Cottage Grove board authorizes parameters for up to $20.36 million in notes to fund 2026 capital plan

The Village of Cottage Grove Board of Trustees on Feb. 16 adopted a parameters resolution authorizing staff to proceed with a not-to-exceed $20,355,000 general‑obligation promissory note (Series 2026A) to fund the village’s 2026 capital-improvement plan.

Greg of Ehlers, the village’s municipal advisor, presented a presale report that allocated the borrowing among street and trail improvements, water and sewer projects, park improvements, the police‑station project and equipment purchases. The total project cost referenced in the packet was listed as roughly $220,214,000 across all funding sources; the resolution limits the note sale to a not‑to‑exceed principal of $20,355,000 and caps the true interest cost at 4.21%.

Ehlers walked the board through estimated levy impacts and repayment sources: water‑ and sewer‑funded projects would be repaid from utility revenues while the levy would support other debt. The presentation projected a tax‑rate change from about $1.55 to about $1.88 per $1,000 of equalized value, translating to roughly $65 per $100,000 of value in 2027 for the portion supported by the levy. Ehlers also said the village’s projected general‑obligation borrowing would reach about 50% of statutory capacity after this financing, leaving approximately $48 million of borrowing capacity for future projects.

Trustees discussed affordability and alternatives. Trustee Pete called attention to an estimate of about $9.8 million in total interest cost over the repayment period and said that figure was “disturbing”; Greg and finance staff responded that the presentation included conservative interest assumptions and that the resolution’s parameters and call features allow future refinance or prepayment when market conditions permit. Staff and consultants also noted that levy limits constrain operating revenue options in Wisconsin, meaning capital needs frequently rely on debt, grants or referenda.

The board debated options such as impact fees, special assessments and grant-seeking; staff said an impact‑fee proposal for law enforcement would be considered on a later agenda. With parameters in place, staff and the administrator or finance director are authorized to accept competitive bid results if they meet the resolution’s limits. The sale timeline presented targeted March 24 for bidding and an estimated close of funds by mid‑April if market conditions allow.

Trustee Murphy moved to approve the parameters resolution; a roll‑call vote produced a majority in favor and the resolution carried.