Atlantic City Financial Rebuild to be Detailed Monday
The final components of Atlantic City's financial reorganization plan will be disclosed in detail Monday, October 24, during a special City Council meeting at 5 PM.
Mayor Don Guardian calls it a two-pronged approach, shedding assets and issuing bonds, and a critical factor in overcoming liabilities that are "crippling us, financially."
In prepared text, Guardian took aim at tax appeals that were filed as casino business shrank and property values dropped, which exceeded $500,000,000. Municipal bonds issued in 2012 funded about half the amount, and credits against subsequent annual tax bills amount to almost $33,000,000 annually.
"Needless to say, our budget cannot absorb these credits, even with the cuts set forth in the Fiscal Recovery Plan," the Mayor said. "We needed another way to address these unprecedented liabilities and we have developed one in the Recovery Plan."
Along with the previously-publicized $110,000,000 sale of Bader Field to the Atlantic City Municipal Uitlities Authority, the city will issue tax-exempt bonds that will be paid through proceeds of the Casino Investment Alternative Tax and secured by the state Municipal Qualified Bond Act.
The bonds are to be given an investment-grade credit rating, with projected interest rates of less than four percent, amounting to anticipated debt service of $4,000,000 during the first five years and $7,000,000 for the following 20.
"Most importantly, debt service will be fully covered by the cost savings initiatives included in our Recovery Plan while we also restore the $33 million in lost revenues from taxpayer credits currently choking the City's budget," Guardian said.
The strategy, the Mayor said, will allow for the re-establishment of a $4,000,000 annual capital improvement program, which he predicts will ease the city's ability to meet its obligation and maintain its infrastructure.
"No longer will our residents, or employees, have to watch and worry as the City moves from one crisis to the next in a constant state of uncertainty and instability," Guardian said. "Instead we will return normalcy to City government through a sound financial foundation which will, in turn, provide the platform for private investment and a growing economy."
On WPG Talk Radio 104.1's monthly Ask The Mayor program on October 18, 2016, Atlantic City Mayor Don Guardian and Atlantic City Councilman Frank Gilliam got into a long, heated discussion regarding the city's finances. Listen: