Woonsocket City Councilor James Cournoyer wasn’t shocked to see Fitch Ratings pull its credit ratings for the city on July 14 for failing to turn in a fiscal 2023 audit, among other financial statements.
“The only surprise was that it took them as long as it did,” said Cournoyer.
Moody’s Ratings yanked its bond ratings in October for the same reason; S&P Global Ratings lowered its rating of city water bonds the next month.
Without bond ratings, the northern Rhode Island city with the sixth largest population in the state can’t borrow any money to pay for future capital projects like schools or infrastructure upgrades — not an immediate concern for Cournoyer since the city isn’t planning to issue bonds. Much more distressing is the disarray of city finances, including the still-incomplete fiscal 2023 audit, now more than 18 months overdue.
A newly hired city finance director and promise of near completion on the overdue report offer a glimmer of hope. Not that the problem ends there.
“We’re digging ourselves out of a hole, a deep hole,” said Cournoyer, who works as a finance director for Textron, Inc. “We’re grappling with 10 years of a Lisa Baldelli-Hunt regime. She basically destroyed the financial organization in the city of Woonsocket. Now, we’re left to clean up.”
Baldelli-Hunt, Woonsocket’s former mayor, resigned on Nov. 9, 2023 in the wake of a land purchase that violated the city charter’s rules around notice to the council, and appeared to be a sweetheart deal with her former boss. The deal was uncovered and reported by WPRI-TV 12 in October 2023. No criminal charges have resulted. But her specter continues to haunt city hall, as city officials grapple with the fallout from her decade of leadership.
Baldelli-Hunt’s resignation came less than two months before the Dec. 31, 2023 deadline by which all cities and towns across Rhode Island are required under state law to turn in an audited financial report to the Rhode Island Office of the Auditor General.
Punctuality is not a new problem, nor one isolated to Woonsocket, as municipalities nationwide struggle to turn in financial reports amid staff vacancies and the rapid decline of accounting firms able and willing to perform local government audits, said David Bergantino, the state auditor general.
A year ago, in July 2024, two other municipalities, East Providence and Coventry, had also failed to submit their fiscal 2023 audited statements to the auditor general, according to the office’s compliance report. Both have since turned in the reports, Bergantino confirmed Thursday. Woonsocket, on the other hand, has not.
The price of paperwork problems
Its lack of timely financial reporting doesn’t just risk bond ratings. It also compromises the city’s ability to form an accurate spending plan for the current fiscal year — risking major deficits if it underestimates expenses or overshoots revenue, Bergantino said.
“At this point, we’re in fiscal 2026,” Bergantino noted. “When you don’t have the prior fiscal year done, or the last two, it impacts current operations.”
Not to mention the separate but also overdue audited statements to the federal government on how the city spent federal pandemic aid and routine grant funding. Baldelli-Hunt’s land deal relied on $1.1 million in federal funding to buy a five-acre plot of vacant land for use as affordable housing.
The city has since reversed the deal and commissioned a $15,000 investigation — later forwarded to law enforcement — that detailed her negotiations with her former boss, who owned the land, on the purchase price, as well as her concerted efforts to keep the transaction secret from staff and the city council — violating the city’s charter, according to news reports. But the U.S. Department of Housing and Urban Development grant funds Baldelli-Hunt tried to use to buy the land could leave the city vulnerable to federal repercussions for misusing its money, said John Ward, former city council president who unsuccessfully ran for mayor in 2024.
We’re grappling with 10 years of a Lisa Baldelli-Hunt regime. She basically destroyed the financial organization in the city of Woonsocket. Now, we’re left to clean up.
Ward, who retired after 17 years as finance director for the town of Lincoln in 2023, made the city’s financial state a key part of his campaign. He lost the November 2024 nonpartisan mayoral race by 3 percentage points to Mayor Christopher Beauchamp, who took over the mayoral post after Baldelli-Hunt resigned in 2023.
Leading into the election, Woonsocket’s paperwork problem took a turn for the worse after the accounting firm hired to audit its financial statements abruptly quit, also first reported by WPRI.
In a May 28, 2024 letter to the council, Mary Sahady, principal for Hague, Sahady & Co., listed five reasons for the decision, including continued rescheduling of meetings, missing reports and untimely and incomplete responses to the firm’s requests for information. Sahady also referenced an accusation made by some council members at a May 22 meeting that Baldelli-Hunt swayed the firm’s prior audit reports.
Ward and Cournoyer blamed the firm’s resignation squarely on Baldelli-Hunt, even though she had left city hall six months before.
“The issues surrounding their resignation all related to the games and misinformation and delays occurring under the Baldelli-Hunt administration, without question,” Cournoyer said. “I don’t care who the next mayor was, they would be in the same position after inheriting the mess they got from her.”
Beauchamp declined to answer any questions for this story.
The blame game
Baldelli-Hunt pointed the finger back at the city leaders still in office.
“How many years do I need to be gone before they start to realize I am not the problem?” she said in an interview Thursday.
Baldelli-Hunt touted the city’s financial accomplishments under her tenure as mayor, from the brink of receivership when she started in 2013 to a balanced budget, less debt and strong ratings from the major credit ratings agencies.
“I turned the city of Woonsocket around,” she said. “I took the bond rating from junk to stable and positive. I did a hell of a job in this city and I am proud of it.”
She continued, “Maybe, potentially, they’re just ill-equipped to handle things.”
Sahady’s letter reinforces Baldelli-Hunt’s final point, noting that insufficient city financial staff has led to inadequate tracking of its money. When Beauchamp became mayor in November 2023, he immediately fired the city’s finance director. The city has since struggled to hold on to a permanent replacement, relying on a longtime finance department employee Christine Chamberland to serve as interim finance director for a majority of the next 20 months.
How many years do I need to be gone before they start to realize I am not the problem?
Meanwhile, Sahady’s surprise resignation sent the city scrambling to find a new accounting firm to audit its financial statements. Sahady had already completed more than 80 hours of fieldwork and meetings on the fiscal 2023 audit — with a $8,554 cost, according to the bill included with the resignation letter.
The subsequent contract with CBIZ forced the city to start the process over with the new, more expensive firm. Cournoyer estimates the city has spent more than $300,000 for CBIZ to audit its fiscal 2023 statements based on the agreed-upon hourly rate.
In May 2025, CBIZ submitted a draft audit report to the City Council for review, with the caveat that the report remains unfinished, awaiting major updates, including lengthy and detailed financial disclosures from the lawsuits filed against the city, which continue to multiply. The cases are mostly unrelated to the land deal, spanning disputes over allegedly inaccurate property tax assessments, the environmental and health effects of improperly treated sewage flowing into the Blackstone River, and the wrongful arrest of an unhoused person. The fired former finance director, Cindy Johnston, has also sued the city, alleging her termination violates anti-discrimination laws related to her disability, The Valley Breeze reported.
“As every day goes by, any new lawsuit or new activity also has to be disclosed,” Cournoyer said.
The draft audit has not been made public, but a copy was obtained by Rhode Island Current. The 200-page report shows the city ended fiscal year 2023 $165.5 million in the red, due to $248.1 million overspent through its general government spending account, partially offset by revenue gains in its separate funds for water and wastewater treatment services.
CBIZ does not include any commentary on the city’s fiscal 2023 financial performance, which saw a $5.6 million decline in its net position compared with the prior year.
But Cournoyer fears that even after the audited report is finally finished, and resubmitted to Fitch and Moody’s, the city’s new credit rating will not be as strong because of its deficit.
Fitch rated Woonsocket’s bonds at an A+ in July 2024, while Moody’s upgraded its assessment of the city’s bonds to “Baa2” in October 2023. Both are considered investment-worthy grades, though not the strongest possible ratings.
Calling in financial cavalry
One spot of rare good news is the city’s newly hired finance director, James Lathrop, who started on July 21. Some might not view the $145,000-a-year job of putting the city’s broken financials back together as worth the headache. Lathrop was unfazed.
“This is no more difficult than anything I’ve done in Chester and Lansdale,” Lathrop said of his most recent two jobs resuscitating a pair of Pennsylvania municipalities from receivership and multimillion-dollar bank statement discrepancies, respectively.
A former 2022 Republican state general treasurer candidate and Bryant University graduate, Lathrop has made a career of helping cities and towns escape difficult financial situations, including others in Rhode Island. He expects Woonsocket’s fiscal 2023 audit to be finished and ready to submit in the next two weeks, with plans to immediately begin the also overdue fiscal 2024 audit.
Ward still has his doubts.
“This is not just about being a good bookkeeper,” he said of sorting through the tranche of mismatched and missing reports spanning three or more years. “This is about, can you play chess?
This story was originally published by the Rhode Island Current.
