Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 473 (2016GS)

Sponsor

Rep. Knotwell, J.

Final action

House/ filed 3/10/2016

Outcome

Failed / filed without passage

Summary

What it does

• This bill:
• removes the requirement for the Office of the State Auditor to provide certain budget forms;
• requires a town, city, county, interlocal entity, or local district to appropriate a percentage of fund revenue toward deficit fund balances;
• requires a town to prepare monthly and quarterly financial reports;
• clarifies the due date for the budget adoption for a city undergoing truth in taxation;
• removes obsolete language related to city auditor bookkeeping duties;
• repeals the requirement for an independent audit of a county's transient room tax and tourism, recreation, cultural, convention, and airport facilities tax; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

LOCAL GOVERNMENT REVISIONS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: John Knotwell
Senate Sponsor: 
 Deidre M. Henderson
LONG TITLE
General Description:
This bill amends audit provisions for local governments. 
Highlighted Provisions:
This bill:
▸ removes the requirement for the Office of the State Auditor to provide certain
budget forms; 
▸ requires a town, city, county, interlocal entity, or local district to appropriate a
percentage of fund revenue toward deficit fund balances;
▸ requires a town to prepare monthly and quarterly financial reports;
▸ clarifies the due date for the budget adoption for a city undergoing truth in taxation;
▸ removes obsolete language related to city auditor bookkeeping duties;
▸ repeals the requirement for an independent audit of a county's transient room tax
and tourism, recreation, cultural, convention, and airport facilities tax; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
10-5-107
, as last amended by Laws of Utah 2014, Chapter 377
10-5-114
, as last amended by Laws of Utah 2010, Chapter 378
10-5-129
, as last amended by Laws of Utah 2009, Chapter 323
10-6-111
, as last amended by Laws of Utah 2015, Chapter 352
10-6-117
, as last amended by Laws of Utah 2014, Chapter 176
10-6-135
, as last amended by Laws of Utah 2014, Chapter 377
10-6-139
, as last amended by Laws of Utah 2003, Chapter 292
11-13-513
, as enacted by Laws of Utah 2015, Chapter 265
17-31-5.5
, as last amended by Laws of Utah 2008, Chapter 286
17B-1-613
, as renumbered and amended by Laws of Utah 2007, Chapter 329
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
10-5-107
 is amended to read:
10-5-107.
Tentative budgets required for public inspection -- Contents --
Adoption of tentative budget.
(1) (a) On or before the first regularly scheduled town council meeting of May, the
mayor shall:
(i) 
in accordance with Subsection (1)(b),
 prepare for the ensuing year[
, on forms
provided by the state auditor,
] a tentative budget for each fund for which a budget is required;
(ii) make the tentative budget available for public inspection; and
(iii) submit the tentative budget to the town council.
(b) The tentative budget [
of
] 
for
 each fund shall set forth in tabular form:
(i) actual revenues and expenditures in the last completed fiscal year;
(ii) estimated total revenues and expenditures for the current fiscal year; and
(iii) the mayor's estimates of revenues and expenditures for the budget year.
(2) (a) The mayor shall:
(i) estimate the amount of revenue available to serve the needs of each fund;
(ii) estimate the portion to be derived from all sources other than general property
taxes; and
(iii) estimate the portion that shall be derived from general property taxes.
(b) From the estimates required by Subsection (2)(a), the mayor shall compute and
disclose in the budget the lowest rate of property tax levy that will raise the required amount of
revenue, calculating the levy on the latest taxable value.
(3) A governing body may spend or transfer money deposited in an enterprise fund for
a good, service, project, venture, or other purpose that is not directly related to the goods or
services provided by the enterprise for which the enterprise fund was created, if the governing
body:
(a) transfers the money from the enterprise fund to another fund; and
(b) complies with the hearing and notice requirements of Subsections (5)(a), (b), and
(c).
(4) (a) Before the public hearing required under Section 
10-5-108
, the town council:
(i) shall review, consider, and tentatively adopt the tentative budget in any regular
meeting or special meeting called for that purpose; and
(ii) may amend or revise the tentative budget.
(b) At the meeting at which the town council adopts the tentative budget, the council
shall establish the time and place of the public hearing required under Section 
10-5-108
.
(5) (a) Except as provided in Subsection (5)(d), if a town council includes in a tentative
budget, or an amendment to a budget, allocations or transfers from an enterprise fund to
another fund for a good, service, project, venture, or purpose other than reasonable allocations
of costs between the enterprise fund and the other fund, the governing body shall:
(i) hold a public hearing;
(ii) prepare a written notice of the date, time, place, and purpose of the hearing as
described in Subsection (5)(b); and
(iii) subject to Subsection (5)(c), mail the notice to each enterprise fund customer at
least seven days before the day of the hearing.
(b) The purpose portion of the written notice shall identify:
(i) the enterprise fund from which money is being allocated or transferred;
(ii) the amount being allocated or transferred; and
(iii) the fund to which the money is being allocated or transferred.
(c) The town council:
(i) may print the written notice required under Subsection (5)(a)(ii) on the enterprise
fund customer's bill; and
(ii) shall include the written notice required under Subsection (5)(a)(ii) as separate
notification mailed or transmitted with the enterprise fund customer's bill.
(d) A governing body is not required to repeat the notice and hearing requirements in
this Subsection (5) if the funds to be allocated or transferred for the current year were
previously approved by the governing body during the current year and at a public hearing that
complies with the notice and hearing requirements of this Subsection (5).
Section 2. Section 
10-5-114
 is amended to read:
10-5-114.
Appropriations limited to estimated revenue.
(1)
 The council may not make any appropriation in the final budget of any fund in
excess of the estimated expendable revenue for the budget year of such fund.
(2) If there is a deficit fund balance in a fund at the close of the last completed fiscal
year, the council shall include an item of appropriation for the deficit in the current budget of
the fund equal to:
(a) at least 5% of the total revenue of the fund in the last completed fiscal year; or
(b) if the deficit is equal to less than 5% of the total revenue of the fund in the last
completed fiscal year, the entire amount of the deficit.
Section 3. Section 
10-5-129
 is amended to read:
10-5-129.
Financial reports.
(1) [
Within
] 
The town clerk or other delegated person shall prepare and present:
(a) to the governing body, monthly summary financial reports and quarterly detailed
financial reports, prepared in accordance with the Uniform Accounting Manual; and
(b) within
days after the close of each fiscal year [
the town clerk or other delegated
person shall present
]
,
 to the council
,
 an annual financial report.
(2) The requirement [
under
] 
described in
 Subsection (1)
(b)
 [
to present an annual
financial report
] may be satisfied by an audit report or annual financial report of an independent
auditor.
Section 4. Section 
10-6-111
 is amended to read:
10-6-111.
Tentative budget to be prepared -- Contents -- Estimate of expenditures
-- Budget message -- Review by governing body.
(1) (a) On or before the first regularly scheduled meeting of the governing body in the
last May of the current period, the budget officer shall 
, in accordance with Subsection (1)(b),
prepare for the ensuing fiscal period, [
on forms provided by the state auditor,
] and file with the
governing body, a tentative budget for each fund for which a budget is required.
(b) The tentative budget of each fund shall set forth in tabular form:
(i) the actual revenues and expenditures in the last completed fiscal period;
[
(ii) the budget estimates for the current fiscal period;
]
[
(iii) the actual revenues and expenditures for a period of 6 to 21 months, as
appropriate, of the current fiscal period;
]
[
(iv)
] 
(ii)
 the estimated total revenues and expenditures for the current fiscal period;
[
(v)
] 
(iii)
 the budget officer's estimates of revenues and expenditures for the budget
period, computed as provided in Subsection (1)(c); and
[
(vi)
] 
(iv)
 if the governing body elects, the actual performance experience to the extent
established by Section 
10-6-154
 and available in work units, unit costs, man hours, or man
years for each budgeted fund on an actual basis for the last completed fiscal period, and
estimated for the current fiscal period and for the ensuing budget period.
(c) (i) In making estimates of revenues and expenditures under Subsection
(1)(b)[
(v)
]
(iii)
, the budget officer shall estimate:
(A) on the basis of demonstrated need, the expenditures for the budget period, after:
(I) hearing each department head; and
(II) reviewing the budget requests and estimates of the department heads; and
(B) (I) the amount of revenue available to serve the needs of each fund;
(II) the portion of revenue to be derived from all sources other than general property
taxes; and
(III) the portion of revenue that shall be derived from general property taxes.
(ii) The budget officer may revise any department's estimate under Subsection
(1)(c)(i)(A)(II) that the officer considers advisable for the purpose of presenting the budget to
the governing body.
(iii) From the estimate made under Subsection (1)(c)(i)(B)(III), the budget officer shall
compute and disclose in the budget the lowest rate of property tax levy that will raise the
required amount of revenue, calculating the levy upon the latest taxable value.
(2) (a) 
(i)
 Each tentative budget, when filed by the budget officer with the governing
body, shall contain the estimates of expenditures submitted by department heads, together with
specific work programs and such other supporting data as this chapter requires or the governing
body may request.
(ii)
 Each city of the first or second class shall, and a city of the third, fourth, or fifth
class may, submit a supplementary estimate of all capital projects which each department head
believes should be undertaken within the next three succeeding years.
(b) Each tentative budget submitted by the budget officer to the governing body shall
be accompanied by a budget message[
, which shall explain
] 
that:
(i) explains
 the budget[
, contain
]
;
(ii) contains
 an outline of the proposed financial policies of the city for the budget
period[
, and shall describe
]
;
(iii) describes
 the important features of the budgetary plan[
. It shall set forth
]
;
(iv) provides
 the reasons for salient changes from the previous fiscal period in
appropriation and revenue items [
and shall explain
]
; and
(v) explains
 any major changes in financial policy.
[
(3) Each tentative budget shall be reviewed, considered, and tentatively adopted by the
governing body in any regular meeting or special meeting called for the purpose and may be
amended or revised in such manner as is considered advisable prior to public hearings, except
that no
]
(3) (a) Subject to Subsection (3)(b), a governing body in any regular public hearing or
special public hearing:
(i) shall review, consider, and tentatively adopt each tentative budget; and
(ii) may, before the public hearing described in Section 
10-6-114
, amend or revise each
tentative budget.
(b) A governing body may not reduce an
 appropriation required for debt retirement and
interest or reduction of any existing deficits [
pursuant to
] 
in accordance with
 Section 
10-6-117
,
or otherwise required by law or ordinance, [
may be reduced
] below the 
required
 minimums [
so
required
].
(4) (a) If the municipality is acting [
pursuant to
] 
in accordance with
 Section 
10-2a-218
,
the tentative budget shall:
(i) be submitted to the governing body-elect as soon as practicable; and
(ii) cover each fund for which a budget is required from the date of incorporation to the
end of the fiscal year.
(b) The governing body shall substantially comply with all other provisions of this
chapter, and the budget shall be passed upon incorporation.
Section 5. Section 
10-6-117
 is amended to read:
10-6-117.
Appropriations not to exceed estimated expendable revenue --
Appropriations for existing deficits.
(1) The governing body of any city may not make any appropriation in the final budget
of any fund in excess of the estimated expendable revenue for the budget period of the fund.
[
(2) In determining the estimated expendable revenue of the city general fund for the
budget period, there shall be included therein as an appropriation from the fund balance that
portion of the fund balance at the close of the last completed fiscal period, not previously
included in the budget of the current period, that exceeds the amount permitted in Section
10-6-116
.
]
[
(3) (a) There shall be included as an item of appropriation in each fund for any budget
period any existing deficit as of the close of the last completed fiscal period, not previously
included in the budget of the current period, to the extent of at least 5% of the total revenue of
the fund in its last completed fiscal period.
]
[
(b) If the total amount of the deficit is less than 5% of the total revenue in the last
completed fiscal period, the entire amount of the deficit shall be included.
]
(2) If there is a deficit fund balance in a fund at the close of the last completed fiscal
year, the governing body of a city shall include an item of appropriation for the deficit in the
current budget of the fund equal to:
(a) at least 5% of the total revenue of the fund in the last completed fiscal year; or
(b) if the deficit is equal to less than 5% of the total revenue of the fund in the last
completed fiscal year, the entire amount of the deficit.
Section 6. Section 
10-6-135
 is amended to read:
10-6-135.
Operating and capital budgets.
(1) (a) As used in this section, "operating and capital budget" means a plan of financial
operation for an enterprise fund or other required special fund that includes estimates of
operating resources, expenses, and other outlays for a fiscal period.
(b) Except as otherwise expressly provided, any reference to "budget" or "budgets" and
the procedures and controls relating to [
them
] 
a budget or budgets
 in other sections of this
chapter do not apply or refer to the operating and capital budgets described in this section.
(2) At or before the time the governing body adopts budgets for the funds described in
Section 
10-6-109
, the governing body shall adopt:
(a) an operating and capital budget for each enterprise fund for the ensuing fiscal
period; and
(b) the type of budget for other special funds as required by the Uniform Accounting
Manual for Utah Cities.
(3) (a) The governing body shall adopt and administer an operating and capital budget
in accordance with this Subsection (3).
(b) A governing body may spend or transfer money deposited in an enterprise fund for
a good, service, project, venture, or other purpose that is not directly related to the goods or
services provided by the enterprise for which the enterprise fund was created, if the governing
body:
(i) transfers the money from the enterprise fund to another fund; and
(ii) complies with the hearing and notice requirements of Subsections (3)(f)(i), (ii), and
(iii).
(c) At or before the first regularly scheduled meeting of the governing body in the last
May of the current fiscal period, the budget officer shall:
(i) prepare for the ensuing fiscal period and file with the governing body a tentative
operating and capital budget for:
(A) each enterprise fund; and
(B) other required special funds;
(ii) include with the tentative operating and capital budget described in Subsection
(3)(d)(i) specific work programs as submitted by each department head; and
(iii) include any other supporting data required by the governing body.
(d) Each city of the first or second class shall, and each city of the third, fourth, or fifth
class may, submit a supplementary estimate of all capital projects which a department head
believes should be undertaken within the three next succeeding fiscal periods.
(e) (i) Subject to Subsection (3)(e)(ii), the budget officer shall prepare all estimates
after review and consultation with each department head described in Subsection (3)(d).
(ii) After complying with Subsection (3)(e)(i), the budget officer may revise any
departmental estimate before it is filed with the governing body.
(f) (i) Except as provided in Subsection (3)(f)(iv), if the governing body includes in a
tentative budget or an amendment to a budget allocations or transfers from an enterprise fund
to another fund or a good, service, project, venture, or purpose other than reasonable
allocations of costs between the enterprise fund and the other fund, the governing body shall:
(A) hold a public hearing;
(B) prepare a written notice of the date, time, place, and purpose of the hearing, as
described in Subsection (3)(f)(ii); and
(C) subject to Subsection (3)(f)(iii), mail the written notice to each enterprise fund
customer at least seven days before the day of the hearing.
(ii) The purpose portion of the written notice required under Subsection (3)(f)(i)(B)
shall identify:
(A) the enterprise fund from which money is being transferred;
(B) the amount being transferred; and
(C) the fund to which the money is being transferred.
(iii) The governing body:
(A) may print the written notice required under Subsection (3)(f)(i) on the enterprise
fund customer's bill; and
(B) shall include the written notice required under Subsection (3)(f)(i) as a separate
notification mailed or transmitted with the enterprise fund customer's bill.
(iv) A governing body is not required to repeat the notice and hearing requirements in
this Subsection (3)(f) if the funds to be allocated or transferred for the current year were
previously approved by the governing body during the current year and at a public hearing that
complies with the notice and hearing requirements of this Subsection (3)(f).
(4) (a) Each tentative budget, amendment to a budget, or budget shall be reviewed and
considered by the governing body at any regular meeting or special meeting called for that
purpose.
(b) The governing body may make changes in the tentative budgets.
(5) Budgets for enterprise or other required special funds shall comply with the public
hearing requirements established in Sections 
10-6-113
 and 
10-6-114
.
(6) (a) Before the last June 30 of each fiscal period, or, in the case of a property tax
increase under Sections 
59-2-919
 through 
59-2-923
, before August [
] 
 of the year for
which a property tax increase is proposed, the governing body shall adopt an operating and
capital budget for each applicable fund for the ensuing fiscal period.
(b) A copy of the budget as finally adopted for each fund shall be:
(i) certified by the budget officer;
(ii) filed by the budget officer in the office of the city auditor or city recorder;
(iii) available to the public during regular business hours; and
(iv) filed with the state auditor within 30 days after the day on which the budget is
adopted.
(7) (a) Upon final adoption, the operating and capital budget is in effect for the budget
period, subject to later amendment.
(b) During the budget period the governing body may, in any regular meeting or special
meeting called for that purpose, review any one or more of the operating and capital budgets
for the purpose of determining if the total of any of them should be increased.
(c) If the governing body decides that the budget total of one or more of the funds
should be increased under Subsection (7)(b), the governing body shall follow the procedures
set forth in Section 
10-6-136
.
(8) Expenditures from operating and capital budgets shall conform to the requirements
relating to budgets specified in Sections 
10-6-121
 through 
10-6-126
.
Section 7. Section 
10-6-139
 is amended to read:
10-6-139.
City auditor or recorder -- Bookkeeping duties -- Duties with respect to
payment of claims.
(1) The city auditor in each city of the first and second class, and the city recorder in
each city of the third, fourth, or fifth class shall maintain the general books for each fund of the
city and all subsidiary records relating thereto, including a list of the outstanding bonds, their
purpose, amount, terms, date, and place payable.
(2) (a) The city auditor or city recorder[
, as appropriate,
] shall
:
(i)
 keep accounts with all receiving and disbursing officers of the city[
, shall
]
;
(ii)
 preaudit all claims and demands against the city before [
they
] 
the claims or
demands
 are allowed[
, and shall
]
; and
(iii)
 prepare the necessary checks in payment.
[
(b) Those checks shall include an appropriate certification pursuant to Section 
11-1-1
,
examples of which shall be presented in the Uniform Accounting Manual for Utah Cities.
]
[
(c)
] 
(b)
 The city auditor or city recorder shall [
also certify on the voucher or check
copy, as appropriate,
] 
verify
 that:
(i) [
the
] 
a
 claim has been preaudited and documented;
(ii) [
the
] 
a
 claim has been approved in one of the following ways:
(A) purchase order directly approved by the mayor in the council-mayor optional form
of government, or the governing body or [
its
] 
the governing body's
 delegate in other cities;
(B) claim directly approved by the governing body; or
(C) claim approved by the financial officer;
(iii) [
the
] 
a
 claim is within the lawful debt limit of the city; and
(iv) [
the
] 
a
 claim does not overexpend the appropriate departmental budget established
by the governing body.
Section 8. Section 
11-13-513
 is amended to read:
11-13-513.
Appropriations not to exceed estimated expendable revenue --
Appropriations for existing deficits.
(1) The governing board of an interlocal entity may not make an appropriation in the
final budget of a fund in excess of the estimated expendable revenue for the budget year of the
fund.
[
(2) An interlocal entity determining the estimated expendable revenue of the interlocal
entity general fund for the budget year shall include as an appropriation from the fund balance
that portion of the fund balance at the close of the last completed fiscal year, not previously
included in the budget of the current year, that exceeds the amount permitted in Section
11-13-512
.
]
[
(3) (a) An interlocal entity shall include in a fund budget an appropriation for an
existing deficit created in accordance with Section 
11-13-521
 as of the close of the current year
and not previously included in the current year budget, to the extent of at least 5% of the total
revenue in the current year.
]
[
(b) If the total amount of the deficit created in accordance with Section 
11-13-521
 is
less than 5% of the total revenue in the current year, the interlocal entity shall include in the
fund budget an appropriation for the entire amount of the deficit.
]
[
(c) An interlocal entity shall include in a fund budget appropriation for the entire
amount of a deficit in the current year resulting from expenditures other than the expenditures
allowed in Section 
11-13-521
 to the extent that the deficit had not been included in the current
year budget.
]
(2) If there is a deficit fund balance in a fund at the close of the last completed fiscal
year, the governing body of an interlocal entity shall include an item of appropriation for the
deficit in the current budget of the fund equal to:
(a) at least 5% of the total revenue of the fund in the last completed fiscal year; or
(b) if the deficit is equal to less than 5% of the total revenue of the fund in the last
completed fiscal year, the entire amount of the deficit.
Section 9. Section 
17-31-5.5
 is amended to read:
17-31-5.5.
Report to county legislative body -- Content.
(1) The legislative body of each county [
imposing the
] 
that imposes a
 transient room
tax [
provided for in
] 
under
 Section 
59-12-301
 [
shall annually engage an independent auditor to
perform an audit to verify that transient room tax funds are used only as authorized by this
chapter and to report the findings of the audit to the county legislative body
] 
or a tourism,
recreation, cultural, convention, and airport facilities tax under Section 
59-12-603
 shall
annually prepare a report in accordance with Subsection (2)
.
[
(2) Subsection (1) applies to the tourism, recreation, cultural, convention, and airport
facilities tax provided for in Section 
59-12-603
, except that the audit verification required
under this Subsection (2) shall be for the uses authorized under Section 
59-12-603
.
]
[
(3)
] 
(2)
 The report [
required under
] 
described in
 Subsection (1) shall include a
breakdown of expenditures into the following categories:
(a) for the transient room tax, identification of expenditures for:
(i) establishing and promoting:
(A) recreation;
(B) tourism;
(C) film production; and
(D) conventions;
(ii) acquiring, leasing, constructing, furnishing, or operating:
(A) convention meeting rooms;
(B) exhibit halls;
(C) visitor information centers;
(D) museums; and
(E) related facilities;
(iii) acquiring or leasing land required for or related to the purposes listed in
Subsection [
(3)
] 
(2)
(a)(ii);
(iv) mitigation costs as identified in Subsection 
17-31-2
(1)(d); and
(v) making the annual payment of principal, interest, premiums, and necessary reserves
for any or the aggregate of bonds issued to pay for costs referred to in Subsections
17-31-2
(2)(c) and (3)(a); and
(b) for the tourism, recreation, cultural, convention, and airport facilities tax,
identification of expenditures for:
(i) financing tourism promotion, which means an activity to develop, encourage,
solicit, or market tourism that attracts transient guests to the county, including planning,
product development, and advertising;
(ii) the development, operation, and maintenance of the following facilities as defined
in Section 
59-12-602
:
(A) an airport facility;
(B) a convention facility;
(C) a cultural facility;
(D) a recreation facility; and
(E) a tourist facility; and
(iii) a pledge as security for evidences of indebtedness under Subsection 
59-12-603
(3).
[
(4)
] 
(3)
 A county legislative body shall provide a copy of [
a
] 
the
 report [
it receives
under this section
] 
described in Subsection (1)
 to:
(a) the Governor's Office of Economic Development;
(b) its tourism tax advisory board; and
(c) the Office of the Legislative Fiscal Analyst.
Section 10. Section 
17B-1-613
 is amended to read:
17B-1-613.
Appropriations not to exceed estimated expendable revenue --
Appropriations for existing deficits.
(1) The board of trustees of a local district may not make any appropriation in the final
budget of any fund in excess of the estimated expendable revenue for the budget year of the
fund.
[
(2) In determining the estimated expendable revenue of the general fund for the
budget year there is included as an appropriation from the fund balance that portion of the fund
balance at the close of the last completed fiscal year, not previously included in the budget of
the current year, that exceeds the amount permitted in Section 
17B-1-612
.
]
[
(3) (a) There is included as an item of appropriation in each fund for any budget year
any existing deficit created in accordance with Section 
17B-1-623
 as of the close of the last
completed fiscal year, not previously included in the budget of the current year, to the extent of
at least 5% of the total revenue of the fund in its last completed fiscal year.
]
[
(b) If the total amount of the deficit is less than 5% of the total revenue in the last
completed fiscal year, the entire amount of the deficit shall be included.
]
[
(c) The entire amount of any deficit which results from activities other than those
described in Section 
17B-1-623
 shall be included as an item of appropriation in each fund for
any budget year not previously included in the budget of the current year.
]
(2) If there is a deficit fund balance in a fund at the close of the last completed fiscal
year, the board of trustees of a local district shall include an item of appropriation for the
deficit in the current budget of the fund equal to:
(a) at least 5% of the total revenue of the fund in the last completed fiscal year; or
(b) if the deficit is equal to less than 5% of the total revenue of the fund in the last
completed fiscal year, the entire amount of the deficit.
Legislative Review Note
Office of Legislative Research and General Counsel