EXHIBIT 4
Charter Fund Accounting, Fiscal Administration
and Limitations on Issuance of Bonds
Charter Fund Accounting
(Deletions in Strikeout, Additions in Bold)
Article XI Fiscal Administration (Sections 14, 15, 17-22) Sec. 14. General budget fund.
A fund to be known as the general budget fund is hereby created to account for all financial resources and expenditures except those required to be accounted for in another fund and to report such operating results of said general fund. The city shall maintain adequate level of reserve in the general fund for the purpose of service continuity, managing cash flow, protecting credit ratings, funding emergency responses, and stabilizing budget volatilities driven by economic factors. At the end of any fiscal year, the total balance in said general fund reserve shall exceed fifty (50) percent of the total amount of the property taxes assessed and collected for that year. All receipts from the general tax levy, licenses, fines, permits, and interest on bank deposits, and all other receipts except those from the department of Glendale Water and Power, and those which are collected for a specific purpose, or are herein ordered to be credited to some other fund, shall be credited to said fund, and all disbursements, on account of general budget appropriations, excepting such appropriations as are payable out of special funds, shall be charged to said general budget fund. The credit balance, if any, in said general budget fund, at the end of any fiscal year, the amount of which is in excess of the amount of all outstanding demands and liabilities unpaid on account of general budget appropriations for said fiscal year, shall be transferred to the general reserve fund.
Sec. 15. General reserve fund.
The council shall maintain the permanent revolving fund now established and known as the general reserve fund, for the purpose of keeping the payment of the running expenses of the city on a cash basis. Said fund shall be maintained in an amount sufficient to meet all legal demands against the treasury for the period of each fiscal year prior to the collection of ad valorem taxes. The council shall have power to transfer from the general reserve fund to any fund or funds, such sum or sums as may be required for the purpose of placing such fund or funds, as nearly as possible, on a cash basis. It shall be the duty of the council to provide that all money so transferred from the general reserve fund be returned thereto on or before the end of the fiscal year in which said transfers are made; provided, that in any fiscal year in which the total balance in said general reserve fund exceeds fifty (50) percent of the total amount of the anticipated ad valorem tax receipts for that year, the council may appropriate such excess for any city purpose without returning the same.
Sec. 15. Other funds.
The city shall maintain separate funds for specific functions as required by federal or state laws, Charter provisions, generally accepted accounting principles or as determined by the council. The council may establish policies relating to cash reserves.
Sec. 17. Water works depreciationfund; electric works depreciationfund.
The council shall annually set aside from the income of the department of Glendale Water and Power derived from the waterworks of the city and paid into the waterworks revenue fund, a fund which, according to the estimates of the city manager, shall be sufficient to meet the normal depreciation of such waterworks. It shall also annually set aside from the income of the department of Glendale Water and Power derived from the electric works of the city and paid into the electric works revenue fund, a fund which, according to the estimates of the city manager, shall be sufficient to meet the normal depreciation of such electric works. Each of such funds shall be used only for the repair, replacement, betterment and extensions of the plants and equipment of the waterworks or electric works, as the case may be, from which said revenue is derived. Nothing herein contained shall limit the right to vote and issue bonds of the city for said purposes or any thereof or to issue revenue bonds of said city for said purposes or any thereof. Receipts from the utilities operated by the city shall be paid into the city treasury and maintained in separate water and electric funds.
Expenditures from such funds shall be made for such purposes that include, but are not limited to:
a. Payment of operating expenses;
b. Payments for capital improvements, repairs, maintenance, and extensions; c. Payment of bonds and interest issued for acquisition, construction and extensions;
d. Contributions to reserve balances as determined by reserve policies for each fund established by council.
e. Transfers to the General Fund as authorized by Article XI, Section 22 of this charter.
Sec. 18. Special deposit fund.
There is hereby created a fund to be known as the special deposit fund, wherein shall be deposited all moneys received by the city, or any department, officer or board thereof, for the purpose of guaranteeing the payment of any costs, charges, or damages accruing or liable to accrue, to the city from the depositor and all moneys deposited as bail to secure the liberation of a person accused of a public offense, and all moneys required to be deposited for the purpose of indemnifying persons whose property is in danger of being damaged or destroyed by the operation of the depositor. The money so deposited may be returned to the depositor, should he become entitled to the return thereof, in such manner as the council may, by ordinance, prescribe, or upon default being made in the payment of such costs, charges, or damages, or in the performance of any of such conditions, acts or things, may be declared forfeited in whole or in part and be disposed of as the council may direct.
Sec. 19. General service fund.
The council shall maintain the permanent revolving fund now established and known as the general service fund. All expenditures for lot cleaning, for engineering, and other incidental expenses in connection with street opening and improvement proceedings and all other expenditures which are in the nature of advancements by the city and are to be repaid to the city, shall be charged to said fund. All receipts on account of the matters above mentioned shall be credited to said general service fund from the special fund created for such proceedings, if any, when available therein. All amounts expended for purchase of general supplies, which for any reason cannot be charged directly to the account or accounts for which such supplies are purchased, shall be charged against said general service fund, and when said supplies are used by the various departments, the cost thereof shall be charged against the proper fund and credited to said general service fund.
Sec. 20. Waterworks revenue fund; electric works revenue fund.
All receipts by the department of Glendale Water and Power from the sale of water or otherwise derived from the waterworks of the city shall be credited to a fund hereby created to be known as the waterworks revenue fund. All receipts by the department of Glendale Water and Power from the sale of electric energy or otherwise derived from the electric works of the city shall be credited to a fund hereby created to be known as the electric works revenue fund.
All disbursements (except those payable from the waterworks depreciation fund) provided in the Glendale Water and Power budget on account of said waterworks shall be charged to said waterworks revenue fund and all disbursements (except those payable from the electric works depreciation fund) provided in said budget on account of the electric works shall be charged to said electric works revenue fund. The credit balance, if any, or any part thereof, in each of said funds at the end of any fiscal year, the amount of which is in excess of the amount of all outstanding demands and liabilities unpaid from said fund on account of budget appropriations therefrom, shall be transferred to the Glendale Water and Power surplus fund.
Sec. 21. Glendale Water and Power sinking fund.*
For the payment of principal and interest of all Glendale city or municipal improvement district bonds heretofore issued for the acquisition, improvement or extension of waterworks or electric works operated by the city, the council shall transfer from time to time from the waterworks revenue fund or the electric works revenue fund, or both thereof, to the Glendale Water and Power sinking fund a sufficient amount each year to cover the total amount of payments falling due that year for principal and interest of said bonds. Nothing in this section shall impair the power of the council to levy such taxes as may be necessary to provide for the payment of interest and principal of such bonds, or the power of the council to pay from the waterworks revenue fund the principal and interest of any general obligation bonds of the city hereafter issued for waterworks purposes or to pay from the electric works revenue fund the principal and interest of any general obligation bonds of the city hereafter issued for electric works purposes.
Sec. 22. Glendale Water and Power surplus fund—Generally transfer.
A fund to be known as the Glendale Water and Power surplus fund is hereby created, to which fund shall be credited from the receipts of the department of Glendale Water and Power in the waterworks revenue fund and the electric works revenue fund, any amounts in excess of the requirements of the several funds as hereinbefore set forth. Except as otherwise provided in this section, disbursements from said Glendale Water and Power surplus fund may be made by the council by special appropriation for waterworks or electric works purposes only, which shall include payment of all or any portion of the tax of the Metropolitan Water District of Southern California, or its successors in interest, which the council may elect to pay out of the funds of the City of Glendale.
At the end of each fiscal year an An amount equal to twenty-five (25) percentum of the operating revenues of the department of Glendale Water and Power for such each fiscal year, excluding receipts from water or power supplied to other cities or utilities at wholesale rates, shall be transferred from said Glendale Water and Power surplus fund to the general reserve fund; provided, that the council may annually, at or before the end of the the ensuing fiscal year, reduce said amount or wholly waive such transfer if, in its opinion, such reduction or waiver is necessary to insure the sound financial position of said department of Glendale Water and Power and it shall so declare by resolution.
Article XXVI. Revenue Bonds for Waterworks Utility and Electric Works Utility.
Sec. 1. Issuance generally; how payable; application of restrictions in Charter outside this article.
Revenue bonds for the purpose of providing moneys for the acquisition or construction of additions to or extensions or improvements of the waterworks utility or electric works utility of the city or for the purpose of refunding any revenue bonds previously issued under this article may be issued only as provided in this article. Such revenue bonds shall not constitute any indebtedness of the city but shall be payable, principal and interest, only from the revenue fund derived from the public utility to be added to, extended or improved with the proceeds of said bonds or the proceeds of the bonds to be refunded with said bonds, and no restrictions or limitations upon or procedure for the issuance of bonds in other articles of this Charter shall apply to such revenue bonds.
Sec. 3. Terms and conditions of bond ordinance, etc.; bond ordinance, etc., as contract.
In the ordinance authorizing the issuance of said bonds or in any ordinance, resolution or order in the proceedings for the issuance and sale thereof, or in any indenture authorized by the council in respect of said bonds, the council may, in any article, section, sentence, or clause thereof make such provisions as it may deem necessary or desirable to facilitate the issuance and sale of the bonds or for the protection or security of the holders thereof, including without affecting the generality of the foregoing provisions for any or all of the following:
1. The denominations of the bonds, the rate or rates of interest thereon, the medium of payment thereof, the place or places of payment thereof, within or without the State of California, the form of said bonds (including recitals of regularity) and of interest coupons pertaining thereto, the form, denomination and conditions of any temporary bonds or interim certificates, and the manual or facsimile signatures to be affixed to said bonds, coupons or certificates.
2. The terms and conditions under which said bonds may be issued, sold, paid, called before maturity, refunded, exchanged, registered, transferred and negotiated, and issues for more than one (1) purpose or utility may be sold on all or none basis.
3. Rates to be charged for services furnished by the public utility added to, extended or improved with the proceeds of said bonds, such rates to provide revenue at least sufficient to pay as the same become due, principal and interest of such bonds and all other obligations payable from the revenue fund of such works utility or from any fund derived therefrom and the necessary expenses of maintaining and operating such works utility, and the extent to which such services may be furnished or rendered to the city or to any public corporation free or at lower rates than those otherwise charged.
4. The revenue fund from which said bonds and the interest thereon shall be paid; the collection, deposit and safekeeping of revenues, the permissible uses thereof (including restrictions upon or prohibitions against any uses authorized or required by other articles of this Charter), the special fund or funds to be kept for the payment of principal and interest of the bonds, including reserve, sinking, interest and redemption, and trust funds; the permissible investments for moneys in said funds, the accounts and records to be kept, audits thereof and examination thereof by bondholders and others.
5. The carrying of insurance upon such public utility, or any part thereof, against any and all risks.
6. Prohibitions against or limitations upon the sale, lease or other disposition of such public utility.
7. Prohibitions against or limitations upon the issuance of any additional bonds payable from the revenues of the public utility so acquired, constructed, extended or improved, but no bonds shall be issued pursuant to this article or under any other provision of this Charter having any priority in payment of principal or interest out of such revenues over revenue bonds theretofore or thereafter issued and payable out of said revenues.
8. Provisions whereby the consent or agreement of a stated percentage or number of the holders of the bonds may bind all holders to modifications of the provisions of any ordinance, resolution, order or indenture authorizing or providing for the issuance of such bonds, or to a refunding of said bonds and to calls or exchanges in connection with such refunding.
9. Any other provisions valid under the Constitutions of the State of California and United States of America which the council deems necessary or desirable to facilitate the issuance and sale of said bonds or for the protection of holders thereof.
The ordinance authorizing the issuance of said bonds, any indenture authorized by the council, and all other ordinances, resolutions, or orders in the proceeding for the issuance of said bonds shall constitute a contract with the holders of the bonds and may be enforced by them under any applicable legal remedies.
FISCAL ADMINISTRATION
(Deletions in Strikeout, Additions in Bold)
Article XI. Fiscal Administration (Sections 3 and 6)
Sec. 3. Presentation of demands; petty cash funds.
All demands against the city shall, before being paid, be presented to and approved by the proper commission or officer, as herein provided. Demands for which no appropriation has been made shall be presented to the council; and all other demands shall be presented to the city manager; provided that any person dissatisfied with the refusal of the city manager to approve any demand, in whole or in part, may present the same to the council, and the approval of such demand by the council shall have the same effect as its approval by the city manager; and provided further, that if the council shall provide for a park, playground and recreation center commission, a social service commission, or a city planning commission, it may make provision for the presentation to and approval by any such commission of demands for liabilities incurred by it. The council by ordinance may provide for petty cash funds for payment in cash, of expenditures provided for in the budgets that cannot conveniently and economically be paid otherwise. When making demands for the replenishment of the same, the persons entrusted with the funds shall account for all disbursements, and the amounts so expended shall thereupon be charged against the proper appropriations.
Sec. 6. Fiscal year; proposed budgets and estimates of revenues and expenditures generally.
The fiscal year of the city shall begin on the first day of July. The Council shall adopt a budget on or before the last day of June of each year. On or before the first day of June of each year, Prior to the public hearing required by this Charter, the city manager shall submit to the council a proposed budget for the department of Glendale Water and Power and a proposed budget for all other departments to be known as the general budget. Said budgets shall include estimates of the revenues and expenditures of each budgetary fund and each city departments for the ensuing year. These estimates shall be compiled from detailed information obtained from the several departments on blanks to be furnished by the city manager. The classification of the estimates of expenditures shall be as nearly uniform as possible for all departments, and shall give the following information:
1. A detailed estimate of the expendituresses of each department;
2. Expenditures for corresponding items for the last and for the current fiscal years, including adjustments due to transfers between appropriations plus an estimate of expenditures necessary to complete the current fiscal year;
3. Such information as may be required by the council or as the manager may deem advisable to submit;
4. The recommendation of the manager as to the amounts to be appropriated, with reasons therefor, in such detail as the council may direct. Sufficient copies of such proposed budgets shall be prepared and submitted, that there may be copies on file in the office of the clerk for the inspection by the public and one (1) copy of each budget furnished each member of the council. The council shall have power to revise, correct or modify proposed budgets in any particular.”
The budget control is at each fund level, and the total expenditures for each budgetary fund shall not exceed the final revised budget of such fund in a given fiscal year.
LIMITATIONS ON ISSUANCE OF BONDS
(Deletions in Strikeout, Additions in Bold)
Article XXVI. Revenue Bonds for Waterworks and Electric Works (Section 4) Sec. 4. Limitations on issuance.
The following limitations shall apply to the issuance of bonds under this article.
1. Said bonds shall be payable within not more than forty years from the date of issue thereof, and not less than one-fortieth part of the whole of any issue of bonds shall be payable annually beginning not later than ten (10) years from the date of such issue.
2. Said bonds shall be designated "Revenue Bonds" and each bond shall state on its face that it does not constitute an indebtedness of the City of Glendale but is payable, principal and interest, only from the revenue fund of the utility for which the proceeds of the bonds will be used.
3. Said bonds shall may be sold through a negotiated or a competitive process as determined by the city council only at public sale following such notice as the council by resolution may prescribe; provided, however, that if no satisfactory bid is received pursuant to such notice the council may reject all bids received, if any, and thereafter sell said bonds at public or private sale; provided, further, that the provisions of this subsection shall not apply to the exchange of any refunding bonds.
4. Said bonds shall be sold for not less than par and accrued interest to date of delivery. The proceeds from the sale (except premium and accrued interest which shall be used for the payment of principal and interest of the bonds) shall be applied exclusively to the objects and purposes set forth in the ordinance authorizing the issuance thereof; provided, however, that said proceeds may be used for the payment of interest on said bonds during the period of acquisition and construction and for the first six (6) months thereafter; and provided, further, that when the objects and purposes for which the bonds were issued have been accomplished any remaining unexpended funds derived from the sale of said bonds shall be used for the payment of the principal and interest of said bonds.”