Central Falls, R.I., is considering a fiscal 2017 budget – the last under a court-approved five-year bankruptcy plan – with provisions that Mayor James Diossa said would enhance the city's reputation in the capital markets.
His proposed $18 million spending plan, down fractionally from the enacted budget of the previous year, includes a rainy-day fund equal to 1% of the new plan.
"It's the responsible thing to do, and rating agencies have taken notice," said Diossa, who presented the budget to the City Council on May 12.
Central Falls, which filed for bankruptcy in August 2011 and exited 13 months later, has since received three upgrades from Moody's Investors Service, from B2 to Ba2, though it remains in speculative-grade range. Moody's assigns a stable outlook.
The budget includes an additional $100,000 to other post-employment benefits, or OPEB, trust to match the city's initial allocation last year. Diossa also submitted, for the second straight year, 107% of its actuarially required contribution to the city's wobbly pension plan.
The budget also calls for a 3.4% reduction in the city's mill rate.
Central Falls, Rhode Island's poorest city with 19,000 residents in one square mile seven miles north of Providence, cited an $80 million unfunded pension liability in its bankruptcy filing.
According to Diossa, Central Falls has increased its pension funding level from 14% in 2010 to 22%. Its goal is to achieve 60% funding within 10 years.
