The City of Lake Forest sold $9.78 million worth of bonds on Aug. 3 to pay for infrastructure improvements around the city and for improvements on a 10-acre site at Laurel and Western.
The bonds were bought by FTN Capital Markets in an online auction, Finance Director Elizabeth Holleb said during a city council meeting. The investor will get an interest rate of 3.039 percent, which is less than the city expected to pay, Holleb said.
Of the total, $4.69 million will be used for improvements called for in the city’s five-year plan. Those could include improvements to streets, parks and other public infrastructure. That percentage of the bonds will be repaid by property taxes, but property owners will not see an increase in their property taxes, Holleb said.
The remaining $5.09 million will be used pay for improvements to the Laurel and Western site that recently gained tentative approval by the city council for residential development. The money can be used for costs associated with buying the property, environmental clean up and site preparation, according to documents posted on the city website. Those bonds will be repaid by money generated by a tax-increment financing (TIF) district for the 10-acre site, Holleb said.
In a TIF district, property taxes in the district going to taxing bodies — library, parks, schools, village government, etc. — are frozen at a certain level when the TIF is begun. The taxing bodies continue to receive that amount, while any property taxes above that level go into a TIF fund — what’s referred to as “increment.”
The city has $59.8 million in outstanding debt, Holleb said. That includes this bond issue.
The repayment of this bond issue will run through 2032.