HomeMy WebLinkAboutMinutes - 05/07/2018 - Finance and Personnel CommitteeFINANCE AND PERSONNEL COMMITTEE
Monday, May 7, 2018
Municipal Center Classroom, 5:30 PM
1. Call to Order: The meeting was called to order at 5:30 pm.
2. Roll Call: Chairman Alderman Curry, Alderman Schaefer, and Alderman Mihevc. Also
in attendance Director of Finance Lynch, Director of Public Works Schmitt, Project
Engineer Strange, Director of Economic Development Martin, and Deputy Clerk
Meadows.
3. Public Comment: None.
4. Motion to approve the April 2, 2018 Finance and Personnel Committee meeting
report.
A Motion was made by Alderman Schaefer, seconded by Alderman Mihevc to approve
the meeting report as presented. Roll call: Vote: 3-ayes: Alderman Schaefer, Alderman
Mihevc, Alderman Curry. 0--nays, 0-abstained. Motion carried.
5. Review, discussion and consideration of a Revolving Loan Fund application for the
amount of $24,530.00 submitted by Love Bugs Day Care located at 2214 Route 120,
and motion to place this item on the next available City Council meeting agenda.
Director Martin provided the Committee Members with an overview regarding the
Revolving Loan Fund application from Love Bugs, LLC. He reported Love Bugs, LLC is
requesting funds to update the existing rental space including electrical, plumbing,
painting, equipment, signage as well as employee training.
Director Martin went on to report, that Staff has been working with Bill Busse from First
National Bank of McHenry, who conducted the underwriting services for the proposed
application. The analysis has been completed by Mr. Busse and been emailed to the
committee due to the fact that some of the information contained in the report is
confidential. Director Martin reported that Mr. Busse has recommended approval of the
loan application at the current prime rate of 4.75%.
Director Martin stated that the Revolving Loan Fund Committee is being asked to
consider the application submitted by Love Bugs, LLC for Revolving Loan funding the
improvements and employee training at 2214 W. Illinois Route 120, Should the
Committee choose to award the funding. Staff is recommending a loan in the amount of
$24,530, along with the following conditions:
A blanket security interest in the business assets (equipment, inventory, accounts,
receivable, intangibles, ect.) of Love Bugs, LLC;
An unconditional personal guarantee by Jacqueline Jezierski of the amount
borrowed;
A requirement for submittal of a personal financial statement & business financial
statements from Love Bugs; LLC after the close of each fiscal year beginning in
FY2018;
Finance and Personnel Committee
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May 7, 2018
• Loan to be repayable monthly over a five year term; 4.75% fixed rate (current
prime) with no prepayment penalty;
• City to buy back (we would assign) loan (by debit offset to demand deposit
account) should payments become more than 60 days delinquent;
• Request is subject to full City Council approval;
• Loan documents must be fully executed within 30 days of City Council approval.
The Committee Members discussed in length the risk associated with the approval of the
loan application. In addition, they commented on the cost associated with complying with
the Illinois Department of Children and Family Service's regulations.
Director Martin reported that Love Bugs, LLC currently receives State subsidies. The
Committee Members questioned how frequently and timely does the State pay the
subsidies due to Love Bugs, LLC.
The Committee Members discussed increasing the interest rate to offset some of the risk.
The Committee Members concurred that the rate should be 1% over prime.
A Motion was made by Alderman Schaefer and seconded by Alderman Mihevc to
approve the Love Bugs, LLC Revolving Loan Fund application with conditions as
noted. Roll call: Vote: 3-ayes: Alderman Curry, Alderman Schaefer and Alderman
Mihevc. 0-nays, 0-abstained. Motion carried. This matter will be placed on an upcoming
Council Meeting agenda.
Discussion on procedures for Project Change Orders
The Committee Members along with Staff discussed the current project change order
procedures. Staff noted that there currently is no policy in place with respect to change
orders. Director Schmitt noted that in his opinion if each change order had to be approved
by the Administrator and Council the City would experience delays with respect to
improvement and construction projects. A lengthy discussion ensued with respect to
reasonable change order approval limits. Staff suggested the Committee Members
consider amending the purchase policy to include a "Change Order" section that
authorizes Staff to approve changes orders that are less than 10% of the original contracts
previously approved by the City Council and any other change orders of more than 10%
of the original contract price would require prior approval of the City Administrator
along with the consent of the City Council. Finance Director Lynch will draft language
reflecting the discussion and bring the amended Purchasing Policy back for Committee
review.
Staff Reports
Staff Members offered no reports at this time.
Any other Business
There were no additional topics discussed.
Finance and Personnel COlnlnlitee
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May 7, 2018
Motion to adjourn the meeting
A Motion was made by Alderman Miheve and seconded by Alderman Schaefer to j
adjourn from the public meetine at 6:48 p.m. Roll call: Vote: 3-ayes by unanimous
voice vote.0-nays, 0-abstained. Motion carried.
Reviewed and approved this 'r i day of 2018
Alderman Scott Curry, Chairman