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Packet - 12/03/2018 - City Council
AGENDA REGULAR CITY COUNCIL MEETING City Council Chambers, 333 S Green Street Monday, December 3, 2018, 7:00 PM 1. Call to Order. 2. Roll Call. 3. Pledge of Allegiance. 4. Public Hearing concerning the City of McHenry 2018 Proposed Tax Levy Ordinance in the amount of $4,618,786, representing a 0% increase above the 2017 Tax Levy extension. 5. Motion to adopt an Ordinance for the Levy of Taxes for the Year 2018 in the amount of $4,6185786. 6. Public Comments: Any member of the public wishing to address the Council is invited to do so by signing in at the meeting entrance and, when recognized, stepping to the podium. Opportunities for Public Comment are also provided under each Individual Action Item. 7. Consent Agenda: Motion to Approve the Following Consent Agenda Items: A. Resolution establishing the 2019 City Council Meeting Schedule; B. November 26, 2018 City Council Meeting minutes; C. Payment of Bills in the amount of $76,339.12. 8. Individual Action Item Agenda: A. Motion to adopt Ordinances for the abatement of real estate taxes levied for the 2018 Tax Levy Year for the following bond issues: General Obligation Bonds (Recovery Zone & Build America) Series 2010B, $413,120.00; General Obligation Bonds (Alternate) Series 2010C, $448,440.00; General Obligation Bonds (Alternate) Series 2012, $207,332.50; General Obligation Bonds (Refunding) Series 2013, $36,370.00; and General Obligation Bonds (Refunding) Series 2015, $582,878.760 9. Discussion Only Items: A. Leopardo Companies, Inc. regarding addressing capital infrastructure needs through the implementation of energy efficiency improvements. B. Solicitation of proposals for the redevelopment of the Central Wastewater Treatment Plant (CWWTP) site. 10. Executive Session. The City of McHenry is dedicated to providing its citizens, businesses, and visitors ►vith the highest quality of programs and services in a customer -oriented, efficient, and fiscally responsible manner. 0 11. Motion to pass a Resolution a) approving Executive Session meeting minutes as presented; b) authorizing the release of Executive Session meeting minutes as presented; and, c) destruction of any Executive Session recordings that exist more than 18 months and for which the minutes of that meeting have been approved. 12. Staff Reports. 13. Mayor and City Council Comments. 14. Adjourn. The complete City Council packet is available for review online via the City website at www.ci.mchemZl.us. For further information, please contact the Office of the City Administrator at 815-363-2108. The proceedings of the City Council meeting are being video and audio -recorded and every attempt is made to ensure that they are posted on the City of McHenry, IL "YouTube" channel within twenty four (24) hours of the meeting adjournment. NOTICE: In compliance with the Americans With Disabilities Act (ADA), this and all other City Council meetings are located in facilities that are physically accessible to those who have disabilities. If additional accommodations are needed, Please call the Office of the City Administrator at 815-363-2108 at least 72 hours prior to any meeting so that accommodations can be made. Office of Finance & Accounting Carolyn Lynch, Director McHenry Municipal Center 333 Green Street McHenry, Illinois 60050 Phone: (815) 363-2100 MCHenr Fax: (815) 363-2119 0 � � Ye www.ci.mchenry.il.us PUBLIC HEARING SUPPLEMENT DATE: December 3, 2018 TO: Mayor and City Council FROM: Carolyn Lynch, Finance Director RE: Public Hearing and Consideration of the 2018 Tax Levy Ordinance ATTACHMENTS: Exhibit A —Proposed Real Estate Tax Levy by Fund 2017 McHenry County Tax Rates 2018 Property Tax Levy Ordinance AGENDA ITEM SUMMARY: The purpose of this agenda item is to conduct the 2018 Property Tax Levy Public Hearing and to provide the City Council with information needed for the adoption of the 2018 Property Tax Levy Ordinance. PURPOSE: On November 12, 2018 Council considered and approved a Resolution Determining the Amount of Funds to be levied for the 2018 Tax Year through real estate taxes for the City of McHenry and set a date of December 3, 2018 for the Public Hearing and consideration of an ordinance establishing such a levy. While not required to do so, the City of McHenry believes that it is important to provide residents with an opportunity to provide public comment on the proposed property tax levy. Upon the closure of the public hearing City Council can then consider the adoption of the 2018 Tax Levy Ordinance. An approved Tax Levy Ordinance must be filed by the last Tuesday of December (the 25th in 2018). With altered schedules and office hours due to the holidays, it is always prudent for Council to consider the Tax Levy Ordinance to allow sufficient time for administrative processing. BACKGROUND/ANALYSIS: Approximately 77.1% of the FY18/19 budgeted General Fund Revenues are derived from Sales Tax, Income Tax and Property Tax receipts with the remaining approximate 22.9% coming from such sources as miscellaneous other intergovernmental taxes, grants, franchise fees, licenses and permits, fines and forfeitures, and charges for services. For the FY18/19 Budget, Property Tax receipts comprised 22.2% ($4,942,359) of the total budgeted revenues ($22,309,740). As the Council is aware, McHenry has implemented a Fund Balance and Reserve Policy and for the General Fund, this policy recommends that the unrestricted fund balance be maintained at 120 days of estimated operating expenses. Additionally, after the minimum fund balance is met, that excess fund balance should be assigned for future capital expenses. At the end of FY2017/18, there were $0 additional funds to be transferred to the Capital Improvements Fund as excess fund balance. This means that any General Fund Capital projects identified for implementation in the upcoming fiscal year (May 1, 2019 through April 30, 2020) will have to be funded through the General Fund Balance. As the Council discusses the property tax levy, it should keep the following factors in mind. First, that the FY18/19 General Fund Capital Improvement Program (CIP) includes nearly $90 million in projects (including an approximate $50 million local road program) that rely primarily on General Fund Revenues for implementation. The 5-Year Capital Improvement Plan is in the early development phase and all department heads have been notified that there are $0 excess funds available for a capital plan for 2019/20. If, during the budget process, there are budgeted revenues over expenses capital items could be added. The FY17/18 Capital Improvements Fund Balance is $1,051,046 and FY18/19 Budgeted Capital Items total $773,000. This leaves just $278,046 in the Capital Improvements Fund for General Fund Capital Projects. The second factor is that, that despite the most conservative budgeting efforts, General Fund operating costs will continue to increase. For example, Police Pension contributions are estimated to increase $62,718, and overall salary increases are estimated to increase $449,000 for FY19/20, a total of $511,718 which represents a 2.2% increase in FY18/19 Budgeted Expenditures of $23,477,491. Of note, Staff is currently working with a firm on an exploratory basis to identify cost saving measures that could be gained through energy efficiencies and non-traditional capital improvements and equipment improvements. While this may provide an opportunity for the City to address such projects as improvements to public facilities (e.g., municipal center roof replacement) and vehicle and equipment replacement, it will not be able to address all of the funding needs related to projects such as the local street program. Despite the fact that as a "Home Rule" community the City of McHenry is no longer subject to the Property Tax Extension Limitation Law, or PTELL-which limits increases to residents' property taxes by preventing a local government's property tax levy from growing at a faster pace than the rate of inflation, or 5%, whichever is less - the City has continued to follow PTELL guidelines for establishing the property tax levy. In fact, for the years 2011-2015 the City chose to maintain a flat property tax levy request at the amount that was requested in 2010. In 2016, Council chose to decrease the property tax levy request by 3%. And in 2017 the levy was again maintained flat from the 2016 reduced amount. For the 2018 tax year the inflationary rate is 2a The Estimated Rate Setting EAV supplied by McHenry County is 667,191,687 (an increase of 6.8% over 2017) which includes new construction of 2,901,515. PTELL calculated with the inflationary rate and the estimated EAV equates to an Estimated Limited Extension of $4,737,159, or an $118,373 increase over last year. Even if the City were to adopt this increase, it would not cover the anticipated increases in costs for FY19/20. Based on the above information, it is important to remind the Council that freezing or reducing the City's portion of the property tax levy does not mean that home -owners will see a reduction in their property tax bill. Change in EAV also drives change in the property tax bill. When the EAV declines the tax rates must go up in order to fully fund the property tax levy because the same amount of money needs to be collected across the new lower values as requested by all taxing districts. For 2017, the EAV increased for the second consecutive year so the tax rates for the City went down slightly lowering the burden on taxpayers. In fact, in 2016 that portion of a resident's tax bill directed to the City of McHenry was only 6.3% of the total amount. However, this does not take into consideration actions taken by the other taxing jurisdictions that comprise the total property tax bill. As an example, in 2015 the City of McHenry kept its portion of the property tax bill the same as 2014, but the amount of property tax paid by the owner of a $200,000 home actually increased by $43.51 due to levy increases by other taxing bodies. Annually, prior to the end of the calendar year, the City must provide the amounts required for the property tax levy so that the funds generated through this revenue mechanism will become available during the 2019/2020 fiscal year. The levy request must be approved by the City Council and submitted to the McHenry County Clerk by the last Tuesday in December (the 25th in 2018). There are public notification timeframes also associated with this process. With this date as a target, the 2018 Property Tax Resolution indicating the levy amount and Public Hearing was presented at the November 3rd 2018 Council meeting and, upon adoption of the resolution, the Property Tax Levy Public Hearing and consideration/adoption of the levy amount scheduled for the December 3, 2018 City Council meeting. Based on the totality of the information that has been reviewed in this memorandum, and with input from the Finance and Personnel Committee at its October 1, 2018 and October 15, 2018 meetings, staff is forwarding a recommendation to maintain the property tax levy at the current amount of $4,618,786. This represents the eighth (8th) consecutive year that the City of McHenry has foregone an increase in the amount of property taxes collected. Based on the PTELL estimates provided by McHenry County, the amount of revenues deferred by this action will be approximately $118,373. Staff reminds Council that we will continue to carefully plan and monitor revenues and expenditures during the upcoming year and monitor any other internal or external factors that may have an impact on the City's overall financial stability. RECOMMENDATION: Therefore, if Council concurs, the following is recommended. 1) conducting a public hearing regarding the proposed 2018 Property Tax Levy in an amount of $4,618,786 and, upon closing the public hearing; 2) consideration of the 2018 Property Tax Levy Ordinance in an amount not to exceed $4,618,786. EXHIBIT A CITY OF IVIcHUMM PROPOSED REAL ESTATE TAX LEVY 2018 TAX LEVY Equalized Assessed Valuation (EAV)* Purpose Corporate Police Protection Civil Defense Audit Insurance IMRF Social Security Public Library Debt Service Police Pension Public Benefit TOTAL *Estimated $667,191,687 (6.8% Increase) Estimated Rate 0.0748 0.0821 0.0000 0.0000 0.0041 0.0749 0.0598 0.0845 0.0000 0.0000 0.3121 0.0000 0. 5923 Proposed Lew $ 499,046 $ 547,959 $ 0 $ 0 $ 26,427 $ 499,994 $ 399,194 $ 563,745 $ 0 $ 0 $ 21082,421 $ 0 $ 41618,786 City of McHenry 2017 Property Taxes on $200,000 Home By Government Unit 2017 Tax Percent Government Unit Rate Amount of Total McHenry County $0.901887 $601.26 7.64% McHenry Co. Conservation 09244906 163.27 2.07% MCC College District 0.384701 256A7 3.26% School Dist. #15 5.526600 3684.40 46.82% School Dist. #156 2.712425 1808.28 22.98% McHenry Fire District 0.568420 378.95 4.82% McHenry Library 0.333899 222.60 2.83% McHenry Twnshp. 0.129442 86.29 1.10% McHenry Twnshp. Rd. & Br. 00262525 00739407 $119804212 175.02 2.22% McHenry City 492.94 100000% $7,869.48 City of McHenry 2018 Property Taxes on $200,000 Home By Government Unit 2018 Tax Percent Government Unit Rate Amount of Total McHenry County $0.901887 $601.26 7.67% McHenry Co. Conservation 00244906 163.27 2.08% MCC College District 0.384701 256.47 3.27% School Dist. #15 5.526600 3684.40 47.01% School Dist. #156 2.712425 1808.28 23.07% McHenry Fire District 09568420 378.95 4.83% McHenry Library 0.333899 222.60 2.84% McHenry Twnshp. 08129442 86.29 1.10% McHenry Twnshp. Rd. & Br. 0.262525 0,692300 $11.757105 175.02 2.23% McHenry City 461.53 $7,838.07 100900% City Decrease - due to EAV Increasing .31.41 ORDINANCE NO. ORD-18- 2018 PROPERTY TAX LEVY ORDINANCE AN ORDINANCE FOR THE LEVY OF TAXES FOR THE CITY OF McHENRY, McHENRY COUNTY, ILLINOIS FOR THE YEAR 2018 WHEREAS, the City of McHenry, McHenry County, Illinois is a home rule municipality as contemplated under Article VII, Section 6, of the Constitution of the State of Illinois, and passage Athis Ordinance constitutes an exercise of the City's home rule powers and functions as granted in the Constitution of the State of Illinois. BE IT ORDAINED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF McHENRY, McHENRY COUNTY, ILLINOIS as follows: SECTION 1: That at tax for the following sums of money, or as much thereof as may be authorized by law to defray all expenses and liabilities of the City of McHenry, be and the same are hereby levied for the purposes specified against all taxable property in the City of McHenry for the year 2018 in the respective sums as follow, to -wit: Article I General Fund Administration Department Salaries -Regular Overtime - Regular Salaries - Seasonal Salary Adjustments Board/Commission Expense Youth Commission Health/Life Insurance Dental Insurance US Life Insurance Insurance Premiums Vision FICA/Medicare IMRF Retirement Uniform Allowance Contractual Services Legal Fees Postage and Meter Telephone Printing and Publishing Repair & Maintenance Dues Travel Expenses Training Tuition Reimbursements Levy 13,782 13,006 19,795 Publications - Utilities - IMF Expense - Materials & Supplies - Office Supplies - Gasoline & Oil - Small Equipment - Administrative Expense - Capital - Land Acquisition - Buildings - Equipment - Capital - Furniture - Purchase of Service - Risk Management - Purchase of Service - Information Technology - Transfer - Employee Insurance Fund - Transfer - Capital Improvements - Total Administration Department 46,583 Elected Officials Department Salaries -Regular - Overtime - Regular - Salary Adjustments - Salaries - Elected Officials - Health/Life Insurance - Dental Insurance - US Life Insurance - Insurance Premiums Vision - FICA/Medicare 21796 IMRF Retirement - Uniform Allowance - Contractual Services - Postage and Meter - Telephone - Printing and Publishing - Dues - Travel Expenses - Training - Publications - Materials and Supplies - Office Supplies - Small Equipment - Employee Recognition - Administrative Expense - Purchase of Service - Information Technology - Transfer - Employee Insurance Fund - Total Elected Officials Department 21796 Community Development Department Salaries -Regular 21,302 Salaries - Part Time - Salaries - Temporary - Census - Overtime - Regular - Salary Adjustments - Health/Life Insurance - Dental Insurance - US Life Insurance - Insurance Premiums Vision - FICA/Medicare 21,941 IMRF Retirement 307486 Uniform Allowance - Contractual Services - Postage and Meter - Telephone - Printing and Publishing - Repairs and Maintenance - Vehicles - Dues - Travel Expenses - Training - Tuition Reimbursement - Publications - Materials and Supplies - Office Supplies - Fuel and Lubricants - Small Tools and Equipment - Capital Lease Principal Payments - Capital - Buildings - Equipment - Capital - Vehicles - Purchase Service - Risk Management - Purchase Service - Information Technology - Transfer - Employee Insurance Fund - Total Community & Economic Development Department 73,729 Finance Department Salaries -Regular 15,375 Salaries -Part Time - Overtime - Regular - Salary Adjustments - Health/Life Insurance - Dental Insurance - US Life Insurance - Insurance Premiums Vision - FICA/Medicare 153836 IMRF Retirement 22,003 Uniform Allowance - Contractual Services - Postage and Meter - Telephone - Printing and Publishing - Dues - Travel Expenses - Training - Tuition Reimbursement - Publications - Materials and Supplies Office Supplies Gasoline & Oil Small Tools and Equipment Administrative Expense Development Expense Miscellaneous Refunds Debt Service Transfer Transfer - Special Service Area Transfer - Motor Fuel Tax Fund Purchase Service - MCMRM Purchase Service - Information Technology Transfer - Employee Insurance Fund Transfer - Capital Improvement Fund Transfer - Band Fund Transfer -Civil Defense Transfer - Capital Equipment Fund Total Finance Department Human Resources Department Salaries - Regular Health/Life Insurance Dental Insurance US Life Insurance Insurance Premiums Vision �� itI�CT:R'f1'� IMRF Retirement Contractual Services Training Purchase Service - Information Technology Total Human Resources Department Economic Development Department Salaries -Regular Health/Life Insurance Dental Insurance US Life Insurance Insurance Premiums Vision FICA/Medicare IMRF Retirement Contractual Services Postage & Meter Printing and Publishing Dues Travel Expenses Training Materials and Supplies Bulk Office Supplies Purchase Service - Information Technology Total Economic Development Department Police Department 53,214 4,829 6, 710 16,228 10,018 10,319 14,336 34,673 Salaries - Regular 16,474 Salaries - Sworn 777,419 Salaries - Part -Time - Overtime - Regular - Overtime - Sworn - Career Ladder - Salary Adjustments - Health/Life Insurance - Dental Insurance - US Life Insurance - Insurance Premiums Vision - FICA/Medicare 267,958 IMRF Retirement 24,294 Contribution - Police Pension 21082,421 Uniform Allowance - Contractual Services - Postage and Meter - Telephone - Repair and Maintenance - Vehicles - Dues - Travel Expenses - Training Expenses - Tuition Reimbursement - Publications - Utilities - Materials and Supplies - Office Supplies - Fuel and Lubricants - Small Equipment - Police-1<9 Unit - Police -DUI - Capital - Equipment - Capital - Vehicles - Capital - Furniture - Purchase of Service - Risk Management - Purchase of Service - Information Technology - Transfer - Employee Insurance Fund - Total Police Department 31168,566 Dispatch Department Salaries -Regular 72,380 Salaries -Part-Time - Overtime - Regular - Salary Adjustments - Health/Life Insurance - Dental Insurance - US Life Insurance - Insurance Premiums Vision - FICA/Medicare 817814 IMRF Retirement 109,728 Uniform Allowance - Contractual Services - Postage and Meter - Telephone - Travel Expenses - Training Expenses - Tuition Reimbursement - Utilities - Materials and Supplies - Office Supplies - Small Equipment - Purchase of Service - Risk Management - Puchase of Service - Information Technology - Total Dispatch Department 263,922 Public Works Administration Department Salaries - Regular 14,541 Overtime - Regular Salary Adjustments - Health/Life Insurance - Dental Insurance - US Life Insurance - Insurance Premiums Vision - FICA/Medicare 143978 IMRF Retirement 20,234 Uniform Allowance - Contractual Services - Postage and Meter - Telephone - Dues - Travel Expenses - Training Expenses - Tuition Reimbursement - Office Supplies - Small Equipment - Forestry Capital - Equipment - Purchase Service - Risk Management - Purchase Service - Information Technology - Transfer - Employee Insurance Fund - Total Public Works Administration Department 49,753 Public Works Streets Division Department Salaries -Regular 65,926 Overtime - Regular - Overtime - Snow Removal - Salaries -Seasonal - Salary Adjustments - Health/Life Insurance - Dental Insurance - US Life Insurance - Insurance Premiums Vision - FICA/Medicare 73,092 IMRF Retirement 100,115 Uniform Allowance - Contractual Services - Contractual Services - PW Bldg - Telephone - Repair and Maintenance - Vehicles - Training Expenses - Utilities - Utilities - PW Bldg - Street Lighting - Materials and Supplies - Materials and Supplies - PW Bldg - Office Supplies - Vehicle Fuel and Lubricants - Small Tools and Equipment - Safety Equipment and Supplies - Miscellaneous Expenses - Capital - Equipment - Capital - Vehicles - Capital - Public Improvements - Encumbrances - Purchase Service -Risk Management - Purchase Service - Information Technology - Transfer - Employee Insurance Fund - Total Public Works Streets Division Department 239,133 Parks &Recreation Department Salaries - Regular 35,100 Salaries - Part Time Employees - Overtime - Regular - Salaries - Seasonal - Overtime - Seasonal - Salary Adjustments - Health/Life Insurance - Dental Insurance US Life Insurance Insurance Premiums Vision - Social Security Expenses 57,176 IMRF Retirement 51,492 Uniform Allowance - Contractual Services - Postage and Meter - Telephone - Printing and Publishing - Repairs and Maintenance - Vehicles Dues - Travel Expenses - Training - Tuition Reimbursement - Publications - Utilities - Materials and Supplies - Office Supplies - Vehicle Fuel and Lubricants Small Equipment Special Events Forestry Capital - Equipment Capital - Vehicles Park Improvements Purchase Service - Risk Management Purchase Service - Information Technology Transfer - Employee Insurance Fund Total Parks & Recreation Department Total General Fund Article II Audit Fund Audit Fee Total Audit Fund Article III Insurance Fund Insurance Total Insurance Fund Grand Total Articles I, II, and III Levied for the City of McHenry from the tax for General Corporate funds, 65 ILCS 5/8-3-1, in addition to all other taxes Levied from the Special Tax for Police Protection, 65 ILCS 5/11-1- 3, in addition to all other taxes Levied from the Special Tax for cost of participation by the City of McHenry in the Illinois Municipal Retirement Fund Enabling Act, 40 ILCS 5/7-171, in addition to all other taxes Levied from the Special Tax for cost of participation by the City of McHenry in the Social Security Enabling Act, 40 ILCS 5/21-109, in addition to all other taxes Levied from the Special Tax for the Police Pension Fund, 40 ILCS 5/3-125, in addition to all other taxes Levied from the Special Tax for the Audit Fund, 65 ILCS 5/8-8-3, in addition to all other taxes Levied from the Special Tax to pay the cost of insurance, 745 ILCS 10/9-107, in addition to all other taxes 143, 768 4,092,365 26,427 26,427 499,994 499,994 4,618,786 $ 4993046 547,959 39%194 563, 745 2,082,421 26,427 499,994 TOTAL LEVIED FOR CITY OF MCHENRY FROM ALL $ 416181786 SOURCES The cites sources of authority are for information purposes only and are not intended to be a limitation on the City's authority to levy taxes. SECTION 2: All expended balances of any item or items of any general appropriation made by the Ordinance may be expended in making up an insufficiency in any item or items in the same general appropriation and for the same general purpose of in like appropriation made by the ordinance. SECTION 3: The Clerk of aforesaid City is hereby directed to file with the Clerk of McHenry County a duly certified copy of this ordinance. SECTION 4: The Ordinance shall be in full force and effect from and after its passage, approval and publication in pamphlet form (which publication is hereby authorized), as provided by law. UV N NRART 0I TNC !O% RIVCR Derik Morefield, City Administrator McHenry Municipal Center 333 Green Street McHenry, Illinois 60050 Phone: (815) 363-2100 Fax: (815) 363-2119 dmorefield@ci.mchenry.il.us CONSENT AGENDA ITEM DATE: December 3, 2018 T0: Mayor and City Council FROM: Wayne Jett, Mayor RE: Resolution of 2019 City Council Meeting Schedule ATT: Resolution Attached is a Resolution identifying the City Council Meeting Schedule for 2019. Please note the following: 1. There is only one meeting proposed for January, the 215Y. If another meeting is needed for conducting City business we can schedule as needed. 2. There are three meetings scheduled for April. It is proposed that we utilize the April 15tn meeting to review the proposed FY19/20 Budget as a Discussion Item in lieu of scheduling a separate Committee of the Whole Meeting for this purpose. The proposed budget will have still been reviewed by the Finance and Personnel Committee in March, as in previous years, and Council is encouraged to attend these meetings. The final revised budget would then still come before Council for adoption at the April 28tn Annual Meeting. 3. The first meeting in September will be Tuesday, September 3rd since Monday, September 2nd is Labor Day. To avoid some confusion and scheduling conflicts this year, this schedule keeps City Council meetings on the 15t and 3rd Mondays of each month (except for September 3rd) and, as always, we have the opportunity to schedule additional "Special Meetings" to address specific topics if needed. The City of McHenry is dedicated to providing the citizens, businesses and visitors of McHenry with the highest quality of programs and services in acustomer-oriented, efficient and fiscally responsible manner. RESOLUTION BE IT RESOLVED by the Mayor and City Council of the City of McHenry, County, Illinois, that the following schedule of Council Meetings (with starting opposite the month) for the period from January 1, 2019 to December 31, 2019 adopted: JANUARY - 7:00 P.M. 21 Regular Meeting APRIL - 7:00 P.M. 1 Regular Meeting 15 Regular Meeting 29 Annual Meeting JULY - 7:00 P.M. 1 Regular Meeting 15 Regular Meeting OCTOBER - 7:00 P.M. 7 Regular Meeting 21 Regular Meeting FEBRUARY - 7:00 P.M. 4 Regular Meeting 18 Regular Meeting MAY - 7:00 P.M. 6 Regular Meeting 20 Regular Meeting AUGUST - 7:00 P.M. 5 Regular Meeting 19 Regular Meeting NOVEMBER - 7:00 P.M. 4 Regular Meeting 18 Regular Meeting Approved and adopted this 3rd day of December 2018. Voting Aye: y Voting Na: Abstaining Not Voting: Absent: Mayor Wayne S. Jett ATTEST: Deputy City Clerk, Debra Meadows MARCH - 7:00 P.M. 4 Regular Meeting 18 Regular Meeting JUNE - 7:00 P.M. 3 Regular Meeting 17 Regular Meeting McHenry times set is hereby SEPTEMBER - 7:00 P.M. 3 Regular Meeting (Tuesday) 16 Regular Meeting DECEMBER - 7:00 P.M. 2 Regular Meeting 16 Regular Meeting City Council Meeting Minutes November 26, 2018 Page 1 City Council Meeting November 26, 2018 Call to Order Mayor Wayne Jett called the regular meeting scheduled for November 26, 2018 of the McHenry City Council to order at 7:00 pm in the McHenry City Council Chambers, 333 S. Green Street, McHenry, IL. Roll Call Attorney Cahill called the roll. Roll call: Members present: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Curry, Alderman Mihevc, Alderman Devine, Alderwoman Condon and Mayor Jett. Others present: Administrator Morefield, Chief of Police Birk, Director of Public Works Schmitt, Director of Community Development Polerecky, Director of Parks and Recreation Hobson, Finance Director Lynch and Director of Economic Development Martin. Pledge of Allegiance Mayor Jett proceeded to lead those present in the Pledge of Allegiance. Public Comments Mayor Jett asked if anyone in the audience had any questions or comments for the Council Members. Those in attendance offered no comments. Consent Agenda. Motion to Approve the Following Consent Agenda Items: A. Ordinance authorizing the Mayor's execution of an Intergovernmental Agreement between the City of McHenry, McHenry County, ten additional municipalities and nine townships for the provision of McRide DIAL -A -Ride Transit Service in 2019; B. Ordinance authorizing the Mayor's execution of an Intergovernmental Agreement between the City of McHenry and the Fox Waterway Agency for the Boone Creek Dredging Project; C. Motion to waive bidding requirements and accept a proposal from Maneval Construction for emergency water main repair/replacement located at the 4300 block of Elm Street not to exceed $32,750.00; D. November 12, 2018 Council meeting minutes; E. Payment of Bills in the amount of $1,697,027 � � � Mayor Jett reported that Alderman Santi had requested to remove item SB from the consent id 11 a��C,r� agenda. He proceeded to ask the Council Members if there were any other items listed on the consent agenda they wished to remove for separate consideration. The Council Members offered no comments. A Motion was made by Alderman Curry and seconded by Alderman Santi to approve the consent agenda items 5A and 5C-5F as presented. City Council Meeting Minutes November 26, 2018 Page 2 Roll call: Vote: 7-ayes: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Curry, Alderman Mihevc, Alderman Devine and Alderwoman Condon. 0-nays, 0-abstained. Motion carried. Removed Consent Agenda Item 5.B. Ordinance authorizing the Mayor's execution of an Intergovernmental Agreement between the City of McHenry and the Fox Waterway Agency for the Boone Creek Dredging Project. Alderman Santi commended the Fox Waterway Agency for recognizing the importance of this project and the positive environmental impact the dredging of Boone Lagoon will have on the waterway system. He questioned if Staff had researched other options to assist in dredging the portion of Boone Lagoon west of Green Street to Route 120. Director Hobson replied yes. Staff is in the process of investigating other dredging options for this section of the Boone Lagoon. However, this project would involve a different methodology and a separate contractor and the City would incur a 100% of the cost. Administrator Morefield elaborated on Staff's research with respect to dredging Boone Lagoon from Green Street to Route 120. He reported that simultaneously dredging within both areas of Boone Lagoon would decrease staging and trucking cost. Alderman Glab commented on the fact that he had reservations regarding the dredging project. He recalled a project in which McCollum Lake was dredged. However, a short time later the sediment particles transported by moving currents settled in the areas still waters. Director Hobson reported that Staff would research the cost of installing an aeration system. Alderman Schaefer asked if the Army Corp of Engineers would be involved in the dredging project. Director Hobson responded yes. Alderman Glab recommended Staff research grant funding opportunities with respect to the various dredging projects Cl"d silt control. There being no further discussion on the motion, a Motion was made by Alderman Santi and seconded by Alderman Glab to approve an Ordinance authorizing the Mayor's execution of an Intergovernmental Agreement between the City of McHenry and the Fox Waterway agency for the Boon Creek Dredging Project. Roll call: Vote: 7-ayes: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Curry, Alderman Devine and Alderwoman Condon. 0-nays, 0- abstained. Motion carried. Individual Action Item Agenda. Adoption of a Resolution reducing certain cash donations for the Lincoln Hill Subdivision through September 24, 2019. City Council Meeting Minutes November 26, 2018 Page 3 Director Polerecky reported that in the past the City Council has approved reducing fees for Oaks at Irish Prairie, Liberty Trails, Patriot Estates and Legend Lakes Subdivisions until September 24, 2019. He continued on to report that Lincoln Hills is the only remaining subdivision under a current annexation agreement requesting a fee reduction. However, the entity with which the annexation agreement was executed no longer exists due to foreclosure. Therefore, in order to provide the same reduction in fees for the remaining five lots in the subdivision, Staff is asking the Council to approve a fee reduction by action of a resolution. Alderman Curry asked how many of the landholders had asked for a fee reduction. Director Polerecky replied that he had been approached by two of the landholders requesting a fee reduction. Alderman Curry noted that he didn't have a concern with granting a fee reduction. However, in his opinion the fee reduction should be granted to those soliciting the City to do so. Alderwoman Condon reported that this subdivision should be treated as those in the past. She noted that the deadline to qualify for the reduction in fees not only simplifies the process for Staff it serve as incentive to simulate the completion of all the undeveloped subdivisions. Alderman Schaefer asked if the public improvements had been completed in the Lincoln Hills Subdivision. Director Polerecky replied yes. There being no further discussion on the motion, a Motion was made by Alderman Santi and seconded by Alderman Schaefer to adopt a Resolution reducing certain cash donations for the Lincoln Hill Subdivision through September 24, 2019. Roll call: Vote: 7-ayes: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Curry, Alderman Mihevc, Alderman Devine and Alderwoman Condon. 0-nays, 0-abstained. Motion carried. Discussion Only Items Finance Director Lynch provided the Council Members with an overview of the Budget vs. Actuals for the 2nd quarter of FY-18/19. She reported that overall, the City's 30 funds are running at levels management would expect for the second quarter. The funds that received property tax receipts are all running over the expected budgeted amount of 50% because almost 100% of the property tax receipts have been received. Personnel cost has increased by 2% which is normal with respect to inflation. She commented that Enterprise Fund revenues are performing close to the budgeted amounts. However, management will closely watch water/sewer revenues to ensure the budgeted revenues are met and will cover actual expenses. City Council Meeting Minutes November 26, 2018 Page 4 Alderman Schaefer asked if the report reflected expenditures and revenues to date. Finance Director Lynch reported that the quarterly report reflects expenditures and revenues from May 1, 2018 till October 31, 2018. Alderman Glab asked if the financial reports findings were comparable to previous years. Finance Director Lynch replied yes. Staff Reports Chief Birk reported that the 22nd Judicial Circuit's Court has implemented a DUI Board similar to the Mental Health Board. He went on to report that Deputy Chief Walsh has been appointed to serve on the Board and will be attending a four day training course in Georgia. Administrator Morefield commended the Public Works and Parks Department for their great efforts in removing the early and heavy snow fall from the roadways and public ways this week. Mayor and City Council Comments Mayor Jett stated that he wanted to publicly thank Ms. Pam Althoff for her involvement in the Intergovernmental Agreement between the City and the Fox Waterway Agency for the Boone Creek Dredging Project. Alderman Schaefer stated that he wanted to publicly acknowledge and honor Mr. Donald Doherty who had served as McHenry's Mayor for 12 years and also as a County Board Member for 20 years. Executive Session None Adjournment There being no further public business to discuss, a Motion was made by Alderman Santi and seconded by Alderwoman Condon to adjourn from the public meeting at 7:31 P.M. Roll call: Vote:? -ayes: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Curry, Alderman Mihevc, Alderman Devine and Alderwoman Condon. 0-nays, 0-abstained. Motion carried. Respectfully submitted, Mayor Deputy Clerk Mv. enry, IL Expense Approval Register List of Bills Council Meeting 12-348 Vendor Name Payable Number post Date Description (Item) Account Number Vendor: BARNETT, LAURA BARNETT, LAURA INV0007131 12/03/2018 TRAINING REIMB 100-30-5430 Vendor BARNETT, [AURA Total: Vendor: CENTEGRA OCCUPATIONAL HEALTH CENTEGRA OCCUPATIONAL 218243 12/03/2018 NARAND 100-01-5110 CENTEGRA OCCUPATIONAL 218294 12/03/2018 P PADRO/1 REILLY 100-01-5110 CENTEGRA OCCUPATIONAL 218294 12/03/2018 P PADRO/1 REILLY 610.00-6940 Vendor CENTEGRA OCCUPATIONAL HEALTH Total: Vendor: COMED COMED INV0007126 12/03/2018 UTIL 100-01-5510 COMED INV0007126 12/03/2018 UTIL 100-33-5520 COMED INV0007126 12/03/2018 UTIL 10045-5510 COMED INV0007127 12/03/2018 UTIL 510-31-5510 COMED INV0007127 12/03/2018 UTIL 510-32-5510 Vendor COMED Total: Vendor: COMPASS MINERALS AMERICA COMPASS MINERALS AMERICA 342307 12/03/2018 BLK COARSE 270-00.6110 COMPASS MINERALS AMERICA 342982 12/03/2018 BLKHWYCOARSE 270-00-6110 Vendor COMPASS MINERALS AMERICA Total: Vendor: CONDUENT HR CONSULTING LLC CONDUENT HR CONSULTING 2399430 12/03/2018 OCT 2018 SVS FEES 600-00-6960 Vendor CONDUENT HR CONSULTING LLC Total: Vendor, CONSTELLATION NEWENERGY INC CONSTELLATION NEWENERGY INV0007128 12/03/2018 UTIL 100-33-5520 CONSTELLATION NEWENERGY INV0007128 12/03/2018 UTIL 100.42-5510 CONSTELLATION NEWENERGY INV0007128 12/03/2018 UTIL 100-45-5510 Vendor CONSTELLATION NEWENERGY INC Total: Vendor: CURRAN CONTRACTING COMPANY CURRAN CONTRACTING 15770 12/03/2018 COMM SURF 100-33-6110 Vendor CURRAN CONTRACTING COMPANY Total: Vendor: HRGREEN HRGREEN 3-122625 12/03/2018 IL RT 120 TO OJIBWA LN 440-00-8600 Vendor HRGREEN Total: Vendor: MCANDREWS PC, THE LAW OFFICE OF PATRICK MCANDREWS PC, THE LAW 11/22/18 12/03/2018 MTHLY 11/2018 100-01-5230 Vendor MCANDREWS PC, THE LAW OFFICE OF PATRICK Total: Vendor: MCHENRY COUNTY RECORDER OF DEEDS MCHENRY COUNTY RECORDER 2018112042 12/03/2018 CITYOFMCHENRY411STQTR 620-00-5110 Vendor MCHENRY COUNTY RECORDER OF DEEDS Total: Vendor: MID AMERICAN WATER OF WAUCONDA INC MID AMERICAN WATER OF 204875W 12/03/2018 40 FT PVC WTERMAIN 510-35-6110 Vendor MID AMERICAN WATER OF WAUCONDA INCTotal: Vendor: NICOR GAS NICOR GAS INV0007124 12/03/2018 UTIL 10043-5510 NICOR GAS INV0007124 12/03/2018 UTIL 100-45-5510 NICOR GAS INV0007124 12/03/2018 UTIL 100-46-5510 NICOR GAS INV0007124 12/03/2018 UTIL 400.00.5530 NICOR GAS INV000712S 12/03/2018 UTIL 510-31-5510 NICOR GAS INV0007125 12/03/2018 UTIL 510-32-5510 Vendor NICOR GAS Total: 11/28/J_O18 8:42:42 AP1 Amount 79.00 79.00 127.00 50.00 80.00 257.00 95.62 518,60 104.27 47.76 894.07 1,660.32 20,296.19 2,828.11 23,124.30 94.50 94.50 10.99 400.44 0.54 411.97 159.01 159.01 3,757.57 3,757.57 4,000.00 4,000.00 275.tl0 275.00 1,204.00 1,Z04.00 76.40 181.33 39.56 1,291.98 402.79 522.77 2,514.83 Expense Approval Register Packet: APPNT01335012-3-18 AP CNS Vendor Name Payable Number Post Date Description (Item) Account Number Amount Vendor: TECHNOLOGY MANAGEMENT REV FUND TECHNOLOGY MANAGEMENT T1912076 12/03/2018 OCT2018 COMM SVS 620-00-5110 10.00 Vendor TECHNOLOGY MANAGEMENT REV FUND Total: 10.00 Vendor: TYLER TECHNOLOGIES TYLERTECHNOLOGIES 025-242789 12/03/2018 7IMECLMAINT1/19-12/19 620-00-5110 413.00 Vendor TYLER TECHNOLOGIES Total: 413.00 Vendor: UPS UPS 60X485468 12/03/2018 SHIPP 100-22-5310 6.41 UPS 60X485468 12/03/2018 SHIPP 100-23-5310 4.20 Vendor UPS Total: 10.61 Grand Total: 37,971.11 11/28/2016 8:42:42 AM Expense Approval Register Fund Summary Fund 100-GENERALFUND 270 - MOTOR FUELTAX FUND 400 - RECREATION CENTER FUND 440- CAPITAL IMPROVEMENTS FUND 510- WATER/SEWER FUND 600- EMPLOYEE INSURANCE FUND 610- RISK MANAGEMENT FUND 620 - INFORMATION TECHNOLOGY FUND 11/28/2018 6:42:42 AM Grand Total: Expense Amount 5,853.37 23,124.30 1,291.98 3,757.57 3,071.39 94.50 80.00 698.00 37,971.11 Packet: APpKT01335-12-3-18 AP CKS Expense Approval Register McHenry, IL #2 List of Bills Council Meeting 12-348 MCF Zen Vendor Name • Payable Number Post Date Description (Item) Account Number Amount Vendor: ADAMS ENTERPRISES INC, R A ADAMS ENTERPRISES INC, RA S002144 12/03/2018 plow parts 430 100-33-5370 226.33 Vendor ADAMS ENTERPRISES INC, R A Total: 226.33 Vendor: ADAMS STEEL SERVICE & SUPPLY, INC ADAMS STEEL SERVICE & 353530 12/03/2018 torch tanks 100-33-5370 173.15 ADAMS STEEL SERVICE & 353531 12/03/2018 supply gauges 100-33-6270 94.58 Vendor ADAMS STEEL SERVICE & SUPPLY, INC Total: 267.73 Vendors AT&T AT&T 6201818242 12/03/2018 815 363 2129 620-00-5320 1,140.88 Vendor AT&T Total: 11140.SB Vendor: CDW GOVERNMENT INC CDW GOVERNMENT INC QBD7240 12/03/2018 Laptop for Troy Strange 620-00-6270 1,467.73 CDW GOVERNMENT INC QBF0182 12/03/2018 Surface Pro for Derik 620-00-6270 1,137.47 Vendor CDW GOVERNMENT INCTotal: 2,605.20 Vendor: COMFORT SERVICES, INC COMFORT SERVICES, INC 18458 12/03/2018 COMPRESSOR 100-01-5110 745,00 Vendor COMFORT SERVICES, INC Total: 745.00 Vendor: CORKSCREW GYMNASTICS &SPORTS ACADEMY CORKSCREW GYMNASTICS & 609 12/03/2019 Fall Session 2 100-47-5110 1,730.00 Vendor CORKSCREW GYMNASTICS & SPORTS ACADEMY Total: 11730.OD Vendor: COST ROOFING COST ROOFING 18-2015 12/03/2018 Contractual: Parks 10045-5110 10,948.00 Vendor COST ROOFING Total: 10,948900 Vendor: DIRECTV DIRECTV 35392563763 12/03/2018 Direct TV 400-00-5321 300.97 Vendor DIRECTV Total: 300.97 Vendor: ED'S RENTAL & SALES INC ED'S RENTAL & SALES INC 250150-1 12/03/2018 propane forklift 100-33-5370 55,82 Vendor ED'S RENTAL & SALES INC Total, 55.82 Vendor:FASTENAL FASTENAL ILMCH28679 12/03/2018 Misc Hardware 510-32-5380 57.70 Vendor FASTENAL Total@ 57.70 Vendor: HAWKINS INC HAWKINS INC 4399550 12/03/2018 Chemical Order 510-31-6110 3,997.68 Vendor HAWKINS INCTotal: 3,997.68 Vendor: IWPIPE TECHNOLOGY COMPANY INC IN -PIPE TECHNOLOGY 1406 12/03/2018 Monthly service fee 510-32-5110 71750,00 Vendor IN -PIPE TECHNOLOGY COMPANY INC Total: 7,750.00 Vendor: JENSEN SALES CO INC, LEE JENSEN SALES CO INC, LEE 184429 12/03/2018 35 510-35-6110 119.93 Vendor JENSEN SALES CO INC, LEE Total: 119.93 Vendor: KIEFER & ASSOC, ADOLPH KIEFER & ASSOC, ADOLPH 767768 12/03/2018 Pace Clock for MMAC 10047-6110 320.80 Vendor KIEFER & ASSOC, ADOLPH Total: 320.80 Vendor: KIMBALL MIDWEST KIMBALLMIDWEST 6755045 12/03/2018 stock Vendor ndorK-6110 264.22 KIMBALL MtDWESTTotal: 264.22 11/28/2018 8:50:20 AM Expense Approval Register Pa Cket: APPKT01336-12-3-18 RECT INVOICE Vendor Name Payable Number Post Date Description (Item) Account Number Amount Vendor: LANG AUTO GROUP, GARY LANG AUTO GROUP, GARY 6102876/1,50306B1 CR 12/03/2018 electrical repair311 100-22-5370 550.54 Vendor LANGAUTO GROUP, GARYTotal: 550.54 Vendor: MCHENRY POWER EQUIPMENT INC MCHENRY POWER EQUIPMENT 291659 12/03/2018 Snowblower parts 510-32-6110 157.51 Vendor MCHENRY POWER EQUIPMENT INC Total: 157.51 Vendor: MIDWEST METER INC MIDWEST METER INC 0105727-IN 12/03/2018 (6) O-rings 510-31-6110 45.03 Vendor MIDWEST METER INC Total: 45.03 Vendor: OLSEN SAFETY EQUIPMENT CORP OLSEN SAFETY EQUIPMENT 360588-IN 12/03/2018 see below, vendor invoice # 100.33-6110 252.80 Vendor OLSEN SAFETY EQUIPMENT CORP Total: 252.80 Vendor: PETROCHOICE LLC PETROCHOICE LLC 10758816 11/27/2018 FUEL10758816 51032-6250 952.03 PETROCHOICE LLC 10758800 12/03/2018 FUEL10758800 510-35-6250 93.14 PETROCHOICELLC 10758817 12/03/2018 FUEL-10758817 510-31-6250 269.29 PETROCHOICELLC 10758819 12/03/2018 fUEL40758819 100-33-6250 1/372401 Vendor PETROCHOICE LLC Total: 2,686.47 Vendor: PLATINUM HEATING & COOLING INC PLATINUM HEATING & 7728 12/03/2018 SW WTP-Heated Floor Boller 510-32-5375 705.00 Vendor PLATINUM HEATING & COOLING INCTotal: 70S.00 Vendor: QUALITY TIRE SERVICE QUALITY TIRE SERVICE 50295 12/03/2018 tire repair 635 510-32-5370 40.00 QUALITY TIRE SERVICE 50346 12/03/2018 flat repair 510-32-5370 40.00 Vendor QUALITY TIRE SERVICE Total: 80.00 Vendor: RED WING SHOES RED WING SHOES 20181110018401 12/03/2018 Pat Maher Clothing allowance 510-354510 112.49 Vendor RED WING SHOES Total: 112.49 Vendor: ROCK'N' KIDS INC ROCK W KIDS INC MCHF1118 12/03/2018 Cont-Tot/Kid Rock 100-46-5110 882.00 Vendor ROCK'N' KIDS INCTotal: 882.00 Vendor. SAM'S CLUB SAM'S CLUB INV0007129 12/03/2018 Spec Event - Pumpkin Party 100-46-6920 54.35 SAM'SCLUB INV0007130 12/03/2018 CoffeeSupplles 40D-40-6110 8.72 Vendor SAM'S CLUB Total: 73.07 Vendor: STEINER ELECTRIC COMPANY STEINER ELECTRIC COMPANY S006208583.001 12/03/2018 RT.120 Lift Generator Repair 510-32-5380 1,637.24 Vendor STEINER ELECTRIC COMPANY Total: 1,637.24 Vendor: TRAFFIC CONTROL & PROTECTION INC TRAFFIC CONTROL & 99549 12/03/2018 street signs 100-33-6110 195.60 Vendor TRAFFIC CONTROL & PROTECTION INC Total: 195.60 Vendor: WATER SYSTEMS ENGINEERING, INC WATER SYSTEMS 27128 12/03/2018 Well #2 Samples on Iron levels 510-31-5110 460.OD Vendor WATER SYSTEMS ENGINEERING, INCTotal: 460.00 Grand Total: 38,368.01 li/28/2018 8;50;20 AM Expense Approval Register Fund Summary Fund 100-GENERALFUND 400- RECREATION CENTER FUND 510- WATER/SEWER FUND 620- INFORMATION TECHNOLOGY FUND li/28/2018 8:50:20 AM Grand Total: Expense Amount 17,51038 309.69 16,701.26 3,74&08 38,368.01 Packet: APPKT01336 -12-3 18 RECf INVOICE Office of Finance & Accounting Carolyn Lynch, Director McHenry Municipal Center 333 Green Street McHenry, Illinois 60050 Phone: (815) 363-2100 Fax: (815) 363-2119 www.ci.mchenry.il.us REGULAR AGENDA SUPPLEMENT DATE: December 3, 2018 T0: Mayor and City Council FROM: Carolyn Lynch, Finance Director RE: Abatement of Real Estate Taxes for Various Bond Issues ATT: Abatement of Real Estate Taxes Ordinances AGENDA ITEM SUMMARY: The City of McHenry has issued a variety of bonds backed by the full faith and credit of the municipality. This requires that property taxes be levied by the County Clerk. The City's intentions are to abate these taxes through the County Clerk annually through the attached abatement ordinances. BACKGROUND/ANALYSIS: Over the years, the City of McHenry has issued a variety of bonds that pledge various funding sources for repayment backed by the full faith and credit of municipality. IIVUedging the full faith and credit of the municipality, the bond ordinances require the County Clerk to levy property taxes for the debt service required on the bonds unless an abatement of the property tax by the local municipality is approved and filed with the County Clerk. In structuring the bonds in this manner, it was the intent of the City to annually abate the taxes provided the primary source of repayment is sufficient to cover the debt service requirement. Historically, the primary source of repayment has been sufficient to cover the debt service and the property tax has been abated. Projections show that revenue sources in the coming year will continue to provide adequate coverage for debt service requirements allowing the abatement of the property tax. Consequently, in order for the County Clerk to abate or reduce the property taxes levied, the City Council will need to approve the attached ordinances authorizing the abatements as follows: 1. GO Bonds (Recovery Zone & Build America) Series 20101:5 $ 413,120.00 2. GO Bonds (Alternate) Series 2010C $ 448,440.00 3. GO Bonds (Alternate) Series 2012 $ 207,332.50 4. GO Bonds (Refunding) Series 2013 $ 36,370.00 6. GO Bonds (Refunding) Series 2015 $ 582,878.76 RECOMMENDATION: Therefore, if Council concurs, it is recommended that a motion be made to approve the attached ordinances for the abatements as listed above. ORDINANCE NO. ORD-18- AN ORDINANCE PROVIDING FOR AN ABATEMENT OF REAL ESTATE TAXES LEVIED FOR THE 2018 TAX LEVY YEAR PURSUANT TO AN ORDINANCE ADOPTED BY THE CITY COUNCIL OF THE CITY OF MCHENRY, ILLINOIS, ON FEBRUARY 1, 2010, PROVIDING FOR THE ISSUANCE OF $3,510,000 GENERAL OBLIGATION BONDS (RECOVERY ZONE & BUILD AMERICA) SERIES 2010E OF THE CITY OF MCHENRY, ILLINOIS, FOR THE LEVY AND COLLECTION OF A DIRECT ANNUAL TAX FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON SAID BONDS. WHEREAS, an ordinance was adopted by the City Council of the City of McHenry, Illinois on February 1, 2010, providing for the issuance of $3,510,000 General Obligation Bonds (Recovery Zone & Build America), Series 2010B of the City of McHenry, Illinois, for the levy and collection of a direct annual tax for the payment of the principal of and interest on said bonds. WHEREAS, the Series 20106 Bonds are payable from, and are secured by a pledge of, the City's distributive share of sales and use taxes imposed by the State of Illinois and derived from transactions at places of business located within the boundaries of the City, including monies paid by the State in replacement of the City's distributive share of such taxes; and WHEREAS, pursuant to the aforesaid Supplemental Ordinance a direct tax has been levied for the 2018 Tax Levy Year in the amount of $413,120.00 for the payment of the principal and interest due in the year 2019 on the Series 2010E Bonds authorized by said ordinance; and WHEREAS, the City's distributive share of sales and use taxes imposed by the State of Illinois and derived from transactions at places of business located within the boundaries of the City which have been pledged for the payment of the principal and interest on the Series 2010E Bonds otherwise payable from such levy for the 2018 Tax Levy Year are on deposit in the Series 2010B Project Fund established by Section 12 of the aforesaid Ordinance and it is therefore the determination of the Corporate Authorities of the City of McHenry, Illinois that the real estate taxed levied for the Tax Levy Year 2018 pursuant to said Ordinance shall be abated. NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF MCHENRY, MCHENRY COUNTY, ILLINOIS, as follows: SECTION 1. All real estate taxes authorized to be levied for the 2018 Tax Levy Year pursuant to the ordinance adopted by the City Council of the City of McHenry, Illinois on February 1, 2010, providing for the issuance of $3,510,000 General Obligation Bonds (Recovery Zone & Build America), Series 2010B of the City of McHenry, Illinois, for the levy and collection of a direct annual tax for the payment of the principal of and interest on said bonds. SECTION 2. The City Clerk shall file a certified copy of this Ordinance in the Offices of the Clerk of the County of McHenry, Illinois after the effective date of this ordinance. SECTION 3. All ordinances or parts thereof in conflict with the terms and provisions hereof be and the same hereby repealed to the extent of such conflict. SECTION 4. This ordinance shall be published in pamphlet form by and under the authority of the Corporate Authorities of the City of McHenry, Illinois. SECTION J. This ordinance shall be in full force Cl"d effect immediately from and after its passage, approval and publication, as provided by law. Passed and approved this 3rd day of December, 2018. VOTING AYE: VOTING NAY: ABSTAINED: NOT VOTING: ABSENT: Wayne S. Jett, Mayor ATTEST: Deputy City Clerk, Debra Meadows ORDINANCE NO. ORD-18- AN ORDINANCE PROVIDING FOR AN ABATEMENT OF REAL ESTATE TAXES LEVIED FOR THE 2018 TAX LEVY YEAR PURSUANT TO AN ORDINANCE ADOPTED BY THE CITY COUNCIL OF THE CITY OF MCHENRY, ILLINOIS, ON AUGUST 30, 2010, PROVIDING FOR THE ISSUANCE OF $5,665,000 GENERAL OBLIGATION BONDS (ALTERNATE) SERIES 2010C OF THE CITY OF MCHENRY, ILLINOIS, FOR THE LEVY AND COLLECTION OF A DIRECT ANNUAL TAX FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON SAID BONDS. WHEREAS, an ordinance was adopted by the City Council of the City of McHenry, Illinois on August 30, 2010 providing for the issuance of $5,665,000 General Obligation (Alternate) Bonds, Series 2010C of the City of McHenry, Illinois, for the levy and collection of a direct annual tax for the payment of the principal of and interest on said bonds. WHEREAS, the Series 2010C Bonds are payable from, and are secured by a pledge of, the City's distributive share of sales and use taxes imposed by the State of Illinois and derived from transactions at places of business located within the boundaries of the City, including monies paid by the State in replacement of the City's distributive share of such taxes; and WHEREAS, pursuant to the aforesaid Supplemental Ordinance a direct tax has been levied for the 2018 Tax Levy Year in the amount of $448,440.00 for the payment of the principal and interest due in the year 2019 on the Series 2010C Bonds authorized by said ordinance; and WHEREAS, the City's distributive share of sales and use taxes imposed by the State of Illinois and derived from transactions at places of business located within the boundaries of the City which have been pledged for the payment of the principal and interest on the Series 2010C Bonds otherwise payable from such levy for the 2018 Tax Levy Year are on deposit in the Series 2010C Project Fund established by Section 14 of the aforesaid Ordinance and it is therefore the determination of the Corporate Authorities of the City of McHenry, Illinois that the real estate taxed levied for the Tax Levy Year 2018 pursuant to said Ordinance shall be abated. NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF MCHENRY, MCHENRY COUNTY, ILLINOISI as follows: SECTION 1. All real estate taxes authorized to be levied for the 2018 Tax Levy Year pursuant to the ordinance adopted by the City Council of the City of McHenry, Illinois on August 30, 2010, providing for the issuance of $5,665,000 General Obligation Bonds (Alternate) Series 2010C of the City of McHenry, Illinois, for the levy and collection of a direct annual tax for the payment of the principal of and interest on said bonds. SECTION 2. The City Clerk shall file a certified copy of this Ordinance in the Offices of the Clerk of the County of McHenry, Illinois after the effective date of this ordinance. SECTION 3. All ordinances or parts thereof in conflict with the terms and provisions hereof be and the same hereby repealed to the extent of such conflict. SECTION 4. This ordinance shall be published in pamphlet form by and under the authority of the Corporate Authorities of the City of McHenry, Illinois. SECTION 5. This ordinance shall be in full force and effect immediately from and after its passage, approval and publication, as provided by law. Passed and approved this 3rd day of December, 2018. VOTING AYE: VOTING NAY: ABSTAINED: NOT VOTING: ABSENT: Mayor Wayne S.1ett ATTEST: Deputy City Clerk, Debra Meadows ORDINANCE NO. ORD-18- AN ORDINANCE PROVIDING FOR AN ABATEMENT %J REAL ESTATE TAXES LEVIED FOR THE 2018 TAX LEVY YEAR PURSUANT TO AN ORDINANCE ADOPTED BY THE CITY COUNCIL OF THE CITY OF MCHENRY, ILLINOIS, ON AUGUST 27, 2012, PROVIDING FOR THE ISSUANCE OF $3,100,000 GENERAL OBLIGATION BONDS (ALTERNATE), SERIES 2012 OF THE CITY OF MCHENRY, ILLINOIS, FOR THE PURPOSE OF FINANCING THE RENOVATION OF WATER TREATMENT PLANT NO. 2 AND HVAC AND ROOF REPAIRS AT THE PUBLIC WORKS GARAGE WHEREAS, an ordinance was adopted by the City Council of the City of McHenry, Illinois on August 27, 2012 providing for the issuance of $3,100,000 General Obligation Bonds (Alternate), Series 2012 of the City of McHenry, Illinois, for the purpose of financing the Renovation of Water Treatment Plant No. 2 and HVAC and Roof Repairs at the Public Works Garage; and WHEREAS, the Series 2012 Bonds are payable from, and are secured by a pledge of, the City's distributive share of sales and use taxes imposed by the State of Illinois and derived from transactions at places of business located within the boundaries of the City, including monies paid by the State in replacement of the City's distributive share of such taxes; and WHEREAS, pursuant to the aforesaid Supplemental Ordinance a direct tax has been levied for the 2018 Tax Levy Year in the amount of $207,332.50 for the payment of the principal and interest due in the year 2019 on the Series 2012 Bonds authorized by said ordinance; and WHEREAS, the City's distributive share of sales and use taxes imposed by the State of Illinois and derived from transactions at places of business located within the boundaries of the City which have been pledged for the payment of the principal and interest on the Series 2012 Bonds otherwise payable from such levy for the 2018 Tax Levy Year are on deposit in the Series 2012 Debt Service Fund established by Section 13 of the aforesaid Ordinance and it is therefore the determination of the Corporate Authorities of the City of McHenry, Illinois, that the real estate taxes levied for the Tax Levy Year 2018 pursuant to said Ordinance shall be abated. NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF MCHENRY, MCHENRY COUNTY, ILLINOISI as follows: SECTION 1. All real estate taxes authorized to be levied for the 2018 Tax Levy Year pursuant to the ordinance adopted by the City Council of the City of McHenry, Illinois on August 27, 2012, providing for the issuance of $3,100,000 General Obligation Bonds (Alternate), Series 2012 of the City of McHenry, Illinois, for the purpose of financing the Renovation of Water Treatment Plant No. 2 and HVAC and Roof Repairs at the Public Works Garage; be and they are hereby abated in the amount of 100% thereof. SECTION 2. The City Clerk shall file a certified copy of this Ordinance in the Offices of the Clerk of the County of McHenry, Illinois after the effective date of this ordinance. SECTION 3. All ordinances or parts thereof in conflict with the terms and provisions hereof be and the same hereby repealed to the extent of such conflict. SECTION 4. This ordinance shall be published in pamphlet form by and under the authority of the Corporate Authorities of the City of McHenry, Illinois. SECTION 5. This ordinance shall be in full force and effect immediately from and after its passage, approval and publication, as provided by law. Passed and approved this 3rd day of December, 2018. VOTING AYE: VOTING NAY: ABSTAINED: NOT VOTING: ABSENT: Mayor Wayne S. Jett ATTEST: Deputy City Clerk, Debra Meadows ORDINANCE NO. ORD-18- AN ORDINANCE PROVIDING FOR AN ABATEMENT OF REAL ESTATE TAXES LEVIED FOR THE 2018 TAX LEVY YEAR PURSUANT TO AN ORDINANCE ADOPTED BY THE CITY COUNCIL OF THE CITY OF MCHENRY, ILLINOIS, ON MARCH 18, 2013, PROVIDING FOR THE ISSUANCE OF $2,400,000 GENERAL OBLIGATION (REFUNDING) BONDS SERIES 2013 OF THE CITY OF MCHENRY, ILLINOIS, TO REFUND SERIES 2005 GENERAL OBLIGATION BONDS AND ISSUE $415,000 FOR REPAIRS TO THE PUBLIC WORKS BUILDING AT 1415 INDUSTRIAL DRIVE. WHEREAS, an ordinance was adopted by the City Council of the City of McHenry, Illinois on March 18, 2013, providing for the issuance of $2,400,000 General Obligation (Refunding) Bonds, Series 2013 of the City of McHenry, Illinois, to refund Series 2005 General Obligation Bonds and issue $415,000 for repairs to the Public Works Building at 1415 Industrial Drive. WHEREAS, the Series 2013 Bonds are payable from, and are secured by a pledge of, the City's distributive share of sales and use taxes imposed by the State of Illinois and derived from transactions at places of business located within the boundaries of the City, including monies paid by the State in replacement of the City's distributive share of such taxes; and WHEREAS, pursuant to the aforesaid Supplemental Ordinance a direct tax has been levied for the 2018 Tax Levy Year in the amount of $36,370.00 for the payment of the principal and interest due in the year 2018 on the Series 2013 Bonds authorized by said ordinance; and WHEREAS, the City's distributive share of sales and use taxes imposed by the State of Illinois and derived from transactions at places of business located within the boundaries of the City which have been pledged for the payment of the principal and interest on the Series 2013 Bonds otherwise payable from such levy for the 2018 Tax Levy Year are on deposit in the Series 2013 Project Fund established by Section 13 of the aforesaid Ordinance and it is therefore the determination of the Corporate Authorities of the City of McHenry, Illinois that the real estate taxed levied for the Tax Levy Year 2018 pursuant to said Ordinance shall be abated. NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF MCHENRY, MCHENRY COUNTY, ILLINOIS, as follows: SECTION 1. All real estate taxes authorized to be levied for the 2018 Tax Levy Year pursuant to the ordinance adopted by the City Council of the City of McHenry, Illinois on March 18, 2013, providing for the issuance of $2,400,000 General Obligation (Refunding) Bonds, Series 2013 of the City of McHenry, Illinois, to refund Series 2005 General Obligation Bonds and issue $415,000 for repairs to the Public Works Building at 1415 Industrial Drive. SECTION 2. The City Clerk shall file a certified copy of this Ordinance in the Offices of the Clerk of the County of McHenry, Illinois after the effective date of this ordinance. SECTION 3. All ordinances or parts thereof in conflict with the terms and provisions hereof be and the same hereby repealed to the extent of such conflict. SECTION 4. This ordinance shall be published in pamphlet form by and under the authority of the Corporate Authorities of the City of McHenry, Illinois. SECTION 5. This ordinance shall be in full force and effect immediately from and after its passage, approval and publication, as provided by law. Passed and approved this 3rd day of December, 2018. VOTING AYE: VOTING NAY: ABSTAINED: NOT VOTING: ABSENT: Mayor Wayne S.1ett ATTEST: Deputy City Clerk, Debra Meadows ORDINANCE NO. ORD-18- AN ORDINANCE PROVIDING FOR AN ABATEMENT OF REAL ESTATE TAXES LEVIED FOR THE 2018 TAX LEVY YEAR PURSUANT TO AN ORDINANCE ADOPTED BY THE CITY COUNCIL OF THE CITY OF MCHENRY, ILLINOIS, ON APRIL 20, 2015, PROVIDING FOR THE ISSUANCE OF $6,375,000 GENERAL OBLIGATION (REFUNDING) BONDS SERIES 2015 OF THE CITY OF MCHENRY, ILLINOIS, TO REFUND SERIES 2006 GENERAL OBLIGATION BONDS, ADVANCE REFUND SERIES 2007 GENERAL OBLIGATION BONDS AND ISSUE $2,015,000 FOR CONSTRUCTION OF THE RECREATION CENTER AT 3636 MUNICPAL DRIVE. WHEREAS, an ordinance was adopted by the City Council of the City of McHenry, Illinois on April 20, 2015, providing for the issuance of $6,375,000 General Obligation (Refunding) Bonds, Series 2015 of the City of McHenry, Illinois, to refund Series 2006 General Obligation Bonds, advance refund Series 2007 General Obligation Bonds, and issue $2,015,000 for construction of the Recreation Center at 3636 Municipal Drive. WHEREAS, the Series 2015 Bonds are payable from, and are secured by a pledge of, the City's distributive share of sales and use taxes imposed by the State of Illinois and derived from transactions at places of business located within the boundaries of the City, including monies paid by the State in replacement of the City's distributive share of such taxes; and WHEREAS, pursuant to the aforesaid Supplemental Ordinance a direct tax has been levied for the 2018 Tax Levy Year in the amount of $582,878.76 for the payment of the principal and interest due in the year 2019 on the Series 2015 Bonds authorized by said ordinance; and WHEREAS, the City's distributive share of sales and use taxes imposed by the State of Illinois and derived from transactions at places of business located within the boundaries of the City which have been pledged for the payment of the principal and interest on the Series 2015 Bonds otherwise payable from such levy for the 2018 Tax Levy Year are on deposit in the Series 2015 Project Fund established by Section 13 of the aforesaid Ordinance and it is therefore the determination of the Corporate Authorities A the City of McHenry, Illinois that the real estate taxed levied for the Tax Levy Year 2018 pursuant to said Ordinance shall be abated. NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF MCHENRY, MCHENRY COUNTY, ILLINOIS, as follows: SECTION 1. All real estate taxes authorized to be levied for the 2018 Tax Levy Year pursuant to the ordinance adopted by the City Council of the City of McHenry, Illinois on April 20, 2015, providing for the issuance of $6,375,000 General Obligation (Refunding) Bonds, Series 2015 of the City of McHenry, Illinois, to refund Series 2006 General Obligation Bonds, advance refund Series 2007 General Obligation Bonds, and issue $2,015,000 for construction of the Recreation Center at 3636 Municipal Drive. SECTION 2. The City Clerk shall file a certified copy of this Ordinance in the Offices of the Clerk of the County of McHenry, Illinois after the effective date of this ordinance. SECTION 3. All ordinances or parts thereof in conflict with the terms and provisions hereof be and the same hereby repealed to the extent of such conflict. SECTION 4. This ordinance shall be published in pamphlet form by and under the authority of the Corporate Authorities of the City of McHenry, Illinois. SECTION 5. This ordinance shall be in full force and effect immediately from and after its passage, approval and publication, as provided by law. Passed and approved this 3rd day of December, 2018. VOTING AYE: VOTING NAY: ABSTAINED: NOT VOTING: ABSENT: Mayor Wayne S. Jett ATTEST: Deputy City Clerk, Debra Meadows MV NO SOY RIVCR Derik Morefield, City Administrator McHenry Municipal Center 333 Green Street McHenry, Illinois 60050 Phone: (815) 363-2100 Fax: (815) 363-2119 dmorefield@ci.mchenry.il.us DISCUSSION AGENDA ITEM DATE: December 3, 2018 TO: Mayor and City Council FROM: Derik Morefield, City Administrator Ross Polerecky, Community Development Director John Birk, Chief of Police Jon Schmitt, Public Works Director Carolyn Lynch, Finance Director Bill Hobson, Parks & Recreation Director Doug Martin, Economic Development Director RE: Presentation by Leopardo Companies, Inc. regarding addressing capital infrastructure needs through the implementation of energy improvements. ATT: Leopardo Companies, Inc. Presentation Information AGENDA ITEM SUMMARY: efficiency The purpose of this agenda item is for Leopardo Companies, Inc. to provide Council with information regarding opportunities to address the City's capital infrastructure needs related to public facilities and vehicle replacement through the implementation of energy efficiency improvements. Based on the presentation and resulting Council discussion, a Letter of Intent would be presented to Council for approval at a subsequent meeting to engage Leopardo Companies, Inc. for the development and implementation of such a program. BACKGROUND: The City of McHenry is facing a significant financial dilemma regarding its ability to fund future capital improvements (public facilities, vehicle and equipment replacements, streets, and stormwater/drainage improvements). Despite steadily increasing revenues from sales and income taxes, increases to operating costs, along with maintaining level property tax revenues, have resulted in the City having insufficient funds to meet the capital needs of the municipality. The City of McHenry is dedicated to providing the citizens, businesses and visitors of McHenry with the highest quality of programs and services in acustomer-oriented, efficient and fiscally responsible manner. As an example of the extreme nature of this situation, the City Administration is currently developing the FY19/20 — FY23/24 Capital Improvement Plan which identifies all municipal capital improvement needs of $10,000 or more. Based on the requests submitted by Department Directors, the plan includes $830,000 in public facility maintenance improvements, $6 million in vehicle and equipment replacement needs (not new but replacements), and nearly $51 million in streets -related projects. Overall, the 5-year CIP includes more than $65 million in projects that would require funding through the City's General Fund or via some other mechanism. Unfortunately, only $6.8 million (10.5%) is identified for implementation of these projects and, of this amount, $4 million is from non -municipal sources (e.g., grants, Federal or State programs), meaning that only $2.8 million is identified for capital improvements over the next 5 years. In short, without identifying alternative sources of revenues to fund capital improvement projects, the City will continue to delay these improvements resulting, among other things, in increased maintenance costs. ANALYSIS: At last May's International Convention of Shopping Centers (ICSC) event, Mayor Jett and Staff net with Leopardo Companies, Inc. to discuss opportunities for the City to reduce annual costs through the implementation of energy efficiency programs. The cost savings would then be used to finance improvements to public facilities. Additionally, opportunities for meeting our vehicle replacement needs through leasing programs was discussed. Leopardo Companies, Inc. is headquartered in Hoffman Estates, Illinois and started as a construction company but has branched out to offer a variety of services related to preconstruction, construction, design -build, development, sustainability, building services, self -performance, and building information modeling. Their website is www.leopardo.com. Over last summer, Leopardo and Staff met to discuss the specific needs of the City and Leopardo conducted a preliminary audit of municipal costs related to utility expenses, public facility maintenance costs, and vehicle replacements to determine if there exists the potential for the reduction of utility costs and subsequent reinvestment of those costs into public facility maintenance projects. No municipal funds were expended on this feasibility audit. This study has now been completed and it has been identified that opportunities for energy efficiencies, costs savings, and public facility reinvestment exist. Since the City is just entering its Capital Improvement Program development process, to be followed by the development of the FY19/20 Budget, it is an opportune time for Leopardo to present their findings to Council. In summary, Staff believes that the analysis conducted by Leopardo provides the City with an opportunity to identify cost savings that could be directed to public facility maintenance projects. Additionally, it has been identified that leasing vehicles is a more cost effective way of managing the City's fleet than attempting to rotate vehicles through purchase. It should be clarified however, that this plan is not the panacea for meeting all of the City's financial needs related to capital improvements. While its implementation may result in increased efficiency and costs savings that can be redirected to other capital projects, the City's public infrastructure needs far exceed the current funding resources. This is simply one tool that may be implemented to assist in meeting the City's capital improvement goals. However, it does provide the opportunity to reduce the competition for funding in the Capital Improvement Program and Annual Budget by removing public facility maintenance projects so that funding can be directed towards other capital projects, such as streets. In order to more fully present this information, and provide Council with an opportunity to discuss this potential, representatives from Leopardo have been asked to present information at the December 3, 2018 City Council Meeting. Should Council be interested in working with Leopardo in implementing the package presented, the City would enter into formal agreement with Leopardo for services. This would be brought back to Council at a future meeting, as early as December 17th. No action is being requested at this time. Attached to this supplement is a copy of the information that will presented to Council on December 3ra Leopardo Council Presentation City ofMcHenry, IL December 3, 2018 CONTENTS 1. Introduction of Leopardo Team 2. Capital Creation Strategies for Municipalities 3. Review Validation Report Key Findings • Existing Building Conditions • Existing Fleet Conditions • Solar Power Purchase Agreement /Additional Scope • Guaranteed Operational Savings 4. Procurement &Risk Assessment 5. Project Economics —GUARANTEED RESULTS 6. Next Steps —Execution of Letter of Intent Introduction of Team Rob Vollrath Chief Business Officer Anthony J. Leopardo Director, Strategic Relations Chris Knosp Director, Fleet Solutions Justin Jezierski Project Consultant LEOPARDO'S UNIQUE OFFERINGS PERFORMANCE CONTRACTS 6B SINCE 2010 City of McHenry, IL Council Presentation Joe Frankini, P.E., LEED AP Senior V.P. of Operations Drake Wahlers, P.E., CEM V.P. of Engineering Mike Mrachek Senior Project Manager Jason Slattery Director of Solar Z Capital Creation Strategies for Municipalities What is Capital Creation Strategies? Promotes Operational Conservation Projects/Infrastructure Improvements -through guaranteed energy savings -through guaranteed operational savings -verification of annual savings through a monitoring program Guaranteed Project Cost No Change Orders -Guaranteed Equipment Performance -Ongoing Operational Support -Single Point of Accountability Creative Financing —Operating lease subject to annual appropriation -Does not affect municipalities borrowing, or bonding capacity/ability -Avoids using money from capital or operating budgets to address building improvement needs �A � City of McHenry, IL Council Presentation 3 Review Validation Report Key Findings Existi Building Conditions Building Conditions Lighting The City of McHenry recently updated the lighting in some of their facilities, including the Department of Public Works and the Police Department build out in the City Hall. However, the majority of the remaining buildings utilize outdated T12 fluorescent lighting. T8 fluorescent, metal halide, halogen and high-pressure sodium lighting are found throughout the city. Leopardo proposes that the remaining interior lighting and exterior building lighting, including park lighting fixtures, be retrofitted with LED lamps or fixtures. The LED market is rapidly growing, pushing the direction of the lighting industry to produce more LED options at a lower cost. One of the largest energy uses in a building is lighting. LEDs have the potential to reduce lighting energy by 40-50%. One of LED's main efficiency components is its ability to emit light in a specific direction. This reduces the need for reflectors and diffusers. Also, LED's potentially have double the lifespan of a conventional fluorescent lamp, thereby reducing maintenance costs. City of McHenry, IL Council Presentation Review Validation Report Key Findings Existing Building Conditions Street Lighting According to city records, the City owns and operates approximately 400 street and parking lights. A portion of these lights have already been converted to LED, however, a significant amount of lighting is still in need of retrofit or replacement to LED. Street lights are controlled by both photo sensors and time of day astronomical schedules. Exact quantities of LED and HID were not available. The below assumptions were taken in calculating savings: Lamp Style Lamp Wattage Quantity LED N/A 35 H PS 150 watt 172 H PS 250 watt 121 HIPS 400 watt 18 Total Street Lights 346 The City spends approximately $302,000 annually in street lighting utility costs, including both City -owned lights and utility -owned lights. There are multiple billing structures for the various utility accounts. There are multiple options when replacing street lighting. It is possible to only replace the lamp (not the fixture) or to replace the whole lighting fixture. Leopardo recommends a complete LED fixture replacement of the street lights 5 City of McHenry, IL Council Presentation Review Validation Report Key Findings Mechanical Upgrades = HVAC One of the more critical City needs is to address the older HVAC equipment throughout the City. There are multiple systems near the end of their useful lives which should be replaced. Replacing this equipment will have multiple benefits. First, it will allow for higher efficiency equipment to be installed. Specifically, cooling efficiencies have increased greatly since a much of McHenry's equipment was installed, so installing new equipment would allow the City to see a reduction in cooling costs if the equipment is operated correctly. Secondly, the newer equipment would require less maintenance. There is a much smaller chance of new equipment needing to be repaired than older equipment. Capital cost avoidance will be observed as well, as the older existing systems are prone to failure given their age. Leopardo proposed to install new HVAC equipment in the City Hall, Parks Maintenance Garage, Knox Park/Merkel Aquatic Center, and WWTP. Equipment should I with new, high efficiency equipment. City of McHenry, IL Council Presentation L�J Review Validation Report Key Findings Existing Buildi Conditions Envelope cam Roof The existing roof on the City of McHenry's City Hall building is quickly deteriorating. The existing city hall roof is original to the building (1991) and is approximately 27 years old. The expected life for a roof of this type is 15-20 years. In recent years, the roof has had multiple leaks which have been repaired. The roof should have a major rehabilitation or be fully replaced in the next few years to prevent considerable damage. 7 City of McHenry, IL Council Presentation Review Validation Report Key Findings Existing Buildin Conditions Envelope Upgrades (continued) Leopardo recommends the complete re -roof of the City Hall. This option is the most cost- effective option without additional capital contributions in the near future. Windows There are a number of existing windows at the Department of Public Works building which are in need of replacement. The windows on the second floor of the office currently allow significant amount of heat gain which makes the office area uncomfortably warm. The windows appear to be original to the building. Additionally, the two (2) windows in the police storage area of the Department of Public Works are in of replacement. These windows present a security concern for the storage area and appear to be original to the building. Leopardo recommends the replacement of the windows at the Public Works facility. City of McHenry, IL Council Presentation Review Validation Report Key Findings Existing Buildi Conditions Salt Storage Currently, the City stores its salt for roads on an uncovered concrete pad at the Wastewater Treatment Plant. This location is inadequate for the City's current road maintenance operations. Existing Salt Storage Location (WWTP) Leopardo recommends building a new salt dome at the Public Works facility. Locating the new dome to Public Works will be much more convenient for the city's salt trucks. Providing an enclosure for the salt will enable road maintenance crews to operate more efficiently. Additionally, the new dome shall provide significantly increased capacity for salt storage. City of McHenry, IL Council Presentation Review Validation Report Key Findings Existing Fleet Conditions Existing Conditions According to the information provided by the City of McHenry, the City currently owns and maintains a fleet of 107 vehicles ranging in age from 1 to 24 years from a variety of manufacturers. The City averages $414,387 in vehicle maintenance and repair costs. Given the age and condition of the existing fleet vehicles, there are significant opportunities in reducing the maintenance and operational costs in the City of McHenry's police fleet. Below is a graphical summary of the current city owned &operated fleet: Overall Fleet Qty: Over 10 Years old 52 5 40 years old 16 Under 5 Year 39 Tota I 107 Fleet Overview ■ Over 10 Years old 5 -10 years old ■Under 5 Year City of McHenry, IL Council Presentation 10 Review Validation Report Key Findings Existing Fleet Conditions City of McHenry Vehicle (Capital) Requests vs. Approved and Budgeted — Last 6 Years Vehicle Replacement Cost by Department Police 34 $1,369,671 Street 33 $31561,041 Parks 13 $428,779 Admire 6 $209,441 Water 6 $179,251 Wastewater 8 $566,786 Utilities 7 $404,441 City of McHenry, IL Council Presentation Replacement Cost 10 Years or Older Police IAKOIIIIQ�m 6 $199,758 Street 20 $2,723,017 Parks 10 $323,475 Admin 5 $175,290 bVater 2 $68,465 Wastewater 4 $152,630 Utilities 5 $361,716 Review Validation Report Key Findings Existing Fleet Conditions Fleet Leasing Program Leopardo recommends that the City of McHenry implement a fleet management program to include vehicle leasing. Features of the open-ended leasing product are characterized by: • Improved cash flow • No mileage restrictions or wear and tear charges • Flexible financing options • Flexibility of ownership • Customized terms for use and type of vehicle • • Retention of ownership rights • Aftermarket can be included in lease • Vehicles delivered "road ready" • Initial registration and annual license renewals can be included Where normally a vehicle would be purchased outright from the capital budget and kept in fleet until a specified time when it was sold, the open-ended lease allows for payment/funding of the portion of the vehicle used. This approach allows municipalities to pay the minimum value for the use of the vehicle on a monthly basis, improving cash flow. The mechanics of this lease involves financing the difference between the vehicle's purchase price and a conservative reduced book value (RBV), which is based on the anticipated market value considering the vehicles age and application (see example below). Options at completion of lease term: • McHenry can replace its vehicles with new models and apply any gains to the replacement vehicle • McHenry can turn vehicles in early or extend leases based on needs • McHenry can purchase the vehicle at the reduced book value Leopardo's fleet solutions partners can sell your current, aged fleet inventory through resale channels in a competitive market. All vehicle resale gains are the city's to keep. Gains through the open-end lease are defined as the difference between the resale proceeds from our remarketing efforts and the open market sale and the reduced book value. There are no mileage charges or excessive wear and tear charges 12 City of McHenry, IL Council Presentation Review Validation Report Key Findings Existing Fleet Conditions 10 Year Vehicle Leasing Replacement Plan -General Fund General Fund Fleet Cost Analysis McHenry, IL Year 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Total New Vehicles in Service 29 24 7 12 21 3 4 24 25 8 157 Total Purchase Spend $2,277,728 $1,335,999 $377,383 $7100963 $1,192,823 $139,699 $186,265 $2,044,896 $1,382,565 $423,950 $10,072,271 Total Lease Spend $469,593 $752,374 $833,827 $975,424 $1,151,835 $1,152,881 $1,154,311 $1,166,779 $1,175,591 $1r178,324 $101010,939 Difference $1,808,135 $583,625 -$456,444 -$2640461 $40,987 -$1,01%182 -$968,046 $87%117 $206,974 -$754,374 $61,332 Historical Annual Maintenance Spend $241,244 $241,244 $2410244 $241,244 $241,244 $241,244 $241,244 $241,244 $241,244 $241,244 $2,412,437 Estimated Annual Maintenance Spend $80,921 $80,921 $80,921 $80,921 $80,921 $80,921 $80,921 $8%921 $80,921 $80,921 $80%213 Difference $16%322 $160,322 $160,322 $160,322 $160,322 $160,322 $160,322 $160,322 $160,322 $16( 2 $1,603,224 Overall Fleet 00 00) $IFS001000 $11000J000 i I i $500000 i Total PUrchase Spend R Total Lease Spend City of McHenry, IL Council Presentation Review Validation Report Key Findings Existi Fleet Conditions 10 Year Vehicle Leasing Replacement Plan - Enterprise Fund Enterprise Fund Fleet Cost Analysis McHenry, IL Year 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Total New Vehicles in Service 7 7 0 2 3 0 0 8 8 0 35 Total Purchase Spend $344,660 $310,245 $0 $35,156 $170,125 $0 $0 $48%806 $455,392 $0 $1,805,383 Total Lease Spend $67,734 $128,707 $128,707 $135,617 $16%052 $169/052 $169,052 $19%607 $229,959 $229,959 $1,627,447 Difference $276,926 $181,538 -$1281707 -$1001461 $1,073 -$169,052 -$169,052 $290,199 $225,432 -$2291959 $1770936 Historical Annual Maintenance Spend $39,108 $39,108 $390108 $39,108 $39,108 $39,108 $39,108 $39,108 $39,108 $39,108 $391,082 Estimated Annual Maintenance Spend $14,987 $14,987 $14,987 $14,987 $14,987 $14,987 $14,987 $14/987 $14/987 $14,987 $149,868 Difference $240121 $24,121 $24,121 $24,121 $24,121 $24,121 $24,121 $24,121 $24,121 524,121 $241,214 Overall Fleet S60U00 GO $30000() it $200,000 0• rrr so Total Purchase Spend M Total Lea5e Spend 14 City of McHenry, IL Council Presentation Review Validation Report Key Findings Solar Power Purchase Agreement / Additional Sco Solar Power Purchase Agreement With the modernized utility infrastructure in Northern Illinois, McHenry has the opportunity to install a solar array on their property. A Power Purchase Agreement (PPA) is a financial arrangement in which a third -party developer provides design, permitting, and installation of a solar array on the City's property. Through this agreement, the City purchases the electricity from the developer while the developer operates and maintains the array. These agreements typically last between 10 and 25 years. Upon expiration of the agreement, the City owns the solar array. Main benefits of the solar array include: • No or low upfront capital cost. • Limited risk to the City. The developer operates and maintains the system during the agreement term. • Energy cost reduction over the term of the agreement. • Significant reduction of electricity purchased from fossil fuels. Based on a preliminary assessment of the City's available land and utility services, Leopardo proposes the following opportunity for a Solar PPA: • The City would lease 20 acres of available land to the solar developer at a rate of $1,000/acre/year. This would yield $20,000 per year in revenue for the City. • The solar developer would construct a 5MW solar array on the leased property and sell power to various subscribers at $0.045/kWh. The city shall purchase power from the solar array, yielding utility savings of $121,534 per year. 15 City of McHenry, IL Council Presentation qLi t j 1228.7 It as -y6 r � `J Review Validation Report Key Findings Solar Power Purchase Agreement / Additional Sco Below is a diagram illustrating The City of McHenry and the Solar Developer: During the investment -grade audit, Leopardo will conduct a thorough analysis on the feasibility of a solar PPA0 17 City of McHenry, IL Council Presentation Review Validation Report Key Findings Solar Power Purchase Agreement / Additional Scope Additional Scope Information Technology (IT) Equipment Rental Technology is constantly developing and providing more useful and time conserving ways to manage data. Renting IT equipment often provides an opportunity to upgrade IT infrastructure (phones, computers, servers, etc.) more frequently than purchasing. This allows for the latest technology to be implemented. Leopardo proposes the City consider moving to an equipment rental program. Billing Auditing IT Bill Auditing provides an opportunity to assess if there are any errors in monthly bills or if better rates for the same or better services can be obtained. Leopardo proposed the City consider having the IT bills audited. Energy Procurement In addition to energy conservation measures, Leopardo will investigate how the City purchases their energy. Since Illinois is a deregulated state in terms in energy purchasing, The City can choose their energy providers for electricity and natural gas. The City currently has some agreements in place with providers. During the investment -grade audit, Leopardo will determine the maximum savings potential by switching from the existing providers. 111111 r=, 0 - I11111 r=,0 II1111 r O City of McHenry, IL Council Presentation F�3 Review Validation Report Key Findings Guaranteed uneratinnal Saw Guaranteed Operational Savings ANNUAL COST SAVINGS UTILITIES —BUILDINGS, STREET LIGHTING, & LIFT STATIONS TELEPHONE & IT FLEET FUEL FLEET MAINTENANCE SOLAR PPA LAND LEASE REVENUE STREET LIGHTING MAINTENANCE Total City of McHenry, IL Council Presentation Current Expenses Guaranteed Guaranteed Future Spend Savings $806,288 $670,634 $135,654 $115,124 $2021000 41387 $80,710 $18 31781 $229,944 $34,414 $13,219 $184,443 $20,000 $1,120 $388,850 Procurement & Risk Assessment CONTRACT METHODS TRADITIONAL CONSTRUCTION PERFORMANCE CONTRACTING RISK ASSESSMENT i iO f J � � Owner j AE/GC Owner leopardo Schedule Risk ✓ V/ Financing Risk Design Engineering Performance Guarantee f Cost Guarantee Project Management Results Accountability ,✓ 20 City of McHenry, IL Council Presentation Project Economics Project Economics City Hall Depa rtment of Publ i c Works Merkel Aquatic Center Park Maintenance Garage Petersen Park Veteran's Park Water Plant #4 Well #5 Well #7 Water Plant W W TP Project Investment —Option 1 Project Investment —Option 2 Guaranteed Annual Savings Total Program Savings (20 years) Program Useful Life City of McHenry, IL Council Presentation �.�,���4��,+ �°emsply `er,aO•�a0 eo e.� J1440AO� $2,095,239 $3,256,100 $388,850 $8,285,575 20 years zi Project Economics TOTAL PROJECT CASH FLOW AND FINANCIAL ANALYSIS Year 0 (Const. Period) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Totals: City of McHenry, IL Council Presentation The City of McHenry, Illinois Option 1- Without Salt Dome Project Cost: $2,095,239 Amount Financed: $2,095,239 Utility Rebates: $68,984 Rate of Financing: 4M% Term of Financing: 15 Program Cashflow: $5,458,854 Total Annual Savings $166,196 $388,850 $390,489 $392,152 $393,842 $395,557 $397,298 $399,066 $400,862 $402,686 $404,539 $406,421 $408,333 $410,275 $412,248 $414,253 $416,291 $418,362 $420,467 $422,606 $424,781 $8,285,575 Debt Cumulative Payment Cash Flow $0 $166,196 $1881448 $366,598 $1881448 $568,639 $1881448 $772,343 $1881448 $977,736 $1881448 $1,184,845 $1881448 $1,393,695 $1881448 $1,604,313 $1881448 $1,816,727 $1881448 $2,030,966 $1881448 $2,247,057 $1881448 $2,465,029 $1881448 $2,684,914 $188,448 $2,906,741 $1881448 $3,130,541 $1881448 $3,356,346 $0 $3,772,637 $0 $4,190,999 $0 $4,611,466 $0 $5,034,073 $0 $5,458,854 $2,826,721 $5,458,854 22 Project Economics TOTAL PROJECT CASH FLOW AND FINANCIAL ANALYSIS For The City of McHenry, Illinois Option 2 - Includes Salt Dome Project Cost: $3,256,100 Amount Financed: $3,256,100 Utility Rebates: $68,984 Rate of Financing: 4.00% Term of Financing: 15 Program Cashflow: $3,779,823 Year Total Annual Savings Debt Cumulative Payment Cash Flow 0 (Const. Period) $164,803 $0 $164,803 1 $383,275 $292,857 $255,220 2 $384,914 $292,857 $347,276 3 $386,577 $292,857 $440,997 4 $388,267 $292,857 $536,406 5 $389,982 $292,857 $633,530 6 $391,723 $292,857 $732,396 7 $393,491 $292,857 $833,030 8 $395,287 $292,857 $935,460 9 $397,111 $292,857 $1,039,714 10 $398,964 $292,857 $1,145,821 11 $400,846 $292,857 $1,253,810 12 $402,758 $292,857 $1,363,710 13 $404,700 $292,857 $11475,552 14 $406,673 $292,857 $1,589,368 15 $408,678 $292,857 $1,705,190 16 $410,716 $0 $2,115,906 17 $412,787 $0 $2,528,693 18 $414,892 $0 $2,943,585 19 $417,031 $0 $3,360,616 20 $419,206 $0 $3,779,823 Totals: $8,172,681 $4,392,859 $3,779,823 23 City of McHenry, IL Council Presentation Next Steps Execution of Letter of Intent (LOI) Letter of Intent December 3`d, 2018 Mayor Wayne Jett City of McHenry 333 S. Green Street McHenry, IL 60050 RE: Letter of Intent Dear Mayor Jett: Leopardo Companies, Inc. ("Contractor") presented a feasibility study, dated September 6th, 2018, to the City of McHenry ("Owner"). The Owner has reviewed the study and has chosen Contractor as the provider for services. The intent of the project offering is to provide modernization and upgrades to the current infrastructure. The finalized scope of work, installation cost, and savings are to be determined under the negotiated final design. It is the intent to negotiate in good faith and enter into an agreement with Contractor. The execution of a final Guaranteed Performance Contract will be contingent upon the following items: • Contractor will perform a detailed engineering assessment, systematic pre -measurement, and the necessary engineering services to properly design the systems, savings, and renovations that the Owner chooses to implement. • The Owner shall have input into the design and selections of the systems and the scope of the renovation work to best meet the intended outcome. • Provided that the Contractor presents a budget neutral or better project to the Owner, in the event that the Owner chooses not to move forward with any Guaranteed Performance Contract, it is agreed that Contractor will be reimbursed for all costs incurred including technical, engineering, planning, measurement, and preparation of the agreement. • The reimbursement rate will be calculated at a cost of $50,000.00 plus any hard costs that Contractor incurs. Both parties agree that an agreement will be entered into within ninety (90) days of the date of this letter. City of McHenry By: Title: Date: City of McHenry, IL Council Presentation Leopardo Companies, Inc. By: Title: Date: Derik Morefield, City Administrator McHenry Municipal Center 333 Green Street McHenry, Illinois 60050 Phone: (815) 363-2100 Fax: (815) 363-2119 dmorefield@ci.mchenry.il.us DISCUSSION AGENDA ITEM DATE: December 3, 2018 TO: Mayor and City Council FROM: Derik Morefield, City Administrator RE: Discussion regarding solicitation of proposals for the redevelopment of the former Central Wastewater Treatment Plant (CWWTP) Site ATT: Appraisal by Harrison &Associates, Inc. (includes site location maps) Topographic Survey As Council is aware the Central Wastewater Treatment Plant (CWWTP) has been decommissioned. As of the end of this calendar year the site is available for redevelopment. The City has already been approached by at least two entities interested in redeveloping the approximate 7-acre site for mixed -use development. Prior to moving forward, Staff believes that a discussion, or discussions, at the Council level to provide an opportunity for input as to the type or vision of redevelopment is appropriate. This may conclude with the development of a formal Request -for -Proposal (RFP) document that could be made available for interested parties to review and provide a written response. Attached is a formal appraisal that was completed in late October and transmitted to Staff on November 14, 2018 which identes, with certain assumptions, a land value of $1,268,000 and a boat launch/slip value of $223,000, Demolition of the site is estimated at between $1.5 and $2 million. The City of McHenry is dedicated to providing the citizens, businesses and visitors of McHenry with the highest quality of programs and services in acustomer-oriented, efficient and fiscally responsible. manner. Frank E. HaxLM", MAI State CertifiedeGeneral-Illinois November 14, 2018 Mr. Douglas P. Martin City of McHenry 333 S. Green Street McHenry, IL 60050 In Re: Our bile No. 11244 Post Office Box 684 Woodstock, Illinois 60098eO684 Telephone: (815) 33&3004 Cell Phone: (815) 382-2877 Fax: (815) 33&3387 email: appraise@mc.net Central Wastewater Treatment Plant Dear Mr. Martin: As requested, I have inspected the property known as the Central Wastewater Treatment Plan site, consisting of a 7.23-acre site at the east terminus of Waukegan Road, at the Fox River, in McHenry, Illinois. Part of this property consists of McHenry's central wastewater treatment plant, which I believe was recently decommissioned. The other part of this property consists of the former Bruce Marina, which is improved with several marina -related building improvements as well as 66 boat slips in a lagoon off of the Fox River. This inspection was made for the purpose of developing a market value opinion of the fee simple interest, subject to tlae Limiting Condr'tions and Assumptions contained in the report as well as to the extraordinary assumptions and Hypothetical conditions explained in the Scope of Work section of the attached appraisal report, as of October 22, 2018, the initial date of inspection of the subject property. The accompanying report, consisting of 44 pages including exhibits, describes the method of approach to value, together with the conclusions derived by development of the sales comparison approach. Please note the Limiting Conditions and Assumptions on pages 1 and 2 of the report, the legal description section on page 3 of the report, the Definitions section on page 4 of the report, the Scope of Work (particularly with reference to the extraordinary assumptions and hypothetical conditions relative to this assignment) on pages 5 through 7 of the report. Mr. Douglas P. Martin, File No. 11244, Central Wastewater Treatment Plant November 14, 2018 By reason of my analysis of the market data gathered during my investigation, tempered by my judgment and experience, I have formed the opinion that market value of the fee simple interest of the subject property was, stthject to the Limiting Conditions and Assumptions contained lit the report as ;yell as to the extraordinaq assumptions and hypothetical conditions explained in the Scope of Work section of the attached appraisal report, as of October 22, 2018, measured in amount of $1.491 MILLION DOLLARS---------------------------------------------------------------($1,491,000). Allocation The value of the subject property concluded in this appraisal — $1,491,000 — is allocated as $1,268,000 to the land and improvements and $223,000 to the boat launch and boat slip entitlements. Thaiilc you for allowing me to assist you in this matter. If I can be of any fiuther assistance, please let me know. submitted, Franlc E. Hai7ison, AI #553.0000005 (Illinois) Expires 9/30/19 FEH:kah �AIZRISON � Associates, Inc. 11244 THE CENTRAL WASTEWATER TREATMENT PLANT SITE 3302 W. WAUKEGAN ROAD MCHENRY, ILLINOIS 60050 AT THE REQUEST OF MR. DOUGLAS P. MARTIN DIRECTOR OF ECONOMIC DEVELOPMENT CITY OF MCHENRY 333 S. GREEN.STREET MCHENRY, ILLINOIS 60050 OCTOBER 22, 2018 .Associates, ��c. 11244 TABLE OF CONTENTS Limiting Conons and Assumptions Identification Date, Purpose and Intended Use of the Appraisal Definitions Scope of Work Neighborhood Summary Neighborhood Map Site Data Summary Zoning and Other Restrictions Tax and Assessment Data Improvement Summary Highest and Best Use Aerial Photograph .and Plat Topography Map Topographic Survey Floodplain/floodway Map ADID Wetlands Map Boat Slip Location Photographs Sales Comparison Approach Sale Map Reconciliation and Conclusion Certification Page �1 3 4 4 5 S 12 13 16 16 17 19 2a 21 22 23 24 25 26 27 31 4a 41 43 �.A.RRX�ON � A.ssoci.ates, �xxc. 11244 LIMITING CONDITIONS AND ASSUMPTIONS This appraisal is expressly subject to the following: I. Liability. My liability is limited to the client only. There is no accountability, obligation, or liability to any third party. Ifthis report is placed in the hands of anyone other than client, the client shall make that party aware of all limiting conditions and assumptions of the assignment. I am are in no way responsible for any costs incurred to discover or correct any deficiencies of any type present in the property - physical, financial, and/or legal. My liability extends only to the stated client, and not to subsequent parties or users of the report. 2. Copies, Publication, Distribution, Use of Report. Possession of this report does not carry with it the right of publication or reproduction, nor may an original or copy of the report be used for any purpose whatsoever by anyone except the client without the prior written consent of the appraiser and the client. Out -of -context quoting from and partial reprinting of this appraisal report are expressly prohibited. The omission or change of any part of this appraisal report without my written authorization invalidates the entire appraisal. This appraisal report must be considered and used only as a unit, No part is to be used without the whole report, and it becomes invalid if any part is separated from the whole. Please note that the report is copyrighted. Report Distribution. No portion of this report (especially any conclusions of value, the identity of the appraiser or the I Iarrison firm, or any reference to the Appraisal Institute or to any of its designations), shall be distributed to the sales media, news media, or any other public means of communication without my prior written consent and approval. Confidentiality. All conclusions and opinions asset forth in the repart were prepared by the appraiser whose signature appears on the appraisal report, unless otherwise indicated, I may not divulge the material (evaluation) contents of the report, analytical findings or conclusions, or give a copy of the report to anyone other than the client or a designee as specified in writing except as may be required by the Appraisal Institute as they may request in confidence for ethics enforcement, or by a court of law or body with the power of subpoena. 5. Information Used. I believe that information furnished by others is reliable, but I give no warranty for its accuracy. G. Testimony, Consulting, Completion of Contract for Appraisal Service. The contract for appraisal, consulting or analytical service is fitlfilled and the total fee is payable upon completion of the report, unless other arrangements have been made. I will appear and/or give testimony in court in connection with this appraisal on request if I receive adequate advance notice in order to make required preparations and scheduling arrangements. I will specify and make charges in connection with pretrial hearings, conferences, and court testimony in accordance with my usual practice. If testimony or deposition is required because of any subpoena, the client shall be responsible for any additional time, fees, and charges regardless of issuing party. . 7. Exhibits. I assume that all engineering studies are correct. The maps, sketches, photographs, and other illustrative materials in this report are included only to help the reader visualize the properly. 8. Legal and Title Considerations. Iassume no responsibility for the legal description provided or for matters pertaining to legal and title considera#ions. I assume that title to the property is good and marketable unless othertivise noted. I assume that the use of the land and improvements is confined within the boundaries of the property described and that there is no encroachment or trespass unless noted in the report. 9. Liens and Encumbrances. I appraised the property free and clear of any and all liens or encumbrances unless otherwise skated. - l0. Ownership and Management. I assume responsible ownership and competent management. 11. Hidden Conditions. I have inspected as far as possible, by observation, the improvements. However, it was not possible to personally observe hidden structural components. I have not critically inspected mechanical components withiIL the improvements and norepresentations are made as to these matters unless specifically stated and considered in the report. I assume that there are no hidden or unapparent conditions of the property, subsoil, or structures that render it more or less valuable. I assume no responsibility for such conditions or for obtaining the engineering studies that may be required to discover them. 11244 LIMITING CONDITIONS AND ASSUMPTIONS, cont a. 2 12. Regulatory and Legal Compliance. I assume that the property is in full compliance with all applicable federal, state, and local environmental and governmental regulations and laws unless the lack of compliance is stated, described, and considered in the report. I assume that all licenses, certificates of occupancy, consents, and other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimated contained in this report is based. 13. Component Values. Any allocation of the total value estimated in this report between the Iand and the improvements applies only under the stated program of use. The separate values allocated to the land and improvements must not be used in conjunction with any other appraisal and are invalid if so used. Any value estimates provided in the report apply to the entire property, and any proration or division of the total into fractional interests will invalidate the value estimate unless such proration or division of interests has been stated in the report. 14. Dollar Values and Purchasing Power, The market value estimated, and the costs used, are as of the date oftlre estimate of value, All dollar amounts are based on the purchasing power and price of the U.S. dollar as of the date of the value estimate. 1S. Inclusions. Furnishings, fixtures and equipment (FP'8cE} or personal property or business operations except as specifically indicated and typically considered as a part of real estate, have been disregarded with only the real estate being considered in the value estimate, unless otherwise stated. • 16. Fee, The fee for this appraisal is for the service rendered and not for the time spent on the physical report or the physical report itself 17. Authentic Copies "I'tre authentic copies of this report are signed in blue ink on the left side of the letter of transmittal and on the left side of the certification page. Any copy that does not have the above is unauthorized and may have been altered. 18, Insulation and Toxic Materials. In this appraisal assignmen#, unless otherwise stated in the report, I did not observe any potentially hazardous material used in the construction or maintenance of the building and/or the presence of toxic waste. I do not have any knowledge of the existence of such materials on or in the property. However, I am not qualified to detect such substances. The existence of any potentially hazardous waste material may have an effect on the value of the property. I urge the client to retain an expert in this field if the client believes it is necessary or appropriate. If such hazardous material is present, the value of the property may be adversely affected and re -appraisal at additional cost may be necessary'. 19. Subsequent Modifications. I reserve the right to alter statements, analyses, conclusions, or any value estimates in the appraisal if there becomes known to us facts pertinent to the appraisal process which were unknown when the report was prepared. 24. ADA. The Americans with Disabilities Act (ADA) became effective January 26, 1992. I have not made a specific compliance survey and analysis of this property to detemrine whether or not it is in conformity with the various detailed requirements of the ADA, It is possible that a compliance survey of the property together with a detailed analysis of the requirements of the ADA could reveal that the property, is not in compliance with one or more of the requirements of the Act. If so, this fact could have a negative effect upon the value of the property. Since I have no direct evidence relating to this issue, I did not consider possible non-compliance with the requirements of ADA in estimating the value of the property. • �ARRZSQN (�j'' Associatesi Inc. 11244 IDENTIFICATION Property: McHenry's Central Wastewater Treatment Plant and former Bruce Marine Locatian4 East terminus of Waukegan Road, at Fox River, McHenry, Illinois . Mailing Address: 3M2 W. Waukegan Road, McHenry, Illinois 60050 3 �vvner of Record and Brief Property History; The subject property is owned by the City of McHenry. The former central wastewater treatment plant component of the subject property has been owned by the City of McHenry for many years. Access to this plant was apparently by easement over the former Bruce Marina, The Bruce Marina component of the subject property was acquired by the City of McHenry in June 2000. This component has been leased to Jerry Danko, owner of D's Marine (adjacent to the north of the subject property) for many years. The same improvements that were on the marina component of the subject property when it was purchased by the City of McHenry existed on the marina component of the subject property on the date of value in this assignment. To my knowledge, there have been no sales of any portion I the subject property within the past three years. Also to my knowledge, the subject property is not listed for sale. However, reportedly the City of McHenry is entertaining potential redevelopment ideas from a variety of market participants. Legal Description: I was not provided with a legal description of the subject property. Although some former deeds do provide legal descriptions of some of the components of the subject property, there is insufficient information available in these deeds to cover the entire subject property. Additionally, the entire subject property was acquired over a period of several years, from different sellers. For valuation purposes in this assignment, I have assumed that the land narratively described and visually'portrayed on the exhibits in this report is an accurate representation of the entire subject property. However, I reserve the right to re -analyze my findings and conclusions relative to the subject property if I am provided with a subsequent legal description and/or a plat of survey that shows the subject property to be significantly different than what I have described in this appraisal. Permanent Property Index Number: 09-35-202-008, 09-35-203-021, 09-35-203-022, 09-35-203-025, and 09-35-203-040 �ARR�SON � Associates, Ixac, 11244 DATE, PURPOSE AND INTENDED USE OF THE APPRAISAL The purpose of this appraisal is to develop a market value opinion of the fee simple interest of the subject property, legally described in the preceding section of this appraisal report, subject to the Limiting Conditions andAssumptions contained in the report as well as to the extraordinary assumptions and hypothetical conditions explainer) in the Scope of Work section of the report. This value opinion is as of October 22, 2018, the initial date of inspection of the subject property. It is my understanding that the intended use of this appraisal will be in conjunction with the redevelopment of the subject property. My client in this matter is the City of McHenry. This appraisal was order by Douglas P. Martin, the Director of Economic Development of the City of McHenry, on behalf of the City of McHenry. DEFINITIONS Market value, as used in this report, is defined as the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1) Buyer and seller are typically motivated, 2) both parties are well informed or well advised, acting in what they consider their own best interest; 3) a reasonable time is allowed for exposure in the open market; 4) payment is made in cash in U.S. Dollars or in terms of financial arrangements comparable thereto; and 5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. Fee simple interest, as used in this report, is defined. in Tl�e Dictionary of Real Estate �Ippraisal, as absolute ownership, unencumbered by any other interest or estate, subject only to the limitations of eminent domain, escheat, police power, and taxation. �.A.RRX�ON � �.sSOC13'�eS, �xxc, 11244 SCOPE OF WURK The scope of work involved in this assignment included the physical inspection of the subject property and its neighborhood, collection of factual information relative to the subject property, preparation of a highest and best use analysis of the subject property, collection of market information to allow the development of the sales comparison approach, development of the sales comparison approach and reconciliation of its conclusions into a final market value opinion of the subject property as of the date of value, and preparation of an appraisal report setting forth the conclusions developed in this assignment as well as the information upon which the conclusions were based. Except as noted subsequently, the subject property is vacant land. Accordingly, the cast approach is not appropriate to this valuation situation, and it has not been developed in this assignment. The marina component of the subject property is leased to the adjacent D's Marina. However, in keeping with hypothetical conditions incorporated into this appraisal assignment, all of the building improvements associated with the marina will ultimately be demolished,, and the income -producing characteristics of the subject property will be significantly affected. For this reason I did not consider the subject property to be an income -producing investment, and consequently the income capitalization approach is not appropriate to this valuation situation, and it has not been developed in this assignment. The only meaningful approach to value is the sales comparison approach. This approach has bcen developed subject to the hypothetical conditions noted below, and has been based on the highest and best use conclusions presented subsequently in this appraisal report. The extent of the data collection process for each sales comparison approach will be addressed subsequently in this report. According to USPAP, an extraorriinaty asstimptiorz is an assignment -specific assumption, as of the effective date regarding information used in an analysis, which, if found to be false, could alter the appraiser's opinions or conclusions. Uncertain information might include physical, legal, or economic characteristics of the subject property; or conditions external to the property, such as market conditions or trends; or the integrity of data used in an analysis. This assignment is subject to four extraordinary assumptions: 1. According to a topographic survey of the subject property prepared by Baxter & Woodman, dated September 6, 2018, the floodplain elevation of the Fox River and the lagoon is 739.8 feet. Also on that survey most of the land in the former wastewater treatment plant component and in the northwest portion of the former. marina component exists with an elevation of 740 feet or higher. Most of the south part of the former marina component appears to have an elevation at or below 739.8 feet. This assignment is subject to the extraordinary assumption that the northerly part of the subject property, which contains the former wastewater treatment plant and the northwest portion of the former marina component is contained in a Zone-X floodplain and that the southerly balance of the subject property is contained in a Zone-AE floodplain of the Fox River. I "" A.RRISQN �' Associates, Inc 11244 SCOPE OF WORK, cont a. recommend that a floodplain delineation survey be prepared in order to determine which components of the subject property are located in a Zane-AE floodplain and which components of the subject property are located in a Zone-X floodplain. 2. According to McHenry officials, the central wastewater treatment plant has been decommissioned, Although the wastewater treatment infiastructure remains in the wastewater treatment plant component of the subject property, this assignment is subject to the extraordinary assumption that the decommissioning of the central wastewater treatment plant has been completed in accordance with all laws, rules, and regulations of the Illinois Environmental Protection Agency, 3. This assignment is subject to the extraordinary assumption #hat there is no negative environmental impact on the subject property resulting from the former use of a component of the subject property as a wastewater treatment plant. I recommend that at least a Phase I (and potentially a Phase 11) environmental assessment of the subject property be performed to verify this assumption. 4, The component of the subject property known as Waukegan Road is a long, narrow strip of land in the west part of the subj ect property, It connects the former wastewater treatment plant component and the former marina component to the dedicated portion of Waukegan Road. This road was created as a private lane when land in the area was subdivided as Venice Park Unit No. 1. However, it does provide access to several properties, including the homes in Riverwalk Place, D's Marina, the wastewater treatment plant component and the former marina component of the subject property, and Carey Electric. I have not been provided with any evidence that this road was ever dedicated as a municipal street; gather, it likely continues to be used as a private lane. This assignment is subject to the extraordinary assumption that the Waukegan Road component of the subject property is a private road, but also that it is subject to a prescriptive easement for continued use as an access road for all properties that front on it, According to USPAP, a Itypotlteticat condition is that which is contrary to what exists but is supposed for the purpose of analysis. Hypothetical conditions assume conditions contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis. This assignment is subject to one hypotheticalcondition. 1. For valuation purposes in this assignment, I have assumed that all of the building and/or equipment improvements associated with the former wastewater treatment plant component of the subject property, and all of the building improvements associated with the former marina component of the subject property, do not exist. Because they do, in fact, exist, this assumption is a hypothetical condition of this 11244 7 SCOPE OF WORK, cont'd. assignment, In this appraisal assignment, the only improvements that I have assumed to exist on the subject property are the seawalls, the boat slips and piers, the water and electric lines serving the boat slips, the boat launching facilities in the northeast corner of the former marina component of the subject property at the Fox River, and the building and fencing enclosing the wastewater lift station in the northwest coiner of the subject property, There are no other liypotlaeticrcl co�riitivns or extraordinary assumptions affecting this assignment. There is no personal property, intangible, non -real estate components, business enterprise value, or going concern value included in this appraisal assignment. This appraisal and appraisal repast are intended to comply with the appraisal development and appraisal report writing requirements incorporated into the Uniform Standards of Professional Appraisal Practice (USPAP). The appraisal report is intended to be presented as a fully, documented appraisal report presented in a narrative format, �ARR.I<SO� � �-ssociates, �x�c. 11244 Location and Boundaries The subject property is amulti-use property located at the east terminus of Waukegan Road, at is. This location is east of the south part of the Green Street the Fox River, in McHenry, Illino central business district in McHenry. The small neighborhood is heterogeneous, and is contained entirely in McHenry. The boundaries of the neighborhood are Green Street on the west, John Street on the south, the Boone Lagoon on the north, and the Fox River on the east. The subject property is located in the east part of the neighborhood. Neighborhood Composition The overall district is nearly 100% built-up and developed. Most of the undeveloped land in the neighborhood consists of public land, parking lots, land incapable of development because of physical restraints, or land where a prior improvement was destroyed or demolished and•has not yet been re�devcloped. Land uses throughout the neighborhood are quite heterogeneous. They include residential uses, commercial uses, and special purpose uses. Residential uses in the neighborhood occur along the Boone Lagoon, and in a small vintage subdivision between Boone Lagoon and Route 120. The uses on the south side of Boone Lagoon are part of a 20-unit condominium development known as Riverwalk Place. Eaeh.townhome- style unit has its own boat slip on Boone Lagoon. The residential uses between Boone Lagoon and Route 120 are vintage single-family residences in older subdivisions, including the Original Plat of McHenry and Snyder's Subdivision. McHenry has three central business districts, and two of them axe wholly or partially included in the neighborhood boundaries. The Riverside Drive central business district exists on the west side of the Fox River,, between the Boone Lagoon and Park Street; the Green Street central business district exists between Route 120 and Waukegan Road. These two districts are connected by part of the Illinois Route 120 highway commercial district. Most of the land in both of these districts, and in the Route 120 highway commercial district, are developed with a varicty of office and commercial uses. The balance of the properties in the neighborhood are special use and special purpose properties. These include the clubhouse and Hole #1 of the McHenry Country Club on the north side of John Street, the east campus of McHenry High School on the east side of Green Street between Waukegan Road and John Street, the Landmark School on the north side of Waukegan Road just west of Green Street, the Miller Point property owned by the City of McHenry, part of the subject property (the former central wastewater treatment plant), and components of McHenry's Uverwalk. These components include a bridge over Boone Creek, brick walks along Boone Lagoon and the Fox River, and a variety of recreational opportunities. 11244 NEIGHBORHOOD SUMMARY, cont a. Property Uses Surrounding the Subject Property The properties surrounding the subject property include the Riverwalk Place, D's Marina, and the Boone Lagoon on the north, the Fox River on the east, the south part of the lagoon off of the Fox River adjacent to a part of the south, the Carey Electric operation adjacent to part of the south and part of the west, and the publicly -dedicated portion of Waukegan Road adjacent to part of the west. Zoning McHenry controls the zoning within its corporate limits. Zoning in the central business districts, the Route 120 highway commercial district, and the commercial uses along the Fox River are mostly commercial. The residential developments in the area are zoned residentially. Most uses are consistent with underlying zoning. Because the neighborhood is nearly fully developed, there is no reasonable probability of rezoning within the neamerm future for much of the neighborhood. However, there is a reasonable probability of rezoning on undeveloped sites or redevelopment sites, providing the requested rezoning is consistent with other zoning in the neighborhood and with McHenry's comprehensive plan. Utilities Neighborhood properties in McHenry are all served by water and sewer fiom McHenry. In addition, the neighborhood is served by electricity, natural gas, telephone, and wireless service. Trends The primary trend in the neighborhood is to continue existing uses as developed. Real estafie market conditions far all types of property have deteriorated over the past several years to the point where most types of development have effectively ceased. There has been no significant development in this portion of McHenry for many years, since there is, effectively, no available undeveloped land. However, there has been quite a bit of redevelopment. The former McHenry Hospital at the northeast comer of Greera Street and Waukegan Road was redeveloped as the McHenry Villa, a senior independent living community. The former McHenry Medical Group building at the southeast corner of Green Street and the'Boone Lagoon was demolished and the site was developed with a multi -story residential/retail condominium project. The former McHenry Theater at the northeast corner of Green Street and the Boone Lagoon was recently completely renovated and expanded. The site at the southeast corner of Green Street and Route 120, which had previously been developed with a Chinese restaurant and apartments but was destroyed by fire, is being redeveloped with a restaurant. The only other evidence of any development is the ongoing work associated with the Riverwalk project along Boone Lagoon, which connects the Riverside Drive commercial district with the Green Street commercial district. Because of current real estate and financing market conditions, the trend for most undeveloped sites is to hold them as future development sites until such time as market U ARRIS4N �' A.ssociaies, Inc, i1244 NEIGHB4RHkJt) SUMMARY, cont'd. conditions have stabilized to the point where development is financially feasible. The trends evident in the neighborhood should continue into the future. I do not anticipate any significant level of development or redevelopment in the real estate market to occur within the foreseeable future. ` Transportation 10 The neighborhood is adequately -situated with respect to transportation in southeast McIlemy County. Illinois Route 120 crosses through the north part of the neighborhood, providing an east/west arterial to serve the city. Illinois Route 31 crosses through McHenry a bit further to the west, providing a north/south arterial to serve the city. Both Routes 120 and 31 connect with the interstate highway system, but further to the south and east. There is a well -structured system of county, township and city roads and highways providing automotive access throughout McHenry. There is no significant public surface transportation in southeast McHenry County, generally necessitating automobile ownership. However, there is limited public transportation using the Dial -A -Ride service. The neighborhood is about an hour's drive Rom O'Hare International Airport in Chicago. A spur line of the Metra commuter rail system extends to McHenry from the main line in Crystal Lake, Financing Financing is available and affordable for most types of properly, but under current market conditions is usually available only for acquisition financing and refinancing. Development Financing has been reduced significantly for most types of properties, primarily because of the risks associated with development under real estate market conditions where there is very little demand for development land. Although financing remains affordable, interest rates are rising somewhat and credit criteria has tightened somewhat. Rates and other terms are, for the most part, competitive. At the present time, conventional financing is dominant for non-residential properties, and conventional, FHA, and VA financing is available for residential properties. Competition The primary competitive and comparable marlcet area for the subject property is the neighborhood itself However, because there have been very few sales in the neighborhood in several years, it was necessary to expand the search to other commercial location's, not only in McHenry but in other communities in southeast McHenry County, western Lake County, and northeastern bane County. This included both waterfront and non -waterfront properties. The extent of the search for comparable properties will be discussed subsequently in this appraisal report. . �ARR;«ON � Associates, Inc. 111244 11 NEIGHBORHOOD SUMMARY, cont a. Neiglrborhaod COnCluSiOn All things considered, the subject neighborhood is a somewhat heterogeneous, mixed -use, somewhat remote neighborhood on the cast side of McHenry. Although it contains some commercial uses, it is not part of any major business district in McHenry. It does, however, have frontage on both the Fox River and a lagoon. Demand for development and/or redevelopment land for properties fronting on the Fox River had historically been rather high. Although waterfront land is not as much in demand as it once was, the district should remain an important component in McHenry, as redevelopment could be either commercial or residential (most likely multifamily). The neighborhood should continue to be an attractive location for redevelopment in the fixture. 11244 Aasn 202 t'ONDER LAME fester Pmp Orvners rk Assn 129 i Joseph J 6 Mc Hsrtor Tr79 NEIGHBORHOOD MAP 12 Johnsburg Bd Ed Oisf 12 118 A rival P.ap LLC 97 , LLS ESA ak_ Iv �ARRXSON � Associaies, gx�c. 11244 SITE DATA SUlVMMARY P� opery Former central wastewater treatment plant of McHenry and former Bruce Marina Location East texxninus of Waukegan Road, at the Fox River Ft�ontages Depth Shape 332 feet, more or less, on south side of Waukegan Road right -of --way; 33 feet, mare or less, on east terminus of Waukegan Road; 575 feet, more or less, on west bank of Fox River; 310 feet, more or less, along west bank of lagoon; 68 feet, more or less, along north bank of lagoon at top of L; 250 feet, more or less, along east side of lagoon containing boat slips; 721 feet, more or less, along north bank of lagoon containing boat slips Variable Highly izregular Ai°ea Content 13 314,938 square feet (7.23 acres}, more or less, according to county records, assumed to be correct; allocated, by county records or by scaling, as follows: • 0.46 acres, by county records, inright-of--way of Waukegan Road • 1.83 acres, by scaling, in strip of land between west property line and west bank of lagoon, south of north line of lagoon extended west,_and in] rinn • 1.66 acres, by county records, in former central wastewater treatment plant • 3.28 acres, by subtraction, in former Bruce Marina (excluding lagoon) • 4.94 acres capable of development; calculated as area of entire (7.23 acres) less area in Waukegan Road (0.46 acres) less strip of land along west property line and land in lagoon (1.83 acres); 4.94-acre usable land includes all frontage along Fox River and on north and east banks of lagoon, currently housing boat slips An Aerial Photograph and a Land flat have been prepared as exhibits in this report, with the approximate boundaries ofthe subject property outlined in red �.ARRXSO�I � Associates, Yrac. 11244 Topography access 14 S><TE DATA SUMMARY, cont'd_ Near level; non wooded; about at grade with Waukegan Road; slightly above mean pool elevation of Fox River; negligible elevation variation; floodplain issues will be discussed subsequently; slope and drainage flow generally following natural contours of the land to the Fox River and the lagoon; a Topography Map has been prepared an exhibit in this report, with the approximate boundaries of the subject property outlined in red, and with the contour lines shown in light brown; the Topographic Survey of the subject property prepared by Baxter & Woodman has also been prepared as an exhibit in this report Waukegan Road --two lane; bituminous -surfaced; although it provides access to several properties on both its north and south sides, and although it is owned by the City•of McHenry, is a private road, and to my knowledge it has not been dedicated as a public street; in keeping with the extraordinary assumptions addressed in the Scope of Work section of this report, I have assumed that the Waukegan Road component (PIN 409-35- 202-008) of the subject property is subject to a prescriptive easement for road purposes; concrete curbs, gutters, and sidewalks (on south side of street); storm sewers and street lights; runs in an east/west direction; variable right -of --way Easements • •Assumed that utility easements exist along Waukegan Road and on the subject property, as appropriate; as noted above, in keeping with the extraordinary assumptions addressed in the Scope of Work section of this report, I have assumed that the Waukegan Road component (PIN #09-35-202-008) of the subject property is subject to a prescriptive easement for road purposes; no title report furnished for analysis; for purposes of this assignment,'I have assumed that there are no negative easements affecting the subject property Encroachments No encroaclunents noted during inspection or on aerial photograph; no cui�•ent plat of survey furnished for analysis; for purposes of this appraisal, I have assumed thafi there are no encroachments affecting the subject property Soil �nalysis About 83.3%weh-drained, upland soils, mostly #791B/C2 (Rush Silt Loam); 16.7% balance water and poorly -drained, lowland soils, including W (water) and #523A (Dunham Silty Clay Loam); about 90% of the poorly -drained soils occur in the lagoon; the balance consists of a small tract of land at the southwest corner of the site ��.ARF.��C?N .Associates, �xxe. 11244 SITE DATA SUMMARY, cont a. Floodplain Analysis 1S FEMA Community Panel #17111 CO209T; effective November 16, 2006; according to the map, about 90% of the subject property is designated as Zone-AE (100-year) floodplain, about 5% of the subject property is designated as Zone-X (5Wyear) floodplain, and about 5% of the subject property is designated as a Zone- X floodplain, a low flood risk floodplain that is not subject to flooding; in keeping with the extraordinary assumption incorporated in the Scope of Work section of this appraisal report, this assignment is subject to the extraordinary assumption that the northerly part of the subject property, which contains the former wastewater treatment plant and the northwest portion of the former marina component is contained in a Zone-X floodplain and that the southerly balance of the subject property is contained in a Zone-AE floodplain of the Fox River; in addition to the floodplain areas of the subject property, the floodplain map indicates that about 10% of the subject property, along the Fox River frontage, is designated as a regulatory floodway of the subject property; a Floodplain/Floodway Map has been prepared as an exhibit in this report, with the approximate boundaries of the subject property outlined in red, with the Zone-AE portions of the subject property colored in blue, with the Zone�X (500-year) floodplain,land in the northwest portion of the site colored in light tan, and with the regulatory floodway portion of the land indicated by alternating, diagonal blue and pink lines Wetlands Analysis According to the McHenry County AD1D (Advanced Identification of Aquatic Resources) system map, about 15°/o of the subject property is designated as an ADID Other wetlands; these wetlands are mostly contained in and along the lagoon, as well as i a the extreme southwest corner of the site, an ADID wetlands map has been prepared as an exhibit in this report, with the approximately boundaries of the subject property outlined MID in fed, and with the Awetlands shown in light blue diagonal lilies Utilities - Electricity, natural gas, telephone, city water, and city sewer .�nviYonmental Factors No negative environmental factors noted during inspection; no environmental study or . assessment furiushed; for purposes of this appraisal, I have assumed that there are no negative environmental factors affecting the subject property; this assignment is subject to the extraordinary assumption that there is no negative environmental impact on the subject property resulting from the former use of a component of the subject property as a wastewater treatment plant; however, I reserve the right to re -analyze my findings and conclusions should any subsequent environmental studies or assessments indicate any negative environmental factors 11244 ZONING AND VTflER RESTRICTIONS Most of the subject property is designated, under the existing Zoning Ordinance of McHenry, Illinois, for use in compliance with the RS4 — High Density Single -Family Residential District zoning classification. The Waukegan Road component of the subject property is designated fok use in compliance with the O-1 Local Office District zoning classification. In McHenry's comprehensive plan, the Waukegan Road component is designated as Low Density Residential, the former wastewater treatment plant component is designated as Municipal, and the former marina component is designated as Commercial. In keeping with the locational and physical characteristics of the subject property, as well as surrounding zoning and zoning on other properties fronting on the Fox River in McHenry, I have concluded that there is a reasonable probability of a zoning change that would allow the subject property to be redeveloped as a mixed -use, planned unit development. The most likely underlying zoning would be some sort of commercial zoning that would allow high -density residential use as well as a variety of commercial uses. To my knowledge, there are no other restrictions affecting the subject property. TAX AND ASSESSMENT DATA The subject property is designated as Permanent Property Index Nttmbez•s 09-35-202-008, 09-35- 203-021, 09-35-203-022, 09-35-203-025, and 09-35-203-040. Being owned by the City of McHenry, it is exempt from real estate taxation, and does not have an assessed value. ]�ARRX�QN Associates, �.xxc. 11244 IMPROVEMENT SUMMARY 17 As noted in Lite Scope of Work section of this report, I have assumed that all of building and/or equipment improvements associated with the former wastewater treatment plant component of the subject property, and all of the building improvements associated with the former marina component of the subject property, do not exist. Because they do, in fact, exist, this assumption is a hypothetical condition of this assignment. In this appraisal assigmnent, the only improvements that I have assumed to exist on the subject property are the seawalls, the boat slips and piers, the water and electric lines serving the boat slips, the boat launching facilities in the northeast coiner of the former marina component of the subject property at the Fox River, and the building and fencing enclosing the wastewater, lift station in the northwest corner of the subject property. Seax�alls There are three types of seawalls on the subject property —steel, concrete, and rip rap. There are steel seawalls along about 90% of the frontage on the Fox River and on the east 330 feet of the north side of the lagoon. There is rip rap and concrete slab breakwaters and seawalls along about 10% of the frontage on the Fox River (in the southeast corner of the former wastewater treatment plant site and in the northeast corner of the former marina site), on the west 3 90 feet of the north side of the lagoon, and along the east side of the L-component of the lagoon. Boat Slips and Pier By my count, there are 66'boat slips, all fronting on the lagoon. Forty-nine of these front on the north bank of the lagoon and 17 of these fronton the east bank of Lite lagoon. The east 24 slips on the north bank of the lagoon have steel seawalls; the remainder have concrete and rip rap breakwaters and seawalls. All of the boat slips are served by electricity and water. There are 53 wood piers serving the 66 boat slips, all supported by steel posts, Boat Launching Facilities There is a boat launching facility in the northeast comer of the former marina component of the subject property. It consists of four boat slips and a steel structure designed to aHow in and out boat service and boat launching. For valuation purposes in this assignment, I have assumed that the boat launch improvements are owned by D's Marine, the tenant of the property. �.ARRSSUI� ' .f�,ssociates, �rrc, 11244 IMPROVEMENT SUMMARY, cont'd. Miscellaneous 1'mpr•owments Theca include on-shora lawn areas along the boat slips and a one-story masonry building and a fenced enclosure in the northwest corner of the former marina component that houses a lift station and the commencement of a forced wastewater main. The building and fenced enclosure do not contribute to the overall value of the subject property. Estimated Contributory Value of Improvements • 7201ineal feet of steel seawall — $21,600 • 53 piers, including water and electricity — $53,000 • Boat launch improvements — $25,000 • Boat launch entitlement — $25,000 • 66 boat slip entitlements - $1985000 • Total — $322,600 �,�.RRXSON � A.ssoczates, �rrc. 11244 HIGHEST AND BEST USE 19 As noted above, I have assumed that it is reasonably probably that there is a reasonable probability of a zoning change that would allow the subject property to be redeveloped as a mixed -use, planned unit development, with underlying zoning that would allow high -density residential use as well as a variety of commercial uses. Other than size and the potential impact of floodplain, wetlands, and regulatory floodway impacts, there are no physical limitations to redevelopment of the subject property. There is an effective demand for available development and redevelopment sites, particularly those with access to additional recreation facilities such as the Fox River. This demand supports the conclusion that redevelopment as a mixed�use, planned unit development is financially feasible. No alternative use creates a higher value while at the same time conforming to the first three tests of highest and best use (legal permissibility, physical possibility, and financial feasibility), supporting the conclusion that redevelopment as a mixed - use, planned unit development is also maximally productive. The highest and best use of the subject property is to redevelop the property as a mixed -use, planned unit development, subject to the physical characteristics of the land. Incorporated into this opinion of highest and best use is maintenance of the boat launching component of the subject property, the seawalls, and the slips and piers, as well as the building and fenced enclosure of the lift station and commencement of the forced wastewater main in the northwest corner of the former marina component of the subject property. 11244 AERIAL PrIOTOGRAPH 20 11244 LAND PLAT • y � ,I a / I Pi ?b A PL 09.35.201-045 Boone Leek J tail,Iry L09-35.201-042 ' ice 57 I �it 4 4 �• 41���1'� ��4.I4 � o p� `�` t ILi'f�• u� Pt 21 .. , tltltl 3je m PG-042 _ '��14�,LOQQ ID -010 -.l-0ir _�>i e�4i tooto - 91,m i.p1., � 6a ur � I,pW -03 N -038-011 � .03 s24 a^ :; '�ls 590 82.56mm Pt.5 033 .09 p� q m 7 w035 3.67 -020 a (203) [0:5 to N -025 4.50 �m PL3 .602 a 1 �.P,.RRZ�QI�I .Associates, ��ac. 11244 ON 04 16 Boone Creek An LD e" ll 1 • o �- ,y a } �J 1 Teo i10 r� of�ao nQ ya ao Qe p 4 0 t� W fjpHN STR�Fr Mc �A.�RX�ON �'' A.ssocitates, knc. 1IZ44 TOPOGRAPHIC SURVEY N �roPOGr�a�Pxzc sv�vE� Scale P�50 BOONE CREEX I -i i gLL 23 roaoosAawc suavEy BAYFEI�.YB�BN ��,ARRX�O� '� A.SSOCX2.tE5y :Y..x>ic. 11244 FLOODPLAIINIVJLOOI)WAY MAP Lone At.' �PL842 s=3%�y� a c+ t �� 4 S - o -0z1 PC -042 16 440,� 1w 78 q� { 1T 020 l -034 I,. .038 13773 Lt 50 �a 7 S ^ 4 Ito k Pt.5 R '0 ~ 00 035 N N 428 zoz4 .10 �j !0 --01D 11 -025 4.58 416 24 -FLO.ODWA 7onc° i t f_' 11244 ADID WETLANDS MAP 25 IIZ44 BOAT SLIP LOCATION T N - .7 l.41ma1 aWrzi VOL - MS M6RIAE ...._ - .. —�tu.Lh.1-13A692 -Avfr �1�3��� -� s _.. P1°HEtIRY SiLZNotS - .. i b yyam�((' i] N.W(ST�.Yr4..44!.. bu67 a z po o arc _ i at j` ab° Sy a i 4i z -� y ' IN wo�mloo: .a Eu /u Iv Ew tv vk W. 44 i.r dw /. dw Iv I.- iM [w E Iv /! ` IN 1�K Ind 4 I'�n „ I IHR L -! l .im�Im Oil' IA ut ui U )A nk U, IA !d At nt Ns 1sil OIL I11 Its ul Ia It 19 A' 1A jl� n n^ Id fl'tf )at IP fit Fit ' t F II= its 14 it it, us x! 11 ecrerurr t, ° ba p Ba V-ATEX7,koK UP .*' y#GFsssE llL. tGu2TH:'-= 1x-2v ... s 8 E ID �Im•31-m y' Wnoi 2b �A13R.�S©�I �' Assocxa�es, kxxc. 11244 27 PHOTOGRAPHS Fence, Steel Seawall and Lawn Along Fox River racing Sottth Slips, Piers and Steel Seawall Facing West From Slip #1 RRZSON 1 Associates, All �p ot r 1 11244 29 Slips, Piers and Concrete Seawall Facing South Frorn Slip #66 Boat Launching Area Facing North �ARIZupN ` dissociates, �rzc. 11244 PHOTOGRAPHS I Building and Fenced Enclosure of Lift Station and Forced Main Commencement Facing West I1244 SALES COMPARISON APPROACH Cmrview of the Approach 3l The sales comparison approach, as the name implies, allows the appraiser to develop a market ' value opinion of a property by comparing it to similar properties in the market area that have sold recently. Each property is investigated and analyzed. Major value -influencing factors are identified, and adjustments are made to the sales, as appropriate, to reflect differences in the major value -influencing factors. The resulting range of adjusted unit price is reconciled to the property being appraised. .tl�ajor Value-�nflitencing Characteristics The major value -influencing characteristics of the subject property that were incorporated into the search for comparable sales follow: • The date of value is October 22, 2018. • The subject property is in McHenry, and fronts on the Fox River. It is in a dead- end location, and is not part of any of McHenry's central business districts. • Most of the property is zoned RS-4 in McHenry. However, the highest and best use of the subject property is to re -develop it, most likely as a mixed -use planned unit development. I have projected uses to include high density residential uses as well as commercial uses. • The subject property is served by all utilities, including water and sewer. • There are four extraordinary assumptions incorporated into this assignment. They include the assumptions that (a) the north part of the subject site is in a Zone-X floodplain and the south part of the site is in a Zone-AE floodplain, (b) the decommissioning of the wastewater treatment plant was done in accordance with the laws, rules, and regulations of the IEPA, (c) there are no negative impacts on the subject property that occurred as a result of the former use of part of the property as a wastewater treatment plant, and (d) Waukegan Road is subject to a prescriptive easement that necessitates it remaining as a road. • There is one liypotltetical condition incorporated into this assignment. I have assuxa�ed that all of building and/or equipment improvements associated with the , former wastewater treatment plant component of the subject property, and all of the building improvements associated with the former marina component of the subject property, do not exist. In this appraisal assignment, the only improvements that I have assumed to exist on the subject property are the seawalls, the boat slips and piers, the water and electric lines serving the boat slips, the boat"Iaunching facilities, and the building and fencing enclosing the wastewater lift station. 11244 32 SALES CVIVEr K SUN APPROACH, Contd. • Although the subject property contains 7.23 acres, only 4.94 acres constitutes the portion of the site that is, effectively, capable of re -development. The 2.29-acre balance of the site is the land in Waukegan Road and the land in the lagoon that accommodates the boat slips. • Improvements included in the valuation include 7201ineal feet of steel seawall, rip rap and concrete seawall, 53 wood piers (including electricity and water hook- ups), 66 boat slips, and the boat launch area. The estimated contributory value of the steel seawalls, the piers, the boat launch entitlement, and the slip entitlements is $32276000 • About 10% of the subject property, along the Fox River, is designated as a regulatory floodway of the Fox River. Marizet Data The following sales are transactions of small acreage commercial development sites in eastern McHenry County and western Lake County. All were purchased for some type of commercial development and/or redevelopment. Each has some degree of comparability to the 4.94-acre component of the subject property that is capable of re -development. The sales that I selected as comparables occurred between April 2013 and January 2017. The sales contained between 2.6189 acres and 18:374 acres. Differences between the sales and the subject property were addressed through the comparative adjustment process. The sales are presented chronologically, starting with the oldest. A Sale Map is presented at the end of this section of the appraisal report, showing the location of the subject property and the. comparable sales. Sale #1 Location " . Southerly terminus Riverside Drive, west shore of Fox River, and north side of Boone Creek, McHenry, Illinois Sale Date April Sale Price $5503000 Seller/Buyer First Midwest Bank, Trustee, Trust ##4773 to_ City of McHenry Decd Data Trustee's Deed #2013R0021023 (McHenry County) Site Size 132,422 square feet (3.04 acres), more or less, according to McHenry township assessor records Zoning RS-4 High -Density Single -Family Residential and C-4 —Downtown Commercial — McHenry Water/Sewer At site Unit Price $4.15 per square foot Comments This property was acquired by the City of McHenry in an arm's length transaction, where the purchase price was achieved through amicable negotiations. The intent of McHenry was to ultimately allow a portion of the site to be re -developed commercially and development of the balance 14 ARRISON i Associates, 1Lrrc, 11244 33 SALES COMPARISON APPROACH, cont'd. of the site in conjunction with the Rivemallc project along Boone Creek and the Fox River. At one time this property was improved with an older single-family residence that was remodeled into the Dobyn's House restaurant. The Dobyn's House restaurant closed and the property was leased as Joey T's, another restaurant. Several years ago, the building was destroyed by fire and the site was never re -developed. The site was near level, non -wooded, contained a small amount of wetlands along Boone Creek, but was about 75% designated as a Zone-AE floodplain, with a small. area (about 5%) designated as a regulatory floodway of the Fox River and Boone Creek. The only seawalls along the Fox River and Boone Creek were rip rap. Adjustments ; This sale was adjusted upward for market conditions and for its physical characteristics, primarily its larger amount of Zone-AE floodplain land. Adjusted Price: $5.31 per square foot Sale #2 Location Southwest side U.S. Route 12, about 200 feet southeast of Eagle Point Road, and northeast shore Pistakee Lake; Fox Lake, Illinois Sale Date July 2015 Sale Price $3,3603000 Seller/Buyer Bank Iowa to FXLK, LC Deed Data Special Warranty Deed #7220902 (Lake County) Site Size 800,371.44 square feet (18.374 acres), more or less, according to Lake County GIS calculations Zoning B4/PUD — Resort Business District/Planned Unit Development — Fox Lake Water/Sewer At site Unit Price $4.20 per square foot Comments This sale was an REO transaction. Reportedly, it sold after 811 days on the market. As of the date of value in this assignment, it had not been developed. In September 2017 the northeasterly 1.2663 acres of this site, fronting on Route 12 but not fronting on Pistakee Lake, was sold off to a developer and developed with a Culver's restaurant. The site was near level to gently sloping toward Pistakee Lake, was nonwwodded, consisted of about 1.87 acres in Pistakee Lake, had about 22% in a Zone-AE floodplain, and contained about 15% LCWI (Lake County Wetlands Inventory) wetlands. Adjustments This sale required upward adjustments for sale conditions, for market conditions, and for its physical characteristics, primarily the fact that about 10% of the site was under Pistakee Lake, Adjusted Price: $5.58 per square foot �.A.RR�SOhI �'' .l�.ssociates, frXc, 1IZ44 Location . Sale Date Sale Price Seller/Buyer Deed Data Site Size Zoning Water/Sewer Unit Price Comments Adjustments Adjusted Price: Sale #4 Location SALES COMPARISON APPROACH, cont'd. Southeast corner Johnsburg Road and Sunnyside Beach Road, Johnsburg, Illinois July 20I S $5605000 3810 Johnsburg Road, LLC to Village of Johnsburg Warranty Deed #201 SR0028773 (McHenry County) 190,429 square feet (4.3716 acres), more or less, according to real estate transfer declaration R-I — One -Family District — Johnsburg Not available $2.94 per square foot This property was acquired by the Village of Johnsburg in an arm's length transaction, where the purchase price was achieved through amicable negotiations. Originally the intention of Johnsburg was to improve the site with a new village hail and police department. Those plans have changed, the site remains undeveloped; and the future of this site is uncertain. The site was near level, non -wooded, was in a Zone-X floodplain, and did not contain any wetlands. This sale did not have any river or lake frontage. This sale required upward adjustments for market conditions, for its lack of river or lake frontage, for its lack of water and sewer availability, for its zoning, and for its location; it required a downward adjustment for its physical characteristics, primarily its lack of Zone -A floodplain land and wetlands. ' $5.17 per square foot 'Southeast corner Johnsburg Road and Channel Beach Avenue, Johnsburg, Illinois Sale Date July 2015 Sale Price $560,000 Seller/Buyer Johnsburg and Channel Beach Drive, LLC to Village of Johnsburg Deed Data Warranty Deed #2015R0028772 (McHenry County) Site Size 223,401 square feet (5.1286 acres), more or less, according to real estate transfer declaration Zoning B-2 — Business District General Retail — Johnsburg ex/Sewer Not available Unit Price $2.51 per square foot Comments This property was acquired by the Village of Johnsburg in an arm's length transaction, where the purchase price was achieved through amicable negotiations. This site is adjacent to the west of Jolmsburg's village hall and the Sunnyside Park. The intention of Johnsburg was to incorporate 14ARRISON Associates, Inc 11244 35 A-LEN COMPARISON APPROACH, cont a. the site into Sunnyside Park. The site was gently sloping, non -wooded, was in a Zane-X floodplain, and contained one small, insignificant farmed wetlands area. This sale did not have any river or lake frontage. Adjustments ; This sale required upward adjustments for market conditions, for its lack of river or lake frontage, for its lack of water and sewer availability, and for its location; it required a downward adjustment for its physical characteristics, primarily its lack of Zone -A floodplain land and wetlands. Adjusted Price: $4.13 per square foot Sale #5 Location Wraps around northwest corner of Illinois Route 120 and Chapel Hill Road, McHenry, Illinois Sale Date January 2017 Sale Price $1,900,000 Seller/Buyer First Midwest Bank, Trustee, Trust 41105 to RR McHenry, LLC Deed Data Trustee's Deed #2017R007156 (McHenry County) Site Size 321,472,80 square feet (7.28 acres), more or less, according to appraisal Zoning G5 — Highway Commercial — McHenry Water/Sewer At site Unit Price $5.91 per square foot Comments This property was acquired by a private investor to ultimately be developed commercially. The traffic count on Route 120 is 20,200 vehicles per day. The site was near level, non -wooded, was in a Zone-X floodplain, and contained no wetlands. This sale did not have any river or lake frontage. Adjustments This sale required upward adjustments for market conditions and for its lack of river or lake frontage; it required downward adjustments for its physical characteristics, primarily its lack of Zone -A floodplain land and Wetlands, and for its location. Adjusted Price: $6.53 per square foot Analysis A comparative analysis has been compiled, and the above -captioned sale properties were reduced to appropriate unit prices for comparison to the 4.94-acre component of the subject property capable of re-devclopment. The appropriate unit of comparison for this type of property in this . market area is sale price per square foot of land area. Points of comparative analysis typically include property rights conveyed, financing, conditions of sale, market conditions, location, physical characteristics, and other factors relative to the appraisal of this type of property. All of the sales involved the transfer of fee simple interest, using cash or cash equivalent fnancing. Therefore, no adjustments were required for property rights conveyed or for financing. Sales #1, #3, #4 and #5 were all apparently arrn's length transfers without any duress. MA )<tRISC)h1 Ft'' .Associates, •hoc, 11244 SALES COMPARISON APPROACH, cont'd. 36 Even though the purchasers of Sales #1, #3 and #4 had the right of eminent domain, the purchase prices were fixed by amicable negotiations. I concluded that Sales #1, #3, #4 and #5 did not require any adjustments for sale conditions. Sale #2 was an REO sale, which is typically sold at some level of discount. Therefore, I adjusted Sale #2 upward by 10% for this factor. Subsequent adjustments to Sale #2, as appropriate, were made on the basis of its unit prices adjusted for sale conditions. Over the period of time encompassed by the sales, development land values have appreciated somewhat. I adjusted all of the sales upward at the rate of 3% per year, reflecting the relatively modest appreciation rate for vacant development and/or re -development sites that has occurred over the period of time encompassed by the sales. Subsequent adjustments to the sales, as necessary, were made on the basis of unit prices adjusted for market conditions. Liven the nature of the subject property and of the comparables selected, it is not surprising that some additional adjustments were required for each sale. These were made, as appropriate, for physical characteristics, river/lake frontage, water/sewer availability, zoning, and location. Each of these adjustments is described below. Physical Characteristics - In keeping with the extraordinary assumptions in this assignment, I have concluded that the north half of the subject property is in a Zone-X floodplain and that the south half of the subject property is in a Zonc-AE floodplain of the Fox River. Sales #1 and 42 were adjusted upward by 10% for their inferiority with respect to physical characteristics. Sale #1 had about 75% of its land in a Zone-AE floodplain; Sale #2 had about 10% of its land in Pistakee Lake. I adjusted Sales #3, #4 and #5 downward by 10% because none of those sales had any meaningful Zone-AE floodplain land or wetlands. River/Lalre`Frontage The subject property fronts an the Fox River, a desirable characteristic for high density single-family residential development and commercial development. Sale #1 was similar to the subject property in that it fronted on the Fox River and on Boone Creek; Sale #2 was similar to the subject property in that it fronted on Pistakee Lake. I adjusted Sales #3, #4 and #S upward by 25% because none of them had river or lake frontage. Water/Sewer Availability Like the subject property, Sales #1, #2 and #5 had'water and sewer immediately available for development. I adjusted Sales #3 and #4 upward by 25%because they did not have water and sewer availability at the time of their sale. �.A.RRZSOI� '' Associates, �xxc. 11244 37 SALES COMPARISON APPROACH, cont a. Zoning The subject property is zoned for high- density residential development, and I have assumed in this assignment that thete was a reasonable probability that it could obtain zoning to allow it to be developed as a mixed -use planned unit development. All of the sales had equivalent zoning. However, Sale #3 had single-family residential zoning. I adjusted Sale #3 upward by 10% for this factor. Location The subject property is located in a dead-end commercial district in McHenry, with frontage on the Fox River. Sales #1 and #2 had similar locational characteristics. Sales #3 and #4 were in Johnsburg, on a secondary road. I adjusted both of those sales upward by 10% for their inferior locations. I adjusted Sale #5 downward by 10% for its superior location, fronting at a corner location at a major highway in McHenry. Because I concluded that other physical and locational factors between the sale properties and the subject property A were, effectively, equivalent, no additional adjustments were considered. Percentage adjustments, as used in this report, are intended more to reflect the degree of difference between a sale property and a subject property than they are intended to reflect mathematical precision. Accordingly, a 10% adjustment in this sales comparison approach is intended to reflect a slight difference, whereas a 25% adjustment is intended to reflect a more significant difference. Reconciliation The range of adjusted unit prices is $4.13 to $6.53 per square foot of land area. The mid -point of this range is $5.33 per square foot; the median of this range is $5.31 per square foot; the mean of this range is $5.34 per I square foot. All of the sales have the about the same degree of comparability to the subject property. I have reconciled the range near its indications of central tendency, at $5.30 per square foot. Based on the 4.94 acres of the subject property that constitutes the portion capable of development, the resulting value of that component by the sales comparison approach is $1,140,487. Additional Adjustments The value of the 4.94-acre component of the subject property that is capable of development, $1,140,487, is subject to the extraordinary assumptions and hypothetical conditions addressed in the Scope of Work section of this appraisal. however, it only represents land value of a portion of the property. It does not address land value for the other land components, nor does it address the value of improvements and entitlements. These additional value are addressed on the following page. �.A.R1�zS�� � .Associates, �rzc. 11244 SALES COMPARISON APPROACH, cont'd. an Value — Waukegan Road The portion of the subject properly in Waukegan Road contains 0.46 acres, or 205037.60 square feet. In this appraisal, I have assumed that the land in Waukegan Road (PIN #09- 35-202-008) is subject to a prescriptive easement that, effectively, relegates its use to that of a road. I have concluded that the land value of the 0.46-acre component of the subject property that is contained in Waukegan Road is $1.00 per square foot, or $20,000 (rounded). Land Value —Lagoon and Southwest Strip of Land The portion of the subject property in the lagoon as well as in the strip of land in the southwest coiner of the site between the west bank of the lagoon and the west property line contains 1.83 acres, or 79,714.80 square feet. Most of this land is under water. I have concluded that the land value of the 1.83-acre component of the subject property that is contained in the lagoon and in the strip of land in the southwest corner of the site is $0.10 per square foot, or $8,000 (rounded). SeawalE Value Based upon my analysis of replacement cost and depreciation factors, I have concluded that the value of the 720 feet of steel seawall on the subject property is $30 per lineal foot, or $21009 Piers, Water and Electric There are S3 piers in the lagoon of the subject property. They are all supported by steel posts and the face of all of the piers are wood slats. All piers are served by electricity and water. Based upon my analysis of replacement cost and depreciation factors, coupled with the apparent condition of the piers, I have concluded that the value of the 53 piers in the lagoon component of the subject property is $1,000 per pier, or $53,000. Boat Launch Irnproveznents Value Based upon my analysis of replacement cast and depreciation factors, I have concluded that the value of the boat launch improvements in the northeast cornea of the former marina component of the subject property is $25,000. Boat Launch and Boat Slip Entitlements Several years ago the Army Corps of Engineers did a count of all commercial boat launch facilities and all boat slips on the Chain O'Lakes and the Fox River, north of the Algonquin Dam. The Army Corps ruled that there could be no net boat launches or boat slips than what existed at the time they made their count. Consequently, any property 14 A.RRI50N Pr .Associates, Inc. 11244 �7 SALES COMPARISON APPROACH, cont'd. owner that wanted to acquire or expand boat launches and/or boat slips had to acquire them from another party that was selling boat launches and/or boat slip. Once a boat launch or boat slip entitlement was sold, the Army Corps required its removal from the seller's property. On the date of value in this assignment, there is not a particularly active market for boat launch and boat slip entitlements. Prior to the mid-2000s new marinas were being developed and existing marinas were expanding, and boat slip entitlements were being sold for $10,000 per slip, or more. However, over the past several years demand for boat launch and boat slip entitlements has diminished significantly. The most recent sale of boat slip entitlements of which I am aware was by the Lake County Forest Preserve District (LCFPD). In 2011, the LCFPD purchased the Lake Marie Fishing and Boating Camp from the owners. Included in the sale were entitlements for 45 boat slips and 1 boat launch. Subsequent to the sale, in 2014, the LCFPD sold 41 boat slips to the owner of the Bald Knob Marina on Pistakee Lake for $2,000 per slip. The market for boat slips has probably increased slightly since the LCFPD sale in 2014. Additionally, the subject property fronts in a commercial area on the Fox River in McHenry. I have concluded that the value of the 66 boat slip entitlements is $3,000 per slip, or $198,000. The combined contributory value of the boat launch and the boat slip entitlements is $223,000. 1 Conclusion The overall value of the entire subject property, including land, improvements and entitlements, sine sure of the land value ($1,140,487), the estimated contributory value of the land in Waukegan Road ($20,000), the estimated contributory value of the land in the lagoon and in the southwest strip of land ($8,000), the estimated contributory value of the steel seawalls ($21,600), the estimated contributory value of the 53 piers ($53,000), the estimated contributory value of the boat launch improvements ($25,000), the estimated contributory value of the boat launch entitlement ($25,000), and the estimated contributory value of the boat slip entitlements ($198,000). This sum is $1,491,087. It is expressed in round numbers as $1,491,000, �.E�.RRZSON �-l�.ssoczates, 1xAc. 11244 �,AARXSpIV � A.ssocitates, Inc. 11244 RECONCILIATION AND CONCLUSION Overview 41 In the appraisal of the subject property, only the sales comparison approach was developed. F oi• the reasons addressed in the Scope of Work section of this report, I concluded that neither the cost approach nor the income capitalization approach was meaningful and I did not develop them in this assignment. The value indication of the subject property by the sales comparison approach is $1,491,000. Sales Comparison Approach In the sales comparison approach five sales of commercial development sites were selected and analyzed in conjunction with the valuation of the usable component of the subject property. Given the diversity among the sales, it is not surprising that all required some adjustments. However, the adjustments were not difficult or unusual, and were not so significant that they affected the validity of the approach. One of the sales was adjusted for sale conditions; all of the sales were adjusted for market conditions and physical characteristic differences; two were adjusted for their lack of water and sewer availability; three were adjusted for locational differences; three were adjusted for their lack of lake or river frontage; one was adjusted for its zoning. The range of adjusted unit prices was reconciled near its central tendency indications. This was the only approach applicable to the valuation of the usable land component, and I have placed primary reliance on its conclusions in my final conclusions. Additional adjustments were made to the value conclusion of the usable land component of the subject property for the estimated contributory value of (a) the land in Waukegan Road, (b) the Iand in the lagoon and in the strip' of land in the southwest corner of the site, (c) the steel seawalls, (d) the 53 piers (including electricity and water hookups), (c) the boat launch site improvements, (e) the boat launch entitlement, and (f) the 66 boat slip entitlements. Conclusion " In view of the foregoing, it is my conclusion that market value of the fee simple interest of the subject property was, subject to the Lintitr'ng Conditions artdAssuntptions contained in the report as well as to the extraordinary assumptions and hypothetical conditions explained in the Scope of Work section of the report, as of October 22, 2018, measured in the amount of $1.491 MILLION DOLLARS---------------------------------------------------------------(�1,491,004}. Allocation The value of the subject property concluded in this appraisal — $1,491,000 --- is allocated as $1,268,000 to the land and improvements and $223,000 to the boat launch and boat slip entitlements. �.A.��XSOI'� � .A550Ci21t:e5, �xrc. 11244 RECONCII.IATION AND CONCLUSrON, cont'd. Exposure Time Exposure time is def ned as the estimated length of time the properly would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal. Given my observations relative to this property, i have concluded that if the subject property had been listed at a reasonable price, had been professionally marketed, and had been given reasonable and sufficient exposure to the commercial development/redevelopment market in McHenry, it would have been on the market for approximately a 12-month period of lime in order to have been sold at or near the appraised value. �.�.�.RXSQN ' Associates, �.x�:c, 11244 CERTIFICATION I certify that, to the best of my knowledge and belief: 1. The statements of fact contained in this report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. 3. I have na present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved. 4. I have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. 43 S. I have no bias with. respect to the property that is the subject of this report or to the parties involved with this assignment. 6. My engagement in this assignrent was not contingent upon developing or reporting predetermined results. 7. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. 8. My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code %J Professional Ethics &Standards of Professional Appraisal Practice of the Appraisal Institute, 9. My analyses, opinions, and conclusions were developed, and this report has been prepared,rn conformity with the Uniform Standarids of Professional Appraisal Practice. 10. I have made a personal inspection of the property that is the subject of this report. 11. No one provided significant real property appraisal assistance to the person signing this certification. . 12. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. �ARRXSC7N-�.ssaciates, Irrrc. 11244 CERTIFICATION, cont a. 13. As of the date of this report, I have completed the continuing education program of the Appraisal Institute, 14. I am currently a Certified General Real Estate Appraiser in the State of Illinois. #553.000005 (Illinois) Expires 9/30/19 TOPOGRAPHIC SURVEY .. �_ ._. .. _. - _ , BOONE CREEK ---- _ -, -- _I �-I - — �-� i f; � � � � � � � i I ,I I I I I I� _ � � �� �� _ �\ i ____JIB II __�___�—__—.__—__—.._.____ �oNNnaFq�HENP., tHE FIELOWOPM WAE CO,A PELETE to onre, sAmmwra, �WN015 NO o]]�aa]eo�RVEYOR lE ttna2ot] _�-----------------�,, f � o k61�]�, �) }: � o- — — -- -- - � _� � I � � �����-� I � ., z a �� i � � ��� � � __ _--- - -- �i� � - _-�� _ �. , '�� ,;�T�F �,PWF � ICI, - ��=-, 8 3-fi •—_. '�I, ��-,� / p �j 1l Imm Fw PrerNMAaE Pm41e �� ` • � 1ti U 2)T3q `. Z � IJ �J I� � II � � �� _r- __.. �'� ° ,. � � li � � ��� I � �� �� 0 - P ]q o� �ee w o=„ o�Er �E. n �' �� .E ,APos TOPOGRAPHIC SURVEY not ,oq _ BAXTER&WOODMAN 0,+,4 �� nwxu e:ruuu«�-w.wn:s�vn NCFH]E EMPIRES tl ]O lo�E gEVISWNPATE: COIMEIrt9: WN qY: AEB ECICEO n: A 4TA:]Ease e�EgT: eAv olueH.grvG E _- 180664 Office of the City Clerk McHenry Municipal Center 333 Green Street McHenry, Illinois 60050 Phone: (815) 363-2108 Fax: (815) 363-2119 www.ci.mchenry.il.us EXECUTIVE 3E33101N DATE: December 3, 2018 TO: Mayor and City Council FROM: Debra Meadows, Deputy City Clerlc RE: Semi -Annual Review of Executive Session Meeting Minutes ATT: Resolution AGENDA ITEM SUMMARY: Pursuant to the Illinois Open Meetings Act, a semi-annual review of minutes and recordings of all closed executive sessions that have not yet been released for public review must be conducted semi-annually. BACKGROUND: The determination of which minutes, if any that may be released is based on the advice of legal counsel. The Act also permits the destruction of executive session recordings that exists more than 18 months after the date the meeting was recorded. Executive Session minutes presented for approval and release: 06/18/18 5/ILCS 120/2(c) (21) Semi -Annual Review of Executive Session Minutes 07/10/18 5/ILCS 120/2(c) (11) Potential Litigation 07/31/18 5 ILCS 120/2(c) (11) Potential Litigation 08/06/18 5 ILCS 120/2(c) (5) Purchase or Lease of Real Property 08/20/18 5ILCS 120/2(c) (11) Potential Litigation 08/23/18 5 ILCS 120/2(c) (11) Potential Litigation 09/04/18 5 ILCS 120/2 (c) (11) Potential Litigation 09/10/18 5 ILCS 120/2(c) (5) Purchase or Lease of Real Property 09/10/18 5 ILCS 120/2(c) (11) Potential Litigation 09/24/18 5 ILCS 120/2(c) (11) Potential Litigation 10/01/18 5 ILCS 120/2(c) (5) Purchase or Lease of Real Property 10/01/18 5 ILCS 120/2(c) (11) Potential Litigation 10/15/18 5 ILCS 120/2(c) (5) Purchase or Lease of Real Property 11/12/18 5 ILCS 120/2 (c) (11) Potential Litigation 11/12/18 5 ILCS 120/2 (c) (11) Potential Litigation 11/12/18 5 ILCS 120/2 (c) (5) Purchase or Lease of Real Property ANALYSIS: Upon approval of the attached Resolution in Open Session, all Executive Session minutes prior to November 13, 2018, will be released. The Cily of McHenry is deAicaled hr providing its citizens, businesses, oxA nisilors roilh the highest ytra/iry of programs and sen+ices in a customer -oriented, e�cieut, uud fiscullp responsible nrmrner. Recommendation: If Council concurs, then it is recommended a motion is made in Open Session to pass the attached Resolution approving a) Executive Session meeting minutes as presented; b) authorizing the release of Executive Session meeting minutes as presentedNo; and c) destruction of any executive session recordings that exist more than 18 months and the minutes for that meeting have been approved. R-18- RESOLUTION WHEREAS, the Illinois Open Meetings Act specifies that Executive Session minutes be reviewed at least once every six months; and WHEREAS, upon advice from Counsel, the McHenry City Council recommends approval of the following Executive Session Minutes: and; 06/18/l8 5/ILCS 120/2(c) (21) 07/10/18 5/ILCS 120/2(c) (11) 07/31/18 5 ILCS 120/2(c) (11) 08/06/18 5 ILCS 120/2(c) (5) 08/20/18 5 ILCS 120/2(c) (11) 08/23/18 5 ILCS 120/2(c) (11) 09/04/18 5 ILCS 120/2 (c) (11) 09/10/18 5 ILCS 120/2(c) (5) 09/10/18 5 ILCS 120/2(c) (11) 09/24/18 5 ILCS 120/2(c) (11) 10/01/18 5 ILCS 120/2(c) (5) 10/01/18 5 ILCS 120/2(c) (11) 10/15/18 5 ILCS 120/2(c) (5) 11/12/18 5 ILCS 120/2 (c) (11) 11/12/18 5 ILCS 120/2 (c) (11) 11/12/18 5ILCS 120/2 (c) (5) Semi -Annual Review of Executive Session Minutes Potential Litigation Potential Litigation Purchase or Lease of Real Property Potential Litigation Potential Litigation Potential Litigation Purchase or Lease of Real Property Potential Litigation Potential Litigation Purchase or Lease of Real Property Potential Litigation Purchase or Lease of Real Property Potential Litigation Potential Litigation Purchase or Lease of Real Property WHEREAS, upon advice from Counsel, the McHenry City Council recommends release of the following Executive Session Minutes as the need for confidentiality no longer exists; and WHEREAS, upon advice from Counsel, the need for confidentiality still exists for any Executive Session minutes not released. NOW THEREFORE, BE IT RESOLVED as specified in the Illinois Open Meetings Act that authorization is hereby granted to approve the destruction of Executive Session recordings that exists more than 18 months since the date of the closed session. BE IT FURTHER RESOLVED that a copy of this Resolution shall be made a permanent part of the City Council minutes. PASSED AND APPROVED this 3rd Day of December 2018. VOTING AYE: VOTING NAY: ABSENT: ABSTAIN: ATTEST: Mayor City Clerk