Debt
Wise Investments
In keeping with my rule that city investments should provide a predictable, measurable and reliable return on the money invested, the city should begin looking at acceleration of debt payments as an investment with a guaranteed return.
Each year, the city allocates a huge amount of its budget to debt service – every dollar we invest in paying this debt off faster provides instant guaranteed returns by allowing us to reduce the future debt service budget line item.
This is common sense in personal finance, yet every year our City Council votes to take on more debt to finance projects that are not guaranteed to have a return on investment (see, for example, the Green Flash Brewery fiasco).
The city Should:
- Adopt a policy that future budgets should not cause the city’s overall debt to increase.
- Begin treating early debt payment as an investment that effectively provides revenue in future yearly budgets by reducing the expected amount of debt service required to be paid.
