HomeMy WebLinkAbout01-241 • I
Resolution No. 01-241
RESOLUTION
AUTHORIZING THE EXECUTION OF A MEMORANDUM OF AGREEMENT
(Easter Seals Jayne Shover Center Project)
WHEREAS, the City of Elgin, Illinois (the "Issuer") is authorized under its home rule
powers, as set forth in the 1970 Constitution of the State of Illinois, Article VII, Section 6, to
issue special limited obligation revenue bonds for the purpose of financing, in whole or in part,
the cost of the acquisition, purchase, construction, reconstruction, improvement, betterment or
extension of any project for an organization organized under Section 501(c)(3) of the Internal
Revenue Code of 1986 (the"Code");
WHEREAS, Easter Seals Jayne Shover Center, an Illinois not for profit corporation
organized under Section 501(c)(3) of the Code (the "Borrower") wishes to finance or refinance
(i) certain costs of renovating, remodeling and equipping its outpatient rehabilitation, education
and community service facility located at 799 S. McLean Boulevard, in Elgin, Illinois (the
"Center"), (ii)certain indebtedness of the Borrower incurred to pay the costs of constructing and
equipping an addition of approximately 23,500 square feet to the Center, including preschool
classrooms, an inclusive day care center and new and expanded therapy rooms (collectively with
(i), the "Project"), and (iii) certain expenses incurred in connection with the issuance of the
Series 2001 Bonds, including the fees of a credit facility issuer(collectively with the Project,the
"Financing Purposes") and wishes to have the Issuer issue its special limited obligation revenue
bonds to finance the Financing Purposes;
WHEREAS, a Memorandum of Agreement (the "Agreement") has been presented to the
Issuer under the terms of which the Issuer agrees, subject to the provisions of such Agreement, to
issue its special limited obligation revenue bonds to finance the Financing Purposes; and
WHEREAS, the City Council of the Issuer wishes to begin the proceedings necessary to
enable the Issuer to issue its special limited obligation revenue bonds to provide funds for the
Financing Purposes, including the holding of a public hearing pursuant to the provisions of
Section 147(f) of the Code;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF ELGIN, KANE AND COOK COUNTIES, ILLINOIS,as follows:
Section 1. The form, terms and provisions of the Agreement presented to this meeting
are hereby approved.
Section 2. The Mayor of the Issuer is hereby authorized to execute, and the City Clerk of
the Issuer is hereby authorized to attest to the Agreement with the Borrower in substantially the
form of such agreement appended to this Resolution as Exhibit A.
Section 3. The officers and employees of the Issuer are hereby authorized to take such
further action as is necessary to carry out the intent and purposes of the Agreement as executed
CH- 1175852v3 I
r
and to issue not to exceed $2,065,000 of its special limited obligation revenue bonds upon the
terms and conditions stated in such Agreement for the purpose of defraying the cost of the
Financing Purposes and that the same is declared to be for a public purpose.
Section 4. The Issuer hereby declares its intent to assist the Borrower under Treasury
Regulations Section 1.150-2 to reimburse any expenditures made on costs of the Project prior to
the issuance of the Issuer's special limited obligation revenue bonds with proceeds of such bonds.
Section 5. The City Clerk of the Issuer is hereby authorized and directed to call the
public hearing required by Section 147(f) of the Code at a time and place convenient to the City
Council of the Issuer, and to cause notice of such hearing to be published in a newspaper of
general circulation in the city of Elgin, Kane and Cook Counties, Illinois.
Section 6. All ordinances, resolutions, orders and parts thereof in conflict herewith are
hereby superseded to the extent of such conflict.
Section 7. If any section, paragraph, clause or provision of this Resolution shall be held
invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the
other provisions of this Resolution.
Section 8. This Resolution shall be in full force and effect upon its passage and approval.
s/ Ed Schock
Ed Schock, Mayor
Presented: August 22 , 2001
Adopted: August 22 , 2001
Vote: Yeas 7 Nays 0
Attest:
s/ Dolonna Mecum
Dolonna Mecum, City Clerk
CH- 1175852v3 2
MEMORANDUM OF AGREEMENT
THIS MEMORANDUM OF AGREEMENT is between the City of Elgin, Illinois (the
"Issuer"), and Easter Seals Jayne Shover Center, an Illinois not for profit corporation (the
"Borrower").
1. Preliminary Statement. Among the matters of mutual inducement which have
resulted in this Agreement are the following:
(a) The Issuer is authorized under its home rule powers, as set forth in the
1970 Constitution of the State of Illinois, Article VII, Section 6, to issue special
limited obligation revenue bonds for the purpose of financing, in whole or in part,
the cost of the acquisition, purchase, construction, reconstruction, improvement,
betterment or extension of any project for an organization organized under
Section 501(c)(3) of the Internal Revenue Code of 1986 (the "Code") and to enter
into a loan agreement with the Borrower pursuant to which the proceeds of such
special limited obligation revenue bonds may be lent to the Borrower to finance
the costs of the acquisition, rehabilitation and equipping of such a project.
(b) The Borrower is a 501(c)(3) organization and wishes to obtain satisfactory
assurance from the Issuer that the proceeds of the sale of such special limited
obligation revenue bonds of the Issuer will be made available to it to finance or
refinance the costs of the rehabilitation, expansion and equipping its outpatient
rehabilitation, education and community service facility located at 799 S. McLean
Boulevard in Elgin, Illinois, and the addition of 23,500 square feet thereto and
related expenses and costs(the "Project").
(c) Subject to the conditions contained herein and to the due compliance with
all requirements of law, the Issuer, by virtue of its home rule authority, will issue
and sell its special limited obligation revenue bonds in an amount not to exceed
$2,065,000 (the"Bonds") to finance the costs of the Project.
(d) The Borrower has presented the Issuer with evidence of its intention to
reimburse itself for expenditures relating to the Project which it may pay from
funds which are not proceeds of the Bonds.
(e) The Bonds shall be limited obligations of the Issuer payable solely and
only out of the revenues and receipts derived from the trust estate established
under the indenture of trust or loan agreement, or both, or any similar document
pursuant to which the Bonds are issued and the proceeds thereof loaned to the
Borrower; the Project shall be financed by means of a loan of the proceeds of the
Bonds to the Borrower, and the Borrower shall agree to make payments in an
amount sufficient to pay the principal and purchase price of, and premium, if any,
and interest on, and expenses related to the Bonds. No holder of any of the Bonds
shall have the right to compel any exercise of the taxing power of the Issuer, and
CH-1175852v3 A-1
the Bonds shall not constitute an indebtedness or a loan of credit of the Issuer
within the meaning of any constitutional or statutory provision.
2. Undertakings on the Part of the Issuer. Subject to the conditions above stated, the
Issuer agrees as follows:
(a) That it will authorize the issuance and sale of the Bonds pursuant to the
terms of the applicable requirements of law as then in force.
(b) That it will, at the proper time and subject in all respects to the prior
advice, consent and approval of the Borrower, adopt or cause to be adopted, such
proceedings and authorize the execution of such documents as may be necessary
and advisable for the authorization, issuance, and sale of the Bonds as aforesaid,
and that it will enter into a loan agreement whereby the Borrower will agree to
pay to or on behalf of the Issuer such sums as shall be sufficient to pay the
principal and interest and redemption premium, if any, on, and expenses related to
the Bonds as and when the same shall become due and payable.
(c) The Issuer hereby declares its intent to assist the Borrower under Treasury
Regulations Section 1.150-2 to reimburse any expenditures made on costs of the
Project prior to the issuance of the Bonds with proceeds of the Bonds.
3. Undertakings on the Part of the Borrower. Subject to the conditions above stated,
the Borrower agrees as follows:
(a) That it will use all reasonable efforts to find one or more purchasers for
the Bonds.
(b) That contemporaneously with the delivery of the Bonds it will enter into a
loan agreement with the Issuer under the terms of which the Borrower will
obligate itself to pay to the Issuer sums sufficient in the aggregate to pay the
principal of and interest and redemption premium, if any, and expenses related to
the Bonds as and when the same shall become due and payable.
4. General Provisions.
(a) All commitments of the Issuer under Paragraph 2 hereof and of the
Borrower under Paragraph 3 hereof are subject to the condition that on or before
October 31, 2001 (or such other date as shall be mutually satisfactory to the Issuer
and the Borrower), the Issuer and the Borrower shall have agreed to mutually
acceptable terms and conditions of the loan agreement and of the Bonds and other
instruments or proceedings relating to the Bonds. The decision not to approve or
agree to any term or condition of any document or not to take any action prior to
issuance of the Bonds shall rest solely within the complete discretion of the
parties to this Agreement.
(b) If the events set forth in (a) of this Paragraph 4 do not take place within
the time set forth or any extension thereof and the Bonds in an amount not
CH- 1175852v3 A-2
•
exceeding the amount stated above are not sold within such time, the Borrower
agrees that it will reimburse the Issuer for all reasonable and necessary direct out-
of-pocket expenses which the Issuer may incur at the Borrower's request or as a
result of or arising out of this Agreement including but not limited to the payment
of attorney and other consultant fees arising from the execution of this Agreement
and the performance by the Issuer of its obligations hereunder, and this
Agreement shall thereupon terminate.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement by their
officers thereunto duly authorized as of the 22nd day of August , 2001
CITY OF ELGIN, ILLINOIS
Mayor
(SEAL)
ATTEST
b9414-1^-1Q_
City Clerk
EASTER SEALS JAYNE SHOVER CENTER
By �►
By
CH- 1175852v3 A-3
` OF ez
City of Elgin Agenda Item No.
e
�ATEDEE�'' E ;tor
�,,..;
a�+ '
August 17, 2001
N
TO: Mayor and Members of the City Council
ECONOMIC
GROWTH
er
FROM: Joyce A. Parker, City Manager
SUBJECT: Issuance of 501 (c) (3) Bonds -
Jane Shover Easter Seals Center
PURPOSE
The purpose of this memorandum is to seek the approval of the Mayor
and members of the City Council for the issuance of 501 (c) (3) bonds
on behalf of the Jane Shover Easter Seals Center.
BACKGROUND
Jane Shover has requested the City Council adopt an ordinance
authorizing the issuance of $2 , 065, 000 in private activity bonds .
The proceeds of the bond issue would be used by the Center to
refinance existing construction loans of $1, 064 , 000 and to finance
future improvements on the older existing building.
The Center is a non-profit, out patient rehabilitation and
childcare center governed by a board of volunteer directors . The
Center was founded in 1952 and is currently located in the City.
The Center provides the following services : physical therapy;
occupational therapy; speech and language therapy; audiology;
preschool ; child care; foster care; respite; special recreation;
and homebound and developmental therapy. The Center serves the
communities of Elgin, South Elgin, Hanover Park, Geneva, St .
Charles, Bartlett, Burlington, Carpentersville, Dundee, Gilberts,
Hampshire, Lily Lake, Maple Park, Plato Center, Sleepy Hollow,
Streamwood, Virgil, Wasco and Wayne.
The Center currently has 52 full-time employees, 11 part-time
employees and 11 managers . Currently 11 of the Center' s employees
live in the City. The Center expects to retain all of its current
employees and create 15 permanent full-time and six part-time
positions consisting of teachers, assistants, receptionists and
administrative assistants . The total annual payroll is
approximately $1, 920, 000, with an annual average employee salary of
$22 , 000 .
Issuance of 501 Bonds Easter Seals
August 17, 2001
Page 2
The Center has previously participated in the City' s 4th of July
Parade, attended City Council meetings, enrolled staff in the Elgin
Leadership Academy and is a yearly Rotary member. The Center will
continue its support of the above-mentioned activities and plans to
support future activities .
Under the federal tax code, the City may issue non-obligation
"conduit" bonds for the benefit of any corporation, such as Summit
School, which has obtained 501 (c) (3) tax exempt status from the
Internal Revenue Service . Bonds issued by the City on behalf of
501 (c) (3) corporations are substantially identical to the
industrial development revenue bonds ("IRB' s" ) that have ben used
to finance industrial facilities in Elgin (with the exception that
these bonds do not affect our volume cap) . Like IRB' s, the City
would be a "conduit" issuer, and the repayment of the bonds would
not be an obligation of the City. According to the structure of
the transaction, American National , and not the City or the
bondholders, takes the full and complete credit risk of nonpayment
of the bonds by Jane Shover Easter Seals Center. The bonds do not
constitute indebtedness of the City, and the Center will indemnify
the City in connection with the bond issuance . Due to the fact
that the City issues the bonds, they are considered tax exempt and,
therefore, carry a lower interest rate .
Speer Financial, Inc. , the City' s financial advisor, has reviewed
the Jane Shover' s application for 501 (c) (3) financing as well as
the financial audits . They recommend that the City proceed with
the financing. Speer' s report is included with this memorandum.
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
None.
,) FINANCIAL IMPACT
0 Jane Shover has paid the $2 , 500 IRB application fee . As stated
earlier, the City is not responsible for the repayment of the
b nds .
V41/ EGAL IMPACT
None.
Issuance of 501 Bonds Easter Seals
August 17, 2001
Page 2
ALTERNATIVES
Do not issue the 501 (c) (3) bonds, resulting in Jane Shover Easter
Seals Center securing alternative financing which is not tax exempt
and carries a higher interest rate .
RECOMMENDATION
It is recommended that the Mayor and members of the City Council
adopt the inducement resolution and accompanying memorandum of
agreement to commence the process for the proposed issuance of
$2 , 065, 000 in Adjustable Rate Demand Revenue Bonds, Series 2001 for
the Jayne Shover Easter Seals Center project . It is further
recommended that the Mayor and members of the City Council schedule
a public hearing on the proposed issuance of such bonds for the
next City Council meeting of September 12 , 2001 at 7 : 00 p.m.
Respectfully submitte ,
J ce . Parker
City Manager
RHM: sp
Attachment
.97/24/01 08:17 FAX 616 771 4317 FUNDS MANAGEMENT lj006
JUL-23-01 MON 03:05 PM CITY OF ELGIN/CITY MGR. FAX NO. 18479315610 P. 06
'CITY OF ELGIN
APPLICATION FOR INDUSTRIAL DEVELOPMENT BOND FINANCING
EASTER SEALS JAYNE SHOVER•CENTER
Business Name:
Address• 799 S. MCLEAN BLVD. ,
City, State: ELGIN, ILLINOIS 60123
REBECCA DAUSMAN
, Representative:
847-742-3264
Telephone: _
Federal Tax ID Number: 36-2251907 •
Amount of Proposed Bond Issue: $ 2,065,000
Name of Bond Purchaser: TO BE SOLD TO THE PUBLIC
Form of organization of Borrower; NOT FOR PROFIT COPORATION
Name of Bond Counsel: JONES DAY
•
PETER BAZOS
Name of Corporate Lawyer:
SCHNELL, BAZOS, FREEMAN, KRAMER & SCHUSTER
Proposed Use of Proceeds : TO REFINANCE EXISTING CONSTRUCTION LOANS
OF $1,604,000 AND TO FINANCE FUTURE IMPROVEMENTS ON THE OLD EXISTING
BUILDINGS. •
•.07/24/01 08:17 FAX 618 771 4317 FUNDS MANAGEMENT IJ007
. JUL-23-01 MON 03:06 PM CITY OF ELGIN/CITY MGR. FAX NO. 18479315610 P. 07
•
YES. LAST SEPTEMBER 2000, 23500 SQUARE FEET
Is proposal a now facility?
FACILITY WAS COMPLETED. THE ADDITIONAL IMPROVEMENTS WILL BE COMPLETED BY DECEMBER
2002. •
•
Is the proposal industrial/Commercial/Retail? COMMERCIAL
OUTPATIENT MEDICAL
What is the principal product of the company?
REHABILITATION
What are the proposed financing arrangements?
TO PAY OFF EXISTING CONSTRUCTION OBLIGATIONS INCURRED LAST YEAR AND TO
FINANCE THE FUTURE IMPROVEMENTS ON THE OLDER FACILITIES. •
3/1/99 TO 9/22/00 FOR
Give the approximate dates of construction: _
23,500 SF AND THE ADDITIONAL IMPROVEMENTS WILL BE BY THE FN T nF'nn2 _
ECONOMIC
A. Project Costs
1 . Construction Costs 5 3'259,966
2 . Financing Costs $ _
52,000
3. Equipment Costs $_ 282,018
OWNED
4- Land $
5- Architectural $ 205,931
•
•
6 . Legal $ 1500
173,545
7 . Other $_
'.07/24/01 08:17 FAX 616 771 4317 FUNDS MANAGEMENT 0 008
• .JUL-23-01 HON 03:06 PH CITY OF ELGIN/CITY MGR, FAX NO. 18479315610 P. 08
y .
B. Financial Stability (provide the following) .
•
( COPY ATTACHED)
1. ProspReports
( COPY OF ANNUAL REPORT ATTACHED)
Re
2 . Reportss t to stockholders
3. 5 years independently audited financial
statement (ENCLOSED 1996 TO 2000 AUDITED RPORT)
4 . Most recent interim financial report (JUNE 30, 2001 REPORT)
5 . Dun & Bradstreet report N, 1
6 . Name and address -of project lender (FIFTH THIRD BANK)
7 _ Commitment Letter for financing
(including length of commitment) (COPY OF COMMITMENT LETTER) •
8. Name, address and contact of bond purchaser
9_ tstimated tax yield to City
10. Estimated increased payroll ($366,000-YEAR)
11 . Estimated assessed value of additional and total
real property (DATA NOT AVAILABLE)
12 . Number of years in business 49 YEARS
Is. any litigation pending by or against company?
•
Yes _ X No -
Type of Product OUTPATIENT MEDICAL REHABILITATION, EDUCATIONAL •
AND COMMUNITY SERVICES.
Description of ProductPHYSICAL THERAPY, OCCUPATIONAL THERAPY, SPEECH
• AND LANGUAGE THERAPY, AUDIQQ LOGY, PRESCHOOL, CHILD CARE, FOSTER CARE, RESPITE,
SPECIAL RECREATION, HOMEBOUND AND DEVELOPMENTAL THERAPY.
ELGIN, SOUTH ELGIN, HANOVER PARK, GENEVA, ST.
Market Area Served
CHARLES, BA1LETT, BURLINGTON, CARPENTERSVILLE, DUNDEE, GILBERT, HAMPSHIRE,
LILY LAKE, MAPLE PARK, PLATO CENTER, SLEEPY HOLLOW,STREAMWOOD, VIRGIL,
W SCO WAYNE.
C. Employment
1 . Number of Current Employees :
Full Time: 52
• Part Time: 1.1
Managers: — 11
Employees living in Elgin: 23
• 07/24/01 08:17 FAX 616 771 4317 FUNDS MANAGEMENT U 009
• JUL-23-01 MON 03:07 PM CITY OF ELGIN/CITY MGR. FAX NO, 18479315610 P. 09
2 . Number of new jobs created/retained (please specify)
a. Permanent Full Time: 15
b. Permanent Part Time:
c. Seasonal,/Temporary:
3, Type ,of new jobs created/retained
a. Clerical: 21 (TEACHERS, ASSISTANTS, RECEPTIONIST
• b. Labor: AND ADM. ASSISTANT)
c, Supervisory:
d. Managerial:
4 . Average Employee Salary (present) : $ 22,000
5 . Yearly Payroll (present) : .$1,920,000
6. ' Employee skills Required: YES '
D. Environmental
A. Plant
1. Location: 799 S. MCLEAN BLVD. _
ELGIN, IL. 60123
•
2 . Land Size: 7•51 ACRES
Square Feet: 327,135 SF •
3. Present Plant: 13,500
New Plant: 38,423 sq..ft.
4 . Land coverage: 218,235 SF.
a_ Pollution
1. Water/Sewer effluent X domestic
• industrial
unusual wastes
2. Air/foreign or toxic substances: CLEAN
3. Odors: NONE
07/24/01 08:18 FAX 616 771 4317 FUNDS MANAGEMENT Ono
JUL--23-01 NON 03:07 PM CITY OF ELGIN/CITY MGR. FAX NO. 18479315610 P. 10
• N'
•
4 . Glare: NONE
NONE
5 . Noise: -- _
6. Pollution devices required _ '
•
7 . -According to City Engineer, are there adequate
• number of Water and Sewer Connection to the
site?
X Yes No
E. Community Services
A. Traffic
1_ Number of Vehicles into Site per day:
Trucks: Cars: 80
Other Vehicles: 4 (BUSES)
2. Ability of Street to Carry Additional Land
a_ Access - sketch of ingress/egress patterns
b. Safety - planS to facilitate any
substantial traffic movement
B. Utility Requirements
1. Water used per day: _ 3.2
gallons
Fire Protection adequate? YES. SPRINKLERED.
•
Additional water or sewer =COMPLETED DURING i.e.OSTRUCTION.
pretreatment, extensions)
2 . Type of Sewage: LINE CONNECTED TO ELGI'T
3. A. Projected annual electrical usage:
502,560 KwE ANNUAL
B. Projected annual gas usage:
2,112 ANNUAL
therms
, •.07/24/01 08:18 FAX 816 771 4317 FUNDS MANAGEMENT 0011
. JUL-23-01 MON 03:07 PM CITY OF ELGIN/CITY MGR. FAX NO. 18479315610 P. 11
C . • Schools
Will' you project significantly increase school
enrollment?
NOT APPLICABLE •
CIVIC AWARENESS
1. Provide evidence of past civic ?Activity: PARTICIPATED IN THE 4TH
OF JULY PARADE. ATTENDED CITY COUNCIL MEETINGS. ENROLLED STAFF IN THE
ELGIN LEADERSHIP ACADEMY, YEARLY ROTARY MEMBERSHIP. •
2 . How will your company support local civic activities?
THE CENTER WILL CONTINUE TO SUPPORT THE 'ABOVE-MENTIONED ACTIVITIES
AND FUTURE ACTIVITIES.
All supportive financial documents and information required by
the City of Elgin must be supplied before application will be
considered by the City Council of the City of Elgin.
We agree to all the conditions as specified in applicable city • •
ordinances.
jr
Signed: /;/ ; Signed:
FL/1"--
,
Title: PRESI P T Title: VICE PRESIDENT OF FINANCE
Chief Corporate Officer Chief Financial Office'
•
Date: `�,LCJo1 _ -
r
PUBLIC FINANCE CONSULTANTS SINCE 1954
SPEER FINANCIAL, INC.
KEVIN W.McCANNA DAVID F.PHILLIPS LARRY P.BURGER DANIEL D.FORBES BARBARA L.CHEVALIER
PRESIDENT SR VICE PRESIDENT %'ICE PRESIDENT \'ICE PRESIDENT VICE.PRESIDENT
August 6, 2001
The Honorable Ed Schock and
Members of the City Council
City of Elgin
150 Dexter Court
Elgin, Illinois 60120
Dear Mayor and City Council:
Pursuant to the request of the City of Elgin (the"City"), Speer Financial, Inc. has reviewed the
industrial bond application, and supporting documentation, including audited financial
statements, of Easter Seals Jayne Shover Center(the"Center"). The Center is applying for City
approval of$2,065,000 industrial revenue bonds so that it may refinance its existing construction
loans and to finance improvements on its existing buildings. The purchaser/bond placement
agent is expected to be Fifth Third Bank. Bond counsel is expected to be Jones Day. Some
$1,064,000 of the proceeds will be used to refinance the Center's existing construction loans and
the remaining proceeds will be used for improvements to the Center's existing buildings. The
improvements to the existing buildings are expected to be completed by the end of 2002.
The Center is a non-profit,out patient rehabilitation and childcare center governed by a board of
volunteer directors. The Center was founded in 1952 and is currently located in the City. The
Center provides the following services: physical therapy; occupational therapy; speech and
language therapy; audiology; preschool; child care; foster care; respite; special recreation; and
homebound and developmental therapy. The Center serves the communities of Elgin, South
Elgin, Hanover Park,Geneva, St. Charles, Bartlett, Burlington, Carpentersville, Dundee, Gilbert,
Hampshire, Lily Lake, Maple Park, Plato Center, Sleepy Hollow, Streamwood, Virgil,Wasco and
Wayne.
The Center currently has 52 full time employees, 11 part time employees and 11 managers.
Currently 11 of the Center's employees live in the City. The Center expects to retain all of its
current employees and create 15 permanent full time and 6 part time positions consisting of
teachers,assistants, receptionists and administrative assistants. The total annual payroll is
approximately$1,920,000,with an annual average employee salary of$22,000.
The Center has previously participated in the City's 4th of July Parade, attended City Council
meetings, enrolled staff in the Elgin Leadership Academy and is a yearly Rotary member. The
Center will continue its support of the above-mentioned activities and plans to support future
activities.
Financial Analysis
As the accompanying tables indicate,the Center's financials have been stable over the past five
years. Total assets have increased on average by approximately 40%per year from $1,564,130 as
of August 31, 1996 to$6,026,820 as of August 31, 2000. Total liabilities have increased from
$417,643 as of August 31, 1996 to$1,997,454 as of August 31, 2000. The increase in total
liabilities is mainly due to accounts payable and notes payable. Unaudited financial statements as
SUITE 4100.ONE NORTH LASALLE STREET•CHICAGO.ILLINOIS 60602•(312)346-3700•FAX(312)346-8833
SUITE 500.531 COMMERCIAL STREET•WATERLOO.IOWA 5070I•(319)291-2077•FAX(319)291-6787
• w
SPEER FINANCIAL, INC.
of June 30, 2001 show that accounts payable have decreased to
averaged aotal net asset 76%
(equity) as a percent of total liabilities and net assets(equity) itsasrevenues ppr fees and grants
over the past five years. The Company derives the majority°
from government agencies, ranging from 63%in 1996 to 30%in 2000. Contributions and
program services are also major sources of revenues, ranging from 19%in 1996 to as high as
58%in 1999. Total expenses have averaged approximately$3,250,000 over the past five years.
The$2,065,000 of bonds are to be amortized over 20 years. The bonds will pay interest at a
floating rate. Annual debt service at an average rate of 6.0%is approximately
Deb t175,0000e coverage
. A
portion of the proceeds will refinance all of the Center's outstanding
debt.is approximately 1.62x based on an income before depreciation of$286,944 for the year ending
August 31, 2000. Debt service coverage could be as high as 8.26X based on an income before
depreciation of$1,466,162 for the year ending August 31, 1999. The bonds are expected to be
secured by a letter of credit issued by Fifth Third Bank.
Conclusion
In summary,we find the Center,based on its audited financial reviews,to be financially stable.
The IRB project will allow the Center to continue operations,enhance its business and create
approximately 21 new jobs. We find this a worthwhile project and recommend that the City
proceed with the inducement resolution. We would be pleased to discuss this with you.
Sincerely, )/lec
Kevin W. McCanna
President
KWM/wjk
Enclosure
, }
SPEER FINANCIAL, INC.
Easter Seals Jayne Shover Center
Balance Sheet
Audited as of August 31
1996 1997 1998 1999 2000
ASSETS:
Cash $ 12,329 $ 40,327 $ 15,492 $ - $ 23,294
Grants Receivable 305,363 375,478 406,728 335,665 397,571
Pledges Receivable 31,607 142,710 698,881 1,658,070 601,387
Accounts Receivable 116,870 323,648 225,399 333,455 328,922
Due From Partnership - 13,192 - - -
Prepaid Expenses 21,052 22,491 20,387 22,146 25,708
Investments:
Unrestricted 179,817 124,614 4,795 399 346
Deferred Compensation Plan 45,987 64,920 70,514 81,958 73,502
Annuity 81,352 85,177 88,761 88,655 94,672
Endowment Fund 45,469 48,316 45,157 47,148 49,632
Capital Campaign - 114,219 574,399 913,922 137,204
Cash Surrender Value of Director's
and Officer's Life Insurance 49,927 58,329 67,529 76,744 85,076
Child Care Start Up Costs - - - - 64,736
Land, Building and Equipment at Cost,
Less Accumulated Depreciation 674,357 667,852 676,203 1,027,266 4,144,770
Total Assets $1,564,130 $2,081,273 $2,894,245 $4,585,428 $6,026,820
LIABILITIES AND NET ASSETS:
Liabilities:
Unfunded Disbursements $ - $ - $ - $ 14,454 $ -
Accounts Payable 90,019 78,085 85,167 294,356 1,173,987
Notes Payable - - 40,000 110,000 500,000
Accrued Salaries, Vacation and Payroll Taxes 73,505 93,091 87,105 89,151 103,963
Accrued Pension and 401(k) Expense 145,980 191,810 136,282 123,131 111,199
Accrued Expenses-Other 1,886 4,926 - - -
Due to Partnership 4,411 - - - -
Deferred Income 20,807 96,109 - - -
Deferred Compensation Plan 45,987 64,920 70,514 81,958 73,502
Annuities Payable 27,786 39,943 38,121 36,446 34,803
Equity in Partnership 7,262 61,396 - - -
Total Liabilities $ 417,643 $ 630,280 $ 457,189 $ 749,496 $1,997,454
Net Assets:
Unrestricted:
Designated for Endowment $ 32,917 $ 40,021 $ 46,930 $ 53,972 $ 53,972
Designated for Property and Equipment 112,000 60,642 19,003 - -
Undesignated 690,425 891,111 823,596 1,030,328 3,648,101
Temporarily Restricted 273,625 421,699 1,510,007 2,714,112 289,773
Permanently Restricted 37,520 37,520 37,520 37,520 37,520
Total Net Assets $1,146,487 $1,450,993 $2,437,056 $3,835,932 $4,029,366
Total Liabilities and Net Assets $1,564,130 $2,081,273 $2,894,245 $4,585,428 $6,026,820
4 ,
SPEER FINANCIAL, INC.
Easter Seals Jayne Shover Center
Revenues and Expenditures
Audited Fiscal Year Ending August 31
1996 1997 1998 1999 2000
REVENUES:
Contributions $ 77,625 $ 212,840 $1,177,800 $1,638,421 $ 547,226
Bequests 146,801 57,890 43,223 28,588 54,011
Special Events Income 204,760 168,614 205,032 217,655 233,375
Elgin Township - 66,667 - - -
United Way 159,528 161,379 146,683 149,503 136,928
Contributions and Grants from
Other Organizations 545 10,000 - 44,000 17,320
In-Kind Contributions 11,571 20,001 27,746 5,436 977
Fees and Grants From
Govemmental Agencies 2,079,537 2,276,226 2,055,072 1,357,933 1,021,004
Program Services 547,774 719,304 585,995 988,570 1,337,659
Partnership Billings 31,944 31,944 10,648
Increase in Cash Surrender Value
of Life Insurance 7,743 8,402 9,200 9,215 8,332
Gain on Investments in Partnership 1,531 3,916 61,396 - -
Investment Income 6,101 22,446 23,772 41,535 14,250
Miscellaneous Revenue 4,810 10,337 1,180 26,487 9,555
Total Revenues $3,280,270 $3,769,966 $4,347,747 $4,507,343 $3,380,637
EXPENSES:
Physical Restoration/Development Treatment $ 385,874 $ 317,142 $ 349,865 $ 305,748 $ 198,796
Infant Intervention 664,217 746,752 793,488 970,660 1,179,808
Autistic Preschool 180,639 227,976 200,311 176,882 212,383
Specialized Home Placement(Foster Care)DMHDD 135,815 108,301 138,052 126,042 150,111
Specialized Home Placement(Foster Care) DCFS 1,062,488 1,192,408 926,257 635,696 502,029
Respite Service 116,971 164,086 174,827 163,009 169,560
Family Support Service-Title XX 148,806 140,376 151,211 128,734 154,119
Therapeutic Recreation 59,309 68,526 77,741 72,813 62,690
Supported Living Arrangement 10,499 7,435 8,655 7,848 14,656
Home Bound Services 8,991 8,522 11,818 7,095 11,019
Transportation - - - - 49,722
Community Education 65,507 64,387 77,019 80,118 77,249
Management and General 92,452 117,823 120,711 164,404 208,688
Public Relations and Fund-Raising 160,958 254,156 216,675 215,471 156,018
State Affiliation Dues 46,548 47,570 51,683 53,947 40,355
Total Expenses $3,139,074 $3,465,460 $3,298,313 $3,108,467 $3,187,203
Change in Net Assets $ 141,196 $ 304,506 $1,049,434 $1,398,876 $ 193,434
Net Assets, Beginning of Year $1,005,291 $1,146,487 $1,387,622 (1) $2,437,056 $3,835,932
Net Assets, End of Year $1,146,487 $1,450,993 $2,437,056 $3,835,932 $4,029,366
Note: (1) As restated.
A s'
Easter Seals Jayne Shover Center
Elgin,Illinois
$2,065,000 Industrial Revenue Bonds
DEBT SERVICE SCHEDULE
Date Principal Coupon Interest Total P+I
9/01/200Z 60,000.00 6.000% 113,575.00 173,579.00
9/01/2003 55,000.00 6.000% 120,300.00 175,300.00
9/01/Z004 60,000.00 6.000% 117,000.00 177,000.00
9/01/2005 60,000.00 6.000% 113,400.00 173,400.00
9/01/2006 65,000.00 6.000% 109,800.00 174,800.00
9/01/Z007 70,000.00 6.000% 105,900.00 175,900.00
9/01/2008 75,000.00 6.000% 101,700.00 176,700.00
9/01/Z009 75,000.00 6.000% 97,200.00 172,200.00
9/01/2010 50,000.00 6.000% 92,700.00 172,700.00
9/01/2011 85,000.00 6.000% 87,900.00 172,900.00
9/01/2012 90,000.00 6.000% 32,800.00 172,800.00
9/01/2013 100,000.00 6.000% 77,400.00 177,400.00
9/01/2014 103,000.00 6.000% 71,400.00 176,400.00
9/01/2015 110,000.00 6.000% 65,100.00 175,100.00
9/01/2016 115,000.00 6.000% 55,500.00 173,500.00
9/01/Z017 125,000.00 6.000% 51,600.00 176,600.00
9/01/Z018 130,000.00 6.000% 44,100.00 174,100.00
9/01/Z019 140,000.00 6.000% 36,300.00 176,300.00
9/01/2020 145,000.00 6.000% Z7,900.00 172,900.00
9/01/Z021 155,000.00 6.000% 19,200.00 174,200.00
9/01/Z0Z2 165,000.00 6.000% 9,900.00 174,900.00
Total 2,065,000.00 - 1,603,675.00 3,668,675.00
YIELD STATISTICS
Bond Year Dollars S26,727.92.
Average life. 12.943 Years
Average Coupon. 6.0000000%
Net Interest Cost(NIC) 6.0000000%
True Interest Cost(TIC) 6.0007169%
Bond Yield for Arbitrage Purposes 6.0007169%
All Inclusive Cost(AIC) 6.0007169%
IRS FORM 8038
Net Interest Cost. 6.0000000%
Weighted Average Maturity 12.943 Years
Speerrinancial,Inc. file=Bill sf-Easter Seals-SINGLE PURPOSE
Public f}'nance Consultants Since 1954