Bond Proposal Raises Concerns for Finance Committee

PROVIDENCE, R.I.-Citing concerns about the timing and potential risks included in
the administration’s proposed $40 million bond referendum, the Providence City
Council Finance Committee tonight unanimously decided to continue the ordinance for
further analysis and deliberation. The proposal, introduced by the administration
just two weeks ago, carries a looming deadline for ballot placement, involves a $20
million bond anticipation note (BAN), and lacks a clear and complete spending plan.

«While we all agree that it’s important to invest in the city’s infrastructure, it’s
crucial to ensure that the financing decision is made with a deliberate and
methodical approach,» said Finance Committee Chairman John Igliozzi. «We’re
uncomfortable with the idea of rushing a decision on the request for a bond without
properly vetting all the implications it could have on the city’s long-term
financial health.»

The request to seek a bond anticipation note is precedent-setting for the city, and
has the potential to expose the city to higher risks. Interest rates for both the
$40 million bond and $20 million BAN are still unknown; according to Igliozzi, those
factors and the city’s borrowing capacity also need to be considered before a
fiscally responsible decision can be made.

«We are the gatekeepers of taxpayer dollars, and we take that charge very
seriously,» said Igliozzi. «No discussions about the bond were held during budget
deliberations, which is concerning. It is important that we don’t push this through
without answering the important questions.»

«It’s crucial to understand how this impacts the city treasury relative to costs and
how spending decisions are made,» said Finance Committee Vice Chairman Terrence M.
Hassett. «City Council members are specifically seeking a fair and localized
improvement plan that will have a more direct, positive result.»

The citywide referendum deadline is August 10th.