HomeMy WebLinkAbout00-126 Resolution No. 00-126
RESOLUTION
AUTHORIZING THE SALE OF UNALLOCATED INDUSTRIAL DEVELOPMENT
REVENUE BOND AUTHORITY FOR THE YEAR 2000
WHEREAS, the State of Illinois has allocated to the City
of Elgin $4 , 375, 350 in industrial development revenue bond
authority for the year 2000 ; and
WHEREAS, the City of Elgin has previously allocated
$3 , 200, 000 of such year 2000 industrial development revenue
bond authority leaving a remaining balance of unallocated
authority of $1, 175, 350 ; and
WHEREAS, no single entity has submitted an application to
the City of Elgin to receive such remaining unallocated
authority; and
WHEREAS, if the City of Elgin' s remaining unallocated
industrial development revenue bond authority for the year
2000 is not committed to a specific project by May 1, 2000,
the unused capacity shall revert back to the State of
Illinois; and
WHEREAS, the City of Elgin has received a request from
Harbor Tool Manufacturing, Inc . , an Illinois corporation, to
purchase approximately $1, 100 , 000 of the city' s remaining
unallocated industrial development revenue bond authority for
the year 2000 to assist in the financing of a qualifying
project by Harbor Tool Manufacturing, Inc . in the Village of
Tinley Park, Illinois .
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF ELGIN, ILLINOIS, that the City Manager Joyce A. Parker
is hereby authorized and directed to enter into an agreement
in a form approved by the Corporation Counsel which provides
for the sale of the City of Elgin' s unallocated industrial
development revenue bond authority for the year 2000 in an
amount not to exceed $1, 175, 350 at the sale price of two
percent (2%) of the industrial development revenue bond
authority being sold.
s/ Ed Schock
Ed Schock, Mayor
Presented: April 26 , 2000
Adopted: April 26, 2000
Vote : Yeas 7 Nays 0
Attest :
s/ Dolonna Mecum
Dolonna Mecum, City Clerk
City of Elgin Agenda Item No.
� �. . D D o (1.) C 6 in fn TE
RATED Ft".
a T 1 t- C
April 24, 2000 ND R t k
TO: Mayor and Members of the City Council
FROM: Joyce A. Parker, City Manager
SUBJECT: Undesignated Year 2000 Industrial
Revenue Bond Capacity
PURPOSE
The purpose of this memorandum is to provide the Mayor and the
members of the City Council with information regarding the City' s
unallocated Industrial Revenue Bond capacity.
BACKGROUND
In 2000, the Office of the Governor for the State of Illinois has
allocated $4, 375, 350 to the City of Elgin in Industrial Revenue
Bond (IRB) authority. The City has utilized this financing
mechanism in order to encourage industrial economic development .
The City has already allocated $3, 200, 000 in year 2000 capacity to
Nelson Graphic Screenprinting, Inc. Some interest had been shown
in the remaining $1, 175, 350 of capacity, however, no single entity
has submitted an application to the City in order to receive the
funding capacity. If the dollars are not committed to a specific
project by May 1, 2000, the unused capacity reverts back to the
Governor' s office, giving them discretion to where the IRB
authority can be allocated.
The City does have the option of selling its unused bonding
authority to another community. This is a common practice among
municipalities where the typical selling price is 2% of the
unallocated capacity. If Elgin sold its unallocated capacity to
another community at a rate of 2%, the City would receive $23, 507 .
To date, the City has not used the option of selling its unused
capacity to another community. Elgin returned unused capacity to
the State approximately six years ago. Since that time, the
capacity has been used for Elgin-related projects . The City has
also facilitated the purchase of excess capacity of the Village of
Downers Grove for use by an Elgin company.
Undesignated IRB Capacity
April 20, 2000
Page 2
Two firms have expressed interest in Elgin' s unallocated funds :
LaSalle Capital Markets for a project in Tinley Park and Chapman &
Cutler for a project in Elk Grove Village. Both firms are offering
the 2% purchase premium on behalf of their clients .
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
None .
FINANCIAL IMPACT
The sale of $1, 175, 350 in unallocated IRB capacity at 2% would
result in a payment to the City of $23, 507 .
LEGAL IMPACT
/� 1
None . /'l
ALTERNATIVES
1 . Sell the unused IRB capacity to a non-competing community at
2% .
2 . Return the unused capacity to the State of Illinois .
RECOMMENDATION
Staff recommends that the Mayor and members of the City Council
authorize the sale of the $1, 175, 350 in unused IRB capacity to a
non-competing community at a sale price of 2% of the available
volume cap.
Respectfully submitted,
a ./2L,
Jo e . Parker
City Manager
RHM: amp
Apr-)'-00 04:43pm From-ABN AFRO FINANCE +3129041353 T-350 P.01 F-692
LaSalle Capital Markets
A Division of ABN AMMO Incorporated —
'o1 West Madison Street
Chicago,Illinois 60602-4510 Poot-It'Fax Note 7671 Date 7i Qo Papee► 1
(312)904-8600 L
To KCA1 rno hexi From G l i r/..
Co./Dept. Co.
Phone# Phone P 3\L.98 tf•��C
Fax A Fex# 1
VIA-FACSIMILE
April 17,2000
Raymond H. Moller
Director of Business Services & Property
The City of Elgin
150 Dexter Court
Elgin, Illinois 60120-5555
Dear Mr. Moeller:
Pursuant to our conversation this afternoon, I would like express our client's interest in
purchasing $1,000,000 of Elgin's year 2000 volume cap allocation for a fee not to exceed
2%.
Our client is working on a bond issue and would like to close it as soon as possible.
Please let me know your ability to"confirm"the purchase.
Sine rely
Peter G. Glick
Vice President
(312) 904-7036