CENTRAL FALLS – Still pursuing his lawsuit challenging the constitutionality of the state receivership law at the Supreme Court, Mayor Charles Moreau is breaking his silence on the actions being taken by Receiver Mark Pfeiffer.
“There’s a dictator running the city of Central Falls and he has no clue what he’s doing,” Moreau declared in an interview with The Times Wednesday.
Moreau, who still holds the title of mayor and ostensibly serves in an advisory capacity to the receiver, says he can not even get his calls returned by Pfeiffer.
The mayor said Pfeiffer is borrowing money on the city’s behalf, has reinstated three library employees who had been laid off and has estimated that the city will spend nearly a million dollars during his tenure as receiver, and that he is being kept in the dark about all of it.
“I want to know what’s going on,” Moreau said. “I don’t know what’s going on. I’m the mayor of the city and I’m not being told what is going on.”
Amy Kempe, Carcieri administration spokesperson who also speaks for Pfeiffer, said the receiver is carrying out the duties of his office.
The $1.5 million borrowed from Navigant Credit Union was in the form of tax anticipation notes, a widely used financial instrument that allows the cities and towns, as well as the state, to maintain cash flow while waiting for tax receipts to come in.
The three unionized library workers were returned to their jobs as part of a grievance settlement, Kempe said. They had challenged their layoffs as a violation of seniority rules in their contract. With the city scheduled to go to arbitration with the worker’s bid to be reinstated with back pay to the time of their layoffs, she said, Pfeiffer made the decision to settle the grievance by giving the workers their jobs back without back pay. Instead, two people who were sharing the role of director, one full-time, one part-time, but who were basically carrying out the duties of the three union workers were laid off.
“That move saved $19,305,” Kempe said.
As for the million dollar expenditure, Kempe said the Division of Municipal Affairs recently sent the House and Senate finance committees an estimated cost for the entire fiscal year of the receiver’s operation, which came to just over $900,000. She said this includes Pfeiffer’s $200 an hour compensation, which is capped at $264,000, the cost of salary and benefits for two state employees on loan to the receiver, and the cost of outside legal counsel. Most of the cost of the outside lawyers, Kempe said, is related to the suit brought by Moreau and four of the five city councilors.
Kempe said those cost will be paid by the state and the Carcieri administration has no intention of billing the city for them. She says the state’s contract with Pfeiffer “ends with the advent of the new administration.”
“What is his exit strategy? How did he borrow money? Who approved it?” the mayor asked of the man who unceremoniously displaced him last July after being appointed by the Carcieri administration to right the financial ship of Central Falls. Moreau and the City Council sought and obtained a court-appointed receiver with the idea that the city might declare bankruptcy. That panicked state officials, who believed that action could negatively affect the credit rating of the state and all the other cities and towns if financial institutions thought a municipality could declare bankruptcy so easily.
The General Assembly passed legislation giving cities and towns an alternative to declaring bankruptcy and barring them from seeking judicial receivership. Moreau and the City Council sued in Superior Court to challenge the law but Judge Michael Silverstein ruled that the law is constitutional. That ruling is on appeal to the RI Supreme Court, which denied a request to stay Silverstein’s ruling while it considers the appeal. Moreau said he will take his case to federal court, if necessary. He added that “We will be appealing to Governor-elect Chafee to amend the wrongs done to Central Falls.” A message left with the Chafee transition team seeking comment was not answered Wednesday.
Pfeiffer had been scheduled to present a long-term plan for getting Central Falls’ finances in order to Gov. Donald Carcieri by mid-November. That has now been bumped to mid-December.
“I’m a fighter, I’m not going to give up,” Moreau asserted. “I’m in this to win it.
“The people of Central Falls are beside themselves with this situation,” the mayor contends, saying the people he has talked to “overwhelmingly want me back in my office
Since he took control of the mayor’s office last summer, Pfeiffer has closed City Hall at noon on Fridays, cutting the pay of city workers by four hours a week, he has appointed a “receiver’s council” to displace the elected City Council after the latter body ignored his instructions to refrain from making any appointments. He implemented a 10 percent supplemental tax increase and, in response to a state cut in reimbursements to cities and towns, lowered the exemption on the automobile excise tax from the first $6,000 of a vehicle’s value to the first $1,000. He cut the mayor’s salary from $71,736 to about $26,000 annually.
“I’m confident we’re going to win” the battle over the receiver, Moreau said. “The good guys always win in the end.”