JOINT REVIEW BOARD ORCHARD ROAD TIF DISTRICT October 21, 2013 Montgomery Village Hall 200 N. River Street Montgomery, IL 60538

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1 JOINT REVIEW BOARD ORCHARD ROAD TIF DISTRICT October 21, 2013 Montgomery Village Hall 200 N. River Street Montgomery, IL Call to Order. Konstantine Savoy of Teska called the meeting to order at 3:00 p.m. He also distributed a copy of the rules and regulations for the JRB. 2. Introduction of Representatives. In attendance were: Kon Savoy of Teska Rick Petich from School District 129 Jeff Schuler from School District 302 Tom Meyers from Montgomery & Countryside Fire Protection District Marty Kunkel from Sugar Grove Fire Protection District Tom Rowe, Sugar Grove Township Supervisor Jeff Zoephel, Montgomery Village Administrator Steve Andersson, Village Attorney Pete Wallers, Village Engineer Sarah Skilton from the Oswego Public Library District Mera Johnson, Montgomery Resident Darla Cardene from Waubonsee Community College Bill Catching, Aurora Township Supervisor 3. Submittal of Proof of Notice. Mr. Savoy asked Administrator Zoephel to provide proof of notice that the notice of the meeting and the report was sent to all the taxing districts and certified this as part of the record. 4. Selection of Public Member. Mr. Savoy asked for a member of the community to be elected to the JRB. Administrator Zoephel nominated Mera Johnson, a resident of Montgomery who was formerly the Assistant to the Village Manager and has a background in municipal government. Hearing no objections, she was accepted as a member of the JRB. 5. Selection of Chairperson. Mr. Savoy opened the floor to establish a chairperson. Chief Meyers nominated Chief Marty Kunkel as chairperson. Mera Johnson nominated Jeff Zoephel. Roll call was taken on the first motion as to Chief Kunkel. The roll call vote was unanimous for Chief Kunkel. 6. Review of Joint Review Board Procedures & Duties. Mr. Savoy handed out a description of the procedures and reviewed those briefly, emphasizing that these procedures and duties are taken from statute. #2 says that the JRB is to consider the eligibility report, development plan and other plans or documents

2 and the proposed ordinances approving the redevelopment plan and project. Attorney Andersson briefly reviewed three draft ordinances that would ultimately be finalized and passed by the Village Board if the project goes forward. Mr. Savoy said procedurally, the JRB can hold any additional meetings they desire. The JRB has 30 days to make a recommendation to approve or not approve the proposed TIF district. This recommendation is an advisory recommendation that is not binding; however, a disapproval of the TIF would require a 3/5 majority vote by the Village Board to approve. The JRB has until November 20 th to make their recommendation, which must be in writing and must include a report targeted to the issues with regard to eligibility and any statements or recommendations related to the redevelopment plan or program or other documents submitted. He explained that the report cannot comment on any other information, only on issues in reference to those specific documents. If there is no report, the JRB recommendation goes forward as an approval. If the plan is rejected by the JRB and a report is issued with those findings, the Village has 30 days within which to alter the plan and submit it to the JRB for further review. The JRB and Village can continue to have dialog and work through issues as the time goes on. The dialog can extend beyond the time for the report to be issued and beyond the public hearing. If that is the case and/or if additional issues surface at the public hearing, the Board can continue the hearing to consider additional information and dialog. 7. Presentation of TIF Eligibility Criteria & Redevelopment Plan. Mr. Savoy discussed the Eligibility Study and Redevelopment Plan. Appendix A is the report that contains the Eligibility Study. One of the first steps is to determine if the area is eligible under the requirements of the state statutes. There are three primary ways it can qualify, and the TIF report as proposed qualifies under two of the three possibilities. One is referenced to as a blighted area or vacant land; vacant land can qualify if there is a history of chronic flooding which this does have over 90% of the area. The second part of the TIF area qualifies under the industrial park conservation area qualification. This requires that the unemployment rate is at 6% and 100% of the national average, and that development would help in bringing in new jobs. This area qualifies under those criteria. Part of the conservation park requirement is that within the industrial park conservation area there has to be an area that meets a conservation area requirement. This means 50% or more of the buildings are 35 years old or older and the area must meet at least three of 13 criteria from the statute. For purposes of the report, the sites must be at least 1.5 acres and meet other criteria. Teska used two parcels from among those surveyed to document as meeting the criteria for a conservation area. Qualifications are based on age requirement, excessive vacancies, inadequate utilities to site, and decline of growth or EAV. 8. Review of Draft TIF Ordinances. This item was taken care of earlier in the meeting. 9. Questions & Comments.

3 Chief Kunkel opened the floor to questions or comments. Someone asked about changes in the TIF area. Mr. Savoy said the area for the TIF district has changed over the process. The area qualifies based on significant and chronic flooding in the area shown on Exhibit C and the report documents the flooding conditions in the area south of Jericho. Chief Kunkel passed around some notes he compiled that itemize certain documents he feels are missing or in question. He also said he does not agree that certain parcels should be considered as chronic flooding because they are not on the flood plain map. Chief Meyers said the park district land and lake area will always be vacant land so it isn t fair to include those in the flood area because it will probably not develop in the future. Attorney Andersson said that is not a proper question for the JRB to consider. Mr. Savoy said all the properties in the area are affected by the flooding. Chief Kunkel said a lot of money was spent on the Orchard Road widening to ensure that the area doesn t flood again, so it should not be considered as flooding area. Engineer Wallers said that work was just to mitigate the flooding created by the additional highway surface and doesn t help the overall flooding in the area. Chief Kunkel said there is a new culvert under the road that should help the drainage in the whole area. Engineer Wallers said the existing road conveys the same amount of water. The only difference is that the old road conveyed it over the road and the new one conveys it under the road. He said long term they would like to facilitate offsite improvements with TIF funds to ensure that water can be conveyed in a way less harmful to the Fox River. Culverts were installed which is good, but there are others that need to be replaced and issues with Fox Metro that need to be addressed. In addition to the major flows, there are minor drainage problems, the Montgomery overflow particularly, that will need to be resolved in the future. Chief Kunkel asked if certain parcels of land were included that generate no increment for the offsite improvements just to make it qualify because the parcels along Orchard Road wouldn t qualify on their own. Attorney Andersson said you have to look at how the TIF exploration went. Initially it was for additional and different parcels. When Mr. Hamman chose not to participate, his property was cut out and what is left is what is shown as the proposed TIF area. He also explained that why certain properties are included is not a question for the JRB, but they could ask the Village Board that question. The JRB needs to decide if the area meets the criteria or not. That is the only question that the JRB can consider. Chief Meyers disagrees and feels the JRB should consider if the area is appropriate. Attorney Andersson reiterated that the only question before the JRB is As described, does the TIF District meet the criteria? The JRB cannot discuss whether the TIF boundaries were properly defined or included. They can only decide whether the TIF as defined qualifies.

4 Engineer Wallers said the area definitely has flooding problems that we have been fighting since around at least He described some of the flooding issues and drainage issues. Chief Meyers said he doesn t believe there is chronic flooding. Engineer Wallers said statistically it is mapped as flood plan and meets the criteria of the federal government. He said chronic means it can and will flood and that it meets the criteria. Chief Meyers and Kunkel asked about various documents, notifications and legal descriptions they feel should have been included in the packet. Attorney Andersson explained that those documents are not required for the JRB but can be provided if desired. Chief Kunkel raised an issue that the TIF area cannot include any areas designated as recreational and he feels the Fox Valley Park District parcels are recreational. Attorney Andersson said an area is not disqualified just because it is a public park. Chief Kunkel asked why the original TIF area has been reduced down to two parcels and 11 acres qualifying when originally it was over 100 acres. Mr. Savoy explained that the larger area did qualify, but they chose to take another approach and qualify it under the industrial park conservation area criteria instead of blighted/vacant as originally proposed. The two parcels mentioned are required and picked at random as examples of contributing to conservation. The status requires that you find within the area two parcels that meet the conservation district requirements. So they chose two parcels to focus on for the purpose of the report, as required, although many others also would have qualified. Chief Meyers asked why some of the newly developed industrial areas east of Orchard Road are now being included in the TIF district. He said those are huge successful businesses that don t fit the definition of blighted, and in fact they are expanding. He asked if they are included just to engender revenue. Mr. Savoy said the bigger issue is that existing businesses want to be included and want those benefits so that they can continue to grow and expand and receive assistance from the TIF district funds to do that. The interests of the Village are to make everyone successful, to keep up and be competitive. It would not be fair to carve out businesses we judge as successful because it would give a competitive advantage to new businesses vs. existing. So it s a question of competitive fairness within the same area. Mr. Savoy said there is not going to be enough money in the TIF fund to provide everyone in the TIF district with everything they may want. Any developer requesting funds would have to come before the Village with a request of what they want and why they want it, and the Village will have to decide how to distribute the funds. Even properties that don t receive TIF funds directly will benefit from the fact that there are new roads, reduced flooding, new utilities, additional businesses nearby, etc. Chief Meyers said in April the opinion was that the area east of Orchard Road would qualify if some of the newer industrial developments were removed, and asked why they are now included. Mr. Savoy said that based on the trend of unemployment rates the

5 area does qualify as an industrial park conservation area so the age of the buildings do not disqualify it. Chief Meyers said putting the area in a TIF will impact his fire district s future tax receipts for the next 23 years and so he wants to know what the project list is for the future of the area. The taxing bodies stand to lose a lot of money over a period of time and he feels the worst time to create a TIF is when assessed values are low. Mr. Savoy and Attorney Andersson advised that is a broader discussion that should be held before the Village Board, not at the JRB. Mr. Savoy clarified that anyone in the TIF area would be eligible to apply to use funds from the TIF. There are also some downstream flooding issues outside the area of the TIF, but TIF funds could also be used for that type of work as long as it benefits the district. Chief Meyers asked about prefunding the TIF. Attorney Andersson confirmed that this isn t a prefunded TIF. He said that money has to be equally distributed between taxing bodies if any funds are distributed. One of the findings is that this area is not subject to growth by private investment due to the conditions of the area. The area meets the blighted condition requirement of the statute, as there is a large amount of vacant land that has no roads or utilities, there are vacant buildings, and there are three criteria to establish if an area has experienced decline in EAV which this has. This is a declining condition that without Village intervention will continue to go south. It has been documented and it is pervasive, and a TIF is one way to address these conditions. Chief Meyers said the TIF District is changing the philosophy that development should pay its own way, because the taxing districts are going to be giving up incremental taxes for 23 years in order to pay for the development. Attorney Andersson said there is no development and has been no development, so the taxing bodies wouldn t be getting it anyways without the TIF because there is no development. However, after 23 years once the development has occurred, it will generate more taxes for the taxing bodies. He added that the Village could consider granting back the background EAV to the taxing bodies proportionately. Chief Meyers said he would like to exclude existing buildings from the TIF, but Attorney Andersson said that isn t the way a TIF works. It is the incremental EAV on new development that will fund the TIF. Without the TIF, those properties will not develop and there will be no increased EAV anyways. Chief Kunkel asked if there are specific projects that are part of this TIF. Attorney Andersson said nothing is final at this point. Mr. Savoy said page 19 in the eligibility report lists some eligible improvements that are judged to likely be necessary, but are not final. Engineer Wallers developed this initial list and the numbering is consistent with the numbering in the back of the list.

6 10.Consideration of Recommendation to Village Board. Chief Kunkel asked about consideration of recommendation to the Village Board. He said they have 30 days to consider and asked if people want to make a recommendation today. Sarah Skilton moved that the JRB find that the proposed TIF area meets the eligibility requirements. Mera Johnson seconded the motion. Roll call vote: Oswego Library District--yes Mera Johnson--yes Waubonsee Community College--yes Aurora Township--no District 129--abstain District 302--no Montgomery Country Fire Protection District--no Sugar Grove Fire Protection District--no Sugar Grove Township--no Village of Montgomery--yes Vote is 4 yes and 5 no. Motion failed. Attorney Andersson said since the motion failed, someone should move to either continue the meeting or deny approval. Bill Catching moved to continue to November 4 at 3 PM and suggested that in the meantime someone from the Village should meet with fire district and ease their concerns. Tom Rowe seconded. District 129--abstain District 302--yes Montgomery Country Fire Protection District--yes Sugar Grove Fire Protection Distrcit--yes Sugar Grove Township--yes Oswego Library District--yes Mera Johnson--yes Waubonsee Community College--yes Aurora Township--yes Village of Montgomery--yes 11.Review of Timetable & Next Steps. The JRB will meet at 3:00 p.m. on November 4 th to discuss the matter further. 12. Adjournment. Hearing no further business, Jeff Zoephel moved and Mera Johnson seconded to adjourn the meeting. The meeting was adjourned at 4:25 p.m. Respectfully submitted, Jeff Zoephel Village Administrator