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ORDINANCE NO. �
AN ORDINANCE authorizing and providing for the
issuance of $900, 000 principal amount of WatBr-
works and Sewerage Revenue Refunding Bonds,
Series 1977, of the City of Canton, Fulton
County, Illinois; prescribing the form and
other details and confirming the sale of said
bonds; providing for the collection and disposi-
tion of the revenues to be derived from the
municipal waterworks and sewerage system of
said city; making other provisions with respect � �
to the operation of said system and the issu-
ance of said bonds; providing for the security �
and payment of said bonds; providing for the
payment of certain outstanding bonds; and
prescribing other matters pertaining thereto.
WHEREAS, the City of Canton, Fulton County, Illinois
(the "Issuer") , has heretofore by ordinance provided for combining a
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its municipally owned waterworks system and its municipally owned E
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sanitary sewerage system, and for the operation thereof as s !
single utility (the "System") in accordance with the provisions
of Division 139 of •Article 11 of the "Illinois Municipal Code" ,
approved May 29, 1961, as amended; and
WHEREAS, the Issuer, pursuant to Ordinance No. 90, passed
and approved on October 15, 1963, has heretofore issued the follow�
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ing described bonds which are payable from the revenues of the �
System:
$1, 825, 000 Waterworks and Sewerage Revenue
Bonds, Series of 1963, dated May 1, 1963,
of which amount bonds in the aggregate
principal amount of $1, 475, 000 are now
outstanding;
(the "Outstanding Bonds") ; and
WHEREAS, there are no other outstanding obligations payable
from said revenues; and
WHEREAS, the ordinance under which the Outstanding Bonds
were issued contains certain restrictive covenants and conditions
which inhibit the sound and economical operation of the System;
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WHEREAS , the refunding of the Outstanding, 4Bonds will re-
sult in the removal or modification of such restri�tive covenants
and conditions and wil�l also result in cost savings to the public;
and
WHEREAS, it is in the best interests of the Issuer to
refund the Outstanding Bonds in order to effect a savings in inter-
est to the Issuer and to enable the Issuer to restructure the in-
debtedness payable from the revenues of the System so as to provide
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for the more efficient and economical management of the System for E
the benefit of the users of the System; and "
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WHEREAS , the Issuer is authorized under the provisions
of Section 7 of Article VII of the 1970 Constitution of Illinois ¢
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and the Illinois Municipal Code (including particularly Division '
4 of Article 8 thereof) , and all laws amendatory thereof and
supplemental thereto, to issue its revenue bonds for the purpose
' �of refunding the Outstanding Bonds; and
WHEREAS , in order to refund the Outstanding Bonds on
terms most advantageous to the Issuer, it is necessary to issue
and sell a series of revenue bonds of the Issuer to be designated
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"Waterworks and Sewerage Revenue Refunding Bonds, Series 1977" ,
and to be issued and sold in the aggregate principal amount of
$900, 000 (the "Bonds") ; and
WHEREAS, it is now necessary to authorize the issuance
of the Bonds:
NOW, THEREFORE, Be It Ordained by the City Council of -
the City of Canton, Fulton County, Illinois, as follows :
Section l. Authority. The bonds authorized by this
ordinance shall be issued pursuant to the Constitution and laws
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of the State of Illinois, including particularly Se�tion 7 of
Article VII of the 1970 Constitution of Illinois and Division 4
of Article 8 of the "I�llinois Municipal Code" , approved May 29,
1961, and all laws amendatory thereof and supplemental thereto.
Section 2. Definitions. The following terms shall
have the following meanings in this ordinance unless the text
expressly or by necessary implication requires otherwise: ;
(a) "Bonds" shall mean the $900, 000 Water- ;
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works and Sewerage Revenue Refunding Bonds , Series !
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1977, of the Issuer, dated April 1, 1977, author- �
ized to be issued by Section 4 of this ordinance; ;
(b) "Current Expenses" shall mean the reason-
able and necessary costs of operating, maintaining `
and repairing the System, including water, if any,
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at wholesale, salaries, wages, cost of materials �
and supplies, insurance and audits, but shall exclude k
depreciation, replacements , payments into the Bond
and Interest Account, the Bond Reserve Account and
the Depreciation Account; e
(c) "Fiscal Year" shall mean the twelve month
period beginning on May 1 of each year and ending ;
on the last day of April of the next succeeding year;
(d) "Governing Body" shall mean the City Council
of the Issuer;
_ (e) "Issuer" shall mean the City of Canton, �
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Fulton County, Illinois;
(f) "Net Revenues" shall mean gross earnings
of the System (exclusive of moneys and obligations ,
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and investment income therefrom, held under th�
Refunding Trust Agreement) after deduction of Current
Expenses; '
(g) "Original Purchaser" , with respect to the
Bonds, shall mean Stern Brothers & Co. , Denver, Colo-
rado, as manager, acting for and on behalf of itself
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and such other securities dealers as may be designated
by the Original Purchaser;
(h) "Outstanding Bonds" shall mean $1, 825 , 000
Waterworks and Sewerage Revenue Bonds, Series of 1963,
of the Issuer dated May l, 1963, authorized pursuant to
Ordinance No. 90, passed and approved on October 15, �
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1963, of which amount bonds in the a re ate €
gg g principal
amount of $1, 475, 000 are now outstanding;
(i) "Parity Bonds" shall mean bonds issued on '
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a parity with the Bonds in accordance with the provi- _
sions of Section 12 hereof;
(j) "Refunding Trust Agreement" shall mean the
Refunding Trust Agreement, dated as of April 1, 1977,
to be entered into by and between the Issuer and
such bank or trust company, as Trustee, as may here-
after be agreed upon between the Issuer and the
Original Purchaser and designated by resolution to
be hereafter adopted by the Governing Body of the
Issuer; _ ,
-------„� (k) "System" shall mean the combined municipal
waterworks and sewerage system of the Issuer and all
system properties of every nature hereafter owned by
the Issuer while any of the Bonds or Parity Bonds
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remain outstanding, including all real and pe�sonal
property of every nature comprising part of or used
or useful in conriection with such system and includ-
ing all appurtenances, contracts, leases , franchises
and other intangibles.
Section 3 . Findings and Determinations. It is hereby
found and determined by the Governing Body of the Issuer as
follows:
(a) That the refunding of the Outstanding Bonds through
the issuance of the Bonds will cause (i) a reduction in the debt
service payable from the revenues of the System, thereby effecting
cost savings to the public, and (ii) the removal or modification
of restrictive covenants and conditions contained in the ordinance
authorizing the Outstanding Bonds, thereby enabling the Issuer
to operate the System on a sounder and more efficient basis;
(b) That it is most advantageous to the Issuer to
deposit a portion of the proceeds of the sale of the Bonds in
trust, in the manner provided in the Refunding Trust Agreement, to
pay the principal of and interest on the Outstanding Bonds; and
(c) That the period of usefulness of the System
is not less than forty (40) years from the date of the Bonds.
Section 4. Authorization and Terms of Bonds. For the
purpose of providing a portion of the money necessary to refund
the Outstanding Bonds, the Bonds shall be issued and sold in an
aggregate principal amount of $900, 000 and shall be designated
"Waterworks and Sewerage Revenue Refunding Bonds, Series 1977" .
The Bonds shall be dated April l, 1977 ; shall be of $5000 deno-
mination each; shall be numbered from 1 to 180, inclusive;
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shall bear interest at the rate of 6-1/2$ per annum; and shall
mature serially on May 1 of each of the respective years and in
the principal amounts as follows:
Years Amounts Bond Numbers
1978 $30, 000 1-6
1979 40, 000 7-14 • �
1980 40, 000 15-22
1981 40, 000 23-30
1982 45, 000 31-39
1983 45, 000 40-48
1984 55, 000 49-59
1985 60, 000 60-71
1986 65, 000 72-84 �
� 1987 65, 000 85-97
1988 70, 000 98-111 I
1989 75, 000 112-126 !
1990 80, 000 127-142
1991 . 85, 000 143-159
1992 90, 000 160-177
1993 15, 000 178-180
The Bonds maturing on and after May 1, 1991, shall be
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subject to redemption prior to maturity at the option of the �
Issuer as a whole, or in part in inverse numerical order, on �
May 1, 1990, or on any interest payment date thereafter at the �
principal amount thereof and accrued interest to the date of �
redemption, without premium.
Notice of the intended redemption of each Bond which
shall then be registered as to principal shall be given by regis-
tered mail to the registered holder at the address of such holder
shown on the Registrar' s registration books. If any Bond called
for redemption shall not then be registered as to principal,
notice shall be given through the publication of an appropriate
notice not less than one time in the Midwest Edition of The Wall
Street Journal, unless such edition of such newspaper is not
published at the time, in which event such notice shall be published
in a newspaper of general circulation and published in the City of
Chicago, Illinois, and devoted in part to the publication of
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the place where the principal and interest are payable on the
Bonds. The date of the mailing, publication and filing of such
notice shall be not more than sixty (60) and not less than thirty
(30) days prior to such redemption date, and any such notice shall
designate the date and place of redemption of the Bonds, shall
designate the serial numbers and the aggregate principal amount of
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the Bonds to be redeemed, and shall indicate that on the designated �
date of redemption the Bonds will be redeemed by payment of the .
principal thereof and accrued interest thereon, and that from and
after the designated redemption date interest in respect of the
Bonds so called for redemption shall cease.
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� The Bonds shall bear interest payable semiannually on
May 1 and November 1 of each year, beginning November 1, 1977 , at
the rate provided above. The Bonds shall be payable, both
principal and interest, in lawful money of the United States of
America at such bank or trust company as may hereafter be agreed
upon between the Issuer and the Original Purchaser and designated
by resolution to be hereafter adopted by the Governing Body of
the Issuer.
The Bonds shall be executed in the name of the Issuer
with the manual or facsimile signature of the Mayor and shall have
reproduced thereon a facsimile of the corporate seal of the Issuer
attested by the manual signature of the City Clerk. Interest to
maturity shal� be evidenced by semiannual coupons attached to the
Bonds, which coupons shall be executed by said Mayor and City
Clerk with their facsimile signatures, and said officials by the
execution of the Bonds shall adopt as and for their own official
signatures their respective facsimile signatures appearing on said
coupons.
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Section 5. Negotiability of the Bonds. �he Bonds shall
be fully negotiable but shall be registrable as to principal in
the manner and with the effect provided in the form of bond
hereinafter set out.
Section 6 . Source of Payment of the Bonds. The Bonds,
together with interest thereon, shall be payable solely from and
secured by a pledge of the revenues to be derived frorn the opera- '
tion of the System, as hereinafter provided, and are not, in any
event, an indebtedness of the Issuer within the meaning of any
constitutional or statutory provision or limitation.
Section 7. Form of Bond, Coupon and Registration Provi-
sion. The Bonds and attached coupons shall be in substantially
the following form, the blanks to be appropriately completed when
the Bonds are printed:
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(Form of Bond)
United States of America
State of Illinois
County of Fulton
City of Canton
WATERWORKS AND SEWERAGE REVENUE REFUNDING �.
BOND, SERIES 1977 ;;
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No. $5000
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KNOW ALL MEN BY THESE PRESENTS: That the City of Canton, �
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Fulton County, Illinois (hereinafter referred to as the "Issuer") ,
a lawfully organized and existing municipal corporation in the
state and county aforesaid, for value received promises to pay to ;
bearer, or to the registered holder if this bond shall then be
registered as to principal, solely from the Waterworks and Sewer-
age Fund of the Issuer, as hereinafter mentioned, and not other-
wise, the principal sum of Five Thousand Dollars ($5000) on May
1, 19 , with interest at the rate of six and one-half per cent
(6-1/2�) per annum from the date hereof until the principal amount
shall have been fully paid, such interest being payable on May 1
and November 1 of each year, beginning November 1, 1977 . Interest
to maturity shall be payable only upon presentation and surrender
of the attached interest coupons as they severally mature. Both
principal hereof and interest hereon are payable in lawful money
of the United States of America at , in the
City of , Illinois.
Bonds of the issue of which this bond is one maturing on
and after May l, 1991, are subject to redemption prior to maturity
at the option of the Issuer as a whole, or in part in inverse
• Notice of the intended redemption of ,each bond which
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shall then be registered as to principal shall be given by regis-
tered mail to the registered holder at the address of such holder
shown on the Registrar' s registration books. If any bond called
for redemption shall not then be registered as to principal,
notice shall be given through the publication of an appropriate
notice not less than one time in the Midwest Edition of The Wall
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Street Journal, unless such edition of such newspaper is not
published at the time, in which event such notice shall be pub-
lished in a newspaper of general circulation and published in the
City of Chicago, Illinois, and devoted in part to the publication
of financial information. In addition, such notice shall be
filed at the place where the principal and interest are payable
on the bonds. The date of the mailing, publication and filing of
such notice shall be not more than sixty (60) and not less than
thirty (30) days prior to such� redemption date, and any such
notice shall designate the date and place of redemption of the
bonds, shall designate the serial numbers and the aggregate
principal amount of the bonds to be redeemed, and shall indicate
that on the designated date of redemption the bonds will be '
redeemed by payment of the principal thereof and accrued interest
thereon, and that from and after the designated redemption date
interest in respect of the bonds so called for redemption shall
cease.
The bonds may be registered as to principal with the
effect and in the manner provided in the endorsement appearing on
the reverse side hereof.
This bond is one of a total authorized issue of $900,000
Waterworks and Sewerage Revenue Refunding Bonds , Series 1977,
issued to provide funds which will be sufficient to refund certain
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outstanding obligations payable from the revenues derived from
the combined waterworks and sewerage system of the Issuer (the
"System" ) under authority of and in full compliance with the
Constitution and statutes of the State of Illinois, including
Section 7 of Article VII of the 1970 Constitution of Illinois,
Division 4 of Article 8 of the "Illinois Municipal Code" , approved
May 29, 1961, and all laws amendatory thereof and supplemental
thereto, and under and pursuant to Ordinance No. , duly
adopted by the City Council of the Issuer on April , 1977 (the
"Bond Ordinance") . �
Both principal of and interest on this bond and the
issue Qf which it is a part are payable solely from and are �
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secured by a pledge of the revenues of the System; subject and �
subordinate to the rights of the holders of certain outstanding
bonds of the Issuer to a prior claim ori the revenues of the
System previously pledged for the payment thereof, pending the
final payment �f said outstanding bonds from the moneys and
investments held in trust for that purpose in an amount adequate
therefor, all as provided in the Bond Ordinance. This bond does
not constitute an indebtedness of the Issuer within the meaning �
of any constitutional or statutory provision or limitation, and
the holder hereof shall have no recourse to the power of taxation.
The Bond Ordinance is hereby referred to for a more complete .
statement of the revenues from which this bond is payable, the
conditions under which additional obligations may be issued on a
parity with this bond and the general covenants and provisions
pursuant to which this bond is issued and the conditions under
which the Bond Ordinance may be amended, to all the provisions of
which the holder by the acceptance of this bond assents.
Under the Illinois Municipal Code and the Bond Ordinance,
in a separate fund designated as the "Waterworks and Sewerage
Fund" of the Issuer, which shall be used only and is hereby
pledged in the manner �and to the extent provided in the Bond
Ordinance for paying the cost of the operation and maintenance of
the System, providing an adequate depreciation fund and paying the
principal of and interest on the bonds of the Issuer that are
payable by their terms only from the revenues of the System, and
in making all payments required to maintain the accounts created
under the terms of the Bond Ordinance.
It is hereby certified, recited and declared that all
acts, conditions and things required to be done, exist and be
performed precedent to and in the issuance of this bond in order
to make it a legal, valid and binding obligation of the Issuer
have been done, exist and have been performed in regular and due
time, form and manner as required by law, and that this bond,
together with the issue of which it is a part, does not exceed any
constitutional or statutory limitation.
IN WITNESS WHEREOF, the Issuer, by its City Council, has
caused this bond to be executed by its Mayor with his manual or
facsimile signature, and a facsimile of the corporate seal to be
reproduced hereon attested by the manual signature of its City
Clerk, and has caused the interest coupons hereto attached to be
executed by said Mayor and City Clerk with their respective fac-
simile signatures, all as of this lst day of April, 1977 .
(Facsimile Signature)
Mayor
(Facsimile Seal)
Attest:
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(Form of Coupon) �
Unless the bond to which this coupon On , 19_ �
is appurtenant is subject to prior �
redemption and shall have been pro- $ �
perly called for redemption and pro- �
vision made for the payment thereof, Bond rlo. �
the CITY OF CANTON, FULTON COUNTY,
ILLINOIS, will pay to bearer, Coupon No. !
solely from the revenues specified ;
in the bond to which this coupon
is appurtenant, the amount shown .
hereon, in lawful money of the United
States of America at
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in the City of , Illinois,
upon presentation and surrender of
this coupon, for interest due that
date on its WATERWORKS AND SEWERAGE
REVENUE REFUNDING BOND, SERIES 1977,
dated April l, 1977 .
(Facsimile Signature) (Facsimile Signature)
City Clerk Mayor
(Provision for Registration)
The within bond may be registered in the name of the
owner as to principal only, such registration to be on a bond
register kept by the City Clerk of the Issuer, as Registrar,
and also to be noted in the registration blank below; after which
no transfer shall be valid unless made on said bond register at
the request of the registered owner or his authorized attorney
and noted in said registration blank below; but this bond may be
discharged from registration by being transferred to bearer,
after which it shall be transferable by delivery but may be again
registered as before. Such registration shall not impair the
negotiability by delivery of the coupons attached to the bond.
The principal of the bond, if registered other than to bearer,
shall be payable only to or upon the order of the registered
owner or his legal representative.
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(No writing on this blank except by the Registrar)
Date of Name and Address of Signature
Registration Registered Holder of Registrar
Section 8. Pledge of Revenues in Favor of Bonds and
Parity Bonds. The punctual payment of principal of and interest
on the Bonds and Parity Bonds shall be secured equally and ratably
by the revenues of the System without priority by reason of
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series, number or time of sale or delivery, and the revenues of '
the System are hereby irrevocably pledged to the punctual payment ;
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of such principal and interest as the same become due. There is, {
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however, expressly excepted and excluded from the lien and pledge
created by this Section, for the benefit of the Bonds or any `
Parity Bonds, or elsewhere herein or by any ordinance amendatory
hereof or supplemental hereto, all moneys and obligations held
under the Refunding Trust Agreement for the benefit of the Out-
standing Bonds .
Section 9 . Creation of Waterworks and Sewerage Fund.
From and after the delivery of the Bonds, and as long as any Bonds
or Parity Bonds shall be outstanding and unpaid either as to
principal or as to interest, or until the discharge and satis-
faction of all Bonds and Parity Bonds as provided in Section 13
hereof, the entire income and revenues of the System shall be
deposited as collected with a bank or banks to be designated by
the Governing Body in a fund hereby created and designated as the
"Waterworks and Sewerage Fund" (the "Fund" ) of the Issuer, which
shall constitute a trust fund for the sole purpose of carrying out
the covenants, terms and conditions of this ordinance, and shall
which by their terms are payable solely from the revenues derived
from the System, and providing for the creation and expenditure of
the respective accounts as hereinafter provided for.
Section 10. Creation of Certain Accounts; Application
of Revenues. There are hereby established and created separate
accounts in the Fund to be designated severally the "Operation and
Maintenance Account" , the "Bond and Interest Account" , the "Bond
Reserve Account" , the "Depreciation Account" , and the "Surplus
Account" , to which there shall be credited on the first business
day of each month by the financial officer of the Issuer, without
any further official action or direction, in the order in which
said accounts are hereinafter mentioned, all moneys held in �the
Fund, in accordance with the following provisions :
(a) Operation and Maintenance Account. There shall be
credited to the Operation and Maintenance Account an amount
sufficient to pay the Current Expenses of the System for the
next succeeding month, including one-twelfth of all such
expenses computed on an annual basis.
°� (b) Bond and Interest Account. There next shall be
credited to the Bond and Interest Account the entire balance
of the revenues until the amount of interest due on the next
interest payment date on the Bonds has been credited to said
account, and thereafter each month there shall be credited
to said account an amount at least equal to one-sixth of the
interest becoming due and payable on the Bonds and Parity
Bonds, until there is on hand in said account the full amount
of the interest payable on the next succeeding interest pay-
ment date. Beginning one year prior to any date on which
principal is due on any Bonds or Parity Bonds there shall
be credited to said account on the first day of each month
an amount equal to one-twelfth of the principal coming due
on such next succeeding principal payment date. Credits to
the Bond and Interest Account may be suspended at such time
as there is credited to said account an amount sufficient to
pay principal of and interest on Bonds and Parity Bonds on
the next succeeding interest or principal payment dates , as
the case may be, but such payments shall again be resumed
after such dates. All moneys in said account shall be used
only for the purpose of paying principal of and interest on
Bonds and Parity Bonds as the same shall become due. Any and
all sums received from the purchaser of the Bonds as accrued
interest shall be paid into said account. Funds sufficient
to pay interest or principal, or both, of the Bonds and
Parity Bonds, together with paying agency fees, shall be
transmitted to the paying agent not less than five (5) _days
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(c� Bond Reserve Account. Beginning on the first day
of the month following delivery of the Bonds, there shall be
credited to the Bond Reserve Account the sum of $1, 500 each
month until there is credited to said account the sum of
$100, 000, and thereafter no additional funds shall be credi-
ted to said account, except that when any money is paid out
of said account credits to said account shall be resumed at
the monthly rate and continued until such account has been
restored to the aggregate amount required by this sentence.
Moneys credited to the Bond Reserve Account shall be used to
pay principal or interest, or both, of the Bonds and Parity �
Bonds at any time when there are insufficient funds available
in the Bond and Interest Account to pay such principal and '
interest as the same become due.
(d) Depreciation Account. Beginning on the first day
of the month following the �delivery of the Bonds , there shall
be credited to the Depreciation Account the sum of $1, 000
each month until such account aggregates the sum of $75, 000 ,
and thereafter no additional funds shall be credited to such
account, except that when any money is paid out of such
account credits to said account shall be resumed at the
monthly rate and continued until such account has been restor- ',
ed to the aggregate amount of $75, 000. ;
Moneys credited to the Depreciation Account shall be used for
the payment of the cost of necessary repairs and replacements
to the System, the payment for which no other funds are
available, in order that the System may at all times be able
to render efficient service, or for improvements, repairs or
replacements to the System required by any agency of the
State of Illinois or the United States Government; ��f
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/��k�a''��/�f�E�/�ls'/�f�,��/a���(/�/ �/s�r5f��i��a1/,�i�/ d�/�'�d���/���d� ;
/�5,�/�a�/������ provided that the moneys credited to said
account may be used to pay principal of or interest on any
Bonds or Parity Bonds at any time when there are no other
funds available for that purpose, and in such event shall be
transferred to the Bond and Interest Account. Whenever such
an amount is withdrawn from such account and so transferred,
the amount so transferred shall be added to the amount to be
next and thereafter credited to said Depreciation Account
until full reimbursement to said account has been made.
_ (e) Surplus Account. Al1 moneys remaining in the Fund,
. after crediting the required amounts to t e respective accounts
hereinabove provided for, and after making up any deficiency
in accounts (a) to (d) , inclusive, shall be credited to the
Surplus Account. Funds in the Surplus Account shall, at the
discretion of the Governing Body of the Issuer, be used for
one or more of the following purposes :
(1) For the purpose of constructing or acquiring improve-
ments or extensions to the System; or
(2) For the purpose of calling and redeerning Bonds and
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(3) For the purpose of purchasing Bonds or Parity
Bonds which are not callable at the time at
a price not to exceed par and accrued interest
to the date of purchase; or
(4) For the purpose of paying principal of and
interest on any subordinate bonds or obliga-
tions issued for the purpose of acquiring or
constructing improvements and extensions to
the System; or
(5) For any other lawful purpose of the Issuer.
(f) The money to the credit of the Bond and Interest
Account, the Bond Reserve Account and Depreciation Account,
as hereinabove created, may be invested from time to time
by the Treasurer of the Issuer in interest-bearing bonds,
or other direct and general obligations of the United States
Government, or obligations guaranteed by the United States
Government; the money to the credit of the Surplus Account,
as hereinabove created, may be invested from time to time
by the Treasurer of the Issuer in interest-bearing bonds,
or other direct and general obligations of the United States
Government, or obligations guaranteed by the United States
Government, or in certificates of deposit or time deposits
constituting direct obligations of any bank as defined by the
Illinois banking act which is insured by the Federal Deposit
Insurance Corporation, if then in existence; and such securi-
ties may be sold from time to time by the Treasurer of the
Issuer as funds may be needed for the purpose for which
said respective accounts have been created. All accrued
interest on any funds so invested shall be first credited
to the Fund and then credited to the account for which the
investment was made•; provided, however, that if the account
for which the investment was made is then at or in excess
of its required level, such accrued interest may be created
to the Surplus Account.
,
(g) Immediately after the issuance of the Bonds, all
moneys remaining in the special accounts established by the
ordinance authorizing the Outstanding Bonds shall be trans-
ferred to the Depreciation Account created by this ordinance,
except as follows:
From (prior Accounts) To (Accounts in this ordinance)
Operation and Maintenance Operation and Maintenance Account
Account
From other Accounts $100 , 000 to Bond Reserve Account;
$8 , 000 to Surplus Account.
, � � • • �
Money in the Fund shall be alloted and credited to the
various accounts hereinbefore referred to in the order in which
said accounts are listed, on a cumulative basis , on or prior to
the first day of each month, or on the next succeeding business
day when the first shall not be a business day; and if in any
month the money in the Fund shall be insufficient to deposit,
transfer or credit the required amount to the credit of any of
the accounts, the deficiency shall be made up in the following r
month or months after payments into all accounts enjoying a prior
claim to the revenues shall have been met in full.
Al1 the accounts provided by this section shall be kept
on deposit with a bank or banks which shall be members of the
Federal Deposit Insurance Corporation and shall be secured to the
fullest extent reguired by law for the securing of public funds.
The provisions of this section, however, shall not be construed
to require the Issuer to maintain separate bank accounts for the
accounts created by this section.
Nothing in this ordinance shall be construed to impair
the rights vested in the holders of the Outstanding Bonds . In
the event that funds set aside for the payment of the Outstanding
Bonds shall be insufficient for that purpose, then the revenues
of the System shall be applied in the manner provided in the pro-
ceedings authorizing those bonds.
Section 11. Covenants Regarding the Operation of the
System. The Issuer hereby covenants and agrees with each and
every holder of the Bonds and Parity Bonds :
(a) That the Issuer will maintain the System in good
repair and working order, will operate the same efficiently
and faithfully, and will punctually perform all duties
with respect thereto required by the Constitution and laws
of the State of Illinois.
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(b) That the Issuer will establish and maintain at all
times reasonable fees, charges and rates for the use and
services of the System, and will provide for the collection
thereof and the segregation and application of the revenues
of the System in the manner provided by this ordinanc'e, and
sufficient at all times to pay the costs of operation and
maintenance, to provide an adequate depreciation fund, to pay
the interest of and principal on all revenue bonds of the
Issuer which by their terms are payable from the revenues of
the System, and to provide for the creation and maintenance
of the respective accounts as provided in Section 10 of this
ordinance.
That there shall be charged against all users of the System,
including the Issuer, such rates and amounts for water and
sewer services as shall be adequate to meet the requirements
of this subsection. Charges for services rendered the Issuer
shall be made against the Issuer and payment for the same
shall be made monthly from the corporate funds �into the Fund
as revenues derived from the operation of the System. •
(c) That the Issuer from time to time will make all
needful and proper repairs, replacements, additions and
betterments to the System so that it may at all times be
operated properly and advantageously, and when any necessary
equipment or facility shall have been worn out, destroyed or
otherwise is insufficient for proper use, it shall be promptly
replaced so that the value and efficiency of the System shall �
be at all times fully maintained.
(d) That the Issuer will establish such rules and
regulations for the control and operation of the System
necessary for the efficient and economical operation thereof,
and rates and charges shall be fixed and revised from time to
time as may be necessary to produce funds sufficient for all
the purposes herein provided until all of the Bonds and
Parity Bonds have been paid in full, both as to principal and
interest.
(e) That the Issuer will maintain and keep proper books
of records and accounts, separate from all other records and
accounts of the Issuer, in which complete entries shall be
made of all transactions relating to the System, and hereby
covenants and agrees that it will cause such books and accounts
of the System to be audited annually by certified public
accountants. Within not more than sixty (60) days after the
close of each Fiscal Year, the Issuer will file with the
Original Purchasers of the Bonds and any Parity Bonds complete
operating income statements of the System in reasonable .
detail covering such Fiscal Year, and will furnish upon
written request not more than sixty (60) days after the close
of each Fiscal Year copies of such operation and income
statements to any holder of any of the Bonds or Parity Bonds.
Further, the Issuer will permit any holder or holders of the
Bonds or Parity Bonds to inspect the System, and all records
and accounts, and data relating thereto, at any reasonable
time.
f / I . ' � � ` �
All expenses incurred in the making of the audit required by
this section shall be regarded and paid as a Current Expense.
(f) That the Issuer will not sell, lease, loan, mortgage
or in any manner dispose of or encumber the System (Subject
to the right of the Issuer to issue Parity Bonds as provided
in this ordinance, to issue bonds subordinate to the Bonds
and Parity Bonds, and to dispose of real or personal property
which is no longer useful or necessary to the operation of
the System) , until all of the Bonds and Parity Bonds shall be
paid in full, both principal and interest, or unless and
until provision shall have been made for the payment thereof,
and the Issuer will take no action in relation to the System
which would unfavorably affect the security of the Bonds or
Parity Bonds or the prompt payment of the principal thereof
and interest thereon.
(g) That any holder of a Bond or Parity Bond, or any of
the coupons of any Bond or Parity Bond, may proceed by civil
action to compel performance of all duties required by law
and tliis ordinance, including the making and collecting of
. sufficient charges and rates for the service supplied by the
System, and the application of the income and revenue there-
f rom. �
(h) That the Issuer will carry insurance on the System
of the kinds and in the amounts which are usually carried by
private parties operating similar properties , covering such
risks as shall be recommended by a competent consulting
engineer employed by the Issuer for the purpose of making
such recommendations. Al1 moneys received for loss under
such insurance policies shall be deposited in the Deprecia-
tion Account and used in making good the loss or damage in
respect of which they were paid, either by repairing the
property damaged or making 'replacement of the property damaged
or making replacement of the property destroyed, and provision
for making good such loss or damage shall be made within
ninety (90) days from the date of the loss. The payment of
premiums for all insurance policies required under the provi-
sions of this covenant shall be considered a Current Expense.
The proceeds derived from any and all policies for public
liability shall be paid into the Operation and Maintenance
Account and used in paying the claims on account of which
they were received.
(i) That the Issuer will not provide any free service
of the System and, to the extent permitted by law, the Issuer
will not grant a franchise for the operation of any competing
waterworks system, sewerage system or combined waterworks and
sewerage system within the Issuer.
(j ) That the Issuer will require, to the extent permit-
ted by law, the owner, tenant or occupant of each lot or
parcel of land within the boundaries of the Issuer which
abuts upon a street or other public way containing a sanitary
sewer, the elevation of which will permit a connection with
such sanitary sewer, and upon which lot or parcel a building
is situated for residential, commercial or industrial use, to
f ' ' , • , � �
� Section 12. Parity Bonds. The Issuer w�.11 'issue no
other bonds or obligations of any kind or nature payable from or
enjoying a lien or claim on the revenues of the System having
priority over the Bonds or Parity Bonds; and no additional bonds
shall be issued under the provisions of the ordinance authorizing
the Outstanding Bonds.
Additional bonds may be issued on a parity and equality
of rank with the Bonds with respect to the lien and claim of such
additional bonds to the revenues of the System and the moneys on
deposit in the Fund and Accounts created by this ordinance, for
the following purposes and under the following conditions, but not
otherwise:
�
I
The Issuer reserves the right to issue Parity Bonds for
the purpose of paying the cost of improvements and extensions to
the System upon compliance with the following conditions :
(a) The amounts required to be credited monthly to the
respective accounts (a) to (d) , inclusive, of Section 10
provided for by this ordinance must have been credited in
full to the date of the adoption of the ordinance authorizing
the issuance of suc.h Parity Bonds.
(b) The Net Revenues of the System for the last complet-
ted Fiscal Year prior to the issuance of the Parity Bonds (as
shown by the audit of an independent accountant) , or the
adjusted Net Revenues of the System for such year (as defined
herein) must equal at least 110$ of the combined maximum
principal and interest requirement in any succeeding Fiscal
Year on all of the Bonds and Parity Bonds proposed to be
issued and must equal 125$ of the average combined principal
and interest requirement in any succeeding Fiscal Year on all
� of the Bonds and Parity Bonds then outstanding and on the
Parity Bonds proposed to be issued. For the purpose of the
preceding sentence, principal and interest coming due on May
1 in any year shall be deemed to be a requirement of the
preceding Fiscal Year.
Net Revenues of the System may be adjusted as follows :
(i) In the event there shall have been an increase in
the rates of the System from the rates in effect for the pre-
ceding Fiscal Year, which increase is in effect at the time
of the issuance of any such Parity Bonds , the Net Revenues
, � ' ' • � � � • � • .
. f
as provided in this subparagraph (b) may be adjusted to reflect
the Net Revenues of the System for the immediately preceding
Fiscal Year as they�ould have been had said then existing
rates been in effect �during all of said Fiscal Year.
(ii) Any such adjustment shall be evidenced by the
certificate of an independent consulting engineer employed
for that purpose, which certificate shall be filed with the
City Clerk and approved by the Governing Body prior to the
authorization of the Parity Bonds.
II �
Without compliance with the conditions set forth in I above,
the Issuer reserves the right to issue Parity Bonds if the
System is either destroyed or damaged to the extent that it
cannot be operated and if funds received from insurance or
other sources are inadequate to restore the System to a con- �
dition such that it can be operated. The Issuer may not `
issue Parity Bonds under this option unless the holders of at �
least 75� of the principal amount of the Bonds and Parity
Bonds then outstanding consent in writing to the issuance of
the proposed Parity Bonds prior to the adoption of the bond
ordinance authorizing their issuance. In such consents, such
holders must consent to the total cost of restoration, the �
engineering firm selected by the Issuer in connection with
such restoration, and the amount of the proposed Parity Bonds
to be issued for the purpose of paying the cost of such
restoration.
III
Without compliance with the conditions set forth in I above,
the Issuer reserves the right to issue bonds payable from the
revenues of the System subordinate to the Bonds and Parity
Bonds. Such subordinate bonds shall be payable from the
Surplus Account created in Section 10 of this ordinance.
All bonds issued under this Section shall mature as to
principal on May 1 and as to interest on May 1 and November l .
Section 13. Discharge and Satisfaction of Bonds and
Parity Bonds. The covenants, liens and pledges entered into,
created or imposed pursuant to this ordinance may be fully dis-
charged and satisfied with respect to the Bonds and Parity Bonds ,
or any of them, in any one or more of the following ways :
(a) By paying the Bonds or Parity Bonds when the same
shall become due and payable;
� . r
(b) By depositing with the paying agent designated for
such Bonds or Parity Bonds, in the manner provided by this
ordinance and for such purpose, at or before the date of
maturity or redemption, money in the necessary amount to pay
or redeem the Bonds or Parity Bonds; and/or
(c) By depositing in trust with a bank or trust company
located in the State of Illinois for such purpose, at or
before the date of maturity or redemption, direct obligations
of, or obligations the principal of and interest on which are
guaranteed by, the United States of America, in an amount
sufficient, including any income or increment to accrue
thereon, but without the necessity of any reinvestment, to
pay or redeem the Bonds or Parity Bonds, in accordance with ;
i
their terms.
Upon such payment or deposit in the amount and manner
provided by this section, such Bcnds or Parity Bonds shall no
longer be deemed outstanding for purpose of this ordinance and all
liability of the Issuer with respect to such Bonds or Parity Bonds
shall cease, determine and be completely discharged, and the
holders thereof shall be entitled only to payment out of the money
or securities so deposited.
Section 14 . Remedies of Bondholders . Except as herein
expressly limited the holder or holders of the Bonds and Parity
- Bonds shall have and possess all the rights of action and remedies
afforded by the common law, the Constitution and statutes of the
State of Illinois and of the United States of America for the
enforcement of payment of their bonds and coupons , and of the
' � .
pledge of the revenues made hereunder, and of all covenants of the
Issuer hereunder.
Section 15. Sale of Bonds. The sale of the Bonds to
the Original Purchaser, pursuant to the terms of the Purchase
Contract dated April _, 1977 , at a price of par plus accrued
interest to the date of delivery is hereby approved, ratified and
confirmed. The execution and delivery of said Purchase Contract
in the name and on behalf of the Issuer by the Mayor and the City
Clerk is hereby approved,• ratified and confirmed.
Section 16. Disposition of Bond Proceeds . The proceeds
of the sale of the Bonds, after payment or provision for payment
of the costs and expenses of issuance, shall be applied by the
Issuer as follows :
(a) All accrued interest from the sale of the Bonds
• shall be credited to the Bond and Interest Account; and
(b) The amounts necessary to provide for the refunding
of the Outstanding Bonds shall be transferred to the Trustee
for deposit in the Trust Fund established under the Refunding
Trust Agreement, the form and terms of which shall be approved
by resolution to be hereafter adopted by this Governing Body.
Section 17 . Non-Arbitrage Covenants. The proceeds of
sale of the Bonds shall be used and devoted with due diligence for
the purposes as provided herein, and the Issuer covenants and
agrees with the purchasers and holders of the Bonds that so long
as any of the Bonds remain outstanding, money on deposit in any
fund or account in connection with the Bonds , whether or not said
_ money was derived from the proceeds of the sale of the Bonds , or
from any other sources, will not be used in a manner which will
cause any of the Bonds to be an "arbitrage bond" within the
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, • • • • , ' ' 1� • • � ' • ,• • • �
meaning of Section 103 (c) [formerly Section 103 (d) ] of the Inter-
nal Revenue Code of 1954 , as amended, and any lawful regulations
promulgated or proposed thereunder, including Sections 1. 103-13
and 1. 103-14 of the Income Tax Regulations (26 CFR Part 1) as the
same presently exist, or may from time to time hereafter be amended,
supplemented or revised. The Issuer reserves the right, however,
�
to make any investment of said money permitted by Illinois law if,
when and to the extent that said Section 103 (c) or regulations
promulgated thereunder shall be repealed or modified or shall be
held void by final decision of a court of competent jurisdiction,
but only if any investment made by virtue of such repeal, modifi-
cation or decision would not, in the opinion of counsel of recogniz-
ed competence in such matters, result in making the interest on
,
any of the Bonds subject to federal income taxation.
Section 18 . Ordinance a Contract. The provisions of
this ordinance shall constitute a contract between the Issuer and
the holder or holders of the Bonds and after the issuance of any
of the Bonds no change, variation or alteration of any kind in the
provisions of this ordinance shall be made in any manner, except
as provided in the following section, until such time as all of
the Bond,s shall have been discharged and satisfied as provided in
Section 13 hereof.
Section 19 . Amendment of Ordinance. This ordinance may
be amended from time to time if such amendment shall have been
consented to by the holders of not less than two-thirds in princi-
pal amount of the Bonds at any time outstanding (not including in
any case any bonds which may then be held or owned by or for the
account of the Issuer, but including such refunding bonds as may
. , , ` , . �
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, . � , , .
� .
have been issued for the purpose of refunding any of such bonds if
such refunding bonds shall not then be owned by the Issuer) ; but �
;
this ordinance may not be so amended in such manner as to: �
�
�
(a) Make any change in the maturity or interest rate of ;
k
the Bonds, or modify the terms of payment of principal of or �
interest on the Bonds or any of them or impose any conditions �
with respect to such payment;
(b) Materially affect the rights of the holders of less
than all of the Bonds then outstanding;
(c) Reduce the percentage of the principal amount of
Bonds, the consent of the holders of which is required to
effect a further amendment.
Whenever the Issuer shall propose to amend this ordi- i
nance under the provisions of this section, it shall cause notice i
of the proposed amendment to be filed with the Original Purchaser
and to be published one time in a financial newspaper or journal
published in New York, New York or Chicago, Illinois. Such notice
shall briefly set forth the nature of the proposed amendment and
shall state that a copy of the proposed amendatory ordinance is on
file in the office of the City Clerk of the Issuer.
Whenever at any time within one year from the date of
the publication of said notice there shall be filed with said City �
Clerk an instrument or instruments executed by the holders of at
least two-thirds in aggregate principal amount of the Bonds then _
outstanding as in this section defined, which instrument or instru-
ments shall refer to the proposed amendatory ordinance described
in said notice and shall specifically consent to and approve the
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_ � • . ' . � �
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adoption thereof, thereupon, but not otherwise, the Governing Body
of the Issuer may adopt such amendatory ordinance and such ordinance
shall become effective and binding upon the holders of all the
Bonds.
Any consent given by the holder of a bond pursuant to �
the provisions of this section shall be irrevocable for a period
of six months from the date of the instrument evidencing such
consent and shall be conclusive and binding upon all future holders
of the same bond during such period. Such consent may be revoked
at any time after six months from the date of such instru�ent by
the holder who gave consent or by a successor in title by filing
notice of such revocation with the City Clerk.
4
�
The fact and date of the execution of any instrument �
�
under the provisions of this section may be proved by the certi-
ficate of any officer in any jurisdiction who by the laws thereof
is authorized to take acknowledgments of deeds within such juris-
diction, that the person signing such instrument acknowledged ;
i
before him the execution thereof, or may be proved by an affidavit I
�
of a witness to such execution sworn to befor_e such officer.
The amount and numbers of the bonds held by any person
executing such instrument and the date of his holding the same may
be proved by affidavit by such person or by a certificate executed
by an officer of a bank or trust company showing that on the date
therein mentioned such person had on deposit with such bank or
trust company the bonds described in such certificate.
Section 20. Separability. If any section, paragraph or
provision of this ordinance shall be held to be invalid or unenforce- '
able for any reason, the invalidity or unenforceability of such �
' � . . I.
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/ � . � � ♦ f i . , t ♦
• • � ' t
section, paragraph or provision shall not affect any of the remaining
provisions of this ordinance.
Section 21. � Repeal of Conflicting Ordinances. All
ordinances, resolutions, and orders, or parts thereof, in conflict
with the provisions of this ordinance, are, to the extent of such
conflict, hereby repealed.
Section 22. Effective Date. This ordinance, within
ten (10) days after its passage by the Governing Body of the
�ssuer, shall be published once in the Daily Ledger , ;
being a newspaper published in and having a general circulation �
in the Issuer, and shall become effective ten (10) days after
publication.
Adopted a�kxat�t�t�t�t��� this 12th day of April, 1977. �
Approved by the Mayor on the 13th day of April , 1977 . �
!
Rohc�rt F_ .Tanni �a,g
- Mayor
(SEAL)
Attest:
Nellie Crawford
City Clerk
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