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To: Moonray who wrote (10918)	12/18/1997 11:13:00 PM
From: Moonray	Respond to of 22053

Council votes to amend tax cap to lure 3Com Chicago Daily Herald Thu, Dec 18 1997 In order to convince 3Com Corp. to build its Chicago area headquarters in Rolling Meadows, the city had to make promises to the giant electronics firm that it would provide financial and other incentives to sweeten the deal. Now the city is counting on 3Com's promise of sales tax revenue generated from the Golf Road campus. The city council voted this week to amend its tax cap laws to exempt debt service on general obligation bonds issued to pay for the city's share of road improvements around 3Com's 40-acre campus. 3Com has pledged to use its sales tax revenue to retire the debt on the bonds. Once the bonds have been paid off, the city will receive a share of the sales tax revenue for a number of years. Kane, McKenna, the city's bond financial adviser, has said the amendment to the tax cap ordinance was necessary to lessen the perceived risk for investors, thus enabling the city to get a lower interest rate on the bonds. A lower interest rate allows the city to pay the bonds off earlier and put more future 3Com sales tax money into city coffers. But Fourth Ward alderman Mark Evenson said because Rolling Meadows is a home rule municipality, amending the tax cap ordinance isn't necessary to issue bonds. "When we create a levy for debt service, we do that for the entire life of the bond," Evenson said. "We can do that as a home rule municipality right now and we're not going to be breaking the tax cap." City officials say third-party investors don't see it that way, though. Investors need something in writing that says debt service is exempt from the tax cap ordinance. Had the tax cap ordinance not been amended, the city would instead have had to issue revenue bonds, which are guaranteed by other city revenue sources like sales taxes or motor fuel taxes. Revenue bonds carry a higher perceived risk for investors, and so they also have a higher interest rate, according to a memo from Kane, McKenna. One resident, Robert Gorsenger, said in response to the city council's decision to amend the tax cap, that he would begin gathering signatures on a ballot referendum petition to abolish the city's home rule charter. (Copyright 1997) _____via IntellX_____ Copyright 1997, Chicago Daily Herald. All rights reserved. Republication and redistribution of Chicago Daily Herald content is expressly pr ohibited without the prior written consent of Chicago Daily Herald. Chicago Daily Herald shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon. o~~~ O