Be it enacted by the Senate and House of Representatives
in General Court assembled, and by the authority of the same,
SECTION 1. Notwithstanding the provisions of chapter forty-four of the General Laws to the contrary, the maturities of bonds issued by the city of Peabody for extending or enlarging its municipal light plant shall be either arranged so that for each issue the annual combined payments of principal and interest payable in each year, commencing with the first year in which a principal payment is required, shall be as nearly equal as practicable in the opinion of the city treasurer, or shall be arranged in accordance with a schedule providing for a more rapid amortization of principal. The first payment of principal of each issue of bonds shall not be later than one year from the date of issue or one year from the estimated date of commencing regular operation of the projects being financed by that issue, as determined by the manager of the municipal light plant. Project costs to be financed by the issue of the bonds may include the funding of reserves for debt service or other expenses, and may also include interest incurred on any bonds 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 being financed by the issue, as determined by the manager of the municipal light plant. Net earnings derived from investment of the proceeds of the bonds may be expended by the city treasurer to pay interest on the bonds but otherwise shall be used only for construction, equipping, operation or maintenance of the electric system of said city. Except as otherwise provided in this act indebtedness incurred by said city for such projects shall be subject to the applicable provisions of said chapter forty-four.
SECTION 2. The treasurer of the city of Peabody is hereby authorized to establish a debt service fund and a debt service reserve fund, which may be pledged to the payment of bonds issued by the city for municipal light plant purposes. The moneys in each fund 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, may be used without further authorization or appropriation by the city to pay principal, redemption premium if any, and interest on any general obligation bonds of the city issued for municipal light plant purposes for the payment of which the fund is pledged. Accrued interest received upon the sale of such bonds and the proceeds of such bonds representing capitalized interest on the bonds shall be deposited in the debt service fund. Commencing twelve months plus one business day before each principal installment becomes due on bonds for which a debt service fund is established under this act and six months plus one business day before the installment of interest becomes due, there shall also be deposited in the debt service fund each month from the revenues and receipts of the municipal light plant, 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 other than annually, any interest payable less than six months from the date of issuance of any bonds or other than at six months' intervals, and any redemption of bonds, so that there will 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 and so that accrued or capitalized interest will be applied to the installments of interests 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 for the payment of which such 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 any available moneys shall provide moneys sufficient at all times to make the required payments to any debt service fund and any debt service reserve fund established under this act as they come due, and to satisfy all other obligations to be paid from its municipal light plant revenues in a timely fashion.
SECTION 3. This act shall take effect upon its passage.