Auditor: Kane County Debt Drops Dramatically
Kane County Auditor Terry Hunt presented a little good news in his annual report to the Kane County Finance Committee to start 2016.
According to documents Hunt provided in a Jan. 4 PowerPoint presentation, Kane County bond debt went from more than $114.8 million in 2009 to less than $41.9 million in 2016.
“Over the past seven fiscal years, Kane County has reduced its debt by nearly $73 million,” Hunt said. “Focusing more closely on just the last four fiscal years, the county has retired over $48 million in debt.
“The graphs provide a simple and dramatic visual, which is supported by the details in the underlying charts. Through conservative and innovative fiscal management Kane County has significantly reduced the overall debt while also lowering the comparative interest rates on the remaining debt.”
Below is a closer look at what the bonds were used for, their interest rates and when they were or will be retired.
Bonds Issued – Fiscal Year 2009
In October 2009 the County issued a total of $40 million in “Build America Bonds” as authorized under the American Recovery and Reinvestment Act of 2009. The act provides for a Federal subsidy through a refundable tax credit to be paid to the county equal to 35 percent of the total interest paid to investors.
The bonds were used to finance various road and bridge capital improvements in the county. They were issued in two separate series. Series A consisted of $23.6 million and Series B consisted of $16.4 million, for a total of $40 million.
Interest rates ranged from 1.15 percent to 2 percent on Series A and from 2.70 percent to 3 percent on Series B. Series A was retired in fiscal 2013. Series B was retired in fiscal 2015.
Bonds Issued – Fiscal Year 2011
In December 2010, the county issued an additional $7.67 million in “Build America Bonds” as authorized under the American Recovery and Reinvestment Act of 2009. The act provides for a Federal subsidy through a refundable tax credit to be paid to the county equal to 45 percent of the total interest paid to investors.
These bonds were designated as Recovery Zone Economic Development Bonds. Principal and interest payments come from the Recovery Zone Bond Debt Service Fund.
Semi-annual interest is paid at rates ranging from 1.15 percent to 6.55 percent. This series is scheduled to be fully retired in 2031.
Bonds Issued – Fiscal Year 2012
On Dec. 28, 2011, the county issued $1.96 million in General Obligation Limited Tax Bonds to fund improvements of the county.
Interest was paid semi-annually at a rate of 1.5 percent.
The second of the two annual principal payments was made in December of 2013, and this series is now fully retired.
Refinancing Bonds Issued – Fiscal Year 2013
In April 2013 the County issued $27,225,000 of General Obligation Bonds – Series 2013 for the purpose of refunding various debt instruments which carried higher interest rates to reduce the overall interest expense to the County.
The remaining principal balance of approximately $2,320,000 in Series 2002 G.O. Bonds was fully refunded.
Additionally, partial refunding of approximately $5,795,000 in Series 2005 Debt Certificates, and $19,620,000 in Series 2006 Debt Certificates was made through the Series 2013 issue.
Interest between 2 percent and 3 percent is paid on a semi-annual basis. This series is scheduled to be fully retired in 2024.
