The receiver appointed to run Chelsea, Mass., came equipped with considerable budget-cutting powers, but some may violate the U.S. Constitution.

That is what several of the city's aldermen say, and their lawyers are taking their case today to the state's Supreme Judicial Court, the highest court in Massachusetts.

"The way the governor and the state legislature set up this new law, the receiver is not only a receiver," said Stephen J. Powers, a Democratic city alderman. "He becomes a czar and a dictator. His powers are unlimited."

Gov. William F. Weld on Thursday swore in James F. Carlin, a former state transportation secretary, to be the first receiver of a Massachusetts municipality since the Depression

The state legislation that created the receivership, drafted by the governor and his lawyers, gives Mr. Carlin the ability to control future labor contracts, file a Chapter 9 petition in federal Bankruptcy Court to change existing contracts, and run the city by fiat.

Some city employees say Mr. Carlin has already taken it upon himself to change existing contracts.

The upcoming legal showdown boils down to two competing legal concepts: a state's right to govern using emergency powers, as inferred under the 10th Amendment to the Constitution, and the contracts clause contained in Section 10 of Article I of the Constitution, which prohibits states from passing laws "impairing the obligation of contracts."

Massachusetts is betting its law will prevail because of what state officials say is a fiscal emergency in Chelsea. "We believe that the language in the law gives the receiver emergency powers to revisit the collective bargaining contracts and possibly make changes as a result of the fiscal emergency that the city faces," said Dominic F. Slowey, a spokesman for the Massachusetts Executive Office for Administration and Finance. "We believe that previous case law is on the side of city managers, during times of fiscal emergency, to go and revisit contracts."

He conceded, however, that "it's definitely an open legal question."

Lawyers for the aldermen could not be reached for comment yesterday. But as they make their case in the state's Supreme Judicial Court today, they are likely to bring up some of the grievances aired by Mr. Powers and other city aldermen about the receiver.

"He's taken away the constitutional right of the people to vote and has taken away my constitutional right to run for mayor," said Mr. Powers, who said he is one of three city aldermen who had been preparing bids for the mayor's seat. "The dictator has the right to break all the unions' backs."

Already, Mr. Carlin has issued an order that would result in the shuttering of one of Chelsea's four fire-houses and the removal of a pumper from another. The order would eliminate overtime employment of firefighters.

In issuing the order, Mr. Carlin broke a contract that calls for minimum manning of 20 firefighters at all times, the firefighters said in court yesterday.

The International Association of Firefighters, Local No. 937, also is mounting a legal challenge. Yesterday, union spokesman Bill Sullivan said that the firefighters went to Suffolk County Superior Court, where they asked that Mr. Carlin be held in contempt for "willful violation" of a July court order that maintained the 20-firefighter minimum staffing requirement.

John Brennan, the city's mayor who gladly made way for the receiver, had tried to cut staffing requirements, too, but was prevented in court. He originally agreed to the minimum staffing requirement, according to Mr. Sullivan, in return for a promise from firefighters that they would not seek a pay increase for two years.

While Mr. Brennan failed, the receiver should triumph because of his ability to trash union accords, Mr. Slowey said. "The mayor did not have these powers when he was defeated in the courts a few months ago. The receiver, if all else fails, has a club that we gave him. And that is the power to seek federal bankruptcy."

Mr. Slowey also said that administration officials are not surprised by the apparent onslaught of litigation headed at the newly installed municipal czar. "We expected court challenges, and we knew that when we wrote that clause, but we believe the receiver has the authority to challenge some of the conditions of the contracts, and that the courts will rule in our favor or in the receiver's favor, because of the emergency powers that the law refers to."

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