HB 5253 Summary

• Upon confirmation of a financial emergency, local governments must select within 7 days one of four options: consent agreement, emergency manager, neutral evaluation process, or Chapter 9 bankruptcy.

• Local governments that fail to pass a required resolution selecting an option automatically proceed under the neutral evaluation process rather than defaulting to emergency manager appointment.

• Emergency managers must serve at least 18 months before the local governing body can remove them by 2/3 vote; after removal, the local government may negotiate a consent agreement or proceed to neutral evaluation.

• If a local government is removed from receivership while a financial emergency continues, it may negotiate a consent agreement within 10 days or proceed to neutral evaluation, notwithstanding the one-use-only restriction on emergency management options.

• Emergency manager compensation is paid by the state and set by contract approved by the state treasurer, with contracts posted on the department of treasury website within 7 days of approval.