| LA 010 |
| 2024 -- H 7278 Enacted 04/03/2024 |
| A N A C T |
| AUTHORIZING THE CITY OF CRANSTON TO ISSUE NOT TO EXCEED $40,000,000 GENERAL OBLIGATION BONDS, NOTES AND OTHER EVIDENCES OF INDEBTEDNESS TO FINANCE THE PURCHASE AND/OR ACQUISITION OF LAND AND BUILDINGS, CONSTRUCTION, RENOVATION, IMPROVEMENT, ALTERATION, REPAIR, LANDSCAPING, FURNISHING AND/OR EQUIPPING OF SCHOOLS AND SCHOOL FACILITIES THROUGHOUT THE CITY, SUBJECT TO APPROVAL OF STATE HOUSING AID AT A REIMBURSEMENT RATE OR STATE SHARE RATIO OF NOT LESS THAN 50% AT THE TIME OF ISSUANCE |
Introduced By: Representatives Baginski, Lima, Potter, McNamara, Handy, Cardillo, Bennett, and Fenton-Fung |
| Date Introduced: January 24, 2024 |
| It is enacted by the General Assembly as follows: |
| SECTION 1. The city of Cranston is hereby authorized, in addition to authority previously |
| granted, to issue bonds and other evidences of indebtedness (hereinafter "bonds") up to an amount |
| not exceeding forty million dollars ($40,000,000) from time to time under its corporate name and |
| seal or a facsimile of such 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 sinking fund installments 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 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, charter 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 city may be eligible for school housing aid reimbursement on debt |
| service pursuant to chapter 7 of title 16, or for a grant, loan or other financial assistance from |
| proceeds of bonds issued by the State of Rhode Island (the "state"), from the Rhode Island |
| department of education ("RIDE") or from the Rhode Island school building authority. Bonds, notes |
| or other evidences of indebtedness shall not be issued under this act unless the city has received a |
| letter from RIDE confirming that the then-current school housing aid reimbursement rate under |
| chapter 7 of title 16, as amended from time to time, or financial assistance from the school building |
| authority capital fund, or pursuant to any other law hereafter enacted providing for funds to |
| municipalities for school housing purposes, is not less than fifty percent (50%) of debt service for |
| those expenditures which are eligible for state aid. A certificate of the officers authorized to sign |
| such bonds or notes authorized hereunder that such letter has been received shall conclusively |
| demonstrate the satisfaction of this condition to the issuance of indebtedness hereunder. |
| SECTION 3. The bonds shall be signed by the director of finance and by the manual or |
| facsimile signature of the mayor and be issued and sold in such amounts as the city council may |
| determine by resolution or order. 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 or by separate resolution or order 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. Notwithstanding anything contained in this act to the |
| contrary, the city may enter into financing agreements with the Rhode Island health and educational |
| building corporation pursuant to chapter 7 of title 16 and chapter 38.1 of title 45 and, with respect |
| to bonds or notes issued in connection with such financing agreements, if any, the city may elect to |
| have the provisions of chapter 38.1 of title 45 apply to the issuance of the bonds or notes issued |
| hereunder to the extent the provisions of chapter 38.1 of title 45 are inconsistent herewith. In |
| addition, the city may enter into financing agreements with the Rhode Island infrastructure bank |
| pursuant to the provisions of chapter 12.2 of title 46 and, with respect to bonds or notes issued in |
| connection with such financing agreements, if any, the city may elect to have the provisions of |
| chapter 12.2 of title 46 apply to the issuance of the bonds or notes issued hereunder to the extent |
| the provisions of chapter 12.2 of title 46 are inconsistent herewith. Such election may be fixed by |
| the proceedings of the city council authorizing such issuance or by separate resolution or order 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. 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 purchase and/or acquisition of land and buildings, |
| construction, renovation, improvement, alteration, repair, landscaping, furnishing and/or equipping |
| of schools and school facilities throughout the city of Cranston and all costs related thereto (the |
| "projects"); (2) In payment of the principal of or interest on temporary notes issued under section |
| 3; (3) In repayment of advances under section 5; (4) In payment of related costs of issuance of any |
| bonds or notes; and/or (5) In payment of capitalized interest during construction of the projects. 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 purposes 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 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 4. The city council may by resolution or order authorize the issuance from time |
| to time of interest bearing or discounted notes in anticipation of the issue of bonds under section 3 |
| 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. 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 the 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 city 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 city. The city 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 city's authority to issue |
| bonds or notes in anticipation of bonds under this act shall continue; provided that: (1) The city |
| council passes a resolution or order evidencing the city'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 5. 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 |
| city council may, to the extent that bonds or notes may be issued hereunder, apply funds in the |
| general treasury of the city 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 6. 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 or order of the city council or pursuant to |
| an investment policy of the city. |
| SECTION 7. 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, to the extent permitted by applicable federal laws, any net earnings |
| or profits 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 projects (provided |
| that the principal amount of the bonds authorized hereunder shall be reduced by such amount of |
| premium used for project costs), to the payment of the principal of or interest on bonds or notes |
| issued hereunder, to the revenues of the city and dealt with as part of the revenues of the city from |
| property taxes to the extent permitted by federal law, to the cost of capitalized interest on temporary |
| notes issued under section 3 of this act not otherwise provided, 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 premium and |
| 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 city from property taxes. In exercising any discretion |
| under this section, the director of finance shall be governed by any instructions adopted by |
| resolution or order of the city council. |
| SECTION 8. All bonds and notes issued under this act and the debt evidenced hereby shall |
| be obligatory on 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 § 45-12-2 and any provision of the city |
| charter. 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 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 provisions 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 9. Any bonds or notes issued under the provisions of this act, 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 the delivery thereof and payment therefor any |
| or all of such officers shall for any reason have ceased to hold office. |
| SECTION 10. The city, acting by resolution or order of its city 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 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 a cost of the projects under section 2. |
| SECTION 11. 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 12. The director of finance and the mayor, on behalf of the city 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 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 l5c2-l2 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. All or any portion of the authorized but unissued authority to issue bonds |
| and notes under this act may be extinguished by resolution or order of the city council, without |
| further action by the general assembly, seven (7) years after the effective date of this act. |
| SECTION 14. 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 5, 2024 or, if so determined by the city |
| council before or after the passage of this act, at a special city-wide election, other than a primary, |
| held in May or June 2024. The question shall be submitted in substantially the following form: |
| "SHALL AN ACT PASSED AT THE 2024 SESSION OF THE GENERAL ASSEMBLY |
| ENTITLED 'AN ACT AUTHORIZING THE CITY OF CRANSTON TO ISSUE NOT TO |
| EXCEED $40,000,000 GENERAL OBLIGATION BONDS, NOTES AND OTHER EVIDENCES |
| OF INDEBTEDNESS TO FINANCE THE PURCHASE AND/OR ACQUISITION OF LAND |
| AND BUILDINGS, CONSTRUCTION, RENOVATION, IMPROVEMENT, ALTERATION, |
| REPAIR, LANDSCAPING, FURNISHING AND/OR EQUIPPING OF SCHOOLS AND |
| SCHOOL FACILITIES THROUGHOUT THE CITY, SUBJECT TO APPROVAL OF STATE |
| HOUSING AID AT A REIMBURSEMENT RATE OR STATE SHARE RATIO OF NOT LESS |
| THAN 50% AT THE TIME OF ISSUANCE' 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 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 or any law of special applicability to the |
| city, this act shall prevail. |
| SECTION 15. This act shall constitute an enabling act of the general assembly that is |
| required pursuant to § 16-7-44. Any bonds, notes or other evidences of indebtedness issued under |
| this act for school projects shall not be eligible for state aid reimbursement pursuant to § 16-7-44 |
| unless the school projects described herein have been approved by the Rhode Island department of |
| education. |
| SECTION 16. This section and sections 14 and 15 shall take effect upon passage. 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 section 14. |
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| LC004261 |
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