FINANCE AND ADMINISTRATION
MEETING MINUTES
Monday, July 27, 2009
Minutes of a 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 July 27, 2009. CALL TO ORDER: Time: 5:30 p.m.
ROLL CALL: |
MEMBERS: |
|
Drolet J. |
X |
|
Chairman Bennett |
X |
True |
X |
|
Albrecht |
X |
McCoskey |
X |
|
|
|
Alderman Medford |
X |
STAFF LIASON: |
Dean Rich |
X |
Alderman N.Drolet |
X |
|
Walter Denton |
X |
Alderman Grogan |
X |
|
Pam Funk |
X |
Alderman Cozad |
X |
|
Sandy Evans
|
X
|
Alderman Reckamp
|
X |
Approval of Minutes: May 26, 2009
Item A: Amend Jack Schmitt Economic Incentive Agreement:
Director of Finance presented a request by Jack Schmitt to amend his sales tax rebate agreement due to unforeseen cost escalation. After much discussion the committee asked for more detail on the actual cost increase. The Director of Finance provided the following information to the committee via email: The original proposal was approved 17 November 2008 and significant events have since impacted the project. General Motors (GM) declared bankruptcy and announced closing of hundreds of its dealerships nation wide. Jack Schmitt Cadillac was spared due to its long history of excellent sales and service. However the new GM declared the Cadillac dealership must be an upgraded stand alone in both sales and service.
~~~~~~~~~This action forced Jack to find a new location for the Suzuki and Mahindra dealerships. He is working to purchase the Enterprise Truck Rental facility next to John's Car Wash. Jack currently owns the land but has a long term lease with Enterprise who built and owns the building. Jack proposes buying the building from Enterprise for $700,000 and spending another $550,000 in converting the building to car dealerships complete with service bays. Converting the lighting from security and safety to dealership display level will cost $170,000 and Franchise Specific Image Signage and Fascia Requirements will cost an additional $125,000.
~~~~~~~~~ The Nov 17, 2008 agreement was based on a cost of $1, 025,000 to build a Cadillac show room and establish 2 new dealerships in the older building. Under the new package Jack will bear the cost of upgrading the Cadillac facility to the new GM standards but the new Suzuki/Mahindra location will cost $1,545,000, an increase of $520,000. Mr. Schmitt asked for a 50/50 split of this additional cost and staff negotiated and recommends a $200,000 increase.
~~~~~~~~In addition to the cost details provided above, the question was asked as to the amount rebated under the original 1997 agreement. ~Since Oct 1999, when the original rebate started, the City has received $1,287,954 and Mr. Schmitt has received $276,000 (partly due to the closing of Oldsmobile by GM). The remaining $24,000 will be paid this Fiscal Year.
~~~~~~~~ In Summary the amended ordinance will replace the $250,000 amount per dealership with $350,000 and all else will remain the same. This is~a 50/50 split of the city sales tax generated by sales of Suzuki and Mahindra over a 10 year period up to a maximum of $350,000 per dealership. In addition we will receive 100% of the City sales tax generated by the renovated Cadillac Dealership and we estimate that to be between $1.5 and 2 million dollars over the period.
Item B: Discussion to Expand Business District:
The business district discussion was postponed until next month so PGAV can complete the proposal. Basically it will cover what were originally the Shoppes at Greenmount area. The business districts allow hotels and restaurants to collect an additional 1% on sales to offset Special Service Area bond cost. SSA cost place businesses in a non-competitive environment in the area.
ADJOURNMENT: 6:00 p.m. PREPARED BY: Dean Rich
| 
