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RI lawmakers representing Central Falls say city shouldn't have to pay receivership's costs
PROVIDENCE, R.I. (AP) ' Lawmakers representing the struggling city of Central Falls are vowing to fight attempts to make the city pay for the state-appointed receiver now in control of its finances and operations.
Democratic state Sen. Elizabeth Crowley told The Associated Press that the receiver's costs are too high and can't be paid by city residents.
"It's a distressed city and you're asking it to pay more?" she said. "Are we planning on taxing people out of their homes? Do we want to make it a ghost town?"
The state has already sent the city a bill for $1.17 million to cover costs associated with the receivership. Gov. Lincoln Chafee now wants lawmakers to approve additional funds to cover receiver Robert G. Flanders' salary and legal fees this fiscal year. The state pays the costs upfront, then bills Central Falls.
Total receivership costs are expected to reach $2.26 million by July.
Flanders filed for bankruptcy on behalf of the city last year.
Rep. James McLaughlin, D-Cumberland, said the state should pay since the receiver wasn't elected by residents. McLaughlin, whose district includes portions of Central Falls, also said that Flanders should take a pay cut. Flanders has made $30,000 per month.
"It was implemented by the state. The state should be picking up the cost," he said of the receivership.
A spokeswoman for Chafee, an independent, referred questions to state Revenue Director Rosemary Booth Gallogly, who didn't immediately return phone calls seeking comment Friday.
Earlier this week, however, Gallogly explained the request for funds to cover legal fees by saying it is "extremely hard" to predict the costs of the bankruptcy. She said the time spent by Flanders, his main legal team and other attorneys has increased as the case has progressed through U.S. Bankruptcy Court.
Flanders filed for bankruptcy protection on the city's behalf in August, saying it was the only way to get the city of 19,000 residents back on solid financial ground. The first state-appointed receiver, Mark Pfeiffer, blamed the city's chronic budget problems ' Central Falls began the year with a $6 million shortfall ' on "unsustainable" pension and benefits costs, expected revenue it never got from the Wyatt detention center and bad fiscal management by local officials.
Flanders, an attorney and former state Supreme Court justice, has said he is working for less than a third of his normal hourly rate, in part because his work in Central Falls precluded him from taking more lucrative work.
The lawmakers said they hope to persuade state leaders to foot more of the bill for the receiver before the city is asked to pay more.
They have the support of at least one local official.
William Benson Jr., the City Council president, who was among the elected officials who unsuccessfully challenged the constitutionality of the receivership law, notes that it was Flanders who filed for bankruptcy on the city's behalf.
"If you want to pay for the bankruptcy, get the guy who asked for the bankruptcy," he said.
Associated Press writer Erika Niedowski contributed to this report.