Agency Removes East Providence From Credit Watch

Moody's Investors Service recently confirmed East Providence has a "stable' financial rating, taking the city .

School committee members announced the good news during Tuesday night's . Interim Superintendent Edward Daft said he was hopeful bonds to fund would finally be issued. City bonds are secured by a general obligation unlimited tax pledge, according to the report.

"Concurrently, Moody's has also confirmed the Baa2 rating on the Rhode Island Health and Education Building Corporation Bond Issue," according to the report.

The city is currently saddled with approximately $28.7 million in outstanding debt.

The report also provided a summary of the city's financial strengths and challenges.

Strengths

• Moderately-sized tax base
• State appointed budget commission in place to help stabilize financial position
• City is budgeting for full pension and OPEB funding in 2013
• City has identified several new revenue streams and significantly cut expenditures

Challenges

• Continued weakness in financial operations
• Heavy reliance on cash-flow borrowing, with uncertain market access
• Severely underfunded pension funds and increasing fixed costs, including pension obligations
• Limited financial flexibility from growing accumulated deficit in the School Unrestricted Fund
• Limited ability to raise property tax revenue under city and state property tax caps

To read the full report, click on the attached .pdf.