NEW: Receiver—Decision on Central Falls Bankruptcy Weeks Away
Tuesday, July 19, 2011
Flanders said the city is currently in the process of trying to close a $5 million budget shortfall through negotiations with city workers, retirees, and the city’s creditors. “If any of them tells us to pound sand … then bankruptcy becomes the only other potentially viable choice at this point,” said Flanders, a former state Supreme Court justice.
The city is focusing its efforts on gaining as much as $2.5 million concessions and pension cuts from more than a hundred retired police and firefighters. In a meeting earlier today, Flanders asked the retirees if they’d accept cuts of as much as 50 percent in their annual pension income. Under that plan, even someone earning just $20,000 a year would see their pension cut to $10,000. Flanders said no one would see their income decrease below the $10,000 threshold.
‘The nature of the beast’
“The news was not good,” Flanders said. “Obviously they felt they were being presented with a Hobson’s Choice, where neither option is attractive. Unfortunately that’s the nature of this beast.”
His pitch to retirees: It’s better than “taking a crapshoot” through bankruptcy court and hoping for a better outcome.
“More likely it will be worse than anything,” Flanders said.
Retirees will have about a week to make a decision. After that, he said the city will evaluate whether it will continue on the path it’s on now, or file for bankruptcy. He said that decision will be made by early August.
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