SHERWOOD — Village officials say recent debt restructuring will offset most of their investment losses as they budget for 2010.

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Trustees reviewed the budget proposal this week, which calls for a 3 percent increase in the property tax levy and a 2.5 percent increase in overall spending. The budget will go to a public hearing on Nov. 9.

The levy increase percentage matches the state mandated limit.

It's a tight budget, though the village isn't in a difficult position, Administrator Randy Friday said.

"We're staying within our means," Friday said. "It's necessities versus niceties. That's for certain."

Smart handling of debt was one key to staving off difficult decisions for next year, Friday said.

The village paid off debts this year from its debt service fund and combined another $1.47 million in debts under one, new issuance to take advantage of better interest rates. The moves are expected to save the village more than $46,000 in payments next year.

The savings come as the village faces a $59,000 decline in investment interest revenue.

State aids are also playing into the village's favor next year with shared revenue and transportation aids each projected to raise by more than $15,000.

Increases in spending aren't expected to equate to increases in the village portion of the tax bill.

The village saw a 1.8 percent growth in its equalized valuation last year based on $4.3 million in new construction. The village's assessed tax rate is expected to fall to its lowest level since 1993.

Under the proposal, the rate would fall 44 cents from 2009 to $5.45 per $1,000 of assessed value.

While operational spending will see little change next year, projects will continue to move forward.

Work on the pipeline project that will connect Sherwood to Appleton's water supply remains on pace for completion by July 1. That project is largely being funded through federal stimulus money. The budget proposal calls for $1.6 million in borrowing during the next two years to pay for vehicle replacement and projects including downtown redevelopment.