City borrows nearly $1 million more, worsening debt worries

Common Council Majority Leader Matt Dunn, pre-beard. (Photo: Dan Barton)

Common Council Majority Leader Matt Dunn, pre-beard. (Photo: Dan Barton)

The Common Council voted unanimously Tuesday, Sept. 2 to approve three bonds totaling $857,000 for police equipment and infrastructure repairs or upgrades. While lawmakers agree the spending was necessary, Majority Leader Matt Dunn said there is increasing concern about the rising rate of the city’s debt service obligations.

“We need to get creative in ways to save money,” said Dunn. “Everybody, at the department level, is going to have to tighten their belts.”


The bonds approved at the Sept. 2 meeting include $400,000 to pay for emergency fixes to a broken sewer line on Broadway near Kingston Hospital and a stormwater line in Frog Alley. Another $250,000 will cover engineering and design work to replace sewage infrastructure and Broadway and Grand Street and the Jacobs Valley sewer. Dunn said City Engineer Ralph Swenson told him he believed both non-emergency fixes were needed to prevent greater and more costly damage to the city’s underground infrastructure. A third bond for $207,000 would pay for new bulletproof vests and other equipment for city police.

Those bonds come on top of some $5.7 million in borrowing already approved by the council this year. The 2014 budget adopted by the council and signed by Mayor Shayne Gallo last year projects $1.34 million in debt service on $32.7 million total debt this year. That’s about 3.6 percent of the total city budget and down from 2012, when debt service ate up some $1.7 million of the city budget. The city has also benefited from a 2013 upgrade in its bond rating which has pushed down borrowing costs, and the assumption by the county of the cost of the Safety Net welfare program which is expected to save Kingston more than a million dollars next year. The city also stands to be reimbursed from state and federal sources for a portion of the borrowed money.

But Dunn said that he’s concerned that looming costs and unforeseen expenses could force the city to reach deep into its dwindling reserve funds or significantly increase borrowing. The city’s dedicated contingency fund stands at just $67,000, Dunn said. The city can also dip into a projected $2.7 million in “unreserved fund balance” left over the city budget.

On the other side of the ledger, though, the city will pay about $209,000 more next year to fund a new contract with the city firefighters. Two more city unions now working without contracts could be also be in line for raises if and when they strike a deal with City Hall.

The city may also have to shell out more than $230,000 in back pay to suspended Assistant Fire Chief Chris Rea. The city is currently appealing a state Supreme Court ruling that Rea is entitled to back pay dating to March 2012. Those costs would likely come from the reserve fund. Other costs, including any additional money needed for the ongoing effort to fix the Washington Avenue sinkhole and a $5 million appropriation for improvements to the city’s Cooper Lake watershed will be added onto the debt burden through bonding.

Many of the bonds issued this year paid for critical infrastructure upgrades like repair and hazard mitigation at the city’s storm-damaged sewage treatment plant and engineering and design for the replacement of an aging railroad bridge over Greenkill Avenue. Others paid for fixes to recreational facilities, including new bathrooms in city parks or streetscape improvements.

Dunn said that he had, so far, supported the bonding efforts, but added that he the city would need to be cautious in adding to the debt burden next year.

“There is a lot that needs to be done, where we really don’t have a choice,” said Dunn. “But we need to be smart about how we pay for it.”

There is one comment

  1. CP

    With a mounting debt, why is the city supporting killing the Catskill Mountain Railroad, a taxpaying entity that will bring additional revenues to the area – starting this weekend with Thomas the Tank Engine (with hundreds of tickets pre-sold already)? Doesn’t make sense to me….

    I know, it’s about different funding sources, but money is money.

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