The City shall operate on an annual budget. The fiscal year of the City shall begin on the first day of July and shall end on the last day of June in each year. Such fiscal year shall constitute the tax year, the budget year, and the accounting year, and shall be known by the calendar year in which it ends.

(a) The City Manager, on such date as the Council shall determine, shall submit a recommended budget to the Council.

(b) The budget shall provide a complete financial plan for the budget year and shall
contain detailed estimates of anticipated revenues and proposed expenditures for the coming year.

(c) The total of anticipated revenues, plus any unreserved or otherwise uncommitted funds available to the City, shall exceed the total of proposed expenditures by not less than 2% of the total anticipated revenue.

(a) The total of such proposed expenditures shall include a general contingency account which shall be not less than one-half of one percent (0.5%) of the total budget revenue of the City. The general contingency account shall be available only to meet extraordinary or unanticipated expenditures associated with programs in the Council approved budget.

(a) Emergency Reserve. A separate reserve shall be established to be used exclusively for emergency expenditures necessary for the health, safety or welfare of persons, or actions necessary to perform essential governmental functions, as determined and authorized by the Council by Specific ordinance. Such Emergency Reserve shall be no less than $250,000 for Fiscal Year 1996, and each fiscal year thereafter shall increase by a percentage equal to the percentage increase in the Consumers Price Index for all Urban Consumers, Washington-Baltimore, DC-MD-VA-WV (November 1996=100) (CPI-U) or any replacement or successor index, from January of the second previous year to January of the prior year. The budget for each fiscal year shall include an amount necessary to maintain the Emergency Reserve at not less than $250,000 for Fiscal Year 1996, plus a percentage increase each year equal to the percentage increase in the CPI-U, DC-MD-VA-WV from January of the second previous year to January of the prior year.

(b) Equipment Replacement Reserve. There shall be established a separate reserve for the replacement of major capital items. This reserve shall be separate and apart from the Emergency Reserve, as prescribed in Section 804(a). Major capital items that have a purchase price greater than or equal to 0.5% of the total budget revenues, at the time of purchase, shall be included in this reserve. Each year’s budget shall include expenditures in the form of payments to the reserve, based on purchase price and the estimated useful life of each item, necessary to maintain the reserve at a level sufficient to replace the covered items. At such time it is determined necessary and appropriate to replace items covered by this reserve, that year’s budget shall include revenues to be drawn from the reserve to replace covered items; however, if it is determined that the reserve contains insufficient funds to fully fund the replacement of one or more items, additional revenues from other sources may also be designated. The list of items covered by this reserve, along with the estimated useful life and amounts designated for replacement, shall be available for public inspection. The Council shall enact by ordinance such additional criteria and procedures as are necessary to operate the Equipment Replacement Reserve.

(c) Other Reserves. As it deems necessary, the Council may establish and maintain additional reserves as may be necessary. Such reserves shall be established by ordinance.

Section 805 Budget Inspection

The budget shall be a public record open to public inspection by anyone during normal business hours.

Section 806 Budget Adoption

(a) Before adopting the budget, the Council shall hold at least one public hearing thereon after due notice has been given. The Council may insert new items or may increase or decrease the total expenditures recommended by the City Manager. The budget shall be prepared and adopted in the form of an ordinance.

(b) The unappropriated reserve shall be maintained to meet extraordinary or unanticipated expenditures, or to offset revenue shortfalls. No funds from the unappropriated reserve may be spent for any reason without approval by the Council by ordinance.

(a) The City Manager may reallocate expenditures within the budget adopted by the Council, subject to such restrictions as the Council shall impose by ordinance.

(b) An amendment to the adopted budget that does not increase total expenditures may be passed, amended, or rejected or have its consideration deferred at any regular or special Council meeting, not withstanding the provisions of Section 309 of this Charter.

(c) An amendment to the adopted budget that increases total expenditures shall be adopted by ordinance.

(d) Not withstanding the provisions of Section 309 of this Charter, the Council may take action to purchase items included in the current budget ordinance at any regular or special meeting, subject to the provisions of this Section.

No public money may be expended unless approved and appropriated by the Council.

No officer or employee shall 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 amount appropriated for or transferred to that general classification of expenditures pursuant to this Charter. Any contract, verbal or written, made in violation of this section shall be null and void. Nothing contained in this section, however may prevent the making of contracts or the spending of money for capital improvements to be financed in whole or in part by the issuance of bonds, nor the making of contracts of lease or for services for a period exceeding the budget year in which such contract is made, when such contract is permitted by law.

All appropriations shall lapse at the end of the budget year to the extent that they shall not have been expended or lawfully encumbered.

All checks issued in payment of city obligations shall be signed by any two of the following City officials: City Manager, Deputy City Manager, Treasurer or City Clerk. The City Manager may authorize the use of facsimile signatures or mechanically produced signatures on such checks for all authorized City officials.

All real property within the corporate limits of the City shall be subject to taxation for municipal purposes. The assessment used for municipal taxation shall be that which is certified by the State to the City and County. No authority is given by this section to impose taxes on property which is exempt from municipal taxation by any Act of the General Assembly.

From the effective date of the budget, the amount stated therein as the amount to be raised by the real and personal property tax shall constitute a determination of the amount of the tax levy in the corresponding tax year.

Each year after the tax levy is made, the Treasurer or other agent for the City shall mail or have delivered to each taxpayer or his/her agent or escrow account servicer at his/her last known address a bill or account of the taxes due from him/her. The bill or account shall contain a statement of the amount of real estate property with which the tax payer is assessed, the rate of taxation, the amount of taxes due, and the date on which the taxes will incur interest and penalty. Failure to give or receive notice required by this section shall not relieve any taxpayer of the responsibility to pay on the dates established by this Charter all taxes levied on his/her property.

(a) All improvements which become substantially completed between January 1 and March 30 in any year shall be subject to the municipal corporation tax rate that is in effect for that taxable year. The tax shall be for the three (3) month period of April 1 to June 30 both inclusive at a rate of 25% of the annual municipal, tax rate that is in effect for that taxable year. The one-quarter year taxes are due on the later of April 1 of the tax year or the date the tax bill is received or reasonably should have been received or is available. One-quarter year taxes may be paid without interest or penalty on or before thirty (30) days after the date the tax bill is mailed or is made available.

(b) All improvements which become substantially completed between October 1 and December 31 in any year shall be subject to the tax rate that is in effect for that taxable year. The tax shall be for the six (6) month period of January 1 to June 30 both inclusive at a rate of 50% of the annual municipal tax rate that is in effect for that taxable year. The one-half year taxes are due and payable on the later of January 1 of the tax year or the date the tax bill is received or reasonably should have been received or is available. One-half year taxes may be paid without interest or penalty on or before thirty (30) days after the date the tax bill is mailed or made available.
(c) All improvements which become substantially completed between July 1 and September 30 in any year shall be subject to the municipal corporation tax rate that is in effect for that taxable year. The tax shall be for the nine (9) month period of October 1 to June 30 both inclusive at a rate of 75% of the annual municipal tax rate that is in effect for that taxable year. The three-quarter year taxes are due and payable on the later of October 1 of the tax year on the date the tax bill is received or reasonably should have been received or is available. Three-quarter year taxes may be paid without interest or penalty on or before thirty (30) days after the date the tax bill is mailed or made available.

Except as otherwise provided in this Charter or applicable state law, real property taxes shall be due on the first day of July in the year for which they are levied and shall be overdue and in arrears on the first day of the following October. For owner-occupied residential property on a semi-annual payment schedule, the first installment of property tax shall be due on July 1 of the tax year and shall be overdue and in arrears on October 1 of the tax year. The second installment of property tax shall be due on December 1 of the tax year and shall be overdue and in arrears on January 1 of the tax year. Overdue real property taxes shall incur interest at the rate of 2/3 of 1 percent for each month or fraction thereof until paid. In addition to the said interest on overdue taxes, a penalty rate set by ordinance may be imposed on all taxes which are overdue and in arrears.

A list of all property on which the City taxes have not been paid and which are in arrears as provided by Sections 815 and 816 of this Charter shall be turned over by the Treasurer to the officials of the County responsible for the sale of tax delinquent property as provided in State law. All property listed thereon shall if necessary be sold for taxes, in the manner prescribed by State law.

The personal property of all persons who are engaged in business within the corporate limits of the City shall be subject to a personal property tax for municipal purposes. The Council may, by ordinance, select those subclasses of personal property taxation. The assessment used for municipal personal property taxation shall be that which is certified by the State to the City and County. No authority is given by this section to impose personal property taxes on personal property that is exempt from municipal taxation by any Act of the General Assembly. The rate of taxation for a municipal personal property tax and the notice of tax levy shall be as stated in Sections 812 and 813 of this Charter.

Personal property taxes may be paid without interest or penalty: (a) on or before September 30, if the bill or account of taxes due is mailed or delivered to the taxpayer on or before August 31 of the taxable year; or (b) on or before thirty (30) days after the date of the tax bill or account is received or reasonably should been received or is available, if the tax bill is mailed or delivered to the taxpayer after September 1 of the taxable year. Failure to give or receive the notice of taxes required by this section shall not relieve any taxpayer of the taxpayer of the responsibility to pay on the dates established by this Charter all taxes levied on his/her personal property. Personal property taxes that have not been paid by the due date shall bear interest at the rate of 2/3 of one percent (1%) for each month or fraction of a month thereof until the personal property tax is paid. In addition to the said interest on overdue personal property taxes, a penalty rate set by ordinance may be imposed on all personal property taxes that are due.

All fees received by an officer or employee of the City in his/her official capacity shall belong to the City government and shall be accounted for by the officer or employee.

The financial books and accounts of the City shall be audited annually in a manner determined by the Council but not contrary to applicable State law.

During the first six (6) months of any fiscal year, the City shall have the power to borrow in anticipation of the collection of the property tax levied for that fiscal year and to issue tax anticipation notes or other evidences of indebtedness as evidence of such borrowing. Such tax anticipation notes or other evidences of indebtedness shall be a first lien upon the proceeds of such tax and shall mature and be paid not later than the end of the fiscal year in which they are issued. No tax anticipation notes or other evidences of indebtedness shall be issued which will cause the total tax anticipation indebtedness of the City to exceed fifty percent (50%) of the property tax levy for the fiscal year in which such notes or other evidence of indebtedness are issued. All tax anticipation notes or other evidences of indebtedness shall be authorized by ordinance before being issued. The Council shall have the power to regulate all matters concerning the issuance and sale of tax anticipation notes.

(a) The Council of Takoma Park shall have the power to borrow money for any proper purpose and to evidence such borrowing by the issue and sale of its general obligation bonds, notes, or other certificates of indebtedness in the manner prescribed in Section 31 to 37 inclusive, of Article 23A of the Annotated Code of Maryland (1998 edition, as amended), title “Municipal Corporations,” sub-title “Creation of Municipal Public Debt.” Notwithstanding the provisions of this subsection, the Council may authorize a private negotiated sale of bonds upon a finding by the Council that such private negotiated sale is in the best interests of the City of Takoma Park.

(b) Any proposed new indebtedness that is greater than five percent (5%) of the revenue budgeted for that year shall be subject to a public hearing and the Council shall not take final action on the proposed indebtedness less than fourteen (14) days following the hearing.

The power and obligation of the City to pay any and all bonds, notes, or other evidences of indebtedness issued by it shall be unlimited and the City shall levy ad valorem taxes on all the taxable property in the City for payment of such bonds, notes, or other evidences of indebtedness and interest thereon. The faith and credit of the City is hereby pledged for the payment of the principal of and the interest on all bonds, notes or other evidences of indebtedness 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.

All bonds, notes or other evidences of indebtedness validly issued by the City 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.

(a) All purchases and contracts for the City government shall be made by the City Manager or his/her designee. The Council shall provide by ordinance for promulgation of rules and regulations regarding purchases and contracts for the City.

(b) When deemed necessary and appropriate, the Council may by ordinance authorize the City Manager to provide for the performance of needed services by contract. All rules and regulations promulgated pursuant to Subsection (a) of this Section shall apply regarding such purchases of services by the City.