Financial outlook of Providence: challenging, according to credit agency

By: The Associated Press

PROVIDENCE, R.I. – The financial outlook for Rhode Island’s capital city remains challenging.              

Credit rating agency Moody’s announced Friday it has kept Providence’s Baa1 rating unchanged.

It says the rating reflects the city’s continued financial challenges, including limited reserves and rising pension and healthcare costs.              

Democratic Providence Mayor Jorge Elorza, who took office in January 2015, says the agency acknowledged steps he’s taken to stabilize city finances, as well as the city’s declining unemployment rate.              

Moody’s said the city’s credit rating could improve if it continues to address its structural deficit and reduces financial liabilities.            

It cut Providence’s financial outlook last year after the city ended the 2014-2015 fiscal year with a $5 million shortfall. Fitch, another ratings agency, took similar steps.              

The Elorza administration says Providence ended the 2015-2016 fiscal year with a $6.3 million surplus.

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