act24032

LA 032

2024 -- H 7754
Enacted 06/17/2024

A N A C T

AUTHORIZING THE TOWN OF JOHNSTON TO ISSUE NOT TO EXCEED $40,000,000 GENERAL OBLIGATION BONDS, NOTES AND OTHER EVIDENCES OF INDEBTEDNESS TO FINANCE CONSTRUCTION, ADDITIONS, RENOVATION, IMPROVEMENT, ALTERATION, REPAIR, FURNISHING AND EQUIPPING OF STORMWATER MANAGEMENT AND SEWER FACILITIES THROUGHOUT THE TOWN

Introduced By: Representatives Fellela, Perez, Cardillo, and Costantino

Date Introduced: February 28, 2024

It is enacted by the General Assembly as follows:

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

previously granted, to issue bonds in an amount not exceeding forty million dollars ($40,000,000)

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.

SECTION 2. The bonds shall be signed by the mayor and the director of finance 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 officers authorized to sign the bonds or notes.

Notwithstanding anything contained in this act to the contrary, the town 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 town 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 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, additions, renovation, improvement, alteration, repair furnishing and equipping of

stormwater management and sewer facilities in the town and all costs related thereto, including,

but not limited to, the costs of land acquisition; (2) For payment of the principal or interest on

temporary notes issued under Section 3; (3) For payment of capitalized interest on bonds or notes;

(4) For repayment of advances under Section 4; or (5) For 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 mayor. 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.

SECTION 3. The town council may by resolution or ordinance 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 (without any reduction for any grant received), 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 issuance 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 4. 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 or ordinance

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 issuance of bonds hereunder or pending or in

lieu of any authorization or issuance of notes hereunder, the director of finance, 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 1, 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 issued

hereunder shall be applied to the payment of the first interest due thereon. Any premiums arising

from the sale of bonds or notes issued 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 the town’s financial policies or 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 of such officers shall for any reason have ceased to hold office.

SECTION 9. The town 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 or ordinance of the town council, without further action by the

general assembly within seven (7) years after the effective date of this act.

SECTION 12. The director of finance and the mayor, 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 a special election (other than a primary), 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 2024 session of the General Assembly, entitled, ‘AN ACT AUTHORIZING THE TOWN

OF JOHNSTON TO ISSUE NOT TO EXCEED $40,000,000 GENERAL OBLIGATION BONDS,

NOTES AND OTHER EVIDENCES OF INDEBTEDNESS TO FINANCE CONSTRUCTION,

ADDITIONS, RENOVATION, IMPROVEMENT, ALTERATION, REPAIR, FURNISHING

AND EQUIPPING OF STORMWATER MANAGEMENT AND SEWER FACILITIES

THROUGHOUT 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 his or her 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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LC005269

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