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City, residents present options for $40M

Spending down debt, attacking projects favored by finance director

Published: Friday, Oct. 11, 2013 1:15 a.m. CDT
(Alex T. Paschal/apaschal@saukvalley.com)
Dixon business owner Jeanette Heesaker offers suggestions for what the city could do with the Rita Crundwell settlement money during a special town hall meeting on the subject Thursday at Loveland Community House in Dixon.
(Alex T. Paschal/apaschal@saukvalley.com)
Deb LaCoursiere suggested that the city use some of the Crundwell money to renovate and reopen Memorial Pool.
(Alex T. Paschal/apaschal@saukvalley.com)
Paula Meyer, Dixon finance director, speaks to about 200 people who showed up for the town hall meeting. Meyer suggested the Crundwell settlement funds be used to pay down debt and upgrade infrastructure.

DIXON – While nearly $40 million sounds like a huge windfall for the city, the options for spending it are likely to be limited by debt obligations.

Dixon faces a sizable debt and overdue maintenance projects, restricting options for spending what it will recover from an out-of-court settlement and sold assets from Rita Crundwell's estate, Finance Director Paula Meyer said Thursday at a town hall meeting.

About 200 residents and media filled roughly three-fourths of the auditorium at Loveland Community House. The meeting was held for residents to give their input on how the money should be spent. They suggested everything from paying off the city's debts, to tax abatements and recreational projects.

Paying off debts for sewer projects to in turn lower sewer rates was a common request of residents who spoke Thursday. It even drew applause and an "amen" from an audience member the first time it was mentioned.

No feedback was given by public officials.

The next phase in determining how the money is spent will come after a city administrator is hired. A vote on a recommendation is expected from the council Nov. 4, Mayor Jim Burke said.

Click here to read a statement from Dixon Mayor Jim Burke.

Several days of advance notice will be given to the public, as well as time for them to weigh in on a course of action regarding the money, Burke said.

In total, the city is expected to receive $29.7 million – after legal fees – from an out-of-court settlement reached last month with its former auditors and bank. Also, it expects about $9.245 million from the sale of Crundwell's assets, Meyer said.

The city faces debts of $8.7 million in money borrowed from its own operating funds and $12.3 million in debt from three outstanding bonds. The bonds cannot be paid off contractually until December 2021, amounting to about $4 million more owed in interest.

Meyer said paying down the debts totaling $23,234,387 are a must.

Streets, sewers and building projects were listed as options, the finance director said.

Setting up $5 million in general fund reserve, $4 million toward a River Street sewer and road project, and $2 million toward other sewer capital projects were suggestions given by the finance director.

Also, investing in economic development programs was mentioned as a possibility, Meyer said.

Former Commissioner Walter Lohse said he would like to see the money spent on paying down debts to give residents relief in either property taxes or sewer bills, while others called for outright property tax abatements.

Both suggestions present challenges, Meyer said after the meeting.

"Lee County is under a tax cap, and if we lower what we take in, we may not be able to ask for that much again," Meyer said.

In regard to lowering sewer rates, Meyer said, "We can pay back that outstanding debt, but we would have capital projects to tackle that would put that bill right back on citizens."

Others spoke about increasing recreational activities to help entice economic development. Projects mentioned included riverfront improvements and renovating or building a new swimming pool. The city's Veterans Memorial Pool has been closed for the past dozen years and there is an ongoing movement to renovate it.

A program to issue loans to businesses looking to improve infrastructure to accommodate the disabled was suggested, too.

All suggestions will be considered, Burke said.

"The bottom line for the council is to do what is in the best interest of the taxpayers and the community at large," Burke said. "That is our guiding principle."

Burke said the City Council has been under disclosure restraints regarding the Crundwell incident. Questions will not be addressed until everything is "signed, sealed and delivered" involving all parties, he said. No questions along those lines were asked at the meeting.

"Our city government has been put under a microscope, as it should be," Burke said. "We have had and continue to have a full autopsy, and with your help, support and encouragement, Dixon will come out of this crisis a better, sounder and a more attractive city to live in than ever."

Administrator could be hired in early November

DIXON – The City Council could vote on a city administrator hire as soon as Nov. 4, said Police Chief Danny Langloss, a special assistant to the City Council.

A preferred candidate has been chosen, Langloss said Thursday. The City Council decided to hire an administrator to professionalize its government.

City officials met with the candidate Wednesday at City Hall. The next step is to conduct a thorough background check, similar to those given to police officers, Langloss said.

After the check is conducted, the candidate will be introduced in a meet and greet with the public before the council votes.

The City Council has the final authority to hire candidates.

Once an administrator is hired, that person will oversee the day-to-day operations of the city and commissioners will maintain final authority in departmental matters. Commissioners will see their role shift from overseeing operations to policy making.

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