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City of West Chicago Issues General Obligation Bonds for Industrial Streets Improvements
The City of West Chicago is moving forward with the issuance of approximately $9.45 million in General Obligation (GO) Bonds, Series 2026, to fund critical infrastructure improvements in the City’s industrial corridor. The bonds will finance Phase A of the Industrial Streets Improvement Program, which includes reconstruction of Fenton Lane, Western Drive, and Downs Drive.
These roadway investments are part of the City’s adopted multi-year capital improvement strategy and address long-standing pavement and utility deficiencies in key employment areas.
Why This Bond Issuance Is Necessary
Many roadway segments in the City’s industrial areas require full reconstruction and underground utility upgrades. Recent pavement condition evaluations confirmed that several of these streets are in poor condition, with pavement condition index (PCI) scores indicating the need for significant rehabilitation.
Rather than continuing costly patchwork repairs, the City is undertaking full-depth roadway reconstruction and infrastructure upgrades to:
- Improve safety and drivability;
- Support freight movement and business operations;
- Replace aging water mains and utilities;
- Install updated curbs, sidewalks, and street lighting;
- Address stormwater management issues; and
- Ensure long-term durability of critical infrastructure.
Issuing bonds allows the City to complete these improvements now, rather than deferring necessary work, while spreading the cost over the useful life of the infrastructure.
What the 2026 Bond Will Fund
The 2026 GO Bonds will finance Phase A of the Industrial Streets Improvement Project, which includes:
- Fenton Lane. Reconstruction from W. Washington Street to Helena Drive, including full-depth asphalt pavement replacement, curbs and gutters, sidewalks, driveway removals and replacements, fire hydrant relocations, street lighting improvements, and related utility adjustments
- Western Drive and Downs Drive. Reconstruction from Industrial Drive to Kress Road, including full-depth Portland cement concrete pavement, curb and sidewalk improvements, water main replacement, street lighting upgrades, and associated utility work.
The contracts for these projects are contingent upon issuance of the bonds.
Project Timeline
- Bond Ordinance Approved: March 16, 2026
- Anticipated Construction Start: Spring 2026
- Estimated Completion: October 2026, weather permitting
Construction timing was coordinated to minimize disruption while ensuring the work is completed during the 2026 construction season.
City Receives Strong ‘AA’ Credit Rating
In advance of the bond issuance, S&P Global Ratings evaluated the City’s financial position and assigned West Chicago a long-term ‘AA’ rating.
An AA rating signifies very strong credit quality and a very low risk of default. It indicates that the City has a very strong capacity to meet its financial commitments and differs only slightly from the highest possible AAA rating.
S&P assigned a stable outlook, reflecting expectations that the City will continue to report positive operating results and maintain strong reserves.
This strong rating benefits taxpayers because it allows the City to borrow at more favorable interest rates, reducing overall borrowing costs.
How the Debt Will Be Repaid
During the FY 2026 budget process, the City anticipated issuing bonds to fund all three years of the Industrial Streets Improvement Program. Staff continue to pursue alternative funding sources to reduce the total borrowing amount.
Importantly, the City previously approved a 0.5% Home-Rule Sales Tax increase effective January 1, 2024, specifically earmarked to pay the debt service associated with these projects.
This dedicated revenue stream was established to support infrastructure investment without placing additional pressure on property taxes.
Bond Sale Timing
The bond sale was originally anticipated for early March. Due to international market volatility, the City postponed the sale to March 16, 2026 in order to pursue more favorable borrowing conditions for taxpayers.
This strategic delay reflects the City’s careful financial management and commitment to securing favorable borrowing terms.
Frequently Asked Questions
- Will this increase my property taxes?
The City has already implemented a dedicated 0.5% Home-Rule Sales Tax increase to support debt service payments. The intent is to utilize this revenue stream to repay the bonds rather than relying on property tax increases. - Why borrow instead of paying cash?
The total cost of these infrastructure improvements is significant. Bond financing allows the City to complete the work now (when it is most needed) while spreading the cost over approximately 20 years, aligning repayment with the useful life of the improvements. - What happens if alternative funding is secured?
City staff continue to pursue additional funding opportunities. If alternate funds materialize, the total bond issuance and long-term debt service could be reduced. This is anticipated for Phase B of the Industrial Streets Improvement Project in which $2.99 million in grant funding has already been secured. - What if the City’s finances decline?
S&P noted that the City’s strong reserves and balanced operations support the AA rating. The stable outlook reflects expectations that financial performance will remain solid. Maintaining disciplined financial management remains a priority. - Why are industrial streets a priority?
The industrial corridor supports jobs, freight movement, and local businesses. Reliable infrastructure is essential for economic competitiveness and for retaining and attracting employers. When streets and utilities are in good condition, industrial properties are more likely to remain occupied, reducing vacancies and strengthening the local economy. Increased occupancy also brings more daily traffic to the area, which supports nearby retailers, gas stations, and restaurants. These investments support the long-term economic vitality of the community.
Investing in Infrastructure, Supporting Economic Vitality
The Industrial Streets Improvement Program represents a strategic investment in West Chicago’s economic foundation. By pairing responsible financial planning with strong credit management and dedicated revenue sources, the City is addressing critical infrastructure needs while maintaining long-term fiscal stability.