CHICAGO -- The DuPage County, Ill., board yesterday approved $182 million of alternative revenue general obligation bonds -- the largest single bond issue in the county's history.
While the board has almost $385 million of bonding to consider during two days of meetings this week, less than half was approved by the commissioners, who either chose to drop particular capital projects or pay for them with cash, according to George Kouba, the county's finance director.
He said the remaining $203 million of proposed bonding authority "was dead.
"There is nothing else we can get done without a referendum," he explained.
DuPage and four other counties in the Chicago area face an Oct. 1 deadline to get their bonds issued before a state law limiting annual property tax collection increases to 5% or the rate of inflation takes effect. After Oct. 1, property tax-supported bond issues must be passed by referendum in order to circumvent the tax cap.
Bond issues approved by the board were $69 million for storm water improvements, $65 million for roads, and $48 million for a jail addition. Mr. Kouba said that while the bonds would ultimately be backed with the county's GO pledge, alternative revenue sources such as income, motor fuel, personal property replacement, and sales taxes, would be directly used to pay off the bonds.
The board also approved the appointment of William Blair & Co. and Donaldson, Lufkin & Jenrette Securities Corp. as co-senior managers for the negotiated deal and Chapman & Cutler as bond counsel. Mr. Kouba said Chairman Aldo Botti of the county board would announce the remainder of the selling group at a later date.
He added that once the county publishes its notice of intent to issue bonds and if a so-called backdoor referendum is not successful, the county expects to price the $182 million bond issue on Sept. 17 and close the deal on Sept. 27. According to Pat Schwarze, a county spokeswoman, residents have 30 days from publication date to collect signatures from about 25,000 registered voters to force a referendum. She added that a backdoor referendum has never happened in the county.
Mr. Botti had proposed changing the county's method of financing capital projects from a pay-as-you-go system to a long-term debt program when he took office last year. The county has about $60 million of outstanding GO debt rated triple-A by Moody's Investors Service and Standard & Poor's Corp.
The tax cap, passed by the Illinois General Assembly last month, touched off a rush to the debt market by counties and other municipalities in the Chicago area. However, publicity about the bond deals ignited taxpayer protests in many communities, including DuPage County.
In Lake County, Board Chairman Robert Depke scuttled the proposed sale of $45 million of lease revenue bonds through the Lake County Public Building Commission, according to Ray Amdadei, the county's assistant administrator and acting comptroller.
Mr. Depke "said it was something he didn't have the votes for, and with the public's reaction he decided not to go forward with it," Mr. Amdadei explained.
This week, Will County will price a $23.8 million GO property tax lease receipts advance refunding deal, according to Mary L. Brown, the county's finance director. Another proposed issue for about $15 million for a juvenile center will be discussed at the county board meeting tonight. Ms. Brown said both bond issues would be subject to the tax cap provisions if they were delayed beyond Oct. 1.