Fitch Ratings revised its outlook on Pawtucket, R.I., general obligation bonds to positive while affirming its BBB-minus rating, the lowest rung of investment grade.
“Increased revenues and expenditure cuts have helped stabilize city operations,” the rating company said in a statement late Tuesday afternoon. “Fitch views management projections for additional improvement in operations and reserves as reasonable given management’s effectiveness in cost cutting, efficiencies gained through attrition, and revenue improvement.”
Affected are the following GO series: $9.4 million of Series 2005, $4.6 million of Series 2001, and $900,000 of Series 2002B.
Pawtucket, with a 71,000 population, lies five miles north of capital city Providence and adjacent to former bankrupt city Central Falls, realized a sharp drop in reserves from fiscal years 2009 through 2011 after state aid cuts, increased employee costs and what Fitch called recessionary pressures to non-tax revenues.
According to Fitch, the city reversed that trend in fiscal 2012, with revenues exceeding budget by $519,000 and expenses under budget by $1.4 million.
“Supporting the positive results were strong tax collections and interest revenues and lower expenses due to employee attrition and interest revenues, and lower expenses due to employee attrition and cuts in fire department spending,” Fitch said.
