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/ Hoe s - PLAINDEALER • FRIDAY. AUGUST. 24.1979 Legal Notice SEWERAGE REVENUE BOND, SERIES OF 1979 Number Ordinance No. 0-79-204 A N O R D I N A N C E Authorising an issue of $1,150,000 Waterworks and Sewerage Revenue Bonds. ; Series of 1979, of the City of McHenry , McHenry County, Illinois, and providing for the payment and delivery there of. WHEREAS, the City of McHenry, McHenry County, Illinois, has for many years long past owned and operated in its governmental capacity a waterworks system and a sanitary sewerage system serving the needs of said City and has combined said systems into a combined waterworks and sewerage system (said combined waterworks and sewerage system hereinafter, together with improvements, extensions ana repairs authorized by this ordiance, and all further improvements And extensions thereof, or replacements thereto, herein called the "system"); and " WHEREAS, the governing body of said City has heretofore approved all plans, maps, files and specifications for the construction of needed im­ provements and expansion to said system to efficiently collect and dispose of the domestic and industrial wastes and their products within said City in the best interests of the public health and sanitation of said City, and has determined that said City will need to borrow funds to pay, with other funds to be made available therefor, the costs of said improvements and expansion ana the income and revenue to be derived from the operation of said system is determined adequate to provide for the payment of bonds herein proposed to be issued; and WHEREAS, the total estimated cost of such im- Fmovements and expansion, ncluding all necessary engineering, legal and financial cost, contingencies and bond discount, as prepared by engineers for same is the sum of $1,390,000 and the City does not have sufficient funds on hand to pay the cost thereof and, in order to raise the funds to construct said improvements and extensions, i* will be necessary for the City to borrow money and issue revenue bonds in the prir pal amount of $1,150,000; ano WHEREAS, the City Council did adopt an ordinance on March 19,1956, authorizing and providing for the issue of $179,000 Waterworks and Sewerage Revenue Bonds, Series of1956, of which bonds in the amount of $72,000 are now outstanding; and WHEREAS, the City Council did adopt an ordinance on November 3, 1975, authorizing and providing for the issue of $193,000 Waterworks and Sewerage Revenue Bonds, dated November 1, 1975, of which bonds in the amount of $123,000 are now outstanding; and WHEREAS, said $123,000 Waterworks and Sewerage Revenue Bonds, dated November 1, 1975, will be refunded and paid from funds on hand and lawfully available itefefor, leaving outstanding oijftr said Waterworks and Sewerage Revenue Bonds, Series of 1956; and ;WHEREAS, the terms of said ordinance adopted on March 19, 1966, provide that additional bonds on a parity with the outstanding revenue bonds may be issued if the gross cash operating revenues for the last fiscal year ending April 30 immediately preceding the authorizing of any such ad­ ditional bonds were sufficient to pay all cost of operation and maihtenance, to make the annual payments to the Depreciation Account and to the Bond Reserve Account, and to make up any and all deficiencies then existing and leave a balance equal to one and one-tenth (l 1-10) times the maximum amount of principal £nd interest that will become due in any fiscal year sub­ sequent to the issuance of additional bonds on the then outstanding revenue bonds and pn the additional bonds then proposed to be issued; and WHEREAS, the revenues of the system for the last fiscal year computed in the manner provided in the above paragraph were sufficient for the issuance of the additional parity bonds hereinafter proposed to be issued; and WHEREAS, the revenues of the system have not been pledged or hypothecated in whole or in part in any manner br for any, purpose except for iQe payment of the outstanding bonds authorized by said or­ dinances adopted on March 19, 1956 and on November 3, 1975. respectively; and WHEREAS, pursuant to the Sovisions of the Illinois unicipal Code, approved May ,1961, as amended, this City is authorized to issue Water­ works and Sewerage Revenue Bonds in an amount sufficient to pay the cost of constructing s&ch improvements and ex­ pansion, and the income and revenue derived and to be derived from the operation of said combined waterworks and sewerage system of said City vtfill be fully adequate to provide for the payment of the outstanding bonds and the new bonds so proposed to be issued: ; NOW, THEREFORE, Be It Ordained by the Citv Council of U»e City of McHenry, McHenry County, Illinois, as follows: I Section 1. That the existing :ombined waterworks and ewerage system of this City hall be improved and ex- wnded in accordance with the engineering report heretofore iuomitted to and approved by this Council by Baxter & Woodman, Crystal Lake, Illinois, Consulting Municipal Engineers, by the acquisition, construction and installation of the following described properties, improvements and equipment, together with all necessary appurtenances and connections used or useful in connection with the public covenience thereof, viz; (a) the construction of improvements to and ex­ pansion of the existing sewage treatment plant of said City to increase the capacity of such plant from approximately 1,750,000 to 3,000,000 gallons per day for an increase in population equivalent of from ap­ proximately 13,000 P-E to 25.000 P-E; and (b) the acquisition of all necessary land or rights in land, properties, work, materials, piping, elec­ trical and mechanical services, and other materials or services necessary or advisable for the aforesaid improvement and expansion; all' as more fully set forth in itemized detail in said plans, files, maps and specifications; hereinabove referred to and now on file for public inspection in the office of the City Clerk, and the period of usefulness of said combined waterworks and sewerage system, including said described improvements and expansion is hereby determined by this City Council to be forty (40) /ears from the date of the bonds herein authorized to be issued. Section 2. That for the pur­ pose of accomplishing the necdful improvements to and expansion of said system as herein-above described, there be issued and sold the bonds of said City to be designated' Waterworks and Sewerage Revenue Bonds, Series of 1979, in the principal sum of $1,150,000 the proceeds from the sale thereof, together with the sum ot $240,000 to be made available by said City from funds on hand and lawfully av- vailabk therefor, being hereby determinded adequate to pay the estimated costs of con- slructine said improvements aid expi .is on as herein-above described. The said bonds shall bear date of September 1, 1979, be of $5,0uu ot omination each, numbered •• n l through 230, and sha.'i 'nature serially in numerical order on May 1 in each of the years and in amounts as follows: $5,000 KNOW ALL MEN BY THESE PRESENTS, that the City of McHenry, in the County of McHenry and State of Illinois, for value received hereby promises to pay to bearer, or if, this bond be registered as hereinafter provided, then to the registered holder hereof, solely from the Waterworks and Sewerage Fund of the City of McHenry, as hereinafter mentioned ana not otherwise, the sum of Five Thousand Dollars ($5,000) on May 1,19 , and to pay interest on such principal sum from the date hereof until paid, at the rate of Six Per Cent (6 percent) par annum, payable May 1, 1980, and semiannually thereafter on the first days of November and May in each year, and until maturity hereof upon presentation and surrender of the interest coupons hereto appertaining as they severally mature. i Both principal of and interest' on this oond are hereby made payable in lawful money of the United States of America at the McHENRY STATE BANK, in the City of McHenry, Illinois. This bond is payable solely from revenues derived from the waterworks and sewerage system of said City and not otherwise, and is issued under authority of Division 139 of Article 11 of the Illinois Municipal Code, and all laws amendatory thereof and supplementary thereto, for the purpose of paying part of the cost, with other funds to be made available therefor, of necessary improvements to and expansion of the water­ works and sewerage system of said City, and this bond does not constitute an indebtedness of said City within the meaning of any constitutional provision or any constitutional or statutory limitation. Under said Code and the ordinance adopted pursuant thereto, the entire revenue derived and to be derived from the operation of the waterworks and sewerage system of this City shall be deposited in a separate fund designated as the "Waterworks ana Sewerage Fund of the City of McHenry," which shall be used only for the purpose of paying the cost of operating and maintaining such system, providing an adequate depreciation fund, and paying the principal of ana interest on the bonds of said City that are issued under authority of said Code and are payable by their terms only from the revenue of such County, Illinois, will pay to bearer out of the Waterworks and Sewerage Fund of said City Dollars ($ ) in lawful money of the United States of America, at , in the -- of , , being interest then due on its Waterworks and Sewerage Revenue Bond, Series of 1979", dated September 1, 1979, numbered . (facsimile signature) Mayor (facsimile signature) City Clerk .(Form of Registration Certificate) Date of In Whose Signature Resist- Name . of City ration Registered Treasurer Serial Numbers, Both Inclusive 1- 17 18-35 36- 55 56- 76 77- 98 99-121 122-146 147-172 173-200 201-230 Year of Maturity 1981 1982 1983 1984 1985 1986 „ 1987 1988 1989 1990 Principal Amount $ 85,000 90,000 100,000 105,000 110,000 115,000 125,000 130,000 140,000 150,000 The said bonds shall bear interest at the rate of Six Per Cent (6 percent) per annum, to be payable on May 1, 1980, and semiannually therafter on November l and May 1 in each year until paid, and both the principal and interest on the said bonds shall be payable in lawful money of the United States of America at the McHENRY STATE BANK, in the City of McHenry, Illinois. 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 saicTCity 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 said City, and such bonds shall not in any event constitute an indebtedness of said City within the meaning of any constitutional 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 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 representatives or assigns. Such registered bonds may be transferred to another registered holder or back to beaicr only upon presentation to the City Treasurer, with a legal assignment duly acknowledged or approved. Registration of any of such bonds shall no affect the negotiability of the coupons thereto attached, and such coupons shall be transferable by deliverv merely. Section 3. 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 AND system, and creating and maintaining the several ac­ counts established by the or­ dinance authorizing the issue of bonds of which this bond is one. It is hereby certified and recited that all acts, conditions and things required by the Constitution ana statutes of the State of Illinois to be done precedent to and in the issuance of this bond and in raising funds to promptly assure payment thereof, nave been done and have happened and have been performed in regular and due form of law; that provision has been made for depositing in said Water­ works and Sewerage Fund the entire revenues received from the operation of said system, to be applied in the manner as hereinabove set forth; and it is hereby covenanted and agreed that rates will be charged for the use and service of such system sufficient at all times to create and maintain the several Accounts established by the ordinance authorizing the issue of bonds of which this bond is one. This bond may be registered as to principal in the name of the holder, on the books of said City in the office of the City Treasurer, such registration to be e"Henced by notation of said Treasurer on the back hereof, and after which no transfer hereof shall be valid unless made on said bocka and similarly noted hereon, but it may be discharged from such registration bv being tran­ sferred to be Hi er, 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, said City of McHenry, McHenry County, Illinois, by its City Couhcil, has caused this bond to be signed by its Mayor, its corporate seal to be hereto <:ffixea 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 bona to be dated as of the first day of September, 1979. be designated from time to time by the City Council, for the purpose of paying the maturing principal of ana the interest accruing on the Waterworks and Sewerage Revenue Bonds issued under the terms of this . ordinance, an amount at least equal to one-sixth (l-6th) of the interest beebming due on all outstanding Waterworks and Sewerage Revenue Bonds on the next succeeding interest payment date and amount equal to one-twelfth (l-12th) of the principal becoming due on the next succeeding principal payment date, sucn equal monthly installments for principal and interest to proquce not less than the following minimum amounts in each fiscal year: Fiscal Year Ending Principal April 30 {* and Interest 1980 $ 56,880 1981 164,560 1982 164,140 1983- 169,420 1984 168,060 1985 167,400 1986 165,400 1987 168,100 1988 " 155,200 1989 v 157,400 1990 159,000 It is the express intent and determination of this City Council that the amount of said income and revenue so to be set aside and deposited into said Bond Account shall be in any event always sufficient to pay the interest on said bonds as the same becomes due and the principal thereof as the same matures, and there shall be deposited out of such income and revenue received from the operation of said system from month to month during each such fiscal year, without fur­ ther authorization from this City Council, sufficient moneys in said Bond Account to pay promptly such principal and interest. No further payments need to be made into said Bond Ac­ count when and so long as such amount of bonds shall have been retired that the amount then held in said account, together with the amount then on deposit in the Bond Reserve Account, is equal to the entire amount of all principal and interest that will De payable at the time of maturity on all of said bonds then remaining outstanding. If there are not sufficient funds in the Bond Account available to pay maturing principal of ana interest on the bonds herein authorized, such deficiency shall be made up first by the transfer of funds from the Bond Reseve Account, next from the transfer of funds from the Depreciation Account, and next from the transfer of funds from the Surplus Ac­ count. (d) Bond Reserve Account: There shall next be deposited in the Bond Reserve Account a sum sufficient (including and not in addition to the amount M required to be deposited into ... Section 4. That upon the issuance of any of the Water­ works and Sewerage Revenue Bonds herein provided for, the entire waterworks and sewerage system of said City, for the purpose of this or­ dinance, shall continue to be operated on a fiscal year basis. commencing the first day of May and ending the last day of April of each succeeding year, and so long as any of the bonds herein authorized to be issued are outstanding, the entire rev­ enues derived from the opera­ tion of said system of said City shall be collected and shall be set aside as collected, and shall be deposited in accordance with the laws of the State of Illinois governing the deposit of public moneys, in a separate fund, which is hereby main­ tained and continued, to be designated as the "Waterworks and Sewerage Fund of the City of McHenry," which shall be kept apart and segregated from all other moneys of said City- and shall be used only to maintain and continue the several accounts hereinafter specified for the purpose of paying the cost of the operation and maintenance of said sytem, providing an adequate depreciation reserve, and paying the principal of and interest upon the Waterworks and Sewerage Revenue Bonds issued under the terms of this ordinance, and such Water­ works and Sewerage Fund shall be used only for such purposes and is hereby pledged therefor. Section 5. For the accounting of all moneys and assets of said Waterworks and Sewerage Fund at any time and from time to time while any Waterworks and Sewerage Revenue Bonds herein authorized are outstanding and upaid, there are hereby maintained and continue! the five separate Accounts of said ' _ Fund designated (a) the _ said account by the provisions i Operation and Maintenance--<jf the Waterworks and Account, (b) the Depreciation Account, (c) the Bona Account, (d) the Bond Reserve Acebunt, (e) the Surplus Account','and all deposits made to andall funds held in each of said Accounts, respectively, shall be contin­ uously secured as provided by the laws of the State of Illinois governing the deposit of public moneys and into which there shall be paid on the first business day of each month all moneys held in said Water- f Sewerage Revenue Bond or­ dinance adopted on March 19, 1956) to aggregate $13,667 each year until a maximum of $82,000 is on deposit in said Account, and at which figure said Account, notwithstanding any transfer therefrom as herein permitted, shall thereafter be continuously maintained, and all moneys therein shall be only used by the Treasurer hereof as may be needed from time to time in the works and Sewerage Fund in * payment of the interest on or accordance with the following principal of the bonds herein provisions and in the priority of authorized whenever there said Accounts so created and exists a deficiency in the Bond Mayor Attest: City Clerk (Form of Coupon) On the first day of , 19 , the City of McHenry, McHenry established as follows (a) Operation and Main­ tenance Account: There first shall be set apart and paid out of said Waterworks and Sewerage Fund into an Operation and Maintenance • Account an amount considered ' necessary and sufficient to pay the reasonable current ex­ penses of operating, repairing and maintaining said sytem for the current month. (b) Depreciation Account: There next shall be deposited in the Depreciation Account a sum sufficient (including and not in addition to the amount required to be deposited into said Account by the provisions of the Waterworks and j Sewerage Revenue Bond or­ dinance adopted on March 19, 1956) to aggregate $5,500 each . year until a maximum sum of $33,000 is on deposit in said Account, which is hereby found and determined to be a reasonable amount necessary to accomplish the purpose for which said Depreciation Ac­ count is established, and at which figure said Account, notwithstanding any transfer therefrom as herein permitted, shall thereafter be continuously maintained. The moneys in said Account shall be used to pay the cost of necessary replacements to the system, and shall not be used for ex­ tensions to said system, except that the funds held in said Depreciation Account to the extent necessary to prevent or remedy a default in the payment of the interest on or principal of the bonds herein authorized shall be used and held for use of that purpose, and shall be transferred to the Bond Account, and whenever such a transfer is made, the amount so transferred shall be added to the next deposit to be made, and thereafter until full reimbursement to said Depreciation Account has been made. The moneys in said Depreciation Account may be invested and reinvested in bonds or other obligations of the United States Government maturing within 5 (5) years from the date of purchase as may be authorized from time to time by resolution of the City Council of said City. (c) Bond Account: There next shall be deposited in the Bond Account, which shall be maintained at a depositary to Account hereinabove established, and all with­ drawals therefrom for that purpose shall be reimbursed from; the next revenues available therefor as provided therein. The moneys in said Bond Reserve Account shall be deposited with a depositary to be designated from time to time by the City Council, and may be invested and reinvested in bonds or other obligations of the United States Government maturing within five (5) years from date of purchase as may be authorized from time to time by resolution of the Mayor and City Council of said City. (e) Surplus Account: Any surplus funds remaining at the end of any fiscal year after providing for all of the deposits {hereinabove listed in sub­ paragraphs (a) through (d), and after the reimbursement of any account that is depleted by withdrawals, shall be deposited in the Surplus Account. The moneys in said Surplus Account shall be used or field for use exclusively (a) for the purpose of making improvements and extensions to the system, or (b) for the prior redempton 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, or (c) for any lawful purpose. Section 6. That the City of McHenry hereby agrees to carry insurance on said system of the kinds and in the amounts which are usually carried by private parties operating similar properites, including without limiting the generality of the foregoing, fire, wind­ storm insurance, public liability, and any additional insurance covering such risks as shall be recommended by a competent independent engineer employed for the purpose of making such recommendations, and all moneys received for losses under such insurance policies as insure against physical damage to or loss of the system shall be deposited in the Depreciation Account and shall be used in making good the loss 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 from the date of the loss. Hie proceeds of any and all policies for public liability shall De paid into the Operation and Main­ tenance Account and used in paying the claims on account of which they were received. The payment of premiums for all insurance policies required under the provisions of this section shall be con­ sidered an operation and maintenace expense. Section 7. That while any of the Waterworks and Sewerage Revenue Bonds issued pur­ suant to this ordinance remain outstanding or unpaid, rates charged for /water and sewerage service shall be sufficient at all times to pay all costs of operation and main­ tenance of the system, to make the payments and maintain the balance as required, in the Depreciation Account, to pay the principal of and interest on all bonds authorized hereunder, and to make the payments and maintain the balance as required in the Bond Reserve Account, as is hereinabove provided for. There shall be charged against all users of the system, including the City of McHenry, such rates and am­ ounts for water and sewerage services as shall be adequate to meet the requirements of this section. Charges for services 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 ordinance as other revenues derived from the operation of the system and in the same manner as other revenues are so required to be deposited. In addition to the foregoing said City covenants not to provide any Free service of said system and to pay promptly for the use of all facilities con­ nected, and to be connected, with said system. It is expressly herein covenanted that, to the extent permitted by law, said City will not grant a franchise for the operation of any competing waterworks system or sewer system within the City$of McHenry, and that the bonds herein authorized to be executed shall constitute legally enforceable liens upon the earnings of the combined waterworks and sewerage system of said City, including all further extensions, ad­ ditions, and improvements thereto, whether acquired through purchase, contract, or otherwise. Section 8. In the event said City defauts in complying with any covenant contained in this ordinance, any holder of any bond issued hereunder, or of any coupon representing in­ terest accrued thereon, may apply for the appointment of a receiver, or may, either in law . or in equity, by proper suit, compel the officials of raid City to perform all dutes required by law and by this ordinance, including the making and collecting of sufficient rate for water and sewerage services for that purpose and the ap­ plication and segregation of all income and revenue therefrom in accordance with the requirements of this ordinance. Section 9. That is is hereby convenanted and agrees with the holders of the bonds herein authorized that said City will not issue any other or ad­ ditional bonds or olher evidences of obligations of said City payable from or in any way creating a charge upon the income ana revenue to be derived from the operation of said sytem, except as herein provided: (A) Said City reserves the right to issue additional bonds for constructing further necessary improvements, extensions, repairs and rehabilitations to tne properties comprising said system as shall be determined necessary for the continued efficient operation of said system by a certificate filed of an in­ dependent engineer in responsible charge of such further improvements, ex­ tensions, repairs and rehabilitations, (i) giving a reasonably detailed description of such work, an estimate of the cost thereof, and an estimate of the time of completion thereof ; and - (ii) showing the feasibility of such revenue financing with reference to then existing rates and anticipated earnings based thereon, which certificate shall be approved by arid shall be made of public record in the proceedings of the governing body of said City before any such additional bonds are authorized, provided, however, that no such additional bonds for such purpose or purposes shall be issued unless ana until the gross cash operating revenues of said system earned for the last fiscal year ending April 30 immediately preceding the authorization of any such additional bonds, as shown .by an audit of an independent certified public accountant, were sufficient to pay all costs of the operation and main­ tenace of said system, to make the annual payments to the Depreciation Account and to the Bond Reserve Account, respectively, as hereinabove required, and'to make up any ana all deficiencies then existing as hereinabove specified in Section 5 of this ordinance, and leave a balance equal to one and one-tenth (1- 1-10) times the maximum amount of interest ana prin­ cipal that will become due in any fiscal year subsequent to the issuance of such additional bonds on the bonds of all issues then outstandirig and on a parity with this issue of bonds and on the additional bonds then proposed to be issued. Said City further covenants that if any additional bonds are so issued as permitted by this paragraph, the maximum amounts to be deposited in the Bond Reserve Account and the Depreciation Account shall be increased in the proportion to the principal amount of any additional Donds so issued. (B) Said City reserves the right to issue bonds to refund the Waterworks and Sewerage Revenue Bonds herein authorized, or any portion thereof, with the conset of the holders thereof, from time to time as may be determined necessary or expedient and for the best interests of this City, and all such refunding bonds so authorized and issued shall be payable from the income and revenue derived and to be derived from the operation of said system on a parity with any of the said principal amount Waterworks and Sewerage Revenue Bonds herein authorized to be issued as may not be refunded and as may be outstanding at the time of the issue and delivery of any of said refunding bonds, as aforesaid. (C) When the conditions specified in either paragraphs A or B of this section for the issue of adOilional bonds for the construction of further necessary improvements, extensions, repairs and rehabilitations, or for the refunding of the bonds herein authorized, have been met, then upon the issue thereof any such additional bonds when issued shall be entitled to the equal and proportionate benefit and security of the pledge of the revenue and income derived and to be derived from the operation of said sytem with tne bonds herein authorized without preference, priority or distinction as to participation of such pledge of revenue, or in the preference of one bond or coupon of each of said issues over or from any other issue, by reason of priority in execution, issue and delivery or negotiation thereof, or by reason of the date or dates of said bonds, or the date or dates of maturity thereof, or for any other reason whatsoever, the intent hereof being that each and all of said bonds, as aforesaid, and of coupons evidencing interest thereon, shall have the same right and pledge as to payment and security with the same legal effect as if each and all of said bonds and coupons had been executed, issued, delivered and negotiated simultaneously as one proceeding. Section 10. That the City of McHenry hereby covenants and agrees with the holder or holders of said bonds that it will punctually perform all duties with reference to said system, including the making and collecting of sufficient rates for the use and service of said system, all as required by the Constitution and laws of the • and "MIL State of m segregate said systeilFlh#' ma „ the Waterworks and Sewerage Fund and the application of tne respective Accounts created by this ordinance, and it hereby covenants and agrees not to sell, lease, loan, mortgage, or in any manner dispose of or encumber said system, in­ cluding any and all extensions and improvements that may be made thereto, or the income and revenue . derived therefrom, except as permitted in Section 9 hereof, until all of the bonds herein authorized to be issued shall have been paid in full, both principal and in­ terest, or unless and until provision shall have been made for the payment thereof. And said City further covenants and agrees with the holders of said Waterworks and Sewerage Revenue Bonds authorized hereunder to maintain in good condition and continuously operate said system, and to make, enact and enforce all needful rules and regulations and ordinances for the efficient management and proper maintenance and protection of such system, and for the use and service thereof. Section 11. Said Waterworks and Sewerage Fund and the Accounts created under Section 5 hereof, shall be audited wit hin sixty (60) days after the close of each fiscal year by an in­ dependent firm of certified public accountants, and such audit and Accounts shall be open for inspection at all proper times to any holder of bonds issued under the provisions of this ordinance, or any one acting for or on behalf of such bondholder. Such audit report shall include the following items: (a) Balance Sheet, (b) Operating statement, (c) Comments of the auditor relative to the fulfillment of ordinance provisions and the manner in which the system has been operated and any to purchase the said bonds herein authorized in ac­ cordance with their contract for the purchase thereof be and*' the same is hereby in >u respects ratified, approved arid' confirmed, and said bonds when duly executed as provided herein shall delivered to the Treasuj who shall receipt for 1 payment of said bonds against delivery thereof to said prir- " chasers at a price of 99-100 phfiri accrued interest from the date -r of said bonds to the date of th'fc delivery and payment thereof, the said purchase price being such that the interest cost to this City does not exceed Eight Per Cent (8 percent) annually coipputed to maturity cording to the standard table of bond values, as provided and permitted by the statutes of the State of Illinois thereunto enabling. All proceeds derived at the sale and delivery of the said bonds-shall be accounted for by sialyl Treasurer as follows: • . ; (i) Accrued interest received upon the sale of said bonds will be deposited into thfcu Bond to the payment of the -1 terest due on said bonds. , v (ii) The proceeds received as .principal, together with the sum of $240,000 on hand and lawfully available and authorized for that purpose* shall be deposited in a separate:' and sepcial account of said City to be known and designated as the "Waterworks and Sewerage System Bond Con­ struction Fund Account, 1979," and such deposits shall be made in a depositary to be hereafter designated by the City Council, to be secured in the manner, form and time as by law required, and all proceeds held in said Con- : struction Fund Account shall be! E used and held for use solely tp construct the improvements and expansion to the combinedf' waterworks and sewerage-' sytem of said City, aS'!J hereinabove described in this ordinance, and the beneficialv interest to all moneys held iiW said Construction Fund Ac­ count at the time of the original deposit therein and from time to time thereafter shall be in the holder or holders of the ' bonds herein authorized, and all disbursements therefrom shall be made by the Treasurer from time to time but only upon submission to him and to said depositary of: (a) if for labor or materials for said improvements, a certificate by the engineer in responsible charge of the construction of said im­ provements stating the nature of the work com­ pleted and the amount due and payable thereon, and that sufficient funds remain to complete the con­ struction-thereof. bearing^ « iment and ap- • of said E order for life-: said •^by the ! and the :pval bf the! ; airid ̂ . Mayor of saiu ... City Clerk, which order 5 shall state specifically the * purpose for which "said order is issued; and1 the Mayor of said City, the City Clerk, and the City I Treasurer are each hereby authorized and directed to execute and deliver to the designated depositary such certificates, proceedings, and agreements as may De necessary or convenient to establish said Construction Fund Account herein ^created and to properly secure all proceeds thereof, and to evidence compliance herewith in the making of a n y w i t h d r a w a l s 1 therefrom. Within the sixty (60) days ; after completion of the con-* struction ot the improvements J herein authorized, the City of * McHenry agrees to deliver to * said depositary an original § counterpart of a certificate (herein called the "Certificate g of Completion") signed by the Mayor and bv the City Treasurer, and having en-; d o r s e d t h e r e o n t h e a p p r o v a l o f ; i he engineer in charge of such construction, stating that said improvements and expansion have been fully constructed and completed in accordance with the plans, maps, files and specifications therefor as recited in this ordinance, and that the same have been fully paid for, or that funds sufficient so to pay for the same remain' in said Construction Fund Account, giving the date of final completion ana the total cost of construction, and the amounts if any, of such construction cost then remaining upaid, and;, upon receipt of such Certificate; o. Completion, said depositary,* after retaining in said Con­ struction Fund Account a sum recommendation for improving sufficient to pay the balance of the operation of the system, (d) the construction cost Insurance data, (e) Number of metered customers; number of unmetered customers; number of properites connected to the system; number of hydrants, and (f) Gallons of water passing through master meter and gallons of water billed, and copies of such audit report shall be furnished the original purchasers of the bonds herein authorized, and shall also be furnished to any bondholder upon request. Section 12. That the provisions of this ordinance shall constitute a contract between the City, of McHenry and the holders of the bonds herein 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 hereinbefore provided, until all of said bonds and the interest thereon shall have been paid in full, or unless and until Jirovision shall have been made br the payment thereof. Section 13. That the proposal of Channer Newman Securities Company, of Chicago, Illinois, -Wm remaining unpaid as shown by said Cer­ tificate of Completion, in-; eluding any items then in controversy, shall transfer all moneys then remairiing to the Treasurer for deposit into the Bond Reserve Account herein- continued. « Section 14. That the $123,000 Waterworks and Sewerage Revenue Bonds, dated November 1, 1975, authorized and outstanding pursuant to ordinance of the City Council adopted on November 3, 1975, be refunded by the payments of not more than par plus accrued interest therefor, said refun­ ding to be paid for with funds of the City on hand and lawfully avaifobie therefor. Section 15. If any section,; paragraph, clause or provision^ of this ordinance shaft be held invalid, the invalidity 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 (Continued on page 9) 1