I reduced our debt by $37 million after Cunningham’s record increases, reducing interest payments and freeing up money for capital improvements. I also improved our credit rating, reducing our borrowing costs.
Under Sam Cunningham, we saw:
A record level of debt - $146 million
A record increase in debt - $69 million
I paid back more than half of Cunningham’s increase. I could have made an additional $37 million in capital improvements if I wasn’t fixing Cunningham’s messes.
The city’s debt is nearly all due to bonds. Bonds are secured loans, much like a mortgage. They are secured by the city’s right to levy property tax on the properties in Waukegan. Bonds are the main reason the property tax levy increased by 13.5% during Cunningham’s term. During my term as mayor, I did not take out any bonds and did not increase the property taxes. However, I still had to make bond payments on the existing bonds.
Sam Cunningham took out the seven bonds below.
Cunningham’s massive increase in debt caused Moody’s to lower our credit rating. On February 19, 2021, during Cunningham’s fourth year as mayor, they lowered the credit rating by assigning a negative outlook.
I improved the credit rating by paying down the debt, increasing our reserves and putting our finances in order. On March 20, 2023, towards the end of my third year as mayor, Moody’s improved the credit rating by removing the negative outlook, citing the city's improving fiscal position but expressing concern about elevated outstanding debt and post-retirement benefit liabilities.
Investopedia.com says: “Having its credit rating downgraded, or being under a negative watch, is a big blow for a company. It means it will have to pay a higher rate of interest to borrow money from a bank or issue bonds on the market for the foreseeable future.”
For further information, go to AnnTaylorForWaukegan.com/Debt.