Salem Lakes unveils first 30-year capital plan, officials warn of multi‑million-dollar funding gap

Salem Lakes village administrators presented the village’s first 30‑year capital improvement plan and told the Village Board that, under current funding patterns, the municipality faces a multi‑million dollar shortfall in the next budget year.

The capital plan inventory and projection — prepared by village staff with outside consultants — lists every major asset the village owns and estimates replacement costs in today’s dollars. “In 2025, we’ve now developed the village’s first 30‑year capital plan of all village facilities, infrastructure, and equipment,” said Sandra Miller, village administrator.

The plan matters because it quantifies how much the village will need to maintain status quo services and infrastructure. The presentation showed that the village owns about 86.16 miles of roads, roughly 46 miles (about 53 percent) of which are rated at a 6 or lower on the village’s pavement scale. Miller and staff said that to avoid falling further behind the village would need to replace roughly 4.3 miles of roadway each year — a pace the staff estimate would require about $4 million annually for roads alone using current unit costs.

Board members were shown how the village arrived at the funding gap. Miller reviewed the history of the 2017 merger of the Village of Silver Lake and the Town of Salem into the single municipality now called Salem Lakes, and said the merged budget started at about $15 million rather than the roughly $18.9 million that would have been the simple sum of the two pre‑merger budgets. That difference, plus slow net new construction growth and rising inflation in construction and labor costs, are among the factors staff cited as compounding capital shortfalls.

Consultant Dave Bridal, who served briefly as interim administrator in 2023 and worked on the plan, urged adoption of a capital plan even if the village cannot fully fund it immediately. “Even if you don’t have any money…you still really should have a capital improvement plan, CIP plan,” Bridal said. He described the CIP as a fiscal management tool that helps smooth spending and avoid peaks and valleys.

The plan breaks out equipment, buildings and infrastructure across departments. Staff highlighted that three fire pumpers were purchased the same year and would come due for replacement within a similar window; replacement of a single pumper was listed in the plan at about $1.2 million. Miller and Bridal recommended staggering replacements going forward to avoid large simultaneous expenditures. The plan also lists specific non‑road capital obligations, including water tower work estimated at roughly $505,000 (2030) and $480,000 (2034) in today’s dollars.

Staff gave several quantitative details to justify the plan’s pacing: the village has about 42 full‑time staff, a resident population near 14,000, and an average net new construction rate of about 1.36 percent (2018–2022). Miller said the capital plan assumes a status‑quo service level and no growth; it therefore documents what is needed to maintain existing assets rather than add new ones.

Ehlers financial adviser Todd Tate presented financing options and explained how Wisconsin’s levy‑limit law affects capital funding. “General obligation debt is exempt from levy limits,” Tate said, and he outlined two basic approaches: short‑term notes (one‑year notes rolled annually) that minimize interest but can cause sharp levy impacts when principal is due, and longer‑term structures that smooth levy effects but carry more interest over time.

Tate presented illustrative scenarios. Using staff’s proposed capital schedule, a one‑year note approach to fund an elevated road and capital program would sharply raise the village’s debt levy requirement in the next budget cycle; a multi‑year structuring approach could spread increases over several budgets while still substantially increasing the levy over current levels. Staff emphasized the presentations were illustrative and that any actual borrowing would require formal authorization and timing that fits levy‑setting deadlines.

Discussion during the meeting covered tradeoffs: pursuing economic development to increase net new construction (the only automatic way under current law to raise the levy without a referendum), reducing other operating costs to free funds for capital, or using debt. Miller told the board that some near‑term revenue measures — for example, creating tax increment districts (TIDs) — can help in the long run but usually defer revenue until district closure and should be used only after careful underwriting. She said that for developer‑led TID proposals the village would ask the developer to fund Ehlers’ financial analysis before staff forwards it for review.

Board members and staff agreed on several next steps that were described as direction to staff rather than formal board action: post the capital plan slides and a four‑page narrative summary on the village website, schedule additional budget workshops for board direction on funding levels, and pursue strategic planning and public engagement (including EDC surveys) to define the village’s development priorities and whether to seek referendum, debt, or economic development to raise net new construction.

Trustee Rita asked that the materials be made publicly accessible. “I would like to see this presentation be put on the home page,” she said, noting the value of a short narrative and the slide deck to explain how much of a typical homeowner’s tax bill flows to the village.

The meeting closed after a brief procedural motion to adjourn; the transcript records a motion but does not include a detailed roll‑call vote or tally.

Staff said they will provide the full spreadsheets and supporting documents to trustees and post them for public review; staff also offered to arrange site visits to view equipment or facilities cited in the plan.

The board did not take any formal vote on borrowing or on adopting a fixed funding level for the capital plan during the session. Staff requested direction from the board at a future budget workshop on the dollar amount the board wishes to target for capital funding so consultants can model bonding scenarios and levy impacts before the village finalizes its levy.