CHICAGO - Officials in East St. Louis, Ill., must submit a revised fiscal 1994 budget to the city's financial oversight authority by Dec. 18, following the authority's rejection of two previous versions.
The latest rejection followed the city's failure again to provide debt service projections related to an anticipated debt restructuring plan in fiscal 1994, R. Bruce Patterson, the executive director of the East St. Louis Financial Advisory Authority, said yesterday. Authority and city officials have said they hope the plan can be implemented by next summer.
Patterson said that there may be a reasonable explanation of why the debt service allocation was omitted from the $24 million all-funds fiscal 1994 budget. But so far, city officials have not presented one.
Patterson suggested that the city may not be planning to restructure its debt in 1994, or may be planning the restructuring for late 1994, meaning that a debt service allocation would not needed until fiscal 1995. The city's fiscal year begins Jan. 1.
"We just want the city to focus on a decision one way or the other," Patterson said.
City officials did not return phone calls.
The city's proposed fiscal 1994 budget was initially rejected by the oversight board Nov. 6 because of inadequate expenditure and revenue projections. On Nov. 27, the authority returned a revised version to the financially troubled city because some of the authority's concerns, including those related to the debt service projections, still were not addressed.
East St. Louis is working on a plan that would restructure $79 million of debt, including 25.5 million of outstanding unrated bonds. Authority officials have said that the plan, which would need authority approval, is expected to include the issuance of about $30 million of bonds by the Illinois Development Finance Authority, which acts as a conduit issuer on behalf of Illinois municipalities.
Patterson pointed out that the city's revised fiscal 1994 budget also did not include funds set aside for unpaid bills between 1990 and 1993. The operational deficit, which pertains to the delivery of routine municipal services, is separate from the city's $79 million of long-term debt, Patterson said. He noted that the exact amount of the city's operational deficit is unclear.
Patterson said that the authority also was concerned that the city did not adequately detail its personnel expenses for fiscal 1994 in the budget.
However, Patterson noted that the city's revised budget did include several revenue and expenditure changes suggested by the authority. The changes include the listing of a $736,000 payment to the state to help pay off a $3.75 million loan given to the city in 1991, and a $236,000 payment on a bank loan that financed new fire trucks.
The authority, which was created by the Illinois General Assembly in 1990, must approve all East St. Louis budgets, financial plans, and contracts.
East St. Louis, which has a population of 40,000, is located across the Mississippi River from St. Louis. The city, whose property taxes are among the highest in the state, has experienced numerous financial setbacks, including a $474 million bond scandal in 1985.