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HomeMy WebLinkAboutOrdinance No. 3307-2022Sponsored by: Council Member Baisden KENAI CITY OF KENAI ORDINANCE NO. 3307-2022 AN ORDINANCE AMENDING KENAI MUNICIPAL CODE 7.25.020 — CITY BUDGET CONTROL, TO PROVIDE INCREASED FLEXIBILITY IN THE EXPENDITURE OF FUNDS AND MANAGEMENT OF CITY BUDGETS WHILE MAINTAINING ADEQUATE INTERNAL CONTROLS TO PROTECT THE PUBLIC'S INTEREST. WHEREAS, the Kenai City Council adopts an annual budget which creates the legal authority to expend funds up to a fixed amount and within specific accounts by fund; and, WHEREAS, amendments to the adopted budget are made by Council and Administration throughout the year within the specified limits of KMC 7.25.020; and, WHEREAS, the limits on allowable administrative adjustments to the budget within KMC 7.25.020 were last amended by Ordinance 2120-2005, adopted on September 21, 2005; and, WHEREAS, the $5,000 limit on the authority of the City Manager to move funds in line item accounts imposed by KMC 7.25.020 is overly restrictive and limits the Administration's ability to react to situations that arise during each budget year; and, WHEREAS, waiting for Council action for budget adjustments with four or more weeks between some Council Meetings creates delays in the ability to provide essential services; and, WHEREAS, the proposed amendments will not increase the authorized spending limit, the authority to increase this amount will remain the exclusive authority of Council, and the ability to transfer budget between different funds of the City is and will remain prohibited without an Ordinance of Council; and, WHEREAS, the proposed amendments limit the Administration's ability to move budgeted amounts between departments, within a fund, to $10,000, twice the current limit of$5,000; and, WHEREAS, the proposed amendments will remove the now $5,000 limit to move budgeted amounts between accounts within the same department of a fund; and, WHEREAS, the proposed amendments will remove the monthly reporting requirement for amendments to capital project accounts, but the ability to increase the overall budget of a project will remain at the sole discretion of Council; and, WHREAS, the proposed amendments will increase the flexibility to initiate budget revisions, will enhance the Administration's and Council's ability to conduct business, will maintain sufficient controls to protect the public interest, and is in the best interest of the City. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, AS FOLLOWS: U Section 1. Amendment of Section of Kenai Municipal Code: That Kenai Municipal Code, Section 7.25.020 is hereby amended as follows: New Text Underlined, [DELETED TEXT BRACKETED] Ordinance No. 3307-2022 Page 2 of 2 7.25.020 City budget control. (a) After approval by the Finance Director as to availability of unencumbered balances, transfers [IN AMOUNTS LESS THAN FIVE THOUSAND DOLLARS ($5,000.00)3 up to the amount of available funds may be made in line item accounts within [THE GENERAL FUND, SPECIAL REVENUE FUNDS, DEBT SERVICE FUNDS, ENTERPRISE FUNDS AND INTERNAL SERVICE FUNDS WITHOUT APPROVAL BY THE CITY COUNCIL] a department of a fund and by up to ten thousand dollars ($10,000.00) between the accounts of departments within a fund. The City Clerk may make such transfers within the General Fund Department of the City Clerk, and the City Attorney may make such transfers within the General Fund Department of Law. The City Manager may make such transfers in all other areas except in the Legislative Department, which may be made by the Mayor or designee. The budgetary [eve[ of control will be the project level for Capita[ Project Funds. [OBJECT LEVEL TRANSFERS OF FIVE THOUSAND DOLLARS ($5,000.00) OR MORE WITHIN A PROJECT WILL BE REPORTED TO THE COUNCIL ON A MONTHLY BASIS.] (b) The City Council, by resolution, may make transfers in any amounts of unencumbered balances of line item accounts within a Department or within a fund. (c) The City Administrator is directed to charge all disbursements to 'cost centers" established by the budget. A `cost center" is de -fined as a provision for expenditure specified by the budget of the City of Kenai for a department or activity specifically so recognized. Section 2. Severability: That if any part or provision of this ordinance or application thereof to any person or circumstances is adjudged invalid by any court of competent jurisdiction, such judgment shall be confined in its operation to the part, provision, or application directly involved in all controversy in which this judgment shall have been rendered, and shall not affect or impair the validity of the remainder of this title or application thereof to other persons or circumstances. The City Council hereby declares that it would have enacted the remainder of this ordinance even without such part, provision, or application. Section 3. Effective Date: That pursuant to KMC 1.15.070(f), this ordinance shall take effect 30 days after enactment. ENACTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, THIS 21ST DAY OF SEPTEMBER, 2022. ATMTEST: �AAC A C)A Michell MMC, City Clerk 'ey -- Brian Gabriel Sr., Mayor Introduced: September 7, 2022 Enacted: September 21, 2022 Effective: October 21, 2022 New Text Underlined; [DELETED TEXT BRACKETED] v KENAI City of Kenai 1 210 Ficlalgo Ave, Kenai, AK 99611-7794 1907.283.7535 1 www.kenaixity MEMORANDUM TO: Mayor Gabriel and Council Members FROM: Council Member James Baisden DATE: August 31, 2022 SUBJECT: Ordinance 3307-2022 Amending Kenai Municipal Code (KMC) 7.25.020, City Budget Control The purpose of this memo is to request your support for adoption of Ordinance 3307-2022 which will amend KMC 7.25.020. KMC 7.25.020 authorizes who may and under what circumstances transfers can be made in the City's annually adopted budget. Currently any budget transfers of $5,000 or more requires the approval, by resolution, of the City Council except those for line items within capital projects for which revisions may be made in any amount within a project, but must be reported to Council monthly. The $5,000 limit has not increased since 2005 when it increased from $2,500 to $5,000. These limits are too restrictive and limiting, requiring numerous resolutions annually which inhibits the Administration in its efforts to provide services to the Citizens of Kenai. Limits are important to ensuring the public's interest is protected, but should not be so restrictive as to limit the ability to effectively provide City services. In preparing this Ordinance the limits of other governments were examined for comparative purposes. City codes varied from least restrictive being Seward which allows its City Manager to move unlimited amounts within a fund to the City of Kenai's being most restrictive. The proposed change mirrors the City of Wasilla's code. Propose changes to KMC 7.25.020 will 1. Limit the Administration's ability to move budget between departments of a fund to $10,000. The limit is currently $5,000 between accounts within a fund. 2. Allow for the city manager to move unlimited budgeted funds within a department of a fund. 3. Reduce the number of legislative items brought to Council for budget revisions which almost always pass by unanimous consent or a unanimous vote of Council. 4. Eliminate the need for reporting budget revisions between capital project accounts for which the budgetary control is unchanged at the project level. The Authority to increase the budget will remain solely within Council's authority. These proposed changes will maintain adequate controls and safeguards to protect the public while enhancing the j Administration's ability to provide services to the citizens of Kenai. Your support is respectfully I requested. K E N A I City of Kenai 1210 Fidalgo Ave, Kenai, AK 99611-7794 1907.283.7535 1 www.kenaixity MEMORANDUM TO: Mayor Gabriel and Council Members FROM: James Baisden, Council Member DATE: September 21, 2022 SUBJECT: Ordinance 3307-2022 Requested Amendment The purpose of this memo is to request an amendment to Ordinance 3307-2022. The ordinance as presented includes a minor error that if unchanged would result in a significantly different outcome. The intent of the Ordinance was to allow the administration to make budget adjustments with no dollar value limit within a department of a fund and up to $10,000 between the departments of a fund. Current language allowed for unlimited transfers within a department of a fund, but contradicted that by limiting the movement within a department to $10,000, and was silent upon the ability to transfer budget between departments within a fund. The following amendment is respectfully requested to correct this error. Within Section 1, Amend the first sentence of 7.25.020(a) by deleting a and adding an s to department in the phrase "by up to ten thousand dollars ($10,000.00) between the accounts of a department within a fund." After amendment the first sentence of 7.25.020(a) should read, "After approval by the Finance Director as to availability of unencumbered balances, transfers up to the amount of available funds may be made in line item accounts within a department of a fund and by up to ten thousand dollars ($10,000.00) between the accounts of departments within a fund. Thank you for your consideration.