Refinancing bonds could take burden off Worth residents

Reporter Online, IL
By William Jones

Village plans to stretch out payments over next 30 years

Worth residents are well aware of the debt created by the construction of the Water’s Edge Golf Club. After all, they have been taxed to help pay off that debt since 2006.

Worth Mayor Ed Guzdziol said a plan to restructure the bonds that funded the course’s construction is in the works to ensure residents will not ever have to face that burden again.

The village has since 1999 been paying off the $7.1 million in bonds used to fund the golf course’s construction, but has made little headway due to high interest rates and low profit margins at the course, Guzdziol said. The course is expected to generate $1.78 million in revenues this year and spend $2.62 million, of which $1.02 million is bond debt.

“The fact is the golf industry is flat right now,” Guzdziol said.

Worth sold bonds to cover construction costs in 1999 when the estimated road and clubhouse construction costs went over budget, Guzdziol explained. The village got locked into a 15-year term with high interest rates, and while the course has generated enough revenue to cover operating costs it has not been able to keep up with the interest, he added.

The village for the first time in 2006 elected not to abate the golf course bonds in the tax levy, leaving residents to pay $389,000 of the debt.

A municipality cannot refinance its debts the same as homeowners, however, and Guzdziol said he has been waiting eight years for January 2009 when the village will have the opportunity to do so.

Worth Treasurer Barb Maziarek said she is working with Chicago-based Mesirow Financial for the bond restructuring, and the plan is to get a low interest rate to be paid over a 30-year period. The debt with interest has grown to close to $8 million, she added. The interest rates would not be determined until closer to the expected restructuring date in January, but in general are lower than the village’s existing agreement, she said.

Guzdziol said the village will not have as hard of a time trying to make the smaller payments over a longer period, which should prevent the burden from ever again falling on taxpayers, he said.

“I’m very excited to get this done,” he added.