The Mayor of Belize City on Friday of last week revealed that he is looking to float a municipal bond to the tune, according to him, of between 4 and 5 million dollars. “It’s a short term municipal paper where we believe that floating this bond will straighten out our cash flows seasonal problems that many councils have been facing for years. We believe that the short term paper gives us that ability to meet both short and long term commitments,” stated Wagner. So in effect what he will be doing is creating a debt in order to service debt. It seems to us that he will be servicing recurrent expenditure with the money as well.
Based on our information the council is not only in a slow season, it is basically at a financial crisis as it is unable to service recurrent expenditures such as fuel. We are informed that a couple of weeks ago the council’s operations came to a standstill as their fuel supplier refused to give them fuel because of non-payment. That is compounded by the fact that they do not have the finances to procure ordinary everyday maintenance supplies such as aggregates for street repairs and the like. Equipment is also quickly falling into disrepair and the council is unable to fix them.
So they are unable to service recurrent expenditures yet they are now seeking to further saddle the municipality with more debt. When pressed to state where the financing will come to service this debt he simply stated that it would be done through “new revenue streams that we have identified.” Of course we do not know what those revenue streams are as the Mayor flatly refused to say. If we are to hazard a guess we’d say it is taxation.
The last time a bond was floated was during the tenure of UDP Mayor Darrell Bradley. At the time 20 million dollars as successfully floated and it was used to retire an overdraft facility as well as finance a massive capital investment program where over a hundred and sixty streets were paved with concrete and numerous others were upgraded to near paved standard.
By our reckoning when municipal bonds are raised it is to finance these types of capital investments, not to finance debt or recurrent expenditures as what Mayor Wagner is intent on doing.
