Consolidation could be an option for survival for the cities who have difficulty

Entering a modern pharmacy shoppers spend the unused and boarded-up Pawtucket and Central Falls train station in Central Falls, Rhode Island, June 27, 2011.

Credit: Reuters/Brian SnyderBy Edith Honan

NEW YORK | Tue, June 28, 2011 6: 48 a.m. EDT

NEW YORK (Reuters) - hungry small money city of Central Falls, Rhode Island, was taken over by the State, faces debt default and focuses on the possible bankruptcy. Now, it will lose its identity in total.

The smallest city in the smallest of the 50 U.S. States, covering only 1.5 miles square with a population of 19,000, Central Falls could merge with the Pawtucket neighbour.

Some say that this strategy is the only way to keep providing basic services to the residents of the city, also among the poorest places in the State.

The receiver appointed by the State for Central Falls - the city has been under the control of the State for almost a year - to first defended the idea of a possible merger, and it remains an option viable, poignantly, falls of Central, as well as for the cities, villages, school districts and the districts of even mosquito-eradication around the nation face budget deficits and long-term liabilities.

"We can no longer fund these entities little.". We have to consider the effectiveness that we can achieve fusion of the cities, "said Gina Genovese, co-founder of the Group of Courage." to connect New Jersey, which advocates the consolidation of the city as a mechanism to save money

Genovese, who was Mayor of Long Hill Township, New Jersey, from 2005 to 2007, stated that the State could reduce its 566 municipalities within 125 cities and villages.

In New Jersey, places as varied as the rich Princeton, Merchantville, and impoverished Camden, a high-crime city forced to lay off half of its policy of last year, sought to consolidate services.

CASH-STRAPPED

In Michigan, Oakland County resumed service Pontiac police short of money, and there are suggestions that he could go to absorb the entire city.

In Illinois, Governor Pat Quinn has suggested to the State, which has entities more than any other taxation powers, consolidate school districts to save money.

Rhode Island, the receiver appointed by the said State consolidation could be the last hope of Central Falls, which has an annual budget of $ 16.8 million,

Nearby Pawtucket, a city of approximately 71,000 residents with fiscal challenges own, Mayor Donald Grebien adopted a wait-and-see approach and refused to comment on.

An editorial on the website of local news GoLocalProv.com advocated last year that Central Falls become a section of another city, so residents could benefit from a wider tax base.

"Now that his own little hell financial does than to stigmatize the owners, students and the future," said the editorial.

But others see unfortunate consolidation.

"I was born here." It would bother me to see the name Central Falls disappear, ", said Patrick Szlastha, who sits on the municipal Council and reduced his hair in Central Falls since 1961.

But he added: "I don't know of anyone who has obtained a precise formula for this city on the right track."

The hurdles to Central Falls are great. Incorporated in 1895, he was a past successful as a centre for textiles and tanning, everything from soda bottles broom.

But a long decline in the manufacturing sector of the city revenue base, and the recent economic slowdown exacerbated years of financial mismanagement.

It has a high level of fixed costs, but only a limited ability to raise revenue. The median family income is nearly half of the average of the United States, and one-third of the inhabitants of Central Falls live below the poverty line.

Earlier this month, the city suffered a blow of costs when Moody's Investors Service reduced its credit rating and warned that there is a probability of bankruptcy.

While bankruptcies and defaults are rare in the $ 2.9 billion municipal bond market, the downgrade may force Central Falls to pay if higher interest rates and when it borrows money.

This week, the State announced the closure of the library and Community Centre of the city.

(Editing by Ellen Wulfhorst and Jerry Norton)