act22048

LA 048

2022 -- H 8257
Enacted 06/30/2022

A N A C T

AUTHORIZING THE TOWN OF MIDDLETOWN TO ISSUE NOT TO EXCEED $235,000,000 GENERAL OBLIGATION BONDS, NOTES AND OTHER EVIDENCES OF INDEBTEDNESS TO FINANCE THE CONSTRUCTION, RENOVATION, IMPROVEMENT, ALTERATION, REPAIR, LANDSCAPING, FURNISHING AND EQUIPPING OF NEW ELEMENTARY, MIDDLE AND HIGH SCHOOLS AND SCHOOL FACILITIES THROUGHOUT THE TOWN, AND ALL ATTENDANT EXPENSES INCLUDING, BUT NOT LIMITED TO, DEMOLITION, ENGINEERING AND ARCHITECTURAL COSTS; PROVIDED THAT, THE AUTHORIZATION SHALL BE REDUCED BY THE AMOUNT OF CERTAIN GRANTS RECEIVED FROM STATE BOND PROCEEDS, FROM THE RHODE ISLAND DEPARTMENT OF EDUCATION OR FROM THE RHODE ISLAND SCHOOL BUILDING AUTHORITY

Introduced By: Representatives Cortvriend, Ruggiero, and Abney

Date Introduced: May 18, 2022

It is enacted by the General Assembly as follows:

SECTION 1. The town of Middletown is hereby empowered, in addition to authority

previously granted, to issue bonds, notes and other evidences of indebtedness (hereinafter “bonds”)

up to an amount not exceeding two hundred thirty-five million dollars ($235,000,000) from time

to time under its corporate name and seal or a facsimile of such 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 sinking fund installments in the case

of term bonds, in annual 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 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 town may be eligible for school housing aid reimbursement on debt

service pursuant to chapter ‎‎7 of title 16, or for a grant, loan or other financial assistance from

proceeds of bonds issued by the State of Rhode Island (the “state”), ‎from the Rhode Island

department of education (“RIDE”) or from the Rhode Island school building authority. The amount

of borrowing authorized ‎pursuant to this act shall be reduced by the amount of certain grants

actually received by the town from state bond proceeds, from RIDE or from the Rhode Island

school building authority.

SECTION 3. The bonds shall be signed by the manual or facsimile signatures of the town

finance director and the president of the town council 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 the resolutions 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 health and

educational building corporation pursuant to ‎chapter 7 of title 16 and chapter 38.1 of title 45 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 38.1 of title 45 apply to the issuance of the bonds

or notes issued hereunder to the extent ‎the provisions of chapter 38.1 of title 45 are inconsistent

herewith. In addition, 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, 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 ‎apply to the issuance of the bonds or notes issued hereunder

to the extent the provisions of ‎chapter 12.2 of title 46 are inconsistent herewith. Such election may

be fixed by the proceedings ‎of the town council authorizing such issuance 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 town finance director, and such proceeds exclusive of premiums

and accrued interest shall be expended: (1) To finance the construction, renovation, improvement,

alteration, repair, landscaping, furnishing and equipping of schools and school facilities throughout

the town, and all attendant expenses including, but not limited to, demolition, engineering and

architectural costs; (2) In payment of the principal of or interest on temporary notes issued under

section 4; (3) In repayment of advances under section 5; (4) In payment of related costs of issuance

of any bonds or notes; and/or (5) In payment of capitalized interest during construction of the

project (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 on behalf of the town by the town council. The

town council and its agents are authorized to enter, without delay and at reasonable times, any

public school buildings and other public school property for the purpose of accomplishing the

project and to do all acts and deeds necessary or convenient in connection with the project. The

proceeds of bonds or notes issued under this act, any applicable federal or state assistance and the

other monies referred to in sections 7 and 10 shall be deemed appropriated for the purposes of this

act without further action than that required by this act. The bonds authorized by this act may be

consolidated for the purpose of issuance and sale with any other bonds 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 4. The town council may by resolution authorize the issuance from time to time

of interest bearing or discounted notes in anticipation of the issuance 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 manual or facsimile signatures of the town finance director and

the president of the town council 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 issuance 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 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 trust in a separate fund established 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 town finance director in any investment permitted under section 6. The

monies in the fund and any investments held as 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 5. Pending any authorization or issue of bonds hereunder or pending or in lieu

of any authorization or issue of notes hereunder, the town 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 3, 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 6. 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 town 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 7. 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 premium arising from the sale of

bonds or notes hereunder shall, in the discretion of the town 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 project costs, 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 town 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 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 town finance director shall be

governed by any instructions adopted by resolution of the town council.

SECTION 8. 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 9. Any bonds or notes issued under the provisions of this act, and coupons, if

any, 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 10. 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 the 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 3.

SECTION 11. 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 12. The town finance director and the president of the town council, 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 instruments, documents or agreements necessary to comply with

federal tax and securities laws, which instruments, 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. All or any portion of the authorized but unissued authority to issue bonds

and notes under this act may be extinguished by ordinance of the town council after seven (7) years

shall have passed from the approval of this act provided for in section 14, without further action by

the general assembly.

SECTION 14. The question of the approval of this act shall be submitted to the qualified

voters of the town at the election to be held on November 8, 2022. The question shall be submitted

in substantially the following form: “Shall an act passed at the 2022 session of the general assembly

entitled ‘AN ACT AUTHORIZING THE TOWN OF MIDDLETOWN TO ISSUE NOT TO

EXCEED ‎‎$235,000,000 GENERAL ‎OBLIGATION BONDS, NOTES AND OTHER

EVIDENCES ‎OF INDEBTEDNESS TO ‎FINANCE THE CONSTRUCTION, RENOVATION,

‎IMPROVEMENT, ALTERATION, ‎REPAIR, LANDSCAPING, FURNISHING AND

‎EQUIPPING OF NEW ELEMENTARY, MIDDLE AND HIGH SCHOOLS AND SCHOOL

‎‎FACILITIES THROUGHOUT THE TOWN, AND ALL ATTENDANT EXPENSES

‎‎INCLUDING, BUT NOT LIMITED TO, DEMOLITION, ENGINEERING AND

ARCHITECTURAL ‎‎COSTS; PROVIDED THAT, THE AUTHORIZATION SHALL BE

REDUCED BY THE ‎‎AMOUNT ‎OF CERTAIN GRANTS RECEIVED FROM STATE BOND

PROCEEDS, FROM ‎THE ‎RHODE ISLAND DEPARTMENT OF EDUCATION OR FROM THE

RHODE ISLAND ‎‎SCHOOL BUILDING AUTHORITY’ 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 this act available at the clerk’s

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 15. This section and section 14 shall take effect upon the passage of this act.

The remainder of this act shall take effect if both: (1) A majority of those voting on the question

prescribed by section 14 shall vote in favor thereof; and (2) A majority of qualified voters of the

city of Newport and a majority of those qualified voters of the town of Middletown voting at the

November 8, 2022 election upon the question of whether an act passed at the January, 2022 session

of the general assembly entitled “AN ACT AUTHORIZING THE CITY OF NEWPORT AND

THE TOWN OF ‎MIDDLETOWN TO ESTABLISH A REGIONAL SCHOOL DISTRICT AND

‎PROVIDING FOR STATE AID FOR SCHOOL HOUSING COSTS OF AT LEAST 80% OF

DEBT SERVICE FOR ‎EXPENDITURES ELIGIBLE FOR STATE AID” shall vote in favor

thereof.

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LC005986

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