In 2018, the Village of Oostburg welcomed a new company, Masters Gallery Foods, which would not only be a noteworthy addition to the sewer system, but potentially provide significant increment within a Tax Increment District (TID). The Village was also planning a significant upgrade to its Wastewater Treatment facility, addressing treatment needs and accounting for additional capacity in a newly created TIF District. Obstacles the Village faced in achieving their goals started with funding the treatment plant upgrades. Sewer rates would need to increase significantly to issue the debt in the form of a Clean Water Fund Loan for the project. To reduce this financial stress, use of TIF revenues to offset a portion of the debt was planned. The necessary rate increases to issue the loan would need additional time to phase in and for the TIF District development to materialize and assist with repayment. Timing this would be the second obstacle. While the Village needed the additional time, it also needed to begin project construction, and did not want to lose out on principal forgiveness (grant) money as part of the Clean Water Fund Loan program further complicating the issue.
Village officials engaged Ehlers for debt issuance & management, financial management planning and economic development & redevelopment services. Several financing options were presented with both advantages and disadvantages along with a multi-year Sewer Rate Study. Collaboration between the Village, Ehlers and the state determined a delayed schedule in the funding program allowed the Village to take out interim financing for the project and complete a phased-in rate approach. This allowed time for the TID revenue and Masters Gallery sewer flows to begin generating revenue, all while preserving the ability to obtain principal forgiveness.
The Village obtained interim financing to fund the treatment plant upgrades and complete the first two steps in the phased-in Rate Study Approach. They submitted a Clean Water Fund Loan application, which was accepted by the WI Department of Natural Resources. The Village planned to implement the final step rate increase in 2020 and take out the interim financing with a Clean Water Fund Loan at that time.