OFFICE OF THE CITY SOLICITOR MEMORANDUM TO: Xay Khamsyvoravong, Mayor and Members of the Newport City Council ce: Joseph J. Nicholson, Jr., City Manager Laura Sitrin, Interim City Manager/Finance Director FROM: Christopher J. Behan, Esq., City Solicitor CB DATE: August 21, 2023 RE: School Building Committee Item #12 on your docket for the meeting on Wednesday, August 23, 2023 is a memo from my office to you concerning the legal relationship between our municipal and school governments, as well as the City Council and School Committee. I have received a number of communications from councilors concerning the Rogers High School construction project, whether they involve the so-called “dirt pile” or the actual construction of the new school itself. ‘This memo is intended for informational purposes only to provide you with information concerning legal rights and responsibilities of the parties and is not subject to attorney/client privilege. As a result, I am not providing you with specific legal advice on a particular issue. We start off with recognizing that elementary and secondary education is governed by Title 16 of the General Laws of Rhode Island. This legislative scheme is set forth primarily in Title 16 and is evidence that the State of Rhode Island has pre-empted any and all local governance that is inconsistent therewith. In fact, our charter and ordinances have very few provisions when it comes to schools, other than with respect to the election of school committee members, the filling of vacancies on the school committee and the compensation of school committee members. However, there is one major area that municipalities still retain the ability to govern and control and that is with respect to the funding of the schools, albeit within certain restrictions imposed by the General Assembly. Municipalities as a general matter must establish and maintain a sufficient number of schools in convenient places under the control and management of school committees and under the supervision of the Rhode Island Board of Education. See 16-2-2(aj(1). As a general matter, the entire care, control and management of all public school interests is vested in the school committee. See 16-2-9(a). School committees have the responsibility for the care and control of local schools and to provide for the location, care, control and management of school facilities andequipment. See 16-2-9(a)(5) and (8). School committees have the power to enter into contracts. See 16-2-9(a)(18). Once we provide municipal property for the use of schools, the school committee is charged with the entire care, control and management of the school property. As a result, a municipality is pre-empted from attempting to limit or interfere with the power granted to the school committee to care, control and manage public school facilities. Does this mean that a municipality as a result is divested of any and all ownership interests in the property, other than as title owner? There may be situations in which a municipality could assert ownership rights such as when the school committee or district is involved in material and significant illegal activities at the site. For example, with respect to the dirt pile, if it was found that activities were taking place in material violation of DEM permits resulting in a significant danger to the public health and welfare, then the City, as owner of the property and responsible party, could take legal action. Questions have been asked about the construction of the new Rogers High School and financing of the same. It is important to remember that this project was commenced seeking reimbursement of construction costs from RIDE pursuant to the Necessity of School Construction application process. See Sections 16-7-35 to 16-7-47, GLRI and also Board of Education Regulations 200-RICR-20-05-4 (school construction regulations). Under the school construction regulations, it is clear that school districts, and not municipalities, may apply for and obtain approval for a project. Only projects undertaken at school facilities under the care and control of the school committee and located on school property may qualify for reimbursement. See Section 16-7-41.1. It is apparent from both the statutory enabling legislation as well as the school construction regulations, that this is an application process which is not only made by but controlled by the school district. There are certain regulations that do require the show of municipal approval (Letter of Intent, Stage 2 Application) at certain stages of the application process which the Council did provide. The application and the eventual reimbursement of costs was dependent on the City Council authorizing a ballot question and also the approval by the electorate for the issuance of bonds for the construction of the school. The School Committee is the legal entity that entered into the various contracts that were required for the construction of the school. The City of Newport municipal government is not a party to these contracts and as a result, does not as a general matter, have the ability to manage or control the construction process. ‘There have been questions raised about the School Building Committee (“SBC”) and what, if any, role the City Council and municipality play with respect to the same. The school construction regulations provide that the district must submit names and backgrounds of the members of the SBC that will be formed in accordance with the provisions of the district’s local charter and/or bylaws. A SBC has not been created under our charter or ordinances. Such committees may have been formed in the past for school construction projects ad hoc. The school constructionregulations require that at a minimum the committee must consist of eight (8) people with enumerated required backgrounds. See Regulation 200-RICR-20-05- 4.9.2 A2aand b. When looking at any Necessity of School Construction project, it is important to know that RIDE has extensive oversight and approval over the entire process. Pursuant to a communication from the Superintendent's office, the Council, at a Council meeting held on June 12, 2019, approved and authorized the Mayor to sign a Letter of Intent from the school district for the Necessity of School Construction application. With this communication, the School Department submitted correspondence to RIDE setting forth the membership of the SBC along with the background for cach member. It appears there was constructive approval of the proposed SBC from the Council at the time. ‘The regulations also address the other involvement the SBC has in the application process, including after approvals are provided by RIDE. Questions have arisen over who controls appointments to the SBC including who appoints the chair of the committee. The regulations appear to be silent with respect to the same since they assume that there may be a SBC existing under charter and local ordinances. Since the Necessity for School Construction application process is submitted by the district and not the municipality and the entire process including construction is controlled by the schools and RIDE, the answer would most probably be that the schools would control the appointments. The municipality is protected based on the required membership which includes municipal officials. In the absence of direct authority on this issue, the respective representative bodies and administrations can certainly discuss how to deal with this issue. Finally, there have been questions brought up concerning the financing for the school construction project, including questions concerning the bond issuance, the premiums on the bonds and also any cost overruns over and above available financing approved by way of the bonds and original bond premium, The bonds authorized to be issued by the City for the Rogers construction total $98,500,000. ‘The RIDE Memorandum of Agreement on School Construction approved new construction /major renovations in the amount of $98,862,667 for Rogers. The City also received a significant original issue bond premium upon the issuance of the bonds in or about March of 2022. It was determined that the bond premium could be used for construction costs relating to the voter approved projects. By resolution read and passed on February 16, 2022, the Council authorized the use of any original issue bond premium to be used toward the cost of “add alternates” for the Rogers project. These “add alternates” included the automotive and cosmetology programs, the central office building and the track and premier athletic field, in addition to any other “add alternates” or COVID escalation costs recommended by the School Building Committee.A question arose as to whether the Council could in any way modify this Resolution. Laura Sitrin points out that the bond premiums along with the bond proceeds have been escrowed together by the Rhode Island Health and Education Building Corp. (‘RIHEBC’) for the project. This resolution of the Council may not be reversible or modifiable as a result. Questions have arisen as to who is responsible for so-called cost overruns over and above bond and bond premium funding as well as RIDE approved amounts subject to reimbursement. Again, it is my understanding that all disbursements for the project are reviewed by RIDE and City staff and are paid out of the escrow held by RIHEBC. The schools need to stay within the RIDE approved project costs for reimbursement purposes as well as stay within the bond and premium funds available, If for some reason the schools incur costs over and above these amounts, then the schools would be responsible for payment of the same and the City would not, at least on a legal level, be responsible for the same.