I.                   NEW BUSINESS

A.    East Providence High School Building Project

1.      Approval to the Rhode Island Department of Education (RIDE) of the Stage II Application.

Superintendent Crowley comes to the podium and explains Stage I was accepted by RIDE and Stage II which they are here for now was approved by the building and school committee.  It now requires council approval.  It does not commit the city to any funding or to the schematic design which the council will view this evening.   It does allow them to negotiate with Dr. DaSilva and the associates at the department of education.   They will go back and forth and look at the demographics and the square footage allowed.  They will look at the schematic design and decide what RIDE is going to approve and the amount of money which the city will be reimbursed.  If this amount is not enough it then goes back to the building committee and they may have to eliminate some items or pay in full with no reimbursement.  This process takes about a month.  The Stage II packet has data from the district and has two separate demographic studies.   There are two schematic designs on the current site and 3 floors to the high school.   This is how it is for submission right now and those items will change as negotiations begin.  There will be a cost analysis range of $180-$190 million and this will change in a variety of ways and they will discuss the Governor’s bond proposal, inspections, asbestos study and other inspections and a number of reports as well as the schematic design.  The education plan and a financial plan with the price range as just mentioned allows them to enter into negotiations with RIDE and things will change as a result of those negotiations.  Right now the reimbursement is 54% .  The Governor’s State of the State address on Tuesday included a $500 million bond for public schools.  The first $250 million to be dispersed in the first 5 years then the second in the following 5 years.  The Governor formed a Task Force to study the Jacob Report and East Providence was one community listed as a high priority for school renovations and repairs.   All schools in RI should be warm, safe and dry and in East Providence 70 pipes burst at Myron Francis during the past cold spell.  They do repairs on a daily basis for leaks at the high school.  The high school has one science lab for 5,100 students.  The classrooms are much too small and the Task Force looked at meaningful improvements.  The Governor really wants cities and towns to take care of their infrastructure and wants to provide incentives for these.   Additional percentages added to the 54% would be 4% for ADA compliance bringing the total to 58%.  That equates to 42 cents on every dollar.  The other options are Pre K they will are proposing Pre K in the old CTC building and this would add an additional 5 points.  They are proposing moving the administration offices there as well.  This is a new 21st century model and the steam programs will add 5 points, as well as the environmentally friendly building.  The state caps it to the max of 20% points over so if all are approved and the Governor’s bond passes the total reimbursement could be as much as 74%.  That would equate to 26 cents on the dollar.  She notes that in her 42 years in education she has never seen anything of this nature come forward for public schools in RI.   They would have to go out to bond in November as the Governor does as well.  It will be retroactive for reimbursement for the city.  The RI Superintendent’s Association supports this and there are not that many districts applying for funds this year.   There are 11 districts applying and the only high school is East Providence.  The most money the city will get awarded would be this year.  The Warwick City Council rejected theirs last night so they have a second meeting.  The Superintendent handed out to Council a copy of incentives and the bonuses.  The Task Force came to the last building meeting and questions and answers were given regarding the bond and they went into the bowels of the high school.  The Governor and Treasurer have been extremely supportive of this endeavor.   The General Treasurer’s report shows East Providence as very favorable for its bonding capacity and that East Providence has more bonding capacity than city officials may realize.  The Superintendent calls Bill Fazioli to the podium.  Mr. Fazioli works for an agency which receives the reimbursement for the bonding for schools.  The agency brings with it AAA 3 rating so the city gets a bump working with them.  There is a number of times the city council will be involved in this process and can impact the bonds.  They looked at debt capacity and credit ratio and the city is within range for a city this size with this debt capacity.  

Mayor Briden asks Mr. Fazioli to work with Mr. Luba because the amount contributing to the synch fund and this amount would be a good number to work with.  The chart shows the net debt service.  They would pay a larger amount but then get reimbursed.

Mr. Fazioli states this is correct.  The city would have to bond the full amount and in making the debt service payments would get reimbursed.   Other states are moving towards payments upfront and that would be a tremendous advantage if that program was approved.  The synch number can support a certain size bond without impacting the budget and it comes very close to the portion the city would be responsible for. 

The Presentation by SMMA is provided.

Mr. Luba requests that in discussions with RIDE regarding the design if they would be able to tell the Superintendent what the total reimbursement will be.

The Superintendent states yes and that will be the next step.

Assistant Mayor Britto states one of the best ways to look at it is to take the highest amount and the lowest amount of reimbursement and then work back from there as it will give a true number.

Mr. Luba states yes that is in the analysis.

Councilman Botelho states the numbers are a little higher and based on the presentation this evening the bond amounts fall somewhere in the range they were discussing as a high and low last spring.

Mr.  Luba states yes but that was assuming the city would be bonding only the city's portion.  Right now the city will have to go out for all of it and the state would reimburse along the way.

Councilman Botelho asks if that is a cash flow issue.

Mr. Luba states it is but in the $250 million which the Governor proposed in the bond there is the potential for the state to fund the entire money upfront thereby making it lower.

Councilman Botelho asks why Mr. Fazioli’s rate information was different than the city.

Mr. Luba states by the time the city goes out for bond those could change again they could be higher or they could be lower.

Mayor Briden asks if the city would need to increase its borrowing capacity.

Mr. Luba states that if it is not upfront money and if the city had to bond the entire $190 million the city would have to increase its bonding capacity and that request would have to go to the General Assembly and it would have to be done before it goes on the ballot.  As the Superintendent stated, the bad thing is the city won't know for sure if the state bond passes until after the election and the city will need to tell the voters and explain this to them.  It will have to be a pretty big PR campaign.

Councilman Botelho asks if what he is saying is that when November rolls around they are not going to know the ratio.

Mr. Luba states they won’t know for sure but they can tell the city what it could be and what rate it will be if all goes right.

The Superintendent states they will let the city know what is approved percentage wise but they won't know if the state bond passes.

Councilman Botelho asks about the Jacob Report which was at $109 million vs the SLAM report which was at $107 million and now the total is  $180-$190 million and is the cost $450 a square foot right now?

The Superintendent states the reports weren't as extensive as what they are doing now.  She adds they doubled the gym size so it is open for the public to use which also creates revenue.   They will have a state of the art CTC which will be a model in the state and they will pay per pupil to come to East Providence if there are rooms with school choice in RI they can attend any CTC.   Those are revenue generating.

Councilman Botelho asks then if these reports are really apples to oranges.

The Superintendent states yes. 

School Committee Member Cahoon states when they did the SLAM feasibility assessment in March that $170 million was to replace in the dollar of the day there are also demo costs and soft costs for project management.  SLAM was also just for construction not furniture.  

Mayor Briden states the key is working with Mr. Fazioli and working with the administration and if looking at the city’s 5 year plan and the school’s 10 year plan and that the $2.3 which is earmarked pays for the school and would not increase the taxes annually over the next 5 years.   He asks if anyone present this evening wishes to speak against the city council approving the Stage 2 application.  Hearing none the Mayor asks if the council is ok with going forward and if no one is opposed then he requests a motion

A motion to approve the Stage II Application to RIDE is made by Councilman Botelho, seconded by Councilman Faria and on a roll call vote it is unanimous.

School Committee Member Cahoon states he just wants to thank the 12 or so people who worked on the building committee as they put in an inordinate number of hours for the city and are experts from every walk of life.   To put the school together it took hundreds of man hours so he would like to thank all who pitched and asked that they please continue to work with them.

Councilman Faria also thanked everyone.

II.                ADJOURNMENT

A motion to adjourn at 7:51Pm is made by Councilman Botelho, seconded by Councilwoman Sousa and on a roll call vote it is unanimous. 

Approved By Council:  February 6, 2018

Attest:  _______________

                   City Clerk