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HomeMy WebLinkAboutOrdinances - 20-36 - 10/05/2020 - Pension Bonds ORDINANCE NUMBER 20-36 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 23 SECTION 14. TAX LEVY;ABATEMENTS 23 SECTION 15. FILING WITH COUNTY CLERK 25 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 29 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 20-36 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 2020E 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 of Bonds; 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 of Bond 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: -5-4144:, C146, Saa,Ie, Alarc1(0) /h:4(vel P',i,M f Il ete NAYS: ABSENT: ADOPTED: October 5, 2020 APPROVED: October 5, 2020 A /' Mayor, C f cHenry McHenry County, Illinois RECORDED In City Records: October 5, 2020. Attest: ii/�q /14w� 61( % i City Clerk, City of McHenry /444 (-It et 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 20-36, 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. isGL # 4 mac/ 6y 4•Ps«.....- City Clerk Pp.*, cleric [SEAL] [Attachments: Agenda, Minutes, Ordinance] -2- 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: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding, Alderman Mihevc, Alderman Devine, Alderwoman Miller. 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: none. 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: none. 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 Schaefer 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 Schaefer moved and Alderman Hading seconded the motion that the Bond Ordinance as presented be adopted. A City Council discussion of the matter followed. During the City Council discussion, Director of Finance Carolyn Lynch 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. -2- Upon the roll being called, the following Aldermen voted AYE: Alderman Santi, Alderman Glab, Alderman Schaefer, Alderman Harding, Alderman Mihevc, Alderman Devine, Alderwoman Miller, and the following Aldermen voted NAY: none. 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. }, do-me r b y Platt a City Clerk 447 <l -3- 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]