2015 -- H 5200

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LC000080

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO TOWNS AND CITIES -- BUDGET COMMISSIONS

     Introduced By: Representatives Phillips, Morin, Casey, Melo, and Abney

     Date Introduced: January 21, 2015

     Referred To: House Finance

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

designees of the director of revenue; one of whom shall be the elected chief executive officer of

the city; and one of whom 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. 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 member. For a fire district, it shall

consist of five (5) members: three (3) of the members of the budget commission shall be

designees of the director of revenue; one shall be the chairperson of the district's governing body;

and one shall be the fire chief of the district. 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, town, or fire district. The budget

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

      The budget commission shall be subject to chapter 2 of title 36, "Access to Public

Records," and chapter 14 of title 36, "Code of Ethics". The budget commission shall be subject to

chapter 46 of title 42 "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 or fire district budget;

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

bargaining agreements; and

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

insufficient to restore fiscal stability to the city, town, or fire district.

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

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

under the city, town, or fire district charter.

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

authorization, transfer, or other municipal or fire district spending authority, shall take effect until

approved by the budget commission. The budget commission shall approve all appropriations,

borrowing authorizations, transfers, and other municipal or fire district spending authorizations,

in whole or part.

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

notwithstanding any city, town, or fire district charter provision, or local ordinance, or rule or

regulation to the contrary, the budget commission shall have the power to:

      (1) Amend, formulate, and execute the annual municipal or fire district budget and

supplemental municipal or fire district budgets of the city, town, or fire district, 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, town, or fire

district; provided, however, that notwithstanding §§ 16-2-9 and 16-2-18, 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,

town's, or fire district's government;

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

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      (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 or fire

district activity, otherwise within the authority of the city, town, or fire district;

      (8) Appoint, remove, supervise, and control all city, town, or fire district 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, town, or fire district; provided,

further, that the budget commission shall have the authority to exercise all powers otherwise

available to a municipality or fire district regarding contractual obligations during a fiscal

emergency; provided, further, that no city, town, or fire district employee or officer shall hire,

fire, transfer, or alter the compensation or benefits of a city, town, or fire district 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)(8) Alter or eliminate the compensation and/or benefits of elected officials of the city,

town, or fire district to reflect the fiscal emergency and changes in the responsibilities of the

officials as provided by this chapter;

      (10)(9) 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 2 of title 37 or chapter 55 of title 45 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, town, or fire district 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, town, or fire

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

to deduct the necessary funds from the city's, town's, or fire district's distribution of state aid and

shall expend those funds directly for the benefit of the budget commission;

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

boards, offices, or functions of the city, town, or fire district, 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

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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;

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

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

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

or fire district with the approval of the director of revenue;

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

city, town, or fire district with the approval of the director of revenue;

      (15)(14) 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)(15) Adopt rules and regulations governing the operation and administration of the

city, town, or fire district that permit the budget commission to effectively carry out this chapter

under § 42-35-3(b);

      (17)(16) Alter or rescind any action or decision of any municipal or fire district officer,

employee, board, authority, or commission within fourteen (14) days after receipt of notice of

such action or decision;

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

of the city, town, or fire district;

      (19)(18) 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, a budget commission is authorized to issue

bonds, notes, or certificates of indebtedness to fund the deficit of a city, town, or fire district

without regard to § 45-12-22.4, 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, town, or fire district;

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, town, or fire district 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

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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, town, or

fire district. Bonds, notes, or certificates of indebtedness authorized under authority of this

chapter shall be executed on behalf of the city, town, or fire district by a member of the

commission and, except as provided for in this chapter, may be subject to the provisions of

chapter 12 of title 45 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, town, or fire district 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 7 of title 16; and

      (20)(19) 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, town, or fire district 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 nor take any action

contrary to such action by the budget commission so long as the budget commission continues to

exist.

      (21)(20) 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 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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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TOWNS AND CITIES -- BUDGET COMMISSIONS

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     This act would eliminate personnel decisions from the enumeration of the powers of

budget commissions.

     This act would take effect upon passage.

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