Waukegan OKs $30M bond remedy for deficit, debt

Would-be casino site will be sold

WAUKEGAN -- A $30 million bond will be sought by the city to cover a number of needs, including closing of its budget deficit and refinancing what is owed on Fountain Square of Waukegan property that was once set aside for a casino -- land that will be put on the market.

The City Council voted unanimously on Monday to approve up to $30 million at a finance rate of up to 6 percent. According to finance director Tina Smigielski, the estimated rate is around 5 percent.

Smigielski said $6.5 million of the amount will be used to cover the city's operating deficit, while refinancing the Fountain Square property will take up another $6.9 million.

After committing $2 million of the amount to costs of issuance and to cover the first year's interest payment, the remaining $14 million will be used to restore the city's working cash fund, which Smigielski said stands at zero.

Sixth Ward Ald. Larry TenPas asked if the 30 acres on the south side of Fountain Square could be sold to pay off the $6.9 million. Smigielski responded that "it is the mayor's intent" to put the land on the market.

TenPas was also told that any sales proceeds in excess of $7 million could be used for other purposes, including retiring other debt.

Aldermen Sam Cunningham (1st Ward) and Thomas Koncan (2nd) both called on the city to see if any new funds could be used to recall three employees laid off within the past week due to the budget deficit.

"Is it conceivable that we can bring those bodies back that have been let go?" Cunningham said, adding that he and other aldermen "care about people's jobs in the city of Waukegan."

The three jobs in question -- two building department employees and one clerical worker -- were trimmed after a reported deal between the city and the Service Employees International Union was rejected by its membership late last month.

"I believe the city and that union need to get back together," Koncan said. "Work it out and get those three bodies back."

The bond issue approved Monday reflected the end of one financial chapter for the city. Earlier this year, officials revealed that Waukegan was so far in arrears on filing financial audits that it was unable to take out bonds. Smigielski said that situation has since been addressed, with audits dating from the 2006-07 fiscal year having been completed and posted online.