PAWTUCKET CITY COUNCIL

PAWTUCKET MUNICIPAL ANNEX, 100 FREIGHT STREET

2^nd FLOOR – TEMPORARY COUNCIL CHAMBERS

ENTER PARKING LOT AT 75 SABIN STREET

MONDAY, NOVEMBER 10, 2025

 

A special session of the Pawtucket City Council was held Monday, November 10, 2025, at 6:01 p.m., in the Temporary City Council Chambers, 2"¢ Floor, 100 Freight St., Pawtucket, RI.

 

Present — President Mercer; Councilors Araujo, Gregor, Moran, Moreno, Rubio, Stachowiak and Wildenhain.

Absent — Councilor Coderre.

 

President Mercer presided.

 

1.      Communication from Council President, Terrence E. Mercer, to the Honorable Members of the Pawtucket City Council, calling a special session of the Pawtucket City Council on Monday, November 10, 2025, at 6:00 p.m. WAS READ AND ORDERED FILED

 

2.      UPON RECOMMENDATION FROM THE FINANCE COMMITTEE, THE FOLLOWING RESOLUTION WAS APPROVED ON A ROLL CALL VOTE, AS FOLLOWS:

 

AYES -— President Mercer; Councilors Araujo, Gregor, Moran, Moreno, Rubio, Stachowiak and Wildenhain.

 

NOES - 0.

 

RESOLUTION AUTHORIZING CITY ACTIONS AND FINANCING DOCUMENTS IN CONNECTION WITH THE REFUNDING OF PAWTUCKET REDEVELOPMENT

AGENCY REVENUE BONDS ISSUED TO FINANCE A PORTION OF PHASE 1A OF THE “TIDEWATER LANDING PROJECT”

 

THE COUNCIL TOOK UP THE FOLLOWING:

 

3.      FISCAL PRESENTATION AND DISCUSSION WITH FISCAL ADVISOR, PFM FINANCIAL ADVISORS LLC, REGARDING THE CITY’S BONDING STATUS AND FUTURE CAPACITY

 

Given by: Xaykham Khamsyvoravong, Director, PFM Financial Advisors LLC

 

Mr. Khamsyvoravong stated that this meeting is to look at where the city is and to look at the capacity for taking on additional school construction projects.

 

He stated that Pawtucket is doing good work. The city is in the process of one of the most ambitious school re-construction programs in the state. With the high school project, the city is looking at about $440 million in total projects. It’s a massive construction project, on par with the State’s investment in rebuilding the Washington Bridge on I-195.

 

PFM Financial Advisers LLC (PFM) is working with the city and the school department to make sure these projects get done with financing in place, and along a prudent pathway.

 

The city is just about to start spending the largest chunk of money on the new high school. Currently the bonded indebtedness for all school projects is about $165 million and will soon be up to $435 million (the expected cost for the high school to be no more than $330 million). About 80% of the total $440 million will be subsidized by the state. The challenge is that the city bears the full carrying costs of principal and interest for the first handful of years. The city will need to increase debt service payments by $4.275 million for school

projects to a total of about $7.5 million after reimbursements for already completed projects.

 

The key is bridging the gap between continuing construction and making sure there are sufficient funds before the state provides reimbursements. This is why coordination between the school department and its project manager, and the City’s Finance Department is so critical. The city should see a large reimbursement in 2029 when the high school is complete. Because the state does not provide reimbursement until a certificate of occupancy is issued, the city must carry all interest payments until then. The city, then, must coordinate with the school department to make sure it is not borrowing any more than is necessary at any point in time.

 

If not, the city will see a large increase in debt payments for a few years, followed by a large drop-off when the reimbursement eventually kicks in. That very likely could result in a contemplation of exceeding the 4% tax cap (perhaps up to 6% or more) for construction debt service for two years in a row. He said the city must try to smooth out the payments over time, bringing the annual increase of $4.2 million down to between $1.3 million and $1.5 million per year over several years. That increase, along with other increases for personnel, etc. still could require about 4% tax increases. To accomplish this, instead of doing two large borrowings, the city will need to do several smaller borrowings to reduce the interest payments due. He said it is imprudent to bond the entire amount of any project at the outset and pay the carrying costs unnecessarily. This will require careful coordination with the schools. It’s especially important because if there isn’t the required coordination, it will affect how the city is looked at by the bonding agencies and in the market, which could affect the interest rates as the city goes out into the market every six months.

 

Councilor Rubio asked how the collaboration would work going forward.

 

Mr. Khamsyvoravong responded that PMF meets monthly with the project construction team and the schools’ financial team working with the city’s finance team. They project the cash needed for construction to avoid having money sitting in accounts doing nothing but adding interest costs, which is very expensive. Rather they look to delay borrowing as long as possible. They need to make sure that when they go to the market, they do so with good information, and that everyone is on the same page.

 

It’s also important to realize that while there will be a need in the future for school facilities upgrades, there remain real financial constraints that need to be worked on together by the city and the schools to navigate.

 

Councilor Araujo asked about the city’s bonding capacity or lack thereof at the present time. Mr. Khamsyvoravong responded that when looking at debt capacity, there are two lenses to look through. First is the aggregate burden on the taxpayers and is it reasonable compared to other cities and towns. Until 2029, when the city gets reimbursement from the state for the high school project, the city really doesn’t have the capacity to take on additional school projects, but at that time they will need to look at what they are able to do. Second, what does the debt mean for the city budget and for property taxes increases? That is where the collaboration for smoothing out the debt is so important, he said. If they can’t work it out, the city will hit its capacity ceiling much earlier than it should.

 

Councilor Gregor asked about keeping the expenses of the construction on budget and on time.

 

Mr. Khamsyvoravong responded that they don’t manage the construction funds, but the easiest way to check is to follow the monthly flow of funds. The city and the school department can review their cash flows to see if it is wildly off from where they thought it would be or if it is right on track.

 

Councilor Moran expressed concerns about the city’s ability to move forward financially.

 

Mr. Khamsyvoravong responded that government officials’ jobs are about to get much more challenging partly because of what’s happening in Washington and partly because they are making investments that have been necessary for decades. He commended the city for taking on a large chunk of those problems head-on. During the tricky period ahead, they must be flexible with projects that are needed but also realistic about the financial limitations of taking on additional debt. There is a prudent plan in place for handling it. If they don’t follow it, there will be problems. If they follow it and collaborate, they should get through it reasonably well.

Also, the reality is that construction is a very complicated business. A new school takes between six and eighteen months of engineering work at the outset. To do a new project in 2029, they must start now with the planning. To get this done, everyone must believe there is a pathway to get there and not a dead end. The first task is to make sure the taxpayers don’t face two back-to-back 6% tax increases. The second task is to start looking at collaborating on projects now, with the understanding that due to financial constraints and the logistics of building a school, it won’t get started for a few years. That is the fiscal reality.

 

President Mercer noted that there is a good plan in place. He asked Mr. Khamsyvoravong if he agrees that the city is on a good path, they just need to stay the course and continue to be responsible. They have been doing things as they should. They have known about how to smooth and avoid another 6% tax increase, but they have got to stay on the path they have set. They are not on the doorstep of doom, but they could be if they start acting irresponsibly.

 

Mr. Khamsyvoravong agreed with that assessment.

 

Councilor Gregor asked if the city is in a prudent place or if this project was overly ambitious.

 

Mr. Khamsyvoravong responded it is financially prudent. It is an ambitious project, but it is a good investment and the planning was proper. He noted other projects the city has taken on and he believes they are a good investment for the future of the city. He believes that the city has taken on these projects in a financially responsible way. It’s good for the taxpayers and for future generations.

 

It’s at a point where it is getting difficult, but it was expected to get difficult. The city just needs to continue in a way that is financially responsible.

 

Mr. Khamsyvoravong noted that there are additional projects that will need to be addressed. The one thing the city does not want is for RIDE to come in and force their hand on what needs to be done if they feel that the city is not making progress. The city should not become fatalistic. They should recognize financial constraints, but continue to look forward and take on issues head on.

 

Upon motion made by Councilor Araujo, seconded by Councilor Wildenhain, the meeting was adjourned at 6:47 PM.