2018 -- S 2943

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LC005766

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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 CITY OF EAST PROVIDENCE TO FINANCE THE ACQUISITION,

CONSTRUCTION, FURNISHING AND EQUIPPING OF A NEW HIGH SCHOOL AND ALL

EXPENSES INCIDENT THERETO, INCLUDING, BUT NOT LIMITED TO, COSTS OF

DESIGN, DEMOLITION, ATHLETIC FIELDS, LANDSCAPING AND PARKING BY THE

ISSUANCE OF NOT MORE THAN $189,500,000 BONDS, NOTES AND/OR OTHER

EVIDENCES OF INDEBTEDNESS THEREFOR, SUBJECT TO APPROVAL OF STATE

HOUSING AID AT A REIMBURSEMENT RATE OR STATE SHARE RATIO OF NOT LESS

THAN 50% FOR EXPENDITURES ELIGIBLE FOR STATE AID AND PROVIDED THAT

THE AUTHORIZATION SHALL BE REDUCED BY ANY GRANT RECEIVED FROM THE

SCHOOL BUILDING AUTHORITY CAPITAL FUND

     

     Introduced By: Senator William J. Conley

     Date Introduced: May 31, 2018

     Referred To: Senate Housing & Municipal Government

     It is enacted by the General Assembly as follows:

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     SECTION 1. The city of East Providence 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 one hundred eighty-nine million five hundred thousand dollars

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($189,500,000) from time to time under its corporate name and seal or a facsimile of such seal;

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provided, however, that bonds shall not be issued unless the conditions of section 2 hereof as to

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the level of state aid are met. The bonds of each issue may be issued in the form of serial bonds or

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term bonds or a combination thereof and shall be payable either by maturity of principal in the

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case of serial bonds or by mandatory sinking fund installments in the case of term bonds, in

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annual installments of principal, the first installment to be not later than five (5) years and the last

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installment not later than thirty (30) years after the date of the bonds. All such bonds of a

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particular issue may be issued in the form of zero coupon bonds, capital appreciation bonds, serial

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bonds or term bonds or a combination thereof. The amount of principal appreciation each year on

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any bonds, after the date of original issuance, shall not be considered to be principal indebtedness

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for the purposes of any constitutional or statutory debt limit or any other limitation. The

 

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appreciation of principal after the date of original issue shall be considered interest. Only the

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original principal amount shall be counted in determining the principal amount so issued and any

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interest component shall be disregarded.

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     SECTION 2. The city may be eligible for school housing aid reimbursement on debt

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service pursuant to chapter 7 of title 16, or for a grant, loan or other "financial assistance" as

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defined in § 45-38.2-1(6), from the School Building Authority Capital Fund under chapter 38.2 of

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chapter 45. The amount of borrowing authorized pursuant to this act shall be reduced by the

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amount of any grant received by the city from the School Building Authority Capital Fund.

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Bonds, notes or other evidences of indebtedness shall not be issued under this act unless the city

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has received a letter from the Rhode Island Department of Education ("RIDE") confirming that

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the then-current school housing aid reimbursement rate under chapter 7 of title 16, as amended

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from time to time, or financial assistance from the School Building Authority Capital Fund, or

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pursuant to any other law hereafter enacted providing for funds to municipalities for school

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housing purposes, is not less than fifty percent (50%) of debt service for those expenditures which

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are eligible for state aid.

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     SECTION 3. The bonds shall be signed by the manual or facsimile signatures of the city

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

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may authorize by resolution. The manner of sale, denominations, maturities, interest rates and

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

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proceedings of the city council authorizing the issue or by separate resolution of the city council

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

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authorized to sign the bonds. Notwithstanding anything contained in this act to the contrary, the

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city may enter into financing agreements with the Rhode Island Health and Educational Building

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Corporation pursuant to chapter 7 of title 16 and chapter 38.1 of title 45 and, with respect to notes

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

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the provisions of chapter 38.1 of title 45 apply to the issuance of the bonds or notes issued

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hereunder to the extent the provisions of chapter 38.1 of title 45 are inconsistent herewith. In

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addition, the city may enter into financing agreements with the Rhode Island Infrastructure Bank

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pursuant to the provisions of chapter 12.2 of title 46 and, with respect to notes or bonds issued in

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connection with such financing agreements, if any, the city may elect to have the provisions of

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

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the provisions of chapter 12.2 of title 46 are inconsistent herewith. Such election may be fixed by

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the proceedings of the city council authorizing such issuance of by separate resolution of the city

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

 

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officers authorized to sign the bonds or notes. The proceeds derived from the sale of the bonds

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shall be delivered to the city director of finance, and such proceeds, exclusive of premiums and

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accrued interest shall be expended: (1) For the acquisition, construction, furnishing and equipping

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of a new high school in the city and all expenses incident thereto, including, but not limited to,

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costs of design, demolition, athletic fields, landscaping and parking; (2) In payment of the

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principal of or interest on temporary notes issued under section 4; (3) In repayment of advances

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

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

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

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

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therefor on behalf of the city by the city school building committee. The proceeds of bonds or

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notes issued under this act, any applicable federal or state assistance and the other monies referred

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to in sections 7 and 10 shall be deemed appropriated for the purposes of this act without further

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action than that required by this act. The bonds authorized by this act may be consolidated for the

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purpose of issuance and sale with any other bonds of the city heretofore or hereafter authorized;

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provided that, notwithstanding any such consolidation, the proceeds from the sale of the bonds

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

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     SECTION 4. The city council may by resolution authorize the issuance from time to time

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

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

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

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this act (without any reduction for any grant to be received from the School Building Authority

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Capital Fund), and the amount of original notes issued in anticipation of federal or state aid may

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

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

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city director of finance and the mayor and shall be payable within five (5) years from their

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respective dates, but the principal of and interest on notes issued for a shorter period may be

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renewed or paid from time to time by the issuance of other notes hereunder; provided, the period

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from the date of an original note to the maturity of any note issued to renew or pay the same debt

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or interest thereon shall not exceed five (5) years. Any temporary notes in anticipation of bonds

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issued under this section may be refunded prior to the maturity of the notes by the issuance of

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additional temporary notes; provided that, no such refunding shall result in any amount of such

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temporary notes outstanding at any one time in excess of two hundred percent (200%) of the

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amount of bonds which may be issued under this act; and provided further, that, if the issuance of

 

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any such refunding notes results in any amount of such temporary notes outstanding at any one

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time in excess of the amount of bonds which may be issued under this act, the proceeds of such

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refunding notes shall be deposited in a separate fund established with the bank which is paying

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agent for the notes being refunded. Pending their use to pay the notes being refunded, monies in

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the fund shall be invested for the benefit of the city by the paying agent at the direction of the city

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director of finance in any investment permitted under section 6. The monies in the fund and any

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investments held as part of the fund shall be held in trust and shall be applied by the paying agent

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solely to the payment or prepayment of the principal of and interest on the notes being refunded.

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Upon payment of all principal of and interest on the notes, any excess monies in the fund shall be

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distributed to the city. The city may pay the principal of and interest on notes in full from other

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than the issuance of refunding notes prior to the issuance of bonds pursuant to section 1 hereof. In

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such case, the city's authority to issue bonds or notes in anticipation of bonds under this act shall

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continue provided that (1) The city council passes a resolution evidencing the city's intent to pay

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off the notes without extinguishing the authority to issue bonds or notes; and (2) That the period

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

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years.

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     SECTION 5. 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 city director of finance, with the approval of

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

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the treasury of the city to the purposes specified in section 3, 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 6. 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 city

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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 city council or

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pursuant to an investment policy of the city.

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     SECTION 7. 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 city 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 city

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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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monies 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 city from property taxes. In exercising any discretion under this section, the

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

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council.

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     SECTION 8. All bonds and notes issued under this act and the debts evidenced thereby

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shall be obligatory on the city 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 § 45-12-2. No such obligation shall at

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any time be included in the debt of the city for the purpose of ascertaining its borrowing capacity.

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The city shall annually appropriate a sum sufficient to pay the principal and interest coming due

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within the year on bonds and notes issued hereunder to the extent that monies therefor are not

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otherwise provided. If such sum is not appropriated, it shall nevertheless be added to the annual

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tax levy. In order to provide such sum in each year and notwithstanding any provision of law to

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the contrary, all taxable property in the city shall be subject to ad valorem taxation by the city

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without limitation as to rate or amount.

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     SECTION 9. 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 city 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 10. The city, acting by resolution of its city council, is authorized to apply for,

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

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

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

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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 3.

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     SECTION 11. 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 12. The city director of finance and the mayor, on behalf of the city, are

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

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

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

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securities laws, which instruments, documents or agreements may have a term coextensive with

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

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Exchange Commission (the "Rule") and to execute and deliver a continuing disclosure agreement

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or certificate in connection with the bonds or notes in the form as shall be deemed advisable by

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such officers in order to comply with the Rule.

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     SECTION 13. 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 resolution of the city council after seven (7)

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years shall have passed from the approval of this act provided for in section 14, without further

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action by the general assembly.

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     SECTION 14. At the general election to be held on November 6, 2018 or at a local

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election, other than a primary, to be held on a date designated by the city council, there shall be

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submitted to electors of the city a question in substantially the following form: "Shall An Act

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Passed at the 2018 Session of the General Assembly Entitled 'AN ACT AUTHORIZING THE

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CITY OF EAST PROVIDENCE TO FINANCE THE ACQUISITION, CONSTRUCTION,

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FURNISHING AND EQUIPPING OF A NEW HIGH SCHOOL AND ALL EXPENSES

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INCIDENT THERETO, INCLUDING, BUT NOT LIMITED TO, COSTS OF DESIGN,

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DEMOLITION, ATHLETIC FIELDS, LANDSCAPING AND PARKING BY THE ISSUANCE

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OF NOT MORE THAN $189,500,000 BONDS, NOTES AND/OR OTHER EVIDENCES OF

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INDEBTEDNESS THEREFOR, SUBJECT TO APPROVAL OF STATE HOUSING AID AT A

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REIMBURSEMENT RATE OR STATE SHARE RATIO OF NOT LESS THAN 50% FOR

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EXPENDITURES ELIGIBLE FOR STATE AID AND PROVIDED THAT THE

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AUTHORIZATION SHALL BE REDUCED BY ANY GRANT RECEIVED FROM THE

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SCHOOL BUILDING AUTHORITY CAPITAL FUND' be approved?" and the warning for the

 

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election shall contain the question to be submitted. From the time the election is warned and until

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it is held, it shall be the duty of the city clerk to keep a copy of this act available at the clerk's

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office for public inspection, but the validity of the election shall not be affected by this

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requirement. To the extent of any inconsistency between this act and the city charter, this act shall

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prevail.

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     SECTION 15. This act shall constitute an enabling act of the general assembly that is

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required pursuant to § 16-7-44. Any bonds, notes or other evidences of indebtedness issued under

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this act for school projects shall not be eligible for state housing aid reimbursement pursuant to §

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16-7-44 unless the school projects described herein have been approved by RIDE.

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     SECTION 16. Sections 14 and 16 would take effect upon the passage. The remainder of

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

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question at the election prescribed by section 14.

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EXPLANATION

OF

A N   A C T

AUTHORIZING THE CITY OF EAST PROVIDENCE TO FINANCE THE ACQUISITION,

CONSTRUCTION, FURNISHING AND EQUIPPING OF A NEW HIGH SCHOOL AND ALL

EXPENSES INCIDENT THERETO, INCLUDING, BUT NOT LIMITED TO, COSTS OF

DESIGN, DEMOLITION, ATHLETIC FIELDS, LANDSCAPING AND PARKING BY THE

ISSUANCE OF NOT MORE THAN $189,500,000 BONDS, NOTES AND/OR OTHER

EVIDENCES OF INDEBTEDNESS THEREFOR, SUBJECT TO APPROVAL OF STATE

HOUSING AID AT A REIMBURSEMENT RATE OR STATE SHARE RATIO OF NOT LESS

THAN 50% FOR EXPENDITURES ELIGIBLE FOR STATE AID AND PROVIDED THAT

THE AUTHORIZATION SHALL BE REDUCED BY ANY GRANT RECEIVED FROM THE

SCHOOL BUILDING AUTHORITY CAPITAL FUND

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     This act would authorize the city of East Providence to issue not more than $189,500,000

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bonds, notes and other evidences of indebtedness to finance the acquisition, construction,

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furnishing and equipping of a new high school and all expenses incident thereto, including, but

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not limited to, costs of design, demolition, athletic fields, landscaping and parking. The city may

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be eligible for school housing aid reimbursement pursuant to chapter 7 of title 16, or from the

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School Building Authority Capital Fund under chapter 38.2 of chapter 45. The amount of

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borrowing authorized pursuant to this chapter shall be reduced by the amount of any grant

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received by the city from the School Building Authority Capital Fund and the issuance of bonds,

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notes and other evidences of indebtedness shall be subject to approval of state housing aid at a

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reimbursement rate or state share ratio of not less than fifty percent (50%) for expenditures

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eligible for state aid at the time the time the indebtedness is issued.

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     This act shall constitute an enabling act of the general assembly that is required pursuant

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to § 16-7-44 of chapter 7 of title 16 of the general laws. Any bonds, notes or other evidences of

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indebtedness issued under this act for school projects shall not be eligible for state housing aid

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reimbursement pursuant to § 16-7-44 of chapter 7 of title 16 of the general laws unless the school

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projects described herein have been approved by the Rhode Island Department of Education.

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     Sections 14 and 16 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 city of the question provided for in section

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14.

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