The Village of Birch Run covenants and agrees with the successive holders of the bonds and coupons that so long as any of the bonds remain outstanding and unpaid as to either principal or interest.
(A) The Village of Birch Run 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, including the making and collecting of sufficient rates for water services rendered by the system, and the segregation and application of the revenues of the system in the manner provided in this subchapter.
(B) The Village Council will cause to be maintained and kept proper books of record and account, separate from all other records and accounts of the village, in which shall be made full and correct entries of all transactions relating to the system. Not later than 60 days after the close of each operating year, the Village Council will cause to be prepared on forms furnished by the Municipal Finance Commission, if the forms are available, a statement in reasonable detail, sworn to by its Chief Accounting Officer, showing the cash income and disbursements of the system during each operating year, the assets and liabilities of the system at the beginning and close of the fiscal year, and the other information as is necessary to enable any taxpayer of the village, user of the service furnished or any holder or owner of the bonds or anyone acting in their interest, to be fully informed as to all matters pertaining to the financial operation of the system during the year. A certified copy of the statement shall be filed within 75 days after the close of each operating year with the Municipal Finance Commission, and a copy sent to the Manager of the account purchasing the bonds. The statement and books of record and account shall at all reasonable times be open to inspection by any taxpayer of the village, user of the service or holder or holders of any bonds or anyone acting in their behalf. The Village Council will also cause an annual audit of the books of record and account for the preceding operating year to be made each year by a recognized independent certified public accountant, and will mail a copy of the audit to the manager of the syndicate or account purchasing the bonds. The audit shall be completed and so made available not later than three months after the close of each operating year.
(C) The village will maintain and carry, for the benefit of the holders of the bonds, insurance on all physical properties of the system of the kinds and in the amounts normally carried by public utility companies and municipalities engaged in the operation of water supply systems. All monies received for losses under any 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 calling bonds.
(D) The village will not sell, lease or dispose of the system, or any substantial part thereof, until all of the bonds have been paid in full, both as to principal and interest. The village further will cause the operation of the system to be carried on as economically as possible, will cause to be made to the system all repairs and replacements necessary to keep the same 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 impair or affect unfavorably the security of the bonds. The village will not grant any franchise that will result in the operation of a competing water facility.
(1992 Code, § 80.017) (Ord. 1-62, passed - - 1962)