Bonds issued for revamps of treatment plant, library

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Updated: November 11, 2011 4:15PM

A happy Deerfield Village Board this week unanimously approved the sale of $22.4 million in general obligation bonds at favorable interest rates.

The amount of the debt issued included $4 million for village capital improvements, $5.9 million for the remodeling of the Deerfield Public Library, and $12.5 million in Qualified Energy Conservation Bonds for construction of the wastewater treatment plant.

Two separate types of bonds were issued, said Robert Fialkowski, the village’s finance director.

One was a taxable series for the $12.5 million, with an interest rate of 4 percent being paid to the buyer,

he added.

“They are a special type of bonds that the federal government has authorized,” Fialkowski said. “As part of the program, the government will pay us 70 percent of a reference rate - not necessarily 70 percent of the 4 percent - as a credit to offset the interest cost.”

So the net cost to the village after taking the credit will be 1.12 percent, he added.

“We were able to do that with the Qualified Energy Conservation Bonds, because the treatment plant will use a lot less energy - 24 percent less - than the existing one, although there are only certain parts of the plant construction that qualify,” Fialkowski said.

Because there will be more than 20 percent in energy savings, the village qualified for $12.5 million in bonds out of a total $30 million cost, which will result in less interest to be paid, he added.

The other $9.9 million to be used for the village’s capital projects and the library improvements were regular tax-exempt bonds, which have a blended interest rate because they mature at different times.

That overall interest rate is 2.89 percent, Fialkowski said.

“Those are both really good rates relative to the market, so it was a very good time to borrow money,” Fialkowski said. “This will save the residents quite a bit of money in interest cost down the road,”

“Just the fact that we will have such low interest rates, like 1 percent, is wonderful for our residents,” added Mayor Harriet Rosenthal.