Oak Creek approves plan to issue $22.44 million in general-obligation notes, sets parameters for up to $23 million and calls 2014B bonds

The Oak Creek Common Council on March 4 adopted a plan of finance to issue $22,440,000 in general-obligation promissory notes and separately approved a parameters resolution allowing sale of notes up to $23,000,000; the council also approved redeeming the city's Series 2014B general-obligation refunding bonds and using TID cash on hand to pay the remaining principal.

The plan of finance passed by roll call after a staff presentation laying out three purposes: to permanently finance two note anticipation notes tied to the Lake Bluff Stabilization and Revetment Project (about $13.7 million), to fund $3.0 million for the enhanced surface transportation rehabilitation program, and to potentially refund $5.9 million of 2015A general-obligation refunding bonds. Deputy City Administrator and Finance Officer Max Gagan presented the plan; Justin Fisher, managing director of public finance for Baird, gave market context and the city’s credit assessment.

The financing matters because the notes will convert short-term borrowing taken in 2023–24 into longer-term debt, add program funding, and may produce net present-value savings if market rates allow. Gagan said the included refunding of 2015A bonds would be included only if it met a council threshold; Fisher told the council that “the buzzword that you're hearing in the news right now is tariffs,” noting market volatility but also that recent softer economic reports have pushed treasury rates lower and created an opportunity to refinance in the coming weeks. Fisher also reported that Moody’s reviewed the city and conveyed a “double A2” level of credit quality in their call.

Staff described parameters the council adopted in a separate resolution: a not-to-exceed sale amount of $23,000,000, an initial planning interest-rate parameter of about 4.5 percent and a requirement that refunding include present-value savings of at least 3 percent of refunded principal if the 2015 bonds are included. Staff estimated a potential closing around April 10, 2025 if market conditions were favorable.

The council also approved a resolution to redeem and pay off outstanding Series 2014B refunding bonds (originally issued to refinance Drexel Energy-related debt). Finance staff said TID No. 7’s improved performance has produced sufficient cash on hand to pay the remaining principal balance of $1,375,000 now, which staff estimated would save roughly $170,000 in future interest. Staff said they intend to bring a recommendation to terminate TID No. 7 at the council’s March 31 meeting; doing so before April 15 would allow the city to reduce the tax-increment levy for the 2026 budget year.

Council members asked staff to clarify TID reserve levels and the mechanics of municipal note sales; staff said TID No. 13 currently holds about $1.7 million in reserve that can be used as a buffer while principal is paid down, and Fisher explained the typical investor base for municipal paper (insurers, banks, institutional portfolios) and how competitive demand affects yields. On motions and roll calls, the council recorded ayes across the roll call on each of the three items.

The actions formalize longer-term financing for lakefront stabilization, add funding for the city’s surface transportation program, preserve the option to refund older bonds if market conditions yield sufficient savings, and retire an outstanding 2014B issue now using TID resources. The council authorized city staff (within the adopted parameters) to complete the sale and related administrative steps.