A friend sent me this link to an article about Central Falls, RI, which has the motto, “A City with a Bright Future”.

CENTRAL FALLS, R.I. — The city of Central Falls, Rhode Island — one of a handful of U.S. cities and counties facing fiscal collapse in the wake of the economic recession — has filed for bankruptcy.

The Chapter 9 bankruptcy filing marks a symbolic blow as state and local governments struggle to pull themselves out of the recession.

The smallest city in the smallest U.S. state made the filing Monday as it grappled with an $80 million unfunded pension and retiree health benefit liability that is nearly quadruple its annual budget of $17 million.

My friend asked whether this was a sign of things to come for the Land of Opportunity and Innovation™.

Before I take a crack at it, let me tell you about delving into Comprehensive Annual Financial Reports (CAFRs). (FY2003-2010 are available online at the City of DeKalb’s Downloads page.) Right now I’m contemplating such questions as:

“Is it really a capital asset if you can’t sell it?” and

“What does it say about us that TIF property taxes are our No. 2 revenue producer?” and

“If this is audited, why am I finding mistakes?”

But whether DeKalb might face bankruptcy at some point? I don’t know, but I’ll bet the answer starts with, “It depends…”

We have a significant advantage nowadays, and that is more truth than we had before — more maybe than we’ve ever had before. We discovered the $400,000+ trommel/slush fund, and what the airport is really costing us, and the extent of the OPEB (Other Post Employment Benefits) liability. More importantly, we’re dealing.

In fact, someday we may look upon reconstitution of the Financial Advisory Committee and the hiring of consultants Executive Partners, Inc., the folks who uncovered these truths, as the smartest moves we ever made in saving our own hash.

On the other hand, there’s plenty to worry about: failure to change spending priorities, debt ratios, potential results of current labor negotiations, and lack of straight answers about last year’s reduction in force, to name just a few.

Anything I find in the CAFRs that seems noteworthy I’ll share here. Maybe we’ll figure out the answer to my friend’s question.