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In Coventry, R.I., the Central Coventry Fire District is preparing to sell off every firetruck and piece of fire equipment and then pay its substantial debt by levying a tax bill that's expected to be several times what residents paid for fire service when they still had it.
As members of the Poquonnock Bridge Fire District in Groton wait for the court to settle a disputed 10-year labor contract between the board and the union, this town less than 50 miles away is nearing the end of a budget crisis that started when the district and the union could not agree.
In Central Coventry, the union offered some concessions, but the district board rejected them and voted to liquidate the district if the budget couldn't be balanced.
Richard Land, the court-appointed "receiving liquidator" for Central Coventry, said he has until May 16 to come up with a plan now to sell the district's assets, to figure out what it owes, and to make arrangements to pay those debts.
Whatever bills remain after the assets are sold would be paid by taxpayers, he said.
"It's most likely to be several times what they had been previously been paying annually," Land said.
Deb Monteiro, a board member in Poquonnock Bridge, said she believes some people have the mistaken notion that if a fire district can't pay its bills, those bills somehow go away.
"They have no clue," she said.
Poquonnock Bridge is awaiting a decision by a Superior Court judge on whether it must honor a 10-year labor agreement with the union that includes annual wage increases of 3 percent. The Town of Groton petitioned on Jan. 15 to intervene in the appeal, saying the contract also affects the town pension system so it has a "direct and substantial interest" in the case.
Members of the union and board met in Janurary to start a dialogue, but no negotiations have taken place.
Fire District Board Member Ron Yuhas said Poquonnock Bridge is not in the same situation as Coventry. He said it's operating under the old union contract and in the meantime, its bills are being paid.
"The court is going to decide, and if we're lucky, they'll go in our favor," he said. "And then we can do some negotiating and do something that works for both of us." Yuhas said the district has enough money to last until the end of the fiscal year.
Central Coventry has 44 firefighters, a fire chief and a clerk, none of whom would be needed if the district is dissolved, Land said. The district covers an area of about 30 square miles. About 18,000 people live there.
Land is a lawyer with the Providence firm Chace, Ruttenberg & Freedman, LLP, which advised the Poquonnock Bridge Fire District Board. He declined to speak about Groton but said he would speak about Coventry.
He said it's unclear what would happen if a fire is reported in Coventry after May 16.
"I don't know, and I don't think anybody knows what's going to happen after this district is gone," Land said.
Land said the judge allowed some time for another branch of government to step in.
"It is up to the town and the legislature and the executive branch to take this one and decide what they're going to do," he said.
In terms of the bill to taxpayers, Land said he could recommend that the district's debt, once it's determined, be paid off over time. But he said creditors also have a say and could object.
He estimates Central Coventry has about $6 million in pension liability, $2.5 million to $3 million in pre-existing and other debts, and $3 million to $5 million that must be paid under the collective bargaining agreement that ends March 31, 2015.