Mayor Jose “Joey” Torres administration is seeking City Council approval to take on $5.6 million in debt to cover tax appeals and improvements to recreation facilities, according to municipal records.
$3 million of the borrowed money will be used to cover successful tax appeals by property owners. $2.6 million will be used to cover improvements to recreation facilities (improvements to Hinchliffe Stadium), according to ordinances before the council. The two new borrowing measures push the city’s borrowing for fiscal year 2017 to $20.7 million.
Councilman Kenneth Morris, chairman of the finance committee, has sounded the alarm on borrowing money to pay for recreation and other expenses. “We continue to spend on our credit card knowing we have unanticipated expenses moving forward. We have not increased ratables,” said Morris on Tuesday night.
Morris said the city’s debt capacity has been reduced by half due to the constant borrowing. The city’s debt capacity stood at $228.5 million. Including the recent borrowing measure, the city has $131.75 in outstanding debt, according to government records.
The city could find itself in a tough spot when time comes to settle major lawsuits, tackle its antiquated sewer system, and cover pension expenses, said Morris citing the remaining $96.75 million debt capacity.
“At some point we have to put that card back in the drawer and stop using it because there’s going to be nothing left to use,” said Morris.
The city paid $9.7 million to cover debt service in the current fiscal year, according to city records. He noted the Passaic County government’s assistance in refinancing the city’s bonds has saved money for local taxpayers.
“We were fortunate the county stepped in to help. My only concern is what’s going to be left on the card. If your spouse keeps using the Visa card at Macy’s it’s time to shred it up,” said Morris.
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