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T1-87 (2)
-T1 - g� ORDINANCE NO. G22-75 AN ORDINANCE establishing procedures to be followed by the City of Elgin, Kane and Cook Counties , Illinois , in issuing non-referendum general obligation bonds which ordinance was amended by Ordinance No . G14-80 adopted on January 28 , 1980 , by Ordinance No. 64-80 adopted on October 8, 1980 and by Ordinance No. G39-82 adopted on July 28 , 1982 (Ordinance No. G22-75 as so amended being referred to hereinafter as the "Enabling Ordinance" ) ; and WHEREAS, the City Council of the City ( the "City Council" ) has heretofore determined and does hereby determine that it is necessary and advisable for the public health, safety, welfare , and convenience of residents of the City that the City undertake to fund street and sidewalk improvements , the purchase of a fire truck and make certain park improvements (which improvements, together with all related expenses as hereinafter more specifically enumerated, may be referred to as the "Project" ) , all in accordance with the preliminary plans and specifications prepared by engineers and approved by the City Council and now on file with the City Clerk ; and WHEREAS, the estimated cost to the City of the Project is the sum of fl , 700 , 000 and estimated investment earnings; and WHEREAS, there are insufficient funds of the City on (2, hand and lawfully available to pay such costs of the Project ; and WHEREAS, the City Council does hereby determine that it is advisable and in the best interests of the City to borrow -2- $2,700,000 at this time and, in evidence of such borrowing, issue its full faith and credit bonds in the principal amount of $2 ,700 ,000; NOW THEREFORE Be It Ordained by the City Council of the City of Elgin, Kane and Cook Counties, Illinois, in the exercise of its home rule powers and in accordance with the Enabling Ordinance, as follows: Section 1. Definitions The following words and terms used in this Ordinance shall have the following meanings unless the context or use clearly indicates another or different meaning is intended: "Bond" or "Bonds" means one or more, as applicable, of the $2,700 , 000 General Obligation Corporate Purpose Bonds, Series 1987, authorized to be issued by this Ordinance. "Bond Fund" means the Bond Fund established and defined in Section 11 of this Ordinance. i'Bond Register" means the books of the City kept by the Bond Registrar to evidence the registration and transfer of the Bonds. "Bond Registrar" means The First Commercial Bank, Chicago, Illinois , a bank having trust powers , or a successor thereto or a successor designated as Bond Registrar hereunder . "City" means the City of Elgin, Kane and Cook Counties, Illinois. "City Council" means the City Council of the City. -3- "Code" means the Internal Revenue Code of 1986 . "Ordinance" means this Ordinance , numbered TP17 , and passed by the City Council on the 9th day of June , 1987 . "Paying Agent" means The First Commercial Bank , Chicago, Illinois , a bank having trust powers , or a successor thereto or a successor designated as Paying Agent hereunder . "Project" means the improvement project to fund street and sidewalk improvements , the purchase of a fire truck and making certain park improvements . "Project Fund ( 1987) " means the Project Fund established and defined in Section 11 of this Ordinance . "Tax-exempt" means , with respect to the Bonds , the status of interest paid and received thereon as not includible in the gross income of the owners thereof under the Code for federal income tax purposes except to the extent that such interest will be taken into account in computing an adjustment used in deter- mining the' alternative minimum tax for certain corporations, in computing the environmental tax imposed on certain corporations and in computing the "branch profits tax" imposed on certain foreign corporations . Section 2. Incorporation of Preambles The City Council hereby finds that all of the recitals contained in the preambles to this Ordinance are true, correct and complete and does incorporate them into this Ordinance by this reference . -4- C Section 3. Determination To Issue Bonds It is necessary and in the best interests of the City to acquire and construct the Project , to pay all related costs and expenses incidental thereto, and to borrow money and issue the Bonds for such purposes . It is hereby found and determined that such borrowing of money is necessary for the welfare of the government and affairs of the City, is for a proper public purpose or purposes and is in the public interest , and these findings and determinations shall be deemed conclusive. Section 4. Bond Details For the purpose of providing for the payment of the Eti costs of the Project and to pay all related costs and expenses incidental thereto, there shall be issued and sold the Bonds in the principal amount of $2 , 700 ,000 . The Bonds shall each be designated "General Obligation Corporate Purpose Bond, Series 1987" ; be dated July 1 , 1987 ; and shall also bear the date of authentication thereof . The Bonds shall be in fully registered form, shall be in denominations of $5 , 000 or integral multiples thereof ( but no single Bond shall represent principal maturing on more than one date ) , shall be numbered consecutively in such fashion as shall be determined by the Bond Registrar , and shall become due and payable serially on January 1 of each of the years and in the amounts ( without being subject to the right of prior redemption) and bearing interest at the rates percent per annum as follows : -5- 4:: Year Amount ( $) Rate ( %) 1990 600, 000 5 . 30 1991 650, 000 5 . 60 1992 700, 000 5 . 80 1993 750, 000 6 . 00 The Bonds shall bear interest from the later of their dated date as herein provided or from the most recent interest payment date to which interest has been paid or duly provided for , such interest (computed upon the basis of a 360-day year of twelve 30-day months ) being payable on January 1 and July 1 of each year , commencing on July 1, 1988 . Interest on each Bond shall be paid by check or draft of the Paying Agent, payable upon 440 presentation thereof in lawful money of the United States of America , to the person in whose name such Bond is registered at the close of business on the 15th day of the month next preceding the interest payment date and shall be paid by check or draft of the Paying Agent, payable upon presentation in lawful money of the United States of America, mailed to the address of such Registered Owner as it appears on such registration books or at such other address furnished in writing by such Registered Owner to the Bond Registrar . The principal of the Bonds shall be pay- able in lawful money of the United States of America upon pre- sentation thereof at the principal corporate trust office of the Paying Agent in the City of Chicago, Illinois, or at successor Paying Agent and locality . -6- Section 5. Execution; Authentication The Bonds shall be executed on behalf of the City by the manual or facsimile signature of its Mayor and attested by the manual or facsimile signature of its City Clerk , as they may determine, and shall have impressed or imprinted thereon the corporate seal or facsimile thereof of the City. In case any such officer whose signature shall appear on any Bond shall cease to be such officer before the delivery of such Bond, such signa- ture shall nevertheless be valid and sufficient for all purposes , the same as if such officer had remained in office until de- livery. All Bonds shall have thereon a certificate of authen- tication, substantially in the form hereinafter set forth, duly executed by the Bond Registrar as authenticating agent of the City and showing the date of authentication. No Bond shall be valid or obligatory for any purpose or be entitled to any secu- rity or benefit under this Ordinance unless and until such certi- ficate of . authentication shall have been duly executed by the Bond Registrar by manual signature, and such certificate of au- thentication upon any such Bond shall be conclusive evidence that such Bond has been authenticated and delivered under this Ordi- nance . The certificate of authentication on any Bond shall be deemed to have been executed by it if signed by an authorized officer of the Bond Registrar , but it shall not be necessary that rthe same officer sign the certificate of authentication on all of the Bonds issued hereunder . -7- C Section 6 . Registration of Bonds; Persons Treated as Owners The City shall cause books ( the "Bond Register" ) for the registration and for the transfer of the Bonds as provided in this Ordinance to be kept at the principal corporate trust office of the Bond Registrar in the City of Chicago, Illinois , which is hereby constituted and appointed the registrar of the City for the Bonds . The City is authorized to prepare, and the Bond Registrar or such other agent as the City may designate shall keep custody of , multiple Bond blanks executed by the City for use in the transfer and exchange of Bonds . �.- Any fully registered Bond or Bonds may be exchanged upon presentation at the principal corporate trust office of the Bond Registrar , in the City of Chicago, Illinois , duly endorsed by, or accompanied by a written instrument or instruments autho- rizing such exchange in form satisfactory to the Bond Registrar and duly executed by, the registered owner or his attorney duly authorized in writing, for a like aggregate principal amount of Bond or Bonds of the same maturity of other authorized denomina- tions and of the same interest rate . Upon surrender for transfer of any Bond at the prin- cipal corporate trust office of the Bond Registrar , in the City of Chicago, Illinois , duly endorsed by, or accompanied by a writ- (.17 ten instrument or instruments of transfer in form satisfactory to the Bond Registrar and duly executed by, the registered owner or -8- C his attorney duly authorized in writing, the City shall execute and the Bond Registrar shall authenticate , date and deliver in the name of the transferee or transferees a new fully registered Bond or Bonds of the same maturity of authorized denominations , for a like aggregate principal amount and interest rate . The Bond Registrar shall not be required to transfer or exchange any Bond during the period from the 15th day of the month next preceding an interest payment date to such interest payment date . The execution by the City of any fully registered Bond shall constitute full and due authorization of such Bond, and the Bond Registrar shall thereby be authorized to authenticate, date and deliver such Bond; provided, however , the principal amount of Bonds of each maturity authenticated by the Bond Registrar shall not at any one time exceed the authorized principal amount of Bonds for such maturity less the amount of such Bonds which have been paid. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of the principal of or interest on any Bond shall be made only to or upon the order of the registered owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the (:: liability upon such Bond to the extent of the sum or sums so paid . -9- No service charge shall be made for any transfer or exchange of Bonds , but the City or the Bond Registrar may require payment of a sum sufficient to cover any tax or other govern- mental charge that may be imposed in connection with any transfer or exchange of Bonds . Section 7 . Form of Bond The Bonds shall be prepared in compliance with the National Standard Specifications for Fully Registered Municipal Securities prepared by the American National Standards Institute and shall be in substantially the form hereinafter set forth; provided, however , that if the text of the Bond is to be printed in its entirety on the front side of the Bond, then paragraph [ 2 ] and the legend "See Reverse Side for Additional Provisions" shall be omitted and paragraphs [ 6 ] through [ 9 ] shall be inserted .immediately after paragraph [ 1 ] : [Form of Bond - Front Side ] REGISTERED REGISTERED NO. $ UNITED STATES OF AMERICA STATE OF ILLINOIS COUNTIES OF KANE AND COOK CITY OF ELGIN GENERAL OBLIGATION CORPORATE PURPOSE BOND, SERIES 1987 See Reverse Side -10- C for Additional Provisions Interest Maturity Dated Rate: % Date: January 1 , Date: July 1, 1987 [CUSIP] Registered Owner : Principal Amount : [ 1 ] KNOW ALL PERSONS BY THESE PRESENTS that the City of Elgin, Kane and Cook Counties , Illinois , a municipality and political subdivision of the State of Illinois ( the "City" ) , hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above , or registered assigns as hereinafter provided, on the Maturity Date identified 0 above , the Principal Amount identified above and to pay interest (computed on the basis of a 360-day year of twelve 30-day months ) on such Principal Amount from the later of the Dated Date of this Bond identified above or from the most recent interest payment date to which interest has been paid or duly provided for at the Interest Rate per annum identified above , such interest to be payable on January 1 and July 1 of each year , commencing July 1 , 1988 , until said Principal Amount is paid. The principal of this Bond is payable in lawful money of the United States of America upon presentation hereof at the principar corporate trust office of The First Commercial Bank , Chicago, Illinois , as paying agent ( the "Paying Agent" ) . Payment of interest shall be made to the Registered ' Owner hereof as shown on the registration books of the City maintained by The First Commercial Bank , Chicago, Illinois ( the "Bond Registrar" ) , at the close of business on the 15th day of the month next preceding the interest payment date and shall be paid by check or draft of the Paying Agent , payable upon presentation in lawful money of the United States of America, mailed to the address of such Registered Owner as it appears on such registration books or at such other address furnished in writing by such Registered Owner to the Bond Registrar . [ 2 ] Reference is hereby made to the further provisions of this Bond set forth on the reverse hereof , and such further provisions shall for all purposes have the same effect as if set forth at this place . [ 3 ] It is hereby certified and recited that all condi- tions , acts and things required by the Constitution and Laws of the State of Illinois to exist or to be done precedent to and in -11- the issuance of this Bond have existed and have been properly done, happened and been performed in regular and due form and time as required by law; that the indebtedness of the City, re- presented by the Bonds, and including all other indebtedness of the City, howsoever evidenced or incurred, does not exceed any constitutional or statutory or other lawful limitation; and that provision has been made for the collection of a direct annual tax, in addition to all other taxes, on all of the taxable prop- erty in the City sufficient to pay the interest hereon as the same falls due and also to pay and discharge the principal hereof at maturity. ( 4 ] This Bond shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by the Bond Registrar . [ 5 ] IN WITNESS WHEREOF the City of Elgin, Kane and Cook Counties, Illinois, by its City Council, has caused this Bond to be executed by the manual or duly authorized facsimile signature of its Mayor and attested by the manual or duly authorized facsimile signature of its City Clerk and its corporate seal or a facsimile thereof to be impressed or reproduced hereon, all as appearing hereon and as of the Dated Date identified above. [Facsimile Signature] Mayor , City of Elgin Kane and Cook Counties, Illinois Attest : [Facsimile Signature] City Clerk, City of Elgin Kane and Cook Counties, Illinois (SEAL) -12- Date of Authentication: , CERTIFICATE OF Bond Registrar and Paying Agent : AUTHENTICATION The First Commercial Bank Chicago, Illinois This Bond is one of the Bonds described in the within mentioned Ordinance and is one of the $2 ,700 , 000 General Obligation Corporate Purpose Bonds, Series 1987, having a Dated Date of July 1, 1987, of the City of Elgin, Kane and Cook Counties, Illinois. THE FIRST COMMERCIAL BANK, as Bond Registrar By Authorized Officer (Form of Bond - Reverse Side] City of Elgin, Kane and Cook Counties, Illinois General Obligation Corporate Purpose Bond Series 1987 [ 6 ] This bond is one of a series of bonds ( the "Bonds" ) in the aggregate principal amount of $2,700 , 000 issued by the City for the purpose of paying the costs of a Project and of paying expenses incidental thereto, all as described and defined in the ordinance authorizing the Bonds ( the "Ordinance" ) , pursuant to and in all respects in compliance with the applicable provisions of Section 6 of Article VII of the Constitution of the State of Illinois, with the Procedural Ordinances of the City adopted in the exercise of its home rule powers in issuing bond:. without referendum, and with the Ordinance, which has been duly passed by the City Council and published, in all respects as by law required. ( 7 ] The Bonds are issued in fully registered form in the denominations of $5 ,000 or authorized integral multiples thereof . This Bond may be exchanged upon presentation and sur- render for cancellation hereof at the principal corporate trust -13- office of the Bond Registrar in the City of Chicago, Illinois , but only in the manner , subject to the limitations and upon pay- ment of the charges provided in the Ordinance, for a like aggre- gate principal amount of Bonds of the same maturity and interest rate of other authorized denominations . This Bond is transfer- able by the Registered Owner hereof in person or by his attorney duly authorized in writing at the principal corporate trust office of the Bond Registrar in the City of Chicago, Illinois , but only in the manner , subject to the limitations and upon pay- ment of the charges provided in the Ordinance, and upon pre- sentation and surrender for cancellation of this Bond . Upon such transfer a new Bond or Bonds of authorized denomination( s ) of the same maturity and interest rate and for the same aggregate prin- cipal amount will be issued to the transferee in exchange there- for . [ 8 ] The Bond Registrar shall not be required to trans- fer or exchange any Bond during the period from the 15th day of the month next preceding an interest payment date to such inter- est payment date . [ 9 ] The City, the Bond Registrar and the Paying Agent may deem and treat the Registered Owner hereof as the absolute owner hereof for the purpose of receiving payment of or on account of principal hereof and interest due hereon and for all other purposes , and the City, the Bond Registrar and the Paying Agent shall not be affected by any notice to the contrary. -14- ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells , assigns and transfers unto ( Name and Address of Assignee ) the within Bond and does hereby irrevocably constitute and appoint as attorney to transfer the said Bond on the books kept for registration thereof with full power of substitution in the pre- mises . Dated: Signature guaranteed: NOTICE: The signature to this transfer and assignment must cor- respond with the name of the Registered Owner as it appears upon the face of the within Bond in every particular , without alteration or enlargement or any change whatever . Section 8 . Tax Levy For the purpose of providing funds required to pay the interest on the Bonds promptly when and as the same falls due, and to pay and discharge the principal thereof at maturity, there is hereby levied upon all of the taxable property within the City, in the years for which any of the Bonds are outstanding , a direct annual tax sufficient for that purpose ; and there is here- by levied on all of the taxable property in the City, in addition to all other taxes , the following direct annual tax, to-wit : -15- For the Year A Tax Sufficient to Produce the Sum of : 1987 $230 , 700 . 00 for interest up to and including January 1, 1989 1988 $753 , 800. 00 for principal and interest 1989 $772 , 000. 00 for principal and interest 1990 $785 , 600.00 for principal and interest 1991 $795 , 000. 00 for principal and interest Interest or principal coming due at any time when there are insufficient funds on hand from the foregoing tax levy to pay the same shall be paid promptly when due from current funds on hand in advance of the collection of said taxes herein levied; and when said taxes shall have been collected, reimbursement shall be made to said funds in the amount so advanced. The City covenants and agrees with the purchasers and registered owners of the Bonds that so long as any of the Bonds remain outstanding , the City will take no action or fail to take any action which in any way would adversely affect the ability of the City to levy and collect the foregoing tax levy. The City and its officers will comply with all present and future applicable laws in order to assure that the foregoing taxes may be levied, extended and collected as provided herein and deposited into the Bond Fund. Section 9. Filing with the County Clerks Promptly, as soon as this Ordinance becomes effective , a copy hereof, certified by the City Clerk of the City, shall be filed with the County Clerks of The Counties of Kane and Cook , Illinois ; and each of said County Clerks shall in and for each of the years 1987 to 1991 , inclusive, ascertain the rate per cent required to produce the aggregate tax hereinbefore provided to be -16- levied in each of said years ; and each of said County Clerks shall extend the same for collection on the tax books in con- nection with other taxes levied in said years in and by the City for general corporate purposes of the City; and in said years such annual tax shall be levied and collected by and for and on behalf of the City in like manner as taxes for general corporate purposes for said years are levied and collected, and in addition to and in excess of all other taxes . Section 10. Sale of Bonds The Bonds shall be executed as in this Ordinance pro- vided as soon after the passage hereof as may be, shall be de- posited with the City Treasurer , and shall be by the Treasurer delivered to the purchaser thereof , namely, The Northern Trust Company, Chicago, Illinois , upon payment of the purchase price agreed upon, the same being not less than $2 , 681 , 920, plus accrued interest to date of delivery . The contract for the sale of the Bonds to the purchaser is hereby in all respects ratified, approved and confirmed, it being hereby declared that no person holding any office of the City, either by election or appointment, is in any manner interested, either directly or indirectly, in his own name or the name of any other person, association, trust or corporation, in such contract . Section 11 . Creation of Funds and Appropriations -17- • • The proceeds derived from the sale of the Bonds shall be used as follows : A. Accrued interest and premium, if any, on the Bonds shall be and is hereby appropriated for the purpose of pay- ing the first interest due on the Bonds and to such end is hereby ordered to be deposited into the "General Obligation Corporate Purpose Bonds , Series 1987 , Bond Fund" ( the "Bond Fund" ) , hereby created, which shall be the fund for the payment of principal of and interest on the Bonds . Taxes received for the payment of the Bonds shall be deposited into the Bond Fund and used solely and only for the purpose of paying the Bonds . Interest received from investments on deposit in the Bond Fund shall be retained therein as a credit against future deposits or transferred to such other fund as the City Council may from time to time determine . B. The balance of the proceeds of the Bonds shall be set aside in a separate fund, hereby created, and designated as the "Project Fund ( 1987 ) . " Money in said Fund shall be used to pay all costs of the Project and all costs and expenses incidental or allocable or related thereto, including all costs of issuance of the Bonds . Section 12. Not Private Activity Bonds None of the Bonds is a "private activity bond" as de- fined in Section 141 (a) of the Code . In support of such con- clusion, the City certifies , represents and covenants as follows : A. None of the proceeds of the Bonds are to be used, directly or indirectly, in any trade or business carried on by any person other than a state or local governmental unit . B. No direct or indirect payments are to be made on any Bond with respect to any private business use by any person other than a state or local governmental unit . C. None of the proceeds of the bonds are to be used, directly or indirectly, to make or finance loans to persons other than a state or local governmental unit . 1 D. No user of the Project other than the City will use the same on any basis other than the same basis as the general public; and no person will be a user of the Project as a result of ( i ) ownership or ( ii ) actual or beneficial use pursuant to a lease , a management or incentive payment contract , or ( iii ) any other arrangement . -18- Section 13. General Arbitrage Covenants The City represents and certifies as follows with re- spect to the Bonds : A. The City has heretofore incurred, or within six months after delivery of the Bonds expects to incur , substantial binding obligations with respect to the Project to be paid for with moneys received from the sale of the Bonds , said binding obligations comprising binding contracts for the Project in not less than the amount of $100 , 000 . B. All of the proceeds of the Bonds, and investment (:: earnings thereon, will be expended on or before June 1 , 1990 for the purpose of paying the costs of the Project , including expenses incidental thereto, said date being within three years following the date of issue of the Bonds . C. Work on the Project is expected to proceed with due diligence to completion. D. No acquisition or improvement made as a part of the Project has been or is expected to be sold or otherwise disposed of in whole or in material part prior to the last maturity of the Bonds . "Material part" means ( i ) land, or ( ii ) any improvement , or ( iii ) personal property or fixtures in excess of that which is expected to be sold, traded in or discarded upon wearing out or becoming obsolete . (77 E. The City will receive $2 , 681 , 920 plus accrued interest from the sale of the Bonds . Accrued interest and -19- premium, if any, on the Bonds is to be deposited into the Bond Fund and used to pay first interest coming due on the Bonds . F. Except for the Bond Fund, the City has not created or established and will not create or establish any sinking fund, reserve fund or any other similar fund to provide for the payment of the Bonds . The Bond Fund has been established and will be funded in a manner primarily to achieve a proper matching of tax revenues and debt service, and will be depleted at least annually to an amount not in excess of 1/12 the particular annual debt service on the Bonds . Money deposited in the Bond Fund will be spent within a 13-month period beginning on the date of deposit , and investment earnings in the Bond Fund will be spent or with- drawn from the Bond Fund within a one-year period beginning on the date of receipt . G. The foregoing statements of expectation are based upon the following facts and estimates : ( 1) Amounts shown as received will be received pur- suant to contract of sale. ( 2) Amounts paid or to be paid into various funds and accounts have been directed to be paid into said funds and accounts by authority hereof or are expected to be so di- rected to be paid by further proceedings . ( 3) The anticipated dates of the obligation of and expenditure of money in the Project Fund ( 1987 ) derived from the sale of Bonds and the amounts to be spent on or before such dates is based upon consultation with the architects , engineers and administrative staff of the City charged with responsible supervision of the Corporate Purpose Project . -20- H. If at any time after the third anniversary of the date of issuance of the Bonds, the amount of money in the Project Fund ( 1987 ) exceeds $100 , 000 , the amount of money then in the Project Fund ( 1987 ) in excess of said sum of $100 , 000 shall not be invested at a yield "materially higher" (as defined in the Treasury Regulations hereinafter cited) than the yield on the Bonds . I . In valuing the moneys on deposit in the Project Fund ( 1987 ) at any time for the purposes of complying with the foregoing paragraph, investments will be taken into account at purchase price with the following exception: if an investment is purchased at a discount or results in interest payments for any annual period in excess of interest payments for any preceding annual period ( reflecting the annual reinvestment of accrued interest as principal ) , the amount of such discount or excess interest ( not discounted to present value) shall be added to the purchase price ratably each year over the term of the investment . The yield on investments shall be calculated on the basis of the actual payments received from and the price paid for such investments . J. To the best of the knowledge and belief of the City Council , and of the undersigned Mayor and City Clerk who are officers charged with the responsibility of issuing the Bonds , there are no facts , estimates or circumstances that would materially change the conclusions and representations set out in -21- w C this Section, and the expectations set out in this Section are reasonable . K . The City has not been notified of any disquali- fication or proposed disqualification of it by the Commissioner of the Internal Revenue Service as a bond issuer which may certify bond issues under Treas . Reg . §1 . 103-13 (a) ( 2 ) ( ii ) ( 1979 ) . The City also certifies and further covenants with the purchasers and registered owners of the Bonds from time to time outstanding that moneys on deposit in any fund or account in Cconnection with the Bonds, whether or not such moneys were de- rived from the proceeds of the sale of the Bonds or from any other source, will not be used in a manner which will cause the Bonds to be "arbitrage bonds" within the meaning of the Code Section 148 and any lawful regulations promulgated thereunder , including Treas . Reg . §§1 . 103-13 , 1 . 103-14 and 1 . 103-15 ( 1979 ) as the same presently exist or may from time to time hereafter be amended , supplemented or revised. The City reserves the right to use or invest moneys in connection with the Bonds in any manner , notwithstanding the covenants herein, provided it shall first have received an opinion from an attorney or a firm of attorneys of nationally recognized standing in matters pertaining to Tax- exempt bonds to the effect that use or investment of such moneys as contemplated will not result in loss of Tax-exempt status for the Bonds . -22- C Section 14. Arbitrage Rebate Exemption The City recognizes that the provisions of Section 148 of the Code require a rebate to the United States in certain circumstances . An exemption to rebate requirements appears at Section 148 ( f ) ( 4 ) (C) of the Code and applies to this issue . No rebate is required or planned by the City. In support of this conclusion, the City covenants, represents and certifies as follows : A. The City is a governmental unit with general tax- ing powers . B. No Bond in this issue is a "private activity bond" as defined in Section 141 (a) of the Code . C. All the net proceeds of the Bonds are to be used for the local government activities of the City described in this Ordinance (or of a governmental unit the jurisdiction of which is entirely within the jurisdiction of the City) . D. The aggregate face amount of all tax-exempt bonds (other than "private activity bonds" as defined in the Code) issued by the City (and all subordinate entities thereof ) during 1987 is not reasonably expected to exceed $5 , 000 , 000 . Section 15. Further Tax Covenants The City agrees to comply with all provisions of the Code which, if not complied with by the City, would cause the Bonds not to be Tax-exempt . In furtherance of the foregoing provisions , but without limiting their generality, the City agrees : (a ) through its officers to make such further specific covenants , representations as shall be truthful , and assurances as may be necessary or advisable; ( b) to comply with all repre- sentations , covenants and assurances contained in certificates or -23- + o• C agreements as may be prepared by counsel approving the Bonds ; ( c) to consult with such counsel and to comply with such advice as may be given; (d) to pay to the United States , if necessary, such sums of money representing required rebates of excess arbitrage profits relating to the Bonds ; ( e) to file such forms , statements and supporting documents as may be required and in a timely manner ; and ( f ) if deemed necessary or advisable by its officers , to employ and pay fiscal agents , financial advisors , attorneys and other persons to assist the City in such compliance . Section 16. Qualified Tax-exempt Obligations CThe City recognizes the provisions of Section 265 (b) ( 3 ) of the Code which provide that a "qualified tax-exempt obliga- tion" as therein defined may be treated by certain financial institutions as if it were acquired on August 7 , 1986 , for certain purposes . The City hereby designates each of the Bonds as may be from time to time outstanding for purposes of Section 265 (b) ( 3 ) of the Code as a "qualified tax-exempt obligation" as provided therein . In support of such designation, the City certifies , represents and covenants as follows : A. The Bonds are not "private activity bonds" as defined in Section 141 (a) of the Code . B. Including the Bonds , the City ( including any entities subordinate thereto) has not and does not reason- 4;:: ably expect to issue in excess of $10 , 000 , 000 in "qualified tax-exempt obligations" (other than "private activity bonds" ) (as such terms are defined in the Code ) during 1987 . -24- C. Including the Bonds , not more than $10 , 000 , 000 of obligations issued by the City ( including any entities sub- ordinate thereto) during the calendar year of issuance of the Bonds have been to date or will be designated by the City for purposes of said Section 265 ( b) ( 3 ) . Section 17. Registered Form The City recognizes that Section 149 of the Code re- quires the Bonds to be issued and to remain in fully registered form in order to be and remain Tax-exempt . In this connection , the City agrees that it will not take any action to permit the Bonds to be issued in, or converted into, bearer or coupon form. Section 18. Rights and Duties of Bond Registrar If requested by the Bond Registrar and Paying Agent , any officer of the City is authorized to execute the Bond Regis- trar and Paying Agent ' s standard form of agreement between the City and the Bond Registrar and Paying Agent with respect to the obligations and duties of the Bond Registrar and Paying Agent hereunder . In addition to the terms of such agreement and sub- ject to modification thereby, the Bond Registrar and Paying Agent by its acceptance of duties hereunder agrees as follows : A. to act as bond registrar , paying agent , authenti- cating agent , and transfer agent as provided herein; B. to maintain a list of Bondholders as set forth herein and to furnish such list to the City upon request , but otherwise to keep such list confidential to the extent permitted by law; C. to cancel and/or destroy Bonds which have been paid at maturity or submitted for exchange or transfer ; D. to furnish the City at least annually a certi- ficate with respect to Bonds cancelled and/or destroyed; and -25- E. to furnish the City at least annually an audit confirmation of Bonds paid, Bonds outstanding and payments made with respect to interest on the Bonds . The City Clerk of the City is hereby directed to file a certified copy of this Ordinance with the Bond Registrar and the Paying Agent . Section 19 . Publication of Ordinance That a full , true and complete copy of this ordinance be published within ten days after passage in the Daily Courier- News, being a newspaper published in and of general circulation within the City. low Section 20 . Approval of Official Statement The use of the Official Statement by Speer Financial , Inc . , Chicago, Illinois in connection with the sale of the Bonds is hereby ratified. The form, terms and provisions of the Official State- ment be, and it hereby is , in all respects approved, and that the Mayor and the Director of Finance of the City be , and they hereby are, authorized , empowered and directed to execute, acknowledge and deliver the Official Statement in the name and on behalf of the City; and that from and after the execution and delivery of the Official Statement, the officers , agent and employees of the City are hereby authorized, empowered and directed to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of the Official Statement as executed, and any addenda , supplement , or -26- C amendment thereto, are hereby approved, and the further use thereof in connection with any reoffering of the Bonds is hereby authorized. Section 21. Superseder and Effective Date All ordinances, resolutions and orders , or parts there- of , in conflict herewith, are to the extent of such conflict hereby superseded; and this Ordinance shall be in full force and effect immediately upon its passage, approval and publication. tdmk -27- • AYES: COUNCILMEN FOX_ GTLLTAM, MOYLAN , pnpprE SHALES , WALTERS AND MAYOR VAN DE VOORnF NAYS: NONE ABSENT: NONE ADOPTED: June 9 , 1987 APPROVED: June 9 , 1987 S I George VanDeVnnrr1u' Mayor , City of Elgin Kane and Cook Counties , Illinois Recorded In City Records: June 9 , 1987 . Published in the Daily Courier-News by authority of the City Council on , 1987 . Attest : s/ Marie Yearman City Clerk , City of Elgin Kane and Cook Counties , Illinois -28- STATE OF ILLINOIS ) SS COUNTY OF KANE ) CERTIFICATION OF MINUTES AND ORDINANCE I , the undersigned, do hereby certify that I am the duly qualified and acting City Clerk of the City of Elgin, Kane and Cook Counties , Illinois ( the "City" ) , and as such official I am the keeper of the official journal of proceedings , books, records , minutes and files of the City and of the City Council ( the "City Council" ) thereof . I do further certify that the foregoing is a full , true and complete transcript of that portion of the minutes of the meeting of the City Council held on the 9th day of June , 1987 , insofar as the same relates to the adoption of an ordinance entitled: AN ORDINANCE providing for the issuance of $2,700, 000 General Obligation Corporate Purpose Bonds, Series 1987, of the City of Elgin, Kane and Cook Counties, Illinois, and providing for the levy and collection of a direct annual tax for the pay- ment of the principal of and interest on said bonds. a true , correct and complete copy of which said ordinance as adopted at said meeting appears in the foregoing transcript of the minutes of said meeting . I do further certify that the deliberations of the City Council on the adoption of said ordinance were taken openly; that the vote on the adoption of said ordinance was taken openly; that said meeting was held at a specified time and place convenient to the public; that notice of said meeting was duly given to all newspapers , radio or television stations and other news media requesting such notice; and that said meeting was called and held in strict compliance with the provisions of the Open Meetings Act of the State of Illinois , as amended, and the Illinois Municipal Code , as amended, and that the City Council has complied with all of the provisions of said Act and said Code and with all of the procedural rules of the City Council in the adoption of said ordinance . IN WITNESS WHEREOF I hereunto affix my official signa- ture and the seal of the City, this 9th day of June , 1987 . s/ Marie Yearman City Clerk (SEAL) STATE OF ILLINOIS ) KANE ) SS COUNTY OF gggg ) CERTIFICATE OF FILING I, Lorraine P. Sava , do hereby certify that I am the duly qualified and acting County Clerk of The County of Kane, . o , Illinois , and as such officer I do hereby ceri:ity That on the 19th day ofJune , 1987, there was filed in my office a properly certified copy of Ordinance Number T1-87, passed by the City Council of the City of Elgin, Kane and Cook Counties, Illinois, on the 9th day of June, 1987 , and entitled: AN ORDINANCE providing for the issuance of $2,700,000 General Obligation Corporate Purpose Bonds, Series 1987, of the City of Elgin, Kane and Cook Counties, Illinois, and providing for the levy and collection of a direct annual tax for the pay- ment of the principal of and interest on said bonds. and that the same has been deposited in the official files and records of my office . IN WITNESS WHEREOF I have hereunto affixed my official Kane, signature and the seal of The County of NOcxack, Illinois, this 19th day of June , 1987 . (7 County Clerk of The County oft, Illinois Kane CERTIFICATE AS KEEPER OF RECORDS AND FILES—Han Sheet Size dip.445 (FORM 59) STATE OF ILLINOIS, 1 COUNTY OF COOK 1 I, STANLEY T. KUSPER, JR., County Clerk of Cook County, in the State aforesaid and keeper of the records and files of said Cook County, do hereby certify th e i 7 ' "e ✓ .c_ id' 1,z.o /9 2, A i..,_. ..,...__e.,_,4_,....,„ ....4..Lui..4,e-411.A?:..., . c;)/, ..vg...„_,/ - cP7-- 4.....„..,:,?._4_,„ ". -A„ ----2e.......,,Z,,' ft all of which appears from the records and files of my office. IN WITNESS WHEREOF I have hereunto set my hand and affixed the Seal of said County at my office in the City of Chica6 i said County, this /e day o A. . 1917-- Cis. h Y' :ilik..Aji<;)" • •GRDINANGt ko e) Yf-t7 AN OftINANCE Prot :a -' • for 'the issuance of 42,700,000 tenerai. biigatic n: Corporate Purpose Bonds, Series 1987; of the city- of Elgin, Kane and Cook Counties, Illinois, and. providing for the levy and collection of a direct annual. tax' for the pay- ment of the principal of and interest on said . - bonds. WHEREAS, the City of Elgin, Kane - and Cook Counties, Illinois (the "City" ) has ` a population in excess of 25,000 as determined by the last officral .census, and pursuant to the pro- visions of Section 6 of Article VII of the Constitution of the T State of Illinois, the City is . a home rule unit and may exercise any power or perform any function pertaining to its government and affairs including, but not limited to, the power to tax and to incur debt; and WHEREAS, pursuant to the provisions of said Section 6, the City has the power to incur debt payable from ad valorem property tax receipts or from any other lawful source and matu- ring within forty (40) years from the time it is incurred without prior referendum approval; and WHEREAS, on the 23rd day of April, 1975, the City Council of the City did adopt an ordinance determining the procedures to be followed in the borrowing of money for public purposes of the City and in evidence of such borrowing the M s issuing of full faith and credit bonds of the City • without referendum approval, such ordinance being entitled: TELEPHONE 312/695-6500 %tr"i t orri 414r t I 4,it os1,1 I�3i 150 DEXTER COURT ELGIN, ILLINOIS 60120-5555 Moll, June 15 , 1987 Lorraine Sava Kane County Clerk 719 S. Batavia Avenue Geneva, Ill. 60134 Dear Lorraine: Enclosed please find certified copy of Ordinance T1-87 , which was passed by the Elgin City Council On June 9 , 1987. Please file this ordinance and return the Certificate of Filing to me. Thank you for your cooperation in this matter. Very truly yours, O• g > Marie Yearman City Clerk R.V. NORENE & Associates, Inc. May 25, 1989 City of Elgin City Hall 150 Dexter Court Elgin, IL 60120 Ladies and Gentlemen: Bids were received today covering $3,240,000 General Obligation Bonds, Series 1989. There were nine bids received which are listed at the bottom of this letter in accordance with the attached signed bids. Upon examination, it is our opinion that the bid of Northern Trust Company, Chicago is the best bid received, and it is further our opinion that it is favorable to the City and should be accepted. We therefore recommend that the bonds be awarded to that bidder at par less of discount of $26,270.00 plus accrued interest being at a net interest rate of 6.583%. n 0 > p Net Interest 0 Account Managers Rate z The Northern Trust Company, Chicago, Manager and Associates . . 6.583% r- First Chicago Capital Markets, Inc. , Chicago 6.593493% Blunt, Ellis & Loewi, Inc. , Chicago, Clayton Brown & Associates, Inc. , Chicago and Griffin, Kubik, Stephens & aThompson, Inc. , Chicago, Joint Managers and Associate 6.5947% C Harris Trust and Savings Bank, Chicago and Bear, Stearns & a Co. , Inc. , New York, Co-Managers and Associates 6.6049% z Hutchinson, Shockey, Erley & Co. , Chicago 6.6094331% First Wisconsin National Bank of Milwaukee 6.6286% Shearson Lehman Hutton, Inc. , New York, Prudential-Bache Capital Funding, New York, Dean Witter Reynolds, Inc. , New York and Smith Barney, Harris Upham & Co. , Inc. , New York, Joint Managers 6.6758% John Nuveen & Co. , Inc. , Chicago 6.6795% Trust Company Bank, Atlanta, GA 6.7391% Respectfully submitted, President R. V. Norene & Associates, Inc. RVN/mb L_ Lake & Waukegan Office Center, Suite 215 • 1701 Lake Avenue • Glenview, IL 60025 • 312-998-9848 For your$3,240,000 City of Elgin, Illinois, General Obligation Bonds, Series 1989, described in the Official Notice of Sale, which is expressly made a part hereof by reference, we will pay you $ <133) (which amount is not less than $3,207,600) plus accrued interest from June 1, 1989 to the date of delivery. The bonds are to bear interest at the following respective ascending rates (each a multiple of 1/4 or '/,o of 1%) for bonds of each designated maturity. MATURITIES—January 1 $ 190;000 1992 (r•ti e % 200,000 1993 le.4 0 % 200,000 1994 10.4 0% 1,650,000 1995 (6.4 C% 1,000,000 1996 1r..5D% As evidence of our good faith we enclose herewith our (cashier's)(certified) check in the sum of$64,800 in accordance with your Official Notice of Sale. Unless we notify you to the contrary within 24 hours of the bid opening, CUSIP numbers are to be applied for and printed on the bonds at our expense, and we agree to accept the Bonds at delivery with the CUSIP numbers as printed. NOT A PART OF BID Respectfully submitted, Our calculation of interest cost from above is: Nam: - - ther;�, Ba• Total Interest • ,�• rArfairnager �-- By _ © losimEerentern/Plus Discount $ ,X)a• '0 1 F. Rimkus egon. Investment Officer Net Interest Cost $ s `) 33Address 50 S. LaSalle SL. ; 11) 1 Net Interest Rate 6• % City Chicago State IL Telephone 444-3708 Zip 60675 Return of our bid deposit check is acknowledged. (A list of the members of our account on By Date whose behalf this bid is made is attached hereto.) ACCEPTANCE CLAUSE The foregoing bid was accepted and bonds sold by resolution of the City Council of the City of Elgin, Illinois, on May 25, 1989 and receipt is hereby acknowledged of the good faith check which is being held in accordance with the terms of the Official Notice of Sale. CITY OF ELGIN, ILLINOIS City Manager TABLE OF BOND YEARS—FROM JUNE 1, 1989 (For Computation Purposes Only.Not Part of BId.) Maturities _ Bond Years Due Jan.1 Amount Annual Cumulative 1992 $ 190,000 490.8333 490.8333 1993 200,000 716.6667 1,207.5000 1994 200,000 916.6667 2,124.1667 1995 1,650,000 9,212.5000 11,336.6667 1996 1,000,000 6,583.3333 17,920.0000 $3,240,000 17,920.0000 Average Life: 5.5308 Years R.V. NORENE &Associates, Inc. $3,240,000 CITY OF ELGIN Kane and Cook Counties, Illinois GENERAL OBLIGATION BONDS, SERIES 1989 Date of Sale: Thursday, May 25, 1989 Investment Rating: Moody's Investors Service . . . Aa Net Bidders Discount Interest Rate Interest The Northern Trust Company, Chicago, Manager . . $26,270.00 1992-95 6.40% 6.583% Mercantile Bank N.A. , St. Louis 1996 6.50% ($1,179,733.33) Robert W. Baird & Co., Inc. , Milwaukee Cronin & Co. , Inc. , Minneapolis The Exchange National Bank, Chicago The Illinois Company, Chicago Shawmut Bank, N.A. , Boston First Chicago Capital Markets, Inc. , Chicago .. $16,754.00 1992-96 6.50% 6.593493% ($1,181,554.00) Blunt, Ellis & Loewi, Inc. , Chicago, Clayton Brown & Associates, Inc. , Chicago and Griffin, Kubik, Stephens & Thompson, Inc. , Chicago, Joint Managers $16,987.20 1992-96 6.50% 6.5947% First National Bank of Elgin, Elgin, IL ($1,181,787.20) .iarris Trust and Savings Bank, Chicago and Bear, Stearns & Co. , Inc. , New York, Co-Managers $30,148.20 1992-95 6.40% 6.6049% Bernardi Securities, Inc. , Chicago 1996 6.50% ($1,183,611.53) The Chicago Corp. , Chicago Prescott, Ball & Turben, Inc. , Cleveland Securities Corp. of Iowa, Cedar Rapids Unibanctrust Co. , Chicago Hutchinson, Shockey, Erley & Co. , Chicago $32,400.00 1992 6.25% 6.6094331% 1993 6.30% ($1,184,410.42) 1994-95 6.40% 1996 6.50% First Wisconsin National Bank of Milwaukee $23,057.10 1992-96 6.50% 6.6286% ($1,187,857.10) Shearson Lehman Hutton, Inc. , New York, Pru- dential-Bache Capital Funding, New York, Dean Witter Reynolds, Inc. , New York and Smith Barney, Harris Upham & Co. , Inc. , New York, Joint Managers $13,591.75 1992-96 6.60% 6.6758% ($1,196,311.75) John Nuveen & Co. , Inc. , Chicago $14,260.00 1992-96 6.60% 6.6795% ($1,196,980.00) Trust Company Bank, Atlanta, GA $27,063.20 1992-94 6.50% 6.7391% 1995-96 6.60% ($1,207,659.03 or. eget The Northern Trust Company Bond Department CURRENT MUNICIPAL YIELDS Market Information as of: Aaa / A-1 A Baa-1 May 18, 1989 1990 6 . 40 6 . 50 6 . 60 6.70 6 . 90 1991 6 . 40 6. 50 6 . 60 6. 70 6 . 95 FED FUNDS WEEKLY AVERAGE 1992 640 6 . 45 6 . 55 6 . 65 6 .75 7 . 00 1993b.40 6 . 50 6. 55 6 . 65 6 .75 7 . 00 9.75% 1994 66 . 50 6 . 60 6 . 70 6 . 80 7 . 00 199564S 6 . 55 6 . 65 6 . 75 6 . 85 7 . 05 TNT PRIME RATE 1996 6 . 60 6 .70 6 . 80 6 . 90 7 . 10 1997 6 . 65 6.75 6 . 85 6 . 95 7 . 15 11 . 50% 1998 6 . 70 6 . 80 6 . 90 7. 00 7 . 20 1999 6 .70 6.80 6 . 90 7 . 00 7 . 25 2000 6 . 75 6 . 85 6 . 95 7 . 05 7 . 30 DISCOUNT RATE 2001 6 . 80 6 . 90 7 . 00 7. 10 7 . 35 2002 6 . 85 6 . 95 7 . 05 7. 15 7 . 40 7. 00% 2003 6 . 90 7 . 00 7 . 10 7 . 20 7 . 45 2004 6 . 95 7. 00 7 . 10 7 . 20 7 . 45 2005 7 . 00 7. 05 7 . 15 7 . 25 7. 50 TAXABLE YIELDS 2006 7. 05 7 . 10 7 . 20 7. 30 7 . 50 2007 7. 05 7 . 10 7 . 20 7 . 30 7 . 50 U.S. Fed 2008 7 . 10 7 . 15 7. 25 7 . 30 7 . 55 Treas Agency 2009 7 . 10 7 . 15 7 . 25 7 . 35 7 . 55 2 yr 9. 00 9. 30 4 yr 8 . 90 9 . 20 2014 7 . 15 7 . 20 7 . 30 7 . 35 7 . 60 10 yr 8 . 79 9 . 10 2019 7 . 20 7 . 25 7 . 35 7 . 40 7 . 60 30 yr 8 . 80 ---- SHORT-TERM YIELDS 3 mo 6 mo 9 mo 12 mo Treasury Bills 8 . 68 8 . 88 8 . 87 8 . 94 Secondary CDs 9 . 45 9 . 45 ---- ---- EuroDollars 9 . 62 9. 62 9 . 62 9. 62 TAX-EXEMPT INFORMATION 5/_S THIS WEEK LAST WEEK YEARS HIGH YEARS LOW Bond Buyer 11 7 . 08 7 . 27 7 . 62 7 . 08 Bond Buyer 201.i 7 . 18 7 . 36 7 .72 7 . 18 Blue List 992MM 1,024MM 1 , 415MM 897MM Visible Supply 1 , 495MM 1, 687MM 2 , 990MM 822MM TREASURY & AGENCY FINANCING Monday: Auction - $13 . 6B 3 & 6 Month Treasury Bills Tuesday: Auction - $8 .75B 2 Yr. Treasury Notes Wednesday: Auction - $7 . 50B 5 Yr. Treasury Notes Wednesday: Announce - FFCB Prices June Financing, Expect 3 Mo. , 6 Mo. , & 1 Yr. The NorthernTrust Company Chicago:50 South LaSalle Street,Chicago,Illinois 60675;telephone(312)630-6000 New York:One World Trade Center,New York,New York 10048;telephone(212)938-3000 Bond Purchaser: Northern Trust Company, Chicago, IL Bond Registrar/Paying Agent: American National Bank & Trust Co. of Chicago, Chicago, IL Bond Counsel: Carlson and Hug, Chicago, IL Financial Advisor: R. V. Norene & Associates, Inc. , Glenview, IL City of Elgin - ♦3,240,000 General Obligation Bonds, Series 1989 Interest start dates 06/01/89 First interest payments 01/01/91 DEBT SERVICE SCHEDULE PERIOD ANNUAL LEVY ENDING PRINCIPAL RATE INTEREST TOTAL YEAR 1 01/01/91 0.00 329,903.33 329,903.33 1989 2 01/01/92 190, 000.00 6.400 208,360.00 398, 360. 00 1990 3 01/01/93 200, 000.00 6.400 196,200.00 396,200.00 1991 4 01/01/94 200,000.00 6.400 183,400. 00 383,400.00 1992 5 01/01/95 1,650,000. 00 6.400 170,600.00 1,820,600. 00 1993 6 01/01/96 1,000,000. 00 6.500 65,000.00 1,065,000.00 1994 TOTAL 3,240,000.00 1, 153,463.33 4,393,463.33 City of Elgin - $3,240,000 G.O. Bonds, Series 1989, Semiannual Payments Interest start dates 06/01/89 First interest payments 07/01/90 DEBT SERVICE SCHEDULE PERIOD ANNUAL ENDING PRINCIPAL RATE INTEREST TOTAL 1 07/01/90 0.00 225,723.33 225,723. 33 2 01/01/91 0. 00 104, 180. 00 104, 180.00 3 07/01/91 0.00 104, 180.00 104, 180. 00 4 01/01/92 190,000.00 6.400 104, 180.00 294, 180.00 5 07/01/92 0.00 98, 100.00 98, 100. 00 6 01/01/93 200, 000.00 6. 400 98, 100.00 298, 100.00 7 07/01/93 0.00 91,700.00 91, 700. 00 8 01/01/94 200,000.00 6.400 91,700. 00 291,700. 00 9 07/01/94 0.00 85, 300.00 85,300. 00 10 01/01/95 1, 650,000.00 6.400 85,300. 00 1,735,300.00 11 07/01/95 0.00 32, 500.00 32,500. 00 12 01/01/96 1, 000, 000.00 6. 500 32,500.00 1,032,500.00 TOTAL 3,240, 000.00 1, 153, 463.33 4,393, 463.33 L R. V. NORENE & ASSOCIATES, INC. May 25, 1989 TELEPHONE 312/695-6500 OF Ci � � 150 DEXTER COURT c� , . ELGIN, ILLINOIS 60120-5555 �ED Ftij June 15 , 1987 Stanley T. Kusper, Jr. Cook County Clerk County Building- Room 402 Chicago, Ill. 60602 Dear Sir: Enclosed please find certified copy of Ordinance T1-87, which was passed by the Elgin City Council on June 9 , 1987 . Please file this Ordinance and return the Certificate of Filing to me. Thank you for your cooperation in this matter. Very truly yours , Marie Yearman City Clerk 1 New Issue Investment Rating: Date of Sale: Tuesday,June 9, 1987 Moody's Investors Service Aa 11:00 A.M., C.D.T. (Outstanding Bonds—Review Requested) OFFICIAL STATEMENT Assuming compliance with certain covenants, in the opinion of Chapman and Cutler, Bond Counsel, under present law interest on the Bonds paid to the owners thereof will be exempt from present federal income taxation, except for the corporate environmental, branch profits and alternative minimum taxes more fully discussed under the heading "TAX EXEMPTION"herein. $2,700,000 CITY OF ELGIN Kane and Cook Counties, Illinois General Obligation Corporate Purpose Bonds, Series 1987 Dated July 1, 1987 Due Serially January 1, 1990-1993 Non-Callable Denomination: Multiples of$5,000 Fully Registered Principal and semiannual interest payable by The First Commercial Bank, Chicago, Illinois, (the "Bond Registrar"), the City's registration and paying agent. Interest on each bond shall be paid by check or draft of the Bond Registrar to the person in whose name such bond is registered at the close of business on the 15th day of the month next preceding the interest payment date.The principal of the bonds shall be payable in lawful money of the United States of America upon presentation at the corporate trust office of the Bond Registrar in Chicago,Illinois.Interest will be payable each January 1 and July 1, with the first interest payment due July 1, 1988. MATURITIES—January 1 $600,000 1990 $650,000 1991 $750,000 1993 700,000 1992 PURPOSE OF ISSUE The proceeds of these bonds will be used to fund street and sidewalk improvements,purchase of a fire truck,and park improvements. LEGALITY AND SECURITY These bonds,in the opinion of bond counsel,Chapman and Cutler,Attorneys,Chicago, Illinois,will constitute valid and legally binding obligations of the City of Elgin, Illinois, payable as to principal and interest from ad valorem taxes levied against all taxable property therein, without limitation as to rate or amount. The City will furnish the approving opinion of said bond attorneys evidencing the legality of the bonds together with the transcript of proceedings on which said opinion is based, which opinion will state that interest on the bonds is exempt from present Federal Income Taxes under existing statutes, regulations and decisions, and a certificate of no-litigation then pending affecting the legality of the bonds or the right of the City to issue them. The issuer intends to designate the bonds as "qualified tax-exempt obligations" pursuant to the small issuer exception provided by Section 265(b)(3) of the Internal Revenue Code of 1986, which affords banks and thrift institutions purchasing the bonds more favorable treatment of their deduction for interest expense than would otherwise be allowed under Section 265(b)(2)of such Code for taxable years of such institutions ending after December 31, 1986. The information in this Statement has been compiled from sources believed to be reliable,but is not guaranteed.As far as any statements herein involve matters of opinion,whether or not so stated,they are intended as opinions and not as representations of fact. This Official Statement has been prepared under the authority of the Council of the City of Elgin,Illinois.Additional copies may be secured from Mr. James H. Bolerjack, Jr., Finance Director, City Hall, Elgin, Illinois, or from the Financial Consultants to the City: Established 1954 �) Speer Financial, Inc. PUBLIC FINANCE CONSULTANTS 55 EAST MONROE STREET•CHICAGO, ILLINOIS 60603 Area 312-346-3700 Statement of Indebtedness—As of April 1, 1987 (Including These Bonds) Per Capita Percent of Percent of Amount (Est. Pop. Assessed Estimated Applicable 67,595) Valuation True Value Assessed Valuation, 1985(1). . . . . . $ 433,064,778 $ 6,406.75 100.00% 33 33% Estimated True Value, 1985 $1,299,194,334 $19,220.27 300.00% 100 00% Direct Debt . $ 34,610,000 $ 512.02 7.99% 2.66% Less• Self-Supporting Debt(2) 21,300,000 315.11 4.92% 1.64% Net Direct Debt $ 13,310,000 $ 196.91 3.07% 1.02% Overlapping Bonded Debt(3): Schools 6,676,476 98.77 1.54% 0.51% All Other 4,419,387 65.38 1.02% 0.34% Total Net Direct & Overlapping $ 24,405,863 $ 361.06 5.63% 1.87% Notes (1) Latest valuation available. (2) The City is a home rule unit under the 1970 Illinois Constitution and, as such, has no general obligation debt limit, is not required to seek referendum approval for the issuance of bonds,and has no statutory tax rate limitations for any purpose (3) See details herein. REGISTRATION, TRANSFER AND EXCHANGE The City shall cause books(the"Bond Register") for the registration and for the transfer of the bonds to be kept at the corporate trust office of the Bond Registrar.The City will authorize to be prepared,and the Bond Registrar shall keep custody of, multiple bond blanks executed by the City for use in the transfer and exchange of bonds. Upon surrender for transfer of any bond at the corporate trust office of the Bond Registrar, duly endorsed by, or accompanied by a written instrument or instruments of transfer in form satisfactory to the Bond Registrar and duly executed by the registered owner or his attorney duly authorized in writing,the City shall execute and the Bond Registrar shall authenticate,date and deliver in the name of the transferee or transferees a new fully registered bond or bonds of the same maturity of authorized denominations, for a like aggregate principal amount. Any fully registered bond or bonds may be exchanged at said office of the Bond Registrar for a like aggregate principal amount of bond or bonds in the denomination of$5,000 and authorized integral multiples thereof.The execution by the City of any fully registered bond shall constitute full and due authorization of such bond and the Bond Registrar shall thereby be authorized to authenticate,date and deliver such bond,provided,however,the principal amount of outstanding bonds of each maturity authenticated by the Bond Registrar shall not exceed the authorized principal amount of bonds for such maturity less previous retirements. The person in whose name any bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of the principal of or interest on any bond shall be made only to or upon the order of the registered owner thereof or his legal representative.All such payments shall be valid and effectual to satisfy and discharge the liability upon such bond to the extent of the sum or sums so paid. No service charge shall be made for any transfer or exchange of bonds, but the City or the Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of bonds. 2 CITY OF ELGIN, ILLINOIS George VanDeVoorde, Mayor City Council Dan Fox Susan Moylan Cheryl Popple Robert Gilliam Marlene Shales James J.Cook James H.Bolerjack,Jr. City Manager Finance Director Marie Yearman Erwin W Jentsch City Clerk Corporation Counsel s. GENERAL INFORMATION The City of Elgin is located approximately 38 miles northwest of downtown Chicago along the Fox River. Elgin is an industrial center surrounded by open,unincorporated area with room to grow. Elgin constitutes one of the major satellite cities in the metropolitan region,which means that it is large enough to maintain its own economic independence but is dependent upon its proximity to Chicago for some of its economic vitality.Elgin was incorporated under a special charter from the State of Illinois in 1854. It presently covers over 20 square miles. Government The City of Elgin operates under the Council-Manager form of government with a Mayor and six Council members elected at large for four-year overlapping terms. The administrative head of the City is the City Manager who is responsible for preparing an operating budget,subject to approval by the Council,and the daily operations of the City and its 448 full-time employees. The City of Elgin provides a Police Department of 100 full-time officers and a Fire Department which operates four fire stations and 85 full-time employees of whom 39 are certified paramedics. Transportation The City of Elgin is served by the Illinois Toll Road and Milwaukee Road commuter line, both of which provide access to Chicago. In addition, a network of four State highways and Federal Route 20 enhance Elgin's economic viability. Bus transportation for Elgin and neighboring communities is operated by the City with the net cost reimbursed by the Regional Transportation Authority. Education School District No. 46 provides the Elgin area with 31 elementary schools, 6 junior high schools, 3 senior high schools, a preschool building, and a special education facility. This district is one of the State's largest and total enrollment in the Elgin portion for the 1986-87 school year was 13,435. There are also two colleges, Elgin Community College and Judson College, in Elgin. Community Life Elgin's Parks and Recreation Department oversees some 1,046 acres of parks which include a botanical garden, a zoo, a museum, a band shell, and numerous athletic facilities The donated 1,200 seat Hemmens Auditorium with exhibition hall and meeting rooms is also operated by this department. Sherman and St. Joseph Hospitals, combined, house over 700 beds and are among the City's largest employers. 3 SOCIOECONOMIC INFORMATION Population The City of Elgin has experienced slow,steady gains in population.The U.S. Census Bureau reported a population figure of 44,223 in 1950,49,447 in 1960, 55,691 in 1970,and 63,668 in 1980. This is an average increase of nearly 13% every ten years, and an overall increase of 44% since 1950. The current population estimate is 67,595. Utilizing the current estimate of the Northeastern Illinois Planning Commission(NIPC),the City of Elgin projects that its population will grow over 40%, to 94,000, by the year 2000. Income As shown in the following table,Elgin's median family income exceeds that of the State of Illinois and Cook County. Median Family Income* 1970 1980 Elgin $11,555 $23,193 Cook County 11,642 23,081 Kane County 11,947 25,048 State of Illinois 10,959 22,748 *Source: U. S. Census Bureau. Per capita money income has also been on an upward trend. The 1983 estimate of per capita money income of $10,034 is 97% higher than the 1974 estimate of$5,099. Employment The 1980 Census compiled information for employed persons 16 years or older. Elgin had 30,837 such people. Following are the breakdowns of employment by industry and employment by occupation. Employment By Industry Number of Persons Percent Agricultural, Mining and Construction 1,818 5.9% Manufacturing 9,693 31.4% Transportation, Communication and Utilities 1,824 5.9% Wholesale Trade 1,244 4.0% Retail Trade 4,659 15.1% Financial, Insurance and Real Estate 1,715 5.6% Business Services 2,124 6.9% Professional Services 6,844 22.2% Public Administration 916 3.0% Total 30,837 100.0% Employment By Occupational Category Number of Persons Percent Executive, Administrative and Managerial 3,009 9.8% Professional Specialty 4,100 13.3% Technical 977 3.1% Sales 2,899 9.4% Administrative Support 5,464 17.7% Service 3,544 11.5% Farming 115 0.4% Precision Production 3,921 12.7% Laborers, Operators and Fabricators 6,808 22.1% Total 30,837 100.0% According to the preliminary March 1987, figures of the Illinois Bureau of Employment Security,the City of Elgin .J had an unemployment rate of 6.3%.The State of Illinois recorded an unemployment rate of 8.1%,Cook County 7.5%,and Kane County 6.9%. 4 Housing According to figures provided by the U. S. Census Bureau, median home values in Elgin have been increasing at a rate which compares favorably with Cook County, Kane County and the State of Illinois. Median Home Values Percent 1970 1980 Increase Elgin $20,700 $60,600 193% Cook County 24,400 62,100 155% Kane County 20,700 60,500 192% State of Illinois 19,800 52,800 167% The 1980 Census reports the number and value of owner occupied non-condominium units in Elgin as follows: 356 units were valued at less than $40,000 7,040 units were valued at $40,000-$79,999 4,725 units were valued at greater than $79,999 Elgin's construction activity over the past nine years is shown by the following building permit data, averaging $32,519,800 annually. Of special note is the 1983-1986 period where permits have been issued at an annualized rate of approximately $41,000,000. Table of Building Permits' Single Family Apartments Commercial Calendar Number Number and Year of Units Value of Units Value Industrial All Other Total 1978 252 $ 6,529,350 284 $4,324,000 $11,688,868 $15,684,552 $38,226,770 1979 162 5,783,386 24 797,000 8,107,835 9,833,678 24,521,899 1980 47 2,209,800 222 5,269,900 22,219,230 14,441,247 44,140,177 1981 39 1,539,650 8 298,000 4,984,050 10,824,865 17,646,565 1982 50 1,968,180 10 170,000 2,526,830 8,984,510 13,649,520 1983 107 4,647,100 80 1,589,000 9,588,726 24,414,052 40,238,878 1984 182 8,350,495 46 1,859,000 5,208,628 24,315,264 39,733,387 1985 217 9,497,338 108 3,492,000 11,140,400 17,919,596 42,049,334 1986 296 13,975,290 147 5,152,500 6,962,723 17,265,176 43,355,689 `Source: City of Elgin. BUSINESS AND INDUSTRY As a trade and service center,the City of Elgin provides the economic stimulus for the northeastern section of Kane County and for northwestern Cook County.The City's regional significance encompasses the suburban communities that are located around Elgin: to the east,this includes Bartlett, Hanover Park and Streamwood;to the south,there is South Elgin and the St.Charles area;and to the north,there is Sleepy Hollow,West Dundee,East Dundee,and Carpentersville. 1 The degree of economic activity taking place within the City is illustrated by the statistics compiled by the U. S. Department of Commerce. The following three tables were taken from the Census of Business in each category listed (latest data available). Census of Service Industries' 1972-82 Percent 1972 1977 1982 Increase Number of Establishments 197 224 409 108% Number of Employees 1,618 1,845 2,855 76% Payroll ($1,000) $ 8,416 $14,183 $ 42,400 404% Receipts ($1,000) $27,766 $43,116 $113,752 310% `Establishments with payroll. 5 Census of Wholesale Trade 1972-82 Percent 1972 1977 1982 Increase Number of Establishments 87 83 108 24% Number of Employees 946 1,227 1,512 60% Payroll ($1,000) $ 9,125 $ 17,756 $ 31,086 241% Sales ($1,000) $145,214 $258,042 $521,538 259% Census of Manufactures 1972-82 Percent 1972 1977 1982 Increase Number of Establishments 108 153 137 27% Number of Employees (000) 6.6 9.2 7.4 12% Payroll (Million Dollars) $59.3 $124.4 $147.2 148% Value Added By Manufacture (Million Dollars)* $92.5 $205.0 $224.3 142% New Capital Expenditures (Million Dollars) $ 8.2 $ 18.2 $ 18.8 129% *Value added by manufacture is considered to be the best value measure now available for comparing the relative economic importance of manufacturing among industries and geographic areas. Retail sales figures from the 1982 Census of Business show that the City of Elgin had 481 establishments with sales of$356,834,000 and an annual payroll of$43,752,000. Current reports from the State of Illinois indicate that there arc 2,101 establishments that collect"sales" taxes on retail establishments,service occupations,and use tax.As can be seen from the sales tax revenues received by the City in the General Fund in the section following entitled "Financial Information", revenues have increased 52%over the 1981-1986 period. Once nearly a single industry city, Elgin now has 180 small to medium size manufacturers, according to the Elgin Area Economic Development Commission.The City has an active but cautious program for attracting new industries and aiding others in their expansion.The City also has seven industrial parks comprising 862 acres to encourage industry.The following is a list of some of the large employers located in the City. Large Employers* Approximate Number of Name Description Employees Safety Kleen Corp. Automobile and Industrial Parts Cleaning and Repair . . 2,900 School District U-46 School District 2,500 American Gage and Machine Company . . . . Electric Metal Working Equipment 2,200 C.R. Industries (Chicago Rawhide) Oil Seals 1,600 Sherman Hospital Hospital 1,400 Elgin Mental Health Center Hospital 980 St. Joseph Hospital Hospital 850 U. S. Can Company Metal Containers 500 Simpson Electric Company Measuring Instruments 500 Joseph C. Spiess Co. Department Store 500 Illinois Tool Works, Inc Screws 450 David C. Cook Publishing Company Periodicals and Supplies 360 Elgin Sweeper Company Street Sweepers 327 Fox Valley Manufacturing Division Light Fixtures 300 Essef Industries, Inc National Sales Headquarters 250 Woodruff and Edwards, Inc Machining 250 FJW Industries Precision Optical Devices 250 Daily Courier—News Offset Printing 210 J *Source: 1987 Illinois Manufacturers Directory and 1987 Illinois Services Directory. 6 PROPERTY TAX AND ASSESSMENT INFORMATION During the past six years, Elgin's total assessed valuation has remained stable with strong building permit values being realized in the assessed values. Trend of Assessed Valuation For Taxing Purposes(/) Lery Percent Percent in Percent in Year Real Property Railroad Total Growth Kane County Cook County Total 1980 $370,644,469 $358,385 $371,002,854 11.97% 83.11% 16.89% 100.00% 1981 419,378,632 369,019 419,747,651 13.14% 82.48% 17.52% 100.00% 1982 429,438,992 426,360 429,865,352 2.41% 82.41% 17.59% 100.00% 1983(2) 415,327,916 235,777 415,563,693 (3.33%) 82.14% 17.86% 100.00% 1984(3) 412,281,231 250,982 412,532,213 (0.73%) 82.27% 17.73% 100.00% 1985 432,825,052 239,726 433,064,778 4.98% 80.03% 19.97% 100.00% Notes: (1) Source.County Clerks.Kane and Cook Counties. (2) For levy year 1983, assessments declined by 3 33%. This decrease is believed to be primarily attributable to the increase of the Homeowners Exemption to$3.500 from$3,000. (3) For levy year 1984,assessments declined by 0.73%. This decrease is believed to be primarily attributable to the increase of the Senior Citizens Exemption to$2,000 from$1,500. Personal Property Tax Replacement The Illinois General Assembly,pursuant to section 5(c)of Article IX of the 1970 Constitution of the State of Illinois, abolished all ad valorem personal property taxes as of January 1, 1979, and, to replace the lost revenue, adopted a Personal Property Tax Replacement Income Tax. Such tax is measured by the net income, as defined, of every corporation, partnership and trust for each taxable year ending after June 30, 1979,and also by the invested capital,as defined,of certain public utilities.Collections of said replacement taxes are deposited and held in a Personal Property Tax Replacement Fund for distribution to taxing districts. Prior to December 31, 1980, such fund was distributed quarterly to each taxing district and is now required to be distributed eight times per year. Monies received by any taxing district from the Personal Property Tax Replacement Fund shall be first applied toward payment of the proportionate amount of debt service which was previously levied and collected from extensions against personal property on bonds outstanding as of December 31, 1978, and next applied toward payment of the proportionate share of the pension or retirement obligations of the taxing district which were previously levied and collected from extensions against personal property,and any funds remaining may be used for any corporate purpose for which personal property taxes were used. Tax Rates Per$1,000 of Assessed Valuation 1981 1982 1983 1984 1985 1986 Corporate(/) $ 9.529 $10.407 $10.557 $10.877 $11.084 $12.050 Debt Service 1.087 1.441 2.456 2.793 3.477 4.434 Pensions(2) 4.467 3.389 2.964 2.812 2.920 2.668 Adjustments(3) (0.235) (0.204) 0.282 0.802 0.780 (0.106) Total City(4) $14.848 $15.033 $16.259 $17.284 $18.261 $19.046 County(5) 5.264 5.463 5.793 6.567 6.943 6.484 Township(6) 2.343 2.397 2.442 2.466 2.488 2.504 Schools, Including Community College 34.494 35.151 36.745 45.848 46.569 49.009 Elgin Sanitary District 0.347 0.356 0.439 0.689 0.638 0.570 Gail Borden Library District 1.860 1.908 2.470 1.847 2.256 2.479 Total in Kane County $59,156 $60.308 $64.148 $74.701 $77.155 $80.092 Notes: (I) Includes Public Benefit Rate. (2) Includes Police,Fire and Illinois Municipal Retirement Fund pensions (3) The tax rates are the rates actually extended by Kane County.The 1980 and 1981 tax rates were based upon an estimated distribution of burden and resulted in an over extension of approximately 1.44%in 1980 and 1.08%in 1981 for the City.Correction of these over ex- tensions were made in the 1981 and 1982 tax rates. Corrections of under extensions occurred in the 1983 and 1984 tax rates. (4) The City is a home rule unit under the 1970 Illinois Constitution and,as such,has no statutory tax rate limitation. (5) Includes the tax rates for Kane County, Kane County Forest Preserve,and the Kane County Public Building Commission. (6) Includes the tax rates for Elgin Township and Elgin Township Road and Bridge. 7 Tax Extensions and Collections (City Purposes Only) Levy Coll. Taxes Current Collections Total Collections Year Year Extended(1) Amount(2) Percent Amount Percent 1980 1981 $5,786,397 $5,684,084 98.23% $5,713,889 98.75% 1981 1982 6,745,141 6,656,318 98.68% 6,732,420 99.81% 1982 1983 6,854,004 6,781,071 98.94% 6,865,570 100.17% 1983 1984 7,001,668 6,945,672 99.20% 6,991,370 99.85% 1984 1985 7,386,180 7,315,248 99.04% 7,450,740 100.87% 1985 1986 8,013,706 7,958,018 99.30% 8,008,959 99.94% 1986 1987 8,723,170 In Process of Collection Notes (1) Taxes extended have been adjusted for abatements in Kane County only (2) Current collections in both Kane and Cook Counties include taxes paid under protest The following is a list of ten of the largest taxpayers located within the City's tax base. These values are for real property for 1985 for Cook County and 1986 for Kane County. Real property assessed values for 1986 are not available in Cook County at this time. The diversity of the City's principal taxpayers is evidenced by the breakdown of service: 4 residential, 3 manufacturing, and 3 service industries. Principal Taxpayers(1) Equalized Assessed Name Product/Service Valuation(2) United States Can Company Metal Containers $ 4,846,778 Burnham Mill Apartment Complex 4,007,231 Owners Serivce, Inc. Apartment Complex/Land 3,801,295 Connecticut Mutual Life Ins. Co Apartment Complex 3,529,286 Andorra Property Investors Visa Card Service Center 2,684,682 Elgin Sweeper Company Industrial Cleaning Systems/Street Sweepers 2,539,792 De Anza Willow Lakes Retirement Village 2,165,581 Opus Corporation Office/Commercial/Industrial Parts Cleaning and Repair. . . 2,078,092 C.R. Industries (Chicago Rawhide) Oil Seals, Bushing, Gaskets 1,548,366 Ambro-Elgin Limited Partnership . . . . Holiday Inn Motel 1,479,260 Total $28,680,363 Percent of 1985 Assessed Valuation of$433,064,778 6.62% Notes: (1) Source:Kane and Cook Counties Assessment offices. (2) Latest information available The valuations for Kane taxpayers is for levy year 1986 and for Cook County the valuation is as of levey year 1985. FINANCIAL INFORMATION Basis of Accounting The City of Elgin reports all governmental funds and the Expendable Trust Fund using the modified accrual basis of accounting. Under this method, revenues are recognized when they become measurable and available, as net current assets and expenditures are generally recognized when the related fund liability is incurred. All proprietary funds and Nonexpendable Trust and Pension Trust Funds are accounted for using the accrual basis of accounting. Under this method,revenues are recognized when they are earned,and expenses are recognized when they are incurred. The financial statements of the City are audited annually by certified public accountants. The following reports are summaries and do not purport to be the complete audits,copies of which are available upon request. 8 ___ __ _. General Fund Balance Sheet Audited Calendar Years Unaudited 1981 1982 1983 1984 1985 1986 Assets: Cash and Investments $1,767,657 $1,581,350 $2,614,330 $3,307,706 $ 4,838,847 $ 5,473,673 Taxes Receivable. .. .. ...... .. .. 4,081,563 4,531,038 4,420,902 4,694,178 4,858,682 5,200,461 Due From Other Governments. 687,755 592,486 612,645 579,662 586,737 890,162 Due From Other Funds 558,974 635,064 262,421 438,700 401,258 312,081 All Other .. .... .. .... ....... .... .... 916,210 719,199 711,923 622,715 559,259 374,127 Total Assets .. . ....... .... .... $8,012,159 S8,059,137 $8,622,221 $9,642,961 S11,244,783 S12,250,504 Liabilities and Municipal Equity: Accounts Payable and Accrued Expenses $ 745,783 S 599,877 $ 384,712 $ 577,293 $ 657,677 $ 564,539 Deferred Income(!) - 4,698,641 4,589,027 4,847,203 5,906,781 6,203,024 All Other Liabilities 550,339 99,925 170,474 536,697 904,872 1,548,091 Municipal Equity-Fund Balances 6,716,037 2,660,694(2) 3,478,008 3,681,768 3,775,453 3,934,850 Total Liabilities and Municipal Equity .. .. .. . $8,012,159 $8,059,137 $8,622,221 S9,642,961 $11,244,783 $12,250,504 Notes: (1) Amounts are deferred income due to change in the recognition of revenues received from property taxes and advanced deposits from hotel and motel tax for 1985 and 1986. (See section entitled "Property Taxes-Revenue Recognition") (2) The fund balance at January 1. 1982.was decreased by$4,083,920 in order to accommodate a change in the recognition of revenues received from property taxes.During 1982,a change promulgated by the National Council on Governmental Accounting in accounting principle was adopted affecting the recognition of property tax revenue.Prior to the change,property taxes were accrued as revenue at the date of the levy,but,effective in 1982,revenue recognition is being deferred until the fiscal year following the date of the levy. This change recognizes the extraordinarily long period of time between the levy date and the receipt of tax distributions from the County Collector.Because of this delay,property taxes are not readily available to finance City operations in the year of the levy and,therefore. will be deferred until the time of receipt from the County Collector Since the recognition of expenditures in the Debt Service Fund and the Public Benefit Fund is matched with the related property tax levy,the method for recognizing these expenditures was also changed in 1982 to correspond to the property tax revenue recognized The change had no cash effect. General Fund Revenues and Expenditures Audited Calendar Years Unaudited Budget 1981 1982 1983(/) 1984 1985 1986 1987 _ Revenues: Tax Levies(Net) .... ....... S 4,083,920 $ 4,084,386 S 4,531,963 $ 4,371,842 $ 4,621,467 S 4,869,942 S 5,223,355 Sales Tax... .... ....... . 3,501,219 3,475,732 3,928,224 4,341,720 4,512,496 5,326,664 5,325,000 Other Governmental Agencies .. 474,762 243,800 308,307 335,748 343,317 475,277 387,800 State Income Tax . 1,140,000 1,212,657 1,322,347 1,472,348 1,389,408 1,546,772 1,500,000 Revenues From Other Funds 2,460,873 2,546,813 2,096,994 1,624,650 1,813,250 1,630,843 3,635,450 Investment Income 213,035 290,402 207,292 298,256 400,368 337,203 218,480 Licenses,Permits and Fines 818,210 776,918 849,541 918,513 955,180 1,519,663 1,674,600 All Other . . . . 1,406,106 1,254,102 1,252,015 1,858,909 1,988,309 2,204,807 3,543,080 Total Revenues . S14,098,125 S13,884,810 $14,496,683 $15,221,986 $16,023,795 $17,911,171 $21,507,765 Expenditures: Police Department $ 3,826,661 S 4,172,432 S 4,548,445 S 4,689,493 $ 5,032,988 S 5,364,085 $ 6,431,955 Fire Department 2,438,418 2,719,694 2,716,043 2,883,055 2,907,617 3,324,604 4,035,665 Streets 1,124,778 1,547,977 772,481(2) 769,087 798,109 2,497,139 1,134,640 Public Property and Recreation 1,243,126 1,296,313 1,158,410 1,078,827 1,163,926 1,536,472 1,402,295 Sanitation .... .. 668,210 673,663 736,353 787,852 816,795 938,909 1,049,645 Other Departments 3,479,005 3,446,154 3,747,637 4,740,587 5,210,675 4,090,565 7,453,565 Total Expenditures $12,780,198 $13,856,233 $13,679,369 $14,948,901 $15,930,110 $17,751,774 $21,507,765 Excess (Deficiency) of Revenues Over(Under) Expenditures $ 1,317,927 $ 28,577 $ 817,314 $ 273,085 $ 93,685 $ 159,397 Fund Balance,Beginning of Year 6,039,673 6,716,037 2,660,694 3,478,008 3,681,768 3,775,453 Prior Years'Adjustment (641,563)(3) (4,083,920)(4) - (69,325)(5) - - Fund Balance End of Year $ 6,716,037 $ 2,660,694 $ 3,478,008 $ 3,681,768 $ 3,775,453 S 3,934,850 Notes: (I) Departmental expenditures include transfers to risk management fund. (2) Decrease due to street improvements paid from capital improvement funds. (3) The fund balance at January 1,1981,was decreased by$641,563 to accommodate a change in the recognition of revenues received from sales taxes. Prior to 1981,revenue for the City's portion of the Illinois State Sales Tax had been accrued based upon the month of collection by the retailer This practice resulted in an accrual of three months of sales tax revenue.During 1981.sales tax revenue was recognized in the month of allocation by the State of Illinois resulting in a one month accrual of revenue. (4) The fund balance at January I. 1982. was decreased in order to accommodate a change in the recognition of revenues received from property taxes. (See footnote(2)in preceding table.) (5) Prior period adjustment to correct error in accounting for compensated balances. 9 I ALL FUNDS Combined Summary Statement of Revenues, Expenditures and Changes in Fund Balances Fiduciary Fund Types Governmental Fund Types Nonex- Proprietary Fund Types . - --- - Special Debt Capital Special Expends- pendable Pension Enter- Internal General Revenue(3) Service Projects Assessment ble Trust Trust/Hi) Trust prise(!I) Service(121 Total Balance 12/31/81 S 6,716,037 $2,452,964 S 202,544 S 417,288 $ (724,118) S493,873 $425,000 S13,314,014 $22,422,958 S 224,587 S45,945,147 Revenues $13,884,810 $4,381,894 $ 758,399 S3.715,423(5) $ 238,940 5 72,390 S 51,668 S 3,377,429 $ 7.130,208 $1,468,435 $35,079,596 Expenditures . . . . 13,856,233 4,113,607 934,840 2,206,067 321.390 -0- 26,668 668,339 5391.132 1,441.392 28.959,668 Excess(Deficiency) $ 28,577 S 268,287 $(176,441) $1,509,356 $ (82,450) $ 72,390 $ 25,000 $ 2,709,090 $ 1,739,076 $ 27,043 S 6,119,928 Adjustments(!). (4,083,920) (763,355) 303,495 -0- -0- -0- -0- (1,499,700) 0 -0- (6,043,480) Balance 12/31/82 $ 2,66(1,694 51,957,896 S 329,598 S1,926,644 S (806,568)(8) $566,263 $450,000 S14,523,404 S24,162,034 S 251,630 $46,021,595 Revenues . . . . $14,496,683 $4,834,700 $1,094,279 $3,353,636 S 868,922 $ 56,012 $ 43,702 $ 3,358,023 $ 6378,919 $2,236,776 $36,721,652 Expenditures . 13,679,369 4,402,446 1.112,175 2,853,123 393.357 133,800 18,702 719,164 6,489,753 2.189,374 31,991,263 Excess(Deficiency) .... .... .......... ... ... $ 817,314 5 432,254 $ (17.896) S 500,513 $ 475,565 $(77.788) $ 25,000 $ 2,638,859 $ (110.834) S 47,402 $ 4,730.389 Adjustments . -0- -0- -0- -0- (I,822,097)(9) -0- -0- -0- (103,760) (15,903) (1,941,760) Balance 12/31/83 S 3.478,008 $2,390,150 $ 311,702 $2,427,157 S(2,153,100) $488,475 S475,000 S17,162,263 $23,947,440 S 283,129 $48,810,224 Revenues . . $15,221,986 $4,614,439 $1,984,634 $4,253.816 $ 679,786 $ 50,715 $ 48.744 $ 3,301,990 $10,185,468 $2,543,976 $40,156,144 Expenditures . . . . 14,948,901 4,574,102 1,454.245 5,165.862 190.474 128,300 -0- 805,945 8,232,274 2,617,234 38,042,400 Excess(Deficiency) . $ 273,085 S 40,337 $ 530.389 $ (912,046) $ 489,312 $(77,585) $ 48,744 $ 2,496,045 $ 1,953,194 $ (73,258) $ 2,113,744 Adjustments (69,325)(2) (74,096)(4) -0- 74.096(6) -0- -0 0 -0- 74,937 (124,889)(13) 2,535,196 O Balance 12/31/84 . . S 3,681,768 $2,356,391 S 842,091 $1,589,207 S(1,663,788) $410,890 $523,744 $19,658,308 $25,975,571 S 84,982 $53,459,164 Revenues. . $15,074,893 $4,632,310 $1,738,142 $7,589,515 $ 661,830 S 43.348 $ 51,066 $ 3,510,129 $ 8,431.265 $2,518,807 $44,251,305 Expenditures . . 14.981.208 4,360.119 2,075.870 3,635,473 157,577 122,800 -0- 878,840 8,080.218 2,324,526 36,616,631 Excess(Deficiency) $ 93,685 $ 272,191 $(337.728) 53,954,042 S 504,253 $(79,452) $ 51,066 $ 2,631,289 $ 351,047 $ 194,281 $ 7,634,674 Adjustments . . -0- -0- -0- -0- -0- -0- -0- -0- (66,002) -0- (66,002) Balance 12/31/85 .. .. . . . $ 3,775,453 S2,628,582 $ 504,363 $5,543,249 $(1,159,535) S331,438 $574,810 S22,289,597 $26,260,616 S 279.263 $61,027,836 Revenues $17,911,171 $4,576,716 $2,823,844 $4,838,670 $ 550,836 $ 34,396 $ 49,168 $ 3,854,365 $ 9,029.033 $2,970,026 $46,638,225 Expenditures.. . ... 17,751,774 4,617,839 2,883,018 4,592,038 130,499 117,100 0 982,026 8,178,187 3,356,822 42,609,303 Excess(Deficiency) . $ 159,397 $ (41,123) $ (59,174) $ 246.632 $ 420,337 (82,704) $ 49,168 $ 2.872,339 $ 850,846 $(386,796) $ 4,028,922 Adjustments . . . -0- -0- -0- 1,642,018(7) -0- -0- -0- -0- 383,104 1,222 2,026.344 Balance 12/31/86 . . . S 3,934,850 S2,587,459 $ 445.189 $7,431,899 $ (739,198) S248,734 S623,978 S25,161,936 $27,494,566 $(106,311) S67,083,102 Notes (1) The fund balances of the General Fund.Special Revenue Funds.Debt Service Fund.Pension Trust Funds and Expendable Trust Funds at January I. 1982 were adjusted in order to accommodate a change in the recognition of revenues received from property taxes.(See section entitled"Property Taxes-Revenue Recognition ) (2) Prior period adjustment for compensated absences. (3) Special Revenue includes the following funds Public Benefit,Road and Bridge:CETA Grant:Community Development Grant:Spring Street Parking District.River Bluff Street Lighting District:Federal Revenue Sharing,Illinois Municipal Retirement.Motor Fuel Tax,and Downtown Redevelopment (4) Reflects adjustment of fund balance between the Special Revenue Fund and Capital Projects Fund (5) Includes proceeds from the sale of$2,950,001)General Obligation Bonds. (6) Reflects adjustment of fund balance between the Special Revenue Fund and Capital Projects Fund (7) Increase in land value held for resale in tax increment district (8) The fund deficit was largely due to a delay in the construction of a project due to litigation of the assessment district.The original assessment was approved in 1977,but subsequent litigation delayed the awarding of the construction contract until 1981 (9) Prior period adjustment to reflect NCGA guidelines resulted in a negative fund balance. Receivables of$2,791,443 are deferred until they become measurable and available,while principal of debt is recognized immediately. (10) Working Cash Fund. (I I) Enterprise includes the following funds.Water,Motor Vehicle Parking System;General Cemetery.Cemetery Sinking,Perpetual Care.Golf Course,and Public Transportation. (12) Internal Service includes the Municipal Garage Funds and the Risk Management Fund (13) Prior period adjustment to correct for losses incurred but not reported i Pensions The City of Elgin participates in three benefit pension plans which are funded through both employee and employer contributions. All administrative costs of the plans are borne by the General Fund with other costs accumulated in the separate funds listed below. The City's contributions to each plan are funded through annual tax levies and personal property replacement tax allocations. Illinois Municipal Retirement Fund All employees,other than policemen, firemen,and those working fewer than 600 hours per year,are covered by the Illinois Municipal Retirment Fund (IMRF).The City's fiscal 1986 contribution to the IMRF was$529,694.The IMRF actuary estimates that as of December 31, 1986, (the date of the latest computation), the present value of the City's portion of accumulated IMRF benefits was$10,950,680. (The vested and non-vested portions of these liabilities are not available.)The net assets accumulated by the City available for such benefits at'nounted to$3,303,935 on the same date. The normal cost portion of the City's contribution rate is expected to provide$1,763,870 of future contribution and the prior service portion of the rate is expected to provide $5,882,875. Police and Firemen's Pension Funds All of the City's policemen are covered by the Police Pension Fund and its firemen are covered by the Firemen's Pension Fund. The City's fiscal 1986 contributions were $354,271 and $463,872 for the Police and Firemen's Pension Funds, respectively. The total actuarial requirements at December 31, 1985, (the date of the latest computation) amounted to $16,873,225 for the Police Pension Fund and $15,912,798 for the Firemen's Pension Fund as determined by the Illinois Department of Insurance. Police Firemen's Pension Fund Pension Fund Net Present Assets $11,024,634 $11,264,962 Unfunded Accrued Liability 5,848,590 4,647,835 $16,873,225 $15,912,798 The vested and non-vested portions of the above amounts are not available. DEBT INFORMATION The City of Elgin's general obligation debt will equal $34,610,000, including this issue. A large portion of this indebtedness, $21,300,000, is expected to be retired from sources other than City-wide general taxes. More than 50%of tax supported debt is intended to be retired within 5 years and half of all debt within 7 years. General Obligation Bond Retirement Schedule(000) (From May 1, 1987, Including Current Issue) Projected For Abatement From Various Sources Fiscal Paid Solely From Water Years Property Taxes Fund and Combined Total All Principal(2) Ending Annual Cumulative TIF Other Cumulative Annual Cumulative 12/31 Amount Percent District Sources(/) Percent Amount Percent 988 $ ,225 9.31% $ — $ 925 4.34% $ 2,150 6.24% 989 ,400 19.95% — ,100 9.51% 2,500 13.49% 990 ,550 31.72% — ,000 14.20% 2,550 20.89% 991 ,700 44.64% — ,150 19.60% 2,850 29.16% 992 ,650 57.18% 50 ,200 25.47% 2,900 37.58% 993 ,675 69.91% 50 ,325 31.92% 3,050 46.43% 994 700 75.23% 75 ,200 37.91% 1,975 52.16% 995 460 78.72% 100 ,300 44.48% 1,860 57.56% 996 400 81.76% 125 ,400 51.64% 1,925 63.15% 997 400 84.80% 150 ,500 59.39% 2,050 69.09% 998 400 87.84% 200 ,600 67.84% 2,200 75.48% 999 450 91.26% 275 ,600 76.64% 2,325 82.23% 2000 450 94.68% 350 ,700 86.27% 2,500 89.48% 2001 450 98.10% 450 — 88.38% 900 92.09% 2002 250 100.00% 525 — 90.85% 775 94.34% 2003 — 600 — 93.66% 600 96.08% 2004 — 650 — 96.71% 650 97.97% 2005 — 700 — 100.00% 700 100.00% $13,160 $4,300 $17,000 $34,460 Notes (1) Comprised of the 1975 Corporate Purpose Bonds with taxes being abated from Special Assessments;a portion of the 1976 Corporate Purpose Bonds with taxes being abated from the earnings of the Water Fund,$17,300,000 Water Bonds,Series 1980 with taxes being abated from the earnings of the Water Fund;and a portion of the 1982 Corporate Purpose Bonds with taxes being abated by lease payments (2) Does not include various special assessment bonds,special service area bonds,public benefit debt,and a 1985 computer installment contract.In addition there is a$150.000 principal payment due December 1, 1987. 11 • Detail of Overlapping Bonded Debt (As of February 1, 1987) Applicable Total Debt Percent Amount • Schools: • Community Unit School District #46 $ 15,450,000 39.96% $ 6,173,820 School District #300 9,240,000 5.44% 502,656 Total Schools $ 6,676,476 Other Than Schools: Cook County(/) $361,904,000 0.24% $ 868,570 Cook County Forest Preserve District 30,350,000 0.24% 72,840 Metropolitan Sanitary District 674,390,000 0.04% 269,756 Kane County(2) 3,306,000 17.10% 565,326 Kane County Forest Preserve District 5,335,000 17.10% 912,285 Elgin Sanitary District 300,000 76.87% 230,610 Special Service Area Number 4 1,500,000 100.00% 1,500,000 Total Other Than Schools $ 4,419,387 Total Overlapping Bonded Debt $11,095,863 Notes: (I) Includes General Obligation Bonds outstanding. Cook County's proportionate share of Public Building Commission of Chicago Revenue Bonds.notes issued under a demand note program,and interim financing notes.Does not include tax anticipation notes. (2) Includes principal amount of bonds issued for Kane County Public Building Commission,which are secured by lease rental payments which are a direct obligation of the County TAX EXEMPTION The Tax Reform Act of 1986 contains a number of requirements and restrictions which apply to the Bonds,including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the timely and proper use of bond proceeds and the facilities financed therewith and certain other matters. The proceedings of the City and the documents relating to the Bonds include provisions which, if complied with by the City, meet the requirements of the Tax Reform Act of 1986. Failure to comply with certain of such document provisions may cause interest on the Bonds to become subject to federal income taxation retroactive to the date of issuance of the Bonds. Assuming compliance by the City with the above referenced document provisions, in the opinion of Bond Counsel, interest on the Bonds will not, under present law,be includible in gross income of the owners thereof for federal income tax purposes and,therefore, will be exempt from present federal income taxation,except to the extent that such interest will be taken into account in computing an adjustment used in determining the alternative minimum tax for certain corporations,in computing the environmental tax imposed on certain corporations and in computing the"branch profits tax" imposed on certain foreign corporations. The Tax Reform Act of 1986 includes provisions for an alternative minimum tax("AMT")for corporations which is levied for taxable years beginning after December 31, 1986,in addition to the corporate regular tax in certain cases.The AMT, if any, depends upon the corporation's alternative minimum taxable income ("AMTI"), which is the taxable income with certain adjustments. One of the adjustment items used in computing AMTI of a corporation (excluding S Corporations,Regulated Investment Companies,Real Estate Investment Trusts,or REMICs)is an amount equal to 50% of the excess of such corporation's "adjusted net book income" over an amount equal to its AMTI (before such adjustment item and the alternative tax net operating loss deduction). For taxable years beginning after 1989, such adjustment item will be 75%of the excess of such corporation's"adjusted current earnings"over an amount equal to its AMTI (before such adjustment item and the alternative tax net operating loss deduction). Both "adjusted net book income" and "adjusted current earnings" would include all tax-exempt interest, including interest on the Bonds. The "Superfund Revenue Act of 1986" imposes an additional tax on a corporation at a rate of.12 percent on the excess over $2,000,000 of such corporation's "modified alternative minimum taxable income", which would include a portion of the interest on the Bonds. Under the provisions of Section 884 of the Code,a branch profits tax may be levied(for taxable years beginning after `) December 31, 1986) on the "effectively connected earnings and profits" of certain foreign corporations, which include tax-exempt interest such as interest on the Bonds. 12 Ownership of tax-exempt obligations may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations. Prospective purchasers of the Bonds should consult their tax advisors as to applicability of any such collateral consequences. • AUTHORIZATION The foregoing Official Statement is authorized for distribution to prospective purchasers and underwriters of the offered$2,700,000 General Obligation Corporate Purpose Bonds,Series 1987.All statements,information and statistics herein are believed to be correct but are not guaranteed by the consultants or by the City and all expressions of opinion, whether or not so stated,are intended only as such.The City has supplied certain information and material to the rating j service shown on the cover page as part of its application for an investment rating on these bonds.A rating,if assigned,is subject to revision, suspension or withdrawal at any time by the rating agency. An explanation of the significance of 1 investment ratings may be obtained from the rating agency: Moody's Investors Service, 99 Church Street, New York, New York 10007, telephone (212) 553-0300. CERTIFICATION We have examined the attached Official Statement dated May 18, 1987, for the $2,700,000 General Obligation Corporate Purpose Bonds,Series 1987,believe it to be true and correct and will provide to the purchaser of the bonds at the time of delivery a certificate confirming to the purchaser that to the best of our knowledge and belief the information in the Official Statement was at the time of acceptance of the bid for the bonds,and including any addenda thereto,was at the time of delivery true and correct in all material respects and does not include any untrue statement of a material fact, nor does it omit the statement of any material fact required to be stated therein, or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. /S/ JAMES H. BOLERJACK, JR. /S/ GEORGE VAN DE VOORDE Director of Finance Mayor City of Elgin, Illinois City of Elgin, Illinois May 18, 1987 13 4 [THIS PAGE INTENTIONALLY LEFT BLANK] l j • V OFFICIAL BID FORM City of Elgin June 9, 1987 City Hall Elgin, Illinois ) Council Members: For your$2,700,000 City of Elgin, Illinois,General Obligation Corporate Purpose Bonds,Series 1987,described in the annexed Official Notice of Sale, which is expressly made a part hereof, we will pay you $ plus accrued interest from July 1, 1987,to the date of delivery.The bonds are to bear interest at the following respective rates (each a multiple of 1/8 or '/p of 1%) for bonds of each designated maturity. MATURITIES—January 1 $600,000. . . 1990 % $650,000. . . 1991 % $750,000. . . 1993 % 700,000. . . 1992 % Said bonds are to be executed and delivered to us in accordance with the terms of this bid accompanied by the approving legal opinion of Chapman and Cutler,Attorneys,Chicago,Illinois.You are to pay for the legal opinion and for printing the bonds. Unless we notify you to the contrary within 24 hours, CUSIP numbers are to be applied for and printed on the bonds at our expense,and we agree to accept the bonds at delivery with the CUSIP numbers as printed. As evidence of good faith,we enclose herewith a check in the sum of$54,000 in accordance with your Official Notice of Sale. A list of the members of our account on whose behalf this bid is made is appended hereto. Respectfully submitted, Description of Check: Amount: $54,000 Name Name of Bank Account Manager By City__ — — Address City State State- Certified (Cashier's) Check No. NOT A PART OF BID - Dated Our calculation of net interest cost from above is: Total Interest $ (For Use By City Only) The above check was returned and received for the Less Premium/Plus Discount $ above named Account Manager Net Interest Cost1 $ By Net Interest Rate % The foregoing bid was accepted and bonds sold by resolution of the Council of the City of Elgin, Illinois, June 9, 1987,and receipt is hereby acknowledged of the good faith check which is being held in accordance with the terms of the Official Notice of Sale. CITY OF ELGIN, ILLINOIS ATTEST: City Clerk Mayor TOTAL BOND YEARS :S. 11,050.000 AVERAGE LIFE: 4.092593 Years OFFICIAL NOTICE OF SALE $2,700,000 CITY OF ELGiN Kane and Cook Counties,Illinois General Obligation Corporate Purpose Bonds,Series 1987 The City of Elgin,Illinois,will receive sealed bids for its$2,700,000 General Obligation Corporate Purpose Bonds,Series 1987,on an all or none basis,at 55 East Monroe Street,Suite 4510,Chicago,Illinois(mailed bids should be sent c/o Speer Financial,Inc.)until 11 00 A M,C.D.T,June 9, 1987,at which time bids will be publicly opened and read Award will be made,or all bids rejected,at a meeting of the Council in Elgin on that date. The bonds are general obligations of the City,payable as to both principal and interest from ad valorem taxes to be levied on all taxable property within the City,without limitation as to rate or amount.The bonds will be dated July I,1987,will be in fully registered form,will be in the denomination of$5,000 and authorized integral multiples thereof,and will mature serially on January I of each of the years 1990-1993,inclusive,as follows. MATURITIES—January 1 $600,000 . . . .1990 $650,000 1991 $750,000 1993 700,000 . 1992 The bonds will be payable at The First Commercial Bank,Chicago, Illinois (the"Bond Registrar") Interest on each bond will be payable on January 1 and July 1 of each year commencing July 1, 1988,by check or draft of the Bond Registrar mailed to the person in whose name such bond is registered. The bonds will be awarded to the best bidder determined upon the basis of the lowest total interest at the rate or rates designated in said bid from July 1, 1987,to the respective maturity dates and deducting therefrom the premium bid.Each bidder shall name a rate or rates of interest which the bonds are to bear,and each rate must be a multiple of one-eighth or one-twentieth of one percent(Vs or'A.of 1%),and no more than one rate for a single maturity shall be specified The difference between the lowest rate bid and the highest rate bid may not exceed two percent(2%) Bids must be for all or none of the bonds,must be for not less than$2,675,000 plus accrued interest to date of delivery and must be made upon the Official Bid Form and delivered in a sealed envelope marked"Bid for Bonds"at the time set out above.The City reserves the right to reject any or all bids and to determine the best bid in its sole discretion and to waive any informality in any bid. Each bid shall be accompanied by a certified or cashier's check on a solvent bank or trust company for$54,000 payable to the City Treasurer of the City of Elgin,Illinois,as evidence of good faith of the bidder.The check of the successful bidder will be retained uncashed by the City pending delivery of the bonds.All other checks will be returned promptly.No interest will be allowed on any checks.Should the successful bidder fail to take up and pay for the bonds when tendered in accordance with his bid and this Notice,his check shall be cashed by the City and the proceeds retained as full and liquidated damages to the City caused by failure of the bidder to carry out his offer of purchase.Otherwise,his check will be applied on the purchase price of the bonds when delivered,or returned uncashed at delivery. The successful bidder agrees that on or before delivery of the bonds,it will deliver a certificate confirming the initial offering prices of the bonds to the public (not including bond houses and brokers or intermediaries or similar persons or organizations acting in the capacity of underwriters or wholesalers)at which price a substantial amount of the bonds in each maturity are in fact sold in such certificate,the successful bidder shall also certify the reasonableness of the interest rates on the bonds,the spread,production or profits realized in the purchase and sale of the bonds,and the purchase price paid to the City for the bonds.The certificate will be in form and substance drafted by or acceptable to bond counsel.The certificate will be relied upon by the City for the purpose of obtaining and maintaining the tax-exempt status of interest on the bonds. The City intends to designate the bonds as"qualified tax-exempt obligations"pursuant to the small issuer exception by Section 265(b)(3)of the Internal Revenue Code of 1986. The printed bonds,in standard 8-inch by 12-inch form,will be delivered to the successful bidder against full payment in immediately available funds in Chicago,Illinois,as soon as they can be printed and executed,which is expected to be on or about July 1, 1987.Should delivery be delayed beyond 60 days from the date of sale for any reason except failure of performance of the successful bidder,then the bidder may cancel his agreement to purchase the bonds and receive back his check,and thereafter his interest in and liability for the bonds will cease. ) The City Council has authorized the preparation of an Official Statement containing pertinent information relative to the City and its finances.For copies of that Statement or for any additional information,any prospective purchaser is referred to the undersigned at the City Hall,Elgin,Illinois,or the Public Finance Consultants to the City,Speer Financial,Inc.,55 East Monroe Street,Suite 4510,Chicago,Illinois 60603.Telephone:Area 312- 346-3700. /S/ MARIE YEARMAN City Clerk City of Elgin, Illinois