HomeMy WebLinkAboutMinutes - 8/11/1998 - Finance and Personnel Committee (2) `- AGENDA : SUPPLEMENT
TO: Mayor and City Council
FROM: John A. Lobaito, City Admini� tor
FOR: August 11, 1998 Finance C m ittee Meeting
RE: Route 31/Shamrock Lane Tr " Signal and Improvements
ATTACHMENTS: 1 . Letter from Harold Warren dated 7/22/98
2. Cost Estimate for Installation of lefthand turn
lane - Smith Engineering Consultants
3. Excerpt from Gary Lang Annexation
- Agreement
` 4. Summary of Property Valuations in Special
Service Area
The purpose of the Finance Committee Meeting on Tuesday is to discuss the financing
� of the Route 31/Shamrock Lane traffic signal. Gary Rozwadowski of Smith
Engineering will be in attendance to review the scope of the improvements and to
update the Committee on the status of the project. Likewise, Harold Warren of
Warren Associates will be available to answer questions specific to the project's
financing.
Over the past several months, the City Administrator has been working with Harold
Warren on a plan to finance the project. The specifics of the financing are detailed in
Harold's letter dated July 22, 1998 (attached). Depending on what amount the City
chooses to contribute to the project, the tax rate would be adjusted from
approximately .240 to .160 per $100 of assessed value. It should also be noted the
� property assessment within the Special Service Area boundary is approximately $16
million, using the 1996 assessments. It is anticipated the 1997 assessments will be
higher and consequently, will reduce the tax rate.
As the Committee will recall, the State of Illinois has committed 5150,000 to the
project. Also, at his suggestion, Gary Lang, through his Annexation Agreement, has
committed to install a left turn lane at the entrance to his business. The City Council,
in 1996, decided these monies would be better spent on a more comprehensive
improvement to Route 31 . In order to determine the appropriate contribution amount
to the project, Smith Engineering provided the City with a cost estimate for the
installation of a left turn lane. The estimate is enclosed for your review. The City also
� agreed to help share in the cost of this improvement. The manner by which the City's
contribution is calculated is explained in the Annexation Agreement (enclosed).
Finance Committee Meeting
August 1 1, 1998
Route 31/Shamrock Lane Traffic Signal
Page 2
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At a minimum, the following points should be discussed by the Committee:
1 . Public Benefit Amount - what amount of funds will the City contribute to the
project? To date, the City has committed 566,802.00 to engineering the
project.
2. Special Service Area - which properties should be included in the Special
Service Area?
Based on the tax rates estimated in Harold's letter, the following are examples of the
cost to the taxpayer based on assessed value.
Tax Rate: .240 (2.40 per S 1 ,000 of assessed value)
Assessed Value Taxpayer Cost
$ 25,000.00 S 60.00
S 50,000.00 5120.00 -� ���� ���2' � ��'
S 100,000,00 S 240.00
� Tax Rate: .200 ($2.00 per S 1,000 of assessed value) �j`�
Assessed Value Taxpaver Cost ��. �,� �
$ 25,000.00 S 50.00 �
S 50,000.00 S 100.00
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5100,000.00 5200.00 'l � ��`
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Tax Rate: .180 (51 .80 per S 1 ,000 of assessed value) � �
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Assessed Value Taxpaver Cost � ��t v�
$ 25,000.00 S 45.00
$ 50,000.00 $ 90.00 `��� �-/ c�`'� . {�
$100,000.00 S 180.00
Tax Rate: .160 ($1 .60 per S 1 ,000 of assessed value) �
$ 25,000.00 S 40.00 �,,� � ,-Z�
$ 50,000.00 $ 80.00 � ��� �'�'� . � .
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S 100,000.00 S 160.00 , i �"' ,�
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WARREN ASSOCIATES
� Munici al Finance Consultants � � n fN
650 Dundee Road•Suite 275 � " `-' ` IJ U �
Northbrook, Illinois 60062
847-291-9988 JUL 2 4 1998
CITY OF McHENRY
ADMINISiRATION
July 22, 1998
Mr. John A. Lobaito
Administrator, City of McHenry
3 3 3 S outh Green Street
McHenry, Illinois 60050
- Re: Shamrock Lane Traffic Signal
Dear John:
With reference to the financing of the Shamrock Lane - Route 31 traffic signal we have prepared
the following alternate bond payment schedules as suggested in order to indicate tax costs of the
� financing to property owners.
In these examples, the project cust is assumed to be in the amount of $550,000 and in these
examples payment by the City would be in the amount of $200,000, $25Q,000, $275,000 or
$300,000 which would then reduce financing to $350,000, $300,000 $275,000 and $250,000.
Comparison can be made �n equal terms in that the bond payment period e�ends through 2010,
or 12 annual tax levies, which we would think is a sufficient period of time for payment of the
traffic signal. Interest cost is estimated as a constant 5.00%.
As an alternative plan, instead of an initial payment by the City of a certain amount, you may
consider the idea of a tax abatement by the City of a certain amount each year for the public
benefit contribution and to reduce local tax cost. The tax abatement can come from a public
benefit tax or any other funds of the City available for that purpose.
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For example, a 50% tax abatement each year would require approximately $15,000 to $20,000
based upon the examples as shown or, in the alternative, the City may pay 25% or $150,000 up
front and abate the tax by the remaining 25% each year.
We would assume that a combination of an initial payment by the City plus tax abatement each
year would indicate to property owners that the City has extended its resources towards the
project. If you need additional examples along these lines, please let us know.
Very truly yours,
WARREN ASSOCIATES
By: _
Harol rren
�
� HW/if
( ( (
City of McHenry, Illinois
Special Service Area Number 1
Examples: Bond Maturity Schedules
- $350,000 300,000 $275,000 $250,000
Tax Tax T� Tax T� Tax Tax T�
Year Pn'ncipal Lev Rate Principal L� Rate Principal Le� Rate Pn'ncipal L� Rate
(12-1)
1998/99 $10,000 $30,000 .225 $10,000 $32,950 .202 $10,000 $30,375 .190 $ --- $18,950 .117
1999/00 20,000 36,500 .228 �0,000 34,000 .�13 15,000 27,875 .174 10,000 22,250 .139
2000/O1 25,000 40,375 .252 20,000 33,000 .206 20,000 38,000 .200 15,000 26,625 .166
2001/02 25,000 39,125 .245 20,000 38,000 .200 20,000 31,000 .194 20,000 30,750 .192
2002/03 25,000 37,875 .237 20,000 31,000 .194 20,000 30,000 .188 20,000 29,950 .186
2003/04 30,000 41,500 .259 25,000 34,875 .218 20,000 29,000 .181 20,000 28,750 .180
2004/OS 30,000 40,000 .250 25,000 33,625 .210 25,000 32,875 .205 25,000 32,650 .204
2005/06 35,000 43,375 .271 25,000 32,375 .202 25,000 31,625 .198 25,000 31,375 .196
2006/07 35,000 41,625 .260 30,000 35,450 .285 25,000 30,375 .190 25,000 30,125 .188
2007/08 35,000 39,871 .244 30,000 34,100 .213 30,000 34,000 .213 30,000 33,750 .211
2008/09 40,000 43,000 .269 35,000 37,825 .237 30,000 32,500 .203 30,000 32,250 .202
2009/10 40,000 41,000 .256 40,000 41,000 .256 35,000 35,875 .224 30,000 30,750 .192
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City of McHenry, Illinois � '
Special Service Area Number 1
Estimated Taxpayer Cost
350 000 $300,000 275 000 250 000
Irish Prairie $ 19,762 $ 16,468 $ I4,321 $ 13,175
NIMC 6,409 5,341 4,807 4,272
Gary Lang Auto 2,918 2,432 2,183 1,945
Tamar Royal Inn 2,560 2,135 1,920 1,707
616 S. Route 31 1,621 1,351 1,216 1,081
First National Bank of McHenry 1,169 975 877 780
1202 S. Route 31 990 825 742 660
Other EAV Total 2,085 1,738 1,564 1,390
Increase in EAV 882 735 662 588
Total $ 38,396 $ 32,000 $ 28,797 $ 25,598
Notes: l. Estimates of t�rates are based upon 1996 EAV of each property owner and a projected total EAV of$16,000,000, a
although assessed valuation should increase each year thus reducing the tax rate to a lesser rate than projected.
2. Calculation of the dollar amount to the property owners for each bond issue amount is based upon the following averages:
$ 350,000 bonds, average tax rate of.240
300,000 bonds, average tax rate of.200
275,000 bonds, average tax rate of.180
250,000 bonds, average tax rate of.160
. 3. It is assumed that NIlVIC value as shown is taxable property. Also, question remains as to Gary Lang Auto participation.
Client: City of McHenry Smith Engineering Consultants,Inc.
Job Name: IL Rte.31 Improvements at Gary Lang 4500 Prime Parkway,Suite 201
By: James R.Rakow McHenry,Illinois 60050
1ob No.: MCHE-980336-7 815-385-1778
�Date: August 4, 1998
OPINION OF PROBABLE COST
Item Totai Unit Total
No. Item Unit Quanti Cost Cost
1. Earth Excavation Cu Yd 1,425 $12.00 $17,100.00
2. Subbase Granular Material, T e B-4" S Yd 1,730 4.00 6,920.00
3. Bituminous Base Course-9" S Yd 1,150 15.00 17,250.00
4. 1-3/4" Bituminous Concrete Surface Course,
Mixture E, Class I, Type 2 and 3/4" Leveling
Binder Course, Mixture C, T e 2 Ton 812 32.00 25,984.00
5. Bituminous Shoulder,T e B-4" S Yd 160 8.00 1,280.00
6. A re ate Shoulder, T e B-4" Ton 127 16.00 2,032.00
7. Millin Existin Pavement- 1" S Yd 3,540 1.50 5,310.00
8. Landsca in S Yd 950 3.50 3,325.00
9. Erosion Control L Sum 1 2,000.00 2,000.00
10. Traffic Control L Sum 1 6,000.00 6 000.00
11. Pavement Markin L Sum 1 15,000.00 15,000.00
Su b-Tota Is $102,201.00
Contin enc A roximatel 7.6% $7,799.00
TOTAL $110,000.00
*This Opinion of Probable Cost was figured without a right turn lane.
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JRR/PL
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.� th , , this
promotional activity shall only be allowe - he first
calendar year in June follow' � �ance of the City�s occupancy
permit on the �rcel. Thereafter, the location of the Beach
Party Sa nd related items, on the east side of the Lang Parcel
bui ng, shall be approved by the McHenry Corporate Authorities.
8. Lang shall comply with the guidelines attached to the
O ginal Agreem , -- by �
this Second Amendment.
9. As part of the Lang Parcel development, subject to
approval by IDOT, Lang shail cause to be installed, on or befoxe
August 17, 1996, in the northbound lane of Route 31, a left-hand
turn �lane. The cost associated with this improvement shall be
shared between Lang and the City as follows: Lang shall be �
. responsible for payment of all costs of construction subject to
reimbursement by the City of 50� of said costs, resulting from
grants or the increased amount of sales tax received by the City,
� as calculated below, not to �exceed $50,000 in any event. To the
extent allowed by law, the City sYiare shall only be paid from
grants received from the State of Illinois or federal government.
In the event such grants are not available, to the extent allowed �
by law, the City share shall be limited to and paid from the
increase��in sales taxes received by the City, from the Lang Parcel
development, within 48 months following issuance of the Lang Parcel
� occupancy permit. The increase in sales tax shall be determined,
, by representation from the certified public accountant used by Gary
Lang and his automobile dealerships, by comparing the sales tax
received by the City from the date said occupancy permit is issued
with the sales tax received by the City from the Gary Lang
automobile dealership over the 12 consecutive months prior to the
date on which said occupancy permit was issued.
erm't from
IDOT allowing direct access f .. „ „ .__ is Route
31 on o ore February 17, 1996, this Second Amendment shall be
� dee d null and void.
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91� - � 7 - � '� q4
� Shamrock Lane Traffic Signal - Special Service Area
Total Assessed Value
Total Area (Approximate) 225 Acres
Total Parcels/Units: 263
Total 1996 Assessed Valuation: $ 15,632,134.00
Totat 1996 Tax Billed: $ 913,533.02
Summa of Lar est Assessments
1996 Assessed Valuation Percent of Total
Irish Prairie Condos 221 $ 5,946,577.00 38%
NIMC $ 2,670,594.00 17%
Irish Prairie A artments $ 2,287,704.00 15%
Ga Lan $ 1,215,844.00 8%
Tamara Ro ale Inn $ 1,066,801.00 7%
616 S. Rte. 31 $ 675,793.00 4%
First Natn'I Bank of McHen $ 487,385.00 3%
1202 S. Rte. 31 $ 412,454.00 3%
Total $ 14,763,152.00 94%
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" Please note that these totals are from the 1996 tax billing cycle.
Any increases in Assessed Valuation due to improvements or the new construction
along Shamrock Lane that occurred in 1997 is not reflected in these totals.
` Also note that the Hospital is tax exempt, as is not reflected in these totals.
However,the vacant property and other facilities owned by NIMC and surrounding
the Hospital are not tax exempt.
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