The sole vote against came from Councilman Ed Ladouceur, who echoed some voters’ concerns that elements of the plan, including the cost and the debt service terms, have changed. Proponents of the plan pointed to changing conditions, including inflation of costs with continued delay, as reason to move promptly. They argued delay would further dilute the bond funds’ buying power and thus the scope of the new high schools plan.
Warwick Financial Director Peder Schaefer told members of the Council that while the state has pledged to reimburse 55 percent of $314 million of the building bonds, it will not reimburse the city for any of the additional $22 million. However, Schaefer said, the city could soften the impact of the additional cost by pursuing a 30-year debt service on the bonds, instead of the originally proposed 20 year term.
Doing that will not be easy, Schaefer warned. “There’s going to be rating pressure, if we borrow this money,” he said, noting that Warwick’s OPEB liability, a long-standing challenge city leaders have only begun to address, combined with the city’s current debt, will harm the city’s financial rating, which is used to calculate rates on future bonds. “The ratings challenges are going to be significant going forward, if we decide to proceed on this,” Schaefer said.
After the meeting Council President Steve McAllister said talk of a projected cost above the $350 million is premature, since the schools have yet to be designed. “The school department would simply remove elements from their list to stay within the budget. The school department can not and will not design the schools that come in over $350 million,” McAllister said.
Peder even mentioned that state officials told him, he should not have included that line in the fiscal note, because we are so early in the process, those higher costs are easily avoidable. We all know that value engineering will happen as is customary with all projects of this size. Peder was just giving as much information as possible in his fiscal note. The school department has a $350 million budget and they will design the schools within that budget.
Now, with the extra cost, assuming that voters approve additional bonds to pay it, annual net debt service is projected at $16.4 million, or 7 percent of the current year approved tax levy of $233.9 million, Schaefer wrote In a fiscal note released to the public Thursday by Ladoceur.
“Total state reimbursement of debt service costs is now limited to 38.8% because of increased project costs and the limits on total state reimbursement. That figure is 43.8% excluding the Ellana projected cost increases,” Schaefer said in the note.
Speakers urging the council to hold the bond funds and make a second voter referendum on the project accounting for increased costs included Rob Cote, who said the more expensive project would result in losing elements used to sell the public on the idea.
“We were sold a product that we’re not going to get.” Cote said during the Council’s finance committee meeting at 5 p.m. before the 7 p.m. regular meeting. Cote was among about eight people lined up to speak about the project. He said that he works on similar projects in Massachusetts, and that, if faced with project cuts as seems likely, the first thing to be cut would be air conditioning. He said other cost-cutting changes would limit the quality of the buildings.
Cynthia Cook echoed Cote’s sentiment, saying she worried a track for senior citizens in the project is likely to be cut. She was also concerned that air conditioning might be cut from the project. “Are you, councilmen, really going to try to eliminate air conditioning, even though Warwick Schools closed this year on extremely hot days? What about all the other downgrades with materials,” she asked.
Speakers urging the Council to honor voters’ voice in approving the $350 million bonds for two new high schools included Darlene Netcoh, president of the Warwick Teachers Union.
“Let’s not forget that twice, the voters of Warwick voted for the state of Rhode Island to issue bonds to reimburse cities and towns for the cost of new schools. Twice Warwick voters did that, at 78 percent of the vote,” she said, noting that sent Warwick tax dollars to the state. “Then the Warwick taxpayer, the Warwick voter, voted for these two new schools, and voted knowing that there would be reimbursement,” which turns out to be higher than the state orginally planned, at 55 percent instead of 52 percent, she said. “To not vote on this resolution to issue these bonds is a slap in the face to all of the people who voted for these schools. This issue has been litigated at the ballot box. These schools need to be built.
“There is no bait and switch here,” said James Aronson, who said opponents to the new schools project had already raised their concerns prior to the vote for the bonds.
“The voters voted 58 to 41. They want these schools. They are expecting you to deliver these schools. I am expecting you, as a taxpayer, as a person who voted, ‘yes,’ to deliver these schools. You represent me. You represent the will of the people of Warwick. They want these schools,” Aronson said, “Do. Your. Job. Represent the people of Warwick. None of you, Mr. Ladouceur, particularly, is an Edmund Burke. You are not Edmund Burke, sir. Do what the people of your ward overwhelmingly voted for.”
During council comments on the project, Ladoceur, who pledged to vote against releasing the bonds on Thursday, said, “There’s a good chance that this may have to be cut back even more,” if an additional $22 million is not approved by voters, or some other funding is not found for the project.
Councilman Jeremy Rix noted that aside from the challenges of the project scope and cost, and the city’s increasing structural deficit, the community simply needs new schools, and voting to withhold the bond funds would be giving up on the city’s obligation to provide essentials to its people. If a family is in rough financial shape but it needs a car to get to work, you have to figure out how to get to work. “You can’t just say, ‘Oh, we’re in credit card debt, therefore I’m not going to fix the car. I’m not going to go to work. We can’t just skip out on essential functions here. Schools are an existing function.”
Councilman Vinny Gebhart said he found the two themes in the debate equally valid, but motivated by fear and faith, respectively.
“Is it responsible for us to punt this project, a plan the voters have approved, to five years down the road, when we know costs will be at least 10 to 20 percent higher? Or, is it taking the brave step to support our youth to continue the long-term success of our city, empower the school department to design, engineer and build two world-class leading learning facilities? This option protects our future. It protects your investment in what most people’s biggest asset is. Their home. If you took your exact home from Hoxie or Conimicut or Potowomut, moved it to North Kingstown or East Greenwich, it would immediately appreciate in value. You know why? The quality, the caliber, and the investment those communities make in their educational system. Martin Luther King said the definition of faith is taking the first step even when you don’t see the whole staircase. That’s where we are. We have a conceptual plan. We have a mandate from the voters. And so, tonight, take the brave step. The first step to project the health, safety and the welfare of the citizens of Warwick, and approve this bond,” Gebhart said.
Author: Rob Borkowski
Rob has worked as reporter and editor for several publications, including The Kent County Daily Times and Coventry Courier, before working for Gatehouse in MA then moving home with Patch Media. Now he's publisher and editor of WarwickPost.com. Contact him at [email protected] with tips, press releases, advertising inquiries, and concerns.
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