During a Central Coventry Fire District status update in Kent County Superior Court on Friday, Judge Brian P. Stern asked Special Master Richard Land to share with the court the latest progress made regarding the district's attempt to avoid liquidation.
Land explained that as of Friday, he had $42,200 in cash on hand to fund district operations and had received the second of two $150,000 loan checks from the Town of Coventry that morning. Apart from the initial loan check from the Town, Land also recently received approximately $156,000 in tax payments and rescue run recovery funds that have been used to pay ongoing expenses. He said that since March, CCFD has continued to operate, but with a significantly reduced staffing structure including a decrease in minimum manning, from 10 employees to 8 and the closure of two of the district's five fire stations. Land told Coventry Patch that a complete list of firefighter concessions that have been made up to this point is being compiled and will be available next week.
In addition, Land, along with Chief Andy Baynes, is currently working on a course of action to return the district's controversial ladder truck that still holds a $700,000 balance. He is also moving forward with the process of holding tax sales within the district that would bring in additional revenue.
Judge Stern acknowledged that several pieces of legislation have been recently introduced and heard by the RI General Assembly in attempts to keep the district afloat, including H 5176A - passed by the House on April 25 and Senate on May 2 - which, if signed by Gov. Chafee, would keep CCFD in business using the previous year’s budget while the district works to develop a new budget, new tax assessment and collection of taxes by Sept. 1. Land explained that if the bill is approved, new tax bills will be sent to Central Coventry residents using a single tax rate of $2.86 per $1,000 of assessed value, based on the Dec. 31, 2011 valuations. He addressed the fact that a single rate will result in a significant tax reduction for commercial property owners who were last taxed at a rate of $3.62, however both commercial and residential tax rates are offset with the reduction in assessed values throughout Coventry, including a residential tax base drop of approximately 17% and a decrease in commercial valuation of about 7%.
Proposed legislation and charter changes, if approved, would enable the fire district to re-institute a multi-tiered taxing authority. Rep. Scott Guthrie, who introduced H5176A, explained to Judge Stern that the three additional fire districts in Coventry, along with other districts across the state, will be asked to propose resolutions for charter changes of their own that would allow for similar tiered taxation.
"We've already spoken with leadership and we have a pretty substantial commitment to pass tiered tax legislation, including state oversight, mandatory accordance and a standard reverter clause, and that legislation should hopefully be drafted by Wednesday," said Guthrie.
"If the goal is for this district is to move forward in some form, I think that a multi-tiered rate will need to be revisited and additional legislation will be necessary," said Land. "Under a multi-tiered taxing authority, we may be able to reduce the residential rate and still pay back debt in a reasonable time."
If H 5176A becomes law, Land plans to include a letter to residents that will accompany the tax bills and detail the rate changes and their implications as well as address a possible payment grace period for taxpayers to avoid penalties and interest. The act of electing a new Board of Directors for the fire district will also be addressed in the letter, as the process needs to begin as soon as possible considering the district's charter requires approximately 90 days between when a resident submits their petition to run for a Board seat and the public meeting at which taxpayers would elect Board members.
Land went on to say that if the bill becomes law and he continues to fine-tune the fiscal 2014 budget, he predicts an operating budget reduction of about 20% (in excess of $1 million in savings). However, due to revenue from the past tax year's tax sales being brought current and the non-renewal of SAFER grant funds received in the past; approximately $400,000 in revenue collected in prior years is not expected for fiscal 2014.
"This legislation would allow us to get through this fiscal year and should give us a balanced budget," he said. "We're also working with Centreville Bank on a tax anticipation basis, to which they've stepped up to the plate and agreed to advance the special mastership additional funds to allow enough cash-flow to operate."
Judge Stern stressed that despite the bill only needing Gov. Chafee's signature, Land should still plan for the event that it does not become law and resume formulating plans for emergency coverage from surrounding fire districts.
According to Land, If the governor vetoes H 5176A, he would only be left with enough funds to keep the fire district operational until next Thursday at the latest.
If this outcome prevails or if taxpayers refuse to pass a budget by Sept. 1, Sens. Lou Raptakis and Nick Kettle have introduced bill S 0856, referred to as the "Lifeboat Bill", that if passed, would allow amendment of the Coventry (Anthony), Western Coventry and Hopkins Hill fire districts' charters, enabling officials to redraw district lines for updated fire and emergency coverage in the absence on CCFD. Rep. Jared Nunes has introduced a House companion bill mirroring the intent of S 0856.
"The question of what is going to happen after September 1 is a major concern on the Senate side and we have a bill, S 0856, that will probably be voted on next week, that would be sort of an insurance policy," said Sen. Raptakis. "There is the danger of voter apathy or voter anger and this bill would be put in place in case the department gets liquidated or in case the voters refuse to pass a budget late in the summer or early fall. This is very important because not only could it happen this year, but it could also happen in the future."
Stay with Coventry Patch for additional coverage of the ongoing CCFD debacle.