Moreau v. Flanders

OPINION

for the Court.

Background: A City in Distress

We are called upon to determine the constitutionality of G.L.1956 chapter 9 of title 45, in the face of a challenge by the Mayor and City Council of the City of Central Falls. Before we begin our analysis, we find it appropriate to pause and compliment the detailed, well-written, and scholarly decision of the trial justice, whose judgment we affirm completely and with confidence.

The City of Central Falls long has enjoyed the reputation of being one of Amer-ica’s most densely populated cities. Packed within 1.2 square miles live 19,000 people. The General Assembly created the city in 1895, partitioning it from the neighboring Town of Lincoln. Over the years, Central Falls became a bustling industrial center and the home to a variety of proud immigrant and ethnic groups. Over time, however, the city experienced financial distress, and by 1991, it no longer had the financial resources to operate its schools, resulting in a takeover by the state. In more recent years, Central Falls, like other communities, has continued to struggle financially. With the closure of several manufacturing facilities, the city’s tax base dwindled, causing its fiscal woes to become exacerbated. With its largest taxpayers gone, no land to develop, and confronted with the crushing realities of a devastating local and national economy, there is no surprise that the city’s leaders felt that their backs were up against the wall. And thus, believing there was no other viable solution to the city’s dire financial plight, the mayor and city council in May 2010, petitioned the Superior Court for the appointment of a receiver, a petition that was granted by the court.

At the same time, however, legislation that would enact a major revision to chapter 9 of title 45 was working its way through the General Assembly. Signed into law in June that same year, the legislation prohibited municipalities from seeking the appointment of judicial receivers, but instead authorized the director of the Department of Revenue to implement a defined process to restore stability to a fiscally imperiled city or town. That process involved a tiered system of oversight, including appointments of a fiscal overseer, a budget and review commission, and finally a nonjudicial receiver.

On July 16, 2010, retired Superior Court Justice Mark A. Pfeiffer (Pfeiffer or receiver) was appointed by the director of the Department of Revenue to serve as receiver for the City of Central Falls under the terms of chapter 9 of title 45, as amended by P.L.2010, ch. 27, § 1, entitled, “An Act Relating to Cities and Towns— Providing Financial Stability” (act or Financial Stability Act).1 The City of Central Falls is a duly authorized municipal corporation that has a home-rule charter adopted in accordance with article 13 of the Rhode Island Constitution.2 The city’s *570form of government includes a mayor, who serves as chief executive officer, and a five-member city council. Both the mayor and the city council are elected by the city’s residents. At all times relevant to this cause of action, Charles D. Moreau (Mor-eau or mayor) has been the mayor. Similarly, at all times relevant to this matter, William Benson, Jr. (Benson or council president), Richard Aubin, Jr., Eunice De-LaHoz, Patrick J. Szlastha, and James Diossa3 (collectively, city council) have been the members of the city council.

Facts and Travel

In an effort to stem the effects of its financial distress, the city council, by resolution, and the mayor authorized the filing of a verified petition for appointment of a receiver with the Providence County Superior Court on May 18, 2010. The circumstances preceding this verified petition, which named the City of Central Falls as defendant, included a June 30, 2009, independent audit, which revealed: (1) that the city had total net assets of negative $16,866,819; (2) an annual operating budget for 2010 and a proposed operating budget for 2011 just under $18 million, with anticipated shortfalls of $3 million for 2010 and $5 million for 2011; (3) municipal bond indebtedness of over $10 million; (4) the city’s sale of much of its chief pension fund to satisfy current pension obligations; (5) accrued pension fund liability exceeding $35 million, supported by assets of only $4 million; (6) the city’s failure to make any contributions to the pension fund in 2009, despite a requirement that it make a contribution in excess of $2.7 million for that year; (7) the fact that increasing the property tax rate by the maximum allowed under the state cap of 4.5 percent would yield additional revenues of less than $500,000; and (8) a request by Central Falls to the General Assembly to grant it the authority to file for Chapter 9 bank-ruptey pursuant to Title 11 of the United States Code, providing for the adjustment of debts of a municipality.

In their verified petition to the Superior Court seeking the appointment of a judicial receiver, the mayor and the city council represented:

“Plaintiffs have determined that the City is fiscally insolvent due to revenue shortfalls and state budget cuts, along with collective bargaining agreements and pension obligations it cannot afford.

“In the opinion of Plaintiffs, the elected leaders of the City, it is urgent and advisable that a Receiver be appointed immediately to oversee the affairs of the City to assist in balancing the City’s budget through spending cuts and revenue enhancement * *

After a hearing on the petition, the Superi- or Court, on May 19, 2010, entered an order appointing attorney Jonathan Savage as temporary receiver for the City of Central Falls; a permanent receiver was to be appointed “on or before June 8, 2010.” In its order, “the [c]ourt determined that [appointment of a receiver] would be in the best interest of the Defendant’s taxpayers, employees, creditors, vendors, and pensioners and other interested parties * * *.” The order further delineated the terms and conditions of the *571temporary receivership as well as the powers conferred on the receiver.

As a result of the petition for judicial receivership, the already precarious credit rating of Central Falls was reduced to “junk-bond” status. Even more ominously, state officials were informed by financial rating agencies that, as a result of Central Falls’ receivership, capital markets would view debt financing to Rhode Island cities and towns as extremely risky, and that as a consequence such financing would become more expensive for Rhode Island municipalities. Faced with that scenario, the General Assembly determined that judicial receiverships, initiated solely at the discretion of a municipality, were not in the best interest of the citizens of Central Falls or the state, and that municipally initiated judicial receiverships threatened the financial well-being of all the state’s cities and towns, and of the state itself. The General Assembly moved with alacrity, revising chapter 9 of title 45 (Budget Commissions) for the purpose of creating a more effective mechanism to identify and respond to dire financial adversity confronting municipalities. On June 11, 2010, a major revision was signed into law. Significantly, § 45-9-1, as amended by P.L.2010, ch. 27, § 1, set forth:

“Declaration of policy and legal standard. It shall be the policy of the state to provide a mechanism for the state to work with cities and towns undergoing financial distress that threatens the fiscal well-being, public safety and welfare of such cities and towns, or other cities and towns or the state, with the state providing varying levels of support and control depending on the circumstances. The powers delegated by the General Assembly in this chapter shall be carried out having due regard for the needs of the citizens of the state and of the city or town, and in such a manner as will best preserve the safety and welfare of citizens of the state and their property, and the access of the state and its municipalities to capital markets, all to the public benefit and good.”

Of great significance, this revision foreclosed the right of municipalities to petition the courts for the appointment of a judicial receivership, as had been done by Central Falls.4 This was of particular relevance to Central Falls because § 4 of the act (P.L. 2010, ch. 27) made the revision retroactive to May 15, 2010—four days before the order of the Superior Court that granted the mayor and city council’s request for a judicial receiver.

However, any potential conflict that may have arisen because of the passage of the new act and the duties of the judicially appointed receiver was avoided when May- or Moreau and the city council jointly sought a consent order, by a city council resolution approved June 17, 2010, requesting the dismissal of “the pending Superior Court action with prejudice after transitioning the Receivership from Superior Court to the State Department of Revenue.” The council’s resolution declared that city leaders were forced to seek a receiver “due to fiscal insolvency as a result of revenue shortfalls, state budget cuts, along with collective bargaining agreements and pension obligations it cannot afford * * Shortly thereafter, the Superior Court entered the consent order, signed by counsel for the mayor and city council, permitting withdrawal of the petition for judicial receivership with prejudice and outlining a transition period to move *572Central Falls into state receivership “[pjursuant to the terms of the Act Relating to Cities and Towns — Providing Financial Stability.”

In a letter on July 16, 2010, the director of the Department of Revenue appointed Pfeiffer as receiver for the city. In turn, by letter dated July 19, 2010, Pfeiffer informed Mayor Moreau that he had been appointed receiver of Central Falls and that he had assumed the duties and functions of the office of mayor. The receiver wrote:

“R.I. Gen. Laws § 45-9-7 provides the receiver with ‘the right to exercise the powers of the elected officials’ of a municipality and that the ‘powers of the receiver shall be superior to and supersede the powers of the elected officials’. That statute further provides that the elected officials of the city or town ‘shall serve in an advisory capacity to the receiver’.

“Effective immediately, I have assumed the duties and functions of the Office of Mayor. As a result of my role, your responsibility will be limited to serving in an advisory capacity, on such occasions as my office may seek input from you. Accordingly, pursuant to R.I. Gen. Laws § 45-9-6(d)(g) your compensation will be reduced to $1,000.00 bi-weekly effective today.”5

Mayor Moreau was not afforded an opportunity to be heard regarding the imposed changes.

In a resolution passed on August 4, 2010, the city council authorized the hiring of independent legal counsel “for guidance and/or litigation concerning the numerous matters that currently affect the City, the Central Falls Community as a whole and the discharge of [the] City Council’s obligations * * The very next day, citing relevant provisions of the act, the receiver informed the city council by letter of his decision to rescind the resolution. Specifically, the receiver cited §§ 45—9—7(b)(1) and 45—9—6(d)(17). Section 45-9-6(d)(17) grants the receiver the power to “[ajlter or rescind any action or decision of any municipal officer, employee, board, authority or commission within fourteen (14) days after receipt of notice of such action or decision.” The receiver’s letter concluded, “I will review tjie organization of the Office of Solicitor to [ejnsure that the Council receives legal advi[c]e it may require from time to time to perform its duties.”

Obviously unhappy with that turn of events, on September 20, 2010, the city council passed a four-page resolution entitled, “In Support of the Mayor and the City Council contend [sic ] it is necessary to determine the constitutionality of R.I. General Laws 45-9-8, 45-9-5, 45-9-6 and 45-9-7.” That resolution authorized the engagement of independent legal counsel to file a legal action to challenge the constitutionality of the act. However, on September 22, 2010, the receiver, by letter to the council president, rescinded the resolution of September 20, 2010 as well. That letter said that “with respect to the issue of whether the Act or any sections thereunder should be subject to constitutional challenge, under R.I. Gen. Laws Section 45—9—7(c), the City Council is hereby directed-to serve solely in an ‘advisory' capacity.” 6

*573On September 23, 2010, the receiver filed a verified complaint with the Superior Court, seeking a declaratory judgment and injunctive relief against Mayor Moreau and City Council President, William Benson, Jr. Undeterred, on September 27, 2010, the council, citing its September 20 resolution, filed its own multi-count cause of action in Superior Court. Its complaint named the director of the Department of Revenue and the state-appointed receiver as defendants. The two actions were consolidated, and the case was tried on an agreed statement of facts in the Superior Court. In a comprehensive opinion dated October 18, 2010, the trial justice addressed sundry arguments pertaining to the constitutionality of the Financial Stability Act itself, including the act’s potential incompatibility with the home-rule amendment of the Rhode Island Constitution. In his cogent decision, the trial justice ruled:

“[T]he Court finds that the Act is constitutional * * *. [T]he Court holds that the Act applies alike to all cities and town[s], addresses a statewide concern, does not alter a municipality’s form of government, and is substantially related to the public welfare. Furthermore, the Court holds that the ‘Declaration of Policy and Legal Standard’ and the five-tiered mechanism delineated within the Act provide sufficient standards, princi-pies, and safeguards by which to guide the administration of the Act and prevent against arbitrary and capricious actions. Additionally, the Court holds that neither the Mayor nor the City Council has been removed from office and that they have failed to establish a claim for procedural due process.”

Judgment was entered on October 21, 2010.7

The mayor and city council timely appealed the judgment of the Superior Court. The matter was assigned to the regular calendar for a full briefing and hearing, and the parties appeared before this Court on February 1, 2011.

Standard of Review

In reviewing the constitutionality of statutes, “we begin with the principle that legislative enactments of the General Assembly are presumed to be valid and constitutional.” Newport Court Club Associates v. Town Council of Middletown, 800 A.2d 405, 409 (R.I.2002) (quoting Rhode Island Depositors Economic Protection Corp. v. Brown, 659 A.2d 95, 100 (R.I.1995)). This Court approaches constitutional questions with great deliberation, caution, and even reluctance, and we do not declare a statute void unless we find it to be constitutionally defective beyond a reasonable doubt. Gorham v. Robinson, *57457 R.I. 1, 7, 186 A. 832, 837 (1936). Moreover, we will attach to the enactment every reasonable intendment in favor of constitutionality. Gem Plumbing & Heating Co. v. Rossi, 867 A.2d 796, 808 (R.I.2005) (quoting Lynch v. King, 120 R.I. 868, 875, 391 A.2d 117, 121 (1978)); City of Pawtucket v. Sundlun, 662 A.2d 40, 45 (R.I.1995).

Further, it is well settled that “the party challenging the constitutional validity of an act carries the burden of persuading the court that the act violates an identifiable aspect of the Rhode Island or United States Constitution.” Newport Court Club Associates, 800 A.2d at 409 (quoting Brown, 659 A.2d at 100). “Unless the party challenging the statute’s constitutionality can ‘prove beyond a reasonable doubt that the act violates a specific provision of the [state] constitution or the United States Constitution, this Court will not hold the act unconstitutional.’ ” Mackie v. State, 936 A.2d 588, 595 (R.I.2007) (quoting Cherenzia v. Lynch, 847 A.2d 818, 822 (R.I.2004)).

Analysis

As a preliminary matter, we address the contention of the receiver that the mayor and city council lack the standing necessary to challenge the constitutionality of the act. Our standard for establishing standing requires that a plaintiff alleges that the challenged act or action “has caused him or her injury in fact, economic or otherwise.” Pontbriand v. Sundlun, 699 A.2d 856, 862 (R.I.1997) (quoting Rhode Island Ophthalmological Society v. Cannon, 113 R.I. 16, 22, 317 A.2d 124, 128 (1974)). Such an injury must be “concrete and particularized,” and “actual or imminent,” and not merely “conjectural or hypothetical.” Id. at 862 (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)).

Here, we have little difficulty in concluding that the mayor and city council, in their individual and official capacities, have standing to challenge the constitutionality of the act. They allege, and the receiver admits, that their duties and authority have been curtailed based on the powers provided to the state-appointed receiver under the act. There is no question that the decision-making authority of the mayor and city council have been restricted profoundly by the application of various provisions of the act. Moreover, reputations of persons who hold such high-profile public positions certainly suffer adverse impacts. Having determined that the mayor and city council have standing, we now address the merits of the various arguments raised.

I

The Act Does Not Alter the Form of Government of Central Falls in Contravention of the Home-Rule Amendment of the Rhode Island Constitution

The appellants, the mayor and city council, contend that the act treads upon the city’s right to self-governance as guaranteed by article 13 of Rhode Island’s Constitution. Section 1 of article 13, generally referred to as the home-rule charter amendment, provides that “[i]t is the intention of this article to grant and confirm to the people of every city and town in this state the right to self government in all local matters.” Specifically, the mayor and city council argue that the act offends article 13, section 4, which says in pertinent part:

“The general assembly shall have the power to act in relation to the property, affairs and government of any city or *575town by general laws which shall apply alike to all cities and towns, but which shall not affect the form of government of any city or town.” (Emphasis added.)

In their brief, the mayor and city council argue that, in a manner “completely counter to the democratic principle of checks and balances,” the broad powers vested in the receiver pursuant to the act impermis-sibly “affect the form of government” of Central Falls.

In considering the positions of the parties on this issue, we do not write on a blank slate. In Marran v. Baird, 635 A.2d 1174, 1176 (R.I.1994),8 this Court addressed a constitutional challenge to the predecessor version of chapter 9 of title 45, entitled “Budget Commissions,” under which the director of the State Department of Administration was empowered to appoint a nine-member commission to examine and advise the Town of West Warwick after that town’s municipal bonds had been downgraded to “junk-bond” status by a bond rating agency. In Marran, the plaintiff sought to enjoin the activities of the commission, alleging that the activities of that body collided with the right of the town to self-governance under the home-rule amendment and was, in addition, an unlawful delegation of legislative power to the commission. Marran, 635 A.2d at 1176-77. In that case, the Court wrote:

“Article 13, sections 1 and 2, of the Rhode Island Constitution grants the right of self-government in all local matters to the people of every city or town that has adopted a charter consistent with the Rhode Island Constitution and laws enacted by the General Assembly. In re Advisory Opinion to the House of Representatives, 628 A.2d 537, 538 (R.I.1993). * * * [H]owever, ‘the power to act in relation to the property, affairs and government of any city or town by general laws which shall apply alike to all cities and towns, but which shall not affect the form of government of any city or town.’ R.I. Const. art. 13, sec. 4. If the General Assembly does act in relation to a particular city or town, such legislative action must be submitted to the electors of the town.” Marran, 635 A.2d at 1177.

The Court then made the important observation that, in relation to the home-rule charter amendment, the constitutional validity of an enactment by the General Assembly under its reserve power “hinges upon resolution of two issues: (1) whether [the enactment] ‘applies alike’ to all municipalities and (2) whether it affects any municipality’s form of government.” Id. at 1178.

A

Whether the Act Applies Alike to All Cities and Towns

As to the first issue, we held in Marran that § 45-9-3 was constitutional because the provision “empower[ed] the director to appoint a budget and review commission ‘in any town or city.’ ” Marran, 635 A.2d at 1177. By its own terms the provision did not apply to any specific town or city, and so it was clearly an enactment of general application. The Court contrasted Marran with McCarthy v. Johnson, 574 A.2d 1229, 1231 (R.I.1990), where, because the challenged enactment expressly and solely authorized a suit against the City of Newport, it did not apply alike to all cities and *576towns, was merely a matter of local concern, and therefore, was unenforceable as a violation of the home-rule charter amendment.9 Marran, 635 A.2d at 1177-78. Therefore, “[t]he critical fact is that the * * * legislation applies equally to all cities and towns.” Id. at 1178 (quoting City of Cranston v. Hall, 116 R.I. 183, 186, 354 A.2d 415, 417 (1976)).

Here, similar to the situation in Marran, the challenged act applies on its face to all cities and towns. In our opinion, it is beyond question an enactment of general application. The act does not refer to the City of Central Falls or to any municipality by name. Indeed, the “Declaration of policy and legal standard” of § 45-9-1 asseverates that “[i]t shall be the policy of the state to provide a mechanism for the state to work with cities and towns undergoing financial distress” and “shall be carried out having due regard for the needs of the citizens of the state and of the city or town * * * all to the public benefit and good.” Therefore, we are satisfied that the challenged act is an act of general application that indeed “applies alike” to all municipalities.10

B

Whether the Act Affects the Form of Government of Any City or Town

The second, and perhaps thornier, issue necessary to determine whether a challenged enactment violates protections afforded to municipalities under the home-rule charter amendment is whether the act affects the form of government of any city or town. Marran, 635 A.2d at 1178.

The mayor and city council specifically posit that “ § 45-9-7 alters a municipality’s form of government as it operates to anoint an appointed receiver with the powers of both the legislative branch and the executive branch of government[,] forming a new government * * *.” Section 45-9-7(b) provides that “[t]he receiver shall have the following powers:

“(1) All powers of the fiscal overseer and budget commission under §§ 45-9-2 and 45-9-6. Such powers shall remain through the period of any receivership;

“(2) The power to exercise any function or power of any municipal officer or employee, board, authority or commission, whether elected or otherwise relating to or impacting the fiscal stability of the city or town including, without limitation, school and zoning matters; and

“(3) The power to file a petition in the name of the city or town under Chapter 9 of Title 11 of the United States Code, and to act on the city’s or town’s behalf in any such proceeding.”

Section 45-9-7(c) further provides that:

“Upon the appointment of a receiver, the receiver shall have the right to exer*577cise the powers of the elected officials under the general laws, special laws and the city or town charter and ordinances relating to or impacting the fiscal stability of the city or town including, without limitation, school and zoning matters; provided, further, that the powers of the receiver shall be superior to and supersede the powers of the elected officials * # * »

As all parties involved in this action readily acknowledge, and as is rationally inescapable, the powers granted to the receiver under the act are broad and encompassing; however, this fact alone does not lead us to conclude that the form of government of a city or town has been altered. In Marran, we held that the challenged legislation did not unconstitutionally alter a municipality’s form of government under article 13, where the impact “on a local government [was] contained, delineated, and temporary.” Marran, 635 A.2d at 1178.

The mayor and city council argue that the powers of the receiver are “dictatorial” in nature. We do not agree.11 Although the powers of the receiver are broad and sweeping, they nonetheless are contained and channeled in at least three significant ways: (1) the standards imposed by several sections of the act set forth a deliberate and progressive mechanism by which the state provides the town or city with “varying levels of support and control depending on the circumstances”,12 § 45-9-1; (2) under oversight powers at § 45-9-7, “[t]he director of revenue may, at any time, and without cause, remove the receiver and appoint a successor, or terminate the receivership”; and (3), the receiver — having been appointed under express provisions of the act — is subject to administering any and all powers delegated in accordance with the stated policy purpose of the act as set forth within § 45-9-1. The powers delegated to the receiver are properly cab-ined because they are to be carried out with “due regard for the needs of the citizens of the state and of the city or town, * * * as will best preserve the safety and welfare of citizens of the state and their property, and the access of the state and its municipalities to capital markets, all to the public benefit and good.” Section 45-9-1.

The mayor and city council attempt to distinguish Marran from this case, arguing that under the earlier version of the act, which was in effect when Marran was decided, the powers of the appointed budget commission “last[ed] no longer than the end of the fiscal year” and therefore were clearly, and by definition, “temporary.” Marran, 635 A.2d at 1178; see also § 45-9-3 (repealed). By contrast, appellants point out that under the current version of the act, the director of the Department of Revenue, § 45-9-7, “shall appoint a receiver for the city or town for a period *578as the director of revenue may determine.” For this reason, they argue, “it cannot be definitely determined that a receivership initiated pursuant to R.I. Gen. Laws § 45-9-1 et seq. is not permanent,” and thus, it constitutes an alteration of the local form of governance. We do not totally discount the underlying concerns of appellants, but we nonetheless conclude that the act does not violate the constitution.

In our opinion, the absence of an explicit sunset provision in the statutory framework is indeed a flaw, but we are keenly appreciative of the awesome responsibility of the General Assembly in situations such as this, where the municipality’s financial viability is imperiled.13 Despite the presence of the blemish that the absence of a sunset provision constitutes, we are satisfied that there are sufficient standards that can serve as an objective measure of when the receiver’s oversight should terminate and that, accordingly, the statute passes constitutional muster.14 The oversight by the director of the Department of Revenue must end within a reasonable time after the municipality regains financial stability in accordance with the guidelines set forth in the statute.15 Moreover, judicial relief, by means of an action seeking a declaratory judgment and/or injunctive relief, would be available to municipalities that contend that a receiver has overstayed his statutory authority. Further, although the receivership is not limited to a specified du-rational term, that fact alone does not lead to the legal conclusion that the authority of the receiver is either unlimited or never-ending. Provisions of the act not only anticipate but also provide for the termination of any of the state-appointed agents — be it an overseer, a budget commission, or a receiver — when the municipality’s fiscal health has improved. See, e.g., § 45-9-10(a) (providing that an administration and finance officer reporting to the executive official of the municipality will be appointed “upon a determination, in writing, by the director of revenue that the financial condition of the city or town has improved to a level such that a fiscal overseer, a budget commission or a receiver is no longer needed”). Finally, and perhaps most significant to a temporal consideration, § 45-9-7(c) provides that, even when a receiver has assumed the powers of elected officials, these same elected officials “shall continue to be elected in accordance with the city or town *579charter, and shall serve in an advisory capacity to the receiver.” The express preservation of elected offices and the incumbents who hold those offices, even those serving under onerous impositions of state authority, leads us to conclude that the impact of the act on a town or city’s form of government remains temporary.

Therefore, we are of the opinion that although there has been a temporary impact on the form of government in this instance, because the director of the Department of Revenue and receiver have invoked their statutory powers, that impact is channeled, incidental, and temporary. Under these circumstances, we hold that the legislation does not alter the form of government of any city or town generally, or of Central Falls in particular, “and consequently does not violate article 13.” Marran, 635 A.2d at 1178.

II

The Act Does Not Violate the Separation of Powers Doctrine

The mayor and city council vigorously argue that the act violates the separation of powers doctrine by permitting the collapse of separate and elected municipal executive and municipal legislative functions into one entity — here, the state-appointed receiver. We have held that “[t]he separation of powers doctrine prohibits the usurpation of the power of one branch of government by a coordinate branch of government.” Town of East Greenwich v. O’Neil, 617 A.2d 104, 107 (R.I.1992). In addition, we have said without equivocation that “a constitutional violation of separation of powers [is] an assumption by one branch of powers that are central or essential to the operation of a coordinate branch.” In re Advisory Opinion to the Governor (Ethics Commission), 612 A.2d 1, 18 (R.I.1992) (emphasis omitted) (quoting State v. Jacques, 554 A.2d 193, 196 (R.I.1989)). However, we discern nothing in the Rhode Island Constitution, or in our case law, that guarantees, or even implicates, separation of powers considerations at the municipal level. After considering the arguments raised by the parties, we hold that the separation of powers doctrine is a concept foreign to municipal governance.16

Moreover, after a close reading of the cases cited by appellants, we do not *580agree that they support the proposition that the separation of powers doctrine independently exists at the municipal level. Instead, cases relied on by the appellants stand for a more narrow principle — and one that is consistent with our interpretation of the doctrine — that when a legislature has authorized a grant of power at the municipal level, it alone may interfere with that grant. See State v. Holton, 193 Md.App. 322, 997 A.2d 828, 845 (2010) (holding that “[w]hen the Legislature confers legislative power on a municipal body, a judicial or executive body may not interfere with that power, except as the Legislature authorizes”) (quoting D'Amato v. Superior Court, 167 Cal.App.4th 861, 84 Cal.Rptr.3d 497, 505 (2008)); Board of County Commissioners of Bernalillo v. Padilla, 111 N.M. 278, 804 P.2d 1097, 1102 (1990) (observing that because the traditional basis for the separation of powers doctrine “derives from concern about * * * tyranny” and “because this danger is diminished for a level of government whose powers are subordinated to higher levels of government or otherwise limited,” New Mexico’s constitutional separation of powers provision “does not apply to the distribution of power within local governments”). In our opinion, none of the cases cited by appellant stand for or even imply the independent existence of a separation of powers doctrine solely at the municipal level.

In O’Neil, 617 A.2d at 107, this Court held that there was no separation of powers violation when a state executive agency reviewed an enactment of a town council. We so held because the reviewing state agency and the town’s legislative branch were not coordinate branches of government. Id. Rather, we said that “[t]he town is a creature of the state” and, as such, “[i]ts conflicting or overreaching legislative enactments are subordinate to those promulgated by a branch of state government.” Id.

Although it is true that the home-rule amendment altered the traditional view that a municipality, as a creature of the state, has no inherent right to self-government except those powers granted to it by the state legislature, the right to self-government granted under our state constitution is limited strictly to local matters, and in no way affects the sovereignty of the state. See Lynch, 120 R.I. at 876-*58177, 391 A.2d at 122; Marro v. General Treasurer of Cranston, 108 R.I. 192, 196, 273 A.2d 660, 662 (1971); State v. Krzak, 97 R.I. 156, 162, 196 A.2d 417, 421 (1964); City of Providence v. Moulton, 52 R.I. 236, 246, 160 A. 75, 79 (1932). As in O’Neil, the tension of power here is between a state agency, acting through the director of the Department of Revenue, and a municipal government, acting through its mayor and city council. Thus, even if we were to recognize the separation of powers doctrine at the municipal level, the doctrine would be of no import here, because any alleged usurpation of power would not involve coordinate branches of government.

Ill

The Mayor and City Council’s Compendium of Constitutional Claims

A

Substantive Due Process

The mayor and the city council contend that the act, specifically § 45-9-7, violates substantive due process. The appellants argue that the broad delegation of power to the receiver shocks the conscience because it permits the receiver to act arbitrarily and capriciously in violation of constitutional protections. Substantive due process is grounded in article 1, section 2, of the Rhode Island Constitution, which provides in pertinent part:

“All free governments are instituted for the protection, safety, and happiness of the people. All laws, therefore, should be made for the good of the whole; and the burdens of the state ought to be fairly distributed among its citizens. No person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied equal protection of the laws.”

We have embraced the position that “the due process clause includes a substantive component which guards against arbitrary and capricious government action, even when the decision to take that action is made through procedures that are in themselves constitutionally adequate.” Brunelle v. Town of South Kingstown,