City of Dekalb City Council met April 13.
Here is the agenda provided by the council:
A. CALL TO ORDER AND ROLL CALL
B. PLEDGE OF ALLEGIANCE
C. APPROVAL OF THE AGENDA
D. PUBLIC PARTICIPATION
E. PRESENTATIONS
1. Proclamation: National Public Safety Telecommunications Week.
F. APPOINTMENTS
None.
G. CONSENT AGENDA
1. Minutes of the Regular City Council Meeting of March 23, 2020.
2. Minutes of the Special City Council Meeting of March 26, 2020.
3. Accounts Payable and Payroll through April 13, 2020 in the Amount of $2,552,309.01.
4. Hospitality Recovery Program Update.
City Manager Summary: On March 26, the City Council held a special meeting to consider steps to provide economic relief to local bars, restaurants, hotels and motels in consideration of the severe economic impacts they were experiencing as a result of COVID-related restrictions on their use and events they might serve. The Council took the following actions:
Effective April 1, bars and restaurants can retain 100% of the restaurant/bar tax collected through December 31, 2020, up to a total of $3,000. Any amount collected beyond the $3,000 threshold will be remitted to the City. The businesses will still file a tax return, but only remit taxes in excess of the $3,000 in taxes collected from actual sales.
Effective April 1, and continuing through December 31, 2020, hotel/motel taxes are suspended for businesses open and operating on April 1 until a maximum “credit” of $6,000 per hotel or motel is reached.
At this writing, there are no returns from which to draw inferences about the impact of the Council’s actions. The tax returns from April 2020 will not be received until late May 2020 at the earliest. Thereafter, a “dashboard” will be developed to inform the Council on a regular basis about the economic impacts on both the local businesses and the City’s revenues.
H. PUBLIC HEARINGS
1. Public Hearing Regarding a Proposed Annexation and Development Agreement for Approximately 505 Acres of Property that is Generally Located East of Illinois Route 23 and South of Gurler Road (Ventus Technical Services, LLC).
City Manager’s Summary: On March 9, the City Council unanimously approved Resolution 2020-019 which authorized a Pre-Development Agreement with Ventus Tech Services. The attached Annexation and Development Agreement provides additional detail and insight into the impactful development that was described in the Pre-Development Agreement with Ventus Tech Services.
The Entitlement Process
The Annexation and Development Agreement establishes the specific legal assurances and reciprocal responsibilities of the Company and the City with respect to the annexation, rezoning, and development of approximately 505 acres of property generally located east of Illinois Route 23 (Route 23) and south of Gurler Road. It is the rock on which a successful development is built. Without agreement on the Annexation and Development Agreement, neither an annexation ordinance nor a rezoning ordinance can be considered.
Following this Public Hearing, the City Council will consider the Annexation and Development Agreement (see attached) on First Reading. The City Council will take up the Annexation and Development Agreement on Second Reading on April 27.
Following the approval of the Annexation and Development Agreement on April 27, the Council will consider an Annexation Ordinance, Rezoning Ordinance, and an Ordinance Approving a Final Development Plan and Plat of Subdivision.
Additionally, on April 27 the Council will hold a Public Hearing on the Vacation of a Portion of Crego Road which would otherwise bisect the data center campus contemplated by the Company. As described below, an alternate rural roadway will be constructed between Gurler Road and Keslinger Road, just east of the data center campus. On the same agenda, the Council will have the opportunity to approve the Crego Road vacation ordinance.
Development Incentives
a) Enterprise Zone Benefits. The Council took action on January 13 in concert with other local taxing bodies to extend the DeKalb County Enterprise Zone benefits to the Ventus project site. At the same meeting, the Council joined other local taxing bodies in providing unique benefits to high-impact “knowledge-based” developments within 3.5 miles of the centerline of I-88. Specifically, the revised Enterprise Zone property tax abatements relevant to the Ventus development will extend for 20 years per building at a rate of 55% per year provided the Company makes a minimum investment of $800 million and builds at least 900,000 square feet of facility space, with a minimum of 50 high-paying jobs.
On March 16, the Illinois Department of Commerce and Economic Opportunity certified that the amended geographic jurisdiction and tax benefits described above are available to qualified businesses.
On Thursday, April 2, the DeKalb County Enterprise Zone Advisory Board approved a Memorandum of Understanding between the DeKalb County Economic Development Corporation (DCEDC) – in behalf of participating local taxing bodies – and Ventus Tech Services, LLC, which commits these property tax abatement benefits to the Company.
b) Electrical Utility Tax Incentive. In the spring of 2019, the state legislature enacted data center legislation that exempted such facilities from utility taxes on electrical and natural gas usage. Local municipal utility taxes were not exempted. The DeKalb Municipal Code establishes a structured fee schedule for all users. The schedule’s ten tiers charge 0.61 cents (0.0061) per kilowatt hour for the first 2,000 kilowatt hours used in a month and 0.32 cents (0.0032) per kilowatt hour for usage in excess of 20,000,000 kilowatt hours per month. Across all current residential, commercial and industrial users, the FY2020 City Budget estimates a total of $1,718,326 in municipal utility taxes for electrical usage.
When fully energized, the Company’s monthly kilowatt usage will exceed the top tier of the City’s utility tax schedule. During the construction phases, the Company will pay the electrical utility taxes required by the current fee schedule. Two years after the date that the Company’s facilities are fully energized, the Company is committed to an annual payment of $125,000 for its electrical energy usage.
It should be noted that the Company is committed to investing in alternative energy sources including solar panels, wind energy, and geothermal cooling within the power “grid” serving the City of DeKalb and the larger surrounding region.
c) Water Agreement. The City will provide water service to the project area through its public water system. The Company will use the City’s potable water for its cooling and fire protection systems, as well as its restrooms and drinking water. Given the enormous scope of the project and the integral role of the Company in the nation’s communication systems, the Company needs assurances that the City’s water supply has the capacity and the quality to support the Company’s uninterrupted operation.
As Bryan Faivre, the Director of Utilities and Transportation, explains in his attached memorandum of support, the City’s nine wells have a combined pumping capacity of 12.8 million gallons per day if all wells and the City’s five treatment plants are operating continuously for 24 hours. The IEPA recommends a pumping period of 18 hours a day, to alternately rest motors and equipment. Accordingly, the “finished” capacity of the City’s water system is 9,298,800 gallons during the 18-hour period. At peak daily demand of 4.7 million gallons, the City would have 4.5 million gallons of reserve capacity. By the agreement attached as Exhibit G to the Annexation and Development Agreement, the City will reserve capacity for the project. This reservation amounts to only 13% of the City’s existing reserve capacity. Such a reservation is reasonable and will not diminish the system’s capacity to additionally serve nearly twice the current total usage of all residential, commercial, and industrial customers.
Development Features
The Company intends to create a world-class data center including accessory uses with the potential for multiple phases.
As noted on the attached concept plan, the project’s main entrance will be a boulevard extending from a roundabout constructed at the intersection of Peace and Gurler Roads. This landscaped drive leads to a secure entry point. Other security features will include landscaped buffers on the east, south, and west sides of the buildable space. Each of these buffer areas will have landscaping that exceeds the requirements of the City’s Unified Development Ordinance (UDO).
The first building will be constructed on the east end of the campus. A proposed substation and multiple retention ponds will also be a part of the first phase of the development.
a) Roadways. Several roadway improvements are planned for the project in conjunction with the Ferrara Candy Company development across Gurler Road. The existing T-intersection of Peace Road and Gurler Road will be reconstructed and made into a roundabout. To accommodate increased truck traffic to and from the Ferrara Candy Company’s distribution center to the north, Gurler Road will be upgraded to a three-lane section, similar to Fairview Drive. Intersection improvements are also necessary at both ends of Gurler Road. At Route 23 and Gurler Road, a signalized intersection will be created with appropriate turns lanes to accommodate through traffic on Route 23. At the northwest and southwest corners of the intersection of Gurler and Route 23, the preliminary design shows a two-lane section remaining with no enlargement of the right-of-way, to protect the residential properties at that location.
The proposed roundabout at Peace Road and Gurler Road will accommodate free-flowing traffic to avoid delays from vehicle movements generated by Project Ventus and the Ferrara sites as vehicles enter or exit the I-88 interchange to the north. The roundabout design will also reduce wear and tear of the road surface. This intersection, much more than the Gurler Road/Route 23 intersection, will see regular truck traffic to and from the Ferrara site. With a conventional signalized intersection, the frequent truck stops and starts would soon “roll up” the top lift of asphalt.
Although Crego Road is to be vacated between Gurler Road and the southern limits of the proposed development site, there are plans to construct a new north-south rural roadway just to the east of the Ventus site between Gurler Road and Keslinger Road. The City will be using monies dedicated by State Representatives Tom Demmer and Jeff Keicher from the State's 2019 Capital Projects Fund in the amount of $500,000 to help pay for the new one-mile, rural road which will include a 66-foot-wide right- of-way and two 12-foot driving lanes. This new rural roadway will allow for a new means of access from Peace Road and Gurler Road to areas south of the subject site. (see attached map).
b) Utilities/Stormwater Drainage. The existing overhead 138 kV electrical line along the east side of the site will serve the initial Ventus building and a 134 kV line further west will service future facilities. An electrical substation will be constructed to the southwest of the initial building and owned by the data center and ComEd.
A 16-inch watermain will be looped to the south side of Gurler Road between stubs under I-88 at Route 23 and Crego Road (near the DeKalb Oasis). Additionally, the stub on Gurler Road near Corporate Drive will be extended east to tie into the new loop. The water main loop will have an eastern extension that will terminate just east of Peace Road serving as the final connection point for the Ventus site. Two 12-inch water meter connections are proposed to extend into the subject site in the initial phase.
The Kishwaukee Water Reclamation District has been working with the developer, Jerry Krusinski, on the sanitary sewer layout, which will serve Ferrara and Ventus. A new sanitary sewer trunk line will be extended from a point near the intersection of Harvester Drive and Route 23, down the east side of Route 23 and then east along the north side of Gurler Road to the site at Crego Road.
Four stormwater retention ponds are initially proposed on the site and will accommodate the initial phase of development. It is anticipated that site development and mass grading will commence once the project is approved by the City.
Ventus Tech Services, LLC has proposed a dramatic and transformative industrial development that will impact generations of DeKalb County residents. At a time of serious economic dislocation, financial uncertainty, and widespread anxiety about the health of our families, friends, and co-workers, this project brings hope to our community and buoyancy to our local economy. (Click here for additional information)
I. CONSIDERATIONS None.
J. RESOLUTIONS
1. Resolution 2020-033 Authorizing a Professional Services Agreement with Hampton, Lenzini, and Renwick Inc. for Bridge Engineering Design and Permitting Professional Services of the Complete Replacement of the N. First Street Bridge and the Lucinda Avenue Bridge at their Spans of the Kishwaukee River in an Amount Not to Exceed $630,000.
City Manager’s Summary: The City has multiple bridge structures under its jurisdiction. By virtue of their span length and traffic impact a number of these bridges qualify for monitoring and funding assistance by the State of Illinois. As City Engineer Zac Gill explains in his background memorandum (attached), the State of Illinois Bridge Program has programmed funding to complete the removal and replacement of the N. First Street and Lucinda Avenue bridges where they each span the Kishwaukee River north of downtown.
Replacing a bridge is a significant endeavor from the perspective of safety, funding, and community collaboration. Biannual bridge inspections are completed and recorded for each of the qualifying structures under the maintenance jurisdiction of the City. Those reports assist the State in their programming decisions to underwrite bridge repairs within the useful life of the structures. Initially, the structures were intended to be replaced in immediately succeeding years. However, an opportunity to combine the projects to gain a logistical and financial benefit to the City and its residents is present. Significant cost savings are anticipated by combining the projects from the design phase through the permitting, construction, and construction engineering phases.
Negligible detour impacts are always desirable. In this instance, neither structure would be the primary detour route for its project companion. The N. First Street bridge project would detour traffic to the Hillcrest Drive crossing, and the Lucinda Avenue bridge project would detour traffic to College Avenue or Illinois Route 38.
The FY2020 Budget set aside $275,000 in the MFT Fund (Fund 210) for professional services related to bridge work, which would have been sufficient to fund the first of two years of professional design and construction-related services for the N. First Street Bridge. However, it is now understood that savings in the range of 10% to 15% in design and permitting services can be achieved if both bridges are tackled at the same time.
A total of $400,000 is needed to design both bridges in 2020, so a budget transfer of $125,000 will be necessary from the MFT Fund balance to Fund 210, Line Item 210-00-00-62300. The FY2021 Budget will fund the remaining $200,000 to close out the daily project engineering for the two bridges while under construction.
The attached resolution authorizes the City Manager to enter into a Professional Services Agreement with Hampton, Lenzini, and Renwick Inc. for the N. First Street and Lucinda Avenue bridges at a cost not-to-exceed $630,000 over FY2020 and FY2021.
City Council approval is recommended. (Click here for additional information)
2. Resolution 2020-034 Authorizing the Award of a Bid to Curran Contracting Company in the Amount of $1,573,616.64 for Street Resurfacing on Seventh Street, Thirteenth Street and Fourteenth Street, Including Various Other Minor Segments, with Staff Authority to Approve Change Orders Up to a Combined Project Total of $1,600,000.
City Manager’s Summary: This resolution authorizes a contract for the annual street maintenance program. The street maintenance program generally removes and replaces failed asphalt road surfaces and makes modest repairs to related curbing and gutters as the annual budget permits. The program scope is generally based upon the adopted five-year street maintenance plan, as well as contemporary pavement condition assessments by both Public Works directors (Bryan Faivre and Andy Raih) and City Engineer Zac Gill. This year’s bid packet included two alternates: the re-surfacing of S. Sixth Street from Roosevelt Street to Franklin Street, and the re-surfacing of Taylor Street from First Street to Lyons Park.
A Request for Bids was released in February 2020. Two responsible contractors submitted bids, which were read publicly on March 4, 2020:
| Company | Base Bid | Alternate 1 | Alternate 2 |
| Curran Contracting Company | $1,498,326.87 | $75,289.77 | $250,625.30 |
| William Charles Construction | $1,641,139.17 | $67,708.68 | $237,432.87 |
Alternate #2 includes the re-paving of Taylor Street from S. First Street to Lyons Park.
The FY2020 Budget allocation for the annual street maintenance program is $1,325,000. As the specifications for the FY2020 street maintenance program were being developed over the late fall and early winter, further deterioration prompted a broader scope in the bid documents including a more detailed development of Alternates #1 and #2. This is reflected in the higher base and alternate bids.
Unfortunately, while the low base bid by Curran in the amount of $1,498,326.87 is very close to the expanded engineering estimate of $1,486,683.75, it exceeds the budgeted FY2020 allocation of $1,325,000 by $173,327. Given the approaching prime season for street prep work and the minor variance from the engineering estimate, the City Engineer believes that re-bidding the base program will not result in lower bids.
The Council has several options – all of which will require a budget amendment:
Option A: Re-bid the street maintenance program. It is very unlikely that re- bidding will bring the price within the budget allocation of $1,325,000, and will push the street maintenance work into the fall when it will compete with greater traffic, school buses, etc.
Option B: Award the base bid only to Curran Construction Company. Transfer $173,327 from the Capital Projects Fund (Fund 400) balance to Line Item 400-00-00-83050 to cover the budgeted shortfall. This would reduce the projected year-end balance in Fund 400 from $546,574 to $373,247. It should be noted that the largest source of annual revenue in Fund 400 is the home rule motor fuel tax, and revenues are projected to fall below projections because of the COVID-19 impacts on travel and gallons pumped.
Option C: Include Alternate #1 with the base bid contract with Curran. Increase the FY2020 budget transfer from the Fund 400 balance to $248,616.50 ($173,327 + $75,289.77), leaving a projected Fund 400 year- end balance of $297,957.
Option D: Award a contract to Curran Construction for the base bid and Alternate #2 only (not Alternate #1). This will require a transfer from the Fund 400 budget of $423,953 ($173,327 + $250,626) and will leave a projected year-end balance of $122,621.
City Council approval of Option C is recommended. If the Council supports this option, it will be awarding a contract to Curran Contracting Company in the amount of $1,573,616.50 for 6.7 lane miles of street resurfacing on N. Seventh Street, N. Thirteenth Street, N. Fourteenth Street, and S. Sixth Street, along with various minor road sections. In addition, the City Engineer recommends a contingency allocation of $26,383.50 (1.67% of the project cost) to fund change orders for unforeseen repair needs. If needed at the recommendation of the City Engineer, such contingency expenses can be paid from the MFT Fund balance. At an upcoming Council meeting, the staff will propose budget amendments to address the contingencies outlined in Resolution 2020-033 and Resolution 2020-034 above. It should be noted that the FY2021 street maintenance program tentatively includes the resurfacing of Taylor Street from S. First Street to Lyons Park, as well as the premier project for 2021: the resurfacing of First Street from Taylor Street to Augusta Avenue. (Click here for additional information)
3. Resolution 2020-035 Authorizing an Addendum for Engineering Services with Fehr Graham & Associates, LLC for the 2020 General Street Maintenance Program as Part of the 2019 Three-Year Services Agreement, with a Fee for FY2020 Not to Exceed $210,000.
City Manager’s Summary: On February 11, 2019, the City Council entered a three-year agreement with Fehr-Graham for engineering design and field work associated with the City’s annual street maintenance program. As part of that agreement, the second and third years of service were to be priced through annual negotiations and contract addendums to account for changes in the City’s needs. The not-to-exceed cost for service in FY2019 was $165,000. By way of reference, in FY2019 the $165,000 contract supported about $1.3 million in construction-related design and inspection services and represented about 12.7% of the construction program.
The proposed contract includes the design and field work for the FY2020 program, and a head start on the FY2021 program. Instead of waiting until late January or February to complete the street maintenance program’s design, the proposed FY2020 contract assumes the contractual engineer will begin the FDY2021 program design as the FY2020 construction ends. This will allow the City to get out to bid for the FY2021 season earlier when contractors may be hungrier. The higher allocation for FY2020 will be offset by a substantially lower price for the last or third year of the contract in FY2021.
The proposed contract of $210,000 is about 13% of the proposed FY2020 street maintenance program of $1.6 million. The FY2021 contract should be about $120,000.
City Council approval is recommended. (Click here for additional information) K. ORDINANCES – SECOND READING
1. Ordinance 2020-020 Approving a Special Use Permit for a Vehicle Tow Facility and Storage Yard Located at 110 Industrial Drive (J&S Tri-State Recovery and Towing).
City Manager’s Summary: On March 23, the City Council considered a unanimous recommendation from the Planning and Zoning Commission in support of a special use request by J&S Towing to establish a vehicle storage area at 110 Industrial Drive. This ordinance was heard on first reading only and is brought back for the Council’s further review and approval.
City Council approval is recommended. (Click here for additional information) L. ORDINANCES – FIRST READING
1. Ordinance 2020-023 Authorizing an Annexation and Development Agreement with Ventus Tech Services, LLC.
City Manager’s Summary: In the Public Hearing portion of this Council Agenda, the essential terms and purpose of the attached Annexation and Development Agreement between the City of DeKalb and Ventus Tech Services, LLC are presented in substantial detail for the benefit of the Council and all interested persons. As noted earlier, the concurrence of the parties to this agreement is a pre-requisite to the consideration and approval of the annexation and rezoning ordinances, as well as related plans and plats.
In order to provide a reasonable opportunity for all interested parties to review and discuss this substantial development opportunity, the City Manager recommends approval on First Reading only. (Click here for additional information)
2. Ordinance 2020-024 Authorizing a Tax Increment Financing Development Incentive Agreement with Gullie, LLC for the Remodeling of the Property Located at 260 E. Lincoln Highway.
City Manager’s Summary: On March 9, and again on March 23, the Council considered options for potential TIF funding related to the remodeling of the former O’Leary’s Restaurant at 260 E. Lincoln Highway. The full range of options discussed by the Council over the past month are shown below:
Option A
25% of acquisition cost: $140,000
25% of estimated remodeling cost: $31,025
Total: $171,025
Option B
30% of acquisition cost: $168,000
30% of estimated remodeling cost: $37,230
Total: $205,230
Option C
40% of acquisition cost: $224,000
40% of estimated remodeling cost: $49,640 Total: $273,640
Option D: Fund the Estimated TIF-Eligible Remodeling Costs and a Re- Configuration of the Outside Fencing to Widen Pedestrian Passage on the Adjacent Sidewalk – $129,100.
Option E: Fund the Estimated TIF-Eligible Remodeling Costs Only – $124,100.
In the Council discussion on March 9, there was little support for a forgivable loan that included reimbursement for any property acquisition (the contract purchase price is $560,000). The applicants had initially requested $273,640, which included $124,100 in TIF-eligible remodeling costs and $149,540 in acquisition costs.
The applicants have withdrawn their request for assistance with any of the property acquisition costs. They are requesting Council support for Option E and will address the concern about the fencing around the outside dining area from their own funds.
For additional reference, the brief summary of available TIF funds in FY2020 and FY2021 that was provided to the Council on March 9 is repeated below:
| FY2020 TIF#3 Projects | Est. $ | FY2021 TIF#3 Projects | Est. $ |
| Budget | 3,778,250 | Budget | 2,875,000 |
| Private Prop. Rehab | Private Prop. Rehab | ||
| Plaza DeKalb | 350,000 | Agora Tower | 1,375,000 |
| Egyptian | 500,000 | Other Rehab Projects: | |
| Agora Tower | 1,625,000 | The House | ? |
| Former DeKalb Clinic Sewer Relocation | 150,000 | McCabe’s | ? |
| Lovell Tire | 142,091 | Lord Stanley’s | ? |
| Hometown Bar & Grill | 150,000 | E. Lincoln Highway | ? |
| Balli | 216,800 | W. Linc: 1st to Pearl | ? |
| AIP Program | 53,250 | AIP Program | 50,000 |
| Total | 3,187,141 | Total | 1,425,000 |
| Available | 591,109 | Available | 1,450,000 |
| Public Infrastructure | Public Infrastructure | ||
| IL Rt. 38 Downtown | 500,000 | IL Rt. 38 Downtown | 1,500,000 |
| FY2020 TIF#1 Projects | FY2021 TIF#1 Projects | ||
| DeKalb Airport TIP | 1,000,000 | DeKalb Airport TIP | 1,000,000 |
In evaluating the return on any TIF investment the Council will want to consider the incremental property tax revenues generated from the remodeled restaurant over the standard 20-year life of the “forgivable loan.” The property taxes generated by 260 E. Lincoln Highway in 2019 totaled $10,180 based on an EAV of $88,960.
A conservative estimate of the building’s new EAV after the remodeling investment would be approximately $150,000 and would generate property taxes at today’s rate (11.86 per $100 EAV) of about $17,790 per year or an increase of an estimated $7,610 per year (or an incremental increase of $152,200 over 20 years).
In addition, although not included in the calculation of the TIF increment, the gross sales for the main floor alone might generate $1,372,500 per year (average $25 bill times 180 customers, assuming dinners and lunches, over 305 working days). If the gross sales are multiplied by 4.75% (1% MROT, 1.75% home rule and 2% restaurant/bar) the annual sales and use tax revenues would total $65,194 per year. Over 20 years, the sales tax return would conservatively total $1,303,875.
City Council approval of the attached Ordinance 2020-024 is recommended. The continuing interest on the part of the contract purchasers in this time of economic recession is welcome, and their ability to perform is credible. (Click here for additional information)
M. REPORTS AND COMMUNICATIONS
1. Council Member Reports
2. City Clerk Report
3. City Manager Report
N. EXECUTIVE SESSION None.
O. ADJOURNMENT
https://www.cityofdekalb.com/AgendaCenter/ViewFile/Agenda/_04132020-1805
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