The chart has been corrected. Normal actually has FIVE loans they are only paying interest on. Debt payments in FY 2020 total $5,549,176. Interest is $3,344,176. TIF revenue will not cover the payments.
(This was incredibly difficult to do!)
By: Diane Benjamin
The theme for Monday’s Normal Town Council meeting was we LOVE Uptown. Kathleen Lorenz (2:39:40) mentioned a disconnect between the Town and the people forced to pay for it. She wants taxpayers to believe Uptown is an investment. Lorenz wants an “elevator speech” to tell the story of Uptown. The finance director claims a small percent of the budget goes to paying off debt. That is because it has been spread out over MANY decades. Of course that increases the interest cost significantly.
One thing always left out of Uptown spending is how much INTEREST is charged on the money they borrowed. Uptown didn’t cost $90,000,000, that is just principle. Don’t forget Uptown 2.0 is still planned even though Uptown 1.0 isn’t done.
From the Financial Statements – PDF page 177 and following http://www.normal.org/DocumentCenter/View/15625/CAFR19-FINAL-DOC
The Town has three loans they are only paying interest on. In 2020 the Town is making the first payments on a loan taken out in 2012.
From the CAFR – just the applicable pages: Normal’s Debt
The interest of $41,193,179 is what they have LEFT to pay, it doesn’t include what they have already paid. Look closely at the chart, two loans show interest is more than the original loan.
This is what Normal reported to the Comptroller’s office as of 3/31/2018: http://warehouse.illinoiscomptroller.com/
In one year the Town of Normal only paid off $1,600,000 of the debt. (88,125,000 – 86,525,000)
The TIF report (when issued) will have more information. As it stands now taxpayers will be in debt until 2040 just for Uptown. The Town could refinance and extend the payments even farther, or they could borrow even more money. Does the TIF revenue cover the payments now? I won’t know until that report is issued.
Below is the TIF Revenue reported as of 3/31/2018 – it probably didn’t cover both principle and interest: 18TIF Downtown_Development
The Town is gambling that increased revenues will pay the bonds, if they don’t taxpayers will be paying the bill. I would compare this to buying an expensive car because I can afford the payment. I would have to ignore it takes 7 years to pay it off and interest adds 50% to the cost.
What’s your “elevator speech” for the debt Kathleen? “Normal” people don’t gamble the future for shiny and new, especially when it isn’t their money.