The village of North Riverside’s Board of Trustees will hold a public hearing on Monday, Aug. 1 to receive public input on its intention to issue up to $3.3 million in alternate revenue bonds to complete a large-scale street improvement project in the fall, purchase computer software for the finance department and install a new central air-conditioning unit for the police department.
On the same night, the village board will formally issue notice that it intends to sell bonds for the purchases. In addition, the village board will award a construction contract to a firm to resurface and patch streets in more than two-dozen locations throughout the village, work that is expected to begin in mid-August, weeks before any bonds are issued. Bids for the street work are scheduled to be opened on Thursday, July 28.
“We expect to be grinding asphalt the second week of August,” said North Riverside Public Works Director Tim Kutt. “We should be done by mid-October. It’s approximately three months of work days.”
North Riverside has already expended about $80,000 to televise sewer lines along the streets to be improved in 2016 and is seeking bids for about $125,000 in sewer-lining work in various locations in the village.
The village will also complete a roughly $100,000 sewer-lining project along two blocks of 14th Avenue as part of the work this fall.
In all, the residential street improvement project is expected to cost about $2.2 to $2.3 million. The software and air-conditioning unit will cost an estimated $175,000, combined. The village is asking for up to $3.3 million to allow room in case bids come in high.
On Aug. 10, the village will publish notice of the bond issue, which will wind the clock on a 30-day period during which citizens may petition that the bond issue be put to a village-wide referendum.
The village ran into this same situation back in 2011, when a plan to issue $4 million in alternate revenue bonds to replace the village’s water meters and refinance other debt was halted by a successful petition. The village ended up issuing debt certificates, which do not require a referendum but come with higher interest costs.
North Riverside plans to do the same thing if it runs into another petition this time around, said village Finance Director Sue Scarpiniti.
“There’s always a concern that the village could receive an objection,” Scarpiniti said. “We’re hoping we can communicate to the residents that it’s not a backdoor property tax increase. Sales taxes paid by shoppers who use our roads will be paying for these bonds.”
The bonds proposed would be backed by sales tax revenues the village collects annually. While the bonds ultimately are backed by general tax obligations, Scarpiniti said the intention is for the debt service to be paid from sales tax revenues and to abate the property taxes backing that debt every year. The bonds will expire in 10 or 15 years, Scarpiniti said.
But if the alternate bond issue is stopped by a petition, village officials will turn to debt certificates.
“We’re prepared to do the [street improvement] project either way,” Scarpiniti said.
North Riverside is still waiting on a new bond rating, which could affect the interest rates of the issue and interest from investors.
For the past two years, Moody’s has rated North Riverside at Baa1 with a negative outlook, signaling to investors that the village is a medium-grade credit risk. It last affirmed the Baa1 rating in September 2015. Scarpiniti said the village will also seek a bond rating from Standard and Poor’s sometime in late September.
With the village changing its approach to its pension obligations and for providing benefits to retirees and new employees, there’s hope the village’s credit rating will improve.