Elgin approves bond ordinance and amended sale to fund lead service line replacements after securing IEPA loans
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Summary
Council amended and approved a general‑obligation bond ordinance tied to utility improvements and lead service line replacement; interest‑free IEPA loans and $3M principal forgiveness reduced the bond amount to $15.77 million, S&P reaffirmed an AA+ rating and bonds sold to Hilltop Securities at a 4.11% true interest cost.
The Elgin City Council approved an amended ordinance authorizing the issuance of general‑obligation bonds to finance water and sewer utility projects, including a multi‑year lead service line replacement program, after city staff reported additional state loans and federal forgiveness that reduced the bond amount.
Lede: Council amended the ordinance and approved issuance of approximately $15,770,000 in general obligation corporate purpose bonds, series 2025, to fund water and sewer utility projects including lead service line replacements.
Nut graf: Finance staff told the council the city initially budgeted $28.5 million of debt for utility projects; the award of a $3 million forgivable principal‑forgiveness loan and two interest‑free Illinois Environmental Protection Agency (IEPA) loans totaling $8.9 million reduced the bond requirement. The sale netted the necessary amount; Standard & Poor’s reaffirmed the city’s AA+ rating.
Sale details: The city’s municipal advisor and staff reported the bond sale occurred April 23. The city raised the $16.6 million it had targeted after the IEPA loans; council later amended the ordinance to $15,770,000 before final approval. Four underwriters competed; the winning bid produced a true interest cost of 4.11% and Hilltop Securities (Dallas, Texas) was awarded the bonds.
Credit rating: Standard & Poor’s reaffirmed Elgin’s AA+ rating, citing stable operating budgets, conservative budgeting and strong reserves; pension liabilities were identified as a rating constraint.
Public‑process step: The city held a public hearing earlier in the meeting on the IEPA project plan for its lead service line replacement program; Nora Bertram (Water Director) explained the purpose of the hearing: state rules require a public hearing before projects included in the IEPA project plan can be financed. Staff said the plan enables the city to borrow across the next five years and that neighborhood‑level project details will be developed annually.
Ending: Council approved the amended bond ordinance 9–0 and directed staff to proceed with issuance; staff will follow up with neighborhood project lists and continue required IEPA reporting.