HomeMy WebLinkAboutPacket - 04/01/2001 - City Council
A G E N D A
REGULAR CITY COUNCIL MEETING
Monday, April 1, 2001 7:30 P.M.
1. Call to Order
2. Roll Call
3. Pledge of Allegiance
4. Presentation: McHenry Zone Skate and Bike Park $60,000 Donation
5. Public Hearing: City of McHenry Tax Increment Financing District
6. Public Input Session – 10 Minute Limitation
7. Consent Agenda:
Resolution designating April 7 – 13, 2002 as International Building Safety Week;
Recommendation to hire Bradford Fink as Assistant Director of Public Works ;
Ordinance granting Lot Width Variance/Conditional Use Permit to Cornerstone Material Recovery,
Inc.;
Ordinance approving Special Service Area No. 2, Riverside Hollow Subdivision;
Water and Sewer Billing Discrepancy Policy;
Request from Inland Real Estate Development for Release of Letter of Credit for Olde Mill Ponds
Subdivision in an amount not to exceed $350,000;
Purchase Order for Sioux Lane Water Tower Pier Repairs to Consolidated Concrete Restoration, not to
exceed $5,320;
Approval of City Council Meeting Minutes: February 11, 2002 and February 18, 2002;
8. Request from Resident Cindy Sullivan for the Temporary Use of Veterans Memorial Park for a
Noon Prayer Service to observe National Day of Prayer, Thursday, May 2, 2002, and to Waive
all associated fees.
9. Request for use of Petersen Park by the McHenry Township Fire Protection District for a
Benefit Concert on Saturday, June 15, 2002 and to Waive all associated fees.
10. Request for Fence Variance to the Corner Side Yard at 4740 Loyola Drive.
11. Request for Variance from Horizon Pipeline Company for three buildings on one Zoning Lot.
12. Request to add Parking on North Riverside Drive.
13. Employee Health Insurance Renewal for Fiscal Year 2002/2003
14. Authorization to send letters to Unincorporated Property Owners regarding Annexation.
15. Year 2002 Tag Days
16. Mayor – Statement and Reports
17. Committee Reports
18. Department Head Reports
19. New Business
20. Executive Session: Property Acquisition
21. Adjournment
Posted and Mailed: March 27, 2002
C O N S E N T A G E N D A
The Consent Agenda for the April 1, 2002 City Council meeting consists of the
following items:
Resolution designating April 7 – 13, 2002 as International Building Safety Week;
Recommendation to hire Bradford Fink as Assistant Director of Public Works ;
Ordinance granting Lot Width Variance/Conditional Use Permit to Cornerstone Material
Recovery, Inc.;
Ordinance approving Special Service Area No. 2, Riverside Hollow Subdivision;
Water and Sewer Billing Discrepancy Policy;
Request from Inland Real Estate Development for Release of Letter of Credit for Olde Mill Ponds
Subdivision in an amount not to exceed $350,000;
Purchase Order for Sioux Lane Water Tower Pier Repairs to Consolidated Concrete Restoration,
not to exceed $5,320;
Approval of City Council Meeting Minutes: February 11, 2002 and February 18, 2002;
Attachments
EXECUTIVE SESSION
TO: Mayor and City Council
FROM: John A. Lobaito, City Administrator
FOR: April 1, 2002 Regular City Council Meeting
RE: McHenry Shores Water Company
Background
The owner of the McHenry Shores Water Co., Tom Mathews has discussed the sale of his water
company with the city for the past seven years. Determining a reasonable sale price for the
company has been the city’s’ main obstacle in purchasing the system. Mr. Mathews has
represented the water company to be worth in excess of $1,000,000. The city has placed a value of
the water company between $200,000 - $300,000. Neither value is based on an appraisal. The city
has largely based its estimate of value on an engineering analysis performed by Baxter and
Woodman in 1997. It is uncertain how Mathews has valued the company.
In 1998 and 1999 the Illinois Environmental Protection Agency (IEPA) received a number of
complaints from residents of McHenry Shores Subdivision regarding the water quality of the system.
Likewise, many residents appeared before the City Council at this time and complained of not only
the quality of the water but also the availability. During drought periods, some residents were
without water. Because of the complaints, the IEPA conducted an investigation on the allegations
against the water company. As part of the investigation, public hearings were held and residents
were permitted to register their complaints “on the record.” As a result of the investigation a
number of violations were found and the water company was fined and required to correct the
violations. An important finding of the IEPA was that although the water was often discolored, the
water quality was within acceptable standards. As recently reported to the City Council, the IEPA is
going after Mr. Mathews again for noncompliance with the past orders to correct the violations.
Most recently, Mr. Mathews has been in bankruptcy court for all five of his water companies
including the McHenry Shores Water Company. The court proceedings continued for
approximately 18 months and concluded late last year when Mr. Mathews was able to refinance his
debt on the water companies and pay off his original notes. In addition, the courts ordered
Mathews to replace or eliminate the letter of credit held by First Midwest Bank. The letter of credit
was issued to secure certain public improvements for Thoroughbred Estates, a residential
subdivision in McHenry County. It is expected that the letter of credit issue will be resolved in the
next 60 days.
Discussion
This past week Mr. Mathews has once again approached the City of McHenry to purchase the
McHenry Shores Water Co. He has indicated the value of the Company to be $1,400,000. We
reiterated the City’s estimated value of $200,000 - $300,000.
After a short discussion with Mr. Mathews, it became obvious that it will be extremely difficult to
come to an agreement on price. According to Mathews, he recently sold unit four of Thoroughbred
Estates for $1,000,000. This sale has put him in a position to be tough on negotiating the sale price
of the water company.
If the City is interested in pursuing the purchase of the McHenry Shores Water Company, the City
Council should consider the purchase sooner than later. Matthews has indicated that he is
considering improvements to the system. If he makes improvements, it will only increase the
purchase price. Additionally, depending on the type of improvements, Mathews would be able to
request a rate increase through the Illinois Commerce Commission. If this occurs, the City Council
may experience some political pressure from the area residents to buy the water company.
Lastly, to avoid a long drawn out negotiation on price, the City Council may wish to consider
entering into an agreement with Mr. Mathews whereby both parties would agree to set the sale
price based on an appraised value of the water company. The agreement would include among
other things the name of a mutually acceptable appraiser, the method of appraisal, and the method
of payment for the company.
It is recommended that the City Council discuss these issues.
CONSENT AGENDA
TO: Mayor and City Council
FROM: John A. Lobaito, City Administrator
FOR: April 1, 2002 Regular City Council Meeting
RE: Assistant Director of Public Works
Pursuant to the promotion of Dan Marcinko to Director of Public Works, at its January 7,
2002 meeting, the City Council authorized staff to advertise for the position of Assistant
Director of Public Works. From eleven applications received, four candidates were
interviewed.
Upon review of the qualifications and backgrounds of the candidates, Director Marcinko
and I recommend Bradford Fink for the position of Assistant Director of Public Works at a
salary of $58,949, Grade 19, Step 5, with ten-days vacation the first year. A copy of his
resume is attached. Mr. Fink has six-years of municipal engineering inspection experience
with the Village of Palatine giving emphasis to customer service. His success at Palatine
combined with his advanced knowledge in computer applications and commitment to
customer service will be an asset to McHenry.
It is recommended that the City Council authorize the hiring of Bradford Fink in the position
of Assistant Director of Public Works at Grade 19, Step 5, subject to the successful
completion of a pre-employment physical. Mr. Fink is available to start no sooner than April
16, 2002.
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Attach.
AGENDA SUPPLEMENT
TO: Mayor and City Council
FROM: John A. Lobaito, City Administrator
FOR: April 1, 2002 Regular City Council Meeting
RE: Renewal of Employee Health Insurance Plan for 2002/2003 Plan Year
RECOMMENDATION:
1) Approve the renewal of the medical administrative and excess insurance
portion of the plan as represented in the final Benefits Systems and
Services, Inc. quote, Table A.
2) Approve the internal charges outlined in Table B for medical coverage and
Table C for dental coverage (summarized in Table D).
3) Allow a delay in implementation for retirees and COBRA participants until
May 1, 2002.
The present health insurance plan covering City of McHenry employees expires March 31, 2002.
The City Council must consider the renewal quotation for the medical plan’s administrative and
excess insurance costs, set the plan’s internal medical and dental charges, and address
implementation of the new charges for retirees and COBRA participants.
Overview
The City’s health insurance plan contains a medical, vision, prescription card, and dental benefit
provision. The vision, prescription and dental components are entirely self-funded.
The medical portion, which is by far the most costly portion, is a hybrid plan with the city responsible
for self-funding a primary layer of medical claims and excess insurance purchased for claims
exceeding the primary level. There are two types of excess coverage utilized. First, “specific”
excess coverage kicks-in when claims for individual participants exceed $50,000. In a typical year,
only one or two claims exceed the specific layer. Second, am aggregate attachment provides an
overall layer of protection for the medical portion of the plan. The aggregate excess insurance
applies when the city’s total claims cost meets the aggregate attachment level. For the past year,
the aggregate was approximately $876,500. Historically, the aggregate has been set at 125% of the
actual expected claims as determined by the insurance company’s actuary. By design, the
insurance company has a “cushion” built in so that the aggregate excess coverage would only be
utilized in a very poor claims year.
Medical Plan Administrative and Excess Insurance Renewal
Over the past several weeks, Scott Smiricky the Health Insurance Broker for the City of McHenry
has been active in the market obtaining renewal quotes. Fortunately, the quotes have been more
favorable than last year’s increase of approximately 38%. Table A depicts various quotes obtained.
The city’s maximum exposure level for all costs (far right column) depicts an increase of
approximately 1.8% when compared to the current year.
The city’s aggregate attachment, or maximum claims-exposure level, actually decreases 9.5%. This
means that the city would be responsible for cumulative claims up to $872,289 before the excess
coverages takes over. The cost for the specific attachment would increase 12.4% to $193,437.
Internal Charges
Medical
The attached schedule in Table B depicts how the internal charge for health plan participants is
determined. The schedule provides a breakdown of the internal charge for fixed medical costs per
participant, medical claims, vision, prescription, and reserve amounts. In keeping the benefit level
constant from the prior year, the internal charge would amount to $372.29 for single coverage and
$873.06 for family coverage. This represents increases of 14.5% and 12.8% in the single and
family rates respectively. However, these rates are more favorable than the original budget, which
projected increases of 25% for both rates.
Dental
As stated earlier, the dental portion of the plan is 100% self-funded with a Third Party Administrator
(TPA) managing the program. Table C depicts the recommended monthly internal dental charge of
$25.69 for single coverage and $68.95 for family coverage. Participants electing family coverage
are required to contribute a portion of the internal charge. Presently, this contribution is $18.15 per
month. It is recommended that the contribution increase by 10% to $19.97 per month. For
participants electing both medical and dental coverage, the total internal charge is $397.98 for
single coverage and $942.91 for family coverage.
Implementation of Internal Charges for Retiree and COBRA Participants
Retiree Coverage
The health program currently allows retirees and former employees under COBRA voluntarily to
elect to participate in the program with full benefits. However, these elective participants are
required to pay the entire premium amount. Historically, an average of approximately six retirees
has elected to participate in the city’s health program at any one time. Staff is recommending the
implementation of new charges for retirees and COBRA participants for the May 2002 billing, which
will allow time to notify retirees of the imminent change.
Recommendation
1) Approve the renewal of the medical administrative and excess insurance portion of the plan as
represented in the final Benefits Systems and Services, Inc. quote, Table A.
2) Approve the internal charges outlined in Table B for medical coverage and Table C for dental
coverage (summarized in Table D).
3) Allow a delay in implementation for retirees and COBRA participants until May 1, 2002.
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Attach.
FINANCE/PERSONNEL COMMITTEE
TO: Finance/Personnel Committee
FROM: John A. Lobaito, City Administrator
FOR: March 27, 2002 Finance/Personnel Committee Meeting
RE: Renewal of Employee Health Insurance Plan for 2002/2003 Plan Year
The present health insurance plan covering City of McHenry employees expires March 31, 2002.
Consequently, the Finance/Personnel Committee will need to discuss renewal options and the
quotes received, as well as establishing the internal health insurance rates charge to the user
departments for plan participants. Subsequently, the City Council must consider the renewal
quotation for the medical plan’s administrative and excess insurance costs, set the plan’s internal
medical and dental charges, and address implementation of the new charges for retirees and
COBRA participants.
Overview
The City’s health insurance plan contains a medical, vision, prescription card, and dental benefit
provision. The vision, prescription and dental components are entirely self-funded.
The medical portion, which is by far the most costly portion, is a hybrid plan with the city responsible
for self-funding a primary layer of medical claims and excess insurance purchased for claims
exceeding the primary level. There are two types of excess coverage utilized. First, “specific”
excess coverage kicks-in when claims for individual participants exceed $50,000. In a typical year,
only one or two claims exceed the specific layer. Second, am aggregate attachment provides an
overall layer of protection for the medical portion of the plan. The aggregate excess insurance
applies when the city’s total claims cost meets the aggregate attachment level. For the past year,
the aggregate was approximately $876,500. Historically, the aggregate has been set at 125% of the
actual expected claims as determined by the insurance company’s actuary. By design, the
insurance company has a “cushion” built in so that the aggregate excess coverage would only be
utilized in a very poor claims year.
Medical Plan Administrative and Excess Insurance Renewal
Over the past several weeks, Scott Smiricky the Health Insurance Broker for the City of McHenry
has been active in the market obtaining renewal quotes. Fortunately, the quotes have been more
favorable than last year’s increase of approximately 38%. Table A depicts various quotes obtained.
The city’s maximum exposure level for all costs (far right column) depicts an increase of
approximately 1.8% when compared to the current year.
The city’s aggregate attachment, or maximum claims-exposure level, actually decreases 9.5%. This
means that the city would be responsible for cumulative claims up to $872,289 before the excess
coverages takes over. The cost for the specific attachment would increase 12.4% to $193,437.
Internal Charges
Medical
The attached schedule in Table B depicts how the internal charge for health plan participants is
determined. The schedule provides a breakdown of the internal charge for fixed medical costs per
participant, medical claims, vision, prescription, and reserve amounts. In keeping the benefit level
constant from the prior year, the internal charge would amount to $372.29 for single coverage and
$873.06 for family coverage. This represents increases of 14.5% and 12.8% in the single and
family rates respectively. However, these rates are more favorable than the original budget, which
projected increases of 25% for both rates.
Dental
As stated earlier, the dental portion of the plan is 100% self-funded with a Third Party Administrator
(TPA) managing the program. Table C depicts the recommended monthly internal dental charge of
$25.69 for single coverage and $68.95 for family coverage. Participants electing family coverage
are required to contribute a portion of the internal charge. Presently, this contribution is $18.15 per
month. It is recommended that the contribution increase by 10% to $19.97 per month. For
participants electing both medical and dental coverage, the total internal charge is $397.98 for
single coverage and $942.91 for family coverage.
Implementation of Internal Charges for Retiree and COBRA Participants
Retiree Coverage
The health program currently allows retirees and former employees under COBRA voluntarily to
elect to participate in the program with full benefits. However, these elective participants are
required to pay the entire premium amount. Historically, an average of approximately six retirees
has elected to participate in the city’s health program at any one time. Staff is recommending the
implementation of new charges for retirees and COBRA participants for the May 2002 billing, which
will allow time to notify retirees of the imminent change.
Recommendation
1) Approve the renewal of the medical administrative and excess insurance portion of the plan as
represented in the final Benefits Systems and Services, Inc. quote, Table A.
2) Approve the internal charges outlined in Table B for medical coverage and Table C for dental
coverage (summarized in Table D).
3) Allow a delay in implementation for retirees and COBRA participants until May 1, 2002.
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Attach.
ORDER OF PROCEEDING
TAX INCREMENT FINANCING
PUBLIC HEARING
MONDAY, APRIL 1, 2002 , 7:30 PM
1. Call Public Hearing to Order Mayor Althoff
2. Explanation of Public Hearing Kathleen Field Orr, Esq.
and Legal Notices of Hearing
3. Mayoral Comments and Report of Mayor Althoff
Joint Review Board
4. Review: Lisa Lyon,
A) Tax Increment Financing Overview Trkla, Pettigrew, Allen & Payne, Inc.
B) Housing Impact and Eligibility Study
C) Redevelopment Project Plan
5. Questions/Answers
A) City Council
B) Audience
6. Motion to Close the Public Hearing
7. Next Step Kathleen Field Orr, Esq.
PUBLIC HEARING
TO: Mayor and City Council
FROM: John A. Lobaito, City Administrator
FOR: April 1, 2002 Public Hearing
RE: City of McHenry Tax Increment Financing District
INTRODUCTION
The Public Hearing for the establishment of a Tax Increment Financing Plan is one of the last
steps in the process of creating a Tax Increment Financing Redevelopment Area. The
purpose of the Public Hearing is to provide the general public with an opportunity to
participate in a public discussion of the proposed Tax Increment Financing (TIF) District.
Tax Increment Financing is a tool for local governments to take a proactive role in “jump-
starting” the more economically sluggish parts of the community. Revenue generated from
the TIF District is reinvested in the area through economic incentives to encourage
development and expansion of businesses. Without the TIF benefits, the city risks a further
decline in the economic assessed valuation growth of the area and potentially sales tax
revenue.
The McHenry City Council is considering a TIF District in the downtown area in part to
improve the historically modest growth in equalized assessed valuation in the area. In
addition, there are other benefits to the community, which include increased property values,
private investment and development, job retention, and economic stimulation outside the TIF
District boundaries to name a few.
The City of McHenry continues to explore potential development projects within the district
boundaries. One of these projects is the Riverwalk. This project is independent to the
creation of the TIF District. Although the TIF may provide the financial vehicle to build the
Riverwalk, the City Council is currently in the preliminary investigation of the feasibility of the
project. Grant funds, private donations, and public monies have been secured to pay for the
preliminary work. To date, over $1,000,000 has been committed to this project.
BACKGROUND
Feasibility Study: The process began on October 29, 2001 when the City Council passed a
Resolution authorizing a Feasibility Study to determine if the defined area legally qualifies as
a Tax Increment Financing District (TIF). Under the TIF Act, the defined area qualified as a
Conservation Area. The area (map attached marked Exhibit B) met nine of the thirteen factors
set forth in the act. One of the most relevant factors was the lagging rate of annual growth of
the total equalized assessed valuation.
P ublic Meeting: On January 14, 2002, a public meeting was conducted to advise the taxing
districts, taxpayers that own property in the proposed Redevelopment Area, and residents
residing within the project area, of the city’s intent to prepare a Redevelopment Plan. The
primary purpose of the meeting was to receive comments from the public on the project.
Notices of the meeting were mailed to all affected groups.
Review of TIF Redevelopment Plan: At its February 4, 2002 meeting, the City Council
reviewed the TIF Redevelopment Plan. The Redevelopment Plan responds to the
requirements of the Tax Increment Allocation Redevelopment Act. The document provides a
“roadmap” for the city to guide improvements and activities within the TIF Project Area. The
plan includes a generalized land use plan for the area, specifies development and design
objectives for the TIF area, and includes an anticipated budget. The City Council also passed
an ordinance establishing a public hearing date for the TIF Redevelopment Area and Plan.
Joint Review Board: The Joint Review Board (JRB) membership consists of all the affected
taxing districts. Each taxing entity has one representative on the board. In addition, a
resident residing in the Redevelopment Area serves on the board as the public member. The
JRB met on February 26, 2002. Minutes of the meeting are attached. The board’s purpose
among other things is to review the Eligibility Study and to make a recommendation to the
City Council on whether a TIF District is warranted. The board unanimously recommended to
the City Council that a TIF District be established.
Notices: To comply with the TIF Act, numerous public notices must be provided to the public
to encourage participation in the process of developing a TIF District. In addition to the steps
outlined above. Certified mailings giving notice of the April 1, 2002 Public Hearing were
mailed to all owners in the Redevelopment Area and persons on the Interested Parties
Registry on file in the City Clerk’s office. In addition, residents in the Redevelopment Area
and owners within 750-feet of the Redevelopment Area, were notified of the Public Hearing
by regular mail. Lastly, two public hearing notices were published in the Northwest Herald
on two separate occasions.
Project Area Boundary: Map attached marked Exhibit B.
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ACTION BY THE CITY COUNCIL
Within 14-days, but no more than 90-days, from the Public Hearing date, the City Council
must take action on the following ordinances to establish a TIF District:
1. An Ordinance approving the Downtown Redevelopment Project and Plan
for the Redevelopment Project Area.
2. An Ordinance designating the Tax Increment Redevelopment Project Area
a Redevelopment Project Area, pursuant to the TIF Act.
3. An Ordinance adopting Tax Increment Allocation Financing for the
Redevelopment Project Area
If the City Council decides to proceed with the creation of a TIF District, the City Council, by
motion, should direct staff to prepare the referenced ordinances for City Council action.
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