Village of Vernon Hills Committee of the Whole met April 5.
Here is the minutes provided by the Committee:
President Byrne called the meeting to order at 7:18p.m.
In Attendance: President Byrne, Trustees Koch, Grieb, Hebda, Marquardt, Schultz, and Williams, A quorum was established.
Also present were: Village Manager Kalmar, Assistant Village Manager Carey, Chief Fleischhauer, DC Davies, Finance Director Larson, Assistant to the Finance Director Bourdeau, Building Commissioner Atkinson, Public Works Director Brown, Attorney Brankin, and Recording Secretary DeAnda.
1. Approval of Committee of the Whole Meeting Minutes of March 21, 2017
Motion by Trustee Marquardt, second by Trustee Schultz, to approve Committee of the Whole Minutes for the March 21, 2017.
Roll call vote:
Ayes: 6 - Grieb, Koch, Hebda, Marquardt, Schultz, Williams
Nays: 0 - None
Absent and Not Voting: 0 - None
Motion carried,
2. Reserving Volume Cap in Connection with Private Activity Bond Issues (FDLARSON)
Finance Director Larson stated under Section 146 of the Internal Revenue Code of 1986, the Village is allocated an annual per capita amount for Private Activity Bond use. Private Activity Bonds (PABs) or Industrial Revenue Bonds (IRBs) are tax exempt bonds issued on behalf of businesses engaged in the manufacture or production of tangible personal property. A wide variety of businesses can qualify under these guidelines, including non-traditional manufacturing operations such as food processing or printing firms, PAB's can also be utilized to finance the acquisition offixed assets such as land, buildings, or equipment.
The Illinois Private Activity Bond Allocation Act provides that a home rule unit of government may transfer its allocation to any other home rule unit of government, the State of Illinois or any agency of the State, or any non-home rule unit of government. The Village has received a request to cede (transfer) its Private Activity Bond allocation to the Lake County Private Activity Bond Clearinghouse Pool. If the Village Board elects not to reserve the volume cap in 2017, the $2,631,400 in bonding authority that was previously allocated to the Village would revert back to a State of Illinois pool that would be eligible for allocation by the Governor's office.
The Lake County Private Activity Bond Clearinghouse Pool was founded in 2001, when Lake County, Lake County Partners, and the Lake County Municipal League entered into a joint agreement with interested Lake County Home Rule Communities to structure a program that allowed municipalities to pool their caps together to assist developers to fund projects in Lake County. The Clearinghouse is hosted by a home rule municipality, Buffalo Grove, in order to maximize the roll-over and transfer benefits in accordance with the State guidelines. Since its inception, the Lake County Private Activity Bond Clearinghouse has funded nearly $200,000,000 in local projects, which has resulted in the construction of 360,000 square feet of new manufacturing space, the creation of 648 new manufacturing jobs, renovation of 1,600 multifamily dwelling units, the purchase of an estimated 251 homes by “first-time homebuyers,” expansion of a Montessori School and construction of a new solid waste disposal "cell.'
Pursuant to Federal law, home rule units of government are allocated an amount of $100 per capita for 2017. According to the State of Illinois' Guidelines and Procedures for the Allocation of Private Activity Bonding Authority, the 2017 allocation (bonding authority) for Vernon Hills is $2,631,400; which is based on an estimated population of 26,314.
Each community that participates in the Clearinghouse Pool may receive a 0.5% fee for their cap when it is allocated to fund a project. If the Village of Vernon Hills' cap is allocated, the fee revenue to the Village will be approximately $13,157 ($2,631,400 x 0.5% = $13,157). There are no out-of-pocket costs to the Village to participate in this program; however there is potential to gain revenue in the event that the Village's cap is allocated to a project.
Historically, the Village has transferred its allocation to private entities on two occasions. On December 19, 1995, the Board authorized Thai Shin of Swagger Foods to issue the Village's allocation of up to $2,250,000 of tax exempt bonds to provide financing for acquiring their building at 900 Corporate Woods Parkway. Subsequently, on December 29, 1997, the Board authorized an "inducement resolution" to allow Accurate Transmission to issue private activity bonds in an amount not to exceed $7,000,000 to finance their 95,000 square foot building at Allanson and Washington Road in Mundelein,
Since the Village became home rule in 2011, we are eligible to transfer our funding allocation to another unit of government or state agency. For the last two years (2015 and 2016) this allocation has been transferred to the Lake County Partners Private Activity Bond Pool.
It is recommended that the volume cap for the Village of Vernon Hills be reserved for Private Activity Bonds and allow for the transfer of this cap to Buffalo Grove for the Lake County Private Activity Bond Clearinghouse Pool.
Motion by Trustee Schultz, second by Trustee Hebda, to direct staff to draft an ordinance to reserve the volume cap for the Village of Vernon Hills for Private Activity Bonds and allow for the allocation of this cap to the Lake County Private Activity Bond Clearinghouse Pool.
Ayes: 6 - Grieb, Koch, Hebda, Marquardt, Schultz, Williams
Nays; 0 - None
Absent And Not Voting: 0 - None
Motion Carried.
3. Adjournment
Motion by Trustee Williams, second by Trustee Schultz, to adjourn the Committee of the Whole.
Roll call vote:
Ayes: 6 - Grieb, Koch, Marquardt, Schultz, Hebda, Williams
Nays: 0 - None
Absent and Not Voting: 0 - None Motion carried.
Meeting adjourned 7:24 p.m.
http://www.vernonhills.org/AgendaCenter/ViewFile/Minutes/04052017-366
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