Potential Lakewood SSA Bond Refinancing?

Six years ago when I was the chairman of the Planning Commission Lakewood Homes presented a proposal for building 800 homes in the area where they currently exist. We insisted (I was not Mayor then) on a variety of things that I concurred with, the two commercial parcels, the extension of the Cedar Lake Road, park set asides, and the impact fee structures. I won't go into the tactical reasons why going ahead with Lakewood at that time was important to the village, (that's a whole other post). Eventually the decision was made that to achieve the major objectives with SSA financing. The SSA is basically an addition to your tax bill to pay off bonds that were floated for your specific neighborhood, village etc. I won't go into the way SSA's can potentially help buyers get more home for less etc here (also another blog post as well). By the way not one trustee who voted yes on Lakewood is still on the Village Board.

Now fast forward 5 years later, Lakewood is built out, Fremont Township's assessments are some of the highest around, and the SSA is tacked on. You get high tax bills.

I have been working with some Lakewood residents who have contacted me about some issues specific to their homes and purchases, so it has led me to doing some global thinking about how we can lighten the load for the Lakewood Homeowners with the SSA's currently in place.

Speaking with the company that handles our bonds, Speer Financial, they were of the opinion that currently there is the ability to "refinance" the existing bonds. While not going into the obscure technical details we can reduce the interest rate by almost two points. At the moment with some quick calculations this can reduce the SSA total by $3.6 million over the life of the SSA.

Obviously a potential saving to the residents of Lakewood of any amount on their tax bills would be a positive. I am not sure how much impact this would be on the tax bill but we are going to find out.

I directed the Village Board Finance Committee chaired by Trustee Sherry Perkowitz and with Vice Chair Trustee Brian Brubaker to look into this and report back to the board as quickly as they can to see if this is feasible and firm up the process so we can act to cut the total owed and the rate.

Blog Changes

At the bottom of this post and others will be something called a label. The label will indicate the topic I think this post should reside in. They are all hyperlinked to other articles in the same category (thats what the number next to each listing means). I spent an hour working on the 588 posts I have and came up with the ones below for now, I am slowly going to cateorgize them all, some can appear in multiple spots as well. So if you want to read about HOA's or 120 and the broader things I write about all the time it makes it easier to find! Below is a list of "Labels" that I did in the last hour or so. More to come as well.

• 120 Bypass (47)
• About this Blog (18)
• Bonds (1)
• Community Events (6)
• Elections (1)
• Football (19)
• HOA's (6)
• Lakewood Homes (15)
• Police Department (46)
• Public Works (47)
• Racing (12)
• Round Lake History (4)
• Route 60 (24)
• Silly (1)
• Taxs (1)
• Village Board (1)
• WRLR Radio (16)

One of Round Lakes Strength's-- Water!

Water seems to be a given. You turn on the tap and out it comes. Round Lake is very lucky because we were one of the founding members of an organization called the Central Lake County Joint Action Water Agency or JAWA for short. What does this mean? The short answer is Lake Michigan water some of the best drinking water in the country comes out of taps because our membership in this organization.

The reason this is big is because well water in western Lake county and Eastern Mchenry is and has been at risk for quite a while of drying up. One local business outside of JAWA has 3 well's that are 1,800 feet deep, one of them is already unusable.

JAWA represents the community's of Grayslake, Gurnee, Lake Bluff, Libertyville, Mundelein, Round Lake, Round Lake Beach, Round Lake Heights, Round Lake Park, Lake County, Vernon Hills and Wildwood. So if you live in these areas and have city or village water, it came from Lake Michigan.

We have two water towers in the village, one on Wilson Road in the Northwest corner of Valley Lakes, the second is near the corner of 134 and Hart Road. You can't miss them they are big and white! We also have the ground storage tank along Nippersink Road, which we are going to be expanding to contain 2.5 million gallons of storage. This project is being paid for by bonds from impact fees developers have paid to the village over the years.

The website for JAWA has lots of interesting information on water, Lake Michigan and the agency. Some of the interesting facts are:

• The lake contains so much water that 400,000 gallons of water (rain or snow) fall on it every second of the day!
  
• 320,000 gallons of water evaporate off the lake every second as well.
  
• Lake Michigan is the 5th largest lake in the world. (Caspian Sea, Lake Superior, Lake Victoria and Lake Huron are bigger)

I have appointed Trustee Jerry Shaw as Round Lake's Director on JAWA and I serve as the alternate for the monthly board meetings. Jerry usually reports to the board about the meetings he attends under trustees comments at the next available board meeting.

The Village and Water

Water seems to be a given. You turn on the tap and out it comes. Round Lake is very lucky because we were one of the founding members of an organization called the Central Lake County Joint Action Water Agency or JAWA for short. What does this mean? The short answer is Lake Michigan water some of the best drinking water in the country comes out of taps becuase our membership in this organization.

JAWA represents the community's of Grayslake, Gurnee, Lake Bluff, Libertyville, Mundelein, Round Lake, Round Lake Beach, Round Lake Heights, Round Lake Park, Lake County, Vernon Hills and Wildwood. So if you live in these areas and have city or village water, it came from Lake Michigan.

We have two water towers in the village, one on Wilson Road in the Northwest corner of Valley Lakes, the second is near the corner of 134 and Hart Road. You can't miss them they are big and white! We also have a ground storage tank along Nippersink Road, which we are going to be expanding to contain 2.5 million gallons of storage in this fiscal year. This project will be paid for by bonds from impact fees developers have paid to the village over the years.

The website for JAWA has lots of interesting information on water, Lake Michigan and the agency. Some of the interesting facts are:

• The lake contains so much water that 400,000 gallons of water (rain or snow) fall on it every second of the day!
• 320,000 gallons of water evaporate off the lake every second as well.
• Lake Michigan is the 5th largest lake in the world. (Caspian Sea, Lake Superior, Lake Victoria and Lake Huron are bigger)
  

I have appointed Trustee Jerry Shaw as Round Lake's Director on JAWA and I serve as the alternate for the monthly JAWA board meetings.

State of the School-- A District 116 Progress Report

Last Thursday morning I attended the Round Lake Area School District presentation that they made in conjunction with the Round Lake Chamber of Commerce. The presentation covered and touted two major areas educational and financial. I am going to talk about the financial aspects of the turnabout here however. Five years ago when I took office, the mayors with major stakes in the district were approached, by numerous state legislators about our feeling about putting a state oversite panel in place to attempt to fix the morass that the district had become. While I had reservations about losing some local control I did recognize that something needed to be done. The appointment of the SFA (State Finance Authority) and the hiring of Dennis Stonewall as CEO, Wally Korpan as CFO and Dr. Janet Elenbogen as Chief Education Officer have shown dramatic results.

• In 2001, Round Lake Area Schools had a student population of 5,775 K-12 students.
• The assessed valuation of District 116 is the second lowest in the county with the second highest tax rate.
• Most of the taxes are generated from homeowners.
• In 2001 40% of our real estate revenue, or approximately $7,060,000 out of $17,800,000 tax distribution was intercepted by bankers who felt that we were a poor risk.
  
• In 2001, the homeowner of a $150,000 home was paying $2,630 in taxes to our school district. Of this money, $1,578 was going to pay off debt.
  
• The district borrowed $14,400,000 in short-term debt to make payroll and pay for educational supplies.
  
• There was a possibility in 2001 that the health insurance program that the district had for its employees would not be available due to a lack of funds.
  
• In March 2001 the school district tried, unsuccessfully, to pass a referendum to sell bonds to fund a health insurance program. The long-term debt was as high as $88,172,636 and $14,500,000 in short-term .
  

Today things are dramatically different.

• The long-term debt has been reduced to $77,532,228, and short-term debt is eliminated.
  
• The first step of recovery began in 2001 with the implementation of fiscal management. Business operations were established, individuals trained and procedures were followed.
• The Board received an accurate Treasurer's Report for the first time in several years.
  
• Today, Round Lake Area Schools celebrates its 5th year of a balanced budget.
  
• Buildings and grounds have improved with the help of several companies and organizations. Round Lake Area Schools provides a cleaner and healthier learning environment.
  
• Changes have occurred without the addition of new money because business policies and procedures have been communicated to the staff and the stress of accountability is behind the positive change.
  
• Many of our existing buildings have been identified for Life Safety repair. Chief among these are asbestos abatement, boiler and heating unit replacement, plumbing repair and lighting repair or replacement.
  
• Technology opportunities are behind other school districts and equipment replacement and training are paramount in improving our educational climate.
  
• There is an active participation by members of the Business Office with members of the Curriculum and Instruction Department to make sure that grants are properly budgeted, expended and accounted for.
  

However there are still things that need to be done going forward.

• Round Lake Area Schools has a very diverse population and economic structure; more than 59% qualify for either free or reduced price breakfast and lunch waivers.
• Instructional needs still include textbooks and textbook adoption testing and assessment tools. Current library books and software need to be purchased as well.
  
• Our school population is rising at a very fast pace. Currently, our schools are at their peak enrollment. The current student enrollment has prompted the consideration of adding new mobiles at Indian Hill to house students for next year.
  
• Additional teachers will need to be hired and supplies and capital outlay items need to be purchased to outfit these classrooms. These will all require additional dollars.
  
• The prospect of selling bonds is necessary. Round Lake Area Schools will be forced to have a manageable debt in order to provide the space and service the community will demand. This will be no different than other school districts. These financial improvements are important, however, the quality of education must also be improved.
  

It is important to know that in the past year Round Lake Area Schools has become the envy of other area school districts for the financial improvements it has made. Other districts have visited to ask questions on how we made improvements. These are the same districts that a few years ago lost confidence in Round Lake Area Schools.

Consolidation...How to? Part Two

Yesterday I wrote about merging the Round Lakes today I will talk about some of the practical methods of actually doing it. About a year ago I had one of our law firms draw up a memo outlining how we could go about doing it. I won't go into the level of detail the memo went into, but its quite doable. Each municipality would have to place it on the ballot in the form of a referendum. Then any community that passed the ballot measure would then be clear to merge with any other community that also voted in the positive. As long as those two communities share a border. For example we could not merge with Round Lake Heights if Round Lake Beach did not vote positively, because we do not touch the Heights.

The manner of government would be different as well. There would be a City Council divided into Wards (Trustees would be Alderman). More then likely there would be 15 wards. There would be a Mayor and a Clerk (the Clerk would not have to be elected but could be) as well. The process would also be partisan with party affiliations. For the most accurate model see Waukegan.

The other thing is that to handle the old communities debt's there is a provision that each community would become a borough with some government functions mostly managing the debt and bonds until they are exhausted. So Round Lake would not be responsible for Round Lake Beach debt and vice versa. Over time these would slowly vanish.

Mayors Task Force Created

Last night at the regular village board meeting, I announced the creation of a task force to attempt to attract a hospital to the Round Lake Area. If you throw in Volo, Fox Lake, and the un-incorporated areas in this general area, we have 100,000 to 120,000 people who have to drive a substantial distance to a hospital. Northern Illinois Medical Center appears to be the closest full service one and its a good 10 miles away. I might be wrong as to the closest, but the point being they are all a good ways to go.

With the arrival of sewer and water to our SW quadrant, we have an excellent opportunity to trigger this needed service in the area. The task force will be led by a trustee and I would like citizen involvement on the task force as well so please email me at bgentes@eroundlake.com and I will make sure you are a member of the taskforce. In addition I am going to be inviting other communities to join the task force so we can speak as a group.

Sewer and Bonds--101

Reader Tim Latta asked a question about the sewer and water bonds that we sold for $3 million a few years ago. To set the stage I need to talk about the bigger picture for a bit. Round Lake developed a comprehensive plan that visualizes its natural borders as Fish Lake Road to the West, and Chardon Road to the South. This comprehensive plan was completed and adopted in late 1999 and early 2000 and had some clear ideas of what the vast majority of the land West of Fairfield and South of 120 would be (we call this our Southwest Quadrant by the way). The land use was primarily commercial and industrial with some residential in the mix as well.

Over time the village has consistently moved forward with this plan. However since 90% of the land in the SW Quadrant is not annexed to any municipality its fair game to any village or the County for development of any kind. I have told you what Round Lake intends to do in the area. But there is another player in the area, Volo, Volo's comprehensive plan involves commercial and industrial development along the Route 12 corridor, and homes starting at Gilmer and 120 going east to almost Fairfield Road. If I were the Mayor of Volo, I would pursue this path as logical for the goals of Volo by the way. I believe that Volo, building homes, in the area we have planned for commercial and industrial development in the SW Quadrant would be counter to Round Lake's future best interest. The other player is Lake County, they are not to be trusted, but they have not shown signs of doing residential development in the last few years out here since the Tanneron Bay and Brooks Farm development.

A major key to development is bringing sewer and water to a parcel. Because if you want to build homes or industrial parks and or office parks you need sewer and water. Septic fields are not the greatest of either of the these for development purposes. So over the last three to four years Volo and Round Lake have been attempting to bring sewer and water to this area so each village can execute its comprehensive plan. The Ryland parcel which was just approved by the village board allows us to get our sewer and water to the SW Quadrant at last.

The village board recognized how important this project was to the long term future of the village and was willing to spend money to do it. Bringing sewer and water from behind the housing behind the CVS at Fairfield and 134 was what $2.5 million of the bonding was for. The project runs south from behind the homes along the right of way for Com Ed, until it crosses Nippersink where it takes a short turn westwards to line up with Dawn Marie. It then proceeds south along the street until it reached a vacant parcel of land we own, and at that time, was the end of Round Lake's corporate boundaries. As Ryland came on board we were able to get them to shoulder the additional cost of bringing the sewer and water the rest of the way to 120 and Wilson. In addtion to funding the connection to the sewer line for the residents of Dawn Marie. All this is a long set-up to answer the question.

This sewer connection has a service area, which bascially covers the SW Quadrant service zone mentioned above. This service area contains a maximum amount of capacity, in other words how much sewage can flow through the pipe. So what is done to ensure that the capacity is not used up is that there is an engineering calculation done that allocates sewer throughout the entire sewer service area. Since the village paid for the sewer to come to the area it should and will get paid for the costs of building the sewer this form of payment is called "recapture". So the $2.5 million we spent to bring sewer to the SW Quadrant will eventually be returned to the village in the form of this recapture. As a parcel gets developed and hooks on to the sewer line, they repay the village the recapture fee which is calculated by a complex formula designed to "recapture" the village investment. This sewer protection zone also has official legal protection via the Lakes Region Sanitary Sewer District (the relevant sewer district in that area) so even if there is development in the area that occurs in Volo or in the unincorporated areas of the county that attaches to our sewer, the village gets paid recapture.

Alert readers will notice that we used $2.5 million of the $3 million for this project. The other $500,000 of the bonding was used to improve and upgrade from an 8" to a 16" line the main north south sewer line that runs down to Madrona and Lakewood homes, but is in the older part of the village along Cedar Lake Road and Goodnow.

Over time, and a municipality can afford to take the long view, the bonding money will come back to the village, and with the renewed push for the 120 bypass, and the increased interest from the parcel owners inside the SW quadrant to do something, I believe the payoff will be quick for the village.

Lake County Partners Seminar

I was prepared to be bored yesterday when I attended a 3 hour seminar held by Lake County Partners (LCP) yesterday. The seminar was on methods of securing financing for bonds and incentives to maintain and attract manufacturing business to the state, county and localites. However I was pleasantly surprised I got some excellent nuggets of information that will be useful to Round Lake from the afternoon.

As an FYI Lake County Partners helps businesses transform opportunities into successes through a wide variety of products and services. Our products and services are designed to attract new businesses to Lake County, retain and expand local businesses, grow skilled labor force for the region, build and diversify Lake County's tax base, improve Lake County's infrastructure, address governmental issues that affect the business climate and support appropriate land usage.

This is the economic development arm of the county government, its partially funded by the county with what could be best described as "chump change." Until the county steps up it funds for this excellent organization I will always doubt the seriousness of Lake County about business attraction.

This lack of commitment coupled with no serious funding for roads and or road improvements in the county, are the main reasons areas like Kenosha county are kicking this counties butt when it comes to jobs and business development and retention.

Having ranted about this, I will add that for as underfunded and under supported by county government Lake County partners does a fantastic job. They do above and beyond what they could be expected to do given the limited funds. I could only wish they would be properly funded and then imagine what we could do then!

Turn on the tap and water comes out! So how did it get there?

Water seems to be a given. You turn on the tap and out it comes. Round Lake is very lucky because we were one of the founding members of an organization called the Central Lake County Joint Action Water Agency or JAWA for short. What does this mean? The short answer is Lake Michigan water some of the best drinking water in the country comes out of taps becuase our membership in this organization.

JAWA represents the community's of Grayslake, Gurnee, Lake Bluff, Libertyville, Mundelein, Round Lake, Round Lake Beach, Round Lake Heights, Round Lake Park, Lake County, Vernon Hills and Wildwood. So if you live in these areas and have city or village water, it came from Lake Michigan.

We have two water towers in the village, one on Wilson Road in the Northwest corner of Valley Lakes, the second is near the corner of 134 and Hart Road. You can't miss them they are big and white! We also have a ground storage tank along Nippersink Road, which we are going to be expanding to contain 2.5 million gallons of storage in this fiscal year. This project will be paid for by bonds from impact fees developers have paid to the village over the years.

The website for JAWA has lots of interesting information on water, Lake Michigan and the agency. Some of the interesting facts are:

• The lake contains so much water that 400,000 gallons of water (rain or snow) fall on it every second of the day!
• 320,000 gallons of water evaporate off the lake every second as well.
• Lake Michigan is the 5th largest lake in the world. (Caspian Sea, Lake Superior, Lake Victoria and Lake Huron are bigger)
  

I have appointed Trustee Don Newby as Round Lake's Director on JAWA and I serve as the alternate for the monthly board meetings. Don has served for many years on this board.