I-Team: Central Falls receivership ends; Costs add up
CENTRAL FALLS, R.I. —
After nearly three years and close to $4 million, electedofficials are back in control of Central Falls.
Newly-elected Mayor James Diossa confirmed the state runreceivership is over.
While many feel the city is back on fiscal track, someelected officials criticized the process.
"I'm glad they're gone," said City Council President BillBenson, who has never minced words on his dislike of the whole situation.
In 2011, Central Falls declared bankruptcy, city workerswere laid off, retirees' pensions were cut,and taxes increased.
The bankruptcy officially ended last fall when a federal judge signed off on a five-year fiscalrecovery plan. Amidst the restructuring, former MayorCharles Moreau resigned and was later sentenced to federal prison on corruptioncharges.
Now the final dollar amounts for the receivership are beingadded up.
"They spent a lot of money and in five years when it's alldue, where is it going to come from?" Bensonsaid.
Records obtained by NBC 10's I-Team, through theDepartment of Revenue and Central Falls City Hall, show the final tab for thereceivership in excess of $3.8 million.
Three state-appointedreceivers were paid a total of $766,341. Receiver Robert Flanders tops the listafter being paid $453,111.
An even larger expense was legal fees.
Records show the legal tab hit $2,205,903, with asignificant portion, $1,321,730 being paid to the Providence firm of Orson andBrusini. The firm of Edwards Wildman PalmerLLP received $847,892, and the bill fromHinckley, Allen & Synder was $36,281.
In addition to several receivers and legal expenses therewere other costs that quickly piled up.
Municipal Management Solutions, a company run by GayleCorrigan, the receiver's chief of staff, was paid or billed approximately$545,715 since joining City Hall in May 2011.
An NBC 10 investigation revealed Corrigan had been fired forcause from her previous job as CFO of Senesco Marine in North Kingstown.
In a document filed with the Rhode Island Commission for HumanRights, the company said Corrigan "had incorporated and was surreptitiouslyrunning a staff leasing company which provided contract labor to Senesco, fromwhich she was profiting."
In Central Falls, Corrigan and her deputy chief of staffwere originally being paid $100 an hour and $60 an hour. Since July, thepay was reduced to $83 and $50 an hour respectively, according to the city.
Consulting services and studies round out the receivershipcosts.
Buck Consultants was paid $103,875 for a pension study andPublic Safety Strategies was paid $16,000 for a safety study.