Central Falls' state-appointed receiver has stepped into the bankrupt Rhode Island city's school district contract talks with teachers.

Late Friday afternoon, Robert Flanders negated Superintendent Frances Gallo's efforts to unilaterally impose new contract terms.

Gallo on Wednesday imposed the "last, best and final offer" on the 330 teachers, saying the district needs to close a $1.7 million budget hole. Its annual budget is about $42 million. The existing contract is set to expire on Aug. 31.

The state subsidizes all of Central Falls' school budget. Under the state's Financial Stability Act, the school department is considered a city subdivision. Flanders has been the city's receiver since January.

Gallo had reduced the size of automatic step increases plus longevity bonuses, and cut benefits such as accrued sick days.

According to Flanders' order, compensation and benefits will remain at the same levels as of June 30, pending future orders.

"The receiver or his designee shall resume responsibility for negotiating a collective bargaining agreement with the Central Falls Teachers' Union. Consequently, the school department's negotiating team now in place is relieved of that duty," Flanders wrote.

He added that the goal of fiscal solvency "makes it necessary that the city of Central Falls speak with one voice."

The city filed for Chapter 9 protection on Aug. 1 in the U.S. Bankruptcy Court for the District of Rhode Island in Providence.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.