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HomeMy WebLinkAboutOrdinances - O-90-547 - 07/18/1990 - SUPPLEMENTAL ORD ISSUE $3M GO BONDS SERIES 1990puf007/3-5/54253/sigma 7/18/90 - 1320 ORDINANCE NO. 0-90-547 SUPPLEMENTAL ORDINANCE PROVIDING FOR THE ISSUANCE OF $3,000,000 GENERAL OBLIGATION BONDS, SERIES 1990, OF THE CITY OF McHENRY, ILLINOIS BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF McHENRY, ILLINOIS, AS FOLLOWS: Section 1. Findings and Determinationsb It is found and determined that: A. Pursuant to Ordinance No. 0-89-521, adopted by the City Council of the City on December 20, 1989, and entitled: "Or- dinance Authorizing the Issuance of $3,000,000 General Obligation Bonds of the City of McHenry, Illinois, for the Purpose of Financ- ing a New Municipal Building", the City authorized the issuance of $3,000,000 general obligation bonds to be issued as "Alternate Bonds" under the provisions of Section 15 of the Local Government Debt Reform Act (Public Act 85-1419 of the General Assembly of the State of Illinois) for the purpose of financing the construction of a new municipal building for the City (the "Project"). B. The City will proceed with the financing of the Project by the issuance of $3,000,000 principal amount of general obligation bonds of the City (the "1990 Bonds") being the bonds authorized by Ordinance No. 0-89-521. This ordinance supplements Ordinance No. 0-89-521. C. The 1990 Bonds are payable from, and are secured by a pledge of, the City's distributive share of sale and use taxes imposed by the State of Illinois and derived from transactions at places of business located within the boundaries of the City, in- cluding moneys paid by the State in replacement of the City's dis- tributive share of such taxes (the "Pledged Revenues"). The Pledged Revenues constitute a "Revenue Source" within the meaning of Section 15 of the Local Government Debt Reform Act. The Pledged Revenues are determined to be sufficient to provide in each year to the final maturity of the 1990 Bonds, an amount not less than 1.25 times debt service on all (i) alternate bonds (as defined in Section 15 of the Local Government Debt Reform Act) previously issued and payable from the Pledged Revenues and (ii) the 1990 Bonds. D. The determination of the sufficiency of the Pledged Revenues is supported by the most recent audit of the City for the fiscal year ended April 30, 1989, prepared by Karrison, Byrne, Jansey & Trimarco, Ltd., certified public accountants. Section 2. Autborization of Bonds. To meet part of the estimated cost of the Project described in Section 1 of this ordi- nance, including with respect to the 1990 Bonds herein authorized, provision for the payment of costs of issuance of the 1990 Bonds, there is hereby appropriated the sum of $3,000,000. Pursuant to the provisions of the Illinois Municipal Code and the Local Government Debt Reform Act and for the purpose of financing said appropriation, the 1990 Bonds shall be issued and sold in an ag- gregate principal amount of $3,000,000, shall be designated "Gen- eral Obligation Bonds (Alternate Revenue Source), Series 1990 (Municipal Building Project)", and shall be issuable in the denom- inations of $5,000 or any integral multiple thereof. 1990 Bonds shall be numbered consecutively from 1 upwards in order of their -2- issuance and may bear such identifying numbers or letters as shall be useful to facilitate the registration, transfer and exchange of 1990 Bonds. The 1990 Bonds are "Alternate Bonds" as defined or re- ferred to under the Local Government Debt Reform Act and are the $3,000,000 general obligation bonds authorized to be issued pur- suant to Ordinance No. 0-89-521, adopted by the City Council of the City on December 20, 1989. The 1990 Bonds shall mature on December 1 in each year shown in the following table in the respective principal amount set forth opposite each such year and the 1990 Bonds maturing in each such year shall bear interest at the respective rate per annum set forth opposite such year: Principal Rate of Principal Rate of Year Amount Interest Year Amount Interest 1991 $100,000 8.00% 1999 $200,000 6.50% 1992 125,000 8.00 2000 200,000 6.50 1993 125,000 8.00 2001 250,000 6.50 1994 150,000 8.00 2002 250,000 6.50 1995 150,000 8.00 2003 300,000 6.50 1996 175,000 8.00 2004 300,000 6.50 1997 175,000 7.20 2005 300,000 6.50 1998 200,000 6.50 The 1990 Bonds maturing on or after December 1, 2001 shall be subject to redemption prior to maturity at the option of the City and upon notice as herein provided, in inverse order of maturity and by lot within a single maturity, on December 1, 2000, and on any interest payment date thereafter, at a redemption price equal to the principal amount thereof to be redeemed. -3- Section 3. General Terms of Bonds. Each 1990 Bond shall be dated as of the interest payment date next preceding the date of issuance thereof, except that (a) if such date of issuance shall be prior to the first interest payment date, said 1990 Bond shall be dated as of August 1, 1990, (b) if such date of issuance shall be an interest payment date, said 1990 Bond shall be dated as of such interest payment date, or (c) if interest due on said 1990 Bond shall not have been paid in full, then notwithstanding any of the foregoing provisions, said 1990 Bond shall be dated as of the date to which interest has been paid in full on said 1990 Bond. Each 1990 Bond shall bear interest from its date, com- puted on the basis of a 360 day year consisting of twelve 30 day months and payable in lawful money of the United States of America on December 1, 1990 and semiannually thereafter on each June 1 and December 1 at the rates per annum herein determined. The princi- pal of the 1990 Bonds shall be payable in lawful money of the United States of America upon presentation and surrender thereof at the principal corporate trust office of LaSalle National Trust, N.A., in the City of Chicago, Illinois, which is hereby appointed as bond registrar and paying agent for the 1990 Bonds. Interest on the 1990 Bonds shall be payable on each interest payment date to the registered owners of record thereof appearing on the regis- tration books maintained by the City for such purpose at the prin- cipal corporate trust office of the bond registrar, as of the close of business on the 15th day of the calendar month next pre- -4- ceding the applicable interest payment date. Interest on the 1990 Bonds shall be paid by check or draft mailed to such registered owners at their addresses appearing on the registration books. Section 4. Redemption Provisions. In the event of the redemption of less than all the 1990 Bonds of like maturity, the aggregate principal amount thereof to be redeemed shall be $5,000 or an integral multiple thereof and the bond registrar shall assign to each 1990 Bond of such maturity a distinctive number for each $5,000 principal amount of such 1990 Bond and shall select by lot from the numbers so assigned as many numbers as, at $5,000 for each number, shall equal the principal amount of such 1990 Bonds to be redeemed. The 1990 Bonds to be redeemed shall be the 1990 Bonds to which were assigned numbers so selected; provided that only so much of the principal amount of each 1990 Bond shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. Notice of the redemption of 1990 Bonds shall be mailed not less than 30 days nor more than 60 days prior to the date fixed for such redemption to the registered owners of 1990 Bonds to be redeemed at their last addresses appearing on said registra- tion books. The 1990 Bonds or portions thereof specified in said notice shall become due and payable at the applicable redemption price on the redemption date therein designated, and if, on the redemption date, moneys for payment of the redemption price of all the 1990 Bonds or portions thereof to be redeemed, together with interest to the redemption date, shall be available for such pay- ment on said date, and if notice of redemption shall have been -5- mailed as aforesaid (and notwithstanding any defect therein or the lack of actual receipt thereof by any registered owner) then from and after the redemption date interest on such 1990 Bonds or por- tions thereof shall cease to accrue and become payable. If there shall be drawn for redemption less than all of a 1990 Bond, the City shall execute and the bond registrar shall authenticate and deliver, upon the surrender of such 1990 Bond, without charge to the owner thereof, for the unredeemed balance of the 1990 Bond so surrendered, 1990 Bonds of like maturity and of the denomination of $5,000 or any integral multiple thereof. The bond registrar shall not be required to transfer or exchange any 1990 Bond after notice of the redemption of all or a portion thereof has been mailed. The bond registrar shall not be required to transfer or exchange any 1990 Bond during a period of 15 days next preceding the mailing of a notice of redemption which could designate for redemption all or a portion of such 1990 Bond. Section 5. Sale and Delivery. The sale of the 1990 Bonds to Griffin, Kubik, Stephens & Thompson, Inc., as purchaser, at a price of $3,000,000 and accrued interest from their date to the date of delivery and payment therefor, is hereby ratified and confirmed. The official statement prepared with respect to the 1990 Bonds is hereby approved. The Mayor, City Clerk and other officials of the City are hereby authorized and directed to do and perform, or cause to be done or performed for or on behalf of the City each and every thing necessary for the issuance of the 1990 Bonds, including the proper execution and delivery of the 1990 Bonds and the official statement upon payment of the full purchase price of the 1990 Bonds. Section 6. Execution and Authentication. Each 1990 Bond shall be executed in the name of the City by the manual or authorized facsimile signature of its Mayor and the corporate seal of the City, or a facsimile thereof, shall be thereunto affixed or otherwise reproduced thereon and attested by the manual or autho- rized facsimile signature of its City Clerk. In case any officer whose signature, or a facsimile of whose signature, shall appear on any 1990 Bond shall cease to hold such office before the issuance of the 1990 Bond, such 1990 Bond shall nevertheless be valid and sufficient for all purposes, the same as if the person whose signature, or a facsimile thereof, appears on such 1990 Bond had not ceased to hold such office. Any 1990 Bond may be signed, sealed or attested on behalf of the City by any person who, on the date of such act, shall hold the proper office, notwithstanding that at the date of such 1990 Bond such person may not have held such office. No recourse shall be had for the payment of any 1990 Bonds against any officer who executes the 1990 Bonds. Each 1990 Bond shall bear thereon a certificate of authentication executed manually by the bond registrar. No 1990 Bond shall be entitled to any right or benefit under this ordi- nance or shall be valid or obligatory of any purpose until such certificate of authentication shall have been duly executed by the bond registrar. -7- Section 7. Transfer, Exchange and Registry. The 1990 Bonds shall be negotiable, subject to the provisions for registra- tion of transfer contained herein. Each 1990 Bond shall be trans- ferable only upon the registration books maintained by the City for that purpose at the principal corporate trust office of the bond registrar, by the registered owner thereof in person or by his attorney duly authorized in writing, upon surrender thereof together with a written instrument of transfer satisfactory to the bond registrar and duly executed by the registered owner or his duly authorized attorney. Upon the surrender for transfer of any such 1990 Bond, the City shall execute and the bond registrar shall authenticate and deliver a new 1990 Bond or 1990 Bonds reg- istered in the name of the transferee, of the same aggregate prin- cipal amount, maturity and interest rate as the surrendered 1990 Bond. 1990 Bonds, upon surrender thereof at the principal cor- porate trust office of the bond registrar, with a written instru- ment satisfactory to the bond registrar, duly executed by the reg- istered owner or his attorney duly authorized in writing, may be exchanged for an equal aggregate principal amount of 1990 Bonds of the same maturity and interest rate and of the denominations of $5,000 or any integral multiple thereof. For every such exchange or registration of transfer of 1990 Bonds, the City or the bond registrar may make a charge suf- ficient to reimburse it for any tax, fee or other governmental charge required to be paid with respect to such exchange or trans- fer, which sum or sums shall be paid by the person requesting such exchange or transfer as a condition precedent to the exercise of -8- the privilege of making such exchange or transfer. No other charge shall be made for the privilege of making such transfer or exchange. The provisions of the Illinois Bond Replacement Act shall govern the replacement of lost, destroyed or defaced 1990 Bonds. The City and the bond registrar may deem and treat the person in whose name any 1990 Bond shall be registered upon the registration books as the absolute owner of such 1990 Bond, whether such 1990 Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of or inter- est thereon and for all other purposes whatsoever, and all such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liabili- ty upon such 1990 Bond to the extent of the sum or sums so paid, and neither the City nor the bond registrar shall be affected by any notice to the contrary. Section 8. Bond Registrar. The City covenants that it shall at all times retain a bond registrar with respect to the 1990 Bonds, that it will maintain at the designated office of such bond registrar a place where 1990 Bonds may be presented for pay- ment and registration of transfer or exchange and that it shall require that the bond registrar maintain proper registration books and perform the other duties and obligations imposed upon it by this ordinance in a manner consistent with the standards, customs and practices of the municipal securities business. The bond registrar shall signify its acceptance of the duties and obligations imposed upon it by this ordinance by exe- cuting the certificate of authentication on any 1990 Bond, and by such execution the bond registrar shall be deemed to have certi- fied to the City that it has all requisite power to accept, and has accepted such duties and obligations not only with respect to the 1990 Bond so authenticated but with respect to all the 1990 Bonds. The bond registrar is the agent of the City and shall not be liable in connection with the performance of its duties except for its own negligence or default. The bond registrar shall, how- ever, be responsible for any representation in its certificate of authentication on the 1990 Bonds. The City may remove the bond registrar at any time. In case at any time the bond registrar shall resign or shall be re- moved or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator of the bond registrar, or of its property, shall be appointed, or if any public officer shall take charge or control of the bond registrar or of its property or affairs, the City covenants and agrees that it will thereupon appoint a successor bond registrar. The City shall mail notice of any such appointment made by it to each registered owner of 1990 Bonds within twenty days after such appointment. Any bond registrar appointed under the provisions of this Section shall be a bank, trust company or national banking association maintaining its principal corporate trust office in the State of Illinois, the City of St. Louis, Missouri or the Borough of Manhattan, City and State of New York. -10- Section 9. General Obligations. The full faith and credit of the City are hereby irrevocably pledged to the punctual payment of the principal of and interest on the 1990 Bonds. The 1990 Bonds shall be direct and general obligations of the City, and the City shall be obligated to levy ad valorem taxes upon all the taxable property in the City for the payment of the 1990 Bonds and the interest thereon, without limitation as to rate or amount. Section 10. Pledge of Revenue Source. The Pledged Revenues are pledged to the payment of the 1990 Bonds. The City Council, on behalf of the -City, to the extent it is empowered to do so, covenants to provide for, collect and apply such Pledged Revenues to the payment of the 1990 Bonds and the provision of not less than an additional .25 times the annual debt service on the 1990 Bonds. The pledge of Pledged Revenues herein provided for the payment of the 1990 Bonds may be made junior and subordinate to any pledge of Pledged Revenues hereafter made for the benefit and security of the owners of bonds of the City payable from, or issued with respect to, such Pledged Revenues. The City may issue additional bonds payable from, and secured by a lien on, the Pledged Revenues, on a parity with the 1990 Bonds. The City shall apply the Pledged Revenues in an amount that shall be sufficient to provide for the timely payment of the principal of and interest on the 1990 Bonds as the same shall be- come due and payable. -11- Section 11. Form of Bonds. The 1990 Bonds shall be issued as fully registered bonds and shall be in substantially the following form, the blanks to be appropriately completed when the 1990 Bonds are printed: United States of America State of Illinois County of McHenry CITY OF McHENRY GENERAL OBLIGATION BOND (ALTERNATE REVENUE SOURCE), SERIES 1990 (MUNICIPAL BUILDING PROJECT) INTEREST RATE MATURITY DATE DATED DATE August 1, 1990 The CITY OF McHENRY, a municipal corporation of the State of Illinois situate in the County of McHenry, acknowledges itself indebted and for value received hereby promises to pay to the registered owner hereof, or registered assigns, the principal sum of Dollars on the maturity date specified above, and to pay interest on such principal sum from the date hereof at the interest rate per annum specified above, computed on the basis of a 360 day year consisting of twelve 30 day months and payable in lawful money of the United States of America on December 1, 1990 and semiannually thereafter on June 1 and December 1 in each year until the princi- pal sum shall have been paid, by check or draft mailed to the reg- istered owner of record hereof as of the 15th day of the calendar month next preceding such interest payment date, at the address of such owner appearing on the registration books maintained by the -12- City for such purpose at the principal corporate trust office of LaSalle National Trust, N.A., in the City of Chicago, Illinois, as bond registrar or its successor (the "Bond Registrar"). This bond, as to principal when due, will be payable in lawful money of the United States of America upon presentation and surrender of this bond at the principal corporate trust office of the Bond Reg- istrar. The full faith and credit of the City are irrevocably pledged for the punctual payment of the principal of and interest on this bond according to its terms. This bond is one of a series of bonds issued in the ag- gregate principal amount of $3,000,000, which are all of like tenor except as to maturity, option of redemption and rate of in- terest and which are authorized and issued under and pursuant to the Illinois Municipal Code and the Local Government Debt Reform Act, constituting Public Act 85-1419 of the General Assembly of the State of Illinois, and under and in accordance with an ordi- nance adopted by the City Council of the City on December 20, 1989 and entitled: "Ordinance Authorizing the Issuance of $3,000,000 General Obligation Bonds of the City of McHenry, Illinois, for the Purpose of Financing a New Municipal Building", as supplemented by an ordinance adopted by said City Council on July 18, 1990 and en- titled: "Supplemental Ordinance Providing for the Issuance of $3,000,000 General Obligation Bonds, Series 1990, of the City of McHenry, Illinois" (the "Bond Ordinance"). This bond is an "alternate bond" issued pursuant to Sec- tion 15 of the Local Government Debt Reform Act and is also secured by a pledge of the City's distributive share of sale and -13- use taxes imposed by the State of Illinois to the extent, and in the manner, provided in the Local Government Debt Reform Act and the Bond Ordinance. The bonds of such series maturing on or after December 1, 2001 are subject to redemption prior to maturity at the option of the City and upon notice as herein provided, in inverse order of maturity and by lot within a single maturity, on December 1, 2000 and on any interest payment date thereafter, at a redemption price equal to the principal amount thereof to be redeemed. Notice of the redemption of bonds will be mailed not less than 30 days nor more than 60 days prior to the date fixed for such redemption to the registered owners of bonds to be re- deemed at their last addresses appearing on such registration books. The bonds or portions thereof specified in said notice shall become due and payable at the applicable redemption price on the redemption date therein designated, and if, on the redemption date, moneys for payment of the redemption price of all the bonds or portions thereof to be redeemed, together with interest to the redemption date, shall be available for such payment on said date, and if notice of redemption shall have been mailed as aforesaid (and notwithstanding any defect therein or the lack of actual re- ceipt thereof by any registered owner) then from and after the re- demption date interest on such bonds or portions thereof shall cease to accrue and become payable. This bond is transferable only upon such registration books by the registered owner hereof in person, or by his attorney duly authorized in writing, upon surrender hereof at the principal -14- corporate trust office of the Bond Registrar together with a written instrument of transfer satisfactory to the Bond Registrar duly executed by the registered owner or by his duly authorized attorney, and thereupon a new registered bond or bonds, in the authorized denominations of $5,000 or any integral multiple there- of and of the same aggregate principal amount, maturity and in- terest rate as this bond shall be issued to the transferee in ex- change therefor. In like manner, this bond may be exchanged for an equal aggregate principal amount of bonds of the same maturity and interest rate and of any of such authorized denominations. The City or the Bond Registrar may make a charge sufficient to re- imburse it for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange of this bond. No other charge shall be made for the privilege of making such transfer or exchange. The City and the Bond Registrar may treat and consider the person in whose name this bond is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal and interest due hereon and for all other purposes whatsoever. This bond shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been duly executed by the Bond Registrar. It is hereby certified, recited and declared that all acts, conditions and things required to be done, exist and be per- formed precedent to and in the issuance of this bond in order to make it a legal, valid and binding obligation of the City have been done, exist and have been performed in regular and due time, -15- form and manner as required by law, and that the series of bonds of which this bond is one, together with all other indebtedness of the City is within every debt or other limit prescribed by law. IN WITNESS WHEREOF, the City of McHenry has caused this bond to be executed in its name and on its behalf by the manual or facsimile signature of its Mayor, and its corporate seal, or a facsimile thereof, to be hereunto affixed or otherwise reproduced hereon and attested by the manual or facsimile signature of its City Clerk. Dated: CERTIFICATE OF AUTHENTICATION This bond is one of the General Obligation Bonds (Alternate Revenue Source), Series 1990 (Municipal Building Project) described in the within men- tioned Bond Ordinance. LASALLE NATIONAL TRUST, N.A., as Bond Registrar By Authorized Officer CITY OF McHENRY Mayor -16- Attest: City Clerk ASSIGNMENT For value received the undersigned sells, assigns and transfers unto the within bond and hereby irrevocably constitutes and appoints attorney to transfer the said bond on the books kept for registration thereof, with full power of substitution in the premises. Dated Signature Guarantee: Section 12. Levy and Extension of Taxes. For the pur- pose of providing the money required to pay the interest on the 1990 Bonds when and as the same falls due and to pay and discharge the principal thereof as the same shall mature, there is hereby levied upon all the taxable property in the City, in each year while any of the 1990 Bonds shall be outstanding, a direct annual tax sufficient for that purpose in addition to all other taxes, as follows: -17- Tax Levy Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 A Tax Sufficient to Produce $478,433.33 320,600.00 310,600.00 324,600.00 312,600.00 324,600.00 311,300.00 323,500.00 310,500.00 297,500.00 332,875.00 316,625.00 348,750.00 329,250.00 309,750.00 Interest or principal coming due at any time when there shall be insufficient funds on hand to pay the same shall be paid promptly when due from current funds on hand in advance of the collection of the taxes herein levied; and when said taxes shall have been collected, reimbursement shall be made to the said funds in the amounts thus advanced. As soon as this ordinance becomes effective, a copy thereof certified by the City Clerk, which certificate shall re- cite that this ordinance has been duly adopted, shall be filed with the County Clerk of McHenry County, Illinois, who is hereby directed to ascertain the rate per cent required to produce the aggregate tax hereinbefore provided to be levied in the years 1990 to 2004, inclusive, and to 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 in said years such annual tax shall be levied and collected in like manner as taxes for general corporate purposes for said years are levied and collected and, when collected, such taxes shall be used -18- solely for the purpose of paying the principal of and interest on the 1990 Bonds herein authorized as the same become due and pay- able. The annual taxes levied pursuant to this Section may be abated annually to the extent that (1) moneys for the payment of the principal of and interest on the 1990 Bonds otherwise payable from such annual levy are on deposit in the 1990 Debt Service Fund established by Section 12 of this ordinance, or (2) upon receipt by the City Council of a certificate of the finance officer of the City stating that, in the opinion of said finance officer, the amount of Pledged Revenues estimated to be received in the current fiscal year and the next fiscal year will be sufficient to (a) provide for the timely payment of the principal of and interest on the 1990 Bonds to become due in such fiscal years and (b) meet the 1.25 times debt service coverage requirement of Section 15 of the Local Government Debt Reform Act with respect to the 1990 Bonds and all other alternate bonds payable from the Pledged Revenues during each of such fiscal years. Section 13. Debt Service Fund. Moneys derived from taxes herein levied are appropriated and set aside for the sole purpose of paying principal of and interest on the 1990 Bonds when and as the same come due. All of such moneys, and all other moneys (including Pledged Revenues) to be used for the payment of the principal of and interest on the 1990 Bonds, shall be deposit- ed in the 111990 Debt Service Fund" which is hereby established as a special fund of the City and shall be administered as a bona -19- fide debt service fund under the Internal Revenue Code of 1986. All accrued interest received upon the issuance of the 1990 Bonds shall be deposited in the 1990 Debt Service Fund. Section 14. Bond Proceeds Fund. All of the proceeds of sale of the 1990 Bonds (exclusive of accrued interest) shall be deposited in the 111990 Bond Proceeds Fund" which is hereby estab- lished as a special fund of the City. Moneys in the 1990 Bond Proceeds Fund shall be used for the purposes specified in Section 2 of this ordinance and for the payment of costs of issuance of the 1990 Bonds, but may hereafter be reappropriated and used for other purposes. Before any such reappropriation shall be made, there shall be filed with the City Clerk an opinion of a nation- ally recognized bond counsel to the effect that such reappropria- tion is permitted under Illinois law and will not adversely affect the exemption from federal income taxation of interest on the 1990 Bonds. Section 15. Rebate Fund. The City hereby establishes a special fund, designated as the 111990 Rebate Fund." In the event that the City shall invest moneys in the 1990 Bond Proceeds Fund or the 1990 Debt Service Fund in any investments which generate income that must be rebated or paid to the United States of America pursuant to Section 148(f) of the Internal Revenue Code of 1986, such income shall be deposited in the 1990 Rebate Fund. Moneys in the 1990 Rebate Fund shall be applied to pay such sums as are required to be paid to the United States of America pur- suant to Section 148(f) of the Internal Revenue Code of 1986 and are hereby appropriated and set aside for such purpose. Moneys in -20- the 1990 Rebate Fund may be reappropriated and used for other pur- poses. No such reappropriation and use shall relieve the City of its obligation to make payments to the United States of America as required by Section 148(f) of the Internal Revenue Code of 1986. Section 16. Investment Regulations. No investment shall be made of any moneys in the 1990 Debt Service Fund, the 1990 Bond Proceeds Fund or the 1990 Rebate Fund except in accor- dance with the tax covenants set forth in Section 17 of this ordi- nance. Except as required by Section 15 of this ordinance, all income derived from such investments in respect of moneys or securities in any Fund shall be credited in each case to the Fund in which such moneys or securities are held. Any moneys in any Fund that are subject to investment yield restrictions may be invested in United States Treasury Securities, State and Local Government Series, pursuant to the regulations of the United States Treasury Department, Bureau of Public Debt. The City Treasurer and agents designated by him are hereby authorized to submit, on behalf of the City, subscriptions for such United States Treasury Securities and to request redemp- tion of such United States Treasury Securities. Section 17. Tax Covenants. The City shall not take, or omit to take, any action lawful and within its power to take, which action or omission would cause interest on any 1990 Bond to become subject to federal income taxes in addition to federal in- come taxes to which interest on such 1990 Bond is subject on the date of original issuance thereof. -21- The City shall not permit any of the proceeds of the 1990 Bonds, or any facilities financed with such proceeds, to be used in any manner that would cause any 1990 Bond to constitute a "private activity bond" within the meaning of Section 141 of the Internal Revenue Code of 1986. The City shall not permit any of the proceeds of the 1990 Bonds or other moneys to be invested in any manner that would cause any 1990 Bond to constitute an "arbitrage bond" within the meaning of Section 148 of the Internal Revenue Code of 1986 or a "hedge bond" within the meaning of Section 149(g) of said Code. The City shall comply with the provisions of Section 148(f) of the Internal Revenue Code of 1986 relating to the rebate of certain investment earnings at periodic intervals to the United States of America; provided, however, that compliance with such provisions shall not be required to the extent that there shall have been filed with the City Clerk an opinion of nationally recognized bond counsel to the effect that such compliance is not necessary to preserve the exemption from federal income taxes of interest on the 1990 Bonds. Section 18. Bank Qualified Bonds. The City hereby des- ignates the 1990 Bonds as "qualified tax-exempt obligations" as defined in Section 265(b)(3)(B) of the Internal Revenue Code of 1986. The City represents that the reasonably anticipated amount of tax-exempt obligations that will be issued by or on behalf of the City and all subordinate entities of the City during 1990 does not exceed $10,000,000. The City covenants that it will not des- ignate and issue more than $10,000,000 aggregate principal amount -22- of tax-exempt obligations in 1990. For purposes of the two pre- ceding sentences, the term "tax-exempt obligations" includes "qualified 501(c)(3) bonds" (as defined in the Section 145 of the Internal Revenue Code of 1986) but does not include other "private activity bonds" (as defined in Section 141 of the Internal Revenue Code of 1986). section 19. Ordinance to Constitute a Contract. The provisions of this ordinance shall constitute a contract between the City and the registered owners of the 1990 Bonds. Any pledge made in this ordinance with respect to the 1990 Bonds and the pro- visions, covenants and agreements herein set forth to be performed by or on behalf of the City shall be for the equal benefit, pro- tection and security of the owners of any and all of the 1990 Bonds. All of the 1990 Bonds, regardless of the time or times of their issuance, shall be of equal rank without preference, priori- ty or distinction of any of the 1990 Bonds over any other thereof except as expressly provided in or pursuant to this ordinance. Ordinance No. 0-89-521 of the City and this ordinance shall con- stitute full authority for the issuance of the 1990 Bonds and to the extent that the provisions of Ordinance No. 0-89-521, as sup- plemented by this ordinance, conflict with the provisions of any other ordinance or resolution of the City, the provisions of Ordi- nance No. 0-89-521, as so supplemented shall control. If any sec- tion, paragraph or provision of this ordinance shall be held to be invalid or unenforceable for any reason, the invalidity or unen- forceability of such section, paragraph or provision shall not affect any of the remaining provisions of this ordinance. -23- Provision for the payment of any 1990 Bond may be made in accordance with the provisions of Illinois Revised Statutes Chapter 85, Paragraph 4401 to 4403; and thereafter said 1990 Bond shall no longer be deemed to be outstanding for purposes of this ordinance or Section 15 of the Local Government Debt Reform Act. Section 20. Publication. The City Clerk is hereby authorized and directed to publish this ordinance in pamphlet form and to file copies thereof for public inspection in her office. Section 21. Effective Date. This ordinance shall be- come effective in the manner provided by law. Adopted this 18th day of July, 1990 by roll call vote as follows: Ayes: William Bolger, Antoinette Donahue, Gary Lieder, Frank McClatchey, Randy Patterson, Cecilia Serritella, Raymond Smith, Michael Teta Nays: None (SEAL) Attest: , Approved: July 18 1990 Mayor -24-