Chapter 027
2010 -- S 2997 SUBSTITUTE A
Enacted 06/11/10
A N A C T
RELATING TO
CITIES AND TOWNS -- PROVIDING FINANCIAL STABILITY
Introduced By: Senator Daniel DaPonte
Date Introduced: June 09, 2010
It is enacted by the General
Assembly as follows:
SECTION 1. Sections 45-9-1, 45-9-2 and 45-9-3 of the General
Laws in Chapter 45-9
entitled "Budget Commissions" are hereby amended to
read as follows:
45-9-1.
Composition and powers. -- If the
general assembly at any time vests the
authority to impose taxes and the authority to spend money in
any town or city in a budget
commission, that commission shall consist of not less than five
(5) nor more than fifteen (15)
electors, of any qualifications and with any powers that the
general assembly may prescribe, to be
elected by the qualified electors of the town or city.
45-9-2.
Town approval for establishment. --
No budget commission shall be created for
a town, as distinguished from a city, unless the
electors of the town, in a regularly called financial
town meeting, notice of the proposition appearing in the
call for the meeting, by a majority vote
of those present and voting, vote to submit the
proposition to the electors of the town qualified to
vote upon any proposition to impose a tax or for the
expenditure of money, at the next regular
election of town officers, and unless the electors at the
election by a majority vote of those
present and voting approve the proposition.
45-9-3.
Budget and Review Commission. -- (a)
(1) Notwithstanding the provisions of
sections 45-9-1 and 45-9-2 or any other general or special
laws of the state or charter provisions,
the general assembly vests in the director of the state
department of revenue (hereinafter
"director") the
power to authorize, create, and establish a budget and review commission in any
town or city where the director finds that the town or
city's bond rating has been assigned by one
or more recognized rating agencies to a rating which is
below investment grade and there is an
imminent threat of default on any or all of its debt
obligations.
(2) Whereupon the
director of revenue shall authorize said budget and review
commission, to convene specifically to deal with the aforementioned
town or city, that shall
consist of the chief executive officer of the town or city;
the president of the town or city council;
three (3) public members from the affected municipality, at
least one of whom shall be qualified
by training or experience in the fields of finance or
accounting, to be appointed by the governor,
with the advice and consent of the senate; two (2)
ex-officio state officials who shall be the
director, or his or her designee from the department of
revenue; and one member of the public
finance management board to be appointed by the governor who,
in making his or her
appointment, shall give due consideration to the recommendation
of the chair of the public
finance management board, with the advice and consent of the senate.
(3) No one shall be
eligible for appointment unless he or she is a resident of this state.
(4) Where there is
no chief executive officer of the town or city, the vice president of the
town council or city council shall serve on the commission.
The director of the state department
of revenue shall serve as chair of the commission.
(5) The commission
may elect from among its members such other officers as they deem
necessary.
(6) Four (4) or more
members of the commission shall constitute a quorum and the vote
of a majority of said quorum at any meeting shall be
required for action. No vacancy in the
membership of the commission shall impair the right of a quorum
to exercise all of the rights and
perform all of the duties of the commission.
(7) Newly appointed
and qualified commission members of the municipality shall,
within six (6) weeks of their qualification or designation,
attend a training course that is
developed with commission approval and conducted by the chair
or his or her designee and shall
include instruction in the subject area of chapter 9 of this
title and chapters 46 of title 42, chapter
14 of title 36, and chapter 2 of title 38 of
and regulations.
(8) Public members
of the commission shall be removable by the governor pursuant to
section 36-1-7 for cause only, and removal solely for
partisan or personal reasons unrelated to
capacity or fitness for the office shall be unlawful.
(9) The powers of
the budget and review commission shall be to impose taxes and to
make appropriations for the expenditure of moneys, for the
purpose of adopting a budget and, for
the purpose of maintaining a balanced budget, the budget
and review commission shall make
reductions or suspensions in the appropriations to any or all
departments, offices or other
agencies of town or city government as will prevent a deficit
for the fiscal year. The budget and
review commission shall be subject to the open meetings and
open records law. The budget and
review commission shall remain in office until that time as
the chief executive officer of the town
or city and the town or city council petitions the
director of the state department of revenue to
disband the budget and review commission.
(b) (1) The budget and review commission shall commence its work by
examining the
financial and operating condition of the city or town and shall
also advise the chief executive
officer, city or town council and the fiscal officials of the
city or town on the formulation of
adequate budget and budgetary controls.
(2) Reporting
Requirements. - Within ninety (90) days of its being disbanded as
provided for in section 45-9-3(a)(9), the budget and review
commission shall approve and issue a
report detailing its findings and recommendations. This
report shall be submitted to the governor,
the speaker of the house of representatives, the
president of the senate, and the secretary of state
of its activities during that fiscal year. The report
shall provide: an operating statement
summarizing meetings or hearings held, subjects addressed,
decisions rendered, rules or
regulations promulgated, studies conducted, policies and plans
developed, approved, or modified,
and programs administered or initiated; a consolidated
financial statement of all funds received
and expended including the source of the funds, a listing
of any staff supported by these funds,
and a summary of any clerical, administrative or
technical support received; a summary of
performance during the course of its existence, including
accomplishments, shortcomings and
remedies; a synopsis of hearings, complaints, suspensions, or
other legal matters related to the
authority of the board; a summary of any training courses held
pursuant to section 45-9-3(a)(7); a
briefing on anticipated activities in the upcoming fiscal
year; and findings and recommendations
for improvements. The report shall be posted
electronically on the general assembly and the
secretary of state's websites as prescribed in section
42-20-8.2.
(3) The examination
and report shall be completed and published no sooner than three
(3) weeks after the formation
of the budget and review commission. The commission shall
exercise any of the powers set forth in this section only
after the examination and publication of
the commission's report.
45-9-1. Declaration of Policy and Legal Standard.
-- It shall be the policy of the state
to provide a mechanism for the state to work with cities
and towns undergoing financial distress
that threatens the fiscal well-being, public safety and
welfare of such cities and towns, or other
cities and towns or the state, with the state providing
varying levels of support and control
depending on the circumstances. The powers delegated by the
General Assembly in this chapter
shall be carried out having due regard for the needs of the
citizens of the state and of the city or
town, and in such a manner as will best preserve the
safety and welfare of citizens of the state and
their property, and the access of the state and its
municipalities to capital markets, all to the public
benefit and good.
45-9-2.
Definitions. -- As used in this chapter the
following words shall, unless the
context clearly requires otherwise, have the following
meanings:
(1) “Budget
commission”, means the budget and review commission established under
sections 45-9-5 and 45-9-6.
(2) “Charter”, means
the home rule charter or the legislative charter of any city or town.
(3) “Division of
municipal finance”, means the division of municipal finance in the
department of revenue or any successor department or agency.
(4) “Director of
revenue”, means the director of the department of revenue.
(5) “Elected chief
executive officer”, means in cities and towns having a popularly
elected chief executive officer, the popularly elected chief
executive officer, and in cities and
towns where there is no popularly elected chief executive
officer, the president of the city or town
council.
(6) “Fiscal
overseer”, means the financial overseer appointed under section 45-9-3.
(7) “General
Treasurer”, means the general treasurer of the state.
(8) “Municipal
budget”, means the fiscal year operating budget of the city or town,
inclusive of the school department budget and all other
departments.
(9) “Officer”, means
the chief administrative and financial officer appointed under
section 45-9-10 after abolition of a fiscal overseer or a
budget commission or a receiver in a city
or town.
(10) “Receiver”,
means the receiver appointed pursuant to sections 45-9-7 or 45-9-8.
(11) “School
committee”, means the school committee of the city or town, but shall not
mean or include a regional school district committee.
(12) “State Aid”,
means the funds made available to cities and towns:
(i)
As state aid pursuant to chapter 45-13 of the general laws, but specifically
excluding
reimbursements to cities and towns for the cost of state mandates
pursuant to section 45-13-9;
(ii) As school
operations aid provided for in sections 16-7-5 through 16-7-34.3 of the
general laws and as school housing aid pursuant to sections
16-7-35 through 16-7-47 of the
general laws, but subject to any pledge to bonds issued to
finance school projects by the Rhode
Island health and educational building
corporation;
(iii) In replacement
of motor vehicle and trailer excise taxes pursuant to chapter 44-34.1
of the general laws;
(iv)
From the public service corporation tax pursuant to chapter 44-13
of the general
laws;
(v) From the local
meal and beverage tax pursuant to section 44-18-18.1 of the general
laws and the hotel tax pursuant to section 44-18-36.1 of
the general laws; and
(vi)
Pursuant to all acts supplementing such chapters listed in
subdivisions (i) through (v)
above or pursuant to any other law hereafter enacted providing
for funds to municipalities in lieu
of, or in substitution for, or in addition to the funds
provided pursuant to acts supplementing such
chapters listed in subdivisions (i)
through (v);
45-9-3.
Appointment and duties of fiscal overseer. – (a)
Upon joint request by a city’s
or town’s elected chief executive officer and city or
town council, which request is approved by
the division of municipal finance and the auditor
general, or in absence of such a request, in the
event that the director of revenue, in consultation with
the auditor general, makes any two (2) or
more of the findings set forth in subsection (b), the
director of revenue may appoint a fiscal
overseer for the city or town to assess the ability of the
city or town government to manage the
city’s or town’s fiscal challenges.
(b) The director of
revenue may appoint a fiscal overseer if the director finds in his or her
sole discretion that any two (2) of the following events
have occurred which are of such a
magnitude that they threaten the fiscal well‑being of the
city or town, diminishing the city or
town’s ability to provide for the public safety or welfare
of the citizens of the city or town:
(1) The city or town
projects a deficit in the municipal budget in the current fiscal year
and again in the upcoming fiscal year;
(2) The city or town
has not filed its audits with the auditor general by the deadlines
required by law for two (2) successive fiscal years (not
including extensions authorized by the
auditor general);
(3) The city or town
has been downgraded by one of the nationally recognized statistical
rating organizations;
(4) The city or town
is otherwise unable to obtain access to credit markets on reasonable
terms in the sole judgment of the director of revenue.
(5) The city or town
does not promptly respond to requests made by the director of
revenue, or the auditor general, or the chairpersons of the
house and/or senate finance committees
for financial information and operating data necessary to
assess the fiscal condition of the city or
town in the sole judgment of the director of revenue.
(c) The director of
revenue may also appoint a fiscal overseer if a city or town fails to
comply with the requirements of sections 45-12-22.1 – 45‑12-22.5
of the general laws.
(d) The fiscal
overseer shall without limitation:
(1) Recommend to the
elected chief executive officer, city or town council and school
committee sound fiscal policies for implementation;
(2) Supervise all
financial services and activities;
(3) Advise the
assessors, director of finance, city or town treasurer, purchasing agent and
employees performing similar duties but with different titles;
(4) Provide
assistance in all matters related to municipal financial affairs;
(5) Assist in
development and preparation of the municipal budget, all department
budgets and spending plans;
(6) Review all
proposed contracts and obligations;
(7) Monitor the
expenditures of all funds;
(8) Approve the
annual or supplemental municipal budgets of the city or town and all of
its departments; and
(9) Report monthly to
the director of revenue, the auditor general, the governor and the
chairpersons of the house finance and senate finance committees on
the progress made towards
reducing the municipality’s deficit and otherwise attaining
fiscal stability.
(e) All department
budgets and requests for municipal budget transfers shall be submitted
to the fiscal overseer for review and approval.
(f) The city or town
shall annually appropriate amounts sufficient for the proper
administration of the fiscal overseer and staff, as determined in
writing by the division of
municipal finance. If the city or town fails to appropriate
such amounts, the division of municipal
finance 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 fiscal overseer
and staff.
(g) Within one
hundred twenty (120) days of being appointed by the director of revenue,
the fiscal overseer shall develop a three (3)‑year
operating and capital financial plan to achieve
fiscal stability in the city or town. The plan shall include
a preliminary analysis of the city’s or
town’s financial situation and the fiscal overseer’s initial
recommendations to immediately begin
to address the city’s or town’s operating and structural
deficits. The fiscal overseer shall have the
power to compel operational, performance or forensic
audits, or any other similar assessments.
The fiscal overseer shall have the power, at the
expense of the city or town, to employ, retain,
supervise such managerial, professional and clerical staff as
are necessary to carry out the
responsibility of fiscal overseer, subject to the approval of the
division of municipal finance;
provided, however, that the fiscal overseer shall not be
subject to chapter 37-2 of chapter 45-55 of
the general laws in employing such staff.
45-9-4. Approval of tax levy. – A
city or town which is subject to the jurisdiction of a
fiscal overseer, or a budget commission may not levy
property taxes or motor vehicle excise taxes
without prior approval of the division of municipal finance.
Before the city or town which is
subject to the jurisdiction of a fiscal overseer, or a budget
commission shall send out tax bills, the
city or town shall submit to the division of municipal
finance a copy of its adopted municipal
budget and such supporting revenue and expenditure
information as the division of municipal
finance shall prescribe for the succeeding fiscal year. The
adopted municipal budget and such
supporting revenue and expenditure information as the division
of municipal finance may
prescribe, shall be submitted to the division of municipal
finance no later than ten (10) days after
the adoption of the budget. The division of municipal
finance shall ascertain whether the budget
for that fiscal year contains reasonable revenues from
taxation and other sources to meet the
appropriations and other amounts required by law to be raised, and
the division of municipal
finance shall report its conclusion to the director of
revenue. If the director of revenue determines
that the municipal budget as presented does not contain
reasonable revenues from taxation and
other sources to meet appropriations and other amounts
required by law to be raised, the director
of revenue shall certify this determination in writing
and provide notice of the determination with
a copy of the certificate to the auditor general, the
governor and the chairpersons of the house and
senate finance committees; and notify the city or town that its
tax levy has not been approved and
that the city or town is not authorized to mail or
otherwise transmit tax bills to city or town
taxpayers. If the director of revenue has made the foregoing
determination, the city or town shall
prepare a revised budget for review and approval by the
director of revenue.
The city or town
shall submit the reports required by section 45-12-22.2 to the director of
revenue, the division of municipal finance, the auditor
general, the governor and the chairpersons
of the house and senate finance committees.
The director of
revenue may waive any reporting or filing requirements contained in this
section.
45-9-5.
Reports of fiscal overseer and appointment of budget and review
commission. – (a)
The fiscal overseer shall report in writing to the
division of municipal finance
if the fiscal overseer concludes that the city or town:
(1) Is unable to present a balanced
municipal budget; (2) Faces a fiscal crisis that poses an
imminent danger to the safety of the
citizens of the city or town or their property; (3) Will not
achieve fiscal stability without the
assistance of a budget commission; or (4) That the tax levy of
the fiscal year should not be
approved.
(b) If the fiscal
overseer believes, at any time, that a budget commission should be
appointed, the fiscal overseer may report that belief to the
division of municipal finance.
(c) If the fiscal
overseer reports to the division of municipal finance under subsections (a)
or (b), the director of revenue may immediately abolish
the fiscal overseer and appoint a budget
commission.
(d) A budget
commission shall have all of the powers and duties set forth in sections 45-
9-3 and 45-9-6.
(e) If a budget
commission has not been appointed and if the division of municipal
finance determines that the city or town has taken steps
necessary to achieve long‑term fiscal
sustainability and no longer requires active state oversight, the
director of revenue may abolish
the fiscal overseer.
(f) If the division
of municipal finance notifies the director of revenue in writing that the
city or town is unable to achieve a balanced municipal
budget, then the director of revenue shall
establish a budget commission.
(g) Upon joint
request by a city’s or town’s elected chief executive officer and city or
town council, which request is approved by the division of
municipal finance, the director of
revenue, in consultation with the auditor general, may
establish a budget commission for such
city or town.
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 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 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 the general laws, “Access to
Public Records,” and chapter 36-14 of the general
laws, “Code of Ethics”. The budget
commission shall be subject to chapter 42-46 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,
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 or chapter 45-55 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;
(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 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, 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 for in this
chapter, may be subject to the
provisions of chapter 45-12 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 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.
45-9-7.
Appointment of Receiver. – ( If the budget
commission established by section
45-9-5 concludes that its powers are insufficient to
restore fiscal stability to the city or town, it
shall so notify the director of revenue, and shall forward
to the director of revenue a statement of
the reasons why it has been unable to restore fiscal
stability to the city or town. Upon receipt of
such statement, the director of revenue shall terminate
the existence of the budget commission,
notwithstanding section 45-9-5, and the director of revenue shall
appoint a receiver for the city or
town for a period as the director of revenue may
determine. The director of revenue may, at any
time, and without cause, remove the receiver and appoint a
successor, or terminate the
receivership.
(b) The receiver
shall have the following powers:
(1) All powers of the
fiscal overseer and budget commission under sections 45-9-2 and
45-9-6. Such powers shall
remain through the period of any receivership;
(2) The power to
exercise any function or power of any municipal officer or employee,
board, authority or commission, whether elected or
otherwise relating to or impacting the fiscal
stability of the city or town including, without limitation,
school and zoning matters; and
(3) The power to file
a petition in the name of the city or town under Chapter 9 of Title
11 of the
(c) Upon the
appointment of a receiver, the receiver shall have the right to exercise the
powers of the elected officials under the general laws,
special laws and the city or town charter
and ordinances relating to or impacting the fiscal
stability of the city or town including, without
limitation, school and zoning matters; provided, further, that
the powers of the receiver shall be
superior to and supersede the powers of the elected officials
of the city or town shall continue to
be elected in accordance with the city or town charter,
and shall serve in an advisory capacity to
the receiver.
The director of
revenue shall determine the salary of the receiver, which salary shall be
payable by the city or town.
45-9-8. Appointment of receiver in a fiscal emergency. – In
the event the director of
revenue determines, in consultation with the auditor general,
that a city or town is facing a fiscal
emergency and that circumstances do not allow for appointment
of a fiscal overseer or a budget
commission prior to the appointment of a receiver, the director
of revenue may appoint a receiver
without having first appointed a fiscal overseer or a budget
commission.
45-9-9. Collective bargaining agreements.
– Notwithstanding chapter 28-7 of the
general laws or any other general or special law or any
charter or local ordinance to the contrary,
new collective bargaining agreements and any amendments
to new or existing collective
bargaining agreements (collectively, “collective bargaining
agreements”) entered into by the city
or town or the school department shall be subject to the
approval of the fiscal overseer, budget
commission or receiver if the fiscal overseer, budget commission
or receiver is in effect at the
time. No collective bargaining agreement shall be approved
under this section unless the fiscal
overseer, budget commission or receiver has participated in
the negotiation of the collective
bargaining agreement and provides written certification to the
director of revenue that after an
evaluation of all pertinent financial information reasonably
available, the city’s or town’s
financial resources and revenues are, and will continue to be,
adequate to support such collective
bargaining agreement without a detrimental impact on the
provision of municipal services. A
decision, by the fiscal overseer, budget commission or
receiver, to disapprove of a collective
bargaining agreement under this section shall be made in a
report to the parties; provided,
however, that the report shall specify the disapproved
portions of the agreement and the
supporting reasons for the disapproval. This section shall not
be construed to authorize a fiscal
overseer, a budget commission or a receiver under this chapter
to reject or alter any existing
collective bargaining agreement, unless by agreement, during the
term of such collective
bargaining agreement.
45-9-10.
Appointment of administration and finance officer upon abolition of fiscal
overseer, budget commission or receiver. – (a) Notwithstanding any
general or special law or
city or town ordinance to the contrary, this section shall
apply upon abolition of the fiscal
overseer or a budget commission or a receiver established
under this chapter, upon a
determination, in writing, by the director of revenue that the
financial condition of the city or
town has improved to a level such that a fiscal overseer,
a budget commission or a receiver is no
longer needed.
(b) For a period of
five (5) years after the abolition of a fiscal overseer, or a budget
commission or a receiver in any city or town, there shall be in
the city or town a department of
administration and finance which shall be responsible for the
overall budgetary and financial
administration of the city or town. The department shall be under
the direction and control of the
officer appointed pursuant to subsection (c) below. The
officer shall report to and be under the
charge and direction of the elected chief executive officer.
Nothing in this section shall abrogate
the powers and duties of the school committee under any
general or special law, except as
specifically provided in this section.
Whenever the term
“department of finance” or “finance department” appears in a general
or special law or an ordinance, regulation, contract or
other document with reference to the city or
town, it shall mean the department of administration and
finance of the city or town. Whenever
the term “chief financial officer”, “director of
finance”, “financial director” or “treasurer” appears
in a general or special law or an ordinance, regulation,
contract or other document with reference
to the city or town, it shall mean the officer of the
city or town.
(c) The elected chief
executive officer shall appoint the officer from a list of three (3)
names submitted by the division of municipal finance, for a
term of not more than five (5) years,
as provided in this subsection. The officer shall be
appointed solely on the basis of administrative
and executive qualifications and shall be a person
especially fitted by education, training and
experience to perform the duties of the office. The officer need
not be a resident of the city or
town or the state. In the event of a vacancy in the office
of officer the same process will be used.
(d) While the process
of appointing an officer under subsection (c) is proceeding, the
elected chief executive officer may appoint an acting officer.
(e) The appointment,
including an acting appointment, or removal of the
officer shall not
take effect until it has been approved in writing by the
division of municipal finance.
(f) The powers and
duties of the officer shall include the following:
(1) Coordinating,
administering and supervising all financial services and activities;
(2) Assisting in all
matters related to municipal financial affairs;
(3) Implementing and
maintaining uniform systems, controls and procedures for all
financial activities in all departments, boards, commissions,
agencies, offices or other units of city
or town government the operations of which have a
financial impact upon the general fund and
enterprise funds of the city or town, and including, but not
limited to, maintaining all financial
and accounting data and records;
(4) Implementing and
maintaining uniform financial data processing capabilities for all
departments, boards, commissions, agencies and offices;
(5) Supervising all
financial data processing activities;
(6) Implementing and
maintaining uniform budget guidelines and procedures within all
departments, boards, commissions, agencies, offices and other
units of city or town government;
(7) Assisting in the
development and preparation of all department, board, commission,
agency and office budgets and spending plans;
(8) Reviewing all
proposed contracts to which the city or town is party;
(9) Monitoring the
expenditure of all city or town funds, including periodic reporting by
and to appropriate agencies of the status of accounts;
(10) Reviewing the
spending plan for each department, board, commission, agency and
office; and
(11) Providing for
the allotment of funds on a periodic basis as provided for in this
chapter.
In all cases where
the duty is not expressly charged to any other department, board,
commission, agency or office, it shall be the duty of the
officer to promote, secure and preserve
the financial interests of the city or town.
(g) All department, board, commission, agency and office budgets and
requests for
budget transfers shall be submitted to the officer for
review and recommendation before
submission to the elected chief executive officer, city or town
council or school committee, as
appropriate. For each proposed appropriation order, lease or
contract arrangement for a term,
including more than one fiscal year, collective bargaining
agreement and with respect to any
proposed city or town council vote necessary to effectuate a
financial transfer, ordinance revision
or special legislation which may require the expenditure
of funds or otherwise financially obligate
the city or town for a period in excess of one year, or
with respect to a vote to authorize a
borrowing under a law other than sections 45-12-4.1, 45-12-4.2
or 45-12-4.3 of the general laws,
the officer shall, if it be the case, submit in writing
to the elected chief executive officer, city or
town council or school committee, as appropriate, a
certification that it is the officer’s
professional opinion, after an evaluation of all pertinent
financial information reasonably
available, that the city’s or town’s financial resources and
revenues are, and will continue to be,
adequate to support such proposed expenditures or obligations
without a detrimental impact on
the provision of municipal services. If the officer fails
to provide this certification within seven
(7) days after a request for
such certification from the elected chief executive officer, city or town
council or school committee, the appropriation order,
financial transfer, ordinance revision,
special legislation or borrowing authorization may
nonetheless be approved, but the absence of
the certification of the officer shall be expressly noted
in that order or vote.
(h) All departments,
officers, boards, commissions, agencies and other units of the city or
town, shall submit budget requests to the elected chief executive
officer upon the schedule and in
the form established by the officer.
(i)
Annually, not later than March 30, the officer shall submit a four (4)‑year financial
plan and a five (5)‑year capital plan to the city or
town council that includes all capital needs of
the city or town.
(j) The assessor,
treasurer, finance director, controller, director of information
technology, purchasing agent, director of human resources, labor
relations director and employees
performing similar duties but with different titles shall report
to and be under the direction of the
officer. The officer, with the approval of the elected chief
executive officer shall appoint all such
officers and employees. The elected chief executive officer
may also place other positions and
departments under the direction of the officer.
(k) The officer shall
not assume the duties or responsibilities of the treasurer or the
finance director and shall not hold an elective office and
shall devote the officer’s full-time and
attention to the officer’s duties.
(l) The city or town
shall annually appropriate amounts sufficient for the proper
administration of the department, as determined in writing by the
division of municipal finance.
If the city or town fails to appropriate such amounts,
the division of municipal finance shall direct
the general treasurer to deduct the necessary funds from
the city’s or town’s distribution of the
city’s or town’s state aid and shall expend those funds
directly for the benefit of the department.
(m) The officer shall
comply with all requests of the school department to provide any
information relating to the operation of the school department
held within the authority or control
of the officer as the result of the consolidation of
school and city or town business and financial
functions under sections 45-9-3 or 45-9-6. If the officer, or
any employee under the control of the
officer, refuses to provide such information or engages in
unreasonable delay, the school
department shall notify the division of municipal finance. The
division of municipal finance shall,
within a reasonable time, make a determination whether any
such information shall be provided
to the school department which shall be binding upon the
officer and the school department. The
division of municipal finance’s determination shall not be an
adjudicatory proceeding reviewable
under chapter 42-35 of the general laws. Nothing in this
subsection shall abrogate any of the other
powers or duties of the school committee under the general
laws.
45-9-11.
Expenditures in excess of appropriations prohibited. – (a) No
official of a
city or town which is subject to the jurisdiction of a
fiscal overseer, budget commission or
receiver, except in the case of an emergency involving the
health and safety of the people or the
people’s property declared by the city or town council, shall
knowingly expend or cause to be
expended in any fiscal year any sum in excess of that
official’s departmental or other
governmental unit’s appropriation duly made in accordance with the
law, nor commit the city or
town, nor cause it to be committed, to any obligation for
the future payment of money in excess
of that appropriation, with the exception of court
judgments.
(b) An official who
intentionally violates this section shall be personally liable to the city
or town for any amounts expended in excess of an
appropriation to the extent that the city or town
does not recover such amounts from the person or persons
to whom such amounts were paid and
shall not be indemnified by the city or town for any such
amounts. The superior court shall have
jurisdiction to adjudicate claims brought by the city or town, or
on the city’s or town’s behalf by a
budget commission established under this chapter, and to
order relief that the court finds
appropriate to prevent further violations of this section. A
violation of this section shall be
sufficient cause for removal.
(c) For the purposes
of this section, the word “official” shall mean a city or town
department head, permanent, temporary or acting, including the
superintendent of schools, and all
members of municipal boards, committees, including the school
committee, and commissions
which recommend, authorize or approve the expenditure of
funds, and the word “emergency”
shall mean a major disaster, including, but not limited to,
flood, drought, fire, hurricane,
earthquake, storm or other catastrophe, whether natural or
otherwise, which poses an unexpected
and immediate threat to the health and safety of persons
or property.
45-9-12.
Conflicts with other laws. – Notwithstanding any general or special
law to the
contrary, unless otherwise specified, the provisions of this
chapter shall supersede any conflicting
provisions of the city’s or town’s charter or local ordinance.
45-9-13.
Other state receivership laws inapplicable. – No
city or town shall be placed
into, or made subject to, either voluntarily, or
involuntarily, a judicial receivership proceeding.
45-9-14.
No state guarantee. – Nothing in this chapter shall be construed to
pledge the
credit and assets of the state to pay the obligations or
indebtedness, including, bonded
indebtedness, of any municipality.
45-9-15. Inconsistent provisions. –
Insofar as the provisions of this chapter are
inconsistent with the provisions of any charter or other laws or
ordinances, general, special, or
local, or of any rule or regulation of the state or any
municipality, the provisions of this chapter
are controlling.
45-9-16. Liberal construction. –
This chapter being necessary for the welfare of the
state and its inhabitants shall be liberally construed in
order to effectuate its purposes.
45-9-17. Severability. – The
provisions of this chapter are severable, and if any of its
provisions are held unconstitutional or invalid for any other
reason by any court of competent
jurisdiction, the decision of the court shall not affect or impair
any of the remaining provisions. In
carrying out the purposes and provisions of this chapter, all
steps shall be taken which are
necessary to meet constitutional requirements whether or not the
steps are required by this
chapter.
SECTION 2. Section 45-12-22.7 of the General Laws in Chapter
45-12 entitled
"Indebtedness of Towns
and Cities" is hereby amended to read as follows:
45-12-22.7.
Enforcement and remedies. -- In the event that a
municipality does not
comply with the requirements of this law the state auditor
general or the division or property
valuation of municipal finance through the director of
revenue may elect any or all of the
following remedies:
(1) Petition the
superior court for mandatory injunctive relief seeking compliance with
the provisions of this section. The superior court shall
make a finding of fact as to whether there
has been compliance with the provisions of this section.
As herein before stated, the approval or
disapproval of a plan shall be conclusive upon the court in
making its finding as to compliance.
(2) In the event a
municipality fails to provide a year-end deficit elimination plan under
section 45-12-22.3, such noncompliance shall allow for the
implementation of a financial budget
review commission pursuant to section 45-9-3 45-9-5.
(3) Withholding of
state aid. In the event that the state director of revenue with the
concurrence of the auditor general elect to withhold state aid,
said amounts shall be placed in a
special account within the general fund. At such time the
municipality comes into compliance
with the reporting requirements of this section, said
funds shall be released to the municipality by
order of the state director of revenue and state auditor
general.
SECTION 3. Chapter 45-12 of the General Laws entitled
“Indebtedness of Cities and
Towns” is hereby amended by
adding the following section:
45-12-32.
Inability to pay interest or principal of bonds, notes or certificates of
indebtedness; notice; certification to general treasurer; payment
by general treasurer. – (a)
If it appears to the
treasurer or finance director of a city, town or district, including a regional
school district, that the city, town or district is, or is
likely to be, unable to pay in whole or in part
the principal or interest, or both, on any of its bonds,
notes or certificates of indebtedness when
due, the treasurer or finance director shall forthwith
notify the city manager, town manager, town
administrator or mayor, the city council or town council, the
regional district school committee in
a regional school district, or the board of any other
type of district, of the inability or likely
inability. If the city manager, town manager, town
administrator, mayor, town council or city
council, committee or board, whether or not so notified,
finds upon investigation that the payment
cannot or is not likely to be made when due, he, she or they
shall certify the inability or likely
inability to the director of revenue. Upon receipt of the
certificate, the director of revenue shall
immediately investigate the circumstances and, if the director
finds that the city, town or district
is, or in the director’s opinion will be, unable to make
the payment when due, the director shall
forthwith certify the inability, the amount of the due or
overdue payment and the name of the
paying agent for the bonds, notes or certificates of
indebtedness to the general treasurer.
(b) Notwithstanding
any provision of general or special law or any rules or regulations
with respect to the timing of payment of state aid
payments, not later than three (3) days after
receipt of the certification from the director of revenue or
one business day prior to the date on
which the principal or interest, or both, becomes due,
whichever is later, the general treasurer
shall pay to the paying agent the amount of the due or
overdue payment certified to him/her to the
extent of the sums otherwise then payable and the sums
estimated to become payable during the
remainder of the fiscal year, from the treasury, to the city,
town or district.
(c) The amounts so
paid to the paying agent shall be in trust and shall be exempt from
being levied upon, taken, sequestered or applied for
any purpose other than paying principal or
interest, or both, on bonds, notes or certificates of
indebtedness of the city, town or district.
(d) Any amounts paid
by the general treasurer under the provisions of this section,
together with all costs accruing to the state as a result of
actions undertaken pursuant to this
section, including administrative costs as well as loss of
interest income, shall be charged against
the amounts otherwise payable or becoming payable from
the treasury to the city, town or district.
(e) For purposes of
this section, the sums otherwise payable from the treasury to a city or
town shall be the funds made available to cities
and towns:
(1) As state aid
pursuant to chapter 45-13 of the general laws, but specifically excluding
reimbursements to cities and towns for the cost of state mandates
pursuant to section 45-13-9;
(2) As school housing
aid pursuant to sections 16-7-35 through 16-7-47 of the general
laws, but subject to any pledge to bonds issued to finance
school projects by the
health and educational building corporation, and
specifically excluding school operations aid
provided for in sections 16-7-15 through 17-7-34.3 of the
general laws;
(3) In replacement of
motor vehicle and trailer excise taxes pursuant to chapter 44-34.1 of
the general laws;
(4) From the public
service corporation tax pursuant to chapter 44-13 of the general laws;
and
(5) From the local
meal and beverage tax pursuant to section 44-18-18.1 and the hotel tax
pursuant to section 44-18-36.1; and
(6) Pursuant to all
acts supplementing such chapters listed in subdivisions (1) through (5)
above or pursuant to any other law hereafter enacted
providing for funds to municipalities in lieu
of or in substitution for the funds provided pursuant to
acts supplementing such chapters listed in
(1) through (5).
SECTION 4. This act shall take effect upon passage and shall
apply retroactively to May
15, 2010.
Notwithstanding
sections 45-9-13 and any other provisions of this act, in order to ensure
an orderly transition, the superior court shall have
limited jurisdiction to ratify the actions taken
by a receiver prior to the date of enactment of this
legislation at the request of the director of
revenue, and to take such further actions as may be necessary
to ensure an orderly transition.
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LC02905/SUB A/3
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