You’re All Missing the Point on Central Falls
I don’t know if it’s a Rhode Island municipality v. municipality thing or massive frustration with the insider v. outsider structure of our civic culture, in this state, but the commenters to my Central Falls post are marching all around the point. Patrick writes:
… I understand the point that you’re making, but I think it’s quite a leap to think that Cumberland, Lincoln, Coventry, North Kingstown is going to receivership anytime soon. If a city goes into receivership, it means it has been so badly managed that this is what it deserves. Clearly the voters don’t want good representation, they don’t know what’s good for them.
This is true under normal circumstances, but the trampling on principle that the General Assembly has done in Central Falls is at least somewhat likely to start wheels turning in different directions. That brings us to commenter riborn:
You are missing the first costly misstep that was taken down this path Central Falls now finds itself on – the filing of the receivership. At some point the question has to be asked why receivership in the state court and not bankruptcy in the federal court. The estimated fees of Savage and Larisa may shed light on that decision. Do you have any inkling of the fees they would have reaped had they terminated union contracts and battled it out in state court? Do you think either of them cared if they won or lost that battle? It’s about the money – nine lawyers and five staffers, and a firm spokesperson, all being paid by those CF taxpayers you are so concerned with now. In receivership Savage and Larisa would get paid whether they won or lost that battle with the unions, whether they benefited CF or not. And while it presented an interesting intellectual exercise to keep nine lawyers busy for a good long time and many billable hours – who decided it was a good move on behalf of CF? Did the elected officials have any idea of the costs that were going to be incurred in that exercise? In RI, receivership is primarily a money making business for a small group of receivers/lawyers.
Yes, the GA absolutely protected their main constituents, the unions, in drafting and passing the Pfeiffer appointment bill, what is the news in that? It was begging to be done when CF was advised to seek and then filed for state court receivership. And Mr. Savage, who can’t seem to speak to the media now and must hide behind a spokesperson, was front and center on the TV and ProJo front page telling everyone he was going to terminate union contracts. Did the elected officials think that was a good strategy? This is RI, who didn’t know the GA would come in and save the unions?
So far there appears to be one “winner” in the CF receivershp debacle – after 60 days the $191,000 prize goes to Mr. Savage. Second prize to Mr. Larisa, who probably never made $54,000 in two months in his life.
Patrick’s point only holds if receivership is an unattractive end of the line for badly run town and city governments. But as riborn highlights, the General Assembly’s version has plus sides for important constituencies. With the judicial receivership, the power brokers of a municipality are rolling the dice that the self interest of the lawyers involved won’t turn against them. With the new legislative receivership, unions and their elected and appointed government pals are protected, giving the decision a strong plus for a powerful constituency.
There is now, in short, a safety net for the union–municipal-government scam. Don’t be surprised should the next example fall far short of Central Fall’s degree of mismanagement.
Contra riborn, I think the first costly misstep was allowing Central Falls to be so thoroughly state subsidized in the first place — at least without some pain involved. Had the state funds come with the requirement that Central Falls must match the highest tax rate in Rhode Island, the locals might have had reason to put more competent people in office.