AN ACT AUTHORIZING THE TOWN OF WAKEFIELD 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 Wakefield may issue bonds or notes from time to time for the purpose of funding all or a portion of the unfunded pension liability of the retirement system of the town. Bonds or notes issued under this act shall be outside the limit of indebtedness prescribed in section 10 of chapter 44 of the General Laws, shall be issued for terms not to exceed 30 years from the date of issuance and, except as otherwise provided in this act, shall be subject to said chapter 44. The proceeds of any issuance under this act shall be transferred by the town to the retirement system. No bonds or notes shall be issued without a 2/3 vote of the town meeting of the town of Wakefield. 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 the bonds or notes. In granting the approval, the secretary may require the establishment of a reserve to be created from a portion, not to exceed 60 per cent in any year, of the amount of the annual savings used to calculate the present value savings. Subject to the regulations established by the secretary, the reserve shall be held and controlled by the town and shall be separate from any other reserve or fund of the town allowed or required by statute. The secretary shall establish a method to calculate both the required amount of annual contribution to the reserve and the minimum value to be maintained in the reserve and shall prescribe conditions for expenditure from the reserve, including its use if necessary to prevent or limit any future unfunded actuarial pension liability, and the conditions under which all or a portion of the funds in the reserve may be available for unrestricted purposes in which case the funds or portions thereof shall be transferred to the town treasury. Any funds in the reserve shall be trust funds within the meaning of section 54 of chapter 44 of the General Laws and, except as otherwise provided in this act, shall be subject to said section 54 of said chapter 44.
SECTION 2. The aggregate principal amount of the bonds or notes issued under this act shall not be greater than the amount sufficient to extinguish the unfunded pension liability of the retirement system of the town of Wakefield as determined in accordance with this section. 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 with the approval of 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.
SECTION 3. The maturities of bonds or notes issued under this act shall be scheduled such that the annual combined payments of principal and interest for each issue shall be as nearly equal as practicable in the opinion of the selectmen, or in a manner providing for a more rapid amortization of principal, or in 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 Wakefield 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 authority of this act as 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 expense as determined in this act, 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 Wakefield 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 April 24 , 2008