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Construction Reimbursement FAQs

The RI program covers up to 50% of eligible costs, which include the actual construction costs for a new or renovated facility as well as architect’s fees, building consultants, furnishings and equipment, land acquisition, site preparation, landscaping, parking lots, and even the interest on the loan the library, city or town takes out for the project to cover the state's share.

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Allowable costs are established by the Library Board of Rhode Island and included in the regulations in Section 1.8.

The project is monitored throughout construction, and field notes and financial reports are provided to the state's Central Business Office for the final project audit, which determines the actual reimbursement payments and payment schedule.

The construction agreement specifies the maximum amount the state will reimburse, plus the interest incurred if the library or municipality borrows the state's share of the project cost. If a project runs over budget, the library or municipality must fund the additional expense; if the project comes in under budget, the reimbursement will be adjusted accordingly, as determined by the audit.

Reimbursement payments begin in the state fiscal year following the completion, acceptance and audit of the construction project, which is conducted by the Department of Administration Central Business Office. Usually the library or the city or town borrows the state share through mortgage, bonds or other loan instruments. The Central Business Office and OLIS participate in the development of the loan agreement, assuring the lender of the state's participation in the project and agreeing to the total amount of capital and interest to be reimbursed and to the terms of the mortgage or other loan.

Reimbursement payments to libraries, cities or towns are extended over a twenty-year period and are timed so that payment is received just before payment on the mortgage or bonds is due, as any interest earned on funds deposited must be credited to the State of Rhode Island. Each year, one-twentieth of the principal is paid, plus the interest incurred in borrowing the state share. The interest incurred in borrowing the state share during the construction period until state reimbursement begins is usually paid during the first year of reimbursement payments.