Local

Algonquin looking to refinance $2.9 million in bonds

ALGONQUIN – Village officials want to continue taking advantage of the municipality’s AAA bond rating.

The village is in the process of refinancing about $2.9 million in bonds, with a sale expected to be finalized Tuesday.

The debt being refinanced was money used for the construction of the Public Works Facility in 2002.

By refinancing, the village expects to save about $200,000 in interest payments over the life of the bonds, which would have the same maturity date of 2020.

Interest rates on newly issued bonds continue to be historically low, according to a staff memo written by Finance Director Jack Walde.

Assistant to the Village Manager Mike Kumbera said the village annually abates property taxes that would be needed to pay off the debt. Instead the village has relied on sales tax revenue to pay off the debt.

In December, the village refinanced $7.7 million in bonds to obtain lower interest rates. That move will save the village $638,000 over the life of the bonds.

Those bonds were used for the expansion of the wastewater treatment plant, which took place in 2005.

During that process, the village had its bond rating 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.

Previously the village’s bond rating was AA+.

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