CHICAGO - The Chicago City Council approved on Wednesday up to $1 billion of new money and refunding water revenue and wastewater revenue bonding.

"Over the past few years, we've made significant progress upgrading and improving our aging water infrastructure to protect the water from Lake Michigan, which is our most precious natural resource," Mayor Rahm Emanuel said in a statement. "These bonds will continue to help the city maintain and improve our water and sewer systems, some of which date back more than 100 years."

The water revenue borrowing will finance improvements to and extensions of the water system, including enhancements to the purification plants; installation of new and replacement if old grid mains; installation and replacement of meters; and upgrades to various pumping stations.

The wastewater borrowing will finance improvements to the sewer system, including flood abatement; reconstructing, lining and rehabilitation of the sewers; and sewer replacement and auxiliary outlet sewers.

Both sales are planned for the third quarter after the city releases its annual financial analysis and preliminary budget in late July and hosts its annual investors' conference.

The ordinances allow up to $575 million of water revenue bonding including $475 million of new money and $100 million of refunding if interest rates allow for sufficient savings.

A separate ordinance permits up to $475 million of sewer revenue bonds to raise $375 million in new money and up to $100 million in refunding bonds for savings. Bonds are backed revenues generated from user fees.

Both deals will cover city borrowing needs for projects over two years in line with the city's recent borrowing practice for both programs.

The two programs carry ratings that range from the single A category to the mid double-A category depending on their lien status. The city has nearly $2 billion of water debt outstanding and $1.3 billion of sewer bonds.

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