Judge Rejects Special Master's Request for Additional CCFD Loan

During Friday's Central Coventry Fire District hearing held at Providence County Superior Court, Judge Brian P. Stern rejected, at least for the time being, an emergency petition by Special Master Richard Land to enter into a short-term financing agreement with Centreville Bank. The proposed agreement would put CCFD on the receiving end of a drawdown line of credit up to a maximum principal amount of $1.5 million with an interest rate of 4.5%, used to fund the financially struggling fire district while a long-term solution is determined.

If approved, the conditions of the loan, negotiated by Land and Centreville Bank officials, would allow the district to borrow a maximum of $1.5 million in the form of lesser amounts as needed that must be repaid in full by Sept. 1. A final condition noted in Land's request was strongly opposed by Coventry town officials, as it would give Centreville Bank a first priority lien upon the district's fiscal 2012-2013 tax revenues. This would directly conflict with terms agreed upon when the Coventry Town Council on April 9, agreed to lend the district $300,000 without interest when it was facing immediate liquidation.

In response to the Special Master's loan authorization request, Atty. Arthur Read submitted a letter to the court on behalf of the Town of Coventry, urging that Judge Stern deny the request as it would subordinate the $300,000 loan from the Town that caused much tumult amongst taxpayers, many of whom had voted to twice reject proposed budgets and tax levies needed to keep the district operational.

"The Town has done everything which it could to accommodate the Court and the Special Master; no one can say that it has not," read Atty. Read's letter. "No one can say that it has not suffered, politically, as a result of its accommodations to the court."

Read's letter went on to state that the Town would not willingly subordinate its priority lien position and is "offended that its good acts and deeds, made in good faith for the good of a minority, at great political risk should be so rewarded".

"We're not unmindful of the receiver's difficulties and we've tried to do everything we can to assist as these are our constituents also, however we too are in a difficult position," said Read to the court on Friday. "We can be reasonable, but we can't be taken advantage of."

Judge Stern did not approve Land's petition, but will not have it removed from the court calendar in the event that the Special Master requests to have his petition reheard in the future.

As Land currently has approximately $150,000 in the district's bank account and Central Coventry's third quarter fire tax bills are due on May 15, Judge Stern will decide next week whether or not to revisit the petition depending on how much revenue is received through tax payments.

"I'm not going to assign a new date for the emergency petition and will deny it at this point without prejiduce, but I will take it up again if need be," said Stern.