2016 -- H 8083

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LC005670

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

AUTHORIZING THE CITY OF CRANSTON TO FINANCE THE CONSTRUCTION,

IMPROVEMENT, RENOVATION, REPAIR, ALTERATION, FURNISHING AND

EQUIPPING OF PUBLIC BUILDINGS IN THE CITY BY THE ISSUANCE OF NOT MORE

THAN $1,000,000 GENERAL OBLIGATION BONDS AND NOTES THEREFOR

     

     Introduced By: Representatives Handy, Marcello, Jacquard, Bennett, and Ucci

     Date Introduced: April 14, 2016

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. The city of Cranston is hereby empowered, in addition to authority

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previously granted, to issue bonds to an amount not exceeding one million dollars ($1,000,000)

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from time to time under its corporate name and seal or a facsimile of such seal. The bonds of each

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issue shall mature in annual installments of principal, the first installment to be not later than

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three (3) years and the last installment not later than thirty (30) years after the date of the bonds.

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All such bonds of a particular issue may be issued in the form of zero coupon bonds, capital

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appreciation bonds, serial bonds or term bonds or a combination thereof. Annual installments of

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principal may be provided for by maturity of principal in the case of serial bonds or by mandatory

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sinking fund installments in the case of term bonds. The amount of principal appreciation each

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year on any bonds, after the date of original issuance, shall not be considered to be principal

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indebtedness for the purposes of any constitutional, statutory, or charter debt limit or any other

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limitation. The appreciation of principal after the date of original issue shall be considered

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interest. Only the original principal amount shall be counted in determining the principal amount

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so issued and any interest component shall be disregarded.

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     SECTION 2. The bonds shall be signed by the manual or facsimile signatures of the

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director of finance and the mayor and shall be issued and sold in such amounts as the city council

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may authorize. The manner of sale, denominations, maturities, interest rates and other terms,

 

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conditions and details of any bonds or notes issued under this act may be fixed by the proceedings

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of the city council authorizing the issue or by separate order or resolution of the city council or, to

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the extent provisions for these matters are not so made, they may be fixed by the officers

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authorized to sign the bonds or notes. Interest coupons (if any) shall bear the facsimile signature

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of the director of finance. The proceeds derived from the sale of the bonds shall be delivered to

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the city treasurer, and such proceeds, exclusive of premiums and accrued interest, shall be

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expended: (1) To finance the construction, improvement, renovation, repair, alteration, furnishing

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and equipping of public buildings in the city; or (2) In payment of the principal of or interest on

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temporary notes issued under section 3; or (3) In repayment of advances under section 4; or (4) In

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payment of costs of issuance associated with the issuance of bonds or notes hereunder; and/or (5)

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To finance capitalized interest on the projects. No purchaser of any bonds or notes under this act

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shall be in any way responsible for the proper application of the proceeds derived from the sale

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thereof. The proceeds of bonds or notes issued under this act, any applicable federal or state

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assistance and the other monies referred to in sections 6 and 9 shall be deemed appropriated for

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the purposes of this act without further action than that required by this act. In addition to such

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funds, there may be expended for the purposes of this act such other sums as may be appropriated

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therefor. The bonds authorized by this act may be consolidated for the purposes of issuance and

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sale with any other bonds of the city heretofore or hereafter authorized, provided that

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notwithstanding any such consolidation, the proceeds from the sale of the bonds authorized by

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this act shall be expended for the purposes set forth above. The director of finance and the mayor,

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on behalf of the city, are hereby authorized to execute such instruments, documents or other

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papers as either of them deem necessary or desirable to carry out the intent of this act and are also

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authorized to take all actions and execute all documents or agreements necessary to comply with

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federal tax and securities laws, which documents or agreements may have a term coextensive

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with the maturity of the bonds authorized hereby, including Rule 15c2-12 of the Securities and

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Exchange Commission and to execute and deliver a continuing disclosure agreement or certificate

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in connection with the bonds or notes.

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     SECTION 3. The city council may, by order or resolution authorizing the bonds or by

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separate order or resolution, authorize the issuance from time to time of interest bearing or

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discounted notes in anticipation of the issue of bonds under section 2 or in anticipation of the

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receipt of federal or state aid for the purposes of this act. The amount of original notes issued in

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anticipation of bonds may not exceed the amount of bonds which may be issued under this act

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and the amount of original notes issued in anticipation of federal or state aid may not exceed the

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amount of available federal or state aid as estimated by the director of finance. Temporary notes

 

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issued hereunder shall be signed by the manual or facsimile signature of the director of finance

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and countersigned by the manual or facsimile signature of the mayor and shall be payable within

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five (5) years from their respective dates, but the principal of and interest on notes issued for a

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shorter period may be renewed or paid from time to time by the issue of other notes hereunder,

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provided the period from the date of an original note to the maturity of any note issued to renew

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or pay the same debt or the interest thereon shall not exceed five (5) years. Any temporary notes

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in anticipation of bonds issued under this section may be refunded prior to the maturity of the

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notes by the issuance of additional temporary notes, provided that no such refunding shall result

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in any amount of such temporary notes outstanding at any one time in excess of two hundred

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percent (200%) of the amount of bonds which may be issued under this act, and provided further

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that if the issuance of any such refunding notes results in any amount of such temporary notes

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outstanding at any one time in excess of the amount of bonds which may be issued under this act,

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the proceeds of such refunding notes shall be deposited in a separate fund established with the

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bank which is paying agent for the notes being refunded. Pending their use to pay the notes being

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refunded, monies in the fund shall be invested for the benefit of the city by the paying agent at the

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direction of the city treasurer in any investment permitted under section 5. The monies in the fund

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and any investments held as a part of the fund shall be held in trust and shall be applied by the

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paying agent solely to the payment or prepayment of the principal of and interest on the notes

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being refunded. Upon payment of all principal of and interest on the notes, any excess monies in

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the fund shall be distributed to the city. The city may pay the principal of and interest on notes in

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full from other than the issuance of refunding notes prior to the issuance of bonds pursuant to

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section 1 hereof. In such case, the city's authority to issue bonds or notes in anticipation of bonds

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under this act shall continue provided that: (1) The city council passes a resolution evidencing the

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city's intent to pay off the notes without extinguishing the authority to issue bonds or notes; and

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(2) That the period from the date of an original note to the maturity date of any other note shall

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not exceed five (5) years.

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     SECTION 4. Pending any authorization or issue of bonds hereunder or pending or in lieu

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of any authorization or issue of notes hereunder, the city treasurer, with the approval of the city

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council given by an order or resolution passed and approved in the manner provided in chapter 12

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of the city charter, but not subject to the provisions of section 12.03 of said chapter, may, to the

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extent that bonds or notes may be issued hereunder, apply funds in the treasury of the city to the

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purposes specified in section 2 of this act, such advances to be repaid without interest from the

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proceeds of bonds or notes subsequently issued or from the proceeds of applicable federal or state

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assistance or from other available funds.

 

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     SECTION 5. Any proceeds of bonds or notes issued hereunder or of any applicable

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federal or state assistance, pending their expenditure, and subject to the approval of the

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investment committee mentioned in section 7.05 of the city charter, may be deposited or invested

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by the city treasurer in demand deposits, time deposits or savings deposits in banks which are

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members of the Federal Deposit Insurance Corporation or in obligations issued or guaranteed by

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the United States of America or by any agency or instrumentality thereof or as may be provided

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in any other applicable laws of the state of Rhode Island and by ordinance or resolution of the city

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council.

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     SECTION 6. Any accrued interest received upon the sale of bonds or notes hereunder

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shall be applied to the payment of the first interest due thereon. Any net earnings or profits

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realized from the investment of funds hereunder and any premiums arising from the sale of bonds

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or notes hereunder shall, in the discretion of the city treasurer, be applied to the cost of preparing,

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issuing and marketing bonds or notes hereunder to the extent not otherwise provided, to the

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payment of the cost of the projects or the cost of additional improvements coming within the

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description of the projects in section 2 of this act, to the payment of the principal of or interest on

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bonds or notes issued hereunder, or to any one or more of the foregoing. The cost of preparing,

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issuing and marketing bonds or notes hereunder may also, in the discretion of the city treasurer,

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be met from bond or note proceeds exclusive of premium and accrued interest or from other

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monies available therefor. Any balance of bond or note proceeds remaining after payment of the

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cost of the projects and the cost of additional improvements coming within the description of the

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projects in section 2 of this act, and the cost of preparing, issuing and marketing bonds or notes

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hereunder shall be applied to the payment of the principal of or interest on bonds or notes issued

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hereunder. To the extent permitted by applicable federal law, any earnings or net profit realized

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from the deposit or investment of funds hereunder may upon receipt be added to and dealt with as

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part of the revenues of the city from property taxes. In exercising any discretion under this

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section, the city treasurer shall be governed by any instructions adopted by any order or resolution

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of the city council.

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     SECTION 7. All bonds and notes issued under this act and the debts evidenced thereby

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shall be obligatory on the city in the same manner and to the same extent as other debts lawfully

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contracted by it and shall be excepted from the operation of ยง45-12-2 of the general laws. No

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such obligation shall at any time be included in the debt of the city for the purpose of ascertaining

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its borrowing capacity. The city shall annually appropriate a sum sufficient to pay the principal

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and interest coming due within the year on bonds and notes issued hereunder to the extent that

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monies therefor are not otherwise provided. If such sum is not appropriated, it shall nevertheless

 

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be added to the annual tax levy. In order to provide such sum in each year and notwithstanding

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any provision of law to the contrary, all taxable property in the city shall be subject to ad valorem

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taxation by the city without limitation as to rate or amount.

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

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any, if properly executed by the officers of the city in office on the date of execution, shall be

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valid and binding according to their terms notwithstanding that before the delivery thereof and

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payment therefor any or all of the officers shall for any reason have ceased to hold office.

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     SECTION 9. The city, acting by order or resolution of its city council, passed and

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approved in the manner provided in chapter 12 of the city charter, but not subject to the

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provisions of section 12.03 of said chapter, is authorized to apply for, contract for and expend any

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federal or state advances or other grants of assistance which may be available for the purposes of

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this act, and any such expenditures may be in addition to other monies provided in this act. To the

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extent of any inconsistency between any law of this state and any applicable federal law or

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regulation, the latter shall prevail. Federal and state advances, with interest where applicable,

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whether contracted for prior to or after the effective date of this act, may be repaid as projects

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costs under section 2 of this act.

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     SECTION 10. Bonds and notes may be issued under this act without obtaining approval

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of any governmental agency or the taking of any proceedings or the happening of any conditions

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except as specifically required by this act for such issue. In carrying out any projects financed in

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whole or in part under this act, including where applicable the condemnation of any land or

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interest in land, and in the levy and collection of assessments or other charges permitted by law

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on account of any such projects, all action shall be taken which is necessary to meet constitutional

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requirements whether or not such action is otherwise required by statute, but the validity of bonds

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or notes issued hereunder shall in no way depend upon the validity or occurrence of such action.

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     SECTION 11. All or any portion of the authorized but unissued authority to issue bonds

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and notes under this act may be extinguished by ordinance of the city council, without further

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action by the general assembly, seven (7) years after the effective date of this act.

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     SECTION 12. The question of the approval of this act shall be submitted to the electors

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of the city at the general election to be held on November 8, 2016. The question shall be

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submitted in substantially the following form: "Shall an act, passed at the 2016 session of the

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general assembly, entitled 'AN ACT AUTHORIZING THE CITY OF CRANSTON TO

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FINANCE THE CONSTRUCTION, IMPROVEMENT, RENOVATION, REPAIR, ALTERA

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TION, FURNISHING AND EQUIPPING OF PUBLIC BUILDINGS IN THE CITY BY THE

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ISSUANCE OF NOT MORE THAN $1,000,000 GENERAL OBLIGATION BONDS AND

 

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NOTES THEREFOR' be approved?" and the warning for the election shall contain the question

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to be submitted. From the time the election is warned and until it is held, it shall be the duty of the

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city clerk to keep a copy of the act available at the city clerk's office for public inspection, but the

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

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inconsistency between this act and the city charter, this act shall prevail.

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     SECTION 13. This section and the foregoing section shall take effect upon passage of

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this act. The remainder of this act shall take effect upon the approval of this act by a majority of

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those voting on the question at the election prescribed by the foregoing section.

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LC005670

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EXPLANATION

OF

A N   A C T

AUTHORIZING THE CITY OF CRANSTON TO FINANCE THE CONSTRUCTION,

IMPROVEMENT, RENOVATION, REPAIR, ALTERATION, FURNISHING AND

EQUIPPING OF PUBLIC BUILDINGS IN THE CITY BY THE ISSUANCE OF NOT MORE

THAN $1,000,000 GENERAL OBLIGATION BONDS AND NOTES THEREFOR

***

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     This act would authorize the city of Cranston to issue not more than one million dollars

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($1,000,000) general obligation bonds and temporary notes for the construction, improvement,

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renovation, repair, alteration, furnishing and equipping of public buildings in the city.

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     Sections 12 and 13 of the act would take effect upon passage. The remainder of the act

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would take effect upon approval by the electors of the city of the question provided for in section

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12.

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