(a) The chief elected official of a municipality, or the legislative body of such municipality, by majority vote, may apply to the secretary to request designation as a tier III municipality if any of the following conditions exist: (1) The municipality has at least one bond rating from a bond rating agency that is below investment grade, or (2) the municipality has no bond rating from a bond rating agency, or, if its highest bond rating is A, Baa or BBB, provided the municipality has no rating that is not investment grade, and it has either (A) a negative fund balance percentage, or (B) an equalized mill rate that is thirty or more and it receives thirty per cent or more of its current or prior fiscal year general fund budget revenues were or are in the form of municipal aid from the state. Prior to submission of such request by a chief elected official, such official shall provide notice of intent to apply for such designation to the legislative body of such municipality. Such legislative body shall have thirty days from receipt of such notice to approve or reject the chief elected official's decision to submit such a request. If such legislative body does not approve or reject such decision during such thirty-day period, the chief elected official's decision to submit such request shall be deemed approved by such legislative body. The secretary shall designate a municipality as tier III if: (i) A municipality meets either condition described in subdivision (1) or (2) of this subsection and based on reports and findings of the Municipal Finance Advisory Commission, the secretary finds that the fiscal condition of the municipality warrants such designation, (ii) the municipality issues refunding bonds that (I) have a term of more than twenty-five years, (II) do not achieve net present value savings pursuant to the provisions of section 7-370c, and (III) have annual debt service obligations associated with any existing debt and such refunding bonds in any year that are greater than the first full year debt service obligation following the issuance of such refunding bonds, or (iii) the municipality issues a deficit obligation or has issued a deficit obligation in the five years preceding July 1, 2017.
(b) The secretary shall refer any municipality that is a designated tier III municipality to the Municipal Accountability Review Board established pursuant to the provisions of section 7-576d.
(c) Notwithstanding any provision of this section, no municipality shall be designated a tier III municipality prior to July 1, 2018, by any means other than an application as described in subsection (a) of this section, except a municipality with a population of one hundred twenty thousand or more that has a bond rating of Caa1 or less.
(June Sp. Sess. P.A. 17-2, S. 366.)
History: June Sp. Sess. P.A. 17-2 effective October 31, 2017.