The purpose of this chapter is to establish policies and provide for rules and regulations governing the management of the financial affairs of the City.

   The Finance Director is the finance and accounting officer of the City and is responsible for the administration of the provisions of this chapter.

   To assure the proper accounting and safe custody of moneys the following shall apply:

   1.   Deposit of Funds. All moneys or fees collected for any purpose by any City officer shall be deposited through the office of the Finance Director. If any said fees are due to an officer, they shall be paid to the officer by check drawn by the Finance Director and approved by the Council only upon such officer’s making adequate reports relating thereto as required by law, ordinance, or Council directive.

   2.   Deposits and Investments. All moneys belonging to the City shall be promptly deposited in depositories selected by the Council in amounts not exceeding the authorized depository limitation established by the Council or invested in accordance with the City’s written investment policy and State law, including joint investments as authorized by Section 384.21 of the Code of Iowa.

   3.   Petty Cash Fund.

      A.   Finance Director. The Finance Director shall be custodian of a petty cash fund not to exceed $100.00 for the payment of small claims for minor purchases, collect-on-delivery transportation charges and small fees customarily paid at the time of rendering a service, for which payments the Finance Director shall obtain some form of receipt or bill acknowledged as paid by the vendor or agent. At such time as the petty cash fund is approaching depletion, the Finance Director shall draw a check for replenishment in the amount of the accumulated expenditures and said check and supporting detail shall be submitted to the Council as a claim in the usual manner for claims and charged to the proper funds and accounts. It shall not be used for salary payments or other personal services or personal expenses.

      B.   Library. The Librarian is the custodian of the Library’s petty cash fund, which is not to exceed $50.00 for the payment of small claims for minor purchases, collect-on-delivery transportation charges and small fees customarily paid at the time of rendering a service for which payments the Librarian shall obtain some form of receipt or bill acknowledged as paid by the vendor or agent. At such time as the petty cash fund is approaching depletion, the Librarian shall draw a check for replenishment in the amount of the accumulated expenditures and said check and supporting detail shall be submitted to the Council as a claim in the usual manner for claims and charged to the proper funds and accounts. It shall not be used for salary payments or other personal services or personal expenses.

   4.   Change Fund. The Finance Director is the custodian of a change fund not to exceed $200.00 for the purpose of making change without commingling other funds to meet such requirements.

   There shall be established and maintained separate and distinct funds in accordance with the following:

   1.   Revenues. All moneys received by the City shall be credited to the proper fund as required by law, ordinance, or resolution.

   2.   Expenditures. No disbursement shall be made from a fund unless such disbursement is authorized by law, ordinance, or resolution, was properly budgeted, and supported by a claim approved by the Council.

   3.   Emergency Fund. No transfer may be made from any fund to the Emergency Fund.

   4.   Debt Service Fund. Except where specifically prohibited by State law, moneys may be transferred from any other City fund to the Debt Service Fund to meet payments of principal and interest. Such transfers must be authorized by the original budget or a budget amendment.

   5.   Capital Improvements Reserve Fund. Except where specifically prohibited by State law, moneys may be transferred from any City fund to the Capital Improvements Reserve Fund. Such transfers must be authorized by the original budget or a budget amendment.

   6.   Utility and Enterprise Funds. A surplus in a Utility or Enterprise Fund may be transferred to any other City fund, except the Emergency Fund, by resolution of the Council. A surplus may exist only after all required transfers have been made to any restricted accounts in accordance with the terms and provisions of any revenue bonds or loan agreements relating to the Utility or Enterprise Fund. A surplus is defined as the cash balance in the operating account or the unrestricted net position calculated in accordance with generally accepted accounting principles, after adding back the net pension and other postemployment benefits, liabilities, and the related deferred inflows of resources and deducting the related deferred outflows of resources, in excess of:

      A.   The amount of the expenses of disbursements for operating and maintaining the utility or enterprise for the preceding three months; and

      B.   The amount necessary to make all required transfers to restricted accounts for the succeeding three months.

   7.   Balancing of Funds. Fund accounts shall be reconciled at the close of each month and a report thereof submitted to the Council.

   The annual operating budget of the City shall be prepared in accordance with the following:

   1.   Proposal Prepared. The Finance Director is responsible for preparation of the annual budget detail, for review by the Mayor and Council and adoption by the Council in accordance with directives of the Mayor and Council.

   2.   Boards and Commissions. All boards, commissions, and other administrative agencies of the City that are authorized to prepare and administer budgets must submit their budget proposals to the Finance Director for inclusion in the proposed City budget at such time and in such form as required by the Council.

   3.   Submission to Council. The Finance Director shall submit the completed budget proposal to the Council each year at such time as directed by the Council.

   4.   Annual Statement.

      A.   On or before 4:00 p.m. on March 5 of each year, the City shall file, with the Department of Management, a report containing all necessary information for the Department of Management to compile and calculate amounts required to be included in the statement mailed under Paragraph B.

      B.   Not later than March 15, the County Auditor, using information compiled and calculated by the Department of Management shall send to each property owner or taxpayer within the County, by regular mail, an individual statement containing all of the required information as provided under Section 24.2(2)(B)(1-10) of the Code of Iowa.

      C.   The Department of Management shall prescribe the form for the report required under Paragraph A, the statements to be mailed under Paragraph B, and the public hearing notice required under Paragraph D.

      D.   The Council shall set a time and place for a public hearing on the City’s proposed property tax amount for the budget year and the City’s information included in the statements under Paragraph B.

   The proposed property tax hearing shall be set on a date on or after March 20 of the budget year immediately preceding the budget year for which the tax is being proposed. At the hearing, the Council shall receive oral or written testimony from any resident or property owner of the City. This public hearing shall be separate from any other meeting of the Council, including any other meeting or public hearing relating to the City’s budget, and other business of the City that is not related to the proposed property tax amounts and the information in the statements shall not be conducted at the public hearing. After all testimony has been received and considered, the governing body may decrease, but not increase, the proposed property tax amount to be included in the City’s budget.

         (1)   Notice of the public hearing shall be published not less than 10 nor more than 20 days prior to the hearing, in a newspaper published at least once weekly and having general circulation in the City. However, if the City has a population of 200 or less, publication may be made by posting in three public places in the City.

         (2)   Notice of the hearing shall also be posted and clearly identified on the City’s internet site for public viewing beginning on the date of the newspaper publication and shall be maintained on the City’s internet site with all such prior year notices.

         (3)   Additionally, if the City maintains a social media account on one or more social media applications, the public hearing notice or an electronic link to the public hearing notice shall be posted on each such account on a date no later than the date of publication of the notice.

         (4)   Failure of a newspaper to publish a required notice under this paragraph shall not be considered a failure of a political subdivision to provide required notice under this paragraph if all of the following conditions are met:

            a.   Notice of the public hearing was provided to each property owner and each taxpayer within the political subdivision in statements required under Section 24.2A(2)(b) of the Code of Iowa.

            b.   The political subdivision can demonstrate to the county auditor that the political subdivision provided sufficient time for the newspaper to publish the notice.

   5.   Council Review. The Council shall review the proposed budget and may make any adjustments it deems appropriate in the budget before accepting such proposal for publication, hearing, and final adoption.

   6.   Notice of Hearing. Following, and not until the requirements of Subsection 4 of this section are completed, the Council shall set a time and place for public hearing on the budget to be held before April 30 and shall publish notice of the hearing not less than 10 nor more than 20 days before the hearing. A summary of the proposed budget and a description of the procedure for protesting the City budget under Section 384.19 of the Code of Iowa, in the form prescribed by the Director of the Department of Management, shall be included in the notice. Proof of publication of the notice under this subsection must be filed with the County Auditor.

   7.   Copies of Budget on File. Not less than 20 days before the date that the budget must be certified to the County Auditor and not less than 10 days before the public hearing, the Clerk shall make available a sufficient number of copies of the detailed budget to meet the requests of taxpayers and organizations, and have them available for distribution at the offices of the Mayor and Clerk and at the City library.

   8.   Adoption and Certification. After the hearing, the Council shall adopt, by resolution, a budget for at least the next fiscal year and the Clerk shall certify the necessary tax levy for the next fiscal year to the County Auditor and the County Board of Supervisors. The tax levy certified may be less than, but not more than, the amount estimated in the proposed budget submitted at the final hearing, unless an additional tax levy is approved at a City election. Two copies each of the detailed budget as adopted and of the tax certificate must be transmitted to the County Auditor.

   1.   Program Increase. Any increase in the amount appropriated to a program must be prepared, adopted, and subject to protest in the same manner as the original budget.

   2.   Program Transfer. Any transfer of appropriation from one program to another must be prepared, adopted, and subject to protest in the same manner as the original budget.

   3.   Activity Transfer. Any transfer of appropriation from one activity to another activity within a program must be approved by resolution of the Council.

   4.   Administrative Transfers. The Finance Director shall have the authority to adjust, by transfer or otherwise, the appropriations allocated within a specific activity without prior Council approval.

   The accounting records of the City shall consist of not less than the following:

   1.   Books of Original Entry. There shall be established and maintained books of original entry to provide a chronological record of cash received and disbursed.

   2.   General Ledger. There shall be established and maintained a general ledger controlling all cash transactions, budgetary accounts and for recording unappropriated surpluses.

   3.   Checks. Checks shall be prenumbered and signed by the Mayor and Finance Director following Council approval, except as provided by Subsection 5 hereof.

   4.   Budget Accounts. There shall be established such individual accounts to record receipts by source and expenditures by program and activity as will provide adequate information and control for budgeting purposes as planned and approved by the Council. Each individual account shall be maintained within its proper fund and so kept that receipts can be immediately and directly compared with revenue estimates, and expenditures can be related to the authorizing appropriation. No expenditure shall be posted except to the appropriation for the function and purpose for which the expense was incurred.

   5.   Immediate Payment Authorized. The Finance Director is authorized to make timely payments of certain bills of accounts for services or merchandise furnished to the City upon presentation of the bills of account and after having ascertained that said bills of account are correct and proper obligations of the City, and without obtaining prior Council approval therefor, and shall include the following classification of accounts:

      A.   Utilities, including gas, telephone, and electricity;

      B.   Payroll;

      C.   Payroll taxes, including monthly withholding deposits and payments due on quarterly report of IPERS, FICA, and sales tax;

      D.   Payroll deductions, including child support, credit union, union dues, dental insurance;

      E.   Contract payments previously approved by Council;

      F.   Legal publication expenses;

      G.   Postage;

      H.   Credit card accounts for vehicle gas;

      I.   Bills submitted on a specific project previously approved by the Council;

      J.   Membership dues previously approved by the Council;

      K.   Registration fees, educational fees;

      L.   Interest coupons, and matured bonds.

   “Previously approved” is defined as bills that do not appear on the payable list but have had separate Council action at the Council meeting. At the next regular meeting of the Council following the payment of said bills of account, the Finance Director shall submit to the Council a list of all bills paid for ratification and approval of such action.

   6.   Utilities. The Finance Director shall perform and be responsible for accounting functions of the municipally owned utilities.

   The Finance Director shall prepare and file the following financial reports:

   1.   Monthly Reports. There shall be submitted to the Council each month a report showing the activity and status of each fund, program, sub-program, and activity for the preceding month.

   2.   Annual Report. Not later than December 1 of each year there shall be published an annual report containing a summary for the preceding fiscal year of all collections and receipts, all accounts due the City, and all expenditures, the current public debt of the City, and the legal debt limit of the City for the current fiscal year. The Annual Financial Report shall be prepared on forms and pursuant to instructions prescribed by the Auditor of State. Beginning with the Annual Financial Report published by December 1, 2025, each report shall include a list of bonds, notes, or other obligations issued by the City during the most recently completed fiscal year, and the applicable lists for other fiscal years beginning on or after July 1, 2024, for which obligations remain unpaid, payable from any source, including the amount of the issuance, the project or purpose of the issuance, whether the issuance was approved at election, eligible to be subject to a petition for an election, or was exempt from approval at election as the result of statutory exclusions based on population of the City or amount of the issuance, and identification of issuances from the fiscal year or prior fiscal years related to the same project or purpose.

   This section shall establish policies and procedures for the City pursuant to Section 421.65 of the Code of Iowa, to allow the City to utilize and invoke the setoff program provisions of the State for collection of debts owed to the City and for which the City has provided the obligor with an opportunity to contest.

      A.   “Department” means the Iowa Department of Revenue.

      B.   “Obligor” means a person, not including a public agency, who has been determined to owe a qualifying debt.

      C.   “Public agency” means a board, commission, department, including the Department of Revenue, or other administrative office or unit of the State or any other State entity reported in the Iowa Annual Comprehensive Financial Report, or a political subdivision of the State, or an office or unit of a political subdivision. Public agency does include the Clerk of the District Court as it relates to the collection of a qualifying debt. Public agency does not include the general assembly or Office of the Governor.

      D.   “Public payment” means any claim a public agency owes to an obligor.

      E.   “Qualifying debt” means any of the following:

         (1)   Any debt, which is assigned to the Department of Health and Human Services, or which is owed to the Department of Health and Human Services for unpaid premiums under Section 249A.3(2)(a)(1) of the Code of Iowa, or which child support services is otherwise attempting to collect, or which foster care services of the Department of Health and Human Services is attempting to collect on behalf of a child receiving foster care provided by the Department of Health and Human Services.

         (2)   Any debt which is in the form of a liquidated sum due, owing, and payable to the Clerk of the District Court.

         (3)   Any liquidated sum certain, owning, and payable to a public agency, with respect to which the public agency has provided the obligor an opportunity to protest or challenge the sum in a manner in compliance with applicable law and due process, and which has been determined as owing through the challenge or protest, or for which the time period provided by the public agency to challenge, or protest has expired.

   2.   Memorandum of Understanding. The City shall enter into a memorandum of understanding with the Department which shall outline the program guidelines for use of the State Setoff Program.

   3.   Qualifying Debt. The Clerk shall only certify to the Department qualifying debt as approved by the Department through the completion of a qualifying debt questionnaire and for which the City has provided appropriate documentation showing the City’s legal authority for charging, implementing a fine or fee for violation of, or imposing costs related to the abatement of certain conditions when appropriate legal authority exists to the City. The qualifying debt questionnaire may be updated from time to time as required by the City to add or remove qualifying debt or as needed by the Department.

   4.   Due Process. Prior to submission of a debt to the Department the City shall provide the obligor due process as outlined in this section prior to the submission of a debt:

      A.   With respect to the qualifying debt, the City shall provide the obligor with 15 days’ advance written notice to the obligor’s last-known address. Such notice shall provide the obligor with a minimum period of 15 days in which they may file an appeal in writing to the Clerk.

      B.   Upon receipt of a written request for an appeal on a debt to be submitted to the Setoff Program the Clerk shall schedule a hearing with the Council for the next regularly scheduled meeting and notify the obligor of the hearing date and time at least five days in advance of the hearing.

      C.   At the time and date of the hearing, the Council shall hear any evidence brought forth by the obligor and shall examine the City’s file regarding the matter. The Council shall make a ruling upon a majority vote of the members in attendance.

      D.   If the qualifying debt is upheld by the Council and the debt has not yet been paid by the obligor, the Clerk may certify the delinquency to the Department pursuant to Section 421.65 of the Code of Iowa and the memorandum of understanding between the City and the Department.