Rhode Island Code of Regulations › Title 130 - AUDITOR GENERAL › Chapter 00 - N/A › Subchapter 00 - N/A › Part 1 - Maximum Levy - Standards and Procedures for Certification of an Emergency Situation in Accordance with R.I. Gen. Laws Section 44-5-2 (as amended) for Rhode Island Cities and Towns and for Certain Fire Districts (when specified by law) › Section 130-RICR-00-00-1.2 - Definitions

Current through June 14, 2024
A. For purposes of this regulation, the following terms shall have the following meanings:
1. "Municipal entity" means cities and towns and certain fire districts (when specified by law).
2. "General fund budget" means those amounts appropriated by a municipal entity for its annual financial operations, including debt service and appropriations to the school district (including regional).
3. "Statutory property tax limit" means the maximum municipal percentage tax levy increase of 4% is available without an approved exemption.
4. "Maximum property tax levy" means the maximum dollar value of the tax levy on real estate and tangible personal property available by application of the statutory property tax limit increase.
5. "Emergency situation" is an event in which the municipal entity incurred or expects to incur, in the upcoming fiscal year, expenditures of an emergency nature which caused or will cause the tax levy to increase by an amount which exceeds the percentage increase as specified in R.I. Gen. Laws §
											44-5-2(a) or (b), as amended. Expenditures in the nature of an emergency are those extraordinary in nature, and/or not reasonably foreseeable. The municipal entity shall request that the Auditor General certify the emergency and approve its request to exceed the maximum property tax levy based on said emergency.
a. To qualify as an emergency, the financial impact of the event on the proposed property tax levy shall be equal to or greater than one quarter of one percent (1/4%) of the general fund budget or $100,000, whichever is lower, and must require financing from that general fund budget. The decision as to whether an event is an emergency situation should be based on a consideration and evaluation of all relevant and pertinent facts, including the legislative intent of R.I. Gen. Laws §
												44-5-2, as amended, and the standards and procedures set forth herein.
b. The chief executive officer and finance director of the municipal entity subject to R.I. Gen. Laws §
												44-5-2 (as amended) (as well as, the school superintendent and school business manager, when applicable) shall provide a written certification as to the financial facts in support of the request to the Auditor General. The municipal entity shall also certify that no other line items in the budget can be reduced, thereby avoiding the need to exceed the specified statutory limit. This certification shall be in a form prescribed by the Auditor General.
c. Pursuant to R.I. Gen. Laws §
												44-5-2 as amended, an emergency shall be deemed to exist when the municipal entity experiences or anticipates health insurance costs, retirement contributions or utility expenditures which exceed the prior fiscal year's health insurance costs, retirement contributions or utility expenditures by a percentage greater than three (3) times the percentage increase as specified in R.I. Gen. Laws §
												44-5-2(b). In these cases, the amount of the budget item expenditure to be considered as an emergency is the amount of the increase which exceeds three times the amount of the statutory limit. [Example: For the fiscal 2020 budget year, an increase in health insurance costs in excess of 12% of the amount in the fiscal year 2019 budget would categorically qualify for emergency approval.]
d. In addition to §
												1.2(A)(5)(c)     of this Part above, other events may be evaluated and deemed an emergency if they satisfy the criteria listed below. The following is a non-exhaustive list of the type of events which could be considered as an emergency situation:
(1) Extraordinary judgment on a claim against the municipal entity.
(2) Natural disaster (e.g., flood, fire, blizzard) or vandalism causing loss beyond insured amounts.
(3) Regulatory order requiring improvement of deficiencies in violation of safety, health standards, etc. (e.g., toxic wastes found in water, asbestos in schools).
(4) Court order.
(5) Unforeseen significant increase in budgeted cost of widely used product due to national or regional price increase (e.g., oil) requiring supplemental tax levy.
(6) Requirement that a municipal entity undertakes a new state or federally mandated program not funded by the state or federal government.
(7) Change in requirements of Generally Accepted Accounting Principles which would result in an accumulated deficit in excess of state statute (e.g., changes in how expenditures are recognized, property tax revenue recognition, etc.).
(8) Sudden demographic shifts which would require a change in services rendered (e.g., a significant change in school enrollment).
(9) Other unforeseen or unexpected events which are not the result of managerial decisions but are rather beyond the control of management, similar to those listed. The events must be identified as emergencies by the municipal entity and certified as such by the Auditor General.