2024 -- S 2246

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LC004265

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2024

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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: Senators Gallo, Miller, F. Lombardi, and LaMountain

     Date Introduced: January 26, 2024

     Referred To: Senate Finance

     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,

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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

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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

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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

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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.

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     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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LC004265

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EXPLANATION

OF

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

***

     This act authorizes 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.

     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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LC004265

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