A standing committee of the City Council, which met twice during the last fiscal year, meets today for its first meeting of the new fiscal year. Items to be discussed at the meeting could include the budget for the new fiscal year, which started Oct. 1.

The council adopted a two-month budget at its last regular meeting (held Oct. 13). The budget was adopted with that timeframe to give the new council that will take office on Nov. 3 time to review the budget presented on Oct. 13 before they take action on the remaining 10 months of the budget for FY 2008-09.

“I know you have questions (about the budget),” said City Treasurer Nancy Wilson at that council meeting, referring to concerns raised by some council members during a work session prior to the regular meeting about whether to adopt the budget or wait until the new council was seated. “I haven’t been given any of those questions.”

Some council members complained at that work session and in the media that there had been no meetings of the Finance Committee to discuss the budget prior to the Oct. 13 meeting set for the budget’s adoption.

“We have not had a meeting,”Wilson said. “Financial meetings are called at your pleasure. We rely on you to call the meeting.”

The adoption of the first two months of the budget was a compromise reached by council members in light of those concerns expressed at the work session and during the regular meeting.

The Finance Committee meets at 8 a.m. today regarding “City Finance Indoctrination,” as the subject is entitled in the public notice for the meeting.

There is no agenda for the meeting, as there was no agenda for the two meetings that occurred during the last fiscal year on Sept. 2 and Feb. 18, according to the city clerk’s office.

There are minutes from those two meetings during the last fiscal year, but they have not been formally approved by the Finance Committee, as is done in council meetings, meetings of the Planning and Zoning Commission, Tree Committee and Fairhope Environmental Advisory Board.

The issue of city finances has been a contentious issue in city government during the past year and recent election, and some council members have stated that the new council will institute new procedures for handling city finances and their reporting.

One of the first tasks of the new council will be the election or appointment of the positions of city treasurer and city clerk, which state law requires be done during its organizational meeting on Nov. 3.

In Fairhope, financial matters are separated between the treasurer’s office and the finance department headed by Rose Fogarty, financial reporting manager.

A recent article by the Fairhope Courier reported that separation of the job responsibilities of those two departments by Mayor Tim Kant might violate state law, according to an attorney with the Alabama League of Municipalities.

Last month, the finance department received an award from the main professional association for such matters, the Government Finance Officers Association.

On Monday, a display in the lobby of the Civic Center congratulated the department and Fogarty for receiving that Certificate of Achievement for Excellence in Financial Reporting Program.

To receive the award, Fogarty and the department had to apply with GFOA by providing additional materials to the annual audit of city finances required by state law.

The GFOA recently approved some new or revised “recommended practices” for handling financial matters.

“On Oct. 17, the GFOA’s Executive Board approved five new and 10 revised recommended practices (RPs) that were developed by the GFOA’s standing committees,” the group’s Web site states. “The GFOA’s RPs are intended to identify issues important to GFOA members and provide information about effective strategies for state and local governments to follow in the areas of accounting, auditing, and financial reporting; budgeting and fiscal policy; cash management, debt management, economic development and capital planning; and retirement and benefits administration.”

One of the revised RPs approved by the GFOA is that “the governing body of every state and local government should establish an audit committee.”

The RP sets out a number of comments regarding that audit committee recommendation at its Web site at: www.gfoa.org.

“It is the responsibility of the audit committee to provide independent review and oversight of a government’s financial reporting processes, internal controls and independent auditors,” the GFOA “audit committee” RP states. “The audit committee should present annually to the full governing body a written report of how it has discharged its duties and met its responsibilities.”

Relevant Alabama law

regarding city finance administration and reporting

Section 11-43-3

Election, etc., of treasurer, clerk, etc., in cities having more than 6,000 inhabitants.

In cities having a population of more than 6,000, there shall be elected by the council, at its first regular meeting or as soon thereafter as practicable, a city treasurer and a city clerk, who shall hold office until the next general election and until their successors are elected and qualified, and such council may elect an auditor, and any officers whose election is required by ordinance, and, except as otherwise provided, the council shall have authority to fix the terms of office, prescribe their duties and fix the salaries of the officers. The council may, by ordinance, require the city treasurer and the city clerk to be residents of the city. Such council may by a two-thirds vote of the members elected, by and with the consent of the mayor, consolidate two or more of the offices and may abolish any such offices; provided, that the term of office of no incumbent shall be diminished.

Section 11-43-120

Bond; duties generally; payment of warrants; reports and statements to council.

The treasurer shall give bond in such sum as the council may prescribe for the faithful performance of his duties and the safe custody of the funds. He shall be the custodian of the funds of the municipality, keeping an accurate record of the funds of the several departments, and shall keep books showing accurately the financial condition of the city. He shall pay out money only upon warrants drawn by the officers authorized by the applicable provisions of this title to draw warrants upon the treasurer, and when paid shall keep safely the warrants so drawn. Such warrants, approved by the mayor or such other person as the council may designate, except as otherwise provided in this section, shall be drawn by the clerk on the treasurer, the warrant showing to what department the same is to be charged.

In cities of 6,000 or more, such warrants shall be drawn by the clerk on the treasurer, the warrants showing to what department the same is to be charged, but the council may authorize the clerk to draw such warrants on the treasurer without the approval of the mayor; except, that in all instances the approval of the mayor shall have first been inscribed upon the voucher for the payment of which such warrant is drawn. No warrant shall be drawn except by authority of law or ordinance. No expenditure shall be allowed unless the same shall have been authorized by ordinance or by the mayor and is carefully itemized and shall have been examined, audited and approved. The treasurer shall keep a record of all warrants presented for payment which are unpaid for want of funds and shall pay them when funds are available in the order of their presentation.

He shall make report once a month or oftener if required by the council of the financial condition of the account of each department authorized to draw on the treasurer and shall make a quarterly statement, under oath, of the financial condition of the city or town to the council.

Section 11-43-84

Requiring of reports by municipal officers; statement to council of financial condition of municipality.

The mayor shall require reports to be made to him by any officer of the city or town at such times as he may direct or as may be prescribed by the council, and shall, at least once in every six months, make a statement to the council in writing of the financial condition of the town or city, showing particularly all temporary floating indebtedness and for what created and the steps he proposes to take for the protection of the credit of the city or town.

Section 11-43-80

Powers and duties generally; office; salary; employment, salary, etc., as superintendent of municipal light, water, sewage, etc., systems.

(c) In municipalities which own and operate light and power systems, municipal water systems, municipal sewage systems and municipal gas systems, one or any of them, may, by resolution of the governing body duly entered in its minutes, require the mayor to act as superintendent of such system or systems and to give so much of his time thereof as the governing body may direct. … He shall see that the system or systems are kept in proper repair and operation, shall keep an inventory showing the supplies and equipment on hand for such system or systems, shall keep a full and complete monthly financial statement of all operation costs and receipts and keep a proper inventory of the fiscal assets of such system or systems and shall handle all such data and information relative to such system or systems available for the governing body, board or municipal public corporation at such times as it shall require, but not less frequently than once every three months.

Section 11-43-57

Annual appropriation of funds for expenditures of departments and interest on indebtedness.

In all cities, the council shall appropriate the sums necessary for the expenditures of the several city departments and for the interest on its bonded and other indebtedness, not exceeding in the aggregate within 10 percent of its estimated receipts, and such city council shall not appropriate in the aggregate an amount in excess of its annual legally authorized revenue. But nothing in this section shall prevent such cities from anticipating their revenues for the year for which such appropriation was made, or from contracting for temporary loans as provided in the applicable provisions of this title, or from bonding or refunding their outstanding indebtedness or from appropriating anticipated revenue at any time for the current expenses of the city and interest on the bonded and other indebtedness of the city.