ALGONQUIN – Looking to save on interest costs, the Village Board proceeded with refinancing bonds it sold for the 2005 wastewater treatment plant expansion.
The village refinanced $7.7 million in bonds, which had an interest rate of 4 percent.
During the refinancing process, village officials received an interest rate of 2.53 percent said Village Manager Tim Schloneger.
The village will save about $638,000 over the life of the bonds, Schloneger said.
As part of the bond process, the village's credit rating was upgraded to AAA by Standard and Poor's Rating Service. The AAA rating is the highest rating possible.
S&P said the village had very strong budget flexibility, strong management with good financial policies and practices, and very strong budgetary performance, among other things.
Schloneger said that rating is a tremendous honor for the community.
Previously, the village's bond rating, which is similar to a person's credit score, was AA+.
Last year, the village looked into refinancing the same set of bonds, however financial advisors ultimately suggested the refinancing be pushed back a year, said Mike Kumbera, assistant to the village manager
Money to pay the debt for the $15 million wastewater treatment plant expansion in 2005, comes from the village's home-rule sales tax and development fees, Kumbera said.
The plant's capacity was expanded to meet growing residential and commercial demand and to meet future Environmental Protection Agency regulatory requirements.
Kumbera said the maturity date of 2025 on the bonds would stay the same.
Village Board members approved the refinancing on Tuesday.