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          ▸     eliminates language allowing municipalities to spend or transfer money in an
13     enterprise fund for something not directly related to the enterprise; and
14          ▸     authorizes a municipality to spend or transfer money in an enterprise fund for the
15     proportionate share of the municipality's overhead costs attributable to the operation
16     of the enterprise, under specified circumstances.
17     Money Appropriated in this Bill:
18          None
19     Other Special Clauses:
20          None
21     Utah Code Sections Affected:
22     AMENDS:
23          10-5-107, as last amended by Laws of Utah 2016, Chapter 353
24          10-6-135, as last amended by Laws of Utah 2016, Chapters 348 and 353
25     

26     Be it enacted by the Legislature of the state of Utah:
27          Section 1. Section 10-5-107 is amended to read:
28          10-5-107. Tentative budgets required for public inspection -- Contents --
29     Adoption of tentative budget.
30          (1) (a) On or before the first regularly scheduled town council meeting of May, the
31     mayor shall:
32          (i) in accordance with Subsection (1)(b), prepare for the ensuing year a tentative budget
33     for each fund for which a budget is required;
34          (ii) make the tentative budget available for public inspection; and
35          (iii) submit the tentative budget to the town council.
36          (b) The tentative budget for each fund shall set forth in tabular form:
37          (i) actual revenues and expenditures in the last completed fiscal year;
38          (ii) estimated total revenues and expenditures for the current fiscal year; and
39          (iii) the mayor's estimates of revenues and expenditures for the budget year.
40          (2) (a) The mayor shall:
41          (i) estimate the amount of revenue available to serve the needs of each fund;
42          (ii) estimate the portion to be derived from all sources other than general property
43     taxes; and
44          (iii) estimate the portion that shall be derived from general property taxes.
45          (b) From the estimates required by Subsection (2)(a), the mayor shall compute and
46     disclose in the budget the lowest rate of property tax levy that will raise the required amount of
47     revenue, calculating the levy on the latest taxable value.
48          (3) A governing body may spend or transfer money deposited in an enterprise fund [for
49     a good, service, project, venture, or other purpose that is not directly related to the goods or
50     services provided by the enterprise for which the enterprise fund was created, if the governing
51     body:] to pay the proportionate share of the town's overhead costs directly attributable to the
52     operation of the enterprise for which the enterprise fund was created if:
53          [(a) transfers the money from the enterprise fund to another fund; and]
54          [(b) complies with the hearing and notice requirements of Subsections (5)(a), (b), and
55     (c).]
56          (a) the budget clearly identifies the amount being spent or transferred; and
57          (b) the governing body describes in the budget or an appendix to the budget the
58     methodology used to calculate the amount being spent or transferred.
59          (4) (a) Before the public hearing required under Section 10-5-108, the town council:
60          (i) shall review, consider, and tentatively adopt the tentative budget in any regular
61     meeting or special meeting called for that purpose; and
62          (ii) may amend or revise the tentative budget.
63          (b) At the meeting at which the town council adopts the tentative budget, the council
64     shall establish the time and place of the public hearing required under Section 10-5-108.
65          [(5) (a) Except as provided in Subsection (5)(d), if a town council includes in a
66     tentative budget, or an amendment to a budget, allocations or transfers from an enterprise fund
67     to another fund for a good, service, project, venture, or purpose other than reasonable
68     allocations of costs between the enterprise fund and the other fund, the governing body shall:]
69          [(i) hold a public hearing;]
70          [(ii) prepare a written notice of the date, time, place, and purpose of the hearing as
71     described in Subsection (5)(b); and]
72          [(iii) subject to Subsection (5)(c), mail the notice to each enterprise fund customer at
73     least seven days before the day of the hearing.]
74          [(b) The purpose portion of the written notice shall identify:]
75          [(i) the enterprise fund from which money is being allocated or transferred;]
76          [(ii) the amount being allocated or transferred; and]
77          [(iii) the fund to which the money is being allocated or transferred.]
78          [(c) The town council:]
79          [(i) may print the written notice required under Subsection (5)(a)(ii) on the enterprise
80     fund customer's bill; and]
81          [(ii) shall include the written notice required under Subsection (5)(a)(ii) as separate
82     notification mailed or transmitted with the enterprise fund customer's bill.]
83          [(d) A governing body is not required to repeat the notice and hearing requirements in
84     this Subsection (5) if the funds to be allocated or transferred for the current year were
85     previously approved by the governing body during the current year and at a public hearing that
86     complies with the notice and hearing requirements of this Subsection (5).]
87          Section 2. Section 10-6-135 is amended to read:
88          10-6-135. Operating and capital budgets.
89          (1) (a) As used in this section, "operating and capital budget" means a plan of financial
90     operation for an enterprise fund or other required special fund that includes estimates of
91     operating resources, expenses, and other outlays for a fiscal period.
92          (b) Except as otherwise expressly provided, any reference to "budget" or "budgets" and
93     the procedures and controls relating to a budget or budgets in other sections of this chapter do
94     not apply or refer to the operating and capital budgets described in this section.
95          (2) At or before the time the governing body adopts budgets for the funds described in
96     Section 10-6-109, the governing body shall adopt:
97          (a) an operating and capital budget for each enterprise fund for the ensuing fiscal
98     period; and
99          (b) the type of budget for other special funds as required by the Uniform Accounting
100     Manual for Utah Cities.
101          (3) (a) The governing body shall adopt and administer an operating and capital budget
102     in accordance with this Subsection (3).
103          (b) A governing body may spend or transfer money deposited in an enterprise fund [for
104     a good, service, project, venture, or other purpose that is not directly related to the goods or
105     services provided by the enterprise for which the enterprise fund was created, if the governing
106     body:] to pay the proportionate share of the city's overhead costs directly attributable to the
107     operation of the enterprise for which the enterprise fund was created if:
108          [(i) transfers the money from the enterprise fund to another fund; and]
109          [(ii) complies with the hearing and notice requirements of Subsections (3)(f)(i), (ii),
110     and (iii).]
111          (i) the budget clearly identifies the amount being spent or transferred; and
112          (ii) the governing body describes in the budget or an appendix to the budget the
113     methodology used to calculate the amount being spent or transferred.
114          (c) At or before the first regularly scheduled meeting of the governing body in the last
115     May of the current fiscal period, the budget officer shall:
116          (i) prepare for the ensuing fiscal period and file with the governing body a tentative
117     operating and capital budget for:
118          (A) each enterprise fund; and
119          (B) other required special funds;
120          (ii) include with the tentative operating and capital budget described in Subsection
121     (3)(c) specific work programs as submitted by each department head; and
122          (iii) include any other supporting data required by the governing body.
123          (d) Each city of the first or second class shall, and each city of the third, fourth, or fifth
124     class may, submit a supplementary estimate of all capital projects which a department head
125     believes should be undertaken within the three next succeeding fiscal periods.
126          (e) (i) Subject to Subsection (3)(e)(ii), the budget officer shall prepare all estimates
127     after review and consultation with each department head described in Subsection (3)(d).
128          (ii) After complying with Subsection (3)(e)(i), the budget officer may revise any
129     departmental estimate before it is filed with the governing body.
130          [(f) (i) Except as provided in Subsection (3)(f)(iv), if the governing body includes in a
131     tentative budget or an amendment to a budget allocations or transfers from an enterprise fund
132     to another fund or a good, service, project, venture, or purpose other than reasonable
133     allocations of costs between the enterprise fund and the other fund, the governing body shall:]
134          [(A) hold a public hearing;]
135          [(B) prepare a written notice of the date, time, place, and purpose of the hearing, as
136     described in Subsection (3)(f)(ii); and]
137          [(C) subject to Subsection (3)(f)(iii), mail the written notice to each enterprise fund
138     customer at least seven days before the day of the hearing.]
139          [(ii) The purpose portion of the written notice required under Subsection (3)(f)(i)(B)
140     shall identify:]
141          [(A) the enterprise fund from which money is being transferred;]
142          [(B) the amount being transferred; and]
143          [(C) the fund to which the money is being transferred.]
144          [(iii) The governing body:]
145          [(A) may print the written notice required under Subsection (3)(f)(i) on the enterprise
146     fund customer's bill; and]
147          [(B) shall include the written notice required under Subsection (3)(f)(i) as a separate
148     notification mailed or transmitted with the enterprise fund customer's bill.]
149          [(iv) A governing body is not required to repeat the notice and hearing requirements in
150     this Subsection (3)(f) if the funds to be allocated or transferred for the current year were
151     previously approved by the governing body during the current year and at a public hearing that
152     complies with the notice and hearing requirements of this Subsection (3)(f).]
153          (4) (a) Each tentative budget, amendment to a budget, or budget shall be reviewed and
154     considered by the governing body at any regular meeting or special meeting called for that
155     purpose.
156          (b) The governing body may make changes in the tentative budgets.
157          (5) Budgets for enterprise or other required special funds shall comply with the public
158     hearing requirements established in Sections 10-6-113 and 10-6-114.
159          (6) (a) Before the last June 30 of each fiscal period, or, in the case of a property tax
160     increase under Sections 59-2-919 through 59-2-923, before August 17 of the year for which a
161     property tax increase is proposed, the governing body shall adopt an operating and capital
162     budget for each applicable fund for the ensuing fiscal period.
163          (b) A copy of the budget as finally adopted for each fund shall be:
164          (i) certified by the budget officer;
165          (ii) filed by the budget officer in the office of the city auditor or city recorder;
166          (iii) available to the public during regular business hours; and
167          (iv) filed with the state auditor within 30 days after the day on which the budget is
168     adopted.
169          (7) (a) Upon final adoption, the operating and capital budget is in effect for the budget
170     period, subject to later amendment.
171          (b) During the budget period the governing body may, in any regular meeting or special
172     meeting called for that purpose, review any one or more of the operating and capital budgets
173     for the purpose of determining if the total of any of them should be increased.
174          (c) If the governing body decides that the budget total of one or more of the funds
175     should be increased under Subsection (7)(b), the governing body shall follow the procedures
176     set forth in Section 10-6-136.
177          (8) Expenditures from operating and capital budgets shall conform to the requirements
178     relating to budgets specified in Sections 10-6-121 through 10-6-126.




Legislative Review Note
Office of Legislative Research and General Counsel