HomeMy WebLinkAboutORDINANCES-1999-005-O-99ORDINANCE NUMBER 5- 0-99
AN ORDINANCE authorizing and providing for the issue of
$3,500,000 Water Revenue Bonds, Series 1999, of the City of
Evanston, Cook County, Illinois, for the purpose of defraying the
cost of improving and extending the present waterworks system of
said City, prescribing all the details of said bonds, and providing
• for the collection, segregation and distribution of the revenue of
the waterworks system of said City.
Adopted by the City Council on
the � day of January 1999.
Published in Pamphlet Form by the
Authority of the City Council on
the I day of Januaff 1999.
Fe6r',t4r V
858472.01.02
2057685 • TVM • 1/8/99
PREAMBLES
SECTION 1.
SECTION 2.
SECTION 3
SECTION 4
SECTION 5.
SECTION 6.
SECTION 7.
SECTION 8.
SECTION 9.
SECTION 10.
SECTION 11.
SECTION 12.
SECTION 13.
SECTION 14.
SECTION 15.
SECTION 16.
SECTION 17.
SECTION 18.
SECTION 19.
SECTION 20.
SECTION 21.
SECTION 22.
SECTION 23.
SECTION 24.
SECTION 25.
SECTION 26
TABLE OF CONTENTS
PAGE
.........................................................................................................................1
DEFINITIONS...................................................................................................... 3
INCORPORATION OF PREAMBLES......................................................................... 8
DETERMINATION TO ISSUE BONDS......................................................................8
DETERMINATION OF USEFUL LIFE.......................................................................8
BONDDETAILS..................................................................................................8
BOOK ENTRY PROVISIONS..................................................................................9
EXECUTION; AUTHENTICATION..................................................................:..... 11
REDEMPTION................................................................................................... 12
AMENDMENT................................................................................................... 16
REGISTRATION OF BONDS; PERSONS TREATED AS OWNERS................................17
FORMOF BOND................................................................................................ 18
•
BONDS LIMITED OBLIGATIONS......................................................................... 24
FISCAL YEAR AND DEPOSIT OF REVENUES........................................................ 24 •
ACCOUNTS AND FLOW OF FUNDS......................................................................
25
GENERAL COVENANTS.....................................................................................29
PARITYBONDS.................................................................................................
35
SALE OF BONDS; BOND ORDER.........................................................................
37
APPLICATION OF PROCEEDS..............................................................................
39
CONTINUING DISCLOSURE................................................................................40
TAX-EXEMPT BONDS........................................................................................41
PERTAINING TO THE BOND REGISTRAR..............................................................
54
PROVISIONS A CONTRACT.................................................................................55
DEFEASANCE...................................................................................................
56
SEVERABILITY.................................................................................................56
SUPERSEDER....................................................................................................56 •
PUBLICATION................................................................................................... 57
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ORDINANCE No. b -0-99
• AN ORDINANCE authorizing and providing for the issue of
$3,500,000 Water Revenue Bonds, Series 1999, of the City of
Evanston, Cook County, Illinois, for the purpose of defraying the
cost of improving and extending the present waterworks system of
said City, prescribing all the details of said bonds, and providing
for the collection, segregation and distribution of the revenue of
the waterworks system of said City.
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 home rule powers of the City and the provisions of Division 129 of
Article 11 of the Illinois Municipal Code, as amended (collectively, such constitutional grant of
power and such Code being the "Act" as more particularly defined below), and other applicable
law, the City has been and is authorized to issue water revenue bonds for waterworks system
purposes.
C. The City Council of the City (the "City Council") has reviewed the status of the
System (as defined below), and it is deemed advisable, necessary and for the best interests of the
City that certain improvements and replacements .be constructed and installed, including the
replacement of a portion of a 36 inch feeder main to the Village of Skokie; replacement of a high
lift pump and engine; improvements to the supervisory control and data acquisition (SCADA)
• system at the water treatment plant; new water billing system programs; and miscellaneous water
meter replacement; together with all necessary pipes, valves, fittings, connections, ancillary
facilities and appurtenances, costs of engineering, legal and financing services, and •
contingencies, and the total estimated cost of such project (the "Project") is the sum of
$3,500,000, all in accordance with the preliminary plans and specifications, heretofore prepared
by the Superintendent of Water and Sewers, and approved by the City Council, and now on file
in the office of the City Clerk for public inspection.
D. The City does not have funds available for the purpose of paying the cost of the
Project, and it is advisable for the City to provide funds by borrowing for the Project and in
evidence thereof to issue its water revenue bonds.
E. Pursuant to the Act, and other applicable law, the City has been and is authorized to
issue water revenue bonds for the Project.
F. The City has previously issued water revenue bonds, as follows:
NAMEAND ORIGINAL PURSUANT TO CURRENTLY •
SERIES AMOUNT ($) ORDINANCE OUTSTANDING ($)
Water Revenue Bonds,
Series 1992 3,600,000 39-0-92 2,935,000
Water Revenue Bonds,
Series 1997 8,775,000 112-0-97 8,775,000
all which said currently outstanding bonds aggregate the principal amount of $11,710,000 (such
bonds being the "Currently Outstanding Bonds").
G. Pursuant to the provisions of the ordinances (the "Currently Outstanding Bond
Ordinances") adopted by the City Council authorizing the Currently Outstanding Bonds, no
additional bonds shall be issued to share ratably and equally in the income derived from the
operation of the System ( "Parity Bonds" as defined below) unless the revenues for the fiscal
year then next preceding were sufficient to comply with the specific restrictions set forth in the
Currently Outstanding Bond Ordinances; and the City Council has caused an audit of the •
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earnings of the System to be made for the last preceding fiscal year and does hereby determine
• that such earnings comply with the covenants and restrictions provided for in and by each of the
Currently Outstanding Bond Ordinances and, further, that such earnings were sufficient to permit
the issuance of the proposed additional water revenue bonds for the Project as Parity Bonds as
authorized by the provisions of this Ordinance.
H. The City Council does hereby determine that it is advisable and in the best interests
of the City to borrow $3,500,000 at this time pursuant to the Act as hereinafter defined for the
purpose of paying the costs of the Project and, in evidence of such borrowing, to issue its water
revenue bonds in the principal amount of such amount.
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
Currently Outstanding Bonds
Currently Outstanding Bond Ordinances
Project
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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 an •
p pp d the
home rule powers of the City under Section 6 of Article VII of the Illinois Constitution of
1970; and in the event of conflict between the provisions of said code and home rule
powers, the home rule powers shall be deemed to supersede the provisions of said code.
"Bond Order" means the Bond Order as authorized to be executed by the
Designated Officials of the City as set forth in Section 17 of this Ordinance 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 American National Bank and Trust Company of
Chicago, Chicago, Illinois, a bank having trust powers, or a successor thereto or a
successor designated as and bond registrar hereunder. •
"Bond Year" for a series of bonds means a twelve-month period beginning the
day after principal of Outstanding Bonds of any series are annually to become due (such
day of the year being the initial date) and ending on the day preceding the next initial
date; e.g., for bonds with principal due on January 1 of various years, the Bond Year
would be January 2 of a given year through January 1 of the next year.
"Bonds" means the not to exceed $3,500,000 Water Revenue Bonds, Series 1999,
authorized to be issued by this Ordinance.
"Code" means the Internal Revenue Code of 1986.
"Defeasance Obligations" means (i) noncallable direct full faith and credit
obligations of the United States of America ("Directs"), (ii) certificates of participation
in a trust comprised exclusively of Directs or cash, which certificates are noncallable and
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nonredeemable, or (iii) obligations the complete and timely payment of which is fully
• guaranteed by the United States of America, which obligations are noncallable and
nonredeemable.
"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.
"Financial Advisor" means R.V. Norene & Associates, Inc., the financial advisor
to the City for the sale of the Bonds.
"Fiscal Year" means a twelve-month period beginning March 1 of a given year
and ending on the last day of February of the following year, or such other fiscal year as
• the City may select.
"Maximum Annual Debt Service " means an amount of money equal to the highest
future principal and interest requirement of all Outstanding Bonds required to be
deposited into the Bond and Interest Account continued and maintained by this
Ordinance in any Fiscal Year, including and subsequent to the Fiscal Year in which the
computation is made; and, provided, that any Outstanding Bonds required to be redeemed
pursuant to mandatory redemption from said Bond and Interest Account shall be treated
as falling due on the date required to be redeemed (except in the case of failure to make
any such mandatory redemption) and not on the stated maturity date of such Outstanding
Bonds.
"Net Revenues" means Revenues minus Operation and Maintenance Costs.
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"Operation and Maintenance Costs" means all costs of operating, maintaining
and routine repair of the System, including wages, salaries, costs of materials and •
supplies, taxes, power, fuel, insurance-, purchase of water or sewage treatment services
(including all payments by the City pursuant to long term contracts for such services to
the extent provided in such contracts); but excluding debt service, depreciation, or any
reserve requirements; and otherwise determined in accordance with generally accepted
accounting principles for municipal enterprise funds. Money in this account shall not be
used to pay the costs of extraordinary or unusual repairs and maintenance, capital
expenditures, or to provide for any transfer in lieu of corporate taxes, or general
supervision or administrative charges by the City.
"Ordinance" means this Ordinance, numbered = 0-99, and passed by the City
Council on the day of January 1999.
"Outstanding Bonds" means Currently Outstanding Bonds, Bonds and Parity •
Bonds which are outstanding and unpaid; provided, however, such term shall not include,
for purposes of this Ordinance, any such Currently Outstanding Bonds which shall cease
to be "Outstanding Bonds" under the applicable Currently Outstanding Bond Ordinance
or any such Bonds or Parity Bonds (i) which have matured and for which moneys are on
deposit with proper paying agents, or are otherwise properly available, sufficient to pay
all principal thereof and interest thereon, or (ii) the provision for payment of which has
been made by the City by the deposit in an irrevocable trust or escrow of funds, which
may be invested in Defeasance Obligations, the principal of and interest on which will be
sufficient, with any funds left uninvested, to pay at maturity or as called for redemption
all the principal of and interest and redemption premium, if any, on such Currently
Outstanding Bonds, Bonds or Parity Bonds.
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"Parity Bonds" means a bond or bonds or any other obligation to be issued
0 subsequent in time to the Bonds and which will share ratably and equally in the earnings
of the System with then Outstanding Bonds.
"Revenues" means all gross revenues or income from whatever source derived
from the System, including (i) investment income; (ii) connection, permit and inspection
fees and the like; (iii) penalties and delinquency charges; (iv) capital development,
reimbursement, or recovery charges and the like; (v) annexation or pre -annexation
charges insofar as designated by the City Council as paid for System connection or
service; but excluding expressly (a) non -recurring income from the sale of property of the
System; (b) governmental or other grants; (c) advances or grants made from the City; and
as otherwise determined in accordance with generally accepted accounting principles for
municipal enterprise funds.
• "System" refers to all property, real, personal or otherwise owned or to be owned
by the City or under the control of the City, and used for waterworks purposes, and any
•
and all further extensions, improvements and additions to the System.
"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 and in computing the "branch profits tax" imposed on certain
foreign corporations.
"Water Fund" means the "Water Revenue Fund of the City of Evanston. "
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C. Definitions also appear in the preambles hereto or in specific sections, as appear
below. The table of contents preceding and 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 the recitals
contained in the preambles to this Ordinance are true and correct 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 issue the Bonds to acquire and construct the Project for the public health, safety and
welfare; and it is hereby found and determined that such issuance is for a proper public purpose,
is in the public interest, and is authorized by the Act and the Currently Outstanding Bond
Ordinances.
Section 4. Determination of Useful Life. The City Council does hereby determine the
period of usefulness of the System to be not less than 40 years from the date of the Bonds.
Section 5. Bond Details. There shall be issued and sold the Bonds in the aggregate
principal amount of $3,500,000. The Bonds shall each be designated "Water Revenue Bond,
Series 1999 "; be dated as of February 1, 1999, or such other date, not earlier than February 1,
1999, and not later than the date of issuance, as may be stated in the Bond Order (the "Dated
Date "); and shall also bear the date of authentication thereof. The Bonds shall be in fully
registered book -entry form (as more particularly described below and defined as "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 from 2000 and up to and including the year 2014 (subject to the right of
prior redemption) as shall be set forth in the Bond Order, and in such principal amounts as shall
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be set forth in the Bond Order; provided, however, that the sum of the principal of and interest on
• the Bonds during any Bond Year shall not be less than $300,000 nor more than $340,000. Each
Bond shall bear interest, at a rate not to exceed 9.00% 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, 1999. Interest on each
Bond shall be paid by check or draft of the Bond Registrar, payable upon presentation thereof in
lawful money of the United States of America, to the person in whose name such Bond is
registered at the close of business on the applicable record date (the "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 in immediately available funds as may be
• agreed with the Depository for so long as the Depository is the registered owner as of a given
Record Date. The Record Date shall be the 15th day of the month preceding any regular interest
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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. 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 Bond Registrar located in the City of Chicago, Illinois, or at
successor Bond Registrar and locality.
Section 6. 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 � he Depository or a designee or nominee of the Depository (the "Nominee"). Except as
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otherwise expressly provided, all of the outstanding Bonds from time to time shall be registered ,
in the Bond Register in the name of the Nominee (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 a Letter of Representations or to
utilize a previously executed Blanket Letter of Representations (either such being the "Letter of
Representations") in customary form for the Depository, to effectuate such Book Entry Form for
the Bonds. 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 Nominee, neither the City or its Director of Finance nor 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, the Director of Finance, and the Bond Registrar shall have no responsibility or
obligation with respect to (a) the accuracy of the records of the Depository, the Nominee, or any
Depository Participant with respect to any ownership interest in the Bonds, (b) the delivery to
any Depository Participant or any other person, other than a registered owner of a Bond as
shown in the Bond Register or as otherwise expressly provided in the Representations Letter, of
any notice with respect to the Bonds, including any notice of redemption, or (c) the payment to
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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 or redemption price of or
interest on the Bonds. No person other than a registered owner of a Bond as shown in the Bond
Register shall receive a Bond certificate with respect to any Bond. In the event that (a) the City
determines that the Depository is incapable of discharging its responsibilities described herein
and in the Letter of Representations, (b) the agreement among the City, and 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, and the Bonds shall no longer be restricted to being registered in the Bond Register
in the name of the Nominee. 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 hereof.
Section 7. 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
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thereon a certificate of authentication, substantially in the form hereinafter set forth, duly
executed by the Bond Registrar as authenticating agent of the City and showing the date of
•
authentication. No Bond shall be valid or obligatory for any purpose or be entitled to any
security or benefit under this Ordinance unless and until such certificate of authentication shall
have been duly executed by the Bond Registrar by manual signature, and such certificate of
authentication upon any such Bond shall be conclusive evidence that such Bond has been
authenticated and delivered under this Ordinance. The certificate of authentication on any Bond
shall be deemed to have been executed by it if signed by an authorized officer of the Bond
Registrar, but it shall not be necessary that the same officer sign the certificate of authentication
on all of the Bonds issued hereunder
Section 8. Redemption. The Bonds may 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 as provided in
the Bond Order, and if in part, in such order of maturities as shall be selected by the City, 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 being redeemed) of not to exceed 103% of par plus accrued interest to the date fixed for
redemption, as provided in the Bond Order. Notwithstanding any other provision of this
Ordinance, the Bond Order may provide for non -callable Bonds. With respect to an optional
redemption of any Bond or Bonds, unless moneys sufficient to pay the redemption price of and
interest on the Bonds to be redeemed shall have been received by the Bond Registrar prior to the
giving of the notice of redemption, such notice may, at the option of the City, state that such
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
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notice, in the same manner in which the notice of redemption shall have been given, that such
moneys were not so received and that such Bonds will not be redeemed.
The City shall, at least 45 days prior to a redemption date (unless a shorter time period
shall be satisfactory to the Bond Registrar), notify the Bond Registrar of such redemption date
and of the maturities and principal amounts of Bonds to be redeemed. For purposes of any
redemption of less than all of the Bonds of a single maturity, the particular Bonds or portions of
Bonds to be redeemed shall be selected by lot not more than 60 days prior to the redemption date
by the Bond Registrar for the Bonds of such maturity by such method of lottery as the Bond
Registrar shall deem fair and appropriate; provided, that such lottery shall provide for the
selection for redemption of Bonds or portions thereof so that any $5,000 Bond or $5,000 portion
of a Bond shall be as likely to be called for redemption as any other such $5,000 Bond or $5,000
portion. The Bond Registrar shall promptly notify the City in writing of the Bonds or portions of
• Bonds selected for redemption and, in the case of any Bond selected for partial redemption, the
principal amount thereof to be redeemed. Unless waived by the registered owner of Bonds to be
redeemed, official notice of any such redemption shall be given by the Bond Registrar on behalf
of the City by mailing the redemption notice by first class mail not less than 30 days and not
more than 60 days prior to the date fixed for redemption to each registered owner of the Bond or
Bonds to be redeemed at the address shown on the Bond Register or at such other address as is
furnished in writing by such registered owner to the Bond Registrar. All official notices of
redemption shall include the name of the Bonds and at least the information as follows:
(a) the redemption date;
(b) the redemption price;
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(c) if less than all of the outstanding Bonds of a particular maturity are to be
redeemed, the identification (and, in the case of partial redemption of Bonds within such •
maturity, the respective principal amounts) of the Bonds to be redeemed;
(d) a statement that on the redemption date the redemption price will become
due and payable upon each such Bond or portion thereof called for redemption and that
interest thereon shall cease to accrue from and after said date; and
(e) the place where such Bonds are to be surrendered for payment of the
redemption price, which place of payment shall be the principal corporate trust office of
the Bond Registrar.
Unless moneys sufficient to pay the redemption price and interest on 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. Official notice of redemption having been given as described, the Bonds or
portions of Bonds so to be redeemed shall, subject to the provision for conditional redemption as
stated above, become due and payable on the redemption date 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. 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
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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 off -a Bond entitled to receive such notice, either before or after the event, and such waiver
shall be the equivalent of such notice. Waivers of notice by registered owners shall be filed with
the Bond Registrar, but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver. In lieu of the foregoing 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 its Nominee, as registered
owner, of the foregoing notice. Upon surrender of such Bonds for redemption in accordance
with said notice, such Bonds shall be paid by the Paying Agent at the redemption price. 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. 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
b i rest in the
amount of the unpaid principal. If any Bond or portion of Bond called for redemption shall not
be so paid upon surrender thereof for redemption, the principal shall, until paid or duly provided
for, bear interest from the redemption date at the rate borne by the Bond or portion of Bond so
called for redemption. All Bonds which have been redeemed shall be cancelled and destroyed by
the Bond Registrar and shall not be reissued 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. As part of their respective duties hereunder, the Bond Registrar
and Paying Agent shall prepare and forward to the City a statement as to notice given with
respect to each redemption together with copies of the notices as mailed and published.
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Section 9. Amendment. The rights and obligations of the City and of the registered
owners of Outstanding Bonds may from time to time be modified or amended by a supplemental
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ordinance adopted by the City Council with the written consent of the holders and registered
owners of not less than two-thirds of the principal amount of all Outstanding Bonds (excluding
any of said bonds owned by or under the control of the City); provided, that no such modification
or amendment shall extend or change the maturity of or date of redemption prior to maturity, or
reduce the interest rate on, or permit the creation of a preference or priority of any Outstanding
Bond or Outstanding Bonds over any other Outstanding Bond or Outstanding Bonds, or
otherwise alter or impair the obligation of the City to pay the principal of, interest on or
redemption price of any of the Outstanding Bonds at the time, place, rate, and in the currency
provided therein, or alter or impair the obligations of the City with respect to the Tax-exempt
status, the registration, transfer, exchange or notice of redemption of Bonds, without the express
consent of the holders and registered owners of all the Outstanding Bonds affected; nor shall any
such modification or amendment reduce the percentage of the holders and registered owners of
Outstanding Bonds required for the written consent of such modification or amendment without
the consent of the holders and owners of all of the Outstanding Bonds.
Ownership of Bonds for purposes of consent by the registered owners thereof shall be
conclusively proved by the Bond Register. In obtaining or receiving the consents of registered
owners, the City may establish reasonable rules of procedure including, without limitation, rules
relating to (i) a record date to fix the registered owners who are entitled to vote, (ii) solicitation
of proxies and (iii) a meeting of the registered owners for the taking of actions. The registered
owners of Bonds may vote their Bond interest in fractional shares. In the event that Bonds are
registered in the name or names of nominees or depositories, consent of such owners by proxy in
accordance with the applicable customs of the securities industry or rules of the Securities
•
-16-
Exchange Commission, Municipal Securities Rulemaking Board or other association or agency
having jurisdiction shall be sufficient.
Section 10. Registration of Bonds; Persons Treated as Owners. The City shall cause
books (the Bond Register) for the registration and for the transfer of the Bonds as provided in
this Ordinance to be kept at the principal corporate trust office of the Bond Registrar, which is
hereby constituted and appointed the registrar of the City for the Bonds. The City is authorized
to prepare, and the Bond Registrar or such other agent as the City may designate shall keep
custody of, multiple Bond blanks executed by the City for use in the transfer and exchange of
Bonds. 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
-17-
of Bonds of each maturity authenticated by the Bond Registrar shall not at any one time exceed
the authorized principal amount of Bonds for such maturity less the amount of such Bonds which
have been paid. The person in whose name any Bond shall be registered shall be deemed and
regarded as the absolute owner thereof for all purposes, and payment of the principal or
redemption price of or interest on any Bond shall be made only to or upon the order of the
registered owner thereof or said owner's legal representative. All such payments shall be valid
and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or
sums so paid. No service charge shall be made for any transfer or exchange of Bonds, but the
City or the Bond Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or exchange of Bonds
except in the case of the issuance of a Bond or Bonds for the unredeemed portion of a Bond
surrendered for redemption.
Section 11. Form of Bond. The Bonds shall be in substantially the form hereinafter set
forth; provided, however, that if the text of the Bonds is to be printed in its entirety on the front •
side of the Bonds, then the second paragraph on the front side and the legend "See Reverse Side
for Additional Provisions" shall be omitted and the text of paragraphs set forth for the reverse
side shall be inserted immediately after the first paragraph.
•
UI
•
•
,7
[Form of Bond - Front Side]
REGISTERED
No.
UNITED STATES OF AMERICA
STATE OF ILLINOIS
COUNTY OF COOK
CITY OF EVANSTON
WATER REVENUE BOND, SERIES 1999
See Reverse Side for
Additional Provisions
Interest Maturity
Rate: Date:
Registered Owner:
Principal Amount:
Dated
Date: February 1, 1999
REGISTERED
CUSIP
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, solely from the Water
Revenue Fund of the City as hereinafter provided and not otherwise, on the Maturity Date
identified above (subject to right of prior redemption), 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 July 1, 1999, and
semiannually thereafter on January 1 and July 1 of each year until said Principal Amount is paid
or duly provided for. Payment of interest shall be made to the Registered Owner hereof as
-19-
shown on the registration books of the City maintained by American National Bank and Trust
Company of Chicago, in the City of Chicago, Illinois, as paying agent and 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 Bond Registrar, payable upon
presentation in lawful money of the United States of America, mailed to the address of such
Registered Owner as it appears on such registration books or at such other address furnished in
writing by such Registered Owner to the Bond Registrar, or as otherwise agreed by the City and
the Bond Registrar 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 acts, conditions and things required to be done
precedent to and in the issuance of this Bond have been done and have happened and have been
performed in regular and due form of law and that provision has been made for depositing into
the Water Fund the entire Revenues received from the operation of the System to be applied in
the manner as set forth in the Ordinance; and the City hereby covenants and agrees that it will fix
and maintain rates for the use and service of the System and collect and account for the
Revenues derived therefrom sufficient at all times to pay Operation and Maintenance Costs, to
promptly pay principal of and interest on all bonds issued by the City which are payable solely
from the Revenues of the System, and to provide an adequate depreciation fund, and to comply
•
-20-
•
with all the covenants of and to maintain the accounts created by the Ordinance. The City
further covenants that in each Fiscal Year the Net Revenues shall be adequate to produce an
amount sufficient to provide not less than 125% of the principal and interest requirements of all
Outstanding Bonds for such Fiscal Year.
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 WTTNEss WHEREOF the City of Evanston, Cook County, Illinois, by its City Council,
has caused this Bond to be executed with 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.
ATTEST:
City Clerk, ity o vanston
Cook County, inois
[SEAL]
Bond Registrar and Paying Agent:
)VX�A�
i
z
r, City of Zanston
County, Illinois
American National Bank and Trust
Company of Chicago
Chicago, Illinois
-21-
[Form of Certificate of Authentication]
CERTIFICATE OF AUTHENTICATION
Date of Authentication:
This Bond is one of the Bonds described in the within -mentioned Ordinance and is one of
the Water Revenue Bonds, Series 1999, of the City of Evanston, Cook County, Illinois.
American National Bank and Trust.
Company of Chicago, as Bond
Registrar
[Form of Bond - Reverse Side]
CITY OF EVANSTON, COOK COUNTY, ILLINOIS
WATER REVENUE BOND, SERIES 1999
This bond and the bonds of the series of which it forms a part ("Bond" and "Bonds"
•
respectively) are of an authorized issue of Three Million Five Hundred Thousand Dollars 0
($3,500,000) of like Dated Date and tenor except as to maturity, privilege of redemption and rate
of interest. The Bonds are payable solely from the Revenues derived from the operation of the
waterworks system of the City (the "System") after payment of Operation and Maintenance
Costs, and not otherwise, and are issued under authority of the provisions of Division 129 of
Article 11 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"), for the purpose of improving the System and providing for a
certain refunding of water revenue bonds previously issued and payable from revenues of the
System, all as more fully described in Ordinance Number _-0-99, passed by the City Council
of the City on the day of January 1999 (the "Ordinance"), to which reference is hereby •
-22-
• expressly made for further definitions and terms and to all the provisions of which the holder and
registered owner by the acceptance of this Bond assents. THIS BOND DOES NOT CONSTITUTE AN
INDEBTEDNESS OF THE CITY WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY
PROVISION OR LIMITATION.
This Bond is subject to provisions relating to amendment; registration, transfer and
exchange; redemption and notice and procedure for redemption; and such other terms and
provisions relating to security and payment as are set forth in the Ordinance.
Under the Act and the Ordinance, the Revenues from the operation of the System shall be
deposited into the Water Fund, which shall be used only and is hereby pledged for paying
Operation and Maintenance Costs, paying the principal of and interest on all bonds of the City
that are payable by their terms only from the Revenues of the System, providing an adequate
depreciation fund, and in making all payments required to maintain the accounts established
• under the terms of the Ordinance. Parity Bonds may be issued pursuant to the terms of the
•
Ordinance. Outstanding Bonds issued and authenticated pursuant to the Ordinance are coequal
as to the lien on the Revenues of the System for their payment and share ratably, without any
preference, priority, or distinction, the one over the other, as to the source or method of payment
and security of the Outstanding Bonds.
The City and the Bond Registrar may deem and treat the Registered Owner hereof as the
absolute owner hereof for the purpose of receiving payment of or on account of principal hereof,
premium, if any, hereon and interest due hereon and for all other purposes, and neither the City
nor the Bond Registrar shall be affected by any notice to the contrary.
-23-
[Form of Assignment]
ASSIGNMENT 0
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. Bonds Limited Obligations. The Bonds shall be payable solely from the Net
Revenues as derived from the operation of the System, and shall not constitute an indebtedness
of the City within the meaning of any constitutional or statutory limitation.
Section 13. Fiscal Year and Deposit of Revenues. Upon the issuance of any of the
Bonds, the entire System, for the purpose of this Ordinance and while any of the Bonds remain
Outstanding Bonds, shall be operated on a Fiscal Year basis. All of the Revenues shall be set
aside as collected and be deposited into a bank account separate and apart from all other City
accounts and heretofore designated, accounted for and defined herein as the "Water Fund. " The
0
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Water Fund shall constitute a trust fund for the sole purpose of carrying out the covenants, terms
0 and conditions of this Ordinance.
Section 14. Accounts and Flow of Funds. The functions and obligations of the Water
Fund shall be continued and maintained by the maintenance in the Water Fund of separate
special accounts (the "Accounts") designated severally the "Operation and Maintenance
Account"; "Bond and Interest Account"; "Bond Reserve Account"; "Depreciation, Improvement
and Extension Account"; and "Surplus Revenue Account. " Until the Water Revenue Bonds,
Series 1992, of the City, shall be no longer Outstanding Bonds under the definitions applicable to
such Bonds, the provisions of Ordinance Number 39-0-92 (the "Series 1992 Bond Ordinance")
shall govern the application of Revenues to the Accounts. Thereafter (and not before such time),
there shall be set aside on a given day of each month as selected by the chief financial officer of
the City, without any further official action or direction, all moneys held in the Water Fund of
the City, in accordance with the following priorities: •
A. Operation and Maintenance Account. There shall first be credited to the
Operation and Maintenance Account an amount sufficient to pay the reasonable Operation and
Maintenance Costs of the System for the current monthly period. Money in the Operation and
Maintenance Account shall be used to pay Operation and Maintenance Costs. Money in this
account shall not be used to pay the costs of extraordinary or unusual repairs and maintenance,
capital expenditures, or to provide for any transfer in lieu of corporate taxes, or general
supervision or administrative charges by the City.
B. Bond and Interest Account. There next shall be credited to the Bond and Interest
Account and held, in cash and investments, a fractional amount of the interest becoming due on
the next succeeding interest payment date on Outstanding Bonds and also a fractional amount of
4k, the principal becoming due or subject to mandatory redemption on the next succeeding principal
-2�-
maturity or mandatory redemption date of Outstanding Bonds until there shall have been
accumulated and held, in cash and investments, in the Bond and Interest Account in or before the
month preceding such maturity date of interest or maturity or mandatory redemption date of
principal, an amount sufficient to pay such principal or interest, or both. In computing the
fractional amount to be set aside each month in the Bond and Interest Account, the fraction shall
be so computed that a sufficient amount will be set aside in said Account and will be available
for the prompt payment of such principal of and interest on all Outstanding Bonds and shall be
not less than 1/6th of the interest becoming due on the next succeeding interest payment date and
not less than 1/12th of the principal becoming due or subject to mandatory redemption on the
next succeeding principal payment or mandatory redemption date on all Outstanding Bonds until
there is sufficient money in said Account to pay such principal or interest, or both. In the event
different series of Outstanding Bonds have different Bond Years, the requirement of depositing
1/6th of interest and 1/12th of principal as stated above shall be applied separately with respect to
•
each such series. Credits to the Bond and Interest Account may be suspended in any Fiscal Year
at such time as there shall be a sufficient sum, held in cash and investments, in said Account to
meet principal and interest requirements in said Account for the balance of such Fiscal Year, but
such credits shall again be resumed at the beginning of the next Fiscal Year. All moneys in said
Account ( "Bond Moneys") shall be used only for the purpose of paying interest on and principal
of Outstanding Bonds as follows:
(1) 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 Bond and Interest Account, or
(2) On or before 65 days preceding any mandatory redemption date, Bond
Moneys up to the amount of the redemption requirement on such mandatory redemption
-26-
date plus interest due on related Term Bonds on such date may be applied (a) to the
purchase of Term Bonds of the maturity for which such mandatory redemption
requirement was established at prices (including commissions and charges, if any) not
exceeding par and accrued interest to such mandatory redemption date or (2) to the
redemption of such Bonds, without premium, pursuant to optional redemption provisions
applicable thereto. Upon the purchase or redemption of Term Bonds of any maturity
pursuant to this paragraph (2), an amount equal to the principal amount of such Bonds or
applicable portion thereof so purchased or redeemed shall be deducted from such
mandatory redemption requirement thereafter to become due on such Bonds and any
excess over the amount of such requirement shall be deducted from the future
requirement for such Bonds as the City shall determine.
C. Bond Reserve Account. At the time of the delivery of any Bonds, there shall be
on deposit to the credit of the Bond Reserve Account an amount equal to Maximum Annual Debt
Service. The Bond Reserve Account shall be maintained in said amount. In the event of a
withdrawal from the Bond Reserve Account resulting in the amount on deposit to the credit
thereof being less than the required amount, the City covenants to replenish the Bond Reserve
Account to the required amount at the rate of $12,150 per month. In the event Parity Bonds are
issued, the City will accumulate to the credit of the Bond Reserve Account the amount of
Maximum Annual Debt Service at the rate of the greater of (1) $12,150 per month or (2) such
amount per month such that in not less than 100 months after delivery and with credits each
month in the amount of not less than 1/100th of the difference between Maximum Annual Debt
Service on all Outstanding Bonds and the amount on deposit to the credit of this Account at the
time of such delivery. Amounts to the credit of the Bond Reserve Account shall be used to pay
Oprincipal of or interest on the Outstanding Bonds at any time when there are insufficient funds
-27-
available in the Bond and Interest Account to pay the same and shall be transferred to said
Account for said purpose. •
D. Depreciation, Improvement and Extension Account. There next shall be credited
to the Depreciation, Improvement and Extension Account the sum of $5,100 per month, or such
greater amount as may be designated from time to time by the City Council. The moneys in the
Depreciation, Improvement and Extension Account shall be used (1) to provide an adequate
allowance for depreciation as shall be determined from time to time by the City Council in its
sole discretion, (2) to pay the cost of extraordinary maintenance, necessary repairs and
replacements, or contingencies, or for improvements, repairs or replacements to the System
required by any agency of the State of Illinois or the United States Government, in order that the
System may at all times be able to render efficient service, (3) if not so needed, for
improvements or extensions of the System, and (4) at any time required, for the payment of
principal of or interest on any Outstanding Bonds when there are no other funds available for that •
purpose in order to prevent a default and shall be transferred to the Bond and Interest Account
for such purpose. At any time as moneys on deposit to the credit of the Depreciation,
Improvement and Extension Account exceed the sum of $400,000, amounts in excess thereof
may be transferred to any other account within the Water Fund of the City at the discretion of the
City Council.
All proceeds received from the disposition of any property of the System shall be credited
to Depreciation, Improvement and Extension Account.
E. Surplus Revenue Account. All revenues remaining in the Water Fund, after all
credits have been made to the respective accounts hereinabove provided for, shall be credited to
the Surplus Revenue Account, and the amount so credited shall be held and used for the
following purposes:
0
IN
1. For making up any deficiency necessary to credit accounts enumerated in
• paragraphs (A) to (D), inclusive, with the required amounts therefor for each month as
hereinabove provided.
2. For paying principal of and interest on any junior lien water revenue bonds
(subordinate issue).
3. For transfer to any other account of the fund, or at the discretion of the City
Council, for any lawful corporate purpose,. including, but not limited to, any
extraordinary costs of operation and maintenance of the System not otherwise provided
for, or any authorized payments in lieu of taxes, general supervision and administrative
charges by the City.
4. For any lawful corporate purpose, in the discretion of the City Council.
Section 15. General Covenants. Until the Water Revenue Bonds, Series 1992, of the
City, shall be no longer Outstanding Bonds, the covenants and provisions of the Series 1992 •
Bond Ordinance shall apply for all Outstanding Bonds. Thereafter, the City covenants and
•
agrees with the holders and registered owners of the Outstanding Bonds as follows:
A. Investments. Money to the credit of the Water Fund prior to the monthly
accounting and to the credit of the Operation and Maintenance Account may be invested
pursuant to any authorization granted to municipal corporations by Illinois statute or court
decision. Moneys to the credit of the Bond and Interest Account, the Bond Reserve Account, the
Depreciation, Improvement and Extension Account, and the Surplus Revenue Account may be
invested from time to time in (a) direct full faith and credit obligations of the United States of
America, whether bonds, notes, bills or otherwise called (collectively referred to herein as
"Directs"); (b) certificates of participation in a trust or trust receipts from a trust comprised
solely of Directs; (c) shares in a money market or mutual fund comprised more than 95% at all
-29-
times of Directs or agreements to repurchase such obligations; (d) obligations unconditionally
guaranteed as to both principal and interest by the United States Government, (e) obligations
which are tax-exempt under Section 103(a) of -the Code but are not private activity bonds under
Section 141(a) of the Code, if rated at the time of purchase "AA" or better by a nationally
recognized ratings service for municipal bonds; (f) the Public Treasurers' Investment Pool of the
State of Illinois; (g) certificates of deposit or time deposits of any bank, as defined by the Illinois
Banking Act, provided such bank is insured by the Federal Deposit Insurance Corporation or a
successor corporation to the Federal Deposit Insurance Corporation, and provided further that
the principal of such deposits in excess of the insured amount is secured by a pledge of
obligations as described in clauses (a), (b) or (c) above in the full principal amount of such
excess. Such investments must also be legal and proper investments for the City. Such
investments may be sold from time to time as funds may be needed for the purpose for which the
Accounts have been created. To the extent moneys in the Accounts are held uninvested and on •
deposit in demand accounts, such amounts shall be added to the amount invested pursuant to
clause (g) above, and the sum so derived subject to the limitations as set forth therein.
Investments in the Accounts shall mature or be subject to redemption at the option of the
holder thereof prior to the time when needed. After making provision for the payment of any
amount of excess arbitrage profits, as provided in the Code, attributable to investment earnings
or profits to the Rebate Fund for the appropriate issue or issues of Outstanding Bonds, all
earnings or profit, on any funds so invested in the Bond and Interest Account shall be retained
therein. After making provision for the payment of any amount of excess arbitrage profits, as
provided in the Code, attributable to investment earnings or profits to the Rebate Fund for the
appropriate issue or issues of Outstanding Bonds, all earnings or profit, on any funds so invested
in the Bond Reserve Account shall be credited upon receipt to the Bond and Interest Account.
-30-
The City may take credit for such earnings or profits (not transferred to the Rebate Fund) in any
0 monthly accounting for the Bond and Interest Account in any Fiscal Year. All interest or profit
•
earned on any funds so invested in other Accounts shall be credited to the Water Fund. Moneys
in any of said accounts shall be invested by the City, if necessary, in investments restricted as to
yield, which investments may be in United States Treasury Obligations —State and Local
Government Series, if available, and to such end the Comptroller shall refer to any investment
restrictions covenanted by the City or any officer thereof as part of the transcript of proceedings
for the issuance of the Bonds, and to appropriate opinions of counsel.
B. Accounts Excesses. Any amounts to the credit of the Accounts in excess
of the then current requirements therefor may be transferred by the City Council to such other
Account or Accounts of the Water Fund as they may in their sole discretion designate.
C. Maintain System. The City will maintain the System in good repair and
working order, will operate the same efficiently and faithfully, and will punctually perform all
duties with respect thereto required by the Constitution and laws of the State of Illinois and the
United States.
D. Rates. The City will establish and maintain at all times reasonable fees,
charges and rates for all users of the service of the System, and provide for the collection thereof
and for the segregation and application of the Revenues in the manner provided by this
Ordinance, and sufficient at all times to pay the reasonable Operation and Maintenance Costs, to
pay the principal of and interest on all revenue bonds of the City which by their terms are
payable from the Revenues, and to provide for the creation and maintenance of the respective
accounts as provided in Section 14 of this Ordinance, and from time to time make all needful and
proper repairs, replacements, additions and betterments thereto, so that the System may at all
times be operated properly and advantageously, and when any equipment or facility shall have
-31-
been worn out, destroyed or otherwise is insufficient for proper use, it shall be promptly replaced
or repaired so that the value and efficiency of the System shall be at all times fully maintained.
The City covenants that the City will establish and maintain fees, charges and rates that will be
adequate to produce Net Revenues in an amount not less than 125% of the principal and interest
requirements for all Outstanding Bonds for the then current Fiscal Year. In the event that the
Bond Year for any series of Outstanding Bonds does not end on the first day of the Fiscal Year,
then, for purposes of calculation hereunder, the requirement for any Fiscal Year shall be deemed
to be the greater of the requirement of the two Bond Years occurring in part in such Fiscal Year.
Charges for service rendered the City shall be made against said City, and payment for
the same from the corporate funds shall be made monthly into the Water Fund, as Revenues, in
the same manner as other Revenues are required to be deposited. No free service of the System
shall be furnished to any person, firm, organization or corporation, public or private, and to the
extent permitted by law it is expressly herein covenanted and agreed that the City will not grant a
franchise for the operation of any other or competing waterworks system within the City, and
that the Bonds herein authorized to be executed shall constitute legally enforceable liens on the
Revenues.
E. Rules. The City will establish such rules and regulations for the control
and operation of the System necessary for the efficient and economical operation thereof, and
rates and charges shall be fixed and revised from time to time as may be necessary to produce
funds sufficient for all purposes herein provided.
F. Accounting. The City will make and keep proper books and accounts
(separate and apart from all other records and accounts of said City), in which complete entries
shall be made of all transactions relating to the System, and hereby covenants that within 210
days following the close of each Fiscal Year it will cause the books and accounts of the System
•
-32-
to be audited annually by independent certified public accountants showing the receipts and
• disbursements on account of the System. Each such audit, in addition to whatever matters may
0
be thought proper by the accountants to be included therein, shall, without limiting the generality
of the foregoing, include the following:
1. A statement in detail of the income and expenditures of the system for such
Fiscal Year, and including credits to the various accounts provided herein.
2. A balance sheet as of the end of such Fiscal Year.
3. The accountant's comment regarding the manner in which the City has
carried out the accounting requirements of this ordinance, and the accountant's
recommendations for any changes or improvements in the operation of the System.
4. A list of all insurance policies in force at the end of the Fiscal Year, setting
out as to each policy the amount of the policy, the risks covered, the name of the insurer,
and the expiration date of the policy.
5. The number of metered water customers and the number of unmetered water
customers at the end of the year, and the quantity of water pumped and billed.
All expenses incurred in the making of the audit required by this section shall be regarded and
paid as an Operation and Maintenance Cost. In addition, statements of revenues and
expenditures of the System shall be furnished to the City Council at least quarterly during each
Fiscal Year.
G. No Sale, etc. The City will not sell, lease, loan, mortgage, or in any
manner dispose of or encumber the System (subject to the reserved right of the City to issue
additional obligations as provided in Section 16 of this Ordinance); provided, however, that this
covenant shall not prevent said City from disposing of any property which in the judgment of the
City Council is no longer useful or profitable in the operation of the System. The proceeds from
-33-
the sale of. any property shall be credited to the Depreciation, Improvement and Extension
Account.
H. Contract; Enforcement. The provisions of this Ordinance shall constitute
a contract between the City and the holders and registered owners of the Bonds, and after the
issuance of the Bonds, no changes, additions or alterations of any kind shall be made hereto,
except as hereinabove provided for amendments hereto. Any holder or registered owner of a
Bond or Bonds issued hereunder may proceed by civil action, mandamus, or other proceeding to
enforce or compel performance by the officials of said City of all duties required by law, the Act
and this Ordinance, including the making and collecting of sufficient charges and rates for the
water services supplied by the System and the application of the income and revenue therefrom.
L Insurance. The City will carry insurance on the System of the kinds and
in the amounts which are usually carried by private parties operating similar properties, covering
•
such risks as shall be recommended by a competent insurance consultant employed by the City •
for the purpose of making such recommendations. Alternatively the City shall self -insure or
provide insurance by means of a self-insurance pool with other units of local government,
provided that either private insurance is not available at a reasonable cost or the City or the pool
shall have assets or shall have created a self-insurance reserve fund in an amount as shall be
determined by a competent insurance consultant to be not unreasonable in view of the risks
insured. All moneys received for property loss under such insurance policies or from the self-
insurance reserve fund or pool shall be deposited to the credit of the Depreciation, Improvement
and Extension Account and used in making good the loss or damage in respect of which they
were paid, either by repairing the property damaged or making replacement of the property
destroyed, and provision for making good such loss or damage shall be made within 270 days
from the date of the loss. The proceeds derived from any and all policies for workers'
•
compensation or public liability or from the self-insurance reserve fund or pool for such purposes
• shall be paid into the Operation and Maintenance Account and used in paying the claims on
account of which they were received or shall be used to reimburse any account from which the
claim was previously paid. The payment of premiums, regular payments to a pool and regular
accumulations for a reserve fund required under the provisions of this covenant shall be
considered an Operation and Maintenance Cost.
Section 16. Parity Bonds. It is hereby covenanted and agreed that, while any of the
Bonds issued hereunder are Outstanding Bonds, the City will not issue any other bonds or
obligations of any kind or nature having a pledge on the Revenues which is prior to the lien on
the Revenues of the Bonds. Until the Water Revenue Bonds, Series 1992, of the City, shall be
no longer Outstanding Bonds as provided in the Series 1992 Bond Ordinance, the covenants and
provisions of the Series 1992 Bond Ordinance shall apply to the issuance of Parity Bonds and
other obligations payable from the Revenues. Thereafter, no obligations or bonds of any kind
shall be issued which are payable from the Revenues except upon compliance with one of the
options (A) through (D) set out below.
A. Parity Bonds may be issued for the purpose of paying the cost of repairs,
replacements, renewals, improvements and extensions to the System or for refunding
Outstanding Bonds upon compliance with the following conditions:
1. The amounts required to be credited monthly to the respective accounts
described in subsections (A) through (D), inclusive, of Section 14of this Ordinance must
have been credited in full up to the date of the authorization of such Parity Bonds by the
City Council.
2. The Net Revenues of the System as shown by the most recently available
0 audit of an independent certified public accountant, which audit shall be for either the
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most recent Fiscal Year or the preceding Fiscal Year if (a) the most recent Fiscal Year
has ended within 210 days of the date of issuance of the proposed Parity Bonds and
(b) the audit for the most recent Fiscal Year is not yet available, or the Adjusted Net
Revenues of the System for such year (as defined herein) must equal not less than 130%
of Maximum Annual Debt Service for all Outstanding Bonds as computed immediately
after the issuance of the proposed Parity Bonds; but only for those Fiscal Years in which
the Outstanding Bonds immediately prior to any such issuance will continue to be
Outstanding Bonds as provided herein.
3. In the event there shall have been a change in the rates of the System from
the rates in effect for the immediately preceding Fiscal Year, which change is in effect at
the time of the issuance of any such Parity Bonds, then the Net Revenues as provided in
this subparagraph (2) shall be adjusted to reflect the Net Revenues of the System for the
immediately preceding Fiscal Year as they would have been had said then existing rates •
been in effect during all of said year (the "Adjusted Net Revenues"). Any such Adjusted
Net Revenues shall be evidenced by the certificate of a certified public accountant or an
independent consulting engineer employed for that purpose, which certificate shall be
approved by the City Council prior to the issuance of the Panty Bonds and filed with the
City Clerk upon its approval.
B. Parity Bonds may be issued to refund Outstanding Bonds if, upon the issuance of
such Parity Bonds, the amount of the principal and interest requirement for Outstanding Bonds
for each Fiscal Year for which Outstanding Bonds immediately prior to such issuance will
continue to be Outstanding Bonds as provided herein after the issuance of such Parity Bonds will
not be greater than such requirement for each such Fiscal Year calculated immediately prior to
the issuance of such Parity Bonds.
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C. Parity Bonds may be issued to refund Outstanding Bonds in order to avoid or
• remedy default in the payment of principal of or interest on such Outstanding Bonds; provided
they are issued to avoid such default not earlier than three months prior to the due date of such
principal or interest.
D. Bonds or other obligations may be issued payable from the Revenues subordinate to
the Outstanding Bonds. Such subordinate bonds shall be payable from or out of the Surplus
Revenue Account or may be made payable from such other fund or account as may be provided
therefor, upon the transfer of moneys from the Surplus Revenue Account to such other fund or
account.
E. Parity Bonds may be issued payable on such payment dates as the City shall
determine. In the event that the Bond Year for any series of Outstanding Bonds does not end on
the first day of the Fiscal Year, then, for purposes of calculation hereunder, the requirement for
any Fiscal Year shall be deemed to be the greater of the requirement of the two Bond Years .
occurring in part in such Fiscal Year.
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Section 17. 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 Ordinance. Reference
is hereby made to the limitations set forth in Sections 5 and 8 of this Ordinance. The Bonds shall
be sold and delivered to the best bidder at public sale (the "Purchaser") 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 Financial Advisor that the net interest cost rate on the Bonds, calculated in accordance
with customary market practice, does not exceed 7.00% and that the terms of the Bonds are fair
and reasonable in view of current conditions in the bond markets.
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Nothing in this Section shall require the Designated Officials to sell the Bonds if in their
judgment, aided by the Financial Advisor, the conditions in the bond markets shall have •
markedly deteriorated from the time of adoption thereof, 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. Prior to the execution and delivery of any such Bond Purchase Contract, the
Designated Officials shall find and determine that no person holding any office of the City either
by election or appointment, is in any manner interested either directly or indirectly, in his own
name or in the name of any other person, association, trust or corporation in said Contract with •
the Purchaser for the purchase of the Bonds. The distribution of the Preliminary Official
Statement relating to the Bonds presented before this meeting is hereby in all respects authorized
and approved, and the proposed use by the Purchaser of an Official Statement (in substantially
the form of the Preliminary Official Statement but with appropriate variations to reflect the final
terms of the Bonds) is hereby approved. A bond purchase contract for the sale of the Bonds to
the Purchaser (the "Bond Purchase Contract"), as comprised of the Official Notice of Sale and
Official Bid Form, is hereby in all respects authorized and approved. Upon the sale of the
Bonds, the Designated Officials shall prepare the Bond Order, 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.
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Section 18. Application of Proceeds. The proceeds derived from the sale of the Bonds
. shall be used as follows:
A. Accrued interest shall be credited to the Bond and Interest Account.
B. 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 to be 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
after six months from the date of issuance of the Bonds.
C. The remaining proceeds of the Bonds shall be deposited into the "Waterworks
Construction Fund Account (1999) of the City of Evanston ", hereby created (the "Project
Fund"). The money in the Project Fund shall be held for the benefit of the City for the purposes
herein provided, and for the benefit of the registered owners of the Bonds hereby authorized as
their interests may appear, and said funds shall be withdrawn from time to time by the
Comptroller of the City only upon submission to him of the following:
(1) An order signed by the Mayor and City Clerk, or such other officers that
may from time to time be by law authorized to sign and countersign orders on the
Comptroller of the City, stating specifically the purpose for which the order is issued and
indicating that the payment for which the order is issued has been approved by the City
Council; and
(2) For each order for withdrawal of funds by the Comptroller for payment to a
contractor or contractors for work done in connection with the construction of the Project,
such order shall be accompanied by a certificate executed by the engineer in charge of the
construction, stating the nature of the work completed and the amount due and payable
thereon.
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The costs of engineering, legal and financing services, the costs of surveys, designs, soundings,
borings, rights -of -way, and all other necessary and incidental expenses, shall be deemed items of •
cost of construction of the Project. The moneys deposited into the Project Fund may be
temporarily invested from time to time in lawful investments for City funds. All payments
received as principal or interest derived from such investments shall be credited to the Project
Fund. Said fund may be closed by action of the Comptroller upon its being fully depleted.
Section 19. 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 A 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
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.
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Section 20. Tax-exempt Bonds. The following certifications, representations and
covenants are made relating to the Tax-exempt status of the Bonds.
is
20.01. Covenant. The City covenants not to take any action or to neglect or refuse to
take any action which would cause the Bonds not to be Tax-exempt.
20.02. Additional Definitions. Certain additional definitions for this Section are as
follows:
"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" for purposes of this section refers to that portion of the Bond and
Interest Account allocable to the Bonds.
"Closing" means the first date on which the City is receiving the purchase price
for the Bonds.
"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. 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.
"Controlled Group" means a group of entities directly or indirectly subject to
Control by the same entity or group of entities, including the entity that has Control of the
other entities.
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"Costs of Issuance" means the costs of issuing the Bonds, including underwriter's
discount and legal fees, but not including the fees for any Credit Facility described at
20.27 of this Section.
"Credit Facility" means the municipal bond insurance policy, if any, procured for
the Bonds and issued by a Credit Facility Provider.
"Credit Facility Provider" means an insurance company issuing a Credit Facility
for the Bonds.
"De minimis Amount of Original Issue Discount or Premium" means (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).
"Gross Proceeds" means allocable amounts in the Bond Fund, the Expense Fund,
the Escrow Account, and the Reserve Fund. •
"Other System Accounts" means certain other accounts of the Water Fund in
which money may be available to pay the Bonds, and consist of the Depreciation,
Improvement and Extension Account and the Surplus Revenue Account.
"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.
"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 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 taxable discount rate used to compute the commission or, if not
readily ascertainable, a reasonable taxable discount rate)), but not legal and accounting
fees, recordkeeping, custody and similar costs; (b) all administrative costs, direct or
indirect, incurred by a publicly offered regulated investment company or an External
Commingled Fund; or (c) in the case of purpose investments, costs or expenses paid0
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directly to purchase, carry, sell or retire the investment and costs of issuing, carrying, or
repaying the Bonds, and any placement agent fee or underwriter's discount.
• "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 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; (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 that 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.
"Rebate Fund" means the fund, if any, established when necessary as described
at 20.19 of this Section.
"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 amounts, if any, used from Sale Proceeds and
investment earnings thereon to reimburse the City for an expenditure paid prior to
Closing.
"Reserve Fund" means the amount allocable to the Bonds on deposit to the credit
of the Bond Reserve Account under this Ordinance.
"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).
"Sale Proceeds Funds" means funds into which Sale Proceeds are deposited,
being the Bond Fund (amount of accrued interest only), the Expense Fund, and the
Project Fund.
"Tax Certificate" means any certificate or certificates (or relevant portions) to be
executed by an officer of the City charged (among others) with the responsibility of
issuing the Bonds (including the Mayor, the City Manager and the Director of Finance)
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setting forth certifications, representations or covenants relating to the Tax-exempt status
of the Bonds, treated collectively. •
"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 noted in
19.19), 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.
20.03. Purpose of the Bonds. The Bonds are being issued to finance the Project in a
prudent manner consistent with the revenue needs of the City. A breakdown of the sources and
uses of funds will be provided in the Tax Certificate at Closing.
20.04. The Project — Binding Commitment and Timing. The City has incurred or will,
within six months of the Closing, incur 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 Sale Proceeds of the portion of the
Bonds allocable to the Project (the "Project Portion") 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 three years .
after the Dated Date of the Bonds, at which time it is anticipated that all 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 with due diligence and in accordance with the estimated drawdown schedule
to be contained in the Tax Certificate.
20.05. Reimbursement. None of the Sale Proceeds or investment earnings thereon will
be used for Reimbursed Expenditures.
20.06. Working Capital. All amounts in the Sale Proceeds Funds will be used, directly
or indirectly, to pay Capital Expenditures of the Project, other than amounts spent for 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
Project;
(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; •
M
(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; and
(e) principal of or interest on the Bonds paid from unexpected excess Sale
Proceeds and investment earnings thereon.
20.07. Consequences of Contrary Expenditure. The City acknowledges that if amounts
in the Sale Proceeds Funds and investment earnings thereon are spent for purposes other than as
described at 20.06 hereof, a like amount of then available funds of the City will be treated as
unspent Sale Proceeds.
20.08. 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.
20.09. No Grants. None of the Sale Proceeds or investment earnings thereon will be
used to make grants to any person.
20.10. 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. The City
acknowledges that any such hedge could affect the calculation of Bond Yield under the
Regulations, and that 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.
20.11. Abusive Transactions. Neither the City nor any member of the same Controlled
Group as the City has employed a device or entered into any arrangements or understandings in
connection with the issuance of the Bonds, or in connection with any transaction or series of
transactions related to the issuance of the Bonds, to obtain a material financial advantage based
on arbitrage. Neither the City nor any member of the same Controlled Group as the City will
realize any material financial advantage based on arbitrage in connection with the issuance of the
Bonds, or in connection with any transaction or series of transactions related to the issuance of
the Bonds.
20.12. Use of Proceeds. (a) The funds and accounts established or maintained under this
Ordinance are the Water Fund, the Operations and Maintenance Account, the Bond Fund, the
Reserve Fund, the Other System Accounts, the Expense Fund, and the Project Fund. Only the
Sale Proceeds Funds will receive Sale Proceeds.
(b) Principal of and interest on the Bonds will be paid from the Bond Fund.
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(c) Costs of Issuance incurred in connection with the issuance of the Bonds will be paid
from the Expense Fund. Within 6 months of Closing, the Expense Fund will be closed and any
money in such fund transferred to the Project Fund. 0
(d) 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.
20.13. Purpose of Bond Fund, The Bond Fund 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.
20.14. The Reserve Fund. The City represents that the Reserve Fund is required in
connection with the issuance of the Bonds, based on the certificate of the Financial Advisor.
20.15. Other Funds and Accounts. The Other System Accounts will not contain any Sale
Proceeds. No amounts in any such account are expected to be used to pay debt service on the
Bonds. Because amounts in such funds are available for uses other than the payment of debt
service on the Bonds, there are no assurances that such amounts would be available to pay
principal or interest on the Bonds or the obligations under a Credit Facility or any other credit
enhancement or liquidity device with respect to the Bonds, even if the City encounters financial •
difficulties.
20.16. No Representations. Reserved.
20.17. No Other Gross Proceeds. (a) Except (i) for the funds identified in the definition
of Gross Proceeds, and (ii) for a Credit Facility, if any; 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 or securities that constitutes:
(1) Sale Proceeds;
(2) amounts in any fund and account with respect to the Bonds (other than
the Rebate Fund);
(3) 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);
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(4) 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 any credit
enhancement or liquidity device with respect to the Bonds (including the Credit
Facility as defined), even if the City encounters financial difficulties;
(5) 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 holders of the
Bonds or any credit enhancement provider (including the Credit Facility as
defined), including any liquidity device or negative pledge (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 holders of the Bonds
or a guarantor of the bonds); or
(6) amounts actually or constructively received from the investment and
reinvestment of the amounts described in (1) or (2) above.
(b) No compensating balance, liquidity account, negative pledge of property held for
investment purposes or similar arrangement exists with respect to, in any way, the Bonds or any
credit enhancement or liquidity device related to the Bonds (including the Credit Facility as
defined).
(c) The term of the Bonds is not longer than is reasonably necessary for the
governmental purposes of the Bonds. The average reasonably expected remaining economic life
of the Project is at least 15 years. The weighted average maturity of the Bonds does not exceed
15 years and does not exceed 120 percent of the average reasonably expected economic life of
such facilities.
20.18. 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.
20.19. Rebate Fund. The appropriate officers of the City are hereby authorized to create
and establish a special fund to be known as the "Water Revenue Bonds, Series 1999, Rebate
Fund" (the "Rebate Fund"), which, if created, shall be continuously held, invested, expended
and accounted for in accordance with this Ordinance and the Tax Certificate. Moneys in the
Rebate Fund shall not be considered moneys held for the benefit of the holders 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.
is20.20. Records. The City agrees to keep and retain or cause to be kept and retained until
six years after the Bonds are paid in full adequate records with respect to the investment of all
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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; (i) date of liquidation; and 0) 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.
20.21. Fair Market Value; Certificates of Deposit and Investment Agreements. In
making investments of Gross Proceeds, the City shall take into account prudent investment
standards including the date on which moneys to be invested may be needed. The City shall
provide that all amounts which constitute Gross Proceeds and any amounts in the Rebate Fund
shall be invested at all times to the greatest extent practicable in investments permitted under this
Ordinance, 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; provided,
however, that in the event moneys cannot be invested, other than as provided in this sentence,
due to the denomination, price or availability of investments, such amounts shall be invested in
an interest bearing deposit account of a bank with a Yield not less than that paid to the general
public or held uninvested (but uninvested amounts shall be held to the minimum amount
necessary). For purposes of determining the purchase price of investments (for either yield
restriction or rebate purposes), 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) a bona fide solicitation is made for a specified GIC and
at least three bona fide bids from different providers that have no
material financial interest in the Bonds (e.g., as underwriters or
brokers) are received;
(ii) the highest -yielding GIC for which a qualifying bid is
made (determined net of broker's fees) is in fact purchased;
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(iii) the Yield on the GIC (determined net of broker's fees) is
not less than the Yield then available from the provider on
• reasonably comparable GICs, if any, offered to other persons from a
source of funds other than Gross Proceeds of tax-exempt obligations;
(iv) the determination of the terms of the GIC takes into
account as a significant factor the reasonably expected drawdown
schedule for the amounts to be invested, except for amounts
deposited in the Bond Fund;
(v) the terms of the GIC, including collateral security
requirements, are reasonable;
(vi) 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;
(vii) any agent used to conduct the bidding for the GIC does
not bid to provide the GIC;
(viii) 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; and
• (ix) all bidders for the GICs are reasonably competitive
providers of investments of the type purchased.
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
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Commingled Fund other than an External Commingled Fund only if the investments made by
such Commingled Fund satisfy the provisions of this paragraph 20.21.
20.22. Arbitrage Elections. Upon consultation with Bond Counsel, City officers may •
make arbitrage elections in a Tax Certificate or other certificate given in the future.
20.23 Issue Price. For purposes of determining the Yield on the Bonds, the purchase
price of the Bonds is equal to the first offering price at which the Purchaser have sold at least ten
percent of each maturity of the Bonds or is equal to par, plus accrued interest, if the Purchaser
does not intend to resell the Bonds.
20.24. Yield Limits. (a) Except as provided in (b), (c) or (d) as follows, 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.
(b) The following may be invested without Yield restriction:
(1) amounts invested in Qualified Tax Exempt Obligations;
(2) amounts in the Rebate Fund;
(3) amounts on deposit in the Bond Fund 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 20.13 of this Section;
(4) amounts on deposit in the Project Fund prior to the earlier of three years •
after Closing or the completion (or abandonment) of the Project;
(5) amounts in the Expense Fund prior to the earlier of three years after Closing
or the payment of all expenses to be paid from that fund;
(6) all amounts for the first 30 days after they become Gross Proceeds; and
(7) all amounts derived from the investment of Sale Proceeds and investment
earnings thereon for a period of one year from the date received.
(c) An amount not to exceed the lesser of $100,000 or five percent of the Sale Proceeds
may be invested without regard to Yield restriction.
(d) The amount on deposit in the Reserve Fund that is allocable to the Bonds under the
Regulations may be invested without regard to Yield restriction to the extent it does not exceed
the least of the amounts computed pursuant to (1), (2), (3) or (4) below:
(1) 100% of the maximum annual debt service on the Bonds;
(2) 125% of the average annual debt service on the Bonds; •
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(3) ten percent of the stated principal amount of the Bonds (because the Bonds
have a De minimis Amount of Original Issue Discount or Premium);
• .(4) the amount required to be held in the Reserve Fund, which is the amount
required to provide protection to the owner of Bonds if the City should encounter
financial difficulties.
20.25. Continuing Nature of Yield Limits. Except as provided at 20.35, once moneys are
subject to the Yield limits of 20.24 hereof, such moneys remain Yield restricted until they cease
to be Gross Proceeds.
20.26. Federal Guarantees. Except for investments in the Escrow Account or meeting
the requirements of 20.24(b) or (d) 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, obligations guaranteed 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, any guarantee by the Bonneville Power Authority 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, 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) federally insured deposits or
accounts (as defined in Section 149(b)(4)(B) of the Code). No portion of the payment of
principal or interest on the Bonds or any credit enhancement or liquidity device relating to the
foregoing (including the Credit Facility as defined) is or will be guaranteed, directly or indirectly
• (in whole or in part), by 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).
20.27. Treatment of Certain Credit Facility Fees. If appropriate representations are
made in the Certificate of the Credit Facility Provider, as to which the City has no reason to
believe are untrue, 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 is a Related Person as defined in Section 144(a)(3) of the
Code to the Credit Facility Provider. The fee paid to the Credit Facility Provider shall not
exceed ten percent of the Sale Proceeds. Other than the fee paid to the Credit Facility Provider,
neither the Credit Facility Provider 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.
20.28. 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 activity carried on by any person other than a state or local governmental unit.
(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
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used in any activity carried on by any person other than a state or local governmental unit 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 activity carried on by any person other
than a state or local governmental unit.
(c) No more than the lesser of $5,000,000 or five percent of the Sale Proceeds of the
Bonds, and investment earnings thereon, will be used, directly or indirectly, to make or finance
loans to any persons.
(d) No users of any portion of the facilities constituting the System or the Project, each
considered separately, other than a state or local governmental unit, will use more than five
percent of such facilities, each considered separately, on any basis other than the same basis as
the general public; and no person other than a state or local governmental unit will be a user of
more than five percent of such System or Project, each considered separately, 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.
(e) The City has not and will not enter into any arrangement that conveys to any person,
other than a state or local government unit, special legal entitlements to any portion of the
System or the facilities constituting the Project that is available for use by the general public. No
person, other than a state or local governmental unit, is receiving or will receive any special
economic benefit from use of the System or any portion of the facilities constituting the Project
that is not available for use by the general public. •
20.29. I.R.S. Form 8038-G. The information contained in the Information Return for
Tax -Exempt Governmental Obligations, Form 8038-G, shall be true and complete. The City will
file Form 8038-G (and all other required information reporting forms) in a timely manner.
20.30. Termination; Interest of City in Rebate Fund. The terms and provisions set forth
in this Section shall terminate at the later of (a) 75 days after the Bonds have been fully paid and
retired or (b) the date on which all amounts remaining on deposit in the Rebate Fund, if any,
shall have been paid to or upon the order of the United States and any other payments required to
satisfy the Rebate Provisions of the Code have been made to the United States. Notwithstanding
the foregoing, the provisions of 20.18 hereof shall not terminate until the sixth anniversary of the
date the Bonds are fully paid and retired.
20.31. No Common Plan of Financing. Since a date which is not less than 15 days prior
to the date of adoption of 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. No obligations
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other than the Bonds are being sold on the same date as the Bonds, will be issued at Closing or
were or are being offered pursuant to a single offering document.
• 20.32. No Sale of the System or the Project. (a) Other than as provided in the next
sentence, none of the facilities constituting the System or the Project 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.
20.33. Future Events. The City acknowledges that any changes in facts or expectations
from those set forth herein or in the Tax Certificate 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.
20.34. No Representations. Reserved.
20.35. Permitted Changes; Opinion of Bond Counsel. The Yield restrictions contained
at 20.24 or any other restriction or covenant contained herein need not be observed or may be
changed if the City receives an opinion of Bond Counsel to the effect that 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.
20.36. Expectations. The City Council has reviewed the facts, estimates and
circumstances set forth herein. Such facts and estimates are true and are not incomplete in any
material respect. On the basis of such facts and estimates, the City adopts the expectations
contained herein. On the basis of such facts, estimates, circumstances and expectations, it is not
expected that the Sale Proceeds 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
0
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Regulations. Such expectations are reasonable and there are no other facts, estimates and
circumstances that would materially change such expectations.
The City Council hereby authorizes the Tax Certificate to contain such further covenants •
and certifications as may be necessary to assure that the Bonds be Tax-exempt. In connection
therewith, the City and the City Council further agree: (a) through their officers, to make such
further specific covenants, representations as shall be truthful, and assurances as may be
necessary or advisable; (b) to consult with Bond Counsel and to comply with such advice as may
be given; (c) to pay to the United States, as necessary, such sums of money representing required
rebates of excess arbitrage profits relating to the Bonds; (d) to file such forms, statements, and
supporting documents as may be required and in a timely manner; and (e) if deemed necessary or
advisable by their officers, to employ and pay fiscal agents, financial advisors, attorneys, and
other persons to assist the City in such compliance.
Section 21. Pertaining to the Bond Registrar. If requested by the Bond Registrar, any
officer of the City is authorized to execute standard forms of agreements between the City and
the Bond Registrar with respect to the obligations and duties of the Bond Registrar under this
Ordinance. In addition to the terms of such agreements and subject to modification thereby, the
Bond Registrar by acceptance of duties under this Ordinance agrees (a) to act as bond registrar,.
paying agent, authenticating agent, and transfer agent as provided herein; (b) to maintain a list of
•
Bondholders as set forth herein and to furnish such list to the City upon request, but otherwise to
keep such list confidential to the extent permitted by law; (c) to cancel and/or destroy Bonds
which have been paid at maturity or upon redemption or submitted for exchange or transfer;
(d) to furnish the City at least annually a certificate with respect to Bonds 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 maintain the Bond Register and perform the other duties and
-54
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.
Section 22. Provisions a Contract. The provisions of this Ordinance shall constitute a
contract between the City and the holders and registered owners of the Outstanding Bonds; and
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no changes, additions, or alterations of any kind shall be made hereto, except as herein provided,
so long as there are any Outstanding Bonds. •
Section 23. Defeasance. Bonds which are no longer Outstanding Bonds as defined in
this Ordinance shall cease to have any lien on or right to receive or be paid from Revenues and
shall no longer have the benefits of any covenant for the holders or registered owners of
Outstanding Bonds as set forth herein relating to payment or security of payment.
Section 24. Severability. If any section, paragraph, clause or provision of this
Ordinance shall be held invalid, the invalidity of such section, paragraph, clause or provision
shall not affect any of the other provisions of this Ordinance.
Section 25. Superseder. All ordinances, resolutions or orders, or parts thereof, in
conflict with the provisions of this Ordinance are to the extent of such conflict hereby super-
seded.
Iwo -is
0
Section 26. Publication. This Ordinance within ten (10) days after its passage by the
• City Council shall be published once in pamphlet form by authority of the City Council, and
shall thereupon be in full force and effect immediately.
VOTE
•
PASSED: January ZS 1999.
AYES: Aldermen Drummer, Wynne, Bernstein, Kent, Moran,
Engelman, Rainey, Feldman and Newman
NAYS: None
ABSENT: None
ATTEST:
0
lerk
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Feb r,luv J
Jac I , 1999
Mfiyor
EXHIBIT A
CONTINUING DISCLOSURE UNDERTAKING •
FOR THE PURPOSE OF PROVIDING
CONTINUING DISCLOSURE INFORMATION
UNDER SECTION (b)(5) OF RULE 15c2-12
This Continuing Disclosure Undertaking (this "Undertaking") is executed and delivered
by the City of Evanston, Cook County, Illinois (the "City"), in connection with the issuance of
Water Revenue Bonds, Series 1999 (the "Bonds"). The Bonds are being issued pursuant to an
ordinance adopted by the City Council of the City on the 25th day of January 1999 and a Bond
Order executed by designated officers of the City on the 25th day of January 1999.
In consideration of the issuance of the Bonds by the City and the purchase of such Bonds
by the beneficial owners thereof, the City covenants and agrees as follows:
1. PURPOSE OF THIS UNDERTAKING. This Undertaking is executed and delivered by
the City as of the date set forth below, for the benefit of the beneficial owners of the Bonds and
in order to assist the Participating Underwriters in complying with the requirements of the Rule
(as defined below). The City represents that it will be the only obligated person with respect to
the Bonds at the time the Bonds are delivered to the Participating Underwriters and that no other
person is expected to become so committed at any time after issuance of the Bonds.
2. DEFINITIONS. The terms set forth below shall have the following meanings in this
Undertaking, unless the context clearly otherwise requires.
Annual Financial Information means the financial information and operating data
described in Exhibit I.
Annual Financial Information Disclosure means the dissemination of disclosure
concerning Annual Financial Information and the dissemination of the Audited Financial
Statements as set forth in Section 4.
Audited Financial Statements means the audited financial statements of the City prepared
pursuant to the standards and as described in Exhibit I.
Commission means the Securities and Exchange Commission.
Dissemination Agent means any agent designated as such in writing by the City and
which has filed with the City a written acceptance of such designation, and such agent's
successors and assigns.
Exchange Act means the Securities Exchange Act of 1934, as amended.
858804.01.01
2057685•TV M•01 /09/99
•
LJ
•
I]
Material Event means the occurrence of any of the Events with respect to the Bonds set
forth in Exhibit 11 that is material, as materiality is interpreted under the Exchange Act.
Material Events Disclosure means dissemination of a notice of a Material Event as set
forth in Section 5.
MSRB means the Municipal Securities Rulemaking Board.
NRMSIRs means. as of any date, all Nationally Recognized Municipal Securities
Information Repositories then recognized by the Securities and Exchange Commission for
purposes of the Rule. As of the date of this Undertaking, the NRMSIRs are:
I.
Bloomberg Municipal Repositories
P.O. Box 840
Princeton, NJ 08542-0840
Phone: (609) 279-3200
Fax: (609) 279-5962
E-Mail: Munis @ B loomberg.com
DPC Data Inc.
One Executive Drive
Fort Lee, NJ 07024
Phone: (201) 346-0701
Fax: (201) 947-0107
E-Mail: nrmsir@dpcdata.com
Kenny Information Systems, Inc.
65 Broadway - 16th Floor
New York, NY 10006
Attn: Kenny Repository Service
Phone: (212) 770-4595
Fax: (212) 797-7994
Thomson NRMSIR
Attn: Municipal Disclosure
395 Hudson Street, 3rd Floor
New York, NY 10014
Phone: (212) 807-5001; (800) 689-8466
Fax: (212)989-2078
E-Mail: Disclosure @ Muller.com
The names and addresses of all current NRMSIRs should be verified each time information is
delivered pursuant to this Undertaking.
Participating Underwriter means each broker, dealer or municipal securities dealer
acting as an underwriter in the primary offering of the Bonds.
Rule means Rule 15c2-12 adopted by the Securities and Exchange Commission under the
Exchange Act, as the same may be amended from time to time.
SID means any public or private repository designated by the State as the state repository
and recognized as such by the Securities and Exchange Commission for purposes of the Rule. As
of the date of this Undertaking there is no SID.
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3. CUSIP NUMBER/FINAL OFFICIAL STATEMENT.
The CUSIP Number of the Bonds are as follows:
YEAR CUSIP
2000
299263
2001
299263
2002
299263
2003
299263
2004
299263
2005
299263
2006
299263
2007
299263
2008
299263
2009
299263
2010
299263
2011
299263
2012
299263
2013
299263
2014
299263
The Final Official Statement relating to the Bonds is dated January 25, 1999 (the "Final Official
Statement").
4. ANNUAL FINANCIAL INFORMATION DISCLOSURE. Subject to Section 9 of this
Undertaking, the City hereby covenants that it will disseminate its Annual Financial Information
and its Audited Financial Statements (in the form and by the dates set forth in Exhibit n to each
NRMSIR and to the SID, if any. The City is required to deliver such information in such manner
and by such time so that such entities receive the information by the dates specified. If any part
of the Annual Financial Information can no longer be generated because the operations to which
it is related have been materially changed or discontinued, the City will disseminate a statement
to such effect as part of its Annual Financial Information for the year in which such event first
occurs. If any amendment is made to this Undertaking, the Annual Financial Information for the
year in which such amendment is made (or in any notice or supplement provided to each
NRMSIR and the SID, if any) shall contain a narrative description of the reasons for such
amendment and its impact on the type of information being provided.
5. EVENTS NOTIFICATION; MATERIAL EVENTS DISCLOSURE. Subject to Section 9 of
this Undertaking, the City hereby covenants that it will disseminate in a timely manner Material
Events Disclosure to each NRMSIR or to the MSRB and to the SID, if any. Notwithstanding the
foregoing, notice of optional or unscheduled redemption of any Bonds or defeasance of any
Bonds need not be given under this Undertaking any earlier than the notice (if any) of such
i
redemption or defeasance is given to the Bondholders pursuant to the Ordinance. •
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6. DUTY TO UPDATE NRMSIRs/SID. The City shall determine, in the manner it deems
appropriate, the names and addresses of the then existing NRMSIRs and SID each time it is
required to file information with such entities.
7. CONSEQUENCES OF FAILURE OF THE CITY TO PROVIDE INFORMATION. The City
shall give notice in a timely manner to each NRMSIR or to the MSRB and to the SID, if any, of
any failure to provide Annual Financial Information Disclosure when the same is due hereunder.
In the event of a failure of the City to comply with any provision of this Undertaking, the
beneficial owner of any Bond may seek mandamus or specific performance by court order, to
cause the City to comply with its obligations under this Undertaking. A default under this
Undertaking shall not be deemed a default under the Ordinance, and the sole remedy under this
Undertaking in the event of any failure of the City to comply with this Undertaking shall be an
action to compel performance.
8. AMENDMENTS; WAIVER. Notwithstanding any other provision of this Undertaking,
the City by ordinance authorizing such amendment or waiver, may amend this Undertaking, and
any provision of this Undertaking may be waived, if: (a) the amendment or waiver is made in
connection with a change in circumstances that arises from a change in legal requirements,
change in law, or change in the identity, nature, or status of the City, or type of business
conducted; (b) this Undertaking, as amended, or the provision, as waived, would have complied
with the requirements of the Rule at the time of the primary offering, after taking into account
any amendments or interpretations of the Rule, as well as any change in circumstances; and (c)
the amendment or waiver does not materially impair the interests of the beneficial owners of the
Bonds, as determined either by parties unaffiliated with the City (such as Bond Counsel).
6 9. TERMINATION OF UNDERTAKING. The Undertaking of the City shall be terminated
hereunder if the City shall no longer have any legal liability for any obligation on or relating to
payment of the Bonds under the Ordinance. The City shall give notice in a timely manner if this
Section is applicable to each NRMSIR or to the MSRB and to the SID. if any.
•
10. DISSEMINATION AGENT. The City may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Undertaking, and may
discharge any such Agent, with or without appointing a successor Dissemination Agent.
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11. ADDITIONAL INFORMATION. Nothing in this Undertaking shall be deemed to
prevent the City from disseminating any other information, using the means of dissemination set
forth in this Undertaking or any other means of communication, or including any other
information in any Annual Financial Information Disclosure or notice of occurrence of a
Material Event, in addition to that which is required by this Undertaking. If the City chooses to
include any information from any document or notice of occurrence of a Material Event in
addition to that which is specifically required by this Undertaking, the City shall have no
obligation under this Undertaking to update such information or include it in any future
disclosure or notice of occurrence of a Material Event.
12. BENEFICIARIES. This Undertaking has been executed in order to assist the
Participating Underwriters in complying with the Rule; however, this Undertaking shall inure
solely to the benefit of the City, the Dissemination Agent, if any, and the beneficial owners of the
Bonds, and shall create no rights in any other person or entity.
13. RECORDKEEPING. The City shall maintain records of all Annual Financial
Information Disclosure and Material Events Disclosure including the content of such disclosure,
the names of the entities with whom such disclosure was filed and the date of filing such
disclosure.
14. ASSIGNMENT. The City shall not transfer its obligations under the Ordinance unless
the transferee agrees to assume all obligations of the City under this Undertaking or to execute an
Undertaking under the Rule.
15. GOVERNING LAW. This Undertaking shall be governed by the laws of the State of
Illinois.
Date: February 1, 1999
60201
CITY OF EVANSTON
COOK COUNTY, ILLINOIS
jts: Mayor
Address: 2100 Ridge Avenue
Evanston, Illinois
-5-
•
EXHIBIT I
ANNUAL FINANCIAL INFORMATION AND TIMING AND AUDITED
• FINANCIAL STATEMENTS
Annual Financial Information means the financial information and operating data of the
type contained in the Official Statement as follows:
CJ
• Table A — Water Fund Audited Balance Sheet
• Table B — Water Fund Operation and Maintenance Account - Revenues and
Operating Expenses
• table entitled "Water System Statistical Data"
• table entitled "Water -Allocations - Users of the Evanston Water System"
• table entitled "History of Water Rates"
• table entitled "Ten Largest Customers"
• all of the tables under the caption "Financial Information"
Information by Reference. All or a portion of the Annual Financial Information and
the Audited Financial Statements as set forth below may be included by reference to other
documents which have been submitted to each NRMSIR and to the SID, if any, or filed with the
Commission. If the information included by reference is contained in a Final Official Statement,
the Final Official Statement must be available from the MSRB; the Final Official Statement need
not be available from each NRMSIR, the SID, if any, or the Commission. The City shall clearly
identify each such item of information included by reference.
Time for Providing. Annual Financial Information will be provided to each NRMSIR
and to the SID, if any, within 210 days after the last day of the City's fiscal year. Audited
Financial Statements as described below should be filed on or before the time of filing the
Annual Financial Information, if available at such time. If Audited Financial Statements are not
available within 210 days after the last day of the City's fiscal year, unaudited financial
statements shall be filed within such time.
Preparation of Audited Financial Statements Audited Financial Statements will be
prepared according to Generally Accepted Accounting Principles as applicable to governmental
units (i.e. as subject to the pronouncements of the Governmental Standards Accounting Board
and subject to any express requirements of State law). Audited Financial Statements will be
provided to each NRMSIR and to the SID, if any, on or before the time of filing the Annual
Financial Information or, if unavailable at such time, within 30 days after availability to the City.
Annual Financial Information Changes If any change is made to the Annual
Financial Information as permitted by Section 4 of the Undertaking, the City will disseminate a
notice of such change as required by Section 4.
EXHIBIT I
EXHIBIT II
EVENTS FOR WHICH MATERIAL EVENTS DISCLOSURE IS REQUIRED •
1. Principal and interest payment delinquencies
2. Non-scheduled payment defaults
3. Unscheduled draws on debt service reserves reflecting financial difficulties
4. Unscheduled draws on credit enhancements reflecting financial difficulties
5. Substitution of credit or liquidity providers, or their failure to perform
6. Adverse tax opinions or events affecting the tax-exempt status of the security
7. Modifications to the rights of security holders
8. Bond calls
9. Defeasances
10. Release, substitution or sale of property securing repayment of the securities
11. Rating changes
Note: Some of the foregoing events may not be applicable to the Bonds.
•
•
EXHIBIT II
0
r:
.7
STATE OF ILLINOIS )
) SS
COUNTY OF COOK )
BOND ORDER
We, Roger D. Crum and William A. Stafford, do hereby certify that we are, respectively,
the City Manager and the Finance Director and Comptroller of the City of Evanston, Cook
County, Illinois (the "City"); and as such officers, we have reviewed the books, records, minutes
and files of the City, and from such review and based on our authority, we do further certify as
follows:
1. On January _, 1999, the City Council adopted Ordinance Number -0-99 of the
City entitled:
AN ORDINANCE authorizing and providing for the issue of
$3,500,000 Water Revenue Bonds, Series 1999, of the City of
Evanston, Cook County, Illinois, for the purpose of defraying the
cost of improving and extending the present waterworks system of
said City, prescribing all the details of said bonds, and providing
for the collection, segregation and distribution of the revenue of
the waterworks system of said City.
(the "Bond Ordinance")
2. The Bond Ordinance, in accordance with delegated limits, authorizes us to establish
a final maturity and rate schedule for the Bonds (as authorized and defined in the
Bond Ordinance).
3. The Bonds have been sold at public sale to
the Purchaser, at a purchase price of $
the par value of the Bonds.
4. The final schedule for the Bonds is as follows:
Principal Amount: $3,500,000
Dated: February 1, 1998.
being not less than 97% of
Due: Serially, on January 1 of the years, in the amounts, and bearing interest at the
rates percent per annum as follows:
YEAR
AMOUNT ($) RATE (%) •
2000
190,000
2001
185,000
2002
190,000
2003
195,000
2004
205,000
2005
210,000
2006
220,000
2007
230,000
2008
235,000
2009
245,000
2010
255,000
2011
265,000
2012
280,000
2013
290,000
2014
305,000
5. Accordingly, the principal
of and interest on the Bonds are computed as follows:
FOR THE BOND YEAR
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Amount ($)
6. The final terms of redemption for the Bonds are as follows: Those of the Bonds due
on or after January 1, 2014, 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
July 1, 2009, and if in part, in any order of maturity as selected by the City, and if
-2-
0
•
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.
7. All other terms are as required and provided in the Bond Ordinance.
8. Please be further advised that we find and determine that no person holding any
office of the City either by election or appointment, is in any manner interested,
either directly or indirectly, in his own name or in the name of any other person,
associate, trust or corporation, in the Bond Purchase Contract with the Purchaser as
such terms are defined in the Bond Ordinance.
9. Finally, please be advised that this Bond Order shall be entered into the records of
the City and made available to all Aldermen.
IN WITNESS WHEREOF we have hereunto affixed our official signatures this day of
January 1999.
Roger D. Crum
City Manager
William A. Stafford
0 Finance Director and Comptroller
-3-
STATE OF ILLINOIS )
) SS
COUNTY OF COOK )
AVAILABILITY OF BOND ORDER
I, the undersigned, do hereby certify that I am the duly qualified and acting City Clerk of
the City of Evanston, Cook County, Illinois (the "City"), and as such official I am the keeper of
the official journal of proceedings, books, records, minutes and files of the City and of the City
Council (the "City Council") thereof.
I do further certify that I made available to all members of the City Council at the regular
meeting of the Board held on the day of January 1999, a Bond Order, as such term is
defined in Ordinance Number 5 -0-99 and entitled:
AN ORDINANCE authorizing and providing for the issue of
$3,500,000 Water Revenue Bonds, Series 1999, of the City of
Evanston, Cook County, Illinois, for the purpose of defraying the
cost of improving and extending the present waterworks system of
said City, prescribing all the details of said bonds, and providing
for the collection, segregation and distribution of the revenue of
the waterworks system of said City.
which Bond Order is responsive to such Ordinance; a true, correct and complete copy of which
said Bond Order as provided at said meeting being attached hereto.
IN WITNESS WHEREOF I hereunto affix my official signature and the seal of the City this
2 day of 1999.
City Clerk
City of Evanston
Cook County, Illinois
[SEAL]
•
0
FINANCIAL ADVISOR'S
CERTIFICATE RE: BOND SALE
0 I, the undersigned, do hereby certify that I am an officer of R.V. Norene & Associates,
f
Inc., Chicago, Illinois (the "Financial Advisor"), and as such officer I do further certify as
follows:
1. The Financial Advisor is the duly appointed financial advisor to the City of
Evanston, Cook County, Illinois (the "City"), in connection with the issuance of
$3,500,000 Water Revenue Bonds, Series 1999, of the City (the "Bonds").
2. The Bonds have been sold to
(the "Purchaser"), and the City is to receive $ being % of the
par value of the principal amount of the Bonds plus accrued interest from the sale of the
Bonds.
3. The Bonds were sold to the Purchaser by the City at public (competitive)
sale at which bids were received. The bid of the Purchaser was the lowest
conforming bid. In our opinion, the terms of the Bonds are fair and reasonable in view of
current conditions in the bond market.
4. The Reserve Fund created or maintained in connection with the Bonds is of
the size and type that is customarily required in financings of the size and nature of the
Bonds. Such a requirement provides the holders of the Bonds some measure of
protection and work-out time should the City encounter financial difficulties. The failure
to provide for this fund at its current size would materially adversely affect the interest
rates or Yields at which the Bonds could be sold.
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5. Each of the following conditions to sale of the Bonds has been met:
(a) No interest is greater than 7.00%.
10
(b) Principal of and interest on the Bonds is not less than $300,000 and
not more than $340,000 in any given year.
(c) No redemption price exceeds 103%.
6. All of the other limitations and conditions regarding the sale of the Bonds to
the Purchaser set forth in the ordinance authorizing the issuance of the Bonds have as of
this date been met.
IN WUNEss WHEREOF I hereunto affix our name and my signature this day of
January 1999.
-I)-
R.V. NoRENE & AssOCIATEs, INC.
By: Ronald V. Norene
Title: President