VILLAGE OF NORTH AURORA
FINANCE COMMITTEE MEETING MINUTES
JULY 14, 2014
CALL TO ORDER
Trustee Curtis called the meeting to order.
ROLL CALL
In attendance: Trustee Laura Curtis, Trustee Mike Lowery, Trustee Chris Faber, Finance Director Bill Hannah, Village Administrator Steve Bosco, Public Works Superintendent Mike Glock.
AUDIENCE COMMENTS – None
APPROVAL OF MINUTES
1. Approval of the Finance Committee Minutes dated 03/10/2014
Motion for approval made by Trustee Faber and seconded by Trustee Lowery. All in favor. Motion approved.
NEW BUSINESS
1. Discussion of FY 2013-14 Budget Amendment #4
Finance Director Bill Hannah discussed the reasons for the budget amendments:
Public Works Department – there were a lot of HVAC/mechanical repairs for the police station and Village Hall during the year which resulted in costs being $41,000 over budget.
Activity Center Fund – The Village closed out the fund with the last budget that was approved. All future financial activity related to the site will be accounted for in either the Capital Projects Fund or the General Fund. This budget amendment will close out the Activity Center Fund and move the remaining funds to the Capital Projects Fund.
Trustee Curtis asked if the Activity Center Fund should be kept open in case the Village decides to demolish the building. Hannah said that if the Village decides to go that route, it can do this without having a separate fund. The funds would be pulled from other accounts and the Village can track these funds in the Capital Projects Fund using different account numbers or sub funds.
2. Discussion of Bond Refunding of 2008 GOARS Issuance
Staff has been monitoring to see if it would be an opportune time to do an advanced refunding for one of the outstanding bond issuances. Hannah explained that in 2008, the Village issued $9,000,000 in bonds to fund construction of the police station. Other funds to complete the project were in the amount of $11,700,000. The bond issuance is an alternate revenue bond issuance which means that it is paid with a dedicated revenue source which in the Village’s case is the sales tax revenue source. It also has General Obligation backing, meaning that if the sales taxes are not sufficient enough to meet the debt payments, the Village has backed the bond issuance with a property tax, if needed. Annual principal and interest payments are $690,000 a year. Every year in December the Village abates the property tax levy since revenues are sufficient to pay for the bond issuance.
The call date is January 2016 to consider a refunding. Advanced refunding is more than three months from the call date. In this situation, the Village would have principal and interest payments for a year and 3 months on 2 different bond issuances.
Hannah noted that even with negative arbitrage, the Village would still have approximately $480,000 of net present value savings. The Village is looking at a 7% savings off of the original bond issuance and about $41,000 in annual savings to the General Fund through 2029.
If the Village wants to proceed with advanced refunding, the Board should need to update agreements with Chapman & Cutler and Speer Financial.
OLD BUSINESS – None
OTHER INFORMATION – None
TRUSTEE COMMENTS – None
ADJOURNMENT
Motion to adjourn made by Trustee Faber and seconded by Trustee Lowery. All in favor. Motion approved.
Respectfully Submitted,
Lori J. Murray
Village Clerk
