Finance committee reviews ladder truck prepayment offer and broader CIP debt options; asks for detailed financing plan

Finance Committee members weighed a vendor's prepayment opportunity for a ladder truck and heard a detailed financing analysis of capital projects, including a $28.5 million streetscape and two options for police and village-hall work.

Village staff and the fire department described a first-right-of-refusal opportunity to buy a ladder truck built for delivery sooner than the village's planned schedule. Staff said the vendor offered a trade-in of roughly $190,000 for the village's existing truck and an estimated near-term savings in the low hundreds of thousands if the village prepaid; the chief and manager described operational benefits of a mid-mount ladder that better navigates downtown streets.

Finance advisers from Baker Tilly and Stifel presented long-term debt scenarios. The advisers modeled (a) issuing $28.5 million for the streetscape with 20-year principal-and-interest payments or interest-only early years, and (b) adding $70 million or $90 million for police/village-hall projects as 30-year bonds with either level principal-and-interest payments or interest-only until existing debt falls off in 2033. The advisers showed that deferring principal reduces near-term debt-service pain but increases total long-term interest costs by about 5% of total bond principal.

Matt Stark (Baker Tilly) said a $70 million bond with level payments would add roughly $4.7 million in annual debt service; a $90 million bond would add about $6.0 million. Deferring principal to 2033 would lower payments in the near term but increase later-year payments when existing debt drops off. The firm used then-current market pricing and the village's double-A rating to develop estimates.

Trustees asked about impacts on the general levy and how much additional levy growth would be required to avoid service cuts. The advisers illustrated a scenario that assumed 3% annual levy growth and 2% annual taxable-value growth; under those assumptions the village share of a median homeowner's tax bill would roughly double by the mid-2030s. Trustees asked staff for a full financing plan, including: refunding opportunities, timing, a proposal for whether to make principal payments from the outset, and the candidate projects that could be deferred or value-engineered.

No final decisions were made; trustees expressed interest in staff returning with precise cash-flow options, an analysis of using fund balance versus a short-term internal loan to hold costs until bond issuance, and a full CIP prioritization for board consideration.