GENEVA — A self-described math geek with decades of experience in the corporate world, Mayor Jim Cecere loves to dive deep into the numbers.
Since becoming mayor in January, the Democrat has done just that. He came to the realization the city needed to look hard at its finances, including how it uses debt, so he looked to some of the brightest minds in the city to examine how the city uses debt to finance projects and what kind of effect the debt load has on taxpayers.
The ultimate goal: a formal debt strategy.
After a number of meetings, the Finance Ad Hoc Committee provided such a strategy to City Council. At its meeting last week, Council adopted the plan.
“This debt strategy gives Geneva a clearer, more disciplined way to manage borrowing, protect taxpayers, and plan for future investment,” Cecere said Thursday. “By adopting it unanimously, City Council sent a strong message that we are serious about long-term fiscal responsibility.”
According to the resolution’s preface, the legislation “does not approve specific borrowing. It establishes the rules, reporting, and decision process Council will use before future borrowing, BAN (bond anticipation note) conversion, or major capital financing decisions.”
During its series of meetings, the Ad Hoc Finance Committee reviewed Geneva’s debt position and long-term obligations, its recent $15.98 million bond anticipation note issuance, and more.
Cecere said Moody’s strong rating confirmed Geneva’s financial stability, with strong reserves, liquidity, and management. However, the committee also identified liabilities, including rising costs, long-term liabilities, limited tax-base growth, and future debt service pressure.
It said the general fund debt is “elevated but manageable,” but there is concern for water and sewer fund short-term debt compared to revenues. The city has about $65.5 million in debt across the three funds.
“The goal (of the debt strategy) is to protect the city’s credit strength, reduce future pressure on taxpayers and ratepayers, and preserve the city’s ability to invest,” the city said.
Borrowing for major projects is unavoidable, Cecere noted, but the city must ensure doing so does not create an unsustainable level of debt or burden on taxpayers. Cecere said that the burden already is high.
To not “shock” the system, the committee recommended a five-year implementation plan.
“The purpose of this resolution is simple: It gives the City Council a clear framework to make future financial decisions,” Cecere said before adoption. “This is not a resolution that stops investment. I want to make that clear. This actually does the opposite. What it does, it helps us understand what we can afford, how debt impacts future budgets, and how to protect taxpayers while we still invest. That’s its intention. And we will still look at roads, sewer, water, equipment, everything else that would otherwise go into it.”
Cecere noted that “first and foremost, it adopts a set of financial KPIs (key performance indicators) … that will help us understand where we are with debt service balances, reserves, (and) enterprise fund performance.”
Additionally, it also creates a bond anticipation note analysis that must be done before short-term debt is taken on, including the repayment source, the debt service, the rate impact, fund balance impact.
“Every new borrowing action should show what it does and its impact before Council acts,” he said.
Ward 1 Councilor Chris Lavin, who has been sounding the alarm on city debt since coming to Council in 2024, lauded the effort.
“I just want to emphasize the value of what’s been done here,” he said. “It makes transparent a lot of things that happen quietly behind the scenes, not intentionally behind the scenes, but bringing in members of the public who have a great expertise in this to give us oversight and understanding. … I do think that the next thing is that we have to take the ad hoc off this because you’re going to need a monthly dashboard that makes this accessible and enforced not just for (Cecere), but for the people who come behind you over the next few years.”