Town of CiceroNEW ISSUE – BOOK ENTRY ONLY RATING: Standard & Poor’s: A+ (Stable Outlook)
Subject to compliance by the Town with certain covenants, in the opinion of Quarles & Brady LLP, Bond Counsel, under present law, interest on the Series 2012 Bonds is not includible in gross income for federal income tax purposes and thus is exempt from federal income taxes based on gross income. Interest on the Series 2012 Bonds is not an item of tax preference for purposes of the alternative minimum tax on individuals, but will be taken into account in computing the corporate alternative minimum tax. Interest on the Series 2012 Bonds is not exempt from present Illinois income tax. See the discussion under the caption, “TAX MATTERS.”
$23,525,000 TOWN Of CICERO Cook County, Illinois
General Obligation Corporate Purpose Refunding Bonds, Series 2012
Dated: Date of Delivery Due: December 1, as shown on the inside cover
The General Obligation Corporate Purpose Refunding Bonds, Series 2012 (the “Series 2012 Bonds”) will be issued in fully registered form in denominations as set forth herein pursuant to an ordinance adopted by the Town of Cicero (the “Town”) on April 24, 2012, as supplemented by a Bond Determination executed by the President of the Town’s Board of Trustees and the Town Clerk (collectively, the “Bond Ordinance”). Amalgamated Bank of Chicago, Chicago, Illinois will serve as the paying agent (the “Paying Agent”) and the bond registrar (the “Registrar”) for the Series 2012 Bonds. The Depository Trust Company, New York, New York (“DTC”) will act as the securities depository for the Series 2012 Bonds and its nominee, Cede & Co., will be the registered owner of the Series 2012 Bonds. Individual purchases of the Series 2012 Bonds will be recorded on a book-entry only system operated by DTC. See the discussion under the caption, “DESCRIPTION OF THE BONDS - Book-Entry System.”
The Series 2012 Bonds will be issued in denominations of $5,000 or integral multiples thereof. The Series 2012 Bonds will bear interest from their dated date, payable semiannually on each June 1 and December 1, commencing December 1, 2012. Principal of and redemption premium, if any, on the Series 2012 Bonds are payable at maturity.
The Series 2012 Bonds are subject to optional redemption prior to their stated maturity as described herein.
The Series 2012 Bonds will constitute valid and legally binding general obligations of the Town, payable both as to principal and interest from ad valorem taxes levied on all taxable property in the Town, without limitation as to rate or amount. See the discussion under the caption, “SECURITY FOR THE BONDS.”
Proceeds of the Series 2012 Bonds will be used for the purposes of: (i) refunding all of the outstanding General Obligation Corporate Purpose Bonds, Series 2002; and (ii) paying certain expenses incurred in connection with the issuance of the Series 2012 Bonds. See the discussion under the caption, “PLAN OF FINANCE.”
The Series 2012 Bonds are offered when, as, and if issued by the Town, subject to the delivery of the legal opinions of Quarles & Brady LLP, Chicago, Illinois, Bond Counsel. Certain legal matters will be passed upon for the Town by their counsel, Del Galdo Law Group, LLC, Berwyn, Illinois, and for the Underwriters by their counsel, Reyes, Kurson, Chicago, Illinois. It is expected that the Series 2012 Bonds, in definitive form, will be available for delivery through the facilities of DTC on or about June 28, 2012.
Cabrera Capital Markets, LLC
The date of this Official Statement is June 5, 2012.
$23,525,000 TOWN OF CICERO
SERIES 2012
MATURITY SCHEDULE
Dated: Date of Delivery, expected to be June 28, 2012
Series 2012 Serial Bonds:
Series 2012 Term Bond:
*Priced to Call
∗Copyright 2008, American Bankers Association. CUSIP data herein are provided by Standard & Poor’s, CUSIP Service Bureau, a Division of The McGraw-Hill Companies, Inc. The CUSIP numbers listed are being provided solely for the convenience of the bondholders only at the time of issuance of the Bonds and neither the Town nor the Underwriter make any representation with respect to such numbers or undertake any responsibility for their accuracy now or at any time in the future. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions, including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds.
Maturity (December 1) Amount Interest Rate Yield Price CUSIP∗
2013 $435,000 3.000% 1.180% 102.563 171646QP0 2014 $435,000 3.000% 1.500% 103.558 171646QQ8 2015 $945,000 3.000% 1.780% 104.035 171646QR6 2016 $970,000 3.000% 1.990% 104.256 171646QS4 2017 $1,005,000 3.000% 2.290% 103.601 171646QT2 2018 $1,035,000 4.000% 2.540% 108.603 171646QU9 2019 $1,070,000 5.000% 2.800% 114.654 171646QV7 2020 $1,125,000 5.000% 3.070% 114.229 171646QW5 2021 $1,185,000 4.000% 3.270% 105.878 171646QX3 2022 $1,230,000 5.000% 3.420% 113.754 171646QY1 2023* $1,295,000 5.000% 3.550% 112.539 171646QZ8 2024* $1,355,000 5.000% 3.670% 111.432 171646RA2 2025* $1,425,000 5.000% 3.770% 110.519 171646RB0 2026* $1,500,000 5.000% 3.830% 109.975 171646RD6
Maturity (December 1) Amount Interest Rate Yield Price CUSIP*
2031 $8,515,000 4.000% 4.250% 96.713 171646RC8
TOWN OF CICERO
COOK COUNTY, ILLINOIS
Fran Reitz Dennis Raleigh Lorraine Walsh Victor Garcia Larry Banks
Town Attorney
Bond Counsel
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This Official Statement does not constitute an offer to sell the Series 2012 Bonds in any jurisdiction to any person to whom it is unlawful to make an offer in that jurisdiction. No dealer, salesperson or any other person has been authorized to give any information or make any representations, other than those contained in this Official Statement, in connection with the offering of the Series 2012 Bonds, and, if given or made, such other information or representations must not be relied upon. The delivery of this Official Statement at any time does not imply that the information or opinions in this Official Statement are correct as of any time subsequent to its date. The information set forth herein relating to the Town under the captions, “TOWN OF CICERO,” and “LITIGATION,” has been obtained from the Town. All other information herein has been obtained by the Underwriters from DTC, the Bond Insurer, and other sources believed to be reliable by the Underwriters and is not to be construed as a representation of the Underwriter. The Underwriters have reviewed the information in the Official Statement but the Underwriters do not guarantee the accuracy or completeness of such information. All expressions of opinion in this Official Statement whether or not so stated as such are intended merely as such and not as representations of fact. No statement in this Official Statement is to be considered as a contract with any purchaser or registered owner of the Series 2012 Bonds.
Any statements made in this Official Statement, including the Appendices, involving matters of opinion or estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. This Official Statement contains certain forward-looking statements and information based on the Town’s beliefs as well as assumptions made by, and information currently available to, the Town. These statements are subject to risks, uncertainties and assumptions, some of which are described herein. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or expected.
No representation is made regarding whether the Series 2012 Bonds constitute legal investments under the laws of any state for banks, savings banks, savings and loan associations, life insurance companies, and other institutions organized in such state, or fiduciaries subject to the laws of such state.
Neither the delivery of this Official Statement nor any sale under this Official Statement shall, under any circumstances, create any implication that there has been no change in the redevelopment project described in this Official Statement or in the affairs of the Town or any other party since the dates as of which information is given.
The Series 2012 Bonds will not be registered under the Securities Act of 1933, as amended, pursuant to an exemption from the registration requirement of said Act, and will not be listed on any stock or other securities exchange. Neither the Securities and Exchange Commission nor any other federal, state, municipal or other governmental regulatory entity will have passed upon the accuracy or adequacy of this Official Statement or, other than the authorizing action by the Town, approved the Series 2012 Bonds for sale. Any representation to the contrary may be a criminal offense.
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In connection with the issuance of the Series 2012 Bonds, the Town will enter into a Continuing Disclosure Undertaking.
IN CONNECTION WITH THE OFFERING OF THE SERIES 2012 BONDS, THE UNDERWRITERS MAY OVER ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE SERIES 2012 BONDS AT LEVELS ABOVE THOSE THAT MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. THE UNDERWRITERS ARE NOT OBLIGATED TO TAKE SUCH ACTIONS, AND SUCH STABILIZING ACTIONS, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
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General Description .............................................................................................................1 Redemption Prior to Maturity ..............................................................................................2 Negotiability, Transfer, Exchange and Registry ..................................................................4 Book-Entry System ..............................................................................................................4
SECURITY FOR THE BONDS ..................................................................................................... 6 TAX ESCROW ............................................................................................................................... 7 PLAN OF FINANCE ...................................................................................................................... 7 ESTIMATED SOURCES AND USES OF PROCEEDS ............................................................... 8 TOWN OF CICERO ....................................................................................................................... 8
General Description and History ..........................................................................................8 Town Organization and Administration ...............................................................................9 Employment .......................................................................................................................10 Unemployment Rates .........................................................................................................10 Principal Taxpayers in the Town .......................................................................................11
CURRENT ECONOMIC CONDITION AND ECONOMIC DEVELOPMENT PROGRAMS ...... 11 REAL PROPERTY ASSESSMENT, TAX LEVY AND COLLECTION PROCEDURES ........ 14
Assessment .........................................................................................................................14 Property Tax Appeals .........................................................................................................17 Equalization .......................................................................................................................18 Exemptions ........................................................................................................................18 Tax Levy ............................................................................................................................21 Collections .........................................................................................................................22
CERTAIN FINANCIAL INFORMATION REGARDING THE TOWN .................................... 24 General ...............................................................................................................................24 Budgetary Data ..................................................................................................................24 Investment Practices ..........................................................................................................24 Operating Results and Fund Balances ................................................................................24 Composition of Equalized Assessed Valuation for the Town ............................................28 Property Tax Extensions and Collections ..........................................................................28 Tax Rates ...........................................................................................................................29
PENSION AND RETIREMENT FUND COMMITMENTS ....................................................... 31 Risk Management ..............................................................................................................32 Internal Service Fund .........................................................................................................33 Budgeting and Financial Reporting Practices ....................................................................34
LITIGATION ................................................................................................................................ 35 BOND RATING ........................................................................................................................... 35 TAX MATTERS ........................................................................................................................... 36 LEGAL MATTERS ...................................................................................................................... 38 UNDERWRITING ....................................................................................................................... 39 CONTINUING DISCLOSURE .................................................................................................... 39 MISCELLANEOUS ..................................................................................................................... 43 AUTHORIZATION ...................................................................................................................... 43 APPENDIX A: FORM OF BOND COUNSEL OPINION ........................................................ A-1 APPENDIX B: AUDITED FINANCIAL STATEMENTS OF THE TOWN ............................ B-1
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SERIES 2012
INTRODUCTION
The purpose of this Official Statement, including the cover page and the appendices hereto (the “Official Statement”), is to set forth certain information in conjunction with the sale of $23,525,000 General Obligation Corporate Purpose Refunding Bonds, Series 2012 (the “Series 2012 Bonds”) of the Town of Cicero, Cook County, Illinois (the “Town”). Certain factors that may affect an investment decision concerning the Series 2012 Bonds are described throughout this Official Statement. Persons considering a purchase of the Series 2012 Bonds should read this Official Statement in its entirety. Copies of statutes, resolutions, reports or other documents referred to herein are available, upon request, from the Town.
The Series 2012 Bonds are being issued pursuant to the home-rule powers of the Town under Section 6, Article VII of the Illinois Constitution and an ordinance adopted by the Town on April 24, 2012, as supplemented by a Bond Determination executed by the President of the Town’s Board of Trustees and the Town Clerk (collectively, the “Bond Ordinance”). Amalgamated Bank of Chicago, Chicago, Illinois will serve as the paying agent (the “Paying Agent”) and bond registrar (the “Registrar”) for the Series 2012 Bonds under the Bond Ordinance.
The Series 2012 Bonds are payable both as to principal and interest from ad valorem taxes levied on all taxable property in the Town without limitation as to rate or amount except that the rights of the owners of the Bonds and the enforceability of the Bonds may be limited by bankruptcy, insolvency, reorganization, and moratorium and other similar laws affecting creditors’ rights and by equitable principles, whether considered at law or in equity, including the exercise of judicial discretion.
The Town previously issued its $27,965,000 General Obligation Corporate Purpose Bonds, Series 2002 (the “Series 2002 Bonds”). Proceeds of the Series 2012 Bonds will be used for the purposes of: (i) refunding all of the outstanding General Obligation Corporate Purpose Bonds, Series 2002, of the Town; and (ii) paying certain expenses incurred in connection with the issuance of the Series 2012 Bonds. See “PLAN OF FINANCE.” There currently remains outstanding $23,410,000 in aggregate principal amount of the Series 2002 Bonds.
DESCRIPTION OF THE BONDS
General Description
The Series 2012 Bonds will be dated, mature and bear interest (computed on the basis of a 360-day year of twelve 30-day months) as described on the cover page and inside cover page of this Official Statement. The Series 2012 Bonds will be issued as fully registered bonds in denominations of $5,000 or any integral multiple thereof.
The principal of the Series 2012 Bonds will be payable at the principal corporate office of Amalgamated Bank of Chicago, Chicago, Illinois (the “Paying Agent”), or its successor, upon presentation of such Series 2012 Bonds. Payment of interest on the Series 2012 Bonds will be made by mail to the
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registered owners of the bonds (the “Owners”) and will be paid by check or bank draft of the Paying Agent or, upon the request of an Owner of at least $1,000,000 in principal amount of the Series 2012 Bonds, by wire transfer of the Paying Agent, to the person in whose name each Series 2012 Bond is registered as of May 15 and November 15 of each year (the “Record Date”) at his or her address as it appears on the registration books of the Town maintained by the Registrar. Interest shall be payable semiannually on each June 1 and December 1, commencing on December 1, 2012.
Redemption Prior to Maturity
The Series 2012 Bonds maturing on or after December 1, 2023 are subject to redemption prior to maturity at the option of the Town, from any available funds, in whole or in part, on any date on or after December 1, 2022, and if in part, in such principal amounts and from such maturities as determined by the Town, and if less than an entire maturity, in integral multiples of $5,000 selected by lot by the Registrar, at a redemption price of par plus accrued interest to the redemption date.
The Series 2012 Bond maturing on December 1, 2031, is subject to mandatory redemption prior to maturity, in part, at a redemption price equal to the principal amount thereof, plus accrued interest, in the aggregate principal amounts set forth in the following table:
Redemption Dates December 1 Principal Amount
2027 $1,570,000 2028 $1,635,000 2029 $1,700,000 2030 $1,770,000
2031* $1,840,000 *Final Maturity
The Town shall, at least forty-five (45) days prior to the redemption date, unless a shorter time period shall be satisfactory to the Paying Agent, notify the Registrar of such redemption date and of the principal amount of the Series 2012 Bonds to be redeemed. For purposes of any redemption of less than all of the outstanding Series 2012 Bonds of a single maturity, the particular Series 2012 Bonds or portions of the Series 2012 Bonds to be redeemed shall be selected not more than sixty (60) days prior to the redemption date by the Registrar, from the outstanding Series 2012 Bonds, by such method of lottery as the Registrar shall deem fair and appropriate and which may provide for the selection for redemption of the Series 2012 Bonds or portions of the Series 2012 Bonds in principal amounts of $5,000 and integral multiples thereof.
The Paying Agent shall promptly notify the Town in writing of the Series 2012 Bonds or portions of the Series 2012 Bonds selected for redemption and, in the case of any Series 2012 Bond selected for partial redemption, the principal amount thereof to be redeemed.
Unless waived by any holder of the Series 2012 Bonds to be redeemed, notice of the call for any such redemption shall be given by the Registrar on behalf of the Town by mailing the redemption notice by registered or certified mail at least thirty (30) days and not more than sixty (60) days prior to the date fixed for redemption to the registered owner of the Series 2012 Bond or the Series 2012 Bonds to be redeemed at the address shown on the books of the Registrar.
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(1) the redemption date;
(2) the redemption price;
(3) if less than all of the outstanding Series 2012 Bonds of a particular maturity are to be redeemed, the identification (and, in the case of partial redemption of the Series 2012 Bonds within such maturity, the respective principal amounts) of the Series 2012 Bonds to be redeemed;
(4) a statement that on the redemption date the redemption price will become due and payable upon each such Series 2012 Bonds or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date; and
(5) the place where such Series 2012 Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the principal corporate trust office of the Registrar.
Prior to any redemption date, the Town shall deposit with the Registrar an amount of money sufficient to pay the redemption price of all the Series 2012 Bonds or portions of the Series 2012 Bonds which are to be redeemed on that date (unless moneys available for such purpose are on deposit with the Registrar).
Notice of redemption having been given as aforesaid, the Series 2012 Bonds or portions of the Series 2012 Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the Town shall default in the payment of the redemption price) such Series 2012 Bonds or portions of the Series 2012 Bonds shall cease to bear interest. Upon surrender of such Series 2012 Bonds for redemption in accordance with the redemption notice, such Series 2012 Bonds shall be paid by the Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of the Series 2012 Bond, there shall be prepared for the registered holder a new Series 2012 Bond or Series 2012 Bonds of the same maturity in the amount of the unpaid principal.
If any Series 2012 Bond or any portion of Series 2012 Bond called for redemption shall not be so paid upon surrender thereof for redemption, the principal shall, until paid, bear interest from the redemption date at the rate borne by the Series 2012 Bond or portion of the Series 2012 Bond so called for redemption. All Series 2012 Bonds which have been redeemed shall be canceled and destroyed by the Registrar and shall not be reissued.
If, at the time of mailing of the notice of optional redemption, there shall not have been deposited with the Paying Agent moneys sufficient to redeem all the Series 2012 Bonds called for redemption, such notice may state that it is conditional (i.e., subject to the deposit of the redemption moneys with the Paying Agent not later than the opening of business on the redemption date) and such notice shall be of no effect unless such moneys are so deposited.
Failure to give any required notice of redemption to any holder as to any particular Series 2012 Bonds will not affect the validity of the call for redemption of any Series 2012 Bonds in respect of which no such failure has occurred. Any notice mailed as provided herein will be conclusively presumed to have been given whether or not actually received by any holder.
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Negotiability, Transfer, Exchange and Registry
The Series 2012 Bonds shall be negotiable, subject to the following provisions for registration, exchange and transfer. The Town shall maintain books for the registration of the Series 2012 Bonds at the principal corporate trust office of the Registrar. Each Bond shall be registered on those books.
Transfer of each Series 2012 Bond shall be registered on those books only upon surrender of that Series 2012 Bond to the Registrar by the registered owner or his or her attorney duly authorized in writing together with a written instrument of transfer satisfactory to the Registrar duly executed by the registered owner or his or her duly authorized attorney. Upon the surrender of any Series 2012 Bond for registration or transfer, the Town shall execute and the Registrar will authenticate and deliver, in the name of the transferee, one or more new Series 2012 Bonds of the same aggregate principal amount and of the same maturity as the Series 2012 Bond surrendered. The Series 2012 Bonds may be exchanged, at the option of the registered owner, for an equal aggregate principal amount of the Series 2012 Bonds of the same maturity of any other authorized denominations upon surrender of those Series 2012 Bonds at the principal corporate trust office of the Registrar together with a written instrument of transfer satisfactory to the Registrar, duly executed by the Owner or the Owner’s duly authorized attorney.
For every exchange or registration of transfer of Series 2012 Bonds, the Town or the Registrar may make a charge sufficient to reimburse it for any tax, fee or other governmental charge, other than one imposed by the Town, required to be paid with respect to such transfer or exchange, and payment of that charge by the person requesting exchange or registration of transfer shall be condition precedent to that exchange or registration of transfer. The Registrar shall not be required to exchange or register the transfer of any of the Series 2012 Bonds (a) during the period from the close of business on the 15th day preceding an interest payment date on any such Series 2012 Bonds to the opening of business on such interest payment date; (b) during a period of 15 days net preceding the mailing of a notice of redemption of all or a portion of such Series 2012 Bonds; or (c) during the 15 days preceding its maturity.
Book-Entry System
The following information concerning The Depository Trust Company, New York, New York (“DTC”), has been extracted from a schedule prepared by DTC entitled “Sample Offering Document Language Describing Book-Entry Only Issuance.” Neither the Town nor the Underwriters make any representation as to the completeness or accuracy of such information or as to the absence of material adverse changes in such information subsequent to the date hereof.
The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Series 2012 Bonds. The Series 2012 Bonds will be issued as fully-registered bonds 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 Bond certificate will be issued for each maturity of the Series 2012 Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.
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.
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DTC also facilitates the post-trade settlement among Direct Participants of sales and other bond transactions in deposited bonds, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of bond 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. bond 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 a Standard & Poor's rating of AA+. 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.
Purchases of Series 2012 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2012 Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("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 Series 2012 Bonds 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 Series 2012 Bonds, except in the event that use of the book-entry system for the Series 2012 Bonds is discontinued.
To facilitate subsequent transfers, all Series 2012 Bonds 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 Series 2012 Bonds 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 Series 2012 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2012 Bonds 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.
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 Series 2012 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2012 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Series 2012 Bonds may wish to ascertain that the nominee holding the Series 2012 Bonds 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.
Redemption notices shall be sent to DTC. If less than all of the Series 2012 Bonds 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.
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Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Series 2012 Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Town 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 the Series 2012 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Redemption proceeds, distributions, and dividend payments on the Series 2012 Bonds 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 detailed information from the Town or the Registrar, 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 bonds 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 Registrar, or the Town, 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 Town or the Registrar, 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.
DTC may discontinue providing its services as a securities depository with respect to the Series 2012 Bonds at any time by giving reasonable notice to the Town or Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Series 2012 Bond certificates are required to be printed and delivered.
The Town may discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, Series 2012 Bond certificates will be printed and delivered.
NEITHER THE TOWN, THE PAYING AGENT, NOR UNDERWRITERS WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DIRECT PARTICIPANTS, TO INDIRECT PARTICIPANTS OR TO ANY BENEFICIAL OWNER WITH RESPECT TO: (1) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ANY DIRECT PARTICIPANT, OR ANY INDIRECT PARTICIPANT; (2) THE PAYMENT BY DTC, ANY DIRECT PARTICIPANT OR ANY INDIRECT PARTICIPANT OF ANY AMOUNT WITH RESPECT TO PRINCIPAL OF, OR INTEREST ON, THE SERIES 2012 BONDS; (3) ANY NOTICE WHICH IS PERMITTED OR REQUIRED TO BE GIVEN TO BONDHOLDERS; OR (4) ANY CONSENT GIVEN BY DTC OR OTHER ACTION TAKEN BY DTC AS A BONDHOLDER.
SECURITY FOR THE BONDS
Pursuant to the Bond Ordinance, the Series 2012 Bonds are secured by ad valorem taxes levied against all of the taxable property in the Town without limitation as to rate or amount. The Bond Ordinance provides for the levy of ad valorem taxes, unlimited as to rate or amount, upon all taxable property within the Town in amounts sufficient to pay, as and when due, all principal of and interest on the Series 2012 Bonds. The Bond Ordinance will be filed with the Clerk of Cook County and will serve as authorization to Cook County to extend and collect the property taxes as set forth in the Bond Ordinance. Unless directed by the Town to abate said taxes for any given year, the County Clerk is obligated to extend and collect such property taxes. Taxes previously levied by the Town pursuant to pay principal of and interest on the Series 2002 Bonds shall be abated to the extent set forth in the Bond Ordinance. The Town
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may not direct any such abatement unless it has previously irrevocably deposited with the Paying Agent the precise amount of the abatement so directed.
TAX ESCROW
The tax intercept agreement among the County of Cook, the Town, and the Paying Agent (the “Tax Escrow Agreement”), requires that the ad valorem taxes levied pursuant to the Bond Ordinance (the “Full Faith and Credit Taxes”), when collected, be deposited via Automatic Cleaning House (“ACH Deposit”) by the Tax Escrow Agent shall be paid to the Bond Fund, and segregated therein for the payment of the principal installments of and interest on the Bonds.
Pursuant to the Bond Ordinance, the Town has appointed Amalgamated Bank of Chicago, Chicago, Illinois, as Tax Escrow Agent with respect to the Bonds. The Full Faith and Credit Taxes will be deposited by the Cook County Treasurer directly via ACH Deposit to the Tax Escrow Agent which will make payments of principal and interest on the Bonds from moneys deposited in the Bond Fund.
PLAN OF FINANCE
The Town will use the proceeds of the Series 2012 Bonds to: (i) refund all of the General Obligation Corporate Purpose Bonds, Series 2002 (having a current outstanding balance of $23,410,000) and (ii) pay certain expenses incurred in connection with the issuance of the Series 2012 Bonds. See the discussion under the caption, “ESTIMATED SOURCES AND USES OF PROCEEDS.”
Series 2002 Bonds
The Town expects to deposit $24,236,883.47 from the proceeds of the Series 2012 Bonds with U.S. Bank National Association, the paying agent and bond registrar for the Series 2002 Bonds, for the purpose of refunding the Series 2002 Bonds. The table below sets forth the maturities, interest rates and principal amount of the Series 2002 Bonds to be refunded and the redemption date for the Series 2002 Bonds to be refunded. The Town expects to use the proceeds deposited to redeem the Series 2002 Bonds on or about December 1, 2012.
Bonds to be Refunded
Issue: General Obligation Corporate Purpose Bonds, Series 2002 Dated Date: April 1, 2002
Maturity Date Interest Rate Par Amount Call Date 12/01/2012 4.500% $695,000.00 12/01/2012 12/01/2013 5.500% 725,000.00 12/01/2012 12/01/2016 5.625% 2,415,000.00 12/01/2012 12/01/2021 5.000% 4,970,000.00 12/01/2012 12/01/2026 5.250% 6,375,000.00 12/01/2012 12/01/2031 5.250% 8,230,000.00 12/01/2012
Total $23,410,000.00
ESTIMATED SOURCES AND USES OF PROCEEDS
The following table sets forth the estimated sources and uses of the proceeds of the Series 2012 Bonds:
Sources: Par Amount $23,525,000.00 Premium 1,123,890.30
TOTAL SOURCES: $24,648,890.30 Uses:
Deposit to redeem Series 2002 Bonds $24,236,883.47 Costs of Issuance(1) 412,006.83
TOTAL USES: $24,648,890.30
(1) Includes, among other things, the underwriter’s discount, payment of certain legal, financial and other expenses related to the issuance of the Series 2012 Bonds
TOWN OF CICERO
General Description and History
The Town, a home-rule municipality under the Illinois Constitution, is located approximately six miles west of Chicago's central business district. The Town is bordered by the City of Chicago to the north and east, the Village of Oak Park to the northwest, the Village of Stickney to the south, and the City of Berwyn to the west, and encompasses approximately six square miles.
Cicero's early period of growth during the latter part of the 19th Century followed a pattern
of small separated settlements. This pattern was created primarily because of drainage problems, but also because of social and economic differences. Various small communities of a few houses grew up in widely separated sections of the Town. With the westward expansion of Chicago and the development of street car lines, railroad transportation, and surface transportation, these scattered communities quickly grew and coalesced. By 1900, Cicero was a settled community of 16,310 inhabitants.
Cicero has a network of transportation facilities, with rapid transit service and a METRA
(Burlington Northern) commuter rail line connecting Cicero with the Chicago central business district. Interstate 290 (Eisenhower Expressway) immediately north of Cicero and Interstate 55 (Stevenson Expressway) immediately south of Cicero, provide additional means of access to Chicago as well as outlying area and other national highway systems.
Recreational opportunities in Cicero are provided by numerous parks as well as various
playgrounds through the Hawthorne Park District and Clyde Park District. Residents of Cicero are served by thirteen elementary schools, one high school district with three facilities in the Town, one community college, and elementary parochial schools.
There is no commonly called “downtown” or “central business district” in Cicero; however the
Town has a strip of commercial development along Cermak Road which represents the concentration of commercial uses as well as other smaller commercial centers. Industrial uses represent a high percentage of the total uses and total land area. Industries are concentrated along the eastern and northern sides of the Town, and in a smaller area at Ogden Avenue and 31st Street.
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Town Organization and Administration
The Town of Cicero is governed by an elected president and an elected seven member Board of Trustees. The Town President, Larry Dominick, is the Town's chief executive officer.
Trustees serve staggered four year terms. The Board operates through committees such as the
following: Finance and Personnel, Public Works, Buildings and Grounds, Fire and Police, Economic Development and Neighborhood Conservation, Licenses, Health and Welfare, Water and Lighting, Utilities and Air Pollution, Budget, Insurance, Ordinance, Anti-Gang, and Committee of the Whole.
The Department of Finance, created by Town ordinance, is headed by the Town
Comptroller, and includes the Town Comptroller, Town Treasurer, and Town Collector, as well as all assistants and subordinates of each of those officers. Under legal authority, the Town Clerk has the duties of Town Comptroller.
The Town Clerk is the chief fiscal agent of the Town. The Town Clerk serves an elected four
year term and is responsible for the general supervision of all the officers of the Town charged in any manner with the receipt, collection or disbursement of revenues, and the collection and return of such revenues into the Town treasury. In subordination to the President and Board of Trustees, the Comptroller exercises supervision over all interests of the Town of Cicero which may concern or relate to the Town finances, revenues, or property.
The Town Supervisor serves an elected four year term and is ex officio Town Treasurer. The Town Treasurer is charged by ordinance with keeping books of account which indicate the Town's receipts, disbursements, and appropriations for all yearly expenses. The Town Treasurer pays the Town's obligations pursuant to instructions from the President and Board of Trustees and gives monthly and annual reports which provide to the President and Board of Trustees an accounting of the activities of his office. The Town Collector serves an elected four year term and is charged with the collection of license fees, inspection fees, permit fees, water fees and all other moneys, the collection of which is not specifically provided for elsewhere in the Town's Code of Ordinances or State law. The Town Collector is charged with the collection of such fees and their daily remittance to the Town Treasurer.
As of April 1, 2012, the Town employed 589 full-time employees, of which seventy (74) were
sworn fire personnel and one hundred fifty (150) were sworn police personnel, and twenty-three (23) worked full-time at the Cicero Public Library. To compliment the police department were an additional thirty (30) auxiliary officers and fifteen (15) part time officers. An additional seventy (70) persons were employed by the Town as Crossing Guards to provide traffic safety for the Town’s school aged children. Another fifty (50) persons were employed part-time as needed in Public Works, Building and Zoning and various administrative departments.
In addition to Police and Fire functions, the Town's departmental functions are delineated as
follows: Administrative, Human Resources and Insurance, Assessor, Data Processing, License and Fee, Violations, Building Maintenance, Legal, 9-1-1 Operations, Health and Health Clinics, Electrical, Community and Economic Development, Public Works and Building.
The Town owns and operates its own water system without any encumbrances, which
supplies Lake Michigan water purchased through the City of Chicago. The Town is responsible for collection of sewage and delivery to major interceptors of the Metropolitan Water Reclamation District
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of Greater Chicago (formerly the Metropolitan Sanitary District of Greater Chicago) which treats the effluent.
Employment
Residents of the Town work within the Town itself, in downtown Chicago (only six miles from the Town), in industrial parks in Chicago and in other western and southwestern suburbs. The following table lists principal employers located within the Town.
Product/Business Approximate Employment
A & R Janitorial Service, Inc. Cleaning Service 1,800 Cicero School District #99 Education 1,630 Town of Cicero Government 603 Brad Foote Gear Works, Inc. Gears & Speed Reducers 450 Chicago Casting, Inc. Steel Castings 400 Terrao Paper Co., Inc. Paper Company 400 Morton Community College Education 250 Waste Management – Chicago Refuse Removal 200 Corey Steel Co. Cold Finished Steel Warehouse 200 The Royal Group Packaging Products 160
Source: The Town, Employers, the 2010 Illinois Service Directory and the 2010 Illinois Manufacturers Directory.
Unemployment Rates
Period Town of Cicero Cook County State of Illinois 1996 7.9% 5.6% 5.3% 1997 7.3 5.0 4.7 1998 6.7 4.8 4.5 1999 6.5 4.6 4.3 2000 5.9 4.6 4.3 2001 7.4 5.9 5.4 2002 8.8 7.3 6.5 2003 8.9 7.3 6.7 2004 8.9 6.7 6.2 2005 8.3 6.4 5.9 2006 6.1 4.8 4.6 2007 6.8 5.2 5.1 2008 8.3 6.5 6.4 2009 13.3 10.3 10.1 2010 13.1 10.4 10.5 2011 12.7 10.4 9.8 January, 2012 13.5 9.8 9.9 February, 2012 12.8 9.1 9.4
Source: Illinois Department of Employment Security, as of April, 2010.
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Principal Taxpayers in the Town
The ten largest taxpayers according to the 2010 Equalized Assessed Valuations (the latest date for which such information is available) in the Town are shown below.
Taxpayer
Product/Business
% of Total E.A.V., 2010(2)
Hawthorne Partners Real Estate $13,586,951 1.49% Heartland Bank Financial 9,923,100 1.09% KTR Capital Partners Real Estate 9,787,140 1.07% ONC Cicero LLC Real Estate 8,865,358 0.97% Cicero Marketplace Grocery 7,999,009 0.88% DiMucci Companies Construction 7,890,188 0.86% Cambridge Realty Real Estate 7,815,717 0.86% Target Property General Retail 6,979,823 0.76% The Home Depot Home 5,405,400 0.59% Exxon Mobil Corp Gasoline / Oil 5,156,177 0.56%
Total $83,408,863 9.13%
Source: Cook County Clerk.
(1) The above table represents a consolidation of information available through the Cook County Clerk’s Office and may omit some tax parcels as a result of multiple parcel listings for various taxpayers. (2) The Town’s total 2010 Cook County Equalized Assessed Valuation is $913,614,341.
CURRENT ECONOMIC CONDITION AND ECONOMIC DEVELOPMENT PROGRAMS
The Town has undertaken a number of programs to add tax base and employment opportunities over the past several years including the Wal-Mart Development (as defined below) and the Wirtz Development (as defined below). Among the recent developments and economic development programs of the Town are the following:
Recent Developments.
Sportsman’s Park
On April 10, 2012, the Town approved a Purchase and Sale Agreement with Wal-Mart Real Estate Business Trust related to the development of approximately 25 acres of the eastern half of a 66 acre tract of land on the southern border of the Town that was formerly the home of the Sportsman’s Park racetrack (the “Wal-Mart Development”). Wal-Mart has agreed to construct an approximately 200,000 square foot retail store on the site. Construction of the store is intended to begin in 2013 with a planned store opening in 2014. The Town, additionally, intends to market and sell no less than four (4) commercial out lots located on property adjacent to the proposed Wal-Mart store.
On July 8, 2011 the Town closed on the sale of approximately 35 acres of the western half of the site of the former Sportsman’s Park racetrack to 35L Sportmans’s, LLC. In connection with the sale, the Town entered into a redevelopment agreement with 35L Sportsman’s, LLC, Cicero Warehouse LLC, Wirtz Beverage Illinois, LLC, Wirtz Corporation, Wirtz Realty Corporation and E. & J. Gallo Winery pursuant to which the new owners constructed an approximately 600,000 square foot automated warehouse and distribution center on the site (the “Wirtz Development”). The facility opened on May
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12, 2012. The Town, upon the new owners’ satisfaction of certain conditions precedent, will be issued a $9.75 million dollar Tax Increment Financing Note. The new owners intend to market and sell no less than three (3) commercial out lots located on property adjacent to the warehouse.
Town Hall Development Project
In 2006 the Town broke ground for a new approximately 130,000 square foot Town Hall on approximately seven (7) acres of property commonly known as the Albright Park. The Town campus consists of four primary structures including a four-story parking garage, a Community Center Building, a two-story Police Station and a three-story Town Hall structure consisting of council chambers, court facilities and administrative offices. The Town constructed a north building on the former Honeywell Site to house the Town’s community development department, administration sub-station and an animal shelter. The grounds feature a fountain, park and other amenities. Cost for the New Town Hall buildings was approximately $58 million. Preliminary plans for the former Town Hall consist of mixed use developments including retail and residential townhouses and condominiums. There are also preliminary plans to renovate the current Metra station.
Tax Increment Financing. The Town has established four (4) tax increment financing (TIF) redevelopment project areas – the Cicero Area, the Laramie Area, the 54th Avenue Area and the Town Square Area which is the former Sportsman’s Racetrack property (collectively, the “Development Areas”).
Cicero Area
On December 23, 1986, the Town, through its President and Board of Trustees, adopted ordinances to: (1) establish the Town of Cicero Tax Increment Financing Redevelopment Plan and Project (the “Original Project Plan”); (2) establish the Town of Cicero Tax Increment Financing Redevelopment Area (the “Original Project Area”), which collectively provided for the redevelopment of a substantial portion of land within the Town’s eastern section, including all land occupied by the former AT&T Technologies (Western Electric) Plant; and (3) approve tax increment financing. Adoption of the Original Project Plan and Original Project Area allowed the Town to use incremental property and certain sales tax growth in the Original Project Area to fund a broad range of redevelopment and improvement projects within the Original Project Area. On May 23, 1989, the Town adopted an ordinance which amended the Original Project Plan and Original Project Area to expand the boundaries of the Original Project Area and to designate a certain area within the Original Project Area meeting the requirements of the Act (the “Sales Tax Boundary”) for generation and expenditure of certain state and local sales tax incremental revenue generated from increases in the receipts from Municipal Retailers’ Occupation Taxes, Municipal Service Occupation Taxes, Retailers’ Occupation Use Taxes, Service Use Taxes and Service Occupation Taxes (commonly referred to as “Sales Taxes”) expected to be generated from future increases in the volume of retail sales within the Sales Tax Boundary. The Town included most commercially used property within the Original Project Area within the Sales Tax Boundary. On December 29, 1992, the Town adopted ordinances which further amended the project plan and area to expand further the boundaries of the project area. On July 24, 2001, the Town adopted ordinances which amended the project plan and area to alter the boundaries of then-current project area by removing from the project area property generally bordered on the north by Roosevelt Road, on the east by Laramie Avenue, on the south by 21st Place, and on the west by Central Avenue and adding to the project area property generally located on Cermak Road between Laramie Avenue and 55th Avenue and on 50th Avenue between 25th Street and 25th Place. The Original Project Area, as amended, pursuant to the ordinances described above is the “Cicero Area.On June 15, 1993, the Town adopted an ordinance to take advantage of an amendment to the Act, which permits the Town to extend the completion dates of projects located within the Sales Tax Boundary of
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the Cicero Area from December 31, 2009 to December 31, 2013. Accordingly, the Town may receive incremental sales taxes generated within the Sales Tax Boundary to fund redevelopment projects located within the Sales Tax Boundary through 2013.
On August 23, 2004, Public Act 93-0987 amended the Act to permit the Town of Cicero to extend
the life of the Cicero Area for an additional twelve years. On November 9, 2004, the Town adopted an ordinance extending the life of the Cicero Area until December 21, 2021. As a result of this amendment, the Town may collect Incremental Property Taxes (but not Incremental Sales Taxes) generated within the Cicero Area to fund redevelopment projects located within the Cicero Area through tax levy year 2021 (tax collection year 2022).
The certified frozen equalized assessed valuation of the TIF was $55,127,918. The current
2010 equalized assessed valuation of the TIF is $ 162,926,793. Laramie Area
On July 9, 2002, the Town adopted additional ordinances which established a second tax increment financing redevelopment project area and plan within the Town. This second area is located along Laramie Avenue and 25th Street and encompasses primarily commercial frontage along both the east and west sides of Laramie Avenue (extending from the alley south of 22nd Street on the north to Pershing Road on the south) and frontage along the north and south sides of 25th Street (extending from the alley west of Central Avenue on the west to the alley west of 50th Avenue on the east). On September 28, 2004, the Town passed additional ordinances to expand the boundaries of this project area and plan to include the property commonly referred to as “Sportsman’s Park.” These actions allowed the Town to disconnect the Sportsman’s Park parcels from the Laramie TIF Area. In March of 2008, the Town formally adopted ordinances establishing the Town Square Redevelopment Project Area and ordinances amending the Laramie Redevelopment Project Area.
The County revised the certified frozen equalized assessed valuation of the Laramie TIF to
reflect the amended boundary changes. The revised equalized assessed valuation is $17,257,232. The current 2010 equalized assessed valuation is $23,663,036.
54th Avenue Area
On December 14, 2004, the Town adopted additional ordinances which established another tax increment financing redevelopment project area and plan within the Town. This third area is bounded on the north by Roosevelt Road, on the east by Laramie Avenue, on the south by Cermak Avenue and on the west by 55th Avenue and Central Street, and contains residential, retail, commercial, industrial and institutional uses. This tax increment financing redevelopment project area and plan constitutes the 54th Avenue Area.
Recently, Opus North Corporation constructed two (2) state-of-the-art industrial office/warehouse
distribution buildings totaling, collectively, approximately 551,000 square feet at a projected costs of $33,400,000.
The certified frozen equalized assessed valuation of the TIF was $32,932,480. The current
2010 equalized assessed valuation of the TIF is $43,254,645.
Town Square Area
The Wal-Mart Development and the Wirtz Development set forth above in the subsection entitled “CURRENT ECONOMIC CONDITION AND ECONOMIC DEVELOPMENT PROGRAMS -- Recent
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Developments – Sportsman’s Park” have occurred in the Town Square Area TIF. On February 26, 2008, the Town adopted ordinances that established certain properties within the Town as a tax increment finance district. The area commonly referred to as the former Sportsman Racetrack property was disconnected from the Laramie 25th Street TIF in order to form a stand-alone TIF Area. Parcels containing the former racetrack as well as other industrial properties were included in the Town Square TIF Area.
The frozen equalized assess valuation of the TIF was $1,400,548. The current 2010 equalized
assessed valuation of the TIF is $1,711,293. Enterprise Zone. The entire Town was designated as a Certified Enterprise Zone by the State of Illinois on July 1, 1984. The Enterprise Zone was scheduled to terminate on December 31, 2004 but was recertified on December 30, 2004 for a period through December 31, 2014. Enterprise Zone designation means that businesses that locate within the Town, upon a resolution of support adopted by the Town Board of Trustees, may be exempt from both state and local sales tax on production equipment and building materials.
Class 8 Designation. An area within Cicero that is generally bordered by Cermak Road to the north, 26th Street to the south, Cicero Avenue to the west and the Belt Railway to the east (the “Class 8 Area”) was recertified for Class 8 treatment by Cook County on October 28, 2004. Commercial and industrial properties located in the Class 8 Area are assessed at a level of 10% of fair market value, as determined by the County for the first ten (10) years, 15% of fair market value in year eleven and 20% of fair market value in year twelve; thereafter reverting to the standard 25% of fair market assessment.
Cook County Incentives. Certain incentives provided by Cook County with respect to property tax reduction are available to businesses locating or expanding in the Town. These incentives, which provide limited reduction in assessed values for certain newly constructed or substantially rehabilitated properties, are described in “PROPERTY TAX INFORMATION” herein.
REAL PROPERTY ASSESSMENT, TAX LEVY AND COLLECTION PROCEDURES
Assessment
The County Assessor (the “County Assessor”) is responsible for the assessment of all taxable real property within Cook County (the “County”), including that in the Town, except for certain railroad property and pollution control facilities, which are assessed directly by the State of Illinois (the “State”). For triennial reassessment purposes, Cook County is divided into three sections: west and south suburbs (the “South Triennial Area”), north and northwest suburbs (the “North Triennial Area”), and the City of Chicago (the “Chicago Triennial Area”). The Town is located in the South Triennial Area and was reassessed for the 2008 assessment year and will next be reassessed for the 2011 assessment year.
The Real Property Assessment Classification Ordinance adopted by the Cook County Board of
Commissioners, as from time to time amended (November 29, 1976; June 6, 1977; September 19, 1977; May 16, 1978; January 2, 1979; March 3, 1980; September 2 1980; October 3, 1983; April 2, 1984; November 18, 1985; May 19, 1986; June 20, 1988; September 5, 1989; December 18, 1989; March 16, 1992; December 6, 1994; November 19, 1996; May 6, 1997; November 23, 1999; April 18, 2000; September 6, 2001; December 4, 2001; April 9, 2002; July 13, 2004; December 14, 2004, February 15, 2006 and September 17, 2008) separates real property in the County into fourteen classifications for assessment purposes. After the County Assessor establishes the market value of a parcel of property,
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that value is multiplied by the appropriate classification percentage to arrive at the assessed valuation (the “Assessed Valuation”) for the parcel. The classification percentages range from (i) 16% for certain residential property to 38% for certain commercial property for the 2008 tax year; and (ii) 10% for certain residential and unimproved property to 25% for industrial and commercial property for tax years 2009 and thereafter.
Property is currently classified for assessment into six standard categories each of which is assessed at various percentages of market value as follows:
Assessment Rates
Assessment Year Assessment Years Assessment Class 2008 2009 and Thereafter
Class 1 – Unimproved real estate 22% 10%
Class 2 – Real estate (includes farm certain residential and certain multi-use facilities) 16% 10%
Class 3 – Other real estate used for residential purposes 16% in 2009
(i.e. rental real estate in excess of 6 units) 20% 13% in 2010 10% in 2011 and thereafter
Class 4 – Real estate owned and used by a not –for – profit
corporation (excluding residential) 30% 25%
Class 5a – Real estate not classified in any other classification (i.e. commercial property) 38% 25%
Class 5b – Industrial property 36% 25%
There are currently also eight additional categories which provide real estate tax incentives and
for which assessment rates vary over time, as further described below: Class 6b industrial; Class C commercial and industrial; Class 7a and 7b commercial; Class 8 commercial and industrial; Class 9 multi-family residential; Class S multifamily housing; and Class L commercial/industrial landmarks.
Industrial properties that are newly constructed or substantially rehabilitated and are used for
manufacturing purposes may be designated as Class 6b. Properties receiving the initial Class 6b designation will be assessed from the year of the designation of such classification at a level of (i) 16% of market value of the property for the first ten years of such designation, 23% for the eleventh year, 30% for the twelfth year through assessment year 2008, and (ii) 10% of market value of the property for the first ten years of such designation, 15% for the eleventh year, 20% for the twelfth year for tax years 2009 and thereafter. In each of the assessment years thereafter such industrial property would revert to the applicable standard classification assessment level for such property; provided, however, the Class 6b designation may be renewed in the tenth year of the designation and each tenth year thereafter and would be assessed at a level of 10% of the market value of property until expiration of the designation.
The Class C classification is designed to encourage industrial and commercial development by
offering a real estate tax incentive for the remediation of contaminated properties including abandoned property or vacant land. Properties receiving the initial Class C designation will be assessed from the
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year of the designation of such classification at a level of (i) 16% of market value of the property for the first 10 years of such designation, 23% in the eleventh year and 30% in the twelfth year through assessment year 2008 and (ii) 10% of market value of the property for the first 10 years of such designation, 15% in the eleventh year and 20% in the twelfth year for assessment years 2009 and thereafter. In each of the assessment years thereafter such property would revert to the applicable standard classification assessment level for such property; provided however, for industrial property, the Class C designation may be renewed during the tenth year of the designation and would be assessed at a level of 10% of the market value of such property until expiration of the designation.
Commercial properties that are newly constructed or substantially rehabilitated and are within an area determined to be an area in need of commercial development may be designated as a Class 7a or Class 7b property. Properties receiving the initial Class 7a or Class 7b designation will be assessed from the year of such designation of such classification at a level of (i) 16% of market value of the property for the first ten years of such designation, 23% for the eleventh year, 30% for the twelfth year through assessment year 2008 and (ii) 10% of market value of the property for the first ten years of such designation, 15% for the eleventh year, 20% for the twelfth year for assessment years 2009 and thereafter. In each of the assessment years thereafter, such commercial property would revert to the applicable standard classification for such property.
Certain commercial and industrial properties located in an area in need of substantial
revitalization and/or are located within an enterprise community, an empowerment zone or located in the townships of Bloom, Bremen, Calumet, Rich and Thornton may be designated as Class 8 or Class 8a property. Properties receiving the initial Class 8 designation will be assessed from the year of such designation of such classification at a level of (i) 16% of the market value of the property for ten years of such designation, 23% in the eleventh year, 30% in the twelfth year through assessment year 2008 and (ii) 10% of the market value of the property for ten years of such designation, 15% in the eleventh year, 20% in the twelfth year for assessment years 2009 and thereafter. Properties receiving the initial Class 8a designation will be assessed from the year of such designation of such classification at a level of 10% of the market value of the property for five years of such designation. In each of the assessment years thereafter, such commercial and industrial property would revert to the applicable standard classification assessment level for such property; provided however, the Class 8 classification may be renewed at the tenth year of such designation for an additional ten years and would be assessed at a level of 10% of the market value of such property up until expiration of such classification.
Multi-family residential properties that are newly constructed or substantially rehabilitated and
have at least 35% of the dwelling units leased at rents affordable to low or moderate income persons or households may be designated as Class 9 property. Properties receiving the initial Class 9 designation will be assessed from the year of such designation of such classification at a level of (i) 16% of market value of the property for ten years through assessment year 2008 and (ii) 10% of market value of the property for assessment years 2009 and thereafter. In each of the assessment years thereafter, such property would revert to the applicable standard classification assessment for such property; provided however, the Class 9 designation may be renewed at the tenth year of such designation for additional ten year periods and would be assessed at a level of 10% of the market value of such property up until expiration of the classification.
Qualifying federally subsidized Section 8 multi-family housing properties may be designated as
Class S property. Properties receiving the initial Class S designation will be assessed from the year of such designation of such classification at a level of (i) 16% of the market value of the property during
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a qualified period through assessment year 2008 and (ii) 10% of the market value of the property during a qualified period for assessment years 2009 and thereafter. In each of the assessment years thereafter, such property would revert to the applicable standard classification level for such property.
Qualifying commercial, industrial, multi-family and not-for-profit properties which are
designated a landmark or contributing building and have undergone substantial rehabilitation may be designated as Class L property. Properties receiving the initial Class L designation will be assessed from the date substantial rehabilitation year of such designation of such classification at a level of (i) 16% of market value of the property for the first ten years of such designation, 23% in the eleventh year, 30% in the twelfth year through tax year 2008 and (ii) 10% of the market value of the property for ten years of such designation, 15% in the eleventh year, 20% in the twelfth year for assessment years 2009 and thereafter. In each of the assessment years thereafter, such property would revert to the applicable standard classification assessment level for such property; provided however, the Class L designation may be renewed at the end of the tenth year of such designation for additional ten year periods and would be assessed at a level of 10% of the market value of such property up until expiration of the classification.
Certain of the above classifications have been modified (Class 6b, Class S, Class 7a, Class 7b, Class 8, Class 9 and Class L) over the years to provide for additional decreases in assessment levels. Properties that were designated under those classifications in prior years are subject to the then applicable assessment levels. Furthermore, certain classifications (Class 6a and Class 6c) have been eliminated; provided, however such properties that were designated under such classifications in prior years are subject to the then applicable assessment levels.
Property Tax Appeals
The County Assessor has established procedures enabling taxpayers to contest their tentative Assessed Valuations. Once the Assessor certifies final Assessed Valuations, a taxpayer can seek review of its assessment by filing a complaint with the Cook County Board of Review.
Owners of property can appeal decisions of the Board of Review to the Illinois Property Tax
Appeal Board (the “PTAB”), a statewide administrative body. The PTAB has the power to determine the assessed valuation of real property based on equity and the weight of the evidence. Taxpayers may appeal decisions of the PTAB to either the Circuit Court of Cook County or the Illinois Appellate Court under the Illinois Administrative Review Law.
As an alternative to seeking review of Assessed Valuations by the PTAB, taxpayers who have
first exhausted their remedies before the Board of Review may file an Objection in the Circuit Court of Cook County similar to the previous judicial review procedure but with a different standard of proof than that previously required. In addition, in cases where the County Assessor agrees that an assessment error has been made after tax bills have been issued, the County Assessor can correct the Assessed Value, and thus reduce the amount of taxes due, by issuing a Certificate of Error.
Appeals to the PTAB have been increasing in recent years. In a number of cases, the PTAB has
significantly reduced assessments for commercial or industrial property on the basis of either appraisals submitted by the claimants and/or on the basis of equity, as claimants provide evidence that their effective assessment level is greater than 2.5 times the assessment level of the lowest assessed property in the Cook County. If such appeals at the PTAB level are successful, property taxes are reduced (based on a lower assessed value) and, in some cases, taxing districts may be required to return to the County certain previously collected property taxes.
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Equalization
After the County Assessor has established the Assessed Valuation for each parcel for a given year, and following any revisions by the Board of Tax Appeals, the Illinois Department of Revenue (the "Department of Revenue") is required by statute to review the Assessed Valuations. The Department of Revenue establishes an equalization factor (the "Equalization Factor"), commonly called the "multiplier", for each county to make all valuations uniform among the 102 counties in the State. Under State law, the aggregate of the assessments within each county is to be equalized at 33 1/3% of the estimated fair market value of real property located within the county prior to any applicable exemptions. One multiplier is applied to all property in Cook County, regardless of its assessment category.
Once the Equalization Factor is established, the Assessed Valuation, as revised by the Board of Tax Appeals, is multiplied by the Equalization Factor to determine the equalized assessed valuation (the "Equalized Assessed Valuation") of that parcel. The Equalized Assessed Valuation for each parcel is the final property valuation used for determination of tax liability. The aggregate Equalized Assessed Valuation for all parcels in any taxing body's jurisdiction, plus the valuation of property assessed directly by the State, constitutes the total real estate tax base for the taxing body and is the figure used to calculate tax rates (the "Assessment Base"). The following table sets forth the Equalization Factor for Cook County for the last ten tax levy years.
Tax Levy Year Equalization 2010 3.3000 2009 3.3701 2008 2.9786 2007 2.8439 2006 2.7076 2005 2.7320 2004 2.5757 2003 2.4598 2002 2.4689 2001 2.3098 2000 2.2235 1999 2.2505 1998 2.1799
Source: Cook County Clerk's Office.
Exemptions
Public Act 96-1418, effective August 2, 2010, made changes to and added a number of property tax exemptions taken by residential property owners. These changes are discussed below.
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 $5,000 for taxable years prior to tax year 2004 through assessment year 2007. Additionally, the reduction may be $5,500 for assessment year 2008 and $6,000 for assessment years 2009 and thereafter (the “General Homestead Exemption”).
The Alternative General Homestead Exemption (the “Alternative General Homestead
Exemption”) caps EAV increases for homeowners (who reside on the property as their principal place of residence) at 7% up to a certain maximum each year as defined by the statute. Any amount of
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increase that exceeds the maximum exemption as defined is added to the 7% increase and is part of that property’s taxable EAV. Homes that do not increase by at least 7% a year are entitled, in the alternative, to the General Homestead Exemption described above.
The base tax year for purposes of calculation of the Alternative General Homestead Exemption
(the “Base Homestead Year”) is the 2002 assessment year for properties located in the Chicago Triennial Area, the 2003 assessment year for properties located in the North Triennial Area and the 2004 assessment year for properties located in the South Triennial Area. The Base Homestead Value is the EAV of the homestead property minus the General Homestead Exemption for that year: $4,500 for assessment years prior to 2004; $5,000 for assessment years 2004 through 2007; $5,500 for assessment year 2008 and $6,000 for the assessment years 2009 and thereafter.
For properties in the Chicago Triennial Area, the Alternative General Homestead Exemption
cannot exceed $33,000 for the assessment year 2006 (except as noted below), $26,000 for the assessment year 2007, $20,000 for the assessment years 2008 and 2009, $16000 for Assessment year 2010, $12,000 for the assessment years 2011, and the amount of the General Homestead Exemption for assessment years 2012 and thereafter. For properties in the North Triennial Area, the Alternative General Homestead Exemption cannot exceed $20,000 for assessment year 2006, $33,000 for assessment year 2007, $26,000 for assessment year 2008 and $20,000 for the assessment years 2009 and 2010, $12,000 for assessment years 2012, and the amount of the General Homestead Exemption for assessment years 2013 and thereafter. For properties in the South Triennial Area, the Alternative General Homestead Exemption cannot exceed $20,000 for assessment years 2006 and 2007, $33,000 for assessment year 2008, $26,000 for assessment year 2009, $20,000 for the assessment years 2010 and 2011, $16,000 for the assessment year 2012, $12,000 for assessment years 2013, and the amount of the General Homestead Exemption for assessment years 2014 and thereafter.
Furthermore, only in the City Triennial Area and only for assessment year 2006, the maximum exemption amount may be increased to: (i) $40,000, provided that the EAV of the property for assessment year 2006 exceeds the EAV of that property for assessment year 2002 by an amount equal to or greater than 100%, or (ii) $35,000 provided that the EAV of the property for assessment year 2006 exceeds the EAV of that property for assessment year 2002 by an amount greater than 80% but not more than 100%.
The Long-Time Occupant Homestead Exemption applies to those counties subject to the
Alternative General Homestead Exemption, including Cook County. Beginning with assessment year 2007 and thereafter, the EAV of homestead property of a taxpayer who (i) has owned the property for at least 10 years (or 5 years if purchased with certain governmental assistance) and (ii) has a household income of $100,000 or less (“Qualified Homestead Property”), may increase by no more than 10% per year. If the taxpayer’s annual income is $75,000 or less, the EAV of the Qualified Homestead Property may increase by no more than 7% per year. There is no exemption limit for Qualified Homestead Properties. Individuals applying for this exemption must comply with the following guidelines: (i) continuously occupy their property for 10 years, as of January 1st of the assessment year, and occupy such property as their principal residence or, (ii) continuously occupy their property as their principal place of residence for 5 years, as of January 1st of the assessment year, provided that the property was purchased with certain governmental assistance.
The Homestead Improvement Exemption applies to Residential Properties that have been
improved or rebuilt in the two years following a catastrophic event. The exemption is limited to
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$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 (the
“Senior Citizens Homestead Exemption) operates annually to reduce the EAV on a senior citizen’s home by $3,500 for all counties. For taxable years 2008 and thereafter, the maximum Senior Citizens Homestead Exemption is $4,000. Furthermore, 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 (the “Senior Freeze Exemption”)
freezes property tax assessments for homeowners who are 65 and older, reside in their property as their principal place of residence and receive household income not in excess of the maximum income limitation of (i) $50,000 or less in assessment years 2006 and 2007 and (ii) $55,000 or less in assessment years 2008 and thereafter. In general, the Senior Freeze 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.
The Homeowner Exemption for Long-term Properties (“H.E.L.P.”) provides relief to certain
longtime homeowners facing a dramatic rise in property taxes attributable to gentrification in established neighborhoods. H.E.L.P. exempts from property tax an amount equal to the current EAV for an eligible property which exceeds the sum of: (i) the EAV for the year prior to reassessment, plus (ii) the prior- year EAV multiplied by a factor equal to 150% of the average assessment increase for the most current reassessment of the assessment district. In order to qualify for the exemption, a homeowner must own and occupy Class 2 property for ten years or more as their principal residence, or five years or more if the owner received governmental assistance in acquiring the property.
Beginning with assessment year 2007, the Disabled Persons’ Homestead Exemption (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 the Disabled Veteran Exemption (as such term is hereinafter defined) or claiming exemption under the Disabled Veterans Standard Homestead Exemption cannot claim the Disabled Persons’ Homestead Exemption (as such term is hereinafter defined).
Exemptions available to disabled veterans include the following:
(a) An exemption which provides a reduction of up to $70,000 to the Assessed Valuation of property owned and used exclusively by such veterans or their spouses for residential purposes (the “Disabled Veteran Exemption”).
(b) The Disabled Veterans Standard Exemption (the “Disabled Veterans Standard 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: (a) 75% for exemptions granted in assessment years 2007 through 2009 and (b) 70% for exemptions granted in assessment year 2010 and each assessment year thereafter, are granted an exemption of $5,000 and (ii) those veterans with a service- connected disability of at least 50% but less than: (a) 75%, before exemptions granted in assessment year 2007 through 2009 and (b) 70% for exemptions granted in assessment year 2010 and each assessment year thereafter, are granted an exemption of $2,500.
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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 an exemption under the Disabled Persons’ Homestead Exemption cannot claim the aforementioned exemption.
However, disabled veterans may only avail themselves of one of the above exemptions.
Furthermore, the individuals claiming the Disabled Veteran Exemption or the Disabled Veteran’s Standard Exemption may not claim the Disabled Persons’ Homestead 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, subject to some limitations. Those individuals eligible for this exemption may claim the exemption in addition to other homestead exemptions, unless otherwise noted.
Lastly, 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.
Tax Levy
As part of the annual budgetary process of governmental units ("Units") with power to levy taxes in the County, proceedings are adopted by the designated body for each Unit each year in which they determine to levy real estate taxes. The tax levy proceedings impose each of the Unit's respective real estate taxes in terms of a dollar amount. The Illinois Truth in Taxation Act imposes procedural limitations on a Unit's real estate taxing powers, and requires notice and hearing in certain instances. (See "LEGISLATION CONCERNING PROPERTY TAX AUTHORITY - The Truth in Taxation Act" herein). Each Unit certifies its real estate tax levy, as established by the proceedings, to the County Clerk. The remaining administration and collection of the real estate taxes is statutorily assigned to the County Clerk and the County Treasurer.
After the Units file their annual tax levies, the County Clerk computes the annual tax rate for each Unit by dividing the levy of each Unit by the assessment base of the respective Unit. If any tax rate thus calculated exceeds any applicable statutory rate limit, the County Clerk disregards the excessive rate and applies the maximum rate permitted by law.
The County Clerk then computes the total tax rate applicable to each parcel of real
property by aggregating the tax rates of all of the Units having jurisdiction over the particular parcel. The County Clerk enters the tax determined by multiplying the total tax rate by the Equalized Assessed Valuation of that parcel in the books prepared for the County Collector (the "Warrant Books") along with the tax rates, the Assessed Valuation and the Equalized Assessed Valuation. The Warrant Books are the County Collector's authority for the collection of taxes and are used by the County Collector as the basis for issuing tax bills to all property owners.
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Collections
Property taxes are collected by the County Collector, who is also the County Treasurer, who remits to each Unit its share of the collections. Taxes levied in one year become payable during the following y