Paterson council gives preliminary approval to borrow $10.7 million for sewer repairs, Heffernan lawsuit, workers compensation cases
By Jayed Rahman
Published: November 25, 2016
The city council balked at approving four measures to borrow $13.1 million, but later approved the largest borrowing measures in a reconsideration vote on Wednesday morning.
Mayor Jose “Joey” Torres’ administration sought approval for four bonding measures: $438,108 for road resurfacing, $1,987,343 for unsafe building demolitions, $3,000,000 for workers compensation and the Jeffrey Heffernan lawsuit, and $7,725,340 for sewer repairs.
The administration did not have enough votes for the measure in the first half of the Tuesday evening’s meeting. Kenneth Morris, councilman at-large, said the city has to be a little more prudent when it goes out to borrow money for “re-occurring expenses” like workers compensation. He asked whether the administration planned to borrow more money next year to pay for workers compensation claims.
Business administrator Nellie Pou said the city has taken some steps to safeguard against workers compensation claims, but did not rule out the administration coming before the council next year with a similar borrowing measure.
Morris warned about diminishing debt capacity. The four borrowing measures will have pushed the city’s debt to $129.19 million. When the council rejected three of the borrowing measures, the business administrator said: “Without bonds we will be defaulting on all of these expenditures.”
Pou said without the measures being approved, the city will have a large deficit in this year’s budget. Council members re-considered the rejection later in the night and approved the $3 million and $7.7 million bond ordinances.
Morris said the council has little choice but to approve the sewer repairs, for the city to follow the consent order to address its combined sewer system.
“There’s an inherent unfairness in forcing a poor city like Paterson to address this combined sewer system that was installed back in turn of the century. We were sued. We cannot afford to take it out of operations,” said Morris. “Our children’s children will be probably be paying for this.”
The council will hold public hearing on the borrowing measures on December 20th, 2016 at City Hall.
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