Central Falls, Rhode Island Files For Bankruptcy
It's not Jefferson County, yet, but it could certainly be seen as the precursor to the first domino. "The state-appointed receiver overseeing the cash-strapped Rhode Island town of Central Falls has filed for bankruptcy on the city's behalf in an effort to help it get back on its feet. Receiver Robert G. Flanders and Rhode Island Gov. Lincoln Chafee announced the step - which Flanders has described as a last resort - at a news conference at City Hall. Flanders filed the legal paperwork seeking bankruptcy protection Monday. "From the ashes of bankruptcy Central Falls will rise again," Flanders said." The biggest losers: unions. "With the city now seeking bankruptcy protection, Flanders said he plans to reduce pension benefits beginning in late August. He has asked the federal court to immediately reject collective bargaining agreements. He said the next set of pension payments will reflect at least the cuts he outlined to city retirees. In addition, he said city workers will face layoffs. Flanders called the step unavoidable, as taxes have already been raised and city services have been cut "to the bone." Expect Barack Obama to thaw Steve Rattner from carbonite explain to creditors, using a variety of four letter words, that they will be last in line of payment after every single union claim has been satisfied, with the resultant husk of a town reverse merged with GM.
"We're not going with a band aid-approach," Chafee said. "We're going to tackle this and that's a positive."
Flanders said he would hope to have a plan of recovery to present to the judge at the outset of proceedings in an effort to prevent a protracted bankruptcy.
"We need to come out of this with a sustainable plan for recovery," he said last month after a meeting with retirees.
Central Falls, a city of 19,000 residents about a 15-minute drive north of Providence, has $80 million in unfunded pension and benefits obligations and $5 million deficits projected for each of the next five years. The city has found itself the subject of national headlines over its floundering finances and a high school so troubled that all its teachers were fired in one fell swoop last year, but eventually rehired.
The mayor, Charles Moreau, and City Council president, William Benson Jr., who were demoted to advisers after the state stepped in last year, have been critical of the receiver. They say it was clear long ago that bankruptcy was the only option.
"That's what we wanted to do almost a year and a half ago," Benson said Monday. "It can't be any worse than it is. It just can't."
Moreau said the city has no choice. "Unfortunately this is the route we've got to go. At the end of the day, fiscal stability is of the utmost importance," he said.
U.S. Bankruptcy Judge Frank Bailey of Massachusetts has been named the judge in the case.
And a video of the bankruptcy announcement, brought to your very, very appropriately by Mario Hilario:
h/t Papa Swamp
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Couldn't pick a better name to begin the muni collapse with, bitchez.
This is evidently a joke. Can't really take it serious from someone named "Hilarious Marius".
Please stay calm in your couch, and stay tuned to your next episode of "As the Worm Turns".
the town's website is priceless
they actually have a welcome page for the reciever
"A City with A Bright Future"
Central Falls
Welcomes
Office of the Receiver
Receiver : Robert G. Flanders, Esq.
Nestled between the City of Pawtucket and the Towns of Cumberland and Lincoln, Central Falls' History dates back to 1731 and the early History of the Town of Smithfield. This tiny City with 1.5 square miles and over 18,000 residents proudly boasts its distinction as recorded in "Ripley's Believe It Or Not" as the Smallest most densely populated City, not only in Rhode Island, but in the Nation. Proud home of Elizabeth Buffum Chace, Conductor in the Underground Railroad, abolitionist and the first woman in Rhode Island History to be commemorated with a statue in the Rhode Island State House. Learn more interesting and notable facts about this proud little City, its Government and its Leaders by browsing and viewing this website.
http://www.centralfallsri.us/
I wonder if Flanders took his { Bar Exam} on a stone tablet, whilst digging for ( XAU) nuggets?...
This is truly bad. I was listening to a retiree this morning on the radio complaining that he was going to have to take $6000 cut, so he rejected the deal. I am thinking that the $6000 cut looks really good right about now.
Zero sympathy for any mentally-competent person who is asked to take a cut or settle in bankruptcy court, and opts for the latter.
These people do not seem aware of the fact that generations of corrupt politicians literally BOUGHT their votes with promises that could not be kept.
On another note: Meredith Whitney is probably going through her rolodex and asking about 10,000 of her peers, one at a time "How you like them apples bitch?"
I think Providence had a Mayor who was serving a prison sentence while at the same time holding office! Mebbe 10 yrs ago? Just to prove your point that there are corrupt politicians up there, generations perhaps as you say Pops.
Buddy Cianci was the guy you're thinking of.
http://abcnews.go.com/US/rhode-island-city-turns-pensioners-avoid-bankru...
Cry me a river...One policeman says he would rather sacrifice his whole pension than settle for what the city is offering....What an idiot!
One rule of fight club...Never ever depend on the government to take care of you!!!
Wouldn't it more accurately be "as the screw turns?"
The first of many.
These are just legal tricks used to shaft their creditors. Do you really think they have no assets?
Come on get realz!
Have you ever been to Central Falls, RI?
I cut through there every once in a while on my way home from Providence, where I work.
I could easily believe they have precisely zero in the way of marketable assets.
You're not following his trolling very well.
See his handle -?> TSA Thug
Most of the comments I've seen him/her post have been support of the status quo in the manner of HamyWanger.
It's not the best trolling I've seen, but he/she has given me a few chuckles over the past week or so.
perhaps hamy was reincarnated
Yeah.. I noticed him.. Noticed the same thing you did.. but.. but.. he has a welcoming user name that everyone can relate to.. Expect more of this as the criminals step up their campaign to fool people into thinking we are getting upset about nothing...
no land/buildings/cash/water.sewer revenue/water or mineral rights/schools/jenks park?
drunk driver with impaired vision?
sell assets, settle debt, start over. Simple!
Yup, a total dump. Don't know why you'd risk cutting thru it.
Generally only do it if the traffic is simply unpassable on I-95 going north. Happens pretty much whenever there's an accident in the S-curves, which is, blessedly, not often.
As long as you stick to the main road(s) it's only about as bad as the dump I work in around the west-side of Providence (out near Johnston). I don't ever take any secondary roads, though. Nasty.
If you're willing to take the (very real) risk of having your car stolen, Stanley's Hamburgers on Dexter Street is great. At least it was years ago.
I used to live in Pawtucket, RI. I can confirm that they have no assets. Only 30% of the houses in this one square mile city are owned by people who reside in the homes. The majority of the properties are owned by people that are out of state landlords (the marjority are owned by MA residents). This has been coming for a long time, the only thing that surprises me is that the ratings agencies didn't have them listed as AAA+. /SARC
I grew up in Pawtucket, and can support Ryman's observations. Every day, it is either too hot or too cold. Everyone speaks like they were raised by Jersey City mobsters, and the rivers run a different color each day due to the textile mills. USAToday ranked Pawtucket 298 out of the 300 worst places to live in 1990. It has only gone downhill since then. Still, Pawtucket beat Central Fall hands down.
RI is a very small, and very corrupt state. Corruption is the issue, not just finances. That's why you see Illinois failing. This is just the beginning.
19,000 people in a square mile? Are you nucking futs? I wouldn't live there if you paid me...y'know, like a pension or something...
Uhm....wrong City of Vallejo in bankrupt California has the distinction of being first to declare BK
http://www.ci.vallejo.ca.us/GovSite/default.asp?serviceID1=712&Frame=L1
Ah, good catch. I stand corrected.
Related to Ned Flanders?
In-deedley-doodley, neighbor.
B-b-but they told me Meredith Whitney was wrong!
+1
That's right.. She even got called to the principal's office to explain her actions
"Hens love roosters....
Geese love Ganders....
Everyone loves Robert Flanders!"
NOT ME!!! (Homer and the Unions)
'Nedna' YES?
'Nedna' NO?
Meredith Whitney just had her first climax. More to come.
NOW THAT I WOULD LIKE TO SEE
Ughh..a pun. Still it is funny.
On CNBC now! Hope she does it live!!
<----- There be more Municide on the horizon.
<----- Transitory bitchez
And yet, the radio continues to be filled with commercials of investment houses selling "TRIPLE TAX FREE" municipal bonds. Assuming you have $10K or more to spend, of course.
Count me in!! Where can I sign-up for some Freddie/Fannie paper while I'm at it?
But, but, CNBC told me Meredith was wrong.
This is great actually, busting the unsustainable public unions. I have no problems with unions if they can compete in the private market, but they have no business in the public sector. A great precedent for future municipal and state bankruptcies. Public unions better look at this closely and decide that they to need to share in the bleeding that everyone else is experiencing.
And for the public sector, scrap Davis-Bacon and end collective bargaining.
Exactly! Jim the janitor doesn't need a dental plan. Soros, Icahn & Blankfein are looking for enough $$$ for another island or two.
I am fine with public employees receiving health insurance, but they should have to pay for it like the rest of us, instead of the taxpayer footing the whole bill. Lets consider pensions, that is the big 'back breaker' for most municipalities, it is unsustainable, moreover it is unjust, to the taxpayer who pays for it, that fact that it bankrupts these municipalities, and that the taxpayer gets no such benefits.
It's time to outlaw conventional pensions. In bankruptcy the pensioners get completely screwed, and many of them are not living large and just want to have a decent retirement, not yachts and jets. But the pension promises, often made absurdly large by union demands and/or undermined by underfunding of the pension funds for immediate gains, are unfair to the people now living and working in the cities or companies that once committed to them. Either go to defined-contribution plans, or if you still want a defined benefit plan, require that the cost of it be paid to an unrelated, separate, well capitalized entity with each and every paycheck to the worker, so that the worker's employer can't cheat on their commitments now only to be found out decades later when the people doing the cheating are gone and mostly dead.
How about just abandoning the system and looking after ourselves?
Oh, but that's not the American Way! Hasn't been for years!
You must have us confused with some freedom-loving capitalistic society. Like China in 2020, for example.
That's anarchy. Is that allowed?
Would doctors then comes to our homes?
Would manufacturing return to the US?
Would the authority for schools return to the communities where they're located and where people actually pay for them?
Could we get home delivery of milk again, with top cream?
Option 1: Make it illegal to lie, cheat and steal. End result feels good, but relies upon a portion of the current perps (government) to regulate unpopular laws against their friends (states and corps), resulting in null change that merely gets you shafted by some novel dodge in place of the current one.
Option 2: Peeps grow up, embrace TANSTAAFL (There Ain't No Such Thing As A Free Lunch) as a mantra to live by, and scoff/reject/callBS on any future employer offering of a convential pension, be it corp, public, or something as established as Social Security. "How 'bout you just give me my money now, and I'll see to my own welfare, thank you kindly."
Nobody would agree to that, better take a number at the Chapter 9 counter.
What, no bailout?!
RI is also broke - and since RI as a state and RI-1 as a CONgressional district are both rock-solid, reliably "blue" there's no need for Barky to spend what little political capital he has remaining on this.
ZH is really machine-gunning negative news today (this municipal BK, Fukushima, repo market collapse, etc.), a day already so stressful for most traders to parse. Beware of opening short positions on major indexes on these pieces of news today, because you will get your face ripped off overnight Wait until Friday, if you go along with the negative NFP print call.
Shorting this broken market is asking for trouble. Sure, we can get lucky and punch one out of the park, but how many strike outs to achieve that. For the most part have not shorted for over 2 years and still waiting for my pitch.
Will you swing after they turn off the stadium lights?
Yeah I know isn't it funny. Everytime I look at Zerohedge I start biting my nails and start oiling the hinges on my blast doors in the shelter. But then I look on CNBC and eyeball the markets and everything's usually peachy keen. If the world is coming to an end, it sure is taking a long time. Either that or Zerohedge is in some sort of a time wrinkle.
Then why come here? Enjoy your paper while you can.
they are the ones trying to stick their fingers in the holes in the dam, but we are able to stand back and see all the other holes that are popping up and see they dont have enough fingers to plus all the holes
Early isn't wrong - especially when highlighting the flaws in judgement that are leading to a certain crash. If there were no chinks in the armor, there would be no ZH. Use this time to prepare, its a gift.
"If there were no chinks in the armor"
Ah ainta skeered of no damn chinaman, even if he's a wearin' armor. Just loaded up some AP aught-six tonight!
Sorry. The bourbon is starting to take hold now. This whole sellout by the COngress is really upsetting, to say the least.
More bourbon!
If you need to shit your pants, don't do it in public. Btw, Tyler isn't the only one measuring shit-stains & using it to predict the market:
Predicting Stock Market Indicators Through Twitter “I hope it is not as bad as I fear”
Xue Zhang1,2*, Hauke Fuehres2, Peter A. Gloor2
1National University of Defense Technology, Changsha, Hunan,China
2MIT Center for Collective Intelligence, Cambridge MA, USA
http://www.ickn.org/documents/COINs2010_Twitter4.pdf
Did you tweet today? If so, thanks for helping make other people money! (and not in a directed advert way)
p,s. Yes, you did just see Chinese military & MIT data mining Tweets for financial gain. DELICIOUS.
Just another MUNI domino. Gosh it takes awhile for these things to fall.
Agree - although now we're at the end of the second year and all the low hanging fruits been picked. Most municipalities have "budgets" held together with nothing but hope stemming from prior "turnarounds".
I can't wait until we finally see Washington Central(ly planned) Fall(s) DC.
Municipal Bankruptcy, Bitchez.
Expect a lot more of this.
The Bernank said it would violate the charter of the Federal Reserve to try and monetize the debt of state, county or more local units of government.
He also said the economic recovery would be robust, that inflation is too low, that the Fed would never monetize Federal Government deficit spending, and he made the following astute predictions /sarc/:
Bernanke Plays Tragic WeathermanWhich makes sense since banksters do not give a damn about anything but the federal government, the source of their enormous and tax free wealth.
That is #1. Next!!! Get in line please and do not push.
Layoffs, pensions reductions, govt. employees, this is just a microcosm of the global ponzi shitstorm that is building.
Looks like Central Falls retirees will be cancelling their upcoming cruises.
How gold is your parachute now, union thugs?
Bond holders should suffer. Anyone stupid enough to invest in a heavily unionized anything don't deserve to eat, much less profit on the backs of taxpayers.
No union or pension is truly busted until PRESENT BENEFITS are cut.
Not inflation adjustements. Not increased contributions from present workers.
Cuts To Present Pension Payouts.
Nothing else means anything.
Shave and a Haircut -Today!
Two-bits == 1/4 of 451 grains == .234895 troy oz == $9.22
We should all be glad it's not a bikini wax...
the last time I got one of those was when I was a student. It really sobers you up in 10 seconds!
When do you think congress will go after US military retirements?
The Tea Party? Today!
Congress as a whole? Never.
Oops, they already did! They cut the cola under the Reagan Administration. The game is to slowly suck the juices out of these promises to avoid a confrontation. The politicians don't want to lose the votes, so they resort to subterfuge.
Even the Russians honored the pension promises of the former (Soviet) government, it's just that the pension people got wasn't really what was promised and was nowhere near enough to live on.
Right after Congressional and SCOTUS retirements.
Dominos are falling down like Michael Douglas. Once other muni's see it's a popular idea amongst their peers, they'll jump off the bridge too and then the whole State's will get involved (i.e. CA, IL, et al) in filing
Falling Dominoes Bitchez!
Damn that Merideth Whitney for being right again!
in other news...randy moss retired...Merideth Whitney bitchez!
Central Falls folds without a fight as this issue deals with pensions while Jefferson County will drag on forever as it deals with bondholders.
Tyler, I think I am mistaken on that. Vallejo in CA. filed for bankruptcy in May of 2008. Sorry, I should have double checked that.
That would make this #2.
Classic..."At the end of the day, fiscal stability is of the utmost importance"...why is it only at the time of bankruptcy do they come to that realization?
Employees and retirees, effective today, must pay:
a higher health insurance deductible
changes in medical co-payments
a 20 percent co-share of health insurance premiums
Pensioners' next payment in late August / early September will be reduced as Flanders explained July 19
A motion was filed to immediately reject the Collective Bargaining Agreements with:
the Police Union, which expires on June 30, 2012
the Firefighters' Union, which also expires on June 30, 2012
and the Municipal Workers' Union, which expired on June 30, 2011.
How does a city of only 15k (hence with only few hundred municipal workers) have 80 MILLION dollars of pension liabilities? That's why this whole thing is so f'ing broke... Bargaining rights? How bout BULLYING rights
Were they always 15k? Or is that a recent phenomenon? 80M over how many years? For how many retirees?
20 years * $800/mo * N == $80M
N == 5000 employees...over the course of how many decades?
And then there's the little thing about them contributing their earnings to said pensions over that time.
I supposed you'd be happiest if no one was ever allowed to retire...or these people had lost everything in a 401k in 2008.
This says more about the collapse in tax revenue from the GFC than it does about unions gone wild.
Let's not also forget all the money that was siphoned towards Wall Street. Maybe it's because Americans are too close to Wall Street they don't see it. From up here in Canada, it sure looks like the real culprit in the whole castle of cards is Wall Street. Banksters still pulling profit while everything else around is crumbling has got to be somewhat a bit suspicious.
Go long pitch forks, boiled ropes tar and feathers. I have a feeling you guys will need them before long...
A concerned Canadian.
"A concerned Canadian."
How much would the Canadian Air Force charge to carpet bomb Wall Street? Oh, and a certain building in uptown Charlotte N.C.? Oh wait, never mind the Charlotte target - they seem to be on a path to self-destruction on their own. Money saved!
ZH just reporting what IS. Not what they hope it is.
Stephen Hopkins is rotating rapidly counterclockwise in his coffin...