TO: Mayor and City Council
FROM: Kevin Sing, Director of Finance
SUBJECT:
title
Ordinance Approving One or More Supplemental Indentures and Authorizing the Issuance of Not To Exceed $145,000,000 Waterworks and Sewerage Senior Lien Revenue Bonds of the City of Joliet, Illinois
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BACKGROUND:
As part of our project to accept Lake Michigan Water, the City must complete certain capital improvements. On May 20, 2025, the Finance Committee received a presentation from the City’s Financial Advisor (Speer Financial) on the plan to finance our sewer and water system upgrades. That plan is designed to use the lowest cost of financing available and to be adaptable to changing market conditions. Based on that plan, the next financing item is the issuance of a revenue bond. This bond is expected to fund the following improvements:
• Joliet system improvements to accept Lake Michigan water - $86,915,199
• Joliet’s required Grand Prairie Water Commission Development Costs -$36,146,766
• Debt Service Reserve and closing costs - approximately $11,000,000
The Ordinance for the revenue bond allows for the issuance of bonds not to exceed $145,000,000. This ordinance also approves the second supplemental indenture to incorporate the issuance of the bond in our Sewer and Water Trust Indenture. As a reminder, the Trust Indenture controls our flow of funds securing the debt. The ordinance authorizes the issuance of bonds that fall meet the following parameters:
• Interest rate less than 6%
• Term 30 years or less
• Redemption premium does not exceed 3% of the principal. We are currently anticipating a call date of January 1, 2035, at par.
• Bonds can be sold with a discount if not more than 2%
• Underwriter compensation not to exceed 0.5% of the principal amount of the bond
The Finance Committee reviewed and recommended this item for approval at their May 20, 2025 meeting.
CONCLUSION:
Approval of this item will allow the financing team to secure the financing necessary to complete the capital improvements.
RECOMMENDATION:
recommendation
It is recommended that the City Council approve an Ordinance Approving One or More Supplemental Indentures and Authorizing the Issuance of Not to Exceed $145,000,000 Waterworks and Sewerage Senior Lien Revenue Bonds of the City of Joliet, Illinois.
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