Dixon Urges Approval Of Two Bond Bills

March 04, 1992|By Adam Sachs | Adam Sachs,Staff writer

ANNAPOLIS — Del. Richard N. Dixon asked the House Appropriations Committee yesterday to approve two bills that would give the county commissioners authority to borrow money for public projects and Carroll's 14 volunteer fire companies.

"These are very simple bills," the Carroll Democrat told the committee. "We will use our own money to build our own projects."

One bill would allow the commissioners to borrow up to $15 million for fiscal 1993, through a bond sale, for capital projects. The projects include construction of a new building at Carroll Community College, development of a Sykesville park, public school renovations, road maintenance, expansion of the solid waste management system and closure of a landfill.

The other bill would authorize the commissioners to borrow up to $2 million through the bond market, "from time totime," and to use the proceeds to make loans to the financially strapped fire companies. The commissioners could set the terms for the loans, to be used by the companies to purchase new fire engines and ambulances and to improve facilities.

Supporters of the volunteer fire service say the loans are a good investment for the county because a paid "career" service would cost taxpayers much more. Fire companies have been able to repay the loans throughout the 1980s, said countyComptroller Eugene C. Curfman.

Both bills are expected to pass asa matter of courtesy, since they are sponsored by the Carroll delegation and apply only to the county.

Based on a 6.2 percent interestrate over 20 years, if the county borrowed $15 million, it would have annual debt payments of $1.3 million and would pay $11.6 million ininterest over the life of the loan.

The county borrowed $27 million this fiscal year. A portion of that debt will be paid through solid waste fees. Even as the county's need for new or upgraded facilities grows, county budget officials have restricted borrowing for next year to avoid mounting debt levels.

Based on a recent debt affordability study which projected maximum debt levels for the next five years, Curfman said the county will keep a close watch on its borrowing "unless the revenue picture changes drastically."

Bond rating agencies, which help determine the interest rates the county receives, closely monitor the ratio of debt to revenue growth.

The county's debt as of June 30 was $64.3 million, a figure that doesn't include themost recent $27 million bond sale, Curfman said.

Until the last five years, county leaders preferred to pay for public projects through available revenue. They have since turned to borrowing because tax revenue is not sufficient to cover costs for major projects, such as new schools.

At a January public hearing, several residents said the county should return to a pay-as-you-go philosophy to avoid debt.

Dixon has argued for years that long-enduring projects, such as schools, should be paid for over time by current and future residents, just as an individual would finance a home purchase.

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