Riverdale, Illinois, on list of U.S. cities going broke
Erin Wright, Y! Local
While President Obama and the assorted GOP contenders for the 2012 presidential nomination push their ideas for getting the country back in the black, there are some U.S. cities and counties on the brink.
An analysis by 24/7 Wall St. examines the nine municipal bodies with the worst credit ratings assigned by Moody's, not including school systems, rated Ba2 and lower. (For perspective, Moody's rates junk bonds as Ba1.)
Coming in at No. 7 on the list is Riverdale, Ill. The small village south of Chicago collected $8,358,000 in revenue in 2009, but was in debt to the tune of $9,350,000 during that same year.
Interestingly, Riverdale's financial woes may stem from the town's small reliance on debt financing. The report states that Riverdale "funded itself by borrowing money from its sewer and water funds, and now carries an operating fund balance of -52.1% of revenues."
Riverdale is like many cities on the list in that it is extremely small (just over 14,000 residents at last count), but aside from the cash-flow issues, the struggling locales have little in common -- even the reasons they are going broke are vastly different. Central Falls, R.I., which tops the list, is in the red due to a bloated pension plan. Strafford County, N.H., spends two-fifths of its budget on a single nursing home. And Detroit was a victim of a tanking economy that saw several major employers, such as Chrysler and General Motors, declaring bankruptcy and residents leaving to find work and homes elsewhere.
The full list:
1. Central Falls, R.I.
2. Pontiac, Mich.
3. Jefferson County, Ala.
4. Harrison, N.J.
5. Detroit, Mich.
6. Salem, N.J.
7. Riverdale, Ill.
8. Strafford County, N.H.
9. Camden, N.J.
