Summary of SB 3242 (Rhode Island, 2026) – Chariho Regional School District Bond Authorization
Purpose and main objective
- Authorizes the Chariho Regional School District to finance the construction, furnishing, and equipping of an elementary school that serves Charlestown, Richmond, and Hopkinton.
- The project may consist of one or more buildings on a single campus, plus improvements at the Switch Road Campus (including but not limited to land acquisition, demolition, design, health and safety upgrades, playgrounds, landscaping, paving, etc.).
- The financing would be through the issuance of bonds and/or notes not exceeding $116,000,000.
- Bond issuance is contingent on state housing aid being available at a reimbursement rate or state share of at least 61% at the time of issuance, with the possibility that this rate could rise to 65% upon project completion.
Key provisions and mechanics
- Authority: The Chariho Regional School District, historically authorized to issue general obligation bonds, would have expanded authority to issue up to $116 million for the described project.
- Bond structure: Bonds and notes may be issued in various forms (serial bonds, term bonds, zero coupon, capital appreciation, compound interest, or combinations). Repayment would occur in annual installments of principal, with terms stretched from a first maturity within 5 years to a last maturity no later than 30 years after issuance.
- Debt treatment: The principal amount for debt limits is based on the original principal, and any principal appreciation (post-issuance) is treated as interest for debt-limit calculations.
- Use of proceeds: Proceeds would be allocated to the school project costs (construction, furnishings, equipment, land, demolition, design, health/safety work, playgrounds, landscaping, paving, incidental expenses) or to pay debt service on temporary notes, advances, costs of issuance, or to finance capitalized interest. Proceeds may be used in conjunction with federal/state aid and other funds.
- State housing aid requirement: No bonds may be issued unless a Department of Elementary and Secondary Education (RIDE) confirmation is received that the project will receive at least 61% state housing aid for debt service at the time of issuance. The rate may increase to 65% at project completion if incentives under certain state statutes (Sections 16-7-39 and 16-7-40) are awarded.
- Anticipation notes: The district may issue notes in anticipation of bond issuance or anticipated aid, with specific limits (not exceeding the bond amount, and terms typically up to 5 years), and provisions for refunding and investment of note proceeds.
- Investment and safeguards: Proceeds and available funds may be deposited in approved banks or government obligations. Investments aside from Government Obligations must be insured or collateralized at 102% of the deposit value. Earnings from investments may be treated as district revenues.
- Debt security and town treatment: Bonds/notes would be obligations of the Chariho Regional School District, not counted against the individual towns’ debt limits. The district must annually appropriate funds to pay principal and interest until repayment.
- Administration and compliance: The treasurer and chair of the regional district committee would sign and execute necessary documents and comply with federal tax and securities laws, including continuing disclosure obligations.
- Duration and extinguishment: The authority to issue bonds/notes can be extinguished by resolution seven years after the act’s effective date.
- Political process and election: The authorization is subject to voter approval. The question would be placed on the November 3, 2026 election ballot for Charlestown, Richmond, and Hopkinton, with the following language:
- Ballot form: Shall the Act entitled “AN ACT AUTHORIZING THE CHARIHO REGIONAL SCHOOL DISTRICT TO FINANCE… NOT MORE THAN $116,000,000 BONDS AND/OR NOTES THEREFOR, SUBJECT TO APPROVAL OF STATE HOUSING AID AT A REIMBURSEMENT RATE NOT LESS THAN 61% AT ISSUANCE (MAY INCREASE TO 65% AT COMPLETION)” be approved?
- Explanatory note: Projects designed to meet Northeast Collaborative for High Performance Schools standards to promote safety, energy efficiency, and healthy learning environments.
- Effective dates: Sections 13 and 14 (ballot authorization and effective date mechanics) take effect on passage. The remainder of the act takes effect upon approval of the voters in the regional district.
Affected entities and impacts
- Affected district: Chariho Regional School District (serving Charlestown, Richmond, Hopkinton).
- Local governments: The three member towns would participate in the project’s ultimate financing through their regional school district framework; individual towns would not be counted as debtors for the bonds issued under this act.
- Students and staff: Construction and modernization would affect elementary-level facilities, potentially improving safety, energy efficiency, learning environments, and capacity for Charlestown, Richmond, and Hopkinton students.
- State funding: The project relies on state housing aid (not less than 61% at issuance, potentially 65% at completion) to justify the debt issuance and ensure that state participation covers the majority of the project costs.
Timeline and key dates
- Introduction: May 1, 2026.
- Ballot date: November 3, 2026 (subject to election timing and local procedures).
- Potential rate/aid adjustments: Eligibility for incentives leading to an increase in the state aid percentage at project completion (per state laws referenced).
Notes
- The act explicitly ties bond legality and issuance to the availability and level of state housing aid and allows the rate to improve if incentives are earned.
- The proposal includes standard municipal bond protections and investment safeguards, with a focus on energy efficiency and high-performance school standards.
If you’d like, I can provide a side-by-side comparison with similar prior Chariho school projects or draft a one-page explainer for voters.
