AN ACT RELATIVE TO THE FINANCIAL CONDITIONS IN THE TOWN OF SOUTHBRIDGE.
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 by-law to the contrary, the town of Southbridge, with the approval of the commissioner of revenue, in this act called the commissioner, or with the approval of the finance advisory board, in this act called the board, if the board has been established under section 3, may borrow, at one time or from time to time, sums approved by town council and then by the commissioner or the board, but in no event in an amount in the aggregate more than $2,500,000 to maintain and operate the town while it adjusts the level of its expenses and revenues to achieve balanced budgets and fiscal stability. The commissioner or board may limit such borrowing to an amount or amounts less than the amount or amounts approved by town council and shall limit such borrowing to the extent the commissioner or board, if established under section 3, determines that the town is not levying property taxes up to its levy limit and otherwise reasonably maximizing its local revenues. Bonds or notes issued under this act for operating purposes may be issued for a term of not more than 5 years and shall be backed by the full faith of the town. The bonds and notes shall be eligible to be issued as qualified bonds or notes pursuant to chapter 44A of the General Laws. 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 the bonds or notes, and by the commissioner or board, 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.
(c) All proceeds of any loan authorized shall be deposited in a separate fund which shall be set up on the books of the town of Southbridge and be maintained separate and apart from all other funds and accounts of the town. This fund shall be called the Town of Southbridge Financial Stability Fund, in this act called the fund. The council, with the approval of the commissioner or board, may authorize disbursements from the fund for operating purposes that the town manager considers appropriate to maintain and continue town operations. Funds borrowed for operating purposes may be applied, with the approval of the director of accounts in the department of revenue, in this act called the director, as general revenue for purposes of section 23 of chapter 59 of the General Laws. The director may establish rules and procedures that he considers appropriate relating to disbursements from the fund and the reporting and accounting for these disbursements.
SECTION 2. As an alternative to borrowing authorized under section 1, and notwithstanding any general or special law or town charter provision or by-law to the contrary, the town of Southbridge may capitalize a sum not to exceed $2,500,000, the amortization amount, and fund the amortization amount in equal or decreasing annual installments over a period starting with fiscal year 2006 and not exceeding 5 years. For fiscal year 2006, and fully subject to section 21C of chapter 59 of the General Laws, the board of assessors of the town of Southbridge, may, subject to the approval of the commissioner, or with the approval of the finance advisory board, in this act called the board, if the board has been established under section 3, deduct such portion of the amortization amount as the commissioner approves as consistent with this act, from the amount to be assessed pursuant to section 23 of said chapter 59. Under the conditions imposed in this act, the assessors of the town of Southbridge may similarly deduct such portion of the amortized amount in any year until the amortization is completed no later than fiscal year 2010.
SECTION 3. (A) With respect to fiscal year 2006, and in any other year which bonds, notes or an amortization amount authorized under this act remain outstanding, no later than 10 days following the enactment of the town's annual operating budget or June 1, whichever is earlier, the assessors and council shall submit to the director of accounts a pro forma tax rate recapitulation for the following fiscal year. The director shall ascertain if 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 conclusion to the commissioner. If the commissioner determines that the town budget as presented would not permit certification of the tax rate for the next fiscal year to be approved, he shall certify such determination in writing and provide notice thereof with a copy of the certificate to the secretary of administration and finance, the clerks of the senate and house of representatives, the town council of the town of Southbridge, and the town clerk of the town of Southbridge, and upon such notifications, the board shall forthwith be established in the town with the powers and duties set forth in this act. The board shall exercise its powers and duties only for the limited purpose of ensuring that the town budget is balanced. The board shall exercise its powers and duties only so long as amounts borrowed or capitalized before June 30, 2005 under sections 1 and 2 remain outstanding.
(B) The board shall consist of the deputy commissioner of the division of local services in the department of revenue or his designee, the director of accounts or his designee, and the chair of the town council or his designee.
(C) Until the board ceases to exist, no appropriation, borrowing authorization or transfer shall take effect until approved by the board. As used in the preceding sentence, a transfer shall not include a transfer by the advisory and financial committee from the reserve fund provided for in section 6 of chapter 40 of the General Laws. The board may approve an appropriation, borrowing authority or transfer, in whole or part. In addition to the authority and powers conferred elsewhere in this act, and notwithstanding any town charter provision, or local by-law to the contrary, the board shall have the following authority:
(a) The authority, by majority vote, to amend at any time any appropriation, borrowing authority, transfer, or other municipal spending authority. The authority to amend, pursuant to the authority contained in this act, shall include the power to increase or decrease an existing appropriation, borrowing authorization, transfer or spending authority; the authority to eliminate an existing appropriation, borrowing authorization, transfer or spending authority; and the power to create an appropriation, transfer or spending authority. In exercising its authority under this clause, the board may act with respect to municipal spending purposes that are not the subject of separately identified appropriations. Nothing in this act shall allow the board to unilaterally modify any contracts with any municipal employees.
(b) If there is no annual budget lawfully established for a fiscal year by the first day of such fiscal year, the authority, by majority vote, to establish such appropriations for that fiscal year as the board deems appropriate, and to amend, as provided for above such appropriations during the fiscal year.
(c) The authority, by majority vote, to encumber or impound, at any time, any unexpended or unencumbered appropriation or spending authority of any kind, notwithstanding the prior approval of the board of such appropriation or spending authority. To the extent that funds previously encumbered or impounded remain encumbered or impounded at the conclusion of the fiscal year, such amounts shall revert to the General Fund.
(d) In addition and without limitation of the other authority in this section, the independent authority, by majority vote, to establish, set, raise or lower any fee, rate or charge, for any service, license, permit or other municipal activity, otherwise within the authority of the town to establish, set, raise or lower. No such fee, rate or charge shall be established, set, raised or lowered without written notice to the town council at least 45 days before the effective date of such action.
(D) Action by the board, under the authority of this act, shall in all respects constitute valid and lawful action by the town for purposes of chapters 40, 41, 44, and 59 of the General Laws and for all municipal finance and other matters.
(E) While the board continues in existence, the town manager shall, at the same time as the annual budget is submitted to the town council, provide to the board a copy of the proposed annual budget together with a supporting revenue and expenditure statement in such detail as the board may prescribe. The board shall review such budgetary information and may issue a report of its findings.
(F) In order to promote and ensure the fiscal stability of the town of Southbridge, the board may also require the filing of a detailed annual work plan by each municipal department, which shall be approved by the town council, school committee, or other elected board as appropriate, setting forth certain actions that may be implemented by each such department through its department head to ensure greater efficiency in the delivery of services by the town.
(G) Each work plan shall be in such detail as the board may prescribe, and may include, but not be limited to, the following: (1) a plan for improved financial and spending controls; (2) budget guidelines and objectives for the fiscal year; (3) a professional and nonprofessional staffing plan; (4) a plan for other proposed savings to be implemented. Any such plan submitted by the school department shall be approved by the school committee prior to submission to the board.
(H) While the board is in existence, the board may require that a status report be filed with the board by each department head on a quarterly basis.
(I) The board may waive any reporting or filing requirements contained in this section.
(J) The board may prepare reports of its findings and issue recommendations for further action to the town council, school committee or other elected board, municipal department heads, or agencies of the commonwealth that the board determines appropriate. Members of the board who are employees or officers of the commonwealth or the town of Southbridge shall serve without compensation. The board may adopt such rules and procedures that it considers necessary and appropriate to effectuate the purposes of this act.
SECTION 4. The town accountant, or other official with responsibility for accounting matters, of the town of Southbridge 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 local by-law.
The town accountant shall, in addition to his other duties, provide, upon majority vote and at the written request of the town council, within a reasonable time period from such request, an oral or written assessment, or both, as the town council 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 one 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 town council. The assessment and analysis shall be provided by the town accountant as his professional opinion.
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 Southbridge 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 2006 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 2006 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 2007 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 2008 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 2009 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 2010 and each subsequent fiscal year 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 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 the town council, and if the board continues in existence at the time of such transfer or expenditure, only with the approval of the board. Each such transfer or expenditure request by the town manager shall be accompanied by a written statement detailing the amount and the reason for the transfer or expenditure. 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.
(f) All amounts required by this act to be raised for each fiscal year shall be certified to the board of assessors by the town accountant before the establishment of the tax rate for the then current fiscal year. While the board remains in existence, the board, to the extent it considers it appropriate to effectuate the purposes of this act, may waive in part or in whole the requirements of this section.
SECTION 6. No official of the town of Southbridge, 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 such amounts from the person or persons to whom such 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 under this act and to order relief that the court finds appropriate to prevent further violations of this section. Any violation of this section shall be deemed sufficient cause for removal.
SECTION 7. For the purposes of this act, the word "official" shall mean a town department head, permanent, temporary or acting, including the superintendent of schools, and all members of municipal boards, committees, including the school committee, and commissions which 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. (a) 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 Southbridge until an audit report for the preceding fiscal year has been received and accepted by the commissioner. The audit report shall be prepared by a certified public accountant in accordance with generally accepted accounting principles and shall include accompanying financial statements.
(b) In any year during which bonds, notes or an amortization amount authorized under this act remain outstanding, the town shall submit to the commissioner 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 fiscal quarter and shall be in such form and include such information and detail as the commissioner may prescribe.
(c) 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 commissioner.
SECTION 9. This act shall take effect upon its passage and, except for section 5, shall expire 5 years after its effective date.
Approved January 5, 2005.