May 8, 2014, Introduced by Reps. Kivela and Walsh and referred to the Committee on Detroit's Recovery and Michigan's Future.
A bill to amend 1909 PA 279, entitled
"The home rule city act,"
(MCL 117.1 to 117.38) by adding sections 4s and 4t.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 4s. (1) Notwithstanding a charter provision or ordinance
to the contrary, a city with a population of more than 600,000
shall establish the position of chief financial officer. The mayor
of the city shall appoint the chief financial officer subject to
the approval of the governing body of the city, and, if applicable,
the oversight commission created in the oversight commission act.
Nothing in this section shall be construed to prevent a city with a
population of more than 600,000 from adopting a charter provision
or ordinance providing the responsibilities for a chief financial
officer that are not inconsistent with this section.
(2) The chief financial officer appointed under subsection (1)
shall report to the mayor and do all of the following:
(a) Supervise all financial and budget activities of the city.
(b) Coordinate the city's activities relating to budgets,
financial plans, financial management, financial reporting,
financial analysis, and compliance with the budget and financial
plan of the city. If applicable, the functions and responsibilities
of the chief financial officer shall be subject to approval by the
oversight commission created in the oversight commission act.
Sec. 4t. (1) Notwithstanding a charter provision or ordinance
to the contrary, for a city with a population of more than 600,000,
all of the following apply:
(a) The city and its officers, employees, agents, and
contractors shall comply with the oversight commission act, if
applicable.
(b) For each fiscal year beginning after the effective date of
the amendatory act that added this section, the city shall adopt a
financial plan covering that fiscal year and the next 3 fiscal
years. If a 2-year budget is in effect for the city under section
21 of the local financial stability and choice act, 2012 PA 436,
MCL 141.1561, the financial plan must be consistent with the 2-year
budget. The financial plan shall be proposed by the mayor and
approved by the governing body of the city. If applicable, a
financial plan must be approved by the oversight commission created
in the oversight commission act before it takes effect. A financial
plan shall include, but not be limited to, all of the following
information for each of the 4 fiscal years covered by the financial
plan:
(i) A projection of all revenues and expenditures of the city
for each fiscal year, including debt service.
(ii) A projection of cash flow for each fiscal year.
(iii) A schedule of projected capital commitments for each
fiscal year.
(iv) Measures to assure that projected employment levels,
collective bargaining agreements, and other employee costs are
consistent with projected expenditures and available revenue.
(v) Measures to assure compliance with mandates under state
and federal law consistent with projected expenditures and
available revenue.
(vi) Measures to assure adequate reserves for mandated and
other essential programs and activities in the event of an
overestimation of revenue, an underestimation of expenditures, or
both.
(vii) A statement of significant assumptions and methods of
estimation used for projections included in the financial plan.
(viii) Any other information the mayor, governing body, or chief
financial officer of the city considers appropriate.
(c) A financial plan adopted under subdivision (b) shall
comply with all of the following requirements:
(i) Projected revenues and expenditures for each fiscal year
covered by the financial plan shall result in a balanced budget
according to generally accepted accounting principles, including
compliance with the uniform budgeting and accounting act, 1968 PA
2, MCL 141.421 to 141.440a.
(ii) Include contributions necessary to assure that pension
systems for employees and retirees of the city are fully funded.
(iii) Provide for the issuance of or incurring of debt by the
city only in compliance with the revised municipal finance act,
2001 PA 34, MCL 141.2101 to 141.2821, and the oversight commission
act, if applicable.
(iv) Provide for the payment in full of debt service on all
debt issued or incurred by or on behalf of the city.
(v) Provide for operations of the city to be conducted with
projected cash resources based upon projected cash flow for each
fiscal year.
(vi) Include a general reserve fund for each fiscal year to
cover potential reductions in projected revenues or increases in
projected expenditures equal to not less than 5% of the projected
expenditures for the fiscal year.
(vii) For each fiscal year, provide for the elimination of any
deficit incurred in the prior fiscal year according to generally
accepted accounting principles.
(viii) Rely upon revenue and expenditure projections based upon
reasonable and appropriate assumptions and methods of estimation.
(ix) Rely upon cash flow projections based upon reasonable and
appropriate assumptions as to sources and uses of cash, including
timing.
(d) The city shall hold a revenue estimating conference in the
second week of September and in the third week of February of each
year. A revenue estimating conference shall be subject to all of
the following:
(i) The principals of a conference shall be the chief financial
officer of the city, the state treasurer or his or her designee
from within the department of treasury, and a person affiliated
with another public entity, including a state institution of higher
education, with experience in economic forecasting and revenue
projection selected by the chief financial officer of the city and
the state treasurer.
(ii) A conference shall establish an official economic forecast
of major variables of the national, state, and local economies. A
conference also shall establish a forecast of anticipated revenues
of the city as the conference determines.
(iii) The official forecast of economic and revenue variables of
the conference shall be determined by consensus among the
conference principals and shall be for the fiscal year in which the
conference is being held and the succeeding 2 fiscal years. The
conference also shall forecast general fund revenue trendline
projections for the city for an additional 2 fiscal years.
Conference forecasts of revenues and expenditures shall be based
upon the assumption that current law and administrative procedures
will remain in effect for the forecast period.
(iv) The conference may request and shall receive from
officers, departments, agencies, and authorities of the city the
assistance and data needed to enable the conference to fulfill its
duties.
(v) The principals of the conference shall determine
procedures to be used by the conference including procedures for
conference sessions and presentations by persons, except that any
final action establishing an official forecast shall require the
unanimous support of all principals. A conference shall complete
its work within a period of not more than 5 days unless extended by
consensus of the principals.
(vi) Meetings of a conference are subject to the open meetings
act, 1976 PA 267, MCL 15.261 to 15.275.
(vii) A principal shall preside over conference sessions,
convene conference sessions, and specify topics to be included on
the conference agenda. The responsibility of presiding over
sessions of the conference shall be rotated annually among the
principals, with the initial chairperson being elected by the
principals. The chairperson presiding over a conference is
responsible for setting the conference date and preparing and
distributing the necessary documents before the conference,
including comparisons between alternative information where a
comparison is warranted. Upon the written request of a principal, a
conference shall be convened by the chairperson.
(viii) A writing prepared, owned, used, in the possession of, or
retained by the conference in the performance of an official
function is subject to the freedom of information act, 1976 PA 442,
MCL 15.231 to 15.246.
(ix) A conference shall distribute its economic and revenue
forecasts to the mayor of the city, the governing body of the city,
and, if subject to the oversight commission act, the oversight
commission. The city shall publish the forecasts on its website.
(x) If the city is subject to the oversight commission act,
the city may be required to amend its revenue estimates pursuant to
an order or directive of the oversight commission created in the
oversight commission act.
(e) The mayor of the city may veto a line item appropriating
money in an appropriations ordinance. The portion of the
appropriation approved is effective. The item disapproved is void
unless reauthorized according to the procedures prescribed in
charter or law for the adoption of ordinances over a veto. The
mayor may authorize by executive order the reduction of line-item
expenditures during a fiscal year.
(2) For the fiscal year ending September 30, 2015, $100,000.00
is appropriated from the general fund/general purpose to the
department of treasury to administer the provisions of this section
and section 4s.