Chapter 223

2016 -- S 2680 Enacted 07/01/2016

A N   A C T

AUTHORIZING THE TOWN OF PORTSMOUTH TO ISSUE GENERAL OBLIGATION BONDS AND/OR NOTES IN AN AMOUNT NOT TO EXCEED $10,000,000 FOR THE DESIGN, CONSTRUCTION, EQUIPPING AND FURNISHING OF A NEW POLICE STATION IN THE TOWN

Introduced By: Senator John A. Pagliarini

Date Introduced: March 08, 2016

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 ten

million dollars ($10,000,000) 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 installments of principal, the first installment to be not

later than five (5) years and the final installment to be not later than thirty (30) years after the date

the bonds are issued. 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,

and may bear interest at a fixed rate or rates or at a variable or auction rate or rates. The bonds

may be sold by a negotiated sale or by competitive bid and may be issued pursuant to a resolution

or an indenture of trust. 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:

(1) For the purpose of financing the design, construction, equipping and furnishing of a

new police station in the town;

(2) In payment of the principal of and/or interest on temporary notes issued under section

3;

(3) In repayment of advances made pursuant to section 4; and/or

(4) In payment of costs of issuance associated with the issuance of bonds or notes

hereunder.

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 monies referred to in

sections 6 and 9, shall be deemed appropriated for the purpose of this act without further action

than that required by this act. This bond issue authorized by this act may be consolidated for the

purpose 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 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 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 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

notes 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, monies 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

5. The monies 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 monies 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;

and

(2) That the period from the date of an original note to the maturity date of any other

notes 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 2, 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 monies

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 §45-12-2. 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 monies

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 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 expenditure may be in addition to other

monies 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 2.

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

of the town at the next general election or at a general or special election (other than a primary

election) to be held on a 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 2016 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 $10,000,000 FOR THE DESIGN, CONSTRUCTION, EQUIPPING AND

FURNISHING OF A NEW POLICE STATION IN THE TOWN' 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 12. Sections 11 and 12 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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LC005237

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