The Skokie Park District is weighing borrowing options to fund two major capital improvement projects to cover some $12.8 million — well over half of the estimated overall cost.
The two projects — the renovation of the Weber Leisure Center and the development of Skokie Sports Park East — are estimated to cost a maximum of $21 million, said Skokie Park District Executive Director John Ohrlund.
The Park District estimates it will be able to set aside $8.2 million from its reserve funds to contribute to the project, but that leaves the remainder to be borrowed, Ohrlund said.
The Skokie Park Board already approved a renovation plan for the Weber Leisure Center estimated to cost $3.5 million although Park District officials used $4 million to calculate their borrowing needs.Last month, the Park Board looked at two plans for developing Skokie Sports Park East near Oakton Street and McCormick Boulevard. The 17-acre park, owned by the Metropolitan Water Reclamation District and leased to the Park District, has undergone a major environmental cleanup over the last few years.
The lower-end plan for the park was estimated to cost $13 million — up to $15 million with alternatives included. The higher-end plan or "the full build-out" was estimated to cost $21 million — up to $24 million to $24.5 million with alternatives included.
Although the Park Board has not officially taken action on Skokie Sports Park East, the public, commissioners and Park District leaders have weighed in during a lengthy planning process. Ohrlund said he was able to sit down with the architects and work with the smaller plan to come up with a cost estimate.
"We massaged some things and created a blended plan," he said.
That plan, he said, is expected to cost $16 million and could go up to $17 million if additional land-banked parking is included.
Working with Park District Superintendent of Business William Schmidt, John Miller from Ehlers and Associates, the district's municipal financial advisory company, recently recommended an option for funding the two projects.
Miller said issuing general obligation alternative revenue source bonds, which the Park District has done in the past, would be the best way to acquire new money needed for renovating the Weber Leisure Center and developing Skokie Sports Park East.
Under this option, Miller said, property taxes would need to be abated each year, and the actual debt service payments would come from an alternate revenue source.
Park District officials said they do not anticipate having to raise property taxes and would pay back on the borrowing from Park District revenue.
The Park Board would pass an ordinance signaling its intent to borrow money over a certain period of time, Miller said. If interested, residents would have 30 days to petition against the project and force the issue on the ballot by getting at least 7.5 percent of registered voters to sign, he said.
A group of Skokie School District 73.5 residents recently tried such a petition drive to try to give voters the final say on issuing bonds for building additions. But the group dropped its petition drive as the District 73.5 project is moving forward now.
"It's very unusual for that sort of a petition against a project to pass," Miller said.
This funding option would allow the district to borrow well into the future — probably for 18 to 20 years out, he said.
"You have payments (from bonds) that are due and are already obligated," Miller said. "You would just issue additional alternate bonds as the back end of that program."
Other funding options presented but not recommended by Miller included a direct voter referendum — placing the question of issuing bonds on the ballot, as well as issuing general obligation limited tax bonds, which would not require a voter referendum, but would fail to provide enough new money for what the district seeks, he said.
According to Miller, the district could also issue debt certificates, which would allow the district to borrow money, but there would be no source of payment other than current revenues. Issuing revenue bonds where borrowing is payable from an enterprise such as fees that come from an ice skating rink would be another funding option, he said, but that only works for smaller needs such as new equipment.
Source : chicagotribune.com