Committee recommends taxable $9.98 million bond for land purchases, amid calls to delay TID action

The Germantown General Government and Finance Committee on Wednesday voted 2–1 to forward a positive recommendation to the Village Board authorizing the issuance and sale of up to $9,980,000 in taxable general obligation promissory notes, Series 2025 A, to finance land acquisitions and related costs.

The notes would cover property purchases the village has already made and provide money for additional land acquisitions identified for the proposed village center area. Phil Costin of Ehlers, the village’s municipal advisor, told the committee the taxable issuance provides the village flexibility to sell land later: “Making it taxable gives you that flexibility to sell the land to an ultimate end user,” he said.

Why this matters: the taxable structure is intended to allow the village to recover costs if it decides to convey parcels to private developers. The issuance is linked in the presentation to a possible Tax Increment District (TID) for the village center (referred to in materials as “TID 10”), but Costin emphasized that the TID had not been created and that the village board will have distinct, subsequent choices about whether to approve a district.

Public comment and committee discussion

Two residents spoke during the citizen-input period. Melanie Smythe urged the committee to postpone borrowing for the village center and study alternatives to a TID and to general-obligation bonding if the district does not pass. Smythe said: “I think that we should postpone this vote in order to look a little bit further into what some other alternatives may be. It's a big decision. It's a lot of money. $10,000,000 on top of the $4,000,000, which is normal business.”

Resident Scott Effley asked for clarification of line items and the timeline for reimbursing the general fund for a previously purchased parcel. Effley asked whether the borrowing list included routine “parking lot” capital items and questioned specific figures, including a roughly $1.56 million road program line and a $500,000 public-safety amount.

Ehlers’ overview and options on the village center

Costin told the committee the village does not yet have TID 10 and summarized the approvals that would be required if the village proceeds: Plan Commission action, Village Board action, and a final vote by the joint review board of taxing jurisdictions. Costin outlined four high-level options for the village center area: delay action to seek more input; approve the project plan as presented; approve the plan with modifications (for example, removing parcels north of Mequon Road); or deny the proposed district.

Costing and timing

Ehlers’ presentation broke the borrowing into taxable and tax-exempt components. Costin said the taxable portion proposed in Resolution A—about $9.98 million—would be amortized over 20 years in the planning model and is intended to match the anticipated life of a potential TID. He told the committee the village was seeking a parameter authorization to allow sale timing flexibility in a volatile market; staff projected a tentative sale date in early June with closing in late June so funds would be available before a July 1 purchase deadline for one property referenced as the Ascension property.

Costin gave illustrative market-rate guidance during the meeting, saying the tax-exempt 10-year note would price around 3.50–3.75 percent, while the taxable 20-year would be near 5.5 percent under current conditions. He also said the village’s long-term growth assumptions in the financing model had been conservative (using roughly 25 percent of recent assessed-value growth and half the historical net-new construction rate).

Reimbursement of the general fund

Committee members pressed staff on a previously purchased parcel (referred to in presentation materials as the Grosnick/Grossneck parcel). Costin and village staff said the borrowing would reimburse the general fund for the upfront purchase; Costin explained the item was included in the 2025 issuance so the village could replace reserve funds used for the purchase. The transcript contains slightly different figures for that purchase in places; committee discussion identified the amount as approximately $1.17 million and indicated the village has been carrying the cost on its books.

Action and next steps

The committee moved and seconded the recommendation. After discussion and public comment, the motion to forward a positive recommendation to the Village Board to authorize issuance of not-to-exceed $9,980,000 taxable general obligation promissory notes, Series 2025 A, passed by voice vote with a 2–1 count. The meeting record did not specify the names of each member’s vote.

The Village Board will consider the resolution on a subsequent agenda. Separately, any decision to establish a TID for the village center would require additional, distinct approvals by the Village Board and the joint review board.

Ending

Committee materials show alternative scenarios for the village if no TID is created, including the option to sell parcels and use sale proceeds to reduce debt service. Costin said proceeds from any parcel sale could be placed into a debt-service fund to reduce the borrowing’s tax impact if the village elects to sell land later.