Proposals to require a minimum balance in the city’s so-called “rainy day” fund and establish a 3-percent cap on local property tax increases have received the backing of the Charter Review Commission.

Chairman Steven Frias, who sponsored both amendments with commission member Matthew Reilly, framed the measures as a means of ensuring continued stability after what he described as “probably the best decade fiscally for this city since the 1980s.”

“I don’t want this opportunity to pass, and then some day, everything gets messed up, and people say, ‘Why didn’t you do something when you had the chance?’” he said.

The “rainy day” fund proposal was recommended on a 10-0 vote during the commission’s Feb. 19 meeting, while the tax cap was approved by a 7-3 margin.

On the split vote, Frias was joined by Vice Chairwoman Ellen O’Hara and commissioners Michael Lepizzera, Dan DosSantos, Edward Coccio, Joe Agresti and Matthew Reilly in the majority, while commissioners Katie Nee, Matthew Pallini and Robert Santurri Jr. dissented. Commissioner Evan Kirshenbaum was absent from the meeting.

The proposed charter amendment related to the “rainy day” fund – formally known as the undesignated fund balance – would require the city to maintain a reserve of no less than 5 percent of its operating budget. Mayor Allan Fung is supportive of the measure, while the City Council’s Democratic caucus is opposed.

According to BlumShapiro’s audit for the fiscal year that ended June 30, 2019, the city’s “rainy day” fund sits at approximately $18.3 million. That figure represents approximately 6 percent of the city’s $298 million operating budget for the current fiscal year.

Frias said the “rainy day” fund was among his first areas of focus when he reached out to the mayor to express interest in serving on the charter review panel. He spoke of the “financial crisis” that faced the city when its “rainy day” fund was exhausted in the early 2000s, and of his desire to codify safeguards that will help ensure such a situation “never happens again.”

He also echoed points Fung has made in support of creating a new minimum-funding requirement for the city’s reserve – specifically that financial ratings agencies look favorably on “rainy day” funds of between 5 and 10 percent of a community’s operating budget.

Reilly, for his part, called codifying the 5 percent minimum “imperative” and “one of the most important things this body can do this year.”

The proposed language does include an exception “for an unanticipated non-recurring expenditure arising from an emergency involving the health, safety or property of the residents of the City of Cranston.” Going below the 5 percent threshold in such a circumstance would require the approval of the mayor and two-thirds of the City Council.

In terms of the tax cap, Frias said the 3 percent figure was chosen because it is keeping with both the “historic rate of inflation” and the tax increases seen in recent years. He said most tax increases under Fung’s leadership have been under 2.5 percent.

“We have high taxes in this state, and trying to reduce that burden over time, I think, helps,” he said.

He added: “People don’t like tax increases, but if it’s a little bit, and it’s consistent with inflation, people can kind of figure out a way to pay for it within their budget.”

Reilly said he initially favored a “more extreme approach” in terms of limiting future tax increases but was supportive of the 3 percent figure – which he called a “more diplomatic approach” – based on discussions with Frias and others.

O’Hara said her time on the council in the late 1990s and early 2000s coincided with the “financial crisis” referenced by Frias.

“It was a disaster,” she said, adding: “Something like this is very welcome, it’s very structured. I think it will protect the citizens from the misdeeds of the council or the mayor when it does happen.”

Agresti also spoke in support of the tax cap, saying it “sends a larger message kind of to everybody” and provides valuable predictability for businesses and people on fixed incomes, such as senior citizens.

Others questioned the need for the lower local cap, given the existing provisions of state law.

“I think the state’s threshold of 4 percent is adequate,” Nee said.

Santurri called the proposal “extremely well thought out” but also doubted whether it is necessary, essentially arguing that voters can take action at the ballot box if they believe city officials are acting irresponsibly in terms of the city’s finances.

The tax cap language also provides an exemption, allowing the 3-percent increase to be exceeded through a four-fifths vote of the City Council and “at least one” of several special conditions outlined in state law. Those include the loss of state aid funding and emergency situations.

The commission also acted on several other charter amendment proposals.

A pair of measures sponsored by DosSantos seeking to extend the terms of City Council and School Committee members from two years to four years failed on an 8-2 vote. Reilly joined DosSantos in support of the proposals.

On 10-0 votes, the commission recommended measures seeking to eliminate local campaign finance filing requirements and to allow the use of email as a meeting notification mechanism for local officials. The former will be recommended for the 2022 election ballot.

Discussion of a proposal to eliminate the Cranston residency requirement for the positions of city solicitor and assistant city solicitor was delayed until the commission’s next meeting, which is scheduled for March 18.

Once the commission has completed its process, it will submit a report to the City Council outlining its recommendations – including whether proposed charter changes should appear on the 2020 or 2022 election ballots. The council will then determine which measures head before voters in November.