Town of Eastport, ME - Article V – FINANCIAL PROCEDURES

Article V – FINANCIAL PROCEDURES

Section - 5.01 Fiscal Year.

~~The fiscal year of the City shall begin on the first day of January and end on the last day of December.~~ (Revised 12/12/83) The Fiscal Year of the City shall begin on the first day of July and end on the last day of June.

Section - 5.02 Budget Committee.

At any time prior to January 15, the City Council shall appoint a committee of five interested residents who shall act in an advisory capacity to the council and the city manager in the preparation of the Budget. This group shall be called the Budget Committee. This group shall be called the Budget Committee.

Section - 5.03 Budget Message.

On or before the ~~first Monday~~ regularly scheduled Council Meeting of in February of each year the manager shall submit to the council a budget for the ensuing fiscal year and accompanying message. The manager’s message shall explain the budget both in fiscal terms and in terms of the work programs. It shall outline the proposed financial policies of the City for the ensuing fiscal year, describe the important features of the budget, indicate any major changes from the current year in financial policies, expenditures, and revenues, together with the reasons for such changes, summarize the City’s debt position and include such other material as the manager ~~deems~~ or Council deem desirable..

Section - 5.04 Budget.

The budget shall provide a complete financial plan of all City funds and activities for the ensuing fiscal year and shall be in such form as to fulfill the following requirements: it shall begin with a clear general summary of its contents; shall show in detail all estimated income, indicating the estimated property tax levy, and all proposed expenditures, including debt service, for the ensuing fiscal year; and shall be so arranged as to show comparative figures for actual and estimated income and expenditures of the current fiscal year and actual income and expenditures of the preceding fiscal year. It shall indicate in separate sections;

(1) Proposed expenditures for current operations during the ensuing fiscal year, detailed by offices, departments and agencies in terms of their respective work programs and the method of financing such expenditures;

(2) Proposed capital expenditures during the ensuing fiscal year, detailed by offices, departments and agencies when practicable, and the proposed method of financing each such capital expenditures; and

(3) Anticipated net surplus or deficit for the ensuing fiscal year of each utility owned or operated by the City and the proposed method of its disposition; subsidiary budgets for each such utility giving detailed income and expenditure information shall be attached as appendices to the budget. The total of proposed expenditures shall not exceed the total of estimated income.

Section - 5.05 Capital Program.

Submission to Council. The manager shall prepare and submit to the council a five-year capital program at least six month running of the next fiscal year.

Contents. The capital program shall include:

(1) A clear general summary of its contents;

(2) A list of capital imrpovements which are proposed to be undertaken during the five fiscal

years next ensuring, with appropriate information as to the necessity for such improvements:

(3) Cost estimates, mrthods of financing and recommeded time schedules for each such

(4) The estimated annual cost of operating and manitaining the facilities or equipment to be

constructed or acquired.

The above information may be revised and extended each year with regard to capital improvements still pending or in process of construction or acquisition.

Section - 5.06 Council Action on Budget.

(a) Notice and Hearing. The council shall publish in one or more newspapers of general

circulation in the City the budget as prepared according to section 5.04, and a notice stating:

(1) The times and places where copies of the message and budget the available for inspection by

(2) The time and place, not less than two weeks after such publication, for a public hearing on

(b) Amendment before Adoption. After the public hearing, the council may adopt the

budget with or without amendment. In amending the budget, it may add or increase

programs or amounts and may delete or decrease ~~and~~ any programs or amounts,

except expenditures required by law or for debt service or for estimated cash deficit,

provided that no amendment to the budget shall increase the authorized expenditures

to an amount greater than the total of estimated income.

(c) Adoption. ~~The council shall adopt the budget on or before the first Monday of April of~~

~~the fiscal year currently ending. Adoption of the budget shall constitute appropriations~~

~~of the amounts specified therein as expenditures from the funds indicated and shall~~

~~constitute a levy of the property tax therein proposed.~~ (Revised – 12-12-83) The

Council shall adopt the budget on or before the first Monday of June of the Fiscal

Year currently ending. Adoption of the budget shall constitute appropriations of the

amount specified therein as expenditures from the funds indicated and shall constitute

a levy of the property tax therein proposed.

Section - 5.07 Council Action on Capital Program.

(a) Notice and Hearing. The Council shall publish in one or more newspapers of general

circulation in the City the general summary of the capital program and a notice stating:

(1) The times and places where copies of the capital program are available for

inspection by the public, and

(2) The time and place, not less than two weeks after such publication, for a public

hearing on the capital program.

(b) Adoption. The council by resolution shall adopt the capital program with or without amendment

after the public hearing and on or before the first Monday of May of for the succeeding fiscal

Section - 5.08 Public Records.

Copies of the budget and the capital program, as soon as adopted, shall be public records and shall be published in the form in which it was adopted as directed in 5.06 (a) and 5.07 (a), and shall be made available to the public at suitable places in the City.

Section - 5.09 Appropriations.

Supplemental Appropriations. If during the fiscal year the manager certifies that there are available for appropriation revenues in excess of lose estimated in the budget, the council by resolve may make supplemental appropriations for the year up to the amount of such excess.

Emergency Appropriations. To meet a public emergency affecting life, health, property or the public peace, the council may make emergency appropriations. Such appropriations may be made by emergency order in accordance with the provisions of section 2.14. To the extent that there are no available unappropriated revenues to meet such appropriations, the council may by such emergency order authorize the issuance of emergency notes, which may be renewed from time to time, but the emergency notes and renewal of any fiscal year shall be paid not later than the last day of the fiscal year next succeeding that in which the emergency appropriation was made.

Reduction of Appropriations. If at any time during the fiscal year it appears probable to the manager that the revenues available will be insufficient to meet the amount appropriated, he he/she shall report to the council without delay, indicating the estimated amount of the deficit, any remedial action taken by ~~him~~ him/her and ~~his~~ his/her recommendations as to any other steps to be taken. The council shall then take such further action as it deems necessary to prevent or minimize any deficit and for that purpose it may reduce one or more appropriations.

Limitations. Effective Date. No appropriation may be reduced below any amount required by law to be appropriated or by more than the amount of the unencumbered balance thereof. The supplemental and emergency appropriations and reduction or transfer of appropriations authorized by this section may be made effective immediately upon adoption.

Section - 5.10 Administration of Budget.

(a) Work Programs and Allotments. At such times as the manager shall specify, each department, office or agency shall submit work programs for the ensuing fiscal year showing the requested allotments of its appropriation by periods within the year. The manager shall review and authorize such allotments with or without revision as early as possible in the fiscal year. He He/She may revise such allotments during the year if he he/she deems it desirable and shall revise them to accord with any supplements, emergency, reduced or transferred appropriations made pursuant to section 5.09.

(b) Payments and Obligations Prohibited. No payment shall be made or obligation incurred against any allotment or appropriation except in accordance with appropriations duly made and unless the treasurer first certifies that there is a sufficient unencumbered balance in such allotment or appropriation and that sufficient funds therefrom are or will be available to cover the claim or meet the obligation when it becomes due and payable. Any authorization of payment or incurring of obligation in violation of the provisions of this charter shall be void and any payment so made illegal; such action shall be cause for removal of any officer who knowingly authorized or made such payment or incurred such obligation, and he shall also be liable to the City for any amount so paid. However, except where prohibited by law, nothing in this charter shall be constructed to prevent the making or authorizing of payments or ~~managing~~ making of contracts for capital improvements to be financed wholly or partly by the issuance of bonds or to prevent the making of any contract or lease providing for payments beyond the end of the fiscal year, provided that such action is made or approved by ordinance.

(c) Payments. Money shall be paid out only on warrants on the City treasury issued by the treasurer and counter-signed by the City Council. The City treasurer shall examine all payrolls, bills and other claims and demands against the City, and shall issue no warrant for payment until he he/she finds that the claim is in proper form, correctly computed, duly certified and legally due and payable. The City Council, at its organizational meeting, shall set a maximum amount that the purchasing agent shall not exceed without City approval.

The treasurer may require any claimant to make oath to the validity of ~~his~~ his/her claim, may investigate any claim, and for each purpose or purposes may examine witnesses under oath.

Section - 5.11 Special Accounts and Borrowing Procedures.

Reserve Account. The City Council at the organizational meeting held on the first Monday of January each year, shall establish a reserve fund from which transfer shall be made only by vote of the City Council and no transfer of any money shall be made from any fund other than this reserve fund until the end of the fiscal year. The balance in such reserve fund shall ~~at no time exceed one mill of taxation~~ be an ~~based on the~~ amount constituting one mill for the current year in which the amount is established.

At the end of the fiscal year after all warrants have been paid out of the various funds against which such warrants have been drawn, the treasurer shall transfer to the reserve fund any balance or balances that remain in the various other funds except balances in the Education Account, Capital Account, and other non-appropriated accounts. The council may then authorize a transfer from the reserve fund account to any other account in which there is an overdraft.

The City Council shall then transfer to surplus that amount which exceeds the authorized amount in the reserve fund.

Sinking Fund. Sinking funds, if required, will be established in accordance with Maine Revised Statues as amended

Temporary Appropriations for Current Expenses. Before the annual appropriation resolve has been passed the City Council may make appropriations for current department expenses, chargeable to the appropriation for the year, when passed, to an amount sufficient to cover the necessary expenses of the various units until the annual appropriation resolve is in force.

Borrowing. The borrowing of money by and for the City shall be limited by the provisions of this charter and Maine Revised Statues as amended.

Bond Issues. Money may be borrowed within the limits fixed by the constitution and Maine Revised Statutes, as amended, by the issue and sale of bonds pledged on the credit of the City constructed for acquisition of land, the construction of buildings, the purchase of equipment, the construction of roads and streets and other permanent public improvements, and the payment or refunding of bonds previously issued. No order providing the issue of bonds shall be passed without public notice given by posting notice of same in at least two public places on the City of Eastport, and publishing said notice in a newspaper having general circulation in the City of Eastport at least fourteen days before the final action by the City Council and the approval of 4/5 of all the members of the City Council. Every issue of bonds shall be payable by annual installment with interest until the debt is extinguished and within a fixed term of years; if such bonds are issued in payment of indebtedness incurred for a permanent improvement the term of such bond shall not exceed the estimated period of utility of said improvement but the declaration of the City Council embodied in the order authorizing the issue shall be a conclusive determination of the established utility thereof; and the term within which all bonds shall provide for a tax levy for each year of an amount necessary to meet the payment of the annual serial installment of the principal and interest; and such amount shall be included in the tax levy for each year until the debt is extinguished. Bond issues in existence prior to passage of this charter shall remain in force and provisions for repayment shall be in accordance with the laws and regulations in existence at the time of the finalization of the bond issue.

Notes. Money may be borrowed within the limits fixed by the constitution and the Revised Statutes of Maine, as amended, by the issuance of notes pledged on the credit of the City of Eastport the proceeds to be used for the payment of indebtedness of the City contracted for the acquisition of land, the construction of building, the purchase of equipment and supplies, the purchase of services, the construction of street and roads and other permanent public improvement, and the payment or refunding of notes and certificates of indebtedness previously issued. No order or resolve providing for the issuance of a note exceeding $50,000, except temporary loans for tax anticipation, ~~exceeding $50,000.00~~ shall be passed without public notice given by posting notice in a newspaper having general circulation in the City at least two weeks before final action by the City Council and the approval of 4/5 of all the City Council members.

Every note issued in payment of indebtedness incurred for a permanent improvement or purchase of major item of equipment shall be repaid on such terms as shall not exceed the estimated period of utility of the said improvement or items of equipment.

Notes issued shall be payable in equal, annual serial installments as pertains to principal, and interest shall be made payable semi-annually. There shall be a tax levy each year to provide for payment of the annual serial installments of principal and interest and such amount shall be included in the tax levy for each year until the debt is extinguished. Notes in existence prior to passage of this charter shall remain in force and provisions for repayment shall be in accordance with the laws and regulations in existence at the time of the finalization of the note or notes.

Temporary Loans. Money may be borrowed in anticipation of tax receipts or Revenue Sharing receipts during any fiscal year after said fiscal year begins but the aggregate amount of such loans outstanding at any one time shall not exceed 80% of the revenue received for taxes during the preceding fiscal year. All such loans shall be paid within the fiscal year out of receipts for the fiscal year in which said loans were made. Money may be borrowed in anticipation of money to be received from the sale of bonds to be issued provided such bonds have been legally authorized. All such loans shall be paid in full within one year and are to be paid with proceeds for the bond issue.

This section in no way limit the power granted to towns and cities to borrow money as contained in the Maine Revised Statutes as amended and acts amendatory thereof. The amount borrowed in anticipation of Revenue Sharing receipts shall not exceed 80% of the amount of Revenue Sharing entitlements protected by the paying units of government for the current period of entitlement. Money borrowed in anticipation of tax receipts must be repaid with tax receipts and money borrowed in anticipation of Revenue Sharing receipts

Capital Improvements Reserve. The municipal officers may from time to time establish reserve funds and provide for the investment of each fund for future usage. Such established reserve funds shall be designated for a specific capital improvement when the need for which established shall no longer exist. If a reserve fund established for these purposes is terminated the accumulated funds shall be applied to the budget as a receipt for the tax year following the year in which the reserve fund was terminated. If the reserve fund is terminated prior to the annual budget, the proceeds of the particular reserve fund will be applied as income to the budget in order to reduce the tax levy for that year.