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Budget reserve, term limits among ballot questions

September 18, 2012

EAST PROVIDENCE — Voters in November will be asked to decide four referendum questions on the ballot, including amendments to the city charter that will establish a budget reserve fund, additional consolidation and reorganization of municipal departments, and four-year terms for the City Council and School Committee.
The referendum questions will be on the Nov. 6 ballot, which is headlined by the presidential contest.
In the first question, voters will be asked to approve a change to the city charter to allow the fiscal year to be changed by ordinance. The amendment would give the City Council the power to change the current fiscal year by ordinance. Today, the charter sets the fiscal year from Nov. 1 through Oct. 31. But because the current fiscal year is not consistent with the tax collection schedule, taxpayers pay for borrowing costs in excess of $325,000 annually to secure tax anticipation notes. The proposed change, proponents say, would save those costs, improve the city’s credit worthiness, and prevent potential cash deficits.
If the question is approved by voters, the city will develop a strategy to synchronize the fiscal and tax years by either a gradual transition or a synchronization bond in accordance with state law.
The second referendum question will ask voters to amend the charter to create a budget reserve fund.
This amendment would prevent the city from spending beyond 99 percent of the anticipated revenues in a fiscal year. If approved, starting in fiscal year 2013, the city would save one percent of its revenues, or about $1 million annually, and set it aside in a “rainy day fund.” If the city must borrow from the reserve fund under emergency circumstances, it will have to put the money back in three years.
Once the savings exceed 10 percent of the annual revenues, the extra amount will be used by the city to pay for capital projects such as maintaining, repairing and purchasing of equipment and buildings, which the city currently does not have enough funds to pay for. Taxpayers will not have to pay more because of this change.
The third referendum question will ask voters to amend the charter to to allow flexibility in further department consolidation and reorganization as well as access to more qualified candidates for city positions.
This charter amendment removes certain divisions of the Finance Department from the charter and allows the duties to be re-delegated within the department. It also allows for the reassignment of duties within departments and among departments.
As the city reorganizes its operations for better efficiency, and continues to consolidate departments with the school district, proponents of the measure say it will create more savings for taxpayers.
In the Finance Department, for example, a consolidation of controller and treasurer positions by not requiring separate city positions would save the city over $200,000 annually, including salaries and benefits. In addition, the proposed charter amendment brings the charter into compliance with state law by removing the residency requirement for certain employees.
It also establishes a preference in hiring for city residents so that the City Council can continue to take this factor into consideration when appointing employees to the positions of city clerk, city solicitor and probate judge. It also establishes the requirement for the city manager to reside within a 15 miles from the city.
The proposed change will also allow the city to access a larger pool of qualified, professional candidates when hiring and retaining in these positions, as well as to outsource selected functions if deemed in the best interest of the city; while allowing the city residency and commute distance to remain important when selecting candidates.
The fourth and final referendum question on the ballot will ask voters to amend the charter to establish four- year terms for members of the City Council and School Committee.
This proposed amendment would apply to those members elected to office in the 2014 election.
The extension to four-year terms, proponents say, will allow the council and committee members to gain experience when newly elected get better understanding of the budget process, put together legislative achievements and give the voters a longer measure of performance before the next election cycle.
Also, they say, incumbent members, upon re-election, would bring the benefit of long-term institutional knowledge to share with newly elected officials. In addition, the amendment brings the charter into compliance with current state law with regard to the School Committee terms, with no approved exception for East Providence.
Approval in November of all four questions would place the changes in the city charter where they could only be removed by a subsequent charter amendment through a public vote.
A vote to reject the questions on Nov. 6 would not place the changes in the charter.


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