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HOUSE DOCKET, NO. 2131 FILED ON: 1/15/2025
HOUSE . . . . . . . . . . . . . . . No. 2262
The Commonwealth of Massachusetts
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PRESENTED BY:
Kate Donaghue
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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 Southborough to issue pension obligation bonds or notes.
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PETITION OF:
NAME:DISTRICT/ADDRESS :DATE ADDED:Kate Donaghue19th Worcester1/15/2025 1 of 4
HOUSE DOCKET, NO. 2131 FILED ON: 1/15/2025
HOUSE . . . . . . . . . . . . . . . No. 2262
By Representative Donaghue of Westborough, a petition (accompanied by bill, House, No. 2262)
of Kate Donaghue (by vote of the town) that town of Southborough be authorized to issue bonds
or notes for the purpose of funding its portion of the unfunded pension liability of the Worcester
regional retirement system. Municipalities and Regional Government. [Local Approval
Received.]
[SIMILAR MATTER FILED IN PREVIOUS SESSION
SEE HOUSE, NO. 5056 OF 2023-2024.]
The Commonwealth of Massachusetts
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In the One Hundred and Ninety-Fourth General Court
(2025-2026)
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An Act authorizing the town of Southborough 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 Southborough may issue, at 1 time or from time to time, bonds
2or notes for the purpose of funding the portion of the unfunded pension liability of the Worcester
3regional retirement system allocable to the town of Southborough. The proceeds of any such
4issuance, other than amounts to be applied to issuance costs, the establishment of reserves and
5any other expenses incidental or related thereto, shall be paid by the town of Southborough to the
6Worcester regional retirement system, shall be allocated solely to reduce the unfunded pension
7liability allocable to the town of Southborough to which the bonds or notes relate, shall be
8invested in any investments which are permitted under chapter 32 of the General Laws and shall
9otherwise be held and expended on behalf of the town by the Worcester regional retirement 2 of 4
10system in accordance with law. The terms of any such bonds or notes shall not exceed 30 years
11from the date of issuance and the amount of any such bonds or notes shall be outside the limit of
12indebtedness prescribed in section 10 of chapter 44 of the General Laws. Upon the authorization
13of the issuance of pension obligation bonds by the town, the town shall submit the vote and a
14plan demonstrating how the town will finance and allocate the debt service associated with the
15bonds or notes to the executive office for administration and finance, and no bonds or notes
16authorized to be issued by this act shall be issued until the secretary for administration and
17finance has approved the plan and the issuance of such bonds or notes. Except as otherwise
18provided in this act, such bonds or notes shall be subject to said chapter 44.
19 SECTION 2. The aggregate principal amount of the bonds or notes issued during any
20calendar year under authority of this act shall not be greater than the amount sufficient to
21extinguish the unfunded pension liability of the Worcester regional retirement system allocable
22to the town of Southborough, as of a particular date as determined in accordance with this
23section, plus an amount to provide for issuance costs, the establishment of any reserves as
24described below and any other expenses incidental or related thereto. The Worcester regional
25retirement system shall first determine the amount sufficient to extinguish the unfunded pension
26liability of the town of Southborough, in accordance with the report of a nationally recognized
27independent consulting firm, which may be the consulting actuary generally retained by the
28Worcester regional retirement system, and which amount shall be approved by the public
29employee retirement administration commission. The report shall also set forth the present value
30savings to the town reasonably expected to be achieved as a result of the issuance of such bonds
31or notes. 3 of 4
32 SECTION 3. The maturities of such bonds or notes shall be scheduled so that the annual
33combined payments of principal and interest for each issue shall be as nearly equal as practicable
34in the opinion of the town treasurer, in any manner that shall provide for a more rapid
35amortization of principal, or in accordance with any other manner consistent with the town's
36approved funding schedule, as the secretary for administration and finance shall approve. In
37granting the approval, the secretary may require the establishment of a reserve that may be
38created from a portion of the amount of the annual savings used to calculate the present value
39savings, through the issuance of bonds in accordance with this act, or otherwise, and the town of
40Southborough is authorized to establish any such reserve fund upon such terms and conditions as
41may be required by the secretary for administration and finance or, if no such reserve is required
42to be established by the secretary of administration and finance, such a reserve fund may be
43established upon such terms and conditions as the town shall determine and may be funded with
44proceeds of bonds issued pursuant to this act, or otherwise. Any such reserve shall be held and
45controlled by the town and shall be separate from any other reserve or fund of the town allowed
46or required by statute. The secretary shall establish a method to calculate both the required
47amount of annual contribution to the reserve and the minimum value to be maintained in the
48reserve and shall prescribe conditions for expenditure from the reserve, including its use if
49necessary to prevent or limit any future unfunded actuarial pension liability and the conditions
50under which all or a portion of the funds in the reserve may be available for unrestricted
51purposes in which case such funds or portions thereof shall be transferred to the town treasury.
52Any funds in the reserve fund established pursuant to this act shall be trust funds within the
53meaning of section 54 of chapter 44 of the General Laws and, except as otherwise provided in
54this act, shall be subject to the provisions of said section 54. 4 of 4
55 SECTION 4. If the unfunded pension liability to be funded with the proceeds of an issue
56of bonds or notes issued under this act relates in part to employees of a governmental unit other
57than the town of Southborough, each such governmental unit shall be responsible for
58reimbursing the town of Southborough for bonds or notes issued hereunder as is equal to the
59proportion of the total unfunded pension liability to be funded with the proceeds of the bonds or
60notes as relates to each of such entities. Notwithstanding any general or special law to the
61contrary, the public employee retirement administration commission shall increase the annual
62amount to be certified under section 22 of chapter 32 the General Laws as the amount necessary
63to be paid by each such governmental unit other than the town of Southborough by each such
64governmental unit's proportionate share of the annual debt service expense as determined herein.
65The town of Southborough shall have the same legal rights and authority as the retirement board
66of the Worcester regional retirement system to collect any amount so assessed to any such
67governmental unit.
68 SECTION 5. Notwithstanding chapter 70 of the General Laws or any other general or
69special law to the contrary, the portion of the annual debt service paid by the town of
70Southborough for bonds or notes issued under this act applicable to school department personnel
71who are members of the Worcester regional retirement system shall be included in the
72computation of net school spending for the purposes of said chapter 70 or any other law.
73 SECTION 6. This act shall take effect upon its passage.