Financial & Budget
BUDGET, TAXATION, AND INDEBTEDNESS
41. Fiscal Year
The Town operates on an annual budget.
The fiscal year of the Town begins on the first day of July in any year and ends on the last day of June the following year.
The fiscal year constitutes the tax year, the budget year, and the accounting year.
The Mayor, on such date as the Council may determine, but at least 32 days before the beginning of any fiscal year, must submit a budget to the Council.
The budget must provide a complete financial plan for the budget year and must contain estimates of anticipated revenues and proposed expenditures for the coming year.
The total of the anticipated revenues must equal or exceed the total of the proposed expenditures.
The Council may insert new items or increase or decrease the items in the budget.
Where the Council or the Town Meeting increases the total proposed expenditures it must also increase the total anticipated revenues in an amount at least equal to such total proposed expenditures.
The budget is a public record, open to reasonable public inspection.
A summary of the proposed budget must be circulated to all residences of the Town at least two weeks prior to the regular Town Meeting to be held in May.
The Mayor must then present to the Town Meeting for adoption the budget as recommended by the Council.
The budget as finally approved by a majority vote of the qualified voters present and voting becomes the limitation of the total expenditures for the ensuing fiscal year, subject to modification by a Special Town Meeting.
The Council may, however, increase or decrease items in the budget subject to the aforesaid limitation on total expenditures.
No public money may be expended without having been appropriated by the Council.
From the effective date of the budget, the several amounts stated therein as proposed expenditure become thereby appropriated to the several objects and purposes named therein, subject to the provisions of Section 42.
44. Over-Expenditures Forbidden
No officer or employee may, during any budget year, expend or contract to expend any money or incur any liability or enter into any contract which by its terms involves the expenditure of money for any purpose in excess of the amounts appropriated for or transferred to that general classification of expenditure by subsequent action pursuant to this Charter.
Any contract, verbal or written, made in violation of this Charter is null and void.
Nothing in this section, however, prevents the making of contracts or the spending of money for bonds, nor the making of contracts or the spending of money for capital improvements to be financed in whole or in part by issuance of bonds.
A contract for a period exceeding the budget year in which such contract is made is permitted if the contract is subject to termination by the Town because sufficient funds are not appropriated for a subsequent budget year.
45. Appropriations Lapse After One Year
All appropriations lapse at the end of the budget year to the extent that they have not been expended or lawfully encumbered.
Any unexpended and unencumbered funds must be considered a surplus at the end of the budget year and must be reflected in the budget for the next succeeding year.
All checks issued in payment of municipal obligations must be issued and signed by the Treasurer or the Mayor or the Mayor Pro Tempore.
47. Taxable Property
(a) All real property, and all tangible personal property of any commercial enterprise taxable under State law within the corporate limits of the Town is subject to taxation for municipal purposes, and the assessment used is the same as that for State and County taxes.
No authority is given by this section to impose taxes on any property which is exempt from taxation by State law.
(b) The Mayor and Town Council must annually prepare an estimate as to the amount of money required, over and above the tax authorized in paragraph (a), to provide for the cost of the public service, such as the collecting of trash and garbage, the clearing, cleaning and lighting of streets, and such other public service, insurance, repair and upkeep of the public buildings and parks and maintenance of the same, and other charges which may be necessary for the conduct of affairs of the Town and for the well-being and the health of the entire community.
The Mayor and Council must present such estimate for the approval of the qualified voters in annual Town Meeting.
Upon the approval of a majority of such qualified voters in meeting assembled, the Town Council may annually impose a uniform running front foot charge in the nature of an assessment against all improved and unimproved lots within the corporate limits of said Town, and/or a flat uniform and equal assessment against each dwelling upon lots within said Town, to provide the additional funds necessary over and above the tax provided in paragraph (a) as called for in the approved budget.
48. Budget Authorizes Property Taxes
From the effective date of the budget, the amount stated therein as the amount to be raised by the property taxes authorized in Section 47 constitutes a determination of the amount of the tax to be imposed in the corresponding tax year.
49. Notice of Property Taxes
Promptly after the property taxes are imposed by the Town, the Treasurer, or a designated agent, must make out and mail to each taxpayer or designated agent at the last known address a bill or account of the taxes due.
This bill or account must contain a statement of the amount of real and personal property with which the taxpayer is assessed, the rate of taxation, the amount of taxes due, and the date on which the taxes will begin bearing interest and penalty.
Failure to give or receive any bill required by this section does not relieve any taxpayer of the responsibility to pay on the dates established by this Charter all taxes imposed on the property.
50. When Taxes are Overdue; Liens
The taxes provided for in Sections 47 and 48 of this Charter are due and payable on the first day of July in the year for which they are imposed and are overdue and in arrears on the first day of the following October.
They bear a penalty while in arrears at the rate fixed by resolution of the Council prior to the first day of the tax year for which the tax is imposed.
All taxes not paid and in arrears after the first day of the following March may be collected as provided in Section 51.
All taxes imposed on property are a lien on the property to the same extent as State and County property taxes.
51. Sale of Tax Delinquent Property
A list of all property on which Town taxes have not been paid and which are in arrears as provided in Section 50 above may be turned over by the Treasurer to the official of Montgomery County responsible for the sale of tax delinquent property, as provided in State law.
All property listed thereon may, if necessary, be sold for taxes by this Montgomery County official or the Town, in the manner prescribed by State law.
All Town fees received by an officer or employee of the Town belong to the Town and must be accounted for to the Town.
The financial books and accounts of the Town must be audited annually as required by State law.
54. Creation of Municipal Debt
(a) During the first 6 months of any fiscal year, the Town has the power to borrow in anticipation of the collection of the property tax imposed for that fiscal year, and to issue tax anticipation notes or other evidences of indebtedness as evidence of such borrowing in conformance with State law.
Such tax anticipation notes or other evidences of indebtedness are a first lien upon the proceeds of such tax and must mature and be paid not later than 6 months after the beginning of the fiscal year in which they are issued.
No tax anticipation notes or other evidences of indebtedness may be issued which cause the total tax anticipation indebtedness of the Town to exceed 50 percent of the property tax imposed for the fiscal year in which such notes or other evidences of indebtedness are issued.
All tax anticipation notes or other evidences of indebtedness must be authorized by ordinance before being issued.
The Council has the power to regulate all matters concerning the issuance and sale of tax anticipation notes.
(b) The Town has the authority to incur bonded indebtedness, subject to the provisions of State law; however, such bonded indebtedness must at no time exceed 10 percent of the total assessed value of real property subject to tax, as provided in Section 47 of this Charter, within the corporate limits of the Town.
55. Payment of Indebtedness
The power and obligation of the Town to pay any and all bonds, notes or other evidences of indebtedness issued by it under the authority of this Charter are unlimited and the Town may impose ad valorem taxes upon all the taxable property of the Town for the payment of such bonds, notes, or other evidences of indebtedness and interest thereon, without limitations of amount.
The full faith and credit of the Town is hereby pledged for the payment of the principal and the interest on all bonds, notes, or other evidences of indebtedness, hereafter issued under the authority of this Charter, whether or not such pledge be stated in the bonds, notes, or other evidences of indebtedness, or in the ordinance authorizing their issuance.
56. Previous Issues
All bonds, notes, or other evidences of indebtedness validly issued by the Town previous to the effective date of this Charter and all ordinances passed concerning them are hereby declared to be valid, legal, and binding and of full force and effect as if herein fully set forth.
57. Purchasing and Contracts
The Council may provide by ordinance for rules and regulations regarding the use of competitive bidding and contracts for all or part of the Town’s purchases and contracts.
All expenditures for supplies, materials, equipment, construction of public improvements, or contractual services involving more than five thousand dollars ($5,000.00) must be made on written contract.
The Clerk is required to ask for sealed bids, in such manner as may be prescribed by ordinance, for all such written contracts provided however that the Council may authorize the bypassing of any or all bid procedure steps in cases in which the sealed bid process may not produce responsive bids, or the item or service is only available from one source and in the Council’s judgment, such action is warranted as being in the Town’s best interest.
Such written contracts must be awarded to the bidder who offers the lowest or best bid, quality of goods and work, time of delivery or completion, and responsibility of bidders being considered.
All such written contracts must be approved by the Council before becoming effective.
The Clerk, with the approval of the Mayor and Council, has the right to reject all bids and re-advertise.
In addition whenever a Federal, State of Maryland, or Maryland County or local government, or any agency or unit thereof, whose purchasing policies are comparable to those of the Town, has conducted a competitive bid and awarded a contract, the Treasurer my purchase the bid item at the bid price from the successful bidder, subject to the approval of the contract by the Mayor and Council.
The Town at any time in its discretion may employ its own forces for the construction and reconstruction of public improvements without advertising for (or re-advertising for) or receiving bids.