The Village covenants as follows:
(a) The Village 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.
(b) The Village will establish and maintain, at all times, reasonable fees, charges and rates for the use and service of the system and will provide for the collection thereof and the segregation and application of the revenues in the manner provided by this chapter, sufficient at all times to pay operation and maintenance costs and to provide an adequate depreciation fund. Not less than sixty days prior to the beginning of each fiscal year, the Corporate Authorities shall review the fees, charges and rates for the use and service of the system for sufficiency for such upcoming fiscal year, and such review shall be based upon a tentative budget of the system done by the administrative staff of the Village. There shall be charged against all users of the system, including the Village, such rates and amounts for water service as shall be adequate to meet the requirements of this subsection. Charges for services performed for the Village shall be made against the Village, and payment for the same shall be made monthly from the corporate funds into the Water Revenue Fund as revenues derived from the operation of the system, provided, however, that the Village need not charge itself for such services if, in the previous fiscal year, revenues not including any payments made by the Village shall have met the requirements of this chapter.
(c) The Village, 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 is worn out, destroyed or otherwise 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) The Village will establish such rules and regulations for the control and operation of the system as are necessary for the safe, lawful, efficient and economical operation thereof.
(e) The Village will make and keep proper books and accounts (separate and apart from all other records and accounts of said Village), in which complete entries shall be made of all transactions relating to the system, and hereby covenants that, within 180 days following the close of each fiscal year, it will cause the books and accounts of the system to be audited by independent certified public accountants. Said audit will be available for inspection by the holders of any of the bonds. Each such audit, in addition to whatever matters may be thought proper by the accounts to be included therein, shall, without limiting the generality of the foregoing, including the following:
(1) A statement, in detail, of income and expenditures of the system for such fiscal year;
(2) A balance sheet as of the end of such fiscal year, including a statement of the amount held in each of the accounts of the Water Revenue Fund;
(3) A list of all system insurance policies in force at the end of the fiscal year, setting out for each policy the amount of the policy, the risks covered, the name of the insurer and the expiration date of the policy;
(4) The number of metered water customers and the number of unmetered water customers at the end of the year, the quantity of water pumped and the quantity of water billed;
(5) Changes in the cost of purchased water service during such fiscal year;
(6) A summary of rates in effect at the end of such fiscal year for services of the system and any changes in such rates effective during such fiscal year.
All expenses of the audit required by this section shall be regarded and paid as operation and maintenance costs.
(f) The Village will keep the books and accounts for the system in accordance with generally accepted fund-reporting practices for municipal enterprise funds, provided, however, that the monthly credits to the Depreciation Account shall be in cash and said funds shall be held separate and apart in cash and investments. For the purpose of determining whether sufficient cash and investments are on deposit in such accounts under the terms and requirements of this chapter, investments shall be valued at amortized cost.
(g) The Village 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 or insurance consultant employed by the Village for the purpose of making such recommendations. The Village has the option to self-insure or provide insurance by means of a self-insurance pool with other units of local government, provided that either private insurance is not available at a reasonable cost or the Village or the pool shall have assets (including as an asset the contractual right to draw upon members of the pool), or shall have created a self-insurance reserve fund, in an amount as shall be determined by a competent insurance consultant to be not unreasonable in view of the risks incurred. All moneys received for loss under such insurance policies shall be deposited to the credit of the Depreciation Account and used in making good the loss or damage in respect of which they were paid, either by repairing the property damaged or by replacing the property destroyed, and provision for making good such loss or damage shall be made within ninety days from the date of the loss. The payment of premiums for all insurance policies required under the provisions of this covenant shall be considered an operation and maintenance cost. The proceeds derived from any and all such policies for workers' compensation or public liability shall be paid into the Operation and Maintenance Account and used in paying the claims on account of which they were received.
(h) Except as hereinabove expressly provided for services to the Village, the Village covenants not to provide any free service of the system, and, to the extent permitted by law, the Village will not grant a franchise for the operation of any competing waterworks system within the Village.
(i) The Village will adopt a budget for the Water Revenue Fund prior to the beginning of each fiscal year, subject to applicable State law, providing for payment of all sums to be due in the fiscal year so as to comply with the terms of this chapter and of long-term water supply agreements. The budget may include in its estimate of income the use of available capital moneys or other funds of the Village appropriated for the purpose. If, during the fiscal year, there are extraordinary unbudgeted receipts or payments of unusual cost, the Village will adopt an amended budget for the remainder of the fiscal year, providing for receipts or payments pursuant to this chapter.
(Ord. 1996-06. Passed 4-22-96.)