AN ACT AUTHORIZING THE TOWN OF ARLINTON TO ISSUE PENSION OBLIGATION BONDS OR NOTES.
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. The town of Arlington may issue, at 1 time or from time to time, bonds or notes for the purpose of funding the unfunded pension liability of the retirement system of the town. No bonds or notes, shall be issued without, for each issuance, the prior and specific approval of the board of selectmen, the treasurer, the finance committee and a 2/3 vote of town meeting. The proceeds of any such issuance, other than amounts to be applied to issuance costs and expenses, shall be transferred by the town to the retirement system, shall be allocated solely to reduce the unfunded pension liability to which the bonds or notes relate, shall be invested in any investments which are permitted under chapter 32 of the General Laws and shall otherwise be held and expended by the retirement board of the town in accordance with law. The terms of any such bonds or notes shall not exceed 30 years from the date of issuance and the amount of any such bonds or notes shall be outside the limit of indebtedness prescribed in section 10 of chapter 44 of the General Laws. Upon the authorization of the issuance of pension obligation bonds by the town meeting, the town shall submit the vote and a plan demonstrating how the town will finance and allocate the debt service associated with the bonds or notes to the executive office for administration and finance, and no bonds or notes authorized to be issued by this act shall be issued until the secretary for administration and finance has approved the plan and the issuance of such bonds or notes. Except as otherwise provided in this act, such bonds or notes shall be subject to said chapter 44.
SECTION 2. The aggregate principal amount of the bonds or notes issued during any calendar year under authority of this act shall not be greater than the amount sufficient to extinguish the unfunded pension liability of the retirement system of the town of Arlington as of a particular date as determined in accordance with this section, plus an amount to provide for issuance costs and other expenses necessary or incidental thereto. The retirement board of the town shall first determine the amount sufficient to extinguish the unfunded pension liability of the retirement system of the town in accordance with the report of a nationally recognized independent consulting firm, which may be the consulting actuary generally retained by the retirement board, and which amount shall be approved by the public employee retirement administration commission. The report shall also set forth the present value savings to the town reasonably expected to be achieved as a result of the issuance of such bonds or notes and an allocation of the unfunded pension liability of the retirement system of the town among each governmental unit the employees of which are members of the retirement system.
SECTION 3. The maturities of such bonds or notes shall be scheduled so that the annual combined payments of principal and interest for each issue shall be as nearly equal as practicable in the opinion of the treasurer and board of selectmen, in any manner that shall provide for a more rapid amortization of principal, or in accordance with any other manner consistent with the town’s approved funding schedule, as the secretary for administration and finance shall approve.
SECTION 4. Every governmental unit the employees of which are members of the retirement system of the town of Arlington shall be responsible in accordance with this section for paying such proportion of the annual debt service expense paid by the town for bonds issued under this act that is equal to the proportion of the total unfunded pension liability of the retirement system allocated to such member under section 2. Notwithstanding any general or special law to the contrary, the public employee retirement administration commission shall increase the annual amount to be certified under section 22 of chapter 32 of the General Laws, as the amount necessary to be paid by each governmental unit in the retirement system other than the town, by each such governmental unit’s proportional share of the annual debt service expense as determined herein, and shall decrease the amount to be paid by the town by an equal amount. The town shall have the same legal rights and authority as the retirement board of the town to collect any amount so assessed by the retirement board to any such governmental unit.
SECTION 5. Notwithstanding chapter 70 of the General Laws or any other general or special law to the contrary, the portion of the annual debt service paid by the town of Arlington for bonds or notes issued under this act applicable to school department personnel who are members of the town’s retirement system shall be included in the computation of net school spending for the purposes of said chapter 70 or any other law.
SECTION 6. This act shall take effect upon its passage.
Approved September 23 , 2008