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HomeMy WebLinkAbout0558_001MINUTES COMMITTEE OF THE WHOLE MAY 109 1988 The meeting, was called to order at 7:34 p.m. Present at .,the meeting were: Mayor Carolyn Krause, Trustees R,alph Arthur, Gerald Farley, Leo Floros, Norma Murauskis, Geo'r,ge, Van G,eern and Theodore Wattenberg. Also present at the 0 Village Manager John Fulton Dixon, Assistant Village Mana,,ger rn ee t,j n g, `were . Michael Janonis, Assistant: to the Villav Manager -Special Projects Michael Steklac, Chief of Police Ronald Pavlock, Deputy C,h,,,I,ef,s of Police Thomas Daley and Ronald R-Ichardson,, Director of Finance David Je pson, Human Services Administrator Nancy Morgan, members of the Business District Development, and Redevelopment Commission and Executive Director of the Mount, Prospect Chamber of Commerce Janet Hansen. Also present were three persons from the print media. I1* MINUTES Trustee Ralph Arthur indicated that at the bottom of page three of the Minutes of the meeting of April 26, that a statement attributed to him was more correctly attributed to Trustee Farley and requested that the change be, made. Subject to that change, the Committee accepted the Minutes of the Committee of the Whole meeting for April 26, 198810 111. CITIZENS TO BE HEARD There were no citizens present at the meeting wishing to be heard and the Committee moved on to the next item of business. IV. ARCHITECTURAL RECOMMENDATIONS FOR THE PUBLIC SAFETY BUILDING Chief of Police Ronald Pavlock reviewed with Committee members the recommenda- tion of the Village consultant regarding the rehabilitation of the Village's jail cells. Chief Pavlock indicated that, as currently configured, the cells do not meet local, State or Federal regulations and were not within the criteria established for accreditation. Chief Pavlock further stated that even with the proposed reconfiguration of the cells, the Village still would not be able to meet the State's requirement of 50 square feet per cell without extensive remodeling work. However, he indicated that this deficiency should not affect the Village's ability to achieve accreditation. M Village Manager, John Fulton Dixon indicated that the proposed remodeling, which would total song, e, $25,310 was an interim solution to the jail cell problem. Mr. Dixon indicated that it was his hope that the proposed work would buy the Village additional time so that any extensive remod,eling of the jail cells could take place a,f ter the municipal Court Room had been vacated and the Village had an rements for the building on a comprehensive opportunIty to study the space requi basis* Discussion among Committee members resulted in the following comments: Trustee Ralph Arthur inquired as to the need for a separate juvenile cell as part of this remodeling. The Village's consultant indicated that such a cell at this point in time was impractical but that any future remodeling should provide for a segregated juvenile cello Trustee Theodore Wattenberg indicated that what was really needed was a comprehensive study of the entire building to determine if the facility was adequately meeting the needs of the Police and Fire Departments. Trustee Gerald Farley inquired as to the useful life of these improvements, Mr. Dixon indicated that the proposed re mode Iiing was a, stop -gap, measure designed to sa,tisfy the State authorities and to allow the Potic e Department ,to proceed with accreditation. Trustee Farley suggested that the, Village might attempt 'to continue & - ive seeking waivers from the State and tie any cell reModefing, In wi"th a comprehens" review of the Public Safety' Building. TrustFa ee rley also asked if the Village 'was, subject to any fines or penalties for failing to comply with the State regulati,,onso, The consultant responded that he was not aware of ,,any, however, he, 'felt that It was possible that the State would require the cells to be shut down. Trustee George Van Gee asked what benefit would accrue to the Village if the Police Department were to become accredited. Chief Pavlock responded that the benefits at this time were rather subjective except for the fact that it could prove beneficial in a lawsuit brought against the Police Department* Trustee Leo Flo ros asked if there was any monetary gain from accreditation. Again, Chief Pavlock responded that it was difficult to say what the short-term benefits were to the Village,*, After further discussion, it was the consensus of the Committee to proceed with the proposed remodeling of the jail cells. PALWAUKEE AIRPORT PART 150 NOISE COMPATIBILITY STUDY Palwaukee Airport Manager, Mr. Stewart, reviewed, wl'th Committee members, the Part 150 Noise Compatibility Plan for Palwaukee Airport. He, indicated that the purpose of the Plan was to, identi"I'y points of conflict b�etween the AiTport and surrounding residential neighborhoods with regard to noise. The Study recommended ie manating from the Airport as, well as cert ain measures be taken to, reduce no" se proposing certain restrictions on future development in areas surrounding the Airport* WAS V10 Discussion among Committee members resulted in the following comments: Mayor Carolyn Krause questioned Mr. Stewart regarding the Noise Overlay Zoning Ordinance proposed as part of the Study. The Mayor wanted clarification as to whether the restrictions could be limited to new construction only or whether they would apply to existing housing that later sought remodeling or expansion, Mr. Stewart responded that it was his belief that it was up to each municipality to modify the Ordinance if it so chose. It was suggested that the Village attorney be consulted regarding this particular point. The Mayor also indicated she was against having the Noise Overlay Maps recorded with the title to the property. She felt this would have adverse impact upon property values. In conclusion, the Mayor indicated she supported some aspects of the Part 150 Study and suggested that the Board voice its support for measures that the Airport itself could take to limit noise. Mr. Stewart responded that the Airport had committed to adopting those recommendations. Trustee Ralph Arthur indicated that he was against providing for a non -suit covenant as part of any change in the Zoning Ordinances, He felt that such a restriction was an unwarranted infringement upon a homeowner's rights. Trustee Farley asked that the report be accepted and taken under advisement until such time as the O'Hare Airport Report regarding noise had been issued. He felt that the Village should look at the two reports and take consistent action regarding each. The Mayor responded that the Board should take action on each one of the Reports separately because of the differing impact and the likelihood of success in bringing about changes in airport operations. After further discussion, it was the consensus of the Committee to accept the Report and asked that the Village Man ' ager draft a letter to the Airport indicating its support for the noise reduction recommendations that could be adopted by the 0 Airport and that it would further consider other aspects of the Study. SENIOR TAXI SERVICE Committee members reviewed the recommendations of Human Services Director Nancy Morgan regarding changes to the Senior Taxi Program. The proposed changes to the rate structure were initiated by American Taxi Company because they claimed that the current fare structure was inequitable to their drivers. Village Manager John Dixon reviewed with Committee members his dealings with the Pace agency who currently provides a partial subsidy for the Senior Taxi Program. He indicated that Pace had issued new regulations requiring that a different physical examination report be filled out by the examining doctor. Pace indicated that they would withdraw funding until their new requirements had been met. A request to American Taxi to send their drivers back for a re-examination using the new form was met with refusal. American Taxi felt that the changed requirement was unfair and burdensome despite the fact that Pace indicated a willingness to reimburse the drivers for any additional expense. .3� mber's indicated that they were d-spleased with the Discussi,on among Committee me I o n was, , taken on a post,tion taken by Pace and concurred that before any actio revised fare structure that Pace, Board members should be contacted' and that a change in policy should be sought. VII. TIF STUDY AREA #2 RECOMMENDATION 0 Jack Pettigrew of the consulting firm Trkla, Pettigrew,, Allen and Payne, gave a lk #00 brief overview of Tax Increment Financing and the eligionity of Study Area #2, which is bounded on the east by Main Street, on the north by Central and on the south by Northwest Highway* Hat Predovich, Chairman of the Business District Development and" Redevelopment Cow Miss 'ton, reviewed with, Committee members the recommendation of BDDRC resulting from a comprehensive study of the area look'Ing, at its potential for redevelopment. In summ,ary,,, Mr. Predovich recommended that the Village Board take: *An aggressive posture toward the redevelopment of the triangle; *Lean toward redevelopment of the greatest part of the triangle that was economically feasible; "Retain current businesses where possible; OObtain input from property owners and businesses in the area; "Take a long-range view of redevelopment in the area. Mr. Predovich indicated that the next ste,pss in the process were to inform and educate Interestgroups and to schedule a working session with the Village Board to further review the Commission's recommendationMr. Predovich also indicated that a dialogue should be initiated with affected 'taxing bodies and the Chamber of Commerce. Finally, Mr. Predovich asked for directl.on from the Village Board to continue its work in Study. Area #20 Executive Director for the Mount Prospect Chamber of Commerce, Janet Hansen, read a letter issued by the Chamber Board Indicating support for the process initiated by the Downtown Commission. There, was extensive discussion among Committee members regardl In the recommendatfon* Various quest',ions were asked regarding the percentage of each type, of propo,sed use for the area, as well as, how such Use,s would be configured wtthiin the triangle* Thi Further discussion centered around the financial data that had been generated to date regarding each of the proposed development scenarios. Committee members expressed concern that the numbers presented indicated that redevelopment of the entire triangle would result in a substantial deficit. In response, Mr. Predovich indicated that the current numbers were very rough and were provided for illustra- tive purposes only. He pointed out that many variables needed to be considered in finalizing a redevelopment plan for the area. He indicated that cost and profitability were major concerns of the Commission and that it was the consensus of BDDRC that any plan for redevelopment be self --sustaining. As a result, Mr. Predovich indicated that as final numbers were developed, it could very well be that the entire parcel could not profitably be redeveloped at this time. Mayor Carolyn Krause expressed reluctance about creating a second TIF area. She indicated that the Board and staff should focus on TIF Area #1 and set priorities regarding future redevelopment in that area. Specifically, the Mayor indicated an interest in pursuing redevelopment in Target Area D. Additionally, the Mayor indicated that she was concerned with the adverse impact that the creation of a new TIF District would have on District 57.. She suggested that the Village focus on redevelopment of the old Public Works building and that a smaller District be configured which would include Northwest Electric, Prospect Auto Body and other adjacent properties. She indicated that an ideal timetable would be to finalize plans in 1988 and begin work in 1989. Trustee George Van Geem expressed an interest in further pursuing the recommendation of the Downtown Commission and saw merit in the development of an overall Redevelopment Plan for the triangle. Further discussion among Committee members resulted in a direction to the Village Manager to formulate staff recommendations regarding future plans for TIF Area #1 and that preparation be made for the working session between the Village Board and members of the Business District Development and Redevelopment Commission. VIII. MANAGER'S REPORT No report was given by the Village Manager. IX ANY OTHER BUSINESS Trustee Ted Wattenberg asked that he be provided with a monthly report regarding the status of the suit filed against the Northwest Municipal Conference and the Balef ill Site. X. ADJOURNMENT There being no further business to come before the Committee of the Whole, the meeting was adjourned at 10:31 p.m. MEJ/rcw Respectfully submitted, MICHAEL E* JANONIS Assistant Village Manager .5- Village of Mount Proispect Mount Prospect, Illinois INTEROFFICE MEMORANDUM TO: John Fulton Dixon, Village Manager FROM: David C. Jepson, Finance Director DATE, May 19, 198-F.*e SUBJECT: Authorization for 198B/89 Bond Issues In the 1988/89 fiscal year, the Village has anticipated two debt issues: 1) $350,000 for the property owner s share of Special Service Area No. 6, and 2) $500,000 for financing the Prospect Meadows Sewer Improvement Project. The bond issue for Special Service Area No. 6 is expected to be for 20 years and will be financed by a special service area tax. The bond issue for the Prospect Meadows Sewer Improvement is expected to be for 10 years and will be financed from the Water Fund, with approximately 50/101 of the debt service provided by a sewer surcharge on the water customers in the Prospect Meadows Sewer District. Interest rates have been rising recently, and most indications are that they will continue to increase over the coming months. Because of this, I believe it is in the best interests of the Village to proceed with these financing issues as quickly as possible. I have discussed the current conditions with Ron Norene and he has also recommended that we proceed as soon as possible. The amounts being considered are relatively small amounts of debt and the Village has the option of trying to market the issues locally or to go to the financial markets. Mr. Norene has recommended that we go to the financial market with a competitive sale for the $500,000 issue and for a negotiated sale for the the $350,000 issue. His principal reason is that the $500,000 issue will be a double Aa rated general obligation (G. 0.) issue and will be very attractive. In a recent offering, the Village of River Forest sold a $550,000 issue that received 16 bids. The $350,000 issue will not be as attractive as a G. 0. issue but will be supported by the properties in Special Service Area No. 6. Because the issue will not be rated, he believes we will receive a better price through a negotiated sale. I asked Ron Norene what his fee as financial advisor would be for these issues and the total fees that would be associated with the bond sales. He stated that his minimum fee is $4,500 per issue, but that he would reduce that fee to $3,500 for the $500,000 issue and $3,000 for the $350,000 issue. In addition, a legal opinion for each issue will be needed that will cost between $2,000- $2,500 per issue. Other costs would include updating our Moody's rating, printing bonds, publishing an official statement and notices, and bond registrar costs. Mr. Norene's estimate of total costs are: $9,000 - $10,000 for the $500,000 sale and $5,500 - $6,000 for the $350,000 sale. John Fulton Dixon Page 2 Authorization for 19BB/B9 Bond Issues 4 The primary advantages in using a financial adv'isor in these debt issues are that a much broader market is solicit,ed, the appropriate informon is J provided to the rating agency, the bidders perce,ive a more professi"onal sale and generally the sale can be completed on a more timely basis. An illustration of the potential savings that: could be realized can be seen from the following examples: in a $500,0009 10 year issue, a reduction in the interest rate of 1/41/0' results in a savings of $8,500 over the life of the issue; and in a $350,000, 20 year issue, a 1/4'/0 interest rate reduction amounts to $13,300 over the life of the bonds. In reg,ard to the ng, of these issues Mr. Norene stated that he could 9 obtain the rating and market the @ bonds with a sale scheduled for June 21, 1988. THe Special Service Area bonds would also be scheduled for sale on June1988. For the Special Service Area bondsq the actual market rates on June 21 would be used as a basis for evaluating the negotiated rate. it is my recommendation that we accept the proposal from R. V. Norene and Assneiates and that Lewis Greenbaum of Katten, Muchin and Zavis be appointed as bond counsel for the above bond issues. It is my further recommendation that we approve June 219 1988 as the date of the proposed sales* A copy of Ron Norene's agreement is attachede R. V NORENE & Associates, Inc. NANCIAL ADVISORY SERVICES PROP FOR THE ILLA6E OF MOUNT PROSPECT, ILLII Lake & Waukegan Office Center, Suite 215 • 1701 Lake Avenue • Glenview, IL 60025 • 312-998-9848 ii�!� q� liol May 20, 1988 President and Board of Trustees Village of Mount Prospect Village Hall 100 South Emerson Street Mount Prospect, Illinois 60056 Ladies and Gentlemen: We understand that you propose to issue $5005000 non -referendum general obligation water bonds and special service area bonds with both financings to be accomplished on an expedited basis. We are pleased to offer our financial advisory services to establish a financing program and successfully market and deliver the necessary bonds* An outline of the steps we feel will be necessary in connection with each sale follows but, in any event, our services will be complete and will be designed to reduce the financing costs of the project and to enhance the Village's standing in the financial community* 1* We will immediately familiarize ourselves with the project through meetings with your staff and your attorneys and based thereon establish a tentative financing timetable so that close coordination will be ensured in the legal and financial aspects of the financing. 2. We will submit estimates to you of the annual debt service cost and will make recommendations regarding the financial plan including traditional financing vehicles and, where applicable, the use of bond anticipation financing, variable rate bonds, etc. These recommendations will be based upon our review of the projected tax increment available for debt service, your existing indebtedness and their authorizing ordinances, your future bonding needs and the municipal bond market. 3. We will submit recommended debt retirement schedules for your approval. Based upon the agreed upon financing plan, we will meet with civic groups as you request to explain the financing impact. 4. We will review the existing reports of your other consultants and, where applicable, make recommendations regarding changes therein to ensure financial feasibility. 5. We will specify financial provisions including prior redemp- tion rights, the flow-of-fundsg and the issuance of additional debt, to be included in the legal proceedings for a most Lake & Waukegan Office Center, Suite 216 * 1701 Lake Avenue 9 Glenview, IL 80028a 312-998-9848 R.V. NORENE &Associates, Inc. attractive and successful financing. These provisions will be designed to assure the Village of its ability to complete the financing of all of its future needs, 6 We will research the financial information and economic data bearing upon you as an issuer and the successful marketing of the bonds and will assemble same, together with the details of the bonds, into an attractive Official Statement which will allow you to satisfy the market's current requirements for full disclosure. Each Official Statement will be submitted to you for approval prior to its distribution. 7. We will advise you of the marketing procedures and specifically recommend the time, place and method of conducting the bid opening and sale of the bonds, 8.When a bond bid opening date has been established, we will: ao arrange for the publication of the notice(s) of sale in the national financial press. b. make a recommendation relative to the advisability of obtaining an investment rating and, if you elect to request one, we shall make application on your behalf including preparation of the necessary information., c. recommend whether you should make application for municipal bond insurance and, if it is decided to make such application, we shall submit the necessary information. d. distribute the Official Statement to a broad list of prospective bidders, investment advisors and investing.institutions. e. solicit additional bidders by contacting prospective bidders in advance of the sale to ensure that there are no unanswered questions regarding the issue. 9., We will attend the bid opening where we will conduct the sale, check the bids for accuracy and advise you of the accepta- bility of the best bid received. 10. We will assist in and coordinate all details leading up to the delivery of"the bonds, including the printing of the bonds and calculating the amount due at delivery. 11. Upon completion of compute a record of provide you with a financing. the delivery of your bonds, we shall payments of principal and interest and convenient reference summary of the We shall have no interest in the purchase or resale of your obligat u'),ns nor shall, we, engage in any, other activity wh,&ch may 'j, 6 constitute a confL71c,t of 'Interest with pierf621,)mance of our services for you. We will not obl"to you for any expenses except with your approval, , 64 wwwom I "I'll 11 R. V. NOREN E & Associates, You will be responsible for the fees of your attorneys, bond counsel, engineers /architects /planners and are to pay all of your ordinary expenses including advertising, printing and distribution of Official Statements) the purchase (if applicable) of a rating for the bonds, the purchase (if applicable) of municipal bond insurance, bond registrar/paying agent fees and printing and delivery of the bonds. We will assist you by arranging for the advertisement of the sale in the national financial press and, where applicable, will obtain competitive bids on the necessary printing* For our services we are to be paid a fee which shall include our own ordinary expenses) our necessary travel expenses between Mount Prospect/Glenview/Chicago and our services in full which, in addition to those outlined in this Agreement, shall include all necessary and usual functions to complete each financing. In the event it is deemed necessary to travel to New York City in connection with the Village's application for an investment rating, we are to be reimbursed for our out-of-pocket expenses and travel costs4p Our fee for the two issues shall be as follows: $500,000 General Obligation Water Bonds - $3,500; and $350,000 Special Service Area Bonds - $3,0000 Our fee is to be due at the time of the award of the low bond bid and payable upon receipt of the proceeds of the issue. If for any reason no bond award is made, no fee is due. Respectfully submitted, President R. V. Norene & Associates, Inc. RVN/lo The above proposal accepted this day of 1988. You are instructed to proceed,, Attest: ViUage Clerk ".* 3 ­ ViZI,age President iz TO: John Fulton Dixon, Village Manager FROM: David C. Jepson, Finance Director DATE. May 20, 1988 SUBJECT: Police and Fire Pension Funds Actuarial Valuations V, Attached are the Actuarial Valuations for the Village's Police and Firemen's Pension Funds as of May 1, 1987. The valuations are based upon information as of May 1, 1987 and include the Village's contribution requirements for the 87/88 fiscal year. The reports each contain the following four sections: I Selection of Assumptions 11 Plan Valuations and Plan Information III Actuarial Assumptions and Methods IV Financial Disclosures From the information contained in the valuation reports, it can be seen that the Village's two plans are in very good financial condition. The Police Pension Fund is funded at a 127'/0" level and the Firemen's Pension Fund is funded at a 146/00 level. Following is a summary of the assets and accrued liabilities of the two plans: Accrued of eo Assets Liabilities Funded Police Pension Fund $1195729929 $99106,927 127/0 U/ Firemen's Pension Fund 1392919300 99101,623 146/0 The Village's contribution requirement for the 87/88 fiscal year for the Police Fund is $8,646 and is $-0- for the Fire Fund. The report indicated that the contribution for the Police Pension Fund will gradually increase from 0.40/0" of current salaries in 87/88 ($8,646) to an estimated 9.31/0" in 2020. The contribution for " the Fire Pension Fund was $-0- in 87/88 and is expected to be $-0- for the next ten years. After that time it is expected to increase gradually up to about 11-0/'10/ of current salaries in 2020. John Fulton Dixon Page 2 Police and Fire Pension Funds Actuarial Valuations Following are some of the noteworthy items in the valuation reports: Report Section Under the discussion of the Selection of Assumptions on page 3, it is mentioned that the most important assumption is investment return. Over the past 5 years, the Village has averaged a 15.21/0' return, including 29,00.0" in 1986/87, in the Police Pension Fund and a 14.6'/G" return, including 26.3'/`l0/ in 1986/87, in the Firemen's Pension Fund. During this same five year period, total assets in the Police Pension Fund increased from $4,732,705 to $11,572,929, or 145'/0', and from $5,552,016 to $13,291,300, or 139.10' in the Firemen's Pension Fund. The assets in each fund were invested in securities averaging an 8,60/0" return on 5/1/87, and as a result a fairly conservative 890' assumption was selected. The second most important assumption is in regard to salary increases. A 5.25.10' annual increase was used in the valuations. Ii Plan Assets, Accrued Liabilities and the Net Contribution due from the Village are found on pages 6 and 7. The balance of this section includes. Projection of Benefit Payments Census Data Membership Data Statement of Revenues and Expenses Summary of Statutory Provisions It should be pointed out that the Summary of Statutory Provisions includes additional benefits that were granted in January 1987. On a statewide basis, these benefit increases have increased normal costs an average of 3.4.4 for all Police Pension Funds and 10.91/0' for all Firemen's Pension Funds. III The Assumptions used in the valuations are listed, including the 810" investment return, 5.251° salary increases, and the other assumptions for withdrawal, disability and retirement. On page 17 is an illustration of the various probabilities that may occur for an individual hired at age 25. John Fulton Dixon Page 3 Police and Fire Pension Funds Actuarial Valuations IV This section includes the financial disclosures that are required by the Government Accounting Standards Board. The information in this section is prepared using a different actuarial method than the previous sections. The previous sections use the "Entry Age Normal" actuarial method and this section uses a "Unit Credit" actuarial method. The basic difference is that the Entry Age Normal method calculates the accrued liability as the present value of all the normal costs which should have been paid up to the valuation date. The Unit Credit method is a measure of the present value of pension benefits, adjusted for the effects of projected salary increases estimated to be payable in the future, as a result of employee service to date. The net effect is an estimated funding level of 107/1' rather than 127'/0" in the Police Pension Fund and a level of 118'/0' rather than 146/10' in the Firemen's Pension Fund. Any time a pension plan achieves full -funding (100,001) 1 it is a significant attain- ment. On a statewide basis, 44 Police Pension Funds out of 297 had achieved full -funding as of December 31, 1986 and 108 out of 230 Fire Pension Funds were 100/0a/ funded as of that date. The average level of funding for all Police Funds is 70°C1 7 O.C1 and 76/10' for all Fire Pension Funds. A continued level of full -funding for a pension plan is even more noteworthy in light of the additional benefits granted in 1987. The advantages of full -funding are mutually beneficial to both the plan parti- cipants and Village residents, With full -funding, participants can be assured of assets to pay pensions for both current and future retirees. Village residents benefit because of a lower tax levy. There has been no tax levy required for the Fire Pension Fund since 1983 and based upon the actuarial report, it is estimated that no levy will be required for the next ten years. For the Police Pension Fund, the tax levy has been reduced from a peak of $371,454 in 1982 to $1039000 in 19B7. Based upon the attached report, it appears that the amount can be reduced over the next several years, Enc