Budget committee backs 2026 financial management plan, recommends timing shifts for Community Park and Progress Drive

On Aug. 19, 2025, the Village of Cottage Grove Budget Review Committee reviewed a draft 2026 financial management plan and voted to recommend that the Village Board adopt the plan and consider shifting the timing of two capital projects — Community Park and Progress Drive — to ease costs and capture efficiencies. The recommendation centers on financing a new police station, applying some Tax Increment District (TID) and fund-balance resources to reduce short-term levy pressure, and asking staff to return to the board with additional details before final decisions. The plan presented by village staff and consultants is a multi-year model covering operating funds, capital projects and levy-limit compliance. Greg (staff member) described the village’s credit context, noting Standard & Poor’s views of the village’s “strong reserve position and liquidity” and calling the village’s long-range planning “sophisticated and proactive.” He said the police station borrowings would not affect the tax roll until 2027: “There will be no impact on the tax roll, until 2027.” Committee members and staff highlighted three short-term funding actions in the draft model. The draft shows a one-time distribution from TID 5 estimated at roughly $850,000 in surplus, of which $50,000 is proposed in the model to reduce the 2026 tax impact. Cameron (staff member) explained that using a portion of those TID proceeds and existing debt-service fund balance helps “step that gap so we don't have to take all of that gap increase in 1 year.” Greg said the plan would also propose about $600,000 of cash to reduce police station borrowing and $200,000 to abate debt in 2026, and that the debt levy increase tied to the police station would mainly appear in the 2027 levy. The committee heard projected tax impacts expressed in the model. Greg gave an example for an average home and said his working estimate for the first year of police-station-related debt-service impact was roughly $304.76 gross; he also noted the municipal service building debt that ended in 2025 (about $77) would be part of the net calculation. Cameron summarized short-term impacts in the model as approximately a $248 tax impact from 2025 to 2026, followed by a decrease of about $99 from 2026 to 2027 in the village’s projection (staff emphasized these are model estimates and subject to change during the budget process). Valuation changes and the scheduled closure of TID 5 drove much of the committee discussion. Staff said the Department of Revenue certified equalized values on Aug. 15 and that the village’s equalized value rose nearly 11% from 2024 to 2025; the model uses a conservative growth projection (about 6% in the presenter’s approach). Greg and staff explained that when TID 5 closes (anticipated to return its increment to the tax rolls for the 2027 budget), the additional tax base will lower the village’s equalized tax rate even as the levy increases to absorb new debt service. Committee members reviewed the capital improvement plan (CIP) schedule and questioned timing options for two projects that carry similar costs: Community Park and Progress Drive. Cameron told the committee that the village’s insurance provider reviewed Community Park and advised that, because of ADA access and facility degradation, “we should not allow it to be rented out.” Staff said the shelter and related infrastructure may remain usable for informal recreation but that rental of the shelter will be suspended in 2026; staff are evaluating whether accessible portable sanitation or repairs will be needed. On timing, staff proposed keeping Community Park as a 2027 candidate or shifting Progress Drive into 2028 to pair it with other road work and the Vilas Road path connection, a scheduling choice that could create procurement and construction efficiencies. Committee members discussed pairing Progress Drive with Dunkel Court and the potential to coordinate pedestrian improvements near the railroad corridor, but staff noted railroad crossings and right-of-way coordination could require extra lead time. Funding specifics discussed in the meeting included a roughly $300,000 balance in Pleasant Springs funds that could offset a ladder-truck purchase; staff reported an estimated Village share of Pleasant Springs funds of $182,700 available now and additional payments later this year. Staff also noted the draft CIP shows a ladder-truck cost (presented in the CIP schedule) and that the $1.6 million ladder-truck line in 2028 currently assumes no Pleasant Springs cash is applied until staff and the town finalize shares. Committee members asked about variable revenue sources and staff cautioned against counting volatile categories — permits and investment income, for example — as recurring revenue. Greg recommended reacting to favorable one-time revenue (for example, higher investment income or TID receipts) by using it to reduce debt or bolster capital rather than counting it as recurring operating revenue. After discussion, Cindy (committee member) moved that the committee recommend the Village Board: include Progress Drive in 2028 (after police station construction) and align it with the Vilas Road path connection where feasible; apply Pleasant Springs funds to offset the village’s share of the ladder truck; and keep Community Park in the 2027 budget pending additional information and cost estimates. Chris (committee member) seconded the motion; the committee voted in favor and the motion carried. Next steps: staff said they will provide additional detail in the packet for the Village Board meeting on Sept. 2, including a clearer breakout of the police station cost, the updated Community Park assessment and the finalized Pleasant Springs share for ladder-truck financing. Staff emphasized the financial management plan sets a budget ceiling for the upcoming process but that the figures will be refined before the board adopts the 2026 budget.