Loading...
HomeMy WebLinkAboutOrd 4276 03/05/1991 ORDINANCE NO. 4276 AN ORDINANCE AUTHORIZING THE EXECUTION AND DELIVERY OF AN INTERGOVERNMENTAL COOPERATION AGREEMENT AND REALLOCATION OF PRIVATE ACTIVITY BOND VOLUME CAP IN CONNECTION WITH THE ISSUANCE OF CERTAIN SINGLE FAMILY MORTGAGE REVENUE BONDS AND RELATED MATTERS PASSED AND APPROVED BY THE PRESIDENT AND BOARD OF TRUSTEES the 5th day of March , 1991 Published in pamphlet form by authority of the corporate authorities of the Village of Mount Prospect, Illinois, the llth day of March , 1991. ORDINANCE NO. 4276 AN ORDINANCE authorizing the execution and delivery of an Inter- governmental Cooperation Agreement and reallocation of private activity bond volume cap in connection with the issuance of certain Single Family Mortgage Revenue Bonds and related matters. WHEREAS, Section 10 of Artiele VII of the Constitution of the State of Illinois authorizes units of local government and school districts to contract or otherwise associate among themselves in any manner not prohibited by law or by ordinances, and to use their eredlt, revenues and other reserves to pay cash and to service debt related to intergovernmental activities; and WHEREAS, the Intergovernmental Cooperation Act (Illinois Revised Statutes 1989, Chapter 172, Paragraph 741 e_~t seq., as supplemented and amended) authorizes publie agencies to exercise jointly with any other public agency in the State of Illinois any power, privilege or authority which may be exercised by such public agency individually; and WHEREAS, the Village of Mount Prospect, Cook County, Illinois (the "Municipality") is a home-rule unit of local government and a public agency of the State of Illinois; and WHEREAS, pursuant to the Constitution of the State of Illinois, and partieularly Article VII, Section 6(a) of the 1970 Constitution of the State of Illinois, the' Municipality has the power to issue its revenue bonds for public purposes including the financing and purchase of mortgage loans or interests therein to finance the cost of residences for low and moderate income persons within its corporate boundaries, and to pledge to the payment of the principal of, premium, if any, and interest on such revenue bonds the payments made with respect to the mortgage loans purchased with and financed by the proceeds of such revenue bonds; and WHEREAS, pursuant to Section 146 of the Internal Revenue Code of 1986 (the "Code") bonds issued for the purpose described in the preceding paragraph may not be issued on a tax-exempt basis unless the aggregate principal amount of such bonds issued by any issuer is within such issuar*s "volume capt* for the ealendar year; and WHEREAS, pursuant to Section 146 of the Code and the relevant provisions of the Illinois Private Activity Bond Alloeation Act (the 'tBond Allocation Act'*) prior to a specified date each year, the '*volume cap~ of the Municipality is limited to $50 multiplied by such Municipality's population based on the most recent census estimate released prior to January 1 of that calendar year; and WHEREAS, pursuant to the Bond Allocation Act and the earrent Guidelines and Procedures issued thereunder (the '~G~idelines~), the Municipality may reallocate its volume cap to another municipality; and WHEREAS, the Municipality hereby finds and determines that it cannot individually access the capital markets on favorable terms through the issuance of tax- exempt mortgage revenue bonds due to the limitations on the aggregate principal amount of such bonds which may be issued under the Munieipalitfs ~'volume cap" authority; and WHEREAS, the Municipality hereby finds and determines that the pooling of all of the ~'volume cap" authority of the Municipality and certain other municipalities for 1991 and the reallocation of all of such authority to a single governmental entity would permit that governmental entity to issue tax-exempt mortgage revenue bonds to finance residences for low and moderate income persons within the corporate boundaries of all of the municipalities in an aggregate principal amount of sufficient size to adequately access the capital markets at a favorable interest rate~ and WHEREAS, it is now determined that it is necessary, desirable and in the public interest for the Municipality to enter into an Intergovernmental Cooperation Agreement (the '~Cooperation Agreementtt) dated as of February 1, 1991, by and among the Municipality and the other municipalities listed therein, to effect the purposes described in the preceding paragraph and a form of such Cooperation Agreement is currently before this President and Board of Trustees; and WHEREAS, the MuniciPality proposes to realloeate its 1991 "volume cap" to a governmental entity to be specified in the Cooperation Agreement (as executed), which governmental entity shall either be a home-rule unit of local government which is a party to the Cooperation Agreement or an Illinois state agency empowered to issue single family mortgage revenue bonds (such governmental entity being herein referred to as the "Issuer") so that the Issuer may use its best efforts to issue, sell and deliver its Single Family Mortgage Revenue Bonds, Series 1991 (the "Bonds") in order to obtain funds to finance the cost of one to no more than four family residences for low and moderate income persons within the corporate boundaries of each of the participating municipalities; NOW, THEREFORE, Be It Ordained by the President and Board of Trustees of the Village of Mount Prospect, Cook County, Illinois, as follows: Seetion 1. That the form, terms and provisions of the proposed Coopera- tion Agreement be, and they are hereby, in all respects approved; that the President of the Municipality be, and is hereby, authorized, empowered and directed to execute, and the Village Clerk of the Municipality be, and is hereby, authorized, empowered and directed to attest and to affix the official seal of the Municipality to, the Cooperation Agreement in the name and on behalf of the Munieipality, and thereupon to cause the Cooperation Agreement to be delivered to the other parties thereto; that the Cooperation Agreement is to be in substantially the form presented to and before this meeting and hereby approved or with such changes therein as shall be approved by the officer of the Municipality executing the Cooperation Agreement, his execution thereof to constitute conclusive evidence of his approval of any and all changes or revisions therein from the form of Cooperation Agreement before this meeting; that from and after the execution and delivery of the Cooperation Agreement, the officers, officials, agents and employees of the Municipality are hereby authorized, empowered and directed to do all such acts and things and to execute all such documents as may be necessary to -3- carry out and comply with the provisions of the Cooperation Agreement as executed; and that the Cooperation Agreement shall constitute and is hereby made a part of this authorizing ordinance and a copy of the Cooperation Agreement shall be placed in the official records of the Municipality and shall be available for public inspection at the principal office of the Municipality. Section 2. That the President, the Village Clerk and the proper officers, officials, agents and employees of the Municipality are hereby authorized, empowered and directed to do all such acts and things and to execute all such documents and certificates as may be necessary to carry out and comply with the provisions of the Cooperation Agreement and the transactions contemplated by this authorizing ordinance including the preambles hereto. Section 3. That all acts of the officers, officials, agents and employees of the Issuer heretofore or hereafter taken, which are in conformity with the purposes and intent of this authorizing ordinance and in furtherance of the issuance and sale of the Bonds, and the same hereby are, in all respects, ratified, confirmed and approved. Section4. That the Municipality hereby authorizes and directs the President and the Village Clerk of the Municipality (or any other officer or official of the Municipality) to take any and all actions required by the Illinois Private Activity Bond Allocation Act and the Guidelines which are necessary to effect a reallocation of the Municipality's 1991 private activity bond allocation to the Issuer in order that the Issuer may use its best efforts to issue the Bonds for the purposes described herein, such reallocation to be effective only upon the effective date of the Cooperation Agreement. Section 5. The President and Board of Trustees of the Municipality hereby approves the issuance of the Bonds for the purpose of financing a single family mortgage program for the purchase of one to not more than four family residences in the Municipality and the other municipalities that are a party to the Cooperation Agreement, in an aggregate principal amount of not to exceed $70,000,000. The President and other -4- fficers of me Municipality are hereby authorized and directed to take such further actions, if any, as are necessary to provide the public approval of the Bonds by the Municipality under Section 147(0 of the Code. Section 6. That after the Bonds are. issued, this authorizing ordinance shall be and remain irrepealable until the Bonds and the interest thereon shall have been fully paid, cancelled and diseharged. Section 7. That the provisions of this authorizing ordinance are hereby declared to be separable, and if any section, phrase or provision of this authorizing ordi- nance shall for any reason be declared to be invalid, such declaration shall not affect the validity of the remainder of the sections, phrases and provisions of this authorizing ordinance. Seotion 8. That all ordinances, resolutions and orders, or parts thereof, in conflict with the provisions of this authorizing ordinance are, to the extent of such conflict, hereby superseded. Presented, passed, approved and recorded by the President and Board of Trustees of the Village of Mount Prospect, Cook County, Illinois, this §th day of March ., 1991. / [SEAL] Attest: Village Clerk Ayes: Arthur_ Busse. Corcoran. Floros. Van Geem, Weibel Nays: None Absent or Not Voting: None -$- auserl/nat~ ~990-a/4/012391 INTERGOVERNMENTAL COOPERATION AGREEMENT Dated as of February 1, 1991 INTERGOVERNMENTAL COOPERATION AGREEMENT THIS INTERGOVERNMENTAL COOPERATION AGREEMENT (the "Cooperation Agreement") dated as of February 1, 1991, by and among the municipalities and home rule units of government duly organized and validly existing under the Constitution and the laws of the State of Illinois which have executed this Cooperation Agreement (each sueh municipality being referred to herein as a "Municipality" and all such municipalities being collectively referred to as the "Municipalities"); WITNESSETH: WHEREAS, Section 10 of Article VII of the Constitution of the State of Illinois authorizes units of local government and school districts to contract or otherwise associate among themselves in any manner not prohibited by law or by ordinances, and to use their credit, revenues and other reserves to pay cash and to service debt related to intergovernmental activities; and WHEREAS, the Intergovernmental Cooperation Act (Illinois Revised Statutes 1989, Chapter 127, Paragraph 741 et seq., as supplemented and amended) authorizes public agencies to exercise jointly with any other public agency in the State of Illinois any power, privilege or authority which may be exercised by such public agency individually; and WHEREAS, the Municipalities are each a unit of local government and a public agency of the State of Illinois; and WHEREAS, pursuant to the Constitution of the State of Illinois, and particularly Article VII, Section 6(a) of the 1970 Constitution of the State of Illinois, each Municipality has the power to issue its revenue bonds (the "Mortgage Revenue Bonds") for public' purposes including the financing and purchase of mortgage loans or interests therein to finance the cost of residences for low and moderate income persons within its corporate boundaries, and to pledge to the payment of the principal of, premium, if any, and interest on such revenue bonds the payments made with respect to the mortgage loans purchased with snd financed by the proceeds of such revenue bonds: and WHEREAS, pursuant to Section 146 of the Internal Revenue Code of 1986 (the "Code") bonds issued for the purposes described in the preceding paragraph may not be issued on a tax-exempt basis unless the aggregate principal amount of such bonds issued by any issuer is within such issuer's "volume cap" for the calendar year; and WHEREAS, pursuant to Section 146 of the Code and the relevant provisions of the Illinois Private Activity Bond Allocation Act (the "Bond Allocation Act") prior to a specified date each year, the "volume cap" of each Municipality is limited to $50 multiplied by such Municipality's population based on the most recen~ census estimate released prior to January i of that calendar year; and WHEREAS, pursuant to the Bond Allocation Act and the current Guidelines and Procedures issued thereunder (the "Guidelines"), each Municipality may rea]locate its volume cap to another Municipality~ and WHEREAS, the Municipalities hereby find and determine that they cannot individually access the capita] markets on favorable terms through the issuance of tax- exempt Mortgage Revenue Bonds due to the limitations on the aggregate principal amount of such bonds which may be issued under each Municipality's "volume cap" authority; and WHEREAS, the Municipalities hereby find and determine that the pooling of all of the "volume cap" authority of each of the Municipalities for 1991 and the re- allocation of all of such authority to a single Municipality would permit that Municipality to issue tax-exempt Mortgage Revenue Bonds to finance residences for low and moderate income persons within the corporate boundaries of all of the Municipalities in an aggre- gate principal amount of sufficient size to adequately access the capital markets at a favorable interest rate; and WHEREAS, to accomplish the foregoing, the Municipalities propose to realloeate their 1991 "volume cap" to the ~ of M_t~tinois ("the Issuer") and the Issuer proposes to issue, sell and deliver its Single Family- "' Mortgage Revenue Bonds, Series 1991 (the "Bonds") in order to obtain funds to finance the cost of residences for low and moderate income persons within the corporate boundaries of each of the Municipalities; NOW, THEREFORE, in consideration of the above premises and of the mutual covenants hereinafter contained and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Municipalities hereby agree as follows: SECTION 1. Representations. Each Municipality represents as follows: (a) The Municipality (1) is a home rule unit of government and a municipal corporation duly organized and existing under the laws of the State, (2) has full power and authority to enter into this Cooperation Agreement and to carry out its obligations hereunder and (3) by proper corporate action has duly authorized the execution and delivery of this Cooperation Agreement. (b) Neither the execution and delivery by the Municipality of this Coopera- tion Agreement nor the consummation by the Municipality of the transactions contemplated hereby conflicts with, will result in a breach of or default under or will result in the imposition of any lien on any property of the Municipality pursuant to the terms, conditions or provisions of any statute, order, rule, regulation, agree- ment or instrument to which the Municipality is a party or by which it is bound. (c) This Cooperation Agreement has been duly authorized, executed and delivered by the Municipality and constitutes the legal, valid and binding obligation of the Municipality enforceable against the Municipality in accordance with its terms. (d) There is no litigation or proceeding pending, or to the knowledge of the Municipality threatened, against the Munieipality, or to the knowledge of the Municipality affecting it, which would adversely affect the validity of this Cooperation Agreement or the ability of the Municipality to comply with its obliga- tions thereunder. (e) The population of the Municipality as set forth in the most recent census estimate released by the United States Bureau of Census prior to January 1, 1991 is as set forth in Exhibit A hereto. Exhibit A further sets forth the Municipality's volume cap for calendar year 1991. -2- (f) As of the effective date of this Cooperation Agreement, the Municipality has not taken any action which would have the effect of using or authorizing the use of all or any portion of its 1991 volume cap pursuant to any (1) issuance of any "private activity bonds" (wit. bin the meaning of Section 141 of the Code), (2) election not to issue qualified mortgage bonds in order to issue mortgage credit certificates (as defined in the Code), (3) reallocation of any of its "volume cap" to any other entity, (4) carry forward to future years of any of its "volume cap", or (5) other action. (g) As of the effective date of this Cooperation Agreement, the "areas of chronic economic distress" as described in Section 143(j)(3) of the Code within the Municipality are the areas set forth in Exhibit B hereto. (h) On or prior to the effective date of this Cooperation Agreement, the governing body of the Municipality conducted a public hearing with respect to the proposed issuance of the Bonds in conformance with the requirements of Section 147(f) of the Code. At such publie hearing, all residents, taxpayers and other interested persons were given the opportunity to express their views with respect to the proposed issuance of the Bonds. Notice of such public hearing was duly published in a newspaper of general circulation in the Municipality at least 14 days prior to the date of such public hearing. The Mayor or President, as the case may be, or the governing body of the Municipality, as an "applicable elected representative" of the Municipality pursuant to Section 147(f) of the Code, has approved the issuance of the Bonds pursuant to said Section on or prior to the effective date of this Cooperation Agreement. SECTION 2. Reallocation of Volume Cap. Each Municipality hereby agrees that, immediately upon the effectiveness of this Cooperation Agreement, it will re- allocate all of its 1991 volume cap as set forth in Exhibit A hereto to the Issuer pursuant to and in accordance with the requirements of the Bond Allocation Act and the Guidelines in order that the Issuer may use its best efforts to issue the Bonds for the purposes set forth in Section 3 below. SECTION 3. Issuance of Bonds. The Issuer hereby agrees that it will use its best efforts to issue the Bonds in an aggregate principal amount equal to the sum of its own 1991 volume cap set forth on Exhibit A hereto plus all volume cap reallocated to it pursuant to Section 2 above. The Bonds shall be issued solely for the purpose of financing mortgage loans for single family residences for low and moderate income persons within the corporate boundaries of the Municipalities. The Bonds shall be issued in such series and classes, shall have such stated maturity or maturities, shall bear interest at such rate or rates, shall be subject to redemption prior to maturity, shall be payable at such time or times and at such place or places, and shat! have such other terms, all as shall be approved by ordinance of the governing body of the Issuer or specified in the trust indenture under which the Bonds are issued. The Issuer has complete discretion, as the issuer of the Bonds, to select the trustee, the master servicer, if any, and a compliance agent, if any, to serve in such capacities in connection with the Bonds. The proceeds of the Bonds may be used to finance mortgage loans or the acquisition of interests therein, as described above, to fund reserves for the payment of debt service on the Bonds, To pay interest or debt service on the Bonds, to pay costs of issuance of the Bonds or for such other purposes related to the Bonds or the mortgage loans to be financed thereby as the Issuer deems necessary or desirable. Similarly the Issuer has complete discretion, as the issuer of the Bonds, to invest proceeds of the Bonds (pursuant to a guaranteed investment contract or -3- otherwise), and to establish fees and compensation of the entities serving in capacities established in connection with the Bonds and the ongoing mortgage program established thereby. SECTION 4. Security for Bonds. The Bonds shall be limited obligations of the Issuer, secured solely by mortgage loans financed with Bond proceeds, by interests therein evidenced by obligations of the Government National Mortgage Association ("GNMA"), the Federal National Mortgage Association ("FNMA") or by obligations of lenders who will originate qualifying mortgage loans under the program, all as the Issuer, in its sole discretion, shall determine. The Bonds may be supported by municipal bond insurance policies or other forms of credit enhancement as the Issuer shall determine. Under no circumstances shall the Bonds be a general obligation of the Issuer or of any Municipality nor shall they constitute or give rise to a pecuniary liability of the Issuer or any Municipality or a charge against the general credit or taxing power of the Issuer or any Municipality. SECTION 5. Restrictions on Allocation of Mortgage Loans. The documents under which the Bonds are issued (the "Bond Documents") shall provide that during an initial period commencing on the date of issuance of the Bonds through and including a date which is at least six months thereafter (the "Municipal Reservation Period"), a pro rata share of the initial amount made available to finance mortgage loans or interests therein, shall be reserved solely for the financing of mortgage loans for residences located within the corporate limits of each of the Municipalities. Such pro rata share for any given Municipality shall approximately equal the amount of volume cap contributed by such Municipality to the issue divided by the initial aggregate principal amount of the Bonds. After the Municipal Reservation Period, the Bond Documents may provide that Bond proceeds available to finance mortgage loans be used to finance loans originated on a first-come, first-served basis, without regard for location of the residence, subject to federal requirements (such as "target area requirements") which mus~ be observed to maintain the tax-exempt status of the Bonds, and other reservations (such as reservations for builders and real estate brokers) which may be desirable in marketing the program. SECTION 6. Participating Lenders. The Bond Documents shall provide that during at least the Municipal Reservation Period, for every Municipality, there shall have been selected and be in place at least one participating lender who has agreed to use reasonable efforts to originate mortgage loans financed under the program within the corporate limits of that Municipality. SECTION 7. Appointment of Professionals. George K. Baum & Company shall serve as underwriter or placement agent for the Bonds. Chapman and Cutler shall serve as bond counsel in connection with the issuance of the Bonds. SECTION 8. Failure to Issue Bonds. The Issuer agrees to use its best efforts to issue Bonds for the purposes described herein in a timely manner, such that the 1991 volume cap of the Municipalities is not automatically ceded to the Governor's Office of the State of Illinois under the Bond Allocation Act and the Guidelines. All of the Municipalities acknowledge and agree that market conditions or other factors could make it impossible, uneconomic or undesirable for the Bonds to be issued and, accordingly, the Issuer will not be subject to any liability to the other parties hereto if Bonds are not issued. The Issuer will endeavor to keep the other Municipalities informed as to the ongoing status of the preparations for issuance of the Bonds. -4- If the Issuer and its professional consultants are unabIe to obtain the commitments of participating lenders to originate mortgage loans in a given Municipality such that the requirements of Sections 5 and 6 hereof cannot be satisfied with respect to that Municipality~ the Issuer shall take such lawful steps as are necessary to reallocate to such Municipality its 1991 volume cap and such Municipality shall no longer be a participant in the program established hereby or bound by the provisions of this Cooperation Agreement. SECTION 9. Documents~ Instruments and O[~inions. Each Municipality agrees to enter into all such documents and instruments as shall be necessary or appro- priate in connection with the issuance of the Bonds, including without limitation closing certificates, disclosure representations, and all such other documents and instruments as shall be necessary or appropriate in connection with the issuance of the Bonds. Each Municipality acknowledges that it has caused its municipal attorney to review this Cooperation Agreement in order that he or she may render an opinion regarding its enforceability and related matters. SECTION 10. Absolute and Irrevocable Conditions; Amendment. All terms and conditions contained herein are intended to be absolute and irrevocable conditions hereof and are agreed to by the Municipalities. This Cooperation Agreement may not be effectively amended, changed, modified, altered or terminated without the written consent of all of the Munieipalities~ authorized by ordinances adopted by their respective governing bodies, certified copies of which shall be filed with the other Municipalities; provided that after the issuance of the Bonds no such amendment shall adversely affect the interests of the owners of the Bonds. SECTION 11. Obligations Unconditional. The Municipalities shall have no right to terminate, cancel or rescind this Cooperation Agreement, it being the intent hereof that the Municipalities shall be absolutely and unconditionally obligated to perform all covenants contained in this Cooperation Agreement from and after the effective date hereof. SECTION 12. Notices. Ail notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by registered or certified mail, postage prepaid, addressed to the appropriate address set forth in Exhibit C hereto. A duplicate copy of each notice, certificate or other communication given hereunder to any Municipality shall also be given to the others. Any Municipality, by notice given hereunder, may designate a different or further address to which subsequent notices, certificates or other communications will be sent. SECTION 13. Binding Effect. This Cooperation Agreement shall inure to the benefit of and shall be binding upon the Municipalities and their respective successors and assigns. SECTION 14. Severability. In the event any provision of this Cooperation Agreement shall be held invalid or unenforceable by a court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision of this Cooperation Agreement. SECTION 15. Further Assurances and Corrective InstrumenTs. The Municipalities agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for carrying out the expressed intention of this Cooperation Agreement. -5- SECTION 16. Execution in Counterparts. This Cooperation Agreement may be executed simultaneously in any number of counterparts, each of which counter- part shall be an original and ali of which counterparts shall constitute but one and the same instrument. SECTION 17. Applicable Law. This Cooperation Agreement shall be governed by and construed in accordance with the laws of the State of Illinois. SECTION 18. Effective Date. This Cooperation Agreement shall be in full force and effect on the date when it is executed by Municipalities with 1991 "volume caps" set forth in Exhibit A hereto aggregating at least $8,000,000. Prior to that date, this Cooperation Agreement shall have no force and effect. This Cooperation Agreement shall not be binding upon any Municipality which has not executed this Agreement below. SECTION 19. Filing of Authorizing Ordinances. Each Municipality shall file with the other Municipalities a certified copy of the ordinance authorizing the exe- cution of this Cooperation Agreement within three (3) weeks of the adoption of such ordinance. IN WITNESS WHEREOF, the Municipalities have caused this Intergovern- mental Cooperation Agreement to be executed in their respective names by their respec- tive duly authorized officials shown on the succeeding pages. -6- INTERGOVERNMENTAL COOPERATION AGREEMENT COUNTERPART SIGNATURE PAGE ~O~'WF-'/ OF f---~o,/(', ILLINOIS (SEAL) Attest: ~///-Z ~'~ Clerk EXHIBIT A Municipality Population* 1991 Volume Ca[~ * Based on the most recent census estimate released by the Bureau of Census prior to January 1, 1991 EXHIBIT B Municipality Areas of Chronic Economic Distress EXHIBIT C Municipality Notice Address