At the request of Alderman and mayoral candidate Joe Hayden, I have reviewed Belleville's audit report for the fiscal year ended April 30, 2012. The report can be viewed at http://www.belleville.net/docs/Belleville%20City%20of-043012%20searchable.pdf. As a resident, CPA and auditor of governmental entities, I find several items troubling.
The report discloses a reduction in revenue for governmental activities (excluding sewer, swimming pool, etc.) from $52 million to $49 million between 2011and 2012, while expenses increased from $49 million to $69 million (page 7). For the fiscal year, expenses exceeded revenue for governmental funds by $19.8 million, resulting in negative net assets of $44.7 million.
The report reveals an increase in long-term debt in governmental funds of $21 million, all attributable to TIF. Total long-term debt increased by $34 million (52 percent), for total city-wide long-term debt of nearly $99 million (page 10). The interest rates on the new TIF debt range from 6 percent to 9.25 percent (page 35).
In addition to the $99 million in long-term deb, there is $19.8 million in off-balance sheet TIF debt, as described in Note 7 (page 46), bringing total citywide debt to $119 million. Note 4 discloses future interest payments on long-term debt of more than $39 million through 2033, bringing total future debt service to $158 million.
This debt load will require an annual average debt service requirement of almost $8 million through 2033, nearly 20 percent of total annual revenue.
Kent G. McCoy
Candidate for treasurer