By ALEX MALM Despite concerns whether taxpayers can afford it and if a $350 million bond to build two new high schools would exceed the city's bonding authority, the City Council unanimously endorsed sending the school plan to the Department of
Despite concerns whether taxpayers can afford it and if a $350 million bond to build two new high schools would exceed the city’s bonding authority, the City Council unanimously endorsed sending the school plan to the Department of Education as the next step to placing the question on the ballot.
While there are questions over the merits of building the two schools, as Ward 5 Councilman Ed Ladouceur put it, "the voters need to make this decision."
Although the School Department favors the new schools, it wasn’t lost on the Council that originally the District was set to move forward to the ballot a bond for to make major renovations to both Toll Gate and Pilgrim.
Last July the Rhode Island Department of Education denied that plan, noting that it would disrupt the schools for four years, and the delta between the costs of building new and making major renovation would be minimum. Director of Capital Projects and Construction for the School Department Steve Gothberg said that while they didn’t get too far in the process before RIDE shut them down preliminary estimates were around $302 million for the major renovations.
The Council made it clear that they didn’t agree with the opinion of RIDE.
“We weren’t supposed to replace these, that was not the plan. RIDE doesn’t care unfortunately what we think, what any of us think,” said Ward 8 Councilman Anthony Sinapi. “So if anyone has a bone to pick I strongly encourage you to pick it with RIDE because we are spending millions, actually over 100 million more than we should be because RIDE’s too ignorant and too full of themselves to care.”
Opening the meeting Council President Steve McAllister said he requested a financial analysis from Finance Director Peder Schaefer outlining what the estimated impact on taxpayers if the bond is approved.
“The cost of it, that's what we need to think about and debate,” said McAllister.
In his report Schaefer said that there are a “number of variables” when it comes to the debt services costs, including final construction cost estimates, interest rate risk, and level of state reimbursement.
“There may also be opportunity for “Pay as you Go” contributions by the state,” the report reads. “This would reduce the amount borrowed (by as much as $18.5 million on a $350 million approved project) as well as future reimbursements but does not change the overall picture.”
Schaefer laid out the best and worst case scenarios as of right now.
The best case would be a cost of $350 million with all spending reimbursable, and 50 percent reimbursement by the state.
“This is an aggressive estimate since existing state law caps Warwick’s reimbursements at 47.5%, although the Governor’s budget proposal may increase this to 52.5%,” said Schaefer. “Also, some costs will not be reimbursable. Under this best case scenario, annual net debt service to the city over 20 years would be (after state reimbursement or pay as you go funding) $13.1 million per year.”
The worst case?
Schaefer said the City could be looking at a cost of $400 million with 35% reimbursement by the state.
“This would result in annual net debt service to the city over 20 years (after state reimbursement or pay as you go funding) of $19.5 million per year,” said Schaefer.
In the report, Schaefer outlined what it would mean for the taxpayers.
He said that the current annual property tax levy of the city is $235 million. It means that a $13.1 million annual net debt service price tag would equal around 5.5% of the existing tax levy, and a $19.5 million price tag would equal 8.3%.
“While tax rates will change after the next revaluation, at the current rates this would equate to a tax rate increase from $1.03 per thousand to $1.55 per thousand in the residential rate,” said Schaefer. “On a home currently assessed at $300,000, this would be a tax increase of from $330 to $490 a year. This assumes that there would be no operating cost savings from the new high schools or other economies by the City. It also does not include the debt service for on-going projects.”
As Council Solicitor William Walsh pointed it out during the meeting the Council would need eight members to vote in favor in order to exceed the tax cap.
“State law does allow for tax levy increases over 4% attributable to debt service increases, but state law also requires a four fifths vote of the Council (8 out of 9 in Warwick) to execute,” Schaefer wrote.
Ward 1 Councilman Bill Foley pointed to the Sawtooth Building in Apponaug, noting that six months after the administration signed a lease agreement with AAA for the City Hall Annex, AAA requested another $800,000 due to increased costs.
His question was what happens if the schools cost more than anticipated.
“What happens if there is an overage,” Foley asked.
Gothberg explained that $150 million is the maximum reimbursement RIDE based on the square footage of the proposed schools.
Foley, a retired educator after 40 years said he knows that new facilities are important but he is also concerned about the bottom line.
“I just have a lot of concerns on the cost,” said Foley.
Ward 6 Councilwoman Donna Travis said taxpayers aren’t going to be happy with an increase each year.
“They are going to move,” said Travis.
Travis said that she thought the School Committee should’ve gone with one school instead of two.
“You have to be considerate to the people who have to pay for it,” said Travis.
While Ladouceur said he thinks the voters should have the ultimate say indicating that he isn’t sold on the idea.
“I have a concern with building two schools at the same time,” said Ladouceur.
Owner of a construction company, Ladouceur said he sees the struggles of finding workers right now. He said he is concerned that the construction companies working on the project will have the same difficulties.
But Ladouceur indicated that the thousands of voters across the City should have the final say.
“I don’t think that decision should be made by nine people,” said Ladouceur.
Rob Cote, who said he has been an outspoken advocate for new schools for at least 12 years agreed that new schools are usually one of the first things that prospective families look at when they consider relocating, but said on the flip side the high cost of taxes could become an issue.
“You have to look at all aspects of it,” said Cote.
One of the big concerns that he pointed to are skyrocketing construction costs. He said in the last 12-15 years the vast majority of his work has been on school construction projects. An example he pointed to is a school in Massachusetts that had a new school approved two years ago. At the time the estimated cost was $420 per square foot. Now he said the estimate is $691 a square foot.
On Tuesday Mayor Frank Picozzi said he shares some of the concerns brought up during the meeting.
“I’m all for building the new high schools personally, I advocate for kids. It's important to me but there's also a lot of concerns for taxpayers,” said Picozzi.
Like others, Picozzi said he thinks voters should decide but wants to make sure they have all the information to make an informed decision.
“I am for letting the taxpayers decide but I want them to have all the financial information and all the ramifications that this can lead to because it is going to lead to significant tax increases,” said Picozzi.
A concern Picozzi pointed to is the risk of the two schools costing more than what is projected.
“This is probably the worst time in the history of mankind to build something,” said Picozzi.
Picozzi said that a more detailed analysis needs to be done. He also noted that they need to look into ways to get information out to the public.
“We do need to get the information out,” said Picozzi. “People have a right to know when they're gonna vote on it.”
Ward 2 Councilman Jeremy Rix, whose Ward encompasses Pilgrim High School and who graduated from Pilgrim in 2004, was direct with his comments during the meeting.
“We can not wait until the school is run into the ground,” said Rix.
Rix also pointed out that there is a possibility that the schools could lose their accreditation due to the physical issues with them.
“We have to make a decision here or a decision is going to be made for us and it isn’t going to be pretty,” said Rix.
Assistant Superintendent Bill McCaffrey said that both Pilgrim and Toll Gate were cited for facility issues.
Sinapi graduated from Toll Gate in 2007 said that the school has problems including not having windows in some classrooms.
“I was in some of those classrooms, it's not good,” said Sinapi.
He said in some cases the issues with the physical makeup of the school that it causes issues with learning.
“There's problems that are so severe at Toll Gate that learning becomes a non-starter some days,” said Sinapi.
Ward 9 Councilman Vincent Gebhart pointed out the costs of building new schools likely won’t decrease. He also pointed out that it would be difficult to build one new school at a time due to the age of the schools.
On Tuesday Gebhart sent out an email blast, which included an informal survey that he created to help generate feedback regarding the project.
“While the cost to build new schools is high, the cost to do nothing could be even higher. Building costs will continue to rise, interest rates have already started to tick up, our schools will remain in a state of deterioration, our students will continue to suffer from 21st century learning in 20th century facilities,” the email read. “For how long can we throw good money after bad?”
At the time of publication 43 people responded. The vast majority indicated that they were strongly in favor of the proposed plan.
The responses of the survey were anonymous.
One survey taker wrote, “ I cannot afford another increase in property taxes. I will be forced to move out of state.”
Another wrote “Warwick needs to invest in our schools: both facilities and curriculum updates are key factors in making Warwick an attractive place for families to stay.”
To fill out the survey go to https://bit.ly/WarwickBondSurvey
School Committee Vice Chair and the Chair for the Building Committee David Testa said he thinks that by new schools it will help to bring in new residents to the City.
“I think new facilities are a draw for families,” said Testa.
Assuming approval of the application by RIDE, the Council will take up the issue again when voting on a resolution to the General Assembly asking to put the bond measure on the ballot.
The bond measure would then be on the ballot in November during the General Election.
But as Picozzi explained Tuesday there is still a “fail safe” even if the bond passes.
He said that if the costs escalate or other things happen and the City Council feels they shouldn’t release the bond funds they would be able to.
Picozzi pointed to the bond for Mickey Stevens as an example, which was passed over 15 years. That bond still hasn’t been issued.
“The same could be done with this,” said Picozzi.
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