Racine County last month closed on a $4.3 million sale of recovery zone economic development bonds, making it the first county in Wisconsin to take advantage of the new borrowing program included in the federal stimulus package.

Robert W. Baird & Co. served as financial adviser.

The county will pay an effective interest rate of 2.20% for the 10-year financing when the federal government's interest subsidy is factored in, according to a statement from Baird.

Racine will use proceeds of the RZEDB transaction to fund various capital projects, including nursing home improvements, park and highway improvements, acquisition of equipment for highways, public works and the sheriff's department, and improvements to the county courthouse and other buildings.

"By using these bonds provided under the stimulus plan, the county can pursue their capital improvement projects at a lower cost to taxpayer," said Bradley Viegut, a director in Baird's public finance group.

Bonds can be issued under the program through 2010 by qualified governments for improvements within a recovery zone. That designation is determined by the governing body and is based on findings of significant poverty, unemployment, rate of home foreclosures or general distress. The program provides a federal interest subsidy of 45%.

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