Meeting minutes for the September 10, 2009 Park Board “study session” included a presentation of the Independent Auditor’s Report of the FY 2009 Comprehensive Annual Financial Report (CAFR).
[Brian LeFevre of Sikich, LLP] reported that both the District’s Golf Course and Hopkins enterprise funds were in a negative working capital position requiring them to borrow cash from other District funds.
LeFevre noted that these deficits could affect the wellness of other funds.
Commissioner Mason inquired how the losses compared to last year. LeFevre stated that they were less than last year, but recommended that the District review and measure the full operating cost of the enterprise funds to manage expenses.
LeFevre explained that due to the decline in market value, additional contributions will be required of the District to the IMRF Fund in the next few years. In FY 2009, funds were transferred to the IMRF Fund from the General Fund to place it back in balance. [Emphasis added.]
A bit later in the program, Aquatics Center financing options were discussed.
In option one the District could acquire an alternate bond of $14,250,000 without going to referendum. Small stated that the District is limited in the amount of debt service it can levy. Small stated that the margin column indicates the funds that would be available for capital projects after payment of the bond each year. The margins are so small that the District would have to restructure its capital projects and would find itself in a difficult situation if major repairs were needed throughout the District.
In option two, if the referendum was successful, the District would issue a $15,000,000 in bonds for 20 years. The preliminary debt service schedule shows a tax impact of approximately $100 on a $200,000 home for a total of 20 years. Small stated that the EAV growth was estimated at 4.25% for 2010. The Preliminary Debt Service schedule was prepared by Bernardi Securities…
Option 3 showed a preliminary debt service schedule for a “Build America” Bond. The “Build America” Bond is a federal program intended to assist municipalities. The District would pay the owners of the bond a higher interest rate, but would then be rebated 35% of the interest cost by the Federal government.
Director Capek stated that Option One would lock the District’s finances for more than 20 years and not allow for any capital projects. The District initiated a five year capital plan to repair and replace facilities and equipment throughout the District. [Emphases added.]
During the October 8, 2009 special meeting, all commissioners were present and voted unanimously to pursue option 2 by placing the proposition to issue general obligation park bonds on the February 2 ballot.
10 comments
Comment by Mac McIntyre on January 14, 2010 at 5:26 pm
A citizen at last night’s meeting asked how much the district could borrow without going to referendum. The answer was far less specific than what is in the minutes reported here.
It was also stated that the EAV growth was projected at 0% for 2010 and would not reach 3% until 2017. Those numbers must have changed since September.
Comment by yinn on January 16, 2010 at 11:07 am
Really…very interesting.
Comment by Ivan Krpan on January 16, 2010 at 1:34 pm
There is not much optimism in the development sector right now, neither commercial or residential. This would be a great time to have a crystal ball to tell the future but it all begins with the financial institutions.
I was speaking with a loan officer from a local bank (one that recently migrated to DeKalb/Sycamore) and he was telling me that the officers within that bank figure it will be about four to five years before the financial industry actually loosens up a bit with confidence to lend again for homes and development.
His bank won’t even talk to you about a lone unless your credit score is at 868. It will be a very long time with banks this confident. Any government agency looking to take out big bonds right now are crazy. There is no way to tell the taxpayers what is going to happen in the next 2 weeks, 2 months, 2 years let alone 20 years right now. We all need to develop some patience and ride this out just a bit longer especially those who are looking to hit property owners with tax increases for wish and want lists. It is going to be difficult enough finding revenue to take care of necessity items.
How come many in government do not see this yet or refuse to believe it?
Comment by yinn on January 17, 2010 at 5:50 am
Really good article by Robert Reich explains why Main Street will not recover until the feds subdue the gambler-banksters of Wall Street.
http://tpmcafe.talkingpointsmemo.com/2010/01/14/why_obama_must_take_on_wall_street/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+tpmcafe-main+(TPMCafe)&utm_content=Google+Reader
As for why folks in government aren’t getting it, I think it’s because of the company they keep. Lobbyists, special interests and other cronies.
Comment by Kay Shelton on January 17, 2010 at 9:21 pm
Having an 868 credit rating is so high that very few people will attain it. Houses will be sitting empty for a long time with a situation like that.
Speaking of loans, Grameen Bank now does microfinance in the United States:
http://www.grameenamerica.com/
The drawback is that someone needs to come up with $2 million in start-up capital.
Comment by yinn on January 18, 2010 at 7:22 am
Did anyone see the Park District Treasurer’s Report in the weekend Chronicle?
Comment by Ivan Krpan on January 18, 2010 at 12:55 pm
I might have but not realized what I was seeing. What was pointed out besides the fact that nothing major for the Park District is making money. The fact that they did slightly better than the year before but still lost big at both golf courses and the pool.
Is this the report you are referring to yinn?
Comment by yinn on January 18, 2010 at 2:14 pm
Yup. I was also looking at the DPD’s debt service.
Comment by Ivan Krpan on January 18, 2010 at 3:22 pm
Really does kind of prove that they are using this referendum in order to create a revenue stream.
Taxpayers get stuck paying for 100% of the aquatic center, TIF gets close to 50% worth of the properties park district increase of dollars due to the referendum if it passes, and the Park District gets to keep all of the dollars that are brought into the aquatic center for labor and other pet projects. I doubt that they will use any of these dollars for real long term maintenance. Why would they when the taxpayers are willing to keep giving them referendums to build new?
This of course is what would happen only if the pool referendum passes. Voters of DeKalb are getting smarter. They’ve received a pretty costly education in how different taxing bodies abuse and spend the taxpayers hard earned money. We will see many voters get up and most of them will only to vote NO on this ridiculous referendum.
Yinn, pretty much all of the financial reports out of the Park District explains why they are going to the taxpayers and not able to pay this aquatic center off with user fees. The Park District is losing users and probably due to high user fees. Like the aquatic centers fees won’t increase. They will at least double them by the second season if this is allowed to happen.
Comment by Ivan Krpan on January 18, 2010 at 3:27 pm
Heck, using Park District numbers. Current user numbers of the current pool would indicate that user fees wouldn’t even come close to paying off a bond for just a normal pool replacement. This isn’t about just an aquatic center Yinn, it is about revamping the entire Hopkins Park along with allowing the Park District to throw in the aquatic centers daily users fees to help bypass the tax caps placed on the Park District.
Leave the TIF Districts and utilize all of your property taxes annually. Why are you so hell bent on helping TIF? Could be the ties and committments made by Park District employees who also sit on the Chamber of Commerce, Renew:DeKalbSchools and especially Renew:DeKalb which these TIF funds are primarily being used for today. Follow the money citizens of DeKalb. Follow the money.
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