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Council presses administration on bond counsel, underwriters and use of bond premium
Summary
Councilors questioned why the city used long‑standing bond counsel without a competitive procurement, sought underwriter fee details and clarified how a $3.6 million bond premium was treated in the recent $36 million tranche.
Councilors spent a sustained portion of the special meeting pressing finance staff for details about the April infrastructure bond issuance, the selection of bond counsel and the compensation paid to underwriters.
Council member (speaker 9) said he had submitted repeated questions to the administration about who performed bond counsel and how those contracts were selected. “I asked 4 times and I received not even the courtesy of a reply,” he said, arguing the council should be consulted on large legal contracts tied to a near‑$100 million program. Director Jim Nolan responded that the city uses a statutory exemption for procurement of legal services (cited in the hearing as R.I. law “45 55 14”) and described Karen Grandy of Trautman as a long‑standing bond counsel whose work the city has used across multiple school projects.
Council members also asked about market fees and how underwriters were chosen. Nolan said Hilltop Securities, acting as financial adviser, ran a competitive procurement for the underwriter mandate; he named Raymond James as manager and Wells Fargo as co‑manager and said underwriter fees and expenses summed to about $136,000 for the recent sale. Nolan added that the April transaction produced a bond premium; depending on how the issue was structured, the city’s borrowing was reduced and the premium was not fully available as surplus. Nolan stated the recent premium associated with the $36 million tranche was about $3,600,000 and explained how the city applied that sum in the issuance structure.
Councilors said they were not contesting the competence of individual firms but pressed for more routine transparency in vendor selection and for future briefings before major transactions. Nolan said staff will review procurement and disclosure practices and “take that under advisement.”
The exchange ended without a formal procurement decision; councilors asked staff to provide written documentation and to outline procurement steps and fees before the second reading of budget items that rely on debt service assumptions.
