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, if the town regularly mails users a
130     periodic billing for the goods or services;
131          (B) emailing a copy of the notice to users of the goods or services provided by the
132     enterprise for which the enterprise fund was created, if the town regularly emails users a
133     periodic billing for the goods or services;
134          (C) posting the notice on the Utah Public Notice Website created in Section
135     63F-1-701; and
136          (D) if the town has a website, prominently posting the notice on the town's website
137     until the enterprise fund hearing is concluded; and
138          (ii) if the town communicates with the public through a social media platform, publish
139     notice of the date, time, place, and purpose of the enterprise fund hearing using the social
140     media platform.
141          (b) The notice required under Subsection (4)(a)(i) shall:
142          (i) explain the intended transfer of enterprise fund money to another fund;
143          (ii) include specific enterprise fund information for each enterprise fund from which
144     money is intended to be transferred;
145          (iii) provide the date, time, and place of the enterprise fund hearing; and
146          (iv) explain the purpose of the enterprise fund hearing.
147          (5) (a) An enterprise fund hearing shall be separate and independent from a budget
148     hearing and any other public hearing.
149          (b) At an enterprise fund hearing, the governing body shall:
150          (i) explain the intended transfer of enterprise fund money to another fund;
151          (ii) provide enterprise fund accounting data to the public; and
152          (iii) allow members of the public in attendance at the hearing to comment on:
153          (A) the intended transfer of enterprise fund money to another fund; and
154          (B) the enterprise fund accounting data.
155          (6) (a) If a governing body adopts a budget or a budget amendment that includes or is
156     based on a transfer of money from an enterprise fund to another fund, the governing body shall:
157          (i) within 60 days after adopting the budget or budget amendment:
158          (A) mail a notice to users of the goods or services provided by the enterprise for which
159     the enterprise fund was created, if the town regularly mails users a periodic billing for the
160     goods or services; and
161          (B) email a notice to users of the goods or services provided by the enterprise for
162     which the enterprise fund was created, if the town regularly emails users a periodic billing for
163     the goods or services;
164          (ii) within seven days after adopting the budget or budget amendment:
165          (A) post enterprise fund accounting data on the town's website, if the town has a
166     website;
167          (B) using the town's social media platform, publish notice of the adoption of a budget
168     or budget amendment that includes or is based on a transfer of money from an enterprise fund
169     to another fund, if the town communicates with the public through a social media platform; and
170          (iii) within 30 days after adopting the budget, submit to the state auditor the specific
171     enterprise fund information for each enterprise fund from which money will be transferred.
172          (b) A notice required under Subsection (6)(a)(i) shall:
173          (i) announce the adoption of a budget or budget amendment that includes or is based
174     on a transfer of money from an enterprise fund to another fund; and
175          (ii) include the specific enterprise fund information.
176          (c) The governing body shall maintain the website posting required under Subsection
177     (6)(a)(ii)(A) continuously until another posting is required under Subsection (4)(a)(i)(C).
178          Section 3. Section 10-6-135 is amended to read:
179          10-6-135. Operating and capital budgets.
180          (1) (a) As used in this section, "operating and capital budget" means a plan of financial
181     operation for an enterprise fund or other required special fund that includes estimates of
182     operating resources, expenses, and other outlays for a fiscal period.
183          (b) Except as otherwise expressly provided, any reference to "budget" or "budgets" and
184     the procedures and controls relating to a budget or budgets in other sections of this chapter do
185     not apply or refer to the operating and capital budgets described in this section.
186          (2) At or before the time the governing body adopts budgets for the funds described in
187     Section 10-6-109, the governing body shall adopt:
188          (a) an operating and capital budget for each enterprise fund for the ensuing fiscal
189     period; and
190          (b) the type of budget for other special funds as required by the Uniform Accounting
191     Manual for Utah Cities.
192          (3) (a) The governing body shall adopt and administer an operating and capital budget
193     in accordance with this Subsection (3).
194          [(b) A governing body may spend or transfer money deposited in an enterprise fund for
195     a good, service, project, venture, or other purpose that is not directly related to the goods or
196     services provided by the enterprise for which the enterprise fund was created, if the governing
197     body:]
198          [(i) transfers the money from the enterprise fund to another fund; and]
199          [(ii) complies with the hearing and notice requirements of Subsections (3)(f)(i), (ii),
200     and (iii).]
201          [(c)] (b) At or before the first regularly scheduled meeting of the governing body in the
202     last May of the current fiscal period, the budget officer shall:
203          (i) prepare for the ensuing fiscal period and file with the governing body a tentative
204     operating and capital budget for:
205          (A) each enterprise fund; and
206          (B) other required special funds;
207          (ii) include with the tentative operating and capital budget described in Subsection
208     (3)(c) specific work programs as submitted by each department head; and
209          (iii) include any other supporting data required by the governing body.
210          [(d)] (c) Each city of the first or second class shall, and each city of the third, fourth, or
211     fifth class may, submit a supplementary estimate of all capital projects which a department
212     head believes should be undertaken within the three next succeeding fiscal periods.
213          [(e)] (d) (i) Subject to Subsection (3)[(e)](d)(ii), the budget officer shall prepare all
214     estimates after review and consultation with each department head described in Subsection
215     (3)[(d)](c).
216          (ii) After complying with Subsection (3)[(e)](d)(i), the budget officer may revise any
217     departmental estimate before it is filed with the governing body.
218          [(f) (i) Except as provided in Subsection (3)(f)(iv), if the governing body includes in a
219     tentative budget or an amendment to a budget allocations or transfers from an enterprise fund
220     to another fund or a good, service, project, venture, or purpose other than reasonable
221     allocations of costs between the enterprise fund and the other fund, the governing body shall:]
222          [(A) hold a public hearing;]
223          [(B) prepare a written notice of the date, time, place, and purpose of the hearing, as
224     described in Subsection (3)(f)(ii); and]
225          [(C) subject to Subsection (3)(f)(iii), mail the written notice to each enterprise fund
226     customer at least seven days before the day of the hearing.]
227          [(ii) The purpose portion of the written notice required under Subsection (3)(f)(i)(B)
228     shall identify:]
229          [(A) the enterprise fund from which money is being transferred;]
230          [(B) the amount being transferred; and]
231          [(C) the fund to which the money is being transferred.]
232          [(iii) The governing body:]
233          [(A) may print the written notice required under Subsection (3)(f)(i) on the enterprise
234     fund customer's bill; and]
235          [(B) shall include the written notice required under Subsection (3)(f)(i) as a separate
236     notification mailed or transmitted with the enterprise fund customer's bill.]
237          [(iv) A governing body is not required to repeat the notice and hearing requirements in
238     this Subsection (3)(f) if the funds to be allocated or transferred for the current year were
239     previously approved by the governing body during the current year and at a public hearing that
240     complies with the notice and hearing requirements of this Subsection (3)(f).]
241          (4) (a) Each tentative budget, amendment to a budget, or budget shall be reviewed and
242     considered by the governing body at any regular meeting or special meeting called for that
243     purpose.
244          (b) The governing body may make changes in the tentative budgets.
245          (5) Budgets for enterprise or other required special funds shall comply with the public
246     hearing requirements established in Sections 10-6-113 and 10-6-114.
247          (6) (a) Before the last June 30 of each fiscal period, or, in the case of a property tax
248     increase under Sections 59-2-919 through 59-2-923, before August 17 of the year for which a
249     property tax increase is proposed, the governing body shall adopt an operating and capital
250     budget for each applicable fund for the ensuing fiscal period.
251          (b) A copy of the budget as finally adopted for each fund shall be:
252          (i) certified by the budget officer;
253          (ii) filed by the budget officer in the office of the city auditor or city recorder;
254          (iii) available to the public during regular business hours; and
255          (iv) filed with the state auditor within 30 days after the day on which the budget is
256     adopted.
257          (7) (a) Upon final adoption, the operating and capital budget is in effect for the budget
258     period, subject to later amendment.
259          (b) During the budget period the governing body may, in any regular meeting or special
260     meeting called for that purpose, review any one or more of the operating and capital budgets
261     for the purpose of determining if the total of any of them should be increased.
262          (c) If the governing body decides that the budget total of one or more of the funds
263     should be increased under Subsection (7)(b), the governing body shall follow the procedures
264     set forth in Section 10-6-136.
265          (8) Expenditures from operating and capital budgets shall conform to the requirements
266     relating to budgets specified in Sections 10-6-121 through 10-6-126.
267          Section 4. Section 10-6-135.5 is enacted to read:
268          10-6-135.5. Transfer of enterprise fund money to another fund.
269          (1) As used in this section:
270          (a) "Budget hearing" means a public hearing required under Section 10-6-114.
271          (b) "Enterprise fund accounting data" means a detailed overview of the various
272     enterprise funds of the city that includes:
273          (i) a cost accounting breakdown of how money in the enterprise fund is being used to
274     cover, as applicable:
275          (A) administrative and overhead costs of the city attributable to the operation of the
276     enterprise for which the enterprise fund was created; and
277          (B) other costs not associated with the enterprise for which the enterprise fund was
278     created; and
279          (ii) specific enterprise fund information.
280          (c) "Enterprise fund hearing" means the public hearing required under Subsection
281     (3)(d).
282          (d) "Specific enterprise fund information" means:
283          (i) the dollar amount of transfers from an enterprise fund to another fund; and
284          (ii) the percentage of the total enterprise fund expenditures represented by each transfer
285     to another fund.
286          (2) Subject to the requirements of this section, a city may transfer money in an
287     enterprise fund to another fund to pay for a good, service, project, venture, or other purpose
288     that is not directly related to the goods or services provided by the enterprise for which the
289     enterprise fund was created.
290          (3) The governing body of a city that intends to transfer money in an enterprise fund to
291     another fund shall:
292          (a) provide notice of the intended transfer as required under Subsection (4);
293          (b) clearly identify in a separate section or document accompanying the city's tentative
294     budget or, if an amendment to the city's budget includes or is based on an intended transfer, in
295     a separate section or document accompanying the amendment to the city's budget:
296          (i) the enterprise fund from which money is intended to be transferred; and
297          (ii) the specific enterprise fund information for that enterprise fund;
298          (c) provide notice of an enterprise fund hearing, as required in Subsection (4); and
299          (d) hold an enterprise fund hearing before the adoption of the city's budget or, if
300     applicable, the amendment to the budget.
301          (4) (a) At least seven days before holding an enterprise fund hearing, a governing body
302     shall:
303          (i) provide the notice described in Subsection (4)(b) by:
304          (A) mailing a copy of the notice to users of the goods or services provided by the
305     enterprise for which the enterprise fund was created, if the city regularly mails users a periodic
306     billing for the goods or services;
307          (B) emailing a copy of the notice to users of the goods or services provided by the
308     enterprise for which the enterprise fund was created, if the city regularly emails users a periodic
309     billing for the goods or services;
310          (C) posting the notice on the Utah Public Notice Website created in Section
311     63F-1-701; and
312          (D) if the city has a website, prominently posting the notice on the city's website until
313     the enterprise fund hearing is concluded; and
314          (ii) if the city communicates with the public through a social media platform, publish
315     notice of the date, time, place, and purpose of the enterprise fund hearing using the social
316     media platform.
317          (b) The notice required under Subsection (4)(a)(i) shall:
318          (i) explain the intended transfer of enterprise fund money to another fund;
319          (ii) include specific enterprise fund information for each enterprise fund from which
320     money is intended to be transferred;
321          (iii) provide the date, time, and place of the enterprise fund hearing; and
322          (iv) explain the purpose of the enterprise fund hearing.
323          (5) (a) An enterprise fund hearing shall be separate and independent from a budget
324     hearing and any other public hearing.
325          (b) At an enterprise fund hearing, the governing body shall:
326          (i) explain the intended transfer of enterprise fund money to another fund;
327          (ii) provide enterprise fund accounting data to the public; and
328          (iii) allow members of the public in attendance at the hearing to comment on:
329          (A) the intended transfer of enterprise fund money to another fund; and
330          (B) the enterprise fund accounting data.
331          (6) (a) If a governing body adopts a budget or a budget amendment that includes or is
332     based on a transfer of money from an enterprise fund to another fund, the governing body shall:
333          (i) within 60 days after adopting the budget or budget amendment:
334          (A) mail a notice to users of the goods or services provided by the enterprise for which
335     the enterprise fund was created, if the city regularly mails users a periodic billing for the goods
336     or services; and
337          (B) email a notice to users of the goods or services provided by the enterprise for
338     which the enterprise fund was created, if the city regularly emails users a periodic billing for
339     the goods or services;
340          (ii) within seven days after adopting the budget or budget amendment:
341          (A) post enterprise fund accounting data on the city's website, if the city has a website;
342          (B) using the city's social media platform, publish notice of the adoption of a budget or
343     budget amendment that includes or is based on a transfer of money from an enterprise fund to
344     another fund, if the city communicates with the public through a social media platform; and
345          (iii) within 30 days after adopting the budget, submit to the state auditor the specific
346     enterprise fund information for each enterprise fund from which money will be transferred.
347          (b) A notice required under Subsection (6)(a)(i) shall:
348          (i) announce the adoption of a budget or budget amendment that includes or is based
349     on a transfer of money from an enterprise fund to another fund; and
350          (ii) include the specific enterprise fund information.
351          (c) The governing body shall maintain the website posting required under Subsection
352     (6)(a)(ii)(A) continuously until another posting is required under Subsection (4)(a)(i)(C).
353