36 Thursday, August 8, 2024 BATTLE CREEK SHOPPER NEWS http://www.thebattlecreekshopper.com
CITY OF SPRINGFIELD
ORDINANCE NUMBER 01 OF 2024
WATER SUPPLY SYSTEM REVENUE BOND ORDINANCE
AN ORDINANCE TO PROVIDE FOR THE ACQUISITION AND CONSTRUCTION OF IMPROVEMENTS
TO THE WATER SUPPLY SYSTEM OF THE CITY OF SPRINGFIELD; TO PROVIDE FOR THE ISSUANCE
OF REVENUE BONDS; TO PRESCRIBE THE FORM OF THE REVENUE BONDS; TO PROVIDE FOR THE
COLLECTION OF REVENUES FROM THE SYSTEM SUFFICIENT FOR THE PURPOSE OF PAYING THE
COSTS OF OPERATION AND MAINTENANCE OF THE SYSTEM AND TO PAY THE PRINCIPAL OF AND
INTEREST ON THE REVENUE BONDS; TO PROVIDE FOR SECURITY FOR THE REVENUE BONDS; TO
PROVIDE FOR THE SEGREGATION AND DISTRIBUTION OF THE REVENUES; TO PROVIDE FOR THE
RIGHTS OF THE HOLDERS OF THE REVENUE BONDS IN ENFORCEMENT THEREOF; AND TO PROVIDE
FOR OTHER MATTERS RELATING TO THE REVENUE BONDS AND THE SYSTEM.
THE CITY OF SPRINGFIELD ORDAINS:
SECTION 1. Definitions. Whenever used in this Ordinance, except when otherwise indicated by the context, the
following terms when capitalized shall have the following meanings:
(a) “Act 94” means Act 94, Public Acts of Michigan, 1933, as amended.
(b) “Additional Revenue Bonds” means Revenue Bonds, including Revenue Bonds of prior and senior or equal standing
and priority of lien with the Series 2024 Bonds, issued under Section 20 of this Ordinance.
(c) “Adjusted Net Revenues” means for any operating year the excess of revenues over expenses for the System
determined in accordance with generally accepted accounting principles, to which shall be added depreciation,
amortization, interest expense on Bonds and payments to the City in lieu of taxes, to which may be made the following
adjustments.
(i) Revenues may be augmented by the amount of any rate increases adopted prior to the issuance
of Additional Revenue Bonds or to be placed into effect before the time principal or interest on the
Additional Revenue Bonds becomes payable from Revenues as applied to quantities of service furnished
during the operating year or portion thereof that the increased rates were not in effect.
(ii) Revenues may be augmented by amounts which may be derived from rates and charges to be paid
(a) as a result of new customers who have been identified by an agreement to purchase service
from the System who had not been serviced during the preceding twelve months or (b) as a result
of any other new customer or expansion of service to any existing customers or (c) as a result of
potential customers which exist in a new service area who will be serviced by the acquisition of the
repairs, extensions, enlargements and improvements to said System which have been made during the
preceding twelve months or which will be acquired in whole or in part from the proceeds of Additional
Revenue Bonds.
(iii) If there is a bond reserve account to be funded from the proceeds of Additional Revenue Bonds, then
the Revenues may be augmented by an amount equal to the investment income representing interest on
investments estimated to be received each operating year from the addition to the bond reserve account
to be funded from the proceeds of the Additional Revenue Bonds being issued.
The adjustment of revenues and expenses by the factors set forth in (i), (ii) and (iii) above shall be reported upon
by professional engineers or certified public accountants or other experts not in the regular employment of the City.
(d) “Authorized Officer” means the City Manager, Mayor, Clerk, or Finance Director/ Treasurer of the City.
(e) “Bonds” means any Bonds which may be issued by the City for the purpose of making repairs, extensions,
enlargements and improvements to the System, for the payment of which the City intends to use Net Revenues.
(f) “City” means the City of Springfield, County of Calhoun, State of Michigan.
(g) “DWSRF Program” means the State of Michigan Drinking Water State Revolving Fund (DWSRF) Program which is
co-administered by EGLE and the Michigan Finance Authority.
(h) “EGLE” means the Michigan Department of Environment, Great Lakes and Energy, or any successor agency which
administers loans from the DWSRF Program.
(i) “Michigan Finance Authority” means the Michigan Finance Authority created within the Michigan Department of
Treasury, or any successor agency which administers loans from the DWSRF Program
(j) “Ordinance” refers collectively to this ordinance, and any other ordinance amendatory to or supplemental to this
Ordinance.
(k) “Outstanding Revenue Bonds” means, as of any given date, the Series 2024 Bonds and any Additional Revenue Bonds
of equal or prior standing hereafter issued and delivered under this Ordinance except:
(i) Bonds (or portions of Bonds) paid off at or prior to such date;
(ii) Bonds (or portions of Bonds) for the payment or redemption of which moneys or Sufficient Government
Obligations equal to the principal amount or redemption price, as the case may be, with interest to the
date of maturity or redemption date, shall be held in trust under this Ordinance and set aside for such
payment or redemption (whether at or prior to the maturity or redemption date) provided that if such
Bonds are to be redeemed, notice of such redemption shall have been given as provided in the Bond or
provision shall have been made for the giving of such notice; and
(iii) Bonds in lieu of or in substitution for which other Bonds shall have been delivered.
(l) “Revenue Bonds” means, as of any given date, the Series 2024 Bonds and any Additional Revenue Bonds of equal or
prior standing hereafter issued and delivered under this Ordinance.
(m) “Revenues” and “Net Revenues” mean the revenues and net revenues of the System and shall be construed as defined
in Section 3 of Act 94, including with respect to “Revenues” the earnings derived from the investment of moneys in the
various funds and accounts established by this Ordinance, and other revenues derived from or pledged to operation of
the System.
(n) “Series 2024 Bonds” means the Water Supply System Revenue Bond, Series 2024A issued pursuant to this Ordinance.
(o) “Series 2024 Project” means the acquisition, construction, furnishing and equipping of improvements to the Water
Supply System of the City, including replacements of water mains, lead service lines, and pressure relief valves,
together with all necessary interests in land and all related sites, equipment, appurtenances and attachments
thereto, together with all necessary interests in land and all related sites, structures, equipment, appurtenances and
attachments thereto.
(p) “Sufficient Government Obligations” means direct obligations of the United States of America or obligations the
principal and interest on which is fully guaranteed by the United States of America, not redeemable at the option of
the issuer, the principal and interest payments upon which, without reinvestment of the interest, come due at such
times and in such amounts as to be fully sufficient to pay the interest as it comes due on the Bonds and the principal
and redemption premium, if any, on the Bonds as it comes due whether on the stated maturity date or upon earlier
redemption. Securities representing such obligations shall be placed in trust with a bank or trust company, and if any
Bond is to be called for redemption prior to maturity, irrevocable instructions to call the Bond for redemption shall be
given.(q) “System” means the entire Water Supply System of the City including the facilities acquired and constructed with
the proceeds of the Series 2024 Bonds, and such other facilities as are now existing including all appurtenances,
enlargements, extensions, repairs and improvements thereto hereafter made.
SECTION 2. Necessity; Approval of Plans and Specifications. It is hereby determined to be a necessary public purpose
of the City to acquire and construct the Series 2024 Project in accordance with the plans and specifications prepared by the City’s
consulting engineers, which plans and specifications are hereby approved.
SECTION 3. Costs; Useful Life. The cost of the Series 2024 Project is estimated to be not-to-exceed Seven Million
One Hundred Forty Thousand Dollars ($7,140,000), which estimate of cost is hereby approved and confirmed. The estimated cost
of the Series 2024 Project includes the payment of incidental expenses as specified in Section 4 of this ordinance. The period of
usefulness of the Series 2024 Project is estimated to be not less than 30 years. The Series 2024 Drinking Water Project qualifies
for the DWSRF Program being administered by EGLE and the Michigan Finance Authority, whereby bonds of the City are sold to the
Michigan Finance Authority and bear interest at a fixed rate not-to-exceed 2.00% per annum to evidence a loan for a portion of the
project cost. In addition the City expects to receive grant funding of $3,533,250 for the project cost from the American Rescue Plan
administered by the DWSRF Program.
SECTION 4. Payment of Project Cost; Series 2024 Bonds Authorized. To pay a portion of the cost of acquiring and
constructing the Series 2024 Project, including payment of legal, engineering, financial and other expenses incident thereto and
incident to the issuance and sale of the Series 2024 Bonds, the City shall borrow a sum of not-to-exceed Seven Million One Hundred
Forty Thousand Dollars ($7,140,000), as finally determined at the time of sale of the Series 2024 Bonds, and issue its Series 2024
Bonds pursuant to the provisions of Act 94. The remaining cost of the Series 2024 Project shall be defrayed from grant monies and
City funds on hand legally available for such use.
SECTION 5. Issuance of Series 2024 Bonds; Details. The Series 2024 Bonds shall be designated as the “WATER
SUPPLY SYSTEM REVENUE BONDS, SERIES 2024A.” The Series 2024 Bonds shall be payable primarily out of the Net Revenues and
other moneys pledged under this Ordinance, and shall not be a general obligation of the City.
The Series 2024 Bonds shall be issued in the form of a single fully-registered, nonconvertible bond, dated as of the
date of delivery, payable in annual principal installments on April 1 or October 1 on such dates as finally determined at the time of
sale of the Series 2024 Bonds but in any event not-to-exceed 30 annual installments. Final determination of the Principal Amount and
the payment dates and amounts of principal installments of the Series 2024 Bonds shall be evidenced by execution of a Purchase
Contract (the “Purchase Contract”) between the City and the Michigan Finance Authority providing for sale of the Series 2024 Bonds,
and an Authorized Officer is authorized and directed to execute and deliver the Purchase Contract.
The Series 2024 Bonds shall bear interest at a rate or rates to be determined by an Authorized Officer at the time of
execution of the Purchase Contract, but in any event not exceeding the maximum amount permitted by law, payable semiannually
on such dates as determined in the Purchase Contract In addition, if required by the Michigan Finance Authority, the Series 2024
Bonds will bear additional interest, under the terms required by Michigan Finance Authority, in the event of a default by the City in
the payment of principal or interest on the Series 2024 Bonds when due. The principal amount of the Series 2024 Bonds is expected
to be drawn down by the City periodically, and interest on each installment of the principal amount shall accrue from the date such
principal installment is drawn down by the City. Principal installments of the Series 2024 Bonds will be subject to prepayment prior
to maturity as permitted by the Michigan Finance Authority and approved by an Authorized Officer.
The Mayor and City Clerk are authorized to execute the Series 2024 Bonds by manual or facsimile signature. At least
one signature on the Series 2024 Bonds shall be a manual signature. The Series 2024 Bonds may be transferred by the bondholder
as provided in the Series 2024 Bonds as executed.
SECTION 6. Payment of Series 2024 Bonds; Security. The Series 2024 Bonds and the interest thereon shall be payable
primarily from the Net Revenues, and to secure such payment, there is hereby created a statutory lien upon the whole of the Net
Revenues which shall continue until payment in full of the principal of and interest on the Series 2024 Bonds, or, until sufficient cash
or Sufficient Government Obligations have been deposited in trust for payment in full of the principal of and interest on the Series
2024 Bonds to maturity, or, if called for redemption, to the date fixed for redemption, together with the amount of the redemption
premium, if any. Upon deposit of cash or Sufficient Government Obligations, as provided in the previous sentence, the statutory lien
shall be terminated with respect to the Series 2024 Bonds, the holder of the Series 2024 Bonds shall have no further rights under this
Ordinance except for payment from the deposited funds, and the Series 2024 Bonds shall be considered to be defeased and shall no
longer be considered to be outstanding under this Ordinance.
SECTION 7. State Revenue Sharing Pledge. To the extent necessary to meet the requirements of the DWSRF Program,
as additional security for repayment of the Series 2024 Bonds, the City hereby pledges the taxes collected by the State of Michigan and
returned to the City pursuant to Act 140, Public Acts of Michigan, 1971, as amended, to the Michigan Finance Authority as purchaser
and holder of the Series 2024 Bonds. The City hereby authorizes the Authorized Officers to approve, execute and deliver a Revenue
Sharing Pledge Agreement between the City and the Michigan Finance Authority which authorizes the State Treasurer to transmit the
revenue sharing moneys assigned and pledged therein directly to the Michigan Finance Authority or its designee if payments on the
Series 2024 Bonds are not made in accordance with this Ordinance. The City shall be reimbursed for any such advance from the Net
Revenues of the System subsequently received which are not otherwise pledged or encumbered by this Ordinance.
SECTION 8. Bondholders’ Rights; Receiver. The holder or holders of the Revenue Bonds representing in the aggregate
not less than twenty percent (20%) of the entire principal amount of Outstanding Revenue Bonds, may, by suit, action, mandamus or
other proceedings, protect and enforce the statutory lien upon the Net Revenues of the System, and may, by suit, action, mandamus
or other proceedings, enforce and compel performance of all duties of the officers of the City, including the fixing of sufficient rates,
the collection of Revenues, and the proper segregation and application of the Revenues of the System. The statutory lien upon the Net
Revenues, however, shall not be construed as to compel the sale of the System or any part of the System.
If there is a default in the payment of the principal of or interest on the Revenue Bonds, any court having jurisdiction
in any proper action may appoint a receiver to administer and operate the System on behalf of the City 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 City more particularly set forth
herein and in Act 94.
The holder or holders of the Revenue Bonds shall have all other rights and remedies given by Act 94 and law, for the
payment and enforcement of the Revenue Bonds and the security therefor.
SECTION 9. Management; Operating Year. The operation, repair and management of the System and the acquisition
and construction of the Series 2024 Project shall continue to be under the supervision and control of the City Council. The City
Council may employ such person or persons in such capacity or capacities as it deems advisable to carry on the efficient management
and operation of the System. The City Council may make such rules and regulations as it deems advisable and necessary to assure
the efficient management and operation of the System. The System shall be operated on the basis of an operating year which shall
coincide with the City’s fiscal year.
SECTION 10. 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,
including the City.