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Connecticut Special Acts 1996

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Senate Bill No. 705

SPECIAL ACT NO. 96-3

AN ACT AUTHORIZING THE CITY OF WATERBURY TO ISSUE CERTAIN BONDS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. As used in this act:

(1) "Act" means the provisions of sections 1 to 11, inclusive, of this act.

(2) "City" means the city of Waterbury.

(3) "Mayor" means the mayor of the city of Waterbury.

(4) "Board of aldermen" means the board of aldermen of the city of Waterbury.

(5) "Deficit" means with respect to the general fund of the city, any cumulative excess of expenditures, encumbrances, or other uses of funds for any fiscal year and all prior fiscal years over revenues of the city for such period and the prior year's undesignated fund balance, as reflected in the most recent audited financial statements of the city. For purposes of determining such excess, revenues shall not include the proceeds of tax anticipation notes.

(6) "Deficit funding bond" means any bond with a term of more than one year and having a term of up to ten years or any note issued in anticipation thereof to finance the city's cumulative fund balance deficit, or to finance a projected cumulative fund balance deficit, and including costs of issuing and securing deficit funding bonds.

(7) "Cumulative fund balance deficit" means the cumulative excess of expenditures, encumbrances or other uses of funds over cumulative available revenues for all prior fiscal years, as determined by independent auditors and as rounded to the nearest five thousand dollars. For purposes of determining such excess, revenues shall not include the proceeds of tax anticipation notes and expenditures shall not include any principal payment of tax anticipation notes.

(8) "Projected cumulative fund balance deficit" means the projected cumulative excess of expenditures, encumbrances or other uses of funds over the projected cumulative available revenues for the fiscal year ending June 30, 1996, and including all prior fiscal years. For purposes of determining such excess, revenues shall not include the proceeds of tax anticipation notes and expenditures shall not include any principal payment of tax anticipation notes.

(9) "Revenue intercept" means the collection and deposit for the benefit of bondholders of some or all revenues received by the city as may be established by resolution adopted pursuant to section 3 of special act 93-25.

Sec. 2. The board of aldermen may by resolution approved by a majority of its members authorize the issuance and sale of deficit funding bonds and interim funding obligations issued in anticipation of deficit funding bonds in one or more series and in principal amounts not exceeding in the aggregate twenty million dollars or such greater amount as is established as the finally determined projected cumulative fund balance deficit, as determined by an audit conducted in accordance with generally accepted accounting principles, consistently applied, plus costs of issuing and securing deficit funding bonds and interim obligations issued in anticipation thereof, to eliminate the cumulative fund balance deficit and the projected cumulative fund balance deficit in its general fund, its special revenue funds and its capital projects funds, for fiscal years ending on or before June 30, 1996. Any renewals of such interim funding obligations issued in anticipation of deficit funding bonds shall not be cumulative as to the maximum authorized amount of borrowings pursuant to this act and shall not be subject to the provisions of the general statutes imposing time limitations on the renewal of temporary borrowings. Any issuance of bonds to permanently finance any previously issued interim funding obligations issued in anticipation of deficit funding bonds shall also not be cumulative as to the maximum authorized amount of borrowings pursuant to this act. Such resolution shall be effective upon passage, so that such bond or other obligations may be sold immediately thereafter, and shall not be subject to any additional city charter provision which may otherwise apply to the authorization of such bonds or other obligations after their approval by the board of aldermen. Notwithstanding the provisions of Section 1501(d) of the city charter or any other provision of law, such bonds and obligations may be sold by public sale or sealed proposal, by negotiation or by private placement as the mayor deems to be in the best interest of the city and in accordance with section 5 of this act.

Sec. 3. (a) There is hereby established a Waterbury budget advisory council. The council shall consist of three members each with significant municipal, accounting, financial or governmental expertise and each of whom shall serve for a term of three years, or until their successors are appointed. The Governor and the Mayor shall each appoint one member and the president pro tempore of the Senate and the speaker of the House of Representatives shall jointly appoint the third member. On expiration of the original term, or if a vacancy on the budget advisory council occurs, a replacement shall be appointed in the same manner as the initial appointments. The city may consult with the budget advisory council in the development of its budget, and shall cause its budget, as approved by the board of aldermen pursuant to the city charter, to be delivered to the budget advisory council the day following adoption. The budget advisory council shall review the budget with respect to determining whether budgeted expenditures are reasonable and accurate estimates of the expected expenditures of the city, and whether budgeted revenues are reasonable and accurate estimates of expected revenues, and if so, whether budgeted revenues are at least equal to budgeted expenditures.

(b) The members of the council may be compensated in the manner and amount determined by the Secretary of the Office of Policy and Management. The council shall adopt procedures for the conduct of its meetings and exercise of the powers, duties and functions conferred upon it by this act and shall not be subject to the provisions of chapter 54 of the general statutes. All decisions of the council shall be by affirmative vote of a majority of its members. All expenses of the council shall be paid by the city and may be paid from the proceeds of any deficit funding bonds issued pursuant to this act.

(c) The budget advisory council shall have the following powers, duties and functions: (1) It shall review and approve or disapprove the city's annual budget, commencing with the annual budget for the first full fiscal year next succeeding the establishment of the council, regardless of whether any such budget has previously been approved in accordance with the city charter. If the budget advisory council disapproves or fails to approve any annual budget within ten business days after submission by board of aldermen of a budget approved by the board of aldermen, the board of aldermen may by majority vote of its members establish such budget as an interim budget and a tax rate may be established based thereon. Such interim budget shall take effect as of the commencement of the fiscal year and shall remain in effect until the city submits and the budget advisory council approves a modified budget. The city and any of its administrative units shall supply the budget advisory council with such financial reports, data, audits, statements and any other records or documentation as the budget advisory council may require to exercise its powers and to perform its duties and functions. (2) It shall review and approve or disapprove each financial plan prepared by the city in connection with the proposed issuance of deficit funding bonds, which financial plan shall be for a period of not less than three years, which financial plan shall be submitted on an annual basis, and all subsequent modifications on the financial plans submitted by the city. Such modifications shall be submitted at such times as the council shall designate. (3) It shall, after the initial approval of a financial plan and an annual budget, regularly reexamine such plan and budget in consultation with the city and may require the city to provide a modified financial plan or modified annual budget, or both, within such reasonable time period as the council may require, not to exceed sixty days. For purpose of this review, the city shall submit, on a monthly or quarterly basis as requested by the council, reports of its current flow cash revenues and expenditures. If the city fails to make acceptable modifications to the financial plan or annual or interim budget within such time period, the council shall make such modifications as it deems appropriate to such plan or budget. (4) It shall review and approve or disapprove the proposed terms of any deficit funding bonds or interim funding obligations issued in anticipation of deficit funding bonds to be issued pursuant to this act.

(d) The budget advisory council shall remain in existence and exercise the powers, duties and functions granted to it by this act only until such time as the operating funds of the city shall have been in balance or with a surplus for three consecutive fiscal years in accordance with audits conducted on a generally accepted accounting principles basis, consistently applied.

Sec. 4. The authorizing resolution for any deficit funding bonds or interim funding obligations issued in anticipation of deficit funding bonds shall contain provisions regarding the establishment of a program to intercept revenues and to apply such revenues, to the extent necessary, to the payment of debt service on any deficit funding bonds and interim funding obligations issued in anticipation of deficit funding bonds and any other outstanding general obligation bonds, notes or other borrowings of the city in combination with or in addition to the intercept program established by the city for the refunding bonds pursuant to section 3 of special act 93-25, and to establish and maintain reserves, sinking funds or other funds and accounts in order to ensure timely payment of principal and interest on all outstanding obligations of the city. Deficit funding bonds and other bonds, notes or other obligations the city is authorized to issue under its charter and the general statutes may be issued subject to the intercept established by special act 93-25. The resolutions providing for the issuance of deficit funding bonds, or other bonds, notes or other obligations authorized to be issued may provide for the application of the intercept procedure established by special act 93-25 for refunding bonds.

Sec. 5. Notwithstanding any other provision of law, resolutions authorizing the issuance of deficit funding bonds may delegate to the mayor and the comptroller of the city the authority to determine the terms and conditions of bonds issued pursuant to this act, including, but not limited to, the date, interest rate or rates, prices, maturities, form and manner of sale, provided any deficit funding bonds issued pursuant to this act shall mature not later than ten years from date of issuance.

Sec. 6. Bonds and interim obligations issued pursuant to this act shall constitute the legal, valid and binding obligations of the city for which the full faith and credit of the city shall be pledged to the payment of the principal thereof and the interest thereon.

Sec. 7. The provisions of this act are in addition to and not in limitation of any borrowing authority granted to the city under any public act, special act or charter provision.

Sec. 8. The state of Connecticut does hereby pledge to and agree with the holders of deficit funding bonds or interim funding obligations issued in anticipation of deficit funding bonds that the state will not limit or alter the provisions of this act governing the obligations until such obligations, together with the interest thereon, are fully met and discharged, provided nothing contained in this act shall preclude such limitation or alteration if and when adequate provisions shall be made by law for the protection of the holders of deficit funding bonds or interim funding obligations issued in anticipation of deficit funding bonds.

Sec. 9. If, at any time, the city has failed to lay necessary taxes or to lay a tax which, in addition to the other estimated yearly income of the city, is sufficient to pay the current expenditures of such city, the board of aldermen may make a rate bill upon its list applicable to such fiscal year for the amount necessary, or for an amount sufficient, to pay all or a portion of the deficit in such current expenditures, and cause the same to be collected as due.

Sec. 10. The provisions of this act shall supersede any provisions of the general statutes, any public or special act and the charter of the city enacted prior to or subsequent to this act other than a subsequent act of the General Assembly which specifically states that it supersedes this act.

Sec. 11. This act shall take effect upon an affirmative vote of a majority of the membership of the board of aldermen to invoke the provisions of this act in its entirety.

Approved April 17, 1996. Effective as provided in section 11.

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