Letter: How does the math on school bond debt work?
According to School District calculations, Warren’s share of the $200 million school building bond is 37.82% or $75,640,000.00. Based on the current budget and the audit report, how can this be accomplished?
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Letter: How does the math on school bond debt work?
To the editor:
In the May 15, 2024 Warren Times Article reporting on the $200 million school building bond, BWRSD Superintendent Ana Riley noted “considering Warren already has to budget $1 million for three settlement payments (including one for the upcoming fiscal year, and two in subsequent years), they’ve essentially already budgeted for the looming interest payment on the school bond when that becomes due.” Riley is further quoted, “In FY25, FY26 and FY27 they are paying off the settlement…They’ve already created room for a $1 million payment in their budget by paying this lawsuit. So when we get to FY28, they’ve already got it built into their budget.”
This may not be a completely accurate representation of what the Warren Town Council has done. The Town has asked the State for an amendment to RI General Law 45-12-4.4, which will allow them to go out and finance (by bond) the settlement costs up to 10% of the most recently adopted Town budget (the current statute allows for up to 5%). If this is done, general obligation debt service will attach.
On April 17, 2024 the FY 2023 Warren Town Audit was published (Period ending 6/30/2023) the Long-Term Debt narrative section noted:
“At the end of the current fiscal year, the Town of Warren has total general obligation debt outstanding of $8,564,145 entirely backed by the full faith and credit of the government.
State statutes limit the amount of general obligation debt a governmental entity may issue to 3% of its total equalized valuation.
As of June 30, 2023, the Town of Warren’s ratio of Town Debt to net taxable valuation is 2.1%.
The current debt limitation for the Town is $43,933,707 which significantly exceeds the Town of Warren’s current outstanding general obligation debt”.
As recently as the May 14,2024 Warren Town Council meeting it was acknowledged that this audit does not reflect the Town’s current financial condition.
According to School District calculations, Warren’s share of the $200 million school building bond is 37.82% or $75,640,000.00. Based on the current budget and the audit report, how can this be accomplished?
Thomas D. Gordon
Touisset Road
