ITEM: 12.3 ADMINISTRATION - Joe Huss, Finance Director
Title
AMENDING THE BLAINE CITY CODE CHAPTER 2, ARTICLE IV, DIVISION 2 - CAPITAL IMPROVEMENT FUNDS, SECTION 2-151 THROUGH 2-153
SECOND READING
Background
At previous Workshops in April and May, Council reviewed proposed amendments to Chapter 2 of the Blaine City Code that deals with the City's Capital Improvement Fund (CIF.) At the last Workshop Discussion, held May 16, 2013, Council gave conceptual approval to the following:
· Restates the purpose of the fund from that of funding capital projects to that of creating an endowment to fund projects from investment earnings.
· Continues the practice of allowing 90% of investment earnings to be made available to fund projects and programs as directed by Council.
· Expenditures from available interest earnings require adoption of a resolution receiving at least five (5) affirmative votes of the Council.
· Continues the practice of allocating 10% of investment earnings to the fund to increase the fund's endowment and generate additional investment earnings.
· Allows for the expenditure of fund principal. Expenditures from the fund may be structured as:
o An inter-fund loan to be repaid; or
o An inter-fund grant, the repayment of which is not required.
· Expenditures of fund principal requires:
o The affirmative vote of at least six (6) Councilmembers;
o A public hearing, with notification published in the official City newspaper at least 14 but not more than 28 days before the date of the hearing;
o Adoption of a resolution with the finding that the project provides sufficient community-wide benefit and is consistent with City goals, programs, and policies;
o Expenditures of fund principal shall be placed on a ballot to be voted upon in a general election if a petition signed by a number of voters equal to or greater than 10% of voters in the last general election so requests.
Schedule of Actions
City Council Workshop Discussion |
April 11, 2013 |
City Council Workshop Discussion |
May 2, 2013 |
City Council Workshop Discussion |
May 16, 2013 |
First Reading |
June 6, 2013 |
Second Reading |
July 11, 2013 |
Body
Division 2. Capital Improvements Fund
Sec. 2-151. - Created.
There is hereby created a separate fund to be designated as the "Capital Improvement Fund" (CIF). The sole purpose of the fund shall be to pay the capital costs of projects of general benefit to the city. The purpose of the fund is to create an endowment from which future interest earnings fund projects or programs pursuant to City Council priorities. The fund shall be maintained in the official city records and administered by the city manager in accordance with the following provisions of this division:
The principal of the fund shall consist of all funds currently accounted for in the CIF. In addition, the fund principal shall be increased annually by an amount equal to ten percent of the investment earnings generated by the fund in the previous year. The remaining investment earnings shall be made available for funding Council-approved projects or programs pursuant to section 2-152 of this ordinance.
In addition to funds currently on hand in the CIF, the City Council may at any time and at its discretion, direct that funds be deposited into the CIF. Once deposited into the CIF, the funds shall be considered endowed funds for the purpose of generating investment earnings.
All surplus monies in each separate improvement fund which remain after the costs of each improvement have been fully funded, and which are not transferred to another separate improvement fund to cover any deficiency, shall be transferred to the capital improvement fund. In addition, the following shall be deposited in the fund:
(1)
All collections of special assessments and taxes levied for the payment of the costs of an improvement which are received after the improvement costs have been fully funded;
(2)
Investment earnings generated by the monies in the capital improvement fund;
(3)
Any other monies appropriated by the council or donated for the purposes of the fund.
The principal of the fund shall consist of all transfers from separate, fully funded, improvement funds and subsequent collections of special assessments and taxes, and other monies appropriated or donated to the fund. In addition, the principal shall be increased annually by an amount equal to ten percent of the investment earnings generated by the fund in the previous year. The remaining investment earnings shall not accrue to the principal and shall forever be treated as investment earnings available for capital expenditures in accordance with this division.
Sec. 2-152. - Expenditure limitations.
It is intended that the fund act as an endowment and that expenditures from the fund primarily be made from accumulated investment earnings. Expenditures from accumulated investment earning shall be made upon the adoption of a resolution approved by an affirmative vote of at least five (5) councilmembers.
Expenditures may be made from fund principal by an affirmative vote of at least six (6) members of the City Council and may not exceed 50% of the fund's balance. At no time shall those funds considered to be principal funds of the CIF be allowed to fall below a balance of $5 million. an amount greater than the equivalent of the fund's investment earnings for the prior two consecutive calendar years. Principal expenditures must may either be structured as a an inter-fund loan to repay the principal be repaid, or as an inter-fund grant, the repayment of which is not required. no No further expenditures of any kind may be made from the fund until any required inter-fund loan payments or investment earnings have reestablished the principal fund's balance at an amount equal to that existing before the expenditures plus ten percent of the investment earnings that would have been earned per year if the principal had not been reduced. Notwithstanding any other provision of this Code, the city council, upon approval of 60 percent of the voters in a regular municipal election, may utilize up to 50 percent of the principal of this fund for the purpose of funding a city center complex without repayment of the principal.
(Code 1980, § 8-3; Ord. No. 95-1576, 10-5-1995; Ord. No. 98-1745, 10-1-1998; Ord. No. 00-1858, 11-7-2000)
Sec. 2-153. - Funding Expenditure procedure.
Expenditures may be made from fund principal only after careful deliberation of the city council and Expenditures from the capital improvement fund may be made only after compliance with the following procedures:
(1) The city council must conduct a public hearing to obtain public comment on the matter
The city council must hold a public hearing on whether the proposed project should be funded. Notice of the date, time and place of the hearing, a description of the project to be funded, and the amount of funding proposed must be published at least ten days before the hearing in the official newspaper.
(3) The city may expend from the CIF only after obtaining the approval of a majority of the voters voting on the question if a petition requesting a vote on the issuance is signed by a number of voters equal to or greater than ten percent of the votes cast in the city in the last general election and is filed with the city clerk within 30 days after the public hearing.
The city council must identify that the project has sufficient community-wide benefit which is consistent with other city goals, programs, or policies and incorporate this make the following findings which shall be incorporated into an authorizing resolution adopted by a majority of the council: by an affirmative vote of at least six (6) councilmembers.
a.
The project has sufficient community-wide benefit which is consistent with other city goals, programs or policies.
b.
The project likely would not otherwise occur, but for financing from the capital improvement fund.
c.
Capital improvement fund financing is not proposed as an alternative to funding from another previously programmed or available source.
(3)
(4)
The project has been included for at least two consecutive calendar years in the city's formally adopted capital improvement plan.
(5)
If fund principal is proposed to be used, the project has the ability to reasonably repay the money and the use of principal does not exceed the equivalent of the last two consecutive calendar years' investment earnings from the capital improvement fund.
(6)
A documented estimate of the ongoing annual operating and maintenance costs has been made and the sources for paying such costs has been identified.
(Code 1980, § 8-4; Ord. No. 95-1576, 10-5-1995; Ord. No. 00-1858, 11-7-2000)
Sec. 2-154. - Amendments.
(Code 1980, § 8-5; Ord. No. 95-1576, 10-5-1995)
Secs. 2-155-2-180. - Reserved.
INTRODUCED and read in full this 6th day of June 2013.
PASSED by the City Council of the City of Blaine this 11th day of July 2013.