Right now, the city is in year two of its fifteen year plan to re-pave city roads – and each year this project needs $2.5 million from the budget, as well as another $2.5 million from a ban or bond.
“A ban is a bond anticipation note, so you’re borrowing the money anticipating you’re going to long term bond. And a bond is a long term set in stone, you’re going to make x amount of payments over a certain amount of time,” explained City of Utica Comptroller Bill Morehouse.
Morehouse said while the plan this year was to ban for the money, that is no longer the case.
“At this place, because the rates are only going up, we may go with a bond at this point and take that 2.5 million from last year, 2.5 million from this year – and then next year again we would ban for 2.5 million and start the process all over again,” he said.
Because interest rates keep increasing, the comptroller’s office has to look at the best way to save money each year.
“We estimated last year [a rate of] 1.25, I think we got 1.1. This year we estimated [a rate of] 1.35 percent, but we’ve already seen bonds out there 1.6, 1.7 in local counties around here,” Morehouse said. “So it’s time to wrap some of this money in and tie in the lower rate now and going forward the rates are only going up.”
Once the ban or bond is obtained, the city’s engineering department looks into which streets are in most need of re-paving at that time.
“You know, five million gets a lot of paving done in the city, I think people already saw it last year, a lot of the roads got re-paved in their neighborhoods, and it’s going to continue on. And it’s a great thing but it costs money,” Morehouse said.
He said after looking at the city’s books and debt structure, he’s confident Utica can handle taking on these bonds without pressuring tax payers.