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Resolution 2024-69 Resolution No. 2024-69 A RESOLUTION OF THE UNITED CITY OF YORKVILLE, ILLINOIS APPROVING AN AGREEMENT WITH ROBERT W. BAIRD & CO.AS UNDERWRITER FOR 2025 SERIES BONDS WHEREAS,the United City of Yorkville, Kendall County, Illinois(the "City"), is a duly organized unit of government of the State of Illinois within the meaning of Article VII, Section 10 of the 1970 Illinois Constitution; and WHEREAS,the City intends to issue 2025 Series A,B, C and D bonds(the"Bonds"); and WHEREAS, the City requires the assistance of an underwriter in conjunction with the issuance of the Bonds; and WHEREAS, Robert W. Baird & Co. ("Baird"), is a nationally recognized financial services firm with expertise across wealth management,investment banking,institutional equities, fixed income,private equity, and public finance; and WHEREAS, Baird has underwritten three of Yorkville's last seven competitive bond sales and served as the underwriter for the City's most recent negotiated sale, the 2023A water bonds issued in August 2023; and WHEREAS, Baird is proposing a fee of 0.33% of the offering price for underwriting services related to the issuance of the Bonds, which fees will be funded by bond proceeds; and WHEREAS,the City desires to enter into an engagement agreement with Robert W.Baird & Co., as underwriter for the issuance of the Bonds, attached hereto as Exhibit A. NOW,THEREFORE,BE IT RESOLVED by the Mayor and City Council of the United City of Yorkville, Kendall County, Illinois, as follows: Section 1. The recitals set forth above are incorporated into this Resolution as if fully restated herein. Resolution No. 2024-69 Page 1 Section 2. That the engagement letter with Robert W. Baird & Co., attached hereto as Exhibit A and made a part hereof by reference,is hereby approved,and the City's Finance Director is hereby authorized to execute said agreement on behalf of the United City of Yorkville. Section 3. That this Resolution shall be in full force and effect from and after its passage and approval as provided by law. Passed by the City Council of the United City of Yorkville, Kendall County, Illinois this 10th day of December,A.D. 2024. lel k EaWi1e1 PY CLERK KEN KOCH AYE DAN TRANSIER AYE ARDEN JOE PLOCHER AYE CRAIG SOLING AYE CHRIS FUNKHOUSER AYE MATT MAREK AYE SEAVER TARULIS AYE RUSTY CORNEILS AYE APPROVED by me, as Mayor of the United City of Yorkville, Kendall County, Illinois this I V 'day of O te-evn rdli' ,A.D. 2024. MAYOR Attest: •� OAAM10-1C eV CLERK Resolution No.2024-69 Page 2 Exhibit A BAITED December 4,2024 Bart Olson,City Administrator Rob Fredrickson,Finance Director United City of Yorkville 651 Prairie Pointe Drive Yorkville,Illinois 60560 Re: Underwriting Engagement Letter Mr.Olson and Mr.Fredrickson: On behalf of Robert W.Baird&Co.Incorporated("we"or"Baird"),we wish to thank you for the opportunity to serve as sole underwriter for the United City of Yorkville,Illinois("you"or the"Issuer")on its proposed offering and issuance of approximately$67 million General Obligation Bonds(Alternate Revenue Source),Series 2025A and Series 2025B,and General Obligation Refunding Bonds(Alternate Revenue Source),Series 2025C and Series 2025D (the "Securities") to finance capital improvements and to refund the Issuer's outstanding Series 2014 and Series 2014A.This letter will confirm the terms of our engagement;however,it is anticipated that this letter will be replaced and superseded by a bond purchase agreement to be entered into by the parties (the"Purchase Agreement") if and when the Securities are priced following successful completion of the offering process.The Purchase Agreement will set forth the terms and conditions on which Baird will purchase the Securities and will contain provisions that are consistent with those stated in this letter. 1. Services to be Provided by Baird. Baird is hereby engaged to serve as sole underwriter, and not as municipal advisor, of the proposed offering and issuance of the Securities, and in such underwriter capacity Baird agrees to provide the following services: • Review and evaluate the proposed terms of the offering and the Securities • Develop a marketing plan for the offering, including identification of potential purchasers of the Securities • Assist in the preparation of the preliminary official statement and final official statement and other offering documents • Contact potential purchasers of the Securities and provide them with copies of the offering materials and related information • Respond to inquiries from potential purchasers and,if requested,coordinate their due diligence calls and meetings • If the Securities are to be rated,assist in the preparation of information and materials to be provided to securities rating agencies and in the development of strategies for meetings with the rating agencies • Consult with counsel and other service providers about the offering and the terms of the Securities • Inform the Issuer of the marketing and offering process • Negotiate the pricing,including the interest rate,and other terms of the Securities • Obtain CUSIP number(s)for the Securities and arrange for their DTC book-entry eligibility • Submit documents and other information about the offering to the MSRB's EMMA website • Plan and arrange for the closing and settlement of the issuance and the delivery of the Securities • Such other usual and customary underwriting services as may be requested by the Issuer Robert W.Baird&Co. 300 E Fifth Avenue,Suite 200 Naperville,IL 60563 Main (630)778-9100 www.rwbaird.com Page 2 of 4 In addition,as part of our underwriting services,Baird may provide advice concerning the structure,timing, terms and other similar matters about the offering at the Issuer's request.Please note that Baird would be providing such advisory services in its capacity as underwriter and not as a municipal advisor to the Issuer. 2. Fees and Expenses. Baird's proposed underwriting fee/spread is 0.33%of the public offering price of the Securities issued. The underwriting fee/spread will represent the difference between the price that Baird pays for the Securities and the public offering price stated on the cover of the final official statement,net of expenses paid by the underwriter. The underwriting fee/spread will be contingent upon the closing of the proposed offering and the amount of the fee/spread may be based on the public offering price of the Securities. The Issuer shall be responsible for paying or reimbursing Baird for all costs of issuance, including without limitation,CUSIP,DTC,and IPREO(electronic book-running/sales order system)fees and charges;official statement printing and mailing/distribution charges;bond counsel,issuer counsel and disclosure counsel(if any)fees;municipal advisory and other consultant fees; ratings agency fees and expenses and travel expenses directly related thereto; auditor and other expert fees; trustee, registrar and paying agent fees; and all other expenses incident to the performance of the Issuer's obligations under the proposed offering. However, Baird will be responsible for paying any fees to the MSRB in connection with the issuance of the Securities. 3. Conflicts of Interest and Disclosures Pursuant to MSRB Rules. Baird is registered with the Municipal Securities Rulemaking Board ("MSRB") and the SEC. The MSRB website is www.msrb.org. Two investor brochures,Information for Municipal Securities Investors and Information for Municipal Advisory Clients,describe the protections that may be provided by the MSRB's rules. The brochures are available on the MSRB website. The MSRB website also contains information about how to file a complaint with an appropriate regulatory authority. Baird makes the following conflict of interest and other disclosures as required by MSRB Rule G-17. • Disclosures Concerning the Underwriter's Role: o MSRB Rule G-17 requires an underwriter to deal fairly at all times with both issuers and investors. o The underwriter's primary role is to purchase the Securities with a view to distribution in an arm's-length commercial transaction with the Issuer.The underwriter has financial and other interests that differ from those of the Issuer. o Unlike a municipal advisor,an underwriter does not have a fiduciary duty to the Issuer under the federal securities laws and is, therefore, not required by federal law to act in the best interests of the Issuer without regard to its own financial or other interests. o The Issuer may choose to engage the services of a municipal advisor with a fiduciary obligation to represent the Issuer's interest in this transaction. o The underwriter has a duty to purchase the Securities from the Issuer at a fair and reasonable price but must balance that duty with its duty to sell the Securities to investors at prices that are fair and reasonable. o The underwriter will review the official statement for the Securities in accordance with,and as a part of, its responsibilities to investors under the federal securities laws,as applied to the facts and circumstances of this transaction. • Disclosures Concerning the Underwriter's Compensation: Payment or receipt of the underwriting fee or discount will be contingent on the closing of the transaction and the amount of the fee or discount may be based, in whole or in part,on a percentage of the principal amount of the Securities.While this form of compensation is customary in the municipal securities market,it presents a conflict of interest since the underwriter may have an incentive to recommend to the Issuer a transaction that is unnecessary or to recommend that the size of the transaction be larger than is necessary. Page 3 of 4 • Baird-Specific Conflicts of Interest Disclosures: Baird is a full-service securities firm and as such Baird and its affiliates may from time to time provide advisory,brokerage,consulting and other services and products to municipalities,other institutions, and individuals including the Issuer,certain Issuer officials or employees,and potential purchasers of the Securities for which Baird may receive customary compensation; however, such services are not related to the proposed offering. Baird has previously served as underwriter,placement agent or municipal advisor on other bond offerings and financings for the Issuer and expects to serve in such capacities in the future.Baird may also be engaged from time to time by the Issuer to manage investments for the Issuer(including the proceeds from the proposed offering)through a separate contract that sets forth the fees to be paid to Baird. Baird may compensate its associates for any referrals they have made that resulted in the Issuer's selection of Baird to serve as underwriter on the proposed offering of the Securities. Baird manages various mutual funds,and from time to time those funds may own bonds and other securities issued by the Issuer(including the Securities). Additionally,clients of Baird may from time to time purchase, hold and sell bonds and other securities issued by the Issuer(including the Securities). In the ordinary course of fixed income trading business,Baird may purchase, sell,or hold a broad array of investments and may actively trade securities and other financial instruments, including the Securities and other municipal bonds, for its own account and for the accounts of customers, with respect to which Baird may receive a mark-up or mark-down, commission or other remuneration. Such investment and trading activities may involve or relate to the offering or other assets, securities and/or instruments of the Issuer and/or persons and entities with relationships with the Issuer. Spouses and other family members of Baird associates may be employed by the Issuer. Baird has not identified any other actual or potential material conflicts of interest. • Disclosures of Material Financial Characteristics and Material Financial Risks. o Accompanying this letter is a disclosure document describing the material financial characteristics and material financial risks of the Securities as required by MSRB Rule G-17. 4. Term and Termination. The term of this engagement shall extend from the date of this letter to the closing of the offering of the Securities. Notwithstanding the foregoing, either party may terminate Baird's engagement at any time without liability of penalty upon at least 30 days' prior written notice to the other party. If Baird's engagement is terminated by the Issuer,the Issuer agrees to compensate Baird for the services provided and to reimburse Baird for its out-of-pocket expenses incurred until the date of termination. 5. Limitation of Liability. The Issuer agrees that neither Baird nor its employees, officers, agents or affiliates shall have any liability to the Issuer for the services provided hereunder except to the extent it is judicially determined that Baird engaged in gross negligence or willful misconduct. 6. Miscellaneous. This letter shall be governed and construed in accordance with the laws of the State of Illinois. This letter contains the entire agreement between the parties relating to the rights granted herein and obligations assumed herein and supersedes all prior agreements between the parties related to the offering. This letter may not be amended or modified except by means of a written instrument executed by both parties hereto. This letter may not be assigned by either party without the prior written consent of the other party.The Issuer acknowledges that Baird may,at its option and expense and after announcement of the offering,place announcements and advertisements or otherwise publicize a description of the offering and Baird's role in it on Baird's website and/or other marketing material and in such financial and other newspapers and journals as it may choose, stating that Baird has acted as underwriter for the offering.The Issuer also agrees that Baird may use the Issuer's name and logo or official seal for these purposes. In addition, the Issuer agrees that all opinions of counsel written in connection with the offering of the Securities,including but not limited to those opinions from bond counsel and issuer counsel,will include Baird as an addressee or alternatively will be accompanied by letters from such counsel entitling Baird to rely on such opinions. If there is any aspect of this letter that requires further clarification,please do not hesitate to contact us. In addition,please consult your own financial and/or municipal, legal, accounting,tax and other advisors as you deem appropriate. We understand that you have the authority to bind the Issuer by contract with us,and that you are not a party to any conflict of interest relating to the proposed offering. If our understanding is not correct, please let us know. Page 4 of 4 If the foregoing is consistent with your understanding,please send me an email at dwelkomer(a,rwbaird.com to acknowledge your receipt of this letter and your agreement with its terms. Again,we thank you for the opportunity to assist you with your proposed offering and the confidence you have placed in us. Very truly yours, ROBERT W.BAIRD&CO.INCORPORATED By: M gDalena Welkomer,Director cc: Mr.Anthony Miceli, Speer Financial Inc. BA TAD Disclosures of Material Financial Characteristics and Financial Risks of Proposed Offering of General Obligation Bonds Robert W. Baird & Co. Incorporated ("Baird") has been engaged as underwriter or placement agent for the proposed offering by you(or the"Issuer") of fixed rate bonds,notes or other debt securities (the"Securities"),to be sold on a negotiated basis.The Securities to be issued will be general obligation notes or bonds. The following is a general description of the financial characteristics and security structures of general obligation bonds, as well as a general description of certain financial risks that you should consider before deciding whether to issue general obligation bonds. This document is being provided to an official of the Issuer who has the authority to bind the Issuer by contract with Baird, who does not have a conflict of interest with respect to the offering. Financial Characteristics The Securities will be general obligations of the Issuer. The Issuer's full faith and credit and unlimited taxing powers will be pledged to the payment of principal of and interest on the Securities when due.Under current law,taxes may be levied by the Issuer on all taxable property in the county without limitation as to rate or amount. Maturity and Interest. The Securities are interest-bearing debt securities that the Issuer will issue. Maturity dates for the Securities will be fixed at the time of issuance and may include serial maturities (specified principal amounts are payable on the same date in each year until final maturity) or one or more term maturities (specified principal amounts are payable on each term maturity date) or a combination of serial and term maturities.Maturity dates,including the final maturity date,are subject to negotiation and will be reflected in the official statement.The state may impose limitations on the final maturity date. At each maturity, the scheduled principal or par amount of the Securities will have to be repaid. The Securities will pay fixed rates of interest typically semi-annually on scheduled payment dates. The interest rates to be paid on the Securities may differ for each series or maturity date of the Securities. The specific interest rates will be determined based on market conditions and investor demand and reflected in the official statement for the Securities. Securities with longer maturity dates will have interest rates that are greater than securities with shorter maturity dates. Redemption. The Securities may be subject to optional redemption,which allows the Issuer, at its option,to redeem some or all of the Securities on a date prior to scheduled maturity,such as in connection with the issuance of refunding bonds to take advantage of lower interest rates. The Securities will be subject to optional redemption only after the passage of a specified period of time,to be negotiated with investors and reflected in the official statement.The amount and maturities of the Securities to be redeemed will be selected by the Issuer.The redemption price will be equal to 100%of the principal amount being redeemed,plus accrued interest.The Issuer will be required to send out a notice of optional redemption to the holders of the Securities at a certain period of time prior to the redemption date. 1 The Securities may also be subject to mandatory sinking fund redemption, which requires the Issuer to redeem specified principal amounts of the Securities annually in advance of the term maturity date,at a redemption price equal to 100% of the principal amount of the Securities to be redeemed. The Securities may also be subject to extraordinary or mandatory redemption upon the occurrence of certain events,authorizing or requiring you to redeem the Fixed Income Bonds at their par amount(plus accrued interest). Credit Enhancements. Fixed Rate Bonds may feature credit enhancements, such as an insurance policy provided by a municipal bond insurance company that guarantees the payment of principal of an interest on the bonds when due in the event of default. Other credit enhancements could include a letter of credit provided by a financial institution, or financial support from a state agency. Tax Status. If the Securities are tax-exempt,counsel will provide an opinion that the interest on the Securities will be excluded from gross income for federal income tax purposes. If the Securities (or a portion thereof) are taxable,interest on the Securities will be included in gross income for federal and state income tax purposes. Security The Securities are general obligations of the Issuer. "General obligations" are debt securities to which your full faith and credit is pledged to pay principal and interest when due. The basic security for payment of the Securities is the requirement that the Issuer levy ad valorem (property) taxes, which taxes are unlimited as to rate and amount, as needed to pay the debt service on the Securities.The Issuer's full faith and credit pledge also means that other funds of the Issuer may be used to pay debt service,except if such funds are prohibited from use by state or federal law or specifically limited to another use. The description above regarding"Security"is only a brief summary of certain possible security provisions for the Bonds and is not intended as legal advice.You should consult with your bond counsel for further information regarding the security for the Securities. Financial Risk Considerations Certain risks may arise in connection with your issuance of the Securities,including some or all of the following: Issuer Default Risk You may be in default if the funds pledged to secure the Securities are not sufficient to pay debt service on the Securities when due.The consequences of a default may be serious for you and, depending on applicable state law and the terms of the authorizing documents, the holders of the Securities may be able to exercise a range of available remedies against you. For example, you may be ordered by a court to raise taxes.Other budgetary adjustments also may be necessary to enable you to provide sufficient funds to pay debt service on the Securities. Further,if you are unable to provide sufficient funds to remedy the default, subject to applicable state law and the terms of the authorizing documents, you may find it necessary to consider available alternatives under state law,including bankruptcy or receivership. Bond holders will also have the right of mandamus or other actions to require you to levy, collect and apply taxes to pay 2 principal and interest on the Securities. The State of Illinois may impose debt and/or revenue limits on the Issuer.The Issuer's payment of debt service on the Securities may be subject to such limits. This description is only a brief summary of issues relating to defaults and is not intended as legal advice. You should consult with your bond counsel for further information regarding defaults and remedies. Redemption Risk Your ability to redeem the Securities prior to maturity may be limited, depending on the terms of any optional redemption provisions. In the event that interest rates decline, you may be unable to take advantage of the lower interest rates to reduce future debt service. In addition,if the Securities are subject to extraordinary or mandatory redemption, you may be required to redeem the bonds at times that are disadvantageous. Refinancing Risk If your financing plan contemplates refinancing some or all of the Securities at maturity (for example, if you have term maturities or if you choose a shorter final maturity than might otherwise be permitted under the applicable federal tax rules),market conditions or changes in law may limit or prevent you from refinancing those Securities when required. Further, limitations in the federal tax rules on advance refunding of bonds (an advance refunding of bonds occurs when tax-exempt bonds are refunded more than 90 days prior to the date on which those bonds may be retired) may restrict your ability to refund the Securities to take advantage of lower interest rates. Reinvestment Risk You may have proceeds to invest prior to the time that you are able to spend those proceeds for the authorized purpose. Depending on market conditions, you may not be able to invest those proceeds at or near the rate of interest that you are paying on the Securities, which is referred to as "negative arbitrage". Tax Compliance Risk (applicable if the Securities are tax-exempt bonds) The issuance of tax-exempt bonds is subject to a number of requirements under the United States Internal Revenue Code,as enforced by the Internal Revenue Service(IRS),and applicable state tax laws.You must take certain steps and make certain representations prior to the issuance of tax-exempt bonds. You also must covenant to take certain additional actions after issuance of the tax-exempt bonds.A breach of your representations or your failure to comply with certain tax-related covenants may cause the interest on the Securities to become taxable retroactively to the date of issuance of the Securities,which may result in an increase in the interest rate that you pay on the Securities or the mandatory redemption of the Securities.The IRS also may audit you or the Securities or your other bonds,in some cases on a random basis and in other cases targeted to specific types of bond issues or tax concerns. If the Securities are declared taxable, or if you are subject to audit, the market price of the Securities and/or your other bonds may be adversely affected. Further,your ability to issue other tax-exempt bonds also may be limited. This description of tax compliance risks is not intended as legal advice and you should consult with your bond counsel regarding tax implications of issuing the Securities. 3 Continuing Disclosure Risk. In connection with the issuance of the Securities,you may be subject to continuing disclosures which require dissemination of annual financial and operating information and notices of material events. Compliance with these continuing disclosure requirements is important and facilitates an orderly secondary market. Failure to comply with continuing disclosure requirements may affect the liquidity and marketability of the Securities, as well as your other outstanding securities. Because instances of material non-compliance with previous continuing disclosure requirements must be disclosed in an official statement, failure to comply with continuing disclosure requirements may also make it more difficult or expensive for you to market and sell future bonds. 4 Exhibit B Preliminary,As of November 11,2024 United City of Yorkville,Kendall County,Illinois General Obligation Bonds(Alternate Revenue Source), Series 2025A, Series 2025B, Series 2025C and Series 2025D Dated: February 19, 2025 Total Issue Sources And Uses Dated 02/19/2025 I Delivered 02/19/2025 GO ARS Ref GO ARS Ref GO ARS GO ARS Bonds, Bonds, Bonds,Series Bonds,Series Series 2025C Series 2025D Issue 2025A(Water) 2025E(PW) (14A Ref) (14 Ref) Summary Sources Of Funds Par Amount of Bonds $25,000,000.00 $37,855,000.00 $2,255,000.00 $1,210,000.00 $66,320,000.00 Reoffering Premium 1,441,572.95 2,430,188.35 149,047.65 54,611.50 4,075,420.45 Total Sources $26,441,572.95 $40,285,188.35 $2,404,047.65 $1,264,611.50 $70,395,420.45 Uses Of Funds Total Underwriter's Discount (0.350%) 87,257.19 132,941.12 7,933.36 4,173.22 232,304.89 Costs of Issuance 101,507.00 151,822.00 20,527.00 14,200.00 288,056.00 Deposit to Project Construction Fund 26,252,000.00 40,000,000.00 - - 66,252,000.00 Deposit to Current Refunding Fund - - 2,375,363.14 1,244,675.83 3,620,038.97 Rounding Amount 808.76 425.23 224.15 1,562.45 3,020.59 Total Uses $26,441,572.95 $40,285,188.35 $2,404,047.65 $1,264,611.50 $70,395,420.45 2025 ABCD I Issue Summary I 11/11/2024 I 2:54 PM Speer Financial, Inc.