Mt. Prospect will refinance bonds to save $528,000

The Mount Prospect Village Board authorized issuing $14.5 million in general obligation bonds Tuesday, an action that could ultimately save the village more than half a million, officials said.

This loan refinances bonds issued in 2002 and 2003 to pay for the renovation of the Mount Prospect Public Library and the construction of the new village hall and parking facility.

According to a memo from Finance Director David Erb, currently there is $5.78 million outstanding from the 2002 issue and $8.36 million from 2003. By issuing new bonds at current rates, the village will have save an estimated 6 percent, or $528,000.

Because the village can issue only $10 million in bonds per year for the bonds to remain bank qualified, they will be issued at two separate times, first in June or July 2011 and then in January 2012. Erb said he does not expect rates to go up very much before January.

These new bonds will mature on Dec. 1, 2022, the same time the 2002 and 2003 bonds were scheduled to mature.

Erb said the village followed a similar procedure in 2006, issuing $10 million of bonds for an advance refund of 2002 bonds, which resulted in a $380,000 savings.