cover
TO: Mayor Richard C. Irvin
FROM: Martin S. Lyons, Chief Financial Officer/City Treasurer
DATE: November 21, 2018
SUBJECT:
An Ordinance of the City of Aurora, Kane, DuPage, Kendall and Will Counties, Illinois, Providing for the Issuance of Tax Increment Revenue Bonds, Series 2018B in an Aggregate Principal Amount of $3,540,000, and Related Matters - Finance Committee Agenda Item - October 9, 2018 Meeting.
PURPOSE:
To obtain the approval of the City Council of a proposed ordinance providing for the issuance of the City of Aurora Series 20018B Tax Increment Finance (TIF) Revenue Bonds.
BACKGROUND:
In August 2008, the City issued Revenue Bonds from TIF District 3 in the amount of $7,265,000. The remaining bonds of $3,345,000 are now callable, and the refinancing of these bonds will reduce the remaining debt service costs by an estimated $440,000 through 2023. The district consists of approximately 40 acres and is located just south of the city’s downtown. It is generally bounded by Benton Street on the north, LaSalle Street and Broadway on the east, North Avenue on the south, and Middle Avenue on the west. The district was established to attract residential, commercial, and other mixed-use projects to redevelop underutilized land.
DISCUSSION:
The City reviews the total debt portfolio each year to monitor current interest rates for bonds compared to the interest rates in place when bonds are originally issued. Similar to the refinancing of a “mortgage”, the City can refinance previously issued bonds to accomplish savings or debt restructuring goals within the total economic development and capital infrastructure programs currently in place. The refinancing of the 2008B TIF Revenue bonds does not contemplate any restructuring of the debt through either the extension of the debt for a longer period of time or through a change in the timing of principle payments. This refinancing will focus on interest rate and cash flow savings resulting in an estimated savings of $440,000%.
Attachment 1 is the original Council report from 2008 for the original issuance of these bonds.
We intend to sell the 2008B Tax Increment Revenue Bonds on November 27, 2018. The bonds will have the same maturity schedule as the current 2008B bonds and will be sold through a negotiated sale (the 2008B Bonds were also sold on a negotiated basis).
Attached is a draft bond ordinance. The final bond ordinance will be prepared after the bonds are sold and the exact interest costs are known.
IMPACT STATEMENT:
If the refunding is not done, the City will pay higher debt service costs for the remaining life of the bonds.
RECOMMENDATIONS:
That the City Council approve the attached, proposed ordinance that would authorize the issuance of the city’s 2018B Tax Increment Finance Revenue Bonds.
cc: Robert J. O’Connor, Alderman
Theodoros C. Mesiacos, Alderman
Edward J. Bugg, Alderman
Alex Alexandrou, Chief Management Officer
Wendy A. McCambridge, City Clerk
Richard Veenstra, Corporation Counsel
CITY OF AURORA, ILLINOIS
ORDINANCE NO. _________
DATE OF PASSAGE ________________
title
An Ordinance of the City of Aurora, Kane, DuPage, Kendall and Will Counties, Illinois, providing for the issuance of Tax Increment Revenue Refunding Bonds, Series 2018B (River City TIF Number 3) in an aggregate principal amount of $__________, for the purpose of refunding certain bonds heretofore issued by the City and now outstanding, and authorizing the sale of said bonds to the purchasers thereof.
body
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,
The Bond Ordinance is Attached.
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Aurora, Illinois, as follows: .