LA 010

2021 -- S 0697 Enacted 03/24/2021

A N   A C T

AUTHORIZING THE TOWN OF WESTERLY TO ISSUE NOT TO EXCEED $11,000,000 GENERAL OBLIGATION BONDS, NOTES AND OTHER EVIDENCES OF INDEBTEDNESS TO FINANCE THE CONSTRUCTION OF ROAD AND SIDEWALK INFRASTRUCTURE IMPROVEMENTS AND RELATED WATER LINE IMPROVEMENTS IN THE TOWN

Introduced By: Senator Dennis L. Algiere

Date Introduced: March 23, 2021

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 eleven million dollars ($11,000,000)

from time to time under its corporate name and seal. 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. 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, and may bear interest at a fixed rate or rates or at a variable or auction rate or rates. The

bonds may be sold by a negotiated sale or by competitive bid and issued pursuant to a resolution

or an indenture of trust. Annual installments of principal may be provided for by maturity of

principal in the case of serial bonds or by mandatory serial redemption in the case of term bonds.

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 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 infrastructure bank pursuant to the

provisions of chapter 12.2 of title 46 and chapter 18 of title 24 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 and chapter 18 of title 24 apply to the issuance of the bonds

or notes issued hereunder to the extent the provisions of chapter 12.2 of title 46 or chapter 18 of

title 24 are inconsistent herewith. Such election may be fixed by the proceedings of the town council

authorizing such issuance of bonds or notes 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 shall be delivered to the

director of finance, and such proceeds exclusive of premiums and accrued interest shall be

expended: (1) For the construction of road and sidewalk infrastructure improvements and related

water line improvements in the town and all costs related thereto; (2) For payment of the principal

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

bonds or notes; (4) In repayment of advances under section 4; 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 6 and 9, 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 3. 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, 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 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 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 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 herein, 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 issued

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

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 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 § 45-12-2. 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 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 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 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. 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 12. 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 13. The question of the approval of this act shall be submitted to the electors of

the town at the special election to be held on May 4, 2021, or at a general or 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 2021 session of the

General Assembly, entitled, 'AN ACT AUTHORIZING THE TOWN OF WESTERLY TO ISSUE

NOT TO EXCEED $11,000,000 GENERAL OBLIGATION BONDS, NOTES AND OTHER

EVIDENCES OF INDEBTEDNESS TO FINANCE THE CONSTRUCTION OF ROAD AND

SIDEWALK INFRASTRUCTURE IMPROVEMENTS AND RELATED WATER LINE

IMPROVEMENTS IN THE TOWN ' 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/her office for public inspection, but

the validity of the election shall not be affected by this requirement.

SECTION 14. 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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LC002523

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