Sen. Raptakis and Rep. Serpa’s bill that caps interest rates charged by Coventry for sewer project passes General Assembly
STATE HOUSE – Legislation (2019-S 0201A / 2019-H 5798A) sponsored by Sen. Leonidas P. Raptakis and Rep. Patricia A. Serpa that caps the interest rates charged by the town of Coventry to ratepayers for the town’s sewer project was passed by the General Assembly today.
“Sadly, this bill was necessary in order to protect the sewer ratepayers of Coventry from the unjustifiable actions of the Coventry Sewer Authority. This project should not be a money-making scheme for the town. We must make sure this is fair to homeowners and that no undue burden is being placed on those who are affected by the sewer expansion project. It’s inexcusable that the homeowner be charged almost twice the percentage the town is being charged as a rate for the sewer construction project loan or bond,” said Senator Raptakis (D-Dist. 33, Coventry, East Greenwich, West Greenwich).
“This is already an exorbitant and unnecessary expense for so many in Coventry and the town should not be charging its residents any more than the actual cost of the project. There are too many families, seniors, and those living on fixed incomes, who are facing true financial harm due to the mandate of this project. This bill will protect the taxpayers from the large interest rates for a project they do not want in the first place,” said Representative Serpa (D-Dist. 27, West Warwick, Coventry, Warwick).
The act would enable the town of Coventry to charge ratepayers of the Coventry sewer project a monetary interest charge in excess of those interest charges actually paid by the town for the funds it has borrowed for sewage works purposes. The excess interest charges shall be a maximum of one-half of one percent and shall be used only for administrative purposes.
The Auditor General recently completed a report at the request of Senator Raptakis, Representative Serpa, and other members of the Coventry delegation in the General Assembly regarding the troubled sewer project.
The report lays out a detailed analysis of the operations and implementation of the controversial sewer project and offers several recommendations to rectify concerns about the program, as well as, recommendations to ensure the project’s short-term and long-term financial viability and success.
In particular, the Auditor General points to the legislation sponsored by Senator Raptakis and Representative Serpa which prohibits the town of Coventry from charging its sewage works’ users more than the interest the town has actually paid for its borrowed funds for sewage works’ purposes.
The report states, “The interest rate charged to homeowners has been higher at 6% than the Town’s actual borrowing costs which approximates 3% to 4%. Legislation has been introduced in the Rhode Island General Assembly to limit the interest rate charged to homeowners on sewer assessments. Aligning the Town’s costs of borrowing with the interest charged on the assessments is both appropriate and necessary to lessen the cost of sewer assessments on homeowners and businesses.”
The bill now heads to the governor’s desk for consideration.
For more information, contact:
Andrew Caruolo, Publicist
State House Room 20
Providence, RI 02903