2021 -- S 0224
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LC001266
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2021
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AN ACT
AUTHORIZING THE CITY OF PROVIDENCE TO ISSUE NOT TO EXCEED $140,000,000
GENERAL OBLIGATION BONDS, NOTES AND OTHER EVIDENCES OF
INDEBTEDNESS TO FINANCE THE CONSTRUCTION, RENOVATION, IMPROVEMENT,
ALTERATION, REPAIR, LANDSCAPING, FURNISHING AND 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 75% AT THE TIME OF ISSUANCE AND PROVIDED THAT THE
AUTHORIZATION SHALL BE REDUCED BY THE AMOUNT OF CERTAIN GRANTS
RECEIVED FROM STATE BOND PROCEEDS, FROM THE RHODE ISLAND
DEPARTMENT OF EDUCATION OR FROM THE RHODE ISLAND SCHOOL BUILDING
AUTHORITY
Introduced By: Senator Maryellen Goodwin
Date Introduced: February 10, 2021
Referred To: Senate Finance
It is enacted by the General Assembly as follows:
1 SECTION 1. The city of Providence is hereby authorized, in addition to authority
2 previously granted, to issue bonds and other evidences of indebtedness (hereinafter “bonds”) up to
3 an amount not exceeding one hundred forty million dollars ($140,000,000) from time to time under
4 its corporate name and seal or a facsimile of such seal; provided, however, that bonds shall not be
5 issued unless the conditions of section 2 hereof as to the level of state aid are met. The bonds of
6 each issue may be issued in the form of serial bonds or term bonds or a combination thereof and
7 shall be payable either by maturity of principal in the case of serial bonds or by mandatory sinking
8 fund installments in the case of term bonds, in annual installments of principal, the first installment
9 to be not later than five (5) years and the last installment not later than thirty (30) years after the
10 date of the bonds. All such bonds of a particular issue may be issued in the form of zero coupon
11 bonds, capital appreciation bonds, serial bonds or term bonds or a combination thereof. The amount
12 of principal appreciation each year on any bonds, after the date of original issuance, shall not be
13 considered to be principal indebtedness for the purposes of any constitutional, charter or statutory
14 debt limit or any other limitation. The appreciation of principal after the date of original issue shall
 1 be considered interest. Only the original principal amount shall be counted in determining the
2 principal amount so issued and any interest component shall be disregarded.
3 SECTION 2. The city may be eligible for school housing aid reimbursement on debt
4 service pursuant to chapter 7 of title 16, or for a grant, loan or other financial assistance from
5 proceeds of bonds issued by the State of Rhode Island (the “State”), from the Rhode Island
6 Department of Education (“RIDE”) or from the Rhode Island School Building Authority. The
7 amount of borrowing authorized pursuant to this act shall be reduced by the amount of certain
8 grants actually received by the city from State bond proceeds, from RIDE or from the Rhode Island
9 School Building Authority; provided however, that the amount of borrowing authorized shall not
10 be reduced by the amount of any grant received by the city for any portion of the projects funded
11 by capital reserve funds. Bonds, notes or other evidences of indebtedness shall not be issued
12 under this act unless the city has received a letter from RIDE confirming that the then-current school
13 housing aid reimbursement rate under chapter 7 of title 16, as amended from time to time, or
14 financial assistance from the School Building Authority Capital Fund, or pursuant to any other law
15 hereafter enacted providing for funds to municipalities for school housing purposes, is not less than
16 seventy five percent (75%) for those expenditures which are eligible for state aid.
17 SECTION 3. The bonds shall be signed by the manual or facsimile signatures of the city
18 treasurer and the mayor and shall be issued and sold in such amounts as the city council may
19 determine by resolution. The manner of sale, denominations, maturities, interest rates and other
20 terms, conditions and details of any bonds or notes issued under this act may be fixed by the
21 proceedings of the city council authorizing the issuance or by separate resolution of the city council
22 or, to the extent provisions for these matters are not so made, they may be fixed by the officers
23 authorized to sign the bonds or notes. Notwithstanding anything contained in this act to the
24 contrary, the city may enter into financing agreements with the Rhode Island Health and
25 Educational Building Corporation pursuant to chapter 7 of title 16 and chapter 38.1 of title 45 and,
26 with respect to notes or bonds issued in connection with such financing agreements, if any, the city
27 may elect to have the provisions of chapter 38.1 of title 45 apply to the issuance of the bonds or
28 notes issued hereunder to the extent the provisions of chapter 38.1 of title 45 are inconsistent
29 herewith. In addition, the city may enter into financing agreements with the Rhode Island
30 Infrastructure Bank pursuant to the provisions of chapter 12.2 of title 46 and, with respect to notes
31 or bonds issued in connection with such financing agreements, if any, the city may elect to have
32 the provisions of chapter 12.2 of title 46 apply to the issuance of the bonds or notes issued hereunder
33 to the extent the provisions of chapter 12.2 of title 46 are inconsistent herewith. Such election may
34 be fixed by the proceedings of the city council authorizing such issuance or by separate resolution
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 1 of the city council, or, to the extent provisions for these matters are not so made, they may be fixed
2 by the officers authorized to sign the bonds or notes. The proceeds derived from the sale of the
3 bonds shall be delivered to the city treasurer, and such proceeds, exclusive of premiums and accrued
4 interest, shall be expended: (1) For the construction, renovation, improvement, alteration, repair,
5 landscaping, furnishing and equipping of schools and school facilities throughout the city of
6 Providence and all costs related thereto (the “projects”); (2) In payment of the principal of or
7 interest on temporary notes issued under section 4; (3) In repayment of advances under section 5;
8 (4) In payment of related costs of issuance of any bonds or notes; and/or (5) In payment of
9 capitalized interest during construction of the projects. No purchaser of any bonds or notes under
10 this act shall be in any way responsible for the proper application of the proceeds derived from the
11 sale thereof. The proceeds of bonds or notes issued under this act, any applicable federal or state
12 assistance and the other monies referred to in sections 7 and 10 shall be deemed appropriated for
13 the purposes of this act without further action than that required by this act. The bonds authorized
14 by this act may be consolidated for the purpose of issuance and sale with any other bonds of the
15 city heretofore or hereafter authorized; provided that, notwithstanding any such consolidation, the
16 proceeds from the sale of the bonds authorized by this act shall be expended for the purposes set
17 forth above.
18 SECTION 4. The city council may by resolution authorize the issuance from time to time
19 of interest bearing or discounted notes in anticipation of the issuance of bonds under section 3 or
20 in anticipation of the receipt of federal or state aid for the purposes of this act. The amount of
21 original notes issued in anticipation of bonds may not exceed the amount of bonds which may be
22 issued under this act and the amount of original notes issued in anticipation of federal or state aid
23 may not exceed the amount of available federal or state aid as estimated by the city treasurer.
24 Temporary notes issued hereunder shall be signed by the manual or facsimile signatures of the city
25 treasurer and the mayor and shall be payable within five (5) years from their respective dates, but
26 the principal of and interest on notes issued for a shorter period may be renewed or paid from time
27 to time by the issuance of other notes hereunder, provided the period from the date of an original
28 note to the maturity of any note issued to renew or pay the same debt or the interest thereon shall
29 not exceed five (5) years. Any temporary notes in anticipation of bonds issued under this section
30 may be refunded prior to the maturity of the notes by the issuance of additional temporary notes;
31 provided that, no such refunding shall result in any amount of such temporary notes outstanding at
32 any one time in excess of two hundred percent (200%) of the amount of bonds which may be issued
33 under this act; and provided further, that if the issuance of any such refunding notes results in any
34 amount of such temporary notes outstanding at any one time in excess of the amount of bonds
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 1 which may be issued under this act, the proceeds of such refunding notes shall be deposited in a
2 separate fund established with the bank which is the paying agent for the notes being refunded.
3 Pending their use to pay the notes being refunded, monies in the fund shall be invested for the
4 benefit of the city by the paying agent at the direction of the city treasurer in any investment
5 permitted under section 6. The monies in the fund and any investments held as a part of the fund
6 shall be held in trust and shall be applied by the paying agent solely to the payment or prepayment
7 of the principal of and interest on the notes being refunded. Upon payment of all principal of and
8 interest on the notes, any excess monies in the fund shall be distributed to the city. The city may
9 pay the principal of and interest on notes in full from other than the issuance of refunding notes
10 prior to the issuance of bonds pursuant to section 1 hereof. In such case, the city's authority to issue
11 bonds or notes in anticipation of bonds under this act shall continue; provided that: (1) The city
12 council passes a resolution evidencing the city's intent to pay off the notes without extinguishing
13 the authority to issue bonds or notes; and (2) That the period from the date of an original note to
14 the maturity date of any other note shall not exceed five (5) years.
15 SECTION 5. Pending any authorization or issuance of bonds hereunder or pending or in
16 lieu of any authorization or issuance of notes hereunder, the city treasurer, with the approval of the
17 city council may, to the extent that bonds or notes may be issued hereunder, apply funds in the
18 general treasury of the city to the purposes specified in section 3, such advances to be repaid without
19 interest from the proceeds of bonds or notes subsequently issued or from the proceeds of applicable
20 federal or state assistance or from other available funds.
21 SECTION 6. Any proceeds of bonds or notes issued hereunder or of any applicable federal
22 or state assistance, pending their expenditure may be deposited or invested by the city treasurer, in
23 demand deposits, time deposits or savings deposits in banks which are members of the Federal
24 Deposit Insurance Corporation or in obligations issued or guaranteed by the United States of
25 America or by any agency or instrumentality thereof or as may be provided in any other applicable
26 law of the state of Rhode Island or resolution of the city council or pursuant to an investment policy
27 of the city.
28 SECTION 7. Any accrued interest received upon the sale of bonds or notes hereunder shall
29 be applied to the payment of the first interest due thereon. Any premiums arising from the sale of
30 bonds or notes hereunder and, to the extent permitted by applicable federal laws, any net earnings
31 or profits realized from the deposit or investment of funds hereunder shall, in the discretion of the
32 city treasurer, be applied to the cost of preparing, issuing, and marketing bonds or notes hereunder
33 to the extent not otherwise provided, to the payment of the cost of the projects, to the payment of
34 the principal of or interest on bonds or notes issued hereunder, to the revenues of the city and dealt
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 1 with as part of the revenues of the city from property taxes to the extent permitted by federal law,
2 or to any one or more of the foregoing. The cost of preparing, issuing, and marketing bonds or notes
3 hereunder may also, in the discretion of the city treasurer, be met from bond or note proceeds
4 exclusive of premium and accrued interest or from other monies available therefor. Any balance of
5 bond or note proceeds remaining after payment of the cost of the projects and the cost of preparing,
6 issuing and marketing bonds or notes hereunder shall be applied to the payment of the principal of
7 or interest on bonds or notes issued hereunder. To the extent permitted by applicable federal laws,
8 any earnings or net profit realized from the deposit or investment of funds hereunder may, upon
9 receipt, be added to and dealt with as part of the revenues of the city from property taxes. In
10 exercising any discretion under this section, the city treasurer shall be governed by any instructions
11 adopted by resolution of the city council.
12 SECTION 8. All bonds and notes issued under this act and the debt evidenced hereby shall
13 be obligatory on the city in the same manner and to the same extent as other debts lawfully
14 contracted by it and shall be excepted from the operation of § 45-12-2 and any provision of the city
15 charter. No such obligation shall at any time be included in the debt of the city for the purpose of
16 ascertaining its borrowing capacity. The city shall annually appropriate a sum sufficient to pay the
17 principal and interest coming due within the year on bonds and notes issued hereunder to the extent
18 that monies therefor are not otherwise provided. If such sum is not appropriated, it shall
19 nevertheless be added to the annual tax levy. In order to provide such sum in each year and
20 notwithstanding any provisions of law to the contrary, all taxable property in the city shall be
21 subject to ad valorem taxation by the city without limitation as to rate or amount.
22 SECTION 9. Any bonds or notes issued under the provisions of this act, if properly
23 executed by the officers of the city in office on the date of execution, shall be valid and binding
24 according to their terms notwithstanding that before the delivery thereof and payment therefor any
25 or all of such officers shall for any reason have ceased to hold office.
26 SECTION 10. The city, acting by resolution of its city council is authorized to apply for,
27 contract for and expend any federal or state advances or other grants of assistance which may be
28 available for the purposes of this act, and any such expenditures may be in addition to other monies
29 provided in this act. To the extent of any inconsistency between any law of this state and any
30 applicable federal law or regulation, the latter shall prevail. Federal and state advances, with interest
31 where applicable, whether contracted for prior to or after the effective date of this act, may be
32 repaid as a cost of the projects under section 3.
33 SECTION 11. Bonds and notes may be issued under this act without obtaining the approval
34 of any governmental agency or the taking of any proceedings or the happening of any conditions
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 1 except as specifically required by this act for such issue. In carrying out any project financed in
2 whole or in part under this act, including where applicable the condemnation of any land or interest
3 in land, and in the levy and collection of assessments or other charges permitted by law on account
4 of any such project, all action shall be taken which is necessary to meet constitutional requirements
5 whether or not such action is otherwise required by statute, but the validity of bonds and notes
6 issued hereunder shall in no way depend upon the validity or occurrence of such action.
7 SECTION 12. The city treasurer and the mayor, on behalf of the city are hereby authorized
8 to execute such instruments, documents or other papers as either of them deem necessary or
9 desirable to carry out the intent of this act and are also authorized to take all actions and execute all
10 documents necessary to comply with federal tax and securities laws, which documents or
11 agreements may have a term coextensive with the maturity of the bonds authorized
12 hereby, including Rule 15c2-12 of the Securities and Exchange Commission (the "Rule") and to
13 execute and deliver a continuing disclosure agreement or certificate in connection with the bonds
14 or notes in the form as shall be deemed advisable by such officers in order to comply with the Rule.
15 SECTION 13. All or any portion of the authorized but unissued authority to issue bonds
16 and notes under this act may be extinguished by resolution of the city council, without further action
17 by the general assembly, seven (7) years after the effective date of this act.
18 SECTION 14. This act shall constitute an enabling act of the general assembly that is
19 required pursuant to § 16-7-44. Any bonds, notes or other evidences of indebtedness issued under
20 this act for school projects shall not be eligible for state aid reimbursement pursuant to § 16-7-44
21 unless the school projects described herein have b