O-103-10 Issuing G.O. Bonds Series 2010ORDINANCE NO 0-' 3- /o
AN ORDINANCE AUTHORIZING THE ISSUANCE OF TAX- EXEMPT
AND /OR TAXABLE GENERAL OBLIGATION WATERWORKS AND
SEWERAGE BONDS (ALTERNATE REVENUE SOURCE), SERIES 2010,
A, B, ETC., INCLUDING AS BUILD AMERICA BONDS (DIRECT
PAYMENT), OF THE VILLAGE OF LEMONT, COOK, WILL AND
DUPAGE COUNTIES, ILLINOIS, AND OTHER BONDS, PROVIDING
THE DETAILS OF SUCH BONDS AND FOR ALTERNATE REVENUE
SOURCES AND THE LEVY OF DIRECT ANNUAL TAXES SUFFICIENT
TO PAY THE PRINCIPAL OF AND INTEREST ON SUCH BONDS, AND
RELATED MATTERS
WHEREAS, the Village of Lemont, Cook, Will and DuPage Counties, Illinois
(the "Issuer "), is a non -home rule municipality duly established and operating its municipally -
owned combined waterworks and sewerage system (the "System ") in accordance with the
provisions of Division 139 of Article 11 of the Illinois Municipal Code (Section 5/11 -139 -1 et
seq. of Chapter 65 of the Illinois Compiled Statutes), as supplemented and amended (the
"Enterprise. Revenue Act "), and is entitled to receive a certain distributive revenue share of
proceeds from (i) the State of Illinois income taxes (such distributive share referred to herein as
the "Revenue Sharing Receipts ") imposed by the State of Illinois pursuant to the Illinois
Income Tax Act and distributed pursuant to the State Revenue Sharing Act and (ii) of the
Retailer's Occupation Taxes, Service Occupation Taxes, Use Taxes and Service Use Taxes
(collectively "Sales Taxes ") distributed pursuant to applicable law and, as applicable, may
receive 35% interest subsidy payments (the federal "Interest Payments ") under the American
Recovery and Reinvestment Act of 2009 ( "ARRA ") in connection with Build America Bonds
(Direct Payment) ( "BABs ") to Issuer; and
WHEREAS, the Issuer's President and Board of Trustees (the "Corporate
Authorities ") has determined that it is advisable, necessary and in the best interests of the
Issuer's public health, safety and welfare to undertake the acquisition, construction and
installation of new replacement softeners at the State Street and Houston Street water wells,
Houston Street water tower repairs and rehabilitation, general storm sewer separation, general
sanitary sewer repairs, general water system improvements (including, as applicable, land
acquisition and rights in real estate, lines, mechanical, electrical and other related facilities,
improvements and costs (collectively, the "Project "), pursuant to the preliminary plans and
specifications therefor prepared by the Issuer's Project engineers; and
WHEREAS, the estimated cost to provide for the Project, together with related
legal, financial, purchase discount, printing and publication costs, and other expenses
preliminary to and in connection with the Project, is anticipated not to exceed available funds on
hand and the amount presently anticipated and planned to be paid from proceeds of the
hereinafter described Bonds; and
WHEREAS, pursuant to the provisions of the Local Government Debt Reform
Act (the "Debt Reform Act ") as supplemented and amended (Section 350/1 et seq. of Chapter
30 of the Illinois Compiled Statutes), "Alternate Bonds ", as defined in the Debt Reform Act,
may be issued pursuant to "Applicable Law ", as defined in the Debt Reform Act, for the above -
described purposes; and
WHEREAS, the Issuer is authorized to issue its revenue bonds (subject to right
of petition for referendum which has heretofore been provided for) which are payable from
enterprise revenues, as defined in the Debt Reform Act, from the revenues of the System under
the Enterprise Revenue Act (the "Enterprise Revenues ") and to pledge, as security for the
payment of its revenue bonds, Sales Taxes, Revenue Sharing Receipts and Interest Payments;
and
WHEREAS, Ordinance No. 0- 85 -10, AN ORDINANCE AUTHORIZING THE
ISSUANCE OF UP TO $5,500,000 WATERWORKS AND SEWERAGE REVENUE BONDS
AND ALTERNATE REVENUE SOURCE BONDS (IN LIEU OF SUCH REVENUE BONDS)
OF THE VILLAGE OF LEMONT, COOK, WILL AND DUPAGE COUNTIES, ILLINOIS, TO
FINANCE WATERWORKS AND SEWERAGE FACILITY IMPROVEMENTS (the
"Preliminary Ordinance "), adopted November 8, 2010, together with separate notices of intent:
(i) to issue waterworks and sewerage revenue bonds, with a supplemental pledge of Sales Taxes,
and (ii) to issue waterworks and sewerage revenue, Sales Taxes and/or Revenue Sharing
Receipts and/or Interest Payments alternate bonds (being general obligation in lieu of revenue
bonds), were published on November 12, 2010, in The Southtown Star, a newspaper published in
Lemont, Illinois and of general circulation in the corporate limits of the Issuer; and
WHEREAS, more than thirty (30) days have expired since the date of publication
of the Preliminary Ordinance and such notices described above and the Issuer has received no
petition in connection with the Bonds or the Project, forms of petitions therefor being at all
relevant times available in the office of the Village Clerk; and
WHEREAS, pursuant to the Bond Issue Notification Act (30 ILCS 352/1 et seq.,
"BINA "), the Issuer, with due notice under BINA having been published in The Southtown Star
on November 12, 2010, on November 22, 2010, held and conducted the public hearing required
by BINA; and
WHEREAS, pursuant to and in accordance with the Enterprise Revenue Act, the
Debt Reform Act, the Notification Act and this Ordinance, the Issuer is authorized to issue its
tax - exempt and /or taxable General Obligation Waterworks and Sewerage Bonds (Alternate
Revenue Source), Series 2010, A, B etc., including as Build America Bonds (Direct Payment),
up to the aggregate principal amount of $5,500,000 (the "Bonds ") for the purpose of providing
funds to pay costs of the Project, and related costs and expenses; and
WHEREAS, the American Recovery and Reinvestment Act of 2009, Pub. L. No.
111 -5, 123 Stat. 115 (2009) (enacted February 17, 2009) (the "ARRA "), authorizes the Issuer to
issue taxable governmental bonds with subsidies for a portion of its borrowing costs, in the form
of refundable tax credits paid to the Issuer (a 35% interest direct payment, "Direct Payment"
for "Build America Bonds (Direct Payment) ", the "Interest Payments "); and
WHEREAS, the Issuer has insufficient funds to pay the costs of the Project and,
therefore, must borrow money and issue the Bonds under this ordinance in evidence thereof up to
the aggregate principal amount set forth above for such purposes; and
WHEREAS, the Issuer proposes to enter into a Bond purchase agreement (the
"Bond Purchase Agreement ") with Bernardi Securities, Inc., Chicago, Illinois, as underwriter
for the Bonds (the "Underwriter ") concerning the purchase and sale of the Bonds, and the
Bonds are to be described in the Issuer's Official Statement (in preliminary form and as
supplemented to be final, the "Official Statement ") in connection with the offering of the Bonds
for public sale, which Bonds as an issue subject to the continuing disclosure requirements of
Rule 15c2 -12 ( "Rule 15c2 -12 ") of the Securities Exchange Commission ( "SEC "); and
WHEREAS, for convenience of reference only this ordinance is divided into
numbered sections with headings, which shall not define or limit the provisions hereof, as
follows: Page
Preambles 1
Section 1. Definitions 4
Section 2. Authority /Purpose /Findings 8
Section 3. Authorization and Terms of Bonds 8
Section 4. Related Agreements 11
Section 5. Execution and Authentication 12
Section 6. Transfer, Exchange and Registration 12
Section 7. Bond Registrar and Paying Agent 15
Section 8. Alternate Bonds; General Obligations /Build America Bonds 16
Section 9. Form of Bonds 19
Section 10. Treatment of Bonds as Debt 25
Section 11. System Fund 25
Section 12. Alternate Bond Fund 29
Section 13. Levy and Extension of Taxes 30
Section 14. Pledge of Sales Taxes 31
Section 15. Pledged Revenues; General Covenants 32
Section 16. Parity Bonds; Additional Bonds 34
Section 17. Defeasance 36
Section 18. Bond Proceeds Account 36
Section 19. Arbitrage Rebate 37
Section 20. Investment Regulations 37
Section 21. Non - Arbitrage and Tax - Exemption 38
Section 22. Further Assurances and Actions 42
Section 23. Ordinance to Constitute a Contract 43
Section 24. Severability and No Contest 43
Section 25. Bank Qualified Bonds 43
Section 26. Conflict 43
Section 27. Effective Date 44
NOW, THEREFORE, BE IT ORDAINED BY THE PRESIDENT AND
OARD OF TRUSTEES OF THE VILLAGE OF LEMONT, COOK, WILL AND
DUPAGE COUNTIES, ILLINOIS, as follows:
Section 1, Definitions. Certain words and terms used in this ordinance shall
have the meanings given them herein, including above in the preambles hereto, and the meanings
given them in this Section 1, unless the context or use clearly indicates another or different
meaning is intended. Certain definitions are as follows:
"Additional Bonds" means any Alternate Bonds issued in the future in
accordance with the provisions of Applicable Law on a parity with and sharing ratably and
equally in the Enterprise Revenues and /or the Sales Taxes and/or Interest Payments.
"Alternate Bonds" means any Outstanding bonds issued as alternate bonds under
and pursuant to Applicable Law, and includes, expressly, the Bonds.
"Applicable Law" means, collectively, the Debt Reform Act, as supplemented
and amended, and the Enterprise Revenue Act, the Illinois Income Tax Act and other applicable
law, each as supplemented and amended.
"ARRA" means the American Recovery and Reinvestment Act of 2009, Pub. L.
No. 111 -5, 123 Stat. 115 (2009), enacted February 17, 2009, as supplemented and amended.
"Bona fide debt service fund" means a fund or account that: (1) is used
primarily to achieve a proper matching of revenues with principal and interest payments within
each bond year; and (2) is depleted at least once each bond year, except for a reasonable
carryover amount not to exceed the greater of: (i) the earnings on the fund for the immediately
proceeding bond year; or (ii) one - twelfth of the principal and interest payments on the issue for
the immediately preceding Bond Year.
"Bond" or "Bonds" means the Issuer's tax - exempt and /or taxable General
Obligation Waterworks and Sewerage Bonds (Alternate Revenue Source), Series 2010 [and as
further may be designated, insert after 2010 as applicable: A, B, etc.], with the prefix "Taxable"
and the suffix "(Build America Bonds (Direct Payment))" for BABs, as applicable],
authorized to be issued by this ordinance, in the aggregate principal amount set forth above, and
includes, as applicable, one or more series of Bonds issued on a tax - exempt or taxable basis and
as BABs or non -BABs, as herein authorized.
"Bond Order" shall have the meaning in Section 3(a).
"Bond Registrar" and "Paying Agent" means Amalgamated Bank of Chicago,
Chicago, Illinois, and its successors.
"Build America Bonds (Direct Payment)" and `BABs" each means the 35%
Build America Bonds (Direct Payment) under ARRA and Section 54AA of the Code.
"Build America Payments" means the 35% "credit" payments to the Issuer under
Section 6431 of the Code as applicable to a series of Bonds issued as BABs.
"Code" means the Internal Revenue Code of 1986, as amended, and includes
related and applicable Income Tax Regulations promulgated by the Treasury Department.
"Corporate Authorities" means the Issuer's President and Board of Trustees.
"Debt Reform Act" means the Local Government Debt Reform Act of the State
of Illinois, as supplemented and amended (Section 350/1 et seq. of Chapter 30 of the Illinois
Compiled Statutes).
"Enterprise Revenue Act" means the provisions of Division 139 of Article 11 of
the Illinois Municipal Code, as supplemented and amended (Section 5/11 -139 -1 et seq. of
Chapter 65 of the Illinois Compiled Statutes).
"Enterprise Revenues" means all income from whatever source derived from the
System, including: (i) investment income; (ii) connection, permit and inspection fees and the
like; and (iii) penalties and delinquency charges, but excluding expressly (a) nonrecurring
income from the sale of property of the System; (b) governmental or other grants; (c) advances
or grants made to or from the Issuer; (d) capital development, reimbursement, or recovery
charges and the like; (e) annexation or preannexation charges; and (f) as otherwise determined in
accordance with generally accepted accounting principles for local government funds.
"Fiscal Year" means the twelve -month period constituting the Issuer's fiscal
year, not inconsistent with Applicable Law.
"Governmental Bonds" or "governmental bonds" under ARRA means that the
referenced obligations would qualify as tax - exempt non - private activity bonds under Sections
103 and 141 et seq. of the Code.
"Insurer" means the issuer of a Policy, if any, securing the payment of the
Bonds.
"Interest Payments" means Interest Payments as defined in the recitals in the
preamble to this Ordinance.
"Issuer" means the Village of Lemont, Cook, Will and DuPage Counties, Illinois,
and lawful successors.
"Junior Bonds" means any Outstanding bond or Outstanding bonds payable
from the Junior Bond and Interest Account of the Waterworks and Sewerage Fund created or
continued under Section 11 of this Ordinance, and includes, expressly, the Bonds.
"Maximum Annual Debt Service ", when used with reference to Senior Bonds,
Junior Bonds, Parity Bonds or Additional Bonds, respectively, means an amount of money equal
to the highest future principal and interest requirement of all such bonds Outstanding, as
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applicable, required to be deposited into a Senior Bond and Interest Account or a Junior Bond
and Interest Account, as applicable, maintained in and by this Ordinance, or payable from
Sales Taxes and /or Revenue Sharing Receipts, in any Fiscal Year, including and subsequent to
the Fiscal Year in which the computation is made.
"Net Revenues" means the Enterprise Revenues minus Operation and
Maintenance Expenses.
"Operation and Maintenance Expenses" means all expenses of operating,
maintaining and routine repair of the System, including wages, salaries, costs of materials and
supplies, power, fuel, insurance, purchase of System services; but excluding debt service,
depreciation, or any reserve requirements, and otherwise as determined in accordance with
generally accepted accounting principles for local government enterprise funds.
"Ordinance" or "ordinance" means this ordinance and any ordinance
supplemental hereto.
"Outstanding" when used with reference to any bond, means a bond which is
outstanding and unpaid; provided, however, such term shall not include 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 Issuer by the deposit in an irrevocable trust or
escrow of funds of direct, full faith and credit obligations of the United States of America, the
principal of and interest on which will be sufficient to pay at maturity or as called for redemption
all the principal of, redemption premium, if any, and interest on such bonds, and will not result in
the loss of the exclusion from gross income of the interest thereon under Section 103 of the
Code.
"Parity Bonds" means bonds or any other obligations to be issued subsequent in
time to the Bonds and which will share ratably and equally in the Pledged Revenues with either
the Senior Bonds or the Junior Bonds, as set forth and provided for with respect to such Parity
Bonds.
"Pledged Account" shall have the meaning in Section 13(d).
"Pledged Revenues" means, collectively, as applicable, the Enterprise Revenues
constituting the Net Revenues of the System, Sales Taxes, Revenue Sharing Receipts and
Interest Payments.
"Pledged Taxes" means the ad valorem taxes levied against all taxable property
in the corporate limits of the Issuer without limitation as to rate or amount, levied and pledged
hereunder by the Issuer to pay the Bonds.
"Policy" means, if any, a bond insurance policy or other credit facility securing
the payment of the Bonds.
Ordinance.
"Project" means the Project described and defined in the preambles to this
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"Purchase Agreement" means, when fully executed, the Bond purchase
agreement with the Underwriter in connection with Bonds.
"Qualified Investments" means, subject to restrictions related to an Insurer's
Policy, legal investments of the Issuer under the laws of the State of Illinois.
"Revenue Sharing Receipts" means Revenue Sharing Receipts as defined in the
recitals in the preamble to this Ordinance.
"Revenue Source" means, as applicable, Sales Taxes, Revenue Sharing Receipts,
and Interest Payments.
"Sales Taxes" means Sales Taxes as defined in the recitals in the preamble to this
Ordinance.
"Senior Bonds" means any Outstanding bond or Outstanding bonds to which the
Bonds hereunder are junior and subordinate, if any, payable from the Senior Bond and Interest
Account of the Water Fund created, or continued under Section 11 of this Ordinance.
"System" means the Issuer's waterworks and sewerage system, including all
property, real, personal or otherwise, now or in the future at any time owned or under the control
of the Issuer, wherever located, and used by or useful to the Issuer in connection with the
Issuer's System.
"Taxable" or "taxable" with respect to an obligation means that the obligation is
not tax - exempt.
"Tax- Exempt" or "tax- exempt" with respect to an obligation means that the
interest on the obligation is excluded from gross income for federal income tax purposes.
"Underwriter" shall have the meaning set forth above in the recitals in the
preamble to this Ordinance.
"Yield" or "yield" means yield computed under Section 1.148 -4 of the Income
Tax Regulations for the Bonds, and yield computed under Section 1.148 -5 of the Income Tax
Regulations for an investment; provided that for purposes of the arbitrage investment restrictions
under Section 148 of the Code related to BABS, the Yield on BABs is reduced by the 35% direct
payment credit to the Issuer allowed under Sections 54AA and 6431 of the Code; and
accordingly, calculation of the yield on BABs for purposes of the arbitrage rules shall be by
applying the rules contained in Section 148 of the Code and the regulations thereunder, but by
reducing the amount of interest paid on BABs by the amount of the 35% credit payments
received.
"Yield Reduction Payments" or "yield reduction payments" shall have the
meaning in Income Tax Regulations Section 1.148 -5(c).
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"Yield Restricted" or "yield restricted" with reference to an obligation means
that the yield thereon is limited to the yield on the applicable Bonds.
Section 2. Authoritv/Purnose/Findings. The Corporate Authorities hereby find
that the matters set forth in the preambles and recitals hereto are true and correct and incorporate
them herein by this reference and that it is necessary and in the best interests of the Issuer that
the Issuer finance the Project and that one or more series of Bonds be issued for such purpose (i)
as Build America Bonds (Direct Payment), which is to be elected under Section 54AA of the
Code and /or (ii) taxable (non -BABs) and /or tax - exempt Bonds, in whole or in part, as shall be
specified in one or more Bond Orders. Proceeds of Bonds are to be applied for such purpose.
Section 3. Authorization and Terms of Bonds. To meet part of the estimated
cost of Project, there is hereby authorized the sum of up to $5,500,000, to be derived from the
proceeds of the Bonds. For the purpose of financing such appropriation, the Bonds of the Issuer
shall be issued and sold as (i) BABs or (ii) on a taxable (non -BABs) and /or tax - exempt basis, in
an amount up to the aggregate principal amount set forth above. BABs shall each be designated
"General Obligation Waterworks and Sewerage Bond (Alternate Revenue Source), Series
2010" [with "A ", "B" etc. designated, after 2010 as applicable] prefaced with "Taxable" and
with "(Build America Bond (Direct Payment))" as a suffix at the end, in the case of Build
America Bonds. Although the Bonds are anticipated to be issued only as a single series of
taxable Build America Bonds, Bonds of additional series are authorized to be issued on a taxable
(non -BABs) and /or tax - exempt basis in addition or in lieu of Build America Bonds. Such taxable
and /or tax - exempt series shall be designated "Series 2010A ", "Series 2010B," etc., as
applicable, as specified in one or more applicable Bond Orders, without the "Taxable" (if tax -
exempt or otherwise taxable) prefix or the "(Build America Bonds (Direct Payment))" suffix if
not BABs.
(a) General Terms. Bonds of each series shall be numbered consecutively
from 1 upwards in order of their issuance and may bear such identifying numbers or letters as
shall be useful to facilitate the registration, transfer and exchange of the Bonds. Unless
otherwise determined in an order to authenticate the Bonds (in any event to be as of or after
December 15, 2010, and as of or before the date or dates of the issuance and sale thereof and
acceptable to the Underwriter), each Bond shall be dated as of or before the date of issuance as
the Underwriter agrees or accepts. The Bonds shall be issuable in the denomination of $5,000
each or any authorized integral multiple thereof. The Bonds of each series are hereby authorized
to bear interest at the rate or rates percent per annum not to exceed 8.0 %, and to mature in the
principal amount on December 1 of the years, as shall be specified in a Bond Order.
Although Bonds of each maturity are authorized to mature and to bear interest at
the rates per annum, as set forth above, the Bonds are nevertheless hereby authorized to mature
in other principal amounts (not exceeding $5,500,000 in the aggregate) and to bear interest at
such lawfully authorized lower rate or rates and have such other terms and provisions as either (i)
the Village President shall certify in one or more Bond Orders at or about the time of delivery of
the applicable Bonds and payment therefor (with respect to which the term "Bond Order" shall
mean each certificate signed by the Village President and attested by the Village Clerk and under
the seal of the Issuer, setting forth and specifying details of Bonds, including, as the case may be,
reoffering premiums, original issue discount ( "OID "), specification of Pledged Revenues,
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specification of Project elements to be financed, reconfiguration of the form of the Bonds, series
description, identification of the Bond Registrar, Paying Agent, depositary, custodian, other
fiscal agents, Underwriter, Pledged Taxes, final interest rates, optional and mandatory call
provisions, payment dates, Insurer and Policy, the final maturity schedule and features related to
each series and to Build America Bonds (Direct Payment) and taxable and/or tax - exempt Bonds,
under this ordinance. The Bonds of each series shall be conformed to the applicable Bond Order.
Each Bond shall bear interest from its date, or from the most recent interest
payment date to which interest has been paid, computed on the basis of a 360 -day year consisting
of twelve 30 -day months, and payable in lawful money of the United States of America
semiannually on each June 1 and December 1, commencing June 1, 2011 or otherwise as
provided in an applicable Bond Order, at the rate or rates percent per annum herein provided.
The principal of and premium, if any, on the Bonds shall be payable in lawful money of the
United States of America upon presentation and surrender thereof at the designated payment
office of Amalgamated Bank of Chicago, in Chicago, Illinois, designated in this Ordinance to act
as the Paying Agent for the Bonds (including its successors, the "Paying Agent "). Interest on
the Bonds shall be payable on each interest payment date to the registered owners of record
appearing on the registration books maintained by Amalgamated Bank of Chicago, in Chicago,
Illinois, which shall act as Bond Registrar on behalf of the Issuer for such purpose (including its
successors, the "Bond Registrar "), at the designated corporate trust office of the Bond Registrar
as of the close of business on the last day (whether or not a business day) of the calendar month
next preceding the applicable interest payment date. Interest on the Bonds shall be paid by check
or draft mailed by the Paying Agent to such registered owners at their addresses appearing on the
registration books.
(b) Redemption.
(i) Bonds shall be subject to optional redemption prior to maturity as provided in
Section 9, or otherwise in a Bond Order, and not otherwise.
Certain Bonds shall be subject to redemption at the Issuer's option, including, for
example, a form of redemption called a "make- whole" redemption, where all or part of the
future payments are present - valued based on an indexing mechanism, to be specified in a Bond
Order, if at all.
(ii) This paragraph shall apply only to the extent Section 9 and/or a Bond Order shall
specify any Term Bonds, and otherwise shall not apply. Bonds so specified as Term Bonds (the
"Term Bonds ") are subject to mandatory sinking fund redemption in the principal amount on
December 1 of the years so specified, but corresponding to the principal maturities specified
above in Section 3(a). At its option before the 45th day (or such lesser time acceptable to the
Bond Registrar) next preceding any mandatory sinking fund redemption date in connection with
Term Bonds the Issuer by furnishing the Bond Registrar and the Paying Agent an appropriate
certificate of direction and authorization executed by the Village President may: (i) deliver to
the Bond Registrar for cancellation Term Bonds in any authorized aggregate principal amount
desired; or (ii) furnish the Paying Agent funds for the purpose of purchasing any of such Term
Bonds as arranged by the Issuer; or (iii) receive a credit (not previously given) with respect to the
mandatory sinking fund redemption obligation for such Term Bonds which prior to such date
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have been redeemed and cancelled. Each such Bond so delivered, previously purchased or
redeemed shall be credited at 100% of the principal amount thereof, and any excess shall be
credited with regard to future mandatory sinking fund redemption obligations for such Bonds in
such order as determined by the Issuer, but in chronological order if there is no determination,
and the principal amount of Bonds to be so redeemed as provided shall be accordingly reduced.
In the event Bonds being so redeemed are in a denomination greater than $5,000, a portion of
such Bonds may be so redeemed, but such portion shall be in the principal amount of $5,000 or
any authorized integral multiple thereof.
(iii) In the event of the redemption of less than all the Bonds of like maturity, the
aggregate principal amount thereof to be redeemed shall be $5,000 or an integral multiple thereof
and the Bond Registrar shall assign to each Bond of such maturity a distinctive number for each
$5,000 principal amount of such Bond and shall select by lot from the numbers so assigned as
many numbers as, at $5,000 for each number, shall equal the principal amount of such Bonds to
be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so
selected; provided that only so much of the principal amount of each Bond shall be redeemed as
shall equal $5,000 for each number assigned to it and so selected.
(iv) The Issuer shall deposit with the Paying Agent an amount of money sufficient to
pay the redemption price of all the Bonds or portions of Bonds which are to be redeemed on the
redemption date, together with interest to such redemption date, prior to giving any notice of
redemption. With notice at least forty -five (45) days before the redemption date to the Bond
Registrar by the Issuer (or lesser notice acceptable to the Bond Registrar), with no such notice
required for mandatory sinking fund redemption of Term Bonds, notice of the redemption of
Bonds shall be given by first class mail not less than thirty (30) days nor more than sixty (60)
days prior to the date fixed for such redemption to the registered owners of Bonds to be
redeemed at their last addresses appearing on such registration books. The Bonds or portions
thereof specified in such notice shall become due and payable at the applicable redemption price
on the redemption date therein designated, together with interest to the redemption date. If there
shall be drawn for redemption less than all of a Bond, the Issuer shall execute and the Bond
Registrar shall authenticate and deliver, upon the surrender of such Bond, without charge to the
registered owner thereof, for the unredeemed balance of the Bond so surrendered, Bonds of like
maturity and of the denomination of $5,000 or any authorized integral multiple thereof.
Unless moneys sufficient to pay the redemption price of the Bonds to be
redeemed at the option of the Issuer are received by the Paying Agent /Bond Registrar prior to the
giving of such notice of redemption, such notice may, at the option of the Issuer, state that such
redemption will 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 will be of no
force and effect, the Issuer will not redeem such Bonds, and the Bond Registrar will give notice,
in the same manner in which the Notice of redemption has been given, that such moneys were
not so received and that such Bonds will not be redeemed. Otherwise, prior to any redemption
date, the Issuer will deposit with the Bond Registrar an amount of money sufficient to pay the
redemption price of all the Bonds or portions of Bonds which are to be redeemed on that date.
(v) All notices of redemption are to include at least the information as follows: (1)
the redemption date; (2) the redemption price; (3) if less than all of the Bonds of a given maturity
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are to be redeemed, the identification and, in the case of partial redemption of the Bonds, the
respective principal amounts of the Bonds to be redeemed; (4) a statement that on the redemption
date the redemption price will become due and payable upon each such Bond or portion thereof
called for redemption and that interest thereon shall cease to accrue from such date; and (5) the
place where such Bonds are to be surrendered for payment of the redemption price, which place
of payment shall be the principal office of the Paying Agent.
(vi) Notice of redemption having been so given, the Bonds or portions of Bonds so to
be redeemed shall, on the redemption date, become due and payable at the redemption price
therein specified, and from and after such date 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, any failure of a
registered owner of a Bond to receive such notice shall not be deemed to invalidate, limit or
delay the effect of the notice or the redemption action described in the notice. Such notice may
be waived in writing by a registered owner of a Bond, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice shall be filed, if at all, 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. Upon surrender of such Bonds for redemption in accordance
with such notice, such Bonds shall be paid by the Paying Agent at the redemption price. Interest
due on or prior to the redemption date shall be payable as herein provided for the payment of
interest.
(vii) If any Bond or portion of Bond called for redemption shall not be so paid upon
surrender thereof for redemption, the principal, and premium, if any, shall, until paid, bear
interest from the redemption date at the rate borne by the Bond or portion of such 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.
(c) Policy/Insurer. The designation of an Insurer is hereby authorized. The
provisions of a Policy are incorporated into this ordinance by reference, including without
limitation that any investment restrictions and limitations in an Issuer's commitment and
standard provisions related to a Policy shall be deemed to be applicable restrictions and
limitations on the investments authorized by this ordinance, and as provisions of this ordinance,
and shall be appended as operative provisions of this ordinance, but any failure to append shall
not abrogate, diminish or impair the effect thereof. In the event there is no Policy or Insurer with
respect to any series of Bonds, reference to the Insurer and Policy in this ordinance shall be given
no effect to that extent.
Section 4. Related Agreements. All things done with respect to the sale of the
Bonds by the Issuer's Village President, Village Clerk, Village Treasurer and Village Attorney,
shall be and are hereby in all respects ratified, confirmed and approved. The sale of the Bonds at
a price of not less than 97% of par plus accrued interest is authorized and approved. The Village
President, Village Clerk, Village Treasurer, Village Attorney and other officials of the Issuer are
hereby authorized and directed to do and perform, or cause to be done or performed for or on
behalf of the Issuer, each and every thing necessary for the issuance of the Bonds, including the
proper execution, delivery and performance of each applicable Purchase Agreement, Official
Statement and of depositary, custodial and paying agent agreements and related instruments and
certificates by the Issuer and the purchase by and delivery of the Bonds to or at the direction of
the Underwriter. No elected or appointed officer of the Issuer is in any manner interested,
directly or indirectly, in his or her own name or in the name of any other person, association,
trust or corporation in any Purchase Agreement.
Section 5. Execution and Authentication. Each Bond shall be executed in the
name of the Issuer by the manual or authorized facsimile signature of its Village President and
the corporate seal of the Issuer, or a facsimile thereof, shall be thereunto affixed, impressed or
otherwise reproduced or placed thereon and attested by the manual or authorized facsimile
signature of its Village Clerk. Temporary Bonds, preliminary to the availability of Bonds in
definitive form shall be and are hereby authorized and approved.
In case any officer whose signature, or a facsimile of whose signature, shall
appear on any Bond shall cease to hold such office before the issuance of such Bond, such Bond
shall nevertheless be valid and sufficient for all purposes, the same as if the person whose
signature, or a facsimile thereof, appears on such Bond had not ceased to hold such office. Any
Bond may be signed, sealed or attested on behalf of the Issuer by any person who, on the date of
such act, shall hold the proper office, notwithstanding that at the date of such Bond such person
may not hold such office. No recourse shall be had for the payment of any Bonds against the
Corporate Authorities or any officer or employee of the Issuer (past, present or future) who
executes the Bonds, or on any other basis.
Each Bond shall bear thereon a certificate of authentication executed manually by
the Bond Registrar. No Bond shall be entitled to any right or benefit under this Ordinance or
shall be valid or obligatory for any purpose until such certificate of authentication shall have
been duly executed by the Bond Registrar. 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 the Bond Registrar if signed by an authorized officer of the Bond
Registrar, but it shall not be necessary that the same officer sign the certificate of authentication
on all of the Bonds issued hereunder.
Section 6. Transfer, Exchange and Registration. The Bonds shall be
negotiable, subject to the provisions for registration of transfer contained herein and related to
book -entry only registration.
(a) General This subsection (a) is subject to the provisions of subsection (b)
concerning book -entry only provisions. The Issuer 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 Bond Registrar of the Issuer. The Issuer is authorized to prepare, and the Bond Registrar
shall keep custody of, multiple Bond blanks executed by the Issuer for use in the issuance from
time to time of the Bonds and in the transfer and exchange of Bonds.
-12-
Upon surrender for transfer of any Bond at the principal corporate trust office of
the Bond Registrar, duly endorsed by, or accompanied by a written instrument or instruments of
transfer in form satisfactory to the Bond Registrar and duly executed by the registered owner or
such owner's attorney duly authorized in writing, the Issuer shall execute and the Bond Registrar
shall authenticate, date and deliver in the name of the transferee or transferees a new fully
registered Bond or Bonds of the same series and maturity of authorized denominations, for a like
aggregate principal amount. Any fully registered Bond or Bonds may be exchanged at the office
of the Bond Registrar for a like aggregate principal amount of Bond or Bonds of the same series
and maturity of other authorized denominations. The execution by the Issuer 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.
The Bond Registrar shall not be required to transfer or exchange any Bond during
the period from the fifteenth (15th) day of the calendar month next preceding any interest
payment date on such Bond and ending on such interest payment date, nor, as may be applicable,
to transfer or exchange any Bond after notice calling such Bond for prepayment has been mailed,
nor during a period of fifteen (15) days next preceding mailing of a notice of prepayment and
redemption of any Bonds.
The person in whose name any Bond shall be registered shall be deemed and
regarded as the absolute owner thereof for all purposes, and payment of the principal of,
premium (if any) or interest on any Bond shall be made only to or upon the order of the
registered owner thereof or such registered 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
Issuer 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
exchanged in the case of the issuance of a Bond or Bonds for the outstanding portion of a Bond
surrendered for redemption.
The Village President or Village Administrator or Village Treasurer may, in his or
her discretion at any time, designate a bank with trust powers or trust company, duly authorized
to do business as a bond registrar, paying agent, or both, to act in one or both such capacities
hereunder, in the event the Village President or Village Administrator or Village Treasurer shall
determine it to be advisable. Notice shall be given to the registered owners of any such
designation in the same manner, as near as may be practicable, as for a notice of redemption of
Bonds, and as if the date of such successor taking up its duties were the redemption date.
(b) Book -Entry -Only Provisions. Unless otherwise set forth in a Bond Order as
the case may be, the Bonds shall be issued in the form of a separate single fully. registered Bond
of each series for each of the maturities of the Bonds. Upon initial issuance, the ownership of
each such Bond may be registered in the Bond Register therefor in a street name of the
Depository, or any successor thereto, as nominee of the Depository. The outstanding Bonds
from time to time may be registered in the Bond Register in a street name, as nominee of the
Depository. If not already effected, the Village President or Village Administrator or Village
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Treasurer is authorized to execute and deliver on behalf of the Issuer such letters to or
agreements with the Depository as shall be necessary to effectuate such book -entry system (any
such letter or agreement being referred to herein as the "Representation Letter "). Without
limiting the generality of the authority given to the Village President or Village Administrator or
Village Treasurer with respect to entering into such Representation Letter, it may contain
provisions relating to (a) payment procedures, (b) transfers of the Bonds or of beneficial interest
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 a nominee
of the Depository, the Issuer and the Bond Registrar shall have no 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 foregoing, the Issuer 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, of any notice with respect to the Bonds, including any notice of redemption,
or (c) the payment to any Depository Participant or any other person, other than a registered
owner of a Bond as shown in the Bond Register, of any amount with respect to principal of or
interest on the Bonds.
As long as the Bonds are held in a book - entry -only system, no person other than
the nominee of the Depository, or any successor thereto, as nominee for the Depository, shall
receive a Bond certificate with respect to any Bonds. Upon delivery by the Depository to the
Bond Registrar of written notice to the effect that the Depository has determined to substitute a
new nominee in place of the prior nominee, and subject to the provisions hereof with respect to
the payment of interest to the registered owners of Bonds as of the close of business on the last
day of the calendar month next preceding the applicable interest payment date, the reference
herein to nominee in this ordinance shall refer to such new nominee of the Depository.
In the event that (a) the Issuer determines that the Depository is incapable of
discharging its responsibilities described herein and in the Representation Letter, (b) the
agreement among the Issuer, the Bond Registrar, the Paying Agent and the Depository evidenced
by the Representation Letter shall be terminated for any reason or (c) the Issuer determines that it
is in the best interests of the beneficial owners of the Bonds that they be able to obtain
certificated Bonds, the Issuer shall notify the Depository and the Depository Participants of the
availability of Bond certificates, and the Bonds shall no longer be restricted to being registered in
the Bond Register in the name of a nominee of the Depository. At that time, the Issuer may
determine that the Bonds shall be registered in the name of and deposited with a successor
depository operating a book -entry system, as may be acceptable to the Issuer, or such
depository's agent or designee, and if the Issuer does not select such alternate book -entry system,
then the Bonds may be registered in whatever name or names registered owners of Bonds
transferring or exchanging Bonds shall designate, in accordance with the provisions hereof.
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Notwithstanding any other provision of this ordinance to the contrary, so long as any Bond is
registered in the name of a nominee of the Depository, all payments with respect to principal of
and interest on such Bond and all notices with respect to such Bond shall be made and given,
respectively, in the manner provided in the Representation Letter.
Section 7. Bond Registrar and Paying Agent. The Bond Registrar and Paying
Agent thereof with respect to this Ordinance and the Bonds shall be Amalgamated Bank of
Chicago, through its designated principal office in Chicago, Illinois. The Issuer covenants that it
shall at all times retain a Bond Registrar and Paying Agent with respect to the Bonds and shall
cause to be maintained at the office of such Bond Registrar a place where Bonds may be
presented for registration of transfer or exchange, that it will maintain at the designated office of
the Paying Agent a place where Bonds may be presented for payment, that it shall require that
the Bond Registrar maintain proper registration books and that it shall require the Bond Registrar
and Paying Agent to perform the other duties and obligations imposed upon each of them by this
Ordinance in a manner consistent with the standards, customs and practices concerning
municipal securities. The Issuer may enter into appropriate agreements with any Bond Registrar
or such officer's successor and any Paying Agent in connection with the foregoing, including as
follows (in any event, (a) - (f) below shall apply to the Bond Registrar and Paying Agent):
(a) to act as Bond Registrar, authenticating agent, Paying Agent and transfer
agent as provided herein;
(b) to maintain a list of the registered owners of the Bonds as set forth herein
and to furnish such list to the Issuer upon request, but otherwise to keep such list
confidential;
(c) to cancel and /or destroy Bonds which have been paid at maturity or
submitted for exchange or transfer;
(d) to furnish the Issuer at least annually a certificate with respect to Bonds
cancelled and /or destroyed;
(e) to give notices of redemption; and
(f) to furnish the Issuer at least annually an audit confirmation of Bonds paid,
Bonds outstanding and payments made with respect to interest on the Bonds.
The Bond Registrar and Paying Agent shall signify their acceptances of the duties
and obligations imposed upon them by this Ordinance. The Bond Registrar by executing the
certificate of authentication on any Bond shall be deemed to have certified to the Issuer 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 of the Bonds. The Bond Registrar
and Paying Agent are the agents of the Issuer for such purposes and shall not be liable in
connection with the performance of their respective duties except for their own negligence or
default. The Bond Registrar shall, however, be responsible for any representation in its
certificate of authentication on the Bonds.
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Section 8. Alternate Bonds; General Obligations/ Build America Bonds. The
Bonds are and constitute Alternate Bonds under the Local Government Debt Reform Act, and to
the extent issued as BABs, Build America Bonds under ARRA, to be payable from applicable
Pledged Revenues and, including as applicable, Interest Payments and by a levy of taxes
( "Pledged Taxes "), and the Bonds constitute general obligation bonds as alternate bonds.
Subject to the foregoing, under and pursuant to Section 15 of the Debt Reform Act, the full faith
and credit of the Issuer are hereby irrevocably pledged to the punctual payment of the principal
of, premium, if any, and interest on the Bonds; the Bonds shall be direct and general obligations
of the Issuer; and the Issuer shall be obligated to levy ad valorem taxes upon all the taxable
property within the Issuer's corporate limits, for the payment of the Bonds and the interest
thereon, without limitation as to rate or amount (such ad valorem taxes being the Pledged Taxes).
(a) Alternate Bonds /General Obligations.
Pledged Revenues are hereby determined by the Corporate Authorities to be
sufficient to provide for or pay in each year to final maturity of the Bonds all of the
following: (1) Operation and Maintenance Expenses of the enterprise (i.e., the System), but not
including depreciation, (2) debt service on all Outstanding revenue bonds payable from
Enterprise Revenues, (3) all amounts required to meet any fund or account requirements with
respect to any such Outstanding revenue bonds, (4) other contractual or tort liability obligations,
if any, payable from such Enterprise Revenues, and (5) in each year, an amount not less than
1.25 times debt service of all (i) Alternate Bonds payable from such Enterprise Revenues
previously issued and outstanding and (ii) Alternate Bonds payable from such Enterprise
Revenues proposed to be issued. To the extent payable from one or more revenue sources, the
Pledged Revenues shall be and, with appropriate increases, are hereby determined by the
Corporate Authorities to provide in each year an amount not less than 1.25 (1.10 from Interest
Payments) times debt service (as defined in Section 2 of the Debt Reform Act) of Alternate
Bonds payable from such Enterprise Revenues previously issued and outstanding and Alternate
Bonds proposed to be issued. Such conditions enumerated need not be met for that amount of
debt service (as defined in Section 2 of the Debt Reform Act) provided for by the setting aside of
proceeds of bonds or other moneys at the time of the delivery of such bonds. The Pledged
Revenues are hereby determined by the Corporate Authorities to provide in each year Operation
and Maintenance Expenses, depreciation and reserve requirements and an amount not less than
1.25(1.10 from Interest Payments) times debt service (as defined in Section 2 of the Debt Reform
Act) of all of the Bonds.
The determination of the sufficiency of the Pledged Revenues shall be and is
hereby expected to be supported by reference to the most recent audit of the Issuer, which is for a
Fiscal Year ending not earlier than 18 months previous to the time of the issuance of the
Alternate Bonds. If for any reason such audit does not adequately show the sufficiency of such
Pledged Revenues, or if such Pledged Revenues are shown to be insufficient, then the
determination of sufficiency shall be supported by the "report" of an independent accountant or
feasibility analyst, the latter having a national reputation for expertise in such matters,
demonstrating the sufficiency of such Pledged Revenues and explaining, if appropriate, by what
means the Pledged Revenues will be greater than as shown in the audit. Whenever the
sufficiency of Pledged Revenues is demonstrated by reference to higher rates or charges and fees
for the Enterprise Revenues (with respect to the use of the System constituting the Enterprise
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Revenues), such higher rates or charges and fees with respect to the use of the services of the
System shall have been properly imposed by an ordinance adopted prior to the time of delivery
of the Bonds.
(b) Build America Bonds (Direct Payment). All or part (any series
designated as BABs) of the Bonds are to be Build America Bonds (Direct Payment), which
provide a Federal subsidy through a refundable tax credit paid to the Issuer by the U. S. Treasury
Department and the Internal Revenue Service (the "IRS ") in an amount equal to 35 percent
(35 %) of the total coupon interest payable to investors (in this case by direct payment to the
Issuer) in the applicable "taxable" Bonds. The Bonds issued as BABs are to be taxable, and not
tax - exempt. The Issuer shall comply with the provisions of this resolution in connection with
Build America Bonds, as applicable to the Bonds including without limitation the following (In
connection with which "Bonds" in this paragraph shall mean only Bonds issued as BABs, and
not tax - exempt.):
(i) Qualified Bonds. The ARRA authorizes Build America Bonds (Direct Payment) that
meet the definition of "qualified bonds" to receive a refundable 35% credit under § 6431 of the
Code in lieu of tax credits under § 54AA and imposes certain program requirements. The ARRA
defines the term "qualified bond" to mean an obligation that is issued as part of an issue that
meets the following requirements: (1) the bond is a "Build America Bond "; (2) the bond is
issued before January 1, 2011; (3) 100 percent (100 %) of the excess of (i) the available project
proceeds (as defined in § 54A of the Code to mean sale proceeds of the Bonds less not more than
two percent (2 %) of such proceeds used to pay issuance costs plus investment proceeds thereon),
over (ii) the amounts in a. reasonably required reserve fund (within the meaning of § 150(a)(3) of
the Code) with respect to such bonds, are to be used for capital expenditures; and (4) the Issuer
makes an irrevocable election to have the Build America Bonds provisions of the Code apply.
The Issuer hereby makes an irrevocable election to have the Build America Bonds provisions of
the Code apply to those Bonds issued as Build America Bonds (Direct Payment).
(ii) Reserve Fund. Except as the Pledged Account constitutes a reserve fund, the Bonds
shall have no required reserve fund.
(iii) Eligible Uses. The eligible uses of proceeds and types of financing for Build
America Bonds (Direct Payment) are limited, and the Issuer shall comply with such limitations.
In general, Build America Bonds (Direct Payment) may be issued to finance governmental
purposes for which tax - exempt governmental bonds (excluding private activity bonds) could be
issued, but the excess of available Project proceeds over amounts in a reasonably required
reserve fund may be used to finance only capital expenditures (as defined in Section 1.150 -1(b)
of the Income Tax Regulations), as contrasted with working capital expenditures. For this
purpose, an eligible financing of capital expenditures includes a reimbursement of capital
expenditures under the reimbursement rules contained in Section 1.150 -2 of the Income Tax
Regulations. Build America Bonds (Direct Payment) generally may not be issued to refinance
capital expenditures in "refunding issues" (as defined in Section 1.150 -1 of the Income Tax
Regulations). Further, for this purpose, Build America Bonds (Direct Payment) may be used to
reimburse otherwise - eligible capital expenditures under Treas. Reg. § 1.150 -2 that were paid or
incurred after the effective date of ARRA and that were financed originally with temporary
short-term financing issued after the effective date of ARRA, and such reimbursement will not
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be treated as a refunding issue.
(iv) Interest Payments. For Build America Bonds (Direct Payment) issued before
January 1, 2011, the Issuer shall be allowed a credit with respect to each interest payment under
such Bond, which shall be payable by the Secretary of the Treasury. The Department of the
Treasury shall pay (contemporaneously with each interest payment date under the Bonds) to the
Issuer (or, as appropriately directed, to any person who makes such interest payments on behalf
of the Issuer) 35 percent (35 %) of the interest payable under the Bonds on such date. The term
"interest payment date" means each date on which interest is payable by the Issuer under the
terms of Bonds. The payment by the Secretary of the Department of the Treasury is to be made
either in advance or as reimbursement. Unless and until the Issuer makes other arrangements,
the Issuer shall be solely responsible to apply for such payment or reimbursement.
(v) Refundable Credit — 35 %. The amount of refundable credit that the Issuer may
claim with respect to the Bonds is determined by multiplying the interest payment that is payable
by the Issuer on an interest payment date (i.e., the Bond coupon interest payment) by 35 percent
(35 %). Original issue discount is not treated as a payment of interest for purposes of calculating
the refundable credit.
(vi) Yield. For purposes of the arbitrage investment restrictions under Section 148 of the
Code, the yield on the Bonds is reduced by the credit allowed. Accordingly, calculation of the
yield on the Bonds for purposes of the arbitrage rules by applying the rules contained in Section
148 and the Income Tax Regulations thereunder, but shall be done by reducing the amount of
interest paid on the Bonds by the amount of the 35% credit payments to be received.
(vii) Refundable Credit Implementation Plans. The IRS and the Treasury Department
have presently devised an IRS form for requesting the Federal share of interest on the Bonds:
IRS "Form 8038 -CP, Return for Credit Payments to Issuers of Qualified Bonds." In particular,
the applicable procedures require the Issuer to submit a Form 8038 -CP to request payment of the
amount of the 35% credit within a prescribed time before or after each applicable interest
payment date. According to the Treasury Department and the IRS, the Issuer expects to receive
requested payments within 45 days of the date that a processible Form 8038 -CP is filed with the
IRS. Unless and until the Issuer makes other arrangements, the Issuer shall be solely
responsible for compliance and timely submissions.
(viii) Fixed Rate Bonds. The Bonds are "fixed rate bonds." In general, for fixed rate
bonds, upon receipt of a timely filed Form 8038 -CP requesting payment of the credit, such
amount will be paid on a contemporaneous basis by the applicable interest payment date. For
fixed rate bonds, the due date for an issuer to file a Form 8038 -CP, Return for Credit Payments
to Issuers of Qualified Bonds, is the 45th day before the applicable interest payment date with
respect to the Bonds. This return, however, may not be filed earlier than the 90th day before the
relevant interest payment date.
(ix) Future Developments and Refinements. The IRS and the Treasury Department
have advised to undertake a plan to actively pursue refining the refundable credit payment
procedures for Build America Bonds (Direct Payment) and thereafter to achieve as workable and
efficient a system as possible that is consistent with all necessary and appropriate compliance
-18-
safeguards. In this regard, the IRS and the Treasury Department have advised to under take a
plan to study the feasibility of moving these direct payment procedures to an electronic platform
similar to that used by the Bureau of Public Debt to make recurring electronic payments on U.S.
Treasury securities, such as U.S. Treasury Securities of the State and Local Government Series
("ST Gs") with which state and local governments are familiar. The IRS and the Treasury
Department expect that any development or usage of an electronic platform for these direct
payment procedures will include ongoing compliance safeguards that involve periodic
information returns on the Bonds at least annually. The Issuer shall comply with all future
developments in this connection, or otherwise that may apply.
Section 9. Form of Bonds. Notwithstanding any provision of this ordinance to
the contrary, in lieu of issuing Bonds in serial form the Bonds may be issued as a single
installment instrument in a principal amount equal to the aggregate principal amount of the
Bonds actually issued with a final maturity consistent with the last maturity in Section 3(a),
payable in annual installments equal to the principal amount scheduled to mature in each year as
set out in Section 5 (subject to adjustment in a Bond Order or other supplemental proceedings),
with an appropriate payment schedule annexed, and otherwise substantially complying with this
ordinance. The form for the Bonds set forth below shall be appropriately modified with respect
to any Bond, including as issued in installment form, the sufficiency of which shall be
conclusively approved by the delivery of nationally recognized bond counsel's ( "Bond
Counsel ") approving opinion upon issuance thereof. Bonds in serial or installment form may be
interchanged from time to time, in whole or in part.
Unless in any contract for the sale of the Bonds the purchaser or purchasers of the
Bonds shall agree to accept typewritten or temporary Bonds preliminary to the availability of
Bonds in definitive form prepared in compliance with the National Standard Specifications for
Fully Registered Municipal Securities prepared by the American National Standards Institute,
Bonds shall comply therewith, and in any event shall be in substantially the following form
[provided, however, that appropriate insertions, deletions and modifications in the form of the
Bonds may be made, including the issuance of a single Bond in installment form for each series,
as provided herein, as the Underwriter thereof agrees or accepts, in an appropriate form prepared
by bond counsel, not inconsistent herewith]:
[The remainder of this page is intentionally left blank.]
UNITED STATES OF AMERICA
STATE OF ILLINOIS
T COUNTIES OF COOK, WILL AND DUPAGE
VILLAGE OF LEMONT
[TAXABLE] GENERAL OBLIGATION WATERWORKS AND SEWERAGE BON
(ALTERNATE REVENUE SOURCE)
SERIES 2010[ ]
[(BUILD AMERICA BONDS (DIRECT PAYMENT))]
:Further Provisions:
:On Reverse Side:
REGISTERED NO, REGISTERED $
INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP:
Registered Owner:
Principal Amount:
KNOW ALL BY THESE PRESENTS that the Village of Lemont (the
"Issuer "), a non -home rule municipality situated in The Counties of Cook, Will and DuPage, in
the State of Illinois, hereby acknowledges itself indebted and for value received hereby promises
to pay to the Registered Owner identified above, or registered assigns, the Principal Amount set
forth above on the Maturity Date specified above, and to pay interest on such Principal Amount
from the Dated Date hereof, or from the most recent interest payment date to which interest has
been paid, at the Interest Rate per annum set forth above, computed on the basis of a 360 -day
year consisting of twelve 30 -day months and payable in lawful money of the United States of
America semiannually on the first (1St) day of June and December in each year, commencing
June 1, 2011, until the Principal Amount hereof shall have been paid, by check or draft mailed to
the Registered Owner of record hereof as of the close of business on the fifteenth (15th) day
(whether or not a business day) of the calendar month next preceding each interest payment date,
at the address of such Registered Owner appearing on the registration books maintained for such
purpose at the designated corporate trust office of Amalgamated Bank of Chicago, in Chicago,
Illinois, as Bond Registrar (including such officer's successors, the "Bond Registrar "). This
Bond, as to principal and premium, if any, when due, will be payable in lawful money of the
United States of America upon presentation and surrender of this Bond at the designated
payment office of Amalgamated Bank of Chicago, in Chicago, Illinois, as Paying Agent
(including its successors, the "Paying Agent "). Although it is expected, and has been certified,
that the Bonds are to be paid from the receipts derived by the Issuer from Pledged Revenues (as
defined in the hereinafter defined Bond Ordinance) derived from the [Adapt and insert, as
applicable: Issuer's of its municipally -owned combined waterworks and sewerage system (the
"System "), Interest Payments, Sales Taxes and Revenue Sharing Receipts] (as each term defined
in the hereinafter defined Bond Ordinance), which Pledged Revenues are pledged to the payment
thereof, the full faith and credit of the Issuer, including the power to levy taxes without limit as
to rate or amount, are irrevocably pledged for the punctual payment of the principal of and
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interest on this Bond and each Bond of the series of which it is a part, according to the terms
thereof.
This Bond is one of a series of Bonds issued in the aggregate principal amount of
$ , which are all of like tenor, except as to maturity, interest rate and right of
redemption, and which are authorized and issued under and pursuant to the Constitution and laws
of the State of Illinois, including the Local Government Debt Reform Act of the State of Illinois
(Section 350/1 et seq. of Chapter 30 of the Illinois Compiled Statutes, in connection with
"alternate bonds ", as supplemented and amended), Division 139 of Article 11 of the Illinois
Municipal Code (Section 5/11 -139 -1 et seq. of Chapter 65 of the Illinois Compiled Statutes, as
supplemented and amended), and pursuant to and in accordance with Ordinance No.
adopted by the President and Board of Trustees of the Issuer on , 2010, and entitled:
"AN ORDINANCE AUTHORIZING THE ISSUANCE OF TAX - EXEMPT AND /OR
TAXABLE GENERAL OBLIGATION WATERWORKS AND SEWERAGE BONDS
(ALTERNATE REVENUE SOURCE), SERIES 2010, A, B, ETC., INCLUDING AS
BUILD AMERICA BONDS (DIRECT PAYMENT), OF THE VILLAGE OF LEMONT,
COOK, WILL AND DUPAGE COUNTIES, ILLINOIS, AND OTHER BONDS,
PROVIDING THE DETAILS OF SUCH BONDS AND FOR ALTERNATE REVENUE
SOURCES AND THE LEVY OF DIRECT ANNUAL TAXES SUFFICIENT TO PAY
THE PRINCIPAL OF AND INTEREST ON SUCH BONDS, AND RELATED
MATTERS" (with respect to which undefined terms herein shall have the meanings therein, the
"Bond Ordinance "). The Bonds are issued to finance the acquisition, construction, and
installation of certain waterworks and sewerage facilities and improvements, and other related
facilities, improvements and costs, all as more fully described in the Bond Ordinance.
[Insert and adapt, as applicable: The Bonds shall not be subject to optional
redemption prior to maturity.
or
Bonds maturing on and after December 1, 20_, shall be subject to redemption
prior to maturity in whole or in part on any date on and after December 1, 20 , in any order of
maturity as specified by the Issuer (but in inverse order if none is specified), at a redemption
price of par, plus accrued interest to the date fixed for redemption.]
[Prepare, adapt and insert, as applicable: Make -whole redemption under Section
4(a)(ii) of the Bond Ordinance.]
In the event of the redemption of less than all the Bonds of like maturity, the
aggregate principal amount thereof to be redeemed shall be $5,000 or an authorized integral
multiple thereof, and the Bond Registrar shall assign to each Bond of such maturity a distinctive
number for each $5,000 principal amount of such Bond and shall select by lot from the numbers
so assigned as many numbers as, at $5,000 for each number, shall equal the principal amount of
such Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were
assigned numbers so selected; provided that only so much of the principal amount of each Bond
shall be redeemed as shall equal $5,000 for each number assigned to it and so selected.
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[Bonds maturing on December 1, 20 , 20 and 20 are Term Bonds (the
"Term Bonds ") and are subject to mandatory sinking fund redemption in the principal amount
on December 1 in each year, as follows:
Dec. 1, 20 Term Bonds Dec. 1, 20 Term Bonds Dec. 1, 20 Term Bonds
Principal Principal Principal
Year Amount($) Year Amount($) Year Amount($)
20 ,000 20 ,000 20 ,000
20 ,000 20 ,000 20 ,000
20 ,000* 20 ,000 20 ,000
20 ,000 20 ,000*
20 ,000*
* To be paid at maturity unless previously retired.]
The Issuer shall deposit with the Paying Agent an amount of money sufficient to
pay the redemption price of all the Bonds or portions of Bonds which are to be redeemed on the
redemption date, together with interest to such redemption date, prior to giving any notice of
redemption. Notice of the redemption of Bonds shall be given by first class mail not less than
thirty (30) days nor more than sixty (60) days prior to the date fixed for such redemption to the
registered owners of Bonds to be redeemed at their last addresses appearing on the registration
books therefor. The Bonds or portions thereof specified in such notice shall become due and
payable at the redemption price on the redemption date therein designated, and if, on the
redemption date, moneys for payment of the redemption price of all the Bonds or portions
thereof to be redeemed, together with interest to the redemption date, remain on deposit with the
Paying Agent, and if notice of redemption shall have been mailed as aforesaid (and
notwithstanding any defect therein or the lack of actual receipt thereof by any registered owner),
then from and after the redemption date interest on such Bonds or portions thereof shall cease to
accrue and become payable. If there shall be drawn for redemption less than all of a Bond, the
Issuer shall execute and the Bond Registrar shall authenticate and deliver, upon the surrender of
such Bond, without charge to the registered owner thereof, for the unredeemed balance of the
Bond so surrendered, Bonds of like maturity and of the denomination of $5,000 or any
authorized integral multiple thereof.
This Bond is transferable only upon the registration books therefor by the
Registered Owner hereof in person, or by such Registered Owner's attorney duly authorized in
writing, upon surrender hereof at the principal office of the Bond Registrar together with a
written instrument of transfer satisfactory to the Bond Registrar duly executed by the Registered
Owner or by such Registered Owner's duly authorized attorney, and thereupon a new registered
Bond or Bonds, in the denominations of $5,000 or any authorized integral multiple thereof and
of the same aggregate principal amount as this Bond shall be issued to the transferee in exchange
therefor. In like manner, this Bond may be exchanged for an equal aggregate principal amount
of Bonds of any authorized denomination.
The Bond Registrar shall not be required to exchange or transfer any Bond during
the period from the last day of the calendar month preceding any interest payment date to such
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interest payment date or during a period of fifteen (15) days next preceding the mailing of a
notice of redemption which could designate all or a part of any Bond for redemption. The Issuer
or the Bond Registrar may make a charge sufficient to reimburse it for any tax, fee or other
governmental charge required to be paid with respect to the transfer or exchange of this Bond.
No other charge shall be made for the privilege of making such transfer or exchange. The Issuer,
the Paying Agent and the Bond Registrar may treat and consider the person in whose name this
Bond is registered as the absolute owner hereof for the purpose of receiving payment of, or on
account of, the principal, premium, if any, and interest due hereon and for all other purposes
whatsoever, and all such payments so made to such Registered Owner or upon such Registered
Owner's order shall be valid and effectual to satisfy and discharge the liability upon this Bond to
the extent of the sum or sums so paid, and neither the Issuer nor the Paying Agent or the Bond
Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of any Bonds against any member of the
Issuer's Corporate Authorities or any officer or employee of the Issuer (past, present or future)
who executes any Bonds, or on any other basis. The Issuer may remove the Bond Registrar or
Paying Agent as provided in the Bond Ordinance.
This Bond shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been duly executed by the Bond Registrar.
[Insert, as applicable: The Issuer has designated the Bonds as "qualified tax -
exempt obligations" under Section 265(b)(3) of the Internal Revenue Code of 1986, as
amended.]
[Insert, as applicable: The Bonds are issued as Build America Bonds (Direct
Payment) under Sections 54AA and 6431 of the Internal Revenue Code of 1986, as amended.]
The Issuer, the Bond Registrar and the Paying Agent may deem and treat the registered owner
hereof as the absolute owner hereof for the purpose of receiving payment of or on account of
principal hereof and interest due hereon and for all other purposes, and the Issuer, the Bond
Registrar and the Paying Agent shall not be affected by any notice to the contrary.
It is hereby certified, recited and declared that all acts, conditions and things
required to be done, exist and be performed precedent to and in the issuance of this Bond in
order to make it a legal, valid and binding general obligation of the Issuer have been done, exist
and have been performed in regular and due time, form and manner as required by law, and that
the series of Bonds of which this Bond is one, together with all other indebtedness of the Issuer,
is within every debt or other limit prescribed by law.
IN WITNESS WHEREOF, the Village of Lemont, Cook, Will and DuPage Counties, Illinois,
has caused this Bond to be executed in its name and on its behalf by the manual or facsimile signature of
its Village President, and its corporate seal, or a facsimile thereof, to be hereunto affixed or otherwise
reproduced hereon and attested by the manual or facsimile signature of its Village Clerk, all as of the
Dated Date set forth above.
(SEAL)
Attest:
Village Clerk
VILLAGE OF LEMONT, Illinois
CERTIFICATE OF AUTHENTICATION
Dated: 1a. j 3 . 4/D
This is one of the [Taxable] General Obligation Waterworks and Sewerage Bonds
(Alternate Revenue Source), Series 2010_ [(Build America Bonds (Direct Payment))], described in the
within mentioned Bond Ordinance.
AMALGAMATED BANK OF CHICAGO, Chicago,
Illinois
By:
Its
Bond Registrar Amalgamated Bank of Chicago
and Paying Agent: Chicago, Illinois
ASSIGNMENT
For value received the undersigned sells, assigns and transfers unto
[Name, Address and Social Security Number or FEIN of Assignee]
the within Bond and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration thereof, with
full power of substitution in the premises.
Dated
Signature
Signature Guarantee:
NOTICE: The signature on 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 10. Treatment of Bonds as Debt. The Bonds are to be payable from the
Pledged Revenues and shall not constitute an indebtedness of the Issuer within the meaning of
any constitutional or statutory limitation, unless the Pledged Taxes shall have been extended
pursuant to the general obligation, full faith and credit promise supporting the Bonds, as set forth
in Section 13 hereof, in which case the amount of the Alternate Bonds then Outstanding shall be
included in the computation of indebtedness of the Issuer for purposes of all statutory provisions
or limitations until such time as an audit of the Issuer shall show that the Bonds have been paid
from the Pledged Revenues for the Alternate Bonds for a complete Fiscal Year, in accordance
with Applicable Law.
Section 11. System Fund. Upon the issuance of any of the Bonds, the System
shall continue to be operated on a Fiscal Year basis. All of the Enterprise Revenues shall be set
aside as collected and be deposited into a separate fund to be designated or continued, as the case
may be, as the Waterworks and Sewerage Fund (the "Fund "). Such Fund shall constitute a trust
fund for the purpose of carrying out the covenants, terms, and conditions of this Ordinance, and
shall be used only in paying Operation and Maintenance Expenses, providing an adequate
depreciation fund, paying the principal of and interest on all revenue bonds of the Issuer which
by their terms are payable from the Enterprise Revenues derived from the System, and providing
for the establishment of and expenditure from the respective accounts as described in this
Ordinance.
In the Fund, there shall be and there are hereby created and established, or
continued, as applicable, as appropriate, the separate accounts known as (with separate
subaccounts for each series of Bonds, as applicable): the "Operation and Maintenance
Account ", the "Senior Bond and Interest Account ", the "Senior Bond Reserve Account"
(within which may be a "Senior Debt Service Account "), the "Junior Bond and Interest
Account" (within which there shall be a "Junior Debt Service Account," with a separate
subaccount related to the Bonds, the "Junior Bond Reserve Account ", the "Depreciation
Account ", and the "Surplus Account ", to which there shall be credited on a given day of each
month as selected by the Village Treasurer of the Issuer, without any further official action or
direction, in the order in which such accounts are hereinafter mentioned, first, from Enterprise
Revenues, second, from (a) Revenue Sharing Receipts and /or (b) Revenue Sharing Receipts, to
the extent of any shortfall in the required deposits of Enterprise Revenues, to be held in such
Fund, in accordance with the following provisions (Provided the Build America Payments shall
be deposited directly to the applicable debt service account.
A. Operation and Maintenance Account
There shall be credited to the Operation and Maintenance Account an amount
sufficient, when added to the amount then on deposit in such Account, to establish a balance to
an amount not less than the amount necessary to pay Operation and Maintenance Expenses for
the System for the then current month and up to the time of the next monthly accounting for
moneys and crediting to accounts.
Expenses.
Amounts in such Account shall be used to pay such Operation and Maintenance
B. Senior Bond and Interest Account
There next shall be credited to the Senior 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 all Outstanding Senior Bonds, if any, payable from such Account and
also a fractional amount of the principal becoming due or subject to mandatory redemption on
the next succeeding principal maturity or mandatory redemption date of all of the Outstanding
Senior Bonds, if any, payable from such Account until there shall have been accumulated and
held, in cash and investments, in the Senior 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.
All moneys in such Account shall be used only for the purpose of paying interest
on and principal of such Outstanding Senior Bonds, if any.
C. Senior Bond Reserve Account
There shall next be credited to the Senior Bond Reserve Account and held, in cash
and investments or as otherwise provided, such amount or amounts at such times as may be
required in the applicable ordinance or ordinances by which Outstanding Senior Bonds are
authorized and issued.
Amounts to the credit of the Senior Bond Reserve Account shall be used to pay
principal of or interest on such Outstanding Senior Bonds of the System at any time when there
are insufficient funds available in the Senior Bond and Interest Account to pay the same as may
be provided in the applicable ordinances and shall be transferred to such Account for such
purpose.
D. Junior Bond and Interest Account
Upon issuance of the Bonds, the Issuer shall deposit or credit a sufficient amount
from funds on hand to pay first interest due, as provided in a Bond Order. Interest Payments
shall be deposited /credited directly to this Account. There next shall be credited to the Junior
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 all Outstanding Junior Bonds
(including the Outstanding Bonds) payable from such Account and also a fractional amount of
the principal becoming due or subject to mandatory redemption on the next succeeding principal
maturity or mandatory redemption date of all of the Outstanding Junior Bonds (including the
Outstanding Bonds) payable from such Account until there shall have been accumulated and
held, in cash and investments, in the Junior 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.
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In computing the fractional amount to be set aside each month in the Junior Bond
and Interest Account, the fraction shall be so computed that a sufficient amount will be set aside
in such Account and will be available for the prompt payment of such principal of and interest on
all Outstanding Junior Bonds payable from such Account and shall be not less than 1/6 of the
interest becoming due on the next succeeding interest payment date and not less than 1/12 of the
principal becoming due or subject to mandatory redemption on the next succeeding principal
payment or mandatory redemption date on all Outstanding Junior Bonds payable from such
Account until there is sufficient money in such Account to pay such principal or interest, or both.
Upon issuance of the Bonds, accrued interest from the sale of the Bonds shall be
deposited into such Account and used to pay first interest due on the Bonds.
All moneys in such Account shall be used only for the purpose of paying interest
on and principal of such Outstanding Junior Bonds. Such moneys as are sufficient to make
payments of principal of and interest on such Bonds when due, along with any fees then due,
shall be transferred to the Paying Agent not less than five (5) days prior to the pertinent principal
or interest payment date.
E. Junior Bond Reserve Account
There shall next be credited to the Junior Bond Reserve Account and held, in cash
and investments or as otherwise provided, such amount or amounts at such times as may be
required in the applicable ordinance or ordinances by which Outstanding Junior Bonds are
authorized and issued.
Amounts to the credit of the Junior Bond Reserve Account shall be used to pay
principal of or interest on the Bonds and such other Outstanding Junior Bonds as they may
secure at any time when there are insufficient funds available in the Junior Bond and Interest
Account to pay the same as may be provided in the applicable ordinances and shall be transferred
to said Account for said purpose.
F. Depreciation Account
There shall be deposited in and credited to the Depreciation Account such
amounts as the Corporate Authorities from time to time direct.
Amounts to the credit of the Depreciation Account shall be used for (i) the
payment of the costs of extraordinary maintenance, necessary repairs and replacements, or
contingencies, the payment for which no other funds are available, in order that the System may
at all times be able to render efficient service and, although it is not expected, (ii) the payment of
principal of or interest and applicable premium on any Outstanding bonds payable from the
Pledged Revenues of the System at any time when there are no other funds available for that
purpose in order to prevent a default and shall be transferred to the appropriate account or
accounts for such purpose.
Whenever an amount is withdrawn from the Depreciation Account for the
purpose stated in clause (ii) of the preceding paragraph, the Issuer shall have undertaken a rate
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study of the System by a qualified accountant, engineer or other finance professional. Each
expenditure to be made from the Depreciation Account or the purpose stated in clause (i) of the
preceding paragraph shall be made only after an approving vote of the Corporate Authorities has
certified that such expenditure is necessary to the continued effective and efficient operation of
the System.
G. Surplus Account
All moneys remaining in the Fund, after crediting the required amounts to the
respective accounts hereinabove provided for, and after making up any deficiency in the
accounts described above shall be credited each month to the Surplus Account. Funds in the
Surplus Account shall be used, first, to make up any subsequent deficiencies in any of the
Accounts hereinabove named; and then, for the remainder of all surplus revenues, at the
discretion of the Corporate Authorities, for one or more of the following purposes without any
priority among them:
1. For the purpose of constructing or acquiring repairs, replacements,
renewals, improvements or extensions to the System; or
2. For the purpose of calling and redeeming Outstanding bonds payable from
Pledged Revenues of the System which are callable at the time; or
3. For the purpose of paying principal and interest and applicable premium
on any subordinate bonds or obligations issued for the purpose of acquiring or constructing
repairs, replacements, renewals, improvements and extensions to the System; or
4. For any other lawful purpose, including the authorized purchase of
outstanding bonds payable from System revenues.
The Issuer reserves the right to reimburse the general fund from System revenues
for any Sales Taxes applied to debt service under E above.
H. Investments
Money to the credit of the funds and accounts under this Section 11 may be
invested from time to time by the Issuer's Treasurer in Qualified Investments, but as to the
Senior or Junior Debt Service Accounts, in (i) interest - bearing bonds, notes, or other direct full
faith and credit obligations of the United States of America, (ii) obligations unconditionally
guaranteed as to both principal and interest by the United States of America, or (iii) certificates
of deposit or time deposits of any bank or savings and loan association, as defined by Illinois
laws, provided such bank or savings and loan association 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 are secured by a pledge of obligations as
described in clauses (i) and (ii) above in the full principal amount of such deposits, or otherwise
collateralized in such amount and in such manner as may be required by law. Such investments
may be sold from time to time by the Issuer's Treasurer as funds may be needed for the purpose
for which such Accounts have been created. All interest on any funds so invested shall be
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credited to the applicable Account of the Fund and is hereby deemed and allocated as expended
with the next expenditure or expenditures of money from the applicable Account of the Fund.
Moneys in any of such accounts shall be invested by the Issuer's Treasurer, if necessary, in
investments restricted as to yield, which investments may be in U.S. Treasury Securities — State
and Local Government Series, if available, and to such end the Issuer's Treasurer shall refer to
any investment restrictions covenanted by the Issuer or any officer thereof as part of the
transcript of proceedings for the issuance of the Bonds, and to appropriate opinions of counsel.
I. Account Excesses
Any amounts to the credit of the Accounts in excess of the then current
requirements therefor may be transferred at any time by the Corporate Authorities to such other
Account or Accounts of the same Fund as it may in its sole discretion lawfully designate.
J. Bona Fide Debt Service Fund
Moneys preliminary to deposit in subsections B. and /or D. above and used to
abate taxes under Section 13 below, which if deposited into the Junior Bond and Interest
Account would disqualify the Junior Bond and Interest Account as a "bona fide debt service
fund" shall be held in a separate subaccount (the "Pledged Account ") of the Junior Bond and
Interest Account and the investment yield thereon yield restricted and subject to yield reduction
payments. Upon issuance of Bonds an amount, if at all, as specified in a Bond Order shall be
deposited into the Pledged Account to assure that the first payment cycle for the Bonds payable
from the Pledged Taxes can be timely abated, better assuring the continued cash flow of Pledged
Revenues for future abatements of Pledged Taxes.
Section 12. Alternate Bond Fund. There is hereby created a special fund of the
Issuer, which fund shall be held separate and apart from all other funds and accounts of the
Issuer and shall be known as the "Alternate Bond Fund" (the "Bond Fund "). The purpose of
the Bond Fund is to provide a fund to receive and disburse the pledged Sales Taxes and /or
Revenue Sharing Receipts and to receive and disburse Pledged Taxes for any of the Bonds. All
payments made with respect to the Bonds from the Enterprise Revenues shall be made directly
from the Junior Bond and Interest Account of the Fund. There are hereby created two accounts
in the Bond Fund, designated the "Sales Tax/Revenue Sharing Receipts Account" and the
"General Account ". All pledged Sales Taxes and /or Revenue Sharing Receipts as required for
the Bonds shall be deposited to the credit of the Sales Tax/Revenue Sharing Receipts Account
and all Pledged Taxes shall be deposited to the credit of the General Account. The Bond Fund
and its respective accounts constitute a trust fund established for the purpose of carrying out the
covenants, terms and conditions imposed upon the Issuer by this Ordinance.
The Sales Taxes and /or Revenue Sharing Receipts shall be paid to the Village
Treasurer of the Issuer by the officers who collect or receive the Sales Taxes and/or Revenue
Sharing Receipts. The Village Treasurer of the Issuer shall deposit the Sales Taxes and /or
Revenue Sharing Receipts to the credit of the Sales Taxes /Revenue Sharing Receipts Account of
the Bond Fund (at the times and in the amounts required by Section 14 hereof).
Any Pledged Taxes received by the Issuer shall promptly be deposited into the
General Account of the Bond Fund.
Pledged Taxes on deposit to the credit of the General Account of the Bond Fund
shall be fully spent to pay the principal of and interest and premium, if any, on the Bonds for
which such taxes were levied and collected prior to use of any moneys on deposit in the Sales
Taxes /Revenue Sharing Receipts Account of the Bond Fund or the Junior Bond and Interest
Account of the Fund.
Section 13. Levy and Extension of Taxes. The Bonds are Alternate Bonds. For
the purpose of providing the money required to pay the interest on the Bonds when and as the
same falls due and to pay and discharge the principal thereof as the same shall mature, there shall
be levied upon all the taxable property within the Issuer's corporate limits in each year while any
of the Bonds shall be outstanding, direct annual taxes in each of the levy years for each series of
Bonds, sufficient for that purpose, in addition to all other taxes, and in the amounts in each year,
as shall be specified in a Bond Order.
(a) To the extent lawful, interest or principal coming due at any time when there
shall be insufficient funds on hand from the Pledged Taxes to pay the same shall be paid
promptly when due from current funds on hand in advance of the collection of the Pledged Taxes
herein levied; and when the Pledged Taxes shall have been collected, reimbursement shall be
made to such fund or funds from which such advance was made in the amounts thus advanced.
(b) As soon as this Ordinance and any such supplementary proceedings become
effective, copies thereof, certified by the Village Clerk of the Issuer, which certificate shall recite
that this Ordinance and any such supplementary proceedings have been duly adopted, shall be
filed with each County Clerk of Cook, Will and DuPage Counties, Illinois, who is hereby
directed to ascertain the rate percent required to produce the aggregate Pledged Taxes authorized
to be levied in the years set forth above, and to extend the same for collection on the tax books in
connection with other taxes levied in each of such years, in and by the Issuer for general
corporate purposes of the Issuer, and in each of such years such Pledged Taxes shall be levied
and collected in like manner as taxes for general corporate purposes for each of such years are
levied and collected and, when collected, such Pledged Taxes shall be used solely for the
purpose of paying the principal of and interest on the Bonds herein authorized as the same
become due and payable.
(c) The Issuer covenants and agrees with the registered owners of the Bonds that
so long as any of the Bonds remain Outstanding, the Issuer will not cause the abatement of the
foregoing Pledged Taxes and otherwise will take no action or fail to take any action which in any
way would adversely affect the ability of the Issuer to levy and collect the Pledged Taxes unless
and to the extent there then shall be moneys irrevocably on deposit in the Junior Bond and
Interest Account established under Section 11 of this Ordinance or the Sales Tax/Revenue
Sharing Receipts Account, each established under Section 12 of this Ordinance. The Issuer and
its officers will comply with all present and future applicable laws in order to assure that the
Pledged Taxes will be levied, extended and collected as provided herein and deposited in the
General Account established under Section 12 of this Ordinance to pay the principal of and
interest on the Bonds. Whenever the conditions above in this paragraph have been satisfied, the
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Corporate Authorities shall duly direct the abatement of the Pledged Taxes for the year with
respect to which such Pledged Taxes have been levied to the extent of such deposit or
determination, as the case may be, and appropriate certification of such abatement shall be timely
filed with the County Clerks in connection with such abatement. If for any reason there is
abatement of such levy of Pledged Taxes and the failure thereafter to pay debt service on the
Bonds in respect of such abatement, the additional amount, together with additional interest
accruing, shall be added to the tax levy for the Pledged Taxes in the year of, or the next year
following, such failure.
(d) There is hereby created and established the "Pledged Account" as a separate
account within each applicable Debt Service Account. The Issuer from time to time may direct
the funding of the Pledged Account, before funding the applicable Debt Service Account, from
Pledged Revenues (or other available funds) therefore for the purpose of advance abatement of
Pledged Taxes as provided in this Section 13. The Pledged Account is subject to being Yield
Restricted, unless the Issuer requests and receives a written opinion of Bond Counsel otherwise.
(e) In lieu of the foregoing procedure, whenever funds from any lawful source
(including Pledged Revenues) are made available for the purpose of payment any principal of or
interest on the Bonds so as to enable the abatement of the taxes levied herein for the payment of
such principal and interest, such funds shall be initially credited to the Pledged Account, and the
Corporate Authorities shall, if at all, from time to time, by proper proceedings (i) direct the
deposit of such funds into the applicable Debt Service Account such that such Debt Service
Account has on deposit or is created with not in excess at any time of an amount constituting a
"bona fide debt service fund" under Section 1.148 -1(b) of the Income Tax Regulations, and (ii)
further shall direct or through appropriate officers certify the abatement of the taxes levied for
the applicable levy year by the amount so deposited. A certified copy of any such certificate of
abatement and of any such proceedings abating taxes shall be filed with the County Clerks of
Cook, Will and DuPage Counties, Illinois, in a timely manner to effect such abatement.
Section 14. Pledge of Sales Taxes and Revenue Sharing Receipts. For the
purpose of providing Sales Taxes and /or Revenue Sharing Receipts in each year sufficient to pay
debt service of all Outstanding Bonds for such year and the provision of not less than an
additional .25 (1.10 for Interest Payments) times such debt service on such Outstanding Bonds,
all in accordance with Section 15 of the Debt Reform Act, the Issuer hereby pledges and
dedicates, as applicable, the Sales Taxes and /or Revenue Sharing Receipts. Prior to the deadline
for the timely annual abatement of the Pledged Taxes for the Alternate Bonds, but in no event
earlier than November 30th of the year in which such Pledged Taxes are to be levied (i.e., the
year prior to extension and collection), the Village Treasurer shall deposit, as applicable, Sales
Taxes and /or Revenue Sharing Receipts into the Sales Tax/Revenue Sharing Receipts Account of
the Bond Fund in an amount necessary to provide, after deducting the amount of Enterprise
Revenues projected to be received during the period in connection with the levy of Pledged
Taxes in respect of the Alternate Bonds, for the payment of 1.25 (1.10 for Interest Payments)
times interest and principal coming due on the Alternate Bonds otherwise payable from the
proceeds of such tax levy. Upon (but in no event prior to) the deposit of such moneys, the
Corporate Authorities or the officers of the Issuer acting with proper authority shall direct the
abatement of such levy of Pledged Taxes as provided in Section 13 of this Ordinance to the
extent of such a deposit and not in excess. Any amounts of Sales Taxes and /or Revenue Sharing
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Receipts credited to the Sales Tax /Revenue Sharing Receipts Account of the Bond Fund in
excess of the then current requirements therefor may be withdrawn by the Village Treasurer at
any time and applied to any such other account or fund of the Issuer as may be authorized by the
Corporate Authorities.
Section 15. Pledged Revenues; General Covenants. The Issuer covenants and
agrees with the registered owners of the Bonds, so long as any such Bonds remain Outstanding,
as follows:
A. The Bonds are Junior Bonds, are junior to all presently outstanding bonds
payable from Pledged Revenues and junior to other bonds specified to be senior to the Bonds in
the Pledged Revenues. The Issuer pledges the Pledged Revenues to the payment of the Bonds
payable from such Enterprise Revenues as hereinabove provided, after provision for payment of
Operation and Maintenance Expenses, and required credits to accounts of the Fund having a lien
on such Enterprise Revenues prior to the lien of the Bonds, and the Corporate Authorities
covenant and agree to provide for, collect and apply Enterprise Revenues of the System, Sales
Taxes and Revenue Sharing Receipts to the payment of the Bonds as hereinabove provided and
the provision of not less than an additional .25 (.10 for Interest Payments) times debt service on
the Bonds, provided however, that the coverage factor solely from System Net Revenues shall be
at least 100% (net of Build America Payments). To the extent that such Enterprise Revenues are
not sufficient for such purposes, Sales Taxes and Revenue Sharing Receipts are likewise hereby
pledged to the payment of the Bonds and the Corporate Authorities covenant and agree to
provide for, collect and apply Sales Taxes and Revenue Sharing Receipts to the payment of the
Bonds and the provision of not less than an additional .25 (.10 for Interest Payments) times debt
service on the Bonds, all in accordance with Section 15 of the Debt Reform Act. There is no
prior lien on or pledge of Sales Taxes or Revenue Sharing Receipts superior to that of the Bonds.
The determination of the sufficiency of the Pledged Revenues pursuant to this subsection A.
shall be supported by reference to the most recent audit of the Issuer, and the reference to and
acceptance of such audit by the Corporate Authorities shall be conclusive evidence that the
conditions of Section 15 of the Debt Reform Act have been met.
Interest Payments are pledged to debt service on the Bonds as provided in Section
B. The Issuer will punctually pay or cause to be paid from the Junior Bond
and Interest Account and from the Sales Tax/Revenue Sharing Receipts Account or the General
Account of the Bond Fund the principal of and interest on the Bonds in strict conformity with the
terms of the Bonds and this Ordinance, and it will faithfully observe and perform all of the
conditions, covenants and requirements thereof and hereof.
C. The Issuer will pay and discharge, or cause to be paid and discharged,
from the Junior Bond and Interest Account, the Sales Tax/Revenue Sharing Receipts Account or
the General Account of the Bond Fund any and all lawful claims which, if unpaid, might become
a lien or charge upon the Pledged Revenues, or any part thereof, or upon any funds in the hands
of the Paying Agent, or which might impair the security of the Bonds. Nothing herein contained
shall require the Issuer to make any such payment so long as the Issuer in good faith shall contest
the validity of such claims.
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D. The Issuer will keep, or cause to be kept, proper books of record and
accounts, separate from all other records and accounts of the Issuer, in which complete and
correct entries shall be made of all transactions relating to the Project, the System, Pledged
Revenues, Build America Payments, the Fund and the Bond Fund.
E. The Issuer will preserve and protect the security of the Bonds and the
rights of the registered owners of the Bonds, and will warrant and defend their rights against all
claims and demands of all persons. From and after the sale and delivery of any of the Bonds by
the Issuer, to the extent lawful the Bonds shall be incontestable by the Issuer.
F. The Issuer will adopt, make, execute and deliver any and all such further
ordinances, resolutions, instruments and assurances as may be reasonably necessary or proper to
carry out the intention of, or to facilitate the performance of, this Ordinance, and for the better
assuring and confirming unto the owners of the Bonds of the rights and benefits in this
Ordinance.
G. As long as any of the Bonds are Outstanding, the Issuer will continue to
deposit and apply the Pledged Revenues as provided herein and, if applicable, the Pledged Taxes
to the General Account of the Bond Fund. The Issuer covenants and agrees with the purchasers
of the Bonds and with the owners thereof that so long as any of the Bonds remain Outstanding,
the Issuer will take no action or fail to take any action which in any way would adversely affect
the ability of the Issuer to levy the Pledged Taxes and to collect and to segregate the Pledged
Revenues according to this Ordinance. The Issuer and its officers will comply with all present
and future applicable laws in order to assure that the Pledged Taxes can be levied and extended
and that the Pledged Revenues and the Pledged Taxes may be collected and deposited into the
Fund and to the credit of the respective Accounts thereof and the Bond Fund, respectively, as
provided herein.
H. Scheduled debt service on the Bonds shall be and forever remain until paid
or defeased the general obligation of the Issuer, for the payment of which its full faith and credit
are pledged, and shall be payable, in addition to from the Pledged Revenues, as herein provided,
from the levy of the Pledged Taxes as provided in the Debt Reform Act.
I. The Issuer 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 State and Federal law.
J. The Issuer will establish and maintain at all times reasonable fees, charges
and rates for the use and service of the System and will provide for the collection thereof and the
segregation and application of the Enterprise Revenues in the manner provided by this
Ordinance, sufficient at all times, together with Sales Taxes and Revenue Sharing Receipts, to
pay for Operation and Maintenance Expenses, to provide an adequate depreciation fund, to pay
the principal of and interest on all revenue bonds of the Issuer which by their terms are payable
from the Enterprise Revenues thereof, according to their respective terms, including, together
with Build America Payments, coverage for the Bonds of at least 100% (net of Interest
Payments) from Net Revenues, and to provide for the creation and maintenance and funding of
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the respective accounts as provided in Section 11 of this Ordinance. It is hereby expressly
provided that the pledge and establishment of rates or charges for use of the System shall
constitute a continuing obligation of the Issuer with respect to such establishment and to the
extent lawful a continuing appropriation of the amounts received.
K. There shall be charged against all users of the System, including the
Issuer, such rates and amounts for services as shall be adequate to meet the requirements of this
Ordinance. Charges for services rendered the Issuer shall be made against the Issuer, and
payment for the same shall be made monthly from the corporate funds into the Fund hereunder
as revenues derived from the operation of such System; provided however, that the Issuer need
not charge itself for the System's services if, in the previous Fiscal Year, the Enterprise
Revenues, not including any other payments made by the Issuer, of the System shall have met
the requirements of this Ordinance.
L. Within six (6) months following the close of each Fiscal Year, the Issuer
will cause the books and accounts of the Fund and the Bond Fund to be audited by independent
certified public accountants in accordance with appropriate audit standards, which audit shall
include comments on the Issuer's compliance with this Ordinance. Such audit will be available
for inspection by the owners of any of the Bonds.
M. The Issuer 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 consulting engineer or insurance consultant
employed by the Issuer for the purpose of making such recommendations. All moneys received
for loss under such insurance policies shall be deposited in a separate subaccount of the
Depreciation 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 ninety (90) days from
the date of the loss. The payment of premiums for all insurance policies required under the
provisions of this covenant in connection with the System shall be considered an Operation and
Maintenance Expense.
N. The registered owner of any Bond may proceed by civil action to compel
performance of all duties required by law and this Ordinance, including the making and
collecting of sufficient charges and rates for the service supplied by the System and the
application of the income and revenue therefrom and of the Sales Taxes.
O. The Bonds are subject to SEC Rule 15c2 -12 concerning continuing
disclosure; but the Issuer upon request provide to the Underwriter and the owners of Bonds
copies of the most recently available audited financial statements.
Section 16. Parity Bonds; Additional Bonds.
A. Parity Bonds.
The Issuer reserves the right to issue Parity Bonds without limit provided that the
Pledged Revenues as determined or as adjusted as hereinbelow set out shall be sufficient to
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provide for or pay all of the following: (a) Operation and Maintenance Expenses of the System
(but not including depreciation); (b) debt service on all Outstanding bonds of such System
computed immediately after the issuance of the proposed Parity Bonds; (c) all amounts required
to meet any fund or account requirements with respect to such Outstanding bonds; (d) other
contractual or tort liability obligations then due and payable, if any; and (e) together with other
Pledged Powers an additional amount not less than 0.25 (0.10 for Interest Payments) times
Maximum Annual Debt Service on such of the Alternate Bonds as shall remain Outstanding
bonds after the issuance of the proposed Parity Bonds. Such sufficiency shall be calculated for
each year to the final maturity of such Alternate Bonds which shall remain Outstanding after the
issuance of the proposed Parity Bonds. The determination of the sufficiency of Pledged
Revenues shall be supported by reference to the Issuer's most recent audit, including of the
Fund, which audit shall be for a Fiscal Year ending not earlier than eighteen (18) months
previous to the time of issuance of the proposed Parity Bonds.
If such audit shows the Pledged Revenues to be insufficient, then the
determination of sufficiency may be made in either of the following two ways:
1. The Enterprise Revenues may be adjusted in the event there has been an
increase in the rates of the System from the rates in effect for the Fiscal Year of such audit (if
such rate increase is still in effect at the time of the issuance of such proposed Parity Bonds) to
show such Enterprise Revenues as they would have been if such increased rates had been in
effect during all of such Fiscal Year. Any adjusted statement of Pledged Revenues shall be
evidenced by the certificate of an independent consulting engineer, an independent certified
public accountant or an independent financial consultant employed for such purpose.
2. The determination of sufficiency of the Pledged Revenues may be
supported by the report of an independent accountant or feasibility analyst having a national
reputation for expertise in such matters, demonstrating the sufficiency of the Pledged Revenues
and explaining by what means they will be greater than as shown in the audit.
The reference to and acceptance of an audit, an adjusted statement . of the
Enterprise Revenues, or a report, as the case may be, and the determination of the Corporate
Authorities of the sufficiency of the Pledged Revenues shall be conclusive evidence that the
conditions of this Section 16. A. have been met and that the Parity Bonds are properly issued
hereunder; and no right to challenge such determination is granted to the registered owners of the
Bonds.
B. Additional Bonds.
The Issuer reserves the right to issue Additional Bonds from time to time payable
from the Enterprise Revenues and /or Sales Taxes and Revenue Sharing Receipts, and any such
Additional Bonds shall share ratably and equally in the Enterprise Revenues with the Bonds;
provided, however, that no Additional Bonds shall be issued except in accordance with the
provisions of the Debt Reform Act.
Section 17. Defeasance.
Any of the 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 Pledged Revenues
and shall no longer have the benefits of any covenant for the registered owners of Outstanding
Bonds as set forth herein as such relates to lien and security of the Bonds in the Pledged
Revenues.
Section 18. Bond Proceeds Account. The proceeds derived from the sale of the
Bonds shall be used as follows:
A. Accrued interest (and an amount of funds on hand to pay interest as
provided in a Bond Order), shall be credited to the Junior Bond and Interest Account, as set forth
above in Section 11.D., and applied to pay first interest due on the Bonds. All of the remaining
proceeds derived from the sale of the Bonds shall be deposited in the "Bond Proceeds Account
of 2010 [A, B Etc.J" (the "Bond Proceeds Account," with a separate designation for each series
of Bonds, as applicable), which is hereby established as a special account of the Issuer. The
Issuer shall then allocate from Bond proceeds, and other available funds in excess of the 2%
limit below for issuance costs for BABs, a sum necessary for expenses incurred in the issuance
of the Bonds (but not to exceed 2% of "sale proceeds" as applicable to BABs and otherwise
payable from other available funds), which shall be deposited in the Bonds Proceeds Account as
herein provided and disbursed for such issuance costs, which disbursements are hereby expressly
authorized. Moneys in the Bond Proceeds Account shall be used for the purposes specified in
Section 3 of this Ordinance (that is, as applicable, the costs of the Project) and for the payment of
costs of issuance of the Bonds, but may hereafter be reappropriated and used for other lawful
purposes in accordance with the Enterprise Revenue Act. Before any such reappropriation shall
be made, there shall be filed with the Village Clerk of the Issuer an unqualified opinion of
nationally recognized Bond counsel ( "Bond Counsel ") to the effect that such reappropriation is
authorized and will not adversely affect the tax - exempt status related to the Bonds under Section
103 of the Code, as applicable. Moneys in the Bond Proceeds Account shall be withdrawn from
time to time as needed for the payment of costs and expenses incurred or advanced by the Issuer
in connection with the Project and for paying the fees and expenses incidental thereto. Moneys
shall be withdrawn from the depositary in connection with such funds from time to time by the
Village Treasurer or other appropriate financial officer of the Issuer of the following:
A duplicate copy of the order signed by the Village President or Village
Administrator, or such other officer(s) as may from time to time be by law
authorized to sign and countersign orders of the Issuer, 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 Corporate Authorities.
Within sixty (60) days after completion of the Project, the Village President shall certify to the
Corporate Authorities the fact that the Project has been completed, and after all costs have been
paid, the Village President shall execute a certificate and file it in the records of the Issuer to the
effect that the Project has been completed and that all costs have been paid; and, if at that time
any funds remain in the Bond Proceeds Account, the same shall be applied for other
improvements to the System or transmitted by the depositary to the Village Treasurer or other
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appropriate financial officer of the Issuer, and such officer shall credit such funds to the Junior
Bond and Interest Account, as the Corporate Authorities direct. If not applied to qualifying
System improvements within 90 days of the filing of such completion certificate, the Village
Treasurer shall transfer such funds to the Junior Bond and Interest Account.
Section 19. Arbitrage Rebate. The Issuer shall comply with the provisions of
Section 148(f) of the Code, relating to the rebate of certain investment earnings at periodic
intervals to the United States of America to preserve the required exclusion from gross income
for federal income tax purposes of interest on the applicable Bonds under Section 103 of the
Code and to maintain the status of Bonds issued as BABs.
(a) Rebate. There is hereby authorized to be created a separate and special
account known as the "Rebate Account ", with a separate subaccount identified to each series of
Bonds, into which there shall be credited as necessary investment earnings to the extent required
so as to maintain the tax - exempt status of the interest on the Bonds under Section 148(0 of the
Code. All rebates, Yield Reduction Payments, special impositions or taxes for such purpose
payable to the United States of America (Internal Revenue Service) shall be payable from
applicable excess earnings or other sources which are to be deposited into the Rebate Account.
(b) Yield Reduction Payments. Yield Reduction Payments in connection with
the Pledged Account under Section 11 J. above shall be determined and paid, as the case may be,
in a manner similar to arbitrage rebate under this Section 19. Unless the Issuer shall have
requested and received an approving written opinion of Bond Counsel to the contrary, moneys
on deposit or credited to the Pledged Account shall be restricted as to yield to the yield on the
Bonds, subject to "yield reduction payments," as applicable, under Section 1.148 -5(e) of the
Income Tax Regulations, which the Issuer shall determine and, as applicable, pay in the same
manner as arbitrage rebate under (a) above.
Section 20. Investment Regulations. All investments shall be in Qualified
Investments, unless otherwise expressly herein provided, subject to any restrictions related to an
Insurer's Policy. No investment shall be made of any moneys in the Junior Bond and Interest
Account, the Bond Fund or the Bond Proceeds Account, except in accordance with the tax
covenants and other covenants set forth in Section 21 of this Ordinance. All income derived
from such investments in respect of moneys or securities in any fund or account, unless
otherwise herein expressly required, shall be credited in each case to the fund or account in
which such moneys or securities are held.
Any moneys in any fund or account that are subject to investment yield
restrictions may be invested in United States Treasury Securities, State and Local Government
Series, pursuant to the regulations of the United States Treasury Department, Bureau of Public
Debt. The Issuer's Treasurer and agents designated by such officer are hereby authorized to
submit on behalf of the Issuer subscriptions for such United States Treasury Securities and to
request redemption of such United States Treasury Securities.
Yield for BABs will be determined taking into account the 35% credit payments
with respect to Build America Bonds (Direct Payment).
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Section 21. Non - Arbitrage and Tax - Exemption. One purpose of this Section
21 is to set forth various facts regarding the Bonds and to establish the expectations of the
Corporate Authorities and the Issuer as to future events regarding the Bonds and the use of the
proceeds of the Bonds. The certifications and representations made herein and at the time of the
issuance of the Bonds are intended, and may be relied upon, as certifications and expectations
described in Section 1.148 -0 et seq. of the Income Tax Regulations dealing with arbitrage and
rebate (the "Regulations "). The covenants and agreements contained herein and at the time of
the issuance of the Bonds are made for the benefit of the registered owners from time to time of
the Bonds. The Corporate Authorities and the Issuer agree, certify, covenant and represent as
follows (Provided that in this Section 21 "Bonds" means BABs or tax - exempt Bonds.):
A. The Bonds are being issued to pay the costs of the Project and related
costs and expenses, incurred after 60 days before November 8, 2010, up to an amount of other
Project costs not exceeding the lesser of $100,000 or 5% of applicable Bond proceeds and an
amount of preliminary engineering costs not exceeding 20% of Bond proceeds, and all of the
amounts received upon the sale of the Bonds, plus all investment earnings thereon (the
"Proceeds ") are needed for the purpose for which the Bonds are being issued.
B. The Issuer has entered into, or will within six months from the date of
issue of the Bonds enter into, binding contracts or commitments obligating it to spend at least 5%
of the proceeds of the Bonds for constructing, acquiring and installing the Project. It is expected
that the work of acquiring, constructing and installing the Project will continue to proceed with
due diligence to completion reasonably expected to be within 2 years of issuance of the Bonds,
but in any event within 3 years, at which time all of the Proceeds will have been spent.
C. The Issuer has on hand no funds which could legally and practically be
used for the Project which are not pledged, budgeted, earmarked or otherwise necessary to be
used for other purposes. Accordingly, no portion of the Proceeds will be used (i) directly or
indirectly to replace funds of the Issuer or any agency, department or division thereof that could
be used for the Project, or (ii) to replace any proceeds of any prior issuance of obligations by the
Issuer. No portion of the Bonds is being issued solely for the purpose of investing the Proceeds
at a Yield higher than the Yield on the Bonds. For purposes of this Section, "Yield" means that
yield (that is, the discount rate) which when used in computing the present worth of all payments
of principal and interest to be paid on an obligation (using semi - annual compounding on the
basis of a 360 -day year) produces an amount equal to the purchase price of the Bonds, including
accrued interest, and the purchase price of the Bonds is equal to the first offering price at which
more than 10% of the principal amount of each maturity of the Bonds is sold to the public
(excluding bond houses, brokers or similar persons or organizations acting in the capacity of
underwriters or wholesalers).
D. All net principal proceeds of the Bonds received by the Issuer will be
deposited in the Bond Proceeds Account and used to pay costs of the Project (solely as capital
expenditures with respect to BABs) and costs of issuance of the Bonds, and any accrued interest
and premium received on the delivery of the Bonds will be deposited in the Junior Bond and
Interest Account and used to pay the first interest due on the Bonds. Other Project costs,
including issuance costs of the Bonds, will be paid directly from other proceeds available to the
Issuer or from the Bond Proceeds Account, subject to the 2% limit on issuance costs for BABs,
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and no other moneys are expected to be deposited in the Bond Proceeds Account. This
ordinance provides that moneys in the Depreciation Account may be applied to pay debt service
on the Bonds in the event there shall be an insufficiency in the Junior Bond and Interest Account.
However, due to the expected application of such moneys to pay costs of replacement, repair and
extraordinary maintenance of System facilities, it is unlikely such moneys will be available for
such purpose. Interest on and principal of the Bonds will be paid from the Junior Bond and
Interest Account and the Bond Fund. No Proceeds will be used more than thirty (30) days after
the date of issue of the Bonds for the purpose of paying any principal of or interest on any issue
of bonds, notes, certificates or warrants or on any installment contract or other obligation of the
Issuer or for the purpose of replacing any funds of the Issuer used for such purpose.
E. The Junior Bond and Interest Account and the Bond Fund, but excluding
the Pledged Account, each is established to achieve a proper matching of revenues and earnings
with debt service in each year. Other than any amounts held to pay principal of matured Bonds
that have not been presented for payment, it is expected that any moneys deposited in the Junior
Bond and Interest Account and the Bond Fund, but excluding the Pledged Account, will be spent
within the 12 -month period beginning on the date of deposit therein. Any earnings from the
investment of amounts in the Junior Bond and Interest Account and the Bond Fund, but
excluding the Pledged Account, will be spent within a one -year period beginning on the date of
receipt of such investment earnings. Other than any amounts held to pay principal of matured
Bonds that have not been presented for payment, it is expected that the Junior Bond and Interest
Account and the Bond Fund, but excluding the Pledged Account, will be depleted at least once a
year, except for a reasonable carryover amount not to exceed the greater of (i) one - year's
earnings on the investment of moneys in the Junior Bond and Interest Account and the Bond
Fund, but excluding the Pledged Account, or (ii) in the aggregate one - twelfth (1 /12th) of the
annual debt service on the Bonds.
F. Other than the Junior Bond and Interest Account (including the Pledged
Account) and the Bond Fund, no funds or accounts have been or are expected to be established,
and no moneys or property have been or are expected to be pledged (no matter where held or the
source thereof) which will be available to pay, directly or indirectly, the Bonds or restricted so as
to give reasonable assurance of their availability for such purposes. No property of any kind is
pledged to secure, or is available to pay, obligations of the Issuer to any credit enhancer or
liquidity provider.
G. (i) All amounts on deposit in the Bond Proceeds Account, the Junior Bond
and Interest Account, the Bond Fund or the Depreciation Account and all Proceeds, no matter in
what funds or accounts deposited ( "Gross Proceeds "), to the extent not exempted in (ii) below,
and all amounts in any fund or account pledged directly or indirectly to the payment of the
Bonds which will be available to pay, directly or indirectly, the Bonds or restricted so as to give
reasonable assurance of their availability for such purpose contrary to the expectations set forth
in (f) above, shall be invested at market prices and at a Yield not in excess of the Yield on the
Bonds plus, for amounts in the Bond Proceeds Account after 3 years under (c) below from the
date of issuance to finance System improvements, 1/8 of 1 %.
(ii) The following may be invested without Yield restriction:
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and
(a) amounts invested in obligations described in Section 103(a)
of the Code (but not specified private activity bonds as defined in Section 57(a)(5)(C) of
the Code), the interest on which is not includable in the gross income of any registered
owner thereof for federal income tax purposes ( "Tax- Exempt Obligations ");
(b) amounts deposited in the Junior Bond and Interest Account
and the Bond Fund that are reasonably expected to be expended within thirteen (13)
months from the deposit date and have not been on deposit therein for more than thirteen
(13) months;
(c) amounts, if any, in the Bond Proceeds Account to be
applied to System improvements prior to the earlier of completion (or abandonment) of
such improvements or three (3) years from the date of issue of the Bonds;
(d) an amount not to exceed the lesser of 5% or $100,000 of
Bond proceeds;
(e) all amounts for the first thirty (30) days after they become
Gross Proceeds (e.g., the date of deposit in any fund or account securing the Bonds);
(f) all amounts for Project costs for a 3 -year temporary period;
(g) all amounts derived from the investment of the Proceeds
for a period of one (1) year from the date received.
H. Subject to P. below, once moneys are subject to the Yield limits of G(i)
above, such moneys remain Yield restricted until they cease to be Gross Proceeds.
I. None of the Proceeds will be used, directly or indirectly, to replace funds
which were used in any business carried on by any person other than a state or local
governmental unit.
J. The payment of the principal of or the interest on the Bonds will not be,
directly or indirectly (a) secured by any interest in (i) property used or to be used for a private
business use by any person other than a state or local governmental unit, or (ii) payments in
respect of such property, or (b) derived from payments (whether or not by or to the Issuer), in
respect of property, or borrowed money, used or to be used for a private business use by any
person other than a state or local governmental unit.
K. None of the Proceeds will be used, directly or indirectly, to make or
finance loans to persons other than a state or local governmental unit.
L. No user of the Project, other than a state or local government unit will use
the Project 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 the Project as a result of (i) ownership, or (ii)
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actual or beneficial use pursuant to a lease or a management or incentive payment contract, or
(iii) any other similar arrangement.
M. Beginning on the fifteenth (15th) day prior to the Bond sale date, the
Issuer has not sold or delivered, and will not sell or deliver, (nor will it deliver within fifteen (15)
days after the date of issuance of the Bonds) any other obligations pursuant to a common plan of
financing, which will be paid out of substantially the same source of funds (or which will have
substantially the same claim to be paid out of substantially the same source of funds) as the
Bonds or will be paid directly or indirectly from Proceeds.
N. No portion of the Project is expected to be sold or otherwise disposed of
prior to the last maturity of the Bonds.
O. The Issuer has not been notified of any disqualification or proposed
disqualification of it by the Internal Revenue Service as a bond issuer which may certify bond
issues under the Regulations.
P. The Yield restrictions contained in G. above or any other restriction or
covenant contained herein need not be observed and may be changed if the Issuer receives an
opinion of Bond Counsel to the effect that such non - observance or change will not adversely
affect the tax- exempt status of interest on the Bonds to which the Bonds otherwise are entitled.
Q. The Issuer acknowledges that any changes in facts or expectations from
those set forth herein may result in different Yield restrictions or rebate requirements from those
set forth herein and that Bond Counsel should be contacted if such changes do occur.
R. The Corporate Authorities have no reason to believe the facts, estimates,
circumstances and expectations set forth herein are untrue or incomplete in any material respect.
On the basis of such facts, estimates, circumstances and expectations, it is not expected that the
Proceeds or any other moneys or property will be used in a manner that will cause the Bonds to
be private activity bonds, arbitrage bonds or hedge bonds within the meaning of Sections 141,
148 or 149(g) of the Code, and of applicable regulations. To the best of the knowledge and
belief of the Corporate Authorities, such expectations are reasonable, and there are no other
facts, estimates and circumstances that would materially change such expectations.
S. The Issuer also agrees and covenants with the registered owners of the
Bonds from time to time outstanding that, to the extent possible under Illinois law, it will comply
with all present federal tax law and related regulations and with whatever federal tax law is
adopted and regulations promulgated in the future which apply to the Bonds and affect the tax -
exempt status of tax - exempt Bonds. To not at all times outstanding qualify, as applicable, to be,
as applicable: (i) tax - exempt for other than BABs or otherwise (ii) Build America Bonds, or to
be hedge bonds, arbitrage bonds or private activity bonds within the meaning of Sections 149(g),
148 or 141 of the Code. To the best of the knowledge and belief of the Corporate Authorities,
such expectations are reasonable, and there are no other facts, estimates and circumstances that
would materially change such expectations.
Section 22. Further Assurances and Actions. The Corporate Authorities
hereby authorize the officials of the Issuer responsible for issuing the Bonds, the same being the
Village President, Village Administrator, Village Clerk and Village Treasurer of the Issuer, to
execute and perform the Purchase Agreement and to make such further filings, covenants,
certifications and supplemental agreements as may be necessary to assure that the use of the
Project and related proceeds will not cause Bonds to be private activity bonds, arbitrage bonds or
hedge bonds and to assure, as to tax - exempt Bonds, that the interest on the Bonds will be
excluded from gross income for federal income tax purposes. In connection therewith, the Issuer
and the Corporate Authorities further agree: (a) through the officers of the Issuer, to make such
further specific covenants, representations as shall be true, correct and complete, and assurances
as may be necessary or advisable; (b) to consult with Bond Counsel approving the Bonds and to
comply with such advice as may be given; (c) to pay to the United States, as necessary, such
sums of money representing required rebates of excess arbitrage profits or yield reduction
payments 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, to employ and
pay fiscal agents, financial advisors, attorneys, and other persons to assist the Issuer in such
compliance; and (f) to abate Pledged Taxes, as herein authorized. Appropriate officers of the
Issuer are authorized to file abatement certifications not inconsistent with and only as authorized
by this Ordinance.
Each Official Statement is approved and is hereby authorized to be used by the
Underwriter in the placement and sale of Bonds. Each Bond Purchase Agreement Disclosure
Agreement, in forms typical to the transactions contemplated by this resolution, as the officers of
the Issuer executing them shall approve, which approval shall constitute the approval of the
Corporate Authorities, shall be and are hereby authorized and approved for execution, delivery
and performance. The Issuer covenants that it shall do, execute, acknowledge and deliver, or
cause to be done, executed, acknowledged and delivered, such resolutions and other actions
supplemental hereto, and such further acts, agreements, instruments and transfers as may be
reasonably required for the authorized abatement of Pledged Taxes to pay Bonds, the better
assuring, transferring, conveying, pledging, assigning and confirming unto the registered owners
of the Bonds its interest in the funds pledged hereby to the payment of the principal of, premium,
if any, and interest on Bonds, the application of Bond proceeds, all as herein provided, and with
respect to Bonds as tax - exempt and /or taxable BABs. Taxable non -BABs are authorized under
this Ordinance.
As applicable, each Purchase Agreement, Arbitrage Regulation Agreement,
Disclosure Agreement, with respect to each series of Bonds shall be and is hereby approved and
is authorized to be prepared, delivered and given effect.
The Bonds are of one or more issues to which the continuing disclosure
provisions of Rule 15c2 -12 do not apply, but the Issuer upon request will provide the
Underwriter and the owner of any Bonds a copy of the most recently audited financial
statements.
All things done with respect to each Purchase Agreement, Disclosure Agreement
and Arbitrage Regulation Agreement by the Issuer's Village President, Village Administrator,
Village Clerk, Village Treasurer or Village Attorney, in connection with the issuance and sale of
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Bonds shall be and are hereby in all respects ratified, confirmed and approved. The Village
President, Village Administrator, Village Clerk, Village Treasurer, Village Attorney and other
officials of the Issuer are hereby authorized and directed to do and perform, or cause to be done
or performed for or on behalf of the Issuer, each and every thing necessary, as applicable, for the
issuance of Bonds, including the proper execution, delivery and performance of each applicable
Purchase Agreement, Arbitrage Regulation Agreement and related instruments and certificates,
by the Issuer, the purchase by and delivery of Bonds to or at the direction of the applicable.
No elected or appointed officer of the Issuer is in any manner interested, directly
or indirectly, in his or her own name or in the name of any other person, association, trust or
corporation in any Purchase Agreement.
Section 23. Ordinance to Constitute a Contract. The provisions of this
Ordinance shall constitute a contract between the Issuer and the registered owners of Bonds.
Any pledge made in this Ordinance and the provisions, covenants and agreements herein set
forth to be performed by or on behalf of the Issuer shall be for the equal benefit, protection and
security of the registered owners of any and all of the Bonds. All of the Bonds, regardless of the
time or times of their issuance, shall be of equal rank without preference, priority or distinction
of any of the Bonds over any other thereof except as expressly provided in or pursuant to this
Ordinance. This ordinance and the Preliminary Ordinance, together with any ordinance
supplemental hereto, shall constitute full authority for the issuance of the Bonds, and to the
extent that the provisions thereof conflict with the provisions of any other ordinance or resolution
of the Issuer, the provisions of this Ordinance and the Preliminary Ordinance, together with any
ordinance supplemental hereto, shall control.
Section 24. Severability and No Contest. If any section, paragraph or provision
of this Ordinance shall be held to be invalid or unenforceable for any reason, the invalidity or
unenforceability of such section, paragraph or provision shall not affect any of the remaining
provisions of this Ordinance. Upon the issuance of the Bonds, neither the Bonds nor this
Ordinance shall be subject to contest by or in respect of the Issuer.
Section 25. Bank Qualified Bonds. Pursuant to Section 265(b)(3) of the Code,
the Issuer intends to designate any tax - exempt Bonds (but expressly not Build America Bonds or
other taxable Bonds) as "qualified tax - exempt obligations" as defined in Section 265(b)(3) of
the Code. The Issuer represents that the reasonably anticipated amount of tax - exempt
obligations that will be issued by the Issuer and all subordinate entities of the Issuer during the
calendar year in which the Bonds are issued will not exceed $30,000,000 in 2010 within the
meaning of Section 265(b)(3) of the Code. The Issuer covenants that it will not so designate and
issue more than $30,000,000 in 2010 aggregate principal amount of tax - exempt obligations in
such calendar year. For purposes of this Section, the term "tax- exempt obligations" includes
"qualified 501(c)(3) Bonds" (as defined in the Section 145 of the Code) but does not include
other "private activity bonds" (as defined in Section 141 of the Code).
Section 26. Conflict. All ordinances, resolutions or parts thereof in conflict
herewith be and the same are hereby superseded to the extent of such conflict and this Ordinance
shall be in full force and effect forthwith upon its adoption.
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Section 27. Effective Date. This ordinance shall become effective immediately
upon its passage and approval in the manner provided by law, and, upon its becoming effective
and prior to the issuance of the Bonds, a certified copy of this Ordinance, together with each
applicable Bond Order, shall be filed with the County Clerks of Cook, Will and DuPage
Counties, Illinois.
Upon motion by Trustee Stapleton , seconded by
Trustee Sniegowski , adopted this 13 day of December , 2010, by
roll call vote as follows:
Ayes (Names):
Nays (Names):
Absent (Names):
(SEAL)
ATTEST:
Blatzer, Chialdikas, Miklos, Sniegowski, Stapleton
Virgilio
APPROVED: December 13 2010
-Village Presid
Closing Item 1(a)
STATE OF ILLINOIS )
COUNTY OF COOK ) SS
VILLAGE OF LEMONT )
CERTIFICATION OF ORDINANCE
I, the undersigned, do hereby certify that I am the duly selected, qualified and acting
Village Clerk of the Village of Lemont, Cook, Will and DuPage Counties, Illinois (the "Issuer "),
and as such official I am the keeper of the records and files of the Issuer and of its President and
Board of Trustees (the "Corporate Authorities ").
I do further certify that the attached constitutes a full, true and complete excerpt from
the proceedings of a meeting of the Corporate Authorities held on the 13 day of December2010,
insofar as the same relates to the adoption of Ordinance No. 0- 103 -10, entitled:
AN ORDINANCE AUTHORIZING THE ISSUANCE OF TAX- EXEMPT
AND /OR TAXABLE GENERAL OBLIGATION WATERWORKS AND
SEWERAGE BONDS (ALTERNATE REVENUE SOURCE), SERIES 2010,
A, B, ETC., INCLUDING AS BUILD AMERICA BONDS (DIRECT
PAYMENT), OF THE VILLAGE OF LEMONT, COOK, WILL AND
DUPAGE COUNTIES, ILLINOIS, AND OTHER BONDS, PROVIDING
THE DETAILS OF SUCH BONDS AND FOR ALTERNATE REVENUE
SOURCES AND THE LEVY OF DIRECT ANNUAL TAXES SUFFICIENT
TO PAY THE PRINCIPAL OF AND INTEREST ON SUCH BONDS, AND
RELATED MATTERS,
a true, correct and complete copy of which ordinance (the "Ordinance ") as adopted at such meeting
appears in the transcript of the minutes of such meeting and is hereto attached. The Ordinance was
adopted and approved by the vote and on the date therein set forth.
I do further certify that the deliberations of the Corporate Authorities on the adoption
of such Ordinance were taken openly, that the adoption of such Ordinance was duly moved and
seconded, that the vote on the adoption of such Ordinance was taken openly and was preceded by a
public recital of the nature of the matter being considered and such other information as would
inform the public of the business being conducted, that such meeting was held at a specified time and
place convenient to the public, that notice of such meeting was duly given to all of the news media
requesting such notice, that the agenda for the meeting was duly posted at the Village Hall at least 48
hours prior to the meeting, that such meeting was called and held in strict compliance with the
provisions of the open meeting laws of the State of Illinois, as amended, and the Illinois Municipal
Code, as amended, and that the Corporate Authorities have complied with all of the applicable
provisions of such open meeting laws and such Code and their procedural rules in the adoption of
such Ordinance.
IN WITNESS WHEREOF, I hereunto affix my official signature and the seal of the
Village of Lemont, Cook, Will and DuPage Counties, Illinois, this 13 day of December
2010.
(SEAL) Village Clerk