[HISTORY: Adopted by the City Commission of the City of Lapeer
as indicated in article histories. Amendments noted where applicable.]
[Adopted as Ch. 42 of the 1978 General Ordinances]
Whenever used in this ordinance, except when otherwise indicated
by the context, the following terms shall have the following meanings:
Act 94, Public Acts of Michigan 1933, as amended.
The Michigan Municipal Bond Authority created pursuant to
Act 227 of 1985.
The Series 1986 Bonds, together with any additional bonds
of equal standing hereafter issued.
The City of Lapeer, County of Lapeer, State of Michigan.
The City Commission of the City.
The repairs, replacements, additions, extensions and improvements
to the System including the acquisition and construction of water
main improvements and water meters, and appurtenances and attachments
thereto.
The revenues and net revenues of the City and shall be construed
as defined in Section 3 of Act 94, including with respect to "Revenues,"
the earnings derived from the investment of moneys in the various
funds and accounts established by this ordinance.
The Water Supply System Revenue Bonds, Series 1986, of the
City in the principal amount of $395,000 authorized by this ordinance.
Direct obligations of the United States of America or obligations
the principal and interest on which is fully guaranteed by the United
States of American, not redeemable at the option of the issuer, the
principal and interest payments upon which, without reinvestment of
the interest, come due at such times ad in such amounts as to be fully
sufficient to pay the interest as it comes due on the Bonds and the
principal and redemption premium, if any, on the Bonds as it comes
due whether on the stated maturity date or upon earlier redemption.
Securities representing such obligations shall be placed in trust
with a bank or trust company, and if any of the Bonds are to be called
for redemption prior to maturity, irrevocable instructions to call
the Bonds for redemption shall be given to the paying agent.
The City's water supply system, including such facilities
thereof as are now existing, are acquired and constructed as the Project,
and all enlargements, extensions, repairs and improvements thereto
hereafter made.
It is hereby determined to be a necessary public purpose of
the City to acquire the Project in accordance with the plans and specifications
prepared by Williams and Works of Grand Rapids, Michigan (the "Engineers")
which plans and specifications are hereby approved.
The total cost of the Project is estimated to be $395,000 including the payment of incidental expenses as specified in § A110-4 of this article, which estimate of cost is hereby approved and confirmed, and the period of usefulness of the Project is estimated to be not less than 40 years.
A.Â
To pay the cost of acquiring and constructing the Project, including
payment of legal, engineering, financial, and other expenses incident
thereto and incident to the issuance and sale of the Series 1986 Bonds,
the City shall borrow the sum of $395,000 and issue the Series 1986
Bonds therefor pursuant to the provisions of Act 94. The remaining
cost of the Project, if any, shall be defrayed from City funds on
hand and legally available for such use and from other funds available
to the City.
B.Â
The purpose of the ordinance is to authorize the issuance of revenue
bonds to finance the cost of acquiring additions, extensions and improvements
to the Project.
[Amended 9-15-1986]
A.Â
The Series 1986 Bonds hereby authorized shall be designated Water Supply System Revenue bonds, series 1986, shall be payable out of the Net Revenues, as set forth more fully in § A110-6 hereof, shall consist of bonds of the denomination of $5,000, or multiples of $5,000 not exceeding the amount of a single maturity, dated as of September 25, 1986, numbered in order of registration from 1 upwards, and shall mature on May 1 in the years and amounts as follows:
|
Year
|
Amount
|
|---|---|
|
1987
|
$10,000
|
|
1988
|
$10,000
|
|
1989
|
$10,000
|
|
1990
|
$10,000
|
|
1991
|
$10,000
|
|
1992
|
$15,000
|
|
1993
|
$15,000
|
|
1994
|
$15,000
|
|
1995
|
$15,000
|
|
1996
|
$20,000
|
|
1997
|
$20,000
|
|
1998
|
$20,000
|
|
1999
|
$20,000
|
|
2000
|
$25,000
|
|
2001
|
$25,000
|
|
2002
|
$25,000
|
|
2003
|
$30,000
|
|
2004
|
$30,000
|
|
2005
|
$35,000
|
|
2006
|
$35,000
|
B.Â
The Series 1986 Bonds shall bear interest at a rate or rates to be
determined on sale thereof, but in any event not exceeding 7% per
annum, payable on May 1 and November 1 of each year, commencing May
1, 1987, by check drawn on the transfer agent mailed to the registered
owner at the registered address, as shown on the registration books
of the City maintained by the transfer agent. Comerica Bank-Detroit,
Detroit, Michigan is hereby designated as the initial transfer agent.
Interest shall be payable to the registered owner of record as of
the 15th day of the month preceding the interest payment date. The
date of determination of registered owner for purposes of payment
of interest as provided in this paragraph may be changed by the City
to conform to market practice in the future. The principal of the
bonds shall be payable at a bank or trust company to be designated
by the City as registrar and transfer agent for this issue or, if
such Bonds are purchased by the bond Bank, at the office of the Bond
bank. The Series 1986 Bonds shall be sold at not less than 98% of
their par value.
C.Â
The Series 1986 Bonds or portions thereof maturing on or after May 1, 1997, may be subject to redemption prior to maturity at the times and prices and in the manner and with notice as set forth in the form of the Series 1986 Bonds in § A110-18 of this article.
D.Â
In case less than the full amount of an outstanding bond is called for redemption, the transfer agent upon presentation of the bond called in part for redemption shall register, authenticate and deliver to the registered owner a new bond in the principal amount of the portion of the original bond not called for redemption. Notice of redemption shall be given in the manner specified in the form of the Series 1986 Bonds contained in § A110-18 of this article.
E.Â
The Bonds shall be executed in the name of the City with the facsimile
signatures of the Mayor and the Clerk and shall have the City's
seal printed on them. No Bond shall be valid until authenticated by
an authorized signer of the transfer agent. The Bonds shall be delivered
to the transfer agent for authentication and be delivered by him or
her to the purchaser in accordance with instructions from the Treasurer
of the City upon payment of the purchase price for the Bonds in accordance
with the bid therefor when accepted. Executed blank bonds for registration
and issuance to transferees shall simultaneously, and from time to
time thereafter as necessary, be delivered to the transfer agent for
safekeeping.
F.Â
Any Bond may be transferred upon the books required to be kept pursuant
to this section by the person in whose name it is registered, in person
or by his duly authorized attorney, upon surrender of the Bond for
cancellation, accompanied by delivery of a duly executed written instrument
of transfer in a form approved by the transfer agent. Whenever any
Bond or Bonds shall be surrendered for transfer, the City shall execute
and the transfer agent shall authenticate and deliver a new Bond or
Bonds, for like aggregate principal amount. The transfer agent shall
require payment by the bondholder requesting the transfer of any tax
or other governmental charge required to be paid with respect to the
transfer. The City shall not be required:
(1)Â
To issue, register the transfer of or exchange any Bond during a period beginning at the opening of business 15 days before the day of the giving of a notice of redemption of Bonds selected for redemption as described in the form of Series 1986 Bonds contained in § A110-18 of this article and ending at the close of business on the day of that giving of notice.
(2)Â
To register the transfer of or exchange any Bond so selected for
redemption in whole or in part, except the unredeemed portion of Bonds
being redeemed in part. The City shall give the transfer agent notice
of a call for redemption at least 35 days prior to the date such notice
of redemption is to be given.
G.Â
The transfer agent shall keep or cause to be kept, at its principal
office, sufficient books for the registration and transfer of the
Bonds, which shall at all times be open to inspection by the City;
and, upon presentation for such purpose, the transfer agent shall,
under such reasonable regulations as it may prescribe, transfer or
cause to be transferred, on said books, Bonds as hereinbefore provided.
H.Â
If any Bond shall become mutilated, the City, at the expense of the
holder of the Bond, shall execute, and the transfer agent shall authenticate
and deliver, a new Bond of like tenor in exchange and substitution
for the mutilated Bond, upon surrender to the transfer agent of the
mutilated Bond. If any Bond issued under this ordinance shall be lost,
destroyed or stolen, evidence of the loss, destruction or theft may
be submitted to the transfer agent and, if this evidence is satisfactory
to both and indemnity satisfactory to the transfer agent shall be
given, and if all requirements of any applicable law including Act
354, Public Acts of Michigan, 1972, as amended ("Act 354"), being
sections 129.131 to 129.135, inclusive, of the Michigan Compiled Laws
have been met the City, at the expense of the owner, shall execute,
and the transfer agent shall thereupon authenticate and deliver, a
new Bond of like tenor and bearing the statement required by Act 354,
or any applicable law hereafter enacted, in lieu of and in substitution
for the Bond so lost, destroyed or stolen. If any such Bond shall
have matured or shall be about to mature, instead of issuing a substitute
Bond the transfer agent may pay the same without surrender thereof.
[Amended 9-15-1986]
The Series 1986 Bonds and the interest thereon shall be payable
solely from the net Revenues, and to secure such payment, there is
hereby created a statutory lien upon the whole of the net Revenues
which shall be a first lien to continue until payment in full of the
principal of and interest on all bonds payable from the Net Revenues,
or, until sufficient cash or Sufficient Government Obligations have
been deposited in trust for payment in full of all Bonds of a series
then outstanding, principal and interest on such Bonds to maturity,
or, if called for redemption, to the date fixed for redemption together
with the amount of the redemption premium, if any. Upon deposit of
cash or Sufficient Government obligations, as provided in the previous
sentence, the statutory lien shall be terminated with respect to that
series of Bonds, the holders of that series shall have no further
rights under this ordinance except for payment from the deposited
funds, and the bonds of that series shall no longer be considered
to be outstanding under this ordinance. The City Treasurer is hereby
directed to deposit with the Transfer Agent payments of the principal
of, premium, if any, and interest on the bond in immediately in immediately
available funds at least two business days prior to the date or which
any such payment is due.
A.Â
The holder or holders of the Bonds representing in the aggregate
not less than 20% of the entire principal amount thereof then outstanding,
may, by suit, action, mandamus or other proceedings, protect and enforce
the statutory lien upon the net Revenues of the System, and may, by
suit, action, mandamus or other proceedings, enforce and compel performance
of all duties of the officers of the City, including the fixing of
sufficient rates, the collection of Revenues, the proper segregation
of the Revenues of the System and the proper application thereof.
The statutory lien upon the Net Revenues, however, shall not be construed
as to compel the sale of the System or any part thereof.
B.Â
If there is a default in the payment of the principal of or interest
upon the Bonds, any court having jurisdiction in any proper action
may appoint a receiver to administer and operate the system on behalf
of the City and under the direction of the court, and by and with
the approval of the court to perform all of the duties of the officers
of the City more particularly set forth herein and in Act 94.
C.Â
The holder or holders of the Bonds shall have all other rights and
remedies given by Act 94 and law, for the payment and enforcement
of the Bonds and the security therefor.
The operation, repair and management of the System and the acquiring
of the Project shall continue to be under the supervision and control
of the City Commission.
The rates and charges for service furnished by and the use of
the System and the methods of collection and enforcement of the collection
of the rates shall be those in effect on the date of adoption of this
ordinance.
No free service or use of the System, or service or use of the
System at less than cost, shall be furnished by the System to any
person, firm or corporation, public or private, or to any public agency
or instrumentality.
The rates now in effect are estimated to be sufficient to provide
for the payment of the expenses of administration and operation and
such expenses for maintenance of the System as are necessary to preserve
the System in good repair and working order, to provide for the payment
of the principal of and interest on all of the Bonds as the same become
due and payable, and the creation and maintenance of the reserve therefor
and to provide for all other obligations, expenditures and funds for
the System required by law and this ordinance. The rates shall be
fixed and revised from time to time as may be necessary to produce
these amounts, and it is hereby covenanted and agreed to fix and maintain
rates for services furnished by the System at all times sufficient
to provide for the foregoing.
The System shall be operated on the basis of an operating year
which shall coincide with the City's fiscal year.
Commencing on September 1, 1986, all Revenues of the System shall be set aside as collected and credited to a fund to be designated WATER SUPPLY SYSTEM RECEIVING FUND (the "Receiving Fund"). In addition, on September 1, 1986 all Revenues in any accounts of the System shall be transferred to the Receiving Fund and credited to the funds and accounts as provided in this § A110-13. The Revenues credited to the Receiving Fund are pledged for the purpose of the following funds and shall be transferred or debited from the Receiving Fund periodically in the manner and at the times and in the order of priority hereinafter specified:
A.Â
Operation and maintenance fund:
(1)Â
Out of the Revenues credited to the Receiving Fund there shall
be first set aside in, or credited to, a fund designated OPERATION
AND MAINTENANCE FUND (the "Operation and Maintenance Fund"), monthly
a sum sufficient to provide for the payment of the next month's
expenses of administration and operation of the System and such current
expenses for the maintenance thereof as may be necessary to preserve
the same in good repair and working order.
(2)Â
The City, prior to the commencement of each operating year beginning
with the operating year next commencing after the effective date of
this ordinance, shall adopt a budget covering the foregoing expenses
for each year. No payments shall be made to the City from moneys credited
to the operation and Maintenance Fund except for services directly
rendered to the System by the City or its personnel.
B.Â
Bond and interest redemption fund.
(1)Â
There shall be established and maintained a separate depositary
fund designated BOND AND INTEREST REDEMPTION FUND (the "Redemption
Fund"), the moneys on deposit therein from time to time to be used
solely for the purpose of paying the principal of, redemption premiums
(if any) and interest on the Bonds. The moneys in the Redemption Fund
(including the Bond Reserve Account) shall be kept on deposit with
the bank or trust company where the principal of and interest on the
Bonds are payable, i.e., the transfer agent.
(2)Â
Out of the Revenues remaining in the Receiving Fund, after provision
for the Operation and Maintenance Fund, there shall be set aside monthly
in the Redemption Fund a sum proportionately sufficient to provide
for the payment when due of the current principal of and interest
on the Bonds, less any amount in the redemption Fund representing
accrued interest on the Bonds. Commencing September 1, 1986, the amount
set aside each month for interest on the Bonds shall be 1/3 of the
total amount of interest on the Bonds next coming due. The amount
set aside each month for principal, commencing September 1, 1986,
shall be 1/3 of the amount of principal next coming due by maturity.
If there is any deficiency in the amount previously set aside, that
deficiency shall be added to the next succeeding month's requirements.
(3)Â
There is established a separate account in the Redemption Fund
to be known as the BOND RESERVE ACCOUNT (the "Bond Reserve Account").
The date of delivery of the bonds there shall be deposited into the
Bond Reserve Account the lesser of 10% of the outstanding principal
amount of the Bonds or the maximum annual debt service requirements
of the Bonds (the "Reserve Amount") is on deposit in the Bond Reserve
account, and the Reserve Amount shall be approximately reduced to
reflect any reduction in the outstanding principal amount and the
maximum annual debt service requirements of the Bonds.
(4)Â
Except as otherwise provided in this section, the moneys credited
to the Bond Reserve Account shall be used solely for the payment of
the principal of, redemption premiums (if any) and interest on the
Bonds as to which there would otherwise be a default. If at any time
it shall be necessary to use moneys credited to the Bond reserve Account
for such payment, then the moneys so used shall be replaced from the
net Revenues first received thereafter which are not required for
current principal and interest requirements until the amount on deposit
equals the Revenue Amount. If additional Bonds are issued, each Ordinance
authorizing the additional Bonds may provide for additional deposits
to the Bond Reserve Account to be made from the proceeds of the additional
Bonds in an amount that will result in the Bond Reserve Account being
equal to the maximum annual principal and interest requirements on
the Bonds outstanding after issuance of the additional Bonds. If,
at the end of any fiscal year the amount in the Bond Reserve Account
exceeds the reserve Amount, then the excess shall be transferred to
the improvement Fund or such other fund as the Commission may designate.
Excess amounts attributable to investment earnings shall be transferred
to the Receiving Fund.
C.Â
Replacement fund. There shall next be established and maintained
a separate depositary fund account, designated REPLACEMENT FUND (the
"Replacement Fund"), the money credited thereto to be used solely
for the purpose of making repairs and replacements to the System.
Out of the Revenues and moneys of the System remaining in the Receiving
Fund after provision has been made for the deposit of moneys in the
Operation and Maintenance Fund and the Redemption Fund (including
the Bond Reserve Account) there may be deposited in the Replacement
Fund such additional funds as the City commission may deem advisable.
If at any time it shall be necessary to use moneys in the Replacement
Fund for the purpose for which the Replacement Fund was established,
the moneys so used shall be replaced from any moneys in the Receiving
Fund which are not required by this ordinance to be used for the Operation
and Maintenance Fund or the Redemption Fund (including the Bond Reserve
Account).
D.Â
Improvement fund. Out of the remaining Revenues in the Receiving
Fund, after meeting the requirements of the Operation and Maintenance
Fund and the Redemption Fund (including the Bond Reserve Account),
there may be next set aside in or credited to a fund to be designated
IMPROVEMENT FUND (the "Improvement Fund") such sums monthly as the
City Commission may deem advisable to be used for improvements, enlargements
or extensions to the System.
E.Â
Surplus moneys. Thereafter, any Revenues in the Receiving Fund after
satisfying all the foregoing requirements of this section may, at
the option of the City Commission, be used for any of the following
purposes:
(1)Â
Transferred to the Replacement Fund, the Improvement Fund or
both.
(2)Â
Transferred to the Redemption Fund and used for the purchase of Bonds on the open market at not more than the fair market value thereof or used to redeem Bonds prior to maturity pursuant to § A110-5 of this article.
(3)Â
Transferred to the general fund of the City and used for any
lawful purpose.
Moneys in the several funds and the accounts established pursuant
to this ordinance, except moneys in the Redemption Fund (including
the Bond Reserve Account) and moneys derived from the proceeds of
sale of the Bonds, may be kept in one or more bank accounts at a bank
or banks designated by resolution of the City Commission, and if kept
in one bank account the moneys shall be allocated on the books and
records of the City in the manner and at the times provided in this
ordinance.
In the event the moneys in the Receiving Fund are insufficient
to provide for the current requirements of the Operation and Maintenance
Fund or of the Redemption Fund, any moneys or securities in other
funds of the System, except the proceeds of sale of the Bonds, shall
be credited or transferred, first, to the Operation and Maintenance
Fund, and second, to the Redemption Fund, to the extent of any deficit
therein.
Moneys in the funds and account established herein and moneys
derived from the proceeds of sale of the Bonds, may be invested by
the City in United States of American obligations or in obligations
the principal of and interest on which is fully guaranteed by the
united States of American, and moneys derived from the proceeds of
sale of the Bonds may also be invested in certificates of deposit
of any bank whose deposits are insured by the Federal Deposit Insurance
Corporation. Investment of moneys in the Redemption Fund being accumulated
for payment of the next maturing principal or interest payment of
the Bonds shall be limited to obligations bearing maturity dates prior
to the date of the next maturing principal or interest payment on
the Bonds. Investment of moneys in the Bond Reserve Account shall
be limited to obligations bearing maturity dates or subject to redemption,
at the option of the holder thereof, not later than five years from
the date of the investment. In the event investments are made, any
securities representing the same shall be kept on deposit with the
bank or trust company having on deposit the fund or funds or account
from which the purchase was made. Profit realized or interest income
earned on investment of funds in the Receiving Fund, Operation and
Maintenance Fund, Redemption Fund (including the Bond Reserve Account),
and Improvement Fund shall be deposited in or credited to the Receiving
Fund at the end of each fiscal year.
A.Â
From the proceeds of the sale of the Bonds there shall be immediately
deposited in the Redemption Fund an amount equal to the accrued interest
and premium, if any, received on the delivery of the Bonds. The balance
of the proceeds of the sale of the Bonds shall be deposited in a bank
or banks, designated by the City Treasurer, qualified to act as depository
of the proceeds of sale under the provisions of Section 15 of Act
94, in an account designated CONSTRUCTION FUND (the "Construction
Fund"). Moneys in the Construction Fund shall be applied solely in
payment of the cost of the Project, including any engineering, legal
and other expenses incident thereto and to the financing thereof.
Payments for construction, either on account or otherwise, shall not
be made unless the registered engineer in charge of such work shall
file with the City Commission a signed statement to the effect that
the work has been completed in accordance with the plans and specifications
therefor; that it was done pursuant to and in accordance with the
contract therefor (including properly authorized change orders), that
such work is satisfactory and that such work has not been previously
paid for.
B.Â
Any unexpended balance of the proceeds of sale of the Bonds remaining
after completion of the Project in the Construction Fund may, in the
discretion of the City Commission, be used for further improvements,
enlargements and extension to the System, if:
C.Â
Any remaining balance after such expenditure shall be paid to the
Redemption Fund and may be used for the purpose of purchasing Bonds
on the open market at not more than the fair market value thereof,
but not more than the price at which the Bonds may next be called
for redemption, or used for the purpose of paying principal of the
Bonds upon maturity or calling Bonds for redemption.
[Amended 9-15-1986]
The Bonds shall be in substantially the following form.
|
UNITED STATES OF AMERICA
| |||
|
STATE OF MICHIGAN
| |||
|
COUNTY OF LAPEER
| |||
|
CITY OF LAPEER
| |||
|
WATER SUPPLY SYSTEM REVENUE BOND,
| |||
|
SERIES 1986
| |||
|
Interest Rate
|
Maturity Date
|
Date of Original Issue\September 25, 1986
| |
|
REGISTERED OWNER:
| |||
|
PRINCIPAL AMOUNT:
|
DOLLARS
| ||
|
The CITY OF LAPEER, County of Lapeer, State of Michigan (the
"City"), for value received, hereby promises to pay the Principal
Amount shown above in lawful money of the Unites States of America
to the registered owner specified above on the Maturity Date specified
above, unless prepaid prior thereto as hereinafter provided, with
interest thereon from the Date of Original Issue or such later date
to which interest has been paid, until paid at the Interest Rate per
annum specified above, payable on May 1, 1987, and semiannually thereafter.
Principal of this bond is payable at the principal corporate trust
office of Comerica Bank-Detroit, Detroit, Michigan or such other transfer
agent as the City may hereinafter designate by notice mailed to the
registered owner not less than 60 days prior to any interest payment
date or at such other place as shall be designated in writing to the
City by the Michigan Municipal Bond Authority (the "Authority"). Interest
on this bond is payable to the registered owner of record as of the
15th day of the month preceding the payment date as shown on the registration
books kept by the transfer agent by check or draft mailed to the registered
owner at the registered address, and for the prompt payment thereof,
the revenues of the Water Supply System of the City (collectively
the "System"), including all appurtenances, extensions and improvements
thereto, after provision has been made for reasonable and necessary
expenses of operation, maintenance and administration (the "Net Revenues"),
are irrevocably pledged and a statutory first lien thereon is hereby
recognized and created.
| |||
|
The City has agreed that it will deposit with the Paying Agent
payments of the principal of, premium, if any, and interest on the
bond in immediately available funds at least two business days prior
to the date on which any such payment is due whether by maturity,
redemption or otherwise.
| |||
|
This bond is one of a series of bonds of even original issue
date aggregating the principal sum of $395,000 issued pursuant to
Ordinance No. 42, as amended, duly adopted by the City Commission
of the City, and under and in full compliance with the Constitution
and statutes of the State of Michigan, including specifically Act
94, Public Acts of Michigan, 1933, as amended, for the purpose of
paying part of the cost of acquiring and constructing repairs, replacements,
additions, extensions and improvements to the System.
| |||
|
For a complete statement of the revenues from which and the
conditions under which this bond is payable, a statement of the conditions
under which additional bonds of equal standing may hereafter be issued
and the general covenants and provisions pursuant to which this bond
is issued, reference is made to the above-described Ordinance.
| |||
|
Bonds or portions of bonds in multiples of $5,000, of this issue
maturing in the year 1997 and thereafter may be redeemed at the option
of the City, in inverse order of maturity and within any maturity
by lot, on any interest payment date on or after May 1, 1996 at par
and accrued interest to the date fixed for redemption plus a premium
expressed as a percentage of par value as follows:
| |||
|
Period During Which Redeemed
|
Redemption Price
| ||
|
May 1, 1996 to April 30, 1997, inclusive
|
102%
| ||
|
May 1, 1997 to April 30, 1998, inclusive
|
101%
| ||
|
May 1, 1998 to April 30, 1999, inclusive
|
101%
| ||
|
May 1, 1999 to April 30, 2000, inclusive
|
100%
| ||
|
May 1, 2000 and thereafter
|
100%
| ||
|
Written notice of such redemption must be given to the Transfer
Agent by the City at least 35 days prior to the date on which such
redemption is to be made.
| |||
|
In case less than the full amount of an outstanding bond is
called for redemption, the transfer agent upon presentation of the
bond called in part for redemption shall register, authenticate and
deliver to the registered owner a new bond in the principal amount
of the portion of the original bond not called for redemption.
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|
Notice of redemption shall be given to the registered owners
of the bonds to be redeemed by mailing of such notice not less than
30 days prior to the date fixed for redemption to the registered owner
at the address of the registered owner as shown on the registration
books of the City. Bonds so called for redemption shall not bear interest
after the date fixed for redemption, provided funds are on hand with
the transfer agent to redeem the bond called for redemption.
| |||
|
In the event of a default in the payment of principal or interest
hereon when due, whether by acceleration or otherwise, the amount
of such default shall, until paid, bear inters (the "additional interest")
at a rate equal to the rate of interest which is 1% above the Authority's
cost of providing funds (as determined by the Authority) to make payment
on the bonds of the Authority issued to provide funds to purchase
this Bond. Such additional interest shall be payable on the demand
of the Authority. In the event that (for reasons other than the default
in the payment of any municipal obligation purchased by the Authority)
the investment of amounts in the reserve account established by the
Authority for the bonds of the Authority issued to provide funds to
purchase this bond, fail to provide sufficient available funds (together
with any other funds which may be made available for such purpose)
to pay the interest on outstanding bond of the Authority issued to
fund such account, the City shall and hereby agrees to pay on demand
only the Issuer's pro rata share (as determined by the Authority)
of such deficiency as additional interest on this bond.
| |||
|
This bond is a self-liquidating bond and is not a general obligation
of the City and does not constitute an indebtedness of the City within
any constitutional or statutory limitation, but is payable, both as
to principal and interest, solely from the Net Revenues of the System.
The principal of and interest on this bond are secured by the statutory
lien hereinbefore mentioned.
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|
The City has covenanted and agreed, and does hereby covenant
and agree to fix and maintain at all times while any bonds payable
from the net Revenues of the System shall be outstanding, such rates
for service furnished by the System as shall be sufficient to provide
for payment of the interest upon and the principal of the bonds of
this issue and any additional bonds of equal standing as and when
the same shall become due and payable, and to maintain a bond redemption
fund (including a bond reserve account) therefor, to provide for the
payment of expenses of administration and operation and such expenses
for maintenance of the System as are necessary to preserve the same
in good repair and working order, and to provide for such other expenditures
and funds for the System as are required by the ordinance.
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This bond is transferable only upon the books of the City kept
for that purpose at the office of the transfer agent by the registered
owner hereof in person, or by his attorney duly authorized in writing,
upon the surrender of this bond together with a written instrument
of transfer satisfactory to the transfer agent duly executed by the
registered owner or his attorney duly authorized in writing and thereupon
a new registered bond or bonds in the same aggregate principal amount
and of the same maturity shall be issued to the transferee in exchange
therefor as provided in the ordinance authorizing the bonds, and upon
the payment of the charges, if any, therein prescribed.
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It is hereby certified and recited that all acts, conditions
and things required by law precedent to and in the issuance of this
bond and the series of bonds of which this is one have been done and
performed in regular and due time and form as required by law.
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This bond is not valid or obligatory for any purpose until the
transfer agent's Certificate of Authentication on this bond has
been executed by the transfer agent.
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IN WITNESS WHEREOF, the City of Lapeer, County of Lapeer, State
of Michigan, by its City Commission, has caused this bond to be executed
with the facsimile signatures of its Mayor and its Clerk and its corporate
seal to be printed on this bond, all as of the twenty-fifth-day of
September, A.D. 1986.
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CITY OF LAPEER
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By__________
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Mayor
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(Seal)
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Countersigned:
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__________
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Clerk
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The City covenants and agrees with the holders of the Bonds
that so long as any of the Bonds remain outstanding and unpaid as
to either principal or interest.
A.Â
The City will maintain the System in good repair and working order
and will operate the same efficiently and will faithfully and punctually
perform all duties with reference to the System required by the Constitution
and laws of the State of Michigan and this ordinance.
B.Â
The City will keep proper books of record and account separate from
all other records and accounts of the City, in which shall be made
full and correct entries of all transactions relating to the System.
The City shall have an annual audit of the books of record and account
of the System for the preceding operating year made each year by an
independent certified public accountant, and a copy of the audit shall
be mailed to the manager of each syndicate or account originally purchasing
any issue of the Bonds. The auditor shall comment on the manner in
which the City is complying with the requirements of the ordinance
with respect to setting aside and investing moneys and meeting the
requirements for acquiring and maintaining insurance. The audit shall
be completed and so made available not later than four months after
the close of each operating year.
C.Â
The City will maintain and carry, for the benefit of the holders
of the Bonds, insurance on all physical properties of the System and
liability insurance, of the kinds and in the amounts normally carried
by municipalities engaged in the operation of water supply systems.
All moneys received for losses under any such insurance policies shall
be applied solely to the replacement and restoration of the property
damaged or destroyed, and to the extent not so used, shall be used
for the purpose of redeeming or purchasing Bonds.
D.Â
The City will not sell, lease or dispose of the System, or any substantial
part, until all of the Bonds have been paid in full, both as to principal
and interest or provision made thereof as herein provided the City
will operate the System as economically as possible, will make all
repairs and replacements necessary to keep the System in good repair
and working order, and will not do or suffer to be done any act which
would affect the System in such a way as to have a material adverse
effect on the security for the Bonds.
E.Â
The City will not grant any franchise or other rights to any person,
firm or corporation to operate a System that will compete with the
System and the City will not operate a system that will compete with
the System.
F.Â
The City will cause the Project to be acquired and constructed promptly
and in accordance with the plans and specification therefor.
A.Â
Except as hereinafter provided, the City shall not issue additional
Bonds of equal or prior standing with the Series 1986 Bonds.
B.Â
The right is reserved in accordance with the provisions of Act 94,
to issue additional Bonds payable from the Revenues of the System
which shall be of equal standing and priority of lien on the Net Revenues
of the System with the Bonds but only for the following purposes and
under the following terms and conditions:
(1)Â
To complete the Project in accordance with the plans and specifications
therefor. Such bonds shall not be authorized unless the engineers
in charge of construction shall execute a certificate evidencing the
fact that additional funds are needed to complete the Project in accordance
with the plans and specifications therefor and stating the amount
that will be required to complete the Project. If such certificate
shall be so executed and filed with the City Clerk, it shall be the
duty of the Commission to provide for and issue additional revenue
bonds in the amount stated in said certificate to be necessary to
complete the Project in accordance with the plans and specifications
plus an amount necessary to issue such bonds or to provide for part
or all of such amount from other sources.
(2)Â
For subsequent repairs, extensions, enlargements and improvements
to the System or for the purpose of refunding part of any Bonds then
outstanding and paying costs of issuing such additional Bonds including
deposits which may be required to be made to the Bond Reserve Account.
Bonds for such purposes shall not be issued pursuant to the subparagraph:
(a)Â
Unless the average actual or augmented Net revenues of the System
for the then last two preceding twelve-month operating years or the
actual or augmented Net Revenues for the last preceding twelve-month
operating year, if the same shall be lower than the average, shall
be equal to at least 125% of the average amount of principal and interest
thereafter maturing in any operating year on the then outstanding
Bonds and on the additional Bonds then being issued. If the additional
Bonds are to be issued in whole or in part for refunding outstanding
Bonds the average annual principal and interest requirements shall
be determined by deducting from the principal and interest requirements
for each operating year the annual principal and interest requirements
of any bond to be refunded from the proceeds of the additional Bonds.
For purposes of this subparagraph.
(b)Â
The City may elect to use as the last preceding operating year
any operating year ending not more than 16 months from the date of
delivery of the additional Bonds and as the next to the last preceding
operating year, any operating year ending not more than 28 months
from the date of delivery of the additional Bonds. If the System rates,
fees or charges shall be increased at or prior to the time of authorizing
the additional Bonds, the Net Revenues for each of the two preceding
operating years shall be augmented by an amount reflecting the effect
of the increase had the System's billings during such operating
years been at the increased rates. In addition., the actual Net Revenues
for each of the two preceding operating years may be augmented by
the estimated increase in Net Revenues to accrue as a result of the
acquisition of the repairs, extensions, enlargements and improvements
to the System to be paid for in whole or in part from the proceeds
of the additional Bonds to be issued. In addition, the actual net
Revenues may be augmented by an amount equal to the investment income
representing interest on investments estimated to be received each
operating year from the addition to the Bond Reserve Account to be
funded from the proceeds of the additional Bonds being issued. Determination
by the City Commission as to existence of conditions permitting the
issuance of additional Bonds shall be conclusive. No additional Bonds
of equal standing as to the net Revenues of the System shall be issued
pursuant to the authorization contained in this subparagraph if the
City shall then be in default in making its required payments to the
Operation and Maintenance Fund or the Redemption Fund.
(c)Â
For refunding a part of the outstanding Bonds and paying costs
of issuing such additional Bonds including deposits which may be required
to be made to the Bond Reserve Account. No additional Bonds shall
be issued pursuant to this subsection unless the maximum amount of
principal and interest maturing in any operating year after giving
effect to the refunding shall be less than the maximum amount of principal
and interest maturing in any operating year prior to giving effect
to the refunding.
The Treasurer shall, if required by Act 94, make application
to the Municipal Finance Division or to the State Treasurer for authority
to issue and sell the Series 1986 Bonds. The City Commission shall,
if the Series 1986 Bonds are sold at public sale, adopt a form of
notice of sale for the Series 1986 Bonds and, upon approval of the
Department, if such approval is required, the City Clerk shall fix
a date for sale of the Series 1986 Bonds and publish the notice of
sale in the Michigan Investor or the Detroit legal news, Detroit,
Michigan. The City Commission shall receive bids for the Series 1986
Bonds (unless the Bonds are sold in a sale to the Bond Bank), award
sale of the Series 1986 Bonds to the successful bidder determined
in accordance with Act 94 and this ordinance, and take all further
necessary steps to issue and deliver the Series 1986 Bonds.
The City hereby covenants to use its best efforts, to the extent
permitted by law, to comply with the requirements of the Internal
Revenue Code of 1954, as currently amended, and the requirements of
H.R. 3838, the Tax Reform Act of 1985 (the "Bill"), to preserve the
tax exemption of the interest on the Bonds, unless, in the opinion
of bond counsel, failure to comply with the requirements of the Bill
would not impair the exemption of interest on the Bonds from federal
income or State of Michigan taxation. The City hereby designates this
issue of bonds as "qualified project bonds" for the purposes of the
Bill or any similar amendments to the United States Internal Revenue
Code as finally enacted.
All ordinances, resolutions or order, or parts thereof, in conflict
with the provisions of this ordinance are, to the extent of such conflict,
repealed.
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. The paragraph heading in the ordinance are furnished
for convenience of reference only and shall not be considered to be
part of this ordinance.
This ordinance shall be published in full in The Lapeer County
Press, a newspaper of general circulation in the City qualified under
State law to publish legal notices; promptly after its adoption, and
shall be recorded in the ordinance Book of the City and such recording
authenticated by the signatures of the Mayor and City Clerk.
The City Clerk is hereby authorized to make application to the Michigan Municipal Bond Authority and to file any additional applications for approval of the Bonds by the Department of Treasury. The City Commission shall determine by resolution whether to sell the Bonds to the Bond Bank or by public sale. If the Bonds are sold to the Bond Bank, then the taxes collected by the State of Michigan (the "State") and returned to the City or State revenue sharing monies shall be pledged for the payment of the Bonds and Bond form contained in § A110-18 of this article shall be amended to reflect this pledge. The City Manager of the City shall negotiate an agreement with the Bond Bank for payment of such taxes to the Bond Bank or a trustee pursuant to the provisions of Section 23 of the Bond Bank's enabling act.
This ordinance shall be effective on adoption.
