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HOUSE DOCKET, NO. 4535 FILED ON: 8/18/2023
HOUSE . . . . . . . . . . . . . . . No. 4116
The Commonwealth of Massachusetts
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PRESENTED BY:
Dylan A. Fernandes and Julian Cyr
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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act authorizing the town of Nantucket to issue pension obligation bonds or notes.
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PETITION OF:
NAME:DISTRICT/ADDRESS :DATE ADDED:Dylan A. FernandesBarnstable, Dukes and Nantucket8/16/2023Julian CyrCape and Islands8/18/2023 1 of 4
HOUSE DOCKET, NO. 4535 FILED ON: 8/18/2023
HOUSE . . . . . . . . . . . . . . . No. 4116
By Representative Fernandes of Falmouth and Senator Cyr, a joint petition (subject to Joint Rule
12) of Dylan A. Fernandes and Julian Cyr (by vote of the town) that the town of Nantucket be
authorized to issue pension obligation bonds or notes. Public Service. [Local Approval
Received.]
The Commonwealth of Massachusetts
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In the One Hundred and Ninety-Third General Court
(2023-2024)
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An Act authorizing the town of Nantucket to issue pension obligation bonds or notes.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. The town of Nantucket may issue, at one time or from time to time, bonds
2or notes for the purpose of funding the portion of the unfunded pension liability of the Barnstable
3County retirement association allocable to the town of Nantucket, Nantucket County and the
4Nantucket Islands Land Bank. The proceeds of any such issuance, other than amounts to be
5applied to issuance costs and expenses, shall be paid by the town of Nantucket to the Barnstable
6County retirement association, shall be allocated solely to reduce the unfunded pension liability
7allocable to the town of Nantucket, Nantucket County and the Nantucket Islands Land Bank to
8which the bonds or notes relate, shall be invested in any investments which are permitted under
9chapter 32 of the General Laws and shall otherwise be held and expended on behalf of the town
10by the Barnstable County retirement association in accordance with law. The terms of any such
11bonds or notes shall not exceed 30 years from the date of issuance and the amount of any such
12bonds or notes shall be outside the limit of indebtedness prescribed in section 10 of chapter 44 of 2 of 4
13the General Laws. Upon the authorization of the issuance of pension obligation bonds by the
14town, the town shall submit the vote and a plan demonstrating how the town will finance and
15allocate the debt service associated with the bonds or notes to the executive office for
16administration and finance, and no bonds or notes authorized to be issued by this act shall be
17issued until the secretary for administration and finance has approved the plan and the issuance
18of such bonds or notes. Except as otherwise provided in this act, such bonds or notes shall be
19subject to said chapter 44.
20 SECTION 2. The aggregate principal amount of the bonds or notes issued during any
21calendar year under authority of this act shall not be greater than the amount sufficient to
22extinguish the unfunded pension liability of the Barnstable County retirement association
23allocable to the town of Nantucket, Nantucket County and the Nantucket Islands Land Bank as
24of a particular date as determined in accordance with this section, plus an amount to provide for
25issuance costs and other expenses necessary or incidental thereto. The Barnstable County
26retirement association shall first determine the amount sufficient to extinguish the unfunded
27pension liability of the town of Nantucket, Nantucket County and the Nantucket Islands Land
28Bank in accordance with the report of a nationally recognized independent consulting firm,
29which may be the consulting actuary generally retained by the Barnstable County retirement
30association, and which amount shall be approved by the public employee retirement
31administration commission. The report shall also set forth the present value savings to the town
32reasonably expected to be achieved as a result of the issuance of such bonds or notes.
33 SECTION 3. The maturities of such bonds or notes shall be scheduled so that the annual
34combined payments of principal and interest for each issue shall be as nearly equal as practicable
35in the opinion of the town Treasurer, in any manner that shall provide for a more rapid 3 of 4
36amortization of principal, or in accordance with any other manner consistent with the town’s
37approved funding schedule, as the secretary for administration and finance shall approve. In
38granting the approval, the secretary may require the establishment of a reserve to be created from
39a portion of the amount of the annual savings used to calculate the present value savings. Any
40such reserve shall be held and controlled by the town and shall be separate from any other
41reserve or fund of the town allowed or required by statute. The secretary shall establish a method
42to calculate both the required amount of annual contribution to the reserve and the minimum
43value to be maintained in the reserve and shall prescribe conditions for expenditure from the
44reserve, including its use if necessary to prevent or limit any future unfunded actuarial pension
45liability, and the conditions under which all or a portion of the funds in the reserve may be
46available for unrestricted purposes in which case such funds or portions thereof shall be
47transferred to the town treasury. Any funds in the reserve shall be trust funds within the meaning
48of section 54 of chapter 44 of the General Laws and, expected as otherwise provided in this act,
49shall be subject to the provisions of said section 54.
50 SECTION 4. If the unfunded pension liability to be funded with the proceeds of an issue
51of bonds or notes issued under this act relates in part to employees of Nantucket County or the
52Nantucket Islands Land Bank, each of such entities shall be responsible for reimbursing the town
53of Nantucket for such proportion of the annual debt service expense paid by the town of
54Nantucket for bonds or notes issued hereunder as is equal to the proportion of the total unfunded
55pension liability to be funded with the proceeds of the bonds or notes as relates to each of such
56entities. Notwithstanding any general or special law to the contrary, the Public Employee
57Retirement Administration Commission shall increase the annual amount to be certified under
58section 22 of the General Laws as the amount necessary to be paid by Nantucket County and the 4 of 4
59Nantucket County Land Bank as its proportionate share of the annual debt service expense as
60determined herein. The town of Nantucket shall have the same legal rights and authority as the
61retirement board of the Barnstable County retirement association to collect any amount so
62assessed to Nantucket County or the Nantucket Islands Land Bank.
63 SECTION 5. Notwithstanding chapter 70 of the General Laws or any other general or
64special law to the contrary, the portion of the annual debt service paid by the town of Nantucket
65for bonds or notes issued under this act applicable to school department personnel who are
66members of the Barnstable County retirement association shall be included in the computation of
67net school spending for the purposes of said chapter 70 or any other law.
68 SECTION 6. This act shall take effect upon its passage.