Today we continue to look at the August 2, 2016, minutes of the Crystal Lake Civic Center Authority.
Questions and Answers/ Discussion
Mayor Shepley advised that the CCA’s consideration was basically about transferring a loan from Home State Bank to bonds, which are essentially still going to be a loan from Home State Bank and paid by the Raue Center, as the loan is being paid now.
He stated it would not alleviate the Raue Center’s responsibility, and if the Raue Center were to not agree, that would be the end of the discussion and they would have to pay Home State Bank back on their own.
Mr. Reece stated that this was basically a moral obligation and not a legal one.
Mr. Hayden asked if the CCA would need to work out an amortization schedule and Mayor Shepley stated that would be part of the bond issue.
He stated that the Raue would need to agree to the bond issue, and in all likelihood, the transfer of the debt from a note to bonds would cut their annual expenses in half, and it would be good them. Mr. Affrunti stated that Home State Bank is holding an unsecured loan for over $2 million, and Mayor Shepley stated that was correct.
Mr. Wickham asked if Home State Bank is uncomfortable with the present situation and Mayor
Shepley stated that they are.
Mr. Hayden recalled that the Raue Center had plans to expand to the south in previous years and asked if they were still looking to do that.
Mayor Shepley stated that was off the table because they had planned to use a $2 million grant from the State of Illinois, which they did not receive.
In response to Mr. Hayden’s question as to who owns the “Raue House” where the Downtown Main Street Organization has their offices, Finance Director George Koczwara advised that it is owned by the Downtown Main Street Organization.
Mr. Affrunti stated that if Home State Bank wishes to make a move or be taken over, this situation would be a major stumbling block.
Mr. Reece stated that the Raue Center’s cash flow could be making them nervous as well. Mayor Shepley confirmed that Home State Bank was uncomfortable with having an unsecured loan for $2.4 million, especially in consideration of the ongoing dilemma of profits for arts organizations.
Mayor Shepley stated that the reason he had assembled the CCA again was to calm the waters and give everyone what they need.
He stated that he believes there is a strong moral obligation, which is larger than any legal obligation, because the Raue Center has basically carried by Home State Bank for many years.
He stated that this information may just be coming to light because of concerns about the Raue Center’s cash flow.
City Manager Gary Mayerhofer advised that the City will provide staff support to the CCA, as well as fiduciary insurance and legal representation.
Ms. Waggoner asked if the CCA would have access to the Raue Center’s financial statements and Mayor Shepley stated that they would. Mr. Mayerhofer stated that the City already have some of the records and would obtain the rest for the CCA.
Mr. Hayden asked if Home State Bank would pass an audit and Mayor Shepley stated that they
Ms. Waggoner added that the loan has probably already been flagged and Home State Bank is saying that they are meeting the Community Investments Act requirements.
Mr. Reece stated that Home State Bank has weathered much worse than this.
Mayor Shepley stated that that the Raue Center would have to cooperate, but it would be to their benefit and save them moneyon a month to month basis, but it would not be a windfall.
This would allow them to focus on what they need to do, and provide a comfort level to Home State Bank.
In response to Mr. Hayden’s questions, Mayor Shepley stated that the Civic Center Authority statute for the City of Crystal Lake had been crafted in Springfield with bits and pieces from other CCA statutes and the enabling statute, and was sometimes difficult to interpret.
He advised that once the CCA Board straightens out the current situation, it should have no more to do for many years.
Mr. Hayden asked if the CCA was presently in default because the CCA statute states that the Board shall meet at least once a month.
Mr. Filippini clarified that someone could file a mandamus action to force the CCA to meet, but the CCA did not need to meet if there was no reason to do so.
Date/Time of Next Meeting
The CCA Board agreed to meet again on September 6, 2016 at 5:30 p.m. Mayor Shepley stated that they would be provided a meeting packet prior to that date.
Selection of Chairman, Vice-Chairman and Secretary
Mr. Filippini advised that since this matter had been published on the agenda, the CCA could take action or wait until the next meeting.
Lisa Waggoner nominated Tom Hayden for Chairman, and Tom Hayden nominated Lisa Waggoner for Chairman.
Ms. Waggoner stated that she did not wish to be Chairman.
Gary Reece nominated Tom Hayden for Chairman and Greg Danielson seconded. All voted yes.
Tom Hayden nominated Lisa Waggoner as Vice-Chairman. Greg Danielson seconded. All voted yes.
Since the City would provide for taking the meeting minutes, it was determined that the CCA did
not need to select a Secretary.