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Local Budget Law for Fire Chiefs and Fire District Directors

Local Budget Law for Fire Chiefs and Fire District Directors. Oregon Department of Revenue Finance & Taxation Team November 7, 2008. Department of Revenue Supervision of Property Tax System. Taxing Districts Local Budget Law Property Tax Levy Authority County Assessors

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Local Budget Law for Fire Chiefs and Fire District Directors

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  1. Local Budget Law for Fire Chiefs and Fire District Directors Oregon Department of Revenue Finance & Taxation Team November 7, 2008

  2. Department of Revenue Supervision of Property Tax System • Taxing Districts • Local Budget Law • Property Tax Levy Authority • County Assessors • County Tax Collectors • Taxpayers and Interested Parties

  3. Finance & Taxation Team • Local Budget Law Training • Budgeting Manuals • Budget and Tax Certification Forms • Telephone / e-mail Help Desk • Tax Certification Review • Budget Review • Ballot Measure Review

  4. Local Governments Prepare budget. Impose tax. Nov 15 June 30 Treasurer Assessor Distribute tax revenue. Appraise property. Calculate tax. Oct 25 Sep 25 Tax Collector Mail tax statements. Collect tax. Property Tax Cycle

  5. Purposes of Local Budget LawORS 294.305 to 294.565 • Standardize Procedures • Describe Programs & Fiscal Policies • Estimates of Revenue, Expenditures & Taxes • Opportunity for Public Input • Control of Expenditures

  6. Steps in Budget Process • Prepare proposed budget • Publish notice of budget committee meeting • Budget committee meets and approves budget and property tax levies • Publish budget summary and hearing notice • Hold budget hearing • Adopt, appropriate, levy & categorize tax • Certify property tax levy to assessor • Change budget during the fiscal year

  7. What is a Budget? • Financial plan. • Estimates of Resources & Expenditures. • For one fiscal year or one biennium. (July 1 - June 30) Budget is basis for lawful appropriations – the authority to spend public money.

  8. Step 1 - Prepare Proposed Budget • Budget prepared by fund. Fund: A self-balancing set of accounts used to record resources and requirements for specific activities and objectives. • Resources and requirements must balance. • All resources must be budgeted. • Estimates must be made in “good faith”.

  9. Common Types of Funds • General Fund • Special Revenue Fund • Reserve Fund • Debt Service Fund

  10. Budget Resources • Beginning Fund Balance / Cash on Hand • Interest earned • Grants & gifts • Transfers in • Bond proceeds • Revenues from operations • Previously imposed property taxes • Current year property taxes

  11. Budget Requirements • Personal services • Materials & services • Capital outlay • Debt service • Transfers out • Operating contingency • Reserved for future expenditure • Unappropriated ending fund balance

  12. Two Years Ago 2006-07 Last Year 2007-08 This Year 2008-09 Description of Budget Items Budget For Next Year 2009-10 Proposed Approved Adopted Standardized Budget Detail Format Past Actual Current Future

  13. Common Mistakes in Budget Detail • Historic figures are not actuals. • Prior years, proposed, approved, or adopted columns are missing. • Not all funds are shown in detail. • Resources are omitted (e.g., prior year’s taxes or interest earnings).

  14. Common Mistakes (cont.) • Contingency inappropriate for type of fund. • Debt service fund contains expenditures other than debt service. • Transfers-in not equal to transfers-out. • Resources don’t equal requirements.

  15. Step 2 - Publish Notice of Budget Committee Meeting “Publication” may be by: • Printing in a newspaper of general circulation. • Mailing by first class U.S. Postal Service to each street address. • Hand delivery to each street address. Publish 5-30 days before the first meeting. If using the newspaper, publish twice, at least 5 days apart. In Washington County, submit for publication online.

  16. Step 3 - The Budget Committee • The board plus an equal number of appointed registered voters. • Appointed members cannot be officers, agents or employees of the district. • All members have the same authority. • Voters appointed for staggered 3-year terms.

  17. Budget Committee Process • All meetings subject to Public Meetings Law. • A quorum is required to conduct business. • A majority of committee must approve any action. • Budget becomes public document when given to the budget committee. Copy available to public at office.

  18. Budget Committee Process (cont.) • At the first meeting, distribute the proposed budget to the committee (if you haven’t already) and hear the budget message. • At least one meeting must include time for comments & questions from the public. • Formally approve the budget and each tax levy.

  19. Step 4 - Publish Budget Summary & Notice of Hearing • Publish once, not less than 5 days or more than 30 days before the hearing. • Use forms LB-1, LB-2 & LB-3, or a narrative. • If < $50,000, you can post in 3 places for 20 days. • In Multnomah County, submit budget to TSCC 20 days before hearing.

  20. Common Mistakes in Publication • Date of Publication. • Arithmetic errors. • Typos • Tax amounts omitted or calculated incorrectly. • Not all funds published. • Amounts not as approved by budget committee. • Resources not equal to requirements. Some errors can be corrected without re-publishing.

  21. Step 5 - Hold Budget Hearing • Hold hearing on the date in the notice or reschedule & publish another notice. • Hearing conducted by Board of Directors. • Hearing is on budget as approved by budget committee. • Any person may appear for or against any item.

  22. Board Changes After Hearing After the hearing, the board may change budget estimates and tax amounts. • If expenditures in any fund increase by more than 10% or $5000 (whichever is greater), or • If taxes increase by any amount: Republish the budget and hold another hearing.

  23. Step 6 - Adopt Budget, Appropriate, Impose Tax & Categorize After the budget hearing and before June 30, enact resolutions to: • Adopt the budget. • Make appropriations. • Impose taxes. • Categorize taxes by Measure 5 category.

  24. Lawful Appropriation Categories(ORS 294.435) • Personal Services • Materials & Services • Capital Outlay • Debt Service • Special Payments • Transfers • Operating contingency

  25. Resolution Imposing Tax BE IT RESOLVED that the Board of Directors of the Sample RFPD hereby imposes the taxes provided for in the adopted budget: at the rate of $4.2379 per $1,000 of assessed value for operations, and in the amount of $20,000 for local option, and in the amount of $97,396 for bonds.

  26. Resolution Categorizing the Tax BE IT RESOLVED that these taxes are hereby imposed and categorized for tax year 2006-07 upon the assessed value of all taxable property within the district as follows: General Government Excluded from LimitationLimitation General Fund………..$4.2379 / $1000 Capital Projects Fund …….... $20,000 Debt Service Fund…………………………………..$97,396

  27. Common Mistakes in Resolutions • Amount adopted not equal to total in detail sheets. • Appropriation categories not lawful per ORS 294.435. • Appropriation not equal to amount in detail sheets. • Appropriation not made for all funds with expenditures. • UEFB or “Reserved for Future” is appropriated. • Taxes levied exceed taxes approved by budget committee. • Categorization of tax omitted or unclear.

  28. Step 7 - Certify Property Tax Levy By July 15, give the county assessor: • 2 copies of Tax Certification (Form LB-50). • 2 copies of Resolutions. • 2 copies of any new tax election ballot measure. The LB-50 must match the resolutions (amount = amount or rate = rate). By September 30, entire budget to County Clerk.

  29. Step 8 - Changes During the Fiscal Year Budgets may be changed after adoption: • By supplement budget if allowed by ORS 294.480. • By board resolution if specifically authorized by ORS 294.326 or another statute. • In some situations, not at all.

  30. Appropriation is a Limitation - ORS 294.435(4) Appropriation gives authority to spend public money. “No greater expenditure or encumbrance of public money shall be made for any purpose other than the amount appropriated, except as provided in: • ORS.294.326 (exceptions) • ORS 294.450 (resolution transfer) • ORS 294.480 (supplemental budget)” [andothers, e.g., ORS 294.455 (natural disaster)]

  31. Civil Liability- ORS 294.100 “Any public official who expends any public moneys in excess of the amounts or for any other purpose than authorized by law shall be civilly liable for the return of the money.”

  32. Change Budget Before Over-Expending “The governing body shall make additional appropriations and may thereafter make additional expenditures as authorized by such appropriations.” - ORS 294.480(3) “A supplemental budget must be prepared and adopted before any expenditures are made in excess of the current annual budget appropriations.” - OAR 150-294.480(3)

  33. Supplemental Budget – ORS 294.480 A Supplemental Budget is Allowed if: • Occurrence or condition could not be ascertained during the regular budget process. • Unforeseen pressing necessity requires prompt action. • Unforeseen State or Federal funds made available. • Unforeseen, funded request for services. • Involuntary conversion, destruction or sale requires immediate replacement. • Significantly more property taxes than budgeted. • Local option tax passed in September.

  34. Supplemental Budget: • Must be adopted BEFORE over- expenditures are made. • Good for the current fiscal year only. • Only one per incident or condition. • Cannot increase tax levy (except September local option). • Is NOT allowed if the condition was known during the regular budget process.

  35. Supplemental Budget Process Fund expenditures differ less than 10%: • Give notice with “sufficient detail”. • Notice not less than 5 days prior to meeting. • Adopt at regular meeting & make appropriations. Fund expenditures differ 10% or more: • Notice includes summary of supplemental budget changes. • Publish notice as for original budget, 5 to 30 days prior. • Hold public hearing. • Close hearing, then adopt & appropriate.

  36. Transfer Appropriation within a Fund by Resolution– ORS 294.450(1) From one existing appropriation to another. (e.g., “Personal Services” to “Capital Outlay”) Resolution must state: • Need for transfer • Purpose of expenditure • Amount of transfer Resolution BEFORE spending

  37. Transfer Contingency Appropriation within a Fund– ORS 294.450 (2) • Transfer to another existing appropriation. • Resolution before spending. • Resolution transfers of contingency not to exceed 15% of fund appropriations.

  38. Transfer Appropriation Between Funds- ORS 294.450 (3) • Appropriation authority may be transferred from the General Fund by resolution. • Transfers may include resources. • Transfer from any other fund requires a supplemental budget.

  39. Inter-fund Loans – ORS 294.460 May be made from any fund except: • Debt service fund or debt service reserves. • Constitutionally dedicated funds. Resolution must state: • Funds involved and the amount of the loan. • If Capital Loan, repayment term (5 years max) and interest rate. • If Operating Loan, repayment this budget period or next. Repayment in subsequent period must be budgeted.

  40. Special Purpose Grant Received in Current Budget Period- ORS 294.326(3) • Unknown during regular budget process. • Only grants for specific purposes. • Appropriate by resolution. • Resolution BEFORE spending.

  41. Unforeseen Occurrence/Funded Request for Service - ORS 294.326(4) • Declare: Unforeseen occurrence or condition that could not have been budgeted; or • Unforeseen pressing necessity; or • Request for services to be paid for by others, and • Funds are available from non-tax money. • Resolution BEFORE spending.

  42. Bonds Approved in Current Budget Period- ORS 294.326(5) No budget change is required to expend bond proceeds or make debt service payments in the current year for: • Bonds approved by voters this fiscal year. • Refunding bonds. Expenditures in future years must be budgeted.

  43. Natural Disaster – ORS 294.455 Expenditures required by involuntary conversion or destruction of property by civil disturbance or natural disaster • Appropriate by resolution or supplemental budget. • From any available source of revenue (UEFB). • If public health/safety requires prompt action, and it’s not practical to convene the governing body, the chief executive officer may authorize expenditure.

  44. Questions? Contact a Finance & Taxation Analyst: • Sandi King (503) 945-8669 sandi.l.king@state.or.us • Greg Kramer (503) 945-8262 gregory.a.kramer@state.or.us • Lee Peterson (503) 945-8338 lee.peterson@state.or.us • Gordon Tiemeyer (503) 945-8439 gordon.d.tiemeyer@state.or.us Local Budget forms and publications: http://www.oregon.gov/DOR/PTD/localform.shtml

  45. Subscribe for E-Mail Notices For e-mailed training announcements and news about changes in Local Budget Law: Go to: http://listsmart.osl.state.or.us/mailman/listinfo/ localbudget and Subscribe to “localbudget” e-mail list.

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