City OKs $10-Million Bond to Finance Road Projects

Short of cash but anxious to keep several big projects rolling along, the Lake Forest City Council will issue a bond to raise $10 million.

On Tuesday, the council voted to solicit bids from seven banks to provide financing for various capital projects. The money would be repaid later with developer fees from construction of 4,000 homes being built in the city, officials said.

The $10 million would go toward the city's portion of the Alton Parkway gap closure, Rancho Parkway gap closure, the sports park and some intersection improvements.

Another reason to push ahead with bond money is to take advantage of relatively low construction costs caused by the poor economy, Lake Forest Mayor Pete Herzog said after the meeting.

With the bond proceeds, cash previously earmarked for Alton Parkway could be freed up to buy additional property for the sports park or help pay for its construction, said Ben Siegel, assistant to the city manager.

The bonds would be paid back over 15 to 20 years using fees from area developers. Those fees are also expected to cover bond interest costs, which the city would start repaying in December 2013, Siegel said at the meeting.

Bank proposals for the bond issuance will be presented at the July 19 City Council meeting.

Similar financing was used for improvements to El Toro Road in 2004, according to City Manager Robert Dunek.

No members of the public weighed in on the bond idea Tuesday.

The council voted 4-0 in favor of the resolution. (Councilmember Scott Voigts left the meeting before the item arose.)