Legislators Seek Investigation of Central Coventry Fire District
Wednesday, January 16, 2013
The problem was so bad that firefighters in the district went weeks without pay and, if the current projections hold true, the district’s taxpayers will soon be asked to foot a tax increase of up to 60 percent to make up the now $2 million hole.
Not surprisingly, Coventry’s representatives in the General Assembly want answers for their constituents and, yesterday, they made a plea to the Attorney General for assistance.
In a special request made by Senator Nichols D. Kettle, and signed on by Senator Leonidas P. Raptakis and Representatives Michael W. Chippendale, Lisa P. Tomasso, Jared R. Nunes and Patricia L. Morgan, the Coventry legislative delegation asked the state to begin a criminal investigation into the district’s handling of its pension fund and its “failure to make its or employees’ payments into the Municipal Employees Retirement System between December 2011 and September 2012.”
“The people of the district as well as the fire personnel deserve an answer as to where that money has gone,” Kettle said in a press release. “The fire district is currently in receivership and if criminal actions led to the current situation, we need to know.”
No choice but to seek help
For Kettle, there was no alternative following a January 3 meeting with the town’s receiver in which the discussions centered around possible fraud regarding a loan the district got with Centerville Bank.
“They went to the Coventry Credit Union and tried to get a loan that was not in anticipation of tax revenue and that loan was denied and then they ended up getting one from the other local bank, Centerville Bank,” Kettle said. “We’re not sure who actually went out and got that loan, whether it was the chief who acted alone or a board member who acted alone or whether it was the actual board that made some kind of official action so that right there wasn’t legal.”
Kettle said the loan was obtained because of overtime costs in the district and that, during the meeting, the receiver also indicated a potential issue with the pension fund.
“Basically the receiver is looking for a 60-percent tax increase in February in a special financial meeting,” Kettle said. “He was also discussing the pension fund, as a part of MERS, [and said] the employee’s contributions were not paid along with the district’s, which is illegal so we decided that it would be best to actually get some answers for the taxpayers who are being threatened with a 60-percent tax increase and could have a loss of their fire protection services.”
A dire situation
According to multiple sources, the district is currently facing a $2.2 million dollar deficit
“The Central Coventry Fire District is in a dire financial situation right now,” Chippendale said. “There is a special master assigned to the district to try to salvage essentially the entire department because it is completely fiscally unsustainable. Iit just can’t even go forward from this point.”
Chippendale said the problem stemmed from poor accounting practices and a lack of accountability.
“Regrettably, whenever there’s these small entities, like a fire district … there is no oversight,” he said. “These are mostly self-governing bodies and if those charged with governing themselves are inclined to potentially not follow the rules, either maliciously or through negligence, something like this can very easily get to this point.”
According to Chippendale, the legislators believe the problem begin with a “simple malfunction or simple misunderstanding of some financial revenues” that gave those in charge a “false impression that there may have been more funds available than there actually were.
“It dominoed from there,” he said.
The root of the matter
Because the legislators don’t know the specifics of what went wrong and who is to blame, they’ve asked Kilmartin to step in.
“We want to know what the specifics were because this may have been a simple mistake,” he said. “And if that’s the case then we need to work together to get to the best solution for the residents of that fire district but if it’s much more than that, then the Attorney General will have to take that matter from there.”
The Central Coventry Fire District has a budget of approximately $6.6 million, Chippendale said, and any attempt to plug the projected shortfall would also have to take into consideration hiring changes and policies put in place in previous years that relied on incorrect information.
“There are extra staff hired based on the false assumption that they had more money than they really did so it’s a two-pronged issue,” he said. “The two million dollars, it’s the two million dollars itself and second of all it’s the outcome of the decisions made thinking they had two million more than they did.”
Digging for the truth
Chippendale said that, as legislators, he and his fellow General Assembly members can’t compel the district to hand over financial documents to get to the root of the problem but, because the Attorney General’s office can, they’ll “be relying on him” to uncover the truth.
“I think we’re definitely looking for answers,” Kettle said. “I think the taxpayers and the firefighters deserve that, especially with everything on the line but if criminal wrongdoing happened, I would hope that criminal charges are in fact pressed because will it be negligence or in fact some wrongdoing? They need to pay for it, whoever did it and if no willful harm was done and we find that nothing criminal was done, then that’s OK too but I think the people of the district and the taxpayers that I represent deserve some answers.”
“I don’t wish to learn that there was criminal activity, that would not be good for another town in Rhode Island to have to deal with that,” Chippendale added. “I just want to get the answers that will help us work with the district get back on a sure footing because the last thing we want to see is that station shut down. It would do a disservice to the residents of that fire district. We want the Central Coventry Fire District functioning in a self-sufficient, sustainable financial way and also to do so without compromising the health and safety of the residents of that district.”
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