What is Municipal Receivership?
Pardon me for asking what might be a silly question here, but what does a municipal receivership of the kind being undergone by Central Falls actually mean?
I’ve looked through the Rhode Island General Laws, and there is no mention of municipal receivership there that I am able to find.
There’s something in Federal law called “Chapter 9 bankruptcy” that relates to local governments. According to a Richard Dujardin Projo article from April 23 of this year, the Central Falls City Council had “voted to ask the General Assembly to enact legislation allowing Central Falls and other municipalities to file for bankruptcy protection”, but I can’t find any evidence that the legislature acted in response.
The resolution passed last evening by the Central Falls City Council asking for a receiver to be appointed (available via the Projo’s website) cites no legal authority; its content is mostly a bunch of different variations on the theme of “we’re broke and we want to give up”.
And the order issued by Superior Court Judge Michael Silverstein placing Central Falls into receivership (also available via the Projo’s website) makes mention of only one legal authority, State Supreme Court Executive Order 95-01, but no specific, full-fledged law.
Given that other Rhode Island municipalities in addition to Central Falls could conceivably pursue this course of action, I think we need to explore the meaning and consequences of municipal receivership a little more…