Riverside’s project to rebuild its inadequate combined police and fire facilities could cost the village up to $48 million over the course of 20 years as Riverside pays interest on $29.9 million in bonds it needs voter approval to issue.
Finance Director Mary Emmanuel on Thursday, Oct. 15, told trustees that a “high-end estimate” of 5% interest on the bonds would see the village paying back $18 million in interest over the 20-year lifetime of the debt. This figure has already been factored into the village’s online calculator breaking down a homeowner’s monthly and annual tax burden based on the value of their home, she said.
“The way that we need to think about a municipal bond is just like the way that we think about a home mortgage. In a home mortgage, we pay the interest and the principal,” Emmanuel said. “Unlike a home mortgage, we wouldn’t know exactly what the interest is until the bond is sold.”
Emmanuel said the village hopes it will receive a lower interest rate than 5% due to its strong credit rating and history of paying back bonds on schedule.
“That is the high-end estimate because we used a 5% interest rate. The financing team that we worked with initially had used a 4% interest rate, and now they’ve increased it,” she said. “We definitely can see something lower once the bond is sold. That’s the hope.”
For the village to take out the bonds, Riverside voters in April must approve a referendum, which in its verbiage sets the maximum possible interest rate at 9%.
“That’s the maximum limit statutorily. The actual interest rate will certainly be considerably lower. I didn’t want to put something in there that would conflict with the referendum, which would render the referendum ineffective,” Village Attorney Robert Pickrell said.
Village President Doug Pollock and Village Manager Jessica Frances said the village board would have to review and approve the proposed interest rate for the bond. If it were higher than 5%, village staff would likely recommend delaying the debt issuance, Pollock said.
“The bond sale is not complete until the board approves the bond ordinance,” Frances said. “The board could then decide not to approve it because they believe the rate is too high.”
While some taxpayers may balk at the nearly $30 million cost of the new facility and the $18 million of potential interest, village officials have said it would be fiscally irresponsible to instead remodel the existing facility. That effort would cost Riverside about $20 million and would fail to address critical issues within the existing facilities, which they’ve said have been less than adequate for Riverside’s public safety staff for years and have only declined further with time.
Riverside has offered tours of the existing facilities led by Public Safety Director Matthew Buckley since the summer to give residents a first-hand look while explaining the benefits the new proposed facility would provide. The next tour is on Thursday, Nov. 5, though the six open slots appear to be filled on the village’s sign-up webpage.
In a final presentation to officials on Oct. 1, representatives from Williams Architects lauded Riverside staff for their commitment in pushing for increasingly efficient designs in the plans for the new facility, which will serve both police and fire staff and cost less than other new, police-only facilities in communities like Geneva, Wilmette and Libertyville.
If voters approve the bond referendum in April, construction on the new facility would be expected to begin in 2028.
