2011 -- H 6207
A N A C T
RELATING TO THE
Date Introduced: May 31, 2011
It is enacted by the General Assembly as follows:
SECTION 1. Article 5, Chapter 2 of Chapter 237 of the 1973 Public Laws entitled “An
Act to Incorporate the Town
5-2-6. Amendment to Promote Fiscal Responsibility.
fiscal responsibility and the promotion of property tax stabilization are goals which promote the
public health, safety and welfare of the town of
is the purpose of this amendment to establish a mechanism whereby the fiscal integrity of the
town’s property tax rate is promoted through the establishment of a systemic and disciplined
process for the prudent and planned utilization of revenues.
(b) Establishment of Budget Reserve Account.
The town council shall establish a budget reserve account within the general fund.
Funding of the reserve account shall commence no later than the first fiscal year following
repayment of the deficit reduction bond approved by the town council on June 8, 2010. Each year
following the repayment of the deficit reduction bond one percent (1%) of each year’s estimated
general revenue shall be directed into the budget reserve account until a balance equal to eight
percent (8%) of the fiscal year’s estimated general revenue within the general fund is achieved.
(c) Minimum Budget Reserve Balance Requirement.
Once the budget reserve account balance has reached eight percent (8%) of the fiscal
year’s estimated general revenues within the general fund, as required under subsection (b)
above, the budget reserve account, for any fiscal year, shall be maintained at a level of not less
than said eight percent (8%) of the actual general revenue within the general fund.
(d) Budget Reserve Account Use.
The town council, in an emergency as defined as a situation where immediate action is
required to preserve and protect the property, public welfare, peace, health or safety of the people
in the town and adequate prior action could not have been taken thereto or in the case of an
unexpected shortfall in general revenue, may upon an affirmative vote of five-sevenths (5/7) of its
full membership withdraw funds from the budget reserve account.
(e) Restoration of Funds to Budget Reserve Account.
In every fiscal year following the withdrawal of funds from the budget reserve account,
as permitted in subsection (d) herein, the town of
percent (2%) of that year’s estimated general revenue to the budget reserve account until the
budget reserve account’s balance equals eight percent (8%) of the fiscal year’s estimated general
revenue within the general fund.
SECTION 2. This act shall take effect upon passage.