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A Hummel Report Investigation

Another Way

We are back in Central Falls, where the state-appointed receiver overseeing the city's finances is moving the community closer  to bankruptcy. This week Jim Hummel sits down with a man who is well acquainted with government in Central Falls, serving as city clerk, councilman and mayor. He says the receiver has not made the tough decisions that other communities are making to work through their financial crises.

 

SCRIPT

Hummel: ``It's been some time,  but we are back  in Central Falls, where the state receiver is moving the city closer and closer to bankruptcy. This week, we sit down with a former mayor of the city who has a different perspective.

For years his name was synonymous with government in Central Falls - as the city clerk, city councilman - and in the early 90s as mayor. Tom Lazieh has kept silent about what he's seen over the past year: Mayor Charles Moreau putting the city into bankruptcy, then three outside receivers running the show.

But earlier this month Lazieh showed up at a budget hearing with an arsenal of questions for state receiver and retired Judge Robert Flanders, and his staff. Line by line Lazieh asked about the budget they'd put together for next year - highlighting what he said were excessive consultant costs and no-bid contracts.

Lazieh: ``The receiver is a knowledgeable, well-educated individual, but he's an outside consultant. He's an individual placed in here with other individuals who looks at the bottom line dollars and  cents. The city of Central Falls is not just dollars and cents. It's people.''

The courts have upheld Flanders' authority as receiver to make wide-ranging decisions,  and in fact the night of the budget hearing - despite questions raised by a three-member panel appointed by a previous receiver - Flanders implemented a new spending plan for next year without their approval.

Lazieh: ``No check or balance on the operations and the actions of the receiver. I don't think it's good for the city and it's not good for the taxpayers. I think we need to correct the situation, the financial dilemma the city's in, but I think it could be done a better way.''

Hummel: ``There's a difference between your philosophical issue with a receiver coming in and that budget hole. Has the city dug too big a hole to get out - no matter who tries to?

Lazieh: ``No. No. The city has dug a hole because of poor planning - some hesitancy of raising taxes in the past. Because of the burden it placed on its taxpayers, so previous mayors, and for political reasons they don't want to raise taxes , not just Central Falls but any city or town.''

Lazieh says Flanders - so far - has not made the tough, and unpopular cuts necessary to fill a gaping budget hole. He points to other cities facing challenges, like Providence, where Mayor Taveras has negotiated concessions with both the police and fire unions.

Lazieh knows because he faced a deficit 20 years ago during the credit union crisis.

Lazieh: ``You've got to make further cuts, challenging decisions.''

Hummel: ``And you think the leadership has been hesitant to do that?''

Lazieh: ``I think the judge is slowly coming around they're making decisions. He has to look at the city a lot better.''

``I don't believe we need to go to bankruptcy - I don't believe we need to merge with other communities. Realistically, I don't see another city that would want to take the city of Central Falls.  The only way is that it would be forced upon by the General  Assembly. I don't see that happening.''

Lazieh is also baffled why the receiver wrote in $5 million from the state toward next year's budget, something lawmakers rejected when the final state budget emerged last week.

Hummel: ``Was it naive for the budget to include $5 million from the state? Was there any chance of the city  ever getting that?''

Lazieh: ``Well, according to the receiver he spoke to the state revenue office and they suggested to him to put that in. Which amazed me, when I speak to accountants and CPAs, people who are familiar  with municipal contracts and budgetary process it was improper.''

Hummel: ``Did the receiver not make the difficult choice by relying on the $5 million, by maybe not making some cuts? Other things you talked about. Did he not make the tough choices in this budget?''

Lazieh: ``I think the receiver began the process. I think the last receiver also - they did not go far enough.''

The former mayor questions a lucrative consulting contract Flanders gave out for $276,000 and another $50,000 in the budget for a study.

Lazieh: ``The current receiver has gone on an outside contract - and has awarded a contract, from my understanding to a company that was just formed a couple of months ago and really has no municipal finance experience operating the city and awarded a contract of $276,000 for two people.  I'm not saying these two people are unqualified but they have no municipal experience whatsoever.''

We wanted to ask Flanders  about some of former Mayor Lazieh's concerns: so we scheduled an interview for Tuesday to hear his side. But late Monday the governor's office told us he was cancelling the interview, instead issuing a written statement.

``The financial condition of the City of Central Falls continues to deteriorate, creating a situation that has now become urgent as the City is facing ever more acute financial and cash flow pressures,'' the statement read.

As a result, Flanders announced the closing of the Adams library, and city's community center by the end of the week, and his intention of negotiating concessions from the city's unions.

And he reiterated: bankruptcy is very much on the table as well.

Lazieh: ``This is not a business. It's a public service, taking care of the services needed in the city of Central Falls, whether it be rescue, fire, snow collection, street paving, all of the work - City Hall operations, these are the services government provides.''

Hummel: ``You're confident you're going to get back to that?''

Lazieh: ``Yeah,  I believe in the long run we will.''

Hummel: ```Because you're one of the few mayor, you know that.''

Lazieh: ``And I felt that way in the early '90s - discussions of merger and bankruptcy and we overcame that.''

While Lazieh holds out hope the city will survive he says things could have been done over the past year to give it a better chance of happening. Still, he remains optimistic.

Lazieh: ``It can be done - it's been done in cities and towns across this country.  It's done in cities just miles away, by other mayors who are making very difficult choices.''

Hummel: ``Maybe deep (cuts), may be difficult, but it's doable in your mind?''

Lazieh: ``Yes it is. Yes it is...''

In Central Falls, Jim Hummel, for The Hummel Report.

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