February 20, 2019

How and when should a city budget be adopted?

Each city is required to operate and expend funds under an annual budget that must be adopted by ordinance on or before the beginning of the fiscal year (July 1). If the city fails to adopt a budget prior to July 1, the city must continue to operate on the budget from the prior year until a new budget is adopted.

The executive authority of the city is responsible for preparing a budget proposal and submitting that proposal along with a budget message (see KRS 91A.030(7)) to the legislative body at least 30 days prior to the beginning of the new fiscal year. 10-ORD-103 states that the proposed budget that is submitted to the legislative body by the executive authority is subject to the Open Records Act.

The legislative body must adopt a budget ordinance appropriating monies for the fiscal year, which is July 1 – June 30. The legislative body need not adopt the budget in the form submitted by the executive authority.  The legislative body has full authority to make any necessary changes.

Once the legislative body has completed the budget, it is adopted as any other ordinance is adopted, with a first and second reading, submission to the executive authority for veto or signature, and publication within 30 days of adoption.

At any time after the adoption of the budget, the legislative body may amend the budget by ordinance. This, however, is subject to the restriction that at no time may expenditures exceed revenues during any given fiscal year. The budget should be amended any time the legislative body elects to spend revenues in a manner different from the budget allocation.

As with the original budget, an ordinance amending the budget is adopted in the same manner as any other ordinance.

For more on budgeting, auditing, and reporting see the City Officials Legal Handbook