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HomeMy WebLinkAbout9509-04 Amend Chapter 2, Article 14 - Entitled Rainy Day Fund (#102)ORDINANCE No. 9509-04 Passed by the Common Council of the Ciry of South Bend, Indiana May 24, Attest: JOHN Attest: 20 04 Presented by me to the Mayor of the Ciry of South Bend, Indiana May 25, 20 04 JOHN City Clerk President of Common Council City Clerk Approved and signed by me May 25, 20 Mayor ORDINANCE NO. ~ 5 ~ 1 -~ AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AMENDING CHAPTER 2, ARTICLE 14 OF THE SOUTH BEND MUNICIPAL CODE BY THE INCLUSION OF NEW SECTION 2-170.7 ENTITLED RAINY DAY FUND (#102) STATEMENT OF PURPOSE AND INTENT Indiana Code § 36-1-8-5.1 as amended by P.L. 269-2003 authorizes the South Bend Common Council as the fiscal body for the City of South Bend, Indiana, to enact an ordinance establishing a rainy day fund. Such rainy day fund is the repository for the transfer of various unused and unencumbered funds raised by general or special tax levy which remain at the end of any budget year and which may be distributed to the City of South Bend in January of the following year. It is in the best interests of the citizens of South Bend that a rainy day fund be established into which any unused, unencumbered funds may be transferred, as provided by law. NOW, THEREFORE, BE IT ORDAIlVED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, as follows: Section I. Chapter 2, Article 14 of the South Bend Municipal Code is hereby amended by the inclusion of new section 2-170.7 which shall read in its entirety as follows: Sec. 2-170.7 Rainy Day Fund #102. (a) Establishment of Fund. Anew fund is established within the Civil City of South Bend to be known as the Rainy Day Fund, designated as Fund #102. ' (b) Purpose of Fund. The Rainy Day Fund is established in order to set aside monies which can be used to meet unanticipated expenses that cannot be funded from existing appropriations, to meet cash flow needs between biannual distribution of property tax receipts and other periodic revenue distributions, for bridging a gap caused by an unexpected revenue shortfall or significant delay in receiving revenue, and for any other City purpose or need consistent with or permitted by state law. (c) Sources of Revenues. The Rainy Day Fund #102 shall be used exclusively as the repository of unused and unencumbered funds which may be distributed to the City of South Bend under Indiana Code § 6-3.5-6-17.3, which addresses the distribution of excess county option income l Indiana Code § 36-1-8-5.1, as amended by P.L. 267-2003 authorizes the establishment of a rainy day fund by the fiscal body of the city. tax dollars; as well as Indiana Code § 36-1-8-5 which addresses funds raised by a general or special tax levy which permits transfer of such funds into a rainy day fund and any other source allowed by the laws of the State of Indiana or which does not prohibit transfer of money to such rainy day fund. (d) Appropriation Required. The funds deposited into the Rainy Day Fund #102 shall be subject to the same appropriation process as other funds that receive tax money; however, before making an appropriation from Rainy Day Fund # 102, the Common Council shall be required to make a finding that the proposed use of such monies is consistent with the overall intent and purposes of this fund. (e) Maximum Amount. In any fiscal year, the City may transfer an amount not to exceed ten percent (10%) of the political subdivision's annual civil city budget for the fiscal year to the Rainy Day Fund #102. (f) Interest Earned. Any interest earned on monies in the Rainy Day Fund #102 shall be retained by the Rainy Day Fund #102. (g) Statutory Limitations. The City shall have, in all other respects, the authority and limitations with regard to its Rainy Day Fund #102 as prescribed by Indiana Code § 36-1-8-5.1, which addresses the establishment of a rainy day fund by a political subdivision and its uses. (h) Amendment and Termination. The Rainy Day Fund #102 shall continue until amended or terminated by ordinance. Unless indicated otherwise by ordinance, the proceeds of this fund at termination shall be deposited into the City's General Fund. Section II. This ordinance shall be in full force and effect from and after its passage by the Common Council and approval by the Mayor. Attest: Cle k Me ber, South Bend Common~Council Presented by me to the Mayor of the City of South Bend, Indiana on the 2 s `fit day of 2 6G , at L'.~ S o'clock _~. m. ~~,~u~, City Clerk i } Approved and signed by me on the ~.1r day of A , 2 De , at o'clock ~. m. ~'3~ --- Mayor, ity of o Bend, Indiana 1st READING ~ -~ Z-~~ I 1~ as u. L~ ~~ bs~-~, e, PUBLIC HEARING S -Z~{-0`I 3 rd READING S _ ?,`~ -0~ 4 S G, Zy.~, SUI.~ ~~ fa"R. NOT APPROVED REFERRED _` PASSEp S'Z.t_G~ ~~ ~ ~,,~...~ 5~~~~ Filed In Clerk's Office y ~ ,.,..,,,,,, ~~ ~ ~. CITY CLERK, If! TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 26-04 A BILL OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, ESTABLISHING A NEW FUND TO BE KNOWN AS THE SOUTH BEND RAINY DAY FUND(#102) Respectfully report that they have examined the matter and that in their opinion, this bill is being recommended to the full Council with a favorable recommendation as a second substitute by the cover letter dated May 10, 2004. Sean Coleman Chairman 1400 COUNTY-CITY BUIIDING SOUTH BEND,INDIANA 4G6O1-1830 CITY OF SOUTH BEND STEPHEN J. LUECKE, MAYOR DEPARTMENT OF LAW PHONE 5741235-9241 Fnx 574/235-9892 TDD 574/ 235-5567 CHARLES $. LEONE ALADEAN M. DERosE CITY ATTOR'EY CHIEF ASSISTANT CITY ATTORNEY May 10, 2004 Ms. Karen White, President South Bend Common Council 4`'' Floor County-City Building South Bend, IN 46601 Re: Substitute Bill No. 26-04 Dear Ms. White: Attached is a substitute Bill No. 26-04 regarding establishment of a new South Bend Rainy Day Fund. 'L~. The substitute version of Bill No. 26-04 addresses the concerns of the Common Council as expressed at a past Personnel and Finance Committee meeting, and it combines some of the language of original Bill 26-04 with helpful additions from Council's attorney, Ms Kathleen Cekanski- Farrand. A summary of changes contained in substitute Bill 26-04 is as follows: (1) The ordinance title has been changed to reflect that the creation of this fund is part of and is an amendment to the South Bend Municipal Code. (2) Because the enabling statute, Indiana Code § 36-1-8-5.1 has two versions (highly unusual), the Statement of Purpose and Intent of the Substitute Bill confirms that the City of South Bend has selected the version of I.C. 36-1-8.5-1 that was amended by Public Law 267-2003 (also known as version "b"). This version seems to grant broader authority to a political subdivision in the use of the fund, and it is the same version cited by the County in its Rainy Day Fund ordinance. (3) The purpose language has been clarified, yet retains the same general grant of authority to use the fund for any other purposes consistent with law. (4) A subpart has been added to mirror the restriction set forth inI.C. 36-1-8-5.1(version "b") regarding a 10% budget limitation on transfers to a rainy day fund. THOMAS L. BODNAR CHERYL A. GREENE ANN-CAROL NASH JEFFREY M. JANKOWSKI JOHN R. LMNGSTON ROBERT C. ROSENFELD JOHN E. BRODEN Ms. White Page 2 May 10, 2004 (5) Per the Common Council's request, a subpart has been added to provide that interest earned on rainy day funds shall remain in rainy day account #102. (6) A subpart has been added to provide that if the Rainy Day Fund is terminated, funds remaining in the account shall be transferred to the City's General Fund. City Controller Rick Ollett will present Substitute Bill #26-04 to the Council's Personnel and Finance Committee and will make the presentation to the full Council on second reading at its meeting on May 10, 2004. Certain Council members questioned whether the City presently has reserves in any funds, and if so whether specific fund reserves should be deposited into the new rainy day fund. Reserves do presently exist in certain city funds where managers have been particularly efficient in their budgeting or where anticipated expenditures were less than projected. The rainy day fund created in Bill No. 26-04 (substitute version) is separate and distinct from these miscellaneous fund reserves because it is the repository of unused COLT and general or special levy funds at year end by act of the Indiana legislature. The Controller does not believe specific, designated funds carrying reserves should have those reserves transferred to new Fund 102 because it would eliminate any incentive for city department managers to conserve and prudently manage their budgets. Although Indiana statutes appear to use the word reserve fund as a synonym for rainy day fund, I could find no state law requiring that all reserve funds of a municipality be consolidated in one account. L Thank you for your consideration of this substitute version of Bi1126-04. Sincerely, ~~ ~~~~ Aladean M. DeRose Chief Assistant City Attorney cc: Frederick B. Ollett III Kathleen Cekanski-Farrand Filed to Clerk's Office ~.s'~.~' '~.,. ~5.. 4'V.tV..«..., ~.~v ~ i.... _,.-rn CfTr CLERK, S0. 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