Avoiding debt payment can cost city

2014-03-28T17:15:00Z Avoiding debt payment can cost cityDarren DaRonco Arizona Daily Star Arizona Daily Star

Kicking the can down the road on Tucson’s debt can prove costly.

Some on the city council are considering restructuring all or a part of the city’s debt this year to help cover the budget gap.

The restructuring could free up to $13 million and lessen the blow to departments slated for cuts from the city manager.

But finance officials are urging the council to not avoid this year’s debt payment.

While the restructuring would save money right now, it would compound the city’s future budget woes.

This year’s restructuring will cost an extra $500,000 next year. Overall, it will cost an extra $6 million.

Furthermore, another restructuring could trigger the bond rating agencies to drop the city’s credit rating. If that happens, interest rates could increase and cost the city even more to repay its debt.

Contact reporter Darren DaRonco at 573-4243 or ddaronco@azstarnet.com. Follow on twitter @DarrenDaRonco​

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About this blog

Arizona Daily Star's Government blog includes stories and related items from Tucson and Pima County written by Star reporters Darren DaRonco and Jamar Younger.

Have a government-related topic you would like to see in the blog or suggestions? Email Darren DaRonco at ddaronco@tucson.com and Jamar Younger at jyounger@tucson.com

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