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Mr. Duane McCarty <br /> Page 2 <br /> October 31, 1979 <br /> However, there are certain specific problems which <br /> may arise (and in other places have arisen) under the <br /> Charter language, including the following: <br /> 1. Section 7 . 05 requires a long term financial <br /> plan. The plan must be adopted after public hearing, apparently <br /> annually, by ordinance. The Charter does not indicate <br /> whether failure to include a capital project in the long <br /> term financial plan will prohibit the construction and <br /> financing of that project during the year pursuant to a bond <br /> election or special assessment proceedings, nor does it <br /> indicate whether the plan can be amended during the year. <br /> This problem could be a source of concern to your bond <br /> counsel and may need to be resolved by litigation if the <br /> situation arises. <br /> 2. Similarly, Section 7. 07 prohibits the incurring <br /> of any obligations of the City unless an appropriation has <br /> been made in the budget resolution and there is a sufficient <br /> unexpended balance. The Charter does not say that this <br /> prohibition is limited to obligations incurred in anticipation <br /> of collection of taxes or other ordinary revenues. Arguably, <br /> it could apply to obligations to be paid from bond proceeds, <br /> and unless bond proceeds are appropriated in the budget resolution <br /> itself, it might be contended that the Charter would be <br /> violated. If bond proceeds cannot be spent for the purpose <br /> for which they were voted or otherwise authorized, bond <br /> counsel would hesitate to approve the issuance of the bonds. <br /> While Section 7. 08 may provide the basis for supplementary <br /> capital appropriations, on the grounds the bond proceeds are <br /> "actual receipts [which] exceeds the estimate" , the conclusion <br /> is not self evident and would require careful research and <br /> analysis. <br /> 3. Under Section 5. 07 any ordinance or resolution <br /> may be subjected to referendum by petition " [p] rior to the <br /> date when an obligation or resolution takes effect" . If a <br /> bond election has been called and held and the bonds approved <br /> by the voters, the question arises whether a resolution to <br /> sell the bonds or to let a contract for the project to be <br /> funded from bond proceeds may be subjected to referendum. <br /> Unlike ordinances, most resolutions take effect immediately, <br /> and it may therefore be that the Charter provision would <br /> have no particular effect on such a resolution. On the <br /> other hand, it may be contended that a literal interpretation <br />