Lake Forest To Cut $2.2 Million From Debt Costs

The first reading of a proposal to save more than $2.2 million over the next 10 years was unanimously approved by the at a special meeting Monday night at .

Final approval is expected at the Sept. 6 meeting. 

The city will sell more than $26 million in bonds to refinance its existing debt to take advantage of low interest rates. Though some money will be raised to pay for the cost of the offering, no new money will go into the city’s coffers, according to Finance Director Kathy Reinertsen.

“If the bonds were sold today on a AA issue, the net present value savings over 10 years would be $2,205,056,” Reinertsen said.

Lake Forest has long enjoyed a AAA bond rating, according to .

After a final approval Sept. 6, Lake Forest plans to take bids for the offering from potential broker dealers. Cowhey and Aldermen Catherine Waldeck, Kent Novit, Thomas Morsch, Robert Palmer and Michael Adelman voted for the proposal. 

Aldermen David Moore and Donald Schoenheider were not present. Alderman George Pandaleon joined the meeting by telephone, but did not cast a vote. 

Cowhey explained why the city was able to maintain the rating despite the downgrade of the country’s bond grade. 

“The city of Lake Forest has been able to maintain a AAA bond rating because we do not depend on federal funds,” Cowhey said. “It’s the first thing we do when we become mayor. (City Manager) Bob (Kiely) knows how important it is.” 

Before the vote, Cowhey asked Pandaleon for his opinion. “George (Pandaleon) really understands this stuff,” the mayor said.

Pandaleon was excited about the opportunity.

“We should jump on it. It may get better if the flow to treasuries continues. It could get better, but this is good enough,” he said, referring to current market trends.