9/20/07 Watershed Improvement Plan 2007 - Adopted. The full report is in 15 parts.
8/26/07 Elaine Johnson has the ad hoc committee line up on her excellent website, DGReport. Next step, meeting schedules.
8/11/07 This is huge: Final Report-St.Joseph Creek, Lacey Creek, and Prentiss Creek Watershed Improvement Plan.
Final Report Engineering summary is here.
Final Report Financial Analysis summary is here. This document includes the County presentations on fee structures.
These are summary reports that take a long time to load because they are BIG. I hope you're sitting down when you read these.
No word on when the full reports will be made public, so taxpayers who on going to be paying for this can read up on it. It would be a simple matter to post up as a .pdf files on the village website...
7/24/07 Moving forward. Council Resolution 00-02918
Excerpt:
"Direction of Village Council to the Ad Hoc Committee on Housing
It is recommended that the following provision be included in the resolution creating the Ad Hoc Committee:
The Ad Hoc Committee shall be charged with evaluating and making recommendations to the Village Council related to the following:
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Determine whether the Village has a shortage or a looming shortage of “attainable” or “middle income” housing stock (this includes defining “attainable” and “middle income” housing);
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Provide the Council with specific information about the current status of housing stock and how the same compares to surrounding municipalities;
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Provide analysis as to how the Village’s available housing stock comports with any applicable State requirements for “affordable housing.”
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Assuming the Committee determines there is a shortage of “affordable”, “middle income” or “attainable” housing, than the Committee may wish to consider potential community solutions.
The enabling resolution would provide for a final report to be provided to the Village Council on or before January 22, 2008, at which time the Ad Hoc Committee’s work would conclude unless further extended by action of the Village Council.
Copies of the individual recommendations of Commissioners as the Ad Hoc Committee’s composition have not been attached because several were verbally received."
The size of the committee will be eleven people, will have a specific make up,and will be chaired and co-chaired by council members. Unless my ears deceived me (and they did not) Neustadt and Durkin volunteered to be on the committee several weeks ago. Both good choices: Geoff Neustadt and his wife lived through the nightmare of finding a home they could afford here in Downers Grove where they both work. Sean Durkin works for a bank that has a housing assitance program for it's employees, and also has access to (public) financial information, organized so it can quickly be brought into the discussion. Between the two they have a reasonable perpective and can bring usefull information and insight to the process.
7/17/07 Council keeps it pointed in the right direction.
As expected, VCT will get the conduit financing authority they requested from the village so they can issue tax exempt IRB's. On the housing issue, council is asking for an ad hoc committe with a specific make up so there is a good cross section of people on it. The tasking they discussed was to find out first if there is a housing problem. If so, what is it?
That seems pretty prudent and pretty specific. It should be something that's doable in a reasonable time frame. After that first step, then council can decide on the next step.
By taking it this deliberately, will it miss being discussed as part of the Strategic Plan update?
Word to the naysayers...
Government "interferes" in housing substantially already. The home loan tax exemption is just one example.
Bernanke is directly intervening to fend off a meltdown of the mortgage industry due to sub prime and Alt-A lenders moving about $2.5 trillion of questionable mortgage backed securities onto banks and pension funds. Can you say Bear Stearns?
First time buyers,in recent years, have been pushed to subprime lenders, paying interest rates and fees above what a free market would dictate. A great deal for the big buck lenders like Credit Suisse that fund some notable subprime lenders, and a great deal for the mortgage writers who make a lucrative living at it, and for the hedge fund managers that ride the edge of disaster with investor money. Bad for everyone else. It's a hot potato that has started to go supernova.
A well designed IHDA program would level that playing field, not interfere with the market or dictate housing prices; just make it possible that a young family, buying their first starter home, won't get gouged by excessive rates and fees.
The IHDA, not the village, provides the financing mechanism, and markets the MRB’s, to help first time buyers buy homes. The village has no fiscal responsibility. None. This is a bit of Home Rule gravy that the village can ladle out every year as council sees fit. This year, VCT; next year, whatever the council decides.
There are over 120 3+ bedroom, 1+ bath, single family homes on the market here, priced $325,000 or less, that no one is buying. That means we DO have a housing problem- we have too many starter homes and not enough starter home buyers. At this point, the problem isn't on the supply side, it's on the demand side. We need more buyers who can buy DG homes. NOTE: This info was culled from realtor.com, and may include some surrounding or unincorporated areas. Another good reason to have a realtor on the housing ad hoc committee; they could quickly cull that number down to an accurate DG only list.
Take one of those new jobs VCT creates, marry it to a newly hired DG firefighter, and you have a middle income couple looking for a home here, where they work. Potential buyers. With an effective IHDA program eliminating thousands of dollars in hidden and open fees, and offering a market competitive fixed rate loan instead of an interest only time bomb, or a balloon or ARM, if that couple scrimps, and denies themselves some luxuries, they can just barely afford to buy that 3 bedroom 1 bath first home. They can start on raising a family, improving their home as they go, and contributing to the health of our community.
Instead of an hour each way commute, they drive less and save on fuel, and pollute less. They have more time with their children, or fixing up their dream home, or getting involved in the PTA. And on and on. They aren't flippers looking for a quick kill; they're looking for a friendly place where they can belong.
Doesn't that sound just a bit familiar to all of us? Didn't most of us go through this?
The same market price dynamics still apply. The same realtor commission structure applies. There is still a loan for a house purchased at a price set by the market and nothing else.
What is there to object to?
And another thought...
We haven't seen the bottom of the housing market yet. The experts say 2-4 more years of pain. That's good news for middle income housing; prices should continue to drop, and that maybe addresses the problem for us, at least for a while.
7/10/07 The housing issue is back off the dormant list, but nothing will happen very soon.
Every year the state grants Home Rule (HR) municipalities authority to issue tax exempt bonds for qualifying industrial, commercial, and housing projects.
30 ILCS 345 and the tax Reform Act of 1985 says because of HR, we can use up to $80 per person in various private activity bonds PAB). You know, no one ever mentioned this during the HR dust up. That's a good reason to have Home Rule. This year it equals about $4.1 million. If we don't tell the state we're going to use it by May 1, we lose it. The names used for this are many; industrial revenue bonds (IRB), mortgage revenue bonds (MRB), private activity bonds (PAB), and sometimes called it available bond cap, but collectively it's known as conduit financing authority. The village's low interest rate tax exempt bond rates are the conduit, the responsibility for and payback of the financing are soley up to the other entity, and provisions for Home Rule communities in the Illinois Compiles Statutes (there's that pesky ILCS again) give the village the specific authority. The singlular downside is if the village cedes it's conduit financing authority to a bond issuer, IRB or MRB, that defaults, or in some way goes bad, it may, may effect our credit rating. So there are many requirements, in the application process, to establish the soundness of the applicant. VCT is pretty sound. The IHDA is pretty sound.
This is a pretty useful tool, and it has no cost and no obligation to the village. It's not like co-signing a loan. It just lets others borrow money for themselves, that they alone are responsible for paying back, at a bit lower interest rate than the market rate, because they're tax exempt. By being Home Rule, and having a AA+ credit rating (very good), we have an attractively low interest rate to offer.
This year, Versitile Card Technologies (VCT) sent the village a proposal for the entire $4.1 million to finance an expansion of their DG facility with PAB's in the form of IRB's. VCT makes credit cards, smart cards, and other kinds of similar cards. They started talking to the village in March, and in June made a written proposal to the village requesting all of the cap. They would add 10 employees and end up with a total of 215 jobs here in DG at the VCT facility. They'd also expand their facility so they could stay here a good long time (I hope). A clean industrial business, employing a couple hundred people. Not too shabby.
This year also, the Downers Grove Housing Team and DuPage United (DGHT/DU) talked about using PAB's in the form of MRB's, through the Illinois Housing Development Authority (IHDA), for housing loans to middle income first time home buyers here in Downers Grove. When you you read up on this, it's a pretty unusual program: it works, it costs the taxpayer nothing, it's invisible to the market, and it actually stimulates middle income home buying. Middle income homes in Downers Grove are around $325,000, give or take several thousand. Middle income in Downers Grove is around $82,000 for a family of four. Wow. 82 large, and you're in the middle. The leaders of DGHT/DU first discussed this with the Village in March, and talked with IHDA about their programs. Commissioner Waldack first mentioned it at the 3/27/07 VC Workshop when ORD00-02756 was first discussed in public, and he then brought it forward to the council in June, roughly the same time frame that the VCT request was put in.
So council had two groups each wanting to use PAB. The IHDA offered to come and make a full presentation at the 7/10 VC meeting for using MRB's, and I guess it was actually Deputy Village Manager Dave Fieldman (DVMDF) who called the guy from IHDA (Marsch?) about not making a presentation as he himself had put together presentations on both for the coucnil to consider. I originally thought it was Sandack trying to keep the meeting from lasting 10 hours, and I could see the point; if IHDA was allowed to make a presentation that lasted, say, 30 minutes, then VCT, by rights, should have had 30 minutes to have thier say.
Repeat after me:
HR = Home Rule
VCT = Versitile Card Technologies, Inc.
DU/DGHT= DuPage United/Downers Grove Housing Team
IHDA = Illinois Housing Development Authority
PAB = Private Activity Bond
IRB = Industrial Revenue Bond
MRB = Mortgage Revenue Bond
TCBY = This Can't Be Yogurt (disputed)
DVMDF = Deputy Village Manager David Fieldman (Okay, I'm making that one up just to make sure you're paying attention)
Okay, everyone got their initials sorted out? Let's continue...
Dave Fieldman did a very good job giving a comprehensive overview of both VCT and housing requests. The minutes are here; it makes for a good primer on conduit financing requests of both types.
Many meeting attendees spoke very well to the topic that we need to get going on middle income housing. Some were members of Downers Grove Housing Team, some from DuPage United, some just residents, and all members of council agreed they had all made the three commitments to middle income housing in March. As a guy who is smack in the middle of this issue, I'm still committed. Plus, young families with kids that buy first time middle income homes vote on school referendums, and get actively involved in schools. That seems simplistic, but it's true.
Council had a lot of questions about the IHDA program that the IHDA guy would have had answers to, if he had been there.
The only person who spoke for the VCT request was a Bryan Riordan from GE Finance. He said if the project does not receive funding for this year it would delay the project, and would also put in jeopardy the ability of VCT to remain in the Village. Hey, way to make a good impression, buddy. I think the crowd felt something like this: Don't let the door hit you on the way out.
Unlike VCT, DGHT/DU never filed a PAB proposal; they let that one fall through the cracks. The spokesperson I talked to said they were never told what they needed to do. IHDA should have told them. VCT has a written request/proposal in place, and DGHT/DU does not.
You can probably see where this is heading. After such a strong push by some very dedicated people in Feb/March; too much talk, not enough action. 2007 is gone.
Commissioner William "Bill" Waldack was strong laying out a case for considering housing over VCT. After 30 minutes Sandack asked him to wrap it up, which he did. Then Sandack summarized and pretty much laid it to rest. Given the existing situation, I think Sandack did the right thing.
But for the DGHT/DU people, and anyone who has a stake in this issue (and I think we all do, even you rich guys) there's good news. Waldack made it a center stage issue. Council said they would move post haste to put together the Housing ad hoc Committee promised back in March. The IHDA will be brought into the process. It will be incorporated into the Strategic Planning Session.
Council vaguely agreed to using NEXT years cap for housing. They want a diverse group for the committee, not just DGHT/DU people. Durkin volunteered to be the council liaison. Waldack can make the same 'housing first' case again, and it will still be strong again.
Get organized this year so the 2008 cap can be applied for ASAP; first in line, and with a written proposal and plan. I'm guessing that'll be DU/DGHT's plan from here on out. If so, it would make sense. This can be a fairly fast process if the ad hoc committee stays focused on the task at hand, and avoids mission creep.
It's a slow real estate market. Buyers with middle income budgets, and access to lower interest loans, means:
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real estate agents closing deals and making money,
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properties being taken off the market,
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interest in our village as a responsive and responsible community with a heart,
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blue chip publicity for the public officials who enable it.
This is win-win if there ever was. There's no downside I've found for the village or the market (important) when it's PAB's. If someone disagrees and has a good case beyond simple naysaying, let me know.
4/23/07 Council wastes no time: reaches out and touches the untouchable again.
Here we go again. Now the Home Rule Sales Tax (HRST) is not only going to pay for our streets and infrastructure repair as promised in 2005-6, it'll also pay for our new Fire Station #2.
I hope this was a last act of the old council.
The Deal on Streets and flooding:
The streets in front of our homes are crumbling from neglect. They need repair and resurfacing, yet every year it gets worse and we fall further behind. It's "go time" on fixing the streets. It's time to actually start doing it. This is going to include sewers if needed, and water lines if needed. No more talk, it's that simple; get going already. I think once we fix a street it should be protected for at least three years from being cut into by private developers. If we take the time and effort, and spend the money to fix the street and what's below it, we should at least be able to enjoy it a while before it gets cut into.
Storm water is a bigger problem for residents every year, and in my 23 years here in Downers Grove, the only thing that's changed is it's gotten worse. It's an expensive problem to fix, but needs to be a highest priority because it has an immediate, direct, and negative impact on our health, safety, and welfare as a community.
The Village Council is finally moving on this after decades of neglect. We know what the problems are and our Public Works people have a good handle on what they need to do. It's going to take time, and it's going to be expensive. The amount needed will vary from year to year, as some years will have big chunks of expensive parts of the projects, and some years will have smaller parts of the projects.
Will Council decide on a time frame?
5 Years
Down Side- Maximum pain as the Village streets and sewers everywhere are opened up for repair and upgrade. It also places a huge strain on the cash flow and budget of the Village, and they’ll probably have to borrow money every year; never popular. There won’t have much time for assessment and modification of the project as they go. Residents will be very upset by all of the above, and any elected official who wants a career on the Council will probably not support this.
Up Side- It gets done fast. We see the benefits start to come on-line faster, and we are a happier community as our roads don't bust our car suspensions, and our yards, garages, and basements don't flood every time the weather spits some rain at us. Year six should be a Downers Grove that’s a happy place indeed.
10 Years
Down Side- Takes a lot longer, but parts of the town, specific entire neighborhoods still get put under the knife for repair and upgrade. Accumulated borrowing over a longer time frame has a longer debt payback timeframe, so the Village incurs higher total interest costs (TIC).
Up Side- Less severe annual budget impact: some years they may be able to fully expense costs within the budget and without borrowing. It allows project management to measure results as they go along, and make adjustments earlier in the process as needed. Overall, it may result in less borrowing, incurring lower interest costs.
15 Years
Down Side- I already waited 23 years for someone to fix this mess. I'll be damned if I'll wait patiently for another 15. YOU tell the family with a flooded basement, garage, or back yard the Village is getting right on it, and they'll get to that problem area in 2023. It strings the project out too long, and allows too long of a time frame for diversion of resources (and Council will) to finish what they started. With such a long time frame, the project itself becomes a political football.
Up Side- Spreads out the financial committment so it can mostly be budgeted and paid for as it progresses, greatly lowering interest costs. Affords plenty of time and opportunity for assessement and modification as the project progresses.
10 Years Is Right
I favor the ten year time frame. 15 years is simply too long to wait- I’ve already waited 23 years, and that is enough. Five years will throw our entire Village into construction site mode, and be a total pain everywhere you go. With so much happening, it would be too hard to track and manage properly.
Funding
There are two main ways to finance public works projects, yearly budget allocations, and issuing debt. They both have their pluses and minuses, and rather than go through the thought process of pluses and minuses, I’ll cut to the chase:
The prudent fiscal approach will take a hybrid effort of both.
Some years will probably be pay as we go: some years will require borrowing in addition to budget allocation. It will require that the annual budgeting be identified and fixed in place and make it “untouchable”. Currently, that's supposed to be the local Home Rule Sales Tax, but so far, that is not entirely the case. Council has "touched" HRST funds for other purposes, and they have to stop doing that. By not fixing our infrastructure, Council has made the budget extra rosy looking, especially during the 2007 election year. Don't expect to see it ever again. If you do, know that something very funky is going on.
My guesstimate is, this is a minimum $75 million dollar project to get both our streets and our flooding repaired and under control. The more of that amount budgeted and paid for on an annual basis, the less interest costs are incurred. Interest costs are significant, pay back is at least $1.30 for every $1 borrowed. It is going to put a severe strain on the budget to finally do what should have been done all along: fix our problems. Any Council Commissioner that shirks this most important duty will be highlighted for their inept neglect.