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(a) If the moneys in the Water Supply and Sewage Disposal Receiving Fund are insufficient to provide for the current requirements of the Operation and Maintenance Fund or the Bond and Interest Redemption Fund, any moneys and/or securities in other funds of the Municipal water and sewer system shall be transferred, first, to the Operation and Maintenance Fund, and second, to the Bond and Interest Redemption Fund, to the extent of any deficit therein.
(b) All cash on hand as of June 1, 1963, in any of the funds of the present water and sanitary sewer facilities of the City, after making the transfers specified in Section 1040.38(a), shall be transferred to the Receiving Fund at that time.
(c) The moneys in funds or accounts of the system may be invested in United States Government obligations, subject to the limitations provided in Act 94 of the Public Acts of 1933, as amended, and the income derived from such investments shall be credited to the fund from which such investments were made. In the case of such an investment, the securities representing the same shall be kept on deposit with the bank having the deposit of the fund or funds from which the purchase was made.
(d) Such bonds shall be sold and the proceeds applied in accordance with the provisions of Act 94 of the Public Acts of 1933, as amended.
(e) The proceeds of sale of the bonds herein authorized to be issued shall be deposited in the National Bank of Detroit, Wayne, Michigan, a bank insured by the Federal Deposit Insurance Corporation. From the proceeds of sale of the bonds there shall be immediately transferred to the Bond and Interest Redemption Fund any premium and accrued interest paid on the bonds. There shall also be immediately deposited in trust, with The Detroit Bank and Trust Company, paying agent for the outstanding water and sewer revenue bonds dated March 1, 1941, the sum of fifty thousand dollars ($50,000), representing the principal amount of such bonds presently outstanding which will be redeemed on September 1, 1963, such sum to be held by such paying agent bank in trust and used for the purpose of redeeming such bonds on such call date. The balance of such proceeds shall be applied solely in payment of the cost of the public improvements and any engineering, legal or 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 files with Council a signed statement to the effect that 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, and that such work is entirely satisfactory.
Any unexpended balance of the proceeds of sale remaining after completion of the public improvements may, at the discretion of Council and to the extent of fifteen percent of the amount of bonds herein authorized, be used for further improvements, enlargements and extensions to the system, provided that at the time of such expenditure, such use is approved by the Municipal Finance Commission. Any remaining balance after such expenditure shall be paid into the Bond and Interest Redemption Fund and shall be used for the redemption of callable bonds or for purchasing bonds on the open market at not more than the fair market value thereof.
(f) The City 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:
(1) The City will maintain the system in good repair and working order, 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, including the making and collecting of sufficient rates for water and sewage disposal services rendered by the system and the segregation and application of the revenues of the system in the manner provided in this section.
(2) Council will cause to be maintained and kept proper books of record and account, separate from all other records and accounts, in which shall be made full and correct entries of all transactions relating to the system. Not later than three months after the close of each year, Council will cause to be prepared on forms furnished by the Municipal Finance Commission, if such 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 operating year and such other information as is necessary to enable any taxpayer of the City, user of the service furnished, holder or owner of the bonds, or anyone acting in their behalf, to be fully informed as to all matters pertaining to the financial operation of the system during such year. A certified copy of such statement shall be filed with the Municipal Finance Commission and such statement and books of record and account shall at all reasonable times be open to inspection by any taxpayer of the City, user of the service, holder or owner of the bonds, or anyone acting in their behalf. Council will also cause an annual audit of such books of record and account for the preceding operating year to be made by a recognized independent certified public accountant and will make such audit available to the holders of any of the bonds. Such audit shall be completed and so made available not later than three months after the close of each operating year.
(3) The City will maintain and carry sufficient insurance covering the system and the operation thereof in order to adequately protect the system against loss or damage and will apply proceeds of any insurance received to the restoration of the property destroyed or damaged and, to the extent that insurance proceeds are not used for such purpose, will deposit the same in the Bond and Interest Redemption Fund.
(4) The City 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 City, 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 City will not grant any franchise or right to any person, public or private, to operate a sewage disposal system or a water supply system that will in any way compete with the system. The City will cause the public improvements to be acquired promptly and in accordance with the engineer's plans and specifications therefor.
(g) The right is reserved, in accordance with the provisions of Act 94 of the Public Acts of 1933, as amended, to issue additional bonds payable from the revenues of the system, which shall be of equal standing with the bonds herein authorized, but only such bonds, for such purposes and with such conditions as are herein provided for.
(1) Bonds to complete the public improvements in accordance with the plans and specifications therefor are hereby authorized, but such bonds shall not be authorized unless the consulting engineers or the successor engineers in charge of construction execute a certificate evidencing the fact that additional funds are needed to complete the public improvements in accordance with the plans and specifications therefor. If such certificate is so executed and filed with the City Clerk, it shall be the duty of Council to provide for and issue additional revenue bonds in the amount stated in such certificate to be necessary to complete the public improvements in accordance with the plans and specifications.
(2) Bonds in the aggregate principal sum of not to exceed two hundred seven thousand dollars ($207,000), to be issued for the purpose of paying all or part of the cost of acquiring and constructing a trunk sanitary sewer, are hereby authorized, which bonds shall mature serially in amounts not exceeding the following:
$90,000 June 1 of each of the years 1994 and 1995; and
$27,000 June 1, 1996.
Such bonds shall be delivered to the purchaser thereof not later than three years from the date of the bonds authorized by the provisions of this chapter; if not so delivered the authority to issue such bonds shall cease. Bonds issued in accordance with this paragraph shall not be subject to the limitations provided in paragraph (g)(3) hereof.
(3) After three years from the date of the bonds authorized by the provisions of this chapter for subsequent additions, extensions and improvements to the system, other than those specified in paragraph (g)(2) hereof, additional bonds are authorized, provided that no such additional bonds shall be issued in accordance with this paragraph unless the average annual net revenues for the last two preceding completed operating years of the system, or the net revenues for the last completed operating year, whichever is lower, are equal to at least one and one-half times the largest annual principal and interest requirements thereafter maturing on the bonds herein authorized, on any then previously issued bonds of equal standing with the bonds herein authorized, and on such additional bonds then being issued. For the purpose of determining net revenues under the above requirements, if the City raises the water and/or sewer rates at the time of authorizing such additional bonds, then the net revenues of the system for each of the last two preceding operating years, or the net revenues of the last preceding fiscal year, as the case may be, shall be augmented to an amount reflecting the effect of such increase had the City's water and/or sewer billings during such years been at the increased rates. Prior to the issuance of any additional bonds pursuant to this paragraph, there shall be filed with the City Clerk a statement showing the average annual net revenues for the two preceding completed operating years, the additional or augmented revenues reflecting the application of the increased rates and the annual principal and interest requirements on all outstanding bonds payable from revenues of the system and the bonds proposed to be issued. Such statement shall be executed by a registered engineer appointed by the City. Permission of the Municipal Finance Commission (or such other State body having jurisdiction over the issuance of municipal bonds) to issue such additional bonds shall constitute a conclusive presumption of the existence of conditions permitting the issuance thereof.
Except as herein authorized, no additional bonds having equal standing with the bonds of this issue shall be authorized or issued.
(h) Such bonds and coupons shall be in substantially the following form:
UNITED STATES OF AMERICA
STATE OF MICHIGAN
COUNTY OF WAYNE
CITY OF WAYNE
WATER SUPPLY AND SEWAGE DISPOSAL SYSTEM
REFUNDING AND IMPROVEMENT REVENUE BOND
KNOW ALL MEN BY THESE PRESENTS that the CITY OF WAYNE, County of Wayne, State of Michigan, for value received, hereby promises to pay to the bearer hereof, or if registered, to the registered holder, but only out of the revenues of the Water Supply and Sewage Disposal System of the City, including all appurtenances, extensions and improvements thereto, the sum of ______________________ THOUSAND DOLLARS on the first day of June A.D., 19___, with interest thereon from the date hereof until paid at the rate of _________ per cent ( %) per annum, payable on December 1, 1963, and semiannually thereafter on the first day of June and December of each year, upon presentation and surrender of the proper interest coupons hereto attached as they severally become due. Both principal of and interest on this bond are hereby made payable in lawful money of the United States of America at ______________________________________ and for the prompt payment thereof, the gross revenues of the Water Supply and Sewage Disposal System of the City of Wayne, including all appurtenances, extensions and improvements thereto, after provision has been made for reasonable and necessary expenses of operation, administration and maintenance, are irrevocably pledged and a statutory lien thereon is hereby created, which is a first lien, subject only to the payment of principal and interest on 1943 Water and Sewer Revenue Bonds of the City, dated March 1, 1943, in the aggregate principal amount of $20,000.00, for the payment of which principal and interest thereon to maturity, sufficient funds have been deposited in escrow with the paying agent.
This bond is one of a series of ___________ ( ) bonds of even date and like tenor, except as to date of maturity ______________, aggregating the principal sum of $1,530,000.00, issued pursuant to Ordinance No. ________, duly adopted by the City Council on ____________, 1963, 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 constructing improvements to the Water Supply and Sewage Disposal System of the City and refunding all of the outstanding Water and Sewer Revenue Bonds, dated March 1, 1941, in the aggregate principal sum of $50,000.00. 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 1968 to 1978, both inclusive, shall not be subject to prior redemption.
The right is reserved of redeeming bonds maturing in the years 1979 to 1993, both inclusive, at the option of the City, in inverse numerical order, on any interest payment date on or after June 1, 1978, at par and accrued interest to the date fixed for redemption, plus a premium as follows:
3% of par value on each bond called for redemption on or prior to June 1, 1981;
2% of par value on each bond called for redemption after June 1, 1984, but on or prior to June 1, 1987;
1% of par value on each bond called for redemption after June 1, 1990, but prior to maturity.
Thirty days' notice of the call of any bonds for redemption shall be given by publication in a paper circulated in the State of Michigan which carries, as part of its regular service, notices of sale of municipal bonds and in case of registered bonds, thirty days' notice shall be given by mail to the registered address. Bonds so called for redemption shall not bear interest after the date fixed for redemption, provided funds are on hand with the paying agent to redeem said bonds.
This bond is a self-liquidating bond, and is not a general obligation of the City of Wayne and does not constitute an indebtedness of the City of Wayne within any constitutional or statutory limitation, but is payable both as to principal and interest, solely from the revenues of the Water Supply and Sewage Disposal System of the City. The principal of and interest on this bond are secured by the statutory lien hereinbefore mentioned.
The City of Wayne hereby covenants and agrees to fix and maintain at all times while any of such bonds shall be outstanding, such rates for service furnished by the Water Supply and Sewage Disposal System as shall be sufficient to provide for payment of the interest upon and principal of all such bonds, as and when the same become due and payable, to create a bond and interest 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 said Water Supply and Sewage Disposal System as are necessary to preserve the same in good repair and working order.
This bond and the interest thereon are exempt from any and all taxation whatsoever by the State of Michigan or by any taxing authority within said State.
This bond may be registered as to principal only on the books of the City Treasurer in the name of the holder, and such registration noted on the back hereof by the City Treasurer, after which no transfer shall be valid unless made on the books and noted hereon in like manner, but transferability by delivery may be restored by registration to bearer. Such registration shall not affect the negotiability of the interest coupons.
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.
IN WITNESS WHEREOF, the City of Wayne, County of Wayne, State of Michigan, by its City Council, has caused this bond to be signed in the name of said City by its Mayor and to be countersigned by its City Clerk, and its corporate seal to be hereunto affixed, and has caused the annexed interest coupons to be signed by the facsimile signatures of said Mayor and City Clerk, all as of the first day of June, A.D., 1963.
CITY OF WAYNE
(Form of Coupon)
On the first day of __________, A.D. 19____, the City of Wayne, County of Wayne, State of Michigan, will pay to the bearer hereof the sum of ____________ Dollars, in the manner and out of the revenues described in said bond, at _________________, being the semi-annual interest due that date on its Water Supply and Sewage Disposal System Refunding and Improvement Revenue Bond dated June 1, 1963, No. ___________.
This coupon is not a general obligation of the City of Wayne, but is payable from certain revenues as set forth in the bond to which it pertains.
NOTHING TO BE WRITTEN HEREON EXCEPT BY
THE CITY TREASURER
Date of Registration: Name of Registered Owner: Registrar
(i) The City Clerk is hereby authorized and directed to make application to the Municipal Finance Commission for authority to issue and sell such bonds, and for approval of the form of notice of sale of such bonds, in accordance with the provisions of Act 202 of the Public Acts of 1943, as amended, and Act 94 of the Public Acts of 1933, as amended.
(Ord. 7. Passed 4-9-63.)