Breaking away from their traditional pay-as-you-go method for funding County Road and Highway improvements, Cook County partnered with Wells Fargo Securities, the investment banking and capital markets business of Wells Fargo (NYSE: WFC), to create and implement a financing vehicle that funds long-term surface transportation and highway improvements, creating jobs and accelerating infrastructure projects.
The inaugural AAA-rated Sales Tax Revenue Bonds are part of the County’s strategic, long-term approach to its road infrastructure maintenance program. The $90 million issuance of these bonds to finance significant components of the 2012-2014 Highway Transportation Plan enables the County to create a pool of capital funds for its infrastructure improvements. Traditionally, the County had financed road and bridge infrastructure projects with its motor fuel tax, which allowed for maintenance, but was less effective for long-term improvements. With the help of the Wells Fargo Securities Public Finance team in Chicago, the County developed their first sales tax revenue bonds to tap a different investor base, thereby securing a significantly lower funding cost. These cost savings allow the county to focus on long-term improvements, while freeing up $30 million to go towards the County’s public safety systems, which comprise 40 percent of the County’s total operating budget.
“We are confident that this innovative financing saved significant taxpayer dollars by providing an extremely attractive interest rate, and this will help fund crucial infrastructure projects throughout Cook County,” said Tariq Malhance, Chief Financial Officer of Cook County.
In addition to creating a pool of capital funds for capital infrastructure investments for suburban roads, bonding off the sales tax revenues is also set to create more than 1,300 jobs in Cook County.
“We have made great strides in my administration to leverage our financial tools more effectively to pursue critical infrastructure projects throughout Cook County,” Cook County Board President Toni Preckwinkle said. “This innovative new financial strategy is an effective and efficient means to fund our needed road projects.”