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TO: Mayor Irvin and City Council
FROM: Martin Lyons
Chief Financial Officer/City Treasurer
DATE: December 8, 2020
SUBJECT:
Intergovernmental Agreement with the Aurora Public Library District pertaining to the payment of outstanding library bonds.
PURPOSE:
The purpose of this IGA is threefold: to avoid double taxation of City residents for bond debt retirement for bonds issued for Library purposes (the Library Bonds); to confirm that, prospectively, the Aurora Public Library District has full responsibility for the levy of real estate taxes to retire the Library Bonds pursuant to a Final Judgment Order (Court Order) entered June 5, 2020; to confirm the intent of the City and the Library District that the County
Clerks extend real estate taxes to retire the Library Bonds as part of the Library District's Corporate Fund/General Fund tax levy.
BACKGROUND:
Until July 1, 2020, the Aurora Public Library was operated as an extension of the City under the Illinois Local Library Act. In 2011 and 2012, the City issued certain bonds for library purposes. In 2020, the Library converted to a local library district under the Public Library District Act of 1991 becoming a separate unit of local government from the City and acquiring its own taxing authority for library purposes. The Library Bonds, however remains obligations of the City, though the conversion contemplated that the Library District would levy sufficient real estate property taxes to retire the bonds on schedule.
DISCUSSION:
The City (contractually) and the Library District (pursuant to Court Order) currently have the obligation to levy for the library bonds - however, this obligation will result in double taxation if the City does not abate its levy for the bonds. To that end, the agreement contemplates that annually upon payment of the bonds by the Library District, the City will abate its levy for the same bonds.
IMPACT STATEMENT:
Approval of this IGA will eliminate the possibility of double taxation and further the purposes of the establishment of the Library District.
RECOMMENDATIONS:
That the Council approve the resolution and the attached intergovernmental agreement.
cc: Finance Committee
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution authorizing the execution of an intergovernmental governmental agreement with the Aurora Public Library District regarding the payment of certain general obligation bonds previously issued for library purposes.
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, prior to July 1, 2020, the City established and maintained a public library under and in accordance with provisions of the Illinois Local Library Act; and
WHEREAS, pursuant to Ordinance Number 011-058 passed November 8, 2011, the City authorized issuance of General Obligation Refunding Bonds, Series 2011 ($9.06 million) ($2.74 million for Library Purposes) with a tax levy to pay principal and interest on said bonds for Library Purposes; and
WHEREAS, pursuant to Ordinance Number 012-080 passed September 25, 2012, the City authorized issuance of General Obligation Library Bonds, Series 2012A ($19.2 million) with a tax levy to pay principal and interest on said bonds; and
WHEREAS, the bonds issued pursuant to the aforementioned ordinances, to the extent the issue was library purposes collectively constitute "Library Bonds" for the purposes of this Resolution; and
WHEREAS, on July 1, 2020, the library previously established and maintained by the City as converted to a public library district operating under the Public Library District Act of 1991 known as the Aurora Public Library District ("Library District"); and
WHEREAS, the conversion required the Library District to levy taxes on real property to pay the principal and interest on the aforementioned Library Bonds; and
WHEREAS, it is necessary and convenient for the City and the Library District to enter into an agreement among themselves to provide of the means of payment of the principal and interest on the Library Bonds and the abatement of duplicate tax levies to eliminate the potential of the double taxation of real property for the same purposes; and
WHEREAS, the City and Library District, have, consistent with the Constitution of the State of Illinois and the Intergovernmental Cooperation Act, negotiated intergovernmental agreement to provide for the same and said agreement is attached to and made a part of this Resolution as Exhibit A;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: that the intergovernmental agreement with the Library District set forth in Exhibit A shall be and hereby is approved; and further
BE IT RESOLVED that the Mayor and the Clerk shall forthwith execute the said intergovernmental agreement in substantially the same form as set forth in Exhibit A and transmit the same to the District.