Win-Win Situation for City and Residents for Flood Relief Sewer Projects
At the January 18, 2012 Special Council meeting, the City Council awarded the bids for bonding the Flood Relief sewer projects in the amount of $5,415,000 at the rate of 2.30% and the bonds for the Illinois Municipal Retirement System amount of $2,130,000 at the rate of 2.12%. The City benefits by receiving attractive bids rates and the residents benefit by receiving flood relief sewer projects.
Moody’s Investors Service reduced the City’s debt rating from “Aa1” to “Aa2” reflecting the strength of the credit of the City, modest debt burden and the stable and wealthy tax base. The rating service noted the need for improving liquidity in the General Fund, including close monitoring of revenues and expenditures. The “outlook” was negative. And notwithstanding this, the interest rates are truly new lows for the City.
John Peterson, the City’s financial advisor for William Blair & Company said, “currently the average of similar bond issues has been 3.62%” and further stated, “for all of the discussions we could have about the ratings and the differences between the rating of Aa1 and Aa2, we still hit the market at an extremely favorable time, at the strongest time in 30 years….resulting in the best bids that Park Ridge has ever seen on debt that it has issued.”
Phase 1 of the Flood Relief sewer projects are planned over the next two years. The second phase of those projects would require an additional bond issue at that time.