HomeMy WebLinkAboutOrdinance #1451C E R T I P I CAT E
STATE OF ILLINOIS,
CITY OF CANTON,
COUNTY OF FULTON.
SS.
I, Nancy Whites, City
County of Fulton and State
as the City Clerk of the
records, minutes, ordinance:
of said City, and that the
of
Clerk of the City of Canton, in the
of Illinois, do hereby certify that
City of Canton, I am the keeper of
s and other books, records and papers
foregoing is a true and correct copy
ORDINANCE N0. 1451
AN ORDINANCE AUTHORIZING THE ISSUANCE OF UP TO $1,800,000
GENERAL OBLIGATION WATER?~ARKS AND SEWERA('E BOidDS (ALTERNATE
REVENUE SOURC~E),SERIES 1995, OF 'THE CITY OF CANTON, FUL1tiN
OOUNTY, ILLIlQOIS, PROVIDING THE DETAILS OF SUCH BONDS AND FOR
AN ALTERNATE REVENUE SOURCE AND THE LEVY OF DIRECT ANNiTAL TA}~S
SUFFICIENT TO PAY 'THE PRINCIPAL OF AND INTEREST OD1 SUCH BONDS,
AND RELATED MAZZ'ER.S .
adopted by the City Council of said City and approved by the
MayorP~her~eof on the 7th day of February
19 9~
WITNESS my hand and the Corporate Seal of the City of Canton,
Illinois this 21st day of March 199~,~_.
:;
rE
(Nao~cy Whites), City Clerk
(S E A L)
Closing Item No. 1
STATE OF ILLINOIS )
COUNTY OF FULTON ) SS.
CITY OF CANTON )
CERTIFICATION OF ORDINANCE
I, the undersigned, do hereby certify that I am the
duly selected, qualified and acting Clerk of the City of Canton,
Fulton County, Illinois (the "Issuer"), and as such official I am
the keeper of the records and files of the Issuer and of its City
Council (the "Corporate Authorities").
I do further certify that the attached constitutes a
full, true and complete excerpt from the proceedings of the
regular m~ebting of the Corporate Authorities held on the ~~
day of e ~~' 1995, insofar as the same relates to the
adoption of Ordinance No. 1L~51 entitled:
AN ORDINANCE AUTHORIZING THE ISSUANCE OF UP TO $1,800,000 GENERAL
OBLIGATION WATERWORKS AND SEWERAGE BONDS (ALTERNATE REVENUE
SOURCE), SERIES 1995, OF THE CITY OF CANTON, FULTON COUNTY,
ILLINOIS, PROVIDING THE DETAILS OF SUCH BONDS AND FOR AN
ALTERNATE REVENUE SOURCE AND THE LEVY OF DIRECT ANNUAL TAXES
SUFFICIENT TO PAY THE PRINCIPAL OF AND INTEREST ON SUCH BONDS,
AND RELATED MATTERS,
a true, correct and complete copy of which ordinance (the
"Ordinance") as adopted at such meeting appears in the transcript
of the minutes of such meeting and is hereto attached. The
Ordinance was adopted and approved by the vote and on the date
therein set forth.
I do further certify that the deliberations of the
Corporate Authorities on the adoption of such Ordinance were
taken openly, that the adoption of such Ordinance was duly moved
and seconded, that the vote on the adoption of such Ordinance was
taken openly and was preceded by a public recital of the nature
of the matter being considered and such other information as
would inform the public of the business being conducted, that
such meeting was held at a specified time and place convenient to
the public, that notice of such meeting was duly given to all of
the news media requesting such notice, that such meeting was
called and held in strict compliance with the provisions of the
open meeting laws of the State of Illinois, as amended, and the
Illinois Municipal Code, as amended, and that the Corporate
Authorities have complied with all of the applicable provisions
of such open meeting laws and such Code and their procedural
rules in the adoption of such Ordinance.
IN WITNESS WHEREOF, I hereunto affix my official
signature and the seal of the City of Canton, Fulton County,
Illinois, this ~~ day of February 1995.
~~
(SEAL) Clerk
ORDINANCE NO.
~ i. r ~
AN ORDINANCE AUTHORIZING THE ISSUANCE OF UP
TO $1,800,000 GENERAL OBLIGATION WATERWORKS
AND SEWERAGE BOND5 (ALTERNATE REVENUE
SOURCE), SERIES 1995, OF THE CITY OF CANTON,
FULTON COUNTY, ILLINOIS, PROVIDING THE
DETAILS OF SUCH BONDS AND FOR AN ALTERNATE
REVENUE SOURCE AND THE LEVY OF DIRECT ANNUAL
TAXES SUFFICIENT TO PAY THE PRINCIPAL OF AND
INTEREST ON SUCH BONDS, AND RELATED MATTERS
WHEREAS, the City of Canton, Fulton County, Illinois
(the "Issuer"), is a non-home rule municipality duly established
and operating its municipally-owned waterworks and sewerage
system (the "System") in accordance with the provisions of
Division 139 of Article 11 of the Illinois Municipal Code
(Section 5/11-139-1 et seg. of Chapter 65 of the Illinois
Compiled Statutes), as supplemented and amended (the "Revenue
Source Act"); and
WHEREAS, the City Council of the Issuer (the "Corporate
Authorities") has determined that it is advisable, necessary and
in the best interests of the Issuer's public health, safety and
welfare to undertake a project providing for the acquisition,
construction and installation of a sludge press and a sewer plant
building for the sludge press, and related improvements,
facilities and costs (the "Project"), pursuant to the plans and
specifications therefor prepared by Crawford, Murphy & Tilly,
Inc., Springfield, Illinois, consulting engineers, and now on
file with the City Clerk; and
WHEREAS, the total estimated cost of the Project,
including related issuance costs and other expenses, is to be
paid from proceeds of the hereinafter described alternate bonds,
being general obligation in lieu of revenue bonds as authorized
by Section 15 of the Local Government Debt Reform Act (Section
350/15 of Chapter 30 of the Illinois Compiled Statutes), but
nevertheless expected to be paid from the revenues of the System,
as further provided in this ordinance, rather than by any levy of
taxes, and any balance from other funds legally available for
such purpose; and
WHEREAS, the estimated cost to provide for the Project,
and related legal, financial, bond discount, printing and
publication costs, and other expenses preliminary to and in
connection with the Project is anticipated not to exceed the
amount presently anticipated and planned to be paid from proceeds
of the hereinafter described Bonds; and
WHEREAS, Ordinance No. 1446, AN ORDINANCE AUTHORIZING
THE ISSUANCE OF UP TO $1,800,000 WATERWORKS AND SEWERAGE REVENUE
BONDS AND ALTERNATE REVENUE SOURCE BONDS (IN LIEU OF SUCH REVENUE
BONDS) OF THE CITY OF CANTON, FULTON COUNTY, ILLINOIS, TO FINANCE
WATERWORKS AND SEWERAGE SYSTEM IMPROVEMENTS (the "Preliminary
Ordinance"), passed and approved December 20, 1994, together with
separate notices of intent: (i) to issue sewerage revenue bonds
and (ii) to issue alternate bonds (being general obligation in
lieu of revenue bonds) were published on December 27, 1994, in
the Daily Ledger, a newspaper published and of general
circulation in the corporate limits of the Issuer; and
WHEREAS, more than thirty (30) days have elapsed since
the date of publication of the Preliminary Ordinance and such
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notices described above and the Issuer has received no petition
in connection with the Bonds or the Project, a form of petition
therefor being at all relevant times available in the office of
the Clerk; and
WHEREAS, the Issuer has insufficient funds to pay a
portion of the costs of the Project and, therefore, must borrow
money and issue general obligation bonds (waterworks and sewerage
alternate revenue source), under the Preliminary Ordinance and
this ordinance, in evidence thereof up to the aggregate principal
amount of $1,800,000 for such purposes; and
WHEREAS, pursuant to and in accordance with the Revenue
Source Act and the provisions of Section 15 of the Local
Government Debt Reform Act (Section 350/15 of Chapter 30 of the
Illinois Compiled Statutes), as supplemented and amended, the
Preliminary Ordinance and this ordinance, the Issuer is
authorized to issue its General Obligation Waterworks and
Sewerage Bonds (Alternate Revenue Source), Series 1995, up to the
aggregate principal amount set forth above (the "Bonds"), for the
purpose of providing funds to pay a portion of the costs of the
Project; and
WHEREAS, for convenience of reference only this
ordinance is divided into numbered sections with headings, which
shall not define or limit the provisions hereof, as follows:
Page
Preambles 1
Section 1. Definitions. 4
Section 2. Incorporation of Preambles, Authority,
Purpose and Useful Life. 8
Section 3. Authorization and Terms of Bonds 8
Section 4. Execution and Authentication 13
Section 5. Transfer, Exchange and Registration. 15
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Section 6.
Section 7.
Section 8.
Section 9.
Section 10.
Section 11.
Section 12.
Section 13.
Section 14.
Section 15.
Section 16.
Section 17.
Section 18.
Section 19.
Section 20.
Section 21.
Section 22.
Section 23.
Bond Registrar and Paying Agent. 17
Alternate Bonds; General Obligations 19
Form of Bonds . 22
Levy and Extension of Taxes. 31
Purchase Agreement 34
Waterworks and Sewerage Fund 34
Bond Proceeds Account. 38
Issuance of Additional Bonds 40
Arbitrage Rebate 41
Investment Regulations 42
Non-Arbitrage and Tax-Exemption. 43
Further Assurances and Actions 48
General Covenants. 49
Ordinance to Constitute a Contract 52
Severability and No Contest. 53
Bank Qualified Bonds 53
Conflict 54
Effective Date 54
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF
THE CITY OF CANTON, FULTON COUNTY, ILLINOIS, as follows:
Section 1. Definitions. Certain words and terms used
in this ordinance shall have the meanings given them herein,
including above in the preambles hereto, and the meanings given
them in this Section 1, unless the context or use clearly
indicates another or different meaning is intended. Certain
definitions are as follows:
"Act" means, collectively, the Local Government Debt
Reform Act (Section 350/1 et s~ce of Chapter 30 (and particularly
Section 350/15 thereof) of the Illinois Compiled Statutes, as
supplemented and amended, and Division 139 of Article 11 of the
Illinois Municipal Code (Section 5/11-139-1 et seq. of Chapter 65
of the Illinois Compiled Statutes), as supplemented and amended
(the "Revenue Source Act"), including, without limitation, by the
Registered Bond Act, the Illinois Bond Replacement Act and the
Bond Authorization Act.
-4-
"Alternate Bonds" means "alternate bonds" as described
in Section 15 of the Local Government Debt Reform Act (Section
350/15 of Chapter 30 of the Illinois Compiled Statutes), and
includes expressly 1989 Bonds and the Bonds.
"Bond" or "Bonds" means the Issuer's General Obligation
Waterworks and Sewerage Bonds (Alternate Revenue Source), Series
1995, authorized to be issued by this ordinance, in the aggregate
principal amount of $1,800,000.
"Code" means the Internal Revenue Code of 1986, as
amended, and includes related and applicable Income Tax
Regulations promulgated by the Treasury Department.
"Corporate Authorities" means the City Council of the
Issuer.
"Fiscal Year" means the twelve-month period
constituting the Issuer's fiscal year, not inconsistent with
applicable law.
"Fund" means the Waterworks and Sewerage Fund
continued, created and established, as the case may be, under
this ordinance.
"Gross Revenues" means all income .from whatever source
derived from the System, including; (i) investment income; (ii)
connection, permit and inspection fees and the like; and (iii)
penalties and delinquency charges, but excluding expressly (a)
nonrecurring income from the sale of real estate; (b)
governmental or other grants; (c) advances or grants made to or
from the Issuer; (d) capital development, reimbursement, or
recovery charges and the like; (e) annexation or preannexation
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charges; and (f) as otherwise determined in accordance with
generally accepted accounting principles for local government
funds.
"Issuer" means the City of Canton, Fulton County,
Illinois.
"Junior Bond" means any Outstanding bond or Outstanding
bonds payable from the Junior Debt Service Account of the Fund,
and includes expressly the Bonds.
"Net Revenues" means Gross Revenues minus Operation and
Maintenance Expenses.
"Operation and Maintenance Expenses" means all expenses
of operating, maintaining and routine repair of the System,
including wages, salaries, costs of materials and supplies,
power, fuel, insurance and related services; but excluding debt
service, depreciation, or any reserve requirements, and otherwise
as determined in accordance with generally accepted accounting
principles for local government enterprise funds.
"Outstanding", when used with reference to any bond,
means any bond which is outstanding and unpaid; provided,
however, such term shall not include bonds: (i) which have
matured and for which moneys are on deposit with proper paying
agents, or are otherwise properly available, sufficient to pay
all principal and interest thereof, or (ii) the provision for
payment of which has been made by the Issuer by the deposit in an
irrevocable trust or escrow of funds of direct, full faith and
credit obligations of the United States of America, the principal
and interest of which will be sufficient to pay at maturity or as
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called for redemption all the principal of and applicable premium
on such Bonds, and will not result in the loss of the exclusion
from gross income of the interest thereon under Section 103 of
the Code.
"Parity Bonds" means bonds or any other obligations
which share ratably and equally in the earnings of the System
with either the Senior Bonds or the Junior Bonds, as set forth
and provided for in any such ordinance authorizing the issuance
of any such Parity Bonds.
"Pledged Revenues" means the Net Revenues of the
System, constituting "enterprise revenues" under the Local
Government Debt Reform Act.
"Purchase Agreement" means the written offer and
commitment of the Purchaser to purchase the Bonds.
"Purchaser" means the The National Bank of Canton, with
its principal office in Canton, Illinois, the purchaser in
connection with .the Bonds, and including any associated
purchasers.
"Qualified Investments" means legal investments of the
Issuer under applicable law.
"Senior Bond" means any Outstanding bond or Outstanding
bonds payable from either (i) the Debt Service Account of 1989
under the Series 1989 Bond Ordinance or ( ii ) after there are no
Series 1989 Bonds outstanding, the Waterworks and Sewerage
Interest and Redemption Account of the Fund created by this
ordinance.
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"Series 1989 Bonds" the outstanding principal balance
of the Issuer's $300,000 initial principal amount General
Obligation Bonds (Alternate Revenue Source), Series 1989.
"Series 1989 Bond Ordinance" means the Issuer's
authorizing ordinance pursuant to which the Series 1989 Bonds are
issued.
Section 2. Incorporation of Preambles, Authority,
Purpose and Useful Life. The Corporate Authorities hereby find
that all the recitals contained in the preambles and recitals to
this ordinance are true, complete and correct, and hereby
incorporate them into this ordinance by this reference thereto.
This ordinance is adopted pursuant to the Constitution and
applicable laws of the State of Illinois, including the Act, for
the purpose of paying a portion of the costs of the Project and
costs of issuance of the Bonds. The Corporate Authorities hereby
determine the period of usefulness of the System and the Project
to be not less than fifteen (15) years from the expected date of
delivery of the Bonds.
Section 3. Authorization and Terms of Bonds. To meet
all or a part of the estimated cost of the Project, there is
hereby appropriated the sum of $1,800,000, to be derived from the
proceeds of the Bonds. For the purpose of financing such
appropriation, the Bonds of the Issuer shall be issued and sold
in the aggregate principal amount set forth above, shall each be
designated "General Obligation Waterworks and Sewerage Bond
(Alternate Revenue Source), Series 1995", and shall be issuable
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in the denomination of $5,000 each or any authorized integral
multiple thereof.
(a) General Terms. The Bonds shall be numbered
consecutively from 1 upwards in order of their issuance and may
bear such identifying numbers or letters as shall be useful to
facilitate the registration, transfer and exchange of the Bonds.
Unless otherwise determined in an order to authenticate the Bonds
(in any event to be as of or after February 1, 1995, and as of or
before the date or dates of the issuance and sale thereof and
acceptable to the Purchaser), each Bond shall be dated February
15, 1995. The Bonds are hereby authorized to bear interest at
the rates percent per annum set forth below and shall mature on
December 15 of the years and in the principal amount in each
year, as follows:
Principal Interest
Year Amount($) Rate (~)
1995 80,000 5.50
1996 85,000 5.60
1997 85,000 5.75
1998 90,000 5.90
1999 95,000 6.00
2000 105,000 6.10
2001 110,000 6.15
2002 115,000 6.25
2003 120,000 6.35
2004 130,000 6.45
2005 140,000 6.55
2006 145,000 6.66
2007 155,000 6.75
2008 165,000 6.90
2009 180,000 7.00
Each Bond shall bear interest from its date, or from
the most recent interest payment date to which interest has been
paid, computed on the basis of a 360-day year consisting of
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twelve 30-day months, and payable in lawful money of the United
States of America semiannually on each June 15 and December 15,
commencing June 15, 1995, at the rates percent per annum herein
provided. The principal of and premium, if any, on the Bonds
shall be payable in lawful money of the United States of America
upon presentation and surrender thereof at the principal
corporate trust office of the financial institution designated in
this ordinance to act as the Paying Agent for the Bonds
(including its successors, the "Paying Agent"). Interest on the
Bonds shall be payable on each interest payment date to the
registered owners of record appearing on the registration books
maintained by the financial institution designated in this
ordinance to act as the Bond Registrar on behalf of the Issuer
for such purpose (including its successors, the "Bond
Registrar"), at the principal corporate trust office of the Bond
Registrar as of the close of business on the first (1st) day of
the calendar month of the applicable interest payment date.
Interest on the Bonds shall be paid by check or draft mailed by
the Paying Agent to such registered owners at their addresses
appearing on the registration books.
(b) Redem tion. Bonds maturing on and after December
15, 1996, shall be subject to redemption prior to maturity on
June 15, 1996, and on any date thereafter, as a whole or in part,
in inverse order of maturity, at a redemption price of par, plus
accrued interest to the date fixed for redemption.
In the event of the redemption of less than all the
Bonds of like maturity, the aggregate principal amount thereof to
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be redeemed shall be $5,000 or an integral multiple thereof and
the Bond Registrar shall assign to each Bond of such maturity a
distinctive number for each $5,000 principal amount of such Bond
and shall select by lot from the numbers so assigned as many
numbers as, at $5,000 for each number, shall equal the principal
amount of such Bonds to be redeemed. The Bonds to be redeemed
shall be the Bonds to which were assigned numbers so selected;
provided that only so much of the principal amount of each Bond
shall be redeemed as shall equal $5,000 for each number assigned
to it and so selected.
The Issuer shall deposit with the Paying Agent an
amount of money sufficient to pay the redemption price of all the
Bonds or portions of Bonds which are to be redeemed on the
redemption date, together with interest to such redemption date,
prior to giving any notice of redemption. With notice at least
forty-five (45) days before the redemption date (or lesser notice
acceptable to the Bond Registrar) to the Bond Registrar by the
Issuer, notice of the redemption of Bonds shall be given by first
class mail not less than thirty (30) days nor more than sixty
(60) days prior to the date fixed for such redemption to the
registered owners of Bonds to be redeemed at their last addresses
appearing on such registration books. The Bonds or portions
thereof specified in such notice shall become due and payable at
the applicable redemption price on the redemption date therein
designated, together with interest to the redemption date. If
there shall be drawn for redemption less than all of a Bond, the
Issuer shall execute and the Bond Registrar shall authenticate
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and deliver, upon the surrender of such Bond, without charge to
the registered owner thereof, for the unredeemed balance of the
Bond so surrendered, Bonds of like maturity and of the
denomination of $5,000 or any authorized integral multiple
thereof.
All notices of redemption shall include at least the
information as follows: (1) the redemption date; (2) the
redemption price; (3) if less than all of the Bonds of a given
maturity are to be redeemed, the identification and, in the case
of partial redemption of the Bonds, the respective principal
amounts of the Bonds to be redeemed; (4) a statement that on the
redemption date the redemption price will become due and payable
upon each such Bond or portion thereof called for redemption and
that interest thereon shall cease to accrue from such date; and
(5) the place where such Bonds are to be surrendered for payment
of the redemption price, which place of payment shall be the
principal office of the Paying Agent.
The Bond Registrar shall not be required to exchange or
transfer any Bond during the period from the first (lst) day of
the month of any interest payment date to such interest payment
date or during the period of fifteen (15) days next preceding the
mailing of a notice of redemption which could designate all or a
part of such Bond for redemption.
Notice of redemption having been so given, the Bonds or
portions of Bonds 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 such Bonds or portions of
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Bonds shall cease to bear interest. Neither the failure to mail
such redemption notice nor any defect in any notice so mailed to
any particular registered owner of a Bond shall affect the
sufficiency of such notice with respect to other registered
owners. Notice having been properly given, failure of a
registered owner of a Bond to receive such notice shall not be
deemed to invalidate, limit or delay the effect of the notice or
the redemption action described in the notice. Such notice may
be waived in writing by a registered owner of a Bond, either
before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice shall be filed, if
at all, with the Bond Registrar, but such filing shall not be a
condition precedent to the validity of any action taken in
reliance upon such waiver. Upon surrender of such Bonds for
redemption in accordance with such notice, such Bonds shall be
paid by the Paying Agent at the redemption price. Interest due
on or prior to the redemption date shall be payable as herein
provided for payment of interest.
If any Bond or portion of Bond called for redemption
shall not be so paid upon surrender thereof for redemption, the
principal, and premium, if any, shall, until paid, bear interest
from the redemption date at the rate borne by the Bond or portion
of such Bond so called for redemption. All Bonds which have been
redeemed shall be cancelled and destroyed by the Bond Registrar
and shall not be reissued.
Section 4. Execution and Authentication. Each Bond
shall be executed in the name of the Issuer by the manual or
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authorized facsimile signature of its Mayor and the corporate
seal of the Issuer, or a facsimile thereof, shall be thereunto
affixed, impressed or otherwise reproduced or placed thereon and
attested by the manual or authorized facsimile signature of its
City Clerk. Temporary Bonds, preliminary to the availability of
Bonds in definitive form, shall be and are hereby authorized and
approved.
In case any officer whose signature, or a facsimile of
whose signature, shall appear on any Bond shall cease to hold
such office before the issuance of such Bond, such Bond shall
nevertheless be valid and sufficient for all purposes, the same
as if the person whose signature, or a facsimile thereof, appears
on such Bond had not ceased to hold such office. Any Bond may be
signed, sealed or attested on behalf of the Issuer by any person
who, on the date of such act, shall hold the proper office,
notwithstanding that at the date of such Bond such person may not
hold such office. No recourse shall be had for the payment of
any Bonds against the City Council or any officer or employee of
the Issuer (past, present or future) who executes the Bonds, or
on any other basis.
Each Bond shall bear thereon a certificate of
authentication executed manually by the Bond Registrar. No Bond
shall be entitled to any right or benefit under this ordinance or
shall be valid or obligatory for any purpose until such
certificate of authentication shall have been duly executed by
the Bond Registrar. Such certificate of authentication shall
have been duly executed by the Bond Registrar by manual
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signature, and such certificate of authentication upon any such
Bond shall be conclusive evidence that such Bond has been
authenticated and delivered under this ordinance. The
certificate of authentication on any Bond shall be deemed to have
been executed by the Bond Registrar if signed by an authorized
officer of the Bond Registrar, but it shall not be necessary that
the same officer sign the certificate of authentication on all of
the Bonds issued hereunder.
Section 5. Transfer, Exchange and Registration. Each
Bond shall be transferable only upon the registration books
maintained by the Bond Registrar on behalf of the Issuer for that
purpose at the principal corporate trust office of the Bond
Registrar, by the registered owner thereof in person or by such
registered owner's attorney duly authorized in writing upon
surrender thereof together with a written instrument of transfer
satisfactory to the Bond Registrar and duly executed by the
registered owner or such registered owner's duly authorized
attorney. Upon the surrender for transfer of any such Bond, the
Issuer shall execute and the Bond Registrar shall authenticate
and deliver a new Bond or Bonds registered in the name of the
transferee of the same aggregate principal amount, maturity and
interest rate as the surrendered Bond. Bonds, upon surrender
thereof at the principal corporate trust office of the Bond
Registrar, with a written instrument satisfactory to the Bond
Registrar, duly executed by the registered owner or such
registered owner's attorney duly authorized in writing, may be
exchanged for an equal aggregate principal amount of Bonds of the
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same maturity and interest rate and of the denomination of $5,000
or any authorized integral multiple thereof, less previous
retirements.
Eor every such exchange or registration of transfer of
Bonds, the Issuer or the Bond Registrar may make a charge
sufficient to reimburse it for any tax, fee or other governmental
charge required to be paid with respect to such exchange or
transfer, which sum or sums shall be paid by the person
requesting such exchange or transfer as a condition precedent to
the exercise of the privilege of making such exchange or
transfer. No other charge shall be made for the privilege of
making such transfer or exchange. The provisions of the Illinois
Bond Replacement Act shall govern the replacement of lost,
destroyed or defaced Bonds.
The Issuer, the Paying Agent and the Bond Registrar may
deem and treat the person in whose name any Bond shall be
registered upon the registration books as the absolute owner of
such Bond, whether such Bond shall be overdue or not, for the
purpose of receiving payment of, or on account of, the principal
of, premium, if any, or interest thereon and for all other
purposes whatsoever, and all such payments so made to any such
registered owner or upon such registered owner's order shall be
valid and effectual to satisfy and discharge the liability upon
such Bond to the extent of the sum or sums so paid, and neither
the Issuer nor the Paying Agent or the Bond Registrar shall be
affected by any notice to the contrary.
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Section 6. Bond Registrar and Paying Agent. The Bond
Registrar and Paying Agent with respect to this ordinance and the
Bonds shall be The National Bank of Canton, with its principal
corporate trust office in Canton, Illinois. The Issuer covenants
that it shall at all times retain a Bond Registrar and Paying
Rgent with respect to the Bonds and shall cause to be maintained
at the office of such Bond Registrar a place where Bonds may be
presented for registration of transfer or exchange, that it will
maintain at the designated office of the Paying Agent a place
where Bonds may be presented for payment, that it shall require
that the Bond Registrar maintain proper registration books and
that it shall require the Bond Registrar and Paying Agent to
perform the other duties and obligations imposed upon each of
them by this ordinance in a manner consistent with the standards,
customs and practices concerning municipal securities. The
Issuer may enter into appropriate agreements with any Bond
Registrar and any Paying Agent in connection with the foregoing,
including as follows:
(a) to act as Bond Registrar, authenticating agent,
Paying Agent and transfer agent as provided herein;
(b) to maintain a list of the registered owners of the
Bonds as set forth herein and to furnish such list to the
Issuer upon request, but otherwise to keep such list
confidential;
(c) to cancel and/or destroy Bonds which have been
paid at maturity or submitted for exchange or transfer;
(d) to give notices of redemption of Bonds to be
redeemed;
(e) to furnish the Issuer at least annually a
certificate with respect to Bonds cancelled and/or
destroyed; and
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(f ) to furnish the I ssuer at lust annually an audit
confirmation of Bonds paid, Bonds outstanding and payments
made with respect to interest on the Bonds.
The Bond Registrar and Paying Agent shall comply with
(a) - (f) above.
The Bond Registrar and Paying Agent shall signify their
acceptances of the duties and obligations imposed upon them by
this ordinance. The Bond Registrar by executing the certificate
of authentication on any Bond shall be deemed to have certified
to the Issuer that it has all requisite power to accept, and has
accepted, such duties and obligations, including as Paying Agent,
not only with respect to the Bond so authenticated but with
respect to all of the Bonds. The Bond Registrar and Paying Agent
are the agents of the Issuer for such purposes and shall not be
liable in connection with the performance of their respective
duties except for their own negligence or default. The Bond
Registrar shall, however, be responsible for any representation
in its certificate of authentication on the Bonds.
The Issuer may remove the Bond Registrar or Paying
Agent at any time. In case at any time the Bond Registrar or
Paying Agent shall resign (such resignation to not be effective
until a successor has accepted such role) or shall be removed or
shall become incapable of acting, or shall be adjudged a bankrupt
or insolvent, or if a receiver, liquidator or conservator of the
Bond Registrar or Paying Agent, or of its property, shall be
appointed, or if any public officer shall take charge or control
of the Bond Registrar or Paying Agent or of their respective
properties or affairs, the Issuer covenants and agrees that it
-18-
will thereupon appoint a successor Bond Registrar or Paying
Agent, as the case may be. The Issuer shall mail or cause to be
mailed notice of any such appointment made by it to each
registered owner of Bonds within twenty (20) days after such
appointment. Any Bond Registrar or any Paying Agent appointed
under the provisions of this Section 7 shall be a bank, trust
company or other qualified professional with respect to such
matters, authorized to exercise such functions in the State of
Illinois.
Section 7. Alternate Bonds; General Obligations. The
Bonds are and constitute Alternate Bonds under the Local
Government Debt Reform Act, anticipated to be payable from
Pledged Revenues as Junior Bonds. Under and pursuant to Section
15 of the Local Government Debt Reform Act, the full faith and
credit of the Issuer are hereby irrevocably pledged to the
punctual payment of the principal of, premium, if any, and
interest on the Bonds; the Bonds shall be direct and general
obligations of the Issuer; and the Issuer shall be obligated to
levy ad valorem taxes upon all the taxable property within the
Issuer's corporate limits, for the payment on and after June 15,
1996 of the Bonds and the interest thereon, without limitation as
to rate or amount (such ad valorem taxes being the "Pledged
Taxes").
The lien of the Bonds and this ordinance on the Pledged
Revenues shall be and is second, junior and subordinate to the
lien thereon of the Series 1989 Bonds and under the Series 1989
Bond Ordinance.
-19-
Pledged Revenues are hereby determined by the Corporate
Authorities to be sufficient to provide for or pay in each year
to final maturity of the Bonds all of the following: (1)
Operation and Maintenance Expenses of the enterprise (i.e., the
System), but not including depreciation, (2) the debt service on
all Outstanding revenue bonds payable from Pledged Revenues, (3)
all amounts required to meet any fund or account requirements
with respect to such Outstanding revenue bonds, (4) other
contractual or tort liability obligations, if any, payable from
such Pledged Revenues, and (5) in each year, an amount not less
than 1.25 times debt service of all (i) Alternate Bonds payable
from such Pledged Revenues previously issued and outstanding, and
(ii) Alternate Bonds payable from such Pledged Revenues proposed
to be issued, including the Bonds. To the extent payable from
one or more revenue sources, the Pledged Revenues shall be and,
with appropriate increases, are hereby determined by the
Corporate Authorities to provide in each year an amount not less
than 1.25 times debt service (as defined in Section 2 of the
Local Government Debt Reform Act) of Alternate Bonds payable from
such revenue sources previously issued and outstanding and
Alternate Bonds proposed to be issued. Such conditions
enumerated need not be met for that amount of debt service (as
defined in Section 2 of the Local Government Debt Reform Act)
provided for by the setting aside of proceeds of bonds or other
moneys at the time of the delivery of such bonds. The Pledged
Revenues are hereby determined by the Corporate Authorities to
provide in each year Operation and Maintenance Expenses, 100% of
-20-
the amount which shall become due as debt service on the
Outstanding 1961 Bonds, all amounts required to meet any fund or
account requirements with respect to this ordinance, any other
contractual or tort liability obligations, if any, payable from
Pledged Revenues, and an amount not less than 1.25 times debt
service (as defined in Section 2 of the Local Government Debt
Reform Act) of all of the Outstanding Bonds, payable from such
Pledged Revenues.
The determination of the sufficiency of the Pledged
Revenues shall be supported by reference to the most recent audit
of the Issuer, which is for a Fiscal Year ending not earlier than
18 months previous to the time of issuance of the Alternate
Bonds. If such audit does not adequately show the sufficiency of
such Pledged Revenues, or if such Pledged Revenues are shown to
be insufficient, then the determination of sufficiency shall be
supported by the report of an independent accountant or
feasibility analyst having a national reputation for expertise in
such matters demonstrating the sufficiency of such revenues and
explaining, if appropriate, by what means the Pledged Revenues
will be greater than as shown in the audit. Whenever the
sufficiency of Pledged Revenues is demonstrated by reference to
higher rates or charges and fees for enterprise revenues (with
respect to the use of the System constituting the Pledged
Revenues), such higher rates or charges and fees with respect to
the use of the services of the System shall have been properly
imposed by an ordinance adopted prior to the time of delivery of
the Bonds.
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Section 8. Form of Bonds. Unless Bonds in typewritten
form are accepted or in any contract for the sale of the Bonds
the purchaser or purchasers of the Bonds shall agree to accept
typewritten or other temporary Bonds preliminary to the
availability of, or in lieu of, Bonds in printed form prepared in
compliance with the National Standard Specifications for Fully
Registered Municipal Securities prepared by the American National
Standards Institute, Bonds shall comply therewith, and in any
event shall be in substantially the following form [provided,
however, that appropriate insertions, deletions and modifications
in the form of the Bonds may be made, including the issuance of a
single Bond for each maturity, as the Purchaser thereof agrees or
accepts, in an appropriate form prepared by Bond counsel, not
inconsistent herewith]:
[The remainder of this page is intentionally left blank.]
-22-
UNITED STATES OF AMERICA
STATE OF ILLINOIS
COUNTY OF FULTON
CITY OF CANTON
GENERAL OBLIGATION WATERWORKS AND SEWERAGE BOND
(ALTERNATE REVENUE SOURCE)
SERIES 1995
REGISTERED NO.
INTEREST RATE: MATURITY DATE:
REGISTERED $
DATED DATE: CUSIP:
Registered Owner:
Principal Amount:
KNOW ALL BY THESE PRESENTS that the City of Canton, a
non-home rule municipality situated in The County of Fulton, in
the State of Illinois (the "Issuer"), acknowledges itself
indebted and for value received hereby promises to pay to the
Registered Owner identified above, or registered assigns, the
Principal Amount set forth above on the Maturity Date specified
above, and to pay interest on such Principal Amount from the
later of the Dated Date hereof or the most recent interest
payment date to which interest has been paid, at the Interest
Rate per annum set forth above, computed on the basis of a
360-day year consisting of twelve 30-day months and payable in
lawful money of the United States of America semiannually on the
fifteenth (15th) days of June and December in each year,
commencing June 15, 1995, until the Principal Amount hereof shall
have been paid, by check or draft mailed to the Registered Owner
of record hereof as of the first (1st) day (whether or not a
business day) of the calendar month of such interest payment
date, at the address of such Registered Owner appearing on the
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registration books maintained for such purpose at the principal
corporate trust office of The National Bank of Canton, Canton,
Illinois, as Bond Registrar (including its successors, the "Bond
Registrar"). This Bond, as to principal and premium, if any,
when due, will be payable in lawful money of the United States of
America upon presentation and surrender of this Bond at the
principal corporate trust office of The National Bank of Canton,
Canton, Illinois, as Paying Agent (including its successors, the
"Paying Agent"). The Bonds are payable from the receipts derived
by the Issuer from Pledged Revenues (as defined in the
hereinafter defined Bond Ordinance) derived from the Issuer's
operation and maintenance its municipally-owned waterworks and
sewerage system (the "System"); and although it is expected, and
has been certified, that the Bonds are to be paid from such
Pledged Revenues, which Pledged Revenues are pledged to the
payment thereof second, junior and subordinate to the lien
thereon of the Issuer's outstanding General Obligation Bonds
(Alternate Revenue Source), Series 1989, the full faith and
credit of the Issuer, including the power to levy taxes without
limit as to rate or amount from and after June 15, 1996, are
irrevocably pledged for the punctual payment of the principal of
and interest on this Bond and each Bond of the series of which it
is a part, on debt service payment dates from and after June 15,
1996, according to the terms thereof.
This Bond is one of a series of Bonds issued in the
aggregate principal amount of $1,800,000, which are all of like
tenor, except as to maturity and interest rate, and which are
-24-
authorized and issued under and pursuant to the Constitution and
laws of the State of Illinois, including Section 15 of the Local
Government Debt Reform Act (Section 350/15 of Chapter 30 of the
Illinois Compiled Statutes, in connection with "alternate bonds",
as supplemented and amended), Division 139 of Article 11 of the
Illinois Municipal Code (Section 5/11-139-1 et seq. of Chapter 65
of the Illinois Compiled Statutes), as supplemented and amended
(the "Revenue Source Act"), the Registered Bond Act, the Illinois
Bond Replacement Act, the Bond Authorization Act and the
applicable laws authorizing the Pledged Revenues, and pursuant to
and in accordance with Ordinance No. 1451 adopted by the
City Council of the Issuer on
entitled:
February 7 1995 , and
"AN ORDINANCE AUTHORIZING THE ISSUANCE OF UP TO
$1,800,000 GENERAL OBLIGATION WATERWORKS AND SEWERAGE BONDS
(ALTERNATE REVENUE SOURCE), SERIES 1995, OF THE CITY OF CANTON,
FULTON COUNTY, ILLINOIS, PROVIDING THE DETAILS OF SUCH BONDS AND
FOR AN ALTERNATE REVENUE SOURCE AND THE LEVY OF DIRECT ANNUAL
TAXES SUFFICIENT TO PAY THE PRINCIPAL OF AND INTEREST ON SUCH
BONDS, AND RELATED MATTERS" (with respect to which undefined
terms herein shall have the meanings therein, the "Bond
Ordinance"). The Bonds are issued to pay a portion of the costs
to acquire, construct and install a sludge press and a sewer
plant building for the sludge press, and related improvements,
facilities and costs, including costs of issuance of the Bonds.
Bonds maturing on and after December 15, 1996, shall be
subject to redemption prior to maturity on June 15, 1996, and on
any date thereafter, as a whole or in part, in the inverse order
-25-
of maturity, on the applicable redemption date and at a
redemption price of par, plus accrued interest to the date fixed
for redemption.
In the event of the redemption of less than all the
Bonds of like maturity, the aggregate principal amount thereof to
be redeemed shall be $5,000 or an authorized integral multiple
thereof, and the Bond Registrar shall assign to each Bond of such
maturity a distinctive number for each $5,000 principal amount of
such Bond and shall select by lot from the numbers so assigned as
many numbers as, at $5,000 for each number, shall equal the
principal amount of such Bonds to be redeemed. The Bonds to be
redeemed shall be the Bonds to which were assigned numbers so
selected; provided that only so much of the principal amount of
each Bond shall be redeemed as shall equal $5,000 for each number
assigned to it and so selected.
The Issuer shall deposit with the Paying Agent an
amount of money sufficient to pay the redemption price of all the
Bonds or portions of Bonds which are to be redeemed on the
redemption date, together with interest to such redemption date,
prior to giving any notice of redemption. Notice of the
redemption of Bonds shall be given by first class mail not less
than thirty (30) days nor more than sixty (60) days prior to the
date fixed for such redemption to the registered owners of Bonds
to be redeemed at their last addresses appearing on the
registration books therefor. The Bonds or portions thereof
specified in such notice shall become due and payable at the
redemption price on the redemption date therein designated, and
-26-
if, on the redemption date, moneys for payment of the redemption
price of all the Bonds or portions thereof to be redeemed,
together with interest to the redemption date, remain on deposit
with the Paying Agent, and if notice of redemption shall have
been mailed as aforesaid (and notwithstanding any defect therein
or the lack of actual receipt thereof by any registered owner),
then from and after the redemption date interest on such Bonds or
portions thereof shall cease to accrue and become payable. If
there shall be drawn for redemption less than all of a Bond, the
Issuer shall execute and the Bond Registrar shall authenticate
and deliver, upon the surrender of such Bond, without charge to
the registered owner thereof, for the unredeemed balance of the
Bond so surrendered, Bonds of like maturity and of the
denomination of 55,000 or any authorized integral multiple
thereof.
All notices of redemption shall include at least the
information as follows: (1) the redemption date; (2) the
redemption price; (3) if less than all of the Bonds of a given
maturity are to be redeemed, the identification and, in the case
of partial redemption of the Bonds, the respective principal
amounts of the Bonds to be redeemed; (4) a statement that on the
redemption date the redemption price will become due and payable
upon each such Bond or portion thereof called for redemption and
that interest thereon shall cease to accrue from such date; and
(5) the place where such Bonds are to be surrendered for payment
of the redemption price, which place of payment shall be the
principal office of the Paying Agent.
-27-
This Bond is transferable only upon the registration
books therefor by the Registered Owner hereof in person, or by
such Registered Owner's attorney duly authorized in writing, upon
surrender hereof at the principal corporate trust office of the
Bond Registrar together with a written instrument of transfer
satisfactory to the Bond Registrar duly executed by the
Registered Owner or by such Registered Owner's duly authorized
attorney, and thereupon a new registered Bond or Bonds, in the
denominations of $5,000 or any authorized integral multiple
thereof and of the same aggregate principal amount as this Bond
shall be issued to the transferee in exchange therefor. In like
manner, this Bond may be exchanged for an equal aggregate
principal amount of Bonds of any authorized denomination.
The Bond Registrar shall not be required to exchange or
transfer any Bond during the period from the first (1st) day of
the month of any interest payment date to such interest payment
date or during a period of fifteen (15) days next preceding the
mailing of a notice of redemption which could designate all or a
part of such Bond for redemption. The Issuer or the Bond
Registrar may make a charge sufficient to reimburse it for any
tax, fee or other governmental charge required to be paid with
respect to the transfer or exchange of this Bond. No other
charge shall be made for the privilege of making such transfer or
exchange. The Issuer, the Paying Agent and the Bond Registrar
may treat and consider the person in whose name this Bond is
registered as the absolute owner hereof for the purpose of
receiving payment of, or on account of, the principal, premium,
-28-
if any, and interest due hereon and for all other purposes
whatsoever, and all such payments so made to such Registered
Owner or upon such Registered Owner's order shall be valid and
effectual to satisfy and discharge the liability upon this Bond
to the extent of the sum or sums so paid, and neither the Issuer
nor the Paying Agent or the Bond Registrar shall be affected by
any notice to the contrary.
No recourse shall be had for the payment of any Bonds
against the Mayor or any member of the City Council or any other
officer or employee of the Issuer (past, present or future) who
executes any Bonds, or on any other basis. The Issuer may remove
the Bond Registrar or Paying Agent at any time and for any reason
and appoint a successor.
This Bond shall not be valid or become obligatory for
any purpose until the certificate of authentication hereon shall
have been duly executed by the Bond Registrar.
The Issuer has designated the Bonds as "qualified
tax-exempt obligations" under Section 265(b)(3) of the Internal
Revenue Code of 1986, as amended.
It is hereby certified, recited and declared that all
acts, conditions and things required to be done, exist and be
performed precedent to and in the issuance of this Bond in order
to make it a legal, valid and binding general obligation of the
Issuer have been done, exist and have been performed in regular
and due time, form and manner as required by law, and that the
series of Bonds of which this Bond is one, together with all
other indebtedness of the Issuer is within every debt or other
-29-
limit prescribed by law.
IN WITNESS WHEREOF, the City of Canton, Fulton County,
Illinois, has caused this Bond to be executed in its name and on
its behalf by the manual or facsimile signature of its Mayor, and
its corporate seal, or a facsimile thereof, to be hereunto
affixed or otherwise reproduced hereon and attested by the manual
or facsimile signature of its Clerk, all as of the Dated Date set
forth above.
(SEAL)
Attest:
City Clerk
CITY OF CANTON, Fulton
County, Illinois
Mayor
CERTIFICATE OF AiTI'AENT I CAT I ON
Dated:
This is one of the General Obligation Waterworks and
Sewerage Bonds (Alternate Revenue Source), Series 1995, described
in the within mentioned Bond Ordinance.
The National Bank of Canton,
Canton, Illinois, as Bond Registrar
By:
Authorized Officer
Bond Registrar and The National Bank of Canton
Paying Agent: Canton, Illinois
-30-
ASSIGNMENT
For value received the undersigned sells, assigns and
transfers unto
(Name, Address and Tax Identification Number of Assignee] the
within Bond and hereby irrevocably constitutes and appoints
attorney to transfer the
within Bond on the books kept for registration thereof, with full
power of substitution in the premises.
Dated
Signature Guarantee:
Signature
NOTICE: The signature on this assignment must correspond with
the name of the Registered Owner as it appears upon the
face of the within Bond in every particular, without
alteration or enlargement or any change whatever.
Section 9. Levv and Extension of Taxes. For the
purpose of providing the money required to pay the interest on
the Bonds on and after June 15, 1996 when and as the same falls
due and to pay and discharge the principal thereof as the same
shall mature, there shall be levied upon all the taxable property
within the Issuer's corporate limits in each year while any of
the Bonds shall be Outstanding, a direct annual tax sufficient
for that purpose and there is hereby levied upon all of the
taxable property within the Issuer's corporate limits, in
addition to all other taxes, the following direct annual taxes,
in the amounts for each year, as follows:
For Each Year
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
A Tax Sufficient to Produce the Sum of:
$ 195,280.00
$ 190,520.00
$ 190,632.50
$ 190,322.50
$ 194,622.50
$ 193,217.50
$ 191,452.50
$ 189,265.00
$ 191,645.00
$ 193,260.00
-31-
for
for
for
for
for
for
for
for
for
for
interest
interest
interest
interest
interest
interest
interest
interest
interest
interest
and principal
and principal
and principal
and principal
and principal
and principal
and principal
and principal
and principal
and principal
2005 $ 189,090.00 for interest and principal
2006 $ 189,447.50 for interest and principal
2007 $ 188,985.00 for interest and principal
2008 $ 192,600.00 for interest and principal
To the extent lawful, interest or principal coming due
at any time when there shall be insufficient funds on hand to pay
the same shall be paid promptly when due from current funds on
hand in advance of the collection of the taxes herein levied; and
when such taxes shall have been collected, reimbursement shall be
made to such fund or funds from which such advance was made in
the amounts thus advanced.
As soon as this ordinance becomes effective, a copy
thereof, certified by the Clerk of the Issuer, which certificate
shall recite that this ordinance has been duly adopted, shall be
filed with the County Clerk of Fulton County, Illinois, who is
hereby directed to ascertain the rate percent required to produce
the aggregate tax provided to be levied in the years 1995 through
2008, inclusive, and to extend the same for collection on the tax
books in connection with other taxes levied in each of such
years, in and by the Issuer for general corporate purposes of the
Issuer, and in each of such years such annual tax shall be levied
and collected in like manner as taxes for general corporate
purposes for each of such years are levied and collected and,
when collected, such taxes shall be used solely for the purpose
of paying the principal of and interest on the Bonds herein
authorized as the same become due and payable.
The Issuer covenants and agrees with the registered
owners of the Bonds that so long as any of the Bonds remain
Outstanding, the Issuer will not cause the abatement of the
-32-
foregoing taxes and otherwise will take no action or fail to take
any action which in any way would adversely affect the ability of
the Issuer to levy and collect the foregoing taxes unless and to
the extent (i) there then shall be moneys irrevocably on deposit
in the Junior Debt Service Account established under Section 11
below or (ii) the Corporate Authorities shall have determined by
a resolution duly adopted by the affirmative vote of not less
than two-thirds of the Corporate Authorities that the Pledged
Revenues projected to be received during the period in connection
with such levy of taxes in respect of such series of Bonds are
sufficient to pay when due the principal of and interest on such
Bonds during such period and to maintain the 1.25 coverage
requirements in connection with Alternate Bonds. The Issuer and
its officers will comply with all present and future applicable
laws in order to assure that the foregoing taxes will be levied,
extended and collected as provided herein and deposited in the
Junior Debt Service Account established in Section 11 below to
pay the principal of and interest on the Bonds. Whenever either
(i) or (ii) above in this paragraph have been satisfied, the
Corporate Authorities shall duly direct the abatement of the
Pledged Taxes for the year with respect to which such taxes have
been levied, to the extent so satisfied, and appropriate
certification of such abatement shall be timely filed with the
County Clerk in connection with such abatement. If for any
reason there is abatement of such levy of taxes and the failure
thereafter to pay debt service in respect of such abatement, the
additional amount, together with additional interest accruing,
-33-
shall be added to the tax levy in the year of, or the next year
following, such failure.
Section 10. Purchase Agreement. The Purchase
Agreement by and between the Issuer and the Purchaser, in
substantially the form thereof presented before the meeting of
the Corporate Authorities at which this ordinance is adopted,
shall be and is hereby approved. All things done with respect to
the Purchase Agreement by the Issuer's Mayor, Clerk, Treasurer or
Attorney, in connection with the issuance and sale of the Bonds,
shall be and are hereby in all respects ratified, confirmed and
approved. The Mayor, Clerk, Treasurer, Attorney and other
officials of the Issuer are hereby authorized and directed to do
and perform, or cause to be done or performed for or on behalf of
the Issuer, each and every thing necessary for the issuance of
the Bonds, including the proper execution, delivery and
performance of the Purchase Agreement, and related instruments
and certificates, by the Issuer and the purchase by and delivery
of the Bonds to or at the direction of the Purchaser. No elected
or appointed officer of the Issuer is in any manner interested,
directly or indirectly, in his or her own name or in the name of
any other person, association, trust or corporation in the
Purchase Agreement.
Section 11. Waterworks and Sewerage Emend. Upon the
issuance of any of the Bonds, the System shall continue to be
operated on a Fiscal Year basis commencing on the first day of
May and ending the last day of April of each calendar year. All
of the revenues from any source whatsoever derived from the
-34- '
operation of the System shall continue to be set aside as
collected and be deposited in a separate fund and in an account
in a bank to be designated or continued, as the case may be, by
the Corporate Authorities, which fund is hereby created and
established as the Issuer's "Waterworks and Sewerage Emend" (the
"Fund"), which shall continue to constitute a trust fund for the
sole purpose of carrying out the covenants, terms, and conditions
of this ordinance, including, without limitation, maintenance of
the "Waterworks Operation and Maintenance Account", the
"Waterworks Interest and Redemption Account", the "Waterworks
Depreciation and Contingencies Account", the "Waterworks Bond
Reserve Account" and the "Surplus Account" each as created by the
1961 Bond Ordinance, and providing for the establishment of
expenditures from such respective accounts as hereinafter
described.
The separate accounts in the Fund known as the "Junior
Debt Service Account" and the "Junior Depreciation Account",
which accounts are hereby created and established, to which there
shall be credited and paid on a first and prior basis, on or
before the first day of each month, by the Treasurer or other
appropriate financial officer of the Issuer, without any further
official action or direction, in the order in which such Accounts
are hereinafter mentioned, subject to the requirements of any
account having a prior claim, including the Debt Service Account
of 1989 under the Series 1989 Bond Ordinance and under this
ordinance, all moneys in the Fund in accordance with the
following provisions:
-35-
(a) Junior Debt Service Account: There next shall be
deposited and credited to the Junior Debt Service Account and
held, in cash and investments, a fractional amount (not less than
1/5) of the interest becoming due on the next succeeding interest
payment date on all Outstanding Junior Bonds and also a
fractional amount (not less than 1/10) of the principal becoming
due (or subject to mandatory redemption) on the next succeeding
principal maturity date of all of the Outstanding Junior Bonds
until there shall have been accumulated and held in cash and
investments in such Account on or before the month preceding such
interest payment date or principal maturity date, or both, an
amount sufficient to pay such principal or interest, or both.
In computing the fractional amount to be set aside each
month in such Junior Debt Service Account, the fraction shall be
so computed that a sufficient amount will be set aside in such
Junior Debt Service Account and will be available for the prompt
payment of such principal of and interest on all Outstanding
Junior Bonds and shall be not less than one-fifth (1/5) of the
interest becoming due on the next succeeding interest payment
date and not less than one-tenth (1/10) of the principal becoming
due (or subject to mandatory redemption) on the next succeeding
principal payment date on all Outstanding Junior Bonds until
there is sufficient money in such Junior Debt Service Account to
pay such principal or interest, or both.
Credits into such Junior Debt Service Account may be
suspended in any Fiscal Year at such time as there shall be a
sufficient sum held in cash and investments in such Account to
meet principal and interest requirements in such Account for the
balance of such Fiscal Year, but such credits shall again be
resumed at the beginning of the next Fiscal Year. All moneys in
such Junior Debt Service Account shall be used only for the
purpose of paying interest and principal and applicable premium
on Outstanding Junior Bonds.
(b) Junior Depreciation Account: There next shall be
deposited in and credited to such Junior Depreciation Account on
the first business day of each month after issuance of any Bonds,
the sum of $1,500 until an amount equal to $180,000 has been
accumulated. Thereafter, no additional payments shall be made to
the Junior Depreciation Account, except that when any money is
paid out of such Account, each of the monthly payments into such
account shall be resumed and continued until such Account has
been restored to the aggregate amount of $180,000.
Amounts to the credit of the Junior Depreciation
Account shall be used for (i) the payment of the costs of
extraordinary maintenance, necessary repairs and replacements, or
contingencies, the payment for which no other funds are
available, in order that the System may at all times be able to
render efficient service and, although it is not expected, (ii)
the payment of principal of or interest and applicable premium on
-36-
any Outstanding bonds payable from the Pledged Revenues of the
System at any time when there are no other funds available for
that purpose in order to prevent a default and shall be
transferred to the appropriate Account for such purpose.
Whenever an amount is withdrawn from the Junior
Depreciation Account for the purpose stated in clause (ii) of the
preceding paragraph, the Issuer shall have undertaken a rate
study of the System by a qualified accountant, engineer or other
finance professional. Each expenditure to be made from the
Depreciation Account or the purpose stated in clause (i) of the
preceding paragraph shall be made only after an approving vote of
the Corporate Authorities has certified that such expenditure is
necessary to the continued effective and efficient operation of
the System.
(c) Surplus Account: All moneys remaining in the
Fund, after crediting the required amounts to the respective
Accounts above, and after making up any deficiency in the
Accounts above, shall be credited to the Surplus Account and
then, such surplus shall be used, if at all, for one or more of
the following purposes (and not for any general corporate
purpose) without any priority among them:
(1) For the purpose of constructing or acquiring
repairs, replacements, renewals, improvements or extensions
to the System; or
(2) For the purpose of calling and redeeming
Outstanding bonds payable from Pledged Revenues of the
System which are callable at the time; or
(3) For the purpose of paying principal and interest
and applicable premium on any subordinate bonds or
obligations issued for the purpose of acquiring or
constructing repairs, replacements, renewals, improvements
and extensions to the System; or
(4) For any other lawful purpose, including the
purchase of Outstanding bonds payable from Pledged Revenues
of the System at a price of not to exceed par plus accrued
interest.
(d) Investments: Money to the credit of the Junior
Debt Service Account and the Junior Depreciation Account may be
invested from time to time by the Issuer's Treasurer in (i)
interest-bearing bonds, notes, or other direct full faith and
credit obligations of the United States of America, (ii)
obligations unconditionally guaranteed as to both principal and
interest by the United States of America, or (iii) certificates
of deposit or time deposits of any bank or savings and loan
association, as defined by Illinois laws, provided such bank or
savings and loan association is insured by the Federal Deposit
Insurance Corporation or a successor corporation to the Federal
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Deposit Insurance Corporation and provided further that the
principal of such deposits are secured by a pledge of obligations
as described in clauses (d) (i) and (d) (ii) above in the full
principal amount of such deposits, or otherwise collateralized in
such amount and in such manner as may be required by law. Such
investments may be sold from time to time by the Treasurer of the
Issuer as funds may be needed for the purpose for which such
Accounts have been created.
All interest on any funds so invested shall be credited
to the applicable Account of the Fund and is hereby deemed and
allocated as expended with the next expenditure or expenditures
of money from the applicable Account of the Fund.
Moneys in any of such accounts shall be invested by the
Issuer's Treasurer, if necessary, in investments restricted as to
yield, which investments may be in U.S. Treasury Securities -
State and Local Government Series, if available, and to such end
the Issuer's Treasurer shall refer to any investment restrictions
covenanted by the Issuer or any officer thereof as part of the
transcript of proceedings for the issuance of the Bonds, and to
appropriate opinions of counsel.
Section 12.
Bond Proceeds Account. All of the
proceeds derived from the sale of the Bonds (exclusive of accrued
interest) shall be deposited in the "Bond Proceeds Account of
1995", which is hereby established as a special account of the
Issuer. Moneys in the Bond Proceeds Account of 1995 shall be
used for the purposes specified in Section 3 of this ordinance
(that is, the costs of the Project) and for the payment of costs
of issuance of the Bonds, but may hereafter be reappropriated and
used for other lawful purposes in accordance with the Revenue
Source Act. Before any such reappropriation shall be made, there
shall be filed with the Clerk of the Issuer an opinion of Evans,
Froehlich & Beth, Champaign, Illinois, or other nationally
recognized Bond counsel ("Bond Counsel") to the effect that such
reappropriation is authorized and will not adversely affect the
tax-exempt status of the Bonds under Section 103 of the Internal
Revenue Code of 1986, as amended. Moneys in the Bond Proceeds
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Account of 1995 shall be withdrawn from time to time as needed
for the payment of costs and expenses incurred by the Issuer in
connection with the Project and for paying the fees and expenses
incidental thereto. Moneys shall be withdrawn from the
depositary in connection with such funds from time to time by the
Treasurer or other appropriate financial officer of the Issuer
only upon submission to such officer of the following:
A duplicate copy of the order signed by the Mayor and
the City Clerk, or such other officer(s) as may from
time to time be by law authorized to sign and
countersign orders of the Issuer, stating specifically
the purpose for which the order is issued and
indicating that the payment for which the order is
issued has been approved by the Corporate Authorities.
Within sixty (60) days after completion of the Project, the Mayor
shall certify to the Corporate Authorities the fact that the
Project has been completed, and after all costs have been paid,
the Mayor and City Clerk shall execute a completion certificate
and file it with the depositary in which the Bond Proceeds
Account of 1995 is on deposit and in the records of the Issuer
certifying that the Project has been completed and that all costs
have been paid; and, if at that time any funds remain in the Bond
Proceeds Account of 1995, the same shall be applied for other
improvements to the System or transmitted by the depositary to
the Treasurer or other appropriate financial officer of the
Issuer, and such officer shall credit such funds to the Junior
Debt Service Account, as the Corporate Authorities direct. If
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not applied to System improvements within 90 days of filing such
completion certificate, the Treasurer shall transfer such funds
first to the Junior Depreciation Account and second to the Junior
Debt Service Account.
Section 13. Issuance of Additional Bonds. Except as
provided in the immediately preceding sentence, the Issuer
reserves the right to issue:
(a) Parity Bonds without limit provided that the Gross
Revenues of the System as determined or as adjusted as
hereinbelow set out shall be sufficient to provide for or
pay all of the following: (i) Operation and Maintenance
Expenses of the System (but not including depreciation),
(ii) debt service on all Outstanding bonds of such System
computed immediately after the issuance of any proposed
Parity Bonds, (iii) all amounts required to meet any fund or
account requirements with respect to such Outstanding bonds,
(iv) other contractual or tort liability obligations then
due and payable, if any, and (e) an additional amount not
less than 0.25 times debt service (as provided in Section 15
of the Local Debt Reform Act) on such of the Alternate Bonds
as shall remain Outstanding bonds after the issuance of the
proposed Parity Bonds. Such sufficiency shall be calculated
for each year to the final maturity of such Alternate Bonds
which shall remain Outstanding after the issuance of the
proposed Parity Bonds. The determination of the sufficiency
of Gross Revenues shall be supported by reference to the
most recent audit of the Fund, which audit shall be for a
Fiscal Year ending not earlier than eighteen (18) months
previous to the time of issuance of the proposed Parity
Bonds.
If such audit shows the Gross Revenues to be
insufficient, then the determination of sufficiency may be
made in either of the following two ways:
1. The Gross Revenues may be adjusted in the
event there has been an increase in the rates of the
System from the rates in effect for the Fiscal Year of
such audit (if such rate increase is still in effect at
the time of the issuance of such proposed Parity Bonds)
to show such Gross Revenues as they would have been if
such increased rates had been in effect during all of
said Fiscal Year. Any such adjusted statement of Gross
Revenues shall be evidenced by the certificate of an
independent consulting engineer, an independent
certified public accountant or an independent financial
consultant employed for such purpose.
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2. The determination of sufficiency of the Gross
Revenues may be supported by the report of an
independent accountant or feasibility analyst having a
national reputation for expertise in such matters,
demonstrating the sufficiency of the Gross Revenues and
explaining by what means they will be greater than as
shown in the audit.
The reference to and acceptance of an audit,
an adjusted statement of the Gross Revenues, or a
report, as the case may be, and the determination of
the Corporate Authorities of the sufficiency of the
Gross Revenues shall be conclusive evidence that the
conditions of this Section 13(a) have been met and that
the Parity Bonds are properly issued hereunder; and no
right to challenge such determination is granted to the
registered owners of the Bonds.
(b) bonds or other obligations payable from the
revenues of the System subordinate to the lien of any Senior
Bonds or Junior Bonds which remain Outstanding after the
issuance of such bonds or other obligations.
Contracts or agreements, including long term and take
or pay contracts or agreements, which by the terms thereof
require payment by the Issuer as an Operation and Maintenance
Expense are expressly excluded from the provisions of this
ordinance pertaining to additional bonds. Such contracts or
agreements may be made by the Issuer notwithstanding any of the
provisions herein, but only in such manner, if at all, such that
the interest on any of the Outstanding Bonds shall not become
subject to federal income taxation by reason thereof.
Section 14. Arbitrage Rebate. The Issuer shall comply
with the provisions of Section 148(f) of the Internal Revenue
Code of 1986, as amended, relating to the rebate of certain
investment earnings at periodic intervals to the United States of
America to the extent that there shall have been filed with the
Clerk of the Issuer an opinion of Bond Counsel to the effect that
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such compliance is necessary to preserve the exclusion from gross
income for federal income tax purposes of interest on the Bonds
under Section 103 of the Internal Revenue Code of 1986, as
amended. There is hereby created a separate and special account
Fund known as the "Rebate Account", into which there shall be
deposited as necessary investment earnings to the extent required
so as to maintain the tax-exempt status of the interest on the
Bonds under Section 148(f) of the Internal Revenue Code of 1986,
as amended. All rebates, special impositions or taxes for such
purpose payable to the United States of America (Internal Revenue
Service) shall be payable from applicable excess earnings or
other sources which are to be deposited into the Rebate Account.
Section 15. Investment Regulations. All investments
shall be in Qualified Investments, unless otherwise expressly
herein provided. No investment shall be made of any moneys in
the Junior Debt Service Account or the Bond Proceeds Account of
1995, except in accordance with the tax covenants and other
covenants set forth in Section 16 of this ordinance. All income
derived from such investments in respect of moneys or securities
in any fund or account shall be credited in each case to the fund
or account in which such moneys or securities are held.
Any moneys in any fund or account that are subject to
investment yield restrictions may be invested in United States
Treasury Securities, State and Local Government Series, pursuant
to the regulations of the United States Treasury Department,
Bureau of Public Debt. The Issuer's Treasurer and agents
designated by such officer are hereby authorized to submit on
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behalf of the Issuer subscriptions for such United States
Treasury Securities and to request redemption of such United
States Treasury Securities.
Section 16. Non-Arbitrage and Tax-Exemption. One
purpose of this Section 16 is to set forth various facts
regarding the Bonds and to establish the expectations of the
Corporate Authorities and the Issuer as to future events
regarding the Bonds and the use of Bond proceeds. The
certifications and representations made herein and at the time of
the issuance of the Bonds are intended, and may be relied upon,
as certifications and expectations described in Section 1.148-1
et seq. of the U.S. Treasury Regulations dealing with arbitrage
and rebate (the "Regulations"). The covenants and agreements
contained herein and at the time of the issuance of the Bonds are
made for the benefit of the registered owners from time to time
of the Bonds. The Corporate Authorities and the Issuer agree,
certify, covenant and represent as follows:
(a) The Bonds are being issued to pay the costs of the
Project and related costs and expenses, and all of the
amounts received upon the sale of the Bonds, plus all
investment earnings thereon (the "Proceeds") are needed for
the purpose for which the Bonds are being issued.
(b) The Issuer has entered into, or will within six
months from the date of issue of the Bonds enter into,
binding contracts or commitments obligating it to spend at
least 5% of the proceeds of the Bonds for constructing,
acquiring and installing the Project. It is expected that
the work of acquiring, constructing and installing the
Project will continue to proceed with due diligence to
completion reasonably expected to be on or before January 1,
1998, at which time all of the Proceeds will have been
spent.
(c) The Issuer has on hand no funds which could
legally and practically be used for the Project which are
not pledged, budgeted, earmarked or otherwise necessary to
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be used for other purposes. Accordingly, no portion of the
Proceeds will be used (i) directly or indirectly to replace
funds of the Issuer or any agency, department or division
thereof that could be used for the Project, or (ii) to
replace any proceeds of any prior issuance of obligations by
the Issuer. No portion of the Bonds is being issued solely
for the purpose of investing the Proceeds at a Yield higher
than the Yield on the Bonds. For purposes of this Section,
"Yield" means that yield (that is, the discount rate) which
when used in computing the present worth of all payments of
principal and interest to be paid on an obligation (using
semi-annual compounding on the basis of a 360-day year)
produces an amount equal to the purchase price of the Bonds,
including accrued interest, and the purchase price of the
Bonds is equal to the first offering price at which more
than 10% of the principal amount of each maturity of the
Bonds is sold to the public (excluding bond houses, brokers
or similar persons or organizations acting in the capacity
of underwriters or wholesalers).
(d) All principal proceeds of the Bonds will be
deposited in the Bond Proceeds Account of 1995 and used to
pay costs of the Project and costs of issuance of the Bonds,
and any accrued interest and premium received on the
delivery of the Bonds will be deposited in the Junior Debt
Service Account and used to pay the first interest due on
the Bonds. Earnings on the investment of moneys in any fund
or account will be credited to that fund or account. Other
Project costs, including issuance costs of the Bonds, will
be paid directly from other proceeds or from the Bond
Proceeds Account of 1995, and no other moneys are expected
to be deposited therein. This ordinance provides that
moneys in the Junior Depreciation Account may be applied to
pay debt service on the Bonds in the event there shall be an
insufficiency in the Junior Debt Service Account. However,
due to the expected application of such moneys to pay costs
of replacement, repair and extraordinary maintenance of
System facilities, it is unlikely such moneys will be
available for such purpose. Interest on and principal of
the Bonds will be paid from the Junior Debt Service Account.
No Proceeds will be used more than thirty (30) days after
the date of issue of the Bonds for the purpose of paying any
principal or interest on any other issue of bonds, notes,
certificates or warrants or on any installment contract or
other obligation of the Issuer or for the purpose of
replacing any funds of the Issuer used for such purpose.
(e) The Junior Debt Service Account is established to
achieve a proper matching of revenues and earnings with debt
service in each year. Other than any amounts held to pay
principal of matured Bonds that have not been presented for
payment, it is expected that any moneys deposited in the
Junior Debt Service Account will be spent within the
12-month period beginning on the date of deposit therein.
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Any earnings from the investment of amounts in the Junior
Debt Service Account will be spent within a one-year period
beginning on the date of receipt of such investment
earnings. Other than any amounts held to pay principal of
matured Bonds that have not been presented for payment, it
is expected that the Junior Debt Service Account will be
depleted at least once a year, except for a reasonable
carryover amount not to exceed the greater of (i) one-year's
earnings on the investment of moneys in the Junior Debt
Service Account, or (ii) in the aggregate one-twelfth
(1/12th) of the annual debt service on the Bonds.
(f) Other than the Junior Debt Service Account, no
funds or accounts, including the Junior Depreciation
Account, have been or are expected to be established, and no
moneys or property have been or are expected to be pledged
(no matter where held or the source thereof) which will be
available to pay, directly or indirectly, the Bonds or
restricted so as to give reasonable assurance of their
availability for such purposes. No property of any kind is
pledged to secure, or is available to pay, obligations of
the Issuer to any credit enhancer or liquidity provider.
(g) (i) All amounts on deposit in the Bond Proceeds
Account of 1995 or the Junior Debt Service Account and all
Proceeds, no matter in what funds or accounts deposited
("Gross Proceeds"), to the extent not exempted in (ii)
below, and all amounts in any fund or account pledged
directly or indirectly to the payment of the Bonds which
will be available to pay, directly or indirectly, the Bonds
or restricted so as to give reasonable assurance of their
availability for such purpose contrary to the expectations
set forth in (f) above, shall be invested at market prices
and at a Yield not in excess of the Yield on the Bonds plus,
for amounts in the Bond Proceeds Account of 1995 to be
transferred to finance System improvements or to the Junior
Debt Service Account only, 1/8 of 1%.
(ii) The following may be invested without Yield
restriction:
(A) amounts invested in obligations
described in Section 103(a) of the Internal
Revenue Code of 1986, as amended (but not
specified private activity bonds as defined in
Section 57(a)(5)(C) of the Code), the interest on
which is not includable in the gross income of any
registered owner thereof for federal income tax
purposes ("Tax-Exempt Obligations");
(B) amounts deposited in the Junior Debt
Service Account that are reasonably expected to be
expended within thirteen (13) months from the
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deposit date and have not been on deposit therein
for more than thirteen (13) months;
(C) amounts, if any, in the Bond Proceeds
Account of 1995 to be applied to System
improvements prior to the earlier of completion
(or abandonment) of such improvements or three (3)
years from the date of issue of the Bonds;
(D) an amount not to exceed the lesser of
$1,800,000 or 5% of Bond proceeds;
(E) all amounts for the first thirty (30)
days after they become Gross Proceeds (e.g., date
of deposit in any fund or account securing the
Bonds); and
(F) all amounts derived from the investment
of the Proceeds for a period of one (1) year from
the date received.
(h) Subject to (q) below, once moneys are subject to
the Yield limits of (g)(i) above, such moneys remain Yield
restricted until they cease to be Gross Proceeds.
(i) As set forth in Section 148(f)(4)(D) of the
Internal Revenue Code of 1986, as amended, the Issuer is
excepted from the required rebate of arbitrage profits on
the Bonds because the Issuer is a governmental unit with
general taxing powers, none of the Bonds is a "private
activity bond" as defined in Section 141(a) of the Internal
Revenue Code of 1986, as amended, all the net proceeds of
the Bonds are to be used for the local government activities
of the Issuer, and the aggregate face amount of all
tax-exempt obligations (including "qualified 501(c)(i)
bonds" and excluding other than "private activity bonds" as
defined in Internal Revenue Code of 1986, as amended) issued
by the Issuer and all subordinate entities thereof (of which
there are none) during the calendar year 1995, including the
Bonds, is not reasonably expected to exceed $5,000,000.
(j) None of the Proceeds will be used, directly or
indirectly, to replace funds which were used in any business
carried on by any person other than a state or local
governmental unit.
(k) The payment of the principal of or the interest on
the Bonds will not be, directly or indirectly (A) secured by
any interest in (i) property used or to be used for a
private business use by any person other than a state or
local governmental unit, or (ii) payments in respect of such
property, or (B) derived from payments (whether or not by or
to the Issuer), in respect of property, or borrowed money,
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used or to be. used for a private business use by any person
other than a state or local governmental unit.
(1) None of the Proceeds will be used, directly or
indirectly, to make or finance loans to persons other than a
state or local governmental unit.
(m) No user of the Project, other than a state or
local government unit, will use the Project 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 the Project as a result of (i) ownership, or (ii)
actual or beneficial use pursuant to a lease or a management
or incentive payment contract, or (iii) any other similar
arrangement.
(n) Beginning on the 15th day prior to the Bond sale
date, the Issuer has not sold or delivered, and will not
sell or deliver, (nor will it deliver within 15 days after
the date of issuance of the Bonds) any other obligations
pursuant to a common plan of financing, which will be paid
out of substantially the same source of funds (or which will
have substantially the same claim to be paid out of
substantially the same source of funds) as the Bonds or will
be paid directly or indirectly from Proceeds.
(o) No portion of the Project is expected to be sold
or otherwise disposed of prior to the last maturity of the
Bonds.
(p) The Issuer has not been notified of any
disqualification or proposed disqualification of it by the
Internal Revenue Service as a bond issuer which may certify
bond issues under Section 1.148-1 et se of the
Regulations.
(q) The Yield restrictions contained in (g) above or
any other restriction or covenant contained herein need not
be observed and may be changed if the Issuer receives an
opinion of Bond Counsel to the effect that such
non-observance or change will not adversely affect the
tax-exempt status of interest on the Bonds to which the
Bonds otherwise are entitled.
(r) The Issuer 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 and that Bond Counsel should be
contacted if such changes do occur.
(s) The Corporate Authorities have no reason to
believe the facts, estimates, circumstances and expectations
set forth herein are untrue or incomplete in any material
respect. On the basis of such facts, estimates,
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circumstances and expectations, it is not expected that the
Proceeds or any other moneys or property will be used in a
manner that will cause the Bonds to be private activity
bonds, arbitrage bonds or hedge bonds within the meaning of
Sections 141, 148 or 149(g) of the Internal Revenue Code of
1986, as amended, and of applicable regulations. To the
best of the knowledge and belief of the Corporate
Authorities, such expectations are reasonable, and there are
no other facts, estimates and circumstances that would
materially change such expectations.
The Issuer also agrees and covenants with the registered owners
of the Bonds from time to time outstanding that, to the extent
possible under Illinois law, it will comply with all present
federal tax law and related regulations and with whatever federal
tax law is adopted and regulations promulgated in the future
which apply to the Bonds and affect the tax-exempt status of the
Bonds.
Section 17. E~rther Assurances and Actions. The
Corporate Authorities hereby authorize the officials of the
Issuer responsible for issuing the Bonds, the same being the
Mayor, Clerk and Treasurer of the Issuer, to make such further
filings, covenants, certifications and supplemental agreements as
may be necessary to assure that the Project, the Bonds and
related proceeds will not cause the Bonds to be private activity
bonds, arbitrage bonds or hedge bonds and to assure that the
interest on the Bonds will be excluded from gross income for
federal income tax purposes. In connection therewith, the Issuer
and the Corporate Authorities further agree: (a) through the
officers of the Issuer, to make such further specific covenants,
representations as shall be true, correct and complete, and
assurances as may be necessary or advisable; (b) to consult with
Bond Counsel approving the Bonds and to comply with such advice
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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 Bonds; (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, to
employ and pay fiscal agents, financial advisors, attorneys, and
other persons to assist the Issuer in such compliance.
Section 18. General Covenants. The Issuer covenants
and agrees with the registered owners of the Outstanding Bonds,
so long as there are any Outstanding Bonds ( as defined herein) ,
as follows:
(a) The Issuer will take all action necessary to
impose, levy and collect the Pledged Revenues and Pledged
Taxes in the manner contemplated by this ordinance and such
Pledged Revenues shall not be less than as shall be required
under Section 15 of the Local Government Debt Reform Act to
maintain the Bonds as Alternate Bonds.
(b) The Issuer covenants that it will, while any of
the Bonds shall remain outstanding, charge rates and fees
for usage of the System which are sufficient to provide for
or pay each of the following in any given year: (1)
Operation and Maintenance Expenses of the System (but not
including depreciation); (2) debt service on all Outstanding
revenue bonds payable from the Net Revenues of the System,
including the 1961 Bonds; (3) all amounts required to meet
any fund or account requirements with respect to the Bonds
or any other bonds payable from Net Revenues of the System;
(4) any other contractual or tort liability obligations, if
any, payable from such Net Revenues of the System; and (5)
in each year, an amount not less than 1.25 times the debt
service for all (i) Alternate Bonds payable from Net
Revenues, including the Bonds Outstanding; and (ii)
Alternate Bonds proposed to be issued and payable from Net
Revenues.
(c) Whenever the 125% coverage in subsection (b) above
is not effected or the Bonds at any time fail to qualify as
Alternate Bonds not subject to any applicable debt limit
under Section 15 of the Local Government Debt Reform Act or
taxes are levied and extended and collected as in Section 8
hereof, the Issuer covenants to promptly have prepared a
financial analysis of the System by an independent
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consulting accountant or other qualified professional
employed for that purpose, and further, to send a copy of
such analysis, when completed, to the Purchaser of the Bonds
along with a letter indicating what action the Issuer has
taken responsive to such study and to comply with Section 15
of the Local Government Debt Reform Act.
(d) The Issuer will make and keep proper books and
accounts (separate and apart from all other records and
accounts of the Issuer), in which complete entries shall be
made of all transactions relating to the Pledged Revenues
and the operation of the System, and hereby covenants that
within ninety (90) days following the close of each Fiscal
Year, it will cause the books and accounts related to the
Pledged Revenues and the System to be audited by independent
certified public accountants. Such audit will be available
for inspection by the registered owners of any of the Bonds.
Upon availability, the Issuer will send to the Purchaser a
copy of such audit and of its general audit in each year.
Each such audit, in addition to whatever matters may be
thought proper by the accountants to be included therein,
shall, without limiting the generality of the foregoing,
include the following:
(i) A balance sheet as of the end of such Fiscal
Year, including a statement of the amount held in each
of the accounts under this ordinance.
(ii) A list of all insurance policies in force at
the end of the Fiscal Year, setting out as to each
policy the amount of the policy, the risks covered, the
name of the insurer, and the expiration date of the
policy.
(iii) The amount and details of all Outstanding
bonds.
(iv) The accountant's comments regarding the
manner in which the Issuer has carried out the
accounting requirements of this ordinance (including as
to the Alternate Bond Status of the Bonds) and has
complied with Section 15 of the Local Government Debt
Reform Act, and the accountant's recommendations for
any changes.
It is further covenanted and agreed that a copy of each such
audit shall be furnished upon completion to the Purchaser,
and a summary thereof shall be furnished to the registered
owner of any Bond upon request.
(e) The Issuer will keep its books and accounts in
accordance with generally accepted fund reporting practices
for local government entities and enterprise funds;
provided, however, that the monthly credits to the Junior
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Debt Service Account shall be in cash, and such funds shall
be held separate and apart in cash and investments. For the
purpose of determining whether sufficient cash and
investments are on deposit in such accounts under the terms
and requirements of this ordinance, investments shall be
valued at the lower of the cost or market price on the
valuation date thereof, which valuation date shall be not
less frequently than annually.
(f) The Issuer will take no action in relation to the
Pledged Revenues or the Pledged Taxes which would
unfavorably affect the security of any of the Outstanding
Bonds or the prompt payment of the principal and interest
thereon.
(g) The registered owner of any Bond may proceed by
civil action to compel performance of all duties required by
law and this ordinance.
(h) The Issuer will adopt a budget and/or approve
appropriations for the System prior to the beginning of each
Fiscal Year, subject to all applicable state laws, providing
for payment of all sums to be due in the Fiscal Year so as
to comply with the terms of this ordinance. The budget may
include in its estimate of income the use of available
surplus moneys or other funds of the Issuer appropriated for
such purposes. If during the Fiscal Year there are
extraordinary receipts or payments of unusual cost, the
Issuer will adopt an amended budget for the remainder of the
Fiscal Year, providing for receipts or payments pursuant to
this ordinance.
(i) The Issuer will comply with the special covenants
concerning Alternate Bonds as required by Section 15 of the
Local Government Debt Reform Act and Section 15 of this
ordinance.
(j) The Issuer will not sell, lease, loan, mortgage or
in any manner dispose of or encumber the System (subject to
the right of the Issuer to issue additional bonds as
provided in the Series 1989 Bond Ordinance and this
ordinance, to issue obligations subordinate to the
Outstanding Bonds, and to dispose of real or personal
property which is no longer useful or necessary to the
operation of the System), and the Issuer will take no action
in relation to the System which would unfavorably affect the
security of any of any Outstanding bonds or the prompt
payment of the principal and interest thereon.
(k) The Issuer will pay, or cause to be paid, as the
same become due, all taxes and governmental charges of any
kind whatsoever that may at any time be lawfully assessed,
imposed or levied against the System or the Issuer.
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(1) The Issuer will carry insurance on the System of
the kinds and in the amounts which are usually carried by
private parties operating similar properties, covering such
risks as shall be recommended by a competent consulting
engineer or insurance consultant employed by the Issuer for
the purpose of making such recommendations. All moneys
received for loss under such insurance policies shall be
deposited in a segregated insurance account and used in
making good the loss or damage in respect of which they were
paid, either by repairing the property damaged or making
replacement of the property destroyed, and provision for
making good such loss or damage shall be made within ninety
(90) days from the date of the loss. The payment of
premiums for all insurance policies required under the
provisions of this covenant in connection with the System
shall be considered an Operation and Maintenance Expense.
The proceeds derived from any and all policies for workers'
compensation or public liability shall be paid into the
Operation and Maintenance Account and used in paying the
claims on account of which they were received.
(m) After their issuance, the Bonds shall be
incontestable by the Issuer.
Section 19. Ordinance to Constitute a Contract. The
provisions of this ordinance shall constitute a contract between
the Issuer and the registered owners of the Bonds. Any pledge
made in this ordinance and the provisions, covenants and
agreements herein set forth to be performed by or on behalf of
the Issuer shall be for the equal benefit, protection and
security of the registered owners of any and all of the Bonds.
All of the Bonds, regardless of the time or times of their
issuance, shall be of equal rank without preference, priority or
distinction of any of the Bonds over any other thereof except as
expressly provided in or pursuant to this ordinance. This
ordinance and the Preliminary Ordinance shall constitute full
authority for the issuance of the Bonds, and to the extent that
the provisions thereof conflict with the provisions of any other
ordinance or resolution of the Issuer, the provisions of this
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ordinance and the Preliminary Ordinance shall control.
Section 20. Severability and No Contest. If any
section, paragraph or provision of this ordinance shall be held
to be invalid or unenforceable for any reason, the invalidity or
unenforceability of such section, paragraph or provision shall
not affect any of the remaining provisions of this ordinance or
any ordinance supplemental hereto. Upon the issuance of the
Bonds, neither the Bonds nor this ordinance shall be subject to
contest by or in respect of the Issuer.
Section 21. Bank Qualified Bonds. Pursuant to Section
265(b)(3) of the Internal Revenue Code of 1986, as amended, the
Issuer hereby designates the Bonds as "qualified tax-exempt
obligations" as defined in Section 265(b)(3) of the Internal
Revenue Code of 1986, as amended. The Issuer represents that the
reasonably anticipated amount of tax-exempt obligations that will
be issued by the Issuer and all subordinate entities of the
Issuer during the calendar year in which the Bonds are issued
will not exceed $10,000,000 (and reasonably expects not to exceed
$5,000,000) within the meaning of Section 265(b)(3) of the
Internal Revenue Code of 1986, as amended. The Issuer covenants
that it will not so designate and issue more than $10,000,000
(and reasonably expects not to exceed $5,000,000) aggregate
principal amount of tax-exempt obligations in such calendar year.
For purposes of this Section, the term "tax-exempt obligations"
includes "qualified 501(c)(3) Bonds" (as defined in the Section
145 of the Internal Revenue Code of 1986, as amended) but does
not include other "private activity bonds" (as defined in Section
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141 of the Internal Revenue Code of 1986, as amended).
Section 22. Conflict. All ordinances, resolutions or
parts thereof in conflict herewith be and the same are hereby
superseded to the extent of such conflict and this ordinance
shall be in full force and effect forthwith upon its adoption.
Section 23. Effective Date. This ordinance shall
become effective immediately upon its passage and approval in the
manner provided by law, and upon its becoming effective and prior
to the issuance of the Bonds a certified copy of this ordinance
shall be filed with the County Clerk of Fulton County, Illinois.
Upon motion by Alderman Chester Phillips seconded by
Aldernian James May adopted this 7th day of February 1995,
by roll call vote as follows:
Aye s ( Names) : Al riPrmPn ('hart P4 Chatmian~~I~S~`1a.~, .T~~ Rnhl Pr,
T:P rin MP"(~P, T_ aw Sarff , C~IPGt'PY Phil l i r+~i_ Cnav _
Nays ( Names) : NnnP
Absent ( Names) : Al clerm^r R^h~Yt M^~ 1 Pnk
APPROVED : February 7th ~ 19 9 5
r',2d ~lZ~r1~
or
(SEAL)
ATTEST:
erk
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