SENATE, No. 1625

SECTION 1. The City of Taunton is hereby authorized to issue bonds or notes from time to time for the purpose of funding all or a portion of the unfunded pension liability, so called, of the retirement system of the City of Taunton.  Bonds or notes issued hereunder shall be outside the limit of indebtedness prescribed in Section 10 of Chapter 44 of the General Laws, shall be issued for terms not in excess of 30 years from their date of issue and, except as otherwise provided herein, shall be subject to the applicable provisions of said Chapter 44.   The aggregate amount of bonds or notes which may be issued by the City of Taunton hereunder, shall not exceed the amount which the Retirement Board of the City of Taunton, with the approval of the City’s Chief Financial Officer, treasurer, and mayor, shall determine to be necessary to be issued to fund the unfunded pension liability of the retirement system of the City of Taunton as of a particular date and to provide for issuance costs and other expenses necessary or incidental thereto.  Such determination of the retirement board of the City of Taunton of the unfunded pension liability shall be based upon the report of a nationally recognized independent consulting firm, which shall be acceptable to the Public Employee Retirement Administration Commission, and which may be the consulting actuary generally retained by the retirement board of the city.

SECTION 2.  The maturities of bonds or notes issued hereunder (i) shall be arranged so that for each issue the annual combined payments of principal and interest shall be as nearly equal as practicable, in the opinion of the treasurer and mayor, or in accordance with a schedule providing for a more rapid amortization of principal, or (ii) shall be arranged so that for each issue the annual combined payments of principal and interest shall be in amounts specifically approved by the secretary for administration and finance.

SECTION 3.  Proceeds of any bonds or notes issued hereunder (other than amounts to be applied to issuance costs or other expenses) shall be paid by the City of Taunton to the Retirement Board of the City of Taunton, 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 City of Taunton in accordance with law.

SECTION 4.  Prior to the issue of any bonds or notes hereunder the City of Taunton shall submit to the executive office for administration and finance a plan showing the amount of the bonds and notes to be issued, the amount of the unfunded pension liability to be funded with the proceeds of the bonds and notes, the proposed maturity schedule of the bonds and notes, the proposed allocation of, if any, and plan to finance the principal of and interest on the bonds and notes, the present value savings reasonably expected to be achieved as a result of the issue of the bonds or notes, and any other information requested by the secretary for administration and finance relating to the bonds and notes and no bonds or notes shall be issued hereunder until the secretary has approved said plan and specifically approved the maturity schedule of the bonds or notes if required by Section 2 hereof.  In granting said approval, the secretary shall require the establishment of a reserve to be created from a portion not to exceed 60 percent 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 City and shall be separate from any other reserve or fund of the City 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 such funds or portions thereof shall be transferred to the City treasury.  Any funds in the reserve shall be trust funds within the meaning of Section 54 of Chapter 44 of General Laws and, expected as otherwise provided in this act, shall be subject to the provision of said Section 54.

SECTION 5.  If the unfunded pension liability to be funded with the proceeds of an issue of bond or notes issued hereunder relates in part to employees of a governmental unit other than the City of Taunton, each such governmental unit shall be responsible for reimbursing the City of Taunton for such proportion of the annual debt service expense paid by the City of Taunton for bonds and notes issued hereunder as is equal to the proportion of the total unfunded pension liability to be funded with the proceeds of the bonds or notes as relates to that governmental unit. Notwithstanding the provisions of 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 the General Laws as the amount necessary to be paid by each such governmental unit other than the City of Taunton by each such governmental unit’s proportionate share of the annual debt service expense as determined herein.  The City of Taunton shall have the same legal rights and authority as the Retirement Board of the City of Taunton to collect any amount so assessed to any such governmental unit only if the Retirement Board fails to collect such assessment in a timely manner.

SECTION 6.  Notwithstanding the provisions of Chapter 70 of the General Laws or the provisions of any other general or special law to the contrary, the portion of the annual debt service paid by the City of Taunton for bonds or notes issued hereunder applicable to school department personnel who are members of the City’s Retirement System, shall be included in the computation of net school spending for the purposes of said Chapter 70 or any other provision of law.

SECTION 7.  This act shall take effect upon its passage.