Central Falls, a city of about 19,000 just north of Providence, is both the smallest and most densely populated city in Rhode Island. It also has the distinction of being one of a handful in the US to file for bankruptcy. ..Central Falls' economy began to decline in the 1970s with the departure of manufacturers, particularly in the textile sector where 11 plants closed between 1997 throught 2007. ..Financial straits of the city government of Central Falls have worsened in the past decade as the state cut money to cities and towns and pensions and pensioner health insurance for city employees have accumulated to the extent that the city government has been in receivership since it declared insolvency in May 2010. On August 1, 2011 Central Falls filed for bankruptcy under Chapter 9, Title 11 of the United States Code. It made the filing as it grappled with an $80 million unfunded pension and retiree health benefit liability that is over five times its annual budget of $17 million. The state receiver has since cut the pensions of its retirees by up to 55%. ..Adding to these difficulties, the Mayor was accused in 2010 of rampant fraud and corruption including no-bid contracts and kickbacks from a high school friend, who was granted almost $2,000,000 in overpriced property boarding fees. ..The city's demographics have changed during this period with an influx of people from Latin America. By 2000, the population was almost half Hispanic, according to U.S. Census Bureau data. By 2010, that ratio had risen to about 60 percent...Crime has also steadily increased in step with city's economic decline. It was crowned cocaine capital of New England by Rolling Stone magazine in 1986. ..A recent US District Court ruling that the city's school department is in fact not a part of the city should clear the way for the city to possibly come out of bankruptcy. Even so, the economic challenges to this small community aren't likely to change anytime soon. .