2020 -- H 8039 | |
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LC005446 | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2020 | |
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A N A C T | |
AUTHORIZING THE CITY OF CRANSTON TO ISSUE NOT TO EXCEED $147,000,000 | |
GENERAL OBLIGATION BONDS, NOTES AND OTHER EVIDENCES OF | |
INDEBTEDNESS TO FINANCE THE CONSTRUCTION, RENOVATION, IMPROVEMENT, | |
ALTERATION, REPAIR, LANDSCAPING, FURNISHING AND EQUIPPING OF SCHOOLS | |
AND SCHOOL FACILITIES THROUGHOUT THE CITY, SUBJECT TO APPROVAL OF | |
STATE HOUSING AID AT A REIMBURSEMENT RATE OR STATE SHARE RATIO OF | |
NOT LESS THAN 50% AT THE TIME OF ISSUANCE AND PROVIDED THAT THE | |
AUTHORIZATION SHALL BE REDUCED BY THE AMOUNT OF CERTAIN GRANTS | |
RECEIVED FROM STATE BOND PROCEEDS, FROM THE RHODE ISLAND | |
DEPARTMENT OF EDUCATION OR FROM THE RHODE ISLAND SCHOOL BUILDING | |
AUTHORITY | |
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Introduced By: Representatives Mattiello, Lima, Millea, and Handy | |
Date Introduced: June 18, 2020 | |
Referred To: House Finance | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. The city of Cranston is hereby authorized, in addition to authority previously |
2 | granted, to issue bonds and other evidences of indebtedness (hereinafter “bonds”) up to an amount |
3 | not exceeding one hundred forty-seven million dollars ($147,000,000) from time to time under its |
4 | corporate name and seal or a facsimile of such seal; provided, however, that bonds shall not be |
5 | issued unless the conditions of section 2 hereof as to the level of state aid are met. The bonds of |
6 | each issue may be issued in the form of serial bonds or term bonds or a combination thereof and |
7 | shall be payable either by maturity of principal in the case of serial bonds or by mandatory sinking |
8 | fund installments in the case of term bonds, in annual installments of principal, the first installment |
9 | to be not later than five (5) years and the last installment not later than thirty (30) years after the |
10 | date of the bonds. All such bonds of a particular issue may be issued in the form of zero coupon |
11 | bonds, capital appreciation bonds, serial bonds or term bonds or a combination thereof. The amount |
12 | of principal appreciation each year on any bonds, after the date of original issuance, shall not be |
13 | considered to be principal indebtedness for the purposes of any constitutional, charter or statutory |
14 | debt limit or any other limitation. The appreciation of principal after the date of original issue shall |
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1 | be considered interest. Only the original principal amount shall be counted in determining the |
2 | principal amount so issued and any interest component shall be disregarded. |
3 | SECTION 2. The city may be eligible for school housing aid reimbursement on debt |
4 | service pursuant to chapter 7 of title 16, or for a grant, loan or other financial assistance from |
5 | proceeds of bonds issued by the state of Rhode Island (the “state”), from the Rhode Island |
6 | Department of Education (“RIDE”) or from the Rhode Island School Building Authority. The |
7 | amount of borrowing authorized pursuant to this act shall be reduced by the amount of certain |
8 | grants actually received by the city from state bond proceeds, from RIDE or from the Rhode Island |
9 | School Building Authority; provided however, that the amount of borrowing authorized shall not |
10 | be reduced by the amount of any grant received by the city for any portion of the projects funded |
11 | by capital reserve funds. Bonds, notes or other evidences of indebtedness shall not be issued |
12 | under this act unless the city has received a letter from RIDE confirming that the then-current school |
13 | housing aid reimbursement rate under chapter 7 of title 16, as amended from time to time, or |
14 | financial assistance from the School Building Authority Capital Fund, or pursuant to any other law |
15 | hereafter enacted providing for funds to municipalities for school housing purposes, is not less than |
16 | fifty percent (50%) of debt service for those expenditures which are eligible for state aid. |
17 | SECTION 3. The bonds shall be signed by the director of finance and by the manual or |
18 | facsimile signature of the mayor and be issued and sold in such amounts as the city council may |
19 | determine by resolution or order. The manner of sale, denominations, maturities, interest rates and |
20 | other terms, conditions and details of any bonds or notes issued under this act may be fixed by the |
21 | proceedings of the city council authorizing the issue or by separate resolution or order of the city |
22 | council or, to the extent provisions for these matters are not so made, they may be fixed by the |
23 | officers authorized to sign the bonds or notes. Notwithstanding anything contained in this act to the |
24 | contrary, the city may enter into financing agreements with the Rhode Island Health and |
25 | Educational Building Corporation pursuant to chapter 7 of title 16 and chapter 38.1 of title 45 and, |
26 | with respect to bonds or notes issued in connection with such financing agreements, if any, the city |
27 | may elect to have the provisions of chapter 38.1 of title 45 apply to the issuance of the bonds or |
28 | notes issued hereunder to the extent the provisions of chapter 38.1 of title 45 are inconsistent |
29 | herewith. In addition, the city may enter into financing agreements with the Rhode Island |
30 | Infrastructure Bank pursuant to the provisions of chapter 12.2 of title 46 and, with respect to bonds |
31 | or notes issued in connection with such financing agreements, if any, the city may elect to have the |
32 | provisions of chapter 12.2 of title 46 apply to the issuance of the bonds or notes issued hereunder |
33 | to the extent the provisions of chapter 12.2 of title 46 are inconsistent herewith. Such election may |
34 | be fixed by the proceedings of the city council authorizing such issuance or by separate resolution |
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1 | or order of the city council, or, to the extent provisions for these matters are not so made, they may |
2 | be fixed by the officers authorized to sign the bonds or notes. The proceeds derived from the sale |
3 | of the bonds shall be delivered to the director of finance, and such proceeds, exclusive of premiums |
4 | and accrued interest, shall be expended: (1) For the construction, renovation, improvement, |
5 | alteration, repair, landscaping, furnishing and equipping of schools and school facilities throughout |
6 | the city of Cranston and all costs related thereto (the “projects”); (2) In payment of the principal of |
7 | or interest on temporary notes issued under section 4; (3) In repayment of advances under section |
8 | 5; (4) In payment of related costs of issuance of any bonds or notes; and/or (5) In payment of |
9 | capitalized interest during construction of the projects. No purchaser of any bonds or notes under |
10 | this act shall be in any way responsible for the proper application of the proceeds derived from the |
11 | sale thereof. The proceeds of bonds or notes issued under this act, any applicable federal or state |
12 | assistance and the other monies referred to in sections 7 and 10 shall be deemed appropriated for |
13 | the purposes of this act without further action than that required by this act. The bonds authorized |
14 | by this act may be consolidated for the purpose of issuance and sale with any other bonds of the |
15 | city heretofore or hereafter authorized, provided that, notwithstanding any such consolidation, the |
16 | proceeds from the sale of the bonds authorized by this act shall be expended for the purposes set |
17 | forth above. |
18 | SECTION 4. The city council may by resolution or order authorize the issuance from time |
19 | to time of interest bearing or discounted notes in anticipation of the issue of bonds under section 3 |
20 | or in anticipation of the receipt of federal or state aid for the purposes of this act. The amount of |
21 | original notes issued in anticipation of bonds may not exceed the amount of bonds which may be |
22 | issued under this act and the amount of original notes issued in anticipation of federal or state aid |
23 | may not exceed the amount of available federal or state aid as estimated by the director of finance. |
24 | Temporary notes issued hereunder shall be signed by the manual or facsimile signatures of the |
25 | director of finance and the mayor and shall be payable within five (5) years from their respective |
26 | dates, but the principal of and interest on notes issued for a shorter period may be renewed or paid |
27 | from time to time by the issue of other notes hereunder, provided the period from the date of an |
28 | original note to the maturity of any note issued to renew or pay the same debt or the interest thereon |
29 | shall not exceed five (5) years. Any temporary notes in anticipation of bonds issued under this |
30 | section may be refunded prior to the maturity of the notes by the issuance of additional temporary |
31 | notes, provided that no such refunding shall result in any amount of such temporary notes |
32 | outstanding at any one time in excess of two hundred percent (200%) of the amount of bonds which |
33 | may be issued under this act, and provided further that if the issuance of any such refunding notes |
34 | results in any amount of such temporary notes outstanding at any one time in excess of the amount |
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1 | of bonds which may be issued under this act, the proceeds of such refunding notes shall be deposited |
2 | in a separate fund established with the bank which is the paying agent for the notes being refunded. |
3 | Pending their use to pay the notes being refunded, monies in the fund shall be invested for the |
4 | benefit of the city by the paying agent at the direction of the director of finance in any investment |
5 | permitted under section 6. The monies in the fund and any investments held as a part of the fund |
6 | shall be held in trust and shall be applied by the paying agent solely to the payment or prepayment |
7 | of the principal of and interest on the notes being refunded. Upon payment of all principal of and |
8 | interest on the notes, any excess monies in the fund shall be distributed to the city. The city may |
9 | pay the principal of and interest on notes in full from other than the issuance of refunding notes |
10 | prior to the issuance of bonds pursuant to section 1 hereof. In such case, the city's authority to issue |
11 | bonds or notes in anticipation of bonds under this act shall continue provided that: (1) The city |
12 | council passes a resolution or order evidencing the city's intent to pay off the notes without |
13 | extinguishing the authority to issue bonds or notes; and (2) That the period from the date of an |
14 | original note to the maturity date of any other note shall not exceed five (5) years. |
15 | SECTION 5. Pending any authorization or issue of bonds hereunder or pending or in lieu |
16 | of any authorization or issue of notes hereunder, the director of finance, with the approval of the |
17 | city council may, to the extent that bonds or notes may be issued hereunder, apply funds in the |
18 | general treasury of the city to the purposes specified in section 3, such advances to be repaid without |
19 | interest from the proceeds of bonds or notes subsequently issued or from the proceeds of applicable |
20 | federal or state assistance or from other available funds. |
21 | SECTION 6. Any proceeds of bonds or notes issued hereunder or of any applicable federal |
22 | or state assistance, pending their expenditure may be deposited or invested by the director of |
23 | finance, in demand deposits, time deposits or savings deposits in banks which are members of the |
24 | Federal Deposit Insurance Corporation or in obligations issued or guaranteed by the United States |
25 | of America or by any agency or instrumentality thereof or as may be provided in any other |
26 | applicable law of the state of Rhode Island or resolution or order of the city council or pursuant to |
27 | an investment policy of the city. |
28 | SECTION 7. Any accrued interest received upon the sale of bonds or notes hereunder shall |
29 | be applied to the payment of the first interest due thereon. Any premiums arising from the sale of |
30 | bonds or notes hereunder and, to the extent permitted by applicable federal laws, any net earnings |
31 | or profits realized from the deposit or investment of funds hereunder shall, in the discretion of the |
32 | director of finance, be applied to the cost of preparing, issuing, and marketing bonds or notes |
33 | hereunder to the extent not otherwise provided, to the payment of the cost of the projects, to the |
34 | payment of the principal of or interest on bonds or notes issued hereunder, to the revenues of the |
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1 | city and dealt with as part of the revenues of the city from property taxes to the extent permitted by |
2 | federal law, or to any one or more of the foregoing. The cost of preparing, issuing, and marketing |
3 | bonds or notes hereunder may also, in the discretion of the director of finance, be met from bond |
4 | or note proceeds exclusive of premium and accrued interest or from other monies available therefor. |
5 | Any balance of bond or note proceeds remaining after payment of the cost of the projects and the |
6 | cost of preparing, issuing and marketing bonds or notes hereunder shall be applied to the payment |
7 | of the principal of or interest on bonds or notes issued hereunder. To the extent permitted by |
8 | applicable federal laws, any earnings or net profit realized from the deposit or investment of funds |
9 | hereunder may, upon receipt, be added to and dealt with as part of the revenues of the city from |
10 | property taxes. In exercising any discretion under this section, the director of finance shall be |
11 | governed by any instructions adopted by resolution or order of the city council. |
12 | SECTION 8. All bonds and notes issued under this act and the debt evidenced hereby shall |
13 | be obligatory on the city in the same manner and to the same extent as other debts lawfully |
14 | contracted by it and shall be excepted from the operation of § 45-12-2 and any provision of the city |
15 | charter. No such obligation shall at any time be included in the debt of the city for the purpose of |
16 | ascertaining its borrowing capacity. The city shall annually appropriate a sum sufficient to pay the |
17 | principal and interest coming due within the year on bonds and notes issued hereunder to the extent |
18 | that monies therefor are not otherwise provided. If such sum is not appropriated, it shall |
19 | nevertheless be added to the annual tax levy. In order to provide such sum in each year and |
20 | notwithstanding any provisions of law to the contrary, all taxable property in the city shall be |
21 | subject to ad valorem taxation by the city without limitation as to rate or amount. |
22 | SECTION 9. Any bonds or notes issued under the provisions of this act, if properly |
23 | executed by the officers of the city in office on the date of execution, shall be valid and binding |
24 | according to their terms notwithstanding that before the delivery thereof and payment therefor any |
25 | or all of such officers shall for any reason have ceased to hold office. |
26 | SECTION 10. The city, acting by resolution or order of its city council is authorized to |
27 | apply for, contract for and expend any federal or state advances or other grants of assistance which |
28 | may be available for the purposes of this act, and any such expenditures may be in addition to other |
29 | monies provided in this act. To the extent of any inconsistency between any law of this state and |
30 | any applicable federal law or regulation, the latter shall prevail. Federal and state advances, with |
31 | interest where applicable, whether contracted for prior to or after the effective date of this act, may |
32 | be repaid as a cost of the projects under section 3. |
33 | SECTION 11. Bonds and notes may be issued under this act without obtaining the approval |
34 | of any governmental agency or the taking of any proceedings or the happening of any conditions |
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1 | except as specifically required by this act for such issue. In carrying out any project financed in |
2 | whole or in part under this act, including where applicable the condemnation of any land or interest |
3 | in land, and in the levy and collection of assessments or other charges permitted by law on account |
4 | of any such project, all action shall be taken which is necessary to meet constitutional requirements |
5 | whether or not such action is otherwise required by statute, but the validity of bonds and notes |
6 | issued hereunder shall in no way depend upon the validity or occurrence of such action. |
7 | SECTION 12. The director of finance and the mayor, on behalf of the city are hereby |
8 | authorized to execute such instruments, documents or other papers as either of them deem necessary |
9 | or desirable to carry out the intent of this act and are also authorized to take all actions and execute |
10 | all documents necessary to comply with federal tax and securities laws, which documents or |
11 | agreements may have a term coextensive with the maturity of the bonds authorized hereby, |
12 | including Rule 15c2-12 of the Securities and Exchange Commission (the "Rule") and to execute |
13 | and deliver a continuing disclosure agreement or certificate in connection with the bonds or notes |
14 | in the form as shall be deemed advisable by such officers in order to comply with the Rule. |
15 | SECTION 13. All or any portion of the authorized but unissued authority to issue bonds |
16 | and notes under this act may be extinguished by resolution or order of the city council, without |
17 | further action by the general assembly, seven (7) years after the effective date of this act. |
18 | SECTION 14. The question of the approval of this act shall be submitted to the electors of |
19 | the city at the general election to be held on November 3, 2020 or, if so determined by the city |
20 | council, at a special city-wide election, other than a primary, held on a date to be determined by |
21 | resolution or order of the city council. The question shall be submitted in substantially the following |
22 | form: "Shall an act passed at the 2020 session of the general assembly entitled 'AN ACT |
23 | AUTHORIZING THE CITY OF CRANSTON TO ISSUE NOT TO EXCEED $147,000,000 |
24 | GENERAL OBLIGATION BONDS, NOTES AND OTHER EVIDENCES OF INDEBTEDNESS |
25 | TO FINANCE THE CONSTRUCTION, RENOVATION, IMPROVEMENT, ALTERATION, |
26 | REPAIR, LANDSCAPING, FURNISHING AND EQUIPPING OF SCHOOLS AND SCHOOL |
27 | FACILITIES THROUGHOUT THE CITY, SUBJECT TO APPROVAL OF STATE HOUSING |
28 | AID AT A REIMBURSEMENT RATE OR STATE SHARE RATIO OF NOT LESS THAN 50% |
29 | AT THE TIME OF ISSUANCE AND PROVIDED THAT THE AUTHORIZATION SHALL BE |
30 | REDUCED BY THE AMOUNT OF CERTAIN GRANTS RECEIVED FROM STATE BOND |
31 | PROCEEDS, FROM THE RHODE ISLAND DEPARTMENT OF EDUCATION OR FROM THE |
32 | RHODE ISLAND SCHOOL BUILDING AUTHORITY' be approved?" and the warning for the |
33 | election shall contain the question to be submitted. From the time the election is warned and until |
34 | it is held, it shall be the duty of the city clerk to keep a copy of the act available at the clerk's office |
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1 | for public inspection, but the validity of the election shall not be affected by this requirement. To |
2 | the extent of any inconsistency between this act and the city charter or any law of special |
3 | applicability to the city, this act shall prevail. |
4 | SECTION 15. This act shall constitute an enabling act of the general assembly that is |
5 | required pursuant to § 16-7-44. Any bonds, notes or other evidences of indebtedness issued under |
6 | this act for school projects shall not be eligible for state aid reimbursement pursuant to § 16-7-44 |
7 | unless the school projects described herein have been approved by RIDE. |
8 | SECTION 16. This Section and Sections 14 and 15 shall take effect upon passage. The |
9 | remainder of this act shall take effect upon the approval of this act by a majority of those voting on |
10 | the question at the election prescribed by section 14. |
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LC005446 | |
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EXPLANATION | |
OF | |
A N A C T | |
AUTHORIZING THE CITY OF CRANSTON TO ISSUE NOT TO EXCEED $147,000,000 | |
GENERAL OBLIGATION BONDS, NOTES AND OTHER EVIDENCES OF | |
INDEBTEDNESS TO FINANCE THE CONSTRUCTION, RENOVATION, IMPROVEMENT, | |
ALTERATION, REPAIR, LANDSCAPING, FURNISHING AND EQUIPPING OF SCHOOLS | |
AND SCHOOL FACILITIES THROUGHOUT THE CITY, SUBJECT TO APPROVAL OF | |
STATE HOUSING AID AT A REIMBURSEMENT RATE OR STATE SHARE RATIO OF | |
NOT LESS THAN 50% AT THE TIME OF ISSUANCE AND PROVIDED THAT THE | |
AUTHORIZATION SHALL BE REDUCED BY THE AMOUNT OF CERTAIN GRANTS | |
RECEIVED FROM STATE BOND PROCEEDS, FROM THE RHODE ISLAND | |
DEPARTMENT OF EDUCATION OR FROM THE RHODE ISLAND SCHOOL BUILDING | |
AUTHORITY | |
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1 | This act would authorize the city of Cranston to issue not more than $147,000,000 general |
2 | obligation bonds, notes and other evidences of indebtedness to finance the construction, renovation, |
3 | improvement, alteration, repair, landscaping, furnishing and equipping of schools and school |
4 | facilities throughout the city of Cranston and all costs related thereto, subject to approval of State |
5 | Housing Aid at a reimbursement rate or state share ratio of not less than 50% at the time of issuance |
6 | and provided that the authorization shall be reduced by the amount of certain grants received from |
7 | State bond proceeds, from the Rhode Island Department of Education or from the Rhode Island |
8 | School Building Authority. |
9 | This act would constitute an enabling act of the general assembly that is required pursuant |
10 | to § 16-7-44. Any bonds, notes or other evidences of indebtedness issued under this act for school |
11 | projects shall not be eligible for state aid reimbursement pursuant to § 16-7-44 unless the school |
12 | projects described herein have been approved by the Rhode Island Department of Education |
13 | ("RIDE"). |
14 | Sections 14 and 15 would take effect upon passage. The remainder of the act would take |
15 | effect upon approval of the question provided for in section 14. |
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