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Perth Amboy Business Administrator Gives Council Report on City’s Outstanding Debt

PERTH AMBOY — Council President Kenneth Balut stated that the MCIA (Middlesex County Improvement Authority) received a lot of money from the City and now we need their help.

B.A. Greg Fehrenbach said “The MCIA provides opportunities to help municipalities with bond ratings and appropriation caps. Unfortunately the prior administration utilized the authority for detrimental purposes. The present administration is still in talks with the MCIA and Bond Consule.”

Councilman Kenneth Gonzalez was impressed with the Mayor and City Council that preceded him and he also commended Fehrenbach for the good job he is doing.

At the City Council Caucus and Regular Council Meeting held on 5/30/12 B.A. Fehrenbach was praised by the Council. He supplied a report to them on how the City was able to pay down some of the debt that was the fault of the previous administration.

PARA (The Perth Amboy Redevelopment Agency) was at the forefront of these discussions. Fehrenbach stated that PARA’s debt is the City’s debt. The Diaz Administration thru refinancing brought those debts down. The City of Perth Amboy also dealt with these debt reductions through local government and without that much help from the State. “We realize that the City is still very fragile but we have to remain prudent,” stated Fehrenbach. “PARA and the city took in debt to fill in a hole that occurred in 2007 which cost PARA over $1.7 million in interest. When the Diaz administration first came into office there was $250 million debt from the previous administration that we had to deal with. We anticipate that it will go down even further to $207 million. (With $195,000 which will be realized this year to bring the debt down to this figure.) In 2007 there was anticipated sales of land that was supposed to help the City out financially but this sale was canceled by the buyer. This gave the City of Perth Amboy a $3.688 million shortfall. Former Mayor Vas borrowed $5 million from Middlesex Water for underfunded entities. The 2006 budget was underfunded under Vas and this caused the City to pay an 8% incurred interest to Middlesex Water.”

Councilman Fernando Gonzalez wanted to know if the structure of PARA should be changed to avoid further debt.

Fehrenbach replied, “Personalities and people involved with PARA are more important than structure. There has been open and frank dialogue between the Mayor, Council and Department Heads, especially with contract negotiations.

Council President Balut also praised the CFO Jill Goldy.

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