The Fall of Libertyville

Moody’s Investors Service dropped Libertyville’s general obligation rating two notches to Aa3 and affirmed its negative outlook due to a deteriorated fiscal position.

The review came in conjunction with the village’s upcoming $15 million refunding. Libertyville has about $27 million of outstanding debt. The deal will restructure and extend the maturity on bonds issued in 2000 and 2001 to acquire land and construct a village-operated ­recreational facility.

“The downgrade to the Aa3 rating reflects the village’s significantly deteriorated liquidity position, mature economic base that includes above-average income levels, and average debt burden with slow principal amortization,” analysts wrote.

Libertyville wrote off about $8.4 million of receivables involving the complex, and as a result its general fund reserves declined to just $1.1 million in fiscal 2010, or a narrow 5.3% of revenue, from $9.7 million, or 51 % of revenue, in ­fiscal 2009.

Officials expect to continue to support the sports complex operations and debt-service requirements with annual transfers of approximately $600,000 from the general fund.

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