HomeMy WebLinkAboutPacket - 07/18/2016 - Finance and Personnel Committee01
Finance and Personnel Committee
McHenry Municipal Center
Council Chambers
333 S Green Street
McHenry, II. 60050
July 18, 2016, 5:30 PM
AGENDA
l . Call to Order
2. Public Comment: Any person wishing to address the Committee will be asked to
identify themselves for the record and will be asked but are not required to
provide their address. Public comment may be restricted to three -minutes for
each individual speaker. Order and decorum shall be maintained at public
meetings.
3. Motion to approve the March 23, 2016 and Apri14, 2016 Finance and Personnel
Committee Reports
4. Consideration regarding the sale of three -acres of city property located west of
Dot Street and south of Route 120, to McHenry Elementary School District 15,
and recommendation to forward a proposal to the full City Council for
consideration
5. Consideration of Updated Purchasing Policy and Procedures and
recommendation to forward the policy to the full City Couneil for consideration
6. Motion to adjourn the meeting.
The City of McHenry [s dedicnted to providing its citizens, businesses, and visitors with the /:ighest quality ojprogrants
and services in acustomer-oriented, efficient, and fiscally responsible manner.
FINANCE & PERSONNEL COMMITTEE
MEETING REPORT
March 23, 2016, 5:30 PM
McHenry Municipal Center
In Attendance. Committee Members: Chairman Alderman Wimmer, Alderman Curry and Alderman
Condon. Absent: None. Also in Attendance: City Administrator Morefield, Deputy City
Administrator Hobson; Finance Director Lynch; Chief of Police Jones; Public Works Director
Schmitt; Economic Development Director Martin; Community Development Director Polerecky, and
Deputy City Clerk Geraghty.
Seated in the Audience: Mayor Susan Low, Superintendent Wirch, Superintendent Schmidt, and
Superintendent Ruzicka.
1. Call to Order: Chairman Alderman Wimmer called the meeting to order at 5:30 PM.
2. Public Input: None
3. Motion to approve the January 11, 2016 Finance and Personnel meeting report.
Motion by Curry second by Wimmer to approve the January 11, 2016 Finance and Personnel
Committee meeting report.
Voting Aye: Curry, Wimmer.
Voting Nay: None
Absent: Condon
Motion carried.
4. Transmittal and Discussion of Draft Fiscal Year 2016/17 Budget
Chairman Wimmer asked City Administrator Morefield to begin the discussion. Administrator
Morefield reported the Draft FY 2016/17 budget is subject to further modification based on
input from the Committee and/or further needs identified as part of the ongoing review. Staff
has identified some corrections/clarifications that will be discussed during the fund reviews;
new summary sheets will be provided where appropriate; and additional funding requests will
be identified.
Alderman Condon joined the meeting at 5:40 PM.
General Fund Revenues Highlights
The FY 2016/17 proposed budget identifies Revenues of $20,377,013; an increase of 5.1%from
last fiscal year:
• State Sales Tax and Use Tax receipts comprise 33.4% of revenues and are proposed to
be $6,808,038; an increase of 3.7% from current fiscal year.
• Home Rule Sales Tax receipts comprise 9.1% of revenues and are proposed to be
$1,858,118; a decrease of 1.8% from current fiscal year.
• Income Tax Receipts comprise 13.5% of revenues and are proposed to be $2,753,184;
an increase of 12.4% from current fiscal year.
• $16100 IGA reimbursement from MTFPD for Fire Dispatchers.
• $141,100 in Drug Asset Forfeitures.
• $95,000 increase in Video Gaming.
• The remaining $84,932 in revenues is attributed to miscellaneous adjustments/revenues.
Alderman Curry referred to the projected revenues and asked if revenues were flat the last
two years. He further stated for the last five or six years we had a $1.5M flow into the
unassigned fund, which means our revenues have been over expenditures by quite a bit.
Administrator Morefield answered over the last two years income tax receipts whether Home
Rule Tax, State Sales Tax, and video gaming, is where a majority of the $1.5M has come
from. He added that prior to the 2007/08 economic downturn the Home Rule Sales Tax did
not exist. Revenues for the most part especially in sales tax, were not achieving what was
budgeted and we were drawing down the fund balance. In FY 2009/10 we lost a major
retailer in the community and the Council at that time chose to implement the Home Rule
Sales Tax and we are always uncertain how much that tax will generate or when the economy
will recover. Staff budgets conservatively for fear of what happened leading up to the
economic downturn and the fact that those revenue sources identified are based purely on the
economy. He added Video Gaming is a relatively new source.
Alderman Curry stated our worst case in that time period referenced shows a drop of about
7% to 8%. The projection we received at the last Council meeting indicated we are close to
setting a record on excess funds at $1.93M that will flow to the unassigned fund balance by
the end of April. Finance Director Lynch added we have three -months of expenses that have
not hit and we have a large amount of revenues the city receives at the beginning of the year
and we are already at 100%, so at the end of the fiscal year the excess will not be $1.93M.
Alderman Curry inquired about the projections provided in the documentation. Finance
Director Lynch stated those are not projections but the actual fund balance; if we were to add
all the revenues we receive for the first three quarters and take out the expenses for the first
three quarters that is what the fund balance would be at that point. Right now we are at
$1.93M however adjustments previously mentioned have not been made.
Administrator Morefield added there is still the potential for the State to reduce the Local
Government Distribution Fund. If the state reduces the LGDF as previously proposed by
50%; revenues would be reduced by as much as $1.3M. Even if the reduction is 10%, it will
impact the city's revenues.
General Fund Expenditures
General Fund Expenditures -less capital improvements and equipment —just operating costs
is proposed at $20,107,062; an increase of 7.7% from the current fiscal year. General Fund
Operating budgets are comprised of Administration, Elected Officials, Community
Development, Finance, Police Commission, Police, Police Dispatch, Public Works
Administration, Public Works Streets Division, and Parks and Recreation.
Administrator Morefield provided the Committee with an overview of proposed expenses for
each department and division.
2
Alderman Curry stated that in some of the detail sheets, salaries are shown for the current
budget and the proposed budget and then there are some increases in double digits and asked
if that was correct. Administrator Morefield said he would review the numbers. Alderman
Wimmer stated the Committee will mark this topic as something staff will look into and
report back with an answer.
Alderman Curry said that he went through all of the departments for salaries and it seems like
many of the higher level personnel have higher percent increases with the exception of the
ones just mentioned, versus some of the lower level and asked if this was cause for concern.
Administrator Morefield explained with the new merit system this should actually be the
opposite because due to identified low, medium, and high evaluation tiers the opportunity for
increases for the lower salaried employees in terms of percentages are higher than those at
the top. Alderman Curry asked if the salaries are set for the next fiscal year and
Administrator Morefield answered performance evaluations are currently underway and due
in April.
Administration Bud eg t Highlights
• $28,985 increase in Personnel due to merit and/or contractual salary adjustments;
Health/Dental/Vision/Life Insurance; FICA Medicare; and IMRF Retirement
• $12,250 increase in contractual services with $7,000 added for mosquito spraying
during major events
• $4,050 decrease in supplies
• $16,479 decrease in "other," primarily due to a decrease in Risk Management Costs
Elected Officials Bud eg t Highli hg_ts
• $58,858 decrease in Personnel due to transfer of costs for Administrative Assistant to
the Community Development Department budget.
• $1,125 decrease in contractual primarily due to transfer of training costs ($1,075) to
Administration (added Deputy Clerk responsibilities) and Community Development.
• $800 decrease in supplies primarily due to the electronic distribution of information
to City Council and staff,
• $10,569 decrease in "other," specifically related to purchase of services/Information
Technology,
Community Development Bud eg t Highlights
• $1945401 increase in Personnel due to hiring of department director; transfer of
Administrative Assistant costs; one-half the cost for shared Office Assistant position
with Finance Department; adjustments to Health/Dental/Vision/Life Insurance, FICA
Medicare, and IMRF Retirement; and reintroduction of Uniform Allowance for the
purpose of reimbursing inspectors for safety boots for field inspections.
• $19,200 increase in contractual services including an increase of $17,500 for mowing
contracting services mostly recaptured through liens, etc; and $3,000 for the purchase
of new building code books. Director Polerecky reported currently in this fiscal year,
the city invoiced $31,231 for mowing services of which $20,853 was recovered,
leaving approximately $10,000 uncollected of which $3,500 was wrote -off mostly
due to agreed settlements.
• $6,400 increase in supplies due to the acquisition of a color scanner (misidentified in
the budget as Mobile Table Printers in account 6110).
• $14,090 increase in "other" related to cost for the purchase of services/Information
Technology and capital lease payments for the department copy machine.
Finance Department Bud eg t Hig1.1 hg_ts
• $28,520 increase in Personnel due to cost -sharing of one-half Office Assistant
position with Community Development; costs related to merit -based wage increases;
Health/Dental/Vision/Life Insurance, FICA Medicare, and IMRF Retirement
• $8,575 increase in contractual primarily due to increases for printing and mailing of
utility bills
• "Other" less capital improvement and capital equipment transfers include a $140,000
increase in development expenses related to existing sales tax abatement agreements.
Alderman Santi entered the meeting at 6:20 PM.
Police Department Budget Highlights
• Net decreases in personnel, contractual, supplies and other primarily due to the
transfer of dispatch related costs to the newly created police dispatch fund
Chairman Alderman Wimmer asked if there was any new business to discuss and there was none.
Adjournment:
Motion by Condon to second by Curry to adjourn the meeting at 7:07 PM.
Voting Aye:
Voting Nay:
Absent:None
Motion carried.
Condon, Curry, Wimmer.
None
Reviewed and Approved:
Alderman R. Wimmer, Chairman
Date:
2016
C�
FINANCE &PERSONNEL COMMITTEE
MEETING REPORT
April 4, 2016, 5:30 PM
McHenry Municipal Center
In Attendance: Committee Members: Chairman Alderman Wimmer, Alderman Curry and Alderman
Condon via teleconference. Absent: None. Also in Attendance: City Administrator Morefield, Deputy
City Administrator Hobson; Finance Director Lynch; and Deputy City Clerk Geraghty.
1. Call to Order: Chairman Alderman Wimmer called the meeting to order at 5:30 PM.
Chairman Wimmer reported Alderman Condon was attending the meeting via audio conferencing for
medical reasons and pursuant to the Open Meetings Act; he called for a motion to authorize this
action.
Alderman Curry made a motion, seconded by Alderman Wimmer to participate in the April 4, 2016
Finance and Personnel Committee meeting via audio conference.
Voting Aye: Curry, Wimmer
Voting Nay: None
Absent:None
Motion carried.
2. Public Input: None
3. Motion to improve the March 23, 2016 Finance and Personnel meeting_report.
This item was postponed to the next Finance and Personnel Committee meeting as the minutes were
not provided in the meeting packet.
4.
of a
forward the document to the full City Council for adoption at the April 25t'' Annual City Council
meeting.
Chairman Wimmer asked City Administrator Morefield to begin the discussion.
Administrator Morefield reported the agenda supplement provided to the Committee summarizes the
comments, revisions, additions and/or clarifications as identified at the March 23rd meeting as follows:
Revisions/Additions
Administration
Line item 5110 Contractual Services was increased by $3,000 to provide funding for a municipal
internship opportunity.
Line item 5440 Training was increased by $3,000 to provide funding to send a candidate to Leadership
Greater McHenry County.
Finance
Line item 9942 Transfer to Capital Improvements Fund was increased by $87,866 to recalculating the
amount needed to cover new capital items.
1
Line item 5110 Contractual Services was increased by $50,000 for the completion of the Lakeland
Park Drainage Ditch Study.
In summary, these additions result in an increase of $143,866 in budgeted expenditures from what was
presented in the previous draft.
Clarifications
Director Morefield addressed inquiries made by Alderman Curry at the March 23rd Committee
meeting regarding certain salary increases:
Fund 100.01 Administration: The Executive Assistant increase is the result of a promotion to include
responsibilities as Deputy City Clerk.
Fund 100.01 Administration: The Building Custodian salary incorrectly identified in the detail sheet
2015/16 column has been corrected.
Fund 100.03 CED: The Administrative Assistant increase is due to the transfer of a full position from
Fund 100.02 Elected Officials to 100.03. The Office Assistant now reflects a 0.4 position, which is
shared with Finance 100.04.
Fund 100.04 Finance: The increase in the Office Assistant reflects the addition of a 0.4 position, which
is shared with CED 100.03.
Fund 100,41 Parks &Recreation: The Parks Maintenance increase reflects the switch of an employee
who was at step 4 of the IOUE 150 contract for an employee that is at step 10 of the IOUE 150
contract; a 27% difference in wages when comparing these two positions.
A discussion ensued on what is reflected on 4010 pages for non -bargaining employees versus the
amounts shown on 4090 sheets that reflect proposed increases that will go into effect FY 2016/17.
Alderman Wimmer called for questions/comments from the Committee:
Alderman Condon had none.
Alderman Curry questioned the amount budgeted for salary adjustments. City Administrator
Morefield provided a brief history on the introduction of the city's merit -based compensation system
approved by the City Council for non -bargaining employees. He reported the CPI-U is .7% and the
average increase budgeted for non -bargaining employees is 2.5%; some may be higher; some may be
lower using the merit -based system. Alderman Curry opined the Council should be approving the
overall amount not individual salaries within a budget. Alderman Curry said he is use to a corporate
approach in determining salaries.
A discussion on revenues and how they are determined each year was discussed. Alderman Curry is
concerned that staff intentionally underestimates projected revenues.
Alderman Condon stated it is not always best to use a corporate mentally with a government entity as
they are not transferrable. In a corporate environment if a catastrophe occurs and money is not
available, a corporation folds and that is on the owners yet the Council has a responsibility to continue
to provide services to our residents. We should not diminish the fact that we are being conservative
and will always be able to provide for our community.
Finance Director Lynch explained to the Committee the amounts estimated for income and use taxes
are provided by the State. For FY 2016/17, the State's estimate was $2.00/per capita under actual
receipts. Director Lynch further explained video gaming just began and it was not know the city was
going to receive over $250,000 in gaming revenue; drug asset forfeiture revenues are also
unpredictable.
Alderman Curry said the city has to do the best job they can in predicting revenues and that does not
appear to be what is done, adding the state income is not going to be flat as shown in the budget.
Director Lynch said the information comes directly from the State Municipal League who provides the
city with the estimates for next year. Alderman Curry said he disagrees with the State's estimates.
Further discussion ensued on Alderman Curry's questions and staff s explanations on the reasons for
various expenditures and how the budgeted amounts are depicted on the detail sheets throughout
several accounts.
With no further questions from the Committee, Chairman Alderman Wimmer called for a motion on
agenda item #4.
Alderman Condon made a motion, seconded by Alderman Wimmer to forward the proposed Fiscal Year
2016/17 Budget to the full City Council for adoption at the Apri125th Annual City Council meeting.
Voting Aye:
Voting Nay:
Absent:
Motion carried.
5. Adjournment:
Condon, Wimmer.
Curry
None
Motion by Curry, seconded by Condon to adjourn the meeting at 6:50 PM.
Voting Aye: Condon, Curry, Wimmer.
Voting Nay: None
Absent:None
Motion carried.
Reviewed and Approved:
Alderman R. Wimmer, Chairman
Date:
2016
3
Department of Community &
Economic Development
McHenry Municipal Center
333 Green Street
McHenry, Illinois 60050
Phone: (815) 363-2170
Fax: (815) 363-2173
www.ci.mchenry.il.us
FINANCE AND PERSONNEL COMMITTEE
AGENDA SUPPLEMENT
TO: Chairman Wimmer
Finance and Personnel Committee Members
FROM: Douglas Martin, Director of Economic Development
FOR: July 18, 2016 Finance and Personnel Committee Meeting
RE: Consideration of Sale of Three -Acre City Property West of Dot Street and South
of Illinois Route 120 to Facilitate Redevelopment of Site at the Northeast
Corner of Ringwood Road and Illinois Route 120
ATT:
1. Location Map
2. Plat of Easement to Access City Three -Acre City Property
3. Proposed Site Plan overlayed on Aerial Photograph at northeast corner of Ringwood
Road and Illinois Route 120
4. Proposed Site Plan at northeast corner of Ringwood Road and Illinois Route 120
5. Conceptual Site Renderings for redevelopment of site at northeast corner of Ringwood
Road and Illinois Route 120
6. Property Appraisal of Three -Acre City site off of Dot Street completed in March 2016 by
Harrison and Associates
7. Property Appraisal of McHenry Elementary District 15-owned property at Northeast
corner of Ringwood Road and Illinois Route 120 completed in March 2016 by Harrison
and Associates
AGENDA ITEM SUMMARY:
The Finance and Personnel Committee is being asked to consider a recommendation to the City
Council to sell a three -acre City owned property, acquired as part of an annexation agreement
with Meyer Material over a decade ago to facilitate the redevelopment of the property at the
northeast corner of Ringwood Road and Illinois Route 120.
BACKGROUND:
The City acquired athree-acre site (see attached map) as part of an annexation agreement with
Meyer Material more than a decade ago. The site is unimproved, located west of Dot Street,
fib
Department of Community &
Economic Development
McHenry Municipal Center
333 Green Street
McHenry, Illinois 60050
Phone: (815) 363-2170
Fax: (815) 363-2173
www.ci.mchenry.il.us
accessed by an easement recorded in 2011 (see attached Plat of Easement). The site was
intended to be utilized by the City for salt storage however since that time the City has not
pursued use of the property and has not identified it for any other use.
The property located at the northeast corner of Ringwood Road and Route 120 was formerly a
fuel service station however has been vacant for numerous years. Its ownership remains under
the umbrella of Graham Enterprises, which also owns and/or operates several fueling stations
including three in the City of McHenry: recently rebranded Mobil (formerly Citgo at the
northeast corner of Ramble Road and Elm; station located at the southwest corner of Crystal
Lake Road and Bull Valley Road and the station located on the east side of Illinois Route 31-a
few hundred feet north of the intersection at Route 31 and Charles Miller/Bull Valley Road.
ANALYSIS:
To facilitate the redevelopment of the site at Ringwood and Route 120 staff contacted District
15 who owns property adjacent to Graham's site to the east and north. In order for Graham to
construct the new BP Prototype (conceptual rendering and site plans attached) an additional
2.76 acres of property is required. Director Martin and John Graham attended a District 15
Finance Committee meeting earlier this year and had a conceptual discussion to determine if
District 15 would be amenable to selling additional property to Graham Enterprises. As part of
that discussion District 15 stated their need for land to accommodate additional bus parking
and/or a new track at Parkland School. Director Martin indicated the City owned a three -acre
site a few hundred feet to the south and west of where school buses currently park on Dot
Street. District 15 an interest in continuing the discussion about this property.
Following the meeting Director Martin ordered appraisals completed by Frank Harrison, a MAI
Certified Appraiser of the school property and city property. Both appraisals were funded by
Graham Enterprises. Subsequently, John Graham had a conceptual site plan and building
renderings completed to determine the additional land area required. Initially, the appraisal on
the school site was based on approximately 76,000 square feet or 1.74 acres or land -primarily
to the east of the corner and placed a value of $4.75/square400t or $363,000 for the 1.74 acre
parcel.
The City property was appraised at $1.74/square foot or a total of $75,000 for the three -acre
site. After completing the site plan it was determined Graham Enterprises would need 2.76
acres or 120,226 square feet, leaving the school with approximately 1.90 acres directly south of
the access drive to Parkland School off of Ringwood Road. Director Martin met with District 15
Superintendent Hoffman and Finance Director Mark Bertolozzi and discussed the conversation
Department of Community &
Economic Development
McHenry Municipal Center
333 Green Street
McHenry, Illinois 60050
Phone: (815) 363-2170
Fax: (815) 363-2173
www.ci.mchenry.il.us
with John Graham and all parties agreed to the following in concept subject to approval by the
City Council, School District 15 Board and Graham Enterprises:
• School would purchase three -acre City -owned property for appraised value
($75,000/$1.74/square400t) subject to sale of school property to Graham Enterprises;
• Graham enterprises would purchase 2.76 acre -school property- including detention area
for appraised value; ($4.75/square400t) or $571,072;
• Proposal would be presented to City of McHenry Finance and Personnel Committee on
July 18;
• Proposal would be presented to District 15 Finance Committee on July 19;
• Site would be developed in substantial conformance with site plan and renderings
attached however limited engineering and architectural work has been completed but
prototype and site plan are consistent with similar sites developed with this prototype;
• All entitlements pertaining to site zoning and land development would be subject to
approval by City and Illinois Department of Transportation and other approvals
required -such as State Fire Marshall, etc.
• Site would be redeveloped within next two years (anticipating market conditions, etc.)
remained favorable.
RECOMMENDATION:
If the Finance and Personnel Committee concurs in concept with terms outlined it is
recommended that staff be directed to work with District 15 and Graham Enterprises to
formulate a written proposal/agreement, along with their respective attorneys and bring
forth the proposal to the City Council following consideration and review by District 15
Finance Committee if District 15 and Graham Enterprises agree in concept to the
aforementioned terms outlined.
3
C7iCit
Department of Community &
Economic Development
McHenry Municipal Center
333 Green Street
McHenry, Illinois 60050
Phone: (815) 363-2170
Fax: (815) 363-2173
www.ci.mchenry.il.us
Three -Acre City Site off of Dot Street (Easement to Site)
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Department of Community &
Economic Development
McHenry Municipal Center
333 Green Street
McHenry, Illinois 60050
Phone: (815) 363-2170
Fax: (815) 363-2173
www.ci.mchenry.il.us
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Department of Community &
Economic Development
McHenry Municipal Center
333 Green Street
McHenry, Illinois 60050
Phone: (815) 363-2170
Fax: (815) 363-2173
www.ci.mchenry.il.us
Proposed Site Plan for Redevelopment of Ringwood Road and Illinois Route 120
L
Department of Community &
Economic Development
McHenry Municipal Center
333 Green Street
McHenry, Illinois 60050
Phone: (815) 363111,2170
Fax: (815)363-2173
www.ci.mchemy.il.us
Proposed Site Plan for Redevelopment of Ringwood Road and Illinois Route 120
20NING INFORMATION
.n
7
Department of Community &
Economic Development
McHenry Municipal Center
333 Green Street
McHenry, Illinois 60050
Phone: (815) 363-2170
Fax: (815) 363-2173
www.cl.mehenry.il.us
Proposed Rendering of BP Prototype at Ringwood Road and Illinois Route 120
Associates, Inc.
Frank E. Harrison, MAI
State Certified -General -Illinois
March 18, 2016
Mr. Douglas P. Martin
Director of Economic Development
City of McHenry
333 S. Green Street
McHenry, IL 60050
Dear Mr. Martin:
Land Use & Valuation Consultants
Post Office Box 684
1601 North Route 47
Woodstock, Illinois 60098.0684
Telephone: (815) 338.3004
Cell Phone: (815) 382-2877
Fax: (815) 338.3387
email: appraise@mc.net
In Re: Our File No. 11147-01
Dot Street Property
As requested, I have inspected the 3-acre vacant indushial development site located at the west
terminus of an access easement to Dot Street, west of Dot Street and south of Illinois Route 120,
in McHenry, Illinois. The purpose of my inspection was to develop a market value opinion of
the fee simple interest of that property as of March 1, 2016, the date of inspection of the subject
property.
Identification and Ownership Information
The subject property is owned by the City of McHenry, which purchased it from Chicago Title
Land Trust Company, Trust #53278, in 2011, using Trustee's Deed #2011R0025229. To my
knowledge, there have been no transactions involving the subject property within the past three
years. I am not aware of any offers to purchase the subject property, nor is the subject property
currently listed for sale.
The subject property is legally described as follows:
That part of the Northwest Quarter of Section 28, Township 45 North, Range 8
East of the Third Principal Meridian, described as follows: Cornmencing at the
intersection of Route 120 and Martin Road, at the Northwest corner of said
Section 28; thence South 01 degrees 06 minutes 32 seconds West, a distance of
1,839.87 feet to a point that is 796.92 feet North of the Southwest corner of said
Northwest Quarter; thence along a line that is parallel with the Southerly line of
said Northwest Quarter (per Deed Document No. 2003R0082781), North 89
Mr. Douglas P. Martin, File No. 11147-01, Dot Street Property, March 18, 2016, Page 2
degrees 23 minutes 28 seconds East, a distance of 456.94 feet for a point of
beginning, said point being on a line that is 188.71 feet Westerly from and parallel
with the West line of a parcel, as surveyed (said West line is described in Deed
Document 2000R0049019 as being 300.78 feet Westerly of, as measured at right
angles, the West line of Lot 10 in Sherman Hills Industrial Subdivision); thence
North 00 degrees 45 minutes 29 seconds West along said parallel line, a distance
of 695.09 feet to Westerly extension of the Northerly line of a parcel of land to the
East of the subject property (described in said Deed Document No.
2000R0049019); thence South 89 degrees 02 minutes 24 seconds East along said
Westerly extension, a distance of 188.79 feet to the aforesaid West line of a
parcel, as surveyed (said West line is Westerly of, as measured at right angles, the
West line of Lot 10 in Sherman Hills Industrial Subdivision); thence South 00
degrees 45 minutes 29 seconds East along said West line of a parcel, as surveyed a
distance of 689.92 feet to the aforesaid line that is 796.92 feet North of and
parallel with the Southerly line of said Northwest Quarter (per Deed Document
No. 2003R0082781); thence along said parallel line, South 89 degrees 23 minutes
28 seconds West, a distance of 188.71 feet to the point of beginning, all in
McI-Iemy County, Illinois.
The legal description above was taken fi•om Trustee's Deed #201 I R0025229, by which title to
the subject property was obtained by the City of McHenry in 2011. 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 subject property.
The access easement to the subject property fiom Dot Street is legally described as follows:
That part of the Northwest Quarter of Section 28, Township 45 North, Range 8
East of the Third Principal Meridian, described as follows: Beginning at the
Northwest corner of a parcel of land described per Document No. 2000R0049019;
thence North 89 degrees 02 minutes 24 seconds West along the Westerly
extension of the Northerly line of said described parcel, a distance of 188.79 feet;
thence North 00 degrees 45 minutes 29 seconds West, a distance of 30.01 feet to a
line 30.00 feet Northerly of and parallel with a Northerly line of said described
parcel; thence South 89 degrees 02 minutes 24 seconds East along said parallel
line, a distance of 595.22 feet to a line parallel with a Northerly line of said
described parcel; thence South 85 degrees 34 minutes 01 seconds East along said
parallel line, a distance of 209.38 feet; thence South 77 degrees 27 minutes 30
seconds East, an approximate distance of 144.8 feet to the Westerly right-of-way
line of Dot Street; thence South 43 degrees 08 minutes 07 seconds West along
said Westerly right-of-way line, a distance of 7.76 feet to the Northeast corner of a
parcel of land described per Document No. 2000R0066753; thence South 03
degrees 16 minutes 53 seconds East along said Westerly right-of-way line, a
distance of 24.24 feet; thence North 77 degrees 27 minutes 30 seconds West, an
approximate distance of 145.3 feet to the Northeasterly corner of said parcel
described per Document No. 2000R0049019; thence North 85 degrees 34 minutes
O1 seconds West along a Northerly line of said described parcel, a distance of
ARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-01, Dot Street Property, March 18, 2016, Page 3
206.34 feet; thence North 89 degrees 02 minutes 24 seconds West along a
Northerly line of said described parcel, a distance of 404.62 feet to the point of
beginning, all in McHenry County, Illinois.
The above legal description of the access easement to the subject property from Dot Street was
taken from a Plat of Easement prepared by Smith Engineering Consultants, Inc., revised May 30,
2006, identified as Job No. MEYE-060128-4, and recorded as Document No. 2011R0025230.
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 access
easement.
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 or 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 as absohrte ownership, unencumbered by
any other interest or estate, subject only to the governmental powers of eminent domain, escheat,
police power, and taxation.
Scope of Work and Intended Use of the Appraisal
This assignment included an 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, accumulation of market data to allow development of the sales
comparison approach, development of the sales comparison approach and reconciliation of its
findings into a market value opinion for the subject property, and preparation of this appraisal
report.
The subject property is vacant land. Accordingly, the only meaningful approach to value is the
sales comparison approach, which has been developed in its traditional mariner. The only
limitations to development of the sales comparison approach are limitations in available market
data. The extent of the data collection process used in this assignment will be addressed
subsequently in this appraisal report.
There are no hypothetical conditions or extraordinary assumptions associated with this
assignment. There is no personal property, business enterprise value, or going concern value
associated with this assignment.
HARRISON � Associates, Inc.
.Douglas P. Martin, File No. 11147-01, Dot Street Property, March 18, 2016, Page 4
It is my understanding that the intended use of this appraisal is by my client in this matter, the
City of McHenry, in negotiating a property exchange with School District 15, relative to land
owned by School District 15. The appraisal and appraisal report were ordered by Douglas P.
Martin, the Director of Economic Development for the City of McHenry, on behalf of the City of
McHenry. To the best of my knowledge, the appraisal and appraisal report conform to the
valuation and report writing standards of the Uniform Standards of Professional Appraisal
Practice (USPAP). This letter is intended to be a restricted appraisal report, presented in a
narrative format. The use of this restricted appraisal report is limited to the City of McHenry for
their use in negotiating the exchange of real estate between the City of McHenry and School
District 15,
Neighborhood Overview
The subject property is located on the floor of a former gravel pit, located on the south and
southwest sides of Illinois Route 120, just west of Ringwood Road. Parts of the neighborhood
are contained in several municipalities, including McHenry, McCullom Lake, Wonder Lake, and
Bull Valley; the balance of the neighborhood is located in unincorporated McHenry County. The
boundaries of the neighborhood are Illinois Route 120 on the north, Draper and Curran Roads on
the east, Bull Valley Road on the south, and Ridge Road on the west. The subject property is in
McHenry.
Most of the uses in the neighborhood are industrial, mining, or residential uses. The industrial
uses are concentrated in a small area that includes, and surrounds, the subject property. Although
located off of Illinois Route 120, this is a secondary or tertiary industrial location because it is on
the floor of a former gravel operation. At the present time, Dot Street and Hill Street, and the
easement between Dot Street and the subject property, are entrances into the sand and gravel
operation, which is ongoing further west of the industrial areas.
Meyer Material is the largest landowner in the area. Their mining operations extend almost
entirely along the north, the south, and the southwest sides of Illinois Route 120, between
Ringwood Road and Ridge Road. Their entire operation is contained within the City of
McHenry. The only exceptions to Meyer's use along Route 120 is the Valley View School, and
two small residential tracts.
Most of the rest of the uses in the neighborhood axe residential uses. Virtually all of the
residential uses are located in the south half of the neighborhood, south of the Meyer mining
operation. Some of these are low -density subdivisions in McHenry while others are low -density
subdivisions in unincorporated McHenry County. Still others are low -density single-family
residences constructed on small acreage, unsubdivided tracts, including properties north and west
of Draper Road. More intense, and more dense, single-family residential developments occur
along the east side of Curran Road in the southeast portion of the neighborhood. The most
significant of these developments is Shamrock Farms, which extends south to Bull Valley Road.
ARRISON � Associates, Inc.
Or. Douglas P. Martin, File No. 11147-01, Dot Street Property, March 18, 2016, Page 5
NEIGHBORHOOD SUMMARY, cont'd.
Large tracts of undeveloped land are currently being farmed, mostly with row crops. They are
being fanned because development has not yet re -commenced in the subject neighborhood, and
they will probably continue to be farmed for several more years. The primary motivations of
ongoing farming are the favorable treatment afforded farmland from a real estate tax point of
view and the recent high commodity prices.
The uses immediately surounding the subject property include the offices and service garage of
Meyer Material adjacent to the north, Miller Formless adjacent to the east, and components of the
gravel pit (both depleted and operational) adjacent to the south and west.
The primary trend in the neighborhood is continuation of existing uses for those properties that
are improved and developed to their highest and best use. This trend includes the residential
properties in the neighborhood as well as the industrial properties in the vicinity of the subject
property. Another evident trend in the neighborhood is the ongoing sand and gravel mining that
is taking place on the Meyer Material holdings. This operation will continue, primarily moving
from east to west, until the sand and gravel resources are depleted. I do not anticipate depletion
of the sand and gravel resources to occur within the foreseeable future. These trends should
continue into the foreseeable future. The mining trends will continue until depletion occurs; the
infill residential development should continue as long as there are available vacant sites; the _
development of new housing units in the existing subdivisions will probably continue for several
more years.
The utilities serving the district include natural gas, telephone, electricity, and cable television.
As a general rule, properties north and west of Draper Road, including properties in McHenry
and properties in unincorporated McHenry County, are not availed of city water and sewer, and
use private septic systems and private wells in conjunction with development. Zoning in the
neighborhood is consistent with use. A variety of zoning exists throughout the neighborhood.
Zoning in McHenry is controlled by McHenry; zoning in the unincorporated areas is controlled
by McHenry County. When properties are annexed into McHenry, zoning changes that
accompany the annexations are usually consistent with McHenry's comprehensive plan. No
significant zoning changes are anticipated to occur within the foreseeable future.
The competitive market consists of other industrial developments in McI-Iemy. These include
the industrial and business parks along Route 31 on the south side of McHenry and the industrial
park along Orleans Street north of Route 120. The comparable market for properties such as the
subject property includes not only industrial development sites and properties in and around
McHenry, but several other areas throughout the subject property's market area including other
communities in McHenry County, communities in central and western Lake County, and
communities in central and eastern Kane County, between Route 47 and the Fox River. These
were the areas investigated for comparable market data in the approaches to value.
HARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-01, Dot Street Property, March 18, 2016, Page 6
All things considered, the subject's district is an industrial neighborhood on the west side of
McHenry. Most types of property meet with continued acceptance in open market situations,
depending usually on pricing. Factors that affect demand for industrial sites in the neighborhood
include access, lack of water and sewer, and proximity to a major sand and gravel operation. The
neighborhood should retain its character in the foreseeable future.
Subject Property Data
Location West terminus easement to Dot Street
Frontage 188.79 feet on south side of easement right -of --way
Depth 689.92 feet (east line); 695.09 feet (west line)
Shape Rectangular
Area Content 13Q680 square feet (3 acres), more or less, according to Plat of Easement,
assumed to be correct; subject property portrayed on Land Plat and Plat. of
Easement exhibits at end of report
Topography Near level to sloping; non -wooded; high point along south property line;
low point in northeast corner of property; 30-foot elevation variation; well -
drained, with slope and drainage flow generally following natural contours
of the land
Access Asphalt- and gravel -surfaced ship of land extending from west line of Dot
Street across frontage on subject property to pit entrance; 30-foot strip of
land
Easements Access easement only easement of which I am aware; 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 encroachments noted during inspection, or shown on Plat of Easement;
for purposes of this assignment, I have assumed there are no
encroachments affecting subject property
Floodplain FEMA Community Panel #17111CO205J; effective 11/16/2006; Zone-X,
which is a low -risk flood zone that is not subject to flooding
Soils 100%weh-drained, upland soil types, mostly #865 (Pits; Gravel)
Wetlands By analysis of wetlands maps I have concluded that there are no NWI or
McHemy County ADID wetlands on the subject property
ARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-01, Dot Street Property, March 18, 2016, Page 7
Utilities Electricity, gas, and telephone; city water and city sewer not available, nor
anticipated to become available
Environmental
Factors Other than proximity to sand and gravel operation, there were no negative
environmental factors noted during inspection; no environmental studies
or assessments furnished for analysis; for purposes of this assignment, I
have assumed there are no negative environmental factors affecting subject
property
Zoning I-1 —Industrial —City of McHemy; zoning is appropriate for the subject
property and is consistent with surrounding zoning; there is no reasonable
probability of rezoning
Tax ID Number 09-28-151-026
2014 Taxes None; exempt
Assessed Valise No assessed value; property is exempt from taxation
Improvements None —vacant land
Highest and Best Use
The highest and best use of the subject property is ultimate low intensity industrial development,
when real estate market conditions have stabilized to the point where such development is
economically justifiable.
Market Data
There have been very few vacant indush'ial development sites anywhere in McHenry County that
have sold over the past several yearns. There has been even less new industrial development,
regardless of location. The most desirable industrial development sites are those in modem
industrial and business parks, those with water and sewer availability, those with good access and
exposure, and those with no physical limitations. The least desirable industrial development sites
are those which do not have one or more desirable characteristics.
There have only been 16 vacant industrial development site sales tluoughout all of McHem'y
County between 2013 and the date of value in this assignment. Seven occurred in 2013, six
occurred in 2014, and three occurred in 2015. Six of the sales were substantially larger than the
subject property and two were substantially smaller; I eliminated those sales from consideration
in this sales comparison approach. One sale that I eliminated was between related parties. Two
other sales were eliminated fiom consideration because of their remote, rural locations
(Richmond and Ringwood), one sale was eliminated from consideration because it consisted of
several non-contiguous lots, and one sale was eliminated from consideration because it was
purchased (reportedly at a premium) from an adjacent property owner. However I also included
ARRISON � Associates, Inc.
Or. Douglas P. Martin, File No. 11147-01, Dot Street Property, March 18, 2016, Page 8
a sale in McHenry that occurred in 2012 since its physical characteristics, particularly its access,
were so similar to those of the subject property.
The following sales represent those sales that I concluded were the most comparable to the
subject site. Each has some degree of comparability, albeit not a particularly high degree of
comparability, to the subject property. A summary of each sale is presented below and on the
following pages. Additional information on each sale is retained in my file. The sales are
presented chronologically, starting with the oldest. A Sale Map has been prepared as an exhibit
at the end of this appraisal report.
Sale #1
Location
North side Bull Valley Road, west of Illinois Route 31, McHemy, Illinois
Sale Date
May 2012
Sale Price
$1095000
Buyer/Seller
Dearborn Street Holdings, LLC — Series 5 Rockford to Brian Blanchard
Deed Data
Special Warranty Deed #2012R0025661 (McHemy County)
Site Size
5.22 acres, more or less (county records)
Zoning
I-1 —Industrial — McHenry
Water/Sewer
Not immediately available
Topography
Irregular
Access
20-foot strip of land from Bull Valley Road
Improvements :
Old pole barn that was non-contributory to value
Unit Price
$20,881 per acre
Comments
This sale was an REO transaction.
Adjustments
This sale required an upward adjustment because it was an REO
transaction.
Adjusted Price:
$22,969 per acre
Sale #2
Location East side Duncan Place, about 350 feet south of McConnell Road,
Woodstock, Illinois
Sale Date April 2013
Sale Price $115,000
Buyer/Seller Harvard State Bank, Trust #731 to Richard A. Lindner
Deed Data Trustee's Deed #2013R0021835 (McHenry County)
Site Size 2.60 acres, more or less (real estate transfer declaration and assessor
records)
Zoning M1 — Light Manufacturing District —Woodstock
Water/Sewer Available
Topography Near level
Access Direct street access on Duncan Place
Improvements : None — vacant land
Unit Price $44,231 per acre
ARRISON Associates, Inc.
Or. Douglas P. Martin, File No. 11147-01, Dot Street Property, March 18, 2016, Page 9
Adjustments This sale required downward adjustments for its location, its topography,
its access, and for the availability of water and sewer.
Adjusted Price: $26,539 per acre
Sale #3
Location
West side Trakk Lane, about 500 feet south of Rail Drive, Woodstock,
Illinois
Sale Date
June 2013
Sale Price
$25,000
Buyer/Seller
Talmer Bank and Trust to Multitech Metal Forming, LLC
Deed Data
Special Warranty Deed #2013R0031426 (McHenry County)
Site Size
1.01 acres, more or less (real estate transfer declaration)
Zoning
I -I —Light Industrial —McHenry County
Water/Sewer
Not available
Topography
Near level
Access
Direct street access on Trakk Lane
Improvements :
None — vacant land
Unit Price
$24,752 per acre
Comments
This sale was an REO transaction.
Adjustments
This sale required an upward adjustment because it was an REO
transaction; it required downward adjustments for its location, its
topography, and its access.
Adjusted Price:
$19,059 per acre
Sale #4
Location
West side Oak Drive, north of Orleans Street, McHenry, Illinois
Sale Date
December 2014
Sale Price
$82,500
Buyer/Seller
Graciela Dorado to Vestergaard Company, Inc.
Deed Data
Warranty Deed #2014R0042231 (McHenry County)
Site Size
1.882 acres, more or less (real estate transfer declaration)
Zoning
I-1 —Industrial — McHenry
Water/Sewer
Available
Topography
Sloping and mostly wooded
Access
Direct street access on Oak Drive
Improvements :
None — vacant land
Unit Price
$43,836 per acre
Comments
This sale was a short sale.
Adjustments
This sale required an upward adjustment because it was a short sale; it
required downward adjustments for its location, its topography, its access,
and for the availability of water and sewer.
Adjusted Price:
$31,343 per acre
HARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-01, Dot Street Property, March 18, 2016, Page 10
In analyzing these sales, I considered several elements of comparison, including sale conditions,
market conditions, location, topographical features, access, and utility availability. The sales
were reduced to an appropriate unit price for comparison to the subject property. The appropriate
unit of comparison is sale price per acre.
• Sale #2 involved the apparent arm length transfer of fee simple interest, and was not
adjusted for sale conditions. However, Sales 41 and #3 were REO transactions, and Sale
#4 was a short sale, all of which typically sell at a discount. I adjusted Sales 41, #3 and
#4 upward for sale conditions.
• All of the sales occurred under market conditions equivalent to those in effect on the date
of value for commercial development sites. All were annexed, with commercial zoning
in place at the time of sale, and with water and sewer available.
• The location of Sale #1 was similar to the location of the subject property, and was not
adjusted for that factor. Sales #2, #3 and 44 were all located in industrial parks, albeit
industrial parks in secondary locations. I adjusted Sales #2, #3 and #4 downward by 10%
for their superior locations.
• The topography of the subject property is quite irregular, and would require leveling prior
being able to be developed. The topography of Sale 41 was similar to the topography on
the subject property, and it was not adjusted for this factor. Sales 42 and 43 were near
level with no negative topographical features; I adjusted Sales #2 and #3 downward by
10% for this factor. Although Sale #4 was near level to sloping, it was wooded, and
would have had to be cleared prior to any development. I adjusted Sale 44 downward by
5% for its slightly superior topography.
The subject property has access by way of a 30-foot easement to Dot Street. Sale #I is
similar to the subject property in that it has access by way of a 20-foot strip of land to
Bull Valley Road. Sales 42, #3 and #4, however, were all superior to the subject property
because they had direct road frontage on a street. I adjusted Sales 42, 43 and #4
downward by 10% for this factor.
Water and sewer are not available to the subject property, or to Sales 41 and 43. These
utilities, however, are available to Sales #2 and #4, and I adjusted them downward by
10% for this factor.
Reconciliation and Conclusion —Subject Property
In developing my final opinion of market value of the subject property in this matter, I
considered all of the sales, the degree of comparability of each sale to the subject property, the
range of unit prices, and the current market conditions for industrial development sites in
southeast McHenry County. 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, as of March 1, 2016, measured in the
HARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-01, Dot Street Property, March 18, 2016, Page 11
amount of $25,000
per acre.
Based on the 3 acres
contained in the subject property, the resulting
value of the subject
property
at the reconciled unit
price is
$75,000,
Exposure Time
Exposure time is defined as the estimated length of time the property 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
property had been listed at a reasonable price, had been professionally marketed, and had been
given reasonable and sufficient exposure to the secondary industrial development site market in
McHenry, it would have been on the market for approximately a 24-month period of time in
order to have been sold at or near the appraised value.
Please let me know if I can be of any further assistance on this matter.
r truly yours
Frank E. Harrison,
#553,000005 (Illinois) Expires 9/30/17
FEH:kah
Attachments Land Plat
Plat of Easement
Sale Map
Limiting Conditions and Assumptions
Certification
HARRISON � Associates, Inc.
Or. Douglas P. Martin, File No. 11147-01, Dot Street Property, March 18, 2016, Page 12
LAND PLAT
HARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-01, Dot Street Property, March 18, 2016, Page 13
AT OF EASEMENT
PLAT OF
AREA:
B 3.00_ ACRES
�� lwuti M. i,CAW
u ty,raa o..
n e:e &f3 &AAM
EMENT
ACCESS EASEMENT
NILL STREET
m-
ARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-01, Dot Street Property, March 18, 2016, Page 14
HARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-01, Dot Street Property, March 18, 2016, Page 15
LIMITING CONDITIONS AND ASSUMPTIONS
his appraisal is expressly subject to the following:
I. Liability. Our liability is limited to the client only. There is no accountability, obligation, or liability to any third
party. If this 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. We 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. Our 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 our 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.
3. Report Distribution. No portion of this report (especially any conclusions of value, the identity of the appraisers or
the Harrison 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 our prior written consent and approval.
4. Confidentiality. All conclusions and opinions as set forth in the report were prepared by the appraisers whose
signatures appear on the appraisal report, unless otherwise indicated. We 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. We believe that information furnished by others is reliable, but we give no warranty for its
accuracy.
6. Testimony, Consulting, Completion of Contract for Appraisal Service. The contract for appraisal, consulting or
analytical service is fulfilled and the total fee is payable upon completion of the report, unless other arrangements have
been made. We will appear and/or give testimony in court in connecting with this appraisal on request if we receive
adequate advance notice in order to make required preparations and scheduling arrangements, We will specify and
make charges in connection with pretrial hearings, conferences, and court testimony in accordance with our 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. We 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 property.
8. Legal and Title Considerations. We assume no responsibility for the legal description provided or for matters
pertaining to legal and title considerations. We assume that title to the property is good and marketable unless
otherwise noted. We 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.
We appraised
the property free and
clear of any and all liens or encumbrances unless
otherwise stated.
10. Ownership and Management. We assume responsible ownership and competent management.
1 I. Hidden Conditions. We have inspected as far as possible, by observation, the improvements, However, it was not
possible to personally observe hidden structural components. We have not critically inspected mechanical components
within the improvements and no representations are made as to these matters unless specifically stated and considered
in the report. We assume that there are no hidden or unapparent conditions of the property, subsoil, or structures that
render it more or less valuable. We assume no responsibility for such conditions or for obtaining the engineering
studies that may be required to discover them.
HARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-01, Dot Street Property, March 18, 2016, Page 16
LIMITING CONDITIONS AND ASSUMPTIONS, cant it.
12.
Regulatory and Legal Compliance. We 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. We 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 land 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 of the
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.
15,
Inclusions. Furnishings, fixtures and equipment (FF&E) 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. 'file authentic copies of this report are signed in blue ink and have a seal affixed over the signature
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.
l8.
Insulation and Toxic Materials. In this appraisal assignment, unless otherwise stated in the report, we did not
observe any potentially hazardous material used in the construction or maintenance of the building and/or the presence
of toxic waste. We do not have any knowledge of the existence of such materials on or in the property. However, we
are not qualified to detect such substances. The existence of any potentially hazardous waste material may have an
effect on the value of the property. We 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. We 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.
20.
ADA. The Americans with Disabilities Act (ADA) became effective January 26, 1992. We have not made a specific
compliance survey and analysis of this property to determine 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
analyses 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 we have no
direct evidence relating to this issue, we did not consider possible non-compliance with the requirements of ADA in
estimating the value of the property.
HARRISON � Associates, Inc.
Or. Douglas P. Martin, File No. 11147-01, Dot Street Property, March 18, 2016, Page 17
CERTIFICATION
I certify that, to the best of my knowledge and belief:
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 no 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.
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 assignment was not contingent upon developing or reporting
predetermined results.
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. The reported analyses, opinions, and conclusions were developed, and this report has
been prepared, in conformity with the Code of Professional Ethics & Standards of
Professional Appraisal Practice of the Appraisal Institute.
9. The reported analyses, opinions, and conclusions were developed, and this report has
been prepared, in conformity with the Uniform Standards 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.
HARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-01, Dot Street Property, March 18, 2016, Page 18
CERTIFICATION, cont'd.
13. As of the date of this report, I have completed the continuing education program of the
Appraisal Institute.
1 I am currently a Certified General Real Estate Appraiser in the State of Illinois.
Frank E. Harrison, MAI
#553.000005 (Illinois) Expires 9/30/17
HARRISON � Associates, Inc.
Inc.
Frank E. Harrison, MAI
State Certified -General -Illinois
March 21, 2016
Mr. Douglas P. Martin
Director of Economic Development
City of McHenry
333 S. Green Street
McHenry, IL 60050
Dear Mr. Martin:
Land Use &Valuation Consultants
Post Office Box 684
1601 North Route 47
Woodstock, Illinois 6009&0684
Telephone: (815) 338.3004
Celt Phone: (815) 382.2877
Fax: (815) 338-3387
email: appraise@mc.net
In Re: Our File No. 11147-02
Route 120 Property
As requested, I have inspected the 1.7563-acre vacant commercial development site located on
the north side of Elm Street (Illinois Route 120), about 320 feet east of its junction with
Ringwood Road, in McHenry, Illinois. The purpose of my inspection was to develop a market
value opinion of the fee simple interest of that property as of March 1, 2016, the date of
inspection of the subject property.
Identification and Ownership Information
The subject property is owned by McHenry Community Consolidated School District 15, which
purchased it, with an adjacent land holding, in 2001 fiom Amoco Oil Company using Special
Warranty Deed #2001R0001714. To my knowledge, there have been no transactions involving
the subject property within the past three years. I am not aware of any offers to purchase the
subject property, nor is the subject property currently listed for sale.
No legal description of the subject property was provided. 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 subject property. However, I reserve
the right to re -analyze my findings and conclusions should I subsequently be provided with a
legal description and/or plat of survey that shows the subject property to be significantly different
than what I have appraised in this assignment.
Mr. Douglas P. Martin, File No. 11147-02, Route 120 Property, March 21, 2016, Page 2
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 or 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 as absolute ownership, unencumbered by
any other interest or estate, subject only to the governmental powers of eminent domain, escheat,
police power, and taxation.
Scope of Work and Intended Use of the Appraisal
This assignment included an 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, accumulation of market data to allow development of the sales
comparison approach, development of the sales comparison approach and reconciliation of its
findings into a market value opinion for the subject property, and preparation of this appraisal
report.
The subject property is vacant land. Accordingly, the only meaningful approach to value is the
sales comparison approach, which has been developed in its traditional manner. The only
limitations to development of the sales comparison approach are limitations in available market
data. The extent of the data collection process used in this assignment will be addressed
subsequently in this appraisal report.
There are no hypothetical conditions or extraordinary assumptions associated with this
assignment. There is no personal property, business enterprise value, or going concern value
associated with this assignment.
It is my understanding that the intended use of this appraisal is by my client in this matter, the
City of McHeiuy, in negotiating a property exchange with School District 15, the owners of the
subject property. The appraisal and appraisal report were ordered by Douglas P. Martin, the
Director of Economic Development for the City of McHenry, on behalf of the City of McHenry.
To the best of my knowledge, the appraisal and appraisal report conform to the valuation and
report writing standards of the Uniform Standards of Professional Appraisal Practice (USPAP).
This letter is intended to be a restricted appraisal report, presented in a narrative format. The use
of this restricted appraisal report is limited to the City of McHenry for their use in negotiating the
exchange of real estate between the City of McHenry and School District 15.
HARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-02, Route 120 Property, March 21, 2016, Page 3
Neighborhood Overview
The subject s neighborhood is a heterogeneous district in the west -central part of McHenry.
Although the east and central portions of the neighborhood are almost fully developed; there are
several undeveloped tracts of land in the west portion of the neighborhood.
Uses in the neighborhood include commercial, industrial, residential, and special purposes. The
commercial properties occur primarily in the Route 120 corridor. In the west part of the
neighborhood, most of the uses along Route 120 are office uses. Some were developed as offices
and others are former single-family residences that have been converted into offices. In the
central and east portions of the Route 120 corridor, the uses are more commercial, including gas
stations, banks, automobile -oriented uses, stores, and shops.
Industrial uses occur in the east and west portions of the neighborhood. In the east portion of the
neighborhood, they occur in the McHenry City Center Business Park. In the west portion of the
neighborhood, they include a self -storage project, the Meyer Material sand and gravel operation,
and several small industrial buildings in the depleted portion of the Meyer pit. Residential
properties are located north and south of the non-residential properties that front on Route 120.
Most of these are in the Lakeland Park and Lakeland Shores subdivisions, which are relatively
affordable, vintage subdivisions. These subdivisions are virtually 100% built -out and developed
with detached single-family residences. Special purpose properties in the neighborhood include
a railroad right-of-way, several parks owned by the City of McHenry, the Zion Lutheran school,
church, and pre-school, and the Parkland Junior High School.
Properties surrounding the subject property include an office and office condominium complex
adjacent to the east, undeveloped land that extends to the Parkland Junior High School adjacent
to the north, a former Amoco gas station that has been closed for many years adjacent to the
west, and undeveloped land across Route 120 to the south.
Zoning is controlled by the City of McHemy. Water and sewer are available to properties in
McHenry.
The primary tend evident in the neighborhood is continuation of current uses for those
properties that represent the highest and best use. A relatively minor trend is the occasional
rehabilitation of older properties. At times, such a property is acquired, improvements are
demolished, and the sites are redeveloped. Very little new development is occurring, primarily
because of the lack of available vacant sites that can be developed.
All things considered, the subject's neighborhood is a heterogeneous neighborhood in west -
central McHemy that consists of a variety of property types. The subject's neighborhood should
continue to maintain its character as it becomes more stable over time.
Subject Property Data
Location North side Elm Sheet (Illinois Route 120), about 320 feet east of
Ringwood Road
ARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-02, Route 120 Property, March 21, 2016, Page 4
Frontage 306.01 feet on north side of Elm Street
Depth About 250 feet uniform depth, north -to -south
Shape Parallelogram
Area Content 76,502.50 square feet (1.7563 acres), more or less, according to appraiser
calculations, assmned to be correct; subject property portrayed on Land
Plat exhibit at end of report
Topography Near level; at grade; mostly wooded; negligible elevation vatiation; drained, with with slope and drainage flow generally following natural contours
of the land
Access Four -lane with mountable median; state highway; runs in east/west
direction; 120-foot right-of-way; some concrete curbs and gutters; no
sidewalks or street lights; above -ground electric and telephone; 2013
IDOT traffic count — 19,400 vehicles per day
Easements Utility easements assumed to exist along Elm Street and on the subject
property, as appropriate; no title report provided for analysis; for purposes
of this assignment, I have assumed that there are no negative easements
affecting the subject property
Encroachments No encroachments noted during inspection; no plat of survey fiirnished for
analysis; for purposes of this assignment, I have assumed there are no
encroachments affecting subject property
Floodplain FEMA Community Panel #17111CO206J; effective 11/16/2006; Zone-X,
which is a low -risk flood Zone that is not subject to flooding
Soils About 25%wet-drained, upland soil types, including #148B (Proctor Silt
Loam) and #327B (Fox Silt Loam); 75%balance poorly -drained, lowland
soil types, mostly 4153A (Pella Silty Clay Loam)
Wetlands By analysis of wetlands maps I have concluded that there are no NWI or
McHenry County ADID wetlands on the subject property
Utilities
Electricity, gas, telephone, city water, and city sewer
Environmental
Factors No negative environmental factors noted during inspection; no
environmental studies or assessments furnished for analysis; for purposes
of this assignment, I have assumed there are no negative environmental
factors affecting subject property
ARRISON � Associates, Inc.
Or. Douglas P. Martin, File No. 11147-02, Route 120 Property, March 21, 2016, Page 5
Zoning C-2 — Neighborhood Commercial — City of McHenry; zoning is
appropriate for the subject property and is consistent with surrounding
zoning; there is no reasonable probability of rezoning
Tax ID Number Part of 09-28-251-016
2014 Taxes one; exempt
Assessed value No assessed value; property is exempt from taxation
Improvements None —vacant land
Highest and Best Use
The highest and best use of the subject property is ultimate commercial development, when real
estate market conditions have stabilized to the point where such development is economically
j ustifiable.
Market Data
There have been very few vacant commercial development sites in the size range of the subject
property that have sold over the past several years. Most of those that I encountered were either
significantly larger or smaller than the subject property, were shopping center outlots, were
assemblages for drug stores, or were located at major highway intersections controlled by traffic
lights. None of these sales were comparable to the subject site.
I extended the search back between 2013 and the date of value in this assignment. Any sales that
occurred prior to 2013 were, in my opinion, not comparable because they occurred under
significantly different market conditions. I was not able to identify any comparable sales in
McHenry. Consequently, it was necessary to expand the search to ultimately include all of the
communities in McHenry County. I concluded that the communities in northeast McHenry
County (including Richmond and Spring Grove), north -central McHenry County (Hebron),
northwest McHenry County (Harvard), and southwest McHenry County (Marengo) were too
remote to be considered comparable to the subject property, and had locations that were not
comparable to the subject property. Finally, I also excluded from consideration sales that were
not annexed into a community at the time of sale, sales that were not zoned commercially at the
time of sale, and sales where water and sewer were not available for development.
The following sales represent those sales that I concluded were the most comparable to the
subject site. Each has some degree of comparability to the subject property. A summary of each
sale is presented on the following pages. Additional information on each sale is retained in my
file. The sales are presented chronologically, starting with the oldest. A Sale Map has been
prepared as an exhibit at the end of this appraisal report.
HARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-02, Route 120 Property, March 21, 2016, Page 6
Sale #1
Location
South side Alexandra Boulevard, about 360 feet west of Carlemont Drive,
Crystal Lake, Illinois
Legal
Lot 1, Kuper's Business Park Second Resubdivision
Sale Date
September 2013
Sale Price
$500,000
Buyer/Seller
PB and J XXXII, LLC to Sand Hupreet Property, LLC
Deed Data
Special Warranty Deed #2013R0044639 (McHenry County)
Site Size
102,485 square feet, more or less (assessor records)
Zoning
B2/PUD — General Commercial/Planned Unit Development — Crystal
Lake
Water/Sewer
Available
Unit Price
$4.88 per square foot
Comments
This sale was an REO transaction. The 2013 IDOT traffic count along
Alexandra Boulevard was 2,650 vehicles per day. After the sale, this
property was developed with a Kids `R' Kids day care center.
Adjustments
This sale required upward adjustments because it was an REO transaction
and for its inferior location.
Adjusted Price:
$5.91 per square foot
Sale #2
Location North of Algonquin Road and east of Randall Road, Lake in the Hills,
Illinois
Legal Lot 2, Restart Lake in the Hills Subdivision
Sale Date February 2015
Sale Price $383,234
Buyer/Seller Restart Lake in the Hills, LLC to Children's Medical Properties, LLC
Deed Data Special Warranty Deed #2015R0005096 (McHenry County)
Site Size 98,228 square feet, more or less (subdivision plan)
Zoning B-3-C — Business — General — Conditional Use — Lake in the Hills
Water/Sewer Available
Unit Price $3.90 per square foot
Comments The 2013 IDOT traffic counts were 26,300 vehicles per day along
Algonquin Road and 40,800 vehicles per day along Randall Road.
However, the subject property did not front on, or have access to, either of
these streets.
Adjustments This sale required an upward adjustment for its inferior location.
Adjusted Price: $4.29 per square foot
Sale #3
Location Southeast corner Illinois Route 47 and Rainsford Drive, Huntley, Illinois
Legal Lot 6, Rosati's Subdivision
Sale Date June 2015
HARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-02, Route 120 Property, March 21, 2016, Page 7
Sale Price $411,173
Buyer/Seller First Merit Bank to Huntley Real Estate, LLC
Deed Data Quit Claim Deed 42015R0024353 (McHenry County)
Site Size 80,000 square feet, more or less (assessor records)
Zoning 133 — Shopping Center District — Huntley
Water/Sewer Available
Unit Price $5.14 per square foot
Comments This sale was an REO transaction. The 2013 IDOT traffic count along
Route 47 was 18,400 vehicles per day. Reportedly, this property was
purchased to be developed with a Dunkin' Donuts restaurant.
Adjustments This sale required an upward adjustment because it was an REO
transaction; it required a downward adjustment for its corner
configuration.
Adjusted Price: $5.09 per square foot
Sale #4
Location
Southwest side State Road (Illinois Route 176), and southeast side
Newport Court, Island Lake, Illinois
Legal
Lot 2, Fox River Shores Commercial Unit 4
Sale Date
September 2015
Sale Price
$2205000
Buyer/Seller
Gateway Community Bank to Lake Immediate Care & Clinic, SC
Deed Data
Special Warranty Deed #2015R0036904 (McHenry County)
Site Size
92,725.69 square feet, more or less (appraisal)
Zoning
B-1/SU — General Business/Special Use — Island Lake
Water/Sewer
Available
Unit Price
$2.37 per square foot
Comments
This sale was an REO transaction. The 2013 IDOT traffic count along
State Road was 20,600 vehicles per day. Although the site fronted on
Route 176, it did not have access to Route 176. Rather, access was over
an easement off of Newport Court. Reportedly, this property was acquired
to be developed with a medical office building.
Adjustments
This sale required upward adjustments because it was an REO transaction
and for its inferior access.
Adjusted Price:
$3.26 per square foot
Sale #5
Location West side Vine Street, across fiom Joan Road, Huntley, Illinois
Legal Lots 8 and 9, A.W. Garlieb's Subdivision
Sale Date October 2015
Sale Price $1955000
Buyer/Seller Sandra L. Wright and John M. and Jacqueline A. Gent to Visionary
Properties IL, LLC
Deed Data Warranty Deeds #2015R0040196 and #2015R0040197 (McHenry County)
HARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-02, Route 120 Property, March 21, 2016, Page 8
Site Size 42,560 square feet, more or less (appraiser calculations)
Zoning B-3 — Shopping Center Business District — Huntley
Water/Sewer Available
Unit Price $4.58 per square foot
Comments There was no traffic count on Vine Street, which is located just west of
Illinois Route 47. The 2013 IDOT traffic count along Route 47 was
18.400 vehicles per day.
Adjustments This sale required an upward adjustment for its inferior location.
Adjusted Price: $5.04 per square foot
In analyzing these sales, I considered several elements of comparison, including sale conditions,
market conditions, location, access, and corner configuration. The sales were reduced to an
appropriate unit price for comparison to the subject property. The appropriate unit of comparison
is sale price per square foot of land area.
• Sales #2 and #5 involved the apparent arm's length transfer of fee simple interest, and
were not adjusted for sale conditions. However, Sales #1, #3 and #4 were all RI O
transactions, which typically sell at a discount. I adjusted Sales 41, 43 and 44 upward for
sale conditions.
• All of the sales occurred
under market conditions
equivalent to
those in effect on
the date
of value for commercial
development sites. All were annexed,
with commercial
zoning
in place at the time of sale, and with water and sewer available.
• Sales #1, #2, and #5 were all adjusted upward by 10%for their inferior locations. These
adjustments reflected either a lower traffic count or a location removed from major
highway frontage.
• Sale #4 was adjusted upward by 25%for its inferior access. Despite fronting on Route
176, access to this site was somewhat awkward, necessitating a rum onto a side sheet and
another turn onto an access easement.
• Sale #3 was adjusted downward for its mid -block corner configuration. All of the other
sales, like the subject property, had interior configurations.
Reconciliation and Conclusion — Subt Property
In developing my final opinion of market value of the subject property in this matter, I
considered all of the sales, the degree of comparability of each sale to the subject property, the
range of unit prices, and the current market conditions for commercial development sites in
southeast McHenry County. 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, as of March 1, 2016, measured in the
amount of $4.75 per square foot. Based on the 76,502.50 square feet contained in the subject
property, the resulting value of the subject property at the reconciled unit price is $363.387. This
amount is expressed in round numbers as $363,000.
ARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No, 11147-02, Route 120 Property, March 21, 2016, Page 9
Exposure Time
Exposure time is defined as the estimated length of time the property 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
property had been listed at a reasonable price, had been professionally marketed, and had been
given reasonable and sufficient exposure to the highway commercial market in McHemy, it
would have been on the market for approximately a 12-month period of time in order to have
been sold at or near the appraised value.
Please let me know if I can be of any further assistance on this matter.
Ve ruly yours,
Frank . Ha rison, MA
#553,000005 (Illinois) Expires 9/30/17
FEH:kah
Attachments Land Plat
Sale Map
Limiting Conditions and Assumptions
Certification
HARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-02, Route 120 Property, March 21, 2016, Page 10
LAND PLAT
HARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-02, Route 120 Property, March 21, 2016, Page 11
HARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-02, Route 120 Property, March 21, 2016, Page 12
LIMITING CONDITIONS AND ASSUMPTIONS
s appraisal is expressly subject to the following:
Liability. Our liability is Limited to the client only. There is no accountability, obligation, or liability to any third
party. If this report is placed in the hands of anyone other than client, the client shall make that parry aware of all
limiting conditions and assumptions of the assignment. We 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. Our liability
extends only to the stated client, and not to subsequent parties or users of the report.
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 our written authorization invalidates the entire appraisal. This appraisal report must be considered and
used only as a unit. No pail 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.
3. Report Distribution. No portion of this report (especially any conclusions of value, the identity of the appraisers or
the Harrison 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 our prior written consent and approval.
4. Confidentiality. All conclusions and opinions as set forth in the report were prepared by the appraisers whose
signatures appear on the appraisal report, unless otherwise indicated. We 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. We believe that information furnished by others is reliable, but we give no warranty for its
accuracy.
6. Testimony, Consulting, Completion of Contract for Appraisal Service. The contract for appraisal, consulting or
analytical service is fulfilled and the total fee is payable upon completion of the report, unless other arrangements have
been made. We will appear and/or give testimony in court in connecting with this appraisal on request if we receive
adequate advance notice in order to make required preparations and scheduling arrangements. We will specify and
make charges in connection with pretrial hearings, conferences, and court testimony in accordance with our usual
practice. If testimony or deposition is required because of any subpoena, the client shall He responsible for any
additional time, fees, and charges regardless of issuing party.
7. Exhibits. We 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 property.
8. Legal and Title Considerations. We assume no responsibility for the legal description provided or for matters
pertaining to legal and title considerations. We assume that title to the property is good and marketable unless
otherwise noted. We 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.
We appraised the
property
free and clear of any and all liens or encumbrances unless
otherwise stated.
I0, Ownership and Management. We assume responsible ownership and competent management.
I L Bidden Conditions. We have inspected as far as possible, by observation, the improvements. However, it was not
possible to personally observe hidden structural components. We have not critically inspected mechanical components
within the improvements and no representations are made as to these matters unless specifically stated and considered
in the report. We assume that there are no hidden or unapparem conditions of the property, subsoil, or structures that
render it more or less valuable. We assume no responsibility for such conditions or for obtaining the engineering
studies that may be required to discover them.
HARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-02, Route 120 Property, March 21, 2016, Page 13
LIMITING CONDITIONS AND ASSUMPTIONS, cont'd.
12.
Regulatory and Legal Compliance. We 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. We 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 land 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 of the
estimate of value. All dollar amounts are based on the purchasing power and price of the U. S. dollar as of the dale of
the value estimate.
15.
Inclusions. Furnishings, fixtures and equipment (FF&E) 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
l7,
Authentic Copies. The authentic copies of this report are signed in blue ink and have a seal affixed over thesignature
on the left side of the letter of transmittal, and on the tell side of the certification page. Any copy that does not have the
above is unauthorized and may have been altered.
l8.
Insulation and Toxic Materials. In this appraisal assignment, unless otherwise stated in the report, we did not
observe any potentially hazardous material used in the construction or maintenance of the building and/or the presence
of toxic waste. We do not have any knowledge of the existence of such materials on or in the property. However, we
are not qualified to detect such substances. The existence of any potentially hazardous waste material may have an
effect on the value of the property. We 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. We 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.
20.
ADA. The Americans with Disabilities Act (ADA) became effective January 26, 1992. We have not made a specific
compliance survey and analysis of this property to determine 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
analyses 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 we have no
direct evidence relating to this issue, we did not consider possible non-compliance with the requirements of ADA in
estimating the value of the property.
HARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-02, Route 120 Property, March 21, 2016, Page 14
CERTIFICATION
I certify that, to the best of my knowledge and belief.
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:
I have no 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.
5. I have no bias with respect to the property that is the subject of this report or to the parties
involved with this assignment.
My engagement in this assignment was not contingent upon developing or reporting
predetermined results.
My compensation fox 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.
The reported analyses, opinions, and conclusions were developed, and this report has
been prepared, in conformity with the Code of Professional Ethics & Standards of
Professional Appraisal Practice of the Appraisal Institute.
9. The reported analyses, opinions, and conclusions were developed, and this report has
been prepared, in conformity with the Uniform Standards of Professional Appr°aisal
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.
HARRISON � Associates, Inc.
Mr. Douglas P. Martin, File No. 11147-02, Route 120 Property, March 21, 2016, Page 15
CERTIFICATION, cont'd.
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.
4g"W7*0et
Frank E. Harrison, MAI
653.000005 (Illinois) Expires 9/30/17
HARRISON � Associates, Inc.
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
FINANCE AND PERSONNEL COMMITTEE
AGENDA SUPPLEMENT
DATE: July 18, 2016
T0: Chairman Wimmer
Finance &Personnel Committee
FROM: Derik Morefield, City Administrator
Carolyn Lynch, Finance Director
RE: Consideration of and updated Purchasing Policy and Procedures
ATT: Existing Purchasing Policy and Procedures Manual —Effective Date 12/14/88
Proposed Purchasing Policy and Procedures
Agenda Item Summary:
The purpose of this agenda item is to receive input and recommendation from the Finance and
Personnel Committee regarding the establishment of an updated Purchasing Policy and
Procedures to replace the existing policy, now nearly twenty-eight (28) years old.
Background/Analysis:
The existing City of McHenry Purchasing Policy and Procedures Manual, upon Council approval,
became effective December 14, 1988 and, needless to say, is in need of updating to meet the
current needs of the municipality.
The proposed new policy and procedures include the following:
• An update of authorized position titles based on the current organizational structure;
• Increased procurement authority for all levels for budgeted items;
• Updated definition as to when approvals are required for specific dollar amounts;
• Clarity as to when unbudgeted expenditure requests must be brought before Council;
and
• Clarity as to what level of expenditures require written quotations and/or are subject to
a competitive bidding process.
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 informational item for the Committee, within the last year, as part of the implementation
of the new Tyler finance/utility billing software, the City Administration has been able to
implement a procurement/purchasing program that provides for the ability to electronically
authorize purchases, based on identified approval tiers. This system has been in place for
approximately six (6) months for purchases made by the Department of Public Works. The
implementation of this new Purchasing Policy and Procedures will be incorporated in to that
new system as an additional check and balance for purchasing authority.
RECOMMENDATION:
Upon consideration by the Finance and Personnel Committee, staff is requesting a motion to
recommend the attached Purchasing Policy and Procedures for approval to the City Council.
�1 ty or mcrienry
Purchasing Policy and Procedures Manual
Title:
es, ttegu i a�� ons ana ttni cs
Policy Nc.: P-001
SubM.Itted By:
Approved Sy: City Coun.
affective Date: Supersedes No.. MAT•'age Ho.. 1 of
1. Purchase for the City of McHenry in accordance with the City
Purchasing Policy, City Ordinances and the Statutes cif the State
of *linois.
2. Procure itans that will represent the maximum econan'ical benefit
for each dollar spent.
3. Procure ca�modities and services of high quality anti continued
availability.
4. Obtain competitive bids or quotations on all purchases whenever
possible.
5. Obtain better knowledge of methods and of commodities, required to
operate cost effectively.
b. Encourage local partic,i}�ation in the procure,-nent pros:ess.
7. `Consider cooperative purchasing with other local goverrnlents and
participation in the State of .Illinois Joint Purchasing program
whenever possible.
8. A71 personnel involved :n the purchasing process stiauld conduct
themselves with fairness and impartiality, and demand the same of
all vendors.
9. All negotiations and discussions involving purci�asing should also
be conducted in compliance with the Code of Ethics and Rules of
Conduct defined in.the Personnel Policy Manual,
10. Pranot.e the professionalism of purchasing and be committed to .the
efficiencies of centralised purchasing.
t
i�lf�(�GQI�
ok
r
City ot McHenry Policy No.: P-002
*Purchasing Policy and Procedures Manual Adm. F/P
Submitted By:
Title: pprovaRequirements & Delegatio'ns of Auth. Approved By: City Coun
Effective Date: 12-14481 Supersedes No.: NA Page.No.. of
1. The purpose of this procedure is to outline tn,% required approvals
for all -purchase commitments and transactions, ,:ind secondly to define
City personnel by classification who are authorized to initiate
purchases at various monetary levels for materials, equipment,
supplies and services.
2. A71 designated personnel shall obtain the req;pprovals) prior
to final commitment: If on? or more person's approval is required
who is not available, the approval must be obtained from the next
highest authority of approval level.
3. Prior to approval for payment by the City Cour:ci7, Department Heads
must approve all purchase invoices for those transactions and
cammitments of authorized supervisors and empl %;% ees.
- 4._ The table shown -below es�ablishes the requires 'evels of approval
based on the dollar amou;:t of the purchase.
AUTHORIZED DEPART. ADMINIS. ?V:AYOR & MAYOR
AMOUNT EMPS. & SUPYRS. HEADS F/P 11DM. F/P & CC
$106 o r less �—
$100-$500 X X X X
$500-$21500 X X X
$21500-$53000 X X
$5,000 or more X
5. The table shown below lies those position classifications authorized
to initiate purchases in relationship to the prescribed dollar
amounts. Those position classifications not shown below are strictly
prohibited from purchasil:g unless otherwise authorized by the
Administrator of Finance and. Personnel.
DOLLAR AMOUNTS
A. $ or more
F0999
POSITIONS
i��ayor an City Council
in accordance with Purchasing
Policy No. P-004
Mayor and Administrator of
Finance and Personnel
Administrator of Finance
and Personnel
Chief of Police
City Clerk - Collector
Director of Development
Director of Parks
and Recreation
i� 1r,Supt, of Public forks
i
F °
a z
� y o cHenry � Pol•icy No.: P-002
' Purchasing Policy and Procedures Manual Submitted By: Adm. F/P
Title, pprova Requirements & Delegation of Auth. Approved By: City Cou
Effective Date:�12-14-88 °,uPersedes �o.: rage ho.: of � �
DOLLAR AMOUNTS POSITI�tdS
E. $100 or less
Authorized Supervisors
Authorized tfipl oyees
F0999
Street ,�u-pe-rvi s r �f=� '
L�'ater �u.pervi sor 4Y�y��•
Wastewater Treatment Plant Su�.
Parks htaintenance Supervisor
Recreation Program Supervisor
Building & Zoning Enforce. Off..
Police Lieutenant
Detective Sergeant
Ca�mand Sergeant
Canmunications Supervisor
�-s-�i-s-i a-ni=-4s�a-i-er--S ap�ervi-sor—
A_ssistant 4�astewater Trea ent
Plant Super-ui sor--S�� � .
Wastewater Plant Maintenance
Mechanic ���4�,�,•,��.
Craw --lead` r (Street D� vi si on )
Mechanic (Street Division)
Senior Records Clerk (Police)
Adminis. Assist. (Parks Dept)
Adminis. Assist.(Clerk's Off)
Shop Tool Manager
Principal Account Clerk
Secretary (Public Works)
Parks hfai ntenance Empl ogee
Et � �,r !'
l
' 1
City of McTFenry Policy No.: P-003
*Purchasing Policy and Procedures Manual Adm. F/P
Submitted By:
Title: Budgeted ens --Quotat ions Approved By: City Coun
Effective Date: 12.1 g Supersedes NO.: HA Page -No.: 1 of l
F0999
i. Departm ent Beads prepare specifications, obtain product
literature, investigate alternatives and solicit quotations for
item(s) req;j�,:sted for purchase". Pertinent i nformati on forwarded
to Finance and Personnel Department for compliance with purchasing
policy and budget availability.
2. Finance and Personnel Department reviews. information and
Administrator of Finance Grid Personnel approves purchase request
(Go -to Step 3). Only if purchase request is not approved by
Administrator of Finance and Personnel, upon request of the
Department Head, matter is referred by Finance and Personnel
Department to Mayor for reconsideration. If approved by Mayor,
.Department Hootad proceeds to Step 3 and 4.
3. If approved, Department Head is authorized to purchase upon
written d i ray ti on from Admi ni strator of FTnarice ana—Per�orinel
t_all�
4. Department HE.ad s - follow regular purchasing procedures upon receipt•
of written authorization. .11
L
City of McHenry Policy No.: P-004
• 'Purchasing Policy and Procedures Manual— Adm. F/P
Submitted By:
Title: Budgeted Ite-ns Over '5,000-Competitive Bid_ Approved By: City Cou
Effective Date: 19_14Supersedes No.: NA I rage No.:l of 1
_R
1. Department Heads prepare bid specifications.
2. City ;ouncil reviews Department Head request to Sol:c:it bids. If
approved, City Council authorizes F-i-na-nee—a-nd—Rer-a- nel"
Administrator to proceed with bid procedures. If City Council
requires additional information, matter is referred to Purchasing
Cwmittee.
3. Finance and Personnel Department prepares invitation to bid
notice, advertisement notice, bid sheet, and any other necessary
bid documentation.
4. Finance and Personnel Department advertises for bids, receives
sealed bids and conducts formal bid opening.
5% Department Heads and. na-nn'� d—Pees-omel Administraitor evaluate
bid proposals and prepare written reccmmendation to 4:ity Council.
6. City Council awards or rejects bids within 30.days of bid opening.
T. Staff follows regular purchasing ; � g p g procedures when awarded.
8. In the case of rejection of all bids,' these procedures are
repeated.
F0999
CITY Or MCHENRY
PURCHASING POLICY AND PROCEDURES
General Rules, RerMulations and Ethics
• Purchasing activities for the City of McHenry shall be in accordance with this Purchasing
Policy, City Ordinances and applicable Statutes of the State of Illinois.
• Items procured will represent the maximum economical benefit for each dollar spent.
• Procurement shall be made of commodities and services of high quality and continued
availability.
• Whenever possible, purchases shall be based on obtaining cost comparisons quotations
or competitive bids.
• Purchases shall be based on obtaining better knowledge of methods and of
commodities required to operate cost effectively.
• Local participation will be encouraged in the procurement process.
• Consideration should be given to participate in cooperative purchasing efforts with
other local government entities and in the State of Illinois Joint Purchasing Program
whenever possible.
• All personnel involved in the purchasing process shall conduct themselves with fairness
and impartiality, and demand the same of all vendors.
• Negotiations and discussions involving purchasing shall be conducted in compliance
with the Code of Ethics and Rules of Conduct in the City's Personnel Handbook.
• The purchasing process will promote professionalism and be committed to the
efficiencies of centralized purchasing.
Approval Requirements & Delegations of Authority
• The purpose of this procedure is to outline the required approvals for all purchase
commitments and transactions, and secondly, to define City personnel by classification
who are authorized to initiate purchases at various monetary levels for materials,
equipment, supplies and services.
• All designated personnel shall obtain the required approvals) prior to final
commitment. If one or more person's approval is required who is not available, the
approval must be obtained from the next highest level of authority of approval level.
• Prior to approval for payment by the City Council, Department Directors and the City
Administrator must approve all purchase invoices for those transactions and
commitments of authorized supervisors and employees.
• The following table establishes the required levels of approval based on the dollar
amount of the purchase:
City
Authorized Employees
Administrator
Mayor or
Amount
&
Department
or Finance
City
Mayor and
Supervisors/Managers
Directors
Director
Administrator
City Council
$750 or less
X
X
X
$751 to
$3,500
X
X
$3,501 to
$6,500
X
$6,501 to
$10,000
X
More than
$10,000
X
• The following table lists those position classifications authorized to initiate purchases in
relationship to the prescribed dollar amounts (from above). Those position
classifications not shown below are strictly prohibited from purchasing unless otherwise
authorized by the City Administrator or Finance Director.
Dollar Amounts
Authorized Positions)
More than $10,000
Mayor and City Council in accordance with
"Budgeted Items — Cost Comparisons,
Quotations and Competitive Bidding" section
of this policy*
$6,501- $10,000
Budgeted Items with the authorization of the
Mayor or City Administrator in accordance
with "Budgeted Items — Cost Comparisons,
Quotations and Competitive Bidding" section
of this policy*
$3,501- $6,500
Budgeted Items with authorization of the
Finance Director or City Administrator in
accordance with "Budgeted Items — Cost
Comparisons, Quotations and Competitive
Bidding" section of this policy*
$751- $3,500
Budgeted Items with authorization of the
Department Director in accordance with
"Budgeted Items — Cost Comparisons,
Quotations and Competitive Bidding" section
of this policy*
$750 or less
Budgeted Items by Employees authorized by
their immediate Superintendent, Manager,
or Department Director in accordance with
"Budgeted Items — Cost Comparisons,
Quotations and Competitive Bidding" section
of this policy*
*For items not identified as "Budgeted Items", budget amendment requests will be brought
before the City Council for consideration/approval for items over $6,500 unless the action is
considered emergency in nature. Should this be the case, Council will be notified of the
purchase/acquisition and the item will be presented for approval at the next regular
meeting of the City Council.
• Definitions of authorized positions:
Authorized Dollar
Amount Authorized Positions)
$750 or less Authorized Employees: (must have prior approval of their
immediate Supervisor, Manager, or Department Director)
• Executive Assistant/Deputy City Clerk
• Administrative Assistants (all departments)
• Public Works Maintenance Worker
• Public Works Operator
• Public Works Mechanic
• Parks & Recreation Maintenance Worker
• Public Works Project Engineer
• Community Development Plumbing Inspector
• Community Development Code Enforcement Officer
• Community Development Permit Technician
Supervisors/Managers:
•
Public Works Water Division Superintendent
•
Public Works Wastewater Division Superintendent
•
Public Works Street Division Superintendent
•
Public Works Wastewater Division Assistant
Superintendent
•
Public Works Utility Division Superintendent
•
Public Works Forestry Division Superintendent
•
Community Development Superintendent
of
Residential Inspections
•
Community Development Superintendent
of
Commercial Inspections
•
Parks & Recreation Parks Division Superintendent
•
Parks & Recreation Parks Division Assistant
Superintendent
•
Parks & Recreation Recreation Center Manager
•
Parks & Recreation
•
Parks & Recreation
•
Police Deputy Chief
•
Police Commander of Operations
•
Police Commander of Support Services
•
Police Sergeants
•
Police Dispatch Supervisor
$751- $3,500
Department Directors:
•
Deputy City Administrator/Director of Parks
&
Recreation
•
Director of Economic Development
•
Director of Community Development
•
Director of Finance
•
Director of Public Works
•
Chief of Police
$3,501- $6,500
City Administrator or Finance Director
$6,501- $10,000
Mayor or City Administrator
More than $10,000
May and
City Council
Budgeted Items — Cost Comparison, Quotations and Competitive Bidding
• For budgeted items under $6,500 authorized positions shall obtain, where possible,
three (3) cost comparisons prior to the purchase of goods and/or services.
• For budgeted items between $6,501 and $10,000 authorized positions shall obtain,
where possible, three (3) cost comparisons or three (3) written quotations prior to the
purchase of goods and/or services.
• For budgeted items over $10,000, but less than $20,000, staff shall obtain, where
possible, three (3) written quotations for the purchase of goods and/or services for
consideration and approval by the City Council.
• For budgeted items over $20,000, the purchase of goods and/or services shall follow a
formal competitive bidding process whereby staff develops bid specifications, Council
approves a request to advertise for bids, bids are received and evaluated, and a
recommendation is forwarded to the City Council for award/approval.