April 2015 Bond Referendum
Watch for Village Referendum Question on April Election Ballot
As a non-home rule community, the Village of Glencoe requires voter authorization to issue long-term capital bonds. In determining what long-term capital needs should be the subject of resident referenda, the Village Board has for many years applied a number of benchmarks. Among these is an annual review of the long-term capital needs of the Village in order to appropriately maintain our infrastructure and determine which projects should be initiated in the current year.
As part of its study of the Village’s capital needs, the Village Board considers factors that include engineering best practices in order to derive the longest useful life for infrastructure including streets, sidewalks, storm and sanitary sewer maintenance and upgrades, as well as major projects like water system maintenance and improvements. Likewise, these same factors are used to plan for the improvements necessary to keep Village owned buildings functional.
These benchmarks are particularly appropriate, for example, in determining storm sewer improvements. Much of the Village’s basic storm sewer system was installed between 65-100+ years ago. By the mid-1980s, it became apparent that the Village’s storm sewer system, as then in existence, was inadequate to handle the volume of storm water for a fully developed residential community. Beginning in 1988, the Village Board initiated a long-term program to improve storm water management through projects that were to be funded in manageable portions. The Village has utilized an extensive study and engineering process in developing and implementing necessary storm water improvement projects. These projects were prioritized based on the severity of structural and street flooding that would be eliminated, the number of homes affected, as well as the improved access of Public Safety and our residents through improved street and property conditions. Since 1988, the Village Board has recommended and our residents have approved funding for 14 major storm sewer projects.
When considering whether long-term capital projects should be financed by bonds, the Village Board has used the benchmark since 2009, that at any given time a debt ceiling of $424 per $10,000 of total property tax should be utilized, the historic high point for debt incurred by the Village and applied to property tax bills of residents. Adjusted for inflation, this figure in 2015 dollars equals $458 per $10,000. This concept seeks to hold the property tax used to repay bond debt constant over the near term, at or below $424 per $10,000 of property tax paid. Thus, as the Village repays a series of bonds, the Village Board can then recommend replacing those bonds with new bonds to be used for the next group of long-term capital projects, while seeking to maintain the cost of all outstanding bonds at or below $424 per $10,000 of tax.
It is estimated that the projects that are the subject of the April referendum, when combined with the current outstanding Village bond debt, will raise the per $10,000 of tax from $217 to $288, which is less than the non-inflation adjusted benchmark of $424.
Based upon a multi-year study and ongoing review of the Village’s long-term capital needs, the Village Board voted to adopt a Resolution placing two referendum questions on the April 7, 2015 General Election ballot to issue $10 million in new bonds to fund infrastructure, facility improvement and maintenance needs.
The two referendum questions ask residents to fund the following:
• Storm sewer improvements and sanitary sewer maintenance upgrades ($6.5 million)
• Village Hall HVAC improvements ($2.5 million)
• Street resurfacing and sidewalk replacement work ($1.0 million).
In determining whether to place the referendum questions on the ballot, the Village Board heard evidence from staff and several expert consultants, including Engineering Resource Associates (storm water) and Grumman Butkus (HVAC study), advising of the need to make these investments to ensure the continued performance of the Village’s infrastructure. More information on each of these projects can be found by clicking the links on the left side of this page.
In adopting the Resolution, the Village Board determined that these projects are appropriate for 20-year bond financing because their life expectancy is 20 years or more. The proposed debt schedule keeps debt payments well below the Village’s historical benchmark that occurred in 2009, and described above. The maximum debt level expected with this proposed bond issue (approximately $2.1 million) remains significantly under the 2009 level of $2.8 million. As indicated above and highlighted in the chart below, in constant dollars and in real dollars adjusted for inflation, the Village’s debt load remains below historical high points (see chart below).
To the Voters of the Village of Glencoe,
“Shall the Village of Glencoe, Cook County, Illinois, undertake the following capital improvements in and for the Village: storm sewer improvements, sanitary sewer upgrades, street resurfacing and sidewalk replacement, all on property owned by the Village or over which the Village has sufficient easements, and issue its general obligation bonds to the amount of $7,500,000 for the purpose of paying the costs thereof, said bonds bearing interest at not to exceed the rate of 6.00% per annum?”
To the Voters of the Village of Glencoe,
“Shall the Village of Glencoe, Cook County, Illinois, replace the heating, ventilating and air conditioning system in the existing Village Hall (built 1956) located on Village Court in said Village, said system serves administrative offices, public meeting spaces, Family Services of Glencoe, the public safety department, public safety living quarters, and other areas in the Village Hall, and issue its general obligation bonds to the amount of $2,500,000 for the purpose of paying the costs thereof, said bonds bearing interest at not to exceed the rate of 6.00% per annum?”