MMA letter to Municipalities and Regional Government Committee supporting 50 provisions of governor’s ‘municipal modernization’ bill

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The Honorable James O’Day, House Chair
The Honorable Barbara L'Italien, Senate Chair
Joint Committee on Municipalities and Regional Government
State House, Boston
Dear Representative O’Day, Senator L’Italien, and Distinguished Committee Members,
On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association is writing to offer support for the important categories of reforms proposed in H. 3906, an Act Relative to Modernizing Municipal Finance and Government. H. 3906 includes select sections from H. 3905, an Act to Modernize Municipal Finance and Government, filed by the Governor on December 7, 2015. The legislation is intended to improve the effectiveness of local government by removing obsolete state laws and updating existing statutes to allow for greater efficiency at the local level.
We very much appreciate these welcome proposals, many of which MMA has testified in support of during this and previous legislative sessions. This is especially true of the sections referring to local control of liquor licenses (sections 209-220, 238, and 240), which has been a priority issue for many communities. This afternoon, we are submitting two letters of testimony on H. 3906. In this letter, we are commenting on 50 proposals covering 46 different topic areas, all of which would improve the effectiveness and efficiency of local government operations, and we ask you to support these provisions. We are also submitting an accompanying letter of testimony in strong support of local control over liquor licenses, and we ask for your strong support on that issue as well.
County Borrowing Technical Correction (Section 15)
This section would permit counties to borrow money for emergency purposes upon approval by the municipal finance oversight board, and not the currently required board composed of the attorney general, the state treasurer and the director of accounts.
Supervision of County Government 1 (Section 16)
This section would repeal provisions of the county finance statute that require DLS to review the accounts of county treasurers and other offices receiving money payable to the counties, prescribe accounting standards and provide technical assistance, and submit annual reports on county accounts to the Governor and Legislature. DLS does not perform these functions for any remaining county governments.
Supervision of County Government 2 (Section 17)
This section would repeal the provision of the county finance statute that requires DLS to submit county employee classification and compensation plans to county personnel boards, and to advise county commissioners and personnel boards on employment matters. DLS does not perform these functions for any remaining county governments.
Local Advertising 1 (Section 18)
This section would modify the public notice requirement for town warrants, which are required for every town meeting or election, to permit municipalities to post notice in any manner prescribed or approved under the Open Meeting Law, rather than through bylaw or attorney general approval as is currently required. The Open Meeting Law requires meeting notices to be posted in a manner “conspicuously visible” at all hours, or in another manner prescribed or approved by the attorney general, such as on the town’s website.
Local Advertising 2 (Sections 25-29, 36-39)
These sections would amend the public notice requirements for zoning by-laws or amendments, as well as associated public hearings notices. Current law requires posting of a recently approved zoning by-law or proposed amendment in a town bulletin or pamphlet in several locations in the town, or publication in costly newspapers, and cities are required to publish in newspapers. Public hearing notices must be published in newspapers and posted at the city or town hall. These sections would permit cities and towns to post all zoning-related notices in any manner prescribed or approved under the Open Meeting Law, and avoid the expensive mandated newspaper advertising costs. The paid advertising mandate is a relic of a bygone era when electronic communications and other effective notification technology and media did not exist.
Rental Revolving Fund (Section 19)
This section would allow cities and towns to create a revolving fund for proceeds from rental of surplus non-school properties, and would authorize expenditures without appropriation for upkeep of such properties. This is an expansion of current law, which authorizes a revolving fund only for the rental of surplus school properties.
City Reserve Funds (Section 20)
This section would increase the amount that cities may appropriate, as a reserve fund for extraordinary or unforeseen expenditures, from 3% to 5% of the tax levy for the preceding fiscal year. The 5% level conforms to the level currently authorized for towns and districts.
Stabilization Funds (Section 21)
This section would amend current law, which allows municipalities to create one or more stabilization funds, by permitting appropriations into the fund by majority vote and permitting the municipality, without appropriation, to dedicate all or a portion of particular revenue streams to the fund. This section would also eliminate the cap on the amount reserved, amounting to 10% of the prior year property tax levy, but retains the requirement to obtain a 2/3 vote to make appropriations from the fund.
Parking Local Acceptance (Sections 22-24)
The purpose of these sections is to allow revenue generated from parking meters to revert to the city or town’s general fund, unless specifically accepted by the city or town to be accounted for in a separate fund.
Collection Liens Non-Resident (Sections 30, 184)
There is a common statutory system that allows municipalities and districts, by local option, to establish liens when customers of municipal gas, electricity, steam, water and sewer utility services do not pay user charges when due. Lighting plants, water departments and sewer departments often provide utility services to ratepayers living in neighboring communities. However, only lighting plants may impose liens on non-paying customers located in those municipalities. This section would extend that option to municipalities and districts that provide water and sewer services to customers outside their borders.
Water and Sewer Commissions (Sections 40-41)
These sections would make a technical correction to the methods of local acceptance of statutory provisions creating local water and sewer commissions, by referencing the methods of local acceptance in c. 4, § 4, and clarifying that a water and sewer commission is an independent body politic. These sections are also intended to permit the commissions that enter into agreements with municipalities to have liens added to city or town tax bills and collected by the tax collector, rather than by the commissions.
Fine Collection (Section 48)
This section would revise municipal enforcement authority over violations of municipal housing, sanitary and ice removal requirements, by allowing the municipality to impose a lien on the related property, using the same procedures used for liens on real property for any unpaid local charge or fee.
Combine Treasurer Collector (Sections 49-50)
These sections would allow municipalities to combine their treasurers and tax collectors into one appointed position without first obtaining a special act.
Town Administrator Term (Section 51)
This section would increase the allowable term for an executive secretary or town administrator to serve, up to five years.
Appoint/Remove Finance Officers (Section 52)
This section would repeal three sections under which the Department of Revenue (DOR) may appoint, approve the appointment of or remove local finance officers, such as assessors, collectors, deputy collectors and treasurers, for non-performance. The statutes date back to a different era and are outdated given changes in the governance and operation of municipal finance offices. Responsibility and accountability for the performance of these officials belongs with the local appointing authority or the voters.
Direct Deposit (Section 53)
This provision would authorize any city or town, on a local option basis, to require the use of direct deposit when paying employees.
Approval Bills Warrants (Sections 54-55)
This section would allow multi-member boards, committees, and commissions heading departments, including boards of selectmen, to designate one of its members to review and approve bills or payment warrants, with a report provided at the next meeting. Currently, a board or committee heading a department may delegate authority to approve payrolls to a member and a regional school committee may designate a subcommittee to approve bills and payrolls with a report to the next meeting of full committee. Absent a charter or special act, boards and committees are currently required to conduct the routine business of approving bills or payment warrants by majority vote at a meeting subject to the Open Meeting Law, adding unnecessary time and delay to the payment process, especially when boards meet less than weekly.
Injured on Duty Fund (Section 57)
This section would allow municipalities to create, appropriate money to and expend from a special injury leave indemnity fund for payment of police officer and firefighter injury leave compensation or medical bills, rather than charging them to current departmental appropriations.
CEO Initiated Charter (Sections 58-59)
These sections would allow selectmen or mayors to initiate movement to optional forms of municipal administration by a charter commission. This would provide flexibility in initiating governance changes, all of which require a referendum as a charter change. Currently, a citizen petition process is the only avenue to initiate a charter commission.
Debt Purposes (Sections 60, 62-63, 170, 172)
These sections are intended to modernize and simplify the current laws that authorize cities, towns and districts to borrow by consolidating, updating and restructuring the allowable borrowing purposes. The provisions would also allow borrowing for a court judgment for more than one year if approved by the Municipal Finance Oversight Board.
Grant Anticipation Notes (Section 61)
This section would broaden current law to allow municipalities to borrow in advance of any state or federal grant – advance or reimbursable. This would update the statute to add federal grants and reflect changes in state grant administration, as fewer advance grants that can be spent without appropriation are being made.
Ten-Year BANs (Section 64)
This section would amend current law to allow 10-year bond anticipation notes (BANs) with the same required principal paydown as current law, in order to provide treasurers greater flexibility in structuring debt, particularly for smaller purchases or projects.
Refunding Bonds (Sections 65, 67)
These sections would allow final payment of the original debt schedule to be made no later than June 30 of the fiscal year that payment is otherwise due, instead of on the annual anniversary of prior payments. These sections would also make a technical change to the refunding procedures and payment schedule – allowing the first principal payment of refunding bonds to be due no later than June 30 of the fiscal year the payment would have otherwise been due. The payment would still be required in the same fiscal year and could not be deferred to another fiscal year.
Bond Premiums and Surplus Proceeds (Section 66)
This section would amend current law by providing communities with a choice regarding how to treat bond premiums, net of issuance costs. Communities would be able to either apply it to the issuance, thereby reducing the amount needed to borrow, or place it is a separate fund and appropriate it for a capital project. The section would also amend current law by increasing the amount of surplus bond proceeds that could be applied to debt service from $1,000 to $50,000.
Lease Purchase (Section 68)
This section would establish a procedure governing the use of tax-exempt lease-purchase financing agreements (TELPs) by municipal departments and would allow borrowing to pay off a TELP if said payment would result in interest savings.
Eliminate Debt Report (Section 69)
This section would eliminate the requirement that the municipal treasurer notify the director of accounts when a payment is made. This would end a practice that duplicates notifications, as the annual year-end statement of indebtedness already shows changes in debt levels over the course of the year.
Emergency Spending (Section 70)
This section would amend current law to provide for automatic approval of payments for liabilities incurred as a result of emergencies and disasters, when the Governor declares a state of emergency.
Court Judgments (Sections 71-72)
This section would amend current law to allow payment without appropriation of final court judgments and other final adjudicatory claims with municipal counsel certification. Currently, such payments over $10,000 require the approval of the director of accounts. Further, these provisions would amend the statute to reflect the current operating environment, as obligations to make immediate payments based on various legal claims now are just as likely to result from decisions of administrative agencies, not only court judgments.
Snow and Ice Removal (Section 73)
This section would eliminate the need for prior approval for deficit spending for snow and ice removal by the council or selectboard, and would require only that the chief administrative office of the municipality authorize deficit spending.
Year End Transfers (Sections 74-75)
These sections would eliminate the limits on the types and amounts of appropriation transfers that can be made by the selectmen with finance committee approval at end of year. This would allow end-of-fiscal-year transfers from health insurance, debt service or other unclassified/non- departmental line item appropriations and would eliminate a cap of 3% on the amount that may be transferred from any department. School and light department line items would remain exempt from this procedure. Eliminating the cap on transfers would provide for greater flexibility in avoiding deficits and eliminate the need to conduct additional town meeting sessions by July 15 to approve minor transfers.
Director Powers (Sections 76 – 81, 174, 205)
These sections would make several updates to statutes governing municipal audit and accounting systems to reflect the current focus of state oversight on establishing uniform accounting and reporting standards, ensuring periodic audits and instituting best practices based on end of year reports, local management reviews and DLS reviews of cities, towns and special purpose districts. These changes would be made by repealing or amending a number of statutes that have not been updated in years and anachronistically reflect the original mission of the Bureau of Accounts to install accounting systems, conduct financial and forensic audits and investigations of cities, towns and districts.
Insurance / Restitution Funds (Section 82)
This section would amend the statute that requires all municipal receipts to be deposited to the general fund and be appropriated. Current statute includes several exceptions that allow certain receipts to be spent without appropriation for particular purposes, including insurance and restitution proceeds. This section would increase the amount that may be spent without appropriation to restore or replace the damaged property from $20,000 to $150,000 and would update the lost or damaged schoolbooks and materials restitution exception to include electronic devices and equipment provided to students.
Grant Available Fund (Section 83)
This section would make all reimbursable grants from federal or state government available for appropriation once approved by the granting agency. The proposed amendment would eliminate the need for the Director of Account’s approval in future bond bills for G.L. ch. 90 grant funds, and would broaden the immediate availability of other reimbursable grants for expenditure.
Departmental Revolving Fund (Sections 84- 85)
These sections would amend revolving funds statutes to provide more flexibility by eliminating the departmental per fund and total fund caps, broadening the types of departmental receipts with which funds can be established, and allowing revolving funds to be established by bylaw or ordinance. These sections would also repeal the statute that governs revolving funds for parks and recreation program fees, as this separate statute would not be necessary under these proposals to increase departmental flexibility over revolving funds.
Compensating Balance (Section 86-88)
These sections are intended to remove DOR’s role in prescribing types of services and in receiving reports on municipal agreements with banking institutions for “compensating balance” agreements. However, these sections would still require that the treasurer or collector of a municipality produce the report and submit it to local officials and the inspector general.
Refundable Consulting Fees (Section 89)
Current law allows certain municipal permitting boards to impose consultant fees to pay the costs of reviewing applications for permits or licenses, including zoning special permits, subdivision control, comprehensive permits, board of health permits, and conservation commission permits. The statute would allow the board to spend the fees for consulting services, and if monies remain after the board makes its determination, to refund them to the applicant, without appropriation. This amendment would expand the use of special funds to include consulting fees charged by any municipal officer or board with permitting authority where the imposition of fees for outside consultants is established by its own rule-making authority, statute, ordinance or by-law.
Performance Deposits (Section 90)
This section would add a provision to allow municipalities to set up escrow accounts for refundable cash performance deposits and set standards for administration, investment and expenditure upon default.
Special Events Fund / Mitigation & Permitting / Betterment Reserve (Section 91)
This section would amend and allow three special revenue funds. The first would broaden the municipal celebration fund to include any special event. The second would specifically reserve betterment and special assessment revenue for appropriation for the payment of debt service on any bonds issued to finance the improvements for which the betterments were assessed. The third would allow mitigation or other monies derived from, or in connection with, an agreement or licensure or permitting obligation to be reserved and spent for the purposes for which they were received.
Revenue Cash Investment (Section 92)
This section would amend current law to permit investment in certificates of deposit (CDs) for up to 3 years, an increase from the current 1-year limitation. This change would also address an ambiguity in the statute as to whether a 1-year limit applies to these investments or solely to investments in United State treasuries. Section 92 would provide treasurers more flexibility in achieving an enhanced rate of return in very secure short-term instruments.
Insufficient Fund Payment Penalty (Sections 93-94)
These sections would amend the process for appealing penalties imposed on individuals who tender a check for local fees with insufficient funds, requiring the individual to appeal at the local level, rather than with the DOR Commissioner. These sections would further amend the statute to cover electronic payments that are made with insufficient funds.
Elections 1 (Section 96-98)
These sections would require municipalities to hold voter registration sessions on the last day of registration from 9:00 a.m. until at least 5:00 p.m., but no later than 8:00 p.m. (the official deadline is 8:00 p.m.), and, for towns with fewer than 1,500 voters, from 2:00 to 5:00 p.m. This is a change from current law, which requires sessions to last continuously from 9:00 a.m. to 8:00 p.m., and, for town with fewer than 1,500 voters, from 2:00 to 4:00 p.m., and 7:00 to 8:00 p.m.
Elections 2 (Section 99)
This section is taken from H. 587, which would permit municipalities to use “electronic poll books,” in lieu of paper voting lists, at polling stations. The section would require poll books to produce a receipt with a voter’s name, address, date of birth, and voter identification number, and requires the election worker at the check-out table to accept the receipt before permitting the voter to deposit his or her ballot.
Elections 3 (Section 100)
This section would give discretion to the presiding officer of each polling place to determine the most expedient manner in which to conduct the “dual check off” procedure under ch. 54, § 67, which requires voter names to be checked both when handing the voter a ballot and after the individual has cast his or her vote.
RMV E-Citations (Sections 187-203)
These sections would make various changes to ch. 90C, regarding motor vehicle offenses, to implement the new “E-Citations” project jointly administered by EOPSS and the RMV. The changes would amend definitions and other references to paper citations to include electronically issued citations, give EOPSS authority to promulgate regulations to set standards for E-citations and associated equipment requirements, and ensure that both paper and electronic copies of citations are properly delivered by police departments to the RMV and district courts.
Veterans Service District (Section 204)
This section would remove the current restriction that prevents two cities from sharing a veterans’ service director. This would provide for greater flexibility in providing for effective and efficient operation of veteran services.
Municipal Debt/Urban Renewal (Sections 206-208)
This amendment would repeal a duplicative requirement regarding approval of debt issued by cities and towns to support housing and urban renewal projects, as cities and towns are subject to an overall debt limit under G.L. ch. 44, § 10, which may be exceeded with approval of MFOB. In addition, the statute still refers to the Emergency Finance Board (EFB) rather than the Municipal Finance Oversight Board (MFOB).
Double Poles (Section 232)
This section would allow cities and towns to enforce the statutory prohibition on keeping double poles up after ninety days, after passing a local ordinance authorizing them to do so. Authorized penalties would be limited to a ceiling of $1,000 per occurrence.
Registers of Probate (Sections 233, 249)
This section would require registrars of probate to provide assessors with copies of petitions upon request. Assessors are charged with knowledge of records of registry of deeds and probate regarding ownership of real estate, but only registrars of deeds are required to provide them with information on transactions relating to title of real estate within their municipality. This would allow assessors to access names of deceased so they can check against their records and set up a mechanism to track and review later for disposition of property.
Small Claims Actions (Sections 234-235)
This section would amend the jurisdiction of small claims court to hear all cases to collect locally assessed personal property taxes regardless of amount. This would provide tax collectors with the ability to more effectively use lawsuits as a remedy to collect delinquent property taxes where there is personal liability only.
Federal Public Work Borrowing (Section 236-237)
This section would eliminate the requirement that the Governor approve local borrowing for federally funded public works projects and would substitute the municipal finance oversight board in place thereof.
We look forward to meeting with Committee members and staff regarding these municipal modernization and reform provisions. Cities and towns are eager to update and modernize their municipal practices, but they cannot do so without these common-sense changes to the General Laws.
Thank you very much for your interest in this very important local government matter. If you have any questions, please contact MMA Legislative Director John Robertson at (617) 426-7272 or at any time.
Geoffrey C. Beckwith
Executive Director & CEO