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HomeMy WebLinkAboutMinutes - 06/04/1990 - City CouncilSPECIAL MEETING MONDAY, JUNE 4, 1990 8:00 P.M. A Special Meeting of the McHenry City Council was called to order by Mayor Busse on Monday, June 4, 1990 at 8 P.M. at City Hall. The purpose of the meeting was to discuss the proposed Annexation Agreement of Biscayn- Highlands. At roll call the following Aldermen were present: Bolger, Donahue, Lieder, Smith, McClatchey, Serritella. Teta arrived at 8:07 P.M. Patterson arrived at 8:16 P.M. Absent: None. City staff in attendance were Attorney Narusis, Clerk Gilpin, Building & Zoning Officer Halik. In attendance were Donald A. White, Petitioner; his Attorneys Ken Schuh and Steve Cuda of Hammer, Schuh and Cuda; and Court Reporter Cheryl Barone. The meeting was also held to discuss issuance of City bonds with the City's Financial Consultant, Harold Warren who was also in attendance. The first matter to be discussed was the Annexation Agreement for Biscayne Highlands. The proposed annexation consists of approximately 9.8 acres of land located opposite the intersection of Green Street and Biscayne Drive which is about 112 mile south of the intersection of Green Street and Idyll Dell Road. Petitioner Donald White explained that he and his partner wanted to develop 25 single family lots with city water and sewer facilities. They plan to complete improvements on the subdivision within the next 90 days. He would like to be able to sell lots within the next 30 days and start construction within 60 days. He does not plan to construct the buildings but just to sell the lots. He proposed three methods by which to get water to the subdivision. 1) If the Tonyan 20 acre new annexation is completed and the water lines are run to Biscayne Highlands' western boundary, White said he would like to hook into the water line coming through Tonyan's Industrial Park. 2) If that water main is not to the subdivision boundary, he would like to tie into the private water system of the McHenry Shores (Northern Illinois Utilities) Water Company on an interim basis. He would provide money to the City for the water capital improvement and hookup fees so that when the watermain is available he could disconnect from the private water company and hook into the city water lines. 3) If the Tonyan Industrial Park final plans were approved within the next two to six weeks and Tonyan did not intend to develop immediately, the City could install the water line to Biscayne's boundary and Biscayne Highlands would then tie into the city water system. The Council felt the least desirable option was No. 3 which was to have the City install the water line. It was noted that on the preliminary plat, Outlots A and B were shown as separate lots which was not acceptable to the City. White explained that the final plans had been revised to show that Outlot A would be a part of lot 1 and Outlot B would be a part of lot 25. White said that if a small retention pond was placed on one of the lots, it would not be the" responsibility of the City to maintain that lot but would rather be the responsibility of the lot owner. The Annexation Agreement was then reviewed paragraph by paragraph. Paragraph 16 on page 8 was moved in its entirety to Paragraph 9 on page 6. Paragraph 10 and 12 on Page 6 were modified by legal language acceptable to the City and Developer. Paragraph 12 on Page 6 was amended with the intent that the developers would pay annexation fees to the City of McHenry in the amount of $500 peracre,with an additional annexation fee of $400 per subdivided lot which would be payable at the time of final execution of the Annexation Agreement. Bolger felt the developer should pay the same amount that was charged on the Deerwood Annexation Agreement particularly since Biscayne Highlands was hooking up to the City Sewer lines which were enlarged to take care of those things. Motion by Lieder, seconded by Serritella, to charge an annexation fee of $500 per lot with an additional annexation fee of $400 per lot, the total fees being payable at the time of the execution of the Annexation Agreement. Voting Aye: Bolger, Donahue, Lieder, Teta, Smith, McClatchey, Patterson, Serritella. Voting Nay: None. Absent: None. Motion carried. Monday, June 4, 1990 Page 2 The Annexation Agreement will also be amended to expand the scope of the use of the developer donation fees by the schools to permit ,;fits use for non -capital items. The intent of the City Council was not place any limitations on the scope of the uses of the Developer Donation fees by the schools. Mayor Busse called for a recess at 9:15 P.M. The meeting reconvened at 9:18 P.M. with everyone still in attendance. Bolger raised the question on the water drainage flow that would be coming from the proposed subdivision which would flow easterly into McHenry Shores and through Creekside Park. White said that this drainage had been given consideration and the engineering plans resolved the question. Motion by Smith, seconded by McClatchey, to approve the Annexation Agreement as amended at this meeting and to authorize the petitioners and City Attorney to revise the Annexation Agreement and present it to the Council in its corrected form. Voting Aye: Bolger, Donahue, Lieder, Teta, Smith, McClatchey, Patterson, Serritella, Busse. Voting Nay: None. Absent: None. Motion carried. Mayor Busse called for a recess at 9:20 P.M. The meeting reconvened at 9:28 P.M. with all Aldermen in attendance except Alderman Smith who left the meeting at 9:20 P.M. Harold Warren of Warren 8 Associates, Municipal Finance Consultants for the, City, discussed the Alternate G.O. Bonds in the amount of $3,000,000 which the City had authorized for the construction of the new City Hall. He also discussed and gave the Council information on the $5,050,000 low interest rate loan application which the City is attempting to work out with the Illinois EPA. In previous months both bond ordinances had been passed by the Council and notice had been published in the newspapers. Warren felt that this was an excellent time for the City to sell the $3,000,000 Alternate G.O. Bonds for City Hall construction since interest rates were very favorable at this time. If additional money was needed for construction of City Hall or the furnishing of City Hall, there would be an additional $700,000 available through non -referendum bonds of the City. Warren felt that the bonds could be sold at an interest rate better than 6.9 or 7 percent. He was authorized to draft an offering statement and make the necessary preparations to sell the $3,000,000 Alternate G.O. Bonds. Warren then discussed the Revolving Loan Agreement with the EPA which would make money available to the City at a great savings of interest. On an annual basis, the savings and interest cost as between 7 1/2 percent (the estimated current market 20 year rate) and 3.745 percent (the loan rate), is equal to interest savings of $189,628 in the first year. Over the 20 year life of the loan agreement the estimated savings to the City would be $2,000,000. He said there are significant savings which can be achieved only by compliance with the requirement for a dedicated source of revenue to pay off the loan. A revenue source in turn, means additional debt service charge. " However, additional user costs to an average user is perhaps $48 per year and interest costs savings as mentioned above is equal to $33 per user per year. Therefore, the increase in average cost would have a net effect of perhaps $15 per year," Warren said. Warren read from his letter of June 1, 1990 which explained his sewer rate analysis for an increased user and debt service charge to enable the city to make application for the Revolving Loan Agreement with the EPA. Warren said that the proposed user charges need not be adopted this year or at least until such time as the loan application is approved. Approval of the loan may not be received during the current 1990 programs, however, the City should seek to qualify for fiscal 1991 funds." Several Aldermen were reluctant to talk about raising the sewer and water rates at this time. Warren explained that it could possibly be two years before the new rates would be put into affect. Monday, June 4, 1990 Page 3 Lieder felt that the developer donation fees and the capital improvement fees should be reviewed to see if additional revenues from those funds could help to lower the rates for the average sewer/water user. It was suggested that the population equivalent (P.E.) costs should be determined in order to provide information as to what future fees should be for sewer capital improvement fees. Some Aldermen felt that the new South Waste Water Treatment Plant should be expanded and we should pursue the revolving loan grant because $2,000,000 would be saved in interest. Alderman Serritella left the meeting at 10:28 P.M. Mayor Busse asked the Aldermen to review the information in the letter submitted by Warren. Additional facts will be researched and presented again to the Council for further discussion. Motion by McClatchey, seconded by Patterson, to adjourn. Voting Aye: Bolger, Donahue, Lieder, Teta, Smith, McClatchey, Patterson. Voting May: None. Absent: Smith, Serritella. Motion carried. Meeting adjourned at 10:29 P.M.