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Kankakee council approves up to $17.7 million in bonds to fund roads, sewer and capital projects
Summary
Council gave final approval Aug. 18 to ordinances authorizing up to $7.95 million in sewer revenue bonds and up to $9.75 million in general obligation bonds to fund sewer work, road maintenance, a hydroelectric project and other capital needs; refinancing of prior bonds was also authorized as an option.
The Kankakee City Council on Aug. 18 approved second readings of two ordinances authorizing not-to-exceed bond issuances: up to $7,950,000 in sewer revenue bonds (Series 2025B) and up to $9,750,000 in general obligation bonds. Both ordinances passed on final reading by roll call vote, 13 ayes, 0 nays.
Bob Vail, representing Rarity Securities, updated the council on timing, structure and purpose of the financing. “Rates have actually come down a little bit,” Vail said, and the city was targeting pricing the week of Sept. 11 with a closing around Sept. 24 if market conditions hold. He said the GO bonds were structured to net about $9,450,000 for capital projects and the sewer bonds to net about $4,000,000 for sewer projects, with an additional refinancing option of roughly $3,500,000 if savings justified it.
Why this matters: The borrowing is intended to fund street and road maintenance, Central Brookmont Boulevard underpass repairs, a new aerial ladder truck, squad cars, and sewer and environmental-service utility projects including work on the hydroelectric plant. City staff and the bond presentation emphasized the financing aims to avoid raising the city’s tax rate above current levels while replacing maturing debt and creating future borrowing flexibility.
Key details and allocations: City materials distributed to council showed the GO bond program would support roughly $4.5 million of road work (combining city funds with Motor Fuel Tax where appropriate), $1 million toward the Brookmont Boulevard underpass (sidewalls, sidewalks, lighting and resurfacing), equipment purchases (including an aerial ladder truck and police vehicles) and funds for future Riverwalk phases. The sewer revenue bonds would include an allocation for up to $2 million of additional work at the hydroelectric facility; city officials said the plant is expected, if fully restored, to generate an estimated $300,000–$400,000 annually though that projection was presented as an estimate rather than a guaranteed revenue stream.
Refinancing option: Vail said refinancing the outstanding 2013B bonds could yield estimated debt-service savings of about $130,000 at current rates; however, he noted the city would only proceed if the market justified the savings.
Votes and next steps: The sewer bond ordinance (not-to-exceed $7,950,000) carried on a motion from Alderman O’Brien with a second from Alderman Johnson and a 13–0 roll-call approval. The GO bond ordinance (not-to-exceed $9,750,000) carried on a motion from Alderman O’Brien with a second from Alderman Jones and a 13–0 roll-call approval. Council members heard the financing timetable and an S&P rating call was scheduled; final interest rates will be set at pricing in September.
