MONTCLAIR, NJ - The Township of Montclair has announced the reduction of its debt by $40 million since 2011.
Township Chief Finincial Officer Padmaja Rao reported at last Tuesday's Council meeting that Montclair’s debt obligation decreased from $223 million in 2011 to less than $183 million as of November of this year, yielding an 18 percent reduction over the four-year period. More than $11.5 million was paid down this year alone through the budgetary process.
The township is currently using 31 percent of its maximum legal borrowing power – well below statutory limitations – and its annual debt service is currently 13 percent of the operating budget, a decrease from a peak of 18 percent in 2013.
“Capital investments are necessary to maintain infrastructure and quality of life for the residents,” Rao said. “While debt is an effective way to finance these capital investments, excessive reliance on debt can lead to financial strain. Our annual debt service payments are currently at a level that allows us excellent flexibility with operating priorities for the municipality. The direction the Township Council and management took in reducing the overall debt burden puts the municipality in a position of long term fiscal stability and growth,” she said.