, § 2, 2011: Ord. 97-082, §§ 2—5, 1997; Ord. 94-001AM, § 4 (part), 1994; Ord. 84-34, § 22, 1984; Ord. 79-70, § 1, 1979)

3.04.070 BUDGET AND CAPITAL PROGRAM; ASSEMBLY ACTION.

(A) The assembly shall publish a general summary of the budgets and the capital program. The public hearing on the budgets and capital program shall follow the required publication by at least one week, may be held separately or in connection with a regular or special assembly meeting, and may be adjourned from time to time. After the public hearing, the assembly may adopt, with or without amendment, the proposed annual budget and the proposed capital program. The assembly may make supplemental and emergency appropriations. No payment may be authorized or made and no obligation incurred against the borough except in accordance with appropriations duly made.

(B) Nothing contained in this section or in other sections of this chapter is intended to prevent the authorizing of payments or making of contracts for capital improvements to be financed wholly or partly by the issuance of bonds, nor is it intended to prevent the making, when permitted by law, of any contract or any lease providing for the payment of funds at a time beyond the end of the fiscal year in which the contract or lease is made. But any contract, lease or other obligation requiring the payment of funds from the appropriation of a later fiscal year, or of more than one fiscal year, shall be made or approved by ordinance.

(Ord. 94-001AM, § 4 (part), 1994; Ord. 66-8 (part), 1966)

Statutory reference:

For provisions regarding budget and capital programs, see A.S. 29.35.100

3.04.075 Tax levy limitation. [Repealed by Ord. 18-015, § 2, 2018]

3.04.076 TAX CAP.

(A) The areawide real property mill rate may not exceed 10.50 mills.

(B) The nonareawide real property mill rate may not exceed 0.6 mills.

(C) Mill rate increases to pay the borough’s portion of voter approved bonds issued on an areawide or nonareawide basis after July 1, 2018, may be added to the respective areawide or nonareawide mill rate at any time during which the bond issuance is being repaid.

(D) If the state of Alaska fails to provide match funds for bonds, mill rate increases to pay the borough’s portion of voter approved bonds may be added to the respective areawide or nonareawide mill rate at any time during which the bond issuance is being repaid.

(E) Unless approved by voters, any new areawide or nonareawide tax or increase in the rate of an existing tax not addressed in subsections (A) through (D) of this section shall result in a proportional reduction in the maximum mill rate based upon the then existing value of a mill.

(F) Service area mill rates may not be increased by more than two percent over the prior year’s rate. Exceptions may be made by the Assembly in cases of need or where a board of supervisors for the service area requests a higher rate.

(G) Expiration. The ordinance codified in this section shall expire July 1, 2023.

(Ord. 18-015, § 3, 2018)

3.04.080 BUDGET; ADOPTION.

(A) The assembly shall adopt the budget by May 31st of the fiscal year currently ending through the passage of an appropriating and tax levying ordinance. Adoption of the budget shall constitute appropriations to the general government and school system in the total amounts specified in the budget for each as expenditures from the funds indicated and shall constitute a levy of the property tax proposed in the budget.

(B) Notwithstanding subsection (A) of this section, classification and pay plans shall be adopted in accordance with MSB 2.52.

(Ord. 94-001AM, § 4 (part), 1994; Ord. 92-031, § 2, 1992; Ord. 81-159, § 3, 1982; Ord. 66-8 (part), 1966)

3.04.085 APPROPRIATIONS FROM FUND BALANCE.

(A) No ordinance appropriating moneys from the fund balance is valid or effective unless the motion for its adoption receives five affirmative votes.

(B) The requirement of subsection (A) of this section does not apply to:

(1) the annual adoption of the budget under MSB 3.04.080;

(2) the appropriation of moneys restricted at their source to a limited purpose;

(3) appropriations from the fund balance that, to the extent fund balance moneys are used, are identified in the appropriating ordinance as coming from unanticipated revenues to the fund.

(Ord. 94-001AM, § 4 (part), 1994; Ord. 86-94, § 2, 1986)

3.04.090 CAPITAL PROGRAM; BOND ELECTION RESOLUTION; LIMITATION ON ISSUANCE.

(A) A bond election resolution shall be introduced by the manager based on the manager’s recommended six-year capital improvement program which shall outline all the propositions to be placed before the voters at the next general or special election for that portion of the program to be financed by bonds.

(B) The bond election resolution, as finally approved by the assembly, shall contain those projects outlined in the approved capital improvement program. Subsequent additions of projects to be financed by bonds shall be scheduled for inclusion in the following year’s capital improvement program.

(C) Areawide general obligation bonds may be issued only if the principal amount of debt outstanding for areawide purposes after issuance does not exceed seven percent of the assessed valuation of the borough for the current year.

(Ord. 94-001AM, § 4 (part), 1994; Ord. 83-85, § 2, 1983; Ord. 70-13, § 3, 1970; Ord. 66-8 (part), 1966)

3.04.095 GENERAL FUND BALANCE POLICY AND RESERVATIONS.

(A) A reserve of the general fund balance shall be maintained in an amount equal to a minimum of either 22.2 percent of all annual budgeted operating expenditures excluding the budgeted operating expenditures of the school district or $25,000,000, whichever is less. The purpose of this reserve shall be to maintain the borough’s credit worthiness, provide liquidity and protect essential borough programs and requirements during periods of economic downturn or catastrophic loss.

(B) A reserve for contingencies shall be established within the general fund in an amount not to exceed $1,250,000. Expenditures from the reserve shall be limited to unanticipated expenditures resulting from natural or human caused disasters including disaster response expenses. Use of this reserve is only allowed after the issuance of the formal declaration of emergency. A report shall be made to the assembly no later than the next regular meeting following an expenditure from the contingency reserve. Any expenditure for continued response or recovery would require assembly approval prior to the transfer of any funds from this reserve.

(C) A reserve for capital shall be established within the general fund in an amount not to exceed $1,250,000. This reserve shall only be utilized for one-time capital expenditures or site acquisition costs. Expenditures require five affirmative votes of the assembly.

(D) [Repealed by Ord. 04-048(AM), § 2, 2004]

(E) A reserve for major repair and renovation shall be established within the general fund in an amount not to exceed $5,000,000. Annual contributions to the reserve shall not exceed $1,000,000. Expenditures from the reserve shall only be for qualified projects as determined in accordance with the criteria approved in Action Memorandum 04-042, and shall require five votes of the assembly to appropriate.

(F) Should the reserve of the general fund balance fall below the minimum established in subsection (A) of this section, the manager shall submit a plan to the assembly to rebuild the fund balance within a 12-month period.

(Ord. 15-086, § 2, 2015; Ord. 14-090, § 2, 2014; Ord. 11-134, § 2, 2011; Ord. 11-071, § 2, 2011; Ord. 04-106, § 2, 2004; Ord. 04-048(AM), §§ 2, 3, 2004; Ord. 03-066, § 2, 2003; Ord. 02-068, § 2, 2002)

3.04.100 TRANSFER OF APPROPRIATION.

No transfer of an appropriation from one accounting fund to another accounting fund may be made except by ordinance reappropriating the funds. Within an accounting fund, the assembly may transfer part or all of any unencumbered funds among functions or activities. The manager may transfer funds within any department, function or activity.

(Ord. 84-34, § 23, 1984; Ord. 66-8 (part), 1966)

3.04.110 REPORTING AND LAPSE OF APPROPRIATIONS.

(A) Every appropriation, except an appropriation for a capital expenditure, shall lapse at the close of the fiscal year to the extent that it has not been obligated by the receipt of goods or services 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 capital expenditure appropriation shall be deemed abandoned if three years pass without any disbursement from or encumbrance of the appropriation.

(B) At the first regular assembly meeting following the anniversary date of each appropriation for a capital expenditure, the manager shall provide to the assembly a report containing the following:

(1) the name of the project;

(2) the amount and date of the appropriation and amendments to the appropriation;

(3) the source or sources of the project funds;

(4) disbursements made to date;

(5) unpaid encumbrances;

(6) the difference between the amount appropriated and the sum of the amounts reported under subparagraphs (B)(4) and (5);

(7) percentage of project completion; and

(8) estimated completion date.

(C) Notwithstanding other provisions of this section, the school district may carry over from one year to the next their unassigned fund balances, not exceeding the amount allowed by the then-current version of A.S. 14.17.505. The school district may not be required to calculate these carry-over funds as revenues for the purposes of determining the amount of lapse funds for the following fiscal year’s budget. All funds in excess of the amounts allowed to be carried over by the then-current version of A.S. 14.17.505 shall lapse in accordance with subsection (A) of this section.

The school district shall deliver a separate report and accounting in writing to the assembly annually showing the existing carry-over accrued fund balance as of the date of the report. Such report shall be dated and delivered on the same day as the school district’s budget request.

(D) [Repealed by Ord. 18-065, § 3, 2018]

(Ord. 18-065, §§ 2, 3, 2018; Ord. 13-096, § 2, 2013; Ord. 11-071, § 3, 2011; Ord. 09-089, § 2, 2009; Ord. 07-039(AM), § 2, 2007; Ord. 96-113, § 2, 1996; Ord. 94-001AM, § 4 (part), 1994; Ord. 92-056, § 2, 1992; Ord. 87-74, § 2, 1987; Ord. 66-8 (part), 1966)

3.04.115 UNEXPENDED SCHOOL CAPITAL PROJECTS FUNDS.

(A) Unexpended proceeds from the sale of general obligation bonds issued for school capital improvements shall, upon completion of those improvements, be automatically transferred to an assembly restricted reserve account. The assembly may appropriate moneys from the restricted reserve account to cover emergencies in school capital improvement projects or unanticipated shortfalls existing in other school capital improvement projects, or, devote any portion of those moneys to debt service on existing bonded indebtedness for school capital improvements, and all other school capital projects as contained in the five-year capital improvement plan.

(B) Ballot propositions submitting the question of issue of general obligation bonds for school capital improvements to the voters shall contain language substantially similar to that of subsection (A) of this section, advising voters of the disposition of unexpended proceeds from the sale of the bonds.

(Ord. 94-001AM, § 4 (part), 1994; Ord. 79-66, § 2, 1979)

3.04.120 CENTRAL TREASURY; MANAGEMENT; PERMITTED INVESTMENTS.

(A) The manager shall be responsible for treasury management, including investment and reinvestment of all revenues of the general government, the school system and of any other agencies or districts subsequently created or incorporated into the borough.

(B) The investment, collateralization and bidding procedures for borough funds shall be controlled as established by assembly resolution.

(Ord. 94-001AM, § 4 (part), 1994; Ord. 78-26, § 3, 1978; Ord. 66-8 (part), 1966)

3.04.125 Investment and Collateralization Requirements. [Repealed by Ord. 94-001AM, § 4 (part), 1994]

3.04.130 CENTRAL ACCOUNTING.

All accounting functions of the general government and any other agencies or districts of the borough shall be performed by the central accounting office. The central accounting office shall maintain and report summary information and control revenue and disbursements of the school system. In the absence of resolutions from the school board and the assembly providing for the transfer of all accounting functions for the school system to the central accounting office, responsibility for maintenance of all other accounting functions of the school system shall lie with the school board. The central accounting office shall be under the direction of the finance director. The costs of operation of the central accounting office shall be budgeted for in the general government’s appropriation.

(Ord. 78-34, § 3, 1978)

3.04.131 FIXED ASSET CAPITALIZATION POLICY.

All fixed assets that qualify as capital equipment shall be capitalized and recorded in the General Fixed Asset Account Group. Capital equipment is any item not consumed through use having a useful life of greater than five years and costing more than $25,000.

(Ord. 17-015, § 2, 2017: Ord. 02-013, § 2, 2002; Ord. 95-058, § 2, 1995)

3.04.135 DISPOSITION OF UNCOLLECTIBLE RECEIVABLES.

(A) The finance director is authorized to charge-off, from time to time, unpaid and outstanding uncollectible accounts receivable. This shall include unpaid and outstanding delinquent taxes for personal property and for adjustments on real property taxes, as well as delinquent uncollectible checks. The finance director may also impose a fee, not to exceed $30 per check, for checks remitted to the borough in payment for any obligation, which are returned unpaid by the bank for any reason.

(B) When write-offs materially affect the financial condition of a fund, the finance director shall recommend to the mayor and assembly the appropriate course of action required for resolution of the deficiencies.

(Ord. 08-025, § 2, 2008; Ord. 94-001AM, § 4 (part), 1994; Ord. 81-5, § 2, 1981)

3.04.140 POST AUDIT.

The finance director shall submit standard financial statements reporting the financial position and operations compared with budget of the borough general government, school system and any other agency or district of the borough for each fiscal year. The assembly shall provide for an annual audit of these financial statements by a certified public accountant, designated by the assembly, who has no personal interest, direct or indirect, in the fiscal affairs of the borough or any of its departments.

(Ord. 94-001AM, § 4 (part), 1994; Ord. 78-32, § 3, 1978)

Statutory reference:

For provisions regarding post audits, see A.S. 29.35.120

3.04.145 EXPENDITURE OF REVENUES.

Tax and other revenue measures levied on an areawide basis may be expended on general administration costs and on areawide functions only. Tax and other revenue measures levied in the area outside cities only may be expended on functions which render services to the area outside cities.

(Ord. 94-001AM, § 4 (part), 1994)

3.04.160 PAYMENT PROCESS FOR MUNICIPALITIES.

All contracts, leases, grants, and other agreements that require payment(s) to municipalities within the borough shall contain a schedule for payment. If the payment is not made by the specified time as identified within the agreement, the municipal mayor or manager, or his/her designee, shall inform the borough finance director, in writing, of the nonpayment. If, after 15 days after receipt of the notice of nonpayment by the municipality, the borough has not made the payment or responded, in writing, to the municipal request stating the reason for nonpayment, the municipal mayor or manager, or his/her designee, shall inform the borough manager, in writing, of the nonpayment. If, after 15 days after receipt of the notice of nonpayment by the municipality, the borough has not made the payment or responded, in writing, to the municipal request stating the reason for nonpayment, the borough manager shall inform the borough assembly, in writing, of the nonpayment and the reasons for the nonpayment.

(Ord. 09-114, § 3, 2009)