Northfield Township Exploring Bonds For Multiple Projects
March 29, 2022
By Mike Kruzman / firstname.lastname@example.org
Northfield Township officials are exploring bond options while interest rates are low.
Discussion about how to pay for a match for a DNR grant earlier this month led the Board of Trustees to inquire about bonding while rates were still favorable. At their latest meeting, Treasurer Jacqueline Otto shared the analysis from their bond counsel. While there was concern about needing to act fast because of the threat of rates rising, bond counsel said that municipal bonds don’t increase as quickly as regular market bonds. It could take a couple of years for them to catch up, in fact.
Otto received 10-year costs for borrowing $300,000, $400,000, and $500,000, with a projected interest rate of 3.25%. The $300,000 bond would incur interest rates of about $54,000, with each increased amount adding about $12,000 more. Trustee Josh Nelson was skeptical of rates staying where they are, but still felt the current rate is good, no matter how much they borrow.
Supervisor Ken Dignan felt it was important to designate some target items for the money before taking any action to borrow. With costs rising, he suggested defining the intent of 60% to 65% of the funds. Dignan said they don’t want to get three-quarters of the way through a project only to have to pull reserve funds that they weren’t prepared for.
Aside from the DNR match, another project that is on the Board’s radar is to fix the HVAC in the township office building. The building is home to, not only the township offices, but also the police and fire departments.
Following discussion, the Board approved appointing a subcommittee to explore projects the bond will be applied to.