Report of the Providence City Council Bond Study Commission

REPORT OF THE PROVIDENCE CITY COUNCIL BOND STUDY COMMISSION

JULY 7, 2015 Table of Contents

I. Background...... 1

II. Bond Finance Basics...... 2

A. Types of Debt Financing...... 2

B. The City’s Credit Rating and Debt Capacity...... 5

C. Cost Factors...... 5

III. Current Inventory of Bond Finance Projects...... 6

A. General Obligation Bonds...... 6

B. Providence Public Building Authority (PPBA)...... 7

C. Providence Redevelopment Agency (PRA)...... 8

IV. Pending Projects...... 8

A. Schools...... 8

B. Sidewalks...... 9

C. Streets...... 9

D. Sewers...... 10

E. Public Buildings...... 10

F. The Streetcar Project...... 10

G. Downtown Parks...... 11

H. Summary...... 12

V. Conclusions and Recommendations...... 13

Exhibits...... E1-E6

Appendices (available online (along with a full electronic copy of this Report) on the City Council’s website at http://council.providenceri.com/reports-publications. )

i Table of Exhibits

1. Providence Home Rule Charter, Section 812

2. 2015-16 Capital Budget

3. 2015 City Council Resolution No. 157

4. Table of Existing Bond Debt

5. Chronological Table Of Issued Bonds

6. Table of Issued Bonds By Issuing Authority

ii Table of Appendices*

A. First Southwest Credit Rating and Debt Overview (April 15, 2015)

B. Internal Auditor’s Review of City’s Bonding & Debt (Originally presented March 25, 2015; Revised April 10, 2015)

C. Providence Phoenix Article, “Discretionary Spending”, October 26, 2000

D. Fanning Howey School Facilities Master Plan

E. October, 2014 Department of Public Works report on sidewalk repair

F. VHB Presentation on Providence Street Paving Project

G. Providence Streetcar Project

G-1. March, 2014 Full Plan Description G-2. April, 2015 Plan Summary Presentation G-3. Route 1A Revision Explanation G-4. Phase 1A Summary Presentation

H. Downtown Parks Conservancy Letter Proposal for Downtown Park Improvements

I. First Southwest Bond Capacity Projections

* Readers can view the appendices online (along with a full electronic copy of this Report) on the City Council’s website under the “Publications” tab, http://council.providenceri.com/reports-publications.

iii At the beginning of the 20th century, Providence was a mighty and wealthy City, a national leader in industry and technology. The City attained these heights with the support of a sturdy foundation of public works (including one of the nation’s best water systems). In the century that followed, a number of economic challenges (and a hurricane) sapped the City’s fiscal strength. At first, the City government postponed facing these issues; however, two major bills came due in the past term. In 2011, the City took drastic measures to avoid insolvency. In 2012, the City acknowledged a daunting pension deficit and took measures to address it. A third, overdue bill remains in the form of the City’s infrastructure deficit. Across the City, crumbling schools, streets, sidewalks and sewers drag down the quality of life for City residents, the quality of education for the City’s children and the City’s overall fiscal health and economic development. To rebuild Providence, we must plan with purpose and discipline, basing each and every decision to invest limited capital resources on a clear and comprehensive understanding of all the City’s needs. We must understand how “yes” to even the most valuable capital project also means saying “later” or “no” to others.

This Report provides the tools for careful capital borrowing decisions. In the sections that follow, it will describe the basics of bond financing, review the City’s current portfolio of outstanding bonds, list pending capital needs, and make recommendations about how to make future bond issuance decisions more systematic and transparent.

I. Background

Section 812 of the Providence Home Rule Charter calls for the Mayor to submit, and for the City Council to approve, a 5-year capital budget in conjunction with the review and passage of each year’s operating budget. Exhibit 1. In recent years, however, the City has not presented or approved a capital budget. See Exhibit 2 (2015-16 capital budget). Instead, capital projects and bond have been proposed individually, without providing an opportunity to consider how the project affects other competing priorities.

Based on this history, the City Council passed Resolution No. 157 on March 5, 2015, approving the formation of a study commission to develop “in a single place, a comprehensive inventory of current and previous bond issues, proposed future issues, and the interaction of bond issues with the City’s overall credit rating.” Exhibit 3. The City Council President appointed the following Commission members:

Councilman Samuel D. Zurier, Chair Councilman David Salvatore, Vice-Chair Councilwoman Jo-Ann Ryan Councilman Kevin Jackson Brett Smiley, Chief Operating Officer Alan Sepe, Director of Operations Robert Azar, Deputy Director of Planning and Development The Commission held five meetings to assemble information about the City’s bond finance program, covering the following topics:

March 25: Inventory of existing bond issues April 15: Bond Financing Alternatives and Credit Rating May 13: Streetcar Project May 20: Public Works: Schools, Streets, Sidewalks and Sewers (Part I) June 17: Public Works (Part II), Parks

Based on this information, this Report will cover the following topics:

1. Bond Finance Basics 2. The City’s Current Bonding Commitments 3. Pending Projects 4. Recommendations and Conclusions

II. Bond Finance Basics

As of June 30, 2015, the City had approximately $455.7 million in outstanding debt obligations. Exhibit 4. See also Appendix A, p. 15.1 Of that amount, $99.1 million was general obligation debt, while the balance was issued through alternative financing vehicles described below. The total debt obligation at that time equaled $556.62 per Providence resident, and 4.24% of the City’s “full value” tax base. In the recently concluded fiscal year (ending June 30, 2015), the City paid a total of $67.1 million in debt service, amounting to approximately 10% of the City’s operating budget.

A. Types of Bond Financing

The City has three different types of authority to borrow money, and three different types of debt it can issue.

1. General Obligation Bonds

In order to issue general obligation bonds, backed by the full faith and credit of the City, it is necessary first for the City Council to enact (and the Mayor to sign) a bond ordinance, and then for the citizens to approve the ordinance at a general election. The City Charter requires that the bond ordinance and referendum contain certain kinds of supporting information, including the cost of the project, an estimate of the project’s “period of usefulness,” an estimate of the cost of capital, and a declaration that the proposed borrowing is in compliance with State and Federal

1 Readers can view the appendices online (along with a full electronic copy of this Report) on the City Council’s website under the “Publications” tab, http://council.providenceri.com/reports-publications.

2 law. For example, the City’s voters approved a general obligation bond for road repair as part of the November, 2012 general election. The next general election will take place in November, 2016. As of June 30, 2015, the approximate level of general obligation debt is $99.1 million.

2. Revenue Bonds

State law has created two alternative ways for cities to manage their capital budget through what are called “revenue bonds.”

a. Providence Building Authority (PPBA)

The first alternative is the Providence Public Building Authority (PPBA), established under R.I.G.L. §§45-50-1 et seq. The PPBA holds title to all of the City’s buildings (including its school buildings), and the City pays the financing costs for the bonds issued by the PPBA. (The City also pays the cost of maintaining its buildings.) These bonds are called “revenue bonds” because the cost of the issuing authority (PPBA) are supporting by matching revenues (lease payments from the City). In contrast to general obligation bonds, however, PPBA revenue bonds do not require voter approval. Instead, the bond issues are first approved by the PPBA, and then by the City Council.

For school construction projects, PPBA works in conjunction with the Rhode Island Health and Educational Building Corporation, or RIHEBC. Under State law, most school construction projects are eligible for partial State reimbursement based on the issuing community’s relative ability to pay. The City of Providence typically qualifies for State reimbursement at a level of 80% or higher.2 In order to qualify for the State subsidy, the school district must submit the project for approval by the Rhode Island Department of Education (RIDE), which assesses the need for the project, its cost-effectiveness, and its effectiveness in achieving certain educational goals. For many years, the General Assembly allocated sufficient funds to reimburse all RIDE-approved projects; however, in 2007, the General Assembly imposed a moratorium on new projects, excepting those requiring funding for basic “warm, safe and dry” repairs. In its 2015 session, the Governor’s budget provides for $20 million to fund new projects; however, this amount is only a small fraction of the need in Providence alone, and Providence accounts for only around 20% of the State’s total public school population. RIHEBC assists the PPBA in packaging and issuing bonds, and providing reimbursement of financing costs. With that said, however, PPBA remains responsible for issuing the full amount of the bonds, which affects the way in which rating agencies assess the cost of borrowing and the City’s financial ability to borrow other money.

2 For projects approved in FY 2013-14, the State school housing aid funding ratio for Providence was 81.1%. See Rhode Island Education Aid (House Fiscal Staff, September, 2014), p. 143.

3 b. Providence Redevelopment Agency (PRA)

The Providence Redevelopment Agency (PRA) was established in 1947 under a State program to clear “blighted and substandard areas” for urban renewal. Within designated “redevelopment areas,” the PRA has the authority to acquire land (including by eminent domain), develop the land, to sell and lease the land it acquires, and to finance projects through borrowing. The PRA’s activities are supported by City revenues. The PRA gains authority to issue bonds through authorizing legislation enacted by the City Council and signed by the Mayor. The PRA is housed within the City’s Planning Department.

3. Tax Increment Financing

The State has authorized cities and towns to issue bonds based on tax increment financing (or “TIF”). R.I.G.L. §§45-33.2-1 et seq. The general premise of tax increment financing is that certain investments will facilitate development, and the development will grow the tax base. If the expected growth of the tax base is sufficient, then it becomes possible to fund the project exclusively out of the increment of increased tax revenues. To accomplish this, the City Council establishes a “Tax Increment Area” of properties that are expected to provide increased tax revenues as a result of the project. The City measures the “baseline” revenues generated by the Tax Increment Area. Then, with the help of a consultant, the City prepares a model that projects anticipated revenue growth from the proposed project from two sources, namely “natural growth” (that would occur without the TIF project) and additional growth in values from the TIF project itself. The City Council can then approve the issuance of TIF bonds which, under State law, will be funded exclusively from the “natural growth” and “project growth” revenues, but not the “baseline” revenues. The State’s TIF law provides that the project will not obligate the City’s full faith and credit or otherwise limit its bonding capacity.

The expanded capabilities the TIF program presents are subject to practical limitations. First, although a TIF project is designed to “pay for itself” with growths in revenue resulting from the project within the Tax Increment Area, a portion of that obligated, incremental growth is the “natural growth” that would occur without any project all. In other words, the City will lose the use of the “natural growth” of the Tax Increment Area in funding its operations if it approves the TIF bond. Second, the project’s commitment of revenues has to be sufficiently convincing to attract investors who are willing to put their money at risk. Third, if the TIF payments fall short, the City may decide to make the investors whole, even though the City is not legally obligated to do so. If the project is sufficiently identifiable with the City, then the City’s bond rating may be damaged by a failure to pay notwithstanding the legal separation set forth in the State TIF law. As a result, it may be prudent to reserve extra bonding capacity for a TIF project even if it is not legally required. Finally, the State’s property tax cap law limits the increase of a city or town’s tax levy by 4% annually, and the increased revenues within the Tax Increment Area count against this cap.

4 B. The City’s Credit Rating and Debt Capacity

The City’s cost of borrowing is largely determined by its credit rating, which is assessed by three major rating agencies (Moody’s, Standard & Poor’s and Fitch). All agencies assign a top rating of AAA. For Moody’s, the lowest “investment grade” rating is Baa3, below which (Ba1 and below) credit ratings are “speculative grade.” For S&P and Fitch, the lowest “investment grade” rating is BBB-, below which (BB+ and below) is “speculative grade.” The agencies rate each of the City’s different bond issuing vehicles, as well as each individual TIF. According to First Southwest (Appendix A, p. 3), the current ratings for the City are as follows:

Issuing Rating Agency Authority Moody’s S&P Fitch City General Obligation Baa1 BBB BBB PPBA/RIHEBC A1 A1 A1 (School buildings) PPBA Baa2 BBB- NR PRA Baa2 BBB- NR Manchester Street TIF NR BB BBB+

In short, the City’s credit rating is generally one or two steps above the minimum “investment grade” rating, except the school bond issues earn a higher rating due to the State’s participation. The City’s credit rating has maintained this level since the Spring of 2012, when the rating agencies downgraded the ratings due to the risk of insolvency. Providence’s Baa1 rating from Moody’s for general obligation debt is comparable with peer communities in Rhode Island and the region.

In developing an overall rating, agencies measure the City’s financial position against such benchmarks as debt per capita, debt service costs as a percentage of the operating budget, current and accumulated operating budget surplus and pension and pension benefit obligations.

C. Cost Factors

When issuing new debt, the City can choose the term for paying it back. A longer payback term will reduce the annual payments, but will increase the financing cost over the term of the bond. Also, the interest rate assigned to the bonds can vary with their term (as well as the City’s credit rating). First Southwest illustrated how these different factors apply with the following alternative costs for a $1 million bond issued at 5% interest:

5 $1 million bond, issued at 5% interest Term Annual Debt Service Total Interest Paid Total Finance Cost (years) 10 $129,500 $295,000 $1.295 million 20 $80,275 $605,500 $1.605 million

Appendix A, p. 17.

The gaps in total interest paid increases as the interest rate increases. The interest rate also varies with market conditions. The current interest rate “spread” between 10-year and 20- year borrowing is less than 1%.

Another useful rule of thumb is to ensure the term of the bond does not exceed the “useful life” of the project that is being financed. Many of the benefits of the 1996 and 2000 “neighborhood improvement” bonds dissipated years ago, but Providence will continue paying off these bonds until 2018. Similarly, Providence still has several years left before it will pay off either the 2010 PRA bond or the 2011 “green energy” bond, the main proceeds of which were immediately liquidated to close a deficit.

III. Current Inventory Of Bond Finance Projects

The City of Providence currently has an inventory of 24 outstanding bonds dating back to 1998. See Exhibits 5, 6 (summary tables). See also Appendix B (full report by Internal Auditor). In some cases, the City repackaged and reissued old bonds in order to save financing costs due to a decline in interest rates. These refinancings have made it difficult to provide a complete description of the inventory based on purpose, cost, date and other categories, but the following partial description will help provide a general understanding.

A. General Obligation Bonds

The City has six outstanding general obligation bonds, four of which funded the 1996- 2000 “neighborhood improvement” program.3 Under that program, the City issued two bonds of $50 million each to support a variety of neighborhood projects. The proceeds were divided into 16 separate accounts, with each of the 15 City Council members controlling a $2.2 million account for each bond issue, and the Mayor controlling the balance after paying finance and other transaction charges. Certain expenditures that provided transitory benefits in relation to the 20-

3 Because some (but not all) of the projects in 1996 and 2000 were eligible for tax- exempt bond financing at a lower interest rate, the City issued two bonds each time (on taxable and one tax-exempt) for a total of four bonds.

6 year term of the bonds. For more information, see Appendix C.

The City has issued two other general obligation bonds. In 2010, the City borrowed $14.5 million to purchase and lease back decorative city lights. In 2012, the voters authorized the $40 million road repair bond program.

All told, the six general obligation bonds had an original issue value of $127.6 million, of which $99.1 million remains to be paid at a financing cost (last fiscal year) of $14.5 million.

B. Providence Public Building Authority (PPBA)

The PPBA has issued a total of 14 bonds that are currently being paid. The total original issue value of the bonds was approximately $415 million. The current unpaid balance is approximately $302 million, and last fiscal year’s financing cost was approximately $31.8 million. A more detailed description of the bonds follows.

1. School Construction

The Providence Public Building Authority has issued nine bonds during 1998-2013 relating primary to school construction.4 These bonds are typically for 20 years, and the State reimburses more than 80% of the cost. During 2006-07, the City had four major bond issues (totaling $226.5 million) for major work at a number of schools, including Providence Career Technical Academy and Nathan Bishop Middle School. Around this time, the General Assembly enacted a new construction moratorium. Since that time, the City has limited its school bond issues to three for “warm, safe and dry” renovations for a total of $44.3 million in 2009-10 and a refinancing in 2013 to save costs. The total original value of this set of bonds was $304.4 million, of which $217.1 million remains due at a finance cost (last fiscal year) of $23.5 million.

2. Public Buildings and Facilities

During 1998-2010, the PPBA had four bond issues (totaling $64.2 million) for public buildings and facilities (Civic Center, hurricane barrier, skating rinks and fire stations, with a small amount for schools mixed in). There remains an unpaid balance of $22.2 million on these bonds, at an annual financing cost of $4.8 million.

3. The Green Energy Bond

In 2011, the City faced an imminent risk of insolvency. In March, 2011 an independent fiscal review panel reported that the City had run deficits during the previous four years paid for by liquidating tens of millions of dollars of reserve funds. In the meantime, the City’s current budget was projected to run a deficit of $70 million, with an additional $110 million structural deficit projected for the following year. In this emergency situation, the City decided to issue a

4 Three other bonds funded a number of public building projects including schools.

7 15-year, $35 million “Green Energy” bond. The City used $5 million of the proceeds to upgrade the energy efficiency of public buildings, and the balance (after financing and transaction costs) to pay down the 2010-11 budget deficit. This was not a conventional or regular use of bond financing.

C. Providence Redevelopment Agency (PRA)

The Providence Redevelopment Agency currently has an inventory of three outstanding bonds. The original issue value of the bonds was in excess of $93 million. The current remaining balance due is $59 million, and last year’s financing costs were $15.1 million.

The first bond is a refunding of a previous issue that funded the construction of the Public Safety Complex. The third bond funded a tax increment financing project at the Manchester Street power station.

The second bond, a $14 million issue in the summer of 2010, was for a less conventional project. At that time, the City was facing liquidity issues due to a reduction in State aid, and available reserves had been exhausted. As a result, the bond issue involved the PRA’s purchase of City property for $14 million, which the PRA leased back to the City to pay the bond financing costs. As stated in the testimony before the City Council Finance Committee, this transaction effectively capitalized a City asset to cover one year’s operating expenses.

IV. Pending Projects

The City’s department heads and others presented a list of pending and proposed capital projects for the City. The list of projects included schools, sidewalks, streets, sewers, public buildings, a streetcar and downtown parks.

A. Schools

The Providence Public Schools are currently housed in 39 buildings, of which 33 are in use, and six are being leased or are not in use. In the past decade, the School Department commissioned two major reports on school facilities, one by DeJong in 2006, and one by Fanning Howey in 2009 (Appendix D). Under the State’s Housing Aid program, the State funds more than 80% of approved school construction projects in Providence. During 2006-08, the State program funded major renovations at Nathan Bishop Middle School and Central High School, and new construction at Providence Career and Technical Academy (PCTA). These projects cost a combined $164 million, of which $131 million was funded by the State. Also during these years, the School Department carried out “warm, safe and dry” repairs to several other schools costing an additional $13.5 million in total. In 2007, the General Assembly approved a moratorium on funding major school renovation projects.

Since that time, the State has limited further aid to “warm, safe and dry” projects to address urgent deficiencies in particular buildings. Also, in 2009-10, the federal government

8 authorized additional facilities projects as part of the Obama administration’s fiscal stimulus program, which supported, among other things, new science laboratories in several high schools. Recently, the School Department applied for authority to carry out $40 million in such repairs, and the Rhode Island Department of Education (RIDE) is close to approving the first $10 million requested. The State will fund 80% of these projects, which are primarily directed toward basic structural and mechanical needs, such as roofs and boilers.

This year, RIDE approved approximately $120 million in school projects statewide, and RIDE anticipates the General Assembly will provide $100 million to fund these projects. This funding includes $20 million in new money as part of a decision to lift the moratorium on new construction. Going forward, the General Assembly is expected to approve legislation to establish a “school capital reserve fund” and an annual approval program similar to the one currently operating in Massachusetts.

The Fanning-Howey Report provided a proposed budget to bring all Providence Public Schools up to high facilities quality standard at the level achieved at Nathan Bishop and PCTA. Mr. Sepe updated the Fanning-Howey Report to account for projects completed since 2009, as well as changes in construction costs. The cost per school varied significantly, from $115,093 at the Bailey Elementary School up to more than $84 million at Mount Pleasant High School. Based on that analysis, he projected the total budget to bring all of the remaining 36 schools up to the quality level of Bishop and PCTA to exceed $600 million. (This estimate excludes six school buildings that are currently either leased to other entities or are closed.) Mr. Sepe also estimated that a smaller commitment of around $5 million to $10 million per school (or $300 million total) would be adequate to provide a quality learning environment, similar to what Achievement First achieved in its recent renovation of the Oliver Hazard Perry Middle school.

B. Sidewalks

In October of last year, the Department of Public Works prepared a report concerning the condition of the City’s sidewalks. Appendix E. The City’s current funding for sidewalk repair and replacement is only a fraction of what is needed, and even when combined with available federal funds from the Community Development Block Grant program, the Department estimates the current backlog would not be addressed in fewer than 20 years, only to be replaced by more sidewalk repair requests during that time. The Department of Public Works currently estimates the backlog of pending requests for sidewalk repairs to exceed 3,400 sidewalks, for which the estimated cost of repair would be $20 million. The Department recommends conducting a comprehensive survey of all sidewalks to identify additional ones in need of repair, which survey may add as much as $70 million to the list. The Department estimates the cost of at $150,000.

C. Streets

In April, 2012, the City’s consultant (Vanasse Hangen Brustlin, Inc. or “VHB”) presented a pavement management analysis of the City’s streets. Appendix F. VHB described a 20-year “deterioration curve” over which a road’s condition goes from “excellent” to “very poor”, identifying the 15-year age (“fair” condition) as the most cost-effective age to repair roads. As of

9 2012, VHB found 240 miles of roads in need of repair at a total cost of $140 million. VHB estimated the City’s overall “pavement condition index” to be 67 out of 100. VHB proposed a 10-year commitment of $10 million per year to increase the average PCI to 74, or a commitment of $13 million per year for 5 years to increase the average PCI to 75. Once this is done, VHB estimates an $8 million annual investment to maintain road quality.

In November, 2012, the voters approved a $40 million road repair bond. VHB developed a priority list based on traffic volume, PCI and expected durability of the repairs. The priority list identified approximately 60 miles of roads to repair to with the bond proceeds, leaving approximately 180 miles of unrepaired roads at an estimated cost to repair of $120 million.

D. Sewers

The City maintains a network of sewer lines that provide the bulk of the City’s system. The Narragansett Bay Commission (“NBC”) maintains a small number of the major lines. From time to time, the City has discussed transferring its sewer lines to the NBC, which could then charge ratepayers for maintenance. (In contrast, the City must look to taxpayers to maintain the sewer lines, even though many consumers of the system are exempt from paying property taxes.) Although the City and the NBC have discussed this idea for many years, they have not yet found an arrangement satisfactory to both sides.

The City’s sewer system has not been maintained properly for many years, and the deferred maintenance triggers occasional backflows and leaks. Also, a sewer line failure can undermine the support beneath a street, leading to sinkholes. The Department estimates that it would cost approximately $50 million to bring the current system up to an acceptable standard, but also recommends undertaking a comprehensive study to refine the current estimate. The Department has included in next year’s budget an appropriation to purchase a sewer line camera; however, the Department has not allocated additional staff time to operate the camera in order to prepare a survey. One idea discussed at the meeting is to combine the street repairs with a survey and repair of the sewer lines that are in place below the designated streets.

E. Public Buildings

The Department of Public Property is currently conducting a survey of public buildings to support a facility repair plan and budget, which ought to be ready in six months.

F. The Streetcar Project

Beginning in 2007, the City’s Planning Department developed a conceptual plan for a streetcar line in the City. Appendices G-1 – G-4.5 The current version envisions phased

5 Appendix G-1 describes the full plan (as of March, 2014). In 2015, the Planning Department revised the project to create a new Phase 1-A, which is incorporated in Appendices G-2 (Plan Summary) and G-3 and G-4 (Phase 1-A explanations).

10 construction, starting with Phase 1-A, a 1.6 mile route that would connect the Amtrak station to Rhode Island Hospital by way of Kennedy Plaza, Empire Street, and other stops along the downtown core. Phase 1A is expected to operate three cars at 10-minute or 12-minute intervals, and serve approximately 2,600 to 2,900 riders per day. The Planning Department estimates capital and construction costs at around $100 million, and annual operating costs of $3.2 million.

The Planning Department expects to fund the capital and construction costs from three sources. The Department has received a $13 million federal grant, which once formally received will be available for 2 years to commit to the project. The Department expects to receive $30 million in State funding from RIPTA or elsewhere. The remaining $57 million will be funded through a Tax Increment Area. (For a general description of TIF financing, see p. 5 above.)

For the streetcar project, the Planning Department has designated a Tax Increment Area that roughly corresponds to 1/4 mile margin on either side of the full route, reaching into the College Hill, Financial District, Downcity, Jewelry District and Hospital District neighborhoods. The Planning Department engaged a consultant to develop a model that calculated “baseline” revenue for the Tax Increment Area and projected additional revenues from a streetcar line. As part of the model, the consultant assumed that developers of commercial property would receive tax stabilization agreements that would postpone the City’s realization of the full tax revenues from new development. The model calls for the issuance of a 20-year bond. At that end of the bond term, the City would gain full access to the incremental revenues generated by the Tax Increment Area to fund the City’s operating budget.

The Planning Department expects user fares to cover the majority of the annual operating expense, with additional funding provided by an assessment on tax exempt institutions, funded by savings in employee transportation costs. The project will also receive additional parking revenues and a 3-year grant.

The Planning Department reports that its successful federal grant application has triggered interest from developers, including out-of-state firms looking at the I-195 District. The Planning Department reports that several developers have indicated that the streetcar project could “tip the scale” regarding their development plans.

In order to issue the bond, the City Council must first approve the formation of a “TIF District.” The City would need to engage an engineer for further planning, a commitment of around $1 million, paid for with grant funds. The Planning Department would then have 12-18 months to secure the additional funding, at which point the bond issuance question will come before the City Council for final approval.

G. Downtown Parks

Cliff Wood, the Director of the Downtown Providence Parks Conservancy, described his organization’s work in enhancing the City’s public spaces through improvements to Kennedy Plaza, Biltmore Park and Burnside Park, as well as advocacy for State funding to support the establishment of an intermodal transfer center at the Amtrak station. Over the past two decades,

11 downtown public space improvements (most notably Waterplace Basin and the Capital Center) have stimulated more than $1.2 billion in private investment. Mr. Wood also pointed to New York’s Bryant Park and Central Park Conservancies, which began with major City funding, but are now funded primarily by nearby businesses (whose increased profitability and real estate values justify the investment) and the philanthropic community.

Director Wood provided a menu of capital improvements that would enhance the downtown park area. See Appendix H. The first group of projects would address the infrastructure along the length of Waterplace Park (walkways, railings, etc.), and some minor work at Burnside Park, Biltmore Park and the skating rink. This package would cost $3.9 million. The second project would be to dredge the river. The cost of this project would be either $3.1 million or $5.7 million depending on the length of river dredged. Combined, the projects would cost $9.7 million. The Parks Conservancy may have access to other funding sources for a portion of these costs.

H. Summary

Compiling the results of these reports, an adequate budget to bring all of the City’s infrastructure to an acceptable (but not necessarily “excellent”) condition today would be as follows:

1. Schools $340 million (City Share: $68 million)

2. Sidewalks $20-$90 million

3. Streets $120 million

4. Sewers $50 million

5. Streetcar $57 million

6. Downtown Parks: $10 million

Grand Total $597-$667 million (City Share: $325-$395 million)

Because the City will address these capital needs over a period of years, there are at least two reasons why these figures are likely to increase over time. First, the cost of materials and construction will increase. Second, the condition of the City’s buildings, streets, sidewalks and sewers is subject to further wear and tear over time, which will increase the cost to maintain and repair those facilities as time progresses before they are addressed.

12 V. Conclusions and Recommendations

The City of Providence is in need of a major rebuilding effort. After decades of deferred maintenance, Providence has a substantial backlog of repairs and maintenance for its network of buildings, roads, sidewalks and sewers. Other projects can enhance both the City’s living environment and economic development. More prosperous cities can maintain their infrastructure with operating funds, but Providence lacks this capacity at the present time. As a result, it is important to make the best possible use of the City’s ability to borrow capital, especially given the current favorable interest rate climate.

While there is some value to reducing the City’s overall borrowing level, the current list of capital needs is too extensive and acute to defer. For these reasons, the Commission recommends that the City continue to address its backlog of capital projects while maintaining the current credit rating and debt capacity. When prior debt comes off the books over the next 12-18 months, the City will have the opportunity to make purposeful choices about how to improve the quality of its public facilities.

To begin assessing those choices, the Commission asked the City’s bond adviser, to project the City’s future debt capacity, as of January 1, 2017, based on these assumptions:

1. The City wishes to issue bonds on or around January 1, 2017 that are consistent with the City’s current credit rating.

2. The City will continue paying off existing bond obligations on schedule.

3. Over the next 18 months, the City will issue additional bonds at the following times and in the following amounts:

a. Scenario 1: A single $10 million bond for school facility renovations (with 80% State reimbursement) issued on or around July 1, 2015.

b. Scenario 2: The $10 million bond described in Scenario 1 plus a second $10 million school facilities renovation bond (with 80% State reimbursement) issued on or around July 1, 2016.

c. Scenario 3: The two $10 million bonds described in Scenario 2, plus a $55 million bond also issued on or around July 1, 2016.

The Commission chose the January 1, 2017 date with an eye towards the November, 2016 general election. That election represents the next opportunity voters will have to approve the issuance of general obligation bonds.

13 The Commission developed Scenarios One and Two based on information that the City is working on these bonds with the Rhode Island Department of Education. Scenario Three is based on the assumption that the City goes forward with the streetcar project, which is currently estimated to cost $57 million. While the streetcar bond is designed for tax increment financing (which by State law does not encumber the City’s full faith and credit and or affect its bonding capacity), the City’s financial advisors stated that bond holders and/or credit rating agencies might still look to the City to stand behind the bonds. As a result, it may be prudent to reserve bonding capacity for the streetcar project until it is sufficiently clear that the TIF district will provide enough incremental revenue to fund the project.

The City’s financial advisor answered these questions in a June 25, 2015 letter. Appendix I. The advisor projected the City’s bonding capacity on January 1, 2017 to be as follows under the three scenarios posed by the Commission:

Scenario One: $87.0 Million

Scenario Two: $77.4 Million

Scenario Three: $24.1 Million

In addition to pointing out future opportunities, the advisor’s analysis reveals the impact of the State’s school construction reimbursement program on the City’s bonding capacity. More specifically, even though a $10 million school construction bond will be reimbursed by the State at more than 80%, the entire $10 million counts against the City’s bonding capacity. This fact has important ramifications for the City’s ability to rebuild its schools. Instead of being able to base borrowing decisions on the net cost to the City of school construction after State aid, the current State program effectively limits cities and towns to borrow as if no State aid were forthcoming, even though the State is committed to providing the aid.

Based on its investigation, the Commission makes the following recommendations:

1. As soon as feasible, the Administration should submit a consolidated list of planned capital projects for the current fiscal year.

2. During the rest of the current fiscal year, the Administration should make adequate preparations to allow it to submit a fully compliant 5-year capital budget for the City Council’s review and approval as part of the 2016-17 budget cycle.

3. The Director of Operations should develop a 3-5 year plan for further school repairs and renovations to begin upon the conclusion of the current package before the Rhode Island Department of Education.

4. The Department of Public Works should complete a comprehensive assessment of the City’s sidewalks by the end of calendar year 2015, and report to the City Council concerning its estimated cost of repair of the entire system.

14 5. In early 2016, the City Council and administration should assess which capital funding needs can be addressed with the bonding capacity expected to be available by January 1, 2017. Based on that assessment, the City should consider developing a general obligation bond proposal for the voters to consider as part of the 2016 general election ballot.

6. The City should work with its peer communities and with the State to explore ways to repackage the State’s school construction aid program so that the State’s share of school financing costs does not count against the City’s bonding capacity for the purpose of determining the City’s credit rating.

While these recommendations will help the City make a good start in addressing its infrastructure deficit, it is clear that there will still be a long way to go after January 1, 2017. A cursory review of the Table of Existing Bond Debt (Exhibit 4) suggests that the City will pay off between $50 million and $100 million of bonds every two years going forward, providing capacity for new general obligation debt and/or PPBA borrowing in the future. The Commission encourages the City to extend its planning beyond 2017, using the principles developed in this Report.

To conclude, a century ago, Providence built a rich legacy of prosperity and quality of life on a strong foundation of infrastructure and public works. In recent years, that foundation has been fiscally challenged. To rebuild it, Providence must plan its capital borrowing program carefully, making best use of its scarce resources in a way that addresses all of the City’s needs over the long term.

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Credit Rating and Debt Overview

April 15, 2015 City of Providence, Rhode Island Table of Contents

Credit Rating Overview Tab A

Current Debt Position Tab B

Debt Capacity & Issuance Considerations Tab C C Y T I 2015 PRA and PPBA Refundings Tab D OF P E C N E D I V O R R , HODE I D N A L S

C ITY OF P ROVIDENCE , R HODE I SLAND Current City, PPBA, and PRA Ratings

City GO Ratings/Outlook . The City has used all 3 major rating agencies to rate its General Obligation (“GO”) bonds. Moody's Baa1 Standard & Poor's BBB/Positive

. Moody’s and Standard & Poor’s (“S&P”) have Fitch Ratings BBB/Negative

rated Providence Public Buildings Authority PPBA Ratings/Outlook

(“PPBA”) and Providence Redevelopment Moody's Baa2 Agency (“PRA”) City appropriation-backed Standard & Poor's BBB-/Positive bonds. Fitch Ratings Not Rated C Y T I

. The PPBA bonds issued through RIHEBC for PRA Ratings/Outlook* OF

school projects have the RIHEBC Public School Moody's Baa2 P E C N E D I V O R Program rating of A1. Standard & Poor's BBB-/Positive Fitch Ratings Not Rated . The current credit ratings are:

Manchester Street Station TIF R ,

Moody's Not Rated HODE Standard & Poor's BB/Positive I

Fitch Ratings BBB+/Stable D N A L S

*On City appropriation-supported debt only.

. The rating agencies rate, or grade, long-term debt using the following scales: Long Term Ratings

Moody's S&P/Fitch

AAA AAA Aa1 AA+ Aa2 AA C

Aa3 AA- Y T I A1 A+ A2 A OF P

A3 A- E C N E D I V O R

Baa1 BBB+ Investment Grade Baa2 BBB R ,

Higher Higher Credit Quality Baa3 BBB- Ba1 BB+ HODE Ba2 BB

Ba3 BB- I D N A L S B1 B+ Grade B2 B Speculative

. The City’s General Obligation rating history since 2010:

CITY OF PROVIDENCE, RHODE ISLAND GO BOND RATING

Fitch Moody's Standard & Poor's Aug 2010 AA-/stable A1/ no outlook A/negative outlook

Nov-Dec 2010 AA-/stable A1/no outlook A-/negative outlook rating action no change no change-affirmation downgrade Mar 2011 A/negative outlook A3/negative outlook BBB+/negative outlook rating action downgrade downgrade downgrade C Y T I June 2011 A/negative outlook A3/Review for downgrade BBB+/negative outlook rating action no change watchlist no change OF

Nov-Dec 2011 A/negative outlook A3/negative outlook BBB+/negative outlook P

rating action no change removed from watchlist affirmation E C N E D I V O R

March-May 2012 BBB/negative outlook Baa1/negative outlook BBB/negative outlook rating action downgrade downgrade downgrade

February 2013 BBB/negative outlook Baa1/negative outlook BBB/negative outlook rating action affirmation affirmation no change R ,

September 2013 BBB/negative outlook Baa1/stable outlook BBB/stable outlook HODE rating action no change outlook revised upward outlook revised upward

June 2014 BBB/negative outlook Baa1/stable outlook BBB/positive outlook I D N A L S rating action no change affirmation outlook revised upward

. The following Moody’s MFRA shows Providence and other Baa1/A3 RI municipalities: Moody's Municipal Financial Ratio Analysis

Statistics for ALL Baa1 and A3 Municipalities Rhode Island Baa1 and A3 Rated Municipalities Medians Min Max Providence, RI East Providence, Johnston, RI North RI Providence, RI

Current Senior Most Rating* A3 Baa1 A3 Baa1 Baa1 A3 A3 Financial Data : Debt Statistics & Ratios Direct Net Debt Outstanding ($000) 10,954 0 960,736 531,794 47,902 27,597 21,493 Direct Net Debt as % of Full Value 2.1 0 20.5 5.0 1.3 1.1 0.9 Direct Net Debt Per Capita ($) 1,224 0 86,805 2,980 1,016 959 670 Debt Service as % of Operating Expenditures 9.7 0 67.9 9.2 3.7 3.0 17.9 Payout, 10 Years, All Tax-Supported Debt (%), Current 72.8 23.1 100 80.0 85.3 85.7 92.7 C Value Y T I Payout, 10 Years, General Obligation Debt (%), Current 74.8 20.7 100 74.1 85.3 85.7 N/A Value

Financial Data : Demographic Statistics OF Population 2010 Census 9,824 1,327 343,829 178,042 47,037 28,769 32,078

Financial Data : Financial Statistics & Ratios P E C N E D I V O R Total General Fund Revenues ($000) 9,158 418 690,832 452,552 107,312 84,202 74,226 Unassigned Fund Balance (General Fund) 1,067 -13,314 24,022 -8,672 10,771 11,494 5,483 Unassigned Fund Balance as % of Revenue (General 12.8 -21 102.5 -1.9 10.0 13.7 7.4 Fund) Financial Data : Governmental Activities Statistics and Ratios

Net Pension Obligation (Including Current Portion) 3,568 0 196,341 154,399 52,500 31,776 3,568 R , ($000) Net OPEB Obligation (Including Current Portion) ($000) 6,644 -2 424,169 258,003 9,537 70,766 13,500 HODE

Financial Data : Tax Base Statistics and Ratios Total Full Value ($000) 629,429 47,268 60,945,038 10,742,964 3,560,135 2,461,436 2,497,269

Full Value Per Capita ($) 54,864 20,870 423,823 60,208 75,508 85,559 77,850 I D N A L S Average Annual Increase in Full Value (%) 1.5 -11.4 14 -2.6 -4.7 -3.4 -2.8 Top Ten TaxPayers as % of Total 12.8 1.5 107.6 4.6 4.9 6.6 4.2

* The information displayed in the MFRA is the most recent information issued by Moody's Investors Service, Inc. Member FINRA & SIPC 6 © 2015 First Southwest Company, LLC Providence Compared to Selected New England Peers . The following Moody’s MFRA shows Providence and other Baa1/A3 New England municipalities with a population of over 50,000: Moody's Municipal Financial Ratio Analysis

Statistics for ALL Baa1 and A3 Municipalities New England Baa1 and A3 Rated Municipalities with a Population over 50,000

Medians Min Max Providence, Hamden, CT Lawrence, MA New Britain, New Haven, West Haven, Selected Financials and other Datapoints RI CT CT CT Current Senior Most Rating* A3 Baa1 A3 Baa1 Baa1 A3 Baa1 A3 Baa1

Financial Data : Debt Statistics & Ratios Direct Net Debt Outstanding ($000) 10,954 0 960,736 531,794 146,563 114,970 265,838 548,602 159,238 Direct Net Debt as % of Full Value 2.1 0 20.5 5.0 2.7 2.8 7.6 6.4 4.1 Direct Net Debt Per Capita ($) 1,224 0 86,805 2,980 2,407 1,629 3,639 4,227 2,893 Debt Service as % of Operating Expenditures 9.7 0 67.9 9.2 7.8 5.7 18.4 11.7 11.1 Payout, 10 Years, All Tax-Supported Debt (%), 72.8 23.1 100 80 46.1 82.1 85.4 79.7 86.5 C Current Value Payout, 10 Years, General Obligation Debt (%), 74.8 20.7 100 74.1 46.1 86.9 85.4 79.7 86.5 Y T I Current Value Financial Data : Demographic Statistics OF Population 2010 Census 9,824 1,327 343,829 178,042 60,960 76,377 73,206 129,779 55,564

Financial Data : Financial Statistics & Ratios P E C N E D I V O R Total General Fund Revenues ($000) 9,158 418 690,832 452,552 208,953 234,354 241,610 529,517 156,660 Unassigned Fund Balance (General Fund) 1,067 -13,314 24,022 -8,672 2,216 N/A 4,965 22 -13,314 Unassigned Fund Balance as % of Revenue 12.8 -21 102.5 -1.9 1.1 N/A 2.1 0 -8.5 (General Fund) Financial Data : Governmental Activities Statistics and Ratios

Net Pension Obligation (Including Current 3,568 0 196,341 154,399 196,341 N/A 1,062 13,718 N/A R , Portion) ($000) Net OPEB Obligation (Including Current Portion) 6,644 -2 424,169 258,003 136,849 N/A 994 132,075 27,046

($000) HODE Financial Data : Tax Base Statistics and Ratios Total Full Value ($000) 629,429 47,268 60,945,038 10,742,964 5,513,136 4,168,300 3,498,494 8,567,372 3,861,226

Full Value Per Capita ($) 54,864 20,870 423,823 60,208 90,528 59,073 47,888 65,525 70,145 I D N A L S Average Annual Increase in Full Value (%) 1.5 -11.4 14.0 -2.6 -3.7 12.8 -3.9 6.1 -3.4 Top Ten TaxPayers as % of Total 12.8 1.5 107.6 4.6 6.8 4.9 7.0 16.6 3.3

C ITY OF P ROVIDENCE , R HODE I SLAND Overview of Outstanding Debt – City, PPBA, PRA, and TIF

Outstanding Debt as of June 30, 2014

City GO Debt $ 108,375,000

PPBA Non-School Debt 53,564,000

PPBA School Debt1 276,122,125

PRA Tax-Supported Debt 56,403,000 C Y T I PRA Conduit Debt2 24,239,000 OF P

TIF Debt 6,170,000 E C N E D I V O R

Total Outstanding $ 524,873,125 Less Non Tax-Supported (24,239,000) TOTAL TAX-SUPPORTED$ 500,634,125 R , HODE

1. Debt service on approved school projects reimbursed by I RIDE at approximately 80%. D N A L S

2. PRA Conduit Debt paid from leases with private companies for whom debt was issued. Member FINRA & SIPC 9 © 2015 First Southwest Company, LLC Overview of Outstanding Tax-Supported Debt C Y T I OF P E C N E D I V O R R , HODE I D N A L S

BOND DEBT SERVICE

Aggregate Debt Service All Tax-Supported Debt As of June 30, 2014 Period Ending Principal Interest Debt Service BAB Subsidy QSCB Subsidy Net Debt Service 6/30/2015$ 44,647,788 $ 24,828,158 $ 69,475,946 $ (2,205,181) $ (168,497) $ 67,102,268 6/30/2016 45,288,001 22,960,332 68,248,332 (2,114,901) (147,286) 65,986,146 6/30/2017 43,641,664 20,931,496 64,573,160 (2,024,621) (124,707) 62,423,833 6/30/2018 44,017,323 18,985,987 63,003,309 (1,934,341) (100,690) 60,968,279 6/30/2019 40,899,683 16,923,957 57,823,640 (1,844,061) (75,114) 55,904,465 C

6/30/2020 37,002,167 14,986,585 51,988,752 (1,753,781) (47,903) 50,187,068 Y T I 6/30/2021 31,944,167 13,265,384 45,209,550 (1,663,501) (18,947) 43,527,103 6/30/2022 30,469,167 11,717,573 42,186,739 (1,573,221) - 40,613,519 OF

6/30/2023 31,119,167 10,203,669 41,322,836 (1,482,941) - 39,839,895 P E C N E D I V O R 6/30/2024 32,499,167 8,705,138 41,204,304 (1,390,221) - 39,814,084 6/30/2025 29,489,167 7,160,246 36,649,413 (1,297,501) - 35,351,912 6/30/2026 29,309,167 5,694,219 35,003,386 (1,204,781) - 33,798,605 6/30/2027 22,944,167 4,281,525 27,225,692 (1,204,781) - 26,020,911 R , 6/30/2028 19,079,167 3,250,675 22,329,842 (1,204,781) - 21,125,061

6/30/2029 7,664,167 2,422,656 10,086,823 (1,204,781) - 8,882,042 HODE 6/30/2030 2,510,000 398,250 2,908,250 - - 2,908,250 6/30/2031 2,605,000 304,125 2,909,125 - - 2,909,125 I 6/30/2032 2,700,000 206,438 2,906,438 - - 2,906,438 D N A L S 6/30/2033 2,805,000 105,188 2,910,188 - - 2,910,188 $ 500,634,125 $ 187,331,600 $ 687,965,724 $ (24,103,388) $ (683,145) $ 663,179,192

. The City of Providence’s key debt ratios are in line with other New England “Baa” rated communities:

City of Providence (as of 6/30/2014) Moody's Medians* General Obligation All Tax-Supported RI "Baa" New England "Baa" Debt Per Capita $609 $2,813 $990 $3,515 Debt as % of Full Value 1.06% 4.89% 1.30% 5.40% C Y T I *Most recent available (as of 6/30/2013) from Moody's Investors Service, Municipal Financial Ratio Analysis. OF P E C N E D I V O R R , HODE I D N A L S

C ITY OF P ROVIDENCE , R HODE I SLAND Overview of General Obligation Debt

All Transactions Through April 1, 2015 As of June 30,

Existing Long-Term Bonds 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 General Obligation Bonds - Dated 8/1/001 $ 1,295,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - General Obligation Taxable Bonds 2001 SeriesB 8,950,000 8,435,000 7,885,000 7,300,000 6,680,000 6,020,000 5,315,000 4,565,000 3,765,000 2,915,000 General Obligation Refunding Bonds, 2004 SeriesA1 16,705,000 ------General Obligation Taxable Refunding Bonds, 2004 SeriesB1 6,065,000 ------General Obligation Infrastructure Lease, Dated 6/30/10 8,875,000 6,815,000 4,655,000 2,385,000 ------General Obligation Refunding Bonds, Series 2010A 28,715,000 26,810,000 24,845,000 22,820,000 20,705,000 18,505,000 16,205,000 13,805,000 11,300,000 8,680,000 General Obligation Bonds, Series 2013A 37,770,000 36,425,000 35,040,000 33,610,000 32,125,000 30,580,000 28,955,000 27,250,000 25,460,000 23,580,000 General Obligation Refunding Bonds, Series 2014A - 14,350,000 11,080,000 8,355,000 5,495,000 2,770,000 - - - - General Obligation Refunding Bonds, Series 2014B - 6,240,000 5,110,000 4,020,000 2,915,000 1,505,000 - - - - Total General Obligation Debt $108,375,000 $ 99,075,000 $ 88,615,000 $ 78,490,000 $ 67,920,000 $ 59,380,000 $ 50,475,000 $ 45,620,000 $ 40,525,000 $ 35,175,000

Providence Public Building Authority 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Revenue Bonds, 1998 SeriesA $ 1,230,000 $ 1,010,000 $ 775,000 $ 530,000 $ 270,000 $ - $ - $ - $ - $ - Revenue Bonds, 1999 SeriesA 1,385,000 1,185,000 970,000 745,000 510,000 260,000 - - - - Revenue Bonds, 2001 SeriesA 1,210,000 1,085,000 950,000 810,000 665,000 510,000 350,000 180,000 - -

RIHEBC Revenue Bonds, 2006 SeriesA 45,955,000 43,360,000 40,630,000 37,775,000 34,775,000 31,620,000 28,305,000 24,830,000 21,180,000 17,350,000 C

RIHEBC Revenue Bonds, 2007 SeriesA 61,245,000 58,105,000 54,820,000 51,355,000 47,715,000 43,885,000 39,865,000 35,640,000 31,215,000 26,565,000 Y T I RIHEBC Revenue Bonds, 2007 SeriesB 9,135,000 7,970,000 6,760,000 5,495,000 4,185,000 2,820,000 1,400,000 - - - RIHEBC Revenue Bonds, 2007 Series C 60,845,000 57,695,000 54,400,000 50,940,000 47,340,000 43,555,000 39,585,000 35,420,000 31,045,000 26,450,000 Revenue Bonds, 2009 SeriesA (Build America Bonds) 8,052,000 7,105,000 6,097,000 5,025,000 3,883,000 2,668,000 1,375,000 - - - OF RIHEBC QSCB Bonds, Series 2009A 16,400,000 14,920,000 13,440,000 11,960,000 10,480,000 9,000,000 7,520,000 6,040,000 4,560,000 3,040,000

Revenue Bonds, 2010 Series 11,732,000 9,317,000 6,797,000 4,166,000 1,419,000 - - - - - P

RIHEBC QSCB Bonds, Series 2010A 10,233,000 9,550,778 8,868,556 8,186,334 7,504,112 6,821,890 6,139,668 5,457,446 4,775,224 4,093,002 E C N E D I V O R RIHEBC QZAB Bonds, Series 2010B 8,054,000 7,517,056 8,054,000 8,590,944 9,127,889 9,664,833 10,201,778 9,664,833 9,127,889 8,590,944 Revenue Bond, 2011 SeriesA 29,955,000 28,070,000 26,120,000 24,070,000 21,915,000 19,650,000 17,270,000 14,770,000 12,145,000 9,365,000 RIHEBC, Revenue Refunding Bonds, Series 2013A 64,255,000 55,725,000 47,210,000 38,405,000 30,725,000 22,870,000 17,010,000 12,770,000 8,320,000 4,255,000

Total PPBA Debt $329,686,000 $ 302,614,834 $ 275,891,556 $ 248,053,278 $ 220,514,001 $ 193,324,723 $ 169,021,446 $ 144,772,279 $ 122,368,113 $ 99,708,946

Providence Redevelopment Agency 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 R , Revenue Refunding Bonds, 2005 SeriesA 48,380,000 ------Taxable Lease Revenue Bonds, 2010 Series 1 8,023,000 6,366,000 4,640,000 2,841,000 967,000 - - - - -

Revenue Refunding Bonds, 2015 SeriesA - 44,910,000 42,550,000 39,615,000 36,590,000 33,440,000 30,770,000 27,965,000 25,025,000 21,940,000 HODE Total PRA Debt $ 56,403,000 $ 51,276,000 $ 47,190,000 $ 42,456,000 $ 37,557,000 $ 33,440,000 $ 30,770,000 $ 27,965,000 $ 25,025,000 $ 21,940,000

Special Obligation Bond 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Special Obligation Tax Increment Refunding Bonds, $ 6,170,000 $ 2,725,000 -$ -$ $ - -$ -$ $ - -$ -$ I Series E D N A L S Total Special Obligation TIF Bonds $ 6,170,000 $ 2,725,000 -$ -$ $ - -$ -$ $ - -$ -$

TOTAL TAX SUPPORTED DEBT $ 500,634,000 $ 455,690,834 $ 411,696,556 $ 368,999,278 $ 325,991,001 $ 286,144,723 $ 250,266,446 $ 218,357,279 $ 187,918,113 $156,823,946

1. Series 2000, 2004A, and 2004B refunded by the General Obligation Refunding Bonds, Series 2014 A & B.

All Transactions Through April 1, 2015 As of June 30,

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Total General Obligation Debt $108,375,000 $ 99,075,000 $ 88,615,000 $ 78,490,000 $ 67,920,000 $ 59,380,000 $ 50,475,000 $ 45,620,000 $ 40,525,000 $ 35,175,000

Total PPBA Debt 329,686,000 302,614,834 275,891,556 248,053,278 220,514,001 193,324,723 169,021,446 144,772,279 122,368,113 99,708,946

Total PRA Debt 56,403,000 51,276,000 47,190,000 42,456,000 37,557,000 33,440,000 30,770,000 27,965,000 25,025,000 21,940,000

Total Special Obligation TIF Bonds 6,170,000 2,725,000 ------

TOTAL TAX SUPPORTED DEBT $500,634,000 $ 455,690,834 $ 411,696,556 $ 368,999,278 $ 325,991,001 $ 286,144,723 $ 250,266,446 $ 218,357,279 $ 187,918,113 $156,823,946

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Proposed City Debt1 $ - $ - $ - $ 20,000,000 $ 18,325,000 $ 16,651,625 $ 14,976,525 $ 13,301,625 $ 11,628,850 $ 9,955,125

TOTAL Existing and Proposed City Debt $500,634,000 $ 455,690,834 $ 411,696,556 $ 388,999,278 $ 344,316,001 $ 302,796,348 $ 265,242,971 $ 231,658,904 $ 199,546,963 $166,779,071 C

Key Ratios on Existing General Obligation Debt: Y T I Debt Per Capita $ 608.87 $ 556.62 $ 497.85 $ 440.97 $ 381.59 $ 333.61 $ 283.58 $ 256.30 $ 227.68 $ 197.62 Debt as a Percentage of Full Value2 1.06% 0.92% 0.82% 0.73% 0.63% 0.55% 0.47% 0.42% 0.38% 0.33% OF

Key Ratios on General Obligation and Proposed City Debt:

Debt Per Capita $ 608.87 $ 556.62 $ 497.85 $ 553.33 $ 484.54 $ 427.16 $ 367.72 $ 331.03 $ 293.01 $ 253.55 P 2 Debt as a Percentage of Full Value 1.06% 0.92% 0.82% 0.92% 0.80% 0.71% 0.61% 0.55% 0.49% E 0.42% C N E D I V O R

Key Ratios on Existing Total Tax-Supported Debt: Debt Per Capita $ 2,812.65 $ 2,560.15 $ 2,312.98 $ 2,073.10 $ 1,831.47 $ 1,607.61 $ 1,406.04 $ 1,226.77 $ 1,055.76 $ 881.06 Debt as a Percentage of Full Value2 4.89% 4.24% 3.83% 3.43% 3.03% 2.66% 2.33% 2.03% 1.75% 1.46%

Key Ratios on Existing and Proposed Total Tax-Supported Debt:

Debt Per Capita $ 2,812.65 $ 2,560.15 $ 2,312.98 $ 2,185.46 $ 1,934.42 $ 1,701.16 $ 1,490.18 $ 1,301.50 $ 1,121.09 $ 936.99 R , Debt as a Percentage of Full Value2 4.89% 4.24% 3.83% 3.62% 3.21% 2.82% 2.47% 2.16% 1.86% 1.55% HODE Moody's Medians (as of 6/30/2013) RI "Baa" New England "Baa" Debt Per Capita $ 990.00 $ 3,513.00 Debt as a Percentage of Full Value 1.30%5.40%

Population (2010 Census) = Full Value (as of 6/30/2012 for FY 2014) = I

177,994 $ 10,231,682,760 D N A L S Assessed Value (as of 12/31/2012 for FY 2014) $ 11,828,534,984 Full Value (as of 6/30/2013 for FY 2015) = $ 10,742,964,381 Assessed Value (as of 12/31/2013 for FY 2015) $ 10,962,208,553 1. Projected Series 20__ debt service assume 5.50% rate, 20 year final maturity, and level debt service. These are preliminary projections as of ______and are subject to change with market movement. 2. Full Value of $10,742,964,381 used for FY 2016 through 2023. Member FINRA & SIPC 15 © 2015 First Southwest Company, LLC Financial Factors to Consider When Planning to Issue New Debt

Big Picture . How proposed debt will impact the City’s overall debt profile: – Total outstanding debt. – Debt per Capita. – Debt as a percent of Full Value.

. How proposed debt will impact the City’s budget: – Total debt service as a percent of the budget. C – RIDE reimbursement on qualified school projects. Y T I

– Timing of debt service payments on proposed debt (impact on cash flow). OF P E C N E D I V O R Issue Specific . Structure of proposed bond issue: – Term (10, 15, or 20 years) R , – Level debt service, level principal payments, or wrap around existing debt HODE I D N A L S

. Interest is the largest cost the City will pay on the bonds: – Debt with a 10-year term will have higher annual payments than debt with a 20-year term, but overall lifetime debt service will be less. For example: o A $1,000,000 bond with level debt service amortized over 10 years at 5.00% will have annual debt service of $129,500 and lifetime interest of $295,000. o A $1,000,000 bond with level debt service amortized over 20 years at 5.00% will have annual debt service of $80,275 and lifetime interest of $605,500. – The interest cost is directly related to the credit rating. Following is a graph of credit spreads: Credit Spreads as of April 14, 2015 C

Source: Municipal Market Data Y T I

4.0 OF

3.5 P E C N E D I V O R

3.0

2.5

2.0 R ,

1.5 HODE

1.0 I

0.5 D N A L S

0.0 AAA MMD AA MMD A MMD BBB MMD 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

. Other costs of issuance are usually paid from bond proceeds. For a public offering, the following parties are typically involved: – Bond Counsel – Financial Advisor – Rating Agencies – Financial Printer – Paying Agent or Trustee and Paying Agent or Trustee’s Counsel C – Underwriter and Underwriter’s Counsel Y T I

– Escrow Agent (for Refundings) OF

– Verification Agent (for Refundings) P E C N E D I V O R R , HODE I D N A L S

C ITY OF P ROVIDENCE , R HODE I SLAND 2015 Refundings

. PRA Refunding of the Series 2005A Bonds: – Closed March 31, 2015. – $44,910,000 issued. – $48,380,000 refunded. – Net Present Value (“NPV”) savings of $3,918,759 o Budgetary savings of $3,823,700 in FY 2015. o Budgetary savings of $528,000 in FY 2016. – NPV Savings as a % of refunded bonds was 8.10%. C – Retained same payment dates. Y T I

– No extension of final maturity. OF P E C N E D I V O R . Proposed PPBA Refunding through RIHEBC of school bonds planned for April 14, 2015: – Plan to refund economically feasible maturities of Series 2006A, 2007A, and 2007C. – Issue size could be up to $155,000,000. R , – Savings currently projected to be $2,800,000 in FY 2015 and $2,400,000 in FY 2016. – Will retain same payment dates. HODE – Will not extend final maturity. I D N A L S

Disclosure: First Southwest Company, LLC (FirstSouthwest) is providing the information contained in the document for discussion purposes as financial advisor to the City on its current transactions. Information in this document

portrays projected interest rates based on data current as of the week of April 13, 2015 and is subject to change with C

market movement. Future interest rates are dependent upon many factors such as, but not limited to, interest rate Y T I trends, tax rates, supply, changes in laws, rules and regulations, as well as changes in credit quality and rating agency considerations. The effect of such changes in such assumptions may be material and could affect the OF projected results. These results should be viewed with these potential changes in mind as well as the understanding P

that there may be interruptions in the market or no market may exist at all. E C N E D I V O R R , HODE I D N A L S

Submitted by: Matthew M. Clarkin, Jr., Internal Auditor

March 25, 2015 (Revised Version: April 10, 2015)

 The budget for debt service in FY2015 is $67.9 million

 As a result of a series of bond refinancing, actual debt service payments in FY2015 will be approximately $61 million

 The Finance Department is currently working to finalize another round of refinancing that is expected to result in savings of an additional $2.0 million in FY2015

 Annual debt payments will fall $18 million over the next five years (assuming no debt is issued)

 It is important to note that the city is reimbursed more than 80% for certain school bond projects

2 3 4 Annual Debt Service (FY2015-2033) 70000000

60000000

50000000

40000000

30000000

20000000

10000000

PPBA Bond Debt Service G.O. Bond Debt Service PRA Bond Debt Service Special Obligation Bond Debt Service Other Bond Debt Service Total Bond Debt Service

5  According to Moody’s Investors Service, the national median Total Debt as a Percentage of Full Valuation for a city with a population between 100,000 to 500,000 and a bond rating of Baa is 4.42%

 Assuming a static full valuation of $10.8 billion and no additional debt, Providence’s percentage will fall between FY2015 and FY2020 from 4.02% to 2.27%

Total Debt as % of Full Valuation

5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2015 2016 2017 2018 2019 2020

National Median Providence

6  According to Moody’s Investors Service, the median Total Debt Per Capita for New England cities rated at Baa is $3,513

 Assuming no additional debt, Providence’s Total Debt Per Capita will fall between FY2015 and FY2020 from $2,646 to $1,560

7  Debt service represents 9.55% of FY2015 budgeted expenditures  The below chart assumes 2.0% annual increases to the city’s budget and no additional debt  Based upon these assumptions, debt service as a % of the city’s budget falls between FY2015 and FY2020 from 9.55% to 6.90%

8  General Obligation Bond (GO Bonds) are debt instruments issued by the city to raise funds for public works projects. GO Bonds are backed by the full faith and credit of the city. The ability to back up bond payments with tax funds is what makes GO Bonds distinct from revenue bonds, which are repaid using the revenue generated by the specific project the bonds were issued to fund.

Expected Date of Original Tax Title Payoff Principal Balance Issue Amount Exempt Date 2001 Series B - Neighborhood Improvement 12/1/2001 1/15/2016 $ 13,000,000 Taxable $8,950,000 Program Not Decorative St Lighting (Issued 6/30/2010) 2010 2018 Not Available $4,435,424 Available Tax 2010 Series A - Current Refunding of 06A Bonds 12/10/2013 1/15/2026 $ 30,545,000 $28,715,000 Exempt Tax General Obligation Road Bonds Series 2013 3/7/2013 1/15/2023 $ 39,345,000 $37,770,000 Exempt

Tax General Obligation Refunding Bonds Series 2014A 6/26/2014 7/15/2019 $ 17,480,000 $14,350.000 Exempt

General Obligation Refunding Bonds Series 2014B 6/26/2014 7/15/2019 $ 6,285,000 Taxable $6,240,000 9 2001 Series B: Neighborhood Improvement Program Date of Issue 12/1/2001 Maturity Date 1/15/2016 Original Amount $13,000,000 Tax Status Taxable Outstanding Principal Balance $8,950,000 Annual Debt Service Payment (FY2015) $1,122,795

Taxable portion of the total $50 million "Neighborhood Bond Program". A total of $550k was appropriated to each of the 15 wards in the city. The remaining $5.5 million was appropriated for other projects as determined by the mayor.

Decorative Street Lighting Date of Issue 6/30/2010 Maturity Date 7/10/2018 Original Amount $14,500,000 Tax Status Tax-exempt Outstanding Principal Balance $4,435,424 Annual Debt Service Payment (FY2015) $2,331,575

Sale-lease back of City Street Lights.

10 2010 Series A - Current Refunding of 2006A Bond Date of Issue 12/10/2010 Maturity Date 1/15/2026 Original Amount $30,545,000 Tax Status Tax-exempt Outstanding Principal Balance $28,715,000 Annual Debt Service Payment (FY2015) $3,186,163 $30.5 million refinance of 2006A bond. The 2006A bond refinanced the 2001 Series A bond. The 2001 Series A bond was the Tax Exempt portion ofthe $50 million Neighborhood Bond. The Series A portion of the bond was $37 million, with $1.7 million going to each of the City's 15 wards.

General Obligation Road Bond - Series 2013 Date of Issue 3/7/2013 Maturity Date 1/15/2023 Original Amount $39,345,000 Tax Status Tax-exempt Outstanding Principal Balance $37,770,000 Annual Debt Service Payment (FY2015) $2,907,356

$39.3 million for road repairs.

11 General Obligation Refunding Bonds Series 2014A Date of Issue 6/26/2014 Maturity Date 7/15/2019 Original Amount $17,480,000 Tax Status Both Outstanding Principal Balance $14,350,000 Annual Debt Service Payment (FY2015) $3,424,418

$17.5 million to refinance the Series 2000 and Series 2004A bonds. The original Series 2000 bond financed the city's portion of the case Capital Properties, Inc. v. State of RI, while the 2004A was an advanced refunding of the 1997B taxable bond which funded various neighborhood improvement projects.

General Obligation Refunding Bonds Series 2014B Date of Issue 6/26/2014 Maturity Date 7/15/2019 Original Amount $6,285,000 Tax Status Taxable Outstanding Principal Balance $6,240,000 Annual Debt Service Payment (FY2015) $1,269,238

$6.3 million to refinance the 2004B bonds. The original bonds were used for various neighborhood improvement projects.

12  The Providence Public Building Authority (PPBA) was established under RIGL Chapter 45-50

 The PPBA can finance public facilites or public eqipment to provide for the conduct of the executive, legislative, and judicial functions of government, and its various branches, departments, and agencies, including projects providing the effectgive governmental, health, safety and welfare services in the city. Public facilities include structures, buildings, facilities or improvements, including parking facilities. It cannot finance retail space.

 PPBA bonds are payable from revenues derived from leasing the Project to the City

 Unlike GO Bonds, the full faith and credit of the city are not pledged toward the repayment of PPBA bonds.

13 City determine needs and budget City Requests Approval from Board of Regents, Providence School Board & City Council

City submits Phase I application to Rhode Island Department of Education (RIDE)

Approval Received Presentations made to Rating Agencies RIDE approval of Phase I Application

City Requests Approval from RIHBEC & PPBA

City submits Phase II Bonds go to market application to RIDE

Approval Received RIDE approval of Phase II Application

14 Expected Principal Title Date of Issue Original Amount Tax Exempt Payoff Date Balance

1998 Series A - School Projects, Civic Center, Hurricane 5/15/1998 12/15/2018 $ 22,745,000 Taxable $1,230,000 Barrier

1999 Series A - Various School and City Projects 7/8/1999 12/15/2019 $ 33,567,600 Tax Exempt $1,385,000

2001 Series A - Various School and City Projects, Hurricane 12/1/2001 12/15/2021 $ 9,995,000 Tax Exempt $1,210,000 Barrier

2006 Series A - Various School Projects 9/20/2006 5/15/2027 $ 60,000,000 Tax Exempt $45,955,000

2007 Series A - Various School Projects 10/19/2007 5/15/2028 $ 75,000,000 Tax Exempt $61,245,000

2007 Series B - Advance Refunding of 00A Bonds 10/192007 5/15/2021 $ 16,470,000 Tax Exempt $9,135,000

2007 Series C - Various School Projects 5/15/2007 5/15/2028 $ 75,000,000 Tax Exempt $60,845,000

2009 Series A - Skating Rink and Downtown Property Lease Not Available 6/30/2021 $12,000,000 Not Available $8,052,000 PPBA Qualified School Construction - 09A - Various School Not Available 6/30/2021 $22,320,000 Not Available $16,400,000 Projects Revenue Bonds 2010 Series - Refunding of 96A, 00B Bonds and Not Available 6/30/2019 $19,500,000 Not Available $11,731,625 Fire Projects Federally Qualified School Construction 10A - Various School Projects 11/19/2010 5/15/2029 $ 12,280,000 $10,233,330 Taxable Federally Qualified Zone Academy 10B - Various School Projects 11/20/2010 5/15/2029 $ 9,665,000 $8,054,167 Taxable PPBA - 2011 Series A - Green Improvements, Working Capital 4/20/2011 6/15/2026 $ 35,000,000 Tax Exempt $29,955,000 RI Public Schools Revenue Bond Financing Program Not Available Not Available $11,346,400 Not Available $62,455,000 15 1998 Series A - School Projects, Civic Center, Hurricane Barrier Date of Issue 5/15/1998 Maturity Date 12/15/2018 Original Amount $22,745,000 Tax Status Tax-exempt Outstanding Principal Balance $1,230,000 Annual Debt Service Payment (FY2015) $276,275 $2 million for renovations at the Civic Center, $1 million repairs to hurricane barrier, $1.2 million repairs to Gilbert Stuart School, $2.5 million repairs to Sackett St. School, $11.3 million to build a new elementary school in South Providence, $1 million for repairs at Camden Avenue School, $100k for renovations at Windmill Street School, $2 million for renovations to athletic fields at Hope, Central and Classical, $620k for various repairs to city schools, $960k to repair a building in Silver Lake to house Procap

16 1999 Series A - Various School and City Projects Date of Issue 7/8/1999 Maturity Date 12/15/2019 Original Amount $33,567,600 Tax Status Tax-exempt Outstanding Principal Balance $1,385,000 Annual Debt Service Payment (FY2015) $267,338 $11.4 million for the Springfield Elementary School Project, $19 million for Springfield Middle School Complex Project, $2.9 million for various school and public facility repairs and renovations, $300,000 to acquire the land on Gordon Avenue.

17 2001 Series A - School and City Projects, Hurricane Barrier Date of Issue 12/1/2001 Maturity Date 12/15/2021 Original Amount $9,995,000 Tax Status Tax-exempt Outstanding Principal Balance $1,210,000 Annual Debt Service Payment (FY2015) $185,190 $6.3 million for Leviton Elementary School Annex Project, $500k for the School Warehouse Project, $395k for School Plannning, $1.2 million for Hurricane Barrier and Public Facilities Project Account.

2006 Series A - Various School Projects Date of Issue 9/20/2006 Maturity Date 5/15/2027 Original Amount $60,000,000 Tax Status Tax-exempt Outstanding Principal Balance $49,955,000 Annual Debt Service Payment (FY2015) $4,892,750 $6.3$21 millionmillion usedfor Leviton to finance a new high school that will have 500 students, $7 million for a secondary school indoor sports complex, $12 million for Phase III of the Central HS Renovation Project, $1 million to renovate the Fox Point Bathhouse, $18 million for school warm, safe and dry.

18 2007 Series A - Various School Projects Date of Issue 10/19/2007 Maturity Date 5/15/2027 Original Amount $75,000,000 Tax Status Tax-exempt Outstanding Principal Balance $61,245,000 Annual Debt Service Payment (FY2015) $6,051,713 $6.3$29 millionmillion forfor the Leviton Hanley Vocational Project, $20 million for Phase IV of the Central High School Rehabilitation Project, $11 million for the indoor sports complex project, $11.5 million for miscellaneous renovation projects

2007 Series B - Advance Refunding of 2000A Bond Date of Issue 10/19/2007 Maturity Date 5/15/2027 Original Amount $16,470,000 Tax Status Tax-exempt Outstanding Principal Balance $9,135,000 Annual Debt Service Payment (FY2015) $1,537,236 $6.3$16.5 millionmillion for for Leviton bond refinancing. the 2000A bond was used to finance the Gordon Ave School Construction Project, as well as to finance other school construction projects.

19 2007 Series C - Various School Projects Date of Issue 5/15/2007 Maturity Date 5/15/2028 Original Amount $75,000,000 Tax Status Tax-exempt Outstanding Principal Balance $60,845,000 Annual Debt Service Payment (FY2015) $6,041,581 $6.3$39 millionmillion forfor the Leviton Career Technology Education Center Project, $35 million for the renovations and rehabilitation of Nathan Bishop Middle School.

2009 Series A - Skating Rink and Downtown Property Lease Date of Issue 6/30/2009 Maturity Date 6/30/2021 Original Amount $12,000,000 Tax Status Tax-exempt Outstanding Principal Balance $8,052,000 Annual Debt Service Payment (FY2015) $1,428,421 Private Placement with Bank of America. Downtown Circulation/Other Street Improvements, Manton Avenue Streetscapes, Westminster Street Enhancements, North Westminster Street Improvements and Neighborhood Streetscapes. Series 2009B Skating Rink.

20 PPBA Qualified School Construction - 09A - Various School Projects Date of Issue 12/30/2009 Maturity Date 6/30/2025 Original Amount $22,320,000 Tax Status Tax-exempt Outstanding Principal Balance $16,400,000 Annual Debt Service Payment (FY2015) $1,794,880

Financed the renovation, rehabilitation, repair, replacement, improvement, furnishing and equipping of existing schools and school facilities, including remediation of fire code violations, repair, replacement, improvement and installation of roofs, heating, ventilation, air conditioning and fire alarm systems.

Revenue Bonds 2010 Series - Refunding 96A, 00B and Fire Projects Date of Issue 7/2/1905 Maturity Date 6/30/2019 Original Amount $19,500,000 Tax Status Tax-exempt Outstanding Principal Balance $11,731,625 Annual Debt Service Payment (FY2015) $2,872,921

Refunding of 1996A bond, which in part funded Veazie Street School and the Modular Classrooms Project. 2000B bond, which funded the School Administration Building and other school projects. 2010 bond, which refinanced older bonds, funded fire station improvements and the acquisiton of 522 Academy Avenue 21 Qualified School Construction 10A - Various School Projects Date of Issue 11/19/2010 Maturity Date 5/15/2029 Original Amount $12,280,000 Tax Status Tax-exempt Outstanding Principal Balance $10,233,330 Annual Debt Service Payment (FY2015) $1,664,622 $12.3 million to be deposited into the Warm, Safe & Dry Project Fund for continued renovations to city schools. Proceeds used for remediation of fire code violations, repair, replacement, improvement and installation of roofs, heating, ventilation, air conditioning and fire alarm systems, including design & feasibility, engineering or other studies, and certain cost of issuance.

Qualified School Construction 10B - Various School Projects Date of Issue 11/20/2010 Maturity Date 5/15/2029 Original Amount $9,665,000 Tax Status Taxable Outstanding Principal Balance $8,054,167 Annual Debt Service Payment (FY2015) $1,310,144 $12.3 million to be deposited into the Warm, Safe & Dry Project Fund for continued renovations to city schools. Proceeds used for remediation of fire code violations, repair, replacement, improvement and installation of roofs, heating, ventilation, air conditioning and fire alarm systems, including design & feasibility, engineering or other studies, and certain cost of issuance. 22 PPBA - 2011 Series A - Green Improvements, Working Capital Date of Issue 4/20/2011 Maturity Date 6/15/2026 Original Amount $35,000,000 Tax Status Tax-exempt Outstanding Principal Balance $29,955,000 Annual Debt Service Payment (FY2015) $3,499,088 $5 million for "Green Improvements", $30 million was alloted for working capital. The $30 million was used to reduce the FY2011 budget deficit.

23 RI Public Schools Revenue Bond Financing Program Date of Issue 11/1/2013 Maturity Date 6/30/2024 Original Amount $69,705,000 Tax Status Tax-exempt Outstanding Principal Balance $62,455,000 Annual Debt Service Payment (FY2015) $11,346,400 Refunded 1995B bond, which funded the Feinstein School Project; 1996B bond, which funded John St. School, St. Anthony School, Bridgham Middle School, and improvements on 234 Daboll St., 90 Mawney St., 81 Mawney St., 83 Burnett St. a parent-child ctr. and daycare ctr; 2003A&B bonds, which funded Leviton Elementary School Annex, New High School Project, School Warehouse, Central HS, Mt. Pleasant HS, Hope HS Renovation Projects; 1998A bond, which funded Sackett St. School, conversion of Gilbert Stuart School, Camden Ave School, Windmill St School/Annex, Hope/Central/Mt. Pleasant HS Projects; 1999A bond, which funded Springfield St. Elementary & Middle School Projects; 2001A bond, which funded New HS Project, Leviton School Annex Project, School Modernization Project, School Warehouse Project, School Planning Project & Central HS Renovations

24  The Providence Redevelopment Agency (PRA) was established under RIGL Chapter 45-31, 45-32  PRA projects must be approved by the City Council and the City Plan Commission  PRA bonds are financed by revenue of the projects financed by bonds, contributions and other financial assistance by the city  The PRA can only construct new buildings for public use

Expected Principal Title Date of Issue Original Amount Tax Exempt Payoff Date Balance

Safety Building Projects 2005 Series A - Advance Refunding of 3/18/2005 4/1/2029 $ 67,315,000 Tax Exempt $48,380,000 99A Bonds

PRA Revenue Bonds 2010 - Purchase/Lease Back of City 8/27/2010 Taxable $8,023,000 Property

Tax Exempt PRA Current Refunding Revenue Bonds Series 2015 3/31/2015 6/30/2029 $ 54,777,786 $44,910,000

Special Obligation Tax Increment Refunding Bond Series E - 11/9/2005 6/1/2016 $24,465,000 Tax Exempt $6,170,000 Refunding 95A and 96D Bonds

25 Safety Bldg. Projects 2005 Series A - Advance Refunding of 99A Bond Date of Issue 3/18/2005 Maturity Date 4/1/2029 Original Amount $67,315,000 Tax Status Tax-exempt Outstanding Principal Balance $48,380,000 Annual Debt Service Payment (FY2015) $4,977,400 $67 million to refinance Public Safety Complex 99A Bonds.

PRA Revenue Bond 2010 - Purchase/Lease Back of City Property Date of Issue 8/27/2010 Maturity Date 6/30/2019 Original Amount - Tax Status Taxable Outstanding Principal Balance $8,023,000 Annual Debt Service Payment (FY2015) $1,964,389

The PRA purchased from the City real estate known as Parcel 12, the American Touristor parcel, and the Port parcels collectively referred to as the "Miscellaneous Parcels Project".

26 Current Refunding Revenue Bond, Series 2015 Date of Issue 3/31/2015 Maturity Date 6/30/2029 Original Amount $54,777,786 Tax Status Tax Exempt Outstanding Principal Balance $44,910,000 Annual Debt Service Payment (FY2015) $4,451,543

Refinanced the Public Safety Building Projects 2005 Series A bond. The 2005 Series A Bond was a $67 million bond used to refinance the Public Safety Complex 99A bond.

Special Obligation Tax Increment Refunding Bond Series E - Refunding 95A & 96D Date of Issue 11/9/2015 Maturity Date 6/1/2016 Original Amount $24,465,000 Tax Status Tax Exempt Outstanding Principal Balance $6,170,000 Annual Debt Service Payment (FY2015) $3,743,968

$24.5 million to refinance 95A & 96B bonds.

27 Discretionary spending http://www.providencephoenix.com/archive/features/00/10/26/BOND.html

October 26 - November 2, 2000

Discretionary spending

Critics rap some of the projects funded by a $50 million 1996 Providence bond as arbitrary, overly politicized, and too costly

by Steven Stycos

A $50 million bond issue that was approved by Providence voters in 1996 was pitched as a cure for crumbling sidewalks and potholed streets. But since 1997, the city council and Mayor Vincent A. "Buddy" Cianci have used more than $1 million from the bond issue for a variety of other projects, including building a restaurant, beautifying an American Legion post, renovating a church hall, and hiring an assistant principal at a private school.

Cianci and a majority of councilors say the Edith Ajello spending supported worthy efforts, and they want Providence voters to approve another $50 million bond, on the November 7 ballot, for additional street, sidewalk, park and non-profit projects. But the city continues to lack a specific capital spending plan, and critics fault the process for spending bond money as arbitrary, subject to political pressure and unnecessarily expensive.

"Nobody has presented me a plan that is real capital investment spending that would justify borrowing money," says state Representative Edith Ajello (D-Providence), who represents the East Side. Under Providence's method of lumping many projects together under the ambiguous umbrella of "Redevelopment and/or Capital Improvements," she notes, "There's just no way for me to feel secure at the end of that period, when the interest and principal are paid off, that we're going to have something worth $50 million."

The city council, except for Ward One Councilman Robert M. Clarkin, supports borrowing another $50 million. Proponents say the money -- a small fraction of the entire bond -- will go for long-standing neighborhood needs that would otherwise

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remain unaddressed in a city squeezed by an exploding school population and limited property tax revenues.

"The whole south side was ignored for many years, and this was a chance to get some infrastructure work done," says Ward Nine Councilwoman Patricia Nolan, explaining her support for the 1996 bond and the current proposal. Ward 10 Councilman Luis Aponte also supports another $50 million bond, "basically because there are not a lot of other funds we can use to do what we have to do."

But George Peterson, a senior fellow at the Urban Institute in Washington, DC, calls the approach "an unusually politicized way of spending." Cianci and the council agreed to divide most of the 1996 bond equally among the city's 15 wards, and each council member was given $2.2 million to spend at their discretion.

Although the bonding was originally pitched by Cianci to repair sidewalks and streets, the broad ballot language and divided decision-making allowed council members to pursue a wide range of other projects, including printing a book of literature written by Providence school children, installing a fence at the Fox Point Boys & Girls Club and buying a dehumidifier for the Center for Hispanic Policy & Advocacy (CHisPA).

Acting without a city-wide plan, city councilors used their own knowledge of neighborhood problems to determine priorities. According to the bond program's administrator, Thomas Glavin, the city's associate director of planning for special projects, the largest expenditures were $8.8 million to repair sidewalks in front of 5000 houses, $4.5 million to rejuvenate 54 parks, and $10.2 million to repave 90 miles of streets. Another $2.2 million was spent to Patricia Nolan demolish 119 abandoned buildings, Glavin says.

Councilors also financed other projects, which they describe as neighborhood improvement efforts. For example, $450,000 was used to renovate a strip of commercial stores in Wiggin Village, $100,000 went for new windows at the CityArts! building, and $25,000 bought outdoor cement furniture, awnings, an electronic key system, and other improvements at the Lts. Armstrong-Gladdings American Legion Post in the West End. In at least two cases -- grants of $42,000 to South Providence's Holy Cross Church of God in Christ, and $25,000 to San Miguel School in the West End -- the city has no receipts to document expenditures by the non-profits.

Not everyone wants the new bond to pass. "To borrow $50 million, with no detailed plan and procedure for approval of projects, invites problems," says state

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Representative David Cicilline (D-Providence), who represents the East Side and is co-chair of Providence's caucus in the House.

Clarkin argues that the bond is too expensive. "There have been a lot of improvements," he says, "but at what cost?" Once issuance costs are subtracted, the 1996 bond financed $45 million of projects. But interest payments will cost an additional $46 million, requiring the city to spend $4.3 million a year until 2019 to pay off the bonds, according to Alexander Prignano, Cianci's director of finance.

Cianci, though, offers unreserved praise for the first $50 million bond and he's eager to get started with the second one. "It was a wonderful program in the past," he says. "It will continue to be in future." Although no definite list of projects has been compiled for the next $50 million bond, Cianci talks enthusiastically about developing a botanical garden, enhancing greenways, building housing and planting street trees. How the money will be divided has yet to be determined, he says. Most council members interviewed, however, expect a large chunk to again be equally divided between the city's 15 wards.

Asked about some of the questionable projects funded by the last bond, Cianci says, "I'm the mayor, not the councilman. If you thought I [determined] which sidewalks, which non-profits got money, which streets got paved, that was wrong." As for criticism that the discretionary spending from the 1996 bond was influenced more by politics than planning, Cianci responds, "Everything is political."

IN 1997, Cheryl Spears and her mother, Fannie King, were searching for a place to open a soul food restaurant. They looked at several spots, Spears says, but either the location was poor, the rent was too high or the site required expensive renovations. Then, Spears say, they hooked up with Ward 11 Councilwoman Balbina Young, who knew the city had a vacant building available -- the old Cherry's strip club on Broad Street, across from Classical High School. The city owned the block-long building and was looking for a tenant.

Young arranged a meeting with John Palmieri, director of the Providence Department of Planning and Development, and deputy director Joseph Abbate, Spears says, and soon she was soliciting bids for repair work at the building "on behalf of the city."

Work started in the summer of 1998. Contractors selected by Spears constructed a new roof, made structural improvements and built new stairs. The bills were paid from Young's $2.2 million share of the bond. In a typical letter, Young wrote to Glavin, "Please be advised that I am authorizing the expenditure of Ward 11 Bond monies in the amount of $17,140.00 for Ms. Fannies Soul Food Kitchen, 242 Broad Street for window installation."

In all, the city spent $72,000 to renovate the building, according to city records. Then, in September 1999, the Providence Redevelopment Authority sold the structure to Spears and King for $1, according to Spears and the deed. The proprietors of Miss Fannie's also received a $125,660 loan from the Providence Economic Development Corporation to outfit the restaurant. The restaurant was

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officially unveiled during a ribbon-cutting ceremony, featuring Cianci and Young, in April 2000.

While the Providence routinely helps many businesses by granting tax breaks and making low interest economic development loans, Miss Fannie's appears to be the only for-profit business that directly benefited from a bond originally promoted as a way to repair streets and sidewalks.

Today, Spears estimates the city is "90 percent" responsible for Miss Fannie's, and she says of Young, "She was most of the 90 percent."

Young, who, in addition to other projects, used $2995 in bond money to purchase a phone system for the non-profit Oasis Community Development Federal Credit Union, didn't return phone calls from the Phoenix.

THE PROCEDURE that delivered $72,000 for Miss Fannie's is typical of the process used to spend the $50 million bond. After voters approved the borrowing, the city council passed a ordinance in April 1997 dividing $33 million between Providence's 15 wards. "Each ward," the ordinance states, "shall specify the dollar amount allocated to each project and identify the expected work to be completed." While city department heads made suggestions, "The council person ultimately made the decision," says Glavin, a former councilman.

This idea, says council Majority Leader Ronald Allen, the Ward Eight councilman, came from Cianci's office. "That was a great political strategy on the part of the administration to get passage of the concept, but in hindsight, it's not a good way to do business," Allen says. "It should be based on need." Nevertheless, Allen and Nolan say the equal division by ward brought more money to their low-income neighborhoods than ever before.

In the past, Allen observes, most funds went to the wards that were most supportive of Cianci. When money did trickle down to redo Elmwood sidewalks, Nolan adds, the city wanted to install less costly asphalt instead of concrete.

Once the April 1997 ordinance passed, the $50 million bond became 16 separate bond issues: $2.2 million for each council member and $12 million for city-wide projects determined by Cianci. The remaining $5 million paid for bond issuance costs and making initial interest payments.

Council members used different methods to determine which projects to support. Allen hopped in his car and drove around his ward, noting streets that needed to be repaired. Nolan had the Project Area Committee, an assembly of some 40 neighborhood activists working on an Elmwood redevelopment plan, consider pleas for funding, rate them, and then decide which should get funded.

Once council members decided upon projects, each one had to be approved by the full council and Cianci. Council resolutions routinely packaged together 10 or 20 individual projects, such as money for Miss Fannie's, $113,000 for dredging York Pond, and $300,000 for a West Broadway home improvement revolving loan fund.

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The bundling of projects ensured broad support, because council members typically pay little attention to money spent outside their wards.

As Clarkin says, "Who am I to judge another area? I don't go into someone else's ward and say, `What sidewalks are you doing? Is this a friend of yours?' and I don't think any other council person does."

Adds Nolan, "We really don't know what other council people are doing in their wards."

Council members retained control of projects even after they were approved by the full council. In September 1998, the council approved Nolan's plan to spend $30,000 to make the Center for Hispanic Policy and Advocacy building on Elmwood Avenue handicap accessible, repair the roof and hand rails, and buy the non-profit organization a dehumidifier for the basement. But in February 5, 1999 letter, Nolan ordered Glavin to put the allocation "on hold," because "CHisPA now seems to have a political agenda (see attached flyer), and it is not my intention to put bond money into an organization with a political agenda."

The designated flyer announced a meeting, hosted by four recent Hispanic candidates, including Miguel Luna -- who had unsuccessfully tried to unseat Nolan three months earlier -- to promote other Latino hopefuls.

Less than a week after receiving Nolan's letter, Glavin responded in writing. He explained that CHisPA had already spent $14,315, but added, "Until notified by you, the remaining $15,685 will be placed on hold indefinitely" (italics and bold in the original memo).

Victor Capellan, who was CHisPA's executive director at the time, thinks Nolan's objections were based on Luna's involvement, but she denies that. Nolan says she was worried that Capellan, who had just run unsuccessfully for the legislature, was turning the non-profit agency into a political organization. After meeting with CHisPA leaders, Nolan relates, "I found out I was wrong," and she released the money.

In another case demonstrating the council's ongoing involvement with bonded projects, a change order for metal decking and exterior brick work on the Wiggin Village construction project required Councilwoman Young's approval, because it involved spending more of her bond funds.

Not every council recommendation was approved. In July, Nolan sought a $5000 start-up loan for the new Washington Park Foundation, but the request was denied because federal regulations prohibit using Community Development Block Grant money to repay local bond funds, Glavin and Nolan note. And Nolan's request for $641 to pay for rented tables, chairs and a tent at the Elmwood Foundation picnic on August 26 will also be denied. "We don't write checks for picnics," scoffs Glavin.

After a project was authorized by an individual council member and the full

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council, itemized bills were sent to Glavin and checks issued. But in at least two cases, checks were issued to non-profit groups without receipts.

In December 1997, at Allen's request, the council approved $25,000 for "capital assistance" for San Miguel School, a non-religious private school for 60 at-risk boys. Even though there were no receipts, the city sent a $25,000 check to the school in February 1998. Small grants to non-profits were sometimes handled that way, Glavin says.

The money was used, says principal Lawrence Goyette, to pay the salary and health insurance for an assistant principal for a year -- a use that caught Allen by surprise. "I don't know about that," the council majority leader says. "I believe it was intended for improvements to school buildings." The Urban Institute's Peterson says the funding of an assistant principal's salary is "unusual," since 20-year bonds typically pay for uses that last at least that long.

Checks authorized by Allen, Nolan and Aponte were also issued without receipts for the Holy Cross Church of God in Christ, located on Broad Street. In all, $42,000 was given to the church, say the three councilors, to renovate rooms used for afterschool programs and community meetings. The church's pastor, Bishop Robert Farrow, "was supposed to give me some information," explains Glavin. "He is supposed to be sending me some invoices."

But Farrow says the city never asked for invoices. Walking under the community room's new ceiling lights and across the adjoining rooms' new carpeting, the pastor says city inspectors closely monitor the work being done. "Nothing of the city money has been used in the sanctuary part," Farrow emphasizes. "It's all used in the community part."

Steve Brown, executive director of the Rhode Island chapter of the American Civil Liberties Union, says the expenditures raise concerns about the separation of church and state. The ACLU doesn't yet have enough information to pass judgment, Brown relates, but he adds, "If they're just giving money to a church with no written standards . . . That in itself is problematic."

Cicilline also objects to the use of bonds to help non-profit agencies. "It's irresponsible to ask the residents of the City of Providence to make donations to non-profit organizations," says Cicilline, a likely mayoral candidate in 2002. "It's not appropriate to use borrowed money . . . it shouldn't happen."

Allen, Nolan and Aponte say they had concerns about the church and state issue, but they concluded the money was a permissible use if it benefited the community and wasn't being used to deliver religious doctrine.

As for receipts, Allen says, "It's Mr. Glavin's responsibility that we dot our i's and cross our t's on what the expenditures are."

IF PROVIDENCE VOTERS approve another $50 million bond in November, most observers think the program will be administered in the same way as the previous

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one.

Allen says his top priority is purchasing tens of thousands of trash cans for homeowners to help eliminate Providence's rat problem. He also has a backlist of people who need new sidewalks. Nevertheless, he hopes the next bond will be "less political and more scientific," and rely more heavily on a professional planning.

Aponte, though, says, "I don't hold out a lot of optimism that will happen. "It's very political. People as elected officials want to make sure they bring home their portion of the bacon."

Saying "Streets and sidewalks is the cornerstone of the improvement program," planning director Palmieri provided the Phoenix with a draft plan for neighborhood spending projects. But the list contains no specific project spending amounts. The city's current five-year capital plan also offers few clues. The plan is "simply a listing of the projects each of these [city] departments would like to have funded...with minimal analysis," according to the preface.

Ajello, the state representative, believes the bond's faults extend beyond dividing the money among 15 councilors. First, she says, sidewalks and streets should be repaired with operating funds, rather borrowed money. Clarkin agrees, but Cianci and Nolan describe Ajello's reasoning as flawed. "How much would she like the tax rate to go up?" asks Cianci. "This way, we can make the improvements and the tax rate doesn't go up."

Adds Nolan, "You can tell Edie Ajello we certainly would like it that way . . . but the state's going to have to give us more for schools."

But although Cianci and Nolan are correct to note that spending $50 million on capital projects over four years would likely force a tax increase, borrowing $50 million will cost taxpayers about twice that much over the next 20 years because of interest payments.

Ajello is supported by Council Majority Leader Allen criticizing the ambiguous language for the proposed $50 million bond. In contrast, Ajello observes, Cranston voters typically consider a series of separate bond proposals with specific uses. This year, for example, Cranston residents will be asked to approve six bonds with a total tab of $35 million. Separate approval will be required to finance open space acquisition, police station construction, sidewalk and road repair, storm drain overhauls, playground and athletic field improvements, and school renovations.

The use of separate bonds, and a prohibition on the transfer of bond funds from one project to another, was adopted by the Cranston City Council in the mid-'90s after some controversial handling of bond money by former Mayor Michael Traficante. "We wanted the voters to know exactly what they were voting for," explains Cranston City Council President Kevin McAllister.

Allen and Ajello support this kind of more direct approach. "This is the taxpayers' money," the majority leader says. "We owe it to them to give as much specificity as

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possible. I would not give someone a check for $5000 and not write down what it's used for."rk -- except in the pages of Newsweek -- will demand to be heard. Woof!

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February 2010 - i -

School Board Robert Wise, President Maila Touray, Vice President Philip Gould Magaly Sánchez Brian Lalli Melissa Malone

Executive Staff

Thomas M. Brady, Superintendent Carleton W. Jones, Chief Operating Officer Mathew Clarkin, Jr., Chief Financial Officer Sharon Contreras, Chief Academic Officer

Stephanie Federico, Chief of Staff Kim Rose, Chief of Communications & Engagement

- i -

Mayor

David N. Cicilline

City Council

Seth Yurdin Ward 1

Cliff Wood Ward 2

Kevin Jackson Ward 3

Nicolas J. Narducci, Jr. Ward 4

Michael A. Solomon Ward 5

Joseph DeLuca Ward 6

John J. Igliozzi Ward 7

Leon F. Tajada Ward 8

Miguel Luna Ward 9

Luis A. Aponte Ward 10

Balbina A. Young Ward 11

Terrence Hassett Ward 12 Majority Leader

John J. Lombardi Ward 13

Peter S. Mancini Ward 14 President

Josephine DiRuzzo Ward 15 President Pro Tempore

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Acknowledgement

The 2010 update to the Facilities Master Plan has been compiled after substantial input from school principals, teachers, students, parents, and citizens as well as the Superintendent’s office and the Department of Public Property.

A special thanks is extended to those from City Year and Brown University who acted as facilitators and scribes during the community engagement process for the 2010 Update of the Facilities Master Plan.

Fortes/Lima ES Media Center

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- iv -

Executive Summary

The enrollment in the Providence Public School District (PPSD) has declined from a high of 27,900 in 2003 to 23,484 in 2009 or approximately 16% in six years. This has resulted in excess capacity in the system. The challenge of balancing the need for the community to be served by educational facilities in close proximity vs. the operational capacity of the system to provide appropriate programming in these facilities is what the update to the Facilities Master Plan seeks to address.

Currently PPSD has 4.2 million square feet of building to operate and maintain at a cost of $18.2 Million. Approximately $177.5 million of capital funding was spent on PPSD facilities, from 2006 – 2008. These dollars covered large modernizations, small capital projects and projects such as system wide security cameras, boiler controls and roofs. Over the past ten years, eleven facilities have been fully modernized. Continued routine and preventative maintenance is necessary for all buildings.

This update to the Facilities Master Plan proposes:

Closing of seven educational facilities Conversion of two schools to a K-8 grade structure Modernization of 18 school facilities Reconfiguration / Renovation to 11 school facilities Routine/Preventative Maintenance to 11 school facilities

The proposed changes would result in:

Reducing the inventory by 456,907 square feet for operations and maintenance Reducing the high school capacity by 590 seats Reducing the middle school capacity by approximately 1425 seats Reducing the elementary school capacity by 1206 seats

- iv -

Table of Contents

Key Individuals and Groups School Board i Executive Staff i Mayor ii City Council ii Acknowledgment iii Executive Summary iv

Introduction 1 Purpose 1 Process 1 Outreach, Engagement, Dialogue 2 Community Meetings 2 Chart 1: Stakeholders represented at Round II Community Meetings 2 Providence Public Schools at a Glance 3 Enrollment 3 Student Demographics 3 Chart 2: Ethnicity of Students 3 Table 1: Free and Reduced Lunch Percentages 3 Class Size 3 Athletics 3 Transportation 4 Table 2: Special Populations 4 Active Schools 4 Map 1: Current Inventory of Active Schools 5 Map 2: Capacity by Level and Planning Area 6

Demographics 7 Providence Demographics 7 Table 3: Actual, Estimated, and Projected Population 7 Table 4: Population by Cohort 8 Chart 3: Demographic Change 8 Table 5: Ethnicity 9 Table 6: Educational Attainment 9 Planning Area Demographics 10 Map 3: Projected Change in Population 10 Map 4: Projected Change in School Age Children 11 Map 5: Projected Change in Hispanic Population 12 Enrollment- Actual and Projected 13 Chart 4: Enrollment History 13 Table 7: Projected Enrollment 13 Table 8: Resident Live Births 13 Map 6: Enrollment Trends by School 14 Table 9: Schools with Decreasing Enrollment 15 Academic Performance 16 Map 7: AYP Status by School 16

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Table 10: Schools that have not met AYP 17

Facilities Alignment with the Educational Program 18 Map 8: Educational Adequacy by School 19 Table 11: Schools that have Educational Adequacy scores within the Poor category 20

Schools as Center of Community 21 Map 9: After Hours School Use 21

Facilities Condition 22 Map 10: Facilities Condition Status by School 22 Table 12: Schools with FCI rating within the Poor Category 23

Operational Efficiency 24 Table 13: Expenditures 2006-2008 24

Geographic Context 25 Map 11: Distribution of Schools with no schools at the same level within 1 mile 25 Table 14: Schools within 1 mile of 1 or more schools at the same level 26

Community Engagement 27 Round II 27 Chart 5: Age Group of Participants 27 Chart 6: Age of Oldest Child 27 Round III 28 Closures 28 Grade Configuration 29 Gregorian 30

Final Recommendations 31 Map 12: Final Recommendations 31 Facilities Recommended for Closure 32 Elementary Schools 32 Middle Schools 33 High Schools 34 Facilities Recommended for Modernization 35 Facilities Recommended for Renovation 35 Additional Recommendations 35 Horizontal Facility Improvement Programs 35 Table 15: Summary Table Sorted by Implementation Strategy 37 Table 16: Summary Table Sorted Alphabetically 38

Definitions 39

List of Appendices 40

Appendix I: School Profiles

Appendix II: Facilities Condition Index Table

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Appendix III: Educational Adequacy Table

Appendix IV: Capacity Worksheets

Appendix V: eRate Projects for 2009-2010 and eRate Projects for 2010-2011

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- 1 -

Introduction

PURPOSE

Planning for the educational facility needs of the Providence Public School District (PPSD) is a process that periodically looks at a variety of factors including the alignment of facilities to programs being offered, physical condition of buildings, enrollment trends, proximity of schools to other schools, academic performance and schools as center of community. In 2006, PPSD hired DeJong to produce a Facilities Master Plan. Realizing the Dream was published in December 2006. The purpose of this document is to update the Facilities Master Plan based on conditions that have changed since 2006. Fanning Howey was selected to work with StudioJAED and Gilbane to produce the PPSD 2010 Facilities Master Plan.

PROCESS

In order to update the PPSD Facilities Master Plan, a process was established with the Superintendent and his staff, to ensure transparency and public engagement. The following timeline was established:

May  Reviewed 2006 Facility Master Plan  Reviewed previous building assessments June  Conducted Principal interviews Investigate  Conducted Walk-throughs of each facility  Geocoded Students and preliminary demographic analysis  Community Meetings Round One July - August  Reviewed NESDEC enrollment projections  Calculated building capacities  Reviewed field notes September  Briefing to School Board Validate October  Conduct Community Meetings Round Two November  Internal Review

December

 Provide Preliminary Recommendations January  Round Three Community Meetings Recommend February  Deliver Final Report  Present Final Recommendations to the Board

- 1 -

Outreach, Engagement and Dialogue

Reaching out to the community has been an important part of the Facilities Master Plan process. The first meetings occurred in June 2009, to announce the start of the process. Flyers have been posted to announce the community meetings, mass phone calls were made, and a link on the PPSD website was dedicated to the update process. In September, a presentation was made to the School Board to update them on the process. In January 2010, the Superintendent briefed the City Council in an informational session on the process, progress and preliminary recommendations.

Community Meetings

Community Meetings have occurred in each of the six Planning Areas. During the Round II series of meetings, there were two opportunities to participate at each Planning Area. One meeting was during the week in the evening and the second meeting was during the weekend in the morning or early afternoon. Over 100 parents, students and citizens participated in the Round II meetings alone. Translation services were available at each meeting in Spanish, Hmong, Lao, and Cambodian. Child care services and light refreshments were provided at each meeting as well. Students from Brown University and City Year employees were available to act as facilitators and scribes. TurningPoint, an electronic survey system was used to engage the community in a discussion of critical issues. Results were demonstrated in “real time” and lead to deeper discussion and gathering of additional data following the survey. The presentation and survey portions of the meetings were documented.

Chart 1: Stakeholders Represented at Round II Community Meetings

6% 6%

PPSD Staff 16% Parent / Guardian of student in Providence Public Schools Parent / Guardian of student in charter schools 4% Parent / Guardian of student in Independent schools 6% Resident of Providence

62% Other

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Providence Public Schools at a Glance

Enrollment 23,632 students As of September 2009

Student Demographics

Chart 2: Ethnicity of Students

Table 1: Free and Reduced Lunch Percentages

GRADE LEVEL FREE REDUCED PAID NOTE: PPSD is currently sponsoring a Universal Free Lunch Program in all Elementary 80% 8% 12% middle and high schools. All students qualify for this program, as long as Middle 80% 8% 11% they return a completed lunch High 72% 10% 18% application to their school.

Class Size PPSD has a student to teacher ratio of 26:1 for general education in every school. Special education self-contained has a student to teacher ratio of 12:1 and special education 230-day has a 6:1 ratio.

Athletics PPSD recognizes the health benefits of physical activity. Sports activities help students gain a sense of self-confidence, belonging and discipline.

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There are: • 1,750 athletes • 71 athletic teams • 252 students participate in the Alternative Athletics Program

Transportation There are 147 busses for the PPSD schools and 6 busses for theTimes2 Charter School. Of the 147 PPSD busses 27 are for tuition special education students and 42 are for parochial and private school students. Approximately 2,800 regular education high school students receive monthly RIPTA bus passes based on living more than three miles from the high school. Special accommodations are made for financial and/or medical hardships.

Table 2: Special Populations

Special Education (ages 3-21) 1,389 6%

Bilingual Students 1,393 6%

ESL Students 1,573 7%

Dual Language 236 1%

Total in program 4,591

Active Schools The Providence Public School District (PPSD) has 44 schools, 4 annexes, 1 center, 2 charter schools. Six schools are site-based managed (*). 25 Elementary Schools and 4 Annexes (ax): PreK-Gr. 5: Bailey, Pleasant View, West Broadway PreK-Gr. 6: Carnevale, *Gregorian, King Gr. K-5: D’Abate, Feinstein at Broad Street, Feinstein at Sackett Street, Flynn, Fogarty, Lima (ax: PreK-1), Reservoir, Windmill, Woods Gr. K-6: Kennedy, Kizirian, Lauro, Veazie, Webster, West, Young Gr. 2-5: Laurel Hill (ax: K-1), Messer (ax:K-1) Gr. 2-6: *Fortes (ax: PreK-1) 8 Middle Schools Gr. 6-8: Bishop, Bridgham, DelSesto, Greene, Hopkins, Perry, Stuart, Williams 11 High Schools Gr. 9-12: Alvarez, Central, Classical, *Cooley Health & Science High School, *E-Cubed Academy, *Feinstein, Hope Arts, Hope Information Technology, Providence Career & Tech Academy Mount Pleasant, *Providence Academy of International Studies (PAIS) 1 Center Servicing Students with Disabilities Gr. 9-12: Harold A. Birch Vocational Program

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2 District Charter Schools Gr. K-12: Times2 Academy Gr. 9-12: Textron Chamber of Commerce

Map 1: Current Inventory of Active Schools

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Every facility was assessed for its program capacity. Map 2 below shows the capacity available within each planning area by level of school. It should be noted that some of the capacity is in need of repair prior to occupancy.

Map 2: Capacity by Level of School and Planning Area

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Demographics

Providence is at an interesting point demographically. The key factor is determining which data effect the direction that the Providence Public Schools should take in its long-range planning.

Overall, the city is growing. Within that broad statement is the fact that the number of pre-school and school-age children are increasing. That has obvious implications for facility planning. The percentage of persons of Hispanic or Latino origin is increasing. This indicates the potential need for increased emphasis on ESL classes. The population today is better educated than in the past. However, while it is currently estimated that 22% of the population does not have a high school diploma that is a significantly greater percentage than the U.S. population as a whole (15%). Offering after-hours adult education classes has facility planning and use implications.

In the following parts of this demographic section information about the overall Providence demographics followed by the changes in each of the six (6) planning areas is presented. This information helps explain the historic and projected changes in school enrollment which is presented in the final part of this section..

PROVIDENCE DEMOGRAPHICS

During the period 2000 to 2012, Providence is projected to experience an increase in total population of 10.7%. Not as large a percentage increase as the U.S. population is projected to experience the growth in population is significantly greater than the state of Rhode Island or the New England region.

Table 3. Actual, Estimated and Projected Population Total Population Change 2000 2000 2007 2012 to 2012 Providence 178,241 189,285 197,273 10.7% Rhode Island 1,087,326 1,140,322 1,177,800 8.3% New England 14,455,590 15,098,941 15,543,849 7.5% United States 292,227,353 316,400,521 333,853,201 14.2% Source: US Census Bureau and Applied Geographic Systems (AGS)

Since the last decennial Census in 2000, projected forward to 2012, the city is expected to experience a shift in its demographics. It is estimated that there are currently slightly fewer school age children and parents than in the year 2000 (Table ___). However, overall there is an increase in pre-school age children which translates to more school age children in 2012 and beyond. The number of “empty nesters” and “seniors” is projected to continue to increase.

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Table 4: Population by Cohort Providence Public School District 2000 2007 2012 % of Total % of Total % of Total Demographic Cohorts Census Estimate Projection Pre-School (0-4) 12,607 7.1% 13,873 7.3% 14,500 7.4% School Age (5-17) 36,527 20.5% 35,567 18.8% 36,048 18.3% Young Adult (18-24) 28,949 16.2% 29,212 15.4% 27,867 14.1% Parents (25-49) 59,074 33.1% 62,389 33.0% 63,771 32.3% Empty Nesters (50-64) 18,306 10.3% 24,078 12.7% 28,268 14.3% Seniors (65+) 22,778 12.8% 24,166 12.8% 26,819 13.6% TOTAL POPULATION 178,241 189,285 197,273 Source: US Census Bureau and Applied Geographic Systems (AGS)

This is interesting demographically since these changes are somewhat different than what is being experienced in the rest of Rhode Island, New England and the United States as a whole. Chart 3 illustrates the percent change by demographic groups for Providence as compared to the other entities. Providence is the only area to experience an increase in the pre-school cohort and a significantly smaller loss of parent age persons.

Chart 3: Demographic Change

6.0%

Percent Change Between 2000 and 2012 by Demographic Groups for Providence and Other Areas 4.0%

2.0%

0.0%

Pre-School (0-4) School Age (5-17) Young Adult (18-24) Parents (25-49) Empty Nesters (50-64) Seniors (65+)

-2.0%

-4.0%

-6.0%

Providence Public School District Rhode Island New England U.S.

-8- Final Recommendation

Providence, like many areas, is experiencing a significant increase in persons of Hispanic or Latino origin. From 2000, when 52,146 or 30% of the population identified themselves as being of Hispanic or Latino origin that is projected to increase to 80,625 persons (42.6% of the population) in 2012.

Table 5: Ethnicity Providence Public School District 2000 2007 2012 % base % base % base Census Estimate Projection Population by race 173,618 183,067 189,434

One race 163,063 93.9% 170,469 93.1% 176,027 92.9% White 94,666 54.5% 92,904 50.7% 95,381 50.4% Black 25,243 14.5% 28,487 15.6% 28,439 15.0% American Indian/Alaska Native 1,975 1.1% 2,372 1.3% 2,400 1.3% Asian 10,432 6.0% 11,322 6.2% 11,321 6.0% Hawaiian/Pacific Islander 270 0.2% 410 0.2% 458 0.2% Some Other Race 30,477 17.6% 34,974 19.1% 38,028 20.1%

Two or More Races 10,555 6.1% 12,598 6.9% 13,407 7.1% Hispanic or Latino origin 52,146 30.0% 69,973 38.2% 80,625 42.6% Source: US Census Bureau and Applied Geographic Systems (AGS)

The educational attainment of the Providence population has increased significantly since 2000. The estimates for 2007 and the projection for 2012 for each educational attainment category are shown in the following table. Clearly there is a shift toward a better educated population which should result in an increase in the ability of Providence to compete for higher-paying jobs in the future. However, as previously noted the percentage of the population with less than a high school diploma is higher than the national average indicating the need to continue to plan for adult education classes.

Table 6: Educational Attainment Educational Attainment Trend Providence Public School District 2000 % 2007 % 2012 % Educational attainment 95,535 104,415 111,019 Less than 9th grade 14,515 15% 11,066 11% 8,821 8% 9th to 12th grade, no diploma 18,154 19% 11,833 11% 8,399 8% High school graduate 21,983 23% 28,927 28% 33,513 30% Some college, no degree 13,044 14% 15,060 14% 16,007 14% Associate degree 4,471 5% 6,781 6% 8,434 8% Bachelor's degree 12,553 13% 17,257 17% 20,580 19% Graduate or professional degree 10,815 11% 13,491 13% 15,265 14% Source: US Census Bureau and Applied Geographic Systems (AGS)

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PLANNING AREA DEMOGRAPHICS

During the period 2000 to 2012, two of the six planning areas are projected to experience total population growth greater than ten percent (10%).

Map 3:

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Drilling down into the data the Central planning area is projected to experience a 1-2% increase in the number of school age children during the period from 2000 to 2012. The East, West and South are projected to see little change while the North and Northwest planning areas will experience a very slight decline in the number of school age children.

Map 4:

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While all six planning areas are projected to see a large increase in persons of Hispanic or Latino origin the greatest increase in terms of the number of persons is expected in the Central area followed by the North and South areas.

Map 5:

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ENROLLMENT – ACTUAL AND PROJECTED

Enrollment peaked in 2003 at 27,900 students. Since then, the enrollment has declined to 23,632 which represents a decrease of 4,268 students or 15.3%. This is an average annual decline in enrollment over the past six years of over 700 students. Chart 4:

Despite this significant loss in Enrollment History the number of students enrolled in the Providence Public Schools that trend is 29000 projected to moderate. In 28000 2007, the New England 27000 School Development Council 26000 (NESDEC) calculated a 25000 enrollment projection series to 2017 24000 showing a decline followed by 23000 a leveling of enrollment. 22000 The following table shows the 21000 projected enrollment numbers and the annual change.

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 In 2008 and 2009 the actual Year enrollment has been 23,710 Source: PPSD and 23,632 respectively. This was slightly better than projected. As shown in the NESDEC projection (Table 7), the “bottom” relative to student enrollment is expected to be approximately 21,422 students in the 2016-17 school year followed by a modest increase. Table 8: Estimated Resident Table 7: Year Resident Live Births School Projected Live Change The number of resident live births Year Enrollment Births which correlates to the number of 2007-08 24,233 2002 2,864 2003 2,905 kindergarten students the system 2008-09 23,617 -616 2004 2,834 should expect five years later are 2009-10 23,187 -430 2005 2,895 shown in Table 4. For example, in 2010-11 22,655 -532 2006 2,845 2002, the resident live births for 2011-12 22,147 -508 2007 2,862 Providence were 2,864 and in 2007 2012-13 21,833 -314 the PPSD kindergarten enrollment 2013-14 21,614 -219 was 1,915 or approximately 67 %. In 2014-15 21,513 -101 2008, the resident live births declined to 2,795, assuming a similar 2015-16 21,478 -35 Source: Office of Vital Records, Rhode Island capture rate of 67%, the 2016-17 21,422 -56 2017-18 21,619 197 Department of Health kindergarten enrollment in 2013 (Note: Data has been should be approximately 1,873. Source: NESDEC apportioned)

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While the student enrollment for the city as a whole has continued to decline, individual schools have had stable or increasing enrollment. Map 3, below, illustrates enrollments trends by school from September 2006 to September 2009.

Map 6: Enrollment Trends by School

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Table 9: Schools with Decreasing Enrollment

School % Change from Total 2007-08 Total

Total 2006-07 Total 2008-09 Total 2009-10 Total 2006-07 to 2009-10 TIMES 2 MS 228 206 197 127 -44.30% HOPKINS MS 569 477 424 391 -31.28% DELSESTO MS 473 399 398 349 -26.22% YOUNG ES 329 339 310 260 -20.97% PERRY MS 730 698 604 609 -16.58% BAILEY ES 434 431 354 370 -14.75% WOODS ES 355 299 288 303 -14.65% MESSER ES 295 262 239 254 -13.90% STUART MS 826 782 672 713 -13.68% WILLIAMS MS 870 759 722 753 -13.45% FORTES ES 411 354 348 357 -13.14% CARNEVALE ES 563 554 562 495 -12.08% PROV ACAD INT STUDY HS 410 375 377 365 -10.98% VEAZIE ES 589 553 554 555 -5.77% LAUREL HILL ES 393 376 378 371 -5.60% CENTRAL HS 1250 1,090 1159 1182 -5.44% WINDMILL ES 384 398 376 364 -5.21% PLEASANT VIEW ES 474 456 439 450 -5.06% Note: Schools listed had greater than 5% decline in enrollment from 2006 to 2009

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Academic Performance

Currently, 21 schools within PPSD have met Adequate Yearly Progress (AYP). Each Planning Area has schools which have met AYP. The West Planning Area has the most schools, six (6) which have passed AYP. The Northwest Planning Area has the least with only 1 school having achieved AYP. Map 4 below shows the AYP status by School:

Map 7:

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Table 10: Chart of Schools that have not met AYP

Enlish Language ELA Math Arts Participation Math Participation Attendance School Short Name Short School AYP Phase Met (2009-10) Feinstein @ Sackett ES IP xx Fogarty ES IP xx Fortes ES IP x Kennedy ES IP x Kizirian ES IP xx Messer ES IP x Pleasant View ES IP xx West ES IP xx Windmill ES IP x Woods ES IP x Young ES IP x Bridgham MS IP x Stuart MS IP x Alvarez HS IP x Central HS IP xxx E-Cubed HS IP x Feinstein HS IP x Hope Arts HS IP x Hope Tech HS IP x Mt. Pleasant HS IP xx PAIS HS IP xxx Cooley HS IP x Source: PPSD

Note: IP = Insufficient Progress – School did not meet school wide targets for current year

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Facilities Alignment with the Educational Program

In June 2009, several teams of Architects, Engineers and Educational Facilities Planners walked through each of the PPSD school facilities. While one group was looking at the condition of the building, the other was looking at the spaces available within each school to see if they aligned with the program being offered at the school.

The following criteria were used to assess “Educational Adequacy” of each school facility: 1.1 Size of academic learning areas meets desirable standard specified in educational program

1.2 Classroom space permits flexibility in space arrangements

1.3 Location & relationship between spaces within buildings meets educational program requirements

1.4 Size of specialized learning areas meets educational program requirements

1.5 Library / resource / media center provides appropriate space

1.6 Space for teacher resource areas is convenient and appropriate

1.7 Gymnasium and/or recreational areas serve phys ed program

1.8 Cafeteria has sufficient space for seating, delivery, stor. & food prep.

1.9 Space for administrative offices and support staff workplaces are sufficient and adequately equipped

1.10 Storage for teacher and student materials is adequate

2.1 Surrounding environment does not disrupt learning

2.2 Entrances & exits and walkways are designed appropriately

2.3 Lighting is adequate for the space and educational program

2.4 Water stations and restroom facilities are conveniently located and accessible

2.5 Gathering spaces serve the educational program and enhance communication and community involvement

These criteria are similar to what the Council of Educational Facilities Planners, International (CEFPI) recommends when assessing educational adequacy. Each criterion was scored from 1 to 5. The sum of the scores equals the Educational Adequacy (AE) score. The AE scores were then categorized as Good (60+), Fair (46-59) or Poor (0-45). Map 5, on the next page, illustrates the status by school. Details of these reports are provided

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for each school in Appendix I of this report. A chart of the AE scores for all of the schools is provided in Appendix III.

Map 8:

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Table 11: Chart of Schools that have Educational Adequacy Scores within the Poor category

Educational School Short Name Adequacy Reservoir ES 27 West Broadway @ Bainbridge 32 Feinstein @ Sackett ES 34 Pleasant View ES 37 Bridgham MS 38 Gregorian ES 40 Kizirian ES 40 West ES 40 Messer Annex 41 Windmill ES 42 Feinstein @ Broad ES 43 Flynn ES 43 Laurel Hill ES 43 Lauro ES 44 Laurel Hill Annex 45 D'Abate ES 47

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Schools as Center of Community

School buildings have long been noted as landmarks in their communities. Historic school buildings were often built with substantial architectural integrity and may be seen from a distance because of their height, providing points of reference. Schools also serve as locations for community meetings, Boys and Girls club activities, Department of Recreation activities, sport leagues, adult education and other uses after normal school hours. When recommending a closure or consolidation of a school program, it is known that more than the school community will be affected.

Map 9: After Hours School Facility Use

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Facilities Condition

During the 2006 Facilities Master Plan process, each building was evaluated. Since then many buildings have had improvements. During this process, the evaluation team updated the information for each building based on the improvements that had occurred since they last evaluated the buildings, and new cost factors were developed. Appendix II contains a table with the individual facilities scores. These scores are referred to as the Facilities Condition Index or FCI.

If the FCI score fell between .0 and .33 it was rated as “good”, a score of between .34 and .6 received a rating of fair, and .61 or higher received a rating of “poor”

Map 10:

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Table 12: Schools with FCI rating within the Poor category

School FCI Messer Annex 1.04 Laurel Hill ES 0.88 Laurel Hill Annex 0.85 West Broadway @ Bainbridge 0.85 Mount Pleasant HS 0.81 Reservoir ES 0.78 Perry MS 0.72 Hope HS 0.71 Pleasant View ES 0.71 Flynn ES 0.7 West ES 0.7 Feinstein HS 0.68 Lauro ES 0.66 King ES 0.65 Gregorian ES 0.64 Webster ES 0.64 Windmill ES 0.64 Classical HS 0.63 Greene MS 0.62 Hopkins MS 0.61 D’Abate ES 0.59

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Operational Efficiency

School facilities require both routine and preventative maintenance. Periodically they may also need to be reconfigured or require additions based on the educational programs being offered. Capital expenditures on PPSD facilities for 2006-2008 are displayed in Table 8 below:

Table 13: Expenditures 2006-2008

Location 2006 2007 2008 Investment 2006-2008 Carnevale ES $28,568.03 $28,568.03 Feinstein HS $58,780.82 $58,780.82 District Wide Boiler Controls $62,811.05 $62,811.05 Conley Stadium $42,054.56 $92,608.66 $134,663.22 Windmill ES $96,288.97 $68,313.00 $164,601.97 Classical HS $91,179.54 $76,009.00 $167,188.54 Webster ES $170,963.82 $170,963.82 District Wide Security Cameras $192,578.41 $192,578.41 Administration Building $2,793.51 $225,000.00 $227,793.51 Perry MS $127,380.83 $148,616.00 $275,996.83 Veasie ES $157,922.18 $135,163.00 $293,085.18 Kennedy ES $303,210.62 $303,210.62 West ES $310,248.31 $310,248.31 Bridgham MS $322,075.95 $322,075.95 West Broadway ES $325,303.20 $325,303.20 District Wide Roof Repairs $222,331.13 $17,422.79 $108,751.00 $348,504.92 King ES $26,390.86 $352,348.41 $378,739.27 Flynn ES $213,194.27 $182,039.00 $395,233.27 DelSesto MS $364,600.42 $33,981.63 $398,582.05 Reservoir Ave ES $135,129.70 $271,326.00 $406,455.70 Stuart MS $169,590.26 $171,157.63 $83,303.00 $424,050.89 Laurel Hill ES $499,708.00 $499,708.00 Lauro ES $173,331.49 $479,916.00 $653,247.49 D'Abate ES $322,158.24 $449,430.00 $771,588.24 Mt. Pleasant HS $523,445.07 $426,012.49 $35,197.53 $984,655.09 Pleasant View ES $92,800.63 $929,262.91 $1,022,063.54 Hope HS $1,860,121.72 $25,917.65 $1,886,039.37 Gregorian ES $1,997,703.82 $341,707.43 $2,339,411.25 Nathan Bishop MS $35,000,000.00 $35,000,000.00 Central HS $38,000,000.00 $38,000,000.00 PCTA/Hanley/FH $22,268,584.57 $68,731,415.43 $91,000,000.00 $66,161,249.98 $73,157,647.03 $38,227,251.53 $177,546,148.54

Source: Gilbane Inc.

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Geographic Context

In a school district with shrinking enrollment it is unlikely that any new sites will be developed for schools. Instead, existing school sites should be used as efficiently as possible, and when multiple schools are in close proximity it may be necessary to close or consolidate programs. Conversely, when a school facility is located in an area bound by geographic barriers such as highways, or rivers, it may be necessary to not only keep it open but revitalize it. There are schools in the district which are the only schools of that level within a mile. It is recommended that these facilities remain open in order to ensure the community bound by that geography is appropriately served. Map 8 shows the distribution of schools with no other schools of the same level within a mile.

Map 11:

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Table 14: Table of Schools within 1 mile of 1 or more schools at same level

Number of Schools School within a mile Feinstein @ Sackett 8 Bailey 7 Fogarty 7 Fortes 7 Lima 7 Woods 7 Young 7 D'Abate 6 Flynn 6 Messer 5 Reservoir 5 Carnevale 4 Laurel Hill 4 Laurel Hill Annex 4 Webster 4 Alvarez 3 Cooley 3 Feinstein @ Broad 3 Feinstein HS 3 Messer Annex 3 PAIS 3 West Broadway @ Bainbridge Street 3 West Broadway @ DelSesto 3 West ES 3 Bridgham 2 Central HS 2 Classical 2 Kennedy 2 PCTA/Hanley 2 Perry 2 Stuart 2 Veazie 2 9th Grade Academy 1 Delsesto 1 Fortes Annex 1 Lauro 1 Lima Annex 1 Pleasant View 1 Williams 1 Windmill 1

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Community Engagement

ROUND II The greater Providence community participated in the Round II community meetings. Twelve meetings were held including two in each Planning Area during October 2009. While approximately 61% of the participants represented parents of current PPSD students, 11% were parents of charter or independent school students, over 22% were either residents of Providence or classified themselves as other, and the remaining 6% were staff of PPSD. The top six schools with the most community participation included: Kennedy ES at 12%, West ES at 9%, Central HS, at 7%, Gregorian ES at 6%, Veazie ES at 4% and Cooley at 4%.

Note: 14% responded “not applicable” and 5% indicated affiliation with more than one school.

Stakeholder Participation at Community meetings: Chart 5: Parents, teachers, staff and students as well as residents Age Group of Participants participated in the community meetings. Some of the 2% 6% 12% residents had young children 11% who may attend PPSD schools in the future. Less than 20 years old 20 - 30 years old 31 – 40 years old Approximately 18% of those 27% 41 – 50 years old who participated had no 51 – 60 years old children. The pie chart below Over 60 years old illustrates the age group of the 42% oldest child associated with the participant. The category with the highest percentage (47%) is 4-11 year olds or elementary aged students. Chart 6:

When surveyed regarding the needs of the participants’ Age of Oldest Child schools, the top three responses were: science labs 11% (20%), playground/field 18% improvements (18.4%), Parking 0-3 years old (15.6%), Music Room (10%). 2% 4-11 years old Note: 13.2% chose “Other”. 12-14 years old 11% 15- 18 years old The top three physical attributes 19 years old or more Not Applicable that make the participants’ 47% schools special included: 11% Classrooms (30.09%), Library (19.91%), Playground /fields 13.72%).

Note: Where playgrounds or fields have been recently upgraded the community appears to have noticed and placed a value on them, likewise where they are not in good condition, the community affected has noticed and wants improvement.

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ROUND III During the period from January 28th through February 6th a series of six (6) community engagement meetings were held throughout the city. These represented the third of three rounds of community engagement meetings. The first round focused on informing the residents of Providence about the process being followed to update the Facilities Master Plan. The second was to gather feedback from citizens about key issues to be considered. The final round was to collect feedback on the preliminary recommendations embodied in the draft Facilities Master Plan.

Each of the six meetings followed the same format. The facilitator began with an overview of the process; discussed the key factors used in the analysis of all facilities; and, presented the preliminary recommendations.

One of the key elements of the presentation was that each facility was evaluated using these factors:  Enrollment  Capacity  Geographic Location  Past Expenditures on the facility  Educational Performance as expressed as Adequate Yearly Progress (AYP)  Educational Adequacy  Facility Condition Index

The presentation concluded by showing that the preliminary draft update to the Facilities Master Plan proposed:  Closing of seven educational facilities  Conversion of three schools to a K-8 grade structure  Modernization of 18 school facilities  Reconfiguration / Renovation to 11 school facilities  Routine/Preventative Maintenance to 11 school facilities

The proposed changes would result in:  Reducing the inventory by 456,907 square feet for operations and maintenance  Reducing the high school capacity by 590 seats  Reducing the middle school capacity by approximately 1425 seats  Reducing the elementary school capacity by 1206 seats  An annual savings of $2.3 million in avoiding operating costs associated with the excess educational space.

Following the presentation the facilitator asked those in attendance to first ask questions and, once the audience questions were asked, to make statements. This “open mike” format worked well and while questions were asked and answered there were a welcomed number of comments received.

Closures - Clearly, the recommendation to close some facilities drew the most public input. Whenever a school is targeted for closure those persons most affected often attend meetings to express their concerns as they should. Therefore, it was not surprising that the vast majority of those present at the six community meetings were parents, students and staff directly associated with the seven schools recommended for closure. In addition, there were some other residents in attendance who did not have a direct tie to a particular building via either a student or employment but who were interested in the effect a closure could have on the neighborhood.

Some key questions and statements about the proposed closings were as follows:

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Question/Statement - With a total PPSD operating budget of over $18.5 million, a savings of $2.3 million by closing seven schools is insignificant.

Response – While on a percentage basis the suggested savings is not especially large. However, in terms of actual dollars a savings of $2.3 million each year to be reallocated to other needs is significant. Keeping excess educational spaces heated, lit and maintained is a cost that should be avoided at all times but especially in today’s economic climate of extremely tight budgets and limited resources.

Question/Statement – Why was the number of twenty-six (26) students per classroom arbitrarily chosen to calculate the student capacity of each school?

Response – That number was not arbitrarily chosen. The Rhode Island Department of Education requires that capacity be calculated on the basis of twenty-six (26) students per classroom for regular education students and twelve (12) students per classroom for special education classes. This ensures that the capacity of every school is calculated the same way.

Question/Statement – Why are the closing schools being “punished”?

Response – The schools targeted for closing are not being “punished”. It is a matter of the district having too much capacity with declining student enrollment. Every school was evaluated according to the criteria listed in the plan; enrollment, capacity, geographic location, past expenditures, AYP status, educational adequacy and the physical condition of the facility. Those schools with the weakest scores using those criteria were then candidates for closure.

Grade Configuration - The second greatest number of comment received pertained to the recommendation to change the grade configuration at three schools to a Kindergarten through 8th grade model. The majority of the comments questioned putting lower elementary students in a school with middle school aged students. However, some respondents did support the K-8 model citing the fact that relationships established between students and teachers were maintained for a longer period of time.

Some key questions and statements about the K-8 model were as follows:

Question/Statement – How will student safety be addressed in terms of separating younger and older children in K-8 schools?

Response - The K-8 model does not inherently have more safety problems associated with it. It is widely used in public schools throughout the country and is the “model of choice” for many parochial schools. The key is to provide separation within the physical layout of the school so the older and younger students do not occupy the same space at the same time.

Question/Statement – Why K-8 schools when there is no clear data that the model works?

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Response – That is not true. Studies show that there is a loss of students whenever children transition from one school to another such as from elementary to middle and then from middle to high school. The familiarity, the sense of community is enhanced in a K-8 school and reduces the transitions a student experiences. K-8 models have been shown to enhance student retention.

Question/Statement – When Nathan Bishop was being planned the benefits and detriments of both the K-8 and 6-8 configurations were considered. Ultimately, the decision was made to go with the 6-8 model since the greater number of students at each grade level increases the course offerings that are possible.

Response - The plan to have three schools convert to the K-8 model will give parents a greater choice for their children during the difficult middle school years. For some parents the continuity of teachers knowing their children from kindergarten through eighth grade is a positive benefit. For other parents, increased course offerings or the ability to participate in expanded after school programs that are possible at 6-8 middle schools is important. The end result of implementing this plan will be increased options for parents.

Gregorian - The third largest group of comments centered on the suggestion that Gregorian be expanded and converted to a K-8 building. Apart from comments about the aforementioned student safety associated with combining broader age groups, there were concerns raised about the ability of the site to support a larger building; the impact of being close to a major highway; and, air quality factors during construction if students were to be present during renovations. The response was that site can support a larger building but that the designers will have to be creative in the use of space both within the building and on the site. Certainly, health concerns and the external environmental impacts would be considered. The success of the program at Gregorian was a primary factor in the recommendation to expand the school as well as the grade levels.

Please note that after the community meetings this recommendation changed slightly. Gregorian is still recommended for modernization, but not a grade reconfiguration change at this time. This allows Gregorian to act as a feeder to Nathan Bishop Middle School.

It should be noted that many of the comments and questions received at the meetings pertained to issues that were beyond the scope of the update to the Facilities Master Plan. In particular, many of those comments regarded staffing issues. Those issues could not be addressed at the community meetings since they will have to be addressed by the administration and faculty and staff once a final plan is formally adopted by the City.

Also, there were a considerable number of comments relative to the participants desire to return to neighborhood schools. As with staffing issues a move to neighborhood schools away from open enrollment would require a change in policy which was beyond the scope of the Facilities Master Plan update.

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Map 12:

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Final Recommendations

Facilities Recommended for Closure:

Elementary Schools

Feinstein @ Sackett ES Excess elementary capacity exists at other elementary schools within the District.

Summer 2011: Close Feinstein @ Sackett ES Fall 2011: Students attend other schools in close proximity

Messer Annex The cost to repair this facility exceeds the cost to replace the facility. It is recommended that the West Broadway at Bainbridge facility be modernized and paired with the Messer school.

Summer 2010: Begin to repair West Broadway @ Bainbridge Repair West Broadway @ Bainbridge Messer Fall 2011: Move Messer Elementary Students into West Broadway @ Bainbridge Summer 2011: Repair Messer ES building Fall 2012: Move Messer Annex students to Messer building Summer 2012: Close Messer Annex

Repair Messer Close Messer Annex

Windmill ES Excess elementary capacity exists at other elementary schools within the District. Note: capacity will also be available at Hopkins K-8.

Summer 2011: Close Windmill Elementary Fall 2011: Hopkins opens as K-8 Fall 2011: Students attend other

Hopkins Close Windmill ES schools in close proximity

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Final Recommendations

Middle Schools

Bridgham MS

Excess middle school capacity exists at Greene, and Stuart as well as other schools within the District. Reserve / Land Bank Greene for potential future school replacement site. Summer 2011: Close Bridgham MS Fall 2011: Students attend other schools in close proximity Stuart

Perry MS

Excess middle school capacity exists within the District. Summer 2011: Close Perry MS DelSesto Fall 2011: Students attend other schools in close proximity

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Final Recommendations

High Schools

Feinstein HS Current facility does not meet New England Association of Schools and Colleges (NEASC) accreditation standards without significant

renovation. Excess high school capacity exists at Alvarez as well as other high schools within the District. Summer 2010: Close Feinstein HS Fall 2010: Students attend other schools in Alvarez close proximity

Ninth Grade Academy Program is no longer active. Building should be returned to City Inventory. Summer 2010: Transfer to City Inventory

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Facilities Recommended for Modernization

Priorities by Level High Schools Middle Schools Elementary Schools 1. Classical HS 1. Greene MS 1. West Broadway @ Bainbridge building 2. Mount Pleasant HS 2. Hopkins MS 2. Gregorian ES 3. Hope HS 3. Reservoir ES

Facilities Recommended for Renovation

Priorities by Level Middle Schools Elementary Schools 1. Williams MS 1. Feinstein @ Broad ES 2. Stuart MS 2. Kizirian ES 3. Fogarty ES Note: No High Schools are affected in this category

Additional Recommendations

Horizontal Facility Improvement Programs:

Educational facilities have unique needs for physical improvements. The ages and sizes of the occupants as well as special needs they may have drive some needed improvements. The curriculum being delivered drives other needed changes to the physical structure. Improvements in technology require periodic updates to infrastructure. These improvements can be accomplished without undertaking an entire modernization of the building, and provide results that are more quickly realized by the school.

Other improvements which can be completed without an entire facility renovation or modernization include Warm, Safe and Dry projects and outdoor projects including playgrounds, fields, and other grounds related improvements. The former includes projects that affect the building envelop, thermal comfort, and safety. The latter includes projects that can be the most visible to the community since they focus on the grounds surrounding the physical structure of the school.

It is recommended that PPSD undergo five horizontal facility improvement programs.

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Developmentally Appropriate Renovations: o toilet facilities within the classroom for Kindergarten and 1st grade, or in close proximity, classrooms located on an exit level o Special education facility improvements o Physical Education o K-8 improvement for Lauro and Hopkins

Science Initiative: o Exploratory Labs o Science labs appropriate for the new curriculum

Technology upgrades o Interactive academic technology o Wireless o Classroom sound amplification o Classroom video projectors/ digital media presenters o eRate (2009-2010 and 2010-2011 projects listed in Appendix V:

Warm, Safe and Dry o Roofs o Windows o HVAC o Fire code o Security

Playgrounds / Fields o playgrounds o fields o outdoor classrooms o butterfly gardens o edible gardens

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Summary Table Sorted by Implementation Strategy Table 15:

School Name Level Conclusion Expenditure Implementation 2008-09 Enrollment Capacity Geographic Context Met Phase AYP (2009-10) Educational Adequacy Facility Condition Index 9th Grade Academy HS Program Closed 0170 1 IP 44 $0.00 Close Building Bri dgham MS Land Bank 614 724 2 IP 38 0.52 $322,075.95 Close Building Feinstein HS Poor Buil ding 356 420 3 IP 61 0.68 $58,780.82 Close Building Feinstein @ Sackett ES Addition/reconfigurati on 452 570 8 IP 34 0.52 $0.00 Close Building Messer Annex ES Return to City Inventory 153 156 3 41 1.04 $0.00 Close Building Perry MS Need to reduce Middle Capacity 604 869 2 MET 47 0.72 $275,996.83 Close Building Windmil l ES Geographic Context 376 480 1 IP 42 0.64 $164,601.97 Close Building Classical HS Successful Program in Poor Building 1003 1149 2 MET 57 0.63 $167,188.54 Modernize D'Abate ES Successful Program in Poor Building 412 428 6 MET 47 0.59 $771,588.28 Modernize Flynn ES Successful Program in Poor Building 501 598 6 MET 43 0.7 $395,233.27 Modernize Gr eene MS Successful Program in Poor Building 840 940 0 MET 46 0.62 $0.00 Modernize Gr egori an ES Successful Program in Poor Building 369 452 0 MET 40 0.64 $2,339,411.25 Modernize Hope Arts HS Poor Buil ding, Geographic Context 340 1386 0 IP 53 0.71 $1,886,039.37 Modernize Hope IT HS Poor Buil ding, Geographic Context 416 1386* 0IP 530.71* Modernize Hopkins MS Successful Program in Poor Building 424 587 0 MET 48 0.61 $0.00 Modernize King ES Successful Program in Poor Building 498 700 0 MET 48 0.65 $378,739.27 Modernize Laurel Hill ES Successful Program in Poor Building 378 468 4 MET 43 0.85 $499,708.00 Modernize Laurel Hill Annex ES Successful Program in Poor Building 210 260 4 45 0.88 $0.00 Modernize Lauro ES Successful Program in Poor Building 796 894 1 MET 44 0.66 $653,247.49 Modernize Mount Pleasant HS Poor Buil ding, Geographic Context 1157 1351 0 IP 53 0.81 $984,655.09 Modernize Pleasant View ES Poor Buil ding 439 566 1 IP 37 0.71 $1,022,063.54 Modernize Reservoir ES Successful Program in Poor Building 236 312 5 MET 27 0.78 $406,455.70 Modernize Webster ES Successful Program in Poor Building 310 388 4 MET 47 0.64 $170,963.82 Modernize West Broadway @ Bainbridge Street ES Open as part of Messer Campus 0570 3 32 0.85 $325,303.20 Modernize West ES ES Poor Buil ding 665 870 3 IP 40 0.7 $310,248.31 Modernize Hope Leadership HS Program Closed 403 1386* 0 IP * Program Closed West Broadway @ DelSesto ES Move program to Lauro as K-8 415 400 3 MET 68 0.05 $0.00 Relocate West Broadway to Lauro Feinstein @ Broad ES Successful Program, Poor EA 355 466 3 MET 43 0.5 $0.00 Renovate/Reconfi gure Fogarty ES Fair EA, Fair FCI 434 518 7 IP 48 0.6 $0.00 Renovate/Reconfigure Fortes Annex ES Fair EA, 157 194 1 57 0.02 $0.00 Renovate/Reconfigure Kennedy ES Fair EA, Fair FCI 521 532 2 IP 50 0.6 $303,210.62 Renovate/Reconfigure Kizir ian ES Poor EA, Fair FCI 544 636 0 IP 40 0.6 $0.00 Renovate/Reconfigure Lima Annex ES Fair EA 187 220 1 57 0.02 $0.00 Renovate/Reconfigure Messer ES Fair EA, Fair FCI 239 324 5 IP 48 0.59 $0.00 Renovate/Reconfigure Stuart MS Fair EA, Fair FCI 672 921 2 IP 52 0.59 $424,050.89 Renovate/Reconfi gure Veazie ES Successful Program, Fair EA, FCI 554 674 2 MET 52 0.44 $293,085.18 Renovate/Reconfigure Willi ams MS Successful Program, Fair EA, FCI 722 899 1 MET 47 0.59 $0.00 Renovate/Reconfigure Alvarez HS Recently Moderni zed 492 641 3 IP 62 0.08 $0.00 Routine / Preventative Maintenance Bailey ES Recently Moderni zed 354 440 7 MET 65 0.005 $0.00 Routine / Preventative Maintenance Bishop MS Recently Moderni zed 0816 0NA 75 0 $35,000,000.00 Routine / Preventative Maintenance Carnevale ES Recently Moderni zed 562 740 4 MET 72 0.02 $28,568.03 Routine / Preventative Maintenance Central HS HS Recently Moderni zed 1159 1445 2 IP 69 0.05 $38,000,000.00 Routine / Preventative Maintenance Cooley HS Recently Moderni zed 355 440 3 IP 63 0.07 $0.00 Routine / Preventative Maintenance Delsesto MS Recently Moderni zed 398 1108 1 MET 68 0.05 $398,582.05 Routine / Preventative Maintenance E-Cubed HS Recently Moderni zed 307 440 0 IP 62 0.04 $0.00 Routine / Preventative Maintenance Fortes ES Recently Moderni zed 348 494 7 IP 69 0.21 $0.00 Routine / Preventative Maintenance Lima ES Recently Moderni zed 248 312 7 MET 71 0.19 $0.00 Routine / Preventative Maintenance PAIS HS Recently Moderni zed 377 430 3 IP 63 0.07 $0.00 Routine / Preventative Maintenance PCTA/Hanley HS Recently Moderni zed 245 800 2 MET 74 0 $91,000,000.00 Routine / Preventative Maintenance Woods ES Recently Moderni zed 288 802 7 IP 62 0.27 $0.00 Routine / Preventative Maintenance Young ES Recently Moderni zed 310 802* 7 IP 62 0.27 $0.00 Routine / Preventative Maintenance

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Summary Table Sorted Alphabetically Table 16

School Name Level Conclusion Expenditure Implementation 2008-09 2008-09 Enrollment Capacity Geographic Context Met Phase AYP (2009-10) Educational Adequacy Facility Condition Index 9th Grade Academy HS Program Cl osed 0170 1 IP 44 $0.00 Close Building Alvarez HS Recently Modernized 492 641 3 IP 62 0.08 $0.00 Routine / Preventative Maintenance Bailey ES Recently Modernized 354 440 7 MET 65 0.005 $0.00 Routine / Preventative Maintenance Bishop MS Recently Modernized 0 816 0 NA 75 0 $35,000,000.00 Routine / Preventative Maintenance Bridgham MS Land Bank 614 724 2 IP 38 0.52 $322,075.95 Close Building Carnevale ES Recently Modernized 562 740 4 MET 72 0.02 $28,568.03 Routine / Preventative Maintenance Central HS HS Recently Modernized 1159 1445 2IP 690.05 $38,000,000.00 Routine / Preventative Maintenance Classical HS Successful Program in Poor Building 1003 1149 2 MET 57 0.63 $167,188.54 Modernize Cooley HS Recently Modernized 355 440 3 IP 63 0.07 $0.00 Routine / Preventative Maintenance D'Abate ES Successful Program in Poor Building 412 428 6 MET 47 0.59 $771,588.28 Modernize Delsesto MS Recently Modernized 398 1108 1MET 680.05 $398,582.05 Routine / Preventative Maintenance E-Cubed HS Recently Modernized 307 440 0 IP 62 0.04 $0.00 Routine / Preventative Maintenance Feinstein HS Poor Building 356 420 3 IP 61 0.68 $58,780.82 Close Building Feinstein @ Broad ES Successful Program, Poor EA 355 466 3 MET 43 0.5 $0.00 Renovate/Reconfi gure Feinstein @ Sackett ES Addition/reconfiguration 452 570 8 IP 34 0.52 $0.00 Close Building Flynn ES Successful Program in Poor Building 501 598 6 MET 43 0.7 $395,233.27 Modernize Fogarty ES Fair EA, Fair FCI 434 518 7 IP 48 0.6 $0.00 Renovate/Reconfigure Fortes ES Recently Modernized 348 494 7 IP 69 0.21 $0.00 Routine / Preventative Maintenance Fortes Annex ES Fair EA, 157 194 1 57 0.02 $0.00 Renovate/Reconfigure Gr eene MS Successful Program in Poor Building 840 940 0 MET 46 0.62 $0.00 Modernize Gr egori an ES Successful Program in Poor Building 369 452 0 MET 40 0.64 $2,339,411.25 Modernize Hope Arts HS Poor Building, Geographic Context 340 1386 0 IP 53 0.71 $1,886,039.37 Modernize Hope IT HS Poor Building, Geographic Context 416 1386* 0IP 530.71* Modernize Hope Leadership HS Program Cl osed 403 1386* 0 IP * Program Closed Hopkins MS Successful Program in Poor Building 424 587 0 MET 48 0.61 $0.00 Modernize Kennedy ES Fair EA, Fair FCI 521 532 2 IP 50 0.6 $303,210.62 Renovate/Reconfi gure King ES Successful Program in Poor Building 498 700 0MET 480.65 $378,739.27 Modernize Kizirian ES Poor EA, Fair FCI 544 636 0 IP 40 0.6 $0.00 Renovate/Reconfigure Laurel Hill ES Successful Program in Poor Building 378 468 4 MET 43 0.85 $499,708.00 Modernize Laurel Hill Annex ES Successful Program in Poor Building 210 260 4 45 0.88 $0.00 Modernize Lauro ES Successful Program in Poor Building 796 894 1 MET 44 0.66 $653,247.49 Modernize Lima ES Recently Modernized 248 312 7 MET 71 0.19 $0.00 Routine / Preventative Maintenance Lima Annex ES Fair EA 187 220 1 57 0.02 $0.00 Renovate/Reconfigure Messer ES Fair EA, Fair FCI 239 324 5 IP 48 0.59 $0.00 Renovate/Reconfigure Messer Annex ES Return to City Inventory 153 156 3 41 1.04 $0.00 Close Building Mount Pleasant HS Poor Building, Geographic Context 1157 1351 0 IP 53 0.81 $984,655.09 Modernize PAIS HS Recently Modernized 377 430 3 IP 63 0.07 $0.00 Routine / Preventative Maintenance PCTA/Hanley HS Recently Modernized 245 800 2 MET 74 0 $91,000,000.00 Routine / Preventative Maintenance Perry MS Need to reduce Middle Capacity 604 869 2 MET 47 0.72 $275,996.83 Close Building Pleasant View ES Poor Building 439 566 1 IP 37 0.71 $1,022,063.54 Modernize Reservoir ES Successful Program in Poor Building 236 312 5 MET 27 0.78 $406,455.70 Modernize Stuart MS Fair EA, Fair FCI 672 921 2 IP 52 0.59 $424,050.89 Renovate/Reconfigure Veazie ES Successful Program, Fair EA, FCI 554 674 2 MET 52 0.44 $293,085.18 Renovate/Reconfi gure Webster ES Successful Program in Poor Building 310 388 4 MET 47 0.64 $170,963.82 Modernize West Broadway @ Bainbridge Street ES Open as part of Messer Campus 0570 3 32 0.85 $325,303.20 Modernize West Broadway @ DelSesto ES Move program to Lauro as K-8 415 400 3 MET 68 0.05 $0.00 Relocate West Broadway to Lauro West ES ES Poor Building 665 870 3 IP 40 0.7 $310,248.31 Modernize Willi ams MS Successful Program, Fair EA, FCI 722 899 1 MET 47 0.59 $0.00 Renovate/Reconfigure Windmil l ES Geographic Context 376 480 1 IP 42 0.64 $164,601.97 Close Building Woods ES Recently Modernized 288 802 7 IP 62 0.27 $0.00 Routine / Preventative Maintenance Young ES Recently Modernized 310 802* 7 IP 62 0.27 $0.00 Routine / Preventative Maintenance

* Expenditure at Hope building applied to all programs within the building * Capacity at Hope covers all programs and is only counted once * Capacity at Woods covers both Woods and Young and is only counted once

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Definitions

Closure: A process that results in the decommissioning of a facility. Students and staff no longer occupy the building after a closure. The building is secured and routine surveillance is conducted to protect the assets.

Decommission: After a building is closed appropriate measures are taken to secure the building and grounds. Facility Resources are reassigned (i.e. desks, books, equipment). The facility is secured and expenditures are minimized.

K - 8 Conversion: A program that is expanded to include the grades from Kindergarten or Pre Kindergarten to Eighth Grade. The facilities implications can include the addition of science labs at the middle school level or toilets in classrooms at the kindergarten or prekindergarten level.

Land Bank: To keep in the inventory for future use.

Modernization: To replace systems, finishes, furniture and equipment, as well as updating for ADA and other code, bringing the building up to modern standards.

Reconfiguration / Systems Renovation: To change the floor plan to better accommodate the educational program and/or make changes to major system components such as roofs, windows, or HVAC. This is considered a level below Modernization.

Routine / Preventative Maintenance: To replace filters and parts as appropriate; adjust equipment, clean, etc.

-39- Final Recommendation

Appendix I School Profiles Appendix II Facilities Condition Index Chart Appendix III Educational Adequacy Chart Appendix IV Capacity Worksheets Appendix V ERate projects for 2009-2010 and ERate projects for 2010-2011

-40- Final Recommendation

Appendix V: eRate Internal Connections (Eligible Technology Network Infrastructure Projects). Erate Year 12 (2009-2010) internal connections, non-reoccurring services including the installation of Data Cabling, Wireless Access Points, VOIP Telephone system and Network Equipment including replacement of Network Switches at the following locations:

Providence CTE High School (Eligible) @86% $410,960.18 o Ineligible Server Component (In-eligible) IP Phones and Redundant Supervisor $36,751.00 Cisco Operations Manager $19,845.11 Cisco Unified Provision Manager $20,994.04 Cisco Emergency Responder $16,192.03 o Other Eligible Components: SmartUPS 10000 $7,592.91 Voicemail Equipment $13,415.21 Total Eligible $431,968.30

Nathan Bishop Memorial Middle School (Eligible) @86% $163,689.14 o Ineligible Server Component (In-eligible) $424.68 o Ineligible VOIP Components (IP Phones) $24,628.81 o Other Eligible Components: Switches for CCTV $9,506.96 Total Eligible Components $173,196.10

Springfield Middle School (Eligible) @90% $132,715.75 o Ineligible Server Component (In-eligible) $424.68

William D’Abate Elementary School (Eligible) @90% $76,255.82 o Ineligible Server Component (In-eligible) $424.68

Windmill Elementary School (Eligible) @90% $74,381.81 o Ineligible Server Component (In-eligible) $424.68

Webster Ave. Elementary School (Eligible) @90% $70,180.19 o Ineligible Server Component (In-eligible) $424.68

Robert Bailey IV Elementary School (Eligible) @90% $84,693.78 o Ineligible Server Component (In-eligible) $424.68

Lillian Feinstein Elementary School (Eligible) @90% $85,234.02 o Ineligible Server Component (In-eligible) $424.68

O.H. Perry Middle School (Eligible) @90% $148,770.38 o Ineligible Server Component (In-eligible) $424.68

Alan Shawn Feinstein Elementary School (Eligible) @90% $88,670.09 o Ineligible Server Component (In-eligible) $424.68

-Appendix V-1 - Final Recommendation

Feinstein High School (Eligible) @90% $85,844.04 o Ineligible Server Component (In-eligible) $424.68

Roberti Administration Building (Eligible) @90% $112,799.79 o Ineligible Server Component (In-eligible) $491.91

Total Project Cost Eligible-Ineligible $1,836,629.14 Total Eligible Award for Application $1,713,480.45 (Excluding CTE HS for Comparison $1,281,512.15) Eligible Local Share $ 171,348.05 Total In-Eligible Share $124,066.29 PPSD Local Share not to exceed $295,414.34 Internal Connections (Eligible Technology Network Infrastructure Projects). Erate Year 13 (2010-2011) internal connections, non-reoccurring services including the installation of Data Cabling, Wireless Access Points, and Gigabit Network Equipment including replacement of Network Switches at the following locations:

Mt Pleasant High School (Eligible) @90% $232,168.96 o Ineligible Server Component (In-eligible) $4,624.86

B. Jae Clanton Building Complex:

Charlotte Woods Elementary (Eligible) @90% $62,629.42 o Ineligible Server Component (In-eligible) $431.01

Registration Center (Eligible) @90% $16,552.77 o Ineligible Server Component (In-eligible) $431.01

Sgt. Cornel Young Jr, Elementary School (Eligible) @90% $56,493.27 o Ineligible Server Component (In-eligible) $431.01

Classical High School (Eligible) @ 80% $236,684.40 o Ineligible Server Component (In-eligible) $4,624.86

M.L. King Elementary School (Eligible) @80% $104, 5467.01 o Ineligible Server Component (In-eligible) $431.01

R.F. Kennedy Elementary School (Eligible) @80% $97,201.14 o Ineligible Server Component (In-eligible) $431.01

Vartan Gregorian Elementary School (Eligible) $107,592.41 o Ineligible Server Component (In-eligible) $431.01

Total Project Cost Eligible-Ineligible $925,725.16 (All projects contingent upon Funding from SLD) Total Eligible Award for Application $913,889.38 Eligible Local Share @ 90% $36,784.44 Eligible Local Share @ 80% $109,208.99 Total In-Eligible Share $11,835.78 PPSD Local Share not to exceed $157,829.21

-Appendix V-2 - Final Recommendation

City of Providence Pavement Management Analysis

Presented by: Vanasse Hangen Brustlin, Inc. April 27, 2012

Presentation Overview

 Pavement Management Background C t fPoiec Pave Providence - ity of  Process  Current Conditions  Budget Analysis  Project Selection m  Next Steps ent Management

1 Pavement Management Background

What is Pavement Management? C t fPoiec Pave Providence - ity of

 The practice of planning for pavement maintenance and rehabilitation with the goal of maximizing the value and life of a pavement network. m ent Management Otherwise known as “Getting the Biggest Bang for Your Buck”

Pavement Management Background

Pavement Deterioration Curve C t fPoiec Pave Providence - ity of m Will cost $20.00 ent Management to $30.00 Here

2 Pavement Management Process

The Process C t fPoiec Pave Providence - ity of  Develop Pavement Management Database  Pavement distress identification and quantification (Visual Inspection Only) • Performed in 1997, 2006, 2012 (partial)  Refine Pavement Deterioration Curves

 Pavement Condition Index (PCI) calculation on a 0 ‐ 100 scale m ent Management  Define Treatment Options and Costs  Develop list of candidate projects  Apply engineering and local judgment to define annual road program

Current Conditions

Average Roadway Pavement Condition Index = 6767 C t fPoiec Pave Providence - ity of 100 Do Nothing 90 Routine Maintenance 80 Preventive Maintenance 70 m (PCI) Condition Index Condition Index 67 ent Management 60 Structural Improvement

Pavement Pavement Base Rehabilitation 40 Years

3 Current Conditions

Distribution of Conditions* C t fPoiec Pave Providence - ity of

60 51.0 51.3 45.5 50 42.6 41.0 38.0 37.8 40

25.8 30

Miles 12.3 m m

20 14. 9 16.4 12. 5 ent Management 10.7 10

Pavement Condition Index

Current Conditions

Current Roadway Pavement Backlog Summary C Backlog in Miles Pave Providence - ity of ~400 City Maintained Miles Do Nothing Backlog in Dollars 22.81 Routine Base ~$140 Million Maintenance Rehabilitation 49.59 89.66

Preventative Routine Maintenance Maintenance Base $15,421,000 $2,073,000 Rehabilitation $48,209,000 m m ent Management

Preventative Maintenance Structural 88.27 Improvement 150.05 Structural Improvement $73,881,000

4 Budget Analysis

Budget Analysis C t fPoiec Pave Providence - ity of  $8 Million per year‐ MitiMaintains PCI

 $10 Million per year‐ Will increase Average PCI to 74 in 10 years

 $13 Million per year‐ Will increase Average PCI to 75 in 5 years. m ent Management

Budget Analysis

Projected Pavement Condition 85 C t fPoiec Pave Providence - ity of

70 m

vement Condition Condition Index vement 65 a ent Management P

60 $8M/Year $10M/Year $13M/Year

55 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

5 Budget Analysis

Projected Backlog of Work C

$200.0 Pave Providence - ity of s

Million $180.0

$160.0

$140.0

$120.0 m Backlog Of Work ent Management $100.0

$8M/Year $10M/Year $13M/Year $80.0

$60.0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Project Selection

 System uses Cost/Benefit Calculation to Prioritize Projects C t fPoiec Pave Providence - ity of  Factors Increasing Benefit

 Traffic Volume

 Lower Cost

 Worse Condition (Lower PCI)

 How Long the Repair Type is expected to last m ent Management  Key Concepts

 Repair roads before they fall into a more expensive “treatment band”

 Fix the Roads used by the most people.

6 Next Steps

 Determine Funding Level C t fPoiec Pave Providence - ity of

 Utilize GIS to Coordinate Projects Geographically

 Reduce Mobilization cost for contractors

 “Neighborhood” Planning

 Coordinate with Utility Companies m ent Management

 Perform Project Level Evaluations and Testing to determine actual repair for each candidate street.

Questions & Answers

VHB Pavement Engineering Services

Gordon Daring, PE and Lance Baden

PROVIDENCE STREETCAR TAX INCREMENT FINANCING PROJECT PLAN

Department of Planning + Development March 2014

PROVIDENCE STREETCAR

TABLE OF CONTENTS

1 INTRODUCTION ...... 3 2 PROJECT AREA BOUNDARY ...... 3 3 TAX INCREMENT AREA BOUNDARY ...... 5 4 PROJECT DESCRIPTION ...... 7 4.1 PROJECT BACKGROUND...... 7 4.2 PHASE 1: STREETCAR FROM COLLEGE HILL TO RIH CIRCLE...... 8 4.3 PHASE 2: STREETCAR EXTENSION TO PRAIRIE AVENUE AND TO PROVIDENCE STATION ...... 8 4.4 PROJECT BENEFITS ...... 8 5 PROJECT COSTS ...... 10 5.1 ESTIMATED CAPITAL COSTS FOR INITIAL OPERATING SEGMENT ...... 10 5.2 CAPITAL FUNDING SOURCES FOR INITIAL OPERATING SEGMENT ...... 10 5.3 ESTIMATED ANNUAL COSTS FOR INITIAL OPERATING SEGMENT ...... 12 5.4 PROJECT FINANCE PLAN: ANNUAL REVENUE SOURCES TO SUPPORT OPERATIONS + DEBT SERVICE ...... 12 6 FINANCE STRUCTURE ...... 13 6.1 TIF CREATION + BASE VALUE IN DISTRICT ...... 13 6.2 METHODOLOGY USED TO MAKE TIF REVENUE PROJECTIONS ...... 14 6.3 PROJECTED INDUCED DEVELOPMENT DUE TO STREETCAR ...... 15 6.4 CALCULATION OF TAX INCREMENT TO BE GENERATED ...... 15 6.5 PROJECT DEBT + PERCENTAGE OF TAX INCREMENT DIRECTED TOWARD PROJECT ...... 16 7 DESIGNATION OF OFFICER TO CALCULATE TAX INCREMENT ...... 16 8 APPENDIX A- PROJECT PRO-FORMA ...... 17 9 APPENDIX B - STREETCAR TAX INCREMENT AREA - ESTIMATE OF INCREMENTAL TAX REVENUE TO BE GENERATED ...... 18

For reference: Providence Core Connector Study - Streetcar Economic Impact Analysis Report (2012). Providence Core Connector Study - Capital Cost Report (2012).

1 PROVIDENCE STREETCAR TAX INCREMENT FINANCING PROJECT PLAN PROVIDENCE STREETCAR

LIST OF FIGURES

Figure 1: Providence Streetcar Route Figure 2: Providence Streetcar Tax Increment Area Figure 3: State of RI benefits Figure 4: Development Projection Methodology Used to Estimate Future TIF Revenues Figure 5: Tax Increment Directed to Project

LIST OF TABLES

Table 1: Estimated Jobs and Residents Generated by Additional Development Due to Streetcar Table 2: Conceptual Cost Estimate for Initial Streetcar Segment: College Hill to RI Hospital Table 3: Capital Funding Sources for Providence Streetcar Table 4: Base Property Value in Tax Increment Area

2 PROVIDENCE STREETCAR TAX INCREMENT FINANCING PROJECT PLAN PROVIDENCE STREETCAR

1 INTRODUCTION

The City of Providence is planning a 2.5-mile streetcar route to catalyze economic growth and jobs, connect major activity centers and enhance mobility and the interconnectivity of multi-modal transit in the Capital City.

Building the Providence Streetcar is one of Mayor Taveras’s key initiatives outlined in his Economic Development Action Plan. Transit investments, and particularly the permanency of fixed-rail investments, such as streetcars, have proven to be effective tools in catalyzing economic growth in other US cities. Targeted growth and development in Providence’s downtown and along the entire streetcar route will have a direct impact on job generation, local property values and add increased sales and income tax revenue.

The finance plan for implementation of the Providence Streetcar includes the establishment of a Tax Increment Finance (TIF) District to support a bond issue for construction and provide a revenue stream for ongoing debt service payments. The dedication of a portion of local TIF revenues to the project allows the City to leverage federal funding and other outside funding sources for the project.

2 PROJECT AREA BOUNDARY

The Providence Streetcar route is from the top of the bus tunnel on Thayer Street to the intersection of Prairie Avenue and Dudley Street (see Figure 1). The Project Area is defined to incorporate a roughly ¼ mile area on either side of the route, and around the streetcar terminal stations. This area incorporates all residential and commercial activity that falls within walking distance of the streetcar route and is where the greatest increase in local area property value impacts are anticipated to occur.

The Project Area Boundary is established as follows:

Starting at the intersection of Smith Street and Park Street, thence continuing southeasterly along the centerline of Smith Street to the center point of Canal Street, thence continuing northeasterly along the centerline of Smith Street to the center point of North Main Street. thence continuing southeasterly along the center line of North Main St to the center point of Church St, thence continuing northeasterly along the center line of Church St to center point of Benefit St. The boundary continues southeasterly along the center line of Benefit St and thence turning easterly and continuing along the northern boundary of Assessor’s Plat 100 Lot 683 and continuing to the westerly boundary of Assessor’s Plat 100 Lot 709, thence running easterly along the northern boundaries of Assessor’s Plat 100 Lots 709 and 691 to the center point of Congdon Street, thence continuing northerly along the centerline of Congdon Street to the center point of Lloyd Lane, thence continuing easterly along the center line of Lloyd Lane to the center point of Prospect Street, thence continuing northwesterly along the center line of Prospect Street to the center point of Lloyd Ave, thence continuing easterly along the center line of Lloyd Ave to the center point of Hope Street. The boundary continues southeasterly along the center line of Hope Street and thence turning easterly and continuing along the northern boundary of Assessor’s Plat 110 Lots 110, 8, 11, 20, 33 and 18 and continuing to the centerline of Diman Place, thence continuing southeasterly along the centerline of Diman Place to the center point of Angell Street, thence continuing northeasterly along the center line of Angell Street to the center point of Cooke Street, thence continuing southerly along the center line of Cooke Street to the center point of Young Orchard Ave, thence continue along the center line of Young Orchard Ave to center point of Hope Street, thence continuing southerly along the center line of Hope Street to the center point of Charlesfield Street, thence continuing southwesterly along the Charlesfield Street to the center point of Benefit Street, thence continuing southeasterly along the center line of Benefit Street to center point of Planet Street, thence continuing southwesterly along the center line of Planet Street to the center point of South Water Street, thence continuing northwesterly along the center line of South Water Street to the center point of Crawford Street, thence continuing southwesterly along the center line of Crawford Street thence turning southeasterly to the ordinary high water mark of the Providence River; thence running southeasterly along said River Line; thence continuing to the northern boundary of Plat 22 Lot 358, and thence running southeasterly along the

3 PROVIDENCE STREETCAR TAX INCREMENT FINANCING PROJECT PLAN PROVIDENCE STREETCAR eastern boundaries of Plat 22 Lot 358, Plat 46 Lots 160, 481 and 501 to the southeastern corner of Plat 46 Lot 501, and thence turning and running along the southern border of Plat 46 Lots 501 and 489 to the southwestern corner of Plat 46 Lot 489, and then continuing southwesterly to the center point of Allens Avenue, thence continuing southerly along Allens Avenue to the center point of Public Street, thence continuing southwesterly along the center line of Public Street to the center point of Broad Street. The boundary continues northwesterly along the center line of Broad Street to the center point of Pine Street, thence continues northeasterly along the center line of Pine Street to center point of I-95; thence continuing northerly along the center line of the I-95 right of way to the point and place of beginning on Smith Street.

Figure 1: Providence Streetcar Route

4 PROVIDENCE STREETCAR TAX INCREMENT FINANCING PROJECT PLAN PROVIDENCE STREETCAR

3 TAX INCREMENT AREA BOUNDARY

The Tax Increment Area shown in Figure 2 consists of approximately 980 acres of land within the neighborhoods of College Hill, Downcity, the Jewelry District and Upper South Providence. The boundaries were identified roughly as encompassing all parcels that fall within ¼ mile of the Providence Streetcar route and its terminal, as those are the areas that will be impacted the most by the installation of the streetcar route.

The Tax Increment Area is established as follows;

5 PROVIDENCE STREETCAR TAX INCREMENT FINANCING PROJECT PLAN PROVIDENCE STREETCAR

Figure 2: Providence Streetcar Tax Increment Area

6 PROVIDENCE STREETCAR TAX INCREMENT FINANCING PROJECT PLAN PROVIDENCE STREETCAR

4 PROJECT DESCRIPTION

4.1 PROJECT BACKGROUND

The City of Providence created the Transit 2020 Working Group in 2007 to advance the idea that a multi-modal transportation system is a key part of City’s vision for economic growth and environmental sustainability. The working group was comprised of business, academic, and community leaders to identify and advance potential new transit investments in Providence and the greater metro area. RIPTA and the City of Providence built on this initiative to complete the Metropolitan Providence Transit Enhancement Study in 2009 which detailed ten specific strategies for improving transit within the metropolitan area. One of the key recommendations in the study was to “Build a Providence Streetcar.” From 2010 to 2012, RIPTA and the City undertook the comprehensive Providence Core Connector Study to evaluate this proposal in detail.

The study confirmed the feasibility of building a streetcar segment in downtown Providence. Streetcars have been successfully employed in several other small and mid-sized cities in the U.S., and serve to complement pedestrian activities in compact, mixed-use urban areas and to catalyze growth and development.

The Providence Streetcar will help the city and state grow, thrive and connect.

GROW – Support local and regional economic development

Providence is in need of increased economic activity. With an unemployment rate of over 10%, the City aims to increase downtown development densities, encourage new investment and attract and grow jobs. Transit investments have proven economic development benefits. A national study found that for every $1 invested in public transportation, $4 is generated in economic returns. On a larger scale, every $10 million in capital investment can return up to $30 million in business sales alone. Increased investment in transit will catalyze redevelopment in the city.

THRIVE – Strengthen neighborhoods through sustainable investment in transit

The benefits of a strong transit system are well recognized. Transit helps protect our environment by providing an alternative to auto use, diverting cars from our city streets and reducing greenhouse gas emissions. It provides an alternative to auto ownership while preserving mobility options and reducing household expenses. Neighborhoods with transit promote walking and overall public health.

Transit encourages people-focused development and helps create lively neighborhoods with a strong sense of place. Providence Tomorrow, the City’s Comprehensive Plan, calls for a livable city “with healthy, vibrant, walkable neighborhoods connected to an active downtown, with many transit options.” In the past, the strong fabric of downtown was punctured by highway construction, building demolitions, and the construction of surface parking lots. Looking forward, the city must use transit as a prime catalyst to recapture the unique historic character and sense of place that defines Providence.

Providence is the “Creative Capital” and the hub for arts and cultural activities in Rhode Island. The city’s cultural plan “Creative Providence” calls out the need to improve access to cultural sites, events and programs as a specific strategy to build community and foster neighborhood vitality.

CONNECT - Provide more transportation choice and build regional connections

Providence’s urban core is a central hub for local, regional, and intercity transit services, but it lacks a seamless connection between transportation hubs and downtown activity centers beyond walking range. Kennedy Plaza is the busiest ground

7 PROVIDENCE STREETCAR TAX INCREMENT FINANCING PROJECT PLAN PROVIDENCE STREETCAR

transportation hub in the State with more than 45,000 daily passengers and more than 2,700 bus trips connecting riders from around the state to downtown Providence. These passengers need a seamless connection to places of employment, education, activities and other key destinations in the downtown. Providence Station with MBTA and Amtrak rail service serves over 4,000 passengers every day. Commuter rail services between Wickford, T.F. Green Airport, and Providence will serve nearly 2,000 additional passengers by 2020 and bring more than 250 daily passengers from the airport into Providence each day. However, Providence Station is just outside the heart of downtown, without easy access to the Convention Center, hospital district or colleges and universities. A fixed-rail urban circulator like the Providence Streetcar completes the trip for many of these riders, and makes transit an attractive option. The new Rapid Bus line on Broad and North Main Streets will carry over 10,000 riders a day, enhancing access to downtown from Cranston and Pawtucket. Uniquely branded vehicles, stop amenities, roadway improvements, and more frequent service will improve the speed and attractiveness of bus service. Connecting to a downtown streetcar circulator would further enhance mobility for urban residents along this eight mile urban corridor.

4.2 PHASE 1: STREETCAR FROM COLLEGE HILL TO RIH CIRCLE

The initial segment for the Providence Streetcar is a 2 mile segment from College Hill to the RI Hospital area on Eddy Street. The project would include construction of track, power systems and stations, along with supporting roadway, intersection and utility work. There will be twelve transit stations constructed along the route.

Four streetcar vehicles would be procured and a vehicle maintenance facility would be constructed at the intersection of Eddy Street and Allens Avenue. This parcel, located directly under the I-95/I-95 interchange, is owned by the RI Department of Transportation (RIDOT) and temporarily leased to Landmark for RI Hospital employee parking. Preliminary discussions with RIDOT indicate their willingness to donate this 2 acre parcel to the City for a streetcar maintenance facility.

There is no other land acquisition required for the initial project segment. It is possible that some minor modifications to City owned sidewalks and right-of-way would be required at some intersections, and that additional land donations from RIDOT or other easements might be required to facilitate streetcar operations at the terminal locations. There is no condemnation or eminent domain contemplated or authorized under this plan. In addition, no persons or organizations are anticipated to be displaced or relocated as a result of carrying out the project.

Any funds from the tax increment or from financing supported by the tax increment are limited to use for costs associated with the construction and operations of the streetcar, project area infrastructure improvements and future project phases.

4.3 PHASE 2: STREETCAR EXTENSION TO PRAIRIE AVENUE AND TO PROVIDENCE STATION

The second phase of the Providence Streetcar would be the construction of a roughly 0.5 mile segment from the RI Hospital circle area on Eddy Street to Prairie Avenue, via Dudley Street and a 0.25 mile segment between Kennedy Plaza and the Providence Train Station. These extension lines would include track and power investments, two additional station locations, the purchase of an additional streetcar vehicle, and land acquisition for the terminal location.

4.4 PROJECT BENEFITS

The Providence urban core—a two-mile corridor through downtown and adjacent neighborhoods—is home to the greatest concentration of transportation, employment, medical, educational, and cultural facilities in Rhode Island. This area hosts a mass of activity: its economic health and vitality help drive the state’s economic engine. As such, an integrated transit system in the urban core will improve mobility, economic development and community livability from both the local and regional perspectives, serving the people who live, work, and visit here. A comprehensive, integrated transit system is also key to providing affordable access to jobs, educational opportunities and services for those who need them most.

8 PROVIDENCE STREETCAR TAX INCREMENT FINANCING PROJECT PLAN PROVIDENCE STREETCAR

Job Creation The Core Connector Study, completed in 2012 by the City and RIPTA, performed a detailed economic impact analysis (see attached Streetcar Economic Impact Analysis Report) to estimate the levels of economic activity to be induced by a future streetcar. The analysis found that a Providence Streetcar is expected to contribute more than 5,700 new jobs and nearly 1,900 new residents within the study area over a 20 year period. Most of new residents are anticipated to locate in the Jewelry District and Downcity, with more than 1,300 new residents distributed between these two areas. The largest share of employment is expected to be in office jobs located in the Jewelry District, followed by office jobs in Downcity.

This job growth will enhance employment opportunities, as well as provide greater means to offer job training, apprenticeship programs, and to support other workforce development initiatives.

Table 2: Estimated Jobs and Residents Generated by Additional Development Due to Streetcar

NEW JOBS DUE TO STREETCAR (BY TYPE)

TOTAL NEW TOTAL NEW RETAIL OFFICE INSTITUTIONAL JOBS RESIDENTS College Hill 18 26 17 61 7 Capital Center 19 246 0 264 143 Downcity 106 1,305 41 1,452 414 Jewelry District 255 2,063 370 2,688 902 Hospital District 116 635 464 1,215 109 Prairie Ave. Area 15 46 8 70 315 TOTAL 529 4,322 900 5,750 1,890

Tax Benefits for the State of Rhode Island

The State of Rhode Island will realize benefits from enhanced regional connectivity to RI’s primary business, medical and educational hubs. Based on development and job projections (see Streetcar Economic Impact Analysis Report), the area surrounding a new streetcar route would be anticipated to see an additional 3.6 million square feet of new development over 20 years, with a total value of about $1.1 billion, and nearly 6,000 new jobs.

Figure 3: State of RI benefits The State of RI would realize additional tax revenues due to

$7 the increased rate of development and new jobs. As shown in Est. Income Tax Increment Figure 3, these tax revenues are projected to $4 million about $6 10 years after project implementation. Est. Sales Tax Increment Millions $5

After 20 years, anticipated benefits that would accrue to the $4 State include: $3

• An estimated $4.0 M in new sales tax revenues $2 (assuming $200 in annual sales per square foot of new retail development, taxed at 7%). $1 • An estimated $3.5 M in additional annual income tax $0 revenues (assuming 40% of the new jobs are new to Year 1 Year 5 Year 10 Year 15 Year 20 the state, pay an average salary of $40,000, and are taxed at marginal rate of 3.75%).

9 PROVIDENCE STREETCAR TAX INCREMENT FINANCING PROJECT PLAN PROVIDENCE STREETCAR

5 PROJECT COSTS

5.1 ESTIMATED CAPITAL COSTS FOR INITIAL OPERATING SEGMENT

The Providence Department of Planning & Development, partnering with RIPTA, has developed a conceptual design and corresponding capital and operating cost estimates for the Providence Streetcar project. These costs fall into one of three categories: 1) one-time capital costs required to design and construct the project; 2) recurring debt service payments to cover the cost of debt issued to construct the project; and 3) annual operating costs to support transit vehicle operations, maintenance and administration.

The initial operating segment of the Providence Streetcar would operate between College Hill and Rhode Island Hospital in Upper South Providence. The cost of this initial segment would be an estimated $117.8 million, as adjusted to reflect 2018 dollar value.

Capital cost components include design/engineering, vehicle acquisition, utility relocation, construction and contingencies. This first phase of the project would also construct a vehicle maintenance facility with the capacity to support future phases of the project. A summary of estimated capital costs is shown in Table 2 using the Federal Transit Administration’s (FTA’s) Standard Cost Categories. Contingencies, varying from 10-50% of each item, are allocated to each line item; there is an additional unallocated 10% contingency on total project costs. More detail can be found in the attached Providence Core Connector Capital Cost Report (2012). As the project advances to final stages of engineering, theses cost estimates will continue to be refined.

5.2 CAPITAL FUNDING SOURCES FOR INITIAL OPERATING SEGMENT

The City of Providence aims to maximize upfront capital contributions in order to minimize the need for project bonding. Competitive federal grants are currently being pursued through USDOT, and additional support through federal funds has been pledged by RIPTA and RIDOT (through a promised land donation). State funding is also being pursued. A list of all capital funding sources is shown in Table 3, with an explanation of each source and commitment described below.

Table 2: Conceptual Cost Estimate for Initial Streetcar Segment: College Hill to RI Hospital COST CATEGORIES DESCRIPTION TOTAL Track installed at-grade in mixed traffic and in reserved right-of-way on the Guideway and Track $21,705,304 Washington Street bridge 11 stations (typically including platforms on both sides of the street) along the Stations, $895,515 alignment typically placed every 800 feet A Vehicle Maintenance Facility is needed to provide vehicle storage and Support Facilities maintenance services, including inspection, exterior washing, interior $3,021,235 cleaning, repair activities, and spare parts storage Modifying the existing cross-sections in some locations along the alignment to Sitework & Special accommodate the streetcar and pedestrian traffic. Also includes in-street $9,744,122 Conditions utility conflict mitigation. Includes new and modified traffic signals, five traction power substations, and Power Systems $17,711,216 the overhead catenary power distribution system Total construction items $53,077,392 ROW, Land, Existing Property needed for maintenance facility and to accommodate streetcar $1,142,535 Improvements turning radius in several locations. Total (includes allocated contingencies) $54,219,927

10 PROVIDENCE STREETCAR TAX INCREMENT FINANCING PROJECT PLAN PROVIDENCE STREETCAR

COST CATEGORIES DESCRIPTION TOTAL Vehicles Three active streetcar vehicles and one spare streetcar vehicle $20,640,000 Preliminary engineering, final design, project management, construction Professional Services management, insurance, permitting and fees, and survey (27% of $14,330,896 construction elements) Unallocated Contingency Standard unallocated contingency (10%) $8,919,082 Finance Charges Finance charges related to bond issues $3,500,000 Total Base Cost for Project (2011 dollars) $101,609,906 Total Cost for Project (escalated to 2016 dollars) $117,793,729

Table 3: Capital Funding Sources for Providence Streetcar ESTIMATED CAPITAL FUNDING SOURCE FUNDING AMOUNT USDOT Competitive Grant $29.0 M City of Providence TIF Revenue Bond $57.7 M RICC Bond $10.0 M State of RI Capital Plan (RICAP) funds $15.0 M RIPTA CMAQ funds $5.3 M RIDOT land transfer $0.8 M TOTAL $117.8 M

Capital Funding Sources

• USDOT Competitive Grant: The City is pursuing a competitive federal grant funding under USDOT’s TIGER program (Transportation Investment Generating Economic Recovery). As an alternative, RIPTA and the City would pursue federal dollars through the Federal Transit Administrations (FTA’s) Small Starts program, or other future federal funding programs. • City of Providence TIF Revenue Bond: A revenue bond to support project construction would be issued by the City and supported through revenues from the Tax Increment Area. A $57.73 M bond would be issued in 2017, with a 30 - year term at a projected 3.5% interest rate. Anticipated debt service payments would be $3.2 million annually, over the 30-year term. • RI Convention Center Authority: In recognition of the benefits a Providence Streetcar would bring in terms of increased activity at the Convention Center, the Authority has indicated a willingness to provide $10M in support for early project development in 2015 and 2016. This support could be provided through a bond issue. • State of Rhode Island: The State is poised to benefit from the City’s investment in a Providence Streetcar through increased receipts from personal income, sales, meals, and hotel occupancy taxes. In recognition of these benefits, the State would support construction through the RI Capital Fund (RICAP), the issuance of general obligation bonds backed by these receipts, or other sources. • RI Public Transit Authority CMAQ: Rhode Island receives federal Congestion Mitigation and Air Quality (CMAQ) funds each year on a formula basis for air quality and congestion improvements, including transit projects. RIPTA is programmed to receive about $3.8 million annually through this program, and has indicated support for devoting a portion of these funds towards capital costs for the Providence Streetcar over a three-year period. Additional RIPTA CMAQ funds would also be used as a short-term, 3-year operating subsidy, as described further below. • RI Department of Transportation Land Donation: RIDOT owns a parcel of land on Eddy Street, remaining from the I-195 construction project and appraised at over $800,000. Discussions with RIDOT indicate their willingness to donate this land for the Streetcar Vehicle Maintenance Facility.

11 PROVIDENCE STREETCAR TAX INCREMENT FINANCING PROJECT PLAN PROVIDENCE STREETCAR

5.3 ESTIMATED ANNUAL COSTS FOR INITIAL OPERATING SEGMENT

Annual streetcar operating costs are largely based on the size of the system, and the hours and frequency of service. This initial segment of the Providence Streetcar would be operated using three vehicles during peak periods, with a fourth vehicle purchased as a spare. Annual operating costs were developed using an average total cost per hour based on actual operations from other US cities with active streetcar networks. This cost includes transit vehicle operations, maintenance and administration.

Annual operating costs for the initial segment between College Hill and the RI Hospital Circle would be $3.2 million in 2019, the first full year of operations. These costs would be anticipated to increase over time with the rate of inflation.

5.4 PROJECT FINANCE PLAN: ANNUAL REVENUE SOURCES TO SUPPORT OPERATIONS + DEBT SERVICE

In the first full year of streetcar operations (2019), the total cost to support the Providence Streetcar is estimated to be $6.4 million (transit operations + debt service). A long term sustainable revenue stream has been identified to support ongoing operations over time, as presented in Appendix B, a project pro-forma to support an initial streetcar segment between College Hill and RI Hospital Circle. Revenue sources to support annual ongoing costs include: (See Appendix A – Project Pro-Forma)

• A Tax Increment Finance (TIF) Revenues: The Tax Increment Area established herein, would serve as a primary source to fund debt service and annual ongoing operations costs for the project.

• System Revenues: The operator of the system whether the City, RIPTA or another entity would realize system revenues from passenger fares, advertising, station sponsorships and federal support for preventative vehicle maintenance. These revenues would be approximately $1.8 million in 2019, and would increase over time with ridership increases and the cost of inflation.

• A Special Assessment District: The City is proposing to establish a Special Assessment District for tax-exempt medical and private educational institutions along the route. Assessments would be based on property value and the distance to the streetcar route. Assumed assessment rates are: o Properties within 1/8 of a mile of the route assessed at $0.60 per $1,000 of value o Properties within ¼ mile of the route assessed at $0.30 per $1,000 of value

This district would generate approximately $1.1 million in 2019, with annual revenues increasing as overall property values in the district increase.

The three funding sources above: TIF revenues, System Revenues and Special Assessment District revenues, are anticipated to be sufficient to support streetcar operations and pay debt service within about 7 or 8 years after project design and engineering begins, or sometime after the 3rd year of operations. Supplemental revenues have been identified to help support project costs over the near term, as induced development takes place, tax stabilization agreements expire, and TIF district revenues increase. These supplemental revenues include:

• Local revenues: The City would provide additional revenue support during the first years of project development and operation. It is assumed that a total of $300,000 in local parking revenues would be directed toward the project over a six-year period, for a total of about $1.8 million. Future parking revenues are anticipated to grow over time due to greater utilization, new technologies, increased enforcement and rate inflation. • RIPTA CMAQ Operating Subsidy: A three-year CMAQ operating subsidy of $550,000 per year, dedicated by RIPTA, would be used to support initial streetcar operations. This is in addition to the capital CMAQ contributions made in earlier years to support project construction. No existing RIPTA operating funds would be dedicated towards streetcar operations.

12 PROVIDENCE STREETCAR TAX INCREMENT FINANCING PROJECT PLAN PROVIDENCE STREETCAR

6 FINANCE STRUCTURE

Construction and operation of a streetcar and other public investments in the Tax Increment Area are anticipated to have a significant positive effect on the pace and scope of economic development in the Project Area. The Core Connector Study completed in 2012 performed a detailed economic impact analysis (Streetcar Economic Impacts Analysis Report) to provide a projection of the scale of development to be reasonably expected once streetcar construction begins.

Based on the amount of land and underutilized floor area space currently available in the District, and actual development results from other U.S. cities with recently constructed streetcars, a Providence Streetcar running from College Hill to Prairie Avenue is anticipated to induce an additional 3.6 million square feet of development over a 20 year period. The initial starter segment is anticipated to induce 3.4 million square feet of development.

The City of Providence will realize significant increments in property tax revenues from this new development, as well as increased property value premiums from existing properties along the route. The Tax Increment Area is proposed to capture a portion of this increase in value to finance streetcar construction, operations and other improvements within the Project Area.

6.1 TIF CREATION + BASE VALUE IN DISTRICT

Other U.S. cities have seen significant development activity and property value premiums occur in the early stages of streetcar construction, and even during project development, before construction begins. The boundaries of the Tax Increment Area, shown in Figure 2, and encompass roughly ¼ mile on either side of the full streetcar route from Thayer Street to Prairie Avenue.

The project pro-forma assumes the establishment of the Project Area and Tax Increment Area in 2014, allowing TIF revenue to be captured and available to the project beginning in 2015. Development projections and base property values were evaluated using 2009 assessed values. As shown in Table 4, the Base Value of taxable property in the Tax Increment Area is $2.05 billion.

A City of Providence Tax Assessor, upon establishment of the District, will reevaluate the base value of the Tax Increment Area per the base date in accordance with RIGL 45-33.2-3.

Table 4: Base Property Value in Tax Increment Area TOTAL

Residential $500,469,133 Commercial $1,552,620,918 Subtotal Taxable Property $2,053,090,051 Institutional $1,978,118,015 Total $4,031,208,067 Source: City of Providence Tax Assessor’s Database (2009 data).

13 PROVIDENCE STREETCAR TAX INCREMENT FINANCING PROJECT PLAN PROVIDENCE STREETCAR

6.2 METHODOLOGY USED TO MAKE TIF REVENUE PROJECTIONS

TIF revenue projections are based on the Streetcar Economic Impact Analysis Report performed as part of the Core Connector Study in 20121. These projections were made based on currently available space in Providence in 2011, and using actual development results realized in other US cities with streetcars. Based on the experience of streetcar projects in other cities, it is assumed that development will begin at the same time that construction of the streetcar begins, which is anticipated to be 2016. The full build-out period for related development is assumed to be 20 years, from 2016 to 2035.

A multi-step methodology was used to estimate the level of induced economic development resulting from the construction and operation of a streetcar in downtown Providence. Figure 4 shows these steps, with the analysis estimating both the amount of baseline growth expected to occur without a streetcar system versus the amount of additional growth that reasonably expected to occur with a streetcar.

Development impacts were projected in terms of the following:

• Square Footage of Development – The amount of vacant and redevelopable space available was estimated, and the projected amount of development of these spaces that may occur as a result of the streetcar service was calculated. • Increases in Jobs and Population – The analysis captured residential, commercial, and institutional development potential and converted these estimates into likely job and population increases. • Property Value Increases – The estimate of development likely to be generated by a streetcar was used to estimate the likely increase in property value for the area. This property value increase was then be used to estimate the projected levels of incremental tax revenues to be generated within the Tax Increment Area.

Figure 4: Development Projection Methodology Used to Estimate Future TIF Revenues

1 The work was performed by HDR Economics, an engineering and economics consulting firm out of Boston, MA, with several workshops attended by local and out-of-state developers and real estate professionals to review the assumptions and reasonableness of the projections. 14 PROVIDENCE STREETCAR TAX INCREMENT FINANCING PROJECT PLAN PROVIDENCE STREETCAR

6.3 PROJECTED INDUCED DEVELOPMENT DUE TO STREETCAR

Based on a risk analysis, three potential future growth scenarios were developed to provide “low-, mid-, and high-range” estimates for the level of induced economic growth attributable to a Providence Streetcar. According to the mid-range or “most likely” development projections, the area along the route would realize about 3.6 million square feet of new development and about a $734 million increase in value on taxable property in the district over the next 20 years. Tax-exempt property would also see a significant increase in value, of about $227 million over twenty years.

The development methodology and projections were shared at a series of workshops with local and out-of-state developers and real estate professionals; the consensus was that the assumptions and projections were reasonable, if not conservative, in nature. Additional reasonability tests were performed and found that:

• The Return on Investment (ROI) made on the Providence Streetcar was projected to be about 9:1, which is significantly more conservative than the actual returns realized in other U.S. cities (e.g. ROI of 14:1 in Little Rock AR; 19:1 in Memphis TN; and 34:1 in Portland OR).

6.4 CALCULATION OF TAX INCREMENT TO BE GENERATED

Appendix B shows the increased value of taxable property within the Streetcar TIF District over a 30-year period, and the incremental tax revenue to be generated. About $500,000 in incremental revenues would be generated in year 2015, growing to over $17 million by 2034. The following assumptions were made: (See Appendix B – Streetcar Tax Increment Area – Estimate Of Incremental Tax Revenue To Be Generated)

6.4.1 ASSUMPTIONS • TIF projections are based off 2009 Base Assessed Value. A City of Providence Tax Assessor, upon establishment of the District, will reevaluate the base value of the Tax Increment Area per the base date in accordance with RIGL 45- 33.2-3. • The analysis is based on development of a Providence Streetcar between College Hill and Prairie Avenue; revenue generation estimates reflect reduced growth impacts in the Prairie Avenue area due to project phasing. • It is assumed the City’s current 2014 residential and commercial tax rates would remain in place over the 20 year forecast period. • It is assumed that all new multi-family residential and commercial development on vacant land would be eligible for tax incentives. The assumption used for purposes of calculating the tax increment is that the base assessment and taxes would remain flat during the first three years, followed by a 10-year phase in of full taxes, at a 10% increase per year. • All new residential development on vacant land in the district would be non-owner-occupied. • Existing residential development in the district is assumed to be 25% owner-occupied. A blended residential rate was used to calculate incremental tax revenues on existing residential properties.

6.4.2 METHOD OF CALCULATION • The base tax within the Tax Increment Area will be retained by the City and not pledged to the repayment of the Tax Increment Bonds. • The incremental annual property taxes in the Tax Increment Area will pay debt service on the Tax Increment Bonds. • The excess of the annual property tax increment in the Tax Increment Area will be retained by the City.

15 PROVIDENCE STREETCAR TAX INCREMENT FINANCING PROJECT PLAN PROVIDENCE STREETCAR

6.5 PROJECT DEBT + PERCENTAGE OF TAX INCREMENT DIRECTED TOWARD PROJECT

For the initial streetcar segment, a total of $60 million in up front capital contributions have been identified to support project design and construction. These funds would be supplemented by the issuance of an estimated $57.73 million TIF revenue bond in 2017 by the City of Providence, backed by incremental tax revenues coming from a newly established TIF District. Total debt service payments would be about $3.2 million over a 30-year term.

As shown in the Project Pro-Forma (Appendix A), it is assumed that over the first 10 years, approximately 54% of the incremental tax revenues would be directed towards the implementation of the first project phase (design, construction and operation of streetcar between College Hill and RI Hospital). As the pace of development increases and tax stabilization incentives for new developments are phased out, over time, a smaller portion of overall Tax Increment Area revenues would be dedicated to the project. It is anticipated that 8 years after project construction begins, the percentage of the tax increment dedicated to the project will begin to be reduced.

Figure 5: Tax Increment Directed to Project

$20 $18 TIF District Revenues $16 Revenues Directed to Project $14 MILLIONS $12 $10 $8 $6 $4 $2 $- 1 3 5 7 9 11 13 15 17 19 YEARS

7 DESIGNATION OF OFFICER TO CALCULATE TAX INCREMENT

The City of Providence Tax Assessor would be responsible for calculating the annual tax increment and percentage available to the project.

16 PROVIDENCE STREETCAR TAX INCREMENT FINANCING PROJECT PLAN APPENDIX A - PROJECT PRO-FORMA PROVIDENCE STREETCAR - Project Pro-Forma / Projected 20-Year Cash Flow Initial Starter Segment: College Hill to RI Hospital Circle

CAPITAL COSTS 2015 2016 2017 2018 TOTAL CAPITAL Key Assumptions Total Expenditures by year $3,941,686 $25,925,012 $54,958,314 $32,974,988 $117,800,000 Project costs inflated to $2018 Assumes $29M TIGER grant Revenue Sources by year Approx. $4M needed to initiate project development in 2015 USDOT TIGER Grant $0 $14,000,000 $15,000,000 $29,000,000 TIF District established in 2014; revenues generated in 2015 CMAQ $1,750,000 $1,750,000 $1,750,000 $5,250,000 Tax incentives on all new vacant land development (13 yrs) RIDOT Land Donation $824,000 $824,000 Bond finance charges included in total capital costs Private Contribution (RICC) $10,000,000 $10,000,000 Streetcar operations begin in late 2018 RICAP or Other State Funding $5,000,000 $5,000,000 $5,000,000 $15,000,000 Fares set at $2/ride Subtotal Capital Revenues by year $10,000,000 $21,574,000 $21,750,000 $6,750,000 $60,074,000 3 year $550K CMAQ operating subsidy through RIPTA Assumed Bond Issue $0 $0 $57,726,000 $57,726,000 Tax exempt institutions assessed at $0.60/$0.30 per $1,000 of value TOTAL Capital Revenues by Year $10,000,000 $21,574,000 $79,476,000 $6,750,000 $117,800,000 Cash Flow Excess/(Shortfall) by Year $6,058,314 ($4,351,012) $24,517,686 ($26,224,988) $0 Excess/Shortfall over time $6,058,314 $1,707,302 $26,224,988 $0 $0

ANNUAL COSTS - DEBT SERVICE 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 City TIF Revenue bond (30 yrs/3.5%) $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 Interest Payments $2,100,000 $2,100,000 Subtotal Debt Service $0 $2,100,000 $2,100,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000

ANNUAL COSTS - OPERATIONS 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Annual Transit Operations @3.0% annual inflation $1,565,020 $3,223,941 $3,320,659 $3,420,279 $3,522,888 $3,628,574 $3,737,431 $3,849,554 $3,965,041 $4,083,992 $4,206,512 $4,332,707 $4,462,689 $4,596,569 $4,734,466 $4,876,500 $5,022,795

ANNUAL CASH FLOW ESTIMATES 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 REVENUES System Revenues (via Operator) FTA Section 5307 (Prev Maint) @2.5% annual inflation $112,500 $225,000 $230,625 $236,391 $242,300 $248,358 $254,567 $260,931 $267,454 $274,141 $280,994 $288,019 $295,219 $302,600 $310,165 $317,919 $325,867 Fare Revenues @ $2.00/ride @ 2.5% annual inflation $697,800 $1,395,600 $1,430,490 $1,466,252 $1,502,909 $1,540,481 $1,578,993 $1,618,468 $1,658,930 $1,700,403 $1,742,913 $1,786,486 $1,786,486 $1,786,486 $1,786,486 $1,786,486 $1,786,486 Sponsorship/Ad Revenues @2.5% annual inflation $87,500 $175,000 $179,375 $183,859 $188,456 $193,167 $197,996 $202,946 $208,020 $213,221 $218,551 $224,015 $229,615 $235,356 $241,239 $247,270 $253,452 Subtotal System Revenues $0 $0 $897,800 $1,795,600 $1,840,490 $1,886,502 $1,933,665 $1,982,006 $2,031,557 $2,082,346 $2,134,404 $2,187,764 $2,242,458 $2,298,520 $2,311,321 $2,324,442 $2,337,890 $2,351,676 $2,365,805

CALCULATION OF ADDITIONAL NEED Debt Service Costs $0 $2,100,000 $2,100,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 Operation Costs (less System Revenues) $667,220 $1,428,341 $1,480,169 $1,533,777 $1,589,223 $1,646,568 $1,705,875 $1,767,209 $1,830,637 $1,896,228 $1,964,054 $2,034,188 $2,151,368 $2,272,128 $2,396,576 $2,524,825 $2,656,990 Subtotal Additional NEED $0 $2,100,000 $2,767,220 $4,628,341 $4,680,169 $4,733,777 $4,789,223 $4,846,568 $4,905,875 $4,967,209 $5,030,637 $5,096,228 $5,164,054 $5,234,188 $5,351,368 $5,472,128 $5,596,576 $5,724,825 $5,856,990 TIF Revenues Available to Project $ 310,839 $ 621,678 $1,243,356 $1,865,034 $2,057,252 $2,301,111 $2,647,336 $3,041,733 $3,484,303 $3,830,193 $4,179,591 $4,153,793 $4,080,679 $3,769,203 $3,707,779 $4,037,466 $4,342,574 $4,653,212 $4,969,379 $5,291,076 TOTAL ADDITIONAL NEED AFTER TIF ($310,839) ($621,678) $856,644 $902,186 $2,571,090 $2,379,059 $2,086,441 $1,747,490 $1,362,265 $1,075,682 $787,617 $876,843 $1,015,549 $1,394,851 $1,526,408 $1,313,902 $1,129,554 $943,364 $755,446 $565,914

Other Revenues Available Tax-Exempt Institutional Assessment $0 $ 1,025,075 $ 1,055,500 $ 1,077,748 $ 1,088,871 $ 1,099,993 $ 1,111,116 $ 1,122,238 $ 1,133,361 $ 1,145,209 $ 1,157,057 $ 1,165,880 $ 1,174,542 $ 1,183,203 $ 1,191,865 $ 1,200,527 $ 1,209,189 $ 1,217,850 $ 1,226,512 CMAQ Operating Subsidy (3 years) $0 $550,000 $550,000 $550,000 Other Local Revenues (City Parking) $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 Subtotal Other Revenues $300,000 $1,325,075 $1,355,500 $1,927,748 $1,938,871 $1,949,993 $1,111,116 $1,122,238 $1,133,361 $1,145,209 $1,157,057 $1,165,880 $1,174,542 $1,183,203 $1,191,865 $1,200,527 $1,209,189 $1,217,850 $1,226,512 Excess or (SHORTFALL) by year $310,839 $921,678 $468,431 $453,314 ($643,342) ($440,188) ($136,448) ($636,374) ($240,027) $57,679 $357,591 $280,213 $150,331 ($220,309) ($343,205) ($122,037) $70,973 $265,824 $462,405 $660,598 Excess or (SHORTFALL) over time $310,839 $1,232,517 $1,700,948 $2,154,262 $1,510,920 $1,070,732 $934,284 $297,910 $57,883 $115,562 $473,153 $753,367 $903,697 $683,388 $340,183 $218,146 $289,119 $554,943 $1,017,348 $1,677,946 Notes: Fares set @ $2 for 2018 (and assumes 2326 daily riders an average of 300 days/year); escalated@ 2.5% to reflect projected ridership/fare increases over time Institutional Assessments only made on tax-exempt university and hospital properties within corridor, ending w/in one-quarter mile of RIH Circle, @ $0.60/$0.30 per $1000 of value

TOTAL TIF District Revenues $ 575,628 $ 1,151,255 $ 2,302,511 $ 3,453,766 $ 3,809,725 $ 4,261,316 $ 4,902,474 $ 5,632,839 $ 6,452,412 $ 7,092,950 $ 8,359,183 $ 9,230,652 $ 10,201,697 $ 10,769,151 $ 12,359,264 $ 13,458,219 $ 14,475,246 $ 15,510,706 $ 16,564,597 $ 17,636,921 Percentage of TIF Used for Project 54% 54% 54% 54% 54% 54% 54% 54% 54% 54% 50% 45% 40% 35% 30% 30% 30% 30% 30% 30% TIF Revenues Available to Project $ 310,839 $ 621,678 $ 1,243,356 $ 1,865,034 $ 2,057,252 $ 2,301,111 $ 2,647,336 $ 3,041,733 $ 3,484,303 $ 3,830,193 $ 4,179,591 $ 4,153,793 $ 4,080,679 $ 3,769,203 $ 3,707,779 $ 4,037,466 $ 4,342,574 $ 4,653,212 $ 4,969,379 $ 5,291,076

(Assumes 100% tax abatement incentive on new vacant land development for 3 years; full rate phased in over years 4 to 13

17 PROVIDENCE STREETCAR TAX INCREMENT FINANCING PROJECT PLAN APPENDIX B - STREETCAR TAX INCREMENT AREA - ESTIMATE OF INCREMENTAL TAX REVENUE TO BE GENERATED

Incremental Residential Tax Revenues 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Property value increase: New Development $8,972,705 $17,945,411 $35,890,822 $44,335,721 $52,780,620 $61,225,520 $69,670,419 $78,115,318 $86,973,443 $95,831,568 $105,102,918 $114,282,440 $123,461,962 $132,641,484 $141,821,006 $151,000,529 $160,180,051 $169,359,573 $178,539,095 Incremental tax revenues (w/ incentives $ - $ - $ 30,283 $ 92,014 $ 216,640 $ 370,865 $ 554,688 $ 768,109 $ 1,011,128 $ 1,283,745 $ 1,588,334 $ 1,421,728 $ 2,265,519 $ 2,608,514 $ 2,922,431 $ 3,240,569 $ 3,562,927 $ 3,889,505 Redevelopment and Premium on Existing Properties $ 7,626,439 $ 15,252,879 $ 22,879,318 $ 24,464,045 $ 26,048,771 $ 27,633,498 $ 29,218,224 $ 30,802,951 $ 32,387,677 $ 33,972,404 $ 34,388,383 $ 34,804,362 $ 35,220,342 $ 35,636,321 $ 36,052,300 $ 36,468,280 $ 36,884,259 $ 37,300,238 $ 37,716,217 Assume 75% units are rental @ avg. rate of $30.13 $ 164,391 $ 328,782 $ 493,172 $ 530,827 $ 568,482 $ 606,137 $ 643,792 $ 681,447 $ 719,102 $ 756,756 $ 763,276 $ 769,796 $ 776,316 $ 782,835 $ 789,355 $ 795,875 $ 802,395 $ 808,914 $ 815,434

Incremental Commercial Tax Revenues 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Property value increase: New Development Incremental tax revenues (w/ incentives $ - $ - $ - $ 63,335 $ 190,855 $ 445,045 $ 758,845 $ 1,132,255 $ 1,297,031 $ 2,057,905 $ 2,610,144 $ 3,229,988 $ 3,917,435 $ 4,617,144 $ 5,326,492 $ 5,982,989 $ 6,653,698 $ 7,338,619 $ 8,037,751 Redevelopment and Premium on Existing Properties $ 26,853,458 $ 53,706,916 $ 80,560,374 $ 86,674,273 $ 92,788,171 $ 98,902,069 $ 105,015,968 $ 111,129,866 $ 117,243,764 $ 123,357,663 $ 124,448,625 $ 125,539,588 $ 126,630,551 $ 127,721,514 $ 128,812,477 $ 129,903,439 $ 130,994,402 $ 132,085,365 $ 133,176,328 At full commercial rate ($36.75) $ 986,865 $ 1,973,729 $ 2,960,594 $ 3,185,280 $ 3,409,965 $ 3,634,651 $ 3,859,337 $ 4,084,023 $ 4,308,708 $ 4,533,394 $ 4,573,487 $ 4,613,580 $ 4,653,673 $ 4,693,766 $ 4,733,859 $ 4,773,951 $ 4,814,044 $ 4,854,137 $ 4,894,230

TOTAL TIF REVENUES TO BE GENERATED 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Total Incremental Revenues $ 1,151,255 $ 2,302,511 $ 3,453,766 $ 3,809,725 $ 4,261,316 $ 4,902,474 $ 5,632,839 $ 6,452,412 $ 7,092,950 $ 8,359,183 $ 9,230,652 $ 10,201,697 $ 10,769,151 $ 12,359,264 $ 13,458,219 $ 14,475,246 $ 15,510,706 $ 16,564,597 $ 17,636,921

ASSUMPTIONS 1. All new development on vacant land recieves 100% abatement years 1-3; then phased in to full tax rate years 4-13 2. All new residential development on vacant land assumed to be non-owner occupied. 3. Existing residential property in the district is 75% rental and 25% owner occupied; applies a $30.13 rate to calculate increment on existing residential properties to reflect this mix 4. Uses 2009 base property value. Does not reflect Providence reassessment completed in December 2012. 5. 2014 tax rates held constant 2014 Residential/Rental Rate = $33.75 full rate (per $1000 of value) - rental units 2014 Residential/Owner Rate = $19.25 owner occupied $30.13 Calculated rate assuming 75% of existing residential in District is rental 2014 Commercial Rate = $36.75 full rate (per $1000 of value) 6. Uses Most Likely Development Scenario from Core Connector Streetcar Economic Development Report, 2011-2012. Projections shifted out two years. 7. Includes revenues from west of Prairie Avenue, but only includes projected residential redevelopment at 35% of the rate that would occur if streetcar extended to Prairie

18 PROVIDENCE STREETCAR TAX INCREMENT FINANCING PROJECT PLAN PROVIDENCE STREETCAR

project 1 summary

2 maps

3 funding

project 4 impacts

future 5 expansion project 1 summary

WHY?

THE STREETCAR WILL:

spark economic development // create 6,000 new jobs over the next 20 years + 250 construction jobs // increase surrounding property values by $1.1 BILLION // reduce carbon emissions // attract 1,500 new city residents over next 20 years // lower household transportation costs // better connect employment hubs + key attractions

WHAT?

a local circulator that will connect College Hill, Capital Center, the Financial District, Downcity, the Hospital District and Upper South Providence

ROUTE LENGTH 2.5 miles END-TO-END TRAVEL TIME 15 minutes FREQUENCY 12-min (peak) 15-20 min (off-peak) STREETCAR STOPS 12 stops, approximately every 800 ft {COST $114.37 M (one-time) $3.13 M (annual)

HOW?

FUNDING SOURCES PROJECT PARTNERS

City TIF Bonds [ 47% ] City of Providence Providence Foundation Federal funds [ 34% ] RIPTA Private sector leaders RI Capital Plan [ 13% ] RI Convention Center Authority Other institutions RIPTA CMAQ [ 5% ] State of RI {{RIDOT land transfer [ 1% ] Brown University

1 PROVIDENCE STREETCAR “IT IS UP TO METROS TO NOT ONLY BE THE ENGINES OF THE ECONOMY BUT TO BE THE VANGUARD OF CHANGE.”

- Bruce Katz, The Brookings Institution

PROVIDENCE STREETCAR 2 maps 2 STREETCAR STOPS

3 1 1 thayer st + fones alley 2 2 n main st + washington st

3 providence station 4

4 kennedy plaza 5 mathewson st + washington st 5

6 empire st + washington st

7 chestnut st + broad st 6

8 chestnut st + clifford st 9 9 ship st square 7 8 10 chestnut st + elbow st 10 11 richmond st + point st 11

12 point st + hospital st 12 13 rhode island hospital 14 dudley st + culver st

15 dudley st + plain st 16 dudley st + prairie ave 13

14 15 16

3 PROVIDENCE STREETCAR RECENT TRANSFORMATIVE PROJECTS

The streetcar will TIE together a variety of onoing public + private initiatives targeted at TRANSFORMING the City’s economic health + vitality

Kennedy Plaza 111 Westminster

I-195 District

PROVIDENCE STREETCAR 4 VACANT OR REDEVELOPABLE LAND

3 MILLION SQUARE FEET OF VACANT AND REDEVELOPABLE LAND IS AVAILABLE WITHIN 1/4 MILE OF THE ROUTE

I-195/The LINK land

vacant land near train station

underutilized land in the Hospital District

5 PROVIDENCE STREETCAR “ACROSS THE NATION, CITIES AND METROS ARE TAKING CONTROL OF THEIR OWN DESTINIES, BECOMING DELIBERATE ABOUT THEIR ECONOMIC GROWTH.”

- “The Metropolitan Revolution: How Cities and Metros are Fixing our Broken Politics and Fragile Economy”

PROVIDENCE STREETCAR 6 3 funding

[ PROJECT PARTNERS ]

The partners involved in advancing this initiative reflect a diversity of public and private sector interests related to transportation, higher education, the medical and technology sectors, business and economic development, and community builders.

[ CAPITAL COST + FUNDING ]

The estimated capital cost for the first segment of the project is $114.37 million (2015 dollars). Funding will come from City TIF Bonds, Federal funds, RI Capital Plan funds, RIPTA CMAQ funds, and a RIDOT land transfer.

RICAP

RIDOT LAND TRANSFER

RIPTA CMAQ CITY TIF BONDS

[ ANNUAL OPERATING COSTS ]

FEDERAL FUNDS Annual operating costs are projected as $3.13 million in 2018 (the first full year of operations).

7 PROVIDENCE STREETCAR “WE BELIEVE ONE OF THE SINGLE BEST INVESTMENT OPPORTUNITIES IN THE COUNTRY IS TRANSIT-ORIENTED DEVELOPMENT. THE NUMBER OF CITIES THAT HAVE GOTTEN INTO THE RAIL SIDE OF THINGS HAS GROWN RAPIDLY.”

- Ed McMahon, Urban Land Institute senior resident fellow

PROVIDENCE STREETCAR 8 project 4 impacts

jobs development + growth value ECONOMIC COMPETITIVENESS

connections clean mobility energy efficient access transit-oriented LIVABILITY SUSTAINABILITY

9 PROVIDENCE STREETCAR new jobs NEW JOBS + RESIDENTS new residents ATTRIBUTABLE TO STREETCAR ECONOMIC additional development COMPETITIVENESS additional property value 3,000

2,500

2,000

1,500

1,000

500 3.5 MILLION FT2 in NEW DEVELOPMENT 0 # of jobs / resident College Capital Downcity Jewelry Hospital Prairie

$ $1.1 BILLION in ADDITIONAL PROPERTY VALUE Hill Center District District Ave. Area

6,000 NEW JOBS new jobs new residents

PROJECTED GROWTH AT FULL INCREASE IN PROPERTY VALUE DUE STREETCAR BUILD-OUT (2033) TO NEW DEVELOPMENT

$2,000,000,000 $1,800,000,000 2,500,000 $1,600,000,000 $1,400,000,000 2,000,000 $1,200,000,000 1,500,000 $1,000,000,000 $800,000,000 1,000,000 $600,000,000 $400,000,000 500,000 square feet of development feet square $200,000,000 0 $0 College Capital Downcity Jewelry Hospital Prairie 2014 2016 2018 2022 2032 2028 2024 District District Ave. Area 2026 2020 Hill Center 2030

baseline growth streetcar-attributable growth baseline increase streetcar-attributable increase

PROVIDENCE STREETCAR 10 better connections better mobility better access LIVABILITY

RISD Art Museum = 150,000 annual attendance

Children’s Museum = 167,000 annual attendance

over 6,700 households 45,000 people passing daily though Kennedy over 1,000 low- Plaza moderate income units 1,300 Amtrak + 2,700 CULTURAL VENUES TRANSPORTATION MBTA passengers passing HOUSING HUBS daily through Providence Station

Nearly 50,000 employees Brown University + RISD + J&W 1,300 + businesses University + CCRI + URI Fein- stein Campus = 24,500+ students

COLLEGES + EMPLOYMENT UNIVERSITIES

WaterFire = more than 1 MILLION visitors per year

RI Convention Center = 312,000 visitors + 300 events per year

SPECIAL DD Center = 800,000 visitors + EVENTS 120 events per year

Providence Performing Arts Center = 475,000 visitors per year

11 PROVIDENCE STREETCAR more clean air more energy efficiency more transit-oriented development SUSTAINABILITY

INCREASE IN TOD TO REDUCE AUTODEPENDENCY

Transit-oriented development (TOD) allows the City to strategically use infrastructure to promote sustainable urban growth

DECREASE IN OIL CONSUMPTION

Streetcars will be electrically-powered, lessening fossil fuel usage

DECREASE IN TOTAL # OF TRIPS

Drivers will be encouraged to “park once” near the I-195 interchange and use the streetcar within the corridor

Streetcars have larger passenger capacity than buses and private vehicles

Private shuttle trips operated by Brown University and Rhode Island Hospital will be consolidated

DECREASE IN PROJECTED CO2 EMISSIONS BY 1,400 TONS OVER THE FIRST 30 YEARS

2015 2025 2035 2045

PROVIDENCE STREETCAR 12 “TIGER PROJECTS ARE THE BEST ARGUMENT FOR INVESTMENT IN OUR TRANSPORATION INFRUSTRUCTURE. TOGETHER, THEY SUPPORT PRESIDENT OBAMA’S CALL TO ENSURE A STRONGER TRANSPORTATION SYSTEM FOR FUTURE GENERATIONS BY REPAIRING EXISTING INFRASTRUCTURE, CONNECTING PEOPLE TO NEW JOBS AND OPPORTUNITIES, AND CONTRIBUTING TO OUR NATION’S ECONOMIC GROWTH.”

- Anthony Foxx, U.S. Secretary of Transportation

13 PROVIDENCE STREETCAR

INCREASE IN WALKING + OVERALL PUBLIC HEALTH future 5 expansion

POTENTIAL FUTURE STREETCAR EXTENSIONS

PROVIDENCE STREETCAR 14 ORIGINAL PROVIDENCE STREETCAR HISTORIC ELECTRIC RAILWAYS CITY OF PROVIDENCE 1937 ATLAS

streetcar in market square

streetcar along westminster street 15 PROVIDENCE STREETCAR STREETCAR LINES AROUND THE COUNTRY

seattle tacoma spokane

portland

boston

providence minneapolis boise grand rapids new haven newark stamford brooklyn milwaukee detroit kenosha philadelphia

baltimore columbus washington d.c. salt lake city indianapolis sacramento arlington san francisco denver cincinnati colorado springs kansas city

winston-salem

charlotte

memphis los angeles albuquerque oklahoma city san pedro long beach little rock atlanta augusta san diego tempe savannah dallas ft worth tuscon jacksonville gainesville austin new orleans san antonio galveston tampa

ft lauderdale miami Historic line in operation Modern line in operation

Planned modern line

PROVIDENCE STREETCAR 16 PROVIDENCE STREETCAR

Providence Streetcar Alternate Route and Station Justification

Submitted to FTA Region 1 Office on December 4, 2014; Modified based on comments received from FTA Region 1 and submitted to the Office of the Secretary on March 24, 2015

Background The City of Providence was awarded a $13M FY14 TIGER grant for the initial (Phase 1A) segment of the Providence Streetcar project connecting the Hospital District and College Hill through downtown Providence. Future extensions for Phase 1B were identified to Providence Station (Amtrak and Commuter Rail station) and along Dudley Street in the Upper South Providence neighborhood.

Requested Modifications The City requests consideration of two modifications to the TIGER VI project definition: the first to include Providence Station as a terminus for the initial Phase 1A segment rather than College Hill and the second to make a minor route adjustment in the Jewelry District. The Providence Station modification would adjust the TIGER-funded Phase 1A alignment to connect the Hospital District directly to Providence Station through downtown Providence, with a subsequent extension of the route through Phase 1B to serve College Hill. Based on stakeholder feedback, a secondary, minor modification to realign the route through the Jewelry District is requested to improve the directness of the route and increase its frequency without sacrificing access to critical destinations.

The proposed modifications will ensure a stronger Phase 1A project and enable the streetcar project to better coordinate with near-term State, RIPTA, and City priorities and other recent federal investments:

• The streetcar would connect to a proposed multimodal transit hub at Providence Station. RIDOT was awarded a TIGER VI planning grant to advance this project. The development of a transit hub at the train station, coupled with ongoing growth of intercity and commuter rail service, will generate an increased amount of multimodal activity at the train station. The streetcar project, as noted in the TIGER application for the Providence Station Transit Center, is uniquely positioned to support a coordinated effort to boost mobility options as well as development opportunities at this important regional transportation hub. • Refocusing Phase 1A streetcar service supports RIPTA’s recently-developed plans to redesign downtown transit around multiple hubs, with Providence Station being one of the centers of transit activity. The revised initial streetcar alignment provides a unique service that complements other transit routes. • From both the City and State perspectives, providing a direct streetcar connection to the train station enhances the marketability of the Link District (the land recently made available for redevelopment due to the relocation of I-195) by providing a high-quality transit connection to the important Northeast Corridor. Focusing more attention on establishing an initial connection to the train station builds upon the tremendous value already created by this critical rail asset. • The proposed modifications enable an improved service frequency (every 10 minutes rather than every 12 minutes), which has been noted as an important priority in feedback from transit riders. • The proposed modifications would also result in a reduced capital cost for the initial Phase 1A segment (from $117.8M to $100.2M), which will help to fill the gap between the TIGER VI funding request ($29M) and the TIGER VI grant award ($13M).

Page 1 of 4

Details of Proposed Phase 1A Alignment Change

Alignment Length: 2.1 miles (current); 1.6 miles (proposed)

End-to-End Travel Time: 15 minutes (current); 11 minutes (proposed)

Peak Frequency: 12 minutes (current); 10 minutes (proposed)

Number of Stations: 12 (current); 11 (proposed) Two stops (at the bottom and at the top of the bus tunnel to College Hill) would be deferred to Phase 1B of implementation. One stop (at Providence Station) would be added to Phase 1A. One stop in the Jewelry District would be moved approximately 450’ to the east.

Typical Distance Between Stations: No change (approximately 800’)

Vehicles Required: No change (3 plus 1 spare)

Capital Costs (in 2018 dollars): $117.8M (current); $100.2M (proposed)

Annual Operating Costs: No change ($3.2M in the first full year of operations)

Implications of Proposed Alignment Change

Ridership Modeling conducted during the Alternatives Analysis indicated that a route serving Providence Station would have marginally higher opening year ridership as compared to College Hill. Although Providence Station was forecasted to generate more long-term (horizon year of 2030) ridership due to future intercity and commuter rail growth, College Hill was viewed as being a more mature transit market in the short-term.

However, previous ridership forecasting did not reflect the presence of a RIPTA transit hub at Providence Station. Although it is unlikely that a new transit hub at the train station will be in place prior to the opening of the streetcar, re-orienting the initial streetcar service to Providence Station would generate additional momentum for the train station transit hub (currently beginning TIGER- funded planning activities) and may generate higher streetcar ridership in the early years of revenue service.

The proposed route realignment in the Jewelry District would provide more direct and visible access to the large-scale South Street Landing project that is now under development. Access to the Coro Center (research and administrative facilities associated with Rhode Island Hospital) would be accommodated by a stop located within approximately 600 feet of the facility entrance (~400 feet farther than the current stop location).

Page 2 of 4

Stops Deferred to Phase 1B (2)

Stops Added to Phase 1A (1)

Stops Moved (1)

Map of Requested Modifications

Page 3 of 4

Economic Development Although the modified streetcar project would connect to the state’s second largest employment center (College Hill) as part of Phase 1B rather than Phase 1A, connecting directly to Providence Station creates a high-quality connection from the Link District (former I-195 parcels now being developed) to points beyond Providence in the state and region. This access will enhance the marketability of these critical development sites. In addition, the proposed train station terminus would enhance development opportunities in the Capital Center Special Development District, which is consistent with the development goals cited in the TIGER-funded Providence Station Transit Center planning study.

Environmental Justice The southern terminus of the proposed TIGER streetcar project (on Eddy Street near the main entrance to RI Hospital in Upper South Providence) does not change, resulting in no new Environmental Justice considerations.

Environmental Review Status The Environmental Assessment (EA) included consideration of the impacts of the extension going to Providence Station, so no additional analysis is needed for the proposed realignment. Some minor additional technical work may be needed for the southern terminus at Rhode Island Hospital and for the new proposed stop on Chestnut Street and turn from Chestnut Street to Point Street. Rhode Island Hospital was proposed as the terminus for purposes of the TIGER grant, but the EA did not view this specific location as an end-of-line station.

Financing The capital costs of Phase 1A would be reduced from $117.8 million to $100.2 million. The geographical boundaries of the TIF District are proposed to remain the same as currently drawn. By encompassing the area that would be served by both Phase 1A and Phase 1B, local funds that can be applied to development of Phase 1B will be banked from the outset, encouraging rapid construction of these extensions.

Project Support It is likely that the proposed route realignment will help to build political support for the project from the business community who has strongly advocated for a more direct connection to Providence Station, and from the State, as the proposed change now aligns directly with RIDOT’s priorities of enhancing and growing a multimodal hub at Providence Station. It is also likely that the realigned route

will help to build greater support from Brown University, Rhode Island College, and the University of Rhode Island because of the improved direct connection between the South Street Landing project that they are involved in and Providence Station.

Page 4 of 4

Memorandum

12 Breakneck Hill Road Maureen E. Gurghigian Suite 200 Managing Director Lincoln, RI 02865 401-334-4267 Direct [email protected] 401-333-3807 Fax

Date: June 25, 2015

To: Samuel D. Zurier, Member, Providence City Council

Cc: Adam Krea

RE: Information request on future City of Providence bonding

In response to your request dated June 22, 2015, FirstSouthwest has projected four City of Providence bond issue amounts issued between December 2015 and January 1, 2017. These projections are based on various assumptions and are structured to keep the City’s debt per capita at the current fiscal year 2015 level. As there are many factors that go into a rating agency’s review of the City, and the assignment of a rating is reflective of their opinion, we are not able to comment on whether this projected debt level will ultimately affect the City’s rating. However, one measurement of an issuer’s debt burden is the amount of debt per capita. For this reason, to determine the capacity for a bond issue on January 1, 2017, we projected the amount the City could issue without exceeding the current, fiscal year 2015 debt per capita figure.

The various scenarios are below:

Planned Issuance in Amount of Scenario the Next 18 Months January 1, 2017 Issue

1. $10MM 12/1/15 PPBA School Bonds $87,035,000

2. $10MM 12/1/15 PPBA School Bonds and 77,395,000 $10MM 7/1/16 PPBA School Bonds

3. $10MM 12/1/15 PPBA School Bonds, 24,085,000 $10MM 7/1/16 PPBA School Bonds, and $55MM 7/1/16 Hypothetical GO Bonds

4. $10MM 12/1/15 PPBA School Bonds, 23,460,000 $10MM 7/1/16 PPBA School Bonds, and $55MM 12/1/16 Hypothetical GO Bonds

This communication is for information only, not an offer, solicitation or recommendation, nor an official confirmation of any financial transaction. It is not to be considered research. The information is considered to be reliable, but First Southwest Company, LLC does not warrant its completeness or accuracy, prices and availability are subject to change without notice. Clients should consult their own advisors regarding any accounting, legal or tax aspects. Investors are instructed to read the entire Official Statement to obtain information essential to the making of an informed investment decision.

The fourth scenario simply moves the hypothetical $55 million GO bond to December 1, 2016 rather than the original planned date of July 1, 2016. The reason for this scenario is that if the City decides to issue a GO bond, it would go to the voters – most likely in November 2016. Therefore, we added this fourth scenario to show you the slight difference that date change would make.

Attached is a printed copy of the model. The first page shows the City’s current outstanding debt. The second, third, fourth, and fifth pages show each of the scenarios above.

In addition to the City’s outstanding debt, it is important to look at the City’s projected debt service. As you rightly mentioned when we presented to your Committee in April, the amount of debt service paid on school bonds with an 80% school housing aid reimbursement is quite different than paying 100% of debt service on non-school debt. Therefore, it is important to evaluate the impact of future debt service with and without school aid. This is also shown on pages 2-5 in the attached model. The table below summarizes the projected impact to gross and net future debt service using the assumptions listed in the model for fiscal years 2016-2018.

FY 2016 FY 2017 FY 2018 Current Gross Tax-Supported Debt Service $64,517,634 $62,996,423 $57,810,270 Current Net (of School Housing Aid) Tax-Supported Debt Service 36,493,541 36,219,507 31,283,111

Current & Proposed Gross Tax-Supported Debt Service 64,985,411 67,295,673 61,060,695 Current & Proposed Net (of School Housing Aid) Tax-Supported Debt Service 36,961,319 40,518,757 37,533,536

The projected amounts in this memo use the assumptions outlined in the model. Bond issuance dates, amounts, and interest rates are projections and any changes will change the projected outcomes. As the variables are all subject to change, this information is for discussion purposes only.

Thank you for the opportunity to provide you with this information.

Disclosure: First Southwest Company, LLC (FirstSouthwest) is providing the information contained in the document for discussion purposes only in anticipation of serving as financial advisor on future City of Providence, Rhode Island transactions. Information in this document portrays projected interest rates based on data current as of the week of June 22, 2015 and is subject to change with market movement. Future interest rates are dependent upon many factors such as, but not limited to, interest rate trends, tax rates, supply, changes in laws, rules and regulations, as well as changes in credit quality and rating agency considerations. The effect of such changes in such assumptions may be material and could affect the projected results. These results should be viewed with these potential changes in mind as well as the understanding that there may be interruptions in the market or no market may exist at all.

This communication is for information only, not an offer, solicitation or recommendation, nor an official confirmation of any financial transaction. It is not to be considered research. The information is considered to be reliable, but First Southwest Company, LLC does not warrant its completeness or accuracy, prices and availability are subject to change without notice. We may trade, have long or short positions, or act as a market maker in any financial instrument discussed herein. Clients should consult their own advisors regarding any accounting, legal or tax aspects. Investors are instructed to read the entire Official Statement to obtain information essential to the making of an informed investment decision. 2 City of Providence Existing Outstanding Tax-Supported Debt All Transactions Through June 30, 2015 As of June 30,

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 General Obligation Taxable Bonds 2001 SeriesB $ 8,435,000 $ 7,885,000 $ 7,300,000 $ 6,680,000 $ 6,020,000 $ 5,315,000 $ 4,565,000 $ 3,765,000 $ 2,915,000 $ 2,005,000 General Obligation Infrastructure Lease, Dated 6/30/10 6,815,000 4,655,000 2,385,000 ------General Obligation Refunding Bonds, Series 2010A 26,810,000 24,845,000 22,820,000 20,705,000 18,505,000 16,205,000 13,805,000 11,300,000 8,680,000 5,925,000 General Obligation Bonds, Series 2013A 36,425,000 35,040,000 33,610,000 32,125,000 30,580,000 28,955,000 27,250,000 25,460,000 23,580,000 21,645,000 General Obligation Refunding Bonds, Series 2014A 14,350,000 11,080,000 8,355,000 5,495,000 2,770,000 - - - - - General Obligation Refunding Bonds, Series 2014B 6,240,000 5,110,000 4,020,000 2,915,000 1,505,000 - - - - -

Total General Obligation Debt $ 99,075,000 $ 88,615,000 $ 78,490,000 $ 67,920,000 $ 59,380,000 $ 50,475,000 $ 45,620,000 $ 40,525,000 $ 35,175,000 $ 29,575,000 Providence Public Building Authority 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Revenue Bonds, 1998 SeriesA $ 1,010,000 $ 775,000 $ 530,000 $ 270,000 $ - $ - $ - $ - $ - $ - Revenue Bonds, 1999 SeriesA 1,185,000 970,000 745,000 510,000 260,000 - - - - - Revenue Bonds, 2001 SeriesA 1,085,000 950,000 810,000 665,000 510,000 350,000 180,000 - - - RIHEBC Revenue Bonds, 2006 SeriesA 2,595,000 ------RIHEBC Revenue Bonds, 2007 SeriesA 4,855,000 3,465,000 ------RIHEBC Revenue Bonds, 2007 SeriesB 7,970,000 6,760,000 5,495,000 4,185,000 2,820,000 1,400,000 - - - - RIHEBC Revenue Bonds, 2007 Series C 4,575,000 3,460,000 ------Revenue Bonds, 2009 SeriesA (Build America Bonds) 7,105,000 6,097,000 5,025,000 3,883,000 2,668,000 1,375,000 - - - - RIHEBC QSCB Bonds, Series 2009A 14,920,000 13,440,000 11,960,000 10,480,000 9,000,000 7,520,000 6,040,000 4,560,000 3,040,000 1,520,000 Revenue Bonds, 2010 Series 9,317,000 6,797,000 4,166,000 1,419,000 ------RIHEBC QSCB Bonds, Series 2010A 9,550,000 8,867,778 8,185,556 7,503,334 6,821,112 6,138,890 5,456,668 4,774,446 4,092,224 3,410,002 RIHEBC QZAB Bonds, Series 2010B 7,517,000 6,980,056 6,443,111 5,906,167 5,369,222 4,832,278 4,295,334 3,758,389 3,221,445 2,684,500 Revenue Bond, 2011 SeriesA 28,070,000 26,120,000 24,070,000 21,915,000 19,650,000 17,270,000 14,770,000 12,145,000 9,365,000 6,420,000 RIHEBC, Revenue Refunding Bonds, Series 2013A 55,725,000 47,210,000 38,405,000 30,725,000 22,870,000 17,010,000 12,770,000 8,320,000 4,255,000 -

RIHEBC, Revenue Refunding Bonds, Series 2015A 146,325,000 142,695,000 131,625,000 120,210,000 108,455,000 96,235,000 83,530,000 70,310,000 61,570,000 47,205,000- Total PPBA Debt $ 301,804,000 $ 274,586,834 $ 237,459,667 $ 207,671,501 $ 178,423,334 $ 152,131,168 $ 127,042,002 $ 103,867,835 $ 85,543,669 $ 61,239,502

Providence Redevelopment Agency 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Taxable Lease Revenue Bonds, 2010 Series 1 $ 6,366,000 $ 4,640,000 $ 2,841,000 $ 967,000 $ - $ - $ - $ - $ - Revenue Refunding Bonds, 2015 SeriesA 44,910,000 42,550,000 39,615,000 36,590,000 33,440,000 30,770,000 27,965,000 25,025,000 21,940,000 18,695,000 Total PRA Debt $ 51,276,000 $ 47,190,000 $ 42,456,000 $ 37,557,000 $ 33,440,000 $ 30,770,000 $ 27,965,000 $ 25,025,000 $ 21,940,000 $ 18,695,000

Special Obligation Bond 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Special Obligation Tax Increment Refunding Bonds, $ 2,725,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - Series E Total Special Obligation TIF Bonds $ 2,725,000 ------TOTAL TAX SUPPORTED DEBT $ 454,880,000 $ 410,391,834 $ 358,405,667 $ 313,148,501 $ 271,243,334 $ 233,376,168 $ 200,627,002 $ 169,417,835 $ 142,658,669 $ 109,509,502 City of Providence Outstanding Tax-Supported Debt Pro-Forma December 2015 Bonds Included All Transactions Through June 30, 2015 As of June 30,

TOTAL Existing and Proposed City Debt $ 454,880,000 $ 420,151,834 $ 367,845,667 $ 322,253,501 $ 279,998,334 $ 241,761,168 $ 208,622,002 $ 177,002,835 $ 149,813,669 $ 116,214,502

Existing Gross Tax-Supported Debt Service $ 62,487,801 $ 64,517,634 $ 62,996,423 $ 57,810,270 $ 51,937,919 $ 45,198,619 $ 42,173,908 $ 41,313,380 $ 41,191,061 $ 36,641,244 Existing Tax-Supported Debt Service Net of Housing Aid 38,474,431 36,493,541 36,219,507 31,283,111 27,418,922 22,371,523 20,614,008 20,288,997 20,274,041 19,365,427 Existing and Proposed Gross Tax-Supported Debt Service 62,487,801 64,985,411 63,804,423 58,617,270 52,743,169 46,006,369 42,983,158 42,123,130 42,000,311 37,448,994 Existing and Proposed Tax-Supported Debt Service Net of 38,474,431 36,961,319 37,027,507 32,090,111 28,224,172 23,179,273 21,423,258 21,098,747 21,083,291 20,173,177 School Housing Aid

1/1/17 Bond Issue Par Sized to Per Capita Debt at 2015 Level: $ 87,035,000

1/1/17 Bonds Outstanding at Fiscal Year End $ - $ - $ 85,150,000 $ 82,360,000 $ 79,430,000 $ 76,355,000 $ 73,125,000 $ 69,735,000 $ 66,175,000 $ 62,440,000

Key Ratios on General Obligation and Proposed City Debt: Debt Per Capita $ 556.47 $ 497.72 $ 440.85 $ 381.48 $ 333.52 $ 283.50 $ 256.23 $ 227.61 $ 197.57 $ 166.11 Debt as a Percentage of Full Value 0.92% 0.82% 0.73% 0.63% 0.55% 0.47% 0.42% 0.38% 0.33% 0.28%

Key Ratios on Existing and Proposed Total Tax-Supported Debt: Debt Per Capita $ 2,554.90 $ 2,359.85 $ 2,544.32 $ 2,272.57 $ 2,018.78 $ 1,786.75 $ 1,582.47 $ 1,385.84 $ 1,213.13 $ 1,003.44 Debt as a Percentage of Full Value 4.23% 3.91% 4.22% 3.77% 3.35% 2.96% 2.62% 2.30% 2.01% 1.66%

Moody's Medians (as of 6/30/2013) RI "Baa" New England "Baa" Debt Per Capita $ 990.00 $ 3,513.00 Debt as a Percentage of Full Value 1.30% 5.40% Population (2010 Census) = 178,042 Full Value (as of 6/30/2013 for FY 2015) = $ 10,742,964,381 Assessed Value (as of 12/31/2013 for FY 2015) $ 10,962,208,553 Assumptions on Proposed Debt and Ratios: 1. Projected Series 2015 School Bonds debt service assumes a 5.00% interest rate, 20 year final maturity, and level debt service. These are preliminary projections as of June 24, 2015 and are subject to change with market movement. 2. Full Value of $10,742,964,381 held constant for FY 2016 through 2024. 3. Projected 1/1/2017 bond issue assumes an interest rate of 5.50%. 4. School Bonds are at the full par amount, however, the State School Construction Aid supports approximately 80% of total debt service. City of Providence Outstanding Tax-Supported Debt Pro-Forma December 2015 and July 2016 Bonds Included All Transactions Through June 30, 2015 As of June 30,

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 TOTAL TAX SUPPORTED DEBT $ 454,880,000 $ 410,391,834 $ 358,405,667 $ 313,148,501 $ 271,243,334 $ 233,376,168 $ 200,627,002 $ 169,417,835 $ 142,658,669 $ 109,509,502 Proposed City Debt PPBA, School Bonds (RIHEBC), Series 2015 - 9,760,000 9,440,000 9,105,000 8,755,000 8,385,000 7,995,000 7,585,000 7,155,000 6,705,000 PPBA, School Bonds (RIHEBC), Series 2016 - - 9,640,000 9,325,000 8,995,000 8,645,000 8,280,000 7,895,000 7,490,000 7,070,000 $ - $ 9,760,000 $ 19,080,000 $ 18,430,000 $ 17,750,000 $ 17,030,000 $ 16,275,000 $ 15,480,000 $ 14,645,000 $ 13,775,000

TOTAL Existing and Proposed City Debt $ 454,880,000 $ 420,151,834 $ 377,485,667 $ 331,578,501 $ 288,993,334 $ 250,406,168 $ 216,902,002 $ 184,897,835 $ 157,303,669 $ 123,284,502

Existing Gross Tax-Supported Debt Service $ 62,487,801 $ 64,517,634 $ 62,996,423 $ 57,810,270 $ 51,937,919 $ 45,198,619 $ 42,173,908 $ 41,313,380 $ 41,191,061 $ 36,641,244 Existing Tax-Supported Debt Service Net of Housing Aid 38,474,431 36,493,541 36,219,507 31,283,111 27,418,922 22,371,523 20,614,008 20,288,997 20,274,041 19,365,427 Existing and Proposed Gross Tax-Supported Debt Service 62,487,801 64,985,411 64,600,534 59,414,270 53,539,419 46,806,119 43,780,408 42,922,130 42,800,061 38,243,494 Existing and Proposed Tax-Supported Debt Service Net of 38,474,431 36,961,319 37,823,618 32,887,111 29,020,422 23,979,023 22,220,508 21,897,747 21,883,041 20,967,677 School Housing Aid

1/1/17 Bond Issue Par Sized to Per Capita Debt at 2015 Level: $ 77,395,000

1/1/17 Bonds Outstanding at Fiscal Year End $ - $ - $ 75,735,000 $ 73,375,000 $ 70,885,000 $ 68,260,000 $ 65,490,000 $ 62,565,000 $ 59,480,000 $ 56,225,000

Key Ratios on General Obligation and Proposed City Debt: Debt Per Capita $ 556.47 $ 497.72 $ 440.85 $ 381.48 $ 333.52 $ 283.50 $ 256.23 $ 227.61 $ 197.57 $ 166.11 Debt as a Percentage of Full Value 0.97% 0.87% 0.77% 0.66% 0.58% 0.49% 0.45% 0.40% 0.34% 0.29%

Key Ratios on Existing and Proposed Total Tax-Supported Debt: Debt Per Capita $ 2,554.90 $ 2,359.85 $ 2,545.58 $ 2,274.48 $ 2,021.31 $ 1,789.84 $ 1,586.10 $ 1,389.91 $ 1,217.60 $ 1,008.24 Debt as a Percentage of Full Value 4.45% 4.11% 4.43% 3.96% 3.52% 3.11% 2.76% 2.42% 2.12% 1.75%

Moody's Medians (as of 6/30/2013) RI "Baa" New England "Baa" Debt Per Capita $ 990.00 $ 3,513.00 Debt as a Percentage of Full Value 1.30% 5.40% Population (2010 Census) = 178,042 Full Value (as of 6/30/2012 for FY 2014) = $ 10,231,682,760 Assessed Value (as of 12/31/2012 for FY 2014) $ 11,828,534,984 Assumptions on Proposed Debt and Ratios: 1. Projected Series 2015 and 2016 School Bonds debt service assumes a 5.00% interest rate, 20 year final maturity, and level debt service. These are preliminary projections as of June 24, 2015 and are subject to change with market movement. 2. Full Value of $10,742,964,381 held constant for FY 2016 through 2024. 3. Projected 1/1/2017 bond issue assumes an interest rate of 5.50%. 4. School Bonds are at the full par amount, however, the State School Construction Aid supports approximately 80% of total debt service. City of Providence Outstanding Tax-Supported Debt Pro-Forma December 2015, July 2016, and Hypothetical July 2016 Bonds Included All Transactions Through June 30, 2015 As of June 30,

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 TOTAL TAX SUPPORTED DEBT $ 454,880,000 $ 410,391,834 $ 358,405,667 $ 313,148,501 $ 271,243,334 $ 233,376,168 $ 200,627,002 $ 169,417,835 $ 142,658,669 $ 109,509,502 Proposed City Debt PPBA, School Bonds (RIHEBC), Series 2015 - 9,760,000 9,440,000 9,105,000 8,755,000 8,385,000 7,995,000 7,585,000 7,155,000 6,705,000 PPBA, School Bonds (RIHEBC), Series 2016 - - 9,640,000 9,325,000 8,995,000 8,645,000 8,280,000 7,895,000 7,490,000 7,070,000 Hypothetical $50 mm GO Bonds, Series 2016 - - 53,310,000 51,650,000 49,900,000 48,050,000 46,100,000 44,045,000 41,875,000 39,585,000 $ - $ 9,760,000 $ 72,390,000 $ 70,080,000 $ 67,650,000 $ 65,080,000 $ 62,375,000 $ 59,525,000 $ 56,520,000 $ 53,360,000

TOTAL Existing and Proposed City Debt $ 454,880,000 $ 420,151,834 $ 430,795,667 $ 383,228,501 $ 338,893,334 $ 298,456,168 $ 263,002,002 $ 228,942,835 $ 199,178,669 $ 162,869,502

Existing Gross Tax-Supported Debt Service $ 62,487,801 $ 64,517,634 $ 62,996,423 $ 57,810,270 $ 51,937,919 $ 45,198,619 $ 42,173,908 $ 41,313,380 $ 41,191,061 $ 36,641,244 Existing Tax-Supported Debt Service Net of Housing Aid 38,474,431 36,493,541 36,219,507 31,283,111 27,418,922 22,371,523 20,614,008 20,288,997 20,274,041 19,365,427 Existing and Proposed Gross Tax-Supported Debt Service 62,487,801 64,985,411 69,181,090 64,006,320 58,130,169 51,400,619 48,373,158 47,512,630 47,392,536 42,836,619 Existing and Proposed Tax-Supported Debt Service Net of 38,474,431 36,961,319 42,404,174 37,479,161 33,611,172 28,573,523 26,813,258 26,488,247 26,475,516 25,560,802 School Housing Aid

1/1/17 Bond Issue Par Sized to Per Capita Debt at 2015 Level: $ 24,085,000

1/1/17 Bonds Outstanding at Fiscal Year End $ - $ - $ 23,675,000 $ 22,935,000 $ 22,155,000 $ 21,335,000 $ 20,470,000 $ 19,555,000 $ 18,590,000 $ 17,575,000

Key Ratios on General Obligation and Proposed City Debt: Debt Per Capita $ 556.47 $ 497.72 $ 740.27 $ 671.58 $ 613.79 $ 553.38 $ 515.16 $ 475.00 $ 432.76 $ 388.45 Debt as a Percentage of Full Value 0.97% 0.87% 1.29% 1.17% 1.07% 0.96% 0.90% 0.83% 0.75% 0.68%

Key Ratios on Existing and Proposed Total Tax-Supported Debt: Debt Per Capita $ 2,554.90 $ 2,359.85 $ 2,552.60 $ 2,281.28 $ 2,027.88 $ 1,796.16 $ 1,592.16 $ 1,395.73 $ 1,223.13 $ 1,013.49 Debt as a Percentage of Full Value 4.45% 4.11% 4.44% 3.97% 3.53% 3.13% 2.77% 2.43% 2.13% 1.76%

Assumptions on Proposed Debt and Ratios:

1. Projected Series 2015 and 2016 School Bonds debt service assumes a 5.00% interest rate and hypothetical $55mm GO Bonds Series 2016, dated 7/1/2016, assumes a 5.50% interest rate. All bonds assume 20 year final maturity, and level debt service. These are preliminary projections as of June 24, 2015 and are subject to change with market movement. 2. Full Value of $10,742,964,381 held constant for FY 2016 through 2024. 3. Projected 1/1/2017 bond issue assumes an interest rate of 5.50%. 4. School Bonds are at the full par amount, however, the State School Construction Aid supports approximately 80% of total debt service. City of Providence Outstanding Tax-Supported Debt Pro-Forma December 2015, July 2016, and Hypothetical December 2016 Bonds Included All Transactions Through June 30, 2015 As of June 30,

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 TOTAL TAX SUPPORTED DEBT $ 454,880,000 $ 410,391,834 $ 358,405,667 $ 313,148,501 $ 271,243,334 $ 233,376,168 $ 200,627,002 $ 169,417,835 $ 142,658,669 $ 109,509,502 Proposed City Debt PPBA, School Bonds (RIHEBC), Series 2015 - 9,760,000 9,440,000 9,105,000 8,755,000 8,385,000 7,995,000 7,585,000 7,155,000 6,705,000 PPBA, School Bonds (RIHEBC), Series 2016 - - 9,640,000 9,325,000 8,995,000 8,645,000 8,280,000 7,895,000 7,490,000 7,070,000 Hypothetical $50 mm GO Bonds, Series 2016 (Dated 12/1/2016) - - 53,935,000 52,255,000 50,485,000 48,615,000 46,640,000 44,560,000 42,365,000 40,050,000 $ - $ 9,760,000 $ 73,015,000 $ 70,685,000 $ 68,235,000 $ 65,645,000 $ 62,915,000 $ 60,040,000 $ 57,010,000 $ 53,825,000

TOTAL Existing and Proposed City Debt $ 454,880,000 $ 420,151,834 $ 431,420,667 $ 383,833,501 $ 339,478,334 $ 299,021,168 $ 263,542,002 $ 229,457,835 $ 199,668,669 $ 163,334,502

Existing Gross Tax-Supported Debt Service $ 62,487,801 $ 64,517,634 $ 62,996,423 $ 57,810,270 $ 51,937,919 $ 45,198,619 $ 42,173,908 $ 41,313,380 $ 41,191,061 $ 36,641,244 Existing Tax-Supported Debt Service Net of Housing Aid 38,474,431 36,493,541 36,219,507 31,283,111 27,418,922 22,371,523 20,614,008 20,288,997 20,274,041 19,365,427 Existing and Proposed Gross Tax-Supported Debt Service 62,487,801 64,985,411 67,295,673 64,060,695 58,183,444 51,452,794 48,429,233 47,567,330 47,445,861 42,888,569 Existing and Proposed Tax-Supported Debt Service Net of 38,474,431 36,961,319 40,518,757 37,533,536 33,664,447 28,625,698 26,869,333 26,542,947 26,528,841 25,612,752 School Housing Aid

1/1/17 Bond Issue Par Sized to Per Capita Debt at 2015 Level: $ 23,460,000

1/1/17 Bonds Outstanding at Fiscal Year End $ - $ - $ 23,060,000 $ 22,340,000 $ 21,585,000 $ 20,785,000 $ 19,940,000 $ 19,050,000 $ 18,110,000 $ 17,120,000

Key Ratios on General Obligation and Proposed City Debt: Debt Per Capita $ 556.47 $ 497.72 $ 743.79 $ 674.98 $ 617.07 $ 556.55 $ 518.19 $ 477.89 $ 435.52 $ 391.06 Debt as a Percentage of Full Value 0.97% 0.87% 1.29% 1.17% 1.07% 0.97% 0.90% 0.83% 0.76% 0.68%

Key Ratios on Existing and Proposed Total Tax-Supported Debt: Debt Per Capita $ 2,554.90 $ 2,359.85 $ 2,552.66 $ 2,281.34 $ 2,027.97 $ 1,796.24 $ 1,592.22 $ 1,395.78 $ 1,223.19 $ 1,013.55 Debt as a Percentage of Full Value 4.45% 4.11% 4.44% 3.97% 3.53% 3.13% 2.77% 2.43% 2.13% 1.76%

Assumptions on Proposed Debt and Ratios:

1. Projected Series 2015 and 2016 School Bonds debt service assumes a 5.00% interest rate and hypothetical $55mm GO Bonds Series 2016, dated 12/1/2016, assumes a 5.50% interest rate. All bonds assume 20 year final maturity, and level debt service. These are preliminary projections as of June 24, 2015 and are subject to change with market movement. 2. Full Value of $10,742,964,381 held constant for FY 2016 through 2024. 3. Projected 1/1/2017 bond issue assumes an interest rate of 5.50%. 4. School Bonds are at the full par amount, however, the State School Construction Aid supports approximately 80% of total debt service.