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Muskego reviews $5 million borrowing plan to accelerate road repairs; officials say tax impact modest
Summary
City financial advisor outlined a plan to borrow $5 million (placeholder) to fund road repairs, projecting a roughly $230,000 first-year debt service and an estimated five-cent increase per $1,000 of assessed value; council signaled support and staff outlined a spring bidding schedule.
Muskego City officials on Jan. 27 discussed a proposed capital-improvement financing plan that would borrow $5 million to accelerate the city’s road-repair program. Kevin Mullen of Baird, the city's financial adviser, described the plan as a placeholder to fund current and future capital projects while spreading costs over time.
Mullen said a 15-year borrowing at a conservative estimated rate of 3.83% would produce a first-year debt-service payment of roughly $230,000, with a hypothetical offset from a bid premium and other revenues. "So it would be about a nickel increase in the tax rate," Mullen said, referring to an increase from roughly $0.4141 to $0.46 per $1,000 of assessed value in the model he presented.
Council members emphasized the intent to earmark the borrowed funds for roads. The chair said the plan would use half of the current borrowing to fund road repairs in the coming year and keep the other half available during the next budget process. The city noted it already has about $375,000 budgeted and can combine that operating money with borrowed funds.
Scott, a city staff member overseeing roads, outlined procurement and timing: public bidding would be advertised in February, bids opened in March, awards made in mid-March, and work typically begins after Memorial Day; bids would be valid for 90 days. Scott warned that scaling up to a larger program increases resident notifications and utility adjustments. He listed candidate streets for the 2026 package including North Shore Drive, Scenic Drive, Schultz Lane, and multiple subdivision streets (Lynn Drive, Veil Drive, Roger Drive, Catherine Drive/Court, Dorothy Drive/Court) with Flintlock Drive and Woodland Court as alternatives.
Officials said borrowing every other year — a recurring $5 million placeholder in the plan — is meant to smooth the tax impact while creating capacity for a multi-year road-replacement plan. No parameters resolution was adopted at the Jan. 27 meeting; staff indicated a parameters resolution would likely be considered by the council in March if the council wishes to proceed to market.
