PROVIDENCE, RI (December 9, 2020)…Tonight, the City Council
voted to approve the refunding of the City's bond portfolio. The refunding of
bonds is much like the refinancing of homes, providing efficiency and better
interest rates, which yield savings.
"I want to thank the Committee on Finance, our Council
finance team, and the City's finance team for their dedication to ensuring that
we are doing what we can, when we can, to help address our pension liability.
It is not always easy but finding savings to help address our fiscal
obligations is paramount," stated Council President Sabina Matos (Ward
The 2010 bond's refunding will realize more than $1.3
million in net savings for the City of Providence and will not extend the life
of the bond, nor will it cause the City to incur an increase in its financial
"Refunding bonds at this time is an important cash
management tool," stated Chairman of the Committee on Finance and Majority
Whip John J. Igliozzi, Esq. (Ward 7). "It is what you do with the savings
that are realized from refunding that is important. The Committee has wisely
and clearly stated that the funds should go toward the City's pension fund.
This will provide some relief to our more than billion-dollar unfunded pension
liability. The Committee on Finance are stewards of the City's finances, and it
is mission-critical that we remain laser-focused on these long-term
The City Council has directed the City's Finance Director to
ensure that any net savings from the refunding of the bonds will be used to pay
a pension payment above one hundred percent of the Annual Required Contribution
and cannot supplant any pension payment. Guaranteeing the additional $1.3
million in savings from the bond refunding go towards the City's outstanding
Vice-Chair of the Committee on Finance and City Council
Majority Leader Jo-Ann Ryan (Ward 5) shared, "With the current low
interest rate environment, the City is wise to be proactive in its bond
management strategy. Directing the realized savings towards our pressing
long-term fiscal obligations makes good sense. The Committee on Finance has an
obligation to our taxpayers to be fiscally responsible and prudent with these
funds. Ensuring that savings are put towards the City's pension is an important
step in that direction."
The resolution was passed tonight by the City Council and
will allow for the City to refund the bonds before the end of the calendar
To learn more, visit us on the web at council.providenceri.gov.