Sherwood board approves $2.75 million borrowing, forms authority to help finance local projects

The Village of Sherwood approved a plan in spring 2004 to borrow up to $2.75 million and created a Community Development Authority to enable public financing of local development projects. The Village Board voted to sell $2,750,000 in general obligation promissory notes in May and authorized the CDA in April after presentations by the village financial adviser and bond counsel.

The board’s financial consultant, David Wagner, told trustees the preliminary debt plan could fund about $1.47 million of stormwater facilities and assumes a mix of special assessments, developer contributions and impact fees. Wagner said the initial 2004 borrowing was sized to provide flexibility through 2014 if needed. “Borrowing an additional $650,000 would increase the tax rate by $0.25 per $1,000 in 2005 and 2006,” Wagner said when summarizing scenarios discussed with the board.

Why it matters: The borrowing and CDA authority are intended to accelerate stormwater and sewer projects and to provide a mechanism for public support of private redevelopment when the board determines it is appropriate. Trustees identified water-supply work, lift-station upgrades and stormwater improvements as priorities tied to the TIF district’s capital program.

How the board decided: On April 12 the board approved initial resolutions authorizing sale of promissory notes and a resolution creating a Community Development Authority. On May 10 the board adopted Resolution 2004-16 and awarded the $2.75 million note sale to the low bidder. Trustees then moved to engage Foley & Lardner as bond counsel to guide CDA formation and any developer agreements related to TIF-assisted projects.

Debate and safeguards: Several trustees pressed for protections on any funding tied to private projects. Beach asked whether costs the village incurs to create a CDA could be added to the loan; Wagner said such costs and security terms would be addressed in developer agreements and could require guarantees or repayment when property changes hands. Benjamin Levin, bond counsel to the village’s counsel firm, described a typical CDA structure that would require an ordinance establishing powers and by-laws and noted it could be dissolved if unused.

Next steps: The board directed staff and bond counsel to finalize documents for CDA formation and to return with specific development agreements for any project the board decides to support. The financing proceeds were earmarked to begin design and construction on prioritized stormwater and utility projects.