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HomeMy WebLinkAbout95-113 Resolution No. 95-113 RESOLUTION AUTHORIZING REQUEST TO GOVERNOR OF THE STATE OF ILLINOIS FOR ALLOCATION FOR PRIVATE ACTIVITY BOND (Gibson Strings and Accessory) BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Raymond H. Moller, Director of Business Services and Property, be and is hereby authorized and directed to submit a request to the Governor of the State of Illinois for allocation of $2 . 3 million for Economic Development Revenue Bond (Gibson Strings and Accessory, a Division of Gibson Guitar) Series 1995 . s/ Kevin Kelly Kevin Kelly, Mayor Presented: May 24 , 1995 Adopted: May 24 , 1995 Vote: Yeas 6 Nays 0 Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk Elm Agenda Item No . May 17 , 1995 TO: Mayor and Members of the City Council FROM: Richard B. Helwig, City Manager SUBJECT: Request Governor of the State of Illinois for Allocation for Private Activity Bonds . PURPOSE The purpose of this memorandum is to seek City Council author- ization to submit two requests to the Governor of the State of Illinois for allocation for Private Activity Bond Series 1995 for Grease Guard, Inc . ( $1 . 5 million) and Gibson String & Accessory, a division of Gibson Guitar ( $2 . 3 million) . BACKGROUND Under the Tax Reform Act of 1986 , each home rule city is allocated an amount equal to $50 multiplied by its population and each home rule county is allocated an amount equal to $50 multiplied by the population of its unincorporated area . The total amount for all home rule units has been determined to be $329 , 360 , 900 . The population of a home rule unit in a particular year is determined on the basis of the most recent Bureau of the Census estimate published before the beginning of that calen- dar year. In the period from January 1 , 1995 through June 1 , 1995 home rule units are not required to apply to the State for an allocation under the Law. Rather, home rule units must deter- mine and monitor their own private activity bond limits as provided in the Tax Reform Act of 1986 . Within ten calendar days after May 1, 1995 , all Home Rule units with less than 2 , 000, 000 inhabitants must report to the Governor' s Office in writing on volume cap allocated and issued. Of the total amount available to each home rule unit of gov- ernment with less than 2 , 000 , 000 inhabitants, the amount that has not been granted or reallocated for specific projects or Mayor and Members of City Council May 17 , 1995 Page 2 purposes as of May 1 , 1995 shall be reserved to the Gover- nor' s Office on June 1, 1995 . From the period of June 1 through July 14 , 1995, one-half of this reserved amount will be available to all home rule units with less than 2,000, 000 inhabitants, as further described in Section B-8 . (The re- maining half is available for reallocation to the State or State agencies . ) If a determination is made that there is sufficient amount of allocation remaining in the reserved allocation, an alloca- tion approval letter will be sent to the applicant. There is no specific dollar limit set by the state for any single home rule unit ' s request on or after June 1 , 1995 or on or after July 15 , 1995 . Requests will be accepted only on or after 8 : 30 a .m. June 1, 1995 or on or after the first State business day after July 15, 1995 (July 17 , 1995) . Allocation requests are processed in the order that they are received up to the maximum limit available. If more than one request is received in a day, completed requests will be logged in by time received, and processed on a first-come, first-granted basis . If more than one request is presented at 8 : 30 a.m. on the first day requests are received, all those requests will be deemed equally first in line and the Governor' s Office shall grant cap as it may determine. Re- quests will be processed only for allocation to be used di- rectly by the requesting home-rule unit. Joint requests from more than one unit or requests from one unit for allocation which will also be used by other units of government will not be considered. Once an allocation is given to a specific unit, the Governor' s Office will not object if units pool their allocations and join together in a bond issue ad ad- vised by legal counsel . To receive an allocation, a home rule unit must submit an allocation request letter together with the inducement resolu- tion or other similar official action to the Governor' s of- fice. This request letter should be received by the Gover- nor' s Office at least two weeks prior to the anticipated date of issuance of the bonds . The allocation approval letter to home rule units of govern- ment is valid for a period of 60 calendar days from the date of the letter or through December 27 , 1995, whichever date issuer' s allocation has comes first. If an expired, it may apply for a new alloca tion if allocat ion is still available. Such application will be processed by the Governor's Office any new application. as other in the same manner The City of Elgin has dedicated its $3.8 million in Industri- al Revenue Bond ( IRB) allocation for 1995 to Elgin Corrugated Box, Inc. Two additional requests for IRB funding have been received by the City: ( 1) Grease Guard, Inc. and ( 2) Gibson String & Accessory, a division of Gibson Guitar. Mayor and Members of City Council May 17 , 1995 Page 3 If the City does not reserve additional IRB allocation from the Office of the Governor, 1996 IRB capacity will be author- ized for the above-mentioned projects . COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED None . FINANCIAL IMPACT None . LEGAL IMPACT None . RECOMMENDATION It is recommended that Staff be authorized to submit two requests to the Office of the Governor for additional 1995 IRB capacity. Respectfully submitted, 1 t Raymond H. Moller Director of Business Services and Properties : '\. Richard B. Helwig City Manager RHM/sg F TELEPHONE 708/631-6100 FAX 708/931-5610 FOR HEARING IMPAIRED TDD 708/931-5616 CITY OF ELGIN 150 DEXTER COURT ELGIN, ILLINOIS 60120-5555 ALLOCATION REQUEST LETTER May 16 , 1995 Office of the Governor 2 1/2 Statehouse Springfield, IL 62706 ATTENTION: Tonya Dring RE: Issuer: City of Elgin Type: Home Rule Maximum Principal Amount: $2 . 3 million Bond Description: Economic Development Revenue Bond (Gibson Strings and Accessory, a division of Gibson Guitar) , Series 1995 Purpose: Proceeds will be used to purchase land to construct a new 40, 000 square foot building, purchase equipment and pay legal and financing costs . Dear Ms . Dring: In accordance with the Tax Reform Act of 1986 as passed by the 99th Congress 2nd Session ( 1986) as amended and 30 ILCS 345, the City of Elgin respectfully requests an allocation for the above-captioned private activity bonds . In preparation for this bond issue to date, all applicable federal and state requirements have been complied with. A copy of the induce- ment resolution for this issue has been attached herewith. I hereby certify under penalty of perjury that to the best of my knowledge the issuance of the Private Activity Bond will not be made in consideration of any bribe, gift, gratuity or direct or indirect contribution to any political campaign. Please forward the allocation approval letter to the under- signed. Sincerely, City of Elgin Raymond H. Moller Director of Business Services and Properties RHM/sg r Resolution No. 95-115 RESOLUTION AUTHORIZING REQUEST TO GOVERNOR OF THE STATE OF ILLINOIS FOR ALLOCATION FOR PRIVATE ACTIVITY BOND (Gibson Strings and Accessory) BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Raymond H. Moller, Director of Business Services and Property, be and is hereby authorized and directed to submit a request to the Governor of the State of Illinois for allocation of $2 . 3 million for Economic Development Revenue Bond (Gibson Strings and Accessory, a Division of Gibson Guitar) Series 1995 . Kevin Kelly, Mayor Presented: May 24 , 1995 Adopted: Vote: Yeas Nays Recorded: Attest: Dolonna Mecum, City Clerk Resolution No. 95-115 RESOLUTION EXPRESSING THE INTENTION OF THE CITY OF ELGIN, ILLINOIS, TO ASSIST IN FINANCING THE ACQUISITION, CONSTRUCTION, RENOVATION, EXTENSION AND EQUIPPING OF AN ECONOMIC DEVELOPMENT PROJECT TO BE USED BY GIBSON GUITAR CORP. , A DELAWARE CORPORATION, AND APPROVING THE EXECUTION OF A MEMORANDUM OF AGREEMENT RELATING TO THE PROJECT WHEREAS, the City of Elgin, Illinois (the "City" ) is a duly organized and existing municipal corporation and home rule unit of government within the meaning of Section 6 of Article VII of the 1970 Constitution of the State of Illinois ( the "State" ) ; and WHEREAS, the City is authorized to issue its revenue bonds to finance in whole or in part the cost of the acquisition, construction, renovation, extension and equipping of economic development projects ; and WHEREAS , Gibson Guitar, Corp. , a Delaware corporation (the "Borrower" ) , wishes to secure financing for the acquisition, construction, renovation, extension and equipping of an economic development project to consist of the acquisition of land located in the Fox Bluff Corporate Center, Elgin, Illinois, the construction thereon of a building approximately 70 , 000 square feet in size and the purchase machinery and equipment, such land, building, machinery and equipment to be used by the Borrower in its business of manufacturing guitar strings , parts and accessories (the "Project" ) ; and WHEREAS, the Borrower has requested that the City issue its revenue bonds to provide funds for the acquisition, construction, renovation, extension and equipping of the Project; and WHEREAS, this City Council considers it necessary and desirable to finance the Project in order (a) to provide increased employment opportunities and relieve conditions of unemployment and underemployment within the City, (b) to encourage the increase of industry and commerce within the City, and (c ) to increase the tax base within the City, and thus to enhance the public health, safety and general welfare of the City and its inhabitants ; and WHEREAS, the Borrower, in reliance upon the intention of the City to finance the cost of constructing, acquiring, renovating, extending and equipping the Project through the issuance of its revenue bonds , has determined to locate the Project within the corporate limits of the City; and WHEREAS, such revenue bonds , when issued in one or more issues or series , shall not be a charge against the general revenues or the taxing powers of the City but shall be payable solely from the proceeds of the revenue bonds issued to financing the Project and the earnings on such proceeds and revenue derived from the Project and the financing of the Project; and WHEREAS, a form of Memorandum of Agreement with respect to the proposed issuance of such revenue bonds for the Project has been presented to this meeting of this City Council ; and WHEREAS, it is intended that this resolution shall constitute an official action toward the issuance of the revenue bonds within the meaning of Section 1 . 103-8 (a) ( 5 ) of the Income Tax Regulations (the "Regulations" ) issued pursuant to the Internal Revenue Code of 1986 as amended ( the "Code" ) and that the bonds issued for the benefit of the Borrower shall be reimbursement bonds for the purpose of Section 1 . 150-2 of the Regulations . NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS : 1 . That this City Council finds that (a) the lack of employment opportunities within the City is harmful to the public health, safety, and general welfare of the City and its inhabitants and (b) assisting the Borrower through the issuance of revenue bonds of the City, the proceeds of which will be loaned to the Borrower or its nominee and used to finance all or a portion of the cost of the Project, will provide increased employment opportunities and relieve conditions of unemployment and underemployment within the City, will encourage the increase of industry and commerce within the City and will increase the tax base within the City. 2 . That the Mayor of the City is authorized to execute and the City Clerk is authorized to attest and to affix the seal of the City to a Memorandum of Agreement with the Borrower in substantially the form as was presented to this meeting or with such changes in it as shall be approved by the officers executing the same, their approval to be evidenced by their execution of the Memorandum of Agreement . 3 . That upon final determination of the details of the financing, and subject to the terms and conditions of the Memorandum of Agreement and to the availability to the City of sufficient private activity bond volume cap to permit the bonds to be issued, the City will take all further steps necessary to issue its revenue bonds on behalf of the Borrower or its nominee to finance all or a portion of the Project in an amount now estimated at $2, 300, 000 ; provided, that on or before June 1 , 1996 (or such other date as shall be mutually satisfactory to the City and the Borrower) , the City and the Borrower shall have agreed to mutually acceptable terms for said revenue bonds and the contracts , agreements and proceedings related to the bonds and referred to in the Memorandum of Agreement . 4 . That said revenue bonds be reimbursement bonds for the purpose of Section 1 . 150-2 of the Regulations and that the proceeds of the bonds be used, in whole or in part, to reimburse expenditures made prior to the issuance of the bonds . 5 . That pursuant to the provisions of Section 147 ( f ) of the Code, the City Council (as the "applicable elected representative" of the City) approves the issuance of such revenue bonds in the maximum aggregate principal amount of $2 , 300 , 000 and the plan of financing of the Project for the purpose of financing the costs of acquiring, constructing, renovating, extending and equipping the Project . 6 . That the officers and employees of the City are authorized to take such further action as is necessary to carry out the intention and purpose of this resolution and of the Memorandum of Agreement as executed and, subject to the terms and conditions of this resolution and of the Memorandum of Agreement, to cause revenue bonds of the City to be issued to finance the Project, now estimated to cost approximately $2 , 300 , 000, upon the terms and conditions stated in the Memorandum of Agreement with respect to the economic development project described in the Memorandum of Agreement, which Memorandum of Agreement is made a part of this resolution. 7 . That all resolutions and parts thereof in conflict with this resolution are hereby superseded to the extent of such conflict, and this resolution shall be in full force and effect from and after its passage as provided by law. Kevin Kelly, Mayor Presented: May 24 , 1995 Adopted: Vote: Yeas Nays Recorded: Attest : Dolonna Mecum, City Clerk Resolution No. 95-114 RESOLUTION AUTHORIZING THE EXECUTION OF A MEMORANDUM OF AGREEMENT (GREASE GUARD, INC . PROJECT) WHEREAS, Grease Guard, Inc . (the "Borrower" ) wishes to finance the acquisition of land and construction of an approximately 20, 000 square foot building located near the intersection of Route 31 and Interstate 90 in Elgin, Illinois (the "Project" ) and wishes to have the City of Elgin, Illinois (the "Issuer" ) issue its industrial revenue bonds to finance the acquisition and construction of such facilities ; and WHEREAS, a Memorandum of 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 industrial revenue bonds to finance the acquisition and construction of such facilities . NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS : Section 1 . That the Mayor of the Issuer is hereby authorized to execute, and the Clerk of the Issuer is hereby authorized to attest a Memorandum of Agreement with the Borrower in substantially the form of such agreement appended to this resolution as Exhibit A. Section 2 . That 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 Memorandum of Agreement as executed and to issue not to exceed $1 , 500 , 000 of its industrial revenue bonds upon the terms and conditions stated in such Memorandum of Agreement for the purpose of defraying the cost of acquiring the Project and that the same is declared to be for public purpose . Section 3 . That this resolution shall be in full force and effect upon its passage and approval . Kevin Kelly, Mayor Presented: May 24 , 1995 Adopted : Vote: Yeas Nays Recorded: Attest : Dolonna Mecum, City Clerk TELEPHONE 708/931-6100 11!ilhl FAX 708/931-5610 FOR HEARING IMPAIRED TDD 708/931.5616 CITY OF ELGIN 150 DEXTER COURT ELGIN, ILLINOIS 60120-5555 ALLOCATION REQUEST LETTER May 16 , 1995 Office of the Governor 2 1/2 Statehouse Springfield, IL 62706 ATTENTION: Tonya Dring RE: Issuer: City of Elgin Type: Home Rule Maximum Principal Amount : $1 . 5 million Bond Description: Economic Development Revenue Bond (Grease Guard, Inc . ) , Series 1995 Purpose: Proceeds will be used to purchase land to construct a new 20, 000 square foot building, purchase equipment and pay legal and financing costs . Dear Ms . Dring: In accordance with the Tax Reform Act of 1986 as passed by the 99th Congress 2nd Session ( 1986) as amended and 30 ILCS 345 , the City of Elgin respectfully requests an allocation for the above-captioned private activity bonds . In preparation for this bond issue to date, all applicable federal and state requirements have been complied with. A copy of the induce- ment resolution for this issue has been attached herewith. I hereby certify under penalty of perjury that to the best of my knowledge the issuance of the Private Activity Bond will not be made in consideration of any bribe, gift, gratuity or direct or indirect contribution to any political campaign. Please forward the allocation approval letter to the under- signed. Sincerely, City of Elgin Raymond H. Moller Director of Business Services and Properties RHM/sg