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12/17/198493 December 17,. 1984 The regular meeting of the Board of Trustees of the Village of Deerfield was called to order by the Mayor in the Council Chamber of the Village Hall on Monday, Decem- ber 17, 1984 at 7 :45 P.M. The Clerk called the roll and announced the following were Present: Bernard Forrest, Mayor Cynthia J. Marty Edwin B. Seidman Vernon.E. Swanson J. Robert York Absent: Stephen 0. Jackson James L. Marovitz and that a quorum was present and in attendance. Also present were Village Manager Robert D. Franz and Village Attorney James K. Stucko. PROCLAMATION ' Mayor Forrest read "a proclamation stating WILMOT JR. HIGH SCHOOL that in 1983 the U.S. Department of Educa- RECOGNITION Al%'A RD tion had established a Secondary .School Recognition Program to focus attention on successful schools and to demonstrate that excellence in education can be achieved by communities which do strive to attain it. Although 480 schools from 48 states, were nominated for the award, 'Wilmot Jr. High School was chosen as only one of 203 schools nationwide and only 8 in •Illinois. The award. recognizes Wilmot School's strong leadership, excellent instructional environment, high expectations for stu- dent achievement and performance, and a heavy emphasis on academics. Mayor Forrest acknowledged the pride of all Deerfield residents in Wilmot Jr. High School, the entire School District,.the Staff, the students and parents. Trustee Marty moved, seconded by Trustee Swanson, to approve the proclamation. i Motion carried unanimously. Mayor Forrest presented the Proclamation to Mr. Al Cohen, Principal of Wilmot Jr. High School, and both he and Mayor Forrest presented plaques to Wilmot Jr. High School teachers. KEY PERSON AWARD PRESENTED Mayor Forrest announced that the first Key TO RICHARD LORENZ. Person Award had been established as a token of appreciation to Richard Lorenz, who is retiring as Chairman of the Board of Zoning Appeals after sixteen years of communi- ty service on that Board. Ile expressed appreciation to Mr. Lorenz for the many eve- nings spent in voluntary community service and to his wife, Jane, for her willingness to have him devote so much time to his BZA responsibilities. Mayor Forrest presented Mr. Lorenz with a plaque as all applauded their approval. BEAUTIFICATION AWARD PRESENTED Mayor Forrest announced that the 1984 -35 DEERFIELD FEDERAL SAVINGS & LOAN Beautification Award was presented to the Deerfield Federal Savings and Loan, whose new drive -in facility has so greatly approved the appearance of the Village Center. Mr. Wayne Ecklund, President of the Loan company,accepted the plaque from Mayor Forrest with all expressing their approval. PROCLAMATION Mayor Forrest read the proclamation wherein UNITED NEGRO COLLEGE FUND WEEK he designated December 23 -29, 1984 as United DECEMBER 23 -29, 1984 Negro College Fund Week and urged every citizen to support the Fund's annual cam- paign to'raise operation money. Trustee Swanson moved, seconded by Trustee Marty, to accept the Mayor's proclamation. Motion carried unanimously. Ass. Eve Sherman accepted the proclamation. All present expressed their approval. MINUTES APPROVED Trustee Seidman moved, seconded by Trustee Marty, to approve the minutes of the pre- vious meeting with the following correction: Under $4..2 MILLION FINANCING, sec- ond paragraph, delete the second sentence. Motion carried unanimously. APPROVE WARRANT NO. W -84 -12 Motion carried on the following vote: Trustee Marty moved, seconded by Trustee Seidman, to approve the bills and payroll, including transfers and reimbursements. AYES: Marty, Seidman, Swanson, York (4) NAYS: None (0) TREASURER'S REPORT Finance Director George Valentine reported 1 J 9� that Sales Tax for the last calendar year exceeded the prior year by eleven percent. On a fiscal year basis', the Sales Tax is ahead of projections by about three and one -half percent. Other major revenue sources are substantially as budgeted. Sales Income Tax is about ten percent over budget and Water Tax sales are about seven per- cent over budget. Expenditures are at or below the projected departmental budgets except the Sewer Department's which is about $20,000 over projections, due primarily to heavier than anticipated electrical bills at the sewage treatment plant. Mr. Valentine stated that though electrical rates are up about 13 %, he felt the overage was due to under- budgeting. He added that there's a likelihood that Commonwealth Edison had mis- charged certain bills to the treatment plant. Considerable discussion followed with Village Engineer James Soyka explaining the types of meters, the variable demands for energy at the plant, variable electric rates, etc. He, stated that recently the plant had had to handle double strength loads from Sara Lee,necessitating greater blower activity. Sara Lee paid surcharges for this service. Mayor Forrest suggested the possiblity of reducing the load on the demand meters by starting motors on a periodic basis and programming them into a small computer controller to even out the demand. lie asked Mr. Valentine to work with Mr. Soyka to prepare a report for the next Board meeting showing some of the reasons for the $20,000 overage and the amount of surcharges paid by Sara Lee. DEPARTMENTAL OBJECTIVES Finance Director George Valentine reported FINANCE DIRECTOR GEO. VALENTINE that: 1) the Finance Department had issued a Comprehensive Financial Report in conjunc- tion with the Auditors, 2) the Controller's report had been completed and forwarded to the State Controller, 3) the Property Tax Levy had been completed and filed, 4) the Annual Treasurer's Report was published and filed with the Cook and Lake County Clerks, 5) Vehicle Sticker applications went out on time, 6) Investment criteria were met with investments ranging between 100.3% and 1.06.9 %, 7) Tax Levy Abatements have been prepared and will bepresented that meeting for passage, 8) Considerable research had been undertaken before the Finance Department.made a recommendation on + Variable Rate Demand Bonds to finance upcoming capital projects, 9) Preparation of the budget will commence in January for passage in April, 1985. Mr. Valentine reported that the Building Department has been working quite effectively with existing personnel on an IBM PC XT microcomputer. He therefore recommended con- tinuation with the microcomputerization program and purchase of two IBM PC's, already in the 1984 -85 budget ... one for the Finance Department and one for the .Public Works Department. V. Trustee Marty asked whether the Library Board was given a copy of the Auditor's report. Mr. Valentine replied that he had furnished the library with a number of reports. Mayor Forrest requested, that Mr. Valentine send a letter to Thomas Parfitt, Chairman of the Library Board, outlining recommendations by the Auditors, along with a copy of the report. PUBLIC HEARING INDUSTRAPLEX - INDUSTRIAL REVENUE BONDS Finance Director George Valentine explained that the Village had found the Indus - traplex project worthy and signed a Memorandum of Intent on September 19, 1984. The purpose of the hearing was to provide an opportunity for comments from the public, pro or con, written or oral. A notice was published December 3, 1984 in the Chicago Tribune that a hearing would be held December 17, 1984 to issue bonds in the amount of $5,000,000. The amount stated in the Memorandum of Intent and actually requested is $4,500,000. Mr. Valentine reported that no written commentary had been received. Trustee Swanson asked whether approval of the amount requested would jeopardize future years or future projects. Mr..Valentine replied that he had been advised by Bond Counsel and Mr. Ron Noreen, Village Fiscal Advisor, that "this does not.come' under our caps." As no one in the audience wished to be heard, Mayor Forrest adjourned the hearing. INDUSTRAPLEX DEVELOPMENT Village Attorney Stucko explained that the $4.5 MILLION IRBs, SERIES A & B bond ordinance itself, prepared for the ORDINANCE NO. 0 -84 -52 evening's meeting, was the official authori- zation by the Village to go forward with the Industrial Revenue Bond issues and authorizes the execution of all the various docu- ments described in the bond ordinance which relate to the borrower's obligation, under those documents, to repay the bond issue in a timely manner, and the means 95 of financing.. All the documents had been looked at by Mr. Stucko and Mr. Ron Noreen and various other lawyers involved. For a year -end closing, passage of the ordinance that evening was necessary. He commented that the Village incurs no liability in this bond issue. Thereafter, Trustee Seidman moved, seconded by Trustee Swanson, to waive the rules to permit passage of the ordinance on first reading. Motion carried unanimously. Trustee Marty moved, seconded by Trustee Seidman, to pass the ordinance authorizing Industrial Revenue Bonds, Series A & B. for Industraplex Development, in the ag- gregate amount of $4.5 million. Motion carried on the following vote: AYES: Marty, Seidman, Swanson, York (4) NAYS: None (0) INDUSTRAPLEX DEVELOPMENT First.reading of the ordinance. SPEC. USE, RETAIL /ACCESSORY USES ORDINANCE LASALLE /BAXTER'JOINT VENTURE Manager Franz reported that following a ANNEXATION, REZONING, SPEC. USE, joint hearing with the Village Board and PUD, VARIATIONS the Board of Zoning Appeals on September PLAN COMM. REP. /RECOMMENDATION 12, 1984, the Plan Commission held a separ- AND ate hearing on November 8, 1984. The hear - BZA REPORT AND RECOMMENDATION ing was to consider a petition by LaSalle/ Baxter Joint Venture for rezoning and Special Use for a Planned Unit Development for property west of the Tollway and south of Deerfield Road. The Plan Commission, on a vote of 5 -0, made the following recommendations: 1. The subject property be annexed. 2. The subject property be zoned I -1 PUD, Office, Research, Restricted Industrial 3. The overall concept plan for the I -1 PUD be approved subject.to the following: + a. The inclusion of a hotel in the PUD is understood to require the petitioners to seek approval for a hotel under a Special Use at such time as they have decided to request a Special Use for the hotel and they have definite plans for the hotel. Furthermore, the hotel must be of highest quality, have less than 350 rooms and meet the other criteria of the Zoning Ordinance. b. The petitioners seek a Special Use for the inclusion of a health club facility in the development when they'have definitive plans for the facility. c. The petitioners seek a Special Use for a sundry shop and barber shop at the time when those-uses are listed as Special Uses in the Zoning Ordinance. d. A Special Use for an employee cafeteria /food service facility be granted. e. Tlie petitioners must return at a .Later time with a definite si.gnage plan which reflects the sense of low profile demonstrated in the concept sketches and which locates the development project signs in the general areas indicat- ed by the petitioners. f. The petitioners be granted a variation of the Zoning Ordinance requirement of 1 parking space per 250 gross sq. ft. of building area. The petitioners' request to provide parking at 3.3 spaces per 1000 sq. ft. of gross leasable floor area and to "landbank" the difference betweaithe 4 /1000 GLFA and the 3.3/1000 GLFA should be approved if the petitioners can show that they could provide all of the parking spaces at grade rather than utilizing parking structures. g. The petitioners be granted a variation to reduce the size of the parking stalls to 8V x 18', to utilize a grass overhang area where appropriate, to waive the provision of roping, wheel stops, and interior curbing. h. The variations be granted to permit parking within the required perimeter setbacks on the south, west, and north sides of the development. i. The petitioners be required to provide three loading berths per office building. j. The petitioners be granted a variation from the strict requirements of the Zoning Ordinance as it pertains to the landscaped screening of the parking area so as to screen those areas in the manner indicated on the petitioners' landscaping exhibits. k. The petitioners'. be required to provide attheir own expense the road and inter- section improvements, including signalization and road widening, as indicated in the petitioners' traffic study as being required for their development entrances. s 1 0 1. The height of the buildings in the development be restricted to 75 feet. All HVAC equipment and other appurtenances.(except 4 ft. for elevator overrides) must be within the 75 feet. m. The frontage road accessing the residential properties along the south side of Deerfield Road should not be tied into the petitioners' access drive at this time. Additionally, the Plan Commission made, on a vote of 3 -2, the following recommen- dations: a. A sidewalk should be provided the entire length of Deerfield Road and Saunders Road. b. The Board of Trustees should request an analysis of the complete cost of the infrastructure improvements necessary in the area and identify those items which are necessary to accommodate the petitioners' development and then seek funds from the developer to pay for those items. Manager Franz further reported that the Board of Zoning Appeals, after the joint hearing in September, held a separate hearing on October 16, 1984 to consider a petition for a variation to permit construction of office buildings and a hotel to a height of 75 feet in lieu of the 45 feet permitted. On a vote of 4 -0, the BZA recommended that a variation for 75 foot buildings be granted with the stipulation that all utility equipment be included within the 75 -foot limit, except that an additional four feet for elevator overrides and an additional ten feet for atriums be allowed. Trustee Swanson stated that it appeared that the Board was being asked to approve annexation of the property, rezoning to I -1, and a preliminary PUD for Phase I. Attorney Stucko agreed with Trustee Swanson, but added that there is movement toward preparation of an annexation agreement which will embody all the Plan Commission's and BZA's recommendations, perhaps modified at the evening's discussion. He went on to explain that there have been a number of drafts,.back and forth, with the petitioners, and most of those issues are included in the Plan Commission's report. Mr. Stucko added, however, that there-are a number of open points yet to be resolved, the most major of which is Deerf ield's and the County's concern as to points of access and road configurations. Manager Franz stated he was awaiting a letter from the County Superintendent of Highways indicating what improvements they feel are needed, thereby giving some guidance to the Village Board. Mr. Stucko further ex- plained that there are other main conditions that need to be resolved in the final annexation agreement: water agreements among all interested parties, boundary agree- ments between Riverwoods and Deerfield, both in various stages of draft. There are other interrelated issues which must be tied up. The Illinois Tollway Commission has yet to consent to their property being included in the annexation. Though they have given informal approval, all the legal steps necessary to accomplish this have not been taken. Mr. Stucko stated that the petitioners were looking to the Board to accept, that evening, the Plan Commission's recommendations, thereby authorizing him to complete the negotiations of the annexation agreement. The annexation agreement will state that the Board approves the concept for the overall site, but that specifically from a preliminary plan standpoint,Phase I is approved. When a final plan is approved for Phase I, a Special Use Ordinance will be approved for Phase I. He stated that any further developments in terms of ancillary uses must be the subject of specific.petitions, subsequent Plan Commission hearings, and reports to the Board. Trustee Seidman asked who would maintain Saunders and Deerfield Roads and Hawthorne Place. Manager Franz replied that Deerfield would have legal jurisdiction for those areas abutting the annexed land. This jurisdiction would be for the full width of Saunders Road, hopefully on a police and public works maintenance basis, in coopera- tion with the County, so as to avoid a "patchwork" system of services. Mayor Forrest stated that as a condition for annexation of the Tollway itself, the Tollway Commis- sion has asked that the maintenance of Hawthorne Place be taken over, and the devel- oper has agreed. Deerfield Road_ from Saunders to Castlewood is maintained by the State under contract to Lake County. Asked what Phase I would include, the Petitioners' representative displayed a site plan for the development. Phase I will consist of roadway network between Deerfied, and Saunders Roads, one office building having a 20,000 square foot atrium facing the Tollway, and a retention pond. Thereafter, the Board considered each Plan Commission recommendation individually. Questioned. about 3(f), Mr. Lonchar, attorney for the developer, replied that though they were requesting parking of 3.3/1000 at grade, they had provided a landbank plan 0 q.7 4 k (to be attached to the annexation_ agreement) which would pick up the additional .7GLFA space to meet the required 4/1000 sq. ft. GLFA. However, they would like the flexibility to use garage parking. 3(h). The petitioner stated that a 4 -foot berm would protect residences from the parking within the perimeter set back. 3(k). Mr. Lonchar stated that they listed in the annexation agreement certain road improvements associated with the Project. The developer will be contributing an estimated $400,000 for those improvements. 3(1). The petitioner stated it was their intention to develop 6 -story buildings, right at 75 feet. To do so, a 4 -foot elevator override is needed for safety reasons. The atrium has peaked roofs to permit water run -off. Whereas they had petitioned for an additional 10 feet, they are now requesting 6 feet which they feel will be sufficient. 3(m). Mr. Lonchar stated that the petitioner concurred with the Plan Commission's recommendation not to tie their access drive to the frontage road accessing resi- dential properties on the south side of Deerfield road. He stated that they had presented considerable traffic testimony in this regard, and that no residents (though notified of the hearing) had entered an objection. i. Reyrirding the Plan Commission's recommendation on sidewalks, Mr. Lonchar stated they saw no need for them as there was a path on the north side of Deerfield Road and there were no sidewalks south of Hawthorne Lane. Trustee Seidman noted that no sidewalk - exists along the Thorngate Clubhouse property and northward to Deerfield Road. However, flan Commissioner Slavis felt that the time to acquire sidewalks is at the time of property development. Trustee Seidman moved, seconded by Trustee Swanson, to approve the Plan Commission's recommendation to require sidewalks. Motion failed, 0 -4. As to the Plan Commission's recommendation for an analysis of costs of infrastruc- ture improvements, Mayor Forrest stated that the matter will be-addressed in the future. Regarding the BZA's recommendation, it was the consensus of the Board that a request for a 4 -foot elevator overide and an extra 6 feet for atriums was reason- able. Mayor Forrest stated, "It is my strong feeling that there ought to be a donation of land from Baxter for the Tollway exit a Lake -Cook Road, and I. would like to see it done as part of this whole package. Deerfield needs a.4 -way interchange, and many surrounding communities have supported that issue. Whatever is neces- sary to request Baxter to do that, I would like to have done as part of this whole package. If it requires, at some time, granting credit for that land so that it doesn't reduce any development, and whatever conditions such as that need to he part of the granting of the easement, that's fine. I really think we need to provide a southbound exit at Lake -Cook Road." Mr. Lonchar pointed out that:he represented the Deerfield /Saunders Joint Venture, but lie, as well as Mr. Robert Pease from Baxter who was present, would note Mayor Forr.est's views. Tru. -:tee Marty moved, seconded by Trustee Seidman, to accept the Plan Commission's and Board of Zoning Appeals' recommendations with the changes as noted,and to direct the attorney to prepare .the Resolution authorizing execution of the annexation agreement, the ordinance annexing the property, the ordinance zoning the property in the I -1 District,, and further to direct the attorney to continue negotiations. for completion of the annexation agreement. Motion carried unanimously. The Board recessed at 9:25 and reconvened at 9:40 with all members present and in attendance. MANPOWER COMMISSION RECOMMENDATIONS Deferred until later meeting. FENCE MODIFICATION Trustee Seidman moved, seconded by Trustee 633 WAUKEGAN ROAD (LEVY) Swanson, to waive the rules to permit pass - ORI)INANCE NO. 0 -84 -53 age of the ordinance on first reading. Motion carried unanimously. Trustee Seidman moved, seconded by Trustee Marty,, to pass the ordinance granting a variation permit - tin,, the erection of a 6 -foot fence, two feet in from the sidewalk with fence frame faci-ng the interior of the lot, at 633 Waukegan Road. Motion carried as follows: AYES: Marty, Seidman, Swanson, York (4) NAYS: None (0) HOTELS /ZONING ORDINANCE AMENDMENT Mr. Richard Wendy, Attorney for the Stein/ ORDINANCE NO. 0 -84 -54 Volkswagen development, submitted a floor. plan for the hotel and pointed out the loca- tion of the atrium area for the service of complimentary liquor. I. 7 4 V. 1 L Thereafter, Trustee Marty moved, seconded by Trustee York, to pass the ordinance amending the Zoning Ordinance regarding Hotels. Motion carried on the following vote: AYES: Marty, Seidman, Swanson, York (4) NAYS: None (0) HOTEL SIGNS Trustee York York moved, seconded by Trustee ZONING ORDINANCE AMENDMENT Seidman, to pass the ordinance amending.the ORDINANCE NO. 0 -84 -55 Zoning Ordinance regarding hotel signs. Motion carried on following vote: AYES: Marty, Seidman, Swanson, York (4) NAYS: None (0) ALCOHOLIC BEVERAGES Trustee Marty moved, seconded by Trustee.Seid- MUNICIPAL CODE AMENDMENT man, to pass the ordinance amending the Muni - ORDINANCE NO. 0- 84 -56- cipal Code for Alcoholic Beverages to create a Class G license permitting sale for use and consumption of liquor in hotels with a license fee of $3,000. Motion carried as follows: AYES: Marty, Seidman, Swanson, York (4) NAYS:. None (0) STEIN /VOLKSWAGEN PROPERTY Trustee Seidman moved, seconded by Trustee SPECIAL USE /INDUSTRIAL PUD Marty,to pass the ordinance granting a ORDINANCE NO. 0 -84 -57 Special Use /Industrial PUD for the Stein/ Volkswagen property. Motion carried as follows: AYES: Marty,,Seidman, Swanson, York (4) NAYS: None (0) STEIN /VOLKSWAGEN PROPERTY Trustee York moved, seconded by Trustee Marty, HEIGHT VARIATION to pass the ordinance granting a variation ORDINANCE NO. 0 -84 -58 to permit a building height of 75 feet, in- cluding mechanicals, for the Stein /Volks- wagen property. Motion carried on following vote: AYES: Marty, Seidman, Swanson, York (4) NAYS: None (0) GALVANI - 768 OSTERMAN Trustee Seidman moved, seconded by Trustee TAKE -OUT RESTAURANT York, to pass the ordinance amending a ORDINANCE NO. 0 -84 -59 Special Use /Commercial PUD to permit a take- out restaurant at 768 Osterman Avenue. Motion carried as follows: AYES: Marty, Seidman, Swanson, York SIGN MODIFICATION (IFERCAN) 360 -380 LAKE..000K ROAD ORDINANCE NO. 0 -84 -60 Road. Motion passed as follows: AYES: Marty, Seidman, Swanson, York MATAS CORPORATION ZONING MAP AMENDMENT 'ORDINANCE NO. 0 -84 -61 Motion carried on following vote: AYES: Marty, Seidman, Swanson, York MEDICAL- DENTAL CLINICS ZONING TEXT AMENDMENT SPECIAL USE /I 71 PUDs ORDINANCE NO. 0 -84 -62 follows: (4) NAYS: None (0) Trustee Seidman moved, seconded by Trustee Marty, to pass the ordinance granting a sign modification to permit two ground signs on a single zoning lot at'360 -380 Lake -Cook (4) NAYS: None (0) Trustee Seidman moved, seconded by Trustee Marty, to pass the ordinance rezoning the Matas property from I -2 to I -1, Office, Research and Restricted Industrial District. (4) NAYS: None (0) Trustee Seidman moved, seconded by Trustee Marty, to pass the ordinance amending the Zoning Ordinance to identify and provide medical- dental offices as Special Uses in the I -1, PUD District. Motion carried as AYES: Marty, Seidman, Swanson, York (4) NAYS: None (0) MATAS CORPORATION Trustee Swanson pointed out that the Board SPEC.USE /INDUSTRIAL PUD _ had before it the final development plan ORDINANCE NO. '0-84-63 for Phase I of the Matas development. He went on to state that the Matas request for 46;000 sq. ft. of non-office space (restaurant, 8,000 sq. ft.; medical, 20,000 sq. ft.; health club; 3,000 sq. ft., retail, 15,000 sq. ft.) was rather high for Phase I. He added that he hoped the petitioner would limit such ancillary uses to Phase I and not request them for Phases II and III. Mr. Joseph Ash stated that they had originally proposed a rehab of the Fiat -Allis buildings and had gone into detailed hearings regarding ancillary uses, and it was agreed that they would have 15,000 sq. ft. of retail space,in addition to the ,others just mentioned, in a 300,000 sq. ft. building. When the rehab plan was abandoned for the Corporate Plan with two 150,000 sq. ft. buildings in Phase I, he had advised the Plan Commission that they would limit the retail uses to 9q . 7,500 sq. ft. per building, or 15,000 sq. feet in Phase I. At this point misunder- standing occurred. He stated that they had always wanted 5% retail uses in order fto service tenants in the building and eliminate the necessity of.their leaving the development for'sundry needs. He added that if the full 7,500 sq. ft. is not used in'any one building, the unused portion can not be used to increase the amount of retail in any other building. He had thought the Plan Commission had understood their intentions, and therefore had proceeded on that basis in their financing and marketing. a , Mayor Forrest stated that the Board should take into account that approval of 5% percent for retail uses, plus restaurant, medical, and health club, could result in a 9% of non - office uses in the overall development. Trustee Swanson and Trustee Marty painted out to Mr. Ash that what the Board would approve for Phase I, they might not approve for Phase II and III. Mr. Ash stated that he understood that Trustee Marty moved, seconded by Trustee Seidman, to pass the Ordinance authorizing ®. a Special Use /Industrial PUD, amended to provide that 7,500 sq. ft. of retail space is permitted in each building in Phase I of the Matas Corporation development. Motion carried as follows: rg AYES: Marty, Seidman, Swanson, York (4) NAYS: None (0) MATAS CORPORATION Trustee Seidman moved, seconded by Trustee 'HEIGHT VARIATION Marty, to pass the ordinance granting a ORDINANCE NO. 0 -84 -64 variation to permit the con of buildings having a height, includ�evation, mechan- ical.s, not to exceed 52 feet as measured from the finished first floor.e in .Lieu of the required 45 feet. Motion carried as follows: AYES: Marty, Seidman, Swanson, York (4) NAYS: None (0) $4.1 MILLION BOND ISSUE Finance Director George Valentine stated CAPITAL IMPROVEMENTS PROGRAM that a public hearing had been.held on ORDINANCE NO. 0 -84 -65 October 29,.1984 to consider the purpose j and issuance of the $4.1. million bond issue for capital improvements: Recommended funding mechanism was briefly dis- cussed. The Finance Committee met, attended by Mr. Ron Noreen, Financial Advisor, and representatives of John Nuveen & Co., Bond Counsel. The method chosen was the issuance of General Obligation Variable Rate Demand Bonds... somewhat different from past methods using fixed interest rates.. A variable rate note will float according to the market and will be approximately 65% of the 91 -day treasury bill rates set weekly. The bond is callable by the Village on a 30 -day basis and can be put (tendered for payment) by the owner on a 30 -day basis 'thereby providing the Village with the advantage of paying a short-term rate,which is generally cheaper than long term rates,because bond holders have a much reduced risk. A long term bond today would cost about 9k% interest, and the short term bond about 6.8% (including indexing, remarketing agent's, trustee's and guarantee insurance fees). An 8% tax levy has been chosen to provide a sinking fund for S the payment of principal and interest. If funds accumulate in the fund, the Vil.l.age can start calling bonds. The cost advantage to the Village would be between $750,000'and $800,000, the difference between bonds at 914% and 8% interest rates. If the bond rate should stay around 6.8% for the full maturity period, another potential $800,000 exists. The homeowner with a house valuation of $125,000 would pay an additional $70 per year in taxes on an 8% tax levy. Mr. Valentine stated that only the Bond Ordinance and the Bond Purchase Contract with John Nuveen & Co. were in final form and ready for execution. The agreement between the Village and the Bank for Revolving Credit and the Remarketing Agree- ment between the Village and John Nuveen & Co. were not yet in final form that evening, but must be completed prior to closing. If they are substantially in a form already reviewed, the Bond Ordinance provides for the Mayor to execute them. Mr. Valentine then introduced John H. Peterson and Lorrie DuPont-Peterson of Joiin Nuveen & Co, Inc. who were present to explain more fully the details of the bond issue. Mr. Peterson stated that John Nuveen & Co. hoped to be able to buy the the variable rate bonds from Deerfield. He stated he wished to describe some of the background of.the variable rate demand bonds concept, some of,the charact- eristics of the Deerfield issue, a summary of the costs as they stand today, variable interest rates for the past two years, and a projection on the annual costs and Debt Service levy. He stated that if the Bond Ordinance is passed, John Nuveen & Co. will tender a Purchase Contract for the bonds. /oo Ms. Lorrie Peterson stated that an issue such as Deerf ield's can offer an investor opportunity to .tender their bonds back on a specific date, and if the Village will buy them back at 100 %, thereby reducing the investor's risk, the investor is will- ing to take a.lower interest rate. If the investor likes his interest rate, he will keep the bonds and not put-them back. Therefore, part of the goals of this type of transaction is to try to keep those bonds out of the market. That is why interest rate is adjusted weekly. A combination of the federal tax exemption, the short -term maturity, and safety of the investment makes this about the lowest cost general obligation bond. Describing some.of the characteristics of Deerf ield's bond issue, Mr. Peterson stated that only better credit can access the market down in this range in the manner being proposed. Many issuers in this range are required to provide a letter of credit from a bank, in substitution of the Municipal credit, in order to make the issue work. Deerfield has a strong enough: credit rating to cause expectation that the issue can be marketed on Deer.field's credit. However, in- vestors looking for a 7 -day put want to be assured that if they put back $471 million, Deerfield has-the money to buy them; therefore, a bank is in the picture. Nonetheless, it is the credit of the Village that makes this financing work,al- though standby liquidity is provided by National Westminster Bank for five years and is renewable. Mr. .Peterson exhibited a graphic diagram showing how the financing will work: 1) Deerfield issues $4.1 million in bonds, 2) John Nuveen & Co, underwrites those bonds subject to the Purchase Contract, 3) John Nuveen & Co. distributes those bonds to bondholders, 4) Acting as remarketing agent, Nuveen & Co. will post an interest rate each week. If a bondholder feels he can get a better rate elsewhere, he will put back the bonds, but if he thinks the rate is suitable he will re- tain them. Bonds put back make it necessary to find another bondholder and the rate could rise in order to remarket the bonds. If the remarketing is not suc- successful and., assuming all of the bonds have come back, the Village needs to provide $4.1 million, on 7 days notice, with principal and interest. It is at this point, through an arrangement with National Westminster Bank and Deerfield, a that the bank will loan the Village whatever money is needed to pay off the bondholders..(all of which occurs through the LaSalle National Bank as Trustee). The Village would have 24 months to repay the bank. Certain options would be open: continued attempts to remarket the bonds to repay Westminster; a switch . to fix rate general obligation bonds, etc. Mr. Peterson.pointed .out that the in- terest rate can go up to 13% and with an 8% tax levy, a gap in funds is created. He did not think it very likely such would happen, but it is'a possibility. Asked who would be a likely purchaser. Mr. Peterson replied that Money Market Funds were more'loyal and were more desirable than Corporations. Also, the bonds will be probably bought.by one buyer. Asked about calling bonds in the later years, rather than early, Mr. Peterson advised that the rating services and bond market prefers to see bonds called on a regular basis. Mr. Peterson stated that at today's interest rate of 6.370% plus remarketing, indexing, liquidity and trustee fees, variable rate bonds would have an interest rate of 6.837 %. Asked about the liquidy fee, he stated that Westminster Bank will charge an eighth of a point per year for their facility with the hope that the Village won't use it. But it will charge an eighth of a point for half of a year on the amount used. If at the end of six months all bonds were put and went back to the bank, the total cost would be Z point, one eighth each for the facility and for the use. To avoid this and remarketing, Nuveen will agree.to hold the bonds for a while if unable to remarket them on a 7 -day cycle. Nuveen's rate for holding would be 5% of their after tax cost of funds in addition to the interest rate on the bond issue. The bonds call for a long -term amortization over 19 years, with the provision of calling bonds as rapidly as the Village likes.on a 30 -day notice,.and of course a 7 -day put. Finally a Remarketing /Warehousing Agreement with John Nuveen & Co. provides for their putting an interest rate on the bonds every week and the offer of a secondary market for those bonds in the event they are put back so that Deer- field will not have to use National Westminster's liquidity. Ms. Peterson stated. that considerable research had been done before choosing a Trustee with a .098% fee. Referring to a chart. showing fixed rate bonds, Ms. Peterson pointed out that a somewhat comparable issue in Nebraska had an interest rate of 9.50% and in Rhode Island a rate of 9.60 %. Referring.to a chart, Ms. Peterson discussed fluctuations of interest rates over the past two or three years. Mr. Peterson discussed the Sinking Fund schedule showing debt service levy and servicing fees. He'stated that a rating on the bonds has not been received as the rating services are moving slowly. He hopes a rating will be received within a week or so. The rating service is currently reviewing the credit of the Village as well as the particular structure of this bond issue, and an AA rating is likely. /off e Disciission followed with Mr. Peterson answering questions about National.Westminster Bank, bond rate fluctuations during the past few years, the present bond market, etc. Thereafter, Trustee Marty moved, seconded by Trustee York, to waive the rules to permit passage of the ordinance on first reading. Motion carried unanimously. Trustee Marty moved, seconded by Trustee Seidman, to.pass the ordinance for the issuance of $4.1 million General Obligation Short Term Demand Bonds to finance the Capital Improvement Program. Motion carried as follows: AYES: Marty, Seidman, Swanson, York (4) NAYS: None (0) BOND PURCHASE CONTRACT Trustee Marty moved, seconded by Trustee AUTHORIZE EXECUTION Swanson, to authorize the Mayor to sign the Bond Purchase Contract between Deerfield and John Nuveen & Co. Motion carried on following vote: AYES: Marty, Seidman, Swanson, York (4) NAYS: None (0) FLODSTROM SUBDIVISION (BRICKYARDS) Village Engineer James Soyka reported that LETTER OF CREDIT REDUCTION the developer had completed improvements in the Flodstrom subdivision and is requesting a reduction in their letter of credit in the amount of $88,317.50 with $32,682.50 remaining in the account. Trustee Seidman moved, seconded by Trustee Marty, to reduce the letter of credit for the Flodstrom subdivision in the amount of $88,317.50. Motion carried as follows: AYES: Marty, Seidman, Swanson, York (4) NAYS: None (0) ENTRANCE SIGNS AUTHORIZE PURCHASE OF 2 ADDITIONAL SIGNS Mayor Forrest stated that the signs have been so well received that there were requests for two more for Lake -Cook Road. Trustee Marty moved, seconded by Trustee Seidman, to authorize purchase of two additional entrance signs for $1,400. Motion ..carried as follows: AYES: Marty, Seidman, Swanson, York (4) NAYS: None (0) PARK DISTRICT EASEMENT REQUEST Consideration deferred until next meeting. COLONY POINT /DEER RUN SUBS. ABATE,�IENT OF 1984 TAX LEVY Trustee Seidman moved, seconded by Trustee ORDINANCE NO. 0 -84 -66 Marty, to waive the rules to piss the ordi- nance on first reading. Motion carried unanimously. Trustee Marty moved, seconded by Trustee Seidman, to pass the ordinance abating the 1984 tax levy. Motion carried as follows: AYES: Marty, Seidman, Swanson, York (4) NAYS: None (0). Mana,. .,,er Franz reported that the traffic signal at the Commons was in operation. However, due to an accident to the controller at Waukegan and Deerfield Roads, Vill. Eng. James Soyka stated that it will not be tied into that'signal until a new controller has been installed, probably within 30 days. Thera being no further business to come before the Board, the meeting was adjourned at 11:00 P.M. TEST: Village Clerk APPROVED: PA_A� 1 Mayor a