GOVERNOR APPROVES LEGISLATION EXPANDING
RURAL BOND BANK AUTHORITY

Governor Jim Edgar recently signed legislation allowing the Illinois Rural Bond Bank to offer lower-cost financing for local government construction projects in the outlying Chicago area.

"The Rural Bond Bank, chaired by Lieutenant Governor Bob Kustra, has proved to be of great assistance to local governments downstate in financing needed infrastructure improvements at more affordable levels for the taxpayers," the Governor said.

"This legislation extends that help to local governments and school districts in DuPage, Kane, Lake, McHenry and Will counties, many of which have similar needs to areas already served by the Bond Bank. It will provide affordable financing to communities that otherwise might not be able to finance new development."

Kustra said the Bond Bank has issued about $50 million in bonds to date, helping 69 communities within 43 Downstate counties.

"The expansion of this program is a win-win for Illinois," Kustra said. "It gives suburban communities access to lower cost capital for infrastructure improvements. It also benefits downstate communities already served by the Rural Bond Bank because borrowing rates and issuance costs will go down as more participants are included in each bond issue."

By packaging several small projects together into a larger bond pool, communities using the programs of the Rural Bond Bank can save 10 to 15 percent of their total financing costs.

The total of authorized bonds from the Rural Bond Bank also is increased to $150 million from $100 million in the legislation, with $25 million allowed for financing projects in the five collar counties.

Chief sponsors of House Bill 1850 were Representatives Tom Cross (R-Oswego) and Frank Mautino (D-Spring Valley) and Senator Ed Petka (R-Plainfield).

It is effective immediately.

September 1995 / Illinois Municipal Review / Page 25