West Orange Is $171 Million In Debt, Town Hears Plan To Fix Financial Woes

WEST ORANGE, NJ — How is West Orange going to get its municipal debt under control in the new year? There’s a plan in the works to tackle one of the town’s most pressing financial issues, officials say – not only for 2026, but a decade into the future.

The West Orange Town Council discussed a proposed debt-management plan at their meeting on Tuesday.

Council president Joe Krakoviak said that principal and interest for the town’s debt is now taking up more than 12 percent of its municipal budget.

The council has been working on a potential fix over the course of the year, and has come up with a plan to start addressing it – which stretches over 12 or 13 years.

The town’s chief financial officer, John Ditinyak, and the town’s financial advisor, Phoenix Advisors, gave a presentation about the plan.

According to figures presented at the meeting, the town’s net debt as of 2024 is more than $171 million. This number has increased by 56 percent over the last five years.

The town’s debt includes: $54 million of long-term, fixed rate bonds, $11.4 million of bond anticipation notes coming due in March 2026, $62.7 million of bond anticipation notes coming due in November 2026, and $38 million of authorized but not issued debt.

Here are some of the debt management goals highlighted in the presentation:

• Continue to pay down outstanding debt, thereby reducing the related debt services over time
• Look to take advantage of lower interest rates, when possible, to permanently finance outstanding notes, thereby reducing interest rate risk
• Over time, replace borrowing with “pay-as-you-go” funding using cash rather than credit for capital investment
• Carefully manage capital spending with strategic planning to build “pay-go” capability
• Achieve strategic success by freeing up millions of debt service dollars annually to support operations, capital investment, and when possible, return value to the taxpayers through increased usage of surplus rather than taxation.

The plan to get the town’s debt in check may cause some pain, but it’s “hard medicine” that needs to be taken, Krakoviak said at Tuesday’s meeting.

“What we need to keep in mind is the phrase ‘delayed gratification,’” he said. “We’re going to have to tighten our belts. It’s going to be a little painful, because we’re used to borrowing twice as much as this. And anyone who’s gotten into credit card debt knows exactly what I’m talking about.”

The plan would mean making some tough choices about the most pressing priorities, Krakoviak said.

“Do we need a street fixed, or do we need a new fire engine?” he said. “That’s the kind of difficult decision this plan will force us into – with the flexibility that we can change out of it if we need to.”

Watch footage from the Dec. 9 meeting here, or view it below (video is cued to the presentation):

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