Libertyville Seeks $20 Million Bond Issue to Fix Roads

Village trustees unanimously approved placing a referendum question on the March ballot to ask if voters would support issuing $20 million in bonds to fix Libertyville-maintained roads.

The move would help raise money to maintain Libertyville roadways before they need complete reconstruction, which could increase costs.

The bonds would be paid through an estimated 30 percent property tax rate increase, according to village documents. Staffers say while it is a significant increase, the new rate still would be the second lowest in comparison to what local Lake County communities are paying for all village-provided services.

On the March 20, 2012 ballot, voters will see the referendum question:

Shall bonds in the amount of $20 million be issued by the village of Libertyville, Lake County, Illinois, for the purpose of repairing and rehabilitating public roadways within the village, bearing interest at the rate of not to exceed 9 percent.

“I clearly believe residents will look at this and say, ‘What are they crazy, they are going to pay 9 percent interest for bonds when they can get (lower) interest rates now,’” Mayor Terry Weppler said during Tuesday’s meeting.

Village Administrator Kevin Bowens says the village plans to educate residents on the referendum.

“A couple of keys will be telling residents that this is the worst-case scenario — $20 million (in bonds) at 9 percent interest rate,” Bowens said.

The village is assuming an interest rate of 9 percent, the maximum rate allowed, to accommodate for possible changes in future federal government rules on the tax-exempt status of municipal bonds, according to village documents.

Village staff expects to issue bonds bearing an interest rate that is less than 5 percent in total.

Regardless of whether the referendum passes, trustees say Libertyville-maintained roads still need to be fixed.

“We’ll have to pay for this road rehabilitation at some point in time and by waiting longer, it gets to be more and more expensive,” Trustee Richard Moras said during the meeting. “As we go through with this, the odds that the first bond issue comes up at 9 percent (interest rate) are extremely low.”

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The proposed road rehabilitation project would include three elements: Reconstruction, rehabilitation and patching concrete streets, according to Public Works Director John Heinz.

If the referendum passes, about $4 million per year would be used to rehabilitate roadway in Libertyville. The amount includes $1 million a year in roadway funding that is available on a yearly basis.

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