(A) Purpose. The purpose of this section is to adopt rules governing the City Council in its proceedings for administering the financial affairs of the city, and to establish a standard procedure for the making and administration of budgets, to place responsibility for the tasks related to budget preparation, and administration, the determination of the amount of taxes and other revenue in such manner that budgets may be balanced on the basis of actual cash receipts within the budget period, the establishment of appropriations, the payment of debt, and the control of other expenditures. Its provisions are intended to enable the city to make financial plans for both current and capital expenditures, to ensure that executive staffs administer their respective functions in accordance with these plans, and to permit taxpayers and investors to form intelligent opinions based on sufficient information as to the financial policies and administration of the city. For the accomplishment of this purpose, the provisions of this section shall be broadly construed, and shall be in effect until repealed or amended. This section may be repealed or amended by a majority vote of the City Council in the same manner as required by state law for the adoption of an ordinance except that in no case may a vote be taken on amendment or repeal of this section at the meeting at which it is first proposed. Within the provisions and for the purpose of this section, officers and employees shall have the power and be subject to the duties experessly stated or necessarily implied.
(B) The Mayor, at least 30 days prior to the beginning of each fiscal year, shall submit to the City Council a budget and an explanatory budget message in the form and with the contents provided by this section. For such purpose, not less than 60 days prior to the beginning of the fiscal year, he or an officer designated by him shall obtain from the head of each office, department, or agency estimates of revenue and expenditure of that office, department, or agency, detailed by organization units within the department or agency, object of expenditure (personal services, contractual services, materials and supplies, capital outlay, and debt service), and such other supporting data as he may request; together with a list of all new programs and capital projects pending or which the department head believes should be undertaken within the budget year and within the five next succeeding years. In preparing the budget, the Mayor shall review the estimates, hold conferences with department heads thereon, and may revise the estimates as he may deem advisable. He also shall obtain from the responsible officer or officers estimates of anticipated state and federal grants and required matching funds where applicable.
(C) Budget message. The budget message submitted by the Mayor to the City Council shall be explanatory of the budget; shall contain an outline of the proposed financial policies for the fiscal year; and shall describe in connection therewith the important features of the budget plan. It shall set forth the reasons for salient changes from the current year in appropriation and revenue items and shall explain any major changes in financial policy.
(1) As a part of the budget message, with relation to the propsed expenditures for the budget year for capital projects, stated in the proposed budget, the Mayor shall include a statement of pending capital projects and proposed new capital projects, relating the respective amounts proposed to be raised during the budget year therefor by appropriations from estimated revenues for the budget year, the issuance of bonds, state or federal grants, and loans or other sources.
(2) The Mayor shall also include in the message, or attach thereto, a capital progam of proposed capital projects for each of the five fiscal years next succeeding the budget year, together with his comments thereon and any estimates of costs prepared by the Department of Public Works or other office, department, or agency.
(3) Attached to the budget message shall be such supporting schedules, exhibits, and other explanatory material, in respect to both current operations and capital improvements, as the Mayor shall believe useful to the City Council.
(D) Budget.
(1) The budget shall provide a complete program and financial plan for all funds for the budget year. It shall contain in tabular form for each fund:
(a) A general summary;
(b) Detailed estimates of all anticipated revenues applicable to proposed expenditures;
(c) All proposed expenditures.
The total of such anticipated revenues shall equal the total of such proposed expenditures.
(2) 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 a manner as to present to taxpayers a simple and clear summary of the detailed estimates of the budget.
(3) Anticipated revenues. Anticipated revenues shall include revenue from all sources, including grants and loans, and shall be classified in accordance with the systems recommended in the Kentucky Municipal Accounting Manual. In parallel columns opposite the several items of anticipated revenue there shall be placed:
(a) The amount of each such item actually received during the next preceding fiscal year;
(b) The total of the amount of each item actually received to the time of preparing the budget, plus anticipated receipts for the remainder of the current fiscal year estimated as accurately as may be; and
(c) The amount of each item anticipated to be received during the budget year estimated as accurately as may be.
(4) The fund balance available for appropriation shall be limited to the amount by which cash is estimated to exceed liabilities at the beginning of the budget year. This estimate shall be reviewed by the Mayor as soon as practical after the end of the current fiscal year when the actual “fund balance” is determined. At this time the estimates of revenue and authorized appropriations shall be revised if necessary.
(5) Anticipated surplus from municipal utility or other public service enterprise. The anticipated revenue and proposed expenditures of each utility or other public service enterprise owned or operated by the city shall be stated in a separate section of the budget (each bearing the name of the utility); and as to each such utility, an anticipated surplus, if legally available for general purposes and to the extent such surplus is to be used to support budget operations, shall be stated as an item of revenue in the budget.
(6) Proposed expenditures. The proposed expenditures shall be itemized as set out in this division and each item numbered in accordance with the classification system recommended in the Kentucky Municipal Accounting Manual. Separate provision shall be included in the budget for at least:
(a) Interest, amortization, and redemption charges on bonds outstanding;
(b) Other statutory expenditures;
(c) Any cash deficit of current year (cash deficits are prohibited by Section 157 of the Kentucky Constitution; however, if a casual deficit does actually exist, the section should apply);
(d) Administration, operation, and maintenance of each office, department, or agency of the city;
(e) Contingent expense in an amount not more than 3% of the total amount stated pursuant to division (d) above;
(f) Expenditures proposed for capital projects.
In parallel columns, opposite the several items of proposed expenditures, there shall be placed the amount of each such item actually expended during the next preceding fiscal year; the total of the amount actually expended to the time of preparing the budget plus the expenditures for the remainder of the current fiscal year estimated as accurately as may be; and the amount of each item to be appropriated for the budget year.
(E) The proposed budget and budget message and all supporting schedules shall be a public record in the office of the City Clerk/Treasurer, open to public inspection by anyone. The Mayor shall cause the proposed budget to be printed or otherwise reproduced and sufficient copies thereof made available for the use of all offices, departments, and agencies and for the use of interested persons and civic organizations.
(F) Publication of notice of public hearing. At the meeting of the City Council at which the budget and budget message are submitted, the City Council shall determine the place and time of the public hearing on the budget, and shall cause to be published a notice of the place and time, not less than seven days nor more than 21 days before the public hearing.
(G) Public hearing on budget. At the time and place so advertised, or at any time and place to which such public hearing shall from time to time be adjourned, the City Council 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 revenue estimates or any proposed appropriation therein.
(H) Further consideration of budget. After the conclusion of the public hearing, the City Council 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 divisions (D)(5)(a), (b), and (c), but where it shall increase the total proposed expenditures, it shall also increase the total anticipated revenue at least to equal such total proposed expenditures.
(I) Adoption of budget. The budget shall be adopted by the favorable votes of at least a majority of all the members of the City Council. The budget shall be finally adopted not later than the fourth day prior to the beginning of the fiscal year. Should the City Council take no final action on or prior to such day, no expenditure may be made for any purpose except salaries until the budget has been finally adopted by the City Council.
(J) Effective date of budget; certification; copies. Upon final adoption, 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 City Clerk/Treasurer and filed in the office of the Mayor. The budget, so certified, shall be printed or otherwise reproduced, and sufficient copies thereof shall be made available for the use of all offices, departments, and agencies and for the use of interested persons and civic organizations. A summary shall be published in accordance with KRS 424.240. From the effective date of the budget, the several amounts stated therein as proposed expenditures shall be and become appropriated to the several objects and purposes therein named.
(K) Mayor to administer budget.
(1) Approval of expenditures. The Mayor shall have charge of the administration of the financial affairs of the city and to that end shall supervise and be responsible for the disbursement of all moneys and have financial budgetary control over each office, department, and agency and shall cause separate accounts to be kept for the items of appropriation contained in the budget, each of which accounts shall show the amount of the appropriation, the amounts paid therefrom, the unpaid obligations against it and the unencumbered balance. The same classification and numbering system used in the budget and required in division (D) shall be used. Unless he shall certify that there is a sufficient unencumbered balance available, no appropriation shall be encumbered and no expenditure shall be made.
(2) Work programs; allotments. Before the beginning of the budget year, the head of each office, department, or agency shall submit to the Mayor, at the time required by him, a work program for the year, which program shall show the requested allotments of the appropriations for that office, department, or agency, by quarterly periods, for the entire budget year. The Mayor shall review the requested allotments in the light of the work program of the office, department, or agency concerned and may revise, alter, or change the allotments before approving the same. The aggregate of the allotments shall not exceed the total appropriation available to the office, department, or agency for the budget year. The Mayor shall certify a copy of the allotments and authorize all expenditures for the offices, departments, and agencies to be made from the appropriations on the basis of approved allotments and not otherwise. The approved allotment may be revised during the budget year in the same manner as the original allotment was made. If, at any time during the budget year, the Mayor shall ascertain that the available income, plus balances, for the year will be less than the total appropriations, he shall reconsider the work programs and allotments of the several offices, departments, and agencies and shall revise the allotments so as to forestall the making of expenditures in excess of income.
(3) Transfer of appropriations. The Mayor may at any time transfer any unencumbered appropriation balance or portion thereof between general classifications of expenditures within an office, department, or agency. At the request of the Mayor and within the last three months of the budget year, the City Council may by amending the budget ordinance transfer any unencumbered appropriation balance or portion thereof from one office, department, or agency to another. No transfer shall be made from the appropriations required by divisions (D)(5)(a), (b), and (c) of this section.
(L) Expenditures exceeding appropriations prohibited. No office, department, or agency shall, during any budget year, expend or contract to expend any money or incur any liability, or enter into any contract which by its terms involves the expenditure of money for any purpose in excess of the amounts appropriated for that general classification of expenditure pursuant to the budget ordinance. Any contract, verbal or written, made in violation of this section shall be null and void.
(M) Lapse of appropriations. All appropriations shall lapse at the end of the budget year to the extent that they shall not have been expended or lawfully encumbered.
(N) Emergency appropriations. At any time in any budget year, the City Council may, pursuant to this section, make emergency appropriations to meet a pressing need for public expenditure, for other than a regular or recurring requirement, to protect the public health, safety, or welfare. Such appropriation shall be by amendment to the budget ordinance adopted by the favorable votes of at least a majority of the members of the City Council and shall be made only upon recommendation of the Mayor. The total amount of all emergency appropriations made in any budget year shall not exceed the amount of unanticipated actual revenue in excess of the budget estimates, plus transfers from other appropriations.
(O) Borrowing in anticipation of taxes. In any budget year in anticipation of the collection of the revenue for the budget year, but not in excess of 50% of such revenue then uncollected, the City Council may borrow money and issue negotiable notes of the city.
(P) Reports. The Mayor shall, within 15 days after the end of each quarter report to the City Council on the status of the various programs authorized. The report shall include a tabular statement comparing the receipts to date by source with the revenue estimate and a tabular statement indicating for each appropriation the amount originally appropriated, the amount expended or encumbered to date and the available balance. Within 45 days of the end of the fiscal year, sufficient copies of the final report shall be made available for the use of all offices, departments, and agencies and for the use of interested persons and civic organizations.
(Ord., passed 5-4-82)
Statutory reference:
Annual budget, see KRS 91A.030