2014 -- S 3028

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LC005508

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

AUTHORIZING THE CITY OF CRANSTON TO FINANCE THE IMPROVEMENT,

RENOVATION, REPAIR, ALTERATION AND EQUIPPING OF SCHOOLS AND SCHOOL

FACILITIES IN THE CITY BY THE ISSUANCE OF NOT MORE THAN $15,000,000

GENERAL OBLIGATION BONDS AND NOTES THEREFOR

     Introduced By: Senators Gallo, Miller, and Lombardi

     Date Introduced: May 22, 2014

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. The city of Cranston is hereby empowered, in addition to authority

previously granted, to issue bonds to an amount not exceeding fifteen million dollars

($15,000,000) from time to time under its corporate name and seal or a facsimile of such seal.

The bonds of each issue shall mature in annual installments of principal, the first installment to be

not later than three (3) years and the last installment not later than thirty (30) years after the date

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

bonds, capital appreciation bonds, serial bonds or term bonds or a combination thereof. Annual

installments of principal may be provided for by maturity of principal in the case of serial bonds

or by mandatory sinking fund installments in the case of term bonds. The amount of principal

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

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

any other limitation. The appreciation of principal after the date of original issuance shall be

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

principal amount so issued and any interest component shall be disregarded.

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

director of finance and the mayor and shall be issued and sold in such amounts as the city council

may authorize. The manner of sale, denominations, maturities, interest rates and other terms,

conditions and details of any bonds or notes issued under this act may be fixed by the proceedings

of the city council authorizing the issue or by separate order or resolution of the city council or, to

the extent provisions for these matters are not so made, they may be fixed by the officers

authorized to sign the bonds or notes. Interest coupons (if any) shall bear the facsimile signature

of the director of finance. The proceeds derived from the sale of the bonds shall be delivered to

the city treasurer, and such proceeds, exclusive of premiums and accrued interest, shall be

expended: (1) to finance the improvement, renovation, repair, alteration and equipping of schools

and school facilities in the city; or (2) in payment of the principal of or interest on temporary

notes issued under section 3; or (3) in repayment of advances under section 4; (4) in payment of

costs of issuance associated with the issuance of bonds or notes hereunder; and/or (5) to finance

capitalized interest on the projects. No purchaser of any bonds or notes under this act shall be in

any way responsible for the proper application of the proceeds derived from the sale thereof. The

proceeds of bonds or notes issued under this act, any applicable federal or state assistance and the

other monies referred to in sections 6 and 9 shall be deemed appropriated for the purposes of this

act without further action than that required by this act. In addition to such funds, there may be

expended for the purposes of this act such other sums as may be appropriated therefor. The bonds

authorized by this act may be consolidated for the purposes of issuance and sale with any other

bonds of the city heretofore or hereafter authorized, provided that notwithstanding any such

consolidation, the proceeds from the sale of the bonds authorized by this act shall be expended for

the purposes set forth above. The director of finance and the Mayor, on behalf of the city, are

hereby authorized to execute such instruments, documents or other papers as either of them deem

necessary or desirable to carry out the intent of this act and are also authorized to take all actions

and execute all documents or agreements necessary to comply with federal tax and securities

laws, which documents or agreements may have a term coextensive with the maturity of the

bonds authorized hereby, including Rule 15c2-12 of the Securities and Exchange Commission

and to execute and deliver a continuing disclosure agreement or certificate in connection with the

bonds or notes.

     SECTION 3. The city council may, by order or resolution authorizing the bonds or by

separate order or resolution, authorize the issuance from time to time of interest bearing or

discounted notes in anticipation of the issue of bonds under section 1 or in anticipation of the

receipt of federal or state aid for the purposes of this act. The amount of original notes issued in

anticipation of bonds may not exceed the amount of bonds which may be issued under this act

and the amount of original notes issued in anticipation of federal or state aid may not exceed the

amount of available federal or state aid as estimated by the director of finance. Temporary notes

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issued hereunder shall be signed by the manual or facsimile signature of the director of finance

and countersigned by the manual or facsimile signature of the Mayor and shall be payable within

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

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

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

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

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

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

refunding shall result in any amount of such temporary notes outstanding at any one time in

excess of two hundred percent (200%) of the amount of bonds which may be issued under this

act, and provided further that if the issuance of any such refunding notes results in any amount of

such temporary notes outstanding at any one time in excess of the amount of bonds which may be

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

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

pay the notes being refunded, monies in the fund shall be invested for the benefit of the city by

the paying agent at the direction of the city treasurer in any investment permitted under section 5.

The monies in the fund and any investments held as a part of the fund shall be held in trust and

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

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

any excess monies in the fund shall be distributed to the city. The city may pay the principal of

and interest on notes in full from other than the issuance of refunding notes prior to the issuance

of bonds pursuant to section 1 hereof. In such case, the city's authority to issue bonds or notes in

anticipation of bonds under this act shall continue provided that: (1) the city council passes a

resolution evidencing the city's intent to pay off the notes without extinguishing the authority to

issue bonds or notes; and (2) that the period from the date of an original note to the maturity date

of any other note shall not exceed five (5) years.

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

lieu of any authorization or issuance of notes hereunder, the city treasurer, with the approval of

the city council given by an order or resolution passed and approved in the manner provided in

chapter 12 of the city charter, but not subject to the provisions of section 12.03 of said chapter,

may, to the extent that bonds or notes may be issued hereunder, apply funds in the treasury of the

city to the purposes specified in section 1, such advances to be repaid without interest from the

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

federal or state assistance, pending their expenditure, and subject to the approval of the

investment committee mentioned in section 7.05 of the city charter, may be deposited or invested

by the city treasurer in demand deposits, time deposits or savings deposits in banks which are

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

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

in any other applicable laws of the state of Rhode Island and by ordinance or resolution of the city

council.

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

shall be applied to the payment of the first interest due thereon. Any net earnings or profits

realized from the investment of funds hereunder and any premiums arising from the sale of bonds

or notes hereunder shall, in the discretion of the city treasurer, be applied to the cost of preparing,

issuing and marketing bonds or notes hereunder to the extent not otherwise provided, to the

payment of the cost of the projects or the cost of additional improvements coming within the

description of the projects in section 1 of this act, to the payment of the principal of or interest on

bonds or notes issued hereunder, or to any one or more of the foregoing. The cost of preparing,

issuing and marketing bonds or notes hereunder may also, in the discretion of the city treasurer,

be met from bond or note proceeds exclusive of premium and accrued interest or from other

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

cost of the projects and the cost of additional improvements coming within the description of the

projects in section 1 of this act, and the cost of preparing, issuing and marketing bonds or notes

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

hereunder. To the extent permitted by applicable federal law, any earnings or net profit realized

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

part of the revenues of the city from property taxes. In exercising any discretion under this

section, the city treasurer shall be governed by any instructions adopted by any order or resolution

of the city council.

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

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

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

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

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

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

extent that monies 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

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

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

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

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

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

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

     SECTION 9. The city, acting by order or resolution of its city council, passed and

approved in the manner provided in chapter 12 of the city charter, but not subject to the

provisions of section 12.03 of said chapter, is authorized to apply for, contract for and expend any

federal or state advances or other grants of assistance which may be available for the purposes of

this act, and any such expenditures may be in addition to other monies provided in this act. To the

extent of any inconsistency between any law of this state and any applicable federal law or

regulation, the latter shall prevail. Federal and state advances, with interest where applicable,

whether contracted for prior to or after the effective date of this act, may be repaid as projects

costs under section 1 of this act.

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

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

except as specifically required by this act for such issue. In carrying out any projects financed in

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

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

on account of any such projects, all action shall be taken which is necessary to meet constitutional

requirements whether or not such action is otherwise required by statute, but the validity of bonds

or notes issued hereunder shall in no way depend upon the validity or occurrence of such action.

     SECTION 11. All or any portion of the authorized but unissued authority to issue bonds

and notes under this act may be extinguished by ordinance of the city council, without further

action by the general assembly, seven (7) years after the effective date of this act.

     SECTION 12. The question of the approval of this act shall be submitted to the electors

of the city at the general election to be held on November 4, 2014. The question shall be

submitted in substantially the following form: "Shall an act, passed at the 2014 session of the

general assembly, entitled 'AN ACT AUTHORIZING THE CITY OF CRANSTON TO

FINANCE THE IMPROVEMENT, RENOVATION, REPAIR, ALTERATION AND

EQUIPPING OF SCHOOLS AND SCHOOL FACILITIES IN THE CITY BY THE ISSUANCE

OF NOT MORE THAN $15,000,000 GENERAL OBLIGATION BONDS AND NOTES

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

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

clerk to keep a copy of the act available at the city clerk's office for public inspection, but the

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

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

     SECTION 13. This section and section 12 shall take effect upon passage of this act. The

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

on the question at the election prescribed by the section 12.

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LC005508

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

AUTHORIZING THE CITY OF CRANSTON TO FINANCE THE IMPROVEMENT,

RENOVATION, REPAIR, ALTERATION AND EQUIPPING OF SCHOOLS AND SCHOOL

FACILITIES IN THE CITY BY THE ISSUANCE OF NOT MORE THAN $15,000,000

GENERAL OBLIGATION BONDS AND NOTES THEREFOR

***

     This act would authorize the city of Cranston to issue not more than fifteen million

dollars ($15,000,000) general obligation bonds and temporary notes to finance the improvement,

renovation, repair, alteration and equipping of schools and school facilities in the city of

Cranston.

     Sections 12 and 13 of the act would take effect upon passage. The remainder of the act

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

12.

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