June 3, 1991 - Special City Council Meeting

CITY OF CENTRAL FALLS

SPECIAL CITY COUNCIL MEETING

MONDAY, JUNE 3, 1991

CITY HALL COUNCIL CHAMBERS

A Special Meeting of the Central Falls City Council was held on the above date in the Council Chambers at 8:00 P.M.

Roll Call present:

Councilman Brousseau

Councilman Charbonneau

Councilman Laroche

Councilwoman Moreau

Councilman Vaudreuil

Quorum Present.

City Council President Albert Laroche presided.

1. Naming of Members of the Central Falls School Building Committee by Resolution.

Council President Laroche explained the reason for this Resolution he stated that the present School Committee members and two Council members, himself and Councilman Vaudreuil were the members originally placed on this Committee by Resolution passed last year. He recommends that the following members be placed on the School Building Committee:

Robert Canavan

Norman Bergeron

David Bergeron

Carolyn Sheenan

Louis Paquette

These are the present School Committee members who will no longer be a School Committee as of July 1, 1991. Council President Laroche withdrew his name from the Committee list and requested that Councilman Brousseau be added in his place with Councilman Vaudreuil. He also wished to add two non voting members of the Committee, Louis Azar and Maureen Slowik to become voting members.

Motion to approve the Committee as requested by Council President Laroche was made by Councilman Charbonneau and seconded by Councilman Vaudreuil.

Discussion:

Mayor Lazieh asked that the Council not dissolve the present Committee until State discussions are completed. He remarked that there were still many details to work out and questions to be answered before the takeover of the Schools he requested that the Council take no action on this resolution at this time.

School Committee Chairman Canavan stated that Scott Wolfe suggested this Resolution.

Councilman Brousseau stated that there is not much money left in the account and perhaps it wasn't a good idea to change the committee at this time.

Mayor Lazieh commented.

Roll Call Vote on Motion:

Motion Carries 5 yes 0 no 0 abstentions 0 absent.

2. Resolution to transfer the sum of $162,110.00 from the escrow account to the School Building Account.

School Committee Chairman Robert Canavan gave a history on the School Bonds relative to the interest and the agreement between the Mayor and School Department regarding this interest. Also present from School Committee and School Department were: Maureen Chevrette, Superintendent, James Martin, Business Manager, School Committeemembers Carolyn Sheenan, David Bergeron, and former Superintendent of Schools Roland Deneault, Vincent Piccirilli, Esq. attorney for the School Department.

Mr. Piccirilli commented on Bonds and read from State Law.

Councilman Charbonneau asked questions regarding the Finance Director.

Attorney Piccirilli responded that a Resolution was signed on June 12, 1989 by Mayor Silva creating a School Building Committee.

Councilman Charbonneau asked if Finance Director had authority to transfer the money.

Attorney Piccirilli read Bond Act.

Councilman Vaudreuil commented and asked City Solicitor Muksian for his opinion.

Councilman Charbonneau asked if the Finance Director had the authority to transfer money.

City Solcitor Muksian began to reply.

Attorney Piccirilli responded by reading last paragraph of Resolution section 6.

Councilman Charbonneau asked why Building Committee didn't take action.

School Committee Chairman Canavan stated that the Finance Director acted on the advice of Bond Counsel and the City needed the money which was reimbursed to the account.

Councilman Brousseau asked about the tax exempt status of the Bonds.

Attorney Picirilli responded.

Mr. Canavan commented that the $162,000 should go back to the schools.

Attorney Picirilli remarked that bills related to this will not be payable before Oct. 1991, however, the Council must act by June 30, 1991.

Mayor Lazieh addressed the Council and stated that the City Administration has done everything possible to save as much of the tax dollars as possible and reducing the budget deficit. He stated that he had inherited a great problem and has been trying to change things around. The Mayor addressed the use of the million dollars borrowed from the Bond account and how much it saved the City by doing so. He further stated that he agreed to pay the 162,000 if additional funds came into the City, however, the City does not have 162,000 in additional funds. Mayor Lazieh explained to the Council the difficulty in selling the Bonds and the additional cost of $2,000 per day and the Bonds were not sold until November. He further commented on the extremes that the City went through to sell the bonds by going to Moody's to receive a Bond rating. He stated that the bottom line was the taxpayers and the schools all suffer. He added that the school takeover, July 1, 1991 is still being discussed and that this resolution will cost the taxpayer and increase the deficit which will have to be paid in the future. Mayor Lazieh commented that the state will take control and administer to the schools.

Council President Laroche questioned the 332,000 in escrow and asked if the 162,000 was part of the agreement.

Council asked George Muksian, City Solicitor how the Charter addresses the transfer of funds.

City Solicitor Muksian quoted from section 2-303 of the Charter and stated that the Council may transfer without the Mayor on a vote of 4-1.

Discussion ensued on this matter and City Solicitor told Council he would study the problem and give them an answer within the next half hour.

Councilman Charbonneau asked if the funds were available in the escrow account.

Edna Poulin responded and stated that this will increase the tax rate by $2.01. She passed out a fact sheet from which she explained the various expenditures regarding the bonds and the deficit projections. She stated that the cost to the City was not 1.6 million as stated by Mr. Canavan but $3,345,144 which is 103% over projected. She further explained that this bond will continue to cost the City over the next twenty years. The Finance Director, Edna Poulin explained that the finances of the City are terrible and that the biggest concern to the City was having the Bond rating of the City dropped. She stated that she felt that the deficit was workable but that the next year would be the toughest.

Councilman Charbonneau asked questions related to the deficit.

Edna Poulin stated that at the time City's Bond rating was in jeopardy.

Attorney Piccirilli asked who purchased the Bonds for the School.

Edna Poulin responded that Fleet sold them.

Attorney Piccirilli asked if Fleet was the fiscal agent for the City.

Edna Poulin responded yes.

Mayor Lazieh commented that Fleet has stood behind the City when no one else would.

Attorney Piccirilli asked who structured the Bond payments.

Edna Poulin replied that Fleet did.

Councilman Vaudreuil asked what the cost was for not selling bonds.

Edna Poulin responded $474,000.

Councilman Charbonneau asked if the Resolution is not passed would the Council be creating a bigger problem.

Chairman Canavan responded yes.

Councilman Brousseau commented.

Edna Poulin commented.

Mayor Lazieh commented.

Councilman Brousseau commented on deficit.

Edna Poulin stated that by 1993 the City would experience some financial relief.

Mayor Lazieh commented on the $162,000 and stated that he doesn't deny that it was for schools, however, he cannot recommend that it be done at this time and that it would not be a sound fiscal transfer.

Councilman Charbonneau commented.

Mr. Canavan asked the Mayor who he spoke with in regards to leasing school buildings for $1.00.

Mayor Lazieh responded that it was Scott Wolfe.

Further discussion on State ensued.

Councilman Charbonneau remarked that the Council should move on the Resolution.

Councilwoman Moreau asked how much remained in the School Building Fund.

James Martin, Business Manager responded about $40,000.00.

Councilman Vaudreuil asked how much needed to be done.

James Martin responded about $700,000.

Mayor Lazieh in summary stated that he could not recommend passage of this resolution to the City Council.

City Solicitor Muksian reported to the Council that temporary borrowing to carry on government functions is not in and of itself illegal.

Attorney Piccirilli commented.

Council President Laroche commented that question of charter has been answered and stated that he would entertain a motion.

Councilman Charbonneau motioned to approve resolution to transfer $162,110 from escrow account to school building account. Seconded by Councilman Brousseau.

Roll Call Vote:

Motion Carries 4 yes 1 no 0 abstentions 0 absent.

Councilwoman Moreau clarified her vote by stating that she can only see the taxpayer as the looser in the end and for that reason she is against this transfer.

Council President Laroche commented that the money came from the State for that purpose.

3. Resolution Supporting the Central Falls Enterprise Zone.

Read by City Clerk Daniel J. Issa.