Questions Arise on Debt Ceiling
Despite questions on how close the City is to the debt ceiling and bonding about $55 million this year already, another $10 million was bonded Monday night to pay for new books and new technology for the schools, bringing it to $65 million.
In less then 60 days, the City has bonded $50 million putting City bonding at about $290 million. It is more than the City budget, which is now at $250 million. The City budget is now $25 million higher than it was two years ago when Mayor Tim O’Brien took office.
“One of the things we have seen over the past 6 months is a downgrade in our ratings. We have authorized over $40 million over a month ago, now we are talking about another $10 million and under this council’s watch we approved bonding of another $15 million,” said Alderman Jamie Giantonio. “When do we reach our limit? We are paying for things on credit cards. Everyone has a credit limit. I am worried right now because we are spending like drunken sailors.”
Giantonio said he is concerned for the future of the City. Bond rating companies downgraded New Britain in 2012.
“How much will that increase our general fund next year?,” Giantonio asked. “We are just kicking the can down the road. I am for bonding this project, but I worry as a whole on spending so much money.”
Acting Finance Director Becky Salerni said the City is “fairly close” to the debt ceiling, but she doesn’t know the exact numbers.
“What we are borrowing has been a breakout between the City and the board of education,” Salerni said. “All told, it is not as bad as it looks.”
She said some bonds are being paid off each year.
“On the City side, public improvement side, we were like $40 or $45 million away from the debt ceiling, but as the projects get close they will go away as far as that number,” said Salerni. “I have not calculated how this will affect the City. It depends on if we do notes. It depends on how it is structured.
“We are paying about $30 million a year and now we went crazy on borrowing,” said Alderman Adam Platosz. “When do we call Detroit and say we are going to join you. We have plenty already to pay back. The Board of Education has their budget and now they want $10 more million. I would love to get $10 million for our City. We have been nickel and diming for years. We’ve got to slow down and the Board of Education has to help us.”
Alderman Carlo Carlozzi said he is the last councilman who wants to spend money, but he said “for way too long our schools have been kicked around and knocked around and called things about them that are simply not true.”
He said New Britain has been made to feel that students are second class citizens and he would put up our schools against any surrounding towns.
“We have done that despite lack of money and lack of technology,” said Carlozzi. “We must invest money in our school system.”
Originally the schools asked for over $12 million and the council reduced it to $9.9 million.
“We are not bonding books for 20 years,” said Carlozzi. “They will never, never allow that and I want to make that very clear.”
According to the Hartford Courant Deputy Chief of Staff Phil Sherwood said, “most of the bonds approved this week will likely be paid off in a decade, but the money for the textbooks could be paid off in five years.”
Previous bonding projects included $2 million for golf course irrigation, $30 million for Gaffney Elementary School, $13 million for Broad and Washington St. reconstruction, $950,000 for city wide repairs, $1.75 for Willow Brook Park improvements, $875,000 for ADA project improvements, $940,000 for improvements to Beehive Field, $200,000 for the War Memorial project, $3.75 for a water park at Chesley Park, $2 million for a Washington Park Pool Project, $5 million for capitol improvements, $6 million for streetscape, $1.2 million for Arch St., $555,000 for infrastructure improvement, $1.4 million for telecommunications and more. The City will get about 80 percent of the $30 million for Gaffney School back in a state grant.
“By the time you get technology it is obsolete,” said Giantonio. “Some of these bonds will outlive the use of the products.”
Upgrading school technology is expected to cost about $100,000 a year to maintain.
“Over the years we rely on one time monies to fill a gap. And then that gap creates another gap and then it spirals and spirals and spirals and then we are in the situation we are in,” Giantonio added.
The bonding was approved 13-2 with Giantonio and Platosz voting against.