STOCK MARKET WATCH -- Monday, 16 January 2012

[Demeter]

36. Troubled RI city in receivership loses democracy

http://news.yahoo.com/troubled-ri-city-receivership-loses-democracy-164854804.html

When the state stepped in to take over financially struggling Central Falls in 2010, Rhode Island's smallest city lost something fundamental: its democratic government. Mayor Charles Moreau would be forced to give back his key to City Hall, and the City Council was relegated to advisory status — unsure for months whether it was even allowed to convene. "They're being governed without elected representation," state Sen. Elizabeth Crowley said of Central Falls' 19,000 residents. "That flies in the face of the democratic principle that our country is founded on, not only our little city. Maybe we should have a tea party and dump some tea in the Blackstone" River. Crowley, a Democrat and lifelong Central Falls resident, uses a twist on Abraham Lincoln's Gettysburg Address to describe government there, under a state-appointed receiver, these days: "of the receiver, by the receiver and for the receiver." That receiver, former state Supreme Court Justice Robert G. Flanders Jr., is often criticized for sweeping like a dictator into a city he doesn't know, where he doesn't live and where, with the state's blessing, he unilaterally decides matters that go far beyond the fiscal.

The General Assembly passed the "Fiscal Stability Act" in direct response to Central Falls' financial crisis — giving the receiver authority to file for bankruptcy, which city officials did not have. It allows him not only to "exercise the powers of the elected officials" on fiscal issues but says his powers supersede theirs. With virtually no pushback from the Legislature, the receiver's office has broadly interpreted that law as it works to get the 1.3-square-mile city, just north of Providence, back on sound financial footing...Flanders sought bankruptcy protection for Central Falls in August, saying it was the only option. He closed the library and community center, laid off the police chief and about 19 others and instituted a five-year "recovery" plan. It balances the city's budget through a combination of tax hikes, cuts to retirees' pensions and benefits and other budget savings.

But the receiver's office has appointed people to non-financial boards; approved business licenses, including, elected city officials say, a "massage parlor" they opposed; instituted new police promotional exams; approved a new ordinance banning overnight street parking; and even issued a congratulatory citation for a new Lions Club...Initially, the city's business was handled by a "Receiver's Council" consisting of three appointees, including one who had unsuccessfully challenged a sitting council member; the first receiver, former Superior Court Judge Mark Pfeiffer, said it was necessary because the real City Council wouldn't comply with his policies. Last year, that body was replaced by the receiver's "hearing officer," who is Flanders' chief of staff, Gayle Corrigan.

Those meetings are open to the public, but are typically sparsely attended — not unlike regular Council meetings.
Jeff Roter, a resident for 4½ years, said he's never been much involved in Central Falls' affairs: not when the state took over, or when the library closed. But a parking ban imposed by the city's unelected overseer was too much. He had collected nearly 300 signatures ahead of the City Council meeting last week. He wasn't sure who to give them to — the council or the receiver's office — but he thought Flanders had overstepped his bounds....In an unusual about face, Flanders' office suspended the ordinance a day later....In an interview, Flanders noted that the state Supreme Court upheld the constitutionality of the receivership law under a challenge by four of the city's five councilors; the judge interpreted the statute to allow him broad authority beyond just finances. He said the city needed to be rescued — from itself — and that everything he's done is related in some way to its fiscal stability anyway. "The law suspends the usual democratic process because the economic crisis that caused the city to be running out of cash — and having to go file for bankruptcy — needed drastic action," Flanders said. "I'm sensitive to the fact that I am not an elected official, that I don't live in the city and that people are leery of a situation where one person ... has as much power as one person does to run the city and to try and right the economic ship of Central Falls," he added. "That's the law that the General Assembly passed and I have to say, it's working, from my view, remarkably well."

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