Sacramento Municipal Code Art. IX Fiscal Administration

The fiscal year for the city shall be determined by ordinance enacted by the city council.

Each department, office and agency of the city shall provide in the form and at the time directed by the city manager all information required by the city manager to develop a budget conforming to modern budget practices and procedures as well as specific information which may be prescribed by the council. Not later than 60 days prior to the commencement of each fiscal year or such greater period as the council may prescribe, the city manager shall prepare and present to the city council, in such form and manner as it may prescribe, budget recommendations for the next succeeding fiscal year. Following public budget hearing, the city council shall adopt by resolution a budget of proposed expenditures and appropriations necessary therefore for the ensuing year, failing which the appropriations for current operations of the last fiscal year shall be deemed effective until the new budget and appropriation measures are adopted. The budget may be amended during the fiscal year in accordance with the procedure established by the council.

Not later than the date set by state law for this purpose, the city council shall by resolution fix the rate of property tax to be levied and levy the tax upon all taxable property in the city. Such rate shall be adequate to meet all obligations of the city for the fiscal year, taking into account estimated revenue from all other sources. Should the city council fail to fix the rate and levy taxes within the time prescribed the rate for the last preceding fiscal year shall thereupon be automatically effective, and a tax at such rate shall be levied upon all taxable property in the city for the current fiscal year.

Municipal obligations may be financed by cash pool operations and utilization of a warrant or check system. Except for those funds restricted by bond indentures, state or federal law, other sections of this Charter or specific conditions of the legislation creating them, temporary transfers between funds are permitted.

The city council shall create, reduce or eliminate such funds as are required for proper accounting and fiscal management, or required as a condition of receiving funds from any other government, or to fulfill any bonded or other contractual obligation of the city.

The city manager shall establish and maintain a system of financial procedures, accounts and controls for the city government and each of its departments, offices and agencies which shall conform to generally accepted principles of accounting which shall be adequate to account for all monies on hand and for all income and expenditures in such detail as will provide complete and informative data concerning the financial affairs of the city and as will be readily susceptible to audit and review.

All monies received by the city shall be deposited in the city treasury, and no monies shall be disbursed from the treasury without the approval of the city manager or of another officer duly authorized by him. No expenditure of city funds shall be made except for the purposes and in the manner specified by an appropriation of the city council; nor shall any disbursement be made unless obligations are properly supported by accounting evidence, sufficient money is available in the city treasury and there is an adequate unencumbered appropriation balance in the proper account classification.

The city manager upon approval of the city council shall engage each year an independent certified public accountant who shall examine and report to the council on the annual financial statement of the city. The accountant shall have free access to the books, records, inventories and reports of all officers and employees who receive, handle or disburse public funds, and of such other officers, employees, or departments as the city council may direct. The accountant shall submit an audit as soon as practicable after the closing of the books for the fiscal year for which he is engaged. Copies of such audit reports shall be filed with the city council, and shall be available for public inspection and review.

The city council shall determine by ordinance which officers and employees shall be subject to group or individual bonds to insure the faithful performance of official duties, shall fix the amount of such bonds and shall provide payment of the premium of such bonds by the city.

The city council may issue revenue bonds for any lawful purpose in such manner and upon such terms and conditions as it may fix and establish by the provisions of a procedural ordinance.

(a) Definitions. The following definitions apply in this section:

(1) "Administrative costs" means the City of Sacramento's costs for strategic planning, grant making, grants management, data collection and evaluation, technical assistance, organizational capacity-building, communications, community engagement, and service performance and impact evaluation.

(2) "Baseline funding" means the amount of general fund revenue expended in the 2022-2023 fiscal year on baseline services, as calculated and annually adjusted pursuant to subsection (e).

(3) "Baseline services" means services provided to youth that are designed to meet the same objectives as the fund goals (as defined herein), but excluding any amounts that would be considered prohibited expenditures under subsection (d)(2).

(4) "Budget" means the city's fiscal year budget adopted by the city council pursuant to section 111.

(5) "Cannabis business operations tax" or "CBOT" means the tax imposed by Sacramento City Code section 3.08.205, as amended from time to time, or any successor tax on cannabis businesses.

(6) "Commission" means the Sacramento Children's Fund Planning and Oversight Commission.

(7) "Estimated CBOT" means the amount of cannabis business operations tax revenue in the next fiscal year, as estimated by the city manager no later than January 15 immediately preceding the next fiscal year.

(8) "Five-Year Strategic Investment Plan" means the plan developed by the Sacramento Children's Fund Planning and Oversight Commission and approved by the city council, as provided in this section.

(9) "Fund goals" means the following: supporting the mental health and emotional wellness of youth; preventing and reducing homelessness among youth, including youth transitioning out of foster care; preventing and reducing youth substance abuse; preventing and reducing youth violence; and supporting the healthy development of children ages 0 to 5 years old.

(10) "General fund" means all revenue received by the city that is unrestricted and that can be used for any lawful purpose.

(11) "Operational department" means an office or department of the city funded primarily from general fund revenue.

(12) "Qualified organization" means a public entity (including the city through its offices and departments) or any organization exempt from taxation under United States Internal Revenue Code section 501(c)(3).

(13) "Sacramento Youth Commission" means the commission established pursuant to Sacramento City Code chapter 2.126 or any successor commission.

(14) "Sacramento Children's Fund" means the fund that receives the general fund revenue allocation required by subsection (c), and that is maintained and accounted for separately and apart from the remainder of the general fund.

(15) "Youth" means persons under 25 years of age.

(16) "Youth services" means qualified-organization-provided services and programs that support and implement the Five-Year Strategic Investment Plan. Youth services may include, but are not limited to:

(A) Mental health counseling and wellness services;

(B) Substance abuse prevention services;

(C) Street outreach, violence intervention, and case management;

(D) Youth workforce development, including career pathways that advance the city's climate-action goals;

(E) Summer programs and after-school programs; and

(F) Early childhood education and family support services.

(b) Sacramento Children's Fund.

(1) There is hereby established a fund to be known as the Sacramento Children's Fund, which shall be maintained and accounted for separately and apart from the remainder of the general fund.

(2) The Sacramento Children's Fund shall consist of:

(A) The annual allocation from the general fund required by subsection (c);

(B) All interest earned on the Sacramento Children's Fund;

(C) All amounts in the Sacramento Children's Fund not spent or encumbered at the end of a fiscal year, which amounts shall carry over to the next fiscal year as a supplement to the amount required to be allocated in that next fiscal year; and

(D) Any other money specifically directed to the Sacramento Children's Fund, from sources such as grants, gifts, and council-approved additional allocations.

(c) Annual funding required; calculation; adjustments

(1) Each budget adopted after the effective date of this section must allocate an amount equal to at least 40% of the estimated CBOT, as adjusted according to subsection (c)(2), to the Sacramento Children's Fund.

(2) Starting in 2025, by each January 15 the city auditor shall publish an audited amount of CBOT for the prior fiscal year. If 40% of that audited amount is greater than the amount allocated to the Sacramento Children's Fund in the prior fiscal year, the difference shall be added to the amount required to be allocated the next fiscal year. If 40% of the audited amount is less than the amount allocated to the Sacramento Children's Fund in the prior fiscal year, the difference shall be deducted from the amount required to be allocated the next fiscal year.

(d) Expenditures.

(1) Money in the Sacramento Children's Fund may only be used to engage qualified organizations to provide youth services in accordance with an adopted Five-Year Strategic Investment Plan, plus allowable administrative costs.

(A) Notwithstanding the lack of a Five-Year Strategic Plan during the 2023-2024 fiscal year, money in the Sacramento Children's Fund may be used during the 2023-2024 fiscal year for administrative costs.

(2) Prohibited expenditures. Sacramento Children's Fund money may not be spent for:

(A) Services that only incidentally benefit youth;

(B) Acquisition, lease, or maintenance of any capital item or real property that is not for primary and direct use by youth; or

(C) Services for which a fixed or minimum level of expenditure is mandated by state or federal law, to the extent of that fixed or minimum level of expenditure.

(3) Recipient organizations.

(A) The city shall select qualified organizations to receive Sacramento Children's Fund money based on an open, transparent, and competitive process, as may be established by the city.

(B) All qualified organizations receiving money under this section are subject to, and shall cooperate in, performance and financial audits by the city and its representatives.

(C) Before receiving money from the Sacramento Children's Fund, any non-city public agency must demonstrate a cash match for each dollar it receives from the fund.

(4) Administrative costs.

(A) For fiscal year 2023-2024, no more than 20% of the Sacramento Children's Fund may be spent on administrative costs.

(B) For fiscal year 2024-2025, no more than 15% of the Sacramento Children's Fund may be spent on administrative costs.

(C) Beginning with fiscal year 2025-2026, no more than 10% of the Sacramento Children's Fund may be spent on administrative costs.

(e) Maintenance of effort.

(1) The Sacramento Children's Fund does not supplant baseline funding. In addition to the annual allocation required by subsection (c), the budget must include the baseline funding amount for baseline services, subject to this subsection (e).

(A) The city auditor shall calculate and publish the baseline funding amount no later than December 31, 2023.

(B) Recognizing that the baseline funding amount will not be calculated before adoption of the budget for fiscal year 2023- 2024, that budget need not expressly comply with this subsection (e)(1). However, if the auditor's verification pursuant to subsection (e)(1)(C) establishes the fiscal year 2023-2024 expenditures on baseline services fell below the baseline funding amount, the difference shall be added to the fiscal year 2025-2026 budget as a one-time addition to fund baseline services, as provided in subsection (e)(1)(C).

(C) Beginning in 2025, by January 15 of each year the city auditor shall verify that the baseline funding amount was expended in the previous fiscal year. If in any year the auditor determines expenditures for baseline services fell below the baseline funding amount, the difference between amount expended and the baseline funding amount shall be added to the succeeding fiscal year budget as a one-time addition to fund baseline services.

(2) The baseline funding amount may be reduced in any year during which general fund revenue support for operational departments is reduced; provided, however, the percentage reduction in baseline funding cannot exceed the percentage reduction of general fund revenue support to operational departments.

(3) Following any reduction pursuant to subsection (e)(2) above, in subsequent years during which there are increases in general fund revenue support to operational departments, the reduced baseline funding amount must receive the same percentage increase as the percentage increase of general fund revenue support to operational departments, until such time as the baseline funding amount returns to the amount described in subsection (e)(1).

(f) Planning and Oversight Commission.

(1) There is hereby established a ninemember Sacramento Children's Fund Planning and Oversight Commission.

(2) The commission has the power and duty to:

(A) In consultation with the Sacramento Youth Commission, develop Five-Year Strategic Investment Plans and submit them to the city council for adoption;

(B) Conduct a review of each Five-Year Strategic Investment Plan before the end of the third year of that plan;

(C) Review and accept annual Service Performance Reports, Three-Year Youth Impact Evaluation Reports, Five-Year Youth Impact Performance Reports, and fiscal and performance audit reports; and

(D) Make recommendations to the city council as a result of its review of the plans and reports described in subsections (f)(2)(B), (C).

(3) Appointment; qualifications.

(A) Notwithstanding section 230 of this charter, each member of the city council (including the mayor) shall appoint one member to the commission. In making these appointments, the members of the city council shall endeavor to constitute a commission that reflects the demographic profile of the city's youth.

(B) Each commission member must have:

(i) Personal experience as a consumer (past or present) of youth services; or

(ii) Demonstrated knowledge and professional experience in youth development theory, youth program implementation, or youth program evaluation.

(4) Except as otherwise provided in this section, the commission and commissioners shall be subject to the same rules and regulations as other city boards and commissions.

(5) The city manager shall assign sufficient staff to support the commission in the discharge of its duties, including the preparation of plans and reports.

(g) Plans and Reports.

(1) Five-Year Strategic Investment Plan.

(A) The commission shall develop and submit to the city council for final adoption Five-Year Strategic Investment Plans, which may be amended from time to time.

(B) The first Five-Year Strategic Investment Plan covers the period of July 1, 2024 through June 30, 2029; subsequent plans cover succeeding five-year periods.

(C) Contents. Each Five-Year Strategic Investment Plan must include the following:

(i) Problems and challenges to be addressed in each of the fund goals;

(ii) Target populations to be served within each of the fund goals, using multiple data sources to identify those populations most impacted by poverty, trauma, and violence;

(iii) Service performance measures and youth outcome metrics to evaluate progress toward achieving the fund goals;

(iv) Strategies to achieve outcomes for the target populations for each of the fund goals;

(v) Alignment, leveraging, and coordination of other public and private resources, including resources of the County of Sacramento, local school districts, and philanthropy, to maximize program performance and impact beyond what Sacramento Children's Fund monies can achieve alone.

(2) Annual Service Performance Reports. The city manager shall develop for the commission's review an annual report evaluating all services funded by the Sacramento Children's Fund, assessing those services' performance and progress toward youth outcome metrics established in the Five-Year Strategic Investment Plan.

(3) Youth Impact Evaluation Reports. After the third year of each Five-Year Strategic Investment Plan, as well as after the end of each Five- Year Strategic Investment Plan, the city manager shall develop for the commission's review Youth Impact Evaluation Reports that assess progress in youth services performance and youth outcome metrics.

(h) Implementation.

(1) The city council may adopt ordinances and resolutions to implement this section, to the extent those are consistent with this section and effectuate its purpose.

(2) If the Sacramento Youth Commission, including any successor, ceases to exist, the city council shall identify another city board, commission, or committee to perform the duties of the Sacramento Youth Commission under this section. (Added by Res. 2022-0231, 7/21/22)