This document includes Senate Committee Amendments incorporated into the bill on Tue, Feb 28, 2017 at 2:35 PM by lpoole.
Representative Jefferson Moss proposes the following substitute bill:


1     
MUNICIPAL ENTERPRISE FUND AMENDMENTS

2     
2017 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Jefferson Moss

5     
Senate Sponsor: Howard A. Stephenson

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions relating to municipal budgets.
10     Highlighted Provisions:
11          This bill:
12          ▸     modifies language relating to transfers of money from a municipal enterprise fund
13     to another fund;
14          ▸     requires a municipality that intends to transfer money from an enterprise fund to
15     another fund to provide public notice of the intended transfer, clearly identify the
16     intended transfer in the tentative budget or budget amendment, and hold a separate
17     and independent public hearing;
18          ▸     requires a municipality that adopts a budget or budget amendment that includes an
19     enterprise fund transfer to provide specified public notice; and
20          ▸     makes technical and conforming changes.
21     Money Appropriated in this Bill:
22          None
23     Other Special Clauses:
24          None
25     Utah Code Sections Affected:
26     AMENDS:
27          10-5-107, as last amended by Laws of Utah 2016, Chapter 353
28          10-6-135, as last amended by Laws of Utah 2016, Chapters 348 and 353
29     ENACTS:
30          10-5-107.5, Utah Code Annotated 1953
31          10-6-135.5, Utah Code Annotated 1953
32     

33     Be it enacted by the Legislature of the state of Utah:
34          Section 1. Section 10-5-107 is amended to read:
35          10-5-107. Tentative budgets required for public inspection -- Contents --
36     Adoption of tentative budget.
37          (1) (a) On or before the first regularly scheduled town council meeting of May, the
38     mayor shall:
39          (i) in accordance with Subsection (1)(b), prepare for the ensuing year a tentative budget
40     for each fund for which a budget is required;
41          (ii) make the tentative budget available for public inspection; and
42          (iii) submit the tentative budget to the town council.
43          (b) The tentative budget for each fund shall set forth in tabular form:
44          (i) actual revenues and expenditures in the last completed fiscal year;
45          (ii) estimated total revenues and expenditures for the current fiscal year; and
46          (iii) the mayor's estimates of revenues and expenditures for the budget year.
47          (2) (a) The mayor shall:
48          (i) estimate the amount of revenue available to serve the needs of each fund;
49          (ii) estimate the portion to be derived from all sources other than general property
50     taxes; and
51          (iii) estimate the portion that shall be derived from general property taxes.
52          (b) From the estimates required by Subsection (2)(a), the mayor shall compute and
53     disclose in the budget the lowest rate of property tax levy that will raise the required amount of
54     revenue, calculating the levy on the latest taxable value.
55          [(3) A governing body may spend or transfer money deposited in an enterprise fund for
56     a good, service, project, venture, or other purpose that is not directly related to the goods or
57     services provided by the enterprise for which the enterprise fund was created, if the governing
58     body:]
59          [(a) transfers the money from the enterprise fund to another fund; and]
60          [(b) complies with the hearing and notice requirements of Subsections (5)(a), (b), and
61     (c).]
62          [(4)] (3) (a) Before the public hearing required under Section 10-5-108, the town
63     council:
64          (i) shall review, consider, and tentatively adopt the tentative budget in any regular
65     meeting or special meeting called for that purpose; and
66          (ii) may amend or revise the tentative budget.
67          (b) At the meeting at which the town council adopts the tentative budget, the council
68     shall establish the time and place of the public hearing required under Section 10-5-108.
69          [(5) (a) Except as provided in Subsection (5)(d), if a town council includes in a
70     tentative budget, or an amendment to a budget, allocations or transfers from an enterprise fund
71     to another fund for a good, service, project, venture, or purpose other than reasonable
72     allocations of costs between the enterprise fund and the other fund, the governing body shall:]
73          [(i) hold a public hearing;]
74          [(ii) prepare a written notice of the date, time, place, and purpose of the hearing as
75     described in Subsection (5)(b); and]
76          [(iii) subject to Subsection (5)(c), mail the notice to each enterprise fund customer at
77     least seven days before the day of the hearing.]
78          [(b) The purpose portion of the written notice shall identify:]
79          [(i) the enterprise fund from which money is being allocated or transferred;]
80          [(ii) the amount being allocated or transferred; and]
81          [(iii) the fund to which the money is being allocated or transferred.]
82          [(c) The town council:]
83          [(i) may print the written notice required under Subsection (5)(a)(ii) on the enterprise
84     fund customer's bill; and]
85          [(ii) shall include the written notice required under Subsection (5)(a)(ii) as separate
86     notification mailed or transmitted with the enterprise fund customer's bill.]
87          [(d) A governing body is not required to repeat the notice and hearing requirements in
88     this Subsection (5) if the funds to be allocated or transferred for the current year were
89     previously approved by the governing body during the current year and at a public hearing that
90     complies with the notice and hearing requirements of this Subsection (5).]
91          Section 2. Section 10-5-107.5 is enacted to read:
92          10-5-107.5. Transfer of enterprise fund money to another fund.
93          (1) As used in this section:
94          (a) "Budget hearing" means a public hearing required under Section 10-5-108.
95          (b) "Enterprise fund accounting data" means a detailed overview of the various
96     enterprise funds of the town that includes:
97          (i) a cost accounting breakdown of how money in the enterprise fund is being used to
98     cover, as applicable:
99          (A) administrative and overhead costs of the town attributable to the operation of the
100     enterprise for which the enterprise fund was created; and
101          (B) other costs not associated with the enterprise for which the enterprise fund was
102     created; and
103          (ii) specific enterprise fund information.
104          (c) "Enterprise fund hearing" means the public hearing required under Subsection
105     (3)(d).
106          (d) "Specific enterprise fund information" means:
107          (i) the dollar amount of transfers from an enterprise fund to another fund; and
108          (ii) the percentage of the total enterprise fund expenditures represented by each transfer
109     to another fund.
110          (2) Subject to the requirements of this section, a town may transfer money in an
111     enterprise fund to another fund to pay for a good, service, project, venture, or other purpose
112     that is not directly related to the goods or services provided by the enterprise for which the
113     enterprise fund was created.
114          (3) The governing body of a town that intends to transfer money in an enterprise fund
115     to another fund shall:
116          (a) provide notice of the intended transfer as required under Subsection (4);
117          (b) clearly identify in a separate section or document accompanying the town's
118     tentative budget or, if an amendment to the town's budget includes or is based on an intended
119     transfer, in a separate section or document accompanying the amendment to the town's budget:
120          (i) the enterprise fund from which money is intended to be transferred; and
121          (ii) the specific enterprise fund information for that enterprise fund;
122          (c) provide notice of an enterprise fund hearing, as required in Subsection (4); and
123          (d) hold an enterprise fund hearing before the adoption of the town's budget or, if
124     applicable, the amendment to the budget.
125          (4) (a) At least seven days before holding an enterprise fund hearing, a governing body
126     shall:
127          (i) provide the notice described in Subsection (4)(b) by:
128          (A) mailing a copy of the notice to users of the goods or services provided by the
129     enterprise for which the enterprise fund was created Ŝ→ , if the town regularly mails users a
129a     periodic billing for the goods or services ←Ŝ ;
129b     Ŝ→      (B) emailing a copy of the notice to users of the goods or services provided by the
129c     enterprise for which the enterprise fund was created, if the town regularly emails users a
129d     periodic billing for the goods or services; ←Ŝ
130          Ŝ→ [(B)] (C) ←Ŝ posting the notice on the Utah Public Notice Website created in
130a     Section 63F-1-701;
131     and
132          Ŝ→ [(C)] (D) ←Ŝ if the town has a website, prominently posting the notice on the town's
132a     website
133     until the enterprise fund hearing is concluded; and
134          (ii) if the town communicates with the public through a social media platform, publish
135     notice of the date, time, place, and purpose of the enterprise fund hearing using the social
136     media platform.
137          (b) The notice required under Subsection (4)(a)(i) shall:
138          (i) explain the intended transfer of enterprise fund money to another fund;
139          (ii) include specific enterprise fund information for each enterprise fund from which
140     money is intended to be transferred;
141          (iii) provide the date, time, and place of the enterprise fund hearing; and
142          (iv) explain the purpose of the enterprise fund hearing.
143          (5) (a) An enterprise fund hearing shall be separate and independent from a budget
144     hearing and any other public hearing.
145          (b) At an enterprise fund hearing, the governing body shall:
146          (i) explain the intended transfer of enterprise fund money to another fund;
147          (ii) provide enterprise fund accounting data to the public; and
148          (iii) allow members of the public in attendance at the hearing to comment on:
149          (A) the intended transfer of enterprise fund money to another fund; and
150          (B) the enterprise fund accounting data.
151          (6) (a) If a governing body adopts a budget or a budget amendment that includes or is
152     based on a transfer of money from an enterprise fund to another fund, the governing body shall:
153          (i) within 60 days after adopting the budget Ŝ→ [,] or budget amendment: ←Ŝ
153a     Ŝ→      (A) ←Ŝ mail Ŝ→ a notice ←Ŝ to users of the goods or services
154     provided by the enterprise for which the enterprise fund was created Ŝ→ [a notice that:
155          (A) announces the adoption of a budget or budget amendment that includes or is based
156     on a transfer of money from an enterprise fund to another fund; and
157          (B) includes the specific enterprise fund information;] , if the town regularly mails users a
157a     periodic billing for the goods or services; and
157b          (B) email a notice to users of the goods or services provided by the enterprise for which
157c     the enterprise fund was created, if the town regularly emails users a periodic billing for the
157d     goods or services; ←Ŝ
158          (ii) within seven days after adopting the budget or budget amendment:
159          (A) post enterprise fund accounting data on the town's website, if the town has a
160     website;
161          (B) using the town's social Ŝ→ [medial] media ←Ŝ platform, publish notice of the
161a     adoption of a budget
162     or budget amendment that includes or is based on a transfer of money from an enterprise fund
163     to another fund, if the town communicates with the public through a social media platform; and
164          (iii) within 30 days after adopting the budget, submit to the state auditor the specific
165     enterprise fund information for each enterprise fund from which money will be transferred.
165a     Ŝ→      (b) A notice required under Subsection (6)(a)(i) shall: ←Ŝ
165b     Ŝ→      (i) announce the adoption of a budget or budget amendment that includes or is based on
165c     a transfer of money from an enterprise fund to another fund; and ←Ŝ
165d     Ŝ→      (ii) include the specific enterprise fund information. ←Ŝ
166          Ŝ→ [(b)] (c) ←Ŝ The governing body shall maintain the website posting required under
166a     Subsection
167     (6)(a)(ii)(A) continuously until another posting is required under Subsection (4)(a)(i)(C).
168          Section 3. Section 10-6-135 is amended to read:
169          10-6-135. Operating and capital budgets.
170          (1) (a) As used in this section, "operating and capital budget" means a plan of financial
171     operation for an enterprise fund or other required special fund that includes estimates of
172     operating resources, expenses, and other outlays for a fiscal period.
173          (b) Except as otherwise expressly provided, any reference to "budget" or "budgets" and
174     the procedures and controls relating to a budget or budgets in other sections of this chapter do
175     not apply or refer to the operating and capital budgets described in this section.
176          (2) At or before the time the governing body adopts budgets for the funds described in
177     Section 10-6-109, the governing body shall adopt:
178          (a) an operating and capital budget for each enterprise fund for the ensuing fiscal
179     period; and
180          (b) the type of budget for other special funds as required by the Uniform Accounting
181     Manual for Utah Cities.
182          (3) (a) The governing body shall adopt and administer an operating and capital budget
183     in accordance with this Subsection (3).
184          [(b) A governing body may spend or transfer money deposited in an enterprise fund for
185     a good, service, project, venture, or other purpose that is not directly related to the goods or
186     services provided by the enterprise for which the enterprise fund was created, if the governing
187     body:]
188          [(i) transfers the money from the enterprise fund to another fund; and]
189          [(ii) complies with the hearing and notice requirements of Subsections (3)(f)(i), (ii),
190     and (iii).]
191          [(c)] (b) At or before the first regularly scheduled meeting of the governing body in the
192     last May of the current fiscal period, the budget officer shall:
193          (i) prepare for the ensuing fiscal period and file with the governing body a tentative
194     operating and capital budget for:
195          (A) each enterprise fund; and
196          (B) other required special funds;
197          (ii) include with the tentative operating and capital budget described in Subsection
198     (3)(c) specific work programs as submitted by each department head; and
199          (iii) include any other supporting data required by the governing body.
200          [(d)] (c) Each city of the first or second class shall, and each city of the third, fourth, or
201     fifth class may, submit a supplementary estimate of all capital projects which a department
202     head believes should be undertaken within the three next succeeding fiscal periods.
203          [(e)] (d) (i) Subject to Subsection (3)[(e)](d)(ii), the budget officer shall prepare all
204     estimates after review and consultation with each department head described in Subsection
205     (3)[(d)](c).
206          (ii) After complying with Subsection (3)[(e)](d)(i), the budget officer may revise any
207     departmental estimate before it is filed with the governing body.
208          [(f) (i) Except as provided in Subsection (3)(f)(iv), if the governing body includes in a
209     tentative budget or an amendment to a budget allocations or transfers from an enterprise fund
210     to another fund or a good, service, project, venture, or purpose other than reasonable
211     allocations of costs between the enterprise fund and the other fund, the governing body shall:]
212          [(A) hold a public hearing;]
213          [(B) prepare a written notice of the date, time, place, and purpose of the hearing, as
214     described in Subsection (3)(f)(ii); and]
215          [(C) subject to Subsection (3)(f)(iii), mail the written notice to each enterprise fund
216     customer at least seven days before the day of the hearing.]
217          [(ii) The purpose portion of the written notice required under Subsection (3)(f)(i)(B)
218     shall identify:]
219          [(A) the enterprise fund from which money is being transferred;]
220          [(B) the amount being transferred; and]
221          [(C) the fund to which the money is being transferred.]
222          [(iii) The governing body:]
223          [(A) may print the written notice required under Subsection (3)(f)(i) on the enterprise
224     fund customer's bill; and]
225          [(B) shall include the written notice required under Subsection (3)(f)(i) as a separate
226     notification mailed or transmitted with the enterprise fund customer's bill.]
227          [(iv) A governing body is not required to repeat the notice and hearing requirements in
228     this Subsection (3)(f) if the funds to be allocated or transferred for the current year were
229     previously approved by the governing body during the current year and at a public hearing that
230     complies with the notice and hearing requirements of this Subsection (3)(f).]
231          (4) (a) Each tentative budget, amendment to a budget, or budget shall be reviewed and
232     considered by the governing body at any regular meeting or special meeting called for that
233     purpose.
234          (b) The governing body may make changes in the tentative budgets.
235          (5) Budgets for enterprise or other required special funds shall comply with the public
236     hearing requirements established in Sections 10-6-113 and 10-6-114.
237          (6) (a) Before the last June 30 of each fiscal period, or, in the case of a property tax
238     increase under Sections 59-2-919 through 59-2-923, before August 17 of the year for which a
239     property tax increase is proposed, the governing body shall adopt an operating and capital
240     budget for each applicable fund for the ensuing fiscal period.
241          (b) A copy of the budget as finally adopted for each fund shall be:
242          (i) certified by the budget officer;
243          (ii) filed by the budget officer in the office of the city auditor or city recorder;
244          (iii) available to the public during regular business hours; and
245          (iv) filed with the state auditor within 30 days after the day on which the budget is
246     adopted.
247          (7) (a) Upon final adoption, the operating and capital budget is in effect for the budget
248     period, subject to later amendment.
249          (b) During the budget period the governing body may, in any regular meeting or special
250     meeting called for that purpose, review any one or more of the operating and capital budgets
251     for the purpose of determining if the total of any of them should be increased.
252          (c) If the governing body decides that the budget total of one or more of the funds
253     should be increased under Subsection (7)(b), the governing body shall follow the procedures
254     set forth in Section 10-6-136.
255          (8) Expenditures from operating and capital budgets shall conform to the requirements
256     relating to budgets specified in Sections 10-6-121 through 10-6-126.
257          Section 4. Section 10-6-135.5 is enacted to read:
258          10-6-135.5. Transfer of enterprise fund money to another fund.
259          (1) As used in this section:
260          (a) "Budget hearing" means a public hearing required under Section 10-6-114.
261          (b) "Enterprise fund accounting data" means a detailed overview of the various
262     enterprise funds of the city that includes:
263          (i) a cost accounting breakdown of how money in the enterprise fund is being used to
264     cover, as applicable:
265          (A) administrative and overhead costs of the city attributable to the operation of the
266     enterprise for which the enterprise fund was created; and
267          (B) other costs not associated with the enterprise for which the enterprise fund was
268     created; and
269          (ii) specific enterprise fund information.
270          (c) "Enterprise fund hearing" means the public hearing required under Subsection
271     (3)(d).
272          (d) "Specific enterprise fund information" means:
273          (i) the dollar amount of transfers from an enterprise fund to another fund; and
274          (ii) the percentage of the total enterprise fund expenditures represented by each transfer
275     to another fund.
276          (2) Subject to the requirements of this section, a city may transfer money in an
277     enterprise fund to another fund to pay for a good, service, project, venture, or other purpose
278     that is not directly related to the goods or services provided by the enterprise for which the
279     enterprise fund was created.
280          (3) The governing body of a city that intends to transfer money in an enterprise fund to
281     another fund shall:
282          (a) provide notice of the intended transfer as required under Subsection (4);
283          (b) clearly identify in a separate section or document accompanying the city's tentative
284     budget or, if an amendment to the city's budget includes or is based on an intended transfer, in
285     a separate section or document accompanying the amendment to the city's budget:
286          (i) the enterprise fund from which money is intended to be transferred; and
287          (ii) the specific enterprise fund information for that enterprise fund;
288          (c) provide notice of an enterprise fund hearing, as required in Subsection (4); and
289          (d) hold an enterprise fund hearing before the adoption of the city's budget or, if
290     applicable, the amendment to the budget.
291          (4) (a) At least seven days before holding an enterprise fund hearing, a governing body
292     shall:
293          (i) provide the notice described in Subsection (4)(b) by:
294          (A) mailing a copy of the notice to users of the goods or services provided by the
295     enterprise for which the enterprise fund was created Ŝ→ , if the city regularly mails users a
295a     periodic billing for the goods or services ←Ŝ ;
295b     Ŝ→      (B) emailing a copy of the notice to users of the good or services provided by the
295c     enterprise for which the enterprise fund was created, if the city regularly emails users a
295d     periodic billing for the goods or services; ←Ŝ
296          Ŝ→ [(B)] (C) ←Ŝ posting the notice on the Utah Public Notice Website created in Section
296a     63F-1-701;
297     and
298          Ŝ→ [(C)] (D) ←Ŝ if the city has a website, prominently posting the notice on the city's
298a     website until
299     the enterprise fund hearing is concluded; and
300          (ii) if the city communicates with the public through a social media platform, publish
301     notice of the date, time, place, and purpose of the enterprise fund hearing using the social
302     media platform.
303          (b) The notice required under Subsection (4)(a)(i) shall:
304          (i) explain the intended transfer of enterprise fund money to another fund;
305          (ii) include specific enterprise fund information for each enterprise fund from which
306     money is intended to be transferred;
307          (iii) provide the date, time, and place of the enterprise fund hearing; and
308          (iv) explain the purpose of the enterprise fund hearing.
309          (5) (a) An enterprise fund hearing shall be separate and independent from a budget
310     hearing and any other public hearing.
311          (b) At an enterprise fund hearing, the governing body shall:
312          (i) explain the intended transfer of enterprise fund money to another fund;
313          (ii) provide enterprise fund accounting data to the public; and
314          (iii) allow members of the public in attendance at the hearing to comment on:
315          (A) the intended transfer of enterprise fund money to another fund; and
316          (B) the enterprise fund accounting data.
317          (6) (a) If a governing body adopts a budget or a budget amendment that includes or is
318     based on a transfer of money from an enterprise fund to another fund, the governing body shall:
319          (i) within 60 days after adopting the budget or budget amendment Ŝ→ [,] : ←Ŝ
319a     Ŝ→      (A) ←Ŝ mail Ŝ→ a notice ←Ŝ to users of the
320     goods or services provided by the enterprise for which the enterprise fund was created Ŝ→ [a notice
321     that:
322          (A) announces the adoption of a budget or budget amendment that includes or is based
323     on a transfer of money from an enterprise fund to another fund; and
324          (B) includes the specific enterprise fund information;] , if the city regularly mails users a
324a     periodic billing for the goods or services; and ←Ŝ
324b     Ŝ→      (B) email a notice to users of the goods or services provided by the enterprise for which
324c     the enterprise fund was created, if the city regularly emails users a periodic billing for the
324d     goods or services; ←Ŝ
325          (ii) within seven days after adopting the budget or budget amendment:
326          (A) post enterprise fund accounting data on the city's website, if the city has a website;
327          (B) using the city's social Ŝ→ [medial] media ←Ŝ platform, publish notice of the adoption
327a     of a budget or
328     budget amendment that includes or is based on a transfer of money from an enterprise fund to
329     another fund, if the city communicates with the public through a social media platform; and
330          (iii) within 30 days after adopting the budget, submit to the state auditor the specific
331     enterprise fund information for each enterprise fund from which money will be transferred.
331a     Ŝ→      (b) A notice required under Subsection (6)(a)(i) shall: ←Ŝ
331b     Ŝ→      (i) announce the adoption of a budget or budget amendment that includes or is based on 331c     a transfer of money from an enterprise fund to another fund; and ←Ŝ
331d     Ŝ→      (ii) include the specific enterprise fund information. ←Ŝ
332          Ŝ→ [(b)] (c) ←Ŝ The governing body shall maintain the website posting required under
332a     Subsection
333     (6)(a)(ii)(A) continuously until another posting is required under Subsection (4)(a)(i)(C).