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FINANCE AND ADMINISTRATION
SPECIAL MEETING MINUTES
Thursday, May 14, 2009
Minutes of a special meeting of the Finance and Administration Committee of the City of O’Fallon, held in the Mayor’s Conference Room, City Hall, 255 S. Lincoln, O’Fallon, Illinois on May 14, 2009. CALL TO ORDER: Time: 6:00 p.m.
ROLL CALL: |
MEMBERS: |
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Drolet J. |
X |
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Chairman Bennett |
X |
True |
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Albrecht |
X |
McCoskey |
X |
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Alderman Mouser |
X |
STAFF LIASON: |
Dean Rich |
X |
Alderman N.Drolet |
X |
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Walter Denton |
X |
Alderman Reckamp |
X |
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Pam Funk |
X |
Alderman Faulkner |
X |
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Sandy Evans MJ Hutchinson |
X X |
Others Present: Mike Bowen, Steve Adams, Mary Schmidt |
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Item A: Library Bond Issue: Discussion was brief with details of Mr. Ohlendorf’s bequeath of $2.2 million and the fact that the money would be invested to pay for a $2 Million bond. There was no questions or comments.
Item B: Ordinance Review and proposed Refinance: Director of Finance reviewed the city’s current bond status starting with the 1998 $7.4 Million sales tax bond. (Attachment 1) Starting with the 2002 Public Safety Facility and Prop S bonds up to the Library issue was discussed. (Attachment 2) There was a more detailed conversation on the Telephone Tax and it becoming the Simplified Municipal Telecommunication Tax (SMTT). When the SMTT was designated by the State of Illinois, the City raised the rate by adding 4% to the original 1%. This 4% was put in place to support the Family Sports Park and specifically to purchase 20 acres to finish the 200 acre plot contained
between the SSX railroad, Obernuefemann Road and Venita Road. At the council meeting approving the SMTT a floor vote was made to place a 10 year sunset clause on the SMTT. An unknown consequence of the sunset clause resulted in the tax not being evaluated as a permanent tax for bonding purposes. With an ordinance change to lift the sunset on the SMTT and the resulting bond upgrade from AA- to AA it became possible to refinance.
- Mary Jeanne Hutchison, Parks Director, discussed the economic benefits of the new Family Sports Park. She is currently booking the four baseball fields for regional tournaments throughout the summer and with four additional fields she will be able to book State and National tournaments. Each tournament participant spends in the $50- $75 range per day in the local economy. The current limited tournaments have already created a very positive interest from local businesses. Mary Jean emphasized that while weekend tournaments are the economic generators; the park is and always will be a community park and a great asset to the residents of O’Fallon. It is not planned or anticipated that the park will become economically self sustaining.
- Mike Bowen from Bernardi Securities discussed the status of selling the current bonds. Demand is good for both issues. The company has been looking at the new Build America Bonds (BAB) being introduced under the President’s new economic development stimulus plan and O’Fallon seems to qualify. Under the BAB program, bonds are sold taxable but the government rebates 35% of the interest back to the issuer, in this case, the City. The Library and $6 Million of the refinanced bonds would qualify and would save the city money. After more discussion of BAB (Attachment 3), the committee agreed that Bernardi should split the sale between conventional tax free and BAB to maximize the City’s return.
- After reviewing the sunset clause, the past history of the City Bond issues, current status, the new bond rating and the positive affects of the BAB, Alderman Bennett made the motion to continue with the repeal of the SMTT sunset clause and the sale of bonds. Second by Albrecht. All Ayes.
ADJOURNMENT: 7:35 p.m. PREPARED BY: Dean Rich
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