Session Laws

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. Notwithstanding the provisions of chapter forty-four of the General Laws to the contrary, project costs to be financed by bonds or notes issued by the city of Holyoke for enterprise purposes may include the funding or reserves for debt service or other expenses, which reserves shall not exceed ten percent of the total loan authorization, and may also include interest incurred on any bonds or notes for a period of up to one year after the date of the original borrowing or, if later, one year after the estimated date of commencing regular operation of the project or projects being financed by the issue, as determined by the treasurer, but under no circumstances more than three years after the date of issue of the original borrowing. For the purposes of this act and section nineteen of said chapter forty-four, the term "enterprise" shall include each of the water, sewer, parking, and gas and electric department operations of said city, and the operations of any other city department or facility for which an enterprise fund is established under section fifty-three F> of said chapter forty-four. The first payment of principal of each issue of bonds or notes issued for such purposes shall be payable either in accordance with said section nineteen of said chapter forty-four or not later than one year from the estimated date of commencing regular operation of the project or projects being financed by that issue, as determined by the treasurer, but under no circumstances more than three years after the date of issue of the original borrowing. Any net earnings derived from investment of the proceeds of the bonds or notes may be expended by the city treasurer to pay interest on the bonds or notes but otherwise shall be used only for the enterprise for which the bonds or notes are issued. Except as otherwise provided in this act, indebtedness incurred by the city for such projects shall be subject to the applicable provisions of said chapter forty-four.

SECTION 2. The treasurer of the city of Holyoke is hereby authorized to establish one or more debt service funds and debt service reserve funds, which may be pledged to the payment of bonds or notes issued by the city for enterprise purposes. The moneys in each fund for each enterprise and any investments held as part of the fund shall be kept separate from the general funds of the city, shall be held in trust by the treasurer or by a corporate trustee designated by the treasurer, may be invested pursuant to section fifty-five of chapter forty-four of the General Laws, and, with the income derived from such investments, shall be used without further authorization or appropriation by the city solely to pay principal, redemption premium if any, and interest on general obligation bonds or notes of the city issued for the enterprise, as long as such bonds or notes remain outstanding. Accrued interest received upon the sale of such bonds or notes and the proceeds of such bonds or notes representing capitalized interest on the bonds or notes shall be deposited in the appropriate debt service fund. Commencing at least twelve months plus one business day before each principal installment becomes due on bonds or notes for which a debt service fund is established under this act and at least six months plus one business day before each installment of interest becomes due, there shall also be deposited in the appropriate fund each month from the revenues and receipts of the enterprise from all sources other than gifts or grants which by their terms may not be lawfully used for this purpose, an amount equal to one-twelfth of the amount needed to pay the principal installment and one-sixth of the amount needed to pay the interest installment; provided, however, that the payments to be made under this section shall be appropriately adjusted to reflect any accrued or capitalized interest deposited in the debt service fund, any investment earnings credited or losses charged to the fund, any principal installments payable less than one year from the date of issuance of any bonds or notes or other than annually, any interest payable less than six months from the date of issuance of any bonds or notes or other than at six months' intervals, and any redemption of bonds or notes, so that there shall be available on each payment date in the debt service fund the amount necessary to pay the interest and principal and redemption premium if any due or coming due on the bonds or notes and so that accrued or capitalized interest shall be applied to the installments of interest to which they are applicable. The amount in any debt service reserve fund shall not exceed ten percent of the aggregate outstanding principal amount of bonds or notes for the payment of which the fund is pledged. Subject to any limitation imposed by law, the city shall be required to fix and collect rates and charges which together with other available moneys shall provide moneys sufficient at all times to make the required payments to any debt service fund or debt service reserve fund established under this act as they come due, and to satisfy all other obligations to be paid from its enterprise revenues in a timely fashion.

SECTION 3. Except for any proceeds received during or for the fiscal year ending June thirtieth, nineteen hundred and ninety-one, the proceeds of any construction grant approved pursuant to chapter six hundred and forty-five of the acts of nineteen hundred and forty-eight for the city school projects authorized by the loan order adopted by the board of aldermen on October eighteenth, nineteen hundred and eighty-eight shall be paid directly to the trustee appointed in accordance with this section, which proceeds shall be held in trust and applied by said trustee to pay principal of and interest on the bonds issued by the city for the project. At least five days prior to each date on which a payment of principal or interest is due on bonds or notes issued for the project, the city treasurer shall deposit with the trustee the amount necessary to make that payment, after taking account of all grant proceeds or other moneys held by the trustee that are available for that purpose. Any funds to be held under this section shall be deposited with a corporate trustee, which may be any trust company or bank having the powers of a trust company within the commonwealth. The treasurer of the city with the approval of the mayor shall appoint the trustee and shall execute a trust agreement in such form as they may determine to be necessary or appropriate. Any such funds held in trust may be invested in accordance with the provisions of section fifty-five of chapter forty-four of the General Laws, and the trust agreement may provide that any investment earnings shall be applied to pay project costs, debt service on bonds or notes issued by the city for the project or trustee's fees and other related expenses.

SECTION 4. This act shall take effect upon its passage.