March 28 Rhode Island is handing control of East
Providence back to local elected officials after the nearly
insolvent city improved its finances under the 15-month watch of
a budget commission, state officials said on Thursday.
The state-appointed commission, established in December
2011, helped East Providence craft a recovery plan that was
modeled on credit rating agency recommendations, according to
city budget documents.
Unlike some other states, Rhode Island has strict laws that
give state officials a clear path of intervention in fiscally
distressed local governments.
In the tiny Rhode Island city of Central Falls, state
intervention led to bankruptcy in August 2011. Only 13 months
later, the city emerged, leaving bondholders unscathed but
slashing retirees' pension payments in half.
The East Providence commission will provisionally hand back
the reins to the city manager, city council and school officials
until the state makes a final determination that the commission
is no longer needed, Governor Lincoln Chafee and state Revenue
Director Rosemary Booth Gallogly said in a statement.
With the help of the commission, East Providence, a city of
about 47,000 residents, has eliminated a multi-year operational
deficit, reduced short-term borrowing and is paying its full
annual contribution to its pension fund, the statement said.
City division budgets were cut by 20 percent on average, it
Three of the five commission members were appointed by the
state. The other two were City Council President Jim Briden and
City Manager Peter Graczykowski.