HomeMy WebLinkAboutORDINANCES-2003-043-O-03ps
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ORDINANCE NUMBER
43-0-03
AN ORDINANCE providing for the issuance of not to exceed
$12,000,000 General Obligation Corporate Purpose Bonds,
Series 2003B, of the City of Evanston, Cook 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.
•
1495482-Bond Ordinance
2108496 • TVM • 5/2/03
Adopted by the City Council
on the 7th day of May 2003.
Published in Pamphlet Form by
the Authority of the City
Council on the 8th day of May
2003.
TABLE OF CONTENTS •
PAGE
Preambles.........................................................................................:.............................................. 1
Section1. Definitions...............................................................................................................
2
Section 2. Incorporation of Preambles.....................................................................................
5
Section 3. Determination to Issue Bonds.................................................................................
5
Section4. Bond Details............................................................................................................
6
Section 5. Book Entry Provisions............................................................................................ 7
Section 6. Execution; Authentication.......................................................................................
9
Section 7. Term Bonds, Mandatory Redemption and Covenants; Optional
Redemption...........................................................................................................
10
Section 8. Term Bonds Purchase or Redemption..................................................................
I I
Section 9. . Redemption Procedure..........................................................................................
I I
Section 16. Registration of Bonds; Persons Treated as Owners..............................................15
Section11. Form of Bond........................................................................................................17
Section12. Security; Tax Levy................................................................................................
23
Section 13. Filing with County Clerk......................................................................................
25
Section 14. Sale of Bonds; Bond Order...................................................................................
26
Section 15. Creation of Funds and Appropriations..................................................................
27
Section 16. Tax Covenants Generally......................................................................................
29
Section 17. Specific Tax Covenants.........................................................................................
Section17.101. Definitions................................................................................................
29
29
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Section 17.201. Purpose of the Bonds................................................................................
33
Section 17.202. The Project— Binding Commitment and Timing ....................................
34
Section 17.203. Reimbursement.........................................................................................
34
Section 17.204. Working Capital........................................................................................
35
Section 17.205. Consequences of Contrary Expenditure....................................................
35
Section 17.206. Investment of Bond Proceeds...................................................................
36
Section 17.207. No Grants..................................................................................................
36
Section17.208. Hedges.......................................................................................................
36
Section17.209. Reserved....................................................................................................
36
Section 17.210. Internal Revenue Service Audits...............................................................
36
Section 17.301. Use of Proceeds.........................................................................................
36
Section 17.302. Purpose of Bond Fund...............................................................................
37
Section 17.303. No Other Gross Proceeds..........................................................................
37
Section 17.401. Compliance with Rebate Provisions.........................................................
38
Section 17.402. Rebate Fund..............................................................................................
38
Section17.403. Records......................................................................................................
38
Section 17.404. Fair Market Value; Certificates of Deposit and Investment
Agreements.........................................................................................
39
Section 17.405. Arbitrage Elections....................................................................................
41
Section 17.406. Small Issuer Exception..............................................................................
41
Section17.501. Issue Price.................................................................................................
41
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Section 17.502. Yield Limits..............................................................................................
42
• Section 17.503. Continuing Nature of Yield Limits........................................................... 42
Section 17.504. Federal Guarantees....................................................................................42
Section 17.505. Investments After the Expiration of Temporary Periods, Etc ...................
43
Section 17.506. Treatment of Certain Credit Facility Fees .................................................
43
Section 17.601. Payment and Use Tests.............................................................................
43
Section 17.602. IRS Form 8038-G......................................................................................
44
Section 17.603. Bank Qualification....................................................................................
44
Section 17.701. Covenants Remain After Bonds Paid ........................................................
44
Section 17.702. No Common Plan of Financing................................................................
45
Section 17.703. No Sale of the Project...............................................................................
45
Section 17.704. Purchase of Bonds by City ........................................................................
45
Section 17.705. First Call Date Limitation.........................................................................
45
Section 17.706. Registered Form........................................................................................
45
Section 17.707. First Amendment.......................................................................................
45
Section 17.708. Future Events............................................................................................
46
Section 17.709. Permitted Changes; Opinion of Bond Counsel .........................................
46
Section17.710. Expectations..............................................................................................
46
Section 18. Continuing Disclosure...........................................................................................
46
Section 19. Pertaining to the Bond Registrar...........................................................................
47
Section20. Defeasance............................................................................................................
49
Section 21. Publication of Ordinance......................................................................................:
49
Section 22. Superseder and Effective Date..............................................................................
50
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ORDINANCE NUMBER 43-0-03
AN ORDINANCE providing for the issuance of not to exceed
$12,000,000 General Obligation Corporate Purpose Bonds,
Series 2003B, of the City of Evanston, Cook 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.
PREAMBLES
WHEREAS
A. The City of Evanston, Cook County, Illinois (the "City"), has a population in
excess of 25,000 as determined by the last official census and, accordingly, pursuant to the
provisions of the 1970 Constitution of the State of Illinois and particularly Article VII,
Section 6(a) thereof, the City is a home rule unit and as such 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 of Article VII of the 1970 Constitution,
the City has the power to incur debt payable from ad valorem tax receipts maturing within
40 years from the time it is incurred and without prior referendum approval.
C. The City has a Capital Improvement Plan (the "Plan "), which is reviewed and
revised annually, and most recently has included the fiscal year 2003 through 2007 and is
currently in effect for the years 2002 through 2006.
D. It is deemed by the City Council of the City (the "City Council") to be necessary
and advisable and in the best interests of the inhabitants of the City to obtain funds to reimburse
or pay a portion of the costs of certain of the capital projects (the "Plan Projects") set forth in
the Plan for such fiscal years at an estimated cost of $12,000,000 (collectively, said projects or
purposes being the "Series 2003E Capital Improvements") and subject to amendment for such
other corporate purposes as the City Council may determine as hereinafter provided. •
• E. The estimated total cost to the City of the Series 2003B Capital Improvements to be
provided for hereunder (collectively the "Series 2003B Capital Funding Cost") is the sum of
$12,000,000 plus the estimated available amount of interest earnings on said sum prior to its
expenditure.
F. It is necessary for the payment of the costs of the Series 2003B Capital
Improvements that money be borrowed at this time and in evidence of such borrowing, general
obligation bonds of the City be issued in the principal amount of not to exceed $12,000,000 and
that such indebtedness be incurred in accordance with the home rule powers of the City, as
aforesaid, and without submitting the question of incurring such indebtedness to the electors of
said City for their approval.
Now THEREFORE Be It Ordained by the City Council of the City of Evanston, Cook
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
City Council
Plan
Plan Projects
Series 2003B Capital Funding Cost
0 Series 2003B Capital Improvements
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B. The following words and terms are defined as set forth. •
"Act" means the Illinois Municipal Code, as supplemented and amended, and the
home rule powers of the City under Section 6 of Article VII of the Illinois Constitution of
1970; 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.
"Bonds" means the not to exceed $12,000,000 General Obligation Corporate
Purpose Bonds, Series 2003B, authorized to be issued by this Ordinance.
"Bond Moneys" means the Pledged Taxes and any other moneys deposited into
the Debt Service Fund and investment income earned in the Bond Fund.
"Bond Order " means. a Bond Order as authorized to be executed by the
Designated Officials of the City in Section (13) of this Ordinance, substantially in the
form (with related certificates) as attached hereto as Exhibit B, and by which the final
terms of the Bonds will be established. •
"Bond Purchase Agreement" means the Bond Purchase Agreement as authorized
to be executed by the Designated Officials of the City in Section (13) of this Ordinance,
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 Register" means the books of the City kept by the Bond Registrar to evi-
dence the registration and transfer of the Bonds.
"Bond Registrar" means Bank One, National Association, Chicago, Illinois, a
bank having trust powers, or a successor thereto or a successor designated as bond
registrar hereunder.
"Book Entry Form " means the form of the Bonds as fully registered and available
in physical form only to the Depository. •
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• "Code " means the Internal Revenue Code of 1986 as amended.
"Continuing Disclosure Undertaking" means the undertaking by the City for the
benefit of the Purchasers as authorized in Section (22) hereof and substantially in the
form as attached hereto as Exhibit C.
"County Clerk" means the County Clerk of The County of Cook.
"Debt Service Fund" means the Debt Service Fund established and defined in
Section (15) of this Ordinance.
"Depository" means The Depository Trust Company, an New York limited trust
company, its successors, or a successor depository qualified to clear securities under
applicable state and federal laws.
"Designated Officials " means the City Manager and Finance Director of the City,
acting together.
• "Ordinance" means this Ordinance, numbered 43-0-03, and passed by the City
Council on the 7th day of May 2003.
"Paying Agent" means Bank One, National Association, Chicago, Illinois, a bank
having trust powers, or a successor thereto or a successor designated as paying agent
hereunder.
"Pledged Taxes" means the taxes levied on the taxable property within the cor-
porate limits of the City to pay principal of and interest on the Bonds as provided in
Section (12) hereof.
"Project Fund" means the Project Fund as established and defined in Section (15)
of this ordinance.
"Rebate Fund" means the Rebate Fund authorized to be established and as
• defined in Section (17) of this Ordinance.
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"Record Date " means the 15th day of the month preceding any regular or other •
interest payment date occurring on the first 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.
"Tax-exempt " means, with respect to the Bonds, the status of interest paid and
received thereon as not includible in the gross income of the owners thereof under the
Code for federal income tax purposes except to the extent that such interest will be taken
into account in computing an adjustment used in determining the alternative minimum
tax for certain corporations.
"Term Bonds" means Bonds subject to mandatory redemption by operation of the
Debt Service Fund and designated as term bonds in the Bond Order.
"Underwriter" means Legg Mason Wood Walker, Inc., with offices at 225 West
Washington Street, Chicago, Illinois, as the purchaser and underwriter of the Bonds.
C. Definitions also appear in the preambles hereto or in specific sections, as appear
below. 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 City Council hereby finds that all of the
recitals contained in the preambles to this Ordinance are true, correct and complete and does
incorporate them into this Ordinance by this reference.
Section 3. Determination to Issue Bonds. It is necessary and in the best interests of the
City to provide for the Series 2003B Capital Improvements for the public health, safety and
welfare, and to pay all the Series 2003B Capital Funding Costs (including within such costs
capitalized interest through January 1, 2004, and all related costs and expenses incidental
thereto), and to borrow money and issue a portion of the Bonds for such purposes. It is hereby •
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• 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 by the Act.
Section 4. Bond Details. There shall be issued and sold the Bonds in the aggregate
principal amount of not to exceed $12,000,000. The Bonds shall each be designated "General
Obligation Corporate Purpose Bond, Series 2003B" or such other name or names or series
designations as may be appropriate and as stated in the Bond Order; be dated May 15, 2003, or
such other date or dates on or prior to the date of delivery thereof as may be set forth in the Bond
Order if it is determined therein to be a date better suited to the advantageous marketing of the
Bonds (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 $5,000 or integral
multiples thereof (but no single Bond shall represent principal maturing on more than one date),
and shall be numbered consecutively in such fashion as shall be determined by the Bond
• Registrar. The Bonds shall mature serially on January 1 of the years and in the amounts subject
to increase or decrease as follows (and subject to the right of prior redemption hereinafter
stated):
YEAR
AMOUNT ($)
YEAR
AMOUNT ($)
2005
375,000
2015
750,000
2006
50,000
2016
780,000
2007
55,000
2017
820,000
2008
55,000
2018
865,000
2009
55,000
2019
910,000
2010
300,000
2020
960,000
2011
340,000
2021
1,010,000
2012
675,000
2022
1,060,000
2013
700,000
2023
1,115,000
2014
725,000
and as subject to increase or decrease by an amount not to exceed $100,000 (in either increase or
isdecrease) in each such year, as set forth in the Bond Order. Each Bond shall bear interest, at a
rate not to exceed 6% per annum, 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 January 1 and July 1 of each
year, commencing on July 1, 2003, or January 1, 2004, as provided in the Bond Order. 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 and mailed to the registered
owner of the Bond as shown in the Bond Registrar or at such other address furnished in writing
by such Registered Owner, or as otherwise may be agreed with the Depository for so long as the
Depository or its nominee is the registered owner as of a given Record Date. The principal of or
redemption price due on the Bonds shall be payable in lawful money of the United States of
America upon presentation thereof at the principal corporate trust office of the Paying Agent
located in the City of Chicago, Illinois, or at successor Paying Agent and locality.
Section S. 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 or utilize a previously executed and delivered Letter of Representations or Blanket Letter
of Representations (either being the "Letter of Representations ") substantially in the form
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• common in the industry, or with such changes therein as the officer executing the Letter of
Representations 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
Letter of Representations, 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 Finance Director, or
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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 Finance Director, 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 Letter
of Representations, 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 in the Bond
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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 Letter of Representations, (b) the agreement among the City, the Bond Registrar, and
the Depository evidenced by the Letter of Representations 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
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
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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 7. Term Bonds, Mandatory Redemption and Covenants; Optional Redemption.
The Bonds may be subject to mandatory redemption (as Term Bonds) as provided in the Bond
Order; provided, however, that in such event the amounts due as provided for under such
mandatory redemption shall be the amounts used to satisfy the test set forth in Section (4) of this
Ordinance for the maximum amounts of principal due on the Bonds in any given period. Bonds
designated as Term Bonds shall be made subject to mandatory redemption by operation of the
Debt Service Fund at a price of not to exceed par and accrued interest, without premium, on a
given date of the years and in the amounts as shall be determined in the Bond Order. The City
covenants that it will redeem any Term Bonds pursuant to the mandatory redemption
requirement for such Term Bonds and levy taxes accordingly. The Bonds shall also be subject to
redemption prior to maturity at the option of the City, from any available funds, in whole or in
part on any date, not longer than ten and one-half (10-1/2) years from the Dated Date, as
provided in the Bond Order, and if in part, in such order of maturities (and, if applicable, order of
mandatory redemption payments) as shall be specified in the Bond Order, and if less than an
entire maturity, in integral multiples of $5,000, selected by lot by the Bond Registrar, as
hereinafter provided, at the redemption price (expressed as a percentage of the principal amount
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not to exceed 103% of par plus accrued interest to the date fixed for •
being redeemed) of p
redemption, as provided in the Bond Order. Notwithstanding any other provision of this
Ordinance, the Bond Order may provide for non -callable Bonds for the first ten and one-half
(10-1/2) years.
Section & Term Bonds Purchase or Redemption. If the City redeems pursuant to
optional redemption as hereinabove provided 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.
Section 9. 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 any 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
•
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• the Bond Registrar), notify the Bond Registrar of such redemption date and of the
•
maturities and principal amounts of Bonds to be redeemed.
A 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 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;
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(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
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 principal 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
•
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• 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.
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 invalidate, 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
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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 Letter
of Representations, 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.
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H. Effect o Nonpayment u on Redemption. If any Bond or portion of Bond 0
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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.
1. Bonds to be Cancelled; Payment to Identify Bonds. All Bonds which have
been redeemed shall be cancelled and destroyed by the Bond Registrar and shall not be
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 10. Registration of Bonds; Persons Treated as Owners. The City shall cause
books (the "Bond Register" as defined) for the registration and for the transfer of the Bonds as 0
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• provided in this Ordinance to be kept at the principal corporate trust office of the Bond Registrar
in the City of Chicago, Illinois, 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 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, 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
•
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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 to any registered owner of Bonds 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.
Section 11. Form of Bond. The Bonds shall be in substantially the form hereinafter set
forth; provided, however, that if the text of the Bond is to be printed in its entirety on the front
side of the Bond, then the second paragraph of the front side of the Bond and the legend "See
Reverse Side for Additional Provisions" shall be omitted and paragraphs on the reverse side of
the Bond shall be inserted immediately after the first paragraph on the front side. .
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• [Form of Bond - Front Side]
REGISTERED REGISTERED
No. $
UNITED STATES OF AN ERICA
STATE OF ILLINOIS
THE COUNTY OF COOK
CITY OF EVANSTON
GENERAL OBLIGATION CORPORATE PURPOSE BOND, SERIES 2003E
See Reverse Side for
Additional Provisions.
Interest Maturity Dated
Rate: % Date: January 1, Date: May 15, 2003 CUSIP:
Registered Owner:
Principal Amount: DOLLARS
• KNOW ALL PERSONS BY THESE PRESENTS that the City of Evanston, Cook 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 January 1 and
July 1 of each year, commencing July 1, 2003, until the 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 principal corporate trust office of
• Bank One, National Association, in the City of Chicago, Illinois, as paying agent (the "Paying
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Agent'). Payment of interest shall be made to the Registered Owner hereof as shown on the •
registration books of the City maintained by Bank One, National Association, in the City of
Chicago, 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 15th day of the month
preceding any regular interest payment date or a redemption on the first day of any month and
the 15th day preceding any other interest payment date which may be occasioned by a
redemption of Bonds on a day other than the first day of any 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, or as otherwise agreed by the City and the Bond Registrar and a qualified
securities clearing corporation as depository, or nominee, for so long as this Bond shall be 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,
•
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•
is
excepting such interest as may be provided for from the proceeds of the Bonds, 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.
IN WITNESS WHEREOF the City of Evanston, Cook 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.
i
L.eJ �.
Mayor, City of evanston
Cook County, Illinois
Attest:
City �Jer,f Evanston
CookIllinois
[SEAL]
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CERTIFICATE OF AUTHENTICATION •
Date of Authentication:
This Bond is one of the Bonds described in the within -mentioned Ordinance and is one of
the General Obligation Corporate Purpose Bonds, Series 2003B, of the City of Evanston, Cook
County, Illinois.
LM
American National Bank and Trust
Company of Chicago,
as Bond Registrar
Authorized Signatory
[FORM OF BOND - REVERSE SIDE]
This bond is one of a series of bonds (the "Bonds") in the aggregate principal amount of
$12,000,000 issued by the City for the purpose of paying the costs of the Series 2003B Capital •
Improvements in and for the City and of paying expenses incidental thereto, all as described and
defined in the Ordinance Number 43-0-03, duly adopted by the City Council on the 7th day of
May 2003, authorizing the Bonds (the "Ordinance'), pursuant to and in all respects in
compliance with the applicable provisions of the Illinois Municipal Code, as supplemented and
amended, and as further supplemented and, where necessary, superseded, by the powers of the
City as a home rule unit under the provisions of Section 6 of Article VII of the Illinois
Constitution of 1970 (such code and powers being the "Act"), and with the Ordinance, which
has been duly approved by the Mayor of the City, and published in pamphlet form, in all respects
as by law required.
[The Bonds due on January 1 of the years 20_ and 20_ are Term Bonds and are subject
to mandatory redemption by operation of the Debt Service Fund at a price of par and accrued •
interest, without premium, on January 1 of the years and in the amounts as follows:
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• For the Term Bonds due January t, 20_:
YEAR AMOUNT ($)
20_
20
with $ remaining to be paid at maturity in 20_.
For the Term Bonds due January 1, 20_:
YEAR AMOUNT ($)
20
24
20
with $ remaining to be paid at maturity in 20_1
Those of the Bonds due on or after January 1, 20 are subject to redemption prior to
maturity, at the option of the City, from any available funds, in whole or in part, on any date on
• or after January 1, 20_, and if in part, in any order of maturity (and, if applicable, any order of
mandatory redemption payment) 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 par
plus accrued interest to the date of redemption.
In each case of redemption, such further terms and provision for notice of redemption
shall be as set forth in the Ordinance.
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
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
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Bonds or to transfer or exchange any Bond all or a portion of which has been called for •
redemption.
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 identifying number such as
TID, SSN, or other]
(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 assignment must correspond with the name of the Registered
Owner as it appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatever.
Section 12. Security; Tax Levy. 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. For the purpose of providing funds required to pay the interest on the Bonds promptly •
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• 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 sufficientfor that purpose. Such levy shall be fully
set forth in the Bond Order for the Bonds. The Pledged Taxes and other moneys on deposit
(collectively, the "Bond Moneys ") in the Debt Service Fund and allocable to the Bonds shall be
applied to pay principal of and interest on the 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 the Debt Service Fund, 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 Tenn 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
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.
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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 Debt Service 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 City Council shall, by proper
proceedings, direct the deposit of such funds into the Debt Service 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 13. Filing with County Clerk. After this Ordinance becomes effective and
promptly upon a sale of Bonds and execution and delivery of a Bond Order, 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 required ascertain the rate percent required to produce the
aggregate tax herein provided to be levied and set forth in a Bond Order for each of the years;
and the County Clerk shall (to the extent said tax has not been abated as provided herein) extend
the same for collection on the tax books in connection with any other taxes that may be levied in
said years in and by the City for general corporate purposes of the City; and in said years such •
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• annual. tax shall be levied and collected by and for and on behalf of the City in like manner as
provided by law for the levy and collection of taxes for general corporate purposes for said years,
without limit as to either rate or amount, and in addition to and in excess of all other taxes.
Section 14. Sale of Bonds; Bond Order. The Designated Officials are hereby
authorized to proceed, without any further authorization or direction whatsoever from the City.
Council, to sell and deliver the Bonds upon the terms as prescribed in this Section, pursuant to
one or more Bond Orders. The Bonds shall be sold and delivered to the Underwriter at the price
of not less than 97% of the par value of the principal amount thereof, plus accrued interest to the
date of delivery. Such sale shall be made upon the advice (in the form of a written certificate or
report) of the Underwriter that the net interest cost rate on the Bonds, calculated in accordance
with customary market practice, does not exceed 6.00% and that the terms of the Bonds are fair
and reasonable in view of current conditions in the bond markets. Nothing in this Section shall
is
require the Designated Officials to sell any of the Bonds if in their judgment, aided by the
Underwriter, the conditions in the bond markets shall have deteriorated from the time of
adoption thereof or the sale of all or any portion of the Bonds shall for some other reason not be
deemed advisable, but the Designated Officials shall have the authority to sell the Bonds in any
event so long as the limitations set forth in this Ordinance and the conditions of this Section shall
have been met. Upon the sale of the 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, the Bond Order, Preliminary Official Statement, Official Statement, Bond Purchase
Contract (as hereinafter defined), and closing documents. The City Council, by its Aldermen
voting hereon, finds and determines 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
•
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name, or indirectly in the name of any other person, association, trust or corporation in said •
Contract with the Underwriter for the purchase of the Bonds. The distribution of the Preliminary
Official Statement relating to the Bonds is hereby in all respects authorized and approved, and
the proposed use by the Underwriter 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 contract for the sale of the Bonds to the
Underwriters (the "Bond Purchase Contract'), substantially in the form attached hereto as
Exhibit A, is hereby in all respects authorized and approved. Upon the sale of the Bonds, the
Designated Officials shall prepare the Bond Order, to be substantially in the form of Exhibit B
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 all City Council members at
the next public meeting thereof. The Designated Officials shall also file with the County Clerk
the Bond Order or like document including a statement of taxes. The authority granted in this •
Ordinance to the Designated Officers to sell Bonds as provided herein shall expire on July 1,
2003.
Section 15. Creation of Funds and Appropriations. Bond proceeds and other funds of
the City as noted are hereby appropriated 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 is
hereby ordered to be deposited into the "General Obligation Corporate Purpose Bonds,
Series 2003B, Debt Service Fund" (the "Debt Service Fund"), hereby created, which shall be the
fund for the payment of principal of and interest on the Bonds.
B. The Pledged Taxes shall either be deposited into the Debt Service Fund and used
solely and only for paying the principal of and interest on the Bonds or be used to reimburse a •
-27-
• fund or account from which advances to the Debt Service 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 Debt Service Fund shall be retained in the Debt Service 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 City Council,
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 for the sole
benefit of the registered owners of the Bonds, subject to the reserved right of the City Council to
transfer certain interest income or investment profit earned in the Debt Service Fund to other
funds of the City, as described in the preceding sentence.
C. The amount necessary from the proceeds of the Bonds shall be used to pay costs of
issuance of the Bonds and shall be deposited into a separate fund, hereby created, designated the
• "Expense Fund. " Any disbursements from such fund shall be made from time to time as
necessary. Any excess in said fund shall be deposited into the Project Fund hereinafter created
U
after six months from the date of issuance of the Bonds.
D. The amount necessary to pay interest on the Bonds to and including January 1,
2004, shall be deposited into the Debt Service Fund and be used for such purpose.
E. The remaining proceeds of the Bonds shall be set aside in a separate fund, hereby
created, and designated as the "Series 2003E Capital Project Fund" (the "Project Fund"),
hereby created, and be used to pay costs of the 2003 Bonds Capital Improvements, including
costs of issuance of the Bonds which for any reason are not paid from the Expense Fund-
F. Alternatively, the Finance Director may allocate proceeds of the Bonds otherwise
designated for the Debt Service Fund, the Expense Fund or the Project Fund to one or more
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•
related funds of the City already in existence; provided, however, that this shall not relieve the
Finance Director of the duty to account for the proceeds as herein provided.
G. The City Council reserves the right, as it becomes necessary from time to time, to
revise the list of projects hereinabove set forth, to change priorities, to revise cost allocations
between projects and to substitute projects, in order to meet current needs of the City; subject,
however, to limitations of the Act and to the tax covenants set forth herein.
Section 16. Tax Covenants Generally. The purpose of this Section and the next Section
is to set forth various facts regarding the Bonds and to establish the expectations of the City as to
future events regarding the Bonds and the use of Bond proceeds. The certifications, covenants,
and representations contained herein are made on behalf of the City for the benefit of the owners
from time to time of the 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 (including,
without limitation, making or permitting any use of the proceeds of the Bonds) if taking, •
permitting, or omitting to take such action would cause any of the Bonds to be an arbitrage bond
or a private activity bond within the meaning of the Code or would otherwise cause the interest
on the Bonds to be included in the gross income of the recipients thereof for federal income tax
purposes.
Section 17. Specific Tax Covenants. The following certifications, representations and
covenants are made relating to the Tax-exempt status of the Bonds.
Section 17.101. Definitions. In addition to such other words and terms used and defined in
this Ordinance, the following words and terms used in this Section shall have the following
meanings.
"Affiliated Person " means any Person that (a) at any time during the six months
prior to the execution and delivery of the Bonds, (i) has more than five percent of the
voting power of the governing body of the City in the aggregate vested in its directors,
officers, owners, and employees or, (ii) has more than five percent of the voting power of •
its governing body in the aggregate vested in directors, officers, board members or
employees of the City or (b) during the one-year period beginning six months prior to the
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• execution and delivery of the Bonds, (i) the composition of the governing body of which
is modified or established to reflect (directly or indirectly) representation of the interests
of the City (or for which an agreement, understanding, or arrangement relating to such a
modification or establishment during that one-year period) or (ii) the composition of the
governing body of the City is modified or established to reflect (directly or indirectly)
representation of the interests of such Person (or for which an agreement, understanding,
or arrangement relating to such a modification or establishment during that one-year
period).
"Bond Counsel" means Chapman and Cutler or any other nationally recognized
firm of attorneys experienced in .the field of municipal bonds whose opinions are
generally accepted by purchasers of municipal bonds.
"Bond Fund" means the Debt Service Fund as defined in this Ordinance.
"Capital Expenditures" means costs of a type that would be properly chargeable
to a capital account under the Code (or would be so chargeable with a proper election)
under federal income tax principles if the City were treated as a corporation subject to
federal income taxation, taking into- account the definition of Placed -in -Service set forth
herein.
"Closing" means the first date on which the City shall receive the purchase price
for the Bonds.
• "Code " means the Internal Revenue Code of 1986.
"Commingled Fund" means any fund or account containing both Gross Proceeds
and an amount in excess of $25,000 that are not Gross Proceeds if the amounts in the
fund or account are invested and accounted for, collectively, without regard to the source
of funds deposited in the fund or account; provided, however, that an open-ended
regulated investment company under Section 851 of the Code is not a Commingled Fund.
"Control" means the possession, directly or indirectly through others, of either of
the following discretionary and non -ministerial rights or powers over another entity:
(a) to approve and to remove without cause a controlling portion of the.
governing body of a Controlled Entity; or
(b) to require the use of funds or assets of a Controlled Entity for any purpose.
"Controlled Entity" means any entity or one of a group of entities that is subject
to Control by a Controlling Entity or group of Controlling Entities.
"Controlling Entity" means any entity or one of a group of entities directly or
• indirectly having Control of any entities or group of entities.
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"Controlled Group" means a group of entities directly or indirectly subject to is
Control by the same entity or group of entities, including the entity that has the Control of
the other entities.
"Costs of Issuance" means the costs of issuing the Bonds, including underwriter's
discount and legal fees, but not including any fees, as may be applicable, for the Credit
Facility described in Section 17.506 hereof.
"Credit Facility" means the Municipal Bond Insurance Policy, if any, issued by a
Credit Facility Provider.
"Credit Facility Provider" means a municipal bond insurance issuing company,
as may be applicable, providing a Credit Facility.
"De minimis Amount of Original Issue Discount or Premium" means with respect
to an obligation (a) any original issue discount or premium that does not exceed two
percent of the stated redemption price at maturity of the Bonds plus (b) any original issue
premium that is attributable exclusively to reasonable underwriter's compensation.
"External Commingled Fund" means a Commingled Fund in which the City and
all members of the same Controlled Group as the City own, in the aggregate, not more
than ten percent of the beneficial interests.
"GIC" means (a) any investment that has specifically negotiated withdrawal or •
reinvestment provisions and a specifically negotiated interest rate and (b) any agreement
to supply investments on two or more future dates (e.g., a forward supply contract).
"Government Securities" means the obligations to be held under the Escrow
Agreement.
"Gross Proceeds" means amounts in the funds listed in Section 17.301 hereof.
"Net Sale Proceeds" means amounts actually or constructively received from the
sale of the Bonds.
"Person" means any entity with standing to be sued or to sue, including any
natural person, corporation, body politic, governmental unit, agency, authority,
partnership, trust, estate, association, company or group of any of the above.
"Placed -in -Service" means the date on which, based on all facts and
circumstances (a) a facility has reached a degree of completion that would permit its
operation at substantially its design level and (b) the facility is, in fact, in operation at
such level.
"Preliminary Erpenditures" means architectural, engineering, surveying, soil .
testing, Costs of Issuance and similar costs that were incurred prior to commencement of
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• construction, rehabilitation or acquisition of the Project, if any, but do not include any
costs related to land acquisition, site preparation, and similar costs incident to
commencement of construction.
"Private Business Use " means any use of the Project by any Person other than a
state or local government unit, including as a result of (i) 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 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.
"Project" means the entire Series 2003B Capital Improvements as defined herein.
"Project Fund" means Project Fund as defined herein.
"Purchaser" means and may be used interchangeably with Underwriter.
"Qualified Administrative Costs of Investments" means (a) reasonable, direct
• administrative costs (other than carrying costs) such as separately stated brokerage or
selling commissions (other than a broker's commission paid on behalf of either the City
or the provider of a GIC to the extent such commission exceeds the lesser of a reasonable
amount or the present value of annual payments equal to 0.05 percent of the weighted
average amount reasonably expected to be invested each year of the term of the GIC (for
this purpose, present value is'computed using the yield on the GIC)), but not legal and
accounting fees, recordkeeping, custody and similar costs; or (b) all reasonable
administrative costs, direct or indirect, incurred by a publicly offered regulated
investment company or an External Commingled Fund.
•
"Qualified Tax Exempt Obligations" means (a) any obligation described in
Section 103(a) of the Code, the interest on which is excludable from gross income of the
owner thereof for federal income tax purposes and is not an item of tax preference for
purposes of the alternative minimum tax imposed by Section 55 of the Code; (b) an
interest in a regulated investment company to the extent that at least ninety-five percent
of the income to the holder of the interest is interest which is excludable from gross
income under Section 103 of the Code of any owner thereof for federal income tax
purposes and is not an item of tax preference for purposes of the alternative minimum tax
imposed by Section 55 of the Code; and (c) certificates of indebtedness issued by the
United States Treasury pursuant to the Demand Deposit State and Local Government
Series program described in 31 C.F.R. part 344.
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herein. "Rebate Fund" means the fund, if any, identified and defined in Section 17.402 •
"Rebate Provisions" means the rebate requirements contained in Section 148(f)
of the Code and in the Regulations.
"Regulations" means United States Treasury Regulations dealing with the tax-
exempt bond provisions of the Code.
"Reimbursed Expenditures" means expenditures of the City paid prior to Closing
to which Sale Proceeds or investment earnings thereon are or will be allocated.
"Reimbursement Allocation" means the act of allocating the amount of Sale
Proceeds to reimburse Reimbursed Expenditures.
"Sale Proceeds" means amounts actually or constructively received from the sale
of the Bonds, including (a) amounts used to pay underwriter's discount or compensation
and accrued interest, other than accrued interest for a period not greater than one year
before Closing but only if it is to be paid within one year after Closing and (b) amounts
derived from the sale of any right that is part of the terms of a Bond or is otherwise
associated with a Bond (e.g., a redemption right).
"Supplemental Tax Certificates" means one or more certificates or agreements
given in connection with the delivery of the Bonds, including information in certificates
or agreements not limited to or expressly stated as responsive to tax exemption of the
Bonds.
"Yield" means that discount rate which when used in computing the present value
of all payments of principal and interest paid and to be paid on an obligation (using
semiannual compounding on the basis of a 360-day year) produces an amount equal to
the obligation's purchase price (or in the case of the Bonds, the issue price as established
in Section 5.1), including accrued interest.
"Yield Reduction Payment" means a rebate payment or any other amount paid to
the United States in the same manner as rebate amounts are required to be paid or at such
other time or in such manner as the Internal Revenue Service may prescribe that will be
treated as a reduction in Yield of an investment under the Regulations.
Section 17.201. Purpose of the Bonds. The Bonds are being issued to finance the Project in
a manner consistent with the revenue needs of the City. A breakdown of the sources and uses of
funds is attached as Exhibit A. At least 75% of the sum of (i) Sale Proceeds of the Bonds plus
(ii) all investment earnings thereon, less (iii) Costs of Issuance paid from Sale Proceeds of
the Bonds or investment earnings thereon, are expected to be used for construction
purposes with respect to property owned by a governmental unit.
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• Section 17.202. The Project — Binding Commitment and Timing. The City has incurred or
expects to incur, within six months of the Closing, a substantial binding obligation (not subject to
contingencies within the control of the City or any member of the same Controlled Group as the
City) to a third party to expend at least five percent of the Net Sale Proceeds on the Project. It is
expected that the work of acquiring and constructing the Project and the expenditure of amounts
deposited into the Project Fund will continue to proceed with due diligence through a date not
later than May 15, 2006, at which time it is anticipated that all such Sale Proceeds and
investment earnings thereon will have been spent. It is expected that the Sale Proceeds deposited
into the Project Fund, including investment earnings on the Project Fund will be spent to pay
costs of the Project in accordance with an estimated drawdown schedule to be contained in a
Supplemental Tax Certificate.
Section 17.203. Reimbursement. Except for Reimbursed Expenditures, to be identified in a
Supplemental Tax Certificate, none of the Sale Proceeds or investment earnings thereon will be
used to reimburse the City for an expenditure paid prior to the date of Closing. The City may
make the Reimbursement Allocation to allocate a portion of the Sale Proceeds to the Reimbursed
Expenditures incurred in connection with acquiring, constructing, renovating, improving and
equipping the Project and will, after such Reimbursement Allocation, treat such proceeds as
being spent. In support of any such Reimbursement Allocation, the City represents as follows:
(a) Except as described in (f) below, the City declared an official intent to
reimburse such expenditures not later than 60 days after the date such expenditures were
paid. At the time the official intent described above was declared, the City reasonably
• expected to reimburse the non -Preliminary Expenditures related thereto with the proceeds
of a future borrowing. A copy of the declaration of such intent, if applicable, shall be
provided at closing. With respect to expenditures paid within the 60 day period ending
on this date and with respect to which no declaration of intent was previously made, the
City hereby declares its intent to reimburse such expenditures.
(b) Except as described in (f below, the Closing shall be within 18 months after
the later of (i) the first date on which a Reimbursed Expenditure was paid or (ii) the first
date on which the property relating to a Reimbursed Expenditure was Placed -in -Service
or abandoned, but in no event more than three years after the first date on which a
Reimbursed Expenditure was paid.
(c) All Reimbursed Expenditures shall represent Capital Expenditures or Costs
of Issuance.
(d) The City acknowledges that if within one year after Closing the City
deposits any money or other property into any fund or account (other than amounts
deposited into a bona fide debt service fund) to pay principal of or interest on the Bonds
or any other tax-exempt obligations in an amount corresponding to Gross Proceeds used
to reimburse a Reimbursed Expenditure (unless such money or other property constitutes
proceeds of a borrowing by the City), it may adversely affect the tax-exempt status of the
• Bonds. The City further acknowledges that it has covenanted not to take any action that
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would cause interest on the Bonds to become includible in the gross income of the •
holders thereof for federal income tax purposes.
(e) No Reimbursement Allocation will employ any action that results in the
City issuing more Bonds, issuing Bonds earlier, or allowing Bonds to remain outstanding
longer than is reasonably necessary to accomplish the governmental purposes of the
Bonds, based upon all of the facts and circumstances.
(f) The restrictions in (a) and (b) above do not apply to (i) an amount of
Preliminary Expenditures that does not exceed 20% of the Sale Proceeds being used to
finance the portion of the Project with respect to which the Preliminary Expenditures
were incurred, (ii) Costs of Issuance or (iii) an amount not in excess of the lesser of
$100,000 or five percent of the Sale Proceeds.
(g) None of the Reimbursed Expenditures have been previously paid with
proceeds of debt.
Section 17.204. Working Capital. All Sale Proceeds and investment earnings thereon will
be used, directly or indirectly, to finance Capital Expenditures, other than the following:
(a) an amount not to exceed five percent of the Sale Proceeds of the Bonds for
working capital expenditures directly related to Capital Expenditures financed by the
Bonds; •
(b) payments of interest on the Bonds for a period commencing at Closing and
ending on the later of the date three years after Closing or one year after the date on
which the Project is Placed -in -Service;
(c) Costs of Issuance and Qualified Administrative Costs of Investments;
(d) payments of rebate or Yield Reduction Payments made to the United States
under the Regulations;
(e) principal of or interest on the Bonds paid from unexpected excess Sale
Proceeds and investment earnings thereon; and
(f) fees for a qualified guarantee within the meaning of Regulations Section
1.1484(f).
No Gross Proceeds may be spent for non -capital purposes pursuant to Section 17.204 hereof if
the expenditure merely substitutes Gross Proceeds for other amounts that would have been used
to make expenditures in a manner that gives rise to Replacement Proceeds.
Section 17.205. Consequences of Contrary Expenditure. The City acknowledges that if Sale
Proceeds and investment earnings thereon are spent for non -Capital Expenditures other than as •
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• permitted by Section 17.204 hereof, a like amount of then available funds of the City will be
treated as unspent Sale Proceeds.
Section 17.206. Investment of Bond Proceeds. Not more than 50% of the Sale Proceeds of
the Bonds and investment earnings thereon are or will be invested in investments (other than
Qualified Tax Exempt Obligations) having a Yield that is substantially guaranteed for four years
or more. No portion of the Bonds is being issued solely for the purpose of investing a portion of
Sale Proceeds or investment earnings thereon at a Yield higher than the Yield on the Bonds.
Section 17.207. No Grants. None of the Sale Proceeds or investment earnings thereon will
be used to make grants to any person.
Section 17.208. Hedges. Neither the City nor any member of the same Controlled Group as
the City has entered into or expects to enter into any hedge (e.g., an interest rate swap, interest
rate cap, futures contract, forward contract or an option) with respect to the Bonds or the Prior
Bonds. The City acknowledges that any such hedge could affect, among other things, the
calculation of Bond Yield under the Regulations. The Internal Revenue Service could
recalculate Bond Yield if the failure to account for the hedge fails to clearly reflect the economic
substance of the transaction.
Section 17.209. Reserved.
• Section 17.210. Internal Revenue Service Audits. The City represents that the Internal
Revenue Service has not contacted the City regarding the Prior Bonds or any other obligations
issued by or on behalf of the City. To the best of the knowledge of the City, no such obligations
of the City are currently under examination by the Internal Revenue Service.
n
Section 17.301. Use of Proceeds. (a) The use of the Sale Proceeds and investment earnings
thereon and the funds held under this Ordinance at the time of Closing will be contained in a
Supplemental Tax Certificate. No Sale Proceeds will be used to prepay for services or goods to
be received over a period of years prior to the date such services or goods are to be received,
except for the payment, if any, to a Credit Facility Provider. No Sale Proceeds or any investment
earnings thereon will be used to pay for or otherwise acquire goods or services from an Affiliated
Person.
(b) Only the following funds and accounts will be funded at Closing: Bond Fund,
Expense Fund, and Project Fund. There are no other funds or accounts created under the
Ordinance other than the Rebate Fund if it is created as provided for in Section 17.402.
(c) Principal of and interest on the Bonds will be paid from the Bond Fund.
(d) Costs of Issuance incurred in connection with the Bonds will be paid from the
Expense Fund. Any moneys remaining in the Expense Fund after the payment of all Costs of
Issuance shall be transferred to the Project Fund within six months of Closing.
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(e) The costs of the Project will be paid from the Project Fund and no other moneys •
(except for investment earnings on amounts in the Project Fund) are expected to be deposited
therein.
Section 17.302. Purpose of Bond Fund. The Bond Fund, except for any amount of
capitalized interest therein, will be used primarily to achieve a proper matching of revenues and
earnings with principal and interest payments on the Bonds in each bond year. It is expected that
the Bond Fund will be depleted at least once a year, except for a reasonable carry over amount
not to exceed the greater of (a) the earnings on the investment of moneys in the Bond Fund for
the immediately preceding bond year or (b) 1/12th of the principal and interest payments on the
Bonds for the immediately preceding bond year.
Section 17.303. No Other Gross Proceeds. (a) Except as described in the definition of
Gross Proceeds, and the Credit Facility, after the issuance of the Bonds, neither the City nor any
member of the same Controlled Group as the City has or will have any property, including cash,
securities or any other property held as a passive vehicle for the production of income or for
investment purposes, that constitutes:
(i) Sale Proceeds;
(ii) amounts in any fund or account with respect to the Bonds (other than the
Rebate Fund);
(iii) amounts that have a sufficiently direct nexus to the Bonds or to the .
governmental purpose of the Bonds to conclude that the amounts would have been used
for that governmental purpose if the Bonds were not used or to be used for that
governmental purpose (the mere availability or preliminary earmarking of such amounts
for a governmental purpose, however, does not itself establish such a sufficient nexus);
(iv) amounts in a debt service fund, redemption fund, reserve fund, replacement
fund or any similar fund to the extent reasonably expected to be used directly or
indirectly to pay principal of or interest on the Bonds or any amounts for which there is
provided, directly or indirectly, a reasonable assurance that the amount will be available
to pay principal of or interest on the Bonds or the obligations under the Credit Facility or
any other credit enhancement or liquidity device with respect to the Bonds, even if the
City encounters financial difficulties;
(v) any amounts held pursuant to any agreement (such as an agreement to
maintain certain levels of types of assets) made for the benefit of the owners of the
Bonds, the Credit Facility Provider, or any other credit enhancement provider, including
any liquidity device or negative pledge (e.g., any amount pledged to pay principal of or
interest on an issue held under an agreement to maintain the amount at a particular level
for the direct or indirect benefit of owners of the Bonds or a guarantor of the Bonds); or
(vi) amounts actually or constructively received from the investment and
reinvestment of the amounts described in (i), (ii) or (iii) above.
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• (b) No compensating balance, liquidity account, negative pledge of property held for
investment purposes required to be maintained at least at a particular level or similar
arrangement exists with respect to, in any way, the Bonds, the Credit Facility, or any other credit
enhancement or liquidity device related to the Bonds.
(c) The term of the Bonds is not longer than is reasonably necessary for the
governmental purposes of the Bonds. The weighted average maturity of the Bonds shall not
exceed 120 percent of the average reasonably expected economic life of the Project.
Section 17.401. Compliance with Rebate Provisions. The City covenants to take such
actions and make, or cause to be made, all calculations, transfers and payments that may be
necessary to comply with the Rebate Provisions applicable to the Bonds. The City will make, or
cause to be made, rebate payments with respect to the Bonds in accordance with law.
Section 17.402. Rebate Fund. The City is authorized hereby to create and establish a
special fund to be known as the Rebate Fund authorized herein, which, if created, shall be
continuously held, invested, expended and accounted for in accordance with this Ordinance.
Moneys in the Rebate Fund shall not be considered moneys held for the benefit of the owners of
the Bonds. Except as provided in the Regulations, moneys in the Rebate Fund (including
earnings and deposits therein) shall be held in trust for payment to the United States as required
by the Rebate Provisions and by the Regulations and as contemplated under the provisions of
this Ordinance.
• Section 17.403. Records. The City agrees to keep and retain or cause to be kept and
retained until six years (three years for the records required by Section 17.404(c)) after the Bonds
are paid in full adequate records with respect to the investment of all Gross Proceeds and
amounts in the Rebate Fund. Such records shall include:
(a) purchase price;
(b) purchase date;
(c) type of investment;
(d) accrued interest paid;
(e) interest rate;
(f) principal amount;
(g) maturity date;
(h) interest payment date;
is (i) date of liquidation; and
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(j) receipt upon liquidation. •
If any investment becomes Gross Proceeds on a date other than the date such investment is
purchased, the records required to be kept shall include the fair market value of such investment
on the date it becomes Gross Proceeds. If any investment is retained after the date the last Bond
is retired, the records required to be kept shall include the fair market value of such investment
on the date the last Bond is retired. Amounts or investments will be segregated whenever
necessary to maintain these records.
Section 17.404. Fair Market Value; Certificates of Deposit and Investment Agreements.
The City will continuously invest all amounts on deposit in the Rebate Fund, together with the
amounts, if any, to be transferred to the Rebate Fund, in any investment permitted under this
Ordinance. The City shall take into account prudent investment standards and the date on which
such moneys may be needed. Except as provided in the next sentence, all amounts that
constitute Gross Proceeds and all amounts in the Rebate Fund shall be invested at all times to the
greatest extent practicable, and no amounts may be held as cash or be invested in zero yield
investments other than obligations of the United States purchased directly from the United
States. In the event moneys cannot be invested, other than as provided in this sentence due to the
denomination, price or availability of investments, the amounts shall be invested in an interest
bearing deposit of a bank with a yield not less than that paid to the general public or held
uninvested to the minimum extent necessary. Gross Proceeds and any amounts in the Rebate
Fund that are invested in certificates of deposit or in GICs shall be invested only in accordance
with the following provisions: •
(a) Investments in certificates of deposit of banks or savings and loan
associations that have a fixed interest rate, fixed payment schedules and substantial
penalties for early withdrawal shall be made only if either (i) the Yield on the certificate
of deposit (A) is not less than the Yield on reasonably comparable direct obligations of
the United States and (B) is not less than the highest Yield that is published or posted by
the provider to be currently available from the provider on reasonably comparable
certificates of deposit offered to the public or (ii) the investment is an investment in a
GIC and qualifies under paragraph (b) below.
(b) Investments in GICs shall be made only if-
(i) the bid specifications are in writing, include all material terms of the
bid and are timely forwarded to potential providers (a term is material if it may
directly or indirectly affect the yield on the GIC);
(ii) the terms of the bid specifications are commercially reasonable (a
term is commercially reasonable if there is a legitimate business purpose for the
term other than to reduce the yield on the GIC);
(iii) all bidders for the GIC have equal opportunity to bid so that, for
example, no bidder is given the opportunity to review others bids (a last look) •
before bidding;
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• (iv) any agent used to conduct the bidding for the GIC does not bid to
provide the GIC;
(v) at least three of the providers solicited for bids for the GIC are
reasonably competitive providers of investments. of the type purchased (i.e.,
providers that have established industry reputations as competitive providers of
the type of investments being purchased);
(vi) at least three of the entities that submit a bid do not have a financial
interest in the Bonds;
(vii) at least one of the entities that provided a bid is a reasonably
competitive provider that does not have a financial interest in the Bonds;
(viii) the bid specifications include a statement notifying potential
providers that submission of a bid is a representation that the potential provider
did not consult with any other provider about its bid, that the bid was determined
without regard to any other formal or informal agreement that the potential
provider has with the City or any other person (whether or not in connection with
the Bonds) and that the bid is not being submitted solely as a courtesy to the City
or any other person for purposes of satisfying the federal income tax requirements
relating to the bidding for the GIC;
• (ix) the determination of the terms of the GIC takes into account the
reasonably expected deposit and drawdown schedule for the amounts to be
invested;
•
(x) the highest -yielding GIC for which a qualifying bid is made
(determined net of broker's fees) is in fact purchased; and
(xi) the obligor on the GIC certifies the administrative costs that it is
paying or expects to pay to third parties in connection with the GIC.
(c) If a GIC is purchased, the City will retain the following records with its
bond documents until three years after the Bonds are redeemed in their entirety:
(i) a copy of the GIC;
(ii) the receipt or other record of the amount actually paid for the GIC,
including a record of any administrative costs paid and the certification under
paragraph (b)(xi) of this section;
(iii) for each bid that is submitted, the name of the person and entity
submitting the bid, the time and date of the bid, and the bid results; and
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(iv) the bid solicitation form and, if the terms of the GIC deviated from
the bid solicitation form or a submitted bid is modified, a brief statement
explaining the deviation and stating the purpose for the deviation.
Moneys to be rebated to the United States shall be invested to mature on or prior to the
anticipated rebate payment date. All investments made with Gross Proceeds or amounts in the
Rebate Fund shall be bought and sold at fair market value. The fair market value of an
investment is the price at which a willing buyer would purchase the investment from a willing
seller in a bona fide, arm's length transaction. Except for investments specifically described in
this section and United States Treasury obligations that are purchased directly from the United
States Treasury, only investments that are traded on an established securities market, within the
meaning of regulations promulgated under Section 1273 of the Code, will be purchased with
Gross Proceeds. In general, an "established securities market" includes: (i) property that is
listed on a national securities exchange, an interdealer quotation system or certain foreign
exchanges; (ii) property that is traded on a Commodities Futures Trading Commission
designated board of trade or an interbank market; (iii) property that appears on a quotation
medium; and (iv) property for which price quotations are readily available from dealers and
brokers. A debt instrument is not treated as traded on an established market solely because it is
convertible into property which is so traded. An investment of Gross Proceeds in an External
Commingled Fund shall be made only to the extent that such investment is made without an
intent to reduce the amount to be rebated to the United States Government or to create a smaller
profit or a larger loss than would have resulted if the transaction had been at arm's length and
had the rebate or Yield restriction requirements not been relevant to the City. An investment of .
Gross Proceeds shall be made in a Commingled Fund other than an External Commingled Fund
only if the investments made by such Commingled Fund satisfy the provisions of this
Section 17.404. A single investment, or multiple investments awarded to a provider based on a
single bid may not be used for funds subject to different rules relating to rebate or yield
restriction. The foregoing provisions of this Section 17.404 satisfy various safe harbors set forth
in the Regulations relating to the valuation of certain types of investments. The safe harbor
provisions of this Section 17.404 are contained herein for the protection of the City, who has
covenanted not to take any action to adversely affect the tax-exempt status of the interest on the
Bonds. The City will contact Bond Counsel if it does not intend to comply with the provisions
of this Section 17.404 and forego the protection provided by the safe harbors provided herein.
Modifications to this Ordinance can be made in accordance with Section 17.709 hereof.
Section 17.405. Arbitrage Elections. A schedule of elections regarding certain matters with
respect to arbitrage may be provided in a Supplemental Tax Certificate.
Section 17.406. Small Issuer Exception. The City will not avail itself of the small issuer
exception under the Regulations in calendar year 2003.
Section 17.501. Issue Price. Prior to Closing, the Purchaser shall certify, in a certificate or
other proper instrument, the first offering price at which it sold at least ten percent of each
maturity of the Bonds. 0
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• Section 17.502. Yield Limits. Except as provided in paragraphs (a) or (b), all Gross
Proceeds shall be invested at market prices and at a Yield (after taking into account any Yield
Reduction Payments) not in excess of the Yield on the Bonds plus if only amounts in the Project
Fund are subject to this yield limitation, 1/8th of one percent.
The following may be invested without Yield restriction:
(a) amounts as follows:
(i) amounts on deposit in the Bond Fund (except for capitalized interest) that
have not been on deposit under the Ordinance for more than 13 months, so long as the
Bond Fund continues to qualify as a bona fide debt service fund as described in
Section 17.302 hereof;
(ii) amounts on deposit in the Project Fund that are reasonably expected to pay
for the costs of the Project, costs of issuance of the Bonds, or interest on the Bonds
during the three year period beginning on the date of issue of the Bonds prior to three
years after Closing;
(iii) amounts in the Expense Fund prior to transfer to the Project Fund;
(b) and further amounts as follows:
• (i) an amount not to exceed the lesser of $100,000 or five percent of the Sale
Proceeds;
(ii) amounts invested in Qualified Tax Exempt Obligations (to the extent
permitted by law and this Ordinance);
(iii) amounts in the Rebate Fund;
(iv) all amounts other than Sale Proceeds for the first 30 days after they become
Gross Proceeds; and
(v) all amounts derived from the investment of Sale Proceeds or investment
earnings thereon for a period of one year from the date received.
Section 17.503. Continuing Nature of Yield Limits. Except as provided in Section 17.709,
once moneys are subject to the Yield limits of Section 17.502 hereof, such moneys remain Yield
restricted until they cease to be Gross Proceeds.
Section 17.504. Federal Guarantees. Except for investments meeting the requirements of
Sections 17.502(a) hereof, investments of Gross Proceeds shall not be made in (a) investments
constituting obligations of or guaranteed, directly or indirectly, by the United States (except
obligations of the United States Treasury or investments in obligations issued pursuant to Section
• 21B(d)(3) of the Federal Home Loan Bank Act, as amended (e.g., Refcorp Strips)); or (b)
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federally insured deposits or accounts (as defined in Section 149(b)(4)(B) of the Code). Except .
as otherwise permitted in this Section and the Regulations, no portion of the payment of principal
or interest on the Bonds, the Credit Facility, as may be applicable, or any other credit
enhancement or liquidity device relating to the foregoing is or will be guaranteed, directly or
indirectly (in whole or in part), by the United States (or any agency or instrumentality thereof)
including a lease, incentive payment, research or output contract or any similar arrangement,
agreement or understanding with the United States or any agency or instrumentality thereof. No
portion of the Gross Proceeds has been or will be used to make loans the payment of principal or
interest with respect to which is or will be guaranteed (in whole or in part) by the United States
(or any agency or instrumentality thereof). Neither this Section nor Section 17.505 applies to
any guarantee by the Federal Housing Administration, the Federal National Mortgage
Association, the Federal Home Loan Mortgage Corporation, the Government National Mortgage
Association, the Student Loan Marketing Association or the Bonneville Power Administration
pursuant to the Northwest Power Act (16 U.S.C. 839d) as in effect on the date of enactment of
the Tax Reform Act of 1984.
Section 17.505. Investments After the Expiration of Temporary Periods, Etc. After the
expiration of the temporary period set forth in Section 17.502(a)(ii), amounts in the Project Fund
may not be invested in (i) federally insured deposits or accounts (as defined in
Section 149(b)(4)(B) of the Code) or (ii) investments constituting obligations of or guaranteed,
directly or indirectly, by the United States (except obligations of the United States Treasury or
investments in obligations issued pursuant to Section 21B(d)(3) of the Federal Home Loan Bank
Act, as amended (e.g., Refcorp Strips). Any other amounts that are subject to the yield limitation •
in Section 17.502 because Section 17.502(a) is not applicable and amounts not subject to yield
restriction only because they are described in Section 17.502(b) are also subject to the limitation
set forth in the preceding sentence.
Section 17.506. Treatment of Certain Credit Facility Fees. Provided appropriate
representations, as reviewed by Bond Counsel, are made at Closing, which the City shall review
and have no reason to believe to be untrue, and the representations contained in this Ordinance,
the fee paid to the Credit Facility Provider with respect to the Credit Facility may be treated as
interest in computing Bond Yield. Neither the City nor any member of the same Controlled
Group as the City shall be a Related Person as defined in Section 144(a)(3) of the Code to a
Credit Facility Provider. The fee paid to any Credit Facility Provider shall not exceed ten
percent of the Sale Proceeds. Other than any fee paid to the Credit Facility Provider, neither the
Credit Facility Provider, if any, nor any person who is a Related Person to the Credit Facility
Provider within the meaning of Section 144(a)(3) of the Code will use any Sale Proceeds or
investment earnings thereon. The fee paid for the Credit Facility shall not exceed a reasonable,
arm's length charge for the transfer of credit risk. The fee shall not include any payment for any
direct or indirect services other than the transfer of credit risk.
Section 17.601. Payment and Use Tests. (a) No more than five percent of the proceeds of
the Bonds and investment earnings thereon will be used, directly or indirectly, in whole or in
part, in any Private Business Use. The City acknowledges that, for purposes of the preceding
sentence, Gross Proceeds used to pay costs of issuance and other common costs (such as fees •
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• paid for a qualified guarantee or qualified hedge) or invested in a reserve or replacement fund
must be ratably allocated among all the purposes for which Gross Proceeds are being used.
(b) The payment of more than five percent of the principal of or the interest on the
Bonds will not be, directly or indirectly (i) secured by any interest in (A) property used or to be
used in any Private Business Use or (B) payments in respect of such property or (ii) on a present
value basis, derived from payments (whether or not to the City or a member of the same
Controlled Group as the City) in respect of property, or borrowed money, used or to be used in
any Private Business Use.
(c) No more than the lesser of $5,000,000 or five percent of the Sale Proceeds and
investment earnings thereon will be used, directly or indirectly, to make or finance loans to any
persons. The City acknowledges that, for purposes of the preceding sentence, Gross Proceeds
used to pay costs of issuance and other common costs (such as capitalized interest and fees paid
for a qualified guarantee or qualified hedge) or invested in a reserve or replacement fund must be
ratably allocated among all the purposes for which Gross Proceeds are being used.
(d) No user of the Project other than a state or local governmental unit will use more
than five percent of the Project on any basis other than the same basis as the general public.
(e) No more than the lesser of five percent of the proceeds of the Bonds or $5,000,000
of proceeds of the Bonds and investment earnings thereon have been or will be used, to provide
professional sports facilities. For purposes of this paragraph, the term "professional sports
facilities" (i) means real property or related improvements used for professional sports
exhibitions, games or training, regardless of whether the admission of the public or press is
allowed or paid and (ii) includes any use of a facility that generates a direct or indirect monetary
benefit (other than reimbursement for out-of-pocket expenses) for a person who uses such
facilities for professional sport exhibitions, games or training.
0
Section 17.702. No Common Plan of Financing. Since a date not less than 30 days prior to •
action on this Ordinance, neither the City nor any member of the same Controlled Group as the
City has sold or delivered any obligations other than the Bonds that are reasonably expected to
be paid out of substantially the same source of funds as the Bonds. Neither the City nor any
member of the same Controlled Group as the City will sell or deliver within 15 days after the
date hereof any obligations other than the Bonds that are reasonably expected to be paid out of
substantially the same source of funds as the Bonds.
Section 17.703. No Sale of the Project. (a) Other than as provided in the next sentence,
neither the Project nor any portion thereof has been, is expected to be, or will be sold or
otherwise disposed of, in whole or in part, prior to the earlier of (i) the last date of the reasonably
expected economic life to the City of the property (determined on the date of issuance of the
Bonds) or (ii) the last maturity date of the Bonds. The City may dispose of personal property in
the ordinary course of an established government program prior to the earlier of (i) the last date
of the reasonably expected economic life to the City of the property (determined on the date of
issuance of the Bonds) or (ii) the last maturity of the Bonds, provided: (A) the weighted average
maturity of the Bonds financing the personal property is not greater than 120 percent of the
reasonably expected actual use of that property for governmental purposes; (B) the City
reasonably expects on the issue date that the fair market value of that property on the date of
disposition will be not greater than 25 percent of its cost; (C) the property is no longer suitable
for its governmental purposes on the date of disposition; and (D) the City deposits amounts
received from the disposition in a commingled fund with substantial tax or other governmental
revenues and the City reasonably expects to spend the amounts on governmental programs •
within six months from the date of the commingling.
(b) The City acknowledges that if Bond -financed property is sold or otherwise disposed
of in a manner contrary to (a) above, such sale or disposition may constitute a "deliberate action"
within the meaning of the Regulations that may require remedial actions to prevent the Bonds
from becoming private activity bonds. The City shall promptly contact Bond Counsel if a sale or
other disposition of Bond -financed property is considered by the City.
Section 17.704. Purchase of Bonds by City. The City will not purchase any of the Bonds
except to cancel such Bonds.
Section 17.705. First Call Date Limitation. The period between the date of Closing and the
first call date of the Bonds shall be not more than 10-1/2 years.
Section 17.706. Registered Form. The City recognizes that Section 149(a) of the Code
requires the Bonds to be issued and to remain in fully registered form in order that interest
thereon be exempt from federal income taxation under laws in force at the time the Bonds are
delivered. In this connection, the City agrees that it will not take any action to permit the Bonds
to be issued in, or converted into, bearer or coupon form.
Section 17.707. First Amendment. The City acknowledges and agrees that it will not use, or
allow the Project to be used, in a manner that is prohibited by the Establishment of Religion
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• Clause of the First Amendment to the Constitution of the United States of America or by any
comparable provisions of the Constitution of the State.
Section 17.708. Future Events. The City acknowledges that any changes in facts or
expectations from those set forth herein may result in different Yield restrictions or rebate
requirements from those set forth herein. The City shall promptly contact Bond Counsel if such
changes do occur.
Section 17.709. Permitted Changes, Opinion of Bond Counsel. .The Yield restrictions
contained in Section 17.502 or any other restriction or covenant contained herein need not be
observed or may be changed if such nonobservance or change will not result in the loss of any
exemption for the purpose of federal income taxation to which interest on the Bonds is otherwise
entitled and the City receives an opinion of Bond Counsel to such effect.
Section 17.710. Expectations. The City has reviewed the facts, estimates and circumstances
presented by the City and other persons in existence on this date. Such facts, estimates and
circumstances, together with the expectations of the City as to future events, are set forth in
summary form in this Section. Such facts and estimates are true and are not incomplete in any
material respect. On the basis of the facts and estimates contained herein, the City has adopted
the expectations contained herein. On the basis of such facts, estimates, circumstances and
expectations, it is not expected that Sale Proceeds, investment earnings thereon or any other
moneys or property will be used in a manner that will cause the Bonds to be arbitrage bonds
within the meaning of the Rebate Provisions and the Regulations. Such expectations are
• reasonable and there are no other facts, estimates and circumstances that would materially
change such expectations.
Section 18. Continuing Disclosure. The Mayor or the City Clerk of the City is hereby
authorized, empowered and directed to execute and deliver the Continuing Disclosure
Undertaking (the "Continuing Disclosure Undertaking") substantially in the form attached
hereto as Exhibit C to this Ordinance, made a part hereof by this reference, and hereby
approved; the officer signatory to such Continuing Disclosure Undertaking being hereby
authorized and directed to execute same, his or her execution to constitute conclusive proof of
action in accordance with this Ordinance, and approval of all completions or revisions necessary
or appropriate to such 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
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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 19. Pertaining to the Bond Registrar. 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 under this Ordinance. In addition
to the terms of such agreements and subject to modification thereby, the Bond Registrar and
Paying Agent by acceptance of duties under this Ordinance 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) 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; (d) as to the Bond Registrar, to furnish the
City at least annually a certificate with respect to Bonds cancelled 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: (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 0
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• 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 its principal corporate trust office in Illinois, and
having capital and surplus and undivided profits in excess of $50,000,000. 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.
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•
Section 20. Defeasance. Any Bond or Bonds which (a) are paid and cancelled, (b)
f
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 funds and Defeasance
Obligations have been deposited with the Paying Agent 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 Tax-exempt status of the 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
"Directs "),
•
and credit obligations of the United States Treasury ( (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 21. Publication of Ordinance. A full, true and complete copy of this Ordinance
shall be published within ten days after passage in pamphlet form by authority of the City
Council.
•
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• Section 22. Superseder and Effective Date. All ordinances, resolutions and orders, or
parts thereof, in conflict herewith, are to the extent of such conflict hereby superseded; and this
Ordinance shall be in full force and effect immediately upon its passage, approval and
publication.
AYES Feldman, Newman, Jean -Baptiste, Wynne, Bernstein, Kent,
Moran, Tisdahl, Rainey
NAYS: None
ABSENT: None
ADOPTED: May 7, 2003
•
RECORDED in City Records: May 8, 2003.
APPROVED: May 8 , 2003
Mayor, City of Evanston
Cook County, Illinois
PUBLISHED in pamphlet form by authority of the City Council on May 8, 2003.
Attest:
City le ai of Evanston
Cook Co y, Illinois
is
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