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Aurora to issue conduit bonds for Aurora University learning commons; council told city bears no repayment obligation
Summary
Council was asked to authorize up to $16 million in conduit revenue bonds to finance a 45,000‑square‑foot learning commons for Aurora University; staff and bond counsel said the arrangement is private‑activity conduit debt and the city assumes no repayment obligation.
Aurora officials presented an ordinance on July 15 authorizing the issuance and sale of adjustable‑rate demand economic development revenue bonds in an amount not to exceed $16 million to support a new learning commons at Aurora University. Chris Minnick, the city’s chief financial officer, said the transaction is conduit debt: the city functions as issuer but the repayment obligation rests solely with Aurora University and the bonds will not appear on the city’s financial statements.
Sharon Maxwell, senior vice president for business and finance at Aurora University, described the project as a 45,000‑square‑foot, three‑story facility on Prairie Street that will house the library, academic support, career services, university archives and media creation spaces. Maxwell said the university has a roughly $15 million Illinois state grant to support the project and will use donations and reserves for remaining costs.
Nancy Burke of Chapman & Cutler, acting as bond counsel for the city, explained the legal basis under federal tax law that permits conduit issuance for certain not‑for‑profit organizations and emphasized the documents’ limits on city liability. Burke said Aurora University will provide the debt service obligations and that BMO Harris Bank will provide a letter of credit to support payments, and she noted that issuance costs are paid by the university.
Action taken: the bond transaction (ordinance 25‑0543) was moved to the consent agenda; staff told the committee that the arrangements are standard conduit financing that lowers borrowing costs for the university while leaving the city’s credit and taxes unaffected.
Ending: Minnick said the city has used similar conduit structures for Aurora University in prior years and that staff and counsel will be available for questions when the item reaches the full council consent agenda.
