(a)  Upon joint request by a city’s or town‘s elected chief executive officer and city or town council, or for a fire district, the request of the governing body as established by charter, 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, town, or fire district to assess the ability of the city or town government or fire district to manage fiscal challenges.

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Terms Used In Rhode Island General Laws 45-9-3

  • Charter: means the home rule charter or the legislative charter of any city, town, or fire district. See Rhode Island General Laws 45-9-2
  • Director of revenue: means the director of the department of revenue. See Rhode Island General Laws 45-9-2
  • Division of municipal finance: means the division of municipal finance in the department of revenue or any successor department or agency. See Rhode Island General Laws 45-9-2
  • 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. See Rhode Island General Laws 45-9-2
  • Fire district budget: means the fiscal-year operating budget of the fire district. See Rhode Island General Laws 45-9-2
  • Fiscal overseer: means the financial overseer appointed under § 45-9-3. See Rhode Island General Laws 45-9-2
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
  • General treasurer: means the general treasurer of the state. See Rhode Island General Laws 45-9-2
  • in writing: include printing, engraving, lithographing, and photo-lithographing, and all other representations of words in letters of the usual form. See Rhode Island General Laws 43-3-16
  • Municipal budget: means the fiscal-year operating budget of the city, town, or fire district, inclusive of the school department budget and all other departments. See Rhode Island General Laws 45-9-2
  • Officer: means the chief administrative and financial officer appointed under § 45-9-10 after abolition of a fiscal overseer or a budget commission or a receiver in a city, town, or fire district. See Rhode Island General Laws 45-9-2
  • School committee: means the school committee of the city or town, but shall not mean, or include, a regional school district committee. See Rhode Island General Laws 45-9-2
  • State aid: means the funds made available to cities and towns:

    (i)  As state aid pursuant to chapter 13 of Title 45, but specifically excluding reimbursements to cities and towns for the cost of state mandates pursuant to § 45-13-9;

    (ii)  As school operations aid provided for in § 16-7-5 — Rhode Island General Laws 45-9-2

  • town: may be construed to include city; the words "town council" include city council; the words "town clerk" include city clerk; the words "ward clerk" include clerk of election district; the words "town treasurer" include city treasurer; and the words "town sergeant" include city sergeant. See Rhode Island General Laws 43-3-9
  • town council: include city council; the words "town clerk" include city clerk; the words "ward clerk" include clerk of election district; the words "town treasurer" include city treasurer; and the words "town sergeant" include city sergeant. See Rhode Island General Laws 43-3-9

(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 that are of such a magnitude that they threaten the fiscal well-being of the city, town, or fire district, diminishing the city’s, town’s, or fire district’s ability to provide for the public safety or welfare of the citizens of the city, town, or fire district:

(1)  The city, town, or fire district projects a deficit in the municipal budget or fire district budget in the current fiscal year and again in the upcoming fiscal year;

(2)  The city, town, or fire district has not filed its required 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, town, or fire district has been downgraded by one of the nationally recognized statistical rating organizations;

(4)  The city, town, or fire district is otherwise unable to obtain access to credit markets or obtain financing when necessary on reasonable terms in the sole judgment of the director of revenue.

(5)  The city, town, or fire district 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, town, or fire district in the sole judgment of the director of revenue.

(c)  The director of revenue may also appoint a fiscal overseer if a city, town, or fire district fails to comply with the requirements of § 45-12-22.1 — § 45-12-22.5.

(d)  The fiscal overseer shall without limitation:

(1)  Recommend to the elected chief executive officer, fire district board of directors, 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, fire district board of directors, purchasing agent, and employees performing similar duties but with different titles;

(4)  Provide assistance in all matters related to municipal or fire district financial affairs;

(5)  Assist in development and preparation of the municipal or fire district 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 fire districts budgets or 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 or fire district’s deficit and otherwise attaining fiscal stability.

(e)  All department budgets and requests for municipal or fire district budget transfers shall be submitted to the fiscal overseer for review and approval.

(f)  The city, town, or fire district 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, town, or fire district fails to appropriate such amounts, the division of municipal finance shall direct the general treasurer to deduct the necessary funds from the city’s, town’s, or fire district’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-year (3) operating and capital financial plan to achieve fiscal stability in the city, town, or fire district. The plan shall include a preliminary analysis of the city’s, town’s, or fire district’s financial situation and the fiscal overseer’s initial recommendations to immediately begin to address the 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, town, or fire district, to employ, retain, and 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 2 of Title 37 or chapter 55 of Title 45 in employing such staff.

History of Section.
P.L. 1993, ch. 242, § 1; P.L. 2001, ch. 180, § 141; P.L. 2005, ch. 241, § 2; P.L. 2005, ch. 319, § 2; P.L. 2006, ch. 216, § 61; P.L. 2008, ch. 98, § 56; P.L. 2008, ch. 145, § 56; P.L. 2010, ch. 24, § 1; P.L. 2010, ch. 27, § 1; P.L. 2011, ch. 363, § 3; P.L. 2014, ch. 31, § 1; P.L. 2014, ch. 33, § 1.