Chapter
515
2004 -- H 8602 SUBSTITUTE A
Enacted 07/07/04
A N A C T
AUTHORIZING THE CITY OF
CRANSTON TO ISSUE NOT MORE THAN $7,000,000
BONDS AND NOTES TO FINANCE
REPAIRS, RENOVATIONS AND FIRE CODE
UPGRADES TO SCHOOL BUILDINGS
IN THE CITY OF CRANSTON
Introduced By:
Representatives Jacquard, McNamara, Cerra, Montanaro, and Palumbo
Date
Introduced: June 03, 2004
It is enacted by the General
Assembly as follows:
SECTION
1. The City of Cranston is hereby empowered, in addition to authority
previously granted, to issue bonds
to an amount not exceeding seven million dollars ($7,000,000)
from time to time under its
corporate name and seal or a facsimile of such seal. The bonds of each
issue shall mature 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. 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, statutory, or charter 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
director of finance and the mayor
and shall be issued and sold in such amounts as the city 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 city council authorizing
the issue by separate order or 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 or
notes. Interest coupons (if any) shall bear the facsimile signature
of the director of finance. 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
expended (a) to finance repairs,
renovations and fire code upgrades to school buildings in the City
of Cranston, but for no other uses
or purposes (such as temporary borrowings for the benefit of
any other city department), or (b)
in payment of the principal or of interest on temporary notes
issued under Section Three, or (c)
in repayment of advances under Section Four. 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 proceeds of bonds or notes issued under this act, any
applicable federal or state
assistance and the 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. In addition to such
funds, there may be expended for the purposes of this act such
other sums as may be appropriated
therefor. The bond issue authorized by this act may be
consolidated for the purposes of
issuance and sale with any other bond issue of he 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. The city council may, by order or resolution authorizing the bonds or by
separate order or resolution,
authorize the issuance from time to time of interest bearing or
discounted notes in anticipation
of the issue of the bonds under Section Two or in anticipation of
the receipt of federal or state
aid for the purposes of this act. The amount of the original notes
issued in anticipation of the 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 signature of the
director of finance and
countersigned by the manual or facsimile signature of the mayor and shall
be payable within five (5) years
from their respective dates, but the principal of an 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
the 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 (1) time in
excess of two hundred percent
(200%) of the amount of the bonds which may 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 (1) 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
that 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 city by
the paying agent at the direction
of the city treasurer 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
an 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 city.
SECTION
4. Pending any authorization or issue of bonds hereunder or pending or in lieu
of any authorization or issue of
notes hereunder, the city treasurer, with the approval of the city
council given by an order or
resolution passed and approved in the manner provided in Chapter
12 of the city charter, but not
subject to the provisions of Section 12.03 of said Chapter, may, to
the extent that bonds or notes 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 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, and subject to the approval of the
investment committee mentioned in
Section 7.05 of the city charter, may be deposited or invested
by the city treasurer 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 laws of
the state of Rhode Island and by ordinance or resolution of the city
council.
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 net earnings or profits
realized from the investment of
funds hereunder and any premiums arising from the sale of bonds
or notes hereunder shall, in the
discretion of the city treasurer, be applied to cost of preparing,
issuing and marketing bonds or
notes hereunder to the extent not otherwise provided, to the
payment of the cost of the
projects or the cost of additional improvements coming within the
description of the projects in
Section Two of this act, 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 city
treasurer, 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 projects and
the cost of additional improvements coming within the description
of the projects in Section Two of
this act, and the cost of preparing, issuing and marketing bonds
or notes hereunder shall be
applied to the payment of the principal or interest on bonds or notes
issued hereunder. To the extent
permitted by applicable federal law, 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 city from property taxes. In exercising any discretion
under this section, the city
treasurer shall be governed by any instructions adopted by any order or
resolution of the city council.
SECTION
7. All bonds and notes issued under this act and the debts evidenced thereby
shall be obligatory to 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.
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 years on bonds and notes issued hereunder to the
extent that moneys thereof 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
8. Any bonds or notes issued under the provisions of this act, and coupons, if
any, if properly executed by the
officers of the city in office on the date of execution, shall be
valid and binding according to
their terms notwithstanding that before delivery thereof and
payment therefor any or all of the
officers shall for any reason have ceased to hold office.
SECTION
9. The city, acting by order or resolution of its city council, passed and
approved in the manner provide in
chapter 12 of the city charter, but not subject the provision of
Section 12.03 of said chapter, is
authorized to apply for, contract for and expend any federal or
state advances or other grants of
assistance which may 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
of this act.
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 projects 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 projects,
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
or notes issued hereunder shall in
no way depend upon the validity or occurrence of such action.
SECTION
11. The general assembly finds and declares that maintenance of strong
financial credit in Rhode Island
cities and towns is essential to the citizens of this state. The
director of finance of the city of
Cranston shall file an application with the auditor general to
issue bonds or notes issued
hereunder pursuant to the provisions of this act. Upon receipt of the
application the auditor general
shall cause a review of the application to be made, taking into
consideration the purpose of the
financing, the ability of the city to provide other essential public
improvements and services and to
pay when due the principal and interest on its debts, the
reasonableness of the amounts to
be expended for each of the purposes or improvements to be
financed, the amount of state aid
payments likely to be made to the city based on the amount of
state aid paid to that city over
the prior two (2) fiscal years, the payments to be made on the
proposed bond, and such other
factors as the auditor general may deem necessary or advisable.
As a condition to approving any
such application, the auditor general shall review the
recommendations of the Cranston
Financial Review Commission. If the review shows to the
satisfaction of the auditor
general that the city should be entitled to issue bonds or notes issued
hereunder, the auditor general may
authorize the city to issue such bond. Within sixty (60) days
after the submission to it of an
application, the auditor general shall authorize the issuance of
bonds or notes issued hereunder,
if the state auditor general is satisfied that the issuance of bonds
or notes issued hereunder is
appropriate and the city is taking appropriate fiscal actions to
improve the financial conditions
of the city. If the auditor general is satisfied, the auditor general
shall so indicate by issuing an
approval of the request within said sixty (60) day period. Failure to
issue an approval of the request
within this sixty (60) day period shall be a denial of the
application.
Notwithstanding
the foregoing, from and after the City obtaining an investment grade
rating from a recognized rating
agency, this section shall have no force or effect and thereafter no
application to, or review or
approval by the Auditor General shall be required.
SECTION
12. The question of the approval of this act shall be submitted to the electors
of the city at the general
election to be held on November 2, 2004. 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 City of Cranston to issue not more than
$7,000,000 bonds and notes to
finance repairs, renovations and fire code upgrades to school
buildings in the City of Cranston’
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 the city clerk’s 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
13. This section and the foregoing section shall take effect upon passage of
the
act. The remainder of this act
shall take effect upon the approval of the act by a majority of those
voting on the question at the
election prescribed by the foregoing section.
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LC03528/SUB A
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