Central Coventry Fire District Files for Bankruptcy Protection

After months of trying to find a solution to its deep financial problems, the Central Coventry Fire District is set to enter bankruptcy protection.

Governor Lincoln Chafee said in a statement issued Tuesday afternoon that it is an “unfortunate step” but “short of an agreement with the Firefighters Union and restructuring the district’s other debts, bankruptcy is the only tool left to us to finally set the fiscal ship of the Central Coventry Fire District on the right course. I fully expect the district to emerge from the bankruptcy with a reorganized and downsized operation that can pay back its debts and maintain a proper fire and rescue service, as well as assure tax stabilization for the residents.”

The President of Coventry Professional Fire Fighters, Local 3372, the fire union, issued a statement shortly after the bankruptcy filing was announced and said that bankruptcy is not the answer to the districts problems.

“We were making progress, but today the Receiver cancelled negotiations scheduled for next Tuesday. He’s repeatedly refused mediation,” said David J. Gorman, the union president. “Without good faith negotiations on the Governor’s part, we question whether the Federal Bankruptcy Court will even entertain this petition.”

Gorman said that the timing was terrible, too.

“We would have thought Governor Chafee would have shown some consideration for our families by holding off until after Christmas,” Gorman said. “Bankruptcy is not exactly in the Christmas spirit.”

According to the filing, the district is looking at a $6.4 million deficit this year with just $5.8 million in revenue. Meanwhile the district owes $4.4 million to its creditors, including $300,000 to the town of Coventry for a loan, $628,739 to the state pension system, nearly $1 million to Centerville Savings Bank and $983,020 to the union.

The filing paints a picture of a fire district that is essentially insolvent and even with a 50 percent increase in taxes, there wouldn’t be enough money to solve the problem, lawyers said.

The district has been in receivership since 2012 and was set to be liquidated earlier this year after a ruling by Superior Court Judgie Brian Stern, but the General Assembly modified the state’s Fiscal Stability Act, which put the district in the hands of a new receiver in May.

Read the filing HERE.

Gorman said the bankruptcy filing will jeopardize safety.

“We’re down to just 31 firefighters from 52, and to two stations from five. And taxpayers will pay hundreds of thousands of dollars in unnecessary legal costs, just like they did in Central Falls,” he said.

But Chafee said bankruptcy is the only tool left to “finally set the fiscal ship of the Central Coventry Fire District on the right course.”

“For about a year and a half, we have brought both sides – the Central Coventry Fire District and firefighting staff members – together to reconcile their differences. My administration has offered assistance, initiated back-and-forth discussion, and suggested and requested options. I have instructed members of my administration to continue the negotiations in hopes of working toward a resolution,” Chafee said. “The cost of the fire district has risen beyond the willingness of the taxpayers to pay, and now bankruptcy is the only means available to restructure the district’s operations and obligations to restore it to fiscal solvency and stability for the future. While we are unable to predict how long the bankruptcy will take, our objective is to conclude it as soon as possible and obtain a confirmed plan to provide the district with a balanced budget for the next five to six years.”