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S7-96 ORDINANCE S7-96 AN ORDINANCE AUTHORIZING THE ISSUANCE, SALE AND DELIVERY BY THE CITY OF ELGIN, ILLINOIS OF NOT TO EXCEED $4,000,000 AGGREGATE PRINCIPAL AMOUNT ADJUSTABLE RATE DEMAND REVENUE BONDS, SERIES 1996(JUDSON COLLEGE PROJECT), FOR THE PURPOSE OF MAKING A LOAN TO JUDSON COLLEGE; AUTHORIZING THE EXECUTION AND DELIVERY BY THE CITY OF ELGIN, ILLINOIS OF AN INDENTURE OF TRUST, A LOAN AGREEMENT, A BOND PLACEMENT AGREEMENT AND A TAX COMPLIANCE AGREEMENT; AND AUTHORIZING CERTAIN OTHER ACTIONS BY THE CITY OF ELGIN, ILLINOIS IN CONNECTION THEREWITH WHEREAS, the City is a duly constituted and existing municipality and a home rule unit within the meaning of Section 6(a) of Article VII of the Constitution of the State of Illinois; WHEREAS, the City, pursuant to its powers as a home rule unit, is authorized and empowered to issue its revenue bonds to finance the costs of acquiring, constructing, renovating, equipping and improving educational facilities for private, nonprofit institutions of higher education located within the City in order to enhance the general health and welfare of the residents of the City and the surrounding areas; WHEREAS, to induce Judson College, an Illinois not-for-profit corporation (the "College"), to expand its educational facilities in the City, and in particular to acquire, construct, renovate, equip and improve the educational facility to be known as the Lindner Center (such expansion to be referred to herein as the "Project"), and thereby enhance the general health and welfare of the residents of the City and its surrounding areas, the City proposes to finance certain costs of the Project; WHEREAS, in order to obtain funds for such purposes, the City proposes to authorize the issuance, sale, and delivery, pursuant to Section 6(a) of Article VII of the Constitution of the State of Illinois, of its Adjustable Rate Demand Revenue Bonds, Series 1996 (Judson College Project), in the aggregate principal amount of not to exceed $4,000,000 (the "Bonds"); WHEREAS, the Bonds are to be secured by and to contain such terms and provisions as are set forth in the Indenture of Trust (the "Indenture"), to be entered into between the City and American National Bank and Trust Company of Chicago, as Trustee (the "Trustee"), and the proceeds thereof to be applied as set forth in the Indenture and the hereinafter defined Loan Agreement; WHEREAS, in order to accomplish the purposes described in the third recital to this Ordinance, the City proposes to loan the proceeds received from the sale of the Bonds to the r 18249555 College pursuant to the Loan Agreement (the "Loan Agreement"), to be entered into between the City and the College; WHEREAS, pursuant to the Loan Agreement and the promissory note of the College(the "Note"), the College will agree, among other things, to pay to or for the account of the City loan payments sufficient to provide for the full and timely payment of principal of and interest on the Bonds; WHEREAS, to provide further security to the owners of the Bonds and to reduce the borrowing costs associated with the Project, The First National Bank of Chicago (the "Bank"), will issue its irrevocable direct-pay letter of credit (the "Letter of Credit") to provide for the full and timely payment of the principal of and interest on the Bonds; WHEREAS, the City proposes to sell the Bonds on a negotiated basis to a purchaser or purchasers (the "Purchaser") arranged by American National Bank and Trust Company of Chicago, Illinois, acting in its capacity as placement agent (the "Placement Agent"); WHEREAS, in order to establish and maintain the right of the owners of the Bonds to treat interest received thereon as exempt from federal income taxation (subject to certain exceptions and limitations), the City, the College and the Trustee will enter into the Tax Compliance Agreement (the "Tax Compliance Agreement"); WHEREAS, the officers, agents and employees of the City have caused to be presented to this meeting the forms of the following agreements and documents which the City proposes to approve and, in certain instances, to execute and deliver: 1. The Indenture and the Bonds; 2. The Loan Agreement and the Note; 3. The Letter of Credit; 4. The Tax Compliance Agreement; 5. The Remarketing Agreement, between the College and American National Bank and Trust Company of Chicago, as Remarketing Agent; 6. The Bond Placement Agreement, among the City, the College and the Placement Agent; 7. The Private Placement Memorandum relating to the Bonds (the "Placement Memorandum"); and r 18249555 -2- WHEREAS, it appears that each of the agreements and documents above referred to tek which is now before this meeting is in appropriate form and, in the case of the Indenture, the Loan Agreement, the Bond Placement Agreement and the Tax Compliance Agreement, is an appropriate agreement to be executed and delivered by the City for the purposes intended. NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Elgin, Illinois as follows: Section 1. That this City Council hereby finds the issuance of the Bonds for the purpose of making a loan to the College to finance certain costs of the Project to be in furtherance of the powers and authority granted by Section 6(a) of Article VII of the Constitution of the State of Illinois and approves the structure of the financing therefor as described in the recitals to this Ordinance. Section 2. That the Mayor, the City Clerk or any other officer of the City be, and they hereby are, authorized, empowered, and directed to cause to be prepared an issue of the Bonds in an aggregate principal amount of not to exceed $4,000,000 (the final amount to be determined by the Mayor of the City), in the form, bearing interest initially at the Weekly Rate (as defined in the Indenture) (which initial Weekly Rate shall not exceed twelve percent (12%) per annum and which initial Weekly Rate shall be determined by the Placement Agent), maturing not later than July 1, 2016 (the final maturity to be determined by the Mayor of the City), subject to tender and redemption and having the other terms and provisions specified in the rek Indenture as executed and delivered; that the Bonds shall be executed in the name of the City with the manual or facsimile signature of the Mayor and attested by the manual or facsimile signature of the City Clerk and the seal of the City shall be impressed or reproduced thereon; and that the Mayor or the City Clerk or any other officer, agent or employee of the City shall cause the Bonds, so executed, attested, and sealed, to be delivered to the Trustee for authentication. The Bonds shall be limited obligations of the City, with the principal of and interest on the Bonds being payable solely out of the loan payments by the College under the Loan Agreement and the Note, the payments by the Bank under the Letter of Credit and the other revenues derived pursuant to the Loan Agreement and specifically pledged under the Indenture, and the Bonds shall not constitute an indebtedness of the State of Illinois or the City within the meaning of any Illinois constitutional provision or statutory limitation, or give rise to a pecuniary liability of the State of Illinois or the City. Section 3. That the form, terms, and provisions of the Indenture be, and they hereby are, in all respects approved and that the Mayor and the City Clerk of the City be, and they hereby are, authorized, empowered, and directed to execute, attest and deliver the Indenture in the name and on behalf of the City, and thereupon to cause the Indenture to be executed, attested and delivered by the Trustee; that the Indenture is to be in substantially the form now before this meeting and hereby approved, or with such changes therein as shall be approved by the officers of the City executing the same, their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions therein from the form of Indenture now before this 18249555 -3- meeting; and that from and after the execution and delivery of the Indenture, the officers, agents, and employees of the City are hereby authorized, empowered, and directed to do all such acts and things and to execute and deliver all such documents as may be necessary to carry out and comply with the provisions of the Indenture as executed. Section 4. That the form, terms, and provisions of the Loan Agreement be, and they hereby are, in all respects approved, and that the Mayor and the City Clerk of the City be, and they hereby are, authorized, empowered, and directed to execute, attest and deliver the Loan Agreement in the name and on behalf of the City, and thereupon to cause the Loan Agreement to be executed, attested and delivered by the College; that the Loan Agreement is to be in substantially the form now before this meeting and hereby approved, or with such changes therein as shall be approved by the officers of the City executing the same, their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions therein from the form of Loan Agreement now before this meeting; and that from and after the execution and delivery of the Loan Agreement, the officers, agents, and employees of the City are hereby authorized, empowered, and directed to do all such acts and things and to execute and deliver all such documents as may be necessary to carry out and comply with the provisions of the Loan Agreement as executed. Section 5. That the form, terms, and provisions of the Tax Compliance Agreement be, and they hereby are, in all respects approved and that the Mayor and the City Clerk of the City be, and they hereby are, authorized, empowered, and directed to execute, attest and deliver the Tax Compliance Agreement in the name and on behalf of the City, and thereupon cause the Tax Compliance Agreement to be executed, attested and delivered by the College and the Trustee; that the Tax Compliance Agreement is to be in substantially the form now before the meeting and hereby approved, or with such changes therein as shall be approved by the officers of the City executing the same, their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions therein from the form of Tax Compliance Agreement now before this meeting; and that from and after the execution and delivery of the Tax Compliance Agreement, the officers, agents, and employees of the City are hereby authorized, empowered, and directed to do all such acts and things and to execute and deliver all such documents as may be necessary to carry out and comply with the provisions of the Tax Compliance Agreement as executed. Section 6. That the form, terms, and provisions of the Bond Placement Agreement be, and they hereby are, in all respects approved and that the Mayor and the City Clerk of the City be, and they hereby are, authorized, empowered, and directed to execute, attest and deliver the Bond Placement Agreement in the name and on behalf of the City, and thereupon cause the Bond Placement Agreement to be executed, attested and delivered by the College and the Placement Agent; that the Bond Placement Agreement is to be in substantially the form now before the meeting and hereby approved, or with such changes therein as shall be approved by the officers of the City executing the same, their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions therein from the form of Bond r 18249555 -4- e.. Placement Agreement now before this meeting; and that from and after the execution and delivery of the Bond Placement Agreement, the officers, agents, and employees of the City are hereby authorized, empowered, and directed to do all such acts and things and to execute and deliver all such documents as may be necessary to carry out and comply with the provisions of the Bond Placement Agreement as executed. Section 7. That the issuance and sale of the Bonds to the Purchaser arranged by the Placement Agent at a purchase price equal to 100% of the principal amount of the Bonds is hereby approved by this City Council, such Bonds to be delivered to the Purchaser on the date of original issuance thereof (which date shall be July 31, 1996 or such other business day as shall be mutually agreeable to the Purchaser, the City and the College) and that the use and distribution of the Placement Memorandum (and the preliminary form thereof) in connection with the sale of the Bonds is hereby authorized. Section 8. That the Trustee on behalf of the City is hereby authorized and directed to authenticate and deliver the Bonds to or on the order of the Purchaser (including through the facilities of The Depository Trust Company) upon payment of the purchase price of the Bonds. Section 9. That the Mayor, the City Clerk, or any other officer, agent or employee of the City be and each is hereby authorized, empowered, and directed to do all such acts and things and to execute, deliver and/or approve all such documents and agreements as may be necessary to carry out and comply with the provisions of this Ordinance, and all of the acts and doings of the officers, agents and employees of the City which are in corformity with the intent and purposes of this Ordinance, whether heretofore or hereafter taken or done, shall be are are hereby ratified, confirmed and approved. Section 10. That the Mayor, the City Clerk, or any other officer, agent or employee of the City be and each is hereby authorized, empowered, and directed to prepare and file with the Secretary of the Treasury of the United States the statement (IRS Form 8038) with respect to the Bonds required by Section 149(e) of the Code. Section 11. That the appointment of American National Bank and Trust Company of Chicago as Remarketing Agent under the Indenture for the Bonds is hereby approved. Section 12. That the Mayor, the City Clerk, or any other officer, agent or employee of the City be and each is hereby authorized, empowered, and directed, upon delivery of the Bonds to the Purchaser, to file any reports and notices as may be required by Illinois law in connection with the issuance of the Bonds. Section 13. That the Bonds are issued by authority of Section 6(a) of Article VII of the Constitution of the State of Illinois, and the adoption of this Ordinance shall be conclusive evidence of the validity of the Bonds and of the regularity of their issuance. 18249555 -5- r•. Section 14. That this Ordinance shall take effect immediately upon its adoption by this City Council. Roll call resulted as follows: AYES: 6 NAYS: 0 ABSTAIN: 0 x74 Kevin Kelly, Mayor Attest: /J-g&^^.4 City Clerk Whereupon the above ordinance was declared adopted this 24th day of July, 1996. 18249555 -6- ORDINANCE S7-96 AN ORDINANCE AUTHORIZING THE ISSUANCE, SALE AND DELIVERY BY THE CITY OF ELGIN, ILLINOIS OF NOT TO EXCEED $4,000,000 AGGREGATE PRINCIPAL AMOUNT ADJUSTABLE RATE DEMAND REVENUE BONDS, SERIES 1996(JUDSON COLLEGE PROJECT), FOR THE PURPOSE OF MAKING A LOAN TO JUDSON COLLEGE; AUTHORIZING THE EXECUTION AND DELIVERY BY THE CITY OF ELGIN, ILLINOIS OF AN INDENTURE OF TRUST, A LOAN AGREEMENT, A BOND PLACEMENT AGREEMENT AND A TAX COMPLIANCE AGREEMENT; AND AUTHORIZING CERTAIN OTHER ACTIONS BY THE CITY OF ELGIN, ILLINOIS IN CONNECTION THEREWITH WHEREAS, the City is a duly constituted and existing municipality and a home rule unit within the meaning of Section 6(a) of Article VII of the Constitution of the State of Illinois; WHEREAS, the City, pursuant to its powers as a home rule unit, is authorized and empowered to issue its revenue bonds to finance the costs of acquiring, constructing, renovating, equipping and improving educational facilities for private, nonprofit institutions of higher education located within the City in order to enhance the general health and welfare of the residents of the City and the surrounding areas; WHEREAS, to induce Judson College, an Illinois not-for-profit corporation (the "College"), to expand its educational facilities in the City, and in particular to acquire, construct, renovate, equip and improve the educational facility to be known as the Lindner Center (such expansion to be referred to herein as the "Project"), and thereby enhance the general health and welfare of the residents of the City and its surrounding areas, the City proposes to finance certain costs of the Project; WHEREAS, in order to obtain funds for such purposes, the City proposes to authorize the issuance, sale, and delivery, pursuant to Section 6(a) of Article VII of the Constitution of the State of Illinois, of its Adjustable Rate Demand Revenue Bonds, Series 1996 (Judson College Project), in the aggregate principal amount of not to exceed $4,000,000 (the "Bonds"); WHEREAS, the Bonds are to be secured by and to contain such terms and provisions as are set forth in the Indenture of Trust (the "Indenture"), to be entered into between the City and American National Bank and Trust Company of Chicago, as Trustee (the "Trustee"), and the proceeds thereof to be applied as set forth in the Indenture and the hereinafter defined Loan Agreement; WHEREAS, in order to accomplish the purposes described in the third recital to this Ordinance, the City proposes to loan the proceeds received from the sale of the Bonds to the 18249555 College pursuant to the Loan Agreement (the "Loan Agreement"), to be entered into between the City and the College; WHEREAS, pursuant to the Loan Agreement and the promissory note of the College (the "Note"), the College will agree, among other things, to pay to or for the account of the City loan payments sufficient to provide for the full and timely payment of principal of and interest on the Bonds; WHEREAS, to provide further security to the owners of the Bonds and to reduce the borrowing costs associated with the Project, The First National Bank of Chicago (the "Bank"), will issue its irrevocable direct-pay letter of credit (the "Letter of Credit") to provide for the full and timely payment of the principal of and interest on the Bonds; WHEREAS, the City proposes to sell the Bonds on a negotiated basis to a purchaser or purchasers (the "Purchaser") arranged by American National Bank and Trust Company of Chicago, Illinois, acting in its capacity as placement agent (the "Placement Agent"); WHEREAS, in order to establish and maintain the right of the owners of the Bonds to treat interest received thereon as exempt from federal income taxation (subject to certain exceptions and limitations), the City, the College and the Trustee will enter into the Tax Compliance Agreement (the "Tax Compliance Agreement"); WHEREAS, the officers, agents and employees of the City have caused to be presented to this meeting the forms of the following agreements and documents which the City proposes to approve and, in certain instances, to execute and deliver: 1. The Indenture and the Bonds; 2. The Loan Agreement and the Note; 3. The Letter of Credit; 4. The Tax Compliance Agreement; 5. The Remarketing Agreement, between the College and American National Bank and Trust Company of Chicago, as Remarketing Agent; 6. The Bond Placement Agreement, among the City, the College and the Placement Agent; 7. The Private Placement Memorandum relating to the Bonds (the "Placement Memorandum"); and 18249555 -2- WHEREAS, it appears that each of the agreements and documents above referred to which is now before this meeting is in appropriate form and, in the case of the Indenture, the Loan Agreement, the Bond Placement Agreement and the Tax Compliance Agreement, is an appropriate agreement to be executed and delivered by the City for the purposes intended. NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Elgin, Illinois as follows: Section 1. That this City Council hereby fords the issuance of the Bonds for the purpose of making a loan to the College to finance certain costs of the Project to be in furtherance of the powers and authority granted by Section 6(a) of Article VII of the Constitution of the State of Illinois and approves the structure of the financing therefor as described in the recitals to this Ordinance. Section 2. That the Mayor, the City Clerk or any other officer of the City be, and they hereby are, authorized, empowered, and directed to cause to be prepared an issue of the Bonds in an aggregate principal amount of not to exceed $4,000,000 (the final amount to be determined by the Mayor of the City), in the form, bearing interest initially at the Weekly Rate (as defined in the Indenture) (which initial Weekly Rate shall not exceed twelve percent (12%) per annum and which initial Weekly Rate shall be determined by the Placement Agent), maturing not later than July 1, 2016 (the final maturity to be determined by the Mayor of the City), subject to tender and redemption and having the other terms and provisions specified in the Indenture as executed and delivered; that the Bonds shall be executed in the name of the City with the manual or facsimile signature of the Mayor and attested by the manual or facsimile signature of the City Clerk and the seal of the City shall be impressed or reproduced thereon; and that the Mayor or the City Clerk or any other officer, agent or employee of the City shall cause the Bonds, so executed, attested, and sealed, to be delivered to the Trustee for authentication. The Bonds shall be limited obligations of the City, with the principal of and interest on the Bonds being payable solely out of the loan payments by the College under the Loan Agreement and the Note, the payments by the Bank under the Letter of Credit and the other revenues derived pursuant to the Loan Agreement and specifically pledged under the Indenture, and the Bonds shall not constitute an indebtedness of the State of Illinois or the City within the meaning of any Illinois constitutional provision or statutory limitation, or give rise to a pecuniary liability of the State of Illinois or the City. Section 3. That the form, terms, and provisions of the Indenture be, and they hereby are, in all respects approved and that the Mayor and the City Clerk of the City be, and they hereby are, authorized, empowered, and directed to execute, attest and deliver the Indenture in the name and on behalf of the City, and thereupon to cause the Indenture to be executed, attested and delivered by the Trustee; that the Indenture is to be in substantially the form now before this meeting and hereby approved, or with such changes therein as shall be approved by the officers of the City executing the same, their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions therein from the form of Indenture now before this 18249555 -3- meeting; and that from and after the execution and delivery of the Indenture, the officers, agents, and employees of the City are hereby authorized, empowered, and directed to do all such acts and things and to execute and deliver all such documents as may be necessary to carry out and comply with the provisions of the Indenture as executed. Section 4. That the form, terms, and provisions of the Loan Agreement be, and they hereby are, in all respects approved, and that the Mayor and the City Clerk of the City be, and they hereby are, authorized, empowered, and directed to execute, attest and deliver the Loan Agreement in the name and on behalf of the City, and thereupon to cause the Loan Agreement to be executed, attested and delivered by the College; that the Loan Agreement is to be in substantially the form now before this meeting and hereby approved, or with such changes therein as shall be approved by the officers of the City executing the same, their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions therein from the form of Loan Agreement now before this meeting; and that from and after the execution and delivery of the Loan Agreement, the officers, agents, and employees of the City are hereby authorized, empowered, and directed to do all such acts and things and to execute and deliver all such documents as may be necessary to carry out and comply with the provisions of the Loan Agreement as executed. Section 5. That the form, terms, and provisions of the Tax Compliance Agreement be, and they hereby are, in all respects approved and that the Mayor and the City Clerk of the City be, and they hereby are, authorized, empowered, and directed to execute, attest and deliver the Tax Compliance Agreement in the name and on behalf of the City, and thereupon cause the Tax Compliance Agreement to be executed, attested and delivered by the College and the Trustee; that the Tax Compliance Agreement is to be in substantially the form now before the meeting and hereby approved, or with such changes therein as shall be approved by the officers of the City executing the same, their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions therein from the form of Tax Compliance Agreement now before this meeting; and that from and after the execution and delivery of the Tax Compliance Agreement, the officers, agents, and employees of the City are hereby authorized, empowered, and directed to do all such acts and things and to execute and deliver all such documents as may be necessary to carry out and comply with the provisions of the Tax Compliance Agreement as executed. Section 6. That the form, terms, and provisions of the Bond Placement Agreement be, and they hereby are, in all respects approved and that the Mayor and the City Clerk of the City be, and they hereby are, authorized, empowered, and directed to execute, attest and deliver the Bond Placement Agreement in the name and on behalf of the City, and thereupon cause the Bond Placement Agreement to be executed, attested and delivered by the College and the Placement Agent; that the Bond Placement Agreement is to be in substantially the form now before the meeting and hereby approved, or with such changes therein as shall be approved by the officers of the City executing the same, their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions therein from the form of Bond 18249555 -4- Placement Agreement now before this meeting; and that from and after the execution and delivery of the Bond Placement Agreement, the officers, agents, and employees of the City are hereby authorized, empowered, and directed to do all such acts and things and to execute and deliver all such documents as may be necessary to carry out and comply with the provisions of the Bond Placement Agreement as executed. Section 7. That the issuance and sale of the Bonds to the Purchaser arranged by the Placement Agent at a purchase price equal to 100% of the principal amount of the Bonds is hereby approved by this City Council, such Bonds to be delivered to the Purchaser on the date of original issuance thereof (which date shall be July 31, 1996 or such other business day as shall be mutually agreeable to the Purchaser, the City and the College) and that the use and distribution of the Placement Memorandum (and the preliminary form thereof) in connection with the sale of the Bonds is hereby authorized. Section 8. That the Trustee on behalf of the City is hereby authorized and directed to authenticate and deliver the Bonds to or on the order of the Purchaser (including through the facilities of The Depository Trust Company) upon payment of the purchase price of the Bonds. Section 9. That the Mayor, the City Clerk, or any other officer, agent or employee of the City be and each is hereby authorized, empowered, and directed to do all such acts and things and to execute, deliver and/or approve all such documents and agreements as may be necessary to carry out and comply with the provisions of this Ordinance, and all of the acts and doings of the officers, agents and employees of the City which are in corformity with the intent and purposes of this Ordinance, whether heretofore or hereafter taken or done, shall be are are hereby ratified, confirmed and approved. Section 10. That the Mayor, the City Clerk, or any other officer, agent or employee of the City be and each is hereby authorized, empowered, and directed to prepare and file with the Secretary of the Treasury of the United States the statement (IRS Form 8038) with respect to the Bonds required by Section 149(e) of the Code. Section 11. That the appointment of American National Bank and Trust Company of Chicago as Remarketing Agent under the Indenture for the Bonds is hereby approved. Section 12. That the Mayor, the City Clerk, or any other officer, agent or employee of the City be and each is hereby authorized, empowered, and directed, upon delivery of the Bonds to the Purchaser, to file any reports and notices as may be required by Illinois law in connection with the issuance of the Bonds. Section 13. That the Bonds are issued by authority of Section 6(a) of Article VII of the Constitution of the State of Illinois, and the adoption of this Ordinance shall be conclusive evidence of the validity of the Bonds and of the regularity of their issuance. 18249555 _5_ Section 14. That this Ordinance shall take effect immediately upon its adoption by this City Council. Roll call resulted as follows: AYES: Councilmembers Gavin, Gilliam, McKevitt, Schock, Walters , Yearman, and Mayor Kelly. NAYS: None. ABSTAIN: None. /s Kevin Kelly Kevin Kelly, Mayor Attest: s/ Dolonna Mecum City Clerk Whereupon the above ordinance was declared adopted this 24th day of July, 1996. 18249555 -6- irPUBLIC FINANCE CONSULTANTS SINCE 1954 SPEER FINANCIAL INC. ELWOOD BARCE RICHARD A.PAVIA KEVIN W.McCANNA DAVID F.PHILLIPS LARRY P.BURGER DANIEL D.FORBES MADMAN MOM OMRPMAN Balms rumen. VEE PRESIDENT VICE PRESIDENT ME PRESIDENT July 11, 1996 The Honorable Kevin B. Kelly and Members of the City Council City of Elgin 150 Dexter Court Elgin, Illinois 60120 - Dear Mayor Kelly and City Council Members: Pursuant to the request of the City, Speer Financial, Inc. has reviewed the audited financial statements of Judson College. The audits are on a fiscal year ending June 30 and were prepared by several auditing firms. The review is related to the application of the College to issue $4,000,000 tax exempt revenue bonds through the City for the hotel renovation project. The proceeds of the bond issue will be used by the College to finance the acquisition, renovation, and improvement of the Lindner Center, formerly known as the Elgin Inn, and to reimburse the College for costs already incurred relating to the Lindner Center. The new Lindner Center is expected to provide needed space for classrooms, laboratories, dormitory rooms, and offices. Extensive renovation will give the Lindner Center the appearance of a new building. Once completed, the Lindner Center, with four acres of land and 93,000 square feet of space, will provide: dormitory rooms for 264 students; office and classroom space for the College's Department of Continuing Education; office and classroom space for the business, education and social sciences departments; six state-of-the-art classrooms as well as psychology, education and computer laboratories; offices for a counseling center and community outreach programs; and parking for students, faculty and visitors. The Center will give the College visibility from the Northwest Tollway. In addition, there is room for a day care facility, planned for the future. The $4,000,000 financing will be part of the $7,200,000 project, with the balance coming from contributions to the College. The $7,200,000 budget is as follows: Purchase of the Elgin Inn property $1,700,000 Renovation/Equipment/Furnishings 5,000,000 Endowment enhancement 500.000 Total $7,200,000 Note that these bonds, similar to industrial revenue bonds, are tax exempt through the City's issuance, but are not direct obligations of the City. The bonds are only payable from revenues of the College. These are known as 501(c)(3) bonds, as the College is a not-for-profit entity. As with other educational institutions of higher learning, a religious affiliation is not significant, so long as the proceeds are not used for religious education facilities. Financial Analysis As the accompanying table indicates, the College has been financially stable over the past five years. SUITE 3435.55 EAST MONROE STREET•CHICAGO,ILLINOIS 60603•(312)3463700•FAX(312)346-8833 SUITE 500.531 COMMERCIAL STREET•WATERLOO,IOWA 50701•(319)291-2077•FAX(319)2914787 General Fund Balance Sheet Audited as of June 30 1991 1992 1993 1994 1995 ASSETS: Unrestricted: Cash and Investments $ 484,650 $ 507,795 S 370,895 $ 163,675 $ 122,230 Accounts Receivable 420,809 401,312 460,666 602,162 838,698 Others 409.257 481.478 632.615 619.160 740.464 Subtotal $ 1,314,716 $ 1,390,585 S 1,464,176 $ 1,384,997 $ 1,701,392 Restricted 119.665 144.700 133.670 120.963 637.802 Total Current $ 1434.381 $ 1.535.285 S 1.597.846 $ 1.505.960 $ 2.339.194, Loan Funds $ 671,049 $ 687,612 S 709,414 $ 731,099 $ 750,080 Endowment and Similar Fuds S 3,886,050 S 3,755,319 S 3,695,989 $ 3,959,880 $ 3,710,587 Annuity and Trust Funds $ 489,363 $ 511,806 S 542,700 $ 519,720 S 557,457 Investment in Plant $10,917,785 $11,079,874 $11,268,728 $11,664,001 $12,507,754 LIABILITIES AND FUND BALANCES: Unrestricted: Due to Other Funds S 695,060 S 595,171 S 602,456 S 371,526 $ 314,922 Other 503,327 678,184 791,141 941,794 1,311,212 Fund Balance 116.329 117.230 70.579 71.677 75.258 Total $ 1.314.716 $ 1.390.585 $ 1.464.176 $ 1.384.997 $ 1.701.392. Restricted: Accounts Payable S 939 S 0 $ 0 S O $ 0 Fund Balance 118.726 144.700 133.670 120.963 637.802 Total Current $ 1.434.381, S 1.535.285 $ 1.597.846 $ 1.505.960 $ 2.339.194 ,an Funds S 671,049 $ 687,612 $ 709,414 $ 731,099 5 750,080 Endowment and Similar Funds: Fund Balances S 3,691,050 $ 3,610,319 $ 3,611,989 S 3,924,880 $ 3,694,087 Other 195.000 145.000 84.000 35.000 16.500 Total $ 3,886,050 $ 3,755,319 $ 3,695,989 $ 3,959,880 S 3,710,587 Annuity and Trust Funds: Payables S 320,160 S 333,455 $ 300,434 S 299,593 S 285,811 Fund Balances 169.203 178.351 242.266 220.127 271.646 Total $ 489,363 $ 511,806 S 542,700 $ 519,720 S 557,457 Plant Funds: Debt Payable S 85,324 S 59,608 S 56,000 S 48,000 S 569,000 Other 10.832.461 11.020.266 11.212.728 11.616.001 11.938.759 Total $10,917,785 $11,079,874 $11,268,728 $11,664,001 $12,507,759 Current Funds Audited Years Endina June 30 1991 1992 1993 1994 1995 REVENUES $8,606,300 59,203,610 $9,452,447 $10,359,146 $12,728,758 EXPENDITURES 8,510,027 9,147,637 9,423,860 10,321,190 12,328,789 NET TRANSFERS (102.902) (29.098) (86.268) (49.565) (446.456) Surplus (Deficit) $ (6,629) $ 26,875 $ (57,681) $ (11,609) $ (46,487) • rn,The intent of the College is to fund the repayment of the debt through a gift campaign. The gift campaign is reported A have in excess of$4,000,000 of pledges. However, funds on hand are significant and can assist in the repayment of the bonds in the likelihood that the gift campaign was not completely successful. As of the 1995 audit, the available, unrestricted endowment funds are $1,673,307. Conclusion We recommend that the City proceed based on the benefit of the project to the City, the likelihood of success of the gift campaign and the cash on hand. Sincerely, /c4 . f Kevin W. McCanna President JUN-26 96 11:41 FROM:CTY CF ELGIN FINANCE 7099315622 70:913127017711 - -- PAGE:02 CITY OF ELGIN . INDUSTRIAL REVENUE BOND APPLICATION Statement of Policy • The City of Elgin encourages the use of Industrial Develop- . went Bonds (IDS'$) for the financing of new and expanded industrial and office facilities as well as other projects. To this end, certain procedures have been established to provide for the orderly consideration of requests for IDS'$. These procedures are designed to facilitate the review in order that they may recommend to the City Council whether or not to issue said bonds. Review Emphasis 1. Economic benefit •will be achieved as outlined in state enabling legislation and the City of Elgin ordinances. 2. The applicant has a firm commitment for financing the project. 3. The bonds are marketable or a purchaser is avail- able. 4 . Bond counsel has been engaged by applicant. 5. Applicant fee payable to the City of Elgin is $2,500. Additional out-of-pocket expense by the City will be paid by the applicant. 6 . The project is environmentally sound and community services can be provided. . . JUN-26 96 11:41 FROM:CTY OF ELGIN FINANCE 7029315622 TO:913127017711 PAGE:03 INDUSTRIAL DEVELOPMENT BOND ISSUE CHEMIST I. Economic • A. Project Costs 1 . Construction Costs 2. Equipment costs 3. Architectural 4. Legal 5. Financing costs 6. Land, if applicable 7 . Other costs (please describe) . B. Financial Stability (please include the following where applicable) 1. Prospectus 2. Reports to Stockholders 3. Accounting, audits of the last 5 years' busi- ness prepared by an independent registered public accountant 4 . Most recent interim financial report 5. pun and Bradstreet Report 6. Name and address of lender for the project • 7. A letter indicating lender's firm commitment to. finance the project and expiration date of Commitment 6. Name and address of bond purchaser and contact person • 9. Estimated tax yield to the ,City 10. Estimated increased payroll. 11 . Estimated assessed value of additional and total real property 12 .' Number of years in business C. Employment 1. Number of new jobs created/retained a. Permanent full-time b. Permanent part-time c. Seasonal, temporary 2. Type of new jobs created/retained a. Clerical b. Labor c. Supervisory d. Managerial JUN-26 96 11:41 FROM:CTY OF ELGIN FINANCE 7089315622 70:913127017711 PAGE:04 • II. Environmental A. Plant • 1. Size 2. Amount of land required • 3. Proximity to residentially zoned areas 4. Zoning consistency 5. Physical appearance and landscaping B. Pollution 1. Water-type of effluent 2. Air-toxic substances 3. Odor 4 . Noise 5 . Glare 6. Pollution control devices used III. Community Services A. Traffic 1. Projected number of vehicles entering the plant area per day a. Cars b. Trucks . 2. Ability of street o carry additional load a. Access-sketch of ingress and egress patterns b. Safety-plane to facilitate any substantial traffic movement B. Utility Requirements 1. Water • a. Gallons of water used per day b. Water and line requirements needed for fire protection c. Need for line extensions 2 . Sewerage a. Amount b. Type/BOD level c. Pretreatment requirements and plans d. Need for line extensions 3. Gas and electric a. Projected usage C. Schools tow 1. Ability of system to accommodate possible enrollment increases JUN-26 96 11:41 FROM:CTY OF ELGIN FINANCE 7069315622 TO:913127017711 PAGE:05 ZV. Community Involvement 1. . Past activities 2. Future activities For information, please call or write: Mr. Raymond H. Moller Director of Business Services end Properties City of Elgin 150 Dexter Court Elgin, Illinois 60120 Phone: (709) 931-6749 r JUN-26 96 11:41 FROM:CTY CF ELGIN FINANCE 7089315622 TO:913127017711 PAGE:06 'CITY OP ELGIN APPLICATION POR INDUSTRIAL DEVELOPMENT BOND FINANCING Business Name: Judson College Address: 1151 N. State Street City, State: Elgin, Illinois 601.23 • Representative: David J. Draewell _ Telephone: (847) 695_2500 Ext; 2101 Federal Tax ID Number: 36-2515868 Amount of Proposed Bond Issue: 14,000,000 Name of Bond Purchaser: American National Bank & Trust Placement Aunt Form of Organization of Borrower: Illinois Not for Profit Qprnnration Name of Bond Counsel: Mayer, Brown & Platt _ Name of Corporate Lawyer: Mayer, Brown & Platt Proposed Use of Proceeds: Assist in the purchase and renovation_ of the former Elgin Inn for use as a classroom & office facility as wP11 A , residence hall for college students. JUN-26 96 11:41 FROM:CTY OF ELGIN FINANCE 7089315622 70:913127017711 PAGE:07 Is proposal a new facility? No Is the proposal 'Industrial/Commercial/Retail? Educational/residential What is the principal product of the company? The college offers the B.A. degree to all who successfully complete their orosrram. What are the proposed financing arrangements? Tax exempt bonds secured by a letter of rradir ; sct,ur1 by oia. First National Bank of Chicago plus donations -- Give the approximate dates of construction: Renovation began January, 1996 and will likely continue through the end of 1997_ ECONOMIC A. Project Costs (Estimated) 1. Construction Costa $ 3,700,000 • 2. Financing Coots $ 600.000 3. Equipment Coate $ 1 55n,nnn Building & 4 . Land $ 1 ,350,000 5. Architectural $ 125_.000 6. Legal $ e5,nnn 7. Other f real estate taxes 1992-95 $433,000 Project manager 100.000 Miscellaneous 97,000 / ft Total Project $8,000,000 JUN-26 96 11:42 FROM:CTY OF EL..GIN FINANCE 7089315622 T0:913127017711 PAGE:08 • B. Financial Stability (provide the following) 1 . Prospectus N/A 2. Reports to stockholders N/A 3. 5 years independently audited financial statement Already delivered • 4 . Most recent interim financial report May 1996 Operating BUDREPT. 5. Dun i Bradstreet report N/A enclose( 6 . Name and address of project lender American National Bank & Trust of 7. Commitment letter for financing enclosed Chicago (including length of commitment) B . Name, address and contact of bond purchaser 9. Estimated tax yield to City N/A 10. Estimated increased payroll $15,000 to $300,000 11 . Estimated assessed value of additional and total real property N/A' 12 . Number of years in business Since 1963. Is any litigation pending by or against company? Yes X No material litigation • Type of Product undergraduate education Description of Product Bachelor of Arts Degree Market Area Served Primarily state of Illinois & four surrounding states plus international sr.udents from 71_ rnuntr;Pc C. Employment 1. Number of Current Employees: Full Time: 133 Part Time: 117 & students Managers : 6 Employees living in Elgin: 175 • JUN-26 96 11:42 FROM:CTY OF ELGIN FINANCE 799315622 T0:913127017711 PAGE:09 2 . Number of new jobs created/retained (please specify) a. Permanent Full Time: 5 b. Permanent Part Time: 2 C. Seasonal/Temporary: Many construction jobs for 2 years, 3. Type of new jobs created/retained a. Clerical : 2 b. Labor: 3 c. Supervisory: 1 d. Managerial : t 4 . Average Employee Salary (present) : $29, 770 (full-time only) 5 . Yearly Payroll (present) : $5, 150.000 6 . ' Employee Skills Required: Mana,gprial rejrhinf rlariral, accounting, maintenance, etc. • D. Environmental A. Plant 1 . Location: 500 W. River Road, Elgin, IL 2. Land Size: approximately 4 acres Square Feet: 3. Present Plant: 13 buildings of varying size New Plant: 94,710 sq. ft. 4 . Land Coverage: 22.440 sQ_ ft. _ 8. Pollution * 1. Water/Sewer effluent domestic industrial unusual wastes *2 . Air/foreign or toxic substances: *3. Odors : *This is an office/classroom/dormitory complex and will have only those pollutants normally associated with such a facility. JUN-26 96 11:42 FROM:CTY CF ELGIN FINANCE 7089315622 70:913127017711 PAGE:10 * 4. Glare: See ntnntP an h.,rrn --!c_er4e see-reze---- * 5. Noise: See footnote an hottnm pf AreviQus ,page • • 6. Pollution devices required: NJA 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 : 3 Cars: 150 (fnr first phase) Other Vehicles: 5 2. Ability of Street to Carry Additional Land (site development a. Access - sketch of ingress/egress patterns plan attached) b. Safety - plans to facilitate any substantial traffic movement S. Utility Requirements 1 . Water used per day: '• gallons Fire Protection adequate? building will be sprinklerpd as rPnovatinn provesses Additional water or sewer requirements: (i.e. pretreatment, extensions) none 2. Type of Sewage: _ human waste only 3. A. Projected annual electrical usage: 1CWH information not currently available S. Projected annual gas usage: therms information not currently available • • JUN-26 96 11:42 FROM:CTY OF ELGIN FINANCE 7089315622 TO:913127017711 PAGE:11 C. • Schools Will' you project significantly increase school enrollment? No CIVIC AWARENESS 1. Provide evidence of past civic •ctivity: See attached sheet 2. How will your company support local civic activities? See attached sheet • 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 ordinanc s. :1 Signed: Signed Title: 7A / N Title: / .f i,/j; ",1/ Chie Corporate Officer Chief financial Officer • Dates •�;/ J /f '-4 JUDSON COLLEGE CIVIC ACTIVITIES PAST AND CONTINUING 1. President Didier served as chairman of the Mayor's Fox River Task Force. He was also a member of the City Land Use Committee for three years. 2. One of our faculty members was a member of U-46 School Board for 15 years and served as chairperson of the board for 9 years. 3. The College annually is co-host of the Elgin Prayer Breakfast which is held on campus. 4. The College annually provides a luncheon for the Elgin area service clubs. 5. The College provides higher education experiences for all qualified community applicants. 6. The College offers concerts, plays and athletic events which are open to the public. 7. Many college graduates, not native to Elgin, end up as part of the city's effective workforce. 8. Judson's graduates provide the largest number of new teachers for U-46 School District of any school of higher education. 9. Every United Way agency has Judson students or graduates as part of their employee or volunteer force. 10. Every week Judson students provide free recreation and instruction activities on campus for children of low income area families. 11. Judson is a member of the Chamber of Commerce. 12. Judson every year encourages its employees to participate in the United Way with salutory results.