Chafee, Taveras lay out city’s financial crisis for rating agencyFebruary 14th, 2012 at 6:37 pm by Ted Nesi under Nesi's Notes, On the Main Site
Governor Chafee joined Providence Mayor Angel Taveras and a phalanx of other officials on Tuesday for a conference call with one of the big three ratings firms, as Wall Street keeps a wary eye on whether Rhode Island’s capital city may follow Central Falls into bankruptcy.
Chafee, Taveras and Michael D’Amico, the mayor’s acting chief of staff, explained the city’s financial situation by phone from City Hall to analysts from Fitch Ratings in New York, Taveras spokesman David Ortiz said. Last year, Fitch blamed the city’s problems on “imprudent budgeting” and “rapid” spending growth.
“The folks from Fitch asked a lot of questions about the state of the city’s finances, and the mayor and Michael D’Amico answered their questions honestly,” Ortiz told WPRI.com. The rating agencies asked for briefings after Taveras warned Feb. 6 Providence is on “the brink of bankruptcy.”
Also in attendance for the Fitch call were Michael Pearis, Providence’s director of finance; Rosemary Booth Gallogly, the state’s revenue director; and Maureen Gurghigian, a managing director with First Southwest in Lincoln who advises the government on bond financing, Ortiz said.
All three major rating agencies – Fitch, Moody’s and S&P - downgraded Providence last March after an emergency review panel uncovered a $180 million two-year structural deficit. Moody’s expressed concern earlier this month about Providence’s strained finances.
Taveras will meet Wednesday morning with Brown University’s president to continue negotiations on an increase in the tax-exempt school’s payments to the city, the AP reported. The mayor will discuss the same issue Friday with the CEOs of hospital groups Lifespan, Care New England and CharterCARE.
• Related: Chafee to attend Taveras’s State of the City address tonight (Feb. 13)