HomeMy WebLinkAbout92-1216 RESOLUTION
ACCEPTING PROPOSAL OF CHAPMAN AND CUTLER
TO CALCULATE AND REPORT ARBITRAGE EARNINGS ON
PROCEEDS OF 1991 GENERAL OBLIGATION BOND ISSUE
BE IT RESOLVED THAT THE PROPOSAL OF CHAPMAN AND CUTLER to
perform arbitrage rebate calculation services with respect to
$11, 560, 000 General Obligation Corporate Purpose Bonds, Series
1991 , a copy of which is attached hereto as Exhibit A is
hereby accepted.
BE IT FURTHER RESOLVED that Larry L. Rice, City Manager,
is hereby authorized and directed to execute written
acceptance of said proposal on behalf of the City of Elgin.
sl George VanDeVoorde
George VanDeVoorde, Mayor
Presented: December 16 , 1992
Adopted: December 16 , 1992
Vote: Yeas 7 Nays 0
Recorded:
Attest :
_s/ Dolonna Mecum
Dolonna Mecum, City Clerk
Law Offices of
CHAPMAN AND CUTLER
Theodore S.Chapman 111 West Monroe Street, Chicago, Illinois 60603-4080 2 North Central Avenue
1877-1943 TWX 910-221-2103 Telex 206281 Phoenix,Arizona 85004
Henry E. Cutler FAX(312)701-2361 (602)256 4060
1879-1959
Telephone(312)845-3000
50 South Main Street
Salt Lake City,Utah 84144
(801)533-W66
November 24, 1992
City of Elgin
150 Dexter Court
Elgin, IL 60120-5555
Re: $11,560,000 City of Elgin, Kane and Cook Counties,
Illinois General Obligation Corporate Purpose Bonds,
Series 1991
Dear Sir/Madam:
Pursuant to the terms of this letter agreement it is agreed that Chapman and Cutler
will provide rebate calculation services as described herein in connection with the
$11,560,000 General Obligation Corporate Purpose Bonds, Series 1991 (the `Bonds") issued
by the City of Elgin, Kane and Cook Counties, Illinois (the "Issuer") on July 18, 1991.
SCOPE OF SERVICES
We will provide on an annual basis a calculation of the amount, if any, subject to
rebate under §148(f) of the Internal Revenue Code of 1986 (the "Code"). We will also
provide to you an opinion of Chapman and Cutler that such calculations have been
performed in accordance with §148(f) of the Code and the regulations promulgated
thereunder. Such calculations and opinion will be based on information to be supplied to us
by the Issuer. As required by §148(f) of the Code, the calculations will determine the excess
of the amount earned on all non-purpose investments, over the amount which would have
been earned if such non-purpose investments were invested at a rate equal to the yield on the
Bonds (the "Excess") plus any income attributable to the Excess.
The initial calculations hereunder will be provided on the later of the first anniversary
of the issuance of the Bonds or 30 days from the date on which we receive all of the data
from the Issuer necessary to make such calculations. We will provide subsequent annual
calculations to you within thirty days of the date on which we receive the related data.
You should be aware that our services under this agreement will not include an
opinion as to the tax-exempt status of the Bonds or as to compliance with the terms of the
covenants and documents under which the Bonds were issued. The rebate calculation
services described here involve only the calculation of the rebate amount described above, in
accordance with applicable law, based solely on the information supplied to us. Should you
desire that we make a review of the Bond documents or otherwise provide advice or
79307.01.01
LtrAgree/MAB
Law Offices of
CHAPMAN AND CUTLER
interpretation with respect to the Bond issue we would be willing to do so on an hourly
charge basis. Chapman and Cutler's calculation and opinion services under this agreement
are provided solely to the party or parties hereto; the owners of the Bonds are not third
party beneficiaries of such services and neither they nor other third parties may rely on such
services. The software and all other products and materials, other than the data supplied by
the Issuer, shall remain the exclusive property of Chapman and Cutler.
FEES
It is agreed that for providing the calculation services under this agreement you shall
pay Chapman and Cutler an annual calculation fee of$3,000. The calculation fee will be due
upon receipt of the rebate report and opinion letter.
TERMINATION
You may terminate our services at any time for cause by providing to us written
notice 30 days in advance of such termination. You may not terminate our services without
cause prior to the date on which we provide the calculations required in connection with the
initial anniversary of the issuance of the Bonds; thereafter you may terminate our services
without cause at any time upon 120 days' written notice to us.
We may not resign our duties to perform calculation services prior to providing the
calculations required in connection with the initial anniversary of the issuance of the Bonds;
thereafter we may resign upon 120 days' written notice to the Issuer.
Sincerely,
CHAPMAN AND CUTLER
By
Michael A. Baker, Manager
Arbitrage Rebate Services
Accepted by: City of Elgin
El ois
Aut Officer
-2-
ADD ON
in Borm
Agenda Item No ENDAS
December 10, 1992
TO: Mayor and City Council
FROM: City Manager
SUBJECT: Arbitrage Reporting for 1991 G.O. Bond Issue
PURPOSE: To consider the proposal from Chapman and Cutler,
Bond Council, to calculate and report arbitrage earnings on the
1991 General Obligation bond issue.
BACKGROUND: In 1991, the City had one G.O. Bond issue totaling
$11,560,000. When tax exempt debt of any type incurred by the
City exceeds $5 million, arbitrage calculations must be made
with ultimate payment of any excess to the federal government.
These calculations should be made annually until all bonds
mature. Last year the City Council approved Chapman and Cutler
for the 1990 bond issue.
To safeguard the City against future penalties, a qualified
consultant should be used to make and report these earnings.
Chapman and Cutler maintains a program that is continually
updated as to federal law.
FISCAL IMPACT: The annual cost of Chapman and Cutler is
$3,000 per issue, as budgeted in the Finance Department.
RECOMMENDATION: The staff recommends approval of the Chapman
and Cutler proposal at the regular Council Meeting.
Larr ice, Ciky Manager
l