LA 109

2018 -- S 2991 Enacted 07/05/2018

A N   A C T

AUTHORIZING THE TOWN OF SMITHFIELD TO ISSUE NOT TO EXCEED $4,500,000 IN GENERAL OBLIGATION BONDS, NOTES AND OTHER EVIDENCE OF INDEBTEDNESS TO FINANCE THE ACQUISTION, CONSTRUCTION, BUILDING, FURNISHING AND EQUIPPING OF A NEW FIRE STATION IN THE TOWN

Introduced By: Senator Stephen R. Archambault

Date Introduced: June 20, 2018

It is enacted by the General Assembly as follows:

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

previously granted, to issue bonds and other evidences of indebtedness (hereinafter "bonds") up

to an amount not exceeding four million five hundred thousand dollars ($4,500,000) from time to

time under its corporate name and seal or a facsimile of such. 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 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 bonds shall be signed by the manual or facsimile signatures of the town

treasurer and countersigned by the town manager and the town clerk and shall be issued and sold

in such amounts as the town council may authorize by resolution. 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. The proceeds

derived from the sale of the bonds shall be delivered to the town treasurer, and such proceeds,

exclusive of premiums and accrued interest shall be expended: (1) For the acquisition,

construction, building, furnishing and equipping of a new fire station in the town of Smithfield

and all expenses incident thereto; (2) In payment of the principal of or interest on temporary notes

issued under section 3; (3) In repayment of advances under section 4; (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 project (the "project"). 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 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 authorize the issuance from time to

time of interest bearing or discounted notes in anticipation of the issuance 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 town treasurer.

Temporary notes issued hereunder shall be signed by the manual or facsimile signatures of the

town treasurer and countersigned by the town manager and the town clerk 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

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 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, moneys in the fund shall be invested for the benefit of the town by the

paying agent at the direction of the town treasurer in any investment permitted under section 5.

The moneys in the fund and any investments held as 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 moneys 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 town treasurer, 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 town

treasurer 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 premium arising from the

sale of bonds or notes hereunder shall, in the discretion of the town treasurer, 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 project costs, 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 town treasurer,

be met from bond or note proceeds exclusive of accrued interest or from other moneys 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

town treasurer 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. 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 moneys

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, and coupons, if

any, 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 the

moneys 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. The town treasurer and town manager, 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 instruments, documents or agreements necessary to comply with federal tax and

securities laws, which instruments, 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 12. All or any portion of the authorized but unissued authority to issue bonds

and notes under this act may be extinguished by resolution of the town council after seven (7)

years shall have passed from the approval of this act provided for in section 14, without further

action by the general assembly.

SECTION 13. At the general election to be held on November 6, 2018 or at a local

election, other than a primary, to be held on a date designated by the town council, there shall be

submitted to electors of the town a question in substantially the following form: "Shall An Act

Passed at the 2018 Session of the General Assembly Entitled 'AN ACT AUTHORIZING THE

TOWN OF SMITHFIELD TO ISSUE NOT TO EXCEED $4,500,000 IN GENERAL

OBLIGATION BONDS, NOTES AND OTHER EVIDENCE OF INDEBTEDNESS TO

FINANCE THE ACQUISITION, CONSTRUCTION, BUILDING, FURNISHING AND

EQUIPPING OF A NEW FIRE STATION 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 this 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 town charter, this act

shall prevail.

SECTION 14. Sections 13 and 14 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 13.

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LC005935

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