2019 -- S 0944

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LC002770

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

AUTHORIZING THE TOWN OF WESTERLY TO ISSUE NOT TO EXCEED $71,410,000

GENERAL OBLIGATION BONDS, NOTES AND OTHER EVIDENCES OF

INDEBTEDNESS TO FINANCE THE CONSTRUCTION, RENOVATION, IMPROVEMENT,

ALTERATION, REPAIR, FURNISHING AND EQUIPPING OF SCHOOLS AND SCHOOL

FACILITIES THROUGHOUT THE TOWN, SUBJECT TO APPROVAL OF STATE

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

THAN 35% 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 Dennis L. Algiere

     Date Introduced: June 05, 2019

     Referred To: Senate Housing & Municipal Government

     It is enacted by the General Assembly as follows:

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

previously granted, to issue bonds in an amount not exceeding seventy-one million four hundred

ten thousand dollars ($71,410,000) from time to time under its corporate name and seal; provided,

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

state aid are met.

     The bonds of each issue may be issued in the form of zero coupon bonds, capital

appreciation bonds, 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 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 the bonds are issued.

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

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

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

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

of any grant received by the town from the School Building Authority Capital Fund. Bonds, notes

or other evidences of indebtedness shall not be issued under this act unless the town has received

a letter from the Rhode Island Department of Education ("RIDE") confirming that the then-

current school housing aid reimbursement rate under chapter 7 of title 16, as amended from time

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

any other law hereafter enacted providing for funds to municipalities for school housing purposes,

is not less than thirty-five percent (35%) for those expenditures which are eligible for state aid.

This act shall constitute an enabling act of the general assembly that is required pursuant to § 16-

7-44. Any bonds, notes or other evidences of indebtedness issued under this act for school

projects shall not be eligible for state housing aid reimbursement pursuant to § 16-7-44 unless the

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

Education.

     SECTION 3. The bonds shall be signed by the president of the town council, the town

manager and the director of finance 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. Notwithstanding anything contained in this act to

the contrary, the town may enter into financing agreements with the Rhode Island Health and

Educational Building Corporation pursuant to chapter 7 of title 16 and chapter 38.1 of title 45

and, with respect to bonds or notes issued in connection with such financing agreements, if any,

the town may elect to have the provisions of chapter 38.1 of title 45 apply to the issuance of the

bonds or notes issued hereunder to the extent the provisions of chapter 38.1 of title 45 are

inconsistent herewith. In addition, 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, with respect

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

to have the provisions of chapter 12.2 of title 46 apply to the issuance of the bonds or notes issued

hereunder to the extent the provisions of chapter 12.2 of title 46 are inconsistent herewith. Such

election may be fixed by the proceedings of the town council authorizing such issuance 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 or notes shall be delivered to the director of finance, and such

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

renovation, improvement, alteration, repair furnishing and equipping of schools and school

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facilities in the town and all costs related thereto; (2) For payment of the principal or interest on

temporary notes issued under section 4; (3) In payment of capitalized interest on bonds or notes;

(4) In repayment of advances under section 5; or (5) In payment of related costs of issuance of

any bonds or notes. 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 sales thereof. The project

shall be carried out and all contracts made therefor on behalf of the town by the town manager,

subject to approval of the town council. The proceeds of bonds or notes issued under this act, any

applicable federal or state assistance and other monies referred to in sections 7 and 10, shall be

deemed appropriated for the purposes of this act without further action than that required by this

act. The bond issue authorized by this act may be consolidated for the purposes 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.

     SECTION 4. 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

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

Fund), 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

director of finance, the town manager 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 issue of other notes

thereunder, provided the period from the date of an original note to the maturity or 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

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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 director of finance 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

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 5. Pending any authorization or issue of bonds hereunder or pending or in lieu

of any authorization or issue of notes hereunder, the 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 6. 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 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.

     SECTION 7. 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 any earnings or net profit realized from the deposit or

investment of funds hereunder shall, in the discretion of the 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 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 hereunder may also, in the discretion of the director of

finance, be met from bond or note proceeds exclusive of accrued interest or from other monies

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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

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

council.

     SECTION 8. 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 9. 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 of such officers shall for any reason have ceased to hold office.

     SECTION 10. 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 11. 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

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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 12. All or any portion of the 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. The director of finance, the town manager and the president of the town

council, on behalf of the town, are hereby authorized to execute such 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 (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 14. The question of the approval of this act shall be submitted to the electors

of the town at the next general election on November 5, 2019 or at a special election (other than a

primary), 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 2019 session of the General

Assembly, entitled, 'AN ACT AUTHORIZING THE TOWN OF WESTERLY TO ISSUE NOT

TO EXCEED $71,410,000 GENERAL OBLIGATION BONDS, NOTES AND OTHER

EVIDENCES OF INDEBTEDNESS TO FINANCE THE CONSTRUCTION, RENOVATION,

IMPROVEMENT, ALTERATION, REPAIR, FURNISHING AND EQUIPPING OF SCHOOLS

AND SCHOOL FACILITIES THROUGHOUT THE TOWN, SUBJECT TO APPROVAL OF

STATE HOUSING AID AT A REIMBURSEMENT RATE OR STATE SHARE RATIO OF

NOT LESS THAN 35% 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' 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 town clerk to keep a copy

of the act available at his or her office for public inspection, but the validity of the election shall

not be affected by this requirement.

     SECTION 15. This section and the foregoing section shall take effect upon the passage of

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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 foregoing section.

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LC002770

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EXPLANATION

OF

A N   A C T

AUTHORIZING THE TOWN OF WESTERLY TO ISSUE NOT TO EXCEED $71,410,000

GENERAL OBLIGATION BONDS, NOTES AND OTHER EVIDENCES OF

INDEBTEDNESS TO FINANCE THE CONSTRUCTION, RENOVATION, IMPROVEMENT,

ALTERATION, REPAIR, FURNISHING AND EQUIPPING OF SCHOOLS AND SCHOOL

FACILITIES THROUGHOUT THE TOWN, SUBJECT TO APPROVAL OF STATE

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

THAN 35% 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

***

     This act would authorize the Town of Westerly to issue bonds and notes in an amount not

exceeding $71,410,000 to finance the construction, renovation, improvement, alteration, repair,

furnishing and equipping of schools and school facilities throughout the town, subject to approval

of state housing aid at a reimbursement rate or state share ratio of not less than 35% 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. The amount of borrowing

authorized pursuant to this act shall be reduced by the amount of any grant received by the town

from the School Building Authority Capital Fund.

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

to § 16-7-44. Any bonds, notes or other evidences of indebtedness issued under this act for school

projects shall not be eligible for state housing aid reimbursement pursuant to § 16-7-44 unless the

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

Education.

     Sections 14 and 15 shall take effect upon passage. The remainder of the act takes effect

upon approval of the question provided for in Section 14.

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