Oak Creek council approves plan to issue $22.44 million in promissory notes, sets parameters for up to $23 million

Oak Creek’s Common Council on March 4 approved a plan of finance to issue $22,440,000 in general obligation promissory notes and adopted a parameters resolution authorizing sale of notes not to exceed $23,000,000.

The plan, presented by Deputy City Administrator and Finance Officer Max Gagan, would permanently finance prior note anticipation notes for the Lake Bluff Stabilization and Revetment Project (about $13.7 million), provide $3 million for the Enhanced Surface Transportation Rehabilitation Program and allow up to $5.9 million to refund 2015 general obligation bonds. Gagan told the council, “Before you tonight is a plan of finance, to issue $22,440,000 worth of general obligation promissory notes.”

A finance adviser from Robert W. Baird, Justin Fisher, said the city’s current rating and market conditions support the transaction: “The city has a current outstanding rating of a double A2,” he said, adding that recent movement in Treasury rates and potential Federal Reserve action could produce opportunities to lower interest costs.

Why it matters: The package bundles three purposes—permanent financing of prior short‑term borrowing, new capital for a surface‑rehabilitation program, and optional refunding to capture savings—so it both funds projects and seeks debt‑service savings if market conditions permit. The council approved a parameters resolution that gives staff authority to execute the sale within stated limits, including a target present value savings threshold for any refunding component.

Key details and fiscal context - Estimated issue size discussed: $22,440,000. The parameters resolution set a not‑to‑exceed figure of $23,000,000 and included a planning interest rate of about 4.5% and a minimum 3% present value savings threshold to include the 2015 refunding. - Proposed maturities run from April 1, 2026, through Feb. 1, 2038, with a callable date beginning April 1, 2033. Fisher noted the plan contemplates callable features that would allow the city to re‑examine refunding opportunities later. - Funding sources and TID impacts: Fisher and Gagan presented cash‑flow modeling showing tax increment district (TID) revenues, especially TID #13, will support repayment and that an approximate $1.7 million reserve in that TID can be used to smooth near‑term debt service. Gagan said staff modeled various scenarios to avoid undue levy pressure while advancing capital work.

Related action: redemption of 2014B refunding bonds The council also adopted a resolution authorizing redemption (full call) of outstanding General Obligation Refunding Bonds, Series 2014B (dated 12/16/2014). Gagan said the remaining principal on the series is $1,375,000 and that paying the bonds off with cash on hand from TID #7 would save about $170,000 in future interest and enable staff to recommend termination of TID #7 at the council’s March 31 meeting. He told the council the TID’s project plan had been fulfilled and the expenditure period lapsed.

Council action and procedural notes - The plan of finance and parameters resolution were adopted by roll call vote. The council authorized city staff (city administrator or deputy city administrator/finance officer) to execute sale documents within the resolution parameters. - The redemption resolution for Series 2014B also passed by roll call. Gagan said the plan is to call the bonds and then bring a recommendation to terminate the corresponding tax increment district at the March 31 meeting, which could reduce the tax increment levy for the 2026 budget.

What's next If market conditions meet the council’s parameters, staff and the city’s underwriter will proceed to market, with a potential closing targeted for about April 10, 2025. If the market does not produce the required savings on the refunding, the refunding portion will be excluded and staff will wait for a more favorable environment.

Sources: Presentations and remarks by Max Gagan, Deputy City Administrator and Finance Officer, and Justin Fisher, Managing Director of Public Finance, Baird; council motions and roll calls recorded March 4, 2025.