Wilmette park commissioners authorized four bond sales on Feb. 8 – one to fund ongoing capital projects and three designed to lower the park district’s existing debt load by restructuring it.
Every three years, the district issues general obligation bonds, including the $1 million issue presented to the board Monday, to fund its ongoing five-year capital projects cycle, Executive Director Steve Wilson told commissioners. Such bonds don’t require a taxpayer referendum, he said.
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Financial adviser Eric Anderson of Barrington-based Piper Jaffray and Co., who presented the bond proposals to the board, said the remaining three debt issuances commissioners were being asked to authorize would only be sold if interest rates, which are currently very favorable, continue.
The district’s excellent credit can attract banks to its bond sales, Anderson said; the district currently has an Aa1 bond rating.
If interest rates remain steady, those debt sales – for which the district is seeking offers from about 40 banks – would refinance general obligation bonds and debt certificates that the district first issued in 2007, Anderson said.
The refinancing efforts could actually cut the district’s total debt by more than $500,000 over a 10-year repayment schedule, Commissioner Bryan Abbott said.
Individual taxpayers would see only a small tax savings, “about .7 percent of the 6 percent of your tax bill that comes from the park district, but we are doing exactly what we should do, which is lower that overall debt,” he said.
Abbott, who heads the district’s financial planning committee, said district boards have been lowering that debt load steadily since 2004, when it stood at about $39 million. Right now, the amount of debt the district has yet to repay from numerous bond and certificate sales is only $16 million, he said.
If the district decides to sell the restructuring bonds, about $6 million of existing debt would be refinanced, dropping the overall debt load roughly $14 million, he said.
The refinancing bonds include one for $1.67 million and one for $3.57 million, according to the report given to commissioners. The third issue is actually a debt certificate for $665,000, to restructure payment schedules on debt certificates issued in 2007.
Board members unanimously approved all four sales. Now the district will wait until early next month to ensure that current interest rates can be locked in, Anderson said.
The commissioners’ authorization gives the district until August 1 to issue the first two bonds and the debt certificate, Finance Superintendent Ken Eppelheimer said Feb. 9, “but they would probably be executed when we see the pricing.”
The lone exception will be the final restructuring bond, for which the district has an Oct. 1 window and would probably sell in September, Eppelheimer said.
Twitter: @pioneer_kathy