Gov. Lincoln Chafee said Tuesday the state will take over the financially troubled Central Coventry Fire District.
Chafee said he and the Department of Revenue have appointed Steven Hartford as the new receiver.
The district has been in bankruptcy receivership since October 2012 under Special Master Richard Land, and a Superior Court judge had ordered the liquidation of its property and other assets by May 16.
The Providence Journal reported that Chafee sent letters to the leaders of the state legislature indicating the state has been asked to step in to avoid that liquidation and has agreed.
Lawmakers last week added local fire districts to the jurisdiction of the state Fiscal Stability Act, which allows the Department of Revenue to take over financially distressed local agencies and reorganize their finances.
"The commission or the receiver has the ability to negotiate a new contract and to work out a long-term plan for the district to continue to operate and to pay back its old debt," Land said Tuesday.
Chafee said the reorganization most likely will include increased taxes, union concessions and possibly reduced services.
"We're willing to work with the taxpayers. We want to be a partner with the taxpayers. We look forward to getting the fire department up and running and providing the service," firefighters' union official Dave Gorman told NBC 10 News.
NBC 10 News contributed to this report.