Howard seeks to pay off debt early, save money
By Kevin Boneske
HOWARD – The village is seeking to take advantage of historically low interest rates to refinance two Tax Incremental Financing (TIF) debt issues from 2013.
The Howard village board approved an initial resolution Oct. 12 to advance refund debt issues of up to $5.7 million related to TIF districts No. 3 and 4.
Chris Haltom, director of administrative services, said the village’s financial advisor, Justin Fischer of Baird, recommended Howard refinance the two TIF debts.
“There are call dates on bonds when you can refinance them,” Haltom said. “We’re doing this a couple of years before the call date, so that’s called advance refunding.”
He said the board will have to pass another resolution at its Oct. 26 meeting when all the details of the borrowing will be included.
Fischer said it works well for the village to be in the bond market now.
“We’re trying to get ahead of the presidential election,” he said. “We’re trying to lock in the interest rates prior to that election date in early November.”
On Oct. 26, Fischer said the board will see the final interest rates for refinancing the two TIF district debt issues, along with refinancing the bond anticipation notes issued in 2017 for the Howard Commons project.
“As for as the refinancing savings that we’re anticipating for the village receiving over the next several years, the total savings is over $275,000, a significant savings by taking advantage of the low interest rate environment,” he said.
Fischer said Howard has received an AA bond rating, an excellent rating and one of the highest the village could obtain.
Haltom said the refinancing would pay off the remaining debt on both TIF districts.
The board approved a resolution authorizing the village to apply for a federal Economic Development Administration (EDA) grant to seek up to 80 percent funding for utility and road improvements to the Mill Center Certified Industrial Site located off of Marley Street (County Highway VV).
Village Administrator Paul Evert said the federal share of the grant increased from 50 to 80 percent because of the COVID-19 pandemic with Coronavirus Aid, Relief and Economic Security (CARES) Act funding.
“It made some money available to municipalities to use for some things that often (the federal government doesn’t) let you use them for, and one of them, really, was investments in industrial sites,” he said. “Our area has a shortage of industrial land.”
The resolution lists a total project cost of more than $1.6 million with the grant, if approved, paying for about $1.3 million.
Director of Engineering Mike Kaster said utilities being installed along Marley Street as part of the improvements being made near the State Highway 29/County Highway VV interchange project could be included in the EDA grant because they are required to service the industrial site.
“That’s the nice thing with the nature of the project is we’re able to get the vast majority of the utilities that are proposed for Marley Street into this EDA grant at 80/20 funding,” he said.
The board authorized levying special assessments on the plat of Lancaster Creek Estates, where 36 new single-family residential lots are planned for a development connecting Folkestone Drive and Stockbury Street.
The total assessments listed at more than $1.62 million for sanitary sewer, watermain, storm sewer, sidewalk and roadway will all be charged to Lancaster Creek Estates.
Board members also approved the purchase of the Toolcat 5600 utility work vehicle from Bobcat Plus for a net cost of $31,715.
The village will be trading in a 2016 Toolcat it has with 1,700 hours for $27,000 on a new one costing $58,715.
Director of Public Works Geoff Farr said Toolcat units typically are traded in at approximately 1,500 to 2,000 hours when they have good trade-in value and before they have expensive electrical, mechanical or other problems.
“That’s kind of been the theory,” he said. “Make sure these things move out before there’s a very expensive repair, and then you have almost nothing left as salvage value.”