Arlington Heights will save almost half a million dollars due to refinancing bonds that were sold several years ago to build the new village hall.
The village board on Monday approved the bond refinancing, which will save the village more than $495,000 over the remaining seven-year life of the bonds.
The village took out $20 million in bonds in 2004 and another $20 million in 2006 to pay for a new public works facility, fire station and village hall.
Because of the low interest rate environment, the village decided to seek competitive bids for refinancing a portion of the 2006 bonds, said Village Manager Bill Dixon.
While officials expected the savings to be about $300,000, it was much more than expected because of the high bond rating of the village, he said.
The village refinanced $7,755,000 worth of bonds with Janney Montgomery Scott, based in Philadelphia, Pa., with an interest rate around 1.46 percent, said Kevin McCanna of Speer Financial. The previous interest rate on the bonds was 4 percent, he said.
"This is a reflection of our strong and stable financial position in Arlington Heights," said village President Tom Hayes. "It's a result of a lot of people including our board and our residents for being in line with what we are trying to do here, tightening our belts in tight economic times and still providing high-quality services. It's a team effort."
Residents have complained over the years about the cost of village hall, but Hayes and other officials have defended it, saying that the building is used by more than just the elected officials because rooms are rented out to different community groups several days a week.
The village still has $14.4 million in principal to repay on the 2006 bonds, which will mature in fiscal year 2019.
As the village's debt level declines over the next five years, officials have said they may use the village's bonding authority to build a new police station. The current police facility is more than 30 years old and officials have said it is barely up to code. A new police station could be as much as $40 million, with all costs included, officials estimate.