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Salem Lakes approves $1.9 million one-year promissory note to fund capital projects
Summary
The Village Board authorized the issuance and sale of a $1,900,000 general obligation promissory note (Series 2025A) in a 6–1 roll-call vote to provide short-term funding for the capital plan; the note carries a 3.7% interest rate and is callable March 1, 2026, with final maturity Dec. 1, 2026.
The Salem Lakes Village Board on a 6–1 roll-call vote authorized the issuance and sale of a $1,900,000 general obligation promissory note, series 2025A, to fund capital projects and smooth levy impacts.
The vote followed a presentation by Ariana Schmidt of Ehlers, the village’s municipal advisor, who described the financing as a one-year, private-placement promissory note designed to work within levy-limit constraints. "There is an interest rate of 3.7% which is lower than our presale estimate," Schmidt said, and she noted a one-time bank fee of $1,000.
The village sought local bank bids for a short-term note that would let the board authorize borrowing before setting the 2026 levy. Under the terms described by Ehlers, the note is callable beginning March 1, 2026, and must be paid in full by Dec. 1, 2026. Schmidt said holding the note to maturity would accrue roughly $76,000 in interest; a March 1 prepayment example would reduce interest to about $23,629.
The board heard that only one bank bid the issue: Johnson Bank. Ehlers’ presentation included a tax-impact illustration showing the village’s net levy for debt service rising in 2026 as the short-term obligation is added to existing debt, producing an estimated debt-service rate of about $1.15 per $1,000 of assessed value for 2026 (presented as an illustration by Ehlers).
During discussion trustees asked for clarity on the tax impact and whether the village should pursue larger, longer-term borrowing to cover more projects. A trustee said annual short-term borrowing is common for a municipality of this size and noted the village has many miles of roadway and other infrastructure to maintain.
A motion to approve Resolution 2025.1-138 authorizing the issuance and sale of a $1,900,000 general obligation promissory note, Series 2025A, passed on roll call: Trustee Barhydt (yes), Trustee Rooks (yes), Trustee Cooley (no), Trustee Favor (yes), Trustee Hopkins (yes), Trustee Gant (yes), President Buecher (yes). Motion carries 6–1.
Next steps: the sale was approved and Ehlers noted the village can prepay after March 1, 2026, if levy collections permit, to reduce interest costs.
