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HomeMy WebLinkAboutORDINANCES-1972-076-O-7276-0-72 AN ORDINANCE authorizing and providing for the issue of $2,000,000 Water Revenue Bonds (being $600,000 Series 1972 and $1,400,000-Series 1973) of the City of Evanston, Cook County, Illinois, for the purpose of defraying the cost of improv-. ing and extending the present waterworks system of said City, prescribing all the details of said bonds, and providing for the collection, segregation and distribu- tion of the revenue of the waterworks system of said City for the purpose of paying the cost of the operation and main- tenance thereof, providing an adequate depreciation fund therefor, and paying the principal and interest of said Water Revenue Bonds. WHEREAS, it is deemed advisable, necessary and for the best interest of the City of Evanston, Cook County, Illinois, that • its present municipally -owned waterworks system be improved and extended by the construction of the following: A. Facilities required to divert the daily flow of filter wash water and settling basin sludges associated with the water filtration process into the City sewer system and including a reinforced concrete retention basin, re- circulation pumps, decanting pipes, sludge pumps, and force main, together with all necessary pipes, valves, fittings, connections, meters and appurtenances to make the same an integral part of the existing waterworks system of said City, and the total estimated cost of constructing said improvements and extensions is the sum of $600,000; and B. Additional water intake facilities to meet anticipated future demands of the City for water, including the construction of extensions to the existing 48" diameter intake pipe, a new off shore intake and other necessary improvements and extensions to the existing waterworks system of said City, together with all necessary pipes, valves, fittings, connections, ancillary facilities and appurtenances, and the total estimated cost of construct- ing said improvements and extensions is the sum of $l'400,000, all in accordance with the preliminary report and estimate of cost prepared by Alvord, Burdick & Howson, consulting engineers employed by the City, and heretofore approved by the City Council and now on file in the office of the City Clerk for public inspection; and I". - s WHEREAS, the City does not have funds available for the purpose of constructing said improvements and extensions and it will be necessary for the City to borrow the aggregate principal sum of $2,000,000 and in evidence thereof issue its revenue bonds therefor; and WHEREAS, pursuant to the provisions of Division 129 of Article 11 of the Illinois Municipal Code, approved May 29, 1961, as amended, said City is authorized to issue water revenue bonds for the purpose of paying the cost of said improvements and extensions; and WHEREAS, the City Council has heretofore, pursuant to ordinance adopted on May 24, 1948, authorized and issued $2,890,000 • Water Revenue Bonds, dated June 1, 19483 of which bonds in the amount of $800,000 are presently outstanding, and pursuant to ordinance adopted on November 7, 1955, authorized and issued $1,4505000 Water Revenue Bonds, dated July 1, 1955, of which bonds in the amount of $710,000 are presently outstanding, and pursuant to ordinance adopted on April 13, 1964, authorized and issued $4,080,000 Water Revenue Bonds, dated May 1, 1964, of which bonds in the amount of $3,710,000 are presently outstanding, said outstanding bonds aggregating the principal amount of $5,220,000; and WHEREAS, pursuant to the provisions of the said ordinances adopted by the City Council of said City of Evanston on May 24, 1948, November 7, 1955 and April 13, 1964 authorizing the oustanding Water Revenue Bonds of said City, while said Water Revenue Bonds are out- standing no additional bonds shall be issued to share ratably and equally in the income derived from the operation of the Waterworks system of said City unless the revenues for the fiscal year then next preceding were sufficient to pay all costs of operation and maintenance, -2 - • Ir*G provide an adequate depreciation fund (and the interest reserve fund provided for in the ordinance adopted on April 13, 1964) and leave a balance equal to at least one hundred ten per cent (110%) of the aggregate of (a) the principal and interest requirements for such year on all bonds then outstanding, (b) one year's interest on the total issue of such additional bonds then proposed to be issued, and (c) an amount of principal of such additional bonds computed by divid- ing the total amount of such issue by the number of years from date of issue to the final maturity date of such additional bond issue; and WHEREAS this City Council has caused an audit of the earn- ings of the waterworks system to be made for the last preceding fiscal year and this City Council has heretofore determined and does hereby • determine that the earnings of the waterworks system for the last preceding fiscal year comply with the convenants and restrictions provided for in and by the ordinances authorizing the cutstanding water revenue bonds, and that the earnings for such last preceding fiscal year are sufficient to permit the issue of the $2,000,000 additional water revenue bonds herein provided for, to share ratably and equally in the income derived from the operation of the waterworks system with the outstanding Water Revenue Bonds of said City: NOW, THEREFORE, Be It Ordained, by the City Council of the City of Evanston, Cook County, Illinois, as follows: Section 1. That the City Council has caused an estimate to be made of the cost of making improvements and extensions to the water- works system of said City, as described in the preambles hereof, and all in accordance with preliminary report therefor heretofore approved • and now on file in the office of the City Clerk for public inspection, and has heretofore determined and does hereby determine and estimate that the total estimated cost of such improvements and extensions is the sum of $2,000,000. -3- 0 Section 2. That the City Council does hereby determine the period of usefulness of said waterworks system, including the improvements and extensions hereby proposed, to be forty (40) years from the date of the Water Revenue Bonds, Series 1973, herein author- ized to be issued. Section 3. That for the purpose of paying the cost of the construction of the necessary improvements and extensions to the water filtration facilities of the City of Evanston, as referred to and described hereinabove in A of the preamble of this ordinance, there be issued revenue bonds of said City in the principal amount of $600,000, each to be designated "Water Revenue Bond, Series 1972," which bonds shall be dated December 1, 1972, be of the denomination • of $5,000 each, be numbered from 1 to 120, inclusive, to bear inter- est at the rate of not to exceed seven per cent (7%) per annum, such interest payable July 1, 1973 and semi-annually thereafter on the first day of January and July in each year, and to mature serially $50,000 on January 1 of each of the years 1974 to 1985, inclusive. Section 4. That for the purpose of paying the cost of the construction of the necessary improvements and extensions to the existing waterworks system of the City of Evanston, including the additional water intake facilities, as referred to and described hereinabove in B of the preamble of this ordinance, there be issued revenue bonds of said City in the principal amount of $1,400,000, each to be designated "Water Revenue Bond, Series 1973", which bonds shall be dated as of the first day of the month of the sale of said Series 1973 Bonds, be of the denomination of $5,000 each, be numbered consecutively from 1 to 280, inclusive, to bear interest at the rate of not to exceed seven per cent (7%) per annum, such interest payable on January 1, 1974 and semi-annually thereafter on the first day of -4- January and July in each year, and to mature serially on January 1 of the years and in the amounts as follows (subject to the right of prior redemption hereinafter recited): Principal Amount Maturity $ 25,000 1976 30,000 197 0,000 1979 45,000 198o 50,000 1981 6o,000 82 983 1000 and 1984 1002000 1986 and 1987 125,000 1988 to 1993, inclusive provided, however, that of said bonds, bonds numbered 69 to 280, in- clusive, maturing on January 1 of each of the years 1984 to 1993, inclusive, shall be subject to redemption and payment prior to their maturity at the option of the City, in whole or in part, on any date on or after January 1, 1983, at par and accrued interest to date of redemption. If less than all of said bonds are called for redemption at any time, they shall be called in the inverse order of their ma- turity and by lot within a maturity if less than a whole maturity is redeemed. Notice of redemption shall be given by publication of such notice at least once in The Bond Buyer, published in the City of New York, New York, or in the event it ceases publication then in one financial newspaper published and of general circulation in the City of Chicago, Illinois, or in the City of New York, New York, at least thirty (30) days prior to the date fixed for redemption when the date of redemption coincides with an interest payment date. When said re- demption date is a date other than an interest payment date, an addi- tional notice shall be so published once not less than fifteen (15) nor more than thirty (30) days prior to the date of redemption. -5- • Such notice of redemption shall designate the date and place of redemption of said bonds, which shall be at the paying agent to be hereafter designated, shall designate the serial number and the aggregate principal amount of bonds to be redeemed, and shall indicate that on the designated date of redemption said bonds will be redeemed by payment of the principal thereof and accrued interest thereon, and that from and after the designated redemption date interest in respect of said bonds so called for redemption shall cease. Section 5. That both principal of and interest on said Water Revenue Bonds, Series 1972 and Series 1973, shall be payable • in lawful money of the United States of America at such bank or trust company as may hereafter be agreed upon between the purchaser of said bonds and the City Council. Said bonds shall be signed by the Mayor, sealed with the corporate seal of said City, and attested by the City Clerk, and the interest coupons attached to said bonds shall be executed by the facsimile signatures of said Mayor and said City Clerk, and said officials, by the execution of said bonds, shall adopt as and for their own proper signatures their respective facsimile signatures appearing on said coupons. Said bonds, together with interest thereon, shall be pay- able solely from the revenues derived from the waterworks system of said City, including all improvements and extensions thereto, and such bonds shall not in any event constitute an indebtedness of said City of Evanston within the meaning of any constitutional provision . or any constitutional or statutory limitations. Any of said bonds may be registered at the option of the holder as to principal only, at any time prior to maturity, in the M name of the holder, on the books of said City in the office of the City Treasurer, such registration to be noted on the reverse side of the bonds by the City Treasurer, and thereafter the principal of such registered bonds shall be payable only to the registered holder, his legal representative or assigns. Such registered bonds may be trans- ferable to another registered holder or back to bearer only upon presentation to the City Treasurer with a legal assignment duly acknowledged or approved. Registration of any of such bonds shall not affect the negotiability of the coupons thereto attached, but such coupons shall be transferable by delivery merely. Section 6. That said bonds and coupons attached thereto shall be in substantially the following form (with appropriate • changes and insertions as indicated): Number (Form of Bond) UNITED STATES OF AMERICA STATE OF ILLINOIS COUNTY OF COOK CITY OF EVANSTON WATER REVENUE BOND, SERIES 197_ $5,000 KNOW ALL MEN BY THESE PRESENTS, that the City of Evanston, Cook County, Illinois, for value received hereby promises to pay to bearer, or if this bond be registered as to principal, as hereinafter provided, then to the registered holder hereof, solely from the Water Revenue Fund of said City of Evanston, as hereinafter mentioned, and not otherwise, the sum of FIVE THOUSAND DOLLARS ($5,000) on January 1, 19r, together with interest on such principal sum from the date • hereof until paid at the rate of per cent ( %) per annum, payable , and semiannually thereafter on 1 and 1 in each year, upon presentation and-surrender'of the interest coupons hereto attached as they severally become due. -7- • Both principal of and interest on this bond are hereby made payable in lawful money of the United States of America at This bond and the series of which it forms a part is pay- able solely from revenues derived from the operation of the waterworks system of said City and not otherwise, and is (Insert only in Series 1972 bonds: "one of an authorized issue of Six Hundred Thousand Dollars ($600,000)") issued under authority of Division 129 of Article 11 of the Illinois Municipal Code, approved May 29, 1961, and all laws amendatory thereof and supplementary thereto, for the purpose of pay- ing the cost of constructing improvements and extensions to the water- works system of said City, and this bond does not constitute an in- debtedness of said City within any constitutional or statutory limit- ation. (The following paragraph is to be in- serted only in the Series 1973 bonds.) This bond is one of an authorized issue of One Million Four Hundred Thousand Dollars ($1,4-00,000), numbered from 1 to 280, inclu- sive, of the denomination of Five Thousand Dollars ($5,000) each, of like date and tenor except as to maturity, (rate of interest) and privilege of redemption, and of said bonds, bonds numbered 69 to 280, inclusive, maturing on January 1 of each of the years 1984 to 1993, inclusive, are redeemable prior to maturity at the option of the City, in whole or in part, on any date on or after January 1, 1983, • at par and accrued interest to date of redemption. If less than all of said bonds are called for redemption at any time, they shall be -8- called in the inverse order of their maturity and by lot within a maturity if less than a whole maturity is redeemed. Notice of the redemption of any or all or said bonds which by their terms shall have become subject to redemption shall be given by the City to the holder thereof by publication at least once in The Bond Buyer, published in the City of New York, New York, or in the event it ceases publication then in one financial newspaper published and of general circulation in the City of Chicago, Illinois, or in the City of New York, New York, at least thirty (30) days prior to -the date fixed for redemption when the date of redemption coincides with an interest payment date. When said redemption date is a date other than an interest payment date, an additional notice shall be so • published once not less than fifteen (15) nor more than thirty (30) days prior to the date of redemption. When any or all of said bonds which by their terms have become subject to redemption and payment prior to their maturity shall have been called for redemption, and payment made or provided for, interest thereon shall cease from and after the date so specified. Under said Code and the ordinance adopted pursuant thereto, authorizing the issuance of this bond and the series of which it forms a part, the revenues from the operation of the waterworks system of said City shall be deposited in a separate fund designated as the "Water Revenue Fund of the City of Evanston", which shall be used only and is hereby pledged for paying the cost of operation and ' maintenance of said system, providing an adequate depreciation fund • and paying the principal of and interest on the bonds of said City that are issued under the authority of said Code and are payable by their terms only from the revenues of said waterworks system, and in making all payments required to maintain the accounts created under the terms of the ordinance pursuant to which this bond is issued. 7 The rights and obligations of the City and of the holders of the bonds may from time to time be modified or amended by a supplemental ordinance adopted by the City Council with the written consent of the holders of not less than two-thirds (2/3rds) of the principal amount of all the bonds authorized by this ordinance and all bonds hereafter issued on a parity therewith then outstanding (excluding any of said bonds owned by or under the control of the City); provided, however, that no such modification or amendment may become effective until all outstanding V.ter Revenue Bonds of said City dated June 1, 1948, July 1, 1955 and May 1, 1964, have been paid in full, both as to principal and interest, or provision made for the payment thereof, and provided further, that no such modifica- tion or amendment shall extend or change the maturity of, or date of redemption prior to maturity, or reduce the interest rate on, or otherwise alter or impair the obligation of the City to pay the principal of and interest on the bonds herein authorized at the time, place and at the rate and in the currency provided therein of any bond herein authorized then outstanding, without the express consent of the holder of such bond, nor shall any such modification or amendment permit the creation of a preference or priority of any bond or bonds over any other bond or bonds, nor reduce the percentage of the holders of outstanding bonds required for the written consent to such modification or amendment. It is hereby certified and recited that all acts, condi- tions 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 said Water Revenue Fund the revenues received from the operation of said waterworks system to be applied in the manner as hereinabove set forth, and said City hereby covenants and agrees that -10- • it will fix and maintain rates for the use and service of said waterworks system, and collect and account for the revenues from said waterworks system, sufficient at all times to pay the cost of maintenance and operation of said system, provide an adequate depre- ciation fund, and to promptly pay principal of and interest on all bonds issued by said City which by their terms are payable solely from the revenues of said waterworks system, and to comply with all of the covenants of the ordinance under which this bond and the series of which it forms a part were issued. This bond may be registered as to principal only in the name of the holder on the books of said City in the office of the City Treasurer, such registration to be evidenced by notation of • said Treasurer on the back hereof, after which no transfer hereof shall be valid unless made on said books and similarly noted hereon, but it may be discharged from such registration by being transferred to bearer, after which it shall be transferable by delivery, but it may be again registered as before. The registration of this bond shall not restrict the negotiability of the coupons by delivery merely. IN WITNESS WHEREOF, the City of Evanston, Cook County, Illinois, by its City Council, has caused this bond to be signed by its Mayor, its corporate seal to be hereto affixed and attested by the City Clerk, and the coupons hereto attached to be signed by the facsimile signatures of said Mayor and said City Clerk, which officials, by the execution of this bond, do adopt as and for their own proper signatures their respective facsimile signatures appearing • on said coupons, and this bond to be dated as of the first day of (SEAL) Attest: City Clerk, City of Evanston, Cook County, Illinois Mayor, City of Evanston, Cook County, Illinois. -11- • • (Form of Coupon) Numb e r $ On the first day of 19_, *(unless the bond to which this coupon is attached has been called for payment prior to said date as therein provided for and payment made or provided for), the City of Evanston, Cook County, Illinois, will pay to bearer out of the Water Revenue Fund of said City Dollars ($ ) in lawful money of the United States of America, at in the , being interest then due on its Water Revenue Bond, Series 197 , dated , Number Mayor, City of Evanston, Cook County, Illinois Attest: City Clerk, City of Evanston, Cook County, Illinois. *(The clause within the parenthesis appearing in the form of interest coupon shall be inserted only in all coupons attached to Series 1973 bonds numbered 69 to 280, inclusive, representing interest maturing after the optional date of the bond to which it is attached.) (Form for Registration) Date of Registration In Whose Name Registered -12- City Treasurer .'GO Section 7. That upon the issuance of any of the Water Revenue Bonds, Series 1972 and Series 1973, herein provided for the entire municipal waterworks system of said City of Evanston, for the purpose of this ordinance, shall be operated on a fiscal yea basis commencing the first day of January and ending the last day of December of each succeeding year. From and after the delivery of any bonds issued under the provisions of this ordinance, all the gross revenues from any source whatsoever derived directly or in- directly from the use and operation of the waterworks system of said City, including all future improvements and extensions thereof, shall be set aside as collected and be deposited in a bank account separate and apart from all other City accounts and to be designated and 40 accounted for as a separate fund designated as the "Water Revenue Fund of the City of Evanston", which shall constitute a trust fund for the sole purpose of carrying out the covenants, terms and condi- tions of this ordinance, and of the ordinances adopted by the City Council authorizing the issuance of Water Revenue Bonds now outstand- ing and dated June 1, 1948, July 1, 1955 and May 1, 1964. Said ordinances authorizing the outstanding bonds did establish, continue and maintain a separate fund designated as the "Water Fund of the City of Evanston" into which sufficient revenues derived from the operation of the waterworks system were required to be deposited to be used only in paying the cost of operation and maintenance of said system, providing an adequate depreciation fund, and paying the principal of and interest upon all water revenue bonds of said City of Evanston which are payable by their terms only from such revenues, and for the creation of an interest reserve account. Section 8. The functions and obligations of the Water Fund of the City of Evanston, heretofore created and established, -13- shall be continued and maintained by the establishment in the Water Revenue Fund of separate special accounts designated severally "Operation and Maintenance Account", "Depreciation Account", "Bond and Interest Account" and "Bond Reserve Account". In addition, there are hereby created and established separate special accounts to be designated "Depreciation,Improvement and Extension Account" and "Surplus Revenue Account". Into said accounts there shall be set aside on the first business day of each month without any further official action or direction all moneys held in the Water Revenue Fund of said City, in accordance with the following priority: (a) Operation and Maintenance Account: There shall be credited to the Operation and Maintenance Account on the first business day of each month an amount sufficient to pay the reason- able expense of operation and maintenance of said waterworks system for the next succeeding month, including all of such expenses usual in such a system, and including one -twelfth of all such expenses computed on an annual basis. Money in this account shall be used to pay all costs reasonably incurred in connection with the continued operation, use and maintenance of the system, other than capital improvements, necessary to keep the system in efficient and economical operating condition, including the payment of premiums for insurance hereinafter required to be carried, and generally for all expenses (except depreciation) which under good accounting practice are properly chargeable to, and are reasonable and necessary to, the efficient maintenance and operation of the system. Money in this account shall not be used to pay the costs of extraordinary or unusual repairs and maintenance, capital expenditures, or to provide for any transfer in lieu of corporate taxes, or general supervision or administrative charges by the City. (b) Depreciation Account: The depreciation fund heretofore created shall con- tinue to be accumulated at an annual rate of $25,000 while any of the Water Revenue Bonds of said City dated June 1, 1948, July 1, 1955 and May 1, 1964 remain outstanding and unpaid. Said fund shall be used from time to time only for the purpose of meeting any emergency or expense in the replacement of any of said waterworks properties. -14- • At such time as all of the outstanding bonds dated June 1, 1948 and July 1, 1955 shall have been retired, said depreciation fund may be reduced to $300,000, and no further transfers into the deprecia- tion fund shall be required while the bonds dated May 1, 1964 are outstanding, except that any moneys used from the depreciation fund shall be restored from the first monies available for that purpose. At such time as all of the outstanding bonds dated May 1, 1964 shall have been retired, any amount remaining in said Depreciation Account shall be transferred to the Depreciation, Improvement and Extension Account as hereinafter created and established pursuant to paragraph (e) of this Section, and said Depreciation Account shall thereafter be discontinued. (c) Bond and Interest Account: All amounts required to be set aside for the purpose of paying principal and interest of the outstanding bonds dated June 1, 1948, July 1, 1955, and May 1, 1964, as provided in Section 6 of the respective ordinances authorizing the issuance of • said bonds, shall be set aside monthly as directed. In addition, beginning on the first day of the month following delivery of the bonds herein authorized, there next shall be credited to the Bond and Interest Account an amount at least equal to one -fifth of the interest becoming due on all outstanding bonds authorized and issued pursuant to this ordinance, and including the interest to become due on all bonds hereafter issued and on a parity with the bonds herein authorized, until there is on hand in said account the full amount of the interest payable on the next succeeding interest payment date, and beginning not later than January 1, 1973, there shall be credited to the Bond and Interest Account oh the first business day of each month an amount at,least equal to one -tenth of the principal of ali,outstanding bonds authorized herein, and in- cluding bonds hereafter issued and on a parity with the bonds herein authorized, until there is on hand in said account the full amount of the principal becoming due on the next succeeding principal maturity date. Credits to the Bond and Interest Account may be suspended in any fiscal year at such time as there shall be sufficient money in said account • to pay principal and interest due on the next payment date, but such credits shall again be resumed at the beginning of the new fiscal year. All moneys in said account shall be used only for -15- • <.; 3 the purpose of paying interest and principal on outstanding bonds, the bonds hereby authorized, and including such bonds as may be hereafter issued and on a parity with the bonds herein authorized. Any and all sums received from the purchaser of the bonds as accrued interest thereon to date of delivery shall be credited to said Bond and Interest Account. Funds to pay all of said principal and interest, together with the fees and expenses of the paying agent for said bonds, shall be remitted to the paying agent at least fifteen (15) days prior to the date of payment of said principal or interest; provided that all paying agency fees shall be paid from the Operation and Maintenance Account. (d) Bond Reserve Account: The interest reserve fund created and established by the ordinance authorizing the • issue of bonds dated May 1, 1964, shall continue to be accumulated at an annual rate of $30,000 per year until all of the bonds herein authorized have been paid or provision shall have been made for their payment, and shall be credited to the Bond Reserve Account. Moneys in said Bond Reserve Account shall be retained and used only for the payment of principal of or interest on all outstanding Water Revenue Bonds of said City dated June 1, 1948, July 1, 1955 and May 1, 1964, on all bonds authorized pursuant to this ordinance, and in- cluding such bonds as may be hereafter issued and on a parity with the bonds herein authorized, at any time when there are insufficient funds available in the Bond and Interest Account to pay such principal of or interest on such bonds as the same become due. Provided, however, that whenever the balance in said account is equal to the maximum principal and interest requirements on all of said outstanding bonds and parity bonds for any succeeding fiscal year, any surplus over and above said maximum amount, in the discretion of the City Council, may be transferred to any other account within the Water Revenue Fund of said City, or may be used for calling and redeem- ing bonds prior to their maturity, or for purchas- ing on the open market at not more than par and accrued interest any of the bonds which are payable from the revenues of the system. No bonds shall be purchased within the sixty (60) days immediately prior to the next succeeding redemption date of any bonds, and all such bonds purchased or redeemed shall be cancelled. -16- (e) Depreciation, Improvement and Extension Account: A new special account is hereby created to be designated "Depreciation, Improvement and Extension Account" to which there shall be credited, after distribution has been made to accounts (a) to (d), inclusive, the sum of .$835 each month, while any of the Water Revenue Bonds of said City dated June 1, 1948, July 1, 1955 and May 1, 1964 are outstanding. At such time as said outstanding bonds have been paid in full, both principal and interest, the amount remaining in the Depreciation Account shall be transferred to the Depreciation, Improvement and Extension Account as provided in paragraph (b) of this Section. Beginning on the first day of the month following the payment of said outstanding bonds, there shall next be credited to the Depreciation, Improvement and Extension Account on the first business day of each month the sum of $2,925 each month, or such greater amount as may be designated from time to time by the City Council. • The moneys in said account shall be used first to provide an adequate allowance for depreciation as shall be determined from time to time by the City Council, and may be used from time to time to pay for any extraordinary maintenance, repairs and necessary replacements, or if not so needed, for improvement or extension of the system. Said funds shall be used at any time to pay principal of or interest upon any outstanding bonds payable from the system whenever there are no other funds available to pay the same; provided, however, that from and after such time as said account aggregates the sum of $200,000, any sums in excess thereof may be transferred to any other account within the Water Revenue Fund of said City, at the discretion of the City Council. All proceeds received from the disposition of any property of the system shall be credited to this account, and may be used to pay the cost of improvements or extensions to the system remaining, or may be used for calling and redeeming bonds prior to their maturity, or for purchasing on the open market at not more than par and accrued interest any of the bonds which are payable from the revenues of the system. • (f) Surplus Revenue Account: A new special account is hereby created to be designated "Surplus Revenue Account" to which all revenues remaining in the Water Revenue Fund, after all credits have been made to the respective accounts herein provided for, shall at the end -17- • of each month be credited to the Surplus Revenue Account and the amount so credited shall be held and used for the following purposes: (1) For making up any deficiency necessary to credit accounts (a) to (e), inclusive, with the required amounts therefor for each month as hereinabove provided. (2) For paying principal of or interest on any junior lien bonds (subordinate issue). (3) For transfer to any other account of the fund, or at the discretion of the City Council for any lawful corporate purpose, including, but not limited to, any extra- ordinary costs of operation and maintenance of the system not otherwise provided for, or any authorized payments in lieu of taxes, general supervision and administrative charges by the City. (4) For any lawful corporate purpose, in the discretion of the City Council. • (g) Moneys remaining in any of the accounts above may by resolution of the City Council be invested from time to time in direct obligations of the United States Government, or investments fully guaranteed by the United States Government, matur- ing not later than the earliest date on which it is estimated the moneys in said accounts will be needed, but in no event later than five (5) years from the date of such investment. Such securities shall be sold from time to time without further authority of the City Council as moneys may be needed for the purpose for which said accounts have been created. All accrued interest on any moneys so invested shall first be credited to the.Water Revenue Fund of said City and then credited to the account for which the investment was made. EA -.,.,05; All uninvested money on hand shall be deposited in banks selected as depositories by the City Council from time to time so as to be available when needed. Such bank accounts shall be separate from all other City accounts, provided that all money in the Water Revenue Fund may be deposited in a single bank account, except money in accounts (c) and (d) thereof, which shall be deposited in one or more separate bank accounts. 9 We Section 9. That the City of Evanston covenants and agrees with the holders of 'said bonds and coupons hereby authorized that, so long as the bonds or any of them remain outstanding and unpaid, either as to principal or interest: (a) The City will maintain said waterworks system, and all improvements and extensions thereto, in good rrYair and working order, will operate the same efficiently and faithfully, and will punctually perform all duties with respect thereto required by the Constitution and laws of the State of Illinois. (b) The City will establish and maintain at all times reasonable fees, charges and rates for all users of the service of said system, and provide for the collection thereof and for the segrega- tion and application of the revenues of said system in the manner provided by this ordinance, and sufficient at all times to pay the reasonable costs of operation and maintenance, to pay the • interest of and principal on all revenue bonds of said City which by their terms are payable from the revenues of said system, and to provide for the creation and maintenance of the respective accounts as provided in Section 8 of this ordinance, and from time to time make all needful and proper repairs, replacements, additions and betterments thereto, so that the system may at all times be operated properly and advantageously, and when any equipment or facility shall have been worn out, destroyed or otherwise is insufficient for proper use, it shall be promptly replaced or repaired so that the value and efficiency of said system shall be at all times fully maintained. Charges for service rendered the City shall be made against said City, and payment for same from the corporate funds shall be made monthly into the Water Revenue Fund created by this ordinance, as revenues derived from the operation of the waterworks system, in the same manner as other revenues are required to be deposited. No free service of the system shall be furnished to any person, firm, organization, or corporation, public or private, and to the extent permitted by law it is expressly herein covenanted and agreed that said City will not grant a franchise for the • operation of any other or competing waterworks system within the City of Evanston, and that the -19- • • U 1.i,7 bonds herein authorized to be executed shall constitute legally enforceable liens on the revenues of the water- works system of said City, including all furtIer extensions, additions and improvements thereto, whether acquired through purchase, contract or otherwise. (c) The City will establish such rules and regula- tions for the control and operation of said system necessary for the efficient and economical operation thereof, and rates and charges shall be fixed and revised from time to time as may be necessary to produce funds sufficient for all purposes herein provided until all of the bonds authorized by this ordinance have been paid in full, both as to principal and interest. (d) The City will make and keep proper books and accounts (separate and apart from all other records and accounts of said City), in which complete entries shall be made of all transactions relating to said system, and hereby covenants that within ninety (90) days following the close of each fiscal year it will cause the books and accounts of said system to be audited annually by independent certified public accountants showing the receipts and disbursements on account of said system, and that said audit will be available for inspection by the holders of any of the bonds. Each such audit, in addition to whatever matters may be thought proper by the accountants to be included therein, shall, without limiting the generality of the foregoing, include the following: (1) A statement in detail of the income and expenditures of the system for such fiscal year, and including credits to the various accounts provided herein. (2) A balance sheet as of the end of such fiscal year. (3) The accountant's comment regarding the manner in which the City has carried out the account- ing requirements of this ordinance, and the accountant's recommendations for any changes or improvements in the operation of the system. (4) 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. -20- -1, ':, C 8 (5) The number of metered water customers and the number of unmetered water customers at the end of the year, and the quantity of water pumped. All expenses incurred in the making of the audit required by this section shall be regarded and paid as an operation and maintenance expense, and it is further covenanted and agreed that a copy of :ach such audit shall be furnished upon completion to the original purchaser of the bonds herein author- ized, and a summary thereof shall be furnished to any bondholder upon request. In addition, state- ments of revenues and expenditures of the system shall be furnished to the City Council at least quarterly during each fiscal year, and a copy of such statement shall be furnished to the original purchaser of the bonds herein authorized, and shall also be furnished to any bondholder upon request. (e) The City will not sell, lease, loan, mortgage, or in any manner dispose of or encumber said system (subject to the reserved right of said City to issue additional obligations as provided in Section 10 hereof), until all of the bonds herein authorized • shall be paid in full, both principal and interest, or unless and until provision shall have been made for the payment thereof; provided, however, that this covenant shall not prevent said City from dis- posing of any property which in the judgment of the City Council is no longer useful or profitable in the operation of said system; nor essential to the continued operation of said system. The proceeds from the sale of any property shall be credited to the Depreciation, Improvement and Extension Account hereinabove established in Section 8 of this ordinance. (f) The provisions of this ordinance shall consti- tute a contract between the City and the holders of the bonds authorized to be issued, and after the issuance of said bonds no changes, additions or alterations of any kind shall be made hereto, except as hereinafter provided in Section 11, until all of said bonds and the interest thereon shall have been paid in full, or unless and until provision shall have been made for the payment thereof. Any holder of a bond or bonds, or any of the coupons of any bond or bonds, issued hereunder, may proceed by civil action, mandamus. -or other • proceeding to enforce or compel performance by the officials of said City of all duties required by law and by this ordinance, including the making and collecting of sufficient charges and rates for the water services supplied by said system, and the application of the income and revenue there- from. -21- (g) The City will carry insurance on said system of the kinds and in the amounts which are usually carried by private parties operating similar prop- erties, including, without limiting the generality of the foregoing, fire, windstorm insurance, public liability, and all additional insurance covering such risks as shall be recommended by a competent consulting engineer employed for the purpose of making such recommendation, and all moneys received for loss under such insurance policies shall be deposited in the Depreciation, Improvement and Extension Account, and used in making good the loss or damage in respect of which they were paid, either by repairing the property damaged or replac- ing the property destroyed, and provision for making good such loss or damage shall be made within ninety (90) days from date of loss. The payment of premiums for all insurance policies required under the provisions of this covenant shall be considered an operation and maintenance expense. The proceeds derived from any and all policies for public liability shall be credited to the Opera- tion and Maintenance Account and used in paying the claims on account of which they were received. Section 10. It is hereby covenanted and agreed that, while any of the bonds issued hereunder are outstanding, the City will not issue any other bonds or obligations of any kind or nature having a pledge on the revenues of the system which is prior to the lien on such revenues of the bonds herein authorized. (a) It is further covenanted and agreed that while any of the Water Revenue Bonds dated June 1, 1948, July 1, 1955 and May 1, 1964 remain out- standing additional revenue bonds to share ratably and equally in the income derived from the opera- tion of said waterworks system shall not be issued unless the revenues derived from the waterworks system for the fiscal year then next preceding were sufficient to pay all costs of operation and maintenance, provide the depreciation fund and interest reserve fund herein provided for, and leave a balance equal to at least one hundred ten per cent (110%) of the aggregate of (i) the principal and interest requirements for such year on the bonds • then outstanding;(ii) one year's interest on the total issue of such additional bonds then proposed to be issued; and (iii) an amount of principal of such additional bonds computed by dividing the total amount of such issue by the number of years to the final maturity date of such additional bond issue. -22 - 0 (b) The City reserves the right to issue at such time as all of said outstanding bonds have been paid in full, and from time to time, as shall be found necessary and for the best interest of said City, additional bonds on a parity with the bonds authorized hereunder for the purpose of constructing or acquir- ing improvements, replacements and extensions of the system, or for the purpose of refunding any of the Water Revenue Bonds of the City, or for any, combination of such purposes, but only provided the City shall have complied with the following requirements: (1) The amounts required to have been credited to the respective accounts (a) to (e), in- clusive, of Section 8 of this ordinance, up to the date of authorization of said addi- tional bonds shall have been credited to said respective accounts; and (2) The net revenues of the system for the fiscal year then next preceding, or the adjusted net revenues of the system for the next preceding fiscal year, if such revenues are adjusted as herein provided, • have been equal to not less than one hundred thirty per cent (130%) of the maximum combined principal and interest requirements for any succeeding fiscal year during the life of the then outstand- ing bonds, of - (i) all bonds then outstanding payable from the revenues to be derived from the operation of the system, and (ii) on the additional revenue bonds then proposed to be issued. Net revenues for the purpose of this sub- paragraph (2) shall mean the gross revenues of the system less the actual costs of opera- tion and maintenance before making provision for depreciation or other accounts as required by this ordinance for such fiscal year or years, and shall be evidenced by an audit of an independent certified public accountant. Principal and interest requirements shall include principal and interest due January 1 as a requirement of the fiscal year ending December 31 immediately preceding such January maturities. • In the event there shall have been a change in the rates of the system from the rates in effect for the immediately preceding fiscal -23- • f'M year, which change is in effect at the time of the issuance of any such additional bonds, then the net revenues as provided in this subparagraph (2) shall be adjusted to reflect the net revenues of the system for the immediately preceding fiscal year as they would have been had said then existing rates been in effect during all of said year. Any such adjusted net revenues shall be evidenced by the certifi- cate of a certified public accountant or an independent consulting engineer employed for that purpose, which certificate shall be approved by the City Council prior to issuance of the additional bonds and filed with the City Clerk upon its approval. (c) Notwithstanding the foregoing provisions, the City reserves the further right to issue bonds to refund any of these bonds,or bonds on a parity there- with, provided they are issued to refund bonds due within three (3) months of the date of refunding and for the payment of which no other funds are or will be available at the maturity thereof. (d) Any additional bonds issued as parity bonds • shall be on an equal basis in all respects with the bonds herein authorized, shall share ratably and equally in the revenues of said system, and shall mature as to principal on January 1 and as to interest on January 1 and July 1. Section 11. That at such time as all of the Water Revenue Bonds of said City dated June 1, 1948, July 1, 1955 and May 1, 1964 have been paid in full, both as to principal and interest, or provision made for the payment thereof, the rights and obligations of the City and of the holders of the bonds may from time to time be modified or amended by a supplemental ordinance adopted by the City Council with the written consent of the holders of not less than two-thirds (2/3rds) of the princi- pal amount of all of the bonds authorized by this ordinance, and all bonds hereafter issued on a parity therewith, then outstanding (excluding any of said bonds owned by or under the control of the • City); provided, however, that no such modification or amendment -24- • shall extend or change the maturityof or date of redemption p prior to maturity, or reduce the interest rate on, or otherwise alter or impair the obligation of the City to pay the principal of and interest on the bonds herein authorized, at the time, place, rate, and in the currency provided therein, of any bond herein authorized then outstanding, without the express consent of the holder of such bond, nor shall any such modification or amendment permit the creation of a preference or priority of any bond or bonds over any other bond or bonds, nor reduce the percentage of the holders of outstanding bonds required for the written consent of such modification or amendment. Each such consent must be accompanied by proof of ownership of the bonds for which consent is given, which proof must be in a form • approved by the City Council, and each such consent and proof of ownership must be on file with the City Clerk prior to the adoption of such modifying or amendatory ordinance. Section 12. That as soon as may be after this ordinance becomes effective, the bonds herein authorized shall be sold as a whole or in part, and from time to time, by the City Council in such manner as they may hereafter determine; provided, however, that if the acceptable bidder offers to purchase said bonds bearing interest at a lesser rate than the maximum interest rate hereinabove prescribed in this ordinance, then the City Council shall, upon making the award of sale of said bonds to such bidder, adopt a resolution reducing the interest rates on such bonds in accordance with the terms of the acceptable bid, and such rate or rates being less than the rate hereinabove • prescribed in this ordinance, and such bonds shall thereafter be -25- • a (r, prepared bearing interest at such reduced interest rates in ac- cordance with the resolution confirming sale thereof, and after the execution of said bonds in the manner as herein provided, the same shall then be delivered to the Treasurer of the City and be by him delivered to the purchaser thereof upon receipt of the pur- chase price therefor. The resolution to be adopted, and awarding the contract for the sale of said bonds to the purchaser thereof, shall also designate the bank or trust company at which the bonds and interest coupons will be payable. Section 13. The proceeds of sale of the bonds author- ized hereby, exclusive of accrued interest, shall be placed in a bank or banks designated as depositories by the City Council in a separate account to be designated the "Construction Fund Account of the City of Evanston". The accrued interest shall be credited to the Bond and Interest Account herein established. The funds in said Construction Fund Account shall be held for the benefit of said City for the purposes herein provided, and for the benefit of the holder or holders of the bonds hereby authorized as their interest may appear, and said funds shall be withdrawn from the Depository from time to time by the Treasurer of the City only upon submission to him of the followings (a) An order signed by the Mayor and Clerk, or such other officers that may from time to time be by law authorized to sign and countersign orders on the Treasurer of the City, stating specifically the purpose for which the order is issued and indicating that the payment for which the order is issued has been approved by the City Council; and (b) Each order for withdrawal of funds by the Treasurer for payment to a contractor or contractors • for work done in connection with the construction of -26- • said project shall also be accompanied by a certificate executed by the engineer in charge of the construction of such improvements and extensions, stating the nature of the work completed and the amount due and payable thereon. The moneys deposited in the Construction Fund Account may be temporarily invested from time to time in direct or fully guaranteed obligations of the United States Government having a maturity of not less than fifteen (15) days prior to the date when such funds will be needed, and in any event not later than eighteen (18) months from the date of investment. Within sixty (60) days after completion of the work in accordance with plans and specifications therefor, as approved by the City Council, and after all costs have been paid in connection with the construction thereof, the engineers • shall certify to the City Council the fact that the work has been completed according to said plans and specifications, and upon approval of the completion of the work based upon the engineer's certificate by the City Council, and after all costs have been paid, the Mayor, City Clerk and Engineer shall execute a certificate and file it with the Depository certifying that the work has been completed in accordance with the plans and specifi- cations, that all costs have been paid, and if at that time any funds remain in said Construction Fund Account the same shall be transmitted by said Depository to the Treasurer of said City and said Treasurer shall credit said funds to the Depreciation, Improvement and Extension Account. The cost of engineering, legal and financing services, • the cost of surveys, designs, soundings, borings, rigsts of way, -27- • and all other necessaryand incidental expenses, shall be P deemed items of cost of construction of the project. Section 14. The proceeds of sale of the bonds will be used and devoted with due diligence for the purposes as provided herein, and the City of Evanston hereby covenants and agrees that, so long as any of the bonds hereby authorized remain out- standing, and notwithstanding any provisions in this bond ordinance to the contrary with respect to investment of moneys on deposit in the various special funds or accounts herein mentioned, whether such moneys were derived from bond proceeds, from revenues of the system, or from any other source, it will make no use of such moneys which, if such use could have been reasonably expected on the date of issue of said bonds would • have caused such bonds to be classified as "arbitrage bonds" within the meaning of Section 103(d) of the Internal Revenue Code of 1954, as amended, and regulations promulgated or pro- posed thereunder, and in connection with any such investments, it will comply with the requirements of said Section 103(d) and Sections 1.103-13 and 1.103-14 of the Income Tax Regulations [26CFR Part 1] as the same presently exist or may hereafter from time to time be amended and supplemented. Section 15. If any section, paragraph, clause or provision of this ordinance shall be held invalid, the in- validity of such section, paragraph, clause or provision shall not affect any of the other provisions of this ordinance. Section 16. All ordinances, resolutions or orders, or parts thereof, in conflict with the provisions of this ordinance • are, to the extent of such conflict, hereby repealed. Section 17. This ordinance within ten (10) days after its passage by the City Council shall be published once in the ME 1 „ M a • EVANSTON REVIEW , being a newspaper published in and having a general circulation in the City of Evanston, Illinois, and if no petition is filed with the City Clerk of said City within twenty-one (21) days after the date of the publication of this ordinance, signed by electors numbering not less than twenty per cent (20%) of the number of electors voting for the Mayor at the last preceding general municipal election, asking that the question of construct- ing the proposed improvements and extensions and the issuance of the Water Revenue Bonds as herein provided for be submitted to the electors of the City, then this ordinance shall be in full force and effect. PASSED: November 6, 1972 , 1972. • FRANK K. HOOVER, JAMES F. PITTSFORD, ARNOLD F. WINFIELD, AYES: THOMAS H.-BRINKMANN, JOAN W. CONNOR, JAMES B. MORAN, WILLIAM t. HAKPtK, JK., KUUStVLLI ALtXANULK, EDNA W. SUMMERS, CRAIG J. CAIN, JOHN 0. WYANDT, PETER D. JANS, JAMES G. STAPLES, MICHAEL E. SCHILTZ, JOHN K. KNEAFSEY, JAMES P. MC COURT, MAXINE LANGE NAYS: None ABSENT: QUA I FE M. WARD /s/ EDGAR VANNE WN, JR. Mayor Attest: /s/ MAURICE F. BROWN City Clerk • RWS:sm -29- 10/26/72 STATE OF ILLINOIS ) SS COUNTY OF COOK ) I, the undersigned, do hereby certify that I am the duly qualified and acting Clerk of the City of Evanston, in the County and State aforesaid, and as such Clerk I am the keeper of the official journal, records and files of the City Council of said City. I do further certify that the attached and foregoing is a full, true and correct copy of an ordinance entitled: "AN ORDINANCE authorizing and providing for the issue of $2,000,000 Water Revenue Bonds (being $600,000 Series 1972 and $1,400,000 Series 1973) of the City of Evanston, Cook County, Illinois, for the purpose of defraying the cost of improv- ing and extending the present waterworks system of said City, prescribing all the details of said bonds, and providing for the collection, segregation and distribu- tion of the revenue of the waterworks system of said City for the purpose of paying the cost of the operation and • maintenance thereof, providing an adequate depreciation fund therefor, and paying the p rinciRal and interest of said Water Revenue Bonds . ' as adopted by the City Council of the City of Evanston at its legally convened meeting held on November 6 , 1972, and as approved by the Mayor on the 6th day of November , 1972, all as appears from the official records of said City, in my care and custody. IN WITNESS WHEREOF, I have hereunto affixed my official signature and toe corporate seal of said the City of Evanston, Illinois, this Oth day of November 1972. City Clerk . (CITY SEAL) Evanston 11/9/72 mwgm I 2 .I..