City will evaluate debt, overdue projects
Kuhn: We're going to be careful
DIXON – Not much time had passed after news of the city’s $40 million lawsuit settlement in the Crundwell thefts, before projects such as the Veterans Memorial Pool, a sports complex and a pedestrian bridge over the Rock River became part of the conversation around town.
None of them, however, were at the top of the finance director’s list.
The city will host a meeting sometime in the first week of October for Finance Director Paula Meyer to give a presentation on the economic impact of the settlement and the city’s financial obligations as a result of Rita Crundwell’s nearly $54 million embezzlement.
In total, the city expects to receive about $40 million, after it receives about $10 million from Crundwell’s sold assets and pays another $10 million in legal fees.
The first thing on Meyer’s mind: paying down debt and addressing deferred maintenance projects throughout the city.
As of April, the city had $12,656,314 in outstanding debt for five outstanding bonds, including one to construct the Public Health and Safety Building. Additionally, the city’s sewer fund carries $9,720,770 in debt, including a bond for construction at the wastewater treatment plant.
These are not negative balances, but scheduled payments on loans.
About $9.5 million from the sale of Crundwell’s assets will be used to get rid of negative balances in many city funds, Meyer said in May of the budget passed by the council.
Dixon has several funds – the band fund, the Social Security fund, the airport fund, to name a few – for which tax dollars are levied to bring in revenues.
Several are in the red because of the theft, and must be repaid, so about $8.9 million of the $9.5 million coming from the assets will be used to bring those accounts to a zero balance, Meyer said.
“I had no idea we were going to be getting this back now,” said Meyer, who learned of the settlement during Wednesday morning’s meeting. “I can’t go into detail just yet, but I have some thoughts in my head. ... My presentation will show where our debt is.”
The public is encouraged to attend the meeting, ask questions and make comments, Mayor Jim Burke said. The City Council will make the final determination on how to spend the money, but the residents and taxpayers are the “real stakeholders,” Burke said Wednesday in a written statement.
The city should see the settlement money by the end of the year, Burke said. It is uncertain when money from Crundwell’s sold assets will be received; it could take another several months.
With that said, Commissioner Dennis Considine does not want to see the council get “drunk with excitement of riches,” suggesting the city would be well served to take care of debts.
“It’s very important we keep our eye on the ball, and back to our strategic planning we’ve been working on,” said Considine in a phone interview Wednesday. “It’s more important to put our focus that way, on our long-range planning.”
Commissioner Jeff Kuhn echoed some of the same initial thoughts as Considine.
“This is a one-time revenue, and you have to be really careful not to get into something that’s going to be a recurring expense,” said Kuhn in a phone interview Wednesday. “I want to go very slow with this, look at suggestions, get input from citizens, and again, be extremely careful. No haphazard spending spree.”
Commissioners David Blackburn and Colleen Brechon could not be reached for comment Wednesday.
Coinciding with Wednesday’s news, the city continues to interview candidates for its new administrator position. A hiring could come as soon as next month, meaning the administrator could become part of the process for budgeting settlement funds.