From: Marco DeLucio <mdelucio@zsws.com>
Sent: Tuesday, September 15, 2020, 10:50 AM
Subject: FW: Budget Amendment No 5
All,
The attached Budget Amendment No. 5 proposes a 3% across the board cut to all general fund line items with the exception of debt service. Budget Amendment No. 5 also appears to use all realized savings to add to the Hospitalization line item.
As written, I take this to mean all line items of the General Fund including police and fire budgets are to be cut by 3%.  Because City Council has the power to cut the budget, I believe the proposed amendment is sufficiently specific to allow Council to adopt this Amendment since it appears to be directed to all line items from the General Fund. As noted last night at the Council meeting, these cuts would cut amounts paid to public safety since public safety line items are included in the General Fund.
In response to comments from other councilpersons, Councilman Weaver indicated that his amendment was not intended to specify any particular cut, but rather as a requirement that the Mayor make a 3% cut to the General Fund in a manner deemed appropriate by the Mayor. If the proposed Amendment No 5 is intended to require the Mayor to make an overall 3% cut to the General Fund without provide specific cuts, it is our opinion that Amendment No 5 is unenforceable because the City Council, effectively, is abdicating its statutory duty to “reduce any estimated item†from the budget and shifting such responsibility to the Mayor. It is my recollection, that Councilman Weaver offered a similar amendment in 2018 (for the 2019 budget) and we provided a similar legal opinion at that time on that matter. The City Council must provide an item-by-item reduction if it desires to reduce the Mayor’s proposed budget.
Indiana Code 36-4-7-7(a) provides:
“The fiscal officer shall present the report of budget estimates to the city legislative body under IC 6-1.1-17. After reviewing the report, the legislative body shall prepare an ordinance fixing the rate of taxation for the ensuing budget year and an ordinance making appropriations for the estimated department budgets and other city purposes during the ensuing budget year. The legislative body, in the appropriation ordinance, may reduce any estimated item from the figure submitted in the report of the fiscal officer, but it may increase an item only if the executive recommends an increase. The legislative body shall promptly act on the appropriation ordinance.â€
It should be noted that the predecessor statute to Indiana Code 36-4-7-7 stated the following:
“It shall be the duty of the committee of finance of the common council thereupon to prepare an ordinance fixing the rate of taxation for the ensuing year, and also an ordinance making appropriations by items for the use of the various executive departments and other city purposes for the ensuing year. Such ordinance may reduce any estimated item for any executive department, from the figure submitted in the report of the city controller, but shall not increase the same unless recommended by the mayor.”
The term “item†is not defined under Title 36. However, the term “item†is used in other statutes throughout Indiana Code 36-4-7, including:
In short, the Mayor must submit a line item budget for consideration by City Council which estimates the expenditure each department head anticipates. The Mayor’s proposed 2021 budget is a line item budget. Indiana case law doesn’t specifically address the definition of “item,†but an examination of cases supports that City Council must consider each line item. See Gary v. State, 406 N.E.2d 1247 (Ind. Ct. App. 1980)(the provision that an appropriation ordinance may reduce any item but not increase it unless recommended by the mayor did not apply to appropriations for salaries for the police and fire departments, the sole authority to set salaries for the police and fire departments being vested in the common council); Moore v. Kokomo, 60 N.E. 2d 530 (Ind. 1945)(an appropriation for a municipal public improvement did not need to break down the cost of such improvement into detailed items going to make up the whole).
Finally, the predecessor statute to Indiana Code 36-4-7-7 stated:
“It shall be the duty of the committee of finance of the common council thereupon to prepare an ordinance fixing the rate of taxation for the ensuing year, and also an ordinance making appropriations by items for the use of the various executive departments and other city purposes for the ensuing year. Such ordinance may reduce any estimated item for any executive department, from the figure submitted in the report of the city controller, but shall not increase the same unless recommended by the mayor.”
Formerly Indiana Code 18-1-6-6. The former statute makes it even more explicitly clear which “items†were to be considered by City Council – specifically, “any estimated item for any executive department.†Thus, it follows that City Council must consider each item of the budget, not propose an across-the-board tax cut.
The next consideration issue we considered is that once the 2021  proposed budget is submitted by the Mayor, can City Council call upon the Mayor to propose 3% in cuts from the general fund with specifically identifying the line items to be cut? (as Councilman Weaver proposed last night). It is our opinion that the Council cannot simply order the Mayor to make line item cuts without being specific.
As stated above, Indiana Code 36-4-7-7(a), in part, provides:
“The fiscal officer shall present the report of budget estimates to the city legislative body under IC 6-1.1-17. After reviewing the report, the legislative body shall prepare an ordinance fixing the rate of taxation for the ensuing budget year and an ordinance making appropriations for the estimated department budgets and other city purposes during the ensuing budget year. The legislative body, in the appropriation ordinance, may reduce any estimated item from the figure submitted in the report of the fiscal officer, but it may increase an item only if the executive recommends an increase. The legislative body shall promptly act on the appropriation ordinance.â€
The Indiana General Assembly has made it explicit that it the City Council’s duty to reduce any estimate item within the line item budget – the statute utilized the word “shall†to impose a duty upon the Common Council to prepare an ordinance for making appropriations, and by extension within that ordinance, to reduce any estimated item within the proposed line-item budget. However, the statute doesn’t allow the City Council to shift that duty to the Mayor. This is reinforced by the duties imposed upon City Council under Indiana Code 36-6-18:
  In interpreting Indiana Code 36-4-6-18, the Attorney General published several official opinions:
In short, if Councilman Weaver’s comments from last night that  Budget Amendment No 5 is intended to require the Mayor to make cuts totaling 3% to the General Fund without specifically listing the cuts, the City Council is attempting to shift its statutorily imposed duties (as reinforced by official Opinions of the Attorney General) to reduce line budget items by proposing that the Mayor make such cuts. This shifting of responsibility is without merit, and , as such, we believe Amendment No 5 is unenforceable.
Lastly, we believe 36-4-7-7(a) would prohibit the council from increasing the line item for Hospitalization without the consent of the Mayor.
Please let me know if you have any questions or require anything further in this regard
MARCO L. DELUCIO
