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Report shows city with high debt level

Of nearly 500 suburban Cook County government bodies, Evanston is in the unenviable spot of being in the top 20 in its ratio of debt to operating revenue.

That’s one data point from a report issued Thursday by Cook County Treasurer Maria Pappas, which says Evanston’s total debt of $368 million is 391 percent of its annual operating budget revenue of $94 million.

The report also says that that debt amounts to a total of $4,736 for each resident of the city.

By comparison the municipal debt burden for Skokie residents is $1,005 per capita, and it’s $3,837 for residents of Wilmette.

The Evanston figures themselves aren’t new. You could find them in the city’s Comprehensive Annual Financial Report.

But the comparison with other communities offers at least a starting point for putting the numbers in context, and explains why one of the themes of the budget debate at the Civic Center this fall was trying to reduce the amount of debt the city takes on to fund capital improvement projects.

And, in fact, the Comprehensive Annual Financial Report shows that the city’s total liabilities declined slightly — from $377 million in 2008 to $368 million in 2009.

Rating services, in reviewing city bond issues, have freqently noted the city’s high debt level, but describe it a "manageable."

Typical was this comment from Fitch Ratings last July: "Overall debt ratios are manageable at $4,030 per capita and 3.5% of market value especially given the community’s relative affluence. Principal amortization is rapid with 75% repaid within 10 years. The city’s five-year capital improvement plan includes $74 million in bonding for a host of capital improvement projects and debt levels are expected to remain affordable."

In the past city officials have also noted that Evanston provides a broader array of services than many other local governments — for example operating parks programs and libraries that frequently are run by separate taxing districts elsewhere, as well as operating its own water plant and three parking garages.

That means that in addition to the general fund revenue cited in the County Treasurer’s report, the city has other revenue sources that brought its total revenue to $167 million in 2009.

 

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