Town Council - Special Meeting

No Smithfield Town Council meeting April 27th, 2026. Madame Clerk, can you s us with the prayer and pledge, please? Thank you for bringing us together today in a spirit of generosity. May we honor one another by keeping an open mind. May we voice our truth and listen with an open heart. May we discern your will to unite in a fruitful outcome. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Roll call, please. Mr. Beerod,

here. Mr. Christopharo here. Mrs. O'Hara here. Mr. Punchek here. Miss Elves here. Uh, open forum pursuant to 42-46-6D. Maximum 3 minutes per person. Does anyone want to speak at open forum?

Anyone want to speak? No one wants to get up. Renovations of Nosmfield public safety complex. A discussion by council vote other action on status/progress Nosmfield Police Station renovations. One, presentation of guaranteed maximum price GMP. Uh from ECC Corporation, Signal Works and Parasalt Builders. Uh, council president um the process that we will follow is obviously ECC and Parasalt will talk in your package um is a memorandum that provides a um summary of the GMP and total project cost um as well as uh Parasalt's GMP breakdown in that package as well. So they can make the presentation and then if you want me to go through the memo that I prepared then I can do that at your discretion.

Okay. Thank you.

Good evening. Can you hear me? Okay. Yes.

All right. We can do the presentation. Okay. So, um here today we have uh so ECC and then also we have representatives from Parasol right there. All four folks and then we have Signal Works as well. uh Brian um and then Dennis uh is with me at ECC. So what I'll do is I'll run through the presentation and then um Parasold can chime in on certain things relative to the um GMP and then if there's any questions we'll I'll basically direct them to each group if needed. Um first we'll go through the GMP the value engineering then the over um overall project budget. This is when um Scott will discuss his memorandum and then um we'll do the general status update um and then we can talk about schedule and phasing which is not a lot of changes there but just give like a general update on that as well. uh the focus that we wanted to concentrate on today specifically is uh the GMPA package. We can go to the next slide. All right. So, do you you should have a full um GMP uh breakdown and schedule, right? It's something that looks like this in your packet. Um, so we came in back in January and we presented sort of an estimate of what the GMP will be like based on our

estimates, based on some assumptions. Um, and this is the final this is what um it is and it is um just slightly under what was presented. So when we presented um the estimated GMP back in January, it was I believe 9.3 million but it didn't include abatement because it was kind of it was shown in soft cost and then it did include the elevator. So now this package is everything. It's 9,39526 and81. It has the abatement which is the same allowance we carried for 500,000. Um it has uh all alternates that were accepted which is the fire protection sip port parking lot upgrades. It does not include the elevator and um I will talk about it in the project update but the ADA commission has reviewed all the drawings and accepted the drawings uh the construction document set and deemed um our proposal as no need for the elevator acceptable. Um we also went through uh value engineering efforts um most of which were more of a streamlining scope. So it wasn't necessarily removing major scope uh but more uh of making it more uh streamlined cost effective and those I would call them more like value management efforts um also offset some of the overages that were within the GMP. So when you look in your in the document um hold on that yes so if when you look at this uh document here this chart

you can see there's a column that shows 116 update and then there is also a total 4326 update. So there are definite some variances. There are some ups and downs, but overall in general all in with what was drawn and all of the alternates that we've discussed, the GMP is on par with what we have been presenting a little bit less. Um, I will ask maybe uh Dan if you want to talk about some specifics on what were the overages and what were the savings um or answer any questions. Yeah, I think now

you can come up here Dan Butner. I'm project executive of Parasalt Builders. Um yeah, so our 116 date uh as um Eningga alluded to um has pretty well stayed on budget. We uh um included our number was about 9.35 million all-in. We included the abatement in this GMP update which would have had our all-in number about 9 uh million850. We've decreased uh and value engineered out the um the uh elevator as Eno alluded to. There were some ups and there were some downs as far as that comes. Some of our demo costs went up a little bit. some of our other costs went down. Um, and we do have the variances, but do we have that variance slides that um,

no, we actually consolidated discussion.

Okay. So, if you want I can go line by line or I can just give you a high level overview. Overview. Yeah. So, uh, concrete went down a little bit. Uh, we found some savings in value engineering and masonry. As I said, demo went up a little bit. Uh metals came down. Uh about 40,000 woods and plastics, there was some increase there. We have to do some additional work up in the ceiling um uh as far as uh the abatement goes. So, we have to do some uh um some additional structural wood framing up in that area. So, that went up a little bit. Um our thermal and moisture protection um came down. Um that was just through some value and uh some repricing efforts. opening stayed flat. Um finishes uh stayed pretty flat. Specialties stayed flat. And then um our sorry our MEPs came down. We got some better sprinkler numbers in um and doing some scope and some further walkthroughs. Uh plumbing stayed relatively flat and uh HVAC actually came down a little bit which was which was good to see. Um that was a value engineering effort through uh finding some alternate equipment that uh we um uh spoke with uh um Signal Works and their consultants with and found that acceptable as well just to get things into budget.

So can I just ask some questions on some line items? So why did why did the demolition come down so much? I mean it's like $75,000. What or actually go up. Sorry. Uh sorry. Demo went up. Correct. Mhm. Yeah. Um so, um we have to do some extra demolition as far as the abatement goes, um in a few areas. uh we had some walkthroughs uh that were specific to what those needs were and that was the reason for that

could just jump in. Is that also part of the need to take down hardboard that is hot? Is that part of the demo cost? Um there is uh some additional abatement costs in there that are in with the demo cost as well. Okay. But um yes. Uh so anywhere where we're touching walls within the building um we're doing major construction to that were outside of the demo drawings that those walls need to be abated and new drywall needs to go up in its place which is all found in the abatement and uh the demo allowance which we feel is robust as we've walked through.

Mhm. So, you're pretty confident that uh when you open up those walls, you're not going to find anything in there that you're not prepared for? Um this, look, the building's old. We've talked through this a few times, right? Whenever you open up walls and you do a phase renovation, you're going to find things that are unforeseen. And that's why we have a construction contingency of 5% that's built into this budget as well. And that's and that's what that's that's what that's used for. Okay.

I do feel that this budget's healthy. Um, we've gone through this GMP at length. Um, and I don't think that we're missing anything or there's any smoke or any mirrors in this. This thing's complete. There's a 5% construction contingency in there to solve just those problems. This is a GMP contract. Any dollar audited every month. All the backups in there. Every dollar that we save goes back to the town. Okay. And what about the fire suppression um savings? What does that mean due to phasing? Are we replacing it all or are we not replacing it? Like what?

There's no fire suppression system currently in the building. The upgrade of the building now is going to have a new fire suppression system in it. So it'll have a fully functional sprinkler system which is one of the alternates which is included into this GMP. So why did it come down from 75 to 20,000? It's a $15,000 savings. Now it's less.

Yeah, I think so. Our budgetary numbers on 116 when we walked through didn't include uh all subcontractor pricing. We were able to find better pricing throughout the market. Does anyone have any other questions? So, the earthwork and the um fencing, can you kind of go into that a little bit?

What division is it? 31. Um, you're asking for the delta, the $23,000 variance and the 39 for earth work. And then shoring and under pinning is 32 the other way and then 60. We don't need shoring and underpinning anymore because we're not putting in the elevator. Okay. And so some earth work changed uh in a few directions because we did eliminate the elevator and that's contemplated within that line. So what's the 40,000 change in earthwork? What is that? What line are you looking at? I'm sorry. Um 31-0000-

293 and it's up to 30 uh 33 uh 333. There's a $40,000 um there's a $40,000 change in that. Yeah. What makes that why? I believe that's as we reconfigured the numbers, we took the elevator out and we rewrote all the scopes that work. Some things changed in that and that's the reasoning for that.

And $61,000 in savings for fencing. Are we just not fencing or what is that? It's 32-31-00.

I don't know the savings in there. I know what's on those contract drawings is still contemplated in there. So, I don't know if we found an alternate or not, but I do know that um I do know that we still have everything that's in scope of the project. We haven't value engineered out the fence when, if I may. Mhm.

Um when we went through this exercise again, so in January, it was an exercise and it was more of an estimate approach. This was closer to the real going into all the subs and saying, "Okay, the project is happening." Soliciting three quotes or more. And when that happens, the subcontractors do sharpen their pencils a little bit. So, and also there were several GCOPE meetings with signal works and uh parasol builders on going through each drawing, going through all the scopes, making sure that things that um were there weren't just assumptions that they weren't just allowances, you know, there were actual numbers based on actual linear footages, actual products that were designed in the scope. So uh that is how you see some of the savings because we did provide a direction to parasol builders to make sure that the numbers that we see here are real numbers and they're reflective of what's in the drawings and also making sure that there's a nothing is inflated but also nothing is overseen.

I have a few comments or questions. Um so when you make references to provided by others others are your other subcontractors. So for instance concrete forming you have bearing plates provided by others. You just copied the scope of work from scope of work from word for word from from the so so you could get the detail of that but yes we own the bearing plates. Okay the contract. And then um you have a a line item here two line items. One is clean patch and repoint up to 25% of existing exterior brick. Does that equate to the,250 square ft you have in your exclusions?

I just like is 25% 2050 ft. Correct. And then same thing on the cleaning of the um limestone and granite. It's 15% in your GMP. Does that equate to the 110 linear feet in your exclusions? That's correct. Yeah.

In your exclusions, uh, this does not make sense to me. Maybe I need to read it again. Certain scope elements are fully coordinated or clearly defined within the current design documentation and as such may not be fully reflected in this estimate. Additional review by the project team will be required to further evaluate these items and assess any associated cost impacts. That seems backwards to me. What number you at?

33. If it's fully coordinated and clear or clearly defined, why is it not fully reflected in your estimate? should be aren't. Okay. So certain scope elements are not correct.

Okay. Uh that's all I have for the 20 minutes I've had to look at this document. So, one thing I think would be beneficial is if you could kind of give a um I hate to say it, but a layman's definition of what a GMP is. Sure.

And how this process is going to work. Is there going to be a cost savings share with the town? Um, we've had I won't say, but I think it would be valuable for people to know, you know, GMP. Yes. The word guaranteed is there. However, there can be changes for out of scope items. I think it's important for people to know that the guaranteed maximum price is uh what's represented on the on the paper, right? And those are to the contract drawings that also contemplates a construction contingency which we spoke about and that's for some unforeseen conditions that can come up through the project which we know will and

how is that spent? Is that solely at Parasalt's discretion or does the town also have input into how that 5% contingency is spent? The uh your contingency,

the construction contingency is uh normally uh controlled by the contractor. There are provisions within the contract that if we are going to spend any of that money for an unforeseen condition that we will give written notice to the town and get written approval, but it is part of the guaranteed maximum price of the project. Now, if you want to change scope and you want to add something or you wanted to add back in elevator is a bad example, but if you wanted an upgraded fence or extra plantings around the building and that was a change in scope, that would be a change order to the project and that would increase the that would increase the GMP. Does that make sense?

It all makes sense to me. I'm ask I want this all to be on the record for the general public to understand how this process is going to work. Sure. So just to you know kind of expand on what you just said. So say yes there's an out of scope you know town decides they want to change something the town so we've got your GMP number with your contingency. We have the town's overall project with another 5% contingency. Correct. That's correct. So we could say contingency. Okay. So we could go and say okay there's I think $450,000 or whatever it wasn't that contingency. We want to change something. We're going to take $100,000 of this contingency of our contingency and give you guys a change order on it.

That's correct. Yeah. And then if you got to the end of the project and there was some shared savings, right? Let's say hypothetically there was $250,000 or $300,000 at the end of our construction contingency and we were at a point where we felt comfortable enough if we were at 80 or 90% and said, "Hey, we really would like something a beautiful sign out front or something like that." um we would at that point feel comfortable being able to spend that out of construction contingency knowing that we were going to give it back at the end of the project anyway. So if for some reason you dipped into your owner's contingency for So we don't manage that construction contingency. We just have knowledge of what was spent on it

100% visible to you and it's defined within the contract documents on what it can be spent for and what it cannot be spent for. Okay. Uh, so I didn't mean to interrupt you if you want to continue explaining GMP. It sounds like you know the process as well. I just wanted I I just did that answer your question. Yes. Okay. Very good. Does anyone have any other questions?

I don't I don't have any questions at this time. Again, I we just received this as we sat down, so I haven't really had time to thoughtfully review. Um, but I think the questions that I would have had have been asked, not David's because David's are way out of my scope of knowledge. Um, but yeah, I would just appreciate, and I know tonight's a big decision, right? Tonight, we've we've been waiting for this information for quite some time. The public has been waiting for this information for quite some time. Um, I would have appreciated just having this, you know, maybe a few days in advance so we had more time to like thoughtfully review and thoughtfully respond. Um, but I don't have any questions at this time. They may come up, but none right now.

Okay. And just further to touch on the GMP contract, we've um uh through the uh proposal uh process, our um GC's are um fixed for a better term on the projects. Our GC's and our GRS that information already has for you. So those prices don't change. And then our fee is 3% at the bottom. And that that's that has not changed. That was part of the original uh

precon proposal. And maybe we'll get here, but I did have time to review your project capitalization, uh, town administrator, and I'm just wondering why there is this difference between the GMP number and then the numbers that you provided. Is this because we have a 5% town contingency?

There should be no should be no difference with the actual GMP, which is the construction cost at the top. That's exactly what they presented. I think that's also needs to be pointed out that okay the GMP is the construction cost. It doesn't include any of these soft costs that you know are listed here and I think that you know that causes confusion because exactly you see 10 $10,791,000 number people automatically go to that number. No, the GMP for construction of the building is just over 9 million. $9 million.

And and I and I know that you're going to want to go through some of the milestones that you've already reached. If you would prefer, I can take a couple minutes just to summarize the memo that's in your package, which takes the GMP and then looks at the total project cost and tries to net it out for what the net cost is to the town, if that has value to the council. I mean I personally think it would be helpful since we're talking numbers at this time is or would you like them to finish their presentation?

It's actually the next slide is this. So the GP overview was first we wanted to show you that and then the next would be the memo from Scott from the town administrator. So um if you look at the the document with the um with the tables on the front page uh dated April 27th um what I at the beginning did is to provide a historical context from the three times that we've presented numbers January 22nd of 26 March 2nd of 26 and April 22nd of 26 and as you'll see at the top base scope with all alts that is the GMP P and then what we start adding below that are some soft cost and the bottom line total construction cost of the GMP and soft cost. So in January 22nd we were at 11,511 March 2nd we're at 11,649 and on April 22nd we're at 10,791,000. Um keep in mind for example if you look at the March 2nd 26 number of 11 million uh 649 there were additional value engineering items that had been spelled out at that time which if applied to the project would have reduced the project cost to 10,646,374. We didn't I didn't show that breakout on the vees for this because they're all incorporated into the document and it was kind of an overreach but nevertheless wanted to show the historical. So if you look at the April 22nd 26 uh 2026 construction cost of 10 million 791 356

um which is shown in the top table that exceeds the March 2nd 2026 projected construction cost adjusted for those value engineering by $144,982 for a change of 1.3 36%. If you look at project capital, that is how do we fund this project? We show the municipal bond remaining amount, the department administration grant, the OEER grant, the Rhode Island energy incentive, and the dispatch grant. And we have total capital sources of 1,533 806. So therefore, if we adjust that down off the total construction cost of 10,791356, if we take out the 1,533086, you come up with a net cost of 9,258,270.34. Yeah, I have to throw the 34 cents in there. Sorry.

Um Scott, yes, clarifying question, that's not those aren't grants or incentives that are pending. And those have been correct awarded. Correct. That is correct. Okay. Those are all awarded. Now, um with with a with a the dispatch grant of a half a million has been authorized. We have not yet executed the grant agreement with the Department of Justice on that, but it's been approved and uh Lisa Ando is working on that right now to get that documentation over to us, but it's approved. Okay. So that would take care of the 527,000 for the dispatch system on the front page basically. Not all of it. Oh, it's we only have half, but yeah. Yeah, exactly.

Do you have this on the slide so we can put up or No. Um I do not have this. I'm sorry. Um I will post this on um on our site tomorrow so the public has access to it.

Now there are some other things that are pending here that I've thrown in. There are two change orders are being presented. um by the OPM and the architect. Those are in conversations. Those have not been approved. They would have to come back to the town council for approval. So, I'm just saying those are there. The other one is an additional federal earmark. We have 824,381 that has been submitted to Congressman Amo. That uh earmark has been moved out of Congressman Amos's office up to up to the White House now for approval. Similar process that we followed under the dispatch again through the Department of Justice. Now on that grant request of 824 which has not been approved um 150,000 of that is for a backup power generator and I put that in there when we had the opportunity to request money because our backup power generator is 30 years old still operating but I'm sitting there going okay the clock's ticking so He put that in there. The other two items, however, building security and monitoring systems 326,000 and the auxiliary garage of 348,381, those are included in the construction budget. So if we paid the change orders and if we received the money from uh Washington that our total construction cost um net of those capital sources is 8,83781 which is obviously below the $9 million. Now, on the worst case scenario,

the change orders through the OPM and the architect and we didn't get the federal grant, we're going to be around $400,000 over the 9 million. All right. So, that's what we're working on right now. Um, but we didn't include it at the top because it hadn't been approved either with the town council or by Washington.

Do you know the likelihood of it being approved? I would like to say that I have high likelihood in anything that goes on in Washington. I don't. Um, however, I can say that, um, funding requests through DOJ have been typically wellreceived, such as the $500,000 that we got. Um, the fact that this has been advanced out of the congressman's office up to Washington is favorable. That means it's been vetted through the congressional delegation staff. So, I'm optimistic about it, but I'm not I wouldn't deposit it in the bank right yet. Okay.

And can I ask a question about the change orders or we going to get there? So, I um we're not looking for approval, a vote on them today. We did submit them. I do have the packages um available which I can distribute electronically and here I have them printed. Um if if I could jump in on that. However, documentation and ration have been submitted to the administration regarding those two change orders. We're still reviewing them. So, I don't feel comfortable getting into a conversation about that tonight. It's going to come back to the town council for review and approval later, but I still have to vet through it myself. Can you give us any idea what they're for? Like,

yes. the what they're the from the architectural side, it's in part due to the fact that the project scope is larger than originally envisioned. We were looking at uh basing the architectural fee off of effectively a $6 million project. It's obviously bigger than that and architectural fees are typically linked to project cost. As it relates to the uh OPM uh request, it's because of the extended time period. Uh originally this project was supposed to be completed by the end of October of this year and it's not going to be completed until uh probably the first mid mid June of 2027.

So the cost associated with the OPM change order is for that change. Our contract is specifically went through um October of this year. Mhm. I thought we originally were told that we could start later and finish on time or earlier. So, why are we going I thought we were going to be done in the fall. What happened with that? You mean fall of this year? Yeah.

No, it's a 12-month construction schedule. Obviously, at this point, we're probably not going to be able to turn dirt you just a term um until June 4th. Um, we're still, you know, working on finalizing the final details. We now have a building permit. We received department of uh the the state approval on the ADA. Uh, so all those things have been completed, but I think originally we're hoping we'd be under construction by April, but it's it's going to be June. And what's contributed to that delay? What's that?

What's contributed to that delay? Well, the one is we delayed in terms of the execution of this project because we felt that going to market in late summer of of um last year would cost us dearly because the market was overheated. Um so we decided to delay that process and that in fact delays um everything else. Now, with that being said, and I don't and again I I will be talking to the OPM about this. When we reviewed those conversations about the delays and getting better pricing in that conversation, there was never a comment about, but that's going to translate into an increase in the OPM's cost.

That wasn't there. Um, I'm not saying that was by design. However, it was not there and the council wasn't right. Was was not aware of that. So, I I'll be clear about that. Okay. It aren't we also waiting on department of health approval of um abatement plans? Yeah, that's going to take 30 days and that's why we're looking at uh construction commencement in in first week in June. Uh we've we've completed the hazard mitigation plan that has to be reviewed and approved by Department of Health. That's typically 30 days. Okay, thank you for that explanation.

I have another question for Dan. Um, the special doors and frames. So, detention doors, frame, door, and hardware. I see it's an allowance. Now, I'm just curious. Uh, on January 16th, you had enough information to provide a number of $22,20 for that scope of work, and now it's a $105,000 allowance. What has changed significantly to go from something at $22,20 to something unknown at $105,000?

Right now we're working through the design and the controls of that actual system. It's a specialty contractor out of Indiana, which is the only one that we found, and we spent hours and hours and countless hours trying to figure this out. We're now working with uh the architect now on how we can mitigate that increase in cost. But we're still working through that. We just don't know. We're trying to spell out worst case scenario here and how we control these doors and how they function for uh Chief Lafery and the and the police department and also make sure that our costs are correct. Does that also include the cell doors? That's what we're talking about there.

Yeah. Okay. Yeah. And those I know were really high. Yeah. Mhm. Is that like industry standard or is it specific to our building? They're high because of the way that our building is. Industry standard specialty contractor. I can't go to Columbus store in Cranston and just um

to add to that um every so because of the open book and just to go a little bit more into the GMP specifically and how the contract is ran every time uh a subcontractor is awarded. So, for example, the doors once like they're awarded um we get a um u basically authorization to proceed from the CM that gets reviewed and any savings they go into the contingency. So, the money gets moved below the line. It's all presented to you. Um so, it's we see the movement of the monies within those line items. Uh and so it's fully transparent so nothing can be overlooked or sort of hidden and also savings can be applied towards overages or some other things within and at the end of the day if it's um there's monies remaining either the contract can get reduced by that amount or something else can be done for your choice. One more point.

We also haven't started the buyout process yet. So, I think Enga brought up a good point, right? And so, uh we'll give you a leveling sheet showing our three or four contractors for each trade um how their uh costs compare. probably do that within the building committee and um uh she is correct that uh we uh should see savings throughout that process. We always do. Our team's very good at it. So two to 3% probably be able to come back to the project is typical question.

Um excuse my ignorance. Okay. But I don't think you're Thank you. But um I just the word guarantee kind of is what I'm kind of bothers me because again it's not really a guaranteed maximum price because I don't know how it can be because if you have all on the exclusions page if you go down the exclusion page there's a lot that it excludes that may very well need to be done. So is it more accurate to say it's like a estimated maximum charge max ex estimated maximum price guaranteed maximum price is is the AIA name of the contract correct but a guarant it's not really guaranteed

I can guarantee that everything that I know to date right now and what's in those drawings that um has been accounted for there things that are in the drawings that haven't been accounted for and there things that to your point when you open up the walls you don't know that's that we do have a construction contingency for. Anything above and beyond that is change order. Yeah. I I just don't know how you can guarantee it.

Yeah. I It is a standard of the industry calling it that, but I get where you're coming from. I think it's important to point out, however, um you went with the CM process for this very reason. It allows us to manage the cost of this project much more effectively than if we simply did a design bid uh scenario. Um, it's not exactly as if the numbers that you're seeing in front of you are simply numbers that uh the OPM and the architect prepared using a standard means document. These are hard numbers that have actually been vetted through with subs already and that's why they feel much more comfortable with it. when they talk about buying out the project, they still will have these subs come back into the project and give their bottom line number which we based on experience expect to see some additional savings. So nothing is guaranteed in life but uh it's a pretty hard number compared to what you typically get under a design bid project.

You'd be have a difficult time doing this project bid build because of the phasing, right? So, it would be very difficult for any contractor to understand the phasing from the contract documents, what they would need for temp protection, how they would be able to move around the building and keep the uh police station operational while construction was going on. And we've contemplated temp offices, we've contemplated temp bathrooms, we've contemplated temp file rooms, um contemplated a lot that could never be um uh could never be drawn. Right. Just to piggyback on John's question. So, right now our construction contingency is $418,000. Now, you say that when we finalize between the three different contractors per essentially line item that we'll see a savings there. So, let's say $500,000 in in construction contingency. Do in your experience, have you seen Well, I'm sure you've experienced a lot of different projects, but do you is there a possibility that you open up the walls and it exceeds the $500,000 construction contingency or is that like very unlikely that we'll exceed construction contingency?

I can't I can't contemplate. I don't know what I don't know. I know that 5% is a healthy contingency on a $9 million job. I see them more in the two or 3% range. Okay. But just with the abatement that needs to go on with inside the building, uh the age of the building, we felt that 5% was uh was the right number to keep. Okay. Is that is that helpful? No, that is helpful.

I can add to it. Um again, we don't know what we don't know. We I don't want to put uh guarantee it if you will. Um but in we're basing this based on not just industry standards but also based on projects that we're on and working on our experiences as well as the experiences of the state that and projects that we see every day. Right? So that's what we do and that's what I've been doing personally for 20 years. In the past I have four projects right now that are in the finishing up stage and one of them is with parasol. Um, some of them are, I could say, maybe more complex, maybe longer. And right now, the three that are with the CM at risk approach are a zero change order projects. Uh, all three of them, we were able to finish those projects within um the GMP. So with the unknowns and with very difficult conditions and one project is similar in price and one is over um it's way over 50 millions in the 60s. So I I can say that I we don't know where we're going to open. We don't know if tomorrow something will happen right those are extremes but we feel that comfortable enough that within those values and these in my experience personally um this project and drawings and the amount of vetting that this took is way more um thorough because we had the opportunity to do that because the drawings were at construction document level um already almost last year. Um and we went through reiterations of couple of estimates and two GMPS um two GMP estimates more so than when sometimes we have to rush into it and

bring these GMPS say at design development or schematic design uh time uh phases. So um there's a lot more detail that went into this. Um I I know that the GMP you just received today mostly because we were trying to really make sure what we're presenting is accurate. Um we were looking for a vote on the GMP alone, not any of the changes or anything like that. Uh so that we can get started but again I understand if we have to defer that and for review. We can go through that in a little bit if you still have to go through the balance of the other slides and then we can talk about that.

Uh yes, we can go to project status update which is the next slide.

Okay. All right. So the building permit is received. Um the only thing that we are waiting on for to start construction really is the uh approval of the abatement plan which has been submitted to the state. It's completed. Uh we did submit um the drawing set the entire drawing set not just the elevator portion to the ADA commission. We had a couple of meetings with them. They reviewed the drawings. uh they had minor comments that we responded to and we received their uh approval of the set as submitted that was also shared with the building department that was part of the building permitting process. Um we uh one of the things that um we started is talking about kind of communication with the community and with everyone about the project progress. So um we have a we will have a website set up just for this project that a link will be shared next um well if maybe not this coming meeting on the force but the following months or in a few weeks uh with a QR code and then we can be emailed around uh can be linked to any of your other websites and sources that we will provide periodic updates maybe bi-weekly uh on the progress with pictures and etc. Uh the GMP is uh pending review today. Uh the start of construction is also pending on the GMP approval and review and any questions. Um and ours we do have a comprehensive schedule that's tied into the GMP that's tied into the drawings and uh from Parasol Builders uh with a substantial

completion in June of 2027. Who issues the permit for this project? The town of Smith, North Smithfield. The building department. The building department. Submit drawings for permit 15 days. Receive permit 10 days. Yeah, we got a little we already you got it early. Yeah. Yes. Oh, so we do have a building permit. Uh it's been paid for the town. So that's all set. But uh we are working through abatement right now and that's our one hurdle that we need to uh start. Was abatement contingent upon the permit. What was abatement? Like the abatement plan was contingent upon the permit or they two separate plan approved without a building permit.

Okay. Okay. Any questions? One thing we also started is furniture and equipment coordination. Um we still have time on that but we started looking at various options and vendors that will be uh procured for this. There's also been a lot of um conversation and meetings at the police department as it relates to the dispatch console and all the uh electronic uh improvements that have to go on with that. So, we had a meeting uh at the police department a couple weeks ago and they're still working through that as well. And that's a key element as to part of the furniture and equipment because the furniture for the console is unique. Um and quite frankly, not real cheap. Um but you know, we're working through that with a with a furniture budget. And are we continuing to look for any grants or any sort of funding for

We'll we'll always keep our eyes open. Obviously, our eyes are mostly focused on the federal grant because that's a big chunk of money.

Um but yes, anytime something surfaces that we think fits this project, which at this time would have to be at the state level because the federal process is already um underway, then we'll clearly jump all over that. One of the things that we um have also discovered um as part of the cons uh the um dispatch console is the whole issue of the telecommunication systems uh finding out there's some nuances on that as it relates to Cox versus um using um OSHAN which is a private um fiber system in Rhode Island that the we're being told has to be the gateway in order to to to connect with rely on energy or emergency management. So, we've gotten price quotes from um OSHAN uh to install that. Clearly can fit within this project budget. However, we're looking at an alternative to fund that and we'll come back to council in the notistant future. I think the total cost for the police station was something like $30,000. Is that is that right? both fiber and we have to bring it underground into the into the police station. But we have an idea as to how to fund that.

Go to the next slide. That's the next slide that we had some schedule highlights in there which I already discussed. Um and we also included a phasing plan. Um it hasn't changed. Uh we're still planning with the same phasing, but in case um there are questions or wanted to run through it, it's in the packet.

I I see start dates that reflect finish dates in the schedule. So are those realistic timelines so that we'll be complete by June 4th of 2027? If we begin in June of this year, 12 months has has been accounted for as a comfortable completion. It's our job. So the schedule here is the full project schedule. Full project schedule 500 lines.

So an exorbitant amount of time going through it set this project up for successful. No, I'm just familiar with like Microsoft Project and I see that the durations haven't been populated which means that the start and the finish hasn't been clearly articulated. So, I just wanted to ensure that those actually reflect realistic timelines and they just weren't okay.

Um, okay. Next slide is basically phasing Okay. Okay. Gotcha. Yep. Yep. These next slides represent the phasing plan. We don't have to go through those unless the council really wants to see what the phasing plan is. Chief's good with it. Yes, sir. We've been waiting on it on a weekly basis and it probably will be tweaked as the project moves forward. definitely will be tweaked as the project moves. I guarantee I mean can you just do like a brief overview of it?

This is a project manager on the project. He did a lot.

Hey everyone. Um see I'm Lucas. I'll be the project manager. Uh so we worked a lot about the phasing. Basically we broke it up into three phases. Um, so this is phase one, kind of where it's highlighted in green here. These are the areas that we're taking for our construction to start off with. Um, so we're taking either side of the building. We're building out some temp offices for the chief over on the right for what he needs. Then some other temp facilities with the two cells and the uh prisoner processing on the left here. Go to the next slide. So, this is still in phase one on the second floor. Um, again, the green is what we'd be taking over first on the first phase of the project. Um, in the bottom here, we'd be building out some some more temp offices for the chief uh where they would be able to to work during construction. Um, top right, we'll be doing a lot of the demo work over here as well as building out a 10 bathroom as we be taking over and taking down a lot of the bathrooms during construction. And that's it for pretty much phase one. We estimate in our schedule that that first phase would take about two months in the project. Go to the next slide. So this is phase two on the lower level. Uh this is the main bulk of the project. Uh the goal is to really take over as much of the building as we can. Um so we can do the majority of our work. as much as chief allows. Uh so we do the majority of our work. Um so this is us taking over the center section uh during phase two so we can um conduct our work. Again, he's got on the left side uh his temp cells as well as temp prisoner processing. And on the right side, he

has his uh his temp u evidence and records over there. This is the second floor in phase two. Um, again, we're taking over as much as the chief allows. Um, the main bulk of construction. Um, again, he would have his offices down here um, and access in the door right when he walks in. Um, and then we be take over uh kind of as much of the building as we can with with temp walls that would be up separating our space or his from his space. So that's it for phase two. Uh we estimate that to be six and a half seven months of the project. So be the main bulk of the project. And then this is the last phase. This would be us taking over the areas that were previously built out for his temp um facilities. the lower level be taking over uh the right side and the left side. Um kind of taking down what we built for temp and then putting in the final design. Go to the next slide and same thing on the second floor. Um taking over his his temp area and building out what we need to for our final design. Just a point of clarification, the the hazard mitigation process that all occurs what in first phase.

No, it's going to be phased. It's it's going to be phased in concurrent with the phases of the project. We touch the walls touch the areas. Okay. Thanks. So, our areas will be contained off um where we'll be conducting the hazardous abatement um from where the chief is going to be conducting his operation. is your assumption that all of this is done Monday through Friday 7 a.m. to 3:30 p.m. I heard that we can't start till 7:30. I don't know what So you're thinking you're like your phasing is based on regular working hours. That's correct. That's correct.

And you're good with that? In the future, will we be able to see prototypes so like the public can actually see what we're getting? Progress photos. Well, not progress photos, but like what is the space actually going to look like? Mockups. You mean like is that what it's called? There we go. Uh, this document is actually posted on our website. No, I mean like I mean like what the space will look like when it's done. Well, we don't have that in our budget to do visuals. What we do have, we are going to create a website that is going to provide all real time updates on the construction process so the public can see it at all times.

Photos probably what we often do is if we don't have renderings, we can pick like an area say and we can do photographs of that same area and then you can see how it evolves plus all the other photos. Are there any mockup requirements in the specs? Yep. Yes. for items such as

so not very exciting. So like what's the garage going to look like? What's the garage going to look like that the back side of painted? I don't necessarily need to see them, but I think it would be helpful for the public to see where our money is going, right? like these are these obviously make make sense at this point but like to understand what the end result is going to look like and I guess it's not in our budget but team creating some type of render let us talk maybe we can come back with something

Brian Buckley senior project architect sen works so yes no interior renderings are provided for in the scope of work or the project budget um we've made available the matterport which is a 3D walkthrough of the entire station. Um, so you the public can have access to that link and they can see the condition that it's in. And then I would agree with ENGA taking, you know, an area and taking progress photos so folks can see it maybe at the municipal court which will have the most public access. Maybe that's a really good opportunity to do so.

Um, in terms of the Sally port, it's going to be split face CMU with overhead doors. Not very sexy. Um, and then the storage shed out in the back of the site. It's going to look like a standard residential storage garage with uh clapboard siding. Again, nothing uh over the top. We were budget conscious throughout the whole design. Um, and then alternatively, we're going to have finish digital finish boards put together for um, you know, the finish schemes inside of you know the upper level versus the lower level which is going to be very utilitarian and then the municipal court. So there'll be opportunities to showcase kind of the flashy aspects of the project. Okay.

Anybody have any other questions? I had one. Um so in your exclusions, qualifications and clarifications. Number eight, we did not include commissioning agent costs in supporting commissioning activities and documentation by the trade contractors. Can you explain that a little bit further?

Uh yeah, we own um I believe through the contract documents we own um startup tab and training which is um typical. Uh hiring a commissioning agent is usually done third party through the OPM. We do not carry that. We don't have that. I don't think the building needs to be commissioned. It's not that um complicated as of a system that's going in there, but through training. That's what I wanted to hear you say. All right. We're not say like, oh, we turn it on and leave. No, absolutely. Okay.

So, just a quick question. So, what if we start going in and we find that we are running behind and with the statement that it doesn't include off shift rates, premium time, and or weekend holidays. How does that work if we're running behind in a project? I can speak to that real quick.

Maybe I should stay here. I don't know. Um, so, uh, we take schedule very seriously at Parasol. We just do. Um uh Luke's put together a comprehensive schedule um that gets updated weekly. So the master schedule gets updated weekly that gets imported into uh our document sharing source which is Procore. That's where we create our 3-week look ahead. Every month we pull every subcontractor on the project into our office and we have a pull plan meeting. um if anything's off more than a day or two or something that comes up, we know about it in real time and we talk about it in real time. We create uh strategies throughout that pull plan or make ready planning to uh recover schedule or loss time. A year-long phase occupied project, some things are going to go good, some things are going to get delayed or go behind. We're going to be fully transparent with you. Our goal is to always have a recovery plan that uh does not include overtime or uh shift rate or off hours rate work. We did exclude it. It's not part of our number. It's our last resource and we would hope at that point in the project we'd have to go to contingency. Correct.

Okay. Thank you.

Um we also take schedule very seriously and we review the schedule along with uh the CM. So we review it weekly with our look aheads. We also review it monthly. When we receive an update, we sit down and try to see where there could be any issues and then also definitely look into recovery protocols and processes. Uh again, we take that substantial completion. No one wants to run beyond that. If there is um things that are outside of our control like those weather days that we have to recover, we always have a plan. We can't control everything. Um we also work on sequencing and certainly if the delay is a fault of say a subcontractor you know we also have conversations and you don't have to pay for that uh those delays that we're talking about are mostly say you decided that we wanted the building to be done sooner than June or we go into contingency if there are 10 days missed or we couldn't go to the site for 10 days. So, we have to figure this out. Sometimes it's unreoverable. Uh like we had those snowstorms for example. Um but we we try to stay on target at best we can and and we are here as well and we review these schedules and constantly communicate and we have those weekly meetings for that reason. That's what will become part of those discussions.

Thank you. If I could also add into this about risk management. Um the town uh will be taking out uh an owner's uh risk insurance on this project. Uh we are working with the interlocal trust because this project is in excess of $5 million. Uh the interlocal trust cannot uh ensure the additional amount. So we are working with the interlocal trust um to to basically procure additional uh gap insurance that effectively protects the town effectively if things are in place and then there is a major issue a fire or something we're protected for that

and will we be using the town contingency to cover that insurance the cost that insurance will hopefully be able we'll have to pay for that right we we can one way or the other we can take it out of the DOA grant as allowed cost. Um, bottom line is it's going to be part of the O4 contingency. This is not going to that's not going to be an expensive insurance policy. I just want you to know that we are we are in the process of doing that to protect the town against unforeseen uh events on your planting allowance. That includes supply, install, and warranty. It's not just $10,000 worth of plants dropped off at the site, is it?

That's correct. It's unclear at this point what we're going to be when landscaping goes back, but that isn't it. Our scope of work for planting will be installed in one year guarantee. Planting typ guarantee. So one-year comeback. So once the project is substantially complete, we have a warranty for 12 months uh after completion on everything that has happened. And then typically within like around 10 months or so, we'll do like a review and then see if there's anything. But planting usually you plant and then plants that don't make it get replaced and it's part of the process and then we come back and look at them again. Typically they do a warranty walk after.

Yes. I have a hard time and that's in addition to so that is it's not everything has a 12 month everything has a 12 months warranty but then some items have a longer manufacturer's warranty right so like say equipment may have or a roofing may have 25 years and whatnot the 12 months is is purely through the construction process through the CM

I have a hard time with you excluding snow removal. I can understand you're not going to clear the parking lot that you're not using, but if you're going to be there through the winter and you have to clear the snow for your layown area, why would you exclude that?

I think you have winter conditions in there, which is separate. Where is it? Um I think we just came through a winter, right, which was uh extremely uh severe. Um winter conditions and snowplow removal and snow removal probably can be two different things. But if I have to clear the entire lot and the roof to get to my work and all that and I can't contemplate that, then then yeah, we have to we have to exclude that. We could certainly define it as sure my lay down area and parking, but if I have to go up there and shovel the roof off to stay on schedule because there's four feet of snow on it, then then that's something different.

The town already plows that lot through public works. I I get it, but snow removal is a very broad exclusion and we're not cleaning snow for them to be able to get into their office trailer. That's I would assume you mean if we have such a severe storm that we have to actually move snow from the site. Is that what you're referring to? Or just basically moving snow around. They're going to have a lay down area which in theory we're not allowed to go into. So why are we going to go and clear snow in their laid down area is what I'm saying. I think we can define they can define it a little bit better in terms of that particular what it means that snow removal. It's

that would be good. Yeah, we could certainly plow the areas that are uh that we're using and then if snow removal had to be done because and take it off of site, then we would define that as an extra cost and things like the exclusions in general can be um further defined uh during the contract negotiation. So what you're voting on tonight is the number and if there's questions on those exclusions, we can certainly we can certainly have further discussions on that to refine the exclusions to make them acceptable for make sense. Mhm.

Any other questions? I think it's important to point out that as demonstrated in my memorandum, we've been providing a historical review of GMP throughout the project. Okay. We are now at a point where it's been fine-tuned and we are comfortable in presenting that as the GMP. I would assume that after the adoption of the GMP and you go back to basically have buy out the project that they'll come back with a final number reflecting um not necessarily in the GMP but the savings that we get possibly through the buyout of the project

the on so that'll obviously be communicated as received to the council. So the buyout is uh a process that will continue through the project and we will be updating on those shifts. The the key here is that the bottom line doesn't change. So, in essence, what we're voting on tonight is that with all of the available information, the set of documents referenced here, uh, March 17th, 2026, the list of exclusions, any, you know, prior discussions, whatnot, are included in this 9,39,526 6 81 cents and I would ask that we round up or round down because

accounting okay accounting for pennies in constru and this is just crazy um not do you have accounting in uh your background do I yeah I'm a finance guy I I I let him around the pennies so basically we're saying that construction cost for this project based on the you know what I just laid out and um in you know general terms is what we're voting on that $9 million number that that is correct.

That's correct. One thing I think is is important to just, you know, call attention to is on this um this sheet we have here, there's a variance of $82.19 between the 111626 pricing and the 4326 pricing. One thing that you know is a a big number there is the fact that $500,000 was added into Parisalt's scope of work. So in reality the comparison would be you know if it was going apples to apples the comparison would be 9 million39609 to 8 million 539526. That's why I the GMP, but I also looked at the total project cost because

that that causes confusion. Yeah. Because we're because I think I thought the council would also want to see the total project cost, but we moved early on certain things that were not in the construction budget up to the construction budget. And that's where I think the confusion comes from. Well, I I was trying to look at the total project cost to show the the comparisons. Understood. But when when you're dealing with GMP for construction and then you go and say total construction causes confusion. It's total project cost is you know really soft cost our contingency our $529,000 road system. Exactly. That's to me the project

not the construction. So we track the entire budget. We work with SC with uh Mr. Gibbs on that and you are correct the total project budget and the construction costs in the GMP sometimes get used incorrectly but it causes confusion though. It does cause confusion you know because people go to you know the big number and then try to compare it back to the little number previously and it's not apples to apples. So, I'm just trying to make it clear that apples to apples comparisons on this construction GMP were the numbers that I stated. Mhm.

So, the only vote that we're taking tonight is the GMP. That's correct. We're not voting on the bond tonight. Correct. No, I going to talk about it, but no, there's no vote on the bond tonight. Okay. With that said, I will make a motion to approve the Parasalt GMP amount of 9,39,526. And I hate to say it, but 81 cents. Thank you, Councilman. I appreciate that. That's a motion. Is there a second? Any further discussion? Roll call, please. Mr. Burgod. Yes. Mr. Christopharo.

Yes. Mrs. O'Hara. Yes. Mr. Punchek. Yes. Miss Als. Yes. Thank you.

Thank you. As you know, we've been authorized to borrow up to $9 million. Um, I identified the progress that's been made and the remaining steps that have to be accomplished. First bullet is the approval of the GMP, which was just accomplished. Um, we also now have to meet with our bond, our underwriter, Moody's to grade our bond. Um, we cannot do that until the town council officially adopts uh a resolution which identifies the bond amount that they are borrowing. That a draft of that resolution is in your package for your reference only. But we have to get to that step in order for us to sit down with our underwriters so that we can basically find out the final uh pricing on this bond. Um the once the uh it's underwritten and goes to market, we're looking at about 30 days to closing. Um there we can actually have access to the money. Um a positive thing right now is that um we were on a conference call today with our fiscal advisor and we the numbers that I previously had presented to the council had us borrowing at 4.15%.

We are now at 3.77%. The market since September of last year has gone down about 38 basis points or 38%. So, um you can't speculate where this market's going to go other than the fact right now we're on the good side of that market. Effectively, we've seen because of the market changes about a 9% change to our favor which is which is great. Um so once we get the resolution passed, we get the bond underwriters to complete and go to market, we will complete the whole process. Um in my memorandum, um I clearly argue that I strongly recommend that we go full 9 million. Um in part because the cost of capital is pretty favorable. In fact, uh if we were investing our money in a in a CDR right now, uh we would be earning at about 3.7%. So, the arbitrage is almost at a break even, which is great for the town. When we do close on the bond, the bond will be put into an investment account and we will be earning interest during the 12-month construction period. Um I could project that for you, but it's not a it's not a big number. Um, I I'm recommending the full $9 million one because of the interest rates. Um, also because it was a path that was strongly recommended by both our fiscal advisor and our bond council. In essence, and I've said this on numerous occasions, the use of cash for long-term capital assets is not good business practice. Unless of course you're in a situation where your bond ratings are really bad and your cost of

borrowing are high, then in fact the arbitrage would be in favor of using cash. How I would argue if you had bad bond ratings, it's because you don't have any cash. So right now our experts that we hire to represent the town have both recommended to go full the full 9 million. Also by going to the full 9 million um that allows us to continue to maintain a strong cash position to be able to respond to both planned and unforeseen circumstances um in the future. And to me that is really critical right now. Um what could that be? We could have a I'm not wishing this. We could have a catastrophic problem with the water system. um we would not have town capital to match federal funds when we have those opportunities. Um and obviously maintaining a healthy fund balance strengthens town's credit reigning. And I might add and I don't think this is what the town situation is, but quite frankly um and and we had this conversation with our bond council today. This town has a pretty good reputation. It's got a healthy balance sheet. Um, they're comfortable with our school department and its spending pa ha behavior. It's comfortable with the growth patterns from the town, although they are somewhat slow, but they're they're okay with that. Um, where I get concerned is that sometimes we get surrounded by other events which we don't have control of, which don't speak real positive about the market. Um, we're looking around the state and we're seeing several municipalities that are in trouble. Um, and we would be naive not

to acknowledge that as being kind of a concern, but our fiscal advisor says, but he doesn't believe that those things that are happening right now will reflect on this town because of its fundamentals. Um, I'm also concerned by the overall state and what I consider to be a very anemic economic growth model. Um, and it's not getting better. But again, they will look at us as a isolated case saying that we're strong. But I will emphasize that we're able to weather those storms that are around us and not under control in large part because we maintain a healthy unrestricted fund balance. That's what gives our underwriters the peace of mind in when they take this um package to the investment market and to sell it. Um so for those reasons, I strongly recommend uh the $9 million um to and in your package is a draft resolution. you can read on your own and to go to um um Councilwoman Des Chris Christophar's request in the last page is a spreadsheet that effectively shows uh what the fiscal impacts would be over over various different levels of of funding from $9 million. This one, I think, goes all the way down to $6.5 million. Um, when they do these analyses, they're not assuming anything else is happening, meaning they don't take into consideration that we've just paid off a bond. This looks at the worst case scenario. And at the full $9 million, um, they're saying this would have an

estimated tax rate impact per 1,000 of 33 cents. It would actually be about 9% less than that because of the cost of borrowing has gone down. These numbers were based on 4.15%. Not the 3.77%. So it would be somewhere around 27 cents which not taking in consideration anything else. That's the worst case scenario on their on their projections. Um, and one final thing, and I know we're not talking about budgets here, I but I would be remiss not to note this, that in the administration's budget proposal, um, which has been submitted to the budget committee and it's fixed now and will be submitted to the town council in the budget process. We have identif we have recommended or put into the budget um, in the first and we can obviously look at the second year, but we planned it the second year. The first year, the bond interest and principal payments will be paid for out of the run unrestricted fund balance, and we're recommending that they be done the same for the following year. That would amount to about a $1.75 million commitment of unrestricted fund balance to this project. While at the same time however we are acrewing additional fund increases because of our ongoing operations. So through that process our fund balance still will remain fairly healthy one but two by putting it or paying for it out of the unrestricted fund balance. We are not making it part of the levy on the taxpayers. So they are not paying for that. We're paying for it out in restricted fund balance which goes to speak to council president Al's concern that there have been funds that were already taxed to the citizens that were part of the original bonding and we don't want to tax them again. Well, affect we're we're getting it paid

back by using our unrestricted fund balance over the next two years. So that's the approach that we've taken. Obviously that's in our budget. You guys are going to have to talk about that. That's how we've approached the issue. That's how we're recommending to approach the issue. So in summary, we strongly recommend the full $9 million to do anything less in our opinion is not good financial management of the town. So you're recommending the 9 million in the event we're not granted that congressional grant like because right now we have so we have construction cost net capital sources is 8.8. That's correct. So a few hundred,000 off nine. Okay.

Yeah. And and and and when we do pull the bond down, we don't get 100% of the bond proceeds because there are transaction costs that we're going to have to pay out of it. So, it's going to be pretty close to a break even scenario. Okay. Are we discussing what the administrator just proposed? Yeah. Or is that another Can't vote on it, but we can talk about it. Why um Well, hang on. We I understand that we don't have an official resolution, but why aren't we doing that tonight? I was under the impression that we would be doing that tonight.

We can't do it right away. We have to because we're going to have to act a formal resolution submitted to the council. It was the advice to present it tonight to tear it up and to h have an actual vote on the uh resolution at a subsequent meeting. The idea being it gives you an opportunity to take a look at it and then resurface it. It's not critical path right now, but it's starting to be because it's getting in our way of of getting this bond underwritten and go to market. Under the worst case scenario, we would probably be uh I would say we're going into this week is going to be May. If the council adopted a resolution in the May 4th meeting, we're probably going to be miday before Moody's does their final underwriting and we'll probably be mid June before we close, which would be perfect timing. The money will be teed up in times of requisitions coming in for the construction. If there was a slight delay, we can take money out of unrestricted fund balance and and and uh re reimburse us when the money gets placed.

So the estimated tax rate impact that you provided is assuming that we do not use any of our reserves to pay the first two-year payments. That's correct. Okay. Uh, no, no. The the 33 cents that is shown on that of $9 million that he has no idea what we're doing. He basically saying if he didn't do that, right? He said the increase would be 33%. Right? If you took 33 cents and you took 9% off of that, it would be like 27 cents uh increase on the tax rate. But since we're doing what we're doing, that eliminates that for the next two years, right?

Yeah. Okay. I mean, I know my initial request or my request a few meetings ago was to have really a more holistic understanding of budget inclusive of the bond, right? So we can understand how the bond dependent upon the amount that we approve would impact the levy. Right. True.

So it's helpful to see the breakdown and it's I mean I think the proposal to use the reserves to pay the first two years of interest. I'm not of the bond and interest makes sense. I think that's a creative approach, a smart approach. How does everybody else feel about that? I think it's a good approach, but is it kicking the can down the road? Theoretic?

Theoretically, yes. However, in 2028, we pay off another large bond and that's going to save us about a million4 a year in debt carry cost. So, it's kind of a nice timing. With that being said, however, there are improvements that are going to have to be made at the school department as it relates to the the high the high school. You know, how we phase that in, you know, is going to be critical. But in terms of the two years that we're addressing this issue, primarily to respond to the concerns about putting some unrestricted funds into this because we've already taxed the people and by buffering it in on the not putting it in the levy for two years is good for the taxpayers. But yes, sooner or later it's got to be part of the levy. But hopefully when that happens in 2028, we've eliminated the other bond.

So, um I just I don't I don't understand. So, um you want to you want to take the whole 9 million but still tap into our unrestricted uh fund for uh to pay the first two years. That's correct. So then, no, go ahead. in a sense that you're you're taking two years whatever that that amount is adds up to over the course of two years is that much less that you're going to be using of the bond. No, you're actually using to pay off the bond.

So you're using the first year to pay the first interest and principal payment and the next year you're paying the interest and principal payment. So effectively then the bond principle will be lower when we go into the third year fiscal year 2028. So, we aren't we still need the 9 million because that's what the project's going to cost us, but we're going to pay for the debt service for the next two years out of unrestricted fund balance so that the actual principal starts to go down.

So, in a sense, we will still be drawing down on our unrestricted fund balance. We will, but also during that two years period, we're going to be adding to the unrestricted fund balance just by op just by the the general money that we're typically acrewing every year through our operations. So if we're acrewing $900,000 for just to pull the numbers, usually been running about a million, then over those two years, we're going to be adding to the unrestricted fund balance 900,000 to a million each year. So effectively the money that we're adding on those two years basically reimbures the money we're taking out of unrestricted fund balance. So at the end going into fiscal year 28 we should be still at where we are right now on our fund balance which should take what 10.5 million.

So we we'll be at the same place but still addressing the levy issue. Yeah. So, John, based on the analysis that the budget committee completed, the first year, if we were to go for the $9 million, the first year it would cost us $85,000 and change. That would be our first payment. And then the second year, it would be $78725. So,

so that's about $1.6 million over two years. and what we expect to acrue in terms of surplus on those two years should be more than that. I think the only like one of the questions I can imagine we'll receive from the public is there's say we decide to only go for seven, right? Because we're saying that you know taxpayers have already paid for this. Let's maybe go for $2 million of reserves versus the $9 million total bond. There's really I don't want to say there's really only but like the difference between 9 and 7. the 9 million versus 7 million I think is like 888,000. So the taxpayer could say, "Well, why are we going to go for the nine when we can go for the seven and essentially save $880,000?"

I don't think there's an $880,000 principal interest change. Oh, you said through 7 million. Yeah. Yeah. But what that also means is that we can't fund the total construction cost out of the bond, which means we have to take money now out of the unrestricted fund balance or have to put into the levy. Okay? So, they're going to get charged for it. We're trying to buffer the impact on the taxpayer while at the same time maintaining the fund balance position that this town has which is clearly working in our advantage as it relates to our cost to borrow when we are quoting getting quoted 3.77%. That's good.

That's really good. Yeah. No, I think the logic makes sense Scott. I'm just saying I can imagine that will be a question and that explanation was helpful. Well, if that is the question, then the logic would be like, why stop there? Why stop at two? Why not go three? Why not go four? Why not go five? So, yeah. You know what I mean?

And and the fiscal advisor has been fairly clear. There is a point of diminishing returns. All of a sudden, you're going to start really impacting the town in terms of its ability to borrow the competitive rates. So, we're trying to manage that relationship while still helping the taxpayers through the next two years. So what what I would do unless you want me to do something otherwise um you would have to define for me when you want this resolution to be submitted to the council at what meeting and we will draft the resolution up at the level that you want us to draft it up at whatever level there is 9 million or whatever and then you'd have to vote on that.

Well, so in effect, we'd be voting for that tonight. No, you you're giving me We're not voting on anything tonight. Um, we're asking basically guidance. Um, but you will have to vote on it when it comes back. We're not officially voting on it, but in effect, we are because we're telling you which way you want to write the the resolution on. Yeah. Yeah. You you you you're guiding me, right? With gentle hands. Can can you do a couple of versions of the resolution? Sure. One at Well, I mean, you could take the ordinance or the resolution and you could amend it on the floor. Doesn't matter. Okay. So, then don't do a couple of versions.

That's all I have. Are you guys aligned with the with using the reserve for the first two years? like what's your because initially like I said my request was that I wanted to see how this factored in the budget before I felt comfortable making a decision on how much we should take. But I think using the reserve for the first two years towards the bond payment alleviates that um concerned and then in turn request. But I want to know what you guys think.

I think um when we budget, when we do a budget and we end up with extra money to throw into the unrestricted fund balance, I think that's kind of like a failure of properly budgeting. I don't think it's a great idea because we have a good amount of money in our fund balance. So, I don't think we should be taxing people to save more, to take their tax money, take money out of their pockets to throw it in the bank. So, there's no if if we do it if we did it right there, there wouldn't be a really big increase. We wouldn't be making that up in those in the next two years if if we budgeted correctly if we budgeted to not take money out of people's pockets in order to save it.

If if and I get your rationale on that. However, what this town doesn't want to do is go back to where it was and where it is today has a fact that it has been able to build up that fund reserve. The fund reserve has in part been attributed to the fact that our collection rates have been significantly higher than what historically we've experienced. So, we in the past we were looking at like a 98% collection rate. This past year, I think we're at 99.5%. And when you have that difference in collection rate, that means, and that's all part of doing the actual tax levy determination with the state, that means that we're actually getting additional money into our into our bank account because we're collecting more than what. So, what happens is when we go through this whole budget, we assume what the collection rate is and that's taken off in terms of determining the levy. But when our collection rate is higher than what we budget, then all that additional money is money, surplus money that gets put in our reserve. Um,

well, I'm with you. I mean, theoretically, one could argue, okay, well, let's not budget such a high collection rate. If if let's go down a little bit on that collection or not, let's not be let's let's not budget for 98%, let's budget for 98.5%. Or budget at 99%. Those are clearly directions that the council can take as part of the budget process. I just basically caution that we can't predict the future and that future can turn on us pretty quick and all of a sudden our collection rates are going way down.

Well, I'm with you and that's why I'm hesitant to tap into a fund. Back in 2016, our fund balance was just under $3 million. And it was Gary Isovski at the time was was the uh town administrator. Uh and we worked with Gary to uh it was Gary's initiative to get the fun build up the fund balance. And since 2016, we've built it up to a very healthy number. So that's why I'm hesitant to just tap into the fund balance to for the purpose of paying off what

when I use the term tapping into the fund balance it may be not the most accurate way to say that if we're generating the surplus surplus revenue effectively what we're doing is we're capturing that surplus revenue to pay off the bond but I use the analogy of the fund balance simply because the the approach is not to include it in our levy. That's why I I use the fund balance, but it's really basically using our surplus to to fund the the bond. It's the same. It's one half dozen or another. The end of the period, end of two-year period, our fund balance hopefully will be at the same point it is right now, and we effectively amortize two years of a 20-year bond. That's the hope.

You know what I'm saying though, Rebecca? like I I just don't know that if we're not guaranteeing that we're going to be able we're going to be putting that money back in over the next two years. We think we are, right? So, it's not guaranteed that we'll be collecting. Nothing is guaranteed. It's not guaranteed that it will essentially be a wash, right? That we'll be replenishing our reserves based on the collection rate. All I can do is look at history. current history and that has been consistent and there's nothing in our current budget process today that would would say anything otherwise.

However, the world can blow up next year. it could blow up and if and I don't use that word literally meaning something tragic can happen where our economy turns completely upside down but in that particular case the council's in a position at that point to say we're not going to do the second year using our reserves we're going to include in the levy you can make those decisions on a year-by-year basis but there's nothing in the cards right now that would insinuate that we have to worry about that When do we need our final answer on this? What's that?

No. Meaning like when do you when when is the drop dead date that we need to make a decision on bond on bond amount? Until the bond amount decision is made, we cannot go forward with the bond bond underwriting and the and the rating. We can't do it. Moody's won't talk to us until that resolution is passed. And then do we risk the interest rate changing if we wait? Yes. Okay. I mean theoretically the rate could go down, right?

But the rate could go up. I asked fiscal advisor today, what is your prognosis? And he said, I get that question asked every day and there is no answer. You do not know what the market's going to do. All I can say is since September of last year, it's gone down by 38.38%. Mhm. That's to our advantage. Could it go up tomorrow? Yeah. Could it go down tomorrow? Yeah. We just don't know. If I did know, I wouldn't be here before you. I'd be investing in Wall Street and I'd be rich like John.

I mean, I think with that being said, then I would still appreciate seeing the potential impact on the levy. Well, you have it. in in the totality of the budget in June. We're not going to have a levy until late June, right? And you're going to want to wait till late June before we take the next step. That's not that's not that's kind of risky. Why?

Because that means we're going to wait all this time to line up our underwriters and go to market and we don't know what's going to happen. I think we need to we need to go with what we know. we have what we know we have right now is 3.77%. Waiting 60 days uh I just really think is highly risky right now. Plus, I might add that we start pulling money down uh and in this case, we'll have to start using the unrestricted reserve to pay for construction cost.

And the arbitrage between what we're earning on our unrestricted reserves and what we're going to borrow at is almost nothing. So, we're not even taking advantage of the arbitrage, which works to the advantage of the town. that kind of situation doesn't happen frequently for us or any community and if it does present itself we need to take advantage of it. So, I understand where you're coming from, but you know, the the budgets by the administration has been prepared. You know, we you have a fairly notwithstanding what the council's, we have a fairly good idea. It's obviously under 4%. We're, you know, we're making some new capital investments in the town. Um, it's positive, but waiting until late June to make a determination, I just don't think is a good a good move from my perspective. May I ask a question?

Yeah. Kim, um, you were just I don't know if I have this right, but you were looking you were in favor of possibly you were looking into the possibility of $2 million because we've already uh if we did it the way he wants to, would that be a good compromise? Do you see that as a good way to, you know, because we are technically doing a million and a half, would you see that as a good uh Yeah, but could we do two versions of this resolution? One stating that we will do those like putting in the stipulation we will make those payments in the res can we put that in the resolution? I don't think that can be put in the resolution. Uh that resolution has to meet a specific

No one's going to be held to it then. Well, I'm not sure the the what they need to know is what the town is going on the line to say they will borrow. Any other nuances in that resolution isn't going to meet the requirements of the underwriters. They just want to know how much you're going to borrow that because that's what's happened before is they they've gone, you know, through the process and all of a sudden the community changes its mind and they're saying, "No, we want you to be clear as to what you want." I mean, the So, you can do a 9 million, you can do an 8 million, you could do a 7 million. Embedded in that conversation is what you want to do with the unrestricted reserves. That's going to be part of your conversation, but that will be reflected in what you're going to end up recommending in terms of the bond amount that's going to be in that resolution

and who's being held to anything. So, right, that's a good point. Well, but even even at that, so you say, okay, resolution goes through at 9 million. Assumption is that this council is voting on your first year's recommendation. Well, there was discussion about, well, maybe that the second year that doesn't happen for whatever reason. Maybe this is a totally different council and they say, "Yeah, that was a good idea. We do it again." Or, "No, that was a horrible idea. We're not doing that again for year two." So, I don't know that you have to hold anyone to it now. And do we really want to hold anyone to it?

No, I'm not asking you to hold anybody to anything in in the subsequent fiscal year. I'm saying the upcoming fiscal year, which will be a budget that will be before this city council. The approach is to use the fund balance to pay for interest and principle for the bond. What happens the subsequent year is going to be before possibly a different council or maybe the same council. I don't know. They can make any decision that they want at that point in time. It has no bearing on the fact that we went to market to borrow $9 million. Theoretically, the council in a subsequent year could come out and say, "You know what? What we're going to do, we're just going to advance pay down the bond. So, we're going to take $2 million out of unrestricted fund balance and we're going to advance pay $2 million in the bond." They can do that. They can do anything they want. What I'm saying is my approach is as it relates to this upcoming fiscal year, that's how I've attempted to address the issue. It has no bearing on what's done in future years by the council. But you just said for two years we're going to make those payments, but now you're saying only for one year.

No, I'm saying that my recommendation as an administrator, I would include that in the fisc year uh 28 budget. Whether or not the council agrees with that will be reflected in whether or not they, you know, how they opine on on the budget. So I don't write I can't tie the town on how it does this. All I'm simply saying is how I had recommended to approach it. What the council does is at the council's decision.

Well, I think I think your idea is a great way to um I think it's a great way to make everybody happy because we borrow the 9 million, but we pay out of our reserves the first two years the uh the payments on that $9 million for the first two years. And then we kick in um with the regular payments that we budget for the regular payments. And that way there we're we're we're appeasing the people that believe that we should tap into our reserves and we're appeasing the people that think that we should borrow the whole 9 million and we're and not not forget about appeasing anybody. We're also doing the right thing. The smart making the smart financial move. That's the most important. The intent on my part is not to play a game. Right. I know

I'm not doing a shell game here. I'm doing life does serve that purpose. But I agree it's the right financial move. But two things. So what we're saying is we may decide on the $9 million bond contingent upon paying with the reserves for two years. Correct. So how do we set that in stone that we we can't we so we can't there's no possibility I will ask I will ask bond counsel tomorrow whether we can integrate that wording into the resolution.

Okay. And if bond council says yes then obviously then we would present that as one option that the council can consider. If she says no, you can't do that, then we can't. It won't fly with Moody's.

And then one more, and I know that you explained this, Scott, but can you explain this one more time in like lay people terms, our residents can say, okay, the first two payments are roughly 1.7 million. So, we're putting $2 million towards the first two payments towards the bond. That's essentially throwing away, not my words, I can just see that this I could hear this being said, roughly $800,000 because that's the difference between nine and seven in in interest. But your response was, well, explain what explain your response. Say it again.

My resp response is is really very simple. Um, and it probably won't be well received by all people. Um, which after a year and a half I'm getting accustomed to that. But the bottom line is I understand all the conversations. It doesn't make sense to fund long-term capital assets with cash.

It doesn't make sense, especially in this market. This is what prudent municipalities do. And when you look at various organizations who basically research and recommend this kind of stuff, they all say the same thing. Use debt for long-term assuming your community credit rating is favorable so that you're not borrowing at exorbitant uh rates. Um but there is a certain principle called intergenerational equity which is that if you fund everything upfront effectively the current taxpayers of paying for everything upfront

but if you pay for it over time the generations that will benefit from this over the 20 years are effectively paying for it. They're paying a fair share of that. to frontload everything is really I think takes away from that that that which is a fundamental principle of municipal finance. I've heard that before. I think you may have heard from a different perspective but yeah. Do you know how many homes we have in the town of North Smithfield? Not a clue. No. All of them. No, I know all of them. But like did you say all of them? All of them. I I I can 4,800 4,800 roughly.

Okay. Because I'm thinking that if you take 888,000, that's really the difference between the nine and the seven. You divide that by what? 20. So 20 years because it's a 20-year bond. I'm not good at math, so bear with me, Tony. If you divide it by a 20-year bond, that's $44,000 a year. So then you take that 44,000 and you divide it amongst 4,800. I know that obviously based on the value of the house that they may be paying more or less for the bond. But so you take 44,000 and you divide it by 4,800 and that would give you $9 $9 $9 a year. $9 $9 a year per Okay. Okay. Administrator.

Put your mic on. Administrator. So, the difference between doing a $7 million bond and a $9 million bond is 9 cents per,000. And then you can multiply that over the cost of however much your house is. Okay. Which is what the financial adviser had done for us with the 350,000, the 550, the 750. No, I know. And keep in mind the 800,000 that you're referencing is 800,000 over 20 years. Right. Right. Right. So, administrator, can we take two votes? Number one, how much money we going to how much money we going to um borrow from the are we going to do the whole 9 million or not as one vote. And then we can worry about how we're going to

at least we can get the ball rolling with that. And then we can worry about how we're going to fund the n the 9 million after if we're going to do the two-year thing. We can't we can't vote on the bond tonight. No, not tonight. But I'm just saying for your purposes. Yeah. I I think the most important thing I want to come out of this with not tonight but ultimately is how much you're going to borrow. Right. That's what our That's what our under that's what our underwriters want. Okay. The other factors that we're talking about here are gerine to the conversation and I'll see if we can incorporate that into the resolution. If not, you'll have to figure out a different way. I mean, obviously, you can't obligate a council in the future to to do anything. All you can do is obligate yourself as a sitting council what you're going to do this year.

Yeah. Well, yeah. All right. So, we we do nothing and we wait to get hear back from you. We urge Scott to come back with a resolution with a value in it. That value being $9 million. Correct.

And and what I and what I would want from the council is when they would want that issue taken up. Uh next council meeting is May 4th. I know we have another issue on the docket, but I think that issue is going to be a lot shorter than people think it's going to be because of some logistical issues. So, it's we can have this conversation on May 4th or we can have this conversation on May uh 18th. Fourth is good with me. Might as well do it sooner than later. Okay. Okay. Okay. Thank you. Sorry to be longwinded. No,

it's okay. I ask a lot of questions. Thank you. All right. Uh, next one is open forum pursuant to 42-46-6D maximum three minutes per person. Does anyone want to speak? Anyone? But did we need to make a motion on the resolution? No. Okay. All right. Uh take a motion to adjurnn. Motion to adjurnn. All in favor say I. Meeting adjourned.