Council to Consider $7 Million Apparent Debt Refinancing

A City Council committee is to consider a proposal, apparently to borrow $7 million to refinance existing city bonding.

The full purpose of the proposed borrowing and debt refinance plan does not appear to be clear from the public proposal. But the proposal comes after years in which many have criticized Republican Mayor Erin Stewart’s practice balancing her annual budgets by incurring more debt that taxpayers will have to pay for decades to come.

The proposal on the agenda of the Council’s Bonding Subcommittee on April 14, 2021, the same day that Stewart is set to present her annual budget to the Council, would provide for,

a $7,000,000 Appropriation and Bond Authorization to Refund Any of the City’s Outstanding General Obligation Bonds

The new proposal apparently would allow for the borrowing of $7 million to refinance existing city bonds, “applicable redemption premiums, if any,” and “costs with respect to the issuance of any and all such bonds.”

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 following few years.

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 budgets without increasing taxes more than she had or cutting spending.

Stewart has also be criticized for budget practices that have increased City Hall spending, while largely flat funding annual operating funding for the city’s schools.

In 2020, yet another $70 million debt refinancing plan was criticized for apparently adding $30 million to taxpayer debt. During consideration of that plan in 2020, the city’s debt underwriter, John Healey, noted that the borrowing and debt refinance plan would reduce city annual budget costs by $19 million in fiscal year 2022, the budget year that starts on July 1, 2021, and that, without that, the city could be facing a budget deficit of $14.77 million for that budget year.

During consideration of the 2020 debt plan, Healey had also noted that, even after approving that $70 million borrowing proposal, it would be likely that the city would likely “need” to “restructure” its debt, again, in another three and a half years.

The meeting on April 14th is to be at 6:45pm. The agenda for the meeting says that, “Due to the current public health concerns, this meeting will not be open to the public. Members of the public may view a live broadcast via the live stream link: http://www.newbritainct.gov/meetings.”

Editor’s note (4/8/2021): The Bonding Subcommittee meeting discussed in this article appears to have been cancelled after this article was published.