CHICAGO — Xenia Rural Water District, a once insolvent utility that is currently making good on its $125 million of bonds and loans under a restructuring agreement with its chief creditors, still faces long-term challenges that could threaten its ability to remain on track, according to an Iowa state audit.

Auditor Mary Mosiman's office acknowledged the positive impact of the agreement on the district's books, but suggested the restructuring was no panacea. "Significant uncertainties remain regarding the district's ability to continue its operations and to satisfy its obligations to its creditors on a timely basis," the audit reads. "Consequently, adjustments may be required to the recorded asset amounts and the classification of liabilities."

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