HomeMy WebLinkAboutOrdinances - ORD-10-1511 - 08/30/2010 - ISSUE $5.665M GO BONDS SERIES 2010CORDINANCE NUMBER ORD-10-1511
AN ORDINANCE providing for the issuance of $5,665,000 Taxable
General Obligation Bonds, Series 2010C, of the City of McHenry,
McHenry County, Illinois, and providing for the levy and
collection of a direct annual tax for the payment of the principal of
and interest on said bonds.
Adopted by the City Council on the
30th day of August, 2010.
TABLE OF CONTENTS
SECTION
HEADING
PAGE
PREAMBLES......................................................................................................................................1
SECTION1.
DEFINITIONS.............................................................................................................2
SECTION 2.
INCORPORATION OF PREAMBLES...............................................................................4
SECTION 3.
DETERMINATION TO ISSUE BONDS............................................................................4
SECTION4.
BOND DETAILS.........................................................................................................4
SECTION 5.
EXECUTION; AUTHENTICATION................................................................................6
SECTION 6.
REGISTRATION AND EXCHANGE OR TRANSFER OF BONDS; PERSONS
TREATEDAS OWNERS..........................................................................................6
SECTION7.
REDEMPTION............................................................................................................10
SECTION 8.
REDEMPTION PROCEDURE......................................................................................12
SECTION9.
FORM OF BOND.......................................................................................................14
SECTION 10.
SECURITY FOR THE BONDS......................................................................................20
SECTION 11.
TAX LEVY; ABATEMENT.........................................................................................20
SECTION 12.
FILING WITH COUNTY CLERK.................................................................................21
SECTION13.
SALE OF BONDS......................................................................................................22
SECTION 14.
CREATION OF FUNDS AND APPROPRIATIONS...........................................................22
SECTION 15.
NOT PRIVATE ACTIVITY BONDS.............................................................................23
SECTION16.
REIMBURSEMENT....................................................................................................24
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SECTION 17. REGISTERED FORM.................................................................................................24
SECTION 18. LION -ARBITRAGE AND TAX COMPLIANCE...............................................................25
SECTION 19. BUILD AMERICA PAYMENTS ...................................................................................26
SECTION 20. COVENANTS AND REPRESENTATIONS RE: QUALIFIED BUILD AMERICA
BONDSSTATUS.................................................................................................26
SECTION 21. RIGHTS AND DUTIES OF BOND REGISTRAR AND PAYING AGENT ............................27
SECTION 22. DEFEASANCE..........................................................................................................27
SECTION 23. CONTINUING DISCLOSURE UNDERTAKING..............................................................28
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SECTION 24. MUNICIPAL BOND INSURANCE................................................................................29
SECTION 25. RECORD -KEEPING POLICY AND POST -ISSUANCE COMPLIANCE
MATTERS..........................................................................................................29
SECTION26. SEVERABILITY..........................................................................................................32
SECTION27. REPEALER...............................................................................................................32
SECTION 28. EFFECTIVE DATE....................................................................................................35
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ORDINANCE NUMBER
AN ORDINANCE providing for the issuance of $5,665,000 Taxable
General Obligation Bonds, Series 2010C, of the City of McHenry,
McHenry County, Illinois, and providing for the levy and
collection of a direct annual tax for the payment of the principal of
and interest on said bonds.
WHEREAS by virtue of its population and 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; 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 Council of the City (the "Council") has considered the needs of the
City and has heretofore determined and does hereby determine that it is advisable, necessary and
in the best interests of the City to fund certain capital improvements to the City's two wastewater
treatment plants, including a force main to connect the two plants (the "Project'); and
WHEREAS the estimated cost to the City of the Project, including costs of issuance for the
hereinafter defined Bonds, is the sum of $5,665,000 plus any estimated available amount of
interest earnings on said sum prior to its expenditure; and
WHEREAS there are insufficient funds on hand and available to pay the costs of the
Project, and it is necessary for that purpose that a sum to pay such costs be borrowed at this time,
and in evidence of such indebtedness, general obligation bonds of the City be issued in the
principal amount of $5,665,000, and that such indebtedness be incurred in accordance with the
Act as hereinafter defined, and without submitting the question of incurring such indebtedness to
the electors of the City for their approval; and
WHEREAS the Council does hereby determine that it is advisable and in the best interests
of the City to borrow $5,665,000 at this time pursuant to the Act for the purpose of paying the
costs of the Project and, in evidence of such borrowing, issue its full faith and credit bonds in the
principal amount of $5,665,000;
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. In addition to such other words and terms used and defined in
this Ordinance, the following words and terms used in this Ordinance shall have the following
meanings, unless, in either case, the context or use clearly indicates another or different meaning
is intended:
"Act" means, collectively, the Illinois Municipal Code, as supplemented and amended,
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 said code and home rule powers, the
home rule powers shall be deemed to supersede the provisions of said code.
"Bond" or "Bonds" means one or more, as applicable, of the $5,665,000 Taxable
General Obligation Bonds, Series 2010C, authorized to be issued by this Ordinance.
"Bond Fund" means the Bond Fund established and defined in Section 14 of this
Ordinance.
"Bond Register" means the books of the City kept by the Bond Registrar to evidence the
registration and transfer of the Bonds.
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"Bond Registrar" means The Bank of New York Mellon Trust Company, National
Association, Chicago, Illinois, or a successor thereto or a successor designated as Bond Registrar
hereunder.
"City " means the City of McHenry, McHenry County, Illinois.
"Code " means the Internal Revenue Code of 1986, as amended.
"Council" means the City Council of the City.
"County Clerk" means the County Clerk of The County of McHenry, Illinois.
"Ordinance" means this Ordinance, numbered as set forth on the title page hereof, and
passed by the Council on the 30th day of August, 2010.
"Paying Agent" means The Bank of New York Mellon Trust Company, National
Association, Chicago, Illinois, or a successor thereto or a successor designated as Paying Agent
hereunder.
"Pledged Taxes " means the taxes levied on the taxable property within the City to pay
principal of and interest on the Bonds as provided in Section 9 hereof.
"Private Business Use" means any use of any portion of the Project by any person other
than a state or local governmental unit, including as a result of (1) ownership, (ii) actual or
beneficial use pursuant to a lease or a management, service, incentive payment, research or
output contract or (iii) any other similar arrangement, agreement or understanding, whether
written or oral, except for use of any portion of the Project on the same basis as the general
public. "Private Business Use" includes any formal or informal arrangement with any person
other than a state or local governmental unit that conveys special legal entitlements to any
portion of the Project that is available for use by the general public or that conveys to any person
other than a state or local governmental unit any special economic benefit with respect to any
portion of the Project that is not available for use by the general public.
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"Project " means the capital expenditures as described and defined as such in the
preambles to this Ordinance.
Section 2. Incorporation of Preambles. The 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 3. Determination to Issue Bonds. It is necessary and in the best interests of the
City to acquire and construct the Project, to pay all related costs and expenses incidental thereto,
and to borrow money and issue the Bonds for such purposes. It is hereby found and determined
that such borrowing of money is necessary for the welfare of the government and affairs of the
City, 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. For the purpose of providing for such costs, there shall be
issued and sold the Bonds in the principal amount of $5,665,000. The Bonds shall be issued in
one series and shall be designated "Taxable General Obligation Bonds, Series 2010C". The
Bonds shall be dated the date of issuance thereof (the "Dated Date "); and shall also bear the date
of authentication thereof. The Bonds shall be issued and sold in the principal amount of
$5,665,000, shall be in fully registered 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 become due and payable on December 15 of the years and in the amounts and bearing
interest at the rates percent per annum as follows:
YEAR
AMOUNT (S)
RATE (%)
2011
175,000
1.00
2012
230,000
1.20
2013
235,000
1.55
2014
235,000
1.90
2015
245,000
2.25
2016
250,000
2.65
2017
255,000
2.85
2018
265,000
3.20
2019
275,000
3.45
2020
285,000
3.65
2022
610,000
4.05
2024
665,000
4.55
2026
725,000
4.80
2029
1,215,000
5.25
Each Bond shall bear interest
from the later of its Dated Date as herein provided or from
the most recent interest payment date to which interest has been paid or duly provided for, until
the principal amount of such Bond is paid or duly provided for, such interest (computed upon the
basis of a 360-day year of twelve 30-day months) being payable on June 15 and December 15 of
each year, commencing on June 15, 2011. Interest on each Bond shall be paid by check or draft
of the Paying Agent, 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
applicable Record Date (the "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. The Record Date shall be the 1st day of the month of any regular or other interest
payment date occurring on the 15th day of any month and 15 days preceding, any interest
payment date occasioned by the redemption of Bonds on other than the 15th day of a month.
The principal of the Bonds shall be payable in lawful money of the United Staters of America
upon presentation thereof at the principal corporate trust office of the Paying Agent, or at
successor Paying Agent and locality.
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Section 5. Execution; Authentication. The Bonds shall be executed on behalf of the
City by the manual or facsimile signature of its Mayor and attested by the manual or facsimile
signature of its City Clerk, as they may determine, and shall have impressed or imprinted thereon
the corporate seal or facsimile thereof of the City. In case any 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. The certificate of authentication on any Bond shall be deemed to have been executed
by it if signed by an authorized officer of the Bond Registrar, but it shall not be necessary that
the same officer sign the certificate of authentication on all of the Bonds issued hereunder.
Section 6. Registration and Exchange or Transfer of Bonds; Persons Treated as
Owners. (a) General. The City shall cause books 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 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.
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Any 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 this Ordinance. Upon surrender for
transfer or exchange 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 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
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representative. All such payments shall be valid and effectual to satisfy and discharge the
liability upon such Bond to the extent of the sum or sums so paid.
No service charge shall be made for any transfer or exchange of Bonds, but the City or
the Bond Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or exchange of Bonds,
except in the case of the issuance of a Bond or Bonds for the unredeemed portion of a Bond
surrendered for redemption.
(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 4 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. The Mayor, City Clerk and
Treasurer of the City and the Bond Registrar are each 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 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 4 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.
M
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 (ill) 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
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 6(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 7. Redemption. (a) Mandatory Redemption. The Bonds due on December 15,
2022, 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
December 15, 2021, in the principal amount of $300,000.
The Bonds due on December 15, 2024, 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
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accrued interest to the redemption date, on December 15, 2023, in the principal amount of
$325,000.
The Bonds due on December 15, 2026, 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 December 15, 2025, in the principal amount of
$355,000.
The Bonds due on December 15, 2029, 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 December 15 of the years and in the principal
amounts as follows:
YEAR PRINCIPAL AMOUNT
2027 $385,000
2028 405,000
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
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.
(b) Optional Redemption. The Bonds maturing on or after December 15, 2022, are
subject to redemption prior to maturity at the option of the City as a whole, or in part in any
order of maturity determined by the City (less than all of the Bonds of a single maturity to be
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selected by the Bond Registrar), on December 15, 2020, or on any date thereafter, at the
redemption price of par plus accrued interest to the date of redemption.
Section 8. Redemption Procedure. The City shall, at least 45 days prior to the
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. 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 not
more than 60 days prior to the redemption date 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, however, 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 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 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 full name of the Bonds and at least the
information as follows:
(a) the redemption date;
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(b) the redemption price;
(c) 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;
(d) a statement 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;
(e) 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 Paying Agent; and
(f) 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 shall
have been received by the Paying Agent 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 Paying Agent 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 deposit with the
Paying Agent 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
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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 Paying
Agent 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 a 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. All Bonds which have been redeemed shall be cancelled and destroyed by the Bond
Registrar and shall not be reissued.
As part of their respective duties hereunder, the Bond Registrar and Paying Agent shall
prepare and forward to the City a statement as to notice given with respect to each redemption
together with copies of the notices as mailed and published.
Section 9. Form of Bond. The Bonds shall be in substantially the form hereinafter set
forth; provided, however, that if the text of the Bonds is to be printed in its entirety on the front
side of the Bonds, then the second paragraph on the front side and the legend "See Reverse Side
for Additional Provisions" shall be omitted and the text of paragraphs set forth for the reverse
side shall be inserted immediately after the first paragraph.
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[FORM OF BOND - FRONT SIDE]
REGISTERED REGISTERED
No. $
UNITED STATES OF AMERICA
STATE OF ILLINOIS
THE COUNTY OF MCHENRY
CITY OF MCHENRY
TAXABLE GENERAL OBLIGATION BOND, SERIES 2010C
See Reverse Side for
Additional Provisions.
Interest Maturity
Rate: % Date: December 15,
Registered Owner: CEDE & CO.
Principal Amount:
Dated
Date: September 15, 2010 CUS1P: 581170
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, 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, 2011, 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 paying agent (the "Paying Agent"'). Payment of interest shall
be made to the Registered Owner hereof as shown on the registration books of the City
maintained by The Bank of New York Mellon Trust Company, National Association, Chicago,
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Illinois, as bond registrar (the `Bond Registrar"), at the close of business on the applicable
Record Date (the "Record Date "). The Record Date shall be the 1 st day of the month of any
regular or other interest payment date occurring on the 15th day of any month and 15 days
preceding any interest payment date occasioned by the redemption of Bonds on other than the
15th day of a month. Interest shall be paid by check or draft of the Paying Agent, payable upon
presentation in lawful money of the United States of America, mailed to the address of such
Registered Owner as it appears on such registration books or at such other address furnished in
writing by such Registered Owner to the Bond Registrar.
Reference is hereby made to the further provisions of this Bond set forth on the reverse
hereof, and such further provisions shall for all purposes have the same effect as if set forth at
this place.
It is hereby certified and recited that all 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 authorizing Act, have existed and have been properly done,
happened and been performed in regular and due form and time as required by l-aw; 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 pa;y the interest
hereon as the same falls due and also to pay and discharge the principal hereof at maturity.
This Bond shall not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been signed by the Bond Registrar.
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IN WITNESS WHEREOF the City of 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]
Date of Authentication: 520
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 2010C, having a Dated Date of September 15,
2010, of the City of McHenry, McHenry County, Illinois.
Bond Registrar and Paying Agent:
The Bank of New York Mellon
Trust Company, National
Association, Chicago, Illinois
THE BANK OF NEW YORK MELLON TRUST
COMPANY, NATIONAL ASSOCIATION,
as Bond Registrar
Lo
.Authorized Officer
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[FORM OF BOND - REVERSE SIDE]
This bond is one of a series of bonds (the "Bonds") in the aggregate principal amount of
$5,665,000 issued by the City for the purpose of paying the costs of the Project and of paying
expenses incidental thereto, 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, 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 (such code and powers
collectively, being the "Act"), and with the Ordinance, which has been duly passed. by the City
• Council of the City and approved by the Mayor.
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. Upon surrender for
transfer or exchange of this Bond at the principal corporate trust office of the Bond Registrar,
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.
Certain of the Bonds are subject to optional and mandatory redemption as set forth in the
Ordinance. Notice of any such redemption shall be given by the Bond Registrar on behalf of the
City as set forth in the Ordinance.
The City, the Bond Registrar and the Paying Agent 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, the
Bond Registrar and the Paying Agent shall not be affected by any notice to the contrary.
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.
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Section 10. Security for the Bonds. The Bonds are a general obligation of the City, for
which the full faith and credit of the City are hereby irrevocably pledged, and are payable from
the levy of taxes on all of the taxable property in the City, without limitation as to rate or
amount.
Section 11. 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 taxes (the Pledged Taxes as hereinabove defined):
FOR THE YEAR A TAX SUFFICIENT TO PRODUCE THE DOLLAR SUM OF:
2010
$ 348,828.30
for interest and principal up to and
including December 15, 2011
2011
$ 367,925.14
for interest and principal
2012
$ 371,131.14
for interest and principal
2013
$ 368,763.50
for interest and principal
2014
$ 375,861.26
for interest and principal
2015
$ 377,278.14
for interest and principal
2016
$ 377,971.88
for interest and principal
2017
$ 383,248.00
for interest and principal
2018
$ 387,736.00
for interest and principal
2019
$ 391,569.14
for interest and principal
2020
$ 399,807.50
for interest and principal
2021
$ 401,910.00
for interest and principal
2022
$ 408,749.26
for interest and principal
2023
$ 414,137.38
for interest and principal
2024
$ 419,081.88
for interest and principal
2025
$ 423,005.88
for interest and principal
2026
$ 426,461.88
for interest and principal
2027
$ 433,323.76
for interest and principal
2028
$ 439,503.14
for interest and principal
The Pledged Taxes and other moneys on deposit in the Bond Fund shall be applied to pay the
principal of and interest on the Bonds.
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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 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. 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 Fund. •
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 Council shall, by proper proceedings, direct the deposit of
such funds into the Bond Fund and further shall direct the abatement of the taxes by the amount
so deposited. 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 12. Filing with County Clerk. Promptly, as soon as this Ordinance becomes
effective, a copy hereof, certified by the City Clerk of the City, shall be filed with the County
Clerk; and the County Clerk shall in and for each of the years 2010 to 2028, inclusive, ascertain
the rate percent required to produce the aggregate tax hereinbefore provided to be levied in each
of said years; and the County Clerk shall extend the same for collection on the tax books in
connection with other taxes levied in said years in and by the City for general corporate purposes
of the City; and in said years such annual tax shall be levied and collected by and for and on
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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.
Section 13. Sale of Bonds. The Bonds hereby authorized shall be executed as in this
Ordinance provided as soon after the passage hereof as may be, and thereupon be deposited with
the Treasurer of the City, and be by said Treasurer delivered to Robert W. Baird & Co.,
Milwaukee, Wisconsin, the purchaser thereof (the "Purchaser"), upon receipt of the purchase
price therefor, the same being $5,619,680; the contract for the sale of the Bonds heretofore
entered into (the "Purchase Contract') is in all respects ratified, approved and confirmed, it
being hereby found and determined that the Bonds have been sold at such price and bear interest
at such rates that neither the true interest cost (yield) nor the net interest rate received upon such
sale exceed the maximum rate otherwise authorized by Illinois law and that the Purchase
Contract is in the best interests of the City and that no person holding any office of the City,
either by election or appointment, is in any manner financially interested directly in his own
name or indirectly in the name of any other person, association, trust or corporation, in the
Purchase Contract.
The use by the Purchaser of any Preliminary Official Statement and any final Official
Statement relating to the Bonds (the "Official Statement") is hereby ratified, approved and
authorized; the execution and delivery of the Official Statement is hereby authorized; and the
officers of the Council are hereby authorized to take any action as may be required on the part of
the City to consummate the transactions contemplated by the Purchase Contract, this Ordinance,
said Preliminary Official Statement, the Official Statement and the Bonds.
Section 14. Creation of Funds and Appropriations. The proceeds derived from the sale
of the Bonds shall be used as follows:
A. Accrued interest and premium, if any, on the Bonds shall be and is hereby
appropriated for the purpose of paying the first interest due on the Bonds, and to such end
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is hereby ordered to be deposited into the "Taxable General Obligation Bonds,
Series 2010C, Bond Fund" (the "Bond Fund"), hereby created which shall be the fund
for the payment of principal of and interest on the Bonds. In addition -0- of the proceeds
of the Bonds is hereby appropriated as capitalized interest on the Bonds and shall be
deposited into the Bond Fund.
The Pledged Taxes shall either be deposited into the Bond Fund 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 Fund 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 Fund shall be retained in the Bond Fund 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 and as determined by the
Council, transferred to such other fund as may be determined subject, however, to the tax
covenants set forth herein. The City hereby pledges, as equal and ratable security for the
Bonds, all present and future proceeds of the Pledged Taxes for the sole benefit of the
registered owners of the Bonds, subject to the reserved right of the Council to transfer
certain interest income or investment profit earned in the Bond Fund to other funds of the
City, as described in the preceding sentence.
B. The balance of the proceeds of the Bonds shall be set aside in a separate
fund, hereby created, and designated as the " 2010 Capital Improvement Project Fund"
(the "Project Fund"). Money in the Project Fund shall be used to pay all costs of the
Project and all costs and expenses incidental or allocable or related thereto, including all
costs of issuance of the Bonds. The Council reserves the right, as it becomes necessary
from time to time, to revise the list of expenditures hereinabove set forth, to change
priorities, to revise cost allocations between expenditures and to substitute projects, in
order to meet current needs of the City; subject, however, to the tax covenants set forth
herein.
Section 15. Not Private .Activity Bonds. None of the Bonds is a "private activity bond"
as defined in Section 141(a) of the Code. In support of such conclusion, the City certifies,
represents and covenants as follows:
A. None of the proceeds of the Bonds, plus investment earnings thereon, will
be or was used in any Private Business Use.
B. No direct or indirect payments are to be made on any Bond with respect to
any Private Business Use.
C. None of the proceeds of the Bonds is to be used, directly or indirectly, to
make or finance loans to persons other than a state or local governmental unit.
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D. No user of the Project other than the City or another governmental unit will
use the same on any basis other than the same basis as the general public; and no person
other than the City or another governmental unit will be a uses- of the Project or as a result
of (i) ownership or (ii) actual or beneficial use pursuant to a lease, a management or
incentive payment contract, or (iii) any other arrangement.
E. Any restriction or covenant contained in this Section 15 need not be
observed or may be changed if such nonobservance or change will not result I'M the Bonds
failing to be "build America bonds" under Section 54AA(d) of the Code that are
"qualified bonds" under Section 54AA(g) of the Code, and the City receives an opinion
of a nationally recognized firm of attorneys experienced in the field of municipal bonds
whose opinions are generally accepted by purchasers of municipal bonds to such effect.
Section 16. Reimbursement. None of the proceeds of the Bonds will be used to pay,
directly or indirectly, in whole or in part, for an expenditure that has been paid by the City prior
to the date hereof except (i) architectural, engineering costs or similar costs incurred prior to
commencement of the Project to the extent such costs do not exceed twenty percent of the issue
price of the Bonds or (ii) expenditures for which an intent to reimburse was properly declared
under Treasury Regulation Section 1.150-2. This Ordinance is in itself a declaration of official
intent under Treasury Regulation Section 1.150-2 as to all costs of the Project paid no earlier
than 60 days prior to the date of adoption of this Ordinance and paid after the date hereof and
prior to issuance of the Bonds.
Section 17. Registered Form. The City recognizes that Section 149 of the Code
requires the Bonds to be issued and to remain in fully registered form in order to be "build
America bonds" within the meaning of Section 54AA of the Code. In this connection, the City
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agrees that it will not take any action to permit the Bonds to be issued in, or converted into,
bearer or coupon form.
Section 18. Non -Arbitrage and Tax Compliance. 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, a private activity bond or a federally guaranteed bond within the: meaning of
the Code or would otherwise cause the Bonds to fail to qualify as "build America bonds" within
the meaning of Section 54AA(d) of the Code that are "qualified bonds" within the: meaning of
Section 54AA(g) of the Code. The City acknowledges that, in the event of an examination by
the Internal Revenue Service of the status of the Bonds, the City will be treated as a "taxpayer"
in such examination and agrees that it will respond in a commercially reasonable manner to any
inquiries from the Internal Revenue Service in connection with such an examination.
The Council hereby authorizes the officials of the City responsible for issuing the Bonds,
including the Mayor, Treasurer of the City and City Clerk, to make such further covenants and
certifications as may be necessary to assure that the use thereof will not cause the Bonds to be
arbitrage bonds, private activity bonds or federally guaranteed bonds, and to assure that the City
receives the credit allowed under Section 6431 of the Code. In connection therewith, the City
and the 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, returns, statements, and
supporting documents as may be required and in a timely manner; and (e) if deemed necessary or
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advisable by their officers, to employ and pay fiscal agents, financial advisors, attorneys, and
other persons to assist the City in such compliance.
Section 19. Build America Payments. Under Section 6431 of the Code, an issuer of a
"Build America Bond" that is a "qualified bond" (a "Qualified Build America Bono"') can apply
to receive payments (the "Build America Payments ") directly from the Secretary of the
U.S. Treasury. The amount of a Build America Payment is set in Section 6431 of the Code at
35 percent of the corresponding interest payable on the related Qualified Build America Bond.
To receive each Build America Payment, under currently existing procedures, the City will have
to file a tax return (now designated Form 8038-CP) for each interest payment date, between 90
and 45 days prior to the corresponding bond interest payment date. Depending on the timing of
the filing, the Build America Payment may be received before or after the corresponding interest
payment date. The City and its officers will comply with all present and future applicable laws
in order to assure that the Build America Payments will be collected as provided herein and
deposited into the Bond Fund. If received by the City, the Build America Payments will be
revenues of the City and are not pledged to the payment of the Bonds.
Section 20. Covenants and Representations Re: Qualified Build America Bonds Status.
Although future actions and limitations on future actions in Sections 17 through 19 of this
Ordinance are presented as covenants, the City reserves the right to treat the Bonds as not being
"build America bonds" that are "qualified bonds" and if so, it has no obligation to follow these
covenants. No third parties, including bondholders, are beneficiaries of these covenants, though
the City recognizes that its bond counsel will rely upon the representations as to facts and
expectations contained in Sections 17 through 19. The City expects to comply with all covenants
contained in such Sections as though they were enforceable.
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Section 21. Rights and Duties of Bond Registrar and Paying Agent. If requested by the
Bond Registrar or the Paying Agent, or both, any officer of the City is authorized to execute
standard forms of agreements between the City and the Bond Registrar or Paying, Agent with
respect to the obligations and duties of the Bond Registrar or Paying Agent hereunder. In
addition to the terms of such agreements and subject to modification thereby, the Bond Registrar
and Paying Agent by acceptance of duties hereunder agree:
(a) to act as bond registrar, paying agent, authenticating agent, and transfer
agent as provided herein;
(b) as to the Bond Registrar, 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 give notice of redemption of Bonds as provided herein;
(d) as to the Bond Registrar, to cancel and/or destroy Bonds which have been
paid at maturity or upon redemption or submitted for exchange or transfer;
(e) as to the Bond Registrar, 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.
The City Clerk of the City is hereby directed to file a certified copy of this Ordinance
with the Bond Registrar and the Paying Agent.
Section 22. Defeasance. Any Bond or Bonds which (a) are paid and cancelled,
(b) which have matured and for which sufficient sums been deposited with the Paying Agent to
pay all principal and interest due thereon, or (c) for which sufficient Defeasance: Obligations
have been deposited with the Paying Agent or similar institution having trust powers to pay,
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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 art irrevocable
escrow or trust agreement, shall cease to have any lien on or right to receive or be paid from the
Pledged Taxes hereunder 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 federal tax status of the interest on Bonds; and
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 "), (ii) certificates of
participation or trust receipts comprised wholly of Directs or (c) other obligations
unconditionally guaranteed as to timely payment by the United States Treasury.
Section 23. Continuing Disclosure Undertaking. The Mayor or Treasurer of the City
are each hereby authorized, empowered, and directed to execute and deliver aL Continuing
Disclosure Undertaking under Section (b)(5) of Rule 15c2-12 adopted by the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Continuing Disclosure Undertaking"). When the Continuing Disclosure Undertaking is
executed and delivered on behalf of the City as herein provided, the Continuing Disclosure
Undertaking will be binding upon 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
ME
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 24. Municipal Bond Insurance. In the event the payment of principal of and
interest on the Bonds is insured pursuant to a municipal bond insurance policy (a "Municipal
Bond Insurance Policy") issued by a bond insurer (a "Bond Insurer"), and as long as such
Municipal Bond Insurance Policy shall be in full force and effect, the City arid 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 Bond Insurer upon
payment of the Bonds by the Bond Insurer, amendment hereof, or other terms, as approved by
the Mayor of the City on advice of counsel, his or her approval to constitute full, and complete
acceptance by the City of such terms and provisions under authority of this section.
Section 25. 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 or other bonds or debt obligations of the City (each a "Tax Advantaged Obligation"
and, collectively, the "Tax Advantaged Obligations'), certain of which may qualify as "build
America bonds" under the Code (the "Build America Bonds "). Further, it is necessary and in the
best interest of the City that (i) the Council adopt policies with respect to record -keeping and
(ii) the Compliance Officer (as hereinafter defined) shall at least annually review the City's
Contracts (as hereinafter defined) to determine whether the Tax Advantaged Obligations comply
with the federal tax requirements applicable to each issue of the Tax Advantaged Obligations.
A. Compliance Officer Is Responsible for Records. The Finance Director of
the City (the "Compliance Officer") is hereby designated as the keeper of all records of
the City with respect to each issue of the Tax Advantaged Obligations, and such officer
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shall report to the 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 (a) the
proceedings of the City authorizing the Tax Advantaged Obligations, (b) any offering
document with respect to the offer and sale of the Tax Advantaged Obligations, (c) any
legal opinions with respect to the Tax Advantaged Obligations delivered by any lawyers,
and (d) 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 Council stating whether or not the City has any rebate
liability to the U.S. 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 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 qualification of the Build
America Bonds as "build America bonds." 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 Build America Bonds qualify as "build America
bonds." Notwithstanding, any other policy of the City, such retained records shall be kept
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for as long as the Tax Advantaged Obligations relating to such records (and any
obligations issued to refund the Tax Advantaged Obligations) are outstanding, plus three
years, and shall at least include:
(i) complete copies of the bond transcripts delivered when any issue of
Tax Advantaged Obligations is initially issued and sold;
(ii) copies of account statements showing the disbursements of all bond
proceeds for their intended purposes;
(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;
(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 U.S. 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 U.S. Treasury together with any applicable IRS Form
8038-T; and
(vii) copies of all contracts and agreements of the City, including any
leases (the "Conti -acts "), with respect to the use of any property owned by the
City and acquired or financed with the proceeds of the Tax Advantaged
Obligations, any part of which property is used by a private person at any time
when such Tax Advantaged Obligations are or have been outstanding.
E. IRS Examination. In the event the Internal Revenue Service ("IRS")
commences an examination of any issue of Tax Advantaged Obligations, the Compliance
Officer shall inform the Council of such event, and is authorized to respond to inquiries
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of the IRS, and to hire outside, independent professional counsel to assist in the response
to the examination.
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 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. Amendment and Waiver. 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 Council.
Section 26. 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.
Section 27. Repealer. All ordinances, resolutions or orders, or parts thereof, in conflict
with the provisions of this Ordinance are to the extent of such conflict hereby repealed.
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Section 28. Effective Date. This Ordinance shall be in full force and effect immediately
upon its passage and approval.
AYES: SANTI, GLAB, SCHAEFER, BLAKE, WIMMER, PETERSON, CONDON
NAYS: NONE
ABSENT: NONE
ADOPTED: August 30, 2010
Recorded in City Records: August 30, 2010.
ATTEST:
Ace,, c'An "L
Cit� Cler'1\, City Of M enry
McHenry (Yount , Illi is
APPROVED: August 30, 2010
e
or, City of McHenryenry County, Illinois
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