Paul Vallow was named City Treasurer at the Minonk City Council meeting last Monday night. Mayor Bill Koos said that Vallow is well qualified as he was branch manager of Associated Bank in Minonk, treasurer of the Minonk Fire District, currently serves on the Filger Library Board and has also been a member of the City’s Economic Development Committee. Koos also added that he is very knowledgeable of the community and finances and said he will make a good treasurer for the City of Minonk.
Options for sewer bonds
Kevin K. Heid of First Midstate, Inc., of Bloomington, Illinois presented an overview of the bonding process to the City Council. Mayor Koos said the upcoming sewer project will require the use of bond money and wanted the council to be aware of the bonding options available.
Heid said that for a city which is non-home rule like Minonk, the basic statutory debt limit is 8 5/8% of the City’s last certified Equalized Assessed Valuation (E.A.V.).
Heid presented the following facts about Minonk’s debt limit.
• 2006 E.V.A. was $23,556,678.
• 8 5/8 % of E.V.A. is $2,031,763 which is the maximum statutory debt limit for Minonk.
• General Obligation (G.O.) Bonds outstanding for Minonk is $90,000.
• Potential bonding capacity for Minonk is $1,941,763. Heid said that there is a subset of the debt limit for non-referendum bonds which are bonds issued without referendum and that is basically ½ of 1% of E.V.A. for about a total of $117,783 for Minonk.
Heid explained the following type of bonds that the City could issue.
• General Obligation (Property Tax) Bonds----G.O. Bonds of an amount not to exceed the City’s debt limit may be issued after a successful referendum. The next potential referendum date under the present consolidated election system would be November 4, 2008.
• Revenue Bonds----They are generally issued for water and sewer projects where you have a fee that you are collecting each month and you pay the bonds back out of that revenue stream.
• Alternate Revenue Bonds----This type of bonding is about 19 years old and it is basically a hybrid of both the Revenue Bond and General Obligation Bond. Heid said a form of financing that is becoming increasingly popular is Debt Certificates. These are ones that have tax levies to pay them back and are paid back from regular operating funds. The regular Debt Certificate is not subject to any referendum or petition period. They are paid back out of existing operating revenue. It is almost like a Revenue Bond, but does not have a specific revenue pledge and it is payable from any and all available revenues. It is a general obligation and you are obligated to make payment from any and all revenues that you have available. They are very quick to issue and made by a decision of the Council to move forward.
Heid said that if the City is plan on starting sewer work in June, financing needs to be started in February or March in order to be able to have the money available. Heid then went over the spread sheet that he had prepared for the $410,000 issue of debt certificates at the estimated interest rate of 5.75 % and what the annual and total payments for the issue would be relating to principal and interest over the life of the debt certificates.
Alderman Cunningham asked Heid if he was recommending the debt certificate as a way for the City to finance a storm water project versus what the City has done in the past.
Heid said that debt certificates were not available the last time or he probably would have recommended the levy debt certificates. He said "they are a little more flexible because you do not have a limit of that ½ of 1% of E.V.A. and you can change your project a little bit more from year to year if you need to. In the market place they would sell for virtually identically the same price as they are both the same security and credit."
Other Business
- Tim Manning was named to the Zoning Board
- Alderman Cunningham thanked Pedro Hernandez from Woody’s Restaurant for taking over Champion Fitness and encouraged the Woodford County Journal to talk to him and give him some publicity and said that anything we can do to increase membership is good for the community.
- Alderman Ruestman reported that he has sent out 12 bid sheets to local garbage companies and they are due back by February 1, 2008 and then we will have a committee meeting to review them.