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S TATE OF RHODE IS LAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2023
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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 F ACILITIES THROUGHOUT THE
TOWN, SUBJECT TO APPROVAL OF STATE SCHOOL HOUSING AID AT A
REIMBURSEMENT RATE O R 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
Referred To: House Finance
It is enacted by the General Assembly as follows:
SECTION 1. The town of Coventry is hereby empowered, in addition to authority 1
previously granted, to issue bonds to an amount not exceeding twenty-five million dollars 2
($25,000,000) from time to time under its corporate name and seal or a facsimile of such seal; 3
provided, however that the bonds shall not be issued unless the conditions of section 2 hereof as to 4
the level of state aid are met. The bonds of each issue may be issued in the form of serial bonds or 5
term bonds or a combination thereof and shall be payable either by maturity of principal in the case 6
of serial bonds or by mandatory serial redemption in the case of term bonds, in annual installments 7
of principal, the first installment to be not later than five (5) years and the last installment not later 8
than thirty (30) years after the date of the bonds. 9
SECTION 2. The town may be eligible for school housing aid reimbursement on debt 10
service pursuant to chapter 7 of title 16, and/or for a grant, loan or other “financial assistance” as 11
defined in § 45-38.2-1(6) from the school building authority capital fund under chapter 38.2 of 12
chapter 45. Bonds, notes or other evidences of indebtedness shall not be issued under this act unless 13
the town has received a letter from the Rhode Island department of education (“RIDE”) confirming 14
that the then-current school housing aid reimbursement rate under chapter 7 of title 16, as amended 15
from time to time, or financial assistance from the school building authority capital fund, or 16
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pursuant to any other law hereafter enacted providing for funds to municipalities for school housing 1
purposes, is not less than forty-nine and 2/100 percent (49.2%) for those expenditures which are 2
eligible for state aid. A certificate of the officers authorized to sign such bonds or notes authorized 3
hereunder that such letter has been received shall conclusively demonstrate the satisfaction of this 4
condition to the issuance of indebtedness hereunder. 5
SECTION 3. This act shall constitute an enabling act of the general assembly that is 6
required pursuant to § 16-7-44. Any bonds, notes or other evidences of indebtedness issued under 7
this act for school projects shall not be eligible for state housing aid reimbursement pursuant to § 8
16-7-44 unless the school projects described herein shall have been approved by the Rhode Island 9
department of education. 10
SECTION 4. The bonds shall be signed by the manual or facsimile signatures of the town 11
director of finance and the president of the town council and shall be issued and sold in such 12
amounts as the town council may authorize by resolution. The manner of sale, denominations, 13
maturities, interest rates and other terms, conditions and details of any bonds or notes issued under 14
this act may be fixed by the resolution of the town council authorizing the issue or by separate 15
resolution of the town council or, to the extent provisions for these matters are not so made, they 16
may be fixed by the officers authorized to sign the bonds or notes. Notwithstanding anything 17
contained in this act to the contrary, the town may enter into financing agreements with the Rhode 18
Island health and educational building corporation pursuant to chapter 7 of title 16 and chapter 38.1 19
of title 45 and, with respect to bonds or notes issued in connection with such financing agreements, 20
if any, the town acting by said officers may elect to have the provisions of chapter 38.1 of title 45 21
apply to the issuance of bonds or notes issued hereunder to the extent the provisions of said chapter 22
are inconsistent herewith. In addition, the town may enter into financing agreements with the Rhode 23
Island infrastructure bank pursuant to the provision of chapter 12.2 of title 46 and, with respect to 24
bonds or notes issued in connection with such financing agreements, if any, the town acting by said 25
officers may elect to have the provisions of chapter 12.2 of title 46 apply to the issuance of bonds 26
or notes issued hereunder to the extent the provisions of said chapter are inconsistent herewith. 27
SECTION 5. The proceeds derived from the sale of the bonds shall be delivered to the 28
director of finance, and such proceeds exclusive of premiums and accrued interest shall be 29
expended for: (1) The construction, renovation, rehabilitation, repair, improvement, furnishing 30
and/or equipping of and/or additions to schools and school facilities in the town of Coventry and 31
all costs incidental thereto (the projects”); (2) In payment of the principal of or interest on temporary 32
notes issued under section 6 or; (3) In repayment of advances under section 7. No purchaser of any 33
bonds or notes under this act shall be in any way responsible for the proper application of the 34
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proceeds derived from the sale thereof. The projects shall be carried out and all contracts made 1
therefor on behalf of the town by the town council or as may be otherwise directed by the town 2
council. The proceeds of bonds or notes issued under this act, any applicable federal or state 3
assistance and the other monies referred to in sections 9 and 12 shall be deemed appropriated for 4
the purposes of this act without further action than that required by this act. The bond issue, and 5
any issue of notes, authorized by this act may be consolidated for the purposes of issuance and sale 6
with any other bond and/or note issue of the town heretofore or hereafter authorized; provided that, 7
notwithstanding any such consolidation, the proceeds from the sale of the bonds and notes 8
authorized by this act shall be expended for the purposes set forth above. 9
SECTION 6. The town council may by resolution authorize the issue from time to time of 10
interest bearing or discounted notes in anticipation of the authorization or issue of bonds or in 11
anticipation of the receipt of federal or state aid for the purposes of this act. The amount of original 12
notes issued in anticipation of bonds may not exceed the amount of bonds which may be issued 13
under this act and the amount of original notes issued in anticipation of federal or state aid may not 14
exceed the amount of available federal or state aid as estimated by the director of finance. 15
Temporary notes issued hereunder shall be signed by the director of finance and by the president 16
of the town council and shall be payable within five (5) years from their respective dates, but the 17
principal of and interest on notes issued for a shorter period may be renewed or paid from time to 18
time by the issue of other notes hereunder; provided the period from the date of an original note to 19
the maturity of any note issued to renew or pay the same debt or the interest thereon shall not exceed 20
five (5) years. Any temporary notes in anticipation of bonds issued under this section may be 21
refunded prior to maturity of the notes by the issuance of additional temporary notes; provided that, 22
no such refunding shall result in any amount of temporary notes outstanding at any one time in 23
excess of two hundred percent (200%) of the amount of bonds that may be issued under this act; 24
and provided further that, if the issuance of any such refunding notes results in excess of the amount 25
of bonds that may be issued under this act, the proceeds of such refunding notes shall be deposited 26
in a separate fund established with the paying agent which is the paying agent for the notes being 27
refunded. Pending their use to pay the notes being refunded, monies in the fund shall be invested 28
for the benefit of the town by the paying agent at the direction of the director of finance in any 29
investment permitted under section 8. The monies in the fund and any investments held as a part 30
of the fund shall be held in trust and shall be applied by the paying agent solely to the payment or 31
prepayment of the principal and interest on the notes being refunded. Upon payment of all principal 32
and interest on the notes being refunded, any excess monies in the fund shall be distributed by the 33
paying agent to the town. The town may pay the principal of and interest on the notes in full or in 34
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part from other than the issuance of refunding notes prior to the issuance of bonds pursuant to 1
section 1 hereof. In such case the town’s authority to issue bonds or notes in anticipation of bonds 2
under this act shall continue: provided that (1) The town council passes a resolution evidencing the 3
town’s intent to pay off the notes without extinguishing the authority to issue bonds or notes; and 4
(2) That the period from the date of the original note to the maturity of any other note shall not 5
exceed five (5) years. 6
SECTION 7. Pending any authorization or issue of bonds hereunder or pending or in lieu 7
of any authorization or issue of notes hereunder, the director of finance, with the approval of the 8
town council, may, to the extent that bonds or notes may be issued hereunder, apply funds in the 9
treasury of the town to the purposes specified in section 5, such advances to be repaid without 10
interest from the proceeds of bonds or notes subsequently issued or from the proceeds of applicable 11
federal or state assistance or from other available funds. 12
SECTION 8. Any proceeds of bonds or notes issued hereunder or of any applicable federal 13
or state assistance, pending their expenditure may be deposited or invested by the director of 14
finance, in demand deposits, time deposits or savings deposits in banks which are members of the 15
Federal Deposit Insurance Corporation or in obligations issued or guaranteed by the United States 16
of America or by any agency or instrumentality thereof or as may be provided in any other 17
applicable law of the State of Rhode Island or resolution of the town council or pursuant to an 18
investment policy of the town. 19
SECTION 9. Any accrued interest received upon the sale of bonds or notes hereunder shall 20
be applied to the payment of the first interest due thereon. Any premiums arising from the sale of 21
bonds or notes hereunder and any earnings or net profit realized from the deposit or investment of 22
funds hereunder shall, in the discretion of the director of finance, be applied: (1) To the cost of 23
preparing, issuing and marketing bonds or notes hereunder to the extent not otherwise provided; 24
(2) To the cost of capitalized interest on temporary notes issued under section 6 not otherwise 25
provided; (3) To the payment of the cost of the projects or to the cost of additional improvements 26
coming within the description of the projects in section 5; provided however, the principal amount 27
of the bonds authorized hereunder shall be reduced by such amount of premium used for project 28
costs; and/or (4) To the payment of the principal of or interest on bonds or notes issued hereunder; 29
or to any one or more of the foregoing. The cost of preparing, issuing and marketing bonds or notes 30
hereunder may also, in the discretion of the director of finance, be met from bond or note proceeds 31
exclusive of accrued interest or from other monies available therefor. Any balance of bond or note 32
proceeds remaining after payment of the cost of the projects and said additional improvements and 33
the cost of preparing, issuing and marketing bonds or notes hereunder shall be applied to the 34
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payment of the principal of or interest on bonds or notes issued hereunder. To the extent permitted 1
by applicable federal laws, any earnings or net profit realized from the deposit or investment of 2
funds hereunder may, upon receipt, be added to and dealt with as part of the revenues of the town 3
from property taxes. In exercising any discretion under this section, the director of finance shall be 4
governed by any instructions adopted by resolution of the town council. The director of finance is 5
authorized to take any action deemed by him or her necessary: (1) To assure that interest on the 6
bonds or notes issued hereunder remains excludable from gross income of the recipients thereof for 7
federal income tax purposes, including, without limitation, paying to the federal government any 8
rebate of earnings derived from the deposit or investment of the proceeds of such bonds or notes 9
that may be required therefor; (2) To comply with the requirements of federal law, including, 10
without being limited to, regulations and other requirements of the Securities and Exchange 11
Commission and the Municipal Securities Rulemaking Board, imposed directly on the town or on 12
the underwriters of such bonds and notes and/or (3) to comply with the provisions of §§ 16-7-35 13
through 16-7-47 including making all necessary contracts and agreements to issue said bonds 14
and/or notes through the Rhode Island health and educational building corporation. 15
SECTION 10. All bonds or notes issued under this act and the debts evidenced thereby 16
shall be obligatory on the town in the same manner and to the same extent as other debts lawfully 17
contracted by it and shall be excepted from the operation of § 45-12-2. No such obligation shall at 18
any time be included in the debt of the town for the purpose of ascertaining its borrowing capacity. 19
The town shall annually appropriate a sum sufficient to pay the principal and interest coming due 20
within the year on bonds and notes issued hereunder to the extent that monies therefor are not 21
otherwise provided. If such sum is not appropriated, it shall nevertheless be added to the annual tax 22
levy. In order to provide such sum in each year and notwithstanding any provision of law to the 23
contrary, all taxable property in the town shall be subject to ad valorem taxation by the town without 24
limitation as to rate or amount. 25
SECTION 11. Any bonds or notes issued under the provisions of this act, if properly 26
executed by officers of the town in office on the date of execution, shall be valid and binding 27
according to their terms notwithstanding that before the delivery thereof and payment therefor any 28
or all of such officers shall for any reason have ceased to hold office. 29
SECTION 12. The town, acting by resolution of its town council is authorized to apply for, 30
contract for and expend any federal or state advances or other grants or assistance which may be 31
available for the purposes of this act, and any such expenditures may be in addition to other monies 32
provided in this act. To the extent of any inconsistency between any law of this state and any 33
applicable federal law or regulation, the latter shall prevail. Federal and state advances, with interest 34
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where applicable, whether contracted for prior to or after the effective date of this act, may be 1
repaid as project costs under section 5. 2
SECTION 13. Bonds and notes may be issued under this act without obtaining the approval 3
of any governmental agency or the taking of any proceedings or the happening of any conditions 4
except as specifically required by this act for such issue. In carrying out any project financed in 5
whole or in part under this act, including where applicable the condemnation of any land or interest 6
in land, and in the levy and collection of assessments or other charges permitted by law on account 7
of any such project, all action shall be taken which is necessary to meet constitutional requirements 8
whether or not such action is otherwise required by statute; but the validity of bonds and notes 9
issued hereunder shall in no way depend upon the validity or occurrence of such action. To the 10
extent of any inconsistency between this act and the town charter, this act shall prevail. 11
SECTION 14. All or any portion of the authority to issue bonds and notes under this act 12
may be extinguished by resolution of the town council, without further action by the general 13
assembly seven (7) years after the effective date of this act. 14
SECTION 15. The question of the approval of this act shall be submitted to the electors of 15
the town at a special election to be held on October 3, 2023. The question shall be submitted in 16
substantially the following form: "Shall an act, passed at the 2023 session of the General Assembly, 17
entitled 'AN ACT AUTHORIZING THE TOWN OF COVENTRY TO ISSUE NOT MORE THAN 18
$25,000,000 BONDS AND NOTES TO FINANCE CONSTRUCTION, RENOVATION, 19
REHABILITATION, REPAIR, IMPROVEMENT, FURNISHING AND/OR EQUIPPING OF 20
AND/OR ADDITIONS TO SCHOOLS AND SCHOOL FACILITIES THROUGHOUT THE 21
TOWN, SUBJECT TO APPROVAL OF STATE SCHOOL HOUSING AID AT A 22
REIMBURSEMENT RATE OR STATE SHARE RATIO OF NOT LESS THAN 49.2%’ FOR 23
EXPENDITURES ELIGIBLE FOR REIMBURSEMENT ' be approved?" and the warning for the 24
election shall contain the question to be submitted. The town board of canvassers may combine any 25
two (2) or more voting districts for the election and when so combined shall be treated as a voting 26
district. If so combined, the town board of canvassers shall advertise the combination of districts in 27
a newspaper of general circulation in the town. From the time the election is warned and until it is 28
held, it shall be the duty of the town clerk to keep a copy of the act available at his or her office for 29
public inspection, but the validity of the election shall not be affected by this requirement. 30
SECTION 16. This section and section 15 shall take effect upon passage. The remainder 31
of this act shall take effect upon the approval of this act by a majority of those voting on the question 32
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at the election prescribed by section 15. 1
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EXPLANATION
OF
A N A C T
AUTHORIZING THE TOWN OF COVENTRY TO ISSUE NOT MORE THAN $25,000,000
BONDS AND NOTES TO FINANCE CONSTRUCTION, RENOVA TION,
REHABILITATION, REPAIR, IMPROVEMENT, FURNISHING AND/OR EQUIPPING OF
AND/OR ADDITIONS TO SCHOOLS AND SCHOOL F ACILITIES THROUGHOUT THE
TOWN, SUBJECT TO APPROVAL OF STATE SCHOOL HOUSING AID AT A
REIMBURSEMENT RATE O R STATE SHARE RATIO OF NOT LESS THAN 49.2 % FOR
EXPENDITURES ELIGIBLE FOR REIMBURSEMENT
***
This act authorizes the town of Coventry to submit to the electors of the town at a special 1
election to be held on October 3, 2023, a question in substantially the following form: "Shall an 2
act, passed at the 2023 session of the General Assembly, entitled "AN ACT AUTHORIZING THE 3
TOWN OF COVENTRY TO ISSUE NOT MORE THAN $ 25,000,000 BONDS AND NOTES TO 4
FINANCE CONSTRUCTION, RENOVATION, REHABILITATION, REPAIR, 5
IMPROVEMENT, FURN ISHING AND/OR EQUIPPING OF AND/OR ADDITIONS TO 6
SCHOOLS AND SCHOOL FACILITIES THROUGHOUT THE TOWN, SUBJECT TO 7
APPROVAL OF STATE SCHOOL HOUSING AID AT A REIMBURSEMENT RATE OR 8
STATE SHARE RATIO OF NOT LESS THAN 49.2%’ FOR EXPENDITURES ELIGIBLE FOR 9
REIMBURSEMENT." 10
Section 16 and section 15 of the act would take effect upon passage. The remainder of this 11
act would take effect upon the approval of this act by a majority of those voting on the question at 12
the election prescribed by section 15. 13
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