2013 -- S 0867

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LC02158

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO THE CITY OF WOONSOCKET AND IN AMENDMENT OF SECTION 8 OF

CHAPTER 10 OF THE 2002 PUBLIC LAWS ENTITLED "AN ACT AUTHORIZING THE

CITY OF WOONSOCKET TO FINANCE THE UNFUNDED PENSION LIABILITY OF THE

CITY OF WOONSOCKET, BY THE ISSUANCE OF NOT MORE THAN $90,000,000 BONDS

THEREFOR"

     Introduced By: Senators Picard, and Cote

     Date Introduced: April 11, 2013

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 8 of Chapter 10 of the 2002 Public Laws entitled "An Act

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Authorizing the City of Woonsocket to Finance the Unfunded Pension Liability of the City of

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Woonsocket, By the Issuance of Not More than $90,000,000 Bonds Therefor" hereby amended to

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read to as follows:

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     SECTION 8. The aggregate principal amount of the bonds issued by the City under this

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act shall not be greater than the amount sufficient to extinguish the unfunded pension liability and

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to pay the costs of issuance of the bonds. For purposes of this act, "unfunded pension liability"

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means the excess, if any, of the actuarial liability of the City's city-run pension plan for police and

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firefighters over the actuarial value of the assets in that pension plan. The actuarial liability of the

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pension plan and the actuarial value of the assets in the plan shall be determined using the same

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actuarial assumptions as are used by the Retirement Board, created by title 36, chapter 8 of the

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General Laws of Rhode Island (the "State Retirement Board") for purposes of determining

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municipal contributions under the optional retirement for members of police force and firefighters

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established under chapter 21.2 of title 45 of the general laws. Prior to the issue of any bonds

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hereunder, the City Council shall hold a public hearing on the proposed pension funding plan.

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The plan shall include a report showing the:

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     (a) Actuarial valuation of the assets in the pension plan;

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     (b) An actuarial analysis of the methods by which the City proposes to fund the unfunded

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pension liability;

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     (c) The amount of the bonds to be issued, including the plan of finance for the bonds;

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     (d) An explanation of the City's investment strategic plan for the pension plan including,

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but not limited to, the investment policy adopted by the board of investment and an asset

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allocation plan;

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     (e) The projected investment return for the pension plan; and

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     (f) The projected present value savings to the City reasonably expected to be achieved as

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a result of the issuance of such bonds. The city of Woonsocket shall not issue pension obligation

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bonds prior to nor more than six (6) months, subsequent to the approval of the voters of the city

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of Woonsocket unless another public hearing is held. The city of Woonsocket shall renotify the

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voters of its intention to issue pension obligation bonds and provide the voters through public

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hearing with updated information and documentation in the manner and as described above, if

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more than six (6) months will elapse between the date of the voter approval and the proposed date

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of issuance of the pension obligation bonds. After the public hearing and prior to the issuance of

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the bonds, the pension funding plan shall be filed with the public finance management board

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established pursuant to chapter 10.1 of title 42 of the Rhode Island General Laws (the "Public

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Finance Management Board"). The City Council shall institute proceedings to determine that the

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issuance of the pension obligation bonds will result in a financial benefit to the City. The City

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shall submit to the Public Finance Management Board and to the State Auditor General, on or

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before December 1 in each year, an annual report showing the financial transactions of the

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pension plan for the fiscal year preceding that date. The annual report shall contain, among other

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things, a financial balance sheet as of the end of that year, a statement of income and

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expenditures, a valuation balance sheet as prepared by the City's independent consulting firm, a

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detailed statement of investments acquired and disposed of during the year, and any other

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statistical data that are deemed necessary for a proper interpretation of the condition of the

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pension plan and the results of its operations. The State Auditor General, on the request of the

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City or of the Public Finance Management Board, shall conduct a separate annual performance

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audit of the pension plan which shall include a report on the actuarial valuation of the assets and

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liabilities of the pension plan. The auditor general may examine all records, files and other

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documents relating to the pension plan, and evaluate all policies and procedures for purposes of

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conducting the audit. The aforementioned performance audit shall be in addition to the annual

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audit conducted by independent certified public accountants of the financial statements of the

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City. So long as any bonds issued by the City under this act are outstanding, if an annual report

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discloses that the assets of the plan are not sufficient to fund the City's obligations to the pension

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plan, the City shall make annual appropriations over a period not to exceed five (5) twenty-five

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(25) years from the date of the annual report in order to amortize that liability. So long as any

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bonds issued by the City under this act are outstanding, the City shall not withdraw funds from

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the City-run pension plan for police and firefighters for any purpose other than the payment of

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pension and death benefits, return of employee contributions in appropriate cases, and

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administrative expenses of operating the plan., or the transfer of assets to the municipal employee

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retirement system in the event of acceptance into the municipal employee retirement system.

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     SECTION 2. This act shall take effect upon passage.

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LC02158

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO THE CITY OF WOONSOCKET AND IN AMENDMENT OF SECTION 8 OF

CHAPTER 10 OF THE 2002 PUBLIC LAWS ENTITLED "AN ACT AUTHORIZING THE

CITY OF WOONSOCKET TO FINANCE THE UNFUNDED PENSION LIABILITY OF THE

CITY OF WOONSOCKET, BY THE ISSUANCE OF NOT MORE THAN $90,000,000 BONDS

THEREFOR"

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     This act would amend Section 8 of Chapter 10 of the 2002 Public Laws in regard to the

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city of Woonsocket.

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     This act would take effect upon passage.

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LC02158

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