RAHWAY—The city’s next mayor will have to contend with shrinking revenues and rising debt, as well as a declining credit score, according to former Housing Authority Chair Renee Bridges Thrash, who is vying for the Democratic nomination against Freeholder Richard Proctor, who is also the city’s health official.
“Moody’s Investors Service downgraded the city’s bond rating in October for the second time in recent years,” said Thrash, whose sister is Rahway school board member Deborah Bridges. “A lower credit score translates into higher interest rates.”
Moody’s cited the city’s weakened financial position and a structurally imbalanced budget that relied on one-shot revenue as factors behind a June 2006 downgrade.
The city’s surplus has fallen from $3.1 million in 2007 to $798,000 in fiscal year 2008, which Moody’s described as a “narrow” financial position.
Moody’s reported that the city’s surplus dropped from about seven percent of revenues to less than two percent due to late payments from residents combined with increased city spending for services from the Rahway Valley Sewerage Authority.
Overall, there is roughly $65 million of debt, including about $39 million borrowed for land acquisitions and maintenance.
“The downgrade came days after Rahway closed on a deal to refinance about $5 million worth of bonds, saving us $400,000 in interest, but after that they borrowed another $8 million for an outdoor theater planned at the former Hamilton Laundry site,” said Thrash.
Thrash is running for the Democratic nomination on the ‘Democrats for Change’ line with City Council At-Large candidates Dr. Yvonne Wesley, director of the New York University Institute for Nursing Leadership; Grace Jacquet, a public school nurse and community activist; and nurse practitioner and author Lynn Parker.
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