Funds will be used for utility projects
By Dave Fidlin
Correspondent
Interest rates came in higher than anticipated, but a plan to sell bonds to fund utility-related projects has moved forward in Union Grove.
The Village Board on May 9 voted in favor of the sale of $5.88 million in combined utility revenue bonds at an initial interest rate of 3%.
The village’s bond consultant, who announced the findings at the recent board meeting, indicated the interest rate came in higher than anticipated, but still was considered a good figure, given historical performance before COVID-19 set figures to record lows.
The board in its motion adopted a resolution that formalizes the sale. A whereas clause states the process will be benefit the village’s waterworks system, stormwater system and sewerage system.
The three utilities, as stated in the resolution, “are operated for public purposes as separate public utilities, by the village and which are hereby combined for the purposes of this financing.”
During deliberations, village staffers and board members weighed in on the bond sale figures.
With federal pandemic relief funds and grants on the horizon, Public Works Director Rick Piette inquired about the bonds at a time when they came in higher than anticipated.
“Hopefully we’re not taking out bonds at the worst time to buy them,” Piette said.
While there are a bevy of unknowns in the future — particularly as federal officials have indicated multiple rate hikes occurring this year — the 3% figure still was viewed largely as a positive as board members hashed over the data before them.
Village President Steve Wicklund said head municipal staffers will hash over specific project lists to determine how best to use the sale proceeds.
“Rick and (Interim Village Administrator) Kerry (Bennett) will have a conversation and divulge all of the prices,” Wicklund said. “Here’s what we’re doing, this is what our plan is.”
Union Grove’s utility needs have been discussed at recent meetings.
Earlier this spring, the village’s financial advisor strongly advised Union Grove officials increase water utility rates to help offset rising costs by as much as 42.5% in the road ahead.
“The water utility is the one we’re most focused on, from a struggling standpoint,” Jon Cameron, senior municipal advisor with Ehlers, told village officials in February. “Sewer and stormwater are in much better positions.”
Ehlers has recommended the village file appropriate paperwork with the state-run Public Service Commission for the authority to raise rates.
Based on preliminary number crunching, water rates could increase from their current rate of $4.14 per 1,000 gallons of use to $5.90 per 1,000 gallons.
The figures represent a potential quarterly service charge for the average household within the village from $31.83 to $45.36, accounting for the 42.5% increase for the water portion of the utility bill or a 17% increase in the total bill (with the other utilities in the mix).
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