Rhode Island’s cash advance to East Providence is a credit positive for the financially strapped city, according to Moody’s Investors Service.
On Jan. 18, Gov. Lincoln Chafee signed legislation authorizing the advance payment of education aid to distressed local governments, which enabled fiscally challenged East Providence to receive $12.6 million.
Moody’s placed its Ba1 rating for the city under review for possible downgrade.
“The advance is a credit positive for East Providence because it will reduce dependence on interim cash-flow borrowing, which has added additional costs and risks to the city’s strained finances,” Moody’s said in a statement.
East Providence, with a population of just under 49,000, is under the second level of state oversight, that of a five-member budget commission.
