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HomeMy WebLinkAboutFC Minutes 03/22/2018Mount ProStxvx FINANCE COMMITTEE Minutes of the Meeting March 22, 2018 Village Hall — 1St Floor Community Center 50 South Emerson CALL TO ORDER — ROLL CALL The meeting was called to order at 7:00 p.m. by Chairman John Kellerhals. Commissioners present included Pam Bazan, Trisha Chokshi, Vince Grochocinski, Thomas Pekras and Mary Rath (left meeting at 8:21 p.m.). Staff present included Finance Director David Erb and Administrative Analyst Alexander Bertolucci. II. APPROVAL MINUTES a. Approval of Finance Commission Meeting Minutes of February 22, 2018. Motion by Commissioner Pekras, second by Commissioner Rath to approve the minutes. Chairman Kellerhals called a voice vote and the minutes were approved unanimously. III. CITIZENS TO BE HEARD None. IV. OLD BUSINESS a. Public Safety Building Discussion Finance Director David Erb made a presentation on property acquisition, 799 Biermann Court, for the purpose of a police headquarters. The Space Needs Study completed by FGM Architects presented concerns with the current facility that include: lack of space due to changes in police operations, lack of parking and $1.3 million of expenses budgeted for maintenance to the existing building including $700K in repairs to the police parking deck. He explained several options were evaluated and 799 Biermann Ct. satisfies all the specifications identified in the Space Needs Study. The adaptive reuse of 799 Biermann Ct results in a construction cost of $22 million which is an anticipated savings of $10 million. Mr. Erb reviewed the financial plan. The goal was to develop a funding structure to ensure debt portion of the tax levy plan would not increase. He explained the plan includes refinancing of existing debt (Series 2009B and 2009C bonds), use of capitalized interest (36 months), planned drawdown of existing reserves and debt issuance. He shared a police headquarters cost comparison between new construction and adaptive reuse of 799 Biermann Ct. He also introduced the Mount Prospect Fire Department Station Location Study by Illinois Fire Chiefs Association. The study proposes relocating the Fire Station 13 north to 111 E. Rand based on call volume data from the past five years. Mr. Erb also provided a cost comparison between constructing a new Fire Station 13 and adaptive reuse of 111 E. Rand. Mr. Erb stated 799 Biermann Ct. is an opportunity to address a critical limitation of the existing police station; adaptive re -use provides significant savings compared to new construction, and is an ideal fit for a modern police headquarters. The Village Board Finance Commission Page 1 of 3 3/22/18 approved a resolution in support of the contract to purchase 799 Biermann Ct. which includes a 45 day diligence period. He also shared key upcoming dates: March 27 — Public Open House at 799 Biermann Ct. April 3 — Village Board Meeting — Financing Plan presented for approval. April 10 — Committee of the Whole — Resident Feedback, RFP results discussion April 17 — Second reading of a Financing Plan April 18 — Bond Sale. The following responses from staff were provided to questions from the Finance Commission: • Fire Station 13/Fire Administration does not need the 63,000 square feet remaining if police headquarters was to relocate from the Public Safety Building. • Returning the Public Safety Building parcel to the tax rolls would help generate increment early during the Tax Increment Financing (TIF) district term. The new increment would subsidize other TIF projects. • Debt is often issued in a new TIF district as seed money to support projects like recently approved 20 West (20 W. Northwest Hwy) and Park Terrace (15 — 19 N. Elmhurst Ave). • TIF funds may be used for relocation for TIF related development. • The 2016 reassessment has already generated increment within the TIF district from increases in assessed value. Mr. Erb reviewed three exhibits summarizing existing and proposed general obligation bonds provided by PMA Securities, Inc. The debt in the analysis is not self-supporting debt. He explained that the Village anticipates a significant amount of debt falling off in 2023. Debt -to -revenue percentage, debt service -to -expenditures percentage and debt -to -market value ratio all increase and return to current or better ratings by end of fiscal year 2027 according to S&P Rating Criteria. While the Village's Debt Policy Guidelines metrics return to guideline ratings by end of fiscal year 2024. The following responses from staff were provided to questions from the Finance Commission: • Capitalized interest uses proceeds of bond issue to pay interest. • All debt includes the library's debt. The library does not have authority to issue debt. The library does have full authority over its tax levy and budget. • Staff reviewed the library's capital needs and if debt issuance was anticipated. • Divide debt into two bond issuances (Oct. 2018 and May 2019) due to the timing of when funds are needed and to minimize interest costs. • The ratios would be better if the library debt was removed; however, the library cannot be removed since per state statue it is considered one. • The Village has implemented these borrowing practices in the past. • The $1.3 million in capital improvements cued for the current Public Safety Building would be used for other capital projects. Finance Commission Page 2 of 3 3/22/18 V. NEW BUSINESS None. VI. ANY OTHER BUSINESS None. VII. CHAIRMAN'S REPORT None. VIII. FINANCE DIRECTOR'S REPORT None. IX. NEXT MEETING Chairman Kellerhals entertained a motion to meet on Thursday, April 26 if the planned Joint Village Board & Finance Commission 1 st quarter budget review is cancelled. Motion made by Commissioner Chokshi seconded by Commissioner Bazan. Chairman Kellerhals called a voice vote and the action was approved unanimously. X. ADJOURNMENT Motion made by Commissioner Bazan seconded by Commissioner Pekras. The meeting adjourned at 9:50 p.m. Alexander Bertolucci Administrative Analyst Finance Commission Page 3 of 3 3/22/18