Chapter 241

2016 -- S 2990 Enacted 07/01/2016

A N   A C T

AUTHORIZING THE TOWN OF WESTERLY TO ISSUE BONDS AND NOTES IN AN AMOUNT NOT EXCEEDING $38,500,000 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: May 10, 2016

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 thirty-eight million five hundred

thousand dollars ($38,500,000) 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

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 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 or premium shall be disregarded.

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

manager 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 director of finance, and such proceeds exclusive of premiums and

accrued interest shall be expended: (1) For the construction, renovation, rehabilitation, repair,

improvements, furnishing and equipping of and/or additions to schools and school facilities in the

town; (2) For payment of the principal or interest on temporary notes issued under section 3; (3)

In payment of capitalized interest on bonds or notes; (4) In repayment of advances under section

4; or (4) 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 monies referred to in sections 6 and 9, 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, the town

manager 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 director of finance. Temporary notes

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

the town manager and the president of the town council 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, monies 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 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 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 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 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 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 monies

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 §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 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 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

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. 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 the next general or special election (other than a primary), or at an election 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 WESTERLY TO ISSUE BONDS AND NOTES IN

AN AMOUNT NOT EXCEEDING $38,500,000 TO FINANCE 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. 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 the clerk's 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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