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HomeMy WebLinkAboutOrdinances - O-93-646 - 12/15/1993 - AUTHORIZE ISSUE $5.3M W/S REV BONDS SERIES 1993ORDINANCE NO. 0-93-646 ORDINANCE AUTHORIZING THE ISSUANCE OF $5,300,000 WATERWORKS AND SEWERAGE REVENUE REFUNDING BONDS, SERIES 1993, OF THE CITY OF McHENRY, ILLINOIS BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF McHENRY, ILLINOIS, AS FOLLOWS: Section 1. Authority, Purpose and Findings. This ordinance is adopted pursuant to the Local Government Debt Reform Act, 30 Illinois Compiled Statutes 350, and Division 4 of Article 8 of the Illinois Municipal Code, 65 Illinois Compiled Statutes 5/8-4, for the purpose of refunding all of the $3,450,000 outstanding principal amount of Waterworks and Sewerage Revenue Bonds, Series 1986A, of the City (the "1986 Bonds") and all of the $2,100,000 outstanding principal amount of Waterworks and Sewerage Revenue Bonds, Series 1988 (the "1988 Bonds") of the City. The 1986 Bonds and the 1988 Bonds (herein collectively called the "Prior Bonds") were issued for the purpose of financing or refinancing capital improvements to the combined waterworks and sewerage system (the "System") owned and operated by the City in accordance with the provisions of Division 139 of Article 11 of the Illinois Municipal Code, 65 Illinois Compiled Statutes 5/11-139. Unless otherwise defined in this ordinance, all defined terms used in this ordinance shall have the meaning ascribed thereto in Ordinance No. 0-86-390, adopted by the City Council of the City on July 30, 1986, as amended (the "1986 Ordinance"). The City Council hereby finds and determines that it is necessary and in the best interests of the City and the users of the System to refund the Prior Bonds; that the System shall continue to be operated as a combined utility; and that the period of usefulness of the System is 40 years from the date of the bonds herein authorized to be sold. Section 2. Refunding Plan. The City determines to refund and defease the Prior Bonds. The City elects to redeem and call for redemption on May 1, 1997, all of the 1986 Bonds maturing in the years 1998 to 2006, inclusive (the "Callable 1986 Bonds") at a redemption price of par. The City elects to redeem and call for redemption on May 1, 1998, all of the 1988 Bonds maturing in the years 1999 to 2004, inclusive (the "Callable 1988 Bonds") at a redemption price of par. The foregoing refunding plan is approved. The Mayor and the other officers of the City are authorized and directed to do, or cause to be done, all things necessary to accomplish (i) the refunding and defeasance of the Prior Bonds and (ii) the redemption of the Callable 1986 Bonds and the Callable 1988 Bonds. Section 3. Authorization of Bonds. Pursuant to Division 4 of Article 8 of the Illinois Municipal Code and the Local Government Debt Reform Act and for the purpose or refunding the Prior Bonds and paying the costs of issuance of bonds herein authorized, waterworks and sewerage revenue bonds of the City are hereby authorized to be issued in the aggregate principal amount of $5,300,000. Section 4. Terms of Bonds. The bonds shall be designated "Waterworks and Sewerage Revenue Refunding Bonds, Series 1993", shall be issuable in the denominations of $5,000 or any integral multiple thereof, and may bear such identifying numbers or letters as shall be useful to facilitate the registration, transfer and exchange of bonds. Unless otherwise determined in the order to authenticate the bonds, each bond delivered upon the original issuance of the bonds shall be dated -2- December 1, 1993. Each bond thereafter issued upon any transfer, exchange or replacement of bonds shall be dated so that no gain or loss of interest shall result from such transfer, exchange or replacement. The bonds shall mature on May 1 in each year shown in the following table in the respective principal amount set forth opposite each such year and the 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 1995 $350,000 5.40% 2001 $500,000 4.20% 1996 375,000 5.50 2002 500,000 4.25 1997 375,000 5.50 2003 550,000 4.25 1998 400,000 5.50 2004 550,000 4.25 1999 450,000 5.50 2005 400,000 3.50 2000 450,000 4.90 2006 400,000 3.50 Each bond shall bear interest from its date, 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 May 1, 1994 and semiannually thereafter on each May 1 and November 1 at the rates per annum herein determined. The principal of the bonds shall be payable in lawful money of the United States of America upon presentation and surrender thereof at the principal corporate trust office of American National Bank and Trust Company of Chicago, in the City of Chicago, Illinois, which is hereby appointed as bond registrar and paying agent for the bonds. Interest on the bonds shall be payable on each interest payment date to the registered owners of record thereof appearing on the registration books maintained by the City for such purpose at the principal corporate trust office of the bond registrar, as of the close of business on the 15th day of the calendar month next preceding the applicable interest payment -3- date. Interest on the bonds shall be paid by check or draft mailed to such registered owners at their addresses appearing on the registration books. The bonds maturing on or after May 1, 2003 shall be subject to redemption prior to maturity at the option of the City and upon notice as herein provided, in such principal amounts and from such maturities as the City shall determine and by lot within a single maturity, on May 1, 2002 and on any date thereafter, at a redemption price equal to the principal amount thereof to be redeemed. In the event of the redemption of less than all the bonds of like maturity, the aggregate principal amount thereof to be redeemed shall be $5,000 or an integral multiple thereof and the bond registrar shall assign to each bond of such maturity a distinctive number for each $5,000 principal amount of such bond and shall select by lot from the numbers so assigned as many numbers as, at $5,000 for each number, shall equal the principal amount of such bonds to be redeemed. The bonds to be redeemed shall be the bonds to which were assigned numbers so selected; provided that only so much of the principal amount of each bond shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. Notice of the redemption of 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 bonds to be redeemed at their last addresses appearing on said 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 -4- shall have been mailed as aforesaid land notwithstanding any defect therein or the lack of actual receipt thereof by any registered owner) then from and after the redemption date interest on such bonds or portions thereof shall cease to accrue and become payable. If there shall be drawn for redemption less than all of a bond, the City shall execute and the bond registrar shall authenticate and deliver, upon the surrender of such bond, without charge to the owner thereof, for the unredeemed balance of the bond so surrendered, 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 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 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 bond. Section 5. Sale and Delivery. The bonds are hereby awarded and sold to Griffin, Kubik, Stephens & Thompson, Inc., as purchaser, at a price of $5,273,500 and accrued interest from their date to the date of their delivery and payment. The official statement prepared with respect to the 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 everything necessary for the issuance of the bonds, including the proper execution and delivery of the bonds and the official statement upon payment of the full purchase price of the bonds. Section 6. Execution and Authentication. Each bond shall be executed in the name of the City by the manual or authorized facsimile signature of its Mayor and the -5- corporate seal of the City, or a facsimile thereof, shall be thereunto affixed or otherwise reproduced thereon and attested by the manual or authorized facsimile signature of its City Clerk. In case any officer whose signature, or a facsimile of whose signature, shall appear on any bond shall cease to hold such office before the issuance of the bond, such bond shall nevertheless be valid and sufficient for all purposes, the same as if the person whose signature, or a facsimile thereof, appears on such bond had not ceased to hold such office. Any bond may be signed, sealed or attested on behalf of the City by any person who, on the date of such act, shall hold the proper office, notwithstanding that at the date of such bond such person may not have held such office. No recourse shall be had for the payment of any bonds against any officer who executes the bonds. Each bond shall bear thereon a certificate of authentication executed manually by the bond registrar. No bond shall be entitled to any right or benefit under this ordinance or shall be valid or obligatory of any purpose until such certificate of authentication shall have been duly executed by the bond registrar. Section 7. Transfer, Exchange and Registry. The bonds shall be negotiable, subject to the provisions for registration of transfer contained herein. Each bond shall be transferable 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 bond, the City shall execute and the bond M registrar shall authenticate and deliver a new bond or bonds registered in the name of the transferee, of the same aggregate principal amount, maturity and interest rate as the surrendered bond. Bonds, upon surrender thereof at the principal corporate trust office of the bond registrar, with a written instrument satisfactory to the bond registrar, duly executed by the registered owner or his attorney duly authorized in writing, may be exchanged for an equal aggregate principal amount of 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 bonds, the City or the bond registrar may make a charge sufficient to reimburse it for any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer, which sum or sums shall be paid by the person requesting such exchange or transfer as a condition precedent to the exercise of the privilege of making such exchange or transfer. No other charge shall be made for the privilege of making such transfer or exchange. The provisions of the Illinois Bond Replacement Act shall govern the replacement of lost, destroyed or defaced bonds. The City and the bond registrar may deem and treat the person in whose name any bond shall be registered upon the registration books as the absolute owner of such bond, whether such bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of or interest 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 liability upon such 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. -7- Section 8. Bond Registrar. The City covenants that it shall at all times retain a bond registrar with respect to the bonds, that it will maintain at the designated office of such bond registrar a place where bonds may be presented for payment: 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 executing the certificate of authentication on any bond, and by such execution the bond registrar shall be deemed to have certified to the City that it has all requisite power to accept, and has accepted such duties and obligations not only with respect to the bond so authenticated but with respect to all the 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, however, be responsible for any representation in its certificate of authentication on the bonds. The City may remove the bond registrar at any time. In case at any time the bond registrar shall resign or shall be removed or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator of the bond registrar, or 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 bonds within twenty days after such appointment. Any bond registrar appointed In 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. Section 9. Limited Obligations. The bonds shall be limited obligations of the City payable solely from the Net Revenues derived from the operation of the System and the proceeds derived by the City from the collection of special assessments levied against property specially benefitted by the capital improvements (the "1988 Project") financed with the proceeds of the Waterworks and Sewerage Revenue Bonds, Series 1988, of the City. The bonds shall not constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation. Section 10. Pledge of Revenues. The bonds are Parity Bonds and shall be issued only upon satisfaction of the applicable conditions precedent to the issue of a series of Parity Bonds specified in Section 15 of the 1986 Ordinance. The bonds are secured by a pledge of the Revenues of the System, subject to the application thereof in accordance with the provisions of Section 13 of the 1986 Ordinance. Section 11. Pledge of Special Assessments. As additional security for the payment of the bonds, the City shall cause to be levied and collected in the manner provided by law, special assessments against property specifically benefitted by the 1988 Project. The proceeds derived by the City from the imposition and collection of the special assessments (whether principal or interest and including all prepayments of future installments) shall be deposited immediately in the 1988 Project Assessment Fund (the "Assessment Fund"), which was established by Ordinance No. 0-88-475 of the City as a special fund of the City. Such special assessments are hereby pledged for the payment of the principal of and interest on the bonds. Moneys held W in the Assessment Fund are also so pledged, subject to their application in accordance with the provisions of this Section. If at any time, the amount available in the Waterworks and Sewerage Fund shall not be sufficient to provide for the payment of any principal of or interest on the bonds then due and payable, then the City Treasurer shall withdraw from the Assessment Fund and deposit into the Bond and Interest Account in the Waterworks and Sewerage Fund, an amount sufficient to cure such deficiency. Moneys in the Assessment Fund may also be used for the following purposes: 1. to make required monthly deposits to the Bond and Interest Account with respect to the payment of the principal of or interest on the bonds; 2. to cure any deficiency in the Bond Reserve Account; 3. to pay the redemption price of bonds called for redemption;; 4. to purchase bonds at such prices as shall be determined by the City; and 5. to make provision for the payment of bonds. Section 12. Form of Bonds. The bonds shall be issued as fully registered bonds and shall be in substantially the following form, the blanks to be appropriately completed when the bonds are printed: -10- No. United States of America State of Illinois County of McHenry CITY OF McHENRY WATERWORKS AND SEWERAGE REVENUE REFUNDING BOND, SERIES 1993 INTEREST RATE MATURITY DATE DATED DATE CUSIP % May 1, December 1, 1993 _ REGISTERED OWNER: PRINCIPAL AMOUNT: 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 of this bond, or registered assigns, solely from the sources hereinafter referred to, the principal amount specified above on the maturity date specified above, and to pay interest on such principal amount 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 May 1, 1994 and semiannually thereafter on May 1 and November 1 in each year until the principal amount shall have been paid, by check or draft mailed to the registered 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 City for such purpose at the principal corporate trust office of American National Bank and Trust Company -11- of Chicago, 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 Registrar. This bond is one of a series of bonds (the "Series 1993 Bonds") issued in the aggregate principal amount of $5,300,000, which are authorized and issued pursuant to the Local Government Debt Reform Act, 30 Illinois Compiled Statutes 350„ and Division 4 of Article 8 of the Illinois Municipal Code, 65 Illinois Compiled Statutes 5/8-4 (collectively, the "Act") and by virtue of an ordinance adopted by the City Council of the City on December 15, 1993 and entitled: "Ordinance Authorizing the Issuance of $5,300,000 Waterworks and Sewerage Revenue Refunding Bonds, Series 1993, of the City of McHenry, Illinois" (the "1993 Ordinance"). The Series 1993 Bonds are limited obligations of the City payable solely from the revenues derived from the operation of the waterworks and sewerage system of the City (the "System") and the proceeds derived by the City from the collection of special assessments levied against property specially benefitted by the project financed with the proceeds of sale of the City's Waterworks and Sewerage Revenue Bonds, Series 1988. This bond does not constitute an indebtedness of the City within the meaning of any constitutional or statutory provision or limitation. Neither the full faith and credit nor the general taxing power of the City is pledged or available to pay the principal of or interest on the Series 1993 Bonds. The Series 1993 Bonds are equally and ratably secured by a pledge of the revenues of the System pursuant to the provisions of Ordinance No. 0-86-390, adopted by the City Council of the City on July 30, 1986, as amended (the 1986 -12- Ordinance"). Pursuant to the 1986 Ordinance, the City may hereafter issue additional bonds (hereinafter called "Additional Bonds") payable from the revenues of the System, which may be secured by a pledge of such revenues on a parity with the Series 1993 Bonds. The Series 1993 Bonds and any Additional Bonds are herein collectively called the "Bonds." Reference to the Act, Division 139 of Article 11 of the Illinois Municipal Code (65 Illinois Compiled Statutes 5/11-139), the 1986 Ordinance and the 1993 Ordinance is made for a description of the nature and extent of the security for the Series 1993 Bonds, the revenues and moneys pledged, the nature and extent and manner of enforcement of the pledge and the rights and remedies of the registered owners of the Series 1993 Bonds with respect thereto. The rights and obligations of the City and the registered owners of the Bonds under the 1986 Ordinance and the 1993 Ordinance may from time to time be modified or amended by a supplemental ordinance adopted by the City Council of the City with the written consent of the owners of two-thirds of the principal amount of all outstanding Bonds, subject to the terms, conditions and limitations set forth in the 1986 Ordinance. The Series 1993 Bonds maturing on or after May 1, 2003 are subject to redemption prior to maturity at the option of the City and upon notice as herein provided, in such principal amounts and from such maturities as the City shall determine and by lot within a single maturity, on May 1, 2002 and on any, date thereafter, at a redemption price equal to the principal amount thereof to be redeemed. Notice of the redemption of Series 1993 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 Series 1993 Bonds to be redeemed at their last addresses -13- appearing on such registration books. The Series 1993 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 Series 1993 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 receipt thereof by any registered owner) then from and after the redemption date interest on such Series 1993 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 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 Series 1993 Bond or Bonds, in the authorized denominations of $5,000 or any integral multiple thereof and of the same aggregate principal amount, maturity and interest rate as this bond shall be issued to the transferee in exchange therefor. In like manner, this bond may be exchanged for an equal aggregate principal amount of Series 1993 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 reimburse it for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange of this bond. No other charge shall be made for the privilege of making such transfer or exchange. The City and the Bond -14- 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 performed 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, 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. -15- 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: CITY OF McHENRY Mayor CERTIFICATE OF AUTHENTICATION Attest: This bond is one of the Waterworks and Sewerage Revenue Refunding City Clerk Bonds, Series 1993, described in the within mentioned 1993 Ordinance. AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, as Bond Registrar By Authorized Signer -16- 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: -17- Section 13. Escrow Deposit Agreement. The form of 1993 Escrow Deposit Agreement, by and between the City and American National Bank and Trust Company of Chicago, as Escrow Agent, on file in the office of the City Clerk, is hereby approved. The proper officers of the City are authorized and directed to execute and deliver the 1993 Escrow Deposit Agreement on behalf of the City. Section 14. Expense Fund. The "1993 Expense Fund" is hereby established as a special fund of the City. Moneys in the 1993 Expense Fund shall be used for the payment of costs of issuance of the bonds. Any moneys remaining in the Expense Fund on the 90th day following the date of issuance of the bonds shall be transferred to the Surplus Account of the Waterworks and Sewerage Fund. Section 15. Application of Bond Proceeds. The proceeds of sale of the bonds shall be applied as follows: 1. All accrued interest received upon the issuance of the bonds shall be deposited in the Bond and Interest Account of the Waterworks and Sewerage Fund. 2. There shall be deposited to the 1993 Escrow Fund maintained under the 1993 Escrow Deposit Agreement, the amount, together with other moneys deposited therein by the City, necessary to provide for the defeasance of the Prior Bonds. 3. Any proceeds remaining after making the foregoing deposits shall be deposited into the 1993 Expense Fund. Section 16. Application of Existing Funds. Concurrently with the issuance of the bonds there shall be withdrawn from the Assessment Fund and deposited into the 1993 Escrow Fund, the sum of $836,774.81. S.i Section 17. Investment Regulations. No investment shall be made of any moneys in the Waterworks and Sewerage Fund, the Assessment Fund, the 1993 Escrow Fund or the 1993 Expense Fund, except in accordance with the tax covenants set forth in Section 18 of this ordinance. Funds on deposit in the 1993 Expense Fund and the Assessment Fund may be invested at the direction of the City Treasurer in the same manner as provided in Section 13(f) of the 1986 Ordinance for money in the Depreciation Account. 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 redemption of such United States Treasury Securities. Section 18. 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 bond to become subject to federal income taxes in addition to federal income taxes to which interest on such bond is subject on the date of original issuance thereof. The City shall not permit any of the proceeds of the bonds, or any facilities financed with such proceeds, to be used in any manner that would cause any 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 bonds or other moneys to be invested in any manner that would cause any bond to constitute an "arbitrage -19- 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 the Internal Revenue Code of 1986. 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. Section 19. Bank Qualified Bonds. The City hereby designates the 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 are required to be taken into account for the purpose of Section 265(b)(3)(C) of the Code and will be issued by or on behalf of the City and all subordinate entities of the City during 1994 does not exceed $10,000,000. The City covenants that it will not designate and issue more than $10,000,000 aggregate principal amount of tax-exempt obligations in 1994. For purposes of the two preceding 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 20. Deposit Requirements. The monthly deposit to the Depreciation Account shall be $3,000 and the maximum credit balance in the Depreciation Account shall be $300,000. The monthly deposit to the Bond Reserve Account shall be $7,500 and the credit balance in the Bond Reserve Account shall be an amount equal to Maximum Annual Debt Service. In the event of a withdrawal from the Bond Reserve Account, -20- the amount to be replenished shall be at the rate of 1 /12 of the amount withdrawn per month, or $7,500 per month, whichever is greater. Section 21. Ordinance to Constitute a Contract. The provisions of this ordinance and the 1986 Ordinance shall constitute a contract between the City and the registered owners of the bonds. All of the provisions of the 1986 Ordinance shall remain in full force and effect notwithstanding the defeasance of the 1986 Bonds and the 1988 Bonds. Any pledge made in this ordinance or the 1986 Ordinance and the provisions, covenants and agreements herein and in the 1986 Ordinance set forth to be performed by or on behalf of the City shall be for the equal benefit, protection and security of the owners of any and all of the bonds. All of the bonds, regardless of the time or times of their issuance, shall be of equal rank without preference, priority or distinction of any of the bonds over any other thereof except as expressly provided in or pursuant to this ordinance. This ordinance shall constitute full authority for the issuance of the bonds and to the extent that the provisions of this ordinance conflict with the provisions of any other ordinance or resolution of the City, the provisions of this ordinance shall control. If any section, paragraph or provision of this ordinance shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this ordinance. Section 22. 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 23. Effective Date. In accordance with Section 11 of the Local Government Debt Reform Act, this ordinance shall become effective immediately. -21- Adopted this 15th day of December, 1993, by roll call vote as follows: Ayes: William J. Bolger, Terence Locke, Gregory C. Bates, David T. Lawson, William Baird Nays: None (SEAL) Attest: City Clerk Approved: LW or 504PA