Jan. 25--Fearful that the state's property tax freeze proposal could wreak havoc with funding construction of a new police station, the Arlington Heights Village Board approved borrowing $32.9 million through a bond sale this week -- roughly eight months earlier than anticipated.
If the state legislation proposing a property tax freeze is passed in Springfield, municipalities hoping to sell bonds to pay for capital projects would first need to seek approval from voters via a referendum, the village's director of finance, Thomas Kuehne, said.
Kuehne said officials had originally anticipated issuing the bonds this summer, after the police station's architectural design and engineering plans were completed. But the bond sale was moved up, he said, to avoid "the time and cost of a referendum."
"If the (property tax freeze) does happen, we've prepared ourselves," Kuehne said. "And the timing was impeccable, with the stock market dive...we got a really incredible rate."
As the village is currently retiring bonds that have matured, Kuehne said the new 20-year bond issue will not have an impact on local taxpayers.
"There will be absolutely no increase," Kuehne said.
The village's 2016 budget plan includes a bond issue to fund construction of a new police station at an estimated $27.9 million, officials said.
Officials said they had planned to borrow a total of $35 million through a bond sale to pay for construction of the police station, as well as to cover additional costs for architectural and engineering work, furniture and equipment, a temporary police station, demolition and parking improvements.
But after the bond sale, the total amount borrowed was scaled down to $32.9 million, with an interest rate of 2.93 percent, Kuehne said.
Kevin W. McCanna, president of Speer Financial Inc., said the bond sale featured six bidders who submitted 29 bids, with KeyBanc Capital Markets Inc., representing "the best bid received."
"Arlington Heights is a highly-rated community, with home rule," McCanna said, explaining the popularity of the village's bond sale with investors. "You've shown over the past four to five years that you can deal with this economy."
With the board voting unanimously to approve the borrowing plan, resident Keith Moens applauded village officials for moving up the bond sale to take advantage of market conditions.
Still, Moens questioned why the money was being used for a new police station.
"I agree with issuing the bonds right now, as this is the time to borrow money," Moens said. "But I disagree with the purpose of the bond issue, when the village needs infrastructure repairs. We need to use this positive economic environment for something other than a new police station."
kcullotta@tribpub.com
