The Kane County Board voted 10-7 Wednesday to pay down its pension obligation by issuing as much as $55.5 million in bonds.
The action to issue the bonds will take place only if the county can secure an interest rate of 3.8 percent or lower. Kane County Board Chairman Chris Lauzen said during Wednesday’s special meeting that the best bonding rate was presently at 4.1 percent due to a post-election stock market surge but hoped the market would stabilize and bond interest rates would drop in the next few weeks.
If the county does not secure the rate of 3.8 percent or better in the coming weeks, the issue would have to return to the County Board for consideration.
Under the plan, the county would issue Taxable General Obligation Bonds in an amount not to exceed $55.5 million, for the purpose of funding all or a portion of the unfunded Illinois Municipal Retirement Fund.
Proponents say the county could save more than $160 million over a period of 166 years, according to a report by Kane County Finance Director Joe Onzick. Opponents have said there are other ways to pay down the debt over time.
- The full text of the County Board Ordinance 16-385 can be found on this PDF on the Kane County website.
RESOLUTION/ORDINANCE EXECUTIVE SUMMARY
Providing for the issue of not to exceed $55,500,000 Taxable General Obligation Bonds (Alternate Revenue Source), Series 2016, of the County of Kane, Illinois, for the purpose of funding all or a portion of the unfunded Illinois Municipal Retirement Fund (IMRF) of said County, including prepayment of, and providing a budget stabilization fund for, such liability, the pledge of certain revenues to the payment of principal and interest on said bonds and the levy of a direct annual tax sufficient to pay such principal and interest if the pledged revenues are insufficient to make such payment and the sale of said bonds to Robert W. Baird & Co. Incorporated
Committee Flow: Finance and Budget Committee, Executive Committee, County Board