2018 -- S 2914

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LC005654

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

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A N   A C T

AUTHORIZING THE TOWN OF CUMBERLAND, WITH THE APPROVAL OF THE

QUALIFIED ELECTORS, TO ISSUE GENERAL OBLIGATION BONDS AND/OR NOTES

IN AN AMOUNT NOT TO EXCEED $2,500,000 FOR STREET PAVEMENT

IMPROVEMENTS IN THE TOWN

     Introduced By: Senators Pearson, and Picard

     Date Introduced: May 17, 2018

     Referred To: Senate Housing & Municipal Government

     It is enacted by the General Assembly as follows:

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

previously granted, to issue general obligation bonds and notes to an amount not exceeding two

million five hundred thousand dollars ($2,500,000) from time to time under its corporate name

and seal. 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 serial redemption in the case of term bonds, in annual installments of

principal, provided that the final maturity of such bonds shall not exceed thirty (30) years from

and after the date the bonds are issued. 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, and may bear interest at a fixed rate or rates or at a variable or auction rate

or rates. The bonds may be sold by a negotiated sale or by competitive bid and issued pursuant to

a resolution or an indenture of trust. Annual installments of principal may be provided for by

maturity of principal in the case of serial bonds or by mandatory serial redemption 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 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.

     The town may enter into financing agreements with the Rhode Island Infrastructure Bank

pursuant to the provisions of chapter 12.2 of title 46 and chapter 18 of title 24 and, with respect to

notes or bonds issued in connection with such financing agreements, if any, the town may elect to

have the provisions of chapter 12.2 of title 46 and chapter 18 of title 24 apply to the issuance of

the bonds or notes issued hereunder to the extent the provisions of chapter 12.2 of title 46 or

chapter 18 of title 24 are inconsistent herewith. Such election may be fixed by the proceedings of

the town council authorizing such issuance of 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 or notes.

     SECTION 2. The bonds shall be signed by the finance director and the mayor and shall

be issued and sold in such amounts as the town 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 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 or notes. The

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

proceeds, exclusive of premiums and accrued interest, shall be expended: (1) For the purpose of

financing street pavement improvements; (2) In payment of the principal of and/or interest on

temporary notes issued under section 3; (3) In repayment of advances made pursuant to section 4;

and/or (4) In payment of costs of issuance associated with the issuance of bonds or notes

hereunder. 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 purpose of this act without further

action than that required by this act. This bond issue authorized by this act may be consolidated

for the purpose of issuance and sale with any other bond issue 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. The finance

director and the mayor, 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 documents or agreements

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

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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 town council may by resolution authorize the issue from time to time of

interest bearing or discounted notes in anticipation of the issue 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 finance director. Temporary notes

issued hereunder shall be signed by the finance director and 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 issue of other notes

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

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 town by

the paying agent at the direction of the finance director 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 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; and (2) That the period from the date

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

     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 finance director, 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 finance

director 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.

     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 premiums arising from the

sale of bonds or notes hereunder, and to the extent permitted by applicable federal law, any

earnings or net profit realized from the deposit or investment of funds hereunder, shall, in the

discretion of the finance director, 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 project,

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 issued

hereunder may also, in the discretion of the finance director, 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 project 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 finance director 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. 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

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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, 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 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 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 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 question of the approval of this act shall be submitted to the electors

of the town at the general election to be held on November 6, 2018 or at a general or special

election (other than a primary election) to be held on a date as shall be designated by the town

council. The question shall be submitted in substantially the following form: "Shall an act, passed

at the 2018 session of the general assembly, entitled 'AN ACT AUTHORIZING THE TOWN OF

CUMBERLAND, WITH THE APPROVAL OF THE QUALIFIED ELECTORS, TO ISSUE

GENERAL OBLIGATION BONDS AND/OR NOTES IN THE AMOUNT NOT TO EXCEED

$2,500,000 FOR STREET PAVEMENT IMPROVEMENTS IN THE TOWN' be approved?" The

warning for the election shall contain the question to be submitted. From the time the election is

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warned and until it is held, it shall be the duty of the town clerk to keep a copy of the 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 12. All or any portion of the authorized but unissued authority to issue bonds

and notes under this act may be extinguished by resolution of the Town council, without further

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

     SECTION 13. Sections 11 and 13 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 11.

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LC005654

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

AUTHORIZING THE TOWN OF CUMBERLAND, WITH THE APPROVAL OF THE

QUALIFIED ELECTORS, TO ISSUE GENERAL OBLIGATION BONDS AND/OR NOTES

IN AN AMOUNT NOT TO EXCEED $2,500,000 FOR STREET PAVEMENT

IMPROVEMENTS IN THE TOWN

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     This act would authorize the town of Cumberland to issue two million five hundred

thousand dollars ($2,500,000) of the general obligation bonds and notes in order to finance street

pavement improvements.

     Sections 11 and 13 would take effect upon the passage. The remainder of the act would

take effect upon approval of the act by the electors of the town of Cumberland.

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LC005654

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