Providence, R.I., which two years ago faced what Mayor Angel Taveras called a "Category 5 fiscal hurricane," reported a $1.6 million surplus for the fiscal year ended June 30, 2013.
Rhode Island's capital faced a $110 million structural deficit in fiscal 2012.
In the city's comprehensive annual financial report, finance director Lawrence Mancini cited the agreement Taveras forged with retired firefighters and police officers over reduced pension benefits, renegotiated union contracts and increased contributions in lieu of taxes from Brown University and six other nonprofit institutions.
Taveras, a Democratic candidate for governor, said the moves averted a possible bankruptcy filing.
"The stable outlook reflects the recent progress toward obtaining structural balance," Moody's Investors Service wrote in September while revising its outlook to stable from negative. Moody's rates the city's general obligation bonds Baa1 while Fitch Ratings and Standard & Poor's assign BBB ratings.
According to Mancini, outstanding governmental and business-type activity bonds as of last June 30 totaled $632 million.
