Title 45
Towns and Cities

Chapter 12
Indebtedness of Towns and Cities

§ 45-12-30. Securing of bonds or notes — Trust agreements.

(a) Bonds or notes issued by a city or town may be secured in whole or in part by insurance or by letters or lines of credit or other credit facilities. This insurance, letter, or line of credit or credit facility may provide for reimbursement to be made over period of time, not to exceed two (2) years beyond the maturity date of the bonds or notes secured, as the treasurer or director of finance deems proper, and may provide for reimbursement to be made and any of these notes or bonds to be issued at a rate or rates of interest as the treasurer or director of finance deems proper, including rates variable from time to time as determined by an index, banker’s loan rate, or other method that may be specified in the agreement or the bond or note. Notwithstanding any contrary provision of law, bonds or notes secured as described in this section may, in the discretion of the treasurer or director of finance, be subject to prepayment at the option of the holder of these bonds or notes at times and prices and under circumstances that the treasurer or director of finance specifies. For the purpose of securing bonds and notes, a city or town, acting by its treasurer or director of finance, may enter into a trust agreement between the city or town and a corporate trustee which shall be a bank or trust company doing business in the state. This trust agreement, and any remarketing or other agreements necessary or incidental to the issuance of these bonds or notes, shall be in any form deemed proper by the treasurer or director of finance of the city or town, and shall be executed by its treasurer or director of finance and countersigned by its mayor or president of the town council. It shall be lawful for any bank or trust company doing business in the state to act as a depository or trustee under this trust agreement, and to furnish indemnification and pledge securities that may be required by any city or town. Any trustee under a trust agreement established pursuant to this section may bring suit upon the bonds or notes and may, either at law or equity, by suit, action, mandamus, or other proceedings for legal or equitable relief, enforce all rights under the laws of the state or granted under this section or under the trust agreement, and may enforce and compel the performance of all duties required under the trust agreement to be performed by the city or town or by any officer of the city or town. All expenses incurred in carrying out the provisions of this section may be treated by the city or town as a cost of issuance.

(b) The powers granted in this section are in addition to and not in substitution for authority previously granted or subsequently granted to cities and towns or officers on behalf of cities and towns to set the terms, conditions, or details of any bonds or notes, including without limitation, the provision of bond insurance.