act23021

LA 021

2023 -- H 6296 SUBSTITUTE A
Enacted 06/07/2023

A N A C T

AUTHORIZING THE TOWN OF COVENTRY TO ISSUE NOT MORE THAN $25,000,000 BONDS AND NOTES TO FINANCE CONSTRUCTION, RENOVATION, REHABILITATION, REPAIR, IMPROVEMENT, FURNISHING AND/OR EQUIPPING OF AND/OR ADDITIONS TO SCHOOLS AND SCHOOL FACILITIES THROUGHOUT THE TOWN, SUBJECT TO APPROVAL OF STATE SCHOOL HOUSING AID AT A REIMBURSEMENT RATE OR STATE SHARE RATIO OF NOT LESS THAN 49.2 % FOR EXPENDITURES ELIGIBLE FOR REIMBURSEMENT

Introduced By: Representatives Serpa, and Noret

Date Introduced: April 19, 2023

It is enacted by the General Assembly as follows:

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

previously granted, to issue bonds to an amount not exceeding twenty-five million dollars

($25,000,000) from time to time under its corporate name and seal or a facsimile of such seal;

provided, however that the bonds shall not be issued unless the conditions of section 2 hereof as to

the level of state aid are met. 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 serial redemption 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.

SECTION 2. The town may be eligible for school housing aid reimbursement on debt

service pursuant to chapter 7 of title 16, and/or for a grant, loan or other “financial assistance” as

defined in § 45-38.2-1(6) from the school building authority capital fund under chapter 38.2 of

chapter 45. Bonds, notes or other evidences of indebtedness shall not be issued under this act unless

the town has received a letter from the Rhode Island department of education (“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 forty-nine and 2/100 percent (49.2%) 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. 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 housing aid reimbursement pursuant to §

16-7-44 unless the school projects described herein shall have been approved by the Rhode Island

department of education.

SECTION 4. The bonds shall be signed by the manual or facsimile signatures of the town

director of finance and the president of the town council 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 resolution 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 or notes. Notwithstanding anything

contained in this act to the contrary, the town 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 town acting by said officers may elect to have the provisions of chapter 38.1 of title 45

apply to the issuance of bonds or notes issued hereunder to the extent the provisions of said chapter

are inconsistent herewith. In addition, the town may enter into financing agreements with the Rhode

Island infrastructure bank pursuant to the provision 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 acting by said

officers may elect to have the provisions of chapter 12.2 of title 46 apply to the issuance of bonds

or notes issued hereunder to the extent the provisions of said chapter are inconsistent herewith.

SECTION 5. 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 for: (1) The construction, renovation, rehabilitation, repair, improvement, furnishing

and/or equipping of and/or additions to schools and school facilities in the town of Coventry and

all costs incidental thereto (the projects”); (2) In payment of the principal of or interest on temporary

notes issued under section 6 or; (3) In repayment of advances under section 7. 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 projects shall be carried out and all contracts made

therefor on behalf of the town by the town council or as may be otherwise directed by the town

council. The proceeds of bonds or notes issued under this act, any applicable federal or state

assistance and the other monies referred to in sections 9 and 12 shall be deemed appropriated for

the purposes of this act without further action than that required by this act. The bond issue, and

any issue of notes, authorized by this act may be consolidated for the purposes of issuance and sale

with any other bond and/or note issue of the town heretofore or hereafter authorized; provided that,

notwithstanding any such consolidation, the proceeds from the sale of the bonds and notes

authorized by this act shall be expended for the purposes set forth above.

SECTION 6. The town council may by resolution authorize the issue from time to time of

interest bearing or discounted notes in anticipation of the authorization or 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 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 director of finance and by the president

of the town council 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 maturity of the notes by the issuance of additional temporary notes; provided that,

no such refunding shall result in any amount of temporary notes outstanding at any one time in

excess of two hundred percent (200%) of the amount of bonds that may be issued under this act;

and provided further that, if the issuance of any such refunding notes results in excess of the amount

of bonds that may be issued under this act, the proceeds of such refunding notes shall be deposited

in a separate fund established with the paying agent 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 town by the paying agent at the direction of the director of finance in any

investment permitted under section 8. 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 and interest on the notes being refunded. Upon payment of all principal

and interest on the notes being refunded, any excess monies in the fund shall be distributed by the

paying agent to the town. The town may pay the principal of and interest on the notes in full or in

part 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 the original note to the maturity of any other note shall not

exceed five (5) years.

SECTION 7. 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

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 5, 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 8. 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 9. 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 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: (1) To the cost of

preparing, issuing and marketing bonds or notes hereunder to the extent not otherwise provided;

(2) To the cost of capitalized interest on temporary notes issued under section 6 not otherwise

provided; (3) To the payment of the cost of the projects or to the cost of additional improvements

coming within the description of the projects in section 5; provided however, the principal amount

of the bonds authorized hereunder shall be reduced by such amount of premium used for project

costs; and/or (4) 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 said additional improvements 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 any instructions adopted by resolution of the town council. The director of finance is

authorized to take any action deemed by him or her necessary: (1) To assure that interest on the

bonds or notes issued hereunder remains excludable from gross income of the recipients thereof for

federal income tax purposes, including, without limitation, paying to the federal government any

rebate of earnings derived from the deposit or investment of the proceeds of such bonds or notes

that may be required therefor; (2) To comply with the requirements of federal law, including,

without being limited to, regulations and other requirements of the Securities and Exchange

Commission and the Municipal Securities Rulemaking Board, imposed directly on the town or on

the underwriters of such bonds and notes and/or (3) to comply with the provisions of §§ 16-7-35

through 16-7-47 including making all necessary contracts and agreements to issue said bonds

and/or notes through the Rhode Island health and educational building corporation.

SECTION 10. All bonds or 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 11. 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 12. 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 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 5.

SECTION 13. 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. To the

extent of any inconsistency between this act and the town charter, this act shall prevail.

SECTION 14. All or any portion of the authority to issue bonds and notes under this act

may be extinguished by resolution of the town council, without further action by the general

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

SECTION 15. The question of the approval of this act shall be submitted to the electors of

the town at a special election to be held on October 3, 2023. The question shall be submitted in

substantially the following form: "Shall an act, passed at the 2023 session of the General Assembly,

entitled 'AN ACT AUTHORIZING THE TOWN OF COVENTRY TO ISSUE NOT MORE THAN

$25,000,000 BONDS AND NOTES TO FINANCE CONSTRUCTION, RENOVATION,

REHABILITATION, REPAIR, IMPROVEMENT, FURNISHING AND/OR EQUIPPING OF

AND/OR ADDITIONS TO SCHOOLS AND SCHOOL FACILITIES THROUGHOUT THE

TOWN, SUBJECT TO APPROVAL OF STATE SCHOOL HOUSING AID AT A

REIMBURSEMENT RATE OR STATE SHARE RATIO OF NOT LESS THAN 49.2%’ FOR

EXPENDITURES ELIGIBLE FOR REIMBURSEMENT' be approved?" and the warning for the

election shall contain the question to be submitted. The town board of canvassers may combine any

two (2) or more voting districts for the election and when so combined shall be treated as a voting

district. If so combined, the town board of canvassers shall advertise the combination of districts in

a newspaper of general circulation in the town. 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 16. This section and section 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 15.

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LC001175/SUB A

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