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JOINT WORK SESSION

JANUARY 9, 2019

At a JOINT WORK SESSION of the Town Council and School Committee of the Town of South Kingstown, County of Washington, in the State of Rhode Island, convened at the Town Hall, in and for said Town on the 9^th day of January 2019 at 6:00 PM.

PRESENT: Town Council

Abel G. Collins, President

Bryant DaCruz, Vice President

Deborah J. Kelso

Rory H. McEntee

Joe Viele

School Committee

Stephanie Canter, Chairwoman

Sarah Markey, Vice Chairwoman

Alycia Collins

Michelle Brousseau

Emily Cummiskey

Katherine M. Macinanti

Jacy Northup

Also present: Robert C. Zarnetske, Town Manager, Patricia Sunderland, Finance Director, Aimee Reiner, Director of Administrative Services, Colleen Camp, Executive Assistant, Dr. Kristen Stringfellow, School Superintendent, and Maryanne Crawford, Business Manager, School Department.

The Pledge of Allegiance is given.

Maryanne Crawford, Business Manager, School Department presents the proposed Capital Budget for the School Department. A capital project is a major, non-recurring tangible fixed asset, with a useful life of at least 5 years and a value in excess of $10,000. The areas of focus are on the six-year plan. The Pay-As-You-Go Capital Plan is included in the General Operating Budget.

The Rhode Island Department of Education (RIDE) defines a Capital Improvement Plan as a long-range plan, typically 5-6 years, which identifies capital needs in a district and provides a funding schedule and timeline for implementation. The capital improvement plan allows for systematic evaluation of all projects at one time so that a district can anticipate future needs. It does not include routine maintenance but should include required upkeep of the facilities, including but not limited to roof repairs, heating, ventilation systems, and window and door replacement.

Under Rhode Island General Laws we are allowed to receive housing aid for the Capital Improvement Plan. School Housing Aid are funds appropriated by the General Assembly in support of completed school construction projects, to guarantee adequate school housing for all public school children in the state and prevent the cost of school housing from interfering with the effective operation of schools. Funds are distributed as promulgated in RIGL §16-7-35 through §16-7-47.

State funding is awarded after projects are completed according to statutes and regulations governing school housing aid. No payment of school housing aid for an approved project shall be made before the completion of the projects and submission of the forms as prescribed by the RIDE. The current reimbursement rate for South Kingstown is the minimum rate of 35%.

In June 2018 the Governor and the General Assembly passed a State budget that includes substantial changes to the oversight, management and funding of public school construction to ensure that every school district sees meaningful improvement to the condition of its public school buildings over the next five years. The changes include annual maintenance expenditure requirements, housing aid bond incentives and additional housing aid eligibility requirements. South Kingstown will be eligible for incentives with potential reimbursement rates of 52.5% in state housing aid.

Discussion ensues relative to the Necessity of Construction process. The Necessity of Construction process is a multi-state application process that requires Local Education Authorities (LEAs) to conduct facility assessments toward the creation of an efficient and prudent Master Plan. Once reviewed, vetted and prioritized by the School Building Authority, the SBA Advisory Board recommends projects for approval by the Council on Elementary and Secondary Education. Approved projects are eligible for State Aid through one of two mechanisms: Housing Aid reimbursement or SBA Capital Fund progress payments. Stage I and II are the major application processes for all school districts.

Stage I requires the school district to submit a letter of intent, as well as a commitment to follow the School Construction Regulations and all applicable statutes and regulations. In addition, it requires that facility condition assessments be conducted, and demographic projections and educational programs for each school facility must be provided. The Letter of Intent was submitted in August and approved on August 24, 2018. The Stage 1 Necessity of Construction application was submitted September 15, 2018 and approved on December 12, 2018.

The Stage II Necessity of Construction application requires architectural and engineering services to propose the solutions to the identified issues. It requires development of schematic design documents with cost estimates. It is scheduled to be submitted on February 15, 2019. The Council on Elementary and Secondary Education vote for approval is expected in May 2019. The last three stages include: Stage III, Design Review; Stage IV, Funding; and Stage V, Asset Protection.

In January 2017, during the fiscal 2018-2024 CIP budget discussions it was determined that with the continued decline in enrollment, the District should seek proposals from a consultant to provide a comprehensive long-term twenty-year education and facilities plan. In April 2017 the School Committee awarded a contract to RGB Architects. The district is currently preparing a Stage II application for submittal and approval.

The following long term projects are based upon the Stage 1 application submitted to RIDE and as presented in the Town Manager’s Capital Plan. Once the District receives final approval of its Stage II Necessity of Construction application, the Capital Improvement Program most likely will be amended.

Discussion ensues relative to Hazard School. No projects are planned for FY 2019-2020 through FY 2024-2025.

Discussion ensues relative to the Administration Building. No projects are planned for FY 2019-2020 through FY 2024-2025.

Discussion ensues relative to South Kingstown High School. In FY 2019-2020, $750,000 is proposed for boiler chimney repair. The proposed funding in the Stage 1 submission is $12,467,814 in each of FY 2020-2021, 2021-2022 and 2022-2023.

Discussion ensues relative to Curtis Corner Middle School. In FY 2019-2020, $189,693 is proposed for Life Safety and Plumbing and $166,365 is proposed for Stage 1 submission.

Discussion ensues relative to Broad Rock School. In FY 2019-2020, $150,000 is proposed for security improvements and $40,000 is proposed for Stage 1 submission. In FY 2022-2023 and FY 2023-2024, $5,305,581 is proposed for Stage 1 submission.

Discussion ensues relative to Matunuck Elementary School. In FY 2019-2020, $350,000 is proposed for security improvements and in FY 2021-2022 and FY 2022-2023, $5,295,826 is proposed for Stage 1 submission.

Discussion ensues relative to Peace Dale Elementary School. In FY 2019-2020, $350,000 is proposed for security improvements and $600,000 for paving/reconstruction of parking lot. In FY 2021-2022 and FY 2022-2023, $3,505,421 is proposed for Stage 1 submission.

Discussion ensues relative to Wakefield Elementary School. In FY 2019-2020, $150,000 is proposed for security improvements.

Discussion ensues relative to the West Kingston Elementary School. In FY 2019-2020, $1,053,000 is proposed for the replacement of the HVAC/Electrical systems and $350,000 for security improvements. In FY 2021-2022 and FY 2022-2023, $5,295,826 is proposed for Stage 1 submission.

Discussion ensues relative to the District Paving Projects. No projects are planned for FY 2019-2020. In FY 2022-2023, $200,000 is proposed for paving at West Kingston and $300,000 for Matunuck Elementary Schools.

Discussion ensues relative to bonding and the construction schedule. The Finance Director explains that construction has to be completed within 18 to 24 months of issuing bonds. The plan is to issue bonds in the amount of $38,000,000 in July 2020 and two years out is 2022, that is the first phase; the second $38,000,000 bond issue is slated for January 2021 and two years out is 2023.

The construction numbers within the School Department’s Capital Improvement six-year plan are based upon the Stage 1 application which has evolved substantially since its submission, and really do not reflect the current state of the project.

The Town Manager reports that yesterday the School Building Committee received a project that is $83,000,000 worth of bond funded activity. The bond funded activities address $23,000,000 worth of deficiencies identified in the Jacob’s report, but not all of the deficiencies are addressed; $5,000,000 for an Area 1 addition to the High School, $4,300,000 for an Area 2 addition to the High School, $5,500,000 for an Area 3 addition and $7,600,000 for an Area 4 addition, $15,000,000 for additions at the Broad Rock Middle School, and $18,000,000 to $22,000,000 worth of air-conditioning/air quality in the various school buildings. There are still some big questions to be resolved. The Jacob’s report identified $89,000,000 worth of deficiencies throughout the entire school inventory. When you back out facilities that are not going to be online you get down to about $55,000,000 in deficiencies, so we are addressing $23,000,000 at the High School of the $55,000,000 total.

Discussion ensues relative to the structuring of the bond language.

Discussion ensues relative to air quality in the schools.

Discussion ensues relative to the need for 21^st century learning environments, taking the infrastructure and making larger instructional spaces within the infrastructure and security improvements.

The Town Manager explains that South Kingstown has the ability to go out and borrow money. The industry standard is that a community should not be spending more than 10% of its operating budget on debt service. With the $76,000,000 project that was in the Stage 1 application the community gets close to that 10% for a couple of years, and the number will be a little higher if we go with the $83,000,000 number. It would put us very close to the 10% warning line. We have lived so long without debt that the money has been spent for direct services. We put it into teachers and police officers. We don’t have as much flexibility as the debt ceiling that everyone looks at, might imply. If we are going to take on more debt, then we are going to have to have less educational and police services or we will have to increase the taxes. At the same time, 3% of the School Department’s operating budget will be required to go toward maintenance.

Discussion ensues on whether the Town Council will have enough information to authorize the submittal of a Stage 2 application for state housing aid to the RI Department of Education (RIDE) for a facility construction project(s) in order for Robinson, Green Beretta (RGB) to amend the application and submit by the February 15, 2019 deadline, or if the application will be delayed until the September 2019 deadline. The Superintendent expresses concern with the September 2019 deadline due to security improvements, having received pay-as-you go funding in the amount of $174,999 for work to be done this summer at Matunuck, West Kingston and Curtis Corner Middle School for security and funding for the Peace Dale parking lot, but only if the Rhode Island Department of Education Council on Elementary and Secondary Schools board approves the application in the “A” pipeline not the “B” pipeline. In the “B” pipeline the Stage 2 application is due by September with approval in November. We have approval to move forward on $500,000 worth of security improvements, three schools with pay-as-you-go money in the amount of $174,999 not to be bonded. The other half of our schools will only get those security upgrades and the Peace Dale parking lot redesign if the work is done this summer. If not, we will get it but it will be the following summer for all or half of our schools and that was a concern of a considerable amount of our school committee members. If the pay-as-you-go funding is not used by December 31, 2019 then we will have to bond in order to get that money.

The Town Manager indicates that he and the Finance Director agree that the Stage 2 application for 52.5% in state aid reimbursement should be submitted sooner than later because we run the risk of the program being disrupted.

The Finance Director presents the long-term debt program as it was built into the Capital Improvement Program. As of 2019-2020 the estimated cost to the average homeowner for debt service will be $82.00 and in FY 2024-2025 it will grow to $307.22. In FY 2020-2021 the new school debt of $76,000,000 will cost $98.85. The $500,000 for the Transportation Improvement Program will not generate any debt service in FY 2020-2021. Those bonds will be issued in FY 2021-2022. The $4,000,000 school bonds that are already authorized are scheduled to be issued in FY 2020-2021 but won’t generate any debt services until FY 2021-2022 and will cost $28.00. The existing debt service in FY 2019-2020 is $82.28.

The School Debt Service obligation for FY 2019-2020 is $1,036,073. It is offset by third party revenues from State School Construction Aid, the South Road School Debt Service Transfer and School related Fair Share Development Fees in the amount of $576,703, leaving $459,370 to be raised by property tax. The Town Debt Service obligation for FY 2019-2020 is $949,581 less Recreation related Fair Share Development Fees and Real Estate Conveyance Tax transfer in the amount of $365,076 leaving $584,504 to be raised by property tax for the Town Debt Service. The total projected tax requirement is $1,043,874. The planned property tax appropriation for FY 2019-2020 is $1,600,000 and is $556,126 greater than our tax need to plan for the debt we are bringing into the debt schedule. With the 4% tax cap we have to gradually increase our tax need in the debt service fund so that we can cover our debt expense when it comes on at full value in 2023.

The Town Manager comments this year we have to start raising taxes just to offset the growth in debt we see coming down the road. We have to start putting money aside for this now.

The following members of the public comment:

James W. O’Neill

Gary Chapman

Dorald Beasley

Bruce Waidler

Stacey Bodziony

Tara Apperson

Adjourn at 9:00 PM.

ADJOURNED,

Dale S. Holberton, CMC

Town Clerk