MINUTES OF THE

SPECIAL MEETING OF THE CITY COUNCIL

 

Monday, April 29, 2024 at 5:30 p.m.

 

 

Special Meeting of the City Council was held in the City of Cranston Council Chambers, Cranston City Hall, 869 Park Ave., Cranston, RI 02910

 

YouTube Livestream

 

The meeting was live streamed on YouTube. Click the link below to view the meeting. https://www.youtube.com/channel/UCtE9vwA1B1PQHuftrNPcZjg.

 

Note: There was NO public participation at this meeting.

 

This Special Meeting of the Cranston City Council has been called by the Council President, Jessica M. Marino, pursuant to the Cranston City Charter Section §3.07 and Section 2.04.060 of the City's Code of Ordinances. 

 

The members of the City Council listed on the attached certification have been notified as provided for in §3.07 of the Charter:  Jessica M. Marino (Council President), Lammis J. Vargas (Council Vice President), Councilman Christopher Paplauskas, Councilman Robert J. Ferri, Councilman Richard D. Campopiano, Councilwoman Nicole Renzulli, Councilwoman Kristen E. Haroian; Councilman John P. Donegan; and Councilman Daniel Wall.

 

I.                   CALL TO ORDER

 

The meeting was called to order at 5:43 P.M. by the Council President, Jessica M. Marino.

 

II.                ROLL CALL

 

The roll was called by the Clerk.  Stated as present:  Councilman Ferri, Councilwoman Renzulli, Councilwoman Haroian, Councilman Donegan, Councilman Campopiano, Councilman Paplauskas, Councilman Wall, Council Vice-President Vargas, and Council President Marino.

Also present:  Stephen Angell, City Council Legal Counsel; Christopher Rawson, Asst. City Solicitor; Christopher Millea, City Solicitor; Anthony Moretti, Chief of Staff; Thomas Zidelis, Finance Director; and Tracy Nelson, City Clerk.

 

III.             BUDGET ADOPTION

 

ADOPTION of Budget for Fiscal Year July 1, 2024 through June 30, 2025; As Amended by the Finance Committee April 23, 2024:    (votes may be taken)

 

Councilman Donegan called for a motion to approve adoption of the Fiscal Year July 1, 2024 through June 30, 2025 budget, as amended by the Finance Committee April 23, 2024.  He would also like to offer five additional amendments. 

 

MOTION made by Councilman Ferri, SECOND by Council President Marino to approve.

 

Discussion:

 

Councilman Donegan stated, according to Director Zidelis, the city has $7,048,179.37 remaining in ARPA funds.  That is a combination of revenue balance and accrued interest.  He has five additional items to accomplish in this budget using ARPA funds.  The budget auditor confirmed they are appropriate expenses.  They are one-time expenses that would not create any type of structural deficit.  They will enhance technology at city hall, public infrastructure, and safety. 

 

Councilman Donegan would like to amend Group 1300 – Department of Public Works; line item 54802 – Sidewalk Program adding an additional $100,000 increasing the total to $130,000.

 

MOTION made by Councilman Ferri, SECOND by Council Vice President Vargas to approve the amendment.

 

Discussion:

 

Councilman Paplauskas asked if this is the sidewalk initiative.

 

Councilman Donegan confirmed.  The additional funding is so the city can be proactive and tackle public and private sidewalks with an immediate or emergency need.

 

Councilman Paplauskas questioned the legality of using ARPA funds when there is no allocation of ARPA funds in the proposed budget.

 

Asst. Solicitor Rawson provided his legal opinion.  Based on his research, under the operating budget and capital budget, the unilateral use and release by Council of ARPA funds is in contradiction to the Charter and Code.  Code 3.04.065 talks about Council approval.  It does not talk about Council appropriation.  That is consistent with legislative history.  In the Charter, Council acts on the Operating Budget and the Capital Budget, but it cannot take funds from a separate account.  Council cannot unilaterally release “rainy day funds”, sewer funds, grants, or ARPA funds.  Every municipality is run by its Code and its Charter.  There is no state law on this.  Federal guidelines are limited.  All we have is the Code and the Charter.  The Mayor releases the funds.  The Council approves it.   

 

Budget Auditor DiMaio stated, from an allocation standpoint, there is a calculation for ARPA as a revenue replacement, which has been done in previous years.  Our current replacement calculation, given to him by the Administration, is $61,116,571.  Not from a legal standpoint, but from a financial standpoint,  the money can be used to replace money in the budget.  As far as allocation and bringing it over, he is not the legal expert to answer that question.

 

Asst. Solicitor Rawson is referencing the Code and Charter.  Look across Rhode Island, there’s the executive branch and the legislative branch.  Executive releases the funds, legislature adds, deletes, or modifies.  This Council did release funds for the Budlong Pool.  The Mayor did end up approving that and let that go, but the process, particularly under the budget, in Section 6 of the Charter is clear.  It is the approval of the Council, not the allocation, the appropriation, the spending, or the encumbering.  That is consistent with Code Section 3, Revenue and Finance, and more importantly it is consistent with the budget process under the Charter. 

 

Atty. Angell offered his opinion.  Councilman Donegan’s motion is to include ARPA funds as a revenue substitute.  The Treasury regulations on the expenditure of ARPA funds focus on what they can be used for, so long as it meets the guidelines; and characterizes ARPA funds as a revenue substitute.  At the time the Charter was written, and until COVID, revenue substitutes didn’t fall into that bucket.  It is a new source of revenue, plain and simple.  The Council is not proposing a new expenditure, they are merely adding money to an existing line item; not a lot different from finding other sources of revenue either through budget cuts or amendments and providing the school with additional funding for maintenance of effort.  In his view, it is analogous to that. 

 

Asst. Solicitor Rawson would treat this like a grant or rainy-day fund.  There is no dispute as to the allocation.  He agrees with the auditor that these funds can be used for the subject.  It’s a revenue source, but it cannot be tapped under the Code or the Charter.

 

Council President Marino pointed out there is a difference of legal opinion between the Asst. Solicitor and Atty. Angell.  Atty. Angell has indicated it is an appropriate allocation on the part o the Council.  She is comfortable with the allocation given the advice of Atty. Angell.  She respects the Asst. Solicitor’s opinion as well.  Opinions can differ.  It is up to the Council to make the decision. 

 

Councilman Donegan reiterated that Council has done this in the past. 

 

Councilman Paplauskas supports the intent of the amendment but does not support the use of ARPA funds.  We just heard from Solicitor Rawson that it goes against the Charter.  The Council takes an oath to adhere to the Charter.  He will not support anything tonight that uses ARPA funds, based on the legal advice. 

 

Councilwoman Renzulli asked, if Solicitor Rawson is correct, and Council proceeds, what the potential consequences could be.

 

Solicitor Millea noted we are in unchartered territory.  Should the vote go against the advice of the Solicitor, it could lead to legal issues in which the city, potentially, could sue the Council and this matter could go to the RI Supreme Court.  We have a Charter.  It is clear about the funds.  As Solicitor Rawson just described, this is a check and balance.  The executive branch provides the money to the legislative branch, and the legislative branch decides how they want to expend it.  In this case, there were zero ARPA funds expended or included in the budget by the executive branch.  In his opinion, shared by his law department, this would be an illegal budget.  It could come with connotations of being not approved by the law department and could come with complications down the line including the RI Supreme Court, or any court of jurisdiction.  He wants Council to understand where this stands.  The Council is not allowed to dip into other funds that are not appropriated.  They can move funds around.  It is not that ARPA funds are not appropriate for certain reasons.  That is being lost in the discussion.  The Mayor did not appropriate ARPA funds in this budget, so they cannot be used in this budget.  This is no different than Council deciding to use the rainy-day funds to plug the budget.  If the Council decides to go down this road, his office will be circling back and figuring out the legal implications, but he can almost guarantee it will include a lawsuit in the Superior Court and maybe the Supreme Court, which could have other implications as this Council may or not know, as far as the spending and the operation of the city budget going forward.

 

Councilwoman Renzulli asked, if that were to happen, how it would affect the operating budget.  Would we be able to issue tax bills.  Will everything get done, or no?

 

Solicitor Millea answered everything may be frozen, depending on how this Council moves forward.

 

Councilman Donegan noted, on the idea of freezing the budget, the tax levy resolution is separate.  He doesn’t think that would have any impact on sending out tax letters.  He hopes that’s something the Administration will do, even if they decide to sue the City Council, which it sounds like they have every intention to do, and is well within their right.  But on the idea of separation of powers and checks and balances, he strongly disagrees that it is the executive branch that allocates the purse.  That is a duty, at every level of government, which is established with the legislative branch, which is the first branch in the U.S. Constitution under Article 1.  Council is the first branch, we have the power of the purse, and that’s what we are here to do tonight.  If we want to get into constitutional debates about checks and balances, we can do that, but he is confident, based on legal counsel’s opinion, and based on what has been done in the past.

 

Councilman Ferri echoed Councilman Donegan’s opinion.

 

Councilman Paplauskas cautioned Council about going down this road.  The bond agencies are watching.  If we start suing each other, it could hurt our overall bond rating.

 

Council President Marino called for a recess at 6:01 P.M. and reconvened at 6:14 P.M.

 

Council President Marino reviewed where discussion left off.  The Solicitor has provided one opinion.  The Council’s attorney has provided a different opinion.  We will proceed with Councilman Donegan’s motion.

 

At the request of Council Vice-President Vargas, Councilman Donegan repeated his motion.  The motion is to increase line item 54082 – Sidewalk Program by $100,000, from the previous $30,000, to $130,000. 

 

Chief of Staff Moretti suggested, in the interest of the taxpayers and residents of the City of Cranston, so there is no further legal challenge, perhaps the most common sense approach may be to have the Council Minority Leader and the Council Majority Leader meet with the Mayor, to come up with programs for the best use of ARPA funds going forward, versus a one-sided City Council approach, and then a Mayoral response.  That is the recommendation.

 

President Marino feels each suggested appropriation can be taken one at a time, on its own merits of the appropriation.  Right now, before us, is an appropriation relative to the Sidewalk Program.  We have all heard, as a Council, many a time, about the need for the improvement of sidewalks.  Given that we received over $40 million in ARPA funds, a slight increase such as this, given the clock is ticking towards ARPA funds, let’s remind ourselves that if the city does not allocate ARPA funds by December 31 of this year, then we lose that money.  If the Mayor chose not to incorporate some of this into the budget, that was the Mayor’s prerogative.  This body is not necessarily a divided body.  Each member will have their opportunity to be heard and discuss the amendments as proposed, but it is Council’s duty and job to move this forward.  The notation of having some collaborative effort would have been welcomed months ago when the Mayor was proposing his budget, but that was not what occurred, and we need to move the ball forward.  At this time, she is prepared to vote on the motions one by one. 

 

Councilwoman Renzulli is very much in favor of fixing sidewalks across the city.  They clearly need to be done.  We’ve been working on an ordinance for the last six months.  If the money was found in Parks & Recreation proceeds, she would vote for it, but she will not be voting for it purely on the allocation of ARPA funds. 

 

Councilman Ferri thinks it is obvious that if there had been funding in the budget to fix the sidewalks, we would not be discussing this right now.  He is in favor of increasing the budget to fix the sidewalks. 

 

Chief of Staff Moretti stated the Mayor’s budget did not take into consideration the use of ARPA funds.  It is not necessary to vote on it tonight.  If that is the answer for sidewalks, the funds could be committed by the end of this year.  The Mayor has not said ARPA funds will not be used for sidewalks.  ARPA funding would have been a source of funding for the city for other programs, maybe including sidewalks and other things.  It wasn’t that the Mayor was going against anybody or anything by not including ARPA funds in this budget.    

 

Council President Marino did not say, herself, that the Mayor was going against anything, but this is public collaboration, which is Council’s job to do, relative to the budget.  She called for the clerk to take the roll call vote on the motion.

 

VOTE ON MOTION:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

Councilman Donegan’s next amendment is to expense a line item for Group 1105 – City Clerk; (new) line item 52260 – Municipal Code Recodification in the amount of $25,000.

 

MOTION made by Councilman Donegan, SECOND by Councilman Ferri to approve the amendment.

 

Discussion:

 

Councilwoman Renzulli is in favor and appreciates what is being done in the Clerk’s office to make it a more efficient place.  She knows the municipal code has not been updated in twenty years, and it needs to be done, but she is not in favor of using the ARPA funds, therefore she cannot vote in favor.

 

Chief of Staff Moretti, rather than objecting to every amendment, would like to state the overall objection to the use of ARPA funds. 

 

VOTE ON MOTION:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

Councilman Donegan’s next amendment is to Group 1102 – City Council; line item 52217 – Video Streaming to increase by $15,000 to an amended amount of $35,000.

 

MOTION made by Councilman Ferri, SECOND by Council President Marino to approve the amendment.

 

Discussion:

 

Councilwoman Renzulli asked what the $15,000 is for.  Is it for an upgraded system, more people to come, new microphones?

Councilman Donegan responded, technological upgrades.

 

Councilwoman Renzulli asked where the amount of $15,000 came from.

 

President Marino answered the $15,000 figure came from an estimate provided by Tom Lima for the necessary improvements for Council chambers technology, including monitors, technology enhancements, microphones, base system enhancements.  She referred to tonight’s sound issues.    

 

Councilwoman Renzulli believes new microphones would be great, but she is not in favor of using ARPA funds for this purpose.

 

Councilman Paplauskas commented it is a noble cause that he supports.  Because it is ARPA and legal advice is that it is against the Charter and the Code, he will not be supporting the amendment.  That will go for all amendments tonight.  He mirrored Director Moretti’s statement.

 

President Marino stated again, we have a difference of legal opinions.  She believes Council is on solid ground, based on the legal opinion of Atty. Angell. 

 

VOTE ON MOTION:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

Councilman Donegan’s last proposed amendment on the expense side is Group 1301 – Division of Traffic Safety; line item 54103 – Traffic Sign Materials to increase by $80,000 to a total of $80,000.

 

MOTION made by Councilman Ferri, SECOND by Councilman Wall to approve the amendment.

 

Discussion:

 

Councilman Donegan, in the past, has brought up a desire to have flashing speed signs in heavy traffic areas, for pedestrian safety, especially children in school zones.  Councilwoman Vargas worked really hard to get some of those installed right outside.  It is something he feels should be in every school zone.  He had requested this funding in the budget.  He received a quote of $3,000 per unit last year from the company the police department purchased the existing signs from.  With 26 schools, at $3,000 each, brings it close to $80,000.  Some already have them, but this number ensures we can have them in every school zone.

 

Councilman Campopiano, if memory serves, recalls approving an ordinance to approve ARPA funds.  If that is the case, why do we need to do this?  Can’t we just use the funds?  These are all noble amendments.  He commends Councilman Donegan for bringing them forward, but he’s confused, with the conflicting opinions.  Why did we need to pass that ordinance if we could have just done it? 

 

Councilman Donegan stated, speaking personally, the budget seems the opportune time to allocate funds.  It is Council’s prerogative as a legislative body to do so.  The opportunity is here to do so, and he feels this is the platform to do it.  That’s why he is proposing these this evening.

 

Council President Marino is not sure she understood Councilman Campopiano’s question.  It is up to Council to make modifications as they see fit to the budget, and that includes ARPA funding, which is a component separate and apart from a resolution Council may have passed.  Appropriations rest with the Council.

 

VOTE ON MOTION:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

Councilman Donegan’s last amendment to propose is to Revenue Group 0000; Department State Aid, Taxes, and General Revenues; line item 49135 – COVID 19 Stimulus increasing that amount to $220,000.

 

MOTION made by Councilman Ferri, SECOND by Council Vice-President Vargas to approve the amendment.

 

 

Discussion:

 

Councilman Donegan pointed out $220,000 is the sum to cover the four expenditure amendments just made.  He reiterated these are one-time expenditures, incurring no structural budget deficit.  It is one-time revenue for a one-time expense at zero cost to the taxpayers.

 

VOTE ON MOTION:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

Councilman Ferri has identified twelve items on the Capital Budget that he would like to make amendments to.  Every one of the expenses qualifies under ARPA funding rules.  The total amount of the items is $4.2 million.  We would be putting these items out to bond.  This is different from Councilman Donegan’s amendments.  These are in the budget.  If we use ARPA funds to pay the $4.2 million, we will save close to that in interest, which is almost $4 million, plus seven of the items are for the school, and we will get 73% of that money back, so the total potential savings, to use $4.2 of ARPA money, is $5.9 million.  This is not exact math.  He is not an accountant, he is a businessperson, and a Council person.  He hopes everyone in Council Chambers agrees that if we can save $5.9 million, we should do that.  Looking at the Capital Improvement Budget, under Fire & Police Department Projects (Fund 201), there is a total amount of $955,000.  He wishes to amend the funding source for these items from the Capital Budget to the ARPA account. 

 

MOTION made by Councilman Donegan, SECOND by Councilman Wall to approve the amendment. 

 

Discussion

 

Council President Marino clarified Councilman Ferri is looking to change from bonding to ARPA as the funding source for the capital expenditures related to fire on the Capital Budget, as proposed. 

 

Councilman Ferri confirmed.

 

Councilman Paplauskas asked for a legal opinion.  This is a Capital Budget.  The voters have voted for the bonding.  Does this go against the will of the voters, or anything to do with the Planning Commission, because they’ve already approved this?   

 

Asst. Solicitor Rawson explained that now that we are in the Capital Budget there is an additional prong.  Council has already approved the bond.  The ordinance has already been done.  It has not been brought forth to the voters yet.  Council has already appropriated the funds to be bonded for these subjects.  He would repeat his previous legal opinion, but he would also mention that this Council had already passed an ordinance related to the bond funding these subjects that Councilman Ferri has brought up. 

 

Atty. Angell explained that simply because the voters approve bonding doesn’t mean the city has to run out and borrow the money.  If they can find an alternative source of revenue that doesn’t cost the city money, they can use it.  It is a proper use of ARPA funds. 

 

 VOTE ON MOTION:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

MOTION made by Councilman Ferri, SECOND by Councilman Wall to amend the funding source for Fund 202 – Public Buildings Projects; Police Headquarters HVAC Rehabilitation; $750,000 from the Capital Budget to ARPA funding.

 

No discussion.

 

VOTE ON MOTION:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

MOTION made by Councilman Ferri, SECOND by Councilman Wall to amend the funding source for Fund 202 – Public Buildings Projects; Police Station Dispatch Renovations; $150,000 from the Capital Budget to the ARPA account. 

 

No discussion.

VOTE ON MOTION:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

MOTION made by Councilman Ferri, SECOND by Councilman Wall to amend the funding source for Fund 203 – Parks and Recreation Projects; Infield replacements-Cranston Stadium CHW baseball field $225,000 from the Capital Budget to the ARPA account.

 

No discussion.

 

VOTE ON MOTION:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

MOTION made by Councilman Ferri, SECOND by Councilman Wall to amend the funding source for Fund 203 – Parks and Recreation Projects; Fixing/reinforcing Cranston Stadium football ground/track wall; $80,000 from the Capital Budget the ARPA account.

 

Discussion:

 

Council President Marino reiterated the motions are to change the funding source from the bond to ARPA funding.

 

 VOTE ON MOTION:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

MOTION made by Councilman Ferri, SECOND by Councilman Wall to amend the funding source for Fund 200 – School Department Projects; CHS East HVAC Boiler Upgrade; $780,500 from the Capital Budget to the ARPA account.

 

Discussion:

 

Councilman Donegan stated Councilman Ferri will go through a couple more Capital Improvement Budget items that total $2,062,750.  73% back on that is $1.5 million so not only are we saving taxpayers the immediate principal interest and all of the debt over the next subsequent years, but we are also going to be getting money back.  He wants to thank Councilman Ferri for the amendments.  He wants to thank Budget Auditor DiMaio as well for pointing this out.  He thinks it is an innovative way to identify ways we can save money as well as get money back.  He hopes that this building and the building next door can come to an agreement on how some of that money we receive back can be used to the benefit of the schools. 

 

Finance Director Zidelis will break the introductions down into two pieces.  One, if we pay with ARPA, we avoid interest.  He agrees unequivocally.  As to the 73%, he does not believe we will get 73% back, in his experience.  Underwriting part of the school; that was not part of the submission to RIDE to get reimbursed.  He cautions against thinking our reimbursement from the feds is going to happen.  If you think about it, it’s sort of double dipping.  You’re paying for the expense with federal money and recovering money from the state when we didn’t incur any interest expense.  The reimbursement usually comes from your principal and interest.  Getting 73% reimbursement on the $2 million; he’s not sure that’s going to happen.  

 

Councilwoman Renzulli asked if there is an opinion from RIDE, or through Mr. Balducci, who helped orchestrate all of this.  She will not vote for it anyway because of the use of ARPA funds, but if we don’t want to additionally incur more issues beyond the ARPA, although she thinks this is a really good idea, it would have been great if we did it before.

 

Mr. Balducci gave an example.  When COVID monies came down from the federal government through the State of Rhode Island, Cranston took advantage of a couple of grants.  Because they were identified as a grant, when it came time to identify those expenses, he worked with the city to get reimbursed, with respect to housing aid, he had to back those out.  That may be the case.  You can use ARPA funds, but then to seek reimbursement, he would have to get an opinion from RIDE.  Based on his prior experience on how other COVID-related grants worked, he could not submit for reimbursement.

 

Budget Auditor DiMaio cannot disagree with the statement on getting a ruling on it, but it is funding that is coming from the City Council or the Administration to the schools.  That might be the classification question that needs to be answered.  Based on what Mr. Balducci says, he got a specific grant.  There are two bodies here appropriating funds, which he can’t legally answer, but he thinks that would be the consideration on asking the question.

 

Councilman Ferri still wants to proceed, whether or not reimbursement is available for 73%, because we are still going to save $2.2 million.  He just thought the 73% would be an added bonus.  All the numbers he has today come to $4.2 million.  If we don’t borrow that $4.2 million, we’re probably going to save another $4 million.  He wants to proceed even if the ruling were to be against the 73% reimbursement.  Borrowing money is something you should always avoid doing if you have the money.  We need to use the ARPA money for something substantial.  Using it for the schools is one of the most substantial things we can do with the money, besides the items Councilman Donegan put forward. 

 

Chief of Staff Moretti stated whether ARPA funds are used, or city bonding is used, the funds will go to the schools, if approved by the voters at the referendum on June 4^th.  There is no argument from the Administration or the Council that the schools will get their bonding if the voters agree.  Voting for this, if it is not reimbursable, the city can be out, upfront, $1.526 million.  It’s not worth the gamble to vote on it this evening.  The City Council should obtain legal counsel on the double-dipping, as the Finance Director cautioned.  The second question is going to be what happens.  All of these school amendments, totaling $2.2 million, were included in the discussion and thought process for that $40 million bond referendum.  Does legal counsel agree that should be amended now?  If the funds that are being allocated will be used, are we now double dipping with the voters by asking them to double approve funds.  There are a lot of legal issues here.  It’s not worth rushing into.  It could cost the city millions of dollars. 

 

Council Vice-President Vargas asked the Finance Director or the Budget Auditor, if we don’t go through the Capital Budget for the schools, and we use ARPA funding, wouldn’t we still be saving city funds?  What’s our interest rate right now?  We are going out to bond in June. 

 

Finance Director Zidelis replied, it will be somewhere between a 4.5% and 5% interest rate.

 

Council Vice-President Vargas stated even if the expectation is not to get money from the state at all, if it is strictly just to use ARPA, we would still be saving the city money on that interest.

 

Finance Director Zidelis answered it would be cost avoidance of which a certain percentage was anticipated to be underwritten by RIDE, but yes, there would be net savings of interest expense.

 

Council Vice-President Vargas stated even though we, as a city, vote for a budget that includes a school, and if we give any funding, the hope is that the school department actually does utilize that money because we can’t, as a Council, tell the school how to spend the money.   It is in the Capital Budget and at the end of the day all she wants to clarify is it’s not about double-dipping.  The intent is more of saving the city from that 4.5%, depending on the interest rate in the future, which is also unknown, because we don’t know what our interest rate will be next year.  She wants to put the interest rate now on the record because all the projects we are going to do right now we are hoping to do with ARPA funding, which again, has to be obligated by December 2024, even though we have until December 2026 to expend it.  We want to make sure all these projects start getting done sooner rather than later and at the same time save the city some money.  She will be voting in support.

 

Chief of Staff Moretti ran the numbers, in rough terms, $2.1 million is what you’re saying the interest of 4% might be, but if you receive the $1.5 million in credit, really the net effect is half a million dollars in interest over twenty years.  It is not interest on $2.1 million, it is interest on half a million dollars.  You’re gambling foregoing $1.5 million on a $500,000 borrowing.  The numbers don’t make sense that you’re willing to risk the taxpayers. 

 

Councilwoman Renzulli added, to Mr. Moretti’s point, and would like the Auditor to confirm, we are essentially going to go to bond for the schools and do all these things.  She realizes and sees the point and appreciates the point about the interest, but if the reimbursement basically cuts that out, we are losing the ARPA money when there are other things we could do with that and allocate it in the next eight or nine months, before the end of the year.  These are worthy things to do obviously because they are already in the Capital Budget and we are going to bond for them and all of Council voted for that she assumes the voters will vote for it, but we can’t use that bond money for anything else, it’s just going to reduce that bond money, but we are going to lose our ARPA money.  One thing we can probably agree on is that there are some projects we wish we would have done with ARPA money.  Maybe we could get together and do that now.  We are in a position to spend the ARPA money on something else and get the school stuff, and it won’t cost as much because of the reimbursement. 

 

Budget Auditor DiMaio gave a classification, without having a ruling on whether or not the funds will be reimbursed at 73%.  If you take a million dollars and you pay 4% interest it’s roughly $40,000 per year annually.  If you get 73% reimbursement, which would be $730,000, you’d pay interest on $270,000, which would be $10,800 per annum.  Basically, what you’re trying to explain is you’ll be reimbursed if it’s done by bonding.  We know that.  Mr. Balducci confirms.  Unless you get a definitive answer, you’re leaving yourself open.  You’ll have interest savings, but it will be 27% versus 73% on savings and interest.  He used $1 million because it’s simple.  It’s either $40,000 in interest per annum; or, if you get the 73% reimbursement it’s $270,000, only $10,800 in interest. 

 

Council President Marino stated we don’t know if the voters will approve the bond referendum.  This classification of use is appropriate for ARPA funds.  It is undeniable that it will save money.  It is undeniable that there is a need for these improvements.  We are not talking fancy bells and whistles.  We are talking about replacing asbestos flooring, resolving HVAC issues.  Whether you are parents, Council people, School Committee, or just residents of the City, we have all heard of issues arising relative to these concerns with our kids in schools.  This is a drop in the bucket for the needs that our schools have, that our students are in every day.  Relative to the issue of bonding, let’s say the voters do approve of it, it has happened in the past, and there is no guarantee what will happen in the future, even if voters approve a bond referendum, it does not mean that the city will definitely go out and execute on the borrowing relative to that bond.  By us making this appropriation, we are ensuring that this work is going to get done.  Let’s be clear, we are also going to be saving money.  For that reason, she will be in support of this.  

 

VOTE ON MOTION:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

MOTION made by Councilman Ferri, SECOND by Councilman Wall to amend the funding source for Fund 200 – School Department Projects; Stone Hill – Flooring replacement; $223,000 from the Capital Budget to the ARPA account. 

 

No discussion.

 

VOTE ON MOTION:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

MOTION made by Councilman Ferri, SECOND by Councilman Wall, to amend the funding source for Fund 200 – School Department Projects; Glen Hills - Flooring Replacement; $223,000 from the Capital Budget to the ARPA account.

 

No discussion.

 

VOTE ON MOTION:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

MOTION made by Councilman Ferri, SECOND by Councilman Wall, to amend the funding source for Fund 200 – School Department Projects; Stadium School – Flooring Replacement; $223,000 from the Capital Budget to the ARPA account.

 

No discussion.

 

VOTE ON MOTION:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

MOTION made by Councilman Ferri, SECOND by Councilman Wall, to amend the funding source for Fund 200 – School Department Projects; Rhodes Elementary - Flooring Replacement; $223,000 from the Capital Budget to the ARPA account.

 

No discussion.

 

VOTE ON MOTION:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

MOTION made by Councilman Ferri, SECOND by Councilman Wall, to amend the funding source for Fund 200 – School Department Projects; Woodridge School - Flooring Replacement; $167,250 from the Capital Budget to the ARPA account.

 

No discussion.

 

VOTE ON MOTION:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

MOTION made by Councilman Ferri, SECOND by Councilman Wall, to amend the funding source for Fund 200 – School Department Projects; Dutemple - Flooring Replacement; $223,000 from the Capital Budget to the ARPA account.

 

Discussion:

 

Councilman Campopiano stated these are all noble amendments and he commends Councilman Donegan and Councilman Ferri for bringing them forward, but we still have eight months where we can appropriate this.  With the cloud of legality, he just can’t support it. 

 

VOTE ON MOTION:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

Councilman Ferri asked Councilman Donegan if a motion was needed to move the money.

 

Councilman Donegan answered no.

 

Councilman Ferri asked if the reason is because they were done individually.

 

Budget Auditor DiMaio confirmed.

 

Councilman Ferri stated that was $4,222,750 which will save a minimum of that amount in interest over the next 20-25 years. 

 

No other motions to amend the budget.

 

MOTION made by Councilman Donegan, SECOND by Council Vice-President Vargas for adoption of the budget for Fiscal Year July 1, 2024 through June 30, 2025 as amended.

 

Discussion:

 

Council President Marino clarified, the motion is to adopt the budget as amended by the Finance Committee April 23, 2024 and as of this evening.

 

Councilman Donegan confirmed.  Every year he’s been on Council he has gone into the budget process with the idea of how we can responsibly try and move more money over to the schools.  They are one of our most important departments.  They are certainly our biggest.  That’s the approach he took again this year to help them out after they’ve been level funded for the second consecutive year.  He thanked Director Zidelis and the rest of the Mayor’s staff, members of the public, members of the committee, the Clerk’s office, Tom Lima, and everyone who participated, for their input.  The product we have is a little bit better than the one we received a month ago.

 

Councilman Ferri thanked Councilman Donegan for all the work he did on the budget and how well he handled all the Finance Committee meetings.  He’s been the Finance Chair.  He knows it’s not an easy job. 

 

Councilwoman Renzulli agrees everyone did a great job.  She has a question relative to what was just done with the schools.  Do we now have to put something in to reduce the $40 million based on what we just took out, or are we leaving that $40 million, still asking for $40 million, still spending $40 million, and paying interest on the same $40 million and getting more stuff.  She knows there’s a laundry list of things we could build.  We will never have enough money to take care of these kids, but she’s curious where we go now.

 

Chief of Staff Moretti stated, from the Administration’s perspective, the meeting presented a lot of legal issues.  That’s one of the issues we are going to need legal counsel to sort through.  We are asking the taxpayers for an extra $2 million when we know it is allocated to ARPA.  That is a legal question to untangle. 

 

Councilman Donegan has a follow up to Councilwoman Renzulli’s question.  He asked Director Moretti to confirm that if we approve a bond of $40 million and we only draw $37.2 million, we only pay interest on the $37.2. 

 

Chief of Staff Moretti confirmed.

 

Councilwoman Renzulli asked if that means we just leave it as it is.  It already went through the General Assembly.  Who does she ask that question, is it the Solicitor, or bond counsel?

 

Chief of Staff Moretti replied the Administration will have to look into the legalities and get back to her.  The Administration is not equipped with that answer right now.  They were not aware of this before. 

 

Councilwoman Renzulli indicated the Mayor expressed, in his budget address, giving $1 million in ARPA funds to the schools outside of the budget.  Did that already happen?

 

Chief of Staff Moretti has not been involved with that.  He believes the Mayor has had some conversation on the school side or with Mr. Balducci.  He’s not sure where that stands with the deadline.  Those discussions certainly will continue for those opportunities.  He does not think anything has concluded at this point, beyond the initial discussions. 

 

Council Auditor DiMaio added, for example, through testimony, we’ve heard in previous years of money allocated for one of the schools.  At the time fiscal issues were coming up, they opted not to go out to bond to do that.  The project was stepped off.  Basically, on the economic environment at the time, the city has an opportunity not to fulfill the bond obligations that were asked for on the request. 

 

Councilman Paplauskas wants to echo his colleague, giving Councilman Donegan a shout out for doing a great job chairing the Finance Committee.  Same for Auditor DiMaio, thank you.  He is struggling with this because he wants to vote and pass all this together as a team, but he’s very concerned the Council could be on the wrong side of the law on this, on the Code and the Charter.  If he votes no, that is the only reason why.  He is certainly in favor of giving more money to the schools.  He thinks the Council may have “stepped in some stuff” here.  He really hopes we are not on the wrong side of this.  As he said before, the bond agencies are watching, and if there are lawsuits back and forth, that’s not going to help. 

 

Council President Marino also wishes to extend thanks to Councilman Donegan for an outstanding job chairing the Finance Committee meetings on the budget, Council Auditor DiMaio for his hard work, the Solicitors for their input, Atty. Angell for his input, and to all the Council members for their dedication to giving their earnest attempt to do what is best for the City of Cranston as a whole, financially.  With respect to following the law, it’s not just our Charter, it’s the Constitution, as Councilman Donegan mentioned earlier, first and foremost.  It is state law.  It is federal law.  It is our Charter.  She is confident based on the legal advice of

Atty. Angell that Council is on solid footing with regard to the appropriations made this evening.  She will be in support of this budget as amended.  

 

VOTE ON MOTION:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

RESOLUTION OF THE CITY COUNCIL Adopting the Operating Budget and the Salary Schedule for the General Fund, the Sewer Fund, Ice Rink Fund, the Insurance Fund and the Capital Budget for the Fiscal Year commencing July 1, 2024 and ending June 30, 2025 and adopting the Capital Improvement Program for the four succeeding years   (vote may be taken)   

 

MOTION made by Councilman Ferri, SECOND by Councilman Donegan to approve.

 

VOTE:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

RESOLUTION Authorizing the Adoption of the Capital Budget for Fiscal Year 2025 and the Capital Improvement Program for Fiscal Years 2025 through 2029 pursuant to Section 6.12 of the Home Rule Charter of the City of Cranston   (vote may be taken)  [click to view CIP budget]  [click to view 5 year CIP]

 

MOTION made by Councilman Ferri, SECOND by Councilman Donegan to approve.

 

VOTE:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

ORDINANCE Making Annual Appropriation for the City of Cranston for the Fiscal Year Commencing July 1, 2024 and Ending June 30, 2025   (vote to be taken)    

 

MOTION made by Councilman Ferri, SECOND by Councilman Donegan to approve.

 

VOTE:  Ayes – 6 (Ferri, Haroian, Donegan, Wall, Vargas, Marino) / Nays – 3 (Renzulli, Campopiano, Paplauskas).  MOTION CARRIES.

 

RESOLUTION Authorizing the Assessment of Valuations and Levy of Taxes on Ratable Real Estate and Tangible Personal Property in the City of Cranston   (vote to be taken)   

 

MOTION made by Councilman Ferri, SECOND by Councilwoman Renzulli to approve.

 

VOTE:  Ayes – 8 (Ferri, Renzulli, Haroian, Donegan, Campopiano, Wall, Vargas, Marino)

 

ORDINANCE Fixing the Date When Taxes Are Assessed, as of December 31, 2023, Will Be Due and Payable and the Date When Unpaid Taxes Will Carry a Penalty  (vote may be taken

 

MOTION made by Councilman Ferri, SECOND by Councilwoman Renzulli to approve.

 

VOTE:  Ayes – 9 (unanimous)

 

IV.             ADJOURNMENT   (Vote may be taken)

 

MOTION made by Councilman Ferri, SECOND by Councilman Donegan to adjourn at 7:12 P.M.             All Ayes

 

 

 

 

Minutes approved as written May 28, 2024

 

 

Attest:  ____________________________

                  Tracy A. Nelson, City Clerk