NEW: Central Falls Receiver: Merge City with Pawtucket
Friday, December 17, 2010
Despite his efforts to balance the budget in 2011, the receiver, retired Superior Court Judge Mark Pfeiffer says the city faces looming deficits for the foreseeable future, approximately $5 million for each year from 2012 to 2016, totaling $25.8 million. The city still has a lingering $2.1 million deficit from 2010 that Pfeiffer says the state will need to help close.
“Given the forecasted deficits, it is readily apparent that additional tax increases and reductions in expenditures alone cannot solve the fiscal crisis that exists,” Pfeiffer writes in his report. “Ongoing structural problems make it imperative that Central Falls cease operating as it has in its recent past.”
He identified four “structural problems” behind the deficits: at least a $46.6 million unfunded pension liability, the restrictions of union contracts, a loss of revenue from the Wyatt Detention Facility, and a dysfunctional culture of governance.
Receiver: Pawtucket could benefit from merger
Pfeiffer recommends annexation with Pawtucket, instead of the other two neighboring communities of Lincoln and Cumberland, saying it would be easier for Pawtucket to absorb Central Falls. “The City of Pawtucket could more easily assume responsibility for serving the residents of Central Falls, as its service population would only expand by 26 percent in this scenario,” he writes.
He notes that both communities are cities with a mayor form of government and already work together in a number of areas.
He admits that on first blush some might think Pawtucket “would have little interest in considering the prospect of annexing a city that is burdened with fiscal insolvency issues.” But he says there could be some advantages—he says the annexation would make Pawtucket the second largest community in the state, bringing it more political clout and potentially increasing state aid to the community.
Failing annexation, Pfeiffer recommends two other options: drafting a new city charter or regionalizing Central Falls’ services with surrounding communities.
In the event that the fiscal and structural reforms he proposes don't pan out, Pfeiffer says the city may have to file for Chapter 9 bankrupcty in a worst case scenario.
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