Lake County Board Approves Early Payoff of Lake Michigan Water Access Bonds, Saving Taxpayers Millions
In a remarkable display of intergovernmental collaboration, northern Lake County municipalities have successfully expanded their access to Lake Michigan water, thanks to the joint efforts of local leaders. Even more impressive, the County Board has recently approved the early payoff of part of the bonds associated with the water system expansion, resulting in substantial savings for taxpayers.
Residents of Lake Villa, Lindenhurst, and nearby unincorporated areas of the township, who have been connected to the Lake Michigan water supply, can now look forward to tax levy savings until 2037, all thanks to the early payoff.
By virtue of excess funding available for the water access project, the County was able to pay off the outstanding balance of $4.75 million from the initial $7 million general obligation bond, translating into a substantial saving of $3,565,500 in interest for taxpayers, according to the County’s Finance and Administrative Services Department.
Upon the early payoff of the general obligation bond, residents can expect tax levy savings amounting to $428 per $100,000 market value until 2037. In practical terms, this means a homeowner with a property valued at $250,000 will accumulate savings of approximately $1,070 between fiscal years 2023 and 2037, as per estimates from the county finance office.
This early payoff of the bonds marks a unique and unprecedented experience for Lake County’s finance director, Patrice Sutton, who emphasized the necessity of caution due to the distinctive nature of the collaboration involved. We had to be very careful because the only way to have this type of collaboration was through a special service area arrangement, Sutton explained. I would say, in this particular case, we were a little bit more conservative than we normally would have been because this was such a unique arrangement.
Sharing the sentiment, Austin McFarlane, newly appointed director for the Lake County Public Works Department, agreed with Sutton’s assessment of the surplus funds. The last thing we wanted to do was go back to the residents for shortfalls, McFarlane emphasized. The conservative approach was certainly the right approach to take.
The decision to pursue expanded access to Lake Michigan water came about due to the uncertain future water supply in the region. Back in 2013, Lake County, Lake Villa, and Lindenhurst entered into an agreement with the Central Lake County Joint Action Water Agency to secure a long-term water source. Under this agreement, the county and villages agreed to cover the costs of the necessary water system improvements.
Anticipating the expenses involved in expanding Lake Michigan water access to municipalities in northern Lake County, the county estimated the construction to cost around $40 million and accordingly obtained loans to finance the project.
The initial funding for this expansive undertaking was secured through a $7 million Series 2013 bond, which provided capital for design, land acquisition, and other initial engineering costs.
Additionally, in order to complete the project, the county acquired additional low-interest loans totaling $32 million from the Illinois Environmental Protection Agency’s water revolving fund. These loans are expected to be paid off by 2038.
Michael Strong, the Village Administrator of Lake Villa, underscored the critical need for finding an alternative water source amid the community’s rapid growth. There are a lot of communities that are still trying to figure out what they are going to do about future water access, Strong remarked. But we’re fortunate that the county was able to facilitate a mechanism for us to fund the infrastructure we needed to put these pipes in and provide means to pay for those improvements.
Overall, the joint efforts of local leaders in northern Lake County have resulted in a significant achievement for water access expansion. Not only have the bonds associated with the project been paid off years ahead of schedule, saving taxpayers millions of dollars in the process, but residents can also look forward to steady tax levy savings for years to come. This successful collaboration serves as a model for future intergovernmental initiatives and highlights the importance of careful financial planning to benefit the community at large.
