(A) Receiving Fund. The revenues of the system are hereby ordered to be set aside, as collected, and deposited in a bank duly qualified to do business in the state, in an account to be designated Water Supply System Receiving Fund (hereinafter referred to as the “Receiving Fund”), and said revenues so deposited are pledged for the purpose of the following funds and shall be transferred from the Receiving Fund periodically in the manner and at the times hereinafter specified.
(B) Operation and Maintenance Fund.
(1) Out of the revenues in the Receiving Fund there shall be first set aside, quarterly, into a separate depositary account designated Operation and Maintenance Fund, a sum sufficient to provide for the payment of the next quarter’s current 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 Village Council, prior to the commencement of each operating year, shall adopt a budget covering the foregoing expenses for each year, and such total expenses shall not exceed the total amount specified in said budget, except by a vote of two-thirds of the members of the Village Council.
(C) Bond and Interest Redemption Fund.
(1) There shall next be established and maintained a separate depository account designated as the Bond and Interest Redemption Fund, which shall be used solely for the purpose of paying the principal of, and the interest upon, the bonds hereby authorized. The monies in the Bond and Interest Redemption Fund (including the Bond Reserve Account hereinafter established) shall be kept on deposit with the bank or trust company where the principal and interest on the bonds herein authorized are currently payable.
(2) Out of the revenue remaining in the Receiving Fund, after provision has been made for expenses of operation and maintenance of the system, there shall next be set aside, quarterly, in the Bond and Interest Redemption Fund, a sum proportionately sufficient to provide for the payment of the principal of, and interest upon, all outstanding bonds payable from the revenues of the system, as and when the same become due and payable. The amount so set aside for interest each quarter during the first six months of each operating year shall not be less than one-half of the total amount of interest maturing on the following July 1, and during the last six months of each operating period shall be not less than one-half of the total amount of interest maturing on the following January 1. The amount so set aside for principal during each quarter during each operating year, commencing January 1, 1955, shall be not less than one-fourth of the amount of principal maturing on the January 1 following such operating year. If there shall be any deficiency in the amount previously required to be set aside, then the amount of such deficiency shall be added to the current requirements.
(3) There is hereby established in the Bond and Interest Redemption Fund a separate account, to be known as the Bond Reserve Account, into which there shall be paid, quarterly, all of the revenues of the system, after provision has been made for the Operation and Maintenance Fund and the Bond and Interest Redemption Fund, until such time as there has been accumulated in said Bond Reserve Account the sum of $7,400, which Bond Reserve Account shall be established in the full amount herein required not later than the close of the operating year commencing January 1, 1956. The money in the said Bond Reserve Account shall be used solely for the payment of the principal and interest on said bonds as to which there would otherwise be default.
(4) If, at any time, it shall be necessary to use monies in the Bond Reserve Account for such payment, then the monies so used shall be replaced from the net revenues first received thereafter which are not required by this subchapter to be used for operation and maintenance or for current principal and interest requirements: provided, however, that such Bond Reserve Account shall not be regarded as monies otherwise appropriated or pledged for the purpose of determining the sufficiency of funds available for redemption of callable bonds.
(5) No further payments need to be made into the Bond and Interest Redemption Fund after enough of the bonds have been retired so that the amount then held in said Fund (including the Bond Reserve Account) is equal to the entire amount of principal and interest which will be payable at the time of maturity of all the bonds then remaining outstanding.
(D) Replacement Fund.
(1) There shall next be established and maintained a separate depository account designated as the Replacement Fund, which shall be used solely for the purpose of making unforeseen major repairs and replacements to the system which may become necessary. There shall be deposited into said account, in quarterly installments, after providing for all requirements for all requirements of the Operation and Maintenance Fund and the Bond and Interest Redemption Fund (including the Bond Reserve Account), all of the revenues of said system until such Fund shall total $5,000. If, at any time, it shall be necessary to use monies in said Fund for such purpose, the monies so used shall be replaced from the net revenues in the Receiving Fund which are not required by this subchapter to be used for the Operation and Maintenance Fund or the Bond and Interest Redemption Fund (including the Bond Reserve Account).
(2) Monies remaining in the Receiving Fund at the end of any operating year, after full satisfaction of the foregoing requirements, shall be transferred to the Bond and Interest Redemption Fund and used for the purpose of calling bonds of this issue prior to maturity at the times and at the prices hereinbefore set forth. All monies from time to time in the Bond and Interest Redemption Fund over and above the current requirements of said fund required by law and this subchapter, and the Bond Reserve Account, may be used to call bonds for redemption prior to maturity, and shall be so used when such funds total $10,000 or more; provided, however, that if there be any deficit in the Operation and Maintenance Fund, Bond and Interest Redemption Fund (including the Bond Reserve Account), or the Replacement Fund by reason of defaults in setting aside the amounts hereinbefore required, then transfers shall be made from the surplus remaining in the Receiving Fund at the end of any operating year, to such funds, in the order named to the extent of such deficit.
(Ord. 201, passed - -)