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Warwick Schools Funds: Building Bond $22M Short

warwick-city-hall

warwick-city-hall
[CREDIT: Rob Borklowski] Warwick City Hall
WARWICK, RI — Monday, the Council focuses on Warwick schools funds, both a $350M bond for two new high schools, projected to fall $22 million short and a measure waiving a pact retaining ARPA funds.

The full Council meeting takes place in Council Chambers, Warwick City Hall 3275 Post Road Warwick, RI 02886, at 7 p.m. Full documents and agendas for the meeting, including committee meetings starting at 5 p.m., are posted to the city website.

Council President Stephen McAllister previewed the high schools bond during his last Council Update column.

“The council will have an agenda item where we will discuss and possibly vote on whether to issue the $350 million bonds to build two new high schools.  As a reminder, the only authority the city council has at this time is whether to release the bonds or not.  All questions regarding what is or is not going to be built should be referred to the school department and school committee.

I have requested that the Superintendent and her team attend this council meeting and be prepared to answer questions from council members and members of the public.  I have also requested an updated fiscal note from the city’s finance director regarding this project as well,” McAllister wrote.

Review, fiscal note increase cost, debt service projections

The state was expected to reimburse 45 percent of the funds, but recent new information puts both the cost of the project and the amount the state will reimburse in doubt.

A fiscal note for the project shared by City Councilman Ed Ladouceur on his Facebook page notes the projected costs for the project are expected to exceed the bond by $22.1 million.

“These costs exceed state approval so there would be no state reimbursement,” according to the note, written by Finance Director Peder Schaefer.

In 2022, projected annual debt service costs were $11.9 million annually. Since then, the estimate has grown to $13.4 million, assuming a 20 year amortization at 4.32% (average over 2 tranches), based on the original cost.

Now, the annual net debt service would be projected at $16.4 million, or 7 percent of the current year approved tax levy of $233.9 million, Schaefer said.

“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.

He also noted that since the bond only approves $350 million, “Additional voter authorization for the $22.1 million increased construction cost would be required to proceed on issuing the total debt for these projects if the Ellana projections apply and other cost savings were not achieved.”

Ladouceur said he received the fiscal note this morning, and that it cemented what he’s been saying about the project for the past year and a half.

“There will be no way I will be supporting it (the $350M bond),” Lacouceur said.

School ARPRA funding

The council will also consider waiving an agreement with the school district that ARPA funds be withheld from the school budget in the event of increased state aid.

According to the resolution, “The Warwick City Council desires to waive the condition on ARPA funds 19 provided to the Warwick School Department in the FY 2024 budget, and have the increased State Aid for education ($752,619) added to the School Committee’s Account without a reduction to the $1.0 million ARPA contribution.” pcr-99-23_authorizing_350m_school_bonds pcr-100-23_schools_arpa_funding_002 HS-FiscalNote

 

 

 

 

 

Rob Borkowski
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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