Bond refinancing puts more money in Des Plaines’ coffers

Des Plaines will save more money through refinancing a portion of the city’s bonded debt than originally estimated, city officials said this week.

The city council Monday night authorized refinancing roughly $3.5 million of debt on four special taxing districts at lower interest rates.

Finance Director Dorothy Wisniewski said the city on Monday received four bids on the refunding of bonds that will result in $378,000 in savings or about 10.7 percent, which is roughly $80,000 more than what was originally anticipated.

“Our bids came in at a much favorable rate than what we thought originally,” she said.

The city council also authorized repaying a portion of the city’s bonded debt — $810,000 outstanding on a loan used to purchase land for a future fire station that never materialized — with cash reserves to save on long-term interest payments.

The loan repayment, which will occur in January 2012, saves the city roughly $200,000 in interest payments and removes $100,000 from the annual property tax levy, Wisniewski said.

The original $1.27 million debt issued in 2001 to finance the purchase of land on the south end of the city at Lee Street and Prospect Avenue was scheduled to be retired in December 2021.

City officials had long hoped to build a fire department headquarters at that site to replace the Oakton Street station. The land cost the city about $2.5 million. Construction of the fire station at the time was expected to cost an additional $9 million, but plans were shelved for lack of money.

With the loan repayment, the city’s general fund reserve balance, which was roughly 2 percent four years ago, is projected to be at 32.8 percent of operating expenses, or $18.8 million, at the end of the 2012 fiscal year. The city’s debt load is projected to go down from $70 million to $63.5 million in 2012.