Title
ORDINANCE AUTHORIZING THE ISSUANCE OF BOND ANTICIPATION NOTES IN AN AMOUNT NOT TO EXCEED $50,000,000 UNDER A LINE OF CREDIT
Body
To: The Honorable Board of Commissioners of the Chicago Park District
I. Recommendation
It is recommended that the Board of Commissioners (the “Board”) of the Chicago Park District (the “District”) adopt an ordinance authorizing the District to issue Bond Anticipation Notes (the “BANs”) in an amount not to exceed $50,000,000 under a line of credit for the purpose of paying and reimbursing a part of the cost of building, maintaining, and improving parks as part of the District’s capital program and the payment of capitalized interest and the costs of issuing the notes.
The ordinance also authorizes the execution of a line of credit agreement and other documents in connection with the issuance of BANs as well as the security for repayment of the BANs by the issuance of bonds in the near future. The General Superintendent and authorized officers of the District are delegated the authority to do, or cause to be done, all things necessary for the execution and establishment of a line of credit program.
A. Background
On June 23, 2017, the District issued a Request for Proposal for a Revolving Line of Credit/Direct-Pay Letter of Credit (the “RFP”), which was forwarded to 15 banks and/or financial institutions with a response due date of July 28, 2017.
The District received six responses. After analysis of the proposals by the District’s financial advisor, the District chose PNC Bank, National Association based on competitive pricing on rates as well as the risks associated with bond ratings.
I. Recommendation (continued)
B. Key Terms and Conditions
PNC Bank National Association
Maximum Amount $50,000,000
Term 1 year, with a subsequent 180 day loan for the current balance
Tax-Exempt Rate - Used 70% LIBOR + 0.65%
Unused 0.10%
Taxable Rate - Used LIBOR + 1.00%
Unused 0.10%
Minimum Draw $2,000,000
Governing Law Illinois
II. Transaction Team
Special Tax Counsel: Foley & Lardner LLP
321 North Clark Street
Suite 2800
Chicago, IL 60654
Issuer’s Counsel: Hardwick Law Firm
321 North Clark Street
Suite 500
Chicago, Illinois 60654
II. Transaction Team (continued)
Independent Registered
Municipal Advisor for the
District: Speer Financial, Inc.
One North LaSalle Street, Suite 4100
Chicago, Illinois 60602
Bank and/or
Financial Institution: PNC Bank, National Association
PNC Centre, One North Franklin, Suite 2800
Chicago, Illinois 60606
PNC Bank National Association’s
Counsel(s): Thompson Colburn LLP
55 E. Monroe Street, 37th Floor
Chicago, Illinois 60603
III. Budget and Financial Information
A. Use of Proceeds
Budget Classification: Capital Funds
Fiscal Year(s): 2016 and 2017 Capital Improvement Plans
Source of Funds: Draw-downs from Line of Credit
III. Budget and Financial Information (continued)
B. Repayment Information
Budget Classification: General Funds
Fiscal Year(s): NA
Note Interest Payments: Capitalized Interest
Source of Funds for
Payment at Maturity: Issuance of bonds which will result in a Debt Service Expense-Property Tax Levy
IV. Explanation
A. Authorization
The District is authorized to issue BANs under and pursuant to Section 20b of the Chicago Park District Act, 70 ILCS 1505 and the Local Government Debt Reform Act, 30 ILCS 350.
B. Utilization of the BANs Under the Line of Credit
§ Eliminates the need to go into the market twice in a calendar year to issue long-term debt
§ Interest only until maturity
§ Modest costs of issuance and related time management savings
§ Meets the timeline needs of District’s capital program
V. General Conditions
1. Conflicts: No agreement authorized herein shall be legally binding on the Chicago Park District if entered into in violation of the provisions of the Public Officer Prohibited Activities Act, 50 ILCS 105/0.01 et seq.
2. Ethics: The Chicago Park District’s Ethics Code, Chapter III of the Code of the Chicago Park District, shall be incorporated into and made part of all agreements authorized herein.