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TO: Mayor Richard C Irvin
FROM: Christopher A Minick, Chief Financial Officer/City Treasurer
DATE: April 14, 2022
SUBJECT:
An Ordinance providing for the issuance of not to exceed $56,000,000 General Obligation Bonds, Series 2022, of the City of Aurora, Kane, DuPage, Kendall and Will Counties, Illinois, for the purpose of financing capital improvements in and for said City and refinancing certain outstanding obligations of said City, providing for the levy of a direct annual tax sufficient to pay the principal of and interest on said bonds, and authorizing the proposed sale of said bonds to the purchaser thereof.
PURPOSE:
To obtain the approval of the City Council of a proposed ordinance providing for the issuance of the Series 2022 General Obligation Bonds.
BACKGROUND:
The 2022-2031 Capital Improvements Plan and 2022 City Budget call for the procurement of a ladder truck and financing of various capital and economic development projects through the issuance of General Obligation Bonds of the City. The major projects include preliminary costs for the construction of the Public Works Facility as well as the relocation of Fire Station 4 as well as various improvement and remodeling projects.
In addition, the City anticipates refunding bonds issued in 2012 and 2013 for the Library (now the library District) to take advantage of lower interest rates which will lower debt service costs.
DISCUSSION:
We intend to sell the 2022 GO Bonds the week of May 9, 2022 to provide resources for the aforementioned projects.
Attached is a draft bond ordinance. The final bond ordinance will be prepared after the bonds are sold and the exact interest costs are known.
IMPACT STATEMENT:
Adoption of the Ordinance will allow for the financing and timely construction of various capital improvements and projects.
RECOMMENDATIONS:
That the City Council approve the attached, proposed ordinance that would authorize the issuance of the city’s 2022 GO Bonds.
cc: Finance Committee
CITY OF AURORA, ILLINOIS
ORDINANCE NO. _________
DATE OF PASSAGE ________________
title
An Ordinance providing for the issuance of not to exceed $56,000,000 General Obligation Bonds, Series 2022, of the City of Aurora, Kane, DuPage, Kendall and Will Counties, Illinois, for the purpose of financing capital improvements in and for said City and refinancing certain outstanding obligations of said City, providing for the levy of a direct annual tax sufficient to pay the principal of and interest on said bonds, and authorizing the proposed sale of said bonds to the purchaser thereof.
body
WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, pursuant to the provisions of Section 6 of Article VII of the Constitution of the State of Illinois, the City has the power to incur debt payable from ad valorem property tax receipts or from any other lawful source and maturing within forty (40) years from the time it is incurred without prior referendum approval; and
WHEREAS, the City Council of the City (the “City Council”) has considered the needs of the City and does hereby determine that it is necessary, desirable and in the best interests of the City to borrow at this time to finance capital projects in and for the City, including riverwalk, road and parking projects, combined maintenance facility, fire station and City Hall improvement projects and residential and commercial redevelopment projects, together with such engineering, electrical, financial, legal and other professional services related thereto as may be advisable and necessary (collectively, the “Project”); and
WHEREAS, the City has heretofore issued and has outstanding General Obligation Library Bonds, Series 2012A (the “2012A Bonds”), General Obligation Refunding Bonds, Series 2012B (the “2012B Bonds”), and General Obligation Refunding Bonds, Series 2013 (the “2013 Bonds” and, together with the 2012A Bonds and the 2012B Bonds, the “Prior Bonds”); and
WHEREAS, the City Council does hereby further determine that it is necessary, desirable and in the best interests of the City to borrow at this time to refund all or a portion of the Prior Bonds (said Prior Bonds to be refunded being referred to herein as the “Refunded Bonds”) in order to realize debt service savings for the City; and
WHEREAS, the Refunded Bonds shall be fully described in the Escrow Agreement referred to in Section 13 hereof or in the Bond Notification (as hereinafter defined) and are presently outstanding and unpaid and are binding and subsisting legal obligations of the City; and
WHEREAS, in accordance with the terms of the Refunded Bonds, the Refunded Bonds may be called for redemption in advance of their maturity, and the City does hereby further determine that it is necessary and desirable to make such call for the redemption of the Refunded Bonds on their earliest possible call date, and provide for the giving of proper notice to the registered owners of the Refunded Bonds; and
WHEREAS, on the 28th day of August, 1973, the City Council did adopt Ordinance Number 4340 determining the procedures to be followed in the borrowing of money for public purposes of the City and in evidence of such borrowing for the issuing of full faith and credit bonds of the City without referendum approval, such ordinance being entitled:
An Ordinance of the City of Aurora, Illinois, establishing procedures to be followed in incurring indebtedness for corporate purposes, issuing nonreferendum bonds to evidence such indebtedness and authorizing and directing the levying of a tax, without limit as to rate or amount, for the purpose of paying principal and interest on such bonds as the same become due.
which ordinance was amended by Ordinance No. 085-5353, duly adopted by the City Council on March 19, 1985 (Ordinance No. 4340 as so amended, which is also known as Section 2-319 of Division 1 of Article V of Chapter 2 of the Code of Ordinances of the City, being referred to hereinafter as the “Enabling Ordinance”); and
WHEREAS, the City Council does hereby further determine that, in order to pay the costs of the Project, it is necessary, desirable and in the best interests of the City to borrow not to exceed $30,500,000 at this time and, in evidence of such borrowing, issue full faith and credit bonds of the City in the aggregate principal amount of not to exceed $30,500,000 (the “Project Bonds”); and
WHEREAS, the City Council does hereby further determine that, in order to refund the Refunded Bonds, it is necessary, desirable and in the best interests of the City to borrow not to exceed $25,500,000 at this time and, in evidence of such borrowing, issue full faith and credit bonds of the City in the aggregate principal amount of not to exceed $25,500,000 (the Refunding Bonds”):)
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Aurora, Illinois, as follows:
Section 1. Incorporation of Preambles. The City Council hereby finds that all of the recitals contained in the preambles to this Ordinance are true, correct and complete and does incorporate them into this Ordinance by this reference.
Section 2. Determination to Issue Bonds. The City Council hereby determines that it is necessary, desirable and in the best interests of the City to pay the costs of the Project, refund the Refunded Bonds and pay all related costs and expenses incidental thereto, and to borrow money and issue the Project Bonds and the Refunding Bonds, in one or more series, for such purposes. The City Council hereby finds and determines that such borrowing of money is necessary for the welfare of the government and affairs of the City, is for proper public purposes and is in the public interest, and these findings and determinations shall be deemed conclusive.
Section 3. Bond Details. There be borrowed by for and on behalf of the City an amount not to exceed $56,000,000 for the purposes aforesaid, and that bonds of the City (the “Bonds”) shall be issued to said amount, in one or more series. The Bonds may be issued as (i) tax-exempt bonds, such that the status of interest paid and received thereon is excludable from gross income of the owners thereof for federal income tax purposes (the “Tax-Exempt Bonds”), (ii) taxable bonds, such that the status of interest paid and received thereon is includible in gross income of the owners thereof for federal income tax purposes (the “Taxable Bonds”), or (iii) a combination of Tax-Exempt and Taxable Bonds, all as set forth in the Bond Notification. The Bond Notification shall also include an allocation of each series of Bonds between Project Bonds and Refunding Bonds.
The Bonds, if issued, shall each be designated “General Obligation Bonds, Series 2022” or such other name or names or with such other series designation as may be appropriate and set forth in the Bond Notification. The Bonds, if issued, shall be dated the date of delivery thereof, shall also bear the date of authentication, shall be in fully registered form, shall be in denominations of $5,000 each or authorized integral multiples thereof (unless otherwise stated in the Bond Notification) (but no single Bond shall represent installments of principal maturing on more than one date), and shall be numbered 1 and upward. The Bonds, if issued, shall become due and payable serially or be subject to mandatory redemption (subject to optional redemption prior to maturity as hereinafter described) on December 30 of each of the years (not later than 2042), in the amounts (not exceeding $4,000,000 per year) and bearing interest at the rates per annum (not exceeding 6.00% per annum) as set forth in the Bond Notification.
The Bonds shall bear interest from their date or from the most recent interest payment date to which interest has been paid or duly provided for, until the principal amount of the Bonds is paid, such interest (computed upon the basis of a 360-day year of twelve 30-day months) being payable semi-annually, commencing with the first interest payment date as set forth in the Bond Notification, and on June 30 and December 30 of each year thereafter to maturity.
Interest on each Bond shall be paid by check or draft of the bond registrar and paying agent (which shall be a bank or trust company with an office located in the State of Illinois) set forth in the Bond Notification (the “Bond Registrar”), payable upon presentation in lawful money of the United States of America, to the person in whose name such Bond is registered at the close of business on the 15th day of the interest payment date, or as otherwise agreed to by the City and The Depository Trust Company, New York, New York, and its successors and assigns (“DTC”), so long as the Bonds remain in book-entry only form as hereinafter provided. The principal of the Bonds shall be payable in lawful money of the United States of America at the principal corporate trust office of the Bond Registrar.
Section 4. Execution; Authentication. The Bonds shall be executed on behalf of the City by the manual or facsimile signature of the Mayor of the City (the “Mayor”) and attested by the manual or facsimile signature of the City Clerk of the City (the “City Clerk”), as they may determine, and shall have impressed or imprinted thereon the corporate seal or facsimile thereof of the City. In case any such officer whose signature shall appear on any Bond shall cease to be such officer before the delivery of such Bond, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery.
All Bonds shall have thereon a certificate of authentication, substantially in the form hereinafter set forth, duly executed by the Bond Registrar as authenticating agent of the City and showing the date of authentication. No Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this Ordinance unless and until such certificate of authentication shall have been duly executed by the Bond Registrar by manual signature, and such certificate of authentication upon any such Bond shall be conclusive evidence that such Bond has been authenticated and delivered under this Ordinance. The certificate of authentication on any Bond shall be deemed to have been executed by 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 5. Registration of Bonds; Persons Treated as Owners. (a) General. The City shall cause books (the “Bond Register”) for the registration and for the transfer of the Bonds as provided in this Ordinance to be kept at the principal corporate trust office of the Bond Registrar, which is hereby constituted and appointed the registrar of the City for the Bonds. The City is authorized to prepare, and the Bond Registrar shall keep custody of, multiple Bond blanks executed by the City for use in the transfer and exchange of Bonds.
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 his or her attorney duly authorized in writing, the City shall execute and the Bond Registrar shall authenticate, date and deliver in the name of the transferee or transferees 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 said 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 City of any fully registered Bond shall constitute full and due authorization of such Bond and the Bond Registrar shall thereby be authorized to authenticate, date and deliver such Bond, provided, however, the principal amount of outstanding Bonds of each series and maturity authenticated by the Bond Registrar shall not exceed the authorized principal amount of Bonds for such series and maturity less previous retirements.
The Bond Registrar shall not be required to transfer or exchange any Bond during the period beginning at the close of business on the 15th day of the month of any interest payment date on such Bond and ending at the opening of business on such interest payment date, nor to transfer or exchange any Bond after notice calling such Bond for redemption has been mailed, nor during a period of fifteen (15) days next preceding mailing of a notice of 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 or interest on any Bond shall be made only to or upon the order of the registered owner thereof or his or her legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid.
No service charge shall be made for any transfer or exchange of Bonds, but the City or the Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Bonds, except in the case of the issuance of a Bond or Bonds for the unredeemed portion of a Bond surrendered for redemption.
(b) Global Book-Entry System. The Bonds shall be initially issued in the form of a separate single fully registered Bond for each of the series and maturities of the Bonds determined as described in Section 3 hereof. If requested by a Purchaser (as defined herein) of any series of Bonds, upon initial issuance, the ownership of such series of Bonds may be registered in the Bond Register in the name of Cede & Co., or any successor thereto (“Cede”), as nominee of DTC. The Mayor, City Clerk, City Treasurer, Chief Financial Officer and the Bond Registrar are each authorized to execute and deliver, on behalf of the City, such letters to or agreements with DTC as shall be necessary to effectuate such book-entry system (any such letter or agreement being referred to herein as the “Representation Letter”), which Representation Letter may provide for the payment of principal of or interest on such Bonds by wire transfer.
With respect to Bonds registered in the Bond Register in the name of Cede, as nominee of DTC, the City and the Bond Registrar shall have no responsibility or obligation to any broker-dealer, bank or other financial institution for which DTC holds Bonds from time to time as securities depository (each such broker-dealer, bank or other financial institution being referred to herein as a “DTC Participant”) or to any person on behalf of whom such a DTC Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Bond Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant or any other person, other than a registered owner of a Bond as shown in the Bond Register, of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than a registered owner of a Bond as shown in the Bond Register, of any amount with respect to the principal of or interest on the Bonds. The City and the Bond Registrar may treat and consider the person in whose name each Bond is registered in the Bond Register as the holder and absolute owner of such Bond for the purpose of payment of principal and interest with respect to such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Bond Registrar shall pay all principal of and interest on the Bonds only to or upon the order of the respective registered owners of the Bonds, as shown in the Bond Register, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City’s obligations with respect to payment of the principal of and interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of a Bond as shown in the Bond Register, shall receive a Bond evidencing the obligation of the City to make payments of principal and interest with respect to any Bond. Upon delivery by DTC to the Bond Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede, and subject to the provisions in Section 3 hereof with respect to the payment of interest to the registered owners of Bonds at the close of business on the 15th day of the month of the applicable interest payment date, the name “Cede” in this Ordinance shall refer to such new nominee of DTC.
In the event that (i) the City determines that DTC is incapable of discharging its responsibilities described herein and in the Representation Letter, (ii) the agreement among the City, the Bond Registrar and DTC evidenced by the Representation Letter shall be terminated for any reason or (iii) the City determines that it is in the best interests of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, the City shall notify DTC and DTC Participants of the availability through DTC of certificated Bonds and the Bonds shall no longer be restricted to being registered in the Bond Register in the name of Cede, as nominee of DTC. At that time, the City may determine that the Bonds shall be registered in the name of and deposited with such other depository operating a universal book-entry system, as may be acceptable to the City, or such depository’s agent or designee, and if the City does not select such alternate universal book-entry system, then the Bonds may be registered in whatever name or names registered owners of Bonds transferring or exchanging Bonds shall designate, in accordance with the provisions of Section 5(a) hereof.
Notwithstanding any other provisions of this Ordinance to the contrary, so long as any Bond is registered in the name of Cede, as nominee of DTC, all payments with respect to principal of and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively, in the name provided in the Representation Letter.
Section 6. Redemption. (a) Optional Redemption. All or a portion of the Bonds, if any, due on and after the date specified in the Bond Notification shall be subject to redemption prior to maturity at the option of the City from any available funds, as a whole or in part, and if in part in integral multiples of $5,000 in any order of their maturity as determined by the City (less than all of the Bonds of a single series and maturity to be selected by the Bond Registrar), on the date specified in the Bond Notification, and on any date thereafter, at the redemption price of par plus accrued interest to the redemption date.
(b) Mandatory Redemption. The Bonds maturing on the date or dates, if any, indicated in the Bond Notification shall be subject to mandatory redemption, in integral multiples of $5,000 selected by lot by the Bond Registrar, at a redemption price of par plus accrued interest to the redemption date on December 30 of the years, if any, and in the principal amounts, if any, as indicated in the Bond Notification.
The principal amounts of Bonds to be mandatorily redeemed in each year may be reduced through the earlier optional redemption thereof, with any partial optional redemptions of such Bonds credited against future mandatory redemption requirements in such order of the mandatory redemption dates as the City may determine. In addition, on or prior to the 60th day preceding any mandatory redemption date, the Bond Registrar may, and if directed by the City Council shall, purchase Bonds required to be retired on such mandatory redemption date. Any such Bonds so purchased shall be cancelled and the principal amount thereof shall be credited against the mandatory redemption required on such next mandatory redemption date.
(c) General. The Bonds shall be redeemed only in the principal amount of $5,000 and integral multiples thereof. The City shall, unless otherwise set forth in the Bond Notification, at least forty-five (45) days prior to any optional redemption date (unless a shorter time period shall be satisfactory to the Bond Registrar) notify the Bond Registrar of such redemption date and of the series, principal amount and maturity or maturities of Bonds to be redeemed. For purposes of any redemption of less than all of the outstanding Bonds of a single series and maturity, the particular Bonds or portions of Bonds to be redeemed shall be selected by lot by the Bond Registrar from the Bonds of such series and maturity by such method of lottery as the Bond Registrar shall deem fair and appropriate; provided that such lottery shall provide for the selection for redemption of Bonds or portions thereof so that any $5,000 Bond or $5,000 portion of a Bond shall be as likely to be called for redemption as any other such $5,000 Bond or $5,000 portion. The Bond Registrar shall make such selection upon the earlier of the irrevocable deposit of funds with an escrow agent sufficient to pay the redemption price of the Bonds to be redeemed or the time of the giving of official notice of redemption.
The Bond Registrar shall promptly notify the City in writing of the Bonds or portions of Bonds selected for redemption and, in the case of any Bond selected for partial redemption, the principal amount thereof to be redeemed.
Section 7. Redemption Procedure. Unless waived by any holder of Bonds to be redeemed, notice of the call for any such redemption shall be given by the Bond Registrar on behalf of the City by sending the redemption notice at least thirty (30) days and not more than sixty (60) days prior to the redemption date (unless otherwise set forth in the Bond Notification) to the registered owner of the Bond or Bonds to be redeemed at the address shown on the Bond Register or at such other address as is furnished in writing by such registered owner to the Bond Registrar.
All notices of redemption shall state:
(1) the redemption date,
(2) the redemption price,
(3) if less than all outstanding Bonds of any series are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed,
(4) that on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date,
(5) the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the principal corporate trust office of the Bond Registrar, and
(6) such other information then required by custom, practice or industry standard.
Unless moneys sufficient to pay the redemption price of the Bonds to be redeemed at the option of the City shall have been received by the Bond Registrar prior to the giving of such notice of redemption, such notice may, at the option of the City, state that said redemption shall be conditional upon the receipt of such moneys by the Bond Registrar on or prior to the date fixed for redemption. If such moneys are not received, such notice shall be of no force and effect, the City shall not redeem such Bonds, and the Bond Registrar shall give notice, in the same manner in which the notice of redemption shall have been given, that such moneys were not so received and that such Bonds will not be redeemed. Otherwise, prior to any redemption date, the City shall deposit with the 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.
Subject to the provisions for a conditional redemption described above, notice of redemption having been given as aforesaid, and notwithstanding the failure to receive such notice, the Bonds or portions of Bonds so to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the City fails to provide the payment of the redemption price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Bond Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the registered holder a new Bond or Bonds of the same series and maturity in the amount of the unpaid principal.
If any Bond or portion of Bond called for redemption shall not be so paid upon surrender thereof for redemption, the principal shall, until paid, bear interest from the redemption date at the rate borne by the Bond or portion of Bond so called for redemption. All Bonds which have been redeemed shall be cancelled and destroyed by the Bond Registrar and shall not be reissued.
Section 8. Form of Bond. The Bonds shall be in substantially the form hereinafter set forth; provided, however, that if the text of the Bonds is to be printed in its entirety on the front side of the Bonds, then the second paragraph on the front side and the legend “See Reverse Side for Additional Provisions” shall be omitted and the text of paragraphs set forth for the reverse side shall be inserted immediately after the first paragraph.
[Form of Bond - Front Side]
Registered Registered
No. _____ $_________
United States of America
State of Illinois
Counties of Kane, DuPage, Kendall and Will
City of Aurora
[Taxable] General Obligation [Refunding] Bond, Series 2022[__]
See Reverse Side for
Additional Provisions
Interest Maturity Dated
Rate: ____% Date: December 30, 20__ Date: __________, 2022 CUSIP: _________
Registered Owner:
Principal Amount:
Know All Persons by These Presents that the City of Aurora, Kane, DuPage, Kendall and Will Counties, Illinois, a municipality, home rule unit, and political subdivision of the State of Illinois (the “City”), hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or registered assigns as hereinafter provided, on the Maturity Date identified above, the Principal Amount identified above and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on such Principal Amount from the later of the Dated Date of this Bond identified above or from the most recent interest payment date to which interest has been paid, at the Interest Rate per annum identified above on June 30 and December 30 of each year, commencing _________ 30, 20___, until said Principal Amount is paid. The principal of this Bond is payable in lawful money of the United States of America upon presentation and surrender hereof at the principal corporate trust office of ________________________________________, ___________, Illinois, as bond registrar and paying agent (the “Bond Registrar”). Payment of interest shall be made to the Registered Owner hereof as shown on the registration books of the City maintained by the Bond Registrar at the close of business on the 15th day of the month of any interest payment date and shall be paid by check or draft of the Bond Registrar, payable upon presentation in lawful money of the United States of America, mailed to the address of such Registered Owner as it appears on such registration books, or at such other address furnished in writing by such Registered Owner to the Bond Registrar. For the prompt payment of this Bond both principal and interest at maturity, the full faith, credit and resources of the City are hereby irrevocably pledged.
Reference is hereby made to the further provisions of this Bond set forth on the reverse hereof, and such further provisions shall for all purposes have the same effect as if set forth at this place.
It is hereby certified and recited that all conditions, acts and things required by the Constitution and Laws of the State of Illinois, including the Act (as hereinafter defined), to exist or to be done precedent to and in the issuance of this Bond, have existed and have been properly done, happened and been performed in regular and due form and time as required by law; that the indebtedness of the City, represented by the Bonds, and including all other indebtedness of the City, howsoever evidenced or incurred, does not exceed any constitutional or statutory or other lawful limitation; and that provision has been made for the collection of a direct annual tax, in addition to all other taxes, on all of the taxable property in the City sufficient to pay the interest hereon as the same falls due and also to pay and discharge the principal hereof at maturity.
This Bond shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by the Bond Registrar.
In Witness Whereof the City of Aurora, Kane, DuPage, Kendall and Will Counties, Illinois, by its City Council, has caused this Bond to be executed by the manual or duly authorized facsimile signature of its Mayor and attested by the manual or duly authorized facsimile signature of its City Clerk and its corporate seal or a facsimile thereof to be impressed or reproduced hereon, all as appearing hereon and as of the Dated Date identified above.
SPECIMEN
Mayor, City of Aurora
Kane, DuPage, Kendall and
Will Counties, Illinois
Attest:
SPECIMEN
City Clerk, City of Aurora
Kane, DuPage, Kendall and
Will Counties, Illinois
[Seal]
Date of Authentication: ___________, 2022
Certificate Bond Registrar and Paying Agent:
of _________________________,
Authentication _______________, Illinois
This Bond is one of the Bonds described in the within mentioned ordinance and is one of the [Taxable] General Obligation [Refunding] Bonds, Series 2022[___], of the City of Aurora, Kane, DuPage, Kendall and Will Counties, Illinois.
________________________________,
as Bond Registrar
By SPECIMEN
Authorized Officer
[Form of Bond - Reverse Side]
City of Aurora
Kane, DuPage, Kendall and Will Counties, Illinois
[Taxable] General Obligation [Refunding] Bond, Series 2022[___]
This bond is one of a series of bonds (the “Bonds”) in the aggregate principal amount of $_____________ issued by the City for the purpose of [financing capital projects in and for the City, including riverwalk, road and parking projects, combined maintenance facility, fire station and City Hall improvement projects and residential and commercial redevelopment projects, together with such engineering, electrical, financial, legal and other professional services related thereto as may be advisable and necessary] [refunding certain outstanding bonds of the City], all as described and defined in the Ordinance of the City, passed by the City Council of the City (the “City Council”) on the 26th day of April, 2022, authorizing the Bonds (as supplemented by a Notification of Sale dated ________, 2022, the “Ordinance”), pursuant to and in all respects in compliance with the applicable provisions of the Illinois Municipal Code, as amended; as further supplemented and, where necessary, superseded, by the powers of the City as a home rule unit under the provisions of Section 6 of Article VII of the Illinois Constitution of 1970; with the enabling ordinance of the City, as amended, adopted in the exercise of its home rule powers and authorizing the issuance of bonds without referendum (collectively being the “Act”), and with the Ordinance, which has been duly adopted by the City Council, in all respects as by law required.
[Optional and Mandatory Redemption provisions, as applicable, will be inserted here].
[Notice of any such redemption shall be sent by first class mail not less than [thirty (30) days nor more than sixty (60) days prior] to the date fixed for redemption to the registered owner of each Bond to be redeemed at the address shown on the registration books of the City maintained by the Bond Registrar or at such other address as is furnished in writing by such registered owner to the Bond Registrar. When so called for redemption, this Bond will cease to bear interest on the specified redemption date, provided funds for redemption are on deposit at the place of payment at that time, and shall not be deemed to be outstanding.]
This Bond is subject to provisions relating to registration, transfer and exchange and such other terms and provisions relating to security and payment as are set forth in the Ordinance, to which reference is hereby expressly made and to all the terms of which the Registered Owner hereof is hereby notified and shall be subject.
The City and the Bond Registrar may deem and treat the Registered Owner hereof as the absolute owner hereof for the purpose of receiving payment of or on account of principal hereof and interest due hereon and for all other purposes, and neither the City nor the Bond Registrar shall be affected by any notice to the contrary.
Assignment
For Value Received, the undersigned sells, assign, and transfers unto
|
|
Here insert Social Security Number, Employer Identification Number or other Identifying Number |
(Name and Address of Assignee)
the within Bond and does hereby irrevocably constitute and appoint
as attorney to transfer the said Bond on the books kept for registration thereof with full power of substitution in the premises.
Dated: ________________________ ____________________________
Signature guaranteed:
Notice: The signature to this transfer and assignment must correspond with the name of the Registered Owner as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever.
Section 9. Sale of Bonds. The Mayor and the Chief Financial Officer of the City (together, the “Designated Representatives”) are hereby authorized to proceed not later than the 12th day of October, 2022, without any further authorization or direction from the City Council, to sell the Bonds upon the terms as prescribed in this Ordinance. Each series of Bonds hereby authorized shall be executed as in this Ordinance provided as soon after the delivery of the Bond Notification as may be, and thereupon be deposited with the City Treasurer, and, after authentication thereof by the Bond Registrar, be by said Treasurer delivered to the purchaser thereof (each, a “Purchaser”), upon receipt of the purchase price therefor, the same being not less than 98% of the principal amount of such series of the Bonds (each, a “Purchase Price”). For each series of Bonds that includes both Project Bonds and Refunding Bonds, the Bond Notification shall include an allocation of the Purchase Price for such series of Bonds between Project Bonds and Refunding Bonds.
For each series of Bonds, the Purchaser shall be: in a negotiated underwriting, Fifth Third Securities, Inc. (“Fifth Third”), or (b) in a private placement, (i) a bank or financial institution authorized to do business in the State of Illinois, (ii) a “governmental unit” as defined in the Local Government Debt Reform Act of the State of Illinois, as amended, or (iii) an “accredited investor” as defined in Rule 501 of Regulation D as promulgated under the Securities Act of 1933, as amended; provided, however, that any clause (b) Purchaser shall only be selected only upon the advice of the City’s municipal advisor, Speer Financial, Inc. (“Speer”) that the sale of such Bonds to such Purchaser is fair and reasonable in light of current conditions in the market for obligations such as the Bonds, and further provided, that any clause (b) Purchaser may be selected through the utilization of Fifth Third, as placement agent. In the event that a clause (b) Purchaser of a series of Bonds is selected through the utilization of Fifth Third as placement agent, the execution of a standard form of placement agent agreement between the City and Fifth Third is hereby approved and authorized.
Prior to the sale of any series of Bonds, the Mayor and the Chief Financial Officer of the City are each hereby authorized to approve and execute a commitment for the purchase of a Municipal Bond Insurance Policy (as hereinafter defined), to further secure such Bonds, as long as the present value of the fee to be paid for the Municipal Bond Insurance Policy (using as a discount rate the expected yield on the Bonds treating the fee paid as interest on such Bonds) is less than the present value of the interest reasonably expected to be saved on such Bonds over the term of such Bonds as a result of the Municipal Bond Insurance Policy.
Upon the sale of any series of Bonds, the Designated Representatives shall prepare a Notification of Sale of such Bonds, which shall include the pertinent details of sale as provided herein (the “Bond Notification”). In the Bond Notification, the Designated Representatives shall find and determine that (i) the Bonds have been sold at such price and bear interest at such rates that the true interest cost (yield) received upon the sale of the Bonds does not exceed the maximum rate otherwise authorized by applicable law and (ii) that the net present value debt service savings to the City as a result of the issuance of the Refunding Bonds and the refunding of the Refunded Bonds is not less than 2.50% of the principal amount of the Refunded Bonds. The Bond Notification shall be entered into the records of the City and made available to the City Council at the next regular meeting thereof; but such action shall be for information purposes only, and the City Council shall have no right or authority at such time to approve or reject such sale as evidenced in the Bond Notification.
Upon the sale of any series of Bonds, as evidenced by the execution and delivery of the Bond Notification by the Designated Representatives, the Mayor, City Clerk, City Treasurer and Chief Financial Officer of the City and any other officers of the City, as shall be appropriate, shall be and are each hereby authorized and directed to approve or execute, or both, such documents of sale of such Bonds as may be necessary, including, without limitation, contract for the sale of the Bonds between the City and such Purchaser (each, a “Purchase Contract”). Prior to the execution and delivery of a Purchase Contract, the Designated Representatives shall find and determine that no person holding any office of the City, either by election or appointment, is in any manner financially interested directly in his or her own name or indirectly in the name of any other person, association, trust or corporation, in such Purchase Contract. The City Council hereby finds and determines that no person holding any office of the City, either by election or appointment, is in any manner financially interested directly in his or her own name or indirectly in the name of any other person, association, trust or corporation, in Fifth Third.
The use by Fifth Third of any Preliminary Official Statement and any final Official Statement relating to the Bonds (the “Official Statement”) is hereby ratified, approved and authorized; the execution and delivery of the Official Statement is hereby authorized; and the officers of the City Council are hereby authorized to take any action as may be required on the part of the City to consummate the transactions contemplated by each Purchase Contract, this Ordinance, said Preliminary Official Statement, the Official Statement and the Bonds.
Section 10. Security for the Bonds. The Bonds are a general obligation of the City, for which the full faith and credit of the City are irrevocably pledged, and are payable from the levy of taxes on all of the taxable property in the City, without limitation as to rate or amount, and from any other lawfully available funds.
Section 11. Tax Levy; Abatement. For the purpose of providing funds required to pay the interest on the Bonds promptly when and as the same falls due, and to pay and discharge the principal thereof at maturity, there is hereby levied upon all of the taxable property within the City, in the years for which any of the Bonds are outstanding, a direct annual tax sufficient for that purpose; and there is hereby levied on all of the taxable property in the City, in addition to all other taxes, the following direct annual taxes (the “Pledged Taxes”), to-wit:
|
For the Year |
A Tax to Produce the Sum of: |
|
2022 |
$7,000,000.00 |
for interest and principal up to and including December 30, 2023 |
|
2023 |
$7,000,000.00 |
for interest and principal |
|
2024 |
$7,000,000.00 |
for interest and principal |
|
2025 |
$7,000,000.00 |
for interest and principal |
|
2026 |
$7,000,000.00 |
for interest and principal |
|
2027 |
$7,000,000.00 |
for interest and principal |
|
2028 |
$7,000,000.00 |
for interest and principal |
|
2029 |
$7,000,000.00 |
for interest and principal |
|
2030 |
$7,000,000.00 |
for interest and principal |
|
2031 |
$7,000,000.00 |
for interest and principal |
|
2032 |
$7,000,000.00 |
for interest and principal |
|
2033 |
$7,000,000.00 |
for interest and principal |
|
2034 |
$7,000,000.00 |
for interest and principal |
|
2035 |
$7,000,000.00 |
for interest and principal |
|
2036 |
$7,000,000.00 |
for interest and principal |
|
2037 |
$7,000,000.00 |
for interest and principal |
|
2038 |
$7,000,000.00 |
for interest and principal |
|
2039 |
$7,000,000.00 |
for interest and principal |
|
2040 |
$7,000,000.00 |
for interest and principal |
|
2041 |
$7,000,000.00 |
for interest and principal |
The Pledged Taxes and other moneys on deposit in the Bond Fund (as hereinafter defined) shall be applied to the payment of interest when due and principal when due at maturity or as redeemed pursuant to mandatory redemption from the Bond Fund.
Principal or interest maturing at any time when there are not sufficient funds on hand from the Pledged Taxes to pay the same shall be paid from the general funds of the City, and the fund from which such payment was made shall be reimbursed out of the Pledged Taxes when the same shall be collected.
The City covenants and agrees with the purchasers and the holders of the Bonds that so long as any of the Bonds remain outstanding, the City will take no action or fail to take any action which in any way would adversely affect the ability of the City to levy and collect the Pledged Taxes (except as otherwise described in this Section) and the City 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 fund established to pay the principal of and interest on the Bonds.
To the extent that the Pledged Taxes levied above exceed the amount necessary to pay debt service on the Bonds as set forth in the Bond Notification, the Mayor, City Clerk and City Treasurer are hereby authorized to direct the abatement of such Pledged Taxes to the extent of the excess of such levy in each year over the amount necessary to pay debt service on the Bonds in the following bond year. Proper notice of such abatement shall be filed with the County Clerks of The Counties of Kane, DuPage, Kendall and Will Counties, Illinois (the “County Clerks”), in a timely manner to effect such abatement.
In the event that funds from any other lawful source are made available for the purpose of paying any principal of or interest on the Bonds so as to enable the abatement of the Pledged Taxes levied herein for the payment of same, the City Council may, by proper proceedings, direct the transfer of such funds to the Bond Fund, and shall then further direct the abatement of the Pledged Taxes by the amount so deposited. Proper notice of such abatement shall be filed with the County Clerks in a timely manner to effect such abatement.
For any series of Refunding Bonds issued to refund 2012A Bonds and bonds of one or both other series of Prior Bonds, the Bond Notification shall include an allocation of the Pledged Taxes for such series of Refunding Bonds between those Refunding Bonds issued to refund 2012A Bonds and those Refunding Bonds issued to refund Prior Bonds other than 2012A Bonds.
Section 12. Filing with County Clerks and Certificate of Reduction of Taxes. Forthwith upon the passage of this Ordinance and upon execution of the Bond Notification, the City Clerk is hereby directed to file a certified copy of this Ordinance, together with the Bond Notification, with the County Clerks, and it shall be the duty of the County Clerks to annually in and for each of the years set forth above, ascertain the rate necessary to produce the Pledged Taxes so levied, and extend the same for collection on the tax books against all of the taxable property within the City in connection with other taxes levied in each of said years for general corporate purposes of the City, in order to raise the respective amounts aforesaid and in each of said years such annual tax shall be computed, extended and collected in the same manner as now or hereafter provided by law for the computation, extension and collection of taxes for general corporate purposes of the City, and when collected, the Pledged Taxes hereby levied shall be placed to the credit of a special account for the Bonds, hereby created and designated “Series 2022 Bonds-Debt Service Account” (the “Bond Fund”), which Pledged Taxes are hereby irrevocably pledged to and shall be used only for the purpose of paying the principal of and interest on the Bonds.
The Mayor, City Clerk and City Treasurer are hereby directed to prepare and file with the County Clerks, a Certificate of Reduction of Taxes Heretofore Levied for the Payment of Bonds showing the Prior Bonds being refunded and directing the abatement of the taxes heretofore levied to pay the Refunded Bonds.
Section 13. Use of Bond Proceeds. The proceeds from the sale of the Project Bonds are hereby appropriated to pay the costs of issuance of the Bonds, interest on the Project Bonds (in an amount set forth in the Bond Notification) and the costs of the Project and that portion thereof not needed to pay such costs of issuance or interest on the Project Bonds shall be deposited into the “Series 2022 - Capital Project Fund” (the “Project Fund”), hereby created. The sale proceeds of the Bonds appropriated to pay costs of issuance of the Bonds shall either be paid directly by the Purchaser at closing or be deposited into a separate fund, hereby created and designated as the “Series 2022 - Expense Fund” (the “Expense Fund”). Disbursements from the Expense Fund shall be made from time to time as necessary. Any sale proceeds of Project Bonds remaining in the Expense Fund six months after the delivery date of such Project Bonds shall be deposited into the Project Fund.
The proceeds from the sale of the Refunding Bonds, together with such additional amounts as may be necessary from the general funds of the City, are hereby appropriated to pay the costs of issuance of the Bonds, pay interest on the Refunding Bonds (in an amount set forth in the Bond Notification) and refund the Refunded Bonds and that portion thereof not needed to pay such costs of issuance or interest on the Refunding Bonds shall be (a) deposited with the paying agents for the Prior Bonds for the purpose of paying the principal of and interest on the Refunded Bonds on the redemption dates thereof or (b) deposited in escrow with an escrow agent (which shall be a bank or trust company with a corporate trust office located in the State of Illinois) (the “Escrow Agent”) to pursuant to an Escrow Agreement in substantially the form attached hereto as Exhibit A (the “Escrow Agreement”) and made a part hereof by this reference, or with such changes therein as shall be approved by the officers of the City executing the Escrow Agreement, such execution to constitute evidence of the approval of such changes, for the purpose of paying the principal of and interest on the Refunded Bonds on the redemption dates thereof. The City Council approves the form, terms and provisions of the Escrow Agreement and directs the Mayor and City Clerk to execute, attest, seal and deliver the Escrow Agreement in the name and on behalf of the City. Amounts in the escrow may be used to purchase direct obligations of or obligations guaranteed by the full faith and credit of the United States of America as to principal and interest (the “Government Securities”) to provide for the payment of the principal and interest on the Refunded Bonds. The Escrow Agent, the Purchaser, and any bidding agent used to conduct the bidding for the Government Securities are each hereby authorized to act as agent for the City in the purchase of the Government Securities. Any sale proceeds of Refunding Bonds remaining in the Expense Fund six months after the delivery date of the Refunding Bonds shall be deposited into the Bond Fund.
In accordance with the redemption provisions of the ordinances authorizing the issuance of the Prior Bonds, the City by the City Council does hereby make provision for the payment of and does hereby call (subject only to the delivery of Refunding Bonds) the Refunded Bonds for redemption on their earliest possible and practicable redemption date as determined by the Designated Representatives in the Bond Notification.
Section 14. Non-Arbitrage and Tax-Exemption. The City hereby covenants that it will not take any action, omit to take any action or permit the taking or omission of any action within its control (including, without limitation, making or permitting any use of the proceeds of the Tax-Exempt Bonds) if taking, permitting or omitting to take such action would cause any of the Tax-Exempt Bonds to be an arbitrage bond or a private activity bond within the meaning of the Internal Revenue Code of 1986, as amended (the “Code”), or would otherwise cause the interest on the Tax-Exempt Bonds to be included in the gross income of the recipients thereof for federal income tax purposes. The City acknowledges that, in the event of an examination by the Internal Revenue Service (the “IRS”) of the exemption from federal income taxation for interest paid on the Tax-Exempt Bonds, under present rules, the City may be treated as a “taxpayer” in such examination and agrees that it will respond in a commercially reasonable manner to any inquiries from the IRS in connection with such an examination.
The City also agrees and covenants with the purchasers and holders of the Tax-Exempt Bonds from time to time outstanding that, to the extent possible under Illinois law, it will comply with whatever federal tax law is adopted in the future which applies to the Tax-Exempt Bonds and affects the tax-exempt status of the Tax-Exempt Bonds.
The City Council hereby authorizes the officials of the City responsible for issuing the Tax-Exempt Bonds, the same being the Mayor, City Clerk and City Treasurer to make such further covenants and certifications regarding the specific use of the proceeds of the Tax-Exempt Bonds as approved by the City Council and as may be necessary to assure that the use thereof will not cause the Tax-Exempt Bonds to be arbitrage bonds and to assure that the interest on the Tax-Exempt Bonds will be exempt from federal income taxation. In connection therewith, the City and the City Council further agree: (a) through their officers, to make such further specific covenants, representations as shall be truthful, and assurances as may be necessary or advisable; (b) to consult with counsel approving the Tax-Exempt Bonds and to comply with such advice as may be given; (c) to pay to the United States, as necessary, such sums of money representing required rebates of excess arbitrage profits relating to the Tax-Exempt Bonds; (d) to file such forms, statements, and supporting documents as may be required and in a timely manner; and (e) if deemed necessary or advisable by their officers, to employ and pay fiscal agents, financial advisors, attorneys, and other persons to assist the City in such compliance.
Section 15. Reimbursement. With respect to expenditures for the Project paid within the 60 day period ending on this date and with respect to which no declaration of intent was previously made, the City hereby declares its intent to reimburse such expenditures and hereby allocates proceeds of Project Bonds in the amount indicated in the Tax Exemption Certificate and Agreement to be delivered in connection with the issuance of such Tax-Exempt Bonds to reimburse said expenditures.
Section 16. Municipal Bond Insurance. In the event the payment of principal of and interest on a series of the Bonds is insured pursuant to a municipal bond insurance policy (a “Municipal Bond Insurance Policy”) issued by a bond insurer (a “Bond Insurer”), and as long as such Municipal Bond Insurance Policy shall be in full force and effect, the City and the Bond Registrar agree to comply with such usual and reasonable provisions regarding presentment and payment of such Bonds, subrogation of the rights of the Bondholders to the Bond Insurer when holding such Bonds, amendment hereof, or other terms, as approved by any of the City officers on advice of counsel, his or her approval to constitute full and complete acceptance by the City of such terms and provisions under authority of this Section.
Section 17. List of Bondholders. The Bond Registrar shall maintain a list of the names and addresses of the holders of all Bonds and upon any transfer shall add the name and address of the new Bondholder and eliminate the name and address of the transferor Bondholder.
Section 18. Duties of Bond Registrar. If requested by the Bond Registrar, the Mayor and City Clerk are authorized to execute the Bond Registrar’s standard form of agreement between the City and the Bond Registrar with respect to the obligations and duties of the Bond Registrar hereunder which may include the following:
(a) to act as bond registrar, authenticating agent, paying agent and transfer agent as provided herein;
(b) to maintain a list of Bondholders as set forth herein and to furnish such list to the City upon request, but otherwise to keep such list confidential;
(c) to give notice of redemption of the Bonds as provided herein;
(d) to cancel and/or destroy Bonds which have been paid at maturity or submitted for exchange or transfer;
(e) to furnish the City at least annually a certificate with respect to Bonds cancelled and/or destroyed; and
(f) to furnish the City at least annually an audit confirmation of Bonds paid, Bonds outstanding and payments made with respect to interest on the Bonds.
Section 19. Continuing Disclosure Undertaking. The Mayor and the City Treasurer are each hereby authorized, empowered and directed to execute and deliver a Continuing Disclosure Undertaking (the “Continuing Disclosure Undertaking”) in connection with the issuance of the Bonds, with such provisions therein as he or she shall approve, his or her execution thereof to constitute conclusive evidence of his or her approval of such provisions. When the Continuing Disclosure Undertaking is executed and delivered on behalf of the City as herein provided, the Continuing Disclosure Undertaking will be binding on the City and the officers, employees and agents of the City, and the officers, employees and agents of the City are hereby authorized, empowered and directed to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of the Continuing Disclosure Undertaking as executed. Notwithstanding any other provision of this Ordinance, the sole remedies for failure to comply with the Continuing Disclosure Undertaking shall be the ability of the beneficial owner of any Bond to seek mandamus or specific performance by court order, to cause the City to comply with its obligations under the Continuing Disclosure Undertaking.
Section 20. Record-Keeping Policy and Post-Issuance Compliance Matters. The City has previously adopted a record-keeping policy (the “Policy”) in order to maintain sufficient records to demonstrate compliance with its covenants and expectations to ensure the appropriate federal tax status for the debt obligations of the City, the interest on which is excludable from “gross income” for federal income tax purposes (such as the Tax-Exempt Bonds) or which enable the City or the holder to receive federal tax benefits, including, but not limited to, qualified tax credit bonds and other specified tax credit bonds. The City Council and the City hereby reaffirm the Policy.
Section 21. Publication of Ordinance. This Ordinance shall become effective upon its passage and approval, and shall be published in pamphlet form on the date of adoption of this Ordinance. It is the intent of this Section to repeal subsection (h) of the Enabling Ordinance, which is also known as Section 2-319(h) of the City Code of Ordinances, for purposes of the Bonds, and said subsection (h) is hereby repealed for said purposes.
Section 22. Severability. If any section, paragraph, clause, or provision of this Ordinance shall be held invalid, the invalidity of such section, paragraph, clause, or provision shall not affect any of the other provisions of this Ordinance.
[Remainder of page intentionally left blank]
Section 23. Superseder and Effective Date. All ordinances, resolutions, and orders, or parts thereof, in conflict herewith, are to the extent of such conflict hereby superseded; and this Ordinance shall be in full force and effect immediately upon its passage and approval.
Adopted: April 26, 2022
Ayes:
Nays: ______________________________________________________
Absent: ______________________________________________________
Approved: April 26, 2022
Mayor, City of Aurora, Kane, DuPage, Kendall and Will Counties, Illinois
Attest:
_____________________________________
City Clerk, City of Aurora, Kane, DuPage, Kendall and Will Counties, Illinois
Recorded in the City Records on April 26, 2022
Published in Pamphlet Form: April 26, 2022
Exhibit A
______________, 2022
_________________________
__________, __________
Re: City of Aurora, Kane, DuPage, Kendall and Will Counties, Illinois
$_________ General Obligation Refunding Bonds, Series 2022__
Ladies and Gentlemen:
The City of Aurora, Kane, DuPage, Kendall and Will Counties, Illinois (the “City”), by an ordinance adopted by the City Council of the City (the “City Council”) on the 26th day of April, 2022 (as supplemented by a notification of sale of bonds dated ____________, 2022, the “Bond Ordinance”), has authorized the issue and delivery of $___________ General Obligation Refunding Bonds, Series 2022_, dated _____________, 2022 (the “Bonds”). The City has authorized by the Bond Ordinance that certain proceeds of the Bonds, together with funds on hand and legally available for such purpose (the “Available Funds”), be used to pay and redeem on ___________, 2022, (i) $____________ of the City’s outstanding and unpaid Taxable General Obligation Library Bonds, Series 2012A, dated October 2, 2012, due serially on December 30 of the years, in the amounts and bearing interest at the rates per annum as follows:
|
Year of Maturity |
Principal Amount ($) |
Rate of Interest (%) |
|
20__ |
|
|
|
20__ |
|
|
|
20__ |
|
|
|
20__ |
|
|
(the “Refunded 2012A Bonds”);
(ii) $________________ of the City’s outstanding and unpaid General Obligation Refunding Bonds, Series 2012B, dated October 2, 2012, due serially on December 30 of the years, in the amounts and bearing interest at the rates per annum as follows:
|
Year of Maturity |
Principal Amount ($) |
Rate of Interest (%) |
|
20__ |
|
|
|
20__ |
|
|
|
20__ |
|
|
(the “Refunded 2012B Bonds”);
and (iii) $________________ of the City’s outstanding and unpaid General Obligation Refunding Bonds, Series 2013, dated November 5, 2013, due serially on December 30 of the years, in the amounts and bearing interest at the rates per annum as follows:
|
Year of Maturity |
Principal Amount ($) |
Rate of Interest (%) |
|
20__ |
|
|
|
20__ |
|
|
|
20__ |
|
|
(the “Refunded 2013 Bonds” and, together with the Refunded 2012A Bonds and the Refunded 2012B Bonds, the “Refunded Bonds”).
The City hereby deposits with you $____________ from the proceeds of the Bonds and $_______ of Available Funds (collectively, the “Deposit”) and you are hereby instructed as follows with respect thereto:
1. [Upon deposit, you are directed to hold the Deposit in an irrevocable trust fund account (the “Trust Account”) for the City to the benefit of the holders of the Refunded Bonds.] [Upon deposit, you are directed to purchase non-callable direct obligations of or non-callable obligations guaranteed by the full faith and credit of the United States of America as to principal and interest in the amount of $____________ and maturing as described on Exhibit A hereto (the “Government Securities”). You are further instructed to fund a beginning cash escrow deposit on demand in the amount of $____________. The beginning deposit and the Government Securities are to be held in an irrevocable trust fund account (the “Trust Account”) for the City to the benefit of the holders of the Refunded Bonds.]
2. [You shall hold the Deposit in the Trust Account in cash for the sole and exclusive benefit of the holders of the Refunded Bonds until redemption of the Refunded Bonds on ___________, 2022, is made.] [You shall hold the Government Securities and any interest income or profit derived therefrom and any uninvested cash in the Trust Account for the sole and exclusive benefit of the holders of the Refunded Bonds until redemption of the Refunded Bonds on ___________, 2022, is made.]
3. You shall promptly collect the principal, interest or profit from the proceeds deposited in the Trust Account and promptly apply the same as necessary to the payment of the Refunded Bonds as herein provided.
4. The City has called the Refunded Bonds for redemption and payment prior to maturity on ________, 2022. You are hereby directed to provide for and give [in your role as paying agent for the Refunded Bonds][or cause the Prior Paying Agent (as hereinafter defined) to give] timely notice of the call for redemption of the Refunded Bonds. The form and time of the giving of such notice regarding the Refunded Bonds shall be as specified in the ordinances authorizing the issuance of the Refunded Bonds. The City agrees to reimburse you for any actual out-of-pocket expenses incurred in the giving of such notice, but the failure of the City to make such payment shall not in any respect whatsoever relieve you from carrying out any of the duties, terms or provisions of this Agreement.
5. In addition, you are hereby directed [in your role as paying agent for the Refunded Bonds] to give [or cause the Prior Paying Agent to give] notice of the call of the Refunded Bonds, on or before the date notice of such redemption is given to the holders of the Refunded Bonds, to the Municipal Securities Rulemaking Board (the “MSRB”) through its Electronic Municipal Market Access system for municipal securities disclosure or through any other electronic format or system prescribed by the MSRB for purposes of Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. Information with respect to procedures for submitting notice can be found at https://msrb.org.
6. You shall remit [to Amalgamated Bank of Chicago, Chicago, Illinois], as paying agent for the Refunded Bonds [(the “Prior Paying Agent”)], the sum of $___________ on ________, 2022, such sum being sufficient to pay the principal of and interest on the Refunded Bonds on such date. Such remittance shall fully release and discharge you from any further duty or obligation thereto under this Agreement.
7. You shall make no payment of fees, due or to become due, of the bond registrar and paying agent on the Bonds or the Refunded Bonds. The City shall pay the same as they become due.
8. If at any time it shall appear to you that the funds on deposit in the Trust Account will not be sufficient to pay the principal of and interest on the Refunded Bonds, you shall notify the City not less than five (5) days prior to such payment date and the City shall make up the anticipated deficit from any funds legally available for such purpose so that no default in the making of any such payment will occur.
9. Upon final disbursement of funds sufficient to pay the Refunded Bonds as hereinabove provided for, you shall transfer any balance remaining in the Trust Account to the City and thereupon this Agreement shall terminate.
Very truly yours,
City of Aurora, Kane, DuPage, Kendall and Will Counties, Illinois
By SPECIMEN
_____________________
By SPECIMEN
_____________________
Accepted this ____ day of _____________, 2022.
_______________________________________
___________, _____________
By SPECIMEN
Its
[Seal]