Chapter 342
2008 -- S 3148
Enacted 07/08/08
A N A C T
AUTHORIZING
THE TOWN OF CUMBERLAND TO FINANCE ROAD IMPROVEMENTS IN THE TOWN BY THE ISSUANCE
OF NOT MORE THAN $2,500,000 BONDS AND/OR NOTES THEREFOR
Introduced
By: Senators Connors, Sen Picard, and Issa
Date
Introduced: June 20, 2008
It is enacted by the General Assembly as
follows:
SECTION 1. The
Town of Cumberland is hereby empowered, in addition to authority
previously granted, to issue bonds to an amount not
exceeding two million, five hundred thousand
dollars ($2,500,000) from time to time under its
corporate name and seal. The bonds of each
issue may be issued in the form of serial bonds
or term bonds or a combination thereof and shall
be payable either by maturity of principal in
the case of serial bonds or by mandatory serial
redemption in the case of term bonds, in annual
installments of principal, the first installment to
be not later than three (3) years and the last
installment not later than thirty (30) years after the
date of the bonds. All such bonds of a
particular issue may be issued in the form of zero coupon
bonds, capital appreciation bonds, serial bonds
or term bonds or a combination thereof. The
amount of principal appreciation each year on
any bonds, after the date of original issuance, shall
not be considered to be principal indebtedness
for the purposes of any constitutional or statutory
debt limit or any other limitation. The
appreciation of principal after the date of original issue
shall be considered interest. Only the original
principal amount shall be counted in determining
the principal amount so issued and any interest
component shall be disregarded.
SECTION 2. The
bonds shall be signed by the manual or facsimile signatures of the town
director of finance and the mayor and shall be
issued and sold in such amounts as the town
council may authorize by resolution. 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 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
officers authorized to sign the bonds or notes.
The proceeds derived from the sale of the bonds
shall be delivered to the director of finance,
and such proceeds exclusive of premiums and
accrued interest shall be expended as follows:
(a) for the purpose of financing road improvements
in the town (the "Project"); or (b) in
payment of the principal of or interest on temporary notes
issued under Section 3; (c) in repayment of
advances under Section 4; (d) in payment of the costs
of issuance of bonds or notes hereunder and/or
(e) in payment of capitalized interest during
construction of the Project. No purchaser of any
bonds or notes under this act shall be in any way
responsible for the proper application of the
proceeds derived from the sale thereof. The Project
shall be carried out and all contracts made
therefor by the mayor and the school committee on
behalf of the town, provided that no Project
shall be commenced without the approval of the
school committee. The proceeds of bonds or notes
issued under this act, any applicable federal or
state assistance and the other moneys referred
to in Sections 6 and 9 shall be deemed appropriated
for the purposes of this act without further
action than that required by this act. This 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 3. The
town council may by resolution authorize the issuance from time to
time of interest bearing or discounted notes in
anticipation of the issue of bonds or in anticipation
of the receipt of federal or state aid for the
purposes of this act. The amount of original notes
issued in anticipation of bonds may not exceed
the amount of bonds which may be issued under
this act and the amount of original notes issued
in anticipation of federal or state aid may not
exceed the amount of available federal or state
aid as estimated by the director of finance.
Temporary notes issued hereunder shall be signed
by the manual or facsimile signatures of the
director of finance and the mayor and shall be
payable within five (5) years from their respective
dates, but the principal of and interest on
notes issued for a shorter period may be renewed or paid
from time to time by the issue of other notes
hereunder, provided the period from the date of an
original note to the maturity of any note issued
to renew or pay the same debt or the interest
thereon shall not exceed five (5) years. The
town may pay the principal of and interest on notes
in full from other than the issuance of
refunding notes prior to the issuance of bonds pursuant to
Section 1 hereof. In such case, the town's
authority to issue bonds or notes in anticipation of
bonds under this act shall continue provided
that 1) the town council passes a resolution
evidencing the town's intent to pay off the
notes and 2) that the period from the date of an original
note to the maturity date of any other note
shall not exceed five (5) years. Any temporary notes
in anticipation of bonds issued under this section
may be refunded prior to the maturity of the
notes by the issuance of additional temporary
notes, provided that no such refunding shall result
in any amount of such temporary notes
outstanding at any one time in excess of two hundred
percent (200%) of the amount of bonds which may
be issued under this act, and provided further
that if the issuance of any such refunding notes
results in any amount of such temporary notes
outstanding at any one time in excess of the
amount of bonds which may be issued under this act,
the proceeds of such refunding notes shall be
deposited in a separate fund established with the
bank which is paying agent for the notes being
refunded. Pending their use to pay the notes being
refunded, moneys 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 moneys
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 moneys in the fund shall be distributed
to the town.
SECTION 4. 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 5. Any
proceeds of bonds or notes issued hereunder or of any applicable
federal or state assistance, pending their
expenditure, may be deposited or invested by the 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 6. Any
accrued interest received upon the sale of bonds or notes hereunder
shall be applied to the payment of the first
interest due thereon. Any premiums arising from the
sale of bonds or notes hereunder 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 moneys
available therefor. Any balance of bond or note
proceeds remaining after payment of the cost of
the project and the cost of preparing, issuing
and marketing bonds or notes hereunder shall be
applied to the payment of the principal of or
interest on bonds or notes issued hereunder. To the
extent permitted by applicable federal laws, any
earnings or net profit realized from the deposit or
investment of funds hereunder may upon receipt
be added to and dealt with as part of the
revenues of the town from property taxes. In
exercising any discretion under this section, the
director of finance shall be governed by any
instructions adopted by resolution of the town
council.
SECTION 7. All
bonds and notes issued under this act and the debts evidenced thereby
shall be obligatory on the town in the same
manner and to the same extent as other debts lawfully
contracted by it and shall be excepted from the
operation of section 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 moneys 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 not
withstanding any provision of law to the
contrary, all taxable property in the town shall be subject
to ad valorem taxation by the town without
limitation as to rate or amount.
SECTION 8. Any
bonds or notes issued under the provisions of this act, if properly
executed by officers of the town in office on
the date of execution, shall be valid and binding
according to their terms notwithstanding that
before the delivery thereof and payment therefor
any or all of such officers shall for any reason
have ceased to hold office.
SECTION 9. The
town, acting by resolution of its town council, is authorized to apply
for, contract for and expend any federal or
state advances or other grants or assistance which may
be available for the purposes of this act, and
any such expenditures may be in addition to other
moneys provided in this act. To the extent of
any inconsistency between any law of this state and
any applicable federal law or regulation, the
latter shall prevail. Federal and state advances, with
interest where applicable, whether contracted
for prior to or after the effective date of this act,
may be repaid as project costs under Section 2.
SECTION 10. Bonds
and notes may be issued under this act without obtaining the
approval of any governmental agency or the
taking of any proceedings or the happening of any
conditions except as specifically required by
this act for such issue. In carrying out any project
financed in whole or in part under this act,
including where applicable the condemnation of any
land or interest in land, and in the levy and
collection of assessments or other charges permitted
by law on account of any such project, all action
shall be taken which is necessary to meet
constitutional requirements whether or not such
action is otherwise required by statute; but the
validity of bonds and notes issued hereunder
shall in no way depend upon the validity or
occurrence of such action.
SECTION 11. The
director of finance and the mayor, on behalf of the town are hereby
authorized to execute such instruments,
documents or other papers as either of the foregoing
deem necessary or desirable to carry out the
intent of this act and are also authorized to take all
actions and execute all documents necessary to
comply with federal tax and securities laws
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 12. The
question of the approval of this act shall be submitted to the electors
of the town at a general or special election
which is not a primary to be held on November 4,
2008 or such other 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 2008 session of the
general assembly, entitled ‘AN ACT AUTHORIZING
THE TOWN OF CUMBERLAND TO
FINANCE ROAD IMPROVEMENTS IN THE TOWN BY THE
ISSUANCE OF NOT MORE
THAN $2,500,000 BONDS AND/OR NOTES THEREFOR’ be
approved?” 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/her office for public
inspection, but the validity of the election shall not be
affected by this requirement. To the extent of
any inconsistency between this act and the town
charter, this act shall prevail.
SECTION 13. This
section and the foregoing section shall take effect upon the passage of
this act. The remainder of this act shall take
effect upon the approval of this act by a majority of
those voting on the question at the election
prescribed by the foregoing section.
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LC03186
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