2020 -- H 8089

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LC005469

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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 FINANCE THE CONSTRUCTION,

IMPROVEMENT, RENOVATION, REPAIR, ALTERATION, FURNISHING AND

EQUIPPING OF PUBLIC BUILDINGS IN THE CITY BY THE ISSUANCE OF NOT MORE

THAN $1,000,000 GENERAL OBLIGATION BONDS AND NOTES THEREFOR

     

     Introduced By: Representatives Mattiello, Lima, Millea, and Handy

     Date Introduced: July 02, 2020

     Referred To: House Municipal Government

     It is enacted by the General Assembly as follows:

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     SECTION 1. The city of Cranston is hereby empowered, in addition to authority previously

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granted, to issue bonds to an amount not exceeding one million dollars ($1,000,000) from time to

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

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

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

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

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serial bonds or term bonds or a combination thereof. Annual installments of principal may be

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provided for by maturity of principal in the case of serial bonds or by mandatory sinking fund

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installments in the case of term bonds. The amount of principal appreciation each year on any

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

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the purposes of any constitutional, statutory, or charter 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 bonds shall be signed by the manual or facsimile signatures of the

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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. The manner of sale, denominations, maturities, interest rates and other terms,

 

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

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of the city council authorizing the issue or by separate order or resolution of the city council or, to

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

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to sign the bonds or notes. Interest coupons (if any) shall bear the facsimile signature of the director

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of finance. The proceeds derived from the sale of the bonds shall be delivered to the city treasurer,

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and such proceeds, exclusive of premiums and accrued interest, shall be expended: (1) To finance

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the ‎construction, improvement, renovation, repair, alteration, ‎furnishing and equipping of public

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buildings in the city; or (2) In payment of the principal of or interest on temporary notes issued

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under section 3; or (3) In repayment of advances under section 4, (4) In payment of costs of issuance

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associated with the issuance of bonds or notes hereunder; and/or (5) To finance capitalized interest

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on the projects. No purchaser of any bonds or notes under this act shall be in any way responsible

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for the proper application of the proceeds derived from the sale thereof. 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 6 and 9 shall be deemed appropriated for the purposes of this act without further

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action than that required by this act. In addition to such funds, there may be expended for the

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purposes of this act such other sums as may be appropriated therefor. The bonds authorized by this

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act may be consolidated for the purposes of issuance and sale with any other bonds of the city

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heretofore or hereafter authorized, provided that notwithstanding any such consolidation, the

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proceeds from the sale of the bonds authorized by this act shall be expended for the purposes set

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forth above. The director of finance and the mayor, on behalf of the city, are hereby authorized to

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execute such instruments, documents or other papers as either of them deem necessary or desirable

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to carry out the intent of this act and are also authorized to take all actions and execute all documents

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

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agreements may have a term coextensive with the maturity of the bonds authorized hereby,

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including Rule 15c2-12 of the Securities and Exchange Commission and to execute and deliver a

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

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     SECTION 3. The city council may, by order or resolution authorizing the bonds or by

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separate order or resolution, authorize the issuance from time to time of interest bearing or

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discounted notes in anticipation of the issue of bonds under section 2 or in anticipation of the receipt

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of federal or state aid for the purposes of this act. The amount of original notes issued in anticipation

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of bonds may not exceed the amount of bonds which may be issued under this act and the amount

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of original notes issued in anticipation of federal or state aid may not exceed the amount of available

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federal or state aid as estimated by the director of finance. Temporary notes issued hereunder shall

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be signed by the manual or facsimile signature of the director of finance and countersigned by the

 

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manual or facsimile signature of 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 issue of other notes hereunder, provided the period from

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

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

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

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

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

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which may be issued under this act, and provided further that if the issuance of any such refunding

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notes results in any amount of such temporary notes outstanding at any one time in excess of the

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amount of bonds which may be issued under this act, the proceeds of such refunding notes shall be

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deposited in a separate fund established with the bank which is paying agent for the notes being

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refunded. Pending their use to pay the notes being refunded, monies in the fund shall be invested

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for the benefit of the city by the paying agent at the direction of the city treasurer in any investment

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permitted under section 5. The monies in the fund and any investments held as a part of the fund

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shall be held in trust and shall be applied by the paying agent solely to the payment or prepayment

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of the principal of and interest on the notes being refunded. Upon payment of all principal of and

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interest on the notes, any excess monies in the fund shall be distributed to the city. The city may

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pay the principal of and interest on notes in full from sources other than the issuance of refunding

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notes prior to the issuance of bonds pursuant to section 1 hereof. In such case, the city’s authority

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to issue bonds or notes in anticipation of bonds under this act shall continue provided that: (1) The

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city council passes a resolution evidencing the city’s intent to pay off the notes without

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extinguishing the authority to issue bonds or notes; and (2) That the period from the date of an

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

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     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 city treasurer, with the approval of the city

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council given by an order or resolution, may, to the extent that bonds or notes may be issued

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hereunder, apply funds in the treasury of the city to the purposes specified in section 2, such

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advances to be repaid without interest from the proceeds of bonds or notes subsequently issued or

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from the proceeds of applicable federal or state assistance or from other available funds.

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

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or state assistance, pending their expenditure, and may be deposited or invested by the city treasurer

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in demand deposits, time deposits or savings deposits in banks which are members of the Federal

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Deposit Insurance Corporation or in obligations issued or guaranteed by the United States of

 

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America or by any agency or instrumentality thereof or as may be provided in any other applicable

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laws of the state of Rhode Island and by ordinance or resolution of the city council or pursuant to

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an investment policy of the city.

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     SECTION 6. Any accrued interest received upon the sale of bonds or notes hereunder shall

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be applied to the payment of the first interest due thereon. Any net earnings or profits realized from

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the investment of funds hereunder and any premiums arising from the sale of bonds or notes

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hereunder shall, in the discretion of the city treasurer, be applied to the cost of preparing, issuing

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and marketing bonds or notes hereunder to the extent not otherwise provided, to the payment of the

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cost of the projects or the cost of additional improvements coming within the description of the

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projects in section 2 of this act, to the payment of the principal of or interest on bonds or notes

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issued hereunder, or to any one or more of the foregoing. The cost of preparing, issuing and

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marketing bonds or notes hereunder may also, in the discretion of the city treasurer, be met from

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bond or note proceeds exclusive of premium and accrued interest or from other monies available

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therefor. Any balance of bond or note proceeds remaining after payment of the cost of the projects

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and the cost of additional improvements coming within the description of the projects in section 2

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of this act, and the cost of preparing, issuing and marketing bonds or notes hereunder shall be

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applied to the payment of the principal of or interest on bonds or notes issued hereunder. To the

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extent permitted by applicable federal law, any earnings or net profit realized from the deposit or

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investment of funds hereunder may upon receipt be added to and dealt with as part of the revenues

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

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shall be governed by any instructions adopted by any order or resolution of the city council.

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     SECTION 7. 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 tax

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

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contrary, all taxable property in the city shall be subject to ad valorem taxation by the city without

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limitation as to rate or amount.

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     SECTION 8. Any bonds or notes issued under the provisions of this act, and coupons, if

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any, if properly executed by the 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 the officers shall for any reason have ceased to hold office.

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

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

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

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

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any applicable federal law or regulation, the latter shall prevail. Federal and state advances, with

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

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be repaid as projects costs under section 2 of this act.

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

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any governmental agency or the taking of any proceedings or the happening of any conditions

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except as specifically required by this act for such issue. In carrying out any projects financed in

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whole or in part under this act, including where applicable the condemnation of any land or interest

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in land, and in the levy and collection of assessments or other charges permitted by law on account

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of any such projects, all action shall be taken which is necessary to meet constitutional requirements

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whether or not such action is otherwise required by statute, but the validity of bonds or notes issued

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hereunder shall in no way depend upon the validity or occurrence of such action.

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     SECTION 11. 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 or order of the city council, without

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

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     SECTION 12. The question of the approval of this act shall be submitted to the electors of

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the city at the general election to be held on November 3, 2020 or, if so determined by the city

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council, at a special city-wide election, other than a primary, held on a date to be determined by

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resolution or order of the city council: The question shall be submitted in substantially the following

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form: "Shall an act, passed at the 2020 session of the general assembly, entitled 'AN ACT

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AUTHORIZING THE CITY OF CRANSTON TO FINANCE THE ‎CONSTRUCTION,

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IMPROVEMENT, RENOVATION, REPAIR, ALTERATION, ‎FURNISHING AND

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EQUIPPING OF PUBLIC BUILDINGS IN THE CITY BY ‎THE ISSUANCE OF NOT MORE

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THAN $1,000,000 GENERAL OBLIGATION ‎BONDS AND NOTES THEREFOR' be

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approved?" and the warning for the election shall contain the question to be submitted. From the

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time the election is warned and until it is held, it shall be the duty of the city clerk to keep a copy

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of the act available at the city clerk's office for public inspection, but the validity of the election

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shall not be affected by this requirement. To the extent of any inconsistency between this act and

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the city charter, this act shall prevail.

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     SECTION 13. This section 13 and section 12 shall take effect upon passage. The remainder

 

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

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at the election prescribed by section 12.

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EXPLANATION

OF

A N   A C T

AUTHORIZING THE CITY OF CRANSTON TO FINANCE THE CONSTRUCTION,

IMPROVEMENT, RENOVATION, REPAIR, ALTERATION, FURNISHING AND

EQUIPPING OF PUBLIC BUILDINGS IN THE CITY BY THE ISSUANCE OF NOT MORE

THAN $1,000,000 GENERAL OBLIGATION BONDS AND NOTES THEREFOR

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     This act would authorize the city of Cranston to issue not more than one million dollars

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($1,000,000) general obligation bonds and temporary notes for the ‎construction, improvement,

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renovation, repair, alteration, ‎furnishing and equipping of public buildings in the city.

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     Sections 12 and 13 of the 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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12.

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