Friday, April 2, 2004

Norwood delays payment on bonds

Decision will cut this year's deficit by $1 million

By Steve Kemme
The Cincinnati Enquirer

NORWOOD - In a move to provide short-term financial relief, City Council has renegotiated its outstanding bond obligations to postpone $1 million in payments this year. The savings will be applied to the projected $3.5 million city budget deficit.

The new debt payment schedule will also postpone payments of about $1 million in 2005 and $1 million in 2006. But the city still has to decide how to eliminate the remaining $2.5 million deficit for this year and find long-term solutions.

"People have to realize that this doesn't give us additional revenue," said Councilman Joe Sanker, chairman of the finance committee. "It's just $1 million that we have to pay out later instead of this year."

Sanker said the city has negotiated with bond holders to delay the payments in exchange for a higher interest rate and a longer term on the payoff.

Norwood officials are looking at several options to boost revenues, including placing a safety levy on the ballot and imposing trash collection fees.

City officials blame the financial crisis on years of overspending and on delays in the development of commercial property, such as the Rookwood Exchange and the vacant site just west of Montgomery Road on the north side of the Norwood Lateral.

The past few years, Norwood has relied on surplus funds and budget cutbacks to stay in the black. But the surplus funds have dried up, and city officials say there isn't much room for cutbacks without sacrificing services.

"Other cities can cut back to save a few million dollars," Sanker said. "But we don't have the type of budget to make those kind of cutbacks."

Norwood's bond debt is about $16 million, an amount that Sanker says is normal for a city of 21,000 residents. The bond debt pertains to money borrowed over many years for street improvements, park development and maintenance and other projects.

Mayor Tom Williams said the city will hold meetings in different parts of Norwood to elicit the opinions of residents and business owners.

No decisions on levies or fees will be made without extensive public discussion and without examining every possible cost-cutting measure, he said.

But council eventually must make some difficult decisions.

"We can't prolong this for too long," Williams said.


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