Chapter 408

2004 -- S 3118

Enacted 07/05/04

A N A C T

AUTHORIZING THE TOWN OF PORTSMOUTH TO ISSUE GENERAL OBLIGATION

BONDS AND/OR NOTES IN AN AMOUNT NOT TO EXCEED $3,500,000 TO CONSTRUCT A GYMNASIUM, FOR PORTSMOUTH HIGH SCHOOL

Introduced By: Senator Mary A. Parella

Date Introduced: May 13, 2004

It is enacted by the General Assembly as follows:

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

previously granted, to issue general obligation bonds and notes to an amount not exceeding three

million five hundred thousand dollars ($3,500,000), 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 five (5) years and the last installment no 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. 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 Finance Director and the President of the

Town Council 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. The proceeds derived from the sale of the bonds shall be delivered to the

Finance Director, and such proceeds, exclusive of premiums and accrued interest, shall be

expended as follows: (a) to finance the construction of a gymnasium for Portsmouth High School,

(b) in payment of the principal of and/or interest on temporary notes issued under section three,

associated with the issuance of bonds or notes hereunder, and/or (e) to finance capitalized interest

on 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 therefore 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 the

other moneys referred to in section six and nine, shall be deemed appropriated for the purpose of

this act without further action than that required by this act. The bonds authorized by this act may

be consolidated for the purpose of issuance and sale with any other bonds 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 Finance Director and the President of the Town Council, 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, including Rule 15c2-12 of the Securities and Exchange Commission

and to execute and deliver a continuing disclosure agreement or certificate in connection with the

bonds or notes.

SECTION 3. The Town Council may by resolution authorized 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 Finance Director. Temporary notes

issued hereunder shall be signed by the Finance Director and the President of the Town Council

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. 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 Finance Director 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 Finance Director, 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 Finance

Director 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 Finance Director, 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 or more of the foregoing. The cost of preparing,

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

Director, 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 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

Finance Director 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 sums 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 of

occurrence of such action.

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

and notes under this act may be extinguished by ordinance of the Town Council, without further

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

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

of the Town at a special election to be held on November 2, 2004 or such other general or special

election as shall be set by the Town Council. The question shall be submitted in substantially the

following form: “Shall an act, passed at the 2004 session of the general assembly, entitled ‘AN

ACT AUTHORIZING THE TOWN OF PORTSMOUTH TO ISSUE GENERAL OBLIGATION

BONDS AND/OR NOTES IN AN AMOUNT NOT TO EXCEED $3,500,000 TO CONSTRUCT

A GYMNASIUM FOR PORTSMOUTH HIGH SCHOOL’ be approved?” 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 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. Sections 12 and 13 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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LC03414

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