Board hears explanation of Moody's downgrade after $17M borrowing; staff map options to rebuild reserves

Trustees pressed staff for answers after the village's general obligation rating fell a notch from Aa2 to Aa3 following a roughly $17 million borrowing.

Finance Director Matthew explained Moody's rationale: decreased days cash on hand and higher leverage following recent debt issuance. "Moody's cited a decline in fund balance and increased leverage relative to peers," he said, explaining the water utility's rating remained at Aa3 and the GO rating was reduced to Aa3.

Matthew and Administrator Reynolds outlined several options to rebuild reserves and reduce leverage: shifting the public fire hydrant fee from the general fund to the water utility (which would require PSC approval and reallocation), identifying levy capacity (estimated $200$250k) to leave revenues unbudgeted and let them flow to reserves, and pursuing a full PSC water rate case in 2027 to increase utility revenue; staff also noted the village could consider selling surplus property to replenish reserves but warned of trade-offs.

Trustees debated fairness and tax impacts of shifting fees or raising rates and asked staff to bring specific options to the appropriate committees (Utility Advisory, GGF) for firm recommendations. Staff said the $17M note sold at a true interest rate of about 3.73%, slightly better than projections, and that the downgrade did not materially impair that sale. The board requested further work on a multi-option plan to restore reserves and limit further GO borrowing.