Evanston Raises Debt Limit By $37 Million To Fund Robert Crown

EVANSTON, IL — Evanston raised its debt limit to allow it to borrow more money for the Robert Crown Community Center, Ice Complex and Library project. The City Council approved Monday a budget resolution lifting its borrowing limit from from $113 million to $150 million. The city also introduced an ordinance to issue $85 million in bonds, mostly for capital improvements.

Alderman voted 7-0 in favor of increasing the debt limit, a final vote on issuing the bonds is set for the council's July 9 meeting. Ald. Cicely Fleming, 9th Ward, and Ald. Melissa Wynne, 3rd Ward were absent.

The projected cost of renovations to the Robert Crown Center has grown from under $30 million in 2013 to more than $50 million, according to the most recent estimates presented to aldermen. In addition to two ice rinks and new artificial turf outdoor fields, the center will feature a 5,000-square-foot library and expanded child care services. City officials hope to begin construction this summer and have the project ready for next fall.

Though not in attendance, Fleming released a statement about the bond issues and debt limit, which was read at the meeting. She said she had "many concerns" over the request for $50 million in bonds to fund the Robert Crown project. She suggested the city make more efforts to raise money before issuing the bonds and said increasing the debt limit puts the city at risk of a lowered credit rating and future problems borrowing.

"It is my goal that we would look to thoroughly examine a pay-as-you-go capital improvement plan; consider liquidating city assets (like the recycling center), and imposing spending restrictions," Fleming said. "Without such measures in place and our shared commitment to not increase taxes, we risk a repeat of Crown – a major capital need without sufficient financing options."

Mayor Steve Hagerty said he agreed with Fleming's statement.

"We have to have a finance plan for how we're going to pay down this debt," Hagerty said. "Basically, each million dollars of debt costs about $70,000, so if you're talking about taking on $50 million of debt, you're talking about taking $3.5 million in additional expense. This council has to be serious about the ways to address that expense," he said. The mayor suggested the city could cut spending, find another revenue source, or raise property taxes, which he opposed.

Ald. Rainey said the new building would be a "magnificent revenue source." She said it would make the city a destination and make Evanston a more desirable community.

"Years ago, I used to say, 'Oh, it's going to hurt our bond rating,'" Rainey said. "We've always done really well with the bond houses."

Shannon Jacobson, senior managing consultant with PFM Financial Advisors, told aldermen she would be surprised if the city's credit rating suffers from issuing the bond.

"From a ratings perspective, you never know how taking on additional debt will affect your rating. Obviously the rating agencies cite the pension liability and, obviously, reserves and liquidity as an ongoing issue," Jacobson said. She said the city was engaging in "prudent fiscal management" by also issuing $10 million in refunding bonds, which would wind up saving nearly $1 by paying back some loans issued a decade ago.

Money raised by the Friends of Robert Crown group, which said it has already raised more than $11 million toward the project of a $15 million goal, could potentially reduce the amount of money the city would need to borrow next year, since the city plans split up the $50 million in debt over two fiscal years.

City staff, along with the project's design consultants and construction manager, will present the project schedule, the final design review and other updates to the community at a meeting from 6:30 to 8:30 p.m. on July 11 at the gymnasium of the Robert Crown Center, 1701 Main St.

Discussion of bonds and increase to debt limit to fund renovation of Robert Crown Center and other projects from Evanston City Council June 25 meeting:

Related:

• Robert Crown Project Moves Forward
• Firm Selected for Architecture of New Robert Crown Center
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• Bank Announces Donation To Crown Center Rebuild