Chapter 034

2003 -- S 1081

Enacted 05/13/03

A N A C T

AUTHORIZING THE TOWN OF CUMBERLAND TO FINANCE ROAD IMPROVEMENTS BY THE ISSUANCE OF NOT MORE THAN $2,000,000 BONDS AND/OR NOTES THEREFOR

Introduced By: Senators Connors, and Badeau

Date Introduced: May 13, 2003

It is enacted by the General Assembly as follows:

     SECTION 1. The Town of Cumberland is hereby empowered, in addition to authority

previously granted, to issue bonds to an amount not exceeding two million dollars ($2,000,000)

from time to time under its corporate name and seal. 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 three (3)

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

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

council may authorize by resolution. 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 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. 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 as follows: a) for the purpose of financing road improvements

(the "Project") b) in payment of the principal of or interest on temporary notes issued under

section three, c) in repayment of advances under section four, d) in payment of the costs of

issuance associated with the issuance of bonds or notes hereunder and/or (e) in payment of

capitalized interest during construction of the Project. 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 sale thereof. The Project shall be carried out and all contracts made therefor by the mayor on

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

state assistance and the other moneys referred to in section six and nine shall be deemed

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

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 form the sale of the bonds authorized by

this act shall be expended for the purposes set forth above.

     SECTION 3. The town council may by resolution authorize the issuance 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 the mayor 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 hereunder, provided the period from the date of an

original note to the maturity of any note issued to renew or pay the same debt or the interest

thereon shall not exceed five (5) years. 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 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. 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.

     SECTION 4. Pending any authorization or issue of bond 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 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 project costs, 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 premium and accrued interest or from

other moneys available therefor. Any balance of bond or note proceeds remaining after payment

of the cost of the project 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 of assistance which may

be available for the purpose for 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 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. The director of finance and the mayor, on behalf of the town are hereby

authorized to execute such instruments, documents or other papers as either of the foregoing

deem necessary or desirable to carry out the intent of this act and are also authorized to take all

actions and execute all documents necessary to comply with federal tax and securities laws

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 laws

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

of the town at a general or special election which is not a primary to be held on June 10, 2003 or

such other date 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 Cumberland to Finance Road Improvements

by the Issuance of Not More Than $2,000,000 Bonds and/or Notes therefor’ be approved?”

Notwithstanding anything contained in R.I.G.L. section 17-19-7 to the contrary, the Cumberland

Board of Canvassers may certify the question to the secretary of state not later than May 15,

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 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 town charter, this act shall prevail.

     SECTION 13. 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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LC03242

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