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CHA 10/02/2017 TO: Charter Commission Members FROM: Deb Skogen, City Clerk and Staff Liaison Date: September 15, 2017 Re: Charter Commission Meeting of October 2, 2017 This is a reminder to you that the next Charter Commission meeting will be held on Monday, October 2nd at 7:00 p.m. in Conference Room A on the Upper Level. stth I will be out of the office from September 21 through October 6 so please do not call or email me for this meeting. Roberta Collins will be helping with the October meeting. In order to ensure a quorum, please remember, the Charter Commission policy requires a member to call or e-mail staff before 10:00 a.m. Monday, October 2nd, as to whether or not you plan on attending the meeting. Please contact Roberta Collins by phone at (763) 572-3500 or e- mail her at Roberta.collins@fridleymn.gov about your attendance. If we do not have a quorum by 10:00 am, Roberta will send out an e-mail to see if additional members will attend. If by Noon there will not be a quorum, Roberta will send out an e-mail to all members and post a notice on the door announcing the cancellation of the meeting for those Commissioners who did not contact me, but came to the meeting. The Commission will continue its discussion of Chapter 7 pertaining to recommended changes from the Finance Director. A draft suggesting changes as well as the reasoning for the changes is attached. Please review the proposed changes prior to the meeting and come prepared for discussion and questions. If you have any other questions or concerns pertaining to this meeting, please contact Roberta. If you have any questions about proposed changes prepared by Shelly Peterson, Finance Director, you may contact her at 763-572-3520 or shelly.peterson@fridleymn.gov. CITY OF FRIDLEY CHARTER COMMISSION AGENDA MONDAY, OCTOBER 2, 2017 7:00 P.M. LOCATION: FRIDLEY MUNICIPAL CENTER CONFERENCE ROOM A UPPER LEVEL 1.CALL TO ORDER: 2.ROLL CALL: 3. APPROVAL OF AGENDA: Motion approving the September 5, 2017 meeting agenda 4. APPROVAL OF MINUTES Motion approving the October 2, 2017 meeting minutes 5. ADMINISTRATIVE MATTERS A. 6. OLD BUSINESS A. Continued Discussion of Chapter 7 7. NEW BUSINESS A. 8. FUTURE MEETING TOPICS/COMMUNICATIONS A. 9. ADJOURNMENT Motion to adjourn the meeting Next Regular Commission Meeting Date: November 6, 2017 CITY OF FRIDLEY CHARTER COMMISSION MEETING September 5, 2017 CALL TO ORDER: Chairperson Ostwald called the Charter Commission meeting to order at 7:00 p.m. ROLL CALL: Members Present: Commissioners Gary Braam, Don Findell, Richard Johnston, Ted Kranz, Bruce Nelson, Rick Nelson, David Ostwald, Barb Reiland, Valerie Rolstad, and Avonna Starck Members Absent: Commissioners Zach Crandall, Manuel Granroos, Pam Reynolds, Cindy Soule and Richard Walch Others Present: Deb Skogen, City Clerk/Staff Liaison Jake Foster, City Management Intern Scott Lund, Mayor Dolores Varichak, Councilmember Ward 2 APPROVAL OF AGENDA Commissioner Rolstad MOVED and Commissioner Braam seconded a motion approving the September 5, 2017, meeting agenda. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON OSTWALD DECLARED THE MOTION CARRIED. APPROVAL OF MINUTES Ms. Skogen stated the meeting date on page one should be May 15 not May 1. Commissioner Reiland said the sixth paragraph on page 6 should be corrected. The word “asked” will be removed from that sentence. Commissioner Nelson reminded staff there are now two Commissioner Nelsons and recommended placing their first name in the minutes when they speak. The minutes were reviewed and the first name will be added where appropriate. The minutes should reflect the last name of the guest who was at the meeting as Doth Commissioner Rick Nelson MOVED and Commissioner Rolstad seconded a motion approving the Charter Commission meeting minutes of May 15, 2017, as amended. CHARTER COMMISSION MEETING OF SEPTEMBER 5, 2017 PAGE 2 UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON OSTWALD DECLARED THE MOTION CARRIED. ADMINISTRATIVE MATTERS A. Charter Commissioner Membership Ms. Skogen stated that Commissioners Walch and Johnston terms expired in September. She had contacted Commissioner Walch and he was interested in serving another four year term. Commissioner Johnston said he was just getting started and would like to be reappointed to a full term. Commissioner Reiland MOVED and Commissioner Starck seconded a motion reappointing Richard Walch and Richard Johnston to the Charter Commission for a full four year term and directing staff to write a letter to the Chief Judge recommending the reappointments. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON OSTWALD DECLARED THE MOTION CARRIED. B.Update on Ordinance Amendment to Chapter 7 Ms. Skogen updated the Commissions on the ordinance to Chapter 7 of the Charter which was recommended to the City Council in May. The public hearing was scheduled and held and the first and second readings were held. If a referendum petition were circulated, it would have to be submitted within 60 days or by October 3rd. At this time staff has not heard of any petitions circulating. If a petition is not submitted, the ordinance becomes effective after 90 days or nd November 2. Once effective, the City Council may use the changes for planning the 2018 budget. Mayor Scott Lund thanked the Commissioners for all of their hard work and due diligence. He said staff was working on preparing the annual budget and has had some discussion with Council. In light of the changes, there will most likely be an increase, but it will not be 8% and suspect it will be under just under the 5%. Councilmember Dolores Varichak thanked the Commissioners for working so hard on Chapter 7 over the past year to understand the process and make the necessary changes. Mayor Lund said the City Council recognizes the importance of maintaining a workable budget that does not put the City in a deficit and to be responsible for all taxpayers that pay into the levy. OLD BUSINESS – DISCUSSION OF CHAPTER 7 CHARTER COMMISSION MEETING OF SEPTEMBER 5, 2017 PAGE 3 Ms. Skogen said the Commissioners were asked to review the memo prepared by the Finance Director in May as it related to accounting standards and regulations at the state and federal law changes. She said it was their opportunity to ask questions so answers could be provided at the next meeting. The easiest way to begin would be to go section by section. Chairperson Ostwald reviewed the memo relating to Section 7.04. Commissioner Rick Nelson suggested listing the title of Chapter 275, as the statute changes are made from time to time, the numbering changes or language is deleted. The title would give us a frame of reference for future use. Commissioner Findell thought there was a lengthy discussion in a previous meeting that they agreed they would not mention the specific statute in the language, but refer to state law and provide the Statute numbers at the end of Chapter 7 to stay current. Ms. Skogen said that was correct. But it might be ok to use the title because sometimes the Legislature deletes a whole chapter and creates a new one while giving it the same title. Commissioner Findell suggested rather than having a title you would refer to the statute number and add pertaining or referring to the specific subject matter. Commissioner Reiland wondered if all of the statute numbers had been removed for the changes that were made in the spring. Ms. Skogen said she believed that was correct and that the statutes would be referenced at the end of the Chapter. Commissioner Starck said the title of MN Statute 275 was Taxes; Levy, Extension. Commissioner Kranz said he remembered the Finance Director said the City was out of compliance with some of the statutes in the Charter and wondered if she made recommendations to make changes to come into compliance. The Commissioners discussed a chart that had been provided and copies were made for further discussion. The Commissioners began reviewing Section 7.04 and found that it was unclear as to what language was added or deleted. After reviewing other sections, the Commissioners agreed it was too difficult to understand. Commissioner Reiland MOVED and Commissioner Findell seconded the motion directing staff to meet with the Finance Director and re-edit the language by showing underlines for new language and strikethroughs for deleted language. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON OSTWALD DECLARED THE MOTION CARRIED. CHARTER COMMISSION MEETING OF SEPTEMBER 5, 2017 PAGE 4 NEW BUSINES There was no new business. FUTURE MEETING TOPICS/COMMUNICATIONS Continued discussion of Chapter 7 ADJOURNMENT: Commissioner Kranz MOVED and Commissioner Reiland seconded a motion to adjourn the meeting. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON OSTWALD DECLARED THE MOTION CARRIED AND THE MEETING WAS ADJOURNED AT 7:41 P.M. Respectfully submitted, Debra A. Skogen, MMC City Clerk/Staff Liaison Commissioner Manuel Granroos, Secretary City of Fridley, 6431 University Avenue NE, Fridley, MN 55432 ••• Debra A. Skogen, City Clerk 763-572-3523 Fax 763-502-4981 deb.skogen@fridleymn.gov September 6, 2017 Honorable Douglas B. Maslow Tenth Judicial District Anoka County Government Center 325 E Main Street Anoka County, MN 55303 Dear Honorable Judge Meslow, On February 15, 2017, you issued an order appointing Richard Johnston to the Fridley Charter Commission for a vacated term expiring on September 19, 2017. On September 5, 2017, the Fridley Charter Commission recommended his reappointment to a full four year term along with the reappointment of Commissioner Richard Walch whose term expires September 9, 2017. Please issue an order reappointing these two commissioners to new four year terms as recommended by the Charter Commission on September 5, 2017. Name AddressTerm Richard Johnston 456 Rice Creek Blvd NE Reappointment to new 4 Fridley, MN 55432 year term ending in 2021 th Richard Walch 6859 7 Street NE Reappointment to new 4 Fridley, MN 55432 year term ending in 2021 Thank you for your consideration of this recommendation of the Fridley Charter Commission. If you have any questions, you may contact me by phone at 763-572-3523 or by e-mail at deb.skogen@fridleymn.gov. Sincerely, CITY OF FRIDLEY Debra A. Skogen, MMC/MMMC City Clerk and Fridley Charter Commission Staff Liaison st Chapter 7 Phase 2 Recommendation of Finance Director 1 Draft Section 7.02. POWER OF TAXATION. 1.The City shall have, in addition to the powers by this Charter expressly or impliedly granted, all the powers to raise money by taxation pursuant to the laws of the State which are applicable to cities of the class of which it may be a member. The amount of taxes levied against real and personal property within the City for general City purposes shall not exceed, five percent (5%) more than the prior year tax levy. Moreover, if necessary, the tax levy may be increased up to an additional 3% with an affirmative vote of at least four members of the Council. Nothing in this provision shall be construed to impair any general obligation the City may have in support of otherwise lawful indebtedness or similar obligation supported by the full faith and credit of the City, provided, however, that long-term, general obligation indebtedness shall not be used for the purpose of funding the routine and daily business operations of the City. (Ref Ord 1152, Ord 1345) 2. The City Council may also levy a tax against real and personal property within the City in addition to said limit as defined in paragraph 1 provided the Council shall: A. Adopt a resolution declaring the necessity for an additional tax levy and specifying the purposes for which such additional tax levy is required. B. Hold a public hearing pursuant to three (3) weeks' published notice in the official newspaper of the City setting forth the contents of the resolution described in Subdivision A. C.Adopt after such public hearing a resolution by an affirmative vote of a least four (4) members of the Council which shall be presented as a clear and concise 'plain language' ballot question at the next regular municipal election. (Ref. Ord. 592, 1102 and 11/7/00 Amendment) D.The additional tax levy shall take effect if 51% of the votes cast at said election are in favor of its adoption. 3.Any other fees created, or increased beyond the limits set forth in subsection 1, shall require voter approval as stipulated in subsection 2. A.For the purposes of this subsection, "fees" includes sales and use taxes, recycling fees, gas and electric franchise fees and any other fee that produces a tax burden or direct financial obligation for all property owners and/or residents of Fridley. (Ref Ord 1152, 1244) (The recycling fees are mandated by the state and should be treated as a utility-type charge. In addition, as a mandatory fee it does not meet the definition of a fee that applies to all property owners. Commercial properties or multi-unit residential properties pay for recycling via their garbage bill rather than the water bill as residential customers do.) B.For the purposes of this subsection, the term "fees" does not include: utility charges, st Chapter 7 Phase 2 Recommendation of Finance Director 1 Draft recycling fees, Parks and Recreation Department participation fees, charges for photo-copying, sales of municipal liquor store products, or civil and criminal fines and other charges collected in cases of restitution or violation of law or contract. The term "fees" also does not include rental housing fees, building permit fees, liquor license fees, the extension or transfer of cable television service authority to additional service providers for which fees are already being charged, fees for the operation of junk yards, annual license fees for the operation of pawn shops and other regulated business, and any other charge for services, including health and safety related Code enforcement, and other goods, services or materials routinely provided by the City to its citizens or other members of the public which, by law, must be limited to the actual cost of the service being provided. The term "fees" shall not include any special assessments made under Minnesota state law. Statutes Section 429. (Ref Ord 1152, 1244) C.All fees and other charges described above shall be designed to cover the cost of the service and anticipated future costs. For the purposes of this subsection, "fee increase" includes a new tax or fee, a monetary increase in an existing tax or fee, a tax or fee rate increase, an expansion in the legal definition of a tax or fee base, and an extension of an expiring tax or fee. (Ref Ord 1152) (The definition should be updated and simplified. It should reflect that fees and charges should be implemented to recover the cost of the service and anticipated future costs.) D.For the purposes of this subsection, "city" includes the city itself and all its departments and agencies that are organized to exercise the "Powers of the City" as defined in Chapter 1 of this Charter. "City" shall not include any body of government owing its existence to separate constitutional or statutory authority outside of the Charter, regardless of whether that other body of government has jurisdiction or performs duties and services within the boundaries of the City. (Ref Ord 1152) E.For the purpose of addressing natural disasters this subsection does not apply to any specific emergency measure authorized in, Section 7.08 or state law. (Ref Ord 1345) Section 7.03. BOARD OF REVIEW. The Council shall constitute a board of review and shall meet as such in the usual place for holding Council meetings to review, amend and equalize the assessed valuations according to state law. (Ref. Special Election 4/12/60, Ord. 592, Ord 1345) Section 7.04. PREPARATION OF ANNUAL BUDGET. (These sections should be amended to be consistent with the League of MN Cities budget guidelines and similar charter cities. #2 can be completely removed). 1.The City Manager shall prepare the estimates for the annual budget. The budget shall include all funds identified by the City Manager as requiring annual budget estimates. The budgetwhich 2 st Chapter 7 Phase 2 Recommendation of Finance Director 1 Draft shall include any estimated deficit/surplus for the current year. The budget shall contain sufficient detail to be readily understood and contain explanatory statements as deemed necessary. The estimates of revenues and expenditures for general and special revenue funds shall be by organizational unit and include comparative figures for the current fiscal year and actual figures for the two preceding fiscal years. submitted by each department to the City Manager. Each Expenditure estimates shall be divided into three (3) major subdivisions as follows: A.Salaries and Wages, B.Ordinary Expenses, C.Capital Outlay. In funds other than general and special revenue, the proposed expenditures shall be presented in an understandable manner according to the discretion of the City Manager. 2.Salary detail shall show a list of all salaried officers and positions with salary allowance and number of persons holding each. Wages shall be broken down in sufficient detail to justify the request. Ordinary expenses shall be broken down into such detail as the City Manager shall direct. Capital Outlay shall be itemized as to items and amounts. (Ref. Ord. 625) In parallel columns shall be added the amounts expended under similar headings for the two (2) preceding fiscal years, and, as far as practicable, the amounts expended and estimated for expenditure during the current year. In addition to estimates of expenditures, the City Manager shall prepare a detailed statement of revenues collected for the two (2) preceding completed fiscal years with amounts estimated to be collected for the current fiscal year, and an estimate of revenues for the ensuing fiscal year. The estimates shall be submitted to the Council at its last regular monthly meeting in August and shall be published twice in summary in the official Publication prior to November 15. (Ref. Ord. 625, Ord. 946) Section 7.05. PASSAGE OF THE BUDGET. The estimated budget shall be a principal item of business at regular meeting(s) prior to the deadline established in state law, at the times required by law and at subsequent meeting(s) until the budget is adopted. The meetings shall be so conducted as to give interested citizens a reasonable amount of time in which to be heard, and an opportunity to ask questions prior to passage of the final budget. The budget estimates shall be read in full and the City Manager shall explain the various items thereof as fully as may be deemed necessary by the Council. The adopted annual budget shall set forth in such detail as may be determined by the City Council, the complete financial plan of the City for the ensuing fiscal year. It shall indicate the sums to be raised and from what sources, and the sums to be spent and for what purposes, according to Section 7.04. The total sum appropriated shall not exceed the total estimated revenue. The Council shall adopt the budget by resolution in accordance with state law. (Ref. Ord. 625, Ord. 946, Ord 1318, Ord 1345) 3 st Chapter 7 Phase 2 Recommendation of Finance Director 1 Draft Section 7.06. ENFORCEMENT OF THE BUDGET. It shall be the duty of the City Manager to enforce strictly the provisions of the budget in accordance with the City Council budget resolution and other financial policies of the City. The City Manager shall not approve any order upon the City Treasurer for any expenditure unless an appropriation has been made in the budget, nor for any expenditure covered by the budget unless there is sufficient unencumbered balance left after deducting the total past expenditures and the sum of all outstanding orders and encumbrances. No officer or employee of the City shall place any orders or make any purchases except for the purposes and to the amounts authorized in the budget resolution. Any obligation incurred by any person in the employ of the City officer or City employee for any purpose not authorized in the budget resolution or for any amount in excess of the amount therein authorized shall appropriated in the budget resolution or in excess of available moneys in any fund of the City may be considered a personal obligation upon the person incurring the expenditure. (Ref. Ord. 857) (Language can be updated to be more consistent with other city charters staff has reviewed. The language is more complex than necessary.) Section 7.07. ALTERATIONS IN THE BUDGET. After the budget shall have has been duly adopted, the Council shall not have power to increase the amounts therein fixed in the budget resolution, whether by the insertion of new items or otherwise, beyond the estimated revenues, unless the actual receipts shall exceed such estimates, and in that event, not beyond such actual receipts. The sums fixed in the budget shall be and become appropriated at the beginning of the fiscal year for the several purposes named therein, and no other. The Council may at any time, by resolution passed by a vote of at least four (4) members of the Council, reduce salaries or the sums appropriated for any purpose by of the budget resolution, or by vote of at least four (4) members of the Council authorize the transfer of sums from the unexpended balances of the budget to other purposes. (Ref. Ord. 946) (This section should be updated to be more consistent with other city charters staff has reviewed.) Section 7.08. EMERGENCY APPROPRIATION IN THE BUDGET. 1.The Council shall have power to establish an emergency appropriation as a part of the budget, but not to exceed ten percent (10%) of the total budget. Transfers from the emergency appropriation to any other appropriation shall be made only by a vote of at least four (4) members of the Council. 2. The sums transferred to the several departments or divisions shall be considered as a part of such appropriations and shall be used only for the purposes determined by the city manager and approved by the Council. (Ref Ord 1345) Section 7.09. LEVY AND COLLECTION OF TAXES. In accordance with Minnesota State Law, the Council shall levy by resolution the taxes necessary to meet the requirements of the budget for the ensuing fiscal year. The tax levy resolution must be certified to the county in accordance with state law. A statement of all the taxes levied, and such taxes shall be collected and the payment thereof be enforced with and in like manner as state and county 4 st Chapter 7 Phase 2 Recommendation of Finance Director 1 Draft taxes. No tax shall be invalid by reason of any informality in the manner of levying the same, nor because the amount levied shall exceed the amount required to be raised for the special purpose for which the same is levied, but in that case the surplus shall go into a suspense fund, and shall be used to reduce the levy for the ensuing year. (Ref. Ord. 625, Ord. 946, Ord 1345) Section 7.10. TAX SETTLEMENT WITH COUNTY. (This section is outdated. The County follows their own mandates and it is not necessary to include them in our charter. It is recommended the language be deleted.) The City Treasurer shall see to it that all moneys in the county treasury belonging to the City are promptly turned over to the City according to law. Section 7.11. DISBURSEMENTS, HOW MADE. (Currently this section does not follow the Generally Accepted Accounting Principles (GAAP) or State Auditor guidelines. It should be simplified to be more consistent with other charters and staff recommends deleting this language and to be similar to disbursements Section 7.11..) All disbursements shall be made only upon the order of the City Manager or designee, duly authorized by a resolution or motion of the Council, and every such order shall specify the purpose for which the disbursement is made, and indicate the fund out of which it is to be paid. Each such order shall be directed to the Treasurer, and the latter shall issue a check payable to the order of the person in whose favor the order was drawn. The Treasurer shall issue no check upon any City funds except upon such order. In the discretion of the Council the order and check may be a single instrument. No claim against the City shall be allowed unless accompanied by either an itemized bill, or a payroll, or time sheet, each of which shall be approved and signed by the responsible City officer who vouches for the correctness and reasonableness thereof. The Council may by ordinance make additional regulations for the safekeeping and disbursement of the City's funds. The Council may by resolution or motion provide for the regular payment without specific individual authorization by the Council of salaries and wages of regular employees, laborers, and fixed charges which have been previously duly and regularly incurred. Section 7.12 10. FUNDS TO BE KEPT. (This section needs to be updated to match the State Auditor Chart of Account Guidelines and GAAP. Staff recommends removing the fund names and descriptions to simplify this section and to allow the and delete remaining language.) There shall be maintained by the Finance Director a classification of funds which shall provide for a general fund and funds required by law, ordinance, or the resolution and meet generally accepted accounting standards and procedures. The Council may, by resolution, make interfund loans where permitted by law except from funds held by the City as a trustee or custodian or in the capacity of an agent. in the City Treasury the following funds: 5 st Chapter 7 Phase 2 Recommendation of Finance Director 1 Draft A. A general fund for the payment of such expenses of the City as the Council may deem proper. Into this fund shall be paid all money not provided herein or by statute to be paid into any other fund. B. A debt service fund, into which shall be paid all receipts from taxes or other sources for the payment of principal and interest of all obligations issued by the City except bonds issued on account of any local improvement to be financed wholly or partly by special assessments and bonds issued on account of any municipally owned utility. Out of this fund shall be paid the principal and interest of such obligations when due. Any surplus in such fund not needed immediately for debt service may be invested under the direction of the Council in such securities as are authorized by statute for the investment of such funds and such investments may be liquidated at any time. C. A bond fund, into which shall be paid and disbursed the proceeds of all bonds issued by the City except bonds issued on account of any local improvement to be financed wholly or partly by special assessments and bonds issued on account of any municipally owned utility. A separate bond account shall be kept for each issue of such bonds. D.A special assessment fund, which shall be used to finance local improvements that are to be paid for, in whole or in part, from special assessments against benefited property. There shall be paid into this fund: (1) collections of special assessments, with interest, levied against benefited property; (2) proceeds of bonds or certificates of indebtedness sold by the City in anticipation of assessment collections and the proceeds of interfund loans; (3) amounts from other City funds representing either (a) apportionments of costs against the City at large, (b) benefit assessments against City property, or (c) appropriations to maintain the integrity of the fund. There shall be paid out of this fund: (1) all expenses and costs of the improvement projects that are financed through the fund; (2) the redemption of all special assessment fund bonds and certificates of indebtedness, with interest, at or before maturity, and any interfund loans; (3) transfers to the general fund of any unencumbered surplus of the fund, in the discretion of the Council; and (4) abatements of assessments and refunds of receipts in error. The Council shall maintain the integrity of this fund by appropriations from tax funds if necessary, and in addition may by ordinance create and maintain in the fund a cash reserve sufficient for working capital purposes. In order to anticipate the collection of special assessments the Council may by a majority vote issue and sell bonds and certificates of indebtedness, pledging the full faith and credit of the City, or pledging only special assessments, in such amounts and maturities as it may determine, regardless of the provisions of Section 7.16 of this Chapter; provided that the aggregate amount of such bonds and certificates outstanding at any time shall not exceed the sum of the following; (1) all assessments levied and uncollected; (2) assessable cost of work in progress; and (3) the cash reserve for working capital as previously determined by ordinance. In order that the fund may be administered on a self-sustaining basis, all improvement projects financed through it shall upon completion be certified 6 st Chapter 7 Phase 2 Recommendation of Finance Director 1 Draft by the City Manager as to total cost, which shall thereupon be apportioned by the Council either as assessments against benefited property or as amounts due from other City funds. Amounts apportioned against other City funds shall be due not later than the dates of adoption of the corresponding assessment rolls, shall be charged interest as in the case of assessments and shall be paid into the fund, with any interest due, not later than one (1) year after the due dates. E. A public utility fund into which shall be paid all money derived from the sale of bonds issued on account of any municipally owned utility and all money derived from the sale of utility services, and from the sale of any property acquired for or used in connection with any such utility. There shall be paid out of this fund the cost of the purchase, construction, operation, maintenance and repair of such utility, including the principal of and interest upon obligations which have been or shall be issued on its account. Separate accounts within the public utility fund shall be kept for all utilities which are operated separately. F. In addition to the foregoing funds, there may be maintained in the City Treasury, whenever the Council deems it advisable, the following funds: (1) A working capital or revolving fund, for financing self-sustaining activities not accounted for through other funds. (2)A trust and agency fund, for the care and disbursement of money received and held by the City as trustee or custodian or in the capacity of an agent for individuals or other governmental units. (3) Such other funds as may be required by statute or ordinance. In lieu of establishing any of the three (3) foregoing types of funds, Subsections 1, 2, and 3, the Council may provide for the recording of operations or activities for which the use of such funds night be suitable through the maintenance of separate accounts in any appropriate fund already established. The Council shall have full power to make by duly adopted ordinance such interfund loans, except from funds held under Subsection 2 hereof, as it may deem necessary and appropriate from time to time. Section 7.13. RECEIPTS TO GO TO CITY TREASURER. e to be more consistent with other city charters staff has reviewed. The language should be similar to disbursements.) All receipts of money belonging to the City, or any branch thereof, excepting only those funds collected by the County Treasurer, shall be paid to the City Treasurer by the person authorized to receive the same. All such moneys, and also all moneys received upon tax settlements from the County Treasurer, shall be deposited as soon as possible in a bank or banks approved by the City Council, subject to state laws regulating the designation of depositories for municipal funds. 7 st Chapter 7 Phase 2 Recommendation of Finance Director 1 Draft Section 7.14 11. ACCOUNTS AND REPORTS. (This section should be updated using the state statute as the authority on financial reporting and publication.) The accounts of the city shall be maintained in accordance with generally accepted governmental accounting standards and procedures. The City Manager shall submit such reports as will be necessary in order to keep the Council fully informed of the financial conditions of the City. Once a year in accordance with Minnesota state law, the City Manager shall submit a complete financial report of the City, for the preceding fiscal year. This report shall contain audited financial statements and disclosures which published in the official newspaper in a format consistent with the Minnesota State Auditor requirements. be the Chief Accounting Officer of the City and of every branch thereof, and the Council may prescribe and enforce proper accounting methods, forms, blanks, and other devices consistent with the law, this Charter and the ordinances in accord with it. The City Manager shall submit to the Council a statement each month showing the amount of money in the custody of the City Treasurer, the status of all funds, the amount spent or chargeable against each of the annual budget allowances and the balances left in each and such other information relative to the finances of the City as the Council may require. The Council may at any time and shall annually provide for an audit of the City finances by a certified public accountant or by the department of the State authorized to make examination of the affairs of municipalities. On or before the first day of April in each year the City Manager shall prepare a complete financial statement in form approved by the Council of the City's financial operations for the preceding calendar year, and quarter, which statement may be published in such manner as the Council may direct and a summary thereof shall be published in the official newspaper on or before the third week in April, July, October and January as appropriate. (Ref. Ord. 625, Ord. 857) Section 7.15 12. BONDED DEBT AND DEBT LIMIT INDEBTEDNESS. (Title should be changed to Indebtedness. Bonding is clearly defined in Minnesota statute. Each bond has unique requirements. All bonds must meet state legal debt limits, which would allow for the -imposed 10% limit (state is more restrictive). The super majority vote can be kept, but should be adjusted for consistency with other charter documents. The first part of section #2 (super majority) can be combined with #1 and the remaining items can be deleted if you reference Minnesota State Chapter 429. The reference to state law being be at the end of the Chapter.) 1. In addition to all the powers in respect to borrowing and the issuance of bonds and other obligations for the payment of money specifically or impliedly granted by this Charter, and any amendments thereto, the City shall have all the powers in reference to these subject matters granted to cities of its same class by the laws of the State of Minnesota state law. in force from time to time. The City shall have the power to issue and sell its bonds to the State of Minnesota and to comply with all provisions of law relative to loans to municipalities from the permanent State funds. The City shall also have such powers as are necessary to obtain loans or funds from the Government of the United States and any of its instrumentalities or from the State of Minnesota or any of its instrumentalities, and to comply with all provisions of law relative to obtaining such loans or funds. 8 st Chapter 7 Phase 2 Recommendation of Finance Director 1 Draft 2. The Council by a vote of at least four (4) of its members may authorize the issuance of the bonds to provide funds for any public purpose not prohibited by law, or may in its discretion, by a majority vote of all of its members submit to the electorate propositions for the issuance of such bonds. When such a proposition is submitted to the electorate, no bonds or other term obligations of the City may be issued except pursuant to a favorable vote of a majority of those voting on the proposition of their issuance. By the proceedings for the issuance of any bonds, by the terms of the bonds and by agreements with the purchasers of bonds, they may be made special in character and limited in their payment to earnings or to part earnings and part tax funds. To the extent that they are thus payable out of earnings or other than tax funds, such bonds shall not be paid out of taxes. The total bonded debt of the City at the time of the issuance of any bonds shall not exceed ten percent (10%) of the last assessed valuation of the taxable property therein, or the limit authorized by State law for cities of the same class, whichever is the greater, but in computing the total bonded debt, certificates of indebtedness, bonds, warrants or other obligations issued before or after adoption of this Charter shall not be included or counted if (1) held in a sinking fund maintained by the City; or (2) issued for the acquisition, equipment, purchase, construction, maintenance, extension, enlargement or improvement of street railways, telegraph or telephone lines, water, lighting, heat and power plants, or either, or any other public convenience from which a revenue is or may be derived, owned and operated by the City, or the acquisition of property needed in connection therewith, or for the construction of public drainage ditches, storm and sanitary sewers, or for the acquisition of lands for streets, parks, or other public improvements or for the improvement thereof, to the extent that they are payable from the proceeds of assessments levied upon property especially benefited by such improvements; or (3) issued for the creation of maintenance of a permanent improvement revolving fund; or (4) for the purpose of anticipating the collection of general taxes for the year in which issued. (Ref. Ord. 857) Section 7.16. FORM AND REPAYMENT OF BONDS. (This section should be deleted and included emergency debt certificates. This would also be consistent with other city charters staff has reviewed.) No bonds shall be issued to run for longer than the reasonable life expectancy of the property or improvement for which the bonds are authorized, as ascertained and set forth in the resolution authorizing such bonds, and in no case shall bonds be issued to run for more than thirty (30) years. The purposes for which bonds are authorized shall be set forth in the resolution authorizing them and the proceeds from such bonds shall not be diverted to any other purpose. It shall be the duty of the City Manager to include in the budget estimates each year a sum or sums amply sufficient to pay the principal of, and the interest on, any bonds which are to fall due in the coming fiscal year, and another sum sufficient to pay the interest for the same year on the Bonds which will be still outstanding. It shall be the duty of the Council, enforceable by mandamus upon the suit of any bondholder or taxpayer, to include such sum or sums as may be necessary for this purpose in the annual budget which it passes. (Ref. Ord. 857) Section 7.17 13. DEBT AND TAX ANTICIPATION CERTIFICATES. 9 st Chapter 7 Phase 2 Recommendation of Finance Director 1 Draft (This section should be renamed and replaced with language referencing MN Chapter 412.) In a manner consistent with Minnesota state law, at any time after January 1, following the making of an annual tax levy, the council may issue certificates of indebtedness in anticipation of the collection of taxes levied for any fund and not yet collected. The total amount of the certificates issued against any fund for any year with interest thereon until maturity shall not exceed ninety percent (90%) of the total current taxes for the fund uncollected at the time of the issuance. Such certificates shall be issued on such terms and conditions as the Council may determine but they shall st become due and payable not later than the 1 day of April of the year following their issuance. The proceeds of the tax levied for the fund against which tax anticipation certificates are issued and the full faith and credit of the City shall be irrevocably pledged for the redemption of the certificates in the order of their issuance against the fund. 1.If in any year, the receipts from taxes or other sources should from some unforeseen cause become insufficient for the ordinary expenses of the City, as provided for in the budget, or if any calamity or other public emergency should subject the City to the necessity of making extraordinary expenditures, then the Council may authorize the sale by the City Treasurer of emergency debt certificates to run not to exceed eighteen (18) months and to bear interest at not more than allowable by State Statutes. A tax sufficient to redeem all such certificates at maturity shall be levied as part of the budget of the following year. The authorization of an issue of such emergency debt certificates shall take the form of an ordinance approved by at least four (4) of the members of the Council; the ordinance may, if deemed necessary, be passed as an emergency ordinance. (Ref. Ord. 592) 2. For the purpose of providing necessary moneys to meet authorized expenditures, the Council may issue certificates of indebtedness in any year prior to the receipt of taxes payable in such year, on such terms and conditions as it may determine, bearing interest at a rate not more than allowable by State Statutes; provided that such certificates outstanding at any one time shall not exceed forty percent (40%) of the tax levy payable in the current year belonging to the fund for the benefit of which the borrowing is authorized. (Ref. Ord. 592) Section 7.18. BONDS OUTSIDE THE DEBT LIMIT. (This section is largely redundant and is addressed in Section 7.12. The language can be deleted or Statutes Without limit as to amount, the Council may issue bonds for legal purposes outside of the debt limit: (a) for the creation and maintenance of a permanent improvement revolving fund, (b) for extending, enlarging, or improving water supply system, lighting and heat and power plants, or either, or other revenue-producing public utilities of whatever nature, owned and operated by the City, or of acquiring property needed in connection therewith, (c) for public improvements payable from special assessments. The Council may also purchase equipment for street department, water or sewer utility, or fire department use on conditional sale contracts, provided that the installment payments do not extend beyond the estimated useful life of the equipment so purchased. 10 st Chapter 7 Phase 2 Recommendation of Finance Director 1 Draft Section 7.14. EMERGENCY DEBT CERTIFICATES for emergency debt certificates. This language is consistent with other city charters staff has reviewed.) If in any year, the receipts from taxes or other sources should from some unforeseen cause become insufficient for the ordinary expenses of the City, as provided for in the budget, or if any calamity or other public emergency should subject the City to the necessity of making extraordinary expenditures, then the Council may by resolution, issue and sell certificates. A tax sufficient to pay principal and interest on such certificates with the margin required by law shall be levied as required by law. The authorization of an issue of such emergency deb certificates shall take the form of a resolution approved by at least four (4) of the members of the council. It may be passed as an emergency resolution and would be exempt from voter approval. 2017 MINNESOTA STATUTE REFERENCES IN THIS CHAPTER Minnesota Statute Chapter 274 Section 7.03 Minnesota Statute Chapter 275 Section 7.05 Minnesota Statute Chapter 412 Section 7.13 Minnesota Statute Chapter 429 Sections 7.02, 7.12 Minnesota Statute Chapter 471 Sections 7.05, 7.11 Minnesota Statute Chapter 475 Section 7.02 11