The village of Brookfield will issue roughly $7.2 million in bonds at the end of the month, representing the second installment of proceeds related to the 2016 street improvement program referendum.
Doug Cooper, the village’s finance director, said the village hopes to sell the bonds the week of Aug. 27. The village board unanimously passed the ordinance green-lighting the bond issue on July 23.
When the bonds are sold, Brookfield will have issued about $16 million of the $22 million sought for street improvements in the referendum. The village will conduct a third and final bond sale for the remainder of the proceeds in 2020.
Taxpayers will see the impact of the upcoming bond sale on the second installment of their 2019 tax bills, said Cooper.
“The first installment won’t reflect it at all,” Cooper said.
The bond issuance had to wait until late August, because the village’s bond counsel recommended that Brookfield’s 2017 financial audit be completed before seeking a bond rating prior.
The good news, said Cooper, was that despite a difficult year financially for the village, its bond rating held fast at A2.
“That was great news given the financial results of 2017,” Cooper said.
Moody’s, the bond rating agency, called out the village’s consistent funding for its future police and fire pension obligations and an upward trend in equalized assessed valuation of village properties as reasons for maintaining the village bond rating.
When Brookfield went to issue the first round of bonds for street improvements in 2016, Moody’s downgraded the village’s rating from A1 to A2, listing debt and pension obligations as reasons for doing so.
At the time, Moody’s also noted that Brookfield’s rating could improve with an appreciation of its tax base and a moderation of its pension liabilities.
Line of credit comes in handy
On July 23, the Brookfield Village Board also voted unanimously to establish a $1.2 million line of credit with First National Bank of Brookfield, a financial lifeline that’s already come in handy.
According to Cooper, the village by mid-summer had expended all but $600,000 of its initial $9 million bond issue for street improvements, and that remaining $600,000 was in a certificate of deposit that matures at the end of August.
On July 27, Brookfield used its new line of credit to make a roughly $1 million payment to Triggi Construction, the firm awarded the 2018 street improvement contract.
According to Cooper, the village will repay the entire amount borrowed from the line of credit the day after the new bonds are issued. The interest will amount to only about $200, Cooper said.
The next time the village may draw down on the line of credit could be soon after repaying it. Brookfield won grant funding for a variety of improvements in and around the Prairie Avenue train station. Work has already started on those improvements, but the village won’t receive the grant funding – roughly $185,000 – until after construction is completed.