Paterson council gives preliminary approval to borrow $16 million | Paterson Times Paterson Times

Paterson council gives preliminary approval to borrow $16 million

By Jayed Rahman
Published: November 12, 2018


The City Council gave preliminary approval to a series of measures to borrow $16 million early Friday morning.

Much of the money will go towards paying retiring police and fire employees and making repairs to the antiquated municipal sewer system. Below is a breakdown of the bond measures:

Some council members objected to borrowing $5 million to pay retiring employees. At first the council rejected the borrowing measure in a 5-4 vote. A bond measure requires a super majority, six affirmative votes, to pass.

“It’s just not good practice,” said Flavio Rivera, councilman at-large, chairman of the finance committee, referring to borrowing money to cover operating expenses.

“Of course it’s not,” added finance director Marge Cherone.

Municipal officials said the state recommended the city borrow money to cover the severance payments for retirees.

“What are we doing for next year?” asked Rivera.

“We’re going to ask retires in the future to take payments over several years rather than having to borrow them or paying up front,” Cherone.

Cherone gave the same response last year when the city needed the governing body’s approval to borrow $5 million to pay retiring employees.

Council members Al Abdelaziz, Ruby Cotton, William McKoy, Lilisa Mimms, and Luis Velez voted in favor of appropriating $5 million in bond money to cover severance payments while Rivera, Michael Jackson, Shahin Khalique, and Maritza Davila voted against.

“We’ll not be able to sustain this level of bonding,” said McKoy. The state has to rein in payouts for retiring police and firefighters as it has done for school employees under Chris Christie, he said.

Jackson pointed to the irony of Sayegh’s move to seek approval to borrow millions and seek a tax increase.

“The ironic part about it is when he sat on this side, he was in firm opposition to all of these things he is asking for today,” said Jackson.  He changed his vote in favor of the appropriation measure to allow its passage.

Some council members wanted the list of retirees. Sayegh’s administration never provided council members the list of names and payouts.

The council voted 9-0 to approve the other bond measures.

The latest round of borrowing reduces the city’s debt capacity to $72.36 million, according to municipal records. The city had a total debt capacity of $222.54 million or 3.5-percent of its total equalized property valuation of $6.35 billion.

Currently, the city spends almost $18 million a year to pay down debt.

It will have $150.17 million in outstanding debt after the latest borrowing measures are passed.

The council has scheduled a public hearing on Dec. 17 at 6:30 p.m. at City Hall. After the public hearing the council will vote on final approval of the borrowing measures.

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