PROVIDENCE – The city is expecting an $8.5 million operating surplus for fiscal 2019, pending an external audit, Mayor Jorge O. Elorza said on Wednesday.
This operating surplus includes an allocation of $3.6 million to the city’s Rainy Day Fund, bringing the total up to $20 million, as well as $4.9 million that will be applied to the city’s reserves.
“It is evident that our commitment to responsible budgeting has brought stability to Providence’s short-term finances,” said Elorza in a statement. “Not long after facing a category 5 fiscal hurricane, we’ve turned a new page by finding efficiencies and eliminating waste. While this is great news, we must be conscious of our long-term finances and continue to work with all Providence stakeholders to ensure we stay on course.”
The city posted a $9.1 million operating surplus in fiscal 2018.
Providence faced a cumulative deficit of $13.5 million in fiscal 2015, which was reduced and then ultimately turned into an annual surplus.
The city’s general bond ratings were upgraded by S&P Global Ratings to BBB+ earlier this year. The ratings company credited the Elorza administration with correcting structural imbalances in its operations, but noted it faced long-term budgetary pressure from its retirement obligations. At that time, the ratings agency did note the city will continue to operate with limited budgetary flexibility and that it remains vulnerable to adverse economic conditions.
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