Naperville City Council members this week launched the city’s $54 million capital improvement program for the upcoming year, voting to borrow up to one-third of the expense through a general obligation bond issue.
Coupled with a payoff this year of some $6.8 million previously borrowed, the new $17.34 million loan will bring the city’s debt service costs up by a net $700,000.
Finance Director Karen DeAngelis has said the owner of a house worth $375,000 will pay about $14 this year toward the $2,053,700 in new tax revenue needed for the borrowing this year.
The largest portion of the borrowed money will be the $6.78 million earmarked to enhance downtown parking. The improvements will include the city’s portion of the new parking deck that will be part of the Water Street hotel/retail/office development set to begin construction later this year; expansion of the parking deck on Chicago Avenue east of Washington Street; and parking lot maintenance expenses.
Other major projects to be covered with help from the bond sale include connective walkways along the Riverwalk; assorted bridge rebuilds; improvements to traffic signals, intersections, street lights and selected major thoroughfares; relining of aging storm sewer pipes; and upgrades and enhancements to numerous city-owned properties, among them the libraries and Naper Settlement, and IT systems, an enhanced environmental collection center, and replacement of the salt conveyor system.
Council members discussed the merits of including a provision enabling the city to pay off the principal early if interest rates begin to rise, but not until the first 10 years have passed. Staff members said stipulating that the callable feature only kicks in for the second half of the 20-year note’s life brings a more favorable rate.
“Historically we’ve done well with a 10-year no-call provision,” said Doug Krieger, city manager.
Mindful of the size of the new loan, Councilman Joe McElroy asked for a layman’s explanation of the long-term borrowing commitment. DeAngelis likened the bond sale to a house.
“It’s these long-term assets that the city’s going to use, and that the residents who live here are going to pay for and use,” she said, noting that the results of the spending are spread out over time, as is the payoff of the debt. “Private industry does the same thing.”