Fair
64°FFairFull Forecast

Panel need to hold its horses?

Finance advisers: Surplus of Crundwell money not likely, debts will be paid first

Published: Tuesday, Nov. 20, 2012 1:15 a.m. CDT • Updated: Tuesday, Nov. 20, 2012 1:51 a.m. CDT

DIXON – City financial advisers Stan Helgerson and Dave Richardson came to the City Council meeting Monday with a message: Slow down.

There’s a notion out there that there will be a surplus of money coming to the general fund from the sale of assets belonging to – and money no longer being pilfered by – Rita Crundwell, the former comptroller who stole nearly $54 million from the city over two decades.

The sale of her assets so far have generated only about $7 million. That won’t nearly cover the money owed to various city funds depleted, it is assumed, by Crundwell moving money from one pot to the next string of thefts and misdirections that has yet to be unraveled.

“We wanted to say slow down,’” said Richardson, noting the city has not yet received any money from sold assets. “This idea that the city would have all this extra money to spend on projects was not realistic. She was taking from the city’s internal funds.

“The city must exercise fiscal discipline in following its priorities to pay back these debts.”

Richardson and Helgerson suggested paying back $1.3 million in money it is assumed Crundwell moved from the motor fuel tax fund, the downtown development fund, the band fund, the Oakwood Cemetery fund, the civil defense fund and the emergency vehicle fund be priority No. 1.

Then the city should pay back about $600,000 owed the working cash trust fund and $700,000 owed the water and sewer funds.

Next, the city should reimburse more than $5 million owed the Illinois Municipal Retirement Fund and Social Security fund, they said.

Those debts do not include loans made to the landfill, sales tax and public benefit funds that Richardson and Helgerson suggested be written off.

The city also should evaluate any other negative fund balances and bring them into the black, they said.

The general fund, $3.4 million in the red, will need to be replenished. Steps have been taken to bring it to an appropriate balance through the tentative tax levy.

The city also owes about $13 million in capital projects, but these are a lower priority since such loans are paid back over many years.

“The city will not get even close to the money back in as was lost,” said Paula Meyer, the city’s finance director.

Mayor Jim Burke said the city’s first priority is to get rid of the debts but indicated these figures have been tallied without the city receiving any money to date from Crundwell’s sold assets.

“Until we know, nobody knows what that amount will be,” Burke said. “Until we really know what that figure is, there’s not a clear blueprint as far as the future goes.”

 

National video

Reader Poll

Should the United States intensify its attacks on terrorists who belong to ISIS (the Islamic State of Iraq and Syria)?
Yes
No