HomeMy WebLinkAbout7. MANAGERS REPORT 12/17/02Village of Mount Prospect
Community Development Department
MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
MICHAEL JANONIS, VILLAGE MANAGER
WILLIAM J. COONEY, JR., DIRECTOR OF COMMUNITY
DECEMBER 10, 2002
ELEVATOR INSPECTION SERVICES
As you are aware, the Village of Mount Prospect utilizes a private consultant, Thompson Elevator Inspection
Service, Inc., to complete bi-annual inspections of all elevators/escalators within the Village. Although the
Village has been pleased with the services provided by Thompson, Inc., the Community Development
Department recently distributed an RFP (see attached copy) for performing elevator/escalator inspections for the
Village in 2003.
In distributing the RFP, Staff discovered there are a limited number of companies that perform elevator/escalator
inspections in the Chicago suburbs. As a result the Village received only two responses to the RFP, one from
Thompson, Inc. and the othei' from Elevator Inspection Services (see attached copies of both submittals). In
surveying other communities we found that Thompson, Inc. performs inspection services for the majority of the
northwest suburbs (including Arlington Heights, Des Plaines and Elk Grove) and Elevator Inspection Services
performs inspection services for primarily western suburbs (including Downers Grove, Naperville and Wheaton).
The basic elements of two proposals the Village received are outlined below:
Elevator Inspection Services: The fee for all bi-annual inspections (and any required re-inspections) would
be $28, and the fee for reviewing and inspecting any new elevator/escalator would be $75. Following
completion of the inspections the Village will be provided with an inspection report; however, Village staff
would prepare any correspondence to the property owner regarding the inspections.
Thompson Elevator Inspection Service, Inc.: The fee for all bi-annual inspections (and any required re-
inspections) would be $35 (the same amount that Thompson Inc. currently charges the Village), and $60 for
the review and inspection of any new elevator/escalator. 'Thompson would be responsible for all
correspondence with the property owners with regards to the elevator inspections (as is the current
arrangement between Thompson and the Village).
It is important to note that the costs associated with elevator/escalator inspections are passed on to the property
owners, thus the inspection services are not a direct cost to the Village. In reviewing the specific proposals, Staff
is concerned that although the fee charged by Elevator Inspection Services is less than that of Thompson, Inc.
($28 compared to $35), the actual costs to the Village would be greater due to staff being responsible for
preparing all correspondence to the owners. It should also be noted that Thompson, Inc. is located within the
Village of Mount Prospect and their inspectors are readily available in the case of an emergency. On several
occasions Thompson, Inc. has been able to provide an inspector under short notice to help address a building or
fire related issue. The Building Division has also indicated a great deal of satisfaction with regards to the service
levator Inspections & Fees
December 10, 2002
Page 2
provided by Thompson, Inc. over the past several years, and both the Village staff and Thompson Inc. are
comfortable with the existing elevator/escalator inspection process.
RECOMMENDATION
Based on the information outlined above, the Community Development Department recommends that Thompson
Elevator Inspection Service, Inc. be chosen to complete elevator/escalator inspection services for the Village in
2003. Please forward this memorandum and attachments to the Village Board for their review and consideration
at their December 17, 2002 meeting. Staff will be present to answer any questions related to this matter.
illage of Mount Prospect
Community Development Department
MEMORANDUM
MICHAEL E. JANONIS, VILLAGE MANAGER
WILLIAM Jo COONEY JR., DIRECTOR OF COMMUNI
TO:
FROM:
DATE:
DECEMBER 12, 2002
SUBJECT:
AWARD DESIGN CONTRACT FOR DOWNTOWN SIGNAGE PROGRAM
The Community Development Department recently sent out a Request For Proposals (RFP) to professional design
firms to establish an overall signage program for the downtown business district. The intent is to establish a
coordinated signage program for downtown retail establishments and for customer parking in the district. Staff is
requesting that the Village Board authorize entering into a contract with Graf/X Communications Group Inc. and
Wolff Clements & Associates, LTD in an amount not to exceed $20,000 to complete this project.
Although we did not generate a large response from this RFP (the Graf/X submittal was the only response), the
team of Graf/X and Wolff Clements has a proven track record with the Village and has demonstrated an ability to
work with Village staff and elected officials to accomplish our objectives. As you will recall, both of these
agencies were responsible for the Corridor Improvement designs that have proven to be very successful.
At the end of the study, the Village expects to receive prototype designs to use within the Central Business
District. Recognizing that an effective on-street parking management and public information system is important
for user friendly streetscape design, a well thought out sign and banner design that provides homogenous
communication, design and display of information within the streetseape will be the end goal.
The primary objectives of the Sign Design Program are to:
· Develop concept designs that focus on a coordinated, Village~wide theme, building on the established
Streetscape Program and Corridor Design Guidelines
· Complement existing and proposed uses and structures;
· Utilize design elements that work well for all seasons;
· Formulate creative design solutions,
The study will present design solutions for kiosks at main points in the downtown and signs that can be used for
identification of local businesses or other points of public interest. Of particular importance are designs for signs
that identify a specific use such as the Village Hall, Library, or a shopping district. Alternatives for signs for
commercial buildings with multiple tenants and directional signage for parking and other public uses will also be
included. Signs and banners will be designed to unify the existing streetscape program with proposed
improvements by using similar design elements.
If approved by the Village Board, the project will be paid for from account #5507703-540110, located on page
292 of the budget. Please forward this memorandum to the Village Board for their review and consideration at
their meeting on December 17, 2002. Staffwill be present at that meeting to further discuss this matter.
William~J:. Cooney Jr ~ '
Mount Prospect Public Works Department
INTEROFFICE MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
VILLAGE MANAGER, MICHAEL E. JANONIS
WATER/SEWER SUPERINTENDENT
DECEMBER 11, 2002
WATER SYSTEM VULNERABILITY ASSESSMENT (VA)
BACKGROUND
The United States Environmental Protection Agency (USEPA) has recently issued a directive requiring
all public water supplies, which serve more than 3,300 people, to complete a Vulnerability Assessment
(VA) of their water system. The following information provides some background and staffs'
recommendation for the best course of action.
In June of 2002, President Bush signed into law the Public Health and Bioterrorism Preparedness and
Response Act (H.R. 3448). The bill includes many significant items including new requirements intended
to better prepare water systems for any threats to their supply and improved emergency response
planning. Specifically the bill mandates that a vulnerability assessment must be completed on public
water supplies and a certification along with a written copy of the VA forwarded to USEPA.
A VA is defined by law to include, but not limited to, a threat analysis of pipes and constructed
conveyances; physical barriers; water collection, pretreatment, treatment, storage and distribution
facilities; electronic, computer or other automated systems; the use storage or handling of various
chemicals; and the operation and maintenance of a public water system. The dates of compliance are
based on the water system's size and the number of customers they serve. Mount Prospect is required to
comply with all elements of the VA by December 1, 2004.
DISCUSSION
Like us, the Northwest Suburban Municipal Joint Action Water Agency (NSMJAWA) is required to
complete a VA on their water system. Since NSMJAWA serves a greater population, over 100,000
people, it only has until March 31, 2003 to submit their VA to USEPA. To that end, NSMJAWA has
hired Bums & McDonnell to perform their VA and has requested our assistance and participation in the
project. Since Bums & McDonnell is doing NSMJAWA, staff felt we could gain some efficiencies if we
also utilized their expertise in completing our own VA.
A quote was solicited from Bums & McDonnell to complete the vulnerability assessment on Mount
Prospect's water system and prepare a report, which would then be sent to EPA. The following is a list of
the scope of services Bums & McDonnell will provide:
· Meet with staff and collect information, prioritize survey efforts, and organize data.
· Perform a "site characterization" on all water facilities, which consists of evaluating the site for
security, rating the potential threat for physical or operational vulnerabilities, and surveying the
age 2
Water System VA
December 11, 2002
overall location for any outstanding deficiencies, which could affect the safety of the water
supply. The focus of the effort will be to identify how malevolent acts might be conducted, such
as physical damage, chemical, biological and radiological contamination, cyber attacks on
process controls system, and interdependency disruptions (e.g. electrical, transportation, etc.).
Below is a listing of all the sites which will be surveyed:
Booster Station 4 Complete site characterization
Booster Station 5 Complete site characterization
Booster Station 11 Complete site characterization
Booster Station 16 Complete site characterization
Booster Station 17 Complete site characterization
Elevated Tank Complete site characterization
Interconnects (4) Complete site characterization
SCADA System
NSMJAWA (3)
Arlington Hts.
Des Haines
Illinois Am. Water (2)
MPPW
Busse Rd.
Lincoln St.
Highland
Complete site characterization
Site characterizations completed
under NSMJAWA project
· Submit for any grant money, which may become available for VA.
· Prepare a final Vulnerability Assessment report for submission to USEPA along with updating
our Emergency Response Plan. Certification letters will be submitted for both.
NSMJAWA has applied and received $115,000 in grant money to complete their VA. The amount of
grant money is also based on population served (in this case over 100,000). Smaller communities, like
Mount Prospect, may be eligible for grant money in the near future when it is made available by EPA.
Again, Buros & McDonnell has included in their scope of services to make application for this grant
money when it becomes available.
RECOMMENDATION
It is therefore my recommendation that we accept Bums & McDonnell's proposal to complete a
Vulnerability Assessment on our water supply for the price not to exceed $37,609.00. If you concur with
this recommendation I would respectfully request the Village Board to authorize the approval of the
contact at their next meeting on December 17, 2002. Funding for this project will be taken from existing
funds available in the 2002 Budget in account 6105510-680003 on page 258. Thank you for your
attention and we await your decision. ~')
R onovan
I concur:
Dlr~i~And er
~ fPu 1
C:ffle
TO:
FROM:
DATE:
SUBJECT:
Village of Mount Prospect
Mount Prospect, Illinois
INTEROFFICE MEMORANDUM
MICHAEL JANONIS, VILLAGE MANAGER
DIRECTOR OF FINANCE
DECEMBER 10, 2002
2003 PROPERTY AND CASUALTY INSURANCE
PURPOSE: To present a recommendation to purchase property and casualty insurance for
the policy year beginning January 1,2003 and ending December 31, 2003.
DISCUSSION: The Village's current property and casualty insurance policies ara set to expire
on December 31, 2002. In a stable insurance marketplace, we would have solicited quotes
from a variety of brokers for the Village's insurance program. However, given the Current
volatility in the insurance market the Village Board authorized staff to negotiate with the existing
brokers and insurance companies to secure coverage for 2003.
Following is a brief summary of our expiring insurance program, an analysis of the various
proposals received, and a summary of the insurance package being recommended by staff and
its consultant.
Expiring PrOgram
Attached is a current schedule of insurance in force, showing the type of coverage, the
carrier, policy limits, and the broker of record (Attachment 1).
The Village's buildings and vehiCles were insured this past year bY the Hartford Insurance
Company. The amOunt of COVerage was $43.1 million, With a $25,000 deductible. The
annual premium was $43,088. The broker offering the coverage was Arthur J. Gallagher and
Co.
General liability insurance (including auto, police professional, employment practices and
public officials) was provided by Illinois National Insurance Company, an AIG company. This
policy provided for $750,000 of coverage in excess of a $250,000 self-insured retention (SIR)
for each claim. There was no aggregate limit, except for the public officials liability coverage
that had a $750,000 aggregate limit. The annual premium for this coverage, purchased
through Marsh USA, was $109,000.
PROPERTY AND CASUALTY INSURANCE
DECEMBER 10, 2002
Page 2
Liability claims in excess of $1 million per occurrence are covered through the High-level
Excess Liability Pool (HELP). Effective May 1, 2003 the attachment point of HELP is going
to increase to $2 million. This will result in our having to purchase additional coverage in
April of 2003. Unfortunately, underwriters would not bind the increased coverage now for the
May 1st change in coverage. The reason the HELP Board of Directors voted for the change
in coverage is that the attachment point of HELP has not changed since its inception in 1987.
The pool was formed to handle catastrophic losses, and not to serve as a primary carrier.
Over the past fifteen years, the pool has found itself monitoring or paying on more and more
claims that approach the $1 million reserve level.
Excess workers compensation coverage was purchased from Safety National, which insured
the Village for individual claims in excess of $250,000. There was a $1 million aggregate
limit. The annual premium was $29,813. The broker was Arthur J. Gallagher and Co.
The Village pumhased a stand-alone liability insurance policy to cover the activities of its
paramedics/EMT's. The insurer was Western Wodd. The coverage was $1 million per
occurrence with a $250 deductible. The annual premium was $6,818. The breker was
Arthur J. Gallagher.
Proposals Received
I am sure you have read or seen on the news how the bear market and recent catastrophic
property and liability claims have adversely affected the insurance industry. Premium
increases of twenty to fifty percent seem to be the norm. Given the volatility in the
marketplace, the Village Board authorized staff to work with the existing brokers and
underwriters to try and obtain favorable renewal quotations. I believe we were successful in
that effort.
Attached is a report from Nugent Consulting Group, the firm that assisted the Village in
soliciting proposals from the various brokers and underwriters (Attachment 2). Mr. Nugent
presents a comparison of the different renewal options offered by Marsh USA and Arthur J.
Gallagher and Co: for the upcoming policy period.
As you can see in the Nugent Report, the renewal quotes for property and casualty insurance
for 2003 increased substantially. The total for all premiums and commissions as quoted is
$245,711, a 19.7% increase over the 2002 premiums. According to the brokers and our
independent consultant, the quotes, while high, are very competitive given the current
marketplace. A total of $250,345 was included in the proposed 2003 budget for this
coverage.
ROPERTY AND CASUALTY INSURANCE
DECEMBER 10,2002
Page 3
It should be pointed out that the insurance policies being recommended are basically the same
as the expiring policies with regard to coverage, exclusions and limits. Following are the
exceptions to that statement:
The workers compensation self-insured retention will rise to $300,000 per claim, up from the
current SIR of $250,000.
The aggregate limit for the property insurance drops to $48.8 million in 2003 to reflect the
exclusion of the Human Services/Senior Center building.
· The liability insurance policy will now include a mold exclusion.
· Acts of Terrorism were included in both our property and liability policies last year. While
terrorist acts are covered under our property policy, coverage in the liability policy this year
will result in an additional premium of $6,500. Given the exposure staff believes thetermdst
act coverage should be purchased,
· The liability coverage would be provided by National Fire Insurance Company of Pittsburgh,
PA., another AIG company.
An additional insurance policy needs to be acquired this year, that being a builders dsk policy for
the construction of the new village hall and parking deck. Attached is a quote we received from
Hartford Insurance that would cover the entire project for a premium of $14,946. Both Arthur J.
Gallagher and Co. and Nugent Consulting Group feel that this premium is especially compeative
and recommend we purchase the policy.
All of the insurance companies being recommended are very sound financially and have an
excellent claims payment history. The companies have all been rated A+8 or higher by A.M.
Best, a recognized insurance company rating service.
RECOMMENDATION:
1) It is recommended the Village purchase property, EMT, excess workers compensation
and boiler insurance from Arthur J. Gallagher and Co. with premiums and commissions
totaling $101,011..
2) It is recommended the Village purchase liability insurance from Marsh USA, Inc. with
premiums and commissions totaling $'144,700.
3) It is recommended the Village purchase builders risk insurance from Arthur J. Gallagher
and Co. with premium and commission totaling $14,946.
attachments
I:~lnsurance\Corresp~2002\Renewa112-02.doc
DO~SWORTH, CPA
DIRECTOR OF FINANCE
12/89/2882
1847412061e
NUGENT' CONSULTING GROUP
INSURANCE & RISK M^NACiI::MENT CONSLJI TING
PA~E
81
December 6, 2002
VIA FACSIMILE
Mr. Doug Ellsworth
Village of Mount Prospect
100 South Emerson Street
Mount Prospect, IL 60056
Dear Doug:
I have received renewal proposals for each Of the lines of coverage expiring at
the end of the year.
Discussions With the brokers and Insurers began in late summer. The insurance
market had tightened further since the last renewal. Insurers are looking for
Increases in all lines of Insurance. Both brokers were authorized to approach
alternative Insurers but none quoted.
The workers compensation self-insured retention will increase from $2,50,000
each claim to $300,000 each claim. A mold exclusion will be added to the Ilai~T~
· policy. Terrorism coverage is Included In the property & liability programs.
Renewal costs are as follows:
~ '--"-~'N EWAL
Liability $10g~ooq, I $135,700 !
Propm'q/& Boiler .... 43,088 54,170
Excess Workers Compensation 29,8! 3 30~857
EMT Liability 6~818 7,184
Broker Fee- Marsh 8,500 9~000
Broker Fee - Gallagher 8~000
Total S205~1~ $, .2A~., 711
Overall ~ are Increasing Just under 20%. This Is below the 25% Increase we
expected. I am pleased with these figures.
9.40~ F..AO~ · ~,OOKIU. INO6 f~0~2 - IFil-Pt-lONE(a47)412.0410 -
2/~9/2~02 16:13 18474120G10 NUGENT CONSULTING PA~E 82
Sincerely,
Michael D. ,Nu~nt, ARM
President ~
VILLAGE OFi. MOUNT PROSPECT
Public EntitY/Public Officials Liability
.In~Jrance Proposal
Decemberi31, 2002 to December 31 2003
MARSH
Presented by:
Marsh USA Inc.
500 West Monroe Street
Suite 2400
Chicago, II 60661-3630
Tel: 312/627-6000
VILLAGI~, OF MOUNT PROSP~,CT
Public Entity/Public Officials Liability PropOsal
December 31, 2002 to December $1, 2003
EXECUTIVE SUMMARY
We are pleased to have an opporttmity to present a renewal proposal for the Village of Mount
Prospect Public Entity/Public Officials Liability coverage.
The markets that we approached were AIG/C.V.Starr, Genesis, Munich, and TIG/Claredom The
only quote we were able to obtain was from AIG/C~V.Starr. The other markets declined since
they could not be competitive. It has been hard to get carriers to provide quotes for Public
Entities this year. Premium increases have been substaintial across the board. ~ ....
AIG/C.V. Start has added a Mold Exclusion to the policy this year. This endorsement is non-
negotiable. The other carders would also exclude Mold.
We realize that the premium increase and coverage changes are significant. However,
considering the current market conditions we feel that the proposals presented are co. mpefifive.
We welcome your enmments and suggestions.
MARSH
VILLAGE OF MOUNT PROSPECT
Public Entity/Public Officials Liabilio~ Proposal
December 31, 2002 to December 31, 2003
4
MARKET RESPONSES
I
I
I
I
Carrier Response
AIG/C.V. Start & Co. Quoted
Genesis Insurance Co. Declined
Munich Declined
TIG/Clarendon Declined
MARSH
Public £ntiO~/Public Officials Liability Proposal
December 31, 2002 to DeCember 3i, 2003
PREMIUM SUMMARY
Insurer AM'Best Limit Rate 2001-2002 2002-2003 % ~f
Rating SIR Premium Premium Change
AIG A++XV $750,000 Flat 109,000 $129,200 18.5%
$250,000
Marsh Fee $8,500 $9,000 6%
MARSH
VILLAGE OF MOUNT PROSPECT
Public Entity~Public Officials Liability Proposal
December 31, 2002 to December 31, 2003
Insurer:
Policy Period:
Coverage:
Limit of Liability:
Self Insured
Retention:
Endorsements:
Other Conditions:
Premium:
Endorsements
National Fire Insurance Company of Pittsburgh, PA
12/31/02 to 12/31/03
Special Excess Liability for Public Entities
Occurrence form
Coverage includes General ahd Automobile Liability, Employee Benefits
Liability, Law Enforcement Liability, Employment Practices Liability and
Public Officials Liability
$750,000 Each Occurrence
$750,000 Aggregate (Products & Public Officials Liability)
Defense in addition to the limit of liability
$250,000 Each Occurrence
Defense included in SIR
Per F6~m. Manuscript form
Premium due 30 days from policy inception
$129,200
Mandatory Public Entity Endorsement
Mold Exclusion
Lead Exclusion
Terrorism Exclusion
MARSH
Village of Mt. Prospect
1/1/2003 to ~/~/2004 Renewal Pricing
Presented By:
Walter J. Larkin
Area Executive ~lce President
Katherine Bisceglia
Risk Management Representative
Arthur J. Gallagher & Co.
Two Pierce Place
itasca, IL 60f43
630.773.3800
Village of Mt. Prospect - 2003
~overaRe ~arrier
Expiring
Premium
Projected
%
Increase
Property Hartford
$41,907 40%
Expiring Values/Rate $49,313,5611.085
Renewal Values/Rate $48,818,690/.11
% Decrease is -1%
Projected Actual Actual
Premium Premium %
$58,67O $54,170 29%
Professional Western
Liability (EMT) World
$6,818 25% $8,522 $7,184 5%
Excess WC
Safety National $29,813 40%
Expiring rate per $100 payroll
Expiring SIR - $250,000
Renewal rate per $100 payroll
Renewal SIR $300,000
Brokerage Fee
AJG
$8,000 10%
$86,538 36%
TOTALS:
$41,738 $30,857 3.5%
$8,800 $8,800 / 0%
$1t7,730 $101,011 16%
rthur J. Gallagher & Co.
Arthur J. Gallagher Risk i~lanagement Services, inc.
26 November, 2002
Mr. Douglas Ellsworth
Village of Mt. Pmspect
10 S. Emerson St
Mt. Pros~
B ld " '~~
"'-~: ui ersRiskInsurance')
Dear Doug,
I enclose a Builder's Risk qoute for the Village's planned construction of two new
facilities. The Village Hall project is expected to get underway in March, 2003 and the
Parking Deck project is expected to begin in January 2003.
The quote was produced by the Hartford Insurance Company, who al~o undenvrites the
Village's other property exposures. Hartford's policy form contains some of the broadest
wording in the industry so we are confident that Mt. Prospect's insurable interests are
covered properly.
The annual premium for the coverage is $14,946, which represents a rote of $.094 per
$100 of the total completed value of both projects. This is an extraordinary rate in
today's insurance marketplace.
If you have any questions regarding the terms or conditions of the placement please do
not hesitate to call me. Thank you for the opportunity to be of services.
Sincerely,
Walt Larkin
Area Executive Vice President
Enel.
WI_JSF
oF Mourn
Two Pieme
l~,~a, iL 60~ 43.3'1
Builder's Risk Quotation
Project: 50 South Emerson Street, Mt Prospect, IL
Limits of Liability:
At construction sites
Storage other than at construction site
Transit
Flood
Earthquake
Soft Costs
Extra Expense
Equipment breakdown coverage
Debris Removal
Testing
Valuable papers
Coinsurance
Valuation
Ordinance or Law coverage
DedUCtibles:
Earthquake
Flood
Soft costs
Extra expense
All other causes of loss including .
equipment breakdown coverage
Term premium (1 year)
Minimum earned & retained premium
Term rate
Your rate of commission
$14,900,000
500,000
250,000
5,000,000
5,000,000
i,O00,O00
25,000
15,900,000
Up to 25% of amount payable for the direct
physical loss.
Included
25,000.
None
Replacement cost
1,000,000.
25,000
2~,000
5dayswaitingpefiod
5 days wff~fingperiod
lO,O00
$14,946
7,50O
.094
0
Note that our builder's risk program includes coverage for foundations, underground pipes and wiring,
machinery and all fixtures and similar property to become a permanent part of the structure. The cost to
re-perform any site preparation tasks related to a covered cause of loss is oovered.
Should you have any questions, please give me a call.
Village of Mount Prospect
Mount Prospect, Illinois
INTEROFFICE MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
PURPOSE:
MICHAEL JANONIS, VILLAGE MANAGER
DIRECTOR OF FINANCE
DECEMBER 6, 2002
VILLAGE HALL AND PARKING DECK FINANCING
To present a recommendation that the Village Board authorize staff to proceed with the issuance
of $12,235,000 tax-exempt general obligation bonds to finance a portion of the construction costs
of the new village hall/community center and parking deck.
BACKGROUND:
In October of 2001 the Village Board authorized the issuance of $5 million general obligation
bonds to fund a portion of the construction costs of a new village hall and parking deck. The
balance of the financing was expected to take place in 2002. It ended up that we did not need the
proceeds from the second bond issue in 2002, but rather early 2003.
Following is a summary of the project budget'as approved by the Village Board and as included in
the 2003 Budget.
Revenues
Bond Proceeds, Series 2001
Bond Proceeds, Series 2003
Investment eamings
Total Revenues
$ 5,000,000
12,235,000
248,391
$~7,483,391
Expenditures
Village hall construction
Parking deck construction
Architect services
Demolition and site work
Fire Station 12 improvements
Village hall furnishings
Bond discount and costs of issue
Contingencies
Total Expenditures
$ 8,100,000
6,800,000
1,333,200
300,000
275,500
350,000
222,897
. 101,794
$17,483,391
Village Hall and Parking Deck Financing
December 6, 2002
Page 2
The financing plan approved by the Village Board calls for the use of $1,560,000 of General Fuqd
reserves and $2,000,000 of Street Improvement Fund reserves to cover a portion of the debt
service expenditures in the early years. This allows the gradual phasing in of the tax increase
related to the project. It also gets us to the point where the existing debt service on both the police
and fire headquarters and the public works building are retired. With this approach, the property
tax increase associated with the project is approximately 1.3% per year for four years. Attached
as Exhibit 1 is the financing plan approved by the Board.
DISCUSSION:
According to the most recent project draw-down schedule provided by Assistant Manager Strahl,
the proceeds from the initial bond issue are expected to be depleted by late Apdl or eady May.
The financing timetable for the proposed bond issue calls for a dosing in mid-February. This
would give us a cash flow cushion of approximately two months.
As we discussed, in order to sell the bonds as tax exempt securities we must comply with the
federal tax law that states that bonds issued to finance a public facility, such as a parking
structure, are not tax exempt if (i) 10% or more of the parking structure is used in the trade or
business of private persons or businesses and (ii) 10% of the annual debt service on the bonds is
paid, directly or indirectly, from private business payments. Since the annual debt service related
to the parking deck is estimated at $535,000 per year, we can receive no more than $53,000 per
year from the rental of parking spaces to area businesses and their employees. After discussing
the parking plan with Bill Cooney you have advised that we would not be receiving more than
$53,000 per year in rental fees, therefore the entire bond issue can be sold as a tax exempt issue.
Exhibit 2, attached hereto, is a current projected debt service schedule prepared by R.V. Norene
this week. The estimated annual debt service payments are very close to those presented to the
Board several months ago as part of the 2003 budget process.
If directed by the Village Board to proceed, staff will begin working with the Village's financial
advisor and bond counsel on preparing the necessary preliminary official statement and bond
documents. The financial advisor will advertise for a competitive sale andwe will present the
results to the Village Board on January 21, 2003. The closing is tentatively scheduled for
February 13th. Attached as Exhibit 3 is the Tentative Financing Timetable prepared by R. V.
Norene & Associates.
The Village is in the middle of t~iree-year contract with R.V. Norene and Associates for financial
advisory services. For the bond financing being proposed, their fee would be $30,278.
Katten Muchin Zavis Rosenman has served as bond counsel for the Village for many years. The
Village has been pleased with their performance and the firm's name is highly regarded by
institutional investors. The $17,235 fee quoted by KMZ Rosenman for this bond issue is fair and
competitive. Attached is a copy of their proposal (Exhibit 4).
illage Hall and Parking Deck Financing
December 6, 2002
Page 3
RECOMMENDATIONS:
1. It is recommended the Village Board authorize staff and R.V. Norene & Associates to
proceed with the marketing and competitive sale of $12,235,000 tax-exempt general
obligation bonds.
2. It is also recommended that Katten Muchin Zavis Rosenman be appointed bond counsel
for the Sedes 2003 General Obligation Bonds for a fee not to exceed $17,235.
DOUGLAS R. ELLSWORTH, CPA
DIRECTOR OF FINANCE
DRE/
I:~)ebt~2003 G.O~Memo 12-6-02.doc
Attachments
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Tuesday, December 17, 2002
Thursday, December 19, 2002
Monday, December 23, 2002
Thursday, January 2, 2003
Monday, January 6, 2003
Tuesday, January 7, 2003
Monday, January 13, 2003
Wednesday, January 15, 2003
Tuesday, January 21, 2003
Wednesday, January 22, 2003
Friday, January 2~, 2003
Thursday, February 13, 2003
VILLAGE OF MOUNT PROSPECT, ILLINOIS
GENERAL OBLIGATION BONDS, SERIES 2003
Tentative Financing Timetable
Board Meeting: Village Board approve proceeding with bond sale. Staff
announce Tuesday, January 21, 2003 as the tentative sale date.
R.V. Norene & Associates (RVN&A) mail news release regarding Tuesday, January
21, 2003 bid opening.
Fax text to Bond Buyer for "New on Calendar" and "Sealed Bids" for Monday,
December 23, 2002 edition. RVN&A mail text of Summary Notice of Sale to Wall
Street Journal for publication on Wednesday, January 15, 2003.
RVN&A fax Notice of Sale to SURE BID for bid guarantee structure.
RVN&A fax maturity schedule and bond details to Bond Counsel for preparation of
Bond Ordinance.
RVN&A e-mail/fax/deliver draft of Official Statement, Official Notice of Sale/Bid
Form to Village and Bond Counsei for review and telephone comment by Noon,
Monday, January 6, 2003.
Bond Counsel provide Village with draft Bond Ordinance for inclusion in Board
packets for January 7, 2003 Board Meeting.
- Village telephone RVN&A with comments on Official Statement. RVN&A provide
camera ready text of Official Statement, Official Notice of Sale/Bid Form to printer.
RVN&A mail all information to Moody's for investment rating.
RVN&A fax to CUSIP Bureau for CUSIP number assignment to maturities.
RVN&A mail (first mailing) printed Official Statement, Official Notice of Sale/Bid
Form to dealer banks and investment bankers/underwriters.
RVN&A provide disk to FCl SolUtions for insertion of the official Statement on the
Bloomberg System (over 20,000 screens for underwriter tyPes and institutional final
investors).
- RVN&A add Preliminary Official Statement on homepage (www.rvnorene-
assoc.com).
Board Meeting: Introduce Bond Ordinance.
RVN&A mail (second mailing) to investing institutions and investment advisors
throughout the United States.
RVN&A publish Summary Notice of Sale in Chicago edition of the Wall Street
Journal - - this advertisement tells individual investors how to obtain the Official
Statement which will be available on the intemet at www. rvnorene-assoc.c0m:
Bond Bid Opening at 11:00 A.M., C.S.T., at the offices of R.V.Norene & Associates,
1701 Lake Avenue, Suite 215, Glenview, Illinois.
Bond Counsel e-mail final Bond Ordinance to Village.
Board Meeting: Bond sale award and adoption of Bond Ordinance.
- Depository notified regarding global book entry.
-- Draft 'Final Official Statement" faxed to purchaser, Bond Counsel and insurer (if
applicable) for approval on January 24, 2003.
RVN&A complete "Final" Official Statement and provide copies to purchaser for
distribution to investors (within SEC required seven business days of the bond
sale).
Deliver Bonds to purchaser and receive proceeds.
(Board meetings 1st and 3rd Tuesdays)
ecember 4, 2002
KMZRosenman
KATTEN MUCHIN ZAVI$ IIOSENMAN
525 West Monroe S~eet, Suite 1600
Chicago, IL 60661.3693
312.902,5200office 312.~02.1061 fax
Via US Mail
Mr. Douglas R. Ellsworth.
Finance Director
Village of Mount Prospect
Village Hall
100 South Emerson Street
Mount Prospect, Illinois 60056
VILLAGE OF MOUNT PROSPECT, ILLINOIS
Parking Bonds
Dear Doug:
Our fee for serving as bond counsel for the $12,235,000 General Obligation Bonds, Series 2003,
will be $17,235.
Very truly yours,
LG/be
Chicago New Yorg Los Angeles Washington, DC Charlotte Palo Atto
A Law partnership including profes~iona! Corporations