Chapter 015

2003 -- S 0919

Enacted 03/05/03

A N A C T

AUTHORIZING THE TOWN OF WESTERLY TO ISSUE BONDS AND NOTES IN AN

AMOUNT NOT EXCEEDING $40,000,000 TO FINANCE THE CONSTRUCTION,

RENOVATION, REHABILITATION, REPAIR, IMPROVEMENTS, FURNISHING AND

EQUIPPING OF AND/OR ADDITIONS TO SCHOOLS AND SCHOOL FACILITIES IN THE

TOWN

Introduced By: Senator Dennis L. Algiere

Date Introduced: March 04, 2003

It is enacted by the General Assembly as follows:

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

previously granted, to issue bonds in an amount not exceeding forty million dollars ($40,000,000)

from time to time under its corporate name and seal. The bonds of each issue may be issued in the

form of zero coupon bonds, capital appreciation bonds, 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 five (5) years and the last installment not later

than thirty (30) years after the date of the bonds. The amount of principle 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. For each issue the amounts payable annually for

principal and interest combined either shall be as nearly equal from year to year as is practicable

in the opinion of the officers authorized to issue the bonds, or shall be arranged in accordance

with a schedule providing for a more rapid amortization of principal.

     SECTION 2. The bonds shall be signed by the town director of finance and the town

manager and shall be issued and sold in such amounts as the town council may authorize. 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 proceedings 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. Interest coupons (if any) shall bear the manual or facsimile signature of the director of

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

finance, and such proceeds, exclusive of premiums and accrued interest, shall be expended: (a)

for the construction, renovation, rehabilitation, repair, improvements, furnishing and equipping of

and/or additions to schools and school facilities in the town; (b) for payment of the principal or

interest on temporary notes issued under section three; (c) in payment of capitalized interest on

bonds or notes; (d) in repayment of advances under section four; or (e) in payment of related

costs of issuance of any bonds or notes. 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 sales

thereof. The project shall be carried out and all contracts made therefor on behalf of the town by

the town council. The proceeds of bonds or notes issued under this act, any applicable federal or

state assistance and other moneys referred to in sections six and nine, shall be deemed

appropriated for the purposes of this act without further action than that required by this act. The

bond issue authorized by this act may be consolidated for the purposes of issuance and sale with

any other bond issue 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. The director of finance and the town

manager, 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 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.

     SECTION 3. The town council may by resolution authorize the issue from time to time of

interest bearing or discounted notes in anticipation of the issue 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 director of finance. Temporary notes

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

and by the town manager 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 issue of other notes thereunder, provided the period from the date of an

original note to the maturity or any note issued to renew or pay the same debt or the 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 a separate fund established with the bank which is paying agent for the

notes being refunded. Pending their use to pay the notes being refunded, moneys in the fund shall

be invested for the benefit of the town by the paying agent at the direction of the director of

finance in any investment permitted under section five. The moneys in the fund and any

investments held as a 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 moneys 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 4. Pending any authorization or issue of bonds hereunder or pending or in lieu

of any authorization or issue of notes hereunder, the director of finance, 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 two, 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 5. 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 director

of finance, 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 6. 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 premiums arising from the

sale of bonds or notes hereunder and any earnings or net profit realized from the deposit or

investment of funds hereunder shall, in the discretion of the director of finance, 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 cost of the project, to the payment of the principal of or interest

on bonds or notes issued hereunder or to any one (1) or more of the foregoing. The cost of

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

director of finance, be met from bond or note proceeds exclusive of accrued interest or from other

moneys 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

director of finance shall be governed by any instructions adopted by resolution of the town

council.

     SECTION 7. 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 section 45-12-2 of the general laws.

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 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 town shall be

subject to ad valorem taxation by the town without limitation as to rate or amount.

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

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.

     SECTION 10. 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 11. All or any portion of the authority to issue bonds and notes under this act

may be extinguished by resolution of the town council, without further action by the general

assembly.

     SECTION 12. The director of finance and the town manager, on behalf of the town, are

hereby authorized to execute such 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 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

or notes in the form as shall be deemed advisable by such officers in order to comply with the

Rule.

     SECTION 13. The question of the approval of this act shall be submitted to the electors

of the town at a general or special election (other than a primary) to be held prior to May 31,

2003, as shall be designated by the town council. The question shall be submitted in substantially

the following form: “Shall an act, passed at the 2003 session of the General Assembly, entitled

‘AN ACT AUTHORIZING THE TOWN OF WESTERLY TO ISSUE GENERAL

OBLIGATION BONDS AND NOTES IN AN AMOUNT NOT TO EXCEED FORTY

MILLION DOLLARS ($40,000,000) FOR THE PURPOSE OF FINANCING THE

CONSTRUCTION, RENOVATION, REHABILITATION, REPAIR, IMPROVEMENTS,

FURNISHING AND EQUIPPING OF AND/OR ADDITIONS TO SCHOOLS AND SCHOOL

FACILITIES IN THE TOWN’ be approved?” and the warning for the election shall contain the

question to be submitted. Notwithstanding anything contained in R.I.G.L. section 17-19-7 to the

contrary, the Westerly Board of Canvassers may certify the question to the secretary of state the

question not later than April 1, 2003. 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 the act available at his office for public

inspection, but the validity of the election shall not be affected by this requirement.

     SECTION 14. This section and the foregoing section shall take effect upon the passage of

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

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

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LC02663

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