07/16/1998 Special Meeting135
MINUTES OF THE SPECIAL MEETING OF THE
CITY COUNCIL OF THE CITY OF DES PLAINES,
ILLINOIS, HELD IN THE ELEANOR ROHRBACH
MEMORIAL COUNCIL CHAMBERS, DES PLAINES
CIVIC CENTER, THURSDAY, JULY 16, 1998
CALL TO ORDER: The Special Meeting of the City Council of the City of
Des Plaines was called to order by Mayor Paul Jung at
7:05 p.m. in the Eleanor Rohrbach Memorial Council
Chambers, Des Plaines Civic Center on Thursday, July :L6,
1998.
ROLL CALL:
Roll call indicated the following aldermen present:
Beauvais, Christiansen, Elstner, Higgason, Brookman,
Sarlo, Smith, Arredia.
Also present were:
City Staff: City Manager Douthwaite, Assistant to the City Manager
Johnson, Director of Economic Development Klaus, and Director of Finance
& Administrative Services Egeberg
Speer Financial, Inc. Kevin W. McCanna, President
REVENUE
ALTERNATIVES/
LIBRARY DEBT
SERVICE:
Tabled
7/6/98
Moved by Sarlo, seconded by Smith, to take from the table
the matter of Revenue Alternatives/Library Debt Service,
tabled on July 6, 1998. Motion declared carried.
Mayor Jung introduced the City's financial advisor, Kevin
W. McCanna, president of Speer Financial, Inc., 55 E.
Monroe Street, Suite 3435, Chicago, IL 60603. Mayor Jung
asked Mr. McCanna to give his analysis of how the debt
service for an additional $10 million in Bonds to be
issued in 1999 ($3.5 million in bonds were issued in
1998) should be structured if TIF revenue were used.
Following his analysis, Mr. McCanna stated that he does
not recommend restructuring the current debt; he
recommends a zero coupon type or capital appreciation
debt service repayment. His analysis clearly shows that
the TIF Fund does not have adequate cash flow to pay the
debt service for the $13.5 million bonds issued for
library construction.
Mr. McCanna stated that he is unaware of any municipality
using TIF funds to build a public building since the "25%
rule" went into effect. That rule requires the
municipality to pay 25% of the cost of the building to
each taxing district on a pro rata basis. It is very
expensive.
Alderman Brookmen asked if the other taxing bodies have
been contacted to see if they would waive their 25% TIF
Penalty. Mayor Jung said he contacted School District
#62 and #207 and was told they would not.
Alderman Brookman asked City Manager Douthwaite to
explain what a TIF District is for the benefit of those
in the audience and those watching their cable station
at home. City Manager Douthwaite gave a brief overview
with scenarios of what a TIF District is and its
financial impact.
Director of Finance Egeberg stated that issuing bonds for
this debt is more efficient and less costly and could be
paid for through an increase in property taxes at a cost
of approximately $20 a year to an average homeowner or
with a 1/4 percent home -rule sales tax. Mr. Egeberg
stated that the sales tax is an easy way to pay the debt
service; it would be paid by everyone, not just
residents. He does not recommend using TIF funds.
Alderman Smith asked if TIF funds could be used five (5)
years from now, or seven (7) years from now. Mr. McCanna
stated that he was not sure; he was unaware of it being
done.
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7/16/98
LIBRARY Alderman Brookman stated her support of using TIF funds
(Cont'd.) now to eliminate or reduce the burden to the taxpayer.
Alderman Arredia stated that the possibility of using TIF
funds in the future should be investigated. City Manager
Douthwaite stated that the Staff will look into this
matter, but that the Council should decide tonight the
source of funding for the Library debt service.
Alderman Sarlo stated his support of an increase in the
sales tax as the source of funding.
Moved by Sarlo, seconded by Beauvais, that the City
impose a Home Rule Sales Tax of one quarter of one
percent (1/4%) earmarking the monies collected to fund
the Library debt service; and the City Attorney be
authorized to draft necessary ordinance.
Moved by Beauvais, seconded by Higgason, to suspend the
rules to provide public input on this matter.
Moved by Brookman, seconded by Smith, to adopt a
substitute motion that public input be held after the
City Council has completed their discussion. Upon roll
call, the vote was:
AYES: 3 -Brookman, Smith, Arredia
NAYS: 5 -Beauvais, Christiansen, Elstner,
Higgason, Sarlo
ABSENT: 0 -None
Motion declared failed.
Motion declared carried on the motion to suspend the
rules motion.
Mr. Gene Fregetto, 800 Laurel Avenue, addressed the City
Council questioning the allocation for Streetscape-
Landscaping using TIF funds; the City should cut back on
their expenses; the City should use TIF funds to pay for
the Library; the City should go to the other taxing
agencies and ask them to waive or lower their portion.
Mr. Ted Sherwood, 675 Pearson Street, addressed the City
Council stating his opposition to the use of TIF funds
to pay for the Library; that is not the purpose for this
money.
Mrs. Gloria Keane, 2048 Webster Avenue, addressed the
City Council stating that she is sick and tired of all
the negativism; we should be positive; quit arguing about
this matter; we should work together.
Alderman Brookman stated that if bonds are used to pay
for the Library, they should be callable bonds and there
should be a sunset clause that once the Library is paid
for, the 1/4% sales tax will be rescinded. City Manager
Douthwaite stated that a sunset provision would not be
enforceable if a future City Council voted to rescind it.
Alderman Smith stated that he is not in favor of using
TIF funds to pay for the Library.
Alderman Christiansen asked if TIF funds could be used
to rehabilitate private buildings. City Manager
Douthwaite said yes, and it is already being done.
Alderman Christiansen stated that he does not agree with
using TIF funds; if he was in favor of building a new
Library downtown, he would vote for a sales tax increase;
however, he is not in favor of a new Library and he will
be voting against any funding.
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7/16/98
PAGE THREE
LIBRARY Upon roll call on the original motion, the vote was:
(Cont'd.) AYES: 5 -Beauvais, Elstner, Higgason, Sarlo, Smith
NAYS: 3 -Christiansen, Brookman, Arredia
ABSENT: 0 -None
Motion declared carried. Alderman Arredia asked that the
record show that his reason for voting against this
motion was because people in his Ward voted against a new
library on the last referendum (November 7, 1995).
ADJOURNMENT: Moved by Beauvais, seconded by Christiansen, that the
Special Meeting of the City Council adjourn. Motion
declared carried. Meeting adjourned at 8:53 p.m.
APPROVED BY ME THIS
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gonna McAllister, CMC/AAE - CITY CLERK