CHICAGO — The Xenia Rural Water District’s financial position worsened in 2010, moving it closer to insolvency and increasing the pressure on the Iowa agency and its creditors to come to some agreement that likely includes debt forgiveness, according to a state audit.

The district’s current liabilities exceed assets by $12.2 million, according to state auditor David Vaudt’s recently released report. Xenia closed its books on last year with $10.5 million of revenue, less than 1% over what it collected the previous year, with water sales accounting for $9.5 million. At the same time, it had $19.8 million in expenses, a 54.4% increase over the previous year, including $6 million for interest costs.

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