2014 -- H 7943

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LC005184

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO TOWNS AND CITIES - BUDGET COMMISSION

     Introduced By: Representatives Casey, Morin, Phillips, DeSimone, and Costantino

     Date Introduced: March 13, 2014

     Referred To: House Municipal Government

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 45-9-6 of the General Laws in Chapter 45-9 entitled "Budget

Commissions" is hereby amended to read as follows:

     45-9-6. Composition of budget commission. -- (a) If a budget commission is established

under section §§45-9-5 or section 45-12-22.7, it shall consist of five (5) members: three (3) of

whom who shall be designees of the director of revenue,; one of whom who shall be the elected

chief executive officer of the city; and one of whom who shall be a council member of the town

or city elected to serve on the budget commission as chosen by a majority vote of said town or

city council the president of the city or town council. In cities or towns in which the elected chief

executive officer for purposes of this chapter is the president of the city or town council, one

member shall be the appointed city or town manager or town administrator (or, if none, the city or

town chief financial officer) as the fifth (5th) member. The budget commission shall act by a

majority vote of all its members. The budget commission shall initiate and assure the

implementation of appropriate measures to secure the financial stability of the city or town. The

budget commission shall continue in existence until the director of revenue abolishes it.

      The budget commission shall be subject to chapter 36-2 of title 36 of the general laws,

"Access to Public Records," and chapter 36-14 of title 36 of the general laws, "Code of Ethics".

The budget commission shall be subject to chapter 42-46 of title 42 of the general laws "Open

Meetings" when meeting to take action on the following matters:

      (1) Levy and assessment of taxes;

      (2) Rulemaking or suspension of rules;

      (3) Adoption of a municipal budget;

      (4) Approval of collective bargaining agreements and amendments to collective

bargaining agreements; and

      (5) Making a determination under section §45-9-7 that the powers of the budget

commission are insufficient to restore fiscal stability to the city or town.

      (b) Action by the budget commission under this chapter shall constitute action by the

city or town for all purposes under the general laws, under any special law, and under the city or

town charter.

      (c) Until the budget commission ceases to exist, no appropriation, borrowing

authorization, transfer, or other municipal spending authority shall take effect until approved by

the budget commission. The budget commission shall approve all appropriations, borrowing

authorizations, transfers, and other municipal spending authorizations, in whole or part.

      (d) In addition to the authority and powers conferred elsewhere in this chapter, and

notwithstanding any city or town charter provision or local ordinance to the contrary, the budget

commission shall have the power to:

      (1) Amend, formulate, and execute the annual municipal budget and supplemental

municipal budgets of the city or town, including the establishment, increase, or decrease of any

appropriations and spending authority for all departments, budget commissions, committees,

agencies, or other units of the city or town; provided, however, that notwithstanding sections

§§16-2-9 and 16-2-18 of the general laws, this clause shall fully apply to the school department

and all school spending purposes;

      (2) Implement and maintain uniform budget guidelines and procedures for all

departments;

      (3) Amend, formulate, and execute capital budgets, including to amend any borrowing

authorization, or finance, or refinance any debt in accordance with the law;

      (4) Amortize operational deficits in an amount as the director of revenue approves and

for a term not longer than five (5) years;

      (5) Develop and maintain a uniform system for all financial planning and operations in

all departments, offices, boards, commissions, committees, agencies, or other units of the city's or

town's government;

      (6) Review and approve or disapprove all proposed contracts for goods or services;

      (7) Notwithstanding any general or special law to the contrary, establish, increase, or

decrease any fee, rate, or charge, for any service, license, permit, or other municipal activity,

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otherwise within the authority of the city or town;

      (8) Appoint, remove, supervise, and control all city and town employees and have

control over all personnel matters other than disciplinary matters; provided, that the budget

commission shall hold all existing powers to hire and fire and set the terms and conditions of

employment held by other employees or officers of the city or town; provided, further, that the

budget commission shall have the authority to exercise all powers otherwise available to a

municipality regarding contractual obligations during a fiscal emergency; provided, further, that

no city or town employee or officer shall hire, fire, transfer, or alter the compensation or benefits

of a city or town employee except with the written approval of the budget commission; and

provided, further, that the budget commission may delegate or otherwise assign these powers

with the approval of the director of revenue;

      (9) Alter or eliminate the compensation and/or benefits of elected officials of the city or

town to reflect the fiscal emergency and changes in the responsibilities of the officials as

provided by this chapter;

      (10) Employ, retain and supervise such managerial, professional and clerical staff as are

necessary to carry out its responsibilities; provided, however, that such employment, retention

and supervisory decisions are subject to the approval of the director of revenue; provided, further,

that the budget commission shall not be subject to chapter 37-2 of title 37 or chapter 45-55 of title

45 of the general laws in employing such staff; provided, further, that the budget commission,

with the approval of the director of revenue, shall have authority to set the compensation, terms,

and conditions of employment of its own staff; provided, further, that the city or town shall

annually appropriate amounts sufficient for the compensation of personnel hired under this clause

as determined and fixed by the budget commission; provided, further, that if the city or town fails

to appropriate such amounts, the director of revenue shall direct the general treasurer to deduct

the necessary funds from the city's or town's distribution of state aid and shall expend those funds

directly for the benefit of the budget commission;

      (11) Reorganize, consolidate, or abolish departments, commissions, authorities, boards,

offices, or functions of the city or town, in whole or in part, and to establish such new

departments, commissions, authorities, boards, offices, or functions as it deems necessary, and to

transfer the duties, powers, functions, and appropriations of one department, commission, board,

office, or other unit to another department, commission, authority, board, or office and in

connection therewith remove and appoint new members for any such commission, authority,

board, or department which appointees shall serve the remainder of any unexpired term of their

predecessor;

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      (12) Appoint, in consultation with the director of revenue, persons to fill vacancies on

any authority, board, committee, department, or office;

      (13) Sell, lease, or otherwise transfer real property and other assets of the city or town

with the approval of the director of revenue;

      (14) Purchase, lease, or otherwise acquire property or other assets on behalf of the city or

town with the approval of the director of revenue;

      (15) Enter into contracts, including, but not limited to, contracts with other governmental

entities, and such other governmental entities are hereby authorized to enter into such contracts;

      (16) Adopt rules and regulations governing the operation and administration of the city

or town which that permit the budget commission to effectively carry out this chapter under

subsection §42-35-3(b) of the general laws;

      (17) Alter or rescind any action or decision of any municipal officer, employee, board,

authority, or commission within fourteen (14) days after receipt of notice of such action or

decision;

      (18) Suspend, in consultation with the director of revenue, any rules and regulations of

the city or town;

      (19) Notwithstanding any other general law, special act, charter provision, or ordinance,

and in conformity with the reserved powers of the general assembly pursuant to Article XIII,

section 5 of the Constitution of the state, R.I. Const., Art.XIII,Sec.5 a budget commission is

authorized to issue bonds, notes, or certificates of indebtedness to fund the deficit of a city or

town without regard to section §45-12-22.4 of the general laws, to fund cash flow, and to finance

capital projects. Bonds, notes, or certificates of indebtedness issued under authority of this

chapter shall be general obligation bonds backed by the full faith and credit and taxing power of

the city or town; provided, however, that the budget commission may pledge future distributions

of state aid for the purpose of retiring such bonds, notes, or certificates of indebtedness. If any

state aid is so pledged, the budget commission shall execute, on behalf of the city or town, a trust

agreement with a corporate trustee, which may be any bank or trust company having the powers

of a trust company within the state, and any state aid so pledged shall be paid by the general

treasurer directly to the trustee to be held in trust and applied to the payment of principal and

interest on such bonds, notes, or certificates of indebtedness; any earnings derived from the

investment of such pledged aid shall be applied as needed to the payment of that principal and

interest and for trustee's fees and related expenses, with any excess to be paid to the city or town.

Bonds, notes, or certificates of indebtedness authorized under authority of this chapter shall be

executed on behalf of the city or town by a member of the commission and, except as provided

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for in this chapter, may be subject to the provisions of chapter 45-12 of title 45 of the general

laws so far as apt, or may be subject to the provisions of any special bond act enacted authorizing

the issuance of bonds of a city or town so far as apt, provided, however that any bonds or notes

issued for school purposes must be approved by the general assembly in order to qualify for

school housing aid as set forth in chapter 16-7 of title 16 of the general laws; and

      (20) Exercise all powers under the general laws and this chapter or any special act, any

charter provision or ordinance that any elected official of the city or town may exercise, acting

separately or jointly; provided, however, that with respect to any such exercise of powers by the

budget commission, the elected officials shall not rescind or take any action contrary to such

action by the budget commission so long as the budget commission continues to exist.

      (21) Certify to the Rhode Island department of revenue the need to advance payments of

the state's basic education program under chapter 7 of title 16 of the Rhode Island general laws in

the amount determined by the budget commission. Said amount shall be advanced, subject to

approval of the director of the department of revenue, notwithstanding any general or public law

to the contrary. The director of the department of revenue shall provide notice of any advance

payments to the fiscal advisors of the house and senate finance committees. The state general

treasurer shall deduct the estimated cost to the state's general fund resulting from any advance

payments.

     SECTION 2. This act shall take effect upon passage.

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LC005184

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TOWNS AND CITIES - BUDGET COMMISSION

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     This act would provide for a member of a town or city council to be elected to serve on a

budget commission.

     This act would take effect upon passage.

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LC005184

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