Moody's Again Drops East Providence Bond Rating

In the eyes of Moody's Investors Services, East Providence is not the strong horse.

The city's bond rating was downgraded from Baa1 to Ba1- the second since August. The city, along with other Rhode Island communities, was put on a watch list in November.

"This further rating downgrade is an unwelcome development, as the city is stabilizing the current financial position and establishing a long-term plan for recovery," said City Manager Peter Graczykowski.

According to the city manager, many factors added to the downgrade, including the city and , the state's implementation of a , and pension liability issues. But securing loans is still a possibility, he said.

"It doesn't mean we can't do business," he said at Tuesday's school committee meeting, "It will just cost more."

The downgrade came as a surprise he said, as the city has been chipping away at the budget deficit.

The financial status improvements that are not fully reflected in the city’s updated bond rating include: increased public safety pension plan contribution from 20 percent to 26 percent, council resolutions to improve financial reporting monthly and quarterly from the schools to the city, said the city manager.