December 19th, 2011 at 3:45 pm by Ted Nesi under Nesi's Notes, On the Main Site
By Tim White
PROVIDENCE, R.I. (WPRI) – Gov. Lincoln Chafee said Monday his administration is likely to appoint a budget commission shortly to oversee East Providence’s troubled finances.
The governor told WPRI 12 his administration is “very close” to making a decision about increasing its oversight of the city, which required the state’s backing last week in order to borrow $10 million from a major bank and avoid running out of cash. The city wants to borrow $20 million more next month.
“I think it’s a logical next progression to make better headway with our finances in East Providence,” Chafee said of a budget commission, adding that the question of whether to appoint one “is being discussed as we talk,” though there was “no definitive answer” as of early afternoon.
On Nov. 14, the Chafee administration named R.I. State Police Maj. Stephen Bannon as the city’s fiscal overseer, the least serious of three steps it can take to intervene in a city’s finances under the 2010 Fiscal Stability Act. The next step is a budget commission. The third step is a receiver, the role Robert Flanders holds in Central Falls.
More details from Chafee’s exclusive interview with WPRI 12 will air at 6 p.m. Monday.
• Related: Growing crisis in East Prov.; RI’s help required to borrow $10M (Dec. 16)
Ted Nesi contributed to this report.
December 16th, 2011 at 3:29 pm by Ted Nesi under Nesi's Notes
By Ted Nesi
EAST PROVIDENCE, R.I. (WPRI) – The growing financial crisis in East Providence took a worrying turn this week as a credit rating downgrade forced the city to get the state’s help to borrow money and avoid running out of cash.
The city closed a deal Thursday with a major unidentified bank to borrow $10 million in tax-anticipation notes, Peter Graczykowski, who took over as East Providence’s city manager in October, told WPRI.com.
But R.I. Department of Revenue Director Rosemary Booth Gallogly, the Chafee administration’s point person on troubled municipalities, said East Providence wouldn’t have been able to secure the cash without the state government’s backing.
The city would have run of money by mid-month without the $10 million, according to Moody’s Investors Service, which downgraded East Providence’s credit rating to junk status Monday and said “it is not clear that the city will continue to benefit from access to the capital markets necessary … to finance government operations.”
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• Related: Chafee taps state police’s Bannon to oversee East Prov. budget (Nov. 14)
November 14th, 2011 at 3:11 pm by Ted Nesi under Nesi's Notes
By Ted Nesi
EAST PROVIDENCE, R.I. (WPRI) – Gov. Lincoln Chafee’s administration on Monday named Rhode Island State Police Maj. Stephen Bannon, the state police’s chief administrative officer, as a fiscal overseer to deal with East Providence’s budget woes.
Chafee, Department of Revenue Director Rosemary Booth Gallogly and Bannon described the state’s intervention in East Providence as a partnership with the city rather than a punishment.
The fiscal overseer is the first of three potential steps the state can take to intervene in a city’s finances under the 2010 Fiscal Stability Act. Central Falls, which filed for bankruptcy in August, is the only other municipality that’s under the law’s control.
The state isn’t close to formally intervening in any other Rhode Island community’s finances at this point but continues to have informal discussions with Providence and Pawtucket, which are acting to fix their fiscal problems, Gallogly said.
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(photo: Ted Nesi/WPRI)
