By Kevin Boneske
Staff Writer
HOBART – A resolution authorizing the sale of approximately $8.5 million in general obligation promissory notes for various public purposes was approved Tuesday, March 1, by the Village Board.
Hobart Village Administrator Aaron Kramer said $5.87 million of it is for interchange improvements and road construction projects, which include the final payment of $1,458,782 to Brown County for the State Highway 29/County VV interchange project, extensions of Centerline Drive, Larsen Orchard Parkway and Founders Terrance, along with the lighting project for the Centerline Drive extension, with debt service paid by Tax Incremental District (TID) No. 1.
He said $2.37 million would go to refinance bonds from 2012 for what he called modest savings with $1.46 million to be paid by TID No. 1 and $910,000 to be paid by the sewer utility.
Kramer said the projected repayment schedule for the notes is based on an approximate interest rate of 2.35%.
“Our best guess is 2.35%,” he said. “It’s going to be higher than what we paid last year when we did the bonding…”
Based on information provided to the village by its financial consultant, Brian Della of PMA Securities, the interest on $8.5 million, upon the notes all being paid off in 2032, would come to $1,380,621.
“As you can see, the projections on the new debt, the majority of the principal will be paid back between 2028 and 2032,” Kramer said. “We’re scheduling these as 10-year notes, instead of a 20-year bond. There was arguments to go both ways, but the main thing on the 10-year note is if for some reason, if we didn’t spend all the money, we can reallocate it. It’s easier to reallocate a note than it is a bond for another public infrastructure project, or something of that nature.”
He said the notes are callable for early pay off on March 1, 2030.
Kramer said refinancing the bonds from 2012 is projected to save interest costs of around $37,000 for TID No. 1 and about $23,182 for the sewer utility.
Following adoption of the resolution, he said he and Hobart Clerk-Treasurer Erica Berger will participate in a call March 21 related to a Standard & Poor’s rating, with the day of sale occurring April 6 when the board meets to adopt the final resolution awarding the notes.
Kramer said the village will send the county the final payment for the interchange project April 29, while the 2012 bonds will be redeemed May 6.
“This is all tax increment finance debt, so there’s no impact on the general fund debt levy,” he said.
Autumn Joy project
In other action, the board awarded a contract of $399,682 to MCC, the lowest of 12 bidders, for the Autumn Joy Road project, which includes road work, water, sanitary sewer and stormwater service.
Kramer said the village won’t have to borrow to do the work, because TID No. 2 reserve funds and the storm water fund will be used for the project, which will provide a second way in and out of the Southwinds Estates Subdivision.
Public Works Director Jerry Lancelle said the project has a completion date in October.