Chapter 6.12 BUDGETARY REQUIREMENTS AND PROCEDURES

The mayor shall recommend to the assembly an annual budget. The finance director shall compile the budget based upon detailed departmental estimates and work programs and control the same under the direction of the mayor. (Code 1986 § 6.12.010)

6.12.020 Budget message – Current operations.

The budget message submitted by the mayor to the assembly shall be explanatory of the budget, shall contain an outline of the proposed financial policies of the municipality for the budget year, and shall describe in connection therewith the most important features of the budget plan. It shall set forth the reasons for salient changes from the previous year in appropriation and revenue items and it shall explain any major changes in policy. (Code 1986 § 6.12.020)

6.12.030 Budget message – Capital improvements.

As part of the budget message, with relation to the proposed expenditures for down payments and other proposed expenditures for capital projects, stated in the budget, the mayor shall include a statement of pending capital projects and proposed new capital projects, relating the respective amounts, if any, proposed to be raised therefor by the issuance of bonds during the budget year. A forecast of the projected debt ratios will be provided. (Code 1986 § 6.12.030)

6.12.040 Capital improvement program – Scope.

A. The mayor shall submit a capital improvement program and budget of proposed projects for the six following fiscal years which shall accompany the current operating budget.

B. The capital improvements program and budget shall contain at least the following:

1. A summary of current capital improvements which are unfinished including costs to date and projected costs to completion;

2. A simple, clear summary of the detailed contents of the program;

3. Capital improvements pending or proposed to be undertaken within the ensuing fiscal year, together with the estimated cost of each improvement and the proposed method of financing it;

4. An estimate of additional annual cost of operating and maintaining the improvements;

5. An estimate of annual cost reduction in operation and maintenance with completion of improvement;

6. A six-year projection of operating expenditures and debt service compared with a forecast of revenues by fund.

C. Based upon the six-year projection of expenditures and revenues, a financial management program and policy will be proposed which should work toward reducing debt pressures, enhance the municipal credit and rating, and accomplish the needed improvement program.

D. The appropriation ordinance shall appropriate from the various funds the moneys for the capital improvement projects, to the capital projects fund. Disbursement shall be made for each authorized project or improvement from the capital projects fund.

E. A pay-as-you-go program for projects contained in the six-year program to accomplish recognized levels of capital outlay to total budget will be presented in each fiscal year’s operating budget.

F. The school board shall make its recommendations to the assembly through the comprehensive capital improvement program and budget with staff assistance provided by the division of planning, department of community development. (Code 1986 § 6.12.040)

6.12.050 Budget message – Supporting schedules.

Attached to the budget message shall be supporting schedules, exhibits and other explanatory material, in respect to both current operations and capital improvements, as the mayor shall believe useful to the assembly. (Code 1986 § 6.12.050)

6.12.060 Budgetary control.

A. No budget appropriations can be encumbered without certification by the borough treasurer that there is an unencumbered appropriation and available funds.

B. No officer, department or agency shall, without assembly approval, during any budget year, expend or contract to expend any money or incur any liability in excess of the amounts appropriated for that general classification of expenditures by the current budget.

C. All appropriations lapse at the end of the budget year to the extent that they have not been expended or lawfully encumbered.

D. Unencumbered appropriation balances may be transferred within a department by the mayor at any time. At the request of the mayor, or on its own prerogative, the assembly may transfer unencumbered appropriation balances from one office, department or agency to another.

E. Subject to assembly approval by resolution, the mayor may (1) establish line item expenditures within an authorized appropriation, (2) establish new line item expenditures if consistent with the other requirements of this chapter, or (3) transfer from one authorized appropriation to another any amount which would not annually exceed 10 percent or $25,000, whichever is greater. In no circumstance may the total of all such transactions exceed $150,000 prior to the assembly reappropriation process, pursuant to NABC 2.08.020(E).

F. Without assembly approval, the mayor is authorized to revise budgets of state or federal contracts; such total revisions are limited to a maximum of 10 percent of the total contract amount or $25,000, whichever is greater.

G. The mayor may accept a grant award up to $100,000 without assembly approval. The mayor must inform the assembly of any such administratively accepted grant funds at the next regular assembly meeting.

H. The mayor may revise grant budgets, accept additional grant funds, or amend a corresponding grant-funded contract without assembly approval so long as the scope of services or grant project is not substantially changed. The mayor must inform the assembly of any such administratively-approved grant changes at the next regular assembly meeting.

I. By resolution, the assembly may approve a borough grant-funded contract that terminates at the end of the borough’s fiscal year to extend up to 120 days past the end of the fiscal year. (Ord. 20-12 § 1, 2021; Ord. 13-11 § 1, 2014; Ord. 87-2am, 1987; Code 1986 § 6.12.060)

Article II. Budget Form and Scope

6.12.070 Scope of budget.

A. The budget shall be a complete financial plan for all the operations of the municipality, including the education function, showing all reserves, all estimated revenues from all sources, and all proposed expenditures for all purposes.

B. The budget shall include a comparative statement of actual expenditures and actual revenues for the preceding fiscal years and estimated expenditures and anticipated revenues for the current fiscal year.

C. Proposed expenditures shall not exceed total anticipated revenues and reserves. (Code 1986 § 6.16.010)

6.12.080 Anticipated revenues.

Anticipated revenues shall be composed of taxes, licenses and permits, intergovernmental revenue, charges for services, fines and forfeits, miscellaneous revenue, and cash reserves. (Code 1986 § 6.16.020)

6.12.090 Anticipated revenues – Compared with other years.

In parallel columns opposite the several items of anticipated revenues there shall be placed the amount of each such item actually received in the two preceding fiscal years, the amount of each item of the budget of the current year, and the amount actually received during the first six months of the current year. (Code 1986 § 6.16.030)

6.12.100 Year-end surpluses.

Unencumbered year-end surpluses available for appropriation shall be restricted to available surplus, which is defined for purposes of this title as the amount by which cash plus accrued net receivables exceeds current liabilities at the beginning of the current fiscal year. Net receivables for particular funds shall be determined as provided by the National Committee on Governmental Accounting in their manual on Governmental Accounting, Auditing and Financial Reporting published in 1968. (Code 1986 § 6.16.040)

6.12.110 Anticipated surplus from municipal utility or other public service enterprise.

The anticipated revenues and proposed expenditures of each utility or other public service enterprise owned or operated by the municipality shall be stated in a separate section of the budget (each bearing the name of the utility or enterprise). Any anticipated year-end surpluses, if legally available for general purposes, anticipated payment in lieu of taxes (utilizing the same evaluation basis which would be used if privately owned times the applicable millage rate), and reimbursements for central services rendered, shall be stated as an item of revenue in the general fund budget. However, no payment for general purposes or payment in lieu of taxes may be made if the utility or enterprise is not self-liquidating in regard to debt. (Code 1986 § 6.16.050)

6.12.120 Revenues – Measures of estimates.

No revenue from any source, except year-end surpluses from publicly owned enterprises, shall be included as an anticipated revenue in the budget in an amount in excess of the average of the amount actually realized in cash from the same source in the next preceding fiscal year, and that actually realized in the first six months of the current fiscal year plus that anticipated for the remaining portion of the fiscal year, estimated as accurately as may be, unless the mayor shall determine that the facts clearly warrant the expectation that such excess amount will actually be realized in cash during the budget year and the budget message explains this determination. (Code 1986 § 6.16.060)

6.12.130 Revenues – Receipts from special assessments.

Revenues from the collection of special assessments on property specially benefitted shall not be stated in an amount which is in excess of the amount of the receipts so derived which it is estimated will be held in cash on the first day of the budget year. (Code 1986 § 6.16.070)

6.12.140 Revenues – From new source.

No revenue, from a new source not previously stated in the budget, shall be included unless the mayor shall determine that the facts clearly warrant the expectation that such revenue will be actually realized in cash during the budget year in the amount stated and the budget message explains such determination. If the new revenue is to be received from the state, or a federal agency, the anticipated amount shall not exceed the amount which an appropriate officer of the state or federal agency shall declare in writing to be the amount which may reasonably be anticipated in the budget year. (Code 1986 § 6.16.080)

6.12.150 Revenue – From property tax.

Anticipated revenue from the property tax shall include separately the estimated revenue from delinquent property taxes and estimated revenue from the levy due in the budget year. Each item of revenue shall be the anticipated actual cash receipts from these sources, estimated as prescribed in NABC 6.12.180 and 6.12.190. (Code 1986 § 6.16.090)

6.12.160 Revenue from delinquent property taxes – Measure of estimates.

The estimate of the amount of delinquent property taxes expected to be collected during the budget year shall be a proportion of the delinquent property taxes expected to be outstanding on the first day of the budget year which is not in excess of the average of (1) the percentage of delinquent property taxes outstanding at the beginning of the next preceding fiscal year which was actually realized in cash during that year, and (2) the percentage of the delinquent taxes outstanding at the beginning of the current fiscal year which was actually realized in cash for the first six months plus that to be received in the remainder of the year estimated as accurately as may be. (Code 1986 § 6.16.100)

6.12.170 Revenue from current property tax – Measure of estimates.

The item included in the budget as anticipated revenue from the property tax levied and payable in the budget year shall be a proportion of the levy not in excess of the average of (1) the percentage of the levy of the next preceding fiscal year which was actually realized in cash during that year, and of (2) the percentage of the levy of the current fiscal year which was actually realized in cash for the first six months plus that to be received in the remainder of the current year estimated as accurately as may be. There shall be set forth with the estimate of revenue to be received from the tax levy applicable to the budget year the total amount of taxes required to be levied to produce this estimate and the amount of the reserve required for taxes uncollected within the year of the levy. (Code 1986 § 6.16.110)

6.12.180 Proposed expenditures.

Proposed expenditures shall be itemized. Separate provision shall be included in the budget for at least:

A. Interest, amortization of principal and redemption charges on the public debt for which the faith and credit of the municipality is pledged;

B. Other expenditures required by statute;

C. The payment of all judgments, unless the municipality is authorized by law to issue bonds to pay such judgments and actually has made provision for payment under such authorization;

D. Cash deficit of current year to the extent provided by NABC 6.12.190;

E. An amount equal to the aggregate principal amount of all tax anticipation notes which it is estimated will be outstanding on the first day of the budget year;

F. An amount equal to the aggregate of all discounts, cancellations, remissions, abatements and refunds of taxes that have been made during the current fiscal year; provided, where applicable, this shall be set out as a specific item of reduction in the revenue projections;

G. An amount equal to the aggregate of all special revenue notes or warrants which it is estimated will be outstanding at the end of the current year in anticipation of the collection of revenues other than the property tax;

H. An amount equal to the aggregate of all emergency notes or warrants which it is estimated will be outstanding at the end of the current year;

I. Any deficit arising from the operations of utility or other public service enterprises, an amount equal to the deficit from such operations during the next preceding fiscal year, separately stated for each utility or other public service enterprise which appears in a separate section of the budget. However, provision shall be made for increased service charges or increased contributions from taxes in an amount sufficient to eliminate the deficit;

J. Administration, operation and maintenance of each office, department or agency of the municipality;

K. Assembly budgetary reserve in an amount not less than three percent of the total amount stated pursuant to subsection (J) of this section;

L. Expenditures proposed for capital projects including provisions for down payments on capital projects to be transferred to the capital projects fund;

M. Provision for appropriations to a reserve for capital outlay account to be maintained in the capital projects fund for all projects scheduled for pay-as-you-go or for a partial down payment as provided for in NABC 6.12.230. (Ord. 87-5, 1987; Code 1986 § 6.16.120)

6.12.190 Provision for cash deficit of current year.

Under the caption “Cash Deficit of Current Year,” there shall be included an amount equal at least to the amount by which the aggregate of expenditures and encumbrances in the current year will exceed the aggregate of cash receipts in the current year, unless or to the extent that such deficit will have been provided for from available reserves of the various service areas or areawide accounts or through the issuance of notes, warrants or other interim or temporary financing needs for which appropriation is made under NABC 6.12.180(E) and (H). (Code 1986 § 6.16.130)

6.12.200 Proposed expenditures – Compared with other years.

In parallel columns, opposite the several items of proposed expenditures, there shall be placed the amount of each such item actually expended in the next two preceding fiscal years, the budget for the current fiscal year and the amount actually expended for the first six months of the fiscal year in which the budget is being prepared. (Code 1986 § 6.16.140)

6.12.210 Down payments on capital projects.

A. The budget shall separately state a sum which is not less than five percent of the amount of expenditures from bond proceeds for each capital project during the budget year; said sum shall be a down payment on projects and appropriated from the reserve for capital outlay account if accumulated under the provision of NABC 6.12.220, otherwise appropriated from the applicable fund if to the extent the down payment was not provided in prior operating budgets. Each capital project shall be individually listed, along with the amount expected to be authorized for bonds to finance the project. For the purpose of the down payments, all street improvements expected to be financed in part by the issuing of bonds during the budget year may be considered a single project; so may all proposed extensions of the water system, and likewise all extensions of the sewer system. Such an appropriation for a down payment shall not be required before the issuance of bonds to finance any capital expenditure which is the result of fire, flood or other disaster, or which is for a municipally owned, or operated, utility or other public service enterprise, or which is to be met in part in cash, labor or materials, by any agency of the government of the United States of America, or of this state.

B. The down payment may be accumulated in a reserve for capital outlay account in the capital projects fund as well as enterprise funds, annually based upon the long range capital improvement program and budget. (Code 1986 § 6.16.150)

6.12.220 Reserve for capital outlay account.

A. Reserve for capital outlay accounts will be established within the capital projects fund, and each utility and other enterprise fund.

B. Based upon the six-year program submitted per NABC 6.12.040, provisions will be made to accumulate annually the minimum down payment for each project in the current budget to be expended from bond proceeds. In addition, provisions will be made to annually appropriate funds to this account for projects outlined in the six-year program. (Code 1986 § 6.16.160)

6.12.225 Working capital reserve account.

Repealed by Ord. 20-07. (Ord. 07-03 § 1, 2007; Ord. 95-05 § 2, 1995; Code 1986 § 6.16.170)

6.12.230 Financial contingency reserve account.

A. The financial contingency reserve account is established within the general fund in the initial amount of $500,000. The assembly shall endeavor to maintain a balance in the financial contingency reserve account of approximately $10,000,000.

B. Except as provided in subsection (C) of this section, after FY 2002, annual appropriations to the financial contingency reserve account shall be made in an amount necessary to maintain a balance of approximately $10,000,000.

C. The borough shall evaluate the account no less than annually in order to ensure that the balance remains near $10,000,000, and shall transfer the excess, should there be any, to the sustainability fund as established under NABC 6.28.010.

D. Funds held in the financial contingency reserve account shall not be appropriated for borough expenditures unless the appropriation is approved by a two-thirds majority of the assembly. To be eligible for a contingency reserve fund appropriation, the borough must experience a significant revenue shortfall that threatens the immediate ability to continue providing services. Appropriations to fund general operations in the ordinary course of business are not permitted.

E. The contingency reserve fund transfer requirements of this section do not apply to agreements between the borough and mining companies under NABC 6.08.020 dedicated exclusively for village infrastructure and village programs.

F. This section may only be amended or repealed by an ordinance approved by a two-thirds majority of the assembly. (Ord. 20-07 § 1, 2020; Ord. 17-04 § 1, 2017; Ord. 12-01 § 1, 2012; Ord. 07-03 § 2, 2007; Ord. 00-13 § 1, 2000; Ord. 00-08 § 1, 2000; Ord. 98-01 § 1, 1998; Ord. 95-05 § 2, 1995; Code 1986 § 6.16.180)

6.12.235 Budget summary.

At the head of the budget there shall appear a summary of the budget, which need not be itemized further than by principal sources of anticipated revenue, stating separately the amount to be raised by property tax, and by departments and kinds of expenditures, in such a manner as to present to the taxpayers a simple and clear summary of the detailed estimates of the budget. (Ord. 95-05 § 1, 1995; Code 1986 § 6.16.190)

Article III. Budget Procedures

6.12.240 Budget – Public record.

The budget, the budget message, the capital improvement program, and all supporting schedules shall be a public record in the office of the clerk, open to public inspection by anyone. The mayor shall cause to be prepared for distribution to interested persons, copies of the budget and budget message equal in number to at least one-half of one percent of the population of the municipality. (Code 1986 § 6.20.010)

6.12.250 Public hearing on budget.

At the time and place so advertised, or at any time and place to which such hearing from time to time be adjourned, the assembly shall hold a public hearing on the budget as submitted, at which all interested persons shall be given an opportunity to be heard, for or against the estimates or any item thereof. (Code 1986 § 6.20.030)

6.12.260 Public hearing on budget – Notice.

A summary of the budget and capital improvements program and notice of the time and place of the public hearing thereon shall be published as required by Section 9.06 of the borough Charter. (Ord. 95-02 § 10, 1995; Code 1986 § 6.20.020)

6.12.270 Further consideration of budget.

After the conclusion of such public hearing, the assembly may insert new items or may increase or decrease the items of the budget, except items in proposed expenditures fixed by law or prescribed by NABC 6.12.180(A) through (I). The assembly may not vary the titles, descriptions or conditions of administration specified in the budget. (Code 1986 § 6.20.040)

6.12.280 Adoption of budget – Vote required.

The budget shall be adopted by favorable votes of at least a majority of all members of the assembly, preferably by June 1st and no later than June 15th. (Ord. 96-02 § 4, 1996; Ord. 95-02 § 11, 1995; Code 1986 § 6.20.050)

6.12.290 Effective date of budget – Certification – Copies made available.

Upon adoption of the budget, the budget shall be in effect for the budget year. A copy of the budget, as finally adopted, shall be certified by the mayor and the clerk and filed in the office of the clerk. The budget so certified shall be printed, mimeographed or otherwise reproduced, and sufficient copies shall be made available for the use of all officers, departments and agencies and for interested persons and civic organizations through the clerk’s office. (Code 1986 § 6.20.060)

6.12.300 Authority of mayor – Appropriations.

Repealed by Ord. 13-11. (Ord. 88-13 § 2, 1988; Code 1986 § 6.20.070)