County quick to sell bonds?

Action item at tonight’s (Wed. May 19, 2010) regular regular meeting of the DeKalb County Board:

Ordinance #2010-11: Supplemental Ordinance Providing for the Issuance of Not to Exceed $16,500,000.00 in General Obligation Alternate Bond of 2010. To Authorize the issuance of General Obligation Alternate Bond of 2010 for the purpose of financing the renovation and expansion of the County Courthouse including site improvements, equipment and furnishings, and the renovation and expansion of the County Jail site improvements, equipment and furnishings Committee Action: Moved by Ms. Tobias, seconded by Mr. Stoddard, and it was carried to forward this recommendation to the full board for approval.There were 7 yes votes and 1 no vote. Mr. Newport voted no.

Editor’s note: Tonight’s meeting is referred to as the regular regular meeting of the County Board because the Board held its regular meeting a week earlier so it could keep its master plan on schedule.Of course, the County Board could postpone the selling of the debt bonds until and unless they receive their first tipping fee…

The County Board authorized $45,000,000 principal amount of general obligation bonds for the purpose of financing costs associated with the renovation and expansion of the County Courthouse including site improvements, equipment and furnishings, and the renovation and expansion of the County Jail. Voters twice rejected the County Jail project at the polls but evidently some on the Board have decided that enough time has been wasted pandering to their constituents.

A petition seeking to force a public referendum on the issuance of the bonds was submitted to the County Clerk by Josh Bois. The petition was objected to by Michael D. Larson. An “Electoral Board” was convened on April 8, 2010 and it was ruled that Larson’s objection should be sustained and that the petition was invalid.

If approved the 2010 Bonds would be paid from the following sources:

• the sales tax receipts derived by the County from taxes imposed under the Use Tax Act, 35 Illinois Compiled Statutes 105, the Service Use Tax Act, 35 Illinois Compiled Statutes 110, the Service Occupation Tax Act, 35 Illinois Compiled States 115, and the Retailer’s Occupation Tax Act, 35 Illinois Compiled Statutes 120, including the 1% share of sales tax imposed in unincorporated areas of the County and the 1/4 of 1% supplemental sales tax imposed throughout the County (the “Sales Tax Receipts”);
• host community agreement fees to be paid to the County with respect to the DeKalb County Landfill currently operated by Waste Management of Illinois, Inc.; and
• any bond subsidy payments to be paid to the County by the United States Treasury Department with respect to the 2010 Bonds.

The principal of and premium, if any, on the 2010 Bonds shall be payable at the office of First National Bank of Omaha, in the City of Omaha, Nebraska, as bond registrar and paying agent for the 2010 Bonds. First National Bank of Omaha owns Castle Bank.

Taxpayers and County Board members who give a hoot should pay special attention to Section 7 of the Ordinance:

Section 7. General Obligations. The full faith and credit of the County are hereby irrevocably pledged to the punctual payment of the principal of and interest on the 2010 Bonds. The 2010 Bonds shall be direct and general obligations of the County, and the County shall be obligated to levy ad valorem taxes upon all the taxable property in the County for the payment of the 2010 Bonds and the interest thereon, without limitation as to rate or amount.

That’s right. Should anything go wrong like a recession having an adverse impact on sales tax revenue; or the Illinois Pollution Control Board, Illinois EPA or Illinois Appellate Courts ruling against WMI’s siting application then taxpayers are on the hook to repay the debt. In fact, the County will levy a property tax increase to pay the debt and then, assuming everything works out fine, they’ll abate the increase:

Section 10. Levy and Extension of Taxes. (A) For the purpose of providing the money required to pay the interest on the 2010 Bonds when and as the same falls due and to pay and discharge the principal thereof (including mandatory sinking fund installments) as the same shall mature, there is hereby levied upon all the taxable property in the County, in each year while any of the 2010 Bonds shall be outstanding, a direct annual tax sufficient for that purpose in addition to all other taxes, as follows:
Tax Levy Year A Tax Sufficient to Produce
2010 $1,400,000
2011 1,400,000
2012 1,400,000
2013 1,400,000
2014 1,400,000
2015 1,400,000
2016 1,500,000
2017 1,500,000
2018 1,500,000
2019 1,500,000
2020 1,500,000
2021 1,600,000
2022 1,600,000
2023 1,600,000
2024 1,600,000
2025 1,600,000
2026 1,600,000
2027 1,600,000
2028 1,600,000
(B) Interest or principal coming due at any time when there shall be insufficient funds on hand to pay the same shall be paid promptly when due from current funds on hand in advance of the collection of the taxes herein levied; and when said taxes shall have been collected, reimbursement shall be made to the said funds in
the amounts thus advanced.
(C) After the sale of the 2010 Bonds and the execution of the Bond Order, an executed copy of the Bond Order and a certified copy of this ordinance shall be filed with the County Clerk, which certificate shall recite that this ordinance has been duly adopted, and the County Clerk is hereby directed to ascertain the rate per cent required to produce the aggregate tax hereinbefore provided to be levied in the years 2010 to 2028, inclusive, and, subject to adjustment as provided in paragraph (D) of this Section, and to extend the same for collection on the tax books in connection with other taxes levied in said years, in and by the County for general corporate purposes of the County, and in said years such annual tax shall be levied and collected in like manner as taxes for general corporate purposes for said years are levied and collected and, when collected, such tax receipts (the “Tax Receipts”) shall be used for the purpose of paying the principal of and interest on the 2010 Bonds as the same become due and payable.
(D) In the event that 2010 Bonds are to be issued in principal amounts or maturity amounts and bearing interest such that for any tax levy year an amount less than that set forth in paragraph (A) of this Section is required to be produced to pay when due the principal of and interest on the 2010 Bonds, then the County Administrator is authorized and directed to file with the County Clerk, on or prior to the delivery of the 2010 Bonds, a direction for abatement of taxes specifying the exact amount of taxes to be levied to produce the required amounts for each of the various tax levy years.
(E) After the issuance of the 2010 Bonds, the County shall not abate the debt service taxes levied pursuant to this Section or take any action to restrict the extension and collection of those taxes except that the County may abate any such debt service taxes for any tax levy year to the extent that, at the time of such abatement, moneys then held in the 2010 Debt Service Fund established by this ordinance, or otherwise held in trust for the payment of debt service on the 2010 Bonds, together with the amount to be extended for collection taking into account the proposed abatement, will be sufficient to provide for the punctual payment of the principal of and interest on the 2010 Bonds otherwise payable from the debt service taxes levied for such tax levy year.

 

Meeting at 7:30pm Wed. May 19, 2010 at the Legislative Center.

Agenda