Meeting to Consider $7 Million Apparent Debt Refinancing Cancelled

After a New Britain Progressive article on a city plan, apparently to borrow $7 million to refinance existing city bonding, a meeting to consider it has been cancelled.

The proposal on the agenda of the now-cancelled meeting of the City Council’s Bonding Subcommittee on April 14, 2021 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.”

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.

Rep. Bobby Sanchez strongly criticized Stewarts debt practices when he announced that he is officially running for Mayor this week. Rep. Sanchez criticized budgets balanced by borrowing that, “kick the can to the next generation to deal with.” 

“I am running for Mayor,” Rep. Sanchez said, “for our taxpayers, who need to not face the future’s financial burdens due to irresponsible debt refinancing.”

The committee meeting on the debt refinancing plan was apparently subsequently cancelled. The now-cancelled meeting was to be on the same day that Stewart is set to present her annual budget to the Council next week.

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.