To The Editor:
The first month of 2018 has hardly been a quiet one for local government or politics. Regardless of what position anyone takes on the complicated issues surrounding restructuring city finances and debt service in particular, there is no doubt, in my position as alderman at large on the Common Council, that action must be taken. And restructuring plans have been implemented since 2014 in two previous Councils. They were publicly presented, discussed and executed in order to address the longstanding problems of increasing debt service that spans over 20 years.
But one statement published in this newspaper requires some discussion and clarification; “New Britain’s current debt profile has annual payments until 2037, at which point the city would be debt free.”
Though many cannot accept it, it is highly unlikely that the city of New Britain will ever be debt free. The past debt, accumulated through the purchase of bonds to construct capital projects; roads, bridges, repairs on our utilities, renovation or building schools, garages, the police department, park improvements, senior centers, and many other necessary projects, will be paid off over time, possibly by 2037, and that is factual.
But it doesn’t mean that the city will not incur more debt in 2020, 2025, 2030.
The annual operating budget, about $240 million, about half being the school district, is what runs all city functions, including annual payment to our debt service, those bonds over the past 20 years. This year our payment on debt will be around $24 million, regardless of what is finally decided by council in potential restructuring existing debt.
The point here is to have all residents understand and appreciate this: the annual operating budget won’t cover new incurred debt. Every year some of our 162 miles of streets become aged. They have a 15-20 year lifespan. Sewage and water pipes will need replacement. Eventually another fire truck, or dump truck, or police cars from the existing fleet, will need replacement. Schools will need refurbishing, equipment for public works, from snow plow blades to fire hydrants, about 2500 of them citywide, require repair or replacement. The municipal needs list is endless. Future funds will be required, hopefully from a solvent state or federal sources, grants, necessary bonding or tax revenue that will require increases. Without ongoing attention to these operating needs, the city will not function, would not survive.
So the reason to write this letter is to shed some light on the reality that debt, debt service, bonding, which are really like loans or mortgages, will never go away. And the management of existing debt, something that just had not been done effectively over the last two, three or more decades, must now be addressed. And more important, as has been said time and again, by our mayor, by members of the Council and me, too, it will involve five years and longer to get our financial house in order. Finally, governing is not politics, it’s about sound public administration.
Daniel M. Salerno
Alderman at Large