Opinion ID: 2031531
Heading Depth: 2
Heading Rank: 2

Heading: uniform budgeting and accounting act

Text: The UBAA establishes a uniform budgeting system for local units of government. It requires that each unit have a designated officer responsible for preparing the budget, that the budget be balanced when it is presented to the legislative body and when it is enacted, that periodic adjustments be made during the fiscal year as necessary to keep the budget balanced, that all expenditures be properly authorized by an appropriation, that no expenditures be made from an exhausted account, and that major transfers between appropriations accounts be made only on specific legislative authorization. House Legislative Analysis, SB 1298, December 21, 1978. The provisions of § 17 of the UBAA govern procedures for amending the budget in the event of an impending deficit. Section 17 provides as follows: Except as otherwise provided in section 19, a deviation from the original general appropriations act shall not be made without amending the general appropriations act. The legislative body of the local unit shall amend the general appropriations act as soon as it becomes apparent that a deviation from the original general appropriations act is necessary and the amount of the deviation can be determined. An amendment shall indicate each intended alteration in the purpose of each appropriation item affected by the amendment. The legislative body may require that the chief administrative officer or fiscal officer provide it with periodic reports on the financial condition of the local unit. If, during a fiscal year, it appears to the chief administrative officer, or the fiscal officer in local units which have not elected or designated a chief administrative officer, or to the legislative body that the actual and probable revenues from taxes and other sources in a fund are less than the estimated revenues, including an available surplus upon which appropriations from the fund were based ..., the chief administrative officer or fiscal officer shall present to the legislative body recommendations which, if adopted, would prevent expenditures from exceeding available revenues for that current fiscal year. The recommendations shall include proposals for reducing appropriations from the fund for budgetary centers in a manner that would cause the total of appropriations to not be greater than the total of revised estimated revenues of the fund, or proposals for measures necessary to provide revenues sufficient to meet expenditures of the fund, or both. The recommendations shall recognize the requirements of state law and the provisions of collective bargaining agreements. [MCL 141.437; MSA 5.3228(37).] The Court of Appeals held that the city council was the ultimate legislative decision-making body with respect to the budget. 153 Mich App 604. Accordingly, it held that the council had the authority to unilaterally initiate proposals for amendments to the fiscal year 1983-84 budget. Id. The Court also held that the Detroit Charter provisions cited by the defendant to negate the council's authority to unilaterally amend the budget during the fiscal year were in conflict with the UBAA. The Court held that, to the extent the city charter imposes a greater burden on the city council than that required by the UBAA, the charter is void. It cited the provisions of the home rule statute, MCL 117.36; MSA 5.2116, which expressly state that no charter provision shall conflict with or contravene the provisions of any general law of the state. Id. The defendant asserts that the Court of Appeals erred in limiting the role of the mayor to mere recommendation of amendable proposals for transfers of appropriations. He asserts that the council may only accept or reject the recommendations as submitted by the mayor; the council may not unilaterally amend the mayor's recommendations. It is undisputed that the mayor is required to make recommendations to the city council in the event that it becomes apparent that a deficit will develop during a fiscal year. The relevant portion of § 17 provides: If, during a fiscal year, it appears to the chief administrative officer, or the fiscal officer ... or to the legislative body that the actual and probable revenues ... are less than the estimated revenues ..., the chief administrative officer or fiscal officer shall present to the legislative body recommendations which, if adopted, would prevent expenditures from exceeding available revenues for that current fiscal year. [MCL 141.437; MSA 5.3228(37). Emphasis added.] The use of the mandatory shall in stating the responsibilities of the mayor requires this interpretation. See, e.g., Brown v Dep't of Military Affairs, 30 Mich App 463; 186 NW2d 747 (1971), rev'd on other grounds 386 Mich 194; 191 NW2d 347 (1971), cert den 405 US 990 (1972); Sears v Dep't of Treasury, 57 Mich App 218; 226 NW2d 63 (1974). The statute imposes the responsibility on the mayor whether it is the mayor or the city council or the chief financial officer of the city that initially discovers the impending deficit. MCL 141.422b(3); MSA 5.3228(22b)(3) provides: (3) Chief administrative officer means any of the following:    (b) The city manager of a city or, if a city does not employ a city manager, the mayor of the city. The council acknowledges that the mayor has the responsibility to submit such recommendations. The council asserts, however, that it was free to change the proposal submitted by the mayor before passing a budget amendment resolution. This is the heart of the dispute between the parties. We find that careful construction of the statute yields the conclusion that the UBAA does not require that the city council have the authority to unilaterally amend the recommendations of the mayor before adopting them in the form of a resolution. The council may, however, reject the recommendations of the mayor. The mayor would then be required to develop another set of recommendations. The council's power to reject the recommendations of the mayor is consistent with the phrase if adopted in the above-quoted section. This power does not, however, require the ability to unilaterally amend the recommendations. It must be noted that the Legislature has placed the most important requirements for the content of the budget amendment in the portion that describes the responsibilities of the mayor in formulating recommendations. Only the mayor is responsible for ensuring that the proposals submitted would prevent expenditures from exceeding available revenues for that current fiscal year. Similarly, the mayor is solely responsible for recommending proposals for reducing appropriations from the fund for budgetary centers in a manner that would cause the total of appropriations to not be greater than the total of revised estimated revenues of the fund, or proposals for measures necessary to provide revenues sufficient to meet expenditures of the fund, or both. Further, it is the mayor's responsibility to ensure that the proposals recognize the requirements of state law and the provisions of collective bargaining agreements. MCL 141.437; MSA 5.3228(37). As indicated, these specifications for the content of budget amendments appear in the part of the section that delineates the responsibilities of the mayor. They do not appear in the language which describes the responsibilities of the city council. The only specification appearing in the latter part requires that the appropriations transfer resolution contain the purpose of each appropriation item. Id. We find that the specificity of detail included in the responsibilities of the mayor coupled with the lack of specificity in describing responsibilities of the city council militates toward the conclusion that the mayor's recommendations are to generate the subsequent budget amendment resolution. This must be understood in light of the fact that the council may reject the recommendation; however, upon that rejection, the mayor is required to come up with another set of proposals that also satisfies the specifications listed above. Therefore, we hold that the council may either accept or reject the recommendations submitted by the mayor. We find that this construction is also consistent with the separation of powers and duties in the city charter.