I-Team: Central Falls receivership ends; Costs add up - News, Weather and Classifieds for Southern New England

I-Team: Central Falls receivership ends; Costs add up

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CENTRAL FALLS, R.I. -

After nearly three years and close to $4 million, elected officials are back in control of Central Falls.

Newly-elected Mayor James Diossa confirmed the state run receivership is over.

While many feel the city is back on fiscal track, some elected officials criticized the process.

"I'm glad they're gone," said City Council President Bill Benson, who has never minced words on his dislike of the whole situation.

In 2011, Central Falls declared bankruptcy, city workers were 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 fiscal recovery plan.  Amidst the restructuring, former Mayor Charles Moreau resigned and was later sentenced to federal prison on corruption charges.

Now the final dollar amounts for the receivership are being added up.

"They spent a lot of money and in five years when it's all due, where is it going to come from?" Benson said.

Records obtained by NBC 10's I-Team, through the Department of Revenue and Central Falls City Hall, show the final tab for the receivership in excess of $3.8 million.

Three state-appointed receivers were paid a total of $766,341. Receiver Robert Flanders tops the list after being paid $453,111.

An even larger expense was legal fees.

Records show the legal tab hit $2,205,903, with a significant portion, $1,321,730 being paid to the Providence firm of Orson and Brusini. The firm of Edwards Wildman Palmer LLP received $847,892, and the bill from Hinckley, Allen & Synder was $36,281.

In addition to several receivers and legal expenses there were other costs that quickly piled up.

Municipal Management Solutions, a company run by Gayle Corrigan, 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 for cause from her previous job as CFO of Senesco Marine in North Kingstown.

In a document filed with the Rhode Island Commission for Human Rights, the company said Corrigan "had incorporated and was surreptitiously running a staff leasing company which provided contract labor to Senesco, from which she was profiting."

In Central Falls, Corrigan and her deputy chief of staff were originally being paid $100 an hour and $60 an hour. Since July, the pay was reduced to $83 and $50 an hour respectively, according to the city.

Consulting services and studies round out the receivership costs.

Buck Consultants was paid $103,875 for a pension study and Public Safety Strategies was paid $16,000 for a safety study.

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