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S36-04 CITY OF ELGIN ORDINANCE NO. S36-04 ORDINANCE AUTHORIZING THE ISSUANCE AND SALE BY THE CITY OF ELGIN,KANE AND COOK COUNTIES,ILLINOIS OF NOT TO EXCEED$15,000,000 ADJUSTABLE RATE DEMAND EDUCATIONAL FACILITY REVENUE BONDS, SERIES 2004(HARVEST CHRISTIAN ACADEMY PROJECT)FOR THE PURPOSE OF FINANCING OR REFINANCING ALL OR A PORTION OF THE COSTS OF ACQUIRING,CONSTRUCTING,RENOVATING AND EQUIPPING CERTAIN EDUCATIONAL FACILITIES TO BE LOCATED IN ELGIN,ILLINOIS,FOR THE BENEFIT OF HARVEST BIBLE CHAPEL;AUTHORIZING THE EXECUTION AND DELIVERY OF AN INDENTURE OF TRUST TO SECURE THE BONDS,A LOAN AGREEMENT UNDER WHICH THE PROCEEDS OF THE BONDS WILL BE LOANED TO THE BORROWER,A TAX EXEMPTION CERTIFICATE AND AGREEMENT PERTAINING TO THE TAX EXEMPTION OF THE BONDS,AND A BOND PURCHASE AGREEMENT AUTHORIZING THE UNDERWRITING OF THE BONDS; AUTHORIZING THE DELIVERY OF A OFFICIAL STATEMENT RELATING TO THE BONDS;AND RELATED MATTERS. r PASSED BY THE CITY COUNCIL OF THE CITY OF ELGIN ON THIS 15TH DAY OF DECEMBER 2004 Published in pamphlet form by authority of the City Council of the City of Elgin, Kane and Cook Counties, Illinois, on this r' 16th day of December 2004. STATE OF ILLINOIS ) ) ss. COUNTY OF KANE ) CERTIFICATE I, Dolonna Mecum, certify that I am the duly appointed and acting municipal clerk of the City of Elgin, Cook and Kane Counties, Illinois. I further certify that on December 15, 2004, the Corporate Authorities of such municipality passed and approved Ordinance No. S36-04, which provided by its terms that it should be published in pamphlet form. The pamphlet form of Ordinance No. S36-04, including the Ordinance and a cover sheet thereof, was prepared, and a copy of such Ordinance was posted in the municipal building commencing on December 16, 2004, and continuing for at least ten days thereafter. Copies of such Ordinance were also available for public inspection upon request in the office of the municipal clerk. DATED at Elgin, Illinois, on December 16, 2004. Municipal Clerk (SEAL) r • ORDINANCE No. S36-04 ORDINANCE AUTHORIZING THE ISSUANCE AND SALE BY THE CITY OF ELGIN,KANE AND COOK COUNTIES,ILLINOIS OF NOT TO EXCEED $15,000,000 ADJUSTABLE RATE DEMAND EDUCATIONAL FACILITY REVENUE BONDS, SERIES 2004(HARVEST CHRISTIAN ACADEMY PROJECT)FOR THE PURPOSE OF FINANCING OR REFINANCING ALL OR A PORTION OF THE COSTS OF ACQUIRING,CONSTRUCTING,RENOVATING AND EQUIPPING CERTAIN EDUCATIONAL FACILITIES TO BE LOCATED IN ELGIN,ILLINOIS,FOR THE BENEFIT OF HARVEST BIBLE CHAPEL; AUTHORIZING THE EXECUTION AND DELIVERY OF AN INDENTURE OF TRUST TO SECURE THE BONDS,A LOAN AGREEMENT UNDER WHICH THE PROCEEDS OF THE BONDS WILL BE LOANED TO THE BORROWER,A TAX EXEMPTION CERTIFICATE AND AGREEMENT PERTAINING TO THE TAX EXEMPTION OF THE BONDS,AND A BOND PURCHASE AGREEMENT AUTHORIZING THE UNDERWRITING OF THE BONDS; AUTHORIZING THE DELIVERY OF A OFFICIAL STATEMENT RELATING TO THE BONDS;AND RELATED MATTERS. WHEREAS, the City of Elgin, Kane and Cook Counties, Illinois (the "Issuer"), is a home rule unit of government duly organized and existing under the Constitution and laws of the State of Illinois and is authorized by the laws of the State of Illinois, and particularly the provisions of Section 6(a) of Article VII of the 1970 Constitution of the State of Illinois, the Illinois Municipal Code, as amended, and the Ordinance Establishing the Policy and Procedural Guidelines for the Issuance of Educational Facility Revenue Bonds for Private Educational Facilities adopted by the City Council of the Issuer on this date (such powers, code and enabling ordinance, collectively, being the "Act"), to issue its revenue bonds to defray the cost of acquiring, constructing, renovating and equipping of educational facilities for qualifying borrowers under the Act; and WHEREAS, the Issuer has determined it necessary and advisable to finance or refinance costs of acquiring, constructing, renovating and equipping certain educational facilities (the "Project") for Harvest Bible Chapel, an Illinois not for profit corporation (the "Borrower") located at 1000 North Randall Road (formerly 1 Brinkman Way) in Elgin, Illinois including, without limitation, the conversion of a portion of an approximately 300,000 square foot building (formerly housing the Safety-Kleen corporate headquarters) for use as a school known as Harvest Christian Academy and the construction of a gymnasium and cafeteria for the school; and WHEREAS, the Project will be located within the corporate limits of, and will benefit the Issuer; and WHEREAS, the Issuer has now determined that it is necessary and in the public interest for the Issuer to issue its Adjustable Rate Demand Educational Facility Revenue Bonds, Series 2004 (Harvest Christian Academy Project) (the "Bonds") in an aggregate principal amount not to exceed $15,000,000 to finance or refinance costs of the Project; and WHEREAS, the City Council of the Issuer (the "City Council") is the elected legislative body of the Issuer and is an applicable elected representative required to approve the issuance of the Bonds within the meaning of Section 147(f) of the Internal Revenue Code of 1986, as amended (the"Code"); and ! WHEREAS, notice of a public hearing with respect to the proposed issuance of the Bonds was published on November 29, 2004 in the Elgin Courier News, a newspaper of general circulation in the City of Elgin, Illinois; and WHEREAS, on December 15, 2004, a public hearing was held with respect to the Project and the proposed issuance of the Bonds, at which hearing all interested persons were given an opportunity to appear and be heard, pursuant to the requirements of Section 147(f) of the Code; and WHEREAS, it is necessary and desirable that the Issuer and the Borrower enter into a Loan Agreement (the "Loan Agreement"), a proposed form of which is before the City Council at this meeting, whereby the Issuer will loan the proceeds of the Bonds to the Borrower in order to finance and refinance costs of the Project, and the Borrower will agree to make payments sufficient to provide for the payment of principal and purchase price of, premium, if any, and interest on and other amounts payable on the Bonds, as and when the same become due and payable, which obligations will be evidenced by the Borrower's Promissory Note (the "Note") to the Issuer, to be assigned to the Trustee (defined below); and WHEREAS,it is necessary and desirable that the Bonds be issued under and secured by, an Indenture of Trust (the "Indenture"), a proposed form of which is before the City Council at this meeting, between the Issuer and J.P. Morgan Trust Company, National Association, as trustee (the "Trustee"); and WHEREAS, it is necessary and desirable that the Issuer enter into a Bond Purchase Agreement (the "Bond Purchase Agreement") among B.C. Ziegler and Company (the "Underwriter"), the Borrower and the Issuer, a proposed form of which is before the City Council at this meeting, under which the Underwriter will agree to underwrite the Bonds upon their initial issuance and delivery; and WHEREAS, it is necessary and desirable that the Issuer approve the appointment of B.C. Ziegler and Company (or any affiliated entity) as Remarketing Agent under the Indenture (the "Remarketing Agent"); and WHEREAS, it is necessary and desirable that the Issuer approve, execute and deliver a Official Statement relating to the Bonds (the "Official Statement"), a proposed form of which is before the City Council at this meeting, distributed in connection with the marketing of the Bonds; and WHEREAS, it is necessary and desirable for the Issuer, the Borrower and the Trustee to enter into a Tax Exemption Certificate and Agreement, to be dated the date of issuance of the Bonds (the "Tax Agreement") a proposed form of which is before the City Council at this meeting, governing the investment of the gross proceeds of the Bonds and certain other matters relating to the federal tax exemption of interest on the Bonds; and WHEREAS, the Bonds will be initially supported by an Irrevocable Direct Pay Letter of Credit (the "Letter of Credit") of Fifth Third Bank (the "Bank"), which Letter of Credit will -2- , rsupport payment of the principal and purchase price of and interest on the Bonds until expiration C or termination of the Letter of Credit in accordance with its terms; Now, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ELGIN, KANE AND COOK COUNTIES, ILLINOIS, IN THE EXERCISE OF ITS HOME RULE POWERS, AS FOLLOWS: Section 1. Pursuant to the Act, the financing and refinancing of the costs of the Project through the issuance and sale of the Bonds in accordance with the terms of the Loan Agreement and the Indenture are hereby authorized and approved, it hereby being determined that such borrowing of money is necessary for the welfare of the government and affairs of the Issuer. The use of the proceeds of the Bonds to finance or refinance costs of the Project is in furtherance of the public purposes set forth in the Act to provide a financing device which will aid in financing the cost of Educational Facilities (as defined in the Act); the Project will perform the essential public purpose of educating students, thereby substantially relieving the burden on state and local governments and the taxpayers located in the Issuer to provide for the education of such students. The City Council hereby finds and determines: (i) that the Loan Agreement constitutes a Financing Agreement (within the meaning of the Act), the Borrower is an Educational Institution (within the meaning of the Act) and the Project is an Educational Facility(within the meaning of the Act); (ii) that, in reliance on information provided by the Borrower, the Project does not include any property used or to be used primarily as a place for devotional activities or religious worship nor any property which is used or to be used primarily in connection with any part of the program of a school or department of divinity for a religious denomination or the training of ministers, priests, rabbis or other professional persons in the field of religion; (iii) that one or more public purposes set forth in Section 3 of the Act are being met by the issuance of the Bonds; (iv) that the expenses incurred by or on behalf of the Issuer in connection with the issuance of the Bonds or the financing or refinancing of the Project are being paid or reimbursed by the Borrower, or provision for such payment or reimbursement by the Borrower has been made to the satisfaction of the Issuer; and (v) that, based on information supplied by the Borrower, the Borrower is financially able to pay the full amount of debt service on the Bonds or has provided adequate credit enhancement for the Bonds (provided that no such finding may be used or relied upon by prospective purchasers of the Bonds in determining whether to purchase the Bonds). Section 2. The Indenture, in substantially the form presented at this meeting and on file with the City Clerk and containing substantially the terms and provisions set forth therein, is -3- hereby authorized, approved and confirmed, and the form, terms and provisions of the Indenture are hereby approved, with such changes and revisions therein as shall be approved by the officers of the Issuer executing and attesting the same, their signatures thereon to constitute conclusive evidence of such approval, and the Mayor and the City Clerk of the Issuer are hereby authorized and directed to execute, attest, seal and deliver the Indenture. Section 3. The Loan Agreement (including the form of Note), in substantially the form presented at this meeting and on file with the City Clerk and containing substantially the terms and provisions (including repayment provisions) set forth therein, is hereby authorized, approved and confirmed, and the form, terms and provisions of the Loan Agreement are hereby approved, with such changes and revisions therein as shall be approved by the officers of the Issuer executing and attesting the same, their signatures thereon to constitute conclusive evidence of such approval, and the Mayor and the City Clerk are hereby authorized and directed to execute, attest, seal and deliver the Loan Agreement, and the Mayor is hereby authorized and directed to endorse and assign the Note to the Trustee. Section 4. The Tax Agreement in substantially the form presented at this meeting and on file with the City Clerk and containing substantially the terms and provisions set forth therein, is hereby authorized, approved, and confirmed, and the form, terms and provisions of the Tax Agreement are hereby approved with such changes and revisions therein as shall be approved by the Mayor of the Issuer, his signature thereon to constitute conclusive evidence of such approval, and the Mayor is hereby authorized and directed to execute and deliver the Tax Agreement. Section 5. The Bond Purchase Agreement, in substantially the form presented at this meeting and on file with the City Clerk and containing substantially the terms and provisions set forth therein, is hereby authorized, approved and confirmed, and the form, terms and provisions of the Bond Purchase Agreement are hereby approved, with such changes and revisions therein as shall be approved by the Mayor of the Issuer, his signature thereon to constitute conclusive evidence of such approval, and the Mayor is hereby authorized and directed to execute the Bond Purchase Agreement. Section 6. B.C. Ziegler and Company (or an affiliated entity), is hereby appointed to act as Remarketing Agent under the Indenture, subject to such provisions of the Indenture pertaining to resignation and removal of the Remarketing Agent. Section 7. The distribution by the Underwriter of the Official Statement (and if deemed necessary or desirable by the Underwriter, a Preliminary Official Statement) relating to the Bonds in substantially the form presented at this meeting and on file with the City Clerk is hereby in all respects authorized, ratified and approved. The Official Statement (and Preliminary Official Statement, if any) may contain such changes from the form presented at this meeting as shall be approved by the officers of the Issuer, their signatures on the Loan Agreement to constitute conclusive evidence of such approval. Section 8. The Mayor of the Issuer is hereby authorized, empowered and directed to cause to be prepared an issue of not to exceed $15,000,000 aggregate principal amount of the Bonds of the Issuer, bearing interest initially at the Weekly Interest Rate, and thereafter at the -4- Weekly Interest Rate, One Month Interest Rate, Three Month Interest Rate, Six Month Interest Rate, One Year Interest Rate, Five Year Interest Rate or Fixed Interest Rate (as such terms are defined in the Indenture). The interest rate on the Bonds shall be determined in accordance with the Indenture by the Remarketing Agent, in no event however to exceed 10% per annum. At the option of the Borrower, the interest rate on the Bonds may be converted from one interest rate mode to another as provided in the Indenture. Interest on the Bonds shall be payable on such dates as shall be set forth in the Indenture. The Bonds shall be designated "City of Elgin, Kane and Cook Counties, Illinois Adjustable Rate Demand Educational Facility Revenue Bonds, Series 2004 (Harvest Christian Academy Project)" or such other designation set forth in the Indenture. The Bonds shall be issued in the denominations provided in the Indenture. The Bonds shall be dated the date of their initial issuance and delivery, shall mature no later than 35 years from their date of issuance, shall be in fully registered form, shall be subject to optional and mandatory redemption and optional and mandatory tender in accordance with the terms and provisions of the Indenture, and shall have such other terms and provisions as specified in the Indenture to be included therein. The Bonds shall be executed in the name of the Issuer with the manual or facsimile signature of the Mayor of the Issuer and attested with the manual or facsimile signature of the City Clerk of the Issuer, and the seal of the Issuer shall be affixed thereto or imprinted thereon. Section 9. The Bonds shall be limited obligations of the Issuer payable solely out of the revenues and receipts derived from the Loan Agreement, from Bond proceeds, the Letter of Credit and funds pledged under the Indenture. No holder of any Bond has the right to compel any exercise of the taxing power of the Issuer to pay the Bonds, the interest or premium, if any, thereon, or any other amount with respect thereto and the Bonds shall not constitute an indebtedness of the Issuer or a loan of credit thereof within the meaning of any constitutional or statutory provision. It shall be plainly stated on the face of each Bond that it does not constitute an indebtedness of the Issuer or a loan of credit thereof within the meaning of any constitutional or statutory provision and does not create any legal or moral obligation on behalf of the Issuer to repay the same except out of the revenues and sources specified above. Under no circumstances shall the Issuer expend any of its own revenues or taxpayer funds (other than the specific revenues pledged under the Indenture) to the payment of the Bonds. Section 10. The form of Bond submitted to this meeting, subject to appropriate insertion and revision in order to comply with the provisions of the Indenture, be, and the same hereby is, approved, and when Bonds in such form shall be executed on behalf of the Issuer in the manner contemplated by the Indenture and this Ordinance, it shall represent the approved definitive form of the Bonds of the Issuer. Section 11. Subject to compliance with the conditions set forth in the Act, the Issuer is hereby authorized, empowered and directed to issue and sell to the Underwriter the entire aggregate principal amount of the Bonds, at a price of 100% of the principal amount thereof less any underwriter's discount in an amount not to exceed 2% of the principal amount thereof Section 12. The Mayor and the City Clerk of the Issuer are hereby authorized and directed to execute, attest, seal and deliver any and all documents and do any and all things -5- deemed necessary to effect the issuance and sale of the Bonds, the execution and delivery of the Loan Agreement, the Indenture, the Bond Purchase Agreement, the Tax Agreement and the Official Statement, the issuance of the Letter of Credit by the Bank and to carry out the intent and purposes of this Ordinance, including the preambles hereto. In the absence of the Mayor or City Clerk of the Issuer, any officer of the Issuer so authorized by law may perform any of the actions required hereby in lieu of the Mayor or City Clerk, as the case may be. Section 13. The Bonds may be initially issued in book-entry form and registered in the name of The Depository Trust Company, New York, New York ("DTC"), or its nominee, as securities depository for the Bonds. The Mayor and/or the City Clerk are hereby authorized, empowered and directed to execute and deliver an agreement with DTC and any other necessary parties in order to effect such book-entry registration. Section 14. This Ordinance shall constitute the approval by the City Council of the Issuer of the issuance of the Bonds pursuant to Section 147(f) of the Internal Revenue Code of 1986. Section 15. No member of the City Council or other official of the Issuer has any pecuniary interest in any employment, financing, agreement or other contract made in connection with the Bonds, the Project or the Borrower or any affiliated entity. Section 16. All acts of the officials of the Issuer which are in conformity with the purposes and intent of this Ordinance and in furtherance of the issuance and sale of the Bonds and the Project be, and the same hereby are, in all respects, approved and confirmed. Section 17. After the Bonds are issued, this Ordinance shall not be repealable until the Bonds and the interest thereon shall have been fully paid, cancelled and discharged. Section 18. The provisions of this Ordinance are hereby declared to be separable and if any section, phrase or provision shall for any reason be declared to be invalid, such declaration shall not affect the validity of the remainder of the sections, phrases and provisions. Section 19. All ordinances, ordinances and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. Section 20. This Ordinance shall become effective immediately upon passage. PASSED,APPROVED AND RECORDED IN CITY RECORDS this 15th day of December, 2004. AYES: COUNCILMEMBERS FIGUEROA, GILLIAM, RODGERS, SANDOR, WALTERS, AND MAYOR SCHOCK NAYS: ABSENT OR NOT VOTING: -6- Published in pamphlet form by the City Council on December 16, 2004 CITY OF ELGIN,KANE AND COOK COUNTIES,ILLINOIS Mayor [SEAL] ATTEST: City Clerk -7-