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Code of Ordinance › Chapter 70 — UTILITIES › Article III — SEWER SERVICE

The bonds referred to in this division, which are the bonds authorized to be issued by Ordinance No. 48, shall be sold and the proceeds applied in accordance with the provisions of Public Act No. 94 of 1933 (MCL 141.101 et seq., MSA 5.2731 et seq.), as amended. (Comp. Ords. 1987, § 25.065)

1. (a) The proceeds of the sale of the bonds authorized to be issued by Ordinance No. 48 shall be deposited in the Mayville State Bank, Mayville, 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 the accrued interest and premium, if any, received on sale and delivery of the bonds, as well as such amount as will be necessary to pay interest for the period for which interest is capitalized, and to the operation and maintenance fund the amount of such capitalized expenses. The balance of such proceeds shall be applied solely in payment of the cost of the public improvement described in Ordinance No. 48 and any engineering, legal and 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 shall file with the village council a signed statement to the effect that the 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.
2. (b) Any unexpended balance of the proceeds of sale remaining after completion of such public improvement shall be paid into the bond and interest redemption fund and shall be used for the redemption of callable bonds, or, prior to the first call date only, purchasing bonds on the open market at not more than the fair market value thereof and at a price in any event not exceeding the first call price. (Comp. Ords. 1987, § 25.066)

The village 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. (1) Maintenance of system; rates and charges. The village will maintain the system in good repair and working order and will operate the system 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 services rendered by the system and the segregation and application of the revenues of the system in the manner provided in this article and Ordinance No. 48.
2. (2) Financial records and reports; audits. The village council will cause to be maintained and kept proper books of record and account, separate from all other records and accounts of the village, in which shall be made full and correct entries of all transactions relating to the system. Not later than 60 days after the close of each operating year, the village council will cause to be prepared, on forms furnished by the municipal finance commission, if 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 fiscal year, and such other information as is necessary to enable any taxpayer of the village, any user of the service furnished, or any holder or owner of the bonds, or anyone acting in their interest, to be fully informed as to all matters pertaining to the financial operation of the system during each year. A certified copy of such statement shall be filed within 75 days after the close of each operating year with the municipal finance commission, and a copy sent to the manager of the account purchasing the bonds. Such statement and books of record and account shall at all reasonable times be open to inspection by any taxpayer of the village, user of the service, or holder of any bonds, or anyone acting in their behalf. The village council will also cause an annual audit of such books of record and account for the preceding operating year to be made each year by a recognized independent certified public accountant, and will mail a copy of such audit to the manager of the syndicate or account purchasing the bonds. Such audit shall be completed and so made available not later than three months after the close of each operating year and may, at the option of the village, be furnished to the municipal finance commission in lieu of the report mentioned in this subsection.
3. (3) Insurance. The village will maintain and carry, for the benefit of the holders of the bonds, insurance on all physical properties of the system, of the kinds and in the amounts normally carried by public utility companies and municipalities engaged in the operation of similar systems. All moneys received for losses under any such insurance policies shall be applied solely to the replacement and restoration of the property damaged or destroyed, and to the extent not so used shall be used for the purpose of calling bonds.
4. (4) Operation of system; transfer of control. The village will not sell, lease or dispose of the system, or any substantial part thereof, until all of the bonds have been paid in full, both as to principal and interest. The village 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 system in good repair and working order, and will not do or suffer to be done any act which would affect the system in such a way as to impair or affect unfavorably the security of the bonds. The village will not grant any franchise that will result in the operation of a competing system. (Comp. Ords. 1987, § 25.067)

1. (a) The right is reserved, in accordance with the provisions of Public Act No. 94 of 1933 (MCL 141.101 et seq., MSA 5.2731 et seq.), as amended, to issue additional bonds payable from the revenues of the system, which shall be of equal standing with the bonds authorized in Ordinance No. 48, but only for the following purposes:
   1. (1) To complete the public improvement in accordance with the plans and specifications therefor, and such bonds shall not be authorized unless the consulting engineers, or the successor engineers in charge of construction, shall execute a certificate evidencing the fact that additional funds are needed to complete the public improvement in accordance with the plans and specifications therefor. If such certificate shall be so executed and filed with the village clerk, it shall be the duty of the village council to provide for and issue additional revenue bonds in the amount stated in such certificate to be necessary to complete the public improvement in accordance with the plans and specifications.
   2. (2) For subsequent extensions and improvements to the system; provided that no such additional bonds shall be issued unless the net revenues for the last preceding completed operating year of the system, when supplemented by the net revenues estimated to accrue from an increase in rates imposed at or prior to the time of authorization of the additional bonds and/or when supplemented by the net revenues estimated to accrue from the extensions and improvements to be paid for in whole or in part from the proceeds of sale of additional bonds, shall be equal to at least 135 percent of the largest annual principal and interest requirements thereafter maturing on the bonds authorized by Ordinance No. 48, on any then previously issued bonds of equal standing with the bonds authorized by Ordinance No. 48, and on such additional bonds then being issued. For the purpose of determining net revenues under the requirements of this subsection, if the village shall raise the rates at or prior to the time of authorizing such additional bonds, then the net revenues of the system for the last preceding operating year shall be augmented to an amount reflecting the effect of such increase had the village's sewer billings during such year been at the increased rates. In addition, the net revenues for the last preceding operating year shall be increased by an amount to reflect the increase in net revenues estimated to accrue from the extensions and improvements. Prior to the issuance of any additional bonds pursuant to this subsection, there shall be filed with the village clerk a statement showing the net revenues for the last preceding completed operating year, the net additional or augmented revenues reflecting the application of the increased rates and from the additions and extensions to be acquired and constructed, if any, and the annual principal and interest requirements on all outstanding bonds payable from revenues of the system, and the bonds proposed to be issued. The statement shall be executed by a registered engineer appointed by the village. 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.
2. (b) Except as authorized in this section, no additional bonds having equal standing with the bonds authorized by Ordinance No. 48 shall be authorized or issued. (Comp. Ords. 1987, § 25.068) Secs. 70-265—70-280. - Reserved.

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