CITY COUNCIL 2013/09/16 Agenda
THE CITY OF LAKE FOREST
CITY COUNCIL AGENDA
Monday, September 16, 2013
Special Start time 6:30 p.m.
City Hall
CALL TO ORDER AND ROLL CALL 6:30 p.m.
City Hall First Floor Conference Room
Honorable Mayor, Donald Schoenheider
Kent Novit, Alderman First Ward Stanford Tack, Alderman Third Ward
Catherine Waldeck, Alderman First Ward Jack Reisenberg, Alderman Third Ward
David Moore, Alderman Second Ward Robert Palmer, Alderman Fourth Ward
George Pandaleon, Alderman Second Ward Michael Adelman, Alderman Fourth Ward
EXECUTIVE SESSION for the purpose of discussing Land acquisition/disposition
5 ILCS 120/2 (c) (5).
RECESS 7:25 p.m.
RECONVENE IN OPEN SESSION 7:30 p.m.
City Hall Council Chambers
City Hall Council Chambers
CALL TO ORDER AND ROLL CALL 7:30 p.m.
PLEDGE OF ALLEGIANCE
REPORTS OF CITY OFFICERS
1. COMMENTS BY MAYOR 7:35 p.m.
A. Resolution of Sympathy for former Mayor Kent Chandler
A copy of the Resolution can be found beginning on page 9
B. A Resolution Approving the Establishment of a Joint Task Force with the Lake
Bluff Park District to Explore Shared Services and Capital Opportunities
Related to Parks and Recreation
PRESENTED BY: Mayor, Don Schoenheider
BACKGROUND/DISCUSSION: Lake Forest Mayor Don Schoenheider and Lake Bluff Park
Board President Kevin Considine met with City and Park District staff this summer to discuss
the challenges in each community for addressing future parks and recreation capital
needs and services. The outcome of such dialogue was the enclosed resolution
recommending the establishment of a Joint Task Force that creates the opportunity to
explore possibilities related to capital, land use and shared services that will permit both
communities to continue to deliver quality recreation services in the face of challenging
economic times. The purpose and formation of the Joint Task Force also supports
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September 16, 2013 City Council Agenda
numerous priorities in The City’s Strategic Plan including promotion of Community
Character and Livability, Fiscal Stewardship, and Human Capital and Service Delivery.
The Resolution is located on page 10.
Composition: The Mayor of The City of Lake Forest and the Board of Commissioners of the
Lake Bluff Park District Board, shall each appoint, with the advice and consent of their
respective corporate authorities, four representatives to the Joint Task Force. It is desirable
for two of the four representatives, at a minimum, be a resident-at-large, rather than
existing elected or appointed officials. The members of the Joint Task Force shall select
one of its members to serve as Chairperson and the Joint Task Force may establish,
combine or abolish sub-committees as it may from time-to-time deem appropriate. It is
anticipated that the task force will meet monthly over the course of the next year.
Residents interested in serving on the Joint Task Force are invited to apply via a Volunteer
Profile Sheet located on the City’s website or available at the Recreation Center, 400
Hastings Road. The deadline to apply is September 30, 2013. The City of Lake Forest
appointments will be announced October 7, 2013 with a kick off meeting anticipated for
mid-October.
RECOMMENDED ACTION: If appropriate and should City Council desire, approve
Resolution XX approving the establishment of a Joint Task Force to explore shared
services and capital opportunities related to parks and recreation with the Lake Bluff Park
District.
2. COMMENTS BY CITY MANAGER 7:50 p.m.
A. Steve Schutt, President of Lake Forest College, Community Spotlight
B. BMW Update
C. Strategic Plan Update, City Manager Robert Kiely
An overview of the progress to date on the Strategic Plan since it was
adopted at your February 4, 2013 City Council Meeting. A Strategic
Planning Matrix can be found on page 13 of your packet.
3. COMMENTS BY COUNCIL MEMBERS 8:20 p.m.
4. OPPORTUNITY FOR CITIZENS TO ADDRESS THE CITY COUNCIL ON NON-AGENDA
ITEMS
5. ITEMS FOR OMNIBUS VOTE CONSIDERATION 8:25 p.m.
1. Approval of the September 3, 2013 City Council minutes.
A Copy of the minutes can be found beginning on page 14
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September 16, 2013 City Council Agenda
2. Award of Purchase for the Replacement of a Log Chipper for the Forestry
Section
STAFF CONTACT: Michael Thomas, Director of Public Works (847-810-3540)
PURPOSE AND ACTION REQUESTED: Staff is requesting City Council authorization to
replace one of Forestry’s two log chippers. Forestry continues to spend a significant
amount of their time removing trees that are infected with either Dutch Elm Disease or
Emerald Ash Borer. In doing so, the Section needs its removal equipment (tower truck,
log loader, and two chippers) to be operational and without significant mechanical
issues. Staff is requesting replacement and upgrade of their 6” chipper, a 2006 Morbark
2070XL. The proposed replacement chipper will grind logs up to 15” in diameter. The size
of the chipper will not allow for the use of two separate removal crews, but its
maneuverability will allow staff to reach off road areas (e.g. bike paths, easements,
wooded areas adjacent to parks, etc.).
BACKGROUND/DISCUSSION: The current chipper has accrued approximately 1,300
operating hours. Its threads are pulled out of the knife mounting area therefore requiring
the entire drum be replaced. The drum is the most significant piece of any chipper and
its cost to repair is higher than the chipper’s current value. As previously noted, the
replacement chipper will not only assist crews with the removal of diseased trees, but it
will also play a significant role after heavy wind or ice storms requiring trimming and
removals throughout the City.
Therefore on September 12, 2013, the following bids were received:
Company Make Model Base
Price
Trade Net
Alexander Eqpt. Co. Morbark M15R (demo) $48,800 $8,500 $40,300
Vermeer Vermeer BC1500 $44,925 $3,500 $41,425
Alexander Eqpt. Co. Morbark M15R $51,800 $8,500 $43,300
Bandit Industries Bandit 1390XP $49,431 $4,000 $45,431
BUDGET/FISCAL IMPACT: On June 17, 2013, staff met the Property and Public Lands
Committee (PPL hereafter) to review this purchase along with Forestry’s plan to address
the Emerald Ash Borer issue. Renting a chipper costs approximately $3,400 / month;
based on the net cost of the low bid, the replacement chipper would be paid for in less
than 14 months. The PPL Committee unanimously voted to support the recommendation
to replace the current chipper with a larger size model.
The City’s Forestry Section demonstrated all three machines In August and found the
Morbark chipper to be a sufficient unit. Morbark has re-engineered all of their chipper
units over the past three years to be a significantly more durable machine. If City Council
approves this request, the chipper would be delivered immediately and ready for use this
week by the Forestry crews.
$400,000 is budgeted in F.Y. 2014 to manage the EAB issue throughout Lake Forest.
$50,000 has been earmarked for treatment, $150,000 for planting, and $150,000 for
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September 16, 2013 City Council Agenda
removals. Forestry staff has committed the entire removal amount to various contractors
in the Chicago land area. However Forestry staff acknowledges that with the focus on
removals for the remaining part of this fiscal year, they will not be able to utilize the entire
$150,000 budget for tree replacement. Therefore the $40,300 expense will be funded by
transferring $40,300 from the tree replacement portion of the EAB program to the Capital
Equipment account.
RECOMMENDED ACTION: Staff recommends that City Council award the bid to the
lowest responsive bidder, Alexander Equipment Company, in the net amount of $40,300.
Initial funding for this purchase will be taken from the F.Y. ’14 capital equipment account.
Finance will then reimburse that account via a fund transfer with dollars from the F.Y. ’14
Tree Replacement Program capital line item.
3. Award of One-Year Contract for Office Supplies
STAFF CONTACT: Diane Hall, Assistant Director of Finance (847-810-3614)
PURPOSE AND ACTION REQUESTED: Staff recommends City Council waive bidding
procedures and award the contract for office supplies to Warehouse Direct through the
Suburban Purchasing Cooperative of the Northwest Municipal Conference.
BACKGROUND/DISCUSSION: The City Council approved a contract with Office Max in
May 2009 for one year, with the option of extending four additional one year terms. The
City has consolidated all office supplies under one contract to ensure each department
receives the best pricing available.
City staff requested comparative pricing from Warehouse Direct to ensure the City is still
receiving the best pricing available based on current contract pricing through Office
Max. The comparison shows Warehouse Direct would offer discounts compared to
current pricing. Warehouse Direct was awarded the contract by Northwest Municipal
Conference, as well as the U.S. Communities Government Purchasing Alliance after a
competitive bid was completed. Please find attached the contract extension
announcement on page 21.
BUDGET/FISCAL IMPACT: Office supplies are paid directly from department operating
budgets and do not have an immediate fiscal impact. The amounts have been
included in the annual budget. The estimated total purchases for FY2014 is $45,000.
RECOMMENDED ACTION: If appropriate and should the City Council desire, waive the bid
process and award the office supply contract to Warehouse Direct through August 30,
2014 with the option of one additional year based on the contract approved by the
Northwest Municipal Conference.
FY2014
Funding
Source
Account Number
Account
Budget
Amount
Requested
Budgeted?
Y/N
C.I.P. Fund 311-5001-450-75-49 $50,000 $40,300 Y
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September 16, 2013 City Council Agenda
4. Consideration of Ordinances Approving Recommendations from the
Building Review Board. (First Reading and if Desired by the City Council,
Final Approval)
STAFF CONTACT: Catherine Czerniak,
Director of Community Development (810-3504)
The following recommendations from the Building Review Board are presented to the City
Council for consideration as part of the Omnibus Agenda.
296 Mills Court - The Building Review Board recommended approval of a new residence on a
vacant lot. The Board’s review included the overall site plan, design of the house and garage,
exterior materials and the landscaping. No public testimony was presented to the Board on
this petition. (Board vote: 5-0, approved)
500 Ridge Road - The Building Review Board recommended approval of a partial demolition
and the design, massing and materials of the replacement additions. No public testimony was
presented to the Board on this petition. (Board vote: 6-0, approved)
Ordinances approving each of the petitions as recommended by the Building Review Board,
with key exhibits attached, are included in the Council packet beginning on page 22 The
Ordinances and complete exhibits are available for review in the Community Development
Department.
RECCOMMENDED ACTION: If appropriate and should the City Council desire, waive first
reading and grant final approval of the Ordinances in accordance with the
recommendations of the Building Review Board.
5. Consideration of Ordinances Approving Recommendations from the Zoning
Board of Appeals. (First Reading, and if Desired by the City Council, Final
Approval)
STAFF CONTACT: Catherine Czerniak,
Director of Community Development (810-3504)
The following recommendations from the Zoning Board of Appeals are presented to the City
Council for consideration as part of the Omnibus Agenda.
840 Oakwood Avenue – The Zoning Board of Appeals recommended approval of variances
from the setbacks for the front and side yards to allow modifications to and reconstruction of
the existing non-conforming front porch. One letter in support of the project was presented to
the Board from a neighboring property owner. No other public testimony was presented to the
Board on this petition. (Board vote: 6-0, approved)
296 Mills Court – The Zoning Board of Appeals recommended approval of a variance to allow a
new house to encroach into the front yard setback to conform with the alignment of other
homes on the street and approval of a variance to allow a detached garage to encroach into
the rear yard setback to conform with other garages in the neighborhood. One letter from a
neighbor was submitted stating concerns about the proposed garage location, the condition
of the existing fence and rear yard, security of his property and he asked that care be given to
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September 16, 2013 City Council Agenda
assure proper access to the many utilities located in this area. The Board acknowledged that
the proposed project will result in an improvement over existing conditions and that existing
utility easements would be respected. (Board vote: 5-1, approved) The dissenting Board
member expressed concern about the limited maneuverability of the driveway given the
tightness of the site and the dead end street.
The Ordinances approving the petitions as recommended by the Zoning Board of Appeals,
including the conditions of approval and key exhibits, are included in the Council’s packet
beginning on page 39. The Ordinances and complete exhibits are available for review in the
Community Development Department.
RECCOMMENDED ACTION: If appropriate and should the City Council desire, waive first
reading and grant final approval of the Ordinances in accordance with the
recommendation of the Zoning Board of Appeals.
6. Consideration of an Ordinance Approving a Recommendation from the
Historic Preservation Commission. (First Reading and if Desired by the City
Council, Final Approval)
STAFF CONTACT: Catherine Czerniak,
Director of Community Development (810-3504)
The following recommendation from the Historic Preservation Commission is presented to the
City Council for consideration as part of the Omnibus Agenda.
20 Mayflower Road – The Historic Preservation Commission recommended approval siting,
massing and design of a one story, attached garage and mudroom addition and approval of
the associated building scale variance. The Commission found that the project as designed
satisfies the criteria for a building scale variance and that the project complies with the
applicable design standards for projects within the Historic District. The Commission
received two letters, one from the owner of a neighboring property stating support for the
project and the other, stating general support for the project with suggestions regarding
landscaping, and architectural details. (Board vote: 6-0, approved)
The ordinance approving the petition with conditions of approval as recommended by the
Historic Preservation Commission, with key exhibits attached, is included in the Council’s packet
beginning on page 56. The Ordinance and complete exhibits are available for review in the
Community Development Department.
RECCOMMENDED ACTION: If appropriate and should the City Council desire, waive first
reading and grant final approval of the Ordinance in accordance with the
recommendations of the Historic Preservation Commission.
7. Ratification of a Lease Agreement with Lake Forest Bank and Trust for the
Drive- Up ATM Facility and premises located at 70 N. Bank Lane.
PRESESNTED BY: Property and Public Lands Committee Chairman Reisenberg
STAFF CONTACT: Carina Walters, Assistant City Manager (810-3680)
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September 16, 2013 City Council Agenda
PURPOSE AND ACTION REQUESTED: At your September 3, 2013 City Council meeting, the
Board approved the lease agreement subject to a ten year initial term and three five-
year renewals with either party able to terminate. Staff has conveyed the Councils
action with Lake Forest Bank and Trust who is reviewing the modifications. This matter will
be on the PPL agenda earlier this evening.
RECOMMENDED ACTION: If Appropriate and should the City Council desire, ratify a Lease
Agreement with Lake Forest Bank and Trust for the Drive- Up ATM Fa cility located at 70 N.
Bank Lane.
RECOMMENDED ACTION: Approve the seven (7) Omnibus items as presented.
6. ORDINANCES 8:40 p.m.
1. Consideration of an Ordinance Authorizing the Issuance of General
Obligation Refunding Bonds, Series 2013 (Final Reading)
PRESENTED BY: ELIZABETH HOLLEB, FINANCE DIRECTOR (847) 810-3612
PURPOSE AND ACTION REQUESTED: Staff requests granting final approval of an
Ordinance authorizing issuance of 2013 refunding bonds.
BACKGROUND/DISCUSSION: In 2010, the City issued General Obligation Bonds,
Series 2010A in the amount of $9,665,000. The proceeds on this issue were used to
provide partial financing for the construction of the Municipal Services facility. The
entire principal amount is due in December 2015, at which time it was anticipated
that the Laurel Avenue property which had served as the prior site of Municipal
Services would be redeveloped and the proceeds of that redevelopment would
be used to retire the bonds.
National economic conditions have delayed the redevelopment of the Laurel
Avenue property although discussions continue on the best use of the site. The
Finance Committee has previously deliberated on the refinancing of the 2010A
issue at this time for the following reasons:
• 2010A issue is callable on or after December 15, 2013
• Interest rates remain competitive and are anticipated to increase
• No other bond issues are planned in 2013, allowing the refunding to occur
as a bank-qualified issue, yielding additional interest savings
• The refunding would provide additional flexibility for the redevelopment of
the Laurel Avenue property
Attached is the Official Statement (page 65) which has been submitted to
Moody’s Investors Service with a request for a rating.
FISCAL IMPACT: The interest rate on the bond issue will be determined at the
online bid auction scheduled for September 16. Debt service on the bond issue is
scheduled through December 2032 and will be paid from the City’s property tax
levy for debt. The bonds will be callable in whole or in part on or after December
15, 2021. Proceeds from the redevelopment of the Laurel Avenue property could
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September 16, 2013 City Council Agenda
be used to advance refund these bonds and provide additional debt capacity for
future needs.
RECOMMENDED ACTION: Grant final approval of the bond ordinance (page 140).
An online bid will occur on Monday, September 16. At the September 16 City
Council meeting, a final bond ordinance will be presented for Council
consideration.
7. NEW BUSINESS 9:15 p.m.
8. ADDITIONAL ITEMS FOR COUNCIL DISCUSSION 9:20 p.m.
9. ADJOURNMENT 9:30 p.m.
Office of the City Manager September 11, 2013
The City of Lake Forest is subject to the requirements of the Americans with Disabilities
Act of 1990. Individuals with disabilities who plan to attend this meeting and who require
certain accommodations in order to allow them to observe and/or participate in this
meeting, or who have questions regarding the accessibility of the meeting or the
facilities, are required to contact City Manager Robert R. Kiely, Jr., at (847) 234-2600
promptly to allow the City to make reasonable accommodations for those persons.
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RESOLUTION OF SYMPATHY
WHEREAS, on behalf of The City of Lake Forest, the City Council expresses its sadness at
the profound loss of Kent Chandler, Jr. on September 7, 2013; and
WHEREAS, Kent Chandler was a life-long and valued resident of Lake Forest, a former
student of the Bell School, Gorton School, serving locally on the Boards of Lake Forest Country
Day School, Onwentsia Club, Lake Forest Hospital, the Buchanan Family Foundation as well as on
the Boards of numerous regional organizations; and
WHEREAS, Kent Chandler carried on a family legacy, like his father and others before him,
serving the City as Mayor of Lake Forest from 1970-1973, and during which time, led the City
Council in redrafting zoning and planning ordinances, Gorton School became Gorton Community
Center and the Gorton and Cemetery Commissions were established; and
WHEREAS, Kent Chandler, prior to being elected Mayor, served The City of Lake Forest as
Chairman of the Zoning Board of Appeals and on the Plan Commission and Board of Fire and
Police Commissioners; and
WHEREAS, Kent Chandler was a graduate of Yale University, University of Michigan’s Law
School and was a partner at Wilson & McIlvaine; and
WHEREAS, Kent Chandler served his country in the Pacific during World War II and
retired with a rank of Major; and
WHEREAS, Kent Chandler enjoyed golf, photography, bird watching and his family’s cabin
in Upper Michigan; and
WHEREAS, Kent Chandler, a beloved husband to the late Frances Robertson Chandler,
loving father of Gail and Robertson, grandfather of six, brother of Henry and Bruce; uncle to many
nieces and nephews; and
WHEREAS, Kent Chandler was a kind and gracious man who deeply loved his family,
community and fellow residents; his contributions to Lake Forest were significant and he will truly
be missed.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL, that its deepest
sympathy goes out to his family.
Dated: September 16, 2013
_____________________________
Mayor
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THE CITY OF LAKE FOREST
RESOLUTION NO. 2013-XX
A RESOLUTION APPROVING THE ESTABLISHMENT OF
A JOINT TASK FORCE TO EXPLORE SHARED SERVICES AND CAPITAL OPPORTUNITIES
RELATED TO PARKS AND RECREATION WITH
THE LAKE BLUFF PARK DISTRICT
WHEREAS, Article VII, Section 10 of the 1970 Constitution of the State of Illinois, and
Intergovernmental Cooperation Act, 5 ILCS 220/1 et seq., authorize and encourage the joint use and
enjoyment of the powers, privileges, functions and authority of local governments; and
WHEREAS, The City of Lake Forest, an Illinois special charter and home rule municipal
corporation (“The City”) and the Lake Bluff Park District, an Illinois district (“Park District”), (collectively
The City and Park District are the “Parties”), by and through their respective corporate authorities,
desire to collectively explore opportunities related to shared services, capital and land use that will lead
to greater efficiencies and enhancements for the benefit of residents of the Parties; and
WHEREAS, it is the intent of The City and Park District to provide recreation, parks, open space,
facilities and services for the health and welfare of their respective communities; and
WHEREAS, parks and recreation provide enriching and enjoyable experiences that are essential
to ensuring the quality of life for individuals, families and the community; and
WHEREAS, it is the goal of The City and Park District to achieve being the best-managed, fiscally
responsible and appealing community in the United States by promoting a living and working
environment built upon a community spirit of cooperation, trust, respect and broad-based citizen
involvement; and
WHEREAS, the Parties have previously entered into an Intergovernmental Program Agreement
to promote and focus specifically on program participation and access to services at unique facilities;
and
WHEREAS, the Parties seek to further collaborate on capital opportunities to maximize financial
benefits and reduce duplication of services where desirable; and
WHEREAS, the magnitude of capital assets associated within parks and recreation for the Parties
cannot be sustained under existing financing mechanisms and one-time projected revenues, when
coupled with other capital needs of the community, thereby necessitating a comprehensive review of
capital replacement, land use and financing strategies; and
WHEREAS, the Parties agree to seek a Joint Task Force to encourage dialogue related to
exploring capital, land use and opportunities for shared services that will permit the Parties to continue
to deliver quality recreation services in the face of challenging economic times (“Joint Task Force”);
NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LAKE FOREST, LAKE
COUNTY, ILLINOIS as follows:
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SECTION ONE: RECITALS. The foregoing recitals are incorporated into, and made part
of, this Resolution as findings of the City Council.
SECTION TWO: ESTABLISHMENT OF JOINT TASK FORCE. The City Council of The City of
Lake Forest shall, and does hereby, approve the establishment of the Joint Task Force, in accordance
with the following:
A. Purpose and Responsibilities.The purpose of the Joint Task Force is to advise the Parties on
the feasibility of consolidation or collaboration on shared services, capital and land use that
will lead to greater efficiencies and service level enhancements. In analyzing the merits of
such and the associated costs and benefits of various governance structures, the Joint Task
Force shall be charged with undertaking, in accordance with applicable law and consistent
with the terms of this Resolution, all studies and discussions necessary to properly examine
this subject, including, without limitation:
1. Utilization and examination of current and credible data related to capital assets,
properties, land use and recreation service areas for both Parties;
2. Solicitation of community and business input on the impacts of possible changes to
capital assets, properties and land use;
3. Development of recommendations during the Joint Task Force year to the corporate
authorities of the Parties, including strategies available to the Parties that will mitigate
the impacts of declining resources and aging assets, and reflect market conditions for
various services;
4. Identify alternative methods for educating residents and users of services about issues
and opportunities the recommendations identify;
5. Consideration, development and possible execution of a shared capital or land use plan
that is mutually acceptable to the Parties.
B. Composition. The Mayor of The City of Lake Forest and the Board of Commissioners of the
Lake Bluff Park District Board, shall each appoint, with the advice and consent of their
respective corporate authorities, four representatives to the Joint Task Force. It is desirable
for two of the four representatives, at a minimum, be a resident-at-large, rather than
existing elected or appointed officials. The members of the Joint Task Force shall select one
of its members to serve as Chairperson and the Joint Task Force may establish, combine or
abolish sub-committees as it may from time-to-time deem appropriate.
C. Authority. The Joint Task Force is an advisory body and shall conduct its business in
accordance with all City and Park District Codes and applicable state laws. Administrative
staff of the Parties shall assist the Joint Task Force in its mission and to advance the
purposes described in this Resolution.
D. Meetings; Expenditures. As soon as practical, the Joint Task Force shall hold an
organizational meeting to determine governance issues, funding of any related expenses,
and expected contributions by each Party of staff time and other resources. Following its
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organizational meeting, the Joint Task Force shall meet regularly in pursuit of the goals
stated in this Resolution, but no out-of-pocket expenses shall be incurred by or on behalf of
the Joint Task Force except to the extent approved by the Parties. The Joint Task Force shall
operate in accordance with the requirements of the Open Meetings Act.
E. Reports. On a regular basis, the Joint Task Force shall report to the respective corporate
authorities of the Parties regarding its activities. Upon the conclusion of its review and
studies, the Joint Task Force shall issue a final recommendation to the corporate authorities
of each of the Parties.
SECTION THREE: EFFECTIVE DATE AND TERM. This Resolution shall be in full force and effect
upon its passage and approval in the manner provided by law and the adoption of similar
resolutions by the Lake Bluff Park District. In the event that a similar resolution has not been
adopted by the corporate authorities of the Lake Bluff Park District within sixty days after the
adoption hereof, this Resolution shall automatically be null and void and of no further force and
effect whatsoever. Upon passage and approval by the Parties, the Joint Task Force shall be in
effect for a maximum of one year or until the Joint Task Force issues its final recommendation
and it is accepted by the corporate authorities of the Parties, or until otherwise directed by the
corporate authorities to be dissolved, whichever occurs earlier.
PASSED this ______ day of _____________, 2013.
AYES:
NAYS:
ABSENT:
APPROVED this ____day of _________, 2013.
________________________________
Mayor
ATTEST:
___________________
Deputy City Clerk
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City of Lake Forest Strategic Planning Tracking Report September 1, 2013
Red - in FY14
Green - ongoing
Blue - FY15 +1
Strategic Priorities Status Responsible Parties Timeline Commentary
FISCAL STEWARDSHIP
i. Annually review user fees and charges as part of the budget process
Finance Committee and
City Council ongoing
i. Annually identify three operational programs to evaluate for service delivery modification
Finance Committee and
City Council ongoing
Fire
Dispatch
Sanitation
Fleet
ii. Annually identify at least one new service or commodity to jointly bid with another
municipality or other local public agency
Finance Committee and
City Council ongoing
Tree Planting
Elevator Inspections
i. Evaluate annually with adoption of the City's tax levy in December
Finance Committee and
City Council ongoing
i. Regularly meet with State legislators and participate on NWMC and IML legislative
committees City Staff ongoing
ii. Encourage Congress to adopt on-line sales tax legislation in 2013 City staff Summer, 2013 Underway
ii. Continue active participation in Municipal Purchasing Initiative City staff ongoing
i. Identify functional areas that can attract and utilize community volunteers and prepare
report for City Council City staff October, 2014
i. Annually review and adapt core and elective functions and performance measurements to
ensure maximum alignment City Council/staff ongoing
i. Maintain commercial business vacancies at or below 5%
Economic Development
Coordinator ongoing Currently 4%
ii. Create one new marketing opportunity per year to promote shopping locally Chamber, EDC Oct., 2013 BMW Tournament (9/13)
iii. Continue to support the business incubator program EDC ongoing
i. Create a list of types of businesses and attendant incentives acceptable to the communities
character and identified needs for submission to the Finance Committee EDC Aug., 2014
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The City of Lake Forest
CITY COUNCIL
Proceedings of the September 3, 2013 Regular Meeting
7:30 p.m. – City Hall Council Chambers
CALL TO ORDER AND ROLL CALL: Mayor Schoenheider called the meeting to order at 7:40 pm.
Deputy City Clerk Margaret Boyer called the roll of Council members.
Present: Honorable Mayor Schoenheider, Alderman Novit, Alderman Waldeck, Alderman Moore,
Alderman Pandaleon, Alderman Reisenberg, Alderman Palmer, Alderman Adelman.
Absent: Alderman Pandaleon
There were approximately 45 present in the audience.
PLEDGE OF ALLEGIANCE: The Pledge of Allegiance was recited by all in attendance.
REPORTS OF CITY OFFICERS
Comments by Mayor
A. Resolution of appreciation for Robert Goeppner
Mayor Schoenheider read the resolution.
Recommended Action: Approve the Resolution Alderman Palmer made a motion to approve the
Resolution, seconded by Alderman Reisenberg. Motion carried unanimously by voice vote.
B. Resolution of appreciation for Michael T. Evert
Mayor Schoenheider read the resolution.
Recommended Action: Approve the Resolution Alderman Novit made a motion to approve the
Resolution, seconded by Alderman Tack. Motion carried unanimously by voice vote.
Mayor Schoenheider recognized and thanked Larry Crone, who made personal deliveries to
Alderman and Volunteers serving on Boards and Commissions for the last thirteen years.
The Mayor reminded everyone that the City of Lake Forest is host to the BMW Championship
September 9, 2013 through September 15, 2013.
The Mayor stated that Alderman Novit and Alderman Palmer have served the maximum allowed
and will be terming off of the City Council. Anyone interested in serving on any Board or
Commission should contact the Caucus.
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Proceedings of the September 3, 2013
Regular City Council Meeting
Comments by City Manager
A. Janice Hack, Historical Society - Community Spotlight
City Manager Robert Kiely introduced Janice Hack from the Historical Society who gave a summary
of its Annual Report. She supplied a hand out of a display at the Lake Forest train station on the
History of Golf. She encouraged residents to attend a program at Lake Forest High School on
Thursday November 2. There are a great number of events planned residents are encouraged to
call 234-5253 or visit the website at www.lflbhistory.org .
Comments by Council Members
A. PPL Committee- Jack Reisenberg Chairman
1. Approval of a License Agreement with Lake Forest Bank and Trust for the
Drive- Up ATM Facility and premises located at 70 N. Bank Lane.
Property and Public Land Committee Chairman Reisenberg explained to the City Council members
that according to Section 5.1 in the City’s policy for the inventory, sale, lease and retention of
public property, the City Council must approve any leases longer than 5 years exceeding $10,000.
On August 19,2013 the Property and Public Land Committee met and is unanimously
recommending that the City Council approve a long term license agreement with Lake Forest Bank
and Trust located at 70 N. Bank Lane (also known as Quarta Lot). The lease will expire on
December 31, 2013.
In 2012 the Bank and the City began negotiating the terms and conditions for the license
agreement. The PPL Committee is seeking approval of a 10 year license agreement with Lake
Forest Bank & Trust in the amount of $64,129.47 (for the first year). The license fee shall be
increased annually on the anniversary of the Commencement Date for any increase in the
Consumer Price Index.
City Attorney, Victor Filippini clarified Lease/License, and that the information should have read
“Lease”(the lessee pays the taxes).
The City Council had a discussion relating to the terms of the lease and the effects of it to the City.
RECOMMENDED ACTION: If appropriate and should the City Council desire, approve a Lease
Agreement with Lake Forest Bank and Trust for the Drive- Up ATM Facility located at 70 N. Bank
Lane.
15
Proceedings of the September 3, 2013
Regular City Council Meeting
Alderman Novit made a motion to approve the Lease Agreement with Lake Forest Bank and Trust
for the Drive- up ATM Facility located at 70 N. Bank Lane, seconded by Alderman Palmer. The
following voted “Yea”: Aldermen Novit, Waldeck, Moore, Tack, Reisenberg, Palmer and Adelman.
The following voted “Nay”: None. 7 Yeas, 0 Nays, motion carried.
B. Authorize the City Manager to enter into a listing agreement with Koenig &
Strey to sell Wedgewood Lots #22, #23, #24.
Property and Public Land Committee Chairman Reisenberg explained that on August 19, 2013 the
Property and Public Land Committee met and is unanimously recommending that the City Council
approve a Professional Services contract with the real estate firm Koenig & Strey to assist the City
in selling Wedgewood Lots #22, #23, #24. At the May 20, 2013 meeting, the City Council approved
a Resolution declaring the Wedgewood Lots surplus and directing staff to begin marketing the sale
of the three lots. In June, staff sent correspondence to developers and realtors advising that these
lots were for sale by owner. Since June, staff has received a few inquiries; however, no proposals.
The approved Resolution also directed staff to solicit a Request for Qualifications (RFQ) from all
local real estate agents who would assist the City to market and sell these three City-owned
undeveloped lots. The City received RFQ’s from Koenig & Strey, Coldwell Banker, Griffith Grant
and Lackie, and Baird & Warner. Of the four proposals received, Koenig & Strey prepared the
most professional packet including scope of work, acknowledging the 5% commission rate, and
marketing recommendations. The staff is negotiating a few items; and respectfully requests the
City Council to authorize the City Manager to enter into a listing agreement.
Chairman Reisenberg gave a brief timeline of events relating to the property.
RECOMMENDED ACTION: Authorize the City Manager to enter into a listing agreement with
Koenig & Strey to sell Wedgewood Lots #22, #23, #24.
Alderman Palmer made a motion to authorize the City Manager to enter into a listing agreement
with Koenig & Strey to sell Wedgewood Lots #22, #23, #24, seconded by Alderman Moore. The
following voted “Yea”: Aldermen Novit, Waldeck, Moore, Tack, Reisenberg, Palmer and Adelman.
The following voted “Nay”: None. 7 Yeas, 0 Nays, motion carried.
OPPORTUNITY FOR CITIZENS TO ADDRESS THE CITY COUNCIL ON NON-AGENDA ITEMS
Seeing none, Mayor Schoenheider read the Omnibus items for consideration.
ITEMS FOR OMNIBUS VOTE CONSIDERATION
1. Approval of the August 5, 2013 City Council minutes.
2. Approval of Check register from July 27-August 23, 2013
3. Award of Bid for the Public Safety Fan Coil Replacement Project
16
Proceedings of the September 3, 2013
Regular City Council Meeting
4. Payment Authorization for Painting the Route 60 METRA Railroad Bridge
5. Consideration of Ordinances Approving Recommendations from the Building
Review Board. (First Reading and if Desired by the City Council, Final Approval)
RECOMMENDED ACTION: Approve the five (5) Omnibus items as presented.
Alderman Reisenberg made a motion to approve by Omnibus vote designation items as
presented, seconded by Alderman Novit. The following voted “Yea”: Aldermen Novit, Waldeck,
Moore, Tack, Reisenberg, Palmer and Adelman. The following voted “Nay”: None. 7 Yeas, 0 Nays,
motion carried.
Information such as Purpose and Action Requested, Background/Discussion, Budget/Fiscal Impact,
Recommended Action and a Staff Contact as it relates to the Omnibus items can be found on the agenda.
ORDINANCES
1. Consideration of an Ordinance Authorizing the Issuance of General Obligation
Refunding Bonds, Series 2013 (First Reading)
Finance Director Elizabeth Holleb stated that in 2010, the City issued General Obligation Bonds,
Series 2010A in the amount of $9,665,000. The proceeds from this issue were used to provide
partial financing for the construction of the Municipal Services facility. The entire principal
amount is due in December 2015, at which time it was anticipated that the Laurel Avenue
property which had served as the prior site of Municipal Services, would be redeveloped and the
proceeds of that redevelopment would be used to retire the bonds. National economic conditions
have delayed the redevelopment of the Laurel Avenue property although discussions continue on
the best use of the site.
She went on to say the Finance Committee has previously deliberated on the refinancing of the
2010A issue that is callable on or after December 15, 2013. Interest rates remain competitive and
are anticipated to increase. No other bond issues are planned in 2013, allowing the refunding to
occur as a bank-qualified issue, yielding additional interest savings and the refunding would
provide additional flexibility for the redevelopment of the Laurel Avenue property
She went on to explain the interest rate on the bond issue will be determined at the online bid
auction scheduled for September 16. Debt service on the bond issue is scheduled through
December 2032 and will be paid from the City’s property tax levy for debt. The bonds will be
callable in whole or in part on or after December 15, 2021. Proceeds from the redevelopment of
the Laurel Avenue property could be used to advance refund these bonds and provide additional
debt capacity for future needs. An online bid will occur on Monday, September 16. At the
September 16 City Council meeting, a final bond ordinance will be presented for Council
17
Proceedings of the September 3, 2013
Regular City Council Meeting
consideration for second reading and granting final approval. She stated it is anticipated that the
current rates are still within range.
RECOMMENDED ACTION: Approval of first reading of the bond ordinance. An online bid will
occur on Monday, September 16. At the September 16 City Council meeting, a final bond
ordinance will be presented for Council consideration for second reading and granting final
approval.
Alderman Palmer made a motion for Approval of first reading of the bond ordinance, seconded by
Alderman Moore. The following voted “Yea”: Aldermen Novit, Waldeck, Moore, Tack, Reisenberg,
Palmer and Adelman. The following voted “Nay”: None. 7 Yeas, 0 Nays, motion carried.
2. Consideration of a Recommendation from the Plan Commission in Support of
Phase 2 of the Master Plan for Woodlands Academy of the Sacred Heart located
at 760 E. Westleigh Road. (If desired by the Council, waive first reading and
grant final approval.)
Director of Community Development Catherine Czerniak explained that the second phase of the
Master Plan focuses on improvements planned on the former site of Barat Campus immediately
after the demolition of Old Main is completed.
In February, 2012, the City Council approved a Special Use Permit authorizing the incorporation of
the former Barat Campus into the Woodlands Academy campus. The Special Use Permit required
that a Master Plan be developed, in multiple phases if desired by Woodlands Academy, and
presented to the City for review and approval to allow the former Barat Campus to be
incorporated fully into the Woodlands Campus.
Last October, the City Council approved Phase 1 of the Master Plan which authorized the
construction of a new monopole which is now in place. New wireless antennas on the pole should
be operational within the next 30 to 60 days replacing the service provided by antennas on Old
Main and clearing the way for demolition of the building as previously approved by the City
Council. Salvaging and removal of interior materials has been underway for some time and will
allow the demolition of the building shell to proceed more quickly and cleanly than it would have
without this preliminary work.
Phase 2 of Woodlands’ Master Plan will serve the immediate needs of Woodlands Academy and
the needs for the foreseeable future. Some of the key components of the Phase 2 are : Safety
improvements to ingress and egress to the campus, Preservation of the front lawn as open space,
Reuse of the former Cooney Library, Development of two new athletic fields for student activities,
and the Addition of parking and internal circulation roads and paths. A memorial honoring Old
Main is planned on the site.
18
Proceedings of the September 3, 2013
Regular City Council Meeting
Recommendation: Waive first reading and grant final approval of an Ordinance approving
Phase 2 of the Master Plan for Woodlands Academy of the Sacred Heart.
Alderman Reisenberg made a motion to waive first reading, seconded by Alderman Novit. The
following voted “Yea”: Aldermen Novit, Waldeck, Moore, Tack, Reisenberg, Palmer and Adelman.
The following voted “Nay”: None. 7 Yeas, 0 Nays, motion carried.
Alderman Palmer then made a motion to grant final approval of an Ordinance approving Phase 2
of the Master Plan for Woodlands Academy of the Sacred Heart, seconded by Alderman Tack. The
following voted “Yea”: Aldermen Novit, Waldeck, Moore, Tack, Reisenberg, Palmer and Adelman.
The following voted “Nay”: None. 7 Yeas, 0 Nays, motion carried.
3. Consideration of an Ordinance Amending The City of Lake Forest Liquor Code,
Section 4-10, Number of Licenses. (Waive first reading and if desired by the City
Council, grant final approval.)
Alderman Reisenberg addressed the Council and stated that he will be recusing himself from the
discussion and the vote on this matter due to a conflict of interest, and City code does not allow
his participation.
City Attorney Victor Filippini explained that The City has received applications for two new liquor
licenses. One is Ragdale requesting a Class F-5 and the second is the Shell requesting a Class A-2
License which has conditions.
The Council is aware that the issuance of liquor licenses is under the purview of the City’s Liquor
Commissioner and the Mayor serves in that role.
After review by the Liquor Commissioner and discussion with the City Council, a determination
that the issuance of a license would be appropriate, the City Council was asked to consider an
amendment to the Liquor Code.
RECOMMENDED ACTION : Waive first reading of an ordinance amending Section 4-10 of the City
Code increasing the number of liquor licenses by two and if desired by the City Council, grant
final approval.
Alderman Palmer made a motion to waive first reading, seconded by Alderman Moore. The
following voted “Yea”: Aldermen Novit, Moore, Tack, Palmer and Adelman. The following voted
“Nay”: Alderman Waldeck. 5 Yeas, 1 Nays, 1 abstention by Alderman Reisenberg. Motion carried.
Alderman Moore made a motion to grant final approval of an ordinance amending Section 4-10 of
the City Code increasing the number of liquor licenses by two, seconded by Alderman Palmer. The
following voted “Yea”: Aldermen Novit, Moore, Tack, Palmer and Adelman. The following voted
“Nay”: Alderman Waldeck. 5 Yeas, 1 Nays, 1 abstention by Alderman Reisenberg. Motion carried.
19
Proceedings of the September 3, 2013
Regular City Council Meeting
COMMENTS BY COUNCIL MEMBERS
Alderman Novit made a motion to reconsider discussion on the Lake Forest Bank and Trust Lease ,
seconded by Alderman Adelman. The following voted “Yea”: Aldermen Novit, Waldeck, Moore,
and Adelman. The following voted “Nay”: Alderman Tack, Reisenberg and Palmer. 4 Yeas, 3 Nays,
motion carried.
The City Council held a discussion around the term of the lease agreement. It was decided to add
the wording of mutual opportunity to terminate the lease at each ten year renewal with a 180 day
notice and keep the three, five year renewal options.
Alderman Adelman then made a motion to accept the agreement subject to the terms discussed,
seconded by Alderman Moore. The following voted “Yea”: Aldermen Novit, Waldeck, Moore, Tack,
Reisenberg, Palmer and Adelman. The following voted “Nay”: None. 7 Yeas, 0 Nays, motion
carried.
NEW BUSINESS
Seeing none
ADDITIONAL ITEMS FOR COUNCIL DISCUSSION
Seeing none
ADJOURNMENT
There being no further business. Alderman Palmer made a motion to adjourn, seconded by
Alderman Novit Motion carried unanimously by voice vote at 8:45pm
Respectfully Submitted,
Margaret Boyer
Deputy City Clerk
A video of the City Council meeting is available for viewing at the Lake Forest Library and on file in
the Clerk’s office at City Hall. You can also view it on the website by
visiting www.cityoflakeforest.com. Click on I Want To, then click on View, then choose Archived
Meetings Videos.
20
Office Supplies
Product Information
The Suburban Purchasing Cooperative (SPC) Governing Board has approved extending the SPC Office Supplies
Program to Warehouse Direct Workplace Solutions through Independent Stationers. This contract utilizes the U.S.
Communities National Contract MICPA and ISG County of Los Angeles Master Agreement. According to the State of
Illinois Statutes Chapter 5 General Provisions Act 220 Intergovernmental Cooperation Act 5 ILCS 220/2 Sec. 2
provided the option for two additional one year terms is exercised when the original contract expires.
The SPC Office Supplies Agreement may be utilized to purchase everything from paper, pens and paperclips, to
furniture and design, promotional items, printing, document management products and services and high end
technology products. They’ve even designed a dedicated on-line store for your customized apparel and work
clothing needs, please visit http://co-store.com/spc. In addition, Warehouse Direct recently won the bid SPC
Janitorial Supplies Contract #135, so you may place your consolidated Office Supply and Janitorial orders together,
thereby streamlining your Accounts Payable process.
Ordering Information
To set up your account please contact your local sales support team:
Please contact either of the Warehouse Direct main contacts, Spencer Touchie or Rick Schackle, or their
respective Customer Service contacts, Kathy Johnson 847-631-7194 and Margaret Dawson 847-631-7177.
Warehouse Direct Workplace Solutions
2001 S. Mount Prospect Rd.
Des Plaines, IL 60018
Spencer Touchie, Account Executive, 847-631-7188
stouchie@warehousedirect.com
Rick Schakle, Account Executive, 847-631-7428
rickschakle@warehousedirect.com
Orders placed today will be delivered next day. Office supplies and janitorial supplies use the same delivery
trucks. Orders may be consolidated or placed separately by phone, fax, or online the same as office products.
There is no minimum order requirement and standard delivery is free. The duration of the contract runs through
August 30, 2014.
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New Issue Investment Rating:
Date of Sale: Monday, September 16, 2013 Moody’s Investors Service …
10:45 – 11:00 A.M., C.D.T. (Open Speer Auction) (Rating Requested)
Official Statement
The delivery of the Bonds is subject to the opinion of Katten Muchin Rosenman LLP, Bond Counsel, to the effect that under existing law, interest on the Bonds is not includable
in the gross income of the owners hereof for federal income tax purposes and that, assuming continuing compliance with the applicable requirements of the Internal Revenue Code of 1986,
interest on the Bonds will continue to be excluded from the gross income of the owners thereof for federal income tax purposes. Interest on the Bonds is not an item of tax preference for
purposes of computing individual or corporate alternative minimum taxable income, but must be taken into account as earnings and profits of a corporation when computing corporate
minimum taxable income for purposes of the corporate alternative minimum tax. See “TAX EXEMPTION” herein. The Bonds are designated “qualified tax-exempt obligations” under
Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. See “QUALIFIED TAX-EXEMPT OBLIGATIONS” herein. Interest on the Bonds is not exempt from present
Illinois income taxes.
$9,840,000*
CITY OF LAKE FOREST
Lake County, Illinois
General Obligation Refunding Bonds, Series 2013
Dated Date of Delivery Book-Entry Bank Qualified Due Serially December 15, 2014, 2015 and 2017-2032
The $9,840,000* General Obligation Refunding Bonds, Series 2013 (the “Bonds”) are being issued by the City of Lake Forest, Lake County, Illinois (the
“City”). Interest on the Bonds is payable semiannually on June 15 and December 15 of each year, commencing June 15, 2014. The Bonds will be issued using a
book-entry system. The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Bonds. The ownership of one fully
registered Bond for each maturity will be registered in the name of Cede & Co., as nominee for DTC and no physical delivery of Bonds will be made to purchasers.
The Bonds will mature on December 15, in the following years and amounts. Interest is calculated based on a 360-day year of twelve 30-day months.
AMOUNTS*, MATURITIES, INTEREST RATES, PRICES OR YIELDS AND CUSIP NUMBERS
Principal Due Interest Yield or CUSIP Principal Due Interest Yield or CUSIP
Amount* Dec. 15 Rate Price Number Amount* Dec. 15 Rate Price Number
$ 65,000 ..... 2014 _____% _____% __________ $ 460,000 .... 2024 _____% _____% __________
100,000 ..... 2015 _____% _____% __________ 475,000 .... 2025 _____% _____% __________
******* ..... **** 480,000 .... 2026 _____% _____% __________
100,000 ..... 2017 _____% _____% __________ 495,000 .... 2027 _____% _____% __________
200,000 ..... 2018 _____% _____% __________ 930,000 .... 2028 _____% _____% __________
350,000 ..... 2019 _____% _____% __________ 960,000 .... 2029 _____% _____% __________
430,000 ..... 2020 _____% _____% __________ 1,085,000 .... 2030 _____% _____% __________
435,000 ..... 2021 _____% _____% __________ 1,120,000 .... 2031 _____% _____% __________
440,000 ..... 2022 _____% _____% __________ 1,265,000 .... 2032 _____% _____% __________
450,000 ..... 2023 _____% _____% __________
Any consecutive maturities may be aggregated into term bonds at the option of the bidder,
in which case the mandatory redemption provisions shall be on the same schedule as above.
OPTIONAL REDEMPTION
The Bonds maturing on or after December 15, 2022, are optionally callable in whole or in part on any date on or after December 15, 2021, at a price of
par and accrued interest. If less than all the Bonds are called, they shall be redeemed in such principal amounts and from such maturities as determined by the City
and within any maturity by lot. See “OPTIONAL REDEMPTION” herein.
PURPOSE, LEGALITY AND SECURITY
The proceeds of the Bonds will be used: (i) to currently refund the City’s outstanding General Obligation Bonds, Series 2010A, and (ii) to pay the costs
of issuance of the Bonds. See “PLAN OF FINANCING” herein.
In the opinion of Katten Muchin Rosenman LLP, Chicago, Illinois, Bond Counsel, the Bonds are valid and legally binding general obligations of the City
and the City is obligated to levy ad valorem taxes upon all the taxable property within the City for the payment of the Bonds and the interest thereon without
limitation as to rate or amount. However, the enforceability of rights or remedies with respect to the Bonds may be limited by bankruptcy, insolvency or other laws
affecting creditors’ rights and remedies heretofore or hereafter enacted.
The Bonds have been designated “qualified tax-exempt obligations” under Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. See
“QUALIFIED TAX-EXEMPT OBLIGATIONS” herein.
This Official Statement is dated September 4, 2013, and has been prepared under the authority of the City. An electronic copy of this Official Statement
is available from the www.speerfinancial.com web site under “Debt Auction Center/Official Statements Sales Calendar/Competitive”. Additional copies may be
obtained from Ms. Elizabeth Holleb, Director of Finance, City of Lake Forest, 800 North Field Drive, Lake Forest, Illinois 60045, or from the Independent Public
Finance Consultants to the City:
Established 1954
Speer Financial, Inc.
INDEPENDENT PUBLIC FINANCE CONSULTANTS
ONE NORTH LASALLE STREET, SUITE 4100 • CHICAGO, ILLINOIS 60602
Telephone: (312) 346-3700; Facsimile: (312) 346-8833
*Subject to change. www.speerfinancial.com
65
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
For purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, this document, as
the same may be supplemented or corrected by the City from time to time (collectively, the “Official Statement”), may
be treated as an Official Statement with respect to the Bonds described herein that is deemed near final as of the date
hereof (or the date of any such supplement or correction) by the City.
The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates,
principal amounts and interest rates of the Bonds, together with any other information required by law or deemed
appropriate by the City, shall constitute a “Final Official Statement” of the City with respect to the Bonds, as that term
is defined in Rule 15c2-12. Any such addendum shall, on and after the date thereof, be fully incorporated herein and
made a part hereof by reference.
No dealer, broker, salesman or other person has been authorized by the City to give any information or to make
any representations with respect to the Bonds other than as contained in the Official Statement or the Final Official
Statement and, if given or made, such other information or representations must not be relied upon as having been
authorized by the City. Certain information contained in the Official Statement and the Final Official Statement may
have been obtained from sources other than records of the City and, while believed to be reliable, is not guaranteed as
to completeness. THE INFORMATION AND EXPRESSIONS OF OPINION IN THE OFFICIAL STATEMENT
AND THE FINAL OFFICIAL STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF
THE OFFICIAL STATEMENT OR THE FINAL OFFICIAL STATEMENT NOR ANY SALE MADE UNDER
EITHER SUCH DOCUMENT SHALL CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE
IN THE AFFAIRS OF THE CITY SINCE THE RESPECTIVE DATES THEREOF.
References herein to laws, rules, regulations, ordinances, resolutions, agreements, reports and other documents
do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by
reference to the particular document, the full text of which may contain qualifications of and exceptions to statements
made herein. Where full texts have not been included as appendices to the Official Statement or the Final Official
Statement they will be furnished on request. This Official Statement does not constitute an offer to sell, or solicitation
of an offer to buy, any securities to any person in any jurisdiction where such offer or solicitation of such offer would
be unlawful.
2 66
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
TABLE OF CONTENTS
BOND ISSUE SUMMARY ............................................................................................................................ 4
THE CITY ................................................................................................................................................ 5
Route 60 Corridor Development ................................................................................................................... 6
Central Business District ............................................................................................................................ 7
Looking Forward - Development Opportunities ................................................................................................. 8
Municipal and Other Governmental Services .................................................................................................... 8
Schools/Hospitals ..................................................................................................................................... 9
SOCIOECONOMIC INFORMATION .............................................................................................................. 11
Employment .......................................................................................................................................... 11
Building Permits ..................................................................................................................................... 13
Income ................................................................................................................................................. 13
Retail Activity ........................................................................................................................................ 15
PLAN OF FINANCING ............................................................................................................................... 15
DEBT INFORMATION ............................................................................................................................... 16
PROPERTY ASSESSMENT AND TAX INFORMATION ..................................................................................... 17
Real Property Assessment, Tax Levy and Collection .......................................................................................... 19
Property Tax Extension Limitation Law ......................................................................................................... 21
Truth in Taxation Law .............................................................................................................................. 21
FINANCIAL INFORMATION ....................................................................................................................... 21
Budgetary Information .............................................................................................................................. 21
Investment Policy .................................................................................................................................... 22
Financial Reports .................................................................................................................................... 23
No Consent or Updated Information Requested of the Auditor .............................................................................. 23
Summary Financial Information ................................................................................................................... 23
EMPLOYEE RETIREMENT AND OTHER POSTEMPLOYMENT BENEFITS OBLIGATIONS ..................................... 26
REGISTRATION, TRANSFER AND EXCHANGE ............................................................................................. 27
Registration ........................................................................................................................................... 27
Transfers and Exchanges ........................................................................................................................... 27
TAX EXEMPTION .................................................................................................................................... 27
Summary of Bond Counsel Opinion .............................................................................................................. 27
Bonds Purchased at a Premium or a Discount .................................................................................................. 28
Exclusion From Gross Income Requirements ................................................................................................... 28
Risks of Non-Compliance .......................................................................................................................... 29
Federal Income Tax Consequences ............................................................................................................... 29
QUALIFIED TAX-EXEMPT OBLIGATIONS .................................................................................................... 29
CONTINUING DISCLOSURE ....................................................................................................................... 29
OPTIONAL REDEMPTION ......................................................................................................................... 31
NOTICE OF REDEMPTION ......................................................................................................................... 31
LITIGATION ............................................................................................................................................ 31
LEGAL MATTERS .................................................................................................................................... 31
OFFICIAL STATEMENT AUTHORIZATION ................................................................................................... 31
INVESTMENT RATING ............................................................................................................................. 32
DEFEASANCE AND PAYMENT OF BONDS ................................................................................................... 32
UNDERWRITING ..................................................................................................................................... 32
FINANCIAL ADVISOR .............................................................................................................................. 33
CERTIFICATION ...................................................................................................................................... 33
APPENDIX A - EXCERPTS OF FISCAL YEAR 2012 AUDITED FINANCIAL STATEMENTS
APPENDIX B - DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
APPENDIX C - PROPOSED FORM OF OPINION OF BOND COUNSEL
APPENDIX D - EXCERPTS OF FISCAL YEAR 2012 AUDITED FINANCIAL STATEMENTS
RELATING TO THE CITY’S PENSION PLANS AND OTHER POSTEMPLOYMENT BENEFITS
OFFICIAL BID FORM
OFFICIAL NOTICE OF SALE
3 67
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
BOND ISSUE SUMMARY
This Bond Issue Summary is expressly qualified by the entire Official Statement, which is provided for the convenience of
potential investors and which should be reviewed in their entirety by potential investors.
Issuer: City of Lake Forest, Lake County, Illinois.
Issue: $9,840,000* General Obligation Refunding Bonds, Series 2013.
Dated Date: Date of delivery (expected to be on or about October 3, 2013).
Interest Due: Each June 15 and December 15, commencing June 15, 2014.
Principal Due: Serially each December 15, commencing December 15, 2014, 2015 and 2017 through 2032,
as detailed on the front page of this Official Statement.
Optional Redemption: The Bonds maturing on or after December 15, 2022, are optionally callable in whole or in
part on any date on or after December 15, 2021, at a price of par and accrued interest. See
“OPTIONAL REDEMPTION” herein.
Authorization: The City is a home rule unit under the 1970 Illinois Constitution, has no debt limitation, and
is not required to seek referendum approval to issue the Bonds.
Security: The Bonds are valid and legally binding general obligations of the City and the City is
obligated to levy ad valorem taxes upon all the taxable property within the City for the
payment of the Bonds and the interest thereon without limitation as to rate or amount.
However, the enforceability of rights or remedies with respect to the Bonds may be limited
by bankruptcy, insolvency or other laws affecting creditors’ rights and remedies heretofore
or hereafter enacted.
Credit Rating: The City’s outstanding general obligation bond rating is “Aaa” from Moody’s Investors
Service, New York, New York (“Moody’s”). A credit rating for the Bonds has been
requested from Moody’s. See “INVESTMENT RATING” herein.
Purpose: The proceeds of the Bonds will be used: (i) to currently refund the City’s outstanding
General Obligation Bonds, Series 2010A, and (ii) to pay the costs of issuance of the Bonds.
See “PLAN OF FINANCING” herein.
Tax Exemption: Katten Muchin Rosenman LLP, Chicago, Illinois, will provide an opinion as to the tax
exemption of the Bonds as discussed under “TAX EXEMPTION” in this Official
Statement. Interest on the Bonds is not exempt from present State of Illinois income taxes.
Bank Qualified: The Bonds have been designated “qualified tax-exempt obligations” under Section 265(b)(3)
of the Internal Revenue Code of 1986, as amended. See “QUALIFIED TAX-EXEMPT
OBLIGATIONS” herein.
Bond Registrar/Paying Agent/
Escrow Agent: Wells Fargo Bank, N.A., Chicago, Illinois.
Book-Entry Form: The Bonds will be registered in the name of Cede & Co. as nominee for The Depository
Trust Company (“DTC”), New York, New York. DTC will act as securities depository of
the Bonds. See APPENDIX B herein.
Denomination: $5,000 or integral multiples thereof.
Delivery: The Bonds are expected to be delivered on or about October 3, 2013.
Financial Advisor: Speer Financial, Inc., Chicago, Illinois.
*Subject to change.
4 68
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
CITY OF LAKE FOREST
Lake County, Illinois
Donald P. Schoenheider
Mayor
Council Members
Michael R. Adelman Robert T. Palmer Jack Reisenberg
David Moore George A. Pandaleon Stanford Tack
Kent Elliott Novit Catherine A. Waldeck
_______________________________
Officials
Robert R. Kiely, Jr.
City Manager
Elizabeth Holleb
Director of Finance
Margaret Boyer
Deputy City Clerk
Victor P. Filippini, Jr., Esq.
City Attorney
THE CITY
The City of Lake Forest (the “City”) is a home-rule municipality located in Lake County approximately 30
miles north of downtown Chicago. It is one of the eight Chicago suburban communities north of Chicago fronting on
Lake Michigan collectively referred to as "the North Shore.” The City's eastern boundary is Lake Michigan from
which the City obtains its public water supply. To the south of the City along Lake Michigan is the former Fort
Sheridan Military Base the northern portion of which is located within the boundaries of the City of Lake Forest. A
portion of the site remains in the ownership of the Federal government and continues to be used as a military reserve
base. The remainder of the site, 127 acres, is now in the ownership of the Lake County Forest Preserve District and is
preserved open space. The Forest Preserve has completed significant restoration work at this site including the removal
of non-native trees and vegetation, re-grading to establish swales, stabilization and enhancement of the existing ravine,
pond and bluff. Improved public access to Lake Michigan and completion of an interpretive trail were also part of this
project. Today, the former military base is an expansive natural area, miles of walking trails and beach frontage, all
open to the public. The restored area provides impressive views of Lake Michigan from Sheridan Road found at no
other location on the North Shore. The Forest Preserve, along with neighboring communities, is continuing discussions
about possible grant funding to continue restoration of ravines and bluffs all along this North Shore corridor.
Like many communities in the Chicagoland area, the 2010 Census reflected a slight decrease in the City’s
population. The 2010 Census indicated a population of 19,375 in the City of Lake Forest. This number is down 3.4%
from the City’s peak population of 20,059 as documented by the 2000 Census. In part, the population loss results from
the closing of Barat Campus in early 2,000. Students living on campus were included in the 2000 Census. The 2010
Census indicated an increase of 443 housing units in the City and a slightly more diverse population living in the
community than at the time of the 2000 Census.
The western boundary of the City is the center of the Illinois Toll Road (I-94), and three interchanges serve the
City. With two commuter railroads, the divided four-lane U.S. Route 41 (Skokie Highway) which connects to the
Edens Expressway on the south and Wisconsin I-94 on the north, scenic Green Bay Road and Sheridan Road, four-lane
Waukegan Road (Illinois Route 43) and the aforementioned Illinois Toll Road, the transportation arteries serving Lake
Forest are abundant.
5 69
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
Long acknowledged to be one of the most prestigious residential communities in the United States, the City is
rich in history. Among the existing structures in the City are residences dating back to 1846, Market Square
(downtown Lake Forest which, when constructed in 1916, was reported to be the first shopping center in the U.S.),
many churches and educational institutions and the estates of many of the nation's most famous private entrepreneurs.
Route 60 Corridor Development
On October 3, 1988, the City voted to annex a 682 acre area at the western edge of the City thereby taking
control of the ultimate development of the large undeveloped area extending to the Illinois Toll Road. As a part of the
pre-annexation agreement, the City and the owners agreed to the development of the 682 acres plus an additional 90
acres already in the City. This area is developed with Conway Park premier corporate office park, Conway Farms
residential development set on a picturesque golf course and offering attached and detached residential products,
Stonebridge empty nester residential development and Townline Park which is a City owned community park developed
with baseball diamonds, soccer fields, a pavilion, playground and extensive walking trail. The build out of both the
Conway Farms and Stonebridge residential developments is complete.
Conway Park office park is nearly built out and includes thirteen office buildings ranging in size from 60,000 to
270,000 square feet. The buildings serve as the corporate headquarters for various companies including Abbott,
Hospira, Brunswick, Pactiv, Tenneco Automotive, Trustmark and Packaging Corporation of America. Three buildings
within the office park are multi-tenant buildings providing high quality office opportunities for small and medium size
businesses. In 2004, an important dimension was added to Conway Park with the construction of the 32,000 square
foot Lake Forest Graduate School. The Graduate School was formerly located on the campus of Lake Forest College.
The Graduate School building serves as the school’s headquarters and houses both administrative functions and
classrooms with branches at other locations throughout the Chicagoland area. The Graduate School has formed a
strong relationship with various corporations within the park as well as some located elsewhere and offers corporate and
leadership training programs in support of those corporations as well as its well respected MBA program. Four parcels
in the office park remain available for development and discussions are underway regarding development of these
parcels in the coming year. There are plans to add a hotel to Conway Park to support the businesses.
Two additional corporate office buildings, each about 170,000 square feet, are located to the south of Conway
Park, on the south side of Route 60, just east of the Illinois Tollway. Solo Cup and Dart are headquartered in these
buildings and Abbott occupies portions of the space completing the City’s corporate office district.
The National Football League franchise Chicago Bears corporate headquarters, player training center, broadcast
studio, conference center and indoor and outdoor practice fields are located at the north end of Conway Park. The
Chicago Bears have had a long association with Lake Forest with a practice field located at Lake Forest College before
the team’s move to Conway Park in 2004. To complete Conway Park, and to address uncertainties about the long term
use of the remaining property adjacent to Conway Park and the Chicago Bears facility at the north end of the office
park, the City acquired and annexed a 40 acre parcel. This parcel was developed with The City of Lake Forest
Municipal Services Facility which opened in August 2009. The facility houses City administrative staff from various
departments in a first class office building. The City’s fleet of vehicles and equipment is also housed at this location in
a state of the art garage supporting the high level of service delivered to the residents of Lake Forest. The City facility
also offers public meeting rooms and an on site training room. Almost 20 acres of the City site has been preserved as
open space and wetlands through a cooperative effort between the City, Lake Forest Open Lands Association and the
Lake County Forest Preserve. The preserved area is now under the stewardship of the Lake County Forest Preserve.
Prior to transferring the property to the Forest Preserve, the City took the lead on various site improvements most
notably, reclamation of a barrow pit left from the construction of the Tollway many years ago. This area is now re-
created as a series of shallow wetlands providing for enhanced water quality as water flows from a large tributary area
toward the Middlefork Savanna. This area is being improved with walking trails and bridges as an amenity for
employees of Conway Office Park and for the public. Wildlife abounds in the area.
6 70
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
In addition to the development of the corporate office park in the Lake Forest Route 60 Corridor, other
development activity continues in the corridor. Amberley Woods, a 40 acre development comprised of 90 residential
condominium units and 24 single family homes is partially completed. The first of two 45-unit condominium buildings
is completed and fully occupied. Pre-sales are underway for the second condominium building with a construction start
date still to be determined. The first two single family homes are complete and an updated design for the remaining
homes was recently approved by the City. The redesign provides a greater range of housing unit sizes and price points
in response to buyer interest. The Amberley Woods development is clustered around preserved wetlands and
woodlands providing a sheltered residential neighborhood with easy access to the Tollway. There is a 10 acre non-
residential component of the Amberley Woods development and discussions are underway about the right mix of
commercial uses for this parcel. A mix of neighborhood friendly retail, restaurants and service businesses is being
considered for the benefit of Lake Forest residents living in the area, but also to support the large number of employees
in Conway Park. On the north side of Route 60, another residential project is underway, Willow Lake, a 52 unit
townhouse development. This development is partially completed with five duplex buildings in various stages of
completion. The development, although close to Route 60, is hidden from views of traffic and is located on a natural
lake, in a secluded area, across from Lake Forest Academy, a private school. Almost every property in this
development has views of the natural pond or the new pond that was added to the site during construction. The
infrastructure throughout the development is complete and the development is currently being actively marketed.
Central Business District
The City’s Central Business District is focused around historic Market Square. Market Square was designed by
famed architect, and Lake Forest resident, Howard Van Doren Shaw and construction of the square began in 1915.
Market Square is still held up today by planners and architects throughout the Country as an extraordinary model of a
town center. Market Square and the surrounding blocks that make up the City’s core area are home to various unique
boutique retail stores, some national chains, restaurants (one located in the City’s former fire station), banks, real estate
offices, a commuter train station, City Hall and the post office. Although the City is committed to preserving the
historic character of the Central Business District, the City actively works with property owners and developers to
support adaptive reuse, restoration and redevelopment of properties in the Central Business District. With careful
planning and attention to preserving the character that makes Lake Forest special, projects like the cleanup and
redevelopment of a former gas station and car dealership site occurred in 2004. Today, the site is an active part of the
Central Business district with a two story bank building and a smaller building housing several new retail businesses
that have become community favorites. At another location in the Central Business District, the site of a former
building materials yard was redeveloped with the City’s first residential rowhouse project providing high end housing
near the business district and within walking distance of the train.
In 2010, major infrastructure upgrades and streetscape improvements were completed along Western Avenue,
the main street through the Central Business District. A key intersection was re-aligned, the sewer system was
upgraded, parking spaces were reconfigured to better meet customer needs, pedestrian crossings were added, the street
was re-constructed, enhanced streetscape lighting was installed and the entire area was re-landscaped. In response,
some private property owners in the Central Business District have re-invested in their properties with new signage and
awnings and overall maintenance work on the buildings.
The City recently received grants to support restoration of the historic train station which is located immediately
across from historic Market Square. The first phase of exterior restoration is complete and further work is planned
including interior improvements, a bicycle shelter and realigned bicycle path to support the City’s commuter hub.
Shortly after completion of the first phase of the project, a local garden shop opened a satellite location at the train
station filling the area with flowers and seasonal color and attracting customers to this convenient new location, right in
the center of the community.
7 71
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
Looking Forward - Development Opportunities
As noted above, development along the Route 60 Corridor continues with residential, office and mixed use
projects in the planning stages.
In other parts of the City, opportunities for development on remaining vacant parcels and redevelopment of
some strategically located parcels are under discussion. One of these strategic parcels is the former site of the City’s
Municipal Services Facility. This 10 acre parcel is located at the north end of the Central Business District and is
located within walking distance to shops, restaurants, the train station and the high school. This parcel presents a one
of a kind opportunity for redevelopment in the heart of Lake Forest. In preparation for seeking proposals from
developers for this property, the City Council is completing a planning process for the site which will result in the
release of Development Parameters for the property in fall, 2013. An environmental assessment of the site and
preliminary cleanup has been completed. The site provides the opportunity for various residential products as well as
mixed use opportunities. The City Council is committed to finding the right developer or developers for the site to
assure that the end product is one of high quality and one that supports and enhances the viability of the City’s Central
Business District and adds to the community’s distinctive character.
Municipal and Other Governmental Services
The City was granted incorporation by Special Charter (special act) of the General Assembly of the State of
Illinois in 1861. In 1869, the special act was repealed in its entirety by another special act. The 1869 Charter was a
more extensive grant than the 1861 act as indicated by the enumeration of the City Council's powers in 43 clauses.
One of the features of the Special Charter is that it was designed to provide needed municipal services while at the same
time centralizing the leadership and control over them. An example of this centralization is that while the
appropriations and tax levies of Elementary School District No. 67 are initiated by the School Board, they must be
incorporated in the tax levy ordinance adopted by the City Council. Another example is the Library Board, which
operates the City Library. The board is appointed by the City Council, rather than being a separately elected municipal
corporation. It is believed that the City is the only municipality in the State of Illinois that has maintained its original
Special Charter powers with all others having chosen instead, over the years, to be subject solely to the statutory
powers given to all Illinois municipalities.
The governing and legislative body of the City is the Council composed of a Mayor (elected bi-annually on an
at-large basis) and two aldermen from each of four wards (one alderman from each ward is elected annually). Pursuant
to an ordinance adopted in 1956, the City Manager is responsible for the day-to-day operations of the City and its 255
full-time employees (including Library employees). The employees in a collective bargaining unit include 30 police
officers, 58 public works/parks employees and 27 fire fighters. The City's Police and Fire departments include 40
uniformed police and 33 uniformed fire personnel. The excellence of the Fire Department is highlighted by the City's
Class 4 fire insurance rating which exceeds that of over 95% of the fire departments/districts in the State of Illinois.
Some of the municipal services provided for and funded out of the tax rate include: the public library (approximately
16,200 registered borrowers); twice weekly backdoor refuse pick-up; paramedic service (since 1974); and the parks and
recreation system including the 145 acre 18 hole golf course, 14 parks with a total acreage of 469 acres and 6
recreation facilities including a 1/4 mile public swimming beach and sailing center, Stirling Hall arts center, Wildlife
Discovery Center, Everett fieldhouse and the Community Recreation Center. The most recent addition to the
Community Recreation Center included the addition of 10,000 square feet to expand the City’s facilities for CROYA,
the City’s youth program. The expansion of the CROYA facilities was primarily funded through private donations. As
part of this project, the program area for the City’s preschool program was upgraded and parking and traffic circulation
were improved at the Recreation Center.
8 72
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
The City draws water for its plant from Lake Michigan. Proceeds of the Series 2001A Bonds were used to pay
the cost of engineering studies for improvements to the water system. The proceeds of the $26,000,000 Series 2002A
Bonds were used for water and sewer system improvements, including water treatment plant improvements, a 36-inch
transmission main and certain sanitary sewers. The Series 2003C Bonds were used for various water and sanitary
sewer system improvements. The Water Plant Improvement Project included the installation of a state of the art
membrane filtration system (the first water plant to have such technology in Illinois), the replacement of both high lift
and low lift pumps, the installation of electrical switch gear, and a new back-up power supply. Water began pumping
from the new plant at the end of April, 2004. The back-up power supply and HVAC improvements were completed by
October, 2004.
The City's Comprehensive Annual Financial Report has been awarded the Certificate of Achievement for
Excellence in Financial Reporting by the Governmental Finance Officers' Association (GFOA) of the United States and
Canada, for the City's 1979-2012 reports. The significance of the GFOA's award is emphasized by their statement:
"The Certificate of Achievement is the highest form of recognition in the area of governmental accounting and financial
reporting and its attainment represents a significant accomplishment by a governmental unit and its management.” The
City annually prepares a "Comprehensive Fiscal Plan" which includes: Operating and Capital Budgets for the current
year; a Five Year Financial Analysis and Plan; and, a Five Year Projection for Personnel, Capital Investment and
Equipment costs. The City has an independent Audit Committee consisting of Council members and residents having
expertise in the area of financial administration and auditing that serves as an oversight body on behalf of the City
Council. The City has been self-insured since 1981 through participation with the Intergovernmental Risk Management
Agency (IRMA), which is a proprietary venture established to manage and fund claims for its 70 member municipalities
and special districts.
The City's growth has been guided by far-sighted municipal planning. Formal zoning procedures were
implemented in 1923 when the City's first zoning ordinance was adopted. In 1926, an ordinance was adopted
establishing the Plan Commission. Comprehensive Plans to assist in long-range development were adopted in 1929,
1955 and 1978. The City’s Comprehensive Plan was completely updated in 1998 and officially adopted by the City
Council at that time. Demonstrating the City’s commitment to careful, long term planning, the Comprehensive Plan
was amended in 2001 and 2008 to respond to changing trends and needs in the community. In 1956, an ordinance was
adopted regulating the architectural design of buildings within the City and establishing the Building Review Board.
This ordinance has set Lake Forest apart from other suburban communities by providing the tools necessary to preserve
the unique character of the City’s neighborhoods and ensure that changes happen in a manner that protects the historic
heritage of the community as well as the values of individual properties. On a contractual basis, the City provides
building inspection and plan review for the Villages of Lake Bluff and Bannockburn. The City completed a
Comprehensive Master Park Plan in October, 1995 which assessed existing park and recreational facilities, determined
current needs, projected future needs, suggested the most effective utilization of existing facilities, and identified and
prioritized needed improvements and enhancements to the parks. The Plan encompassed all City-owned properties and
included cost estimates and fiscally responsible phasing recommendations for accomplishing required improvements.
Schools/Hospitals
Lake Forest School District No. 67, which serves nearly the City’s entire tax base, had an enrollment in the
2012-2013 school year of 2,023 students. The District operates three K-4 schools and one middle school for grades 5-
8.
The Lake Forest Community High School District No. 115 serves Lake Forest, Lake Bluff, and surrounding
unincorporated areas including Knollwood. The Lake Forest High School District has an enrollment of approximately
1,700.
9 73
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
The City’s diverse and strong educational institutions continue to grow, upgrade and adapt in response to
education trends. Lake Forest College (enrollment 1,525), a private liberal arts college established even before the City
itself, just completed a new residence hall which welcomes students for the first time in fall, 2013. This residence hall
replaces one of the original residence halls providing the types of living spaces and amenities desired by today’s college
student. This new residence hall joins the recently completed student sports center on south campus demonstrating the
commitment of the college to remain current and actively competitive with similarly sized colleges throughout the
Country. Concurrent with this project upgrading of water mains occurred throughout the campus improving life safety
protections to the various buildings on campus.
Two of the City’s private high schools are actively upgrading their campuses. Lake Forest Academy recently
completed a new student sports center and a girls’ dormitory. At the time of this writing, the finishing touches are
being put on the new Science Center on the campus. Woodlands Academy, a Catholic girls’ school, recently received a
gift of the adjacent 22 acre property, the former Barat Campus. This additional property, in the short term, will be
used to add competition level athletic fields to the campus. The library on the former Barat Campus, built about 15
years ago, will add student and faculty space to the campus. This parcel gives Woodlands space to grow and reinvent
itself in the future.
Northwestern Lake Forest Hospital is set to break ground within the next year on a replacement hospital. Road
improvements to support this new development are already underway. The City and hospital teams have worked
closely together over the past two years developing plans, studying traffic patterns, addressing stormwater runoff and
gaining the necessary approvals from local and State agencies in support of this project. Approvals are in place
authorizing the construction of a new hospital and associated medical office buildings of up to 500 square feet. The
park-like health and wellness campus will be a regional medical center but for Lake Forest residents will continue to
benefit from state of the art medical care right in our own community.
The hospital is part of Lake Forest’s history and although the planned replacement, with an opening date
scheduled in summer 2017, will raise the standard of care and the quality of the existing facility significantly, the
hospital today remains a cornerstone of the community. The campus today includes the Hospital Health & Fitness
Center, Dearhaven Child Care and Learning Center, Westmoreland Nursing Center and the Women’s Auxiliary of
Lake Forest Hospital. The emergency department provides adult and pediatric emergency care, urgent care and a 24-
hour Level II trauma center. The hospital also provides community education programs covering prevention and
wellness, seminars related to specific diseases and treatments, support groups and a comprehensive selection of
perinatal and parenting classes.
10 74
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
SOCIOECONOMIC INFORMATION
The following statistics pertain principally to the City. Additional comparisons are made with Lake County (the
“County”) and the State of Illinois (the “State”).
Employment
Following are lists of large employers located in the City and in the surrounding area.
Major City Employers(1)
Approximate
Name Product/Service Employment
Northwestern Lake Forest Hospital ................... General Medical and Surgical Hospital .............................. 1,600
Hospira, Inc. ....................................... Corporate Headquarters and Surgical and Medical Instruments ......... 1,350
Trustmark Mutual Holding Co. ........................ Health and Life Insurance Benefits and Administration ............... 800
Solo Cup Co. ........................................ Corporate Headquarters; Plastic Cups and Containers ................. 600
Lake Forest College ................................. Higher Education ................................................... 500(2)
Pactiv LLC .......................................... Corporate Headquarters and Specialty Packaging Products ............. 300
Lake Forest Community High School District No. 115 ... Secondary Education ................................................ 350(3)
City of Lake Forest ................................. Municipal Government ............................................... 275
Brunswick Corp. ..................................... Corporate Headquarters and Sporting and Athletic Goods .............. 200
Packaging Corp. of America ......................... Corporate Headquarters and Containerboard and Corrugated Packaging .. 200
Notes: (1) Source: 2013 Illinois Manufacturers Directory, 2013 Illinois Services Directory and a selective telephone survey.
(2) Excludes student employees.
(3) Excludes coaches, community education employees and student employees.
Major Area Employers(1)
Approximate
Location Name Description Employment
Northbrook ...... Allstate Insurance ........................ Insurance Corporate Office .................................... 8,750
Lincolnshire .... Aon Hewitt ................................ Employee Benefits and Compensation Consultants ................ 5,000
North Chicago ... Abbott Laboratories........................ Pharmaceutical Products ....................................... 3,400
Multiple ........ Baxter International, Inc. ................. Wholesale Medical Supplies .................................... 2,700(2)
Deerfield ....... Takeda Pharmaceuticals North America, Inc. . Corporate Headquarters and Pharmaceutical Preparations ........ 2,668
Deerfield ....... Kinetek, Inc. ............................. Corporate Headquarters and Commercial Printing ................ 2,500
Deerfield ....... Walgreen Co. .............................. Drug Store Corporate Office ................................... 2,500
Libertyville .... Advocate Condell Medical Center ............ Medical Center ............................................... 2,200
Northbrook ...... Underwriters Laboratories .................. Independent Non-Profit Testing ................................ 1,600
Unincorporated
Lake Forest .... W.W. Grainger ............................. Corporate Headquarters; Industrial
and Commercial Equipment and Supplies ........................ 1,200
Northbrook ...... CVS Caremark .............................. Integrated Health Care Services ............................... 1,000
Vernon Hills .... Zebra Technologies Corp. ................... Label Printers and Encoders ................................... 900
Deerfield ....... Astellas Pharma US, Inc. ................... Corporate Headquarters and Wholesale Pharmaceutical Products .. 800
Deerfield ....... United Stationers ......................... Corporate Headquarters and Wholesale Office Furniture ......... 800
Notes: (1) Source: The County, the 2013 Illinois Services Directory, the 2013 Illinois Manufacturers Directory and a
selective telephone survey.
(2) Includes 1,900 in Round Lake and 800 in Deerfield.
11 75
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
The following tables show employment by industry and by occupation for the City, Lake County and the State
of Illinois as reported by the U.S. Census Bureau 2007-2011 American Community Survey 5-year estimated values.
Employment By Industry(1)
The City Lake County State of Illinois
Classification Number Percent Number Percent Number Percent
Agriculture, Forestry, Fishing and Hunting, and Mining ....... 32 0.4% 1,140 0.3% 63,960 1.1%
Construction ................................................ 200 2.6% 18,457 5.5% 343,232 5.7%
Manufacturing ............................................... 898 11.7% 55,228 16.4% 775,663 12.8%
Wholesale Trade ............................................. 352 4.6% 15,613 4.6% 196,738 3.3%
Retail Trade ................................................ 583 7.6% 39,662 11.8% 659,708 10.9%
Transportation and Warehousing, and Utilities ............... 193 2.5% 12,496 3.7% 355,486 5.9%
Information ................................................. 120 1.6% 6,710 2.0% 135,688 2.2%
Finance and Insurance, and Real Estate
and Rental and Leasing ..................................... 1,613 21.0% 27,421 8.2% 466,468 7.7%
Professional, Scientific, and Management, Administrative,
and Waste Management Services .............................. 1,299 16.9% 44,143 13.1% 662,987 11.0%
Educational Services and Health Care and Social Assistance ... 1,572 20.5% 61,790 18.4% 1,337,455 22.1%
Arts, Entertainment and Recreation and Accommodation
and Food Services .......................................... 423 5.5% 27,984 8.3% 524,925 8.7%
Other Services, Except Public Administration ................ 325 4.2% 15,031 4.5% 288,538 4.8%
Public Administration ....................................... 60 0.8% 10,303 3.1% 232,923 3.9%
Total ..................................................... 7,670 100.0% 335,978 100.0% 6,043,771 100.0%
Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates 2007 to 2011.
Employment By Occupation(1)
The City Lake County State of Illinois
Classification Number Percent Number Percent Number Percent
Management, Business, Science, and Art ...................... 4,491 58.6% 139,543 41.5% 2,167,571 35.9%
Service ..................................................... 618 8.1% 46,867 13.9% 1,007,434 16.7%
Sales and Office ............................................ 2,084 27.2% 88,623 26.4% 1,550,202 25.6%
Natural Resources, Construction, and Maintenance............. 188 2.5% 22,873 6.8% 474,566 7.9%
Production, Transportation, and Material Moving ............. 289 3.8% 38,072 11.3% 843,998 14.0%
Total ..................................................... 7,670 100.0% 335,978 100.0% 6,043,771 100.0%
Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates 2007 to 2011.
Unemployment rates for the City are well below the County and the State levels, as shown below.
Annual Average Unemployment Rates(1)
Calendar The The The
Year City County State
2004 ............................ 3.0% 5.5% 6.2%
2005 ............................ 2.6% 4.7% 5.7%
2006 ............................ 2.3% 4.2% 4.5%
2007 ............................ 2.8% 5.0% 5.1%
2008 ............................ 3.9% 6.7% 6.5%
2009 ............................ 5.8% 9.8% 10.0%
2010 ............................ 6.2% 10.5% 10.3%
2011 ............................ 5.7% 9.4% 9.8%
2012 ............................ 5.3% 8.7% 8.9%
2013(2) ......................... N/A 8.1% 9.8%
Notes: (1) Source: Illinois Department of Employment Security and the
City.
(2) Preliminary for the month of June 2013.
12 76
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
Building Permits
City Building Permits(1)
Fiscal Building Permits Residential Commercial
Year Issued Construction Construction
2004 ................ 4,308 83 3
2005 ................ 4,740 128 5
2006 ................ 4,055 44 1
2007 ................ 3,501 22 3
2008 ................ 3,491 33 1
2009 ................ 3,142 23 3
2010 ................ 2,610 4 1
2011 ................ 3,072 8 2
2012 ................ 3,451 11 1
2013 ................ 3,197 7 2
Note: (1) Source: the City.
The U.S. Census Bureau 5-year estimated values reported that the median value of the City’s owner-occupied
homes was $863,900. This compares to $280,900 for Lake County and $198,500 for the State of Illinois. The
following table represents the five year average market value of specified owner-occupied units for the City, Lake
County and the State of Illinois at the time of the 2007-2011 American Community Survey.
Specified Owner-Occupied Units(1)
The City Lake County State of Illinois
Value Number Percent Number Percent Number Percent
Under $50,000 ..................... 46 0.8% 4,576 2.5% 218,208 6.7%
$50,000 to $99,999 ................ 57 0.9% 5,491 2.9% 451,967 13.8%
$100,000 to $149,999 .............. 53 0.9% 17,026 9.1% 464,158 14.2%
$150,000 to $199,999 .............. 137 2.3% 30,373 16.3% 518,957 15.8%
$200,000 to $299,999 .............. 147 2.4% 42,526 22.8% 725,004 22.1%
$300,000 to $499,999 .............. 601 9.9% 45,688 24.5% 613,486 18.7%
$500,000 to $999,999 .............. 2,719 44.8% 31,953 17.2% 234,600 7.2%
$1,000,000 or more ................ 2,310 38.1% 8,604 4.6% 53,191 1.6%
Total ........................... 6,070 100.0% 186,237 100.0% 3,279,571 100.0%
Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates 2007 to 2011.
Mortgage Status(1)
The City Lake County State of Illinois
Number Percent Number Percent Number Percent
Housing Units with a Mortgage ..... 3,874 63.8% 144,394 77.5% 2,272,745 69.3%
Housing Units Without a Mortgage .. 2,196 36.2% 41,843 22.5% 1,006,826 30.7%
Total ........................... 6,070 100.0% 186,237 100.0% 3,279,571 100.0%
Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates 2007 to 2011.
Income
Per Capita Personal Income
for the Ten Highest Income Counties in the State(1)
Rank 2007-2011
1 .................... Lake County ................. $38,512
2 .................... DuPage County ............... 38,405
3 .................... McHenry County .............. 32,318
4 .................... Monroe County ............... 31,570
5 .................... Kendall County .............. 31,325
6 .................... Will County ................. 30,199
7 .................... Cook County ................. 29,920
8 .................... Woodford County ............. 29,886
9 .................... Kane County ................. 29,864
10 .................... Sangamon County ............. 29,167
Note: (1) Source: U.S. Bureau of the Census. 2007-2011
American Community 5-Year Estimates.
13 77
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
The following shows the median family income for counties in the Chicago metropolitan area.
Ranking of Median Family Income(1)
Ill. Family Ill.
County Income Rank
DuPage County .............$94,049 1
Lake County ............... 93,260 2
Kendall County ............ 90,696 3
McHenry County ............ 87,133 4
Will County ............... 86,372 5
Kane County ............... 79,686 7
Cook County ............... 65,842 20
Note: (1) Source: U. S. Bureau of the Census,
American Community Survey, 2007-2011
estimates.
The U.S. Census Bureau 5-year estimated values reported that the City had a median family income of
$168,611. This compares to $93,260 for Lake County and $69,658 for the State of Illinois. The following table
represents the distribution of family incomes for the City, Lake County and the State of Illinois at the time of the 2007-
2011 American Community Survey.
Family Income(1)
The City Lake County State of Illinois
Value Number Percent Number Percent Number Percent
Under $10,000 ..................... 52 1.0% 4,168 2.3% 131,841 4.2%
$10,000 to $14,999 ................ 55 1.1% 2,562 1.4% 86,610 2.7%
$15,000 to $24,999 ................ 83 1.6% 8,191 4.6% 224,421 7.1%
$25,000 to $34,999 ................ 124 2.4% 9,858 5.5% 260,262 8.3%
$35,000 to $49,999 ................ 147 2.8% 16,941 9.5% 389,862 12.4%
$50,000 to $74,999 ................ 484 9.3% 27,997 15.7% 606,737 19.2%
$75,000 to $99,999 ................ 414 8.0% 26,260 14.7% 486,151 15.4%
$100,000 to $149,999 .............. 1,015 19.6% 37,674 21.1% 547,784 17.4%
$150,000 to $199,999 .............. 479 9.2% 19,776 11.1% 212,016 6.7%
$200,000 or more .................. 2,331 45.0% 25,205 14.1% 207,841 6.6%
Total ........................... 5,184 100.0% 178,632 100.0% 3,153,525 100.0%
Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates 2007 to 2011.
The U.S. Census Bureau 5-year estimated values reported that the City had a median household income of
$133,264. This compares to $79,666 for Lake County and $56,576 for the State of Illinois. The following table
represents the distribution of household incomes for the City, Lake County and the State of Illinois at the time of the
2007-2011 American Community Survey.
Household Income(1)
The City Lake County State of Illinois
Value Number Percent Number Percent Number Percent
Under $10,000 ..................... 190 2.8% 9,017 3.8% 324,506 6.8%
$10,000 to $14,999 ................ 146 2.2% 6,320 2.6% 225,927 4.7%
$15,000 to $24,999 ................ 215 3.2% 15,999 6.7% 480,204 10.1%
$25,000 to $34,999 ................ 271 4.0% 16,558 6.9% 462,115 9.7%
$35,000 to $49,999 ................ 305 4.5% 26,067 10.9% 628,998 13.2%
$50,000 to $74,999 ................ 751 11.2% 39,554 16.5% 884,623 18.5%
$75,000 to $99,999 ................ 581 8.7% 33,556 14.0% 627,813 13.2%
$100,000 to $149,999 .............. 1,165 17.4% 43,393 18.1% 656,199 13.7%
$150,000 to $199,999 .............. 586 8.7% 21,960 9.2% 243,765 5.1%
$200,000 or more .................. 2,502 37.3% 27,523 11.5% 238,852 5.0%
Total ........................... 6,712 100.0% 239,947 100.0% 4,773,002 100.0%
Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates 2007 to 2011.
14 78
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
Retail Activity
The table below shows certain sales tax receipts collected by the City as an indicator of commercial activity.
Retailers’ Occupation, Service Occupation and Use Tax(1)
State Fiscal Year State Sales Tax Annual
Ending June 30 Distribution(2) Change + (-)
2004 ........................ $2,071,156 5.77%(3)
2005 ........................ 2,146,549 3.64%
2006 ........................ 2,252,966 4.96%
2007 ........................ 2,783,698(4) 23.56%
2008 ........................ 3,050,438(4) 9.58%
2009 ........................ 2,971,996(4) (2.57%)
2010 ........................ 2,519,529(4) (15.22%)
2011 ........................ 2,414,327(4) (4.18%)
2012 ........................ 2,406,211(4) (0.34%)
2013 ........................ 2,596,446(4) 7.91%
Growth from 2004 to 2013 ....................................... 25.36%
Notes: (1) Source: Illinois Department of Revenue.
(2) Tax distributions are based on records of the Illinois Department
of Revenue relating to the 1% municipal portion of the Retailers’
Occupation, Service Occupation and Use Tax, collected on behalf of
the City, less a State administration fee. The municipal 1%
includes tax receipts from the sale of food and drugs which are
not taxed by the State.
(3) The 2004 percentage is based on 2003 sales tax receipts of
$1,958,166.
(4) Includes Home Rule Sales Taxes.
PLAN OF FINANCING
The proceeds of the Bonds will be used: (i) to currently refund the City’s outstanding General Obligation
Bonds, Series 2010A, as listed below (the “Refunded Bonds”), and (ii) to pay the costs of issuance of the Bonds.
Refunded Bonds
General Obligation Bonds, Series 2010A
Outstanding Amount Redemption Redemption
Maturity Amount Refunded Price Date
12/15/2015 .......... $9,665,000 $9,665,000 100.00% 12/15/2013
Bond proceeds will be uninvested or used to purchase direct full faith and credit obligations of the United States
of America (the “Government Securities”), the principal of which together with interest to be earned thereon will be
sufficient (i) to pay when due the interest on the Refunded Bonds as stated above, and (ii) to pay principal of the
Refunded Bonds on their redemption date.
The Government Securities will be held in an escrow account created pursuant to an escrow agreement (the
“Escrow Agreement”) between the City and Wells Fargo Bank, N.A., Chicago, Illinois, as Escrow Agent (the
“Escrow Agent”). All moneys and Government Securities deposited for the payment of Refunded Bonds, including
interest thereon, are required to be applied solely and irrevocably to the payment of the Refunded Bonds.
15 79
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
DEBT INFORMATION
After issuance of the Bonds and the refunding of the Refunded Bonds, the City will have outstanding $56,295,000 (subject to change) principal amount
of general obligation bonded debt. In addition, the City has $2,143,146 aggregate principal amount of special service area bonds. The City does not intend to
issue additional debt in 2013.
Outstanding Bonded Debt(1)
(Principal Only)
Fiscal Less: Total
Year Ending Series Series Series Series Series Series Series Refunded The Bonded Cumulative Retirement(2)
April 30 2008 2009 2010A 2010B 2010C 2011A 2011B Bonds Bonds(2) Debt(2) Amount Percent
2014 ..... $ 535,000 $ 165,000 $ 0 $ 0 $ 0 $ 480,000 $ 1,870,000 $ 0 $ 0 $ 3,050,000 $ 3,050,000 5.42%
2015 ..... 550,000 170,000 0 0 0 480,000 1,920,000 0 65,000 3,185,000 6,235,000 11.08%
2016 ..... 565,000 170,000 9,665,000 0 300,000 325,000 1,955,000 (9,665,000) 100,000 3,415,000 9,650,000 17.14%
2017 ..... 580,000 175,000 0 0 195,000 120,000 2,215,000 0 0 3,285,000 12,935,000 22.98%
2018 ..... 600,000 180,000 0 0 210,000 125,000 2,270,000 0 100,000 3,485,000 16,420,000 29.17%
2019 ..... 615,000 185,000 0 0 225,000 130,000 2,300,000 0 200,000 3,655,000 20,075,000 35.66%
2020 ..... 635,000 190,000 0 0 215,000 130,000 2,400,000 0 350,000 3,920,000 23,995,000 42.62%
2021 ..... 465,000 200,000 0 0 405,000 140,000 2,470,000 0 430,000 4,110,000 28,105,000 49.92%
2022 ..... 485,000 205,000 0 0 415,000 0 2,530,000 0 435,000 4,070,000 32,175,000 57.15%
2023 ..... 500,000 215,000 0 0 425,000 0 2,605,000 0 440,000 4,185,000 36,360,000 64.59%
2024 ..... 520,000 225,000 0 0 435,000 0 1,870,000 0 450,000 3,500,000 39,860,000 70.81%
2025 ..... 540,000 235,000 0 0 445,000 0 0 0 460,000 1,680,000 41,540,000 73.79%
2026 ..... 560,000 245,000 0 0 460,000 0 0 0 475,000 1,740,000 43,280,000 76.88%
2027 ..... 580,000 255,000 0 0 475,000 0 0 0 480,000 1,790,000 45,070,000 80.06%
2028 ..... 605,000 265,000 0 0 490,000 0 0 0 495,000 1,855,000 46,925,000 83.36%
2029 ..... 0 280,000 0 0 490,000 0 0 0 930,000 1,700,000 48,625,000 86.38%
2030 ..... 0 0 0 540,000 240,000 0 0 0 960,000 1,740,000 50,365,000 89.47%
2031 ..... 0 0 0 780,000 0 0 0 0 1,085,000 1,865,000 52,230,000 92.78%
2032 ..... 0 0 0 820,000 0 0 0 0 1,120,000 1,940,000 54,170,000 96.23%
2033 ..... 0 0 0 860,000 0 0 0 0 1,265,000 2,125,000 56,295,000 100.00%
Total... $8,335,000 $3,360,000 $9,665,000 $3,000,000 $5,425,000 $1,930,000 $24,405,000 $(9,665,000) $9,840,000 $56,295,000
Notes: (1) Source: the City.
(2) Subject to change. 1680
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
Detailed Overlapping Bonded Debt(1)
(As of April 30, 2013)
Outstanding Applicable to City
Debt Percent(2) Amount
Schools:
School District No. 67 ................................................ $ 1,087,468 99.94% $ 1,086,816
School District No. 103 ............................................... 2,840,000 0.01% 284
High School District No. 115 .......................................... 46,545,000 79.43% 36,970,694
High School District No. 128 .......................................... 21,995,000 3.00% 659,850
Community College District No. 532 .................................... 20,535,000 10.24% 2,102,784
Total Schools ................................................................................................... $40,820,427
Others:
Lake County ........................................................... $ 82,955,000 9.72% $ 8,063,226
Lake County Forest Preserve District .................................. 305,415,000 9.72% 29,686,338
Total Others .................................................................................................... $37,749,564
Total Overlapping Debt .......................................................................................... $78,569,991
Notes: (1) Source: Lake County Clerk.
(2) Overlapping percentages are based on 2012 EAVs, the most current available.
Statement of Bonded Indebtedness(1)(2)
Ratio To Per Capita
Amount Equalized Estimated (2010 Census
Applicable Assessed Actual 19,375)
City EAV of Taxable Property, 2012 ........................... $2,378,047,139 100.00% 33.33% $122,737.92
Estimated Actual Value, 2012 ................................. $7,134,141,417 300.00% 100.00% $368,213.75
Total Direct Bonded Debt(3) .................................. $ 56,295,000 2.37% 0.79% $ 2,905.55
Overlapping Bonded Debt:
Schools ...................................................... $ 40,820,427 1.72% 0.57% $ 2,106.86
Others ....................................................... 37,749,564 1.59% 0.53% 1,948.36
Total Overlapping Bonded Debt .............................. $ 78,569,991 3.30% 1.10% $ 4,055.23
Total Direct and Overlapping Bonded Debt(3) ................. $ 134,864,991 5.67% 1.89% $ 6,960.77
Notes: (1) Source: Lake County Clerk.
(2) As of the date of issuance of the Bonds for Direct Bonded Debt and as of April 30, 2013 for Overlapping Bonded Debt.
(3) Subject to change.
PROPERTY ASSESSMENT AND TAX INFORMATION
For the 2012 levy year, the City’s EAV was comprised of approximately 91% residential, 9% commercial, and
less than 1% industrial, farm and railroad property valuations.
City Equalized Assessed Valuation(1)(2)
Levy Years
Property Class 2008 2009 2010 2011 2012
Residential ............... $2,674,566,048 $2,609,955,147 $2,452,291,451 $2,302,061,004 $2,166,702,992
Farm ...................... 5,025,397 4,934,090 4,679,567 4,142,688 2,485,744
Commercial ................ 217,608,832 214,117,162 203,193,623 203,074,638 207,360,589
Industrial ................ 79,283 71,603 66,933 70,382 65,556
Railroad .................. 792,412 953,855 1,191,938 1,266,392 1,432,258
Total ................... $2,898,071,972 $2,830,031,857 $2,661,423,512 $2,510,615,104 $2,378,047,139
Percent change +(-) ....... 3.21%(3) (2.35%) (5.96%) (5.67%) (5.28%)
Notes: (1) Source: Lake County Clerk.
(2) Excludes the incremental valuation in the City’s tax increment financing districts, if applicable .
(3) Percentage based on 2007 Equalized Assessed Valuation of $2,807,947,615.
17 81
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
Representative Tax Rates
Per $100 of Equalized Assessed Valuation(1)
Levy Years
2008 2009 2010 2011 2012
Bonds and Interest .................................. $0.086 $0.090 $0.096 $0.068 $0.071
Pensions (Police, Fire, IMRF) ....................... 0.119 0.138 0.153 0.165 0.182
Library Board ....................................... 0.114 0.118 0.130 0.141 0.157
Playgrounds and Recreation Board .................... 0.102 0.151 0.165 0.178 0.194
Corporate Fund ...................................... 0.449 0.405 0.446 0.483 0.544
Total Tax Rate .................................... $0.870 $0.902 $0.990 $1.035 $1.148
Lake County and Forest Preserve Dist. ............... 0.652 0.664 0.703 0.755 0.820
North Shore Sanitary Dist. .......................... 0.121 0.124 0.136 0.150 0.150
Lake Forest Elementary School District No. 67 ........ 0.965 0.998 1.095 1.186 1.322
Lake Forest High School No. 115 ..................... 1.001 1.069 1.101 1.191 1.322
Community College Dist. No. 532 ..................... 0.196 0.200 0.218 0.240 0.272
All Other ........................................... 0.069 0.068 0.062 0.069 0.065
Total(2) .......................................... $3.874 $4.025 $4.305 $4.626 $5.099
City as a Percent of Total .......................... 22.46% 22.41% 23.00% 22.37% 22.51%
Notes: (1) Source: Lake County Clerk.
(2) Representative tax rate is for Shields Township Tax Code 14, which represents 40% of the City's 2012 Equalized
Assessed Valuation.
City Tax Extensions and Collections(1)
Levy Coll. Taxes Total Collections
Year Year Extensions Amount Percent
2003 ............ 2004 ............. $20,269,822 $20,213,624 99.72%
2004 ............ 2005 ............. 21,219,092 21,197,444 99.90%
2005 ............ 2006 ............. 21,907,603 21,773,228 99.39%
2006 ............ 2007 ............. 22,999,873 22,979,703 99.91%
2007 ............ 2008 ............. 23,895,634 23,862,170 99.86%
2008 ............ 2009 ............. 25,213,226 25,174,923 99.85%
2009 ............ 2010 ............. 25,526,887 25,486,745 99.84%
2010 ............ 2011 ............. 26,348,093 26,312,509 99.86%
2011 ............ 2012 ............. 25,984,866 25,911,250 99.72%
2012 ............ 2013 ............. 27,299,981 ------In Collection------
Note: (1) Source: the City.
Major City Taxpayers(1)
Major Taxpayers Business/Service 2012 EAV(2)
Hospira Inc. ............................................... Corporate HQ and Surgical and Medical Instruments .......... $18,771,220
Lake Products Inc. ......................................... Real Property ............................................. 13,929,128
The Presbyterian Home ...................................... Retirement Facility........................................ 13,749,270
CBIZ Property Tax Solution ................................. Real Property ............................................. 11,196,536
Trustmark Insurance Co. .................................... Health and Life Insurance and Benefits Administration ...... 7,750,771
Lake Forest Landmark Company, LLC .......................... Office Building ........................................... 6,962,512
Northwestern Lake Forest Hospital .......................... General Medical and Surgical Hospital ...................... 6,918,325
Lake Forest Landmark II .................................... Real Property ............................................. 5,928,948
Shawgate Lake Forest, LLC .................................. Commercial Property........................................ 5,440,583
Chicago Bears Football Club, Inc. .......................... Professional Football Franchise ............................ 5,402,161
Total ............................................................................................................... $96,049,454
Ten Largest as a percent of 2012 EAV ($2,378,047,139) ................................................................ 4.04%
Notes: (1) Source: Lake County Clerk.
(2) Every effort has been made to seek out and report the largest taxpayers. However, many of the taxpayers listed
contain multiple parcels and it is possible that some parcels and their valuations have been overlooked. The 20 12
EAV is the most current available.
18 82
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
Real Property Assessment, Tax Levy and Collection
Tax Levy and Collection Procedures. Local Assessment Officers determine the assessed valuation of taxable
real property and railroad property not held or used for railroad operations. The Illinois Department of Revenue (the
“Department”) assesses certain other types of taxable property, including railroad property held or used for railroad
operations. Local Assessment Officers’ valuation determinations are subject to review at the county level and then, in
general, to equalization by the Department. Such equalization is achieved by applying to each county’s assessments a
multiplier determined by the Department. The purpose of equalization is to provide a common basis of assessments
among counties by adjusting assessments toward the statutory standard of 33-1/3% of fair cash value. Farmland is
assessed according to a statutory formula which takes into account factors such as productivity and crop mix. Taxes are
extended against the assessed values after equalization.
Property tax levies of each taxing body are filed in the office of the county clerk of each county in which
territory of that taxing body is located. The county clerk computes the rates and amount of taxes applicable to taxable
property subject to the tax levies of each taxing body and determines the dollar amount of taxes attributable to each
respective parcel of taxable property. The county clerk then supplies to the appropriate collecting officials within the
county the information needed to bill the taxes attributable to the various parcels therein. After the taxes have been
collected, the collecting officials distribute to the various taxing bodies their respective shares of the taxes collected.
Taxes levied in one calendar year are due and payable in two installments during the next calendar year. Taxes that are
not paid when due, or that are not paid by mail and postmarked on or before the due date, are subject to a penalty of
1-1/2% per month until paid. Unpaid property taxes, together with penalties, interest, and costs, constitute a lien
against the property subject to the tax.
Exemptions. An annual General Homestead Exemption provides that the Equalized Assessed Valuation
(“EAV”) of certain property owned and used for residential purposes (“Residential Property”) may be reduced by the
amount of any increase over the 1977 EAV, up to a maximum reduction of $3,500 for assessment years prior to
assessment year 2004 in counties with less than 3,000,000 inhabitants, and a maximum reduction of $5,000 for
assessment year 2004 through 2007 in all counties. Additionally, the maximum reduction is $5,500 for assessment year
2008 and the maximum reduction is $6,000 for assessment year 2009 and thereafter in all counties.
The Homestead Improvement Exemption applies to Residential Properties that have been improved or rebuilt in
the 2 years following a catastrophic event. The exemption is limited to $45,000 through December 31, 2003, and
$75,000 per year beginning January 1, 2004 and thereafter, to the extent the assessed value is attributable solely to such
improvements or rebuilding.
Additional exemptions exist for senior citizens. The Senior Citizens Homestead Exemption (“Senior Citizens
Homestead Exemption”) operates annually to reduce the EAV on a senior citizen’s home for assessment years prior to
2004 by $2,000 in counties with less than 3,000,000 inhabitants. For assessment years 2004 and 2005, the maximum
reduction is $3,000 in all counties. For assessment years 2006 and 2007, the maximum reduction is $3,500 in all
counties. In addition, for assessment year 2008 and thereafter, the maximum reduction is $4,000 for all counties.
Furthermore, beginning with assessment year 2003, for taxes payable in 2004, property that is first occupied as a
residence after January 1 of any assessment year by a person who is eligible for the Senior Citizens Homestead
Exemption must be granted a pro rata exemption for the assessment year based on the number of days during the
assessment year that the property is occupied as a residence by a person eligible for the exemption.
19 83
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
A Senior Citizens Assessment Freeze Homestead Exemption (“Senior Citizens Assessment Freeze Homestead
Exemption”) freezes property tax assessments for homeowners, who are 65 and older and receive a household income
not in excess of the maximum income limitation. The maximum income limitation is $35,000 for years prior to 1999,
$40,000 for assessment years 1999 through 2003, $45,000 for assessment years 2004 and 2005, $50,000 from
assessment years 2006 and 2007 and for assessments year 2008 and after, the maximum income limitation is $55,000.
In general, the Exemption limits the annual real property tax bill of such property by granting to qualifying senior
citizens an exemption as to a portion of the valuation of their property. In counties with a population of 3,000,000 or
more, the exemption for all assessment years is equal to the EAV of the residence in the assessment year for which
application is made less the base amount. Furthermore, for those counties with less than 3,000,000, the exemption is
as follows: through assessment year 2005 and for assessment year 2007 and later, the exempt amount is the difference
between (i) the current EAV of their residence and (ii) the base amount, which is the EAV of a senior citizen’s
residence for the year prior to the year in which he or she first qualifies and applies for the Exemption (plus the EAV of
improvements since such year). For assessment year 2006, the amount of the exemption phases out as the amount of
household income increases. The amount of the exemption is calculated by using the same formula as above, and then
multiplying the resulting value by a ratio that varies according to household income.
Another exemption available to disabled veterans operates annually to exempt up to $70,000 of the Assessed
Valuation of property owned and used exclusively by such veterans or their spouses for residential purposes. Also,
certain property is exempt from taxation on the basis of ownership and/or use, such as public parks, not-for-profit
schools and public schools, churches, and not-for-profit hospitals and public hospitals. However, individuals claiming
exemption under the Disabled Persons’ Homestead Exemption (“Disabled Persons’ Homestead Exemption”) or the
Disabled Veterans Standard Homestead Exemption (“Disabled Veterans Standard Homestead Exemption”) cannot claim
the aforementioned exemption.
Furthermore, beginning with assessment year 2007, the Disabled Persons’ Homestead Exemption provides an
annual homestead exemption in the amount of $2,000 for property that is owned and occupied by certain persons with a
disability. However, individuals claiming exemption as a disabled veteran or claiming exemption under the Disabled
Veterans Standard Homestead Exemption cannot claim the aforementioned exemption.
In addition, the Disabled Veterans Standard Homestead Exemption provides disabled veterans an annual
homestead exemption starting with assessment year 2007 and thereafter. Specifically, (i) those veterans with a service-
connected disability of 75% are granted an exemption of $5,000 and (ii) those veterans with a service-connected
disability of less than 75%, but at least 50% are granted an exemption of $2,500. Furthermore, the veteran’s surviving
spouse is entitled to the benefit of the exemption, provided that the spouse has legal or beneficial title of the homestead,
resides permanently on the homestead and does not remarry. Moreover, if the property is sold by the surviving spouse,
then an exemption amount not to exceed the amount specified by the current property tax roll may be transferred to the
spouse’s new residence, provided that it is the spouse’s primary residence and the spouse does not remarry. However,
individuals claiming exemption as a disabled veteran or claiming exemption under the Disabled Persons’ Homestead
Exemption cannot claim the aforementioned exemption.
Beginning with assessment year 2007, the Returning Veterans’ Homestead Exemption (“Returning Veterans’
Homestead Exemption”) is available for property owned and occupied as the principal residence of a veteran in the
assessment year the veteran returns from an armed conflict while on active duty in the United States armed forces.
This provision grants a homestead exemption of $5,000, which is applicable in all counties. In order to apply for this
exemption, the individual must pay real estate taxes on the property, own the property or have either a legal or an
equitable interest in the property, “or a leasehold interest of land on which a single family residence is located, which is
occupied as a principle residence of a veteran returning from an armed conflict involving the armed forces of the
United States who has an ownership interest therein, legal, equitable or as a lessee, and on which the veteran is liable
for the payment of property taxes.” Those individuals eligible for this exemption may claim the exemption in addition
to other homestead exemptions, unless otherwise noted.
20 84
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
Property Tax Extension Limitation Law
The Property Tax Extension Limitation Law (the “Limitation Law”) limits the amount of the annual increase in
property taxes to be extended for certain Illinois non-home rule units of government. In general, the Limitation Law
restricts the amount of such increases to the lesser of 5% or the percentage increase in the Consumer Price Index during
the calendar year preceding the levy year. Currently, the Limitation Law applies only to and is a limitation upon all
non-home rule taxing bodies in Cook County, the five collar counties (DuPage, Kane, Lake, McHenry and Will) and
several downstate counties.
Home rule units, including the City, are exempt from the limitations contained in the Limitation Law.
Historically, the City has generally abided by the provisions of the Limitation Law, although it is not required to do so
under State of Illinois law. If the Limitation Law were to apply in the future to the City, the limitations set forth
therein will not apply to any taxes levied by the City to pay the principal of and interest on the Bonds.
Truth in Taxation Law
Legislation known as the Truth in Taxation Law (the “Law”) limits the aggregate amount of certain taxes which
can be levied by, and extended for, a taxing district to 105% of the amount of taxes extended in the preceding year
unless specified notice, hearing and certification requirements are met by the taxing body. The express purpose of the
Law is to require published disclosure of, and hearing upon, an intention to adopt a levy in excess of the specified
levels. The provisions of the Law do not apply to any levies made to pay principal of and interest on the Bonds.
FINANCIAL INFORMATION
Budgetary Information
The City Council follows these procedures in establishing the budgetary and appropriations data reflected in its
financial statements:
1. The City Manager submits to the City Council a proposed operating budget for the fiscal year. The
operating budget includes proposed expenditures and estimated revenues.
2. Public budget and appropriations meetings are conducted by the City to obtain taxpayer comments.
3. The budget and the appropriation ordinance, which is 10% higher than the budget, are both legally
enacted through action of the City Council. Once enacted, the budget cannot be amended without
approval from the City Council. Funds may have expenditures in excess of budgeted amounts, but
legally may not have expenditures in excess of appropriations.
4. The legal level of budgetary control is the fund level. Management may make transfers of
appropriations within a fund. Any expenditures that exceed the total appropriations at the fund level
must be approved by the City Council.
5. Formal budgetary integration and legally adopted budgets are employed as a management control
device during the year for all Funds, through an internal reporting system. Such budgetary integration
permits the City's department managers to monitor actual revenues and expenditures relative to budgets
on an ongoing basis throughout the year. Formal encumbrance accounting is not used, and
appropriations not used by the end of the fiscal year lapse.
6. Budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP).
21 85
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
Investment Policy
The City is authorized to invest in the following types of securities under Illinois law and the City's investment
policy:
• Bonds, notes, certificates of indebtedness, treasury bills, or other securities which are guaranteed by the
full faith and credit of the United States of America;
• Bonds, notes, debentures, or other similar obligations of U.S. Government or its agencies; Interest
bearing bonds of any county, township, city, incorporated town, municipal corporation, or school
district, and the bonds shall be registered in the name of the municipality or held under a custodial
agreement at a bank, provided the bonds shall be rated at the time of purchase within the 4 highest
general classifications established by a rating service of nationally recognized expertise in rating bonds
of states and their political subdivisions;
• Interest-bearing savings accounts, interest-bearing certificates of deposit, interest-bearing deposits, or
any other investments constituting direct obligations of any bank as defined by the Illinois Banking Act
(205 ILCS 5/1 et seq.), provided, however, that such investments may be made only in banks which are
insured by the Federal Deposit Insurance Corporation;
• Commercial Paper - issuer must be a United States corporation with more than $500 million in assets,
rating must be within the highest tier (e.g., A-1, P-1, F-1, D-1, or higher) by two standard rating
services, must mature within 180 days of purchase, such purchases cannot exceed 10% of the
corporation's outstanding obligations, and such purchases cannot exceed one-third of funds;
• Money Market Mutual Funds - registered under the Investment Company Act of 1940 (15 U.S.C.A. §
80a-1 et seq.), provided the portfolio is limited to bonds, notes, certificates, treasury bills, or other
securities which are guaranteed by the full faith and credit of the federal government as to principal and
interest;
• Short term discount obligations of the Federal National Mortgage Association (established by or under
the National Housing Act (1201 U.S.C. 1701 et seq.), or in shares or other forms of securities legally
issuable by savings banks or savings and loan associations incorporated under the laws of Illinois or any
other state or under the laws of the United States, provided, however, that the shares or investment
certificates of such savings banks or savings and loan associations are insured by the Federal Deposit
Insurance Corporation;
• Dividend-bearing share accounts, share certificates accounts, or class of share accounts of a credit
union chartered under the laws of the State of Illinois or the laws of the United States; provided,
however, the principal office of the credit unions must be located within the State of Illinois; and,
provided further, that such investments may be made only in those credit unions the accounts of which
are insured by applicable law;
• The Public Treasurer's Investment Pool created under Section 17 of the State Treasurer Act (15 ILCS
505/17) or in a fund managed, operated, and administered by a bank, subsidiary of a bank, or
subsidiary of a bank holding company, or use the services of such an entity to hold and invest or advise
regarding the investment of any public funds; and
• Repurchase agreements of government securities having the meaning set out in the Government
Securities Act of 1986 (15 U.S.C.A. § 780-5) subject to the provisions of that Act and the regulations
issued thereunder, provided, however, that such government securities, unless registered or inscribed in
the name of the City, shall be purchased through banks or trust companies authorized to do business in
the State of Illinois; and such other repurchase agreements as are authorized in subsection (h) of Section
2 of the Public Funds Investment Act (30 ILCS 235/2). Repurchase agreements may be executed only
with approved financial institutions or broker/dealers meeting the City's established standards, which
shall include mutual execution of a Master Repurchase Agreement adopted by the City.
22 86
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
Financial Reports
The City’s financial statements are audited annually by certified public accountants. The City’s financial
statements are completed on a modified accrual basis of accounting consistent with generally accepted accounting
principles applicable to governmental entities. See APPENDIX A for more detail.
No Consent or Updated Information Requested of the Auditor
The tables and excerpts (collectively, the “Excerpted Financial Information”) contained in this “FINANCIAL
INFORMATION” section and in APPENDIX A are from the audited financial statements of the City, including the
audited financial statements for the fiscal year ended April 30, 2012 (the “2012 Audit”). The 2012 Audit has been
prepared by McGladrey & Pullen, LLP, Certified Public Accountants, Schaumburg, Illinois (the “Auditor”), and
approved by formal action of the City Council. The City has not requested the Auditor to update information contained
in the Excerpted Financial Information; nor has the City requested that the Auditor consent to the use of the Excerpted
Financial Information in this Official Statement. The Auditor also has not performed any procedures relating to the
Official Statement. Other than as expressly set forth in this Official Statement, the financial information contained in
the Excerpted Financial Information has not been updated since the date of the 2012 Audit. The inclusion of the
Excerpted Financial Information in this Official Statement in and of itself is not intended to demonstrate the fiscal
condition of the City since the date of the 2012 Audit. Questions or inquiries relating to financial information of the
City since the date of the 2012 Audit should be directed to the City.
Summary Financial Information
The following tables are summaries and do not purport to be the complete audits, copies of which are available
upon request. For its fiscal year ended April 30, 2013, the City expects an increase of approximately $997,484 in its
General Fund fund balance. The City has passed a balanced budget for its fiscal year ending April 30, 2014. To date,
revenues and expenditures are generally within budgeted amounts. See APPENDIX A for excerpts of the City’s 2012
fiscal year audit.
23 87
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
Statement of Net Assets
Audited as of April 30
2008 2009 2010 2011 2012
ASSETS:
Cash and Cash Equivalents ....................... $ 42,970,481 $ 36,056,218 $ 30,011,393 $ 33,813,543 $ 33,692,501
Investments ..................................... 2,912,800 2,035,329 2,630,338 3,186,896 3,235,374
Receivables (net):
Property Taxes ................................. 22,736,457 24,055,668 24,404,445 25,078,551 24,736,822
Other Taxes .................................... 277,339 456,364 406,768 251,534 208,533
Accounts ....................................... 658,638 525,447 688,124 675,160 1,226,319
Accrued Interest ............................... 0 0 0 0 0
Loans .......................................... 438,138 351,860 12,452 2,005,507 2,029,272
Other .......................................... 207,773 182,259 326,235 360,171 233,435
Due from Other Governments ...................... 1,966,683 1,800,697 2,054,055 1,818,930 2,239,891
Internal Balances ............................... (398,676) (476,139) (633,341) (647,503) (688,361)
Inventories ..................................... 121,142 271,735 253,818 230,212 351,225
Prepaids ........................................ 733,222 899,206 852,586 637,120 640,619
Deferred Charges - Bond Issuance Costs .......... 84,590 78,951 73,312 211,260 193,426
Net Pension Asset ............................... 859,028 931,740 1,001,631 1,035,811 1,318,752
Capital Assets:
Not Being Depreciated .......................... 100,971,025 133,910,019 113,935,309 112,388,983 112,447,582
Being Depreciated, Net ......................... 89,786,099 95,158,752 117,642,223 120,047,178 116,872,079
Total Assets .................................. $264,324,739 $296,238,106 $293,659,348 $301,093,353 $298,737,469
LIABILITIES:
Accounts Payable ................................ $ 1,913,433 $ 5,366,250 $ 2,219,924 $ 1,937,760 $ 1,147,747
Accrued Liabilities ............................. 1,750,760 1,865,577 1,492,553 1,271,302 1,212,431
Other Liabilities ............................... 0 0 0 0 0
Accrued Interest Payable ........................ 246,885 518,988 432,558 768,357 529,727
Due to Other Funds .............................. 0 0 0 0 0
Due to Fiduciary Funds .......................... 0 0 0 0 0
Retainage Payable ............................... 217,889 1,029,220 457,942 165,786 75,544
Deposits ........................................ 1,496,721 1,154,637 874,117 901,648 843,290
Unearned Revenue - Property Taxes ............... 22,736,457 24,055,668 24,404,445 25,078,551 24,736,822
Unearned Revenue - Other ........................ 2,130,436 2,116,754 1,984,283 1,990,775 2,826,200
Long Term Obligations:
Due within One Year ............................ 2,894,682 2,952,662 15,759,313 2,447,876 1,477,734
Due in More than One Year ...................... 25,884,058 34,221,848 24,717,411 40,633,600 38,958,362
Total Liabilities ............................. $ 59,271,321 $ 73,281,604 $ 72,342,546 $ 75,195,655 $ 71,807,857
NET ASSETS:
Investment in Capital Assets,
Net of Related Debt ............................ $172,325,675 $193,768,992 $193,225,047 $192,568,460 $190,779,593
Restricted For:
Capital Projects .............................. 1,148,103 564,338 77,276 1,426,107 5,024,844
Debt Service .................................. 2,708,268 2,632,215 2,839,264 2,040,469 1,786,492
Other Purposes ................................ 122,484 123,421 84,975 179,117 0
Culture and Recreation ......................... 0 0 0 0 3,543,895
Highways and Streets ........................... 0 0 0 0 285,530
Public Safety .................................. 0 0 0 0 399,690
Cemetery Purposes .............................. 0 0 0 0 3,749,480
Affordable Housing ............................. 0 0 0 0 852,136
Parking ........................................ 0 0 0 0 957,420
Unrestricted .................................... 28,748,888 25,867,536 25,090,240 29,683,545 19,550,532
Total Net Assets .............................. $205,053,418 $222,956,502 $221,316,802 $225,897,698 $226,929,612
24 88
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
Statement of Activities
Governmental Activities
Net (Expense) Revenue and Charges in Net Assets
Audited Fiscal Year Ended April 30
2008 2009 2010 2011 2012
PRIMARY GOVERNMENT:
Governmental Activities(1):
General Government ............................. $ (2,972,297) $ (1,798,896) $ (8,711,052) $ (3,873,970) $ (7,118,227)
Highways and Streets ........................... (7,173,330) (5,587,853) (6,817,832) (6,561,914) (6,156,640)
Sanitation ..................................... (2,015,308) (1,976,454) (2,079,215) (2,178,886) (2,487,243)
Culture and Recreation ......................... (2,424,581) (4,753,843) (5,412,015) (5,352,285) (5,792,084)
Public Safety .................................. (10,776,530) (11,029,008) (11,575,811) (11,463,000) (11,888,284)
Public Improvements and Other .................. 0 0 0 0 0
Interest on Long-Term Debt ..................... (808,253) (978,029) (1,097,805) (1,424,317) (1,420,087)
Total Governmental Activities ................. $(26,170,299) $(26,124,083) $(35,693,730) $(30,854,372) $(34,862,565)
General Revenues:
Property Taxes ................................. $ 22,324,863 $ 23,067,216 $ 24,383,716 $ 24,739,956 $ 25,428,378
Replacement Taxes .............................. 115,223 138,004 114,477 141,240 124,086
Sales Tax ...................................... 3,118,339 3,010,457 2,392,497 2,554,772 2,577,304
Income Tax ..................................... 2,175,196 2,018,177 1,762,425 1,849,046 1,938,686
Utility Tax .................................... 4,454,442 4,407,235 3,967,398 3,968,072 3,981,548
Real Estate Transfer Tax ....................... 1,984,052 962,840 878,925 1,279,935 1,215,407
Other Taxes .................................... 373,795 253,343 258,163 280,840 368,660
Gain on Sale of Capital Assets ................. 0 0 0 0 0
Investment Income .............................. 1,771,629 35,853 852,245 573,508 264,432
Other .......................................... 627,188 22,729 60,000 150,049 33,724
Transfers ....................................... (3,931) 10,111,313 (615,816) (102,150) (37,746)
Total ......................................... $ 36,940,796 $ 44,027,167 $ 34,054,030 $ 35,435,268 $ 35,894,479
Change in Net Assets ............................ $ 10,770,497 $ 17,903,084 $ (1,639,700) $ 4,580,896 $ 1,031,914
Net Assets - Beginning of Year .................. 194,282,921 205,053,418 222,956,502 221,316,802 225,897,698
Net Assets - End of Year ........................ $205,053,418 $222,956,502 $221,316,802 $225,897,698 $226,929,612
Note: (1) Expenses less Program Revenues of Charges for Services, Operating Grants, and Capital Grants.
General Fund
Balance Sheet
Audited as of April 30
2008 2009 2010 2011 2012
ASSETS:
Cash and Investments ............................ $11,247,740 $11,092,128 $10,554,698 $10,439,581 $11,986,385
Property Taxes Receivable ....................... 15,077,078 16,229,354 15,142,523 15,218,497 15,528,966
Other Receivables ............................... 1,336,816 1,308,227 1,048,895 2,850,874 2,645,029
Due from other Funds ............................ 17,914 0 968,480 485,562 0
All Other Assets ................................ 2,369,833 2,657,745 2,106,782 1,797,758 2,332,408
Total Assets .................................. $30,049,381 $31,287,454 $29,821,378 $30,792,272 $32,492,788
LIABILITIES AND FUND BALANCE:
Accounts Payable/Accrued Payroll ................ $ 658,109 $ 663,972 $ 709,991 $ 519,646 $ 474,997
Deferred Property Tax Revenues .................. 15,077,078 16,229,354 15,142,523 15,218,497 15,528,966
All Other Liabilities ........................... 3,687,562 3,557,307 3,082,576 2,826,110 2,770,812
Total Liabilities ............................. $19,422,749 $20,450,633 $18,935,090 $18,564,253 $18,774,775
Fund Balance:
Reserved ........................................ $ 1,041,187 $ 2,218,570 $ 1,071,068 $ 2,988,884 $ 0
Nonspecdable .................................... 0 0 0 0 2,159,403
Restricted ...................................... 0 0 0 0 957,420
Unreserved - Undesignated ...................... 9,585,445 8,618,251 9,815,220 9,239,135 10,601,190
Total Fund Balance ............................ $10,626,632 $10,836,821 $10,886,288 $12,228,019 $13,718,013
Total Liabilities and Fund Balance ............ $30,049,381 $31,287,454 $29,821,378 $30,792,272 $32,492,788
25 89
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
General Fund
Revenues and Expenditures(1)
Audited Fiscal Year Ended April 30
2008 2009 2010 2011 2012
REVENUES:
Taxes:
Property ....................................... $14,341,398 $15,295,625 $16,116,492 $14,865,362 $15,433,117
Other .......................................... 9,688,667 9,785,189 8,463,984 8,740,849 8,871,480
Intergovernmental Revenues ...................... 48,550 3,269 108,491 155,529 0
Grants and Contributions ........................ 0 0 0 0 21,715
Charges for Services ............................ 2,158,104 2,597,515 2,621,493 2,968,599 2,642,136
Licenses and Permits ............................ 2,345,931 2,117,774 2,135,888 2,246,336 2,475,739
Fines and Forfeitures ........................... 469,208 387,629 372,924 409,539 372,607
Investment Income ............................... 577,165 230,132 85,963 97,373 83,782
Other ........................................... 685,257 673,177 766,622 660,427 668,840
Total Revenues ................................ $30,314,280 $31,090,310 $30,671,857 $30,144,014 $30,569,416
EXPENDITURES:
Current:
General Government ............................. $9,260,158 $10,465,264 $ 9,809,117 $ 9,507,364 $ 9,130,298
Highways and Streets ........................... 2,332,972 2,567,220 2,402,436 2,449,911 2,139,656
Sanitation ..................................... 2,125,284 2,096,044 2,056,528 2,194,511 2,228,844
Culture and Recreation ......................... 1,276,044 1,361,839 1,514,409 0 0
Public Safety .................................. 11,856,670 12,547,425 12,708,152 12,985,873 13,378,659
Capital Outlay .................................. 86,751 51,267 255,717 57,690 31,190
Debt Service .................................... 103,080 99,275 117,071 5,032 0
Total Expenditures ............................ $27,040,959 $29,188,334 $28,863,430 $27,200,381 $26,908,647
Excess (Deficiency) of Revenues
Over Expenditures .............................. $ 3,273,321 $ 1,901,976 $ 1,808,427 $ 2,943,633 $ 3,660,769
Other Financing Sources (Uses):
Loan Proceeds ................................... $ 0 $ 0 $ 0 $ 0 $ 0
Sale of Capital Assets .......................... 950 0 0 0 0
Transfers In ................................... 233,948 1,013,925 0 0 0
Transfers Out .................................. (1,885,742) (2,705,712) (1,758,960) (1,601,902) (2,170,775)
Total Other Financing Sources and Uses, Net .... $(1,650,844) $(1,691,787) $(1,758,960) $(1,601,902) $(2,170,775)
Net Change in Fund Balance ...................... $ 1,622,477 $ 210,189 $ 49,467 $ 1,341,731 $ 1,489,994
Fund Balance - Beginning of Year ................ $ 9,004,155 $10,626,632 $10,836,821 $10,886,288 $12,228,019
Fund Balance - End of Year ...................... $10,626,632 $10,836,821 $10,886,288 $12,228,019 $13,718,013
Note: (1) This condensed financial information has been excerpted from the full Comprehensive Annual Financial Reports of
The City of Lake Forest. The full financial statements, together with the report of the City's independent
accountants, are available upon request. The General Corporate Fund is accounted for using the modified accrual
basis of accounting. Revenues are recognized when susceptible to accrual (both measurable and available),
Expenditures, other than interest on long-term debt, are recorded when the liability is incurred, if measurable.
Property taxes due within the current fiscal year and collected within the current fiscal year or within 60 days
of the end of the fiscal year are recorded as revenue. As a result, the current year tax levy, which has a payment
due date after the end of the current fiscal year, is not recorded as revenue but rather as a receivable with a
corresponding amount of deferred revenue.
EMPLOYEE RETIREMENT AND OTHER POSTEMPLOYMENT BENEFITS OBLIGATIONS
See APPENDIX D herein for a discussion of the City’s employee retirement and other postemployment
benefits obligations.
26 90
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
REGISTRATION, TRANSFER AND EXCHANGE
Registration
The registered owner of a Bond will be deemed and regarded as the absolute owner thereof for the purpose of
receiving payment of, or on account of, the principal of, premium, if any, or interest thereon and for all other purposes
whatsoever, and all such payments so made to such registered owner or upon his order shall be valid and effectual to
satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the City nor the
Bond Registrar will be affected by any notice to the contrary.
Transfers and Exchanges
The transfer of Bonds will be registrable only upon the registration books maintained by the City for that
purpose at the principal corporate trust office of the Bond Registrar, by the registered owner thereof or by his attorney
duly authorized in writing, upon surrender thereof together with an instrument of transfer satisfactory to the Bond
Registrar and duly executed by the registered owner or his duly authorized agent. Upon such surrender for registration
of transfer, the City will execute and the Bond Registrar will authenticate and deliver a new Bond or Bonds of any
authorized denominations, registered in the name of the transferee, and of the same series, aggregate principal amount,
maturity and interest rate as the surrendered Bond.
Bonds may be exchanged for an equal aggregate principal amount of Bonds of the same series, maturity and
interest rate and of any authorized denominations, upon surrender thereof as the principal corporate trust office of the
Bond Registrar with a written instrument of transfer satisfactory to the Bond Registrar, duly executed by the registered
owner or his duly authorized agent.
For every such exchange or registration of transfer of Bonds, the City or the Bond Registrar may make a
charge sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such
exchange or registration of transfer. No charge will be made in connection with such exchange or registration of
transfer to pay the cost of preparing each new Bond issued upon such exchange or registration of transfer.
TAX EXEMPTION
Summary of Bond Counsel Opinion
Katten Muchin Rosenman LLP, Bond Counsel, is of the opinion that under existing law, interest on the Bonds
is not includible in the gross income of the owners thereof for Federal income tax purposes. If there is continuing
compliance with the applicable requirements of the Internal Revenue Code of 1986 (the “Code”), Bond Counsel is of
the opinion that interest on the Bonds will continue to be excluded from the gross income of the owners thereof for
Federal income tax purposes. Bond Counsel is further of the opinion that the Bonds are not “private activity bonds”
within the meaning of Section 141(a) of the Code. Accordingly, interest on the Bonds is not an item of tax preference
for purposes of computing individual or corporate alternative minimum taxable income. However, interest on the Bonds
is includible in corporate earnings and profits and therefore must be taken into account when computing corporate
alternative minimum taxable income for tax purposes of the corporate alternative minimum tax. Interest on the Bonds
is not exempt from State of Illinois income taxes.
The Code contains certain requirements that must be satisfied from and after the date of issuance of the Bonds.
These requirements relate to the use and investment of the proceeds of the Bonds, the payment of certain amounts to the
United States, the security and source of payment of the Bonds and the use of property financed with the proceeds of
the Bonds. The City has covenanted in the Bond Ordinance to comply with these requirements.
27 91
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
Bonds Purchased at a Premium or a Discount
The difference (if any) between the initial price at which a substantial amount of each maturity of the Bonds is
sold to the public (the “Offering Price”) and the principal amount payable at maturity of such Bonds is given special
treatment for Federal income tax purposes. If the Offering Price is higher than the maturity value of a Bond, the
difference between the two is known as “bond premium”; if the Offering Price is lower than the maturity value of a
Bond, the difference between the two is known as “original issue discount”.
Bond premium and original issue discount are amortized over the term of a Bond on the basis of the owner’s
yield from the date of purchase to the date of maturity, compounded at the end of each accrual period of one year or
less with straight line interpolation between compounding dates, as provided more specifically in the Income Tax
Regulations. The amount of bond premium accruing during each period is treated as a reduction in the amount of tax-
exempt interest earned during such period and is subtracted from the owner’s tax basis in the Bond. The amount of
original issue discount accruing during each period is treated as interest that is excludable from the gross income of the
owner of such Bond for Federal income tax purposes, to the same extent and with the same limitations as current
interest, and is added to the owner’s tax basis in the Bond. A Bond’s adjusted tax basis is used to determine whether,
and to what extent, the owner realizes taxable gain or loss upon disposition of the Bond (whether by reason of sale,
acceleration, redemption prior to maturity or payment at maturity of the Bond).
Owners of Bonds should consult their own tax advisors with respect to the state and local tax consequences of
owning the Bonds. It is possible that under the applicable provisions governing the determination of state or local
income taxes, accrued interest on the Bonds may be deemed to be received in the year of accrual even though there will
not be a corresponding cash payment until a year later.
Exclusion From Gross Income Requirements
The Code sets forth certain requirements that must be satisfied on a continuing basis in order to preserve the
exclusion from gross income for Federal income tax purposes of interest on the Bonds. Among these requirements are
the following:
Limitations on Private Use. The Code includes limitations on the amount of Bonds proceeds that may be used
in the trade or business of, or used to make or finance loans to, persons other than governmental units.
Investment Restrictions. Except during certain “temporary periods,” proceeds of the Bonds and investment
earnings thereon (other than amounts held in a reasonably required reserve or replacement fund, if any, or as
part of “minor portion”) may generally not be invested in investments having a yield that is “materially higher”
(1/8 of one percent) than the yield on the Bonds.
Rebate of Arbitrage Profit. Unless the City qualifies for one of several exemptions, earnings from the
investment of the “gross proceeds” of the Bonds in excess of the earnings that would have been realized if such
investments had been made at a yield equal to the yield on the Bonds are required to be paid to the United
States at periodic intervals. For this purpose, the term “gross proceeds” includes the original proceeds of the
Bonds, amounts received as a result of investing such proceeds, and amounts to be used to pay debt service on
the Bonds.
Covenants to Comply. The City has covenanted in the Bond Ordinance to comply with the
requirements of the Code relating to the exclusion from gross income for Federal income tax purposes of
interest on the Bonds.
28 92
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
Risks of Non-Compliance
In the event that the City fails to comply with the requirements of the Code, interest on the Bonds may become
includible in the gross income of the owners thereof for Federal income tax purposes retroactive to the date of issue. In
such event, the Bond Ordinance requires neither acceleration of payment of principal of, or interest on, the Bonds nor
payment of any additional interest or penalties to the owners of the Bonds.
Federal Income Tax Consequences
Pursuant to Section 103 of the Code, interest on the Bonds is not includible in the gross income of the owners
thereof for Federal income tax purposes. However, the Code contains a number of other provisions relating to the
treatment of interest on the Bonds which may affect the taxation of certain types of owners, depending on their
particular tax situations. Some of the potentially applicable Federal income tax provisions are described in general
terms below. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS CONCERNING THE
PARTICULAR FEDERAL INCOME TAX CONSEQUENCES OF THEIR OWNERSHIP OF THE BONDS.
QUALIFIED TAX-EXEMPT OBLIGATIONS
Section 265(b)(3)(B) of the Code provides that certain issues designated or deemed as “qualified tax-exempt
obligations” and purchased by financial institutions (either from the issuer or in a secondary market transaction) may be
disregarded in computing the proportional disallowance of interest expense provided in such Section. In the Bond
Ordinance, the City has designated the Bonds as “qualified tax-exempt obligations”. In addition, as required by Section
265 of the Code, the City has represented that the reasonably anticipated amount of “tax-exempt obligations” that are
required to be taken into account under Section 265 of the Code and will be issued by the City and all subordinate
entities of the City during 2013 does not exceed $10,000,000, and has covenanted that it will not designate and issue
more than $10,000,000 aggregate principal amount of “tax-exempt obligations” during 2013. For purposes of the
foregoing sentence, the term “tax-exempt obligations” includes "qualified 501(c)(3) bonds" (as defined in Section 145
of the Code) but does not include other “private activity bonds” (as defined in Section 141(a) of the Code).
CONTINUING DISCLOSURE
In the Bond Ordinance, the City has covenanted and agreed, for the benefit of the beneficial owners of the
Bonds, to provide certain financial information and operating data relating to the City within 210 days after the close of
the City’s fiscal year (the “Annual Report”); and, in a timely manner, to provide notices of the occurrence of certain
enumerated events. The Annual Report will be filed by the City with the Municipal Securities Rulemaking Board (the
“MSRB”) for disclosures on its Electronic Municipal Market Access (“EMMA”) system. The information to be
contained in the Annual Report will consist of the annual audited financial statement of the City, and updated
information with respect to the statements in the Official Statement contained under the captions “Retailers’
Occupation, Service Occupation and Use Tax”, “DEBT INFORMATION”, “PROPERTY ASSESSMENT AND
TAX INFORMATION” and “FINANCIAL INFORMATION”. Each annual audited financial statement will
conform to generally accepted accounting principles applicable to governmental units and will be prepared in
accordance with standards of the Governmental Accounting Standards Board. If the audited financial statement is not
available, then an unaudited financial statement will be included in the Annual Report and the audited financial
statement will be filed promptly after it becomes available. The City, in a timely manner not in excess of ten business
days after the occurrence of the event, shall provide notice to the MSRB for disclosure on EMMA of any failure of the
City to provide any such report within the 210 day period and of the occurrence of any of the following events with
respect to the Bonds.
29 93
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
1. Principal and interest payment delinquencies
2. Non-payment related defaults, if material
3. Unscheduled draws on debt service reserves reflecting financial difficulties
4. Unscheduled draws on credit enhancements reflecting financial difficulties
5. Substitution of credit or liquidity providers, or their failure to perform
6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations
of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or
determinations with respect to the tax status of the security, or other material events affecting the tax
status of the security
7. Modifications to the rights of security holders, if material
8. Debt calls, if material, and tender offers
9. Defeasances
10. Release, substitution or sale of property securing repayment of the securities, if material
11. Rating changes
12. Tender offers
13. Bankruptcy, insolvency, receivership or similar event of the City*
14. The consummation of a merger, consolidation, or acquisition involving the City or the sale of all or
substantially all of the assets of the City, other than in the ordinary course of business, the entry into a
definitive agreement to undertake such an action or the termination of a definitive agreement relating to
any such actions, other than pursuant to its terms, if material
15. Appointment of a successor or additional trustee or the change of name of a trustee, if material.
The City has agreed to the foregoing undertakings in order to assist participating underwriters of the Bonds and
brokers, dealers and municipal securities dealers in complying with Securities and Exchange Commission Rule
15c2-12(b)(5) promulgated under the Securities Exchange Act of 1934. The City will provide the foregoing
information for so long as Rule 15c2-12(b)(5) is applicable to the Bonds and the City remains an “obligated person”
under the Rule with respect to the Bonds. No provision of the bond ordinance limits the remedies available to any
beneficial owner of the Bonds with respect to the enforcement of the continuing disclosure covenants of the City
described above. Failure to comply with the continuing disclosure covenants will not constitute an event of default
under the Bond Ordinance.
The City may amend the continuing disclosure undertakings contained in the Ordinance upon a change in
circumstances provided that (a) the undertakings, as amended, would have complied with the requirements of Rule
15(c)2-12(b)(5) at the time of this offering, after taking into account any amendments or interpretations of the Rule, as
well as any change in circumstances and (b) in the opinion of nationally recognized bond counsel selected by the City,
the amendment does not materially impair the interests of the beneficial owners of the Bonds.
∗ This event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the City in a
proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has
assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing
body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order
confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially
all of the assets or business of the City.
30 94
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
OPTIONAL REDEMPTION
The Bonds maturing on or after December 15, 2022, are optionally callable in whole or in part on any date on
or after December 15, 2021, at a price of par and accrued interest. If less than all the Bonds are called, they shall be
redeemed in such principal amounts and from such maturities as determined by the City and within any maturity by lot.
NOTICE OF REDEMPTION
Notice of the redemption of bonds shall be mailed not less than 30 days nor more than 60 days prior to the date
fixed for such redemption to the registered owners of bonds to be redeemed at their last addresses appearing on said
registration books. The bonds or portions thereof specified in said notice shall become due and payable at the
applicable redemption price on the redemption date therein designated, and if, on the redemption date, moneys for
payment of the redemption price of all the bonds or portions thereof to be redeemed, together with interest to the
redemption date, shall be available for such payment on said date, and if notice of redemption shall have been mailed as
aforesaid (and notwithstanding any defect therein or the lack of actual receipt thereof by any registered owner) then
from and after the redemption date interest on such bonds or portions thereof shall cease to accrue and become payable.
LITIGATION
There is no litigation of any nature now pending or threatened restraining or enjoining the issuance, sale,
execution or delivery of the Bonds, or in any way contesting or affecting the validity of the Bonds or any proceedings
of the City taken with respect to the issuance or sale thereof.
LEGAL MATTERS
Legal matters incident to the authorization, issuance and sale of the Bonds are subject to the unqualified
approving opinion of Katten Muchin Rosenman LLP, Chicago, Illinois, Bond Counsel, whose approving opinion will
be delivered with the Bonds. Bond Counsel has reviewed the statements in this Official Statement appearing under the
heading “TAX EXEMPTION” and is of the opinion that the statements contained under such headings are accurate
statements or summaries of the matters set forth therein and fairly present the information purported to be shown.
Except for the foregoing, however, Bond Counsel has not independently verified the accuracy or completeness of
statements and information contained in the Official Statement and does not assume any responsibility of the accuracy
or completeness of such statements and information.
The opinion of Bond Counsel and the descriptions of the tax law contained in this Official Statement are based
on statutes, judicial decisions, regulations, rulings and other official interpretations of law in existence on the date the
Bonds are issued. There can be no assurance that such law or the interpretation thereof will not be changed or that new
provisions of law will not be enacted or promulgated at any time while the Bonds are outstanding in a manner that
would adversely affect the value or the tax treatment of ownership of the Bonds.
OFFICIAL STATEMENT AUTHORIZATION
This Official Statement has been authorized for distribution to prospective purchasers of the Bonds. All
statements, information, and statistics herein are believed to be correct but are not guaranteed by the consultants or by
the City, and all expressions of opinion, whether or not so stated, are intended only as such.
31 95
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
INVESTMENT RATING
The City has supplied certain information and material concerning the Bonds and the City to the rating service
shown on the cover page, including certain information and materials which may not have been included in this Official
Statement, as part of its application for an investment rating on the Bonds. A rating reflects only the views of the rating
agency assigning such rating and an explanation of the significance of such rating may be obtained from such rating
agency. Generally, such rating service bases its rating on such information and material, and also on such
investigations, studies and assumptions that it may undertake independently. There is no assurance that such rating will
continue for any given period of time or that it may not be lowered or withdrawn entirely by such rating service if, in
its judgment, circumstances so warrant. Any such downward change in or withdrawal of such rating may have an
adverse effect on the secondary market price of the Bonds. An explanation of the significance of the investment rating
may be obtained from the rating agency: Moody’s Investors Service, 7 World Trade Center at 250 Greenwich Street,
New York, New York 10007, telephone 212-553-1658. The City will provide appropriate periodic credit information
to the rating service to maintain a rating on the Bonds.
DEFEASANCE AND PAYMENT OF BONDS
If the City shall pay or cause to be paid to the registered owners of the bonds, the principal, premium, if any,
and interest due or to become due thereon, at the times and in the manner stipulated therein and in the Bond Ordinance,
then the pledge of taxes, securities and funds hereby pledged and the covenants, agreements and other obligations of the
City to the registered owners and the beneficial owners of the bonds shall be discharged and satisfied.
Any bonds or interest installments appertaining thereto, whether at or prior to the maturity or the redemption
date of such bonds, shall be deemed to have been paid if (1) in case any such bonds are to be redeemed prior to the
maturity thereof, there shall have been taken all action necessary to call such bonds for redemption and notice of such
redemption shall have been duly given or provision shall have been made for the giving of such notice, and (2) there
shall have been deposited in trust with a bank, trust company or national banking association acting as fiduciary for
such purpose either (i) moneys in an amount which shall be sufficient, or (ii) “Federal Obligations” as defined below,
the principal of and the interest on which when due will provide moneys which, together with any moneys on deposit
with such fiduciary at the same time for such purpose, shall be sufficient, to pay when due the principal of, redemption
premium, if any, and interest due and to become due on said bonds on and prior to the applicable redemption date or
maturity date thereof.
The term “Federal Obligations” means (i) non-callable, direct obligations of the United States of America, (ii)
non-callable and non-prepayable, direct obligations of any agency of the United States of America, which are
unconditionally guaranteed by the United States of America as to full and timely payment of principal and interest, (iii)
non-callable, non-prepayable coupons or interest installments from the securities described in clause (i) or clause (ii)
which are stripped pursuant to programs of the Department of the Treasury of the United States of America, or (iv)
coupons or interest installments stripped from bonds of the Resolution Funding Corporation.
UNDERWRITING
The Bonds were offered for sale by the City at a public, competitive sale on September 16, 2013. The best bid
submitted at the sale was submitted by ____________________ (the “Underwriter”). The City awarded the contract
for sale of the Bonds to the Underwriter at a price of $___________. The Underwriter has represented to the City that
the Bonds have been subsequently re-offered to the public initially at the yields or prices set forth in the addendum to
this Official Statement.
32 96
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
*Subject to change.
FINANCIAL ADVISOR
The City has engaged Speer Financial, Inc. as financial advisor (the “Financial Advisor”) in connection with
the issuance and sale of the Bonds. The Financial Advisor will not participate in the underwriting of the Bonds. The
financial information included in the Official Statement has been compiled by the Financial Advisor. Such information
does not purport to be a review, audit or certified forecast of future events and may not conform with accounting
principles applicable to compilations of financial information. The Financial Advisor is not obligated to undertake any
independent verification of or to assume any responsibility for the accuracy, completeness or fairness of the information
contained in this Official Statement, nor is the Financial Advisor obligated by the City’s continuing disclosure
undertaking.
CERTIFICATION
We have examined this Official Statement dated September 4, 2013, for the $9,840,000* General Obligation
Refunding Bonds, Series 2013, believe it to be true and correct and will provide to the purchaser of the Bonds at the
time of delivery a certificate confirming to the purchaser that to the best of our knowledge and belief information in the
Official Statement was at the time of acceptance of the bid for the Bonds and, including any addenda thereto, was at the
time of delivery of the Bonds true and correct in all material respects and does not include any untrue statement of a
material fact, nor does it omit the statement of any material fact required to be stated therein, or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
/s/ DONALD P. SCHOENHEIDER /s/ ROBERT R. KIELY, JR.
Mayor City Manager
CITY OF LAKE FOREST CITY OF LAKE FOREST
Lake County, Illinois Lake County, Illinois
*Subject to change.
33 97
APPENDIX A
CITY OF LAKE FOREST
LAKE COUNTY, ILLINOIS
EXCERPTS OF FISCAL YEAR 2012 AUDITED FINANCIAL STATEMENTS
98
16
CITY OF LAKE FOREST, ILLINOIS Exhibit A-1Statement of Net Assets
April 30, 2012
Component
Primary Government unit
Governmental Business-type Lake Forest
Activities Activities Total Library
Assets
Cash and cash equivalents 33,692,501 $ 7,692,773 $ 41,385,274 $ 1,230,944 $
Investments 3,235,374 - 3,235,374 -
Receivables (net):
Property taxes 24,736,822 -
24,736,822 3,486,867
Other taxes 208,533 - 208,533
-
Accounts 1,226,319 1,219,968 2,446,287 -
Accrued interest -
3,332 3,332
-
Loans 2,029,272 -
2,029,272 -
Other 233,435 213
233,648 -
Due from other governments 2,239,891 -
2,239,891 -
Internal balances (688,361) 688,361 -
-
Inventories 351,225 74,555 425,780
-
Prepaids 640,619 184,585 825,204 -
Deferred charges – bond issuance costs 193,426
98,932 292,358
-
Net pension asset 1,318,752
-
1,318,752
-
Capital assets:
Not being depreciated 112,447,582 459,369 112,906,951 219,000
Being depreciated, net 116,872,079 58,313,014 175,185,093 3,028,554
Total assets 298,737,469 68,735,102 367,472,571 7,965,365
Liabilities
Accounts payable 1,147,747 195,851 1,343,598 112,189
Accrued liabilities 1,212,431 40,084 1,252,515 38,720
Accrued interest payable 529,727
216,234 745,961
-
Retainage payable 75,544
-
75,544
-
Deposits 843,290 - 843,290 -
Unearned revenue - property taxes 24,736,822 -
24,736,822 3,486,867
Unearned revenue - other 2,826,200
404,988
3,231,188 -
Long-term obligations:
Due within one year 1,477,734 1,749,000 3,226,734 31,660
Due in more than one year 38,958,362 20,457,133 59,415,495 166,373
Total liabilities 71,807,857 23,063,290 94,871,147
3,835,809
Net Assets
Invested in capital assets, net of
related debt 190,779,593 36,753,670 227,533,263 3,225,894
Restricted for:
Culture and recreation 3,543,895 - 3,543,895 -
Highways and streets 285,530 - 285,530 -
Public safety 399,690 - 399,690
-
Cemetery purposes 3,749,480 - 3,749,480 -
Affordable housing 852,136 - 852,136 -
Capital projects 5,024,844
-
5,024,844 -
Debt service 1,786,492
-
1,786,492
-
Parking 957,420 - 957,420 -
Unrestricted 19,550,532
8,918,142 28,468,674 903,662
Total net assets 226,929,612
$ 45,671,812 $ 272,601,424 $ 4,129,556 $
See accompanying notes to financial statements.
A-1 99
17 CITY OF LAKE FOREST, ILLINOISExhibit A-2Statement of ActivitiesFor the Year Ended April 30, 2012Program Revenues Net (Expense) Revenue and Changes in Net AssetsOperating Capital Primary Government Component UnitCharges for Grants and Grants and Governmental Business-type Lake ForestExpenses Services Contributions Contributions Activities Activities Total LibraryFunctions/ProgramPrimary government:Governmental activities:General government 12,080,189 $ 4,771,863 $ 190,099 $ -$ (7,118,227) $ -$ (7,118,227) $ Highways and streets 8,304,860 846,366 1,020,005 281,849 (6,156,640) - (6,156,640) Sanitation 2,568,820 81,577 - - (2,487,243) - (2,487,243) Culture and recreation 9,469,832 3,392,303 206,887 78,558 (5,792,084) - (5,792,084) Public safety 13,583,116 1,678,032 16,800 - (11,888,284) - (11,888,284) Interest on long-term debt 1,420,087 - - - (1,420,087) - (1,420,087) Total governmental activities 47,426,904 10,770,141 1,433,791 360,407 (34,862,565) - (34,862,565) Business-type activities:Waterworks and sewerage 7,985,394 7,477,637 - - - (507,757) (507,757) Golf 1,371,380 1,238,016 - - - (133,364) (133,364) Total business-type activities 9,356,774 8,715,653 - - - (641,121) (641,121) Total primary government 56,783,678 $ 19,485,794 $ 1,433,791 $ 360,407 $ (34,862,565) (641,121) (35,503,686) Component UnitLake Forest Library 3,703,477 $ 60,300 $ 45,729 $ -$ (3,597,448) $ General revenues and transfers:General revenuesProperty taxes25,428,378 - 25,428,378 3,455,432 Replacement taxes124,086 - 124,086 28,880 Sales tax2,577,304 - 2,577,304 - Income tax1,938,686 - 1,938,686 - Utility tax3,981,548 - 3,981,548 - Real estate transfer tax1,215,407 - 1,215,407 - Other taxes368,660 - 368,660 - Investment income264,432 51,376 315,808 12,795 Other 33,724 - 33,724 - Transfers(37,746) 37,746 - - Total general revenues and transfers35,894,479 89,122 35,983,601 3,497,107 Change in net assets1,031,914 (551,999) 479,915 (100,341) Net assets – beginning of year225,897,698 46,223,811 272,121,509 4,229,897 Net assets – end of year226,929,612 $ 45,671,812 $ 272,601,424 $ 4,129,556 $ See accompanying notes to financial statements. A-2 100
CITY OF LAKE FOREST, ILLINOISExhibit A-3Balance SheetGovernmental FundsApril 30, 2012Parks and NonmajorTotalGeneral Recreation Governmental Governmental AssetsFundFundFundsFundsCash and cash equivalents11,986,385$3,861,742$11,617,985 $27,466,112$Investments--3,235,374 3,235,374Receivables (net of allowance for uncollectibles):Property taxes15,528,966 4,903,664 4,304,192 24,736,822Other taxes208,533-- 208,533Accounts341,334 53,136831,849 1,226,319Loans2,029,272-- 2,029,272Other65,890-107,004 172,894Due from other governments2,202,277-37,614 2,239,891Due from other funds-29,915- 29,915Due from fiduciary funds--54,349 54,349Inventory91,896-- 91,896Prepaids38,235-43,333 81,568Total assets32,492,788$8,848,457$20,231,700 $61,572,945$Liabilities and Fund BalancesLiabilities:Accounts payable474,997$220,473$168,909 $864,379$Accrued liabilities570,486 90,01413,480 673,980Due to other funds--29,915 29,915Retainage payable--75,544 75,544Deposits830,7902,50010,000 843,290Unearned revenue:Property taxes15,528,9664,903,664 4,304,192 24,736,822 Other1,369,536 652,890801,849 2,824,275Total liabilities18,774,775 5,869,541 5,403,889 30,048,205Fund balances:Nonspendable2,159,403-43,333 2,202,736Restricted957,420 2,978,916 13,192,878 17,129,214Assigned--1,591,600 1,591,600Unassigned10,601,190-- 10,601,190 Total fund balances13,718,013 2,978,916 14,827,811 31,524,740Total liabilities and fund balances32,492,788$8,848,457$20,231,700 $61,572,945$See accompanying notes to financial statements.Exhibit A-4CITY OF LAKE FOREST, ILLINOISReconciliation of the Governmental Funds Balance Sheetto the Statement of Net AssetsApril 30, 2012Total fund balances – governmental funds 31,524,740 $ Amounts reported for governmental activities in the statement of net assets are different because:Bond costs of issuance are capitalized at the government wide level and amortized over the life of the related bonds. 193,426 Net pension asset recorded in governmental activities is not a financial resource and therefore is not reported in the funds.1,318,752 Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. Those assets consist of:Land and land improvements45,497,634 $Land-infrastructure66,740,770 Construction in progress209,178 Infrastructure, net of $113,320,214 in accumulated depreciation 67,733,640 Buildings, net of $9,057,013 in accumulated depreciation23,080,744 Improvements, net of $8,171,439 in accumulated depreciation21,402,582 Machinery and equipment, net of $10,009,866 in accumulated depreciation4,617,373 Total capital assets, net229,281,921 Long-term liabilities applicable to the City’s governmental activities are notdue and payable in the current period and accordingly are not reportedas fund liabilities. Interest on long-term debt is not accrued ingovernmental funds, but rather is recognized as an expenditure when due. All liabilities – both current and long-term – are reported in the statement of net assets. Balances at year-end are:Accrued interest on bonds(529,727) $ Net OPEB obligation(168,888) General obligation bonds(38,580,882) (Premium) discount on general obligation bonds(238,510) Deferred amounts on refunding general obligation bonds279,324 Compensated absences(1,668,093) Total long-term obligations(40,906,776) Internal service funds are used by management to charge the costs ofinsurance and automotive services to individual funds. The assets and liabilities of the internal service funds are included in governmentalactivities in the statement of net assets.5,517,549 Net assets of governmental activities226,929,612 $See accompanying notes to financial statements.A-3 101
CITY OF LAKE FOREST, ILLINOISExhibit A-5Statement of Revenues, Expenditures, and Changes in Fund BalancesGovernmental FundsFor the Year Ended April 30, 2012Parks and Nonmajor TotalGeneral Recreation Governmental Governmental Fund Fund Funds FundsTaxes:Property15,433,117 $4,879,517 $ 5,115,744 $ 25,428,378 $ Other8,871,480 38,804 1,295,407 10,205,691 Intergovernmental revenues- - 589,960 589,960 Grants and contributions21,715 177,912 840,110 1,039,737 Charges for services2,642,136 2,923,527 1,463,137 7,028,800 Licenses and permits2,475,739 - - 2,475,739 Fines and forfeitures372,607 - - 372,607 Investment income 83,782 30,090 111,353 225,225 Miscellaneous revenue668,840 40,513 21,460 730,813 Total revenues30,569,416 8,090,363 9,437,171 48,096,950 Current:General government9,130,298 - 1,182,733 10,313,031 Highways and streets2,139,656 - - 2,139,656 Sanitation2,228,844 - - 2,228,844 Culture and recreation- 7,859,901 603,646 8,463,547 Public safety13,378,659 - 345,142 13,723,801 Capital outlay31,190 201,262 6,409,471 6,641,923 Debt service:Principal retirement- - 2,531,876 2,531,876 Interest- - 1,667,372 1,667,372 Total expenditures26,908,647 8,061,163 12,740,240 47,710,050 Excess (deficiency) of revenues over expenditures3,660,769 29,200 (3,303,069) 386,900 Other financing sources (uses):Proceeds from capital asset sales- - 34,055 34,055 Debt issuance - bonds- - 5,690,000 5,690,000 Premium on bonds- - 120,828 120,828 Transfer to escrow agent- - (5,769,025) (5,769,025) Transfers in- 323,000 1,973,270 2,296,270 Transfers out(2,170,775) (38,000) (125,241) (2,334,016) Total other financing sources(uses)(2,170,775) 285,000 1,923,887 38,112 Net change in fund balances1,489,994 314,200 (1,379,182) 425,012 Fund balances – beginning of year12,228,019 2,664,716 16,206,993 31,099,728 Fund balances – end of year13,718,013 $2,978,916 $ 14,827,811 $ 31,524,740 $ See accompanying notes to financial statements.Revenues:Expenditures:CITY OF LAKE FOREST, ILLINOISExhibit A-6Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of ActivitiesFor the Year Ended April 30, 2012Net changes in fund balances—total governmental funds 425,012 $Amounts reported for governmental activities in the statement of activities aredifferent because:Governmental funds report capital outlays as expenditures. However, in the statementof activities the cost of those assets is allocated over their estimated useful livesand reported as depreciation expense. This is the amount by which depreciation expense ($6,270,360) exceeded capital outlay($2,838,176) in the current period. (3,432,184) Contributions of capital assets are not recorded in governmental funds, but are recorded as revenues in the statement of activities. 360,407 Proceeds from sales of capital assets are recorded as revenue in governmental funds,however the gain (loss) on sale is recorded in the statement of activities. (19,223) Bond proceeds are reported as financing sources in governmental funds and thuscontribute to the change in fund balance. In the statement of net assets, however,issuing debt increases long-term liabilities and does not affect the statement ofactivities. Similarly, repayment of principal is an expenditure in the governmentalfunds but reduces the liability in the statement of net assets. Debt issuance (5,690,000) $Debt premiums on issuance (120,828) Debt issuance costs 37,230 Repayments:General obligation bonds 2,531,876 Payments to escrow agent 5,769,025 Net adjustment2,527,303 Under the modified accrual basis of accounting used in the governmental funds,expenditures are not recognized for transactions that are not normally paid with expendable available financial resources. In the statement of activities,however, which is presented on the accrual basis, expenses and liabilitiesare reported regardless of when financial resources are available. In addition, interest on long-term debt is not recognized under the modified accrualbasis of accounting until due, rather than as it accrues.Increase in net pension asset 282,941 $Increase in OPEB obligation (34,562) Decrease in accrued interest payable 238,630 Amortization of bond deferred amounts, premiums and discounts 26,489 Amortization of bond issuance costs (55,064) Decrease in compensated absences 149,725 608,159 The net revenue of certain activities of internal service funds is reported with governmental activities.562,440 Change in net assets of governmental activities – statement of activities 1,031,914 $See accompanying notes to financial statements.A-4 102
CITY OF LAKE FOREST, ILLINOISExhibit A-7Statement of Net AssetsProprietary FundsApril 30, 2012Nonmajor - GovernmentalWaterworks Deerpath Total Activities—and Sewerage Golf Course Enterprise Internal ServiceAssets Fund Fund Funds FundsCurrent assets:Cash and cash equivalents 7,033,715 $ 659,058 $ 7,692,773 $ 6,226,389 $ Receivables:Accounts receivable 1,219,968 - 1,219,968 - Accrued interest3,332 - 3,332 - Other213 - 213 6,192 Inventories- 74,555 74,555 259,329 Prepaid expenses184,585 - 184,585 559,051 Total current assets8,441,813 733,613 9,175,426 7,050,961 Noncurrent assets:Deferred charges – bond issuance costs94,335 4,597 98,932 - Capital assets:Not being depreciated363,852 95,517 459,369 - Being depreciated, net of accumulated depreciation56,606,385 1,706,629 58,313,014 37,740 Total capital assets, net56,970,237 1,802,146 58,772,383 37,740 Total noncurrent assets57,064,572 1,806,743 58,871,315 37,740 Total assets65,506,385 2,540,356 68,046,741 7,088,701 LiabilitiesCurrent liabilities:Accounts payable138,402 57,449 195,851 283,368 Accrued liabilities27,466 12,618 40,084 538,451 Accrued interest payable206,040 10,194 216,234 - Unearned revenue88,647 316,341 404,988 1,925 Current portion of long-term obligations:General obligation bonds1,660,000 84,000 1,744,000 - Accrued compensated absences4,181 819 5,000 3,418 Total current liabilities2,124,736 481,421 2,606,157 827,162 Noncurrent liabilities:General obligation bonds payable (net of unamortized discounts)19,339,033 935,680 20,274,713 - Accrued compensated absences152,539 29,881 182,420 55,629 Total noncurrent liabilities 19,491,572 965,561 20,457,133 55,629 Total liabilities21,616,308 1,446,982 23,063,290 882,791 Net AssetsInvested in capital assets, net of related debt35,971,204 782,466 36,753,670 37,740 Unrestricted7,918,873 310,908 8,229,781 6,168,170 Total net assets43,890,077 $ 1,093,374 $44,983,451 6,205,910 $ Adjustment to reflect the consolidation of internal service fund activities relatedto enterprise funds.688,361 Net assets of business-type activities reported in the government-wide statement of net assets.45,671,812 $See accompanying notes to financial statements.Business-type Activities – Enterprise FundsCITY OF LAKE FOREST, ILLINOISExhibit A-8Statement of Revenues, Expenses, and Changes in Fund Net AssetsProprietary FundsFor the Year Ended April 30, 2012Nonmajor - GovernmentalWaterworks Deerpath Total Activities—and Sewerage Golf Course Enterprise Internal ServiceFundFund FundsFundsOperating revenues:Charges for services7,370,268 $ 1,232,354 $ 8,602,622 $ 7,886,792 $ Connection fees82,034 - 82,034 - Miscellaneous25,335 5,662 30,997 - Total operating revenues7,477,637 1,238,016 8,715,653 7,886,792 Operating expenses:General and administrative2,123,940 653,457 2,777,397 7,290,506 Operations and maintenance2,692,105 508,195 3,200,300 - Capital outlay- 9,800 9,800 - Depreciation and amortization2,597,198 178,422 2,775,620 4,804 Total operating expenses7,413,243 1,349,874 8,763,117 7,295,310 Operating income (loss) 64,394 (111,858) (47,464) 591,482 Nonoperating revenues (expenses):Investment income 47,456 3,920 51,376 39,207 Interest expense(640,400) (21,506) (661,906) - Total nonoperating revenues (expenses)(592,944) (17,586) (610,530) 39,207 Increase (decrease) in net assetsbefore transfers (528,550) (129,444) (657,994) 630,689 Transfers in- 39,000 39,000 - Transfers out(1,254) - (1,254) - Change in net assets(529,804) (90,444) (620,248) 630,689 Net assets – beginning of year44,419,881 1,183,818 45,603,699 5,575,221 Net assets – end of year43,890,077 $ 1,093,374 $ 44,983,451 6,205,910 $ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds68,249 Change in net assets of business-type activities reported in the government-wide statement of activities(551,999) $ See accompanying notes to financial statements.Business-type Activities – Enterprise FundsA-5 103
CITY OF LAKE FOREST, ILLINOISExhibit A-9Statement of Cash FlowsProprietary FundsFor the Year Ended April 30, 2012Nonmajor - GovernmentalWaterworks Deerpath Total Activities -and Sewerage Golf Course Enterprise Internal ServiceFund Fund Funds FundsCash flows from operating activities:Receipts from customers 7,406,788 $ 1,291,131 $ 8,697,919 $ -$ Receipts from miscellaneous revenue 25,410 5,662 31,072 - Receipts from interfund services provided- - - 7,978,643 Payments to suppliers(2,821,937) (556,024) (3,377,961) (6,974,996) Payments to employees(2,247,738) (664,895) (2,912,633) (648,484) Net cash provided by operating activities2,362,523 75,874 2,438,397 355,163 Cash flows from noncapital financing activities:Transfer from other funds- 39,000 39,000 - Transfer to other funds(1,254) - (1,254) - Net cash provided (used) by noncapital financingactivities(1,254) 39,000 37,746 - Cash flows from capital and related financing activities:Purchases of capital assets(391,454) - (391,454) - Bond proceeds20,984,640 1,010,324 21,994,964 - Payment to escrow agent(20,867,897) (1,005,294) (21,873,191) - Issuance costs paid(103,215) (4,839) (108,054) - Principal paid on capital debt(1,568,500) (82,500) (1,651,000) - Interest paid on capital debt(650,671) (19,583) (670,254) - Net cash used in capital and related financing activities(2,597,097) (101,892) (2,698,989) - Cash flows from investing activities:Interest and dividends received47,456 3,920 51,376 39,207 Net increase (decrease) in cash and cash equivalents(188,372) 16,902 (171,470) 394,370 Cash and cash equivalents – beginning of year7,222,087 642,156 7,864,243 5,832,019 Cash and cash equivalents – end of year7,033,715 $ 659,058 $ 7,692,773 $ 6,226,389 $ (Continued)Business-type Activities – Enterprise FundsCITY OF LAKE FOREST, ILLINOISExhibit A-9, ContinuedStatement of Cash Flows (Continued)Proprietary FundsFor the Year Ended April 30, 2012Nonmajor - GovernmentalWaterworks Deerpath Total Activities—and Sewerage Golf Course Enterprise Internal ServiceFund Fund Funds FundsReconciliation of operating income to net cash provided by operating activities:Operating income (loss)64,394 $ (111,858) $(47,464) $ 591,482 $ Adjustments to reconcile operating income (loss) to net cash provided by operating activities:Depreciation expense2,597,198 178,422 2,775,620 4,804 Changes in assets and liabilities:Water sales receivable(83,459) - (83,459) - Accounts receivable- - - 89,926 Other receivables75 8,091 8,166 - Other assets- (46,907) (46,907) 18,662 Due from other funds22,900 - 22,900 - Prepaid expenses(184,585) - (184,585) - Accounts payable19,308 12,203 31,511 (1,258) Accrued liabilities(1,378) 828 (550) (51,586) Retainage payable(25,000) - (25,000) - Unearned revenue15,045 50,686 65,731 1,925 Compensated absences(61,975) (11,991) (73,966) 7,040 Due to other funds- (3,600) (3,600) - Other liabilities- - - (305,832) Total adjustments2,298,129 187,732 2,485,861 (236,319) Net cash provided by operating activities2,362,523 $ 75,874 $ 2,438,397 $ 355,163$ See accompanying notes to financial statements.Business-type Activities – Enterprise FundsA-6 104
Exhibit A-10Pension Private Trust Purpose AgencyAssetsFunds Trust Fund FundCash and cash equivalents2,221,950 $ 9,815 $ 60,174 $ Investments:U.S. Treasury obligations13,652,408 - - U.S. Government agencies7,456,627 - - Municipal and corporate bonds2,715,112 105,831 - Common stock2,074,351 383,212 - Equity mutual funds20,808,846 - - Other receivables111,489 1,978 - Prepaid expenses11,500 - - Total assets49,052,283 500,836 60,174 LiabilitiesAccounts payable21,888 - - Due to other funds- 54,349 - Due to special assessment districts- - 60,174 Total liabilities21,888 54,349 60,174 Net AssetsHeld in trust for pension trust and other purposes49,030,395 $ 446,487 $ -$ See accompanying notes to financial statements.CITY OF LAKE FOREST, ILLINOISStatement of Fiduciary Net AssetsFiduciary FundsApril 30, 2012Exhibit A-11Pension Private Trust PurposeFunds Trust FundAdditions:Contributions:Employer 2,498,372 $-$Employee 616,623 -Total contributions 3,114,995 -Interest income 1,027,637 10,376Net appreciation (depreciation) in fair value of investments 1,035,459 (14,201) Less investment expenses(178,818) -Net investment income 1,884,278 (3,825) Total additions4,999,273 (3,825) Deductions:Pension benefits and refunds3,146,275 -Other administrative expenses11,600 31,540Total deductions3,157,875 31,540Change in net assets1,841,398 (35,365) Net assets held in trust at beginning of year47,188,997 481,852Net assets held in trust at end of year49,030,395 $446,487$See accompanying notes to financial statements.CITY OF LAKE FOREST, ILLINOISStatement of Changes in Fiduciary Net AssetsFiduciary FundsFor the Year Ended April 30, 2012A-7 105
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 Note 1. Summary of Significant Accounting Policies The City of Lake Forest, Illinois (City) was incorporated under a charter granted by the Illinois State Legislature in 1861 and amended in 1869. The City is a home-rule community that operates under a City Council-Manager form of government. The City provides many services to residents including police and fire protection, water and sewers, recreation, refuse collection, a senior center, public library, a cemetery, and a golf course. The accounting policies of the City conform to accounting principles generally accepted in the United States of America as applicable to governmental units. The following is a summary of the more significant policies. (a) Reporting Entity As defined by generally accepted accounting principles (GAAP) established by the Governmental Accounting Standards Board (GASB), the financial reporting entity consists of the primary government, as well as its component units, which are legally separate organizations for which the elected officials of the primary government are financially accountable. Financial accountability is defined as: (1) Appointment of a voting majority of the component unit’s board, and either (a) the ability to impose will by the primary government, or (b) the possibility that the component unit will provide a financial benefit to or impose a financial burden on the primary government; or (2) Fiscal dependency on the primary government. The accompanying financial statements present the City of Lake Forest (the primary government) and its component unit. The financial data of the component unit are included in the City’s reporting entity because of the significance of its operational or financial relationship with the City. Discretely Presented Component Unit Discretely presented component units are entities that are legally separate from the City, but for which the City is financially accountable, or whose relationship with the City are such that exclusion would cause the City’s statements to be misleading or incomplete. The City’s component unit is reported in a separate column to emphasize that it is legally separate from the City. Lake Forest Library (Library) – The Library is governed by a seven-member Board of Trustees appointed by the Mayor of the City. The Library is financially accountable to the City as the City’s approval is needed for the Library to issue bonded debt. Complete financial statements of the Library are available at the City’s Administrative Office, 800 North Field Drive, Lake Forest, Illinois 60045. The Library follows the same accounting policies as the City. (b) Basis of Presentation Government-wide Financial Statements. The government-wide statement of net assets and statement of activities report the overall financial activity of the City, excluding fiduciary activities. Eliminations have been made to minimize the double-counting of internal activities of the City. These statements distinguish between the governmental and business-type activities of the City. However, interfund services provided for and used are not eliminated in the process of consolidation. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties. CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 The statement of activities presents a comparison between direct expenses and program revenues for the different business-type activities of the City and for each function of the City’s governmental activities. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. Fund Financial Statements. The fund financial statements provide information about the City’s funds, including its fiduciary funds. Separate statements for each fund category ʊ governmental, proprietary, and fiduciary ʊ are presented. The emphasis on fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. The City reports the following major governmental funds: General Fund – This is the City’s primary operating fund. It accounts for all financial resources of the City, except those required to be accounted for in another fund. The services which are administered by the City and accounted for in the General Fund include, among others, City Council, Finance, Administration, Police, Fire and Public Works. Parks and Recreation Fund – This fund accounts for the maintenance of the parks and recreation programs. Services include a fitness center, dance academy, and a variety of other indoor and outdoor programs. The City reports the following major proprietary fund: Waterworks and Sewerage Fund – This fund accounts for the provision of water and sewer services to the residents of the City and Delmar Woods Subdivision. Additionally, the City reports the following fund types: Internal Service – These funds account for the self-insured medical and dental benefits for City employees, the costs of liability insurance, and for the costs of operating a maintenance and repair facility for automotive and other equipment used by the City departments. Pension Trust Funds – These funds account for the accumulation of resources to be used for disability or retirement annuity payments to uniformed police and fire department personnel at appropriate amounts and times in the future. Private Purpose Trust Fund – This fund is used to account for monies provided by private donations on which the investment earnings are expected to be used for the maintenance of each individual’s cemetery plot.Agency Fund – This fund is custodial and accounts for amounts held for special assessment districts. A-8 106
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 (c) Basis of AccountingThe government-wide, proprietary, and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, except for agency funds which have no measurement focus. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flow takes place. Non-exchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, grants, entitlements, and donations. On an accrual basis, revenues from property taxes are recognized in the period for which the levy is intended to finance, which is the year after the taxes are levied. For example, the 2010 property tax levy is recognized as revenue for the year ended April 30, 2012. Revenue from grants and other contributions are recognized in the fiscal year in which all eligibility requirements imposed by the provider have been met. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the fiscal year when use is first permitted; matching requirements, in which the City must provide local resources to be used for a specified purpose; and expenditure requirements, in which the resources are provided to the City on a reimbursement basis. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues, except for property taxes, to be available if they are collected within 90 days of the end of the current fiscal period. Revenues for property taxes are considered to be available if they are collected within 60 days of the end of the current fiscal year. Expenditures generally are recorded when the liability is incurred, as under accrual accounting. However, principal and interest on long-term debt, claims and judgments, and compensated absences are recorded only when payment is due. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of long-term debt and acquisitions under capital leases are reported as other financing sources. Significant revenue sources which are susceptible to accrual include property taxes, miscellaneous taxes, charges for services, grants, and investment income. All other revenue sources including fines and forfeitures, inspection fees, and recreation fees are considered to be measurable and available only when cash is received. Proprietary fund revenues are classified as either operating or nonoperating. Operating revenues and expenses generally result from providing services in connection with the proprietary fund’s principal ongoing operations. Operating revenue includes activities that have characteristics of exchange transactions including charges for services. Non-operating revenue includes activities that have the characteristics of non-exchange transactions, such as most grants and subsidies. Nonoperating revenues also include investment income. Nonoperating expenses include interest expense. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989 generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. The City also has the option of following subsequent private-sector guidance for its business-type activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private-sector guidance. (d) Cash and Cash Equivalents The City considers all highly liquid investments with a maturity date within three months of the date acquired to be cash equivalents. CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 (e) Investments Investments are reported at fair value based upon quoted market prices. The City is authorized to invest in the following types of securities under Illinois law and the City’s investment policy: • Bonds, notes, certificates of indebtedness, treasury bills, or other securities which areguaranteed by the full faith and credit of the United States of America; • Bonds, notes, debentures, or other similar obligations of U.S. Government or its agencies; • Interest bearing bonds of any county, township, city, incorporated town, municipalcorporation, or school district, and the bonds shall be registered in the name of themunicipality or held under a custodial agreement at a bank, provided the bonds shall berated at the time of purchase within the 4 highest general classifications established by arating service of nationally recognized expertise in rating bonds of states and their political subdivisions; • Interest-bearing savings accounts, interest-bearing certificates of deposit, interest-bearing deposits, or any other investments constituting direct obligations of any bank as definedby the Illinois Banking Act (205 ILCS 5/1 et seq.), provided, however, that suchinvestments may be made only in banks which are insured by the Federal DepositInsurance Corporation; • Commercial Paper – issuer must be a United States corporation with more than $500million in assets, rating must be within the highest tier (e.g., A-1, P-1, F-1, D-1, or higher) by two standard rating services, must mature within 180 days of purchase, suchpurchases cannot exceed 10% of the corporation’s outstanding obligations, and suchpurchases cannot exceed one-third of funds; • Money Market Mutual Funds – registered under the Investment Company Act of 1940 (15 U.S.C.A. § 80a-1 et seq.), provided the portfolio is limited to bonds, notes, certificates,treasury bills, or other securities which are guaranteed by the full faith and credit of thefederal government as to principal and interest; • Short term discount obligations of the Federal National Mortgage Association (established by or under the National Housing Act (1201 U.S.C. 1701 et seq.)), or in shares or otherforms of securities legally issuable by savings banks or savings and loan associationsincorporated under the laws of Illinois or any other state or under the laws of the UnitedStates, provided, however, that the shares or investment certificates of such savingsbanks or savings and loan associations are insured by the Federal Deposit InsuranceCorporation; • Dividend-bearing share accounts, share certificates accounts, or class of share accountsof a credit union chartered under the laws of the State of Illinois or the laws of the UnitedStates; provided, however, the principal office of the credit unions must be located withinthe State of Illinois; and, provided further, that such investments may be made only inthose credit unions the accounts of which are insured by applicable law; • The Public Treasurer’s Investment Pool created under Section 17 of the State TreasurerAct (15 ILCS 505/17) or in a fund managed, operated, and administered by a bank,subsidiary of a bank, or subsidiary of a bank holding company, or use the services of such an entity to hold and invest or advise regarding the investment of any public funds; and A-9 107
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 • Repurchase agreements of government securities having the meaning set out in the Government Securities Act of 1986 (15 U.S.C.A. § 780-5) subject to the provisions of that Act and the regulations issued thereunder, provided, however, that such government securities, unless registered or inscribed in the name of the City, shall be purchased through banks or trust companies authorized to do business in the State of Illinois; and such other repurchase agreements as are authorized in subsection (h) of Section 2 of the Public Funds Investment Act (30 ILCS 235/2). Repurchase agreements may be executed only with approved financial institutions or broker/dealers meeting the City’s established standards, which shall include mutual execution of a Master Repurchase Agreement adopted by the City. The Lake Forest Cemetery Investment Fund is also permitted to invest in the following instruments: • Common and preferred stock authorized for investments of trust funds under the laws of the State of Illinois limited to 60% of the fund’s investments. In addition, Pension Funds are also permitted to invest in the following instruments: • Common and preferred stock authorized for investments of trust funds under the laws of the State of Illinois limited to 35% of the fund’s investments; • General accounts of Illinois-licensed life insurance companies; • Separate accounts of Illinois-licensed insurance companies invested in stocks, bonds, and real estate limited to 10% of the fund’s investments; • Bonds issued by any county, city, township, village, incorporated town, municipal corporation, or school district in Illinois; and • Tax anticipation warrants issued by any city, township, village, incorporated town, or fire protection district in Illinois. (f) Unbilled Water Sales Receivables Estimated water sales for water usage prior to year-end that are unbilled are recognized as current year revenues and are included in water sales receivables. (g) Interfund Transactions The City has the following types of interfund transactions: Loans—amounts provided with a requirement for repayment. Interfund loans are reported as interfund receivables (i.e. due from other funds) in lender funds and interfund payables (i.e. due to other funds) in borrower funds. Noncurrent portions of long-term interfund loan receivables are reported as advances and are offset equally by a fund balance reserve account which indicates that they do not constitute expendable available financial resources and therefore are not available for appropriation. Services provided and used—sales and purchases of goods and services between funds for a price approximating their external exchange value. Interfund services provided and used are reported as revenues in seller funds and expenditures or expenses in purchaser funds. Unpaid amounts are reported as interfund receivables and payables in the fund balance sheets or fund statements of net assets. CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 Reimbursements—repayments from the funds responsible for particular expenditures or expenses to the funds that initially paid for them. Reimbursements are reported as expenditures in the reimbursing fund and as a reduction of expenditures in the reimbursed fund. Transfers—flows of assets (such as cash or goods) without equivalent flows of assets in return and without a requirement for repayment. In governmental funds, transfers are reported as other financing uses in the funds making transfers and as other financing sources in the funds receiving transfers. In proprietary funds, transfers are reported after nonoperating revenues and expenses. (h) Inventory and Prepaid Items Inventory is recorded at cost. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements, using the consumption method. (i) Capital Assets Capital assets, which include property, plant, equipment, infrastructure assets (e.g., roads, bridges, traffic controls, drainage systems, and similar items), and intangible assets (software, easements, etc.) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $10,000 and an estimated useful life in excess of one year. Purchased capital assets are valued at cost where historical records are available and at an estimated historical cost where no historical records exist. Donated capital assets are valued at their estimated fair market value on the date received. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized, whereas improvements extending the useful lives of the related capital assets are capitalized. Interest is capitalized on proprietary fund property acquired with tax-exempt debt. The amount of interest to be capitalized is calculated by offsetting interest expense incurred from the date of the borrowing until completion of the project with interest earned on invested proceeds over the same period. Capitalized interest cost is amortized on the same basis as the related asset is depreciated. During the year ended April 30, 2012, there was no interest expense capitalized in the enterprise funds. Capital assets of the City and its component unit (Lake Forest Library) are depreciated using the straight-line method over the following useful lives: A-10 108
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 Public domain infrastructure20 – 60 yearsBuildings30 – 50 yearsImprovements other than buildings40 – 80 yearsVehicles, machinery, equipment and software3 – 20 yearsWater mains40 yearsSanitary sewers50 years(j) Compensated Absences The liability for compensated absences reported in the government-wide and proprietary fund statements consists of unpaid, accumulated vacation and sick leave balances. The liability for compensated absences is only reported in the governmental funds if they have matured. The liability has been calculated using the vesting method, in which leave amounts for both employees who currently are eligible to receive termination payments and other employees who are expected to become eligible in the future to receive such payments upon termination are included. (k) Bond Premiums, Discounts, and Issuance Costs In the government-wide and proprietary fund financial statements, bond premiums and discounts, as well as issuance costs and deferred amounts on refunding, are deferred and amortized over the life of the bonds using the straight line method which is not materially different from the effective interest method. Bonds payable are reported net of the applicable bond premium, discount and deferred amount on refunding. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. (l) Net Assets In the government-wide and proprietary fund financial statements, equity is displayed in three components as follows: Invested in Capital Assets, Net of Related Debt – This consists of capital assets, net of accumulated depreciation, less the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. Restricted – This consists of net assets that are legally restricted by outside parties or by law through constitutional provisions or enabling legislation. Unrestricted – This consists of net assets that do not meet the definition of “restricted” or “invested in capital assets, net of related debt.” See the policy below for the use of restricted resources in the governmental funds. Restricted net asset balances may differ from restricted fund balances reported in the governmental fund statements because the basis of accounting is different. For business-type activities and proprietary funds, the City considers restricted resources to have been spent first when an expense is incurred for which both restricted and unrestricted resources are available. CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 (m) Fund BalancesEffective May 1, 2011, the City adopted the provisions of Governmental Accounting Standards Board Statement No. 54 (GASB 54), Fund Balance Reporting and Governmental Fund Type Definitions. This statement established fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in the governmental funds. Within the governmental fund types, the City’s fund balances are reported in one of the following classifications: Nonspendable – includes amounts that cannot be spent because they are either: a) not in spendable form; or b) legally or contractually required to be maintained intact. Restricted – includes amounts that are restricted to specific purposes, that is, when constraints placed on the use of resources are either: a) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments; or b) imposed by law through constitutional provisions or enabling legislation. Committed – includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the City’s highest level of decision-making authority. Committed amounts cannot be used for any other purpose unless the City removes or changes the specified use by taking the same type of action it employed to previously commit those amounts. The City’s highest level of decision-making authority rests with the City Council. The City passes formal resolutions to commit their fund balances. Assigned – includes amounts that are constrained by the City’s intent to be used for specific purposes, but that are neither restricted nor committed. Intent is expressed by: a) the City Council itself; or b) a body or official to which the City Council has delegated the authority to assign amounts to be used for specific purposes. The City Council has delegated this authority to the City’s Finance Director. Within the other governmental fund types (special revenue, debt service, capital projects) resources are assigned in accordance with the established fund purpose and approved budget/appropriation. Residual fund balances in these fund types that are not restricted or committed are reported as assigned. Unassigned– includes the residual fund balance that has not been restricted, committed, or assigned within the general fund and deficit fund balances of other governmental funds. In the general fund, it is the City’s policy to consider restricted resources to have been spent first when an expenditure is incurred for which both restricted and unrestricted (i.e. committed, assigned or unassigned) fund balances are available, followed by committed and then assigned fund balances. Unassigned amounts are used only after the other resources have been used. In other governmental funds (special revenue, capital projects and debt service fund types), it is the City’s policy to consider restricted resources to have been spent last. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balances are available, the City first utilizes any assigned amounts, followed by committed and then restricted amounts. A-11 109
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 Fund Balance Classifications At April 30, 2012, the City’s fund balances were as follows: Parks and Nonmajor TotalGeneral Recreation Governmental Governmental Fund Fund Funds FundsNonspendablePrepaids 38,235 $ -$ 43,333 $ 81,568 $Inventory 91,896 - - 91,896 Long-term notes 2,029,272 - - 2,029,272 Total nonspendable 2,159,403 - 43,333 2,202,736 Restricted:Culture and recreation - 2,978,916 564,979 3,543,895 Highways and streets - - 285,530 285,530 Public safety - - 399,690 399,690 Cemetery purposes - - 3,749,480 3,749,480 Affordable housing - - 852,136 852,136 Capital projects - - 5,024,844 5,024,844 Parking lots 957,420 - - 957,420 Debt service - - 2,316,219 2,316,219 Total restricted 957,420 2,978,916 13,192,878 17,129,214 AssignedCapital projects - - 1,591,600 1,591,600 Unassigned 10,601,190 - - 10,601,190 Total fund balances 13,718,013 $ 2,978,916 $ 14,827,811 $ 31,524,740 $ (n) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. (o) New Accounting Pronouncements GASB Statement No. 61, The Financial Reporting Entity: Omnibus—an amendment of GASB Statements No. 14 and No. 34, will be effective for the City beginning with its year ending April 30, 2014.The objective of this Statement is to improve financial reporting for a governmental financial reporting entity. The requirements of Statement No. 14, The Financial Reporting Entity, and the related financial reporting requirements of Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, were amended to better meet user needs and to address reporting entity issues that have arisen since the issuance of those Statements.GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, will be effective for the City beginning with its year ending April 30, 2013. The objective of this Statement is to incorporate into the GASB’s CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 authoritative literature certain accounting and financial reporting guidance that is included in the following pronouncements issued on or before November 30, 1989, which does not conflict with or contradict GASB pronouncements: 1. Financial Accounting Standards Board (FASB) Statements and Interpretations 2. Accounting Principles Board Opinions 3. Accounting Research Bulletins of the American Institute of Certified Public Accountants’ (AICPA) Committee on Accounting Procedure GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position amends the net asset reporting requirements in GASB 34, by incorporating deferred outflows of resources and deferred inflows of resources into the definitions of the required components of the residual measure and by renaming that measure as net position, rather than net assets. This will be effective for the City for the year ending April 30, 2013. GASB Statement No. 65, Items Previously Recorded as Assets and Liabilities reclassifies, as deferred outflows of resources or deferred inflows of resources, certain items that were previously reported as assets and liabilities and recognizes, as outflows of resources (expenses) or inflows of resources (revenues), items that were previously reported as assets or liabilities. This will be effective for the City for the year ending April 30, 2014. GASB Statement No. 66, Technical Corrections-2012-an amendment of GASB Statements No. 10 and No. 62 resolves conflicting guidance that resulted from the issuance of GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, and No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. This Statement removes the provisions that limits fund based reporting of risk financing activities. This Statement also modifies specific guidance on accounting for certain operating leases and certain loans. This will be effective for the City for the year ending April 30, 2014. GASB Statement No. 67, Financial Reporting for Pension Plans, will be effective for the City beginning with its year ended April 30, 2015. This statement builds upon the existing framework for financial reports of defined benefit pension plans, which includes a statement of fiduciary net position (the amount held in a trust for paying retirement benefits) and a statement of changes in fiduciary net position. This statement enhances note disclosures and RSI for both defined benefit and defined contribution pension plans and requires the presentation of new information about annual money-weighted rates of return in the notes to the financial statements and in 10-year RSI schedules. GASB Statement No. 68, Accounting and Financial Reporting for Pensions, will be effective for the City beginning with its year ended April 30, 2016. This statement requires governments providing defined benefit pensions to recognize their long-term obligation for pension benefits as a liability for the first time, and to more comprehensively and comparably measure the annual costs of pension benefits. This statement also enhances accountability and transparency through revised and new note disclosures and required supplementary information (RSI). Management has not currently determined what impact, if any, this Statement may have on its financial statements; however GASB 68 is expected to have a material impact when implemented. A-12 110
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 Note 2. Stewardship, Compliance and Accountability Budgetary Information The budget amounts represent the operating budget for the City and the appropriations represent the City’s legal expenditure limit. The City Council follows these procedures in establishing the budgetary and appropriations data reflected in the financial statements: (1) The City Manager submits to the City Council a proposed operating budget for the fiscal year. The operating budget includes proposed expenditures and estimated revenues. (2) Public budget and appropriations meetings are conducted by the City to obtain taxpayer comments. (3) The budget and the appropriation ordinance, which is 10% higher than the budget, are both legally enacted through action of the City Council. Once enacted, the budget cannot be amended without approval from the City Council. Funds may have expenditures in excess of budgeted amounts, but legally may not have expenditures in excess of appropriations. (4) The legal level of budgetary control is the fund level. Management may make transfers of appropriations within a fund. Any expenditures that exceed the total appropriations at the fund level must be approved by the City Council. (5) Formal budgetary integration and legally adopted budgets are employed as a management control device during the year for the General and Special Revenue Funds, through an internal reporting system. Such budgetary integration permits the City’s department managers to monitor actual revenues and expenditures relative to budgets on an ongoing basis throughout the year. Formal encumbrance accounting is not used, and appropriations not used by the end of the fiscal year lapse. (6) Governmental fund budgets are adopted for all funds, except for the 2010 Bond Construction Fund and are on a basis consistent with generally accepted accounting principles (GAAP). All proprietary funds have budgets and are generally in accordance with GAAP except that principal retirement is budgeted and depreciation expense is not budgeted. Additionally, the Pension Trust Funds adopt budgets which are generally in accordance with GAAP. CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 Note 3. Cash and Investments Cash and investments are held separately and in pools by several of the City’s funds. The City maintains various cash and investment pools that are available for use by all funds. Income from pooled investments is allocated to the funds based on their proportional share of their investment balance. The deposits and investments of the Police and Fire Pension Funds (Pension Funds) are held separately. A summary of cash and investments as of April 30, 2012 is as follows: ComponentUnitGovernmental Police Firefighters' Other Lakeand Business- Pension Pension Fiduciary Foresttype Activities Fund Fund Activities LibraryPetty cash 10,895 $ -$ 300 $ -$ 350 $ Demand deposits40,901,136 237,332 1,984,318 69,989 1,229,227 Certificate of deposit89,825 - - - - Illinois Funds473,242 - - - 1,367 Equity securities3,145,550 11,280,395 11,602,802 489,043 - U.S. Treasury obligations- 9,120,157 4,532,251 - - U.S. Government agencies- 1,494,690 5,961,937 - - Municipal/corporate bonds- - 2,715,112 - - Total 44,620,648 $ 22,132,574 $26,796,720 $559,032 $ 1,230,944 $Fiduciary activitiesIllinois FundsIllinois Funds is an investment pool managed by the State of Illinois, Office of the Treasurer, which allows governments within the State to pool their funds for investment purposes. Illinois Funds is not registered with the SEC as an investment company, but does operate in a manner consistent with Rule 2a7 of the Investment Company Act of 1940. Investments in Illinois Funds are valued at Illinois Funds’ share price, which is the price the investment could be sold for. Investment Policies The City and the Library’s investments are made in accordance with the Public Funds Investment Act (30 ILCS 235/1) (the “Act”) and the City’s investment policy. The Cemetery Investment Fund’s investments are made in accordance with the Cemetery Care Act (760 ILCS 100/1-24) (the “Act”) and the Cemetery commission’s investment policy. The Police and Firefighters’ Pension Funds’ investments are made in accordance with the Illinois Pension Code (40 ILCS 5/1-113.2 to 113.10) and each respective pension funds’ investment policy. A summary of authorized investments is included in Note 1e. Custodial Credit Risk – Deposits Custodial credit risk for deposits is the risk that in the event of a financial institution failure, the City’s deposits may not be returned. The City’s investment policy requires that deposits that exceed the amount insured by FDIC, NCUA, and/or SIPC insurance protection be collateralized, at the rate of 110% of such deposits, by U.S. Government Securities, obligations of Federal instrumentalities, obligations of the State of Illinois, or general obligation bonds of the City. The Cemetery Investment Fund and the Pension Funds do not have a A-13 111
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 deposit policy for custodial credit risk. As of April 30, 2012, the City, Cemetery Investment Fund and the Police and Firefighters’ Pension Funds’ bank balances were not subject to custodial credit risk as they were either insured or collateralized with investments held by the City or its agent, in the City’s name. Interest Rate Risk Interest rate risk is the risk that the fair value of investments will decrease as a result of an increase in interest rates. Although the City and Cemetery Fund’s investment policy does not specifically limit the length of maturity of investments, it requires the City and Cemetery Fund to minimize the interest rate risk by structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity and by investing operating funds primarily in short-term securities, money market mutual funds, or similar investment pools. The Police Pension Fund’s investment policy does not limit the length of maturity of investments since it is passively managing its fixed income exposure to the Barclays Capital Intermediate Government Index. Although the Firefighters’ Pension Fund’s investment policy does not specifically limit the length of maturity of investments, it manages interest rate risk by investing fixed income assets in proportion to the present value of the Fund’s projected liabilities. As of April 30, 2012, the maturities for debt securities subject to interest rate risk are as follows: Fair LessMoreValue than 1 1-56-10 than 10Fiduciary activities:Police Pension Fund:U.S. Treasury obligations9,120,157 $ -$ 6,557,196 $ 2,562,961 $-$ U.S. Government agencies1,494,690 - 1,074,650 420,040 - Total Police Pension10,614,847 - 7,631,846 2,983,001 - Firefighters' Pension Fund:U.S. Treasury obligations4,532,251 - 795,509 1,293,286 2,443,456 U.S. Government agencies5,961,937 520,516 2,031,725 771,221 2,638,475 Municipal/corporate bonds2,715,112 284,058 792,578 1,582,142 56,334 Total Firefighters' Pension 13,209,300 804,574 3,619,812 3,646,649 5,138,265 Total fiduciary activities 23,824,147 $ 804,574 $11,251,658 $ 6,629,650 $5,138,265 $Investment maturities (in years)Credit RiskCredit risk is the risk that the City or Pension Funds will not recover their investments due to the ability of the counterparty to fulfill its obligation. The City’s investment policy limits the City’s exposure to credit risk by limiting investments to the safest types as described in Note 1e. The Cemetery and Pension Fund’s general investment policy is to follow the prudent person rule subject to the specific restrictions of the Illinois Cemetery Care Act and the Illinois Pension Code and the respective Cemetery and Pension Funds’ asset allocation policy. Under the prudent person rule, investments shall be made with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 person acting in like capacity and familiar with such matters would use in the investment of a fund or like character and with like aims. The Cemetery and Police Pension Funds’ investment policy further limits the investment in any one company or issuer to 5% of the funds’ total assets. The Cemetery Fund also limits the investment in any one equity industry group to no more than 15% of the Fund’s assets. As of April 30, 2012, the City, Cemetery Investment Fund, and Pension Funds had the following fixed income investments which are rated by both Moody’s and Standard and Poor’s. U.S. Treasury obligations which are backed by the full faith and credit of the U.S. Government are not included in the chart below. FairValue AAA AA A BBBGovernmental and business-type activities:Illinois Funds 473,242 $ 473,242 $ -$ -$ -$ Fiduciary activities:Police Pension Fund:U.S. Government agencies 1,494,690 $ 1,494,690 $ -$ -$ -$ Firefighters' Pension Fund:U.S. Government agencies 5,961,937 5,961,937 - - Municipal/corporate bonds 2,715,112 83,477 315,251 1,188,239 1,128,145 8,677,049 6,045,414 315,251 1,188,239 1,128,145 Total fiduciary activities 10,171,739 $7,540,104 $315,251 $1,188,239 $1,128,145 $Credit ratingsConcentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of investment in any one single issuer. The Firefighters’ Pension holds 5% of its portfolio in Tennessee Valley Authority (TVA) which is rated AAA as well as 6.4% in FNMA securities. The TVA debt is primarily zero coupon bonds that are diversified by maturity. The Police Pension Fund’s fixed income assets are invested in a commingled fund at Northern Trust. The underlying securities are diversified across 266 issues, in which the average credit quality is AAA / AA1. All issues are either U.S. Treasury or U.S. Government Agency issues. Custodial Credit Risk Custodial credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of a third party. The investment policies for the City, Cemetery and Pension Funds require investment securities be held by an authorized custodial bank pursuant to a written custodial agreement. Foreign Currency Risk Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an investment or deposit. As of April 30, 2012, 7.2% of the Firefighters’ Pension Fund’s assets were invested in A-14 112
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 the Vanguard Total International Stock Index. The funds are subject to foreign currency risk. To diversify risk, the Firefighters’ Pension Fund utilizes an equity asset allocation that incorporates a variety of management styles. The allocations are reviewed quarterly and rebalanced if necessary. As of April 30, 2012, 12.4% of the Police Pension Fund’s assets were invested in the Dodge & Cox International Stock Fund and Vanguard Total International Stock Index Fund. The funds are subject to foreign currency risk; however, the funds are well diversified across international regions. The Cemetery Fund had 18.3% of its assets invested in William Blair International Growth Fund as of April 30, 2012. Note 4. Property Tax The City’s property tax is levied each calendar year on all taxable real property located in the City. The City is a special charter community under the 1870 Illinois Constitution and, accordingly, does not have a statutory tax rate limit. The Lake County Assessor (Assessor) is responsible for assessment of all taxable real property within Lake County, except for certain railroad property which is assessed directly by the State. One quarter of Lake County is reassessed each year on a repeating quadrennial schedule established by the Assessor. The Lake County Clerk computes the annual tax rate by dividing the levy into the assessed valuation of the taxing district. The County Clerk then computes the rate for each parcel of real property by aggregating the tax rates of all taxing districts having jurisdiction over that particular parcel. Property taxes are collected by the Lake County Collector and are submitted to the Lake County Treasurer, who remits to the units their respective shares of the collections. Taxes levied in one year become due and payable in two installments in June and September during the following year. Taxes must be levied by the last Tuesday in December for the following levy year. The levy becomes an enforceable lien against the property as of January 1 of the levy year. The property tax levy is recorded as a receivable, net of estimated uncollectibles. Based upon collection histories, the City has provided an allowance for uncollectible real property taxes equivalent to 1.5% of the current year’s levy. All uncollected taxes relating to prior years’ levies have been written off. Revenue for property taxes is recognized in the governmental funds in the year for which the taxes are intended to finance and the funds are available. The City considers property tax revenue to be available if it is collected during the current year or within 60 days after year-end. Property taxes levied for calendar year 2011 are intended to finance the fiscal year 2013 expenditures. Accordingly, the City recognized revenue during the year ended April 30, 2012 for collections from the calendar year 2010 levy if it was received by June 30, 2012. Property taxes levied for calendar year 2011 which will be collected in fiscal year 2013 are recorded as receivables and deferred revenue. Note 5. Interfund Balances and Activity Due to/from Other Funds The following balances at April 30, 2012 represent amounts due to/from other funds: Receivable fundPayable fundAmountParks and Recreation Fund Nonmajor Governmental Funds29,915$Nonmajor Governmental Fund Fiduciary Fund54,349 Total84,264$CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 These balances result from operating transactions between funds and will be repaid during the next fiscal year within the normal course of business. Transfers to/from Other Funds Interfund transfers for the year ended April 30, 2012 were as follows: Transfer In Fund(s)PurposeAmountParks and Recreationtransfer for operations323,000$Nonmajor business activitytransfer for operations 38,000 Nonmajor business activitytransfer for operations 1,000 Nonmajor governmentaltransfer for capital outlay 37 Nonmajor governmentaltransfer for capital outlay 183 Nonmajor governmentaltransfer for capital outlay 1,076,511 Nonmajor governmentaltransfer for operations 206,480 Nonmajor governmentaltransfer for debt service 563,784 Nonmajor governmentaltransfer for debt service 1,254 Nonmajor governmentaltransfer for debt service 35,000 Nonmajor governmentaltransfer for debt service 22,461 Nonmajor governmentaltransfer for debt service 67,560 2,335,270$Transfer Out Fund(s)General Fundtransfer for capital outlay1,076,511$General Fundtransfer for operations 206,480 General Fundtransfer for operations 1,000 General Fundtransfer for operations 323,000 General Fundtransfer for debt service 563,784 Parks and Recreationtransfer for operations 38,000 Waterworks and Sewerage Fundtransfer for debt service 1,254 Nonmajor governmentaltransfer for capital outlay 37 Nonmajor governmentaltransfer for capital outlay 183 Nonmajor governmentaltransfer for debt service 35,000 Nonmajor governmentaltransfer for debt service 22,461 Nonmajor governmentaltransfer for debt service 67,560 2,335,270$A-15 113
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 Note 6. Capital Assets A summary of capital asset activity for the year ended April 30, 2012 is as follows: Balance AdditionsBalanceMay 1, 2011 or Transfers Disposals April 30, 2012Governmental Activities:Capital assets not being depreciated:Land and land improvements 45,497,634 $-$ -$ 45,497,634 $ Infrastructure – land66,740,770 - - 66,740,770 Construction in progress150,579 87,884 29,285 209,178 Total capital assets not being depreciated112,388,983 87,884 29,285 112,447,582 Capital assets being depreciated:Infrastructure180,285,880 807,893 39,919 181,053,854 Buildings32,137,757 - - 32,137,757 Improvements otherthan buildings28,584,061 1,036,621 46,661 29,574,021 Machinery and equipment13,890,687 1,295,470 439,221 14,746,936 Total capital assets beingdepreciated254,898,385 3,139,984 525,801 257,512,568 Less accumulated depreciation: Infrastructure110,238,719 3,081,495 - 113,320,214 Buildings8,305,022 751,991 - 9,057,013 Improvements other than buildings6,859,069 1,359,031 46,661 8,171,439 Machinery and equipment 9,448,397 1,082,647 439,221 10,091,823 Total accumulated depreciation134,851,207 6,275,164 485,882 140,640,489 Governmental Activity capital assets – net 232,436,161 $(3,047,296) $69,204 $229,319,661 $Depreciation expense for governmental activities for the year ended April 30, 2012 was charged to functions as follows: 1,828,583$3,217,565141,311869,293218,4126,275,164$Public safetyGeneral governmentHighways and streetsSanitationCulture and recreationCITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 BalanceDisposals BalanceMay 1, 2011 Additions or Transfers April 30, 2012Business-type activitiesCapital assets not being depreciated:Land 459,369 $ -$ -$ 459,369 $Total capital assets not being depreciated 459,369 - - 459,369 Capital assets being depreciated:Buildings 27,021,790 - - 27,021,790 Improvements otherthan buildings 40,434,485 285,287 - 40,719,772 Machinery and equipment 4,378,709 42,830 16,828 4,404,711 Sanitary sewers and related property 29,398,409 63,336 - 29,461,745 Total capital assets beingdepreciated 101,233,393 391,453 16,828 101,608,018 Less accumulated depreciation: Buildings 8,578,977 1,003,570 - 9,582,547 Improvements other than buildings 15,903,125 977,678 - 16,880,803 Machinery and equipment 2,228,162 216,751 16,828 2,428,085 Sanitary sewers andrelated property 13,825,950 577,621 - 14,403,571 Total accumulated depreciation 40,536,214 2,775,620 16,828 43,295,006 Capital assets – net 61,156,548 $ (2,384,167) $ -$ 58,772,381 $A-16 114
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 BalanceBalanceMay 1, 2011Additions Disposals April 30, 2012Component Unit – Lake Forest LibraryCapital assets not being depreciated:Land70,000 $ -$ -$ 70,000 $Art149,000 - - 149,000 Total capital assets not being depreciated219,000 - - 219,000 Capital assets being depreciated:Buildings1,180,907- - 1,180,907 Improvements otherthan buildings1,552,854 - - 1,552,854 Machinery and equipment3,592,870 355,403 293,039 3,655,234Total capital assets beingdepreciated6,326,631 355,403 293,039 6,388,995Less accumulated depreciation:Buildings560,814 23,338- 584,152 Improvements other than buildings567,191 136,000- 703,191 Machinery and equipment2,025,077 341,060 293,039 2,073,098Total accumulated depreciation3,153,082 500,398 293,039 3,360,441Capital assets – net3,392,549 $ (144,995) $-$ 3,247,554 $CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 Note 7. Long-term Obligations The City issues debt to finance various capital projects and other construction activities. The following is a summary of the changes in long-term obligations of the City for the year ended April 30, 2012: AmountsBalanceBalancedue withinMay 1, 2011 Additions Deductions April 30, 2012 one yearGovernmental activities: General obligation bonds40,887,758 $5,690,000 $(7,996,876) $38,580,882 $1,377,734 $Deferred amount on refunding- (324,720) 45,396 (279,324) - Premium on general obligation bonds280,461 120,828 (88,713) 312,576 - Discount on general obligation bonds(90,894) -16,828 (74,066) - Total general obligation bonds 41,077,325 5,486,108 (8,023,365) 38,540,068 1,377,734 Net OPEB obligation*134,326 34,562 - 168,888 - Compensated absences**1,869,825 2,145,304 (2,287,989) 1,727,140 100,000 Total governmental activities 43,081,476 $7,665,974 $(10,311,354) $ 40,436,096 $1,477,734 $Business-type activities:General obligation bonds23,525,000 $21,550,000 $(22,271,000) $22,804,000 $1,744,000 $Deferred amount on refunding- (1,348,362) 188,500 (1,159,862) - Premium on general obligation bonds- 444,964 (66,164) 378,800 - Discount on general obligation bonds(78,339) -74,114 (4,225) - Compensated absences261,386 215,262 (289,228) 187,420 5,000 Total business-type activities 23,708,047 $20,861,864 $ (22,363,778) $ 22,206,133 $1,749,000 $Component Unit - Lake Forest LibraryCapital lease51,743 $ -$ (30,083) $21,660 $21,660 $ Net OPEB obligation*2,743 2,863 -5,606 - Compensated absences142,261 167,541 (139,035) 170,767 10,000 Total component unit -Lake Forest Library196,747 $170,404 $(169,118) $198,033 $31,660 $ * OPEB obligations will be liquidated by the General Fund. **Compensated absences will be liquidated by the applicable governmental funds (primarily the General, Parks and Recreation, Senior Commission and Cemetery Funds) that account for the salaries and wages for the related employees. A-17 115
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 General obligation debt payable for the City as of April 30, 2012 consists of the following: Governmental Activities:General obligation bonds:Special Service Area 25 Special Tax Bonds due in annual installments of$25,000 to $75,000 through December 15, 2022; interest at 1.15%to 4.45%, due semiannually on June 15 and December 15. Fundedby Debt Service Funds property tax levies. 695,000 $ Special Service Area 26 Special Tax Bonds due in annual installments of$9,545 to $20,700 through December 15, 2022; interest at 1.40%to 4.90%, due semiannually on June 15 and December 15. Fundedby Debt Service Funds property tax levies. 183,744 Special Service Area 29 Special Tax Bonds due in annual installments of$76,192 to $150,611 through December 15, 2023; interest at 2.45%to 5.15%, due semiannually on June 15 and December 15. Fundedby Debt Service Funds property tax levies. 1,426,138 2004 B Series General Obligation Bonds due in one installment of $150,000 on December 15, 2012; interest at 3.50%,due semiannually on June 15 and December 15. Fundedby local sales tax.150,000 2008 Series General Obligation Bonds due in annual installments of$110,000 to $635,000 through December 15, 2027; interest at 3.375%to 3.875%, due semiannually on June 15 and December 15. Fundedby Debt Service Funds property tax levies. 8,860,000 2009 Series General Obligation Bonds due in annual installments of$160,000 to $280,000 through December 15, 2029; interest at 2% to 4.1%,due semiannually on June 15 and December 15. Funded by Debt ServiceFunds property tax levies. 3,520,000 CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 Governmental Activities:General obligation bonds (Continued):2010 A Series General Obligation Bonds due in one installment of $9,665,000 on December 15, 2015; interest at 3.00%, due semiannuallyon June 15 and December 15, commencing June 15, 2011. Fundedby Debt Service Funds property tax levies. 9,665,000 2010 B Series General Obligation Bonds due in annual installments of$540,000 to $860,000 through December 15, 2032, commencingDecember 15, 2029; interest at 5.75%, due semiannually on June 15 and December 15. Funded by Debt Service Funds property tax levies. 3,000,000 2010 C Series General Obligation Bonds due in annual installments of$195,000 to $490,000 through December 15, 2029; commencing December 15, 2015; interest at 3.00% to 5.50%, due semiannually on June 15 and December 15. Funded by Debt Service Funds property tax levies.5,425,000 2011 A Series General Obligation Bonds due in annual installments of$195,000 to $345,000 through December 15, 2015; interest at1.5% to 2%, due semiannually on June 15 and December 15. Funded by Debt Service Funds property tax levies. 1,220,000 2011 B Series General Obligation Bonds due in annual installments of$41,000 to $523,000 through December 15, 2023; interest at2% to 3%, due semiannually on June 15 and December 15. Funded by Debt Service Funds property tax levies. 4,436,000 Total governmental activities 38,580,882 $The City has outstanding bonds that will be paid from pledged future revenues. The 2004B bonds are to be paid from sales tax revenue from the General Fund. These pledges will remain until all bonds are retired in FY 2013. The amount of pledges remaining as of April 30, 2012 is $155,250. The secured debt was issued to provide storm sewers, and a central business district parking lot. A comparison of the pledged revenues collected and the related principal and interest expenditure for fiscal year 2012 is as follows (amounts in thousands): Pledged 2012 Pledged 2012 Principal Revenue Source Revenue Collected and Interest RetiredSales tax2,577$ 247$ **$4,250 was refunded in 2012A-18 116
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 Business-type ActivitiesGeneral obligation and revenue bonds:Waterworks and Sewerage Fund:2002 Series A General Obligation Bonds due in one installment of $1,350,000 on December 15, 2012; interest at 4.00% due semiannually on June 15 and December 15. Funded by Water and Sewer Fund revenues. 1,350,000 $2011 A Series General Obligation Bonds due in annual installments of$120,000 to $140,000 through December 15, 2021; interest at1.5% to 3%, due semiannually on June 15 and December 15. Funded by Debt Service Funds property tax levies. 1,180,000 2011 B Series General Obligation Bonds due in annual installments of$180,000 to $2,004,000 through December 15, 2024; interest at2% to 3%, due semiannually on June 15 and December 15. Funded by Debt Service Funds property tax levies. 19,216,500 Nonmajor Enterprise Fund:2004 Series A General Obligation bonds due in one installment of $75,000 on December 15, 2012; interest at 4.00%. Funded by Golf Course Fund revenues 75,000 2011 B Series General Obligation Bonds due in annual installments of$189,000 to $2,097,000 through December 15, 2023; interest at2% to 3%, due semiannually on June 15 and December 15. Funded by Debt Service Funds property tax levies. 982,500 Total Business-type Activities22,804,000 $The City has outstanding bonds that will be paid from pledged future revenues. The 2002A bonds are to be paid from water/sewer revenues of the Waterworks and Sewerage Fund. The 2004A bonds are to be paid from revenues from the Golf Course Fund. These pledges will remain until all bonds are retired in FY 2013. The amount of the pledges remaining as of April 30, 2012 was $1,404,000 and $78,000 for the 2002A and 2004B bonds, respectively. The secured debt was issued to provide improvements to the water/sewer system and the golf course. A comparison of the pledged revenues collected and the related principal and interest expenditure for fiscal year 2012 is as follows (amounts in thousands): Pledged 2012 Pledged 2012 Principal Debt Issue Revenue Source Revenue Collected and Interest Retired2002AWater/Sewer revenues7,477$1,815$2004ASales tax2,577100CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 Annual debt service requirements to maturity for general obligation bonds are as follows: Years Principal Interest Principal Interest2013 1,377,734 $ 1,392,162 $ 1,744,000 $ 568,207 $20141,400,949 1,352,264 1,815,000 504,829 20151,443,436 1,313,769 1,847,000 468,528 2016 11,283,219 1,275,653 1,877,000 432,288 20171,568,336 939,356 1,902,000 395,397 2018-2022 8,601,389 3,907,255 10,175,000 1,287,190 2023-2027 7,535,819 2,303,929 3,444,000 143,731 2028-2032 4,510,000 933,269 - -2033860,000 49,450 - -Total 38,580,882 $ 13,467,107 $ 22,804,000 $ 3,800,170$Governmental activitiesBusiness-type activitiesRefundingOn September 6, 2011 the City issued $2,415,000 and $24,825,000 of General Obligation Refunding Bonds Series 2011A and 2011B, respectively, in order to advance refund/partially refund $26,085,000 Series 1999, 2003D, 2004B, 2002A, 2003C and 2004A. In connection with this refunding, net proceeds of $27.642 million were deposited into an irrevocable trust with an escrow agent to provide for debt service payments on the refunded portion of the bonds. As a result, the refunded portion of the bonds are considered defeased and removed from the statement of net assets (governmental activities, enterprise funds and business-type activities) in 2012. As a result of the refunding, the City decreased its total debt service by approximately $2.8 million over the next 12 years. The economic gain (difference between the present values of the debt service payments on the old and new debt) is approximately $2.5 million. Details by issue are as follows: 2011IssueBalanceIssueRefundedRefunded2011A 1999415,000 $2003C1,190,000 2003D800,000 2,405,000 2011B 2002A18,480,000 2004A950,000 2004B4,250,000 23,680,000 Total26,085,000 $A-19 117
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 Note 8. Capital Lease The City of Lake Forest Public Library has entered into a lease agreement as lessee for financing technology equipment to the Library. The lease is due in installments through its maturity on December 11, 2012 at an annual interest rate of 1.0%. The lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of the future minimum lease payments as of the inception date.The assets acquired through the capital lease are as follows: Lake ForestLibraryAssets:Improvements other than buildings 91,389$Less: accumulated depreciation (76,157)Total15,232$The future minimum lease obligations and the net present value of these minimum lease payments as of April 30, 2012 were as follows: Lake ForestYear Ending April 30 Library201321,747$Less: Amount representing interest (87)Present value of minimum lease payments 21,660$Note 9. Retirement Fund Commitments Illinois Municipal Retirement Fund (a) Plan Description The City contributes to the Illinois Municipal Retirement Fund (IMRF), a defined benefit pension plan, which provides retirement, disability, annual cost of living adjustments, and death benefits to plan members and beneficiaries. IMRF is an agent multiple-employer public retirement system that acts as a common investment and administrative agent for local governments and school districts in Illinois. All employees, except those covered by the police and fire pension plans, hired in positions that meet or exceed the prescribed annual hourly standard, must be enrolled in IMRF as participating members. Benefit provisions are established by statute and may only be changed by the General Assembly of the State of Illinois. IMRF issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained on-line at www.imrf.org or by writing to the Illinois Municipal Retirement Fund, 2211 York Road, Suite 500, Oak Brook, Illinois 60523. CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 (b) Funding Policy As set by statute, employer regular plan members are required to contribute 4.50 percent of their annual covered salary. The statutes require employers to contribute the amount necessary, in addition to member contributions, to finance the retirement coverage of its own employees. The employer contribution rate for calendar year 2012 and 2011 were 11.88 percent and 11.69 percent of annual covered payroll, respectively. The City also contributes for disability benefits, death benefits and supplemental retirement benefits, all of which are pooled at the IMRF level. Contribution rates for disability and death benefits are set by the IMRF Board of Trustees, while the supplemental retirement benefits rate is set by statute. (c) Annual Pension Cost The City’s annual pension cost of $1,893,946 for the regular plan was equal to the City’s required and actual contributions. (d) Trend Information Fiscal Annual PercentageYear pension of APC Net pensionending cost (APC) contributed obligation2012 1,893,946 $ 100 %-$2011 1,944,067 100-2010 1,961,263 100-The required contributions for 2012 and 2011 were determined as part of the December 31, 2009 actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included (a) 7.5 percent investment rate of return (net of administrative and direct investment expenses), (b) projected salary increases of 4.00% a year, attributable to inflation, (c) additional projected salary increases ranging from 0.4% to 10% per year depending on age and service, attributable to seniority/merit, and (d) post retirement benefit increases of 3% annually. The actuarial value of the City’s regular plan assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a five-year period with a 20% corridor between the actuarial and market value of assets. The plan’s unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on an open 30 year basis. (e) Funded Status and Funding Progress As of December 31, 2011, the most recent actuarial valuation date, the regular plan was 62.73 percent funded. The actuarial liability for benefits was $44,405,755 and the actuarial value of assets was $27,857,081 resulting in an unfunded actuarial accrued liability (UAAL) of $16,548,674. The covered payroll (annual payroll of active employees covered by the plan) was $16,261,976 and the ratio of the UAAL to the covered payroll was 102 percent. The schedule of funding progress, presented as RSI following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. A-20 118
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 Police Pension and Firefighters’ Pension Plans (a) Plan Descriptions The City contributes to two single-employer defined benefit pension plans: the Police Pension Plan and the Firefighters’ Pension Plan (Plans). Each plan provides retirement, disability, and death benefits, and annual cost-of-living adjustments to plan members and beneficiaries. Sworn Police and Fire personnel are covered by the Plans. Although these are single-employer pension plans, the defined benefits and employee and employer contribution levels are governed by Illinois Compiled Statutes and may be amended only by the Illinois legislature. The City accounts for the Plans as Pension Trust Funds. The City does not, however, separately issue financial reports for the Plans. Membership of each plan consisted of the following at April 30, 2012: Police Firefighters' Pension PensionRetirees and beneficiaries currently receiving benefits 33 32Terminated employees entitled to but not yet receiving benefits 3 -Active plan members 39 33Total 75 65(b) Summary of Significant Accounting Policies and Plan Asset Matters Basis of Accounting – The financial statements are prepared using the accrual basis of accounting. Employee and employer contributions are recognized when due, pursuant to formal commitments, as well as statutory or contractual requirements. Benefits and refunds are recognized when due and payable in accordance with the terms of each plan. Administrative costs are financed through investment earnings. Method Used to Value Investments – Investments are reported at fair value. Short-term investments are reported at cost, which approximates fair value. Securities traded on a national exchange are valued at the last reported sales price. The fair value of real estate investments is based on independent appraisals. Investments that do not have an established market are reported at estimated fair value. Significant Investments – The Police Pension Fund has no significant investments (other than U.S. Government and U.S. Government-guaranteed obligations) in any one organization that represent 5% or more of net assets available for benefits. The Firefighters’ Pension Fund has $1,348,133 invested in the Tennessee Valley Authority and $1,708,143 invested in FNMA securities which represents 5% and 6.4%, respectively, of plan net assets at April 30, 2012. (c) Funding Policy and Annual Pension Cost Covered police pension eligible employees are required to contribute 9.91% of their base salary to the Police Pension Plan. If an employee leaves covered employment with less than 20 years of service, accumulated employee contributions may be refunded without accumulated interest. The City is required to contribute the remaining amounts necessary to finance the plan as actuarially determined by an enrolled actuary. CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 By the year 2033, the City’s contributions must accumulate to the point where the past service cost for the Police Pension Plan is fully funded. Actuarial valuations are performed annually. Covered firefighters’ pension eligible employees are required to contribute 9.455% of their salary to the Firefighters’ Pension Plan. If an employee leaves covered employment with less than 20 years of service, accumulated employee contributions may be refunded without accumulated interest. The City is required to contribute the remaining amounts necessary to finance the plan as actuarially determined by an enrolled actuary. By the year 2033, the City’s contributions must accumulate to the point where the past service cost for the Firefighters’ Pension Plan is fully funded. Actuarial valuations are performed annually. The City’s annual pension cost and net pension asset for the Police and Firefighters’ Pension Plans for fiscal year 2012 were as follows: Police Firefighters' Pension PensionAnnual required contribution 1,372,431 $ 862,452 $ Interest on net pension obligation (51,048) (26,622) Adjustment to annual required contribution 38,966 19,252 Annual pension cost 1,360,349 855,082 Contributions made 1,515,074 983,298 Increase in net pension asset 154,725 128,216 Net pension asset at April 30, 2011 681,484 354,327 Net pension asset at April 30, 2012 836,209 $ 482,543 $ The net pension assets are reported by the City in the government-wide Statement of Net Assets. Other related information is as follows: Police Pension Firefighters' Pension Contribution rates - City 45.10% 33.43%Contribution rates - plan members 9.91% 9.46%Actuarial valuation date 4/30/12 4/30/12Actuarial cost method Entry Age Entry AgeAmortization method Level Percentage Level Percentageof pay, closed of pay, closedRemaining amortization period 21 years 21 yearsAsset valuation method Market MarketActuarial assumptions:Investment rate of return 7.50% 7.50%Projected salary increases* 5.50% 5.50%*Includes inflation at 3.00% 3.00%Cost-of-living adjustments 3.00% per year 3.00% per year
A-21 119
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 (d) Plan Financial Statements Following are condensed financial statements for the Police and Firefighters’ Pension Plans as of and for the year ended April 30, 2012: PoliceFirefighters'Pension Pension Assets:Cash and cash equivalents 237,332 $ 1,984,618 $Investments 21,895,242 24,812,102 Other receivables 1,150 110,339 Prepaid expenses 6,509 4,991 Total assets 22,140,233 26,912,050 Liabilities:Accounts payable 8,859 13,029 Net assets:Held in trust for pension benefits 22,131,374 $ 26,899,021 $Additions:Employer contributions 1,515,074 $ 983,298 $Employee contributions 338,575 278,048 Interest income 203,401 824,236 Net appreciation in fair value of investments 353,373 682,086 Less investment expenses (102,677) (76,141) Total additions 2,307,746 2,691,527 Deductions:Pension benefits and refunds 1,682,292 1,463,983 Administrative expenses 5,800 5,800 Total deductions 1,688,092 1,469,783 Changes in net assets 619,654 1,221,744 Net assets held in trust at beginning of year 21,511,720 25,677,277 Net assets held in trust at end of year 22,131,374 $ 26,899,021 $Statement of Fiduciary Net AssetsStatement of Changes in Fiduciary Net AssetsCITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 (e) Three Year Trend Information AnnualNetYear PensionPensionEnding Cost (APC)AssetPolice Pension: 4/30/12 1,360,349 $ 111.4 % 836,209 $4/30/11 1,390,988 101.6681,484 4/30/10 1,113,386 101.4659,742 Firefighters' Pension: 4/30/12 855,082 $ 115.0 % 482,543 $4/30/11 948,412 101.3354,327 4/30/10 755,444 107.2341,889 contributedof APCPercentage(f) Funded Status and Funding Progress – Pension Trust FundsThe funded status of the Police and Firefighters’ Pension Plans as of April 30, 2012, the most recent actuarial valuation date, is as follows: (1)(2)(2)–(1)Actuarial Actuarial Accrued Unfunded (1)/(2)(3)Value of Liability (AAL) AAL Funded CoveredAssets Entry Age (UAAL) RatioPayrollPolice 22,131,376 $ 39,409,677 $ 17,278,301 $56.2 % 3,359,679 $ 514.3 %Firefighters' 26,899,022 33,789,869 6,890,847 79.6 2,941,767 234.2 Payroll((2-1)/3)UAAL as aPercentage ofCoveredThe schedule of funding progress, presented as required supplementary information (RSI) following the notes to the financial statements, present multi-year trend information about whether the actuarial values of plan assets are increasing or decreasing over time relative to the AAL’s for benefits. The projection of benefits for financial reporting does not explicitly incorporate the potential effects of legal or contractual funding limitations. Note 10. Other Post Employment Benefits (OPEB) (a) Plan Description In addition to providing the pension benefits described in Note 9, the City and Library (hereinafter City) provide post-employment health care benefits (OPEB) for retired employees. Hereinafter, the medical and dental plan benefits offered are referred to as the “Plan.” The Plan offers several medical and dental insurance benefit options to eligible retirees and their dependents. The benefits, benefit levels, employee contributions and employer contributions are governed by the City Council and can only be amended by the City Council. The Plan is not accounted for as a trust fund and an irrevocable trust has not been established. The City does not issue a Plan financial report. A-22 120
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 (b) Funding Policy The contribution requirements of plan members and the City are established and may be amended by the City Council and are detailed in the various plan benefit booklets provided to employees. The required contribution is based on projected pay-as-you-go financing requirements. For fiscal year 2012, the City contributed $63,488, representing current premiums. (c) Annual OPEB Cost and Net OPEB Obligation The City’s and Library’s annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the net OPEB obligation to the Plan: City Library*Annual required contribution (ARC) 94,954 $ 2,727 $Interest on net OPEB obligation 6,716 136 Adjustment to annual required contribution(3,620) - Annual OPEB cost98,050 2,863 Contribution made(63,488) - Increase in net OPEB obligation34,562 2,863 Net OPEB obligation beginning of year134,326 2,743 Net OPEB obligation end of year168,888$ 5,606 $*The Library did not report a liability prior to 4/30/2011.The annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2012 was as follows: PercentageAnnual of AnnualFiscal Year OPEB OPEB Cost Net OPEBEnding Cost Contributed ObligationCity:04/30/2012 98,050 $ 64.8% 168,888 $04/30/2011 89,201 71.2% 134,326 04/30/2010 87,986 25.0% 108,613 Library:04/30/2012 2,863 $ 0.0% 5,606 $04/30/2011 2,743 0.0% 2,743 CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 (d) Funded Status and Funding Progress As of April 30, 2011 (latest actuarial valuation date), the City’s plan was 100% unfunded. The actuarial accrued liability for benefits was $1,495,528, and the actuarial value of assets was $0 (zero), resulting in an unfunded actuarial accrued liability (UAAL) of $1,495,528. The covered payroll (annual payroll of active employees covered by the plan) was $19,037,921, and the ratio of the UAAL to the covered payroll was 7.86 percent. As of the same date, the Library’s plan was 100% unfunded. The actuarial accrued liability for benefits was $22,590, and the actuarial value of assets was $0 (zero), resulting in an unfunded actuarial accrued liability (UAAL) of $22,590. The covered payroll (annual payroll of active employees covered by the plan) was $1,246,633, and the ratio of the UAAL to the covered payroll was 1.81 percent. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. (e) Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the April 30, 2011 actuarial valuation, the entry age actuarial cost method was used. The actuarial assumptions included a 5.0 percent investment rate of return (net of administrative expenses), which is a blended rate of the expected long-term investment returns on plan assets and on the employer's own investments calculated based on the funded level of the plan at the valuation date, and an annual healthcare cost trend rate of 8 percent initially, reduced by decrements to an ultimate rate of 6 percent ultimately. Both rates included a 3.0 percent inflation assumption. The actuarial value of assets was determined using market value. The UAAL is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at April 30, 2011 was 30 years. Note 11. Joint Ventures A summary of the City’s joint ventures is as follows: (a) Solid Waste Agency of Lake County The City is a member of the Solid Waste Agency of Lake County, Illinois (the Agency), a municipal joint action agency composed of 41 municipalities, Great Lakes Naval Training Center and Lake County. The Agency was formed in 1991. The purpose of the Agency is to implement a regional approach to A-23 121
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 solid waste management which addresses the economic, political and environmental issues in Lake County.The Agency is governed by a Board of Directors consisting of one official elected by each member. Each director has one vote. The Board of Directors determines the general policy of the Agency, makes all appropriations, approves contracts for solid waste disposal; adopts resolutions providing for the issuance of debt by the Agency; adopts by-laws, rules, and regulations; and exercises such powers and performs such duties as may be prescribed in the Agency agreement or the by-laws. The Executive Committee of the Agency consists of nine members of the Board of Directors elected by the Board. Each member is entitled to one vote on the committee. The Executive Committee may take any action not specifically reserved on the Board of Directors by the Act, the Agency agreement, or the by-laws.The City has no explicit and measurable equity interest in the Agency, although there does exist a residual interest in the Agency’s assets upon dissolution of the joint venture. The City has an ongoing financial responsibility for its share of the Agency’s liabilities. Each participant is liable for their share of any of the Agency’s contracts entered into while bound by the intergovernmental agreement until those contracts are paid off. To obtain the Agency’s financial statements, contact the Solid Waste Agency of Lake County, Illinois at 1311 N. Estes Street, Gurnee, Illinois 60031. (b) Northern Suburban Special Recreation Association (NSSRA) The City is a member of the Northern Suburban Special Recreation Association (NSSRA), which was organized by ten organizations in order to provide special recreation programs to the physically and mentally handicapped within their districts and to share the expenses of such programs on a cooperative basis. Each member’s 1999 contribution was determined based upon the ratio of the members’ assessed valuations. The NSSRA is governed by a Board of Directors which consists of one representative from each participating organization. Each Director has an equal vote. The representatives of NSSRA are appointed by the Board of Directors. The Board of Directors is the governing body of the NSSRA and is responsible for establishing all major policies and changes therein and for approving all budgets, capital outlay, programming, and master plans. The City has no explicit and measurable equity interest in the NSSRA, although there does exist a residual interest in the NSSRA’s assets upon dissolution of the joint venture. The City has an ongoing financial responsibility for its share of the NSSRA’s liabilities. Each participant is liable for their share of any of the NSSRA’s contracts entered into while bound by the intergovernmental agreement until those contracts are paid off. To obtain NSSRA’s financial statements, contact Northern Suburban Special Recreation Association at 3105 MacArthur Blvd., Northbrook, Illinois 60062. Note 12. Risk Management The City is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City accounts for its risk of loss in the Liability Insurance Fund through payments to the Intergovernmental Risk Management Agency. CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 (a) Intergovernmental Risk Management Agency (IRMA) The City participates in the Intergovernmental Risk Management Agency (IRMA). IRMA is an organization of municipalities and special districts in Northeastern Illinois which have formed an association under the Illinois Intergovernmental Cooperation Statute to pool their risk management needs. The agency administers a mix of self-insurance and commercial insurance coverages; property/casualty and workers’ compensation claim administration/ litigation management services; unemployment claim administration; extensive risk management/loss control consulting and training programs; and a risk information system and financial reporting service for its members. The City’s payments to IRMA are displayed on the financial statements as expenditures/expenses in appropriate funds. The City assumes the first $25,000 of each occurrence, and IRMA has a mix of self-insurance and commercial insurance at various amounts above that level. Each member appoints one delegate, along with an alternate delegate, to represent the member on the Board of Directors. The government does not exercise any control over the activities of IRMA beyond its representation on the Board of Directors. Initial contributions are determined each year based on the individual member’s eligible revenue as defined in the by-laws of IRMA and experience modification factors based on past member loss experience. Members have a contractual obligation to fund any deficit of IRMA attributable to a membership year during which they were a member. Supplemental contributions may be required to fund these deficits. Beginning of Claims andEnd ofFiscal Year Changes in Claim Fiscal YearLiability Estimates Payments Liability2010-201119,589$ 260,033$200,308 $79,314$2011-201279,314 236,005 251,533 63,786(b) City of Lake Forest Medical and Dental Plan The City established the City of Lake Forest Medical and Dental Plan, a self-insurance plan providing health insurance for all employees of the City, effective January 1, 2000. Administration of the Plan is provided by Professional Benefit Administrators, Inc. (an outside agency). Liabilities are reported when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. An excess coverage insurance policy covers total claims in excess of $100,000 per participant in a plan year. Liabilities include all amounts for claims, including incremental costs that have been incurred but not reported (IBNR) and are reported in the Self Insurance Fund (internal service fund). A-24 122
CITY OF LAKE FOREST, ILLINOIS
Notes to Financial Statements
April 30, 2012
62 (Concluded)
Changes in the balances of claims liabilities for the years ended April 30, 2012 and 2011 are as
follows:
Beginning of End of
Fiscal Year Changes in Claim Fiscal Year
Liability Estimates Payments Liability
2010-2011 256,753 $ 3,842,866 $ 3,582,996 $ 516,623 $
2011-2012 516,623 3,681,121 3,725,959 471,785
The City has not had significant reductions in insurance coverage during the year nor did settlements
exceed insurance coverage in any of the last three years.
Note 13. Commitments and Contingencies
As of April 30, 2012 management knows of no claim, asserted or unasserted, which if asserted and paid,
would have a materially adverse effect on the financial position of the various funds of the City.
The City has outstanding construction contracts with contractors totaling $105,842 at April 30, 2012.
A-25 123
APPENDIX B
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
1.The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for
the Bonds (the “Securities”). The Securities will be issued as fully-registered securities registered in the name of Cede
& Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC.
One fully-registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal
amount of such issue, and will be deposited with DTC.
2.DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the
New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of
the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code,
and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934.
DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and
municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct
Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and
other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges
between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates.
Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing
Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed
Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its
regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities
brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has Standard &
Poor’s rating: 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.
3.Purchases of Securities under the DTC system must be made by or through Direct Participants, which
will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each
Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial
Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected
to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings,
from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their
ownership interests in Securities, except in the event that use of the book-entry system for the Securities is
discontinued.
4.To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are
registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an
authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede &
Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the
actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose
accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect
Participants will remain responsible for keeping account of their holdings on behalf of their customers.
B-1 124
5.Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants
to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of
significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to
the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding
the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative,
Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be
provided directly to them.
6.Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being
redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be
redeemed.
7.Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to
Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual
procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited
on the record date (identified in a listing attached to the Omnibus Proxy).
8.Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede &
Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit
Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the City or the
Paying Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by
Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in “street name,” and will be the
responsibility of such Participant and not of DTC, the Paying Agent, or the City, 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 City or the Paying Agent, disbursement of such payments to Direct Participants will be the
responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct
and Indirect Participants.
9.A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its
Participant, to any Tender/Remarketing Agent, and shall effect delivery of such Securities by causing the Direct
Participant to transfer the Participant’s interest in the Securities, on DTC’s records, to any Tender/Remarketing Agent.
The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will
be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC’s records
and followed by a book-entry credit of tendered Securities to any Tender/Remarketing Agent’s DTC account.
10.DTC may discontinue providing its services as depository with respect to the Securities at any time by
giving reasonable notice to the City or the Paying Agent. Under such circumstances, in the event that a successor
depository is not obtained, Security certificates are required to be printed and delivered.
11.The City may decide to discontinue use of the system of book-entry-only transfers through DTC (or a
successor securities depository). In that event, Security certificates will be printed and delivered to DTC.
12.The information in this section concerning DTC and DTC’s book-entry system has been obtained from
sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof.
B-2 125
_______________, 2013
The City Council
of The City of Lake Forest, Illinois
Dear Members:
We have examined a record of proceedings relating to the issuance of
$______,000 principal amount of General Obligation Refunding Bonds, Series 2013 (the
“Bonds”) of The City of Lake Forest, a municipal corporation and a home rule unit of the State
of Illinois. The Bonds are authorized and issued pursuant to the provisions of Section 6 of
Article VII of the Illinois Constitution of 1970, and by virtue of an ordinance adopted by the City
Council of the City on September 16, 2013, and entitled: “Ordinance Authorizing the Issuance
of General Obligation Refunding Bonds, Series 2013, of The City of Lake Forest, Illinois” (the
“Bond Ordinance”).
The Bonds are issuable in the form of fully registered bonds in the denominations
of $5,000 or any integral multiple thereof. Bonds delivered on original issuance are dated
_______________, 2013. The Bonds mature on December 15 in each of the following years in
the respective principal amount set opposite each such year in the following table, and the Bonds
maturing in each such year bear interest from their date payable on June 15, 2014 and
semiannually thereafter on each June 15 and December 15 at the respective rate of interest per
annum set forth opposite such year:
Year Principal Amount Interest Rate
20__ $ ,000 . %
20__ ,000
20__ ,000
20__ ,000
20__ ,000
20__ ,000
20__ ,000
20__ ,000
20__ ,000
20__ ,000
20__ ,000
20__ ,000
20__ ,000
The Bonds maturing on or after December 15, 2022 are subject to redemption
prior to maturity at the option of the City, in such principal amounts and from such maturities as
the City shall determine, and by lot within a single maturity, on December 15, 2021 and on any
date thereafter, at a redemption price equal to the principal amount thereof to be redeemed.
APPENDIX C
PROPOSED FORM OF OPINION OF BOND COUNSEL
C-1 126
The Bonds maturing in the years 20__, 20__, 20__ and 20__ (the “Term Bonds”)
are subject to mandatory redemption, in part and by lot, on December 15 of the years and in the
respective principal amounts set forth in the following tables, by the application of sinking fund
installments, at a redemption price equal to the principal amount thereof to be redeemed:
20__ Term Bonds 20__ Term Bonds 20__ Term Bonds 20__ Term Bonds
Year
Principal
Amount Year
Principal
Amount Year
Principal
Amount Year
Principal
Amount
20__ $___,000 20__ $___,000 20__ $___,000 20__ $___,000
In our opinion, the Bonds are valid and legally binding general obligations of The
City of Lake Forest and the City is obligated to levy ad valorem taxes upon all the taxable
property within the City for the payment of the Bonds and the interest thereon without limitation
as to rate or amount. However, the enforceability of rights or remedies with respect to the Bonds
may be limited by bankruptcy, insolvency or other laws affecting creditors’ rights and remedies
heretofore or hereafter enacted.
We are of the opinion that under existing law, interest on the Bonds is not
includable in the gross income of the owners thereof for Federal income tax purposes. If there is
continuing compliance with the requirements of the Internal Revenue Code of 1986 (the
“Code”), we are of the opinion that interest on the Bonds will continue to be excluded from the
gross income of the owners thereof for Federal income tax purposes. We are further of the
opinion that the Bonds are not “private activity bonds” within the meaning of Section 141(a) of
the Code. Accordingly, interest on the Bonds is not an item of tax preference for purposes of
computing individual or corporate alternative minimum taxable income. However, interest on
the Bonds is includable in corporate earnings and profits and therefore must be taken into
account when computing corporate alternative minimum taxable income for purposes of the
corporate alternative minimum tax.
The Code contains certain requirements that must be satisfied from and after the
date hereof in order to preserve the exclusion from gross income for Federal income tax purposes
of interest on the Bonds. These requirements relate to the use and investment of the proceeds of
the Bonds, the payment of certain amounts to the United States, the security and source of
payment of the Bonds and the use of the property financed with the proceeds of the Bonds. The
City has covenanted in the Bond Ordinance to comply with these requirements.
Pursuant to the Bond Ordinance, the City has designated the Bonds as “qualified
tax-exempt obligations” as defined in Section 265(b)(3)(B) of the Code.
Interest on the Bonds is not exempt from Illinois income taxes.
Very truly yours,
LG/be
C-2 127
APPENDIX D
CITY OF LAKE FOREST
LAKE COUNTY, ILLINOIS
EXCERPTS OF FISCAL YEAR 2012 AUDITED FINANCIAL STATEMENTS
RELATING TO THE CITY’S PENSION PLANS AND OTHER POSTEMPLOYMENT BENEFITS
128
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 Note 8. Capital Lease The City of Lake Forest Public Library has entered into a lease agreement as lessee for financing technology equipment to the Library. The lease is due in installments through its maturity on December 11, 2012 at an annual interest rate of 1.0%. The lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of the future minimum lease payments as of the inception date.The assets acquired through the capital lease are as follows: Lake ForestLibraryAssets:Improvements other than buildings 91,389$Less: accumulated depreciation (76,157)Total15,232$The future minimum lease obligations and the net present value of these minimum lease payments as of April 30, 2012 were as follows: Lake ForestYear Ending April 30 Library201321,747$Less: Amount representing interest (87)Present value of minimum lease payments 21,660$Note 9. Retirement Fund Commitments Illinois Municipal Retirement Fund (a) Plan Description The City contributes to the Illinois Municipal Retirement Fund (IMRF), a defined benefit pension plan, which provides retirement, disability, annual cost of living adjustments, and death benefits to plan members and beneficiaries. IMRF is an agent multiple-employer public retirement system that acts as a common investment and administrative agent for local governments and school districts in Illinois. All employees, except those covered by the police and fire pension plans, hired in positions that meet or exceed the prescribed annual hourly standard, must be enrolled in IMRF as participating members. Benefit provisions are established by statute and may only be changed by the General Assembly of the State of Illinois. IMRF issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained on-line at www.imrf.org or by writing to the Illinois Municipal Retirement Fund, 2211 York Road, Suite 500, Oak Brook, Illinois 60523. CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 (b) Funding Policy As set by statute, employer regular plan members are required to contribute 4.50 percent of their annual covered salary. The statutes require employers to contribute the amount necessary, in addition to member contributions, to finance the retirement coverage of its own employees. The employer contribution rate for calendar year 2012 and 2011 were 11.88 percent and 11.69 percent of annual covered payroll, respectively. The City also contributes for disability benefits, death benefits and supplemental retirement benefits, all of which are pooled at the IMRF level. Contribution rates for disability and death benefits are set by the IMRF Board of Trustees, while the supplemental retirement benefits rate is set by statute. (c) Annual Pension Cost The City’s annual pension cost of $1,893,946 for the regular plan was equal to the City’s required and actual contributions. (d) Trend Information Fiscal Annual PercentageYear pension of APC Net pensionending cost (APC) contributed obligation2012 1,893,946 $ 100 %-$2011 1,944,067 100-2010 1,961,263 100-The required contributions for 2012 and 2011 were determined as part of the December 31, 2009 actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included (a) 7.5 percent investment rate of return (net of administrative and direct investment expenses), (b) projected salary increases of 4.00% a year, attributable to inflation, (c) additional projected salary increases ranging from 0.4% to 10% per year depending on age and service, attributable to seniority/merit, and (d) post retirement benefit increases of 3% annually. The actuarial value of the City’s regular plan assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a five-year period with a 20% corridor between the actuarial and market value of assets. The plan’s unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on an open 30 year basis. (e) Funded Status and Funding Progress As of December 31, 2011, the most recent actuarial valuation date, the regular plan was 62.73 percent funded. The actuarial liability for benefits was $44,405,755 and the actuarial value of assets was $27,857,081 resulting in an unfunded actuarial accrued liability (UAAL) of $16,548,674. The covered payroll (annual payroll of active employees covered by the plan) was $16,261,976 and the ratio of the UAAL to the covered payroll was 102 percent. The schedule of funding progress, presented as RSI following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. D-1 129
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 Police Pension and Firefighters’ Pension Plans (a) Plan Descriptions The City contributes to two single-employer defined benefit pension plans: the Police Pension Plan and the Firefighters’ Pension Plan (Plans). Each plan provides retirement, disability, and death benefits, and annual cost-of-living adjustments to plan members and beneficiaries. Sworn Police and Fire personnel are covered by the Plans. Although these are single-employer pension plans, the defined benefits and employee and employer contribution levels are governed by Illinois Compiled Statutes and may be amended only by the Illinois legislature. The City accounts for the Plans as Pension Trust Funds. The City does not, however, separately issue financial reports for the Plans. Membership of each plan consisted of the following at April 30, 2012: Police Firefighters' Pension PensionRetirees and beneficiaries currently receiving benefits 33 32Terminated employees entitled to but not yet receiving benefits 3 -Active plan members 39 33Total 75 65(b) Summary of Significant Accounting Policies and Plan Asset Matters Basis of Accounting – The financial statements are prepared using the accrual basis of accounting. Employee and employer contributions are recognized when due, pursuant to formal commitments, as well as statutory or contractual requirements. Benefits and refunds are recognized when due and payable in accordance with the terms of each plan. Administrative costs are financed through investment earnings. Method Used to Value Investments – Investments are reported at fair value. Short-term investments are reported at cost, which approximates fair value. Securities traded on a national exchange are valued at the last reported sales price. The fair value of real estate investments is based on independent appraisals. Investments that do not have an established market are reported at estimated fair value. Significant Investments – The Police Pension Fund has no significant investments (other than U.S. Government and U.S. Government-guaranteed obligations) in any one organization that represent 5% or more of net assets available for benefits. The Firefighters’ Pension Fund has $1,348,133 invested in the Tennessee Valley Authority and $1,708,143 invested in FNMA securities which represents 5% and 6.4%, respectively, of plan net assets at April 30, 2012. (c) Funding Policy and Annual Pension Cost Covered police pension eligible employees are required to contribute 9.91% of their base salary to the Police Pension Plan. If an employee leaves covered employment with less than 20 years of service, accumulated employee contributions may be refunded without accumulated interest. The City is required to contribute the remaining amounts necessary to finance the plan as actuarially determined by an enrolled actuary. CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 By the year 2033, the City’s contributions must accumulate to the point where the past service cost for the Police Pension Plan is fully funded. Actuarial valuations are performed annually. Covered firefighters’ pension eligible employees are required to contribute 9.455% of their salary to the Firefighters’ Pension Plan. If an employee leaves covered employment with less than 20 years of service, accumulated employee contributions may be refunded without accumulated interest. The City is required to contribute the remaining amounts necessary to finance the plan as actuarially determined by an enrolled actuary. By the year 2033, the City’s contributions must accumulate to the point where the past service cost for the Firefighters’ Pension Plan is fully funded. Actuarial valuations are performed annually. The City’s annual pension cost and net pension asset for the Police and Firefighters’ Pension Plans for fiscal year 2012 were as follows: Police Firefighters' Pension PensionAnnual required contribution 1,372,431 $ 862,452 $ Interest on net pension obligation (51,048) (26,622) Adjustment to annual required contribution 38,966 19,252 Annual pension cost 1,360,349 855,082 Contributions made 1,515,074 983,298 Increase in net pension asset 154,725 128,216 Net pension asset at April 30, 2011 681,484 354,327 Net pension asset at April 30, 2012 836,209 $ 482,543 $ The net pension assets are reported by the City in the government-wide Statement of Net Assets. Other related information is as follows: Police Pension Firefighters' Pension Contribution rates - City 45.10% 33.43%Contribution rates - plan members 9.91% 9.46%Actuarial valuation date 4/30/12 4/30/12Actuarial cost method Entry Age Entry AgeAmortization method Level Percentage Level Percentageof pay, closed of pay, closedRemaining amortization period 21 years 21 yearsAsset valuation method Market MarketActuarial assumptions:Investment rate of return 7.50% 7.50%Projected salary increases* 5.50% 5.50%*Includes inflation at 3.00% 3.00%Cost-of-living adjustments 3.00% per year 3.00% per year
D-2 130
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 (d) Plan Financial Statements Following are condensed financial statements for the Police and Firefighters’ Pension Plans as of and for the year ended April 30, 2012: PoliceFirefighters'Pension Pension Assets:Cash and cash equivalents 237,332 $ 1,984,618 $Investments 21,895,242 24,812,102 Other receivables 1,150 110,339 Prepaid expenses 6,509 4,991 Total assets 22,140,233 26,912,050 Liabilities:Accounts payable 8,859 13,029 Net assets:Held in trust for pension benefits 22,131,374 $ 26,899,021 $Additions:Employer contributions 1,515,074 $ 983,298 $Employee contributions 338,575 278,048 Interest income 203,401 824,236 Net appreciation in fair value of investments 353,373 682,086 Less investment expenses (102,677) (76,141) Total additions 2,307,746 2,691,527 Deductions:Pension benefits and refunds 1,682,292 1,463,983 Administrative expenses 5,800 5,800 Total deductions 1,688,092 1,469,783 Changes in net assets 619,654 1,221,744 Net assets held in trust at beginning of year 21,511,720 25,677,277 Net assets held in trust at end of year 22,131,374 $ 26,899,021 $Statement of Fiduciary Net AssetsStatement of Changes in Fiduciary Net AssetsCITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 (e) Three Year Trend Information AnnualNetYear PensionPensionEnding Cost (APC)AssetPolice Pension: 4/30/12 1,360,349 $ 111.4 % 836,209 $4/30/11 1,390,988 101.6681,484 4/30/10 1,113,386 101.4659,742 Firefighters' Pension: 4/30/12 855,082 $ 115.0 % 482,543 $4/30/11 948,412 101.3354,327 4/30/10 755,444 107.2341,889 contributedof APCPercentage(f) Funded Status and Funding Progress – Pension Trust FundsThe funded status of the Police and Firefighters’ Pension Plans as of April 30, 2012, the most recent actuarial valuation date, is as follows: (1)(2)(2)–(1)Actuarial Actuarial Accrued Unfunded (1)/(2)(3)Value of Liability (AAL) AAL Funded CoveredAssets Entry Age (UAAL) RatioPayrollPolice 22,131,376 $ 39,409,677 $ 17,278,301 $56.2 % 3,359,679 $ 514.3 %Firefighters' 26,899,022 33,789,869 6,890,847 79.6 2,941,767 234.2 Payroll((2-1)/3)UAAL as aPercentage ofCoveredThe schedule of funding progress, presented as required supplementary information (RSI) following the notes to the financial statements, present multi-year trend information about whether the actuarial values of plan assets are increasing or decreasing over time relative to the AAL’s for benefits. The projection of benefits for financial reporting does not explicitly incorporate the potential effects of legal or contractual funding limitations. Note 10. Other Post Employment Benefits (OPEB) (a) Plan Description In addition to providing the pension benefits described in Note 9, the City and Library (hereinafter City) provide post-employment health care benefits (OPEB) for retired employees. Hereinafter, the medical and dental plan benefits offered are referred to as the “Plan.” The Plan offers several medical and dental insurance benefit options to eligible retirees and their dependents. The benefits, benefit levels, employee contributions and employer contributions are governed by the City Council and can only be amended by the City Council. The Plan is not accounted for as a trust fund and an irrevocable trust has not been established. The City does not issue a Plan financial report. D-3 131
CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 (b) Funding Policy The contribution requirements of plan members and the City are established and may be amended by the City Council and are detailed in the various plan benefit booklets provided to employees. The required contribution is based on projected pay-as-you-go financing requirements. For fiscal year 2012, the City contributed $63,488, representing current premiums. (c) Annual OPEB Cost and Net OPEB Obligation The City’s and Library’s annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the net OPEB obligation to the Plan: City Library*Annual required contribution (ARC) 94,954 $ 2,727 $Interest on net OPEB obligation 6,716 136 Adjustment to annual required contribution (3,620) - Annual OPEB cost98,050 2,863 Contribution made(63,488) - Increase in net OPEB obligation34,562 2,863 Net OPEB obligation beginning of year134,326 2,743 Net OPEB obligation end of year168,888$ 5,606 $*The Library did not report a liability prior to 4/30/2011.The annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2012 was as follows: PercentageAnnual of AnnualFiscal Year OPEB OPEB Cost Net OPEBEnding Cost Contributed ObligationCity:04/30/2012 98,050 $ 64.8% 168,888 $04/30/2011 89,201 71.2% 134,326 04/30/2010 87,986 25.0% 108,613 Library:04/30/2012 2,863 $ 0.0% 5,606 $04/30/2011 2,743 0.0% 2,743 CITY OF LAKE FOREST, ILLINOIS Notes to Financial Statements April 30, 2012 (d) Funded Status and Funding Progress As of April 30, 2011 (latest actuarial valuation date), the City’s plan was 100% unfunded. The actuarial accrued liability for benefits was $1,495,528, and the actuarial value of assets was $0 (zero), resulting in an unfunded actuarial accrued liability (UAAL) of $1,495,528. The covered payroll (annual payroll of active employees covered by the plan) was $19,037,921, and the ratio of the UAAL to the covered payroll was 7.86 percent. As of the same date, the Library’s plan was 100% unfunded. The actuarial accrued liability for benefits was $22,590, and the actuarial value of assets was $0 (zero), resulting in an unfunded actuarial accrued liability (UAAL) of $22,590. The covered payroll (annual payroll of active employees covered by the plan) was $1,246,633, and the ratio of the UAAL to the covered payroll was 1.81 percent. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. (e) Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the April 30, 2011 actuarial valuation, the entry age actuarial cost method was used. The actuarial assumptions included a 5.0 percent investment rate of return (net of administrative expenses), which is a blended rate of the expected long-term investment returns on plan assets and on the employer's own investments calculated based on the funded level of the plan at the valuation date, and an annual healthcare cost trend rate of 8 percent initially, reduced by decrements to an ultimate rate of 6 percent ultimately. Both rates included a 3.0 percent inflation assumption. The actuarial value of assets was determined using market value. The UAAL is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at April 30, 2011 was 30 years. Note 11. Joint Ventures A summary of the City’s joint ventures is as follows: (a) Solid Waste Agency of Lake County The City is a member of the Solid Waste Agency of Lake County, Illinois (the Agency), a municipal joint action agency composed of 41 municipalities, Great Lakes Naval Training Center and Lake County. The Agency was formed in 1991. The purpose of the Agency is to implement a regional approach to D-4 132
Exhibit B-3CITY OF LAKE FOREST, ILLINOISRequired Supplementary Information – Schedules of Funding ProgressLast Six Fiscal YearsUnfundedActuarial (assets inActuarial accrued excess of) PercentageActuarial value of liability (AAL) AAL Funded Covered of coveredvaluation assets Entry Age (UAAL) ratio payroll payrolldate (a) (b) (b-a) (a/b) (c) ((b-a)/c)Illinois Municipal Retirement Fund (1):12/31/2011 27,857,081 $ 44,405,755 $ 16,548,674 $ 62.7 % 16,261,976 $ 101.8 %12/31/2010 39,595,430 50,163,288 10,567,858 78.9 16,762,932 63.012/31/2009 38,670,158 49,164,282 10,494,124 78.7 17,499,712 60.012/31/2008 35,762,935 46,155,124 10,392,189 77.5 17,062,328 60.912/31/2007 41,096,546 42,354,583 1,258,037 97.0 16,049,536 7.812/31/2006 38,420,853 39,364,751 943,898 97.6 15,070,275 6.3Police Pension Plan:04/30/2012 22,131,376 39,409,677 17,278,301 56.2 3,359,679 514.3 04/30/2010 19,379,115 36,428,208 17,049,093 53.2 3,322,493 513.1 04/30/2009 16,793,784 35,110,838 18,317,054 47.8 3,283,760 557.804/30/2008 19,004,088 32,815,313 13,811,225 57.9 3,162,441 436.704/30/2007 18,656,644 30,916,934 12,260,290 60.3 3,041,336 403.1Firefighters' Pension Plan:04/30/2012 26,899,022 33,789,869 6,890,847 79.6 2,941,767 234.2 04/30/2010 23,612,253 30,523,996 6,911,743 77.4 2,644,320 261.4 04/30/2009 21,579,941 29,497,144 7,917,203 73.2 2,926,591 270.504/30/2008 22,913,950 27,739,010 4,825,060 82.6 2,855,889 169.004/30/2007 22,052,150 25,853,195 3,801,045 85.3 2,626,922 144.7(1) Includes City and Library employeesExhibit B-4CITY OF LAKE FOREST, ILLINOISRequired Supplementary Information – Schedules of Employer ContributionsLast Six Fiscal YearsPolice Pension Plan AnnualFiscal Employer required PercentageYear Contributions contribution contributed4/30/12 1,515,074$ 1,372,431$110.4%4/30/11 1,412,730 1,405,652 100.54/30/10 1,128,592 1,128,050 100.04/30/09 1,038,121 1,025,521 101.2 4/30/08 928,718 917,388 101.24/30/07 868,271 861,380 100.8Firefighters' Pension Plan AnnualFiscal Employer required PercentageYear Contributions contribution contributed4/30/12 983,298$ 862,452$114.0%4/30/11 960,850 954,946 100.64/30/10 810,129 761,978 106.34/30/09 701,472 662,323 105.9 4/30/08 610,671 608,241 100.44/30/07 554,050 536,870 103.2
D-5 133
67
Exhibit B-5
CITY OF LAKE FOREST, ILLINOIS
Required Supplementary Information
Other Post-Employment Benefits
Schedule of Funding Progress - City UAAL
Unfunded as a
Actuarial Actuarial Percentage
Value Actuarial Accrued of Annual
Actuarial of Accrued Liability Funded Covered Covered
Valuation Assets Liability (UAAL) Ratio Payroll Payroll
Date (a) (b) (b) - (a) (a)/(b) (c) ((b - a) / c)
04/30/2011 -$ 1,495,528 $ 1,495,528 $ -$ % 19,037,921 $ 7.86 %
04/30/2010 - 1,552,739 1,552,739 - 19,542,175 7.95
04/30/2009 - 1,552,739 1,552,739 - 19,542,175 7.95
Schedule of Funding Progress - Library UAAL
Unfunded as a
Actuarial Actuarial Percentage
Value Actuarial Accrued of Annual
Actuarial of Accrued Liability Funded Covered Covered
Valuation Assets Liability (UAAL) Ratio Payroll Payroll
Date (a) (b) (b) - (a) (a)/(b) (c) ((b - a) / c)
04/30/2011 -$ 22,590 $ 22,590 $ - % 1,246,633 $ 1.81 %
Schedule of Employer Contributions - City
Actuarial
Valuation Employer Required Percentage
Date Contributions Contribution Contributed
04/30/2012 63,488 $ 94,954 $ 66.9 %
04/30/2011 63,488 89,201 71.2
04/30/2010 22,001 87,986 25.0
04/30/2009 45,358 87,986 51.6
Schedule of Employer Contributions - Library
Actuarial
Valuation Employer Required Percentage
Date Contributions Contribution Contributed
04/30/2012 -$ 2,727 $ -%
04/30/2011 - 2,743 -
Information is presented for as many years as is available The City implemented
GASB Statement No. 45 in fiscal year 2009.
D-6 134
OFFICIAL BID FORM
(Open Speer Auction)
City of Lake Forest September 16, 2013
220 East Deerpath Speer Financial, Inc.
Lake Forest, Illinois 60045
City Council Members:
For the $9,840,000* General Obligation Refunding Bonds, Series 2013, (the “Bonds”), of the City of Lake Forest, Lake County, Illinois (the “City”), as
described in the annexed Official Notice of Sale, which is expressly made a part of this bid, we will pay you $_______________________ (no less than
$9,761,280) for Bonds bearing interest as follows (each rate a multiple of 1/8 or 1/100 of 1%). The premium or discount is subject to adjustment allowing the
same gross spread per $1,000 bond as bid herein and assuming a delivery date of October 3, 2013.
MATURITIES* – DECEMBER 15
$ 65,000 ............ 2014 ______% $430,000.............. 2020 ______% $ 495,000 ......... 2027 ______%
100,000 ............ 2015 ______% 435,000.............. 2021 ______% 930,000 ......... 2028 ______%
******* ............ **** 440,000.............. 2022 ______% 960,000 ......... 2029 ______%
100,000 ............ 2017 ______% 450,000.............. 2023 ______% 1,085,000 ......... 2030 ______%
200,000 ............ 2018 ______% 460,000.............. 2024 ______% 1,120,000 ......... 2031 ______%
350,000 ............ 2019 ______% 475,000.............. 2025 ______% 1,265,000 ......... 2032 ______%
480,000.............. 2026 ______%
Any consecutive maturities may be aggregated into term bonds at the option of the bidder,
in which case the mandatory redemption provisions shall be on the same schedule as above.
Maturities: _______ Term Maturity _______ Maturities: _______ Term Maturity _______ Maturities: _______ Term Maturity _______
Maturities: _______ Term Maturity _______ Maturities: _______ Term Maturity _______
The Bonds are to be executed and delivered to us in accordance with the terms of this bid accompanied by the approving legal opinion of Katten Muchin
Rosenman LLP, Chicago, Illinois. The City will pay for the legal opinion. The underwriter agrees to apply for CUSIP numbers within 24 hours and pay the fee
charged by the CUSIP Service Bureau and will accept the Bonds with the CUSIP numbers as entered on the Bonds.
As evidence of our good faith, we enclose herewith a check or Surety Bond payable to the order of the Treasurer of the City in the amount of TWO
PERCENT OF PAR (the “Deposit”) under the terms provided in your Official Notice of Sale. Attached hereto is a list of members of our account on whose behalf
this bid is made.
Form of Deposit Account Manager Information Bidders Option Insurance
Check One:
Name
Certified/Cashier’s Check [ ]
Financial Surety Bond [ ] Address
Wire Transfer [ ]
By
Amount: $196,800
City State/Zip
Direct Phone ( )
FAX Number ( )
E-Mail Address
The foregoing bid was accepted and the Bonds sold by ordinance of the City on September 16, 2013, and receipt is hereby acknowledged of the good
faith Deposit which is being held in accordance with the terms of the annexed Official Notice of Sale.
CITY OF LAKE FOREST, LAKE COUNTY, ILLINOIS
*Subject to change. Mayor
----------------------- NOT PART OF THE BID -----------------------
(Calculation of true interest cost)
Bid Post Sale Revision
Gross Interest $
Less Premium $
True Interest Cost $
True Interest Rate % %
TOTAL BOND YEARS 136,563.00
AVERAGE LIFE 13.878 Years Years
We have purchased
insurance from:
Name of Insurer
(Please fill in)
_____________________
Premium: _____________
Maturities: (Check One)
[__] ______________Years
[__] All
135
OFFICIAL NOTICE OF SALE
$9,840,000*
CITY OF LAKE FOREST
Lake County, Illinois
General Obligation Refunding Bonds, Series 2013
(Open Speer Auction)
The City of Lake Forest, Lake County, Illinois (the “City”), will receive open auction electronic bids on the SpeerAuction (“SpeerAuction”)
website address “www.SpeerAuction.com” for its $9,840,000* General Obligation Refunding Bonds, Series 2013 (the “Bonds”), on an all or none basis
between 10:45 A.M. and 11:00 A.M., C.D.T., Monday, September 16, 2013. To bid, bidders must have: (1) completed the registration form on the
SpeerAuction website, and (2) requested and received admission to the City’s sale (as described below). Award will be made or all bids rejected at a
meeting of the City Council to be held on that date. The City reserves the right to change the date or time for receipt of bids. Any such change shall be
made not less than twenty-four (24) hours prior to the revised date and time for receipt of the bids for the Bonds and shall be communicated by publishing
the changes in the Amendments Page of the SpeerAuction webpage and through Thompson Municipal News.
The Bonds will constitute valid and legally binding general obligations of the City payable both as to principal and interest from ad valorem
taxes levied against all taxable property in the City 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, moratorium, reorganization and other similar laws affecting creditors’ rights and by
equitable principles, whether considered at law or in equity, including the exercise of judicial discretion.
Bidding Details
Bidders should be aware of the following bidding details associated with the sale of the Bonds.
(1) All bids must be submitted on the SpeerAuction website at www.SpeerAuction.com. No telephone, telefax or personal
delivery bids will be accepted. The use of SpeerAuction shall be at the bidder’s risk and expense and the City shall have
no liability with respect thereto, including (without limitation) liability with respect to incomplete, late arriving and non-
arriving bid. Any questions regarding bidding on the SpeerAuction website should be directed to the Auction
Administrator, Grant Street Group, at (412) 391-5555 x 370.
(2) If any new bid in the auction becomes a leading bid two (2) minutes prior to the end of the auction, then the auction will be
automatically extended by two (2) minutes from the time such bid was received by SpeerAuction. The auction end time will
continue to be extended, indefinitely, until a single leading bid remains the leading bid for at least two minutes.
(3) Bidders may change and submit bids as many times as they like during the bidding time period; provided, however, each
and any bid submitted subsequent to a bidder’s initial bid must result in a lower true interest cost (“TIC”) with respect to a
bid, when compared to the immediately preceding bid of such bidder. In the event that the revised bid does not produce a
lower TIC with respect to a bid, the prior bid will remain valid.
(4) The last bid submitted by a bidder before the end of the bidding time period will be compared to all other final bids
submitted by others to determine the winning bidder or bidders.
(5) During the bidding, no bidder will see any other bidder’s bid, but bidders will be able to see the ranking of their bid relative
to other bids (i.e., “Leader”, “Cover”, “3rd” etc.)
(6) On the Auction Page, bidders will be able to see whether a bid has been successfully submitted.
Rules of SpeerAuction
Bidders must comply with the Rules of SpeerAuction in addition to the requirements of this Official Notice of Sale. To the extent there is a
conflict between the Rules of SpeerAuction and this Official Notice of Sale, this Official Notice of Sale shall control.
*Subject to change.
136
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
Official Notice of Sale, Page 2 of 4
*Subject to change.
Rules
(1) A bidder (“Bidder”) submitting a winning bid (“Winning Bid”) is irrevocably obligated to purchase the Bonds at the rates
and prices of the winning bid, if acceptable to the City, as set forth in the related Official Notice of Sale. Winning Bids are
not officially awarded to Winning Bidders until formally accepted by the City.
(2) Neither the City, Speer Financial, Inc., nor Grant Street Group (the “Auction Administrator”) is responsible for
technical difficulties that result in the loss of the Bidder’s internet connection with SpeerAuction, slowness in
transmission of bids, or other technical problems.
(3) If for any reason a Bidder is disconnected from the Auction Page during the auction after having submitted a Winning Bid,
such bid is valid and binding upon such Bidder, unless the City exercises its right to reject bids, as set forth herein.
(4) Bids which generate error messages are not accepted until the error is corrected and the bid is received prior to the
deadline.
(5) Bidders accept and agree to abide by all terms and conditions specified in the Official Notice of Sale (including
amendments, if any) related to the auction.
(6) Neither the City, Speer Financial, Inc., nor the Auction Administrator is responsible to any bidder for any defect or
inaccuracy in the Official Notice of Sale, amendments, or Preliminary Official Statement as they appear on SpeerAuction.
(7) Only Bidders who request and receive admission to an auction may submit bids. SpeerAuction and the Auction
Administrator reserve the right to deny access to SpeerAuction website to any Bidder, whether registered or not, at any time
and for any reason whatsoever, in their sole and absolute discretion.
(8) Neither the City, Speer Financial, Inc., nor the Auction Administrator is responsible for protecting the confidentiality of a
Bidder’s SpeerAuction password.
(9) If two bids submitted in the same auction by two or more different Bidders result in same True Interest Cost, the first
confirmed bid received by SpeerAuction prevails. Any change to a submitted bid constitutes a new bid, regardless of
whether there is a corresponding change in True Interest Cost.
(10) Bidders must compare their final bids to those shown on the Observation Page immediately after the bidding time period
ends, and if they disagree with the final results shown on the Observation Page they must report them to the Auction
Administrator within 15 minutes after the bidding time period ends. Regardless of the final results reported by
SpeerAuction, Bonds are definitively awarded to the winning bidder only upon official award by the City. If, for any
reason, the City fails to: (i) award Bonds to the winner reported by SpeerAuction, or (ii) deliver Bonds to winning bidder
at settlement, neither the City, Speer Financial, Inc., nor the Auction Administrator will be liable for damages.
The City reserves the right to reject all proposals, to reject any bid proposal not conforming to this Official Notice of Sale, and to waive any
irregularity or informality with respect to any proposal. Additionally, the City reserves the right to modify or amend this Official Notice of Sale; however,
any such modification or amendment shall not be made less than twenty-four (24) hours prior to the date and time for receipt of bids on the Bonds and any
such modification or amendment will be announced on the Amendments Page of the SpeerAuction webpage and through Thompson Municipal News.
The Bonds will be in fully registered form in the denominations of $5,000 and integral multiples thereof in the name of Cede & Co. as nominee
of The Depository Trust Company (“DTC”), New York, New York, to which principal and interest payments on the Bonds will be paid. Individual
purchases will be in book-entry form only. Interest on each Bond shall be paid by check or draft of the Bond Registrar to the person in whose name such
bond is registered at the close of business on the fifteenth day of the month next preceding an interest payment date. The principal of the Bonds shall be
payable in lawful money of the United States of America at the principal office maintained for the purpose by the Bond Registrar in Chicago, Illinois.
Semiannual interest is due June 15 and December 15 of each year, commencing June 15, 2014, and is payable by Wells Fargo Bank, N.A., Chicago,
Illinois (the “Bond Registrar”). The Bonds are dated the date of delivery (expected to be on or about October 3, 2013).
MATURITIES* – DECEMBER 15
$ 65,000 .............. 2014 $430,000 ..............2020 $ 495,000 ........... 2027
100,000 .............. 2015 435,000 ..............2021 930,000 ........... 2028
******* .............. **** 440,000 ..............2022 960,000 ........... 2029
100,000 .............. 2017 450,000 ..............2023 1,085,000 ........... 2030
200,000 .............. 2018 460,000 ..............2024 1,120,000 ........... 2031
350,000 .............. 2019 475,000 ..............2025 1,265,000 ........... 2032
480,000 ..............2026
Any consecutive maturities may be aggregated into term bonds at the option of the bidder,
in which case the mandatory redemption provisions shall be on the same schedule as above.
The Bonds maturing on or after December 15, 2022, are optionally callable in whole or in part on any date on or after December 15, 2021, at a
price of par and accrued interest. If less than all the Bonds are called, they shall be redeemed in such principal amounts and from such maturities as
determined by the City and within any maturity by lot.
*Subject to change.
137
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
Official Notice of Sale, Page 3 of 4
*Subject to change.
All interest rates must be in multiples of one-eighth or one one-hundredth of one percent (1/8 or 1/100 of 1%), and not more than one rate for a
single maturity shall be specified. The rates bid shall be in non-descending order. The differential between the highest rate bid and the lowest rate bid
shall not exceed six percent (6%). All bids must be for all of the Bonds and must be for not less than $9,761,280.
Award of the Bonds: The Bonds will be awarded on the basis of true interest cost, determined in the following manner. True interest cost shall
be computed by determining the annual interest rate (compounded semi-annually) necessary to discount the debt service payments on the Bonds from the
payment dates thereof to the dated date and to the bid price. For the purpose of calculating true interest cost, the Bonds shall be deemed to become due in
the principal amounts and at the times set forth in the table of maturities set forth above.
The Bonds will be awarded to the bidder complying with the terms of this Official Notice of Sale whose bid produces the lowest true interest
cost rate to the City as determined by the City’s Financial Advisor, which determination shall be conclusive and binding on all bidders; provided, that the
City reserves the right to reject all bids or any non-conforming bid and reserves the right to waive any informality in any bid. Bidders should verify the
accuracy of their final bids and compare them to the winning bids reported on the SpeerAuction Observation Page immediately after the bidding.
The premium or discount, if any, is subject to pro rata adjustment if the maturity amounts of the Bonds are changed, allowing the same
dollar amount of gross spread per $1,000 bond as bid and assuming a delivery date of October 3, 2013.
The true interest cost of each bid will be computed by SpeerAuction and reported on the Observation Page of the SpeerAuction webpage
immediately following the date and time for receipt of bids. These true interest costs are subject to verification by the City’s Financial Advisor, will be
posted for information purposes only and will not signify an actual award of any bid or an official declaration of the winning bid. The City or its Financial
Advisor will notify the bidder to whom the Bonds will be awarded, if and when such award is made.
The winning bidder will be required to make the standard filings and maintain the appropriate records routinely required pursuant to MSRB
Rules G-8, G-11 and G-36. The winning bidder will be required to pay the standard MSRB charge for Bonds purchased. In addition, the winning bidder
who is a member of the Securities Industry and Financial Markets Association (“SIFMA”) will be required to pay SIFMA’s standard charge per bond.
Each bid shall be accompanied by a certified or cashier’s check on, or a wire transfer from, a solvent bank or trust company or a Financial
Surety Bond for TWO PERCENT OF PAR payable to the Treasurer of the City as evidence of good faith of the bidder (the “Deposit”). The Deposit of
the successful bidder will be retained by the City pending delivery of the Bonds and all others will be promptly returned. Should the successful bidder fail
to take up and pay for the Bonds when tendered in accordance with this Notice of Sale and said bid, said Deposit shall be retained as full and liquidated
damages to the City caused by failure of the bidder to carry out the offer of purchase. Such Deposit will otherwise be applied on the purchase price upon
delivery of the Bonds. No interest on the Deposit will accrue to the purchaser.
If a wire transfer is used for the Deposit, it must be sent according to the following wire instructions:
Amalgamated Bank of Chicago
Corporate Trust
One West Monroe
Chicago, IL 60603
ABA # 071003405
Credit to: 1853281001 Speer Bidding Escrow
RE: City of Lake Forest, Lake County, Illinois
bid for the $9,840,000* General Obligation Refunding Bonds, Series 2013
The wire shall arrive in such account no later than 30 minutes prior to the date and time of the sale of the Bonds. Contemporaneously with such
wire transfer, the bidder shall send an email to biddingescrow@aboc.com with the following information: (1) indication that a wire transfer has been made,
(2) the amount of the wire transfer, (3) the issue to which it applies, and (4) the return wire instructions if such bidder is not awarded the Bonds. The City
and any bidder who chooses to wire the Deposit hereby agree irrevocably that Speer Financial, Inc. (“Speer”) shall be the escrow holder of the Deposit
wired to such account subject only to these conditions and duties: (i) if the bid is not accepted, Speer shall, at its expense, promptly return the Deposit
amount to the unsuccessful bidder; (ii) if the bid is accepted, the Deposit shall be forwarded to the City; (iii) Speer shall bear all costs of maintaining the
escrow account and returning the funds to the bidder; (iv) Speer shall not be an insurer of the Deposit amount and shall have no liability except if it
willfully fails to perform, or recklessly disregards, its duties specified herein; and (v) income earned on the Deposit, if any, shall be retained by Speer.
If a Financial Surety Bond is used for the Deposit, it must be from an insurance company licensed to issue such a bond in the State of Illinois
and such bond must be submitted to Speer prior to the opening of the bids. The Financial Surety Bond must identify each bidder whose deposit is
guaranteed by such Financial Surety Bond. If the Bonds are awarded to a bidder using a Financial Surety Bond, then that purchaser is required to submit
its Deposit to the City in the form of a certified or cashier’s check or wire transfer as instructed by Speer, or the City not later than 3:00 P.M. on the next
business day following the award. If such Deposit is not received by that time, the Financial Surety Bond may be drawn by the City to satisfy the Deposit
requirement.
*Subject to change.
138
City of Lake Forest, Lake County, Illinois
$9,840,000* General Obligation Refunding Bonds, Series 2013
Official Notice of Sale, Page 4 of 4
*Subject to change.
The City covenants and agrees to enter into a written agreement or contract, constituting an undertaking (the “Undertaking”) to provide ongoing
disclosure about the City for the benefit of the beneficial owners of the Bonds on or before the date of delivery of the Bonds as required under Section
(b)(5) of Rule 15c2-12 (the “Rule”) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934. The Undertaking
shall be as described in the Official Statement, with such changes as may be agreed in writing by the Underwriter. The City represents that it is in
compliance with each and every undertaking previously entered into it pursuant to the Rule.
The Underwriter's obligation to purchase the Bonds shall be conditioned upon the City delivering the Undertaking on or before the date of
delivery of the Bonds.
The winning bidder shall provide a certificate, in form as drafted by or acceptable to Bond Counsel, to evidence the issue price of each maturity
of the Bonds, the form of which certificate is available upon request.
By submitting a bid, any bidder makes the representation that it understands Bond Counsel represents the City in the Bond transaction and, if
such bidder has retained Bond Counsel in an unrelated matter, such bidder represents that the signatory to the bid is duly authorized to, and does hereby
consent to and waive for and on behalf of such bidder any conflict of interest arising from any adverse position to the City in this matter; such consent and
waiver shall supersede any formalities otherwise required in any separate understandings, guidelines or contractual arrangements between the bidder and
Bond Counsel.
The Bonds will be delivered to the successful purchaser against full payment in immediately available funds as soon as they can be prepared and
executed, which is expected to be on or about October 3, 2013. Should delivery be delayed beyond sixty (60) days from the date of sale for any reason
beyond the control of the City except failure of performance by the purchaser, the City may cancel the award or the purchaser may withdraw the good
faith deposit and thereafter the purchaser's interest in and liability for the Bonds will cease.
The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts, and interest
rates of the Bonds, and any other information required by law or deemed appropriate by the City, shall constitute a “Final Official Statement” of the City
with respect to the Bonds, as that term is defined in the Rule. By awarding the Bonds to any underwriter or underwriting syndicate, the City agrees that,
no more than seven (7) business days after the date of such award, it shall provide, without cost to the senior managing underwriter of the syndicate to
which the Bonds are awarded, up to 100 copies of the Final Official Statement to permit each “Participating Underwriter” (as that term is defined in the
Rule) to comply with the provisions of such Rule. The City shall treat the senior managing underwriter of the syndicate to which the Bonds are awarded
as its designated agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter executing and
delivering an Official Bid Form with respect to the Bonds agrees thereby that if its bid is accepted by the City it shall enter into a contractual relationship
with all Participating Underwriters of the Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official
Statement.
By submission of its bid, the senior managing underwriter of the successful bidder agrees to supply all necessary pricing information and any
Participating Underwriter identification necessary to complete the Official Statement within 24 hours after award of the Bonds. Additional copies of the
Final Official Statement may be obtained by Participating Underwriters from the printer at cost.
The City will, at its expense, deliver the Bonds to the purchaser in New York, New York, through the facilities of DTC and will pay for the
bond attorney’s opinion. At the time of closing, the City will also furnish to the purchaser the following documents, each dated as of the date of delivery
of the Bonds: (1) the unqualified opinion of Katten Muchin Rosenman LLP, Chicago, Illinois, that the Bonds are lawful and enforceable; (2) the opinion
of said attorneys that the interest on the Bonds is exempt from federal income taxes as and to the extent set forth in the Official Statement for the Bonds;
and (3) a no litigation certificate by the City.
The City intends to designate the Bonds as “qualified tax-exempt obligations” pursuant to the small issuer exception provided by Section 265(b)
(3) of the Internal Revenue Code of 1986, as amended.
The City has authorized the printing and distribution of an Official Statement containing pertinent information relative to the City and the Bonds.
Copies of such Official Statement or additional information may be obtained from Ms. Elizabeth Holleb, Director of Finance, City of Lake Forest, 800
North Field Drive, Lake Forest, Illinois 60045; telephone (847) 810-3612 or an electronic copy of this Official Statement is available from the
www.speerfinancial.com web site under “Debt Auction Center/Official Statements Sales Calendar/Competitive” from the Independent Public Finance
Consultants to the City, Speer Financial, Inc., One North LaSalle Street, Suite 4100, Chicago, Illinois 60602, telephone (312) 346-3700.
/s/ DONALD P. SCHOENHEIDER /s/ ROBERT R. KIELY, JR.
Mayor City Manager
CITY OF LAKE FOREST CITY OF LAKE FOREST
Lake County, Illinois Lake County, Illinois
139
140
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ORDINANCE NO. _______________
ORDINANCE AUTHORIZING THE ISSUANCE OF GENERAL
OBLIGATION REFUNDING BONDS, SERIES 2013, OF THE CITY OF
LAKE FOREST, ILLINOIS
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LAKE FOREST,
ILLINOIS, AS FOLLOWS:
Section 1. Authority and Purposes. This ordinance is adopted pursuant to
Section 6 of Article VII of the Illinois Constitution of 1970 for the purpose of providing for
the refunding and redemption of the $9,665,000 outstanding principal amount of
General Obligation Bonds, Series 2010A (the “Prior Bonds”) of The City of Lake Forest,
Illinois (the “City”).
It is found and determined that the refunding and redemption of the Prior Bonds
as authorized by this ordinance is for a proper public purpose.
Section 2. Redemption and Refunding Plan. The City hereby determines to
refund the Prior Bonds and elects to redeem the Prior Bonds on December 15, 2013.
Each Prior Bond shall be redeemed at a redemption price equal to the principal amount
thereof to be redeemed together with accrued interest to the redemption date.
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The Mayor, the City Manager, the Director of Finance and the other officers and
officials of the City are authorized and directed to do, or cause to be done, all things
necessary to accomplish the refunding and redemption of the Prior Bonds.
Section 3. Appropriation. The sum of $_______________ is appropriated to
meet part of the costs of the refunding of the Prior Bonds including the costs of issuance
of the general obligation bonds of the City authorized by this ordinance.
Section 4. Authorization of Bonds. Pursuant to the home rule powers of the
City to incur debt payable from ad valorem property tax receipts and for the purpose of
financing the appropriation provided in Section 3 of this ordinance, unlimited tax general
obligation bonds of the City are authorized to be issued and sold as a single series in an
aggregate principal amount of $_______________ and to be designated as the
“General Obligation Refunding Bonds, Series 2013” (the “2013 Bonds”).
Section 5. Terms of Bonds. The 2013 Bonds shall be issuable in the
denominations of $5,000 or any integral multiple thereof and may bear such identifying
numbers or letters as shall be useful to facilitate the registration, transfer and exchange
of 2013 Bonds. Unless otherwise determined in the order to authenticate the 2013
Bonds, each 2013 Bond delivered upon the original issuance of the 2013 Bonds shall
be dated as of its date of original issuance and delivery. Each 2013 Bond thereafter
issued upon any transfer, exchange or replacement of 2013 Bonds shall be dated so
that no gain or loss of interest shall result from such transfer, exchange or replacement.
The principal of the 2013 Bonds shall be payable in lawful money of the United
States of America upon presentation and surrender thereof at the corporate trust office
of Wells Fargo Bank, N.A., in the City of Chicago, Illinois, which is hereby appointed as
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bond registrar and paying agent for the 2013 Bonds. Each 2013 Bond shall bear
interest from its date, computed on the basis of a 360 day year consisting of twelve 3 0
day months and shall be payable in lawful money of the United States of America on
each interest payment date to the registered owners of record thereof appearing on the
registration books maintained by the City for such purpose at the corporate trust office
of the bond registrar, as of the close of business on the first day of the calendar month
of the applicable interest payment date. Interest on the 2013 Bonds shall be paid by
check or draft mailed to such registered owners at their addresses appearing on the
registration books or by wire transfer pursuant to an agreement by and between the City
and the registered owner.
The 2013 Bonds shall mature on December 15 in each year shown in the
following table in the respective principal amount set forth opposite each such year and
the 2013 Bonds maturing in each such year shall bear interest at the respective rate per
annum set forth opposite such year:
Year Principal Amount Interest Rate
20__ $ ,000 . %
20__ ,000
20__ ,000
20__ ,000
20__ ,000
20__ ,000
20__ ,000
20__ ,000
20__ ,000
20__ ,000
Interest on each 2013 Bond shall be payable on June 15, 2014 and semiannually
thereafter on each June 15 and December 15 at the rates per annum herein
determined.
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The 2013 Bonds maturing on or after December 15, 2022 shall be subject to
redemption prior to maturity at the option of the City and upon notice as herein provided,
in such principal amounts and from such maturities as the City shall determine and by
lot within a single maturity, on December 15, 2021 and on any date thereafter, at a
redemption price equal to the principal amount thereof to be redeemed.
The 2013 Bonds maturing on December 15, 20__, shall be subject to mandatory
redemption, in part and by lot, on December 15 of the years 20__ to 20__, both
inclusive, in the following principal amounts, each constituting a sinking fund installment
for the retirement of the 2013 Bonds maturing on December 15, 20__:
Year Principal Amount
20__ $ ,000
20__ ,000
20__ ,000
The final principal amount of the 2013 Bonds maturing on December 15, 20__, is
$_____,000.
The 2013 Bonds maturing on December 15, 20__, shall be subject to mandatory
redemption, in part and by lot, on December 15 of the years 20__ to 20__, both
inclusive, in the following principal amounts, each constituting a sinking fund installment
for the retirement of the 2013 Bonds maturing on December 15, 20__:
Year Principal Amount
20__ $ ,000
20__ ,000
20__ ,000
The final principal amount of the 2013 Bonds maturing on December 15, 20__, is
$_____,000.
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All 2013 Bonds subject to mandatory sinking fund redemption shall be redeemed
at a redemption price equal to the principal amount thereof to be redeemed. The bond
registrar is hereby authorized and directed to mail notice of the mandatory sinking fund
redemption of the 2013 Bonds in the manner herein provided.
Whenever 2013 Bonds subject to mandatory sinking fund redemption are
redeemed at the option of the City, the principal amount thereof so redeemed shall be
credited against the unsatisfied balance of future sinking fund installments or final
principal amount established with respect to such 2013 Bonds, in such amounts and
against such installments or final principal amount as shall be determined by the City in
the proceedings authorizing such optional redemption or, in the absence of such
determination, shall be credited pro-rata against the unsatisfied balance of the
applicable sinking fund installments and final principal amount.
On or prior to the 60th day preceding any sinking fund installment date, the City
may purchase 2013 Bonds, which are subject to mandatory redemption on such sinking
fund installment date, at such prices as the City shall determine. Any 2013 Bond so
purchased shall be cancelled and the principal amount thereof so purchased shall be
credited against the unsatisfied balance of the next ensuing sinking fund installment of
the bonds of the same maturity as the 2013 Bond so purchased.
In the event of the redemption of less than all the 2013 Bonds of like maturity, the
aggregate principal amount thereof to be redeemed shall be $5,000 or an integral
multiple thereof and the bond registrar shall assign to each 2013 Bond of such maturity
a distinctive number for each $5,000 principal amount of such 2013 Bond and shall
select by lot from the numbers so assigned as many numbers as, at $5,000 for each
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number, shall equal the principal amount of such 2013 Bonds to be redeemed. The
2013 Bonds to be redeemed shall be the 2013 Bonds to which were assigned numbers
so selected; provided that only so much of the principal amount of each 2013 Bond shall
be redeemed as shall equal $5,000 for each number assigned to it and so selected.
Notice of the redemption of 2013 Bonds shall be mailed not less than 30 days
nor more than 60 days prior to the date fixed for such redemption to the registered
owners of 2013 Bonds to be redeemed at their last addresses appearing on said
registration books. The 2013 Bonds or portions thereof specified in said notice shall
become due and payable at the applicable redemption price on the redemption date
therein designated, and if, on the redemption date, moneys for payment of the
redemption price of all the 2013 Bonds or portions thereof to be redeemed, together
with interest to the redemption date, shall be available for such payment on said date,
and if notice of redemption shall have been mailed as aforesaid (and notwithstanding
any defect therein or the lack of actual receipt thereof by any registered owner) then
from and after the redemption date interest on such 2013 Bonds or portions thereof
shall cease to accrue and become payable. If there shall be drawn for redemption less
than all of a 2013 Bond, the City shall execute and the bond registrar shall authenticate
and deliver, upon the surrender of such 2013 Bond, without charge to the owner
thereof, in exchange for the unredeemed balance of the 2013 Bond so surrendered,
2013 Bonds of like maturity and interest rate and of the denomination of $5,000 or any
integral multiple thereof.
The bond registrar shall not be required to transfer or exchange any 2013 Bond
after notice of the redemption of all or a portion thereof has been mailed. The bond
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registrar shall not be required to transfer or exchange any 2013 Bond during a period of
15 days next preceding the mailing of a notice of redemption that could designate for
redemption all or a portion of such 2013 Bond.
Section 6. Sale and Delivery. The 2013 Bonds are sold to
______________________________, as purchaser, at a price of $_______________
and accrued interest from their date to the date of delivery and payment therefor. The
Official Statement prepared with respect to the 2013 Bonds is approved and “deemed
final” as of its date for purposes of Securities and Exchange Commission Rule 15c2-12
promulgated under the Securities Exchange Act of 1934.
The Mayor, City Clerk and other officials of the City are authorized and directed
to do and perform, or cause to be done or performed for or on behalf of the City each
and every thing necessary for the issuance of the 2013 Bonds, including the proper
execution and delivery of the 2013 Bonds and the Official Statement.
Section 7. Execution and Authentication. Each 2013 Bond shall be
executed in the name of the City by the manual or authorized facsimile signature of its
Mayor and the corporate seal of the City, or a facsimile thereof, shall be thereunto
affixed or otherwise reproduced thereon and attested by the manual or authorized
facsimile signature of its City Clerk.
In case any officer whose signature, or a facsimile of whose signature, shall
appear on any 2013 Bond shall cease to hold such office before the issuance of the
2013 Bond, such 2013 Bond shall nevertheless be valid and sufficient for all purposes,
the same as if the person whose signature, or a facsimile thereof, appears on such
2013 Bond had not ceased to hold such office. Any 2013 Bond may be signed, sealed
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or attested on behalf of the City by any person who, on the date of such act, shall hold
the proper office, notwithstanding that at the date of such 2013 Bond such person may
not have held such office. No recourse shall be had for the payment of any 2013 Bonds
against any officer who executes the 2013 Bonds.
Each 2013 Bond shall bear thereon a certificate of authentication executed
manually by the bond registrar. No 2013 Bond shall be entitled to any right or benefit
under this ordinance or shall be valid or obligatory for any purpose until such certificate
of authentication shall have been duly executed by the bond registrar.
Section 8. Transfer, Exchange and Registry. The 2013 Bonds shall be
negotiable, subject to the provisions for registration of transfer contained herein. Each
2013 Bond shall be transferable only upon the registration books maintained by the City
for that purpose at the corporate trust office of the bond registrar, by the registered
owner thereof in person or by his attorney duly authorized in writing, upon surrender
thereof together with a written instrument of transfer satisfactory to the bond registrar
and duly executed by the registered owner or his duly authorized attorney. Upon the
surrender for transfer of any such 2013 Bond, the City shall execute and the bond
registrar shall authenticate and deliver a new 2013 Bond or 2013 Bonds registered in
the name of the transferee, of the same aggregate principal amount, maturity and
interest rate as the surrendered 2013 Bond. 2013 Bonds, upon surrender thereof at the
corporate trust office of the bond registrar, with a written instrument satisfactory to the
bond registrar, duly executed by the registered owner or his attorney duly authorized in
writing, may be exchanged for an equal aggregate principal amount of 2013 Bonds of
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the same maturity and interest rate and of the denominations of $5,000 or any integral
multiple thereof.
For every such exchange or registration of transfer of 2013 Bonds, the City or the
bond registrar may make a charge sufficient for the reimbursement of any tax, fee or
other governmental charge required to be paid with respect to such exchange or
transfer, which sum or sums shall be paid by the person requesting such exchange or
transfer as a condition precedent to the exercise of the privilege of making such
exchange or transfer. No other charge shall be made for the privilege of making such
transfer or exchange. The provisions of the Illinois Bond Replacement Act shall govern
the replacement of lost, destroyed or defaced 2013 Bonds.
The City and the bond registrar may deem and treat the person in whose name
any 2013 Bond shall be registered upon the registration books as the absolute owner of
such 2013 Bond, whether such 2013 Bond shall be overdue or not, for the purpose of
receiving payment of, or on account of, the principal of or interest thereon and for all
other purposes whatsoever, and all such payments so made to any such registered
owner or upon his order shall be valid and effectual to satisfy and discharge the liability
upon such 2013 Bond to the extent of the sum or sums so paid, and neither the City nor
the bond registrar shall be affected by any notice to the contrary.
Section 9. General Obligations. The full faith and credit of the City are
hereby irrevocably pledged to the punctual payment of the principal of and interest on
the 2013 Bonds. The 2013 Bonds shall be direct and general obligations of the City,
and the City shall be obligated to levy ad valorem taxes upon all the taxable property in
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the City for the payment of the 2013 Bonds and the interest thereon, without limitation
as to rate or amount.
Section 10. Form of Bonds. The 2013 Bonds shall be issued as fully
registered bonds and shall be in substantially the following form, the blanks to be
appropriately completed when the 2013 Bonds are printed:
No. ________
United States of America
State of Illinois
County of Lake
THE CITY OF LAKE FOREST
GENERAL OBLIGATION REFUNDING BOND,
SERIES 2013
INTEREST RATE MATURITY DATE DATED DATE CUSIP
. % December 15, 20__ __________, 2013 ______ ___
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
THE CITY OF LAKE FOREST, a municipal corporation and a home rule unit of
the State of Illinois situate in the County of Lake, acknowledges itself indebted and for
value received hereby promises to pay to the registered owner of this bond, or
registered assigns, the principal amount specified above on the maturity date specified
above, and to pay interest on such principal amount from the date hereof at the interest
rate per annum specified above, computed on the basis of a 360 day year consisting of
twelve 30 day months and payable in lawful money of the United States of America on
June 15, 2014 and semiannually thereafter on June 15 and December 15 in each year
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until the principal amount shall have been paid, to the registered owner of record hereof
as of the first day of the calendar month of such interest payment date, by wire transfer
pursuant to an agreement by and between the City and the registered owner, or
otherwise by check or draft mailed to the registered owner at the address of such owner
appearing on the registration books maintained by the City for such purpose at the
corporate trust office of Wells Fargo Bank, N.A., in the City of Chicago, Illinois, as bond
registrar or its successor (the “Bond Registrar”). This bond, as to principal when due,
will be payable in lawful money of the United States of America upon presentation and
surrender of this bond at the corporate trust office of the Bond Registrar. The full faith
and credit of the City are irrevocably pledged for the punctual payment of the principal
of and interest on this bond according to its terms.
This bond is one of a series of bonds issued in the aggregate principal amount of
$_______________, which are authorized and issued under and pursuant to Section 6
of Article VII of the Illinois Constitution of 1970 and under and in accordance with an
ordinance adopted by the City Council of the City on September 16, 2013 and entitled:
“Ordinance Authorizing the Issuance of General Obligation Refunding Bonds, Series
2013, of The City of Lake Forest, Illinois.”
The bonds of such series maturing on or after December 15, 2022 are subject to
redemption prior to maturity at the option of the City and upon notice as herein provided,
in such principal amounts and from such maturities as the City shall determine and by
lot within a single maturity, on December 15, 2021 and on any date thereafter, at a
redemption price equal to the principal amount thereof to be redeemed.
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The bonds of such series maturing in the years 20___, 20___ and 20___ (the
“Term Bonds”) are subject to mandatory redemption, in part and by lot, on December 15
of the years and in the respective principal amounts set forth in the following tables, by
the application of sinking fund installments, at a redemption price equal to the principal
amount thereof to be redeemed:
20___ Term Bonds 20___ Term Bonds 20___ Term Bonds
Year Principal Amount Year Principal Amount Year Principal Amount
20__ $ ,000 20__ $ ,000 20__ $ ,000
20__ ,000 20__ ,000 20__ ,000
20__ ,000 20__ ,000 20__ ,000
Notice of the redemption of bonds will be mailed not less than 30 days nor more
than 60 days prior to the date fixed for such redemption to the registered owners of
bonds to be redeemed at their last addresses appearing on such registration books.
The bonds or portions thereof specified in said notice shall become due and payable at
the applicable redemption price on the redemption date therein designated, and if, on
the redemption date, moneys for payment of the redemption price of all the bonds or
portions thereof to be redeemed, together with interest to the redemption date, shall be
available for such payment on said date, and if notice of redemption shall have been
mailed as aforesaid (and notwithstanding any defect therein or the lack of actual receipt
thereof by any registered owner) then from and after the redemption date interest on
such bonds or portions thereof shall cease to accrue and become payable.
This bond is transferable only upon such registration books by the registered
owner hereof in person, or by his attorney duly authorized in writing, upon surrender
hereof at the corporate trust office of the Bond Registrar together with a written
instrument of transfer satisfactory to the Bond Registrar duly executed by the registered
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owner or by his duly authorized attorney, and thereupon a new registered bond or
bonds, in the authorized denominations of $5,000 or any integral multiple thereof and of
the same aggregate principal amount, maturity and interest rate as this bond shall be
issued to the transferee in exchange therefor. In like manner, this bond may be
exchanged for an equal aggregate principal amount of bonds of the same maturity and
interest rate and of any of such authorized denominations. The City or the Bond
Registrar may make a charge sufficient for the reimbursement of any tax, fee or other
governmental charge required to be paid with respect to the transfer or exchange of this
bond. No other charge shall be made for the privilege of making such transfer or
exchange. The City and the Bond Registrar may treat and consider the person in
whose name this bond is registered as the absolute owner hereof for the purpose of
receiving payment of, or on account of, the principal and interest due hereon and for all
other purposes whatsoever.
This bond shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been duly executed by the Bond
Registrar.
It is hereby certified, recited and declared that all acts, conditions and things
required to be done, exist and be performed precedent to and in the issuance of this
bond in order to make it a legal, valid and binding obligation of the City have been done,
exist and have been performed in regular and due time, form and manner as required
by law, and that the series of bonds of which this bond is one, together with all other
indebtedness of the City, is within every debt or other limit prescribed by law.
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IN WITNESS WHEREOF, The City of Lake Forest has caused this bond to be
executed in its name and on its behalf by the manual or facsimile signature of its Mayor,
and its corporate seal, or a facsimile thereof, to be hereunto affixed or otherwise
reproduced hereon and attested by the manual or facsimile signature of its City Clerk.
Dated: _______________, 2013
CERTIFICATE OF AUTHENTICATION
This bond is one of the General
Obligation Refunding Bonds, Series
2013, described in the within mentioned
Ordinance.
WELLS FARGO BANK, N.A.,
as Bond Registrar
By ____________________________
Authorized Signer
THE CITY OF LAKE FOREST
________________________________
Mayor
Attest:
________________________________
City Clerk
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ASSIGNMENT
For value received the undersigned sells, assigns and transfers unto _________
_____________________________________________________________________
the within bond and hereby irrevocably constitutes and appoints __________________
_____________________________________________________________________
attorney to transfer the said bond on the books kept for registration thereof, with full
power of substitution in the premises.
Dated ____________________
_______________________________
Signature Guarantee:
_______________________________
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Section 11. Levy and Extension of Taxes. For the purpose of providing the
money required to pay the interest on the 2013 Bonds when and as the same falls due
and to pay and discharge the principal thereof (including mandatory sinking fund
installments) as the same shall mature, there is hereby levied upon all the taxable
property in the City, in each year while any of the 2013 Bonds shall be outstanding, a
direct annual tax sufficient for that purpose in addition to all other taxes, as follows:
Tax Levy Year A Tax Sufficient to Produce
2013 $
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
Interest or principal coming due at any time when there shall be insufficient funds
on hand to pay the same shall be paid promptly when due from current funds on hand in
advance of the collection of the taxes herein levied; and when said taxes shall have
been collected, reimbursement shall be made to the said funds in the amounts thus
advanced.
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As soon as this ordinance becomes effective, a copy thereof certified by the City
Clerk, which certificate shall recite that this ordinance has been duly adopted, shall be
filed with the County Clerk of Lake County, Illinois, who is hereby directed to ascertain
the rate per cent required to produce the aggregate tax hereinbefore provided to be
levied in the years 2013 to 2031, inclusive, and to extend the same for collection on the
tax books in connection with other taxes levied in said years, in and by the City for
general corporate purposes of the City, and in said years such annual tax shall be
levied and collected in like manner as taxes for general corporate purposes for said
years are levied and collected and, when collected, such taxes shall be used for the
purpose of paying the principal of and interest on the 2013 Bonds herein authorized as
the same become due and payable.
The City Council hereby determines that the levy and extension of taxes
pursuant to this Section is a “legal requirement” within the meaning of Section Two of
Ordinance Number 2008-08 of the City.
Section 12. Taxes Levied for Payment of Prior Bonds. After the issuance of
the 2013 Bonds, the Director of Finance of the City shall file with the County Clerk of
Lake County a certificate listing the Prior Bonds and the taxes theretofore levied for the
payment of the principal of and interest on the Prior Bonds and said certificate shall
direct the abatement of such taxes.
Section 13. Escrow Deposit Agreement. The form of 2013 Escrow Deposit
Agreement, dated as of September 1, 2013, by and between the City and Wells Fargo
Bank, N.A., in the City of Chicago, Illinois, as Escrow Agent, on file in the office of the
City Clerk and presented at this meeting, is hereby approved. The proper officers of the
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City are authorized and directed to execute and deliver the 2013 Escrow Deposit
Agreement on behalf of the City.
Section 14. Application of Bond Proceeds. The proceeds of sale of the 2013
Bonds shall be deposited as follows:
1. To the 2013 Escrow Fund maintained under the 2013 Escrow
Deposit Agreement, the amount, together with any other moneys of the City
deposited therein, necessary to provide for the payment of the interest on and
redemption price of the Prior Bonds.
2. To the 2013 Expense Fund established by this ordinance, the
amount of such proceeds of sale remaining after making the foregoing deposit.
Section 15. Debt Service Fund. Moneys derived from taxes herein levied are
appropriated and set aside for the purpose of paying principal of and interest on the
2013 Bonds when and as the same come due. All of such moneys, and all other
moneys to be used for the payment of the principal of and interest on the 2013 Bonds,
shall be deposited in the “2013 Debt Service Fund”, which is hereby established as a
special fund of the City and shall be administered as a bona fide debt service fund
under the Internal Revenue Code of 1986 (the “Code”).
The moneys deposited or to be deposited into the 2013 Debt Service Fund,
including the tax receipts derived from the taxes levied pursuant to this ordinance, are
pledged as security for the payment of the principal of and interest on the 2013 Bonds.
The pledge is made pursuant to Section 13 of the Local Government Debt Reform Act
and shall be valid and binding from the date of issuance of the 2013 Bonds. All such
tax receipts and the moneys held in the 2013 Debt Service Fund shall immediately be
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subject to the lien of such pledge without any physical delivery or further act and the lien
of such pledge shall be valid and binding as against all parties having claims of any kind
in tort, contract or otherwise against the City irrespective of whether such parties have
notice thereof.
Section 16. Expense Fund. The “2013 Expense Fund”, is hereby established
as a special fund of the City. Moneys in the 2013 Expense Fund shall be used for the
payment of costs of issuance of the 2013 Bonds, but may hereafter be reappropriated
and used for other purposes if such reappropriation is permitted under Illinois law and
will not adversely affect the exclusion from gross income for federal income tax
purposes of interest on the 2013 Bonds.
Section 17. Investment Regulations. No investment shall be made of any
moneys in the 2013 Debt Service Fund, the 2013 Escrow Fund or the 2013 Expense
Fund except in accordance with the tax covenants set forth in Section 18 of this
ordinance. All income derived from such investments in respect of moneys or securities
in any Fund shall be credited in each case to the Fund in which such moneys or
securities are held.
Any moneys in any Fund that are subject to investment yield restrictions may be
invested in United States Treasury Securities, State and Local Government Series,
pursuant to the regulations of the United States Treasury Department, Bureau of Public
Debt, or in any tax-exempt bond that is not an “investment property” within the meaning
of Section 148(b)(2) of the Code. The Director of Finance and agents designated by
her are hereby authorized to submit, on behalf of the City, subscriptions for such United
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States Treasury Securities and to request redemption of such United States Treasury
Securities.
Section 18. Tax Covenants. The City shall not take, or omit to take, any action
lawful and within its power to take, which action or omission would cause interest on
any 2013 Bond to become subject to federal income taxes in addition to federal income
taxes to which interest on such 2013 Bond is subject on the date of original issuance
thereof.
The City shall not permit any of the proceeds of the 2013 Bonds, or any facilities
financed with such proceeds, to be used in any manner that would cause any 2013
Bond to constitute a “private activity bond” within the meaning of Section 141 of the
Code.
The City shall not permit any of the proceeds of the 2013 Bonds or other moneys
to be invested in any manner that would cause any 2013 Bond to constitute an
“arbitrage bond” within the meaning of Section 148 of the Code or a “hedge bond” within
the meaning of Section 149(g) of the Code.
The City shall comply with the provisions of Section 148(f) of the Code relating to
the rebate of certain investment earnings at periodic intervals to the United States of
America.
Section 19. Bank Qualified Designation. The City hereby designates the
2013 Bonds as “qualified tax-exempt obligations” as defined in Section 265(b)(3)(B) of
the Internal Revenue Code of 1986. The City represents that the reasonably
anticipated amount of tax-exempt obligations that are required to be taken into account
for the purpose of Section 265(b)(3)(C) of the Code and will be issued by or on behalf of
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the City and all subordinate entities of the City during 2013 does not exceed
$10,000,000. The City covenants that it will not designate and issue more than
$10,000,000 aggregate principal amount of tax-exempt obligations in the year in which
the 2013 Bonds are issued. For purposes of the two preceding sentences, the term
“tax-exempt obligations” includes “qualified 501(c)(3) bonds” (as defined in Section 145
of the Internal Revenue Code of 1986) but does not include other “private activity
bonds” (as defined in Section 141 of the Internal Revenue Code of 1986).
Section 20. Continuing Disclosure. For the benefit of the beneficial owners of
the 2013 Bonds, the City covenants and agrees to provide to the Municipal Securities
Rulemaking Board (the “MSRB”) for disclosure on the Electronic Municipal Market
Access (“EMMA”) system, in an electronic format as prescribed by the MSRB, (i) an
annual report containing certain financial information and operating data relating to the
City and (ii) timely notices of the occurrence of certain enumerated events. All
documents provided to the MSRB shall be accompanied by identifying information as
prescribed by the MSRB.
The annual report shall be provided to the MSRB for disclosure on EMMA within
210 days after the close of the City’s fiscal year. The information to be contained in the
annual report shall consist of the annual audited financial statement of the City and such
additional information as noted in the Official Statement under the caption “Continuing
Disclosure.” Each annual audited financial statement will conform to generally accepted
accounting principles applicable to governmental units and will be prepared in
accordance with standards of the Governmental Accounting Standards Board. If the
audited financial statement is not available, then an unaudited financial statement shall
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be included in the annual report and the audited financial statement shall be provided
promptly after it becomes available.
The City, in a timely manner not in excess of ten business days after the
occurrence of the event, shall provide notice to the MSRB for disclosure on EMMA of
any failure of the City to provide any such annual report within the 210 day period and of
the occurrence of any of the following events with respect to the 2013 Bonds:
(1) principal and interest payment delinquencies; (2) non payment related defaults, if
material; (3) unscheduled draws on debt service reserves reflecting financial difficulties;
(4) unscheduled draws on credit enhancements reflecting financial difficulties;
(5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax
opinions, the issuance by the Internal Revenue Service of proposed or final
determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other
material notices or determinations with respect to the tax-exempt status of the 2013
Bonds, or other events affecting the tax-exempt status of the 2013 Bonds;
(7) modifications to rights of bondholders, if material; (8) bond calls, if material;
(9) defeasances; (10) release, substitution or sale of property securing repayment of the
2013 Bonds, if material; (11) rating changes; (12) tender offers; (13) bankruptcy,
insolvency, receivership or similar event of the City; (14) the consummation of a merger,
consolidation, or acquisition involving the City or the sale of all or substantially all of the
assets of the City, other than in the ordinary course of business, the entry into a
definitive agreement to undertake such an action or the termination of a definitive
agreement relating to any such actions, other than pursuant to its terms, if material; and
(15) appointment of a successor or additional trustee or the change of name of a
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trustee, if material. For the purposes of the event identified in clause (13), the event is
considered to occur when any of the following occur: the appointment of a receiver,
fiscal agent or similar officer for the City in a proceeding under the U.S. Bankruptcy
Code or in any other proceeding under state or federal law in which a court or
governmental authority has assumed jurisdiction over substantially all of the assets or
business of the City, or if such jurisdiction has been assumed by leaving the existing
governing body and officials or officers in possession but subject to the supervision and
orders of a court or governmental authority, or the entry of an order confirming a plan or
reorganization, arrangement or liquidation by a court or governmental authority having
supervision or jurisdiction over substantially all of the assets or business of the City.
It is found and determined that the City has agreed to the undertakings contained
in this Section in order to assist participating underwriters of the 2013 Bonds and
brokers, dealers and municipal securities dealers in complying with Securities and
Exchange Commission Rule 15c2-12(b)(5) promulgated under the Securities Exchange
Act of 1934. The Director of Finance or his designee is authorized and directed to do
and perform, or cause to be done or performed, for or on behalf of the City, each and
every thing necessary to accomplish the undertakings of the City contained in this
Section for so long as Rule 15c2-12(b)(5) is applicable to the 2013 Bonds and the City
remains an “obligated person” under the Rule with respect to the 2013 Bonds.
The undertakings contained in this Section may be amended by the City upon a
change in circumstances that arises from a change in legal requirements, change in
law, or change in the identity, nature or status of the obligated person, or type of
business conducted, provided that (a) the undertaking, as amended, would have
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complied with the requirements of Rule 15c2-12(b)(5) at the time of the primary offering,
after taking into account any amendments or interpretations of the Rule, as well as any
change in circumstances and (b) in the opinion of nationally recognized bond counsel
selected by the City, the amendment does not materially impair the interests of the
beneficial owners of the 2013 Bonds.
Section 21. Bond Registrar. The City covenants that it shall at all times retain
a bond registrar with respect to the 2013 Bonds, that it will maintain at the designated
office of such bond registrar a place where 2013 Bonds may be presented for payment
and registration of transfer or exchange and that it shall require that the bond registrar
maintain proper registration books and perform the other duties and obligations
imposed upon the bond registrar by this ordinance in a manner consistent with the
standards, customs and practices of the municipal securities business.
The bond registrar shall signify its acceptance of the duties and obligations
imposed upon it by this ordinance by executing the certificate of authentication on any
2013 Bond, and by such execution the bond registrar shall be deemed to have certified
to the City that it has all requisite power to accept, and has accepted such duties and
obligations not only with respect to the 2013 Bond so authenticated but with respect to
all the 2013 Bonds. The bond registrar is the agent of the City and shall not be liable in
connection with the performance of its duties except for its own negligence or default.
The bond registrar shall, however, be responsible for any representation in its certificate
of authentication on the 2013 Bonds.
The City may remove the bond registrar at any time. In case at any time the
bond registrar shall resign or shall be removed or shall become incapable of acting, or
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shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator of
the bond registrar, or of its property, shall be appointed, or if any public officer shall take
charge or control of the bond registrar or of its property or affairs, the City covenants
and agrees that it will thereupon appoint a successor bond registrar. The City shall mail
notice of any such appointment made by it to each registered owner of 2013 Bonds
within twenty days after such appointment.
Section 22. Book-Entry System. In order to provide for the initial issuance of
the 2013 Bonds in a form that provides for a system of book-entry only transfers, the
ownership of one fully registered 2013 Bond for each maturity, in the aggregate
principal amount of such maturity, shall be registered in the name of Cede & Co., as a
nominee of The Depository Trust Company, as securities depository for the 2013
Bonds. The Director of Finance is authorized to execute and deliver on behalf of the
City such letters to, or agreements with, the securities depository as shall be necessary
to effectuate such book-entry system.
In case at any time the securities depository shall resign or shall become
incapable of acting, then the City shall appoint a successor securities depository to
provide a system of book-entry only transfers for the 2013 Bonds, by written notice to
the predecessor securities depository directing it to notify its participants (those persons
for whom the securities depository holds securities) of the appointment of a successor
securities depository.
If the system of book-entry only transfers for the 2013 Bonds is discontinued,
then the City shall issue and the bond registrar shall authenticate, register and deliver to
the beneficial owners of the 2013 Bonds, bond certificates in replacement of such
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beneficial owners’ beneficial interests in the 2013 Bonds, all as shown in the records
maintained by the securities depository.
Section 23. Defeasance and Payment of Bonds. (A) If the City shall pay or
cause to be paid to the registered owners of the 2013 Bonds, the principal, and interest
due or to become due thereon, at the times and in the manner stipulated therein and in
this ordinance, then the pledge of taxes, securities and funds hereby pledged and the
covenants, agreements and other obligations of the City to the registered owners a nd
the beneficial owners of the 2013 Bonds shall be discharged and satisfied.
(B) Any 2013 Bonds or interest installments appertaining thereto, whether at
or prior to the maturity or the redemption date of such 2013 Bonds, shall be deemed to
have been paid within the meaning of paragraph (A) of this Section if (1) in case any
such 2013 Bonds are to be redeemed prior to the maturity thereof, there shall have
been taken all action necessary to call such 2013 Bonds for redemption and notice of
such redemption shall have been duly given or provision shall have been made for the
giving of such notice, and (2) there shall have been deposited in trust with a bank, trust
company or national banking association acting as fiduciary for such purpose either
(i) moneys in an amount which shall be sufficient, or (ii) “Federal Obligations” as defined
in paragraph (C) of this Section, the principal of and the interest on which when due will
provide moneys which, together with any moneys on deposit with such fiduciary at the
same time for such purpose, shall be sufficient, to pay when due the principal of and
interest due and to become due on said 2013 Bonds on and prior to the applicable
redemption date or maturity date thereof.
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(C) As used in this Section, the term “Federal Obligations” means (i) non-
callable, direct obligations of the United States of America, (ii) non-callable and non-
prepayable, direct obligations of any agency of the United States of America, which are
unconditionally guaranteed by the United States of America as to full and timely
payment of principal and interest, (iii) non-callable, non-prepayable coupons or interest
installments from the securities described in clause (i) or clause (ii) of this paragraph,
which are stripped pursuant to programs of the Department of the Treasury of the
United States of America, or (iv) coupons or interest installments stripped from bonds of
the Resolution Funding Corporation.
Section 24. Ordinance to Constitute a Contract. The provisions of this
ordinance shall constitute a contract between the City and the registered owners of the
2013 Bonds. Any pledge made in this ordinance and the provisions, covenants and
agreements herein set forth to be performed by or on behalf of the City shall be for the
equal benefit, protection and security of the owners of any and all of the 2013 Bonds.
All of the 2013 Bonds, regardless of the time or times of their issuance, shall be of equal
rank without preference, priority or distinction of any of the 2013 Bonds over any other
thereof except as expressly provided in or pursuant to this ordinance. This ordinance
shall constitute full authority for the issuance of the 2013 Bonds and to the extent that
the provisions of this ordinance conflict with the provisions of any other ordinance or
resolution of the City, the provisions of this ordinance shall control. If any section,
paragraph or provision of this ordinance shall be held to be invalid or unenforceable for
any reason, the invalidity or unenforceability of such section, paragraph or provision
shall not affect any of the remaining provisions of this ordinance.
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List Names
In this ordinance, reference to an officer of the City includes any person holding
that office on an interim basis and any person delegated the authority to act on behalf of
such officer.
Section 25. Publication. The City Clerk is hereby authorized and directed to
publish this ordinance in pamphlet form and to file copies thereof for public inspection in
his office.
Section 26. Effective Date. This ordinance shall become effective upon its
passage and approval.
Passed and adopted this 16th day of September, 2013, by roll call vote as
follows:
Ayes:
Nays:
Approved: September 16, 2013
________________________________
Mayor
Published in pamphlet form: September 17, 2013
(SEAL)
Attest:
________________________________
City Clerk
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CHI02_61088468v1_212856-00016 8/9/2013 11:45 AM
CERTIFICATE
I, Robert R. Kiely, Jr., City Clerk of The City of Lake Forest, Illinois, hereby certify
that the foregoing ordinance entitled: “Ordinance Authorizing the Issuance of General
Obligation Refunding Bonds, Series 2013, of The City of Lake Forest, Illinois,” is a true
copy of an original ordinance that was duly passed and adopted by the recorded
affirmative votes of a majority of the members of the City Council of the City at a
meeting thereof that was duly called and held at 7:30 p.m. on September 16, 2013, in
the Council Chambers at City Hall, 220 East Deerpath, and at which a quorum was
present and acting throughout, and that said copy has been compared by me with the
original ordinance signed by the Mayor on September 16, 2013, and thereafter
published in pamphlet form on September 17, 2013 and recorded in the Ordinance
Book of the City and that it is a correct transcript thereof and of the whole of said
ordinance, and that said ordinance has not been altered, amended, repealed or
revoked, but is in full force and effect.
I further certify that the agenda for said meeting included the ordinance as a
matter to be considered at the meeting and that said agenda was posted at least
48 hours in advance of the holding of the meeting in the manner required by the Open
Meetings Act, 5 Illinois Compiled Statutes 120, and was continuously available for
public review during the 48 hour period preceding the meeting.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of
the City, this ________ day of September, 2013.
________________________________
City Clerk
(SEAL)
169