With a proposed 2006-07 village budget heavy on capital improvement projects, the Brookfield Village Board is poised to approve two separate bond issues totaling up to $10 million.
At the board’s Committee of the Whole session on March 27, the trustees heard a presentation from the village’s financial consultant, Philip McKenna, outlining a $5 million water/sewer bond issue to fund ongoing replacement of the village’s aging 4-inch water mains and a second bond issue of up to $5 million to fund street improvements.
The debt service on both bond issues would not be funded by an increase in property taxes. Rather, both are considered “alternate revenue” bonds. The water/sewer bond issue would be repaid out of proceeds from money in the village’s water/sewer fund. The debt service on the street bonds would be paid from money collected through a 1-percent sales tax voters approved March 21.
While McKenna said the board could authorize a street bond issue of up to $5 million by pledging all of the money collected by the new sales tax, he recommended funneling some of that sales tax revenue into the village’s infrastructure fund. Doing so would allow the village to amass a reserve to address unforeseen emergency infrastructure projects.
As a result, the street bond issue likely won’t exceed much more than $4 million.
Village trustees are expected to vote on approving the bond issue at their next regularly scheduled meeting on April 10. Before the bonds are sold, however, the village must wait 30 days.
During that time the bond issue could be subject to citizen objections to what is known as a “back door” referendum. If a petition signed by 7.5 percent of registered Brookfield voters is presented to the village clerk during that 30-day period, the bond issue would be put to a referendum.
The last two times the village board sought to issue alternate revenue bonds then-Village President Bill Russ ran into that very obstacle. In 2002, Russ and a VIP Party-controlled village board sought to issue $12 million in bonds, which would have funded both street improvements and paid debt service for residents in Brookfield’s Special Service Areas. A petition drive headed by political rivals in the PEP Party forced that bond issue to a referendum, and voters later turned it down.
In 2003, Russ tried again, this time seeking a $6.3 million bond issue for street improvements and another $3.8 million for SSA debt repayment. Later, the board issued debt certificates for the road work, but another petition blocked the SSA debt service bonds.
But Russ, who is the VIP Party president, said last week that it’s not his intention to block the currently proposed bond issue. The principal difference is that the current bond issue does not include debt service for taxpayers in the village’s SSAs.
“In a way I’m flattered, because this was the way to go back in 2002,” Russ said. “I was right. Now here we are four years later, and they’re doing what I was doing. If they would have cooperated four years ago, we could have gotten a lot more done. I’m not going to be a jerk and stop them.”
In a follow-up e-mail, Russ called the bonds themselves a back-door referendum, called his PEP rivals “political hypocrites” and asked “what about the people in the SSAs?” He also stated that if Brookfield defaults on the bond payments, the obligation for the debt service would fall to taxpayers.
In his presentation to the board on March 27, McKenna said it was unlikely the village would not be able to handle the debt service for the new bond issue. For example, there is enough cash in the water/sewer fund right now to fund the full $5 million bond issue. With respect to the bond issue for streets, McKenna said that Brookfield would be able to service the debt, even if the village collects just 60 percent of the amount it expects to receive from sales taxes.
If the bond issue experiences smooth sailing, the village could have the money in hand by the beginning of June. Plans call for approximately $1.38 million in street improvements this summer, including Elm and Park avenues between Southview Avenue and Ogden Avenue as well as Oak and Sunnyside avenues between Burlington Avenue and Ogden Avenue.