2017_OP_Fall_Winter Newsletter

FINANCE – BUDGET

FINANCE – SMART CHOICES

BUDGETPROCESS

Pilewski and Associates, an outside financial consultant, evaluated the take out and wrote, “…the take out offer allows the village to pay off a line of credit/term loan and provides additional cash flow to support village initiatives. Ninety 7 Fifty on the Park has been a catalyst for additional development, including a University of Chicago Medical Center, a 520 space multi-level public parking facility with 12,000 square feet of commercial space and a proposed 80,000 square foot entertainment and mixed use building.” This development was highlighted by the Urban Land Institute as a case study of successful public-private financing initiatives. The financing structure defined in the redevelopment agreement included a $38.2 million developer loan, a $25 million village project incentive and $2 million in equity provided by the developer, for a total project cost not to exceed $65.2 million. Ninety 7 Fifty was a catalyst for development throughout Downtown Orland Park, credited with attracting the University of Chicago, Mariano’s, the new theater complex and other developments.

In early July, the Village of Orland Park Board of Trustees voted unanimously to accept a take out offer from Flaherty and Collins, developers of Ninety 7 Fifty on the Park, the luxury apartment complex at 143rd Street and LaGrange Road. This take out offer, in the amount of $50.5 million, allows the village to recoup its investment in the development. The village will realize approximately a $6.8 million gain over its total investment in this development, including future tax increment generated. In 2011, the Orland Park Board of Trustees authorized the financing of Ninety 7 Fifty on the Park and created a public-private partnership resulting in 295 luxury residential lease units, 4,000 square feet of first floor commercial space, 8,666 square feet of residential amenity space, and 365 onsite parking spaces, situated on 3.4 acres of village-owned land. Ninety 7 Fifty has exceeded occupancy expectations, with a current occupancy rate of approximately 97 percent Average residential lease rates have increased significantly since opening with current lease rates ranging from $1,440 to $2,440.

IN DECEMBER OF EACH YEAR, THE VILLAGE BOARD FORMALLY APPROVES BALANCED OPERATING AND CAPITAL BUDGETS FOR THE FOLLOWING YEAR. The village utilizes the target based budget method for operating funds; therefore, the budget process begins with the calculation of available sources. Fixed costs are applied against these available sources and the net amount available is allocated to the Village’s operating departments to fund variable operating costs. Available sources include fund balance remaining after setting aside Board authorized reserve amounts, as well as revenue projected for the new fiscal year. The village’s budget policy is to estimate revenues conservatively and to maintain a spending level less than or equal to current year resources. The issuance of short or long term debt will only occur if needed to fund long-term capital projects and will not be utilized to fund the village’s operating budget. The village continues to maintain reserves in its operating funds that

meet or exceed Board approved fund balance and reserve policy levels. For more information about the Village of Orland Park budget process, please visit www.orlandpark.org.

• Budget Adoption (December 4, 2017)

• Operating Budget Hearings • Capital Budget Hearings • Revenue Hearing

NOV./ DEC.

• Budget Team reviews budget priorities with officials. This is the point at which village-wide priorities of officials are captured and included in the discussions

“From the beginning, Ninety 7 Fifty has exceeded occupancy expectations, with an occupancy rate at the time of the take out of approximately 97 percent. Average residential lease rates have increased significantly since opening with lease rates at the time of the take out ranging from $1,440 to $2,440. The village board has always recognized the responsibility it has in serving the taxpayers of Orland Park. The success of this development is a huge accomplishment for the village.”

SEPT./ OCT.

• Budget Team reviews results with departments

AUGUST

• Pre-budget committee meetings with Budget Team,

department directors and village officials

JULY

2017

Trustee Carole Griffin Ruzich CHAIR OF THE VILLAGE’S FINANCE COMMITTEE

MAY/ JUNE

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