Kustra Announces Low-Cost Refinancing For Rural Governments By LIEUTENANT GOVERNOR BOB KUSTRA

Lieutenant Governor Bob Kustra recently announced that local governments in rural Illinois can save substantial tax dollars by using the Illinois Rural Bond Bank to refinance bonds issued previously during times of high interest rates, and he urged local government leaders to consider the advantages provided by the Rural Bond Bank.

"Current interest rates are at their lowest levels in many years," said Kustra, who chairs the Illinois Rural Bond Bank. "Local governments, especially those in rural communities, can achieve significant cost savings by refinancing outstanding bonds. We may not have an opportunity like this for many more years, and I urge local governments to take a careful look at the benefits available from refinancing old debts through the Rural Bond Bank."

A few local governments already have taken advantage of the cost-savings by financing their loans with the Rural Bond Bank.

"The Groveland Public Water District in Tazewell County, which previously issued bonds at a 9.75 percent interest rate, was able to refinance its old bonds through the Rural Bond Bank at a 6.63 percent rate and saved more than $256,000," Kustra said. "The East Side Fire Protection District in St. Clair County was able to reduce a 10 percent rate to 6.68 percent by refinancing through the Rural Bond Bank, a savings of more than $150,000."

The Rural Bond Bank helps small units of government save local tax dollars by lowering the costs of financing through pooling of small bond issues. The Rural Bond Bank's service area covers the 96 counties outside of the Chicago metropolitan area.

"In the past, small units of government in rural communities have had difficulty selling bonds at the same interest rates enjoyed by larger, urban governments," Kustra said. "This pooling arrangement has changed that situation. The Rural Bond Bank provides cost-saving financing for needed public infrastructure improvements in rural Illinois on a pay-as-you-go basis."

The Rural Bond Bank, which is located at 427 East Monroe Street in Springfield, provides financial services to local governments in 96 counties in Illinois. For more information, please call 217-524-2663. •

Page 22 / Illinois Municipal Review / March 1992