Hit’s, Misses, and a Great Idea

Hits

Applying for FEMA grant money.

On two 2008 storm water related projects the village is an applicant for FEMA grant money, to the tune of a couple million bucks. There’s also the opportunity to be a sub-applicant to the state for more of the same FEMA money. FEMA has nation-wide funds of about $25 million annually for precisely this type of work, and the state gets a minimum $500,000 extra to dole out as it sees fit. Starting during Mayor Krajewski’s term, our village government got pretty good at writing for grant requests and filling applications (way, WAY harder than it sounds).

Last year all of the federal money was granted, but like I said, our village staff is pretty good at putting together a grant request, plus we have the detailed engineering study and can produce proper plans documenting what’s to be done. FEMA likes that.

In 2007, the state awarded only a bit over $100K of the $500K available. That left almost $400K unused. We could use that each year easy. I emailed VM Pavlicek and asked if we are applying both as an applicant (for federal money) and as a sub-applicant (for state funds), and Megan is supposed to get back to me.

Home Rule Sales Tax (HRST) Hike

Tuesday council approved raising our HRST based take from ½ cent to ¾ cent. Technically, they’re raising it 50%. It does have a sunset clause and “become null and void at the end of the debt service issued for stormwater related improvements.”

Each ¼ cent of Home Rules Sales Tax currently generates $2,300,000.

Misses

Non specific Tele-Tax hike.

They also approved a 1% hike in the telecommunications tax, from 5% to 6%, a 20% raise in the rate.

The proposed increase will take effect on July 1, 2008. Revenue generated by this increase in FY08 is estimated to be $410,000, which will be used to fund expenditures in the Capital Projects Fund. The full year revenue generated by this tax increase for FY09 is estimated to be $820,000.

There is no sunset clause for this tax hike, because it fuels the Capital Projects Fund. The money can be spent on whatever the village says, whether it be sewers or streets...or a new Fleet Services building, a new Police Station, or a new Civic Center.

A Great Idea

Linda Kunze reads minds.

Staff has been working on this one off-radar, but it’s a great idea and deserves to see the light of day.

I’ve been talking about a single downtown waste hauler since the last election; then we can do recycling downtown, cut down on garbage truck traffic, and we could make our alleys and business rear areas look a lot better. The village could also place recycling cans around downtown; permanent ones instead of the temporary ones we see at downtown events.

Talk about a topic no one wanted to hear.

Linda Kunze, Downtown Manager of the Downers Grove Downtown Management Corporation, thinks it’s a great idea, is in a position to do something about it, and is pushing forward. The village has committed to build a total of three common dumpster areas around downtown, to centralize and clean up collection areas, making it very easy for downtown commercial businesses to recycle just like we do at our curbs every week.

This means tons of paper, cans glass, all going to recycling instead of to landfills, and we get cleaner looking alleyways. That opens the possibility for further development. Check Naperville’s downtown: there are a couple areas where there are backyard restaurant patios, and rear-facing clusters of shops on former alleys. I’m not saying that’s what will happen, I’m saying those types of things become possible.

The first centralized collection area goes in this spring, the two additional units the following year. Downtown Downers Grove will get the businesses invested in the concept and use. Council can help move things along by making it clear they support this, and expect businesses to get on board.

This is just one example of recycling bins. Here's another where local artists design and build recycling receptacles out of recycled materials. The possibilities are many.

Bravo, Ms. Kunze.

Best Christmas card this year...

...from the residents of 5300 Walnut, Cameo Condos. Sent nominally by Lorraine Tresnak, it was a communal card with a 6 page insert:

"Dear Mark,

As the holiday season approaches we here at Cameo wish to extend our heartfelt thanks and appreciation for all the time and effort you devoted to our cause.

Best wishes and season's greetings to you and your family."


It's signed by a bunch of the residents who live there. As sweet as any holiday treat I'll have this year, that's for sure. Thank you all, and you're welcome!

The Bullet We Dodged

Lest you think the village could have any real control over a C&D facility, see what Woodridge is going through...

So when do we say "That’s enough"?

Like most guys, I subscribe to the hypothesis that when a project is 80% done, it’s done. From then on, it’s just clean up. Employing the rule of 80/20 to the stormwater issue, we should be able to get to that 80% finished plateau for about $68 million. The last 20%, the clean up, will cost the remaining $272 million.

So I guess my question is this:

Do we really want it all done? Do we really want every possible problem, no matter how small or how expensive it may be, to be completely addressed? Maybe there is just some areas of town, like 40^th and Glendenning, that need to be open unbuildable land forever, regardless of how much developers want to build. Maybe these are areas where public condemnation needs to occur for the better good. I can think of a couple homes that should be bought by the village and torn down, and the lots left empty.

I know: Mark, getting cold feet? No stomach for the tough decisions?

There’s plenty of cheap shots to be taken on this one, but I won’t be taking them on anyone thinking maybe $340 million is a little pricey. Maybe, like our other taxing bodies have found along the way, there’s a plan B that needs to be examined before we jump headlong into a 30 year commitment that may end up with at least $300 million in additional interest costs.

I'm in for the 80% done at 20% cost. If only that worked in real life, eh?

Definition Update

It appears the new definition will be on the 1/8 council workshop agenda.

C&D Update: Winding Up Some Loose Ends

Tonight the resident volunteers of the Plan Commission voted to send a positive recommendation to council to adopt into our muni code a new definition of "recycling collection facility". This effectively mirrors the state definition, which is very good for residents here in our village. Village also defers to the Illinois Environmental Protection Act for further defining, as separate and distinct, a "construction and demolition debris facility" and a "transfer station". This is a 180 degree turnaround on a definition that originally said they were the same thing, and avoids opening a potential Pandora's Box of problems for the village. In addition to the Plan Commission, the resident volunteers of the Environmental Concerns Commission acted in a key advisory role to village council on this matter.

Recycling collection facility. A facility or site designed for the purpose of receiving articles or materials limited to non-hazardous, nonspecial, homogeneous, nonputresable materials such as dry paper, glass, cans or plastic , which are to be transported to another location for distribution or processing, which may or may not be the principal use on the lot where located. The term "recycling collection facility" as used in this Zoning Ordinance shall not include general construction or demolition debris facilities as defined in 415 ILCS 5/3.160, and transfer stations as defined by 415 ILCS 5/3.500 , facilities located within a structure principally devoted to another use, facilities temporarily located on a lot under authority of a temporary uses, and facilities for collecting used motor oil which are necessary to an automobile service station.

The modifications clarify that construction and demolition debris collection facilities and garbage transfer stations as defined by the Illinois Environmental Protection Act are not included as a permitted or special use in the Village.

This will be work shopped at the council on 12/11, and I expect council will approve the following week at the regular village council meeting on 12/18, so I do not anticipate any further action being required. (I'll post up if that changes!)

This ends a long period of uncertainty for several hundred residents of Downers Grove, and effectively commits our local government to observing and adhering to the intent and spirit of the state Environmental Protection Act.

There's plenty of you out there that know what's up when I say thank you for your help, for your emails to council, your voice, and for your kind words of encouragement. It was very gratifying to see residents and business alike, from many different perspectives, listen, look critically and thoughtfully, come together on a consensus, and make a difference.

Finance it!

This week council heard a Northern Trust presentation titled “Stormwater Financing Analysis”. What Northern Trust floated was the idea of not dedicating $6 million or more each year for Stormwater projects, but instead financing it with:

• $6 million a year in loan (via bond) payments each year for 30 years for floating $180 million in bonds that would give us $108 million in funds for projects.
• $4 million a year in loan (via bond) payments each year for 30 years for floating $120 million in bonds that would give us $72 million in funds for projects.

They also floated the concept of Non-Self Supporting Debt Outstanding as the correct debt figured against the Village EAV. There is ‘only’ $5 million in that kind of debt, because the other $36+ million in debt is paid for by the Parking Fund (for Series 1999), the TIF district (for Series 2000, 2001, 2003A), and property taxes (series 2002, 2005).

This is the first time I’ve ever heard about recategorizing debt into Self-Supporting and Non-Self Supporting types for debt ratio purposes here in Downers Grove, probably because our local government has slid funds around as needed to cover abatements and debt reduction in the past, making 'self-supporting' and 'non self-supporting' pretty much a moot point.

Note: The concept of “self-supporting” debt is that borrowed bond debt will fund projects that generate enough revenue to pay the debt service obligations. Examples of this type of debt include Tax Increment Financing (our downtown), Special Service Assessments (brick streets) and the Water Fund. GO self-supporting debt payments are a general Village obligation and must be paid from the property tax levy if revenues don't meet debt service. Here in Downers, we’ve had to rely on property taxes to make up shortfalls in several “self-supporting debt funds”, so it doesn’t always work out in real life like it’s supposedly does on paper.

The net result is hey! We can borrow a bunch more money than we thought and not wreck our credit rating.

They also went over spreads, rate lock-ins, and interest only payments to start (yeah, I know that sounds like sub-prime and Alt-A lending come-ons), and pitched council on refi’ing Series 1999, 2000, 2001, and 2003A bonds at a lower rate, claiming that would save $173,134.00 -which is a good deal if true.

I was surprised at the 30 year bond terms. Usually muni bonds are for 20 years or 10 years, but the spokesman said the rates were not much different, although he did not quote any TIC (Total Interest Costs) on comparable 20 and 30 year loans.

Bonding for what?

At the 11/6 council meeting, it seemed like every possible fee and tax was being raised so flooding and streets could be addressed. But the net result is $6 million for 2008 funding. To paraphrase Mayor Sandack and Commissioner Durkin: "That doesn't get it done, we need to do more faster now, when the money is cheaper, and we need to borrow." Ding! They get it, but it's at the expense of the municipal center. Muni complex? New Police, Fleet Services, and Village Hall buildings?

So what staff wasn't talking about on the green sheets, is borrowing. Thing is, it's the textbook example of when it is correct, even best to borrow. "Streets and Stormwater" if you will (flooding is the symptom) have to get done as quickly as possible. Everyone on staff and council takes turns bashing the inattentiveness and sloth of the past 25 years of local government; they hid their heads in the sand and ignored two huge growing problems. So now it's time to change that. These improvements are permanent and have every reason to be have payment spread out over 20 years or more. By borrowing, we can fix the problem fairly quickly. This is health safety and welfare at it's most basic.

Replacements for existing structures, even badly needed ones, are next in line, not first in line for available funding.

Commissioner Tully and Schnell expressed concerns that delaying a new village hall creates the same type of problems delaying streets and sewers did; makes it much more expensive to 'fix' later. It's a harsh fact, even with all the new taxes, fees, you name it, our local government will have to make do for a bit, just like residents have done for so many years. waiting for decent streets and decent stormwater measures. Interest costs are at record lows right now. Money won't get cheaper so the time to do it is now.

Problem: we can only borrow so much. The debt ceiling put into place is 3% of the Village EAV. Right now we're at about 2%. The means we could borrow up to $69 million dollars, but we already have $41 million in debt now.

On Tuesday, November 20th, council will hear from bonding providers. This may get interesting...

2008 Budget Workshop

A couple observations for now:

Hybrid Infrastructure Funding

I was saved all of my major talking points. Didn’t have to bring them up at all. Here’s why: Sandack and Durkin have correctly zeroed in on the need for a hybrid of funding sources that includes borrowing in addition to a full plate of tax and fee hikes. Some residents may speak about the fairness of this tax and that fee, and they may have legitimate points, but we don’t have the luxury of time to lock in funding, and the village has to get going on this now. Several projects that should have been done this year were sidelined for 2008. Project deferral cannot continue to happen. As residents, we didn’t pay for what needed to be done for the last 20 years, so now we have to pay for that and what needs to be done once back to square one.

Sandack pushed staff on how much could be done each year; what was the upper limit of staff’s capabilities to finish projects and check them off the ‘To Do’ list. Durkin was right there too. Durkin even commented on how quiet I was all day. They both did a credible job voicing a willingness and a need to focus on job #1.

Ron and Sean, on this very important multi-year budget item, and for this critical resident need, get it. Flooding and infrastructure come first for CIP priority. Period. Everything else: get in line.

Government Center

Staff wants $850,000 budgeted for the first phase of preliminary design (site and layout mainly I think) for the new police station and Civic Center. That’s $850,000 that could be spent on flooding. Tully spoke to not letting another need go unaddressed too long. Speaking as a resident, the past unaddressed needs of residents, that directly and negatively impacts our health, safety, and welfare, is far more important than a new Government Center. Does the Police Department need a new facility? I believe them when they say they do; I don’t have the specialized information as to what the needs and shortfalls of the current facility are.

New Village Hall? I won’t argue the need here, but I will say this: the current facilities are being maintained, and needs are being budgeted for on an ongoing basis. My one car may be 10 years old, but until the maintenance costs more than the payment and maintenance on a new one, I think the old one is a keeper. I’d like a shiny new one with all the go-fasters, but I have college educations that are front and center that are more important.

So it is with the new Government Center. Sandack and Durkin heard what residents said last election loud and clear, and it was not 'build a new muni center', it was 'FIX OUR STREETS AND FLOODING!!!!' We won’t have the cash to do both, we will need to borrow to get ‘bundles’ of infrastructure projects funded and finished as fast as possible, and we should not drain off needed funding for projects that can wait.

I suggested at the budget workshop that the Government Center be a topic for the 2008 Total Community Discussion (TCD 3 or whatever it’s called), so residents can weigh in and be heard. The ECC should also weigh in with ideas that can contribute to reducing the costs of heating and cooling such a large facility, with ideas like passive solar, thermal pumps, green roofing, even small wind or active solar should be on the table as discussion points for design elements. The ADRC should weigh in with suggestions for a design theme fitting for our downtown, and provide some early input. And I think we our village should reach out to some of our many expert architects for ideas and input. This is an item that we do have the luxury of time for. The current facilities may be outdated and in need of replacing, but it needs to be done in a manner that is cost efficient, needs efficient, and energy efficient.

Next up is figuring out how much all of this is going to really cost us. Now, most of what you read about the budgeting process best practices say it starts with the strategic plan (which our local government didn't get around to updating this year) while at the same time getting a rough ball park on what would be in the revenue pipeline; THEN figure out what gets what. Instead, we're relying on last years strategic report (maybe not a bad thing), with the process looking like figuring out what local government wants to do, then figuring out how much we have to pay for it all.

Not many of us have the option of simply letting our boss know how much extra they'll be paying us this year so we can deal with state, county, and local tax and fee increases, so I hope council keeps this in mind when they get down to brass tacks.

Proper Definitions

On my way through researching the legislative history and intent of 415 ILCS 5/22.38, I came across two definitions that were left out of the current definitions section, but that our village can and should use. That makes a total of three definitions that should be written into our muni code, and there should be no hesitation to write more as needed.

Keep this in mind: the village could have simply adopted by reference the Environmental Protection Act and/or the Environmental Safety Laws in their entirety. This still stands as an example of our local government almost going off a cliff and creating problems instead of solving them.

Recycling Collection Facility. A "Recycling Collection Facility" is a site or facility that accepts only segregated, nonhazardous, nonspecial, homogeneous, nonputrescible materials, such as dry paper, glass, cans or plastics, for subsequent use in the secondary materials market.

Straight copy from 415 ILCS 5/3. 375. That's one.

Commercial general construction or demolition debris recycling center. "Commercial general construction or demolition debris recycling center" means a site or facility that accepts from more than one source only general construction or demolition debris that is generated off-site so that recyclable materials will be separated and removed for subsequent use in the secondary materials market.

The current Sec. 3.160 definition of commercial general construction or demolition debris incorporates 5/3.78a. Take a look at the header for that section (415 ILCS 5/3.160) (was 415 ILCS 5/3.78 and 3.78a), so there is a rational basis for using this second separate definition, which is 5/3.78a. That's two.

On-site general construction or demolition debris recycling center. "On-site general construction or demolition debris recycling center" means a site or facility used by any person accepting only general construction or demolition debris that is generated by that person's own activities at the site or facility or transported within or between sites or facilities owned, controlled, or operated by that person, so that recyclable materials will be separated and removed for subsequent use in the secondary materials market.

That's a straight copy of 415 ILCS 5/3.78b new. That's three, that's a wrap for now, and our local government can go back to fixing our streets and flooding.

The New Ethics Ordinance

The actual ethics part of the proposed ethics ordinance is a solid interpretation of ethics language supported by the Illinois Attorney General and the Illinois Municipal League. There does not appear to be any trap doors or hidden problems here, albeit it is still missing the Ethics Committee or Commission.

We still need an Ethics Commission.

Watershed Improvement Plan 2007 - Adopted.

The full report is in 15 parts.

Ad Hoc Committee on Housing

Moving forward. Council Resolution 00-02918.

The enabling resolution would provide for a final report to be provided to the Village Council on or before January 22, 2008, at which time the Ad Hoc Committee’s work would conclude unless further extended by action of the Village Council.

Copies of the individual recommendations of Commissioners as the Ad Hoc Committee’s composition have not been attached because several were verbally received."

The size of the committee will be eleven people, will have a specific make up,and will be chaired and co-chaired by council members. Unless my ears deceived me (and they did not) Neustadt and Durkin volunteered to be on the committee several weeks ago. Both good choices: Geoff Neustadt and his wife lived through the nightmare of finding a home they could afford here in Downers Grove where they both work. Sean Durkin works for a bank that has a housing assitance program for it's employees, and also has access to (public) financial information, organized so it can quickly be brought into the discussion. Between the two they have a reasonable perpective and can bring usefull information and insight to the process.

Word to the naysayers...

Government "interferes" in housing substantially already. The home loan tax exemption is just one example.

Bernanke is directly intervening to fend off a meltdown of the mortgage industry due to sub prime and Alt-A lenders moving about $2.5 trillion of questionable mortgage backed securities onto banks and pension funds. Can you say Bear Stearns?

First time buyers,in recent years, have been pushed to subprime lenders, paying interest rates and fees above what a free market would dictate. A great deal for the big buck lenders like Credit Suisse that fund some notable subprime lenders, and a great deal for the mortgage writers who make a lucrative living at it, and for the hedge fund managers that ride the edge of disaster with investor money. Bad for everyone else. It's a hot potato that has started to go supernova.

A well designed IHDA program would level that playing field, not interfere with the market or dictate housing prices; just make it possible that a young family, buying their first starter home, won't get gouged by excessive rates and fees.

The IHDA, not the village, provides the financing mechanism, and markets the MRB’s, to help first time buyers buy homes. The village has no fiscal responsibility. None. This is a bit of Home Rule gravy that the village can ladle out every year as council sees fit. This year, VCT; next year, whatever the council decides.

There are over 120 3+ bedroom, 1+ bath, single family homes on the market here, priced $325,000 or less, that no one is buying. That means we DO have a housing problem- we have too many starter homes and not enough starter home buyers. At this point, the problem isn't on the supply side, it's on the demand side. We need more buyers who can buy DG homes. NOTE: This info was culled from realtor.com, and may include some surrounding or unincorporated areas. Another good reason to have a realtor on the housing ad hoc committee; they could quickly cull that number down to an accurate DG only list.

Take one of those new jobs VCT creates, marry it to a newly hired DG firefighter, and you have a middle income couple looking for a home here, where they work. Potential buyers. With an effective IHDA program eliminating thousands of dollars in hidden and open fees, and offering a market competitive fixed rate loan instead of an interest only time bomb, or a balloon or ARM, if that couple scrimps, and denies themselves some luxuries, they can just barely afford to buy that 3 bedroom 1 bath first home. They can start on raising a family, improving their home as they go, and contributing to the health of our community.

Instead of an hour each way commute, they drive less and save on fuel, and pollute less. They have more time with their children, or fixing up their dream home, or getting involved in the PTA. And on and on. They aren't flippers looking for a quick kill; they're looking for a friendly place where they can belong.

Doesn't that sound just a bit familiar to all of us? Didn't most of us go through this?

The same market price dynamics still apply. The same realtor commission structure applies. There is still a loan for a house purchased at a price set by the market and nothing else.

What is there to object to?

And another thought...

We haven't seen the bottom of the housing market yet. The experts say 2-4 more years of pain. That's good news for middle income housing; prices should continue to drop, and that maybe addresses the problem for us, at least for a while.