2025 -- H 5947

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LC002053

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2025

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A N   A C T

RELATING TO TOWNS AND CITIES -- AUDIT OF ACCOUNTS AND INSTALLATION OF

SYSTEMS

     Introduced By: Representatives Felix, Tanzi, McNamara, and Ackerman

     Date Introduced: February 28, 2025

     Referred To: House Municipal Government & Housing

     (Auditor General)

It is enacted by the General Assembly as follows:

     SECTION 1. Section 45-10-15 of the General Laws in Chapter 45-10 entitled "Audit of

Accounts and Installation of Systems" is hereby amended to read as follows:

     45-10-15. Compliance with requirements of “governmental accounting standards

board (GASB)” pension funding Municipal compliance with funding pension and other post-

employment benefit plans.

     (a) For any audit year in which a municipality contributes materially less than 100% of the

annual required actuarially determined contribution to its pension plan(s) as ("ADC") reported in

accordance with GASB statement 27 or any successor statement Governmental Accounting

Standards Board ("GASB") requirements to its pension plan(s), the municipality shall submit to the

auditor general and the director of revenue, within three (3) months of completion of the annually

audited financial statement, the municipality’s most recent actuarial study of the valuations

determining the ADC for the pension plan(s) and management’s recommendations for assuring

future payments equal to the annual pension cost (APC) planned future contributions to achieve

one hundred percent (100%) ADC funding.

     (b)(1) For any audit year in which a municipality contributes materially less than one

hundred percent (100%) of the ADC reported in accordance with GASB requirements to its other

post-employment benefit (“OPEB”) plan(s), the municipality shall submit to the auditor general

and the director of revenue, within three (3) months of completion of the annual audited financial

statement, the most recent actuarial valuations determining the ADC for the OPEB plan(s) and

management’s recommendations for planned future contributions to achieve one hundred percent

(100%) ADC funding.

     (2) Municipalities may create an OPEB trust agreement pursuant to § 45-21-65, if not

currently in place.

     (c) Municipalities shall consult with the auditor general until approved pension and OPEB

funding plans are adopted.

     SECTION 2. Section 45-21-65 of the General Laws in Chapter 45-21 entitled "Retirement

of Municipal Employees" is hereby amended to read as follows:

     45-21-65. Other post-employment benefits — OPEB trusts.

     (a) Notwithstanding the provisions of any general or special law, or the provisions of any

municipality’s home rule charter, to the contrary, for purposes of funding any unfunded liability

for other post-employment benefits including, but not limited to, health care and dental care

benefits hereinafter referred to as (“OPEB”) in accordance with government accounting standards

board statements 43 and 45 Governmental Accounting Standards Board ("GASB") requirements,

a municipality, acting by its treasurer or director of finance, upon an approving resolution of the

city or town council or agency board as applicable, may enter into a trust agreement between the

municipality and a corporate trustee which shall be a bank or trust company doing business in the

state, or a corporation established pursuant to chapter 5 of this title. This trust agreement shall be

in any form deemed proper by the treasurer or director of finance of the municipality, and shall be

executed by its treasurer or director of finance and countersigned by its mayor or president of the

town council. It shall be lawful for any bank, trust company, or entity organized pursuant to §  45-

5-20.1 doing business in the state to act as a depository or trustee under this trust agreement, and

to furnish indemnification and pledge securities that may be required by any municipality.

     (b) OPEB trust funds shall be credited with all amounts appropriated or otherwise made

available by the municipality for the purposes of meeting the current and future OPEB costs payable

by the municipality. OPEB trust funds shall also be credited with all amounts contributed or

otherwise made available by employees of the municipality for the purpose of meeting future OPEB

costs payable by the municipality. Amounts in an OPEB trust fund, including any earnings or

interest accruing from the investment of these amounts, shall be expended only for the payment of

the costs payable by the municipality for OPEB or as otherwise permitted by the terms of the trust

and applicable law. The director of finance or treasurer, as applicable, shall invest and reinvest the

amounts in the OPEB trust fund not needed for current disbursement in any investment permitted

for the municipality’s pension funds consistent with the prudent person rule and investment policies

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of the municipality, if any.

     (c) Municipalities are hereby authorized to enter into agreements, trusts, contracts, and

other arrangements with the state and any of its departments, agencies, boards or commissions

relating to the execution, management or operation of the OPEB trust funds, including, but not

limited to, investments, and the state and its departments, agencies, boards and commissions are

hereby authorized to enter into such agreements, contracts and other arrangements with

municipalities. Notwithstanding any provisions of any general or special law or principle of equity

to the contrary, the state shall have no liability to any municipality for entering into such

agreements.

     (d) A municipality may employ any qualified bank, trust company, corporation, firm or

person to advise it on the investment of the OPEB trust fund and may pay from the OPEB trust

fund for this advice and other services. Procurement for these services shall be subject to the

procurement procedures and rules governing municipalities in the state.

     (e) Municipalities are also hereby authorized to enter into agreements, trusts, contracts, and

other arrangements with any corporation established pursuant to chapter 5 of this title relating to

the execution management or operations of OPEB trust funds including, but not limited to,

investments, and the corporations established pursuant to § 45-5-20.1 are hereby authorized to enter

into such agreements, trusts, contracts or other arrangements with municipalities.

     (f) Any OPEB trusts that have been created by municipalities and are in effect on the date

hereof are hereby ratified and confirmed.

     (g) Nothing herein shall be construed to exempt OPEB trusts from the Rhode Island Access

to Public Records Act, § 38-2-1 et seq.

     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TOWNS AND CITIES -- AUDIT OF ACCOUNTS AND INSTALLATION OF

SYSTEMS

***

     This act would amend the audit compliance requirements for municipalities' contributions

to pension plans under the audit of accounts and installation of systems chapter of the general laws.

     This act would take effect upon passage.

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