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Follow-Up Report on Refined Capital Financing Scenarios and Capital Funding Framework
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Introduction
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This presentation from Stifel Public Finance and Speer Financial reviews updated financing scenarios for major Board-priority capital projects and seeks Finance Committee direction on a reduced-scope capital funding framework reflecting feedback from the June 18 meeting.
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Recommended Action
Staff is seeking Finance Committee direction on whether to advance the reduced-scope financing framework to the Village Board, including the 2026 issuance schedule and the preferred debt-service structure for modeled 2027-2030 issuances. Final approval of each bond issuance and project appropriation would remain subject to separate Village Board action.
• Changes from the previous presentation shared with the Finance Committee include:
• Reduced bond issuance to fund initial phase activities of the Percy Julian Chicago Avenue Streetscape.
• Reduced the financing scope for the Bike Plan and Vision Zero Plan. The updated model includes financing only for the next five years of implementation for the 30-year Bike Plan and the 10-year Vision Zero Plan, rather than attempting to finance the full long-term plans at this stage.
• Reclassified Bike Plan and Vision Zero-related costs that are already embedded within specific streetscape projects. These costs are now reflected within the respective streetscape project budgets instead of being shown separately under the broader Bike Plan or Vision Zero Plan, which helps avoid duplicating or overstating total project costs.
• Village Hall remodel costs remain included as a planning placeholder in the proposed 2028 GO bond offering; however, the final scope, cost, timing, and potential phasing of that project remain under review and may require future revisions to the financing model.
Prior Board Action
The Board has taken the following prior actions:
• May 19, 2026 - The Board adopted RES 26-211 declaring the Village’s official intent to reimburse certain streetscape and infrastructure improvement expenditures from proceeds of future debt obligation.
• March 5, 2026 - Following the approval of ORD 25-212, the Village issued General Obligation Refunding Bonds, Series 2026, dated March 5, 2026, totaling $54,039,572.23.
• February 2026 - The Board passed RES 26-150 Approving A Purchase Price Agreement with Victor Stanley, LLC., for the Purchase of Street Furniture for the Oak Park Avenue Streetscape Project in an Amount Not-to-Exceed $73,111, Authorizing its Execution, and Waiving the Village's Bid Process for the Agreement.
• December 9, 2025 - The Board approved ORD 25-220 adopting the Village’s FY26 operating and capital budget, which includes a total of $6,000,000 budgeted bond proceed revenues in the Water & Sewer Fund (5040) and $14,000,000 budgeted bond proceed revenues in the General Improvement Fund (3095), totaling $20,000,000.
• November 11, 2025 - The Board adopted RES 25-301 Approving a Contract with A Lamp Concrete Contractors, Inc. for Project 25-20, Oak Park Avenue Streetscape Improvements in an Amount Not-to-Exceed Amount $18,464,984 and Authorizing its Execution.
• December 2, 2025 - The Board approved ORD 25-212 authorizing debt issuance for new money and refunding purposes not to exceed $75,000,000, with $55,000,000 allocated for refinancing and $20,000,000 for the Oak Park Streetscape Project.
Background
Each of the capital projects included in this presentation aligns with Board goals for 2026-2027 (as referenced in the June 18th presentation). These priorities and project plans were developed over numerous Board meetings and department sessions and informed by community input at numerous points. This presentation outlines two potential funding plans for completing these capital projects while seeking to maintain the Village’s AA bond rating, manage taxpayer impacts, and preserve reasonable financial flexibility for future capital and operating needs. Staff is requesting Finance Committee direction on the preferred approach so that a formal financing plan can be advanced to the Village Board within the required implementation timeline.
Timing Considerations
The first financing included in the proposed plan is the Series 2026 General Obligation and Water/Sewer bond issuance, currently anticipated to close on or around October 12, 2026. The Village Board has already declared its intent under RES 26-211 to reimburse eligible expenditures associated with the Oak Park Avenue Streetscape and related infrastructure improvements from future debt proceeds.
To maintain the proposed issuance schedule, staff and the Village’s financial advisors will need timely direction regarding the financing structure, bond sizing, repayment approach, and allocation of proceeds. Following Finance Committee review, staff anticipates returning to the Village Board for direction and any necessary authorizing actions no later than July 21, 2026.
Subsequent issuances are currently modeled for May 2027 and November 2028. Both issuances would require additional Finance Committee review, Village Board authorization, and confirmation of project costs, schedules, market conditions, and available funding sources.
Delaying direction on the overall financing framework could affect the timing of the 2026 issuance, the Village’s ability to reimburse eligible project expenditures, project schedules, and future borrowing costs. Further delay would also expose the Village to unnecessary interest rate risk in a rising interest rate environment.
Financial Impact
The proposed financing plan would increase Oak Park’s debt levels through 2058, funding several capital projects with long-term value for residents. These projects include the Oak Park Avenue Streetscape, Police Station, Percy Julian Chicago Avenue Streetscape, and Village Hall remodel (reflecting in-progress project cost estimates).
Compared to the previous report reviewed by the Finance Committee, this updated financing approach reduces modeled project costs from $178,860,000 to $128,765,520. This reduction reflects a lower Police Station cost estimate and narrower financing scope for the Bike Plan and Vision Zero Plan, limiting bond-funded activity to the next five years of implementation, as well as the reclassification of streetscape-related Bike Plan and Vision Zero costs into the respective streetscape project budgets. Total modeled debt service is likewise reduced significantly, by roughly $95 million in both scenarios.
Operations Impact
Finance Department staff began work with Stifel and Speer on this presentation in March, 2026. Department staff have spent, on average, 5-10 hours on a weekly basis to support preparation for this presentation over the last 3 months.
The financing plan itself would not immediately increase ongoing departmental operating expenditures; however, the capital projects funded through the plan would require substantial multiyear coordination among Finance, Public Works, Police, Development Services, the Village Manager’s Office, and external consultants.
DEI Impact
The financing structure itself does not directly determine the distributional impact of the underlying capital projects. However, the location, design, accessibility, and implementation of the funded projects may affect residents, businesses, employees, and users differently. Equity and accessibility considerations will continue to be evaluated through the planning, design, community engagement, and implementation processes for each individual project.
Community Input
The initial financing plan was subject to public comment at the June 18th Finance Committee meeting. The capital projects that would be funded by these proposed bond offerings have each been subject to significant additional public input.
Staff Recommendation
Finance recommends that the Finance Committee review the two financing scenarios for series 2027 and 2028 bond offerings and provide direction on the preferred debt service structuring and financing framework to bring for full Board review. Both scenarios reflect the reduced spending and more limited portfolio of covered projects discussed in the June 18th Finance Committee, limiting scope to activities that would be funded in the next three years.
Because the initial 2026 GO issuance is currently anticipated for October 2026, which is intended to fund activities previously approved by the Board, Finance recommends that the Committee provide direction at this meeting to proceed to broader Board review. Prolonged deferral may affect the financing and project implementation schedules.
Staff is not requesting final approval of all future debt issuances at this meeting. Rather, staff is seeking Committee direction on the reduced-scope financing framework so the 2026 issuance can proceed on schedule and so future 2027-2030 issuances can be refined through subsequent Committee and Board review as project costs, timing, and market conditions become clearer.
FUNDING SCENARIO 1: Base Case
Advantages:
• More consistent debt service costs, particularly from 2033 - 2058, which make for more uniform taxpayer costs spread out more evenly over the course of debt payments.
• Consistent payments make for easier planning and budgeting in future years.
Disadvantages:
• Total levied debt service costs of $251,953,323, which are higher than the Alternative Case scenario.
• Less of a ramp-down in debt service over time, which may provide less future flexibility for additional capital borrowing.
FUNDING SCENARIO 2: Alternate Case
Advantages:
• Lower total levied debt service than the Base Case, at $232,167,654
• This structure may be viewed more favorably from a long-term debt capacity perspective because it retires principal faster and reduces total interest costs.
Disadvantages:
• Requires higher near-term debt-service payments, which places more of the cost on current taxpayers for assets that will provide benefits over several decades.
• Ramp-down of payments can be more challenging for taxpayers to anticipate and budget as part of their household costs.
Alternatives
Finance previously presented a larger set of bond offerings to the Finance Committee, including General Obligation issuances in 2029 and 2030 that would have funded a broader and longer-term portfolio of Bike Plan and Vision Zero activities. In response to Finance Committee feedback, the updated model narrows the financing scope to near-term implementation needs, limits Bike Plan and Vision Zero financing to the next five years, and incorporates streetscape-related Bike Plan and Vision Zero improvements within the applicable streetscape project budgets.
Advantages:
• Funds a more complete portfolio of capital projects, including the Bike Plan and Vision Zero projects.
Disadvantages:
• Increased debt service costs for the Village and its taxpayer residents
• Commits funding to longer-term projects, whose multi-phase activities do not fully align with nearer-term bond release schedules
Anticipated Future Actions
The Village Board will be asked to provide direction on the overall capital financing plan and approve any ordinances, resolutions, contracts, appropriations, or other actions required for the Series 2026 issuance. Each subsequent bond issuance would return separately for Committee review and Board authorization.
Prepared By: Finance, Louis Hall-Makarewicz, Deputy CFO; James Karsten, Management Analyst
Reviewed By: Finance, Kevin Bueso, CFO
Approved By: Kevin J. Jackson, Village Manager
Attachment(s):
1. Presentation