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posted: 8/19/2013 5:00 AM

Consider debt in financial outlook

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Your article on suburbs' reserves was a very shortsighted view of a government's finances. A focus on current reserves is similar to focusing only on the $10,000 in your savings account without considering your credit card debt of $13,000. This type of thinking is how many Americans have gotten into financial trouble and many governments are in a financial crisis.

As a certified public accountant and CEO of Truth in Accounting, I studied the suburbs' overall financial positions. I analyzed their total assets and current and long-term obligations.

The amount of capital assets held by the suburb was not included, because it would not be prudent to sell these assets to pay accumulated bills. The debt related to capital assets was also excluded.

This analysis revealed Hainesville did have more than $3 million of resources in excess of current and long-term debt. But Inverness and Lincolnshire have outstanding debt that exceeds their reserves by $1.3 million and $10.4 million, respectively.

The Village of Inverness has more than $7.8 million of assets available, but has unfunded pension liability of more than $400,000 and $8.8 million in debt outstanding. The Village of Lincolnshire has $20 million of assets available, but has unfunded pension liability of $7.1 million and debt outstanding of $23.4 million.

While your article pointed out that Hampshire's reserve fund was the lowest of any municipality studied, Hampshire needs less than $300,000 to cover its current and long-term obligations.

The lack of transparency in governmental accounting and budgeting is a root cause of Detroit's, Stockton's and other bankrupt cities' financial troubles. Citizens and reporters need to focus on their suburb's true financial condition and the money needed to cover current bills and the long-term obligations the suburbs have already accumulated.

Sheila Weinberg


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