SECTION 1. The city of Woonsocket is hereby empowered to issue at one time or from time to time, bonds to an amount not exceeding ninety million dollars ($90,000,000) in order to finance all or part of its respective unfunded pension liability and the costs of issuing the bonds. 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, the first installment to be not later than eighteen (18) months and the last installment not later than forty (40) years after the date of their issuance. 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. 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 manual or facsimile signatures of the city treasurer and mayor and shall be issued and sold in such amounts as the city council may authorize by resolution. As a condition precedent to the issuance of bonds, the city shall retain the services of a financial advisor to assist in the structuring and sale of the bonds, and such financial advisor shall not underwrite the bonds or participate in any underwriting syndicate or selling group which purchases or sells the bonds. The manner of sale, denominations, maturities, interest rates and other terms, conditions and details of any bonds issued under this act may be fixed by proceedings of the city council authorizing the issue or by separate resolution of the city 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. Interest coupons (if any) shall bear the manual or facsimile signature of the city treasurer. Bonds issued hereunder may bear interest at such rate or rates, including rates variable from time to time as determined by such index, banker's loan rate or other method of determination as the city treasurer and mayor shall select, and may be sold for such price, at a premium or at a discount, as the city treasurer and mayor may determine. In addition to any other security provided by law, bonds issued hereunder may, in the discretion of the city treasurer and mayor, and without any further action of the city council, be secured or supported, in whole or in part, by insurance or by lines or letters of credit or other credit or liquidity facilitates provided by any bank, trust company, insurance company or other financial institution. In addition, in connection with or subsequent to the issuance of bonds hereunder, the city treasurer and mayor may enter into such contracts as they may determine to be necessary or appropriate to place such bonds, in whole or in part, on such interest rate or cash flow basis as they may desire, including without limitation interest rate swap agreements, insurance agreements, forward payment conversion agreements, futures contracts, contracts providing for payments based on levels of, or changes in, interest rates or stock or other indices, contracts to exchange cash flows or a series of payments and contracts to hedge payment, rate, spread or similar exposure, including without limitation interest rate floors or caps, options, puts and calls. Such contracts shall contain such payment, security, default, remedy and other terms and conditions as the city treasurer and mayor may select, after giving due consideration, where applicable, for the creditworthiness of the counterparty or counterparties, including any rating by a nationally recognized rating agency or any other criteria as may be appropriate. The proceeds derived from the sale of the bonds shall be delivered to the city treasurer, and such proceeds, exclusive of premiums and accrued interest, shall be (a) deposited in the city's pension plan to finance the unfunded pension liability of the city and (b) expended for payment of costs in connection with the issuance of the bonds including capitalized interest, if any. No purchaser of any bonds 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 issued under this act 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 purposes of issuance and sale with any other bond issue of the city 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 3. Capitalized Interest. - Proceeds of the pension obligation bonds may be used to capitalize interest expense on the pension obligation bonds subject to the following limitations: (a) a municipality is authorized to capitalize interest in an aggregate amount not to exceed twelve (12) months of interest expense on the pension obligation bonds; and (b) capitalized interest shall be applied to payment of debt service in such a manner that not more than fifty percent (50%) of any interest payment shall be funded with capitalized interest.

SECTION 4. Any proceeds of bonds issued hereunder shall be invested by the board of investment established by the city pursuant to the city charter in investments which are legal for investment by the state investment commission pursuant to Chapter 10 of Title 35 of the Rhode Island General Laws (the "State Investment Commission"). The board of investment shall develop an investment policy for investments in the pension plan with the assistance of a nationally recognized pension investment advisor. So long as any bonds issued pursuant to this act are outstanding, the city shall continue to retain a nationally recognized pension investment advisor who shall be approved by the State Investment Commission to advise the board regarding investment of the bond proceeds. The city and the State Investment Commission are each hereby authorized to enter into agreements with respect to the investment of any proceeds of bonds issued hereunder, with the resulting transactional cost savings passed on to the city, provided, however that if any bond proceeds are commingled with other funds for purposes of investment, that appropriate records shall be maintained of the investments or portions thereof held for the account of the city's pension plan for police and firefighters.

SECTION 5. Any accrued interest received upon the sale of bonds hereunder shall be applied to the payment of the first interest due thereon. Any premium arising from the sale of bonds hereunder shall, in the discretion of the city treasurer, be applied to the cost of preparing, issuing and marketing bonds hereunder to the extent not otherwise provided, to the payment of project costs, to the payment of the principal of or interest on bonds issued hereunder or to any one (1) or more of the foregoing. The cost of preparing, issuing and marketing bonds hereunder may also, in the discretion of the city treasurer, be met from bond proceeds exclusive of premium and accrued interest or from other moneys available therefor. Proceeds shall not be used to reimburse the municipality for previous contributions to the system or any prior costs associated with the system. In exercising any discretion under this section, the city treasurer shall be governed by any instructions adopted by resolution of the city council.

SECTION 6. All bonds issued under this act and the debts evidenced thereby shall be obligatory on the city in the same manner and to the same extent as other debts lawfully contracted by it and shall be excepted from the operation of section 45-12-2 of the general laws and the provisions of the city charter. No such obligation shall at any time be included in the debt of the city for the purpose of ascertaining its borrowing capacity. The city shall annually appropriate a sum sufficient to pay the principal and interest coming due within the year on bonds issued hereunder to the extent that moneys 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 city shall be subject to ad valorem taxation by the city without limitation as to rate or amount.

SECTION 7. Any bonds issued under the provisions of this act, and coupons, if any, if properly executed by officers of the city 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 8. The aggregate principal amount of the bonds issued by the city under this act shall not be greater than the amount sufficient to extinguish the unfunded pension liability and to pay the costs of issuance of the bonds. For purposes of this act, "unfunded pension liability" means the excess, if any, of the actuarial liability of the city's city-run pension plan for police and firefighters over the actuarial value of the assets in that pension plan. The actuarial liability of the pension plan and the actuarial value of the assets in the plan shall be determined using the same actuarial assumptions as are used by the Retirement Board, created by title 36, chapter 8 of the General Laws of Rhode Island (the "State Retirement Board") for purposes of determining municipal contributions under the optional retirement for members of police force and firefighters established under chapter 21.2 of title 45 of the general laws. Prior to the issue of any bonds hereunder, the city council shall hold a public hearing on the proposed pension funding plan. The plan shall include a report showing the (a) actuarial valuation of the assets in the pension plan, (b) an actuarial analysis of the methods by which the city proposes to fund the unfunded pension liability, (c) the amount of the bonds to be issued, including the plan of finance for the bonds (d) an explanation of the city's investment strategic plan for the pension plan including, but not limited to, the investment policy adopted by the board of investment and an asset allocation plan, (e) the projected investment return for the pension plan, and (f) the projected present value savings to the city reasonably expected to be achieved as a result of the issuance of such bonds. The city of Woonsocket shall not issue pension obligation bonds prior to nor more than six (6) months, subsequent to the approval of the voters of the city of Woonsocket unless another public hearing is held. The city of Woonsocket shall renotify the voters of its intention to issue pension obligation bonds and provide the voters through public hearing with updated information and documentation in the manner and as described above, if more than six (6) months will elapse between the date of the voter approval and the proposed date of issuance of the pension obligation bonds. After the public hearing and prior to the issuance of the bonds, the pension funding plan shall be filed with the public finance management board established pursuant to chapter 10.1 of title 42 of the Rhode Island General Laws (the "Public Finance Management Board"). The city council shall institute proceedings to determine that the issuance of the pension obligation bonds will result in a financial benefit to the city. The city shall submit to the Public Finance Management Board and to the State Auditor General, on or before December 1 in each year, an annual report showing the financial transactions of the pension plan for the fiscal year preceding that date. The annual report shall contain, among other things, a financial balance sheet as of the end of that year, a statement of income and expenditures, a valuation balance sheet as prepared by the city's independent consulting firm, a detailed statement of investments acquired and disposed of during the year, and any other statistical data that are deemed necessary for a proper interpretation of the condition of the pension plan and the results of its operations. The State Auditor General, on the request of the city or of the Public Finance Management Board, shall conduct a separate annual performance audit of the pension plan which shall include a report on the actuarial valuation of the assets and liabilities of the pension plan. The auditor general may examine all records, files and other documents relating to the pension plan, and evaluate all policies and procedures for purposes of conducting the audit. The aforementioned performance audit shall be in addition to the annual audit conducted by independent certified public accountants of the financial statements of the city. So long as any bonds issued by the city under this act are outstanding, if an annual report discloses that the assets of the plan are not sufficient to fund the city's obligations to the pension plan, the city shall make annual appropriations over a period not to exceed five (5) years from the date of the annual report in order to amortize that liability. So long as any bonds issued by the city under this act are outstanding, the city shall not withdraw funds from the city-run pension plan for police and firefighters for any purpose other than the payment of pension and death benefits, return of employee contributions in appropriate cases, and administrative expenses of operating the plan.

SECTION 9. Pending any authorization or issue of bonds hereunder, the city treasurer, with the approval of the city council given by a resolution passed and approved in the manner provided in the city charter, may, to the extent that bonds may be issued hereunder, apply funds in the treasury of the city to the purposes specified in section two, such advances to be repaid without interest from the proceeds of bonds subsequently issued or from the proceeds of applicable federal or state assistance or from other available funds.

SECTION 10. The city, acting by resolution of its city council, passed and approved in the manner provided in the city charter, is authorized to apply for, contract for and expend any federal or state advances or other grants of assistance which may be available for the purposes of this act, and any such expenditures may be in addition to the moneys 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 two of this act.

SECTION 11. Bonds may be issued under this act without obtaining 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 the financing under this act, 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 issued hereunder shall in no way depend upon the validity or occurrence of such action.

SECTION 12. All or any portion of the authority to issue bonds under this act may be extinguished by ordinance of the city council, without further action by the general assembly, seven (7) years after the effective date of this act.

SECTION 13. The city treasurer and mayor, on behalf of the city, are hereby authorized to execute such instruments, documents or other papers as they 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 (the "Rule") and to execute and deliver a continuing disclosure agreement or certificate in connection with the bonds in the form as shall be deemed advisable by such officers in order to comply with the Rule.

SECTION 14. The provisions of this act are severable, and if any of its provisions are held unconstitutional or invalid for any reason by any court of competent jurisdiction, the decision of the court shall not affect or impair any of the remaining provisions.

SECTION 15. The question of the approval of this act shall be submitted to the electors of the city at the election to be held on November 5, 2002 or at a general or special election (other than a primary election) to be held on any other date as shall be designated by the mayor. The question shall be submitted in substantially the following form: ("Shall an act passed at the 2002 session of the general assembly entitled 'An Act Authorizing the city of Woonsocket to Finance the Unfunded Pension Liability of the city of Woonsocket, by the Issuance of Not More Than $90,000,000 Bonds Therefor,' 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 city clerk to keep a copy of the act available at his or her 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 city charter, this act shall prevail.

SECTION 16. Notwithstanding the provisions of section 17-19-7 of the general laws, the Woonsocket board of canvassers may certify the question to the secretary of state not later than thirty (30) days before the conduct of said election.

SECTION 17. This section and sections 14 and 15 shall take effect upon the passage of this act. The remainder of this act shall take effect upon approval of this act by a majority of those voting on the question at the election prescribed by the foregoing section.