J  O  I  N  T     R  E  S  O  L  U  T  I  O  N

APPROVING THE ISSUANCE OF REFUNDING BONDS BY THE RHODE ISLAND WATER RESOURCES BOARD, CORPORATE

WHEREAS, in 1987, the General Assembly enacted Rhode Island General Laws Section 46-15.3-1 et seq., the Public Drinking Water Protection Act of 1987 (as enacted, reenacted and amended, the "Act"); and

WHEREAS, pursuant to the Act, the Rhode Island Water Resources Board, Corporate (the"Board") is designated to carry out the provisions of the Act ; and

WHEREAS, also pursuant to the Act, the purposes of the Board and the Suppliers of public drinking water (that is, cities, towns, districts, and other municipal, quasi-municipal and public and private corporations and companies engaged in the sale of potable water and in the water supply business in the State) is to protect the quality and safety of the public drinking water supply; and

WHEREAS, for the purpose of protecting the quality and safety of the public drinking water supply, there is imposed under the Act on each supplier a "water quality protection charge" based upon billings for sales of every supplier at the rate of $.0259 per one hundred gallons; and

WHEREAS, for all Suppliers (other than the City of Providence acting through the Providence Water Supply Board, or Suppliers purchasing water through the City of Providence acting through the Providence Water Supply Board), 40.7% of the amount of such water quality protection charges billed each month (i.e. $.01054 per one hundred gallons) is remitted to the Board, the corresponding percentage of charges representing water purchased from the Providence Water Supply Board is remitted to the Providence Water Supply Board, and for all Suppliers, 51.5% of water quality protection charges is remitted to the General Treasurer for deposit as general revenues and the balance, 7.8% of such charges, is retained by the Suppliers as an administrative charge; and

WHEREAS, in 1994, the Board issued its $11,835,000 Public Drinking Water Protection Revenue Bonds, Series 1994 (the "1994 Bonds" or the "Bonds to be Refunded") for the purpose of providing financing to suppliers for the acquisition of watershed lands and interests therein, improvements thereto and maintenance thereof, and funding of a debt service reserve fund and costs of issuance with respect to the 1994 Bonds; and

WHEREAS, the 1994 Bonds are not general obligations of the Board but rather special obligations of the Board payable solely from, and secured by, a pledge of the 40.7% portion of water quality protection charges allocated for remittance to the Board under the Act (the "Pledged Charges") and, to the extent provided in the bond indenture with respect to the 1994 Bonds, certain amounts on deposit in funds and accounts maintained under the indenture; and

WHEREAS, the 1994 Bonds do 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; and

WHEREAS, the Board's program of financing water quality protection projects with the 1994 bonds was conducted in two phases, Phase I and Phase II; and

WHEREAS, in Phase I, approximately 94% of available funds were expended for watershed land acquisition projects in the State, land acquisition in proximity to a water source being a proven method to protect the quality of drinking water supplies; and

WHEREAS, in Phase II, available funds were expended for watershed land acquisition and for various water quality improvement projects, including non-point source pollution or run-off prevention measures, treatment facility upgrades, water main cleaning or relining and purchase of water conservation kits and watershed signage; and

WHEREAS, pursuant to Rhode Island General Laws Sections 35-18-3 and 35-18-4, the Board has requested the approval of the General Assembly of the Board's issuance of up to $9,700,000 Public Drinking Water Protection Revenue Refunding Bonds, Series A (the "Refunding Bonds") for the purpose of providing funds to advance refund some or all of the 1994 Bonds currently outstanding in the principal amount of $8,765,000; and

WHEREAS, the proposed financing would be a pure refunding issue for the purpose of achieving savings, and pricing of the Refunding Bonds would be conditioned upon the Board achieving net present value savings of not less than three percent (3%) of the par amount of the Bonds to be Refunded; and

WHEREAS, in accordance with Rhode Island General Laws Section 35-18-3(c)(5), the Board will request that the Governor of the State certify that the issuance of the Refunding Bonds will provide a net benefit to the State; and

WHEREAS, in addition to achieving debt service savings, the proposed refunding may enable the Board to access funds presently held in a special reserve fund in connection with the 1994 Bonds, which funds could be used by the Board to conduct a Phase III water quality protection program for additional watershed land acquisition and water quality improvement projects by Suppliers; and

NOW, THEREFORE, BE IT RESOLVED,

THAT this General Assembly hereby approves the Board's issuance of up to $9,700,000 Public Drinking Water Protection Revenue Refunding Bonds, Series A for the purpose of providing funds to advance refund some or all of the 1994 Bonds currently outstanding in the principal amount of $8,765,000, provided that the net present value savings achieved by the issuance of the Refunding Bonds shall be not less than three percent (3%) of the par amount of the Bonds to be Refunded, and provided further that the Board shall obtain the certification of the Governor of the State that the issuance of the Refunding Bonds will provide a net benefit to the State;

THAT the watershed land acquisition and water quality protection projects financed with the 1994 Bonds and to be refinanced by the Refunding Bonds are needed in order to protect the quality and safety of the public drinking water supply in the State;

THAT consistent with the structure of the 1994 Bond transaction, the Refunding Bonds will not be general obligations of the Board but rather special limited obligations of the Board and will be payable solely from, and secured by, a pledge of the Pledged Charges and, to the extent provided in the bond indenture with respect to the Refunding Bonds, certain amounts on deposit in funds and accounts maintained under the indenture;

THAT the Refunding 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; and

THAT the maximum possible financial obligation of the State or of any public corporation under the Refunding Bonds will be the special obligation of the Board to make payments on the Refunding Bonds solely from the Pledged Charges and certain amounts on deposit in funds and accounts maintained under the bond indenture with respect to the Refunding Bonds; and

BE IT FURTHER RESOLVED,

THAT this Joint Resolution shall take effect immediately upon its passage by this General Assembly, provided that the delivery of the Refunding Bonds shall be not later than one (1) year from the date of such passage.