Central Falls receiver to alter pension cut plan


An attorney for the state receiver who filed for bankruptcy on behalf of Central Falls said Friday his office will offer a new plan for cutting city police and firefighter retirees’ pensions in response to their objections.

Theodore Orson, the lawyer for state receiver Robert G. Flanders Jr., said in U.S. Bankruptcy Court in Providence that a new plan is being prepared that would “improve the retirees’ position.”

Orson declined to elaborate after the hearing, and Flanders told The Associated Press he did not know the details of any new plan or where the money would come from to make up the difference if the cuts are not as deep as those already imposed.

Orson told Judge Frank Bailey, who is hearing the bankruptcy case, that the plan could be presented to the retirees as early as next week, with the aim of reaching an agreement by mid-October.

Some Central Falls retirees have seen their pensions cut by more than half under a five-year financial recovery plan unveiled Thursday. The retirees had refused to agree to take voluntary cuts to their pensions and benefits of about $2.5 million – though Flanders warned they could face larger cuts. At the time, Flanders said the retirees’ choice was between a “haircut or a beheading.”

Flanders, who was appointed by Rhode Island Gov. Lincoln Chafee, is seeking to balance Central Falls’ budget for the current fiscal year and the next four years by paring spending, cutting back pensions and benefits and increasing property taxes. He has said he wants to reach agreements with unions and retirees, amend his plan and offer a “consensual” proposal to the court for its approval.

Matthew McGowan, an attorney representing more than 100 police and fire department retirees, said Friday he did not know what the new proposal would include but that the receiver’s office had reached out to him to set up talks. He said previous talks have yielded no progress in coming to a voluntary agreement and declined to say what level of cuts would be acceptable to his clients.

Bailey also heard arguments Friday on whether the receiver’s office should be allowed to pursue legal fees from Central Falls’ elected officials, who unsuccessfully challenged the constitutionality of the receivership law.

A Rhode Island Superior Court judge ruled in July that Mayor Charles Moreau and four of the City Council’s five members are responsible for paying their own legal expenses – and the receiver’s – incurred in the protracted fight over the law and the role they may play under the receivership.

John Mancini, who is representing Moreau and the council members, told the court the elected officials are “average Joes” who are being “punished for seeking relief in the court system.” He argued that the judge had the authority to halt the receiver’s collection of what he estimates will be more than $300,000, but Bailey ruled that the receiver’s office is free to continue to take steps to recoup the money.

Also Friday, the Central Falls police chief, Joseph Moran, was laid off as part of Flanders’ fiscal recovery plan. The receiver’s office is merging the police and fire chief positions into a single head of public safety in a cost-cutting effort.

Moreau, who was demoted to a part-time adviser, said he could not comment on the recovery plan because he had not seen it. City Council President William Benson Jr. said he had not seen it but described it as “crap.” 

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