Council hears first reading for $7.95M sewer revenue bonds and up to $9.75M GO bonds to fund infrastructure, hydroelectric work

The City Council received first readings of two parameter ordinances authorizing bond sales to finance capital improvements and refund select prior debt. Bob Vail of Bernardi Securities reviewed market conditions and proposed structures that would allow the city to issue up to $7.95 million in sewer revenue bonds (Series 2025B) and up to $9.75 million in general‑obligation bonds for capital projects.

Vail described a plan to use shorter maturities for the sewer bonds (about 11 years) and a longer schedule for the GOs (about 20 years). The sewer financing would generate approximately $4 million for Environmental Services Utility (ESU) projects and, under the ordinance’s authorization, may include refinancing of the city’s 2013B sewer bonds if market timing produces net interest savings. Council members and staff discussed that roughly $2 million of ESU proceeds are intended for work at the Kankakee hydroelectric dam; the council transcript states that the upgraded hydroelectric facility is expected (as discussed in the meeting) to generate an estimated $300,000–$400,000 annually once operational.

Vail said the goal of the proposed structure is to maintain a roughly stable debt‑service tax rate (he used a conservative 2% EAV growth assumption for projections) so future borrowing windows remain available. The budget committee had recommended the ordinances by a 6–1 vote before tonight’s first reading. No final votes were taken; the council is scheduled to return for second readings and final action on Aug. 18, with pricing targeted for mid‑September and closing late September if market conditions permit.

Why it matters: The proposed borrowing would fund sewer lining, manhole repairs, basin work, selected street projects (examples mentioned included West Avenue and Brookmont Boulevard) and hydroelectric dam work. The measures would reshape near‑term capital funding, affect the ESU debt‑service schedule, and could produce interest savings if refunding is timed advantageously.

Clarifying details and timeline: The sewer bond structure shown in materials aimed to preserve ESU annual debt service near recent levels before declining; proposed ESU issuance would be roughly $4 million (11‑year maturity) at an assumed interest rate near 4.47% in the presentation. The GO structure proposed roughly $9.45 million for projects at about a 4.87% assumed rate in the illustrative schedule. The council took the ordinances as first reading only and will consider final readings on Aug. 18. Pricing was described as targeted for Sept. 11 with closing around Sept. 24, subject to market movements and final approvals.

Council response and next steps: Council members asked about the city’s currently available capital from prior issuances (staff estimated roughly $500,000–$600,000 available) and confirmed that the hydroelectric project is among ESU priorities. City staff and Bernardi will provide updated figures ahead of the Aug. 18 meeting for final consideration.