DUNKIRK – City leaders analyzed debt limits with finance department employees at the regular meeting of the finance committee held in city hall Monday.
City Finance Director Richard Halas told the group that, according to state guidelines, the city can borrow up to seven percent of its full valuation, based on a five-year average. The amounts would set a limit of about $22 million for borrowing for the city. The total does not include debts for water and sewer projects which are calculated differently, Halas said.
The city currently has about $17 million in outstanding bonds. About $16 million of the debt is for water and wastewater treatment plant improvements.
General fund debt includes a loan for building the city’s boardwalk project seven years ago. The city borrowed $530,000 for the project. A 2008 energy contract also required borrowing of about one-half million dollars.
City Treasurer Mark Woods said that the current water and sewer rates are covering the interest payments. He said an increase will be needed in the next three or four years to address the increased payments for long-term bonds.
Council members also reviewed the potential costs for repairs or a new fire hall and the city’s contribution to improvements in the seawall area.
A consulting firm has been hired to look at possibilities for repair or replacement of the fire halls. The city currently has three fire stations.
Councilwoman Stacy Szukala said she was uncomfortable looking at numbers to replace a fire hall because the study has not been completed. Committee Chairman Michael Michalski said the borrowing overview is important to council members to consider future spending.