CENTRAL FALLS, R.I. (WPRI) – Less than five years after the city emerged from Rhode Island’s first-ever municipal bankruptcy, Central Falls has made significant financial progress and is closing in on having an investment-grade credit rating again, Moody’s Investors Service said Tuesday.
Moody’s analysts upgraded Central Falls’ credit rating by one notch, from Ba2 to Ba1, and gave the city a positive outlook, indicating it may be upgraded again within 12 to 24 months – which would make Central Falls’ bonds investment-grade, according to Moody’s spokesman David Jacobson.
The announcement comes just two months before the city will complete its court-ordered post-bankruptcy recovery plan, which ends June 30. After that, Mayor James Diossa and the City Council will have more control over the city’s finances and management.
“Moody’s latest ratings report reiterates the hard work that has been done in Central Falls’ from the dark days of bankruptcy and receivership to the present,” Diossa said in a statement. “Our efforts and dedication to following fiscally sound budgeting practices are clearly paying off; leaving the city in a strong position.”
In a report that accompanied the upgrade, Moody’s analysts praised Diossa’s administration for prudent financial management and its efforts to spur economic development. They said the city’s reserves totaled nearly $4 million as of June 30, 2016. But they also expressed concern about the city’s high fixed costs, with 30% of its budget going toward spending on retirees and debt service.