Brown draws more support for borrowing proposal

May 10, 1992|By Brian Sullam | Brian Sullam,Staff writer

WESTMINSTER -- As governments at all levels are experiencing fiscal problems, there are probably many Maryland municipalities that would be envious of this city.

For the coming fiscal year, the city will be able to take care of all its needs, give city workers a 2 percent pay raise and hold the tax rate at its current level.

Westminster is also in the position of not having any outstanding debts other than $4 million in water and sewer bonds.

Mayor W. Benjamin Brown would like to borrow money this year to cover the city's major capital improvement projects. And, unlike previous years, he is likely to have little resistance from the council.

"There has been a skewing of public opinion against government borrowing because of the large federal debt," the mayor noted.

With about 40 percent of the city's general fund budget devoted to capital improvement projects, Brown said it makes sense to borrow to finance these projects.

"It is not a financing issue, but a growth- management issue," Brown said. "We want to ensure that any growth that does occur here supports itself. People who are already here should not be forced to shoulder the burden of future growth."

Stephen V. Dutterer, the city's finance director, said that no borrowing is necessary under the current budget plan.

"You usually go to bonding when you don't have the capital available for projects, but we have the money," he said.

Finance experts say the decision by governments to borrow is a subjective one.

"There is no right and wrong way of management," said Robert Hillman, director of the state's Local Government Infrastructure Financing Program.

"Borrowing is another tool among the various resources available to manage finances. Borrowing can help keep current taxes down and level out spending over a number of years," he said.

At least two members of the council said they are willing to listen to the mayor's proposal to borrow money for the budget.

"I'm very open to bonding, especially for the building of the Police Department," said Councilman Kenneth A. Yowan.

Councilwoman Rebecca Orenstein said she has not discussed the issue with any of her fellow members, but "I am quite drawn to the idea."

About the only opposition is likely to come from council President William F. Haifley, who says there is little reason to borrow because "you end up spending twice the amount when you don't have to."

For this year, Haifley believes there is no reason to borrow because the city has all the cash it needs to cover the city's operating costs as well as its capital improvements.

Of the $6.6 million in general funds Westminster is going to spend this year, $2.5 million will go for capital improvements.

By far, the largest project is the purchase and construction of the new police headquarters in the former Westminster Auto Parts store. The city has allocated $1.2 million, with $1.1 million of that being carried over from last year's budget.

Other large capital improvement projects in this year's budget are renovation of City Hall and the Longwell Municipal Center, the creation of a right-turn lane on Center Street where it meets Route 140, and the demolition of the Gilbert Garage on East Main Street behind the library.

Brown said these projects are going to benefit future residents of the city, and those people should help pay the costs.

Brown said he would like to borrow the $1.2 million needed for the police headquarters. If he gets the City Council to go along, he will propose that the tax rate be lowered to 75 cents from the current level of 83 cents for the 1994 budget year, which begins July 1, 1993.

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