Now that there is a “legacy” deal for Morton Grove to purchase water from Evanston, it might be useful to look at some of the “nuts & bolts” surrounding this agreement.
One thing that needs to be considered is the new infrastructure that will be required to get the Evanston water to the pipes in Morton Grove. The last “conservative” estimate on the cost was somewhere in the neighborhood of $90,000,000, (which puts it in a pretty ritzy neighborhood, but we are, after all on the southern border of the northshore).
Since it is highly unlikely that the DiMaria administration has $90 mil in a mayonnaise jar in the administrator’s office, that will mean floating a bond to pay the freight… and here is where the two latest downgrades in the village’s bond rating comes back to bite Morton Grovers in the posterior.
Doing some quick figuring computing the $90,000,000 necessary to fund the construction and add to that the fees and costs that go to the underwriters along with the “juice”, (interest), that will have to be paid to borrow the money and the dividing that by the number of households in Morton Grove and we are looking at a property tax increase of somewhere between $1,800 – $2,000 per household.
Just goes to show you that “legacy deals”, just like elections, have consequences. Perhaps the administration would like to show more of its’ transparency and hold another town hall meeting… this one to explain just how, (and who), is going to pay the freight on this project.
…and speaking of projects, has anybody else noticed that there has been no work done on either the Moretti’s site, (where the equipment remains parked since early February), or the project on Waukegan rd, (where the site has been leveled and there is no equipment or activity in view).
We are now in prime construction time… the weather is cooperating and the projects are unlikely to build themselves. Maybe the village fathers would like to explain what the delay is.
The DiMaria administration claims many things as as fact.
What they have provided are either unsupported statements, or at best half-truths which they apparently believe that the voters of Morton Grove cannot see the difference between overblown empty promises and the reality of this administration’s failure.
-Four years ago, the DiMaria administration promised a revitalized economy increasing sales tax receipts.
What the DiMaria administration has delivered is higher cost of government and a continued stagnant business tax base.
-Four years ago, the DiMaria administration promised more and better senior services. What the DiMaria administration has delivered is reduced, or in some cases, eliminated senior programs.
-Four years ago, the DiMaria administration promised a revitalization of the area around the Metra station with shpping and other amenities. They were going to make a Morton Grove version of Edison Park.
What the DiMaria administration has delivered is a Metra station that is not advertised or promoted. There are no new businesses or amenities around the station and the area more closely resembles the Englewood neighborhood on Chicago’s south side rather than Edison Park.
-Four years ago, the DiMaria administration promised that they would move Morton Grove forward. Great sums of money, your money, was spent to hire outside consultants to create a village ‘brand’ and create business. An economic development officer was hired to address the “numerous” large parcels of land in the Village’s “Land Bank.
What has the DiMaria administration delivered? Take a stroll around town and look at the empty retail buildings and storefronts. These vacant properties generate zero sales tax revenue. The corner of Dempster and Waukegan is one of the most heavily traveled in this state and it’s corners sits there undeveloped and under performing. The industrial strip along Austin is a ghost town.
-Four years ago, the DiMaria administration promised that they would maintain village services while keeping your taxes low.
What has the DiMaria administration delivered? Fines and fees have increased with no appreciable commensurate increase in services. The DiMaria administration has certainly increased Village employees…we have certainly staffed up and created more office space for them. What has the increase in staff done to make things better?
-Four years ago, the DiMaria administration promised to address the crisis facing the funding of our police and fire departments.
What has the DiMaria administration delivered? The Police and Fire Pension funds are owed over $20 Million dollars. Where is this money going to come from? Without a business tax base the homeowners are the sole funding source. Right now the 5000 households owe $4000 each to this fund just to catch up!
-Four years ago, the DiMaria administration said that we were in dire need of a new police station because the current station was outmoded and presented a safety hazard to the residents of the neighborhood. Once more, the village went into the real estate market and purchased a manufacturing property on Lehigh for the purpose of moving the police into a new facility.
What has the DiMaria administration delivered? A vacant building on Lehigh and no solid plan made public as to when, (or if), the new police facility will happen, and, if it does, how it will be paid for?
– Four years ago, the DiMaria administration promised openness and transparency.
What has the DiMaria adminstration delivered? A Chicago style ‘political boss’ version of government has done little to nothing to stimulate business or improve Village finances. A use of village resources, (like the newsletter, village web site and village-wide mailings), as political propaganda to promote Village president DiMaria.
What has the DiMaria administration NOT delivered? There is no major food market within the village limits. There is a shopping center on the 3rd busiest corner
in Illinois going to ruin, even though the ownership was eager to reach a redevelopment agreement. There is a loss of the sense of community that up until 4 years ago had Morton Grove as one of the top 10 places to live in Illinois.
Has the DiMaria administration told the truth? Perhaps only half of it, and, as Benjamin Franklin said in Poor Richard’s Almanack; “Half the truth is often a great lie.”
Next Tuesday, April 4th, is the election that will determine the future of YOUR Morton Grove. Perhaps you need to ask yourself a question before you vote this time; “Are you and Morton Grove better off now than you were 4 years ago?”
“Are you FOR this proposal, or are you AGAINST it?”
Over the past 10 days or so, the opposing parties in the village April 4th election have been having a “He said, she said” joust over the village pension debt and village pension contributions.
Village president DiMaria and his mates repeatedly report how they have increased contributions to the pension obligations the past four years. The Action Party states “we contribute more towards our pension obligations than the minimum payment required by law.”
The “Independent Candidate” group point out that they must increase contributions, because every year the pension liability will continue to grow due to yearly increases in payroll and fluctuations in investment returns and that the amount they have contributed each year has not kept pace with the increasing liability.
We might want to remember a bit of fairly recent village history. In 2005, the Caucus Party, which at that time controlled village government, made a statement that the village did not have to pay the suggested yearly pension amount and tried to pass a budget drastically reducing pension obligation payments.It was this same Caucus Party that backed DiMaria for Mayor, and is now running the Action Party. It could be questioned if this is the reason for not dealing with the growing pension debt.
But there is another troubling issue that has not been addressed by either the Action Party or the “Independent Candidates”, an issue that goes directly to the heart of fiscal responsibility, white collar patronage and cronyism.
When village president DiMaria and his “rubber stamp” village board decided to replace the village manager, they did it in a way reminicent of the old Daley political machine. Without regard to the Supreme court decision in Elrod v Burns that decided that political patronage hiring was illegal, ( 427 US 347), without public notice, without a search for the most qualified candidate, without public debate or proper authorization, they chose and handed the six-figure position to the current village administrator. What is interesting, is that the current administrator happens to be a former village of Morton Grove fire chief who receives a pension paid for by the taxpayers amounting to about 80% of his former salary as fire chief.
Nice work, if you can get it. A six-figure village pension supplemented by a six-figure village salary, (which could qualify for yet another village pension in the future since this individual had served as village administrator before heading off to greener pastures in Skokie).
But wait, as they say in the late-night infomercials, there’s more. The Morton Grove fire chief that followed the current village administrator as fire chief before the current village manager was given the job was named as the “acting village manager”. After a bit of musical chairs, the second fire chief “retired”. It was at that point that village president DiMaria and his “rubber stamp” village board created a non-existent position of assistant to the village administrator. Again, without regard to the Supreme court decision in Elrod v Burns that decided that political patronage hiring was illegal, ( 427 US 347), without public notice, without a search for the most qualified candidate, without public debate or proper authorization, they chose and handed the new five-figure position to the recently retired fire chief. So, now we have the two highest administrative positions in the village held by previous village fire chiefs whose combined pensions alone come to over $200,000 per year… and whose combined salaries and fringe benefits equal or exceed that amount.
There is also a bit of strangeness when it comes to the village attorney, (who, coincidentally happens to be the village ethics officer). The position is shown in the village budget as a part time position, but if you look at the village budget documents, you will see that it qualifies for a pension… which normally would not be available to a part-time employee.
It’s good to have friends in high places. It’s a shame that, apparently the tax payers of Morton Grove have no such friend.
In February 2013 the daughters of Jack O’Brien, one of the Action Party founders, spoke out on who they feel would be their dad’s choice in the Feb. 26 election in a letter to a local news outlet. Here’s what they said:
As daughters of Jack O’Brien, who, with former Mayors Dan Scanlon and Dick Flickinger, founded the Action Party, we are quite dismayed by the turn of events within our Party which has led to the necessity of holding a primary.
It’s distressing that Trustee DiMaria:
did not have the majority vote for the party’s endorsement of his candidacy for Mayor;
did, when being interviewed, agree to support the slate put forth by the Screening Committee;
Is being supported by certain individuals who do not share the Action Party’s values, and in fact, have publicly denigrated the integrity of Mayor Scanlon and Jack O’Brien;
is now subjecting our village to the financial burden of a primary.
The Action Party has always prided itself on its inclusiveness. We have sought out the best and brightest of our opposition and invited them to get to know the Action Party better. Some accept, some do not.
In 2001, our dad, Mayor Scanlon, and other prominent Action Party members reached out to Dan Staackmann to determine his interest in joining the Action Party. Dan was elected as a Village Trustee in 2003, and ran for Village President in 2005…in a campaign marked by nastiness from our opponents—the same individuals who are now supporting Mr. DiMaria. Dan Staackmann was reelected to the position of Village Trustee in 2007 and, in 2009, ran for the office of Village President and was successful.
During very tough economic times, Dan Staackmann has stabilized the Village’s finances and balanced the budget. This is no small accomplishment! He has provided solid leadership, brought in businesses, improved infrastructure, streamlined operations, maintained services at a superior level, and has done it all with an outstanding Village staff and personnel…and with only a 3% property tax increase in the past four years.
Dan Staackmann is passionate about Morton Grove and has spent about half of his life in public service to our town. We feel Dan Staackmann would be Jack O’Brien’s choice for mayor, because Dan Staackmann is a man of integrity who gets the job done.
We urge you to cast your vote in the February 26th primary election for Dan Staackmann.
Lori O’Brien Gattorna and Terri O’Brien Cousar
Now, 4 years later, the situation in the village has not improved with Mr. DiMaria as village president. The promised transparency has not been forthcoming, but the current administration has scheduled a “Neighborhood Outreach Meeting” for Thursday, March 16th at the American Legion Civic Center.
This would be a great opportunity to ask Mr. DiMaria 10 questions “On the record”:
You have stated that the new water deal will save residents about $900,000 over 40 years. How much can we expect our water bills to drop every month?
You promised openness and transparency in your administration. Why weren’t there any village outreach meetings before this water deal was done informing us of the various options and costs?
In order to bring water in from Evanston we will need to build waterlines. How much is this going to cost taxpayers?
On February 12, 2015 Trustee Grear, speaking about the second lowering of the village bond rating stated: “It’s not earth shattering”. Isn’t it true that having a lower bond rating increases our cost of issuing bonds? Isn’t this earth shattering?
The owners of Moretti’s, contributors to the village president’s political party have cut a deal with the village. The deal cut by the village underwrites over 40% of the cost of building the pizzaria. Why has this administration given a “sweetheart deal” to this political contributor?
TIF funds from the Lehigh/Ferris TIF were redirected to the Heartland property, (luxury apartments on Waukegan road), whose owners were contributors to the village president’s political party. Why didn’t the administration use these funds to work a redevelopment deal with the owners of the Prairie View shopping center?
For four years the village was in negotiations with the owners of Prairie View shopping center to modernize and upgrade the property. The owners have reached out to the Village numerous times. In 2016, they reached out twice. In June 2016, they requested TIF assistance not to exceed $9 million. The Village ignored this request. In December 2016, wanting to start construction in the Fall of 2017, they offered to lower their request to $7.5 million. The Village has still not responded and the project remains stalled.Village officials are now saying that the owners of the shopping center have broken off negotiations, yet it is the village stalling the deal. If there was TIF money and other incentives available for Moretti’s and Heartland, why couldn’t funds be found to close a deal with the owners of Prairie View?
Four years ago you ran on the promise of increasing the tax base. You hired an economic development person to facilitate that, yet today, there are just as many, if not more vacant storefronts on Dempster and our EAV has gone down which increases the tax burden on every homeowner. How can you justify this failure to improve the business climate and tax base?
There is a village ethics ordinance that prohibits village officers from accepting political contributions from vendors and consultants, yet the village president’s political party has received thousands of dollars in donations from businesses, like Groot that have lucrative contracts with the village. Why isn’t the ethics ordinance enforced?
There is a state law prohibiting incumbent officials from voting themselves an increase in money during their term of office, yet this administration did exactly that a few months after taking office. How is this not a violation of the law?
The time has come for accountability, transparency and honesty instead of empty talk.
Village president DiMaria, during his last campaign fashioned himself as “the face of the village”.
Considering that his name and picture are plastered all over the quasi-political campaign literature laughingly referred to as the village newsletter, and his smiling visage appears in almost every local “news” story featured in “the Champion”, you can see that Mr. DiMaria takes his self-styled title very, very seriously.
There has been much talk in the national media lately about the narcissism and ego of a certain politician. Fair enough, but many of the same opinions and comments can be made regarding the Morton Grove Village President.
There’s little question that politicians wield vastly more power and control than the average citizen.
Moreover, privy to non-public, industry-related knowledge affords them all sorts of opportunities (blatantly unethical under Morton Grove ordinances) to substantially augment their income through “insider” trading and investments. For many of them the appetite for material riches can be insatiable.
Which helps explain why at times the liberty that some of them can’t resist taking with the public trust is so flagrant that (moralistically kicking and screaming) they actually end their careers behind bars. (Does the name “Rod Blagojovich ring a bell?)
One of the primary characteristics of narcissists is their exaggerated sense of entitlement.
It’s hardly surprising then that so many politicians (like our current village president) somehow think they “deserve” to game the system. After all, from their self-interested perspective, isn’t that what the system is for?
In their heavily self-biased opinion, if they want something, by rights it should be theirs. So, nothing if not opportunistic, they take from public and private coffers alike whatever they think they can get away with. (Consider the increase in stipend and “technology allowance” that the current administration granted itself without the benefit of public notice, public input or a public vote).
And given their grandiose sense of self, they’re inclined to believe they can get away with most anything. Sad to say, in today’s politics their judgment isn’t that skewed. Which is to say they’re much more often right than wrong.
Exploiting their privileged position in such a manner hardly leaves them plagued with guilt.
In general, guilt isn’t an emotion they’re prone to. How could they be if they feel entitled to the objects of their desire? In their minds their very ability to attain something must certainly mean it was merited. So it’s only when they’re caught with their hands deep in the till and their various efforts at denial have failed them, that they’re ready to admit responsibility, and posture remorse. But even then, whatever alligator tears they might shed are calculated to lessen the penalties for their misbehavior—or the time that otherwise they might be required to spend in lockup.
Ironically, despite the steadfast ethical values they profess, these politicians can be viewed as “moral relativists” in that what they adamantly deem immoral for others is yet somehow acceptable for themselves.
In our village, this raises it’s ugly head in playing “bait and switch” with TIF moneyearmarked for one project but funneled into a sweetheart deal behind the scenes, or changing a zoning/planning ordinance to pressure a landowner to take actions contrary to his/her own best interests, or something as simple as taking credit for increased businesses in town when there are still an overwhelming number of vacant retail properties on Dempster street, (Who are you gonna believe, Village President DiMaria or your own lying eyes?)
Whether we characterize the personal “allowances” they make as constituting a double standard or outright hypocrisy, these privileged concessions to self clearly broadcast their overblown sense of entitlement. Which is precisely what enables them to regard themselves as sufficiently exceptional to exclude themselves from the rules and standards they impose on others.
What is hard for us to understand is why the village trustees have forfeited any credit, let alone much of a mention, for any of the “so-called” achievements of the DiMaria administration. Little acknowledgment of trustee Grear, who is, after all, the senior and longest serving trustee. Little acknowledgment of trustee Witko, who, while secure in her seat is defending the position of village president DiMaria while he stands mute and doesn’t defend himself.
Strange… strange indeed.
The saying “Promises are made to be broken” rings particularly true for them. It’s become almost a joke that the devout pledges they made on the campaign trail bear only trifling resemblance to what they’ve done once in office.
The ability to convince voters that they’ll best represent their interests is what defines their success. Actually implementing what they avowed they’d tirelessly work for isn’t really an essential part of their agenda—which is typically well-hidden from constituents. In short, their campaigns measure how well they can dupe the public, not how well they’ll fulfill their responsibilities once declared victorious.
Perhaps the question Morton Grovers need to ask themselves is; “Are the village and myself better off now than we were 4 years ago”?
The Action Party, and village president DiMaria don’t want you asking that question, but, like in the scene from “The Wizard of Oz”, thunder; “Pay no attention to that man behind the curtain”.
There has been quite a bit of “buzz” lately about the Morton Grove/Niles/Evanston water “deal”. At the forefront of “news” coverage has been the claim by Morton Grove village president DiMaria that this agreement will “save” the residents of Morton Grove some Ninety Million dollars over the next 40 years. Of course, that doesn’t take into account that Evanston has already telegraphed a 12% or so increase between 2018 and 2010.
A Morton Grove Champion article states; “Morton Grove officials said at Monday’s meeting that they expect to save $90 million to $100 million over the life of the 40-year contract, which locks in the suburb’s water rates over that time period. The contract includes the option for two, 10-year extensions.”
Later on in the same article it says; “The two villages are expected to pay about $90 million for a new water transmission main in Evanston at McCormick Boulevard and Emerson Street and other infrastructure needed to deliver water from that city, according to officials from all three towns. That construction is expected to be financed with bond sales.”
Something here sounds like common core new math. Taking a conservative view, assuming that the “savings” projected are accurate, that would amount to a saving of $2,250,000 per year on the water rates, (about $265 per year per household).
However, in order to take advantage of these projected savings, the village will have to pay $90,000,000 to build a new water transmission main and other infrastructure needed to get the water from Evanston to Morton Grove… and that expense is expected to be financed by bond sales.
We need to remember that Morton Grove’s bond rating was recently lowered a second time under this administration which means that borrowing money by issuing bonds will cost taxpayers more money.
In another Morton Grove Champion article on the lowering of the bond rate, it mentioned that the village’s Equalized Assessed Valuation, (EAV) had dropped 22.4% over a five year period. Simply stated, the EAV is a multiplier used to determine what we pay in real estate property tax. A lower EAV means that each individual property owner must shoulder more of the tax burden.
Currently the village’s bond rating is Aa3, and, even if the administration can get a rate of 2.1% that would amount to an interest cost if $1,800,000 on $90,000,000 of municipal bonds, (and that doesn’t count the cost of underwriting the bonds which include such things as “Gross spread”, which is a complicated combination of what is called “take down” [the difference between what the underwriter pays out to the village and what they get for the bonds on the open market];”management fee; underwriter’s expenses and “Other fees”, [which may include such things as Financial/Municipal advisory fees, Bond counsel fees; Disclosure counsel fees, Rating agency fees, bond insurance/credit enhancement fees, trustee fees, escrow agent fees, feasibility study costs, auditor’s fees and printing costs]. Figuring out what it costs to issue bonds is, at best, complicated.) Spreads are usually quoted in terms of dollars or points per thousand bonds. For example, a gross spread of $5.00/$1,000 bond on a $90 million issuance would be $450,000: [($90 million /$1,000) *$5.00]. If you are feeling “nerdy” you might check out this article that somewhat explains the process.
If the current administration had kept it’s promise of transparency and had held public meetings telling us the upfront costs of the deal, at least taxpayers could have had some input on spending close to ONE HUNDRED MILLION TAX DOLLARS. Maybe village president DiMaria, trustee Grear and all the other Action Party trustees figured that it would be easier to ask forgiveness rather than permission.
So, let’s recap the math on this deal;
The “savings” estimated by village president DiMaria on the water deal: $90,000,000 over 40 years, ($2,250,000 per year).
The up-front cost of the “build out” for water main piping and other infrastructure: $90,000,000.
The cost of issuing the municipal bonds, (not counting “miscellaneous” “OTHER FEES”): $450,000 [approximately].
The cost of interest on the bonds, (assuming a 2.1% rate, recently Aa bonds have been returning between 3.3% and 3.7%): $1,800,000.
Wait a minute! What happened to that $90,000,000 savings that village president DiMaria spoke about?
“Savings” over 40 years: $90,000,000 build-out cost: -$90,000,000 “gross spread” to underwriter: -$450,000 interest, (based on 2.1% yield) -$1,800,000
Net cost to Morton Grove taxpayers: -$2,250,000, (or about $265 per household)
Doesn’t seem like much of a deal to us… sounds more like a fast shuffle.
In last weeks story we were going through how village president DiMaria self-styled himself as the face of the village and plastered his name on everything but a check to help pay for his political ambitions. Mr. DiMaria seems to have a bad case of alligator arms when it comes to picking up the check.
Last week’s story also recounted how Mr. DiMaria, Mr. Grear and the rest of the the Action Party took political contributions from those doing business with the village in violation of the ethics ordinance that they had all voted to accept and had pledged to honor.
We could easily see what the Action Party was getting out of the deal, but it could be rightfully questioned why the various businesses would ante up. Based on what we know, most likely they look at these political contributions as an investment with a great return.
Let us take, for example, the contributions from Heartland, (the parent of 8700 Waukegan LLC).
For a relatively small sum in contributions to the Action Party coffers, this developer will receive Six hundred thirty six thousand dollars in TIF money, (money that was originally earmarked to revitalize the Prairie View shopping center),
to underwrite the project which adds high-end rental apartments to an already saturated market. Looks like a smart investment on the developer’s part where their profit on the deal is apparently front-loaded with TIF money. According to Action Party president and village trustee, Billy Grear, in an article in the Pioneer Press on March 19, 2015; “It’s going to bring a new type of person into the village…”. We’re not quite sure what that means unless Mr. Grear is referring to folks gullible enough to think that this type of white-collar patronage is a good idea. It’s also interesting to consider who would want to spend $1,500 per month and up rent to live on one of the most heavily used major roads in the near north suburbs.
Let’s now take a look at the Dempster street property that is designated to be the new Moretti’s restaurant. This deal started out when the Action Party elected officials purchased the plot that used to house Maxwell’s and The Studio, two fairly popular Morton Grove eateries.
There were grandiose plans for a multi-use structure, but the original buyer was foreclosed on by the bank.
Through assistance by the village, the property was resold to Ted Mavrakis, a political contributor to mayor DiMaria for the purpose of building a Tilted Kilt restaurant.
Those plans fell through, and the village repurchased the parcel giving the mayor’s buddy a quick $500,000 profit while he retained ownership of approximately 30% of the site.
Subsequently, the Village (Action Party) Board makes a deal for the Village taxpayers to finance a Moretti’s Italian Restaurant and Gambling Café with a fifteen year, zero interest mortgage, (Moretti’s is a political donor to the Action Party).
Moretti’s will pay off the fifteen year mortgage by simply being in business for fifteen years. After fifteen years in business, without paying a dime of principle or interest, Moretti’s gets the property for free!
There was, however, a problem that raised it’s ugly head. This land too, was found to be contaminated and required EPA clean up.
When Moretti’s found out that the property was contaminated and would cost hundreds of thousands of dollars to clean up,they renegotiated the whole deal. The Action Party Board of Trustees & Mayor upped the taxpayer’s gift to Moretti’s to pay for the contamination problem to be cleaned up for the benefit of their political donor.
Morton Grovers are now stuck with an additional $300, 000 or more for clean up and with the other sweeteners, the total may cost the taxpayers several hundred thousand dollars more.
In a Morton Grove Champion article dated February 4th, 2017 it says; “…village officials agreed to sell the property for $1.525 million and loan Ala Carte Entertainment $636,000 to cover eligible tax-increment-financing expenses, Village Administrator Ralph Czerwinski said in a report to the board.If the Moretti’s location stays open for 20 years, Morton Grove officials also will forgive the loan to cover TIF-eligible business development expenses, Czerwinski said. The mortgage the village agreed to with Moretti’s also would be forgiven if the business stays open for 15 years, he said.”
So, lets do some simple math. $500,000 profit to Action Party contributor Ted Mavrokis when the village repurchased to property; a minimum of $300,000 to remediate the environmental problems at the property; a mortgage of $1.525 million on the property which will be forgiven if the restaurant remains open for 15 years and a loan of $636,000 which will be forgiven if the restaurant stays open for 20 years… that comes out to a total of $2,961,000 dollars returned on their political contribution investment with the Action Party.
Village president DiMaria has always bragged about his experience in “high finance”, whether it was when he traded on the Chicago Merchantile Exchange in the past or now in his current career as a mortgage broker. He certainly has provided an astronomical return on investment for those who made political contributions to him and his Action Party… for Morton Grove taxpayers… not-so-much.