COVENTRY — The town’s General Assembly delegation has officially sent a formal request to the state’s Auditor General asking for a review of Coventry’s sewer fund.
The letter, sent to Dennis E. Hoyle on January 9 and signed by Senators Lou Raptakis, Nicholas Kettle and representatives Michael Chippendale, Patricia Morgan, Bobby Nardolillo, Jared Nunes, Sherry Roberts and Patricia Serpa, has also been supported by two members of the Coventry Town Council, Karen Carlson and Debra Bacon.
“We are writing this letter to make you aware of significant issues surrounding the financial condition of Coventry’s Sewer Fund as well as specific violations of Rhode Island State Law related to actions of Coventry’s Town Administration,” the letter reads.
It cites a comment from Coventry Town Manager Graham Waters made during a Dec. 11, 2017 town council meeting. Waters said at the meeting that he and the finance director were working with the town’s financial advisor and bond attorney to return all unused borrowed funds to the Rhode Island Infrastructure Bank for the sewer projects that were stopped with a 120-day moratorium back in October, and to “discuss the possibility of refinancing our existing debt.”
He said the returning of funds was projected to provide immediate relief to the sewer fund of at least $80,000 a year in debt service. The sewer fund had been running at an estimated $2 million to $2.5 million deficit to the general fund. The fund is also operating at a loss of about $800,000 for the current fiscal year, according to Waters’ statement.
The letter from the delegation notes that on May 1, 2017 the town council and manager approved a loan with the All American Investment Group, LLC for $750,000. The loan utilized the Town Hall Annex building as collateral. In June of 2017, it continues, the town’s sewer debt was $29,161,149.
“Per the Facilities Plan Update prepared by Weston & Sampson dated October 2016, approximately 97 percent of the residences in Coventry still rely on onsite wastewater treatment systems for treatment and disposal of wastewater,” the letter states. “How is it possible for the Town Administration of the seventh largest municipality in the state of Rhode Island to get into such a significant financial debacle for only providing sewers to approximately 3 percent of the town?”
The letter also says that per Title 45 of Rhode Island General Law, assessment money collected by the town is not to be “commingled” with funds of the municipality. Coventry Town Manager Robert Thibeault has said in the past that the sewer fund does not have its own independent bank account.
“Clearly, the town’s finance director is commingling general tax revenues with the sewer assessments and related revenues.”
They claim the town never disclosed Coventry’s Inter-Municipal Agreement with West Warwick and estimate that Coventry’s outstanding loan obligation to West Warwick as of June 30, 2017 was $6,259,568.62. The letter also takes up issue with the town’s recent approval of two change orders on sewer work that had already been completed.
“One has to question why a change order from January 2017 was brought to the Town Council for approval approximately 10 months after the change order was received, and 7 months after payment was already made to the vendor,” the letter says.
They have also requested an audit of the town’s department of public works.
“The actions and decisions of past and current Town Councils and Town Administrations have placed significant financial hardship on the residents of Coventry.”
Attached to the letter signed by the delegation is another letter, also dated Jan. 9, signed by councilwomen Carlson and Bacon in support of the audit request.
“As two members of the Coventry Town Council, we respectfully request that your office conduct a full audit of the Sewer Fund and the Coventry Department of Public Works,” they said.
Reached for comment Thursday afternoon, Waters said the town “has nothing to hide” and welcomes the proposed audit.
“I encourage the Auditor General to provide the Town with a audit of its sewer fund,” said Waters. “Hopefully the delegation follows through and the Auditor General does an audit. The Town has nothing to hide with its sewer finances and appreciates the help of its delegation in finding solutions to the known problems.”
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