HomeMy WebLinkAboutOrdinance #1802ORDINANCE NUMBER 1$02
AN ORDINANCE of the City of Canton, Fulton County, Illinois,
authorizing and providing for an Installment Purchase Agreement
for the purpose of paying a part of the cost of a redevelopment
project, and authorizing and providing for the issue of $1,200,000
General Obligation Limited Tax Debt Certificates, Series 2004,
evidencing the rights to payment under such Agreement,
prescribing the details of the Agreement and Certificates, and
providing for the security for and means of payment under the
Agreement of the Certificates.
PREAMBLES
WHEREAS
A. The City of Canton, Fulton County, Illinois (the "City"), is a City and unit of local
government of the State of Illinois (the "State ") operating, inter alia, under and pursuant to the
following laws:
1. the Illinois Municipal Code (the "Municipal Code ");
2. the Local Government Debt Reform Act of the State of Illinois (the "Debt
Reform Act"), and in particular, the provisions of Section 17 of the Debt Reform Act (the
"Installment Purchase Provisions of the Debt Reform Act"); and
3. all other Omnibus Bond Acts of the State;
in each case, as supplemented and amended (collectively, "Applicable Law ").
B. The City Council (the "City Council ") has considered the needs of the City and, in
so doing, the City Council has deemed and do now deem it advisable, necessary, and for the best
interests of the City to undertake a redevelopment project in and near an abandoned
manufacturing facility formerly owned and operated in the City by International Harvester (the
"Plant") in order to address and ameliorate blighting conditions.
C. To that end the City Council has heretofore authorized a feasibility study (the
"Study ") to determine whether the Plant and other nearby parcels lying within the corporate
limits of the City (collectively, the "Proposed Redevelopment Project Area ") qualify as a
redevelopment project area pursuant to the Tax Increment Allocation Redevelopment Act, as
amended (the "TIF Act").
D. The City Council has reviewed the Study and has heretofore, and it hereby expressly
is, determined that the Proposed Redevelopment Project Area qualifies as a "blighted area" as
defined in the TIF Act.
E. The City Council has heretofore, and it hereby expressly is, found and determined
that the Proposed Redevelopment Project Area on the whole has not been subject to growth and
development through investment by private enterprise and would not reasonably be anticipated
to be developed without the adoption of a redevelopment plan (the "Redevelopment Plan ") and
project (the "Redevelopment Project") pursuant to the TIF Act.
F. The City Council has heretofore, and it hereby expressly is, determined that it will
be necessary to demolish the Plant in order to accomplish the redevelopment objectives of the
City as contemplated by the Redevelopment Plan for the Proposed Redevelopment Project Area.
G. The original estimate for the costs of demolition of the Plant was approximately
$4,500,000.
H. The City Council has been advised that demolition of the Plant will generate
substantial quantities of salvageable steel, and, due to recent increases in the value of scrap steel,
has heretofore, and it is hereby, determined that it is possible substantially to reduce said costs of
demolition, and, to that end, has received a bid for demolition services (the "Service
Agreement") from N.E. Finch in the amount of $1,163,000.
I. The Service Agreement constitutes personal property, an eligible "redevelopment
project cost" as defined in the TIF Act and a preliminary expenditure by the City, being made in
anticipation of the approval of the Redevelopment Plan and the Redevelopment Project,
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designation of the Proposed Redevelopment Project Area, and adoption of tax increment
allocation financing therefore.
J. Acquisition of the Service Agreement, together with all mechanical, electrical, and
other services necessary, useful, or advisable thereto (collectively, the "2004 Service
Agreement"), all as shown on preliminary plans and cost estimates on file with the City Council,
is desirable and necessary and in the best interests of the City and its residents.
K. The City Council has heretofore, and it hereby expressly is, determined the total
cost of the 2004 Service Agreement and expenses incidental thereto, including financial, legal,
architectural, and engineering services related to such work and to the Agreement hereinafter
provided for in this Ordinance (collectively "Related Expenses ") to be not less than $1,200,000
plus estimated investment earnings which may be received on said sum prior to disbursement.
L. Sufficient funds of the City are not available to pay the costs of the 2004 Service
Agreement and Related Expenses, and it will, therefore, be necessary to borrow money in the
amount of $1,200,000 for the purpose of paying such costs.
M. Pursuant to the Installment Purchase Provisions of the Debt Reform Act, as
amended by Public Act 91-868 of the 91st General Assembly of the State of Illinois, the City has
the powers as follows:
The governing body of each governmental unit may purchase or
lease either real or personal property, including investments,
investment agreements, or investment services, through
agreements that provide that the consideration for the purchase or
lease may be paid through installments made at stated intervals for
a period of no more than 20 years or another period of time
authorized by law, whichever is greater. Each governmental unit
may issue certificates evidencing the indebtedness incurred under
the lease or agreement. The governing body may provide for the
treasurer, comptroller, finance officer, or other officer of the
governing body charged with financial administration to act as
counter-party to any such lease or agreement, as nominee lessor or
seller. When the lease or agreement is executed by the officer of
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the governmental unit authorized by the governing body to bind
the governmental unit thereon by the execution thereof and is filed
with and executed by the nominee lessor or seller, the lease or
agreement shall be sufficiently executed so as to permit the
governmental unit to issue certificates evidencing the indebtedness
incurred under the lease or agreement. The certificates shall be
valid whether or not an appropriation with respect thereto is
included in any annual or supplemental budget adopted by the
governmental unit. From time to time, as the governing body
executes contracts for the purpose of acquiring and constructing
the services or real or personal property that is a part of the subject
of the lease or agreement, including financial, legal, architectural,
and engineering services related to the lease or agreement, the
governing body shall order the contracts filed with its nominee
officer, and that officer shall identify the contracts to the lease or
agreement; that identification shall permit the payment of the
contract from the proceeds of the certificates; and the nominee
officer shall duly apply or cause to be applied proceeds of the
certificates to the payment of the contracts. The governing body of
each governmental unit may sell, lease, convey, and reacquire
either real or personal property, or any interest in real or personal
property, upon any terms and conditions and in any manner, as the
governing body shall determine, if the governmental unit will
lease, acquire by purchase agreement, or otherwise reacquire the
property, as authorized by this subsection or any other applicable
law.
All indebtedness incurred under this subsection, when
aggregated with the existing indebtedness of the governmental
unit, may not exceed the debt limits provided by applicable law.
N. The City Council find that it is desirable and in the best interests of the City to avail
of the provisions of the Installment Purchase Provisions of the Debt Reform Act, as quoted, as
follows:
1. To authorize an Installment Purchase Agreement (the "Agreement") more
particularly as described and provided below in the text of this Ordinance;
2. To name as counter-party to the Agreement the City Treasurer (the "City
Treasurer "), as nominee-seller;
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3. To authorize the Mayor of the City (the "Mayor ") and the City Clerk of the
City (the "City Clerk") to execute and attest, respectively, the Agreement on behalf of
the City and to authorize the Mayor, City Clerk and City Treasurer to file same with the
City Clerk in his or her capacity as keeper of the records and files of the City; and
4. To issue certificates evidencing the indebtedness incurred under the
Agreement in the amount of $1,200,000, in form and having such details as set forth
below in the text of this Ordinance.
Now THEREFORE Be It Ordained by the City Council of the City of Canton, Fulton
County, Illinois, as follows:
Section 1. Definitions. Words and terms used in this Ordinance shall have the
meanings given them unless the context or use clearly indicates another or different meaning is
intended. Words and terms defined in the singular may be used in the plural and vice-versa.
Reference to any gender shall be deemed to include the other and also inanimate persons such as
corporations, where applicable.
A. The following words and terms are as defined in the preambles hereto.
Applicable Law
City
City Clerk
City Council
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City Treasurer
Debt Reform Act
Installment Purchase Provisions of the Debt Reform Act
Municipal Code
Mayor
Plant
Proposed Redevelopment Project Area
Redevelopment Plan
Redevelopment Project
Service Agreement
2004 Service Agreement
Related Expenses
State
TIF Act
B. The following words and terms are defined as set forth.
"Agreement" means the Installment Purchase Agreement, as referred to in the
preambles of this Ordinance, for the purpose of purchasing and financing the 2004
Service Agreement and Related Expenses.
"Book Entry Form" means the form of the Certificates as fully registered and
available in physical form only to the Depository.
"Certificate Fund" means the fund established and defined in this Ordinance.
"Certificate Moneys" means moneys on deposit in the Certificate Fund.
"Certificate Register" means the books of the City kept by the Certificate
Registrar to evidence the registration and transfer of the Certificates.
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City Treasurer
Debt Reform Act
Installment Purchase Provisions of the Debt Reform Act
Municipal Code
Mayor
Plant
Proposed Redevelopment Project Area
Redevelopment Plan
Redevelopment Project
Service Agreement
2004 Service Agreement
Related Expenses
State
TIF Act
B. The following words and terms are defined as set forth.
"Agreement" means the Installment Purchase Agreement, as referred to in the
preambles of this Ordinance, for the purpose of purchasing and financing the 2004
Service Agreement and Related Expenses.
"Book Entry Form" means the form of the Certificates as fully registered and
available in physical form only to the Depository.
"Certificate Fund" means the fund established and defined in this Ordinance.
"Certificate Moneys" means moneys on deposit in the Certificate Fund.
"Certificate Register" means the books of the City kept by the Certificate
Registrar to evidence the registration and transfer of the Certificates.
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"Certificate Registrar" means MidAmerica National Bank, Canton, Illinois, in its
respective capacities as certificate registrar and paying agent hereunder, or a successor
thereto or a successor designated as Certificate Registrar hereunder.
"Certificates" means the $1,200,000 General Obligation Limited Tax Debt
Certificates, Series 2004, authorized to be issued by this Ordinance.
"Code" means the Internal Revenue Code of 1986, as amended.
"Depository" means The Depository Trust Company, a New York limited trust
company, its successors, or a successor depository qualified to clear securities under
applicable state and federal laws.
"Designated Officers" means the Mayor, the City Clerk, City Treasurer and the
City Manager, or successors or assigns, or any two of them acting together.
"Ordinance" means this Ordinance, numbered as set forth on the title page
hereof, and passed by the City Council on the 15thday of June, 2004.
"2004 Service Agreement Fund" means the 2004 Service Agreement Fund
established and defined in this Ordinance.
"Purchase Price" means the price paid by the Purchaser for the Certificates,
to-wit: $1,200,000.00.
"Purchaser" means the purchaser of the Certificates, namely, MidAmerica
National Bank, Canton, Illinois.
"Record Date" means the 1st day of the month in which any regular or other
interest payment date occurs on the fifteenth day of that month and the 15th day
preceding any interest payment date occasioned by a redemption of Certificates on other
than a regularly scheduled interest payment date.
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"Tax-exempt" means, with respect to the Certificates, the status of interest paid
and received thereon as not includible in the gross income of the owners thereof under
the Code for federal income tax purposes except to the extent that such interest is taken
into account in computing an adjustment used in determining the alternative minimum
tax for certain corporations and in computing the "branch profits tax" imposed on certain
foreign corporations.
C. Definitions also appear in the preambles hereto or in specific sections, as appear
below. The headings in this Ordinance are for the convenience of the reader and are not a part of
this Ordinance.
Section 2. Incorporation of Preambles. The City Council hereby find that the recitals
contained in the preambles to this Ordinance are true, correct, and complete and does incorporate
them into this Ordinance by this reference.
Section 3. Determination to Authorize and Enter into Agreement and to Issue
Certificates. It is necessary and advisable for the public health, safety, welfare, and convenience
of residents of the City to pay the costs of acquisition of the 2004 Service Agreement, including
all Related Expenses, and to borrow money and, in evidence thereof and for the purpose of
financing same, enter into the Agreement and, further, to provide for the issuance and delivery of
the Certificates evidencing the indebtedness incurred under the Agreement.
Section 4. Agreement is a General Obligation; Annual Appropriation. The City
hereby represents, warrants, and agrees that the obligation to make the payments due under the
Agreement shall be a lawful direct general obligation of the City payable from the corporate
funds of the City and such other sources of payment as are otherwise lawfully available. The
City represents and warrants that the total amount due the Seller under the Agreement, together
with all other indebtedness of the City, is within all statutory and constitutional debt limitations.
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The City agrees to appropriate funds of the City annually and in a timely manner so as to provide
for the making of all payments when due under the terms of the Agreement.
Section 5. Execution and Filing of the Agreement. From and after the effective date of
this Ordinance, the Mayor and City Clerk be and they are hereby authorized and directed to
execute and attest, respectively, the Agreement, in substantially the form thereof set forth below
in the text of this Ordinance, and to do all things necessary and essential to effectuate the
provisions of the Agreement, including the execution of any documents and certificates
incidental thereto or necessary to carry out the provisions thereof. Further, as nominee-seller, the
Treasurer is hereby authorized and directed to execute the Agreement. Upon full execution, the
original of the Agreement shall be filed with the City Clerk and retained in the City records and
constitute authority for issuance of the Certificates. Subject to such discretion of the officers
signatory to the document as described in the foregoing text, the Installment Purchase Agreement
shall be in substantially the form as follows:
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INSTALLMENT PURCHASE AGREEMENT for purchase of real or
personal property, or both, for the purpose of undertaking a
redevelopment project, in and for the City of Canton, Fulton
County, Illinois.
THIS INSTALLMENT PURCHASE AGREEMENT (this "Agreement") made as of thel5tn day of
June, 2004 by and between the City Treasurer, as Nominee-Seller (the "Seller"), and the City of
Canton, Fulton County, Illinois, a municipality of the State of Illinois (the "City "):
WITNESSETH
A. The City Council (the "City Council ") of the City has determined to enter into an
agreement for demolition services, constituting personal property, in order to undertake a
redevelopment project (collectively, the "2004 Service Agreement"), all as previously approved
by the City Council and on file with the City Clerk of the City (the "City Clerk").
B. Pursuant to the provisions of the Illinois Municipal Code (the "Municipal Code")•
the Local Government Debt Reform Act of the State of Illinois (the "Debt Reform Act"), and, in
particular, the provisions of Section 17 of the Debt Reform Act (the "Installment Purchase
Provisions of the Debt Reform Act"); and all other Omnibus Bond Acts of the State of Illinois; in
each case, as supplemented and amended (collectively "Applicable Law "); the City has the
power to purchase real or personal property through agreements that provide that the
consideration for the purchase may be paid through installments made at stated intervals for a
period of no more than 20 years and has the power to issue certificates evidencing indebtedness
incurred under such agreements.
C. On thel5th day of June, 2004, the City Council, pursuant to Applicable Law and
the need to provide for the 2004 Service Agreement, adopted an ordinance (the "Ordinance ")
authorizing the borrowing of money for the 2004 Service Agreement, the execution and delivery
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of this Agreement to finance same, and the issuance of certificates evidencing the indebtedness
so incurred.
D. The Ordinance is
(a) incorporated herein by reference; and
(b) made a part hereof as if set out at this place in full;
and each of the terms as defined in the Ordinance is also incorporated by reference for use in this
Agreement.
E. The Seller, as nominee as expressly permitted by the Installment Purchase
Provisions of the Debt Reform Act, has agreed to make and acquire the 2004 Service Agreement
on the terms as hereinafter provided.
Now TxEREFORE in consideration of the mutual covenants and agreements hereinafter
contained and other valuable consideration, it is mutually agreed between the Seller and the City
as follows:
1. MAKE, ACQUIRE AND CONSTRUCT 2004 SERVICE AGREEMENT
The Seller agrees to make and acquire the 2004 Service Agreement to provide for
services upon real estate owned or to be owned by or upon which valid easements or licenses
have been obtained in favor of the City.
2. CONVEYANCE
The Seller agrees to perform each part of the 2004 Service Agreement to the City and to
perform all necessary work as set out therein and the City agrees to purchase the 2004 Service
Agreement from the Seller and pay for the 2004 Service Agreement the purchase price thereof;
plus the amount of investment earnings which are earned on the amount deposited with the
Treasurer from the sale of the Certificates provided that in no event shall the total aggregate
principal purchase price to be paid pursuant to this Agreement exceed the sum of $1,200,000,
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plus the amount of investment earnings which are earned on the amount deposited with the
Treasurer from the sale of the Certificates.
3. PAYMENTS
The payment of the entire sum of said purchase price [net, however, of any such
investment earnings] shall:
(a) be payable in installments due on the dates and in the amounts;
(b) bear interest at the rates percent per annum which interest shall also be
payable on the dates and in the amounts;
(c) be payable at the place or places of payment, in the medium of payment, and
upon such other term;
all as provided for payment of the Certificates in the Ordinance.
4. ASSIGNMENT
Rights to payment of the Seller as provided in this Agreement are assigned as a matter of
law, under the Installment Purchase Provisions of the Debt Reform Act, to the owners of the
Certificates. This Agreement and any right, title, or interest herein, shall not be further
assignable. The Certificates, evidencing the indebtedness incurred hereby, are assignable
(registrable) as provided in the Ordinance.
$. TAX COVENANTS
The covenants relating to the Tax-exempt status of the Certificates, as set forth in the
Ordinance, insofar as may be applicable, apply to the work to be performed and the payments
made under this Agreement.
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E). TITLE
(a) Vesting of Title. Title in and to any part of the 2004 Service Agreement, upon
delivery or as made, during all stages of the making or acquisition thereof, shall and does vest
immediately in the City.
(b) Voiding of Service Agreeement. If, during the term of this Agreement, all or any
part of the 2004 Service Agreement shall be voided for any reason; then the City shall continue
to make payments as promised herein and in the Certificates and to take such action as it shall
deem necessary or appropriate to ratify the 2004 Service Agreement.
7. LAMFUL CORPORATE OBLIGATION
The City hereby represents, warrants, and agrees that the obligation to make the
payments due hereunder shall be a lawful direct general obligation of the City payable from the
corporate funds of the City and such other sources of payment as are otherwise lawfully
available. The City represents and warrants that the total amount due the Seller hereunder,
together with all other indebtedness of the City, is within all statutory and constitutional debt
limitations. The City agrees to appropriate funds of the City annually and in a timely manner so
as to provide for the making of all payments when due under the terms of this Agreement.
S. GENERAL COVENANT AND RECITAL
It is hereby certified and recited by the Seller and the City, respectively, that as to each,
respectively, for itself, all conditions, acts, and things required by law to exist or to be done
precedent to and in the execution of this Agreement did exist, have happened, been done and
performed in regular and due form and time as required by law.
9. NO SEPARATE TAX
THE SELLER AND THE CITY RECOGNIZE THAT THERE IS NO STATUTORY AUTHORITY FOR
THE LEVY OF A SEPARATE TAX IN ADDITION TO OTHER TAXES OF THE CITY OR THE LEVY OF A
SPECIAL TAX UNLIMITED AS TO RATE OR AMOUNT TO PAY ANY OF THE AMOUNTS DUE HEREUNDER.
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I ~. DEFAULT
In the event of a default in payment hereunder by the City, the Seller or any
Certificateholder may pursue any available remedy by suit at law or equity to enforce the
payment of all amounts due or to become due under this Agreement, including, without
limitation, an action for specific performance.
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IN WITNESS WHEREOF the Seller has caused this Installment Purchase Agreement to be
executed and attested, and his or her signature to be attested by the City Clerk of the City, and
the City has caused this Installment Purchase Agreement to be executed by its Mayor, and also
attested by its City Clerk, and the official seal of the City to be hereunto affixed, all as of the day
and year first above written. C
SELLER: Signature:
[Here type name]: Patty Beaird Franzoni
as Nominee-Seller and the
City Treasurer
ATTEST:
r -
City Jerk
[SEAL]
ATTEST:
C Clerk
[SEAL]
CITY OF CANTON, )"~JLTON COUNTY, ILLINOIS
Mayor
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STATE OF ILLINOIS )
) SS
COUNTY OF FULTON )
CERTIFICATE OF INSTALLMENT PURCHASE AGREEMENT FILING
I, the undersigned, do hereby certify that I am the duly qualified and acting City Clerk of
the City of Canton, Fulton County, Illinois (the "City"), and as such officer I do hereby certify
that on thel5th day of June, 2004 there was filed in my office a properly certified copy of that
certain document, executed by the Mayor of the City, attested by me in my capacity as City
Clerk, and further executed, as Nominee-Seller, by the City Treasurer, also attested by me, dated
the 15th day of June, 2004, and entitled "INSTALLMENT PURCHASE AGREEMENT for Purchase of
real or personal property, or both, for the purpose of undertaking a redevelopment agreement, in
and for the City of Canton, Fulton County, Illinois"; and supporting the issuance of certain
General Obligation Limited Tax Debt Certificates, Series 2004, of the City; that attached hereto
is a true and complete copy of said Agreement as so filed; and that the same has been deposited
in the official files and records of my office.
IN WITNESS WHEREOF I have hereunto affixed my official signature and the seal of the
City of Canton, Fulton County, Illinois at Canton, Illinois, this 15th day of June, 2004.
~~nn ~-
~/ i
City Clerk j
[SEAL]
Section 6. Certificate Details. For the purpose of providing for making and
acquisition of the 2004 Service Agreement and Related Expenses, there shall be issued and sold
the Certificates in the principal amount of $1,200,000. The Certificates shall each be designated
"General Obligation Limited Tax Debt Certificate, Series 2004"; be dated June 15, 2004 (the
"Dated Date "); and shall also bear the date of authentication thereof. The Certificates shall be
in fully registered form, shall be in denominations of $5,000 or integral multiples thereof (but no
single Certificate shall represent principal maturing on more than one date), and shall be
numbered consecutively in such fashion as shall be determined by the Certificate Registrar. The
Certificates shall become due (subject to right of redemption prior to maturity as hereinafter
provided) on December 15 of the years and in the amounts and bearing interest at the rates
percent per annum as follows:
DATE AMOUNT ($~ RATE (%)
2009 1,200,000 3.04
Each Certificate shall bear interest from the later of its Dated Date or from the most
recent interest payment date to which interest has been paid or duly provided for, until the
principal amount of such Certificate is paid or duly provided for, such interest (computed upon
the basis of a 360-day year of twelve 30-day months) being payable semi-annually on June 15
and December 15 of each year, commencing on December 15, 2004. Interest on each Certificate
shall be paid by check or draft of the Certificate Registrar, payable upon presentation thereof in
lawful money of the United States of America, to the person in whose name such Certificate is
registered at the close of business on the applicable Record Date, and mailed to the registered
owner of the Certificate at the address as shown in the Certificate Registrar or at such other
address furnished in writing by such registered owner or as otherwise agreed by the City and the
Certificate Registrar and a qualified securities clearing corporation as depository, or nominee, for
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so long as this Certificate shall be in Book Entry Form as provided for same. The principal of
the Certificates shall be payable in lawful money of the United States of America upon
presentation thereof at the office maintained for such purpose of the Certificate Registrar as
currently maintained, as may be relocated from time to time, or at successor Certificate Registrar
and locality.
Section 7. Book Entry Provisions. If so specified by the Purchaser, the Certificates
shall be initially issued in the form of a separate single fully registered Certificate for each of the
maturities of the Certificates, and the following provisions shall apply. Upon initial issuance, the
ownership of each such Certificate shall be registered in the Certificate Register in the name of
the Depository or a designee or nominee of the Depository (such depository or nominee being
the "Book Entry Owner"). Except as otherwise expressly provided, all of the outstanding
Certificates from time to time shall be registered in the Certificate Register in the name of the
Book Entry Owner (and accordingly in Book Entry Form as such term is used in this Ordinance).
Any City officer, as representative of the City, is hereby authorized, empowered, and directed to
execute and deliver or to utilize a previously executed and delivered Letter of Representations or
Blanket Letter of Representations (either being the "Letter of Representations") substantially in
the form common in the industry, or with such changes therein as any officer executing the
Letter of Representations on behalf of the City shall approve, his or her execution thereof to
constitute conclusive evidence of approval of such changes, as shall be necessary to effectuate
Book Entry Form. Without limiting the generality of the authority given with respect to entering
into such Letter of Representations, it may contain provisions relating to (a) payment procedures,
(b) transfers of the Certificates or of beneficial interests therein, (c) redemption notices and
procedures unique to the Depository, (d) additional notices or communications, and
(e) amendment from time to time to conform with changing customs and practices with respect
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to securities industry transfer and payment practices. With respect to Certificates registered in
the Certificate Register in the name of the Book Entry Owner, none of the City, any of its
financial officers, or the Certificate Registrar shall have any responsibility or obligation to any
broker-dealer, bank, or other financial institution for which the Depository holds Certificates
from time to time as securities depository (each such broker~.iealer, bank, or other financial
institution being referred to herein as a "Depository Participant") or to any person on behalf of
whom such a Depository Participant holds an interest in the Certificates. Without limiting the
meaning of the immediately preceding sentence, the City, any of its financial officers, and the
Certificate Registrar shall have no responsibility or obligation with respect to (a) the accuracy of
the records of the Depository, the Book Entry Owner, or any Depository Participant with respect
to any ownership interest in the Certificates, (b) the delivery to any Depository Participant or any
other person, other than a registered owner of a Certificate as shown in the Certificate Register or
as otherwise expressly provided in the Letter of Representations, of any notice with respect to the
Certificates, including any notice of redemption, or (c) the payment to any Depository
Participant or any other person, other than a registered owner of a Certificate as shown in the
Certificate Register, of any amount with respect to principal of or interest on the Certificates. No
person other than a registered owner of a Certificate as shown in the Certificate Register shall
receive a certificate with respect to any Certificate. In the event that (a) the City determines that
the Depository is incapable of discharging its responsibilities described herein and in the Letter
of Representations, (b) the agreement among the City, the Certificate Registrar, and the
Depository evidenced by the Letter of Representations shall be terminated for any reason, or
(c) the City determines that it is in the best interests of the City or of the beneficial owners of the
Certificates either that they be able to obtain certificated Certificates or that another depository is
preferable, the City shall notify the Depository, and the Depository shall notify the Depository
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Participants, of the availability of physical Certificates; and the Certificates shall no longer be
restricted to being registered in the Certificate Register in the name of the Book Entry Owner.
Alternatively, at such time, the City may determine that the Certificates shall be registered in the
name of and deposited with a successor depository operating a system accommodating Book
Entry Form, as may be acceptable to the City, or such depository's agent or designee, but if the
City does not select such alternate book entry system, then the Certificates shall be registered in
whatever name or names registered owners of Certificates transferring or exchanging Certificates
shall designate, in accordance with the provisions of this Ordinance.
Section 8. Execution; Authentication. The Certificates shall be executed on behalf of
the City by the manual or duly authorized facsimile signature of its Mayor and attested by the
manual or duly authorized facsimile signature of its City Clerk, as they may determine, and shall
have impressed or imprinted thereon the corporate seal or facsimile thereof of the City. In case
any such officer whose signature shall appear on any Certificate shall cease to be such officer
before the delivery of such Certificate, such signature shall nevertheless be valid and sufficient
for all purposes, the same as if such officer had remained in office until delivery. All Certificates
shall have thereon a certificate of authentication, substantially in the form hereinafter set forth,
duly executed by the Certificate Registrar as authenticating agent of the City and showing the
date of authentication. No Certificate shall be valid or obligatory for any purpose or be entitled
to any security or benefit under this Ordinance unless and until such certificate of authentication
shall have been duly executed by the Certificate Registrar by manual signature, and such
certificate of authentication upon any such Certificate shall be conclusive evidence that such
Certificate has been authenticated and delivered under this Ordinance. The certificate of
authentication on any Certificate shall be deemed to have been executed by it if signed by an
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authorized officer of the Certificate Registrar, but it shall not be necessary that the same officer
sign the certificate of authentication on all of the Certificates issued hereunder.
Section 9. Registration of Certificates; Persons Treated as Owners. The City shall
cause the Certificate Register to be kept at the office maintained for such purpose by the
Certificate Registrar, which is hereby constituted and appointed the registrar of the City for the
Certificates. The City is authorized to prepare, and the Certificate Registrar or such other agent
as the City may designate shall keep custody of, multiple Certificate blanks executed by the City
for use in the transfer and exchange of Certificates. Any Certificate may be transferred or
exchanged, but only in the manner, subject to the limitations, and upon payment of the charges
as set forth in this Ordinance. Upon surrender for transfer or exchange of any Certificate at the
office of the Certificate Registrar maintained for the purpose, duly endorsed by or accompanied
by a written instrument or instruments of transfer or exchange in form satisfactory to the
Certificate Registrar and duly executed by the registered owner or an attorney for such owner
duly authorized in writing, the City shall execute and the Certificate Registrar shall authenticate,
date, and deliver in the name of the transferee or transferees or, in the case of an exchange, the
registered owner, a new fully registered Certificate or Certificates of like tenor, of the same
maturity, bearing the same interest rate, of authorized denominations, for a like aggregate
principal amount and bearing the same provisions for redemption. The Certificate Registrar shall
not be required to transfer or exchange any Certificate during the period from the close of
business on the Record Date for an interest payment to the opening of business on such interest
payment date or during the period of 15 days preceding the giving of notice of redemption of
Certificates or to transfer or exchange any Certificate all or a portion of which has been called
for redemption. The execution by the City of any fully registered Certificate shall constitute full
and due authorization of such Certificate; and the Certificate Registrar shall thereby be
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authorized to authenticate, date, and deliver such Certificate; provided, however, the principal
amount of Certificates of each maturity authenticated by the Certificate Registrar shall not at any
one time exceed the authorized principal amount of Certificates for such maturity less the
amount of such Certificates which have been paid. The person in whose name any Certificate
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 Certificate shall be made only to or upon the
order of the registered owner thereof or his legal representative. All such payments shall be
valid and effectual to satisfy and discharge the liability upon such Certificate to the extent of the
sum or sums so paid. No service charge shall be made to any registered owner of Certificates for
any transfer or exchange of Certificates, but the City or the Certificate 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 Certificates, but the City or the Certificate
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 Certificates, except in the
case of the issuance of a Certificate or Certificates for the unredeemed portion of a Certificate
surrendered for redemption.
Section 10. Redemption. The Certificates are subject to redemption prior to maturity at
the option of the City, from any available moneys, on any date, in whole or in part, and if in part
in such principal amounts and from such maturities as the City shall determine and within any
maturity by lot, at a redemption price of par plus accrued interest to the date fixed for
redemption.
Section 11. Redemption Procedure. The Certificates shall be redeemed only in the
maturity amount of $5,000 and integral multiples thereof. The City shall, at least forty-five (45)
days prior to the redemption date (unless a shorter time period shall be satisfactory to the
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Certificate Registrar) notify the Certificate Registrar of such redemption date and of the maturity
amount and maturity or maturities of Certificates to be redeemed. For purposes of any
redemption of less than all of the outstanding Certificates of a single maturity, the particular
Certificates or portions of Certificates to be redeemed shall be selected by lot not more than sixty
(60) days prior to the redemption date by the Certificate Registrar, by such method of lottery as
the Certificate Registrar shall deem fair and appropriate; provided that such lottery shall provide
for the selection for redemption of Certificates or portions of Certificates in Maturity Amounts of
$5,000 and integral multiples thereof.
The Certificate Registrar shall promptly notify the City in writing of the Certificates or
portions of Certificates selected for redemption and, in the case of any Certificate selected for
partial redemption, the Maturity Amount thereof to be redeemed.
Section I1. Redemption Procedure. Unless waived by any holder of Certificates to be
redeemed, notice of the call for any such redemption shall be given by the Certificate Registrar
on behalf of the City by mailing the redemption notice by first class mail at least thirty (30) days
and not more than sixty (60) days prior to the date fixed for redemption to the registered owner
of the Certificate or Certificates to be redeemed at the address shown on the Certificate Register
or at such other address as is furnished in writing by such registered owner to the Certificate
Registrar.
All notices of redemption shall state:
(1) the redemption date,
(2) the redemption price,
(3) if less than all outstanding Certificates are to be redeemed, the
identification (and, in the case of partial redemption, the respective Maturity Amounts) of
the Certificates to be redeemed,
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(4) that on the redemption date the redemption price will become due and
payable upon each such Certificate or portion thereof called for redemption, and that
interest thereon shall cease to accrue from and after said date,
(5) the place where such Certificates are to be surrendered for payment of the
redemption price, which place of payment shall be the principal corporate trust office of
the Certificate Registrar maintained for such purpose, and
(6) such other information then required by custom, practice or industry
standard.
Prior to any redemption date, the City shall deposit with the Certificate Registrar an
amount of money sufficient to pay the redemption price of all the Certificates or portions of
Certificates which are to be redeemed on that date.
Notice of redemption having been given as aforesaid, the Certificates or portions of
Certificates so to be redeemed shall, on the redemption date, become due and payable at the
redemption price therein specified, and from and after such date (unless the City shall default in
the payment of the redemption price) such Certificates or portions of Certificates shall cease to
bear interest. Upon surrender of such Certificates for redemption in accordance with said notice,
such Certificates shall be paid by the Certificate Registrar at the redemption price. Installments
of interest due on or prior to the redemption date shall be payable as herein provided for payment
of interest. Upon surrender for any partial redemption of any Certificate, there shall be prepared
for the registered holder a new Certificate or Certificates of the same Maturity Amount.
If any Certificate or portion of Certificate called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid, bear interest from the redemption
date at the rate borne by such Certificate or portion of Certificate so called for redemption. All
Certificates which have been redeemed shall be cancelled and destroyed by the Certificate
Registrar and shall not be reissued.
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Section 12. Form of Certificate. The Certificates shall be in substantially the form
hereinafter set forth; provided, however, that if the text of the Certificates is to be printed in its
entirety on the front side of the Certificates, then the second paragraph on the front side and the
legend "See Reverse Side for Additional Provisions" shall be omitted and the text of paragraphs
set forth for the reverse side shall be inserted immediately after the first paragraph.
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[FORM OF CERTIFICATE -FRONT SIDE]
REGISTERED REGISTERED
No. $
UNITED STATES OF AMERICA
STATE OF ILLINOIS
COUNTY OF FULTON
GENERAL OBLIGATION LIMITED TAX DEBT CERTIFICATE, SERIES 2004
See Reverse Side for
Additional Provisions.
Interest Maturity
Rate: Date: December 15,
Registered Owner: CEDE & Co.
Principal Amount:
Dated
Date: June 15, 2004 CUSIP:
KNOW ALL PERSONS BY THESE PRESENTS that the City Of Canton, Fulton County, Illinois, a
municipality and political subdivision of the State of Illinois (the "City "), hereby acknowledges
itself to owe and for value received promises to pay (subject to right of prior redemption as
hereinafter provided) from the source and as hereinafter provided to the Registered Owner
identified above, or registered assigns, on the Maturity Date identified above (subject to right of
prior redemption), the Principal Amount identified above and to pay interest (computed on the
basis of a 360-day year of twelve 30-day months) on such Principal Amount from the later of the
Dated Date of this Certificate identified above or from the most recent interest payment date to
which interest has been paid or duly provided for, at the Interest Rate per annum identified
above, such interest to be payable semi-annually on June 15 and December 15 of each year,
commencing December 15, 2004, until said Principal Amount is paid or duly provided for. The
principal of this Certificate is payable in lawful money of the United States of America upon
presentation hereof at the office maintained for such purpose of MidAmerica National Bank,
Canton, Illinois, as paying agent and registrar (the "Certificate Registrar"). Payment of interest
shall be made to the Registered Owner hereof as shown on the registration books of the City
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maintained by the Certificate Registrar at the close of business on the applicable Record Date
(the "Record Date "). The Record Date shall be the 1st day of the month in which any regular or
other interest payment date occurs on the fifteenth day of that month and the 15th day preceding
any interest payment date occasioned by a redemption of Certificates on other than a regularly
scheduled interest payment date. Interest shall be paid by check or draft of the Certificate
Registrar, payable upon presentation in lawful money of the United States of America, mailed to
the address of such Registered Owner as it appears on such registration books or at such other
address furnished in writing by such Registered Owner to the Certificate Registrar, or as
otherwise agreed by the City and the Certificate Registrar and a qualified securities clearing
corporation as depository, or nominee, for so long as this Certificate shall be in Book Entry Form
as provided for same.
Reference is hereby made to the further provisions of this Certificate set forth on the
reverse hereof, and such further provisions shall for all purposes have the same effect as if set
forth at this place.
It is hereby certified and recited that all conditions, acts, and things required by the
Constitution and Laws of the State of Illinois to exist or to be done precedent to and in the
issuance of this Certificate, including Applicable Law as defined herein, have existed and have
been properly done, happened, and been performed in regular and due form and time as required
by law; that the obligation to make payments due hereon are a lawful direct general obligation of
the City payable from the corporate funds of the City and such other sources of payment as are
otherwise lawfully available; that the total amount due under the Agreement, represented by the
Certificates, together with all other indebtedness of the City, is within all statutory and
constitutional debt limitations; and that the City shall appropriate funds annually and in a timely
manner so as to provide for the making of all payments hereon when due. TxE owrrER of Tars
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CERTIFICATE ACKNOWLEDGES THAT THERE IS NO STATUTORY AUTHORITY FOR THE LEVY OF A SEPARATE
TAX IN ADDITION TO OTHER TAXES OF THE CITY OR THE LEVY OF A SPECIAL TAX UNLIMITED AS TO RATE
OR AMOUNT TO PAY ANY OF THE AMOUNTS DUE HEREUNDER.
This Certificate shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been signed by the Certificate Registrar.
IN WITNESS WHEREOF the City of Canton, Fulton County, Illinois, by its City Council, has
caused this Certificate to be executed by the manual or duly authorized facsimile signature of its
Mayor and attested by the manual or duly authorized facsimile signature of its City Clerk and its
corporate seal or a facsimile thereof to be impressed or reproduced hereon, all as appearing
hereon and as of the Dated Date identified above.
ATTEST:
City Clerk,
City of Canton, ulton County, Illinois
[SEAL]
Ma r,
City f Canton, Fulton County, Illinois
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Date of Authentication:
CERTIFICATE OF
AUTHENTICATION
Certificate Registrar and Paying Agent:
This Certificate is one of the Certificates
described in the within-mentioned Ordinance
and is one of the General Obligation Limited
Tax Debt Certificates, Series 2004, having a
Dated Date of June 15, 2004, of the City of
Canton, Fulton County, Illinois.
MidAmerica National Bank,
as Certificate Registrar
By
Authorized Officer
MidAmerica National Bank, Canton,
Illinois
[FORM OF CERTIFICATE -REVERSE SIDE]
This Certificate is one of a series (the "Certificates") in the aggregate principal amount
of $1,200,000 issued by the City for the purpose of providing funds to pay part of the cost of
making and acquiring the 2004 Service Agreement and Related Expenses, all as described and
defined in the ordinance authorizing the Certificates (the "Ordinance "), pursuant to and in all
respects in compliance with the applicable provisions of the City Code of the State of Illinois, as
supplemented and amended, and in particular as supplemented by the Local Government Debt
Reform Act of the State of Illinois, as amended, and the other Omnibus Bond Acts of the State of
Illinois ("Applicable Law "), and with the Ordinance, which has been duly passed by the City
Council of the City on the 15tH day of June, 2004, in all respects as by law required. The
Certificates issued by the City in connection with the 2004 Service Agreement have been issued
in evidence of the indebtedness incurred pursuant to a certain Installment Purchase Agreement
(the "Agreement"), dated as of thel5th day of June, 2004, entered into by and between the City
and its City Treasurer, as Seller-Nominee, to which reference is hereby expressly made for
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further definitions and terms and to all the provisions of which the holder by the acceptance of
this Certificate assents.
The Certificates are subject to redemption prior to maturity at the option of the City, from
any available moneys, on any date, in whole or in part and if in part, in such principal amounts
and from such maturities as the City shall determine and within any maturity by lot, at a
redemption price of par plus accrued interest to the date fixed for redemption, and as otherwise
provided in the Ordinance.
This Certificate is subject to provisions relating to registration, transfer, and exchange
and such other terms and provisions relating to security and payment as are set forth in the
Ordinance; to which reference is hereby expressly made; and to all the terms of which the
registered owner hereof is hereby notified and shall be subject.
The City and the Certificate Registrar may deem and treat the Registered Owner hereof
as the absolute owner hereof for the purpose of receiving payment of or on account of principal
hereof and interest due hereon and for all other purposes, and neither the City nor the Certificate
Registrar shall be affected by any notice to the contrary.
This Certificate is a "qualified tax exempt obligation" under the provisions of Section
265(b)(3) of the Internal Revenue Code of 1986, as amended.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
[Here insert identifying number such as
TID, SSN, or other]
(Name and Address of Assignee)
the within Certificate and does hereby irrevocably constitute and appoint
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as attorney to transfer the said Certificate on the books kept for registration thereof with full
power of substitution in the premises.
Dated:
Signature guaranteed:
NOTICE: The signature to this assignment must correspond with the name of the ,Registered
Owner as it appears upon the face of the within Certificate in every particular, without
alteration or enlargement or any change whatever.
Section 13. Sale of Certificates; Official Statement. The City Treasurer is hereby
expressly authorized to issue and deliver the Certificates to the Purchaser upon receipt of the
Purchase Price without further official action by or approval of the City Council. It is hereby
expressly determined that the contract for the sale of the Certificates (the "Purchase Contract")
is in all respects ratified, approved and confirmed, it being hereby found and determined that the
Certificates are being sold at such price and bearing interest at such rates that neither the true
interest cost (yield) nor the net interest rate received upon such sale shall exceed the maximum
rate otherwise authorized by Illinois law, that the Purchase Contract is in the best interests of the
City and that no person holding any office of the City, either by election or appointment, is in
any manner financially interested directly in his or her own name or indirectly in the name of any
other person, association, trust or corporation, in the Purchase Contract.
The use by the Purchaser of any Preliminary Official Statement and any final Official
Statement relating to the Certificates and before the City Council at the time of the adoption
hereof is hereby ratified, approved and authorized; the execution and delivery of said final
Official Statement is hereby authorized; and the officers of the City Council are hereby
authorized to take any action as may be required on the part of the City to consummate the
transactions contemplated by the Purchase Contract, this Ordinance, said Preliminary Official
Statement, said final Official Statement and the Certificates.
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Section 14. Creation of Funds and Appropriations. A. There is hereby created the
"General Obligation Limited Tax Debt Certificates, Series 2004, Certificate Fund" (the
"Certificate Fund "), which shall be the fund for the payment of the principal of and interest on
the Certificates. Accrued interest and premium, if any, received upon delivery of the Certificates
shall be deposited into the Certificate Fund and be applied to pay the first interest coming due on
the Certificates. Funds lawfully available for the purpose shall be deposited into the Certificate
Fund and used solely and only for the purpose of paying the principal of and interest on the
Certificates. Interest income or investment profit earned in the Certificate Fund shall be retained
in the Certificate Fund for payment of the principal of or interest on the Certificates on the
interest payment date next after such interest or profit is received or, to the extent lawful and as
determined by the City Council, transferred to such other fund as may be determined. Moneys in
the Certificate Fund shall be applied to pay interest when due and principal when due at
maturity.
B. The amount necessary from the proceeds of the Certificates shall be used either to
pay expenses directly at the time of issuance of the Certificates or be deposited into a separate
fund, hereby created, designated the "Expense Fund," to be used to pay expenses of issuance of
the Certificates. Disbursements from such fund shall be made from time to time as necessary.
Moneys not disbursed from the Expense Fund within six (6) months shall be transferred by the
appropriate financial officers for deposit into the 2004 Service Agreement Fund, -and any
deficiencies in the Expense Fund shall be paid by disbursement from the 2004 Service
Agreement Fund.
C. The remaining proceeds of the Certificates shall be deposited into the 2004 Service
Agreement Fund (the "2004 Service Agreement Fund") hereby created. Moneys in the 2004
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Service Agreement Fund shall be used to pay costs of the 2004 Service Agreement in accordance
with the following procedures:
1. Contracts ("Work Contracts") have been or shall be awarded, from time to
time, by the City Council for the work on the 2004 Service Agreement; and the City
Council represents and covenants that each Work Contract has been or will be let in strict
accordance with Applicable Law and the rules and procedures of the City for same.
2. Pursuant to ordinance or resolution to be duly adopted, the City Council
shall identify all or a designated portion of each Work Contract to the Agreement. This
Ordinance and any such further ordinance or resolution shall be filed of record with the
City Clerk and the City Treasurer. The adoption and filing of any such ordinance or
resolution and the Work Contracts with such officers shall constitute authority for the
officer or officers of the City to make disbursements from the 2004 Service Agreement
Fund to pay amounts due under such Work Contracts from time to time, upon such
further resolutions, orders, vouchers, warrants, or other proceedings as are required under
Applicable Law and the rules and procedures of the City for same. No action need be
taken by or with respect to the contractors under the Work Contracts as, pursuant to the
Installment Purchase Provisions of the Debt Reform Act, the City Treasurer acts as
Nominee-Seller of the 2004 Service Agreement for all purposes, enabling the issuance of
the Certificates. Funds on deposit in the 2004 Service Agreement Fund shall be invested
by the appropriate officers of the City in any lawful manner. Investment earnings shall
first be reserved and transferred to such other account as and to the extent necessary to
pay any "excess arbitrage profits" or "penalty in lieu of rebate" under Code Section 148
to maintain the Tax-exempt status of the Certificates, and the remainder shall be retained
in the fund for costs of the 2004 Service Agreement. Within sixty (60) days after full
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depletion of the 2004 Service Agreement Fund, the appropriate offices of the City shall
certify to the City Council the fact of such depletion; and, upon approval of such
certification by the City Council, the 2004 Service Agreement Fund shall be closed.
D. Alternatively to the creation of the funds described above, the appropriate officers
may allocate the Certificate Moneys or proceeds of the Certificates to one or more related funds
of the City already in existence and in accordance with good accounting practice; provided,
however, that this shall not relieve such officers of the duty to account and invest the Certificate
Moneys and the proceeds of the Certificates, as herein provided, as if such funds had in fact been
created.
Section 1 S. Non-Arbitrage and Tax-Exemption. One purpose of this Section is to set
forth various facts regarding the Certificates and to establish the expectations of the City Council
and the City as to future events regarding the Certificates and the use of Certificate proceeds.
The certifications, covenants and representations contained herein and at the time of the Closing
are made on behalf of the City for the benefit of the owners from time to time of the Certificates.
In addition to providing the certifications, covenants and representations contained herein, the
City hereby covenants that it will not take any action, omit to take any action or permit the taking
or omission of any action within its control (including, without limitation, making or permitting
any use of the proceeds of the Certificates) if taking, permitting or omitting to take such action
would cause any of the Certificates to be an arbitrage bond or a private activity bond within the
meaning of the Code or would otherwise cause the interest on the Certificates to be included in
the gross income of the recipients thereof for federal income tax purposes. The City
acknowledges that, in the event of an examination by the Internal Revenue Service of the
exemption from Federal income taxation for interest paid on the Certificates, under present rules,
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the City is treated as the "taxpayer" in such examination. The City Council and the City certify,
covenant and represent as follows:
1.1. Definitions. In addition to such other words and terms used and defined in
this Installment Contract, the following words and terms used in this Section shall have
the following meanings unless, in either case, the context or use clearly indicates another
or different meaning is intended:
"Bond Counsel" means Chapman and Cutler LLP or any other nationally
recognized firm of attorneys experienced in the field of municipal bonds whose opinions
are generally accepted by purchasers of municipal securities.
"Capital Expenditures" means costs of a type that would be properly chargeable
to a capital account under the Code (or would be so chargeable with a proper election)
under federal income tax principles if the City were treated as a corporation subject to
federal income taxation, taking into account the definition of Placed-in-Service set forth
herein.
"Closing" means the first date on which the City is receiving the purchase price
for the Certificates.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commingled Fund" means any fund or account containing both Gross Proceeds
and an amount in excess of $25,000 that are not Gross Proceeds if the amounts in the
fund or account are invested and accounted for, collectively, without regard to the source
of funds deposited in the fund or account. An open-ended regulated investment company
under Section 851 of the Code is not a commingled fund.
"Control" means the possession, directly or indirectly through others, of either of
the following discretionary and non-ministerial rights or powers over another entity:
(a) to approve and to remove without cause a controlling portion of the
governing body of a Controlled Entity; or
(b) to require the use of funds or assets of a Controlled Entity for any
purpose.
"Controlled Entity" means any entity or one of a group of entities that is subject
to Control by a Controlling Entity or group of Controlling Entities.
"Controlling Entity" means any entity or one of a group of entities directly or
indirectly having Control of any entities or group of entities.
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"Controlled Group" means a group of entities directly or indirectly subject to
Control by the same entity or group of entities, including the entity that has the Control of
the other entities.
"Costs of Issuance" means the costs of issuing the Certificates, including
underwriters' discount and legal fees.
"De minimis Amount of Original Issue Discount or Premium" means (a) any
original issue discount or premium that does not exceed two percent of the stated
redemption price at maturity of the Certificates plus (b) any original issue premium that is
attributable exclusively to reasonable underwriter's compensation.
"External Commingled Fund" means a Commingled Fund in which the City and
all members of the same Controlled Group as the City own, in the aggregate, not more
than ten percent of the beneficial interests.
"GIC" means (a) any investment that has specifically negotiated withdrawal or
reinvestment provisions and a specifically negotiated interest rate and (b) any agreement
to supply investments on two or more future dates (e.g., a forward supply contract).
"Gross Proceeds" means amounts in the Certificate Fund and the 2004 Service
Agreement Fund.
"Placed-in-Service" means the date on which, based on all facts and
circumstances (a) a facility has reached a degree of completion that would permit its
operation at substantially its design level and (b) the facility is, in fact, in operation at
such level.
"Qualified Administrative Costs of Investments" means (a) reasonable, direct
administrative costs (other than carrying costs) such as separately stated brokerage or
selling commissions (other than a broker's commission paid on behalf of either the City
or the provider of a GIC to the extent such commission exceeds the present value of
annual payments equal to 0.05 percent of the weighted average amount reasonably
expected to be invested each year of the term of the GIC; for this purpose, present value
is computed using the taxable discount rate used to compute the commission or, if not
readily ascertainable, a reasonable taxable discount rate), but not legal and accounting
fees, recordkeeping, custody and similar costs; (b) all administrative costs, direct or
indirect, incurred by a publicly offered regulated investment company or an External
Commingled Fund; or (c) in the case of purpose investments, costs or expenses paid
directly to purchase, carry, sell or retire the investment and costs of issuing, carrying, or
repaying the Certificates, and any placement agent fee or underwriter's discount.
"Qualified Tax Exempt Obligations" means (a) any obligation described in
Section 103(x) of the Code, the interest on which is excludable from gross income of the
owner thereof for federal income tax purposes and is not an item of tax preference for
purposes of the alternative minimum tax imposed by Section 55 of the Code; (b) an
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interest in a regulated investment company to the extent that at least ninety-five percent
of the income to the holder of the interest is interest which is excludable from gross
income under Section 103 of the Code of any owner thereof for federal income tax
purposes and is not an item of tax preference for purposes of the alternative minimum tax
imposed by Section 55 of the Code; and (c) certificates of indebtedness issued by the
United States Treasury pursuant to the Demand Deposit State and Local Government
Series program described in 31 C.F.R. part 344.
"Rebate Fund" means the fund, if any, identified and defined in paragraph 4.1
herein.
"Rebate Provisions" means the rebate requirements contained in Section 148(f)
of the Code and in the Regulations.
"Regulations" means United States Treasury Regulations dealing with the tax-
exempt Certificate provisions of the Code.
"Reimbursed Expenditures" means amounts, if any, used from Sale Proceeds or
investment earnings thereon to reimburse the City for an expenditure paid prior to
Closing.
"Sale Proceeds" means amounts actually or constructively received from the sale
of the Certificates, including (a) amounts used to pay underwriters' discount or
compensation and accrued interest, other than accrued interest for a period not greater
than one year before Closing but only if it is to be paid within one year after Closing and
(b) amounts derived from the sale of any right that is part of the terms of a Certificate or
is otherwise associated with a Certificate (e.g., a redemption right).
"Sale Proceeds Funds" means the funds containing amounts derived by the sale
of the Certificates or investment earnings thereon.
"Yield" means that discount rate which when used in computing the present value
of all payments of principal and interest paid and to be paid on an obligation (using
semiannual compounding on the basis of a 360-day year) produces an amount equal to
the obligation's purchase price (or in the case of the Certificates, the issue price as
established in paragraph 5.1 hereof), including accrued interest.
"Yield Reduction Payment" means a rebate payment or any other amount paid to
the United States in the same manner as rebate amounts are required to be paid or at such
other time or in such manner as the Internal Revenue Service may prescribe that will be
treated as a reduction in Yield of an investment under the Regulations.
2.1. Purpose of the Certificates. The Certificates are being issued to finance
the 2004 Service Agreement in a prudent manner consistent with the revenue needs of the
City. A breakdown of the sources and uses of funds is set forth in the preceding Section
of this Ordinance. At least 75% of the sum of (i) Sale Proceeds plus (ii) investment
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earnings thereon, less (iii) Costs of Issuance paid from Sale Proceeds or investment
earnings thereon, less (iv) Sale Proceeds or investment earnings thereon deposited in a
reasonably required reserve or replacement fund, are expected to be used for construction
purposes with respect to property owned by a governmental unit or a Section 501(c)(3)
organization.
2.2. The 2004 Service Agreement -Binding Commitment and Timing. The
City has incurred or will, within six months of the Closing, incur a substantial binding
obligation (not subject to contingencies within the control of the City or any member of
the same Controlled Group as the City) to a third party to expend at least five percent of
the Sale Proceeds on the 2004 Service Agreement. It is expected that all Sale Proceeds
and investment earnings thereon will have been spent by January 1, 2005.
The investment earnings on the 2004 Service Agreement Fund will be spent to
pay costs of the 2004 Service Agreement and interest on the Certificates not later than the
date set forth in the preceding paragraph, the investment earnings on the Certificate Fund
will be spent to pay interest on the Certificates, or to the extent permitted by law,
investment earnings on amounts in the 2004 Service Agreement Fund and the Certificate
Fund will be commingled with substantial revenues from the governmental operations of
the City, and the earnings are reasonably expected to be spent for governmental purposes
within six months of the date earned. Interest earnings on the 2004 Service Agreement
Fund and the Certificate Fund have not been earmarked or restricted by the City Council
for a designated purpose. No proceeds of the Certificates will be used more than 30 days
after the date of issue of the Certificates for the purpose of paying any principal or
interest on any issue of Certificates, notes, certificates or warrants or on any installment
contract or other obligation of the City or for the purpose of replacing any funds of the
City used for such purpose.
2.3. Reimbursement. None of the Sale Proceeds or investment earnings
thereon will be used for Reimbursed Expenditures.
2.4. Working Capital. All amounts in the Sale Proceeds Funds will be used,
directly or indirectly, to finance Capital Expenditures other than the following:
(a) an amount not to exceed five percent of the Sale Proceeds for
working capital expenditures directly related to Capital Expenditures financed by
the Certificates;
(b) payments of interest on the Certificates for a period commencing at
Closing and ending on the later of the date three years after Closing or one year
after the date on which the 2004 Service Agreement is Placed-in-Service;
(c) Costs of Issuance and Qualified Administrative Costs of
Investments;
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(d) payments of rebate or Yield Reduction Payments made to the
United States under the Regulations; and
(e) principal of or interest on the Certificates paid from unexpected
excess Sale Proceeds and investment earnings thereon.
2.5. Consequences of Contrary Expenditure. The City acknowledges that if
amounts in the Sale Proceeds Funds and investment earnings thereon are spent for non-
Capital Expenditures other than as permitted by paragraph 2.4 hereof, a like amount of
then available funds of the City will be treated as unspent Sale Proceeds.
2.6. Investment of Certificate Proceeds. Not more than 50% of the Sale
Proceeds and investment earnings thereon are or will be invested in investments (other
than Qualified Tax Exempt Obligations) having a Yield that is substantially guaranteed
for four years or more. No portion of the Certificates is being issued solely for the
purpose of investing a portion of Sale Proceeds or investment earnings thereon at a Yield
higher than the Yield on the Certificates.
2.7. No Grants. None of the Sale Proceeds or investment earnings thereon will
be used to make grants to any person.
2.8. Hedges. Neither the City nor any member of the same Controlled Group
as the City has entered into or expects to enter into any hedge (e.g., an interest rate swap,
interest rate cap, futures contract, forward contract or an option) with respect to the
Certificates. The City acknowledges that any such hedge could affect the calculation of
Certificate Yield under the Regulations, and that the Internal Revenue Service could
recalculate Certificate Yield if the failure to account for the hedge fails to clearly reflect
the economic substance of the transaction.
3.1. Use of Proceeds. (a) The use of the Sale Proceeds and investment
earnings thereon and the funds held under the Ordinance at the time of Closing are
described in the preceding Section of this Installment Contract.
(b) Only the funds and accounts described in said Section will be funded at
Closing. There are no other funds or accounts created under this Installment Contract.
(c) Principal of and interest on the Certificates will be paid from the
Certificate Fund.
(d) Any Costs of Issuance incurred in connection with the Certificates to be
paid by the City will be paid from the 2004 Service Agreement Fund.
(e) The costs of the 2004 Service Agreement will be paid from the 2004
Service Agreement Fund and no other moneys (except for investment earnings on
amounts in the 2004 Service Agreement Fund) are expected to be deposited therein.
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3.2. Purpose of Certificate Fund. The Certificate Fund will be used primarily
to achieve a proper matching of revenues and earnings with principal and interest
payments on the Certificates in each Certificate year. It is expected that the Certificate
Fund will be depleted at least once a year, except for a reasonable carry over amount not
to exceed the greater of (a) the earnings on the investment of moneys in the Certificate
Fund for the immediately preceding Certificate year or (b) 1/12th of the principal and
interest payments on the Certificates for the immediately preceding Certificate year.
3.3. No Other Gross Proceeds. (a) Except for the Certificate Fund and the
2004 Service Agreement Fund, and except for investment earnings that have been
commingled as described in paragraph 2.2, the Credit Facility and any other credit
enhancement or liquidity device related to the Certificates, after the issuance of the
Certificates, neither the City nor any member of the same Controlled Group as the City
has or will have any property, including cash or securities that constitutes:
(i) Sale Proceeds;
(ii) amounts in any fund and account with respect to the Certificates
(other than the Rebate Fund);
(iii) amounts that have a sufficiently direct nexus to the Certificates or
to the governmental purpose of the Certificates to conclude that the amounts
would have been used for that governmental purpose if the Certificates were not
used or to be used for that governmental purpose (the mere availability or
preliminary earmarking of such amounts for a governmental purpose, however,
does not itself establish such a sufficient nexus);
(iv) amounts in a debt service fund, redemption fund, reserve fund,
replacement fund or any similar fund to the extent reasonably expected to be used
directly or indirectly to pay principal of or interest on the Certificates or any
amounts for which there is provided, directly or indirectly, a reasonable assurance
that the amount will be available to pay principal of or interest on the Certificates
or any obligations under any credit enhancement or liquidity device with respect
to the Certificates, even if the City encounters financial difficulties;
(v) any amounts held pursuant to any agreement (such as an agreement
to maintain certain levels of types of assets) made for the benefit of the
Certificateholders, or any credit enhancement provider, including any liquidity
device or negative pledge (any amount pledged to pay principal of or interest on
an issue held under an agreement to maintain the amount at a particular level for
the direct or indirect benefit of Certificateholders, the Credit Facility Provider or
any other guarantor of the Certificates); or
(vi) amounts actually or constructively received from the investment
and reinvestment of the amounts described in (i) or (ii) above.
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(b) No compensating balance, liquidity account, negative pledge of property
held for investment purposes or similar arrangement exists with respect to, in any way,
the Certificates or any credit enhancement or liquidity device related to the Certificates.
(c) The term of the Certificates is not longer than is reasonably necessary for
the governmental purposes of the Certificates. The Principal Payment Schedule is not
more rapid (i.e., having a lower average maturity) because a more rapid schedule would
place an undue burden on tax rates and cause such rates to be increased beyond prudent
levels, and would be inconsistent with the governmental purpose of the Certificates as set
forth in paragraph 2.1 hereof.
4.1. Rebate Fund. The City is hereby authorized to create and establish a
special fund to be known as the Rebate Fund (the "Rebate Fund"), which, if created,
shall be continuously held, invested, expended and accounted for in accordance with this
Installment Contact. Moneys in the Rebate Fund shall not be considered moneys held for
the benefit of the Certificateholders. Except as provided in the Regulations, moneys in
the Rebate Fund (including earnings and deposits .therein) shall be held in trust for
payment to the United States as required by the Rebate Provisions and by the Regulations
and as contemplated under the provisions of this Installment Contract.
4.2. Compliance with Rebate Provisions. The City covenants to take such
actions and make, or cause to be made, all calculations, transfers and payments that may
be necessary to comply with the Rebate Provisions applicable to the Certificates. The
City will make, or cause to be made, rebate payments with respect to the Certificates in
accordance with law.
4.3. Records. The City agrees to keep and retain or cause to be kept and
retained until six years after the Certificates are paid in full adequate records with respect
to the investment of all Gross Proceeds and amounts in the Rebate Fund. Such records
shall include: (a) purchase price; (b) purchase date; (c) type of investment; (d) accrued
interest paid; (e) interest rate; (f) principal amount; (g) maturity date; (h) interest payment
date; (i) date of liquidation; and (j) receipt upon liquidation.
If any investment becomes Gross Proceeds on a date other than the date such
investment is purchased, the records required to be kept shall include the fair market
value of such investment on the date it becomes Gross Proceeds. If any investment is
retained after the date the last Certificate is retired, the records required to be kept shall
include the fair market value of such investment on the date the last Certificate is retired.
Amounts or investments will be segregated whenever necessary to maintain these
records.
4.4. Prohibited Payments; Certificates of Deposit and Investment Agreements.
In making investments of Gross Proceeds, the City shall take into account prudent
investment standards including the date on which moneys to be invested may be needed.
The City shall provide that all amounts which constitute Gross Proceeds and any amounts
in the Rebate Fund shall be invested at all times to the greatest extent practicable in
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investments permitted under this Installment Contract, and no amounts may be held as
cash or be invested in zero Yield investments other than obligations of the United States
purchased directly from the United States; provided, however, that in the event moneys
cannot be invested, other than as provided in this sentence, due to the denomination, price
or availability of investments, such amounts shall be invested in an interest bearing
deposit account of a bank with a Yield not less than that paid to the general public or held
uninvested (but uninvested amounts shall be held to the minimum amount necessary).
For purposes of determining the purchase price of investments (for either yield
restriction or rebate purposes), Gross Proceeds and any amounts in the Rebate Fund that
are invested in certificates of deposit or in GICs shall be invested only in accordance with
the following provisions:
(a) Investments in certificates of deposit of banks or savings and loan
associations that have a fixed interest rate, fixed payment schedules and
substantial penalties for early withdrawal shall be made only if either (i) the Yield
on the certificate of deposit (A) is not less than the Yield on reasonably
comparable direct obligations of the United States and (B) is not less than the
highest Yield that is published or posted by the provider to be currently available
from the provider on reasonably comparable certificates of deposit offered to the
public or (ii) the investment is an investment in a GIC and qualifies under
paragraph (b) below.
(b) Investments in GICs shall be made only if
(i) the bid specifications are in writing, include all material
terms of the bid and are timely forwarded to potential providers (a term is
material if it may directly or indirectly affect the yield on the GIC);
(ii) the terms of the bid specifications are commercially
reasonable (a term is commercially reasonable if there is a legitimate
business purpose for the term other than to reduce the yield on the GIC);
(iii) all bidders for the GIC have equal opportunity to bid so
that, for example, no bidder is given the opportunity to review others bids
(a last look) before bidding;
(iv) any agent used to conduct the bidding for the GIC does not
bid to provide the GIC;
(v) at least three of the providers solicited for bids for the GIC
are reasonably competitive providers of investments of the type purchased
(i.e., providers that have established industry reputations as competitive
providers of the type of investments being purchased);
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(vi) at least three of the entities that submit a bid do not have a
financial interest in the Certificates;
(vii) at least one of the entities that provided a bid is a
reasonably competitive provider that does not have a financial interest in
the Certificates;
(viii) the bid specifications include a statement .notifying
potential providers that submission of a bid is a representation that the
potential provider did not consult with any other provider about its bid,
that the bid was determined without regard to any other formal or informal
agreement that the potential provider has with the City or any other person
(whether or not in connection with the Certificates) and that the bid is not
being submitted solely as a courtesy to the City or any other person for
purposes of satisfying the federal income tax requirements relating to the
bidding for the GIC;
(ix) the determination of the terms of the GIC takes into
account the reasonably expected deposit and drawdown schedule for the
amounts to be invested;
(x) the highest-yielding GIC for which a qualifying bid is made
(determined net of broker's fees) is in fact purchased; and
(xi) the obligor on the GIC certifies the administrative costs that
it is paying or expects to pay to third parties in connection with the GIC.
(c) If a GIC is purchased, the City will retain the following records
with its Certificate documents until three years after the Certificates are redeemed
in their entirety:
(i) a copy of the GIC;
(ii) the receipt or other record of the amount actually paid for
the GIC, including a record of any administrative costs paid, and the
certification under paragraph (b)(xi) of this section;
(iii) for each bid that is submitted, the name of the person and
entity submitting the bid, the time and date of the bid, and the bid results;
and
(iv) the bid solicitation form and, if the terms of the GIC
deviated from the bid solicitation form or a submitted bid is modified, a
brief statement explaining the deviation and stating the purpose for the
deviation.
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Moneys to be rebated to the United States shall be invested to mature on or prior
to the anticipated rebate payment date. All investments made with Gross Proceeds or
amounts in the Rebate Fund shall be bought and sold at fair market value. The fair
market value of an investment is the price at which a willing buyer would purchase the
investment from a willing seller in a bona fide, arm's length transaction. Except for
investments specifically described in this section and United States Treasury obligations
that are purchased directly from the United States Treasury, only investments that are
traded on an established securities market, within the meaning of regulations promulgated
under Section 1273 of the Code, will be purchased with Gross Proceeds. In general, an
"established securities market" includes: (i) property that is listed on a national securities
exchange, an interdealer quotation system or certain foreign exchanges; (ii) property that
is traded on a Commodities Futures Trading Commission designated City Council of
trade or an interbank market; (iii) property that appears on a quotation medium; and
(iv) property for which price quotations are readily available from dealers and brokers. A
debt instrument is not treated as traded on an established market solely because it is
convertible into property which is so traded.
An investment of Gross Proceeds in an External Commingled Fund shall be made
only to the extent that such investment is made without an intent to reduce the amount to
be rebated to the United States Government or to create a smaller profit or a larger loss
than would have resulted if the transaction had been at arm's length and had the rebate or
Yield restriction requirements not been relevant to the City. An investment of Gross
Proceeds shall be made in a Commingled Fund other than an External Commingled Fund
only if the investments made by such Commingled Fund satisfy the provisions of this
paragraph.
The foregoing provisions of this paragraph- 4.4 satisfy various safe harbors set
forth in the Regulations relating to the valuation of certain types of investments. The safe
harbor provisions of this paragraph 4.4 are contained herein for the protection of the City,
who has covenanted not to take any action to adversely affect the tax-exempt status of the
interest on the Certificates. The City will contact Bond Counsel if it does not wish to
comply with the provisions of this paragraph 4.4 and forego the protection provided by
the safe harbors provided herein.
4.5. Arbitrage Elections. The Mayor, City Clerk and Treasurer of the City
Council are hereby authorized to execute one or more elections regarding certain matters
with respect to arbitrage.
5.1. Issue Price. For purposes of determining the Yield on the Certificates, the
purchase price of the Certificates is equal to the first offering price at which the Purchaser
sold at least ten percent of each maturity of the Certificates or is equal to par, plus
accrued interest, if the Purchaser does not intend to resell the Certificates.
5.2. Yield Limits. (a) Except as provided in paragraph (b) or (c), all Gross
Proceeds shall be invested at market prices and at a Yield (after taking into account any
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Yield Reduction Payments) not in excess of the Yield on the Certificates plus, for
amounts in the 2004 Service Agreement Fund only, 1/8th of one percent.
(b) The following may be invested without Yield restriction:
(i) amounts invested in Qualified Tax Exempt Obligations (to the
extent permitted by the Act and this Installment Contract);
(ii) amounts in the Rebate. Fund;
(iii) amounts on deposit in the Certificate Fund (except for capitalized
interest) that have not been on deposit under the Ordinance for more than
13 months, so long as the Certificate Fund continues to qualify as a bona fide debt
service fund as described in paragraph 3.2 hereof;
(iv) amounts on deposit in the 2004 Service Agreement Fund prior to
the earlier of three years after Closing or the completion (or abandonment) of the
2004 Service Agreement;
(v) amounts in the Certificate Fund to be used to pay capitalized
interest on the Certificates prior to the earlier of three years after Closing or the
payment of all capitalized interest;
(vi) all amounts other than Sale Proceeds for the first 30 days after they
become Gross Proceeds; and
(vii) all amounts derived from the investment of Sale Proceeds or
investment earnings thereon for a period of one year from the date received.
(c) An amount not to exceed the lesser of $100,000 or five percent of the Sale
Proceeds may be invested without regard to Yield restriction.
5.3. Continuing Nature of Yield Limits. Except as provided in paragraph 7.6,
once moneys are subject to the Yield limits of paragraph 5.2 hereof, such moneys remain
Yield restricted until they cease to be Gross Proceeds.
5.4. Federal Guarantees. Except for investments meeting the requirements of
paragraph 5.2(b) hereof, investments of Gross Proceeds shall not be made in
(a) investments constituting obligations of or guaranteed, directly or indirectly, by the
United States (except obligations of the United States Treasury, obligations guaranteed
by the Federal Housing Administration, the Federal National Mortgage Association, the
Federal Home Loan Mortgage Corporation, the Government National Mortgage
Association, the Student Loan Marketing Association, any guarantee by the Bonneville
Power Authority pursuant to the Northwest Power Act (16 U.S.C. 839d) as in effect on
the date of enactment of the Tax Reform Act of 1984, or investments in obligations
issued pursuant to Section 21B(d)(3) of the Federal Home Loan Bank, as amended (e.g.,
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Refcorp Strips)); or (b) federally insured deposits or accounts (as defined in
Section 149(b)(4)(B) of the Code). Except as permitted in the immediately prior sentence
and in the Regulations, no portion of the payment of principal or interest on the
Certificates or any credit enhancement or liquidity device relating to the foregoing is or
will be guaranteed, directly or indirectly (in whole or in part), by the United States (or
any agency or instrumentality thereof). No portion of the Gross Proceeds has been or
will be used to make loans the payment of principal or interest with respect to which is or
will be guaranteed (in whole or in part) by the United States (or any agency or
instrumentality thereof).
6.1. Payment and Use Tests. (a) The payment of more than five percent of the
principal of or the interest on the Certificates will not be, directly or indirectly (i) secured
by any interest in (A) property used or to be used in any activity carried on by any person
other than a state or local governmental unit or (B) payments in respect of such property
or (ii) on a present value basis, derived from payments (whether or not to the City or a
member of the same Controlled Group as the City) in respect of property, or borrowed
money, used or to be used in any activity carried on by any person other than a state or
local governmental unit.
(b) No more than the lesser of five percent of the Sale Proceeds and
investment earnings thereon or $5,000,000 will be used, directly or indirectly, to make or
finance loans to any persons.
(c) No user of the 2004 Service Agreement other than a state or local
governmental unit will use more than five percent of the 2004 Service Agreement, in the
aggregate, on any basis other than the same basis as the general public; and no person
other than a state or local governmental unit .will be a user of more than five percent of
the 2004 Service Agreement, in the aggregate, as a result of (i) ownership, (ii) actual or
beneficial use pursuant to a lease or a management, service, incentive payment, research
or output contract, or (iii) any other similar arrangement, agreement or understanding,
whether written or oral.
(d) No more than the lesser of five percent of the proceeds of the- Certificates
or $5,000,000 have been or will be used to provide professional sports facilities. For
purposes of this paragraph, the term "professional sports facilities" (i) means real
property or related improvements used for professional sports exhibitions, games or
training, regardless of whether the admission of the public or press is allowed or paid and
(ii) includes any use of a facility that generates a direct or indirect monetary benefit
(other than reimbursement for out-of-pocket expenses) for a person who uses such
facilities for professional sport exhibitions, games or training.
6.2. I.R.S. Form 8038-G. The information contained in the Information Return
for Tax-Exempt Governmental Obligations, Form 8038 ~, is true and complete. The
City will file Form 8038-G (and all other required information reporting forms) in a
timely manner.
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6.3. Bank Qualification. (a) The City hereby designates each of the
Certificates as a "qualified tax-exempt obligation" for the purposes and within the
meaning of Section 265(b)(3) of the Code. In support of such designation, the City
hereby certifies that (i) none of the Certificates will be at anytime a "private activity
bond" (as defined in Section 141 of the Code) other than a "qualified 501(c)(3) bond" (as
defined in Section 145 of the Code), (ii) as of the date hereof, the City has not issued any
tax-exempt obligations of any kind in calendar year 2004 other than the Certificates nor
have any tax-exempt obligations of any kind been issued on behalf of the City and
(iii) not more than $10,000,000 of obligations of any kind (including the Certificates)
issued by or on behalf of the City during calendar year 2004 will be designated for
purposes of Section 265(b)(3) of the Code.
(b) The City is not subject to Control by any entity, and there are no entities
subject to Control by the City.
(c) On the date hereof, the City does not reasonably anticipate that for
calendar year 2004 it will issue any Section 265 Tax-Exempt Obligations (other than the
Certificates), or that any Section 265 Tax-Exempt Obligations will be issued on behalf of
it. "Section 265 Tax-Exempt Obligations" are obligations the interest on which is
excludable from gross income of the owners thereof under Section 103 of the Code,
except for private activity bonds other than qualified 501(c)(3) bonds, both as defined in
Section 141 of the Code. The City will not issue or permit the issuance on behalf of it or
by any entity subject to Control by the City (which may hereafter come into existence) of
Section 265 Tax-Exempt Obligations (including the Certificates) that exceed the
aggregate amount of $10,000,000 during calendar year 2004 unless it first obtains an
opinion of Bond Counsel to the effect that such issuance will not adversely affect the
treatment of the Certificates as "qualified tax-exempt obligations" for the purposes and
within the meaning of Section 265(b)(3) of the Code.
7.1. Termination; Interest of City in Rebate Fund. The terms and provisions
set forth in this Section shall terminate at the later of (a) 75 days after the Certificates
have been fully paid and retired or (b) the date on which all amounts remaining on
deposit in the Rebate Fund, if any, shall have been paid to or upon the order of the United
States and any other payments required to satisfy the Rebate Provisions of the Code have
been made to the United States. Notwithstanding the foregoing, the provisions of
paragraph 4.3 hereof shall not terminate until the sixth anniversary of the date the
Certificates are fully paid and retired.
7.2. No Common Plan of Financing. Since a date that is 15 days prior to the
date of sale of the Certificates by the City to the Purchaser, neither the City nor any
member of the same Controlled Group as the City has sold or delivered any obligations
other than the Certificates that are reasonably expected to be paid out of substantially the
same source of funds as the Certificates. Neither the City nor any member of the same
Controlled Group as the City will sell or deliver within 15 days after the date hereof any
obligations other than the Certificates that are reasonably expected to be paid out of
substantially the same source of funds as the Certificates. No obligation other than the
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Certificates were sold on the same date as the Certificates, are being issued on the date of
the Closing and were or are being offered pursuant to a single offering document.
7.3. Reserved.
7.4. Reserved.
7.5. Future Events. The City acknowledges that any changes in facts or
expectations from those set forth herein may result in different Yield restrictions or rebate
requirements from those set forth herein. Such changes in facts or expectations might
include, but are not in any respect whatsoever limited to, moneys or investments being
pledged or otherwise set aside for payment of principal of or interest on the Certificates,
amounts being derived from the sale of any right that is part of the terms of a Certificate
or is otherwise associated with a Certificate (e.g., a redemption right), the City entering
into any agreement to maintain certain levels of types of assets for the benefit of a holder
of a Certificate or any credit enhancement with respect to the Certificates or the sale of
any Certificate-financed property. The City shall promptly contact Bond Counsel if such
changes do occur.
7.6. Permitted Changes; Opinion of Bond Counsel. The Yield restrictions
contained in paragraph 5.2 or any other restriction or covenant contained herein need not
be observed or may be changed if the City receives an opinion of Bond Counsel to the
effect that such nonobservance or change will not result in the loss of any exemption for
the purpose of federal income taxation to which interest on the Certificates is otherwise
entitled.
7.7. Successors and Assigns. The terms, provisions, covenants and conditions
of this Section shall bind and inure to the benefit of the respective successors and assigns
of the City Council and the City.
7.8. Expectations. The City Council has reviewed the facts, estimates and
circumstances in existence on the date of issuance of the Certificates. Such facts,
estimates and circumstances, together with the expectations of the City as to future
events, are set forth in summary form in this Section. Such facts and estimates are true
and are not incomplete in any material respect. On the basis of the facts and estimates
contained herein, the City has adopted the expectations contained herein. On the basis of
such facts, estimates, circumstances and expectations, it is not expected that the Sale
Proceeds or investment earnings thereon or any other moneys or property will be used in
a manner that will cause the Certificates to be arbitrage bonds within the meaning of the
Rebate Provisions and the Regulations. Such expectations are reasonable and there are
no other facts, estimates and circumstances that would materially change such
expectations.
The City also agrees and covenants with the purchasers and holders of the Certificates
from time to time outstanding that, to the extent possible under Illinois law, it will comply with
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whatever federal tax law is adopted in the future which applies to the Certificates and affects the
tax-exempt status of the Certificates.
The City Council hereby authorize any Designated Officer to make such further
covenants and certifications as may be necessary to assure that the use thereof will not cause the
Certificates to be arbitrage bonds and to assure that the interest on the Certificates will be exempt
from federal income taxation. In connection therewith, the City and the City Council further
agree: (a) through their officers, to make such further specific covenants, representations as shall
be truthful, and assurances as may be necessary or advisable; (b) to consult with counsel
approving the Certificates and to comply with such advice as may be given; (c) to pay to the
United States, as necessary, such sums of money representing required rebates of excess
arbitrage profits relating to the Certificates; (d) to file such forms, statements, and supporting
documents as may be required and in a timely manner; and (e) if deemed necessary or advisable
by their officers, to employ and pay fiscal agents, financial advisors, attorneys, and other persons
to assist the City in such compliance.
Section 16. Registered Form. The City recognizes that Section 149(a) of the Code
requires the Certificates to be issued and to remain in fully registered form in order that interest
thereon is exempt from federal income taxation under laws in force at the time the Certificates
are delivered. In this connection, the City agrees that it will not take any action to permit the
Certificates to be issued in, or converted into, bearer or coupon form.
Section 17. Pertaining to the Certificate Registrar. If requested by the Certificate
Registrar, any officer of the City is authorized to execute a standard form of agreement between
the City and the Certificate Registrar with respect to the obligations and duties of the Certificate
Registrar under this Ordinance. In addition to the terms of such agreement and subject to
modification thereby, the Certificate Registrar by acceptance of duties under this Ordinance
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agrees (a) to act as registrar, paying agent, authenticating agent, and transfer agent as provided
herein; (b) to maintain a list of Certificateholders as set forth herein and to furnish such list to the
City upon request, but otherwise to keep such list confidential to the extent permitted by law;
(c) to give notice of redemption of Certificates as provided herein; (d) to cancel and/or destroy
Certificates which have been paid at maturity or upon earlier redemption or submitted for
exchange or transfer; (e) to furnish the City at least annually a certificate with respect to
Certificates cancelled and/or destroyed; and (f) to furnish the City at least annually an audit
confirmation of Certificates paid, Certificates outstanding and payments made with respect to
interest on the Certificates. The City covenants with respect to the Certificate Registrar, and the
Certificate Registrar further covenants and agrees as follows:
A. The City shall at all times retain a Certificate Registrar with respect to the
Certificates; it will maintain at the designated office(s) of such Certificate Registrar a place or
places where Certificates may be presented for payment, registration, transfer, or exchange; and
it will require that the Certificate Registrar properly maintain the Certificate Register and
perform the other duties and obligations imposed upon it by this Ordinance in a manner
consistent with the standards, customs, and practices of the municipal securities industry.
B. The Certificate Registrar shall signify its acceptance of the duties and obligations
imposed upon it by this Ordinance by executing the certificate of authentication on any
Certificate, and by such execution the Certificate Registrar shall be deemed to have certified to
the City that it has all requisite power to accept and has accepted such duties and obligations not
only with respect to the Certificate so authenticated but with respect to all the Certificates. Any
Certificate Registrar shall be the agent of the City and shall not be liable in connection with the
performance of its duties except for its own negligence or willful wrongdoing. Any Certificate
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Registrar shall, however, be responsible for any representation in its certificate of authentication
on Certificates.
C. The City may remove the Certificate Registrar at any time. In case at any time the
Certificate Registrar shall resign, shall be removed, shall become incapable of acting, or shall be
adjudicated a bankrupt or insolvent, or if a receiver, liquidator, or conservator of the Certificate
Registrar or of the property thereof shall be appointed, or if any public officer shall take charge
or control of the Certificate Registrar or of the property or affairs thereof, the City covenants and
agrees that it will thereupon appoint a successor Certificate Registrar. Any Certificate Registrar
appointed under the provisions of this Section shall be a bank, trust company, or national
banking association maintaining its principal corporate trust office in Illinois and having capital
and surplus and undivided profits in excess of $50,000,000. The City Clerk is hereby directed to
file a certified copy of this Ordinance with the Certificate Registrar.
Section 18. Continuing Disclosure Undertaking. Any Designated Officer is hereby
authorized, empowered and directed to execute and deliver a Continuing Disclosure Undertaking
(the "Continuing Disclosure Undertaking ") in connection with the issuance of the Certificates,
with such provisions therein as he or she shall approve, his or her execution thereof to constitute
conclusive evidence of his or her approval of such provisions. When the Continuing Disclosure
Undertaking is executed and delivered on behalf of the City as herein provided, the Continuing
Disclosure Undertaking will be binding on the City and the officers, employees and agents of the
City, and the officers, employees and agents of the City are hereby authorized, empowered and
directed to do all such acts and things and to execute all such documents as may be necessary to
carry out and comply with the provisions of the Continuing Disclosure Undertaking as executed.
Notwithstanding any other provision of this Ordinance, the sole remedies for failure to comply
with the Continuing Disclosure Undertaking shall be the ability of the beneficial owner of any
-42-
i
Certificate to seek mandamus or specific performance by court order, to cause the City to comply
with its obligations under the Continuing Disclosure Undertaking.
Section 19. Defeasance. Any Certificate or Certificates which (a) are paid and
cancelled, (b) which have matured and for which sufficient sums been deposited with the
Certificate Registrar to pay all principal and interest due thereon, or (c) for which sufficient
United States of America dollars and direct United States Treasury obligations have been
deposited with the Certificate Registrar or similar institution to pay, taking into account
investment earnings on such obligations, all principal of and interest on such Certificate or
Certificates when due at maturity, pursuant to an irrevocable escrow or trust agreement, shall
cease to have any lien on or right to receive or be paid from the Certificate Moneys hereunder
and shall no longer have the benefits of any covenant for the registered owners of outstanding
Certificates as set forth herein as such relates to lien and security of the outstanding Certificates.
All covenants relative to the Tax-exempt status of the Certificates; and payment, registration,
transfer, and exchange; are expressly continued for all Certificates whether outstanding
Certificates or not.
Section 20. Superseder and Effective Date. All ordinances, resolutions, and orders, or
parts thereof, in conflict herewith, are to the extent of such conflict hereby superseded; and this
Ordinance shall be in full force and effect upon its passage.
ADOPTED: this 15th day of June, 2004
-43-
+.~
Mayor, ity of Canton, Fulton County,
Illino s
ATTEST:
City Clerk, 1
City of Canton, Fulton County, Illinois
-44-
EXTRACT of MINUTES of the regular public meeting of the City
Council of the City of Canton, Fulton County, Illinois, held at the
Historic Depot, 50 N. 4th. Ave., in said City, at 6:30 p.m., on
the 15thday of June, 2004.
The Mayor called the meeting to order and directed the City Clerk to call the roll.
Upon the roll being called, the Mayor, Jerry ^-~. Bohler ,and
the following Aldermen answered present:
Larry Sarff, Marv Fillingham, Bob :4olleck, Elny Harn, Les Carl, Jim Hartford
Rick Reed and Craiq West
The following were absent: none
The City Council then discussed the proposed financing of a redevelopment project in
and for the City, including, specifically, the demolition of an abandoned International Harvester
manufacturing facility.
Thereupon, Alderman
presented, and there was placed before
each Alderman in full the following ordinance:
f
ORDINANCE NUMBER 1 ~,0
AN ORDINANCE of the City of Canton, Fulton County, Illinois,
authorizing and providing for an Installment Purchase Agreement
for the purpose of paying a part of the cost of a redevelopment
project, and authorizing and providing for the issue of $1,200,000
General Obligation Limited Tax Debt Certificates, Series 2004,
evidencing the rights to payment under such Agreement,
prescribing the details of the Agreement and Certificates, and
providing for the security for and means of payment under the
Agreement of the Certificates.
Introduced for first reading
on June 1, 2004.
Adopted by the City Council
of said City on the 15 nth day
of June, 2004
1690589.01.03
218651 Canton2004illpmc • 5/20/04
STATE OF ILLINOIS )
) SS
COUNTY OF FULTON )
CERTIFICATION OF MINUTES AND ORDINANCE
AND PUBLICATION IN PAMPHLET FORM
I, the undersigned, do hereby certify that I am the duly qualified and acting City Clerk of
the City of Canton, Fulton County, Illinois (the "City"), and as such official I am the keeper of
the official journal of proceedings, books, records, minutes, and files of the City and of the City
Council (the "City Council") thereof.
I do further certify that the foregoing is a full, true, and complete transcript of that portion
of the minutes of the meeting (the "Meeting ") of the City Council held on the 15th day of June,
2004, insofar as the same relates to the adoption of an ordinance, numbered 1 X02 ,and
entitled:
AN ORDINANCE of the City of Canton, Fulton County, Illinois,
authorizing and providing for an Installment Purchase Agreement
for the purpose of paying a part of the cost of a redevelopment
project, and authorizing and providing for the issue of $1,200,000
General Obligation Limited Tax Debt Certificates, Series 2004,
evidencing the rights to payment under such Agreement,
prescribing the details of the Agreement and Certificates, and
providing for the security for and means of payment of the
Certificates.
(the "Ordinance ") a true, correct, and complete copy of which Ordinance as adopted at the
Meeting appears in the foregoing transcript of the minutes of the meeting.
I do further certify that the deliberations of the City Council on the adoption of the
Ordinance were taken openly; that the vote on the adoption of the Ordinance was taken openly;
that the Meeting was held at a specified time and place convenient to the public; that notice of
the Meeting was duly given to all newspapers, radio or television stations, and other news media
requesting such notice; that an agenda for the Meeting (the "Agenda ") was posted at the location
AN ORDINANCE of the City of Canton, Fulton County, Illinois,
authorizing and providing for an Installment Purchase Agreement
for the purpose of paying a part of the cost of a redevelopment
project, and authorizing and providing for the issue of $1,200,000
General Obligation Limited Tax Debt Certificates, Series 2004,
evidencing the rights to payment under such Agreement,
prescribing the details of the Agreement and Certificates, and
providing for the security for and means of payment under the
Agreement of the Certificates.
(the "Certificate Ordinance").
A City Council discussion of the matter followed. During the City Council discussion,
~ ~ - gave a public recital of the nature of the matter,
which included a complete reading of the title of the Certificate Ordinance.
The Mayor directed that the roll be called for a vote upon the motion to adopt the
Certificate Ordinance.
Upon the roll being called, the following Aldermen voted AYE: craia Flest
Rick Reed, Jim Hartford, Les Carl, Elny Harn, Bob D4olleck, Mary Fillinqham and
Larrv Sarf.f .
and the following Aldermen voted NnY:
WHEREUPON the Mayor declared the motion carried and the Certificate Ordinance
adopted and did direct the City Clerk to record the same in full in the records of the City Council
of the City of Canton, Fulton County, Illinois.
-2-
Other business was duly transacted at said meeting.
Upon motion duly made and carried, the meeting adjourned.
„.
Cit Jerk
-3-
where the Meeting was held and at the principal office of the City Council on a day which was
not a Saturday, Sunday or legal holiday for Illinois municipalities and at least 48 hours in
advance of the holding of the Meeting; that the Agenda described or made specific reference to
the Ordinance; and that the Meeting was called and held in strict compliance with the provisions
of the Open Meetings Act of the State of Illinois, as amended, and the Illinois Municipal Code,
as amended, and that the City Council has complied with all of the provisions of said Act and
said Code and with all of the procedural rules of the City Council in the adoption of the
Ordinance.
I do further certify that said Ordinance was published in sufficient numbers for public
inspection in pamphlet form on the 15th day of June, 2004, by direction of the City Council.
I do further certify that I have attached hereto as SCHEDULE I a true, correct and
complete copy of the Agenda as so posted.
IN WITNESS WHEREOF I hereunto affix my official signature and the seal of the City this
15tMlay of June, 2004.
City Clerk
[SEAL]
-2-
SCHEDULEI
CITY CLERK TO ATTACH AGENDA
A G E N D A
CANTON CITY COUNCIL
June 15, 2004 6:30 p.m.
PLEDGE OF ALLEGIANCE
INVOCATION
ROLL CALL
MINUTES OF COUNCIL MEETING June 1, 2004
TREASURER'S REPORT
BILLS FOR MAY
COMMITTEE REPORTS:
Finance
Vacuum Pump Repair - WWTP
Audit Engagement Letter - Hocker & Fitzjarrald
Pay request #1 -N.E. Finch for IH Project
Legal & Ordinance
Animal Shelter Agreement
Community & Industrial Development
Negotiations, Grievance & Personnel
COMMUNICATIONS FROM MAYOR BOHLER
Liquor Commissioner Report:
Official Time Out June 26 -11:00 to 10:00 p.m.
For Canton Freshman Sports Fundraiser
Agreement with Environmental Operations, Inc
Retain Chapman & Cutler -Debt Certificate
OLD BUSINESS:
ORDINANCE -AMENDING TITLE 8, CHAPTER 18, SECTION 1, OF
THE CANTON MUNICIPAL CODE RELATING TO GARBAGE
DISPOSAL SYSTEM.
ORDINANCE - AUTHORIZING AND PROVIDING FOR AN
INSTALLMENT PURCHASE AGREEMENT FOR THE PURPOSE OF
PAYING A PART OF THE COST OF A REDEVELOPMENT PROJECT,
AND AUTHORIZING AND PROVIDING FOR THE ISSUE OF $1,200,000
GENERAL OBLIGATION LIMITED TAX DEBT CERTIFICATES,
SERIES 2004, EVIDENCING THE RIGHTS TO PAYMENT UNDER
SUCH AGREEMENT, PRESCRIBING THE DETAILS OF THE
AGREEMENT AND CERTIFICATES, AND PROVIDING FOR THE
SECURITY FOR AND MEANS OF PAYMENT UNDER THE
AGREEMENT OF THE CERTIFICATES.
ORDINANCE -AUTHORIZING, DIRECTING AND SETTING THE
DATE FOR THE SALE AT PUBLIC AUCTION OF CERTAIN
PERSONAL PROPERTY OWNED BY THE CITY OF CANTON, AND NO
LONGER NEEDED FOR CITY PURPOSES.
NEW BUSINESS:
ORDINANCE -APPROPRIATING FOR ALL CORPORATE PURPOSES
OF THE CITY OF CANTON, FULTON COUNTY, ILLINOIS, FOR THE
FISCAL YEAR BEGINNING MAY 1, 2004, AND ENDING APRIL 30,
2005.
ORDINANCE -DESIGNATING THE INTERNATIONAL HARVESTER
SITE REDEVELOMENT PROJECT AREA.
ORDINANCE -APPROVING THE REDEVELOPMENT PLAN AND
PROJECT FOR THE INTERNATIONAL HARVESTER SITE
REDEVELOPMENT PROJECT AREA.
ORDINANCE -ADOPTING TAX INCREMENT FINANCING FOR THE
CITY OF CANTON, IN CONNECTION WITH THE DESIGNATION OF
THE INTERNATIONAL HARVESTER SITE REDEVELOMENT
PROJECT AREA.
RESOLUTION - ASCERTAINING THE PREVAILING RATE OF
WAGES FOR LABORERS, MECHANICS AND OTHER WORKMEN
EMPLOYED IN ANY PUBLIC WORKS BY THE CITY OF CANTON,
ILLINOIS.
RESOLUTION -CANTON PRIDE COMMITTEE TO HOLD A 4TH OF
JULY PARADE FROM 7:00 P.M. TO 8:00 P.M.
EXECUTIVE SESSION - NEGOTIATIONS, GRIEVANCE &
PERSONNEL - PURPOSE OF DISCUSSING PUBLIC WORKS
CONTRACTS.
•
STATE OF ILLINOIS )
) SS
COUNTY OF FULTON )
CERTIFICATE OF FILING
We, the undersigned, do hereby certify that we are, respectively, the duly qualified and
acting City Clerk and Treasurer of the City of Canton, Fulton County, Illinois (the "City "), and
as such officers we do hereby certify that on the 15t1~ day of June, 2004, there was filed with
each of us, respectively, and placed on deposit in our respective records, a properly certified
copy of Ordinance Number ~, passed by the City Council of the City, on thel5th day of
June, 2004, and approved by the Mayor, and entitled:
AN ORDINANCE of the City of Canton, Fulton County, Illinois,
authorizing and providing for an Installment Purchase Agreement
for the purpose of paying a part of the cost of a redevelopment
project, and authorizing and providing for the issue of $1,200,000
General Obligation Limited Tax Debt Certificates, Series 2004,
evidencing the rights to payment under such Agreement,
prescribing the details of the Agreement and Certificates, and
providing for the security for and means of payment under the
Agreement of the Certificates.
and that the same has been deposited in, and all as appears from, the official files and records of
our respective offices.
IN WITNESS WHEREOF we have hereunto affixed our official signatures and the seal of the
City this 15th day of June, 2004.
n'
~ ~
ty Clerk
[SEAL] /...---_."
Treasurer
CERTIFICATE
STATE OF ILLINOIS, )
CITY OF CANTON, ) SS.
COUNTY OF FULTON. )
I, Nancy Whites, City Clerk of the City of Canton, in the City of Canton,
in the County of Fulton and State of Illinois, do hereby certify that as the
City Clerk of the City of Canton, I am the keeper of records, minutes,
ordinances and other books, records and papers of said City, and that the
foregoing is a true and correct copy of
ORDINANCE N0. 1802
AN ORDINANCE OF THE CITY OF CAIV'iDN, FULTON OOUN'iY, ILLIlVOIS ,
AUTHORIZING AND PROVIDING FOR AN INSTALir~]T PURC~~ASE AGREII~'lEIVT
FOR THE PURPOSE OF PAYING A PART OF THE COST OF A REDEVEIAPM~]T
PROJECT, AND AUTHORIZING AND PROVIDING FOR Tf~ ISSUE OF $1,200,000
GENERAL OBLIGATION LIlKITID TAX DEBT (~TIFICATES, SERIES 2004,
EVIDENCING THE RIGHTS TD PAYP'1ENT UNDIIt SUCH AGREII~I' , PRESCRIBIlVG
THE DETAILS OF THE AGREEL~]T AND CIItTIFICATES , AND 'PROVIDING FOR
THE SECURITY FOR AND MF.AI~TS OF PAYMENT UNDER THE AGREII"IIIVT OF THE
CERTIFICATES.
Adopted by the City Council of said City and approved by the Mayor thereof
on the 15th- day of T1mP , 20 04 .
WITNESS my hand and the Corporate Seal of the City of Canton,
Illinois this 12thday of July 20 04 .
~~ ' ~~
Nancy Whi s, City Clerk
(SEAL)
STATE OF ILLINOIS )
SS
COUNTY OF FULTON )
ORGANIZATION CERTIFICATE
We, the undersigned, do hereby certify that we are the duly qualified and acting Mayor
and City Clerk, respectively, of the City of Canton, Fulton County, Illinois (the "City', and as
such officials we do further certify as follows:
That the City was organized and incorporated as a City under the laws of the State
of Illinois on or about the year 1849, has continuously since its incorporation
operated under the general laws of the State of Illinois as a City governed by a
Mayor and City Council, has never changed its form of government, is now
operating under the provisions of the Illinois Municipal Code, as amended
(65ILCS 5/1-1-1 et seq.) (the "Code"), and is not now operating under the
provisions of any special act or charter.
2. That the City has not adopted and is not now operating under the provisions of
Article 4 of the Code, said article providing for The Commission Form of
Municipal Government, has not adopted and is not now operating under the
provisions of Article 5 of the Code, said article providing for The Managerial Form
of Municipal Government, has not adopted and is not now operating under the
provisions of Articles 6, 14 and 18 of the Election Code of the State of Illinois, as
amended (10 ILCS 516, 5/14 and 5118), said articles being known as the City
Election Law, and has not elected by referendum to become a home rule unit
under the provisions of the 1970 Constitution of the State of Illinois.
3. That the present duly qualified and acting officials of the City are as follows:
Jerry M. Bohler, Mayor
Nancy S. Whites, City Clerk
Patty Beaird Franzoni, City Treasurer
Ronald Weber, City Attorney
with a City Council (the "Council ") composed of eight (8) duly qualified and
acting Aldermen as follows: James Hartford, Robert Molleck, Larry Sarff, Craig
West, Les Carl, Rick Reed, Elny Harn and Mary Fillingham, and that said members
of t e Council have been the duly qualified and acting Council since
,ac~3, and provided there are no vacancies created by resignation
or of a ise, will constitute the Council until the election for members of the
Council to be held in April, 2005, is canvassed and a new Council duly constituted.
Certificates
2118651
4. That the changes in the boundaries of the City during the past five (5) years were
as follows: None.
That The County of Fulton, Illinois, is the only county within which the City is
wholly or partly located, and that said county has not adopted and is not now
operating under the provisions of Article 6A of the Election Code of the State of
Illinois, as amended (10 ILCS 5/6A), said article providing for a county board of
election commissioners.
6. That no portion of the District is now or ever has been located in a county of
3,000,000 or more inhabitants, a county contiguous to a county with 3,000,000 or
more inhabitants or a county that has held a referendum on the applicability of the
Property Tax Extension Limitation Law of the State of Illinois, as amended
(35 IL,CS 200/18-185 et seq.).
7. That the Daily Ledger is a local, community newspaper with a general circulation
within the City.
8. That all of the news media that have filed a request for notice of the meetings of
the Council pursuant to the Open Meetings Act of the State of Illinois, as amended
(5 II.CS 120/1 et seq.), are as follows: WBYS.
9. That the regular meetings of the Council are held on first and third Tuesdays of
each month at 6:30 o'clock P.M., in the Historic Depot, 1 Depot Road, Canton,
Illinois, within the City, that the Council has given public notice of said schedule of
regular meetings stating the regular dates, times and places of said meetings at the
beginning of each calendar or fiscal year by posting a copy of said public notice at
the principal office of the Council and by supplying copies of said public notice to
all of the newspapers, radio or television stations and other news media that have
filed a request for such notice, and that the Council has made said schedule
available to the public.
10. That the City has an official population of 15,288, and that there are approximately
9,314 legal voters in the City.
11. That no petition has been filed or is now pending praying for the disconnection of
any territory from the present corporate limits of the City.
12. That there is no litigation or controversy pending or threatened and there are no
tax objections pending or threatened questioning or affecting in any manner
whatsoever the corporate existence of the City, the boundaries thereof, the right of
the City to levy taxes for municipal purposes or the title of any of its present
officials to their respective offices.
-2-
IN WITNESS WHEREOF, we hereunto affix our official signatures and the seal of the City,
this 12th day of July, 2004.
Mayor
1
City Cl rk
(SEAT.)
-3-
STATE OF ILLINOIS )
SS
COUNTY OF FULTON )
INDEBTEDNESS CERTIFICATE
We, the undersigned, do hereby certify that we are the duly qualified and acting City Clerk
and City Treasurer, respectively of the City of Canton, Fulton County, Illinois (the "City "), and
as such officials we do further certify that the total aggregate indebtedness of the City, of every
kind and nature and howsoever evidenced or incurred, excluding the proposed Debt Certificates,
Series 2004, does not exceed the total sum of $ ,which said indebtedness is
itemized as follows:
Bonds issued by the City (not including alternate bonds,
funding bonds, revenue bonds, special service area bonds,
tax increment allocation bonds and bonds issued pursuant to
Sections 8-4-1(13) or 8-5-16 of the Illinois Municipal Code,
as amended (the "Code'~) ................................................................ $
Alternate bonds issued pursuant to Section 15 of the Local
Government Debt Reform Act of the State of Illinois, as
amended ........................................................................................... $3, $~/~ 05/
Funding bonds issued pursuant to Sections 8-1-4 and 8-5-2
of the Code ....................................................................................... $
Special service area bonds issued pursuant to the Special
Service Area Tax Law of the State of Illinois, as amended ................ $
Tax increment allocation bonds issued pursuant to
Section 11-74.4-7 of the Code .......................................................... $
"Compliance schedule or order bonds" issued pursuant to
Section 8-4-1(13) of the Code .......................................................... $
Bonds issued pursuant to Section 8-5-16 of the Code ....................... $
Contracts (including all payments on installment purchase
contracts and public utility contracts) ................................................ $~„~, X05
Indebtedness resulting from annexations of territory .......................... $
Judgments ........................................................................................ $
Leases (including all payments on with public building
commission leases) ........................................................................... $
Miscellaneous floating indebtedness .................................................. $
Special Assessments levied against City property .............................. $
Unpaid public benefit judgments ....................................................... $
Other forms of debt (not including warrants issued in
anticipation of the collection of taxes levied) ......................................... C;
all of which appears from the books and records in our official respective care and custody.
IN WITNESS WHEREOF, we hereunto affix our official signatures and the seal of the City,
this 12th day of July, 2004.
Z ~ ~~'~~
City Clerk
(SEAL)
c
City reasu r
-2-
STATE OF ILLINOIS )
SS
COUNTY OF FULTON )
2003 VALUATION CERTIFICATE
I, the undersigned, do hereby certify that I am the duly qualified and acting and County
Clerk of The County of Fulton, Illinois (the "County "); and as such official I do further certify
that the equalized assessed value of all taxable real property located in the County included within
the boundaries of the City of Canton, Fulton County, Illinois, as of the date of this certificate, is
the sum of $ /D11 ~ D~~ ~~ 3 , as last equalized or assessed by the Department of Revenue
of the State of Illinois, for State and County taxes for the year 2003, all as appears from the books
of assessment of the County now in my possession.
IN WITNESS WI~REOF I hereunto affix my official signature and t seal of The County of
Fulton this ~ day of July, 2004.
ounty Clerk
The County of Fulton, Illinois
[SEAL]
STATE OF ILLINOIS )
SS
COUNTY OF FULTON )
CERTIFICATE OF CITY ATTORNEY RE CITY CODE
I do hereby certify that I am the City Attorney for the City of Canton, Fulton County,
Illinois (the "City'. I do further certify that I have reviewed the Code of Ordinances of the City,
the journal of proceedings, books, records, minutes and files of the City and of the City Council
(the "Corporate Authorities ") of the City and that, from such review, I am of the opinion that:
1. The Corporate Authorities have taken no action to modify the provisions of
the Illinois Municipal Code, as amended, with respect to the calling, holding, or giving of
notice of regular or special meetings.
2. The Corporate Authorities have taken no action to modify the provisions of
said Illinois Municipal Code with respect to the introduction and passage of resolutions or
ordinances, except as maybe hereinafter expressly noted.
3. The Corporate Authorities do not require the second reading or laying over
of resolutions or ordinances, except as follows:
The City has a first reading requirement.
4. The Corporate Authorities have taken no action to limit in any way the
powers of the City to incur debt; and there are no special ordinances, resolutions, or other
procedures applicable to the incurrence of debt by the City.
IN WITNESS WHEREOF we have hereunto affixed our official signature this 12th day of
July, 2004.
By
Ronald Weber, City Attorney
INSTALLMENT PURCHASE AGREEMENT for purchase of real or
personal property, or both, for the purpose of undertaking a
redevelopment project, in and for the City of Canton, Fulton
County, Illinois.
THis INSTALLMENT PURCHASE AGREEMENT' (this "Agreement ") made as of the day
of June, 2004 by and between the City Treasurer, as Nominee-Seller (the "Seller', and the City
of Canton, Fulton County, Illinois, a municipality of the State of Illinois (the "City "):
WTTNESSETH
A. The City Council (the "City Council's of the City has determined to enter into an
agreement for demolition services, constituting personal property, in order to undertake a
redevelopment project (collectively, the " 20D4 Service Agreement "), all as previously approved
by the City Council and on file with the City Clerk of the City (the "City Clerk'.
B. Pursuant to the provisions of the Illinois Municipal Code (the "Municipal Code ");
the Local Government Debt Reform Act of the State of Illinois (the "Debt Reform Act's, and, in
particular, the provisions of Section 17 of the Debt Reform Act (the "Installment Purchase
Provisions of the Debt Reform Act "); and all other Omnibus Bond Acts of the State of Illinois; in
each case, as supplemented and amended (collectively "Applicable Law "); the City has the power
to purchase real or personal property through agreements that provide that the consideration for
the purchase may be paid through installments made at stated intervals for a period of no more
than 20 years and has the power to issue certificates evidencing indebtedness incurred under such
agreements.
C. On the 15th day of June, 2004, the City Council, pursuant to Applicable Law and the
need to provide for the 2004 Service Agreement, adopted an ordinance (the "Ordinance "),
authorizing the borrowing of money for the 2004 Service Agreement, the execution and delivery
I-1
of this Agreement to finance same, and the issuance of certificates evidencing the indebtedness so
incurred.
D. The Ordinance is
(a) incorporated herein by reference; and
(b) made a part hereof as if set out at this place in full;
and each of the terms as defined in the Ordinance is also incorporated by reference for use in this
Agreement.
E. The Seller, as nominee as expressly permitted by the Installment Purchase Provisions
of the Debt Reform Act, has agreed to make and acquire the 2004 Service Agreement on the
terms as hereinafter provided.
Now THEREFORE in consideration of the mutual covenants and agreements hereinafter
contained and other valuable consideration, it is mutually agreed between the Seller and the City
as follows:
1. MAKE, ACQUIRE AND CONSTRUCT 2004 SERVICE AGREEMENT
The Seller agrees to make and acquire the 2004 Service Agreement to provide for services
upon real estate owned or to be owned by or upon which valid easements or licenses have been
obtained in favor of the City.
2. CONVEYANCE
The Seller agrees to perform each part of the 2004 Service Agreement to the City and to
perform all necessary work as set out therein and the City agrees to purchase the 2004 Service
Agreement from the Seller and pay for the 2004 Service Agreement the purchase price thereof;
plus the amount of investment earnings which are earned on the amount deposited with the
Treasurer from the sale of the Certificates provided that in no event shall the total aggregate
principal purchase price to be paid pursuant to this Agreement exceed the sum of $1,200,000,
I-2
plus the amount of investment earnings which are earned on the amount deposited with the
Treasurer from the sale of the Certificates.
3. PAY1vIENTS
The payment of the entire sum of said purchase price [net, however, of any such
investment earnings] shall:
(a) be payable in installments due on the dates and in the amounts;
(b) bear interest at the rates percent per annum which interest shall also be
payable on the dates and in the amounts;
(c) be payable at the place or places of payment, in the medium of payment, and
upon such other term;
all as provided for payment of the Certificates in the Ordinance.
4. ASSIGNMENT
Rights to payment of the Seller as provided in this Agreement are assigned as a matter of
law, under the Installment Purchase Provisions of the Debt Reform Act, to the owners of the
Certificates. This Agreement and any right, title, or interest herein, shall not be further assignable.
The Certificates, evidencing the indebtedness incurred hereby, are assignable (registrable) as
provided in the Ordinance.
5. TP.x CovENp,NTs
The covenants relating to the Tax-exempt status of the Certificates, as set forth in the
Ordinance, insofar as may be applicable, apply to the work to be performed and the payments
made under this Agreement.
I-3
6. TITLE
(a) Vesting of Title. Title in and to any part of the 2004 Service Agreement, upon
delivery or as made, during all stages of the making or acquisition thereof, shall and does vest
immediately in the City.
(b) Voiding of Service Agreeement. ff, during the term of this Agreement, all or any
part of the 2004 Service Agreement shall be voided for any reason; then the City shall continue to
make payments as promised herein and in the Certificates and to take such action as it shall deem
necessary or appropriate to ratify the 2004 Service Agreement.
7. LAWFUL CORPORATE OBLIGATION
The City hereby represents, warrants, and agrees that the obligation to make the payments
due hereunder shall be a lawful direct general obligation of the City payable from the corporate
funds of the City and such other sources of payment as are otherwise lawfully available. The City
represents and warrants that the total amount due the Seller hereunder, together with all other
indebtedness of the City, is within all statutory and constitutional debt limitations. The City
agrees to appropriate funds of the City annually and in a timely manner so as to provide for the
making of all payments when due under the terms of this Agreement.
8. GENERAL COVENANT Arm RECITAL
It is hereby certified and recited by the Seller and the City, respectively, that as to each,
respectively, for itself, all conditions, acts, and things required by law to exist or to be done
precedent to and in the execution of this Agreement did exist, have happened, been done and
performed in regular and due form and time as required by law.
9. NO SEPARATE TAX
THE SELLER AND THE CITY RECOGNIZE TART THERE IS NO STATUTORY AUTHORITY
FOR THE LEVY OF A SEPARATE TAX IN ADDTTION TO OTHER TAXES OF THE CITY OR THE LEVY
I-4
OF A SPECIAL TAX UNLIMITED AS TO RATE OR AMOUNT TO PAY ANY OF THE AMOUNTS DUE
HEREUNDER.
10. DEFALJI.T
In the event of a default in payment hereunder by the City, the Seller or any
Certificateholder may pursue any available remedy by suit at law or equity to enforce the payment
of all amounts due or to become due under this Agreement, including, without limitation, an
action for specific performance.
I-5
IN WrINESS WHEREOF the Seller has caused this Installment Purchase Agreement to be
executed and attested, and his or her signature to be attested by the City Clerk of the City, and the
City has caused this Installment Purchase Agreement to be executed by its Mayor, and also
attested by its City Clerk, and the official seal of the City to be hereunto affixed, all as of the day
and year first above written.
SELLER: Signature: ' ~-
Patty Beaird-Franzoni
as Nominee-Seller and the
City Treasurer
ATTEST:
~~
City erk
[SEAL]
CITY OF CANTON, FULTON COUNTY, ILLINOIS
Mayor
ATTEST:
~'
~~
City Jerk
[SEAL]
I-6
STATE OF ILLINOIS )
SS
COUNTY OF FULTON
CERTIFICATE OF INSTALLMENT PURCHASE AGREEMENT FILING
I, the undersigned, do hereby certify that I am the duly qualified and acting City Clerk of
the City of Canton, Fulton County, lllinois (the "City', and as such officer I do hereby certify
that on the i 5 day of June; 2004 there was filed in my office a properly certified copy of that
certain document, executed by the Mayor of the City, attested by me in my capacity as City Clerk,
and further executed, as Nominee-Seller, by the City Treasurer, also attested by me, dated the
15 day of June, 2004, and entitled "INSTALLMENT PURCHASE AGREEMENT for Purchase of real
or personal property, or both, for the purpose of undertaking a redevelopment agreement, in and
for the City of Canton, Fulton County, Illinois"; and supporting the issuance of certain General
Obligation Limited Tax Debt Certificates, Series 2004, of the City; that attached hereto is a true
and complete copy of said Agreement as so filed; and that the same has been deposited in the
official files and records of my office.
IN WITNESS WI-IExEOF I have hereunto affixed my official signature and the seal of the City
of Canton, Fulton County, Illinois at Canton, Illinois, this l.~ day of July, 2004.
~,~ ~~ ~~i
City Clerk
[SEAL]
InstallAgree-Fi lingCert
CERTIFICATE
STATE OF ILLINOIS, )
CITY OF CANTON, ) SS.
COUNTY OF FULTON. )
I, Nancy Whites, City Clerk of the City of Canton, in the City of Canton,
in the County of Fulton and State of Illinois, do hereby certify that as the
City Clerk of the City of Canton, I am the keeper of records, minutes,
ordinances and other books, records and papers of said City, and that the
foregoing is a true and correct copy of:
The minutes of the City Cotmcil meeting of Jtme 15, 2004, City of Canton,
Illinois.
Adopted by the City Council of said City and approved by the Mayor thereof
on the 15t1z_ day of .T,~,P , 20 04
WITNESS my hand and the Corporate Seal of the City of Canton,
Illinois this 1~.~ day of July 20 04
~( /,. .
l ~ ~~ ~ ~ /~,r ,l t .r/1 / YI~~J /
ancy White, City Clerk
(SEAL)
A regulaz meeting of the Canton City Council was held on June 15, 2004 in the Council
Chambers at the Historic Depot, 50 North 4'~ Avenue, Canton, Illinois. _
PLEDGE OF ALLEGIANCE OPENED THE MEETING FOLLOWED BY THE
INVOCATION GIVEN BY NANCY WHITES, CITY CLERK.
Mayor Bohler asked for roll call at 6:30 p.m. Present -Aldermen Larry Sazff, Mazy
Fillingham, Bob Molleck, Elny Ham, Les Cazl, Jim Hartford, Rick Reed, Craig West.
Absent -None.
MINUTES OF JUNE 1~, 2004 COUNCIL MEETING. Motion and second by
Aldermen Molleck/Hartford, the minutes of June 1, 2004 be accepted and placed on file.
Voice vote, motion carried unanimously.
TREASURER'S REPORT. Patty Beaird Franzoni said she has to postpone given out
her report for another week.
BILLS FOR MAY. Motion and second by Aldermen West/Reed, all bills properly
presented be paid. Roll call. AYES -Aldermen West, Reed, Hartford, Cazl. Harn,
Molleck, Fillingham, Sazff. NAYS -None. 8 AYES, 0 NAYS, 0 ABSENT. Motion
carried.
COMMITTEE REPORTS:
Finance.
Council Action
Motion and second by Aldermen Hartford/Cazl, to approve payment of $750 to repair the
Vacuum Pump at the Wastewater Treatment Plant. Discussion. Chuck Jarvis reported
for Supt. Joe Carruthers the repairs came to $750 instead of the original estimated cost of
$3,000. Roll call. Aldermen Saz~ Fillingham, Molleck, Harn, Carl, Hartford, Reed,
West. NAYS -None. 8 AYES, 0 NAYS, 0 ABSENT. Motion carried.
Motion and second by Aldermen Hartford/Sar~ to approve the engagement letter of
Hocker & Fitzjarrald in the amount of $18,500 for the yeaz ended of April 30, 2004. Roll
call. AYES -Aldermen West, Reed, Hartford, Carl, Ham, Molleck, Fillingham, Sarff.
NAYS -None. 8 AYES, 0 NAYS, 0 ABSENT. Motion carried.
Motion and second by Aldermen Hartford/Reed, to approve of pay request # 1 from N.
E. Finch for the lH Project in the amount of $517,500.00. Roll call. AYES -Aldermen
Saris Fillingham, Molleck, Ham, Cazl, Hartford, Reed, West. NAYS -None. 8 AYES,
0 NAYS, 0 ABSENT. Motion carried.
Legal & Ordinance.
Council meeting June 15, 2004
Mayor Bohler mentioned good news for the City of Canton by receiving two $200,000
USEPA grants. They will be used on the S.W. side between Maple and Pine Street where
the Power House used to be. This is due to the efforts of Clark Wilson, David Byerly and
Vandewalle & Associates from all their hazd work in obtaining these two grants.
OLD BUSINESS:
ORDINANCE -AMENDING TITLE 8, CHAPTER 18, SECTION 1, OF THE
CANTON MUNICIPAL CODE RELATING TO GARBAGE DISPOSAL
SYSTEM. Second reading, read by title. Motion and second by Aldermen
Hartford/West, the ordinance be placed on its passage. Roll call. AYES -Aldermen
Sari Fillingham, Molleck, Hazn, Cazl, Hartford, Reed, West. NAYS -None. 8 AYES,
0 NAYS, 0 ABSENT. Motion carried. Ordinance being #1801.
ORDINANCE -AUTHORIZING AND PROVIDING FOR AN INSTALLMENT
PURCHASE AGREEMENT FOR THE PURPOSE OF PAYING A PART OF THE
COST OF A REDEVELOPMENT PROJECT, AND AUTHORIZING AND
PROVIDING FOR THE ISSUE OF $1,200,000 GENERAL OBLIGATION
LIMITED TAX DEBT CERTIFICATES, SERIES 2004, EVIDENCING THE
RIGHTS TO PAYMENT UNDER SUCH AGREEMENT, PRESCRIBING THE
DETAILS OF THE AGREEMENT AND CERTIFICATES, AND PROVIDING
FOR THE SECURITY FOR AND MEANS OF A PAYMENT UNDER THE
AGREEMENT OF THE CERTIFICATES. Second reading, read by title. Motion
and second by Aldermen Sarff/Haztford, to waive the bidding process. Discussion. Ron
Weber said this did not go out in the process of bidding, Mid America National Bank
would provide 3.3% with no principle repayment for 5 years. This allows the borrower
the money. Then the financing would be replaced by revenue bonds when they come
available. Alderman Sarff wanted to no if the $400,000 EPA grant would be applied to
this ordinance? Ron Weber explained that is up to council. Roll call. AYES -
Aldermen West, Reed, Hartford, Cazl, Hare, Molleck, Fillingham, Sarff NAYS -None.
8 AYES, 0 NAYS, 0 ABSENT. Motion carried.
Motion and second by Aldermen Molleck/West, the ordinance be placed on its passage.
Roll ca1L AYES -Aldermen Saz$ Fillingham, Molleck, Ham, Cazl, Hartford, Reed,
West. Ordinance being #1802.
ORDINANCE -AUTHORIZING, DIRECTING AND SETTING THE DATE FOR
THE SALE AT PUBLIC AUCTION OF CERTAIN PERSONAL PROPERTY
OWNED BY THE CITY OF CANTON, AND NO LONGER NEEDED FOR CITY
PURPOSES. Second reading, read by title. Motion and second by Aldermen
WestlReed, the ordinance be placed on its passage. Roll call. AYES -Aldermen West,
3
Council meeting June 15, 2004
Fillingham, Molleck, Harn, Cazl, Hartford, Reed, West. NAYS -None. 8 AYES, 0
NAYS, 0 ABSENT. Motion carried.
The regulaz scheduled council meeting convened into executive session at the time of
6:53 p.m.
The Executive Session for negotiations of Public Works Contract aze on file in the office
of the city clerk for review.
The regulaz scheduled council meeting reconvened from executive session at 8:49 p.m. in
to open session for adjournment.
ADJOURNMENT.
Voice vote, motion
adjourned at 8:50 p.m.
Motion and second by Aldermen Molleck/Fillingham, to adjourn.
carried unanimously. The regulaz scheduled council meeting
Nancy Whi s, City Clerk
APPROVED:
Jerry M. Bohler, Mayor
5
A G E N D A
CANTON CITY COUNCIL
June 15, 2004 6:30 p.m.
PLEDGE OF ALLEGIANCE
INVOCATION
ROLL CALL
MINUTES OF COUNCIL MEETING June 1, 2004
TREASURER'S REPORT
BILLS FOR MAY
COMMITTEE REPORTS:
Finance
Vacuum Pump Repair - WWTP
Audit Engagement Letter - Hocker & Fitzjarrald
Pay request #1 -N.E. Finch for IH Project
Legal & Ordinance
Animal Shelter Agreement
Community & Industrial Development
Negotiations, Grievance & Personnel
COMMUNICATIONS FROM MAYOR BOHLER
Liquor Commissioner Report:
Official Time Out June 26 - 11:00 to 10:00 p.m.
For Canton Freshman Sports Fundraiser
Agreement with Environmental Operations, Inc
Retain Chapman & Cutler -Debt Certificate
OLD BUSINESS:
ORDINANCE -AMENDING TITLE 8, CHAPTER 18, SECTION 1, OF
THE CANTON MUNICIPAL CODE RELATING TO GARBAGE
DISPOSAL SYSTEM.
ORDINANCE -
INSTALLMENT
PAYING A PAR
AUTHORIZING AND PROVIDING FOR AN
PURCHASE AGREEMENT FOR THE PURPOSE OF
T OF THE COST OF A REDEVELOPMENT PROJECT,
~.N
AND AUTHORIZING AND PROVIDING FOR THE ISSUE OF $1,200,000
GENERAL OBLIGATION LIMITED TAX DEBT CERTIFICATES,
SERIES 2004, EVIDENCING THE RIGHTS TO PAYMENT UNDER
SUCH AGREEMENT, PRESCRIBING THE DETAILS OF THE
AGREEMENT AND CERTIFICATES, AND PROVIDING FOR THE
SECURITY FOR AND MEANS OF PAYMENT UNDER THE
AGREEMENT OF THE CERTIFICATES.
ORDINANCE -AUTHORIZING, DIRECTING AND SETTING THE
DATE FOR THE SALE AT PUBLIC AUCTION OF CERTAIN
PERSONAL PROPERTY OWNED BY THE CITY OF CANTON, AND NO
LONGER NEEDED FOR CITY PURPOSES.
NEW BUSINESS:
ORDINANCE -APPROPRIATING FOR ALL CORPORATE PURPOSES
OF THE CITY OF CANTON, FULTON COUNTY, ILLINOIS, FOR THE
FISCAL YEAR BEGINNING MAY 1, 2004, AND ENDING APRIL 30,
2005.
ORDINANCE -DESIGNATING THE INTERNATIONAL HARVESTER
SITE REDEVELOMENT PROJECT AREA.
ORDINANCE -APPROVING THE REDEVELOPMENT PLAN AND
PROJECT FOR THE INTERNATIONAL HARVESTER SITE
REDEVELOPMENT PROJECT AREA.
ORDINANCE -ADOPTING TAX INCREMENT FINANCING FOR THE
CITY OF CANTON, IN CONNECTION WITH THE DESIGNATION OF
THE INTERNATIONAL HARVESTER SITE REDEVELOMENT
PROJECT AREA.
RESOLUTION - ASCERTAINING THE PREVAILING RATE OF
WAGES FOR LABORERS, MECHANICS AND OTHER WORKMEN
EMPLOYED IN ANY PUBLIC WORKS BY THE CITY OF CANTON,
ILLINOIS.
RESOLUTION -CANTON PRIDE COMMITTEE TO HOLD A 4~ OF
JULY PARADE FROM 7:00 P.M. TO 8:00 P.M.
EXECUTIVE SESSION - NEGOTIATIONS, GRIEVANCE &
PERSONNEL - PURPOSE OF DISCUSSING PUBLIC WORKS
CONTRACTS.
STATE OF ILLINOIS )
SS
COUNTY OF FULTON )
CERTIFICATE AND REQUEST OF THE CITY OF CANTON
FULTON COUNTY, ILLINOIS, ON DELTi~ERY OF CERTIFICATES
We, the undersigned, do hereby certify that we are the officers of the City of Canton,
Fulton County, Illinois (the "City "), whose names and offices are, respectively, as follows:
NAME OF OFFICER OFFICE HELD
Jerry M. Bohler Mayor
Nancy S. Whites City Clerk
Patty Beaird Franzoni City Treasurer
A. PURPOSE OF THIS CERTIFICATE
This certificate is given in connection with the delivery by the City of its $1,200,000
General Obligation Limited Tax Debt Certificates, Series 2004 (the "Certificates "). The
Certificates have been issued pursuant to the authorization contained in Ordinance Number 1802
of the City, adopted by the City Council on June 15, 2004 (the "Ordinance "). The Certificates
are being delivered to MidAmerica National Bank, Canton, Illinois (the "Purchaser "). The
Certificates are being authenticated by MidAmerica National Bank, Canton, Illinois (the
"Certificate Registrar "), as certificate registrar and paying agent on the Certificates.
B. EXECUTION OF CERTIFICATES
We the undersigned Mayor and City Clerk (only) have caused the execution of each of the
Certificates by our facsimile signatures, as appearing thereon, in the principal amount as shown
above. The Certificates are dated as of June 15, 2004 (the "Dated Date "); and shall become
finally due and payable (without option of prior redemption) on December 15 of the years and in
the amounts and bearing interest at the rates percent per annum as follows:
YEAR AMOUNT ($) RATE (%)
2009 $1,200,000 3.04
Each Certificate shall bear interest from the later of its Dated Date or from the most recent
interest payment date to which interest has been paid or duly provided for, until the principal
amount of such Certificate is paid or duly provided for, such interest (computed upon the basis
over a 360-day year of twelve 30-day months) being payable on June 15 and December 15 of each
year commencing December 15, 2004. We have executed each of the Certificates in the manner
and capacity indicated by our signatures and the titles subscribed hereto. We aze now and were at
the time of the adoption of the Ordinance and have continuously in such period been the duly
chosen, qualified and acting officers indicated by said titles. There has been impressed on each of
the Certificates the official seal or facsimile thereof of the City.
C. CITY DOCUMENTS; AUTHENTICATION
1. The Ordinance was adopted on June 15, 2004; and the record of proceedings of the
Corporate Authorities on said date does properly reflect due adoption of the Ordinance (which
ordinance and meeting may be referred to, collectively, as the "City Proceedings "). The
Ordinance authorized each of the following documents or instruments to be delivered by the City
in connection with the issuance of the Certificates, all of which, as executed and delivered by the
proper officers of the City, aze in form as authorized, enumerated as follows;
DOCUMENT
DATE
OTHER SIGNATORY
PARTY OR PARTIES
Installment Purchase Agreement June 15, 2004 City Treasurer,
(the "Agreement ") as Nominee Seller
All of the aforesaid are herein collectively referred to as the "City Documents "
2. We aze (one or more) the persons signatory to the City Documents; we were on the
date or dates of the execution of the City Documents and aze on the date hereof the duly elected
-2-
and qualified incumbents of the offices of the City as set forth therein and herein; and the
signatures appearing at the right of our respective names at the end of this Certificate are our
genuine signatures.
3. The City has duly authorized, executed, and delivered by all necessary action the
Certificates and the City Documents; and as of the date hereof, each is in full force and effect and
each constitutes the valid, binding, and enforceable obligation of the City; and the City is entitled
to the benefits of the same. The City has authorized by all necessary action the execution,
delivery, receipt, and due performance of the Certificates and the City Documents and any and all
such other agreements and documents as may be required to be executed, delivered, and received
by the City in order to carry out, give effect to, and consummate the transaction contemplated by
the Certificates, the Ordinance, and the City Documents. No other consent, approval,
authorization, or order of any court or governmental agency or body is required for the issuance,
delivery, or sale of the Certificates or the consummation of the other transactions effected or
contemplated in or by the Certificates, the Ordinance, and the City Documents, except such as
may be required under the "Blue Sky" or other securities laws or regulations as may be required
in connection with the offer and sale of the Certificates by the Purchaser.
4. The Seal affixed to this Certificate and Request and which has been affixed to the
Certificates and the City Documents (where required) is the legally adopted, proper, and only
official corporate seal of the City.
5. All of the conditions and agreements provided in the Ordinance and the City
Documents to be satisfied or performed by the City at or prior to the issuance and sale of the
Certificates have been satisfied or performed in the manner and with the effect contemplated
therein.
-3 -
D. NON-LITIGATION, NO BREACH OF OBLIGATION AND NO DEFAULT
1. No controversy or litigation is threatened or pending in any court; no referendum or
public vote is threatened or pending; and no action, suit, inquiry, investigation, or proceeding at
law or in equity before or by any court, governmental agency, authority, body, board, or arbitrator
is threatened or pending (a) seeking to prohibit, restrain, or enjoin the execution of the City
Documents or the issuance, sale, or delivery of the Certificates or the payment, collection, or
application of the revenues or taxes pledged or to be pledged to pay the principal of and interest
on the Certificates or the pledge thereof or the expenditure of the Certificate proceeds; (b) in any
way questioning or affecting the validity of the Ordinance or any of the City Documents or any
proceedings taken by the City with respect to the foregoing; {c) questioning or contesting the
City's creation, organization, or corporate existence, the titles to office of any of its officers. or its
power to engage in any of the transactions contemplated by the Ordinance, the other City
Proceedings relating to the Certificates, or to levy or impose real estate taxes for municipal
purposes; (d) questioning the exemption of interest on the Certificates from federal income
taxation; or (e) in any way contesting or affecting the execution or delivery by the City of the
Certificates or the City Documents.
2. The City is not in breach of or default under any applicable law or administrative
regulation of the State of Illinois or the United States of America, or any applicable judgment or
decree, or any loan agreement, note, regulation, or other agreement or instrument to which the
City is a party or is otherwise subject, which breach or default would in any way materially
adversely affect the authorization or issuance and delivery of the Certificates or the City
Documents; and no event has occurred and is continuing which, with the passage of time or the
giving of notice, or both, would constitute such a breach or default; and the execution and
delivery of the City Documents and the Certificates, and the adoption of the Ordinance, and
-4-
compliance with the respective provisions thereof, will not conflict with or constitute such a
breach or default.
3. Upon the issuance of the Certificates, (a) no event of default exists under the
Agreement or the Ordinance upon the part of the City, and (b) no event which with notice or with
lapse of time or both would become an event of default has occurred.
E. RECEIPT
1. Regarding receipt of funds for the Certificates, the City, by the undersigned City
Treasurer, has received from the Purchaser the purchase price of the Certificates as follows:
ITEM
Principal (Par)
Accrued Interest
Total
AMOUNT ($)
1,200,000.00
3,040.00
1.203.040.00
in compliance with the Purchase Agreement.
2. The amounts received from the sale of the Certificates will be deposited under and
used pursuant to the Agreement as described in the Ordinance.
3. Simultaneously and as a part of the same transaction as the issue and delivery of the
Certificates, the undersigned Treasurer deposited the proceeds of sale of the Certificate as
follows:
PURPOSE
To pay interest on the
Certificates
To acquire the property under
the Agreement
TOTAL
TO FUND AMOUNT ($)
Certificate Fund as created under 3,040
the Ordinance
Project Fund as created under the 1,200,000
Ordinance
1 203 040
-5-
F. OTHER FINANCIAL REPRESENTATIONS
The total aggregate indebtedness of the City, howsoever evidenced and howsoever
incurred, including the Certificates, does not exceed the sum of $ ,which is not
greater than any lawful limitation for the City [number should equal the total indebtedness figure
on the indebtedness certificate].
G. REQUEST
Pursuant to the provisions of the Ordinance, the Certificate Registrar is hereby requested
to authenticate the Certificates in accordance with the Ordinance and deliver the Certificates to
the Purchaser.
H. NO CONFLICT OF INTEREST
No person holding any office of the City, either by election or appointment, is in any
manner financially interested, either directly in his own name or indirectly in the name of any other
person, association, trust or corporation, in the transaction effected by the Purchase Agreement.
I. NON-ARBITRAGE AND TAX EXEMPTION
All of the certifications, conclusions, expectations, representations and statements made
and set forth by the Corporate Authorities in Section 15 of the Ordinance are still reasonable and
true; that the foregoing certification is based in part upon the amounts set forth in said section of
the Ordinance having actually been received and paid into the various funds and accounts of the
City as set forth in said section; that the undersigned have reviewed the facts, estimates and
circumstances in existence on the date hereof and such facts, estimates and circumstances,
together with the expectations of the City as to future events, are set forth in summary form in
said section; that said facts and estimates are true and are not incomplete in any material respect;
and that such expectations are reasonable and there are no other facts, estimates or circumstances
that would materially change such expectations.
-6-
1. REPRESENTATIONS INCONNECTION WITH SALE OF CERTIFICATES
We do further certify that to the best of our knowledge and belief all Official Statements,
Notices of Sale and other documents, information or materials, together with any supplements
thereto, distributed and all representations made by the City and by its officials in any manner
whatsoever in connection with the sale of the Certificates were at all times and are now true and
correct in all material respects and did not at any time and do not now contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made
therein, in light of the circumstances under which they were made, not misleading; that the City
has duly performed all of its obligations under the Ordinance to be performed on or prior to the
date hereof; and that all representations and warranties of the City contained in all contracts
entered into by the City providing for the sale of the Certificates are true and correct on and as of
the date hereof as if made at the date hereof and the City has complied with all of the agreements
and satisfied all the conditions on its part to be performed or satisfied prior to the date hereof.
K. CONTINUING DISCLOSURE UNDERTAKING
We do further certify that the City is in compliance with each and every undertaking
previously entered into by it pursuant to Rule 15c2-12 adopted by the Securities and Exchange
Commission under the Securities Exchange Act of 1934.
-7-
WITNESS
IN WcrNESS WHEREOF we have hereunto affixed our official signatures and the seal of the
City this 15th day of July, 2005.
TITLE
Mayor, City of Canton,
Fulton County, Illinois
SIGNATURE
City Clerk, City of Canton,
Fulton County, Illinois
City Treasurer, City of Canton,
Fulton County, Illinois
[SEAL]
-8-
SIGNATURE IDENTIFICATION
I hereby certify that I am ~%~-c1.~1,,.~-~: U .~-~ ~ ~~-,~.~ of MidAmerica National
Bank, Canton, Illinois, and that I am personally acquainted with the officers whose signatures
appear above, and that I know they are now the duly qualified and acting officials of the City, as
indicated by the titles appended to said signatures, and that I hereby identify said signatures,
together with those facsimiles as appearing on the above-described Certificates, as being in all
respects true and genuine.
IN WITNESS WHEREOF I have hereunto subscribed my official signature and impressed
hereon my seal as of the date subscribed to the foregoing certificate.
~;
[AFFIX BANK SEAL HERE]
-9-
i
FROEHLING~ WEBER & EVANS
ATTORNEYS AT LAW
Ralph Froehling
Ronald J. Weber
Michael E. Evans
Nancy A. Schell
Susan M. Maxwell
July 15, 2004
City Council
City of Canton
Fulton County, Illinois
Chapman and Cutler LLP
Chicago, Illinois
Ladies and Gentlemen:
167 West Elm Street
Canton, Illinois 61520
(309) 647-6317
Fax (309) 647-6350
www.fwelaw.com
MidAmerica National Bank
Canton, Illinois
I am the attorney for the City of Canton, Fulton County, Illinois (the "City "), and in
connection with the issuance on this date by the City of its $1,200,000 General Obligation
Limited Tax Debt Certificates, Series 2004 (the "Certificates "), I have examined the public
records, proceedings, and documents of the City in connection with the issuance of the
Certificates which I consider necessary for the purpose of this opinion, including the following:
(a) Ordinance Number 1802 (the "Ordinance "), duly adopted by the City
Council of the City (hereinafter "Corporate Authorities ") on the 15th day of June, 2004,
and the minutes of the meeting of the Corporate Authorities showing the adoption of
same (collectively the Ordinance and minutes so described being "City Proceedings ");
(b) The following document of the City as authorized, described and defined in
the Ordinance:
INSTALLMENT PURCHASE AGREEMENT for purchase of real
or personal property, or both, for the purpose of
undertaking a redevelopment project, in and for the City of
Canton, Fulton County, Illinois.
as executed by the Mayor and City Clerk of the City, as Purchaser, and the Treasurer of
the City, as Nominee-Seller, together with a "Certificate of Installment Purchase
Agreement Filing," as executed by the City Clerk (said agreement and filing certificate,
collectively, the "City Documents ").
~'
Based upon the foregoing and upon such other information and documents furnished to
me as I believe necessary to enable me to render this opinion, I am of the following opinion:
1. The City is a duly organized and operating municipality and unit of local
government of the State of Illinois, operating, among other laws, under the provisions of
the Illinois Municipal Code, as amended, the Open Meetings Act, as amended, and the
Local Government Debt Reform Act, as amended (collectively, "Illinois Law ").
2. The City Proceedings are presently in full force and effect and have not been
repealed or rescinded or amended; and the Corporate Authorities have not adopted any
other ordinance, resolution, or other proceeding affecting in any manner the procedures
for or the issuance of the Certificates.
3. The City has no special ordinances of limitation or procedural ordinance,
rule, or order relating to the issuance of general obligation corporate purpose bonds,
notes, or certificates for corporate or refunding purposes without referendum; and there is
no City-imposed limitation upon the amount of its existing debt different in any way than
Illinois Law.
4. The City Proceedings were held in compliance with Illinois Law and
applicable City procedures.
5. Each of the City Documents was duly authorized in the Ordinance and
(where applicable) has been duly executed and delivered by proper officers of the City as
so authorized, and assuming, in the case of multiparty documents, the due authorization,
execution, and delivery by the other parties thereto, constitutes the valid and binding
agreement of the City in accordance with its terms.
6. After due inquiry of appropriate City officials and agents and to the best of
our knowledge and belief, (a) there is no action, suit, proceeding, or investigation, at law
or in equity, before or by any court or any governmental agency or public board or body,
pending against the City or, to our knowledge, threatened against the City, to restrain or
enjoin, or threatening or seeking to restrain or enjoin, the issuance, sale, or delivery of the
Certificates or the collection of taxes or other amounts pledged or to be pledged to pay
the Certificates or in any way contesting or affecting the validity of the Certificates or in
any way questioning or affecting (1) the City Proceedings; (2) the validity or
enforceability of any provision of the Certificates or any of the City Proceedings; (3) the
authority of the City to impose or collect the pledged taxes or other funds pledged to the
payment of the Certificates; or (4) the legal existence of the City, the right of its officers
to their offices, the City's authority to perform its obligations pursuant to the City
Proceedings or with respect to the Certificates or to consummate any of the transactions
to which it is or is to be a party as contemplated by the City Proceedings, or the City
Documents; and (b) there is no action, suit, proceeding, or investigation, at law or in
equity, before or by any court or any governmental agency or public board or body,
pending against the City or, to our knowledge, threatened against the City, involving any
-~-
of the property or assets within the City which may result in any material adverse change
in the revenues, assets, or the financial condition of the City.
7. Upon due inquiry of City officials and agents, to the best of our knowledge
and belief, there is no action, suit, proceeding, or investigation at law or in equity before
or by any court, public board, or body pending, threatened against, or affecting the City
wherein an unfavorable decision, ruling, or finding would in our judgment in any way
materially and adversely affect the transactions described in or contemplated by any of the
City Proceedings or City Documents or the validity or enforceability of the City
Documents or the Certificates.
8. There is no lien or encumbrance on any of the taxes or the other funds
pledged to the payment of the Certificates that is senior to the claims of the holders of the
Certificates; there is to our knowledge no existing, pending, threatened, or anticipated
event or circumstance which might give rise to any lien or encumbrance on any such
taxes or the other funds pledged to the payment of the Certificates which would be senior
to the claims of the holders of the Certificates.
9. No additional approval, permit, consent, authorization, or order from any
court or any governmental or public agency, authority, or person not already obtained is
required with respect to the authority of the City in connection with the authorization,
issuance, and sale to the purchaser of the Certificates or for the adoption or effectiveness
of any of the City Proceedings or City Documents.
10. As of the date of this opinion, the adoption of the City Proceedings, the
execution of delivery by the City of the Certificates and the City Documents and
compliance by the City with the provisions thereof under the circumstances contemplated
thereby, do not and will not violate any applicable judgment, order, or regulations of any
court or of any public or governmental agency or authority of the State of Illinois and will
not conflict with or result in a breach of any of the terms and provisions of or constitute a
default under any existing law, court or administrative regulation decree, order, or any
agreement, indenture, mortgage, lease, or other instrument to which the City is subject or
by which it is or may be bound.
Very truly yo rs,
By
Ronald Weber, City Attorney
-3-
STATE OF ILLINOIS )
SS
COUNTY OF FULTON )
CLOSING CERTIFICATE OF THE CITY
We, the undersigned, do hereby certify that we are the duly qualified and acting Mayor
and City Clerk, respectively, of the City of Canton, Fulton County, Illinois (the "City "), and as
such officials we do further certify as follows:
1. The representations and warranties of the City contained in the Installment Purchase
Agreement, dated as of June 15, 2004 (the "Agreement "), by and between the City and the
Treasurer of the City, as Nominee-Seller (the "Seller ") are true and correct in all material
respects at and as of the date hereof with the same effect as if made on this date.
2. In connection with the issuance of its General Obligation Limited Tax Debt
Certificates, Series 2004 (the "Certificates "), to MidAmerica National Bank, Canton, Illinois,
(the "Bank "), the City has furnished the Bank all material facts concerning the City, the
Agreement and the Certificates, including the audits and financial reports concerning the City,
necessary to insure that the Bank was able to make a fully informed investment decision on the
Certificates.
3. The City has carefully and conservatively analyzed its current and future financial
resources and has concluded that such financial resources are and will be completely adequate to
pay the principal of and interest on the Certificates when the same become due without impairing
in any respect whatsoever the ability of the City to provide the usual and customary municipal
services in and for the City.
4. The City has complied with all the agreements and satisfied all the conditions on its
part to be performed or satisfied on or prior to the date hereof as set forth in or required by the
Agreement.
IN WITNESS WHEREOF, we hereunto affix our official signatures and the seal of the City,
this 15th day of July, 2004.
~- ~
Mayor
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City C k
[Seal]