Orland Park OKs $48.5M bond sale

Board expects to take advantage of lower interest rates

The Orland Park Village Board approved the sale of $48.5 million in bonds that is expected to bring a lower interest rate to a significant portion of the village’s outstanding debt.

The sale, approved Monday, will also pay for street repairs and upgrades to the village’s information technology systems, among other things.

Orland Park will go to market in the coming weeks but hopes to take advantage of lower bond interest rates in bundling existing debt and issuing new bonds, according to Mayor Keith Pekau.

“We will end up saving money,” he said Tuesday.

The ordinance requires the bond sale take place before whoever is elected in the April 6 municipal election is sworn in to office.

The bond sale would allow the village to use proceeds from sources, including the sales tax, water and storm sewer fund and the tax increment financing district created for the Main Street Triangle development, to pay principal and interest on the bonds.

A sale of $8.5 million in bonds, to refinance bonds issued in 2013, will call for annual principal and interest payments of $2 million through 2034, according to the ordinance. A larger sale of $40 million in bonds, also to refinance an earlier bond issue and pay for capital improvements in the current budget year, calls for annual debt service of $3.2 million through 2045, according to the ordinance.

The budget for this fiscal year, which began Jan. 1, proposed that existing bond debt of about $19.8 million be consolidated and refinanced as part of a larger debt management plan.

The new debt will also pay for capital improvement projects slated for this year, including $6 million for road improvements, $4.3 million for water and sewer work, $3 million for information technology upgrades and $2.7 million for the village’s share of a project, in conjunction with the Metropolitan Water Reclamation District, to improve the flow of Tinley Creek.

Total capital spending this year is $23.3 million, according to the budget approved last month.

The village lowered this year’s property tax levy and expects that sales tax revenue, Orland Park’s biggest source of income, will be down about 7% compared to fiscal 2020. The village has raised water and sewer fees.

Orland Park’s debt became a campaign issue when Pekau ran, and ultimately defeated, Dan McLaughlin in the 2017 election. Pekau is seeking a second term while McLaughlin is campaigning to reclaim the mayor’s job.

The village had taken on debt, more than $65 million, in developing the Main Street Triangle, northwest of La Grange Road and 143rd Street, which includes the Ninety7Fifty on the Park apartments, University of Chicago Medicine Center for Advanced Care and a multilevel parking garage.

A significant portion of that had been in the form of a $38 million line of credit, plus gap financing of $25 million, to the developer of Ninety7Fifty, which in 2017 paid the village $50.5 million to buy out the village’s ownership interest in the apartment development.

Pekau said that by the end of the year the village’s total debt will be $4 million below from the end of 2020.