Closing Item No. 1
ORDINANCE #390
STATE OF
) SS
)
CERTIFICATION OF
ORDINANCE AND MINUTES
I, the undersigned, do hereby certify that I am the duly qualified and acting Clerk of the Village of Cerro Gordo, Piatt County, Illinois (the “Village”), and as such official I am the keeper of the records and files of the Village and of the President and Board of Trustees of the Village (the “Corporate Authorities”).
I do further certify that the foregoing constitutes a full, true and complete excerpt from the proceedings of the meeting of the Corporate Authorities held on the 6th day of February, 1989, insofar as same relates to the adoption of Ordinance No. 390 entitled:
AN ORDINANCE authorizing and providing for the issuance of up to $475,000 Sewerage Refunding Revenue Bonds, Series 1989, of the Village of Cerro Gordo, Piatt County, Illinois, for the purpose of refunding certain prior bonds, prescribing the details of such refunding bonds and providing for the collection, segregation and distribution of the revenues of the sewerage system of the Village of Cerro Gordo, Illinois,
A true, correct and complete copy of which ordinance (the “Bond Ordinance”) as adopted at such meeting appears in the transcript of the minutes of such meeting and is hereto attached. The Bond Ordinance was adopted and approved by the vote and on the date therein set forth.
I do further certify that the deliberations of the Corporate Authorities on the adoption of such ordinance were taken openly, that the vote on the adoption of such ordinance was taken openly, that such meeting was held at a specified time and place convenient to the public, that notice of such meeting was duly given to all of the news media requesting such notice, that such meeting was called and held in strict compliance with the provisions of the open meeting laws of the State of Illinois, as amended, and the Illinois Municipal Code, as amended, and that the corporate Authorities have complied with all of the applicable provisions of such open meeting laws and such Code and their procedural rules in the adoption of such ordinance.
IN WITNESS WHEREOF, I hereunto affix my official signature and the seal of the Village of Cerro Gordo, Illinois, this ________ day of ______________, 1989.
_________________________________
Clerk
(SEAL)
ORDINANCE NO. _______________
AN ORDINANCE
authorizing and providing for the
issuance of up to $475,000 Sewerage Refunding Revenue Bonds, Series 1989, of
the Village of Cerro Gordo, Piatt County, Illinois, for the purpose of
refunding certain prior bonds, prescribing the details of such refunding bonds
and providing for the collection, segregation and distribution of the revenues
of the sewerage system of the Village of Cerro Gordo, Illinois.
PREAMBLES
WHEREAS, the Village of Cerro Gordo, Piatt County, Illinois (the “Municipality”) operates its municipally-owned sewerage system (the “System”), separate and apart from any waterworks system, in accordance with the provisions of Division 141 of Article 11 of the Illinois Municipal Code (Section 11-141-1 et seq. of Chapter 24 of the Illinois Revised Statutes, as supplemented and amended); and
WHEREAS, the President and Board of Trustees of the Municipality (the “Corporate Authorities”) pursuant to an ordinance authorizing and providing for the issue of $800,000 5% Sewerage Revenue Bonds for the Village of Cerro Gordo, Piatt County, Illinois, for the purpose of defraying part of the cost of constructing a sewerage system in and for the Village, passed and approved by the Municipality’s President and Board of Trustees on November 24, 1975 (the “Prior Bond Ordinance”), determined that it was advisable, necessary and in the best interests of the Municipality’s public health, safety and welfare to undertake a project providing for the construction of the System, including wastewater treatment and collection facilities, together with all required structures, equipment, appurtenances and fixtures, all electrical, mechanical or other work and the acquisition of land or rights in land necessary, useful or advisable in connection with such work (including as such work may have progressed in one or more phases and additions, extensions and improvements, the “Project”), all in accordance with the plans and specifications therefore prepared by consulting engineers engaged for such purposes, and appropriately filed in the office of the Village Clerk for public inspection; and
WHEREAS, the costs of acquiring, constructing, and installing the Project, including necessary interest during acquisition, construction and installation, engineering, legal, financial, bond discount, printing and publication costs, and other expenses preliminary to and in connection with the Project, were paid in whole or in part from the hereinafter described Prior Bonds; and
WHEREAS, the Municipality has outstanding obligations which are payable from and to which are pledged the revenues of the System, such obligations being those sewerage revenue bonds which are outstanding and unpaid under and pursuant to the Prior Bond Ordinance (the “Prior Bonds”); and
WHEREAS, for convenience of reference only this ordinance is divided into numbered sections with headings, which shall not define or limit the provisions hereof, as follows:
Page
Preambles 1
Section 1. Definitions
3
Section 2. Incorporation of Preambles 4
Section 3. Determination to Issue Bonds 5
Section 4. Determination of Useful Life 5
Section 5. Bond Details 5
Section 6. Registration of Bonds; Persons Treated as Owners 6
Section 7. Redemption 8
Section 8. Amendment 10
Section 9. Form of Bonds 10
Section 10. Bonds Limited Obligations 17
Section 11. Creation and Continuation of System Fund and
Accounts Thereof 17
Section 12. Flow of Funds 17
Section 13. General Covenants 22
Section 14. Issuance of Parity Bonds 25
Section 15.
Section 16. Use of Proceeds 27
Section 17. Provisions a Contract 28
Section 18. Non-Arbitrage 28
Section 19. Registered Form 30
Section 20. List of Bondholders 31
Section 21. Duties of Bond Registrar and Paying Agent 31
Section 22. Small Issuer Provisions and Designation of Bonds 31
Section 23. Severability 31
Section 24. Repealer 32
Section 25. Effective Date 32
NOW, THEREFORE, BE IT ORDAINED BY THE
PRESIDENT AND BOARD OF TRUSTEES OF THE
Section 1 Definitions.: Certain words and terms used in this ordinance shall have the meanings given them above in the preambles hereto and the meanings given them in this Section 1, unless the context or use clearly indicates another or different meaning is intended. Certain definitions are as follows:
1) “Act” means Divisions 4 of Article 8 of the
Illinois Municipal Code (Section
2) “Bond” or “Bonds” means the Municipality’s $475,000 Sewerage Refunding Revenue Bonds, Series 1989, authorized to be issued by this ordinance.
3) “Code” means the Internal Revenue Code of 1986, as amended.
4) “Corporate Authorities” means the President and the Board of Trustees of the Municipality.
5) “Fiscal Year” means twelve-month period beginning May 1 of the calendar year and ending on the next succeeding April 30.
6) “Gross Revenues” means all income from whatever source derived from the System, including (i) investment income; (ii) connection, permit and inspection fees and the like; and (iii) penalties and delinquency charges, but excluding expressly (a) nonrecurring income from the sale of real estate; (b) governmental or other grants; (c) advances from or grants to the Municipality; (d) capital development, reimbursement, or recovery charges and the like; (e) annexation or pre-annexation charges; and (f) as otherwise determined in accordance with generally accepted accounting principles for municipal enterprise funds.
7) “Maximum Annual Debt Service” means an amount of money equal to the highest future principal and interest requirement of all Outstanding Bonds required to be deposited into the Bond and Interest Account created by this ordinance in any Fiscal Year, including and subsequent to the Fiscal Year in which the computation is made. Any Outstanding Bonds required to be redeemed pursuant to mandatory redemption from the Bond and Interest Account shall be treated as falling due on the date required to be redeemed (except in the case of failure to make any such mandatory redemption) and not on the stated maturity date of such Outstanding Bonds.
8) “Municipality” means the
9) “Net Revenues” means Gross Revenues minus Operation and Maintenance Expenses.
10) “Operation and Maintenance Expenses” means all expenses of operating, maintaining and routine repair of the System, including wages, salaries, costs of materials and supplies, power, fuel, insurance, purchase of sewer treatment services; but excluding debt service, depreciation, or any reserve requirements, and otherwise as determined in accordance with generally accepted accounting principles for municipal enterprise funds.
11) “Outstanding Bonds” means the Bonds and the Parity Bonds which are outstanding and unpaid; provided, however, such term shall not include the Bonds, the parity Bonds or the Prior Bonds (i) which have matured and for which moneys are on deposit with proper paying agents, or are otherwise properly available, sufficient to pay all principal and interest thereof, or (ii) the provision for payment of which has been made by the Municipality by the deposit in an irrevocable trust or escrow of funds or direct, full faith and credit obligations of the United States of America, the principal and interest of which will be sufficient to pay at maturity or as called for redemption all the principal of and applicable premium on such Bonds, and will not result in the loss of the exclusion from gross income of the interest thereon under Section 103 of the Code.
12) “Parity Bonds” means bonds or any other obligations to be issued subsequent in time to the Bonds and which will share ratably and equally in the earnings of the System with the Bonds.
13) “Project” means the improvements to the System set forth in the preambles to this ordinance, acquired, constructed and installed from proceeds of the Prior Bonds.
14) “System” refers to all property, real, personal or otherwise owned or to be owned by the Municipality or under the control of the Municipality and used for sewerage collection and treatment, including the Project and any and all further extensions, improvements and additions to the System or the Project.
15) “System
Fund” or “Sewerage Fund” means the “Sewerage Fund of the
Section 2. Incorporation of Preambles. The Corporate Authorities hereby find that all of the recitals contained in the preambles to this ordinance are true, complete and correct and hereby incorporate them into this ordinance by this reference thereto.
Section 3. Determination to Issue Bonds. It is necessary and in the best interests of the Municipality to prepay and retire the Prior Bonds and to issue the Bonds to pay for such prepayment. Upon prepayment of the Prior Bonds as herein provided, the moneys in the Bond and Interest Reserve and Redemption Account and in the Depreciation Account in connection with the Prior Bonds shall be transferred to and deposited into or credited to the Bond Reserve Account and to the Depreciation Account under and as provided in Section 12 hereof and are hereby appropriated for the foregoing purposes. It is the intent of the Corporate Authorities to invoke all supplemental power and authority available under and pursuant to the Registered Bond Act, The Local Government Credit Enhancement Act, the Municipal Bond Reform Act, the Local Government Debt Reform Act and Division 141 of Article 11 of the Illinois Municipal Code. No Bonds shall be issued, sold and delivered under and pursuant to this ordinance unless and until provisions have been made to prepay and retire the Prior Bonds, and funds have been concurrently therewith irrevocably deposited and pledged for such prepayment according to FmHA’s Discount Loan Purchase Program.
Section 4. Determination
of Useful Life. The Corporate
Authorities hereby determine the period or usefulness of the Project’s
improvements to the System does not expire prior to
Section 5. Bond Details. For the purpose of prepaying the Prior Bonds according to FmHA’s Discount Loan Purchase Program, there shall be issued and sold Bonds in a principal amount up to $475,000. The Bonds shall each be designated “Sewerage Refunding Revenue Bond, Series 1989” and be dated March 1, 1989, shall bear the date of authentication, shall be in fully registered form, shall be in denominations of $5,000 each and authorized integral multiples thereof, shall be numbered 1 and upward, bear interest, payable November 1, 1989, and semi-annually thereafter on May 1 and November 1 in each year and shall become due and payable serially, subject to the right of prior redemption hereinafter stated, on May 1 of each of the years and in the amounts, as follows:
Principal Interest
Year Amount Rate
1990 15,000 6.80%
1991 15,000 6.90
1992 15,000 7.00
1993 15,000 7.10
1994 15,000 7.20
1995 15,000 7.30
1996 20,000 7.40
1997 20,000 7.50
1998 20,000 7.60
1999 25,000 7.70
2000 25,000 7.80
2001 25,000 7.90
2002 30,000 8.00
2003 30,000 8.00
2004 35,000 8.05
2005 35,000 8.05
2006 40,000 8.10
2007 40,000 8.10
2008 40,000 8.10
The Bonds
shall bear interest from their date or from the most recent interest payment
date to which interest has been paid or duly provided for, until the principal
amount of the Bonds is paid, such interest (computed upon the basis of a
360-day year of twelve 30-day months) shall be paid by check or draft of the
American Bank, Cerro Gordo, Illinois, as the paying agent (together with its
successors, the “Paying Agent”), payable in lawful money of the United States
of America, to the person in whose name such Bonds are registered at the close
of business on the fifteenth (15th) day of the month next preceding
each interest payment date. The
principal of the Bonds shall be payable in lawful money of the
The Bonds shall be signed by the manual or facsimile signature of the President of the Municipality, and shall be attested by the manual or facsimile signature of the Clerk of the Municipality, and the corporate seal of the Municipality shall be affixed thereto or printed thereon, and in case any officer whose signature shall appear on any Bond shall cease to be such officer before the delivery of such Bond, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery.
All Bonds shall have thereon a certificate of authentication substantially in the form hereinafter set forth duly executed by Municipal Services Corporation, Countryside, Illinois, as Bond registrar (together with its successors, the “Bond Registrar”), as authenticating agent of the Municipality and showing the date of authenticating agent of the Municipality and showing the date of authentication. No Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this ordinance unless and until such certificate of authentication shall have been duly executed by the Bond Registrar by manual signature, and such certificate of authentication upon any such Bond shall be conclusive evidence that such Bond has been authenticated and delivered under this ordinance. The certificate of authentication on any Bond shall be deemed to have been executed by the Bond Registrar if signed by an authorized officer of the Bond Registrar, but it shall not be necessary that the same officer sign the certificate of authentication on all of the Bonds issued hereunder.
Section 6. Registration of Bonds; Persons Treated as Owners. The Municipality shall cause books (the “Bond Register”) for the registration and for the transfer of the Bonds as provided in this ordinance to be kept at the principal office of the Bond Registrar, which is hereby constituted and appointed the registrar of the Municipality. The Municipality is authorized to prepare, and the Bond Registrar shall keep custody of multiple Bond blanks executed by the Municipality for use in the transfer and exchange of Bonds.
Upon surrender for transfer of any Bond at the principal office of the Bond Registrar, duly endorsed by, or accompanied by a written instrument or instruments of transfer in form satisfactory to the Bond Registrar and duly executed by, the registered owner thereof or such registered owner’s attorney duly authorized in writing, the Municipality shall execute and the Bond Registrar shall authenticate, date and deliver in the name of the transferee or transferees a new, fully registered Bond or Bonds of the Same maturity of authorized denominations, for a like aggregate principal amount. Any fully registered Bond or Bonds may be exchanged at the office of the Bond Registrar for a like aggregate principal amount of a Bond or Bonds of the same maturity of other authorized denominations. The execution by the Municipality of any fully registered Bond shall constitute full and due authorization of such Bond and the Bond Registrar shall thereby be authorized to authenticate and deliver such Bond, provided, however, the principal amount of outstanding Bonds of each maturity authenticated by the Bond Registrar shall not exceed the authorized principal amount of Bonds for such maturity less previous retirements.
The Bond Registrar shall not be required to transfer or exchange any Bond during the period beginning on the fifteenth (15th) day of the month next preceding any interest payment date on such Bond and ending on such interest payment date, or to transfer or exchange any Bond after notice calling such Bond for redemption has been mailed, or during a period of fifteen (15) days next preceding mailing of a notice of redemption of such Bond.
The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of the principal of or interest on any Bond shall be made only to or upon the order of the registered owner thereof or such registered owner’s legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums to be paid.
No service charge shall be made for any transfer or exchange of Bonds, but the Municipality or the Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Bonds except in the case of the issuance of a Bond or Bonds for the unredeemed portion of a Bond surrendered for redemption.
SECTION 7. Redemption. The Bonds maturing on and after May 1, 2000, are subject to redemption prior to maturity on any interest payment date on or after May 1, 1999, at the option of the Municipality as a whole or in part in integral multiples of $5,000 in inverse order of their maturity (less than all of the Bonds of a single maturity to be selected by lot as the Bond Registrar determines), on the redemption dates and at the redemption prices (expressed as a percentage of the principal amount to be so redeemed) plus accrued interest to the redemption date, as follows:
Redemption Dates Redemption
Price
May 1, 2000 and
May 1, 2001 and
The Bonds shall be redeemed only in the principal amount of $5,000 each and integral multiples thereof. The Municipality at least forty-five (45) days prior to the redemption date (unless a shorter time period shall be satisfactory to the Bond Registrar) shall notify the Bond Registrar of such redemption date and of the principal amount of Bonds to be redeemed. For purposes of any redemption of less than all of the outstanding Bonds of a single maturity, the particular Bonds or portions of Bonds to be redeemed shall be selected at least thirty (30) days prior to the redemption date by the Bond Registrar from the outstanding Bonds of the longest maturity or maturities by such method as the Bond Registrar shall deem fair and appropriate and which may provide for the selection for redemption of Bonds or portions of Bonds in principal amounts of $5,000 and integral multiples thereof.
The Bond Registrar shall promptly notify the Municipality in writing of the Bonds or portion of Bonds selected for redemption and, in the case of any Bond selected for partial redemption, the principal amount thereof to be redeemed.
Unless waived by the registered owner or owners of Bonds to be redeemed, presentment being redeemed conclusively a waiver, notice of the call for any such redemption shall be given by the Bond Registrar on behalf of the Municipality by mailing the redemption notice by registered or certified mail at least thirty (30) days and not more than sixty (60) days prior to the date fixed for redemption to the registered owner or owners of the Bond or Bonds to be redeemed at the address shown on the Bond Register or at such other address as is furnished in writing by such registered owner or owners to the Bond Registrar.
All notices of redemption shall state:
1) the redemption date,
2) the redemption price,
3) if less than all of any Bond or of the outstanding Bonds are to be redeemed, the
identification (and, in the case of partial redemption, the respective principal
amounts in integral multiples of $5,000) of the Bonds to be redeemed,
4) that on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption and, upon the
deposit of funds therefore with the Paying Agent, that interest thereon shall cease to accrue from and after such redemption date, and
5) the place where such Bonds are to be surrendered for payment of the redemp-
tion price, which place of payment shall be the principal office of the Paying
Agent.
Prior to any redemption date, the Municipality shall deposit with the Paying Agent an amount of money sufficient to pay the redemption price of all the Bonds or portions of Bonds which are to be redeemed on that date. Notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall on the redemption date become due and payable at the redemption price therein specified, and from and after such date (unless the Municipality shall not have sufficient funds so on deposit for the payment of the redemption price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with the notice therefore, such Bonds shall be paid by the Paying Agent at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the registered owner thereof a new Bond or Bonds of the same maturity in the amount of the unpaid principal.
If any Bond or portion of Bond called for redemption shall not be so paid upon surrender thereof for redemption, the principal shall, until paid, bear interest from the redemption date at the rate borne by the Bond or portion of Bond so called for redemption. All Bonds which have been redeemed shall be cancelled and destroyed by the Bond Registrar and shall not be reissued.
Parity Bonds hereinafter issued pursuant to the terms hereof may be redeemable at such times and upon such terms as may be determined at the time of authorization thereof.
SECTION 8. Amendment. The rights and obligations of the Municipality and of the registered owners of Outstanding Bonds may from time to time be modified or amended by a supplemental ordinance adopted by the Corporate Authorities with the written consent of the registered owners of all the Outstanding Bonds affected; nor shall any such modification or amendment reduce the percentage of the registered owners of Outstanding Bonds required for written consent of such modification or amendment without the consent of the registered owners of all of the Outstanding Bonds.
SECTION 9. Form of Bonds.
Unless in any contract for the sale of the Bonds the purchaser or
purchasers of the Bonds shall agree to accept typewritten or other temporary
Bonds preliminary to the availability of Bonds in definitive form prepared in
compliance with the National Standard Specifications for Fully Registered
Municipal Securities prepared by the American National Standards Institute,
Bonds shall comply therewith, and in any event shall be in substantially the following
form (provided, however, that if the text of the Bond is to be printed in its
entirety on the front side of the Bond, then paragraph and the legend, “See
Reverse Side for Additional Provisions,” shall be omitted and paragraphs (6)
through (16) shall be inserted immediately after paragraph (1) and that other
appropriate insertions, deletions and modifications in the form of the Bonds
may be made, including the issuance of a single temporary Bond with multiple
maturities, as the purchaser or purchasers thereof agree or accept, in an
appropriate form prepared by Bond counsel, not inconsistent herewith):
(Form of Bond – Front Side)
REGISTERED REGISTERED
NO.________ $___________
STATE OF
SEWERAGE REFUNDING REVENUE BOND, SERIES 1989
________________
: See Reverse Side:
: for Additional CUSIP __________
: Provisions :
Interest Maturity Dated
Rate: _____% Date: May 1, _____ Date:
Registered Owner:
Principal Amount:
(1) KNOWN BY ALL THESE PRESENT, that the Village of Cerro Gordo, Piatt County, Illinois (the “Municipality”), hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or registered assigns as hereinafter provided, solely from the Sewerage Fund of the Village of Cerro Gordo, Piatt County, Illinois (the “Fund”), as hereinafter described, and not otherwise, on the Maturity Date identified above the Principal Amount identified above, payable upon presentation and surrender hereof to the hereinafter described Paying Agent, in lawful money of the United States of America and to pay interest on such Principal Amount from the date of this Bond or from the most recent interest payment date to which interest has been paid at the Interest Rate per annum set forth above on May 1 and November 1 of each year, commencing November 1, 1989, until such Principal Amount is paid. Principal of this Bond is payable in lawful money of the United States of America at The American Bank, Cerro Gordo, Illinois, as paying agent (together with its successors, the “Paying Agent”). Payment of the semiannual installments of interest hereon shall be made to the Registered Owner hereof as shown on the registration books of the Municipality maintained by Municipal Services Corporation, Countryside, Illinois (together with its successors, the “Paying Agent”). Payment of the semiannual installments of interest hereon shall be made to the Registered Owner hereof as shown on the registration books of the Municipality maintained by Municipal Services Corporation, Countryside, Illinois (together with its successors, the “Bond Registrar”), at the close of business on the fifteenth (15th) day of the month next preceding each interest payment date and shall be paid by check or draft of the Paying Agent in the lawful money of the United States of America mailed to the address of such Registered Owner as it appears on such registration books or at such other address furnished in writing by such Registered Owner to the Bond Registrar.
2) Reference is hereby made to the further provisions of this Bond set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as if set forth at this place.
3) It is hereby certified and recited that all acts, conditions and things required to be done precedent to and in the issuance of this Bond have been done and have happened and have been performed in regular and due form of law and that provision has been made for depositing in the Fund the entire revenues received from the operation of the Municipality’s sewerage system to be applied in the manner as hereinabove set forth; and the Municipality hereby covenants and agrees that it will fix and maintain rates for the use and service of the Municipality’s sewerage system and collect and account for the revenues derived therefrom sufficient at all times to pay operation and maintenance expenses, to provide adequate depreciation and reserve funds, to promptly pay the principal of and interest on all obligations issued by the Municipality which are payable solely from the revenues of the System, and to comply with all the covenants of and to maintain the accounts created by the ordinance pursuant to which this Bond and the series of Bonds of which it is a part are issued.
4) This Bond shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by the Bond Registrar.
5) IN WITNESS WHEREOF, the Village of Cerro Gordo, Piatt County, Illinois, by its President and Board of Trustees, has caused this Bond to be signed by the manual or facsimile signature of the President of the Municipality and attested by the manual or facsimile signature of the Clerk of the Municipality, and its corporate seal to be affixed hereto or printed hereon, all as of the Dated Date identified above.
______________________________
President
(SEAL)
ATTEST:
________________________________________
Clerk
Date of Authentication: __________________________
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within mentioned Bond Ordinance and is one of the Sewerage Refunding Revenue Bonds, Series 1989, of the Village of Cerro Gordo, Piatt County, Illinois.
Municipal Services Corporation
Countryside,
Registrar
By _______________________________
Authorized Officer
Bond Registrar: Municipal Services, Corporation,
Countryside,
Paying Agent: The American Bank,
(The remainder of this page is intentionally left blank.)
SEWERAGE REFUNDING REVENUE BOND, SERIES 1989
6) This bond and the bonds of the series of which it forms a part (“Bond” and “Bonds”, respectively) are payable solely from the Net Revenues derived from the operation of the sewerage system of the Municipality (the “System”), and not otherwise, and are issued under authority of the provisions of Divisions 4 of Article 8 of the Illinois Municipal Code (Section 8-4-1 et seq. of Chapter 24 of the Illinois Revised Statutes, as supplemented and amended, including by the Municipal Bond Reform Act and the Local Government Debt Reform Act, the “Act”), for the purpose of paying a part of the cost of prepaying and retiring certain outstanding revenue bonds of the Municipality (the “Prior Bonds”) issued under and pursuant to an ordinance authorizing and providing for the issue of $800,000 5% Sewerage Revenue Bonds of the Village of Cerro Gordo, Piatt County, Illinois, for the purpose of defraying part of the cost of constructing a sewerage system in and for the Village, passed and approved by the Municipality’s President and Board of Trustees on November 24, 1975 (the “Prior Bond Ordinance”). The Bonds are issued pursuant to the Act and Ordinance No. _____, An Ordinance authorizing and providing for the issuance of up to $475,000 Sewerage Refunding Revenue Bonds, Series 1989, of the Village of Cerro Gordo, Piatt County, Illinois, for the purpose of refunding certain prior bonds, prescribing the details of such refunding bonds and providing for the collection, segregation and distribution of the revenues of the sewerage system of the Village of Cerro Gordo, Illinois, passed by the Municipality’s President and Board of Trustees (the “Corporate Authorities”) on the 6th day of February, 1989 (the “Bond Ordinance”), to which reference is hereby expressly made for further definitions and terms and to all the provisions of which the Registered Owner by the acceptance of this Bond assents. This Bond does not constitute an indebtedness of the Municipality within the meaning of any constitutional or statutory provision or limitation.
7) This Bond is one of an authorized issue of up to Four Hundred Seventy Five Thousand Dollars ($475,000), of like tenor, issued as provided in the Bond Ordinance, except as to redemption, interest rate and maturity. Bonds maturing on and after May 1, 2000, are subject to redemption prior to maturity at the option of the Municipality as a whole or in part in integral multiples of $5,000 in inverse order of their maturity (less than all the Bonds of a single maturity to be selected by the Bond Registrar in such manner as it shall deem fair and appropriate), on any interest payment date on and after May 1, 1999, on the redemption dates and at the redemption prices (expressed as a percentage of the principal amount to be so redeemed) plus accrued interest to the redemption date, as follows:
Redemption Dates Redemption Prices
May 1, 2000 and
May 1, 2001 and
8) Notice of any such redemption shall be sent by registered or certified mail not less than thirty (30) days nor more than sixty (60) days prior to the date fixed for redemption to the registered owner of each Bond to be redeemed at the address shown on the registration books of the Municipality maintained by the Bond Registrar or at such other address as is furnished in writing by such registered owner to the Bond Registrar. When so called for redemption, this Bond will cease to bear interest on the specified redemption date, provided funds for redemption are on deposit at the place of payment at that time, and shall not be deemed to be outstanding.
9) Parity Bonds may be issued pursuant to the terms of the Bond Ordinance.
10) Under the Act and the Bond Ordinance, the revenues from the operation of the System shall be deposited in the Fund, which shall be used only as is hereby pledged for paying Operation and Maintenance Expenses of the System, providing adequate reserve and depreciation funds, paying the principal of and interest on all obligations of the Municipality that are payable by their terms only from the revenues of the System, and in making all payments required to maintain the accounts established under the terms of the Bond Ordinance.
11) The rights and obligations of the Municipality and of the registered owners of the Bonds may from time to time be modified or amended by a supplemental ordinance adopted by the Corporate Authorities with the written consent of the registered owners of not less than two-thirds (2/3rds) of the principal amount of all Outstanding Bonds, which includes obligations on a parity with the Bonds (excluding any of such obligations owned by or under the control of the Municipality); provided, however, that no such modification or amendment shall extend or change the maturity of, or date of redemption prior to maturity, or reduce the interest rate, or permit the creation of a preference or priority of any Outstanding Bond or Outstanding Bonds over any other Outstanding Bond or Outstanding Bonds, or otherwise alter or impair the obligation of the Municipality to pay the principal of and interest on any of the Outstanding Bonds at the time, place, rate and in the currency provided therein without the express consent of the registered owners of all the Outstanding Bonds affected; nor shall any such modification or amendment reduce the percentage of the registered owners of Outstanding Bonds required for the written consent to such modification or amendment without the consent of the registered owners of all of the Outstanding Bonds.
12) The Bonds and bonds issued on a parity therewith are co-equal as to the lien on the revenues of the System for their payment and share ratably, without any preference, priority, or distinction, the one over the other, as to the source or method of payment and security of the Outstanding Bonds.
13) This Bond is transferable by the Registered Owner hereof in person or by such Registered Owner’s attorney duly authorized in writing at the principal office of the Bond Registrar in Countryside, Illinois, but only in the manner, subject to the limitations and upon payment of the charges provided in the Bond Ordinance, and upon surrender and cancellation of this Bond. Upon such transfer a new Bond or Bonds of authorized denominations of the same maturity and for the same aggregate principal amount will be issued to the transferee in exchange therefore. The Bond Registrar shall not be required to transfer or exchange any Bond during the period beginning on the fifteenth (15th) day of the month next preceding any interest payment date on such Bond and ending on such interest payment date, or to transfer or exchange any Bond after notice calling such Bond for redemption has been mailed, or during a period of fifteen (15) days next preceding mailing of a notice of redemption of such Bond.
14) The Bonds are issued in fully registered form in the denomination of $5,000 each or authorized integral multiples thereof. This Bond may be exchanged at the principal office of the Bond Registrar for a like aggregate principal amount of Bonds of the same maturity of other authorized denominations, upon the terms set forth in the authorizing ordinance.
15) The Bonds have been designated by the Municipality as “qualified tax-exempt obligations” under Section 265(b) (3) of the Internal Revenue Code of 1986.
16) The Municipality, the Paying Agent and the Bond Registrar may deem and treat the Registered Owner hereof as the absolute owner hereof for the purpose of receiving payment of or on account of principal hereof and interest due hereon and for all other purposes, and neither the Municipality, the Paying Agent nor the Bond Registrar shall be affected by any notice to the contrary.
(ASSIGNMENT)
FOR VALUE RECEIVED, the undersigned sells, assigns and
transfers unto __________
________________________________________________________________________
(Name, Address, and Social Security Number or FEIN of Assignee) the within Bond and does hereby irrevocably constitute and appoint __________________________________
attorney to transfer the within Bond on the books kept for registration thereof with full power of substitution in the premises.
DATED:________________ __________________________________________
Signature
SIGNATURE GUARANTEED: ____________________________________________
NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever.
Section 10. Bonds Limited Obligations. The Bonds shall be payable solely from the Net Revenues as derived from the operation of the System and shall not constitute any indebtedness of the Municipality within the meaning of any constitutional or statutory limitation.
Section 11. Creation and Continuation of System Fund and Accounts Thereof. Upon the issuance of any of the Bonds, the System shall be operated on a Fiscal Year basis. All of the revenues from any source whatsoever derived from the operation of the System shall be set aside as collected and be deposited in a separate fund and in an account in a bank to be designated or continued, as the case may be, by the Corporate Authorities, which fund is hereby created, designated or continued, as the case may be, as the “Sewerage Fund” or the “System Fund”) of the Municipality, which shall constitute a trust fund for the sole purpose of carrying out the covenants, terms, and conditions of this ordinance, and shall be used only in paying operation and maintenance expenses of the System, providing adequate depreciation and reserve funds as herein provided, paying the principal of and interest on all revenue bonds and obligations of the Municipality which by their terms are payable solely from the revenues derived from the System, and providing for the establishment of and expenditure from the respective accounts as hereinafter described.
Section 12. Flow of Funds. There shall be deposited to the Fund all revenues and income of the System as received, and all disbursements for the Operation and Maintenance Expenses of the System and all allocations and deposits to the following Accounts shall be made from the Fund. Concurrently with the prepayment of the Prior Bonds according to FmHA’s Discount Loan Purchase Program, there shall be and there are hereby ordered, created and established separate accounts to be known as the “Operation and Maintenance Account,” the “Bond and Interest Account,” the “Depreciation Account” and the “Surplus Account,” to which there shall be credited on or before the first day of each month by the Treasurer or other appropriate financial officer of the Municipality, without any further official action or direction, in the order in which such accounts are hereinafter mentioned, all moneys held in the System’s Fund, in accordance with the following provisions:
a) Operation and Maintenance Account: There shall be deposited and credited to the Operation and Maintenance Account an amount sufficient, when added to the amount then on deposit in such Account, to establish a balance equal to an amount not less than the amount necessary to pay Operation and Maintenance Expenses for the then current and the next succeeding month.
b) Bond and Interest Account: There next shall be deposited and credited to the Bond and Interest Account and held, in cash and investments, a fractional amount (not less than 1/6) of the interest becoming due on the next succeeding interest payment date on all Outstanding Bonds and also a fractional amount (not less than 1/12) of the principal becoming due (or subject to mandatory redemption) on the next succeeding principal maturity date of all of the Outstanding Bonds until there shall have been accumulated and held in cash and investments in the Bond and Interest Account on or before the month preceding the maturity or due date of interest or principal, or both, an amount sufficient to pay such principal or interest, or both.
In computing the fractional amount to be set aside each month in the Bond and Interest Account, the fraction shall be so computed that a sufficient amount will be set aside in such Account and will be available for the prompt payment of such principal of and interest on all Outstanding Bonds and shall be not less than one-sixth (1/6) of the interest becoming due on the next succeeding interest payment date and not less than one-twelfth (1/12) of the principal becoming due (or subject to mandatory redemption) on the next succeeding principal payment date on all Outstanding Bonds until there is sufficient money in such Account to pay such principal or interest, or both.
Credits into the Bond and Interest Account may be suspended in any Fiscal Year at such time as there shall be a sufficient sum held in cash and investments in such Account to meet principal and interest requirements in such Account for the balance of such Fiscal Year, but such credits shall again be resumed at the beginning of the next Fiscal Year.
All moneys in such Account shall be used only for the purpose of paying interest and principal and applicable premium on Outstanding Bonds.
c) Bond
Reserve Account: At the time of the
issuance and delivery of the Bonds and in such manner and amount as does not
result in the loss of the exclusion under Section 103 of the Code from gross
income of the interest on the Bonds, upon the issuance, sale and delivery of
the Bonds, funds shall be deposited into the Bond Reserve Account by
transferring $7,500 of the cash and investments in the Bond and Interest
Reserve and Redemption Account established and maintained pursuant to the Prior
Bond Ordinance (the “Prior Reserve Account”).
There shall be deposited into such Bond Reserve Account on the first day
of each month commencing
Amounts to the credit of such Bond Reserve Account shall be used to pay principal of or interest and applicable premium on the Outstanding Bonds at any time when there are insufficient funds available in the Bond and Interest Account to pay the same.
d) Depreciation
Account: At the time of the issuance
and delivery of the Bonds and in such manner and amount as does not result in
the loss of the exclusion under Section 103 of the Code from gross income of
the interest on the Bonds, upon the issuance, sale and delivery of the Bonds,
funds shall be deposited into the Depreciation Account by transferring all of
the cash and investments in the Depreciation Account established and maintained
pursuant to the Prior Bond Ordinance (the “Prior Depreciation Account”). There shall be deposited into such
Depreciation Account on the first day of each month commencing
Amounts to the credit of such Depreciation Account shall be used for (i) the payment of the cost of extraordinary maintenance, necessary repairs and replacements, or contingencies, the payment for which no other funds are available, in order that the System may at all times be able to render efficient service and (ii) the payment of principal of or interest and applicable premium on any Outstanding Bonds at any time when there are no other funds available for that purpose in order to prevent a default.
Whenever an amount is withdrawn for such Depreciation Account for the purpose stated in clause (ii) of the preceding paragraph, the amount so transferred shall be added to the amount to be next and thereafter credited at the foregoing monthly rate to such Depreciation Account until full reimbursement to such Account has been made. Each expenditure to be made from such Account for the purpose stated in clause (i) of the preceding paragraph shall be made only after either a consulting engineer or a 4/5 approving vote of the Corporate Authorities has certified that such expenditure is necessary to the continued effective and efficient operation of the System.
e) Surplus: All moneys remaining in the System Fund, after crediting the required amounts to the respective accounts hereinabove provided for, and after making up any deficiency in the above Accounts described in subsections (a) or (d), inclusive, shall be credited to the Surplus Account and shall first be used to make up any subsequent deficiencies in any of the Accounts hereinabove named and then, at the discretion of the Corporate Authorities, shall be used, if at all, for one or more of the following purposes (and not for any general corporate purposes) without any priority among them:
(1) For the purpose of constructing or acquiring repairs, replacements,
renewals, improvements or extensions to the System; or
(2) For the purpose of calling and redeeming Outstanding Bonds which
are callable at the time; or
(3) For the purpose of purchasing Outstanding Bonds at the time at a price
of 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 obligations issued for the purpose of acquiring or constructing
repairs, replacements, renewals, improvements and extensions to the
System; or
(5) For any other lawful System purpose.
f) Investments: Money to the credit of the System Fund prior to the monthly accounting and to the credit of the Operation and Maintenance Account may be invested pursuant to any authorization granted to municipal corporations by Illinois statute or court decision. Money to the credit of the Operation and Maintenance Account, Bond and Interest Account, Bond Reserve Account, Depreciation and Interest Account, Bond Reserve Account, Depreciation Account and Surplus Account may be invested from time to time by the Treasurer of the Municipality in (i) interest bearing bonds, notes, or other direct full faith and credit obligations of the United States of America, (ii) obligations unconditionally guaranteed as to both principal and interest by the United States of America, or (iii) certificates of deposit or time deposits of any bank or savings and loan association, as defined by the Illinois Banking Act or other applicable law, provided such bank or savings and loan association is insured by the Federal Deposit Insurance Corporation (FDIC) or the Federal Savings and Loan Insurance Corporation (FSLIC) or a successor corporation to FDIC or FSLIC, and provided further that the principal of such deposits is secured by a pledge of obligations as described in clauses (f) (i) and (f) (ii) above in the full principal amount of such deposits, and otherwise collateralized in such amount and in such manner as may be required by law. Such investments may be sold from time to time by the Treasurer of the Municipality as funds may be needed for the purpose for which such Accounts have been created.
All interest on any funds so invested shall be credited to the applicable Account of the System Fund for which the investment was made and is hereby deemed and allocated as expended with the next expenditure or expenditures of money from such applicable Account of the System Fund; provided, however, the Municipality shall credit such interest in such manner as to not cause the Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code and applicable regulations, including Treas. Reg. Sections 1.103-13, 1.103-14 and 1.103-15 (1979).
Moneys in any of such accounts shall be invested by the Treasurer, if necessary, in investments restricted as to yield, which investments may be in U.S. Treasury Securities – State and Local Government Series, if available, and to such end the Treasurer shall refer to any investment restrictions covenanted by the Municipality or any officer thereof as part of the transcript of proceedings for the issuance of the Bonds, and to appropriate opinions of counsel.
g) Transfer: Any amounts to the credit of any of the Accounts described above in excess of the then current requirement therefore after prepayment of the Prior Bonds may be transferred by the Corporate Authorities to such other Account or Accounts of the Sewerage Fund as in their sole discretion is designated by resolution.
h) Prior Bond Accounts: Concurrently with the issuance of the Bonds, all the moneys remaining in the special accounts established and maintained pursuant to the Prior Ordinance (generally the “Prior Accounts”) shall be transferred as follows:
(i) From the Operation and Maintenance Account established and maintained pursuant to the Prior Bond Ordinance, all amounts on deposit to the Operation and Maintenance Account created and established hereunder;
(ii) From the Prior Reserve Account and the Prior Depreciation Account, the amounts not less than the amounts specified in (c) and (d) above to the Bond Reserve Account and Depreciation Account hereunder; and
(iii) From the Prior Bond and Interest Sinking Fund Account, to the extent not applied to prepay and redeem Prior Bonds, all amounts on deposit to the Bond and Interest Account; and
(iv) Any excess in any accounts after making the transfers in (i) – (iii) above to the Surplus Account.
Section 13. General Covenants. The Municipality covenants and agrees with the registered owners of the Outstanding Bonds, so long as there are any Outstanding Bonds (as defined herein), as follows:
a) The Municipality will maintain the System and any waterworks system under its jurisdiction and operational control in good repair and working order, will operate the same efficiently and faithfully, will promptly construct and acquire any extensions, improvements, replacements or repairs thereto, and will punctually perform all duties with respect thereto required by the Constitution and laws of the State of Illinois.
b) The Municipality 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 of the System in the manner provided by this ordinance, sufficient at all times to pay Operation and Maintenance Expenses, to cover 125% of maximum Annual Debt Service on all revenue bonds of the Municipality which by their terms are payable solely from the revenues of the System, and to provide for the creation and maintenance of the respective accounts as provided in Section 12 of this ordinance.
There shall be charged against all users of the System, including the Municipality, such rates and amounts for sewerage collection and treatment services as shall be adequate to meet the requirements of this subsection. Charges for services rendered the Municipality shall be made against the Municipality, and payment for the same shall be made monthly from the corporate funds into the System Fund as revenues derived from the operation of the System.
Whenever money in the Bond Reserve Account or the Depreciation Account is used to pay principal of or interest on Outstanding Bonds, other than the Prior Bonds, the Municipality covenants to promptly have prepared a rate study for the System by an independent consultant employed for that purpose, and further, to send a copy of such study, when completed, to the original purchaser of the Bonds along with a letter indicating what action the Municipality has taken responsive to such study.
c) The Municipality from time to time will make all needful and proper repairs, replacements, additions, and betterments to the System so that the System 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) The Municipality will establish such rules and regulations for the control and operation of the System necessary for the safe, lawful, efficient and economical operation thereof.
e) The Municipality will make and keep proper books and accounts (separate and apart from all other records and accounts of said Municipality), in which complete entries shall be made of all transactions relating to the System, and hereby covenants that within ninety (90) 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. Such audit will be available for inspection by the registered owners of any of the Bonds. Each such audit, in addition to whatever matters may be thought proper by the accountants to be included therein, shall, without limiting the generality of the foregoing, include the following:
(i) A statement in detail of income and expenditures of the System for such
Fiscal Year.
(ii) 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 System Fund.
(iii) A list of all insurance policies in force at the end of the Fiscal Year, setting out as to each policy the amount of the policy, the risks covered, the name of
the insurer, and the expiration date of the policy.
(iv) The number of sewerage customers served by the System at the end of the year, the quantity of sewerage processed by the System and a summary of rates,
connection and other charges in effect from time to time for services of the System.
(v) The amount and details of all Outstanding Bonds.
(vi) The accountant’s comments regarding the manner in which the Municipality
has carried out the accounting requirements of this ordinance, and the accountant’s recommendations for any changes or improvements in the operation
of the System.
All expenses of the audit required by this section shall be regarded and paid as an Operation and Maintenance Expense. It is further covenanted and agreed that a copy of each such audit shall be furnished upon completion to the original purchaser of the Bonds, and a summary thereof shall be furnished to any Bondholder upon request.
f) The Municipality 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 Bond and Interest Account and the Depreciation Account shall be in cash, and such 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 ordinance, investments shall be valued at the lower of the cost or market price on the valuation date thereof, which valuation date shall be not less frequently than annually.
g) The Municipality will not sell, lease, loan, mortgage or in any manner dispose of or encumber the System (subject) to the right of the Municipality to issue the Bonds and Parity Bonds as provided in this ordinance, to issue bonds subordinate to Outstanding Bonds, and to dispose of real or personal property which is no longer useful or necessary to the operation of the System ), and the Municipality will take no action in relation to the System which would unfavorably affect the security of the Outstanding Bonds or the prompt payment of the principal and interest thereon.
h) The registered owner of any Bond may proceed by civil action to compel performance of all duties required by law and this 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 therefrom.
i) The Municipality 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 Municipality for the purpose of making such recommendations. All moneys received for loss under such insurance policies shall be deposited in 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 making replacement of the property destroyed, and provision for making good such loss or damage shall be made within ninety (op) days from the date of the loss. The payment of premiums for all insurance policies required under the provisions of this covenant in connection with the System shall be considered an Operation and Maintenance Expense.
The proceeds derived from any and all 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.
j) The Municipality covenants not to provide any free service of the System, and, to the extent permitted by law, the Municipality will not grant a franchise or other rights for the operation of any competing sewerage system within the Municipality.
k) The Municipality will adopt a budget and approve appropriations for the System Fund prior to the beginning of each Fiscal Year, subject to all applicable state laws, providing for payment of all sums to be due in the Fiscal Year so as to comply with the terms of this ordinance. The budget may include in its estimate of income the use of available surplus moneys or other funds of the Municipality appropriated for the purpose. If during the Fiscal Year there are extraordinary receipts or payments of unusual cost, the Municipality will adopt an amended budget for the remainder of the Fiscal Year, providing for receipts or payments pursuant to this ordinance.
Section 14. Issuance of Parity Bonds. As long as there are any Outstanding Bonds, no obligations or bonds of any kind shall be issued which are payable from the revenues of the system except upon compliance with either option a), b), or c) as follows:
a) Parity Bonds may be issued for the purpose of paying the cost of repairs,
replacements, renewals, improvements and extensions to the System or for
refunding Outstanding Bonds upon compliance with the following conditions:
(i) The amounts required to be credited monthly to the respective accounts described in subsections a) to d), inclusive, of Section 12
of this ordinance must have been deposited and credited in full up
to the date of the delivery of such Parity Bonds.
(ii) The Net Revenues of the System for the last completed Fiscal
Year prior to the issuance of the Parity Bonds (as shown by the audit
Of an independent certified public account), or the adjusted Net
Revenues of the System for such year (as defined herein) must equal
At least 125% of Maximum Annual Debt Service computed
Immediately after the issuance of the proposed Parity Bonds, but only
For those Fiscal Years in which the Outstanding Bonds immediately
Prior to such issuance will continue to be Outstanding Bonds as
Provided herein.
(iii) Net Revenues of the System may be adjusted as follows:
A) In the event there shall have been an increase in the rates of
the System from the rates in effect for the preceding Fiscal Year,
which increase is in effect at the time of the issuance of any such
Parity Bonds, the Net Revenues as described hereinabove may be
Adjusted to reflect the Net Revenues of the System for the
Immediately preceding Fiscal Year as they would have been had
Such then existing rates been in effect during all of such Fiscal
Year.
B) Any such adjustment shall be evidenced by the certificate of
An independent consulting engineer or an independent certified public account employed for that purpose, which certificate shall
Be filed with and approved by the Corporate Authorities prior to
The sale of the proposed Parity Bonds.
b) Bonds or other obligations may be issued payable from the revenues of the System subordinate to the Outstanding Bonds. Such subordinate bonds shall be payable from the surplus funds described in subsection (e) of Section 12 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/or November 1.
Contracts or agreements, including long term and take or pay contracts or agreements, for sewerage services, which by the terms thereof require payment by the Municipality as an Operation and Maintenance Expense or from the Operation and Maintenance Account are expressly excluded from the provisions of this ordinance pertaining to Parity Bonds. Such contracts or agreements may be made by the Municipality notwithstanding any of the provisions herein, but only in such manner, if at all, such that the interest on the Bonds and Outstanding Bonds shall not lose the exclusion from gross income under Section 103 of the Code by reason thereof.
Section 15.
a) Accrued interest, if any, received upon the sale and delivery of the Bonds shall be credited to the Bond and Interest Account.
b) The Prior Bonds shall be paid and retired as set forth in the preambles hereto concerning FmHA’s Discount Loan Purchase Program, and any bonds or other obligations which are outstanding at the time any Bonds are issued, and which are on a parity with or superior to the Bonds, if any, either shall be defeased or shall be called, redeemed and retired according to the terms thereof, all in such manner and at such times that the interest earned on the Bonds does not lose its exclusion from gross income under Section 103 of the Code; and, as applicable, notice of such redemption shall be timely given or caused to be given or such defeasance timely effected, as the case may be.
c) Principal proceeds received upon the sale and delivery of the Bonds (except for any portion thereof determined necessary by the Corporate Authorities to be deposited into the Bond and Interest Account in accordance with Section 12(b) of this ordinance) shall be paid directly to FmHA according to its Discount Loan Purchase Program to prepay and retire the Prior Bonds.
Section 17. Provisions a Contract. The provisions of this ordinance shall constitute a contract between the Municipality and the registered owners of the Outstanding Bonds, and no changes, additions, or alterations of any kind shall be made hereto, except as herein provided, so long as there are any Outstanding Bonds. The registered owner of any bond may in any civil action, mandamus, injunction or other proceeding, enforce and compel performance of all duties required by this ordinance and the Act, including the maintaining and collecting of sufficient rates for that purpose and the application of income and revenue thereof.
Section 18. Non-Arbitrage. The principal proceeds of the sale of the Bonds shall be devoted to and used with due diligence to prepay and retire the Prior Bonds as herein provided according to FmHA’s Discount Loan Purchase Program. The Corporate Authorities represent and certify as follows:
a) The Municipality has provided for the prepayment and retirement of the Prior Bonds.
b) Design, planning and work of the Project has been completed.
c) No part of the System or the Project has been or is expected to be sold or otherwise disposed of in whole or in material part prior to the last maturity of the Bonds. “Material part” means (i) land, or (ii) any building, or (iii) personal property or fixtures in excess of that which is expected to be sold, traded in or discarded upon wearing out or becoming obsolete.
d) Except for the Bond and Interest Account and for the Bond Reserve Account established hereunder, the Municipality has not created or established and does not expect to create or establish any sinking fund or other similar fund for the Bonds.
e) Amounts deposited in the Bond and Interest Account will be expended within a 12-month period beginning on the date of deposit; such Account will be depleted to an amount not greater than 1/12 annual principal and interest requirements payable therefrom at least once yearly; and any amounts received from investment of money in the Bond and Interest Account will be expended within a one year period beginning on the date of receipt.
f) The Bond Reserve Account has been and is to be established and accumulated from funds other than Bond or Prior Bond proceeds. The total amount of the Bond Reserve Account to be accumulated is an amount not to exceed the Maximum Annual Debt Service and otherwise in compliance with Section 12 (c) of this ordinance.
g) The Depreciation Account has been and is to be established and accumulated from funds other than Bond or Prior Bond proceeds. Moneys in such Account are to be used to pay the cost of repairs or replacements to the System as may be necessary from time to time for the continued efficient operation of the System. Although amounts in such Account may be required to be used to pay principal and interest on the Bonds to prevent or remedy a default, such amounts are not expected to be used to pay principal and interest on the Bonds to prevent or remedy a default, and there is no assurance (due to the necessity of making reasonable repairs or replacements to the System, from time to time, as discussed above) that such amounts will be available to pay principal and interest on the Bonds even if all other sources of payment are exhausted.
h) The aggregate face amount of all tax-exempt bonds, other than private activity bonds, to be issued by the Municipality during the calendar year in which the Bonds are issued is not reasonably expected to exceed $5,000,000, within the meaning of Section 148(f) (4) (c) and 265(b) (3) of the Code.
i) The foregoing statements of expectation are based upon the following facts and estimates:
(i) Amounts expected to be received are estimated.
(ii) Amounts paid or to be paid into various funds and accounts have been
directed to be paid into such funds and accounts by authority of this
ordinance.
(iii) The anticipated dates of the obligation and expenditure of money
derived from the sale of Bonds and to be deposited into the various
funds and accounts above are based upon consultation with FmHA and
finance professionals, including the Underwriter.
(iv) The amount of tax-exempt bonds reasonably expected to be issued
is based upon historical experience and the anticipated revenue needs
of the Municipality, which has a population under the most recently
adjusted 1980 Federal Census of approximately 1553. The Prior Bonds
constitute the Municipality’s last debt issue.
j) The Municipality has not been notified of any disqualification of proposed disqualification of it by the Commissioner of the Internal Revenue Service as a bond issuer which may not certify bond issues under Treas. Reg. Section 1.103-13(a)(2)(ii) (1979). This Section 18 incorporates by reference the representations and certifications
made and contained in Section 22 of this ordinance.
k) To the best of the knowledge and belief of the Corporate Authorities, there are no facts, estimates or circumstances that would materially change the conclusions and representations set out in this section, and the expectations hereinabove set out are reasonable.
The Corporate Authorities also certify and further covenant with the purchasers and holders of the Bonds from time to time outstanding that so long as any of the Bonds remain outstanding, moneys on deposit in any fund or account in connection with the Bonds or the Prior Bonds, whether or not such moneys were derived from the proceeds of sale of the Bonds or the Prior Bonds or from any other source, will not be used in a manner which will cause the Bonds or the Prior Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code, and any related lawful regulations, including Treas. Reg. Sections 1.103-13, 1.103-14 and 1.103-15 (1979) as the same presently exist, ,or may from time to time hereafter be amended, supplemented, replaced or revised. The Corporate Authorities reserve the right, however, to make any investment