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PAGE 18 - PLA1NDEALER - WEDNESDAY, AUGUST 13,1975 Legal Notice lS^e,,,pUo" "creinaf,er AN ORDINANCE A N O R D I N A N C E authorizing and providing for the issue of $193,000 Water­ works and Sewerage Revenue Bonds of the City of McHenry, Illinois, Series 1975, for the Fiurpose of defraying the cost of urnishing, installing and testing of one 500 gallon per minute deep well turbine pump (vertical line-shaft, water lubricated) and also con­ structing a water treatment plant consisting of a masonry building containing chlorination and chemical feed equipment, piping and elec­ trical work, at Well No. 5, in and for said City prescribing all the details of said bonds, and providing for the collection, segregation and distribution of the revenues 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 principal and in­ terest of said Waterworks and Sewerage Revenue Bonds. WHEREAS the City of McHenry, McHenry County, Illinois, now owns and operates a combined waterworks and sewerage system and has good and merchantible title to all property, real, personal and mixed, comprising said waterworks and sewerage system, including the real property at the site of Well No. 5 in the City; and WHEREAS the City of McHenry proposes to improve said waterworks system by furnishing, installing, con­ structing and testing one 500 gallon per minute deep well turbine pump (vertical lineshaft, water lubricated) and to construct a water treatment plant consisting of a masonry building containing chlorination feed equipment, piping and electrical wiring, controls and connections ap­ purtenant thereto and necessary thereof, at Well No. 5 in the City (said improvement of the waterworks system hereinafter sometimes referred to as the "im­ provement"); and WHEREAS the governing body of the City has heretofore approved all plans, files and specifications for the con­ struction of the aforesaid improvement; and WHEREAS, the total estimated project cost of said improvement, including all engineering costs, legal and administration fees, expenses and contingencies as prepared by the engineers, employed for that purpose, is the sum of £141 OOO WHEREAS, the City of McHenry does not have suf­ ficient funds available for said purpose and, in order to raise the funds required, it will be- necessary for the City to borrow the sum of $193,000 and in evidence thereof issue its Waterworks and Sewerage Revenue Bonds in said amount for the purpose of paying the cost of constructing said well and waterworks treatment plant at Well No. 5 in ac­ cordance with the provisions of Division 139 of Article 11 of the Illinois Municipal Code, as amended: NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF McHENRY, McHENRY COUNTY, ILLINOIS, AS FOLLOWS: Section 1. Project That it is considered for the oest interests of the City of McHenry, McHenry County, Illinois, that it furnish, install, construct and test a well pump and a water treatment plant at Well No. 5 in and for said City, all described in the preambles of this ordinance, and all in accordance with the preliminary plans and specifications therefor heretofore approved by the Mayor and City Council of said City and now on file in the office of the City Clerk for public inspection. Section 2. Estimate of Cost That the Mayor and City Council do hereby estimate that the cost of furnishing, in­ stalling, constructing and testing the aforesaid well pump and water treatment plant at Well No. 5 as set out in the preambles of this ordinance, is the sum of $193,000. Section 3. Funds Required That the City does not have sufficient funds on hand available to pay the cost of furnishing^installing, con­ structing and testing said well pump and water treatment plant, and that it will require the issuance by the City of Waterworks and Sewerage Revenue Bonds Series of 1975 in the principal amount of $193,000. ' Section 4. Period of Usefulness That the Mayor and City Council do hereby determine the period of usefulness of the aforesaid well pump and water treatment plant to be twenty five (25) years from the date of the bonds herein authorized to be issued. Section 5. Bonds That for the purpose of defraying the cost of the aforesaid well pump and water treatment plant project, there be issued revenue bonds of City of McHenry in the principal amount of $193,000, each to be designated "Waterworks and Sewerage Revenue Bonds," said bonds to be dated November 1,1975, One Hundred Ninety-Three bonds to be of the denomination of $1,000 each, be numbered consecutively from 1 to 193 inclusive, bear interest at the rate of not to exceed seven per cent (7 percent) per an­ num, payable April 1, 1976 and semi-annually thereafter on the fifteenth day of November and April in each year until paid, said bonds to mature serially on Nnvpmhpr 1 pf each of the years and in the amounts as follows (subject to the right of Principal Amount Maturity $ 5,000 1976 to 1987 inclusive $25,000 1988 to 1992 inclusive $ 8,000 1993 provided, however, that said bonds shall be subject to redemption and payment prior to their maturity at the optibrt of the City, in whole or in part, from time to time, from any funds that may be made available for such purpose on any date on or after November 1, 1980, at par and accrued interest to the date of redemp- * tion. If less than all of said bonds are called for redemp­ tion at any time, they shall be called in the inverse order -of their maturity and by lot within a maturity if less than a whole maturity is redeemed. Written notice of its option to redeem any or all of said bonds shall be given by the City to the holder of each such bond called for redemption, if known, by registered mail at least thirty (30) days prior to the date of redemption, or if the holders of any such bonds are unknown, then notice of redemption shall be given by publication of such notice at least once r)ot less than thirty (30) days prior to the date of redemption in one financial newspaper published and of general circulation in the City of Chicago, Illinois. 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 the bonds to be redeemed, and shall indicate that on the designated date of redemption said Donds will be redeemed by payment of the prinojpal thereof and accrued interest thereon, and that from and after the designated redemp­ tion date interest in respect of said bonds so called for redemption shall cease. Section 6. Paying Agent - Execution of Bonds - Security That both principal of and interest on said Waterworks and Sewerage Revenue Bonds shall_ be payable in lawful money of the United States America at such bank or trust company as may hereafter be agreed upon between the Kurchaser of said bonds and the layor and City Council of the City. Said bonds shall be signed by the Mayor, sealed with the corporate seal of the 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 payable solely from the revenues derived from the waterworks and sewerage system of the City, including all improvements and extensions thereto, and such bonds shall not in any event constitute an indebtedness of said City within the meaning of any con­ stitutional provision or any constitutional or statutory limitation. 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 name of the holder, on the books of the 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 representatives of- assigns. Such registered bonds may be transferable 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 7. Bond Form That said bonds and coupons attached thereto shall be in substantially the following form: (Form of Bond) UNITED STATES OF AMERICA STATE OF ILLINOIS COUNTY OF McHENRY CITY OF McHENRY WATERWORKS REVENUE BOND Number- $1,000 KNOW ALL MEN BY THESE PRESENTS, that the City of McHenry, McHenry 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 Waterworks and Sewerage Fund of said City of McHenry, as hereinafter mentioned and not otherwise, the sum of One Thousand Dollars ($1,000) on November 1, 19 , together with interest on such principal sum from the date hereof until paid at the rate of --* per cent ( percent) per annum, payable April 1. 1976 and semi-annually thereafter on November 1 and April 1 in each year, upon presentation and surrender of the interest coupons hereto attached as they severally become due. Both principal of and interest on this bond are hereby made payable in lawful money of the united States of America at the McHenry State Bank, McHenry, Illinois. This bond and the series of which it forms a part is payable solely from revenues derived from the combined waterworks and sewerage system of said City and not otherwise, and is issued under authority of Division 139 of Article 11 of the Illinois Municipal Code, ap­ proved May 29, 1961, and all laws amendatory thereof and supplementary thereto, for the purpose of paying the cost of furnishing, installing and testing one 500 gallon per minute deep well turbine pump (vertical lineshaft, water lubricated) and also con­ structing a water treatment plant at Well No. 5 in and for said City, and this bond does not constitute an indebtedness of said City within any con­ stitutional or statutory limitation. This bond is one of an authorized issue of One Hun­ dred Ninety Three Thousand Dollars ($193,000), numbered from 1 to 193 inclusive, of the denomination of One Thousand Dollars ($1,000) each, of like date and tenor except as to maturity, rate of interest and privilege of redemption, and said bonds are redeemable prior to maturity at the option of the City, in whole or in part, from time to time, from any funds that may be made available for such purpose on any date on or after November 1, 1980, at par and accrued interest to date of redemption at any time, they shall be 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 of said bonds which by their terms shall have become subject to redemption shall be given by the City to the holder thereof, if known, by registered mail at least thirty (30) days prior to the date of redemption, or if the holder thereof be unknown, such notice shall be published at least one not less than thirty (30) days prior to the date of redemption in one financial newspaper published and of general circulation in the City of Chicago, Illinois. 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. 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 tran­ sferred 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 McHenry, McHenry County, Illinois, by its Mayor and 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 fo$, their own proper signatures their respective facsimile signatures appearing on said coupons, and this bond to be dated as of the first day of November, 1975. S-Joseph B. Stanek Mayor, City of McHenry, McHenry County, Illinois (SEAL) Attest: S-Terry Wilde City Clerk, City of McHenry, McHenry County, Illinois (Form of Coupon) Number On the first day of 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 system of said City shall be deposited in a separate fund designated as the "Waterworks and Sewerage Fund of the City of McHenry," which shall be used only and is hereby pledged for paying the cost of operation and main­ tenance of said system, providing an adequate depreciation fund and paying the principal of an interest on the bonds of the City that are issued under the authority of said Code and are payable by their terms only from the revenues of said 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. 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 adopte<roy the Mayor and City Council with the written con­ sent of the holders of not less than two-thirds (2/3) of the Erincipal amount of all the onds authorized by this or­ dinance 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 amend­ ment 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, con­ ditions 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 Waterworks and Sewerage Fund the revenues received from the operation of said system to be applied in the manner as hereinabove set forth, and the City hereby covenants and agrees that it will fix and maintain rates for the use and service of said system, and collect and account for the revenues from said system, sufficient at all times to pay the cost of maintenance and operation of said system, provide an adequate depreciation fund, and to promptly pay principal of an interest on all bonds issued by said City which by their terms are payable solely from the revenues of said 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. _ --, 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 McHenry, McHenry County, Illinois, will pay to bearer out of the Waterworks and Sewerage Fund of said City Dollars ($- ) in lawful money of the United States of America, at , in the _i , being interest then due on its Waterworks and Sewerage Revenue Bond, dated October 1,1975, Number . (Facsimile Signature) Mayor, City of McHenry, McHenry County, Illinois Attest:' (Facsimile Signature) City Clerk, City of McHenry, McHenry County, Illinois Date of Registration (Form for Registration) In Whose Name Registered Signature of City Treasurer Section 8. Fiscal Year That upon the issuance of any of the Waterworks ana Sewerage Revenue Bonds herein provided for, the entire combined municipal water­ works and sewerage system (sometimes hereinafter referred to as the "system") of the City of McHenry, for the Eurpose of this ordinance, shall e operated on a fiscal year basis commencing the first day of May and ending the last day of April of each succeeding year. From and after the delivery of any bonds issued under the provisions of this ordinance, all the revenues from any source whatsoever derived from the operation of the system of the City of McHenry, including all future improvements and extensions thereof, shall be set aside as collected and be deposited in a separate fund which is hereby created to be designated as the "Waterworks and Sewerage Fund of the City of McHenry," 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 the reasonable cost of operation and main­ tenance of said combined waterworks and sewerage system, providing an adequate depreciation fund, and paying the principal of and interest upon all revenue bonds of said City which by their terms are payable solely from the revenues derived from the combined waterworks and sewerage system of said City, and for the creation and ex­ penditure of the respective accounts hereinafter provided for. Section 9. Accounts That there be and there are hereby created and established separate special accounts to be designated severally "Operation and Maintenance Account," "Depreciation Account," "Bond and Interest Account," "Bond Reserve Account" and "Surplus Revenue Account," into wnich 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 Waterworks and Sewerage Fund of the City of 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 reasonable expense of operation and maintenance of said combined waterworks and sewerage system for the next succeeding month, including, without limiting the generality of the foregoing, salaries, wages, costs of materials, supplies, insurance and power, and in­ cluding one-twelfth of all such expenses computed on an annual basis. (b) Depreciation Account There shall be credited to the Depreciation Account on the first business day of each month the sum of $200.00 each month, or such greater amount as may be designated from time to time by the Mayor and 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 Mayor and City Council, and may be used from time to time to pay for any ex­ traordinary maintenance, repairs and necessary replacements. 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 $5,200.00, any sums in excess thereof may be transferred to the Bond Reserve Account or to the Surplus Revenue Account at the discretion of the Mayor and City Council. The moneys in said Depreciation Account may be invested and reinvested in bonds or other obligations of the United States Government maturing within five (5) years from the date of purchase as may be authorized from time to time by resolution of the Mayor and City Council of said City. (c) Bond and Interest Account Beginning on the first day of the month following delivery of the bonds herein authorized, there shall be deposited in the Bond and Interest Account the entire balance of the revenues until the amount of interest due up to April 1, 1976, has been deposited in said account, and from and after April 1, 1976, on the first business day of each month, there shall be deposited in the Bond and Interest Ac­ count an amount at least equal to one-sixth (1/6) of the interest becoming due on all out­ standing bonds authorized 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 on the first day of the month following delivery of the bonds herein authorized, there shall be deposited in the Bond and Interest Account on the first business day of each month an amount at least equal to one- twelfth (l/12)of the principal of all of said bonds authorized herein and including 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. Payments into the Bond and Interest Account may be suspended in any fiscal year at such time as there shall be sufficient money in said ac­ count to pay principal and interest aue on the next payment date, but such payments shall again be resumed at the beginning of the new fiscal year. All moneys in said account shall be used only for the purpose of paying in­ terest and principal, on water and sewer revenue bonds heretofore issued, on the bonds hereby authorized, and in­ cluding 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 paid into said Bond and Interest Account, and in ad­ dition thereto, from the proceeds derived from the sale of said bonds, there shall be paid into said account an amount sufficient to pay in­ terest on said bonds herein authorized during the time estimated to be necessary to complete the construction of the combined waterworks and sewerage system. Funds to pay all of said principal and interest, together with tne fees and expenses of the paying agent for said bonds, shall be remitted to said paying agent at least fifteen (15) days prior to the date of said prin­ cipal or interest; provided that all fiscal agency fees shall be paid from the Operation and Maintenance Account. (d) Bond Reserve Account Beginning on the first day of the month following delivery of the bonds herein authorized, there shall be deposited in the Bond Reserve Account on the first business day of each month, the sum of $100.00 each month until all of the bonds herein authorized have been paid or provision made for their payment. Moneys in said Bond Reserve Account shall be retained and used only for the payment of principal of or interest on all bonds of the City authorized pursuant to this ordinance and including 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 In­ terest Account to pay such principal of or interest on such bonds as the same become due. provided, however, that whenever the balance is said account is equal to the maximum principal and in­ terest requirements on all of said outstanding bonds and parity bonds for any suc­ ceeding fiscal year, any surplus over and above said maximum * amount, in the discretion of the Mayor and City Council, may be transferred to the Surplus Revenue Account, 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. 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 Eurchased or redeemed shall e cancelled. (e) In the event that in any month there are insufficient moneys in the Waterworks and Sewerage Fund to make the required monthly credits to any of the foregoing accounts (a), (b), (c) or (d), then the amount of such deficiency shall be added to the requirements for the succeeding month and made up in the priority in which said funds are herein listed. (f) Surplus Revenue Account All revenues remaining in the Waterworks and Sewerage Fund, after all credits and payments have been made to the respective 'accounts herein provided for, shall at the end of each fiscal year 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 (d), inclusive, with the required amounts therefor for each fiscal year as hereinabove provided. (2) For paying principal of or interest on any junior lien bonds (subordinate issue). (3) For paying the cost of constructing improvements and extensions to the combined waterworks and sewerage system. (4) For the prior redemp­ tion of the bonds herein authorized prior to their maturity in accordance with all the terms, provisions and conditions to accomplish such prior redemption, and any bonds so redeemed shall be cancelled. (5) For any lawful purpose. (g) Moneys remaining in any of the accounts hereinabove created may by resolution of the Mayor and City Council be invested from time to time in direct obligations of the United States Government, maturing not later than the earliest date on which it is estimate'd 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 Mayor and 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 Waterworks and Sewerage Fund of the City and then credited to the account for which the investment was made. All uninvested money on hand shall be deposited in banks selected as depositaries by the Mayor and City Council from time to time so as to be available when needed. Such band accounts shall be separate from all other City accounts. Section 10. Covenants That the City of McHenry 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 prin­ cipal or interest: (a) The City will maintain said system, and all im­ provements and extensions thereto, in good repair and working order, will operate the same efficiently and faithfully, and will punctually perform all duties with respect thereto required by the Constitution ana laws of the Sate 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 segregation and application of the revenues of said system in the manner provided by this ordinance, ana sufficient at all times to pay the ^reasonable costs of operation and main­ tenance, 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 9 of this ordinance, and from time to time make all needful and proper repairs, replacements, additions and betterments thereto, so that it 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 repraced 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 the said City and payment for the same from the corporate funds shall be made monthly into the Waterworks and Sewerage Fund created by this or­ dinance, as revenues derived from the operation of the combined waterworks and sewerage system, in the same manner as other revenues are required to be deposited. No free service of the system shall be furnished to any persons, firm, organization, or cor­ poration, public or private, and to the extent permitted by law it is expressly herein covenanted that the City will not grant a franchise for the operation of any other or competing waterworks system or sewerage system or com­ bination thereof within The City . of McHenry and that the bonds herein authorized to be issued shall constitute legally en­ forceable liens on the revenues of the combined waterworks and sewerage system of the City, including all further extensions, additions and improvements thereto, whether acquired through purchase, contract or other­ wise. (c) The City will establish such rules and regulations for the control and operation of said system necessary for the efficient and economical operation thereof, and rates pnd 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 or­ dinance have been paid in full, both as to principal and in- terest. (d) The City will make and keep proper books and ac­ counts (separate and apart from all other records and accounts of the City) in which complete entries shall be made of all transactions relating to said system, and hereby covenants and agrees that within ninety (90) days following the close of each fiscal year it will cause the books and accounts to 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 in­ cluded 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 sucn 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 com­ ment regarding the manner in which the City has carried out e the accounting requirements of this ordinance, and the ac­ countant's recommendations for any changes or im­ provements in the operation of the system. (4) A list of all the 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. (5) The number of sewer customers served by the system at the end of the year, 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 each such audit shall be furnished upon com­ pletion to the original pur­ chaser of the bonds herein authorized, and a summary thereof shall be furnished to any bondholder on request. In addition, statements of revenues and expenditures of the system shall be furnished to the Mayor and 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 11 hereof), or any improvements and extensions thereto, until all of said bonds hereby 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 disposing of any property which in the judgment of the Mayor and 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 Account hereinabove established in Section 9 of this ordinance. (f) The provisions of this ordinance shall constitute a contract between the City and the holders of the bonds authorized to be issued, and any holder of a bond or bonds, or any of the coupons of any bond or bonas, issued hereunder, may proceed by civil action 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 suf­ ficient charges and rates for the water and sewerage ser­ vices supplied by said system, and the application of the in­ come and revenue therefrom. „ (g) The City will carry in­ surance on said system of the kinds and in the amounts which are usually carried by private parties operating similar properties, including, without limiting the generality of the foregoing, fire, windstorm insurance, public liability, and all additional insuance covering such risks as shall be recommended by a competent consulting engineer employed for the purpose of making such recommendation, ana all moneys received for loss under such insurance policies shall be deposited in , the Depreciation Account, and} used in making good the \oys or damage in respect of which they were paid, either by repairing the property damaged or replacing the property destroyed and provision for making good such loss or damage shall be made within ninety (90) days frorn 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 Operation and Main­ tenance Account and used in paying the claims on account of which they were received. Section 11. Additional Bonds That the City of McHenry covenants and agrees with the holders of the bonds and coupons hereby authorized that, while any of said bonds are outstanding and unpaid, it will not issue anv other bonds or obligations of any kind or nature naving a pledge on the revenues of the system which is prior to the lien on such revenues of the bonds herein authorized. (a) The City reserves the right to issue at one time, or from time to time, as shall be found necessary and for the best interest of said City by the Mayor and City Council, ad­ ditional bonds on a parity with the bonds authorized hereunder for the purpose of constructing improvements, replacements and extensions of the combined system, or for the acquisition of additional waterworks and sewerage systems, or any combination thereof, or for the purpose of refunding any of the Waterworks and Sewerage 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 (d), inclusive, of Section 9 of this^ ordinance, up to the date of authorization of said additional bonds, shall have been credited to said respective accounts; (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 ten per cent (110 per cent) of the maximum com­ bined principal and interest requirements for any suc­ ceeding fiscal year during the life of the then outstanding 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 subparagraph (2) shall mean the gross revenues of the i system less the actual costs of operation 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 cer­ tified public accountant. 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 year, which change is in effect at the time of the issuance of any such ad­ ditional 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 tnen existing rates been in effect during all of said year. Any such adjusted net revenues shall be evidence by the certificate of a certified public accountant or an in­ dependent consulting engineer employed for that purpose, which certificate shall be ap­ proved by the Mayor and City Council prior to issuance of the additional bonds and filed with the City Clerk upon its ap­ proval. (b) Notwithstanding the foregoing provisions, the City reserves the further right tot issue bonds to refund any of these bonds, or bonds on a parity therewith, or any portion thereof, from time to time as may be determined necessary or expedient and for the best interest of this City. (c) 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 October 1, and as to interest on March 1 and October 1. Section 12. Amendment That the rights and obligations of the City and of the nolders of the bonds may from time to time be modified or amended by a supplemental ordinance adopted by the Mayor and City Council with the written consent of the holders of not less than two- thirds (2/3) of the principal 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 amend­ ment 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 (continued on page 19) »