Financial Analyst predicts Bolingbrook short term future

A Financial Analyst and resident of  Bolingbrook has been crunching the numbers for the past three months looking into the taxing situation, spending trends, and forecasting.  This is the results we pulled from an interview with him.

At the current rate, without any new debt being added on in Bolingbrook, he has forcasted that the person that is elected to Mayor next year will have a crisis on their hands. 

He further states that this could be the intention of the current elected officials whom are rumored as ready to retire.  The current officials know this crisis is coming and he believes they will flee town.

The crisis is the management of the long term debt that has been spent by the Village.  He claims that the debt is extremely high for the size community and that the taxing rates are already high, yet it is not enough to manage the debt load.  In other words, the debt and taxes are high, yet with all the tax revenue coming in from sales, property, and other taxes, they are still unable to pay down the extreme debt and have been abating it for years.  This means they are delaying paying on the debt at all.

He further predicted that the next Mayor would have to take on the risk of paying these debts.  If they were going to pay down HALF the debt in the next 20 years, they would have to raise property taxes to approx. 11%.  Recently the taxing rate has been moved from .068 to .070.  This means your property (which he said is being over assessed as it is, compared to other Villages in IL and other states) will continue to be assessed higher, even though its value has decreased, and the tax amount on the higher assessed value would be .11 instead of .070.  Whereas, he estimates that to pay down HALF the debt would mean an increase in property tax  and assessment amounting to $3,400 per household per year MORE then what you have paid in this year with an increase of 1.5% per year.  Therefore, an average household that spent $7,000 in taxes this year will soon be hit with a tax bill reflecting $10,400 to pay down only HALF the debt.

What is even scarier, is that he predicts, at the rate of spending the current Mayor and trustees are passing, that this amount is sure to exceed $4,000 per household per year with an increase of 1.5% per year, times the number of years they remain in office.

His prediction is that sales tax would need to be raised again, property tax assessed values and percentages will be raised, and not profiting businesses like the Golf Club would need to be sold off for pennies on the dollar.  he also predicted a drop in Moody's bond rating from AA, to A (which has already happened), to low B ratings over the next 5 years.

He further states that the water company take over will be even more detrimental to taxes, and this takeover can cost thousands more on the shoulders of the residents per year in their taxes.

Overall, he cannot see Bolingbrook sustaining a possible financial positive health in the next three years.  He claims that bankruptcy is not in the Villages best interest, as many government bodies cannot claim them, but he does not see how else to fix this problem.  The residents won't wish to continue paying high taxes for their homes.  They are not getting the basic government services on their tax money.  Nobody will buy a 2,000 sf home with taxes in the $10K per year range. 

His final comment brought a tear to my eye.  He stated, "The smart people with money are all leaving.  The poor and middle class are forced to stay because their homes are underwater.  These people will lose their homes due to having to pay a mortgage under water and high taxes.  They cannot afford this.  On average, you are looking at $2500 a month on housing, not counting other costs.  That is $30K per year, or about half of the annual household incomes of Bolingbrook residents.  Mortgage companies like to use 1/3 when allowing someone to take out a mortgage, because any higher and they cannot pay for food, transportation, utilities, etc. 

What that leaves Bolingbrook with is a great deal of foreclosures with investors turning an eye because taxes will be greater then they can charge for rent and profit. 

Our opinion is that this debt is so high because of bad choices. 
1.  They built a golf course that has lost money every year.
2.  They bought an airport, knowing it was losing money.
3.  They bought real estate, and they KNEW no other community has done this before, and it has lost money.
4.  They bumped up fees for services in order to get kickback to their war chests.
5.  They used high price companies as political favors and favoritism.
6.  They hired family, friends, and associates for high pay.
and many other decisions that have cost us dearly. 

While this forecast is scary, we wish we could offer a solution.  However, this analyst has clearly stated that NO SOLUTION exists.  The current elected officials put so much debt on the table that there is no longer any solution to fix this problem. 

So good luck to the residents and we hope that if you have money, you can find your way out with the least of losses.  If you don't have this kind of money, it is time to start looking to share and rent some rooms in your home!