I got Sanchez upon order of those three or three and meetings due to leave July 14th, four point six.

Chair Sanchez.

Present Vice Chairman Taylor, acting Council Davidson.

Here, Councilman, if absent, Councilman Peter Stanley.

Sure.

Resolution authorizing the city of Providence to issue not to exceed a hundred and forty million dollars general obligation bonds, notes, and other evidences of the indepthness to finance and construction, renovation, improvement, alteration, repair, landscaping, furnishing, and equipment in schools and schools facilities in around the city, subject to approval of state housing aid at a reimbursement rate or state share ratio of not less than seventy-five percent at the time of issuance, and provided that the authorization shall be reduced by the amount of certain grants received from state bond proceeds from the Rhode Island Department of Communication or from the Rhode Island School Building Authority.

We'll take item one and two at the same time.

Um it looks like we have uh exhibit.

At this time, I will understand a motion to enter this into the record as exhibited or one.

Motion may councillor Peterson, second reconsider Davidson.

All those in favor, aye, and name, the extension, any expression, uh Mr.

Usorin.

Absolutely.

Is it true?

Name of the title for the package.

Thank you so much, uh the floor is yours.

Thank you, Mr.

Chairman, members of the committee.

Um, this evening for your consideration, um, these are introduced to the July 2nd meeting, and uh were as you know, were pretended to be heard sooner, and hopefully we should be catched by 1050.

Next thing in the city council.

It's my understanding that that will happen.

But for purpose of tonight's discussion, um, including if it's able to get it out of committee with your consideration, you know, that's a good first step.

And uh, if there's another opportunity to consider this before your recess for due respect, uh it would save us about seven weeks of uh of background work that is necessary to do any bond issue, including uh the retention of uh underwriter and all the necessary steps they go with that.

If that was to occur, we would be looking at a closing on the CIP bond that we call the one from the public building authority item number two, proximity sometime before September.

Um I'm sorry, please pause the real counselor joining us.

Sure.

Um be happy to wait.

Uh the record reflect that council grades has joined us.

No note.

Um, your lawyer knows counselor grace.

Uh Chief Renzini is here.

We uh just just began his um uh preparation on the two items uh we're hearing this thing.

I think you're gonna continue uh thank you.

Thank you, Chair.

So you're again uh members of the committee.

Um the item that appeared before you this evening uh originally was intended to be heard sooner.

If the committee had been able to do so, and it would have lined up with your next meeting of the full council and would have required at least single passage in that we've got this is in regards to um item one is the 140 million dollar school bond.

This bond was already given voted approval in November of 2020.

The importance of this 140 million dollar bond is that we did not need to draw upon it any sooner, but as we approach the summit as we move through the next complete year, the 140 million proceeds of which will be used to assist with the completion of all phase two projects, including projects that are already underway, including Kennedy School, Mount Pleasant, uh Lena School and uh other schools that we regularly uh fully school, Cazaring School, Messer, and uh again Mount Pleasant Billy College and career project that we regularly see before the school building committee, and this 140 million will continue the cash flow necessary to those projects.

Item number two, uh the CIP bond as we're calling it, is going to be issued to the public building authority.

Um they did give their preliminary approval at last Thursday's public building authority meeting again, subject to this hearing before the Ways and Means Committee.

That bond at 26 and a half million will be used to price all of the projects that we recently approved under the two-year most recent version of the comprehensive improvement plan that council just recently gave passage to during the budget.

So with that said, well, it's my understanding this evening that this may not get out of committee, but may not get council passage until you return from your summer recess.

Uh if it could happen before your summer recess, we would save about seven weeks of uh preparation time, time that would be vital to underwriting and uh assignment of uh all the necessary steps associated with bondage, and again, with due respect, should that occur, that would be an anticipated closing of the CIP bond sometime before uh September 30th post sooner, and then the school bond sometime before October 7th or sooner.

Those are the target dates that we're looking at.

What you have before you can exhibit, so we've agreed to take these together.

First one is the 140 million dollar school bond.

This is prepared by the city's outside fiscal advisor hilltop securities, and they've done a summary of the attributes that are generally discussed with any bond issue.

So on 140 million dollar bond issue, if in fact it could close uh on October 7th, that's an estimated date.

The first interest payment paid would be November 5th 2028 out of the gender fund.

We will we will be earning bond premium on this bond of 11 million 782,000.

That bond premium along with the file value of 140 would give us total available proceeds of 151 million.

I draw your attention to the sheet that says sources and uses, and then you'll see what those uses are.

It resulted 139 million, 180,000 chain in the project fund, capitalized interest fund.

When monies are put into the capitalized interest fund, those are the funds that are used to cover the bond indebtedness and interest for the length of period based on whatever the closing interest rate is, according to our outside advisors, that should cover us for approximately three years of interest only before there is an impact to any of the general fund resources to cover any indebtedness.

And this is a typical process associated with bond out.

The first principal payment that would be due is May 15th of 2030.

Again, approximately three years of interest only.

The final maturity of this bond will be in 20 years from closing on May 15th of 2046.

Capitalized interest would be through uh May 15th of 2020.

The cost of issuance is expected to be around 400,000, and that includes legal underwriting.

Uh sorry, legal and uh outside advisors associated with that.

The underwriters discount, that's the fee that the underwriting received for placing the bond issuing amongst investors.

That's roughly two tenths of one percent.

Bond insurance, when we acquire bond insurance based on our current outstanding credit rating, bond insurance helps lower the interest cost and spares us the need to have what's called debt service reserve.

Uh, with that, we're looking at today what's priced as a true interest cost of approximately 4.19%.

When we closed on the 25 million dollar property acquisition bond that we closed on last month, it buy a 444 in the world fire property.

I believe our closing interest rate was in the 4.35 range.

So uh the rate of interest is definitely slightly better.

In addition to that, you'll see the schedule before you that's the schedule that approximates the debt service uh payments.

The second document associated with this 140 million dollar bond issue is meant to be a calendar of dates associated with the next steps associated with all of the individual uh activities that occur from this discussion this evening right to a closing again.

The closing was expected to be somewhere in the middle of the beginning of October, all things considered if we had gained a single passage at a council meeting before the council goes on recess.

Should that not occur, it would delay by that amount of time.

But those are the various attributes associated with the bond issue, including uh underwriting activity and due diligence calls, rating calls with rating agencies, legal review, the distribution of the uh uh preliminary offering statement and all of the necessary steps associated with securities of exchange commission.

And page two will give you the uh additional uh activity right through uh what was expected to be an October 7th closing again if that does not occur with a passage by the council that it would extend by approximately seven weeks, if you will.

Um that covers the 140 million dollar bond issue.

I'm happy to take questions on that, or if you wish me to continue, Mr.

Chairman, members of the committee.

I can discuss the 26.5.

Um committee folks, is any questions on the 140 million dollar bond?

No.

Um we appreciate that we've got some exertion in advance, and then we'll get signs uh over here.

Thank you.

Um, just to make clearance.

So both of these uh preliminary assumptions um are using uh an assumption that we pass this uh at some point before the other one for passage test, and if that is not happening, then it would be approximately six to seven week delay, and that's not over them.

Yes, because there are some things that we cannot do without authority, right?

And engaging underwriting and having them pre-priced bonds, there's something that we can do that may that may reduce that lag time, but uh clearly without uh this matter being passed for single passage because of resolution you would uh have difficulty and invoking any authority that would require toward that makes sense.

Um we run into any, I guess specific to the full construction bond, or are we running into any cash flow?

No, I spoke to Mr.

DeSante today from balance construction to see if I've got on that path, and he said no, this is this was expected to be closed around this time of the year.

Um, you know, we have cash resources from other prior bond issues that are still drawing on and still easily pay vendors, but this was you know, most bond issues take between 60 and 90 days.

So in the planning stages, this is about appropriate way it would be, and uh we would hope that we could close it.

Initially that said the 140 million would close on or about on or around October 7th.

And then on the day of closing, the cash proceeds arrive immediately that day there.

They're available for further distribution.

So this seems timing to us, even if there is that delay with if the council does not get to the BRA, we're we're okay.

We should get all right.

That's uh that's good.

Um questions for can I just um know what our total debt service would be with this added in?

It's uh so we don't specifically on council.

Um it is well within the range of our debt service capacity, both legal and fiscally, and uh you know our debt service budget is set annually, it's based upon those debt instruments that are due to be paid during that year, and then uh whenever there was an opportunity to advantage when a bond issue is fully matured and it drops off the city's net schedule.

That's the time when we take that opportunity to use that budgetary flexibility to recapitulate and go back into the bond market when appropriate.

So we uh definitely within the range of our legal capacity as well as our fiscal affiliate pay, but I don't have that number of oh okay.

Um if you could send it to us, that'd be great.

Uh curiosity.

Thank you.

Council agrees with your remotion.

I just wanted to know which fire station are referring to.

I'm sorry, which fire station are we referring to for this wheel in the uh I'm not sure I see that.

Oh no, uh, it's in the call this up the 26.5 million.

No, no, it's yeah, it's the 25 and five million, uh direct my attention.

Uh it's actually back off.

Um, this was a summary sheet that was provided as part of the information given to the public building authority.

This came directly from the uh CIP that was adopted by the council okay in the most recent budget.

So I can get you that detail.

Yeah, please let me know.

Uh I think I will also get that to some chairman.

If I may continue then, of course, make it with respect to the 26.5 million dollar bond issue.

Again, this is meant to be entirely dedicated to the uh five perfect food for the most recent version of the CIP, which is a two-year briefing.

Um, this bond issue also is expected to be a bond premium, in this case, 1,962,724, allowing us to have total sources 28 million, four sixty-two, and they were being dispersed as follows.

The project fund would be 25 million 9260 and pick up a little bit of additional funding about beyond the 26 million 500,000.

The capitalized interest once again will be used to pay the indebtedness over the next uh uh three years.

The first interest payment that would be due for the general fund would be September 15, 2028.

The first principal payment would be September 15, 2029, final maturity after 20 years for closing September 15, 2026.

The cost of issuance approximately 250,000, the underwriters costs 113,000.

Again, we would we would pursue bond um bond insurance, which lowers the cost of debt to dentists and preferred allows us to avoid having a debt service reserve, and the true interest cost on this bond will be slightly higher than 4.34.

Remember, when we borrow on the general obligation, which is what the school bonds are, we generally borrow a lower rate of interest because of the uh city's full credit on general obligation versus to the public building authority and this and the school bond is backed by the higher education building corporation of as right there.

Once again, what appears before you is the preliminary schedule of projecting debt service, the second document from that picture is the financing schedule, which shows similarly the various attributes and next steps associated with uh all of the bond issue uh steps that are necessary, including underwriting uh rating calls to rating agencies, uh due diligence calls with outside council and uh distribution and circulation of the preliminary offering statement and so on and so forth, right through what would be anticipated closing date somewhere on September 30th or sooner, depending upon our ability to close soon.

Uh any questions on uh the point six four or five million dollar um reposition um uh mr.

anticipated closing date somewhere on September 3 or sooner depending upon our ability to close soon uh any questions on uh the point six four five million dollar um presentation um uh mr ventini is um is there uh i guess we we can't really understand but in faction or life experience uh is there any risk of a higher rate seven weeks i guess under this federal registration we don't know uh like anything in the world the global economy is measured by the events of the day and one doesn't know that of course we've seen that over the last few months but we withstood that even during the last uh round the bomb we closed on the acquisition of uh 444 building and uh one of our we uh we had thought we would close at a rate that was perhaps 30 basis points uh uh cheaper to work with and uh over the course of the many events that we like most things bounces up and down but we it landed somewhere where we thought it would be i think i think the outside rating agencies and the outside uh fiscal advisors they have the english measure rates against the 10 year treasury it's what they use and where those rates are pretty well pronounced I think you know safe to say that we would be in the low fours i think that's pretty safe to say unless something catastrophic or some calamity took place in the market that even at that point we would withhold for going to the market i think we we get our best advice as we get closer to when we're ready to close but um we could certainly measure that uh on around that time but I think using the low fours is probably a pretty good indication in barometer where we would be in the market appreciate you sir thank you um there's no further questions uh we'll entertain a motion to approve item one two motion uh maybe by counselor pearson second by counselor davidson all those in favor aye any discussion any abstentions any nays any discussions that ayes have it thank you item one item two are approved this time I want to stand motion two or chair and thank you mr.

Chairman motion made by counselor pears and second by counseling by all grade is the office in favor aye any maybe extensions and extensions