Bernardi Securities, Inc.

Transcription

1 New Issue Final Official Statement Dated November 20, 2012 Not Rated Subject to compliance by the Village with certain covenants, in the opinion of Chapman and Cutler LLP, Bond Counsel, under present law, interest on the Bonds is excludable from gross income of the owners thereof for federal income tax purposes, and is not included as an item of tax preference in computing the federal alternative minimum tax for individuals and corporations, but such interest is taken into account in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. Interest on the Bonds is not exempt from present State of Illinois income taxes. See TAX EXEMPTION herein for a more complete discussion. The Bonds are qualified tax-exempt obligations under Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. See QUALIFIED TAX-EXEMPT OBLIGATIONS herein. $1,575,000 VILLAGE OF HINSDALE DuPage and Cook Counties, Illinois Special Service Area Number Thirteen Bonds, Series 2012B Dated Date of Delivery Book-Entry Non-Callable Bank Qualified Due Serially December 15, The (the Bonds ) are being issued by the Village of Hinsdale, DuPage and Cook Counties, Illinois (the Village ). Interest is payable semiannually on June 15 and December 15 of each year, commencing June 15, Interest is calculated based on a 360-day year of twelve 30-day months. 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. AMOUNTS, MATURITIES, INTEREST RATES, YIELDS AND CUSIP NUMBERS Principal Due Interest CUSIP Principal Due Interest CUSIP Amount Dec. 15 Rate Yield Number Amount Dec. 15 Rate Yield Number $120, % 0.850% AA9 $160, % 2.150% AF8 140, % 1.300% AB7 165, % 2.300% AG6 145, % 1.600% AC5 175, % 2.600% AH4 150, % 1.850% AD3 180, % 2.850% AJ0 155, % 2.000% AE1 185, % 3.000% AK7 OPTIONAL REDEMPTION The Bonds are not subject to optional redemption prior to maturity. PURPOSE, LEGALITY AND SECURITY Bond proceeds will be used to provide special municipal services to Special Service Area Number Thirteen (the Area ), to fund the Reserve Account (as hereinafter defined) and to pay the costs of issuance of the Bonds. See THE PROJECT herein. The Area is solely within Cook County, Illinois. THE BONDS ARE LIMITED OBLIGATIONS OF THE VILLAGE SOLELY PAYABLE, EXCEPT AS TO ACCRUED INTEREST, FROM THE COLLECTION OF TAXES LEVIED AGAINST ALL OF THE PROPERTY IN THE AREA, IF, AS AND WHEN COLLECTED, AND PLEDGED UNDER THE BOND ORDINANCE TO SECURE THE PAYMENT THEREOF. THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE VILLAGE, AND NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE VILLAGE, THE STATE OF ILLINOIS, OR ANY POLITICAL SUBDIVISION OF THE STATE OF ILLINOIS IS PLEDGED TO THE PAYMENT THEREOF. As additional security for the Bonds, the Village has established a special segregated account (the Tax Escrow Account ) and a debt service reserve account (the Reserve Account ) for the purpose of paying the Bonds, each to be held by Amalgamated Bank of Chicago, Chicago, Illinois. As authorized by the Property Tax Code of the State of Illinois, as amended, the Village will direct the County Treasurer and ex-officio Collector of Cook County, Illinois, to deposit all of the taxes collected on behalf of the Village which are levied by the Village against all of the property in the Area directly into the Tax Escrow Account to be used to pay the principal of and interest on the Bonds. The Reserve Account will be funded at the time of delivery of the Bonds with proceeds of the Bonds and used to pay debt service on the Bonds when funds are not available in the Tax Escrow Account. See SECURITY AND SOURCE OF PAYMENTS FOR THE BONDS - Tax Escrow and Security Agreement and Debt Service Reserve Account herein. In the opinion of Bond Counsel, Chapman and Cutler LLP, Chicago, Illinois, the Bonds will constitute valid and legally binding obligations of the Village payable both as to principal and interest from ad valorem taxes only within the Special Service Area according to their terms. See SECURITY AND SOURCE OF PAYMENT FOR THE BONDS. Persons considering a purchase of the Bonds should read this Final Official Statement in its entirety, including but not limited to BONDHOLDER S RISKS herein. The Bonds are offered when, as and if issued by the Village and received by Bernardi Securities, Inc., Chicago, Illinois, subject to prior sale, to withdrawal or modification of the offer without notice, and to the approval of legality by Chapman and Cutler LLP, Chicago, Illinois, Bond Counsel, and certain other conditions. Chapman and Cutler LLP, Chicago, Illinois, will also act as Disclosure Counsel to the Village. It is expected that beneficial interests in the Bonds will be available for delivery through the facilities of DTC on or about December 17, Bernardi Securities, Inc.

2 No dealer, broker, salesman or other person has been authorized by the Village to give any information or to make any representations with respect to the Bonds other than as contained in the Official Statement or the Final Official Statement and, if given or made, such other information or representations must not be relied upon as having been authorized by the Village. Certain information contained in the Official Statement and the Final Official Statement may have been obtained from sources other than records of the Village and, while believed to be reliable, is not guaranteed as to completeness. THE INFORMATION AND EXPRESSIONS OF OPINION IN THE OFFICIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF THE OFFICIAL STATEMENT OR THE FINAL OFFICIAL STATEMENT NOR ANY SALE MADE UNDER EITHER SUCH DOCUMENT SHALL CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE VILLAGE SINCE THE RESPECTIVE DATES THEREOF. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. References herein to laws, rules, regulations, ordinances, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts have not been included as appendices to the Official Statement or the Final Official Statement, they will be furnished on request. 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. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. 2

3 BOND ISSUE SUMMARY This Bond Issue Summary is expressly qualified by the entire Final Official Statement, which is provided for the convenience of potential investors and which should be reviewed in their entirety by potential investors. Issuer: Village of Hinsdale, DuPage and Cook Counties, Illinois. Issue:. Dated Date: Date of delivery. Interest Due: Each June 15 and December 15, commencing June 15, Principal Due: Optional Redemption: Authorization: Security: Serially each December 15, commencing December 15, 2013 through 2022, as detailed on the front page of this Final Official Statement. The Bonds are not subject to optional redemption prior to maturity. By vote of the Village Board and pursuant to the provisions of the Special Service Area Tax Law and the provisions of Section 7 of Article VII of the 1970 Constitution of the State of Illinois. THE BONDS ARE LIMITED OBLIGATIONS OF THE VILLAGE SOLELY PAYABLE, EXCEPT AS TO CAPITALIZED OR ACCRUED INTEREST, FROM THE COLLECTION OF TAXES LEVIED AGAINST ALL OF THE PROPERTY IN THE AREA, IF, AS AND WHEN COLLECTED, AND PLEDGED UNDER THE BOND ORDINANCE (AS HEREINAFTER DEFINED) TO SECURE THE PAYMENT THEREOF. THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE VILLAGE, AND NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE VILLAGE, THE STATE OF ILLINOIS, OR ANY POLITICAL SUBDIVISION OF THE STATE OF ILLINOIS IS PLEDGED TO THE PAYMENT THEREOF. See SECURITY AND SOURCE OF PAYMENT FOR THE BONDS herein. As additional security for the Bonds, the Village has established a special segregated account (the Tax Escrow Account ) and a debt service reserve account (the Reserve Account ) for the purpose of paying the Bonds, each to be held by Amalgamated Bank of Chicago, Chicago, Illinois. As authorized by the Property Tax Code of the State of Illinois, as amended, the Village will direct the County Treasurer and ex-officio Collector of Cook County, Illinois, to deposit all of the taxes collected on behalf of the Village which are levied by the Village against all of the property in the Area directly into the Tax Escrow Account to be used to pay the principal of and interest on the Bonds. The Reserve Account will be funded at the time of delivery of the Bonds with proceeds of the Bonds and used to pay debt service on the Bonds when funds are not available in the Tax Escrow Account. See SECURITY AND SOURCE OF PAYMENTS FOR THE BONDS - Tax Escrow and Security Agreement and Debt Service Reserve Account herein. Bondholder s Risks: Credit Rating: Purpose: Tax Exemption: There are risks associated with the purchase of the Bonds. There may also be legal and practical limitations on the enforcement of remedies and amounts which may be realized upon enforcement of remedies available to the Bond Registrar/Paying Agent/Tax Escrow Agent and owners of the Bonds. See BONDHOLDER S RISKS" herein. The Village does not intend to apply for a credit rating on the Bonds. Bond proceeds will be used to provide special municipal services to Special Service Area Number Thirteen (the Area ), to fund the Reserve Account and to pay the costs of issuance of the Bonds. See THE PROJECT herein. Chapman and Cutler LLP, Chicago, Illinois, will provide an opinion as to the tax exemption of interest on the Bonds as discussed under TAX EXEMPTION in this Final Official Statement. Interest on the Bonds is not exempt from present State of Illinois income taxes. Bank Qualification: The Bonds are qualified tax-exempt obligations under Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. See QUALIFIED TAX-EXEMPT OBLIGATIONS herein. Bond Registrar/Paying Agent/ Tax Escrow Agent: Amalgamated Bank of Chicago, Chicago, Illinois. Delivery: The Bonds are expected to be delivered on or about December 17, Book-Entry Form: Denomination: Underwriter: Financial Advisor: 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. $5,000 or integral multiples thereof. Bernardi Securities, Inc., Chicago, Illinois. Speer Financial, Inc., Chicago, Illinois. 3

4 VILLAGE OF HINSDALE DuPage and Cook Counties, Illinois Board of Trustees Thomas K. Cauley, Jr. Village President J. Kimberley Angelo Douglas Geoga Laura LaPlaca Chris Elder Bill Haarlow Robert Saigh David C. Cook Village Manager Christine Bruton Village Clerk Robbins Schwartz Nicholas Lifton & Taylor Ltd. Chicago, Illinois SSA Attorney Darrell J. Langlois Assistant Village Manager/ Finance Director/Treasurer INTRODUCTION The Village of Hinsdale, Illinois, is authorized to issue its $1,575,000 Special Service Area Number Thirteen Bonds, Series 2012B, as described herein, under and pursuant to the Special Service Area Tax Law, 35 Illinois Compiled Statutes 200/27-5 et seq. Pursuant to the Bond Ordinance, the proceeds of the Bonds will be used for (i) providing special municipal services to the Area (see THE PROJECT herein), (ii) funding a Reserve Account (as hereinafter defined), and (iii) funding certain costs of issuance of the Bonds. Amalgamated Bank of Chicago, with its principal office in Chicago, Illinois, is acting as Bond Registrar and Paying Agent in connection with the Bond Ordinance (together with its successors, the Bond Registrar or Paying Agent as the case may be). The Village anticipates applying the net proceeds to be derived from the issuance of the Bonds as described below under the caption THE PROJECT herein. OWNERSHIP OF THE BONDS INVOLVE CERTAIN RISKS. NO PROSPECTIVE PURCHASER OF THE BONDS SHOULD MAKE A DECISION TO PURCHASE ANY BONDS WITHOUT FIRST READING AND CONSDIERING IN FULL THE SECTION IN THIS FINAL OFFICIAL STATEMENT ENTITLED BONDHOLDER S RISKS. DEFINITIONS Certain words and terms used in this Final Official Statement are defined from place to place herein, and certain other words and terms as used herein are defined as follows: Act means Special Service Area Tax Law, 35 Illinois Compiled Statutes 200/27-5 et seq., as supplemented and amended. 4

5 Area means Special Service Area Number Thirteen of the Village of Hinsdale, DuPage and Cook Counties, Illinois. Bonds means, authorized to be issued by the Bond Ordinance, including Bonds issued in exchange for or upon transfer or replacement of Bonds previously issued under the Bond Ordinance. Bond Fund means the Bond Fund created in the Bond Ordinance. Bond Registrar means Amalgamated Bank of Chicago, having its corporate trust office in Chicago, Illinois, duly authorized to do business as a Bond Registrar with the powers and duties set forth in the Bond Ordinance, or any successor designated as Bond Registrar under the Bond Ordinance. Code means the Internal Revenue Code of 1986, as amended. Ordinance or Bond Ordinance means an ordinance adopted by the Village Board on November 20, 2012, providing for the issue of of the Village, and the levy of a direct annual tax sufficient to pay the principal and interest on said Bonds. Paying Agent means the Amalgamated Bank of Chicago, having its corporate trust office in Chicago, Illinois, duly authorized to do business as a Paying Agent with its powers and duties as set forth in the Bond Ordinance or any successor designated as Paying Agent. Project means the construction of the public improvements constituting Special Services. Project Fund means the Project Fund created in the Bond Ordinance. Services or Special Services means the municipal services constituting the Project to be provided in the Area as herein more fully described. Special Service Area Taxes means the taxes levied without limit to rate or amount pursuant to the Bond Ordinance on the property in the Area by the Village to pay principal of and interest on the Bonds. Village means the Village of Hinsdale, DuPage and Cook Counties, Illinois. Village Board means the President and Board of Trustees of the Village. THE BONDS THE BONDS ARE LIMITED OBLIGATIONS OF THE VILLAGE SOLELY PAYABLE, EXCEPT AS TO ACCRUED INTEREST, FROM THE COLLECTION OF TAXES LEVIED AGAINST ALL OF THE PROPERTY IN THE AREA, IF, AS AND WHEN COLLECTED, AND PLEDGED UNDER THE BOND ORDINANCE TO SECURE THE PAYMENT THEREOF. THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE VILLAGE, AND NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE VILLAGE, THE STATE OF ILLINOIS, OR ANY POLITICAL SUBDIVISION OF THE STATE OF ILLINOIS IS PLEDGED TO THE PAYMENT THEREOF. 5

6 Authority, Special Service Area Taxes The Bonds are issued pursuant to the Act, and the principal of and interest on the Bonds are payable solely and only from Special Service Area Taxes. Under the Bond Ordinance, the Special Service Area Taxes when received shall be deposited in the Bond Fund as described below and applied to pay the principal of and interest on the Bonds as the same become due. See SECURITY AND SOURCE OF PAYMENTS FOR THE BONDS - Tax Escrow and Security Agreement and Debt Service Reserve Account herein. Security for the Bonds SECURITY AND SOURCE OF PAYMENT FOR THE BONDS The Bonds and the interest thereon are limited obligations of the Village secured and payable solely from the Special Service Area Taxes to be levied, extended and collected on the property within the Area subject to the Special Service Area Taxes. When collected, the Special Service Area Taxes shall be deposited by the County Collector (as defined below) in the Bond Fund held by the Tax Escrow Agent (as defined below). Tax Escrow and Security Agreement and Debt Service Reserve Account The Village will enter into a Tax Escrow and Security Agreement (the Tax Escrow Agreement ) for the purpose of providing additional security for payment of the Bonds. Pursuant to the Tax Escrow Agreement, the Village will establish an account (the Tax Escrow Account ) with Amalgamated Bank of Chicago, Chicago, Illinois, as the tax escrow and security agent (the Tax Escrow Agent ) under the Bond Ordinance. The Tax Escrow Agreement directs the County Treasurer and ex-officio Collector of the County of Cook, Illinois (the County Collector ) to deposit all Special Service Area Taxes collected on behalf of the Village into the Tax Escrow Account as authorized by the provisions of the Property Tax Code of the State of Illinois, as amended. Simultaneously with the delivery of the Bonds, the Village will set aside a portion of the proceeds of the Bonds in a separate fund held by the Tax Escrow Agent (the Reserve Account ) in an amount equal to $50,000 or $25,000 in the Last Bond Year (the Reserve Requirement ). Last Bond Year means the twelve-calendar month period beginning on December 16, 2021, and ending on December 15, As long as the Bonds are outstanding, to the fullest extent available from the Special Service Area Taxes, the Village will maintain an amount on deposit in the Reserve Account with the Tax Escrow Agent equal to not less than the Reserve Requirement. In the event such amount in the Reserve Account is used to pay the principal of or interest on the Bonds, the Reserve Account will be replenished to the Reserve Requirement, to the fullest extent available from the Special Service Area Taxes, as described below. Whenever funds are not available in the Tax Escrow Account to pay principal of or interest becoming due on the Bonds, there will be transferred promptly from the Reserve Account to the Tax Escrow Account, not less than (2) business days prior to such date, a sum which, together with the funds then on hand in the Tax Escrow Account, is sufficient to meet such principal or interest becoming due on the Bonds. Pursuant to the Bond Ordinance and for the purpose of providing the funds required to pay the interest on the Bonds when and as the same falls due and to pay and discharge the principal thereof at maturity, the Special Service Area Taxes and the Additional Deposits (as defined below) will be paid to the Tax Escrow Agent for deposit into the Tax Escrow Account in accordance with the following procedures: 6

7 (A) Initial Receipt and Transfer of the Special Service Area Taxes. (1) Promptly upon receipt of any of the Special Service Area Taxes for distribution, commencing with taxes levied for the year 2012, to be collected in 2013, and until payment in full of the Bonds has been made or duly provided for, the County Collector shall segregate and pay directly to the Tax Escrow Agent the Special Service Area Taxes for deposit in the Tax Escrow Account. (2) When the amount on deposit to the credit of the Reserve Account exceeds the Reserve Requirement after each June 15 and December 15 principal and interest payment date, the Tax Escrow Agent shall notify the Village of the amount of such excess and, upon the written request of the Village, said amount shall be either (a) transferred to the Tax Escrow Account and applied to the next immediately succeeding payment of the principal of and interest due on the Bonds, or (b) disbursed to the Village to be used for its lawful corporate purposes in the Area. (3) When the amount on deposit to the credit of the Reserve Account is less than the Reserve Requirement, then from each subsequent distribution of Special Service Area Taxes received from the County Collector, the Tax Escrow Agent will transfer to the Reserve Account an amount so as to enable the Reserve Account to be replenished to the Reserve Requirement; provided, however, that the Tax Escrow Agent shall only make such transfer after the Tax Escrow Account has been fully funded in order to pay principal of and interest on the Bonds due on the next immediately succeeding debt service payment date. (B) Additional Deposits. (1) Pursuant to the Bond Ordinance and as described therein, the Village may in its discretion transfer to the Tax Escrow Agent from any lawfully available funds on hand of the Village an amount in advance of the collection of the Special Service Area Taxes, which will be deposited in the Tax Escrow Account and used to pay interest and principal on the Bonds; and when the Special Service Area Taxes have been collected and deposited into the Tax Escrow Account, reimbursement shall be made by the Tax Escrow Agent to the Village in the amounts so advanced by the Village. (2) Pursuant to the Bond Ordinance and as described therein, the Village will transfer to the Tax Escrow Agent any remaining amount in the Project Fund after completion of the Project for deposit into the Tax Escrow Account and used to pay debt service on the Bonds. Prior to the tax levy filing deadline for tax levy year 2021, the Village may direct the Tax Escrow Agent to transfer $25,000 from the Reserve Account to the Bond Fund and further direct the abatement of taxes by such amount. Upon the final payment of the Bonds, the Village may use the balance remaining in the Reserve Account for Services within the Area, or may rebate such remaining balance to taxpayers within the Area. 7

8 Special Service Area Tax The levying of the Special Service Area Taxes was authorized by the Village Board in the Bond Ordinance. The Village shall take all actions which shall be necessary to provide for the levy, extension, collection and application of the Special Service Area Taxes levied by the Bond Ordinance, including enforcement of such taxes by institution of foreclosure procedures as provided by law. The Area is a contiguous area, located wholly within the corporate territory and boundaries of the Village (and solely within Cook County, Illinois). Enforcement of Payment of Special Service Area Taxes The Cook County Clerk intends to incorporate the bill for Special Service Area Taxes into the regular ad valorem property tax bill of property owners in the Area. In Illinois, general ad valorem property taxes are levied in one year and become payable during the following year. At the end of each collection year, the Cook County Treasurer applies to the Circuit Court of Cook County for a judgment for all unpaid general ad valorem property taxes. The Circuit Court of Cook County order resulting from that application for judgment provides for a sale of all property with unpaid general ad valorem property taxes. A public sale is held, at which time successful bidders pay the unpaid general ad valorem property taxes plus penalties. The annual tax sale is usually held during November of any given year in Cook County. Unpaid general ad valorem property taxes accrue penalties at the rate of 1-1/2% per month from their due date until the date of sale. Taxpayers can redeem their property by paying the purchaser of the delinquent taxes on the property at the general tax sale the amount paid at the sale, plus a penalty. If redemption does not occur within two and one half years, the purchaser of the property at the tax sale can receive a deed to the property which has been sold for delinquent taxes. Any delinquent Special Service Area Taxes for any given year would be included in this general tax sale. Alternatively, a municipality may seek enforcement of unpaid Special Service Area Taxes through foreclosure proceedings by seeking adjudication of the existence of a lien and a finding of a failure to pay Special Service Area Taxes when due. Upon making such a finding, a court having jurisdiction would enter a foreclosure decree authorizing the sale of the property subject to the lien of the Special Service Area Taxes. If a delinquency in the payment of the Special Service Area Taxes occurs, the Village is authorized by the Act to order institution of an action pursuant to Article 9 of the Illinois Municipal Code (65 ILCS 5/9-1-1, et seq.) to foreclose any lien therefor securing the Special Service Area Taxes. In such action the real property subject to the lien of the Special Service Area Taxes may be sold at a judicial foreclosure sale. The ability of the Village to foreclose the lien of delinquent unpaid Special Service Area Taxes may be limited in certain instances and may require prior consent of the property owner in the event that the property is owned by any receivership of the Federal Deposit Insurance Corporation (the FDIC ). See BONDHOLDER'S RISKS - Foreclosures and Bankruptcy. Such judicial foreclosure proceedings are not mandatory under the Act. However, in the Bond Ordinance the Village has covenanted with the holders of the Bonds to take all actions, all in the manner provided by law, if any, which shall be necessary to provide for the levy and extension, collection and application of the Special Service Area Taxes, and to assure the timely collection of Special Service Area Taxes, by providing the County with such information as is deemed necessary to enable the County to include any property subject to delinquent Special Service Area Taxes in the County Collector s annual tax sale and in the event the tax lien is forfeited at such tax sale, by the commencement and maintenance of an action to foreclose the lien of any delinquent Special Service Area Taxes, all in the manner provided by law. 8

9 No assurances can be given that a judicial foreclosure action, once commenced, will be completed or that it will be completed in a timely manner. Article 9 of the Illinois Municipal Code provides that the municipality or its assignee may file a complaint to foreclose a lien on Special Service Area Taxes in the same manner that foreclosures are permitted by law in case of delinquent general taxes. The law in case of delinquent general taxes to which the Illinois Municipal Code refers is the Illinois Revenue Code. Under such foreclosure proceedings, the court adjudicates the existence of a default in the payment obligation and authorizes a foreclosure sale; the sale is conducted and the proceeds distributed according to the respective priorities; the successful bidder is given a certificate of sale; and, if the redemption period expires without a redemption of the Special Service Area Taxes, the certificate of sale may be converted to a deed. Although the municipality holds the lien for the local improvement and is therefore the proper party to commence foreclosure procedures, bondholders with bonds secured by Special Service Area Taxes may compel the municipality to perform its duty and use all lawful means, including foreclosure, to collect the taxes out of which the bondholders are to be paid. Special Service Area Taxes create a lien that is superior to other liens and encumbrances, and when general property taxes and Special Service Area Taxes are both delinquent, the proceeds of any foreclosure action, if insufficient to pay each in full, are divided between them on a pro rata basis. If Special Service Area Taxes are not paid in full at a foreclosure sale, and the lien amounts are bid in at such foreclosure sale, then unless the Special Service Area Taxes are then redeemed through payment of the amount of the Special Service Area Taxes plus interest, the certificate of sale can be converted into a deed to the property only after expiration of the applicable redemption period. The Illinois Constitution prescribes certain minimum redemption periods for unpaid taxes on property, including Special Service Area Taxes, but the Illinois General Assembly may create longer redemption periods. No assurances can be given that the real property subject to sale or foreclosure and sale will be sold or, if sold, that the proceeds of sale will be sufficient to pay any delinquent installment of Special Service Area Taxes. Neither the Act nor Article 9 of the Illinois Municipal Code requires the Village to purchase or otherwise acquire any lot or parcel of property offered for sale or subject to foreclosure if there is no other purchaser at such sale. Article 9 of the Illinois Municipal Code does specify that the Special Service Area Taxes will have the same lien priority in the case of delinquency as the priority of the lien of other property taxes. Defeasance Any Bond or Bonds which (a) are paid and cancelled, (b) which have matured and for which sufficient sums been deposited with the Bond Registrar to pay all principal and interest due thereon, or (c) for which sufficient funds and Defeasance Obligations have been deposited with the Bond Registrar or similar institution to pay, taking into account investment earnings on such obligations, all principal of and interest on such Bond or Bonds when due at maturity or as called for redemption, pursuant to an irrevocable escrow or trust agreement, will cease to have any lien on or right to receive or be paid from the Special Service Area Taxes and will no longer have the benefits of any covenant for the registered owners of outstanding Bonds as set forth in the Bond Ordinance as such relates to lien and security of the outstanding Bonds. All covenants relative to the tax exempt status of the Bonds; and payment, registration, transfer, and exchange; are expressly continued for all Bonds whether outstanding Bonds or not. For purposes of this paragraph, Defeasance Obligations means (a) direct and general full faith and credit obligations of the United States Treasury ( Directs ), (b) certificates of participation or trust receipts in trusts comprised wholly of Directs or (c) other obligations unconditionally guaranteed as to timely payment by the United States Treasury. 9

10 SOURCES AND USES The sources and uses of funds resulting from the Bonds are: SOURCES: Principal Amount... $1,575, Premium... 30, Total Sources... $1,605, USES: Deposit to Project Fund... $1,500, Deposit to Reserve Account... 50, Costs of Issuance(1)... 55, Total Uses... $1,605, Note: (1) Includes underwriter s discount and other issuance costs. DEBT INFORMATION After issuance of the Bonds, the Village will have outstanding $1,575,000 principal amount of the Bonds. The Village has outstanding $15,600,000 principal amount of general obligation debt and $905,685 of general obligation limited tax debt certificates. Special Service Area Number Thirteen Outstanding Debt (Principal Only) Calendar The Cumulative Retirement Year Bonds Amount Percent $ 120,000 $ 120, % , , % , , % , , % , , % , , % ,000 1,035, % ,000 1,210, % ,000 1,390, % ,000 1,575, % Total... $1,575,000 REGISTRATION, TRANSFER AND EXCHANGE See also APPENDIX B for information on registration, transfer and exchange of book-entry bonds. The Bonds will be initially issued as book-entry bonds. The Village shall cause books for the registration and for the transfer of the Bonds to be kept at the principal office maintained for the purpose by the Bond Registrar in Chicago, Illinois. The Village will authorize to be prepared, and the Bond Registrar shall keep custody of, multiple bond blanks executed by the Village for use in the transfer and exchange of Bonds. 10

11 Any Bond may be transferred or exchanged, but only in the manner, subject to the limitations, and upon payment of the charges as set forth in the Bond Ordinance. Upon surrender for transfer or exchange of any Bond at the principal office maintained for the purpose by the Bond Registrar, duly endorsed by, or accompanied by a written instrument or instruments of transfer in form satisfactory to the Bond Registrar and duly executed by the registered owner or such owner s attorney duly authorized in writing, the Village shall execute and the Bond Registrar shall authenticate, date and deliver in the name of the registered owner, transferee or transferees (as the case may be) a new fully registered Bond or Bonds of the same maturity and interest rate of authorized denominations, for a like aggregate principal amount. The execution by the Village of any fully registered Bond shall constitute full and due authorization of such Bond, and the Bond Registrar shall thereby be authorized to authenticate, date and deliver such Bond, provided, however, the principal amount of outstanding Bonds of each maturity authenticated by the Bond Registrar shall not exceed the authorized principal amount of Bonds for such maturity less Bonds previously paid. The Bond Registrar shall not be required to transfer or exchange any Bond following the close of business on the first day of the month in which an interest payment date occurs on such Bond (known as the record date). The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of the principal of or interest on any Bonds shall be made only to or upon the order of the registered owner thereof or such owner s legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. No service charge shall be made for any transfer or exchange of Bonds, but the Village or the Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Bonds. THE PROJECT The Area consists of certain properties contained in The Woodlands neighborhood within a portion of the Village (see map, parcel numbers and equalized assessed values in APPENDIX A). Bond proceeds will be used to pay the necessary cost and expense of constructing new lining of sanitary sewer, replacement of water mains, installation of rain gardens, bio-swales, and storm sewers; the construction of new asphalt pavement and concrete gutters, and also including all engineering consulting fees, construction supervision and inspection costs, attorney, bond and disclosure counsel fees, bond financing, underwriting and issuance costs and a contingency. The estimated total cost of the Project is $15,000,000. The Village will contribute approximately $13,000,000, and there was $525,000 of prepayments. The Project is expected to be completed by April 30, SPECIAL SERVICE AREA FINANCE IN ILLINOIS Funds to pay for qualifying Special Services will be derived from special service area (SSA) financing. SSA financing involves the levy of the Special Service Area Taxes, all in accordance with and pursuant to the Act. When special services are provided to a particular contiguous area within a municipality, in addition to the services generally provided throughout the municipality, a municipality may create a special service area. The cost of the special services may be paid from taxes levied upon the taxable real property within the area, and such taxes may be levied in the special service area at a rate or amount sufficient to produce revenues required to provide the special services. 11

12 Prior to the first levy of taxes in the special service area and prior to or within 60 days after the adoption of the ordinance proposing the establishment of the special service area, the municipality is required to hold a public hearing and to publish and mail notice of such hearing. At the public hearing, any interested person may file written objections or give oral statements with respect to the establishment of the special service area and the levy of taxes therein. As a result of the hearing, the municipality may delete areas from the special service area as long as the remaining area is contiguous. After the hearing, an ordinance establishing the special service area must be timely filed with the county recorder and the county clerk. Bonds secured by the full faith and credit of the special service area territory may be issued for the purpose of providing special services. Such bonds are paid from the levy of taxes unlimited as to rate or amount against the taxable real property in the special service area. The county clerk will annually extend taxes against all of the taxable real property in the area in amounts sufficient to pay the principal and interest on the bonds. Such bonds are exempt from the Limitation Law (as hereinafter defined). Prior to the issuance of special service area bonds, the municipality must give published and mailed notice and hold a hearing at which any interested person may file written objections, or be heard orally, with respect to the issuance of the bonds. The questions of the creation of the special service area, the levy of a tax on such area and the issuance of special service area bonds may all be considered at the same hearing. The creation of the special service area, the levy of a tax within the area and the issuance of bonds for the provision of special services to the area are subject to a petition process. If, within 60 days after the public hearing, a petition signed by not less than 51% of the electors residing within the special service area and 51% of the owners of record of land located within the special service area is filed with the municipal clerk objecting to the creation of the special service area, the levy of a tax or the issuance of bonds, then the area may not be created, the tax may not be levied and the bonds may not be issued. If such a petition is filed, the subject matter of the petition may not be proposed relative to any of the signatories within the next two years. The Village will comply with all of the aforementioned conditions prior to the issuance of the Bonds. See below under the caption BONDHOLDER'S RISKS. If for any reason real estate taxes are not timely collected, there may not be sufficient Special Service Area Taxes to pay the principal of and interest on the Bonds. Unlike general obligation bonds, which are payable from any source even if levied taxes are unavailable, the Bonds are payable only from the levy of the Special Service Area Taxes if, as and when collected and moneys in the Reserve Account as described above. THE BOND ORDINANCE The following is a summary of certain provisions of the Bond Ordinance, which incorporates by reference the matters set forth above under the caption THE BONDS. Reference is made to the Bond Ordinance in its entirety for a complete recital of the detailed provisions thereof and of the Bonds. Provisions for Bonds The Bond Ordinance makes provisions for the issuance, maturities, interest rates, and the form and other terms and provisions of the Bonds, all as described above under the caption entitled THE BONDS. 12

13 Special Service Area Taxes Under the Bond Ordinance, Special Service Area Taxes are pledged to pay the principal of and interest on the Bonds when due. The Bonds, however, are not general obligations of the Village. The Special Service Area Taxes are those derived only from the Area, and the Village is not obligated to pay the Bonds from other sources, except the Reserve Account as described above, in the event of late receipt of Special Service Area Taxes. The Bonds are payable from such Special Service Area Taxes, if, as and when collected and deposited into the Bond Fund, as described in BONDHOLDER'S RISKS. Funds and Accounts Special Service Area Taxes are appropriated and set aside for, among other things, paying the principal of and interest on the Bonds when and as the same become due, and the funds derived from the sale of the Bonds are appropriated and set aside for paying the costs of the Project and issuance costs related to the Bonds. Special Service Area Taxes when received are to be deposited into the Bond Fund as described in SECURITY AND SOURCE OF PAYMENT FOR THE BONDS - Tax Escrow and Security Agreement and Debt Service Reserve Account herein. COOK COUNTY REAL PROPERTY ASSESSMENT, TAX LEVY AND COLLECTION PROCEDURES The Area is located wholly within Cook County, Illinois. Cook County Real Property Assessment The County Assessor (the Assessor ) is responsible for the assessment of all taxable real property within Cook County (the County ), including that in the Village, except for certain railroad property, pollution control facilities and low sulfur dioxide emission coal-fueled devices, which are assessed directly by the Illinois Department of Revenue (the Department of Revenue ). For triennial reassessment purposes, Cook County is divided into three districts: west and south suburbs (the South Tri ), north and northwest suburbs (the North Tri ), and the City of Chicago (the City Tri ). The Village is located in the South Tri and was reassessed for the 2011 tax levy year. In response to the downturn of the real estate market, the Assessor reduced the 2009 assessed value on suburban residential properties (specifically, those properties located in the South Tri and the North Tri) not originally scheduled for reassessment in For tax year 2009, each suburban township received an adjustment percentage for tax year 2009, lowering the existing assessed values of all residential properties in such township within a range of 4% to 15%, beginning with the second-installment tax bills payable in the fall of Real property in the County is separated into classes for assessment purposes. After the Assessor establishes the fair market value of a parcel of property, that value is multiplied by the appropriate classification percentage to arrive at the assessed valuation (the Assessed Valuation ) for the parcel. Such classification percentages range from 10% for certain residential, commercial and industrial property to 25% for other industrial and commercial property. Property is classified for assessment into six basic categories, each of which is assessed (beginning with the 2009 tax levy year) at various percentages of fair market value as follows: Class 1 - unimproved real estate (10%); Class 2 - residential (10%); Class 3 - rental-residential (16% in tax year 2009, 13% in tax year 2010, and 10% in tax year 2011 and subsequent years); Class 4 - not-for-profit (25%); Class 5a - commercial (25%); and Class 5b - industrial (25%). 13

14 In addition, property may be temporarily classified into one of eight additional assessment classification categories. Upon expiration of such classification, property so classified will revert to one of the basic six assessment classifications described above. The additional assessment classifications are as follows: REVERTS TO CLASS DESCRIPTION OF QUALIFYING PROPERTY ASSESSMENT PERCENTAGE CLASS 6b Newly constructed industrial properties 10% for first 10 years and any 5b or substantially rehabilitated sections of 10 year renewal; if not renewed, existing industrial properties 15% in year 11, 20% in year 12 C Industrial property that has undergone 10% for first 10 years, 15% in year 11, 5b environmental testing and remediation 20% in year 12 Commercial property that has undergone 10% for first 10 years, 15% in year 11, 5a environmental testing and remediation 20% in year 12 7a/7b Newly constructed or substantially 10% for first 10 years, 15% in year 11, 5a rehabilitated commercial properties in 20% in year 12 an area in need of commercial development 8 Industrial properties in enterprise 10% for first 10 years and any 10-year 5b communities or zones in need of substantial renewal; if not renewed, 15% in year 11, revitalization 20% in year 12 Commercial properties in enterprise 10% for first 10 years, 15% in year 11, 5a communities or zones in need of substantial 20% in year 12 revitalization 9 New or substantially rehabilitated multi- 10% for first 10 years and any As family residential properties in target areas, 10 year renewal Applicable empowerment or enterprise zones S Class 3 properties subject to Section 8 contracts 10% for term of Section 8 contract 3 renewed under the Mark up to Market option renewal and any subsequent renewal L Substantially rehabilitated Class 3, 4 or 5b 10% for first 10 years and any 10-year 3, 4 or 5b properties qualifying as Landmark or renewal; if not renewed, 15% in year 11, Contributing buildings 20% in year 12 Substantially rehabilitated Class 5a properties 10% for first 10 years, 15% in year 11, 5a qualifying as Landmark or Contributing 20% in year 12 buildings The Assessor has established procedures enabling taxpayers to contest their proposed Assessed Valuations. Once the Assessor certifies its final Assessed Valuations, a taxpayer can seek review of its assessment by appealing to the Cook County Board of Review (the Board of Review ), which consists of three commissioners elected by the voters of the County. The Board of Review has the power to adjust the Assessed Valuations set by the Assessor. Owners of residential property having six or fewer units are able to appeal decisions of the Board of Review to the Illinois Property Tax Appeal Board (the PTAB ), a statewide administrative body. The PTAB has the power to determine the Assessed Valuation of real property based on equity and the weight of the evidence. Taxpayers may appeal the decision of PTAB to either the Circuit Court of Cook County (the Circuit Court ) or the Illinois Appellate Court under the Illinois Administrative Review Law. 14

15 As an alternative to seeking review of Assessed Valuations by PTAB, taxpayers who have first exhausted their remedies before the Board of Review may file an objection in the Circuit Court. The procedure under this alternative is similar to the judicial review procedure described in the immediately preceding paragraph, however, the standard of proof differs. In addition, in cases where the Assessor agrees that an assessment error has been made after tax bills have been issued, the Assessor can correct any factual error, and thus reduce the amount of taxes due, by issuing a Certificate of Error. Certificates of Error are not issued in cases where the only issue is the opinion of the valuation of the property. Cook County Equalization After the Assessor has established the Assessed Valuation for each parcel for a given year, and following any revisions by the Board of Review or PTAB, the Department of Revenue is required by statute to review the Assessed Valuations. The Department of Revenue establishes an equalization factor (the Equalization Factor ), commonly called the multiplier, for each county to make all valuations uniform among the 102 counties in the State. Under State law, the aggregate of the assessments within each county is equalized at 33-1/3% of the estimated fair cash value of real property located within the county prior to any applicable exemptions. One multiplier is applied to all property in the County, regardless of its assessment category, except for certain farmland property and wind energy assessable property, which are not subject to equalization. The following table sets forth the Equalization Factor for the County for the last 10 tax levy years. TAX LEVY YEAR EQUALIZATION FACTOR Once the Equalization Factor is established, the Assessed Valuation, as revised by the Board of Review or PTAB, is multiplied by the Equalization Factor to determine the equalized assessed valuation (the EAV ) of that parcel. The EAV for each parcel is the final property valuation used for determination of tax liability. The aggregate EAV for all parcels in any taxing body s jurisdiction, plus the valuation of property assessed directly by the Department of Revenue, constitutes the total real estate tax base for the taxing body and is the figure used to calculate tax rates (the Assessment Base ). The following table sets forth the Equalization Factor for Cook County for the last 10 tax levy years. Cook County Exemptions The Illinois Property Tax Code, as amended (the Property Tax Code ), exempts certain property from taxation. Certain property is exempt from taxation on the basis of ownership and/or use, including, but not limited to, public parks, not-for-profit schools, public schools, churches, not-for-profit hospitals and public hospitals. In addition, the Property Tax Code provides a variety of homestead exemptions, which are discussed below. 15

16 An annual General Homestead Exemption provides that the EAV of certain property owned and used for residential purposes may be reduced by the amount of any increase over the 1977 EAV, up to a maximum reduction of $6,000 for assessment year 2009 and thereafter. The Alternative General Homestead Exemption limits EAV increases for homeowners (who also reside on the property as their principal place of residence) to 7% a year, up to a certain maximum dollar amount each year as defined by the statute. Any amount of increase that exceeds the maximum exemption as defined is added to the 7% increase and is part of that property s taxable EAV. Homes that do not increase by at least 7% a year are entitled, in the alternative, to the General Homestead Exemption as discussed above. For properties in the City Tri, the Alternative General Homestead Exemption cannot exceed $20,000 for assessment year 2009, $16,000 for assessment year 2010 and $12,000 for assessment year For properties in the North Tri, the Alternative General Homestead Exemption cannot exceed $20,000 for assessment years 2009 and 2010, $16,000 for assessment year 2011 and $12,000 for assessment year For properties in the South Tri, the Alternative General Homestead Exemption cannot exceed $26,000 for assessment year 2009, $20,000 for assessment year 2010 and 2011 and $12,000 for assessment year The Long-Time Occupant Homestead Exemption limits the increase in EAV of a taxpayer s homestead property to 10% per year if such taxpayer has owned the property for at least 10 years as of January 1 of the assessment year (or 5 years if purchased with certain government assistance) and has a household income of $100,000 or less ( Qualified Homestead Property ). If the taxpayer s annual income is $75,000 or less, the EAV of the Qualified Homestead Property may increase by no more than 7% per year. There is no exemption limit for Qualified Homestead Properties. The Homestead Improvement Exemption applies to residential properties that have been improved and to properties that have been rebuilt in the two years following a catastrophic event, as defined in the Property Tax Code. The exemption is limited to $75,000 per year, to the extent the Assessed Valuation is attributable solely to such improvements or rebuilding. Additional exemptions exist for senior citizens. The Senior Citizens Homestead Exemption annually reduces the EAV on residences owned and occupied by senior citizens. The maximum exemption is $4,000. Beginning in tax year 2010, County taxpayers seeking to claim this exemption must reapply for the exemption on an annual basis. The Senior Citizens Assessment Freeze Homestead Exemption freezes property tax assessments for homeowners who are 65 and older, reside in their property as their principal place of residence and receive a household income not in excess of $55,000. This exemption grants to qualifying senior citizens an exemption equal to the difference between (i) the current EAV of the residence and (ii) 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. Three exemptions are available to veterans of the United States armed forces. The Disabled Veterans Exemption exempts up to $70,000 of the Assessed Valuation of property owned and used exclusively by veterans, their spouses or unmarried surviving spouses. Qualification for this exemption requires the veteran s disability to be of such a nature that the federal government has authorized payment for purchase of specially adapted housing under the U.S. Code as certified to annually by the Illinois Department of Veterans Affairs. The Disabled Veterans Standard Homestead Exemption provides an annual homestead exemption of (i) $5,000 to those veterans with a service-connected disability of 70% (75% for exemptions granted from 2007 to 2009) and (ii) $2,500 to those veterans with a service-connected disability of less than 70% (75% for exemptions granted from 2007 to 2009), but at least 50%. 16

17 The Returning Veterans Homestead Exemption is available for property owned and occupied as the principal residence of a veteran in the assessment year, or the year following the assessment year, in which the veteran returns from an armed conflict while on active duty in the United States armed forces. This provision grants a one-time homestead exemption of $5,000. Finally, 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 disabled persons who meet State-mandated guidelines. Cook County Tax Levy As part of the annual budgetary process of governmental units (the Units ) with power to levy taxes in the County, the designated body for each Unit annually adopts proceedings to levy real estate taxes. The administration and collection of real estate taxes is statutorily assigned to the County Clerk and the County Treasurer. After the Units file their annual tax levies, the County Clerk computes the annual tax rate for each Unit. The County Clerk computes the Unit s maximum allowable levy by multiplying the maximum tax rate for that Unit by the prior year s EAV for all property currently in the Village. The prior year s EAV includes the EAV of any new property, the current year value of any annexed property and any recovered tax increment value, minus any disconnected property for the current year under the Limitation Law. The tax rate for a Unit is computed by dividing the lesser of the maximum allowable levy or the actual levy by the current year s EAV. Cook County Property Tax Extension Limitation Law The Limitation Law is applied after the prior year EAV limitation. The Limitation Law limits the annual growth in the amount of property taxes to be extended for certain Illinois non-home rule units, including the Village. The effect of the Limitation Law is to limit the amount of property taxes that can be extended for a taxing body. In addition, general obligation bonds, notes and installment contracts payable from ad valorem taxes, unlimited as to rate and amount, cannot be issued by the affected taxing bodies unless they are approved by referendum, are alternate bonds or are for certain refunding purposes. The Special Service Area Taxes are not limited by the Limitation Law. Cook County Extensions The County Clerk then computes the total tax rate applicable to each parcel of real property by aggregating the tax rates of all of the Units having jurisdiction over the particular parcel. The County Clerk extends the tax by entering the tax (determined by multiplying the total tax rate by the EAV of that parcel for the current assessment year) in the books prepared for the County Collector (the Warrant Books ) along with the tax rates, the Assessed Valuation and the EAV. The Warrant Books are the County Collector s authority for the collection of taxes and are used by the County Collector as the basis for issuing tax bills to all property owners. 17

18 Cook County Collections Property taxes are collected by the County Collector, who is also the County Treasurer, who remits to each Unit its share of the collections. Taxes levied in one year become payable during the following year in two installments, the first due on March 1 and the second on the later of August 1 or 30 days after the mailing of the tax bills. A payment due is deemed to be paid on time if the payment is postmarked on the due date. Beginning with the first installment payable in 2010, the first installment s equal to 55% of the prior year s tax bill. However, if a Certificate of Error is approved by a court or certified on or before November 30 of the preceding year and before the estimated tax bills are prepared, then the first installment is instead based on the certain percentage of the corrected prior year s tax bill. The second installment is for the balance of the current year s tax bill, and is based on the then current tax year levy, Assessed Valuation and Equalization Factor, and reflects any changes from the prior year in those factors. The first installment penalty date has been the first business day in March for each of the last ten years. However, for 2010, the first installment penalty date was established as April 1 by statute. The following table sets forth the second installment penalty date for the last 10 tax levy years in the County. SECOND INSTALLMENT TAX LEVY YEAR PENALTY DATE 2002 October 1, November 15, November 1, September 1, December 3, November 3, December 1, December 13, November 1, August 1, 2012 It is possible that the changes to the assessment appeals process described above will cause delays similar to those experienced in past years in preparation and mailing of the second installment in future years. In the future, the County may provide for tax bills to be payable in four installments instead of two. During the periods of peak collections, tax receipts are forwarded to each Unit on a weekly basis. Upon receipt of taxes from the County Collector, the Village promptly credits the taxes received to the funds for which they were levied. Within 90 days following the second installment due date, the County Collector presents the Warrant Books to the Circuit Court and applies for a judgment for all unpaid taxes. The court orders resulting from the application for judgment provides for an Annual Tax Sale (the Annual Tax Sale ) of unpaid taxes shown on that year s Warrant Books. A public sale is held, at which time successful tax buyers pay the unpaid taxes plus penalties. In each such public sale, the collector can use any automated means. Unpaid taxes accrue penalties at the rate of 1.5% per month from their due date until the date of sale. Taxpayers can redeem their property by paying the amount paid at the sale, plus a maximum of 12% for each six-month period after the sale. If no redemption is made within the applicable redemption period (ranging from six months to two and one-half years depending on the type and occupancy of the property) and the tax buyer files a petition in the Circuit Court, notifying the necessary parties in accordance with the applicable law, the tax buyer receives a deed to the property. In addition, there are miscellaneous statutory provisions for foreclosure of tax liens. If there is no sale of the tax lien on a parcel of property at the Annual Tax Sale, the taxes are forfeited and the property becomes eligible to be purchased at any time thereafter at an amount equal to all delinquent taxes and interest accrued to the date of purchase. Redemption periods and procedures are the same as applicable to the Annual Tax Sale. The Scavenger Sale (the Scavenger Sale ), like the Annual Tax Sale, is a sale of unpaid taxes. The Scavenger Sale is held every two years on all property on which two or more years taxes are delinquent. The sale price of the unpaid taxes is the amount bid at such sale, which may be less than the amount of delinquent taxes. Redemption periods vary from six months to two and a half years depending upon the type and occupancy of the property. 18

19 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 Special Service Area Taxes are not affected by the Law. Area Tax Payment History PROPERTY ASSESSMENT AND TAX INFORMATION The debt service concerning the Bonds is payable from the Special Service Area Taxes. The following are tax rates paid historically by taxpayers in the Area. In the future, the Special Service Area Taxes will be levied and collected for the Bonds. Levy Years Village of Hinsdale... $ $ $ $ $ Cook County Cook County Forest Preserve District Metropolitan Water Reclamation District Suburban TB Sanitarium Consolidated Elections Lyons Township (2) Lyons Mental Health Des Plaines Valley Mosquito Abatement District Village of Hinsdale Library Fund School District Number Hinsdale Township High School District Number Community College District No Total(3)... $ $ $ $ $ Notes: (1) Source: Cook County Clerk. May not add exactly due to Cook County procedure of rounding. (2) Includes Road and Bridge and General Assistance. (2) Representative tax rates are for other government units are from Lyons Township tax code number The present aggregate EAV of taxable real property (personal property is not taxed) constituting the Area is $53,922,726 (2011 EAV). There are 161 parcels in the Area ranging from EAVs of $1,871 to $1,084,269 (see the appended map). Also, 50 parcels were excluded from the Area, 44 parcels prepaid and 6 parcels no longer met the criteria to be included in the Area. The Area is residential and substantially fully built out. Area Valuations(1) Levy Years 2008(2)(3) 2009(2) 2010(2) 2011(2)(3) Total Area EAV... $62,481,026 $69,384,501 $66,423,825 $53,922,726 Percent Change +(-)... N/A 11.05% (4.27%) (18.82%) Notes: (1) Source: The Cook County Assessor and the Village. (2) EAV numbers are historic and for information only; the SSA was not established until (3) Triennial reassessment years. 19

20 Area Tax Extensions and Collections(1)(2) Levy Collection Taxes Total Collections Year Year Extended Amount Percent $3,175,292 $3,175, % ,199,949 3,199, % ,251,589 3,251, % ,214,173 3,164,296(3) 98.45% Note: (1) Source: The Cook County Treasurer and the Village. (2) Provided for information only; the SSA has not levied any taxes yet. (3) From time to time, property owners within the Area might be delinquent in the timely payment of their taxes. As of November 6, 2012, five parcels within the Area still owed 2011 taxes in an aggregate amount of $49,675. None of these parcels have a prior history of tax sales. The Village has created the Reserve Account to bridge delays in the collection of the Special Service Area Taxes. The Village, however, is not required to advance its own funds to cushion or bridge any delay in the payment of debt service on the Bonds. BONDHOLDER'S RISKS The following discussion is not a complete list of the risks associated with the purchase of the Bonds nor does the order of presentation necessarily reflect the relative importance of the various risks. Potential purchasers of the Bonds are advised to consider the following factors, among others, and to review and consider the Final Official Statement in its entirety in evaluating the Bonds. Limited Sources of Payment The Bonds are special and limited obligations of the Village, payable from the Special Service Area Taxes derived by the Village from the Area, subject, however, to the provisions of the Bond Ordinance requiring or permitting the use, setting apart, or payment of moneys held thereunder for or to the purposes and on the terms, conditions, priorities, and order set forth therein. THE BONDS ARE PAYABLE FROM AND SECURED BY THE SPECIAL SERVICE AREA TAXES AND ARE NOT GENERAL OBLIGATIONS OF THE VILLAGE, AND NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE VILLAGE, THE STATE OF ILLINOIS, OR ANY POLITICAL SUBDIVISION OF THE STATE OF ILLINOIS IS PLEDGED TO THE PAYMENT THEREOF. Any failure of taxpayers to timely pay the Special Service Area Taxes (including any payment under protest) can result in the unavailability of Special Service Area Taxes to pay debt service on the Bonds. The Village is to collect the Special Service Area Taxes and covenants to take all steps necessary to collect and enforce the tax. Reserves In the event there is a delay in the payment of the Special Service Area Taxes to pay the principal of and interest on the Bonds, there is a reserve account or fund to cushion or bridge such a delay. While there is a mechanism in the Tax Escrow Agreement to replenish such account if the funds therein are depleted, no assurance can be made that such replenishment will occur or will occur in a timely manner. The Village is not required to advance its own funds to cushion or bridge such a delay in the payment of debt service on the Bonds. The process to sell delinquent properties for taxes could result in a delay of over a year in the receipt of sale proceeds to apply to the Bonds. 20

21 Foreclosures and Bankruptcy In the event that any taxpayer should have its portion of the Area foreclosed upon or should file for bankruptcy or have bankruptcy proceedings filed against it, such foreclosure or bankruptcy proceedings may have an adverse impact on the Special Service Area Taxes available at a given time to pay debt service on the Bonds. While the foregoing does not abrogate, diminish or impair taxpayers' obligation to pay Special Service Area Taxes levied in connection with the Bonds, a delay in paying such taxes for any reason, including foreclosure and bankruptcy proceedings, would result in delays in the Village's receipt of Special Service Area Taxes to apply to the payment of the principal of and interest on the Bonds. The filing of bankruptcy proceeds stays all legal proceedings against a debtor during the pending of such proceedings. This could delay for an uncertain time the receipt of Special Service Area Taxes. Although general taxes are not dischargeable in bankruptcy proceedings, the amount of tax or other liens could conceivably become so large that a buyer at a tax sale could not be found and holders of the Bonds never paid. No Public Market for the Bonds; No Rating No public market is expected to exist for the Bonds, and the Bonds will not be listed on any exchange. Neither the Underwriter nor any other person is obligated to make a secondary market in the Bonds or to take any action to maintain the prices thereof. No application has been made to any rating agency for the purpose of obtaining a rating on the Bonds. No person should invest in the Bonds with funds such person may need to convert readily into cash. The Bonds are not readily liquid, if at all; and holders of the Bonds should be prepared to hold their Bonds to their stated maturity dates. Limited Remedies The practical realization of any remedies (especially in connection with bankruptcy proceedings and with tax sales in the event of failures to pay Special Service Area Taxes) in connection with Bond Ordinance and Special Service Area Taxes are in many respects dependent upon judicial or administrative actions, which are often subject to discretion and delay. Under existing constitutional, statutory and judicial law, any such remedies may not be readily available or may be limited. A court may decide not to order the specific performance of covenants contained in such documents. The various legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by state and federal laws, rulings, and decisions affecting remedies and by bankruptcy, moratorium, reorganization or other laws of general application affecting the enforcement of creditor's rights and equitable principles. Risks Unidentified It is not anticipated and no assurance can be given, that all risks direct, indirect, or otherwise are included herein. The Village and the Underwriter make no assurances to that effect. Loss of Tax Exemption As discussed under TAX EXEMPTION herein, interest on the Bonds could become includable in gross income for purposes of federal income taxation, retroactive to the date the Bonds were issued, as a result of future acts or omissions of the Village in violation of its covenants in the Bond Ordinance. Should such an event of taxability occur, the Bonds will remain outstanding until maturity and are not subject to any special redemption solely as a result of the occurrence of events which cause the loss of the tax exemption. 21

22 Modifications Require 100% Consent of the Bondholders Any material modification of the amount or date when payment is due with respect to the Bonds requires the consent of all of the owners of all of the then outstanding Bonds, which may be difficult or impossible to obtain. Thus, in the event that property owners within the Area encounter financial difficulties, it may be impossible for the Bondholders or the Village to grant any kind of relief from the payment of the Special Service Area Taxes necessary to make the timely payment of debt service on the Bonds. No Acceleration Provision The Bonds do not contain a provision allowing for the acceleration of the Bonds in the event of a payment default. THE VILLAGE The information provided in this Section is provided to investors for informational purposes only. Investors should make their decision whether to purchase the Bonds based on the conditions within the Area. Overview The Village, a non-home rule municipality under the Illinois Constitution, is located approximately 20 miles west-southwest of downtown Chicago and encompasses approximately 4.86 square miles. Approximately 89% of the Village's 2011 EAV is in DuPage County and the remainder is in Cook County. The Village is bordered principally by the Village of Oak Brook on the north; the Village of Clarendon Hills on the west; the Village of Western Springs on the east; and the Villages of Burr Ridge and Willowbrook on the south. The Village was incorporated in 1873, and has grown into a mature, principally residential community. The Village population was recorded at 16,816 at the time of the 2010 U.S. Census. The population has been fairly stable within the past decade. Village Organization and Services The Village is governed by an elected President and six trustees, which collectively comprise the Village Board. The President and trustees serve staggered four year terms. The governing body is elected on a non-partisan, at-large basis. Day to day operation of Village affairs are directed by the Village Manager who is appointed by the Village Board. Currently, the Village employs approximately 246 persons of which 92 are full-time. This employment figure includes 27 full-time police personnel and 23 full-time fire fighting personnel. Besides police and fire, Village departments include public works, public services, park and recreation, administrative, finance, and water and sewer. Utilities servicing the Village include Northern Illinois Gas Company and Commonwealth Edison Company. The Water and Sewer Department of the Village operates a water system that is supplied by Lake Michigan water from the City of Chicago through the DuPage Water Commission. In the portion of the Village within Cook County, the Hinsdale Sanitary District collects all of the sewage and treats all but a small portion of the sewage (with such small portion treated by Metropolitan Water Reclamation District). In the portion of the Village within DuPage County, the Village Water and Sewer Department collects a majority of the sewage (approximately 75%) and the Hinsdale Sanitary District treats the sewage. 22

23 Residents are served by street maintenance services. The Village has approximately 78 miles of paved streets. Recreational opportunities are provided through the Village's Park and Recreation Department and the DuPage County and Cook County Forest Preserve Districts. The Village has 19 parks that are located within the boundaries of the Village which include the Katherine Legge Memorial Lodge Park (52 acres), a swimming pool, tennis courts, ball fields, playgrounds and ice skating facilities. Transportation Interstate 294 (the Tri-State Tollway) borders the eastern edge of the Village and Illinois Highway 83 borders the western edge of the Village. Interstate 55 to the south and Interstate 88 (the East-West Tollway) to the north are located approximately three miles from the Village. These major roadways provide the community access to both metropolitan and national highway systems. Ogden Avenue, Chicago Avenue (47th Street) and 55th Street are the primary east-west roadways in the Village. Illinois Highway 83 is the primary north-south roadway serving the Village. Commuter rail service is available to Chicago's downtown by the Burlington Northern Santa Fe Line, and there are three commuter stations in Hinsdale. Travel time to Chicago's downtown by commuter train is approximately 40 minutes. Community Life The Hinsdale Board of Library Trustees operates the public library system in the Village. The current facility was renovated in 2008 and houses approximately 109,500 books as well as a collection of records, tapes, films and audio discs. The Hinsdale Library has one of the highest circulation transactions per capita in the State. Approximately 282,000 items are loaned to patrons annually. The Village is also served by 16 churches and annual cultural art fairs and programs. Health care facilities include Adventist Hinsdale Hospital which has 273 beds; RML Specialty Hospital which has 87 beds; and the Robert Crown Center for Health Education, a teaching center specializing in educational programs for the general public. Educational facilities in Hinsdale include four public elementary schools, three private elementary schools, one public middle high school and one public high school. TAX EXEMPTION Federal tax law contains a number of requirements and restrictions which apply to the Bonds, including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the proper use of bond proceeds and the facilities financed therewith, and certain other matters. The Village has covenanted to comply with all requirements that must be satisfied in order for the interest on the Bonds to be excludable from gross income for federal income tax purposes. Failure to comply with certain of such covenants could cause interest on the Bonds to become includable in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. Subject to the Village s compliance with the above-referenced covenants, under present law, in the opinion of Bond Counsel, interest on the Bonds is excludable from the gross income of the owners thereof for federal income tax purposes, and is not included as an item of tax preference in computing the federal alternative minimum tax for individuals and corporations, but interest on the Bonds is taken into account, however, in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. 23

24 In rendering its opinion, Bond Counsel will rely upon certifications of the Village with respect to certain material facts within the Village s knowledge. Bond Counsel s opinion represents its legal judgment based upon its review of the law and the facts that it deems relevant to render such opinion and is not a guarantee of a result. The Code includes provisions for an alternative minimum tax ( AMT ) for corporations in addition to the corporate regular tax in certain cases. The AMT, if any, depends upon the corporation s alternative minimum taxable income ( AMTI ), which is the corporation s taxable income with certain adjustments. One of the adjustment items used in computing the AMTI of a corporation (with certain exceptions) is an amount equal to 75% of the excess of such corporation s adjusted current earnings over an amount equal to its AMTI (before such adjustment item and the alternative tax net operating loss deduction). Adjusted current earnings would include certain tax-exempt interest, including interest on the Bonds. Ownership of the Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations. Prospective purchasers of the Bonds should consult their tax advisors as to applicability of any such collateral consequences. The issue price (the Issue Price ) for each maturity of the Bonds is the price at which a substantial amount of such maturity of the Bonds is first sold to the public. The Issue Price of a maturity of the Bonds may be different from the price set forth, or the price corresponding to the yield set forth, on the cover page hereof. If the Issue Price of a maturity of the Bonds is less than the principal amount payable at maturity, the difference between the Issue Price of each such maturity, if any, of the Bonds (the OID Bonds ) and the principal amount payable at maturity is original issue discount. For an investor who purchases an OID Bond in the initial public offering at the Issue Price for such maturity and who holds such OID Bond to its stated maturity, subject to the condition that the Village complies with the covenants discussed above, (a) the full amount of original issue discount with respect to such OID Bond constitutes interest which is excludable from the gross income of the owner thereof for federal income tax purposes; (b) such owner will not realize taxable capital gain or market discount upon payment of such OID Bond at its stated maturity; (c) such original issue discount is not included as an item of tax preference in computing the alternative minimum tax for individuals and corporations under the Code, but is taken into account in computing an adjustment used in determining the alternative minimum tax for certain corporations under the Code, as described above; and (d) the accretion of original issue discount in each year may result in an alternative minimum tax liability for corporations or certain other collateral federal income tax consequences in each year even though a corresponding cash payment may not be received until a later year. Based upon the stated position of the Illinois Department of Revenue under Illinois income tax law, accreted original issue discount on such OID Bonds is subject to taxation as it accretes, even though there may not be a corresponding cash payment until a later year. Owners of OID Bonds should consult their own tax advisors with respect to the state and local tax consequences of original issue discount on such OID Bonds. Owners of Bonds who dispose of Bonds prior to the stated maturity (whether by sale, redemption or otherwise), purchase Bonds in the initial public offering, but at a price different from the Issue Price or purchase Bonds subsequent to the initial public offering should consult their own tax advisors. 24

25 If a Bond is purchased at any time for a price that is less than the Bond s stated redemption price at maturity or, in the case of an OID Bond, its Issue Price plus accreted original issue discount (the Revised Issue Price ), the purchaser will be treated as having purchased a Bond with market discount subject to the market discount rules of the Code (unless a statutory de minimis rule applies). Accrued market discount is treated as taxable ordinary income and is recognized when a Bond is disposed of (to the extent such accrued discount does not exceed gain realized) or, at the purchaser s election, as it accrues. Such treatment would apply to any purchaser who purchases an OID Bond for a price that is less than its Revised Issue Price. The applicability of the market discount rules may adversely affect the liquidity or secondary market price of such Bond. Purchasers should consult their own tax advisors regarding the potential implications of market discount with respect to the Bonds. An investor may purchase a Bond at a price in excess of its stated principal amount. Such excess is characterized for federal income tax purposes as bond premium and must be amortized by an investor on a constant yield basis over the remaining term of the Bond in a manner that takes into account potential call dates and call prices. An investor cannot deduct amortized bond premium relating to a tax-exempt bond. The amortized bond premium is treated as a reduction in the tax-exempt interest received. As bond premium is amortized, it reduces the investor s basis in the Bond. Investors who purchase a Bond at a premium should consult their own tax advisors regarding the amortization of bond premium and its effect on the Bond s basis for purposes of computing gain or loss in connection with the sale, exchange, redemption or early retirement of the Bond. There are or may be pending in the Congress of the United States legislative proposals, including some that carry retroactive effective dates, that, if enacted, could alter or amend the federal tax matters referred to above or affect the market value of the Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would apply to bonds issued prior to enactment. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed federal tax legislation. Bond Counsel expresses no opinion regarding any pending or proposed federal tax legislation. The Internal Revenue Service (the Service ) has an ongoing program of auditing tax-exempt obligations to determine whether, in the view of the Service, interest on such tax-exempt obligations is includable in the gross income of the owners thereof for federal income tax purposes. It cannot be predicted whether or not the Service will commence an audit of the Bonds. If an audit is commenced, under current procedures the Service may treat the Village as a taxpayer and the Bondholders may have no right to participate in such procedure. The commencement of an audit could adversely affect the market value and liquidity of the Bonds until the audit is concluded, regardless of the ultimate outcome. Payments of interest on, and proceeds of the sale, redemption or maturity of, tax-exempt obligations, including the Bonds, are in certain cases required to be reported to the Service. Additionally, backup withholding may apply to any such payments to any Bond owner who fails to provide an accurate Form W-9 Request for Taxpayer Identification Number and Certification, or a substantially identical form, or to any Bond owner who is notified by the Service of a failure to report any interest or dividends required to be shown on federal income tax returns. The reporting and backup withholding requirements do not affect the excludability of such interest from gross income for federal tax purposes. Interest on the Bonds is not exempt from present State of Illinois income taxes. Ownership of the Bonds may result in other state and local tax consequences to certain taxpayers. Bond Counsel expresses no opinion regarding any such collateral consequences arising with respect to the Bonds. Prospective purchasers of the Bonds should consult their tax advisors regarding the applicability of any such state and local taxes. 25

26 QUALIFIED TAX-EXEMPT OBLIGATIONS Subject to the Village s compliance with certain covenants, in the opinion of Bond Counsel, the Bonds are qualified tax-exempt obligations under the small issuer exception provided under Section 265(b)(3) of the Code, which affords banks and certain other financial institutions more favorable treatment of their deduction for interest expense than would otherwise be allowed under Section 265(b)(2) of the Code. CONTINUING DISCLOSURE The Village will enter into a Continuing Disclosure Undertaking (the Undertaking ) for the benefit of the beneficial owners of the Bonds to send certain information annually and to provide notice of certain events to the Municipal Securities Rulemaking Board (the MSRB ) pursuant to the requirements of Section (b)(5) of Rule 15c2-12 (the Rule ) adopted by the Securities and Exchange Commission (the Commission ) under the Securities Exchange Act of No person, other than the Village, has undertaken, or is otherwise expected, to provide continuing disclosure with respect to the Bonds. The information to be provided on an annual basis, the events which will be noticed on an occurrence basis and a summary of other terms of the Undertaking, including termination, amendment and remedies, are set forth below under THE UNDERTAKING. The Village has represented that it has not failed to comply in all material respects with each and every undertaking previously entered into by it pursuant to the Rule. A failure by the Village to comply with the Undertaking will not constitute a default under the Ordinance and beneficial owners of the Bonds are limited to the remedies described in the Undertaking. See THE UNDERTAKING - Consequences of Failure of the Village to Provide Information. The Village must report any failure to comply with the Undertaking in accordance with the Rule. Any broker, dealer or municipal securities dealer must consider such report before recommending the purchase or sale of the Bonds in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. Bond Counsel expresses no opinion as to whether the Undertaking complies with the requirements of Section (b)(5) of the Rule. THE UNDERTAKING The following is a brief summary of certain provisions of the Undertaking of the Village and does not purport to be complete. The statements made under this caption are subject to the detailed provisions of the Undertaking, a copy of which is available upon request from the Village. Annual Financial Information Disclosure The Village covenants that it will disseminate its Annual Financial Information and its Audited Financial Statements, if any (as described below) to the MSRB in such manner and format and accompanied by identifying information as is prescribed by the MSRB or the Commission at the time of delivery of such information within 210 days after the last day of the Village s fiscal year (currently April 30). If Audited Financial Statements are not available when the Annual Financial Information is filed, the Village will file unaudited financial statements. The Village will submit Audited Financial Statements to the MSRB s Electronic Municipal Market Access ( EMMA ) system within 30 days after availability to the Village. MSRB Rule G-32 requires all EMMA filings to be in wordsearchable PDF format. This requirement extends to all documents to be filed with EMMA, including financial statements and other externally prepared reports. 26

27 Annual Financial Information means: 1. All of the tables under the heading COOK COUNTY REAL PROPERTY ASSESSMENT, TAX LEVY AND COLLECTION PROCEDURES within this Final Official Statement; and 3. All of the tables under the heading DEBT INFORMATION within this Final Official Statement. Audited Financial Statements means financial statements of the Village as audited annually by independent certified public accountants. Audited Financial Statements are expected to continue to be prepared according to Generally Accepted Accounting Principles as applicable to governmental units (i.e., as subject to the pronouncements of the Governmental Accounting Standards Board and subject to any express requirements of State law). Reportable Events Disclosure The Village covenants that it will disseminate in a timely manner (not in excess of ten business days after the occurrence of the Reportable Event) Reportable Events Disclosure to the MSRB in such manner and format and accompanied by identifying information as is prescribed by the MSRB or the Commission at the time of delivery of such information. MSRB Rule G-32 requires all EMMA filings to be in word-searchable PDF format. This requirement extends to all documents to be filed with EMMA, including financial statements and other externally prepared reports. The Events are: 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. Bond 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. Bankruptcy, insolvency, receivership or similar event of the Village* 13. The consummation of a merger, consolidation, or acquisition involving the Village or the sale of all or substantially all of the assets of the Village, 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 14. Appointment of a successor or additional trustee or the change of name of a trustee, if material. This event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Village 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 Village, 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 Village. 27

28 Consequences of Failure of the Village to Provide Information The Village shall give notice in a timely manner to the MSRB of any failure to provide disclosure of Annual Financial Information and Audited Financial Statements when the same are due under the Undertaking. In the event of a failure of the Village to comply with any provision of the Undertaking, the beneficial owner of any Bond may seek mandamus or specific performance by court order, to cause the Village to comply with its obligations under the Undertaking. A default under the Undertaking shall not be deemed a default under the Bond Ordinance, and the sole remedy under the Undertaking in the event of any failure of the Village to comply with the Undertaking shall be an action to compel performance. Amendment; Waiver Notwithstanding any other provision of the Undertaking, the Village by resolution or ordinance authorizing such amendment or waiver, may amend the Undertaking, and any provision of the Undertaking may be waived, if: (a) (i) The amendment or the waiver is made in connection with a change in circumstances that arises from a change in legal requirements, including, without limitation, pursuant to a no-action letter issued by the Commission, a change in law, or a change in the identity, nature, or status of the Village, or type of business conducted; or (ii) The Undertaking, as amended, or the provision, as waived, would have complied with the requirements of the Rule at the time of the primary offering, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (b) The amendment or waiver does not materially impair the interests of the beneficial owners of the Bonds, as determined by parties unaffiliated with the Village (such as Bond Counsel). In the event that the Commission or the MSRB or other regulatory authority approves or requires Annual Financial Information or notices of a Reportable Event to be filed with a central post office, governmental agency or similar entity other than the MSRB or in lieu of the MSRB, the Village shall, if required, make such dissemination to such central post office, governmental agency or similar entity without the necessity of amending the Undertaking. Termination of Undertaking The Undertaking shall be terminated if the Village shall no longer have any legal liability for any obligation on or relating to repayment of the Bonds under the Bond Ordinance. The Village shall give notice to the MSRB in a timely manner if this paragraph is applicable. Additional Information Nothing in the Undertaking shall be deemed to prevent the Village from disseminating any other information, using the means of dissemination set forth in the Undertaking or any other means of communication, or including any other information in any Annual Financial Information or Audited Financial Statements or notice of occurrence of a Reportable Event, in addition to that which is required by the Undertaking. If the Village chooses to include any information from any document or notice of occurrence of a Reportable Event in addition to that which is specifically required by the Undertaking, the Village shall have no obligation under the Undertaking to update such information or include it in any future disclosure or notice of occurrence of a Reportable Event. 28

29 Dissemination of Information; Dissemination Agent When filings are required to be made with the MSRB in accordance with the Undertaking, such filings are required to be made through its EMMA system for municipal securities disclosure or through any other electronic format or system prescribed by the MSRB for purposes of the Rule. The Village may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under the Undertaking, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. OPTIONAL REDEMPTION The Bonds are not subject to optional redemption prior to maturity. LITIGATION There is no litigation of any nature now pending or threatened restraining or enjoining the issuance, sale, execution or delivery of the Bonds, or in any way contesting or affecting the validity of the Bonds or any proceedings of the Village taken with respect to the issuance or sale thereof. CERTAIN LEGAL MATTERS Certain legal matters incident to the authorization, issuance and sale of the Bonds are subject to the approving legal opinion of Chapman and Cutler LLP, Chicago, Illinois, as Bond Counsel (the Bond Counsel ), who has been retained by, and acts as, Bond Counsel to the Village. Bond Counsel has not been retained or consulted on disclosure matters and has not undertaken to review or verify the accuracy, completeness or sufficiency of this Final Official Statement or other offering material relating to the Bonds and assumes no responsibility for the statements or information contained in or incorporated by reference in this Final Official Statement, except that in its capacity as Bond Counsel, Chapman and Cutler LLP has, at the request of the Village, reviewed only those portions of this Final Official Statement involving the description of the Bonds, the security for the Bonds (excluding forecasts, projections, estimates or any other financial or economic information in connection therewith), the description of the federal tax exemption of interest on the Bonds and the bank-qualified status of the Bonds. This review was undertaken solely at the request and for the benefit of the Village and did not include any obligation to establish or confirm factual matters set forth herein. Chapman and Cutler LLP, Chicago, Illinois, will also serve as Disclosure Counsel to the Village. FINAL OFFICIAL STATEMENT AUTHORIZATION This Final Official Statement has been authorized for distribution to prospective purchasers of the Bonds. All statements, information, and statistics herein are believed to be correct but are not guaranteed by the consultants or by the Village, and all expressions of opinion, whether or not so stated, are intended only as such. 29

30 UNDERWRITING Bernardi Securities, Inc., Chicago, Illinois (the Underwriter ), has agreed to purchase all but not less than all of the Bonds at a price of $1,585, It is anticipated that delivery of the Bonds will occur on the date shown on the cover page hereof. The Bonds may be offered and sold to certain dealers (including the Underwriter or other dealers depositing Bonds into investment trusts) at prices or yields other than such public offering prices or yields shown in this Final Official Statement, and such public offering prices or yields may be changed, from time to time, by the Underwriters. FINANCIAL ADVISOR The Village has engaged Speer Financial, Inc. as financial advisor (the Financial Advisor ) in connection with the issuance and sale of the Bonds. The Financial Advisor is a Registered Municipal Advisor in accordance with the rules of the Municipal Securities Rulemaking Board (the MSRB ). The Financial Advisor will not participate in the underwriting of the Bonds. The financial information included in the Final Official Statement has been compiled by the Financial Advisor. Such information does not purport to be a review, audit or certified forecast of future events and may not conform with accounting principles applicable to compilations of financial information. The Financial Advisor is not a firm of certified public accountants and does not serve in that capacity or provide accounting services in connection with the Bonds. The Financial Advisor is not obligated to undertake any independent verification of or to assume any responsibility for the accuracy, completeness or fairness of the information contained in this Final Official Statement, nor is the Financial Advisor obligated by the Village s continuing disclosure undertaking. CERTIFICATION We have examined this Final Official Statement dated November 20, 2012, for the $1,575,000 Special Service Area Number Thirteen Bonds, Series 2012B, 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 Final 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/ THOMAS K. CAULEY, JR. Village President VILLAGE OF HINSDALE DuPage and Cook Counties, Illinois /s/ DAVID C. COOK Village Manager VILLAGE OF HINSDALE DuPage and Cook Counties, Illinois 30

31 APPENDIX A MAP OF THE SPECIAL SERVICE AREA NUMBER THIRTEEN AND PINS

32 A-1