GATEWAY AREA DEVELOPMENT DISTRICT CITY BUDGET WORKSHOP February 20, 2019 Guest Presenter Mr. Andy DeMoss, CPA Partner RFH, PLLC Lexington, Kentucky

Agenda EXECUTIVE & LEGISLATIVE ROLES ORGANIZATION OF CITIES ROLES IN THE BUDGET PROCESS TEAM APPROACH CITY ACCOUNTING BASICS BUDGETING CONCEPTS ESTIMATING EXPENDITURES CAPITAL AND NONRECURRING ITEMS REVENUE FORECASTING THE BUDGET ORDINANCE PUBLICATION ANNUAL FINANCIAL AUDITS CURRENT ISSUES QUESTIONS AND ANSWERS

POWERS AND ORGANIZATION HOME RULE (KRS 82.082) ORGANIZATION PLANS (KRS 83A.030) MAYOR-COUNCIL COMMISSION CITY MANAGER EXECUTIVE VS LEGISLATIVE

MAYOR-COUNCIL

MAYOR-COUNCIL PLAN The Mayor’s responsibility The executive authority of the city is vested in the mayor, whose powers and duties are as follows: Enforce the Mayor-Council plan, city ordinances and orders, and applicable state statutes supervise all city departments and the conduct of all city employees Preside at all meeting of the city council, but shall not be a member of the council nor have a vote except to break a tie make or execute all bonds, notes, contracts, and written obligations of the city

MAYOR-COUNCIL PLAN Maintain liaison with local governments with respect to all inter-local contracting and joint activities Report no less than annually to the city council regarding the activities and condition of the city Promulgate procedures for administering city government, subject to disapproval by the council Be the appointing authority for all city employees, except for the staff of the city council may administer official oath to any elected or appointed officer of the city

MAYOR-COUNCIL PLAN Additionally, since the mayor is the executive authority, he possesses the power to appoint all city officers, subject to approval by the council and he is charged with preparation and administration of the city budget The mayor possesses veto power over all ordinances passed by the council; however, if he fails to either sign or veto an ordinance within ten days, it shall become effective without his signature. The mayor may delegate his powers and duties to subordinate officers and employees, and such delegation shall be by executive order. All executive orders shall be kept in a permanent file. When the mayor is temporarily absent from the city he may appoint a person to perform his duties, except his duty to preside over the council.

MAYOR-COUNCIL PLAN City council responsibilities are as follows: City council-- Legislative power is vested in the city council, and the council may not perform any executive function except as expressly permitted by statute [KRS83A.130(11)] The council shall hold regular meetings, no less than monthly, at such times and places as fixed by ordinance. Special meetings of the council may be called by the mayor or by a majority of the members. Minutes shall be kept of the proceedings of all meetings of the council. The minutes shall be signed by the city clerk and the presiding officer. The mayor shall preside at meetings. The council may set by ordinance the manner in which a member of the council shall be selected to preside in the absence of the mayor (KRS 83A.130).

MAYOR-COUNCIL PLAN The council possesses only legislative powers. The council: establishes all appointive offices and their duties and responsibilities provides for sufficient revenues to operate the city, and appropriates all such funds in an annual budget establishes codes, rules and regulations for the public health, safety and welfare [KRS83A.130(12)] May investigate all activities of city government, and in furtherance of such investigation may require any officer to submit a sworn statement regarding the performance of his duties; if the officer under investigation is under the jurisdiction of the mayor, the mayor shall be given written notice and shall have the right to review any statement to the council and to appear on behalf of any department, office or agency [KRS 83A.130(13)]

COMMISSION PLAN

COMMISSION PLAN The commission plan government is composed of a mayor and four commissioners, who together make up the City Commission [KRS 83A.140(2)]. Instead of powers being divided among the executive and legislative branches, all executive, legislative and administrative powers are vested in the city commission Mayor-The mayor’s only formal duties are presiding at meetings of the commission, calling special meetings of the commission, administering oaths, and executing and signing all bonds, contracts, notes, and written obligations of the city. City commission-All legislative, executive, and administrative power of the city is vested in the city commission

COMMISSION PLAN In its legislative/executive configuration, the commission: shall enforce the commission plan, ordinances, orders, and applicable status shall maintain liaison with other units of local government respecting interlocal contracting and joint activities shall supervise all departments of the city and the conduct of the officers and employees shall prepare a report on the condition of the city not less than annually shall classify the various administrative and service functions of the city under departments and prescribe functions and duties shall establish all appointive offices shall promulgate codes, rules, and regulations necessary for the public health, safety, and welfare of the residents of the city

COMMISSION PLAN shall provide for sufficient revenue to operate the city and appropriate such funds in an annual budget shall promulgate procedures to insure the orderly administration of city government may declare the office of mayor to be vacant if his disability continues for 60 consecutive days and appoint a new mayor shall, at its first meeting, delegate which commission member shall have supervision over each city department or may delegate responsibility for overall supervision to a City Administrative Officer (KRS 83A.140)

COMMISSION PLAN In a model commission plan the commissioners act in their individual capacities as heads of the various city departments. KRS 83A.140 merely states that the commission shall create the city departments and delegate a commission member to have “supervision” over each department. The commissioners may delegate their responsibility for supervision of the city departments to a CAO established pursuant to KRS 83A.090

BUDGETING Why do budgets matter? Budgeting concepts Statutory requirements Estimating revenues Estimating expenditures Capital outlay/debt service Pulling it all together

What is a budget? Financial Plan * Budget Year * Expected Revenues * Expected Expenditures Policy/Priority Document * Services * Beneficiaries * Impact * Programs Process- “Building a Budget” Communications Financial Controls

City Budgetary Process

City Budgetary Process

Estimating expenditures Salaries and wages Related benefits Recurring operating costs

Revenue forecasting Accrual basis required Taxes Grants Charges for services Other revenues

Enactment of the budget Budget summary Public notices LGEA MAP Budget ordinance Mayors budget message

Questions?