Special Committee on Ways & Means Tuesday 7/14/2026

Chair Sanchez.

Present.

Vice Chairman Taylor, absent, Councillor Davidson. Here, Councillor Blake Gray is absent, Councillor Petersen. We have three present and two absent, we have four.

Thank you. Can we please read item one to the record, please?

Resolution authorizing the city of Providence to issue not to exceed $140,000,000 general obligation bonds, notes and other evidences of the indebtedness to finance the construction, renovation, improvement, alteration, repair, landscaping, furnishing and equipping of schools and school facilities in Rapid City, subject to approval of state housing aid at a reimbursement rate or state share ratio of not less than 75% at the time of issuance and provided that the authorization shall be reduced by the amount of certain grants received from state bond proceeds from the Rhode Island Department of Education or from the Rhode Island School Building Authority.

I'm sorry, I was going wrong. I

we are experiencing item one and two at the

same time, if that makes sense, Chief Roy? Yes. Are you ready a motion for that? Sure. Gonna entertain a motion to take item one and two at the time.

Second. Motion made by Councillor Peterson, second by Councillor Peterson, all in favor. Aye. Any nays? Any abstention?

Any discussions? The ayes have it. We'll take item one and two at the same time. It looks like we have exhibit. At this time, I want to state a motion to enter this into the record as exhibitor along with specifics.

Thank you so much, Laphroa, it is yours.

Thank you, Mr. Chairman. I was in the committee this evening for your consideration. These were introduced at the July 2 meeting and whereas you know, we're pretending to be here sooner and hopefully we can catch by 10:50 next to the city council. It's my understanding that that will happen, but the purpose of tonight's discussion, including if it's people to get out of committee with your consideration, that's a good first step.

And if there's another opportunity to consider this before your recess with due respect, it would save us about seven weeks of background work that is necessary to do any bond issue, including the retention of underwriter and all the necessary steps to go with that. If that was to occur, we would be looking at a closing on the CIP bond that we call the one from the public building authority item number two, possibly sometime before September.

Oh, chief. I'm sorry. Please reply to the rehab councilor Albanjo on the list. Sure. I'm just

so happy to wait. Repeating anything. Be happy to wait.

Let the record reflect that councilor Graves has joined us.

So noted.

Just so you're aware, councilor Graves, chief Panzini is currently just just to begin his presentation with two items that we're being in the statement.

I think there goes a new thank you, Thank you, Jim. So we're again that was in the committee. You had to pay before this evening. Originally, was a tenant we heard sooner. If the committee hadn't been able to do so and it would have lined up with your next meeting of the full council and would have required at least single passage.

In that regard, this is in regards to item one is the $140,000,000 school bond. This bond was already getting voted through in November 2020. The importance of this $140,000,000 bond is that we did not need to draw upon it any sooner, but as we approach the summit, as we move through the next complete year, the 140,000,000 proceeds of which will be used to assist with the completion of all phase two projects, including projects that have been already underway, including Kennedy School, Mount Pleasant, Lena School and other schools that we regularly Fogarty School, Pizz Airy School, Messer and again Mount Pleasant Hilli College and Career projects that we regularly see before the school building committee. And this 140,000,000 will continue the cash flow necessary for those projects. Item number two, the CIP bond as we're calling it is gonna be issued to the public building authority.

They did give their preliminary approval at last Thursday's public building authority meeting. Again, subject to this hearing before the Ways and Means Committee, that bond at 26,500,000 will be used to price all of the projects that were recently approved under the two year most recent version of the comprehensive improvement plan that the council just recently gave passage through during the budget season. So with that said, well, it's not understatement, that this may not get out of committee, but it may not get council passage until we return from your summer recess. If it could happen before your summer recess, we would save about seven weeks of preparation time, time that would be vital to underwriting and assignment of all necessary steps associated with bond issue. And again, with due respect, should that occur, that would be an anticipated closing of the CIP bond sometime before September 30 or sooner and then the school bond sometime before October 7 or sooner.

Those are the target dates that we're looking at. What you have before you in exhibits, I know we've agreed to take these together. First one is the $140,000,000 school bond. This was prepared by the city's outside fiscal advisor, Hilltop Securities. And they've done a summary of the attributes that are generally discussed with any bond issue.

So on January bond issue, if in fact it could close on October 7, that's an estimated date. The first interest payment would be 11/15/2028 out of the general fund. We be earning bond premium on this bond of $11,782,000 that bond premium along with the bond value of $140 would give us total available proceeds of $151,000,000 I draw your attention to the sheet that says sources and uses and then you'll see what those uses are. It resulted in 139,000,000, 180,000 change in the project fund, capitalized interest fund, when monies are put into the capitalized interest fund, those are the funds that are used to cover the bond indebtedness interest for the length of period based on the length of the closing interest rate is. According to our outside advisors that should cover us for approximately three years of interest only before there is an impact to any of the general fund resources to cover any of that.

And this is a typical process associated with bond

The

first principal payment that will be due is 05/15/2030. Again, approximately three years of interest only. The final maturity of this bond will be in twenty years from closing on 05/15/2046. Capitalized interest would be through 05/15/2020. The cost of issuance is expected to be around $400 and that includes legal underwriting, I'm sorry, legal and outside advisors associated with that.

The underwriters discount, that's the fee that the underwriting received for placing the bond issue amongst investors, that's roughly 2 tenths of 1%. Bond insurance, when we acquire bond insurance based on our current outstanding credit rating, bond insurance helps lower the interest cost and spares us the need to have what's called debt service reserve. With that, we're looking at today what's priced as a true interest cost of approximately 4.19%. When we closed on the $25,000,000 property acquisition bond that we closed on last month, it was by four forty four in the lower five property. I believe our closing interest rate was in the 4.35 range.

So the rate of interest is particularly slightly better. In addition to that, you'll see a schedule before you that's the schedule that approximates the debt service payments. The second document associated with this $140,000,000 bondage is going to be a calendar of dates associated with the next steps associated with all of the individual activities that occur from this discussion this evening right to a closing. Again, the closing was expected to be somewhere in the middle of the beginning of October, all things considered if we had gave it a single passage or a council meeting before the council goes on recess should that not occur it will delay it by that amount of time. Those are the various attributes associated with the bond issue including the underwriting activity, due diligence calls, rating calls with rating agencies, legal review, the distribution of the preliminary offering statement and all of the necessary steps associated with the Securities Exchange Commission.

And page two will give you the additional activity right through what was expected to be on October 7 closing again, that does not occur with a passage by the council that would extend by approximately seven weeks if you will. That covers the $140,000,000 bond issue. We're happy to take questions on that. I don't if you wish me to continue. Mr.

Chairman, members of the committee, I can discuss the 26.5.

Committee folks, is there any questions on the $140,000,000 bond?

No.

Don't think so. We we appreciate that. We we got some inspiration in advance, and then we'll give you that time to go through everything. Thank you. Just a bit of clarity, so both of these preliminary assumptions are using an assumption that we pass this at some point before the other month.

And if that does not happen then

There would be approximately six to seven weeks away. And that's on the envelope? Yes. Because there are some things that we cannot build on authority. Right.

That is engaging underwriting and having them pre priced bonds. There are some things that we can do that may that may reduce that a lifetime, but clearly without the standard being passive single passes comes to resolution, you would have difficulty in invoking any authority that would require. That makes sense.

Would we run into any, I guess, specific to the school construction month? Are are

are we running into any cash flow? No. Spoke to mister Desanter today from Bounce Construction to see if I were on that path and he said, no, this is this was expected to be closed around this time of the year. You know, we have cash resources from other prior bond issue that we're still drawing on it so we usually pay vendors, but this is most bond issues take between sixty and ninety days. So in the planning stages, this is about appropriate way it would be.

And then we would hope that we could close it initially as in the 140,000,000 would close on or about on or around October 7. And then on the day of closing, the cash proceeds arrive immediately that day there, they're available for further distribution. This seems tiny to us, even if there is that delay, if the council does not get to be ready, we're okay. We should hear.

All right. So that's good. Any questions? Can we vote for Zoom? Councilor Richardson?

Can I just know what our total med service would be with this added in?

It's so we don't specific on council. It is well within the range of our debt service capacity, both legally and fiscally because, you know, our our debt service budget is set annually. It's based upon those debt instruments that are due be to paid during that year. And then whenever there was opportunity to to advantage when a bond issue is fully matured, it drops off the city's debt schedule. That's the time when we take that opportunity to use that budgetary flexibility to recapitulate and go back into the bond market when appropriate.

So it's definitely within the range of our legal capacity as well as our fiscal ability to pay, but I don't have that number.

Okay, If you could send it to us, that'd be great. Just a curiosity. Thank you. Yes. Councilor Grier, do you have a question?

I just wanted to know which fire station are we referring to?

I'm sorry?

Which fire station I was referring to for this million dollars?

I know. I think I'm not sure I see that.

Oh,

it's in the that that that we