GENEVA – Kane County’s government is hoping persistently low interest rates will save a chunk of change in coming years.
Thursday, the County Board Finance Committee recommended the full County Board approve an ordinance that would allow the county’s bond counsel and advisers to move ahead with plans to refinance a portion of the county’s debt.
Under the proposal presented Thursday, the county, under the guidance of its advisers, Speer Financial of Chicago, would put out to bid two bond series. Issued in 2002 and again in 2005-06, the bonds were used to finance the construction of the county’s Juvenile Justice Center and the county jail.
The bonds allowed the county to borrow about $42 million.
However, those funds were financed in years in which interest rates were significantly higher than today, Speer Financial said. The county agreed to repay the bonds with average interest rates of 4.45 percent to 4.66 percent, depending on the particular series.
Under current financial conditions, Speer said the county could refinance those bonds under interest rates of 2 percent or less. Should the county close under those rates, Kane’s government could save around $2.7 million over the remaining life of the bonds, Speer Financial projected.
The county would spend about $94,000 to pay for the refinancing.
A similar refinancing recently was completed by the Kane County Forest Preserve District, with officials there projecting taxpayers could expect to save about $7.5 million to $8 million over the life of bonds issued to finance land purchases by the district.
Kane County Board member John Hoscheit, R-St. Charles and chairman of the Finance Committee, said the board will need to decide what to do with the savings: relieve cost pressures within the county’s existing budget or reduce the county’s property tax levy.
The bond refinancing plan is expected to advance to the full County Board on Jan. 15 for further discussion and action.