Politics & Government
Council Eyes Refinancing Sewer Bonds
Issuing new set of 15-year bonds would lower property taxes in light of sales tax increase.
Yorkville aldermen took the first step Tuesday to issue $12 million in bonds that would refinance the major sewer debt – and drastically reduce property taxes.
City Council members will host a public hearing on refinancing the Rob Roy sewer bonds at their next meeting, which is Aug. 23. They could cast a final vote to refinance Sept. 27.
“I don’t see how we can do it any other way,” Alderman George Gilson Jr. (Ward 1) said. “I don’t think we have much of a choice. (With the refinancing) we’re going to meet our obligations and provide some property tax relief.”
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Aldermen voted, 7-0, to move forward with refinancing. Alderman Diane Teeling (Ward 4) was absent.
City leaders will use money collected from the voters approved in April to make the annual payments for the new bonds, City Administrator Bart Olson wrote in a memo to council members. include steep hikes in annual payments starting this fiscal year and were the biggest of the city’s debt payments discussed late last year.
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The sales tax increase is expected to garner $2 million a year, but annual sewer debt payments are estimated to reach $3.9 million in 2015-2016.
By refinancing those two Rob Roy sewer bonds with a new 15-year bond, the city will reduce the annual payments, as well as property tax levies for debt, according to Olson's memo. The city plans to collect $2.2 million in property taxes this year for debt payments but could reduce that to $730,000 in the next fiscal year and $590,000 in the fiscal year after that, Olson estimated.
Refinancing also would allow the city to skip making a debt payment in December, which would free up money for the city’s costs in the Route 47 expansion project, for fixing the River Road bridge and for rebuilding Game Farm Road in about three years.
Without refinancing, those increasing debt payments would be pushed onto property tax bills, Alderman Carlo Colosimo (Ward 1) said.
“(Refinancing) does add some interest, but it does open up a significant amount of money to fix some roads, fix the bridge,” Colosimo said.
