Residents Mixed on Debt Restructuring Proposal
While Mayor Erin E. Stewart’s debt restructuring proposal is still being considered, residents said in the City Journal Facebook group that they have mixed feelings about it.
The City Journal Question of the Month was, “Are you in favor of the City Debt restructuring plan or not? Why?”
The originally proposed restructuring plan would authorize the mayor to appropriate and bond $115 million to pay, fund or refund any of the city’s existing general obligation bonds. The city’s general obligation long-term net debt is $270 million.
Restructuring lowers 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.
Alderman Daniel Salerno opened up the discussion in the group, “I have supported and voted for the restructuring process since 2014. I do not dodge the issue because it is necessary to address some 20-30 years of avoidance and neglect of Budget management. The alternative would be increase in taxes that was too long avoided in the last two or more decades. We will always have debt service to meet city needs like roads, bridges, schools and parks. Restructuring is sound public administration. Governing is different than politics and we must accept that.”
Former Alderman Jim Sanders Jr. said, “I do not support it unless there is major structural changes on the city side Along with an effort to talk to our unions to see what if anything they can do to get us through the next four years.”
Several supported the proposal.
“Yes, because this city cannot afford the alternative tax increases that would be needed to keep the city running and pay our creditors,” said Suzi Singleton. “I think tax increases would only push away more home owners, residents, and businesses thereby reducing the city’s available tax base. I look at the restructuring as an investment in our community.”
“Yes- unless the population decrease or several companies move to NB,” said Carmelo Rodriguez. “We have no other options. Except closing down schools, fire stations, lay off police, no more removal of snow or increase taxes. I have not seen plan B yet.”
“I support the efforts needed to bring the restructuring into focus,” said Ann Dilling. “As bumps in the road occur it is necessary to come up with a plan. Not the first plan and not the last.”
But, several did not support the plan.
“I do not support it, because it only includes part of the Debt? When you refinance a loan you should lower your Interest on all debt,” said Dave Lazicki. “And try to Control your spending, so you don’t get further in debt.”
“No. There is not transparency in the plan. This needs to be for the good of the city and not a “Good ole boy” quick fix or political ploy favoring on party,” said Bob Meadowland. “You can only tax so much before people and business and industry leave also! Be hard but fair across the board. Be aggressive in collections on past debt and fines.”