VILLAGE OF CAPAC
ORDINANCE NO. 2023-01
At a special meeting of the Village Council of the Village of Capac, St. Clair County, Michigan, held on July 21, 2023.
PRESENT: Joe Herrington, Debra Hlubic, Mary Klug, Lynne Mandeville, Joe Nemecek, Samantha Ramirez
ABSENT: Tony Vigiletti The following ordinance was offered by Nemecek and seconded by Klug:
BOND ORDINANCE
Sewage Disposal System Junior Lien Revenue Bonds, Series 2023A and Series 2023B
WHEREAS, this Village Council does hereby determine that it is necessary to acquire, construct and install improvements to the Village’s sewage disposal system, including without limitation, improvements to 2,750 linear fee of 18-inch diameter existing sanitary sewer on Hill Street, including electric and control upgrades, and improvements to onsite gas generators at the McDonald’s and Lagoon pump stations, together with related appurtenances (the “2023 Project”); and
WHEREAS, the cost of acquiring and constructing the 2023 Project is estimated to be approximately One Million Three Hundred Ninety-Three Thousand Three Hundred Thirteen Dollars ($1,393,313); and
WHEREAS, the Village desires to issue bonds, as authorized by the provisions of Act 94, Public Acts of Michigan, 1933, as amended (“Act 94”), to pay the cost of acquiring and constructing the 2023 Project; and
WHEREAS, the Village wishes at this time to authorize the issuance of such bonds to defray part of the cost of acquiring and constructing the 2023 Project and to sell such bonds in a private negotiated sale to the United States of America acting through the United States Department of Agriculture, Rural Development (“Rural Development”) in furtherance of Rural Development’s program to provide low-interest rate, long-term loans for eligible projects (the “Program”).
THEREFORE, BE IT ORDAINED BY THE VILLAGE COUNCIL OF THE VILLAGE OF CAPAC, MICHIGAN, as follows:
SECTION 1. DEFINITIONS. Whenever used in this Ordinance, except when otherwise indicated by the context:
(a) “Additional Junior Lien Bonds” means any additional bonds of equal standing with the Series 2023 Bonds issued pursuant to Section 24.
(b) “Bond Reserve Requirement” means the lesser of the Maximum Annual Debt Service on any outstanding Senior Lien Bonds or the maximum amount permitted by the Code.
(c) “Bond Reserve Subaccount” means the subaccount established within the Redemption Account pursuant to Section 14B.
(d) “Code” means the Internal Revenue Code of 1986, as amended.
(e) “Council” means the Village Council of the Village.
(f) “Fiscal Year” means the fiscal and operating year of the Village which begins on July 1 and ends on the following June 30.
(g) “Issue Date” means the date on which the Series 2023 Bonds are delivered to the original purchaser thereof.
(h) “Junior Lien Bonds” means the Series 2023 Bonds, together with any Additional Junior Lien Bonds.
(i) “Junior Lien Redemption Account” means the account established pursuant to Section 14C.
(j) “Maximum Annual Debt Service” means, at any point in time, with respect to any outstanding Senior Lien Bonds or Junior Lien Bonds, as the case may be, the maximum amount of principal (whether by scheduled maturity or mandatory redemption) and interest becoming due in the then current or any future Fiscal Year; provided, however, that principal of and interest on Senior Lien Bonds or Junior Lien Bonds, as the case may be, maturing or becoming due by mandatory redemption on the first day of any Fiscal Year shall be deemed for purposes of this definition to mature or be subject to mandatory redemption on the last day of the immediately preceding Fiscal Year.
(k) “Operation and Maintenance Account” means the account established pursuant to Section 14A.
(l) “Receiving Account” means the account established pursuant to Section 14.
(m) “Repair and Replacement Account” means the account established pursuant to Section 14D.
(n) “Revenues” and “Net Revenues” shall be construed as defined in Section 3 of Act 94.
(o) “Senior Lien Bonds” means bonds or other obligations which may hereafter be issued or incurred by the Village to provide funds for any lawful purpose of the System which are of senior standing and priority of lien with respect to the Net Revenues to the claim of the Junior Lien Bonds, as provided in Section 24.
(p) “Series 2023 Bonds” means, collectively, the Series 2023A Bonds and Series 2023B Bonds, together with any Additional Junior Lien Bonds and any Senior Lien Bonds.
(q) “Series 2023A Bonds” and “Series 2023B Bonds” mean, respectively, the Series 2023 Bonds authorized pursuant to Section 3.
(r) “System” means the Village’s complete sewage disposal system, both inside and outside the Village, including all sanitary sewers, combined sanitary and storm sewers, plants, works, equipment, instrumentalities and properties used or useful in connection with the collection, treatment or disposal of sewage or industrial wastes, as the same now exists, together with all additions, extensions, repairs and improvements thereto hereafter acquired.
(s) “2023 Junior Lien Bond Reserve Subaccount” means the subaccount established within the Junior Lien Redemption Account pursuant to Section 14C.
(t) “Village” means the Village of Capac, County of St. Clair, Michigan.
SECTION 2. NECESSITY; PUBLIC PURPOSE; 2023 PROJECT COSTS; PERIOD OF USEFULNESS. It is hereby determined to be a necessary public purpose of the Village to acquire and construct the 2023 Project in accordance with the plans and specifications prepared by Spicer Group, which plans and specifications are now on file with the Clerk and are hereby approved and adopted. The Village hereby adopts the estimate of 40 years and upwards as the period of usefulness of the 2023 Project and also the estimate of $1,393,313 as the cost of the 2023 Project, both of which estimates are on file with the Clerk.
SECTION 3. AUTHORIZATION OF SERIES 2023 BONDS – PURPOSE. Two series of Series 2023 Bonds of the Village aggregating the principal sum of not to exceed One Million Three Hundred Thirty-Five Thousand Dollars ($1,335,000) shall be issued and sold pursuant to the provisions of Act 94 and other applicable statutory provisions, for the purpose of defraying part of the cost of the 2023 Project, including payment of legal, financial and other expenses incidental thereto and incidental to the issuance and sale of the Series 2023 Bonds. The first series of Series 2023 Bonds (the “Series 2023A Bonds”) shall be issued in the principal amount of not to exceed $1,085,000, as determined by the President at the time of sale; and the second series of Series 2023 Bonds (the “Series 2023B Bonds”) shall be issued in the principal amount of not to exceed $250,000, as determined by the President at the time of sale. The remaining cost of the 2023 Project, if any, shall be paid by the Village from federal or state grants and/or from funds on hand and legally available for such use.
SECTION 4. SERIES 2023 BOND DETAILS. The Series 2023A Bonds shall be designated “Sewage Disposal System Junior Lien Revenue Bonds, Series 2023A,” and the Series 2023B Bonds shall be designated “Sewage Disposal System Junior Lien Revenue Bonds, Series 2023B.” Each series of the Series 2023 Bonds shall be dated as of the Issue Date; shall be issued as Junior Lien Bonds payable out of the Net Revenues, as more fully set forth in Section 5 hereof; shall be issued in the form of a single fully-registered bond, designated No. 1, in the original principal amount of such series; shall bear interest at a rate of not to exceed 1.75% per annum, in the case of the Series 2023A Bonds, and not to exceed 3.00% per annum, in the case of the Series 2023B Bonds, as determined by the President at the time of the sale, from the date a principal payment is received from the purchaser thereof as shown on the registration grid on the Series 2023 Bonds, payable on such dates as shall be determined by the President at the time of sale; and shall mature on such dates and in such principal amounts as shall be determined by the President at the time of sale.
SECTION 5. PAYMENT OF PRINCIPAL AND INTEREST; PRIORITY OF LIEN. The Series 2023 Bonds and the interest thereon shall be payable solely from the Net Revenues, and to secure such payment, there is hereby created a statutory lien upon the whole of the Net Revenues that shall continue until payment in full of the principal of and interest on all Bonds payable from the Net Revenues, or until sufficient cash or direct obligations of the United States of America or obligations the principal and interest of which are fully guaranteed by the United States of America, not redeemable at the option of the issuer thereof, the principal and interest payments on which, without reinvestment of interest, come due at such times and in such amounts as to be fully sufficient to pay, when due, the principal of and interest on all Bonds payable from the Net Revenues to be paid or defeased to their stated maturity date or earlier redemption, shall have been deposited in trust for payment in full of such Bonds to their maturity or, if called for redemption, to the date fixed for redemption. Upon such deposit, the statutory lien herein created shall be terminated with respect to such Bonds to be defeased, the holders of such Bonds shall have no further rights under this Ordinance except for payment from the deposited funds, and such Bonds no longer shall be considered to be outstanding under this Ordinance.
The statutory lien on the Net Revenues securing any Senior Lien Bonds shall be a first lien and shall at all times and in all respects be and remain superior to the lien on the Net Revenues securing the Series 2023 Bonds and any Additional Junior Lien Bonds.
The principal of and interest on the Series 2023 Bonds shall be payable in lawful money of the United States. Principal and interest on the Series 2023 Bonds shall be paid when due through an electronic payment process acceptable to Rural Development or by check or draft that shall be mailed to the registered owner at the address shown on the registration books of the Village kept by the bond registrar and paying agent. The final payment of the principal of the Series 2023 Bonds is payable upon the surrender thereof at the office of the bond registrar and paying agent.
SECTION 6. BONDHOLDERS’ RIGHTS; RECEIVER. The registered owner or owners of the Series 2023 Bonds representing in the aggregate not less than twenty percent (20%) of the entire principal amount thereof then outstanding may, by suit, action, mandamus or other proceedings, protect and enforce the statutory lien upon the Net Revenues and may, by suit, action, mandamus or other proceedings, enforce and compel performance of all duties of the officers of the Village, including the fixing of sufficient rates, the collection of Revenues, the proper segregation of the Revenues of the System and the proper application thereof. The statutory lien upon the Net Revenues, however, shall not be construed as to compel the sale of the System or any part thereof.
If there is a default in the payment of the principal of or interest on the Series 2023 Bonds, any court having jurisdiction in any proper action may appoint a receiver to administer and operate the System on behalf of the Village and under the direction of the court, and by and with the approval of the court to perform all of the duties of the officers of the Village more particularly set forth herein and in Act 94.
The registered owner or owners of the Series 2023 Bonds shall have all other rights and remedies given by Act 94 for the payment and enforcement of the Series 2023 Bonds and the security therefor.
SECTION 7. PREPAYMENT OF PRINCIPAL. Principal installments of the Series 2023 Bonds may be prepaid prior to maturity upon the terms and conditions set forth in the form of Series 2023 Bonds contained in Section 14 hereof.
SECTION 8. BOND REGISTRAR AND PAYING AGENT. Until a successor is appointed by the Council, the Treasurer shall act as bond registrar and paying agent for the Series 2023 Bonds. In the absence of the Treasurer or in the event of the inability of the Treasurer to act, the Clerk may perform the duties of the bond registrar and paying agent.
SECTION 9. EXECUTION AND DELIVERY OF THE SERIES 2023 BONDS. The Series 2023 Bonds shall be executed in the name of the Village by the manual signatures of the President and the Clerk. After the Series 2023 Bonds have been executed, they shall be delivered by the Clerk or Treasurer to the purchaser upon receipt of the first principal payment from the purchaser. The first and each subsequent principal payment received by the Village from the purchaser shall be noted on the registration grid of the Series 2023 Bonds.
SECTION 10. EXCHANGE AND TRANSFER OF THE SERIES 2023 BONDS. The Series 2023 Bonds, upon surrender thereof to the bond registrar and paying agent with a written instrument of transfer satisfactory to the bond registrar and paying agent duly executed by the registered owner or his duly authorized attorney, at the option of the registered owner thereof, may be transferred to another party. The Series 2023 Bonds shall be transferable only upon the books of the Village, which shall be kept for that purpose by the bond registrar and paying agent. Upon the exchange or transfer of the Series 2023 Bonds, the bond registrar and paying agent shall register the Series 2023 Bonds in the name of the transferee on the registration books of the Village and shall note such registration on the registration grid.
The Village and the bond registrar and paying agent may deem and treat the person in whose name the Series 2023 Bonds shall be registered upon the books of the Village as the absolute owner of the Series 2023 Bonds, whether such Series 2023 Bonds shall be overdue or not, for the purpose of receiving payment of the principal of and interest on such Series 2023 Bonds and for all other purposes, and all payments made to such registered owner, or upon his order, in accordance with the provisions of Section 5 of this Ordinance shall be valid and effectual to satisfy and discharge the liability upon such Series 2023 Bonds to the extent of the sum or sums so paid, and neither the Village nor the bond registrar and paying agent shall be affected by any notice to the contrary. Registration of the Series 2023 Bonds shall not be transferred less than five (5) days prior to an interest payment date.
For every exchange or transfer of the Series 2023 Bonds, the Village or the bond registrar and payment agent may make a charge sufficient to reimburse it for any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer, which sum or sums shall be paid by the person requesting such exchange or transfer as a condition precedent to the exercise of the privilege of making such exchange or transfer.
SECTION 11. MANAGEMENT OF SYSTEM. The management and operation of the System shall be under the supervision and control of the Council. The Council may employ such persons in such capacities as it deems advisable to carry on the efficient management and operation of the System. The Council may make such rules and regulations as it deems necessary and advisable to assure the efficient management and operation of the System and not inconsistent with the provisions of this Ordinance.
SECTION 12. NO FREE SERVICE OR USE. No free service or use of the System, or service or use of the System at less than cost, shall be furnished by the System to any person, firm or corporation, public or private, or to any public agency or instrumentality.
SECTION 13. FIXING AND REVISING RATES; RATE COVENANT. The rates and charges for service furnished by and the use of the System and the methods of collection and enforcement of the collection of the rates shall be those in effect on the date of adoption of this Ordinance. Rates shall be fixed and revised from time to time by the Council so as to produce amounts that are sufficient to provide for the payment of the expenses of administration and operation and such expenses for maintenance of the System as are necessary to preserve the System in good repair and working order, to pay an amount equal to at least 100% of the principal of and interest on the Junior Lien Bonds as the same become due and payable, to pay an amount equal to at least 110% of the principal of and interest on the Senior Lien Bonds as the same become due and payable, and to provide for all other obligations, expenditures and funds for the System required by law and this Ordinance. The Village covenants and agrees to review such rates at least annually and maintain at all times such rates for service furnished by the System as shall be sufficient to provide for the foregoing.
SECTION 14. ACCOUNTS; FLOW OF FUNDS. All Revenues of the System shall be set aside as collected and credited to the SEWAGE DISPOSAL SYSTEM RECEIVING ACCOUNT (the “Receiving Account”) which is hereby established. Moneys on hand in the Receiving Account are pledged for the purpose of the following accounts and shall be transferred from the Receiving Account periodically in the manner and at the times and in the following order of priority:
A. Operation and Maintenance Account: There shall be first set aside in, or credited to, an account designated OPERATION AND MAINTENANCE ACCOUNT (the “Operation and Maintenance Account”), monthly, a sum sufficient to provide for all payment of the expenses of administration and operation of the System and such current expenses for maintenance thereof as may be necessary to preserve the System in good repair and working order.
B. Bond and Interest Redemption Account: There shall be established and maintained a separate depository account designated BOND AND INTEREST REDEMPTION ACCOUNT (the “Redemption Account”), the moneys on deposit therein from time to time to be used solely for the purpose of paying the principal of and interest on the Senior Lien Bonds. The moneys in the Redemption Account shall be accounted for separately.
Revenues remaining in the Redemption Account after provision for the requirements of the Operation and Maintenance Account shall be set aside, but not more often than monthly, in the Redemption Account for the Senior Lien Bonds in accordance with the ordinance authorizing the issuance or sale of such Senior Lien Bonds so that on each interest payment date and principal payment date for such Senior Lien Bonds there shall be sufficient funds in the Redemption Account to pay the interest and principal due on such dates.
No further payments need to be made into the Redemption Account after enough of the Senior Lien Bonds have been retired so that the amount then held in the Redemption Account is equal to the entire amount of principal and interest that will be payable at the time of maturity of all the then outstanding Senior Lien Bonds.
There is hereby established in the Redemption Account a separate subaccount to be known as the Bond Reserve Subaccount, into which shall be deposited on the date of delivery of each series of Senior Lien Bonds, such moneys or securities, as determined by the Village in the ordinance authorizing the issuance or sale of such Senior Lien Bonds, that will cause the amount on deposit in the Bond Reserve Subaccount to equal the Bond Reserve Requirement. Thereafter, from the Revenues remaining in the Receiving Account after provision has been made for the Operation and Maintenance Fund and the Redemption Account, there shall be deposited in the Bond Reserve Subaccount each month an amount equal to the balance in the Receiving Fund or the amount necessary to accumulate and maintain in the Bond Reserve Subaccount a sum equal to the Bond Reserve Requirement, whichever is lesser. Except as otherwise provided herein, moneys in the Bond Reserve Subaccount shall be used solely for the payment of the principal of and interest on Senior Lien Bonds as to which there would otherwise be default.
C. Junior Lien Bond and Interest Redemption Account. There shall be established and maintained a separate depository account designated JUNIOR LIEN BOND AND INTEREST REDEMPTION ACCOUNT (the “Junior Lien Redemption Account”), the moneys on deposit therein from time to time to be used solely for the purpose of paying the principal of and interest on the Series 2023 Bonds and any Additional Junior Lien Bonds. The moneys in the Junior Lien Redemption Account shall be accounted for separately.
Revenues remaining in the Receiving Account after provision for the requirements of the Operation and Maintenance Account and the Redemption Account including the Bond Reserve Subaccount, shall be set aside each month in the Junior Lien Redemption Account in an amount proportionately sufficient to provide for the payment when due of the current principal of and interest on the Junior Lien Bonds, less any amount in the Junior Lien Redemption Account representing accrued interest and premium, if any, on the Junior Lien Bonds. Commencing the month in which the Issue Date occurs, until the Junior Lien Bonds are paid in full the amount set aside each month for interest on the Junior Lien Bonds shall be 1/6 of the total amount of interest on the Junior Lien Bonds coming due on the next interest payment date or such greater or lesser amount in approximately equal monthly installments necessary to accumulate the amount of interest next coming due by the date such interest is to be paid. Commencing the month in which the Issue Date occurs, the amount set aside each month for principal shall be 1/12 of the total principal amount of the Junior Lien Bonds next coming due or such greater or lesser amount in approximately equal monthly installments necessary to accumulate the principal amount next coming due by the date such principal is to be paid. If there is any deficiency in the amounts previously set aside, that deficiency shall be added to the next succeeding month’s requirements.
There is hereby established in the Junior Lien Redemption Account a separate subaccount to be known as the 2023A Junior Lien Bond Reserve Subaccount, into which there shall be paid in equal annual installments from the moneys in the Receiving Account after provision for the requirements of the Operation and Maintenance Account, the Redemption Account, the Bond Reserve Subaccount and the Junior Lien Redemption Account, annually, commencing on such date as determined by the Village President, the sum of $3,795.40 per year until there is accumulated in such subaccount the sum of $37,954.00. Except as hereinafter provided, no further deposits need be made into the 2023A Junior Lien Bond Reserve Subaccount once the sum of $37,954.00 has been deposited therein. Moneys in the 2023A Junior Lien Bond Reserve Subaccount shall be used solely for the payment of the principal and interest on the Series 2023A Bonds as to which there would otherwise be a default.
There is hereby established in the Junior Lien Redemption Account a separate subaccount to be known as the 2023B Junior Lien Bond Reserve Subaccount, into which there shall be paid in equal annual installments from the moneys in the Receiving Account after provision for the requirements of the Operation and Maintenance Account, the Redemption Account, the Bond Reserve Subaccount and the Junior Lien Redemption Account, annually, commencing on such date as determined by the Village President, the sum of $1,077.60 per year until there is accumulated in such subaccount the sum of $10,776.00. Except as hereinafter provided, no further deposits need be made into the 2023B Junior Lien Bond Reserve Subaccount once the sum of $10,776.00 has been deposited therein. Moneys in the 2023B Junior Lien Bond Reserve Subaccount shall be used solely for the payment of the principal and interest on the Series 2023B Bonds as to which there would otherwise be a default
If at any time it shall be necessary to use moneys in the 2023A Junior Lien Bond Reserve Subaccount or the 2023B Junior Lien Bond Reserve Subaccount for such payment, then the moneys so used shall be replaced from the moneys transferred from the Receiving Account thereafter that are not required to be used for operation and maintenance or for current principal and interest requirements.
No further payments need to be made into the Junior Lien Redemption Account after enough of the Junior Lien Bonds have been retired so that the amount then held in the Junior Redemption Account (including the 2023A Junior Lien Bond Reserve Subaccount and the 2023B Junior Lien Bond Reserve Subaccount) is equal to the entire amount of principal and interest that will be payable at the time of maturity of all the then outstanding Junior Lien Bonds.
D. Repair and Replacement Account: There shall be established and maintained an account designated REPAIR AND REPLACEMENT ACCOUNT (the “Repair and Replacement Account”). The Council shall include in the annual budget and there shall be deposited in the Repair and Replacement Account such amounts so as to maintain the System in proper repair and working order, including the amounts hereinafter set forth. Out of the Revenues remaining after meeting the monthly requirements of the Operations and Maintenance Account, the Redemption Account and the Junior Lien Redemption Account (including the 2023 Bond Reserve Subaccount), there shall be deposited into the Repair and Replacement Account annually, commencing on such date as determined by the Village President, the amount of $750 until the Series 2023 Bonds and any Additional Junior Lien Bonds purchased by the United States of America or any agency or department thereof are paid in full. The money deposited in the Repair and Replacement Account may be withdrawn to pay the cost of emergency maintenance of the System, extensions to System facilities and replacement of System assets having useful lives ending prior to the final maturity of the Series 2023 Bonds or any Additional Junior Lien Bonds purchased by the United States or any agency or department thereof.
E. Surplus Moneys: Any Revenues remaining in the Receiving Account at the end of any Fiscal Year after satisfying the foregoing requirements of this Section shall be deemed to be surplus moneys, and may, at the option of the Village, be used and applied for any purpose related to the System for which the foregoing accounts were established or to improve or extend the System; provided however, that if there should be any deficit in the Operation and Maintenance Account, the Redemption Account including the Bond Reserve Subaccount or the Junior Lien Redemption Account including the 2023 Junior Lien Bond Reserve Subaccount, then deposits of surplus moneys shall be made to such accounts in the priority and order named to the extent of any such deficit.
SECTION 15. DEPOSITARY AND FUNDS ON HAND. Moneys in the several accounts of the System established pursuant to this Ordinance and moneys derived from the proceeds of the sale of the Series 2023 Bonds shall be deposited with a bank, savings and loan association, or credit union designated by resolution of the Council. Moneys in the several accounts, except moneys in the Redemption Account (including the Bond Reserve Subaccount) and Junior Lien Redemption Account (including the 2023 Junior Lien Bond Reserve Subaccount) and moneys derived from the proceeds of the sale of the Series 2023 Bonds, may be kept in one account at a bank, savings and loan association or credit union; provided that the moneys in the account shall be allocated on the books and records of the Village in the manner provided in this Ordinance. The moneys in the Redemption Account (including the Bond Reserve Subaccount) and the Junior Lien Redemption Account (including the 2023 Junior Lien Bond Reserve Subaccount) and moneys derived from the proceeds of the sale of the Series 2023 Bonds shall each be kept in a separate depository account.
SECTION 16. PRIORITY OF ACCOUNTS. In the event the moneys in the Receiving Account are insufficient to provide for the current requirements of the Operation and Maintenance Account, the Redemption Account or the Junior Lien Redemption Account, any moneys or securities in other funds of the System, except the proceeds of the sale of the Series 2023 Bonds, shall be credited or transferred, first, to the Operation and Maintenance Account, second, to the Redemption Account, and third, to the Junior Lien Redemption Account, to the extent of any deficit therein.
SECTION 17. INVESTMENTS. Moneys in the accounts established herein and moneys derived from the proceeds of the sale of the Series 2023 Bonds may be invested by the Village in accordance with the Village’s investment policy adopted by the Council pursuant to Act 20, Public Acts of Michigan, 1943, as amended. Profit realized or interest income earned on investment of funds in the Receiving Account, the Operation and Maintenance Account, the Redemption Account, the Junior Lien Redemption Account and the Repair and Replacement Account shall be deposited in or credited as received to the Receiving Account.
SECTION 18. SERIES 2023 BOND PROCEEDS. The proceeds of the sale of the Series 2023 Bonds shall be used solely to pay the cost of the 2023 Project and any engineering, legal and other expenses incident thereto, and shall be paid out only upon authorization of the Council; provided that the Council shall not authorize the payment of any such moneys for acquisition and construction of the 2023 Project until there shall have been first filed with it by the consulting engineer in charge of such work, a written statement to the effect that the sum so to be paid is in full or partial payment of a contractual obligation in connection with the 2023 Project and that the Village has received the consideration for such payment. The statement of the consulting engineer shall also show the cost of acquisition and construction of the 2023 Project that has theretofore been approved by him for payment and the amount of the balance that will be required for completion of the 2023 Project.
SECTION 19. SERIES 2023 BOND FORM. The Series 2023 Bonds shall be in substantially the following form, with such changes and additions as shall be required by the purchaser and approved by the President and the Clerk, with such approval to be evidenced by their manual signatures thereon:
UNITED STATES OF
AMERICA
STATE OF MICHIGAN
COUNTY OF ST. CLAIR
VILLAGE OF CAPAC
SEWAGE DISPOSAL
SYSTEM JUNIOR LIEN
REVENUE BOND,
SERIES 2023
No. 1 $_______
The Village of Capac, County of St. Clair, State of Michigan (the “Village”), acknowledges itself indebted to, and for value received, hereby promises to pay to the Registered Owner the sum of_______Dollars ($________) on the dates and in the amounts set forth on Exhibit A, attached hereto and made a part hereof, with interest on such principal sum from the date each principal payment is received by the Village as set forth on the Registration Grid of this bond at the rate of ____ and __/100 percent (____%) per annum, payable on the first days of________ and _________ of each year commencing on _________ 1, 20__. Principal and interest shall be payable in lawful money of the United States of America and shall be paid through an electronic payment process acceptable to the Registered Owner or by check or draft mailed to the Registered Owner at the address shown on the Registration Grid.
This bond is issued pursuant to an ordinance duly adopted by the Village Council of the Village on _________, 2023 (the “Ordinance”), and under and in full compliance with the Constitution and statutes of the State of Michigan, including specifically Act 94, Public Acts of Michigan, 1933, as amended, for the purpose of paying the cost of acquiring, constructing and installing improvements to the sewage disposal system of the Village (the “System”). The System includes sanitary sewers, combined sanitary and storm sewers, plants, works, instrumentalities, and properties used or useful in connection with the collection, treatment, or disposal of sewage or industrial wastes, as the same now exist, together with all additions, extensions, repairs and improvements thereto hereafter acquired.
This bond is a self-liquidating bond and is not a general obligation of the Village and does not constitute an indebtedness of the Village within any constitutional, statutory or charter limitation, but is payable, both as to principal and interest, solely from the net revenues of the System, including all appurtenances, extensions and improvements thereto, after provision has been made for reasonable and necessary expenses of operation, maintenance and administration (the “Net Revenues”). The principal of and interest on this bond are secured by a statutory lien on the Net Revenues. The bonds of this series shall have equal standing with any additional junior lien bonds that may be issued pursuant to the Ordinance. Additional bonds of superior standing to the bonds of this series may be issued pursuant to the Ordinance.
For a complete statement of the revenues from which and the conditions under which this bond is payable, a statement of the conditions under which additional bonds of equal or superior standing may hereafter be issued, the rights and limitations on the owner of this bond and the general covenants and provisions pursuant to which this bond is issued, reference is made to the Ordinance.
The Village has covenanted and agreed, and does hereby covenant and agree to fix and maintain at all times while any bonds payable from the Net Revenues of the System shall be outstanding, such rates for service furnished by the System as shall be sufficient to provide for payment of the principal of and interest on this bond and any other bonds payable from the Net Revenues as and when the same shall become due and payable, and to maintain a bond and interest redemption account and a bond reserve subaccount therefor, to provide for the payment of expenses of administration and operation and such expenses for maintenance of the System as are necessary to preserve the same in good repair and working order, and to provide for such other expenditures and funds for the System as are required by the Ordinance.
This bond shall be registered as to principal and interest, as provided in the Ordinance, in the name of the owner upon the books of the Village kept for that purpose by the Village Treasurer as bond registrar and paying agent, and such registration shall be noted on the Registration Grid. This bond may be transferred only by submitting the same, together with a written instrument of transfer satisfactory to the bond registrar and paying agent duly executed by the Registered Owner or his attorney duly authorized in writing, to the bond registrar and paying agent for registration in the name of the transferee on the registration books and for notation of such registration on the Registration Grid. This bond may not be transferred less than five (5) days prior to an interest payment date.
Principal installments may be prepaid prior to maturity without premium and in such order as shall be determined by the Village on any one or more dates other than on a Saturday, Sunday or holiday. Principal installments that have been prepaid shall be noted on Exhibit A and such installments no longer shall be considered outstanding for any purpose. Thirty days’ notice of prepayment shall be given to the Registered Owner by mail to the address shown on the Registration Grid.
It is hereby certified, recited and declared that all acts, conditions and things required to exist, happen and be performed precedent to and in the issuance of this bond existed, have happened and have been performed in due time, form and manner as required by law, and that the total indebtedness of the Village, including this bond, does not exceed any constitutional, statutory or charter limitation.
IN WITNESS WHEREOF, the Village of Capac, County of St. Clair, State of Michigan, by its Village Council, has caused this bond to be executed in its name by the manual signatures of its President and its Clerk, all as of the date set forth below.
VILLAGE OF CAPAC
By: Debra Hlubic
Its President
By: LeAnn Brewer
Its Clerk
Dated: July 21, 2023
EXHIBIT A
VILLAGE OF CAPAC
SEWAGE DISPOSAL SYSTEM JUNIOR LIEN REVENUE BOND, SERIES 2023__
Due ______ 1
YEAR PRINCIPAL AMOUNT
2024 2044
2025 2045
2026 2046
2027 2047
2028 2048
2029 2049
2030 2050
2031 2051
2032 2052
2033 2053
2034 2054
2035 2055
2036 2056
2037 2057
2038 2058
2039 2059
2040 2060
2041 2061
2042 2062
2043 2063
REGISTRATION GRID
VILLAGE OF CAPAC
SEWAGE DISPOSAL SYSTEM JUNIOR LIEN REVENUE BOND, SERIES 2023__
NOTHING TO BE
WRITTEN HEREON
EXCEPT BY BOND REGISTRAR AND PAYING AGENT
Date:____________
Principal Amount Received: ________________
Name and Address
of Registered Owner:
United States of America
Signature:__________________
END OF BOND FORM
SECTION 20. SALE, ISSUANCE, DELIVERY, TRANSFER AND EXCHANGE OF SERIES 2023 BONDS. The Series 2023 Bonds shall be sold to and registered in the name of the United States of America acting through Rural Development in furtherance of the Program. This Council determines that the Program and the delivery of the Series 2023 Bonds directly to the United States of America as provided in this Ordinance will provide the Village with the lowest costs of borrowing for the 2023 Project. The President is authorized to execute an order approving the final terms and conditions of the Series 2023 Bonds within the parameters set forth in this Ordinance. The President, the Clerk, the Treasurer and other Village employees and officials are authorized to execute and deliver such certificates and documents as bond counsel shall require and to do all other things necessary to effectuate the sale, issuance, delivery, transfer and exchange of the Series 2023 Bonds in accordance with the provisions of this Ordinance, including without limitation the execution and delivery of a grant agreement with Rural Development.
SECTION 21. NO DEFEASANCE. The Village hereby covenants and agrees that it will not defease this Ordinance with respect to the Series 2023 Bonds so long as the registered owner of the Series 2023 Bonds is the United States of America or any agency or department thereof.
SECTION 22. REPLACEMENT OF BONDS. Upon receipt by the Clerk of proof of ownership of an unmatured Bond, of satisfactory evidence that the Bond has been lost, apparently destroyed or wrongfully taken and of security or indemnity which complies with applicable law and is satisfactory to the Clerk, the Clerk may authorize the bond registrar and paying agent to deliver a new executed Bond to replace the Bond lost, apparently destroyed or wrongfully taken in compliance with applicable law. In the event an outstanding matured Bond is lost, apparently destroyed or wrongfully taken, the Clerk may authorize the bond registrar and paying agent to pay the Bond without presentation upon the receipt of the same documentation required for the delivery of a replacement Bond. The bond registrar and paying agent, for each new Bond delivered or paid without presentation. as provided above, shall require the payment of expenses, including counsel fees, which may be incurred by the bond registrar and paying agent and the Village in the premises. Any Bond delivered pursuant the provisions of this Section in lieu of any Bond lost, apparently destroyed or wrongfully taken shall be of the same form and tenor and series and be secured in the same manner as the Bond in substitution for which such Bond was delivered.
SECTION 23. COVENANTS. The Village hereby covenants and agrees with the registered owners, from time to time, of the Series 2023 Bonds herein authorized to be issued, that it will punctually perform all duties with reference to the System and the Series 2023 Bonds required by the Constitution and laws of the State of Michigan and by this Ordinance; that it will not sell, lease, mortgage or in any manner dispose of the System or any substantial part thereof, until all Series 2023 Bonds shall have been paid in full; and that it will not, to the extent permitted by law, permit any person, firm or corporation to compete with it in the furnishing of sewage disposal services to premises within its corporate limits. The Village further covenants and agrees with the registered owners of the Series 2023 Bonds that it will maintain the System in good condition and operate the same in an efficient manner and at a reasonable cost, so long as the Series 2023 Bonds are outstanding; that it will maintain insurance on the System for the benefit of the registered owners of the Series 2023 Bonds in an amount which usually would be carried by private companies engaged in a similar type of business; that it will prepare, keep and file such records, statements and accounts as may be required by Act 94; and that it will furnish a copy of the foregoing statements and the annual audit of the System prepared by a certified public accountant to the registered owner of the Series 2023 Bonds.
SECTION 24. ADDITIONAL JUNIOR LIEN BONDS. In accordance with the provisions of Act 94, the right is reserved to issue Additional Junior Lien Bonds payable from the Revenues of the System that shall be of equal standing and priority of lien on the Net Revenues of the System with the Series 2023 Bonds for the acquisition and construction of repairs, enlargements, extensions, additions and improvements to the System, for refunding all or a part of any outstanding Junior Lien Bonds or any other debt incurred by the Village for any purpose for which Junior Lien Bonds may be issued hereunder, for paying costs of issuing such Additional Junior Lien Bonds and for payment of interest on such Additional Junior Lien Bonds. Additional Junior Lien Bonds for such purposes shall not be issued unless the actual or augmented (as hereinafter detailed in this Section) Net Revenues of the System for the then last preceding audited Fiscal Year shall be equal to the sum of (i) at least 110% of the Maximum Annual Debt Service on any outstanding Senior Lien Bonds and (ii) at least 100% of the Maximum Annual Debt Service on any outstanding Junior Lien Bonds and Additional Junior Lien Bonds then being issued. If the Additional Junior Lien Bonds are to be issued in whole or in part for refunding of outstanding Junior Lien Bonds, the annual principal and interest requirements shall be determined by deducting from the principal and interest requirements for each Fiscal Year the annual principal and interest requirements of any Junior Lien Bonds to be refunded from the proceeds of the Additional Junior Lien Bonds. For purposes of this Section, the Village may elect to use as the last preceding Fiscal Year any Fiscal Year ending not more than sixteen months prior to the date of delivery of the Additional Junior Lien Bonds for which an audit is available. If any change in the rates, fees or charges of the System shall be authorized at or prior to the time of the ordinance authorizing the sale of any Additional Junior Lien Bonds, the Net Revenues for the preceding Fiscal Year shall be augmented by an amount reflecting the effect of such change had the System’s billings during such Fiscal Year been at the adopted rates. In addition, the actual Net Revenues for the preceding Fiscal Year may be augmented by 70% of the estimated increase in Net Revenues to accrue as a result of the acquisition and construction of the repairs, enlargements, extensions, additions and improvements to the System to be paid for in whole or in part from the proceeds of the Additional Junior Lien Bonds and 100% of the increase in Net Revenues resulting from any repair, enlargement, extension, addition or improvement that was made subsequent to the end of the last audited Fiscal Year. Determination by the Council as to existence of conditions permitting the issuance of Additional Junior Lien Bonds shall be conclusive. No Additional Junior Lien Bonds of equal standing with the Series 2023 Bonds as to the Net Revenues of the System shall be issued pursuant to the authorization contained in this Section if the Village shall then be in default in making its required payments to any accounts created hereunder.
SECTION 25. SENIOR LIEN BONDS. In accordance with the provisions of Act 94, the right is reserved to issue Senior Lien Bonds payable from the Revenues of the System that shall be of superior standing and priority of lien on the Net Revenues of the System with the Series 2023 Bonds and any Additional Junior Lien Bonds for the acquisition and construction of repairs, enlargements, extensions, additions and improvements to the System, for refunding all or a part of any outstanding Senior Lien Bonds or any other debt incurred by the Village for any purpose for which Senior Lien Bonds may be issued hereunder, for paying costs of issuing such Senior Lien Bonds including deposits, if any, to be made to the Bond Reserve Subaccount, and for payment of interest on such Senior Lien Bonds. Senior Lien Bonds for such purposes shall not be issued unless the actual or augmented (as hereinafter detailed in this Section) Net Revenues of the System for the then last preceding audited Fiscal Year shall be equal to the sum of (i) at least 110% of the Maximum Annual Debt Service on any outstanding Senior Lien Bonds and additional Senior Lien Bonds then being issued and (ii) at least 100% of the Maximum Annual Debt Service on any outstanding Junior Lien Bonds. If the Senior Lien Bonds are to be issued in whole or in part for refunding of outstanding Senior Lien Bonds, the annual principal and interest requirements shall be determined by deducting from the principal and interest requirements for each Fiscal Year the annual principal and interest requirements of any Senior Lien Bonds to be refunded from the proceeds of the additional Senior Lien Bonds. For purposes of this Section, the Village may elect to use as the last preceding Fiscal Year any Fiscal Year ending not more than sixteen months prior to the date of delivery of the Additional Junior Lien Bonds for which an audit is available. If any change in the rates, fees or charges of the System shall be authorized at or prior to the time of the ordinance authorizing the sale of any Senior Lien Bonds, the Net Revenues for the preceding Fiscal Year shall be augmented by an amount reflecting the effect of such change had the System’s billings during such Fiscal Year been at the adopted rates. In addition, the actual Net Revenues for the preceding Fiscal Year may be augmented by 70% of the estimated increase in Net Revenues to accrue as a result of the acquisition and construction of the repairs, enlargements, extensions, additions and improvements to the System to be paid for in whole or in part from the proceeds of the Senior Lien Bonds and 100% of the increase in Net Revenues resulting from any repair, enlargement, extension, addition or improvement that was made subsequent to the end of the last audited Fiscal Year. Determination by the Council as to existence of conditions permitting the issuance of Senior Lien Bonds shall be conclusive. No Senior Lien Bonds of superior standing to the Series 2023 Bonds and any Additional Junior Lien Bonds as to the Net Revenues of the System shall be issued pursuant to the authorization contained in this Section if the Village shall then be in default in making its required payments to any accounts created hereunder.
SECTION 26. SEVERABILITY; SECTION HEADINGS. If any section, paragraph or clause or provision of this Ordinance shall be held invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the other provisions of this Ordinance. The section headings in this Ordinance are furnished for convenience of reference only and shall not be considered part of this Ordinance.
SECTION 27. OPERATING AND FISCAL YEAR. The System shall be operated on the basis of an operating and fiscal year commencing on July 1 and ending on the following June 30.
SECTION 28. PUBLICATION AND RECORDATION. This Ordinance shall be published promptly after its adoption as required by law, including publication in full once in a newspaper of general circulation in the Village.
SECTION 29. CONFLICTING ORDINANCES. All ordinances and parts of ordinances insofar as they may be in conflict herewith are hereby rescinded.
SECTION 30. EFFECTIVE DATE. This Ordinance shall be effective immediately upon its adoption.
ORDINANCE DECLARED ADOPTED.
YEAS: Herrington, Hlubic, Klug, Mandeville, Nemecek, Ramirez
NAYS: None Adopted on July 21, 2023.
VILLAGE OF CAPAC
By: Debra Hlubic
President
And: LeAnn Brewer
Clerk
STATE 0F MICHIGAN
COUNTY OF ST. CLAIR)
I hereby certify that the foregoing constitutes a true and complete copy of an ordinance duly adopted by the Village Council of the Village of Capac, St. Clair County, Michigan, at a special meeting held on July 21, 2023, the original of which ordinance is on file in my office. I further certify that notice of the meeting was given in accordance with the Open Meetings Act.
LeAnn Brewer
Clerk, Village of Capac
30-1
