A specially scheduled debt restructuring meeting of the Common Council on Thursday, Jan. 25 happened, but discussion surrounding debt restructuring never occurred.
Instead Alderman Carlo Carlozzi, Democrat, argued with Corporation Counsel on whether or not the last meeting was legal. Carlozzi claimed Alderman Robert Smedley should not have led the meeting and that finance board members were allowed to vote and were not approved to do so by this Council.
Gennaro Bizzaro, of the Corporation Counsel, disagreed with Carlozzi. Carlozzi then promptly adjourned the meeting without discussing or voting on debt restructing.
Before adjourning, Mayor Erin Stewart asked the Council if they knew what this meant referring to a possible tax increase of over 20 percent. The Council did not answer her and voted to adjourn the meeting along party lines.
All the discussion from Carlozzi occurred because at 5:28 p.m. last Wednesday (Jan. 17) Democratic Councilman Richard Reyes canceled a bonding meeting planned for 6:30 p.m. Many Councilman, mostly Republican, told the City Journal they did not get the text message until late that night. Meanwhile, Mayor Erin Stewart refused the request and still held the meeting and the Special Council meeting planned following the bonding meeting. No one from the Democratic party showed up.
Several proposals were under consideration to help the City restructure its debt.
This debt restructuring has been in the works for several years, but in order to restructure that debt, the City waited for the State to pass a law to allow for municipalities to issue debt for longer than 20 years. The restructuring would lower the city’s maximum annual debt service payment from about $40 million to about $25 million this year while adding an additional 10 years of payments.
Savings will be accomplished by restructuring the existing principal and interest payments and amortizing, or reducing, them until later years.
If the restructuring is not done, then next year cost of bonds increases to $29.188 million. The following year the city would owe $36.373 million. In 2021 the debt bill would be $39.357 million.
Stewart said the City does not have the funds to pay this year and it could result in a rise of taxes, lowering or services or decreasing employees.
“At this point the Democratic council members have made a decision to again delay the decisions they were elected to make. At this point 3 more meetings will need to be called and it is our hope the Dems can come together and help Us lead,” said Ald. Smedley following the meeting. “The mayor hasn’t been hiding the debt issue as mentioned by community members at public speaking. In NB city journal article dated feb 2016, and many times before the council- Mayor has clearly stated how restructuring our debt is part of her stepped process to bring the city back on track.”
(This article will be updated as information comes in.)