Naperville to consider borrowing $16 million for capital projects
Naperville is anticipating borrowing roughly $16 million to fund a slew of capital projects ranging from traffic improvements to technology upgrades.
The COVID-19 pandemic hasn't drastically changed the amount of debt officials intend to issue, Finance Director Rachel Mayer said, but "the projects we're borrowing for are a little different than what were originally planned." The proposed 2020 bond issuance ordinance is expected to presented to the city council Oct. 6.
Big-ticket items include $5.5 million in roadway maintenance and other traffic improvements, $2.6 million toward an e-government initiative, $5 million related to vehicle and equipment purchases, and a variety of building maintenance, stormwater management and other smaller-scale projects, she said.
In a typical year, some of those expenses would have been funded through the city's 0.75% home-rule sales tax, which is required by city code to be used for capital projects and debt obligations, Mayer said.
But in the wake of the coronavirus crisis and a subsequent dip in revenue, the city council last month agreed to lift those spending restrictions, freeing up the home-rule taxes to support operating expenses -- particularly police, fire and public works services -- if needed.
"With all the unknowns that are popping up with the pandemic we're experiencing, from a financial perspective, the really key thing is ensuring you have flexibility," Mayer said.
"For us, that means ... making sure we have cash on hand to pay for critical services."
To maintain that wiggle room, the city adjusted its borrowing plans to issue debt for some projects that would ordinarily be funded out-of-pocket, she said, while other line items fell off the list entirely.
The city also expects to refinance three bonds from 2010 and 2011 -- about $19 million total -- to take advantage of lower interest rates and "achieve cost savings over the remaining life of the debt service," Mayer said.
Naperville officials have been taking into account the challenges and uncertainties of the pandemic while preparing the 2021 budget, discussions for which are expected to begin Oct. 16, she said.
A draft of that document will be published ahead of time.
The city on its website recently launched a new dashboard, called "The Path Forward," to offer a snapshot of Naperville's finances during the COVID-19 crisis. The online tool aims to maintain transparency by providing real-time data, trends and explanations related to the pandemic's impact, Mayer said.
"Obviously with the pandemic, people are hungry for information," she said. "The dashboard fits within that bucket."