The Metro Council approved a crucial part of Mayor Karl Dean’s proposed $1.52 billion budget Tuesday night when it overwhelmingly adopted a resolution to restructure the city’s debt.
Approved by a 33-3 margin, the plan seeks to free up the city’s money in the short term by essentially pushing back the debt payments accrued over time by Metro as the city pays off its bonds.
Dean has called the approach a way to avoid raising property taxes, while preserving Metro’s core services. He’s said the hope is to take advantage of record-low interest rates that have resulted from the economic downturn.
According to Metro Finance Director Richard Riebeling, without restructuring the city’s debt, Metro would perhaps have to endure “$50 million-plus in cuts to various departments.” Instead, the average cut in each department is 1.4 percent, he said.
With the council’s authorization, the debt-restructuring strategy will be applied not only to the budget for the 2010-2011 fiscal year, but for the following budget as well.
Emily Evans, Eric Crafton and Jim Hodge were the three council members who voted against the resolution.
“By deferring some of this debt payment, you will pay more debt down the road,” Riebeling said. “That’s really the one negative associated with this, and that’s why under normal circumstances, restructuring our debt is not something we would normally recommend.”
When Dean unveiled his administration’s debt-restructuring plan more than two weeks ago, the idea received mostly positive reviews from the council, which still must sign off on the budget itself.
Given the massive recovery operation that awaits the city following Nashville’s historic flood, some council members say the plan makes even more sense now.
“With the events of the last three weeks, what seemed like a solid idea, now seems like a great idea,” the council’s Budget and Finance Committee chairman Ronnie Steine said. “Now it’s an even more important vehicle, I think, to keep our government operating.
“No one should be under illusion, ultimately, we have to pay the piper,” Stein added, “but hopefully when the time comes to pay the piper, we’ll be in a much better economy.”
In other council items:
It’s now illegal for Nashvillians to park tractor-trailers in their front yards or driveways.
By a 32-2 margin, the Metro Council approved an ordinance to outlaw drivers of trucks with a maximum axle-load capacity of more than one-and-half tons, as well as tractor-trailers, from parking such vehicles on residential property. In addition, the new law authorizes no more than one school bus be parked at residences.
The bill’s sponsor, Councilman Darren Jernigan, filed the ordinance after neighbors in his Old Hickory/Hermitage area district complained that a tractor-trailer had turned into a neighborhood eyesore.
Duane Dominy and Jim Hodge were the two council members who voted against the bill.