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An Ordinance Providing for the Payment of Toll Bridge Revenue Bonds (Sales Tax Supported), Series 2018, of the County of Kane, Illinois, in Advance of Maturity, and Authorizing and Directing the Execution of an Escrow Agreement in Connection Therewith
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WHEREAS, The County of Kane, Illinois (the “County”), is a duly organized and existing unit of local government created and existing under the provisions of the laws of the State of Illinois, and is now operating under the provisions of the Counties Code of the State of Illinois, as amended; and
WHEREAS, the County has issued and has outstanding Toll Bridge Revenue Bonds (Sales Tax Supported), Series 2018 (the “Bonds”); and
WHEREAS, the Bonds were issued to finance the construction of the Longmeadow Parkway Bridge (the “Project”); and
WHEREAS, the County has received an additional grant in the amount of $12,500,000 from the State of Illinois for costs associated with the Project (the “Grant Funds”); and
WHEREAS, receipt of the Grant Funds was unexpected at the time the Bonds were issued; and
WHEREAS, the County Board of the County (the “County Board”) hereby finds that it is advisable, necessary and in the best interests of the County to approve the use of the Grant Funds to reimburse Project expenditures, including Project expenditures paid with proceeds of the Bonds (the “Reimbursed Funds”); and
WHEREAS, the County Board hereby further finds that it is advisable, necessary and in the best interests of the County to apply the Reimbursed Funds to the payment of all of the outstanding Bonds described in the hereafter defined Escrow Agreement (the “Defeased Bonds”) and related costs; and
WHEREAS, in accordance with their terms, all of the Defeased Bonds may be called for redemption in advance of their respective maturities, and the County Board hereby further finds that it is necessary and desirable to make such call for the redemption of the Defeased Bonds on their earliest possible call date and provide for the giving of proper notice to the registered owners of the Defeased Bonds; and
WHEREAS, in order to properly provide for the payment of the Defeased Bonds, the County Board hereby further finds that it is necessary to transfer the Grant Funds to Zions Bancorporation, National Association, as escrow agent (the “Escrow Agent”), pursuant to an escrow agreement, substantially in the form set forth herein (the “Agreement”), to be invested by the Escrow Agent, on behalf of the County, in direct obligations of or obligations guaranteed by the full faith and credit of the United States of America, the principal of and interest on which will be used to pay the principal of and interest on the Defeased Bonds upon redemption prior to maturity; and
WHEREAS, the County Board hereby further finds that it is necessary that the Board authorize the form of Agreement with the Escrow Agent and direct the execution of the Agreement by officers of the County.
NOW, THEREFORE, BE IT ORDAINED BY THE County Board of the County of Kane, Illinois, as follows:
Section 1. Incorporation of Preambles. The Board hereby finds that all of the recitals contained in the preambles to this Ordinance are full, true and correct and does incorporate them into this Ordinance by this reference.
Section 2. Definitions. The words and terms used in this Ordinance shall have the definitions set forth for them in the form of Agreement provided herein, unless the context or use of same shall clearly indicate that another meaning is intended.
Section 3. The Funding of the Escrow. The County Treasurer is hereby authorized and directed to permanently transfer the Grant Funds to the Escrow Agent pursuant to the Escrow Agreement on the date of the Agreement (not later than November 30, 2025). Such funds shall be used and are hereby appropriated to acquire the Government Securities (as defined in the Agreement), to fund the costs incurred in connection with the execution and delivery of the Agreement and to provide a beginning cash deposit.
Section 4. Call of the Defeased Bonds. In accordance with the redemption provisions of the ordinance authorizing the issuance of the Bonds, the County, by the Board, does hereby make provision for the payment of and does hereby call the Defeased Bonds for redemption on December 15, 2028.
Section 5. Form and Authorization of Agreement. The Agreement and all the terms thereof, in the form provided hereby, are hereby approved, and the Chair of the Board and County Clerk are hereby authorized and directed to execute the Agreement in the name of the County. The Agreement shall be in substantially the following form:
Escrow Agreement
This Escrow Agreement, dated ____________, 2025, by and between The County of Kane, Illinois (the “County”), and Zions Bancorporation, National Association, a national banking association having trust powers, organized and operating under the laws of the United States of America, located in Chicago, Illinois (the “Escrow Agent”), in consideration of the mutual promises and agreements herein set forth:
W I T N E S S E T H:
Article I
Definitions
The following words and terms used in this Agreement shall have the following meanings unless the context or use clearly indicates another or different meaning:
Section 1.01. “Agreement” means this Agreement between the County and the Escrow Agent.
Section 1.02. “Board” means the County Board of the County.
Section 1.03. “Bonds” means the County’s Toll Bridge Revenue Bonds (Sales Tax Supported), Series 2018.
Section 1.04. “Code” means Section 148 of the Internal Revenue Code of 1986, and all lawful regulations promulgated thereunder.
Section 1.05. “Defeased Bonds” means the following Bonds:
$9,320,000 Toll Bridge Revenue Bonds (Sales Tax Supported), Series 2018, dated December 4, 2018, being all of the bonds outstanding from an issue in the original principal amount of $27,060,000, fully registered and without coupons, due or subject to mandatory redemption prior to maturity on December 15 of the years and in the amounts and bearing interest at the rates per annum as follows:
|
Year of Maturity |
Principal Amount |
Rate of Interest |
|
2029 |
$295,000 |
5.000% |
|
2030 |
305,000 |
5.000% |
|
2031 |
325,000 |
5.000% |
|
2032 |
340,000 |
5.000% |
|
2033 |
355,000 |
5.000% |
|
2034 |
375,000 |
5.000% |
|
2035 |
395,000 |
5.000% |
|
2036 |
415,000 |
4.000% |
|
2037 |
430,000 |
4.000% |
|
2038 |
445,000 |
4.125% |
|
2039 |
465,000 |
4.250% |
|
2040 |
485,000 |
4.250% |
|
2041 |
500,000 |
4.250% |
|
2042 |
525,000 |
4.250% |
|
2043 |
550,000 |
4.250% |
|
2044 |
575,000 |
4.250% |
|
2045 |
595,000 |
4.250% |
|
2046 |
620,000 |
4.250% |
|
2047 |
650,000 |
4.250% |
|
2048 |
675,000 |
4.250% |
Section 1.06. “County” means The County of Kane, Illinois.
Section 1.07. “Escrow Account” means the trust account established under this Agreement by the deposit of the Government Securities and the beginning cash.
Section 1.08. “Escrow Agent” means Zions Bancorporation, National Association, a national banking association having trust powers, organized and operating under the laws of the United States of America, located in Chicago, Illinois, not individually but in the capacity for the uses and purposes hereinafter mentioned, or any successor thereto.
Section 1.09. “Government Securities” means the non-callable direct obligations of or non-callable obligations guaranteed by the full faith and credit of the United States of America as to principal and interest deposited hereunder as more particularly described in Exhibit A to this Agreement.
Section 1.10. “Indenture” means the Toll Bridge Trust Indenture, dated as of December 1, 2018, by and between the County and the Escrow Agent, securing the Defeased Bonds.
Section 1.11. “Ordinance” means the ordinance adopted on the 13th day of May, 2025, by the Board entitled:
An Ordinance providing for the payment of Toll Bridge Revenue Bonds (Sales Tax Supported), Series 2018, of The County of Kane, Illinois, in advance of maturity, and authorizing and directing the execution of an Escrow Agreement in connection therewith.
Section 1.12. “Paying Agent” means Zions Bancorporation, National Association, Chicago, Illinois, as trustee, bond registrar and paying agent for the Defeased Bonds.
Section 1.13. “Treasurer” means the County Treasurer of the County.
Article II
Creation of Escrow
Section 2.01. The County by the Ordinance has authorized the provision for payment of the Defeased Bonds by the deposit on demand and to purchase on behalf of the County the Government Securities. Such deposit and securities will provide all moneys necessary to pay the principal of and interest on the Defeased Bonds upon redemption prior to maturity.
Section 2.02. The County deposits $__________ from funds on hand and legally available for the purchase of the Government Securities and the funding of a beginning cash escrow deposit on demand in the amount of $______. The beginning deposit and the Government Securities are held in an irrevocable trust fund account for the County to the benefit of the holders of the Defeased Bonds to pay the principal of and interest on the Defeased Bonds upon redemption prior to maturity. The Escrow Agent acknowledges that as a result of such deposit and purchase of Government Securities, considered together with funds now to the credit of the Interest Account and the Principal Account of the Toll Bridge Fund (each as defined and described in the Indenture, and the funds on deposit with Escrow Agent pursuant to an escrow agreement dated July 24, 2024, by and between the County and the Escrow Agent), the Bonds have been fully defeased pursuant to and in accordance with the provisions of Section 12.02 of the Indenture.
Section 2.03. The principal of and income and profit to be received from the Government Securities, when paid at maturity, and the cash held in accordance with Section 2.02 hereof, will be sufficient, at all times pending the final payment of the Defeased Bonds to pay all interest on and all principal of the Defeased Bonds upon redemption prior to maturity.
Section 2.04. The Escrow Agent and the County have each received the report of Dunbar, Breitweiser & Company, LLP, Certified Public Accountants, Bloomington, Illinois, attached hereto as Exhibit B (the “Verification Report”), that the principal of and income and profit to be received from the Government Securities, when paid at maturity, and the cash held in accordance with Section 2.02 hereof, will be sufficient, at all times pending the final payment of the Defeased Bonds, to pay all interest on and all principal of the Defeased Bonds upon redemption prior to maturity as evidenced by said Report.
Article III
Covenants of Escrow Agent
The Escrow Agent covenants and agrees with the County as follows:
Section 3.01. The Escrow Agent will hold the Government Securities and all interest income or profit derived therefrom and all uninvested cash in an irrevocable segregated and separate trust fund account for the sole and exclusive benefit of the holders of the Defeased Bonds until final payment thereof.
Section 3.02. The beginning cash escrow deposit shall not be invested by the Escrow Agent. Otherwise, the Escrow Agent will reinvest all available uninvested balances (rounded to an even $100) in the Escrow Account on deposit from time to time, whenever said balances exceed $1,000, and acknowledges that the schedule of amounts available for reinvestment appears in the cash flow tables in the Verification Report. Investments so made shall be in direct obligations of or obligations guaranteed by the full faith and credit of the United States of America or in money market mutual funds comprised solely of such obligations, and shall be scheduled to mature on or prior to the next succeeding interest payment date on the Defeased Bonds on which such proceeds will be needed to pay the principal of or interest on the Defeased Bonds.
The Escrow Agent shall hold balances not so invested in the Escrow Account on demand and in trust for the purposes hereof and shall secure same in accordance with applicable Illinois law for the securing of public funds.
Section 3.03. The Escrow Agent will take no action in the investment or securing of the proceeds of the Government Securities which would cause the Defeased Bonds to be classified as “arbitrage bonds” under the Code, provided, it shall be under no duty to affirmatively inquire whether the Government Securities as deposited are properly invested under said section; and, provided, further, it may rely on all specific directions in this Agreement in the investment or reinvestment of balances held hereunder.
Section 3.04. The Escrow Agent will promptly collect the principal, interest or profit from the Government Securities and promptly apply the same as necessary to the payment of principal and interest on the Defeased Bonds upon redemption prior to maturity as herein provided.
Section 3.05. The Escrow Agent will remit to the Paying Agent, in good funds on or before each principal or interest payment on the Defeased Bonds, moneys sufficient to pay such principal and interest as will meet the requirements for the retirement of the Defeased Bonds and such remittances shall fully release and discharge the Escrow Agent from any further duty or obligation thereto under this Agreement.
Section 3.06. The Escrow Agent will make no payment of fees, charges or expenses due or to become due, of the Paying Agent, and the County either paid such fees, charges and expenses in advance as set forth in Section 3.07 hereof or covenants to pay the same as they become due.
Section 3.07. The charges, fees and expenses of the Escrow Agent have been paid in advance, and all charges, fees or expenses of the Escrow Agent in carrying out any of the duties, terms or provisions of this Agreement shall be paid solely therefrom.
Section 3.08. The County has called the Defeased Bonds for redemption and payment prior to maturity on December 15, 2028. The Escrow Agent will cause the Paying Agent to provide for and give timely notice of the call for redemption of the Defeased Bonds. In the event the Escrow Agent determines that the Paying Agent will not give such timely notice, the Escrow Agent will give such notice. The form and time of the giving of such notice regarding the Defeased Bonds shall be as specified in the ordinance authorizing the issuance of the Bonds. The County shall reimburse the Escrow Agent for any actual out of pocket expenses incurred in the giving of such notice, but the failure of the County to make such payment shall not in any respect whatsoever relieve the Escrow Agent from carrying out any of the duties, terms or provisions of this Agreement.
The Escrow Agent shall also cause the Paying Agent to give notice of the call of the Defeased Bonds, on or before the date the notice of such redemption is given to the holders of the Defeased Bonds, to the Municipal Securities Rulemaking Board (the “MSRB”) through its Electronic Municipal Market Access system for municipal securities disclosure or through any other electronic format or system prescribed by the MSRB for purposes of Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. Information with respect to procedures for submitting notice can be found at https://msrb.org.
Section 3.09. The Escrow Agent has all the powers and duties herein set forth with no liability in connection with any act or omission to act hereunder, except for its own negligence or willful breach of trust, and shall be under no obligation to institute any suit or action or other proceeding under this Agreement or to enter any appearance in any suit, action or proceeding in which it may be defendant or to take any steps in the enforcement of its, or any, rights and powers hereunder, nor shall be deemed to have failed to take any such action, unless and until it shall have been indemnified by the County to its satisfaction against any and all costs and expenses, outlays, counsel fees and other disbursements, including its own reasonable fees, and if any judgment, decree or recovery be obtained by the Escrow Agent, payment of all sums due it, as aforesaid, shall be a first charge against the amount of any such judgment, decree or recovery.
Section 3.10. The Escrow Agent may in good faith buy, sell or hold and deal in any of the Defeased Bonds.
Section 3.11. The Escrow Agent will submit to the Treasurer a statement within forty-five (45) days after June 16 and December 16 of each calendar year, commencing ______________ 16, 2025, itemizing all moneys received by it and all payments made by it under the provisions of this Agreement during the preceding six (6) month period (or, for the first period, from the date hereof to _____________ 16, 2025), and also listing the Government Securities on deposit therewith on the date of said report, including all moneys held by it received as interest on or profit from the collection of the Government Securities.
Section 3.12. If at any time it shall appear to the Escrow Agent that the available proceeds of the Government Securities and deposits on demand in the Escrow Account will not be sufficient to make any payment due to the holders of any of the Defeased Bonds, the Escrow Agent shall notify the Treasurer and the Board, not less than five (5) days prior to such date, and the County agrees that it will from any funds legally available for such purpose make up the anticipated deficit so that no default in the making of any such payment will occur.
Article IV
Covenants of County
The County covenants and agrees with the Escrow Agent as follows:
Section 4.01. The Escrow Agent shall have no responsibility or liability whatsoever for (a) any of the recitals of the County herein, (b) the performance of or compliance with any covenant, condition, term or provision of the Ordinance, and (c) any undertaking or statement of the County hereunder or under the Ordinance.
Section 4.02. All payments to be made by, and all acts and duties required to be done by, the Escrow Agent under the terms and provisions of this Agreement, shall be made and done by the Escrow Agent without any further direction or authority of the County or the Treasurer.
Article V
Amendments, Reinvestment of
Funds, Irrevocability of Agreement
Section 5.01. Except as provided in Section 5.04 hereof, all of the rights, powers, duties and obligations of the Escrow Agent hereunder shall be irrevocable and shall not be subject to amendment by the Escrow Agent and shall be binding on any successor to the Escrow Agent during the term of this Agreement.
Section 5.02. Except as provided in Section 5.04 hereof, all of the rights, powers, duties and obligations of the County hereunder shall be irrevocable and shall not be subject to amendment by the County and shall be binding on any successor to the officials now comprising the Board during the term of this Agreement.
Section 5.03. Except as provided in Section 5.04 hereof, all of the rights, powers, duties and obligations of the Treasurer hereunder shall be irrevocable and shall not be subject to amendment by the Treasurer and shall be binding on any successor to said official now in office during the term of this Agreement.
Section 5.04. This Agreement may be amended or supplemented, and the Government Securities or any portion thereof may be sold, redeemed, invested or reinvested, in any manner provided (any such amendment, supplement, or direction to sell, redeem, invest or reinvest to be referred to as a “Subsequent Action”), upon submission to the Escrow Agent of each of the following:
(1) Certified copy of proceedings of the Board authorizing the Subsequent Action and copy of the document effecting the Subsequent Action signed by duly designated officers of the County.
(2) An opinion of nationally recognized bond counsel or tax counsel nationally recognized as having an expertise in the area of tax-exempt municipal bonds that the Subsequent Action has been duly authorized by the Board and will not adversely affect the tax-exempt status of the interest on the Bonds nor violate the covenants of the County not to cause the Bonds to become “arbitrage bonds” under the Code, and that the Subsequent Action does not materially adversely affect the legal rights of the holders of the Defeased Bonds.
(3) An opinion of a firm of nationally recognized independent certified public accountants that the amounts (which will consist of cash or deposits on demand held in trust or receipts from non-callable direct obligations of or non-callable obligations guaranteed by the full faith and credit of the United States of America, all of which shall be held hereunder) available or to be available for payment of the Defeased Bonds will remain sufficient to pay when due and upon redemption prior to maturity all principal and interest on the Defeased Bonds after the taking of the Subsequent Action.
Article VI
Merger, Consolidation or Resignation of Escrow Agent
Any banking association or corporation into which the Escrow Agent may be merged, converted or with which the Escrow Agent may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Escrow Agent shall be a party, or any banking association or corporation to which all or substantially all of the corporate trust business of the Escrow Agent shall be transferred, shall succeed to all the Escrow Agent’s rights, obligations and immunities hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. The Escrow Agent may at any time resign as Escrow Agent under this Agreement by giving 30 days’ written notice to the County, and such resignation shall take effect upon the appointment of a successor Escrow Agent by the County. The County may select as successor Escrow Agent any financial institution with capital, surplus and undivided profits of at least $75,000,000 and having a corporate trust office within the State of Illinois, and which is authorized to maintain trust accounts for municipal corporations in Illinois under applicable law.
Article VII
Notices to the County,
the Treasurer and the Escrow Agent
Section 7.01. All notices and communications to the County and the Board shall be addressed in writing to: County Board, The County of Kane, Kane County Government Center, 719 South Batavia Avenue, Building A, Geneva, Illinois 60134.
Section 7.02. All notices and communications to the Treasurer shall be addressed in writing to: County Treasurer, The County of Kane, Kane, Kane County Government Center, 719 South Batavia Avenue, Building A, Geneva, Illinois 60134.
Section 7.03. All notices and communications to the Escrow Agent shall be addressed in writing to: Zions Bancorporation, National Association, 111 West Washington Street, Suite 1860, Chicago, Illinois 60602.
Article VIII
Termination of Agreement
Section 8.01. That, upon final disbursement of funds sufficient to pay the principal and interest of the Defeased Bonds as hereinabove provided for, the Escrow Agent will transfer any balance remaining in the Escrow Account to the Treasurer with due notice thereof mailed to the Board, and thereupon this Agreement shall terminate.
Article IX
Counterparts
Section 9.01. This Agreement may be executed in counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
In Witness Whereof, The County of Kane, Illinois, has caused this Agreement to be signed in its name by the Chair of the Board and to be attested by the County Clerk of the County; and Zions Bancorporation, National Association, Chicago, Illinois, not individually, but in the capacity as hereinabove described, has caused this Agreement to be signed in its corporate name by one of its officers and attested by one of its officers under its corporate seal hereunto affixed, all as of the date of this Agreement.
The County of Kane, Illinois
By_______________________________
Chair, County Board
Attest:
__________________________________
County Clerk
Zions Bancorporation, National Association,
Chicago, Illinois
By_________________________________
Its___________________________
Attest:
_________________________________
Its_______________________________
[Bank Seal]
This Escrow Agreement received and acknowledged by me as of the date of this Agreement.
__________________________________
County Treasurer
Exhibit A
Government Securities
Exhibit B
Verification Report
Section 6. Purchase of the Government Securities. The Escrow Agent is hereby authorized to act as agent for the County in the purchase of the Government Securities described and set forth in the Escrow Agreement, and a bidding agent may be used to conduct the bidding of the Government Securities.
Section 7. Severability. If any section, paragraph, clause or provision of this Ordinance shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Ordinance.
[Remainder of page intentionally left blank]
Section 8. Repealer and Effective Date. All ordinances, resolutions or parts thereof in conflict herewith be and the same are hereby repealed and that this Ordinance shall be in full force and effect forthwith upon its adoption.
Adopted by the County Board of The County of Kane, Illinois, this 13th day of May, 2025.
____________________________ ____________________________
John A. Cunningham, MBA, JD, JD Corinne M. Pierog MA, MBA
Clerk, County Board Chairman, County Board
Kane County, Illinois Kane County, Illinois
Vote: