HomeMy WebLinkAboutOrdinance #4004 (Obligation Refunding Bond) EXTRACT of MINUTES of a regular public meeting of the City
Council of the City of Canton, Fulton County, Illinois, held in the
Historic Depot, 50 North 4th Avenue, Canton, Illinois, in said City,
at 6:30 o'clock P.M., on the 15th day of September,2015.
The Mayor called the meeting to order and directed the City Clerk to call the roll.
Upon the roll being called, Jeffrey Fritz, the Mayor, and the following Aldermen were
physically present at said location: Ryan Mayhew, Tad Putrich, Gerald Ellis, Justin Nelson and
Angela Hale.
The following Aldermen were allowed by a majority of the members of the City Council
in accordance with and to the extent allowed by rules adopted by the City Council to attend the
meeting by video or audio conference: _
No Alderman was not permitted to attend the meeting by video or audio conference.
The following Aldermen were absent and did not participate in the meeting in any matter
or to any extent whatsoever: Craig West, Jim Nelson and John Lovell
The Mayor announced that a proposal had been received from Commerce Bank, Peoria,
Illinois for the purchase alternate revenue bonds to be issued by the City for the purpose of
paying the costs of refunding certain of the City's outstanding alternate bonds and that the City
Council would consider the adoption of an ordinance providing for the issue of said bonds and
the levy of a direct annual tax sufficient to pay the principal and interest thereon. The Mayor also
summarized the pertinent terms of said proposal and said bonds, including the length of maturity,
rates of interest,purchase price and tax levy for said bonds.
Whereupon, Alderman presented, and the City Clerk made
available to the Aldermen and interested members of the public, complete copies of an ordinance
entitled:
3848121.01.07.B
2233468•EPB•9/18/15
Whereupon, Alderman presented, and the City Clerk made
available to the Aldermen and interested members of the public, complete copies of an ordinance
entitled:
AN ORDINANCE providing for the issue of $3,325,000 General
Obligation Refunding Bonds (Alternate Revenue Source), Series
2015, of the City of Canton, Fulton County, Illinois, for the
purpose of refunding certain outstanding bonds of the City and for
the levy of a direct annual tax sufficient to pay the principal and
interest on said bonds and authorizing the sale of said bonds to the
purchaser thereof.
(the "Bond Ordinance
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ORDINANCE No. qW
AN ORDINANCE providing for the issue of $3,325,000 General
Obligation Refunding Bonds (Alternate Revenue Source), Series
2015, of the City of Canton, Fulton County, Illinois, for the
purpose of refunding certain outstanding bonds of the City, for the
levy of a direct annual tax sufficient to pay the principal and
interest on said bonds and authorizing the sale of said bonds to the
purchaser thereof.
WHEREAS the City of Canton, Fulton County, Illinois (the "City"), is a duly organized
and existing municipality and unit of local government created under the provisions of the laws
of the State of Illinois, is now operating under the provisions of the Illinois Municipal Code, as
supplemented and amended (the "Code"), and for many years has owned and operated a
municipally-owned waterworks and sewerage system as a combined utility (the "System") as set
forth in Division 139 of Article 11 of the Code; and
WHEREAS the City has heretofore issued and there are now outstanding General
Obligation Bonds (Alternate Revenue Source), Series 2005, dated October 1, 2005 (the "Prior
Bonds"); and
WHEREAS the City Council of the City(the "Corporate Authorities")has determined that
it is advisable, necessary and in the best interests of the City, its residents, and the users of its
System in order to promote the public health, welfare, safety and convenience, to refund a
portion of the outstanding Prior Bonds (said Prior Bonds to be refunded being referred to herein
as the "Refunded Bonds") in order to realize debt service savings (the "Refunding"); and
WHEREAS, the Refunded Bonds are presently outstanding and unpaid and are binding and
subsisting legal obligations of the City; and
WHEREAS, in accordance with the terms of the Refunded Bonds, certain of the Refunded
Bonds may be called for redemption in advance of their maturity, and it is necessary and
desirable to make such call for the redemption of such Refunded Bonds on their earliest possible
call date, and provide for the giving of proper notice to the registered owners of such Refunded
Bonds; and
WHEREAS, the expenses and contingencies related to the Refunding include legal,
financial and accounting services related to the accomplishment of said purposes and the
issuance of bonds therefor; bond discount; bond registrar, paying agent, and other related banking
fees; printing and publication costs; and other miscellaneous costs; and
WHEREAS, the estimated costs of effectuating the Refunding, including, as applicable,
such expenses and contingencies, is not more than $3,325,000 and there are insufficient funds on
hand and lawfully available to pay such costs; and
WHEREAS, the City pursuant to the provisions of Division 139 of Article 11 of the Code
is authorized to issue its waterworks and sewerage refunding bonds for the purpose of providing
funds to pay the costs of the Refunding; and
WHEREAS, pursuant to the provisions of the Local Government Debt Reform of the State
of Illinois, as amended (the "Debt Reform Act"), alternate bonds as defined in the Debt Reform
Act may be issued pursuant to Applicable Law as defined in the Debt Reform Act for the
refunding purpose aforesaid, i.e., the City is authorized to issue revenue bonds (without
referendum or right of petition by the electors) pursuant to Division 4 of Article 8 and
Division 139 of Article 11 of the Code, and further pursuant to the provisions of the Debt
Reform Act and, accordingly, is authorized to issue alternate bonds in lieu of said revenue bonds
pursuant to the provisions of the Debt Reform Act; and
WHEREAS, the Debt Reform Act provides that alternate bonds can be issued to refund the
Refunded Bonds without meeting any of the provisions and requirements of Section 15 of the
Debt Reform Act provided that the term of such alternate bonds is not longer than the term of the
Refunded Bonds and that the debt service payable in any year on such alternate bonds shall not
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exceed the debt service payable in such year on the Refunded Bonds (the "Refunding
Conditions"); and
WHEREAS, the City Council has heretofore, and it is hereby expressly, determined that the
Refunding Conditions can be met and accordingly, the Bonds, as hereinafter defined, can be
issued to pay the costs of the Refunding; and
WHEREAS, the Bonds to be issued will be payable from the Pledged Revenues and the
Pledged Taxes, both as hereinafter defined; and
WHEREAS, the City has heretofore entered into a Loan Agreement with the Illinois
Environmental Protection Agency, dated June 26, 2001 (the "IEPA Loan Agreement") pursuant
to Ordinance No. 1698, adopted by the City Council of the City on June 5, 2001 for the purpose
of paying a part of the cost of constructing, improving and extending the System; and
WHEREAS the IEPA Loan Agreement contains provisions for the issuance of additional
parity obligations, including the Bonds; and
WHEREAS pursuant to the IEPA Loan Agreement, the Illinois Environmental Protection
Agency has provided its consent to issue the Bonds on a parity with the City's outstanding loan
evidenced by the IEPA Loan Agreement; and
WHEREAS, the Bonds will be issued on a parity,with the Prior Bonds not being refunded,
the IEPA Loan Agreement, the City's General Obligation Waterworks and Sewerage Refunding
Bonds (Alternate Revenue Source), Series 2012 (the "Series 2012 Bonds") and the City's
General Obligation Waterworks and Sewerage Refunding Bonds (Alternate Revenue Source),
Series 2013 (the "Series 2013 Bonds"); and
WHEREAS, the Corporate Authorities do hereby find and determine that the Bonds are
being issued pursuant to Section 15 of the Debt Reform Act; and
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WBEREAS, the County Clerk of Fulton County, Illinois (the "County Clerk"), is therefore
authorized to extend and collect said direct annual and valorem tax so levied for the payment of
the Bonds for the Refunding, as alternate bonds, without limitation as to rate or amount:
NOW THEREFORE Be It Ordained by the City Council of the City of Canton, Fulton
County, Illinois as follows:
Section 1. Definitions The following words and terms used in this Ordinance shall
have the following meanings unless the context or use clearly indicates another or different
meaning is intended:
"Act" or "Debt Reform Act" means the Local Government Debt Reform Act of the State
of Illinois, as amended.
"Additional Bonds" means any alternate bonds issued in the future in accordance with
the provisions of the Debt Reform Act on a parity with and sharing ratably and equally in the
Pledged Revenues with the Bonds.
"Alternate Bond and Interest Subaccount" means the Alternate Bond and Interest
Subaccount maintained hereunder and further described by Section 12 of this Ordinance.
"Bond" or "Bonds" means one or more, as applicable, of the $3,325,000 General
Obligation Refunding Bonds (Alternate Revenue Source), Series 2015, authorized to be issued.
by this Ordinance.
"Bond Fund" means the Series 2015 Alternate Bond Fund established hereunder and
further described by Section 15 of this Ordinance.
"Bond Register" means the books of the City kept by the Bond Registrar to evidence the
registration and transfer of the Bonds.
"Bond Registrar" means Commerce Bank, Peoria, Illinois, or successor thereto or
designated hereunder, in its respective capacities as bond registrar and paying agent.
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"City" means the City of Canton, Fulton County,Illinois.
"Code" means the Illinois Municipal Code, as supplemented and amended.
"Corporate Authorities" means the City Council of the City.
"County Clerk" means the County Clerk of The County of Fulton, Illinois.
"Fiscal Year" means that twelve-calendar month period beginning on May 1 of the
calendar year and ending on the next succeeding April 30.
"Future Bond Ordinances" means the ordinances of the City authorizing the issuance of
bonds payable from the Revenues, but not including this Ordinance or any other ordinance
authorizing the issuance of Additional Bonds.
"IRC" means the Internal Revenue Code of 1986, as amended.
"Net System Revenues" means moneys to the credit of the Alternate Bond and Interest
Subaccount within the Surplus Account of the Waterworks and Sewerage Fund, said Surplus
Account consisting of the funds remaining in the Waterworks and Sewerage Fund after the
required monthly deposits and credits have been made to the Operation and Maintenance
Account, the Depreciation Account and any other accounts as may be created in the future, of
said Waterworks and Sewerage Fund.
"Operation and Maintenance Costs" means all costs of operating, maintaining and
routine repair of the System, including wages, salaries, costs of materials and supplies, power,
fuel, insurance, taxes, including rebate of excess arbitrage profits to the U.S. government, and
purchase of water or sewage treatment services (including all payments by the City pursuant to
long-term contracts for such services); but excluding debt service, depreciation, capital
improvements or replacements (including meter replacements) or engineering expenses in
anticipation thereof or in connection therewith, or any reserve requirements; and otherwise
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determined in accordance with generally accepted accounting principles for municipal enterprise
funds.
"Ordinance" means this Ordinance as originally adopted and as the same may from time
to time be amended or supplemented in accordance with terms hereof.
"Other Funds" means such other funds of the City as may be necessary and on hand from
time to time and lawfully available to pay principal and interest on the Bonds.
"Outstanding" means the IEPA Loan Agreement, the unrefunded portion of the Prior
Bonds, the Series 2012 Bonds, the Series 2013 Bonds, the Bonds and Additional Bonds which
are outstanding and unpaid;provided, however, such term shall not include any of the IEPA Loan
Agreement, the unrefunded portion of the Prior Bonds, the Series 2012 Bonds, the Series 2013
Bonds, the Bonds or Additional Bonds (i)which have matured and for which moneys are on
deposit with proper paying agents or are otherwise sufficiently available to pay all principal
thereof and interest thereon or (ii)the provision for payment of which has been made by the City
by the deposit in an irrevocable trust or escrow of funds or direct, full faith and credit obligations
of the United States of America, the principal of and interest on which will be sufficient to pay at
maturity or as called for redemption all the principal of and interest on such IEPA Loan
Agreement, the unrefunded portion of the Prior Bonds, the Series 2012 Bonds, the Series 2013
Bonds,the Bonds or Additional Bonds.
"Pledged Moneys"means, collectively,the Pledged Revenues and the Pledged Taxes.
"Pledged Revenues" means (a)Net System Revenues and (b) Other Funds.
"Pledged Taxes" means the ad valorem taxes levied against all of the taxable property in
the City without limitation as to rate or amount, pledged hereunder by the City as security for the
Bonds.
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"Revenues" means all income from whatever source derived from the System, including
(i) investment income; (ii) connection, permit and inspection fees and the like; (iii)penalties and
delinquency charges; (iv) capital development, reimbursement, or recovery charges and the like;
and (v) annexation or pre-annexation charges insofar as designated by the Corporate Authorities
as paid for System connection or service; but excluding expressly (a)non-recurring income from
the sale of property of the System; (b) governmental or other grants; and (c) advances or grants
made from the City; and as otherwise determined in accordance with generally accepted
accounting principles for municipal enterprise funds.
"System" refers to all property, real, personal or otherwise owned or to be owned by the
City or under the control of the City, and used for waterworks and sewerage purposes, including
any and all further extensions, improvements and additions to the System.
"Tax-exempt" means, with respect to the Bonds, the status of interest paid and received
thereon as not includible in the gross income of the owners thereof under the IRC for federal
income tax purposes except to the extent that such interest will be taken into account in
computing an adjustment used in determining the alternative minimum tax for certain
corporations.
"Waterworks and Sewerage Fund" means the Waterworks and Sewerage Fund of the
City created hereunder and further described in Section 11 of this Ordinance.
Section 2. Incorporation of Preambles. The Corporate Authorities hereby find that the
recitals contained in the preambles to this Ordinance are true, correct and do hereby incorporate
them into this Ordinance by this reference.
Section 3. Determination to Issue Bonds. It is necessary and in the best interests of the
City for the City to undertake the Refunding in accordance with the estimate of costs therefor as
described, and to issue the Bonds to enable the City to pay the costs thereof.
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Section 4. Authorization. It is hereby found and determined that the Corporate
Authorities has been authorized by law to borrow $3,325,000 upon the credit of the City and as
evidence of such indebtedness to issue bonds of the City to said amount, the proceeds of said
bonds to be used for the Refunding, and that it is necessary to borrow $3,325,000 of said
authorized sum and issue said bonds in evidence thereof for purpose of paying costs of the
Refunding, and that it is necessary and for the best interests of the City that there be issued
$3,325,000 of the bonds so authorized for the Refunding.
Section 5. Bond Details. For the purpose of providing for the payment of the.costs of
the Refunding, there shall be issued and sold the Bonds in the aggregate principal amount of
$3,325,000. The Bonds shall each be designated "General Obligation Refunding Bond
(Alternate Revenue Source), Series 2015," and be dated the date of issuance, and shall also bear
the date of authentication thereof. The Bonds shall be in fully registered form, shall be in
denominations of $100,000 each and authorized integral multiples of $5,000 in excess thereof
(but no single Bond shall represent principal maturing on more than one date), shall be numbered
in such reasonable fashion as may be selected by the Bond Registrar, and shall mature serially on
December 1 of the years (subject to prior redemption as set forth herein), in the amounts and
bearing interest at the rates percent per annum as follows:
2016 $1,640,000 1.10%
2017 1,685,000 1.30%
Each Bond shall bear interest from the later of its Dated Date as hereinabove provided or
from the most recent interest payment date to which interest has been paid or duly provided for
until the principal amount of such Bond is paid or duly provided for, such interest (computed
upon the basis of a 360-day year of twelve 30-day months) being payable on June 1, 2016, and
semiannually thereafter on June 1 and December 1 of each year. Interest on each Bond shall be
paid by check or draft of the Bond Registrar, payable upon presentation thereof in lawful money
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of the United States of America, to the person in whose name such Bond is registered at the close
of business on the 15th day of the month next preceding the interest payment date. The principal
of the Bonds shall be payable in lawful money of the United States of America upon presentation
thereof at the principal office of the Bond Registrar.
Section 6 Execution; Authentication. The Bonds shall be executed on behalf of the
City with the manual or duly authorized facsimile signature of the Mayor and attested with the
manual or duly authorized facsimile signature of the City Clerk or duly authorized City Clerk, as
they may determine, and shall have impressed or imprinted thereon the corporate seal or
facsimile thereof of the City. In case any officer whose signature shall appear on any Bond shall
cease to be such officer before the delivery of such Bond, such signature shall nevertheless be
valid and sufficient for all purposes, the same as if such officer had remained in office until
delivery.
All Bonds shall have thereon a certificate of authentication substantially in the form
hereinafter set forth duly executed by the Bond Registrar as authenticating agent of the City and
showing the date of authentication. No Bond shall be valid or obligatory for any purpose or be
entitled to any security or benefit under this Ordinance unless and until such certificate of
authentication shall have been duly executed by the Bond Registrar by manual 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 it 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 7. Registration of Bonds; Persons Treated as Owners. The City shall cause
books (the "Bond Register") for the registration and for the transfer of the Bonds as provided in
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this Ordinance to be kept at the principal office of the Bond Registrar, which is hereby
constituted and appointed the registrar of the City. The City is authorized to prepare, and the
Bond Registrar shall keep custody of, multiple Bond blanks executed by the City for use in the
transfer and exchange of Bonds.
Upon surrender for transfer of any Bond at the principal office of the Bond Registrar, duly
endorsed by, or accompanied by a written instrument or instruments of transfer in form
satisfactory to the Bond Registrar and duly executed by, the registered owner or his or her
attorney duly authorized in writing, the City shall execute and the Bond Registrar shall
authenticate, date and deliver in the name of the transferee or transferees a new fully registered
Bond or Bonds of the same maturity of authorized denominations, for a like aggregate principal
amount. Any fully registered Bond or Bonds may be exchanged at said principal office of the
Bond Registrar for a like aggregate principal amount of Bond or Bonds of the same maturity of
other authorized denominations. The execution by the City of any fully registered Bond shall
constitute full and due authorization of such Bond and the Bond Registrar shall thereby be
authorized to authenticate, date and deliver such Bond,provided, however, the principal amount
of outstanding Bonds of each maturity authenticated by the Bond Registrar shall not exceed the
authorized principal amount of Bonds for such maturity less previous retirements.
The Bond Registrar shall not be required to transfer or exchange any Bond during the
period beginning at the close of business on the 15th day of the month next preceding any
interest payment date on such Bond and ending at the opening of business on such interest
payment date.
The person in whose name any Bond shall be registered shall be deemed and regarded as
the absolute owner thereof for all purposes, and payment of the principal of or interest on any
Bond shall be made only to or upon the order of the registered owner thereof or his or her legal
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representative. All such payments shall be valid and effectual to satisfy and discharge the
liability upon such Bond to the extent of the sum or sums so paid.
No service charge shall be made for any transfer or exchange of Bonds, but the City or the
Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Bonds except in the
case of the issuance of a Bond or Bonds for the unredeemed portion of a Bond surrendered for
redemption.
Section 8. Form of Bonds. The Bonds shall be in substantially the form hereinafter
set forth;provided, however, that if the text of the Bonds is to be printed in its entirety on the
front side of the Bonds, then the second paragraph on the front side and the legend "See Reverse
Side for Additional Provisions" shall be omitted and the text of paragraphs set forth for the
reverse side shall be inserted immediately after the first paragraph.
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[Form of Bond- Front Side]
REGISTERED REGISTERED
No. $
UNITED STATES OF AMERICA
STATE OF ILLINOIS
COUNTY OF FULTON
CITY OF CANTON
GENERAL OBLIGATION REFUNDING BOND
(ALTERNATE REVENUE SOURCE)
SERIES 2015
See Reverse Side for
Additional Provisions
Interest Maturity Dated
Rate: % Date: December 1, 20_ Date: September 30, 2015
Registered Owner: COMMERCE BANK,PEORIA,ILLINOIS
Principal Amount: Dollars
KNOW ALL PERSONS BY THESE PRESENTS that the City of Canton, Fulton County,
Illinois, a municipality and political subdivision of the State of Illinois (the "City"), hereby
acknowledges itself to owe and for value received promises to pay to the Registered Owner
identified above, or registered assigns as hereinafter provided, on the Maturity Date identified
above, the Principal Amount identified above and to pay interest (computed on the basis of a
360-day year of twelve 30-day months) on such Principal Amount from the Dated Date of this
Bond identified above or from the most recent interest payment date to which interest has been
paid or duly provided for at the Interest Rate per annum identified above, such interest to be
payable on June 1, 2016, and semiannually thereafter on June 1 and December 1 of each year
until the Principal Amount is paid or duly provided for. The Principal Amount of this Bond is
payable in lawful money of the United States of America upon presentation at the principal office
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of Commerce Bank, Peoria, Illinois, as paying agent and bond registrar (the "Bond Registrar").
Payment of interest shall be made to the Registered Owner hereof as appearing on the Bond
Register of the City maintained by the Bond Registrar at the close of business on the 15th day of
the month next preceding the interest payment date and shall be paid by check or draft of the
Bond Registrar, payable upon presentation in lawful money of the United States of America,
mailed to the address of such Registered Owner as it appears on such registration books or at
such other address furnished in writing by such Registered Owner to the Bond Registrar.
Reference is hereby made to the further provisions of this Bond set forth on the reverse
hereof, and such further provisions shall for all purposes have the same effect as if set forth at
this place.
It is hereby certified and recited that all acts, conditions and things required to be done
precedent to and in the issuance of this Bond have been done and have happened and have been
performed in regular and due form of law; that the indebtedness of the City, including the issue
of Bonds of which this is one, does not exceed any limitation imposed by law; that provision has
been made for the collection of the Pledged Revenues, the levy and collection of the Pledged
Taxes, and the segregation of all Pledged Moneys to pay the interest hereon as it falls due and
also to pay and discharge the principal hereof at maturity; and that the City hereby covenants and
agrees that it will properly account for said Pledged Moneys and will comply with all the
covenants of and maintain the funds and accounts as provided by the Ordinance. For the prompt
payment of this Bond, both principal and interest at maturity, the full faith, credit and resources
of the City are hereby irrevocably pledged.
This Bond shall not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been signed by the Bond Registrar.
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IN WITNESS WHEREOF the City of Canton, Fulton County, Illinois, by its City Council,
has caused this Bond to be executed with the manual or duly authorized facsimile signature of its
Mayor and attested by the manual or duly authorized facsimile signature of its City Clerk and its
corporate seal or a facsimile thereof to be impressed or reproduced hereon, all as appearing
hereon and as of the Dated Date identified above.
Mayor
ATTEST:
City Clerk
[SEAL]
Date of Authentication: September 30, 2015
CERTIFICATE
OF
AUTHENTICATION
This Bond is one of the Bonds described Bond Registrar and Paying Agent:
in the within-mentioned Ordinance and is one Commerce Bank
of the General Obligation Refunding Bonds Peoria, Illinois
(Alternate Revenue:Source), Series 2015, of
the City of Canton, Fulton County, Illinois.
COMMERCE BANK,
as Bond Registrar
By
Authorized Officer
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[Form of Bond- Reverse Side]
CITY OF CANTON
FULTON COUNTY,ILLINOIS
GENERAL OBLIGATION REFUNDING BOND
(ALTERNATE REVENUE SOURCE)
SERIES 2015
This Bond is one of a series of bonds issued by the City for the purpose of paying the
costs of refunding certain of the City's outstanding bonds, pursuant to and in all respects in full
compliance with the provisions of the Local Government Debt Reform Act of the State of Illinois
as supplemented and amended (the "Act"), and Division 139 of Article 11 of the Illinois
Municipal Code, as supplemented and amended (the "Code"). The Bonds are issued pursuant to
a bond ordinance passed by the City Council of the City (the "Corporate Authorities") on the
15th day of September, 2015 (the "Ordinance"), to which reference is hereby expressly made for
further definitions and terms and to all the provisions of which the Registered Owner by the
acceptance of this Bond assents.
Under the Code and the Ordinance, the Revenues, as defined, from the operation of the
waterworks and sewerage system of the City (the "System") shall be deposited`into -the
Waterworks and Sewerage Fund of the City which shall be used only and has been pledged for
paying Operation and Maintenance Expenses, paying the principal of and interest on all bonds of
the City that are payable by their terms from the revenues of the System, providing an adequate
depreciation fund, and in making all payments required to maintain the accounts established
under the Ordinance. The City may issue future waterworks and sewerage revenue bonds, which
bonds may have a prior lien on the Revenues, or additional alternate bonds on a parity with the
Bonds, in each case pursuant to the terms of the Ordinance.
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The Bonds are payable from (i) (a)together with the City's outstanding IEPA Loan
Agreement, the unrefunded portion of the Prior Bonds, the Series 2012 Bonds and the Series
2013 Bonds (each as defined in the Ordinance), moneys to the credit of the Alternate Bond and
Interest Subaccount within the Surplus Account of the Waterworks and Sewerage Fund, said
Surplus Account consisting of the funds remaining in the Waterworks and Sewerage Fund after
the required monthly deposits and credits have been made under the Ordinance or future revenue
bond ordinances to the various accounts of the Waterworks and Sewerage Fund and (b) together
with the City's outstanding unrefunded portion of the Prior Bonds, the Series 2012 Bonds and the
Series 2013 Bonds, such other funds of the City as may be necessary and on hand from time to
time and lawfully available for such purpose (the "Pledged Revenues"), and(ii) ad valorem taxes
levied against all of the taxable property in the City without limitation as to rate or amount (the
"Pledged Taxes") (the Pledged Revenues and the Pledged Taxes being collectively called the
"Pledged Moneys"), all in accordance with the provisions of the Act and the Code.
This Bond does not and will not constitute an indebtedness of the City within the
meaning of any constitutional or statutory provision or limitation, unless the Pledged Taxes shall
be extended pursuant to the general obligation, full faith and credit promise supporting the
Bonds, in which case the amount of the Bonds then outstanding shall be included in the
computation of indebtedness of the City for purposes of all statutory provisions or limitations
until such time as an audit of the City shall show that the Bonds shall have been paid from the
Pledged Revenues for a complete City fiscal year.
This Bond is transferable by the Registered Owner hereof in person or by his or her
attorney duly authorized in writing at the principal corporate trust office of the Bond Registrar in
Peoria, Illinois, but only in the manner, subject to the limitations and upon payment of the
charges provided in the Ordinance, and upon surrender and cancellation of this Bond. Upon such
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transfer a new Bond or Bonds of authorized denominations of the same maturity and for the same
aggregate principal amount will be issued to the transferee in exchange therefor.
The Bonds are issued in fully registered form in the denomination of$100,000 each or
authorized integral multiples of$5,000 in excess thereof. This Bond may be exchanged at the
principal corporate trust office of the Bond Registrar for a like aggregate principal amount of
Bonds of the same maturity of other authorized denominations, upon the terms set forth in the
Bond Ordinance. The Bond Registrar shall not be required to transfer or exchange any Bond
during the period from the close of business on the 15th day of the calendar month next
preceding an interest payment date on the Bonds to the opening of business on such interest
payment date.
The City and the Bond Registrar may deem and treat the Registered Owner hereof as the
absolute owner hereof for the purpose of receiving payment of or on account of principal hereof,
premium, if any, hereon and interest due hereon and for all other purposes; and neither the City
nor the Bond Registrar shall be affected by any notice to the contrary.
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ASSIGNMENT
FOR VALUE RECEIVED the undersigned sells, assigns and transfers unto
(Name and Address of Assignee)
the within Bond and does hereby irrevocably constitute and appoint
as attorney to transfer the said Bond on the books kept for registration thereof with full power of
substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: The signature to this assignment must correspond with the name of the registered
owner as it appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatever.
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Section 9. Sale of the Bonds. The Bonds hereby authorized shall be executed as in this
Ordinance provided as soon after the passage hereof as may be, and thereupon be deposited with
the Treasurer of the City, and be by said Treasurer delivered to Commerce Bank, Peoria, Illinois
(the "Purchaser"), upon receipt of the purchase price therefor, the same being par; the contract
for the sale of the Bonds heretofore entered into is in all respects ratified, approved and
confirmed, it being hereby found and determined that the Bonds have been sold at such price and
bear interest at such rates that neither the true interest cost (yield) nor the net interest rate
received upon such sale exceed the maximum rate otherwise authorized by Illinois law and that
the contract for the sale of the Bonds is in the best interests of the City and that no person holding
any office of the City, either by election or appointment, is in any manner financially interested
directly in his or her own name or indirectly in the name of any other person, association, trust or
corporation, in the contract for the sale of the Bonds.
The use by the Purchaser of any Preliminary Term Sheet and any final Term Sheet
relating to the Bonds (the "Term Sheet") is hereby ratified, approved and authorized; the
execution and delivery of the Term Sheet is hereby authorized; and the officers of the City are
hereby authorized to take any action as may be required on the part of the City to consummate
the transactions contemplated by the contract for the sale of the Bonds, this Ordinance, said
Preliminary Term Sheet, said Term Sheet and the Bonds.
Section 10. Treatment of Bonds As Debt. The Bonds shall be payable from the Pledged
Moneys and do not and shall not constitute an indebtedness of the City within the meaning of any
constitutional or statutory limitation, unless the Pledged Taxes shall be extended pursuant to the
general obligation, full faith and credit promise supporting the Bonds, as set forth in Section 14
hereof, in which case the amount of the Bonds then Outstanding shall be included in the
computation of indebtedness of the City for purposes of all statutory provisions or limitations
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until such time as an audit of the City shall show that the Bonds have been paid from the Pledged
Revenues for a complete Fiscal Year in accordance with the Act.
Section 11. Continuation of Waterworks and Sewerage Fund and Accounts Thereof.
Upon the issuance of any.of the Bonds, the System shall continue to be operated on a
Fiscal Year basis. All of the Revenues shall be set aside as collected and be deposited in a
separate fund and in an account in a bank to be designated by the Corporate Authorities, which
fund is hereby created and is designated as the "Waterworks and Sewerage Fund" (the "Fund")
of the City, which shall constitute a trust fund for the sole purpose of carrying out the covenants,
terms, and conditions of this Ordinance and any ordinances providing for the issuance of parity
bonds, and shall be used only in paying Operation and Maintenance Expenses, providing an
adequate depreciation fund, paying the principal of and interest on all bonds of the City which by
their terms are payable from the revenues derived from the System, and providing for the
establishment of and expenditure from the respective accounts as hereinafter described.
Section 12. Flow of Funds. There shall be and there are hereby continued separate
accounts in the Waterworks and Sewerage Fund to be known as the "Waterworks Operation and
Maintenance Account," such other accounts as may be established under any Future Bond
Ordinances, the "Waterworks Depreciation and Contingencies Account" (the "Depreciation
Account"), and the "Surplus Account,"to which there shall be credited on or before the first day
of each month by the financial officer of the City, without any further official action or direction,
in the order in which said accounts are hereinafter mentioned, all moneys held in the Fund, in
accordance with the following provisions:
(a) Operation and Maintenance Account:
There shall be credited to or retained in the Operation and Maintenance Account
an amount sufficient, when added to the amount then on deposit in said Account,
to establish or maintain a balance to an amount not less than the amount
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considered necessary to pay Operation and Maintenance Expenses for the then
current month.
(b) Accounts Created Pursuant to Future Bond Ordinances:
Future Bond Ordinances may create additional accounts in the Fund for the
payment and security of waterworks and sewerage revenue bonds that hereafter
may be issued by the City. Amounts in the Fund shall be credited to and
transferred from said accounts in accordance with the terms of the Future Bond
Ordinances.
(c) Depreciation Account:
Beginning the month after the delivery of the Bonds, there shall be credited to the
Depreciation Account and held, in cash and investments, such sum as the City
Council may deem necessary in order to provide an adequate depreciation fund for
the System. In future bond ordinances, the City may covenant to make specific
monthly deposits to said Depreciation Account and to accumulate funds therein.
Amounts to the credit of said Depreciation Account shall be used for (i) the
payment of the cost 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, (ii) for the purpose of acquiring or constructing improvements and
extensions to the System, and (iii) the payment of principal of or interest and
applicable premium on any Outstanding bonds at any time when there are no other
funds available for that purpose in order to prevent a default. Future Bond
Ordinances may provide for additional deposits to said Depreciation Account and
additional uses and transfers of the funds on deposit in said Depreciation Account.
(d) Surplus Account:
All moneys remaining in the Fund, after crediting the required amounts to the
respective accounts hereinabove provided for, and after making up any deficiency
in said accounts, shall be credited to the Surplus Account. Funds in the Surplus
Account shall first be used to make up any subsequent deficiencies in any of said
accounts and then shall be deposited to a separate and segregated account hereby
created and designated the "Alternate Bond and Interest Subaccount of the
Surplus Account" (the "Alternate Bond and Interest Subaccount"), as follows:
A. There shall be paid into the Alternate Bond and Interest Subaccount in each
month after the required payments have been made into the Accounts above described, a
fractional amount of the interest becoming due on the next succeeding interest payment
date on all Outstanding bonds and a fractional amount of the principal becoming due on
the next succeeding principal maturity date of all Outstanding bonds until there shall have
been accumulated in the Alternate Bond and Interest Subaccount on or before the month
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preceding such maturity date of interest or principal, an amount sufficient to pay such
principal or interest, or both, of all Outstanding bonds.
B. In computing the fractional amount to be set aside each month in said
Alternate Bond and Interest Subaccount, the fraction shall be so computed that sufficient
funds will be set aside in said Subaccount and will be available for the prompt payment of
such principal of and interest on all Outstanding bonds as the same will become due and
shall be not less than one-fifth of the interest becoming due on the next succeeding
interest payment date and not less than one-tenth of the principal becoming due on the
next succeeding principal payment date on all Outstanding bonds until there is sufficient
money in said Subaccount to pay such principal or interest or both.
C. Credits to the Alternate Bond and Interest Subaccount may be suspended in
any Fiscal Year at such time as there shall be a sufficient sum, held in cash and
investments, in said Subaccount to meet principal and interest requirements in said
Subaccount for the balance of such Fiscal Year, but such credits shall be resumed at the
beginning of the next Fiscal Year.
D. All moneys in said Subaccount shall be used only for the purpose of paying
interest on and principal of Outstanding bonds.
E. Any funds remaining in the Surplus Account after making the aforesaid
deposits to the credit of the Alternate Bond and Interest Subaccount, at the discretion of
the Corporate Authorities, shall be used, first, to make up any subsequent deficiencies in
any of the accounts hereinabove named; and then, for the remainder of all surplus
Revenues, at the discretion of the Corporate Authorities, for one or more of the following
purposes without any priority among them:
1. For the purpose of constructing or acquiring repairs, replacements,
improvements or extensions to the System; or
2. For making transfers to the Fund generally to be applied and treated
as Revenues when transferred; or
3. For the purpose of calling and redeeming Outstanding bonds payable
from the System which are callable at the time; or
4. For the purpose of purchasing Outstanding bonds payable from the
System; or
5. For the purpose of paying principal of and interest on any subordinate
bonds or obligations issued for the purpose of acquiring or constructing repairs,
replacements, improvements or extensions to the System; or
6. For any purpose enumerated in any Future Bond Ordinance; or
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7. For any other lawful System purpose.
Money to the credit of the Fund may be invested pursuant to any authorization
granted to municipal corporations by Illinois statute or court decision.
Section 13. Account Excesses. Any amounts to the credit of the Accounts in excess of
the then current requirements therefor may be transferred at any time by the Corporate
Authorities to such other Account or Accounts of the Fund as it may in its sole discretion
designate.
Section 14. Pledged Taxes; Tax Levy. For the purpose of providing additional funds to
pay the principal of and interest on the Bonds, and as provided in Section 15 of the Debt Reform
Act, there is hereby levied upon all of the taxable property within the City, in the years for which
any of the Bonds are Outstanding, a direct annual tax in amounts sufficient for that purpose, and
there be and there hereby is levied upon all of the taxable property in the City the following
direct annual taxes (the "Pledged Taxes"):
FOR THE YEAR A TAX SUFFICIENT TO PRODUCE THE SUM OF:
2015 $1,670,925.00 for principal and interest up to
and including June 1,2017
2016 $1,695,952.50 for principal and interest
The City expects to pay the interest due on the Bonds on June 1, 2016 solely from
Pledged Revenues. Principal or interest maturing at any time when there are not sufficient funds
on hand from the Pledged Taxes to pay the same shall be paid promptly when due from current
funds on hand in advance of the collection of the Pledged Taxes herein levied; and when the
Pledged Taxes shall have been collected, reimbursement shall be made to said funds in the
amount so advanced.
Subject to the provisions of this Ordinance, the City covenants and agrees with the
purchasers and the owners of the Bonds that so long as any of the Bonds remain Outstanding, the
City will take no action or fail to take any action which in any way would adversely affect the
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ability of the City to collect the Pledged Revenues or to levy and collect the Pledged Taxes. The
City and its officers will comply with all present and future applicable laws in order to assure that
the Pledged Revenues will be available and that the Pledged Taxes will be levied, extended and
collected as provided herein and deposited in the Bond Fund(as hereinafter defined).
The Pledged Taxes are hereby irrevocably pledged to and shall be used only for the
purpose of paying principal of and interest on the Bonds.
Section 15. Filing with County Clerk; Alternate Bond Fund; Certificate of Reduction of
Taxes. After this Ordinance becomes effective, a copy hereof, certified by the City Clerk, shall
be filed with the County Clerk. The County Clerk shall in and for each of the years required
ascertain the rate percent required to produce the aggregate Pledged Taxes hereinbefore provided
to be levied in each of said years; and the County Clerk shall extend the same for collection on
the tax books in connection with other taxes levied in said years in and by the City for general
corporate purposes of the City; and the County Clerk, or other appropriate officer or designee,
shall remit the Pledged Taxes for deposit to the credit of a special fund to be designated the
"Series 2015 Alternate Bond Fund" (the "Bond Fund"), and in said years the Pledged Taxes
shall be levied and collected by and for and on behalf of the City in like manner as taxes for
general municipal purposes of the City for said years are levied and collected,and in addition to
and in excess of all other taxes. The Pledged Taxes are hereby irrevocably pledged to and shall
be used only for the purpose of paying principal of and interest on the Bonds. The purpose of the
Bond Fund is to provide a fund to receive and disburse the proceeds of the Other Funds and to
receive and disburse Pledged Taxes for any of the Bonds. All payments made with respect to the
Bonds from the Net System Revenues shall be made directly from the Alternate Bond and
Interest Subaccount of the Fund. There are hereby created two accounts in the Bond Fund,
designated the "Other Funds Account" and the "General Account." All proceeds of the Other
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Funds as required for the Bonds shall be deposited to the credit of the Other Funds Account, and
all Pledged Taxes shall be deposited to the credit of the General Account. The Bond Fund and
its respective accounts constitute a trust fund established for the purpose of carrying out the
covenants, terms and conditions imposed upon the City by this Ordinance. It is hereby expressly
provided that in the event there shall be moneys both to the credit of the Alternate Bond and
Interest Subaccount and the Bond Fund, the Bond Fund shall be fully depleted before moneys to
the credit of the Alternate Bond and Interest Subaccount shall be used to pay principal of and
interest on the Bonds.
The Mayor, City Clerk and Treasurer of the City or his and her designee shall prepare
and file with the County Clerk a Certificate of Reduction of Taxes Heretofore Levied for the
Payment of Bonds showing the Refunded Bonds and directing the abatement of the taxes
heretofore levied to pay the Refunded Bonds.
Section 16 Abatement of Pledged Taxes. As provided in the Act, whenever the Pledged
Revenues shall have been determined by the City Council to provide in any calendar year an
amount sufficient to pay debt service of all outstanding Bonds for such year, the City Council, or
the City Treasurer acting with proper authority, shall, prior to the time the Pledged Taxes levied
in such calendar year are extended, direct the abatement of the Pledged Taxes, and proper
notification of such abatement shall be filed with the County Clerk in a timely manner to effect
such abatement. In any year the City may abate the Pledged Taxes before the Pledged Revenues
are on hand for the payment of the Bonds.
Section 17. Pledged Revenues; General Covenants. The City covenants and agrees with
the registered owners of the Bonds that, so long as any Bonds remain Outstanding:
A. The City hereby pledges the Pledged Revenues to the payment of the Bonds,
and the Corporate Authorities covenant and agree to provide for, collect and apply the
Pledged Revenues to the payment of the Bonds, all in accordance with Section 15 of the
Act.
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B. The City will punctually pay or cause to be paid from the Alternate Bond
and Interest Subaccount and from the Bond Fund the principal of and the interest on the
Bonds in strict conformity with the terms of the Bonds and this Ordinance, and it will
faithfully observe and perform all of the conditions, covenants and requirements thereof
and hereof.
C. The City will pay and discharge, or cause to be paid and discharged, from
the Alternate Bond and Interest Subaccount and the Bond Fund any and all lawful claims
which, if unpaid, might become a lien or charge upon the Pledged Moneys, or any part
thereof, or upon any funds in the hands of the Bond Registrar, or which might impair the
security of the Bonds. Nothing herein contained shall require the City to make any such
payment so long as the City in good faith shall contest the validity of said claims.
D. The City will keep, or cause to be kept, proper books of record and accounts,
separate from all other records and accounts of the City, in which complete and correct
entries shall be made of all transactions relating to the Pledged Moneys, the Alternate
Bond and Interest Subaccount and the Bond Fund. Such books of record and accounts
shall at all times during business hours be subject to the inspection of the registered
owners of not less than ten per cent (10%) of the principal amount of the Outstanding
bonds or their representatives authorized in writing.
E. The City will preserve and protect the security of the Bonds and the rights of
the registered owners of the Bonds and will warrant and defend their rights against all
claims and demands of all persons. From and after the sale and delivery of any of the
Bonds by the City,the Bonds shall be incontestable by the City.
F. The City will adopt, make, execute and deliver any and all such further
ordinances, resolutions, instruments and assurances as may be reasonably necessary or
proper to carry out the intention of, or to facilitate the performance of,this Ordinance, and
for the better assuring and confirming unto the registered owners of the Bonds of the
rights and benefits provided in this Ordinance.
G. As long as any Bonds are Outstanding, the City will continue to deposit the
Pledged Revenues to the Alternate Bond and Interest Subaccount and, if applicable, the
Pledged Taxes to the Bond Fund. The City covenants and agrees with the purchasers of
the Bonds and with the registered owners thereof that so long as any Bonds remain
Outstanding, the City will take no action or fail to take any action which in any way
would adversely affect the ability of the City to collect the Pledged Taxes and to collect
and to segregate the Pledged Moneys. The City and its officers will comply with all
present and future applicable laws in order to assure that the Pledged Taxes can be
extended and that the Pledged Revenues and the Pledged Taxes may be collected and
deposited to the Alternate Bond and Interest Subaccount and the Bond Fund, respectively,
as provided herein.
H. Once issued, the Bonds shall be and forever remain until paid or defeased
the general obligation of the City, for the payment of which its full faith and credit are
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pledged, and shall be payable, in addition to the Pledged Revenues, from the levy of the
Pledged Taxes as provided in the Act.
I. The City will. maintain the System in good repair and working order, will
operate the same efficiently and faithfully and will punctually perform all duties with
respect thereto required by the Constitution and laws of the State of Illinois and Federal
law.
J. The City will establish and maintain at all times reasonable fees, charges,
and rates for the use and service of the System and will provide for the collection thereof
and the segregation and application of the Revenues in the manner provided by this
Ordinance, sufficient at all times to pay Operation and Maintenance Expenses, to provide
an adequate depreciation fund, to pay the principal of and interest on all bonds of the City
which by their terms are payable from the revenues of the System, and to provide for the
creation and maintenance and funding of the respective accounts as provided in Section
12 of this Ordinance; it is hereby expressly provided that the pledge and establishment of
rates or charges for use of the System shall constitute a continuing obligation of the City
with respect to such establishment and a continuing appropriation of the amounts
received.
K. There shall be charged against all users of the System, including the City,
such rates and amounts for water and sewerage services as shall be adequate to meet the
requirements of this section. Charges for services rendered the City shall be made against
the City, and payment for the same shall be made monthly from the corporate funds into
the Fund as revenues derived from the operation of the System;provided, however, that
the City need not charge itself for such services if in the previous Fiscal Year Revenues
not including any payments made by the City shall have met the requirements of this
Ordinance.
L. Within six months following the close of each Fiscal Year, the City will
cause the books and accounts of the System to be audited by independent certified public
accountants in accordance with appropriate audit standards. Said audit will be available
for inspection by the registered owners of any of the Bonds.
Section 18. Future Revenue Bonds, Additional Bonds and Subordinate Bonds. The City
reserves the right to issue without limit bonds payable solely and only from the Revenues, which
bonds may have a lien on the Revenues prior to the lien on the Revenues that secures the
Outstanding bonds, provided that upon the issuance of such bonds, the City shall be able to
demonstrate that the requirements of the Act for the issuance of alternate bonds payable from the
Revenues shall have been met on such date for all Outstanding bonds.
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The City also reserves the right to issue Additional Bonds from time to time payable from
the Pledged Revenues, and any such Additional Bonds shall share ratably and equally in the
Pledged Revenues with the Bonds;provided, however, that no Additional Bonds shall be issued
except in accordance with the provisions of the Act as the Act is written at this time.
The City also reserves the right to issue revenue bonds from time to time payable from
the Revenues that are subordinate to the Bonds or Additional Bonds and are payable from the
money remaining in the Surplus Account created hereunder after making required deposits into
the Alternate Bond and Interest Subaccount.
Section 19. Provisions a Contract. The provisions of this Ordinance shall constitute a
contract between the City and the owners of the Outstanding bonds and no changes, additions, or
alterations of any kind shall be made hereto, except as herein provided, so long as there are any
Outstanding bonds.
Section 20. Use of Proceeds. The proceeds derived from the sale of the Bonds shall be
used as follows: Accrued interest shall be credited to the Alternate Bond and Interest Subaccount
and applied to pay first interest due on the Bonds. The remaining funds are hereby appropriated
for the purpose of refunding the Refunded Bonds and hereby ordered deposited with
MidAmerica National Bank, Canton, Illinois, as prior paying agent for the Prior Bonds for the
purpose of paying the principal of the Refunded Bonds upon redemption thereof.
Section 21. Call of the Refunded Bonds. In accordance with the redemption provisions
of the ordinances authorizing the issuance of the Refunded Bonds, the City does hereby make
provision for the payment of and does hereby call (subject only to the delivery of the Bonds) the
Refunded Bonds for redemption on December 1, 2015.
Section 22. Non Arbitrage and Tax-Exemption. The City hereby covenants that it will
not take any action, omit to take any action or permit the taking or omission of any action within
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its control (including, without limitation, making or permitting any use of the proceeds of the
Bonds) if taking, permitting or omitting to take such action would cause any of the Bonds to be
an arbitrage bond or a private activity bond within the meaning of the Internal Revenue Code of
1986, as amended (the "Code"), or would otherwise cause the interest on the Bonds to be
included in the gross income of the recipients thereof for federal income tax purposes. The City
acknowledges that, in the event of an examination by the Internal Revenue Service of the
exemption from Federal income taxation for interest paid on the Bonds, under present rules, the
City is treated as the "taxpayer" in such examination and agrees that it will respond in a
commercially reasonable manner to any inquiries from the Internal Revenue Service in
connection with such an examination.
The City also agrees and covenants with the purchasers and holders of the Bonds from
time to time Outstanding that, to the extent possible under Illinois law, it will comply with
whatever federal tax law is adopted in the future which applies to the Bonds and affects the tax-
exempt status of the Bonds.
The Corporate Authorities hereby authorize the officials of the City responsible for
issuing the Bonds, the same being the Mayor of the City, the City Manager or the City Clerk or
City Treasurer who receives the taxes of the City, to make such further covenants and
certifications as may be necessary to assure that the use thereof will not cause the Bonds to be
arbitrage bonds and to assure that the interest on the Bonds will be exempt from federal income
taxation. In connection therewith, the City and the Corporate Authorities further agree:
(a)through their officers, to make such further specific covenants, representations as shall be
truthful, and assurances as may be necessary or advisable; (b)to consult with counsel approving
the Bonds and to comply with such advice as may be given; (c)to pay to the United States, as
necessary, such sums of money representing required rebates of excess arbitrage profits relating
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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 by their officers, to employ and
pay fiscal agents, financial advisors, attorneys, and other persons to assist the City in such
compliance.
Section 23. Designation of Issue. The Corporate Authorities hereby designates each of
the Bonds as a "qualified tax-exempt obligation" for the purposes and within the meaning of
Section 265(b)(3) of the Code.
Section 24. Registered Form. The City recognizes that Section 149(a) of the Code
requires the Bonds to be issued and to remain in fully registered form in order that interest
thereon is exempt from federal income taxation under laws in force at the time the Bonds are
delivered. In this connection, the City agrees that it will not take any action to permit the Bonds
to be issued in, or converted into,bearer or coupon form.
Section 25. Bond Registrar Covenants. If requested by the Bond Registrar, the Mayor
and City Clerk are authorized to execute the Bond Registrar's standard form of agreement
between the City and the Bond Registrar with respect to the obligations and duties of the Bond
Registrar hereunder. Subject to modification by the express terms of any such agreement, such
duties shall include the following:
(a) to act as bond registrar, authenticating agent, paying agent and transfer agent
as provided herein;
(b) to maintain a list of Bondholders as set forth herein and to furnish such list
to the City upon request, but otherwise to keep such list confidential to the extent
permitted by law;
(c) to cancel and/or destroy Bonds which have been paid at maturity or
submitted for exchange or transfer;
(d) to furnish the City at least annually a certificate with respect to Bonds
cancelled and/or destroyed; and
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(e) to furnish the City at least annually an audit confirmation of Bonds paid,
Outstanding bonds and payments made with respect to interest on the Bonds.
The City Clerk is hereby directed to file a certified copy of this Ordinance with the Bond
Registrar.
Section 26 Record-Keeping Policy and Post-Issuance Compliance Matters. It is
necessary and in the best interest of the City to maintain sufficient records to demonstrate
compliance with its covenants and expectations to ensure the appropriate federal tax status for
the Bonds and other debt obligations of the City, the interest on which is excludable from "gross
income" for federal income tax purposes or which enable the City or the holder to receive federal
tax benefits, including, but not limited to, qualified tax credit bonds and other specified tax credit
bonds (including the Bonds, the "Tax Advantaged Obligations"). Further, it is necessary and in
the best interest of the City that (i)the Corporate Authorities adopt policies with respect to
record-keeping and post issuance compliance with the City's covenants related to its Tax
Advantaged Obligations and (ii)the Compliance Officer (as hereinafter defined) at least annually
review the City's Contracts (as hereinafter defined) to determine whether the Tax Advantaged
Obligations comply with the federal tax requirements applicable to each issue of the Tax
Advantaged Obligations. The Corporate Authorities and the City hereby adopt the following
Record-Keeping Policy:
(a) Compliance Officer Is Responsible for Records. The Treasurer of the City
(the "Compliance Officer") is hereby designated as the keeper of all records of the City
with respect to each issue of the Tax Advantaged Obligations, and such officer shall
report to the Board at least annually that he/she has all of the required records in his/her
possession, or is taking appropriate action to obtain or recover such records.
(b) Closing Transcripts. For each issue of Tax Advantaged Obligations, the
Compliance Officer shall receive, and shall keep and maintain, a true, correct and
complete counterpart of each and every document and agreement delivered in connection
with the issuance of the Tax Advantaged Obligations, including without limitation (i)the
proceedings of the City authorizing the Tax Advantaged Obligations, (ii) any offering
document with respect to the offer and sale of the Tax Advantaged Obligations, (iii) any
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legal opinions with respect to the Tax Advantaged Obligations delivered by any lawyers,
and (iv) all written representations of any person delivered in connection with the
issuance and initial sale of the Tax Advantaged Obligations.
(c) Arbitrage Rebate Liability. The Compliance Officer shall review the
agreements of the Village with respect to each issue of Tax Advantaged Obligations and
shall prepare a report for the Board stating whether or not the City has any rebate liability
to the United States Treasury, and setting forth any applicable exemptions that each issue
of Tax Advantaged Obligations may have from rebate liability. Such report shall be
updated annually and delivered to the Board.
(d) Recommended Records. The Compliance Officer shall review the records
related to each issue of Tax Advantaged Obligations and shall determine what
requirements the City must meet in order to maintain the tax-exemption of interest paid
on its Tax Advantaged Obligations, its entitlement to direct payments by the United
States Treasury of the applicable percentages of each interest payment due and owing on
its Tax Advantaged Obligations, and applicable tax credits or other tax benefits arising
from its Tax Advantaged Obligations. The Compliance Officer shall then prepare a list
of the contracts, requisitions, invoices, receipts and other information that may be needed
in order to establish that the interest paid on the Tax Advantaged Obligations is entitled to
be excluded from"gross income" for federal income tax purposes, that the City is entitled
to receive from the United States Treasury direct payments of the applicable percentages
of interest payments coming due and owing on its Tax Advantaged Obligations, and the
entitlement of holders of any Tax Advantaged Obligations to any tax credits or other tax
benefits, respectively. Notwithstanding any other policy of the City, such retained
records shall be kept for as long as the Tax Advantaged Obligations relating to such
records (and any obligations issued to refund the Tax Advantaged Obligations) are
outstanding, plus three years, and shall at least include:
(i) complete copies of the transcripts delivered when any issue of Tax
Advantaged Obligations is initially issued and sold;
(ii) copies of account statements showing the disbursements of all Tax
Advantaged Obligation proceeds for their intended purposes, and records showing
the assets and other property financed by such disbursements;
(iii) copies of account statements showing all investment activity of any
and all accounts in which the proceeds of any issue of Tax Advantaged
Obligations has been held or in which funds to be used for the payment of
principal of or interest on any Tax Advantaged Obligations has been held, or
which has provided security to the holders or credit enhancers of any Tax
Advantaged Obligations;
(iv) copies of all bid requests and bid responses used in the acquisition of
any special investments used for the proceeds of any issue of Tax Advantaged
Obligations, including any swaps, swaptions, or other financial derivatives entered
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into in order to establish that such instruments were purchased at fair market
value;
(v) copies of any subscriptions to the United States Treasury for the
purchase of State and Local Government Series (SLGS) obligations;
(vi) any calculations of liability for arbitrage rebate that is or may
become due with respect to any issue of Tax Advantaged Obligations, and any
calculations prepared to show that no arbitrage rebate is due, together, if
applicable, with account statements or cancelled checks showing the payment of
any rebate amounts to the United States Treasury together with any applicable IRS
Form 8038-T; and
(vii) copies of all contracts and agreements of the City, including any
leases (the "Contracts"), with respect to the use of any property owned by the
City and acquired, constructed or otherwise financed or refinanced with the
proceeds of the Tax Advantaged Obligations effective at any time when such Tax
Advantaged Obligations are, will or have been outstanding. Copies of contracts
covering no more than 50 days of use and contracts related to City employees
need not be retained.
(e) IRS Examinations or Inquiries. In the event the IRS commences an
examination of any issue of Tax Advantaged Obligations or requests a response to a
compliance check, questionnaire or other inquiry, the Compliance Officer shall inform
the Corporate Authorities of such event, and is authorized to respond to inquiries of the
IRS, and to hire outside, independent professional counsel to assist in the response to the
examination or inquiry.
(f) Annual Review. The Compliance Officer shall conduct an annual review of
the Contracts and other records to determine for each issue of Tax Advantaged
Obligations then outstanding whether each such issue complies with the federal tax
requirements applicable to such issue, including restrictions on private business use,
private payments and private loans. The Compliance Officer is expressly authorized,
without further official action of the Corporate Authorities, to hire outside, independent
professional counsel to assist in such review. To the extent that any violations or
potential violations of federal tax requirements are discovered incidental to such review,
the Compliance Officer may make recommendations or take such actions as the
Compliance Officer shall reasonably deem necessary to assure the timely correction of
such violations or potential violations through remedial actions described in the United
States Treasury Regulations, or the Tax Exempt Bonds Voluntary Closing Agreement
Program described in Treasury Notice 2008-31 or similar program instituted by the IRS.
(g) Training. The Compliance Officer shall undertake to maintain reasonable
levels of knowledge concerning the rules related to tax-exempt bonds (and build America
bonds and tax credit bonds to the extent the City has outstanding build America bonds or
tax-credit bonds) so that such officer may fulfill the duties described in this Section. The
-33-
Compliance Officer may consult with counsel, attend conferences and presentations of
trade groups, read materials posted on various web sites, including the web site of the Tax
Exempt Bond function of the IRS, and use other means to maintain such knowledge.
Recognizing that the Compliance Officer may not be fully knowledgeable in this area, the
Compliance Officer may consult with outside counsel, consultants and experts to assist
him or her in exercising his or her duties hereunder. The Compliance Officer will
endeavor to make sure that the City's staff is aware of the need for continuing
compliance. The Compliance Officer will provide copies of this Ordinance and the Tax
Exemption Certificate and Agreement or other applicable tax documents for each series
of Tax Advantaged Obligations then currently outstanding (the "Tax Agreements") to
staff members who may be responsible for taking actions described in such documents.
The Compliance Officer should assist in the education of any new Compliance Officer
and the transition of the duties under these procedures. The Compliance Officer will
review this Ordinance and each of the Tax Agreements periodically to determine if there
are portions that need further explanation and, if so, will attempt to obtain such
explanation from counsel or from other experts, consultants or staff.
(h) Amendment and Waiver. The procedures described in this Section are only
for the benefit of the City. No other person (including an owner of a Tax Advantaged
Obligation) may rely on the procedures included in this Section. The City may amend
this Section and any provision of this Section may be waived, without the consent of the
holders of any Tax Advantaged Obligations and as authorized by passage of an ordinance
by the Corporate Authorities. Additional procedures may be required for Tax
Advantaged Obligations the proceeds of which are used for purposes other than capital
governmentally owned projects or refundings of such, including tax increment financing
bonds, bonds financing output facilities, bonds financing working capital, or private
activity bonds. The City also recognizes that these procedures may need to be revised in
the event the City enters into any derivative products with respect to its Tax Advantaged
Obligations.
Section 27. Defeasance. Any of the Bonds which are no longer Outstanding bonds as
defined in this Ordinance shall cease to have any lien on or right to receive or be paid from
Pledged Revenues and shall no longer have the benefits of any covenant for the registered owners
of Outstanding bonds as set forth herein as such relates to lien and security of the Bonds in the
Pledged Revenues.
Section 28. Severability. If any section, paragraph, clause or provision of this
Ordinance shall be held invalid, the invalidity of such section, paragraph, clause or provision
shall not affect any of the other provisions of this Ordinance.
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Section 29. Repealer. All ordinances, resolutions or orders, or parts thereof, in conflict
with the provisions of this Ordinance are to the extent of such conflict hereby repealed.
-35-
ADOPTED on the 15th day of September, 2015.
AYE: Ryan Mayhew, Tad Putrich, Gerald Ellis, Justin Nelson
and Angela Hale.
NAY:
ABSENT: Jim Nelson, Craig West and John Lovell
Approved the 15th day of September, 2015
6y.r`
L
ayo
RECORDED in the City Records on the 15th day of September,2015.
ATTE
Ny C
Clerk
[SEAL]
-36-
Alderman Justin Nelson moved and Alderman Tad Putrich seconded the motion that said
ordinance as presented be adopted.
After a full and complete discussion thereof, including 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, the Mayor directed that the roll be called for a vote upon the motion to adopt
the ordinance.
Upon the roll being called,the following Aldermen voted
AYE: Ryan Mayhew, Tad Putrich, Gerald Ellis, Justin Nelson
and Angela Hale.
NAY:
ABSENT: Jim Nelson, Craig West and John Lovell
Whereupon the Mayor declared the motion carried and the ordinance adopted, and
henceforth did approve and sign the same in open meeting and did direct the City Clerk to record
the same in full in the records of the City Council of the City.
Other business not pertinent to the adoption of said ordinance was duly transacted at said
meeting.
Upon motion duly made and seconded,the meeting was adjourned.
City Clerk
STATE OF ILLINOIS )
SS
COUNTY OF FULTON )
CERTIFICATION OF ORDINANCE AND MINUTES
I, the undersigned, do hereby certify that I am the duly qualified and acting City Clerk of
the City of Canton, Fulton County, Illinois (the "City"), and as such officer I am the keeper of
the books, records, files, and journal of proceedings of the City and of the City Council (the
"Corporate Authorities")thereof.
I do further certify that the foregoing constitutes a full, true and complete transcript of the
minutes of the legally convened meeting of the Corporate Authorities held on the 15th day of
September, 2015, insofar as same relates to the adoption of an ordinance numbered and
entitled:
AN ORDINANCE providing for the issue of $3,325,000 General
Obligation Refunding Bonds (Alternate Revenue Source), Series
2015, of the City of Canton, Fulton County, Illinois, for the
purpose of refunding certain outstanding bonds of the City and for
the levy of a direct annual tax sufficient to pay the principal and
interest on said bonds and authorizing the sale of said bonds to the
purchaser thereof.
a true, correct and complete copy of which said ordinance as adopted at said meeting appears in
the foregoing transcript of the minutes of said meeting.
I do further certify that the deliberations of the Corporate Authorities on the adoption of
said ordinance were taken openly; that the vote on the adoption of said ordinance was taken
openly; that said meeting was held at a specified time and place convenient to the public; that
notice of said meeting was duly given to all of the news media requesting such notice of said
meeting was duly given to all of the news media requesting such notice; that an agenda for said
meeting was posted at the location where said meeting was held and at the principal office of the
Corporate Authorities at least 96 hours in advance of the holding of said meeting, that at least
one copy of said agenda was continuously available for public review during the entire 96-hour
period preceding said meeting, that a true, correct and complete copy of said agenda as so posted
being attached to this Certificate as Exhibit A, that said meeting was called and held in strict
accordance with the provisions of the Open Meetings Act of the State of Illinois, as amended;
and that the Corporate Authorities have complied with all of the applicable provisions of said Act
and their procedural rules in the adoption of said ordinance.
IN WITNESS WHEREOF, I have hereunto affixed my official signature and the seal of the
City this 15th day of September, 2015.
C' rk
[SEAL]
-2-
306 N*P.O
MAIN ST.,SUITE 3
F'RW P.O.BOX 3367
� A BLOOMINGTON,IL 61702.3367
M'DSTATE imc. TEL:309-829.3311
FAX:309-827-2171
INVESTMENTBANKERS
September 24,2015
Ms.Pamela Howe
Commerce Bank
416 Main Street
Peoria,IL 61602
RE: $3,325,000 General Obligation Refunding Bonds(Alternate Revenue Source),Series
2015 of the City of Canton,Fulton County,Illinois
Dear Ms.Howe:
I am confirming the clearance for the above-referenced bond issue scheduled for September 30,2015. The breakdown of the
funds is as follows:
Principal $3,325,000.00
Plus Premium 0.00
Total Due to Issuer 3,325,000.00
Less Deposit to Prior Paying Agent to refund Series 2005 bonds (3,260,000.00)
Less Deposit to B&I Fund to pay capitalized interest (1,772.75)
Less Costs of Issuance to First Midstate (63,227.25)
Balance due $0.00
The costs of issuance of$63,227.25 should be wired to First Midstate per the following instructions:
Bank: Commerce Bank,Bloomington,IL
Routing#: 101000019
Acct.: 720123102
Acct.Name: First Midstate Inc.
Amount: $63,227.25
The bond proceeds of$3,260,000.00,to pay the Refunded Bonds,should be wired to MidAmerica National Bank,Canton,IL,
Prior Paying Agent,per the following instructions:
Bank: MidAmerica National Bank(100 W.Elm St.,Canton,IL 61520)
Routing#: 071102238
Acct.: 19459008
FBO: City of Canton
Amount: $3,260,000.00
The bond proceeds of$1,772.75,to pay capitalized interest,should be wired to the City of Canton per the following
instructions:
Bank: MidAmerica National Bank,Canton,IL
Routing#: 071102238
Acct.: 75629
Acct.Name: City of Canton
Amount: $1,772.75
Thank you for your continued assistance and cooperation in this regard. If you have any questions,please do not hesitate to
contact this office.
Very truly,
FIRST MIDSTATE INCORPORATED
Patrick M.McGee
cc: Crystal Wilkinson,City of Canton
Diana Pavley-Rock,City of Canton
David Pistorius,First Midstate
Or i yv�
111 West Monroe Street
Chicago,Illinois 60603
T 312.845.3000
Chapman and Cutler LLP F 312.701.2361
www.chapman.com
Attorneys at Law • Focused on Finance'
September 30,2015
We hereby certify that we have examined certified copy of the proceedings (the
"Proceedings") of the City Council of the City of Canton,Fulton County, Illinois (the "City"),
passed preliminary to the issue by the City of its fully registered General Obligation Refunding
Bonds (Alternate Revenue Source), Series 2015 (the "Bonds"), to the amount of $3,325,000,
dated September 30, 2015, due serially on December 1 of the years and in the amounts and
bearing interest as follows:
2016 $1,640,000 1.10%
2017 1,685,000 1.30%
and we are of the opinion that the Proceedings show lawful authority for said issue under the
laws of the State of Illinois now in force.
We further certify that we have examined the form of bond prescribed for said issue and
find the same in due form of law, and in our opinion said issue, to the amount named, is valid
and legally binding upon the City, and is payable from (i)(a)together with the City's Loan
Agreement with the Illinois Environmental Protection Agency, dated June 26, 2001 and
outstanding General Obligation Bonds (Alternate Revenue Source), Series 2005, General
Obligation Waterworks and Sewerage Refunding Bonds (Alternate revenue Source),Series 2012
and General Obligation Waterworks and Sewerage Refunding Bonds (Alternate Revenue
Source), Series 2013, the net revenues of the waterworks and sewerage system of the City and
(b)together with the outstanding General Obligation Bonds (Alternate Revenue Source), Series
2005, General Obligation Waterworks and Sewerage Refunding Bonds (Alternate Revenue
Source, Series 2012 and General Obligation Waterworks and Sewerage Refunding Bonds
(Alternate Revenue Source), Series 2013,such other funds of the City as may be necessary and
on hand from time to time and lawfully available for such purpose, and (ii)ad valorem taxes
levied against all taxable property in the City without limitation as to rate or amount,except that
the rights of the owners of the Bonds and the enforceability of the Bonds may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors'
rights and by equitable principles, whether considered at law or in equity, including the exercise
of judicial discretion.
It is our opinion that, subject to the City's compliance with certain covenants, under
present law, interest on the Bonds is not includible in gross income of the owners thereof for
federal income tax purposes and is not included as an item of tax preference in computing the
alternative minimum tax for individuals and corporations under the Internal Revenue Code of
1986, as amended (the "Code"), but is taken into account in computing an adjustment used in
3849764.01.06.B.doc
2233468/JRS/2/11/16
Chicago New York Salt Lake City San Francisco Washington,DC
Chapman and Cutler LLP
determining the federal alternative minimum tax for certain corporations. Failure to comply with
certain of such City covenants could cause interest on the Bonds to be included in gross income
for federal income tax purposes retroactively to the date of issuance of the Bonds. Ownership of
the Bonds may result in other federal tax consequences to certain taxpayers, and we express no
opinion regarding any such collateral consequences arising with respect to the Bonds.
It is also our opinion that the Bonds are "qualified tax-exempt obligations" pursuant to
Section 265(b)(3)of the Code.
We express no opinion herein as to the accuracy, adequacy or completeness of any
information furnished to any person in connection with any offer or sale of the Bonds.
In rendering this opinion, we have relied upon certifications of the City with respect to
certain material facts solely within the City's knowledge. Our opinion represents our legal
judgment based upon our review of the law and the facts that we deem relevant to render such
opinion and is not a guarantee of a result. This opinion is given as of the date hereof and we
assume no obligation to revise or supplement this opinion to reflect any facts or circumstances
that may hereafter come to our attention or any changes in law that may hereafter occur.
C41 41rlr� 414 C44+4x, Ulf
EPBartholomy/JRSaverino:dt
-2-
STATE OF ILLINOIS )
) SS
COUNTY OF FULTON )
FILING CERTIFICATE
I, the undersigned, do hereby certify that I am the duly qualified and acting County Clerk
of The County of Fulton, Illinois (the "County"), and as such officer I do hereby certify that on
the & day of. 2015 there was filed in my office a duly certified copy of an
ordinance,numbered yeo and entitled:
AN ORDINANCE providing for the issue of $3,325,000 General
Obligation Refunding Bonds (Alternate Revenue Source), Series
2015, of the City of Canton, Fulton County, Illinois, for the
purpose of refunding certain outstanding bonds of the City and for
the levy of a direct annual tax sufficient to pay the principal and
interest on said bonds and authorizing the sale of said bonds to the
purchaser thereof
passed by the City Council of the City of Canton, Fulton County, Illinois, on the 15th day of
September,2015,and approved by the Mayor of said City, and that the same has been deposited
in the official files and records of my office.
IN WITNEss WHEREOF I have hereunto affixed my official signature and the seal of the
County this aday of 2015.
County Clerk of The County of
Fulton,Illinois
(SEAL]
CITY OF CANTON, Fulton County, Illinois
AMOUNT: $3,325,000 G.O. Refunding Bonds(ARS), Series 2015
DATED: 30-Sep-15
INTEREST INTEREST ANNUAL SERIES 2005 ANNUAL
DATE PRINCIPAL RATE DUE DEBT SERVICE DEBT SERVICE SAVINGS
06/01/16 $26,740.96
12/01/16 $1,640,000 1.100% $19,972.50 $1,686,713.46 $1,725,330.00 $38,616.54
06/01/17 $10,952.50
12/01/17 $1,685,000 1.300% $10,952.50 $1,706,905.00 $1,740,140.00 $33,235.00
TOTALS $3,325,000 $68,618.46 $3,393,618.46 $3,465,470.00 $71,851.54
NIC= 1.2089%
SAVINGS
Debt Service remaining on Series 2005 Bonds $3,465,470.00
Less Debt Service on this Issue ($3,393,618.46)
Plus Capitalized Interest $1,772.75
Savings,Dollars $73,624.29
Savings,as%of PAR 2.2%
$3,325,000 REFUNDING ALTERNATE BONDS
SCHEDULE 3325-2
September 15,2015
EXTRACT of MINUTES of a regular public meeting of the City
Council of the City of Canton, Fulton County, Illinois, held in the
Historic Depot,50 North 4th Avenue,Canton,Illinois,in said City,
at 6:30 o'clock P.M.,on the 15th day of September,2015. t.
The Mayor called the meeting to order and directed the City Clerk to call the roll.
Upon the roll being called, Jeffrey Fritz, the Mayor, and the following Aldermen were
physically present at said location: Ryan Mayhew, Tad Putrich, Gerald Ellis, Justin Nelson and
Angela Hale.
The following Aldermen were allowed by a majority of the members of the City Council
I.
in accordance with and to the extent allowed by rules adopted by the City Council to attend the
meeting by video or audio conference:
No Alderman was not permitted to attend the meeting by video or audio conference.
The following Aldermen were absent and did not participate in the meeting in any matter
or to any extent whatsoever: Craig West,Jim Nelson and John Lovell
The Mayor announced that a proposal had been received from Commerce Bank, Peoria,
Illinois for the purchase alternate revenue bonds to be issued by the City for the purpose of
paying the costs of refunding certain of the City's outstanding alternate bonds and that the City
Council would consider the adoption of an ordinance providing for the issue of said bonds and
the levy of a direct annual tax sufficient to pay the principal and interest thereon. The Mayor also
summarized the pertinent terms of said proposal and said bonds,including the length of maturity,
rates of interest,purchase price and%tax levy for said bonds.
Whereupon, Alderman presented, and the City Clerk made
available to the Aldermen and interested members of the public,complete copies of an ordinance
entitled:
3848121.01.07.B
2233468•EPB•9/18/15
Whereupon, Alderman jas�-n - 1 presented, and the City Clerk made
available to the Aldermen and interested members of the public,complete copies of an ordinance
entitled:
AN ORDINANCE providing for the issue of $3,325,000 General
Obligation Refunding Bonds (Alternate Revenue Source), Series
2015, of the City of Canton, Fulton County, Illinois, for the
purpose of refunding certain outstanding bonds of the City and for
the levy of a direct annual tax sufficient to pay the principal and
interest on said bonds and authorizing the sale of said bonds to the
purchaser thereof.
(the "Bond Ordinance
-2-
ORDINANCE No. //0,04/
AN ORDINANCE providing for the issue of $3,325,000 General
Obligation Refunding Bonds (Alternate Revenue Source), Series
2015, of the City of Canton, Fulton County, Illinois, for the
purpose of refunding certain outstanding bonds of the City, for the
levy of a direct annual tax sufficient to pay the principal and
interest on said bonds and authorizing the sale of said bonds to the
purchaser thereof.
WHEREAS the City of Canton, Fulton County, Illinois (the "City"), is a duly organized
and existing municipality and unit of local government created under the provisions of the laws
of the State of Illinois, is now operating under the provisions of the Illinois Municipal Code, as
supplemented and amended (the "Code"), and for many years has owned and operated a
municipally-owned waterworks and sewerage system as a combined utility(the "System")as set
forth in Division 139 of Article 11 of the Code; and
WHEREAS the City has heretofore issued and there are now outstanding General
Obligation Bonds (Alternate Revenue Source), Series 2005, dated October 1, 2005 (the "Prior
Bonds");and
WHEREAS the City Council of the City(the "Corporate Authorities")has determined that
it is advisable, necessary and in the best interests of the City, its residents, and the users of its
System in order to promote the public health, welfare, safety and convenience, to refund a
portion of the outstanding Prior Bonds (said Prior Bonds to be refunded being referred to herein
as the "Refunded Bonds")in order to realize debt service savings(the"Refunding");and
WHEREAS, the Refunded Bonds are presently outstanding and unpaid and are binding and
subsisting legal obligations of the City; and
WHEREAS, in accordance with the terms of the Refunded Bonds, certain of the Refunded
Bonds may be called for redemption in advance of their maturity, and it is necessary and
desirable to make such call for the redemption of such Refunded Bonds on their earliest possible
call date, and provide for the giving of proper notice to the registered owners of such Refunded
Bonds;and
WHEREAS, the expenses and contingencies related to the Refunding include legal,
financial and accounting services related to the accomplishment of said purposes and the
issuance of bonds therefor;bond discount;bond registrar,paying agent, and other related banking
fees;printing and publication costs;and other miscellaneous costs; and
WHEREAS, the estimated costs of effectuating the Refunding, including, as applicable,
such expenses and contingencies,is not more than $3,325,000 and there are insufficient funds on
hand and lawfully available to pay such costs;and
WHEREAS,the City pursuant to the provisions of Division 139 of Article 11 of the Code
is authorized to issue its waterworks and sewerage refunding bonds for the purpose of providing
funds to pay the costs of the Refunding;and
WHEREAS,pursuant to the provisions of the Local Government Debt Reform of the State
of Illinois, as amended (the "Debt Reform Act"), alternate bonds as defined in the Debt Reform
Act may be issued pursuant to Applicable Law as defined in the Debt Reform Act for the
refunding purpose aforesaid, i.e., the City is authorized to issue revenue bonds (without
referendum or right of petition by the electors) pursuant to Division 4 of Article 8 and
Division 139 of Article 11 of the Code, and further pursuant to the provisions of the Debt
Reform Act and, accordingly, is authorized to issue alternate bonds in lieu of said revenue bonds
pursuant to the provisions of the Debt Reform Act; and
WHEREAS,the Debt Reform Act provides that alternate bonds can be issued to refund the
Refunded Bonds without meeting any of the provisions and requirements of Section 15 of the
Debt Reform Act provided that the,term of such alternate bonds is not longer than the term of the
Refunded Bonds and that the debt service payable in any year on such alternate bonds shall not
-2-
exceed the debt service payable in such year on the Refunded Bonds (the "Refunding
Conditions");and
WHEREAS,the City Council has heretofore,and it is hereby expressly,determined that the
Refunding Conditions can be met and accordingly, the Bonds, as hereinafter defined, can be
issued to pay the costs of the Refunding;and
WHEREAS, the Bonds to be issued will be payable from the Pledged Revenues and the
Pledged Taxes,both as hereinafter defined;and
WHEREAS, the City has heretofore entered into a Loan Agreement with the Illinois
Environmental Protection Agency, dated June 26, 2001 (the "IEPA Loan Agreement") pursuant
to Ordinance No. 1698, adopted by the City Council of the City on June 5, 2001 for the purpose
of paying a part of the cost of constructing,improving and extending the System; and
WHEREAS the IEPA Loan Agreement contains provisions for the issuance of additional
parity obligations, including the Bonds;and
WHEREAS pursuant to the IEPA Loan Agreement, the Illinois Environmental Protection
Agency has provided its consent to issue the Bonds on a parity with the City's outstanding loan
evidenced by the IEPA Loan Agreement; and
WHEREAS, the Bonds will be issued on a parity with the Prior Bonds not being refunded;
the IEPA Loan Agreement, the City's General Obligation Waterworks and Sewerage Refunding
Bonds (Alternate Revenue Source), Series 2012 (the "Series 2012 Bonds") and the City's
General Obligation Waterworks and Sewerage Refunding Bonds (Alternate Revenue Source),
Series 2013 (the "Series 2013 Bonds");and
WHEREAS, the Corporate Authorities do hereby find and determine that the Bonds are
being issued pursuant to Section 15 of the Debt Reform Act; and
-3-
ti
WHEREAS, the County Clerk of Fulton County, Illinois (the "County Clerk), is therefore
authorized to extend and collect said direct annual and valorem tax so levied for the payment of
the Bonds for the Refunding,as alternate bonds,without limitation as to rate or amount:
Now THEREFORE Be It Ordained by the City Council of the City of Canton, Fulton
County,Illinois as follows:
Section 1. Definitions The following words and terms used in this Ordinance shall
have the following meanings unless the context or use clearly indicates another or different
meaning is intended:
"Act" or "Debt Reform Act"means the Local Government Debt Reform Act of the State
of Illinois, as amended.
"Additional Bonds" means any alternate bonds issued in the future in accordance with
the provisions of the Debt Reform Act on a parity with and sharing ratably and equally in the
Pledged Revenues with the Bonds.
"Alternate Bond and Interest Subaccount" means the Alternate Bond and Interest
Subaccount maintained hereunder and further described by Section 12 of this Ordinance.
"Bond" or "Bonds" means one or more, as applicable, of the $3,325,000 General
Obligation Refunding Bonds (Alternate Revenue Source), Series 2015, authorized to be issued
by this Ordinance.
"Bond Fund" means the Series 2015 Alternate Bond Fund established hereunder and
further described by Section 15 of this Ordinance.
"Bond Register" means the books of the City kept by the Bond Registrar to evidence the
registration and transfer of the Bonds.
"Bond Registrar" means Commerce Bank, Peoria, Illinois, or successor thereto or
designated hereunder,in its respective capacities as bond registrar and paying agent.
-4-
E
"City"means the City of Canton,Fulton County,Illinois.
"Code"means the Illinois Municipal Code, as supplemented and amended.
"Corporate Authorities"means the City Council of the City.
"County Clerk"means the County Clerk of The County of Fulton,Illinois.
"Fiscal Year" means that twelve-calendar month period beginning on May 1 of the
calendar year and ending on the next succeeding April 30.
"Future Bond Ordinances" means the ordinances of the City authorizing the issuance of
bonds payable from the Revenues, but not including this Ordinance or any other ordinance
authorizing the issuance of Additional Bonds.
"IRC"means the Internal Revenue Code of 1986,as amended.
"Net System Revenues" means moneys to the credit of the Alternate Bond and Interest
Subaccount within the Surplus Account of the Waterworks and Sewerage Fund, said Surplus
Account consisting of the funds remaining in the Waterworks and Sewerage Fund after the
required monthly deposits and credits have been made to the Operation and Maintenance
Account, the Depreciation Account and any other accounts as may be created in the future, of
said Waterworks and Sewerage Fund.
"Operation and Maintenance Costs" means all costs of operating, maintaining and
routine repair of the System, including wages, salaries, costs of materials and supplies, power,
fuel, insurance, taxes, including rebate of excess arbitrage profits to the U.S. government, and
purchase of water or sewage treatment services (including all payments by the City pursuant to
long-term contracts for such services); but excluding debt service, depreciation, capital
improvements or replacements (including meter replacements) or engineering expenses in
anticipation thereof or in connection therewith, or any reserve requirements; and otherwise
-5-
determined in accordance with generally accepted accounting principles for municipal enterprise
funds.
"Ordinance"means this Ordinance as originally adopted and as the same may from time
to time be amended or supplemented in accordance with terms hereof.
"Other Funds"means such other funds of the City as may be necessary and on hand from
time to time and lawfully available to pay principal and interest on the Bonds.
"Outstanding" means the IEPA Loan Agreement, the unrefunded portion of the Prior
Bonds, the Series 2012 Bonds, the Series 2013 Bonds, the Bonds and Additional Bonds which
are outstanding and unpaid;provided, however, such term shall not include any of the IEPA Loan
Agreement, the unrefunded portion of the Prior Bonds, the Series 2012 Bonds, the Series 2013
Bonds, the Bonds or Additional Bonds (i)which have matured and for which moneys are on
deposit with proper paying agents or are otherwise sufficiently available to pay all principal
thereof and interest thereon or(ii)the provision for payment of which has been made by the City
by the deposit in an irrevocable trust or escrow of funds or direct, full faith and credit obligations
of the United States of America,the principal of and interest on which will be sufficient to pay at
maturity or as called for redemption all the principal of and interest on such IEPA Loan
Agreement, the unrefunded portion of the Prior Bonds, the Series 2012 Bonds, the Series 2013
Bonds,the Bonds or Additional Bonds.
"Pledged Moneys"means,collectively,the Pledged Revenues and the Pledged Taxes.
"Pledged Revenues"means (a)Net System Revenues and(b) Other Funds.
"Pledged Taxes"means the ad valorem taxes levied against all of the taxable property in
the City without limitation as to rate or amount,pledged hereunder by the City as security for the
Bonds.
-6-
"Revenues" means all income from whatever source derived from the System, including
(i)investment income; (ii)connection, permit and inspection fees and the like; (iii)penalties and
delinquency charges; (iv)capital development, reimbursement, or recovery charges and the like;
and (v)annexation or pre-annexation charges insofar as designated by the Corporate Authorities
as paid for System connection or service; but excluding expressly(a)non-recurring income from
the sale of property of the System; (b)governmental or other grants; and (c)advances or grants
made from the City; and as otherwise determined in accordance with generally accepted
accounting principles for municipal enterprise funds.
"System" refers to all property, real, personal or otherwise owned or to be owned by the
City or under the control of the City, and used for waterworks and sewerage purposes, including
any and all further extensions,improvements and additions to the System.
"Tax-exempt" means, with respect to the Bonds, the status of interest paid and received
thereon as not includible in the gross income of the owners thereof under the IRC for federal
income tax purposes except to the'extent that such interest will be taken into account in
computing an adjustment used in determining the alternative minimum tax for certain
corporations.
"Waterworks and Sewerage Fund" means the Waterworks and Sewerage Fund of the
City created hereunder and further described in Section 11 of this Ordinance.
Section 2. Incorporation of Preambles. The Corporate Authorities hereby find that the
recitals contained in the preambles to this Ordinance are true, correct and do hereby incorporate
them into this Ordinance by this reference.
Section 3. Determination to Issue Bonds. It is necessary and in the best interests of the
City for the City to undertake the Refunding in accordance with the estimate of costs therefor as
described, and to issue the Bonds to enable the City to pay the costs thereof.
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Section 4. Authorization. It is hereby found and determined that the Corporate
Authorities has been authorized by law to borrow $3,325,000 upon the credit of the City and as
evidence of such indebtedness to issue bonds of the City to said amount, the proceeds of said
bonds to be used for the Refunding, and that it is necessary to borrow $3,325,000 of said
authorized sum and issue said bonds in evidence thereof for purpose of paying costs of the
Refunding, and that it is necessary and for the best interests of the City that there be issued
$3,325,000 of the bonds so authorized for the Refunding.
Section 5. Bond Details. For the purpose of providing for the payment of the.costs of
the Refunding, there shall be issued and sold the Bonds in the aggregate principal amount of
$3,325,000. The Bonds shall each be designated "General Obligation Refunding Bond
(Alternate Revenue Source), Series 2015," and be dated the date of issuance, and shall also bear
the date of authentication thereof. The Bonds shall be in fully registered form, shall be in
denominations of$100,000 each and authorized integral multiples of$5,000 in excess thereof
(but no single Bond shall represent principal maturing on more than one date), shall be numbered
in such reasonable fashion as may be selected by the Bond Registrar,and shall mature serially on
December 1 of the years (subject to prior redemption as set forth herein), in the amounts and
bearing interest at the rates percent per annum as follows:
2016 $1,640,000 1.10%
2017 1,685,000 1.30%
Each Bond shall bear interest from the later of its Dated Date as hereinabove provided or
from the most recent interest payment date to which interest has been paid or duly provided for
until the principal amount of such Bond is paid or duly provided for, such interest (computed
upon the basis of a 360-day year of twelve 30-day months) being payable on June 1, 2016, and
semiannually thereafter on June 1 and December 1 of each year. Interest on each Bond shall be
paid by check or draft of the Bond Registrar, payable upon presentation thereof in lawful money
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of the United States of America,to the person in whose name such Bond is registered at the close
of business on the 15th day of the month next preceding the interest payment date. The principal
of the Bonds shall be payable in lawful money of the United States of America upon presentation
thereof at the principal office of the Bond Registrar.
Section 6. Execution; Authentication. The Bonds shall be executed on behalf of the
City with the manual or duly authorized facsimile signature of the Mayor and attested with the
manual or duly authorized facsimile signature of the City Clerk or duly authorized City Clerk,as
they may determine, and shall have impressed or imprinted thereon the corporate seal or
facsimile thereof of the City. In case any officer whose signature shall appear on any Bond shall
cease to be such officer before the delivery of such Bond, such signature shall nevertheless be
valid and sufficient for all purposes, the same as if such officer had remained in office until
delivery.
All Bonds shall have thereon a certificate of authentication substantially in the form
hereinafter set forth duly executed by the Bond Registrar as authenticating agent of the City and
showing the date of authentication. No Bond shall be valid or obligatory for any purpose or be
entitled to any security or benefit under this Ordinance unless and until such certificate of
authentication shall have been duly executed by the Bond Registrar by manual 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 it 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 7. Registration of Bonds; Persons Treated as Owners. The City shall cause
books (the "Bond Register") for the registration and for the transfer of the Bonds as provided in
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this Ordinance to be kept at the principal office of the Bond Registrar, which is hereby
constituted and appointed the registrar of the City. The City is authorized to prepare, and the
Bond Registrar shall keep custody of, multiple Bond blanks executed by the City for use in the
transfer and exchange of Bonds.
Upon surrender for transfer of any Bond at the principal office of the Bond Registrar,duly
endorsed by, or accompanied by a written instrument or instruments of transfer in form
satisfactory to the Bond Registrar and duly executed by, the registered owner or his or her
attorney duly authorized in writing, the City shall execute and the Bond Registrar shall
authenticate, date and deliver in the name of the transferee or transferees a new fully registered
Bond or Bonds of the same maturity of authorized denominations, for a like aggregate principal
amount. Any fully registered Bond or Bonds may be exchanged at said principal office of the
Bond Registrar for a like aggregate principal amount of Bond or Bonds of the same maturity of
other authorized denominations. The execution by the City of any fully registered Bond shall
constitute full and due authorization of such Bond and the Bond Registrar shall thereby be
authorized to authenticate, date and deliver such Bond,provideg however, the principal amount
of outstanding Bonds of each maturity authenticated by the Bond Registrar shall not exceed the
authorized principal amount of Bonds for such maturity less previous retirements.
The Bond Registrar shall not be required to transfer or exchange any Bond during the
period beginning at the close of business on the 15th day of the month next preceding any
interest payment date on such Bond and ending at the opening of business on such interest
payment date.
The person in whose name any Bond shall be registered shall be deemed and regarded as
the absolute owner thereof for all purposes, and payment of the principal of or interest on any
Bond shall be made only to or upon the order of the registered owner thereof or his or her legal
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representative. All such payments shall be valid and effectual to satisfy and discharge the
liability upon such Bond to the extent of the sum or sums so paid.
No service charge shall be made for any transfer or exchange of Bonds,but the City or the
Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Bonds except in the
case of the issuance of a Bond or Bonds for the unredeemed portion of a Bond surrendered for
redemption.
Section 8. Form of Bonds. The Bonds shall be in substantially the form hereinafter
set forth;provided, however, that if the text of the Bonds is to be printed in its entirety on the
front side of the Bonds,then the second paragraph on the front side and the legend "See Reverse
Side for Additional Provisions" shall be omitted and the text of paragraphs set forth for the
reverse side shall be inserted immediately after the first paragraph.
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[Form of Bond-Front Side]
REGISTERED REGISTERED
No. $
UNITED STATES OF AMERICA
STATE OF ILLINOIS
COUNTY OF FULTON
CITY OF CANTON
GENERAL OBLIGATION REFUNDING BOND
(ALTERNATE REVENUE SOURCE)
SERIES 2015
See Reverse Side for
Additional Provisions
Interest Maturity Dated
Rate: % Date: December 1,20_ Date: September 30,2015
Registered Owner: COMMERCE BANK,PEORIA,ILLINOIS
Principal Amount: Dollars
KNOw ALL PERSONS BY TBESE PRESENTS that the City of Canton, Fulton County,
Illinois, a municipality and political subdivision of the State of Illinois (the "City"), hereby
acknowledges itself to owe and for value received promises to pay to the Registered Owner
identified above, or registered assigns as hereinafter provided, on the Maturity Date identified
above, the Principal Amount identified above and to pay interest (computed on the basis of a
360-day year of twelve 30-day months) on such Principal Amount from the Dated Date of this
Bond identified above or from the most recent interest payment date to which interest has been
paid or duly provided for at the Interest Rate per annum identified above, such interest to be
payable on June 1, 2016, and semiannually thereafter on June 1 and December 1 of each year
until the Principal Amount is paid or duly provided for. The Principal Amount of this Bond is
payable in lawful money of the United States of America upon presentation at the principal office
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of Commerce Bank, Peoria, Illinois, as paying agent and bond registrar (the "Bond Registrar").
Payment of interest shall be made to the Registered Owner hereof as appearing on the Bond
Register of the City maintained by the Bond Registrar at the close of business on the 15th day of
the month next preceding the interest payment date and shall be paid by check or draft of the
Bond Registrar, payable upon presentation in lawful money of the United States of America,
mailed to the address of such Registered Owner as it appears on such registration books or at
such other address furnished in writing by such Registered Owner to the Bond Registrar.
Reference is hereby made to the further provisions of this Bond set forth on the reverse
hereof, and such further provisions shall for all purposes have the same effect as if set forth at
this place.
It is hereby certified and recited that all acts, conditions and things required to be done
precedent to and in the issuance of this Bond have been done and have happened and have been
performed in regular and due form of law; that the indebtedness of the City, including the issue
of Bonds of which this is one, does not exceed any limitation imposed by law;that provision has
been made for the collection of the Pledged Revenues, the levy and collection of the Pledged
Taxes, and the segregation of all Pledged Moneys to pay the interest hereon as it falls due and
also to pay and discharge the principal hereof at maturity; and that the City hereby covenants and
agrees that it will properly account for said Pledged Moneys and will comply with all the
covenants of and maintain the funds and accounts as provided by the Ordinance. For the prompt
payment of this Bond, both principal and interest at maturity, the full faith, credit and resources
of the City are hereby irrevocably pledged.
This Bond shall not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been signed by the Bond Registrar.
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IN WITNESS WHEREOF the City of Canton, Fulton County, Illinois, by its City Council,
has caused this Bond to be executed with the manual or duly authorized facsimile signature of its
Mayor and attested by the manual or duly authorized facsimile signature of its City Clerk and its
corporate seal or a facsimile thereof to be impressed or reproduced hereon, all as appearing
hereon and as of the Dated Date identified above.
Mayor
ATTEST:
City Clerk
[SEAL]
Date of Authentication: September 30,2015
CERTIFICATE
OF
AUTHENTICATION
This Bond is one of the Bonds described Bond Registrar and Paying Agent:
in the within-mentioned Ordinance and is one Commerce Bank
of the General Obligation Refunding Bonds Peoria,Illinois
(Alternate Revenue:Source), Series 2015, of
the City of Canton,Fulton County,Illinois.
COMMERCE BANK,
as Bond Registrar
By
Authorized.Officer
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[Form of Bond-Reverse Side]
CITY OF CANTON
FULTON COUNTY,ILLINOIS
GENERAL OBLIGATION REFUNDING BOND
(ALTERNATE REVENUE SOURCE)
SERIES 2015
This Bond is one of a series of bonds issued by the City for the purpose of paying the
costs of refunding certain of the City's outstanding bonds, pursuant to and in all respects in full
compliance with the provisions of the Local Government Debt Reform Act of the State of Illinois
as supplemented and amended (the "Act"), and Division 139 of Article 11 of the Illinois
Municipal Code, as supplemented and amended(the "Code"). The Bonds are issued pursuant to
a bond ordinance passed by the City Council of the City (the "Corporate Authorities") on the
15th day of September, 2015 (the "Ordinance"),to which reference is hereby expressly made for
further definitions and terms and to all the provisions of which the Registered Owner by the
acceptance of this Bond assents.
Under the Code and the Ordinance, the Revenues, as defined, from the operation of the
waterworks and sewerage system of the City (the "System") shall be deposited`into the
Waterworks and Sewerage Fund of the City which shall be used only and has been pledged for
paying Operation and Maintenance Expenses, paying the principal of and interest on all bonds of
the City that are payable by their terms from the revenues of the System, providing an adequate
depreciation fund, and in making all payments required to maintain the accounts established
under the Ordinance. The City may issue future waterworks and sewerage revenue bonds,which
bonds may have a prior lien on the Revenues, or additional alternate bonds on a parity with the
Bonds,in each case pursuant to the terms of the Ordinance.
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The Bonds are payable from (i)(a)together with the City's outstanding IEPA Loan
Agreement, the unrefunded portion of the Prior Bonds, the Series 2012 Bonds and the Series
2013 Bonds (each as defined in the Ordinance), moneys to the credit of the Alternate Bond and
Interest Subaccount within the Surplus Account of the Waterworks and Sewerage Fund, said
Surplus Account consisting of the funds remaining in the Waterworks and Sewerage Fund after
the required monthly deposits and credits have been made under the Ordinance or future revenue
bond ordinances to the various accounts of the Waterworks and Sewerage Fund and(b) together
with the City's outstanding unrefunded portion of the Prior Bonds,the Series 2012 Bonds and the
Series 2013 Bonds, such other funds of the City as may be necessary and on hand from time to
time and lawfully available for such purpose(the "Pledged Revenues"), and(ii)ad valorem taxes
levied against all of the taxable property in the City without limitation as to rate or amount(the
"Pledged Taxes") (the Pledged Revenues and the Pledged Taxes being collectively called the
"Pledged Moneys"),all in accordance with the provisions of the Act and the Code.
This Bond does not and will not constitute an indebtedness of the City within the
meaning of any constitutional or statutory provision or limitation, unless the Pledged Taxes shall
be extended pursuant to the general obligation, full faith and credit promise supporting the
Bonds, in which case the amount of the Bonds then outstanding shall be included in the
computation of indebtedness of the City for purposes of all statutory provisions or limitations
until such time as an audit of the City shall show that the Bonds shall have been paid from the
Pledged Revenues for a complete City fiscal year.
This Bond is transferable by the Registered Owner hereof in person or by his or her
attorney duly authorized in writing at the principal corporate trust office of the Bond Registrar in
Peoria, Illinois, but only in the manner, subject to the limitations and upon payment of the
charges provided in the Ordinance, and upon surrender and cancellation of this Bond. Upon such
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transfer a new Bond or Bonds of authorized denominations of the same maturity and for the same
aggregate principal amount will be issued to the transferee in exchange therefor.
The Bonds are issued in fully registered form in the denomination of$100,000 each or
authorized integral multiples of$5,000 in excess thereof. This Bond may be exchanged at the
principal corporate trust office of the Bond Registrar for a like aggregate principal amount of
Bonds of the same maturity of other authorized denominations, upon the terms set forth in the
Bond Ordinance. The Bond Registrar shall not be required to transfer or exchange any Bond
during the period from the close of business on the 15th day of the calendar month next
preceding an interest payment date on the Bonds to the opening of business on such interest
payment date.
The City and the Bond Registrar may deem and treat the Registered Owner hereof as the
absolute owner hereof for the purpose of receiving payment of or on account of principal hereof,
premium, if any, hereon and interest due hereon and for all other purposes; and neither the City
nor the Bond Registrar shall be affected by any notice to the contrary.
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ASSIGNMENT
FOR VALUE RECEIVED the undersigned sells,assigns and transfers unto
(Name and Address of Assignee)
the within Bond and does hereby irrevocably constitute and appoint
as attorney to transfer the said Bond on the books kept for registration thereof with full power of
substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: The signature to this assignment must correspond with the name of the registered
owner as it appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatever.
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Section 9. Sale of the Bonds. The Bonds hereby authorized shall be executed as in this
Ordinance provided as soon after the passage hereof as may be, and thereupon be deposited with
the Treasurer of the City, and be by said Treasurer delivered to Commerce Bank, Peoria, Illinois
(the "Purchaser"), upon receipt of the purchase price therefor, the same being par; the contract
for the sale of the Bonds heretofore entered into is in all respects ratified, approved and
confirmed, it being hereby found and determined that the Bonds have been sold at such price and
bear interest at such rates that neither the true interest cost (yield) nor the net interest rate
received upon such sale exceed the maximum rate otherwise authorized by Illinois law and that
the contract for the sale of the Bonds is in the best interests of the City and that no person holding
any office of the City, either by election or appointment, is in any manner financially interested
directly in his or her own name or indirectly in the name of any other person,association,trust or
corporation,in the contract for the sale of the Bonds.
The use by the Purchaser of any Preliminary Term Sheet and any final Term Sheet
relating to the Bonds (the "Term Sheet") is hereby ratified, approved and authorized; the
execution and delivery of the Term Sheet is hereby authorized; and the officers of the City are
hereby authorized to take any action as may be required on the part of the City to consummate
the transactions contemplated by the contract for the sale of the Bonds, this Ordinance, said
Preliminary Term Sheet,said Term Sheet and the Bonds.
Section 10. Treatment of Bonds As Debt. The Bonds shall be payable from the Pledged
Moneys and do not and shall not constitute an indebtedness of the City within the meaning of any
constitutional or statutory limitation, unless the Pledged Taxes shall be extended pursuant to the
general obligation, full faith and credit promise supporting the Bonds, as set forth in Section 14
hereof, in which case the amount of the Bonds then Outstanding shall be included in the
computation of indebtedness of the City for purposes of all statutory provisions or limitations
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until such time as an audit of the City shall show that the Bonds have been paid from the Pledged
Revenues for a complete Fiscal Year in accordance with the Act.
Section 11. Continuation of Waterworks and Sewerage Fund and Accounts Thereof.
Upon the issuance of any.of the Bonds, the System shall continue to be operated on a
Fiscal Year basis. All of the Revenues shall be set aside as collected and be deposited in a
separate fund and in an account in a bank to be designated by the Corporate Authorities, which
fund is hereby created and is designated as the "Waterworks and Sewerage Fund" (the "Fund")
of the City,which shall constitute a trust fund for the sole purpose of carrying out the covenants,
terms, and conditions of this Ordinance and any ordinances providing for the issuance of parity
bonds, and shall be used only in paying Operation and Maintenance Expenses, providing an
adequate depreciation fund,paying the principal of and interest on all bonds of the City which by
their terms are payable from the revenues derived from the System, and providing for the
establishment of and expenditure from the respective accounts as hereinafter described.
Section 12. Flow of Funds. There shall be and there are hereby continued separate
accounts in the Waterworks and Sewerage Fund to be known as the "Waterworks Operation and
Maintenance Account," such other accounts as may be established under any Future Bond
Ordinances, the "Waterworks Depreciation and Contingencies Account" (the "Depreciation
Account"), and the"Surplus Account,"to which there shall be credited on or before the first day
of each month by the financial officer of the City,without any further official action or direction,
in the order in which said accounts are hereinafter mentioned, all moneys held in the Fund, in
accordance with the following provisions:
(a) Operation and Maintenance Account:
There shall be credited to or retained in the Operation and Maintenance Account
an amount sufficient, when added to the amount then on deposit in said Account,
to establish or maintain a balance to an amount not less than the amount
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considered necessary to pay Operation and Maintenance Expenses for the then
current month.
(b) Accounts Created Pursuant to Future Bond Ordinances:
Future Bond Ordinances may create additional accounts in the Fund for the
payment and security of waterworks and sewerage revenue bonds that hereafter
may be issued by the City. Amounts in the Fund shall be credited to and
transferred from said accounts in accordance with the terms of the Future Bond
Ordinances.
(c) Depreciation Account:
Beginning the month after the delivery of the Bonds,there shall be credited to the
Depreciation Account and held, in cash and investments, such sum as the City
Council may deem necessary in order to provide an adequate depreciation fund for
the System. In future bond ordinances, the City may covenant to make specific
monthly deposits to said Depreciation Account and to accumulate funds therein.
Amounts to the credit of said Depreciation Account shall be used for (i) the
payment of the cost 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, (ii) for the purpose of acquiring or constructing improvements and
extensions to the System, and (iii) the payment of principal of or interest and
applicable premium on any Outstanding bonds at any time when there are no other
funds available for that purpose in order to prevent a default. Future Bond
Ordinances may provide for additional deposits to said Depreciation Account and
additional uses and transfers of the funds on deposit in said Depreciation Account.
(d) Surplus Account:
All moneys remaining in the Fund, after crediting the required amounts to the
respective accounts hereinabove provided for, and after making up any deficiency
in said accounts, shall be credited to the Surplus Account. Funds in the Surplus
Account shall first be used to make up any subsequent deficiencies in any of said
accounts and then shall be deposited to a separate and segregated account hereby
created and designated the "Alternate Bond and Interest Subaccount of the
Surplus Account"(the "Alternate Bond and Interest Subaccount"),as follows:
A. There shall be paid into the Alternate Bond and Interest Subaccount in each
month after the required payments have been made into the Accounts above described, a
fractional amount of the interest becoming due on the next succeeding interest payment
date on all Outstanding bonds and a fractional amount of the principal becoming due on
the next succeeding principal maturity date of all Outstanding bonds until there shall have
been accumulated in the Alternate Bond and Interest Subaccount on or before the month
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preceding such maturity date of interest or principal, an amount sufficient to pay such
principal or interest,or both,of all Outstanding bonds.
B. In computing the fractional amount to be set aside each month in said
Alternate Bond and Interest Subaccount, the fraction shall be so computed that sufficient
funds will be set aside in said Subaccount and will be available for the prompt payment of
such principal of and interest on all Outstanding bonds as the same will become due and
shall be not less than one-fifth of the interest becoming due on the next succeeding
interest payment date and not less than one-tenth of the principal becoming due on the
next succeeding principal payment date on all Outstanding bonds until there is sufficient
money in said Subaccount to pay such principal or interest or both.
C. Credits to the Alternate Bond and Interest Subaccount may be suspended in
any Fiscal Year at such time as there shall be a sufficient sum, held in cash and
investments, in said Subaccount to meet principal and interest requirements in said
Subaccount for the balance of such Fiscal Year, but such credits shall be resumed at the
beginning of the next Fiscal Year.
D. All moneys in said Subaccount shall be used only for the purpose of paying
interest on and principal of Outstanding bonds.
E. Any funds remaining in the Surplus Account after making the aforesaid
deposits to the credit of the Alternate Bond and Interest Subaccount, at the discretion of
the Corporate Authorities, shall be used, first, to make up any subsequent deficiencies in
any of the accounts hereinabove named; and then, for the remainder of all surplus
Revenues, at the discretion of the Corporate Authorities,for one or more of the following
purposes without any priority among them:
1. For the purpose of constructing or acquiring repairs, replacements,
improvements or extensions to the System;or
2. For making transfers to the Fund generally to be applied and treated
as Revenues when transferred; or
3. For the purpose of calling and redeeming Outstanding bonds payable
from the System which are callable at the time;or
4. For the purpose of purchasing Outstanding bonds payable from the
System;or
5. For the purpose of paying principal of and interest on any subordinate
bonds or obligations issued for the purpose of acquiring or constructing repairs,
replacements,improvements or extensions to the System; or
6. For any purpose enumerated in any Future Bond Ordinance; or
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7. For any other lawful System purpose.
Money to the credit of the Fund may be invested pursuant to any authorization
granted to municipal corporations by Illinois statute or court decision.
Section 13. Account Excesses. Any amounts to the credit of the Accounts in excess of
the then current requirements therefor may be transferred at any time by the Corporate
Authorities to such other Account or Accounts of the Fund as it may in its sole discretion
designate.
Section 14. Pledged Taxes, Tax Levy. For the purpose of providing additional funds to
pay the principal of and interest on the Bonds,and as provided in Section 15 of the Debt Reform
Act,there is hereby levied upon all of the taxable property within the City, in the years for which
any of the Bonds are Outstanding, a direct annual tax in amounts sufficient for that purpose, and
there be and there hereby is levied upon all of the taxable properly in the City the following
direct annual taxes(the "Pledged Taxes'):
FOR THE YEAR A TAX SUFFICIENT TO PRODUCE THE SUM OF:
2015 $1,670,925.00 for principal and interest up to
and including June 1,2017
2016 $1,695,952.50 for principal and interest
The City expects to pay the interest due on the Bonds on June 1, 2016 solely from
Pledged Revenues. Principal or interest maturing at any time when there are not sufficient funds
on hand from the Pledged Taxes to pay the same shall be paid promptly when due from current
funds on hand in advance of the collection of the Pledged Taxes herein levied; and when the
Pledged Taxes shall have been collected, reimbursement shall be made to said funds in the
amount so advanced.
Subject to the provisions of this Ordinance, the City covenants and agrees with the
purchasers and the owners of the Bonds that so long as any of the Bonds remain Outstanding,the
City will take no action or fail to take any action which in any way would adversely affect the
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ability of the City to collect the Pledged Revenues or to levy and collect the Pledged Taxes. The
City and its officers will comply with all present and future applicable laws in order to assure that
the Pledged Revenues will be available and that the Pledged Taxes will be levied, extended and
collected as provided herein and deposited in the Bond Fund(as hereinafter defined).
The Pledged Taxes are hereby irrevocably pledged to and shall be used only for the
purpose of paying principal of and interest on the Bonds.
Section 15. Filing with County Clerk;Alternate Bond Fund; Certificate of Reduction of
Taxes. After this Ordinance becomes effective, a copy hereof, certified by the City Clerk, shall
be filed with the County Clerk. The County Clerk shall in and for each of the years required
ascertain the rate percent required to produce the aggregate Pledged Taxes hereinbefore provided
to be levied in each of said years; and the County Clerk shall extend the same for collection on
the tax books in connection with other taxes levied in said years in and by the City for general
corporate purposes of the City; and the County Clerk, or other appropriate officer or designee,
shall remit the Pledged Taxes for deposit to the credit of a special fund to be designated the
"Series 2015 Alternate Bond Fund" (the "Bond Fund"), and in said years the Pledged Taxes
shall be levied and collected by and for and on behalf of the City in like manner as taxes for
general municipal purposes of the City for said years are levied and collected;and in addition to
and in excess of all other taxes. The Pledged Taxes are hereby irrevocably pledged to and shall
be used only for the purpose of paying principal of and interest on the Bonds. The purpose of the
Bond Fund is to provide a fund to receive and disburse the proceeds of the Other Funds and to
receive and disburse Pledged Taxes for any of the Bonds. All payments made with respect to the
Bonds from the Net System Revenues shall be made directly from the Alternate Bond and
Interest Subaccount of the Fund. There are hereby created two accounts in the Bond Fund,
designated the "Other Funds Account" and the "General Account." All proceeds of the Other
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Funds as required for the Bonds shall be deposited to the credit of the Other Funds Account, and
all Pledged Taxes shall be deposited to the credit of the General Account. The Bond Fund and
its respective accounts constitute a trust fund established for the purpose of carrying out the
covenants,terms and conditions imposed upon the City by this Ordinance. It is hereby expressly
provided that in the event there shall be moneys both to the credit of the Alternate Bond and
Interest Subaccount and the Bond Fund, the Bond Fund shall be fully depleted before moneys to
the credit of the Alternate Bond and Interest Subaccount shall be used to pay principal of and
interest on the Bonds.
The Mayor, City Clerk and Treasurer of the City or his and her designee shall prepare
and file with the County Clerk a Certificate of Reduction of Taxes Heretofore Levied for the
Payment of Bonds showing the Refunded Bonds and directing the abatement of the taxes
heretofore levied to pay the Refunded Bonds.
Section 16. Abatement of Pledged Taxes. As provided in the Act, whenever the Pledged
Revenues shall have been determined by the City Council to provide in any calendar year an
amount sufficient to pay debt service of all outstanding Bonds for such year,the City Council, or
the City Treasurer acting with proper authority, shall, prior to the time the Pledged Taxes levied
in such calendar year are extended, direct the abatement of the Pledged Taxes, and.,proper
notification of such abatement shall be filed with the County Clerk in a timely manner to effect
such abatement. In any year the City may abate the Pledged Taxes before the Pledged Revenues
are on hand for the payment of the Bonds.
Section 17. Pledged Revenues; General Covenants. The City covenants and agrees with
the registered owners of the Bonds that,so long as any Bonds remain Outstanding:
A. The City hereby pledges the Pledged Revenues to the payment of the Bonds,
and the Corporate Authorities covenant and agree to provide for, collect and apply the
Pledged Revenues to the payment of the Bonds, all in accordance with Section 15 of the
Act.
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B. The City will punctually pay or cause to be paid from the Alternate Bond
and Interest Subaccount and from the Bond Fund the principal of and the interest on the
Bonds in strict conformity with the terms of the Bonds and this Ordinance, and it will
faithfully observe and perform all of the conditions, covenants and requirements thereof
and hereof.
C. The City will pay and discharge, or cause to be paid and discharged, from
the Alternate Bond and Interest Subaccount and the Bond Fund any and all lawful claims
which, if unpaid, might become a lien or charge upon the Pledged Moneys, or any part
thereof, or upon any funds in the hands of the Bond Registrar, or which might impair the
security of the Bonds. Nothing herein contained shall require the City to make any such
payment so long as the City in good faith shall contest the validity of said claims.
D. The City will keep,or cause to be kept,proper books of record and accounts,
separate from all other records and accounts of the City, in which complete and correct
entries shall be made of all transactions relating to the Pledged Moneys, the Alternate
Bond and Interest Subaccount and the Bond Fund. Such books of record and accounts
shall at all times during business hours be subject to the inspection of the registered
owners of not less than ten per cent (10%) of the principal amount of the Outstanding
bonds or their representatives authorized in writing.
E. The City will preserve and protect the security of the Bonds and the rights of
the registered owners of the Bonds and will warrant and defend their rights against all
claims and demands of all persons. From and after the sale and delivery of any of the
Bonds by the City,the Bonds shall be incontestable by the City.
F. The City will adopt, make, execute and deliver any and all such further
ordinances, resolutions, instruments and assurances as may be reasonably necessary or
proper to carry out the intention of,or to facilitate the performance of,this Ordinance,and
for the better assuring and confirming unto the registered owners of the Bonds of the
rights and benefits provided in this Ordinance.
G. As long as any Bonds are Outstanding, the City will continue to deposit the
Pledged Revenues to the Alternate Bond and Interest Subaccount and, if applicable, the
Pledged Taxes to the Bond Fund. The-City covenants and agrees with the purchasers of
the Bonds and with the registered owners thereof that so long as any Bonds remain
Outstanding, the City will take no action or fail to take any action which in any way
would adversely affect the ability of the City to collect the Pledged Taxes and to collect
and to segregate the Pledged Moneys. The City and its officers will comply with all
present and future applicable laws in order to assure that the Pledged Taxes can be
extended and that the Pledged Revenues and the Pledged Taxes may be collected and
deposited to the Alternate Bond and Interest Subaccount and the Bond Fund,respectively,
as provided herein.
H. Once issued, the Bonds shall be and forever remain until paid or defeased
the general obligation of the City, for the payment of which its full faith and credit are
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pledged, and shall be payable, in addition to the Pledged Revenues, from the levy of the
Pledged Taxes as provided in the Act.
I. The City will, maintain the System in good repair and working order, will
operate the same efficiently and faithfully and will punctually perform all duties with
respect thereto required by the Constitution and laws of the State of Illinois and Federal
law.
J. The City will establish and maintain at all times reasonable fees, charges,
and rates for the use and service of the System and will provide for the collection thereof
and the segregation and application of the Revenues in the manner provided by this
Ordinance, sufficient at all times to pay Operation and Maintenance Expenses,to provide
an adequate depreciation fund,to pay the principal of and interest on all bonds of the City
which by their terms are payable from the revenues of the System, and to provide for the
creation and maintenance and funding of the respective accounts as provided in Section
12 of this Ordinance; it is hereby expressly provided that the pledge and establishment of
rates or charges for use of the System shall constitute a continuing obligation of the City
with respect to such establishment and a continuing appropriation of the amounts
received.
K. There shall be charged against all users of the System, including the City,
such rates and amounts for water and sewerage services as shall be adequate to meet the
requirements of this section. Charges for services rendered the City shall be made against
the City, and payment for the same shall be made monthly from the corporate funds into
the Fund as revenues derived from the operation of the System;provided, however, that
the City need not charge itself for such services if in the previous Fiscal Year Revenues
not including any payments made by the City shall have met the requirements of this
Ordinance.
L. Within six months following the close of each Fiscal Year, the City will
cause the books and accounts of the System to be audited by independent certified public
accountants in accordance with appropriate audit standards. Said audit will be available
for inspection by the registered owners of any of the Bonds.
Section 18. Future Revenue Bonds, Additional Bonds and Subordinate Bonds. The City
reserves the right to issue without limit bonds payable solely and only from the Revenues,which
bonds may have a lien on the Revenues prior to the lien on the Revenues that secures the
Outstanding bonds, provided that upon the issuance of such bonds, the City shall be able to
demonstrate that the requirements of the Act for the issuance of alternate bonds payable from the
Revenues shall have been met on such date for all Outstanding bonds.
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The City also reserves the right to issue Additional Bonds from time to time payable from
the Pledged Revenues, and any such Additional Bonds shall share ratably and equally in the
Pledged Revenues with the Bonds;provided, however, that no Additional Bonds shall be issued
except in accordance with the provisions of the Act as the Act is written at this time.
The City also reserves the right to issue revenue bonds from time to time payable from
the Revenues that are subordinate to the Bonds or Additional Bonds and are payable from the
money remaining in the Surplus Account created hereunder after making required deposits into
the Alternate Bond and Interest Subaccount.
Section 19. Provisions a Contract. The provisions of this Ordinance shall constitute a
contract between the City and the owners of the Outstanding bonds and no changes,additions, or
alterations of any kind shall be made hereto, except as herein provided, so long as there are any
Outstanding bonds.
Section 20. Use of Proceeds. The proceeds derived from the sale of the Bonds shall be
used as follows: Accrued interest shall be credited to the Alternate Bond and Interest Subaccount
and applied to pay first interest due on the Bonds. The remaining funds are hereby appropriated
for the purpose of refunding the Refunded Bonds and hereby ordered deposited with
MidAmerica National Bank, Canton, Illinois, as prior paying agent for the Prior Bonds for the
purpose of paying the principal of the Refunded Bonds upon redemption thereof.
Section 21. Call of the Refunded Bonds. In accordance with the redemption provisions
of the ordinances authorizing the issuance of the Refunded Bonds, the City does hereby make
provision for the payment of and does hereby call (subject only to the delivery of the Bonds) the
Refunded Bonds for redemption on December 1,2015.
Section 22. Non-Arbitrage and Tax-Exemption. The City hereby covenants that it will
not take any action, omit to take any action or permit the taking or omission of any action within
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its control (including, without limitation, making or permitting any use of the proceeds of the
Bonds) if taking, permitting or omitting to take such action would cause any of the Bonds to be
an arbitrage bond or a private activity bond within the meaning of the Internal Revenue Code of
1986, as amended (the "Code"), or would otherwise cause the interest on the Bonds to be
included in the gross income of the recipients thereof for federal income tax purposes. The City
acknowledges that, in the event of an examination by the Internal Revenue Service of the
exemption from Federal income taxation for interest paid on the Bonds, under present rules,the
City is treated as the "taxpayer" in such examination and.agrees that it will respond in a
commercially reasonable manner to any inquiries from the Internal Revenue Service in
connection with such an examination.
The City also agrees and covenants with the purchasers and holders of the Bonds from
time to time Outstanding that, to the extent possible under Illinois law, it will comply with
whatever federal tax law is adopted in the future which applies to the Bonds and affects the tax-
exempt status of the Bonds.
The Corporate Authorities hereby authorize the officials of the City responsible for
issuing the Bonds, the same being the Mayor of the City, the City Manager or the City Clerk or
City Treasurer who receives the taxes of the City, to make such further covenants and
certifications as may be necessary to assure that the use thereof will not cause the Bonds to be
arbitrage bonds and to assure that the interest on the Bonds will be exempt from federal income
taxation. In connection therewith, the City and the Corporate Authorities further agree:
i
(a)through their officers, to make such further specific covenants, representations as shall be
truthful, and assurances as may be necessary or advisable; (b)to consult with counsel approving
the Bonds and to comply with such advice as may be given; (c)to pay to the United States, as
necessary, such sums of money representing required rebates of excess arbitrage profits relating
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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 by their officers,to employ and
pay fiscal agents, financial advisors, attorneys, and other persons to assist the City in such
compliance.
Section 23. Designation of Issue. The Corporate Authorities hereby designates each of
the Bonds as a "qualified tax-exempt obligation" for the purposes and within the meaning of
Section 265(b)(3)of the Code.
Section 24. Registered Form. The City recognizes that Section 149(a) of the Code
requires the Bonds to be issued and to remain in fully registered form in order that interest
thereon is exempt from federal income taxation under laws in force at the time the Bonds are
delivered. In this connection,the City agrees that it will not take any action to permit the Bonds
to be issued in,or converted into,bearer or coupon form.
Section 25. Bond Registrar Covenants. If requested by the Bond Registrar, the Mayor
and City Clerk are authorized to execute the Bond Registrar's standard form of agreement
between the City and the Bond Registrar with respect to the obligations and duties of the Bond
Registrar hereunder. Subject to modification by the express terms of any such agreement, such
duties shall include the following:
(a) to act as bond registrar, authenticating agent,paying agent and transfer agent
as provided herein;
(b) to maintain a list of Bondholders as set forth herein and to furnish such list
to the City upon request, but otherwise to keep such list confidential to the extent
permitted by law;
(c) to cancel and/or destroy Bonds which have been paid at maturity or
submitted for exchange or transfer;
(d) to furnish the City at least annually a certificate with respect to Bonds
cancelled and/or destroyed;and
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(e) to furnish the City at least annually an audit confirmation of Bonds paid,
Outstanding bonds and payments made with respect to interest on the Bonds.
The City Clerk is hereby directed to file a certified copy of this Ordinance with the Bond
Registrar.
Section 26. Record-Keeping Policy and Post-Issuance Compliance Matters. It is
necessary and in the best interest of the City to maintain sufficient records to demonstrate
compliance with its covenants and expectations to ensure the appropriate federal tax status for
the Bonds and other debt obligations of the City,the interest on which is excludable from"gross
income"for federal income tax purposes or which enable the City or the holder to receive federal
tax benefits,including,but not limited to,qualified tax credit bonds and other specified tax credit
bonds (including the Bonds, the "Tax Advantaged Obligations"). Further, it is necessary and in
the best interest of the City that (i)the Corporate Authorities adopt policies with respect to
record-keeping and post issuance compliance with the City's covenants related to its Tax
Advantaged Obligations and(ii)the Compliance Officer(as hereinafter defined)at least annually
review the City's Contracts (as hereinafter defined) to determine whether the Tax Advantaged
Obligations comply with the federal tax requirements applicable to each issue of the Tax
Advantaged Obligations. The Corporate Authorities and the City hereby adopt the following
Record-Keeping Policy:
(a) Compliance Officer Is Responsible for Records. The Treasurer of the City
(the "Compliance Officer") is hereby designated as the keeper of all records of the City
with respect to each issue of the Tax Advantaged Obligations, and such officer shall
report to the Board at least annually that he/she has all of the required records in his/her
possession,or is taking appropriate action to obtain or recover such records.
(b) Closing Transcripts. For each issue of Tax,Advantaged Obligations, the
Compliance Officer shall receive, and shall keep and maintain, a true, correct and
complete counterpart of each and every document and agreement delivered in connection
with the issuance of the Tax Advantaged Obligations, including without limitation(i)the
proceedings of the City authorizing the Tax Advantaged Obligations, (ii)any offering
document with respect to the.offer and sale of the Tax Advantaged Obligations, (iii)any
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legal opinions with respect to the Tax Advantaged Obligations delivered by any lawyers,
and (iv) all written representations of any person delivered in connection with the
issuance and initial sale of the Tax Advantaged Obligations.
(c) Arbitrage Rebate Liability. The Compliance Officer shall review the
agreements of the Village with respect to each issue of Tax Advantaged Obligations and
shall prepare a report for the Board stating whether or not the City has any rebate liability
to the United States Treasury,and setting forth any applicable exemptions that each issue
of Tax Advantaged Obligations may have from rebate liability. Such report shall be
updated annually and delivered to the Board.
(d) Recommended Records. The Compliance Officer shall review the records
related to each issue of Tax Advantaged Obligations and shall determine what
requirements the City must meet in order to maintain the tax-exemption of interest paid
on its Tax Advantaged Obligations, its entitlement to direct payments by the United
States Treasury of the applicable percentages of each interest payment due and owing on
its Tax Advantaged Obligations, and applicable tax credits or other tax benefits arising
from its Tax Advantaged Obligations. The Compliance Officer shall then prepare a list
of the contracts,requisitions, invoices, receipts and other information that may be needed
in order to establish that the interest paid on the Tax Advantaged Obligations is entitled to
be excluded from"gross income"for federal income tax purposes,that the City is entitled
to receive from the United States Treasury direct payments of the applicable percentages
of interest payments coming due and owing on its Tax Advantaged Obligations, and the
entitlement of holders of any Tax Advantaged Obligations to any tax credits or other tax
benefits, respectively. Notwithstanding any other policy of the City, such retained
records shall be kept for as long as the Tax Advantaged Obligations relating to such
records (and any obligations issued to refund the Tax Advantaged Obligations) are
outstanding,plus three years,and shall at least include:
(i) complete copies of the transcripts delivered when any issue of Tax
Advantaged Obligations is initially issued and sold;
(ii) copies of account statements showing the disbursements of all Tax
Advantaged Obligation proceeds for their intended purposes, and records showing
the assets and other property financed by such disbursements;
(iii) copies of account statements showing all investment activity of any
and all accounts in which the proceeds of any issue of Tax Advantaged
Obligations has been held or in which funds to be used for the payment of
principal of or interest on any Tax Advantaged Obligations has been held, or
which has provided security to the holders or credit enhancers of any Tax
Advantaged Obligations;
(iv) copies of all bid requests and bid responses used in the acquisition of
any special investments used for the proceeds of any issue of Tax Advantaged
Obligations,including any swaps, swaptions,or other financial derivatives entered
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into in order to establish that such instruments were purchased at fair market
value;
(v) copies of any subscriptions to the United States Treasury for the
purchase of State and Local Government Series(SLGS)obligations;
(vi) any calculations of liability for arbitrage rebate that is or may
become due with respect to any issue of Tax Advantaged Obligations, and any
calculations prepared to show that no arbitrage rebate is due, together, if
applicable, with account statements or cancelled checks showing the payment of
any rebate amounts to the United States Treasury together with any applicable IRS
Form 8038-T;and
(vii) copies of all contracts and agreements of the City, including any
leases (the "Contracts"), with respect to the use of any property owned by the
City and acquired, constructed or otherwise financed or refinanced with the
proceeds of the Tax Advantaged Obligations effective at any time when such Tax
Advantaged Obligations are, will or have been outstanding. Copies of contracts
covering no more than 50 days of use and contracts related to City employees
need not be retained.
(e) IRS Examinations or Inquiries. In the event the IRS commences an
examination of any issue of Tax Advantaged Obligations or requests a response to a
compliance check, questionnaire or other inquiry, the Compliance Officer shall inform
the Corporate Authorities of such event, and is authorized to respond to inquiries of the
IRS, and to hire outside, independent professional counsel to assist in the response to the
examination or inquiry.
(f) Annual Review. The Compliance Officer shall conduct an annual review of
the Contracts and other records to determine for each issue of Tax Advantaged
Obligations then outstanding whether each such issue complies with the federal tax
requirements applicable to such issue, including restrictions on private business use,
private payments and private loans. The Compliance Officer is expressly authorized,
without further official action of the Corporate Authorities, to hire outside, independent
professional counsel to assist in such review. To the extent that any violations or
potential violations of federal tax requirements are discovered incidental to such review,
the Compliance Officer may make recommendations or take such actions as the
Compliance Officer shall reasonably deem necessary to assure the timely correction of
such violations or potential violations through remedial actions described in the United
States Treasury Regulations, or the Tax Exempt Bonds Voluntary Closing Agreement
Program described in Treasury Notice 2008-31 or similar program instituted by the IRS.
(g) Training. The Compliance Officer shall undertake to maintain reasonable
levels of knowledge concerning the rules related to tax-exempt bonds (and build America
bonds and tax credit bonds to the extent the City has outstanding build America bonds or
tax-credit bonds) so that such officer may fulfill the duties described in this Section. The
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Compliance Officer may consult with counsel, attend conferences and presentations of
trade groups,read materials posted on various web sites, including the web site of the Tax
Exempt Bond function of the IRS, and use other means to maintain such .knowledge.
Recognizing that the Compliance Officer may not be fully knowledgeable in this area,the
Compliance Officer may consult with outside counsel, consultants and experts to assist
him or her in exercising his or her duties hereunder. The Compliance Officer will
endeavor to make sure that the City's staff is aware of the need for continuing
compliance. The Compliance Officer will provide copies of this Ordinance and the Tax
Exemption Certificate and Agreement or other applicable tax documents for each series
of Tax Advantaged Obligations then currently outstanding (the "Tax Agreements") to
staff members who may be responsible for taking actions described in such documents.
The Compliance Officer should assist in the education of any new Compliance Officer
and the transition of the duties under these procedures. The Compliance Officer will
review this Ordinance and each of the Tax Agreements periodically to determine if there
are portions that need further explanation and, if so, will attempt to obtain such
explanation from counsel or from other experts,consultants or staff.
(h) Amendment and Waiver. The procedures described in this Section are only
for the benefit of the City. No other person (including an owner of a Tax Advantaged
Obligation) may rely on the procedures included in this Section. The City may amend
this Section and any provision of this Section may be waived, without the consent of the
holders of any Tax Advantaged Obligations and as authorized by passage of an ordinance
by the Corporate Authorities. Additional procedures may be required for Tax
Advantaged Obligations the proceeds of which are used for purposes other than capital
governmentally owned projects or refundings of such, including tax increment financing
bonds, bonds financing output facilities, bonds financing working capital, or private
activity bonds. The City also recognizes that these procedures may need to be revised in
the event the City enters into any derivative products with respect to its Tax Advantaged
Obligations.
Section 27. Defeasance. Any of the Bonds which are no longer Outstanding bonds as
defined in this Ordinance shall cease to have any lien on or right to receive or be paid from
Pledged Revenues and shall no longer have the benefits of any covenant for the registered owners
of Outstanding bonds as set forth herein as such relates to lien and security of the Bonds in the
Pledged Revenues.
Section 28. Severability. If any section, paragraph, clause or provision of this
Ordinance shall be held invalid, the invalidity of such section, paragraph, clause or provision
shall not affect any of the other provisions of this Ordinance.
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Section 29. Repealer. All ordinances, resolutions or orders, or parts thereof, in conflict
with the provisions of this Ordinance are to the extent of such conflict hereby repealed.
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ADOPTED on the 15th day of September,2015.
AYE: Ryan Mayhew,Tad Putrich,Gerald Ellis,Justin Nelson
and Angela Hale.
NAY:
ABSENT: Jim Nelson,Craig West and John Lovell
Approved the 15th day of September,2015
RECORDED in the City Records on the 15th day of September,2015.
A
iClerk
[SEAL]
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Alderman Justin Nelson moved and Alderman Tad Putrich seconded the motion that said
ordinance as presented be adopted.
After a full and complete discussion thereof,including 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, the Mayor directed that the roll be called for a vote upon the motion to adopt
the ordinance.
Upon the roll being called,the following Aldermen voted
AYE: Ryan Mayhew,Tad Putrich,Gerald Ellis,Justin Nelson
and Angela Hale.
NAY:
ABSENT: Jim Nelson,Craig West and John Lovell
Whereupon the Mayor declared the motion carried and the ordinance adopted, and
henceforth did approve and sign the same in open meeting and did direct the City Clerk to record
the same in full in the records of the City Council of the City.
Other business not pertinent to the adoption of said ordinance was duly transacted at said
meeting.
Upon motion duly made and seconded,the meeting was adjourned.
_ 1
STATE OF ILLINOIS )
SS
COUNTY OF FULTON )
CERTIFICATION OF ORDINANCE AND MINUTES
I, the undersigned, do hereby certify that I am the duly qualified and acting City Clerk of
the City of Canton, Fulton County, Illinois (the "City"), and as such officer I am the keeper of
the books, records, files, and journal of proceedings of the City and of the City Council (the
"Corporate Authorities")thereof.
I do further certify that the foregoing constitutes a full,true and complete transcript of the
minutes of the legally convened meeting of the Corporate Authorities held on the 15th day of
September, 2015, insofar as same relates to the adoption of an ordinance numbered YQQ and
entitled:
AN ORDINANCE providing for the issue of $3,325,000 General
Obligation Refunding Bonds (Alternate Revenue Source), Series
2015, of the City of Canton, Fulton County, Illinois, for the
purpose of refunding certain outstanding bonds of the City and for
the levy of a direct annual tax sufficient to pay the principal and
interest on said bonds and authorizing the sale of said bonds to the
purchaser thereof
a true, correct and complete copy of which said ordinance as adopted at said meeting appears in
the foregoing transcript of the minutes of said meeting.
I do further certify that the deliberations of the Corporate Authorities on the adoption of
said ordinance were taken openly; that the vote on the adoption of said ordinance was taken
openly; that said meeting was held at a specified time and place convenient to the public; that
notice of said meeting was duly given to all of the news media requesting such notice of said
meeting'was duly given to all of the news media requesting such notice; that an agenda for said
meeting was posted at the location where said meeting was held and at the principal office of the
Corporate Authorities at least 96 hours in advance of the holding of said meeting, that at least
one copy of said agenda was continuously available for public review during the entire 96-hour
period preceding said meeting,that a true, correct and complete copy of said agenda as so posted
being attached to this Certificate as Exhibit A, that said meeting was called and held in strict
accordance with the provisions of the Open Meetings Act of the State of Illinois, as amended;
and that the Corporate Authorities have complied with all of the applicable provisions of said Act
and their procedural rules in the adoption of said ordinance.
IN WITNESS WHEREOF, I have hereunto affixed my official signature and the seal of the
City this 15th day of September,2015.
[SEAT) Cl r
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d #k 402/
306 N. MAIN Si., SUITE ]
FIRST P.O. BOX ]]6'
M IDSTATE INC.
BLOOMINGTON,N, II AXI 309-811
TEL: ]09-019�1]II FAX: ]09-OZI-Zlil
INVESTMENT BANKERS
October 13, 2016
Mr. Jeff Fritz
Mayor
City of Canton
2 North Main Street
Canton, Illinois 61520
RE: $3,325,000 G.O.Refunding Bonds(Alternate Revenue Source), Series 2015
of the City of Canton, Fulton County, Illinois
DATED: September 30, 2015
Dear Mr. Fritz:
At the time of the above referenced bond issue by the City, a levy was filed for this issue
with the County Clerk. Currently a 2016 levy of$1,695,952.50 is on file with the County Clerk for
collection in 2017.
For an Alternate Bond issue such as yours, this levy needs to be abated in its entirety prior
to the County Clerk's deadline for such abatement. The City Council will need to initiate and file
the appropriate abatement resolution with the County Clerk prior to this date. We recommend that
you obtain from the County Clerk some form of receipt indicating the levy has been abated to
maintain with the records regarding this issue.
If you have any questions regarding this matter or if I can be further assistance please do
not hesitate to contact me.
Very truly,
FIRST MIDSTATE INCORPORATED
2 QzAO
David W. Pistorius
Senior Vice President
ces
cc: Ms. Diana Pavley-Rock, City Clerk
Mr. James Nelson, Fulton County Clerk