Standard & Poor's has upgraded East Providence's bond rating to "A" from "BB+" -- a five-notch increase in one swoop that makes the city's bonds investment-grade.
City Manager Peter Graczykowski made that announcement to the City Council at its meeting Tuesday night, Oct. 1.
"This is really good news and will save the city a lot of money in borrowing when it needs to going forward," the city manager said.
He gave a lot of credit for the rating to the former Budget Commission, all city workers and its elected officials. The new bond rating has been in the works for a couple of weeks, he said.
The upgrade of the general obligation rating reflects the city's improved financial performance and financial and liquidity position, Graczykowski said in a press release sent out just before the meeting started.
Factors contributing to the rating include: adequate budgetary flexibility; strong financial performance in last fiscal year due to significant expenditure reductions and consolidations; stronger financial management practices and institutional framework; as well as the city’s low debt to market value and improved pension funding. The stable outlook reflects the city’s focus on rebuilding its operating flexibility and enhancing financial management controls.
“The fact that Standard and Poor’s increased our rating to ‘A’, five levels above the former rating of ‘BB+,’ is a real positive," he said. "We are very pleased and proud that the hard work of the East Providence Budget Commission as well as the City Council, School Committee, and City and School management teams has been recognized so soon.”
Mayor James Briden said in the press release: “The City of East Providence now has an investment grade credit rating. This is a great day for our city and our taxpayers. This should create significant savings in future borrowing costs for the city.”
Graczykowski added, “I would also like to recognize Finance Director Malcolm Moore and Finance Advisor Paul Luba, along with State Director of Revenue Rosemary Booth Gallogly and Deputy Director of Revenue Christy Healey, and representatives of FirstSouthwest, our Financial Advisor, who recently joined me on the rating call with Standard and Poor’s to discuss the City’s progress. Our goal now is to continue to sustain balanced operating results after the departure of the Budget Commission.”