Republican mayor Erin Stewart is proposing a new borrowing plan and has called the City Council into a special meeting to consider her proposal.
Stewart’s plan would authorize $26.2 million in borrowing costs for various purposes. The resolution proposes spending on capital improvements under various departments, but would also borrow more money to pay for the interest on city debt.
The borrowing proposal is partially offset by reductions in existing city bonding authorizations of approximately $15.5 million, bringing the total increase in city bond authorizations to approximately $10.5 million.
Stewart’s proposal would also re-purpose some existing city borrowing authorizations, allowing debt spending for city vehicle and equipment purchases that would be above the $10.5 million in new borrowing authorization.
In the $26.2 million proposal, capital improvements would be authorized for the Fire Department in the amount of $3 million, the Facilities and Energy Management Department in the amount of $4 million, $5,275,000 for the Parks and Recreation Department, $8,750,000 for the Public Works Department and $2 million for the Information Technology Department. An additional $460,000 would go to financing costs.
The Proposal also contains authorization to borrow $2,715,000 to pay for the interest on city debt authorized in the resolution. The increased borrowing authorization would appear to allow Stewart to borrow money on the taxpayers’ credit to pay interest on city debt through June 30, 2021.
Recurring Borrowing to Pay for Debt
Stewart has come under intense criticism in the past for having repeatedly borrowed money to push millions of dollars of debt into the future to artificially lower costs during her administration at the expense of higher future debt payments for city taxpayers.
Stewart was heavily criticized, as well, after the 2017 City elections, for strong-arm tactics to pressure the, then, newly-elected Democratic majority City Council to approve $115 million in additional borrowing to pay for an anticipated increase in annual debt payments that would have occurred over the next few years.
Democratic Board of Education member Merrill Gay, Stewart’s Democratic opponent in the 2017 city election, in early 2018 said, “For the 3rd time in three years, Mayor Stewart is proposing to refinance the city’s debt. Each time, it has been for one purpose, to get her through the next budget without a tax increase or major cuts.”
Critics pointed to the spike in annual debt payments Stewart sought to address with increased taxpayer borrowing as having been caused by past borrowing Stewart had employed to balance the city budget without increasing taxes more than she had or cutting spending.
Graphic shows New Britain’s escalating debt payments, as estimated in 2017. (Source: Municipal Budget Book)
“What the mayor has done is the equivalent of paying the MasterCard with the Visa,” Gay had commented during consideration of the $115 million borrowing proposal. “When you can’t pay the debt you owe, the answer is not to borrow more money,” adding that Stewart, “borrows the money from our kids to spend it now.”
Special meeting October 24th
While the $26.2 million borrowing resolution on the City Council agenda would allocate capital equipment and Improvement funding to particular City apartments, the resolution does not specify what specific projects would be funded.
The resolution says that the decisions for what projects would be funded would be as decided by the mayor.
The proposal is on the agenda of a special City Council meeting which Stewart has called on Wednesday October 24, 2018 at 6:30pm. The special meeting Stewart is calling is planned to occur before the regularly scheduled City Council meeting on that same night.
