SYCAMORE CITY COUNCIL AGENDA November 6, 2017

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1 SYCAMORE CITY COUNCIL AGENDA November 6, 2017 CITY COUNCIL COMMITTEE MEETINGS No Committee Meetings are Scheduled REGULAR CITY COUNCIL MEETING 7:00 P.M. 1. CALL TO ORDER AND ROLL CALL 2. INVOCATION 3. PLEDGE OF ALLEGIANCE Led by North School Students Joey Rosenow, Ellie Ferguson, Mikala Heine and Caden O'Donnell. 4. APPROVAL OF AGENDA 5. APPOINTMENTS 6. AUDIENCE TO VISITORS 7. CONSENT AGENDA A. Approval of the Minutes for the Regular City Council Meeting of October 16, B. Payment of the Bills for November 6, C. Annual Report on the Financial Condition of the Police and Fire Pension Funds. 8. PRESENTATION OF PETITIONS, COMMUNICATIONS, AND BILLS A. Recognition of Mary Bauer on the Occasion of her 100 th Birthday. B. Recognition of Al Wolfenberger on the Occasion of his 100 th Birthday. C. A Presentation by Northern Illinois University Recognizing the City of Sycamore and the Sycamore Chamber of Commerce for Huskie Pride in the Sycamore Community. 1

2 9. REPORTS OF OFFICERS 10. REPORTS OF STANDING COMMITTEES 11. PUBLIC HEARINGS 12. ORDINANCES A. Ordinance No An Ordinance Providing for the Issuance of Not to Exceed $3,550,000 General Obligation Refunding Bonds, Series 2017, of the City of Sycamore, DeKalb County, Illinois, for the Purpose of Refunding Certain Outstanding Bonds of said City, Providing for the Levy and Collection of a Direct Annual Tax Sufficient to Pay the Principal and Interest on Said Bonds, and Authorizing the Sale of Said Bonds to the Purchaser Thereof. First and Second Reading. This Ordinance approves the issuance of refunding bonds to replace the remaining 2007 General Obligation and 2009 Build America Bonds which have built-in call features (with the 2009 series callable in January 2018). In 2009, the City of Sycamore issued Build America Bonds (BAB s) to finance the police addition. The City typically issues non-taxable bonds, however the BAB s were issued as taxable general obligation bonds that were to receive a 35% interest subsidy under the American Recovery and Reinvestment Act (ARRA). At the time, the subsidy through ARRA made the effective interest rate payable by the City more attractive than traditional tax-exempt bonds. In March 1, 2013, the President issued a sequestration order which requires automatic spending cuts as the result of Congress' failure to enact legislation to reduce the budget deficit. This included the interest subsidy for the City s 2009 Bonds which have been reduced by 6.9%. The City currently transfers funds from the Sales Tax Distributive Fund to the 2009 Bond Fund to offset the annual debt service obligations. The chart below shows the combined annual principal and interest (without subsidy) debt service payments for the 2009 Bond. The 2009 Bond is callable in January of FY , FY , FY , FY , FY , FY , FY , FY , FY , FY ,

3 In addition to the 2009 Bond, the City has three other general obligation bonds; the 2003 Bond, the 2007 Bond and the 2012 Refunding Bond. The 2012 Refunding Bond refinanced a 2002 Series along with the majority of the 2003 Bond to achieve over $385,000 in savings. The remaining 2003 Bond, 2007 Bond and 2012 Bond obligations require transfers from the General Fund and Capital Fund totaling $590,250 in the current fiscal year. The 2003 Bond will be paid off this fiscal year and the 2007 Bond is callable and will be combined with the 2009 Bond to be refunded as part of the 2017 Refunding Bond. City staff have worked with Eric Anderson of Piper Jaffray to review options for refunding to take advantage of favorable rates and smooth the debt service without impacting other City operations while working toward a cost neutral option. To achieve the stated goals using a target of $585,000-$600,000 for annual debt service for the 2012 and 2017 Refunding Bonds, additional years will need to be added to amortize the debt payments as follows: Levy Year Series 2007 Series 2007 To Be Refunded Series 2009 Series 2009 To Be Refunded Series 2012 Series 2017 Refunding Bonds Total Debt Service Change from Current 2017 $ 198,700 $ (198,700) $ 361,850 $ (361,850) $ 261,000 $ 323,698 $ 584,698 $ (236,852) ,050 (196,050) 353,859 (353,859) 259, , ,212 (222,947) ,187 (78,187) 495,593 (495,593) 262, , ,438 (247,692) ,330 (556,330) 265, , ,245 (231,235) ,482 (564,482) 262, , ,635 (235,497) ,403 (920,403) - 592, ,640 (327,763) ,829 (408,829) - 584, , , , , , , , , , , ,165 Totals $ 472,937 $ (472,937) $ 3,661,345 $ (3,661,345) $ 1,310,400 $ 4,017,938 $ 5,328,338 $ (116,344) Contributed from City Sources 115,000 Change in Total Debt Service $ (1,344) In order to meet these goals without taking on additional costs at the time of the refunding, staff proposed injecting equity from the fund balances of the 2003, 2007, 2009 and 2012 Bond funds totaling approximately $115,000. At the end of FY17 the 2007 Bond Fund had a balance of $8,272, the 2009 Bond Fund $112,509 and the 2012 Bond Fund $13,172. These funds are the result of transfers over a number of years that exceeded the annual debt obligation. In this scenario, the City would break even or see a slight savings on the total payments (including the equity injection) as opposed to the current debt service schedules. A new fund, Fund 38 will be established as the "2017 Refunding Bond Fund" and transfers from the General Fund and Capital Assistance Fund will be redirected to the new fund for debt service payments. The FY2018 budget will be amended in the spring and will reflect these changes. The bonds will be offered as a private placement meaning that financial institutions will bid on the bonds to serve as tax-exempt investments within their respective portfolios. City Council approval is recommended. 3

4 13. RESOLUTIONS A. Resolution No. 731 A Resolution Authorizing Disposal of Certain City Property. According to the City s Purchasing Manual and Accounting Guidelines, property determined by the City Manager or department head to be no longer usable for City operations, and of greater value than $50.00 will be submitted for public or on-line auction or via trade-in. All appraisals of aforesaid equipment shall be made by the department head. In order to make formal record of the disposal, trade or sale of City property periodic resolutions are presented throughout the year that either memorialize activities that have transpired or are planned. Resolution 731 acknowledges and authorizes the disposal of the following property: Trade-Ins: 2008 and 2012 Chevy Impalas were traded in to DeKalb-Sycamore Chevrolet with credit used toward the purchase of a 2016 Chevy Impala. The City was given $7,500 credit for the 2012 Chevy Impala which has a CLEAN NADA trade in value of $7,450. Another local car dealer offered $3,900. The City was given $6,500 credit for the 2008 Chevy Impala which has a CLEAN NADA trade in value of $5,287. Another local car dealer offered $5,000. The trade in credit was used to purchase the 2016 Chevy Impala. The emergency lighting from the traded in squad cars will be re-purposed to the new squad car. Sale of Forfeited Vehicle: A 2003 Dodge Ram 2500 Quad Cab ST 2WD pick-up truck was awarded to the Police Department under Article 36 of State Statute when the driver was arrested for DUI after having his driving privileges revoked for DUI. The Department is preparing to sell the vehicle utilizing the on-line auction site GovDeals.com which is used by various law enforcement agencies in Illinois. A 12.5% administrative fee is charged which will be the responsibility of the buyer and no listing fees are charged. The pick-up truck has a NADA ROUGH trade in value of $4,275 although it is in very poor condition. Proceeds from the sale of the truck will be allocated towards the purchase of new printers used with electronic ticketing in the squad cars. The current printers are over 8 years old and cost approximately $1,000 for parts and installation. City Council approval is recommended. 14. CONSIDERATIONS A. Consideration of a Request by Lance Klinger to Add an Additional Class VG Liquor License. In September, the Council voted to establish a new class VG liquor license aimed at addressing video gaming cafés that were not contemplated when video gaming was allowed in The 4

5 action moved the current four class B license holders that were operating as video gaming cafés to the new license and put a cap on the number of licenses at four. Consistent with class B licenses, Council can approve additional licenses by a 3/4ths vote of the corporate authorities. Since the Council took action to more appropriately address video gaming cafés, a total of six parties have expressed interest in obtaining class VG licenses. Based on these inquiries, the Liquor Commissioner requested additional discussion to determine the Council s thoughts on adding Class VG licenses beyond those created as part of Ordinance The discussion suggested that 3/4 ths of the corporate authorities were not in favor of creating more Class VG licenses at this time. The City Attorney has advised that a petitioner can make application requesting the Council formally consider adding additional licenses. Lance Klinger, who owns Ski s and Sophie s Place and currently possesses two class B liquor licenses, has submitted a request to create an additional class VG license. It should be noted that while Mr. Klinger is the petitioner, the Council needs to focus solely on the question of whether an additional class VG license or licenses should be created. The Liquor Commissioner would ultimately make the determination as to how the licenses are awarded after the appropriate process is followed. The Council can consider the following options: 1.) Create additional license(s) with a 3/4ths majority vote. The Liquor Commissioner would determine the distribution of the license(s). 2.) Deny the request if it fails to receive 3/4ths majority vote of the Corporate Authorities. This would signal to all of these interested parties and any others that may come forward the Council s intentions to not add more Class VG licenses. 3.) Choose not to create additional Class VG licenses at this time, but instruct staff to bring back a consideration for review in the future. This review could take place in November of City Council action is requested. 15. OTHER NEW BUSINESS 16. ADJOURNMENT 5