2012 -- S 3006

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LC02686

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

AUTHORIZING THE TOWN OF COVENTRY TO FINANCE SYSTEM-WIDE ROOF

REPAIRS AND REPLACEMENTS FOR SCHOOLS AND SCHOOL FACILITIES IN THE

TOWN BY THE ISSUANCE OF NOT MORE THAN $5,000,000 BONDS, NOTES AND/OR

OTHER EVIDENCES OF INDEBTEDNESS THEREFOR

     Introduced By: Senators Shibley, and Kettle

     Date Introduced: May 24, 2012

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. The town of Coventry is hereby empowered, in addition to authority

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previously granted, to issue bonds and other evidences of indebtedness (hereinafter “bonds”) up

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to an amount not exceeding five million dollars ($5,000,000) from time to time under its

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corporate name and seal or a facsimile of such. The bonds of each issue may be issued in the

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form of serial bonds or term bonds or a combination thereof and shall be payable either by

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maturity of principal in the case of serial bonds or by mandatory sinking fund installments in the

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case of term bonds, in annual installments of principal, the first installment to be not later than

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five (5) years and the last installment not later than thirty (30) years after the date of the bonds.

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All such bonds of a particular issue may be issued in the form of zero coupon bonds, capital

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appreciation bonds, serial bonds or term bonds or a combination thereof. The amount of principal

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appreciation each year on any bonds, after the date of original issuance, shall not be considered to

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be principal indebtedness for the purposes of any constitutional or statutory debt limit or any

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other limitation. The appreciation of principal after the date of original issue shall be considered

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interest. Only the original principal amount shall be counted in determining the principal amount

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so issued and any interest component shall be disregarded.

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     SECTION 2. The bonds shall be signed by the manual or facsimile signatures of the town

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director of finance and the president of the town council and shall be issued and sold in such

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amounts as the town council may authorize by resolution. The manner of sale, denominations,

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maturities, interest rates and other terms, conditions and details of any bonds or notes issued

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under this act may be fixed by the proceedings of the town council authorizing the issue or by

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separate resolution of the town council or, to the extent provisions for these matters are not so

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made, they may be fixed by the officers authorized to sign the bonds. The proceeds derived from

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the sale of the bonds shall be delivered to the town director of finance, and such proceeds

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exclusive of premiums and accrued interest shall be expended: (a) For system-wide roof repairs

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and replacements for schools and school facilities in the town; (b) In payment of the principal of

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or interest on temporary notes issued under section 3; (c) In repayment of advances under section

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4; (d) In payment of related costs of issuance of any bonds or notes; and/or (e) In payment of

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capitalized interest during construction of the project (the "project"). No purchaser of any bonds

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or notes under this act shall be in any way responsible for the proper application of the proceeds

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derived from the sale thereof. The project shall be carried out and all contracts made therefor on

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behalf of the town by the town council. The proceeds of bonds or notes issued under this act, any

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applicable federal or state assistance and the other monies referred to in sections 6 and 9 shall be

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deemed appropriated for the purposes of this act without further action than that required by this

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act. The bonds authorized by this act may be consolidated for the purpose of issuance and sale

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with any other bonds of the town heretofore or hereafter authorized, provided that,

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notwithstanding any such consolidation, the proceeds from the sale of the bonds authorized by

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this act shall be expended for the purposes set forth above.

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     SECTION 3. The town council may by resolution authorize the issuance from time to

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time of interest bearing or discounted notes in anticipation of the issuance of bonds or in

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anticipation of the receipt of federal or state aid for the purposes of this act. The amount of

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original notes issued in anticipation of bonds may not exceed the amount of bonds which may be

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issued under this act and the amount of original notes issued in anticipation of federal or state aid

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may not exceed the amount of available federal or state aid as estimated by the director of

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finance. Temporary notes issued hereunder shall be signed by the manual or facsimile signatures

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of the town director of finance and the president of the town council and shall be payable within

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five (5) years from their respective dates, but the principal of and interest on notes issued for a

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shorter period may be renewed or paid from time to time by the issuance of other notes

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hereunder, provided the period from the date of an original note to the maturity of any note issued

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to renew or pay the same debt or interest thereon shall not exceed five (5) years. Any temporary

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notes in anticipation of bonds issued under this section may be refunded prior to the maturity of

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the notes by the issuance of additional temporary notes, provided that no such refunding shall

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result in any amount of such temporary notes outstanding at any one time in excess of two

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hundred percent (200%) of the amount of bonds which may be issued under this act, and provided

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further that if the issuance of any such refunding notes results in any amount of such temporary

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notes outstanding at any one time in excess of the amount of bonds which may be issued under

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this act, the proceeds of such refunding notes shall be deposited in a separate fund established

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with the bank which is paying agent for the notes being refunded. Pending their use to pay the

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notes being refunded, moneys in the fund shall be invested for the benefit of the town by the

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paying agent at the direction of the town director of finance in any investment permitted under

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section 5. The moneys in the fund and any investments held as part of the fund shall be held in

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trust and shall be applied by the paying agent solely to the payment or prepayment of the

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principal of and interest on the notes being refunded. Upon payment of all principal of and

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interest on the notes, any excess moneys in the fund shall be distributed to the town. The town

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may pay the principal of and interest on notes in full from other than the issuance of refunding

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notes prior to the issuance of bonds pursuant to section 1 hereof. In such case, the town’s

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authority to issue bonds or notes in anticipation of bonds under this act shall continue provided

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that (1) the town council passes a resolution evidencing the town’s intent to pay off the notes

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without extinguishing the authority to issue bonds or notes and (2) that the period from the date of

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an original note to the maturity date of any other note shall not exceed five (5) years.

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     SECTION 4. Pending any authorization or issue of bonds hereunder or pending or in lieu

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of any authorization or issue of notes hereunder, the town director of finance, with the approval of

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the town council, may, to the extent that bonds or notes may be issued hereunder, apply funds in

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the treasury of the town to the purposes specified in section 2, such advances to be repaid without

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interest from the proceeds of bonds or notes subsequently issued or from the proceeds of

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applicable federal or state assistance or from other available funds.

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     SECTION 5. Any proceeds of bonds or notes issued hereunder or of any applicable

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federal or state assistance, pending their expenditure may be deposited or invested by the town

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director of finance in demand deposits, time deposits or savings deposits in banks which are

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members of the Federal Deposit Insurance Corporation or in obligations issued or guaranteed by

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the United States of America or by any agency or instrumentality thereof or as may be provided

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in any other applicable law of the State of Rhode Island or resolution of the town council or

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pursuant to an investment policy of the town.

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     SECTION 6. Any accrued interest received upon the sale of bonds or notes hereunder

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shall be applied to the payment of the first interest due thereon. Any premium arising from the

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sale of bonds or notes hereunder shall, in the discretion of the town director of finance, be applied

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to the cost of preparing, issuing and marketing bonds or notes hereunder to the extent not

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otherwise provided, to the payment of the project costs, to the payment of the principal of or

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interest on bonds or notes issued hereunder or to any one or more of the foregoing. The cost of

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preparing, issuing and marketing bonds or notes hereunder may also, in the discretion of the town

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director of finance, be met from bond or note proceeds exclusive of accrued interest or from other

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moneys available therefor. Any balance of bond or note proceeds remaining after payment of the

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cost of the projects and the cost of preparing, issuing and marketing bonds or notes hereunder,

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shall be applied to the payment of the principal of or interest on bonds or notes issued hereunder.

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To the extent permitted by applicable federal laws, any earnings or net profit realized from the

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deposit or investment of funds hereunder may, upon receipt, be added to and dealt with as part of

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the revenues of the town from property taxes. In exercising any discretion under this section, the

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town director of finance shall be governed by any instructions adopted by resolution of the town

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council.

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     SECTION 7. All bonds and notes issued under this act and the debts evidenced thereby

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shall be obligatory on the town in the same manner and to the same extent as other debts lawfully

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contracted by it and shall be excepted from the operation of section 45-12-2 of the general laws.

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No such obligation shall at any time be included in the debt of the town for the purpose of

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ascertaining its borrowing capacity. The town shall annually appropriate a sum sufficient to pay

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the principal and interest coming due within the year on bonds and notes issued hereunder to the

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extent that moneys therefor are not otherwise provided. If such sum is not appropriated, it shall

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nevertheless be added to the annual tax levy. In order to provide such sum in each year and

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notwithstanding any provision of law to the contrary, all taxable property in the town shall be

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subject to ad valorem taxation by the town without limitation as to rate or amount.

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     SECTION 8. Any bonds or notes issued under the provisions of this act, and coupons, if

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any, if properly executed by officers of the town in office on the date of execution, shall be valid

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and binding according to their terms notwithstanding that before the delivery thereof and payment

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therefor any or all of such officers shall for any reason have ceased to hold office.

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     SECTION 9. The town, acting by resolution of its town council, is authorized to apply

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for, contract for and expend any federal or state advances or other grants or assistance which may

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be available for the purposes of this act, and any such expenditures may be in addition to the

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moneys provided in this act. To the extent of any inconsistency between any law of this state and

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any applicable federal law or regulation, the latter shall prevail. Federal and state advances, with

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interest where applicable, whether contracted for prior to or after the effective date of this act,

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may be repaid as project costs under section 2.

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     SECTION 10. Bonds and notes may be issued under this act without obtaining the

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approval of any governmental agency or the taking of any proceedings or the happening of any

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conditions except as specifically required by this act for such issue. In carrying out any project

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financed in whole or in part under this act, including where applicable the condemnation of any

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land or interest in land, and in the levy and collection of assessments or other charges permitted

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by law on account of any such project, all action shall be taken which is necessary to meet

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constitutional requirements whether or not such action is otherwise required by statute, but the

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validity of bonds and notes issued hereunder shall in no way depend upon the validity or

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occurrence of such action.

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     SECTION 11. The town director of finance and the president of the town council, on

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behalf of the town, are hereby authorized to execute such instruments, documents or other papers

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as either of them deem necessary or desirable to carry out the intent of this act and are also

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authorized to take all actions and execute all instruments, documents or agreements necessary to

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comply with federal tax and securities laws, which instruments, documents or agreements may

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have a term coextensive with the maturity of the bonds authorized hereby, including Rule 15c2-

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12 of the Securities and Exchange Commission (the “Rule") and to execute and deliver a

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continuing disclosure agreement or certificate in connection with the bonds or notes in the form

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as shall be deemed advisable by such officers in order to comply with the Rule.

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     SECTION 12. All or any portion of the authorized but unissued authority to issue bonds

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and notes under this act may be extinguished by ordinance of the town council after seven (7)

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years shall have passed from the approval of this act provided for in section 13, without further

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action by the general assembly.

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     SECTION 13. At a general, special or local election (other than a primary) to be held on

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a date that shall be designated by the town council, there shall be submitted to electors of the

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town a question in substantially the following form: "Shall an act passed at the 2012 session of

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the general assembly entitled 'AN ACT AUTHORIZING THE TOWN OF COVENTRY TO

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FINANCE SYSTEM-WIDE ROOF REPAIRS AND REPLACEMENTS FOR SCHOOLS AND

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SCHOOL FACILITIES IN THE TOWN BY THE ISSUANCE OF NOT MORE THAN

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$5,000,000 BONDS, NOTES AND/OR OTHER EVIDENCES OF INDEBTEDNESS

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THEREFOR' be approved?" and the warning for the election shall contain the question to be

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submitted. From the time the election is warned and until it is held, it shall be the duty of the

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town clerk to keep a copy of this act available at the clerk’s office for public inspection, but the

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validity of the election shall not be affected by this requirement. To the extent of any

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inconsistency between this act and the town charter, this act shall prevail.

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     SECTION 14. Sections 13 and 14 shall take effect upon the passage of this act. The

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remainder of this act shall take effect upon the approval of this act by a majority of those voting

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on the question at the election prescribed by section 13.

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LC02686

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EXPLANATION

OF

A N A C T

AUTHORIZING THE TOWN OF COVENTRY TO FINANCE SYSTEM-WIDE ROOF

REPAIRS AND REPLACEMENTS FOR SCHOOLS AND SCHOOL FACILITIES IN THE

TOWN BY THE ISSUANCE OF NOT MORE THAN $5,000,000 BONDS, NOTES AND/OR

OTHER EVIDENCES OF INDEBTEDNESS THEREFOR

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     This act would authorize the town of Coventry to issue not more than $5,000,000 bonds,

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notes and other evidences of indebtedness to finance system-wide roof repairs and replacements

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for schools and school facilities in the town.

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     Sections 13 and 14 of this act would take effect upon passage. The remainder of the act

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would take effect upon approval by the electors of the town of the question provided for in

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section 13.

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LC02686

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