2013 -- S 0984 SUBSTITUTE A

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LC02714/SUB A

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO TOWNS AND CITIES - BUDGET COMMISSIONS

     Introduced By: Senators DaPonte, Conley, Picard, and Cote

     Date Introduced: June 05, 2013

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 45-9-10 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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     45-9-10. Appointment of administration and finance officer upon abolition of fiscal

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overseer, budget commission or receiver. -- Appointment of administration and finance

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officer upon abolition of receiver where petition filed under Chapter 9 of Title 11 of the

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United States Code. -- (a) Notwithstanding any general or special law or city or town ordinance

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to the contrary, this section shall apply upon abolition of the fiscal overseer or a budget

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commission or a receiver established under this chapter, where petition was filed under Chapter 9

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of Title 11 of the United States Code, upon a determination, in writing, by the director of revenue

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that the financial condition of the city or town has improved to a level such that a fiscal overseer,

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a budget commission or a receiver is no longer needed.

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      (b) For a period of five (5) years after the abolition of a fiscal overseer, or a budget

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commission or a receiver in any such city or town, there shall be in the city or town a department

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of administration and finance which shall be responsible for the overall budgetary and financial

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administration of the city or town. The department shall be under the direction and control of the

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officer appointed pursuant to subsection (c) below. The officer shall report to and be under the

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charge and direction of the elected chief executive officer, or in the case of a municipality without

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an elected chief executive officer, then the city or town council. Nothing in this section shall

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abrogate the powers and duties of the school committee under any general or special law, except

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as specifically provided in this section.

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      Whenever the term "department of finance" or "finance department" appears in a general

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or special law or an ordinance, regulation, contract or other document with reference to the city or

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town, it shall mean the department of administration and finance of the city or town. Whenever

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the term "chief financial officer", "director of finance", "financial director" or "treasurer" appears

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in a general or special law or an ordinance, regulation, contract or other document with reference

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to the city or town, it shall mean the officer of the city or town.

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      (c) The elected chief executive officer, or in the case of a municipality without an elected

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chief executive officer, then the city or town council shall appoint the officer from a list of three

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(3) names submitted by the division of municipal finance, for a term of not more than five (5)

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years, as provided in this subsection. The officer shall be an employee of the city or town who

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shall be appointed solely on the basis of administrative and executive qualifications and shall be a

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person especially fitted by education, training and experience to perform the duties of the office.

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The officer need not be a resident of the city or town or the state. In the event of a vacancy in the

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office of officer the same process will be used.

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      (d) While the process of appointing an officer under subsection (c) is proceeding, the

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elected chief executive officer, or in the case of a municipality without an elected chief executive

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officer, then the city or town council may appoint an acting officer.

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      (e) The appointment, including an acting appointment, or removal of the officer shall not

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take effect until it has been approved in writing by the division of municipal finance.

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      (f) The powers and duties of the officer shall include the following:

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      (1) Coordinating, administering and supervising all financial services and activities;

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      (2) Assisting in all matters related to municipal financial affairs;

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      (3) Implementing and maintaining uniform systems, controls and procedures for all

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financial activities in all departments, boards, commissions, agencies, offices or other units of city

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or town government the operations of which have a financial impact upon the general fund and

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enterprise funds of the city or town, and including, but not limited to, maintaining all financial

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and accounting data and records;

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      (4) Implementing and maintaining uniform financial data processing capabilities for all

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departments, boards, commissions, agencies and offices;

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      (5) Supervising all financial data processing activities;

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      (6) Implementing and maintaining uniform budget guidelines and procedures within all

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departments, boards, commissions, agencies, offices and other units of city or town government;

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      (7) Assisting in the development and preparation of all department, board, commission,

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agency and office budgets and spending plans;

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      (8) Reviewing all proposed contracts to which the city or town is party;

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      (9) Monitoring the expenditure of all city or town funds, including periodic reporting by

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and to appropriate agencies of the status of accounts;

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      (10) Reviewing the spending plan for each department, board, commission, agency and

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office; and

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      (11) Providing for the allotment of funds on a periodic basis as provided for in this

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chapter.

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      In all cases where the duty is not expressly charged to any other department, board,

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commission, agency or office, it shall be the duty of the officer to promote, secure and preserve

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the financial interests of the city or town.

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      (g) All department, board, commission, agency and office budgets and requests for

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budget transfers shall be submitted to the officer for review and recommendation before

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submission to the elected chief executive officer, city or town council or school committee, as

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appropriate. For each proposed appropriation order, lease or contract arrangement for a term,

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including more than one fiscal year, collective bargaining agreement and with respect to any

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proposed city or town council vote necessary to effectuate a financial transfer, ordinance revision

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or special legislation which may require the expenditure of funds or otherwise financially obligate

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the city or town for a period in excess of one year, or with respect to a vote to authorize a

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borrowing under a law other than sections 45-12-4.1, 45-12-4.2 or 45-12-4.3 of the general laws,

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the officer shall, if it be the case, submit in writing to the elected chief executive officer, city or

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town council or school committee, as appropriate, a certification that it is the officer's

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professional opinion, after an evaluation of all pertinent financial information reasonably

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available, that the city's or town's financial resources and revenues are, and will continue to be,

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adequate to support such proposed expenditures or obligations without a detrimental impact on

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the provision of municipal services. If the officer fails to provide this certification within seven

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(7) days after a request for such certification from the elected chief executive officer, city or town

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council or school committee, the appropriation order, financial transfer, ordinance revision,

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special legislation or borrowing authorization may nonetheless be approved, but the absence of

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the certification of the officer shall be expressly noted in that order or vote.

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      (h) All departments, officers, boards, commissions, agencies and other units of the city

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or town, shall submit budget requests to the elected chief executive officer, or appropriate

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authority under applicable charter and ordinance provisions, upon the schedule and in the form

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established by the officer.

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      (i) Annually, not later than March 30 ninety (90) days prior to the beginning of the

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municipality's fiscal year, the officer shall submit a four (4)-year financial plan and a five (5)-year

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capital plan to the city or town council that includes all capital needs of the city or town.

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      (j) The assessor, treasurer, finance director, controller, director of information

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technology, purchasing agent, director of human resources, labor relations director and employees

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performing similar duties but with different titles shall report to and be under the direction of the

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officer. The officer, with the approval of the elected chief executive officer or appropriate

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authority under applicable charter and ordinance provisions, shall appoint all such officers and

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employees. The elected chief executive officer, or in the case of a municipality without an elected

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chief executive officer, then the city or town council may also place other positions and

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departments under the direction of the officer.

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      (k) The officer shall not assume the duties or responsibilities of the treasurer or the

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finance director and shall not hold an elective office and shall devote the officer's full-time and

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attention to the officer's duties.

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      (l) The city or town shall annually appropriate amounts sufficient for the proper

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administration of the department, as determined in writing by the division of municipal finance.

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If the city or town fails to appropriate such amounts, the division of municipal finance shall direct

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the general treasurer to deduct the necessary funds from the city's or town's distribution of the

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city's or town's state aid and shall expend those funds directly for the benefit of the department.

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The city or town shall annually appropriate amounts sufficient to cover the costs of the

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administration and finance officer.  The state shall annually reimburse the city or town for fifty

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percent (50%) share of such costs.  The city or town at its expense shall provide office space and

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adequate resources needed by the administration and finance officer in the performance of his/her

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duties. 

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      (m) The officer shall comply with all requests of the school department to provide any

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information relating to the operation of the school department held within the authority or control

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of the officer as the result of the consolidation of school and city or town business and financial

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functions under sections 45-9-3 or 45-9-6. If the officer, or any employee under the control of the

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officer, refuses to provide such information or engages in unreasonable delay, the school

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department shall notify the division of municipal finance. The division of municipal finance shall,

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within a reasonable time, make a determination whether any such information shall be provided

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to the school department which shall be binding upon the officer and the school department. The

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division of municipal finance's determination shall not be an adjudicatory proceeding reviewable

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under chapter 42-35 of the general laws. Nothing in this subsection shall abrogate any of the other

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powers or duties of the school committee under the general laws.

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     SECTION 2. Chapter 45-9 of the General Laws entitled "Budget Commissions" is hereby

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amended by adding thereto the following section:

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     45-9-10.1. Appointment of administration and finance officer upon abolition of a

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fiscal overseer, or a budget commission or a receiver where no chapter 9, title 11 petition

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filed. -- (a) Notwithstanding any general or special law or city or town ordinance to the contrary,

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this section shall apply upon the abolition of the fiscal overseer, budget commission or receiver

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where the receiver has not filed a petition for Chapter 9, Title 11 of the United States Code, upon

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a determination, in writing, by the director of revenue that the financial condition of the city or

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town has improved to a level such that a fiscal overseer, budget commission or receiver is no

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longer needed.

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     (b) For a period of five (5) years after the abolition of a fiscal overseer, or a budget

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commission or a receiver where the receiver has not filed a petition for Chapter 9, Title 11 of the

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United States Code, a finance advisor shall be appointed for the city or town by the director of

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revenue. The finance advisor shall be an employee of the city or town.  The finance advisor shall

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be responsible for monitoring the overall budgetary and financial administration and fiscal health

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of the city or town. The finance advisor shall report to the director of revenue.

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     (c) The finance advisor shall be appointed solely on the basis of his or her qualifications

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and shall be a person especially fitted by education, training or experience to perform the

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functions of the position.

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     (d) The finance advisor shall have complete access to the financial books and records of

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all offices, departments, and other agencies of the municipal government and, without limitations:

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     (1) Recommend to the elected chief executive officer, city or town council and school

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committee sound fiscal policies for implementation and monitor implementation;

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     (2) Monitor and oversee all financial operations and activities including the city’s or

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town’s operating and capital financial plans to maintain fiscal stability;

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     (3) Review operational results of various city or town funds and evaluate the structural

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soundness of each;

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     (4) Advise the assessor, director of finance, city or town treasurer, purchasing agent and

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employees performing similar duties but with different titles;

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     (5) Provide assistance in all matters related to municipal financial affairs;

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     (6) Review and approve the development and preparation of the annual municipal budget,

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all department operating and capital budgets and spending plans;

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     (7) Review and approve all proposed labor contracts and obligations to determine if

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consistent with a structurally balanced five (5) year plan;

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     (8) Monitor the receipt of revenues and expenditures of all funds with the assistance of

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city/town staff;

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     (9) Participate in rating agency calls pertaining to the city or town;

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     (10) Determine compliance with the various ordinances, laws (federal and state) and rules

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and regulations related to receipt and expenditure of city funds;

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     (11) Provide comment to the local governing body on the annual or supplemental

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municipal budgets of the city or town and all of its departments;

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     (12) Report quarterly to the chief elected officer, city or town council, director of

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revenue, the auditor general, the governor and the chairpersons of the house finance and senate

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finance committees on the progress made towards maintaining fiscal stability and all financial

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operations of the city or town;  

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     (13) Make recommendations to the elected chief executive officer, city or town council,

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school committee, and the director of revenue, as appropriate, to begin to address any operational

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and/or structural deficit;  

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     (14) Make recommendations to the elected chief executive officer, city or town council,

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and school committee, as appropriate, to have operational, performance, or forensic audits, or

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similar assessments conducted;

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     (15) Report any: (i) Inappropriate expenditure; (ii) Any improper accounting procedure;

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(iii) All failures to properly record financial transactions; and (iv) Other inaccuracies,

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irregularities, and shortages, as soon as practical to the elected chief executive officer, or in the

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case of a municipality without an elected chief executive officer, the city or town council; and

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     (16) Notify in writing as soon as practical, the elected chief executive officer or the city

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or town council; if the finance advisor discovers any errors, unusual practices, or any other

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discrepancies in connection with his or her work.

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     (f) The city or town, including the school department, shall provide the finance advisor

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with any and all information requested in a timely fashion.

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     (g) The city or town shall annually appropriate amounts sufficient to cover the costs of

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the administration and finance officer.  The state shall annually reimburse the city or town for

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fifty percent (50%) share of such costs.

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     (h) The city or town at its expense shall provide office space and adequate resources

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needed by the administration and finance officer in the performance of his/her duties.

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     (i) Nothing contained herein removes duties from existing positions in the city or town.

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     SECTION 3. This act shall take effect upon passage.

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LC02714/SUB A

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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 create an amended process to be followed by a city or town upon the

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abolition of its fiscal overseer, budget commission, or receiver, depending upon whether an

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accompanying bankruptcy petition has been filed. It would also require the state of Rhode Island

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to annually reimburse a city or town fifty percent (50%) of the costs for the administration and

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finance officer.

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     This act would take effect upon passage.

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LC02714/SUB A

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