As a Certified Public Accountant, I’m very sensitive to the financial health of my clients. I’m especially sensitive to the financial health of the city where I live, the City of Greenfield. Like other residents, I had my concerns over the city’s ability to build both a new library and a new fire station.
I don’t have these concerns anymore because of two recent events.
First, two independent bond rating agencies, Standard and Poor’s and Moody’s, reviewed both our debt policies and our financial practices. They both reaffirmed the strength of the city’s financial position and debt structure. Each gave us favorable bond ratings which keep our borrowing costs low.
Second, I was also pleased to learn that the original debt projections covering 2020 to 2030 from Mayor Martin’s office have now been updated. (The original figures were overstated because they incorrectly included interest owed on the debt.)
Based on these updated projections, the library and fire station projects would put the total debt in the $33 million to $65 million range. This is well within Greenfield’s borrowing capacity of $75 million. (State law lets cities carry debt that is between 5-10 percent of the assessed property value.)
Furthermore, Department of Revenue best practices suggest principal and interest payments should be within 8-10 percent of a city’s overall operating budget. (The updated projections for 2020-2030, show that debt service remains below the 10 percent maximum.)
As we add debt for the library and the fire station projects, debt from other projects will be retired keeping our total debt as low as possible in future years. The total debt and the debt service part of the operating budget remain comfortably within state requirements and best practices. So overall, the city is in a good financial position.
I believe a new library is the key to having Greenfield seen as a vibrant city, one that can attract new people and businesses to join our community. A new library and our acceptance of the $9.4 million grant send the message that Greenfield is ready for and wants a better future. A down-sized renovated library sends a different, less hopeful, message.
Invest in the future of our Greenfield. Please vote yes for a new library on Nov. 5.
Jonathan Cohen-Gorczyca, CPA, MSA, is a resident of Greenfield.