Council to Oppose Sewerage Agency Debt Plan

The Town Council is preparing to oppose a plan by the Rahway Valley Sewerage Authority to borrow $13 million to pay off a $13 million debt.

The RVSA is proposing to all communities in the authority to combine debt payments for 2009 and 2010 and then borrow $13 million to pay off half the agency's debt. The agency has an increased debt due to refurbishments to the sewerage plant. The agency told town officials that the debt payment plan will allow member towns to reduce an increase in payments to the authority. Member towns fund the annual payments via property taxes, and RVSA payments have been a source of rising property taxes in suburban communities.

The Council's finance policy committee has voted unanimously to instruct former Mayor Allen Chin, Westfield's representative to the RVSA board, to vote against the debt refinancing plan. The full Council is expected to pass the resolution at Tuesday night's official meeting. Councilman Sal Caruana, the finance panel's chairman and vocal opponent of government borrowing, expressed outrage at the RVSA's proposal Tuesday night.

"It's mind boggling," Caruana said. "It tells that the institutional financial culture in government is not changing. It is a culture of borrowing and deferring and putting it on the backs of whomever is around in 2035."

Caruana explained that the RVSA's plan would have the new debt being paid off in 2035, which he explained will continue to allow for interest payments until then. Caruana initiated the RVSA discussion following a discussion of the town's plan to reduce municipal debt.

"The state of New Jersey is on the verge of bankruptcy because of borrowing," he said. "In this environment our town council believes the more prudent approach is to reduce debt, not increase debt. The fiscal pressures will increase over time."