Cadott Village Board - The question is, how to pay for the Hwy. X project
Brian Reilly (left) and Peter Meidal, with Ehlers, spoke to the Cadott Village Board, June 16, about what options are available, for financing the County Hwy. X project. Once proposals come back from area banks, the company will go over the rates and help the village make a decision. Photo by Ginna Young
By Ginna Young
Work is about to begin on the Chippewa Street/County Hwy. X project, but before then, it’s imperative that the Cadott Village Board knows how they’re going to pay for it all. That’s where Ehlers Public Finance Advisers come in.
Representatives of the firm were at the regular board meeting, June 16, to discuss the steps needed to obtain financing.
“Our role is to help you understand what your options are,” said Brian Reilly, Ehlers.
Ehlers will craft an interim financing strategy, since the Tax Incremental District (TID) No. 5, in which the project falls, does not have enough revenue to support 100 percent of the debt service costs.
“You have to find another funding source then, to make up the gap,” said Reilly. “Typically, that comes from the General Fund and in this case, the utilities, as well.”
Through borrowing from a local bank yet to be determined, Ehlers is assuming a rate of 5.5 percent.
“I think that’s a fair assumption right now, for rates,’ said Peter Meidal, Ehlers.
That, of course, is dependent on the proposals banks submit.
For a portion of the project, Ehlers is counting on a sanitary advance, with the intent that the money be paid back, as the TID grows, through development, with the same going for the water fund. That way, it will ease payments for the village and capitalize the interest for a couple years.
“There will be another step at a later time, and that will be permanent financing,” said Reilly.
The utilities can, for a short time, carry the cost. “This project’s going to happen, no matter what,” said Reilly. “We want to put you in a position to take care of things now, but then preserve your ability for long-term financing in the future.”
The strategy sounded good to the village board, but president Randy Kuehni did ask if there are state funds they could tap from. Reilly shared that there are funds for utilities projects, but the County Hwy. X project doesn’t fit the model. There’s also a state revolving loan program, with anything but low interest.
“Bank financing makes the most sense, in this case,” said Reilly.
