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Waukegan’s bond debt falls below $100 million

Updated: March 9, 2013 6:16AM

WAUKEGAN — Laying open its books from the 2012 fiscal year, the city has a portfolio still feeling the effects of the economic downturn and a decline in property values, though the level of bond debt dipped below $100 million and closer to pre-recession levels.

“We’re making progress, right?” asked 6th Ward Ald. Larry TenPas when observing that general-obligation debt fell from $105.8 million in the 2011 fiscal year to $92.4 million.

“We are making progress,” said Finance Director Tina Smigielski, who guided the council on Monday night through highlights of an audit performed by Oak Brook-based Baker Tilly.

“That is to be commended — we are working it down,” said TenPas, “and that should be our major objective.”

According to numbers aired Monday, one component of debt that is nearing retirement is the $26.5 million taken out by the city in February 2003 to cover the pubic contribution toward what is now Fountain Square of Waukegan, including the purchase of a still-vacant 32-acre site for a casino.

The audit showed $2.9 million remaining on that bond issue, while the bonds used to construct the Genesee Theatre and the new City Hall still total more than $24 million.

In a review that underscored financial troubles seen since 2009, most of the news shared by Smigielski for the fiscal year ending April 30, 2012, saw negatives elbowing out positives:

While Smigielski said property taxes “performed as budgeted,” coming in at $12.5 million, other sources of revenue weren’t as reliable. For example, she said “sales and utility taxes performed poorly vs. the budget estimate,” with sales taxes alone coming in $144,244 less than forecasted.

Similarly, while Smigielski said that license revenue, franchise fees and the city’s share of state income tax all “performed well,” she added that other revenue sources like building permits and charges for service were down “for a variety of reasons, but most notably due to continued economic pressure.” Fines and forfeitures, which were budgeted at $2.6 million, came in more than $314,000 short.

The city saw a $12.8 million depreciation in its land, buildings, machinery, equipment and vehicles, including a depreciation in land alone from $13.1 million to $6.2 million.

All told, the city’s unrestricted net assets came in with a negative balance of $31.2 million as of April 30. “While (being) in a negative balance is obviously a significant concern,” Smigielski said, “it is an improvement over the prior year, when unrestricted net assets remained at $50.6 million (in the red).”

General fund expenditures for the last fiscal year came in over budget by $2 million, at $63.8 million. Smigielski reported that “while the city continued to hold the line on staff levels, freezing vacancies as long as possible,” a general-fund deficit of $4.2 million was created by such factors as one-time payouts for workman’s compensation and general-liability settlements.

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