08. Resolution 4384 - Public Hearing - Clarify Total Budget AdoptionAgenda -December 1, 1997
AGENDA ITEM 8 - RESOLUTION 4384- SET DATE FOR PUBLIC HEARING -BUDGET
AMENDMENT -RE -CLARIFICATION OF BUDGET ADOPTION
BACKGROUND/CONSIDERATION: The City Attorney has not provided me with a written
opinion concerning the budget questions raised by the DeJana letter. However, I have had input from
other city sources. These sources included City Managers, Finance Directors, and City Attorney.
The comments I have received all agree, after their review of our budget resolution, and consist of
the following:
A. We identify all of the expenditures expected.
B. There is no levy assessed for these purposes.
C. The City does not have the power to assess a levy specifically for Tax
Increment Finance projects. This is determined by an aggregate 4evy of City,
school, State, and other special taxes not under our control. There is no way
for us to make that levy. We can only estimate the income from TIF districts
and receive the funds after the total levy is determined.
D. The entire "De3ana"question is one of "form of substance".
E. The budget adoption document does not consist only of the resolution in
question. The budget document includes the 210 page document that
specifies all funds, accounts, activities of the City for 1997/98 revenue and
expenditures.
Agenda -December 1, 1997
F. Historically, there would be no questions about the resolution adopting the
budget is valid. However, with the new law perhaps there could be a
question.
G. The new laws were not published until October. We adopted our budget on
August 4, 1997 prior to any publications about the new law. "There was no
way unless we were a party to the legislative internal that we would have
known about the new requirements." The technical information just was not
available at that time.
It is my opinion, that we are technically correct in the method of adoption of the 1997/98 budget.
However, I also believe that we should be more than "technically correct". We should be
comfortable! Therefore, I believe we should lean to the extra cautious mode and clarify the budget
adoption process. IF we are not correct, all of the items listed under section 2 of the budget
resolution are not levied. We would need to "shut -dawn" all of those operations to legally comply
with the state laws. This would mean approximately $22 million of the budget would not be
allocated. This would leave an actual budget of approximately $5 million. I am not willing to take
that risk based solely on attorney opinions!
RECOMMENDATION: In order to provide us all with the comfort level and additional caution
with our budget adoption process, I recommend that we re -advertise for a public hearing for budget
adoption. The budget hearing would be held on December 15 at 7:00 P.M. Upon completion of the
budget hearing, we would then adopt a new amended budget for 1997/98.
Agenda -December 1,1997
ACTION REQUIRED: The Council should adopt RESOLUTION 4384 to set the public hearing
for amending the budget on December 15.
The City of Kalispell
Incorporated 1892
Office of the City Attorney
Telephone (406)758-7708
Glen Neier, City Attorney P.O. Box 1997
Richard Hickel, Asst. City Attorney Kalispell MT 59903-1997
Theresa White, Legal Secretary Fax (406)758-7758
November 26, 1997
TO: Mayor, City Council and Manager
FROM: Glen Neier, City Attorne
R E: City Budget
I am in receipt of a letter dated November 20, 1997, from Richard DeJana, Esq., alleging certain
errors in properly budgeting and appropriating funds for use on the reconstruction of Central School.
The Council adopted Resolution No. 4351 on August 4, 1997. (1 have attached a copy of Resolution
No. 4351). According to the letter, the City improperly classified Tax Increment, and certain other
budgets, as "non -tax supported" and did not properly appropriate the funds to be spent on various
projects, including Central School.
With regard to the non -tax issue:
Section 7-6-4260, MCA sets forth the process by which the annual preliminary budget for a
municipality is formulated. The Section requires a listing of revenue and resources for the prior year,
current year, and proposed year; listing of expenditures for prior year, current year and proposed
year; projection of changes in fund balances; proposed capital expenditures, current and future debt
obligations; personnel or position counts for prior year, current year, and proposed year; and other
estimates. Finally the Section states:
(3) The preliminary annual operating budget for each fund for which the
municipality will levy an ad valorem tax must include the amount to be raised
by taxation, the taxable value and the number of mills to be levied.
Section 7-6-4261, MCA goes on to provide in part:
(1) Following the determination required by 7-6-4260, the governing body shall
determine the amount to be raised for each fund for which a tax lew is to be
made by adding the cash balance in excess of outstanding unpaid warrants at
the close of the preceding fiscal year and the amount of estimated revenues,
if any, to accrue to the fund during the current fiscal year. It shall then
deduct the total amount obtained from the total amount of the appropriations
i;\NNptbudgetam.wpd
and authorized expenditures from the fund as determined by the governing
body in the budget adopted and approved. The amount remaining; is the
amount necessary to be raised for any fund by tax levy during the current
fiscal year.
The items identified in Section I of Resolution No. 4351 are funds derived, at least in part, through
tax levies imposed specifically for those funds. The items listed in Section II are not funds for which
the City sets any levy to accumulate. Therefore, under §§ 7-6-4260 and 7-6-4261 the items listed are
not tax supported funds.
The second issue is whether or not the City properly adopted the budget for and appropriated the
amounts specified in Section II of Resolution No. 4351.
The Council in accordance with Section 7-6-4265, MCA adopted the Preliminary Budget for fiscal
1998 on July 7, 1997 and scheduled a public hearing, as required by law, on said budget for July 21',
1997. The Preliminary Budget document was, with a few changes made after the public hearing, the
same as the Final Budget. Under Section 7-6-4267, MCA:
(1) Following the public hearing and after taking into consideration any public
comment, the governing body may amend the preliminary municipal budget.
The preliminary municipal budget must be updated by the finance officer,
reflecting any changes made by the governing body. The amended preliminary
budget, approved by the governing body, constitutes the final budget of the
municipality for the fiscal year that it is intended to follow. The governing
body shall then pass a resolution for the fiscal year adopting the final
municipal budget and authorizing appropriations.
Both the Preliminary Budget Document and the Final Budget Document, published by the City,
contained revenue sources, expenditures, balance changes, capital expenditures, schedules of
personnel and data on debt obligations as required by Section 7-64260. If one is purely concerned
with notice and opportunity to be heard, the budget document was adopted properly. In terms of
syntax, Resolution No. 4351, which is basically the same form of resolution used since 1991, may
have left something to be desired. However, it is my opinion that no one could reasonably claim that
they were misled by the budget or appropriation process. To debate the matter further, seems to be
sophistic, that is: how many angels can dance on the head of a pin?
It appears that FBIA wants a chance to discuss the advisability of spending money on Central School.
Perhaps there are other items contained in Section II which might be subject to scrutiny through an
amendment process. However, the budget amendment process seems to present a less time-
consuming undertaking, than "going to court."
Therefore this office has prepared a budget amendment appropriating the funds contained in Section
II of Resolution No. 4351. If they desire the Council may set the public hearing, with proper notice
thereof, on said amendment for December 15, 1997.
i;\wp\budgetam.wpd
RESOLUTION NO. 4351_
A RESOLUTION FIXING THE ANNUAL APPROPRIATIONS FOR THE CITY OF
KALISPELL, MONTANA, AS SET FORTH IN THE 1997-98 BUDGET ADOPTED BY
THE CITY COUNCIL.
SECTION I. That the annual appropriations for the General Fund and
other tax supported budgets of the City of Kalispell, Montana, and
the same is hereby fixed as follows:
Department
Proposed Budget
General Government
$ 186,633
City Council
111,054
City Manager
100,190
City Attorney
138,757
Finance
124,226
City Court
123,452
Public Works
104,635
Traffic Signals & Signs
91,283
Central Garage
283,085
Street
275,296
City Hall Maintenance
91,448
Police
1,452,987
Fire
909,934
Parks
288,746
Recreation
62,706
Basketball
10,029
Outdoor Recreation
43,086
Seniors
25,639
Tennis/Ice Skating
8,511
Pool
104,072
Total General Fund
$4,535,769
Comp. Insurance $ 310,600
Retirement 333,935
Health 422,641
G.O. Bond Fund 64,418
SECTION II. The following non -tax supported budgets are provided
herein for informational purposes only:
Airport $ 12,550
Tax Increment 10,435,497
Tax Increment -Airport $ 2,630,972
Tax Increment-Westside District 2,020,000
Parks In Lieu 28,883
Building Code Enforcement 296,491
Light Maintenance District 72,449
Decorative Light 6,048
Gas Tax 288,863
Special Street
Community Dev. Loan Revolving
Courtyard Maintenance Fund
Planning & Development (UDAG)
Affordable Housing Fund
Drug Enforcement
ISTEA
Debt Service (SID'S & Revolving)
Sidewalk & Curb Construction
Water Fund
Sewer/WWTP Fund
Storm Sewer
Ambulance Fund
Solid Waste
Data Processing
TOTAL ALL FUNDS
397,551
101,200
60,000
427,796
320,700
47,969
259,470
101,222
50,000
1,613,746
3,036,416
272,154
434,731
384,139
149,384
$26,799,103
PASSED AND APPROVED BY THE CITY COUNCIL AND MAYOR OF THE CITY OF
KALISPELL THIS 4th DAY OF August , 1997.
ATTEST:
' ff
MCMC----
unKc,"il
01
,d
�.D. Rauthe, Mayor
D
qOTICEOF PUBLIC
RESOLUTION
A RESOLUTION CALLING FOR A PUBLIC REARING TO AMEND THE ANNUAL
APPROPRIATIONS OF THE CITY OF KALISPELL, MONTANA, AS SET FORTS IN THE
1997-1998 BUDGET ADOPTED BY THE CITY COUNCIL.
WHEREAS, Resolution No. 4351 (Resolution Fixing Annual
Appropriations for the City of Kalispell, Montana, as set
forth in the 1997-1998 Budget Adopted By the City Council)
contained certain appropriations for Special Revenue Funds,
Enterprise Funds, Special Assessment Funds and other funds
not appropriated in accordance with 7-6-4271, MCA, and
WHEREAS, the sources of the funds are contained in the fiscal 1998
Final Budget of the City of Kalispell, and
WHEREAS, revenue accruing to the City not appropriated, pursuant to
7-6-4271, result in an increase in appropriation authority,
and
WHEREAS, the appropriations shall be as set forth as follows:
Department Proposed Amended Difference
Airport $ - 121550 $ 12 500 -0
Tax Increment
Downtown 10,435,497 10,435,497 -0-
Tax Increment -
Airport
2,630,972
2,630,972
-0-
Tax Increment-
Westside Dist.
2,020,000
2,020,972
-0-
Parks In Lieu
28,883
28,883
-0-
Building Code
Enforcement
296,491
296,491
-0-
Light Maintenance
District
72,449
76,449
-0-
Decorative Light
6,048
6,048
-0-
Gas Tax
288,863
288,863
-0-
Special Street
397,551
397,863
-0-
Community Dev.
Loan Revolving
101,200
101,200
-0-
Courtyard
Maintenance Fund
60,000
60,000
-0-
Planning &
Development (UDAG)
427,796
427,796
-0-
Affordable Housing
Fund
320,700
320,700
-0-
Drug Enforcement
47,969
47,969
-0-
ISTEA
259,470
259,470
-0-
Debt Service
(SID'S & Revolving)
101,222
101,472
250
-` Sidewalk &
Curb Construction
50,000
50,000
-0-
Water Fund LL 1,613,746
1,669,502
55,756
Sewer/WWTP Fund 3,036,416
3,036,416
-0-
Storm Sewer
272,154
272,154
-0-
Ambulance Fund
434,731
434,731
-0-
Solid Waste
384,139
384,139
-0-
Data Processing
149,384
149,384
-0-
City Health Ins.
-0-
750,000
750,000
NOW, THEREFORE, BE IT RESOLVED BY
THE CITY COUNCIL OF THE CITY OF
KALISPELL, AS FOLLOWS:
SECTION I. That
on December 15, 1997, at 7:00
o'clock P.M.,
in the Council
Chambers, City
Hall, Kalispell,
2
the City Council will hold a public hearing on
appropriating the funds as set forth in this
Resolution No. 4384.
SECTION II. That notice of the passage of this resolution
shall be published in accordance with Section 7-
1-4127, MCA.
PASSED AND APPROVED BY THE CITY COUNCIL AND MAYOR OF THE CITY OF
KALISPELL, THIS _ DAY OF DECEMBER, 1997.
Douglas D. Rauthe - Mayor
Attest:
Debbie Gifford, CMC
Clerk of Council
STATE OF MONTANA )
ss
County of Flathead )
COMES NOW Debbie Gifford, Clerk of Council for the City of
Kalispell, Montana and states as follows:
1. That she is the Clerk of Council for the City of Kalispell,
Montana.
2. That she caused to be published in the Daily Inter Lake,
the above Resolution and Notice of Public Hearing, pursuant
to Section 7-1-4128, MCA on December 2, 1997 and December
9, 1997.
Dated this 2nd day December, 1997
Debbie Gifford, CMC
Clerk of Council
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