Arlington Heights will refinance a $2.915 million bond with a lower interest rate and save the Northwest Central Dispatch $323,000.
The cost to the village and the 10 other communities covered by NWCD will decrease annually as a result. The collective amount will be around $25,000 a year, Arlington Heights finance director Tom Kuehne said.
The village secured an interest rate of 2.57 percent through a competitive eBay-style bidding process, said Speer Financial president Kevin McCanna, the village’s financial consultant. That is the lowest for short-term municipal bonds that McCanna said he has seen in 43 years.
Arlington Heights, which owns the NWCD property at 1975 E. Davis St., issued a bond in 2002 to pay for reconstructing the facility, though the bond debt payments are covered by the NWCD, village manager Bill Dixon said.
The new bond does not save the village money directly, but it does lower the cost of the dispatch center’s lease, saving money for the village and the other communities.
The Northwest Central Dispatch is the 9-1-1- call center for Arlington Heights, Buffalo Grove, Elk Grove Village, Hoffman Estates, Inverness, Mount Prospect, Palatine, Palatine Rural Fire Protection District, Prospect Heights, Rolling Meadows, Schaumburg and Streamwood.
Trustee John Scaletta said that the lower cost helps businesses in town because now they can pay less in fees for the dispatch center.
It also helps residents, Mayor Arlene Mulder said, not only in Arlington Heights but in all the communities covered by NWCD.
The bond issued in 2002 had an interest rate of 4.46 percent and was callable in December, meaning the village could refinance before the maturity date in 2022.
The new bonds will also mature in 2022 and will be callable again in 2018, at which point the bonds could be refinanced again or continue to be paid down at the 2.57 interest rate.
The village was expecting to save only $150,000 by refinancing, Dixon said. But the competitive bidding environment and improved market conditions in the last week helped raise that to $325,000, McCanna said.
Milwaukee-based Marshall and Ilsley Bank bid nine times before winning the bond over five other bidders, which knocked down the rate, he said.
Fees collected for the refinancing, including about $8,000 for Speer, total $30,000, McCanna said, and are covered by the bond.
