LA 040
2021 -- H 5477
Enacted 04/23/2021

A N   A C T
AUTHORIZING THE TOWN OF CUMBERLAND TO ISSUE GENERAL OBLIGATION BONDS AND/OR NOTES IN AN AMOUNT NOT TO EXCEED $2,500,000 TO FINANCE THE DEVELOPMENT, CONSTRUCTION, RENOVATION, IMPROVEMENT, ALTERATION, REPAIR AND EQUIPPING OF RECREATIONAL AREAS AND FACILITIES IN THE TOWN

Introduced By: Representatives McLaughlin, Giraldo, Ackerman, and Corvese
Date Introduced: February 10, 2021

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 general obligation bonds and notes 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,
provided that the final maturity of such bonds shall not exceed thirty (30) years from and 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 finance director and the mayor 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. The proceeds
derived from the sale of the bonds shall be delivered to the finance director, and such proceeds,
exclusive of premiums and accrued interest, shall be expended: (1) For the purpose of financing
the development, construction, renovation, improvement, alteration, repair and equipping of
recreational areas and facilities in the town; (2) In payment of the principal of and/or interest on
temporary notes issued under section 3; (3) In repayment of advances made pursuant to section 4;
and/or (4) In payment of costs of issuance associated with the issuance of bonds or notes hereunder.
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 proceeds of bonds or notes issued
under this act, any applicable federal or state assistance and the other monies referred to in sections
6 and 9, shall be deemed appropriated for the purpose of this act without further action than that
required by this act. This bond issue authorized by this act may be consolidated for the purpose 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. The finance director and the mayor,
on behalf of the town, are hereby authorized to execute such instruments, 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 and to execute and deliver a continuing disclosure agreement or certificate in
connection with the bonds or notes.
     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 finance director. Temporary notes issued
hereunder shall be signed by the finance director 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 notes 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 finance director 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; and
(2) That the period from the date of an original note to the maturity date of any other notes 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 finance director, 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 finance director
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, and to the extent permitted by applicable federal law, any earnings or net
profit realized from the deposit or investment of funds hereunder, shall, in the discretion of the
finance director, 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 issued hereunder may also,
in the discretion of the finance director, 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 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 finance director 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 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 authorized but unissued 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 issuance of bonds and notes under this act has been previously approved
by the electors of the town at the general election held on November 3, 2020, and therefore, the act
shall take effect upon the passage.
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LC001571
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