With the prospect of less revenue coming from the state, the St. Clair County Board on Monday voted to restructure about $39.8 million in bonds used for the construction and equipment at Mid America Airport, which is jointly used with Scott Air Force Base.
“We have an opportunity to save money,” said Interim Director of Administration Debra Moore. “There are several reductions in funds proposed in the governor’s new budget. This is an opportunity to restructure bonds and reduce interest rates and save the county money.”
Gov. Bruce Rauner has proposed cutting in half how much municipalities receive in income tax transfers from the state. For St. Clair County, it could be anywhere from $3 million to $4 million, said Chairman Mark Kern.
“This is a defensive strategy to level out payments,” Kern said. “It will allow us to continue to abate taxes, keep rates from going up, even in the face of loss ...in assessed valuation. We can weather this storm, assessed valuation will start to go up. The one storm we can’t weather is increased unfunded mandates coming from the state of Illinois. We saw an increase in of $600,000 in unfunded mandates this year. We saw an increase of $4 million in unpaid bills coming from state.”
Under the plan, payments for the bonds would be spread out until 2045, Kern said.
There are low interest rates available for bonds, but that may not last as interest rates may go up this summer, Kern said.
“Now is the time for us to do this,” Kern said. “Given the political environment in Springfield, it would be wise to do this now, to keep our real estate tax rates in check.”
The $39.8 million represents about 90 percent of the remaining debt left on the airport.
Money to pay back the debt is set to come from passenger facility charges, grants from the federal government, revenues that come from the operation of the airport and related facilities and from the county’s income tax transfers distributed from the state.
This starts a process of selling new bonds to replace the bonds sold in 2009. The sale date has yet to be determined, but the county will need to go through a bond rating, Moore said. How much the overall savings will be will depend on the interest rate.
The county’s bond rating is AA Plus, Moore said.
Moore said the life of the bonds would be extended, and it allows the county to save money up front. She added that unfunded mandates, such as a mandated increase in juror pay from $10 to $50 set to go into effect in June, which former Gov. Pat Quinn signed into law, could have a “significant impact” on the county.
She said along with the potential loss in revenue, the county will look at “every available option that could result in savings ... that is reasonable and appropriate.”
The County Board also approved its annual abatement of property taxes. It agreed to abate $26.9 million of its $58.9 million tax levy.
Equalized assessed property values have decreased for the last five years, Moore said.
“Chairman Kern has been conscientiously worked toward keeping taxes low,” Moore said.
Kern said the county has abated taxes for the last 20 years.
The equalized assessed property value in St. Clair County is down about $290 million, Kern said.
In other action, the county board approved awarding a road construction contract to Rooters American Maintenance of Beckmeyer. Rooters is slated to resurface about half-a-mile of New Athens-Darmstadt Road for about $592,000.
Work is planned to start at Route 4 and go through Darmstadt, County Engineer James Fields has said. The section of the road has been breaking up.
The project also will include adding curb, gutter and storm sewer.
Rooters’ bid is coming in well under the engineer’s estimate of $699,000.
Work is scheduled to begin in May, and should be completed in one construction season. The road is expected to remain open to local traffic during the project.
The county board also on Monday honored Althoff Catholic High School boys’ basketball team. Players from the team received certificates of recognition from Kern.
The team finished in second place of the Illinois High School Association Class 3A state championship tournament.