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HomeMy WebLinkAboutPacket - 10/05/2020 - City Council The City of McHenry is dedicated to providing its citizens, businesses, and visitors with the highest quality of programs and services in a customer-oriented, efficient, and fiscally responsible manner. AGENDA REGULAR CITY COUNCIL MEETING Monday, October 5, 2020, 7:00 p.m. In light of the current COVID-19 public health emergency, this meeting will be held remotely only. The public can observe and participate by connecting online at: https://cityofmchenry.zoom.us/j/92548826317 or call in to the following number: +1 312 626 6799, Meeting ID: 925 4882 6317, Passcode: 856007 1. Call to Order. 2. Roll Call. 3. Pledge of Allegiance. 4. Public Comments: If you wish to submit any public comment, please email: dmorefield@cityofmchenry.org in advance of the meeting. The City will read such public comments during the public commentary portion of the meeting and the comments will be entered into the official record of the meeting. Any comments received during the meeting will be provided in writing to the Council after the meeting. 5. Consent Agenda: Motion to Approve the Following Consent Agenda Items: A. Adoption of revised Purchasing Policies and Procedures dated October 5, 2020; B. September 8, 2020 City Council Amended Meeting Minutes; C. September 21, 2020, City Council Meeting Minutes; D. Issuance of Checks in the amount of $172,540.84. 6. Individual Action Item Agenda A. Motion to approve or deny a Video Gaming License to Don’s Subs located at 323 Front Street. B. Motion to adopt a Parameters Ordinance providing for the issuance not to exceed $29 Million Taxable General Obligation Bonds (series 2020B) for the purpose of funding all or a portion of the unfunded liability of the City’s Police Pension Fund; a Budget Stabilization Fund for such unfunded liability; the levy and collection of a direct annual tax for the payment of and interest on the bonds; and, the sale of the bonds to Robert W. Baird & Co. Incorporated. C. Contingent upon the approval of Agenda Item 6B, the adoption of a Resolution Approving a Pension Obligation Bond Policy. D. Motion to approve a Parameters Ordinance providing for the issuance of not to exceed $3,300,000 General Obligation Refunding Bonds, Series 2020A, for the purpose of refunding certain outstanding general obligation bonds of the City; providing for the levy and collection of a direct annual tax sufficient to pay the principal of and interest on said bonds; authorizing and directing the execution of an escrow agreement in connection with the issuance of the bonds; and, authorizing the sale of the bonds to Robert W. Baird & Co Incorporated. 7. Discussion Items. A. Pre-Submittal input regarding the redevelopment of 3510 W. Elm Street 8. Staff Reports. 9. Mayor’s Report. A. Input regarding returning to in-person meetings beginning October 19, 2020. 10. City Council Comments. 11. Executive Session if Needed. 12. Adjourn. The complete City Council packet is available for review online via the City website at www.cityofmchenry.org. For further information, please contact the Office of the City Administrator at 815-363-2108. NOTICE: In compliance with the Americans with Disabilities Act (ADA), this and all other City Council meetings are located in facilities that are physically accessible to those who have disabilities. If additional accommodations are needed, please call the Office of the City Administrator at 815-363-2108 at least 72 hours prior to any meeting so that accommodations can be made. i~.0% Derik Morefield, City Administrator McHenry Municipal Center McHen333ry, IllinoisGreen 60050Street Phone: (815) 363-2100 Fax: (815) 363-2119 McHenrdmorefield@ci.mchenry.il.us CONSENT AGENDA ITEM DATE: October 5, 2020 TO:Mayor and City Council FROM: Derik Morefield, City Administrator RE:Adoption of an Updated Purchasing Policy and Procedures ATT: Existing Purchasing Policy and Procedures Revised Purchasing Policy and Procedures AGENDA ITEM SUMMARY: The purpose of this agenda item is to request the adoption of an updated Purchasing Policy and Procedures document. BACKGROUND/SUMMARY: The City last updated the Purchasing Policy and Procedures in 2014. At that time significant effort was placed into establishing a set of guidelines for purchasing, purchasing authority designation, and addressing the issue of cost comparison/quotations/competitive bidding. At this time, based on input from Department Directors and the City Attorney, it is being recommended that an updated policy be considered. In summary, this new policy achieves the following: Increases the Expenditure Approval Authority for Supervisors/Managers, Department Directors, and the Mayor/Finance Director/City Administrator for budgeted items approved by Council in the annual fiscal year budget. Further clarifies guidelines for when cost comparisons, quotations, and competitive bidding is required. Further clarifies approval procedures for unbudgeted and emergency expenditures. Provides a procedure for the consideration of change orders for capital projects. The City of McHenry is dedicated to providing the citizens, businesses and visitors of McHenry with the highest quality of programs and services in a customer-oriented, efficient and fiscally responsible manner. As with the previous policy, these procedures will be referred to and followed for expenditure of public dollars. Further, the policy will be included in future annual fiscal year budgets that are approved by the City Council. RECOMMENDATION: Therefore, if Council concurs, it is recommended that the attached revised Purchasing Policy and Procedures dated October 5, 2020 be adopted. Purchasing Policy and Procedures General Rules, Regulations and Ethics Purchasing activities for the City of McHenry shall be in accordance with this Purchasing Policy,City Ordinances and applicable Statutes of the State of Illinois. Items procured will represent the maximum economical benefit for each dollar spent. Procurement shall be made of commodities and services of high quality and continued availability. Whenever possible, purchases shall be based on obtaining cost comparisons, quotations or competitive bids. In the case that it is not possible to obtain cost comparisons, quotations or competitive bids, this will be identified in the approval and review process. Purchases shall be based on obtaining better knowledge of methods and of commodities required to operate cost effectively. Local participation will be encouraged in the procurement process. Consideration should be given to participate in cooperative purchasing efforts with other local government entities and in the State of Illinois Joint Purchasing Program whenever possible. All personnel involved in the purchasing process shall conduct themselves with fairness and impartiality, and demand the same of all vendors. Negotiations and discussions involving purchasing shall be conducted in compliance with the Code of Ethics and Rules of Conduct in the City's Personnel Handbook. The purchasing process will promote professionalism and be committed to the efficiencies of centralized purchasing. Approval Requirements& Delegations of Authority The purpose of this procedure is to outline the required approvals for all purchase commitments and transactions, and secondly, to define City personnel by classification who are authorized to initiate purchases at various monetary levels for materials, equipment, supplies and services. All designated personnel shall obtain the required approval(s) prior to final commitment. If one or more person's approval is required who is not available, the approval must be obtained from the next highest level of authority of approval level. Prior to approval for payment by the City Council, Department Directors and the City Administrator must approve all purchase invoices for those transactions and commitments of authorized supervisors and employees. The following table establishes the required levels of approval based on the dollar amount of the purchase: Authorized Employees City Mayor or Administrator Amount Supervisors/Managers Department or Finance City Mayor and Directors Director Administrator City Council 750 or less X X X 751 to$3,500 X X 3,501 to$6,500 X 6,501 to 10,000 X More than 10,000 X The following table lists those position classifications authorized to initiate purchases in relationship to the prescribed dollar amounts (from above). Those position classifications not shown below are strictly prohibited from purchasing unless otherwise authorized by the City Administrator or Finance Director. Dollar Amounts Authorized Position(s) More than $10,000 Mayor and City Council in accordance with Budgeted Items — Cost Comparisons, Quotations and Competitive Bidding" section of this policy* 6,501 - $10,000 Budgeted Items with the authorization of the Mayor or City Administrator in accordance with Budgeted Items — Cost Comparisons, Quotations and Competitive Bidding" section of this policy* 3,501-$6,500 Budgeted Items with authorization of the Finance Director or City Administrator in accordance with Budgeted Items — Cost Comparisons, Quotations and Competitive Bidding" section of this policy* 751 -$3,500 Budgeted Items with authorization of the Department Director in accordance with Budgeted Items — Cost Comparisons, Quotations and Competitive Bidding" section of this policy* 750 or less Budgeted Items by Employees authorized by their immediate Superintendent, Manager, or Department Director in accordance with Budgeted Items — Cost Comparisons, Quotations and Competitive Bidding" section of this policy* For items not identified as"Budgeted Items", budget amendment requests will be brought before the City Council for consideration/approval for items over $6,500 unless the action is considered emergency in nature. Should this be the case, Council will be notified of the purchase/acquisition and the item will be presented for approval at the next regular meeting of the City Council. Definitions of authorized positions: Authorized Dollar Amount Authorized Position(s) 750 or less Authorized Employees: (must have prior approval of their immediate Supervisor, Manager, or Department Director) Executive Assistant/Deputy City Clerk Administrative Assistants (all departments) Public Works Maintenance Worker Public Works Operator Public Works Mechanic Parks& Recreation Maintenance Worker Public Works Project Engineer Community Development Plumbing Inspector Community Development Code Enforcement Officer Community Development Permit Technician Supervisors/Managers: Public Works Water Division Superintendent Public Works Wastewater Division Superintendent Public Works Street Division Superintendent Public Works Wastewater Division Assistant Superintendent Public Works Utility Division Superintendent Public Works Forestry Division Superintendent Community Development Superintendent of Residential Inspections Community Development Superintendent of Commercial Inspections Parks & Recreation Parks Division Superintendent Parks& Recreation Parks Division Assistant Superintendent Parks & Recreation Recreation Center Manager Recreation Superintendent of Programs Recreation Superintendent of Athletics &Aquatics Police Deputy Chief Police Commander of Operations Police Commander of Support Services Police Sergeants Police Dispatch Supervisor Information Technology Manager 751 -$3,500 Department Directors: Deputy City Administrator/Director of Parks & Recreation Director of Economic Development Director of Community Development Director of Finance Director of Public Works Chief of Police 3,501 -$6,500 City Administrator or Finance Director 6,501-$10,000 Mayor or City Administrator More than $10,000 May and City Council Budgeted Items—Cost Comparison, Quotations and Competitive Bidding For budgeted items under$6,500 authorized positions shall obtain, where possible, three (3) cost comparisons prior to the purchase of goods and/or services. For budgeted items between$6,501 and$10,000 authorized positions shall obtain,where possible, three (3) cost comparisons or three (3) written quotations prior to the purchase of goods and/or services. For budgeted items over$10,000, but less than $20,000, staff shall obtain, where possible, three 3)written quotations for the purchase of goods and/or services for consideration and approval by the City Council. For budgeted items over $20,000, the purchase of goods and/or services shall follow a formal competitive bidding process whereby staff develops bid specifications, Council approves a request to advertise for bids, bids are received and evaluated, and a recommendation is forwarded to the City Council for award/approval. Purchasing Policy and Procedures (Revised October 5, 2020) A. General Rules, Regulations and Ethics Purchasing of goods and services for the City of McHenry shall be in accordance with this Purchasing Policy, City Ordinances and applicable statutes of the State of Illinois. Items procured must represent the maximum economic benefit for each dollar spent. Purchases shall be of high quality and continued availability. Purchases shall be based on obtaining cost comparisons, quotations, or competitive bids. Purchases shall be based on obtaining better knowledge of methods and of commodities required to operate cost effectively. Local participation will be encouraged in the purchasing process. Consideration should be given to participate in cooperative purchasing efforts with other local government entities and in the State of Illinois Joint Purchasing Program whenever possible. All personnel involved in the purchasing process shall conduct themselves with fairness and impartiality and demand the same of all vendors. Negotiations and discussions involving purchases shall be conducted in compliance with the Code of Ethics and Rules of Conduct in the City's Personnel Handbook. The purchasing process shall promote professionalism and be committed to the efficiencies of centralized purchasing. B. Expenditure Approval Authority The following table includes the personnel authorized to make purchases and the amount each are authorized to spend on items included in the annual fiscal year budget, as approved by the City Council: Mayor, City Budgeted Designated Supervisors/Managers Department Administrator Amounts Employees* Directors or Finance Director Less than X X X X 750 Less than X X X 2,500 Less than 10,000 X X Less than 20,000 X Designated Employees: Executive Assistant/Deputy City Clerk Coordinators and Analysts Administrative Assistants (all departments) Public Works Maintenance Worker Public Works Operator Public Works Mechanic Parks& Recreation Maintenance Worker Public Works Project Engineer Community Development Plumbing Inspector Community Development Code Enforcement Officer Community Development Permit Technician C. Purchasing Procedure for Budgeted Items The following purchasing procedures apply to budgeted amounts, excluding architectural, surveying or engineering, legal, auditing, information technology or other professional services. a. For budgeted items from $2,500.00 to $9,999.99, three (3) cost comparisons shall be obtained prior to all purchases. b. For budgeted items from $10,000.00 to$19,999.99,three (3)written quotations shall be obtained prior to all purchases. c. For budgeted items$20,000.00 and over,all purchases shall follow a competitive bidding process whereby bid specifications are developed, bids solicited, bids are received and evaluated by staff, and a recommendation is forwarded to the City Council for award/approval. The City Council reserves the right to waive the competitive bidding process upon the vote of 2/3 of the City Council members then holding office. D. Purchasing Procedure for Non-budgeted Amounts For all purchases that are not included in the annual fiscal year budget, a budget amendment request must be approved by the City Council prior to purchase, unless the actions are considered emergency in nature. Once approved, purchases may be made in accordance with the Expenditure Approval Authority set forth above. E. Purchasing Procedure—Emergencies For all purchases considered emergency in nature by the City Administrator or Mayor, such as threats to public health or safety, where immediate repairs to City property are required to protect or prevent against further loss or damage, or where immediate action is needed to prevent or minimize serious disruption to City services, competitive purchasing procedures, as directed by the Mayor or City Administrator under the circumstances, shall be used. The City Council shall be notified of the emergency circumstances and the expenditure amount and the item will be presented for formal approval or ratification at the next regular meeting of the City Council. F. Change Orders Change orders $20,000.00 and over shall be brought before the City Council unless specifically authorized in the bid selection process. However, if a change order for any public works contract authorizes or necessitates any increase in the contract price that is fifty percent(50%) or more of the original contract price or that authorizes or necessitates any increase in the price of a subcontract under the contract that is fifty percent (50%) or more of the original subcontract price, then the portion of the contract that is covered by the change order must be resubmitted for bidding in the same manner for which the original contract was bid pursuant to the Public Works Contract Change Order Act, 50 ILCS 525. irs... 1 City of McHenry 333 S Green Street r McHenry, Illinois 60050 v Phone: (815) 363-2100 Fax: (815) 363-2119 www.ccityofmchenry.org MCHenr CONSENT AGENDA ITEM NC RT Of TYC•O1 RNCA DATE: October 5, 2020 TO:City Council FROM: Monte Johnson RE:Amended Minutes of September 8, 2020 AGENDA ITEM SUMMARY: It is recommended that Council consider the approval of an amended set of minutes for the September 8, 2020, City Council meeting. The portion of the minutes being recommended for amendment are regarding the discussion and action regarding the annexation of parcels. In reading the current set of minutes, under the title "E. Motion to approve Ordinances annexing currently unincorporated parcels at 202 Barreville Road", it states that the property is owned by the Adams' and how there are animals on the property. This was part of the discussion of the other parcels, which are listed separately and later in the current set of minutes. The reason for amending would be for clarification. Because these minutes were previously approved, I did not want to make any changes without approval of the Council. Enclosed are the previously approved minutes as well as an amended set of minutes that reflects an accurate of the discussion of annexing and tabling the parcels. If Council concurs, then a motion to approve the amended minutes of September 8, 2020 is recommended. The City of McHenry is dedicated to providing its citizens,businesses,and visitors with the highest quality ofprograms and services in a customer-oriented,efficient,and fiscally responsible manner. City of McHenry Council Meeting Minutes 9.8.20 McHe MINUTES REGULAR CITY COUNCIL MEETING Tuesday, September 8, 2020, 7:00 p.m. In light of the current COVID-19 public health emergency, this meeting will be held remotely only. The public can observe by connecting online at: https://cityofmchenry.zoom.us/j/6088273734 The public can also call in to the following number: +1 312 626 6799, Meeting ID 608 827 3 734 Call to Order: The City Council of the City of McHenry, Illinois, met in regular session on Tuesday, September 8, 2020, at 7:00 p.m, remotely. Roll Call: Mayor Jett called the roll call. Members present: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding, Alderman Mihevc, Alderman Devine, Alderwoman Miller, and Mayor Jett. Others present: Attorney McArdle, Administrator Morefield, Interim Director of Public Works Strange, Director of Community Development Polerecky, Finance Director Lynch, Director of Parks and Recreation Hobson, Director of Economic Development Martin, Chief of Police Birk,City Planner Sheriff, and City Clerk Ramel. Pledge of Allegiance: Mayor Jett led the pledge Public Comments: No Public Comment Consent Agenda: Motion to Approve the Following Consent Agenda Items: A. An Ordinance Pertaining to the Local Cure Program; (Morefield) B. Rejection of all bids received for the 2020 Fall Street Sweeping Program; (Strange) C. Motion to authorize the Mayor's execution of an amended Intergovernmental Agreement between the City of McHenry Division of Transportation and the City of McHenry for Phase I Engineering and authorization for staff to accept the transfer of the project lead to McHenry County upon execution for the Bull Valley Multi-Use Path Project; (Strange) D. Motion to approve Services Change Order#2 for the Bull Valley Bike Path to Hampton, Lenzini and Renwick, Inc. in the amount of$48,634.12; (Strange) F. August 17, 2020, City Council Meeting Minutes; G. Issuance of Checks in the amount of $600,914.79. 1 City of McHenry Council Meeting Minutes 9.8.20 A motion was made by Alderman Santi and seconded by Alderman Harding to approve Consent Agenda Items as presented: Roll Call: Vote: 7-ayes: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 0-nays, 0-abstained. Motion carried. Consent Agenda: Motion to Approve the Following Consent Agenda Item: E. McHenry Parks & Recreation Facilities & Special Use Permit Requests; (Hobson) Pulled by Alderman Devine he wants to abstain from this with Alderwoman miller. A motion was made by Alderman Santi and seconded by Alderman Schaefer to approve Consent Agenda Items as presented: Roll Call: Vote: 5-ayes: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding, Alderman Mihevc. 0-nays, 2-abstained- Alderman Devine, Alderwoman Miller. Motion carried. Individual Action Item Agenda: A. Motion to approve the transfer of a Class C Liquor License from JOG Gasoline Inc., located at 4608 W. Crystal Lake Road, to Pazo Oil LLC. (Jett) A motion was made by Alderwoman Miller and seconded by Alderman Santi to approve Individual Agenda items as presented. Roll Call: Vote: 7-ayes: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 0-nays, 0-abstained. Motion carried. Alderman Glab agreed with this item as long as background check is approved. Alderman Scahefer asked if Mayor has met the new applicants yet, he has not and doesn't have to. No public comment. B. Motion to approve Ordinances granting a Conditional Use Permit to allow Outdoor Storage in conjunction with a towing business at 1302 Borden Street. (Polerecky) Petitioners for this item were on the call if needed for questions. The storage will be screened from publics view. Alderman Santi wished them good luck. No public comment. A motion was made by Alderman Santi and seconded by Alderwoman Miller to approve Individual Agenda items as presented. Roll Call: Vote:7-ayes: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 0-nays, 0-abstained. Motion carried. 2 City of McHenry Council Meeting Minutes 9.8.20 C. Motion to approve and execute a Commercial Tenant Incentive Grant in the amount of 10,000 to Miller's Diner, located at 3918 Main Street. (Martin) Alderman Santi stated that Kim the owner has invested close to $60,000 into the business. As reviewed with the owner Kim, the she has remodeled the inside and purchased some equipment, also got a signed awning. Alderman Schaefer asked if she was purchasing some locally, it was confirmed that some items were purchased in Round Lake due to the product not being available in McHenry, will use local suppliers in McHenry if she can, always her first choice. Alderman Devine wanted to know how many times these grants have been given out,it was confirmed that this is the first one. No public comment. A motion was made by Alderman Santi and seconded by Alderman Schaefer to approve Individual Agenda items as presented. Roll Call: Vote:6-ayes: Alderman Santi, Alderman Schaefer, Alderman Harding, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 1-nays- Alderman Glab, 0-abstained. Motion carried. D. Motion to approve and execute a Commercial Tenant Incentive Grant in the amount of 5,000 to Pineapple X-Pressed, located at 1104 N. Green Street. (Martin) This is a new business, just opened up a few months ago. Looking to use this grand for new blenders, prep table and outdoor seating. NO public comment. A motion was made by Alderman Santi and seconded by Alderman Schaefer to approve Individual Agenda items as presented. Roll Call: Vote: 6-ayes: Alderman Santi, Alderman Schaefer, Alderman Harding, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 1-nays- Alderman Glab, 0-abstained. Motion carried. E. Motion to approve Ordinances annexing currently unincorporated parcels at 202 Barreville Road, There was thought of withdrawing this but was left in for this agenda, to review, per Attorney McArdle. This property is owned by the Adams and it is leased by another party. Alderwoman Miller is in support of the annexation, would like to move forward with the process. Some talk went on for a while regarding this topic. Most of the discussion was regarding the animals that do occupy the property. 3 City of McHenry Council Meeting Minutes 9.8.20 A motion was made by Alderman Schaefer and seconded by Alderwoman Miller to approve Individual Agenda items as presented. Roll Call: Vote: 7-ayes: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 0-nays -, 0-abstained. Motion carried. A Motion to table the annexations of 219 Barrenville Road, 223 Barrenville Road, and the property located north of River Road and South Elm Street. A motion was made by Alderman Sant and seconded by Alderman Glab to approve Individual Agenda items as presented. Roll Call: Vote: 7-ayes: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 0-nays -, 0-abstained. Motion carried. Discussion Items: A. Location of a marijuana dispensary at 408 State Route 31 (supplement provided; Martin/McArdle)- Removed from this evenings agenda. B. Vacation of right of way in the Hanly Subdivision (supplement provided; Polerecky). Alderman Glab wanted to know if can be vacated still with a dedicated easement. Still needs to be covered liability with insurance per Attorney McArdle, because they hold an interest in the property. The property owners are maintaining it and most of The Council wants to move forward with this. C. Correction to December 2019 Update of Capital Development Fee Structure supplement provided; Polerecky). Error in the math that Baxter and Woodman provded, it was caught and wanted the transparency to The Council that it happened, there was spreadsheet error on their report. D. Issuance of Pension Obligation Bonds for Outstanding Police Pension Liability (no supplement; Lynch). Dalena Welkomer and Stefan Roberts gave a presentation from the Baird Public Finance Group. The presentation was regarding the City's Police Pension Fund. They explained interest rates and return on the plans. The benefits were explained to The Council as well regarding Obligation Bonds. There was some follow up questions from The Council, following the lengthy and throughout presentation. The discussion continued on for a while. Mayor Jett asked the time frame, per Director of Finance Lynch, the 5th of October would be great for them to bring more back to The Council if wanting to move forward. 1 Alderman Santi wanted the presentation to review before then. Many members would like to move forward after reviewing the information on their own. Director Lynch concluded that she would get the information over to The Council per their requests. 4 City of McHenry Council Meeting Minutes 9.8.20 Staff Reports: A. Transmittal of FY20/21 1st Quarter Financial Report (Lynch) Director Lynch explained the Financial Report to The Council. Mayor's Report: Nothing to report. City Council Comments: Director of Parks and Recreation Hobson, talked about the boat rental it did open this weekend, it turned into a nice project for the city. This Saturday will be the first lighting of the fire globes, there are three additional ones. Will be lighted every Saturday for the next 8 weeks. This Saturday modified Art in the Park. 9/11 event will be a FB live event where you can raise onto the flag. Alderman Santi said that he had fun at the rentals. Executive Session: Not at this time. Adjourn: A motion was made Alderman Santi and seconded by Alderman Schaefer to adjourn the meeting at 9:35 PM. Roll Call: Vote:7-ayes: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding-absent, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 0-nay-, 0-abstained. Motion carried. X LI Mayor Wayne Jett City Clerk Trisha Ramel Q/ J kmt 611 Cl4k, 5 City of McHenry Council Meeting Minutes f 9.8.20 V f McHenr MINUTES REGULAR CITY COUNCIL MEETING Tuesday, September 8, 2020, 7:00 p.m. In light of the current COVID-19 public health emergency, this meeting will be held remotely only. The public can observe by connecting online at: https://cityofmchenry.zoom.us/I/6088273734 The public can also call in to the following number: +1 312 626 6799, Meeting ID 608 827 3 734 Call to Order: The City Council of the City of McHenry, Illinois, met in regular session on Tuesday, September 8, 2020, at 7:00 p.m, remotely. Roll Call: Mayor Jett called the roll call. Members present: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding, Alderman Mihevc, Alderman Devine, Alderwoman Miller, and Mayor Jett. Others present: Attorney McArdle, Administrator Morefield, Interim Director of Public Works Strange, Director of Community Development Polerecky, Finance Director Lynch, Director of Parks and Recreation Hobson, Director of Economic Development Martin, Chief of Police Birk,City Planner Sheriff, and City Clerk Ramel. Pledge of Allegiance: Mayor Jett led the pledge Public Comments: No Public Comment Consent Agenda: Motion to Approve the Following Consent Agenda Items: A. An Ordinance Pertaining to the Local Cure Program; (Morefield) B. Rejection of all bids received for the 2020 Fall Street Sweeping Program; (Strange) C. Motion to authorize the Mayor's execution of an amended Intergovernmental Agreement between the City of McHenry Division of Transportation and the City of McHenry for Phase I Engineering and authorization for staff to accept the transfer of the project lead to McHenry County upon execution for the Bull Valley Multi-Use Path Project; (Strange) D. Motion to approve Services Change Order#2 for the Bull Valley Bike Path to Hampton, Lenzini and Renwick, Inc. in the amount of$48,634.12; (Strange) F. August 17, 2020, City Council Meeting Minutes; G. Issuance of Checks in the amount of $600,914.79. 1 City of McHenry Council Meeting Minutes 9.8.20 A motion was made by Alderman Santi and seconded by Alderman Harding to approve Consent Agenda Items as presented: Roll Call: Vote: 7-ayes: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 0-nays, 0-abstained. Motion carried. Consent Agenda: Motion to Approve the Following Consent Agenda Item: E. McHenry Parks & Recreation Facilities & Special Use Permit Requests; (Hobson) Pulled by Alderman Devine he wants to abstain from this with Alderwoman miller. A motion was made by Alderman Santi and seconded by Alderman Schaefer to approve Consent Agenda Items as presented: Roll Call: Vote: 5-ayes: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding, Alderman Mihevc. 0-nays, 2-abstained- Alderman Devine, Alderwoman Miller. Motion carried. Individual Action Item Agenda: A. Motion to approve the transfer of a Class C Liquor License from JOG Gasoline Inc., located at 4608 W. Crystal Lake Road, to Pazo Oil LLC. (Jett) A motion was made by Alderwoman Miller and seconded by Alderman Santi to approve Individual Agenda items as presented. Roll Call: Vote: 7-ayes: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 0-nays, 0-abstained. Motion carried. Alderman Glab agreed with this item as long as background check is approved. Alderman Scahefer asked if Mayor has met the new applicants yet, he has not and doesn't have to. No public comment. B. Motion to approve Ordinances granting a Conditional Use Permit to allow Outdoor Storage in conjunction with a towing business at 1302 Borden Street. (Polerecky) Petitioners for this item were on the call if needed for questions. The storage will be screened from publics view. Alderman Santi wished them good luck. No public comment. A motion was made by Alderman Santi and seconded by Alderwoman Miller to approve Individual Agenda items as presented. Roll Call: Vote:7-ayes: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 0-nays, 0-abstained. Motion carried. 2 City of McHenry Council Meeting Minutes 9.8.20 C. Motion to approve and execute a Commercial Tenant Incentive Grant in the amount of 10,000 to Miller's Diner, located at 3918 Main Street. (Martin) Alderman Santi stated that Kim the owner has invested close to $60,000 into the business. As reviewed with the owner Kim, the she has remodeled the inside and purchased some equipment, also got a signed awning. Alderman Schaefer asked if she was purchasing some locally, it was confirmed that some items were purchased in Round Lake due to the product not being available in McHenry, will use local suppliers in McHenry if she can, always her first choice. Alderman Devine wanted to know how many times these grants have been given out,it was confirmed that this is the first one. No public comment. A motion was made by Alderman Santi and seconded by Alderman Schaefer to approve Individual Agenda items as presented. Roll Call: Vote:6-ayes: Alderman Santi, Alderman Schaefer, Alderman Harding, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 1-nays- Alderman Glab, 0-abstained. Motion carried. D. Motion to approve and execute a Commercial Tenant Incentive Grant in the amount of 5,000 to Pineapple X-Pressed, located at 1104 N. Green Street. (Martin) This is a new business, just opened up a few months ago. Looking to use this grand for new blenders, prep table and outdoor seating. NO public comment. A motion was made by Alderman Santi and seconded by Alderman Schaefer to approve Individual Agenda items as presented. Roll Call: Vote: 6-ayes: Alderman Santi, Alderman Schaefer, Alderman Harding, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 1-nays- Alderman Glab, 0-abstained. Motion carried. Deputy Clerk's Note: The previously approved portion of the minutes stricken below have been amended with "Exhibit A, Amended Discussion Regarding Annexation of Parcels". arrey/lie l oad i There was thought of withdrawing this but was left In for thisi ageendra, to rceyiew, nor ttorney McArdle. This property is owned by the Adams and it is leased by another party. Alderwoman do occupy the property. 3 City of McHenry Council Meeting Minutes 9.8.20 Alderwoman Miller. 0 nays , 0 abstained. Motion carried. property located north of River Road and South Elm Street. Glab, Alderman Schaefer, Alderman Harding, Alderman Mihevc, Alderman Devine, lder Oman Miller 0 n 0abst fined AAo carTriiedTT!'A'T!T!'GT.-PST , ri7TC TTlTi1TTVTV Discussion Items: A. Location of a marijuana dispensary at 408 State Route 31 (supplement provided; Martin/McArdle)- Removed from this evenings agenda. B. Vacation of right of way in the Hanly Subdivision (supplement provided; Polerecky). Alderman Glab wanted to know if can be vacated still with a dedicated easement. Still needs to be covered liability with insurance per Attorney McArdle, because they hold an interest in the property. The property owners are maintaining it and most of The Council wants to move forward with this. C. Correction to December 2019 Update of Capital Development Fee Structure supplement provided; Polerecky). Error in the math that Baxter and Woodman provded, it was caught and wanted the transparency to The Council that it happened, there was spreadsheet error on their report. D. Issuance of Pension Obligation Bonds for Outstanding Police Pension Liability (no supplement; Lynch). Dalena Welkomer and Stefan Roberts gave a presentation from the Baird Public Finance Group. The presentation was regarding the City's Police Pension Fund. They explained interest rates and return on the plans. The benefits were explained to The Council as well regarding Obligation Bonds. There was some follow up questions from The Council, following the lengthy and throughout presentation. The discussion continued on for a while. Mayor Jett asked the time frame, per Director of Finance Lynch, the 5th of October would be great for them to bring more back to The Council if wanting to move forward. 4 City of McHenry Council Meeting Minutes 9.8.20 Alderman Santi wanted the presentation to review before then. Many members would like to move forward after reviewing the information on their own. Director Lynch concluded that she would get the information over to The Council per their requests. Staff Reports: A. Transmittal of FY20/21 1st Quarter Financial Report (Lynch) Director Lynch explained the Financial Report to The Council. Mayor's Report: Nothing to report. City Council Comments: Director of Parks and Recreation Hobson, talked about the boat rental it did open this weekend, it turned into a nice project for the city. This Saturday will be the first lighting of the fire globes, there are three additional ones. Will be lighted every Saturday for the next 8 weeks. This Saturday modified Art in the Park. 9/11 event will be a FB live event where you can raise onto the flag. Alderman Santi said that he had fun at the rentals. Executive Session: Not at this time. Adjourn: A motion was made Alderman Santi and seconded by Alderman Schaefer to adjourn the meeting at 9:35 PM. Roll Call: Vote:7-ayes: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding-absent, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 0-nay-, 0-abstained. Motion carried. X X Mayor Wayne Jett City Clerk Trisha Ramel 5 City of McHenry Council Meeting Minutes 9.8.20 Exhibit A, Amended Discussion Regarding Annexation of Parcels Motion to approve Ordinances annexing currently unincorporated parcels at 202 Barreville Road, 219 Barreville Road, 223 Barreville Road, and the property located north of River Road and south of Elm Street. Attorney McArdle began discussion regarding the proposed annexations and mentioned some issues with annexing certain properties. The property on Route 120 and River Road is owned by th Adams family, and they are concerned that the property would be zoned residential. Annexed properties do come in as residential unless having gone through the zoning process, and this property is a better fit being zoned commercial. The properties listed at 219 Barreville Road are owned by Joe Doherty, and he leases that property to an individual who would like to keep animals for more than 20 or 30 years. It is reported that an individual on the east side of the road (202 Barreville) would like to keep chickens. Each of the properties have zoning issues that would need individual attention,which is causing more work than expected. Instead of forcing the annexations, which is allowed by law, we are trying to accommodate everybody.Attorney McArdle recommends taking this off the agenda and not annexing until property owners come forward and ask to be annexed. Alderman Glab stated that there has been discussion of these properties in pockets for 20 or more years, and it is time to get them annexed into the City. It is not possible to look at each individual property to give exceptions because these properties are in a neighborhood area and are encompassed by the rest of the City. Attorney McArdle stated that if any existing use of these properties is legal in the County they will be brought in as legal non-conforming to the City for a certain period of time. Alderman Glab believes the City should move forward with the annexations or else the City will be looking back in 20 more years and seeing itself in the same position. Alderwoman Miller agrees with Alderman Glab in that we can't keep waiting to have these properties annexed. This issue was brought to the Council when Alderman Miller was on the Planning and Zoning board and it was discussed numerous times at the committee level. There are many islands out there that need to be annexed and the only reason they haven't been is because nobody took the time to deal with it.The work has already been done for the four parcels presented, and their individual issues can be dealt with. It is time to get rid of the islands and start annexing all of those properties. Mr. and Mrs. Doherty explained that they bought the property because having animals was allowed, and they would eventually sell the property knowing that was allowed in the County. They don't believe having animals on the property has caused any problems or harm. If they are going to be annexed, they would like to request a special use permission to allow the animals moving forward. City Planner Cody Sheriff explained that from the County's perspective, horses are allowed on properties zoned agricultural, and their rules allow for a certain amount of horses per acre. Council members discussed the length of time that horses or other existing uses should be allowed once annexed. There was concern that 30 years would be too long of a time to allow animals, as there is no way to know what Green Street and that area of McHenry will look like in the future. Alderwoman Miller suggested that if the Doherty property was allowed to keep horses as long as they own the property,that once they sell, 6 City of McHenry Council Meeting Minutes 9.8.20 the contract for sale of the property could contain a provision that new owners would go through the process of getting a special use approved prior to purchase. After further discussion it was decided that the properties on River Road/Elm Street, 219 Barreville Road, and 223 Barreville Road should be continued until a later meeting, as there were issues that needed to be worked out. It was asked if there were any issues with the property at 202 Barreville Road. Doug Martin stated that one of the sons was going to move there but wanted chickens, and since they would no longer be allowed, he would no longer move in. A motion was made by Alderwoman Miller and seconded by Alderman Schaefer to annex the currently unincorporated parcel at 202 Barreville Road. Roll Call: Vote: 7-ayes: Alderwoman Miller, Alderman Schaefer, Alderman Glab,Alderman Santi, Alderman Mihevc,Alderman Devine, Alderman Harding. 0-nays, 0-abstained. Motion carried. A motion was made by Alderman Santi and seconded by Alderman Glab to table the ordinances annexing currently unincorporated parcels at 219 Barreville Road, 223 Barreville Road, and the property located north of River Road and south of Elm Street. Roll Call: Vote: 7-ayes: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 0-nays, 0-abstained. Motion carried. Monte A Johnson, Deputy Clerk 7 City of McHenry Council Meeting Minutes 9.21.20 McHenr MINUTES REGULAR CITY COUNCIL MEETING Monday, September 21, 2020, 7:00 p.m. In light of the current COVID-19 public health emergency, this meeting will be held remotely only. The public can observe by connecting online at: https://cityofmchenry.zoom.us/j/97728178638. The public can also call in to the following number: +1 312 626 6799, Meeting ID 977 2817 8638 Call to Order: The City Council of the City of McHenry, Illinois, met in regular session on Monday, August 3, 2020, at 7:00 p.m. in the McHenry City Council Chambers, 333 S. Green Street, McHenry, IL. Roll Call: Mayor Jett called the roll call. Members present: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding- absent, Alderman Mihevc, Alderman Devine, Alderwoman Miller, and Mayor Jett. Others present: Attorney McArdle, Administrator Morefield, Interim Director of Public Works Strange, Director of Community Development Polerecky, Finance Director Lynch, Director of Parks and Recreation Hobson, Director of Economic Development Martin, Chief of Police Birk,City Planner Sheriff, and City Clerk Ramel. Pledge of Allegiance: Mayor Jett led the pledge. Public Comments: No public comment. Consent Agenda: Motion to Approve the Following Consent Agenda Items: A. Adopt the Seventh Continuation of Proclamation of the Local Disaster Emergency for the City of McHenry to December 31, 2020 (McArdle); B. Accept the recommendation of staff to approve the revised Intergovernmental Agreement for Snowplowing between the City of McHenry and McHenry Township Strange); C. Accept public improvements associated with the Townhomes of Prairie Lakes Subdivision Development (Strange); D. September 8, 2020, City Council Meeting Minutes; E. Issuance of Checks in the amount of $832,919.63; F. Issuance of As Needed Checks in the amount of $455,669.88. 1 City of McHenry Council Meeting Minutes 9.21.20 A motion was made by Alderman Schaefer and seconded by Alderwoman Miller to approve Consent Agenda Items as presented: Roll Call: Vote: 7-ayes: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 0-nays, 0-abstained. Motion carried. Individual Action Item Agenda A. Motion to approve a Resolution designating Bush Terrace as "Mark Amore Terrace" as unanimously recommended by the Public Works Committee (Strange). On October 1st the dedication will take place at 1:00 in the afternoon. There will be a street sign as part of the dedication to Mark Amore, fallen McHenry Firefighter. A motion was made by Alderman Santi and seconded by Alderman Harding to approve Individual Agenda items as presented. Roll Call: Vote:7-ayes: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 0-nays, 0-abstained. Motion carried. Discussion Items: A. Potential Sales Tax Rebate for the continued redevelopment of Water Tower Marina by Munson Ski & Marine (Polerecky). Director of Community Development, Polerecky, stated that the marina is under contract. The Munson family was present to explain their vision of what the marina would look like under their ownership; a full scale marina, boat sales, a model someone of the Abby located in Wisconsin. Would like to have a swimming pool and events offered in a pavilion that would be very upscale that could help beautify the whole area. Many of The Council would like to see a proposal and see things move forward with this discussion item. The idea of waving water and sewer would like to be offered. Director Polerecky thanked The Council for their support in moving forward with this discussion item. Staff Reports: Director of Parks and Recreation, Hobson reminded The Council that Saturday Evenings fire globe lightening will continue. Sam from Northwest Herald present for information as well. Director of Public Works, Strange, stated that there is a public works/ road meeting on Monday 28th at 6pm, 3 City of McHenry Council Meeting Minutes 9.21.20 Mayor's Report: None City Council Comments: None Executive Session if Needed: Not at this time Adjourn: A motion was made Alderman Santi and seconded by Alderman Harding to adjourn the meeting at 7:35 PM. Roll Call: Vote:7-ayes: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding-absent, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 0-nay-, 0-abstained. Motion carried. X X Mayor Wayne Jett City Clerk Trisha Ramel 3 Expense Approval Register McHenry, IL List of Bills Council Meeting - 10-5-2020 MGI�e�1CV Vendor Name Payable Number Post Date Descriptlan (Item) Account Number Amount Vendor: AQUA PA AQUA PA MS-2621321 10/05/2020 7/20-9/19/20 READS SIO-32-5110 160,50 Vendor AQUA PA Total: 160,50 Vendor: BAKER & SON CO, PETER BAKER & SON CO, PETER 30498 10/05/2020 HMA SFC 100-33-6110 485.76 Vendor BAKER & SON CO, PETER Total: 495,76 Vendor: BANK OF NEW YORK MELLON, THE BANK OF NEWYORK MELLON, 252-2319467 10/OS/2020 MCHENRY 2010C 510-32-7300 11052,50 Vendor BANK OF NEW YORK MELLON, THE Total: 1,052,50 Vendor: BUSS FORD SALES BUSS FORD SALES 6066344 10/05/2020 CLAIM 328631 L1325 REPAIR 610-00-5990 11017,61 Vendor BUSS FORD SALES Total: 11017*61 Vendor: CALDWELL, BRETT CALDWELL, BRETT 277322 10/05/2020 FORFEIT FEE 100-41-3637 25,00 Vendor CALDWELL, BRETTTotal: 25,06 Vendor: CHASE, BILL CHASE, BILL 276987 10/05/2020 2ND PLACE FINISH 100-41-3637 5,00 Vendor CHASE, BILLTotal: 5100 Vendor: CONDUENT HR CONSULTING LLC CONDUENT HR CONSULTING 2453010 10/OS/2020 AUG 2020 SVS FEES 600-00-6960 72,00 Vendor CONDUENT HR CONSULTING LLCTotal: 72,00 Vendor: ENCINIA, HEATHER ENCINIA, HEATHER 276529 10/05/2020 PGM CXL 100-41-3637 11195,00 Vendor ENCINIA, HEATHER Total: 10195,00 Vendor: FOX VALLEY FIRE & SAFETY FOX VALLEY FIRE &SAFETY IN00381224 10/05/2020 JESSUP RADIO INSTALL 225-00-5110 195.00 Vendor FOX VALLEY FIRE & SAFETY Total: 195,00 Vendor: GAYLORD, PAULA GAYLORD,PAULA 276355 10/05/2020 ROSTER CHANGE 100-41-3637 14.75 Vendor GAYLORD, PAULA Total: 14,75 Vendor: HLR HLR 20201591 10/05/2020 MCHENRY DARTMOOR DR 270-00-8600 1,586.25 HLR 20201659 10/05/2020 BARREVILLE RD WING WALL 100-01-8900 11701,25 Vendor HLR Total: 3,287.50 Vendor: IPPFA IPPFA 2988 10/05/2020 IPPFA DUES JANI-DEC 31,2021 760-00-5110 795,00 Vendor IPPFA Total: 795,00 Vendor: JIMS MCHENRY AUTO BODY JIMS MCHENRY AUTO BODY 8593 10/05/2020 11325 REPAIR 610-00-5980 3,695.47 Vendor JIMS MCHENRYAUTO BODYTotal: 31695,47 Vendor: KORNFEIND, HALEY KORNFEIND, HALEY INV0010495 10/05/2020 9/15-9/23/20 100-47-5110 149,50 Vendor KORNFEIND, HALEYTotal: 149,50 Vendor: LAUTERBACH & AMEN, LLP LAUTERBACH & AMEN, LLP 48918 10/05/2020 ACT REP PREP 760-00-5110 2,900,00 Vendor LAUTERBACH & AMEN, LLP Total: 21900,00 Vendor: LPL FINANCIAL LPL FINANCIAL INV0010496 10/05/2020 PP ADV FEE 760-00-5110 14,102,69 Vendor LPL FINANCIAL Total: 14,102,69 9/30/2020 2:25:01 PM Expense Approval Register Packet: APPKT01928-10-5-20 AP CKS Vendor Name Payable Number Vendor: MCANDREWS PC, THE LAW OFFICE OF PATRICK MCANDREWS PC,THE LAW INV0010497 Vendor: MCHENRY HEATING & AIR INC MCHENRY HEATING&AIR INC 5-65338 Vendor: NORTHWEST LAMINATION NORTHWEST LAMINATION 590360 Vendor: NUTOYS LEISURE PRODUCTS NUTOYS LEISURE PRODUCTS 50615 Vendor: PITNEY BOWES INC PITNEY BOWES INC 1016382934 Vendor: SEMROW 1R, HARRY H SEMROW 1R, HARRY H INV0010498 SEMROW JR. HARRY H INV0010498 Vendor: SYNCB/AMAZON SYNCB/AMAZON 12319/10/20 SYNCB/AMAZON 12319/10/20 SYNCB/AMAZON 78809/10/20 SYNCB/AMAZON 78809/10/20 SYNCB/AMAZON 78809/10/20 SYNCB/AMAZON 78809/10/20 SYNCB/AMAZON INV0010499 SYNCB/AMAZON INV0010499 SYNCB/AMAZON INV0010499 SYNCB/AMAZON INV0010499 Vendor: US BANK EQUIPMENT FINANCE US BANK EQUIPMENT FINANCE 42427.1704 Vendor: VARVIL, SHANE VARVIL, SHANE 276988 Post Date Description (item) Account Number Amount 30/05/2020 SEPT 2020 TRAFFIC COURT 100-01-5230 4,000.00 Vendor MCANDREWS PC, THE LAW OFFICE OF PATRICK Total: 4,000.00 10/05/2020 55688 100-01-8200 20,000,00 Vendor MCHENRY HEATING & AIR INC Total: 20,000.00 10/05/2020 COUNTERTOPS 100-01-8200 2,600.00 Vendor NORTHWEST LAMINATION Total: 20600,00 10/05/2020 BENCHES, PLAQUES 290-00-5110 7,860.00 Vendor NUTOYS LEISURE PRODUCTS Total: 7,860.00 10/05/2020 DM POSTAGE METER 100-04-5310 463,73 Vendor PITNEY BO W ES INC Total: 463,73 10/05/2020 AUG 2020 100-03-5110 108,75 10/OS/2020 AUG 2020 100-22-5110 978.75 Vendor SEMRO W 1R, HARRY H Total: 1,087.50 10/05/2020 MTHLY PD 100-22-6210 245,22 10J05/2020 MTHLY PD 100-23-6210 23,98 30/05/2020 MONTHLY 100-03-6110 237.27 1OJ05/2020 MONTHLY 100-45-6110 31.56 1OJ05/2020 MONTHLY 100-46-6110 259,85 1OJ05/2020 MONTHLY 400-00-6110 115.07 1OJ05/2020 MTH LY 100-03-6110 237,27 10{05/2020 MTH LY 100-45-6110 31.56 10/05/2020 MTH LY 100-46-6110 259,85 30/05/2020 MTH LY 400-00-6110 115,07 Vendor SYNCB/AMAZON Total: 1,556.70 10/05/2020 PW RICOH 620-00-6210 336,21 Vendor US BANK EQUIPMENT FINANCE Total: 336,21 1OJ05/2020 SST PLACE FINISH 100-41-3637 175.00 Vendor VARVIL, SHANE Total: 175,00 Grand Total: 67,232.42 9/30/2020 2:25;01 PM Expense Approval Register Packet APPKT01928-10-5-20 AP CKS Fund Summary Fund S00-GENERAL FUND 225 - ALARM BOARD FUND 270 - MOTOR FUEL TAX FUND 290-TIF FUND 400- RECREATION CENTER FUND 510- WATER/SEWER FUND 600- EMPLOYEE INSURANCE FUND 610- RISK MANAGEMENT FUND 620- INFORMATION TECHNOLOGY FUND 760- POLICE PENSION FUND Grand Total: Expense Amount 33,229.05 195,00 11586,25 7,860,00 230,14 11213,00 72,00 4,713,08 336.21 17,797.69 67,232.42 mi? McHenry, IL clrury Vendor Name Payable Number Vendor: 41MPRINT INC 41MPRINTINC 20220879 Vendor: A -ABLE ALARM SERVICE INC A -ABLE ALARM SERVICE INC 67234 Vendor: ADAMS STEEL SERVICE & SUPPLY, INC ADAMS STEELSERVICE& 365010 Vendor: ADVANCED WEIGHING SYSTEMS INC ADVANCED WEIGHING 28605 Vendor: ALL MARINE SERVICES INC ALL MARINE SERVICES INC 11050 Vendor: ALLDATA ALLDATA 2005910982 Vendor: ARAMARK ARAMARK 22764976 Vendor: AT&T LONG DISTANCE AT&T LONG DISTANCE 5308 9/6/20 Vendor, AT&T AT&T 9 615 9/19/20 AT&T 9fi629/11/20 Vendor: AUTOMOTIVE LIFT CONSULTANT AUTOMOTIVE LIFT 199 Vendor: BATTERIES PLUS Jf456 BATTERIES PLUS 1i456 P31323279 Vendor: BENCE, JENNIFER BENCE, JENNIFER 1220-392 Vendor: BUCK BROS INC BUCK BROS INC 274513 Vendor: BUDDYZ BUDDYZ 1220-405NT Expense Approval Register #2 List of Bills Council Meeting 10-5-2020 Post Date Description (Item) Account Number Amount 10/OS/2020 PUBLIC RELATIONS STICKERS 100-22-6210 156.19 Vendor 41MPRINT INC Total: 156.19 10/05/2020 West Campus MMAC Keys 100-47-6110 35,92 Vendor A -ABLE ALARM SERVICE INCTotal: 35,92 30/05/2020 streets 100-33-5370 93,00 Vendor ADAMS STEEL SERVICE & SUPPLY, INC Total: 93,00 10 f05/2020 RE-CERET WHEEL LOAD SCALE 100-22-5110 100,00 Vendor ADVANCED WEIGHING SYSTEMS INC Total: 100,00 SO/05/2020 Boat docks for the All Marine 280-41-8800 22,174,00 Vendor ALL MARINE SERVICES INC Total: 22,174,00 10/05/2020 PW Mechanics Software- 620-00-5110 1,500.00 Vendor ALLDATA Total: 1,500,00 10/OS/2020 uniform Scheel 510-31-4510 151,85 Vendor ARAMARK Total: 151,85 10/05/2020 AT&T Long Distance 620-00-5320 1.80 Vendor AT&T LONG DISTANCE Total: 1,80 10/05/2020 AT&T Fiber Internet 100M 620-00-5110 1,129,25 10/05/2020 Voice Over lP -IP-Flex 620-00-5320 368,77 Vendor AT&T Total: 11498,02 10/05/2020 mechanic lift inspections 100-33-5115 150,00 Vendor AUTOMOTIVE LIFT CONSULTANT Total: 350100 10/05/2020 SLA12-8F2 UPS Replacement 620-00-6110 351.20 Vendor BATTERIES PLUS U456 Total: 351,20 10/05/2020 Cent -Cupcake Club 100-46-5110 80,00 Vendor BENCE, JENNIFER Total: 80,00 10/05/2020 Sewer Div, Gator-Front CV 510-32-5370 85,16 Vendor BUCK BROS INC Total: 85.16 10/O5/2020 Staff Appreciation for Summer 100-42-6110 129.21 Vendor: BUSS FORD SALES BUSS FORD SALES 5038951 10/OS/2020 317 642.63 357.03 348.36 502.53 12.03 9/30/2020 2;36;21 PM Expense Approval Register Vendor Name Payable Number BUSS FORD SALES 6067199 Vendor: CABAY & COMPANY INC CABAY &COMPANY INC 63221 CABAY & COMPANY INC 63245 CABAY & COMPANY INC 63251 CABAY & COMPANY INC 63318 CABAY & COMPANY INC 63319 CABAY & COMPANY INC 63358 Vendor: CAREY ELECTRIC CAREY ELECTRIC 8-31-2020 Vendor: COW GOVERNMENT INC COW GOVERNMENT INC 1832211 Vendor: COMCAST CABLE COMCASTCABLE OS959/20/2020 Vendor: CONSERV FS CONSERV FS 6SIO3904 Vendor: CORKSCRE W GYMNASTICS &SPORTS ACADEMY CORKSCREW GYMNASTICS& 732 Vendor: CURRAN CONTRACTING COMPANY CURRAN CONTRACTING 20216 CURRAN CONTRACTING 20234A CURRAN CONTRACTING 20234 Vendor: DREISILKER ELECTRIC MOTORS INC DREISILKER ELECTRIC MOTORS 1164950 Vendor: EeY GRAPHICS INC EBY GRAPHICS INC 6907 Vendor: ED'S RENTAL &SALES INC ED'S RENTAL&SALES INC 306125-1 Vendor: FISCHER RROS FRESH FISCHER BROS FRESH 14339 FISCHER BROS FRESH 14416 Vendor: FRONTLINE TECHNOLOGIES GROUP LLC FRONTLINE TECHNOLOGIES INVU5127710 Vendor: GALLS LLC GALLS LLC GAL S LLC GALLS LLC GALLS LLC GALLS LLC GALLS LLC GALLS LLC GALLS LLC GALLS LLC 016192453 016466972 016466973 016466987 016466991 016467065 016467083 016468532 016473572 Packet: APPKT01932-RECr INVOICE 10-5-20 Post Date Description (Item) Account Number Amount 10/05/2020 431 100-33-5370 1,091.92 Vendor BUSS FORD SALES Total: 2,954.50 10/05/2020 Cleaning Products -Rec Center 400-00-6111 421,79 30/05/2020 PPE 100-45-6110 345,92 30J05/2020 KLEENEX/SOAP/PAPER TOWELS 100-03-5120 269,27 10{05/2020 ALCOHOLWIPES 100-03-5120 4j200,OO SO/05/2020 Cleaning and Disinfecting 400-00-6111 660,00 70/05/2020 Cleaning Supplies 100-33-6115 496,04 Vendor CABAY & COMPANY INCTotai: 6,392.92 10 fO5/2020 Miller Point boat rental 400-00-8800 %840.00 Vendor CAREY ELECTRICTotak 9,840.00 10J05/2020 DYMO Labels 620-00-6210 28.99 Vendor CDW GOVERNMENT INCTotai: 28,99 10/05/2020 Lakeland Park Community 620-00-5110 158,45 Vendor COMCAST CABLE Total: 158.45 SO/05/2020 Landscape Supplies 100-45-6110 211,66 Vendor CONSERV FSTotal: 211.66 10tO5/2020 Fall Invoice 732 100-47-5110 100.00 Vendor CORKSCREW GYMNASTICS & SPORTS ACADEMY Total: 100,00 10/05/2020 N50 Surface - STS - U45159 100-33-6110 20,47 SO/05/2020 N50 Surface - STS - 045182 100-33-6110 16,02 10/05/2020 Commercial Surface -STS- 100-33-6110 179,78 Vendor CURRAN CONTRACTING COMPANY Total: 216.27 30/05/2020 Doolin Lift -Pump Repair 510-32-5380 1,080.00 Vendor DREISILKER ELECTRIC MOTORS INCTotai: 1,080.00 10/05/2020 decals 100-33-5370 155.14 Vendor EBY GRAPHICS INC Total: 355,14 10/OS/2020 Equipment Rental 100-45-6110 390,00 Vendor ED'S RENTAL & SALES INCTotai: 390,00 10/05/2020 Ready Mix -UTY 1114339 510-35-6110 498,50 10/05/2020 Ready Mix - CITY - 14416 510-35-6110 839,75 Vendor FISCHER BROS FRESH Total: 1,338,25 10/05/2020 FIR Application Tracking 620-00-5110 2,633.99 Vendor FRONTLINE TECHNOLOGIES GROUP LLCTotal: 21633,99 10/05/2020 UNIFORM ORDER-JOSEPH 100-23-4510 52,97 10/05/2020 UNIFORM ORDER -P. PRATHER 100-22-4510 53,45 30/05/2020 UNIFORM ORDER - FISHER 100-22-4510 48,35 10/05/2020 UNIFORM ORDER - HUBBARD 100-23-6110 125,00 10/O5/2020 UNIFORM ORDER - VOELKER 100-22-4510 146.55 10/05/2020 UNIFORM ORDER - MORALES 100-22-4510 185.50 10(05/2020 UNIFORM ORDER -BIRK 100-22-4510 172.80 10/05/2020 UNIFORM ORDER -SEXTON 100-22-4510 30,25 10/O5/2020 UNIFORM ORDER -PENA 100-22-4510 135,00 9/30/2020 2:36:21 PM Expense Approval Register Packet: APPKT01932 - RECF INVOICE 10-5-20 Vendor Name Payable Number Post Date Description (item) Account Number Amount GALLS LLC 016504796 10/05/2020 UNIFORM ORDER -SEXTON 100-22-4510 71.26 GALLS LLC 016504805 10/05/2020 UNIFORM ORDER - KIRK 100-22-4510 71.01 GALLS LLC 01GS55883 10/05/2020 REUSABLE MASKS 100-22-4510 15.10 Vendor GALLS LLC Total: 1,107.24 Vendor: GOODMARK NURSERIES LLC GOODMARK NURSERIES LLC 24767 10/05/2020 Landscape Supplies 100-45-6110 510,00 Vendor GOODMARK NURSERIES LLC Total: 510,Oo Vendor: GRAINGER GRAINGER 9644703283 10/05/2020 Digital Sound Level Meter- 510-35-6110 107,52 Vendor GRAINGER Total: 107,52 Vendor: HARM'S FARM HARM'S FARM 289565 10/05/2020 Fall Decorations 100-45-6110 56.00 HARM'S FARM 289576 10/05/2020 Fall Decorations 100-45-6110 32,26 Vendor HARM'S FARM Total: 88,26 Vendor: HAWKINS INC HAWKINS INC 4763164 10/05/2020 chemicals 510-31-6110 41626,20 HAWKINS INC 4794789 10/05/2020 Chemical Delivery 510-32-6110 4,912.52 Vendor HAWKINS INCTotal: 91538*72 Vendor: HEARTLAND BUSINESS SYSTEMS, LLC HEARTLAND BUSINESS 396456-H 10/05/2020 Microsoft Monthly M365 620-00-5110 3195438 HEARTLAND BUSINESS 397270-H 10/05/2020 MSP Network Service Flex 620-00-5110 2,000.00 HEARTLAND BUSINESS 397442-H 10/05/2020 Microsoft Visio License Plan 2 620-00-5110 13,75 Vendor HEARTLAND BUSINESS SYSTEMS, LLCTotah 5,968.13 Vendor: ILLINOIS DEPT OFAGRICULTURE ILLINOIS DEPT OF 7N002352 10/05/2020 RE -CERTIFICATION SCALES 100-22-5110 400,00 Vendor ILLINOIS DEPT OF AGRICULTURE Total: 400,00 Vendor: IN -PIPE TECHNOLOGY COMPANY INC IN -PIPE TECHNOLOGY 1789 10/05/2020 Monthly service fee 510-32-5110 7,750.00 Vendor IN -PIPE TECHNOLOGY COMPANY INC Total: 7,750.00 Vendor: INTERSTATE ALL BATTERY CENTER INTERSTATE ALL BATTERY 1903701040503 10/05/2020 battery plc plant 2 510-31-6110 29,80 Vendor INTERSTATE ALL BATTERY CENTER Total: 29,80 Vendor: INTERSTATE BILLING SERVICE INC INTERSTATE BILLING SERVICE 3020739305 10/05/2020 403 100-33-5370 281.74 Vendor INTERSTATE BILLING SERVICE INCTotal: 281,74 Vendor: ISAW WA ISAW WA 200056456 10/05/2020 water class Ben 510-31-5430 137,00 Vendor ISAW WA Total: 137,00 Vendor: JENSEN, TED JENSEN,TED 03717 10/05/2020 SWWTP-Clarifierd2-Water inlet 510-32-5375 223,93 Vendor JENSEN, TED Total: 223,93 Vendor: lG UNIFORMS INC JG UNIFORMS INC 75231 10/05/2020 UNIFORM ORDER-MCKEEN 100-22-4510 42,50 Vendor JG UNIFORMS INCTotal: 42,50 Vendor: KIMBALLMIDWEST KIMBALLMIDWEST 8229769 10/05/2020 kimball stock 100-33-5370 454.92 KIMBALLMIDWEST 8248753 10/05/2020 kimball stock 100-33-5370 420.03 Vendor KIMBALL MIDWESTTotal: 874,95 Vendor: KOMLINE-SANDERSON KOMLINE-SANDERSON 42047824 10/05/2020 2 meter BFP Gearbox seals 510-32-5375 109.76 Vendor KOMLINE-SANDERSON Total: 109,76 Vendor: LIFEGUARD STORE INC, THE LIFEGUARD STORE INC, THE INV000999984 10/05/2020 Swim Team Equipment Parent 100-47-6110 1,755.25 Vendor LIFEGUARD STORE INC, THE Total: 1,755,25 9/30/2020 2:36:21 PM Expense Approval Register Packet APPK701932 - RECT INVOICE 30-5-20 Vendor Name Payable Number Post Date Description (Item) Account Number Amount Vendor: LOU'S GLOVES, INC LOITS GLOVES, INC 037504 10/05/2020 Gloves 510-32-6110 358,00 Vendor LOU'S GLOVES, INCTotal: 358,00 Vendor: MCHENRY PIERS MCHENRY PIERS 13193 10/05/2020 Mounting posts for fire globes 100-45-5110 1,065.00 Vendor MCHENRY PIERSTotah 1,065.00 Vendor: MEADE INC MEADE INC 693164 10/05/2020 Traffic Signals Repair 0693164 100-33-5110 727,85 MEADE INC 693165 10/05/2020 Traffic Signal Locate 4693165 100-33-5110 88,06 Vendor MEADE INCTotal: 815,91 Vendor: MENDEZ LANDSCAPING & BRICK PAVERS INC MENDEZ LANDSCAPING& 8980 10/05/2020 CITY HALLGROUND 100-03-5120 360.00 MENDEZ LANDSCAPING & 8988 10/05/2020 Contractual Landscaping 100-45-5110 300.00 MENDEZ LANDSCAPING& 9007 10/05/2020 Contractual Landscaping 100-45-5110 800,00 MENDEZ LANDSCAPING & 9092 10/05/2020 Contractual Landscaping 100-45-5110 300,00 Vendor MENDEZ LANDSCAPING & BRICK PAVERS INCTotal: 11760,00 Vendor: MIDWEST METER INC MIDWEST METER INC 0122734-IN 10/05/2020 water meters 510-31-6110 1,321.85 Vendor MIDWEST METER INCTotal: 11321,85 Vendor: MINUTEMAN PRESS OF MCH MINUTEMAN PRESS OF MCH 94667 10/05/2020 Signage 100-45-6110 69.00 Vendor MINUTEMAN PRESS OF MCH Total: 6900 Vendor: NORTH EAST MULTI -REGIONAL TRAINING INC NORTHEAST MULTI -REGIONAL 274596 10/05/2020 K9 CADAVER TRAINING 100-22-5430 375,00 NORTHEAST MULTI -REGIONAL 275188 10/05/2020 POLICE CYCLIST CLASS-CAREY 100-22-5430 175,00 Vendor NORTHEAST MULTI -REGIONAL TRAINING INC Total: 550,00 Vendor: NORTHWEST ELECTRICAL SUPPLY CO INC NORTHWEST ELECTRICAL 17476717 10/05/2020 Electrical Supplies 100-45-6110 120.00 NORTHWEST ELECTRICAL 17477470 10/05/2020 Electrical Supplies 100-45-6110 62.65 Vendor NORTHWEST ELECTRICAL SUPPLY CO INCTotal: 182,65 Vendor: NORTHWEST TRUCKS INC NORTHWESTTRUCKS INC X101011058;01 10/05/2020 817 510-35-5370 211,50 Vendor NORTH WEST TRUCKS INCTotal: 211,S0 Vendor: NORTHWESTERN MEDICINE OCC HEALTH NORTHWESTERN MEDICINE 501337A 10/05/2020 New Hires& Randoms N501337100-05-5110 562,00 NORTHWESTERN MEDICINE 501337 10/05/2020 Ellis, Rewiako (Post Accident) 610-00-6940 165,00 Vendor NORTHWESTERN MEDICINE OCC HEALTH Total: 727,00 Vendor: OFFICIAL FINDERS LLC OFFICIAL FINDERS LLC 2724 10/05/2020 Invoice 2724 Softball 100-47-5110 292.60 Vendor OFFICIAL FINDERS LLCTotal: 292,60 Vendor: OLSEN SAFETY EQUIPMENT CORP OLSEN SAFETY EQUIPMENT WTRSS1028 10/05/2020 water tower climbing gear 510-31-6110 21781,50 OLSEN SAFETY EQUIPMENT VVTRSS1038 10/05/2020 arc flash safety equipment 510-31-6270 456.00 Vendor OLSEN SAFETY EQUIPMENT CORP Total: 31237,50 Vendor: OTTER SALES & SERVICE INC OTTER SALES & SERVICE INC BUR-1027878 10/05/2020 449 100-33-5370 2114737 Vendor OTTER SALES & SERVICE INC Total: 2,147.37 Vendor: PETROCHOICE LLC PETROCHOICE LLC 50324704 10/05/2020 FUEL BILL 100-03-6250 128.21 PETROCHOICE LLC 50336710 10/05/2020 Fuel - UTY - 50336710 510-35-6250 530.36 PETROCHOICE LLC 5033672S 10/05/2020 Fuel - WW - 50336725 510-32-6250 620,94 PETROCHOICE LLC S0336726 10/05/2020 Fuel - WTR - 50336726 510-31-6250 151,32 PETROCHOICE LLC 50336727 10/05/2020 Fuei N50336727 100-45-6250 364,25 PETROCHOICE LLC S0336728 10/05/2020 Fuel - STS - S0336728 100-33-6250 562,66 PETROCHOICE LLC 50336729 10/05/2020 FUEL50336729 100-22-6250 21626,87 Vendor PETROCHOICE LLC Total: 41984,61 9/30/2020 2:36:21 PM Expense Approval Register Packet: APPKT01932 - RECT INVOICE 10-5-20 Vendor Name Payable Number Post Date Description (item) Account Number Amount Vendor: PH&S PRODUCTS PH&S PRODUCTS 0013644-IN 10/05/2020 EVIDENCE SUPPLIES 100-22-6210 220,00 Vendor PH&S PRODUCTS Total: 220,00 Vendor: PROSHRED SECURITY PROSHRED SECURITY 990066032 10/05/2020 MONTHLYSHRED 100-22-5110 403.00 Vendor PROSHRED SECURITY Total: 403,00 Vendor: RADAR MAN INC RADAR MAN INC 4786 10/05/2020 RADAR REPAIR 100-22-6110 297,50 Vendor RADAR MAN INCTotal: 297,50 Vendor: SCHOPEN PEST SOLUTIONS INC SCHOPEN PEST SOLUTIONS INC 3406 10/05/2020 Pest Control 400-00-5110 70,00 Vendor SCHOPEN PEST SOLUTIONS INC Total: 70,00 Vendor: TKB ASSOCIATES, INC TKB ASSOCIATES, INC 14070 10/05/2020 Service Block of Hours (x10) 620-00-5110 11575,00 Vendor TKB ASSOCIATES, INC Total: 1,575,00 Vendor: TOPS IN DOG TRAINING CORP TOPS IN DOG TRAINING CORP 22759 10/05/2020 K93OARDING/FOOD 100-22-6310 247,00 Vendor TOPS IN DOG TRAINING CORP Total: 247,06 Vendor: TREDROC TIRE/ANTIOCH 002 TREDROC TIRE/ANTIOCH 002 7020038178 10/05/2020 flat tires 510-32-5370 572,00 TREDROC TIRE/ANTIOCH 002 7020038195 10/05/2020 817 510-35-5370 2,191.19 Vendor TREDROC TIRE/ANTIOCH 002 Total: 21763,19 Vendor: ULTRA STROBE COMMUNICATIONS INC ULTRA STROBE 077884 10/05/2020 INSTALL GUN LOCK N327 100-22-5370 80.00 Vendor ULTRA STROBE COMMUNICATIONS INC Total: 80,00 Vendor: VISION FOR CHANGE LLC VISION FOR CHANGE LLC 09232007 10/05/2020 CIT CONCEPTS FOR 911 100-23-5430 198,00 Vendor VISION FOR CHANGE LLCTotal: 198,00 Vendor: WELCH BROS INC WELCH BROS INC 3103991 10/05/2020 COVID- Barrier Rentals 8/19- 100-33-6110 350.00 Vendor WELCH BROS INCTotal: 350,00 Vendor: WORKPLACE SOLUTIONS WORKPLACE SOLUTIONS INV20868 10/05/2020 EAP Services 9/1/20-9/30/20 100-05-5110 450.42 Vendor WORKPLACE SOLUTIONS Total: 450,42 Grand Total: 105,308.42 9/30/2020 2:36:21 PM Expense Approval Register Packet: APPKT01932 - RECF INVOICE 10-5-20 Fund Summary Fund S00-GENERAL FUND 280- DEVELOPER DONATION FUND 400 - RECREATION CENTER FUND 510 - WATER/SEWER FUND 610 - RISK MANAGEMENT FUND 620 - INFORMATION TECHNOLOGY FUND Grand To[ai: Expense Amount 28,515.40 22,174.00 101991,79 29,746.65 165.00 13,715,58 105/308.42 City of McHenry 333 S Green Street war 1.1144— .e...... 1 McHenry, Illinois 60050 Phone: (815) 363-2100 c Fax: (815) 363-2119 J// www.ccityofmchenry.orgmcHenrREGULARAGENDAITEM DATE: October 5, 2020 TO:City Council FROM: Monte Johnson RE:Don's Subs Video Gaming License Application AGENDA ITEM SUMMARY: Don's Subs applied for and received a liquor license on October 7, 2019. They also applied for video gaming at that same meeting, but they were denied. Per discussion at the meeting, they were advised to wait one year and they could come back to Council to reapply. I have attached the portion of the minutes from that meeting on the subject. Please note that there is an error in the motion and the voting in the minutes that was only identified in researching this topic. This is how the motion and voting should read: A motion was made by Alderman Schaefer and seconded by Alderman Glab to deny a video gaming license to Don's Subs. Roll Call: Vote: 6-ayes: Alderman Schaefer, Alderman Glab, Alderman Santi, Alderman Mihevc, Alderwoman Miller, Alderwoman Baehne. 1-nay: Alderman Devine. Motion carried." The minutes stated: "Motion denied". However, the video gaming was denied, not the motion. There was also an error in recording the votes for the liquor license. There were 6 ayes and 1 nay. Alderman Glab was the nay, but he is listed with the ayes. If you have any questions regarding any of the discussion regarding video gaming, please let me know, and I can get you the audio file from that meeting. The item was discussed on the recording from 13:21 through 21:50. In considering the request from Don's Subs, a motion to approve or deny a Video Gaming License to Don's Subs located at 323 Front Street can be made for consideration. The City of McHenry is dedicated to providing its citizens,businesses,and visitors with the highest quality ofprograms and services in a customer-oriented,efficient,and fiscally responsible manner. License#VG- Terminals: Terminal Fee: Terminal Operator Fee: Date: McHenr Check: Oi INC«.Y RIVlR Cash: City of McHenry Video Gaming License Application Annual License Term May 15t through April 30th Attach Copy of Valid Illinois Gaming Board License to Application Annual license fee payable to the city for a licensed private business shall be $1000 for each video gaming establishment and $1000 for each video gaming terminal. Fees for non-for-profit establishments shall be $250 for the annual video gaming establishment and $250 for each video gaming terminal. The applicant shall obtain a state license and exhibit proof of said license. 1. Applicant's Corporate Name: Oil ,c1,1. 65 LLC 2. Business Street Address: - y-T3 rn"-- n (Li/1— 3. Business Telephone Number: 3Sa 000 Email Address: \ ) 4. Number of Video Gaming Terminals to be operated: (maximum 5) 5. Name, business address,telephone number,and en it address for your Termi al Operator: —1)(3 tNS -S 9)S 3') -Biro Y1r' la-D-OS) 6. Have you ma elication for a similar license for premises other than described in this location? If so, provide date, location of premises and disposition of application 7. Has NO license previously issued to you by State, Federal, or local authorities been revoked? No r/V O Yes If you answered yes,state reasons and date of revocation(s) The undersigns affi ms th s ments contained in this application are true and correct. Signed:Title:Ps t '1 Print Name: a 11 V Rev:2/2017 Return to: mjohnson@cityofmchenry.org City of McHenry Council Meeting Minutes 10.7.19 business even if he did not get liquor license or gaming licenses. Other discussion continued as Alderwoman Baehne asked how the seating would be and what kind of tables they would provide. Alderman Glab asked the owner if he had much experience in the restaurant field, applicant did have a bar in FL. Alderman Schaefer asked to confirm some incomplete answers on the applications such as what type of establishment should have been checked on the application, it was confirmed by the applicant that restaurant should have been selected. Also, on page 3 confirming that will they not sell to underage or intoxicated persons at the establishment, which was missed on the application as well, this too was confirmed by the applicant as an important guideline that they would most certainly follow. A motion was made by Alderman Schaefer and seconded by Alderwoman Miller to approve individual agenda items as presented. Roll Call: Vote: 6-ayes: Alderman Santi, Alderman Schaefer, Alderman Glab, Alderwoman Baehne, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 1-nays, 0-abstained. Motion carried. B. Motion to approve or deny a Video Gaming License to Don's Subs at 323 Front Street, McHenry, contingent on the action taken on Agenda Item A. Council talked about their opinion of gaming and also that the applicant could come back after one year of the business being open to get approval later on for the gaming. The Council expressed that there were concerns that the business could become less of a restaurant and more for the gaming. Council would like to be more specific regarding gaming establishments in the city of McHenry at this time, there are many gaming facilities present in the town. A motion was made by Alderman Santi and seconded by Alderwoman Miller to approve Individual Agenda items as presented. Roll Call: Vote: 2-ayes: Alderman Santi, Alderman Schaefer, Alderman Glab, Alderwoman Baehne, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 5-nays, 0-abstained. Motion denied. C. Motion to approve the following pertaining to the Public Use of Cannabis: a, An Ordinance amending Chapter 23: Taxation of the City of McHenry Municipal Code Municipal Cannabis Retailers' Occupation Tax; b. An Ordinance amending Chapter 14: Drug Paraphernalia; Possession of Cannabis; and, c. An Ordinance approving text amendments to the Zoning Ordinance to Article III: General District Regulations, Article V: Commercial Districts, Article VI: Office, Industrial, Business Park, Agricultural and Mining Overlay and Health Care Districts, Article VII: Off-Street Parking and Loading, and Article XIX: Definitions Pertaining to Adult Use Cannabis. 2 ti].....) Office of Finance &Accounting sow a%Carolyn Lynch, Director McHenry Municipal Center 333 Green Street McHenry, Illinois 60050 Phone: (815) 363-2100McHenrFax: (815) 363-2119 www.ci.mchenry.il.us REGULAR AGENDA SUPPLEMENT DATE: October 5, 2020 TO: Mayor and City Council FROM: Carolyn Lynch, Finance Director RE: To approve a bond parameters ordinance providing for the issuance of not to exceed $29,000,000 Taxable General Obligation Bonds (Series 2020B). ATTACHMENTS: Bond Parameters Ordinance Pension Obligation Bonds Savings Projections Estimated Unfunded Actuarial Accrued Liability Projections AGENDA ITEM SUMMARY: Staff was made aware of Pension Obligation Bonds and the potential savings they can provide back in October, 2019. After considerable research by the Staff, Police Pension Board, and their advisors,the item was brought before Council for discussion and input in September 2020. Based on input from Council this item is now being brought forward for consideration and action on a parameters ordinance providing for the issuance of, not to exceed, $29 Million Taxable General Obligation Bonds (series 2020B). BACKGROUND INFORMATION: Under current state law, the City is required to have its police pension funded at the 90% level by the year 2040. As of August 31, 2020 the City's actuary, Lauterbach & Amen, estimates the unfunded liability (UAAL) in the Police Pension Fund is approximately $23.8 million. The UAAL will be updated again around pricing of the bonds to issue the correct par value of bonds to be able to get as close as possible to 100% funding by the identified date. The Police Pension Plan funded ratios as of April 30, 2020 was 50.75%. Currently, the City is paying 7% interest on its Police Pension liabilities. The City began looking into funding the UAAL with a Pension Obligation Bond (POB) starting in October, 2019. The president of the Police Pension Board became aware of the savings that could be realized by issuing these bonds due to the current market which is offering a unique opportunity to achieve historically low interest rates. Baird completed a pension bond analysis and presented it at a couple Police Pension Board meetings and a recommendation was made to present the opportunity to the City Council. Baird has updated the bond analysis and estimates the City can borrow at about 2.59% in the current taxable bond market. The City plans to apply bond proceeds to retire its Police Pension liabilities and expects to save approximately$16.7 million in interest cost over the next 19 years. These savings are estimated based on the City's Police pension plan actuarial assumptions and Baird's interest rate assumptions. As you recall, on September 8th, Baird gave a presentation on the potential risks and benefits of issuing the POBs. The majority of Council concurred with moving forward with the issuance of a parameters ordinance to issue these bonds. ANALYSIS: The potential benefits to the City from the POB are as follows: The bond could generate significant expected savings (approximately $16.7 million), assuming the investments realize the assumed actuarial rate of return of 7%. It will provide the City with flexibility to level off future year payments to more affordable levels. It lowers the "hurdle rate" on investments from the historical average investment rate of 7% to the POB cost of funds (estimated to be 2.59% in today's market). If the return on investments achieved by the pension plan during the life of the POB equals the bond cost of funds, the City would be at its point of indifference. The POB will immediately reduce or eliminate the current UAAL of the pension plan and assist the City in complying with State funding requirements (90%funded by 2040). And finally, the POB replaces one existing legal obligation with another, less costly liability. There are also risks to issuing a POB. The primary risk is that earnings on the POB proceeds will be less than the assumed 7.0% rate. The following table shows the result of the various earnings scenarios. Actual Earnings Achieved Result Above Actuarial Rate Savings Greater than Expected Actuarial Rate Expected Savings Received Below Actuarial Rate, but Above POB Rate Savings Less than Expected POB Rate No Savings Below POB Rate Loss In order to analyze this risk it is important to look at the Pension Funds historical returns to determine the likelihood of achieving the investment rate over the term of the POBs. Police Pension Plan's Average Returns 10 Year Average 7.34% 15 Year Average 6.05% 20 Year Average 5.90% If an assumption is made that the Police Pension Plan will earn the 20 year average rate of return of 5.9% the estimated savings on the POBs will still be approximately $12.03 million. It is the intention of the City to create a Budget Stabilization Fund which will be funded initially with not- to-exceed $1,000,000 in Bond proceeds that the City may utilize to offset short-term smoothed losses due to any investment performance below the actuarial rate of 7%. This stabilization fund can also be replenished in subsequent favorable years. Another risk in investing a large dollar amount all at once could result in adverse market timing. This risk could be mitigated upon the Consolidation of the Pension Fund as the City would be buying a pro-rata portion of a larger pool of investments, like IMRF. An additional risk is the POBs are "hard" liabilities while pension payments can sometimes be considered "soft liabilities. City staff has never felt that these are "soft" liabilities as State aid could be diverted to the Pension Plan if the State funding requirements are not met. One final risk is additional UAALs may arise as a result of such things as mortality, payroll, asset valuation method, benefit levels, investment rate, etc.; but these risks would be present whether the POBs are issued or not. RECOMMENDATION: If Council concurs, it is recommended that a motion be made to adopt a parameters ordinance providing for the issuance not to exceed $29 Million Taxable General Obligation Bonds (series 2020B), of the City for the purpose of funding all or a portion of the unfunded liability of the City's Police Pension Fund, a budget stabilization fund for such unfunded liability, the levy and collection of a direct annual tax for the payment of and interest on the bonds and the sale of the bonds to Robert W. Baird & Co. Incorporated. EXTRACT OF MINUTES of the regular public meeting of the City Council of the City of McHenry, McHenry County, Illinois, held in the Council Chambers at City Hall, located at 333 S. Green Street, in said City, at 7:00 p.m., on the 5th day of October, 2020. The Mayor called the meeting to order and directed the City Clerk to call the roll. Upon the roll being called, Wayne Jett,the Mayor, and the following Aldermen answered present at said location: 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 manner or to any extent whatsoever: The City Council then considered an ordinance providing for the issuance of not to exceed 29,000,000 Taxable General Obligation Bonds, Series 2020B, of the City, and providing for the levy and collection of a direct annual tax for the payment of the principal of and interest on said bonds. Thereupon, Alderman presented and there was placed before the Mayor and each Alderman and there was read into the record the following ordinance: ordinance-taxable pension bonds 4839-2778-3115 v2 2286011 AN ORDINANCE providing for the issuance of not to exceed 29,000,000 Taxable General Obligation Bonds, Series 2020B, of the City of McHenry, McHenry County, Illinois, for the purpose of funding all or a portion of the unfunded liability of said City's Police Pension Fund, a budget stabilization fund for such unfunded liability, the levy and collection of a direct annual tax for the payment of the principal of and interest on said bonds and the sale of said bonds to Robert W. Baird & Co. Incorporated. the "Bond Ordinance") which was before the City Council for a second reading. Alderman moved and Alderman seconded the motion that the Bond Ordinance as presented be adopted. A City Council discussion of the matter followed. During the City Council discussion, gave a public recital of the nature of the matter, which included a reading of the title of the ordinance and statements (1)that the ordinance provides for the issuance of general obligation bonds for the purpose of paying the costs of providing funding for certain underfunded liabilities of the City with respect to pension benefits for its police officers and the establishment of a budget stabilization fund for such underfunded liabilities, (2) that the Bonds are issuable without referendum pursuant to the home rule powers of the City, (3)that the Bond Ordinance provides for the levy of taxes to pay the Bonds, (4)that the Bond Ordinance authorizes the Mayor and the Treasurer to sell the bonds to Robert W. Baird & Co. Incorporated on certain terms and conditions (set forth in the Bond Ordinance) which must be met and that, upon the action of said officers, the bonds will be sold and delivered without further action of the City Council, and 5) that the Bond Ordinance provides many details for the Bonds, including provision for terms and form of the Bonds, and appropriations. The Mayor directed that the roll be called for a vote upon the motion to adopt the Bond Ordinance. Upon the roll being called, the following Aldermen voted AYE: 2- and the following Aldermen voted NAY: WHEREUPON,the Mayor declared the motion carried and the Bond Ordinance adopted,and did direct the City Clerk to record the same in full in the records of the City Council of the City of McHenry, McHenry County, Illinois. Other business was duly transacted at said meeting. Upon motion duly made and carried,the meeting adjourned. City Clerk 3- ORDINANCE NUMBER AN ORDINANCE providing for the issuance of not to exceed 29,000,000 Taxable General Obligation Bonds, Series 2020B, of the City of McHenry, McHenry County, Illinois, for the purpose of funding all or a portion of the unfunded liability of said City's Police Pension Fund, a budget stabilization fund for such unfunded liability, the levy and collection of a direct annual tax for the payment of the principal of and interest on said bonds and the sale of said bonds to Robert W. Baird& Co. Incorporated. Adopted by the City Council on the 5th day of October, 2020. TABLE OF CONTENTS SECTION HEADING PAGE PREAMBLES 1 SECTION 1. DEFINITIONS 2 SECTION 2. INCORPORATION OF PREAMBLES 5 SECTION 3. DETERMINATION TO ISSUE BONDS 5 SECTION 4. BOND DETAILS 5 SECTION 5. BOOK ENTRY PROVISIONS 6 SECTION 6. EXECUTION;AUTHENTICATION 8 SECTION 7. MANDATORY REDEMPTION 9 SECTION 8. TERM BONDS;MANDATORY REDEMPTION AND COVENANTS;EFFECT OF PURCHASE OR OPTIONAL REDEMPTION OF TERM BONDS 9 SECTION 9. OPTIONAL REDEMPTION 10 SECTION 10. REDEMPTION PROCEDURE 10 SECTION 11. REGISTRATION AND EXCHANGE OR TRANSFER OF BONDS;PERSONS TREATED AS OWNERS 14 SECTION 12. FORM OF BONDS 16 SECTION 13. SECURITY FOR THE BONDS 73 SECTION 14. TAX LEVY;ABATEMENTS 73 SECTION 15. FILING WITH COUNTY CLERK 75 SECTION 16. SALE OF BONDS; BOND ORDER; OFFICIAL STATEMENT 25 SECTION 17. CONTINUING DISCLOSURE UNDERTAKING 27 SECTION 18. CREATION OF FUNDS,ACCOUNTS AND APPROPRIATIONS; SPECIAL COVENANT REGARDING USE OF PROCEEDS 27 SECTION 19. BUDGET STABILIZATION FUND 79 SECTION 20. RIGHTS AND DUTIES OF BOND REGISTRAR 30 SECTION 21. DEFEASANCE 32 SECTION 22. MUNICIPAL BOND INSURANCE POLICY 32 SECTION 23. TAX STATUS OF BONDS 33 SECTION 24. SEVERABILITY 33 SECTION 25. SUPERSEDER AND EFFECTIVE DATE 34 LIST OF EXHIBITS: A-BOND ORDER B-BOND PURCHASE AGREEMENT C-CONTINUING DISCLOSURE UNDERTAKING 11- ORDINANCE NUMBER AN ORDINANCE providing for the issuance of not to exceed 29,000,000 Taxable General Obligation Bonds, Series 2020B, of the City of McHenry, McHenry County, Illinois, for the purpose of funding all or a portion of the unfunded liability of said City's Police Pension Fund, a budget stabilization fund for such unfunded liability, the levy and collection of a direct annual tax for the payment of the principal of and interest on said bonds and the sale of said bonds to Robert W. Baird & Co. Incorporated. PREAMBLES WHEREAS A. Pursuant to the provisions of Section 6 of Article VII of the Constitution of the State of Illinois, the City of McHenry, McHenry County, Illinois (the "City"), is a home rule unit and may exercise any power or perform any function pertaining to its government and affairs including, but not limited to, the power to tax and to incur debt. B. Pursuant to the provisions of said Section 6, the City has the power to incur debt payable from ad valorem property tax receipts or from any other lawful source and maturing within 40 years from the time it is incurred without prior referendum approval. C. The City's sworn police employees participate in the pension plan provided by the Police Pension Employees Retirement System (the "Pension Fund"), the same being a pension system established pursuant to Article 3 of the Illinois Pension Code, as amended (the "Pension Code"), which Pension Fund holds amounts deposited therewith, including investment earnings thereon, for the payment of the benefits earned by participants of the Pension Fund (the "Pension Liability"). D. Under the Pension Code, the City is obligated to pay to the Pension Fund the amounts by which the Pension Liability exceeds the assets on hand in the Pension Fund, the amount of said difference being referred to herein as the "UAAL". E. The City Council of the City (the "Corporate Authorities") hereby provides that the amount of the aggregate UAAL shall be determined prior to the issuance of the hereinafter defined Bonds by Lauterbach&Amen LLP, an independent accounting firm. F. The Corporate Authorities deem it advisable for the health, safety, welfare and convenience of the residents and taxpayers of the City to borrow not to exceed$29,000,000 at this time for the purpose of funding all or a portion of the UAAL (the "Pension Funding"), providing a budget stabilization fund for the Pension Liability (the "Budget Stabilization Fund") and paying expenses incidental thereto, including capitalized interest, which borrowing shall be evidenced by the issuance of taxable general obligation bonds of the City. Now THEREFORE Be It Ordained by the City Council of the City of McHenry, McHenry County, Illinois, in the exercise of its home rule powers, as follows: Section 1. Definitions. Words and terms used in this Ordinance shall have the meanings given them, unless the context or use clearly indicates another or different meaning is intended. Words and terms defined in the singular may be used in the plural and vice-versa. Reference to any gender shall be deemed to include the other and also inanimate persons, such as corporations, where applicable. A. The following words and terms are as defined in the preambles hereto. City Corporate Authorities Pension Code Pension Fund Pension Funding Pension Liability UAAL 2- B. The following words and terms are defined as set forth. Act"means the Illinois Municipal Code,as supplemented and amended;the Local Government Debt Reform Act, as amended; and also the home rule powers of the City under Section 6 of Article VII of the Illinois Constitution of 1970; and in the event of conflict between the provisions of the code and home rule powers, the home rule powers shall be deemed to supersede the provisions of the code. Bond Account" means the Bond Account established and defined in this Ordinance (Section 18). Bond Moneys"means the Pledged Taxes and any other moneys deposited into the Bond Account and investment income earned in the Bond Account. Bond Order" means the Bond Order as authorized to be executed by the Designated Officials of the City as provided in this Ordinance (Section 16), substantially in the form(with related certificates)as attached hereto as Exhibit A, and by which the final terms of the Bonds will be established. Bond Purchase Agreement" means the Bond Purchase Agreement, by and between the City and the Purchaser, as authorized to be executed by the Designated Officials of the City as provided in this Ordinance (Section 16), substantially in the form as attached hereto as Exhibit B. 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 The Bank of New York Mellon Trust Company,National Association, Chicago, Illinois, duly authorized to do business as a bond registrar and paying agent with the powers and duties as herein set forth, or a successor thereto or a successor designated as bond registrar and paying agent hereunder. 3- Bonds"means the not to exceed$29,000,000 Taxable General Obligation Bonds, Series 2020B, authorized to be issued by this Ordinance. Book Entry Form" means the form of the Bonds as fully registered and available in physical form only to the Depository. County" means The County of McHenry, Illinois. County Clerk" means the County Clerk of the County. Depository" means The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York, its successors, or a successor depository qualified to clear securities under applicable state and federal laws. Designated Officials"means the Mayor and the Treasurer of the City, or if either one of them shall be unavailable when called to act,the City Clerk, acting together. Municipal Bond Insurance Policy"means a policy or surety contract guaranteeing to the registered owners of Bonds the payment of the principal of and interest on the Bonds. Ordinance" means this Ordinance, numbered as set forth on the title page, and passed by the Corporate Authorities on the 5th day of October, 2020. Pledged Taxes"means the real property taxes levied to pay the bonds as described and levied in(Section 14) of this Ordinance. Purchaser" means the purchaser (underwriter) of the Bonds, namely, Robert W. Baird & Co. Incorporated,Naperville, Illinois. Record Date" means the 15th day of the month of any regular or other interest payment date occurring on the 30th day of any month and 15 days preceding any interest payment date occasioned by the redemption of Bonds on other than the first day of a month. Term Bonds" means Bonds subject to mandatory redemption by operation of the Bond Account and designated as term bonds herein. 4- C. Definitions also appear in the above preambles or in specific sections, as appearing below. The table of contents preceding and the headings in this Ordinance are for the convenience of the reader and are not a part of this Ordinance. Section 2. Incorporation of Preambles. The Corporate Authorities hereby find that all of the recitals contained in the preambles to this Ordinance are true, correct and complete and do 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 public health, safety, welfare and convenience to provide for the Pension Funding, to pay all necessary or advisable related costs, including an amount for capitalized interest on the Bonds, and to borrow money and issue the Bonds for the purpose of paying a part of such costs. It is hereby found and determined that such borrowing of money is for a proper public purpose or purposes and is in the public interest, and is authorized pursuant to the Act; and these findings and determinations shall be deemed conclusive. Section 4. Bond Details. There shall be issued and sold the Bonds in the aggregate principal amount of not to exceed $29,000,000. The Bonds shall each be designated "Taxable General Obligation Bond, Series 2020B" (or such other designation as set forth in the Bond Order);be dated as of the date of delivery as may be set forth in a Bond Order(the "Dated Date"); and shall also bear the date of authentication thereof The Bonds shall be fully registered and in Book Entry Form, shall be in denominations of$5,000 or integral multiples thereof(but no single Bond shall represent principal maturing on more than one date), shall be numbered consecutively in such fashion as shall be determined by the Bond Registrar, and shall mature serially or as Term Bonds on December 30 of the years and in the amounts and bearing interest at the rates percent per annum (subject to the right of prior redemption hereinafter stated) as shall be set forth in the Bond Order;provided, however, that (a)the maximum par amount of any maturity of the Bonds 5- shall not exceed $2,450,000, (b)the final maturity of the Bonds shall be not later than December 30, 2041, (c)the maximum interest rate on the Bonds shall not exceed six percent (6.00%) per annum,and(d)the maximum tax levy for the Bonds in any given year shall not exceed$2,600,000. Each Bond shall bear interest from the later of its Dated Date as defined 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 30 and December 30 of each year, commencing on the date as shall be provided in the Bond Order. Interest on each Bond shall be paid by check or draft of the Bond Registrar, payable upon presentation in lawful money of the United States of America, to the person in whose name such Bond is registered at the close of business on the applicable Record Date and mailed to the registered owner of the Bond as shown in the Bond Register or at such other address furnished in writing by such Registered Owner, or as otherwise may be agreed with the Depository. The principal of or redemption price due on the Bonds shall be payable in lawful money of the United States of America upon presentation at the office so maintained for such purpose in Chicago, Illinois, of the Bond Registrar, or at successor Bond Registrar or locality. Section 5. Book Entry Provisions. The Bonds shall be initially issued in the form of a separate single fully registered Bond for each of the maturities of the Bonds. Upon initial issuance, the ownership of each such Bond shall be registered in the Bond Register in the name of the Depository or a designee or nominee of the Depository (such depository or nominee being the Book Entry Owner"). Except as otherwise expressly provided, all of the outstanding Bonds from time to time shall be registered in the Bond Register in the name of the Book Entry Owner (and accordingly in Book Entry Form as such term is used in this Ordinance). Any City officer, as representative of the City, is hereby authorized, empowered, and directed to execute and deliver 6- or utilize a previously executed and delivered Representations Letter substantially in the form common in the municipal securities industry, or with such changes therein as the officer executing the Representations Letter on behalf of the City shall approve, his or her execution thereof to constitute conclusive evidence of approval of such changes, as shall be necessary to effectuate Book Entry Form. Without limiting the generality of the authority given with respect to entering into such Representations Letter, it may contain provisions relating to (a)payment procedures, b) transfers of the Bonds or of beneficial interests therein, (c) redemption notices and procedures unique to the Depository, (d) additional notices or communications,and(e) amendment from time to time to conform with changing customs and practices with respect to securities industry transfer and payment practices. With respect to Bonds registered in the Bond Register in the name of the Book Entry Owner, none of the City, its officers, or the Bond Registrar shall have any responsibility or obligation to any broker-dealer, bank, or other financial institution for which the Depository holds Bonds from time to time as securities depository(each such broker-dealer,bank, or other financial institution being referred to herein as a "Depository Participant") or to any person on behalf of whom such a Depository Participant holds an interest in the Bonds. Without limiting the meaning of the immediately preceding sentence, the City, its officers, and the Bond Registrar shall have no responsibility or obligation with respect to (a)the accuracy of the records of the Depository, the Book Entry Owner, or any Depository Participant with respect to any ownership interest in the Bonds, (b) the delivery to any Depository Participant or any other person, other than a registered owner of a Bond as shown in the Bond Register or as otherwise expressly provided in the Representations Letter, of any notice with respect to the Bonds, including any notice of redemption, or (c) the payment to any Depository Participant or any other person, other than a registered owner of a Bond as shown in the Bond Register, of any amount with respect to principal of or interest on the Bonds. No person other than a registered owner of a Bond as shown 7- in the Bond Register shall receive a Bond certificate with respect to any Bond. In the event that a)the City determines that the Depository is incapable of discharging its responsibilities described herein and in the Representations Letter, (b)the agreement among the City, the Bond Registrar, and the Depository evidenced by the Representations Letter shall be terminated for any reason, or c)the City determines that it is in the best interests of the City or of the beneficial owners of the Bonds either that they be able to obtain certificated Bonds or that another depository is preferable, the City shall notify the Depository and the Depository shall notify the Depository Participants of the availability of Bond certificates, and the Bonds shall no longer be restricted to being registered in the Bond Register in the name of the Book Entry Owner. Alternatively, at such time, the City may determine that the Bonds shall be registered in the name of and deposited with a successor depository operating a system accommodating Book Entry Form,as may be acceptable to the City, or such depository's agent or designee, but if the City does not select such alternate book entry system,then the Bonds shall be registered in whatever name or names registered owners of Bonds transferring or exchanging Bonds shall designate, in accordance with the provisions of this Ordinance. Section 6. Execution;Authentication. The Bonds shall be executed on behalf of the City by the manual or duly authorized facsimile signature of its Mayor and attested by the manual or duly authorized facsimile signature of its City Clerk,as they may determine,and shall be impressed or imprinted with the corporate seal or facsimile seal of the City. In case any such 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 provided, 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 8- 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. Section 7. Mandatory Redemption. As set forth in the Bond Order, Bonds may be designated Term Bonds under this Ordinance and become subject to mandatory redemption by operation of the Bond Account at a price of par and accrued interest, without premium, on December 30 of the years and in the amounts as so set forth in the Bond Order. Section 8. Term Bonds; Mandatory Redemption and Covenants; Effect of Purchase or Optional Redemption of Term Bonds. The City covenants that it will redeem Term Bonds pursuant to the mandatory redemption requirement for such Term Bonds. Proper provision for mandatory redemption having been made,the City covenants that the Term Bonds so selected for redemption shall be payable as at maturity. If the City redeems pursuant to optional redemption as provided for the Bonds or purchases Term Bonds of any maturity and cancels the same from Bond Moneys as hereinafter described,then an amount equal to the principal amount of Term Bonds so redeemed or purchased shall be deducted from the mandatory redemption requirements provided for Term Bonds of such maturity, first, in the current year of such requirement,until the requirement for the current year has been fully met, and then in any order of such Term Bonds as due at maturity or subject to mandatory redemption in any year, as the City shall determine. If the City redeems pursuant to optional redemption or purchases Term Bonds of any maturity and cancels the same from moneys other than Bond Moneys, then an amount equal to the principal amount of Term Bonds so redeemed or purchased shall be deducted from the amount of such Term Bonds as due at maturity or subject to mandatory redemption requirement in any year, as the City shall determine. 9- Section 9. Optional Redemption. As designated in the Bond Order,Bonds may be made subject to redemption prior to maturity at the option of the City,from any available funds,in whole or in part, on any date specified, and if in part, in any order of maturity (and, if applicable, in any order of mandatory redemption payments) as selected by the City, and if less than an entire maturity, in integral multiples of$5,000, selected by lot by the Bond Registrar, at the redemption price of not to exceed 102% of the principal amount redeemed plus accrued interest to the date fixed for redemption. Section 10. Redemption Procedure. The Bonds subject to redemption shall be identified, notice given, and paid and redeemed pursuant to the procedures as follows. A. Notice to Registrar. For a mandatory redemption,unless otherwise notified by the City, the Bond Registrar will proceed on behalf of the City as its agent to provide for the mandatory redemption of such Term Bonds without further order or direction hereunder or otherwise. For an optional redemption, the City shall, at least 45 days prior to a redemption date (unless a shorter time period shall be satisfactory to the Bond Registrar), notify the Bond Registrar of such redemption date and of the maturities and principal amounts of Bonds to be redeemed, and, if Term Bonds are to be redeemed, the application of the amount redeemed to the mandatory redemption schedule for such Term Bonds. B. Selection of Bonds within a Maturity. For purposes of any redemption of less than all of the Bonds of a single maturity,the particular Bonds or portions of Bonds to be redeemed shall be selected by lot by the Bond Registrar for the Bonds of such maturity by such method of lottery as the Bond Registrar shall deem fair and appropriate;provided, that such lottery shall provide for the selection for redemption of Bonds or portions thereof so that any $5,000 Bond or $5,000 portion of a Bond shall be as likely to be called for 10- redemption as any other such $5,000 Bond or $5,000 portion. The Bond Registrar shall make such selection upon the earlier of the irrevocable receipt of funds sufficient to pay the redemption price of the Bonds to be redeemed or the time of the giving of official notice of redemption. C. Official Notice of Redemption. The Bond Registrar shall promptly notify the City in writing of the Bonds or portions of Bonds selected for redemption and, in the case of any Bond selected for partial redemption, the principal amount thereof to be redeemed. Unless waived by the registered owner of Bonds to be redeemed, official notice of any such redemption shall be given by the Bond Registrar on behalf of the City by mailing the redemption notice by first class U.S. mail not less than 30 days and not more than 60 days prior to the date fixed for redemption to each registered owner of the Bond or Bonds to be redeemed at the address shown on the Bond Register or at such other address as is furnished in writing by such registered owner to the Bond Registrar. All official notices of redemption shall include the name of the Bonds and at least the information as follows: 1) the redemption date; 2) the redemption price; 3) if less than all of the outstanding Bonds of a particular maturity are to be redeemed, the identification (and, in the case of partial redemption of Bonds within such maturity, the respective principal amounts) of the Bonds to be redeemed; 4) a statement that on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for 11- redemption and that interest thereon shall cease to accrue from and after said date; and 5) the place where such Bonds are to be surrendered for payment of the redemption price,which place of payment shall be the designated office of the Bond Registrar maintained for that purpose. D. Conditional Redemption. Unless moneys sufficient to pay the redemption price of the Bonds to be redeemed shall have been received by the Bond Registrar prior to the giving of such notice of redemption, such notice may, at the option of the City, state that said redemption shall be conditional upon the receipt of such moneys by the Bond Registrar on or prior to the date fixed for redemption. If such moneys are not received, such notice shall be of no force and effect, the City shall not redeem such Bonds, and the Bond Registrar shall give notice, in the same manner in which the notice of redemption was given, that such moneys were not so received and that such Bonds will not be redeemed. E. Bonds Shall Become Due. Subject to the stated condition in paragraph (D) immediately preceding, official notice of redemption having been given as described, the Bonds or portions of Bonds so to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the City shall default in the payment of the redemption price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Bond Registrar at the redemption price. The procedure for the payment of interest due as part of the redemption price shall be as herein provided for payment of interest otherwise due. 12- F. Insufficiency in Notice Not Affecting Other Bonds; Failure to Receive Notice; Waiver. Neither the failure to mail such redemption notice, nor any defect in any notice so mailed, to any particular registered owner of a Bond, shall affect the sufficiency of such notice with respect to other registered owners. Notice having been properly given, failure of a registered owner of a Bond to receive such notice shall not be deemed to invali- date, limit or delay the effect of the notice or redemption action described in the notice. Such notice may be waived in writing by a registered owner of a Bond entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by registered owners shall be filed with the Bond Registrar, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In lieu of the foregoing official notice, so long as the Bonds are held in Book Entry Form, notice may be given as provided in the Representations Letter, and the giving of such notice shall constitute a waiver by the Depository and the Book Entry Owner, as registered owner, of the foregoing notice. G. New Bond in Amount Not Redeemed. Upon surrender for any partial redemption of any Bond, there shall be prepared for the registered owner a new Bond or Bonds of like tenor, of authorized denominations, of the same maturity, and bearing the same rate of interest in the amount of the unpaid principal. H. Effect of Nonpayment upon Redemption. If any Bond or portion of Bond called for redemption shall not be so paid upon surrender thereof for redemption, the principal shall, until paid or duly provided for, bear interest from the redemption date at the rate borne by the Bond or portion of Bond so called for redemption. I.Bonds to be Canceled; Payment to Identify Bonds. All Bonds which have been redeemed shall be canceled and destroyed by the Bond Registrar and shall not be 13- reissued. Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. J.Additional Notice. The City agrees to provide such additional notice of redemption as it may deem advisable at such time as it determines to redeem Bonds,taking into account any requirements or guidance of the Securities and Exchange Commission, the Municipal Securities Rulemaking Board, the Government Accounting Standards Board, or any other federal or state agency having jurisdiction or authority in such matters; provided, however, that such additional notice shall be (1) advisory in nature, (2) solely in the discretion of the City, (3) not be a condition precedent of a valid redemption or a part of the Bond contract,and(4)any failure or defect in such notice shall not delay or invalidate the redemption of Bonds for which proper official notice shall have been given. Reference is also made to the provisions of the Continuing Disclosure Undertaking of the City with respect to the Bonds, which may contain other provisions relating to notice of redemption of Bonds. Section 11. Registration and Exchange or Transfer 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 this Ordinance to be kept at the office maintained for such purpose of the Bond Registrar, which is hereby constituted and appointed the registrar of the City for the Bonds. The City is authorized to prepare, and the Bond Registrar or such other agent as the City may designate shall keep custody of, multiple Bond blanks executed by the City for use in the transfer and exchange of Bonds. Subject to the provisions of this Ordinance relating to the Bonds in Book Entry Form, any Bond may be transferred or exchanged, but only in the manner, subject 14- to the limitations, and upon payment of the charges as set forth in this Ordinance. Upon surrender for transfer or exchange of any Bond at the office of the Bond Registrar maintained for such purpose, duly endorsed by or accompanied by a written instrument or instruments of transfer or exchange in form satisfactory to the Bond Registrar and duly executed by the registered owner or an attorney for such owner 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 or, in the case of an exchange, the registered owner, a new fully registered Bond or Bonds of like tenor, of the same maturity,bearing the same interest rate,of authorized denominations,for a like aggregate principal amount. The Bond Registrar shall not be required to transfer or exchange any Bond during the period from the close of business on the Record Date for an interest payment to the opening of business on such interest payment date or during the period of 15 days preceding the giving of notice of redemption of Bonds or to transfer or exchange any Bond all or a portion of which has been called for redemption. 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, that the principal amount of Bonds of each maturity authenticated by the Bond Registrar shall not at any one time exceed the authorized principal amount of Bonds for such maturity less the amount of such Bonds which have been paid. 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 legal 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 15- a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Bonds. Section 12. 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. This space intentionally blank.] 16- FORM OF BONDS-FRONT SIDE] REGISTERED REGISTERED No. UNITED STATES OF AMERICA STATE OF ILLINOIS COUNTY OF MCHENRY CITY OF MCHENRY TAXABLE GENERAL OBLIGATION BOND SERIES 2020B See Reverse Side for Additional Provisions. Interest Maturity Dated Rate:Date: December 30, Date: 2020 CUSIP: Registered Owner: CEDE&Co. Principal Amount: DOLLARS KNOW ALL PERSONS BY THESE PRESENTS that the City of McHenry, McHenry County, Illinois, a municipality, home rule unit, 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 (subject to right of prior redemption as hereinafter stated), the Principal Amount identified above and to pay interest (computed on the basis of a 360-day year of twelve 30-day months)on such Principal Amount from the later of the Dated Date of this 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 30 and December 30 of each year, commencing June 30, 2021,until said Principal Amount is paid or duly provided for. The principal of or redemption price on this Bond is payable in lawful money of the United States of America upon presentation hereof at the office maintained for such purpose 17- of The Bank of New York Mellon Trust Company,National Association,with offices in Chicago, Illinois, as paying agent and bond registrar (the "Bond Registrar"). Payment of interest shall be made to the Registered Owner hereof as shown on the registration books of the City maintained by said Bond Registrar at the close of business on the applicable Record Date. The applicable record date shall be the 15th day of the month of any regular or other interest payment date occurring on the 30th day of any month and 15 days preceding any interest payment date occasioned by the redemption of Bonds on other than the first day of a month. Interest 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, or as otherwise agreed by the City and the Bond Registrar for so long as this Bond is held by a qualified securities clearing corporation as depository, or nominee, in Book Entry Form as provided for same. 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 conditions, acts, and things required by the Constitution and Laws of the State of Illinois to exist or to be done precedent to and in the issuance of this Bond, have existed and have been properly done, happened, and been performed in regular and due form and time as required by law; that the indebtedness of the City, represented by the Bonds, and including all other indebtedness of the City, howsoever evidenced or incurred, does not exceed any constitutional or statutory or other lawful limitation; and that provision has been made for the collection of a direct annual tax, in addition to all other taxes, on all of the taxable property in the City sufficient to pay the interest hereon as the same falls due and also to pay and 18- discharge the principal hereof at maturity. For the prompt payment of this Bond, both principal and interest,at maturity,and the levy of taxes sufficient therefor,the full faith,credit and resources of the City are hereby irrevocably pledged. Amounts to the credit of the Budget Stabilization Fund are not pledged to the payment of the Bonds. 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. IN WITNESS WHEREOF the City of McHenry,McHenry County,Illinois,by its City Council, has caused this Bond to be executed by the manual or duly authorized facsimile signature of its Mayor and attested by the manual or duly authorized facsimile signature of its City Clerk and its corporate seal or a facsimile thereof to be impressed or reproduced hereon, all as appearing hereon and as of the Dated Date identified above. Mayor, City of McHenry McHenry County, Illinois ATTEST: City Clerk, City of McHenry McHenry County, Illinois SEAL] Bond Registrar and Paying Agent: The Bank of New York Mellon Trust Company,National Association Chicago, Illinois 19- FORM OF AUTHENTICATION] CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the within-mentioned Ordinance and is one of the Taxable General Obligation Bonds, Series 2020B, of the City of McHenry, McHenry County, Illinois. Date of Authentication:The Bank of New York Mellon Trust Company,National Association as Bond Registrar By Authorized Officer FORM OF BONDS-REVERSE SIDE] This bond is one of a series of bonds (the "Bonds") in the aggregate principal amount of issued by the City for the purpose of paying a part of the costs of a certain Pension Funding and a Budget Stabilization Fund and of paying expenses incidental thereto, including capitalized interest, all as described and defined in the ordinance authorizing the Bonds the "Ordinance"),pursuant to and in all respects in compliance with the applicable provisions of the Illinois Municipal Code, as supplemented and amended; the Local Government Debt Reform Act (of Illinois), as amended; and as further supplemented and, where necessary, superseded, by the powers of the City as a home rule unit under the provisions of Section 6 of Article VII of the Illinois Constitution of 1970; and with the Ordinance, which has been duly passed by the City Council of the City on the 5th day of October, 2020, and approved by the Mayor. This Bond is subject to optional or mandatory redemption, or both, upon the terms,notice, price and other applicable provisions of the Ordinance and related documents. This Bond may be transferred or exchanged, but only in the manner, subject to the limitations, and upon payment of the charges as set forth in the Ordinance. The Bond Registrar 20- shall not be required to transfer or exchange any Bond during the period from the close of business on the Record Date for an interest payment to the opening of business on such interest payment date or during the period of 15 days preceding the giving of notice of redemption of Bonds or to transfer or exchange any Bond all or a portion of which has been called for redemption. 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 and interest due hereon and for all other purposes, and the City and the Bond Registrar shall not be affected by any notice to the contrary. THIS BOND IS NOT A "TAX-EXEMPT" BOND PURSUANT TO THE INTERNAL REVENUE CODE OF 1986. 21- FORM OF ASSIGNMENT] ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto Here insert Social Security Number, Employer Identification Number or other Identifying Number 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 transfer and 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. 22- Section 13. Security for the Bonds. The Bonds are a general obligation of the City, for which the full faith and credit of the City are irrevocably pledged, and are payable from the levy of the Pledged Taxes on all of the taxable property in the City, without limitation as to rate or amount. Section 14. Tax Levy; Abatements. For the purpose of providing funds required to pay the interest on the Bonds promptly when and as the same falls due, and to pay and discharge the principal thereof at maturity and as subject to mandatory redemption, 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 sufficient for that purpose. Such levy shall be fully set forth in the Bond Order. The Pledged Taxes and other moneys on deposit (collectively, the "Bond Moneys") in a Bond Account hereunder and allocable to any of the Bonds shall be applied to pay principal of and interest on such Bonds as follows: A. Bond Moneys shall be applied to the payment of interest when due and principal or redemption price when due at maturity or as redeemed pursuant to mandatory redemption from such Bond Account, or B. On or before 65 days preceding a mandatory redemption date, and provided notice is given to the Bond Registrar on or before said 65th day preceding a mandatory redemption date, Bond Moneys up to the amount of the redemption requirement on such mandatory redemption date plus interest due on Term Bonds on such date may be applied 1)to the purchase of Term Bonds of the maturity for which such mandatory redemption requirement was established at prices (including commissions and charges, if any) not exceeding par and accrued interest to such mandatory redemption date or (2) to the redemption of such Bonds, without premium, pursuant to optional redemption provisions applicable thereto. Upon the purchase or redemption of Term Bonds of any maturity 23- pursuant to this paragraph (B), an amount equal to the principal amount of such Bonds or applicable portion thereof so purchased or redeemed shall be deducted from the mandatory redemption requirement as provided for Term Bonds of such maturity, first, in the current year of such requirement, until the requirement for the current year has been fully met, and then in any order of payment on the Term Bonds as due at maturity or subject to mandatory redemption in any year as the City shall at such time determine. Interest or principal coming due at any time when there are insufficient 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. The City covenants and agrees with the purchasers and registered owners of the Bonds that so long as any of the Bonds remains 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 levy and collect the foregoing tax levy. The City and its officers will comply with all present and future applicable laws in order to assure that the Pledged Taxes may be levied, extended and collected as provided herein and deposited into the Bond Account. Whenever other funds from any lawful source are made available for the purpose of paying any principal of or interest on the Bonds so as to enable the abatement of the taxes levied herein for the payment of same, the Corporate Authorities shall, by proper proceedings, direct the deposit of such funds into the Bond Account and further shall direct the abatement of the taxes by the amount so deposited. The City covenants and agrees that it will not direct the abatement of taxes until money has been deposited into the Bond Account in the amount of such abatement. A certified copy or other notification of any such proceedings abating taxes may then be filed with the County Clerk in a timely manner to effect such abatement. 24- Section 15. Filing with County Clerk. Promptly, after this Ordinance becomes effective, and upon the execution of a Bond Order, a copy hereof, certified by the City Clerk, shall be filed with the County Clerk, along with the Bond Order. Thereupon, the County Clerk shall in and for each of the years provided, ascertain the rate percent required to produce the aggregate Pledged Taxes levied in each of such years; and the County Clerk shall extend the same for collection on the tax books in connection with other taxes levied in such years in and by the City for general corporate purposes of the City; and in each of those years such annual tax shall be levied and collected by and for and on behalf of the City in like manner as taxes for general corporate purposes for such years are levied and collected, without limit as to rate or amount, and in addition to and in excess of all other taxes. Section 16. Sale ofBonds;Bond Order; Official Statement. The Designated Officials are hereby authorized to proceed, without any further authorization or direction whatsoever from the Corporate Authorities,to sell and deliver all or a part of the Bonds upon the terms as prescribed in this Section, pursuant to a Bond Order. The Bonds shall be sold and delivered to the Purchaser at the price of not less than 98%of the par value of the principal amount thereof,plus accrued interest, if any, to the date of delivery. Such sale shall be made upon the advice (in the form of a written certificate or report) of the Speer Financial, Inc., the City's municipal advisor (the "Municipal Advisor"), that the net interest cost rate on the Bonds so sold, calculated in accordance with customary market practice, does not exceed 6.00% and that such net interest cost rate and all of the other terms of the Bonds are fair and reasonable in view of current conditions in the bond markets. Nothing in this Section shall require the Designated Officials to sell any Bonds if in their judgment,aided by the Municipal Advisor,the conditions in the bond markets shall have markedly deteriorated from the time of adoption hereof,but the Designated Officials shall have the authority to sell all or a portion of the Bonds in any event so long as the limitations set forth in this Ordinance 25- and the conditions of this Section shall have been met. Upon the sale of Bonds, the Designated Officials and any other officers of the City as shall be appropriate, shall be and are hereby authorized and directed to approve or execute, or both, such documents of sale of the Bonds as may be necessary, including, without limitation, a Bond Order, Preliminary Official Statement, Official Statement, Bond Purchase Agreement, and closing documents. At the time of the execution and delivery of the Bond Purchase Agreement, the Designated Officials shall find and determine that no person holding any office of the City either by election or appointment,is in any manner financially interested either directly, in his or her own name, or indirectly in the name of any other person, association, trust or corporation in said agreement with the Purchaser for the purchase of the Bonds. The distribution of the Preliminary Official Statement relating to the Bonds substantially in the form presented before this meeting is hereby in all respects authorized and approved, and the proposed use by the Purchaser of an Official Statement (in substantially the form of the Preliminary Official Statement but with appropriate variations to reflect the final terms of the Bonds) is hereby approved. A Bond Purchase Agreement for the sale of the Bonds to the Purchaser,substantially in the form attached to this Ordinance as Exhibit B, is hereby in all respects authorized and approved. The officer(s) designated to sign the Bond Purchase Agreement are hereby authorized to execute same, and their execution shall constitute full and complete approval of all necessary or appropriate completions and revisions as shall appear therein. Upon the sale of any Bonds, the Designated Officials shall prepare a Bond Order,to be substantially in the form of Exhibit A attached hereto, which shall include the pertinent details of sale as provided herein, and such shall be entered into the records of the City and made available to the Corporate Authorities at a regular public meeting thereof. The Designated Officials shall also file with the County Clerk 26- the Bond Order or like document including a statement of taxes. The authority to sell the Bonds pursuant to a Bond Order as herein provided shall expire on April 1, 2021. Section 17. Continuing Disclosure Undertaking. The Mayor or the Treasurer of the City is hereby authorized, empowered and directed to execute and deliver the Continuing Disclosure Undertaking (the "Continuing Disclosure Undertaking") in substantially the form set forth as Exhibit C to this Ordinance, attached hereto, or with such changes therein as the officer executing the Continuing Disclosure Undertaking on behalf of the City shall approve, his or her execution thereof to constitute conclusive evidence of his or her approval of such changes. When the Continuing Disclosure Undertaking is executed and delivered on behalf of the City as herein provided, the Continuing Disclosure Undertaking will be binding on the City and the officers, employees and agents of the City, and the officers, employees and agents of the City are hereby authorized, empowered and directed to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of the Continuing Disclosure Undertaking as executed. Notwithstanding any other provision of this Ordinance, the sole remedies for failure to comply with the Continuing Disclosure Undertaking shall be the ability of the beneficial owner of any Bond to seek mandamus or specific performance by court order to cause the City to comply with its obligations under the Continuing Disclosure Undertaking. Section 18. Creation of Funds, Accounts and Appropriations; Special Covenant Regarding Use of Proceeds. A. There is hereby created the "Taxable General Obligation Bonds, Series 2020B, Bond Account" (the "Bond Account"), which shall be the account for the payment of principal of and interest on the Bonds. Accrued interest and premium, if any, received upon delivery of the Bonds, shall be deposited into the Bond Account and be applied to pay first interest coming due on the Bonds. In addition, but only to the extent as provided in the Bond Order, a sum of Bond 27- proceeds as may be sufficient so as to provide for the payment of interest on the Bonds up to and including December 30, 2021 (or for any shorter period as determined), shall be set aside into the Bond Account at the time of the delivery of the Bonds. B. The Pledged Taxes shall either be deposited into the Bond Account and used solely and only for paying the principal of and interest on the Bonds or be used to reimburse a fund or account from which advances to the Bond Account may have been made to pay principal of or interest on the Bonds prior to receipt of Pledged Taxes. Interest income or investment profit earned in the Bond Account shall be retained in the Bond Account for payment of the principal of or interest on the Bonds on the interest payment date next after such interest or profit is received or, to the extent lawful,transferred to such other fund as may be determined. The City hereby pledges, as equal and ratable security for the Bonds, all present and future proceeds of the Pledged Taxes on deposit in the Bond Account for the sole benefit of the registered owners of the Bonds, subject to the reserved right noted to transfer certain interest income or investment profit earned in the Bond Account to other funds. C. The amount necessary from the proceeds of the Bonds shall be either used to pay expenses directly at the time of issuance of the Bonds or be deposited into a separate account, hereby created, designated the "Series 2020B Expense Account" to be used to pay expenses of issuance of the Bonds. Disbursements from such account shall be made from time to time as necessary. Moneys not disbursed from such Expense Account within six (6) months shall be transferred by the Treasurer for deposit into the Bond Fund, and any deficiencies in the Expense Account shall be paid from other lawfully available City funds. D. The remaining proceeds of the Bonds are hereby appropriated to (i)prepay a portion of the UAAL and (ii) fund the Budget Stabilization Fund. The amount used to fund the UAAL and the Budget Stabilization Fund shall be set forth in the Bond Order. The sale proceeds 28- appropriated to prepay the UAAL shall be paid to the Pension Fund on the date of the delivery of the Bonds. Sale Proceeds appropriated to fund the Budget Stabilization Fund shall be deposited into a special fund of the City hereby established and designated as the "2020 Pension Budget Stabilization Fund." Funds to the credit of the Budget Stabilization Fund shall be used by the City, from time to time, to pay the Pension Liability in accordance with the provisions of Section 19 hereof. E. The City does hereby specially covenant with the Purchaser and with the registered owners or holders of the Bonds from time to time that so long as any of the Bonds are outstanding, the City will hold and apply the Bond proceeds exclusively for the Pension Funding. Section 19. Budget Stabilization Fund. The purpose of the Budget Stabilization Fund is to mitigate the budget impact of changes in the amount of the City's payments to the Pension Fund caused by the actual rate of return earned on the City's investment in the assets of the Pension Fund (the "Actual ROI") relative to the rate of return (the "ROI") assumed by the Pension Fund. The Budget Stabilization Fund is initially funded with proceeds of the Bonds as set forth in Section 18 hereof. In any year in which the City's payments to the Pension Fund increase as a result of an increase in the UAAL caused by an Actual ROI below the ROI for the Pension Fund, the City may, in its discretion, withdraw funds from the Budget Stabilization Fund to the extent such withdrawal does not cause the balance in the Budget Stabilization Fund to be less than $0, and deposit such funds in the Pension Fund for the purpose of defraying a portion of the increase in the City's payment to the Pension Fund. In any year in which the City's payments to the the Pension Fund decrease as a result of a decrease in the UAAL caused by an Actual ROI in excess of the ROI, for the Pension Fund, the City may, in its discretion,withdraw funds in an amount not to exceed the amount of such increase 29- from the Pension Fund and deposit such amount to the Budget Stabilization Fund, provided, however, that the amount on hand in the Budget Stabilization Fund shall not exceed the amount set forth in the Bond Order(such amount not to exceed $1,000,000). Amounts remaining in the Budget Stabilization Fund immediately prior to the final payment of principal and interest on the Bonds shall be transferred out of the Budget Stabilization Fund and used for the following purposes in the following order: (1)to make the final debt service payment on the Bonds, (2) to pay any remaining UAAL with respect to the Pension Fund and 3)to be deposited into the Pension Fund, as directed by the Corporate Authorities. Amounts to the credit of the Budget Stabilization Fund are not pledged to the payment of the Bonds. Section 20. Rights and Duties ofBond Registrar. If requested by the Bond Registrar, any officer of the City is authorized to execute standard forms of agreements between the City and the Bond Registrar with respect to the obligations and duties of the Bond Registrar under this Ordinance. In addition to the terms of such agreements and subject to modification thereby, the Bond Registrar by acceptance of duties under this Ordinance agrees (a)to act as bond registrar, paying agent, authenticating 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 upon redemption or submitted for exchange or transfer; (d)to furnish the City at least annually a certificate with respect to Bonds canceled and/or destroyed; and (e)to furnish the City at least annually an audit confirmation of Bonds paid, Bonds outstanding and payments made with respect to interest on the Bonds. The City covenants with respect to the Bond Registrar, and the Bond Registrar further covenants and agrees as follows: 30- A) The City shall at all times retain a Bond Registrar with respect to the Bonds; it will maintain at the designated office(s) of such Bond Registrar a place or places where Bonds may be presented for payment, registration, transfer or exchange; and it will require that the Bond Registrar properly maintain the Bond Register and perform the other duties and obligations imposed upon it by this Ordinance in a manner consistent with the standards,customs and practices of the municipal securities industry. B) The 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. Any Bond Registrar shall be the agent of the City and shall not be liable in connection with the performance of its duties except for its own negligence or willful wrongdoing. Any Bond Registrar shall, however, be responsible for any representation in its certificate of authentication on Bonds. C) The City may remove the Bond Registrar at any time. In case at any time the Bond Registrar shall resign, shall be removed, shall become incapable of acting, or shall be adjudicated a bankrupt or insolvent, or if a receiver, liquidator, or conservator of the Bond Registrar or of the property thereof shall be appointed,or if any public officer shall take charge or control of the Bond Registrar or of the property or affairs thereof, the City covenants and agrees that it will thereupon appoint a successor Bond Registrar. The City shall give notice of any such appointment made by it to each registered owner of any Bond within twenty days after such appointment in the same manner, or as nearly the same as may be practicable, as for a redemption of Bonds. Any Bond Registrar appointed under the provisions of this Section shall be a bank,trust company,or national banking association maintaining a corporate trust office in Illinois or in New York, and having 31- capital and surplus and undivided profits in excess of$100,000,000. The City Clerk of the City is hereby directed to file a certified copy of this Ordinance with the Bond Registrar. Section 21. Defeasance. Any Bond or Bonds which (a) are paid and canceled, (b)which have matured and for which sufficient sums been deposited with the Bond Registrar to pay all principal and interest due thereon, or (c) for which sufficient funds and Defeasance Obligations have been deposited with the Bond Registrar or similar institution to pay, taking into account investment earnings on such obligations, all principal of and interest on such Bond or Bonds when due at maturity or as called for redemption, pursuant to an irrevocable escrow or trust agreement, shall cease to have any lien on or right to receive or be paid from the Pledged Taxes 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 outstanding Bonds. All covenants relative to the payment,registration,transfer,and exchange; are expressly continued for all Bonds whether outstanding Bonds or not. For purposes of this section, "Defeasance Obligations" means a) direct and general full faith and credit obligations of the United States Treasury ("Directs"), b) certificates of participation or trust receipts in trusts comprised wholly of Directs or (c) other obligations unconditionally guaranteed as to timely payment by the United States Treasury. Section 22. Municipal Bond Insurance Policy. The Designated Officials are hereby expressly authorized to sell the Bonds subject to the provisions of a Municipal Bond Insurance Policy. In such event, so long as such Municipal Bond Insurance Policy shall be in full force and effect,the City and the Bond Registrar agree to comply with such usual and reasonable provisions regarding presentment and payment of the Bonds, subrogation of the rights of the bondholders to the issuer of such policy when holding Bonds, amendment hereof, or other terms, as approved by any one or more of the Designated Officials on advice of counsel, his, her or their approval to 32- constitute full and complete acceptance by the City of such terms and provisions under authority of this section. Section 23. Tax Status of Bonds. The City hereby covenants that it will not take any action, omit to take any action or permit the taking or omission of any action within its control if taking, permitting or omitting to take such action would cause the interest on the Bonds not to be included in the gross income of the recipients thereof for federal income tax purposes. Section 24. 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. 33- Section 25. Superseder and Effective Date. All ordinances, resolutions and orders, or parts thereof, in conflict with this Ordinance, are to the extent of such conflict hereby superseded; and this Ordinance shall be in full force and effect immediately upon its passage and approval. AYES: NAYS: ABSENT: ADOPTED: October 5, 2020 APPROVED: October 5, 2020 Mayor, City of McHenry McHenry County, Illinois RECORDED In City Records: October 5, 2020. Attest: City Clerk, City of McHenry McHenry County, Illinois 34- STATE OF ILLINOIS SS COUNTY OF MCHENRY ) CERTIFICATION OF AGENDA,MINUTES AND ORDINANCE I, the undersigned, do hereby certify that I am the duly qualified and acting City Clerk of the City of McHenry, McHenry County, Illinois (the "City"), and as such official I am the keeper of the official journal of proceedings, books,records, minutes and files of the City and of the City Council (the "Corporate Authorities") of the City. I do further certify that the foregoing extract of minutes is a full, true and complete transcript of that portion of the minutes of the meeting (the "Meeting") of the Corporate Authorities held on the 5th day of October, 2020 insofar as the same relates to the adoption of an ordinance, numbered entitled: AN ORDINANCE providing for the issuance of not to exceed 29,000,000 Taxable General Obligation Bonds, Series 2020B, of the City of McHenry, McHenry County, Illinois, for the purpose of funding all or a portion of the unfunded liability of said City's Police Pension Fund, a budget stabilization fund for such unfunded liability, the levy and collection of a direct annual tax for the payment of the principal of and interest on said bonds and the sale of said bonds to Robert W. Baird & Co. Incorporated. the "Ordinance")a true,correct and complete copy of which Ordinance as adopted at the Meeting appears in the foregoing transcript of the minutes of the Meeting. I do further certify that the deliberations of the Corporate Authorities on the adoption of the Ordinance were taken openly;that the vote on the adoption of the Ordinance was taken openly; that the Meeting was held at a specified time and place convenient to the public; that notice of the Meeting was duly given to all newspapers, radio or television stations, and other news media requesting such notice; that an agenda(the "Agenda") for the Meeting was posted at the location where the Meeting was held and at the principal office of the Corporate Authorities (both such locations being at City Hall)on a day which was not a Saturday, Sunday or legal holiday for Illinois municipalities and at least 72 hours in advance of the meeting and remained so posted continuously until adjournment of the Meeting; that the Agenda contained a specific action item relating to the Bonds; that a true and complete copy of the Agenda is attached hereto; that the Meeting was called and held in strict compliance with the provisions of the Open Meetings Act of the State of Illinois, as amended; and the Illinois Municipal Code, as amended; and that the Corporate Authorities have complied with all of the provisions of such act and code and with all of the procedural rules of the Corporate Authorities in the adoption of the Ordinance. IN WITNESS WHEREOF I hereunto affix my official signature and the seal of the City this 5th day of October, 2020. City Clerk SEAL] Attachments: Agenda, Minutes, Ordinance] 2- STATE OF ILLINOIS SS COUNTY OF MCHENRY ) CERTIFICATE OF FILING I, the undersigned, do hereby certify that I am the duly qualified and acting County Clerk of The County of McHenry, Illinois, and as such officer I do hereby certify that on the day of 2020 there was filed in my office a properly certified copy of Ordinance Number passed by the City Council of the City of McHenry, McHenry County, Illinois, on the 5th day of October, 2020 and entitled: AN ORDINANCE providing for the issuance of not to exceed 29,000,000 Taxable General Obligation Bonds, Series 2020B, of the City of McHenry, McHenry County, Illinois, for the purpose of funding all or a portion of the unfunded liability of said City's Police Pension Fund, a budget stabilization fund for such unfunded liability, the levy and collection of a direct annual tax for the payment of the principal of and interest on said bonds and the sale of said bonds to Robert W. Baird& Co. Incorporated. and approved by said Mayor, and that the same has been deposited in, and all as appears from, the official files and records of my office. IN WITNESS WHEREOF I have hereunto affixed my official signature and the seal of The County of McHenry, Illinois,this day of 2020. County Clerk of The County of McHenry, Illinois SEAL] City of McHenry, Illinois Hypothetical Refunding of Police Pension Fund UAAL Scenario#1: Level Debt Service Scenario- 7% Rate of Return April 30 Alternative Funding Method Level Debt Service Illustration(1) Tax Collection Fiscal Year Year Ending of UAAL Annual Payment to Net Total Assumed UAAL POB December 31 Payment Amortize UAAL(2) Principal Interest Debt Service Savings(3> Balance(2) Balance 12/15 Avg= 2.59% 23,809,268 2020 2021 2,013,099 0 2,013,099 23,674,826 $24,655,000 2021 2022 1,838,318 1,080,000 576,260 1,656,260 182,058 23,493,746 $23,575,000 2022 2023 1,893,468 1,115,000 543,997 1,658,997 234,472 23,244,840 $22,460,000 2023 2024 1,950,272 1,125,000 531,843 1,656,843 293,429 22,921,707 $21,335,000 2024 2025 2,008,780 1,140,000 518,231 1,658,231 350,550 22,517,446 $20,195,000 2025 2026 2,069,043 1,155,000 502,613 1,657,613 411,431 22,024,624 $19,040,000 2026 2027 2,131,115 1,170,000 485,057 1,655,057 476,059 21,435,233 $17,870,000 2027 2028 2,195,048 1,195,000 465,050 1,660,050 534,999 20,740,651 $16,675,000 2028 2029 2,260,900 1,215,000 442,823 1,657,823 603,078 19,931,597 $15,460,000 2029 2030 2,328,727 1,240,000 417,551 1,657,551 671,177 18,998,083 $14,220,000 2030 2031 2,398,588 1,265,000 390,519 1,655,519 743,070 17,929,360 $12,955,000 2031 2032 2,470,546 1,295,000 361,677 1,656,677 813,870 16,713,869 $11,660,000 2032 2033 2,544,662 1,325,000 330,856 1,655,856 888,807 15,339,178 $10,335,000 2033 2034 2,621,002 1,360,000 297,996 1,657,996 963,007 13,791,918 8,975,000 2034 2035 2,699,632 1,395,000 262,908 1,657,908 1,041,725 12,057,720 $7,580,000 2035 2036 2,780,621 1,430,000 225,522 1,655,522 1,125,100 10,121,139 6,150,000 2036 2037 2,864,040 1,470,000 185,768 1,655,768 1,208,273 7,965,579 4,680,000 2037 2038 2,949,961 1,515,000 143,432 1,658,432 1,291,530 5,573,208 3,165,000 2038 2039 3,038,460 1,560,000 98,285 1,658,285 1,380,176 2,924,873 1,605,000 2039 2040 3,129,614 1,605,000 50,237 1,655,237 1,474,378 0 0 48,185,896 $24,655,000 6,830,616 31,485,616 16,700,280 Assumed Unfunded Actuarial Accrued Liability Funded by POBs 23,809,268 Assumed Present Value Savings @ Bond Rate 13,430,330 Assumed PV Savings @ Bond Rate/UAAL 56.41% 1)This illustration represents a mathematical calculation of potential interest cost savings,assuming hypothetical current rates for taxable general obligation bonds rated Aa2 as of September 15,2020.Actual rates may vary.If actual rates are higher than those assumed,the interest cost savings would be lower.This illustration provides information and is not intended to be a recommendation,proposal or suggestion for a refinancing or otherwise be considered as advice.Assumes the bonds are dated as of December 1,2020 with principal due December 15 and a first interest payment on June 15,2021.Preliminary,subject to change. 2)Provided by Lauterbach&Amen,LLP as of September 21,2020.The UAAL payment is calculated as a constant percentage of payroll for covered employees.Preliminary, subject to change. 3)Assumes actuarially projected results are achieved and bonds are issued as described. BAI,,D Prepared by Robert W.Beid Co.Incorporated 2020 0921 Ciy of McHenry IL Poke Pensnn Rehadip Aneysk.xkx B WP9222020 This estimate considers market amounts(not actuarial amounts) 8/31/2020 Reconciliations Payments Present Value 20 Year Analysis of Funding of UAAL of McHenry Police Pension Plan Beginning UAAL at 4/30/2020 26,837,963 27,583,690 7.00% Valuation Assumed Interest Rate Interim Increase in UAAL to 8/31/2020 3,028,695) 3,028,695) 3.00% Valuation Assumed Payroll Growth Intermediate UAAL at 8/31/2020 23,809,268 24,554,995 0.955896 Issue-Date Factor Total Payments 23,809,268 24,554,995 Entry Age Normal Funding Method Difference Net Interim Effective Increase)/ (Increase)/ Remaining Funding Payment 8/31/2020 Interest Beg of Year Principal Decrease in Decrease End of Year Years for Amortization Toward PV of Portion of Unfunded Portion of Unfunded Unfunded Unfunded Year Payroll(est) Funding Factor Unfunded Payment Payment UAAL) Payment UAAL) UAAL) UAAL) 2019 26,837,963 2020 4,523,976 20 14.2649 2,013,099 1,924,314 1,878,657 26,837,963 134,442 134,442 3,028,695 23,674,826 2021 4,659,695 19 13.7800 1,838,318 1,642,282 1,657,238 23,674,826 181,080 181,080 23,493,746 2022 4,799,486 18 13.2763 1,893,468 1,580,888 1,644,562 23,493,746 248,906 248,906 23,244,840 2023 4,943,471 17 12.7531 1,950,272 1,521,790 1,627,139 23,244,840 323,133 323,133 22,921,707 2024 5,091,775 16 12.2095 2,008,780 1,464,900 1,604,519 22,921,707 404,261 404,261 22,517,446 2025 5,244,528 15 11.6448 2,069,043 1,410,138 1,576,221 22,517,446 492,822 492,822 22,024,624 2026 5,401,864 14 11.0582 2,131,115 1,357,422 1,541,724 22,024,624 589,391 589,391 21,435,233 2027 5,563,920 13 10.4488 2,195,048 1,306,678 1,500,466 21,435,233 694,582 694,582 20,740,651 2028 5,730,837 12 9.8158 2,260,900 1,257,830 1,451,846 20,740,651 809,054 809,054 19,931,597 2029 5,902,763 11 9.1581 2,328,727 1,210,808 1,395,212 19,931,597 933,515 933,515 18,998,083 2030 6,079,845 10 8.4750 2,398,588 1,165,544 1,329,866 18,998,083 1,068,723 1,068,723 17,929,360 2031 6,262,241 9 7.7653 2,470,546 1,121,972 1,255,055 17,929,360 1,215,491 1,215,491 16,713,869 2032 6,450,108 8 7.0280 2,544,662 1,080,030 1,169,971 16,713,869 1,374,692 1,374,692 15,339,178 2033 6,643,611 7 6.2621 2,621,002 1,039,655 1,073,742 15,339,178 1,547,260 1,547,260 13,791,918 2034 6,842,920 6 5.4664 2,699,632 1,000,789 965,434 13,791,918 1,734,198 1,734,198 12,057,720 2035 7,048,207 5 4.6399 2,780,621 963,376 844,040 12,057,720 1,936,581 1,936,581 10,121,139 2036 7,259,653 4 3.7812 2,864,040 927,362 708,480 10,121,139 2,155,560 2,155,560 7,965,579 2037 7,477,443 3 2.8892 2,949,961 892,695 557,591 7,965,579 2,392,371 2,392,371 5,573,208 2038 7,701,766 2 1.9626 3,038,460 859,323 390,125 5,573,208 2,648,335 2,648,335 2,924,873 2039 7,932,819 1 1.0000 3,129,614 827,199 204,741 2,924,873 2,924,873 2,924,873 Total 48,185,897 24,554,995 24,376,629 23,809,268 23,809,268 3,028,695 McHenry Police Annual Payments Toward Unfunded Under Police Funding Policy Based on 7.00%Valuation Interest Rate 3,500,000 30,000,000 3,000,000 25,000,000 2,500,000 20,000,000 QQ v $2,000,000 j E o 15,000,000 Q $1,500,000 0 c 10,000,000 1,000,000 5,000,000 500,000 0 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 Principal Portion of Payment Interest Portion of Payment ,End of Year Unfunded(UAAL) 40.4111P- f"~ Office of Finance &Accounting Carolyn Lynch, Director McHenrcHy MunicipalIllinoisGreen Center Menry333, 60050Street McHenr Phone: (815) 363-2100 Fax: (815) 363-2119 www.ci.mchenry.il.us REGULAR AGENDA SUPPLEMENT DATE: October 5, 2020 TO: Mayor and City Council FROM: Carolyn Lynch, Finance Director RE: Resolution Authorizing and Approving a Pension Obligation Bond Policy ATT: Resolution Authorizing and Approving a Pension Obligation Bond Policy Exhibit A— Pension Obligation Bond Policy AGENDA ITEM SUMMARY: Based on Council action on Agenda Item 6B, Police Pension Obligation Bond Parameters Ordinance,the implementation of a Pension Obligation Policy is required to be put in place. The purpose of this agenda item is for Council's consideration and action on this policy. BACKGROUND INFORMATION: If the Council chooses to adopt the Pension Obligation Bond Parameters Ordinance (Agenda Item 6B) the next step would be to adopt a Pension Obligation Bond Policy through the adoption of a Resolution. The purposes of the Pension Obligation Bond Policy are as follows: To outline the City's commitment to diligently fund its unfunded pension liabilities in the most efficient and cost effective manner possible. To acknowledge the City's recognition of the potential benefits and risks associated with Pension Obligation Bonds (POBs). To outline the procedures the City will follow to mitigate these risks. RECOMMENDATION: Therefore, based on the approval of Agenda Item 6B, it is recommended that a motion be made to adopt a Resolution approving a Pension Obligation Bond Policy. RESOLUTION NO 20- Resolution of the City of McHenry, Illinois Authorizing and Approving a Pension Obligation Bond Policy WHEREAS, the City of McHenry, McHenry County, Illinois, is a home rule municipality as contemplated under Article VII, Section 6, of the Constitution of the State of Illinois, and the passage of this Ordinance constitutes an exercise of the City's home rule powers and functions as granted in the Constitution of the State of Illinois; and WHEREAS, the City is considering the issuance of general obligation bonds to fund the City's unfunded pension liabilities; and WHEREAS, the City recognizes the potential benefits and risks associated with pension obligation bonds; and WHEREAS, in an effort to mitigate the risks, the City desires to implement the Pension Obligation Bond Policy attached hereto as Exhibit A and incorporated herein; and WHEREAS, the City finds it to be in the best interest of the health, safety, morals and general welfare of its citizens to adopt said policy. NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF MCHENRY OF MCHENRY COUNTY, ILLINOIS AS FOLLOWS: Section 1. The foregoing recitals shall be and are hereby incorporated as findings of fact as if said recitals were fully set forth herein. Section 2. The City Council hereby authorizes and approves the Pension Obligation Bond Policy attached hereto as Exhibit A, or one in substantially similar form. Section 3. If any section, paragraph, clause or provision of this Resolution shall be held invalid, said invalidity shall not affect any other provision of this Resolution. Section 4. This Resolution shall be in full force and effect upon its passage and approval in the manner provided by law. Section 5. This Resolution is being passed pursuant to the Home Rule Authority of the City of McHenry as given by Section 6 of Article VII of the Illinois Constitution of 1970, as amended. Passed this 5th day of October, 2020. Ayes Nays Absent Abstain Alderman Devine Alderman Glab Alderman Harding Alderman Mihevc Alderwoman Miller Alderman S anti Alderman Schaefer Wayne Jett, Mayor Trisha Ramel, City Clerk Exhibit A City of McHenry Pension Obligation Bond Policy In conjunction with the issuance of the City's Taxable General Obligation Bonds, Series 2020B to fund the Police Pension Plan's (Pension Plan) unfunded actuarial accrued liability, the City is adopting this Pension Obligation Bond Policy to set forth the following: 1. The City's commitment to diligently funding its unfunded pension liabilities in the most efficient and cost effective manner possible. 2. The City's recognition of the potential benefits and risks associated with Pension Obligation Bonds (POBs); and 3. Procedures the City will follow in order to mitigate these risks. Therefore, the City hereby adopts the following Pension Obligation Bond Policy: The City has determined that issuing POBs assures a more rapid funding of the Pension Plan with significant expected savings while recognizing that it will incur certain risks by doing so. II.The principal risk the City will incur is that bond proceeds are expected to be invested by the Pension Plan at an overall return higher than the interest rates on the POBs and that rate of return may not be realized. A. The City has determined that it is likely that the Pension Plan will achieve an average return on the investment of POB proceeds over the life of the POBs at the plan's actuarial rate of 7.00%. Further,the City believes the plan should at least achieve a return above the expected rate on the POBs of approximately 2.85% which is the City's break-even point (final breakeven will be determined at pricing). B. Should the overall return on the investment of bond proceeds be less than the POB interest rate, the POBs would cost the City more than the plan's current funding methodology. In addition, the investment of bond proceeds could result in adverse market timing. C. Over the past 10 years, the City has achieved an approximate rate of return of 7.34% in its Pension Plan. III. In order to mitigate these risks the City has determined to adopt the following policies and procedures, recognizing that these procedures will not eliminate all risks: A. The City will not use any POB proceeds to fund annual "normal" costs nor will it fund any capitalized interest with bond proceeds with a view to reducing current cost in exchange for higher long-term costs. B. The City, as a home rule government, will use all legally available funds and a tax levy, unlimited as to rate or amount, to fully pay debt service on the POBs. C. The City will not extend the POBs beyond the current plan's amortization period nor will it defer principal repayments versus the current payment methodology. D. The City will not use any other financing technique which will have the effect of enhancing early year savings at the expense of higher long-term costs. E. The City will further limit its risk by not using guaranteed investment contracts, swaps or other derivative products in conjunction with the POBs, thus avoiding counter-party risk, credit risk and related interest rate risk. F. Since the City is home rule, it does not have any debt capacity limitations. Further, because the pension liability is already a debt of the City, the issuance of POBs will not increase the City's overall debt burden. Finally, the POBs are expected to be issued with no longer than a ten-year optional par call allowing for refunding or restructuring of the POBs in the future. G. The City recognizes that the current actuarial based funding methodology uses a constant percent of payroll factor resulting in estimated future payments to amortize the current unfunded liabilities that are higher than the current payment amount. In order to address this unsustainable practice, the City's POBs will be issued with a debt service payment structure that will limit early year expected savings to the City in order to allow for level debt service on the POBs as soon as is practicable in the future. H. The City will create a linkage between its unfunded pension liabilities and its POBs in its annual budget so that future City leaders will recognize that the City has chosen to issue POBs to fund a pension liability.This will assure that the proper understanding of the Pension Plan's funding status must include recognizing the POBs as a pension liability. I. The City will create a Budget Stabilization Fund not-to-exceed $1 million, funded initially with POB proceeds, that may be utilized to offset short-term smoothed losses due to any annual investment performance below the actuarial rate of 7.00%. Office of Finance &Accounting Carolyn Lynch, Director McHenry Municipal Center 333 Green Street McHenry, Illinois 60050 McHenr Phone: (815) 363-2100 Fax: (815) 363-2119 www.ci.mchenry.il.us REGULAR AGENDA SUPPLEMENT DATE: October 5, 2020 TO: Mayor and City Council FROM: Carolyn Lynch, Finance Director RE: To approve a bond parameters ordinance providing for the issuance of not to exceed $3,300,000 General Obligation Refunding Bonds, Series 202A. ATTACHMENTS: Bond Parameters Ordinance Refunding Illustration for 2010 C Bonds AGENDA ITEM SUMMARY: Staff was made aware of approximately $347,000 in savings that could be realized by refunding the 2010C Sewer Bonds by the end of 2020. Staff is looking for consideration and action on a parameters ordinance providing for the issuance of not to exceed $3.3 Million General Obligation Refunding Bonds (series 2020A). BACKGROUND INFORMATION: In August, 2010 the City authorized the issuance of$5.665 million in Taxable General Obligation Bonds (Series 2010C) for sanitary improvements involving the Central and South Wastewater Treatment Plants. These bonds are paid with a $6 debt service fee on water/sewer bills. In July, 2020 staff received information on a potential refunding on the Taxable General Obligation Bonds Series 2010C) that could provide a potential savings of approximately $347,000 (see the attached refunding illustration for details). This refunding will require a new bond issuance not to exceed $3.3 million. ANALYSIS: In order to optimize savings on this bond, a parameters ordinance is being brought forward to City Council. A parameters ordinance allows the City Council to adopt an ordinance authorizing the sale of bonds at a future date, as long as certain parameters are met. These would include maximum par amount, interest rate, maturity date, etc. The ordinance also designates certain elected and appointed officials to complete the sale on behalf of the City Council if the terms of the ordinance are met. The goal is to deliver the refunding bonds on December 15' to capture the full Treasury Rebate on this bond and to maximize debt service savings. This would occur by completing pricing in October and closing on the bonds December 15tn RECOMMENDATION: Therefore, if Council concurs, it is recommended that a motion be made to approve a parameters ordinance providing for the issuance of not to exceed $3,300,000 General Obligation Refunding Bonds, Series 2020A, of the City for the purpose of refunding certain outstanding general obligation bonds of the City, providing for the levy and collection of a direct annual tax sufficient to pay the principal of and interest on said bonds, authorizing and directing the execution of an escrow agreement in connection with the issuance of the bonds, and authorizing the sale of the bonds to Robert W. Baird & Co Incorporated. City of McHenry, Illinois Hypothetical Illustration for Refunding Taxable General Obligation Bonds, Series 2010C (Build America Bonds) Assumed "Aa2"Rating/Bank Qualified Interest Rates Illustration is subject to change based on market conditions.Actual rates may vary from those assumed. BEFORE REFUNDING AFTER REFUNDING 3,215,000 2,825,000 POTENTIAL Taxable GO Bonds, Series 2010C GO Refunding Bonds, Series 2020 ( 2) DEBT SERVICE Dated:September 15, 2010 Assumed Dated:December 1, 2020 SAVINGS Assumed Assumed Bond Principal Rate Interest BAB Subsidy( 1) Total Principal Rate( 3) Yield (3) Interest Total Year 12/15) 6/15& 12/15) 12/15) 6/15& 12/15) 2021 300,000 4.050%153,550 50,679) $402,871 *245,000 4.000% 0.470% $117,394 $362,394 40,476 2022 310,000 4.050%141,400 46,669) $404,731 *265,000 4.000% 0.500% $103,200 $368,200 36,531 2023 325,000 4.550%128,845 42,525) $411,320 *280,000 4.000% 0.520% $92,600 $372,600 38,720 2024 340,000 4.550%114,058 37,645) $416,413 *295,000 4.000% 0.580% $81,400 $376,400 40,013 2025 355,000 4.800% 98,588 32,539) $421,049 *315,000 4.000% 0.670% $69,600 $384,600 36,449 2026 370,000 4.800% 81,548 26,915) $424,633 *330,000 4.000% 0.820% $57,000 $387,000 37,633 2027 385,000 5.250% 63,788 21,053) $427,734 *345,000 4.000% 1.000% $43,800 $388,800 38,934 2028 405,000 5.250% 43,575 14,382) $434,193 *365,000 4.000% 1.130% $30,000 $395,000 39,193 2029 425,000 5.250% 22,313 7,364) $439,948 *385,000 4.000% 1.270% $15,400 $400,400 39,548 3,215,000 847,663 279,771) $3,782,891 * $2,825,000 610,394 $3,435,394 347,497 CALLABLE MATURITIES Potential Present Value Savings 335,234 Par Amount of Bonds Refunded ( 4) 3,215,000 Potential Percent Present Value Savings (5) 10.427% 1)Assumed a 5.7%reduction in the Build America Bond subsidy through the life of the bonds.Subsidy calculated at 33.01%of interest due. 2)Assumed total costs of issuance of$56,925. Preliminary,subject to change. 3)This illustration represents a mathematical calculation of potential interest cost savings,assuming hypothetical rates based on current rates for general obligation bonds rated Aa2 as of September 15, 2020.Actual rates may vary. If actual rates are higher than those assumed,the interest cost savings would be lower.This illustration provides information and is not intended to be a recommendation, proposal or suggestion for a refinancing or otherwise be considered as advice. 4)Assumed the refunding of the 2021-2029 maturities. 5)Calculated using the refunding bond yield of 0.946%as the discount rate. BAIP,D Prepared by Robert W.Baird Co.Incorporated McHenry 2010C Refunding Illustration 091820.xls DJW 9212020 EXTRACT OF MINUTES of the regular public meeting of the City Council of the City of McHenry, McHenry County, Illinois, held in the Council Chambers at City Hall, located at 333 S. Green Street, in said City, at 7:00 p.m., on the 5th day of October, 2020. The Mayor called the meeting to order and directed the City Clerk to call the roll. Upon the roll being called, Wayne Jett,the Mayor, and the following Aldermen answered present at said location: The following Aldermen were allowed by a majority of the Aldermen 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 manner or to any extent whatsoever: The Mayor announced that the next item for consideration was the issuance of not to exceed 3,300,000 general obligation refunding bonds to be issued by the City pursuant to its home rule powers for the purpose of refunding certain outstanding general obligation bonds of the City for debt service savings, 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, authorizing the execution of an escrow agreement in connection therewith and authorizing the sale of the bonds to Robert W.Baird &Co.Incorporated. The Mayor then explained that the ordinance sets forth the parameters for the issuance of said bonds and sale parameters refunding bond ordinance 4848-3596-1804 v3 2285674 thereof by designated officials of the City and summarized the pertinent terms of said parameters, including the specific parameters governing 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: AN ORDINANCE providing for the issuance of not to exceed 3,300,000 General Obligation Refunding Bonds, Series 2020A, of the City of McHenry, McHenry County, Illinois, for the purpose of refunding certain outstanding general obligation bonds of said City, providing for the levy and collection of a direct annual tax sufficient to pay the principal of and interest on said bonds, authorizing and directing the execution of an escrow agreement in connection with the issuance of said bonds, and authorizing the sale of said bonds to Robert W. Baird& Co. Incorporated. the "Bond Ordinance"). Alderman then moved and Alderman seconded the motion that the Bond Ordinance as presented be adopted. After a full discussion thereof, the Mayor directed that the roll be called for a vote upon the motion to adopt the Bond Ordinance. Upon the roll being called,the following Aldermen voted AYE: the following Aldermen voted NAY: and the following Alderman abstained from the vote: WHEREUPON,the Mayor declared the motion carried and the Bond Ordinance adopted, and henceforth did approve and sign the same in open meeting, and did direct the City Clerk to record 2- the same in full in the records of the City Council of the City of McHenry, McHenry County, Illinois. Other business was duly transacted at said meeting. Upon motion duly made and carried, the meeting adjourned. City Clerk 3- ORDINANCE NO. AN ORDINANCE providing for the issuance of not to exceed 3,300,000 General Obligation Refunding Bonds, Series 2020A, of the City of McHenry, McHenry County, Illinois, for the purpose of refunding certain outstanding general obligation bonds of said City, providing for the levy and collection of a direct annual tax sufficient to pay the principal of and interest on said bond's, authorizing and directing the execution of an escrow agreement in connection with the issuance of said bonds, and authorizing the sale of said bonds to Robert W. Baird & Co. Incorporated. WHEREAS,by virtue of its population,the City of McHenry,McHenry County, Illinois(the City"), and pursuant to the provisions of Section 6 of Article VII of the Constitution of the State of Illinois, the City is a home rule unit and may exercise any power or perform any function pertaining to its government and affairs including, but not limited to,the power to tax and to incur debt; and WHEREAS,pursuant to the provisions of said Section 6,the City has the power to incur debt payable from ad valorem property tax receipts or from any other lawful source and maturing within 40 years from the time it is incurred without prior referendum approval; and WHEREAS, the City has heretofore issued the following outstanding and validly subsisting and unpaid general obligation bonds: Taxable General Obligation Bonds, Series 2010C (the Prior Bonds" and those Prior Bonds being refunded, the"Refunded Bonds"); and WHEREAS, the Refunded Bonds will be further described in the Escrow Agreement (as hereinafter defined); and WHEREAS, it is necessary and desirable to refund the Refunded Bonds in order to realize certain interest cost savings for the City, net of the amount of subsidy payments which the City expected to receive from the U.S. Treasury with respect to interest payments due on certain of the Refunded Bonds; and WHEREAS, the City Council of the City (the "City Council") has determined that in order to refund the Refunded Bonds, it is necessary and in the best interests of the City to borrow not to exceed $3,300,000 and issue bonds of the City therefor; and WHEREAS, it is in the best interest of the City to issue bonds of the City in an amount not to exceed $3,300,000 (the "Bonds") for the purpose of refunding the Refunded Bonds; and WHEREAS, the Bonds shall be payable from a direct annual ad valorem tax levied against all taxable property in the City, without limitation as to rate or amount; and WHEREAS, in accordance with the terms of the Prior Bonds, 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 the Refunded Bonds on their earliest possible call date, and provide for the giving of proper notice to the registered owners of the Refunded Bonds: Now THEREFORE BE IT ORDAINED by the City Council of the City of McHenry, McHenry County, Illinois, in the exercise of its home rule powers, as follows: Section 1. Incorporation of Preambles. The City Council hereby finds that all of the recitals contained in the preambles to this Ordinance are true, correct and complete and does incorporate them into this Ordinance by this reference. Section 2. Authorization. It is hereby found and determined that pursuant to the provisions of the Illinois Municipal Code, as supplemented and amended, and the home rule powers of the City under Section 6 of Article VII of the Illinois Constitution of 1970 (in the event of conflict between the provisions of said code and home rule powers, the home rule powers shall be deemed to supersede the provisions of said code), the City Council has been authorized by law to borrow an amount not to exceed$3,300,000 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 to refund the Refunded Bonds, and that it is necessary to borrow not to exceed $3,300,000 of said 2- authorized sum and issue the Bonds in evidence thereof, and these findings and determinations, together with those set forth in the preambles to this Ordinance, shall be deemed conclusive. Section 3. Bond Details. There be borrowed by for and on behalf of the City an amount not to exceed $3,300,000 for the purpose aforesaid, and that bonds of the City shall be issued to said amount and shall be designated "General Obligation Refunding Bonds, Series 2020A," or with such other series designation as set forth in the Bond Notification (as hereinafter defined). The Bonds shall be dated such date (not later than April 1, 2021) as set forth in the Bond Notification, and shall also bear the date of authentication, shall be in fully registered form, shall be in denominations of$5,000 each or authorized integral multiples thereof(but no single Bond shall represent installments of principal maturing on more than one date), and shall be numbered 1 and upward. The Bonds shall become due and payable serially or be subject to mandatory redemption (subject to prior redemption as hereinafter described) on December 15 of each of the years (not later than 2029), in the amounts (not exceeding $440,000 per year) and bearing interest at the rates (not exceeding 5.00% per annum) as set forth in the Bond Notification. The Bonds shall bear interest from their date or from the most recent interest payment date to which interest has been paid or duly provided for, until the principal amount of the Bonds is paid, such interest computed upon the basis of a 360-day year of twelve 30-day months)being payable semi-annually commencing with the first interest payment date as set forth in the Bond Notification, and on June 15 and December 15 of each year thereafter to maturity. Interest on each Bond shall be paid by check or draft of The Bank of New York Mellon Trust Company, National Association, Chicago, Illinois, as bond registrar and paying agent (the Bond Registrar"), payable upon presentation thereof in lawful money of the United States of America, to the person in whose name such Bond is registered at the close of business on the 1st day of the month of the interest payment date. The principal of the Bonds shall be payable in 3- lawful money of the United States of America upon presentation thereof at the principal corporate trust office of the Bond Registrar. Section 4. Execution;Authentication. The Bonds shall be executed on behalf of the City by the manual or facsimile signature of its Mayor (the "Mayor") and attested by the manual or facsimile signature of its City Clerk (the "City Clerk"), as they shall determine, and shall have impressed or imprinted thereon the corporate seal or facsimile thereof of the City. In case any such officer whose signature shall appear on any 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. Section S. Registration of Bonds; Persons Treated as Owners. (a) General. The City shall cause books (the "Bond Register") for the registration and for the transfer of the Bonds as provided in this Ordinance to be kept at the principal corporate trust 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 corporate trust office of the Bond Registrar, duly endorsed by, or accompanied by a written instrument or instruments of transfer in 4- 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 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 1st day of the month of any interest payment date on such Bond and ending at the opening of business on such interest payment date, nor to transfer or exchange any Bond after notice calling such Bond for redemption has been mailed, nor during a period of fifteen (15) days next preceding mailing of a notice of redemption of any Bonds. 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 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 5- case of the issuance of a Bond or Bonds for the unredeemed portion of a Bond surrendered for redemption. b) Global Book-Entry System. The Bonds shall be initially issued in the form of a separate single fully registered Bond for each of the maturities of the Bonds determined as described in Section 3 hereof. Upon initial issuance, the ownership of each such Bond shall be registered in the Bond Register in the name of Cede & Co., or any successor thereto ("Cede"), as nominee of The Depository Trust Company,New York,New York, and its successors and assigns DTC"). All of the outstanding Bonds shall be registered in the Bond Register in the name of Cede, as nominee of DTC, except as hereinafter provided. Any officer of the City who is a signatory on the Bonds, along with the Treasurer of the City (the "Treasurer"), is authorized to execute and deliver, on behalf of the City, such letters to or agreements with DTC as shall be necessary to effectuate such book-entry system (any such letter or agreement being referred to herein as the "Representation Letter"), which Representation Letter may provide for the payment of principal of or interest on the Bonds by wire transfer. With respect to Bonds registered in the Bond Register in the name of Cede, as nominee of DTC, the City and the Bond Registrar shall have no responsibility or obligation to any broker-dealer, bank or other financial institution for which DTC holds Bonds from time to time as securities depository (each such broker-dealer, bank or other financial institution being referred to herein as a "DTC Participant")or to any person on behalf of whom such a DTC Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Bond Registrar shall have no responsibility or obligation with respect to (i)the accuracy of the records of DTC, Cede or any DTC Participant with respect to any ownership interest in the Bonds, ii)the delivery to any DTC Participant or any other person, other than a registered owner of a Bond as shown in the Bond Register, of any notice with respect to the Bonds, including any notice 6- of redemption, or (iii)the payment to any DTC Participant or any other person, other than a registered owner of a Bond as shown in the Bond Register, of any amount with respect to the principal of or interest on the Bonds. The City and the Bond Registrar may treat and consider the person in whose name each Bond is registered in the Bond Register as the holder and absolute owner of such Bond for the purpose of payment of principal and interest with respect to such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Bond Registrar shall pay all principal of and interest on the Bonds only to or upon the order of the respective registered owners of the Bonds, as shown in the Bond Register, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of the principal of and interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of a Bond as shown in the Bond Register, shall receive a Bond evidencing the obligation of the City to make payments of principal and interest with respect to any Bond. Upon delivery by DTC to the Bond Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede,and subject to the provisions in Section 3 hereof with respect to the payment of interest to the registered owners of Bonds at the close of business on the 1st day of the month of the applicable interest payment date, the name "Cede" in this Ordinance shall refer to such new nominee of DTC. In the event that (i)the City determines that DTC is incapable of discharging its responsibilities described herein and in the Representation Letter, (ii)the agreement among the City, the Bond Registrar and DTC evidenced by the Representation Letter shall be terminated for any reason or(iii) the City determines that it is in the best interests of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, the City shall notify DTC and DTC 7- Participants of the availability through DTC of certificated Bonds and the Bonds shall no longer be restricted to being registered in the Bond Register in the name of Cede, as nominee of DTC. At that time, the City may determine that the Bonds shall be registered in the name of and deposited with such other depository operating a universal book-entry system, as may be acceptable to the City, or such depository's agent or designee, and if the City does not select such alternate universal book-entry system,then the Bonds may be registered in whatever name or names registered owners of Bonds transferring or exchanging Bonds shall designate, in accordance with the provisions of Section 5(a)hereof. Notwithstanding any other provisions of this Ordinance to the contrary, so long as any Bond is registered in the name of Cede, as nominee of DTC, all payments with respect to principal of and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively, in the name provided in the Representation Letter. Section 6. Redemption. (a) Optional Redemption. All or a portion of the Bonds due on and after the date, if any, specified in the Bond Notification shall be subject to redemption prior to maturity at the option of the City from any available funds, as a whole or in part, and if in part in integral multiples of$5,000 in any order of their maturity as determined by the City (less than all of the Bonds of a single maturity to be selected by the Bond Registrar),on the date specified in the Bond Notification and on any date thereafter, at the redemption price of par plus accrued interest to the date fixed for redemption. b) Mandatory Redemption. The Bonds maturing on the date or dates, if any, indicated in the Bond Notification are subject to mandatory redemption, in integral multiples of $5,000 selected by lot by the Bond Registrar, at a redemption price of par plus accrued interest to the redemption date on the redemption date, on December 15 of the years, if any, and in the principal amounts, if any, as indicated in the Bond Notification. 8- The principal amounts of Bonds to be mandatorily redeemed in each year may be reduced through the earlier optional redemption thereof, with any partial optional redemptions of such Bonds credited against future mandatory redemption requirements in such order of the mandatory redemption dates as the City may determine. In addition, on or prior to the 60th day preceding any mandatory redemption date,the Bond Registrar may, and if directed by the City Council shall, purchase Bonds required to be retired on such mandatory redemption date. Any such Bonds so purchased shall be cancelled and the principal amount thereof shall be credited against the mandatory redemption required on such next mandatory redemption date. c) General. The Bonds shall be redeemed only in the principal amount of$5,000 and integral multiples thereof. The City shall, at least forty-five (45) days prior to any optional redemption date (unless a shorter time period shall be satisfactory to the Bond Registrar) notify the Bond Registrar of such redemption date and of the principal amount and maturity or maturities of Bonds to be redeemed. For purposes of any redemption of less than all of the outstanding Bonds of a single maturity,the particular Bonds or portions of Bonds to be redeemed shall be selected by lot by the Bond Registrar from the Bonds of such maturity by such method of lottery as the Bond Registrar shall deem fair and appropriate;provided that such lottery shall provide for the selection for redemption of Bonds or portions thereof so that any $5,000 Bond or$5,000 portion of a Bond shall be as likely to be called for redemption as any other such $5,000 Bond or $5,000 portion. The Bond Registrar shall make such selection upon the earlier of the irrevocable deposit of funds with an escrow agent sufficient to pay the redemption price of the Bonds to be redeemed or the time of the giving of official notice of redemption. The Bond Registrar shall promptly notify the City in writing of the Bonds or portions of Bonds selected for redemption and, in the case of any Bond selected for partial redemption,the principal amount thereof to be redeemed. 9- Section 7. Redemption Procedure. Unless waived by any holder of Bonds to be redeemed,notice of the call for any such redemption shall be given by the Bond Registrar on behalf of the City by mailing the redemption notice by first class mail at least thirty (30) days and not more than sixty(60)days prior to the date fixed for redemption to the registered owner of the Bond or Bonds to be redeemed at the address shown on the Bond Register or at such other address as is furnished in writing by such registered owner to the Bond Registrar. All notices of redemption shall state: 1) the redemption date, 2) the redemption price, 3) if less than all outstanding Bonds are to be redeemed,the identification(and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed, 4) that on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date, 5) the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the principal corporate trust office of the Bond Registrar, and 6) such other information then required by custom,practice or industry standard. Unless moneys sufficient to pay the redemption price of the Bonds to be redeemed at the option of the City shall have been received by the Bond Registrar prior to the giving of such notice of redemption, such notice may, at the option of the City, state that said redemption shall be conditional upon the receipt of such moneys by the Bond Registrar on or prior to the date fixed for redemption. If such moneys are not received, such notice shall be of no force and effect,the City shall not redeem such Bonds, and the Bond Registrar shall give notice, in the same manner in which the notice of redemption shall have been given,that such moneys were not so received and that such Bonds will not be redeemed. Otherwise, prior to any redemption date, the City shall 10- deposit with the Bond Registrar an amount of money sufficient to pay the redemption price of all the Bonds or portions of Bonds which are to be redeemed on that date. Subject to the provisions for a conditional redemption described above, notice of redemption having been given as aforesaid, the Bonds or portions of Bonds so to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the City shall default in the payment of the redemption price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Bond Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the registered holder a new Bond or Bonds of the same maturity in the amount of the unpaid principal. If any Bond or portion of Bond called for redemption shall not be so paid upon surrender thereof for redemption,the principal shall,until paid,bear interest from the redemption date at the rate borne by the Bond or portion of Bond so called for redemption. All Bonds which have been redeemed shall be cancelled and destroyed by the Bond Registrar and shall not be reissued. Section 8. Form of Bond. The Bonds shall be in substantially the following form; provided, however, that if the text of the Bond is to be printed in its entirety on the front side of the Bond, then paragraph [2] and the legend, "See Reverse Side for Additional Provisions", shall be omitted and paragraph [6] and those thereafter as shall be appropriate shall be inserted immediately after paragraph [1]: 11- FORM OF BOND-FRONT SIDE] REGISTERED REGISTERED No. UNITED STATES OF AMERICA STATE OF ILLINOIS COUNTY OF MCHENRY CITY OF MCHENRY GENERAL OBLIGATION REFUNDING BOND,SERIES 2020A See Reverse Side for Additional Provisions Interest Maturity Dated Rate:Date: December 15, 20_Date: 2020 CUSIP: Registered Owner: Principal Amount: 1] KNOW ALL PERSONS BY THESE PRESENTS that the City of McHenry, McHenry County, Illinois, a municipality, home rule unit, 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 later of 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 15 and December 15 of each year, commencing June 15,2021,until said Principal Amount is paid or duly provided for. The principal of this Bond is payable in lawful money of the United States of America upon presentation hereof at the principal corporate trust office of The Bank of New York Mellon Trust Company,National Association, Chicago, Illinois, as bond registrar and paying agent (the "Bond Registrar"). Payment of interest shall be made to the Registered Owner hereof as shown on the registration books of the City maintained by the Bond Registrar, at the close of business on the 1st day of the month of the interest payment date. 12- Interest 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. 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. 2] 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. 3] It is hereby certified and recited that all conditions, acts and things required by the Constitution and Laws of the State of Illinois to exist or to be done precedent to and in the issuance of this Bond, including the hereinafter defined Act, have existed and have been properly done, happened and been performed in regular and due form and time as required by law; that the indebtedness of the City, represented by the Bonds, and including all other indebtedness of the City, howsoever evidenced or incurred, does not exceed any constitutional or statutory or other lawful limitation; and that provision has been made for the collection of a direct annual tax, in addition to all other taxes, on all of the taxable property in the City sufficient to pay the interest hereon as the same falls due and also to pay and discharge the principal hereof at maturity. 4] 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. 13- 5] IN WITNESS WHEREOF, the City of McHenry, McHenry County, Illinois, by its City Council,has caused this Bond to be executed by the manual or duly authorized facsimile signature of its Mayor and attested by the manual or duly authorized facsimile signature of its City Clerk and its corporate seal or a facsimile thereof to be impressed or reproduced hereon, all as appearing hereon and as of the Dated Date identified above. SPECIMEN Mayor, McHenry, McHenry County, Illinois ATTEST: SPECIMEN City Clerk, McHenry McHenry County, Illinois SEAL] Date of Authentication: 20 CERTIFICATE Bond Registrar and Paying Agent: OF The Bank of New York Mellon Trust Company,National Association AUTHENTICATION Chicago, Illinois This Bond is one of the Bonds described in the within mentioned ordinance and is one of the General Obligation Refunding Bonds, Series 2020A, of the City of McHenry, McHenry County, Illinois. THE BANK OF NEW YORK MELLON TRUST COMPANY,NATIONAL ASSOCIATION, as Bond Registrar By SPECIMEN Authorized Officer 14- FORM OF BOND-REVERSE SIDE] CITY OF MCHENRY,MCHENRY COUNTY,ILLINOIS GENERAL OBLIGATION REFUNDING BOND,SERIES 2020A 6] This Bond is one of a series of bonds(the "Bonds")issued by the City for the purpose of refunding certain outstanding bonds of the City and of paying expenses incidental thereto, all as described and defined in the Ordinance of the City, passed by the City Council on the 5th day of October, 2020, authorizing the Bonds (the "Ordinance"), pursuant to and in all respects in compliance with the applicable provisions of the Illinois Municipal Code, as amended; as further supplemented and, where necessary, superseded, by the powers of the City as a home rule unit under the provisions of Section 6 of Article VII of the Illinois Constitution of 1970 (collectively, such Illinois Municipal Code and constitutional home rule powers, being the "Act"), and with the Ordinance, which has been duly approved by the Mayor. 7] Optional and mandatory redemption provisions to be included, as appropriate. 8] Notice of any such redemption shall be sent by first class mail not less than thirty(30) days nor more than sixty (60) days prior to the date fixed for redemption to the registered owner of each Bond to be redeemed at the address shown on the registration books of the City maintained by the Bond Registrar or at such other address as is furnished in writing by such registered owner to the Bond Registrar. When so called for redemption,this Bond will cease to bear interest on the specified redemption date, provided funds for redemption are on deposit at the place of payment at that time, and shall not be deemed to be outstanding. 9] 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 Chicago, 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 15- 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. 10] The Bonds are issued in fully registered form in the denomination of$5,000 each or authorized integral multiples 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 Ordinance. The Bond Registrar shall not be required to transfer or exchange any Bond during the period beginning at the close of business on the 1st day of the month of any interest payment date on such Bond and ending at the opening of business on such interest payment date, nor to transfer or exchange any Bond after notice calling such Bond for redemption has been mailed, nor during a period of fifteen(15) days next preceding mailing of a notice of redemption of any Bonds. 11] 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 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. 16- ASSIGNMENT FOR VALUE RECEIVED,the undersigned sells, assign, and transfers unto Here insert Social Security Number, Employer Identification Number or other Identifying Number 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 transfer and assignment must correspond with the name of the Registered Owner as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever. Section 9. Sale of Bonds. The Mayor and Treasurer (the "Designated Officials") are hereby authorized to proceed, without any further authorization or direction whatsoever from the City Council, to sell and deliver the Bonds upon the terms as prescribed in this Section, pursuant to a Notification of Sale of the Bonds, which shall include the pertinent details of sale as provided herein(the "Bond Notification"). The Bonds shall be sold and delivered to the Robert W. Baird & Co. Incorporated, Naperville, Illinois (the "Purchaser"), at the price of not less than 98% of the par value of the principal amount thereof, plus accrued interest, if any, to the date of delivery. Such sale shall be made upon the advice (in the form of a written certificate or report) of Speer Financial, Inc., the City's municipal advisor, that the net interest cost rate on the Bonds so sold, calculated in accordance with customary market practice, does not exceed 5.00%, that such net 17- interest cost rate and all of the other terms of the Bonds are fair and reasonable in view of current conditions in the bond markets and the net present value savings resultant from the issuance of the Bonds for the refunding of the Refunded Bonds is not less than 4.00% of the principal amount of the Refunded Bonds. Nothing in this Section shall require the Designated Officials to sell any Bonds, but the Designated Officials shall have the authority to sell all or a portion of the Bonds so long as the limitations set forth in this Ordinance and the conditions of this Section shall have been met. Upon the sale of Bonds, the Designated Officials and any other officers of the City as shall be appropriate, shall be and are hereby authorized and directed to approve or execute,or both, such documents of sale of the Bonds as may be necessary, including, without limitation, a Bond Notification, Preliminary Official Statement, Official Statement, Bond Purchase Agreement, and closing documents. At the time of the execution and delivery of the Bond Purchase Agreement, the Designated Officials shall find and determine that no person holding any office of the City either by election or appointment, is in any manner financially interested either directly, in his or her own name, or indirectly in the name of any other person, association, trust or corporation in said agreement with the Purchaser for the purchase of the Bonds. The distribution of the Preliminary Official Statement relating to the Bonds substantially in the form presented before this meeting is hereby in all respects authorized and approved, and the proposed use by the Purchaser of an Official Statement (in substantially the form of the Preliminary Official Statement but with appropriate variations to reflect the final terms of the Bonds) is hereby approved. A Bond Purchase Agreement for the sale of the Bonds to the Purchaser, substantially in the form attached to this Ordinance as Exhibit B, is hereby in all respects authorized and approved. The officer(s) designated to sign the Bond Purchase Agreement are hereby authorized to execute same, and their execution shall constitute full and complete approval of all necessary or appropriate completions and revisions as shall appear therein. Upon the sale of 18- any Bonds, the Designated Officials shall prepare a Bond Notification, to be substantially in the form of Exhibit A attached hereto, which shall include the pertinent details of sale as provided herein,and such shall be entered into the records of the City and made available to the City Council at a regular public meeting thereof The Designated Officials shall also file with the County Clerk the Bond Notification or like document including a statement of taxes. The authority to sell the Bonds pursuant to a Bond Notification as herein provided shall expire on April 1, 2021. Section 10. Tax Levy;Abatement. For the purpose of providing funds required to pay the interest on the Bonds promptly when and as the same falls due, and to pay and discharge the principal thereof at maturity,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 sufficient for that purpose; and there is hereby levied on all of the taxable property in the City, in addition to all other taxes,the following direct annual tax (the "Pledged Taxes"), to-wit: FOR THE YEAR A TAX SUFFICIENT TO PRODUCE THE SUM OF: 2020 454,057.00 for interest up to and including December 15, 2021 2021 454,057.00 for interest and principal 2022 454,057.00 for interest and principal 2023 454,057.00 for interest and principal 2024 454,057.00 for interest and principal 2025 454,057.00 for interest and principal 2026 454,057.00 for interest and principal 2027 454,057.00 for interest and principal 2028 454,057.00 for interest and principal Principal or interest maturing at any time when there are not sufficient funds on hand from the foregoing tax levy to pay the same shall be paid from the general funds of the City, and the fund from which such payment was made shall be reimbursed out of the taxes hereby levied when the same shall be collected. 19- The City covenants and agrees with the purchasers and the holders 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 ability of the City to levy and collect the foregoing tax levy and the City and its officers will comply with all present and future applicable laws in order to assure that the foregoing taxes will be levied, extended and collected as provided herein and deposited in the fund established to pay the principal of and interest on the Bonds. To the extent that the Pledged Taxes levied above exceed the amount necessary to pay debt service on the Bonds as set forth in the Bond Notification, the Mayor, City Clerk and Treasurer are hereby authorized to direct the abatement of such taxes to the extent of the excess of such levy in each year over the amount necessary to pay debt service on the Bonds in the following bond year. Proper notice of such abatement shall be filed with the County Clerk of The County of McHenry, Illinois (the "County Clerk"), in a timely manner to effect such abatement. In the event that funds from any other lawful source are made available for the purpose of paying any principal of or interest on the Bonds so as to enable the abatement of the taxes levied herein for the payment of same, the City Council shall, by proper proceedings, direct the transfer of such funds to the hereinafter defined Bond Fund, and shall then further direct the abatement of the taxes by the amount so deposited. The City covenants and agrees that it will not direct the abatement of taxes until money has been deposited into the Bond Fund in the amount of such abatement. A certified copy or other notification of any such proceedings abating taxes may then be filed with the County Clerk in a timely manner to effect such abatement. Section 11. Filing with County Clerk and Certificate of Reduction of Taxes. Forthwith upon the passage of this Ordinance,the City Clerk is hereby directed to file a certified copy of this Ordinance with the County Clerk; and the County Clerk shall in and for each of the years 2020 to 2028,inclusive, ascertain the rate necessary to produce the tax herein levied; and the County Clerk 20- 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, subject to abatement as stated hereinabove, in said years such annual tax shall be levied and collected by and for and on behalf of the City in like manner as taxes for general corporate purposes for said years are levied and collected, and in addition to and in excess of all other taxes, and when collected, the taxes hereby levied shall be placed to the credit of a special fund to be designated "Bond and Interest Fund Account of 2020" (the "Bond Fund"), which taxes are hereby irrevocably pledged to and shall be used only for the purpose of paying the principal of and interest on the Bonds. The Mayor, City Clerk and Treasurer be and the same are hereby directed to prepare and file with the County Clerk, a Certificate of Reduction of Taxes Heretofore Levied for the Payment of Bonds showing the Prior Bonds being refunded and directing the abatement of the taxes heretofore levied to pay the Refunded Bonds. Section 12. Use of Bond Proceeds; Use of Taxes Heretofore Levied. Accrued interest, if any, received on the delivery of the Bonds is hereby appropriated for the purpose of paying first interest due on the Bonds and is hereby ordered deposited into the Bond Fund. Simultaneously with the delivery of the Bonds, the principal proceeds of the Bonds, together with any premium received from the sale of the Bonds and such additional amounts as may be necessary from the general funds of the City, are hereby appropriated to pay the costs of issuance of the Bonds and for the purpose of refunding the Refunded Bonds, and that portion thereof not needed to pay such costs is hereby ordered deposited with the paying agent for the Refunded Bonds as set forth in the Bond Notification or in escrow pursuant to an escrow agreement to be entered into between the City and The Bank of New York Mellon Trust Company,National Association, Chicago, Illinois, as escrow agent (the "Escrow Agent"), in substantially in the form attached hereto as Exhibit C the "Escrow Agreement") and made a part hereof by this reference, or with such changes therein 21- as shall be approved by the officers of the City executing the Escrow Agreement, such execution to constitute evidence of the approval of such changes for the purpose of paying the principal of and interest on the Refunded Bonds when due and upon redemption prior to maturity, as more fully set forth in the Escrow Agreement. The City Council approves the form,terms and provisions of the Escrow Agreement and directs the Mayor and the City Clerk to execute, attest, seal and deliver the Escrow Agreement in the name and on behalf of the City. Amounts in the escrow may be used to purchase Government Securities (as defined in the Escrow Agreement) to provide for the principal payable on the Refunded Bonds upon redemption thereof. The Escrow Agent and the Purchaser are each hereby authorized to act as agent for the City in the purchase of the Government Securities. At the time of issuance of the Bonds,the costs of issuance of the Bonds may be paid by the Purchaser or the Bond Registrar on behalf of the City from the proceeds of the Bonds. All proceeds received or to be received from any taxes heretofore levied to pay principal and interest on the Refunded Bonds, including the proceeds received or to be received from the taxes levied for the year 2019 for such purpose, shall be used to pay the principal of and interest on the Refunded Bonds and to the extent that such proceeds are not needed for such purpose because of the establishment of the escrow, the same shall be deposited into the Bond Fund and used to pay principal and interest on the Bonds in accordance with all of the provisions of this Ordinance. Section 13. 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 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, 22- 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 (the "IRS") of the exemption from Federal income taxation for interest paid on the Bonds, under present rules, the City may be treated as a "taxpayer" in such examination and agrees that it will respond in a commercially reasonable manner to any inquiries from the IRS 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 City Council hereby authorizes the officials of the City responsible for issuing the Bonds,the same being the Mayor and City Clerk,to make such further covenants and certifications regarding the specific use of the proceeds of the Bonds as approved by the City Council and 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 City Council further agree: (a)through their officers, to make such further specific covenants,representations as shall be truthful,and assurances as may be necessary or advisable; (b)to consult with counsel approving the 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 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. 23- Section 14. Bank Qualification. The City recognizes the provisions of Section 265(b)(3) of the Code which provide that a "qualified tax-exempt obligation" as therein defined may be treated by certain financial institutions as if it were acquired on August 7, 1986, for certain purposes. The City hereby designates each of such Bonds as may be from time to time outstanding for purposes of Section 265(b)(3) of the Code as a"qualified tax-exempt obligation" as provided therein. Section 15. List of Bondholders. The Bond Registrar shall maintain a list of the names and addresses of the holders of all Bonds and upon any transfer shall add the name and address of the new Bondholder and eliminate the name and address of the transferor Bondholder. Section 16. Duties ofBond Registrar. If requested by the Bond Registrar,the Mayor and City Clerk of the City 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 which may 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; c) to give notice of redemption of the Bonds as provided herein; d) to cancel and/or destroy Bonds which have been paid at maturity or submitted for exchange or transfer; e) to furnish the City at least annually a certificate with respect to Bonds cancelled and/or destroyed; and f) to furnish the City at least annually an audit confirmation of Bonds paid, Bonds outstanding and payments made with respect to interest on the Bonds. Section 17. Continuing Disclosure Undertaking. The Mayor or the Treasurer of the City is hereby authorized, empowered and directed to execute and deliver the Continuing Disclosure 24- Undertaking (the "Continuing Disclosure Undertaking") in substantially the form set forth as Exhibit D to this Ordinance, attached hereto, or with such changes therein as the officer executing the Continuing Disclosure Undertaking on behalf of the City shall approve, his or her execution thereof to constitute conclusive evidence of his or her approval of such changes. When the Continuing Disclosure Undertaking is executed and delivered on behalf of the City as herein provided, the Continuing Disclosure Undertaking will be binding on the City and the officers, employees and agents of the City, and the officers, employees and agents of the City are hereby authorized, empowered and directed to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of the Continuing Disclosure Undertaking as executed. Notwithstanding any other provision of this Ordinance, the sole remedies for failure to comply with the Continuing Disclosure Undertaking shall be the ability of the beneficial owner of any Bond to seek mandamus or specific performance by court order to cause the City to comply with its obligations under the Continuing Disclosure Undertaking. Section 18. 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 City Council 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 25- with the federal tax requirements applicable to each issue of the Tax Advantaged Obligations. The City Council and the City hereby adopt the following Record-Keeping Policy and, in doing so, amend any similar Record-Keeping Policy or Policies heretofore adopted: a) Compliance Officer is Responsible for Records. The Treasurer (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 City Council 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 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 City with respect to each issue of Tax Advantaged Obligations and shall prepare a report for the City Council 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 City Council. 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 26- 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 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 City Council 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. 27- 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 City Council, 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 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 City Council. 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. 28- Section 20. Call of the Refunded Bonds. In accordance with the redemption provisions of the bond ordinances authorizing the Prior Bonds,the City by the City Council 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 and payment prior to maturity on December 15, 2020 (or such other date as set forth in the Escrow Agreement). REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 29- Section 21. Superseder and Effective Date. All ordinances, resolutions, and orders, or parts thereof, in conflict herewith, are to the extent of such conflict hereby superseded; and this Ordinance shall be in full force and effect immediately upon its passage and approval. ADOPTED: October 5, 2020 AYES: NAYS: ABSTENTION: ABSENT: Approved: October 5, 2020 Mayor, City of McHenry, McHenry County, Illinois ATTEST: City Clerk, City of McHenry, McHenry County, Illinois Recorded in the City Records on October 5, 2020. 30- LIST OF EXHIBITS: A-BOND NOTIFICATION B-BOND PURCHASE AGREEMENT C-ESCROW AGREEMENT D-CONTINUING DISCLOSURE UNDERTAKING STATE OF ILLINOIS SS COUNTY OF MCHENRY ) CERTIFICATION OF AGENDA,MINUTES AND ORDINANCE I, the undersigned, do hereby certify that I am the duly qualified and acting City Clerk of the City of McHenry, McHenry County, Illinois (the "City"), and as such official I am the keeper of the official journal of proceedings, books, records, minutes and files of the City and of the City Council (the "City Council") of the City. I do further certify that the foregoing extract of minutes is a full, true and complete transcript of that portion of the minutes of the meeting (the "Meeting") of the City Council held on the 5th day of October, 2020 insofar as the same relates to the adoption of an ordinance, numbered entitled: AN ORDINANCE providing for the issuance of not to exceed 3,300,000 General Obligation Refunding Bonds, Series 2020A, of the City of McHenry, McHenry County, Illinois, for the purpose of refunding certain outstanding general obligation bonds of said City, providing for the levy and collection of a direct annual tax sufficient to pay the principal of and interest on said bonds, authorizing and directing the execution of an escrow agreement in connection with the issuance of said bonds, and authorizing the sale of said bonds to Robert W. Baird & Co. Incorporated. the "Ordinance")a true,correct and complete copy of which Ordinance as adopted at the Meeting appears in the foregoing transcript of the minutes of the Meeting. I do further certify that the deliberations of the City Council on the adoption of the Ordinance were taken openly; that the vote on the adoption of the Ordinance was taken openly; that the Meeting was held at a specified time and place convenient to the public; that notice of the Meeting was duly given to all newspapers, radio or television stations, and other news media requesting such notice; that an agenda(the "Agenda") for the Meeting was posted at the location where the Meeting was held and at the principal office of the City Council (both such locations being at City Hall) on a day which was not a Saturday, Sunday or legal holiday for Illinois municipalities and at least 72 hours in advance of the meeting and remained so posted continuously until adjournment of the Meeting; that the Agenda contained a specific action item relating to the Bonds; that a true and complete copy of the Agenda is attached hereto; that the Meeting was called and held in strict compliance with the provisions of the Open Meetings Act of the State of Illinois, as amended; and the Illinois Municipal Code, as amended; and that the City Council have complied with all of the provisions of such act and code and with all of the procedural rules of the City Council in the adoption of the Ordinance. IN WITNESS WHEREOF I hereunto affix my official signature and the seal of the City this 5th day of October, 2020. City Clerk SEAL] Attachments: Agenda, Minutes, Ordinance] 2- STATE OF ILLINOIS SS COUNTY OF MCHENRY ) FILING CERTIFICATE I, the undersigned, do hereby certify that I am the duly qualified and acting County Clerk of The County of McHenry, Illinois, and as such official I do further certify that on the day of 2020, there was filed in my office a duly certified copy of Ordinance No.entitled: AN ORDINANCE providing for the issuance of not to exceed 3,300,000 General Obligation Refunding Bonds, Series 2020A, of the City of McHenry, McHenry County, Illinois, for the purpose of refunding certain outstanding general obligation bonds of said City, providing for the levy and collection of a direct annual tax sufficient to pay the principal of and interest on said bonds, authorizing and directing the execution of an escrow agreement in connection with the issuance of said bonds, and authorizing the sale of said bonds to Robert W. Baird & Co. Incorporated. duly adopted by the City Council of the City of McHenry, McHenry County, Illinois, on the 5th day of October, 2020, and approved by the Mayor, and that the same has been deposited in (and all as appearing from) the official files and records of my office. IN WITNESS WHEREOF, I hereunto affix my official signature and the seal of said County, this day of 2020. County Clerk of The County of McHenry, Illinois SEAL] Department of Community Development4:0 McHenry Municipal Center 333 Green Street McHenry, Illinois 60050 Phone: (815) 363-2170 Fax: (815) 363-2173 McI—Ienr www.cityofmchenry.org DISCUSSION AGENDA SUPPLEMENT TO:Mayor and City Council FOR: October 5, 2020 Regular City Council Meeting FROM: Cody Sheriff, City Planner RE:First Midwest Bank Redevelopment (7-Eleven) — Conceptual Presentation and Discussion ATT: 1.Original Site Plan and Building Elevations 2.Revised Site Plan & Building Elevations AGENDA ITEM SUMMARY: The applicants, McHenry 3510 LLC & McHenry LFI LLC, are requesting preliminary feedback for the redevelopment of the First Midwest Bank site located at 3510 W Elm Street. The subject property will need to receive approval of a Conditional Use Permit for the operation of an automobile fueling station in conjunction with a 7-Eleven convenience store and Laredo Taco. BACKGROUND: The Planning and Zoning Commission recommended approval of the applicants' request for a Conditional Use Permit for the operation of an automobile fueling station on June 17, 2020. After the public hearing, the applicants decided to revise the site plan to screen the pumps from view of Green Street. As a result, the new layout will need to go back to the Planning & Zoning Commission for a recommendation. Prior to returning to the Planning&Zoning Commission, the applicants are requesting preliminary feedback on the conceptual layout and building elevations. DEVELOPMENT REVIEW PROCESS: City Council is being asked for informal input regarding the revised site plan and building elevations. The applicants will then incorporate feedback into the proposal prior to returning to the Planning & Zoning Commission for a public hearing on October 21, 2020 and, based on the outcome from this meeting, return to City Council with a recommendation on November 2, 2020. 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