The Waterbury Democrat., 1941-01-27
Bond Proposal Will
 Be Discussed Today
Then Hiram Johnson Nov
Continued from Page 1)

l
 which would make possible the H. nancing of capital improvements while still allowing reduction in the net debt each year. His plan, he said, would bring about a net debt reduction of $7,195 ,000 between 194l and 1852, and obviate any need for increase in the tax rate above what might be required even If no capital improvements were made.
 Three Alternatives
 The city has three alternatives, Controller Conlon told the finance l commissioners. It can postpone capital improvements, it can finance them by increasing the tax rate, or it can adopt a long-range program which would make possible both the l improvements and stronger mun1- cipal financial condition. He Sub- mitted a series of recommendations, centering about the necessity for not increasing the annual debt serv- | ice and for reducing the total net debt yearly.
 Though his program calls for is- suance of refunding bonds, Control Ter Conlon said that capital im- provement bonds could just as easily be issued, though the plan would not then be as flexible.
 The bonds would be issued yearly, starting with $400OO0 this year and gradually decreasing until the fg- ure is $lO0,00O in 1852. The differ ence between the $3,050,O00 realized from bond sales and the $2,645, 900 available for improvements is for interest payments.
 The controller said that decisions on specific improvements under the program, should it be adopted would rest with the various city boards. The plan does not include sewage disposal plant, the claim being made that it would be too costly.
 Text of Report
 The text of Controller Conlon's 8 report to the board of finance this noon follows:
 Honorable Board of Finance: Gentlemen:
 Ihave been notified of the probable necessity for certain capital improve ments by the City of Waterbury and requested to study the financial questions which will result if the city decides to undertake such a program. The projects under con- sideration include second pipe line, a third dam, 8 garbage and rubbish incinerator, street paving program, a trade school building and provi- sion for renewal and repair of the bridges throughout the city. | The decisions concerning the ne- cessity and desirability of these or other capital improvement will be made by the proper boards and there should be careful study and a full discussion by the citizens of Waterbury prior to such final de- cision. If it is determined that these or other capital improvements are to be made it is highly important that the manner of financing should be such as to avoid any weakening of the financial position of the city and any undue burden on the tax payer.
 At the present time the city has large total bonded debt. For the next twelve years it has large and burdensome annual debt service. The size of the debt makes it highly undesirable that any financing be undertaken which would result in a net increase in the total debt. At the same time the heavy debt service makes it impossible to pay for substantial capital improve ments out of current income with- out an unreasonable increase in the present tax rate.
 The city has three alternatives:
 (D It can postpone or fOregO
 making capital improvements
 regardless of their necessity or
 desirability.
 (2) It can pay for the proposed
 improvements out of current
 income at the expense to the
 taxpayer of a substantially higher rate than would other wise be required.
 (3 Finally, it can determine as closely as possible the finan- cial requirements of a pro-
 gram of capital improvements
 over a reasonable period of years and establish a long l range financing program which will adequately pro-
 vide for an improved finan-
 cial position as well as for
 the contemplated capital im- prOvementS.
 1 It has been said that it is irn- possible to determine from year to year what capital improvements may be required and that it is, therefore, impossible to plan our financing over an extended period I do not believe that we should be willing to accept this idea, which would mean that we are accepting the idea that it is impossible for a municipality to plan for consistent improvement in its financial affairs Naturally. no program can be en- tirely rigid. but a program can be arranged which will serve as a basis of financial policy over a period of years, even though unexpected cir i cutnstances may require some war; iation.
 It must be understood that the financial program. in detailed form.