§ 45-9-3. Appointment and duties of fiscal overseer. (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.

(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.)