Fancy Funding Deals That Skirt the Law Should Be Avoided


On Tiverton Fact Check, I’ve detailed an example of how the town government appropriates money in a way that (let’s say) conflicts with the clear language of the town’s Home Rule Charter:

The complicating factor is that the vote [to create a restricted revenue source for pay-as-you-throw trash bag revenue] was taken as a resolution in the FTM docket, which should have made it valid for the duration of that year’s budget only. Resolutions have to be renewed each year, and the PAYT restricted account has not been renewed. In other words, the town has been putting that money into a restricted account illegally for six years. To avoid an annual vote, the council would have to present voters with an opportunity to write the account into the charter or provide some other vote akin to a bond approval, making clear to voters that the restricted account will go on forever, or end at some future date.

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To some extent, these sorts of things should be expected.  Local government generally consists of people who aren’t government experts and who often see themselves as engaged in a sort of volunteer service; process rules can therefore seem frustrating and unreasonable.  Additionally, in a council-based system, they’re often overseeing a rolling series of town managers and solicitors who lack a long-term institutional knowledge (which is just objective fact) and have financial incentive to tell the council that it can do what its members want to do (which can be corrupt).

In my view, that’s a reason to keep government limited.  If a transaction is too technically or politically complex for a council and well-paid staff to make it under the clear rules of the law, then it shouldn’t be done.  In this case, the council created a new rubbish fee without taking additional steps that would have required additional votes of the public, which sounds quite a bit like the proposed PawSox stadium deal, specifically, and moral obligation bonds, in general.

I often wonder how many similar examples could be found throughout Rhode Island if residents were to make a dedicated practice of combing through their municipal governments’ audits.