§ 45-12-5.4. Cities or towns with a population greater than 125,000 inhabitants — Variable rate
obligations and interest exchange agreements.
(a) In connection with the issuance of duly authorized bonds, notes or other obligations
of a city or town with a population greater than one hundred twenty-five thousand
(125,000) inhabitants, notwithstanding any other authority to the contrary, such bonds,
notes or other obligations may be issued in the form of variable rate obligations,
so-called. In connection therewith, any such city or town, acting through its finance
director or treasurer, may enter into agreements with banks, trust companies or other
financial institutions within or without the state, whether in the form of letters
or lines of credit, liquidity facilities, insurance or other support arrangements.
Any bonds, notes or other obligations issued as variable rate obligations shall bear
such terms as may be fixed by the vote or resolution of the city or town authorizing
the bonds, notes or other obligations, or in absence of foregoing such terms as the
finance director or treasurer shall determine, including provisions for prepayment
at any time with or without premium at the option of the city or town, may be sold
at a premium or discount, and may bear interest or not and if interest bearing, may
bear interest at such rate or rates variable from time to time as determined by such
index, banking loan rate or other method specified in any such agreement. Any such
agreement may also include such other covenants and provisions for protecting the
rights, security and remedy of the lenders as may, in the discretion of the finance
director or treasurer, be reasonable and proper and not in violation of law. The finance
director or treasurer of the city or town may also enter into agreements with brokers
for the placement or marketing of any such bonds, notes or other obligations issued
as variable rate obligations.
(b) In addition, the finance director or treasurer of a city or town with a population
greater than one hundred twenty-five thousand (125,000) inhabitants, with the approval
of the city or town council, may from time to time, enter into and amend interest
rate exchange agreements, including, but not limited to, interest rate "caps,� "floors,�
"collars,� or "swaps� that the finance director or treasurer determines to be necessary
or desirable for the purpose of generating savings, managing an interest rate, or
similar risk that arises in connection with, or subsequent to or is incidental to
the issuance, carrying or securing of variable rate obligations, fixed rate bonds
or fixed rate obligations. Such interest rate exchange agreements shall contain such
provisions, including payment, term, security, default and remedy provisions, and
shall be with such parties, as the finance director or treasurer shall determine to
be necessary or desirable after due consideration to the creditworthiness of those
parties. Any municipal public buildings authority established pursuant to title 45,
chapter 50 of the general laws and any redevelopment agency operating pursuant to
title 45, chapter 31 of the general laws, which public buildings authority or redevelopment
agency has been established by a city or town with a population greater than one hundred
twenty-five thousand (125,000) inhabitants, shall also have the authority to enter
into interest rate exchange agreements as set forth in this paragraph.