2021 -- S 0951 | |
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LC002998 | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2021 | |
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A N A C T | |
RELATING TO SCHOOL CONSTRUCTION AND FINANCING IN THE CITY OF | |
CENTRAL FALLS AND AUTHORIZING THE CITY OF CENTRAL FALLS TO ISSUE NOT | |
TO EXCEED $5,760,000 GENERAL OBLIGATION BONDS, NOTES AND OTHER | |
EVIDENCES OF INDEBTEDNESS TO FINANCE THE CONSTRUCTION, RENOVATION, | |
IMPROVEMENT, ALTERATION, REPAIR, FURNISHING AND EQUIPPING OF SCHOOLS | |
AND SCHOOL FACILITIES IN THE CITY | |
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Introduced By: Senators Acosta, Cano, and Pearson | |
Date Introduced: June 14, 2021 | |
Referred To: Senate Finance | |
(General Treasurer) | |
It is enacted by the General Assembly as follows: | |
1 | WHEREAS, Pursuant to Article XII of the Rhode Island Constitution, it is the duty of the |
2 | State of Rhode Island and the Rhode Island General Assembly to promote public schools as the |
3 | diffusion of knowledge is essential to the preservation of the rights and liberties of the Rhode Island |
4 | people; and |
5 | WHEREAS, It is the duty of the State of Rhode Island and the Rhode Island General |
6 | Assembly to adopt all means which they deem necessary and proper to secure to the people, the |
7 | advantages and opportunities of education and guarantee adequate public school housing for all |
8 | public school children in the state; and |
9 | WHEREAS, School facilities provide more than a place for instruction. The physical |
10 | learning environment contributes to the successful performance of educational programs designed |
11 | to meet students' educational needs and good educational outcomes depend on safe healthy school |
12 | buildings. Every student needs a safe, healthy, and sanitary learning environment that promotes |
13 | student learning and development; and |
14 | WHEREAS, School buildings in the city of Central Falls Rhode Island are in need of major |
15 | repairs and upgrades, presently interfere with the effective operation of schools and negatively |
16 | affect the health safety and welfare of the children of Central Falls; and |
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1 | WHEREAS, Due to various financial hardships of the city of Central Falls, the city is not |
2 | able to finance the construction, renovation, improvement, alteration, repair, furnishing and |
3 | equipping of schools and school facilities in the city without certain legislative changes and support |
4 | from the State of Rhode Island; |
5 | It is enacted and resolved by the General Assembly as follows: |
6 | SECTION 1. Sections 1 through 3 of this act shall serve as the joint resolution required |
7 | pursuant to Rhode Island General Laws §35-18-1, et seq (the “Rhode Island Public Corporation |
8 | Debt Management Act”). |
9 | SECTION 2. City of Central Falls School Project. |
10 | WHEREAS, The WHEREAS clauses in paragraphs 1 through 5 hereof are hereby |
11 | incorporated herein by reference. |
12 | WHEREAS, The City of Central Falls is proposing a project consisting of the construction, |
13 | renovation, improvement, alteration, repair, furnishing and equipping of schools and school |
14 | facilities in the city; and |
15 | WHEREAS, The Project will be financed through the Rhode Island Health and Educational |
16 | Building Corporation (the “Corporation”) under its school financing revenue bond program, with |
17 | an expected term of not to exceed thirty (30) years and it is anticipated that the State will be a |
18 | signatory to the Financing Agreement with the Rhode Island Health and Educational Building |
19 | Corporation; and |
20 | WHEREAS, It is anticipated that the State’s obligations under the Financing Agreement |
21 | will be subject to appropriation therefor by the General Assembly in each budget year; and |
22 | WHEREAS, The Rhode Island Public Corporation Debt Management Act requires the |
23 | General Assembly to provide its consent to the issuance or incurring by the State of Rhode Island |
24 | of certain obligations, including financing guarantees or other agreements; and |
25 | WHEREAS, The total project costs and costs of financing covered by the Financing |
26 | Agreement are not expected to exceed $144,000,000. Debt service payments will be supported by |
27 | revenues received by the Corporation under the Financing Agreement which include annual |
28 | appropriations for debt service made by the State, state school construction aid payments and state |
29 | school operations aid payments if any, pursuant to chapter 7 of title 16 of the Rhode Island general |
30 | laws and payments from the City of Central Falls under the Financing Agreement. Total debt |
31 | service on the bonds in not expected to exceed $9,400,000 annually and $281,000,000 in the |
32 | aggregate based on an average interest rate of five percent (5.00%); now, therefor be it |
33 | RESOLVED, That this General Assembly hereby approves the financing in a principal |
34 | amount up to $144,000,000 for the Central Falls School Project; and be it further |
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1 | RESOLVED, That the State, acting through the general treasurer may execute the |
2 | Financing Agreement as contemplated herein and any other agreements necessary to effectuate the |
3 | purposes of this act; and be it further |
4 | RESOLVED, That the Bonds will be special obligations of the Corporation payable from |
5 | funds received by the Corporation under the Financing Agreement and other revenues received by |
6 | the Corporation, in any combination or priority as may be designated in the proceedings of the |
7 | Corporation authorizing the issuance of such debt. The total debt service on the Bonds is estimated |
8 | to average approximately nine million four hundred thousand dollars ($9,400,000) per year or |
9 | approximately two hundred eighty-one million dollars ($281,000,000) in the aggregate, at an |
10 | average interest rate of approximately five percent (5%) and an approximately thirty (30) year |
11 | maturity; and be it further |
12 | RESOLVED, That the Bonds will not constitute indebtedness of the State or any of its |
13 | subdivisions or a debt for which the full faith and credit of the State or any of its subdivisions is |
14 | pledged. This act shall constitute an enabling act of the general assembly that is required pursuant |
15 | to § 16-7-44; and be it further |
16 | RESOLVED, That the State’s authority to incur the obligations set forth herein will expire |
17 | within five (5) years of the date of passage of this Act if such financing transaction is not executed |
18 | prior to that date. |
19 | SECTION 3. Sections 1, 2, and this Section 3 of this act shall take effect upon the passage. |
20 | SECTION 4. Sections 4 through 19 of this act shall be entitled "AN ACT AUTHORIZING |
21 | THE CITY OF CENTRAL FALLS TO ISSUE NOT TO EXCEED $5,760,000 GENERAL |
22 | OBLIGATION BONDS, NOTES AND OTHER EVIDENCES OF INDEBTEDNESS TO |
23 | FINANCE THE CONSTRUCTION, RENOVATION, IMPROVEMENT, ALTERATION, |
24 | REPAIR, FURNISHING AND EQUIPPING OF SCHOOLS AND SCHOOL FACILITIES IN |
25 | THE CITY". |
26 | SECTION 5. The city of Central Falls is hereby empowered, in addition to authority |
27 | previously granted, to issue bonds in an amount not exceeding five million seven hundred sixty |
28 | dollars ($5,760,000) from time to time under its corporate name and seal. The bonds of each issue |
29 | may be issued in the form of zero coupon bonds, capital appreciation bonds, serial bonds or term |
30 | bonds or a combination thereof and shall be payable either by maturity of principal in the case of |
31 | serial bonds or by mandatory serial redemption in the case of term bonds, in installments of |
32 | principal, the first installment to be not later than five (5) years and the last installment not later |
33 | than thirty (30) years after the date the bonds are issued. All such bonds may bear interest at a fixed |
34 | rate or rates or at a variable or auction rate or rates. The bonds may be sold by a negotiated sale or |
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1 | by competitive bid and issued pursuant to a resolution or an indenture of trust. Annual installments |
2 | of principal may be provided for by maturity of principal in the case of serial bonds or by mandatory |
3 | serial redemption in the case of term bonds. The amount of principal appreciation each year on any |
4 | bonds, if any after the date of original issuance, shall not be considered to be principal indebtedness |
5 | for the purposes of any constitutional or statutory debt limit or any other limitation. The |
6 | appreciation of principal after the date of original issue shall be considered interest. Only the |
7 | original principal amount shall be counted in determining the principal amount so issued and any |
8 | interest component shall be disregarded. |
9 | SECTION 6. This act shall constitute an enabling act of the general assembly that is |
10 | required pursuant to § 16-7-44. Any bonds, notes or other evidences of indebtedness issued under |
11 | this act for school projects shall not be eligible for state housing aid reimbursement pursuant to § |
12 | 16-7-44 unless the school projects described herein have been approved by the Rhode Island |
13 | Department of Education pursuant to § 16-7-36(2). |
14 | SECTION 7. The bonds shall be signed by the mayor and the director of finance and shall |
15 | be issued and sold in such amounts as the city council may authorize. The manner of sale, |
16 | denominations, maturities, interest rates and other terms, conditions and details of any bonds or |
17 | notes issued under this act may be fixed by the proceedings of the city council authorizing the issue |
18 | or by separate resolution of the city council or, to the extent provisions for these matters are not so |
19 | made, they may be fixed by the officers authorized to sign the bonds or notes. Notwithstanding |
20 | anything contained in this act to the contrary, the city may enter into financing agreements with the |
21 | Rhode Island Health and Educational Building Corporation pursuant to chapter 7 of title 16 and |
22 | chapter 38.1 of title 45 and, with respect to bonds or notes issued in connection with such financing |
23 | agreements, if any, the city may elect to have the provisions of chapter 38.1 of title 45 apply to the |
24 | issuance of the bonds or notes issued hereunder to the extent the provisions of chapter 38.1 of title |
25 | 45 are inconsistent herewith. Such election may be fixed by the proceedings of the city council |
26 | authorizing such issuance of by separate resolution of the city council, or, to the extent provisions |
27 | for these matters are not so made, they may be fixed by the officers authorized to sign the bonds or |
28 | notes. The proceeds derived from the sale of the bonds shall be delivered to the director of finance, |
29 | and such proceeds exclusive of premiums and accrued interest shall be expended: |
30 | (1) For the construction, renovation, improvement, alteration, repair furnishing and |
31 | equipping of schools and school facilities in the city and all costs related thereto either directly or |
32 | as a reimbursement to the state to the extent the state pays for and or finances such costs hereunder; |
33 | (2) For payment of the principal or interest on temporary notes issued under section 8; |
34 | (3) In payment of capitalized interest on bonds or notes; |
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1 | (4) In repayment of advances under section 9; or |
2 | (5) In payment of related costs of issuance of any bonds or notes. No purchaser of any |
3 | bonds or notes under this act shall be in any way responsible for the proper application of the |
4 | proceeds derived from the sales thereof. The project shall be carried out and all contracts made |
5 | therefor on behalf of the city by the mayor, subject to approval of the city council. The proceeds of |
6 | bonds or notes issued under this act, any applicable federal or state assistance and other monies |
7 | referred to in section 10 and 14, shall be deemed appropriated for the purposes of this act without |
8 | further action than that required by this act. The bond issue authorized by this act may be |
9 | consolidated for the purposes of issuance and sale with any other bond issue of the city heretofore |
10 | or hereafter authorized; provided that, notwithstanding any such consolidation, the proceeds from |
11 | the sale of the bonds authorized by this act shall be expended for the purposes set forth above. |
12 | SECTION 8. The city council may by resolution authorize the issue from time to time of |
13 | interest bearing or discounted notes in anticipation of the issue of bonds or in anticipation of the |
14 | receipt of federal or state aid for the purposes of this act. The amount of original notes issued in |
15 | anticipation of bonds may not exceed the amount of bonds which may be issued under this act, and |
16 | the amount of original notes issued in anticipation of federal or state aid may not exceed the amount |
17 | of available federal or state aid as estimated by the director of finance. Temporary notes issued |
18 | hereunder shall be signed by the manual or facsimile signatures of the director of finance and the |
19 | mayor, shall be payable within five (5) years from their respective dates, but the principal of and |
20 | interest on notes issued for a shorter period may be renewed or paid from time to time by the issue |
21 | of other notes thereunder provided the period from the date of an original note to the maturity or |
22 | any note issued to renew or pay the same debt or the interest thereon shall not exceed five (5) years. |
23 | Any temporary notes in anticipation of bonds issued under this section may be refunded prior to |
24 | the maturity of the notes by the issuance of additional temporary notes, provided that no such |
25 | refunding shall result in any amount of such temporary notes outstanding at any one time in excess |
26 | of two hundred percent (200%) of the amount of bonds which may be issued under this act; and |
27 | provided, further that, if the issuance of any such refunding notes results in any amount of such |
28 | temporary notes outstanding at any one time in excess of the amount of bonds which may be issued |
29 | under this act, the proceeds of such refunding notes shall be deposited in a separate fund established |
30 | with the bank which is paying agent for the notes being refunded. Pending their use to pay the notes |
31 | being refunded, monies in the fund shall be invested for the benefit of the city by the paying agent |
32 | at the direction of the director of finance in any investment permitted under section 10. The monies |
33 | in the fund and any investments held as a part of the fund shall be held in trust and shall be applied |
34 | by the paying agent solely to the payment or prepayment of the principal of and interest on the |
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1 | notes being refunded. Upon payment of all principal of and interest on the notes, any excess monies |
2 | in the fund shall be distributed to the city. The city may pay the principal of and interest on notes, |
3 | in full, from other than the issuance of refunding notes prior to the issuance of bonds pursuant to |
4 | section 5 hereof. In such case, the city’s authority to issue bonds or notes in anticipation of bonds |
5 | under this act shall continue provided that: |
6 | (1) The city council passes a resolution evidencing the city’s intent to pay off the notes |
7 | without extinguishing the authority to issue bonds or notes; and |
8 | (2) That the period from the date of an original note to the maturity date of any other note |
9 | shall not exceed five (5) years. |
10 | SECTION 9. Pending any authorization or issue of bonds hereunder or pending or in lieu |
11 | of any authorization or issue of notes hereunder, the director of finance, with the approval of the |
12 | city council, may, to the extent that bonds or notes may be issued hereunder, apply funds in the |
13 | treasury of the city to the purposes specified in section 7, such advances to be repaid without interest |
14 | from the proceeds of bonds or notes subsequently issued or from the proceeds of applicable federal |
15 | or state assistance or from other available funds. |
16 | SECTION 10. Any proceeds of bonds or notes issued hereunder or of any applicable |
17 | federal or state assistance, pending their expenditure, may be deposited or invested by the director |
18 | of finance in demand deposits, time deposits or savings deposits in banks which are members of |
19 | the Federal Deposit Insurance Corporation or in obligations issued or guaranteed by the United |
20 | States of America or by any agency or instrumentality thereof or as may be provided in any other |
21 | applicable law of the State of Rhode Island or resolution of the city council or pursuant to an |
22 | investment policy of the city. |
23 | SECTION 11. Any accrued interest received upon the sale of bonds or notes hereunder |
24 | shall be applied to the payment of the first interest due thereon. Any premiums arising from the |
25 | sale of bonds or notes hereunder and any earnings or net profit realized from the deposit or |
26 | investment of funds hereunder shall, in the discretion of the director of finance, be applied to the |
27 | cost of preparing, issuing, and marketing bonds or notes hereunder to the extent not otherwise |
28 | provided, to the payment of the cost of the project, to the costs of additional improvements coming |
29 | within the description of the project, to the payment of the principal of or interest on bonds or notes |
30 | issued hereunder or to any one or more of the foregoing. The cost of preparing, issuing and |
31 | marketing bonds or notes hereunder may also, in the discretion of the director of finance, be met |
32 | from bond or note proceeds exclusive of accrued interest or from other monies available therefor. |
33 | Any balance of bond or note proceeds remaining after payment of the cost of the projects and the |
34 | cost of preparing, issuing and marketing bonds or notes hereunder shall be applied to the payment |
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1 | of the principal of or interest on bonds or notes issued hereunder. To the extent permitted by |
2 | applicable federal laws, any earnings or net profit realized from the deposit or investment of funds |
3 | hereunder may, upon receipt, be added to and dealt with as part of the revenues of the city from |
4 | property taxes. In exercising any discretion under this section, the director of finance shall be |
5 | governed by any instructions adopted by resolution of the city council. |
6 | SECTION 12. All bonds and notes issued under this act and the debts evidenced thereby |
7 | shall be obligatory on the city in the same manner and to the same extent as other debts lawfully |
8 | contracted by it and shall be excepted from the operation of § 45-12-2. No such obligation shall at |
9 | any time be included in the debt of the city for the purpose of ascertaining its borrowing capacity. |
10 | The city shall annually appropriate a sum sufficient to pay the principal and interest coming due |
11 | within the year on bonds and notes issued hereunder to the extent that monies therefor are not |
12 | otherwise provided. If such sum is not appropriated, it shall nevertheless be added to the annual tax |
13 | levy. In order to provide such sum in each year and notwithstanding any provision of law to the |
14 | contrary, all taxable property in the city shall be subject to ad valorem taxation by the city without |
15 | limitation as to rate or amount. |
16 | SECTION 13. Any bonds or notes issued under the provisions of this act, if properly |
17 | executed by officers of the city in office on the date of execution, shall be valid and binding |
18 | according to their terms notwithstanding that before the delivery thereof and payment therefor any |
19 | or all of such officers shall for any reason have ceased to hold office. |
20 | SECTION 14. The city, acting by resolution of its city council is authorized to apply for, |
21 | contract for and expend any federal or state advances or other grants or assistance which may be |
22 | available for the purposes of this act, and any such expenditures may be in addition to other monies |
23 | provided in this act. To the extent of any inconsistency between any law of this state and any |
24 | applicable federal law or regulation, the latter shall prevail. Federal and state advances, with interest |
25 | where applicable, whether contracted for prior to or after the effective date of this act, may be |
26 | repaid as project costs under section 7. |
27 | SECTION 15. Bonds and notes may be issued under this act without obtaining the approval |
28 | of any governmental agency or the taking of any proceedings or the happening of any conditions |
29 | except as specifically required by this act for such issue. In carrying out any project financed in |
30 | whole or in part under this act, including where applicable the condemnation of any land or interest |
31 | in land, and in the levy and collection of assessments or other charges permitted by law on account |
32 | of any such project, all action shall be taken which is necessary to meet constitutional requirements |
33 | whether or not such action is otherwise required by statute; but the validity of bonds and notes |
34 | issued hereunder shall in no way depend upon the validity or occurrence of such action. |
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1 | SECTION 16. All or any portion of the authority to issue bonds and notes under this act |
2 | may be extinguished by resolution of the city council, without further action by the general |
3 | assembly seven (7) years after the effective date of this act. |
4 | SECTION 17. The director of finance and the mayor, on behalf of the city, are hereby |
5 | authorized to execute such documents or other papers as either of them deem necessary or desirable |
6 | to carry out the intent of this act and are also authorized to take all actions and execute all documents |
7 | or agreements necessary to comply with federal tax and securities laws, which documents or |
8 | agreements may have a term coextensive with the maturity of the bonds authorized hereby, |
9 | including Rule 15c2-12 of the Securities and Exchange Commission (the "Rule") and to execute |
10 | and deliver a continuing disclosure agreement or certificate in connection with the bonds or notes |
11 | in the form as shall be deemed advisable by such officers in order to comply with the Rule. |
12 | SECTION 18. The question of the approval of sections 4 through 17 of this act shall be |
13 | submitted to the electors of the city at the election to be held on November 2, 2021, or at a special |
14 | election (other than a primary), on a date as shall be designated by the city council. The question |
15 | shall be submitted in substantially the following form: “Shall an Act, passed at the 2021 session of |
16 | the General Assembly, entitled, ‘AN ACT AUTHORIZING THE CITY OF CENTRAL FALLS |
17 | TO ISSUE NOT TO EXCEED $5,760,000 GENERAL OBLIGATION BONDS, NOTES AND |
18 | OTHER EVIDENCES OF INDEBTEDNESS TO FINANCE THE CONSTRUCTION, |
19 | RENOVATION, IMPROVEMENT, ALTERATION, REPAIR, FURNISHING AND |
20 | EQUIPPING OF SCHOOLS AND SCHOOL FACILITIES IN THE CITY’ be approved?" and the |
21 | warning for the election shall contain the question to be submitted. From the time the election is |
22 | warned and until it is held, it shall be the duty of the city clerk to keep a copy of the act available |
23 | at his/her office for public inspection, but the validity of the election shall not be affected by this |
24 | requirement. |
25 | SECTION 19. Sections 1 through 3 and sections 18 and 19 of this act shall take effect upon |
26 | the passage. Sections 4 through 17 of this act shall take effect upon the approval of this act by a |
27 | majority of those voting on the question at the election prescribed by section 18. |
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LC002998 | |
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EXPLANATION | |
OF | |
A N A C T | |
RELATING TO SCHOOL CONSTRUCTION AND FINANCING IN THE CITY OF | |
CENTRAL FALLS AND AUTHORIZING THE CITY OF CENTRAL FALLS TO ISSUE NOT | |
TO EXCEED $5,760,000 GENERAL OBLIGATION BONDS, NOTES AND OTHER | |
EVIDENCES OF INDEBTEDNESS TO FINANCE THE CONSTRUCTION, RENOVATION, | |
IMPROVEMENT, ALTERATION, REPAIR, FURNISHING AND EQUIPPING OF SCHOOLS | |
AND SCHOOL FACILITIES IN THE CITY | |
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1 | This act would serve as the joint resolution required pursuant to Rhode Island General |
2 | Laws §35-18-1, et seq (the “Rhode Island Public Corporation Debt Management Act”) for the City |
3 | of Central Falls School Project hereafter defined. |
4 | This act would also authorizes the City of Central Falls to issue bonds notes or other |
5 | evidences of indebtedness in an amount not to exceed five million seven hundred sixty thousand |
6 | dollars ($5,760,000) to finance the construction, renovation, improvement, alteration, repair, |
7 | furnishing and equipping of schools and school facilities in the city. (the “City of Central Falls |
8 | School Project”). |
9 | This act would constitute an enabling act of the general assembly that is required pursuant |
10 | to § 16-7-44. Any bonds, notes or other evidences of indebtedness issued under this act for school |
11 | projects shall not be eligible for state housing aid reimbursement pursuant to § 16-7-44 unless the |
12 | school projects described herein have been approved by the Rhode Island department of education. |
13 | Sections 1 through 3 and sections 18 and 19 of the act shall take effect upon passage. |
14 | Sections 4 through 17 of the act shall take effect upon the approval of the act by a majority of those |
15 | voting on the question at the election prescribed by section 18 of the act. |
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