South Suburb Credit Rating Among Nation's Worst: Report

Riverdale operates its general fund at -52.1 percent of revenues

By Michael Kaplan
|  Wednesday, Oct 5, 2011  |  Updated 1:46 PM CDT
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South Suburb Going Broke: Report

villageofriverdale.org

Riverdale is No. 7 on 24/7 Wall Street's list of worst rated municipal bodies.

Riverdale, Ill., is going broke. That's according to a 24/7 Wall Street report which analyzed the nine municipal bodies with the worst credit ratings assigned by Moody's.

The southern suburb, with a population of just over 14,000, collected $8.3 million in revenues in 2009 but had a debt of $9.3 million in the same year.

"The village funded itself by borrowing money from its sewer and water funds, and now carries an operating fund balance of -52.1% of revenues," wrote 24/7 Wall Street in its report.

Riverdale currently has a Moody's credit rating of Ba2, a speculative grade also known as "High Yield" or "Junk".

Yet Riverdale is not going broke in the same ways as the other cities on the list. Detroit and Pontiac suffered huge employment losses during the recession as General Motors and Chrysler declared bankruptcy.

Smaller cities are in the red because they invested too much on certain projects.

For example, Strafford County, N.H. (No. 8) spends two-fifths on its budget on a nursing home, and Harrison, N.J. (No. 4) built a $200 million sports arena in March 2010 which cost the city $39 million in debt but has yet failed to have the expected returns.

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