Kane County locks in Longmeadow contract, awaits news on bond sale
Two major pieces of the Longmeadow Parkway project will fall into place this week, and Kane County officials are keeping their fingers crossed that the building costs come in as low as possible.
The full Kane County Board approved a $25 million contract Tuesday with Des Plaines-based Lorig Construction. The company will build the missing bridge component over the Fox River that will join the existing segments of the parkway on the far north end of the county. The contract is about $8 million less than the engineer's estimate of what the bridge will cost to build.
In approving the construction contract Tuesday, transportation committee Chairman Drew Frasz said he believes the county is in the best possible position to move forward with a successful bridge construction project. He paid special recognition to board members Becky Gillam and Maggie Auger, who both used their final votes on the county board to vote in favor of the bridge contract. Neither Gillam nor Auger chose to seek re-election. The Longmeadow project proved to be a source of major controversy in both of their districts.
The next step in the process is getting the money to pay for the bridge construction. County officials are a bit on edge.
County board members have agreed to finance the bridge construction with a $30 million bond sale. The bonds hit the market Wednesday. The county received a positive AA+ bond rating, signaling strong confidence in the county's ability to repay the debt by the credit rating agency. However, interest rates on municipal bonds have been on the rise for months.
"We are not out of the woods yet," said county board Chairman Chris Lauzen last week. "Now we have to make sure the markets cooperate. We have no control over that. We are kind of swimming upstream. I hope there is an appetite when we go to the markets."
The higher the interest rate proves to be, the more expensive it becomes for the county to borrow the money. And that may play a direct role in the toll amount the county board sets to use the bridge.
Tolls will be the principal means to repay the bond. Higher borrowing costs would put more pressure to set a higher toll. Feasibility studies indicate the higher the toll, the fewer people will use the toll bridge.
County officials, to enhance the credit rating of the bonds, also decided to back the bonds with sales tax dollars. That means if the bridge fails to generate enough toll use to repay the bonds, sales tax money will be diverted to the debt. County officials want to avoid that scenario at all costs because they need those sales tax dollars for other expenses.