amounts, maturities, interest rates and yields or prices grove 08ab addendum.pdf · new issue...

NEW ISSUE Investment Rating: Standard & Poor’s Corporation …A+

ADDENDUM DATED JULY 1, 2008

OFFICIAL STATEMENT DATED JUNE 20, 2008

$590,000 VILLAGE OF SUGAR GROVE

Kane County, Illinois General Obligation Road Bonds (Alternate Revenue Source), Series 2008B

AMOUNTS, MATURITIES, INTEREST RATES AND YIELDS OR PRICES

Principal Due Interest Yield or Principal Due Interest Yield or Amount Jan. 1 Rate Price Amount Jan. 1 Rate Price $100,000 ....... 2010 3.000% 3.000% $125,000...........2013 3.450% 3.450% 115,000 ....... 2011 3.150% 3.150% 130,000...........2014 3.600% 3.600% 120,000 ....... 2012 3.350% 3.350%

The Official Statement of the Village dated June 20, 2008 (the "Official Statement") with respect to the 2008B

Bonds is incorporated by reference herein and made a part hereof. The "Final Official Statement" of the Village with respect to the 2008B Bonds as that term is defined in Rule 15c2-12 of the Securities and Exchange Commission shall be comprised of the following:

1. Official Statement dated June 20, 2008; and 2. This Addendum dated July 1, 2008.

No dealer, broker, salesman or other person has been authorized by the Village to give any information or to

make any representations with respect to the 2008B Bonds other than as contained in the Final Official Statement and, if given or made, such other information or representations must not be relied upon as having been authorized by the Village. Certain information contained in the Final Official Statement may be obtained from sources other than records of the Village and, while believed to be reliable, is not guaranteed as to completeness. NEITHER THE DELIVERY OF THE OFFICIAL STATEMENT OR THE FINAL OFFICIAL STATEMENT NOR ANY SALE MADE THEREUNDER SHALL CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE VILLAGE SINCE THE DATE THEREOF.

The Village has authorized preparation of the Final Official Statement containing pertinent information relative to the 2008B Bonds and the Village. Copies of that Final Official Statement can be obtained from the Underwriter, as defined herein. Additional information may also be obtained from the Village or from the independent public finance consultants to the Village:

Established 1954

Speer Financial, Inc. INDEPENDENT PUBLIC FINANCE CONSULTANTS ONE NORTH LASALLE STREET/SUITE 4100 • CHICAGO, ILLINOIS 60602 Area 312-346-3700

2

ADDITIONAL INFORMATION

References herein to laws, rules, regulations, ordinances, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts have not been included as appendices to the Official Statement or the Final Official Statement, they will be furnished on request.

General Obligation Bonded Debt(1) (Principal Only)

Cumulative Calendar Series Series Series Series Series Outstanding Series Series Total Principal Retired Year 1991 2001(2) 2002(3) 2006(3) 2006A(4) Bonds 2008A(3) 2008B(5) Debt Amount Percent

2008.......... $ 0 $ 0 $ 0 $ 0 $ 410,000 $ 410,000 $ 0 $ 0 $ 410,000 $ 410,000 2.28% 2009.......... 75,000 170,000 150,000 30,000 425,000 850,000 0 0 850,000 1,260,000 7.00% 2010.......... 85,000 180,000 155,000 35,000 440,000 895,000 80,000 100,000 1,075,000 2,335,000 12.98% 2011.......... 90,000 190,000 165,000 35,000 355,000 835,000 80,000 115,000 1,030,000 3,365,000 18.70% 2012.......... 0 200,000 125,000 35,000 345,000 705,000 135,000 120,000 960,000 4,325,000 24.04% 2013.......... 0 210,000 0 255,000 360,000 825,000 60,000 125,000 1,010,000 5,335,000 29.66% 2014.......... 0 225,000 0 285,000 375,000 885,000 45,000 130,000 1,060,000 6,395,000 35.55% 2015.......... 0 235,000 0 300,000 395,000 930,000 50,000 0 980,000 7,375,000 40.99% 2016.......... 0 245,000 0 315,000 415,000 975,000 50,000 0 1,025,000 8,400,000 46.69% 2017.......... 0 260,000 0 325,000 435,000 1,020,000 50,000 0 1,070,000 9,470,000 52.64% 2018.......... 0 275,000 0 290,000 455,000 1,020,000 100,000 0 1,120,000 10,590,000 58.87% 2019.......... 0 290,000 0 230,000 475,000 995,000 150,000 0 1,145,000 11,735,000 65.23% 2020.......... 0 305,000 0 225,000 500,000 1,030,000 160,000 0 1,190,000 12,925,000 71.85% 2021.......... 0 320,000 0 220,000 525,000 1,065,000 175,000 0 1,240,000 14,165,000 78.74% 2022.......... 0 0 0 0 550,000 550,000 185,000 0 735,000 14,900,000 82.82% 2023.......... 0 0 0 0 575,000 575,000 190,000 0 765,000 15,665,000 87.08% 2024.......... 0 0 0 0 600,000 600,000 200,000 0 800,000 16,465,000 91.52% 2025.......... 0 0 0 0 650,000 650,000 205,000 0 855,000 17,320,000 96.28% 2026.......... 0 0 0 0 0 0 210,000 0 210,000 17,530,000 97.44% 2027.......... 0 0 0 0 0 0 210,000 0 210,000 17,740,000 98.61% 2028.......... 0 0 0 0 0 0 250,000 0 250,000 17,990,000 100.00% Total....... $250,000 $3,105,000 $595,000 $2,580,000 $8,285,000 $14,815,000 $2,585,000 $590,000 $17,990,000

Notes: (1) Source: the Village. (2) The Series 2001 bonds are alternate bonds payable from income, sales and utility taxes. (3) The Series 2002, Series 2006 and Series 2008A bonds are alternate bonds payable from water and sewer revenues. (4) The Series 2006A Bonds are payable from the Local Government Distributive fund, the utility tax receipts, the capital improvement impact fees and the road fees. (5) The Series 2008B bonds are alternate bonds payable from the Motor Fuel Tax.

3

Statement of Bonded Indebtedness(1)

Ratio To Per Capita Amount Equalized Estimated (2007 Special Applicable Assessed Actual Census 8,848)

Village EAV of Taxable Property, 2007 ........... $322,044,958 100.00% 33.33% $ 36,397.49 Estimated Actual Value, 2007 .................... $966,134,874 300.00% 100.00% $109,192.46 Total Direct Bonded Debt ........................ $ 17,990,000 5.59% 1.86% $ 2,033.23 Less: Self-Supported Debt(2) ................... (17,740,000) (5.51%) (1.84%) (2,004.97) Net Direct Bonded Debt ........................ $ 250,000 0.08% 0.03% $ 28.25 Overlapping Bonded Debt(3): Schools ......................................... $ 22,078,610 6.86% 2.29% $ 2,495.32 Other ........................................... 12,769,498 3.97% 1.32% 1,443.21 Total Overlapping Bonded Debt ................. $ 34,848,108 10.82% 3.61% $ 3,938.53 Net Direct and Total Overlapping Bonded Debt .. $ 35,098,108 10.90% 3.63% $ 3,966.78 Notes (1) Source: Kane County Clerk.

(2) Self-supported debt includes the Series 2001 Bonds, the Series 2002 Bonds, the Series 2006 Bonds, the Series 2006A Bonds and the Bonds.

(3) As of March 31, 2008.

Legal Debt Margin(1)

2007 Village Equalized Assessed Valuation................................................. $322,044,958 Statutory Debt Limitation (8.625% of EAV)................................................. $ 27,776,378 General Obligation Debt: Series 1991............................................ $ 250,000 Series 2001(2)......................................... 3,105,000 Series 2002(2)......................................... 595,000 Series 2006(2)......................................... 2,580,000 Series 2006A(2)........................................ 8,285,000 The Bonds: Series 2008A(2)........................................ 2,585,000 Series 2008B(2)........................................ 590,000 Total General Obligation Debt........................ $ 17,990,000 Less Alternate Revenue Source Bonds(2)................. $(17,740,000) Total Applicable Debt..................................................................... $ 250,000 Legal Debt Margin......................................................................... $27,526,378 Notes: (1) Source: the Village

(2) As general obligation alternate bonds under Illinois Statutes, the Bonds do not count against the 8.625% of EAV debt limit for general obligation bonded debt, so long as the debt service levy for such bonds is abated annually and not extended.

4

Projected Debt Service Coverage Table (Waterworks and Sewerage System Revenues)

Net Revenue Total Available Debt Calendar for Debt Series Series Service The Year Service(1) 2002 2006 Outstanding Bonds Total Coverage

2008 .... $975,966 $179,425 $146,625 $326,050 $ 0 $326,050 2.99x 2009 .... 975,966 173,800 145,425 319,225 87,885 407,110 2.40x 2010 .... 975,966 172,800 149,225 322,025 190,625 512,650 1.90x 2011 .... 975,966 176,600 147,825 324,425 187,425 511,850 1.91x 2012 .... 975,966 130,000 146,425 276,425 239,225 515,650 1.89x 2013 .... 975,966 0 365,025 365,025 158,825 523,850 1.86x 2014 .... 975,966 0 383,550 383,550 141,425 524,975 1.86x 2015 .... 975,966 0 385,725 385,725 144,625 530,350 1.84x 2016 .... 975,966 0 387,225 387,225 142,625 529,850 1.84x 2017 .... 975,966 0 383,050 383,050 140,625 523,675 1.86x 2018 .... 975,966 0 333,425 333,425 188,625 522,050 1.87x 2019 .... 975,966 0 260,375 260,375 234,625 495,000 1.97x 2020 .... 975,966 0 245,025 245,025 238,250 483,275 2.02x 2021 .... 975,966 0 229,900 229,900 246,450 476,350 2.05x 2022 .... 975,966 0 0 0 249,013 249,013 3.92x 2023 .... 975,966 0 0 0 245,919 245,919 3.97x 2024 .... 975,966 0 0 0 247,606 247,606 3.94x 2025 .... 975,966 0 0 0 243,856 243,856 4.00x 2026 .... 975,966 0 0 0 239,888 239,888 4.07x 2027 .... 975,966 0 0 0 230,700 230,700 4.23x 2028 .... 975,966 0 0 0 261,250 261,250 3.74x Note: (1) Based on the Village's Comprehensive Annual Financial Report for Year Ended April 30, 2007.

Projected Debt Service Coverage Table

(Motor Fuel Tax)

Net Revenue Available The

Calendar for Debt 2008B Year Service(1) Bonds Total Coverage 2010 ............. $240,989 $128,689 $128,689 1.87x 2011 ............. 240,989 131,635 131,635 1.83x 2012 ............. 240,989 133,013 133,013 1.81x 2013 ............. 240,989 133,993 133,993 1.80x 2014 ............. 240,989 134,680 134,680 1.79x Note: (1) Based on the Village's Comprehensive Annual Financial Report for Year Ended April 30, 2007.

5

INVESTMENT RATING

The 2008B Bonds have been rated "A+" by Standard & Poor’s Investors Service. The Village has supplied certain information and material concerning the 2008B Bonds and the Village to the rating service shown on the cover page as part of its application for an investment rating on the 2008B Bonds. Generally, such rating service bases its rating on such information and material, and also on such investigations, studies and assumptions that it may undertake independently. There is no assurance that such rating will continue for any given period of time or that it may not be lowered or withdrawn entirely by such rating service if, in its judgment, circumstances so warrant. Any such downward change in or withdrawal of such rating may have an adverse effect on the secondary market price of the 2008B Bonds. An explanation of the significance of investment ratings may be obtained from the rating agency: Standard & Poor’s Investors Service, 55 Water Street, New York, New York 10041, telephone 212-238-2000.

UNDERWRITING

The 2008B Bonds were offered for sale by the Village at a public, competitive sale on July 1, 2008. The best bid submitted at the sale was submitted by UMB Bank, N.A., Kansas City, Missouri (the "2008B Underwriter"). The Village awarded the contract for sale of the 2008B Bonds to the 2008B Underwriter at a price of $585,280.00. The 2008B Underwriter has represented to the Village that the 2008B Bonds have been subsequently re-offered to the public initially at the yields set forth in this Addendum.

QUALIFIED TAX-EXEMPT OBLIGATIONS

The Village has designated the 2008B Bonds as "qualified tax-exempt obligations" pursuant to the small issuer exception provided by Section 265 (b) (3) of the Code.

AUTHORIZATION

The Official Statement dated June 20, 2008, and this Addendum dated July 1, 2008, for the $590,000 General Obligation Road Bonds (Alternate Revenue Source), Series 2008B, have been prepared under the authority of the Village and have been authorized for distribution by the Village. /s/ P. SEAN MICHELS /s/ JUSTIN VAN VOOREN Village President Finance Director VILLAGE OF SUGAR GROVE VILLAGE OF SUGAR GROVE Kane County, Illinois Kane County, Illinois

New Issue 2008A Bonds Insured Investment Rating: Date of Sale: Tuesday, July 1, 2008 Standard & Poor's … AAA 10:00 A.M., C.D.T. (FSA Insured)

The Bonds Underlying Rating: Standard & Poor's … A+

Official Statement Subject to compliance by the Village with certain covenants, in the opinion of Katten Muchin Rosenman LLP Bond Counsel, under present law, interest on the Bonds is not

includible in gross income of the owners thereof for federal income tax purposes and is not included as an item of tax preference in computing the federal alternative minimum tax for individuals and corporations, but such interest is taken into account in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. See “TAX EXEMPTION” herein for a more complete discussion. The Bonds are “qualified tax-exempt obligations” under Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. See “QUALIFIED TAX-EXEMPT OBLIGATIONS” herein.

VILLAGE OF SUGAR GROVE Kane County, Illinois

$2,585,000 General Obligation Waterworks and Sewerage Bonds (Alternate Revenue Source), Series 2008A

$570,000* General Obligation Road Bonds (Alternate Revenue Source), Series 2008B

Dated July 15, 2008 Book-Entry Bank Qualified Due Serially As Detailed Herein

The $2,585,000 General Obligation Waterworks and Sewerage Bonds (Alternate Revenue Source), Series 2008A (the “2008A Bonds”) and the $570,000* General Obligation Road Bonds (Alternate Revenue Source), Series 2008B (the “2008B Bonds”, together with the 2008A Bonds, the “Bonds”) are being issued by the Village of Sugar Grove, Kane County, Illinois (the “Village”). Interest on the 2008A Bonds is payable semiannually on May 1 and November 1 of each year, commencing May 1, 2009. Interest on the 2008B Bonds is payable semiannually on January 1 and July 1 of each year, commencing July 1, 2009. The Bonds will be issued using a book-entry system. The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Bonds. The ownership of one fully registered Bond for each maturity will be registered in the name of Cede & Co., as nominee for DTC and no physical delivery of Bonds will be made to purchasers. The 2008A Bonds will mature on May 1 as detailed herein. The 2008B Bonds will mature on January 1 as detailed herein.

OPTIONAL REDEMPTION

The 2008A Bonds due May 1, 2010-2018, inclusive, are non-callable. The 2008A Bonds due May 1, 2019-2028, inclusive, are callable in whole or in part on any date on or after May 1, 2018, at a price of par and accrued interest. If less than all the 2008A Bonds are called, they shall be redeemed in such principal amounts and from such maturities as determined by the Village and within any maturity by lot. See “OPTIONAL REDEMPTION-The 2008A Bonds” herein. The 2008B Bonds are not subject to redemption prior to maturity.

BOND INSURANCE – 2008A BONDS

The scheduled payment of principal of and interest on the 2008A Bonds when due will be guaranteed under an insurance policy to be issued concurrently with the delivery of the 2008A Bonds by FINANCIAL SECURITY ASSURANCE INC. See APPENDIX C herein. The cost for the 2008A Bond insurance premium and the related rating fee Standard & Poor’s will be paid by the Village.

PURPOSE, LEGALITY AND SECURITY

The 2008A Bond proceeds will be used to finance improvements to the Waterworks and Sewerage System (the “System”) of the Village and pay the cost of issuing the 2008A Bonds. See “THE PROJECTS-THE 2008A BONDS AND THE 2008B BONDS” herein.

The 2008B Bond proceeds will be used to finance improvements to, but not limited to, Wheeler Road, Hankes Road, and any other Illinois Department of Transportation approved projects and pay the cost of issuing the 2008B Bonds. See “THE PROJECTS-THE 2008A BONDS AND THE 2008B BONDS” herein.

The 2008A Bonds are payable both as to principal and interest from (a) revenues of the System of the Village (the “Pledged Revenues”); and (b) ad

valorem taxes levied against all taxable property within the Village without limitation as to rate or amount. See “DESCRIPTION OF THE BONDS-The 2008A Bonds” herein.

The 2008B Bonds are payable both as to principal and interest from (a) Motor Fuel Taxes received by the Village (the “Pledged Revenues”); and (b) ad

valorem taxes levied against all taxable property within the Village without limitation as to rate or amount. See “DESCRIPTION OF THE BONDS-The 2008B Bonds” herein.

The Bonds are “qualified tax-exempt obligations” pursuant to the small issuer exception provided by Section 265(b)(3) of the Internal Revenue Code of

1986, as amended. This Official Statement is dated June 20, 2008, and has been prepared under the authority of the Village. An electronic copy of this Official Statement is

available from the www.speerfinancial.com web site under “Debt Auction Center/Official Statement Sales Calendar”. Additional copies may be obtained from Mr. Justin Van Vooren, Finance Director, Village of Sugar Grove, 10 South Municipal Drive, Sugar Grove, Illinois 60554, or from the Independent Public Finance Consultants to the Village:

Established 1954

Speer Financial, Inc. INDEPENDENT PUBLIC FINANCE CONSULTANTS

ONE NORTH LASALLE STREET, SUITE 4100 • CHICAGO, ILLINOIS 60602 Telephone: (312) 346-3700; Facsimile: (312) 346-8833

*Subject to change. www.speerfinancial.com

Village of Sugar Grove, Kane County, Illinois $2,585,000 General Obligation Waterworks and Sewerage Bonds (Alternate Revenue Source), Series 2008A $570,000* General Obligation Motor Fuel Tax Bonds (Alternate Revenue Source), Series 2008B *Subject to change.

2

For purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, this document, as

the same may be supplemented or corrected by the Village from time to time (collectively, the “Official Statement”), may be treated as an Official Statement with respect to the Bonds described herein that is deemed near final as of the date hereof (or the date of any such supplement or correction) by the Village.

The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates,

principal amounts and interest rates of the Bonds, together with any other information required by law or deemed appropriate by the Village, shall constitute a “Final Official Statement” of the Village with respect to the Bonds, as that term is defined in Rule 15c2-12. Any such addendum shall, on and after the date thereof, be fully incorporated herein and made a part hereof by reference.

No dealer, broker, salesman or other person has been authorized by the Village to give any information or to

make any representations with respect to the Bonds other than as contained in the Official Statement or the Final Official Statement and, if given or made, such other information or representations must not be relied upon as having been authorized by the Village. Certain information contained in the Official Statement and the Final Official Statement may have been obtained from sources other than records of the Village and, while believed to be reliable, is not guaranteed as to completeness. THE INFORMATION AND EXPRESSIONS OF OPINION IN THE OFFICIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF THE OFFICIAL STATEMENT OR THE FINAL OFFICIAL STATEMENT NOR ANY SALE MADE UNDER EITHER SUCH DOCUMENT SHALL CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE VILLAGE SINCE THE RESPECTIVE DATES THEREOF.

References herein to laws, rules, regulations, ordinances, resolutions, agreements, reports and other documents

do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts have not been included as appendices to the Official Statement or the Final Official Statement they will be furnished on request. This Official Statement does not constitute an offer to sell, or solicitation of an offer to buy, any securities to any person in any jurisdiction where such offer or solicitation of such offer would be unlawful.

Other than with respect to information concerning Financial Security Assurance Inc. ("Financial Security")

contained under the caption "Bond Insurance" and specimen "Municipal Bond Insurance Policy" herein, none of the information in this Official Statement has been supplied or verified by Financial Security and Financial Security makes no representation or warranty, express or implied, as to (i) the accuracy or completeness of such information; (ii) the validity of the Bonds; or (iii) the tax exempt status of the interest on the Bonds.


3

BOND ISSUE SUMMARY This Bond Issue Summary is expressly qualified by the entire Official Statement, which is provided for the convenience of potential investors and which should be reviewed in its entirety by potential investors. The following descriptions apply equally to the 2008A Bonds and the 2008B Bonds. Other terms specific to each series are provided separately herein. Issuer: Village of Sugar Grove, Kane County, Illinois. Dated Date: July 15, 2008. Authorization: By vote of the Village Board. Credit Rating: The Village’s underlying rating is “A+” from Standard & Poor's. Tax Exemption: Katten Muchin Rosenman LLP, Chicago, Illinois, will provide an opinion as to the

tax exemption of the Bonds as discussed under “TAX EXEMPTION” in this Official Statement. Interest on the Bonds is not exempt from present State of Illinois income taxes.

Bank Qualification: The Bonds are “qualified tax-exempt obligations” under Section 265(b)(3) of the

Internal Revenue Code of 1986, as amended. See “QUALIFIED TAX-EXEMPT OBLIGATIONS” herein.

Bond Registrar/Paying Agent Escrow Agent: Cole Taylor Bank, Chicago, Illinois. Delivery: The Bonds are expected to be delivered on or about July 22, 2008. Book-Entry Form: The Bonds will be registered in the name of Cede & Co. as nominee for The

Depository Trust Company (“DTC”), New York, New York. DTC will act as securities depository of the Bonds. See APPENDIX B herein.

Financial Advisor: Speer Financial, Inc., Chicago, Illinois.


4

The 2008A Bonds Issue: $2,585,000 General Obligation Waterworks and Sewerage Bonds (Alternate

Revenue Source), Series 2008A.

Interest Due: Each May 1 and November 1, commencing May 1, 2009. Principal Due: Serially each May 1, commencing May 1, 2010 through May 1, 2028, as detailed

below. Optional Redemption: The 2008A Bonds maturing on or after May 1, 2019, are callable at the option of

the Village on any date on or after May 1, 2018, at a price of par plus accrued interest. See “OPTIONAL REDEMPTION-The 2008A Bonds” herein.

Security: The 2008A Bonds are payable both as to principal and interest from (a) revenues of

the System of the Village (the “Pledged Revenues”); and (b) ad valorem taxes levied against all taxable property within the Village without limitation as to rate or amount. See “DESCRIPTION OF THE BONDS” herein.

Rating/Insurance: The scheduled payment of principal of and interest on the 2008A Bonds when due

will be guaranteed under an insurance policy to be issued concurrently with the delivery of the 2008A Bonds by FINANCIAL SECURITY ASSURANCE INC. See APPENDIX C herein. The cost for the 2008A Bond insurance premium and the related rating fee Standard & Poor’s will be paid by the Village.

Purpose: The 2008A Bond proceeds will be used to finance improvements to the Waterworks

and Sewerage System (the “System”) of the Village and pay the cost of issuing the 2008A Bonds. See “THE PROJECTS-THE 2008A BONDS AND THE 2008B BONDS” herein.

AMOUNTS, MATURITIES, INTEREST RATES AND PRICES OR YIELDS

Principal Due Interest Yield or Principal Due Interest Yield or Amount May 1 Rate Price Amount May 1 Rate Price $ 80,000 ........ 2010 ______% ______% $160,000............. 2020 ______% ______% 80,000 ........ 2011 ______% ______% 175,000............. 2021 ______% ______% 135,000 ........ 2012 ______% ______% 185,000............. 2022 ______% ______% 60,000 ........ 2013 ______% ______% 190,000............. 2023 ______% ______% 45,000 ........ 2014 ______% ______% 200,000............. 2024 ______% ______% 50,000 ........ 2015 ______% ______% 205,000............. 2025 ______% ______% 50,000 ........ 2016 ______% ______% 210,000............. 2026 ______% ______% 50,000 ........ 2017 ______% ______% 210,000............. 2027 ______% ______% 100,000 ........ 2018 ______% ______% 250,000............. 2028 ______% ______% 150,000 ........ 2019 ______% ______%

Any consecutive maturities may be aggregated into no more than five term bonds at the option of the bidder,

in which case the mandatory redemption provisions shall be on the same schedule as above.


5

The 2008B Bonds Issue: $570,000* General Obligation Road Bonds (Alternate Revenue Source), Series 2008B.

Interest Due: Each January 1 and July 1, commencing July 1, 2009. Principal Due: Serially each January 1, commencing January 1, 2010 through January 1, 2014, as

detailed below. Optional Redemption: The 2008B Bonds are not subject to redemption prior to maturity. Security: The 2008B Bonds are payable both as to principal and interest from (a) Motor Fuel

Taxes received by the Village (the “Pledged Revenues”); and (b) ad valorem taxes levied against all taxable property within the Village without limitation as to rate or amount. See “DESCRIPTION OF THE BONDS” herein.

Purpose: The 2008B Bond proceeds will be used to finance improvements to, but not limited to,

Wheeler Road, Hankes Road, and any other Illinois Department of Transportation approved projects and pay the cost of issuing the 2008B Bonds. See “THE PROJECTS-THE 2008A BONDS AND THE 2008B BONDS” herein.

AMOUNTS*, MATURITIES, INTEREST RATES AND PRICES OR YIELDS

Principal Due Interest Yield or Principal Due Interest Yield or Amount* Jan. 1 Rate Price Amount* Jan. 1 Rate Price $100,000 ........ 2010 ______% ______% $120,000............. 2013 ______% ______% 110,000 ........ 2011 ______% ______% 125,000............. 2014 ______% ______% 115,000 ........ 2012 ______% ______%

Any consecutive maturities may be aggregated into no more than two term bonds at the option of the bidder,

in which case the mandatory redemption provisions shall be on the same schedule as above.

*Subject to change.


6

VILLAGE OF SUGAR GROVE

Kane County, Illinois P. Sean Michels President Village Trustees

Robert E. Bohler Thomas Renk

Kevin M. Geary Mary Heineman

Mari Johnson Melisa A. Taylor

__________________________________

Officials

Brent Eichelberger Village Administrator

Cynthia Welsch Village Clerk

Justin Van Vooren Finance Director/Treasurer

DESCRIPTION OF THE BONDS Security: Alternate Revenue Sources and Tax Levy - The 2008A Bonds

The 2008A Bonds are general obligations of the Village. The full faith and credit of the Village are irrevocably pledged to the punctual payment of the principal of and interest on the 2008A Bonds. The 2008A Bonds are payable both as to principal and interest from (a) revenues of the System of the Village; and (b) ad valorem taxes levied against all taxable property within the Village without limitation as to rate or amount (the “Pledged Taxes”). Pursuant to the Local Government Debt Reform Act of the State of Illinois, the Village will pledge such monies to the payment of 2008A Bonds and shall covenant to provide for and apply such Pledged Revenues to the payment of 2008A Bonds and the provision of not less than an additional 0.25 times debt service, which pledge and covenant shall constitute a continuing obligation of the Village and continuing appropriation of the amounts received. Security: Alternate Revenue Sources and Tax Levy - The 2008B Bonds

The 2008B Bonds are general obligations of the Village. The full faith and credit of the Village are irrevocably pledged to the punctual payment of the principal of and interest on the 2008B Bonds. The 2008B Bonds are payable both as to principal and interest from (a) Motor Fuel Taxes received by the Village; and (b) ad valorem taxes levied against all taxable property within the Village without limitation as to rate or amount (the “Pledged Taxes”). Pursuant to the Local Government Debt Reform Act of the State of Illinois, the Village will pledge such monies to the payment of 2008B Bonds and shall covenant to provide for and apply such Pledged Revenues to the payment of 2008B Bonds and the provision of not less than an additional 0.10 times debt service, which pledge and covenant shall constitute a continuing obligation of the Village and continuing appropriation of the amounts received.


7

The Bonds In the Bond Ordinance, the Village covenants and agrees with the purchasers and the owners of the Bonds that so long as any of the Bonds remain outstanding, the Village will take no action or fail to take any action which in any way would adversely affect the ability of the Village to collect the Pledged Revenues or, except for abatement of tax levies as permitted in the Bond Ordinance, to levy and collect the Pledged Taxes. The Village will comply with all present and future applicable laws in order to assure that the Pledged Revenues will be available and that the Pledged Taxes will be levied, extended and collected as provided in the Bond Ordinance and deposited in the Debt Service Fund. Highlights of Alternate Bonds Section 15 of the Debt Reform Act provides that whenever revenue bonds have been duly authorized, a local government unit may issue its general obligation bonds in lieu of such revenue bonds as authorized, and such general obligation bonds may be referred to as “alternate bonds.” The Debt Reform Act also provides that whenever there exists an alternate revenue source, a local government unit may issue alternate bonds. Such bonds are general obligation debt payable from the pledged alternate revenues with the general obligation of the issuer acting as back-up security. The Debt Reform Act prescribes several conditions that must be met before alternate bonds may be issued. All of these conditions were satisfied in connection with the 2008A Bonds and the 2008B Bonds. First, alternate bonds must be issued for a lawful corporate purpose. If issued in lieu of revenue bonds, the alternate bonds must be authorized under applicable law. Alternate bonds may be issued payable from either enterprise revenues or other revenue sources, or both. Second, the question of issuance must be submitted to referendum if, within thirty (30) days after publication of an authorizing ordinance and notice of intent to issue alternate bonds, a petition signed by the greater of (i) 7.5% of the registered voters in the government unit; or (ii) 200 of those registered voters or 15%, whichever is less, is filed. No legally sufficient petition was filed in connection with the 2008A Bonds and the 2008B Bonds. Third, the issuer must determine that the pledged revenue source or sources are sufficient in each year to final maturity to provide not less than 1.25 times (1.10 times in the case of a governmental revenue source such as motor fuel taxes paid to the Village by the State of Illinois) debt service of the proposed alternate bonds and all other outstanding alternate Bonds of the issuer payable from the same revenue source. To the extent payable from enterprise revenues, such revenues shall have been determined by the governing body to be sufficient to provide for or pay in each year to final maturity of such alternate bonds all of the following: (1) costs of operation and maintenance of the utility or enterprise, but not including depreciation, (2) debt service on all outstanding revenue bonds payable from such enterprise revenues, (3) all amounts required to meet any fund or account requirements with respect to such outstanding revenue bonds, (4) other contractual or tort liability obligations, if any, payable from such enterprise revenues, and (5) in each year, an amount not less than 1.25 times debt service of all (i) alternate bonds payable from such enterprise revenues previously issued and outstanding and (ii) alternate bonds proposed to be issued. To the extent payable from one or more revenue sources, such sources shall have been determined by the governing body to provide in each year an amount not less than 1.25 times (1.10 times in the case of the 2008B Bonds which are payable from a governmental revenues source) debt service on all alternate bonds payable from such revenue sources previously issued and outstanding and the alternate bonds proposed to be issued. The issuer must in fact pledge and covenant to provide for, collect and apply the pledged alternate enterprise revenues or revenue source(s).


8

Abatement of Pledged Taxes Whenever funds are available to pay any principal of or interest on the Bonds when due, the Village will direct the deposit of such funds into the Debt Service Fund created solely for such purpose. The Village may abate any annual levy for the Bonds only to the extent of the amount of moneys then held in the Debt Service Fund for the payment of the principal of and interest on the Bonds that would otherwise be paid from such annual levy. Refunding Alternate Bonds Section 15 of the Local Government Reform Act, as amended, provides that alternate bonds may be issued to refund or advance refund alternate bonds without meeting any of the conditions set forth in such section that would otherwise apply (see “Highlights of Alternate Bonds” above), if the term of the refunding bonds is no longer than the term of the refunded bonds and the debt service payable on the refunding bonds in each year is no more than the debt service payable in such year on the refunded bonds. Debt Service Fund The Village will deposit the appropriate Pledged Revenues and the Pledged Taxes into a separate Debt Service Fund, which is a trust fund established for the purpose of carrying out the covenants, terms and conditions imposed upon the Village by the Bond Ordinance. The Bonds are secured by a pledge of all of the monies on deposit in the Debt Service Fund, and such pledge is irrevocable until the Bonds have been paid in full or until the obligations of the Village are discharged under the Bond Ordinance. Certain Risk Factors The ability of the Village to pay the Bonds of each series from the applicable Pledged Revenues may be limited by circumstances beyond the control of the Village. There is no guarantee that the Pledged Revenues will continue to be available at current levels. To the extent that Pledged Revenues may be insufficient to pay the Bonds, the Bonds are to be paid from the Pledged Taxes. If the Pledged Taxes are ever extended for the payment of the Bonds, the amount of the Bonds then outstanding will be included in the computation of indebtedness of the Village for purposes of all statutory provisions or limitations until such time as an audit of the Village shows that the Bonds have been paid from the Pledged Revenues for a complete fiscal year.


9

THE WATERWORKS AND SEWERAGE SYSTEM – THE 2008A BONDS

The System supplies water to residents, industrial users and commercial consumers in the Village and unincorporated Prestbury Subdivision. The Village has two water sources: deep groundwater and shallow groundwater. The Village maintains 6 wells and operates 2 elevated water storage tanks in addition to a ground storage tank. The water distribution system is comprised of 4-inch, 6-inch, 10-inch, and 12-inch water mains.

Water and Sewer System User Rates

Rate Implementation Monthly Water Resident Usage Non-Resident Usage Date Service Charge Charge (per 1,000 gal) Charge (per 1,000 gal)

May 1, 2002 ................ $6.46 $2.40 $3.12 May 1, 2003 ................ 6.46 2.40 3.12 May 1, 2004 ................ 6.46 2.40 3.12 May 1, 2005 ................ 6.46 2.40 3.12 May 1, 2006 ................ 6.46 2.40 3.12 May 1, 2007 ................ 6.46 2.40 3.12 May 1, 2008 ................ 6.92 2.57 3.35

Rate Implementation Monthly Water Resident Usage Non-Resident Usage Date Service Charge Charge (per 1,000 gal) Charge (per 1,000 gal)

May 1, 2002 ................. $7.07 $2.41 $3.13 May 1, 2003 ................. 7.07 2.41 3.13 May 1, 2004 ................. 7.07 2.41 3.13 May 1, 2005 ................. 7.07 2.41 3.13 May 1, 2006 ................. 7.07 2.41 3.13 May 1, 2007 ................. 7.07 2.41 3.13 May 1, 2008 ................. 7.57 2.58 3.36

Historical Water Usage(1) (Thousands of Gallons)

Fiscal Number of Total Year Accounts Gallons Billed 1997 ............... 1,697 141,740 1998 ............... 1,893 165,374 1999 ............... 2,099 160,718 2000 ............... 2,158 170,732 2001 ............... 2,391 168,175 2002 ............... 2,645 179,176 2003 ............... 3,077 225,042 2004 ............... 3,430 238,531 2005 ............... 3,724 281,976 2006 ............... 3,850 330,989 2007 ............... 4,009 354,753 2008 ............... 4,120 312,479

Note: (1) Source: the Village.


10

Top Ten Water Customers-2007(1)

Average Monthly Usage User Thousands (Gallons) Bliss Creek Restaurant ..................... 159,000 Super Wash ................................. 105,000 Edgemark Asset Management .................. 88,000 P.C.A. Pool ................................ 76,000 Fireside Grill ............................. 58,000 Jewel Osco ................................. 51,000 Individual ................................. 51,000 Kaneland School District ................... 49,000 Falex ...................................... 46,000 Kensington Development ..................... 42,000 Total .................................... 725,000 Note: (1) Source: the Village.

Projected Debt Service Coverage Table (Waterworks and Sewerage System Revenues)

Net Revenue Total Available Debt Calendar for Debt Series Series Service The Year Service(1) 2002 2006 Outstanding Bonds(2) Total Coverage

2008 .... $975,966 $179,425 $146,625 $326,050 $ 0 $326,050 2.99x 2009 .... 975,966 173,800 145,425 319,225 89,236 408,461 2.39x 2010 .... 975,966 172,800 149,225 322,025 192,325 514,350 1.90x 2011 .... 975,966 176,600 147,825 324,425 189,125 513,550 1.90x 2012 .... 975,966 130,000 146,425 276,425 240,925 517,350 1.89x 2013 .... 975,966 0 365,025 365,025 160,525 525,550 1.86x 2014 .... 975,966 0 383,550 383,550 143,125 526,675 1.85x 2015 .... 975,966 0 385,725 385,725 146,325 532,050 1.83x 2016 .... 975,966 0 387,225 387,225 144,325 531,550 1.84x 2017 .... 975,966 0 383,050 383,050 142,325 525,375 1.86x 2018 .... 975,966 0 333,425 333,425 190,325 523,750 1.86x 2019 .... 975,966 0 260,375 260,375 236,325 496,700 1.96x 2020 .... 975,966 0 245,025 245,025 240,325 485,350 2.01x 2021 .... 975,966 0 229,900 229,900 248,125 478,025 2.04x 2022 .... 975,966 0 0 0 250,250 250,250 3.90x 2023 .... 975,966 0 0 0 246,925 246,925 3.95x 2024 .... 975,966 0 0 0 248,375 248,375 3.93x 2025 .... 975,966 0 0 0 244,375 244,375 3.99x 2026 .... 975,966 0 0 0 240,150 240,150 4.06x 2027 .... 975,966 0 0 0 230,700 230,700 4.23x 2028 .... 975,966 0 0 0 261,250 261,250 3.74x Notes: (1) Based on the Village's Comprehensive Annual Financial Report for Year Ended April 30, 2007. (2) Debt service estimated at an average coupon rate of 4.42%.

MOTOR FUEL TAXES – THE 2008B BONDS

Motor Fuel Taxes (“MFT”)

The information in this section was obtained from the Illinois Department of Transportation, Bureau of Local Roads and Streets, “Motor Fuel Tax Funds Source, Distribution, & Uses - Municipalities.”

The Illinois Motor Fuel Tax (“MFT”) Fund is derived from a tax on the privilege of operating motor vehicles upon public highways and of operating recreational watercraft upon the waters of the State, based on the consumption of motor fuel. The motor fuel taxes deposited in the Illinois MFT fund are 19.0 cents per gallon and an additional 2.5 cents per gallon on diesel fuel.


11

The Department of Transportation (“DOT”) allocates these monies according to the MFT Fund Distribution

statute and initiates the process for distribution of motor fuel tax to counties, townships and municipalities. Each month warrants are issued to each municipal and county treasurer in the amount of such government’s share of its MFT allotment for the preceding month.

Money deposited each month in the Illinois Motor Fuel Tax Fund is distributed as follows:

a. 2 1/2 cents per gallon on diesel fuel is transferred to the State Construction Account Fund; b. $420,000 per month is transferred to the State Boating Act Fund to be used by the Department of

Natural Resources for specified boating purposes; c. $2,250,000 per month is transferred to the Grade Crossing Protection Fund for specified purposes

where local public highways cross railroads; and d. A sufficient amount of money is reserved each month to pay Department of Revenue administrative

costs, DOT supervisory costs, refunds, $30,000,000 per year to the Vehicle Inspection Fund, amounts ordered paid by the Court of Claims and International Fuel Tax Agreement payments to other states.

The remaining monies are allocated as follows:

a. 45.6% is deposited as follows:

1. 37% to the State Construction Account Fund; and 2. 63% to the Road Fund, including $1,250,000 per month to the Township Bridge Program.

b. 54.4% is distributed by the DOT as follows:

1. 49.1% to municipalities apportioned according to population; 2. 16.74% to counties having 1,000,000 or more inhabitants (Cook County); 3. 18.27% to counties having less than 1,000,000 apportioned according to proportion to motor

vehicle license fees collected; and 4. 15.89% to road districts/townships apportioned to each in proportion to total mileage of roads

in the State.

The following is a summary of Motor Fuel Tax allotments for the last five fiscal years for the Village:

Motor Fuel Tax Allotments

Fiscal Year Amount 2003.......... $111,417 2004.......... 135,114 2005.......... 182,539 2006.......... 188,602 2007.......... 240,989

Projected Debt Service Coverage Table (Motor Fuel Tax)

Net Revenue Available The

Calendar for Debt 2008B Year Service(1) Bonds(2)(3) Total(3) Coverage(3) 2010 ............. $240,989 $127,788 $127,788 1.89x 2011 ............. 240,989 125,275 125,275 1.92x 2012 ............. 240,989 126,700 126,700 1.90x 2013 ............. 240,989 127,963 127,963 1.88x 2014 ............. 240,989 129,063 129,063 1.87x Notes: (1) Based on the Village's Comprehensive Annual Financial Report for Year Ended April 30, 2007. (2) Debt service estimated at an average coupon rate of 3.25%. (3) Subject to change.


12

THE VILLAGE The Village has its beginning as home to Native Americans who called the area “Sin-Qua-Sip”. In 1835, settlers arrived at what is now known as Bliss Woods Forest Preserve. The Village was incorporated in 1957 with a population of approximately 200 residents and until the 1960’s was predominately a farming community. The Village, a non-home rule community as defined by the Illinois Constitution, is now a diverse residential community covering approximately nine square miles with a 2007 Special Census population of 8,848 residents. The Village is located 50 miles southwest of Chicago, in southern Kane County. The Northern Illinois Planning Commission estimates that the population will reach 62,742 by 2030. Policy making and legislative authority are vested in the Village Board, which consists of the Village President and six Village Trustees. The President is elected at-large to a four-year term and the Trustees are elected at-large to overlapping four-year terms. The Village Board is responsible for, among other things, passing ordinances and resolutions, adopting the budget, and appointing the Village Administrator, Village Clerk, and each of the four department heads. The Village Administrator is responsible for the day-to-day operations and staffing of the Village. Transportation Illinois State Route 56/U.S. Route 30 is a major east-west roadway through the Village and connects with I-88 approximately three miles northeast of the Village. In addition, Illinois State Route 47 is a major north-south roadway through the Village. Residents can reach the Chicago Loop in about one hour by car. Rail The Burlington Northern Santa Fe Railroad runs through the Village. While no passenger service is offered at this time, commuters may take a Metra train to Chicago from Aurora, which is located five miles east of the Village. Air O’Hare International Airport is located 30 miles northeast of the Village. Midway Airport is located 30 miles east of the Village. The Aurora Municipal Airport, established in 1959, is located across U.S. 30 from the Sugar Grove Municipal Center. Catering to a corporate clientele, the Aurora Municipal Airport features three runways that measure from 3,200 feet to 6,500 feet, an Instrument Landing System (ILS) and control tower. The Airport offers direct interstate access and handles 140,000 flights annually. Education Education is provided by West Aurora School District 129, Kaneland Community Unit School District 302, and Hinckley School District 429. Waubonsee Community College District Number 516 is a two-year public institution of higher learning that provides adult educational programs. The current enrollment is approximately 10,000 students. Other colleges are Aurora University, a four-year public institution located nearby in the City of Aurora and Northern Illinois University, located 25 miles away in DeKalb, Illinois.


13

SOCIOECONOMIC INFORMATION Employment Substantial employment is available in surrounding communities, and throughout the Chicago metropolitan area. Numerous employers are located within the Village and in surrounding communities. The following employment data shows a consistently diverse and strong growth trend for employment in Kane County. This data is NOT comparable to similar U.S. Census statistics, which would include government employment, and establishments not covered by the Illinois Unemployment Insurance Program, and could classify employment categories differently.

Kane County Private, Non-Agricultural Employment

Covered by the Illinois Unemployment Insurance Act(1) (Data as of March for each Year) 2003 2004 2005 2006 2007 Farm and Forestry.................................... 721 669 701 737 754 Mining and Quarrying................................. 80 74 71 88 123 Construction......................................... 10,793 11,183 11,170 12,250 12,136 Manufacturing........................................ 35,184 35,067 34,783 34,660 34,227 Transportation, Communications, Utilities............ 5,990 6,192 3,386 7,012 7,587 Wholesale Trade...................................... 9,052 9,376 10,142 10,596 11,105 Retail Trade......................................... 20,771 21,586 21,579 21,309 21,399 Finance, Insurance, Real Estate...................... 9,950 10,116 10,028 10,118 9,898 Services(2).......................................... 71,018 72,783 75,998 77,761 80,378 Total.............................................. 163,559 167,046 167,858 174,531 177,607 Percent Increase..................................... (0.47)(3) 2.13% 0.49% 3.98% 1.76% Notes: (1) Source: Illinois Department of Employment Security.

(2) Includes unclassified establishments. (3) Percent increase based on 164,339 employment in 2002.

Following are lists of large employers located in the Village and in the surrounding area.

Major Village Employers(1)

Approximate

Name Product/Service Employment Waubonsee Community College District Number 516.............. Education .................................................. 1,460 HFR Precision Machining Inc.................................. Precision Machining Job Shop ............................... 80 Engineering Enterprises, Inc................................. Land and Civil Engineering ................................. 70 Scot Industries, Inc......................................... Hydraulic Tubing and Chrome Plated Bars .................... 55 Village of Sugar Grove....................................... Village Government ......................................... 51 CMC Electronics.............................................. Aircraft Navigational and Head-Up Displays ................ 50 Hy-Tek Mfg. Co., Inc......................................... Commercial and Military Mechanical Assemblies ............. 45 Deep Coat Metallizing........................................ Metal Coating .............................................. 37 Lumanair Aviation Services................................... Aircraft Sales and Services ................................ 35 Edko, Inc.................................................... Electric Gate and Door Operators ........................... 30 Falex Corp................................................... Friction and Wear Testing Machines ......................... 30 Schneider Custom Stairs...................................... Wooden Staircases .......................................... 28 Executive Flight Management Transamerican Charter............ Corporate Aircraft Charter and Leasing ..................... 25 Synagro Central, Inc......................................... Bio-solids, Recycling and Wastewater Residuals Management .. 22 Quantum Sign Corp............................................ Paper and Film Converting and Cohesive Coating ............. 21 Note: (1) Source: 2008 Illinois Manufacturers Directory, 2008 Illinois Services Directory and a selective telephone survey.


14

Major Area Employers(1)

Approximate Location Name Product/Service Employment Elgin............. School District U-46...................Public School District ................................... 5,000 Naperville........ Alcatel-Lucent ........................Telecommunications Research and Development............... 5,000 Naperville........ Edwards Hospital.......................General Hospital ......................................... 4.200 Wheaton........... DuPage County Government Center........Government Administration ................................ 2,945 Aurora............ Caterpillar, Inc.......................Wheel Loaders, Compactors, Excavators, Log Skidders and Power Train Components .............................. 3,000 Naperville........ Nicor Gas..............................Gas Transmission and Distribution......................... 2,264 Batavia........... Fermi National Accelerator Laboratory..High Energy Physics Research Laboratory................... 2,000 Elgin............. Sherman Hospital.......................General Hospital ......................................... 1,702 Geneva............ Delnor-Community Hospital..............General Hospital ......................................... 1,650 Naperville........ BP Naperville Complex..................Chemical and Petrochemical Research....................... 1,600 Naperville........ OfficeMax, Inc.........................Stationery and Office Supplies ........................... 1,500 Aurora............ Rush Copley Medical Center.............Full Service Hospital .................................... 1,400 Elgin............. Provena St. Joseph Hospital............General Hospital ......................................... 1,300 Aurora............ Sanfilippo & Sons, Inc.................Potato Chips and Snack Foods ............................. 1,200 Naperville........ Tellabs................................Computer Related Services ................................ 1,200 Naperville........ Nalco Chemical Co......................Chemicals and Allied Products Corporate Headquarters...... 1,200 Aurora............ Dreyer Medical Clinic..................Medical Services ......................................... 1,000 Naperville........ Castrol Industrial North America, Inc..Lubricating Oils and Greases ............................. 1,000 Aurora............ Provena Mercy Center...................Medical and Psychiatric Hospital.......................... 945 Geneva............ Burgess Norton Mfg. Co.................Screw Machine Products, Powdered Metal Parts and Castings. 900 Note: (1) Source: 2008 Illinois Manufacturers Directory, 2008 Illinois Services Directory and a selective telephone survey.

The following tables show employment by industry and by occupation for the Village, Kane County and the State of Illinois as reported by the 2000 Census. Employment By Industry(1)

The Village Kane County State of Illinois Classification Number Percent Number Percent Number Percent Agriculture, Forestry, Fishing, Hunting, and Mining....... 14 0.70% 1,196 0.61% 66,481 1.14% Construction.............................................. 187 9.38% 14,549 7.42% 334,176 5.73% Manufacturing............................................. 340 17.05% 40,752 20.77% 931,162 15.96% Wholesale Trade........................................... 154 7.72% 9,446 4.81% 222,990 3.82% Retail Trade.............................................. 173 8.68% 22,459 11.45% 643,472 11.03% Transportation and Warehousing, and Utilities............. 122 6.12% 9,661 4.92% 352,193 6.04% Information............................................... 69 3.46% 6,601 3.36% 172,629 2.96% Finance, Insurance, Real Estate, and Rental and Leasing ... 211 10.58% 13,411 6.84% 462,169 7.92% Professional, Scientific, Management, Administrative and Waste Management Services............................ 247 12.39% 20,575 10.49% 590,913 10.13% Educational, Health and Social Services................... 238 11.94% 30,608 15.60% 1,131,987 19.41% Entertainment and Recreation Services, Accommodation and Food Services........................................ 125 6.27% 13,781 7.02% 417,406 7.16% Other Services (except Public Administration)............. 49 2.46% 7,991 4.07% 275,901 4.73% Pubic Administration...................................... 65 3.26% 5,154 2.63% 231,706 3.97% Total................................................... 1,994 100.00% 196,184 100.00% 5,833,185 100.00% Note: (1) Source: U.S. Bureau of the Census.

Employment By Occupation(1)

The Village Kane County State of Illinois Classification Number Percent Number Percent Number Percent Management and Professional.............................. 846 42.43% 63,523 32.38% 1,993,671 34.18% Service Occupations...................................... 121 6.07% 24,251 12.36% 813,479 13.95% Sales and Office Occupations............................. 585 29.34% 54,514 27.79% 1,609,939 27.60% Farming, Forestry and Fishing............................ 0 0.00% 608 0.31% 17,862 0.31% Construction, Extraction, and Maintenance................ 189 9.48% 17,467 8.90% 480,418 8.24% Production, Transportation, and Material Moving.......... 253 12.69% 35,821 18.26% 917,816 15.73% Total.................................................. 1,994 100.00% 196,184 100.00% 5,833,185 100.00% Note: (1) Source: U.S. Bureau of the Census.


15

Annual Average Unemployment Rates(1)

Calendar Kane State of Year Village County Illinois

1999 ...................... 1.5% 4.1% 4.5% 2000 ...................... 3.6% 4.3% 4.5% 2001 ...................... 4.3% 5.4% 5.4% 2002 ...................... 5.3% 6.5% 6.5% 2003 ...................... 5.4% 6.7% 6.7% 2004 ...................... 4.9% 6.1% 6.2% 2005 ...................... 4.7% 5.8% 5.8% 2006 ...................... 4.3% 4.2% 4.6% 2007 ...................... 4.9% 4.8% 5.0% 2008(2) ................... NA 6.4% 5.7%

Notes: (1) Source: Illinois Department of Employment Security. (2) Preliminary rates for the month of March 2008.

Building Permits

Residential building permits have averaged $301,260 over the last three years in the Village, excluding the value of land. This is higher than the 2000 Census median value of $184,000, which included land.

Village Building Permits(1) (Excludes the Value of Land)

Calendar Single-Family Multi-Family Total Year Units Value Number Value Value

1998 .......... 43 $ 8,351,561 1 $ 400,000 $ 8,751,561 1999 .......... 84 14,902,096 0 0 14,902,096 2000 .......... 121 26,425,783 12 914,298 27,340,081 2001 .......... 188 41,570,947 114 13,097,988 54,668,935 2002 .......... 257 66,655,643 127 18,163,197 84,818,840 2003 .......... 140 39,987,796 149 21,958,365 61,946,161 2004 .......... 236 72,721,162 52 9,696,831 82,417,993 2005 .......... 171 58,389,204 32 4,915,111 63,304,315 2006 .......... 113 38,088,663 61 9,017,301 47,105,964 2007 .......... 50 19,926,782 15 2,819,861 22,746,643

Note: (1) Sources: The Village and Comprehensive Annual Financial Reports and the Village.

Housing

The 2000 Census reported that the median home value of the Village’s owner-occupied homes was $184,000, which compares with $160,400 for Kane County and $130,800 for the State of Illinois. The 2000 market value of specified owner-occupied units for the Village, Kane County and the State of Illinois was as follows:

Specified Owner-Occupied Units(1)

The Village Kane County State of Illinois Value Number Percent Number Percent Number Percent Under $50,000.............. 0 0.00% 565 0.61% 230,049 9.31% $ 50,000 to $99,999....... 17 1.56% 12,311 13.35% 651,605 26.38% $100,000 to $149,999....... 232 21.23% 28,217 30.60% 583,409 23.62% $150,000 to $199,999....... 382 34.95% 21,013 22.79% 429,311 17.38% $200,000 to $299,999....... 234 21.41% 19,767 21.44% 344,651 13.95% $300,000 to $499,999....... 186 17.02% 8,417 9.13% 163,254 6.61% $500,000 to $999,999....... 42 3.84% 1,699 1.84% 55,673 2.25% $1,000,000 or more......... 0 0.00% 216 0.23% 12,386 0.50% Total.................... 1,093 100.00% 92,205 100.00% 2,470,338 100.00% Note: (1) Source: U.S. Bureau of the Census.


16

Income

Per Capita Personal Income

for the Ten Highest Income Counties in the State(1) Rank 2000 1..................... Lake County ................. $32,102 2..................... DuPage County ............... 31,315 3..................... McHenry County .............. 26,476 4..................... Kendall County .............. 25,188 5..................... Will County ................. 24,613 6..................... Kane County ................. 24,315 7..................... Cook County ................. 23,227 8..................... Sangamon County ............. 23,173 9..................... Monroe County ............... 22,954 10..................... Grundy County ............... 22,591 Note: (1) Source: U.S. Bureau of the Census.

The following shows a ranking of median family income for the Chicago metropolitan area among 102 Illinois counties from the 2000 Census.

Ranking of Median Family Income(1)

Ill. Family Ill. County Income Rank DuPage County .............$79,314 1 Lake County ............... 76,424 2 McHenry County ............ 71,553 3 Will County ............... 69,608 4 Kendall County ............ 69,383 5 Kane County ............... 66,558 6 Cook County ............... 53,784 14 Note: (1) Source: U.S. Bureau of the Census.

According to the 2000 Census, the Village had a median family income of $83,332. This compares to $66,558

for Kane County and $55,545 for the State of Illinois. The following table represents the distribution of family incomes for the Village, Kane County and the State of Illinois at the time of the 2000 Census.

Median Family Income(1)

The Village Kane County State of Illinois Income Number Percent Number Percent Number Percent Under $10,000.............. 12 1.09% 2,784 2.73% 156,205 5.00% $ 10,000 to $ 14,999...... 9 0.82% 1,994 1.96% 105,747 3.38% $ 15,000 to $ 24,999...... 9 0.82% 6,418 6.30% 273,712 8.76% $ 25,000 to $ 34,999...... 46 4.19% 7,993 7.84% 331,907 10.62% $ 35,000 to $ 49,999...... 64 5.83% 14,194 13.93% 506,429 16.20% $ 50,000 to $ 74,999...... 328 29.87% 25,480 25.00% 736,897 23.58% $ 75,000 to $ 99,999...... 262 23.86% 18,001 17.66% 445,390 14.25% $100,000 to $149,999....... 249 22.68% 15,907 15.61% 356,068 11.39% $150,000 to $199,999....... 60 5.46% 4,821 4.73% 101,955 3.26% $200,000 or more........... 59 5.37% 4,331 4.25% 111,008 3.55% Total.................... 1,098 100.00% 101,923 100.00% 3,125,318 100.00% Note: (1) Source: U.S. Bureau of the Census.


17

According to the 2000 Census, the Village had a median household income of $75,856. This compares to $59,351 for Kane County and $46,590 for the State of Illinois. The following table represents the distribution of household incomes for the Village Kane County and the State of Illinois at the time of the 2000 Census. Median Household Income(1)

The Village Kane County State of Illinois

Income Number Percent Number Percent Number Percent Under $10,000.............. 30 2.32% 5,511 4.12% 383,299 8.35% $ 10,000 to $ 14,999...... 37 2.86% 4,486 3.35% 252,485 5.50% $ 15,000 to $ 24,999...... 7 0.54% 11,012 8.23% 517,812 11.27% $ 25,000 to $ 34,999...... 61 4.72% 12,658 9.47% 545,962 11.89% $ 35,000 to $ 49,999...... 126 9.74% 20,694 15.47% 745,180 16.23% $ 50,000 to $ 74,999...... 373 28.85% 31,358 23.45% 952,940 20.75% $ 75,000 to $ 99,999...... 276 21.35% 20,750 15.52% 531,760 11.58% $100,000 to $149,999....... 249 19.26% 17,472 13.06% 415,348 9.04% $150,000 to $199,999....... 60 4.64% 5,128 3.83% 119,056 2.59% $200,000 or more........... 74 5.72% 4,664 3.49% 128,898 2.81% Total.................... 1,293 100.00% 133,733 100.00% 4,592,740 100.00% Note: (1) Source: U.S. Bureau of the Census

Retail Activity

Following is a summary of the Village’s sales tax receipts as collected and disbursed by the State of Illinois.

Retailers’ Occupation, Service Occupation and Use Tax(1)

Village Fiscal Year State Sales Tax Annual Percent Ending April 30 Distributions(2) Change + (-)

1998 ..................................... $114,313 6.14% 1999 ..................................... 103,896 (9.11%) 2000 ..................................... 325,448 213.24% (4) 2001 ..................................... 289,426 (11.07%) (4) 2002 ..................................... 161,880 (44.07%) (4) 2003 ..................................... 172,851 6.78% 2004 ..................................... 206,092 19.23% 2005 ..................................... 247,481 20.09% 2006 ..................................... 290,848 17.52% 2007 ..................................... 422,508 45.27% (5) Growth from 1998 to 2007 ........................................... 269.61%

Notes: (1) Source: The Village and Comprehensive Annual Financial Reports. (2) Tax distributions are the 1% municipal portion of the Retailers'

Occupation, Service Occupation and Use Tax, collected on behalf of the Village, less a State administration fee. The municipal 1% includes tax receipts from the sale of food and drugs which are not taxed by the State.

(3) The 1998 percentage is based on a 1997 Sales Tax of $107,699. (4) The Village had a Sales Tax Rebate Agreement with Edward Hines Lumber

Company beginning in September 1999. The company moved operations to a location outside of the Village in January 2001.

(5) The Village had a Jewel-Osco store open in April 2006, with which it has a sales tax agreement.


18

THE PROJECTS – THE 2008A AND 2008B BONDS Series 2008A

The Series 2008A proceeds will be used to finance improvements to the System of the Village and to pay the costs of issuing the 2008A bonds. The project includes extending a water main from an existing main to a site where a new middle school is under construction. In addition, a portion of the funds will be used to extend another water main located on Municipal Drive and north of Route 30 in anticipation of future commercial development. The project includes but is not limited to the described construction. Series 2008B

The Series 2008B proceeds will be used to finance improvements to, but not limited to, Wheeler Road, Hankes Road and any other Illinois Department of Transportation approved project and to pay the cost of issuing the 2008B Bonds. The Village’s Comprehensive Pavement Maintenance Program for fiscal year 2008 - 2009 has been developed as a four-part program utilizing motor fuel tax funds, the General Fund transfer authorized by the Village Board for FYE 07, the Local Agency Pavement Preservation (LAPP) program funding, as well as the proceeds. The LAPP program, administered locally by the Kane/Kendall Council of Mayors, will provide federal matching dollars totaling approximately 70% through the Surface Transportation Program (STP) for Wheeler and Hankes Roads. The Village will utilize approximately half of its motor fuel tax receipts, General Fund transfer, and proceeds for its portion (approximately 30%) of the LAPP projects, while the remainder will be used for the Village’s normal road maintenance program.


19

DEBT INFORMATION

After issuance of the Bonds, the Village will have outstanding $17,970,000* principal amount of general obligation debt of which $17,720,000* consists of general obligation alternate revenue source debt. The Village also has outstanding $4,801,147 principal amount of Illinois Environmental Protection Agency loans. The Village does not anticipate issuing bonds within the next six months.

General Obligation Bonded Debt(1) (Principal Only)

Cumulative Calendar Series Series Series Series Series Outstanding Series Series Total Principal Retired(6) Year 1991 2001(2) 2002(3) 2006(3) 2006A(4) Bonds 2008A(3) 2008B(5)(6) Debt(6) Amount Percent

2008.......... $ 0 $ 0 $ 0 $ 0 $ 410,000 $ 410,000 $ 0 $ 0 $ 410,000 $ 410,000 2.28% 2009.......... 75,000 170,000 150,000 30,000 425,000 850,000 0 0 850,000 1,260,000 7.01% 2010.......... 85,000 180,000 155,000 35,000 440,000 895,000 80,000 100,000 1,075,000 2,335,000 12.99% 2011.......... 90,000 190,000 165,000 35,000 355,000 835,000 80,000 110,000 1,025,000 3,360,000 18.70% 2012.......... 0 200,000 125,000 35,000 345,000 705,000 135,000 115,000 955,000 4,315,000 24.01% 2013.......... 0 210,000 0 255,000 360,000 825,000 60,000 120,000 1,005,000 5,320,000 29.60% 2014.......... 0 225,000 0 285,000 375,000 885,000 45,000 125,000 1,055,000 6,375,000 35.48% 2015.......... 0 235,000 0 300,000 395,000 930,000 50,000 0 980,000 7,355,000 40.93% 2016.......... 0 245,000 0 315,000 415,000 975,000 50,000 0 1,025,000 8,380,000 46.63% 2017.......... 0 260,000 0 325,000 435,000 1,020,000 50,000 0 1,070,000 9,450,000 52.59% 2018.......... 0 275,000 0 290,000 455,000 1,020,000 100,000 0 1,120,000 10,570,000 58.82% 2019.......... 0 290,000 0 230,000 475,000 995,000 150,000 0 1,145,000 11,715,000 65.19% 2020.......... 0 305,000 0 225,000 500,000 1,030,000 160,000 0 1,190,000 12,905,000 71.81% 2021.......... 0 320,000 0 220,000 525,000 1,065,000 175,000 0 1,240,000 14,145,000 78.71% 2022.......... 0 0 0 0 550,000 550,000 185,000 0 735,000 14,880,000 82.80% 2023.......... 0 0 0 0 575,000 575,000 190,000 0 765,000 15,645,000 87.06% 2024.......... 0 0 0 0 600,000 600,000 200,000 0 800,000 16,445,000 91.51% 2025.......... 0 0 0 0 650,000 650,000 205,000 0 855,000 17,300,000 96.27% 2026.......... 0 0 0 0 0 0 210,000 0 210,000 17,510,000 97.44% 2027.......... 0 0 0 0 0 0 210,000 0 210,000 17,720,000 98.61% 2028.......... 0 0 0 0 0 0 250,000 0 250,000 17,970,000 100.00% Total....... $250,000 $3,105,000 $595,000 $2,580,000 $8,285,000 $14,815,000 $2,585,000 $570,000 $17,970,000

Notes: (1) Source: the Village. (2) The Series 2001 bonds are alternate bonds payable from income, sales and utility taxes. (3) The Series 2002, Series 2006 and Series 2008A bonds are alternate bonds payable from water and sewer revenues. (4) The Series 2006A Bonds are payable from the Local Government Distributive fund, the utility tax receipts, the capital improvement impact fees and the road fees. (5) The Series 2008B bonds are alternate bonds payable from the Motor Fuel Tax. (6) Subject to change.

*Subject to change.


20

Detailed Overlapping Bonded Debt(1)

Outstanding Applicable to Village Debt(2) Percent(3) Amount

Schools: West Aurora Community School District Number 129 .. $117,610,000 0.62% $ 729,182 Kaneland Community School District Number 302 ..... 91,535,832 20.12% 18,417,009 Hinckley School District Number 429............... 13,675,000 3.31% 452,643 Waubonsee Community College District Number 516 ... 76,300,796 3.25% 2,479,776 Total Schools........................................................................ $22,078,610 Kane County....................................... $ 87,240,000 2.18% $ 1,901,832 Kane County Forest Preserve District.............. 260,115,866 2.18% 5,670,526 Sugar Grove Special Service Area Number 1......... 442,730 100.00% 442,730 Sugar Grove Special Service Area Number 2......... 115,594 100.00% 115,594 Sugar Grove Public Library District............... 7,670,000 60.48% 4,638,816 Total Other......................................................................... $12,769,498 Total Schools and Other Overlapping Bonded Debt ..................................... $34,848,108 Notes: (1) Source: Kane County Clerk.

(2) As of March 31, 2008. (3) Overlapping debt percentages based on 2007 EAV, the most current available.

Statement of Bonded Indebtedness(1)

Ratio To Per Capita Amount Equalized Estimated (2007 Special Applicable Assessed Actual Census 8,848)

Village EAV of Taxable Property, 2007 ........... $322,044,958 100.00% 33.33% $ 36,397.49 Estimated Actual Value, 2007 .................... $966,134,874 300.00% 100.00% $109,192.46 Total Direct Bonded Debt(2) ..................... $ 17,970,000 5.58% 1.86% $ 2,030.97 Less: Self-Supported Debt(2)(3) ................ (17,720,000) (5.50%) (1.83%) (2,002.71) Net Direct Bonded Debt ........................ $ 250,000 0.08% 0.03% $ 28.25 Overlapping Bonded Debt(4): Schools ......................................... $ 22,078,610 6.86% 2.29% $ 2,495.32 Other ........................................... 12,769,498 3.97% 1.32% 1,443.21 Total Overlapping Bonded Debt ................. $ 34,848,108 10.82% 3.61% $ 3,938.53 Net Direct and Total Overlapping Bonded Debt(2) $ 35,098,108 10.90% 3.63% $ 3,966.78 Notes (1) Source: Kane County Clerk.

(2) Subject to change. (3) Self-supported debt includes the Series 2001 Bonds, the Series 2002 Bonds, the Series 2006

Bonds, the Series 2006A Bonds and the Bonds. (4) As of March 31, 2008.


21

Legal Debt Margin(1)

2007 Village Equalized Assessed Valuation ................................................. $322,044,958 Statutory Debt Limitation (8.625% of EAV) ................................................. $ 27,776,378 General Obligation Debt: Series 1991............................................ $ 250,000 Series 2001(2)......................................... 3,105,000 Series 2002(2)......................................... 595,000 Series 2006(2)......................................... 2,580,000 Series 2006A(2)........................................ 8,285,000 The Bonds: Series 2008A(2)........................................ 2,585,000 Series 2008B(2)(3)..................................... 570,000 Total General Obligation Debt(3)..................... $ 17,970,000 Less Alternate Revenue Source Bonds(2)(3) .............. $(17,720,000) Total Applicable Debt..................................................................... $ 250,000 Legal Debt Margin......................................................................... $27,526,378 Notes: (1) Source: the Village

(2) As general obligation alternate bonds under Illinois Statutes, the Bonds do not count against the 8.625% of EAV debt limit for general obligation bonded debt, so long as the debt service levy for such bonds is abated annually and not extended. (3) Subject to change.

PROPERTY ASSESSMENT AND TAX INFORMATION

For the 2007 levy year, the Village’s EAV was comprised of approximately 88% residential, 4% industrial, 6% commercial, 1% farm and less than 1% railroad property valuations.

Equalized Assessed Valuation(1) Levy Years Property Class 2003 2004 2005 2006 2007 Residential............ $141,744,773 $179,336,717 $213,346,305 $260,596,815 $284,696,914 Farm................... 2,377,441 2,377,897 2,836,278 3,756,701 3,893,326 Commercial............. 10,546,838 10,536,212 12,129,466 18,207,794 21,612,111 Industrial............. 7,492,112 8,076,853 8,548,379 9,748,563 11,774,208 Railroad............... 64,197 62,801 58,028 60,748 68,399 Total................ $162,225,361 $200,390,480 $236,918,456 $292,370,621 $322,044,958 Percent Change.......... 22.03%(2) 23.53% 18.23% 23.41% 10.15% Notes: (1) Source: Kane County Clerk. (2) Reassessment year. (3) Percentage change based on 2002 EAV of $132,941,599.


22

Representative Tax Rates(1) (Per $100 EAV)

Levy Years 2003 2004 2005 2006 2007

Village Rates: Corporate............................. $0.2241 $0.1818 $0.1742 $0.1619 $0.1593 Liability Insurance................... 0.0600 0.0486 0.0466 0.0433 0.0427 Police Protection..................... 0.0448 0.0363 0.0348 0.0324 0.0319 Police Pension........................ 0.0000 0.0535 0.0513 0.0477 0.0469 Audit................................. 0.0069 0.0056 0.0054 0.0050 0.0049 Social Security....................... 0.0641 0.0520 0.0498 0.0463 0.0456 Street Lighting....................... 0.0091 0.0073 0.0071 0.0066 0.0065 IMRF.................................. 0.0629 0.0510 0.0489 0.0454 0.0447 Bond and Interest..................... 0.0607 0.0494 0.0398 0.0324 0.0293 Total City Rates (2)................ $0.5326 $0.4855 $0.4580 $0.4210 $0.4118 Kane County........................... 0.3578 0.3467 0.3367 0.3452 0.3322 Kane County Forest Preserve........... 0.1270 0.1432 0.1905 0.1747 0.1974 Sugar Grove Park District............. 0.1291 0.1587 0.1569 0.1424 0.1398 Sugar Grove Township(3)............... 0.3186 0.2958 0.2841 0.2656 0.2617 Sugar Grove Water Authority........... 0.0033 0.0028 0.0024 0.0019 0.0019 Sugar Grove Fire District............. 0.4980 0.5680 0.5432 0.5066 0.4970 Sugar Grove Public Library............ 0.1114 0.2362 0.2212 0.1984 0.1926 Unit School District Number 302....... 4.6805 4.5024 4.8886 4.6796 4.8411 Community College District Number 516. 0.4134 0.4099 0.3933 0.3983 0.3950 Sugar Grove Community Building........ 0.0279 0.0236 0.0227 0.0213 0.0209 Total Tax Rates (4)................. $7.1996 $7.1728 $7.4977 $7.1550 $7.2914

Notes: (1) Source: Kane County Clerk. (2) Statutory tax rate limits for the Village are: Corporate ($0.3330); Police Protection ($0.0750); and Street

Lighting ($0.0500). (3) Includes Road and Bridge. (4) Representative tax rates for other government units are from Sugar Grove Township tax code 22, which represents

a majority of the Village's 2007 EAV.

Tax Extensions and Collections(1)

Levy Coll. Taxes Total Collections Year Year Extended(2) Amount(3) Percent 2002 .....2003 ...... $ 745,669 $ 742,547 99.58% 2003 .....2004 ...... 864,012 909,171 105.23% 2004 .....2005 ...... 973,737 971,732 99.79% 2005 .....2006 ...... 1,085,167 1,124,578 103.63% 2006 .....2007 ...... 1,268,694 1,269,953 100.10% 2007 .....2008 ...... 1,326,039 -----In Collection---- Note: (1) Sources: Kane County Treasurer and Village's

Comprehensive Annual Financial Report for the Fiscal Year Ended April 30, 2007.

(2) Total collections include protests, back taxes, forfeitures and tax objections.


23

Principal Taxpayers(1)

Taxpayer Name Business/Service 2007 EAV(2) Sav-On Realty, Inc. ...................... Real Property ....................................... $ 3,397,478 Scot Industries, Inc. .................... Real Property ....................................... 1,847,284 Sugar Grove Holding LLC .................. Commercial Property ................................. 1,425,129 Kimball Hill Homes Illinois LLC........... Residential Property ................................ 1,285,482 KH SRAV I, LLC ........................... Residential Property ................................ 1,158,159 Waterford Real Estate Development Corp.... Residential Property ................................ 1,125,602 Winding Road LLC ......................... Commercial Property ................................. 896,278 Campbell & Pierce Inc. ................... Commercial Property ................................. 839,830 Individual ............................... Commercial Property ................................. 685,003 Heartland LLC ............................ Industrial Property ................................. 683,894 Total .................................. .................................................... $13,344,139 Ten largest as a percent of the Village's 2007 EAV ($322,044,958)............................ 4.14% Note: (1) Source: Sugar Grove Township Assessor. (2) Every effort has been made to seek out and report the largest taxpayers. However, many of the

taxpayers listed contain multiple parcels and it is possible that some parcels and their valuations have been overlooked. The 2007 EAV is the most current available.

REAL PROPERTY ASSESSMENT, TAX LEVY AND COLLECTION Tax Levy and Collection Procedures

Local Assessment Officers determine the assessed valuation of taxable real property and railroad property not

held or used for railroad operations. The Illinois Department of Revenue (the “Department”) assesses certain other types of taxable property, including railroad property held or used for railroad operations. Local Assessment Officers’ valuation determinations are subject to review at the county level and then, in general, to equalization by the Department. Such equalization is achieved by applying to each county’s assessments a multiplier determined by the Department. The purpose of equalization is to provide a common basis of assessments among counties by adjusting assessments toward the statutory standard of 33-1/3% of fair cash value. Farmland is assessed according to a statutory formula which takes into account factors such as productivity and crop mix. Taxes are extended against the assessed values after equalization.

Property tax levies of each taxing body are filed in the office of the county clerk of each county in which

territory of that taxing body is located. The county clerk computes the rates and amount of taxes applicable to taxable property subject to the tax levies of each taxing body and determines the dollar amount of taxes attributable to each respective parcel of taxable property. The county clerk then supplies to the appropriate collecting officials within the county the information needed to bill the taxes attributable to the various parcels therein. After the taxes have been collected, the collecting officials distribute to the various taxing bodies their respective shares of the taxes collected. Taxes levied in one calendar year are due and payable in two installments during the next calendar year. Taxes that are not paid when due, or that are not paid by mail and postmarked on or before the due date, are subject to a penalty of 1-1/2% per month until paid. Unpaid property taxes, together with penalties, interest and costs, constitute a lien against the property subject to the tax.


24

Exemptions

An annual General Homestead Exemption provides that the Equalized Assessed Valuation (“EAV”) of certain property owned and used for residential purposes (“Residential Property”) may be reduced by the amount of any increase over the 1977 EAV, up to a maximum reduction of $3,500 for assessment years prior to assessment year 2004 in counties with less than 3,000,000 inhabitants, and a maximum reduction of $5,000 for assessment year 2004 through 2007 in all counties. Additionally, the maximum reduction is $5,500 for assessment year 2008 and the maximum reduction is $6,000 for assessment year 2009 and thereafter in all counties.

The Homestead Improvement Exemption applies to Residential Properties that have been improved or rebuilt in the 2 years following a catastrophic event. The exemption is limited to $45,000 through December 31, 2003, and $75,000 per year beginning January 1, 2004 and thereafter, to the extent the assessed value is attributable solely to such improvements or rebuilding.

Additional exemptions exist for senior citizens. The Senior Citizens Homestead Exemption (“Senior Citizens Homestead Exemption”) operates annually to reduce the EAV on a senior citizen’s home for assessment years prior to 2004 by $2,000 in counties with less than 3,000,000 inhabitants. For assessment years 2004 and 2005, the maximum reduction is $3,000 in all counties. For assessment years 2006 and 2007, the maximum reduction is $3,500 in all counties. In addition, for assessment year 2008 and thereafter, the maximum reduction is $4,000 for all counties. Furthermore, beginning with assessment year 2003, for taxes payable in 2004, property that is first occupied as a residence after January 1 of any assessment year by a person who is eligible for the Senior Citizens Homestead Exemption must be granted a pro rata exemption for the assessment year based on the number of days during the assessment year that the property is occupied as a residence by a person eligible for the exemption.

A Senior Citizens Assessment Freeze Homestead Exemption (“Senior Citizens Assessment Freeze Homestead Exemption”) freezes property tax assessments for homeowners, who are 65 and older and receive a household income not in excess of the maximum income limitation. The maximum income limitation is $35,000 for years prior to 1999, $40,000 for assessment years 1999 through 2003, $45,000 for assessment years 2004 and 2005, $50,000 from assessment years 2006 and 2007 and for assessments year 2008 and after, the maximum income limitation is $55,000. In general, the Exemption limits the annual real property tax bill of such property by granting to qualifying senior citizens an exemption as to a portion of the valuation of their property. In counties with a population of 3,000,000 or more, the exemption for all assessment years is equal to the EAV of the residence in the assessment year for which application is made less the base amount. Furthermore, for those counties with less than 3,000,000, the exemption is as follows: through assessment year 2005 and for assessment year 2007 and later, the exempt amount is the difference between (i) the current EAV of their residence and (ii) the base amount, which is the EAV of a senior citizen’s residence for the year prior to the year in which he or she first qualifies and applies for the Exemption (plus the EAV of improvements since such year). For assessment year 2006, the amount of the exemption phases out as the amount of household income increases. The amount of the exemption is calculated by using the same formula as above, and then multiplying the resulting value by a ratio that varies according to household income.

Another exemption available to disabled veterans operates annually to exempt up to $70,000 of the Assessed Valuation of property owned and used exclusively by such veterans or their spouses for residential purposes. Also, certain property is exempt from taxation on the basis of ownership and/or use, such as public parks, not-for-profit schools and public schools, churches, and not-for-profit hospitals and public hospitals. However, individuals claiming exemption under the Disabled Persons’ Homestead Exemption (“Disabled Persons’ Homestead Exemption”) or the Disabled Veterans Standard Homestead Exemption (“Disabled Veterans Standard Homestead Exemption”) cannot claim the aforementioned exemption.


25

Furthermore, beginning with assessment year 2007, the Disabled Persons’ Homestead Exemption provides an

annual homestead exemption in the amount of $2,000 for property that is owned and occupied by certain persons with a disability. However, individuals claiming exemption as a disabled veteran or claiming exemption under the Disabled Veterans Standard Homestead Exemption cannot claim the aforementioned exemption.

In addition, the Disabled Veterans Standard Homestead Exemption provides disabled veterans an annual

homestead exemption starting with assessment year 2007 and thereafter. Specifically, (i) those veterans with a service-connected disability of 75% are granted an exemption of $5,000 and (ii) those veterans with a service-connected disability of less than 75%, but at least 50% are granted an exemption of $2,500. Furthermore, the veteran’s surviving spouse is entitled to the benefit of the exemption, provided that the spouse has legal or beneficial title of the homestead, resides permanently on the homestead and does not remarry. Moreover, if the property is sold by the surviving spouse, then an exemption amount not to exceed the amount specified by the current property tax roll may be transferred to the spouse’s new residence, provided that it is the spouse’s primary residence and the spouse does not remarry. However, individuals claiming exemption as a disabled veteran or claiming exemption under the Disabled Persons’ Homestead Exemption cannot claim the aforementioned exemption.

Beginning with assessment year 2007, the Returning Veterans’ Homestead Exemption (“Returning Veterans’

Homestead Exemption”) is available for property owned and occupied as the principal residence of a veteran in the assessment year the veteran returns from an armed conflict while on active duty in the United States armed forces. This provision grants a homestead exemption of $5,000, which is applicable in all counties. In order to apply for this exemption, the individual must pay real estate taxes on the property, own the property or have either a legal or an equitable interest in the property, “or a leasehold interest of land on which a single family residence is located, which is occupied as a principle residence of a veteran returning from an armed conflict involving the armed forces of the United States who has an ownership interest therein, legal, equitable or as a lessee, and on which the veteran is liable for the payment of property taxes.” Those individuals eligible for this exemption may claim the exemption in addition to other homestead exemptions, unless otherwise noted.

Property Tax Extension Limitation Law

The Property Tax Extension Limitation Law, as amended (the “Limitation Law”), limits the annual growth in the amount of property taxes to be extended for certain Illinois non-home-rule units, including the Village. In general, the annual growth permitted under the Limitation Law is the lesser of 5% or the percentage increase in the Consumer Price Index during the calendar year preceding the levy year. Taxes can also be increased due to new construction, referendum approval of tax rate increases, mergers and consolidations.

The effect of the Limitation Law is to limit the amount of property taxes that can be extended for a taxing body.

In addition, general obligation bonds, notes and installment contracts payable from ad valorem taxes unlimited as to rate and amount cannot be issued by the affected taxing bodies unless they are approved by referendum, are alternate bonds or are for certain refunding purposes.

The Village has the authority to levy taxes for many different purposes. See the table entitled Representative

Tax Rates under “PROPERTY ASSESSMENT AND TAX INFORMATION” herein. The ceiling at any particular time on the rate at which these taxes may be extended for the Village is either (i) unlimited (as provided by statute), (ii) initially set by statute but permitted to be increased by referendum, (iii) capped by statute, or (iv) limited to the rate approved by referendum. Public Act 94-0976, effective June 30, 2006, provides that the only ceiling on a particular tax rate is the ceiling set by statute above, at which the rate is not permitted to be further increased by referendum or otherwise. Therefore, taxing districts (such as the Village) will have increased flexibility to levy taxes for the purposes for which they most need the money. The total aggregate tax rate for the various purposes subject to the Limitation Law, however, will not be allowed to exceed the Village’s limiting rate computed in accordance with the provisions of the Limitation Law.


26

Local governments, including the Village, can issue limited tax bonds in lieu of general obligation bonds that

have otherwise been authorized by applicable law.

Truth in Taxation Law Legislation known as the Truth in Taxation Law (the “Law”) limits the aggregate amount of certain taxes which

can be levied by, and extended for, a taxing district to 105% of the amount of taxes extended in the preceding year unless specified notice, hearing and certification requirements are met by the taxing body. The express purpose of the Law is to require published disclosure of, and hearing upon, an intention to adopt a levy in excess of the specified levels.

FINANCIAL INFORMATION

Investment Policy It is the policy of the Village to invest public funds in a manner which will provide the highest investment return with the maximum security while meeting the daily cash flow demands of the Village and conforming to all State of Illinois statutes and Village codes governing the investment of public funds. Objective The primary objectives, in priority order, of the Village’s investment activities shall be:

(1) Safety: Safety of principal is the foremost objective of the investment program. Investments of the Village shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio.

(2) Liquidity: The Village’s investment portfolio will remain sufficiently liquid to enable the Village to

meet all operating requirements which might be reasonably anticipated.

(3) Return on investment: The Village’s investment portfolio shall be designed with the objective of attaining a market rate of return throughout the budgetary and economic cycles, taking into account the Village’s investment risk constraints and the cash flow characteristics of the portfolio.


27

Financial Reports The Village’s financial statements are audited annually by certified public accountants and are in conformity with accounting principles generally accepted in the United States of America. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. See APPENDIX A for more detail. No Consent or Updated Information Requested of the Auditor

The tables and excerpts (collectively, the “Excerpted Financial Information”) contained in this “FINANCIAL INFORMATION” section and in APPENDIX A are from the audited financial statements of the Village, including the audited financial statements for the fiscal year ended April 30, 2007 (the “2007 Audit”). The 2007 Audit has been prepared by Lauterbach & Amen, LLP, Certified Public Accountants, Warrenville, Illinois (the “Auditor”), and approved by formal action of the Village Board. The Village has not requested the Auditor to update information contained in the Excerpted Financial Information; nor has the Village requested that the Auditor consent to the use of the Excerpted Financial Information in this Official Statement. Other than as expressly set forth in this Official Statement, the financial information contained in the Excerpted Financial Information has not been updated since the date of the 2007 Audit. The inclusion of the Excerpted Financial Information in this Official Statement in and of itself is not intended to demonstrate the fiscal condition of the Village since the date of the 2007 Audit. Questions or inquiries relating to financial information of the Village since the date of the 2007 Audit should be directed to the Village. Summary Financial Information

The following tables are summaries and do not purport to be the complete audits, copies of which are available upon request. See APPENDIX A for excerpts of the Village’s 2007 fiscal year audit.


28

Statement of Net Assets Governmental Activities

Audited As of April 30 2005 2006 2007

ASSETS: Current Assets: Cash and Cash Equivalents.............................. $ 327,714 $ 2,928,655 $12,315,760 Investments........................................... 4,645,636 2,687,566 2,277,488 Receivables: Property Taxes........................................ 1,023,006 1,127,257 1,264,207 Other Taxes........................................... 240,006 384,933 471,924 Intergovernmental..................................... 11,090 442,854 357,943 Interest.............................................. 0 23,174 244,864 Other................................................. 133,109 182,605 163,479 Internal Balances..................................... (2) 2,447 18,462 Prepaid Items......................................... 76,553 77,933 84,482 Total Current Assets................................. $ 6,457,112 $ 7,857,424 $17,198,609 Noncurrent: Deferred Charges...................................... $ 0 $ 0 $ 128,572 Capital Assets (Net of Accumulated Depreciation): Land.................................................. 2,180,156 4,747,077 7,956,463 Construction in Progress.............................. 0 3,600 1,013,753 Infrastructure........................................ 0 3,308,401 6,278,646 Buildings............................................. 3,389,701 1,902,927 1,853,650 Improvements Other Than Buildings..................... 68,833 102,613 95,893 Vehicles and Equipment................................ 455,945 604,745 786,875 Total Noncurrent Assets.............................. $ 6,094,635 $10,669,363 $18,113,852 Total Assets......................................... $12,551,747 $18,526,787 $35,312,461 LIABILITIES: Current: Accounts Payable...................................... $ 241,683 $ 368,563 $ 366,473 Wages Payable......................................... 32,276 33,625 50,710 Deposits Payable...................................... 99,441 179,875 441,829 Sales Tax Rebate Payable.............................. 0 0 115,617 Arbitrage Payable..................................... 0 0 77,477 Accrued Interest...................................... 64,342 60,959 359,139 Deferred Revenue - Property Tax....................... 1,023,006 1,127,257 1,264,207 Deferred Revenue - Other.............................. 65,828 0 0 Other Liabilities..................................... 21,371 13,713 15,942 Total Current Liabilities............................ $ 1,547,947 $ 1,783,992 $ 2,691,394 Long-term Liabilities: Amounts Due Within One Year........................... $ 210,000 $ 293,653 $ 529,568 Amounts Due Beyond One Year........................... 3,866,288 3,591,650 11,685,916 Total Noncurrent Liabilities......................... $ 4,076,288 $ 3,885,303 $12,215,484 Total Liabilities.................................... $ 5,624,235 $ 5,669,295 $14,906,878 Net Assets: Invested in Capital Assets, Net of Related Debt ....... $ 2,228,347 $ 6,859,363 $14,016,691 Restricted ........................................... 57,860 41,586 8,179,293 Unrestricted.......................................... 4,641,305 5,956,543 (1,790,401) Total Net Assets..................................... $ 6,927,512 $12,857,492 $20,405,583


29

General Fund Balance Sheet

Audited As of April 30 2003 2004 2005 2006 2007 ASSETS: Cash and Investments.................... $1,301,005 $1,414,555 $1,633,750 $1,817,872 $2,193,724 Receivables:............................ Property Taxes......................... 693,953 814,590 923,833 1,032,859 1,169,552 Other.................................. 131,192 108,672 358,832 549,302 628,874 Due From Other Governments.............. 78,456 121,267 11,090 8,881 7,799 Due From Other Funds.................... 0 0 198 2,447 19,002 Prepaid Items........................... 41,033 39,197 76,553 77,933 84,482 Total Assets.......................... $2,245,639 $2,498,281 $3,004,256 $3,489,294 $4,103,433 LIABILITIES: Accounts Payable........................ $ 171,987 $ 149,642 $ 210,343 $ 205,647 $ 134,468 Accrued Payroll......................... 33,313 22,453 32,276 33,625 50,710 Deposits Payable........................ 0 144,920 99,441 179,875 441,829 Sales Tax Rebate Payable................ 0 0 0 0 115,617 Deferred Revenues....................... 702,703 823,339 1,047,348 1,094,031 1,255,713 Compensated Absences Payable............ 46,205 53,267 0 0 0 Due to Other Funds...................... 10,208 0 200 0 247,533 Other Liabilities....................... 0 0 21,371 13,713 15,942 Total Liabilities..................... $ 964,416 $1,193,621 $1,410,979 $1,526,891 $2,261,812 FUND BALANCE:........................... Unreserved.............................. $1,240,190 $1,265,463 $1,516,724 $1,884,470 $1,757,139 Reserved................................ 41,033 39,197 76,553 77,933 84,482 Total Fund Balance.................... $1,281,223 $1,304,660 $1,593,277 $1,962,403 $1,841,621 Total Liabilities and Fund Balance.... $2,245,639 $2,498,281 $3,004,256 $3,489,294 $4,103,433

Statement of Activities Governmental Activities

Net (Expense) Revenue and Change in Net Assets Audited Year Ended April 30 2005 2006 2007

PRIMARY GOVERNMENT(1): General Government................................... $ (309,650) $ (74,384) $ (276,289) Public Safety........................................ (893,644) (1,149,830) (1,461,963) Highways and Streets................................. (338,613) 5,401,142 5,287,760 Interest Expense..................................... (199,615) (189,832) (469,079) Total Governmental Activities...................... $(1,741,522) $ 3,987,096 $ 3,080,429 GENERAL REVENUES: Taxes Property............................................ $ 909,171 $ 1,020,864 $ 1,124,578 Income.............................................. 419,200 501,456 686,381 Sales............................................... 299,274 294,015 444,728 Electric............................................ 219,231 233,888 247,629 Natural Gas......................................... 121,180 184,573 158,172 Telecommunications.................................. 341,355 352,759 356,449 Other............................................... 70,628 270,890 345,583 Investment Income.................................... 90,740 216,364 626,646 Special Item: Miscellaneous....................................... 102,423 267,374 270,438 Gain (Loss) on Sale of Capital Assets................ 0 15,064 31,853 Transfers............................................ 155,469 157,854 175,205 Total General Revenues, Special Items and Transfers $2,728,671 $ 3,515,101 $ 4,467,662 Change in Net Assets................................. $ 987,149 $ 7,502,197 $ 7,548,091 Net Assets - Beginning............................... 5,940,363 5,355,295 (2) 12,857,492 Net Assets - Ending.................................. $6,927,512 $12,857,492 $20,405,583 Notes: (1) Expenses net of program revenues of Charges for Services, Operating Grants and Contributions, and Capital Grants and Contributions. (2) As restated.


30

General Fund Revenues and Expenditures

Audited Fiscal Year Ending April 30 2003 2004 2005 2006 2007 REVENUES: Taxes................................... $1,209,218 $1,466,243 $2,224,300 $2,567,378 $3,003,354 Charges for Services.................... 223,428 402,767 591,897 1,198,302 742,396 Licenses and Permits.................... 395,547 440,067 469,495 404,465 422,503 Intergovernmental....................... 328,422 307,593 25,417 56,968 68,111 Fines and Forfeits...................... 144,965 108,255 176,315 180,447 191,144 Interest................................ 21,892 30,692 38,906 82,223 131,471 Miscellaneous........................... 80,325 19,458 15,189 165,366 167,612 Total Revenues........................ $2,403,797 $2,775,075 $3,541,519 $4,655,149 $4,726,591 EXPENDITURES: Current: General Government..................... $1,033,073 $1,156,691 $1,788,777 $2,119,886 $2,200,397 Public Safety.......................... 840,645 884,383 1,051,698 1,302,644 1,566,444 Highways and Streets................... 238,603 337,500 351,888 371,884 555,433 Culture and Recreation................. 230,138 269,098 0 0 0 Total Expenditures.................... $2,342,459 $2,647,672 $3,192,363 $3,794,414 $4,322,274 Excess (Deficiency) of Revenues Over (Under) Expenditures................... $ 61,338 $ 127,403 $ 349,156 $ 860,735 $ 404,317 Other Financing Sources (Uses):......... Operating Transfers In................. $ 0 $ 12,500 $ 104,615 $ 79,517 $ 128,017 Operating Transfers Out................ 0 (116,466) (270,712) (571,126) (653,116) Total Other Financing Sources (Uses).. $ 0 $ (103,966) $ (166,097) $ (491,609) $ (525,099) Excess (Deficiency) of Revenues and Other Financing Sources Over (Under) Expenditures And Other Financing Uses.............. $ 61,338 $ 23,437 $ 183,059 $ 369,126 $ (120,782) Beginning Fund Balance.................. $1,214,267 $1,281,223 $1,410,218 (1) $1,593,277 $1,962,403 Residual Equity Transfers In (Out)...... 5,618 0 0 0 0 Ending Fund Balance..................... $1,281,223 $1,304,660 $1,593,277 $1,962,403 $1,841,621 Note: (1) Restated.


31

Statement of Net Assets Waterworks and Sewerage Fund

Audited As of April 30 2005 2006 2007

ASSETS: Current Assets: Cash and Cash Equivalents................................ $ 292,362 $ 4,898,413 $ 4,590,786 Investments.............................................. 4,465,871 823,460 1,153,323 Receivables: Accounts................................................ 157,165 160,282 163,323 Interest................................................ 0 41,625 36,818 Other................................................... 6,972 171,650 5,651 Prepaid Items............................................ 76,553 77,933 84,482 Total Current Assets................................... $ 4,998,923 $ 6,173,363 $ 6,034,383 Noncurrent: Deferred Charges........................................ $ 74,594 $ 64,827 $ 54,130 Capital Assets (Net of Accumulated Depreciation): Land.................................................... 72,003 231,723 231,723 Construction in Progress................................ 2,166,352 790,213 231,436 Infrastructure.......................................... 10,937,270 14,702,265 17,580,047 Buildings............................................... 0 1,403,937 1,370,377 Improvements Other Than Buildings....................... 197,394 184,379 307,256 Vehicles and Equipment.................................. 404,624 346,066 637,362 Total Noncurrent Assets................................ 13,852,237 17,723,410 20,412,331 Total Assets........................................... $18,851,160 $23,896,773 $26,446,714 LIABILITIES: Current: Accounts Payable........................................ $ 329,867 $ 286,304 $ 129,814 Wages Payable........................................... 6,794 8,095 12,812 Accrued Interest........................................ 104,077 101,330 95,064 Due to Other funds...................................... 41,233 61,124 20,427 Deferred Revenue - Other................................ 21,000 73,813 21,000 Other Liabilities....................................... 0 1,785 1,900 Compensated Absences - Current.......................... 0 0 20,943 General Obligation Bonds Payable - Current.............. 150,000 160,000 175,000 Notes Payable - Current................................. 278,760 288,083 295,697 Total Current Liabilities.............................. $ 931,731 $ 980,534 $ 772,657 Noncurrent: Compensated Absences.................................... $ 10,974 $ 19,029 $ 221 General Obligation Bonds Payable (Net of Unamortized Discounts and Deferred Amount on Refunding) ............ 3,368,843 3,250,894 3,111,304 Notes Payable........................................... 5,351,553 5,096,843 4,801,147 Total Noncurrent Liabilities........................... 8,731,370 8,366,766 7,912,672 Total Liabilities...................................... 9,663,101 9,347,300 8,685,329 Net Assets: Invested in Capital Assets, Net of Related Debt .......... 4,628,487 8,862,763 11,975,053 Unrestricted............................................. 4,559,572 5,686,710 5,786,332 Total Net Assets....................................... $ 9,188,059 $14,549,473 $17,761,385


32

Waterworks and Sewerage Fund Balance Sheet

Audited As of April 30 2001 2002 2003 2004 ASSETS: Cash and Investments........................................ $ 1,440,263 $ 2,052,833 $ 3,097,471 $ 3,944,747 Receivables-Accounts........................................ 106,371 123,340 133,102 163,541 Due from Other Governments.................................. 0 0 23,561 0 Due from Other Funds........................................ 0 0 10,208 0 Prepaid Items............................................... 0 0 41,033 39,197 Other....................................................... 0 0 0 23,561 Total Current Assets...................................... $ 1,546,634 $ 2,176,173 $ 3,305,375 $ 4,171,046 Restricted Assets: Cash and Investments....................................... $ 626,553 $ 761,813 $ 0 $ 0 Fixed Assets: Cost....................................................... $14,511,658 $14,778,828 $16,001,064 $20,377,281 Accumulated Depreciation................................... (2,580,194) (2,861,940) (3,223,638) (3,675,858) Total Fixed Assets........................................ $11,931,464 $11,916,888 $12,777,426 $16,701,423 Other Assets: Deferred Charge............................................ $ 0 $ 0 $ 0 $ 0 Bond Issuance Cost......................................... 126,475 122,093 154,380 168,932 Total Other Assets........................................ $ 126,475 $ 122,093 $ 154,380 $ 168,932 Total Assets.............................................. $14,231,126 $14,976,967 $16,237,181 $21,041,401 LIABILITIES AND FUND EQUITY: Liabilities: Current Liabilities (Payable From Current Assets): Cash Overdrafts........................................... $ 0 $ 0 $ 0 $ 0 Accounts Payable.......................................... 138,457 85,468 87,663 408,927 Accrued Payroll........................................... 7,651 9,763 13,639 4,825 Compensated Absences Payable.............................. 7,689 9,987 8,209 11,275 Due to Other Funds........................................ 11,702 5,703 14,684 25,646 Interest Payable.......................................... 0 0 89,904 86,294 Installment Contract Payable.............................. 22,886 24,356 27,590 29,367 IEPA Loans Payable........................................ 0 0 156,853 160,997 Alternate Revenue Source Bonds Payable.................... 0 0 210,000 155,000 Total Current Liabilities (Payable From Current Assets)........................... $ 188,385 $ 135,277 $ 608,542 $ 882,331 Current Liabilities (Payable From Restricted Assets): Revenue Bonds Payable..................................... $ 60,000 $ 65,000 $ 0 $ 0 Interest Payable.......................................... 127,353 125,613 0 0 Total Current Liabilities (Payable From Restricted Assets)........................ $ 187,353 $ 190,613 $ 0 $ 0 Long-Term Liabilities: Revenue Bonds Payable..................................... $ 1,625,000 $ 1,560,000 $ 0 $ 0 Deferred Loss on Refunding................................ (313,646) (290,984) (303,780) (213,393) Alternate Revenue Source Bonds Payable.................... 2,875,000 2,875,000 4,010,000 3,855,000 Installment Contracts Payable............................. 190,375 164,549 135,391 106,024 IEPA Loan Payable......................................... 3,495,231 3,344,989 3,356,029 4,117,702 Deferred Connection Fees.................................. 63,000 63,000 48,000 27,000 Total Long-Term Liabilities.............................. $ 7,934,960 $ 7,716,554 $ 7,245,640 $ 7,892,333 Total Liabilities........................................ $ 8,310,698 $ 8,042,444 $ 7,854,182 $ 8,774,664 FUND EQUITY: Contributed Capital......................................... $ 5,975,338 $ 6,904,563 $ 5,975,338 $ 8,750,557 Retained Earnings: Reserved-Restricted Accounts............................... 439,200 501,200 0 0 Unreserved................................................. (494,110) (471,240) 2,407,661 3,516,180 Total Fund Equity......................................... $ 5,920,428 $ 6,934,523 $ 8,382,999 $12,266,737 Total Liabilities and Fund Equity......................... $14,231,126 $14,976,967 $16,237,181 $21,041,401


33

Statement of Revenues, Expenses and Changes in Net Assets Waterworks and Sewerage Fund

Audited Year Ended April 30 2005 2006 2007

OPERATING REVENUES: Charges for Services: Water Revenue................................................ $ 968,557 $ 1,089,495 $ 1,101,379 Sewer Revenue................................................ 903,345 1,017,098 1,033,654 Meter Sales.................................................. 92,430 72,721 62,548 Total Operating Revenues.................................... $1,964,332 $ 2,179,314 $ 2,197,581 Operating Expenses Excluding Depreciation and Amortization .... $1,131,137 $ 1,212,341 $ 1,516,763 Operating Income Before Depreciation and Amortization ......... 833,195 966,973 680,818 Depreciation and Amortization................................. 398,990 485,121 577,348 Operating Income ............................................. $ 434,205 $ 481,852 $ 103,470 Non-operating Revenues (Expenses); Connection Fees.............................................. $ 787,701 $ 966,229 $ 652,590 Interest Income.............................................. 75,506 198,936 302,216 Other Income................................................. 307,970 620,985 281,624 Grant Revenue................................................ 300,000 0 0 Gain on Sale of Capital Assets............................... 7,000 0 0 Interest Expense............................................. (201,670) (350,608) (315,669) Total Non-operating Revenues (Expenses)..................... $1,276,507 $ 1,435,542 $ 920,761 Income Before Contributions and Transfers..................... $1,710,712 $ 1,917,394 $ 1,024,231 Capital Contributions......................................... 0 2,012,157 2,342,886 Transfer In................................................... 0 0 215,678 Transfer Out.................................................. (140,469) (140,354) (370,883) Change in Net Assets.......................................... $1,570,243 $ 3,789,197 $ 3,211,912 Net Assets - Beginning, As Restated........................... $7,617,816 $10,760,276 $14,549,473 Net Assets - Ending........................................... $9,188,059 $14,549,473 $17,761,385


34

Waterworks and Sewerage Fund Revenues and Expenditures

Audited Fiscal Year Ending April 30 2001 2002 2003 2004 REVENUES: Water Sales................................ $ 551,850 $ 671,119 $ 851,562 $ 934,847 Sewer Sales................................ 530,762 606,593 769,233 851,951 Meter Sales................................ 79,337 105,027 147,664 133,135 Miscellaneous.............................. 35,745 52,286 0 0 Total Operating Revenues................. $1,197,694 $1,435,025 $1,768,459 $1,919,933 OPERATING EXPENSES: Administration............................ $ 423,636 $ 517,223 $ 567,739 $ 497,986 Operations(1)............................. 0 0 175,129 228,580 Water Operations.......................... 182,214 220,199 0 0 Sewer Operations.......................... 30,761 50,147 0 0 Capital Maintenance....................... 61,563 0 0 208,272 Depreciation and Amortization(1).......... 293,208 286,128 380,447 493,868 Total Operating Expenses................. $ 991,382 $1,073,697 $1,123,315 $1,428,706 Operating Income........................... $ 206,312 $ 361,328 $ 645,144 $ 491,227 NON-OPERATING REVENUES (EXPENSES): Interest Income............................ $ 91,439 $ 66,374 $ 41,838 $ 29,312 Other Income............................... 58,883 23,940 22,975 32,820 Tap-on Fees................................ 0 0 1,157,950 992,750 Interest Expense........................... (277,114) (366,772) (286,082) (299,480) Total Non-Operating Revenues (Expenses).. $ (126,792) $ (276,458) $ 936,681 $ 755,402 Net Income Before Operating Transfers...... $ 79,520 $ 84,870 $1,581,825 $1,246,629 Operating Transfers (Out).................. (12,000) 0 (133,349) (138,110) Net Income................................. $ 67,520 $ 84,870 $1,448,476 $1,108,519 Other Changes in Retained Earnings-Unreserved Intrafund Transfers In-Retained Earnings-Reserved............ $ 0 $ (62,000) $ 501,200 $ 0 Increase in Retained Earnings-Unreserved... $ 67,520 $ 22,870 $1,949,676 $1,108,519 Retained Earnings: Beginning, May 1........................... $ (561,630) $ (494,110) $ 457,985 $2,407,661 Ending, April 30........................... $ (494,110) $ (471,240) $2,407,661 $3,516,180 Note: (1) Change in reporting format. In 2001, depreciation was not included in operating expenses. It has been included to show a comparable format with subsequent fiscal years 2002-2004.


35

General Fund

Interim and Budget Financial Information

Budget Twelve Months Twelve Months Ending Ending 04/30/2008 04/30/2008(1) REVENUES: Property Taxes................................................. $1,169,552 $1,174,846 Other Taxes.................................................... 2,333,635 2,157,217 Charges for Services........................................... 1,080,758 196,394 Intergovernmental, Grants and Contributions .................... 0 11,581 Licenses and Permits........................................... 664,571 270,855 Fines, Fees and Forfeitures.................................... 213,694 206,158 Interest....................................................... 89,888 113,544 Miscellaneous.................................................. 274,365 140,483 Total Revenues............................................... $5,826,463 $4,271,078 EXPENDITURES: Current: General Government............................................ $3,055,438 $1,881,181 Public Safety................................................. 1,787,310 1,697,117 Highways and Streets.......................................... 775,731 666,168 Total Expenditures........................................... $5,618,479 $4,244,466 Excess (Deficiency) of Revenues Over Expenditures .............. $ 207,984 $ 26,612 Other Financing Sources: Transfers In.................................................. $ 87,132 $ 66,374 Transfers Out................................................. (294,015) (294,015) Total Other Financing Sources (Uses) ......................... $ (206,883) $ (227,641) Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses ............ $ 1,101 $ (201,029) Note: (1) Unaudited.

PENSION AND RETIREMENT OBLIGATIONS

See APPENDIX A herein.

REGISTRATION, TRANSFER AND EXCHANGE

See also APPENDIX B for information on registration, transfer and exchange of book-entry bonds. The Bonds will be initially issued as book-entry bonds.

The Bonds shall be negotiable, subject to the provisions for registration of transfer contained herein. Each Bond shall be transferable only upon the registration books maintained by the Village for that purpose at the principal corporate trust office of the Bond Registrar, by the registered owner thereof in person or by his attorney duly authorized in writing, upon surrender thereof together with a written instrument of transfer satisfactory to the Bond Registrar and duly executed by the registered owner or his duly authorized attorney. Upon the surrender for transfer of any such Bond, the Village shall execute and the Bond Registrar shall authenticate and deliver a new Bond or Bonds registered in the name of the transferee and of the same aggregate principal amount, maturity and interest rate as the surrendered Bond. Bonds, upon surrender thereof at the principal corporate trust office of the Bond Registrar, with a written instrument satisfactory to the Bond Registrar, duly executed by the registered owner or his attorney duly authorized in writing, may be exchanged for an equal aggregate principal amount of Bonds of the same maturity and interest rate and of the denominations of $5,000 or any integral multiple thereof.


36

For every such exchange or registration of transfer of Bonds, the Village or the Bond Registrar may make a

charge sufficient for the reimbursement of any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer, which sum or sums shall be paid by the person requesting such exchange or transfer as a condition precedent to the exercise of the privilege of making such exchange or transfer. No other charge shall be made for the privilege of making such transfer or exchange. The provisions of the Illinois Bond Replacement Act shall govern the replacement of lost, destroyed or defaced Bonds.

The Village and the Bond Registrar may deem and treat the person in whose name any Bond shall be registered

upon the registration books as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of or interest thereon and for all other purposes whatsoever, and all such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the Village nor the Bond Registrar shall be affected by any notice to the contrary.

The Bond Registrar shall not be required to transfer or exchange any Bond after notice of the redemption of all

or a portion thereof has been mailed. The Bond Registrar shall not be required to transfer or exchange any Bond during a period of 15 days next preceding the mailing of a notice of redemption that could designate for redemption all or a portion of such Bond.

TAX EXEMPTION

Summary of Bond Counsel Opinion Katten Muchin Rosenman LLP, Bond Counsel, is of the opinion that under existing law, interest on the Bonds is not includible in the gross income of the owners thereof for Federal income tax purposes. If there is continuing compliance with the applicable requirements of the Internal Revenue Code of 1986 (the “Code”), Bond Counsel is of the opinion that interest on the Bonds will continue to be excluded from the gross income of the owners thereof for Federal income tax purposes. Bond Counsel is further of the opinion that the Bonds are not “private activity bonds” within the meaning of Section 141(a) of the Code. Accordingly, interest on the Bonds is not an item of tax preference for purposes of computing individual or corporate alternative minimum taxable income. However, interest on the Bonds is includible in corporate earnings and profits and therefore must be taken into account when computing corporate alternative minimum taxable income for tax purposes of the corporate alternative minimum tax. Interest on the Bonds is not exempt from State of Illinois income taxes.

The Code contains certain requirements that must be satisfied from and after the date of issuance of the Bonds. These requirements relate to the use and investment of the proceeds of the Bonds, the payment of certain amounts to the United States, the security and source of payment of the Bonds and the use of property financed with the proceeds of the Bonds. The Village has covenanted in the Bond Ordinance to comply with these requirements. Bonds Purchased at a Premium or a Discount

The difference (if any) between the initial price at which a substantial amount of each maturity of the Bonds is sold to the public (the “Offering Price”) and the principal amount payable at maturity of such Bonds is given special treatment for Federal income tax purposes. If the Offering Price is higher than the maturity value of a Bond, the difference between the two is known as “bond premium”; if the Offering Price is lower than the maturity value of a Bond, the difference between the two is known as “original issue discount”.


37

Bond premium and original issue discount are amortized over the term of a Bond on the basis of the owner’s yield from the date of purchase to the date of maturity, compounded at the end of each accrual period of one year or less with straight line interpolation between compounding dates, as provided more specifically in the Income Tax Regulations. The amount of bond premium accruing during each period is treated as a reduction in the amount of tax-exempt interest earned during such period and is subtracted from the owner’s tax basis in the Bond. The amount of original issue discount accruing during each period is treated as interest that is excludable from the gross income of the owner of such Bond for Federal income tax purposes, to the same extent and with the same limitations as current interest, and is added to the owner’s tax basis in the Bond. A Bond’s adjusted tax basis is used to determine whether, and to what extent, the owner realizes taxable gain or loss upon disposition of the Bond (whether by reason of sale, acceleration, redemption prior to maturity or payment at maturity of the Bond). Owners of Bonds should consult their own tax advisors with respect to the state and local tax consequences of owning the Bonds. It is possible that under the applicable provisions governing the determination of state or local income taxes, accrued interest on the Bonds may be deemed to be received in the year of accrual even though there will not be a corresponding cash payment until a year later. Exclusion From Gross Income Requirements The Code sets forth certain requirements that must be satisfied on a continuing basis in order to preserve the exclusion from gross income for Federal income tax purposes of interest on the Bonds. Among these requirements are the following:

Limitations on Private Use. The Code includes limitations on the amount of Bonds proceeds that may be used in the trade or business of, or used to make or finance loans to, persons other than governmental units. Investment Restrictions. Except during certain “temporary periods,” proceeds of the Bonds and investment earnings thereon (other than amounts held in a reasonably required reserve or replacement fund, if any, or as part of “minor portion”) may generally not be invested in investments having a yield that is “materially higher” than the yield on the Bonds.

Rebate of Arbitrage Profit. Unless the Village qualifies for one of several exemptions, earnings from the investment of the “gross proceeds” of the Bonds in excess of the earnings that would have been realized if such investments had been made at a yield equal to the yield on the Bonds are required to be paid to the United States at periodic intervals. For this purpose, the term “gross proceeds” includes the original proceeds of the Bonds, amounts received as a result of investing such proceeds, and amounts to be used to pay debt service on the Bonds. Covenants to Comply. The Village has covenanted in the Bond Ordinance to comply with the requirements of the Code relating to the exclusion from gross income for Federal income tax purposes of interest on the Bonds.

Risks of Non-Compliance In the event that the Village fails to comply with the requirements of the Code, interest on the Bonds may become includible in the gross income of the owners thereof for Federal income tax purposes retroactive to the date of issue. In such event, the Bond Ordinance requires neither acceleration of payment of principal of, or interest on, the Bonds nor payment of any additional interest or penalties to the owners of the Bonds.


38

Federal Income Tax Consequences Pursuant to Section 103 of the Code, interest on the Bonds is not includible in the gross income of the owners thereof for Federal income tax purposes. However, the Code contains a number of other provisions relating to the treatment of interest on the Bonds which may affect the taxation of certain types of owners, depending on their particular tax situations. Some of the potentially applicable Federal income tax provisions are described in general terms below. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS CONCERNING THE PARTICULAR FEDERAL INCOME TAX CONSEQUENCES OF THEIR OWNERSHIP OF THE BONDS.

QUALIFIED TAX-EXEMPT OBLIGATIONS Section 265(b)(3)(B) of the Code provides that certain issues designated or deemed as “qualified tax-exempt obligations” and purchased by financial institutions (either from the issuer or in a secondary market transaction) may be disregarded in computing the proportional disallowance of interest expense provided in such Section. In the Bond Ordinance, the Village has designated the Bonds as “qualified tax-exempt obligations”. In addition, as required by Section 265 of the Code, the Village has represented that the reasonably anticipated amount of “tax-exempt obligations” that are required to be taken into account under Section 265 of the Code and will be issued by the Village and all subordinate entities of the Village during 2008 does not exceed $10,000,000 except to the extent that refunding bonds may be deemed as “qualified tax-exempt obligations” in excess of $10,000,000, and has covenanted that it will not designate and issue more than $10,000,000 aggregate principal amount of “tax-exempt obligations” during 2008. For purposes of the foregoing sentence, the term “tax-exempt obligations” includes “qualified 501(c)(3) bonds” (as defined in Section 145 of the Code) but does not include other “private activity bonds” (as defined in Section 141(a) of the Code).

CONTINUING DISCLOSURE

The Bond Ordinance includes a continuing disclosure undertaking (the “Undertaking”) of the Village for the benefit of the beneficial owners of the Bonds to send certain information annually and to provide notice of certain events to certain information repositories pursuant to the requirements of Section (b)(5) of Rule 15c2-12 (the “Rule”) adopted by the Securities and Exchange Commission (the “Commission”) under the Securities Exchange Act of 1934. The information to be provided on an annual basis, the events which will be noticed on an occurrence basis and a summary of other terms of the Undertaking, including termination, amendment and remedies, are set forth below under “THE UNDERTAKING”.

The Village represents that it is in compliance with each and every undertaking previously entered into by it pursuant to the Rule. A failure by the Village to comply with the Undertaking will not constitute a default under the Bond Ordinance and beneficial owners of the Bonds are limited to the remedies described in the Undertaking. See “THE UNDERTAKING - Consequences of Failure of the Village to Provide Information”. A failure by the Village to comply with the Undertaking must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Bonds and their market price.

Bond Counsel expresses no opinion as to whether the Undertaking complies with the requirements of Section (b)(5) of the Rule.


39

THE UNDERTAKING

The following is a brief summary of certain provisions of the Undertaking of the Village and does not purport

to be complete. The statements made under this caption are subject to the detailed provisions of the Undertaking, a copy of which is available upon request from the Village. Annual Financial Information Disclosure

The Village covenants that it will disseminate its Annual Financial Information and its Audited Financial Statements, if any (as described below) to each Nationally Recognized Municipal Securities Information Repository (a “NRMSIR”) then recognized by the Securities and Exchange Commission for purposes of the Rule and to the repository, if any, designated by the State of Illinois as the state information depository (the “SID”) and recognized as such by the Commission for purposes of the Rule. Annual Financial Information will be provided to each NRMSIR and to the SID, if any, by 210 days after the last day of the Village’s fiscal year. Audited Financial Statements as described below should be filed at the same time as the Annual Financial Information. If Audited Financial Statements are not available when the Annual Financial Information is filed, unaudited financial statements shall be included.

“Annual Financial Information” means: 1. The table under the heading of Retailers’ Occupation, Service Occupation and Use Tax within this Official

Statement; 2. All of the tables under the heading PROPERTY ASSESSMENT AND TAX INFORMATION within this

Official Statement; 3. All of the tables under the heading DEBT INFORMATION within this Official Statement; and 4. All of the tables under the heading FINANCIAL INFORMATION within this Official Statement.

“Audited Financial Statements” means the financial statements of the Village as audited annually by

independent certified public accountants. Audited Financial Statements will be prepared according to Accounting Principles Generally Accepted in the United States of America as applicable to governmental units (i.e., as subject to the pronouncements of the Governmental Accounting Standards Board and subject to any express requirements of State law).

Material Events Disclosure

The Village covenants that it will disseminate to each NRMSIR and to the SID, if any, in a timely manner the disclosure of the occurrence of an Event (as described below) with respect to the Bonds that is material, as materiality is interpreted under the Securities Exchange Act of 1934, as amended. The “Events” are: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions or events affecting the tax-exempt status of the security; 7. Modifications to the rights of security holders; 8. Bond calls; 9. Defeasances; 10. Release, substitution or sale of property securing repayment of the securities; and 11. Rating changes.


40

Contact Person

Audited Financial Statements and Notices of material Events can be obtained from: Mr. Justin Van Vooren, Finance Director, Village of Sugar Grove, 10 South Municipal Drive, Sugar Grove, Illinois 60554, telephone: (630) 466-4507 Ext. 12. Consequences of Failure of the Village to Provide Information

The Village shall give notice in a timely manner to each NRMSIR or to the MSRB and to the SID, if any, of any failure to provide disclosure of Annual Financial Information and Audited Financial Statements when the same are due under the Undertaking.

In the event of a failure of the Village to comply with any provision of the Undertaking, the beneficial owner of any Bond may seek mandamus or specific performance by court order to cause the Village to comply with its obligations under the Undertaking. A default under the Undertaking shall not be deemed a default under the Bond Ordinance, and the sole remedy under the Undertaking in the event of any failure of the Village to comply with the Undertaking shall be an action to compel performance. Amendment; Waiver

Notwithstanding any other provision of the Undertaking, the Village, by resolution or ordinance authorizing such amendment or waiver, may amend the Undertaking, and any provision of the Undertaking may be waived, if:

(a) The amendment or the waiver is made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of the Village, or type of business conducted;

(b) The Undertaking, as amended, or the provision, as waived, would have complied with the requirements

of the Rule at the time of the primary offering, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and

(c) The amendment or waiver does not materially impair the interests of the beneficial owners of the Bonds

as determined by parties unaffiliated with the Village (such as Bond Counsel), at the time of the amendment.

Termination of Undertaking

The Undertaking shall be terminated if the Village shall no longer have any legal liability for any obligation on or relating to repayment of the applicable series of Bonds under the applicable Bond Ordinance. The Village shall give notice to each NRMSIR and the SID, if any, in a timely manner if this paragraph is applicable.


41

Additional Information

Nothing in the Undertaking shall be deemed to prevent the Village from disseminating any other information, using the means of dissemination set forth in the Undertaking or any other means of communication, or including any other information in any Annual Financial Information or Audited Financial Statements or notice of occurrence of a material Event, in addition to that which is required by the Undertaking. If the Village chooses to include any information from any document or notice of occurrence of a material Event in addition to that which is specifically required by the Undertaking, the Village shall have no obligation under the Undertaking to update such information or include it in any future disclosure or notice of occurrence of a material Event.

OPTIONAL REDEMPTION The 2008A Bonds

The 2008A Bonds due May 1, 2010-2018, inclusive, are non-callable. Bonds due May 1, 2019-2028, inclusive, are callable in whole or in part on any date on or after May 1, 2018, at a price of par and accrued interest. If less than all the 2008A Bonds are called, they shall be redeemed in such principal amounts and from such maturities as determined by the Village and within any maturity by lot. The 2008B Bonds The 2008B Bonds are not subject to redemption prior to maturity.

NOTICE OF REDEMPTION

Notice of the redemption of bonds shall be mailed not less than 30 days nor more than 60 days prior to the date fixed for such redemption to the registered owners of bonds to be redeemed at their last addresses appearing on said registration books. The bonds or portions thereof specified in said notice shall become due and payable at the applicable redemption price on the redemption date therein designated, and if, on the redemption date, moneys for payment of the redemption price of all the bonds or portions thereof to be redeemed, together with interest to the redemption date, shall be available for such payment on said date, and if notice of redemption shall have been mailed as aforesaid (and notwithstanding any defect therein or the lack of actual receipt thereof by any registered owner) then from and after the redemption date interest on such bonds or portions thereof shall cease to accrue and become payable.

LITIGATION

There is no litigation of any nature now pending or threatened restraining or enjoining the issuance, sale, execution or delivery of the Bonds, or in any way contesting or affecting the validity of the Bonds or any proceedings of the Village taken with respect to the issuance or sale thereof.


42

LEGAL MATTERS

Legal matters incident to the authorization, issuance and sale of the Bonds are subject to the unqualified

approving opinion of Katten Muchin Rosenman LLP, Chicago, Illinois, Bond Counsel, whose approving opinion will be delivered with the Bonds. Bond Counsel has reviewed the statements in this Official Statement appearing under the headings “PURPOSE, LEGALITY AND SECURITY” and “TAX EXEMPTION,” and is of the opinion that the statements contained under such headings are accurate statements or summaries of the matters set forth therein and fairly present the information purported to be shown. Except for the foregoing, however, Bond Counsel has not independently verified the accuracy or completeness of statements and information contained in the Official Statement and does not assume any responsibility of the accuracy or completeness of such statements and information.

The opinion of Bond Counsel and the descriptions of the tax law contained in this Official Statement are based

on statutes, judicial decisions, regulations, rulings and other official interpretations of law in existence on the date the Bonds are issued. There can be no assurance that such law or the interpretation thereof will not be changed or that new provisions of law will not be enacted or promulgated at any time while the Bonds are outstanding in a manner that would adversely affect the value or the tax treatment of ownership of the Bonds.

OFFICIAL STATEMENT AUTHORIZATION

This Official Statement has been authorized for distribution to prospective purchasers of the Bonds. All

statements, information, and statistics herein are believed to be correct but are not guaranteed by the consultants or by the Village, and all expressions of opinion, whether or not so stated, are intended only as such.

INSURED INVESTMENT RATING - 2008A BONDS Standard & Poor's Ratings Group, a division of McGraw Hill, has assigned the 2008A Bonds a rating of

"AAA". This rating is conditioned upon the delivery by Financial Security Assurance Inc. ("Financial Security") of its standard form of Municipal Bond Insurance Policy. No application was made to any other rating agency for the purpose of obtaining an additional rating on the 2008A Bonds. Generally, rating agencies base their ratings on such information and materials and investigations, studies and assumptions by the respective rating agency. There is no assurance that such rating will continue for any given period of time or that it will not be revised downward or withdrawn entirely by such rating agency if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the 2008A Bonds. The Village and the Underwriter have undertaken no responsibility either to bring to the attention of the registered owners of the 2008A Bonds any proposed change in or withdrawal of such rating or to oppose any such revision or withdrawal (other than to comply with any applicable continuing disclosure requirements). An explanation of the significance of investment ratings may be obtained from the rating agency: Standard & Poor’s Investors Service, 55 Water Street, New York, New York 10041.

UNDERLYING INVESTMENT RATING

The Village’s underlying rating is “A+” from Standard & Poor's. The Village has supplied certain information and material concerning the Bonds and the Village to the rating service shown on the cover page as part of its application for an underlying investment rating on the Bonds. Generally, such rating service bases its rating on such information and material, and also on such investigations, studies and assumptions that it may undertake independently. There is no assurance that such rating will continue for any given period of time or that it may not be lowered or withdrawn entirely by such rating service if, in its judgment, circumstances so warrant. Any such downward change in or withdrawal of such rating may have an adverse effect on the secondary market price of the Bonds. An explanation of the significance of the investment rating may be obtained from the rating agency: Standard & Poor’s Corporation, 55 Water Street, New York, New York 10041, telephone 212-438-2000. The Village will provide appropriate periodic credit information to the rating service to maintain a rating on the Bonds.


43

DEFEASANCE AND PAYMENT OF BONDS

If the Village shall pay or cause to be paid to the registered owners of the bonds, the principal, premium, if any, and interest due or to become due thereon, at the times and in the manner stipulated therein and in this ordinance, then the pledge of taxes, securities and funds hereby pledged and the covenants, agreements and other obligations of the Village to the registered owners and the beneficial owners of the bonds shall be discharged and satisfied.

Any bonds or interest installments appertaining thereto, whether at or prior to the maturity or the redemption date of such bonds, shall be deemed to have been paid if (1) in case any such bonds are to be redeemed prior to the maturity thereof, there shall have been taken all action necessary to call such bonds for redemption and notice of such redemption shall have been duly given or provision shall have been made for the giving of such notice, and (2) there shall have been deposited in trust with a bank, trust company or national banking association acting as fiduciary for such purpose either (i) moneys in an amount which shall be sufficient, or (ii) “Federal Obligations” as defined below, the principal of and the interest on which when due will provide moneys which, together with any moneys on deposit with such fiduciary at the same time for such purpose, shall be sufficient, to pay when due the principal of, redemption premium, if any, and interest due and to become due on said bonds on and prior to the applicable redemption date or maturity date thereof.

The term “Federal Obligations” means (i) non-callable, direct obligations of the United States of America, (ii) non-callable and non-prepayable, direct obligations of any agency of the United States of America, which are unconditionally guaranteed by the United States of America as to full and timely payment of principal and interest, (iii) non-callable, non-prepayable coupons or interest installments from the securities described in clause (i) or clause (ii) which are stripped pursuant to programs of the Department of the Treasury of the United States of America, or (iv) coupons or interest installments stripped from bonds of the Resolution Funding Corporation.

UNDERWRITING The 2008A Bonds

The 2008A Bonds were offered for sale by the Village at a public, competitive sale on July 1, 2008. The best bid submitted at the sale was submitted by ____________________ (the “2008A Underwriter”). The Village awarded the contract for sale of the 2008A Bonds to the 2008A Underwriter at a price of $___________. The 2008A Underwriter has represented to the Village that the 2008A Bonds have been subsequently re-offered to the public initially at the yields or prices set forth in the addendum to this Official Statement. The 2008B Bonds

The 2008B Bonds were offered for sale by the Village at a public, competitive sale on July 1, 2008. The best bid submitted at the sale was submitted by ____________________ (the “2008B Underwriter”). The Village awarded the contract for sale of the 2008B Bonds to the 2008B Underwriter at a price of $___________. The 2008B Underwriter has represented to the Village that the 2008B Bonds have been subsequently re-offered to the public initially at the yields or prices set forth in the addendum to this Official Statement.


44

FINANCIAL ADVISOR

The Village has engaged Speer Financial, Inc. as financial advisor (the “Financial Advisor”) in connection with

the issuance and sale of the Bonds. The Financial Advisor will not participate in the underwriting of the Bonds. The financial information included in the Official Statement has been compiled by the Financial Advisor. Such information does not purport to be a review, audit or certified forecast of future events and may not conform with accounting principles applicable to compilations of financial information. The Financial Advisor is not a firm of certified public accountants and does not serve in that capacity or provide accounting services in connection with the Bonds. The Financial Advisor is not obligated to undertake any independent verification of or to assume any responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement, nor is the Financial Advisor obligated by the Village’s continuing disclosure undertaking.

CERTIFICATION We have examined this Official Statement dated June 20, 2008, for the $2,585,000 General Obligation Waterworks and Sewerage Bonds (Alternate Revenue Source), Series 2008A and the $570,000* General Obligation Road Bonds (Alternate Revenue Source), Series 2008B, believe it to be true and correct and will provide to the purchaser of the Bonds at the time of delivery a certificate confirming to the purchaser that to the best of our knowledge and belief information in the Official Statement was at the time of acceptance of the bid for the Bonds and, including any addenda thereto, was at the time of delivery of the Bonds true and correct in all material respects and does not include any untrue statement of a material fact, nor does it omit the statement of any material fact required to be stated therein, or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. /s/ P. SEAN MICHELS /s/ JUSTIN VAN VOOREN Village President Finance Director VILLAGE OF SUGAR GROVE VILLAGE OF SUGAR GROVE Kane County, Illinois Kane County, Illinois *Subject to change.

APPENDIX A

VILLAGE OF SUGAR GROVE KANE COUNTY, ILLINOIS

EXCERPTS OF FISCAL YEAR 2007 AUDITED FINANCIAL STATEMENTS

APPENDIX B DESCRIBING BOOK-ENTRY-ONLY ISSUANCE

1. The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for

the Bonds (the “Securities”). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC.

2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has Standard & Poor’s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.

3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.

4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

B-1

5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Village as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Village or the Paying Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the Village, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Village or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to any Tender/Remarketing Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant’s interest in the Securities, on DTC’s records, to any Tender/Remarketing Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Securities to any Tender/Remarketing Agent’s DTC account.

10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the Village or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.

11. The Village may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC.

12. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the Village believes to be reliable, but the Village takes no responsibility for the accuracy thereof.

B-2

APPENDIX C 2008A BOND INSURANCE 2008A Bond Insurance Policy

Concurrently with the issuance of the 2008A Bonds, Financial Security Assurance Inc. ("Financial Security") will issue its Municipal Bond Insurance Policy for the 2008A Bonds (the "Policy"). The Policy guarantees the scheduled payment of principal of and interest on the 2008A Bonds when due as set forth in the form of the Policy included as an exhibit to this Official Statement.

The Policy is not covered by any insurance security or guaranty fund established under New York, California, Connecticut or Florida insurance law. Financial Security Assurance Inc.

Financial Security is a New York domiciled financial guaranty insurance company and a wholly owned subsidiary of Financial Security Assurance Holdings Ltd. ("Holdings"). Holdings is an indirect subsidiary of Dexia, S.A., a publicly held Belgian corporation, and of Dexia Credit Local, a direct wholly-owned subsidiary of Dexia, S.A. Dexia, S.A., through its bank subsidiaries, is primarily engaged in the business of public finance, banking and asset management in France, Belgium and other European countries. No shareholder of Holdings or Financial Security is liable for the obligations of Financial Security.

At March 31, 2008, Financial Security's consolidated policyholders' surplus and contingency reserves were approximately $3,012,872,486 and its total net unearned premium reserve was approximately $2,419,501,630 in accordance with statutory accounting principles. At March 31, 2008, Financial Security's consolidated shareholder’s equity was approximately $3,053,752,711 and its total net unearned premium reserve was approximately $1,882,057,335 in accordance with generally accepted accounting principles.

The consolidated financial statements of Financial Security included in, or as exhibits to, the annual and quarterly reports filed after December 31, 2007 by Holdings with the Securities and Exchange Commission are hereby incorporated by reference into this Official Statement. All financial statements of Financial Security included in, or as exhibits to, documents filed by Holdings pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of this Official Statement and before the termination of the offering of the 2008A Bonds shall be deemed incorporated by reference into this Official Statement. Copies of materials incorporated by reference will be provided upon request to Financial Security Assurance Inc.: 31 West 52nd Street, New York, New York 10019, Attention: Communications Department (telephone (212) 826-0100).

The Policy does not protect investors against changes in market value of the 2008A Bonds, which market value may be impaired as a result of changes in prevailing interest rates, changes in applicable ratings or other causes. Financial Security makes no representation regarding the 2008A Bonds or the advisability of investing in the 2008A Bonds. Financial Security makes no representation regarding the Official Statement, nor has it participated in the preparation thereof, except that Financial Security has provided to the Issuer the information presented under this caption for inclusion in the Official Statement.

C-1

FINANCIAL SECURITY ASSURANCE®

MUNICIPAL BOND INSURANCE POLICY

ISSUER: BONDS:

Policy No.: -N

Effective Date:

Premium: $

FINANCIAL SECURITY ASSURANCE INC. ("Financial Security"), for consideration received, hereby UNCONDITIONALLY AND IRREVOCABLY agrees to pay to the trustee (the "Trustee") or paying agent (the "Paying Agent") (as set forth in the documentation providing for the issuance of and securing the Bonds) for the Bonds, for the benefit of the Owners or, at the election of Financial Security, directly to each Owner, subject only to the terms of this Policy (which includes each endorsement hereto), that portion of the principal of and interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer. On the later of the day on which such principal and interest becomes Due for Payment or the Business Day next following the Business Day on which Financial Security shall have received Notice of Nonpayment, Financial Security will disburse to or for the benefit of each Owner of a Bond the face amount of principal of and interest on the Bond that is then Due for Payment but is then unpaid by reason of Nonpayment by the Issuer, but only upon receipt by Financial Security, in a form reasonably satisfactory to it, of (a) evidence of the Owner's right to receive payment of the principal or interest then Due for Payment and (b) evidence, including any appropriate instruments of assignment, that all of the Owner's rights with respect to payment of such principal or interest that is Due for Payment shall thereupon vest in Financial Security. A Notice of Nonpayment will be deemed received on a given Business Day if it is received prior to 1:00 p.m. (New York time) on such Business Day; otherwise, it will be deemed received on the next Business Day. If any Notice of Nonpayment received by Financial Security is incomplete, it shall be deemed not to have been received by Financial Security for purposes of the preceding sentence and Financial Security shall promptly so advise the Trustee, Paying Agent or Owner, as appropriate, who may submit an amended Notice of Nonpayment. Upon disbursement in respect of a Bond, Financial Security shall become the owner of the Bond, any appurtenant coupon to the Bond or right to receipt of payment of principal of or interest on the Bond and shall be fully subrogated to the rights of the Owner, including the Owner's right to receive payments under the Bond, to the extent of any payment by Financial Security hereunder. Payment by Financial Security to the Trustee or Paying Agent for the benefit of the Owners shall, to the extent thereof, discharge the obligation of Financial Security under this Policy. Except to the extent expressly modified by an endorsement hereto, the following terms shall have the meanings specified for all purposes of this Policy. "Business Day" means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in the State of New York or the Insurer's Fiscal Agent are authorized or required by law or executive order to remain closed. "Due for Payment" means (a) when referring to the principal of a Bond, payable on the stated maturity date thereof or the date on which the same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity unless Financial Security shall elect, in its sole discretion, to pay such principal due upon such acceleration together with any accrued interest to the date of acceleration and (b) when referring to interest on a Bond, payable on the stated date for payment of interest. "Nonpayment" means, in respect of a Bond, the failure of the Issuer to have provided sufficient funds to the Trustee or, if there is no Trustee, to the Paying Agent for payment in full of all principal and interest that is Due for Payment on such Bond. "Nonpayment" shall also include, in respect of a Bond, any payment of principal or interest that is Due for Payment

C-2

of 2 Policy No. -N

made to an Owner by or on behalf of the Issuer which has been recovered from such Owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with a final, nonappealable order of a court having competent jurisdiction. "Notice" means telephonic or telecopied notice, subsequently confirmed in a signed writing, or written notice by registered or certified mail, from an Owner, the Trustee or the Paying Agent to Financial Security which notice shall specify (a) the person or entity making the claim, (b) the Policy Number, (c) the claimed amount and (d) the date such claimed amount became Due for Payment. "Owner" means, in respect of a Bond, the person or entity who, at the time of Nonpayment, is entitled under the terms of such Bond to payment thereof, except that "Owner" shall not include the Issuer or any person or entity whose direct or indirect obligation constitutes the underlying security for the Bonds. Financial Security may appoint a fiscal agent (the "Insurer's Fiscal Agent") for purposes of this Policy by giving written notice to the Trustee and the Paying Agent specifying the name and notice address of the Insurer's Fiscal Agent. From and after the date of receipt of such notice by the Trustee and the Paying Agent, (a) copies of all notices required to be delivered to Financial Security pursuant to this Policy shall be simultaneously delivered to the Insurer's Fiscal Agent and to Financial Security and shall not be deemed received until received by both and (b) all payments required to be made by Financial Security under this Policy may be made directly by Financial Security or by the Insurer's Fiscal Agent on behalf of Financial Security. The Insurer's Fiscal Agent is the agent of Financial Security only and the Insurer's Fiscal Agent shall in no event be liable to any Owner for any act of the Insurer's Fiscal Agent or any failure of Financial Security to deposit or cause to be deposited sufficient funds to make payments due under this Policy. To the fullest extent permitted by applicable law, Financial Security agrees not to assert, and hereby waives, only for the benefit of each Owner, all rights (whether by counterclaim, setoff or otherwise) and defenses (including, without limitation, the defense of fraud), whether acquired by subrogation, assignment or otherwise, to the extent that such rights and defenses may be available to Financial Security to avoid payment of its obligations under this Policy in accordance with the express provisions of this Policy. This Policy sets forth in full the undertaking of Financial Security, and shall not be modified, altered or affected by any other agreement or instrument, including any modification or amendment thereto. Except to the extent expressly modified by an endorsement hereto, (a) any premium paid in respect of this Policy is nonrefundable for any reason whatsoever, including payment, or provision being made for payment, of the Bonds prior to maturity and (b) this Policy may not be canceled or revoked. THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW. In witness whereof, FINANCIAL SECURITY ASSURANCE INC. has caused this Policy to be executed on its behalf by its Authorized Officer. [Countersignature] By

FINANCIAL SECURITY ASSURANCE INC. By

Authorized Officer A subsidiary of Financial Security Assurance Holdings Ltd. 31 West 52nd Street, New York, N.Y. 10019 Form 500NY (5/90)

(212) 826-0100

C-3

APPENDIX D DRAFT LEGAL OPINION

THE 2008A BONDS

_______________, 2008

The President and Board of Trustees of the Village of Sugar Grove, Illinois

Dear Members:

We have examined a record of proceedings relating to the issuance of $____________ principal amount of General Obligation Waterworks and Sewerage Bonds (Alternate Revenue Source), Series 2008A (the “Bonds”) of the Village of Sugar Grove, a municipal corporation of the State of Illinois. The Bonds are authorized and issued pursuant to the provisions of the Local Government Debt Reform Act, 30 Illinois Compiled Statutes 350, and by virtue of an ordinance adopted by the President and Board of Trustees of the Village on May 6, 2008, and entitled: “Ordinance Authorizing the Issuance of $2,700,000 General Obligation Alternate Bonds of the Village of Sugar Grove, Illinois for Financing Waterworks and Sewerage System Improvements,” as supplemented by an ordinance adopted by said President and Board of Trustees on June 17, 2008, and entitled: “Ordinance Providing for the Issuance of Not to Exceed $2,600,000 General Obligation Waterworks and Sewerage Bonds (Alternate Revenue Source), Series 2008A, of the Village of Sugar Grove, Illinois” (the “Bond Ordinance”). The Bonds are issuable in the form of fully registered bonds in the denominations of $5,000 and any integral multiple thereof. The Bonds delivered on original issuance are dated July 15, 2008. The Bonds mature on May 1, in each of the following years in the respective principal amount set opposite each such year in the following table, and the Bonds maturing in each such year bear interest from their date payable on May 1, 2009 and semiannually thereafter on May 1 and November 1, at the respective rate of interest per annum set forth opposite such year:

Year Principal Amount

Interest Rate Year

Principal Amount

Interest Rate

$ ,000 % $ ,000 % ,000 ,000 ,000 ,000 ,000 ,000 ,000 ,000

The Bonds maturing on or after May 1, 2019 are subject to redemption prior to maturity at the option of the Village, in such principal amounts and from such maturities as the Village shall determine and by lot within a single maturity, on May 1, 2018 and on any date thereafter, at a redemption price equal to the principal amount thereof to be redeemed. The Bonds are “alternate bonds” issued pursuant to Section 15 of the Local Government Debt Reform Act and in lieu of the issuance of waterworks and sewerage system revenue bonds. To the extent provided in the Bond Ordinance, the Bonds are also secured by a pledge of revenues derived from the operation of the combined waterworks and sewerage system of the Village. In our opinion, the Bonds are valid and legally binding general obligations of the Village of Sugar Grove, and the Village has power and is obligated to levy ad valorem taxes upon all the taxable property within the Village for the payment of the Bonds and the interest thereon, without limitation as to rate or amount. However, the enforceability of rights or remedies with respect to the Bonds may be limited by bankruptcy, insolvency or other laws affecting creditors’ rights and remedies heretofore or hereafter enacted.

D-1

We are of the opinion that, under existing law, interest on the Bonds is not includable in the gross income of the owners thereof for Federal income tax purposes. If there is continuing compliance with the applicable requirements of the Internal Revenue Code of 1986 (the “Code”), we are of the opinion that interest on the Bonds will continue to be excluded from the gross income of the owners thereof for Federal income tax purposes. We are further of the opinion that the Bonds are not “private activity bonds” within the meaning of Section 141(a) of the Code. Accordingly, interest on the Bonds is not an item of tax preference for purposes of computing individual or corporate alternative minimum taxable income. However, interest on the Bonds is includable in corporate earnings and profits and therefore must be taken into account when computing corporate alternative minimum taxable income for purposes of the corporate alternative minimum tax. The Code contains certain requirements that must be satisfied from and after the date hereof in order to preserve the exclusion from gross income for Federal income tax purposes of interest on the Bonds. These requirements relate to the use and investment of the proceeds of the Bonds, the payment of certain amounts to the United States, the security and source of payment of the Bonds and the use of the property financed with the proceeds of the Bonds. The Village has covenanted in the Bond Ordinance to comply with these requirements. Pursuant to the Bond Ordinance, the Village has designated the Bonds as “qualified tax-exempt obligations” as defined in Section 265(b)(3)(B) of the Code. Interest on the Bonds is not exempt from Illinois income taxes.

Very truly yours,

LG/be

D-2

DRAFT LEGAL OPINION THE 2008B BONDS

________________, 2008

The President and Board of Trustees of the Village of Sugar Grove, Illinois Dear Members:

We have examined a record of proceedings relating to the issuance of $____________ principal amount of General Obligation Road Bonds (Alternate Revenue Source), Series 2008B (the “Bonds”) of the Village of Sugar Grove, a municipal corporation of the State of Illinois. The Bonds are authorized and issued pursuant to the provisions of the Local Government Debt Reform Act, 30 Illinois Compiled Statutes 350, and by virtue of an ordinance adopted by the President and Board of Trustees of the Village on May 6, 2008 and entitled: “Ordinance Authorizing the Issuance of $600,000 General Obligation Motor Fuel Tax Alternate Bonds of the Village of Sugar Grove, Illinois,” as supplemented by an ordinance adopted by said President and Board of Trustees on June 17, 2008 and entitled: “Ordinance Providing for the Issuance of Not to Exceed $600,000 General Obligation Road Bonds (Alternate Revenue Source), Series 2008B, of the Village of Sugar Grove, Illinois” (the “Bond Ordinance”). The Bonds are issuable in the form of fully registered bonds in the denominations of $5,000 and any integral multiple thereof. The Bonds delivered on original issuance are dated July 15, 2008. The Bonds mature (without option of prior redemption) on January 1, in each of the following years in the respective principal amount set opposite each such year in the following table, and the Bonds maturing in each such year bear interest from their date payable on July 1, 2009 and semiannually thereafter on January 1 and July 1, at the respective rate of interest per annum set forth opposite such year:

Year Principal Amount Interest Rate

2010 $ ,000 % 2011 ,000 2012 ,000 2013 ,000 2014 ,000

The Bonds are “alternate bonds” issued pursuant to Section 15 of the Local Government Debt Reform Act. To the extent provided in the Bond Ordinance, the Bonds are also secured by a pledge of motor fuel tax payments to be paid to the Village by the State of Illinois. In our opinion, the Bonds are valid and legally binding general obligations of the Village of Sugar Grove, and the Village has power and is obligated to levy ad valorem taxes upon all the taxable property within the Village for the payment of the Bonds and the interest thereon, without limitation as to rate or amount. However, the enforceability of rights or remedies with respect to the Bonds may be limited by bankruptcy, insolvency or other laws affecting creditors’ rights and remedies heretofore or hereafter enacted. We are of the opinion that, under existing law, interest on the Bonds is not includable in the gross income of the owners thereof for Federal income tax purposes. If there is continuing compliance with the applicable requirements of the Internal Revenue Code of 1986 (the “Code”), we are of the opinion that interest on the Bonds will continue to be excluded from the gross income of the owners thereof for Federal income tax purposes. We are further of the opinion that the Bonds are not “private activity bonds” within the meaning of Section 141(a) of the Code. Accordingly, interest on the Bonds is not an item of tax preference for purposes of computing individual or corporate alternative minimum taxable income. However, interest on the Bonds is includable in corporate earnings and profits and therefore must be taken into account when computing corporate alternative minimum taxable income for purposes of the corporate alternative minimum tax.

D-3

The Code contains certain requirements that must be satisfied from and after the date hereof in order to preserve the exclusion from gross income for Federal income tax purposes of interest on the Bonds. These requirements relate to the use and investment of the proceeds of the Bonds, the payment of certain amounts to the United States, the security and source of payment of the Bonds and the use of the property financed with the proceeds of the Bonds. The Village has covenanted in the Bond Ordinance to comply with these requirements. Pursuant to the Code and the Bond Ordinance, the Bonds are designated as “qualified tax-exempt obligations” as defined in Section 265(b)(3)(B) of the Code. Interest on the Bonds is not exempt from Illinois income taxes.

Very truly yours,

LG/be

D-4

OFFICIAL BID FORM 2008A BONDS

Village of Sugar Grove July 1, 2008 10 South Municipal Drive Speer Financial, Inc. Sugar Grove, Illinois 60554 Facsimile: (312) 346-8833

Members of the Village Board:

For the $2,585,000 General Obligation Waterworks and Sewerage Bonds (Alternate Revenue Source), Series 2008A (the “2008A Bonds”), of the Village of Sugar Grove, Kane County, Illinois (the “Village”), as described in the annexed Official Notice of Sale, which is expressly made a part of this bid, we will pay you $___________________ (no less than par) plus accrued interest from July 15, 2008, to the date of delivery for 2008A Bonds bearing interest as follows (each rate a multiple of 1/8 or 1/20 of 1% and no coupon rate may exceed 5%).

MATURITIES – MAY 1

$ 80,000 ............2010 ______% $ 50,000.............. 2016 ______% $190,000 ........... 2023 _____%

80,000 ............2011 ______% 50,000.............. 2017 ______% 200,000 ........... 2024 _____%

135,000 ............2012 ______% 100,000.............. 2018 ______% 205,000 ........... 2025 _____%

60,000 ............2013 ______% 150,000.............. 2019 ______% 210,000 ........... 2026 _____%

45,000 ............2014 ______% 160,000.............. 2020 ______% 210,000 ........... 2027 _____%

50,000 ............2015 ______% 175,000.............. 2021 ______% 250,000 ........... 2028 _____%

185,000.............. 2022 ______%

Any consecutive maturities may be aggregated into no more than five term bonds at the option of the bidder, in which case the mandatory redemption provisions shall be on the same schedule as above.

Maturities: ________ Term Maturity ________ Maturities: ________ Term Maturity ________ Maturities: ________ Term Maturity ________

Maturities: ________ Term Maturity ________ Maturities: ________ Term Maturity ________

The 2008A Bonds are to be executed and delivered to us in accordance with the terms of this bid accompanied by the approving legal opinion of Katten Muchin Rosenman LLP, Chicago, Illinois. The Village will pay for the legal opinion. The underwriter agrees to apply for CUSIP numbers within 24 hours and pay the fee charged by the CUSIP Service Bureau and will accept the 2008A Bonds with the CUSIP numbers as entered on the 2008A Bonds.

As evidence of our good faith, we enclose herewith a check or Surety Bond payable to the order of the Treasurer of the Village in the amount of TWO

PERCENT OF PAR (the “Deposit”) under the terms provided in your Official Notice of Sale. Attached hereto is a list of members of our account on whose behalf this bid is made.

Form of Deposit Account Manager Information Check One: Name Certified/Cashier’s Check [ ] Financial Surety Bond [ ] Address Amount: $51,700 By The above Certified/Cashier’s Check was returned and received City State/Zip By: Direct Phone ( ) Check Number: FAX Number ( ) E-Mail Address

The foregoing bid was accepted and the 2008A Bonds sold by ordinance of the Village on July 1, 2008, and receipt is hereby acknowledged of the good

faith Deposit which is being held in accordance with the terms of the annexed Official Notice of Sale.

VILLAGE OF SUGAR GROVE, KANE COUNTY, ILLINOIS

President

----------------------- NOT PART OF THE BID -----------------------

(Calculation of true interest cost)

Gross Interest $

Less Premium $

True Interest Cost $

True Interest Rate %

TOTAL BOND YEARS 33,918.64

AVERAGE LIFE 13.121 Years

_________________________________

THIS PAGE INTENTIONALLY

LEFT BLANK

_________________________________

OFFICIAL NOTICE OF SALE

$2,585,000 VILLAGE OF SUGAR GROVE

Kane County, Illinois General Obligation Waterworks and Sewerage Bonds (Alternate Revenue Source), Series 2008A

The Village of Sugar Grove, Kane County, Illinois (the “Village”), will receive sealed bids for its $2,585,000 General Obligation Waterworks and Sewerage Bonds (Alternate Revenue Source), Series 2008A (the “2008A Bonds”), on an all or none basis, in Suite 4100, One North LaSalle Street, Chicago, Illinois, until 10:00 A.M., C.D.T., Tuesday, July 1, 2008, at which time the bids received by sealed envelope and bids transmitted to Speer Financial, Inc., via facsimile, (312) 346-8833, will be publicly opened and read. Award will be made or all bids rejected at a meeting of the Village on that date. All bidders are advised that each bid submitted shall be deemed to constitute a contract between the bidder and the Village to purchase the 2008A Bonds regardless of the manner of the bid submitted.

The 2008A Bonds are payable both as to principal and interest from (a) revenues of the System of the Village (the “Pledged Revenues”);

and (b) ad valorem taxes levied against all taxable property within the Village without limitation as to rate or amount. The 2008A Bonds will be in fully registered form in the denominations of $5,000 and integral multiples thereof in the name of Cede &

Co. as nominee of The Depository Trust Company (“DTC”), New York, New York, to which principal and interest payments on the 2008A Bonds will be paid. Individual purchases will be in book-entry form only. Interest on each 2008A Bond shall be paid by check or draft of the 2008A Bond Registrar to the person in whose name such 2008A Bond is registered at the close of business on the fifteenth day of the month next preceding an interest payment date. The principal of the 2008A Bonds shall be payable in lawful money of the United States of America at the office of the 2008A Bond Registrar in Chicago, Illinois. Semiannual interest is due May 1 and November 1 of each year commencing May 1, 2009, and is payable by Cole Taylor Bank, Chicago, Illinois (the “2008A Bond Registrar”). The 2008A Bonds are dated July 15, 2008.

MATURITIES – MAY 1

$ 80,000 ............ 2010 $ 50,000 ............ 2016 $190,000 ............ 2023 80,000 ............ 2011 50,000 ............ 2017 200,000 ............ 2024 135,000 ............ 2012 100,000 ............ 2018 205,000 ............ 2025 60,000 ............ 2013 150,000 ............ 2019 210,000 ............ 2026 45,000 ............ 2014 160,000 ............ 2020 210,000 ............ 2027 50,000 ............ 2015 175,000 ............ 2021 250,000 ............ 2028 185,000 ............ 2022

Any consecutive maturities may be aggregated into no more than five term bonds at the option of the bidder, in which case the mandatory redemption provisions shall be on the same schedule as above.

The 2008A Bonds due May 1, 2010-2018, inclusive, are non-callable. The 2008A Bonds due May 1, 2019-2028, inclusive, are callable

in whole or in part on any date on or after May 1, 2018, at a price of par and accrued interest. If less than all the 2008A Bonds are called, they shall be redeemed in such principal amounts and from such maturities as determined by the Village and within any maturity by lot.

The scheduled payment of principal of and interest on the 2008A Bonds when due will be guaranteed under an insurance policy to be

issued concurrently with the delivery of the 2008A Bonds by FINANCIAL SECURITY ASSURANCE INC. The premium for such insurance policy and the related rating of Standard & Poor’s will be paid by the Village. Additional ratings are at the cost of the purchaser of the 2008A Bonds.

The 2008A Bonds will be awarded to the single and best bidder whose bid will be determined upon the basis of the lowest true interest

cost at the rate or rates designated in said bid from the dated date to the respective maturity dates after deducting the premium bid or adding the discount bid. True interest cost shall be computed by determining the annual interest rate (compounded semi-annually) necessary to discount the debt service payments on the 2008A Bonds from the payment dates thereof to the dated date and to the bid price. All interest rates must be in multiples of one-eighth or one-twentieth of one percent (1/8 or 1/20 of 1%), and not more than one rate for a single maturity shall be specified. The rates bid shall be in non-descending order. No coupon rate may exceed five percent (5%). All bids must be for all of the 2008A Bonds, must be for not less than par, plus accrued interest from the dated date to the date of delivery, must be signed and made upon the Official Bid Form and delivered at the time and place set forth above.

Each bid shall be accompanied by a certified or cashier’s check on a solvent bank or trust company or a Financial Surety Bond for TWO

PERCENT OF PAR payable to the Treasurer of the Village as evidence of good faith of the bidder (the “Deposit”). The Deposit of the successful bidder will be retained by the Village pending delivery of the 2008A Bonds and all others will be promptly returned. Should the successful bidder fail to take up and pay for the 2008A Bonds when tendered in accordance with this Notice of Sale and said bid, said Deposit shall be retained as full and liquidated damages to the Village caused by failure of the bidder to carry out the offer of purchase. Such Deposit will otherwise be applied on the purchase price upon delivery of the 2008A Bonds. If a Financial Surety Bond is used, it must be from an insurance company licensed to issue such a bond in the State of Illinois and such bond must be submitted to Speer Financial, Inc., prior to the opening of the bids. The Financial Surety Bond must identify each bidder whose deposit is guaranteed by such Financial Surety Bond. If the 2008A Bonds are awarded to a bidder using a Financial Surety Bond, then that purchaser is required to submit its Deposit to the Village in the form of a certified or cashier’s check or wire transfer as instructed by Speer Financial, Inc., or the Village not later than 3:00 P.M. on the next business day following the award. If such Deposit is not received by that time, the Financial Surety Bond may be drawn by the Village to satisfy the Deposit requirement. No interest on the Deposit will accrue to the purchaser.

Village of Sugar Grove, Kane County, Illinois $2,585,000 General Obligation Waterworks and Sewerage Bonds (Alternate Revenue Source), Series 2008A Official Notice of Sale, Continued

The Village covenants and agrees to enter into a written agreement or contract, constituting an undertaking (the “Undertaking”) to provide ongoing disclosure about the Village for the benefit of the beneficial owners of the 2008A Bonds on or before the date of delivery of the 2008A Bonds as required under Section (b)(5) of Rule 15c2-12 (the “Rule”) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934. The Undertaking shall be as described in the Official Statement, with such changes as may be agreed in writing by the Underwriter. The Village represents that it is in compliance with each and every undertaking previously entered into by it pursuant to the Rule.

The Underwriter’s obligation to purchase the 2008A Bonds shall be conditioned upon the Village delivering the Undertaking on or before the date of delivery of the 2008A Bonds.

By submitting a bid, any bidder makes the representation that it understands Bond Counsel represents the Village in the 2008A Bond

transaction and, if such bidder has retained Bond Counsel in an unrelated matter, such bidder consents to and waives any conflict of interest arising from any adverse position to the Village in this matter; such consent and waiver shall supersede any formalities otherwise required in any separate understandings, guidelines or contractual arrangements between the bidder and Bond Counsel.

The Village reserves the right to reject any or all bids and to determine the best bid in its sole discretion, and to waive any informality in

any bid. The 2008A Bonds will be delivered to the successful purchaser against full payment in immediately available funds as soon as they can

be prepared and executed, which is expected to be on or about July 22, 2008. Should delivery be delayed beyond sixty (60) days from the date of sale for any reason beyond the control of the Village except failure of performance by the purchaser, the Village may cancel the award or the purchaser may withdraw the good faith deposit and thereafter the purchaser’s interest in and liability for the 2008A Bonds will cease.

The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts, and

interest rates of the 2008A Bonds, and any other information required by law or deemed appropriate by the Village, shall constitute a “Final Official Statement” of the Village with respect to the 2008A Bonds, as that term is defined in the Rule. By awarding the 2008A Bonds to any underwriter or underwriting syndicate submitting an Official Bid Form therefor, the Village agrees that, no more than seven (7) business days after the date of such award, it shall provide, without cost to the senior managing underwriter of the syndicate to which the 2008A Bonds are awarded, up to 100 copies of the Final Official Statement to permit each “Participating Underwriter” (as that term is defined in the Rule) to comply with the provisions of such Rule. The Village shall treat the senior managing underwriter of the syndicate to which the 2008A Bonds are awarded as its designated agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter executing and delivering an Official Bid Form with respect to the 2008A Bonds agrees thereby that if its bid is accepted by the Village it shall enter into a contractual relationship with all Participating Underwriters of the 2008A Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement.

By submission of its bid, the senior managing underwriter of the successful bidder agrees to supply all necessary pricing information and

any Participating Underwriter identification necessary to complete the Official Statement within 24 hours after award of the 2008A Bonds. Additional copies of the Final Official Statement may be obtained by Participating Underwriters from the printer at cost.

The Village will, at its expense, deliver the 2008A Bonds to the purchaser in New York, New York, through the facilities of DTC and will pay for the bond attorney’s opinion. At the time of closing, the Village will also furnish to the purchaser the following documents, each dated as of the date of delivery of the 2008A Bonds: (1) the unqualified opinion of Katten Muchin Rosenman LLP, Chicago, Illinois, that the 2008A Bonds are lawful and enforceable obligations of the Village in accordance with their terms (2) the opinion of said attorneys that the interest on the 2008A Bonds is exempt from federal income taxes as and to the extent set forth in the Official Statement for the 2008A Bonds; and (3) a no litigation certificate by the Village.

The Village intends to designate the 2008A Bonds as “qualified tax-exempt obligations” pursuant to the small issuer exception provided

by Section 265(b) (3) of the Internal Revenue Code of 1986, as amended. The Village has authorized the printing and distribution of an Official Statement containing pertinent information relative to the Village

and the 2008A Bonds. Copies of such Official Statement or additional information may be obtained from Mr. Justin Van Vooren, Finance Director, Village of Sugar Grove, 10 South Municipal Drive, Sugar Grove, Illinois 60554, telephone: (630) 466-4507 Ext. 12 or an electronic copy of this Official Statement is available from the www.speerfinancial.com web site under “Debt Auction Center/ Official Statement Sales Calendar” from the Independent Public Finance Consultants to the Village, Speer Financial, Inc., One North LaSalle Street, Suite 4100, Chicago, Illinois 60602, telephone (312) 346-3700.

/s/ P. SEAN MICHELS /s/ JUSTIN VAN VOOREN Village President Finance Director VILLAGE OF SUGAR GROVE VILLAGE OF SUGAR GROVE Kane County, Illinois Kane County, Illinois

OFFICIAL BID FORM 2008B BONDS

Village of Sugar Grove July 1, 2008 10 South Municipal Drive Speer Financial, Inc. Sugar Grove, Illinois 60554 Facsimile: (312) 346-8833

Members of the Village Board:

For the $570,000* General Obligation Road Bonds (Alternate Revenue Source), Series 2008B (the “2008B Bonds”), of the Village of Sugar Grove, Kane County, Illinois (the “Village”), as described in the annexed Official Notice of Sale, which is expressly made a part of this bid, we will pay you $___________________ (no less than $565,000) plus accrued interest from July 15, 2008, to the date of delivery for 2008B Bonds bearing interest as follows (each rate a multiple of 1/8 or 1/20 of 1% and no coupon rate may exceed 4 ½%).

MATURITIES* – JANUARY 1

$100,000 ..........2010 ______% $115,000............2012 ______% $120,000 ..........2013 _____%

110,000 ..........2011 ______% 125,000 ..........2014 _____%

Any consecutive maturities may be aggregated into no more than two term bonds at the option of the bidder, in which case the mandatory redemption provisions shall be on the same schedule as above.

Maturities: ________ Term Maturity ________ Maturities: ________ Term Maturity ________

The 2008B Bonds are to be executed and delivered to us in accordance with the terms of this bid accompanied by the approving legal opinion of Katten Muchin Rosenman LLP, Chicago, Illinois. The Village will pay for the legal opinion. The underwriter agrees to apply for CUSIP numbers within 24 hours and pay the fee charged by the CUSIP Service Bureau and will accept the 2008B Bonds with the CUSIP numbers as entered on the 2008B Bonds.

As evidence of our good faith, we enclose herewith a check or Surety Bond payable to the order of the Treasurer of the Village in the

amount of TWO PERCENT OF PAR (the “Deposit”) under the terms provided in your Official Notice of Sale. Attached hereto is a list of members of our account on whose behalf this bid is made.

Form of Deposit Account Manager Information Bidders Option Insurance Check One: Name Certified/Cashier’s Check [ ] Financial Surety Bond [ ] Address

Amount: $11,400 By The above Certified/Cashier’s Check was returned and received City State/Zip By: Direct Phone ( ) Check Number: FAX Number ( ) E-Mail Address

The foregoing bid was accepted and the 2008B Bonds sold by ordinance of the Village on July 1, 2008, and receipt is hereby

acknowledged of the good faith Deposit which is being held in accordance with the terms of the annexed Official Notice of Sale.

VILLAGE OF SUGAR GROVE, KANE COUNTY, ILLINOIS

President *Subject to change.

----------------------- NOT PART OF THE BID -----------------------

(Calculation of true interest cost) Gross Interest $

Less Premium/Plus Discount $

True Interest Cost $

True Interest Rate %

TOTAL BOND YEARS 2,032.83

AVERAGE LIFE 3.566 Years

We have purchased insurance from:

Name of Insurer

(Please fill in) _____________________ Premium: _____________ Maturities: (Check One) [__] ______________Years [__] All

_________________________________

THIS PAGE INTENTIONALLY

LEFT BLANK

_________________________________

OFFICIAL NOTICE OF SALE

$570,000* VILLAGE OF SUGAR GROVE

Kane County, Illinois General Obligation Road Bonds (Alternate Revenue Source), Series 2008B

The Village of Sugar Grove, Kane County, Illinois (the “Village”), will receive sealed bids for its $570,000* General Obligation Road

Bonds (Alternate Revenue Source), Series 2008B (the “2008B Bonds”), on an all or none basis, in Suite 4100, One North LaSalle Street, Chicago, Illinois, until 10:00 A.M., C.D.T., Tuesday, July 1, 2008, at which time the bids received by sealed envelope and bids transmitted to Speer Financial, Inc., via facsimile, (312) 346-8833, will be publicly opened and read. Award will be made or all bids rejected at a meeting of the Village on that date. All bidders are advised that each bid submitted shall be deemed to constitute a contract between the bidder and the Village to purchase the 2008B Bonds regardless of the manner of the bid submitted.

The 2008B Bonds are payable both as to principal and interest from (a) Motor Fuel Taxes received by the Village (the “Pledged

Revenues”); and (b) ad valorem taxes levied against all taxable property within the Village without limitation as to rate or amount. The 2008B Bonds will be in fully registered form in the denominations of $5,000 and integral multiples thereof in the name of Cede &

Co. as nominee of The Depository Trust Company (“DTC”), New York, New York, to which principal and interest payments on the 2008B Bonds will be paid. Individual purchases will be in book-entry form only. Interest on each 2008B Bond shall be paid by check or draft of the 2008B Bond Registrar to the person in whose name such 2008B Bond is registered at the close of business on the fifteenth day of the month next preceding an interest payment date. The principal of the 2008B Bonds shall be payable in lawful money of the United States of America at the office of the 2008B Bond Registrar in Chicago, Illinois. Semiannual interest is due January 1 and July 1 of each year commencing July 1, 2009, and is payable by Cole Taylor Bank, Chicago, Illinois (the “2008B Bond Registrar”). The 2008B Bonds are dated July 15, 2008.

MATURITIES* – JANUARY 1

$100,000 ........... 2010 $115,000 ........... 2012 $120,000 ........... 2013 110,000 ........... 2011 125,000 ........... 2014

Any consecutive maturities may be aggregated into no more than two term bonds at the option of the bidder, in which case the mandatory redemption provisions shall be on the same schedule as above.

The 2008B Bonds are not subject to redemption prior to maturity.

The 2008B Bonds will be awarded to the single and best bidder whose bid will be determined upon the basis of the lowest true interest

cost at the rate or rates designated in said bid from the dated date to the respective maturity dates after deducting the premium bid or adding the discount bid. True interest cost shall be computed by determining the annual interest rate (compounded semi-annually) necessary to discount the debt service payments on the 2008B Bonds from the payment dates thereof to the dated date and to the bid price. All interest rates must be in multiples of one-eighth or one-twentieth of one percent (1/8 or 1/20 of 1%), and not more than one rate for a single maturity shall be specified. The rates bid shall be in non-descending order. No coupon rate may exceed four and one-half percent (4 ½%). All bids must be for all of the 2008B Bonds, must be for not less than $565,000, plus accrued interest from the dated date to the date of delivery, must be signed and made upon the Official Bid Form and delivered at the time and place set forth above.

Each bid shall be accompanied by a certified or cashier’s check on a solvent bank or trust company or a Financial Surety Bond for TWO

PERCENT OF PAR payable to the Treasurer of the Village as evidence of good faith of the bidder (the “Deposit”). The Deposit of the successful bidder will be retained by the Village pending delivery of the 2008B Bonds and all others will be promptly returned. Should the successful bidder fail to take up and pay for the 2008B Bonds when tendered in accordance with this Notice of Sale and said bid, said Deposit shall be retained as full and liquidated damages to the Village caused by failure of the bidder to carry out the offer of purchase. Such Deposit will otherwise be applied on the purchase price upon delivery of the 2008B Bonds. If a Financial Surety Bond is used, it must be from an insurance company licensed to issue such a bond in the State of Illinois and such bond must be submitted to Speer Financial, Inc., prior to the opening of the bids. The Financial Surety Bond must identify each bidder whose deposit is guaranteed by such Financial Surety Bond. If the 2008B Bonds are awarded to a bidder using a Financial Surety Bond, then that purchaser is required to submit its Deposit to the Village in the form of a certified or cashier’s check or wire transfer as instructed by Speer Financial, Inc., or the Village not later than 3:00 P.M. on the next business day following the award. If such Deposit is not received by that time, the Financial Surety Bond may be drawn by the Village to satisfy the Deposit requirement. No interest on the Deposit will accrue to the purchaser.

The Village covenants and agrees to enter into a written agreement or contract, constituting an undertaking (the “Undertaking”) to provide ongoing disclosure about the Village for the benefit of the beneficial owners of the 2008B Bonds on or before the date of delivery of the 2008B Bonds as required under Section (b)(5) of Rule 15c2-12 (the “Rule”) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934. The Undertaking shall be as described in the Official Statement, with such changes as may be agreed in writing by the Underwriter. The Village represents that it is in compliance with each and every undertaking previously entered into by it pursuant to the Rule. *Subject to change.

Village of Sugar Grove, Kane County, Illinois $570,000* General Obligation Road Bonds (Alternate Revenue Source), Series 2008B Official Notice of Sale, Continued *Subject to change.

The Underwriter’s obligation to purchase the 2008B Bonds shall be conditioned upon the Village delivering the Undertaking on or before the date of delivery of the 2008B Bonds.

By submitting a bid, any bidder makes the representation that it understands Bond Counsel represents the Village in the 2008B Bond

transaction and, if such bidder has retained Bond Counsel in an unrelated matter, such bidder consents to and waives any conflict of interest arising from any adverse position to the Village in this matter; such consent and waiver shall supersede any formalities otherwise required in any separate understandings, guidelines or contractual arrangements between the bidder and Bond Counsel.

The Village reserves the right to reject any or all bids and to determine the best bid in its sole discretion, and to waive any informality in

any bid. The 2008B Bonds will be delivered to the successful purchaser against full payment in immediately available funds as soon as they can

be prepared and executed, which is expected to be on or about July 22, 2008. Should delivery be delayed beyond sixty (60) days from the date of sale for any reason beyond the control of the Village except failure of performance by the purchaser, the Village may cancel the award or the purchaser may withdraw the good faith deposit and thereafter the purchaser’s interest in and liability for the 2008B Bonds will cease.

The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts, and

interest rates of the 2008B Bonds, and any other information required by law or deemed appropriate by the Village, shall constitute a “Final Official Statement” of the Village with respect to the 2008B Bonds, as that term is defined in the Rule. By awarding the 2008B Bonds to any underwriter or underwriting syndicate submitting an Official Bid Form therefor, the Village agrees that, no more than seven (7) business days after the date of such award, it shall provide, without cost to the senior managing underwriter of the syndicate to which the 2008B Bonds are awarded, up to 100 copies of the Final Official Statement to permit each “Participating Underwriter” (as that term is defined in the Rule) to comply with the provisions of such Rule. The Village shall treat the senior managing underwriter of the syndicate to which the 2008B Bonds are awarded as its designated agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter executing and delivering an Official Bid Form with respect to the 2008B Bonds agrees thereby that if its bid is accepted by the Village it shall enter into a contractual relationship with all Participating Underwriters of the 2008B Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement.

By submission of its bid, the senior managing underwriter of the successful bidder agrees to supply all necessary pricing information and

any Participating Underwriter identification necessary to complete the Official Statement within 24 hours after award of the 2008B Bonds. Additional copies of the Final Official Statement may be obtained by Participating Underwriters from the printer at cost.

The Village will, at its expense, deliver the 2008B Bonds to the purchaser in New York, New York, through the facilities of DTC and will pay for the bond attorney’s opinion. At the time of closing, the Village will also furnish to the purchaser the following documents, each dated as of the date of delivery of the 2008B Bonds: (1) the unqualified opinion of Katten Muchin Rosenman LLP, Chicago, Illinois, that the 2008B Bonds are lawful and enforceable obligations of the Village in accordance with their terms (2) the opinion of said attorneys that the interest on the 2008B Bonds is exempt from federal income taxes as and to the extent set forth in the Official Statement for the 2008B Bonds; and (3) a no litigation certificate by the Village.

The Village intends to designate the 2008B Bonds as “qualified tax-exempt obligations” pursuant to the small issuer exception provided

by Section 265(b) (3) of the Internal Revenue Code of 1986, as amended. The Village has authorized the printing and distribution of an Official Statement containing pertinent information relative to the Village

and the 2008B Bonds. Copies of such Official Statement or additional information may be obtained from Mr. Justin Van Vooren, Finance Director, Village of Sugar Grove, 10 South Municipal Drive, Sugar Grove, Illinois 60554, telephone: (630) 466-4507 Ext. 12 or an electronic copy of this Official Statement is available from the www.speerfinancial.com web site under “Debt Auction Center/ Official Statement Sales Calendar” from the Independent Public Finance Consultants to the Village, Speer Financial, Inc., One North LaSalle Street, Suite 4100, Chicago, Illinois 60602, telephone (312) 346-3700.

/s/ P. SEAN MICHELS /s/ JUSTIN VAN VOOREN Village President Finance Director VILLAGE OF SUGAR GROVE VILLAGE OF SUGAR GROVE Kane County, Illinois Kane County, Illinois

amounts, maturities, interest rates and yields or prices grove 08ab addendum.pdf · new issue...

Documents