State law provides for reimbursement funding for approved library construction projects. Reimbursement payments begin in the state fiscal year following the completion, acceptance and audit of the construction project. This usually means that the library or the city or town must borrow the state share through mortgage, bonds or other loan instruments. The reimbursement payments are spread over a twenty-year period; the term of the mortgage or bonds should be developed with this in mind. Reimbursement payments to libraries, cities or towns are timed so that payment is received just before payment on the mortgage or bonds is due. This is done so that no interest is incurred on the state reimbursement funds received, 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.
The need for a library construction project is determined locally, and should be reflected in the city or town's Comprehensive Plan (see Appendix G). The library indicates its intent to apply for state construction funding to the Office of Library and Information Services in the biannual Public Library Facilities Survey and Capital Budget Forecast. The library can also send a letter of intent, indicating the estimated cost of the project, and the projected starting and completion dates. The Office of Library and Information Services then assigns priorities and makes a determination regarding projected state participation in the project in conformance with the Regulations (see Section 2) and Priorities (see Appendix F) established by the Library Board of Rhode Island. OLIS then notifies the library regarding the projected level of state share and the projected state fiscal year in which reimbursement payments would begin, based on the proposed timetable submitted by the library and projected reimbursement funding. A formal agreement between the Office of Library and Information Services and the library is not signed until all project plans and specifications have been reviewed and approved, and the project is ready to go out to bid.