2023 -- S 0206 AS AMENDED
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LC001484
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S T A T E O F R H O D E I S L A N D
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2023
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A N A C T
AUTHORIZING THE TOWN OF MIDDLETOWN TO ISSUE NOT TO EXCEED
$190,000,000 GENERAL OBLIGATION BONDS, NOTES AND OTHER EVIDENCES OF
INDEBTEDNESS TO FINANCE THE CONSTRUCTION , FURNISHING AND EQUIPPING
OF A MIDDLE SCHOOL AND HIGH SCHOOL AND THE RENOVATION,
IMPROVEMENT, ALTERAT ION, REPAIR, FURNISHING AND EQUIPPING OF SCHOOL
FACILITIES THROUGHOUT THE TOWN AND ALL ATTENDANT EXPENSES
INCLUDING, BUT NOT LIMITED TO, DEMOLITION, ENGINEERING, ARCHITECTURAL
AND LANDSCAPING COST S; PROVIDED THAT, THE AUTHORIZATION SHALL BE
REDUCED BY THE AMOUN T OF CERTAIN GRANTS RECEIVED FROM STATE BOND
PROCEEDS, FROM THE RHODE ISLAND DEPARTME NT OF EDUCATION OR FROM
THE RHODE ISLAND SCHOOL BUILDING AUTHORITY
Introduced By: Senator Louis P. DiPalma
Date Introduced: February 16, 2023
Referred To: Senate Finance
It is enacted by the General Assembly as follows:
SECTION 1. The town of Middletown is hereby empowered, in addition to authority 1
previously granted, to issue bonds, notes and other evidences of indebtedness (hereinafter "bonds") 2
up to an amount not exceeding one hundred ninety million dollars ($190,000,000) from time to 3
time under its corporate name and seal or a facsimile of such seal. The bonds of each issue may be 4
issued in the form of serial bonds or term bonds or a combination thereof and shall be payable 5
either by maturity of principal in the case of serial bonds or by sinking fund installments in the case 6
of term bonds, in annual installments of principal, the first installment to be not later than five (5) 7
years and the last installment not later than thirty (30) years after the date of the bonds. All such 8
bonds of a particular issue may be issued in the form of zero coupon bonds, capital appreciation 9
bonds, serial bonds or term bonds or a combination thereof. The amount of principal appreciation 10
each year on any bonds, after the date of original issuance, shall not be considered to be principal 11
indebtedness for the purposes of any constitutional or statutory debt limit or any other limitation. 12
The appreciation of principal after the date of original issue shall be considered interest. Only the 13
original principal amount shall be counted in determining the principal amount so issued and any 14
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interest component shall be disregarded. 1
SECTION 2. The town may be eligible for school housing aid reimbursement on debt 2
service pursuant to chapter 7 of title 16, or for a grant, loan or other financial assistance from 3
proceeds of bonds issued by the State of Rhode Island (the "state"), from the Rhode Island 4
department of education ("RIDE") or from the Rhode Island school building authority. The amount 5
of borrowing authorized pursuant to this act shall be reduced by the amount of certain grants 6
actually received by the town from State bond proceeds, from RIDE or from the Rhode Island 7
school building authority. 8
SECTION 3. The bonds shall be signed by the manual or facsimile signatures of the town 9
finance director and the president of the town council and shall be issued and sold in such amounts 10
as the town council may authorize by resolution. The manner of sale, denominations, maturities, 11
interest rates and other terms, conditions and details of any bonds or notes issued under this act 12
may be fixed by the resolutions of the town council authorizing the issue or by separate resolution 13
of the town council or, to the extent provisions for these matters are not so made, they may be fixed 14
by the officers authorized to sign the bonds or notes. Notwithstanding anything contained in this 15
act to the contrary, the town may enter into financing agreements with the Rhode Island health and 16
educational building corporation pursuant to chapter 7 of title 16 and chapter 38.1 of title 45 and, 17
with respect to bonds or notes issued in connection with such financing agreements, if any, the 18
town may elect to have the provisions of chapter 38.1 of title 45 apply to the issuance of the bonds 19
or notes issued hereunder to the extent the provisions of chapter 38.1 of title 45 are inconsistent 20
herewith. In addition, the town may enter into financing agreements with the Rhode Island 21
infrastructure bank pursuant to the provisions of chapter 12.2 of title 46 and, with respect to notes 22
or bonds issued in connection with such financing agreements, if any, the town may elect to have 23
the provisions of chapter 12.2 of title 46 apply to the issuance of the bonds or notes issued hereunder 24
to the extent the provisions of chapter 12.2 of title 46 are inconsistent herewith. Such election may 25
be fixed by the proceedings of the town council authorizing such issuance of by separate resolution 26
of the town council, or, to the extent provisions for these matters are not so made, they may be 27
fixed by the officers authorized to sign the bonds or notes. The proceeds derived from the sale of 28
the bonds shall be delivered to the town finance director, and such proceeds exclusive of premiums 29
and accrued interest shall be expended: (1) To finance the construction, furnishing and equipping 30
of a middle school and high school and the renovation, improvement, alteration, repair, furnishing 31
and equipping of school facilities throughout the town and all attendant expenses including, but not 32
limited to, demolition, engineering, architectural and landscaping costs; (2) In payment of the 33
principal of or interest on temporary notes issued under section 4; (3) In repayment of advances 34
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under section 5; (4) In payment of related costs of issuance of any bonds or notes; and/or (5) In 1
payment of capitalized interest during construction of the project (the "project"). No purchaser of 2
any bonds or notes under this act shall be in any way responsible for the proper application of the 3
proceeds derived from the sale thereof. The project shall be carried out and all contracts made 4
therefor on behalf of the town by the town council. The town council and its agents are authorized 5
to enter, without delay and at reasonable times, any public school buildings and other public school 6
property for the purpose of accomplishing the project and to do all acts and deeds necessary or 7
convenient in connection with the project. The proceeds of bonds or notes issued under this act, 8
any applicable federal or state assistance and the other monies referred to in sections 7 and 10 shall 9
be deemed appropriated for the purposes of this act without further action than that required by this 10
act. The bonds authorized by this act may be consolidated for the purpose of issuance and sale with 11
any other bonds of the town heretofore or hereafter authorized; provided that, notwithstanding any 12
such consolidation, the proceeds from the sale of the bonds authorized by this act shall be expended 13
for the purposes set forth above. 14
SECTION 4. The town council may by resolution authorize the issuance from time to time 15
of interest bearing or discounted notes in anticipation of the issuance of bonds or in anticipation of 16
the receipt of federal or state aid for the purposes of this act. The amount of original notes issued 17
in anticipation of bonds may not exceed the amount of bonds which may be issued under this act 18
and the amount of original notes issued in anticipation of federal or state aid may not exceed the 19
amount of available federal or state aid as estimated by the finance director. Temporary notes issued 20
hereunder shall be signed by the manual or facsimile signatures of the town finance director and 21
the president of the town council and shall be payable within five (5) years from their respective 22
dates, but the principal of and interest on notes issued for a shorter period may be renewed or paid 23
from time to time by the issuance of other notes hereunder; provided the period from the date of an 24
original note to the maturity of any note issued to renew or pay the same debt or interest thereon 25
shall not exceed five (5) years. Any temporary notes in anticipation of bonds issued under this 26
section may be refunded prior to the maturity of the notes by the issuance of additional temporary 27
notes; provided that, no such refunding shall result in any amount of such temporary notes 28
outstanding at any one time in excess of two hundred percent (200%) of the amount of bonds which 29
may be issued under this act; and provided, further, that if the issuance of any such refunding notes 30
results in any amount of such temporary notes outstanding at any one time in excess of the amount 31
of bonds which may be issued under this act, the proceeds of such refunding notes shall be deposited 32
in trust in a separate fund established for the notes being refunded. Pending their use to pay the 33
notes being refunded, monies in the fund shall be invested for the benefit of the town by the paying 34
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agent at the direction of the town finance director in any investment permitted under section 6. The 1
monies in the fund and any investments held as part of the fund shall be held in trust and shall be 2
applied by the paying agent solely to the payment or prepayment of the principal of and interest on 3
the notes being refunded. Upon payment of all principal of and interest on the notes, any excess 4
monies in the fund shall be distributed to the town. The town may pay the principal of and interest 5
on notes in full from other than the issuance of refunding notes prior to the issuance of bonds 6
pursuant to section 1 hereof. In such case, the town's authority to issue bonds or notes in anticipation 7
of bonds under this act shall continue provided that: (1) The town council passes a resolution 8
evidencing the town's intent to pay off the notes without extinguishing the authority to issue bonds 9
or notes; and (2) That the period from the date of an original note to the maturity date of any other 10
note shall not exceed five (5) years. 11
SECTION 5. Pending any authorization or issue of bonds hereunder or pending or in lieu 12
of any authorization or issue of notes hereunder, the town finance director, with the approval of the 13
town council, may, to the extent that bonds or notes may be issued hereunder, apply funds in the 14
treasury of the town to the purposes specified in section 3, such advances to be repaid without 15
interest from the proceeds of bonds or notes subsequently issued or from the proceeds of applicable 16
federal or state assistance or from other available funds. 17
SECTION 6. Any proceeds of bonds or notes issued hereunder or of any applicable federal 18
or state assistance, pending their expenditure may be deposited or invested by the town finance 19
director in demand deposits, time deposits or savings deposits in banks which are members of the 20
Federal Deposit Insurance Corporation or in obligations issued or guaranteed by the United States 21
of America or by any agency or instrumentality thereof or as may be provided in any other 22
applicable law of the State of Rhode Island or resolution of the town council or pursuant to an 23
investment policy of the town. 24
SECTION 7. Any accrued interest received upon the sale of bonds or notes hereunder shall 25
be applied to the payment of the first interest due thereon. Any premium arising from the sale of 26
bonds or notes hereunder shall, in the discretion of the town finance director, be applied to the cost 27
of preparing, issuing and marketing bonds or notes hereunder to the extent not otherwise provided, 28
to the payment of the project costs, to the payment of the principal of or interest on bonds or notes 29
issued hereunder or to any one or more of the foregoing. The cost of preparing, issuing and 30
marketing bonds or notes hereunder may also, in the discretion of the town finance director, be met 31
from bond or note proceeds exclusive of accrued interest or from other monies available therefor. 32
Any balance of bond or note proceeds remaining after payment of the cost of the projects and the 33
cost of preparing, issuing and marketing bonds or notes hereunder, shall be applied to the payment 34
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of the principal of or interest on bonds or notes issued hereunder. To the extent permitted by 1
applicable federal laws, any earnings or net profit realized from the deposit or investment of funds 2
hereunder may, upon receipt, be added to and dealt with as part of the revenues of the town from 3
property taxes. In exercising any discretion under this section, the town finance director shall be 4
governed by any instructions adopted by resolution of the town council. 5
SECTION 8. All bonds and notes issued under this act and the debts evidenced thereby 6
shall be obligatory on the town in the same manner and to the same extent as other debts lawfully 7
contracted by it and shall be excepted from the operation of § 45-12-2. No such obligation shall at 8
any time be included in the debt of the town for the purpose of ascertaining its borrowing capacity. 9
The town shall annually appropriate a sum sufficient to pay the principal and interest coming due 10
within the year on bonds and notes issued hereunder to the extent that monies therefor are not 11
otherwise provided. If such sum is not appropriated, it shall nevertheless be added to the annual tax 12
levy. In order to provide such sum in each year and notwithstanding any provision of law to the 13
contrary, all taxable property in the town shall be subject to ad valorem taxation by the town without 14
limitation as to rate or amount. 15
SECTION 9. Any bonds or notes issued under the provisions of this act, and coupons, if 16
any, if properly executed by officers of the town in office on the date of execution, shall be valid 17
and binding according to their terms notwithstanding that before the delivery thereof and payment 18
therefor any or all of such officers shall for any reason have ceased to hold office. 19
SECTION 10. The town, acting by resolution of its town council, is authorized to apply 20
for, contract for and expend any federal or state advances or other grants or assistance which may 21
be available for the purposes of this act, and any such expenditures may be in addition to the monies 22
provided in this act. To the extent of any inconsistency between any law of this state and any 23
applicable federal law or regulation, the latter shall prevail. Federal and state advances, with interest 24
where applicable, whether contracted for prior to or after the effective date of this act, may be 25
repaid as project costs under section 3. 26
SECTION 11. Bonds and notes may be issued under this act without obtaining the approval 27
of any governmental agency or the taking of any proceedings or the happening of any conditions 28
except as specifically required by this act for such issue. In carrying out any project financed in 29
whole or in part under this act, including where applicable the condemnation of any land or interest 30
in land, and in the levy and collection of assessments or other charges permitted by law on account 31
of any such project, all action shall be taken which is necessary to meet constitutional requirements 32
whether or not such action is otherwise required by statute, but the validity of bonds and notes 33
issued hereunder shall in no way depend upon the validity or occurrence of such action. 34
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SECTION 12. The town finance director and the president of the town council, on behalf 1
of the town, are hereby authorized to execute such instruments, documents or other papers as either 2
of them deem necessary or desirable to carry out the intent of this act and are also authorized to 3
take all actions and execute all instruments, documents or agreements necessary to comply with 4
federal tax and securities laws, which instruments, documents or agreements may have a term 5
coextensive with the maturity of the bonds authorized hereby, including Rule 15c2-12 of the 6
Securities and Exchange Commission (the "Rule") and to execute and deliver a continuing 7
disclosure agreement or certificate in connection with the bonds or notes in the form as shall be 8
deemed advisable by such officers in order to comply with the Rule. 9
SECTION 13. All or any portion of the authorized but unissued authority to issue bonds 10
and notes under this act may be extinguished by ordinance of the town council after seven (7) years 11
shall have passed from the approval of this act provided for in section 14, without further action by 12
the general assembly. 13
SECTION 14. The question of the approval of this act shall be submitted to the qualified 14
voters of the town at a local election to be held on May 2 November 7, 2023. The question shall be 15
submitted in substantially the following form: "Shall an act passed at the 2023 session of the general 16
assembly entitled 'AN ACT AUTHORIZING THE TOWN OF MIDDLETOWN TO ISSUE NOT 17
TO EXCEED $190,000,000 GENERAL OBLIGATION BONDS, NOTES AND OTHER 18
EVIDENCES OF INDEBTEDNESS TO FINANCE THE CONSTRUCTION, FURNISHING 19
AND EQUIPPING OF A MIDDLE SCHOOL AND HIGH SCHOOL AND THE RENOVATION, 20
IMPROVEMENT, ALTERATION, REPAIR, FURNISHING AND EQUIPPING OF SCHOOL 21
FACILITIES THROUGHOUT THE TOWN AND ALL ATTENDANT EXPENSES 22
INCLUDING, BUT NOT LIMITED TO, DEMOLITION, ENGINEERING, ARCHITECTURAL 23
AND LANDSCAPING COSTS ; PROVIDED THAT, THE AUTHORIZATION SHALL BE 24
REDUCED BY THE AMOUNT OF CERTAIN GRANTS RECEIVED FROM STATE BOND 25
PROCEEDS, FROM THE RHODE ISLAND DEPARTMENT OF EDUCATION OR FROM THE 26
RHODE ISLAND SCHOOL BUILDING AUTHORITY' be approved?" and the w arning for the 27
election shall contain the question to be submitted. From the time the election is warned and until 28
it is held, it shall be the duty of the town clerk to keep a copy of this act available at the clerk's 29
office for public inspection, but the validity of the election shall not be affected by this requirement. 30
To the extent of any inconsistency between this act and the town charter, this act shall prevail. 31
Notwithstanding anything contained in § 17-19-7 of the general laws to the contrary, the town's 32
board of canvassers may certify the question to the secretary of state not later than thirty (30) days 33
prior to the date set for the election. 34
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SECTION 15. This section and section 14 shall take effect upon the passage of this act. 1
The remainder of this act shall take effect if a majority of those voting on the question prescribed 2
by section 14 shall vote in favor thereof. 3
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EXPLANATION
OF
A N A C T
AUTHORIZING THE TOWN OF MIDDLETOWN TO ISSUE NOT TO EXCEED
$190,000,000 GENERAL OBLIGATION BONDS, NOTES AND OTHER EVIDENCES OF
INDEBTEDNESS TO FINANCE THE CONSTRUCTION , FURNISHING AND EQUIPPING
OF A MIDDLE SCHOOL AND HIGH SCHOOL AND THE RENOVATION,
IMPROVEMENT, ALTERAT ION, REPAIR, FURNISHING AND EQUIPPING OF SCHOOL
FACILITIES THROUGHOUT THE TOWN AND ALL ATTENDANT EXPENSES
INCLUDING, BUT NOT LIMITED TO, DEMOLITION, ENGINEERING, ARCHITECTURAL
AND LANDSCAPING COST S; PROVIDED THAT, THE AUTHORIZATION SHALL BE
REDUCED BY THE AMOUN T OF CERTAIN GRANTS RECEIVED FROM STATE BOND
PROCEEDS, FROM THE RHODE ISLAND DEPARTME NT OF EDUCATION OR FROM
THE RHODE ISLAND SCHOOL BUILDING AUTHORITY
***
This act authorizes the town of Middletown to issue not more than $190,000,000 bonds 1
and notes to finance the construction furnishing and equipping of a middle school and high school 2
and the renovation, improvement, alteration, repair, furnishing and equipping of school facilities 3
throughout the town and all attendant expenses including, but not limited to, demolition, 4
engineering, architectural and landscaping costs; provided that, the authorization shall be reduced 5
by the amount of certain grants received from state bond proceeds, from the Rhode Island 6
department of education ("RIDE") or from the Rhode Island school building authority. 7
Sections 14 and 15 of this act would take effect upon passage. The remainder of the act 8
would take effect if a majority of those voting on the question prescribed by section 14 would vote 9
in favor thereof. The amount of borrowing authorized pursuant to this act would be reduced by the 10
amount of certain grants actually received by the town from state bond proceeds, from RIDE or 11
from the Rhode Island school building authority. 12
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