By HERALD STAFF The city has completed the sale of roughly $60 million in bonds to finance several capital projects, including the construction of a new Garden City Elementary School, the office of Mayor Ken Hopkins announced last week. "This transaction
The city has completed the sale of roughly $60 million in bonds to finance several capital projects, including the construction of a new Garden City Elementary School, the office of Mayor Ken Hopkins announced last week.
“This transaction is a sign of my sincere commitment to watching taxpayer dollars, strong financial practices and prudent investment in our public infrastructure,” the mayor said in a statement.
According to the mayor’s office, approximately $9.5 million worth of 20-year general obligation bonds were issued with an effective interest rate of roughly 2.1 percent. Another $51.43 million in general obligation bond anticipation notes was issued for a one-year term with an effective interest rate of 0.37 percent.
The mayor’s statement indicates the smaller portion of the sale – tied to previous voter-approved bond questions – will finance “expenditures and projects for roads, drainage improvements, sidewalks, public works equipment, traffic control improvements, playgrounds and athletic fields, fire stations, and public safety equipment.”
“As a candidate for Mayor, I promised that we would protect and enhance our proven financial success while addressing public infrastructure and constituent needs in our neighborhoods and parks and playgrounds. With this available money we will continue on a responsible program of upgrading and replacement of our capital assets,” Hopkins said in the statement.
The $51 million, meanwhile, will “be used for school repairs and facilities,” the mayor said, “with the largest portion going towards the construction of the new Garden City Elementary School.” The school, which dates to the 1950s, is being completely overhauled as a 21st-century learning space. It is expected to reopen to students in early 2023.
The city anticipates receiving significant state reimbursement for the Garden City School project, which is the first being completed as part of a five-year plan – and an associated $147 million bond question approved in November 2020 – developed by Cranston Public Schools. The mayor’s statement notes the Rhode Island Department of Education will reimburse between 54 and 70 percent of eligible costs.
Hopkins called the terms of the bond sale “very favorable for Cranston taxpayers” and pointed to “favorable recommendations to prospective bondholders” from major ratings agencies.
“Fitch Ratings assigned an AA rating to the new general obligation bonds and affirmed our AA- rating on our overall debt situation,” the mayor said in the statement. Standard & Poor’s, meanwhile, is said to have assigned an AA- rating to the city’s long-term general obligation bonds and an SP-1 rating to the $51 million portion of the sale.
“Fitch identified Cranston’s strong budget monitoring practices and solid reserve levels in assigning the ratings … S&P analysts cited Cranston’s strong budgetary performance with balanced operating results, very strong liquidity, debt coverage ratios and a strong institutional framework as part of the reaffirmed ratings rationale,” the mayor’s statement reads.
Hopkins’s statement highlights Finance Director Robert Strom, City Controller Michael Igoe, PFM Financial Advisors LLC and Janney Montgomery Scott LLC for their roles in the sale.