[HISTORY: Adopted by the City Commission of the City of Lapeer
as indicated in article histories. Amendments noted where applicable.]
[Adopted 7-15-1987 (Ch.
44 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.[1]
The Michigan Municipal Bond Authority created pursuant to
Act 227 of 1985.[2]
Comerica Bank-Detroit, Detroit, Michigan or any successor
thereto.
The Series 1987 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.
The revenues and net revenues of the City and shall be construed
as defined in Section 3 of Act 94,[3] including, with respect to "revenues," the earnings derived
from the investment of moneys in the various funds and accounts established
by this ordinance.
The Sanitary Sewer Revenue Bonds (Series 1987) of the City
in the principal amount of $520,000 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 America, 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 and 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 sanitary sewer 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 the City's consulting engineers (the "engineers"),
which plans and specifications are hereby approved.
The total cost of the project is estimated to be $520,000 including the payment of incidental expenses as specified in § A100-4 of this ordinance, 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.
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 1987 bonds,
the City shall borrow the sum of $520,000 and issue the Series 1987
bonds therefor pursuant to the provisions of Act 94.[1] 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.
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.
[1]
Editor's Note: See MCLA § 141.101 et seq.
A.
The Series 1987 bonds hereby authorized shall be designated SANITARY SEWER REVENUE BOND (SERIES 1987), shall be payable out of the net revenues, as set forth more fully in § A100-6 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 August 6, 1987, numbered in order of registration from one upwards, and shall mature on May 1 in the years and amounts as follows:
|
Year
|
Amount
|
|---|---|
|
1988
|
$5,000
|
|
1989
|
$5,000
|
|
1990
|
$5,000
|
|
1991
|
$5,000
|
|
1992
|
$10,000
|
|
1993
|
$10,000
|
|
1994
|
$10,000
|
|
1995
|
$10,000
|
|
1996
|
$10,000
|
|
1997
|
$15,000
|
|
1998
|
$15,000
|
|
1999
|
$15,000
|
|
2000
|
$15,000
|
|
2001
|
$20,000
|
|
2002
|
$20,000
|
|
2003
|
$20,000
|
|
2004
|
$25,000
|
|
2005
|
$25,000
|
|
2006
|
$30,000
|
|
2007
|
$30,000
|
|
2008
|
$35,000
|
|
2009
|
$40,000
|
|
2010
|
$45,000
|
|
2011
|
$50,000
|
|
2012
|
$50,000
|
B.
The Series 1987 bonds shall bear interest at a rate or rates to be
determined on sale thereof, but in any event not exceeding 10% per
annum, payable on May 1 and November 1 of each year, commencing May
1, 1988. The bonds shall be sold at a price not less than 97% of the
par value of the bonds. Interest shall be paid by check or draft drawn
on the transfer agent or the Authority's Depository, as applicable,
mailed to the registered owner of the bonds at the registered address,
as shown on the registration books of the City maintained by the transfer
agent or the City. Interest shall be payable to the registered owner
of record as of the 15th day of the month prior to the payment date
for each interest payment. The date of determination of the 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 the principal corporate
trust office of Comerica Bank-Detroit, Detroit, Michigan as registrar
and transfer agent for the bonds (the "transfer agent") if the Authority
is not the owner of the bonds. The City may select another bank or
trust company located in the State of Michigan to serve as transfer
agent upon notice to the registered owner of the bonds not less than
60 days prior to an interest payment date. Notwithstanding any other
provision of this resolution, so long as the Authority is the owner
of the bonds:
(1)
The bonds are payable as to principal, premium if any, and interest
at the principal corporate trust office of Comerica Bank-Detroit,
Detroit, Michigan or at such other place as shall be designated in
writing to the City by the Authority (the "Authority's Depository").
(2)
The City agrees that it will deposit with the Authority's Depository
payments of the principal of, premium, if any, and interest on the
bonds in immediately available funds at least five business days prior
to the date on which any such payment is due whether by maturity,
prepayment or otherwise.
(3)
Written notice of any redemption of the bonds shall be given by the
City and received by the Authority's Depository, at least 40
days prior to the date on which such redemption is to be made.
C.
The Series 1987 bonds shall 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 1987 bonds in § A100-18 of this ordinance.
D.
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 1987 bonds contained in § A100-18 of this ordinance.
E.
The bonds shall be signed by the manual or facsimile signatures of
the Mayor and the Clerk of the City and shall have the corporate seal
of the City or a facsimile thereof impressed or imprinted thereon.
No bond of this series shall be valid until authenticated by an authorized
representative of the transfer agent except that, in the event the
bonds are purchased by the Authority, the authentication of the bonds
by the transfer agent shall not be required while the Authority is
the owner thereof and the bonds shall be valid upon execution by the
manual or facsimile signature of the Mayor and manual signature of
the Clerk. The bonds shall be delivered to the transfer agent for
authentication, if required, and be delivered to the purchaser in
accordance with instructions from the City Treasurer 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.
Any bond may be transferred upon the books required to be kept pursuant
to this section by the person 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)
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 1987 bonds contained in § A100-18 of this ordinance and ending at the close of business on the day of that giving of notice
(2)
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 45 days prior to the date such notice
of redemption is to be given.
G.
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.
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, 1872, 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 laws 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 7-27-1987]
A.
The Series 1987 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 holder 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.
B.
The foregoing lien shall continue until payment in full for the principal
of and interest on all the bonds or, until sufficient cash or direct
obligations of the United States of America or obligations the principal
of and interest on which is fully guaranteed by the United States
of America, not redeemable at the option of the issuer, the principal
and interest payments on which, without reinvestment of interest,
come due at such times and in such amounts as to be fully sufficient
to pay, when due, the principal of, redemption premium, if any, and
interest on the bonds on the stated maturity date or earlier redemption,
shall have been deposited in trust for payment in full for all bonds
with respect to which this ordinance is to be defeased to their maturity,
or, if called for redemption, to the date fixed for redemption. If
the bonds are owned by the Authority at the time of such deposit,
the sufficiency of such deposit shall be verified by a nationally
recognized firm of certified public accountants. Upon such deposit,
the pledge and security herein created shall be terminated with respect
to the bonds, the holders of the bonds shall have no further rights
under this ordinance except for payment from the deposited funds,
and the bonds shall no longer be considered to be outstanding under
this ordinance.
A.
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.
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.[1]
[1]
Editor's Note: See MCLA § 141.101 et seq.
C.
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.
A.
Rates and charges presently in effect for the system 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. In order to accomplish the foregoing such rates
shall be in amounts which will provide annual net revenues equal to
or greater than 115% of the annual debt service requirements of the
bonds and 100% of the debt service requirements of any other bond
issue to be paid from the revenues of the system. 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 and maintain
rates for services furnished by the system at all times sufficient
to provide for the foregoing.
B.
Effective July 1, 1988, the system's rates and charges presently
in effect shall be increased by 30%; provided, however, in the event
the City obtains a report of its engineer that a different rate of
increase shall be necessary to meet the requirements of this section,
in which case the system rates and charges shall be increased by the
rate set forth in such reports.
The system shall be operated on the basis of an operating year
which shall coincide with the City's fiscal year.
Commencing on August 1, 1987, all revenues of the system shall be set aside as collected and credited to a fund to be designated SANITARY SEWER REVENUE (SERIES 1987) RECEIVING FUND (the "Receiving Fund"). In addition, on August 1, 1987 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 § A100-13. 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.
Operation and Maintenance Fund:
(1)
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)
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.
Bond and Interest Redemption Fund:
(1)
There shall be established and maintained a separate depository
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. 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 November 1, 1987, 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
November 1, 1987, shall be 1/3 of the amount of principal next coming
due by maturity. Commencing May 1, 1988, the amount set aside each
month for principal shall be 1/12 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.
(2)
There is established a separate account in the Redemption Fund
to be known as the BOND RESERVE ACCOUNT (the "Bond Reserve Account").
On or before 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 bond or the maximum annual debt service requirements
of the bonds (the "Reserve Amount"), and thereafter, 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.
(3)
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 shall provide for additional deposits
to 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.
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.
On or before the date of delivery of the bonds there shall be deposited
into the Replacement Fund the sum of $50,000. 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 replace 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.
Improvement Fund. On or before the date of delivery of the bonds,
there shall be deposited into a fund to be designated IMPROVEMENT
FUND (the "Improvement Fund") the sum of $25,000. 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 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.
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)
Transferred to the Replacement Fund, the Improvement Fund or
both.
(2)
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 § A100-5 of this ordinance.
(3)
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 account 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 America obligations or in obligations
the principal of and interest on which is fully guaranteed by the
United States of America, 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.
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,[1] 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 settlement 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.
[1]
Editor's Note: See MCLA § 141.115.
B.
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:
(1)
At the time of such expenditures, such use is approved by the
Department of Treasury, if such permission is then required by law;
and
(2)
Redemption of the bond is not required under § A100-23 of this ordinance. 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.
The bonds shall be in substantially the following form; provided,
however, that so long as the Authority owns the bonds, the sections
of the bonds pertaining to the transfer agent shall be amended or
deleted accordingly as may be deemed necessary or appropriate by the
City Clerk, and if the Authority ceases to own the bonds, those provisions
of the bonds pertaining to the Authority shall be deleted and the
provisions relating to registration and transfer of the bonds shall
be inserted.
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UNITED STATES OF AMERICA
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STATE OF MICHIGAN
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COUNTY OF LAPEER
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|
CITY OF LAPEER
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SANITARY SYSTEM REVENUE BOND (SERIES 1987)
| ||||
|
INTEREST RATE
|
MATURITY DATE
|
DATE OF ORIGINAL ISSUE
August 6, 1987
|
CUSIP
| |
|
REGISTERED OWNER:
| ||||
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PRINCIPAL AMOUNT:
|
DOLLARS
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|
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 United 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, 1988, 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 hereafter designate by notice mailed
to the registered owner hereof not less than 60 days prior to any
interest payment date (the "Transfer Agent"). Interest on this bond
is payable by check or draft mailed by the transfer agent to the person
or entity who is as of the 15th day of the month prior to each interest
payment date, the registered owner, at the registered address as shown
on the registration books of the City maintained by the transfer agent)
(Notwithstanding any other provision of this Bond, so long as the
Michigan Municipal bond Authority (the "Authority") is the owner of
this bond, (a) this bond is payable as to principal, premium, if any,
and interest at the principal corporate trust office of Comerica Bank-Detroit,
Detroit, Michigan, or at such other place as shall be designated in
writing to the City by the Authority (the "Authority's Depository");
(b) the City agrees that it will deposit with the Authority's
Depository payments of the principal of, premium, if any, and interest
on this bond in immediately available funds at least five business
days prior to the date on which any such payment is due whether by
maturity, redemption or otherwise; and written notice of any redemption
of this bond shall be given by the City and received by the Authority's
Depository, at least 40 days prior to the date on which such redemption
is to be made) and for the prompt payment thereof, the revenues of
the Sanitary Sewer 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.
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|
This bond is one of a series of bonds of even original issue
date aggregating the principal sum of $520,000 issued pursuant to
Ordinance No. _____, 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.
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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 maturing in the years 1988 to 1997, inclusive, shall not
be subject to redemption prior to their due date.
| ||||
|
Bonds or portions of bonds maturing in the years 1998 to 2002,
inclusive, are subject to optional redemption in whole or in part
in such order as the City shall determine, in integral multiples of
$5,000 on any date on or after May 1, 1997 at the following redemption
prices (expressed as percentages of their principal amounts), plus
accrued interest to the redemption date.
| ||||
|
Period During Which Redeemed
|
Redemption Price
| |||
|
May 1, 1997 to April 30, 1998, inclusive
|
102%
| |||
|
May 1, 1998 to April 30, 1999, inclusive
|
101%
| |||
|
May 1, 1999 to April 30, 2000, inclusive
|
101%
| |||
|
May 1, 2000 to April 30, 2001, inclusive
|
100%
| |||
|
May 1, 2001 and thereafter
|
100%
| |||
|
No premium shall be paid on bonds or portions thereof redeemed
on or after May 1, 2001.
| ||||
|
(Written notice of such redemption must be given to the Authority's
Depository by the City at least 40 days prior to the date on which
such redemption is to be made.)
| ||||
|
(Notice of redemption of any bond or portion thereof shall be
given at least 30 days prior to the date fixed for redemption by mail
to the registered owner at the registered address shown on the registration
books of the City kept as provided in the above described resolution.
Bonds shall be called for redemption in multiples of $5,000 and any
bond of a denomination of more than $5,000 and shall be treated as
representing the number of bonds obtained by dividing the denomination
of the bond by $5,000 and such bond may be redeemed in part. The notice
of redemption for a bond redeemed in part shall state the upon surrender
of the bond to be redeemed a new bond or bonds in aggregate principal
amount equal to the unredeemed portion of the bond surrendered shall
be issued to the registered owner thereof. No further interest on
the bonds or portions of bonds called for redemption shall accrue
after the date fixed for redemption, whether presented for redemption
or not, provided funds are on hand to redeem the same.)
| ||||
|
(Any bond may be transferred by the person in whose name it
is registered, in person or by his duly authorized attorney or legal
representative, upon surrender of the bond to the transfer agent for
cancellation, together with a duly executed written instrument of
transfer in a form approved by the transfer agent. Whenever any bond
is surrendered for transfer, the transfer agent shall authenticate
and deliver a new bond or bonds, in like aggregate principal amount,
interest rate and maturity. The transfer agent shall require the bondholder
requesting the transfer to pay any tax or other governmental charge
required to be paid with respect to the transfer. The transfer agent
will not (i) 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 mailing of a notice of redemption of bonds selected
for redemption and ending at the close of business on the day of that
mailing, or (ii) register the transfer of or exchange any bond selected
for redemption in whole or in part, except the unredeemed portion
of bonds being redeemed in part.)
| ||||
|
This bond is a self-liquidating bond and is not a general obligation
of the City and does not constitute and 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.
| ||||
|
The City has covenanted and agreed, and does hereby covenant
and agree to fix and maintain at all time 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.
| ||||
|
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.
| ||||
|
(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.)
| ||||
|
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 (manual) (fascimile) signatures of its Mayor and its Clerk
and its corporate seal to be (impressed) (printed) on this bond, all
as of the Date of Original Issue.
| ||||
|
CITY OF LAPEER
| ||||
|
By __________
| ||||
|
Mayor
| ||||
|
(Seal)
| ||||
|
Countersigned:
| ||||
|
__________
| ||||
|
Clerk
| ||||
|
(FORM OF TRANSFER AGENT'S CERTIFICATE OF AUTHENTICATION
TO BE USED IF THE MICHIGAN MUNICIPAL BOND AUTHORITY IS NOT THE OWNER
OF THE BONDS)
| ||||
|
Certificate of Authentication
| ||||
|
This bond is one of the bonds described in the within-mentioned
Ordinance.
| ||||
|
__________
| ||||
|
Transfer Agent
| ||||
|
By __________
| ||||
|
Authorized Signatory
| ||||
|
Date of Registration:
| ||||
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.
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.
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.
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 sanitary sewer 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.
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.
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.
The City will cause the project to be acquired and constructed promptly
and in accordance with the plans and specification therefor.
G.
Except as required by law, the City will at no time take any action
or omit to take any action which, by commission or omission, would
cause the bonds to be "arbitrage bonds" as defined in Section 148
of the Internal Revenue Code of 1986, as may be amended from time
to time, and the regulations from time to time promulgated or proposed
thereunder (the "Code") including failing to rebate arbitrage earnings
to the federal government if such rebate is required by the Code.
H.
The City will not permit at any time or times any of the proceeds
of the bonds or any other funds of the City to be used directly or
indirectly in a manner which would result in the exclusion of any
Bonds of the City from the treatment afforded by Section 103(a) of
the Code, as from time to time amended, including, but not limited
to, by reason of the classification of such bonds or Bonds a "private
activity bonds" within the meaning of Section 141 of the Code, as
"private loan bonds" within the meaning of Section 141 of the Code,
or a obligations guaranteed by the United States of America, as provided
in Section 149(b) of the Code; or cause interest on the bonds to be
taxable for federal income tax purposes, or cause the interest on
the bonds to be includable in any alternative minimum tax other than
an alternative minimum tax which applies to all tax exempt bonds or
Bonds generally; or which would cause the proceeds to be used directly
or indirectly by an organization qualifying under Section 501(3) of
the Code.
A.
Except as hereinafter provided, the City shall not issue additional
Bonds of equal or prior standing with the Series 1987 Bonds.
B.
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)
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)
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 this subparagraph, (a) 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 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 Subsection B(2), 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. 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. 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.
[Amended 7-27-1987]
(3)
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 Mayor, Clerk, Treasurer, members, staff, council, and Bond
council for the City, or any of the, are authorized on behalf of the
City to apply for such rulings, order and approvals and file or submit
such elections or other documents to any governmental agency in order
that the bonds may be validly issued and the interest thereon be exempt
from federal income taxation and are further hereby authorized to
execute, date and deliver such other certificates, documents, instruments,
and opinions and other papers as may be required by the Purchase Contract
or as may be necessary or convenient to effectuate the sale and delivery
of the bonds in accordance with the terms of the Purchase Contract.
The officers, agents and employees of the City are authorized to take
all other actions necessary and convenient to facilitate sale of the
bonds.
A.
The City
hereby authorizes the bonds to be sold to the Authority, upon receipt
of approval or exception from prior approval of the Michigan Department
of Treasury, in an amount equal to the amount described above and
at a net interest rate or cost not more than the rate described above,
all as shall be approved by the Mayor and City Clerk at the time of
sale and pursuant to the terms and provisions further described in
this ordinance.
B.
The form
of the Purchase Contract between the City and the Authority relating
to the sale of the bonds on file with the City Clerk is hereby approved.
C.
The Mayor
and Clerk are hereby authorized to execute and deliver the Purchase
Contract in the form approved, with such changes and insertions in
such document as may be necessary or desirable, permitted by law,
and not materially adverse to the City.
All ordinances, resolutions or orders, 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 headings in this 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 Flint Journal,
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.
This ordinance shall be effective on adoption. (July 15, 1987)
[Adopted 7-19-2010 by Ord. No. 61 (Ch. 61 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.[1]
For any operating year the excess of revenues over expenses
for the system determined in accordance with generally accepted accounting
principles, to which shall be added depreciation, amortization, interest
expense on Bonds and payments to the Issuer in lieu of taxes, to which
may be made the following adjustments.
Revenues may be augmented by the amount of any rate increases
adopted prior to the issuance of additional Bonds or to be placed
into effect before the time principal or interest on the additional
Bonds becomes payable from Revenues as applied to quantities of service
furnished during the operating year or portion thereof that the increased
rates were not in effect.
Revenues may be augmented by amounts which may be derived from
rates and charges to be paid by new customers of the system.
The Michigan Municipal Bond Authority.
The Mayor, City Manager, Finance Director, and Clerk.
The Series 2010 Bonds, together with any additional Bonds
of equal or superior standing as the context indicates hereafter issued.
The City of Lapeer, County of Lapeer, State of Michigan.
The Michigan Department of Environmental Quality.
The additions, extensions and improvements to the system
together with appurtenances and attachments thereto.
The revenues and net revenues of the system and shall be
construed as defined in Section 3 of Act 94,[2] including with respect to "Revenues," the earnings derived
from the investment of moneys in the various funds and accounts established
by this ordinance.
The Wastewater System Revenue Bonds of the Issuer in the
principal amount of not to exceed $11,000,000 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 America, 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 and 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 Wastewater System of the Issuer, 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 Issuer to acquire and construct the project in accordance with
the plans and specifications prepared by the City's engineers,
which plans and specifications are hereby approved. The project qualifies
for the State of Michigan Revolving Loan Fund financing program being
administered by the MDEQ and the Authority, whereby bonds of the Issuer
are sold to the Authority and bear interest at a fixed rate of not
to exceed 4% per annum.
The total cost of the project is presently estimated not to exceed $11,000,000 including the payment of incidental expenses as specified in § A100-30 of this ordinance, 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.
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 2010 Bonds,
the Issuer shall borrow the sum of not to exceed $11,000,000 (the
"Principal Amount") and issue the Series 2010 Bonds therefor pursuant
to the provisions of Act 94.[1]
[1]
Editor's Note: See MCLA § 141.101 et seq.
A.
The Series 2010 Bonds of the Issuer, to be designated WASTEWATER
SYSTEM REVENUE BONDS, Series 2010 authorized to be issued in the Principal
Amount or as otherwise finally determined by order of the MDEQ for
the purpose of paying the cost of the project, including the costs
incidental to the issuance, sale and delivery of the Series 2010 Bonds.
The Series 2010 Bonds shall be payable out of the net revenues, as
set forth more fully herein. The bonds shall be executed in the name
of the Issuer with the manual signatures of the Mayor and City Clerk
and shall have the City's seal impressed on them. The Series
2010 Bonds shall be in the form of a single fully-registered, nonconvertible
bond of the denomination of the full principal amount thereof, dated
as of the date of delivery of the Series 2010 Bonds, payable in principal
installments serially as finally determined by the order of the MDEQ
at the time of sale of the Series 2010 Bonds and approved by the Authority
and an Authorized Officer. Final determination of the Principal Amount
and the payment dates and amounts of principal installments of the
Series 2010 Bonds shall be evidenced by execution of a Purchase Contract
(the "Purchase Contract") between the Issuer and the Authority providing
for sale of the Series 2010 Bonds, and each of the Authorized Officers
are authorized and directed to execute and deliver the Purchase Contract
when it is in final form and to make the determinations set forth
above.
B.
The Series 2010 Bonds or principal installments thereof will be subject
to prepayment prior to maturity in the manner and at the times as
provided in the form of Series 2010 Bond contained in this ordinance
or as may be approved by any of the Authorized Officers at the time
of sale of the Series 2010 Bonds or by the Authority at the time of
prepayment.
C.
The Series 2010 Bonds shall bear interest at a rate of not to exceed
4% per annum on the par value thereof or such other rate as evidenced
by execution of the Purchase Contract, but in any event not to exceed
the rate permitted by law, and any of the Authorized Officers shall
deliver the Series 2010 Bond in accordance with the delivery instructions
of the Authority.
D.
The Series 2010 Bond principal amount is expected to be drawn down
by the Issuer periodically, and interest on principal amount shall
accrue from the date such principal amount is drawn down by the Issuer.
E.
The Series 2010 Bond shall not be convertible or exchangeable into
more than one fully-registered bond. Principal of and interest on
the Series 2010 Bond shall be payable as provided, in the Series 2010
Bond form in this ordinance.
F.
The City Clerk shall record on the registration books payment by
the Issuer of each installment of principal or interest or both when
made and the cancelled checks or other records evidencing such payments
shall be returned to and retained by the City Clerk.
G.
Upon payment by the Issuer of all outstanding principal of and interest
on the Series 2010 Bond, the Authority shall deliver the Series 2010
Bonds to the Issuer for cancellation.
A.
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 the registered owner's 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 Issuer 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 transfer agent shall not be required (i) 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 2010 Bonds contained in § A100-44 of this ordinance and ending at the close of business on the day of that giving of notice, or (ii) 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 Issuer shall give the transfer agent notice of call for redemption at least 20 days prior to the date notice of redemption is to be given.
B.
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 Issuer;
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.
C.
If any Bond shall become mutilated, the Issuer, 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 Issuer, 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.
The Series 2010 Bonds and the interest thereon shall be payable
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 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. If the Series 2010 Bonds are purchased by the
Authority and if the Authority so requires, the Issuer shall pledge
its limited tax full faith and credit for the payment of the principal
of and interest on the Series 2010 Bonds. Should the net revenues
of the system at any time be insufficient to pay principal and interest
on the Series 2010 Bonds, as the same become due, and if the Issuer
pledges its limited tax full faith and credit pursuant to the requirement
of the Authority, then the Issuer shall advance from any funds available
therefor, or, if necessary, levy taxes upon all taxable property in
the Issuer, subject to applicable constitutional and statutory limitations,
such sums as may be necessary to pay said principal and interest.
The Issuer shall be reimbursed for any such advance from the net revenues
of the system subsequently received which are not otherwise pledged
or encumbered by this ordinance.
A.
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 Issuer, 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.
If there is a default in the payment of the principal of or interest
on the bonds, any court having jurisdiction in any proper action may
appoint a receiver to administer and operate the system on behalf
of the Issuer 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 Issuer more particularly set forth herein and in Act 94.[1]
[1]
Editor's Note: See MCLA § 141.101 et seq.
C.
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 City Commission may employ such person
or persons in such capacity or capacities as it deems advisable to
carry on the efficient management and operation of the system. The
City Commission may make such rules and regulations as it deems advisable
and necessary to assure the efficient management and operation of
the system.
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, including the Issuer.
The rates now in effect and the rate increases to be placed
into 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 the bonds as the same become due and
payable, and the 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.
Commencing upon the adoption of this ordinance, all funds belonging
to the system shall be transferred as herein indicated and all Revenues
of the system shall be set aside as collected and credited to a fund
to be designated WASTEWATER SYSTEM RECEIVING FUND (the "Receiving
Fund"). In addition, 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 section. 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.
Operation and maintenance fund:
(1)
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)
A budget, showing in detail the estimated costs of administration,
operation and maintenance of the system for the next ensuing operating
year, shall be prepared by the City Commission at least 30 days prior
to the commencement of each ensuing operating year. No payments shall
be made to the Issuer from moneys credited to the Operation and Maintenance
Fund except for services directly rendered to the system by the Issuer
or its personnel.
B.
Bond and interest redemption fund:
(1)
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
shall be kept on deposit with the bank or trust company where the
principal of and interest on the bonds, or any series thereof, are
payable.
(2)
Out of the Revenues remaining in the Receiving Fund, after provision
for the Operation and Maintenance Fund, there shall be set aside each
month commencing with the first day of the month following adoption
of this ordinance 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 or investment income on amounts on deposit
in the Redemption Fund, (including investment income on amounts held
as part of the bond reserve account). Commencing on the first day
of the month following the adoption of this ordinance, the amount
set aside each month for interest on the bonds shall be 1/6 of the
total amount of interest on the bonds next coming due. The amount
set aside each month for principal, commencing 12 months prior to
the first maturity date of the bonds, shall be 1/12 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 monthly requirements. The amount to be set
aside for the payment of principal and interest on any date shall
not exceed the amount which, when added to the money on deposit in
the Redemption Fund, including investment income thereon, is necessary
to pay principal and interest due on the bonds on the next succeeding
principal payment date.
(3)
There is established a separate account in the Redemption Fund
to be known as the BOND RESERVE ACCOUNT (the "Bond Reserve Account").
There shall be periodically deposited in the bond reserve account
in such amounts as the City Commission shall annually determine sums
sufficient to fund the "Reserve Amount" which shall be the lesser
of (1) the maximum annual debt service due in the current or any future
year, (2) 125% of the average annual debt service or (3) 10% of the
principal amount of the bonds. The Reserve Account shall be funded
in the Reserve Amount within 10 years of the date of issue of the
Series 2010 Bonds. Interest on the bond reserve account must be transferred
into the Redemption Fund once the Reserve Amount has been reached.
Transfer shall be made as to the bond reserve account annually until
the Reserve Amount has been reached.
(4)
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 Reserve Amount. If additional Bonds are issued, each Ordinance
authorizing the additional Bonds shall provide either for additional
deposits to the bond reserve account to be made from the proceeds
of the additional Bonds or Issuer funds on hand and legally available
for such use 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, or
such lesser amount as may be necessary to maintain the tax-exempt
status of the bonds. If bonds of superior status are issued additional
Bond Reserve Accounts shall be established for such series of bonds
prior to the issuance of same. If on any principal payment date the
amount in the bond reserve account exceeds the Reserve Amount, the
excess shall be transferred to the Redemption Fund for payment of
principal and interest on the bonds due on that date.
C.
Replacement fund. There shall next be established and maintained
a fund, separate depositary 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 each month 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.
Improvement fund. Out of the remaining Revenues in the Receiving
Fund, after meeting the requirements of the Operation and Maintenance
Fund, the Redemption Fund (including the bond reserve account) and
the Replacement Fund, there may be next set aside in or credited to
a fund to be designated IMPROVEMENT FUND (the "Improvement Fund"),
which Improvement Fund may have several subaccounts therein, such
sums monthly as the Issuer may deem advisable to be used for additions,
improvements, enlargements or extensions to the system, including
the planning thereof.
E.
Surplus moneys. Thereafter, any Revenues in the Receiving Fund after
satisfying all the foregoing requirements of this section may, at
the discretion of the Issuer, be used for any of the following purposes:
(1)
Transferred to the Replacement Fund, the Improvement Fund or
both.
(2)
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 § A100-31 of this ordinance.
(3)
Any other use permitted by law.
In the event the moneys in the Receiving Fund are insufficient
to provide for the current requirements of the Operation and Maintenance
Fund or 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.
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 Issuer, and if kept in one
bank account the moneys shall be allocated on the books and records
of the Issuer in the manner and at the times provided in this ordinance.
Moneys in the funds and accounts established herein and moneys
derived from the proceeds of sale of the bonds, may be invested by
the Issuer in United States of America obligations or in obligations
the principal of and interest on which is fully guaranteed by the
United States of America and any investments hereafter permitted by
law, 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 and Improvement
Fund shall be deposited in or credited to the Receiving Fund at the
end of each fiscal year. Profit realized on interest income earned
on investment of moneys in the Redemption Fund including income derived
from the bond reserve account shall be credited as received to the
Redemption Fund.
A.
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 when received from the Authority
shall be deposited in a bank or banks, designated by the City Commission,
qualified to act as depository of the proceeds of sale under the provisions
of Section 15 of Act 94,[1] 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.
[1]
Editor's Note: See MCLA § 141.115.
B.
Any unexpended balance of the proceeds of sale of the bonds remaining
after completion of the project in the Construction Fund may, at the
discretion of the Issuer, be used for further improvements, enlargements
and extension to the system, if, at the time of such expenditures,
such use is approved by the Michigan Department of Treasury, if such
permission is then required by law. 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.
The bonds shall be in substantially the following form:
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UNITED STATES OF AMERICA
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STATE OF MICHIGAN
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COUNTY OF LAPEER
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CITY OF LAPEER
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WASTEWATER SYSTEM REVENUE BOND, SERIES 2010
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REGISTERED OWNER: Michigan Municipal Bond Authority
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PRINCIPAL AMOUNT: __________ Dollars ($_____,000)
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DATE OF ORIGINAL ISSUE: __________, 2010
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The CITY OF LAPEER, County of Lapeer, State of Michigan (the
"City"), for value received, hereby promises to pay, out of the hereinafter
described Net Revenues of the City's Wastewater System (hereinafter
defined), to the Michigan Municipal Bond Authority (the "Authority"),
or registered assigns, the Principal Amount shown above, or such portion
thereof as shall have been advanced to the City pursuant to a Purchase
Contract between the City and the Authority, (Revenue Sharing Agreement,)
and a Supplemental Agreement by and among the City, the Authority
and the State of Michigan acting through the Department of Environmental
Quality, in lawful money of the United States of America, unless prepaid
prior thereto as hereinafter provided.
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During the time the Principal Amount is being drawn down by
the City under this bond, the Authority will periodically provide
to the City a statement showing the amount of principal that has been
advanced and the date of each advance, which statement shall constitute
prima facie evidence of the reported information; provided that no
failure on the part of the Authority to provide such a statement or
to reflect a disbursement or the correct amount of a disbursement
shall relieve the City of its obligation to repay the outstanding
Principal Amount actually advanced (subject to any principal foregiveness
as provided in Schedule A), all accrued interest thereon, and any
other amount payable with respect thereto in accordance with the terms
of this bond.
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The Principal Amount shall be payable on the dates and in the
annual principal installment amounts set forth on the Schedule attached
to the Purchase Contract, as such Schedule may be adjusted if less
than $_____,000 is disbursed to the City or if a portion of the Principal
Amount is prepaid as provided below, with interest on said principal
installments from the date each said installment is delivered to the
holder hereof until paid at the rate of _____ and _____ percent (_._%)
per annum. Interest is first payable on _____, 200__, and semiannually
thereafter on the first day of October and April of each year, as
set forth in the Purchase Contract.
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The bonds may be subject to redemption prior to maturity by
the Issuer only with the prior written consent of the Authority and
on such terms as may be required by the Authority.
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Notwithstanding any other provision of this bond, as long as
the Authority is the owner of this bond, (a) this bond is payable
as to principal, premium, if any, and interest at the designated office
of __________, or at such other place as shall be designated in writing
to the City by the Authority (the "Authority's Depository");
(b) the City agrees that it will deposit with the Authority's
Depository payments of the principal of, premium, if any, and interest
on this bond in immediately available funds at least five business
days prior to the date on which any such payment is due whether by
maturity, redemption or otherwise; and (c) written notice of any redemption
of this bond shall be given by the City and received by the Authority's
Depository at least 40 days prior to the date on which such redemption
is to be made.
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Additional Interest
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In the event of a default in the payment of principal or interest
hereon when due, whether at maturity, by redemption or otherwise,
the amount of such default shall bear interest (the "additional interest")
at a rate equal to the rate of interest which is 2% 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 but in no event in excess of the maximum rate of interest
permitted by law. The additional interest shall continue to accrue
until the Authority has been fully reimbursed for all costs incurred
by the Authority (as determined by the Authority) as a consequence
of the City's default. Such additional interest shall be payable
on the interest payment date following 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 fails to provide sufficient available funds (together with any
other funds which may be made available for such purpose) to pay the
interest on outstanding bonds of the Authority issued to fund such
account, the City shall and hereby agrees to pay on demand only the
City's pro rata share (as determined by the Authority) of such
deficiency as additional interest on this bond.
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For prompt payment of principal and interest on this bond, the
City has irrevocably pledged the revenues of the Wastewater System
of the City, including all appurtenances, extensions and improvements
thereto (the "System"), after provision has been made for reasonable
and necessary expenses of operation, maintenance and administration
(the "Net Revenues"), and a statutory lien thereon is hereby recognized
and created. In addition in case of insufficiency of said Net Revenues,
the principal of and interest on the bonds shall be payable from the
general funds of the City or, if necessary, from ad valorem taxes
levied upon all taxable property in the City, subject to applicable
charter, statutory and constitutional tax rate limitations.
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This bond is a single, fully-registered, non-convertible bond
in the principal sum indicated above issued pursuant to Ordinance
No. _____ 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 additions, extensions and improvements to the system.
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Principal installments of this bond are subject to prepayment
by the City prior to maturity only with the prior written consent
of the Authority and on such terms as may be required by the Authority.
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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 superior and 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.
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This bond is primarily a self-liquidating bond, payable, both
as to principal and interest, primarily from the net revenues of the
system. The principal of and interest on this bond are secured by
the statutory lien hereinbefore mentioned. [As additional security,
the City has pledged its limited tax full faith and credit for payment
of the principal of and interest on the bonds of this issue, which
includes the Issuer's obligation to levy taxes, if necessary,
within applicable constitutional, statutory and charter tax limitations.]
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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, 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 said Ordinances.
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This bond is transferable only upon the books of the City by
the registered owner in person or the registered owner's 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 the registered owner's
attorney duly authorized in writing, and thereupon a new 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 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 to be done 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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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 manual signatures of its Mayor and its Clerk and the corporate
seal of the City to be impressed hereon, all as of the Date of Original
Issue.
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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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City Clerk
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The Issuer 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.
The Issuer 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.
The Issuer will keep proper books of record and account separate
from all other records and accounts of the Issuer, in which shall
be made full and correct entries of all transactions relating to the
system. The Issuer 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 Issuer 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
six months after the close of each operating year.
C.
The Issuer 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 wastewater systems,
including self-insurance. 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.
The Issuer 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 Issuer 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.
The Issuer 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 Issuer will not operate a system that will compete
with the system.
F.
The Issuer will cause the project to be acquired and constructed
promptly and in accordance with the plans and specification therefor.
A.
Except as hereinafter provided, the Issuer shall not issue additional
Bonds of equal or prior standing with the Series 2010 Bonds.
B.
The right is reserved in accordance with the provisions of Act 94,[1] to issue additional Bonds payable from the Revenues of
the system which may be of either equal standing or prior standing
with respect to the 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)
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 Issuer, it shall be the duty
of the Issuer 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)
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 of equal standing with the Series 2009 Bonds for such purposes shall not be issued pursuant to this Subsection B(2) unless the Adjusted Net Revenues of the system for the then last two preceding twelve-month operating years or the Adjusted 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 100% of the maximum 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 having priority of lien to the Series 2010 Bonds and bonds of equal standing with the Series 2010 Bonds then said Adjusted Net Revenues shall be equal to at least 100% of the maximum 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 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 Bonds to be refunded from the proceeds of the additional Bonds. For purposes of this Subsection B(2) the Issuer may elect to use as the last preceding operating year any operating year ending not more than 16 months prior to 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 prior to the date of delivery of the additional Bonds. Determination by the Issuer as to existence of conditions permitting the issuance of additional Bonds shall be conclusive. No additional Bonds of equal or prior standing as to the net revenues of the system shall be issued pursuant to the authorization contained in this subparagraph if the Issuer shall then be in default in making its required payments to the Operation and Maintenance Fund or the Redemption Fund.
(3)
For refunding all or 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 issuance
of such Bonds shall result in a net present value or as otherwise
provided by applicable state law.
[1]
Editor's Note: See MCLA § 141.101 et seq.
The Authorized Officers are each hereby authorized to make application to the Authority and to the MDEQ for placement of the Series 2010 Bonds with the Authority. The Authorized Officers are each further authorized to execute and deliver such contracts, documents and certificates including a revenue sharing pledge agreement, purchase contract, and supplemental agreement as are necessary or advisable to qualify the Series 2010 Bonds for the State Revolving Fund. In the event of a sale of the Series 2010 Bonds to the Authority, an Authorized Officer is hereby authorized to make such changes to the form of Series 2010 Bond contained in § A100-44 of this ordinance as may be necessary to conform to the requirements of 1985 PA 227 ("Act 227"),[1] including, but not limited to changes to the title of
the bonds, in the principal maturity and interest payment dates and
references to additional security required by Act 227. In the event
the Series 2010 Bonds are sold to the Authority, the taxes collected
by the State of Michigan and returned to the Issuer may be pledged
for payment of the Series 2010 Bonds, and an Authorized Officer is
further authorized to negotiate, execute and deliver an agreement
with the Authority for payment of such taxes to the Authority or to
a trustee as provided in Section 23 of Act 227.
[1]
Editor's Note: See MCLA § 141.1051 et seq.
The Issuer shall, to the extent permitted by law, take all actions
within its control necessary to maintain the exclusion of the interest
on the bonds from gross income for federal income tax purposes under
the Internal Revenue Code of 1986, as amended, (the "Code") including,
but not limited to, actions relating to any required rebate of arbitrage
earnings and the expenditure and investment of Bond proceeds and moneys
deemed to be Bond proceeds, and to prevent the bonds from being or
becoming "private activity bonds" as that term is used in Section
141 of the Code.
All ordinances, resolutions or orders, 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 headings in this 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 LA View, a
newspaper of general circulation in the Issuer qualified under State
law to publish legal notices, promptly after its adoption, and shall
be recorded in the ordinance Book of the Issuer and such recording
authenticated by the signatures of the Mayor and City Clerk.
This ordinance shall be effective upon its adoption.
