City Council, January 25, 1993.
A Special Session of the City Council is held Monday, January 25, 1993, at seven five o’clock p.m. in the City Council Chamber. All the members are present except Councilors Clement and Rabbitt; President Barry presides.
Council President Barry recognizes Mayor Robert E. Metivier, who reads a prepared statement, which is made part of the Record.
Mr. Rahill states that the Synchronization Bond will not cover the City’s current bonded indebtedness. He states the handout shows that the projections by the Finance Department include new borrowing of approximately $4 Million per year. He states that bonds which are approved each year are not necessarily spent that year. He states that the City has been averaging about $2.5 Million a year in new bonding. He states that Synchronization will save the City money because it will eliminate the need for the discount on taxes and eliminate short term borrowing.
COUNCILOR RABBITT ARRIVES AT 7:13 PM.
Mayor Metivier then introduces Joseph Walsh, former Mayor of Warwick.
Mayor Walsh states that in 1981 when the City of Warwick synchronized it cost them $1.6 Million in interest on TANS. He estimates that if they had not synchronized it would cost between $3 Million to $3.5 Million this year. He states that the bond rating in Warwick went up three times after the deficit was eliminated and the City became synchronized. He states that the City had a Citizens Watchdog Committee on Financial matters who supported the synchronization effort and went out and promoted it to the public. He states that the referendum passed by a ratio of 14 to 1. He states that it is the fiscally responsible thing to do, because without synchronization the City is constantly paying interest on short term borrowing with nothing to show for it.
Upon questioning from Council President Barry, Mr. Walsh states that the City has grown tremendously from 1983-1989; however, with or without the growth, synchronization was necessary. He also states that the Watchdog Committee recommended synchronization in March of 1979 and it was on the ballot in November of 1979.
Mr. Hunt notes that the cost to synchronize gets larger every year. He states that it makes sense to synchronize when the interest rates are smaller. He believes that if it is the only issue on the ballot, and it supported by the Council and the Mayor, then adequate information can get out to the public in time to educate the voters on this matter. He states that he would hate to see a problem with past budgets and audits get in the way of the synchronization issue.
Mayor Metivier then introduces Domenic Mitchroney, Executive Director of the Northern Rhode Island Chamber of Commerce. Mr. Mitchroney states that the Chamber, RIPEC, and the Committee studying the management of the City of Pawtucket, unanimously recommended synchronization in the "RIPEC Report." He also believes that the issue can pass if the Council approves it regardless of the shortness of time between now and the election.
On the question of controls on spending, he believes that if the City implements the recommendations in the RIPEC Report, the City should be able to keep costs down. He states that all financial experts believe that interest rates will probably be increasing in a short period of time. Finally, he states that the City should be prepared to spend bond money in the future on infrastructure repairs. He believes that a $4 Million projection per year is appropriate.
Mayor Metivier then introduces A1 Papineau, a Member of the Synchronization Committee.
Mr. Papineau states that he worked in East Providence prior to coming to Pawtucket. He says that both cities are not synchronized and that makes it very difficult to figure out an accurate tax levy. He says that when he was Finance Director of Pawtucket, he was concerned about synchronization but could not sell it because the City at that time was able to borrow money and then invest it to make money for the City.
Mr. Rahill states that the federal government has stopped allowing communities to do that.
COUNCILOR CLEMENT ARRIVES AT 8:35 PM.
Mr. Papineau states that it is easier to determine the levy and the collection rate in a synchronized system. He states the actual cost to synchronize is $34 Million, the rest of the bond issue is paying for deficits. He believes that it is most important to synchronize. He believes that the City’s "A" rating will be lost if it does not synchronize.
He states that he cannot imagine how there will be no tax increase in Fiscal Year 1994. He believes that there should be a small tax increase every year because of cuts in state aid and inflation. He says the City needs to shrink its budget.
He says that only two cities still offer the discount on taxes; those being East Providence and Pawtucket. He says it is a thing of the past.
Mayor Metivier states that the bond issue will be for a period of fifteen years and they are looking at an interest rate of approximately 6.2%.
There are not other speakers.
The following resolution is read and passed on a roll call vote, as follows:
Ayes - President Barry, Councilors Bray, Calista, Clement, Doyle, Kinder, Moran, Rabbitt and Vieira.
Noes - 0.
The following resolution is LAID ON THE TABLE on a unanimous voice vote:
RESOLUTION REQUESTING THE GENERAL ASSEMBLY TO GIVE FAVORABLE CONSIDERATION TO THE CITY’S BOND LEGISLATION.
The following Ordinance is read for the second time, and passed on a roll call vote, as follows:
Ayes - President Barry, Councilors Bray, Calista, Clement, Doyle, Kinder, Moran and Vieira.
Noes - Councilor Rabbitt.
Upon Motion made by Councilor Vieira, seconded by Councilor Kinder, the meeting is adjourned at eight fifty o’clock p.m.