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TO: Mayor Richard C Irvin
FROM: Chris Minick, Chief Financial Officer/City Treasurer
DATE: December 2, 2024
SUBJECT:
An ordinance providing for the issue of not to exceed $40,000,000 of General Obligation Bonds of the City for the purpose of financing certain capital improvements, providing for the levy of taxes to pay the Bonds and authorizing the sale of the Bonds to the purchaser thereof.
PURPOSE:
To obtain the approval of the City Council of a proposed ordinance providing for the issuance of the Series 2025 A and B General Obligation (GO) Bonds.
BACKGROUND:
The City's Capital Improvements Plan and 2025 City Budget call for the financing of various capital projects through the issuance of General Obligation Bonds of the City. The major projects include initial construction costs for Fire Stations 9 and 13, River Edge Park expansion, Bilter Road Improvements, purchase of the Parking Garage located at 2 New York St and various other improvement projects.
The attached draft ordinance is the first official step in selling bonds to finance these projects. The ordinance is structured as a "parameters ordinance" and sets forth various conditions under which sale of the bonds is approved, providing the terms of the bonds are within certain parameters as defined in the ordinance. We have structured the ordinance to provide some flexibility to take advantage of the most beneficial bond structure given market conditions at the time of bond sale.
DISCUSSION:
We intend to sell the 2025 GO Bonds during late January/early February of 2025 to provide resources and financing for the aforementioned projects.
The final bond ordinance will be prepared after the bonds are sold and the exact bond related costs are known.
The bonds will be issued in 2 series. Series 2025 A will not exceed $25 million and will be issued as a tax exempt issue. These bonds are typically issued for general infrastructure projects. Series 2025 B will not exceed $15 million and will be taxable bonds utilized to finance the costs related to the Phase I ACCA sustainability plan that was approved earlier this year (purchase of the parking garage and reimbursement for Promenade Walkway and Stolp Island Theater).
We do anticipate that there will be a subsequent bond issuance later in 2025 to finance the ongoing construction costs and other projects. We are undertaking the 2 draws to minimize interest costs. Issuing bonds later in the year allows for the City to borrow the funds and pay the resultant interest only as the funds are needed for project drawdowns of construction funds.
IMPACT STATEMENT:
Adoption of the Ordinance will allow for the financing and timely construction of various capital improvements and projects as budgeted and planned by the City.
RECOMMENDATIONS:
That the City Council approve the attached, proposed ordinance that would authorize the issuance of the city’s 2025 A and B GO Bonds.
cc: Finance Committee
CITY OF AURORA, ILLINOIS
ORDINANCE NO. _________
DATE OF PASSAGE ________________
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An Ordinance providing for the issue of not to exceed $40,000,000 of General Obligation Bonds of the City for the purpose of financing certain capital improvements, providing for the levy of taxes to pay the Bonds and authorizing the sale of the Bonds to the purchaser thereof.
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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, pursuant to the provisions of Section 6 of Article VII of the Constitution of the State of Illinois, the City has the power to incur debt payable from ad valorem property tax receipts or from any other lawful source and maturing within forty (40) years from the time it is incurred without prior referendum approval; and
WHEREAS, the City Council of the City (the “City Council”) has considered the needs of the City and does hereby determine that it is necessary, desirable and in the best interests of the City to borrow at this time to finance capital projects in and for the City, including RIVER Edge Park expansion, fire station relocation and construction, and roadway intersection and other infrastructure projects, together with such engineering, electrical, financial, legal and other professional services related thereto as may be advisable and necessary (collectively, the “2025A Project”); and
WHEREAS, the City Council of the City (the “City Council”) has considered the needs of the City and does hereby determine that it is necessary, desirable and in the best interests of the City to borrow at this time to finance capital projects in and for the City, including the acquisition of a parking garage and Stolp Island Theater construction, and the rehabilitation of public pathways in the downtown, together with such engineering, electrical, financial, legal and other professional services related thereto as may be advisable and necessary (collectively, the “2025B Project”); and
WHEREAS, on the 28th day of August, 1973, the City Council did adopt Ordinance Number 4340 determining the procedures to be followed in the borrowing of money for public purposes of the City and in evidence of such borrowing for the issuing of full faith and credit bonds of the City without referendum approval, such ordinance being entitled:
An Ordinance of the City of Aurora, Illinois, establishing procedures to be followed in incurring indebtedness for corporate purposes, issuing nonreferendum bonds to evidence such indebtedness and authorizing and directing the levying of a tax, without limit as to rate or amount, for the purpose of paying principal and interest on such bonds as the same become due.
which ordinance was amended by Ordinance No. 085-5353, duly adopted by the City Council on March 19, 1985 (Ordinance No. 4340 as so amended, which is also known as Section 2-319 of Division 1 of Article V of Chapter 2 of the Code of Ordinances of the City, being referred to hereinafter as the “Enabling Ordinance”); and
WHEREAS, the City Council does hereby further determine that, in order to pay the costs of the Project, it is necessary, desirable and in the best interests of the City to borrow not to exceed $40,000,000 at this time and, in evidence of such borrowing, issue full faith and credit bonds of the City in the aggregate principal amount of not to exceed $40,000,000 (the “Bonds);
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Aurora, Illinois, as follows:
Section 1. Incorporation of Preambles. The City Council hereby finds that all of the recitals contained in the preambles to this Ordinance are true, correct and complete and does incorporate them into this Ordinance by this reference.
Section 2. The City Council hereby adopts the attached Ordinance,
An ordinance providing for the issue of not to exceed $40,000,000 of General Obligation Bonds of the City for the purpose of financing certain capital improvements, providing for the levy of taxes to pay the Bonds and authorizing the sale of the Bonds to the purchaser thereof.