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| ARTICLE 8 AS AMENDED |
RELATING TO MUNICIPALITIES
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| SECTION 1. Section 45-12-22.2 of the General laws in Chapter 45-12 entitled |
| "Indebtedness of Towns and Cities" is hereby amended to read as follows: |
| 45-12-22.2. Monitoring of financial operations – Corrective action. -- Subsections (a) |
| through (e)(h) below shall apply to cities and towns. |
| (a) The chief financial officer of each municipality and each school district within the |
| state shall continuously monitor financial operations by tracking actual versus budgeted revenue |
| and expense. |
| (b) The chief financial officer of the municipality shall submit a report on a monthly basis |
| to the municipality's chief executive officer, each member of the city or town council, and school |
| district committee certifying the status of the municipal budget from all fund sources, including |
| the school department budget from all fund sources, or regional school district budget from all |
| fund sources. The chief financial officer of the municipality shall also submit a quarterly report |
| on or before the 25th day of the month succeeding the end of each fiscal quarter budget-to-actual |
| financial information on or before the 25th day succeeding the last day of the sixth, ninth, and |
| twelfth month of each fiscal year to the division of municipal finance, the commissioner of |
| education, and the auditor general pursuant to the provisions outlined in subsection (d) certifying |
| the status of the municipal budget, including the school budget that has been certified by the |
| school department. Each quarterly report submitted must be signed by the chief executive officer, |
| chief financial officer, the superintendent of the school district, and chief financial officer for the |
| school district. The report has to be submitted to the city own council president and the school |
| committee chair. It is encouraged, but not required, to have the council president/school |
| committee chair sign the report. The chief financial officer of the school department or school |
| district shall certify the status of the school district's budget and shall assist in the preparation of |
| these reports. The monthly report and quarterly reports budget-to-actual financial information as |
| required in this section shall be in a format prescribed by the division of municipal finance, the |
| commissioner of education, and the state auditor general. The budget-to-actual financial |
| information and the monthly reports shall contain a statement as to whether any actual or |
| projected shortfalls in budget line items are expected to result in a year-end deficit; the projected |
| impact on year-end financial results, including all accruals and encumbrances; and how the |
| municipality and school district plans to address any such shortfalls. In the event that the school |
| reporting is not provided, then state education aid may be withheld pursuant to the provisions of § |
| 16-2-9.4(d). |
| (c) In order to facilitate electronic upload to the "Transparency Portal", as defined herein, |
| the chief financial officer of the municipality shall also submit, as part of the annual audited |
| financial statements of the municipality, a municipal-data report for the municipality’s general |
| fund containing content and in a format designated by the division of municipal finance and the |
| office of the auditor general. Such municipal-data report shall be included in the scope of the |
| annual audit and shall be included in the municipality’s financial statements as supplementary |
| information. |
| (d) All budget-to-actual financial information as required in subsection (b), municipal |
| data report as required in subsection (c), and reports required pursuant to the provisions of § 44- |
| 35-10 shall be submitted to the division of municipal finance through the use of the division’s |
| Transparency Portal, in the format required by the division of municipal finance, which will be |
| located on the division’s website. The division of municipal finance will create a finalized report |
| from all information submitted through the Transparency Portal ("Transparency Report"). The |
| division of municipal finance will submit the Transparency Report to the municipality to be |
| signed by the chief executive officer, chief financial officer, superintendent of the school district, |
| and chief financial officer for the school district. All signed Transparency Reports shall be posted |
| to the municipality’s website within ten (10) business days of receipt of such report. The |
| municipalities shall provide a copy of the signed Transparency Report to the commissioner of |
| education, the office of the auditor general, the municipality’s council president, and the school |
| committee chair. In addition, a copy of the signed Transparency Report, which has been |
| designated by the division of municipal finance for inclusion in the municipality's audited |
| financial statements, shall be provided by the municipality to its auditor. |
| (c)(e)If any of the quarterly reports budget-to-actual financial information required under |
| subsection (b) project a year-end deficit, the chief financial officer of the municipality shall |
| submit to the state division of municipal finance, the commissioner of education, and the auditor |
| general a corrective action plan, signed by the chief executive officer and chief financial officer, |
| on or before the last day of the month succeeding the close of the fiscal quarter in which budget- |
| to-actual financial information is required, which that provides for the avoidance of a year-end |
| deficit or structural deficit that could impact future years, and the school superintendent shall also |
| comply with the provisions of § 16-2-11(c) to assist in this effort. The plan may include |
| recommendations as to whether an increase in property taxes and/or spending cuts should be |
| adopted to eliminate the deficit. The plan shall include a legal opinion by municipal counsel that |
| the proposed actions under the plan are permissible under federal, state, and local law. The state |
| division of municipal affairs may rely on the written representations made by the municipality in |
| the plan and will not be required to perform an audit. |
| (d)(f) If the division of municipal finance concludes the plan required hereunder is |
| insufficient and/or fails to adequately address the financial condition of the municipality, the |
| division of municipal finance can elect to pursue the remedies identified in § 45-12-22.7. |
| (e)(g) The monthly reports and budget-to-actual financial information required shall |
| include the financial operations of any departments or funds of municipal government, including |
| the school department or the regional school district, notwithstanding the status of the entity as a |
| separate legal body. This provision does not eliminate the additional requirements placed on local |
| and regional school districts by §§ 16-2-9(f) and 16-3-11(e)(3). |
| (h) The "Transparency Portal" shall be an electronic interface that will be implemented, |
| maintained, and monitored by the state division of municipal finance with the assistance of the |
| state department of administration. In addition, the division of municipal finance shall post to its |
| website a list of participating and non-participating entities for each reporting cycle identified |
| under subsections (b), (c), and required reports pursuant to § 44-35-10. |
| Subsections (f)(i) through (j)(m) below shall apply to fire districts. |
| (f)(i) The treasurer/chief financial officer or other fiduciary, as applicable, of the fire |
| district within the state shall continuously monitor the fire district's financial operations by |
| tracking actual versus budgeted revenue and expense. |
| (g)(j) The treasurer/chief financial officer or other fiduciary, as applicable, of the fire |
| district shall submit a quarterly report on or before the 25th day of the month succeeding the end |
| of each fiscal quarter to the division of municipal finance and the state auditor general certifying |
| the status of the fire district's budget. Each quarterly report submitted must be signed by the chair |
| of the governing body and the treasurer/chief financial officer. The report shall be submitted to |
| the members of the governing body and the members of the town council. The quarterly reports |
| shall be in a format prescribed by the division of municipal finance and the state auditor general. |
| The reports shall contain a statement as to whether any actual or projected shortfalls in budget |
| line items are expected to result in a year-end deficit; the projected impact on year-end financial |
| results including all accruals and encumbrances; and how the fire district plans to address any |
| such shortfalls. |
| (h)(k) If any of the quarterly reports required under subsection (g)(j) above project a |
| year-end deficit, the treasurer/chief financial officer or other fiduciary, as applicable, of the fire |
| district shall submit to the division of municipal finance and the state auditor general a corrective |
| action plan signed by the chair of the governing body and treasurer/chief financial officer, or |
| other fiduciary as applicable, of the fire district on or before the last day of the month succeeding |
| the close of the fiscal quarter, which that provides for the avoidance of a year-end deficit or |
| structural deficit that could impact future years. The plan may include recommendations as to |
| whether an increase in property taxes and/or spending cuts should be adopted to eliminate the |
| deficit. The plan shall include a legal opinion by legal counsel that the proposed actions under the |
| plan are permissible under federal, state, and local law. Said plan shall be sent to the members of |
| the fire district's governing body and the members of the town council. The division of municipal |
| finance may rely on the written representations made by the governing body of the fire district in |
| the plan and is will not be required to perform an audit. |
| (i)(l) If the division of municipal finance concludes the plan required hereunder is |
| insufficient and/or fails to adequately address the financial condition of the fire district, the |
| division of municipal finance can elect to pursue the remedies identified in § 45-12-22.7. |
| (j)(m) The reports and plans required above shall also include, but not be limited to, a |
| comprehensive overview of the financial operations of the fire district, including a list of the |
| value of the fire district's assets (tangibles and intangibles) and liabilities. |
| SECTION 2. Section 44-35-10 of the General laws in Chapter 44-35 entitled "Property |
| Tax and Fiscal Disclosure – Municipal Budgets" is hereby amended to read as follows: |
| 44-35-10. Balanced municipal budgets – Additional reporting requirements – |
| Electronic reporting/municipal uniform chart of accounts. -- (a) The operating budgets for all |
| cities and towns shall provide for total appropriations which that do not exceed total estimated |
| receipts, taking into account any general fund surplus or deficit estimated to be carried over from |
| the current fiscal year. The funding of accumulated deficits shall be consistent with the provisions |
| of § 45-12-22. |
| (b) The chief elected official in each city and town shall provide to the division of |
| municipal finance within thirty (30) days of final action, in the form and format required by the |
| division, the adopted budget survey. |
| (c) Within thirty (30) days of final action as referenced in subsection (b) above each city |
| or town shall provide to the division a five- (5) year (5) forecast, in the form and format required |
| by the division, for major funds as defined by generally accepted accounting principles as |
| established by the governmental accounting standards board (GASB). The forecast shall include, |
| but not be limited to, a scenario reflecting pensions and post employment Benefits other than |
| pensions (OPEB) obligations at one hundred percent (100%) of the annual required contribution |
| (ARC), both for the general and unrestricted school funds. The forecast shall also reflect any and |
| all underlying assumptions. |
| (d) The reports required under subsections (b) and (c) shall be submitted in accordance |
| with the requirements outlined under § 45-12-22.2 (d). |
| (d)(e) Within sixty (60) days of executing changes in healthcare benefits, pension |
| benefits, and OPEB, a municipality shall provide a fiscal impact statement to the division of |
| municipal finance, reflecting the impact on any unfunded liability and annual required |
| contribution (ARC), as well as the impact on the five- (5) year (5) forecast. The fiscal impact |
| statements shall show underlying actuarial assumptions and provide support for underlying |
| assumptions. |
| (e)(f) A municipality shall join electronic reporting/implement municipal uniform chart |
| of accounts (UCOA), within six (6) months of implementation. |
| SECTION 3. Section 42-142-4 of the General laws in Chapter 42-142 entitled |
| "Department of Revenue" is hereby amended to read as follows: |
| 42-142-4. Division of property valuation and municipal finance. -- (a) There is hereby |
| established within the department of revenue a division of property valuation and municipal |
| finance. The head of the office shall be the chief of property valuation and municipal finance. |
| (b) The division of property valuation and municipal finance shall have the following |
| duties: |
| (i) Provide assistance and guidance to municipalities in complying with state law; |
| (ii) To eEncourage cooperation between municipalities and the state in calculating, |
| evaluating, and distributing state aid; |
| (iii) To maintain a data center of information of use to municipalities; Encourage the |
| exchange of information between the division and other governmental entities in an effort to |
| increase shared services by making available, through the use of web-based applications or other |
| mediums, municipal vendor contracts and/or any other data the division deems appropriate; |
| (iv) To mMaintain and compute financial and equalized property value information for |
| the benefit of municipalities and public policy decision makers; |
| (v) To eEncourage and assure compliance with state laws and policies relating to |
| municipalities, especially in the areas of public disclosure, tax levies, financial reporting, and |
| property tax issues; |
| (vi) To eEncourage cooperation between municipalities and the state by distributing |
| information and by providing technical assistance to municipalities; |
| (vii) To gGive guidance to public decision makers on the equitable distribution of state |
| aid to municipalities; and |
| (viii) To pProvide technical assistance for property tax administration. |
| SECTION 4. Section 45-13-12 of the General Laws in Chapter 45-13 entitled "State Aid" |
| is hereby amended to read as follows: |
| 45-13-12. Distressed communities relief fund. -- (a) There is established a fund to |
| provide state assistance to those Rhode Island cities and towns which that have the highest |
| property tax burdens relative to the wealth of taxpayers. |
| (b) Establishment of indices. Four (4) indices of distress shall be established to determine |
| eligibility for the program. Each community shall be ranked by each distress index and any |
| community which that falls into the lowest twenty percent (20%) of at least three (3) of the four |
| (4) indices shall be eligible to receive assistance. The four (4) indices are established as follows: |
| (1) Percent of tax levy to full value of property. This shall be computed by dividing the |
| tax levy of each municipality by the full value of property for each municipality. For the 1990-91 |
| fiscal year, tax levy and full value shall be as of the assessment date December 31, 1986. |
| (2) Per capita income. This shall be the most recent estimate reported by the U.S. |
| Department of Commerce, Bureau of the Census. |
| (3) Percent of personal income to full value of property. This shall be computed by |
| multiplying the per capita income above by the most recent population estimate as reported by the |
| U.S. Department of Commerce, Bureau of the Census, and dividing the result by the full value of |
| property. |
| (4) Per capita full value of property. This shall be the full value of property divided by |
| the most recent estimate of population by the U.S. Department of Commerce, Bureau of the |
| Census. |
| (c) Distribution of funds. Funds shall be distributed to each eligible community on the |
| basis of the community's tax levy relative to the total tax levy of all eligible communities. For the |
| fiscal year 1990-91, the reference year for the tax levy shall be the assessment date of December |
| 31, 1988. For each fiscal year thereafter, except for fiscal year 2007-2008, the reference year and |
| the fiscal year shall bear the same relationship. For the fiscal year 2007-2008, the reference year |
| shall be the same as for the distributions made in fiscal year 2006-2007. |
| Any newly qualifying community shall be paid fifty percent (50%) of current law |
| requirements the first year it qualifies. The remaining fifty percent (50%) shall be distributed to |
| the other distressed communities proportionately. When any community falls out of the distressed |
| community program, it shall receive a one-time payment of fifty percent (50%) of the prior year |
| requirement exclusive of any reduction for first-year qualification; however, in the event that the |
| total appropriation is increased from the prior year's appropriation, each eligible community shall |
| receive: (1) A distribution based on the community's tax levy relative to the total tax levy of all |
| eligible communities; and (2) A percentage of the amount of said increased appropriation which |
| percentage shall be calculated based on a community's distribution relative to the total increase in |
| the appropriation. The community shall be considered a distressed community in the fall-out |
| year. |
| (d) Appropriation of funds. The state of Rhode Island shall appropriate funds in the |
| annual appropriations act to support this program. For each of the fiscal years ending June 30, |
| 2011, June 30, 2012, and June 30, 2013, seven hundred eighty-four thousand four hundred fifty- |
| eight dollars ($784,458) of the total appropriation shall be distributed equally to each qualifying |
| distressed community. |
| (e) Payments. Payments shall be made to eligible communities each August. |
| (f) Mandatory participation for collection of debts. Any community determined to be a |
| distressed community under this chapter shall, within three (3) months of said determination, |
| contract with the tax administrator, in accordance with § 42-142-7, to allow the tax administrator |
| to collect outstanding liabilities owed to the distressed community. The division of municipal |
| finance shall determine which of said liabilities shall be subject to the collection by the tax |
| administrator. |
| SECTION 5. This article shall take effect upon passage. |