CHICAGO -- Cook County, Ill., has proposed a bonding plan for the remainder of the year that includes about $235 million of general obligation bonds, refunding existing debt, and restructuring mortgage revenue debt.
Woods Bowman, the county's chief financial officer, proposed the plan last week. He said the county's finance committee is expected to hold hearings on the plan later this month, and the county board will vote on it at its Aug. 4 meeting. If approved by the board, the debt will be priced in September or October, he said.
Mr. Bowman also recommended a number of firms to serve as underwriters for the negotiated bond deals.
Under the plan, the county would issue about $200 million of new GO bonds in the second phase of its four-year $958 million debt financing plan for capital projects.
In April, the county sold the first phase of $210 million of GO bonds for building and improving correctional facilities. Mr. Bowman said the second issue would be used to continue those projects as well as others related to the county's health-care services.
About $65 million of the proceeds will be used to retire five-year tender notes the county issued in the late 1980s and early 1990s for capital projects, he added.
Along with the new GO debt, the county is proposing to refund callable bonds issued in the 1980s to capitalize on current low interest rates, Mr. Bowman said. He said there is no estimate of how much debt will be refunded, but he expects the total to be less than $50 million.
Kemper Securities Inc. has been recommended as senior manager for the deal, along with 11 co-managers.
A second part of the bonding plan calls for restructuring some of the $280 million of single-family mortgage revenue bonds the county issued from 1982 to 1985. Mr. Bowman said the restructuring is necessary because "a spate of prepayments" on the mortgages has thrown estimates for revenues to pay off the bonds "out of whack." He said the restructuring would involve only about $10 million to $35 million of the outstanding debt.
George K. Baum and Associates has been recommended as senior manager, with Hamilton Investments and KM Independence Group as co-managers for the deal.
A third issue would be $35 million of GO bonds for zoo renovations and land acquisition for the Cook County Forest Preserve District in a deal headed by Bear, Stearns & Co. Four co-managers were also recommended for the deal.
Mr. Bowman said officials from Moody's Investors Service and Fitch Investors Service would be invited to visit the county this summer to review the bonding plan. The county's GO debt is rated A-plus by Fitch and A1 by Moody's.
Cook County Board President Richard Phelan has been successful in getting his bonding plans approved by the board since he took office in December 1990. In May, the board approved his plan to impose a 75-cents sales tax in the county to help support the four-year debt financing plan for capital projects.
Mr. Bowman said the tax, which the county will begin collecting in September, will help offset the increased use of property taxes to pay debt service on the bonds.
Maria Pappas, a county board member and Mr. Phelan's chief opponent on the board, yesterday questioned whether the county may be getting too deep into debt.