HomeMy WebLinkAboutMinutes - 10/18/2000 - Finance and Personnel Committee FINANCE AND PERSONNEL COMMITTEE
`.. IWIINUTES
October 18, 2Q00
Members Preaent: Chairperson Murgatroyd, Alderman Bai�d. Aiderman
M�cClatchey arrived at ?:07 p.m.
Others k'resent: City Glerk Althoff, City Admuustrator Lobaito, Assistant
Admini.strator M�xeiner, Aldermen Bolger and C3�lab.
Chairperson Alderman Murgatroyd ca.tled the Finance and Pe�-sonn�l Cqmmittee
Meeting to order at 7:00 p.m. He stated the purpose of this �venir�g's meeting
was to cansider fundi.ng alternatives for the McHenry Shore� Project
Assessment F�.�nd.
PRO,TECT A88�88MENT FUND F'[JNDII�PC�ALT�R��,11'IV�B
Assistant Administrator Maxeiner explained the McHenry City Coun,�il in i993
issued $5.3 million in Revenue Bonds as a refunding;mechani�m for both the
1986 Sou'th Wastewater Treatment Plant CAngtruction Revenue SQnd Issue and
the 198$ i�cHenry Shores Sanitary Sewer E�ctension Revenue Bond Issue. The
debt service requirements for the 1993 revenue band�are derived �'ro�.
numerous sources ba�ed on the followin.g formula:
� 28%from 1'roject Assessment payments
• ?2%from Water/Sewer Operations and �Vlaintenanae
'�-- with 1 I% finaneed from the Watez�System side and 89%fm� the
Wastewater System side
in addition to the deposft of special assessment paynaent� from McHenry 9hores
property owners, the fund is sugplemented by an annual $48,UQ0 pay�ent
from pnoperty taaes identi�ed as Public Benefit on the Tax Letr�worksh�ets.
5taff anticipated the Public Benefit tax levy, special assessment payments from
property ovaners and the funds annu�l earned interest would b+e sufficient to
me�t debt seivice requirements. An unforeseeable drQp in interest rates
pravided an opportuntity to mariy McHenry Shores property owners to prepay
their assessments via law-ir�terest loans. The large amount of prepayments
resulted in a sub�tantial under-fund.ing of the debt service fund.
Assistant Administrator Maxeiner reminded the com.mittee this situation had
been diseussed briefly at the October 11+� Finance Crnn�tittee Me�ting during
the 1999�2000 audit review.
Assistant Ad�ni�sistrator Maxeiner presented the following three fiinding
alternatives for committee considera,tion and review:
1. A one-time lump sum transfer of$510,000 from the Wat�r/Sewex
Fund;
2. An annuaJ. transfer from the WaterJSewie� Fur�d between$70-
�'' $125,000;
3. A$60,OOU transfer from the W�ter/Sewer funds interest earning� for
the next three years in addi�ian to �,he allocation of interest earnings
OCT. 30. 2000 11 :47AM PM TAX NORTHFIEL➢ 847 646 24b0 N0. 5420 P. 3
\..
�xaance Committee Minutes
Octobet 18, 2000
Page Two
from the gond Rescrve F�nd� Y]�epreciatian Rescrn Fund and ttxe
Hond axid Interest Fluzd,
Some diseussion followed.
Alderuian MeClatchey arrived at?:0? p.n�.
In response to eommittee inquiry,Assistant Adin.inistrator Max�iener noted
Option #�3 pmvided for less impact on the existing as well as future budgets.
It was the coasensus of tbc committce to recommend Qption 1i3 to fiill councii.
Motion by Baird� seconded by McClatchey to nc�ommrnd to full council an
a=uxua2 $60,000 transfer from the Water and Sewer Fund's interest earnings
over the next three years iri addition to the interest earning transfers from the
-Bond Reseive Flxnd
-the Depreciation Reservc klind and
-the Bond and Intertst F1ind
� tv offset the Projeet Assessment F�nd's de�icit balance.
Voting Aye: Baird, McClatchey, Murgatroyd
Voting Nay: None
Absent: None
Motion carried.
There being no further business;
Motion by Baird, seconded by McClatchey to adjourn the meehng at 7:12 p.�.
Voting Ayc: Baird, McClatchey, Murgatroyd
Voting Nay: None
Absent: None
Motion carricd.
'The rneeting adjourned at 7:12 p.m.
.��� �
�nance Committee Chairperson Murgatroyd
�
�, - 1993 Revenue Bonds
Debt Service Requirements
2000-01
($617,000)
L, 28% from Project Assessment 72% from Water/Sewer
($172,760) Operations and Maintenance
($444,240)
11% from 89% from
Water Division Wastewater Division
($48,866) ($395,374)
,
�
` Option 3: Capturing Interest from Bond Reserve, D� _ciation Reserve, and Bond and Interest Fund � '
Project Assessment Fund
Water Wastewater '
Division Division
Total Project Remaining Portion Portion
Fiscal Debt Assessment Debt Service (11% of (89% of
Ycar rvi Portion (28%1 Am un Remainder) Remainder)
2000-01 $617,000 $172,760 $444,240 $48,866 $395,374
2001-02 596,000 166,880 429,120 47,203 381,917
2002-03 624,750 174,930 449,820 49,480 400,340
2003-04 601,375 168,385 432,990 47,629 385,361
2004-05 428,000 119,840 308,160 33,898 274,262
2005-06 414 0 115 20 298.080 32.789 265.291
Total $3,281,125 $918,715 $2,362,410 $259,865 $2,102,545
Contributing Components of Project Assessment Portion (28%of Total Debt Service)
PA Fund PA Fund "Public Bond& Interest Depreciation Bond Reserve WateNSewer General Less P/A Fund
Fiscai Balance* Interest BenefiY' Fund Interest Reserve Interest Fund Fund Transfer to Balance'
Year (As of 5/1) Earnings Levy Earnings Int. Earnings Earnings Contribution Contribution Bond& Int (4/30)
2000-01 $59,125 $3,000 $48,000 $7,500 $15,750 $41,400 $0 $0 $172,760 $2,015
2001-02 2,015 100 48,000 7,500 15,750 41,400 60,000 0 166,880 7,885
2002-03 7,885 400 48,000 7,500 15,750 41,400 60,000 0 174,930 6,005
2003-04 6,005 300 48,000 7,500 15,750 41,400 60,000 0 168,385 10,570
2004-05 10,570 500 48,000 7,500 15,750 41,400 0 0 119,840 3,880
2005-06 3,880 200 48,000 7,500 15,750 41,400 0 0 115,920 810
*Cash and equivalent