Sen. Raptakis and Rep. Serpa’s bill that caps interest rates charged by Coventry Sewer Program becomes law
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 has become law after its passage by the General Assembly.
“These bills have given relief to the sewer rate payers directly, and to the taxpayers indirectly, of the town of Coventry in the thousands of dollars by capping the interest rate to the same rate as borrowed from the town and only a small fraction for administrative costs,” 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 law 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).
“Due to the unwavering support of Senator Raptakis and Representative Serpa over the last two years, these interest rate bills will save each ratepayer of Coventry impacted by this astronomically expensive sewer project thousands of dollars over the life of the 20-year sewer assessment loan. The residents of Coventry are extremely fortunate to have Senator Raptakis’ and Representative Serpa’s support. If it was not for their involvement, many residents would be slapped with a 20-year loan at 6% interest - which is approximately 3% more than the rate at which the Town had obtained the funds from the bank for the current projects - on top of having to pay the principal balance of approximately $20,000 or more for the sewer assessment, the thousands of dollars for the tie-in costs, as well as the costs to decommission the septic system or cesspool, and then once connected, the sewer user fees. This sewer project is not affordable and the lack of oversight related to the uncontrolled spending has negatively impacted our community’s credit rating. Residents need to continue to monitor the actions of our Town Council and Town Administration as it relates to this project. Just would like to sincerely thank Senator Raptakis, Representative Serpa, and the Coventry delegation for stepping in to protect the taxpayers,” said James Leblanc, a local critic of the sewer program.
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.”
For more information, contact:
Andrew Caruolo, Publicist
State House Room 20
Providence, RI 02903