ARTICLE 6 SUBSTITUTE A AS AMENDED
RELATING TO DEBT
MANAGEMENT ACT JOINT RESOLUTIONS
SECTION 1. This article consists of Joint Resolutions that
are submitted pursuant to
Rhode
Island General Laws § 35-18-1, et seq.
SECTION
2. Energy Services Contracts – Equipment Replacement
WHEREAS, the higher
education system is proposing projects that involve the
implementation of professionally guided capital investments in
energy and, to a lesser scale,
water efficiency improvements, to university and college
buildings and infrastructure that will
pay for themselves through cost avoidance, while reducing
long term energy and/or water
consumption associated with operations; and
WHEREAS, the higher
education system manages over three hundred forty (340)
buildings, with associated utility infrastructure, containing
over six million nine hundred
thousand (6,900,000) square feet of space and a majority of
this space was constructed over thirty
(30) years ago. Energy and
water efficiency has become a vital part of an institution’s fiscal
responsibility; and
WHEREAS, energy
performance contracting has been significantly enhanced and refined
and many examples exist of statewide programs
successfully employed around the country that
are prudent from both a fiscal management and an
environmental stewardship perspective; and
WHEREAS, various private
sector companies, hereinafter referred to as energy service
companies or “ESCOs”, are willing to
guarantee energy savings to pay for the cost of the
replacement of antiquated and inefficient equipment, including
boilers, heating and air
conditioning, lighting and other building systems and equipment;
and
WHEREAS, the higher
education system has participated with the state department of
administration in a request for proposal process to enter into an
energy performance contract with
an ESCO to provide investment grade energy audit
evaluations, design, installation, and
maintenance services, as well as assistance in securing rebate resources
and the guarantee of the
energy or water saving performance of the installed retrofit
measures; and
WHEREAS, the evaluations
of an energy service company further affirms the significant
opportunity to implement energy conservation improvements on a
building-by-building basis that
pay for themselves through operating budget savings
within a fifteen year period; and
WHEREAS, tax exempt
lease financing secured by energy cost avoidance (i.e. by
redirecting dollars that would have paid for utility consumption,
but with the improvements can
be redeployed to repay the financing) is the most cost
effective means of supporting the
investment in energy or water efficiency improvements under this
program and
WHEREAS, the higher
education system is seeking to undertake energy savings
contracts to replace old and obsolete equipment and the
estimated cost of such contracts are:
dollars ($12,600,000); and
hundred thousand dollars ($11,500,000); and
WHEREAS, total financing
obligation of the State of
approximately thirty-two million one hundred seventy thousand
dollars ($32,170,000), with
twenty-four million one hundred thousand dollars
($24,100,000) deposited into the construction
fund, three million eight hundred fifty thousand dollars
($3,850,000) deposited in a capitalized
interest fund, three million two hundred thousand dollars
($3,200,000) deposited in a debt service
reserve fund, if required, and approximately one million
twenty thousand dollars ($1,020,000) to
pay associated costs of financing. Total payments on the
state’s obligation over fifteen (15) years
on the thirty-two million one hundred seventy thousand
dollars ($32,170,000) issuance are
projected to be forty-nine million five hundred eighty thousand
dollars ($49,580,000), assuming
an average effective interest rate of six percent
(6.0%). The payments would be financed with
higher education from energy savings; now, therefore, be it
RESOLVED,
that higher education is authorized to proceed with the aforementioned
projects in the amounts specified above, and be it further
RESOLVED,
that these contracts will be structured so that, at a minimum, the annual
principal, interest and service and maintenance costs resulting
from these contracts would be
completely offset by the annual energy savings guaranteed by the
ESCOs; and be it further
RESOLVED,
that these contracts would be multi-year contracts of up to a term of fifteen
years. In addition to saving energy and helping to protect
higher education from future energy
cost increases, these contracts would aid in reducing
maintenance costs by providing new
equipment and replacing older energy consuming systems.
SECTION
3.
WHEREAS, the Rhode
Island Turnpike and Bridge Authority (the “Authority”) is a
public corporation of the State of
and agency exercising public and essential governmental
functions of the State, created by the
General Assembly pursuant to Rhode Island General Laws
§ 24- 12-1, et seq. (as enacted,
reenacted and amended, the “Act”); and
WHEREAS, the State
recognizes that the
are an essential part of the State’s transportation
system and facilitates the tourism industry; and it
is the policy of the State that the public welfare and
the further economic development and the
prosperity of the State requires the maintenance of such
facilities and the financing thereof; and
WHEREAS, the Act
provides that the Authority shall have the power to charge and
collect tolls for the use of its facilities; and
WHEREAS, the Act also
provides that the Authority shall have the power to acquire,
hold and dispose of real and personal property in the
exercise of its powers and performance of its
duties; and
WHEREAS, the Act
authorizes the Authority to make and enter into all contracts and
agreements necessary or incidental to the performance of its
duties and the execution of its
powers under the Act, to issue revenue bonds of the
Authority for any of its purposes and to
refund its bonds, borrow money in anticipation of the
issuance of its bonds, and secure its bonds
by the pledge of its tolls and other revenues; and
WHEREAS, in furtherance
of its corporate purposes, the Authority is authorized to issue
from time to time its negotiable revenue bonds and notes
in one or more series in such principal
amounts for the purpose of paying all or a part of the costs
of any one or more projects authorized
by the Act, making provision for working capital and a
reserve for interest; and
WHEREAS, pursuant to
Rhode Island Public Corporation Debt Management Act
(as enacted, reenacted and amended, the
“Debt Management Act”), the Authority hereby requests
the approval of the General Assembly of
the Authority’s issuance of not more than sixty eight
million ninety thousand dollars
($68,090,000) Rhode Island Turnpike and Bridge
Authority Revenue Bonds (the “Bonds”) to be
secured by toll and other revenues, for the purpose of
providing funds to finance the renovation,
renewal, repair, rehabilitation, retrofitting, upgrading and
improvement of the
thereof, working capital, capitalized interest, a debt
service reserve and the costs of issuing and
insuring the Bonds (the “Project”); and
WHEREAS, the Project
constitutes essential public facilities directly benefiting the State;
and
WHEREAS, the Authority
is authorized pursuant to §24-12-28 of the Act to secure its
bonds by a pledge of the tolls and other revenues derived
from the projects in connection with
which bonds shall have been issued; and
WHEREAS, the State shall
directly benefit economically from the Project by the repair,
maintenance and improvement of the State transportation
infrastructure; and
WHEREAS, in the event
that not all of the Bond proceeds are used to carry out the
specified Project, the Authority will use any remaining funds
to pay debt service on the Bonds;
now, therefore, be it
RESOLVED, that this General Assembly finds that the Project is an essential
public
facility and is of a type and nature consistent with the
purposes and within the powers of the
Authority to undertake, and
hereby approves the Authority’s issuance of not more than sixty eight
million ninety thousand dollars ($68,090,000) in Bonds, which
amount is in addition to all prior
authorizations; and be further
RESOLVED,
that the Bonds will be special obligations of the Authority payable from
funds received by the Authority from the tolls and other
revenues of its facilities. The
Authority’s maximum
liability will be the total debt service on the Bonds, estimated to average
approximately seven million eleven thousand dollars ($7,011,000)
per year or approximately two
hundred six million eight hundred twelve thousand dollars
($206,812,000) in the aggregate, prior
to the receipt of any federal subsidy and/or assistance,
at an average interest rate of nine percent
(9.00%) and an
approximately a thirty (30) year maturity; and be it further
RESOLVED,
that the Bonds will not constitute indebtedness of the State or any of its
subdivisions or a debt for which the full faith and credit of the
State or any of its subdivisions is
pledged.
SECTION 4. Rhode Island Public Rail Corporation.
WHEREAS,
The State of
delegated to the
for maintaining and constructing highways, roads,
freeways, bridges and incidental structures as
established by chapter 8 of title 24, chapter 5 of title 37 and
chapter 13 of title 42 of the Rhode
Island general laws; and
WHEREAS, The National
Railroad Passenger Corporation ("Amtrak") owns the railroad
right-of-way along the Northeast Corridor throughout the state;
and
WHEREAS, There are approximately seventy-two roads or bridges in the
state located on
or above Amtrak's railroad right-of-way; and
WHEREAS, The department estimates that annually at least two of the
roads or bridges
crossing Amtrak's rail right-of-way will undergo construction
or reconstruction to accommodate
the needs of the traveling public; and
WHEREAS, In connection
with certain existing agreements between the department and
Amtrak, the state has agreed from time to time to
indemnify Amtrak and third-parties to the
extent that Amtrak is required to indemnify third-parties
(the "prior indemnities"); and
WHEREAS, In connection
with future agreements relating to the construction or
reconstruction to roads and bridges described above, the state and
the department will be required
to provide similar indemnities to Amtrak and
third-parties to the extent that Amtrak is required to
indemnify third-parties ("future indemnities"); and
WHEREAS, The State and
the department may be themselves constitutionally prohibited
from providing such prior indemnities and future
indemnities, which may negatively impact
commuter transit in
Public Rail Corporation ("Rail Corp"), a
public instrumentality of the state established by chapter
42-64.2 et seq. of the general laws of
providing Amtrak with such indemnities; and
WHEREAS, Pursuant to the
act, Rail Corp is authorized, created and established for the
purpose of enhancing and preserving the viability of commuter
transit and railroad freight
operations in
liabilities, borrow money at any rates of interest that it may
determine, and to make and execute
any other contracts and instruments necessary or
convenient in the exercise of the powers,
purposes and functions of the act; and
WHEREAS, In connection
with the extension of commuter rail service from
Rhode Island to North Kingstown, Rhode Island, as
provided in the South County Commuter Rail
Service Agreements, described in article 17, section 8
of chapter 68 of the public laws of 2009,
Rail Corp has been designated as the entity
responsible for securing and maintaining a liability
insurance policy to provide funds to pay all or a portion of
the liabilities of the state and Amtrak
for property damage, personal injury, bodily injury and
death arising out of the
Commuter Rail Service (the "South County Commuter
Rail Service insurance policy"), with
policy limits of two hundred million
insured retention of seven million five hundred thousand
"retention"); and
WHEREAS, Under article 17, section 8 of chapter 68 of the public laws
of 2009 and
pursuant to chapter 18 of title 35 of the
authorized Rail Corp to secure and maintain a line or evergreen
letter of credit in the amount of
seven million five hundred thousand
authorized to do business in
indemnities under the South County Commuter Rail Service
Agreements, and specifically the
payment of any amounts arising from time to time under the
retention, and for the payment of any
costs and fees reasonably incurred in connection with
securing and maintaining such line or
evergreen letter of credit; and
WHEREAS, Amtrak has
agreed to accept a liability insurance policy with limits of two
hundred million United States dollars ($200,000,000), towards
liabilities and a line or evergreen
letter of credit established in the amount of seven million
five hundred thousand United States
dollars ($7,500,000) issued by a bank authorized to do
business in
not less than one hundred million
secure the prior indemnities and the future indemnities or,
in the alternative, to accept expansion
of the scope of Rail Corp's South County Commuter Rail
Service insurance policy and line or
evergreen letter of credit to include the prior indemnities and
the future indemnities; and
WHEREAS, The department further covenants and affirms on behalf of
the state to
support Rail Corp and to include such financial support in
the governor's printed budget
submitted to the general assembly each year; and
WHEREAS, The requirements undertaken by the department on behalf of the
state and
Rail Corp as outlined herein to provide the prior
indemnities and the future indemnities, and the
approval and authority for Rail Corp to obtain and maintain a
line or evergreen letter of credit to
secure the prior indemnities and the future indemnities or
to amend the line or evergreen letter of
credit relating to the South County Commuter Rail Service
Indemnities to secure the prior
indemnities and the future indemnities are subject to chapter 18
of title 35 of the
general laws; and
WHEREAS, Pursuant to
sections 35-18-3 and 35-18-4 of the
Rail Corp has requested the approval and authority of
the general assembly to provide for the
prior indemnities and the future indemnities, which may include
securing and maintaining a new
insurance policy and line or letter of credit to secure the
prior indemnities and future indemnities,
or in the alternative, to amend or replace the South
County Commuter Rail Service insurance
policy and line or letter of credit in order that they may
also secure the prior indemnities and the
future indemnities; now, therefore be it
RESOLVED,
That the general assembly hereby approves and
authorizes Rail Corp to
provide, and hereby approves and authorizes the department's
support of Rail Corp and the use by
Rail Corp of the
department's funding to provide for the prior indemnities and the future
indemnities, which may include securing and maintaining an
insurance policy with limits of two
hundred million
portion of the liabilities and a line or evergreen letter of
credit in the amount of seven million five
hundred thousand
in
($100,000,000) to secure
all or a portion of the prior indemnities and the future indemnities or, in
the alternative, to amend the South County Commuter Rail
Service insurance policy and line or
evergreen letter of credit to secure Rail Corp's performance of
the prior indemnities and the future
indemnities in favor of the National Railroad Passenger
Corporation (Amtrak) and third-parties to
the extent that Amtrak is required to indemnify and
defend third-parties for all claims, damages,
losses, liabilities and expenses for personal injury, bodily
injury, death, or property damage
(including,
but not limited to, environmental conditions and preexisting environmental
conditions) and interference with the use of Amtrak's property,
which would not have occurred,
would not have been discovered, or would not have been
incurred but for the existence of any
road or bridge or appurtenance thereto, located or to be
located on, above, under or within the
boundary of any property owned or controlled by Amtrak, or
within the boundary of any railroad
safety envelope established pursuant to a federal program or
safety regulations, and owned or
used by the State of
the State of
subcontractor or invitee of the state or any municipality, public corporation,
or instrumentality of
the state, relating to any road, bridge, or appurtenance,
thereto located or to be located on, above,
under or within the boundary of any property owned or
controlled by Amtrak or within the
boundary of any railroad safety envelope established pursuant
to a federal program or safety
regulations, which obligations of the department include, but are
not limited to, the payment of
any amounts arising from time to time under the
retention, the payment of claims, damages,
losses, liabilities and expenses, and the payment of any
costs and fees reasonably incurred in
connection with obtaining such insurance policy and line or
evergreen letter of credit or amending
or replacing the South County Commuter Rail Service
insurance policy and line of evergreen
letter of credit.
SECTION 5. This article shall take effect upon passage.