HomeMy WebLinkAbout98-98 'Ilk'
Resolution No. 98-98
RESOLUTION
OF INTENTION TO ISSUE INDUSTRIAL DEVELOPMENT REVENUE BONDS
OF THE CITY OF ELGIN, ILLINOIS, TO FINANCE THE ACQUISITION
OF MANUFACTURING EQUIPMENT AND OTHER CAPITAL PROJECTS FOR
AMAX PLATING, INC. , AN ILLINOIS CORPORATION
WHEREAS, AMAX Plating, Inc. , an Illinois corporation (the
"Company" ) has proposed either individually or through an
affiliate to finance the acquisition of manufacturing equipment
and other capital projects (the "Project" ) , and proposes that
the City of Elgin, Illinois (the "Issuer" ) issue its industrial
development revenue bonds for the benefit of the Company or an
affiliate thereof in an aggregate principal amount not to
exceed $1, 000,000 (the "Bonds" ) to provide financing for the
Project; and
WHEREAS, the Issuer has caused to be prepared a Memorandum
of Agreement under the terms of which the Issuer agrees,
subject to the provisions of such Memorandum of Agreement, to
begin the proceedings necessary to issue its revenue bonds to
provide financing of the Project.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF ELGIN, ILLINOIS :
1 . That the Mayor of the Issuer is hereby authorized to
execute a Memorandum of Agreement with the Company in
substantially the form presented to this meeting, or with such
changes therein as shall be approved by the Mayor upon
execution of the same.
2 . That the officials, officers and employees of the
Issuer are hereby authorized to take such further action as is
necessary to carry out the intent and purpose of this
Resolution ( including, but not limited to, publishing notice of
any public hearing necessary to permit the Issuer to issue the
Bonds for the Project) and to cause not more than $1,000,000 of
the Bonds to be issued upon the terms and conditions stated in
such Memorandum of Agreement, which Memorandum of Agreement is
hereby made a part of this Resolution.
3 . That it is the intention of the Issuer that this
Resolution constitute an "official intent" to issue the Bonds
within the meaning of Section 1 . 150-2 of the Income Tax
Regulations prescribed by the United States Treasury
Department .
4 . That this Resolution shall be in full force and
effect immediately upon its adoption and approval .
s/ Kevin Kelly
Kevin Kelly, Mayor
111V -
Presented: April 22 , 1998
Adopted: April 22 , 1998
Vote: Yeas 6 Nays 0
Attest:
s Dolonna Mecum
Dolonna Mecum, City Clerk
4
MEMORANDUM OF AGREEMENT
THIS MEMORANDUM OF AGREEMENT is between the City of Elgin, Illinois (the
"Issuer") and AMAX Plating, Inc., an Illinois corporation (the "Company").
1. Preliminary Statement. Among the matters of mutual inducement which have
resulted in this Agreement are the following:
(a) The Issuer is a home rule unit under the Illinois Constitution of 1970, and
as such is authorized and empowered to issue industrial development revenue bonds for
the purpose of financing costs of the acquisition, purchase, construction, rehabilitation,
redevelopment or extension of public, commercial and industrial projects in order to
encourage and promote the retention and expansion of existing public, commercial and
industrial businesses within the Issuer and the attraction of new facilities to the Issuer.
(b) The Company wishes either individually or through an affiliate to acquire
manufacturing equipment and engage in other capital projects (the "Project"), to be
located at 970 East Chicago Street, in the City of Elgin, Illinois, and has proposed that the
Issuer issue its industrial development revenue bonds in an amount not to exceed
$1,000,000 (the "Bonds") to finance all or a portion of the costs of the Project.
(c) The Bonds shall be limited obligations of the Issuer payable solely out of
the revenues and receipts derived from the trust estate established under a loan agreement,
an indenture of trust, a bond purchase agreement or any similar document pursuant to
which the Bonds are to be issued; the Project shall be financed by means of a loan of the
proceeds of the Bonds to the Company or an affiliate thereof', and the Company or an
affiliate thereof shall agree to make payments in an amount sufficient to pay the principal
and purchase price of, and premium, if any, and interest on, 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 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 begin the proceedings necessary to authorize the issuance and
sale of the Bonds in an amount not to exceed $1,000,000.
(b) That if satisfactory purchase arrangements for the Bonds can be made by
the Company, the Issuer will adopt such proceedings authorizing the execution of such
documents as maybe necessaryor advisable for the authorization,
issuance and sale of the
Bonds and the financing of the Project, all as shall be authorized by law and on terms
mutually satisfactory to the Issuer and the Company.
(c) That, if the Issuer issues and sells the Bonds, the financing instruments will
provide that the Issuer will use the proceeds of the Bonds to finance the Project and the
aggregate payments (i.e., the amounts to be paid by the Company and used by the Issuer to
pay the principal of, interest and redemption premium, if any, on the Bonds)payable
under the instruments whereby the Project shall be financed, shall be such sums as shall
be sufficient to pay the principal of, interest and redemption premium, if any, on the
Bonds as and when the same shall become due and payable.
(d) That it will take or cause to be taken such other acts and adopt such further
proceedings as may be required to implement the aforesaid undertakings or as it may
deem appropriate in pursuance thereof.
3. Undertakings on the Part of the Company. Subject to the conditions above stated,
the Company agrees as follows:
(a) That it will use all reasonable efforts to find one or more purchasers for the
Bonds prior to the issuance and sale thereof by the Issuer.
(b) That contemporaneously with the delivery of the Bonds the Company or an
affiliate thereof will enter into a loan agreement with the Issuer, under the terms of which
the Company or an affiliate thereof will obligate itself to pay sums sufficient in the
aggregate to pay the principal and purchase price of, and premium, if any, and interest on,
the Bonds as and when the same shall become due and payable. The Company or an
affiliate thereof will also agree in such agreement to pay all reasonable fees and expenses
incurred in connection with the Bonds.
(c) That during the period beginning on the date of the sale and delivery of the
Bonds by the Issuer to the purchasers thereof and ending three years thereafter,the
Company (i) will furnish upon request of the Issuer, certain information relating to the
Project, including but not limited to, the numbers and types of jobs and employment
opportunities which have been created or maintained within the Issuer as a result of the
Project, and (ii) will permit any duly authorized agent of the Issuer to enter upon and
inspect the Project during regular business hours upon reasonable notice, and to examine
and copy at the principal office of the Company during regular business hours all books,
records and other documents of the Company relating to expenditures from the Bond
proceeds for the Project and the numbers and types of jobs at the Project.
(d) That it will take such further action and adopt such further proceedings as
may be required to implement its aforesaid undertakings or as it may deem appropriate in
pursuance thereof.
2
4. General Provisions.
(a) All commitments under paragraphs 2 and 3 hereof are subject to the condition
that on or before two years from the date hereof(or such other date as shall be mutually
satisfactory to the Issuer and the Company), the Issuer and the Company or an affiliate
thereof shall have agreed to mutually acceptable terms and conditions of the loan
agreement referred to in paragraph 3, and of the Bonds and other instruments or
proceedings relating to the Bonds.
(b) If the events set forth in(a) of this paragraph do not take place within the
time set forth therefor or any extension thereof, and the Bonds in an amount of
approximately the amount stated above are not issued and sold within such time, the
Company agrees that it will reimburse the Issuer for all reasonable out-of-pocket expenses
which the Issuer may have incurred at the Company's request arising from the execution
of this Agreement and the performance by the Issuer of this 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 day of April, 1998.
CITY OF ELGIN, ILLINOIS
By: "/il
Mayor
ATTEST:
$0414-. 1C 41-12CA41---
City Clerk
AMAX PLATING, INC.
By: Li q Gf/C--
President
3
• " sK. °F EEC'
L.'" � City of Elgin Agenda Item No.
III,
ti
-*wok'
April 15, 1998
TO: Mayor and Members of the City Council
FROM: Joyce A. Parker, City Manager
SUBJECT: Inducement Resolution with Amax Plating, Inc .
for a Portion of the City' s 1998 Annual
Industrial Revenue Bond Authority
PURPOSE
The purpose of this memorandum is to present to the Mayor and
members of the City Council a request from Amax Plating, Inc .
for $1 million of 1998 Industrial Revenue Bond (IRB) authori-
ty.
BACKGROUND
The City has received a request regarding the availability of
IRBs for business expansion. Amax Plating, Inc . has presented
a request for $1 million. Earlier this year, the Mayor and
members of the City Council authorized $3 . 3 million of the
City' s $4 . 3 million IRB capacity for Starro Precision
Products, Inc .
Amax Plating, Inc . will utilize the bond funds to purchase and
install new plating equipment . Amax Plating is in the busi-
ness of reel-to-reel plating of precious and non-precious
metals . The components produced are used in all interconnec-
tion applications . Examples include connectors for computers,
cellular phones and pagers . Amax currently employs 94 indi-
viduals at its Elgin facility, 65 of the employees live in
Elgin. One new full-time laborer position will be created as
a result of the purchase and installation of the new plating
equipment . The average employee salary at Amax is $30, 000 and
the annual payroll is $3 .4 million. Amax occupies a land site
on East Chicago Street of 230, 694 square feet in four build-
ings totalling 48, 680 square feet . In addition, six jobs will
be retained. Amax had given serious consideration to
relocating its facility outside of Illinois . The availability
of IRB funding for the new plating equipment will relieve
pressures to relocate the Elgin operation.
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
None .
Inducement Resolution with Amax Plating, Inc .
April 15, 1998
Page 2
FINANCIAL IMPACT
All costs pertaining to the IRB issuance will be borne by Amax
Plating.
*LEGAL IMPACT
$ None .
ALTERNATIVES
1) Authorize Amax to use $1 million of the City' s IRB
capacity.
2) Deny the request by Amax to utilize $1 million of the
City' s 1998 IRB capacity.
RECOMMENDATION
Speer Financial, Inc . found The Amax proposed expansion to be
a good credit risk and worthwhile project and recommended that
the City proceed with an inducement resolution.
It is recommended that an inducement resolution be adopted for
Amax Plating, Inc . in the amount of $1 million in Industrial
Revenue Bonds .
R pectfully submitted,
W
a -
c . Parker
City Manager
amp
04/13/1998 22:04 5085201363 JEFFREY S. ZAJAC PAGE 02
City of Elgin
Application for Industrial Development Bond Financing for
Amax Plating, Inc
Business Name: Amax Plating.. Inc,
Address: 970 East Chicago Street
City, State: Elfin 11-
Representative: Tom Horak,President
Telephone: 847-695-6100 FAX 847-695-4418
Federal Tax 1D Number: 36-2615088
Amount of Proposed Bond Issue: $1.0 Million
Name of Bond Purchaser: Finova Public Finance. Inc.
Form of Organization of Borrower: Corporation
Name of Bond Counsel: To Be Detained
Name of Corporate Lawyer: To Be Detrained
Proposed Use of Proceeds: Purchase and installation of new plating equt
Is Proposal a new facility? NO
Is the proposal Industrial/Commercial/Retail? Industrial
What is the principal product of the company? Amax Plating is in the business of reel-to-reel plating of
precious and non precious components prod are used in all interconnect applications.
Examples include connectors for computers, cellular phones and pagers.
What are the proposed financing arrangements? Privzle placement of bond-
Give the approximate dates of construction? June 1998—March 1992
ECONOMIC
A. Project Costs
Construction Costs $-
Financing Costs $25,000
Equipment Costs $1,000,000
Land S N/A
Architectural $N/A
Legal $25,000
Other $15,000
o4/14l913 PAPP 1 ncs
04/13/1998 22:04 5085201363 JEFFREY S. ZAJAC PAGE 03
City of Elgin
Application for Industrial Development Bond Financing for
Amax Plating, Inc
B. Financial Stability(provide the following)
Prospectus
Reports to stockholders
5 Years to independently audited financial statement
Most recent interim financial report
Dun&Bradstreet report
Name and address of project lender Finova Public Finance, 7501 Boulet,View Drive Suite
605 Richm,ofd VA 23225
Commitment letter of financing
(including length of commitment)
Name,address and contact of bond purchaser Finova Public Finance 7501 Boulders View Drive
Suite 605 Richmond VA 23225 Phone 804-323-9330,Fax 804-323-9285
Estimated tax yield to city_ Not Applicable
Estimated increased payroll S30,000
Estimated assessed value of additional and total real property Not.Applicable
Number of years in business 30 Years(Foundzd,August 1967)
is any litigation pendilag by or against company?
Yes X No
Type of Product:Reel-to-Reel,Rack and Barret.plating.
Description of Product: Amax is in the business ofproviding plating Processing for the
intercorrtiection industry. Using Rack,Barrel and Reel-to-Reel techniques we plate Copper,
Nickel Silver God,palladium Pall ilium-Nickel Tin and Tin-Lead Alloys either selectively or
overall,onto customer supplied materials usimz,custom designed equipment
Market Arca Served: We serve the automobile,computer and telecommunications industries. Our
product is used primarily in the US.There.is a small percent of our business that is exported to
Canada and Mexico
C. Employment
A. Number of Current Employees:
Full Time: 94
Part Time: 0
Managers: 4
Employees living in Elgin: 65
B. Number of new jobs created/retained(please specify)
Permanent Full Time: 1 created, 7 retained
Permanent Part Time:
Seasonal/Temporary
AG/11/OR hoop 1 of
04/13/1998 22:04 5085201363 JEFFREY S. ZAJAC PAGE 04
City of Elgin
Application for Industrial Development Bond Financing for
Amax Plating, Inc
C. Types of new jobs created/retained:
Clerical:
. Labor: 1 created,6xetained
Supervisory: 1 retained
Managerial
D. Average Employee Salary(present): $30.000.00 Per Year
E. Yearly Payroll(present): $3.400.000.00
F. Employee Skills Required: Basic math skills. basic chemistry,blueprint reading,, attention to
detail,work well with othgs.mechanical aptitude.
D. Environmental Note: No significant changes from present situation e peeled.
A. Plant:
1. Location: Amax Plating occupies four adjacent lots at 970. 980,990 and 1000 East Chicago
Street in Elgin IL
2. Land Size: 970-58,808_ft2, 980-42.278 ft2, 990-57,352 ft2, 1000-72,256 ft2
Square Feet:['otal 230.694 ft2
1. Present Plant: 970-21,600 ft2, 980- 17.520 ft2 , 990-0 ft2 1000-9,560 ft2,Total of
48.680 ft2
4. New Plant: No Clange
5, Land Coverage: 21,1%
B. Pollution: Note:No significant changes from present situation expected.
I. Water/Sewer effluent: 850 gal/day Domestic
91,300 gal/dav Industrial
None Unusual Wastes
2. Air/Foreign or toxic substances: Copper
3. Odors: None
4. Glare: None
5. Noise: Ngne
6. Pollution devices required: The facility is required to have a 24 hour capable water sampling
device_in its sewer to nlenitor effluent discharge for local POTW. Devices necessary tp keep
water discharge characteristics with control limits for the POTW include a cyanided destruct
gystem,a batch eatment system. a filter press and a pH blending system.
fl4/11/OR PROP 1 of
04/13/1998 22:04 5085201363 JEFFREY S. ZAJAC PAGE 05
City of Elgin
Application for Industrial Development Bond Financing for
Amax Plating, Inc
7. According to City Engineer, are there adequate number of Water and Sewer Connection to the
Site?
2i Yes No
E. Community Services Note:__No significant changed from present Situation expected,
A. Traffic
1. Number of Vehicles into Site per day:
Trucks: 20 Cars: 85
Other Vehicles: N/A
2. Ability of Street to Carry Additional Land Note:No increase in traffic from expansion.
a. Access-Sketch of ingress/egress patterns
b. Safety-Plans to facilitate any substantial traffic movement
B. Utility Requirements Note: No sianificantchanaes from preixt situation expected
1. Water used per day: 92,150 gallons
Fire protection adequate?Fire extinguishers are located throughout the facility. Building 970
has a mgrinkler system.
Additional water or sewer requirements:(i.e.pretreatment,extensions)Pretreatment equipxtent
as described in Environmental Sec. B,Question 6,
2. Type of Sewage: Sewage besides sanitary/domestic i$industrial. In4i stxial sewage typically
ranges letween 6-9 pH, containing about 1 PPM con er, 0.7 ppm nickel,0,3 ppm lead and 0.1
pnm cyanide. Industrial sewage is rinse water from our procgss and pretreated waste water
from our pegs.
3. A. Projected annual electrical usage:
3.�5 aril on KWH Per Year.
B. Projected annual gas usage:
18,000 DTherms Per Year
C. Schools: Not Applicable
CIVIC AWARENESS
1. Provide evidence of past civic activity; Member of the Elgin Chamber of Commerce, Support Elgin
Crisis Center. Support Local High school Athletic Programs,Participate irr,All Peoples Interfaith
Pantry.
04/1 Z/OR Paon 4 of
04/13/1998 22:04 5085201363 JEFFREY S. ZAJAC PAGE 06
04/13/199R 15:25 5085201363 JEFFREY S. ZAJAC PAGE 03
City of Elgin
Application for Industrial Development Bond Financing for
Atl&E1g„,111s
How will you company support local civic activities:We A1 coatinusu sapptl p
All w ixi tivo financial doontnents tlt►d information required by the City of Etgin mast be supplied before
application will be cojaeidexed by the City Council of the City of Eigia.
We agree to all the conditions as ,-.: ed in applicable city ordinances.
a G.e Signed:
Sigend!--Tr—sCisi:
Thomas H
Title: ?dent Tide: watiramorm
chid Corporate Officer Cldef Financial Officer
Date: 3/9
?owe c eRc
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