SECTION 14. Reserve to provide for extraordinary and unseen expenditures

Any city or town accepting the provisions of this chapter pursuant to section thirteen shall also establish a reserve to provide for extraordinary and unforeseen expenditures. Prior to the date when the tax rate for a fiscal year is fixed each city or town shall include in the appropriations for such fiscal year as a segregated reserve fund a sum not less than one per cent nor more than five per cent of the tax levy of the then current fiscal year; provided, however, that the amount required to be appropriated for such reserve fund in any fiscal year may be reduced by the amount, if any, remaining in the reserve fund established for the preceding fiscal year after all transfers have been made therefrom as hereinafter authorized, and such remaining amount shall be retained in the reserve fund provided for such fiscal year. Any direct draft or transfer against this fund shall be made by the mayor only with the approval of the city council, and in a city having a Plan D or Plan E form of charter only after approval by the city council with the consent of the city manager, or by the appropriating authority as specified in the charter of the city or town. Each draft or transfer made by the mayor, manager or board of selectmen shall be accompanied by written documentation detailing the amount of such draft or transfer and an explanation of the reason for the draft or transfer. If the reserve fund for a fiscal year beginning on or after July first, nineteen hundred and eighty-seven, is exhausted through transfers and the city incurs an appropriation or revenue deficit in such fiscal year, the reserve fund appropriation requirement shall increase by fifty per cent for the fiscal year following such fiscal year up to an amount no greater than five per cent of the tax levy of the current fiscal year. Notwithstanding the provisions of any general or special law to the contrary, the reserve fund established pursuant to this section shall become effective for the fiscal year beginning July first, nineteen hundred and eighty-six. For the purpose of this section, a city or town shall be defined as a community with a population in excess of one hundred and fifty thousand inhabitants.