New Central Falls receiver would guide recovery

PROVIDENCE, R.I. (AP) — The state receiver in charge of the financially troubled city of Central Falls said Thursday he will step aside only after a "plan of recovery" is in place to get the city back on track.

Retired state Supreme Court Justice Robert G. Flanders Jr. said he hopes to come up with that plan by negotiating with unions and other groups but that bankruptcy — a rare step for municipalities — remains an option.

Gov. Lincoln Chafee said recently that Flanders, who was appointed in February, could be replaced with someone more versed in municipal management. Flanders said that transition has been expected all along.

"What the governor was signaling is that at the point where the plan of recovery is achieved, at that point there would be a transition to a manager-receiver, if you will, who would be there as much as required to implement that plan of recovery," he said.

That person might, for instance, be a former town manager.

The city of 19,000, north of Providence, faces $80 million in unfunded pension and benefits obligations and an estimated $25 million in deficits over the next five years. The state took it over last year in an attempt to turn it around, stripping the mayor of his duties in the process. A report by Flanders' predecessor, Mark A. Pfeiffer, warned of a "complete fiscal collapse" and Flanders himself has said that time is running out.

The city has laid off workers and last week closed its library and community center to save money.

Flanders said negotiations with unions are continuing. He characterized the discussions to date as "encouraging" and said they represented a good start. He is seeking concessions from unions that he called "big asks."

Flanders did not offer a timetable for having a plan of recovery in place but suggested it would be clearer within weeks what course the city will take.

The larger turnaround will take much longer.

"It's going to take time to have a complete recovery," Flanders said. But "the plan of recovery starts with a debt reduction plan and a balanced budget, and that's where we're headed.

"There's great hope for a renewal of the city and a return to normalcy and to better times," he said. "Either way, through negotiation or through bankruptcy, the idea is to relieve the city and its residents of this crushing debt burden they've been laboring under."

Pfeiffer, the first state-appointed receiver, said the challenges of the job do require different abilities at different times.

"The situation evolves," he said. "You reach points where one skill set might be more suited than another. Maybe the person there is the best person, maybe you want someone with a different skill set."

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Associated Press Writer David Klepper contributed to this report.