2016 -- H 7918

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LC005330

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO TOWNS AND CITIES - BUDGET COMMISSIONS

     

     Introduced By: Representatives Phillips, Morin, and Casey

     Date Introduced: March 10, 2016

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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

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Commissions" is hereby amended to read as follows:

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

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

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

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the city; and one of whom shall be a council member of the town or city elected to serve on the

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budget commission as chosen by a majority vote of said town or city council. In cities or towns in

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which the elected chief executive officer for purposes of this chapter is the president of the city or

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town council, one member shall be the appointed city or town manager or town administrator (or,

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if none, the city or town chief financial officer) as the fifth member. For a fire district, it shall

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

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

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and one shall be the fire chief of the district. The budget commission shall act by a majority vote

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

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appropriate measures to secure the financial stability of the city, town, or fire district. The budget

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

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

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

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chapter 46 of title 42 "Open Meetings" when meeting to take action on the following matters:

 

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      (1) Levy and assessment of taxes;

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      (2) Rulemaking or suspension of rules;

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      (3) Adoption of a municipal or fire district budget;

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

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bargaining agreements; and

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

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

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

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

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under the city, town, or fire district charter.

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

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

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

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

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in whole or part.

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

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

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

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

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

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establishment, increase, or decrease of any appropriations and spending authority for all

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departments, budget commissions, committees, agencies or other units of the city, town, or fire

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district; provided, however, that notwithstanding §§ 16-2-9 and 16-2-18, this clause shall fully

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apply to the school department and all school spending purposes;

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

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departments;

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

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

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

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

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

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

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town's, or fire district's government;

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      (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

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

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

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

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

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

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employment held by other employees or officers of the city, town, or fire district; provided,

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

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

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

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fire, transfer, or alter the compensation or benefits of a city, town, or fire district employee except

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with the written approval of the budget commission; and provided, further, that the budget

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commission may delegate or otherwise assign these powers with the approval of the director of

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revenue;

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

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

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officials as provided by this chapter;

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

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

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

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

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employing such staff; provided, further, that the budget commission, with the approval of the

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director of revenue, shall have authority to set the compensation, terms, and conditions of

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employment of its own staff; provided, further, that the city, town, or fire district shall annually

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

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

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

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

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

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

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

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

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

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

 

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

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

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predecessor;

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

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

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

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fire district with the approval of the director of revenue;

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

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

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

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

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

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

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§ 42-35-3(b);

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

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

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such action or decision;

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

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the city, town, or fire district;

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

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

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section 5 of the constitution of the state, a budget commission is authorized to issue bonds, notes,

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or certificates of indebtedness to fund the deficit of a city, town, or fire district without regard to §

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45-12-22.4, to fund cash flow and to finance capital projects. Bonds, notes, or certificates of

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indebtedness issued under authority of this chapter shall be general obligation bonds backed by

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the full faith and credit and taxing power of the city, town, or fire district; provided, however, that

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the budget commission may pledge future distributions of state aid for the purpose of retiring

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such bonds, notes, or certificates of indebtedness. If any state aid is so pledged, the budget

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commission shall execute on behalf of the city, town, or fire district a trust agreement with a

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

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within the state, and any state aid so pledged shall be paid by the general treasurer directly to the

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trustee to be held in trust and applied to the payment of principal and interest on such bonds,

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notes, or certificates of indebtedness; any earnings derived from the investment of such pledged

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aid shall be applied as needed to the payment of that principal and interest and for trustee's fees

 

LC005330 - Page 4 of 6

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and related expenses, with any excess to be paid to the city, town, or fire district. Bonds, notes, or

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certificates of indebtedness authorized under authority of this chapter shall be executed on behalf

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of the city, town, or fire district by a member of the commission and, except as provided for in

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this chapter, may be subject to the provisions of chapter 12 of title 45 so far as apt, or may be

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subject to the provisions of any special bond act enacted authorizing the issuance of bonds of a

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city, town, or fire district so far as apt; provided, however, that any bonds or notes issued for

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

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aid as set forth in chapter 7 of title 16; and

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

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charter provision or ordinance that any elected official of the city, town, or fire district may

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exercise, acting separately or jointly; provided, however, that with respect to any such exercise of

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powers by the budget commission, the elected officials shall not rescind nor take any action

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

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exist.

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

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the state's basic education program under chapter 7 of title 16 in the amount determined by the

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budget commission. Said amount shall be advanced, subject to approval of the director of the

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department of revenue, notwithstanding any general or public law to the contrary. The director of

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the department of revenue shall provide notice of any advance payments to the fiscal advisors of

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the house and senate finance committees. The state general treasurer shall deduct the estimated

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cost to the state's general fund resulting from any advance payments.

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     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

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budget commissions.

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     This act would take effect upon passage.

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LC005330

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