The City plans to issue two series of bonds by the end of this month: $6.5 million in 20-year tax-exempt bonds to cover some capital improvements and $8 million in taxable general obligation (GO) bonds.
Proceeds from the $6 million in tax-exempt bonds will be used for capital projects, Mr. Lyons said.
The $8 million in taxable bonds will be used to pay to the Illinois Municipal Retirement Fund (IMRF) the pension costs associated with the early retirement incentive the City offered to many of its senior staff in 2008, said Assistant City Manager Martin Lyons.
“The City pays more than 3 percent of our IMRF rate for the retirement of the ERI,” at present, said Mr. Lyons, in an Aug. 2 memo to City Manager Wally Bobkiewicz. “The taxable GO bonds to retire the IMRF ERI liability will result in a savings of over $1.5 million in interest payments over the next nine years,” he continued.
At Aug. 9 City Council meeting, Alderman Coleen Burrus, 9th Ward, asked Mr. Lyons to address some concerns raised by Wilmette resident Dan Kaplan in an e-mail communication to aldermen. Among those concerns, Mr. Kaplan told the RoundTable, was that he felt that the City had acted too slowly “in this time of financial crisis” by not issuing the bonds last year. He said that waiting until this year to issue bonds to cover the debt caused the City to miss out on $393,000 of savings.
Mr. Kaplan told the RoundTable that he had suggested to City officials last year that they issue bonds to pay the ERI debt.
At the City Council meeting, Mr. Lyons acknowledged that the City “would have saved more money if we’d done this last year,” but did not specify how much money the City would have saved. The budget for the present fiscal year, however, recognizes $150,000 in revenue/savings from these bonds. Mr. Lyons told the RoundTable via e-mail, that, “Given the timing of our discussions we could not have started that soon.”