2014 -- S 3044

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LC005761

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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 TOWN OF COVENTRY TO FINANCE THE DESIGN,

CONSTRUCTION, REPAIR, REHABILITATION AND IMPROVEMENT OF STREETS,

SIDEWALKS AND BRIDGES IN THE TOWN, INCLUDING, BUT NOT LIMITED TO,

PAVING, DRAINAGE, TRAFFIC CONTROL DEVICES, ROAD MAINTENANCE

EQUIPMENT, SAFETY IMPROVEMENTS AND LANDSCAPING BY THE ISSUANCE OF

NOT MORE THAN $10,710,000 BONDS AND NOTES THEREFOR

     Introduced By: Senators Raptakis, and Kettle

     Date Introduced: May 29, 2014

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

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

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

to an amount not exceeding ten million seven hundred ten thousand dollars ($10,710,000) from

time to time under its corporate name and seal or a facsimile of such. The bonds of each issue

may be issued in the form of serial bonds or term bonds or a combination thereof and shall be

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

installments in the case of term bonds, in annual installments of principal, the first installment to

be not later than five (5) 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. 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 or statutory

debt limit or any other limitation. The appreciation of principal after the date of original issue

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 town

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

amounts as the town council may authorize by resolution. 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 town council authorizing the issue or by

separate resolution of the town 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. The proceeds derived from

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

exclusive of premiums and accrued interest shall be expended: (1) for the design, construction,

repair, rehabilitation and improvement of streets, sidewalks and bridges in the Town, including

but not limited to, paving, drainage, traffic control devices, road maintenance equipment, safety

improvements and landscaping and all costs incidental or related thereto; (2) in payment of the

principal of or interest on temporary notes issued under section 3; (3) in repayment of advances

under section 4; (4) in payment of related costs of issuance of any bonds or notes; and/or (5) in

payment of capitalized interest during construction of the project (the "project"). 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 project shall be carried out and all contracts made

therefor on behalf of the town by the town council. 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. The bonds authorized by this act may be consolidated for the purpose of

issuance and sale with any other bonds of the town 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.

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

time of interest bearing or discounted notes in anticipation of the issuance of bonds 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 issued hereunder shall be signed by the manual or facsimile signatures

of the town director of finance and the president of the town council 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

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to renew or pay the same debt or 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 town by

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

section 5. The monies in the fund and any investments held as 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 town. The town

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 town's

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

that: (1) the town council passes a resolution evidencing the town'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 issue of bonds hereunder or pending or in lieu

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

approval of the town council, may, to the extent that bonds or notes may be issued hereunder,

apply funds in the treasury of the town to the purposes specified in section 2, 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.

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

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

director of finance 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 law of the state of Rhode Island or resolution of the town council or

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

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

sale of bonds or notes hereunder shall, in the discretion of the town director of finance, 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 project costs, 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 town

director of finance, be met from bond or note proceeds exclusive of 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 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 laws, 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 town from property taxes. In exercising any discretion under this section, the

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

council.

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

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

contracted by it and shall be excepted from the operation of § 45-12-2 of the general laws. No

such obligation shall at any time be included in the debt of the town for the purpose of

ascertaining its borrowing capacity. The town 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

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 town shall be

subject to ad valorem taxation by the town 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 officers of the town 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 such officers shall for any reason have ceased to hold office.

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

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

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

monies 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

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

may be repaid as project costs under section 2.

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

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 project

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 project, 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 and notes issued hereunder shall in no way depend upon the validity or

occurrence of such action.

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

behalf of the town, 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 instruments, documents or agreements necessary to

comply with federal tax and securities laws, which instruments, 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 (the "Rule") and to execute and deliver a

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

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

     SECTION 12. 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 town council after seven (7)

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

action by the general assembly.

     SECTION 13. At the general election to be held on November 4, 2014, there shall be

submitted to electors of the town a question in substantially the following form: "Shall an act

passed at the 2014 session of the general assembly entitled 'AN ACT AUTHORIZING THE

TOWN OF COVENTRY TO FINANCE THE DESIGN, CONSTRUCTION, REPAIR,

REHABILITATION AND IMPROVEMENT OF STREETS, SIDEWALKS AND BRIDGES IN

THE TOWN, INCLUDING BUT NOT LIMITED TO, PAVING, DRAINAGE, TRAFFIC

CONTROL DEVICES, ROAD MAINTENANCE EQUIPMENT, SAFETY IMPROVEMENTS

AND LANDSCAPING BY THE ISSUANCE OF NOT MORE THAN $10,710,000 BONDS

AND NOTES THEREFOR' be approved?" and the warning for the election shall contain the

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question to be submitted. From the time the election is warned and until it is held, it shall be the

duty of the town clerk to keep a copy of this act available at the 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 town charter, this act shall prevail.

     SECTION 14. Sections 13 and 14 shall take effect upon the 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 section 13.

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LC005761

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EXPLANATION

OF

A N   A C T

AUTHORIZING THE TOWN OF COVENTRY TO FINANCE THE DESIGN,

CONSTRUCTION, REPAIR, REHABILITATION AND IMPROVEMENT OF STREETS,

SIDEWALKS AND BRIDGES IN THE TOWN, INCLUDING, BUT NOT LIMITED TO,

PAVING, DRAINAGE, TRAFFIC CONTROL DEVICES, ROAD MAINTENANCE

EQUIPMENT, SAFETY IMPROVEMENTS AND LANDSCAPING BY THE ISSUANCE OF

NOT MORE THAN $10,710,000 BONDS AND NOTES THEREFOR

***

     This act would authorize the town of Coventry to issue not more than $10,710,000 bonds,

notes and other evidences of indebtedness to finance the design, construction, repair,

rehabilitation and improvement of streets, sidewalks and bridges, including, but not limited to,

paving, drainage, traffic control devices, road maintenance equipment, safety improvements and

landscaping in the town and all costs incidental or related thereto

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

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

section 13.

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LC005761

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