Remember Councilman’s Lack Of Knowledge Of Simple City Matters
Andrew Liuzzo has been a City Council member for roughly 18 months and will ask city Republicans for their vote in a mayoral primary later this month.
That would imply that the councilman thinks he has a pretty good understanding of the way things work. After 18 months in office, it would seem the councilman should know how the city pays its loans. At the last City Council voting session, however, Liuzzo showed just how out of his depth he actually is.
One of the routine resolutions before the council on May 20 was payment of various purpose bonds issued in February 2006. To be fair to Liuzzo, we will quote his question.
“What are they for, specifically, is my first question because I’ve never seen anything that says we’re paying on this – it’s a piece of equipment that we’ve had or it’s something that – I’ve never seen anything to what these bonds are for and what they mean,” Liuzzo asked. “The other thing that I’d like to ask the question is; are these payments already been paid? Are we voting on resolutions where the check’s already been sent to the bank? Prior to us voting on this. And the third is, when we are authorizing payment on a bond, do we have discussion on that as to – let me rephrase that – when we are authorizing a payment to a bond, has that bond come to the attention of the council?”
Did Liuzzo actually admit, in public a month before a primary election to see whether he or fellow Republican David Wilfong will be on November’s election ballot for mayor, that he’s voted on countless bond payment resolutions over the past 18 months and had no clue what he was voting on? Did he seriously not know, after a year and a half on the City Council, that the council has to approve the bond payments before the payment can be sent? Did he not know that the city budget, which he voted on in December, includes a list of the city’s outstanding bonds, the amount left to be paid and the payment dates? How many other votes has the councilman cast over 18 months in which he didn’t understand what his vote signified?
After that admission, Liuzzo and Mayor Sam Teresi had a lengthy discussion about the city’s strategy when it comes to paying off loans early. At issue is a paver the city purchased in 2017 with a bond anticipation note. Bond anticipation notes are short-term debt securities issued by a municipal or state government to pay for a project, like a new paver. The bond anticipation note is issued in anticipation of long-term financing which when issued is used to retire or pay off the bond anticipation note. In the case of the paver, the city used the anticipation note because it didn’t have money in its contingency fund to purchase the needed equipment, with city officials planning to convert the bond anticipation note into a serial bond that would be paid off over time like the rest of the city’s bonds. When previously approved spending for employee health care wasn’t needed, City Comptroller Joe Bellitto approached Teresi and members of the City Council’s Finance Committee about using those savings to pay off the bond anticipation note in its entirety without converting the note into a serial bond, which can cost tens of thousands of dollars to do.
Apparently Liuzzo didn’t remember those conversations, which Teresi said were discussed by Bellitto with members of the council’s Finance Committee and then reported back to the full council when Bellitto gave his closeout of the city’s 2018 financial books in March. Liuzzo criticized the administration for paying off the bond early instead of putting the money in the city’s surplus. Bellitto, Teresi and the rest of the council reasoned that the city could save not only the bond conversion costs but the yearly payment of $40,000 or $50,000 dollars over more than a decade as well.
We have to agree with Teresi, Bellitto and the rest of the City Council. It makes no sense to take out a loan unless it’s necessary, particularly for a city that has exhausted its constitutional tax limit. The city needs to be reducing its recurring costs, not stringing them out further into the future. Paying the paver off early was the right decision. It saves money in case interest rates continue increasing and helps improve the city’s bond rating so that it can borrow money for less cost if it needs to do so in the future. And, the city isn’t paying interest on a loan.
Voters should remember how ill-prepared Liuzzo was on this issue when they choose their next mayor.