Bill S.2405

SENATE DOCKET, NO. 2199 FILED ON: 12/2/2014

SENATE . . . . . . . . . . . . . . No. 2405

By Mr. Brewer, a petition (accompanied by bill, Senate, No. 2405) of Stephen M. Brewer, Anne M. Gobi and Jonathan D. Zlotnik (by vote of the town) for legislation relative to the financial condition of the town of Winchendon. Municipalities and Regional Government. [Local Approval Received.]

The Commonwealth of Massachusetts

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In the Year Two Thousand Fourteen

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An Act relative to the financial condition of the town of Winchendon.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same as follows:

SECTION 1. (a) Notwithstanding any general or special law, town charter provision or local bylaw to the contrary, the town of Winchendon, with the approval of the director of accounts in the department of revenue, in this act called the director, may borrow sums, as approved by the board of selectmen and the director, for the purpose of achieving a balanced budget for fiscal years 2015 and 2016; provided, however, that the aggregate of all such sums shall not exceed $5,700,000, unless the director of accounts makes a separate finding that an additional $300,000 is necessary for the town to achieve a balanced budget, in which case, the aggregate of all such sums shall not exceed $6,000,000. The director may limit this borrowing to an amount or amounts less than the amount or amounts approved by the selectmen. Notwithstanding chapter 44A of the General Laws, bonds or notes issued under this act for the above purposes may be issued, with the approval of the director, for a term of not more than 10 years and shall be backed by the full faith and credit of the town and the bonds and notes shall be eligible to be issued as qualified bonds or notes. Indebtedness incurred under this act shall not be included in determining the statutory limit of indebtedness of the town under section 10 of chapter 44 of the General Laws but, except as provided in this act, shall otherwise be subject to said chapter 44. Amounts raised to pay indebtedness incurred under authority of this section shall be subject to section 21C of chapter 59 of the General Laws.

(b) The maturities of each issue of bonds or notes authorized under this act, including any refunding bonds, may, if approved by the town officers authorized to issue and approve these bonds or notes, and by the director, be arranged so that for each issue the amounts payable in the several years for principal and interest combined are as nearly equal as is practicable in the opinion of the officers authorized to issue and approve the bonds or notes, or in the alternative, in accordance with a schedule providing for a more rapid amortization of principal.

(d) The director may establish rules and procedures that he considers appropriate relating to the accounting standards applicable to the town of Winchendon for the purposes of this act and otherwise.

SECTION 2. Notwithstanding any general or special law, town charter provision or local bylaw to the contrary, and as an alternative to borrowing authorized under section 1, the town of Winchendon may capitalize a sum of $5,700,000, unless the director of accounts makes a separate finding that an additional $300,000 is necessary for the town to achieve a balanced budget, in which case, the town may capitalize a sum not to exceed $6,000,000, for the purpose stated in Section 1, the amortization amount, and fund the amortization amount in equal or decreasing annual installments over a period starting with fiscal year 2016 and not exceeding 10 years. For fiscal year 2016, and fully subject to section 21C of chapter 59 of the General Laws, the board of assessors of the town of Winchendon, may, subject to the approval of the director, deduct such portion of the amortization amount as the director approves as consistent with this act, from the amount to be assessed under section 23 of chapter 59. Under the conditions imposed in this act, the assessors of the town of Winchendon may similarly deduct such portion of the amortized amount in any year until the amortization is completed not later than fiscal year 2025.

SECTION 3. (a) With respect to fiscal year 2015, and in any other year in which bonds, notes or an amortization amount authorized under this act remain outstanding, not later than 10 days after the adoption of the town budget, or July 1, whichever is earlier, the assessors and board of selectmen shall submit to the director a pro forma tax rate recapitulation for the following fiscal year, together with a copy of the adopted budget and such supporting revenue and expenditure information as the director may prescribe. The director shall ascertain whether the town budget for that fiscal year contains reasonable revenues from taxation and other sources to meet the appropriations and other amounts required by law to be raised under section 23 of chapter 59 of the General Laws, and the director shall report his findings to the selectmen and town manager. In no event shall the tax rate for the year be approved until submission of an annual tax rate recapitulation based on the actions the town has approved or taken to achieve a balanced budget.

(b) In any year during which bonds, notes or an amortization amount authorized under this act remain outstanding, the commissioner of revenue shall not certify the annual tax rate of the town of Winchendon until an audit report for the preceding fiscal year has been received and accepted by the director. The audit report shall be prepared by a certified public accountant in accordance with generally accepted auditing standards and shall include accompanying financial statements.

(c) In any year during which bonds, notes or an amortization amount authorized under this act remain outstanding, the town shall submit to the director quarterly reports presenting a budget to actual comparison of revenues and expenditures. The written reports shall be submitted within 30 days after the conclusion of each month and shall be in such form and include such information and detail as the director may prescribe.

(d) In any year during which bonds, notes or an amortization amount authorized by this act remain outstanding, the town shall not issue any bond, note or other form of indebtedness without written notification to, and the approval of, the director.

(e) In any year during which bonds, notes or an amortization amount authorized by this act remain outstanding, the town shall submit to the director a balance sheet, and have its free cash certified prior to the setting of the annual tax rate.

(f) Notwithstanding section 23 of chapter 59 of the General Laws, or any other general or special law to the contrary, the town of Winchendon shall use all free cash certified by the director of accounts as available on July 1 of each fiscal year that exceeds the debt service payable on bonds or notes issued, or amortization amount required, under this act for that year as a continuing appropriation during that year to reduce the principal owed on the bonds or notes issued under this act; provided, however, that if the town demonstrates to the satisfaction of the director of accounts that the use of free cash will be necessary to balance the budget in any fiscal year, the director may authorize use of the same for such purposes, subject to appropriation by town meeting.

(g) In any year in which bonds, notes or an amortization amount authorized under this act remain outstanding and the director determines it is appropriate to effectuate the purposes of this act, the director may waive any reporting, filing or approval requirements contained in this section.

SECTION 4. (a) The town accountant, or other official with responsibility for accounting matters, of the town of Winchendon shall have the powers and duties vested in this office by general or special law and in addition, the powers and duties provided in this act. To the extent not otherwise inconsistent with this act, the office of the town accountant shall also have the powers and duties provided by town charter and local by-law.

(b) The town accountant shall, in addition to his other duties, provide, at the written request of the town manager or upon majority vote and at the written request of either the board of selectmen or the finance committee, within a reasonable time period from such request, an oral or written assessment, or both, as the manager, selectmen or finance committee may request, of the current and future financial impact of the cost of any proposed appropriation, lease or contract arrangement for a term including more than 1 fiscal year, collective bargaining agreement or borrowing authorization, particularly, but not limited to, as such cost item would relate to the continuous provision of the existing level of municipal services. To the extent reasonable, this assessment shall include an analysis or other information of a financial nature as is specifically requested by the manager, selectmen or the finance committee. The assessment and analysis shall be provided by the town accountant as his professional opinion.

(c) ) In any year during which bonds, notes or an amortization amount authorized under this act remain outstanding, and notwithstanding any general or special law, town charter provision or bylaw to the contrary, (1) prior to making an appointment to the position of town accountant, the board of selectmen shall consult with the town manager who shall provide a recommendation with respect to such appointment; provided, however, that while such board shall not make an appointment without the manager’s recommendation, the same shall not be binding on said board; and, (2) the town manager shall also manage the daily reporting and supervision of the town accountant.

SECTION 5. (a) Notwithstanding any general or special law, town charter provision or local by-law to the contrary, but subject to section 21C of chapter 59 of the General Laws, the town of Winchendon shall establish a special reserve fund for extraordinary and unforeseen expenditures, which fund shall be called the Supplemental Reserve Fund to Ensure Fiscal Stability. This fund shall be separate and in addition to any amounts appropriated pursuant to section 6 of chapter 40 of the General Laws.

(b) Commencing with fiscal year 2016 and for all fiscal years thereafter, before the date when the tax rate is fixed, the board of assessors shall include in the amounts to be raised pursuant to section 23 of chapter 59 of the General Laws for such fiscal year an amount, the supplemental reserve fund sum, as determined under this section, such amount to be certified to the board of assessors by the town accountant.

(c) The supplemental reserve fund sum for fiscal year 2016 shall be an amount equal to 0.25 per cent of the gross amount to be raised for the prior fiscal year as appearing on the town's tax rate recapitulation for that prior year; the supplemental reserve fund sum for fiscal year 2017 shall be an amount equal to 0.50 per cent of the gross amount to be raised for the prior fiscal year as appearing on the town's tax rate recapitulation for that prior year; the supplemental reserve fund sum for fiscal year 2018 shall be an amount equal to 0.75 per cent of the gross amount to be raised for the prior fiscal year as appearing on the town's tax rate recapitulation for that prior year; the supplemental reserve fund sum for fiscal year 2019 shall be an amount equal to 1 per cent of the gross amount to be raised for the prior fiscal year as appearing on the town's tax rate recapitulation for the prior year; and the supplemental reserve fund sum for fiscal year 2020 and each subsequent fiscal year during which bonds, notes or an amortization amount authorized under this act remain outstanding shall be an amount equal to 1.5 per cent of the gross amount to be raised for the prior fiscal year as appearing on the town's tax rate recapitulation for that prior year.

(d) In each year during which bonds, notes or an amortization amount authorized under this act remain outstanding the amount required to be raised for such supplemental reserve fund may be reduced by the amount, if any, remaining in the supplemental reserve fund established for the preceding year after all expenditures have been made therefrom as authorized in this act, and this remaining amount shall be retained in such supplemental reserve fund provided for the then current fiscal year.

(e) Transfers or expenditures may be made from the supplemental reserve fund of any fiscal year during that fiscal year only, and then only by town meeting upon the written request of the board of selectmen and town manager. Each such transfer or expenditure request by the selectmen and town manager shall be accompanied by a written statement detailing the amount and the reason for the transfer or expenditure. In any year during which bonds, notes or an amortization amount authorized under this act remain outstanding, except for such transfers or expenditures as are authorized in this act, there shall be no other transfers or reductions in the amount of this fund; provided further that beginning two years after the end of the fiscal year the bonds, notes or amortization authorized hereunder have been paid or completed, any funds remaining in said reserve fund shall be available for appropriation for any legal purpose.

(f) In any year in which bonds, notes or an amortization amount authorized under this act remain outstanding and the director determines it is appropriate to effectuate the purposes of this act, the director may waive in whole or in part the requirements of this section; and in any year during which bonds, notes or an amortization amount authorized under this act remain outstanding.

SECTION 6. No official of the town of Winchendon, except in the case of an emergency involving the health and safety of the people or their property, shall knowingly expend or cause to be expended in any fiscal year any sum in excess of that official's departmental or other governmental unit's appropriation duly made in accordance with the law, nor commit the town, nor cause it to be committed, to any obligation for the future payment of money in excess of that appropriation, with the exception of court judgments.

Any official who intentionally violates this section shall be personally liable to the town for any amounts expended in excess of an appropriation to the extent that the town does not recover these amounts from the person or persons to whom the amounts were paid. The superior court or a single justice of the supreme judicial court shall have jurisdiction to adjudicate claims brought by the town, or the attorney general, under this act and to order relief that the court finds appropriate to prevent further violations of this section. Notwithstanding any general or special law, town charter provision or bylaw to the contrary, any violation of this section shall be considered sufficient cause for removal by the school department or general government appointing authority.

SECTION 7. For the purposes of this act, the word "official" shall mean a permanent, temporary or acting town department head, including the members of the board of selectmen who recommend, authorize or approve the expenditure of funds, and the word "emergency" shall mean a major disaster, including, but not limited to, flood, drought, fire, hurricane, earthquake, storm or other catastrophe, whether natural or otherwise, which poses an unexpected and immediate threat to the health and safety of persons or property.

SECTION 8. At any time after July 1, 2017 and upon the request of the board of selectmen, if the director determines that the town of Winchendon has taken steps necessary to achieve long-term fiscal sustainability, the director, with notice to the commissioner of revenue, may terminate the financial reporting, filing and approval requirements contained in section 3 and the supplemental reserve funding requirements and transfer or expenditure restrictions contained in section 5.

SECTION 9. Notwithstanding section 57C of chapter 59 of the General Laws in fiscal year 2015 an actual tax bill issued upon the establishment of the tax rate for the town of Winchendon for the fiscal year, after credit is given for a preliminary tax payment previously made, shall be due and payable in 2 installments. The first installment shall be due and payable on February 1, 2015, or 30 days after the actual real estate tax bills are mailed, whichever is later, and the second installment shall be due and payable on May 1, 2015, after which dates, if unpaid, they shall become delinquent.

SECTION 10. This act shall take effect upon its passage.

Name:	District/Address:
Stephen M. Brewer	Worcester, Hampden, Hampshire and Middlesex
Anne M. Gobi	5th Worcester
Jonathan D. Zlotnik	2nd Worcester