The week of the August 9, 2011 county board meeting was not looking good for the stock market. That was actually good news for Cook County, however, as it looked at refinancing bonds taken out years ago for improvements to the courthouse and Law Enforcement Center. Accountant Bruce Kimmel of Ehlers, the county’s accounting consultant firm, told the county board that when stocks are doing poorly, the interest rates on bonds go down. “When stocks suffer,” he said, “bonds benefit.”
The county will refinance bonds it took out in 1996 and refinanced in 2003. Having interest rates drop enough to make refinancing a good idea twice during a 20-year payback period is an unusual occurrence, Kimmel said.
In July, Ehlers looked at helping the county refinance up to $1,450,000 through the end of the original 20-year finance period, which will be in February 2016. Since that time, bond interest rates have gone down even further, so the county’s savings will probably be over $122,000. The rates are expected to be about ¾ to 1½ percent. “Hopefully,” said Kimmel, “it’s kind of a slam-dunk.”
The board passed a motion to move forward on refinancing. The process requires a public hearing, which was scheduled for 10 a.m. Tuesday, September 13.
Kimmel recommended that the county issue $8.5 million in bonds for 1 percent sales tax infrastructure projects that are under way. The legislation authorizing the tax allows the county to collect $20,000,000 from this special tax plus the cost of bonding. Kimmel estimated the cost of bonding, which includes interest, would be about $8,000,000.
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