Greenfield council approves sale of up to $7.485 million in promissory notes to fund streets, parks and equipment

GREENFIELD, Wis. — The Greenfield Common Council on Feb. 19 approved a resolution authorizing the sale of general obligation promissory notes not to exceed $7,485,000 to finance streets, parks, law-enforcement facility repairs, City Hall improvements and a package of capital equipment.

The presale report presented to the council said the notes will be issued for a 15-year term, will be bank-qualified because the city does not expect to issue more than $10 million in tax-exempt debt this calendar year, and will be sold competitively on April 2 with an estimated closing about three weeks later. The council voted 4-0 to adopt the resolution.

The presale report outlined project-specific amortizations: street projects amortized over 15 years; parks, the law-enforcement garage roof, City Hall improvements and longer-lived equipment over 10 years; and shorter-lived equipment over five years. The report estimated the new borrowing’s net effect would add about $5.74 over 20 years to the total tax burden on the owner of a $350,000 home (roughly $28 per year on average), while noting the numbers are estimates until the sale locks final rates.

The presale presenter, Paul of Ehlers, told the council the issue amount is the amount that will go to market and that Ehlers will continue to monitor refunding opportunities. "The notes themselves are being issued for a term of 15 years," Paul said, adding the city will request a rating call with Moody’s and did not expect a change from the city’s recent A2-rated issues.

Why it matters: the borrowing package bundles multiple capital needs into one competitive note sale and expands the city’s use of general-obligation promissory notes for capital equipment — a shift council members said has become more common as levy limits and the end of ARPA funds have tightened municipal budgets.

Council members debated the decision to finance shorter-lived equipment through borrowing rather than pay-as-you-go levy funding. Mayor Neitzke said the city is entering "a new era" in which many capital items that previously might have been paid from levy or ARPA are now being financed. He warned, "when we're talking about a $5,000 or $6,000 lawnmower ... it would be better for the taxpayers in this community to be levied for those dollars, as opposed to putting them in a debt schedule and ... contributing to the $574 extra." He also emphasized the ordinance change does not permit using borrowed funds for routine operational expenses.

Alderperson Kasner moved to adopt the resolution; Alderperson Bailey seconded. The clerk called the roll: Alderperson Juzwicki, Alderperson Kasner, Alderperson Sarian and Alderperson Bailey voted "aye." The motion carried.

The presale report provided a schedule of next steps: due-diligence review and a conference with Moody’s in the week of March 17, distribution of the official statement the following week and the competitive sale on April 2, with closing roughly April 24. The report noted interest rates have moved since their recent peak and showed a modest downward tick in recent days; all debt-service figures in the presale are estimates until the sale locks final pricing.

Clarifying details from the presentation and discussion: - Issue amount: not to exceed $7,485,000 (presale issue amount). - Term: 15 years for the issue; amortization varies by purpose (streets 15 years; parks/roof/City Hall/longer equipment 10 years; shorter equipment 5 years). - Tax impact example: estimated additional $5.74 over 20 years on a $350,000 home, presented as roughly $28 per year on average; figures are estimates and will be finalized after sale. - Designation: to be designated bank-qualified because the city does not expect to issue more than $10 million in tax-exempt debt this year. - Rating: staff will request a rating call with Moody’s; presenter indicated no expectation of a change from recent A2 ratings. - Timeline: due diligence and Moody’s call week of March 17; sale April 2; estimated closing approx. April 24.

What council asked for or directed: council requested clarity on project allocations and emphasized limits on using proceeds for operating expenses. Staff and the city’s financial adviser said they will continue monitoring refunding opportunities and will present the official statement and final numbers before the sale.

Background: presenters said the state law change in recent years gives municipalities more flexibility for borrowing and structuring debt than older bond rules. Council members said ARPA dollars had been used in prior years to buy equipment but those federal funds are no longer available, increasing reliance on borrowing and creating pressure under existing levy limits.

The council’s action authorizes staff to proceed with the sale process; final interest rates and debt-service schedules will be set after bids are received and the official statement is issued.