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Review of Capital Financing Scenarios and Direction on a Comprehensive Capital Funding Plan
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Introduction
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This is a presentation from Stifel Public Finance and Speer Financial to review two financing scenarios for major Board-priority capital projects, assessing impacts on debt service, taxpayers, financial flexibility, and the Village’s credit profile. The presentation also seeks the Finance Committee's direction to advance a preferred financing plan for timely Village Board consideration.
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Recommended Action
Review the two capital financing scenarios and provide direction to staff regarding:
1. The preferred debt-service structure;
2. The proposed timing and sequencing of the capital projects and related bond issuances;
3. Whether the projects should continue to be evaluated as a comprehensive capital portfolio; and
4. Any financial parameters or additional analysis the Committee would likely be incorporated before the financing plan is presented to the Village Board.
Staff is seeking sufficient direction from the Finance Committee to advance a recommended financing plan for Village Board consideration. Final authorization of any bond issuance, project funding, or related appropriation would remain subject to separate Village Board action.
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 2024 - 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 is aligned with Board goals for 2026-2027 (referenced below). 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.
COMMUNITY HEALTH & SAFETY
Priority 3: Provide for Safe Mobility
• 3. A. Implement the Village’s adopted Vision Zero in accordance with the Village-approved Capital Improvement Program in 2026 and 2027.
Priority 4: Ensure Healthy Work Environments for Village Workers
• 4. A. Advance the Oak Park Municipal Campus initiative by progressing through the full design phase and preparing for the construction of the new Village Police Station beginning in 2027.
• 4. C. Incorporate recommendations for additional facility improvements and project priorities into future Capital Improvement Program (CIP) and annual budget documents, with implementation beginning in 2026.
VIBRANT, DIVERSE, CONNECTED NEIGHBORHOODS
Priority 2: Support Strategies Related to Parking, Mobility, and Sustainable Transportation
• 2.B. Implement the Village’s adopted 2025 Updated Bike Plan in accordance with the approved Capital Improvement Plan for 2026 and 2027
Priority 4: Enhance Relationship Between Neighborhoods and Business Districts through Infrastructure and Support
• 4.B. Complete design and begin construction of the first phase of the Percy Julian Streetscape along Chicago Ave.
• 4.C. Complete the Oak Park Avenue Streetscape Project
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 August 31, 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, November 2028, September 2029, and September 2030. Each issuance 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.
Financial Impact
The proposed financing plan would have a significant long-term budget and taxpayer impact. Issuing all five modeled bond series would provide funding for major capital assets with long-term community value while extending additional debt-service obligations through 2058.
Combined with the Village’s existing debt obligations, the proposed issuances would result in total annual debt service generally averaging approximately $10 million to $11 million over the next three decades, with higher annual payments during certain years depending on the scenario selected. The two scenarios primarily differ in the timing of principal repayment, total interest cost, peak annual debt service, taxpayer impact, and the amount of future financial flexibility retained by the Village.
Finance Committee direction will help determine the appropriate balance between affordability, intergenerational equity, total borrowing cost, near-term taxpayer impact, and long-term capacity for future capital needs. Final bond sizing and repayment schedules would remain subject to updated project costs, market conditions, legal review, credit considerations, and Village Board authorization.
Operations Impact
Finance Department staff began work with Stifel and Speer on this presentation in March, 2026. Department staff has 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.
Project implementation would require continued oversight of design, procurement, construction, cash flow, grant and bond eligibility, expenditure reimbursement, project accounting, and compliance with bond and tax requirements. Public Works would serve as the primary project-management department, with Finance responsible for debt issuance, financial reporting, proceeds management, and continuing disclosure obligations.
Certain completed projects may also create future operating, maintenance, technology, utilities, insurance, and staffing costs. Those impacts will need to be identified and incorporated into future operating budgets as project designs and implementation plans are finalized.
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
There has been no community input given in relation to this item.
Although the proposed bond series options were developed without public input, they are intended to fund a series of capital projects that received extensive public input.
Staff Recommendation
Staff recommends that the Finance Committee review the two financing scenarios and provide direction on the preferred debt-service structure and overall financing framework. Both scenarios would provide sufficient proceeds to advance the identified Board-priority capital projects.
The most immediate action requested of the Board is to approve the ordinance to refund the Oak Park Streetscape project, which is currently in progress and on track to be completed by November 2026. This Streetscape project was previously approved by the Board and is distinct from the financing plan contained in today’s presentation.
Staff is additionally seeking direction that can be used to develop a recommended financing plan for additional projects, confirm the sequence and timing of the projects, and prepare the first required actions for Village Board consideration.
Because the initial issuance is currently anticipated for August 2026, staff recommends that the Committee provide direction at this meeting or, if additional analysis is required, identify the specific information needed to conclude its review at the next available meeting. Prolonged deferral may affect the financing and project implementation schedules.
FUNDING SCENARIO 1
Advantages:
• Lower annual debt payments, capped at or below $14 million for the duration of payments
• Results in a lower per capita tax burden to residents in peak years
• Achieves more consistent annual payments with less year-to-year variation
Disadvantages:
• Maintains repayments at a higher amount for a longer period (through 2058)
• Maintains elevated debt-service obligations for a longer period, which may reduce capacity for future borrowing or other long-term financial commitments.
FUNDING SCENARIO 2
Advantages:
• Retires principal more rapidly, reduces total interest costs, and restores future debt capacity sooner.
• Lowers total Debt Service by ~$20 million compared to Scenario 1
Disadvantages:
• Front-loads principal, leading to higher payments in peak years of 2033 - 2040
• Results in a higher tax burden on residents in peak repayment years
Alternatives
The financing scenarios assume that the identified projects will proceed as a comprehensive capital portfolio. The Finance Committee may instead recommend changes to the scope, timing, sequencing, or financing of individual projects.
Alternatives include:
1. Advancing all identified projects under one of the two financing scenarios;
2. Modifying the timing or sequence of one or more projects to reduce peak debt service;
3. Reducing the amount borrowed by identifying cash, grant, enterprise-fund, or other eligible funding sources;
4. Advancing only those projects with immediate contractual, operational, reimbursement, or Board-directed deadlines; or
5. Requesting targeted additional analysis before making a recommendation.
Any change to the project portfolio or issuance schedule may affect construction timing, escalation costs, reimbursement timing, borrowing costs, and the Village’s ability to coordinate the projects as currently planned.
Anticipated Future Actions
Following Finance Committee direction, staff and the Village’s financial advisors will refine the preferred financing scenario, update the issuance schedule and debt-service projections, and prepare a recommended financing plan for Village Board consideration.
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.
If the Committee determines that additional analysis is necessary before making a recommendation, staff requests that the Committee identify the specific information needed and continue the item to the next available meeting (July 2nd, 2026). Given the anticipated August 2026 financing schedule, the Committee and Board will need to conclude their initial review within a limited timeframe to avoid affecting the proposed issuance and project schedules.
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. Stifel & Speer - Village of Oak Park 6.18.26 FC Meeting
2. Stifel & Speer - Financing Case Comparison Handout, 06.18.2026