March 10, 2012

A Hint As To What Will Trigger State Intervention?

Monique Chartier

With the recently exposed multi-year, multi-million dollar deficit in Woonsocket's school budget and the subsequent downgrade of the city's bonds, Woonsocket now qualifies for receivership, a.k.a., municipal bankruptcy, under Rhode Island's new, albeit overarching, law.

The big question now is whether the state will step in and start that process.

Though terse, we get a possible answer in an AP article of today.

State revenue officials continue to meet regularly with city leaders to find possible solutions, [gubernatorial spokeswoman Christine] Hunsinger said. She said Chafee would consider more aggressive intervention if state officials decide to contribute money to help the city’s bottom line.

So, if this report is accurate, intervention is tied to the direct furnishing of dollars. If Woonsocket doesn't ask for any (presumably, the state would not unilaterally force funds upon the municipality), the Governor will not be inclined to intervene.

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You would think that a condition for financial help would be some form of consolidation. We'll bail you out if you consolidate with some other city or town. Share and reduce your numbers of police cars, city buses, judges, and the like.

It's also odd that the state (and of course Woonsocket) didn't, apparently, see Woonsocket's present problem coming sooner. Real confidence-builder statewide there, mmmhhhmmm.

Posted by: Bill at March 11, 2012 7:19 PM

Realistically Bill, what city or town wants to consolidate with another almost bankrupt community. Who would they consolidate with?

Posted by: Max D at March 11, 2012 9:17 PM


If both suffer from unsustainable overhead, consolidation would -- going forward (post-receivership or bankruptcy) -- theoretically result in more efficiency. Here, as many have said, probably the entire state should become one governing entity for most purposes. The consolidation of just two municipalities would likely not achieve much.

Of course, realistically, few are willing to give up their municipal job, even if it could be performed more efficiently by someone else another way. Especially those with no-show jobs and jobs at inflated salary and pension levels.

Posted by: Bill at March 11, 2012 9:29 PM

Put the municipal jobs aside for a moment. Woonsocket is surrounded by North Smithfield, Lincoln, and Cumberland. While I don't know the specifics of their budgetary issues, I can only assume by the lack of news that they can't be anywhere close to Woonsocket's. As a taxpayer in any one of those communities, I would object for fear of my community being sucked dry and my taxes going up. There are many communities surrounding mine that I would have no problem consolidating services with but if they were Woonsocket and/or Central Falls, I would just say, "No." Call it selfish but that's the reality.

Posted by: Max D at March 11, 2012 9:45 PM

Virginia may have some interesting lessons for us. I am not very well informed on it, but they allow annexation, consolidation, extinction and dis-incorporation. For instance when cities and counties become contiguous, the county can be extinguished (as opposed to say, Boston. Boston and Suffolk County are essentially contiguous, but the county is maintained). An incorporated city may give up its charter and return to being part of the county (only in the northeast is every acre in a "town", in the South it is possible to "live in the county"). When townships become the equivalent of Britain's "rotten boroughs", they can be extinguished,

I'm not sure there is a solution there, but it might give another way to think about "sick cities".

I note that all of the problem communities Providence, Central Falls, and Woonsocket (Pawtucket?) are very urban. Perhaps it is at least time to consider how we expect urban areas to deliver services? Consolidating Providence, Pawtucket and Central Falls seems like a no brainer. Personnel problems would be profound,and hilarious, but there should be a gain in efficiency. I am reminded of Washington,DC, with its multiplicity of police forces (jobs, jobs,jobs - E. Kennedy). Atlanta gets along just fine with two "downtowns".

Posted by: Warrington Faust at March 12, 2012 12:39 AM

"I would object for fear of my community being sucked dry"

If it's done properly, the opposite might be true. Just because a city has net deficits doesn't mean that it's a money-hole. The problem is that our denser municipalities have thinned-out over the decades, but the government has grown or stayed the same size. There's still a tax base, but the overhead exceeds it.

So consider a Central Falls and a Pawtucket. Each has major budget problems. Each has schools that are only partially filled (but with a full complement of staff), each has enough firefighters and police to run 24/7 operations, etc..

Rhode Island's labor-friendliness has let these cities enter into contracts that basically forbid letting anyone go, even if the populations shrink. The only way to break those contracts is to eliminate the other side of the table. You're an employee of CF who can't be terminated without 'just cause', but if CF no longer exists, you've got no standing. Consolidation might be the only way that Rhode Island can 'shrink government' legally.

Posted by: mangeek at March 12, 2012 9:06 AM

Looking at from another side, my local government has performed admirably during these tough times. Why would I want them absorbed into a city government that has basically ran their city to the brink of bankruptcy.

I do think the Pawtucket-CF merger was a missed opportunity because Pawtucket was gaining one square mile of taxable real estate. They could have easily covered the additional services and even absorbed some of CF's employees, laid some off, and reduced the work force by attrition.

Posted by: Max D at March 12, 2012 10:35 AM

What I'm saying is that it's not so much that the cities are deliberately 'mismanaged', bad as they are. There are underlying labor laws that FORCE the cities to be mismanaged, labor laws that Rhode Islanders aren't likely to change. Even under good management and suspension of a lot of the rules, sinking ships like CF or Providence can't be righted; there's just no facility to limit personnel and retiree costs in the long run.

If you merged the whole corner of the state that Woonsocket is in into one sensible unit for this century, you'd have Smithfield, North Smithfield, Lincoln, Cumberland, and Woonsocket in one municipal unit. The Woonsocket vote would only be 30% of the total electorate.

Posted by: mangeek at March 12, 2012 12:08 PM

"Put the municipal jobs aside for a moment."
Posted by Bill at March 11, 2012 9:29 PM

That smacks of "otherwise how was the play Mrs. Lincoln?"

Posted by: Tommy Cranston at March 12, 2012 1:25 PM

That smacks of "otherwise how was the play Mrs. Lincoln?"

That was mine not Bill's . The point is job reduction is a given in a consolidation but there is no guarantee that will pull a failing community off the bankruptcy cliff. Why would a taxpayer support a merger that would automatically raise your taxes. Why would a voter chance having his elected government swallowed up by a larger entity. If I lived in Smithfield, I'd say bring on a merger with Lincoln, North Smithfield, Scituate, and Glocester. North Providence and Johnston can go pound sand. Too much bad politics and bad fiscal responsibility and it's the culture in those communities.

Posted by: Max D at March 12, 2012 4:06 PM

Posted by Mangeek
" The only way to break those contracts is to eliminate the other side of the table. You're an employee of CF who can't be terminated without 'just cause', but if CF no longer exists, you've got no standing."

I think that is the "standard" for governments. Being practically impossible to fire anyone, it is usual to "eliminate the job".

Posted by: Warrington Faust at March 13, 2012 7:58 AM
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