2008-10-16 / Front Page

Town's financial position sound

By Sam Bari

Town Administrator Bruce Keiser and Finance Director Tina Collins gave an update on the town's financial situation at Monday night's meeting in light of the recent national banking crisis.

The financial disclosure was prompted by Councilman William Kelly, who, in a memo to the Town Council, town administrator, and Collins, said that in light of the national financial situation, he believed it important to share with the community the status of the town's financial position.

Keiser explained that the town operates on three sets of funds: Operating cash reserves from tax payments and other revenue sources; designated and undesignated fund balances that total $7 million; and a Police Pension Fund that totals $4.5 million.

Collins said that the Bank of America investment division is the town's financial advisor. She explained that the BOA has been the bank of record for more than 15 years and that it is a major fi- nancial institution with an experienced, diverse staff, and has a branch on the island for deposits. She said that the town also does business with BankNewport and Washington Trust to involve local financial institutions when it is in the town's best interests.

Keiser said there was no change from the 2007 first quarter collection rate and there was no increase in delinquencies from either the commercial or residential sectors during that period.

He said that the Police Pension Fund is invested in a balanced return portfolio of equities, fixed income, and cash. Due to market conditions, the fund is down 7.3 percent, Keiser said. If the market conditions remain volatile, BOA will maintain a higher cash position. But the plan is conservative with high quality investments, he said.

Keiser and Collins explained that the finance director manages the daily operating cash according a drawdown schedule for bills, payroll and school payments. Excess cash is invested in money markets and high grade commercial paper, typically 30-day notes. They said that the designated and undesignated fund balances of $7 million are also kept in commercial paper.

Kelly thanked and praised the administrator and finance director for their expertise and for disclosing the town's position to island residents. He said he was sure that their efforts were appreciated.

Steel pier bid awarded

The Town Council unanimously approved W.H. Peppes General Contractor, Inc. to make the repairs and improvements to the steel pier at East Ferry.

The contract was awarded to Peppes at Tuesday's Town Council meeting for an amount not to exceed $214,340. Peppes is the same contractor that completed the Memorial Square improvements at East Ferry, which included the original curbing and railing detail.

Commissioner Robert Sutton cautioned the town to make sure that the contractor was responsible for the concrete being poured during winter months. Sutton worked with Peppes on other projects and praised his work. He said that Peppes is an excellent contractor, but he does not handle the concrete work himself. He oversees it, he said.

"We just have to specify that the contractor is responsible for the work being done to the town's satisfaction," Sutton said. "If Peppes sub-contracts the concrete work, which he will do, whoever pours the concrete has to make sure that the temperature is warm enough during the winter months. If it isn't cured properly, it won't last," he added.

Electricity proposals rejected

Keiser reported that a memo from Dan Beardsley, executive director of the Rhode Island League of Cities and Towns, who was approved by the Rhode Island Energy Aggregation Program (REAP) Executive Board and Committee to negotiate an energy supply contract on the league's behalf, rejected all bids to supply electricity to league members.

Keiser said the six bids that were received did not meet the specifications to give a fixed price per kilowatt hour for even one year, so all bids were rejected. "We are on the open market for a few months," Keiser said.

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