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CCR1970000PROSPECTUS MUNICIPAL BONDS FURTHER INFORMATION MAY BE OBTAINED FROM EHLERS AND ASSOCIATES, INC. FINANCIAL CONSULTANTS FIRST NATIONAL-SO0 LINE CONCOURSE - 507 MARQUETTE AVENUE MINNEAPOLIS, MINNESOTA 55402 - 339-8291 (AREA CODE 612) RESOLUTION #43-70 RESOLUTION AUTHORIZING THE SEEKING OF INVITATIONS TO SUBMIT PROPOSALS FOR VARIOUS BANKING SERVICES e WHEREAS the Common Council of the City of Muskego has had a financial plan prepared for the financing of various municipal projects; and WHEREAS it is necessary and convenient that the City of Muskego use extensive banking services for the completion of all or part of these projects; and Muskego; and WHEREAS there are three banks within the boundaries of the City of WHEREAS it is convenient that only one bank be selected to provide all the banking for the City NOW, THEREFORE BE IT RESOLVED that the City Clerk is hereby directed to cause an Invitation to Submit Proposals to be delivered to all banks located within the corporate boundaries of the City of Muskego. Said Invitation to Submit Proposals shall be in substantially the following form: INVITATION TO SUBMIT PROPOSAL FOR VARIOUS BANKING SERVICES FOR THE CITY OF MUSKEGO March 24, 1970 You are herewith invited to subillit a sealed offer to the City Clerk prior to to the City of Muskego as follows: 3:OO o'clock P.M., Tuesday, March 24, 1970 to provide various banking services 1. Serve as an official City depository from May 1, 1970 through April 30, 1971. 2. Provide one checking account for the City's general fund and one checking account for the City's sewer funds. 3. Issue Certificates of Deposit to the City from time to time at the direction of the City Clerk Controller. 4. From time to time between May 1, 1970 and April 1, 1971 lend to the City funds MILLION SIX HUNDRED FIFTY-FIVE THOUSAND DOLLARS provided the City duly issues for any legal municipal purpose, said loans in aggregate will not exceed ONE Wisconsin Statutes, said Notes, will mature in 1974, to be in substantially Promissory Notes for said loans under authority of Section 67.12(12), the following form: STATE OF WISCONSIN COUNTY OF WAUKESHA CITY OF MUSKEGO PROMISSORY NOTE FOR VALUE RECEIVED, the City of Muskego, Waukesha County, Wisconsin, promises to pay to the order ot , the sum of together with interest on the unpaid bal- ance thereof at the rate of terest to be payable semiannually on the first days of March and September in each year, commencing March 1, 1971. p?r annum, said in- Both principal hereof and interest hereof are hereby made payable in lawful money of the United States of America at the interest thereon as aforesaid, and the levying and collection of taxes suffi- cient for that purpose, the full faith, credit and resources of the City of Muskego are hereby irrevocably pledged. !disconsin, and for the prompt payment of this note, with e e This note is subject to prepayment in whole, or from time to time in part, at any interest payment date at the option of the City at the price of the par value of the prepayment then being made. Wisconsin Statutes, for the purpose of and is authorized by a resolution of the Common Council of the Citv. dulv adooteb This note is issued pursuant to the provisions of Section 67.12(12), by at least a two-thirds vote of the members-elect of said Comlnon icduncii at its meeting duly convened on , which resolution is recorded in the official book of its minutes for said date and is entitled, Resolution Authori- zing the Issuance of Promissory Note of the City of Muskego, Waukesha County, Wisconsin, Providing Details Thereof and Levying Taxes Therefor. It is hereby certified and recited that all conditions, things and acts required by law to exist or to be done prior to and in connection with the Issuance of this note have been done, have existed and /have been performed in due form and time; that the aggregate indebtedness of the City does not ex- ceed any limitation imposed by law or the Constitution of the State of Wisconsin; and that the City has levied a direct, annual, irrepealable tax sufficient to pay this note, together with interest thereon when and as payable. e right hereunder shall impair such right or be considered as a waiver thereof or as a waiver of or acquienscence in day default hereunder. No delay or ommission on the part of the holder hereof to exercise any IN WITNESS WHEREOF, the Common Council of the City of Muskego, Waukesha County, Wisconsin, has caused this note to be signed on the behalf of said City affixed, as of the - day of CITY OF MUSKEG0 By : By : City Clerk Mayor 5. From time to time between May 1, 1970 and April 1, 1971 lend to the City funds THREE HUNDRED EIGHT THOUSAND DOLLARS provided the City duly issues Promissory for any legal municipal purpose, said loans in aggregate will not exceed Notes for said loans under authority of Section 67.12(12), Wisconsin Statutes, said notes shall be in substantially the form as above but shall be payable in annual installments not to exceed 9, or may be issued in $5,000 denominations coupon bearing serial form at the request and expense of the bank The bank may require a legal opinion of counsel of its choice to be printed on the back of said notes at the expense of the bank. Maturity schedules for said notes each year after the second year to pay both principal and interest will be as shall be determined at the time of issue in a manner that the requirement nearly equal a~s practicable. Said notes shall not be subject to call or prepayment. 6. From time to time between July 1, 1970 and April 1, 1971, purchase from the City of Muskego its Assessment B bonds issued in various denominations or at the option of the City in $5,000 denominations in coupon bearing form as authorized in Section 66.54 Wisconsin Statutes as amended by Chapter 189, Laws of 1969, said bonds to be issued subject to the approving opinion of Quarles, Herriott, Clemons, Teschner, and Noelke, said bonds in aggregate shall not exceed ONE MILLION EIGHT HUNDRED THOUSAND DOLLARS. Said bonds will mature in equal annual installments with the latest maturity in 1982. * 2 7. Purchase from the City, Mortgage Revenue Bonds issued under Section 66.066 Wisconsin Statutes in Jn amount not to exceed EIGHT HUNDRED THOUSAND DOLLARS, subject to the approving opinion of Quarles, Herriott,Clemons, Tescher and Noel ke and conditions set forth in Ordinance #128, an Ordinance Providing For the Issuance and Sale of $320,000 Sewerage System Mortgage Revenue Bonds - of the City of Muskego, Waukesha County, Wisconsin and Providing for the Payment of Said Bonds and uther Details with respect thereto, as adopted October 25, 1968. . e 8. Purchase United States Tresury Bills as directed by the City Clerk Controller for the investment of City debt sinking funds as outlined in Section 67.11 Wisconsin Statutes. The best proposal shall be determined and the contract for banking services shall be awarded by the City Council after considering the following factors, to the bank which offers: A. The bank which agrees to purchase the greatest number of Assessment B bonds as outlined in 6 above and not to exceed ONE MILLION EIGHT HUNDRED THOUSAND DOLLARS par value. B. The bank which agrees to lend to the City the greatest amount of money as e outlined in 4 above not to exceed ONE MILLION SIX HUNDRED FIFTY FIVE THOU- SAND DOLLARS. a C. The bank which agrees to lend to the City the greatest amount of money under 5 above not to exceed THREE HUNDRED EIGHT THOUSAND DOLLARS. D. The bank which agrees to purchase from the City the greatest number of Mort- gage Revenue Bonds as outlined in 7 above not to exceed EIGHT HUNDRED THOU- an amount of $300,000 or more. SAND DOLLARS, but any offer to purchase Mortgage Revenue Bonds must be for E. The bank which offers the lowest interest rate for Assessment 3 bonds as outlined in 6 above. F. The bank which offers the lowest interest rate for Promissory Notes under 4 above. G. The bank which offers the lowest interest rate for Promissory Notes under 5 above. H. The bank which offers the lowest interest rate for Mortgage Revenue Bonds e as outlined in 7 above. I. The bank which offers to pay the highest rate of interest on Certificates of e Deposit of less than $lOD,DOO and less than 1 year maturity. J. The bank*which offers to pay the highest rate of interest on Certificates of K. The bank which offers to pay the highest rateof interest on Certificates of Deposit bh3l),000 or more for 30 to 59 day maturity. . - , .. Deposit of $100,000 or more for 60 to 89 days. L. The bank which offers to pay the highest rate of interest on Certificates of ~ep0si.t of $~O~,OOO or more for 90 to 179 days. M. The bank which offers to pay the highest rate of interest on Certificates of Deposit of $100,000 or Inore for 180 to 359 days. N. The bank which offers the lowest charges for checking accounts. The City reserves the right to reject all offers, but agrees to the following should an offer be accepted: (hereinafter, bank means the bank whose Offer is accepted) e A. All funds of the City that are not invested will be transferred to the Bank on or before May 1, 1970. E. All invested fu,nds of the City available for reinvestment Will be invested at the Bank as these investments mature after April 1, 1970. 3 C. All City funds available for short term investment, including borrowed capi- tal, will be invested in Certificates of Deposit at the Bank, except funds Statutes. required to be placed in sinking funds outlined in Section 67.11 Wisconsin Under Assessment B bonds outlined in 6 above the City a rees to maintain Statutes. The governing body of the City covenents to direct, the Treasurer of the City, to bid in and become exclusive purchaser of the Certificate underlying such delinquent special Assessment "B" bonds, as authorized in Section 66.54(11)(b) 6. The City covenents to create a sinking Fund for Special Assessment "E" Bonds as authorized in Section 66.54(15). The City will bear the expense of bond printing and the legal opinion. a special sinking fund authorized In sectlon 66.54(11)(bq 4, Wisconsin a E. Kortgage Revenue Bonds will be issued only under terms substantially similar to those provided in Ordinance #128 of the City, a copy of which is made part of this invitation, and only if all the tests and conditions of Section 9 of this Ordinance entitled Additional Bonds are met. The City will bear the cost of bond printing and the legal opinion. Attached hereto and made a part of this invitation is an official statement of estimates based upon the best available information and the time table is based the City based upon the latest available information. Projections of needs are upon factors believed to be reliable; however, these factors should be treated as estimates and amroximations and are sub.iect to chanae for any unforeseeable 0 circumstance. ~, , Adopted this 24 day of February. 1970 Mayor ATTEST : City Clerk Recorded this - day of February, 1970 City Clerk 4 OFFICIAL STATEMENT City of Muskego Waukesha County Wi sconsi n February 24, 1970 The following are cost estimates and status of all projects proposed for the City of Muskego. Industrial Park: The City holds options to purchase approximately 110 acres of property for in- dustrial park purposes. The City has contracted with James T. Barry Co.. of Milwaukee to assist in the resale of this property. Financing of the land pur- ' chase has been arranged through the issuance of promissory notes to the sellers and a 67.12( 12) promissory note to be consummated on or about March 2, 1970. The only portion of this project left to be financed is $500,000 for utility service and street construction. Of this amount only $250,000 is anticipated e to be needed between April 1, 1970 and April 1, 1971, and that the earliest any of these funds would be borrowed would be July 1, 1970. It is anticipated these funds will be needed in blocks of $50,000 on July 1, 1970, September 1, 1970, November 1, 1970, January 1, 1971 and March 1, 1971. Sewer Costs: The City of Muskego is under state order to extend its sewer system through most of its residential area. Ruekert and Mielke Inc. consulting engineers have made preliminary cost estimates on the majority of work now contemplated. There is increasing pressure from land owners and residents to expand the sewer service beyond the planned area. Total preliminary cost of sewers for the planned area is $5,729,223 which far exceeds the City's general obligation borrowing power reduce this figure approximately $1.350,000. Federal participation is being (currently $2,284,000). The City qualifies for ORAP participation which will sought for the temporary treatment plant which could reduce the figure by about $100,000. But even with these funds, financing a major portion of the sewer costs with assessment 8 bonds and mortgage revenue bonds is essential to the City. contemplated areas. A resolution acceptin engineer plans and calling a public Preliminary resolutions have been adopted by the Council to sewer the planned and hearing for an area to cost approximately ! 500,000 was adopted February 24. 1970. A similar resolution for a second area to cost approximately $650,000 is expected will be held in late summer and a fourth area of about $600,000 will be presented to follow in about 6 weeks. Hearings on a third area of approximately $650,000 0 about 6 weeks later. This pattern will be continued until all sewering is com- pleted. Temporary borrowing under part 4 of the Invitation to Submit Proposals for Banking the cost that is assessable will be spread as quickly as practical and a 30 day Services will be used to finance construction. Assessments for that portion of Assessment B bonds will be sold to cover assessments to be paid in installments. period will be allowed for property owners to pay their assessments in fur Of the first $1,964,223 of sewer work, $1,032,951 is assessable. It is estimated 20% of this might be paid in full leaving $825,760 to be financed with Assessment B bonds in three issues. the first to be in August, the second in September and the third in December. A fourth and fifth issue is anticipated in February and March 1371 for work in the second financing area with 81,630,000 of assessable cost. The first need fortemporary funds for sewers is anticipated for June when $50,000 will be required. $125.000 per month will be needed in July and from October 0 through February. e 1 5 Of the $5,729,223 of sewer costs, $2,066,272 is non-assessable. These costs will be financed with mortgage revenue bonds of $8DO,OOO. ORAP and federal funds. Should state and federal funds not be sufficient as planned, general obligation bonds will be sold for this portion. An initial resolution authorizing $1,500,000 general obligation bonds for sewers has had its first reading before the Councll and will be voted upon March 10, 1970. The following is an annual debt service and revenue projection based on the where sewer is now established, as reported by the engineer. This exhibit outstanding mortgage revenue bonds, sewer charge ordinance and available hookups demonstrates a revenue of the existing system which is more than sufficient to meet all requirements for mortgage revenue bonds outstanding. Each column on this chart represents .the following: 1. 2. 3. 4. 5. 6. 7. a. 9. 10. 11. 12. Year = Sewer debt service fiscal year - November 1 to October 31. Special Redemption Fund = Dollars needed to meet the principal will be paid from the reserve account. and interest due that year. Amounts due in 94/95 and part of 93/94 Reserve Account Fund = Dollars needed to meet the reserve account provision of the bond ordinance - $350 per month until $28,670 is reached. Total Annual Requirement = The sum of columns 2 and 3. Sin le Family Revenue = Projected revenue from homes based on ! 72 per year sewer charge and 418 hookups by 1971. A projected 25 new homes would be added per year until 1979. Last year, 66 single family dwelling building permits were issued by the Ci.ty. Commercial Revenue = The rate that applies to commercial and industrial property varies from $72 to $200. For this projection, a mean rate of $125 per connection per year was used assuming 46 units would be connected by 1971. School Revenue = This is based on 458 students in, an elemen- tary school, 220 students in a parochial school, 1,680 students in the high school and 600 students in the middle school at a rate of $4.48 per student per year. Vacant Lot Revenue = $18 per lot assuming 260 lots the first year and a conversion of 25 lots per year to residential use until 1971. Total Revenue = The sum of columns 5. 6. 7 and 8. 80% of Revenue = The bonds ordinance indicated 80% of gross revenues should be used for debt service. Surplus = The amount by which column 10 exceeds column 4. 130% Test = The bond ordinance requires that net sewer charges be at least 130% of the annual principal and interest requirement. This column represents the dollar amount of projected revenues that will exceed 130% of revenues after allowing 20% for operation, maintenance and depreciation. 6 a a e W NNNNNNNNNNNNNNNNNNNNNNNN- * mvI -I ao vlPvlmUa3&vlmUUWWCvlvlm---NNNWCD cmm ala -. nm 0 2 ."""""."".""""". mo~wvlmvl~~o~rwvlom-~uw~vlwoo CD~NUNUW~NPUNUNUNUPN~UPN~~ 33n N oooooowvlovlooooooovlovlovlo~vl -. - 0 NNNNNNNNNNNNNNNNNNNNNNNNN vlCvlmUW&~mUuWW&vlvl~--vlmmuUN c3-l ~ONWvl~vlNNOWCWWIO~-CUCCUONN ".3 0 c WONUNUWWNPUNUNUNUPNmUbNWW 7CR mmm oooooowvlovlooooooovloulovlovlvl m 3" 3 * n~ ~"""""""""""" 0 u, wwwwwwwwwwwwwwwwwwwwwwwww """"""""""""- mn z)v) vlvlvlvlvlvlvlvlvlvlvlvlvlvlvlvlvlvlvlvlvlvlvlvlvl NNNNNNNNNNNNNNNNNNNNNNNNN e5 30 c- 3m m- _.""".. "...""""."" 00 5. m 2 c IA """""""""_""" (0 a """""""""NNWWC&W vl m rm ,I OOOOOOOOOOOOOOOOvl~CWW~NWO lD WWWWWWWWWWWWWWWWWCDWW~~~~CD~ mnm w 3 0000000000000000000000000 za CR m VI con ." W< """"""""""" vlvlvlvlvlvlvl~vl~~~~~~vlN~m~--~w-~~-~= uuuuuuuuuuuuuuuuumuuuuuuw NNNNNNNNNNNNNNNNNUNUNUNU NNNNNNNNNNNNNNNNNNNN"" vlU~vlbNU~vl&wCDuuO~CCD~-wwu~vlCI, ""_"""""_""""" d d PROJECTION OF REVENUE FROM PROPOSED SEWER: . Financing a portion of the proposed sewer with mortgage revenue bonds is based upon the revmle ootential in the proposed area coupled with the projected surplus of the existing sewer system. e Each column of the chart represents the following: 1. Year = Sewer debt service year. 2. Single Family Revenue = Projected revenue from homes at $72 per year with 635 connecting in 1970 and 722 in 1971 and 25 new homes each year thereafter through 1979. 3. Comnercial Revenue = It is assumed 20 commercial establish- ments will connect in 1971. 4. School Revenue = It is assumed one school housing 340 students will connect in 1970 and another housing 750 students will connect in 1971. The annual rate used was $4.48 per student. 5. Vacant Lot Revenue It is assumed 214 vacant lots will be charged in 1970 and an additional 124 in 1971 with 25 lots less being charged each year through 1979 at $18 each. 6. Gross Revenue = The sum of columns 2, 3, 4 and 5. 7. 80% of Revenue = 80% of column 6. 8. Net Plus Surplus = Column 7 plus column 11 of Table I. Sewer Revenues from Existing System. a. YEAH SINGLE FAMILY REV 1 2 1970 45120 1911 97104 1972 99504 1973 101304 1Y74 103104 1975 104704 1976 10hIn4 1977 108504 197Y 112104 1980 112104 197n I IO~/I 9131 112 3133 112 932 1 12 994 1 I!? 7%5 112 786 112 9R7 1 I? 0 4 0 4 04 04 04 04 04 * 1 19x9 1 I? 104 1988 112104 1970 112104 1Y31 112IO4 ! 199% 112104 ' 1993 112104 1994 112104 Table I1 Sewer Revenues from Proposed System 3 4 5 6 7 8 C(3MMe SCHE)E)L VACENT GrtOSS 80 LOT HEV PERCENT I Net Plus 1 HEV. rcv. 000000 15 23 * 2 2500 4883.2 2500 4883.2 2500 4883.2 ?so0 4883.2 2500 4883.2 2500 4883.2 2s on mw 3.2 2500 /lRri3.2 2500 4iIH2.2 2500 4RR3.2 25 00 4138 3. 2 2500 4883.2 2500 Wi33.2 2sno 4883.2 2500 4883.2 2500 4883.2. 2500 4883.2 2500 4883.:! 2500 4883.2 2500 4XH3.2 FSOO 4~r53.2 25on 48~2.2 2500 4883.2 2500 4883.2 REV 3R52 5 6084 1 5634 1 5184 1' 4134 1 4284 I 2454 2484 2484 2484 2/1n 4 2 118 LI 2484 2484 . .. . REV. I Surplus 1 1 1 1 1 1 lllY21. 119211 * 1?06%l. l%lY'Il. 121971. l%l771. 121971 - 121911. 121911. 12.1971 121971 2197 2197 2197 !?I37 2197 2191 2197 2197 104,663 107,098 109,533 115,133 111,968 121,038 123,472 120,908 123,578 124,128 124,678 125,228 125,778 121.328 122,153 122,978 123.903 124.665 120,528 12 1,678 122,828 123.978 125,138 123,518 125.,000 8 The following maturity schedule for $800,000 mortgage revenue bonds produces an annual debt service requirement which is at least 130% of projected net revenues beyond the 1971 year. An interest rate of 7.8% and bidders discount of 816,000 was anticipated. The projected net revenues is as reported in table 11. Table I11 $800,000 Mortgage Revenue Bond Amortization Schedule -. . , YE AH 1 P 1971 1972 1973 1975 1974 1976 1977 1978 1979 I980 1981 1983 1982 1984 1985 1986 1987 1988 I9R9 1991 1990 1992 1993 1994 1995 1996 0 10000 10000 I5 000 15 000 15000 I5000 20000 20000 20000 20000 25 000 25000 30000 30000 35 000 35 000 40000 40000 45000 50000 5 0000 55000 60000 55 000 65000 P AND I .. . .. 62400.00 72 400 - 00 71620.00 75840.00 74670.00 73500.00 72330.00 76160.00 74600.00 73040 -00 71480.00 74920.00 72970.00 73680.00 76WO -00 76340.00 73610.00 75880 .OO 72760.00 74640 a00 76 130 -00 72P30.00 73330.00 74040 -00 59290.00 74360 -00 Projected Net Revenues i07.098 109;533 111,968 115,133 121,038 123,472 120,908 123.578 124; 128 124,678 125.228 125.778 121;328 122,153 122,978 123.903 124 ;665 120,528 12 1.678 122i828 123;978 125,138 123,518 125,000 125,000 125,000 Civic Center: A referendum on a $605,000 Civic Center and City Hall building will be placed on the ballot April 7, 1970. Assuming its adoption, permanent financing for this project will be accomplished with general obligation bonds sold sometime in 1971 together with other general obligation financing needed for sewer pur- part 4 of the Invitation to Submit Proposals. Park and Recreation: The City is ready to pick-up an option to purchase property for park purposes in an amount of $48,000. This will be financed with a note under Point 5 of the In- vitation to Submit Proposals at the earliest convenient date after acceptance of a proposal for banking services. This City is also negotiating to purchase a dredge to be used to clean lake will be needed in April. be financed with a note under part 5 of the Invitation to Submit Proposals, and Street Improvement: The City has a program to up-grade existing City streets of which $105.000 will be financed with notes under Dart 5 of the Invitation to Submit Proposals. This @ poses. Temporary financing of construction is anticipated with notes under bottoms in the preparation of bathing beaches at a cost of $80,000. This will e note will be consummated in May. 9 Sewer Treatment Plant Site: The City is planning to purchase a $75,000 site for a temporary sewer treatment plant which will be financed in April with a note under part 5 of the Invitation to Submit Proposals. Summary of Financing Needs: The.following chart sununariz es the need for borrowed funds for the period of Apnl 1, 1970 to April 1, 1971. ! , 10 * N 0 w 0 0 0 " 64 0 cn 0 0 0 c " 64 cn 0 0 0 0 " - c -4 cn 0 0 0 " e tft w 0 0 0 0 0 . tft cn 0 0 0 0 a - 64 N N cn 0 0 0 . 64 N U cn 0 0 0 " e 64 0, N cn 0 0 0 " 1 I * 0 64 N U cn 0 0 0 " 4Y-b W 0 0 0 0 m " tff c * rum cno 00 00 00 00 " I .L-? P .. cnm wo mo 00 00 00 "" * 0 N WPU owm 000 - ."" 0 000 O 0 0-ob *tt) c+- 00 mvl 00 00 00 * " 64 64 0 cn 0 0 0 ., 0 0 0 ifb I-J Urn VI0 00 0 5 00 0 00 0 Y in c 7 " 0 "" d 64 w 0 0 0 0 m 7 ID W h " 0 5 0 tt) tt) cno cn +, s + c 0 0 00 0 0 00 0 0 00 0 0 00 - " "1 zi 0 -h x c VI h m la * N tft cc N ON cn om 0 00 0 0 00 " "" 00 0 tt) N 2 2. tt) 3 cu b-c 3 3 9 0 0 z m m cc a N ON VI 64 N m om P 0 0 tft " I "I 0 0 0 0 00 00 0 0 00 * N cc 00 cn cn cn0 N u tt) 0 00 0 0 00 0 0 00 0 tn 64 N cc W 0 ON Lnm " .I I P 0 0 " I" ., 0 0 0 0 00 00 0 00 0 tfttt) e 0 0 0 cncn 00 00 "" " 5 0 00 0 00 tn c ifb c " ., W 0 0 0 0 0 01 NOI m 0 cn Ln cno 0 om 0 0 00 0 0 00 0 0 00 0 " " "I ORDINANCE #128 AN ORDINANCE PROVIDING FOR THE ISSUANCE AND SALE OF $320,000 SEWERAGE SYSTEM MORTGAGE REVENUE BONDS OF THE CITY OF AND PROVIDING FOR THE PAYMENT OF SAID BONDS MUSKEGO, WAUKESHA COUNTY, WISCONSIN AND OTHER DETAILS WITH RESPECT THERETO WHEREAS, the City of Muskego, Waukesha County, Wisconsin (hereinafter referred to as the "City"), now is authorized to own and operate its sewerage system, which shall be operated as a public utility (hereinafter referred to as the "System"); and WHEREAS, under the provisions of Chapter 66 of the Wisconsin Statutes any city in the State of Wisconsin may, by action of its governing body, provide for the construction of any public utility from the proceeds of bonds, which bonds are to be payable only from the income and revenues derived from the opera- tion of such System, and are to be secured by a statutory mortgage lien upon such System, and WHEREAS, it is now advisable and necessary that the System be con- structed to include three interrelated sewage stabilization ponds for treat- ment and disposal of sewerage; laterals, mains and interceptor sewers, and facilities and appurtenances necessary or convenient in conjunction therewith; and WHEREAS, for the purpose of paying the cost of such construction it is desired to authorize and sell mortgage revenue bonds of the City. payable solely from revenues to be derived from the operation of the System, which bonds are to be authorized and issued pursuant to the provisions of Section 66.066, Wisconsin Statutes; and WHEREAS, no obligation payable from the income and revenues derived from the operation of the System is outstanding and none of the property con- stituting any property of the System has been mortgaged or otherwise subjected to a security interest; NOW, THEREFORE, The Common Council of the City of Muskego, Waukesha County, Wisconsin. do ordain that: 12 Section 1. Authorization of Bonds. For the purpose of providing for the payment of the costs of constructing the System, together with the acquisition of property, equipment and appurtenances thereto used or useful for the public convenience in connection therewith, as more fully described in the preamble hereof, there shall be borrowed on the credit of the income and revenues of the System the sum of Three Hundred Twenty Thousand ------------------- Dollars ($320,000), and negotiable coupon bonds of the City shall be issued in evidence thereof (said bonds are hereinafter referred to as the "Bonds"). The Bonds shall be designated "Sewerage System Mortgage Revenue Bonds," shall be dated November 1, 1968. shall be in the denomination of $5,000 each. numbered 1 to 64, inclusive, and shall mature serially in numerical order on November 1 of each ,of the years as follows: Amounts Years 20,000 25,000 1971 - 77 1984 - 88 1989 - 93 1978 - a3 1994 and 1995 It is hereby found and declared that the above schedule of maturities of the Bonds is such that the requirements each year to pay both principal and interest on obligations payable from the income and revenues of the System are as nearly equal as practicable. Bonds maturing in the year 1984 and thereafter shall be subject to call and redemption prior to maturity in whole or in part, and from time to time in inverse numerical order at the option of the City on November 1, 1983. or any interest payment date thereafter, at par, accrued interest, plus a pre- luiulll of four per cent (42) of Llle principal amounl. of any Bond so called. Not less than thirty (30) days' notice of the call of the Bonds shall be given, which notice shall state the number of the Bonds called for payment and the payment date on which said Bonds are called, and that said Bonds shall cease to bear interest after such date. Said notice shall be published at least once in a newspaper published in the City of Madison, Wisconsin, which customarily pub- e lishes such notices, and shall be mailed by registered mail to the original purchasers of the Bonds, to the bank at which the Bonds are payable and to the registered holder of any Bond called for redemption. 13 I The Bonds shall be payable as to both principal and,interest at Marine National Exchange Bank of Milwaukee, Milwaukee, Wisconsin, and Bonds maturing in the following years shall bear interest payable semiannually on the first days of May and November of each year, commencing May 1. 1969, at the rates set forth below: Years of Maturity Rate - (all inclusive) 5-112% 5-314% 5.80% 1971-86 1987-91 1992-95 The Bonds shall be registrable as to principal only as specified and with the effect provided in the Bond form established by Section 2 of this Ordinance. The Bonds shall be executed on behalf of the City by its Mayor and City Clerk, and the interest coupons attached to the Bonds shall be signed by said officers by their respective facsimile signatures; said officers shall, by the manual execution of the Bonds, adopt as and for their own proper signa- tures their respective facisimile signatures appearing on said coupons. ,/ The principal of and interest on the Bonds shall be payable only out of the Special Redemption Fund hereinafter defined, and shall be a valid claim of the holder thereof only against the Special Redemption Fund and from the revenues pledged to such fund, and sufficient revenues are hereby pledged to the Special Redemption Fund, and shall be used for no other purpose than, to pay the principal of and interest on the Bonds as the same fall due. Section 2. Form of Bonds, Coupons and Reqistration Blank. The Bonds, coupons and registration blank shall be in substantially the following form: I 14 "" (Form of Bond) UNITED STATES OF AMERICA . ~~ . STATE OF WISCONSIN COUNTY OF WAUKESHA ~~ ~ CITY OF MUSKEG0 SEWERAGE SYSTEM MORTGAGE REVENUE BOND No. $5,000 KNOW ALL MEN BY THESE PRESENTS: That the City of Muskego, Waukesha County, Wisconsin, hereby acknowledges itself to owe and for value received pro- mises to pay to bearer, or, if registered, to the registered holder hereof, from the revenues hereinafter specified the sum of FIVE THOUSAND DOLLARS ($5,000) on 0 the first day of November 19 -, with interest at the rate of Per cent ( %) per annum, payable semiannually on the first days of May and November of each year, commencing May 1, 1969, upon presentation and surrender of the interest coupons attached hereto as they severally become due. Both principal hereof and interest hereon are hereby made payable in lawful money of the United States of America at Marine National Exchange Bank, Milwaukee, Wisconsin. Bonds of this issue maturing in the year 1984 and thereafter are sub- ject to call and redemption prior to maturity in whole or from time to time in part and in inverse numerical order at the option of the City on November 1, 1983 or any interest payment date thereafter, at par, accrued interest. plus a pre- mium of four per cent (4%) of the principal amount of any Bond so called. A notice of the call of said Bonds, stating the numbers of the Bonds called for payment, the date on which said Bonds are called, and that said Bonds shall cease to bear interest after such date, shall be published at least once in a newspaper of the City of Madison, Wisconsin, which customarily publishes such notices not less than thirty (30) days prior to the date of call, and shall be given by registered mail to the original purchasers of said Bonds, to the bank at which said Bonds are payable and to the registered holder of any Bond called for redemption which is registered as to principal. 15 This Bond is one of an issue of like date, aggregating Three Hundred Twenty Thousand Dollars ($320,000), issued for the purpose of providing for the payment of the cost of constructing the Sewerage System of said City pursuant to Article XI, Section 3, of the Wisconsin Constitution, Section 66.066, Wisconsin e Statutes, act supplementary thereto, and an ordinance adopted on October 29, 1968 by the Common Council of the City, entitled, "An Ordinance Providing for the Issuance and Sale of $320,000 Sewerage System Mortgage Revenue Bonds of the City of Muskego, Waukesha County, Wisconsin, and Providing for the Payment of Said Bonds and Other Details with Respect Thereto," and is payable only from a propor- tion of the income and revenues to be derived from the operation of said System which have been set aside in a special fund created by said Ordinance for that purpose. This Bond constitutes a first pledge of the income and revenues so apportioned and does not constitute an indebtedness of said City within the meaning of any constitutional or statutory limitation or provision. A statutory mortgage lien, which is hereby recognized as valid and binding on said System, together with all additions and improvements thereto, is created and granted by statute to and in favor of the holder or holders of 'I d j. this Bond and the issue of which it forms a part and in favor of the holder or holders of the interest coupons attached to said Bonds, and said System and all extensions and improvements thereto shall remain subject to such statutory mort- gage lien until the payment in full of the principal and interest on this Bond and the issue of which it forms a part. This Bond may be registered as to principal only in accordance with the provisions set forth on the reverse side hereof. This Bond, unless it has been registered as to principal. and the coupons attached hereto are fully negotiable, and all rights hereunder shall pass by delivery, and each and every successive holder of the Bond during such time as it is payable to bearer of each of the coupons hereto attached are conclusively presumed to forego and renounce his and their equities in favor of subsequent holders for value in good faith without notice, and to agree that this Bond, while so payable to bearer, and each of the coupons hereto attached, may be negotiated by delivery by any person having possession thereof, howsoevar 16 such possession may have been acquired, and that any holder who shall have taken this Bond or any of the coupons from any person in good faith for value and without notice thereby acquires absolute title thereto, free from any defenses enforceable against any prior holder and free from all equities and claims of ownership of any such prior holder. The City and its officials shall not be affected by any notice to the contrary. a. 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 have existed, have happened and have been performed in due time, form and manner as required by law, and that sufficient of the income and revenue to be received by said City from the operation of said System has been pledged to and will be set aside into a special fund for the payment of prin- cipal and interest on this Bond. a IN WITNESS WHEREOF, the City of Muskego, Waukesha County, Wisconsin, by its Common Council, has caused this Bond to be signed by its Mayor and City Clerk, its corporate seal to be affixed hereto, and the coupons hereto attached to be signed by said officers by their respective facsimile signatures, and said officers, by the manual execution of this Bond, do adopt as and for their respective proper signatures their respecti.ve facsimile signatures appearing on said coupons, all as of the first day of November, 1968. CITY OF MUSKEG0 WAUKESHA COUNTY, WISCONSIN BY BY City Clerk Mayor a (Form of Coupon) 1 No. F On the first day of , 19 , the City of Muskego, Waukesha County, Wisconsin, promises, as recited in and from the funds specified in the Bond to which this coupon is attached, to pay to bearer the amount shown hereon, in lawful money of the United States of America, at Marine National Exchange Bank of Milwaukee, Milwaukee, Wisconsin, for interest due that date on its "Sewerage System Mortgage Revenue Bond," dated November 1, 1968, No. e CITY OF MUSKEG0 WAUKESHA COUNTY, WISCONSIN (Facsimile) (Facsimile) BY City Clerk BY Mayor (Form of additional cluase to appear on coupons numbered 31 and up.) Unless the Bond to which this coupon is attached hasbeen called for prior redemption, - - - (Form of blank for registered ownership. ) Reqistration Provisions This Bond may be registered as to principal only on books of the City kept by its City Clerk, upon presentation hereof to said City Clerk, such registration to be noted in the registration blank below and upon said books, and this Bond may thereafter be transferred only upon a written assignment duly 0 executed by the registered holder or his attorney, such transfer to be made on such books and endorsed hereon. This Bond may be discharged from such registration by transfer to bearer after which it shall be transferable by delivery, but shall be again subject to successive registrations as before. The registra- tion of this Bond as to principal shall not restrain the negotiability of the coupons by delivery merely. Date of Signature of Registration In Whose Name Reqistered City Clerk Section 3. Income and Revenue Funds. The income and revenues to be derived from the operation of the System, including payments received 0 from the City for services rendered it, shall be set aside into separate and special funds hereby established and are to be used and applied for the following e purposes and in the following proportions: 15% of the income and revenues therefrom is presently Operation and Maintenance Fund" for the reasonable and necessary and shall be set aside in the "Sewerage System proper operation and maintenance of the System; 5% of the income and revenues therefrom is presently necessary and shall be set aside in the "Sewerage System Depreciation Fund" as a proper and adequate depreciation account; 80% of the income and revenues therefrom is presently necessary and shall be set aside in the "Sewerage System referred to as the "Special Redemption Fund"), and applied Bond and Interest Special Redemption Fund" (herein to the payment of the principal of and interest on the Bonds. The Operation and Maintenance Fund and the Depreciation Fund shall be deposited as received in a bank or banks selected by the Common Council in the manner required by Chapter 34 of the Wisconsin Statutes and shall be adequately secured in the manner provided by law. All moneys in said Funds in excess of that necessary for the necessary costs of operation, maintenance and depreciation and reasonable reserves relating thereto and a1 1 other necessary disbursements shall be deposited in the Special Redemption Fund but such deposits shall not reduce the amounts otherwise required to be paid into the Special Redemption Fund. It is the express intent and determination of this Common Council that the amount of said income and revenues to be set aside and paid into the Special Redemption Fund shall, in any event, be sufficient to pay the principal of the Bonds as the same matures, and the interest tnereon as the same accrues, not- withstanding the fixed proportion thereof temporarily allocated to such purposes in the manner above provided, and the City shall from year to year, and out of the income and revenues received from the operation of the System, deposit at least sufficient funds in the Special Redemption Fund to pay promptly all principal 0 and interest falling due on the Bonds. The minimum amounts required to bedeposit- ed in the Special Redemption Fund are set forth on the schedule attached to, and made a part of, this Ordinance. 19 " The total income and revenues so set aside for.payment of the principal of and interest on the Bonds shall, from month to month, as the same shall accrue and be received, be set apart and shall on the last day of each month, be paid into the Special Redemption Fund, which amount shall be not less than one-twelfth * (1/12) of the minimum amount so required to be deposited for each year. The Special Redemption Fund shall be kept apart from other moneys of the System and the same shall be used for no purpose other than the payment of principal of and interest on the Bonds, promptly as the same become due and payable. All money therein shall be deposited in a special account in a bank or banks and shall be adequately secured in the manner required for public funds in the State of Wis- consin, and such monthly payments above described shall be made directly to such bank. 0 To additionally secure the payment of principal of and interest on the Bonds, there is hereby established a separate account in the Special Redemption Fund to be known as the "Reserve Account," and the City hereby covenants and agrees that when any of the Bonds shall have been delivered, there will be paid monthly into said Reserve Account $350.00 until a minimum of $28,670.00 will have accumulated therein, provided that no such payments need be made into the Reserve Account at such times as the moneys in said account are equal to the maximum principal and interest requirements on the Bonds for any unexpired twelve months period, or the remaining principal and interest requirements on the Bonds then outstanding, whichever shall be the lesser. If for any reason there shall be in- sufficient funds on hand in the Special Redemption Fund to meet principal or inte- rest becoming due on the Bonds, all sums then held in the Reserve Account shall be used to pay the portion of interest or principal on such Bonds becoming due as to which there would otherwise be default, and thereupon the payments required by this paragraph shall again be made into the Reserve Account until the Reserve Account meets the minimum requirements provided herein. Funds in the Special Redemption Fund in excess of the minimum amounts required to be paid therein plus reserve requirements may be invested in any manner permitted by statute or may be used, at the option of the Common Council, to redeem callable Bonds of this issue prior to maturity or to purchase Bonds of this i ssue on the open market. 23 Section 4. Mortgage Lien. For the further protection of the holders of the Bonds and the interest coupons attached thereto, a statutory mortgage lien upqn the System is granted and created by Section 66.066, Wis. Stats., which lien is hereby recognized as valid and binding upon the City as a Val id and binding e lien upon the System and any additions and improvements thereto; and the System shall remain subject to such statutory rortgage lien until payment in full of the principal and interest of the Bonds. Section 5. Service to City. The reasonable cost and value of any service rendered to the City and its inhabitants by the System, including reason- able charges for public health benefits, shall be paid for monthly as such ser- vice accrues out of the current revenues of the City collected or in process of collection, exclusive of the revenues derived from the System, to-wit: out of the tax levy of the City made by it to raise money to meet its necessary 0 current expenses. Such amount shall not exceed the lessor of Twenty-Eight Thousand Six Hundred Seventy Dollars ($28,670) or such part thereof as may be necessary from year to year to pay the balance of an amount which, together with other revenues of the System, will produce earnings equivalent to not less than one and three-tenths (1.3) times annual principal and interest requirements on the Bonds after deduction of all operating and maintenance expenses of the System. Section 6. Operation of System; City Covenants. It is covenanted and agreed by the City with the holder or holders of the Bonds, and each of them, while any of the Bonds are outstanding, that: The City will faithfully and punctually perform all duties with reference 0 to the System required by the Constitution and Statutes of the State of Wiscon- sin, including the making and collecting of reasonable and sufficient rates lawfully established for services rendered by the System and wi 11 segregate the incollle and revenues of the Systelll into respective funds contained in Section 3 hereof and apply said funds in accordance with thc provisions therein Contained; The City will not sell, lease, or in any manner dispose of the System, 0. . including any part thereof or any additions or extensions that may be made thereto, except that the City shall have the right to sell , lease or otherwise dispose of any property of the System found by the Common Council to be neither necessary nor useful in the operation of the System, provided the proceeds re- @ ceived from such sale, lease or disposal shall be paid into the Reserve Account 21 """ 0 e e .( e but such payment shall not reduce the amounts otherwise required to be paid into the said Account or the Special Redemption Fund; The City will cause the System to be constructed as expeditiously as reasonably possible; and The City will maintain in good condition and operate the System, charge and collect such lawful established rates and charges for the services rendered by the System so that the proportion of the revenues of the System herein agreed to be set aside for debt service will at all times be sufficient to provide for the payment of principal of and interest on the Bonds as the same become due and payable. Section 7. Books and Accounts; Inspection. The City covenants and agrees that it will keep proper books and accounts relative to the System separate from all other records of the City and will cause such books and accounts to be audited annually by a recognized independent firm of certified public accountants; each such audit, in addition to whatever matters may be thought proper by the accountants to be included therein, shall include the following: (a) a statement in detail of the income and expenditures of the System for the fiscal year; (b) a balance sheet as of the end of such fiscal year; (c) the accountants' com- ment regarding the manner in which the City has carried out the requirements of this Ordinance and the accountants' recommendation for any changes or improve- ments in the operation of the System; (d) a list of the insurance policies in force at the end of the fiscal year setting out as to each policy the amount of the policy, the risks covered, the name of the insurer, and the expiration of the policy; and (e) the number of customers at the end of such year. Copies of such audit shall promptly, and in any event within 90 days after the end of each fiscal year, be mailed to the original purchaser of the Bonds and shall be made generally available to the holders of any of the Bonds upon application there- for. The holders of any of the Bonds shall have at all reasonable times the right to inspect the System and the records, accounts and dataof the City relating thereto. 22 Section 8. Insurance. So long as any Bond is outstanding, the City will carry for the benefit of the holders of the Bonds: adequate fire, lightning, vandalism, riot, strike, explosion, civil commotion, malicious damage, tornado and windstorm insurance on all buildings and property of the System which are 8 subject to loss through any of such causes; adequate insurance against loss of use and occupancy resulting from any of such causes; adequate public liability insurance, and insurance of the kinds and in the amounts normally carried by private companies engaged in the operation of similar facilities in the State of Wisconsin. All money received for losses under any of such casualty insurance policies shall be used in repairing the damage or in replacing the property des- troyed unless the Common Council shall find that it is inadvisable to repair such damage or replace such property and that the operation of the System has not been impaired thereby, in which event the proceeds shall be deposited in the Reserve 0 Account of the Special Redemption Fund but shall not reduce the amounts otherwise required to be paid into said Account or said Fund. All money received in pay- ment for the loss of use and occupancy shall be considered income of the System, apportionable in accordance with Section 3 of this Ordinance. Section 9. Additional Bonds. As long as any of the Bonds are out- standing, no additional bonds or obligations pledging or payable out of any por- tion of the revenues of the System may be issued in such manner as to enjoy prior- ity over the Bonds. Additional bonds on a parity with the Bonds may be issued under either of the following subsections: (a) Additional bonds on a parity with t.he Bonds may be issued to aid the construction of the sewerage system in the Northeast Assessment District and the Northwest Assessment District (in accordance with preliminary pl~ns on rile wi I:h Lhe Ci Ly Clcrk), provitlcd LhaL thc agyrcqaLc principal alllourlc of parity bonds issued of the total cost of construction of the System in said pursuant to this subsection shall not exceed one-half District and reasonable cost of services to the City established pursuant to Section 5 hereof shall have been increased to an amount not to exceed that sur which bears the direct proportion to the total bonds then to be outstanding as the present cost bears to the Bonds now outstanding; 23 (b) Additional bonds on a parity with the Bonds may be issued if all of the following conditions are met: (i) The net revenues of the System for the twelve months immediately preceding the issuance of such additional parity bonds must have been equal to at least 130% of the average annual principal and interest requirements on both (1) all bonds outstand- the bonds then to be issued. Net revenues shall ing payable from the revenues of the System and (2) consist of the gross revenues of the System less the costs of operation, maintenance, and repair, and include total income derived from the operation of "gross revenues" as used in this Ordinance shall such sums as the City shall pay as the reasonable the System from any source whatsoever, including cost and value of service rendered to it. Should an increase in rates and charges, including tnose made to the City, be properly ordered and made effective prior to the issuance of such additional computation shall include such additional revenues bonds, gross revenues for the purposes of such would have accrued during the preceding fiscal as an independent certified accountant may certify years had the new rates been in effect during that period ; (ii) All payments currently required to be made into thefunds referred to in Section 3 must have been made in full. (iii) Additional parity bonds must have principal falling due on November 1 of each Year and interest on Mav 1 and (iv Section - November 1 of each year; The proceeds of the additional bonds must be used only for additions and/or improvements to the System or to refund all remaining outstanding Bonds of this issue. 10. - Sale of Bonds. The sale of the Bonds to The Milwaukee Company, Milwaukee, Wisconsin, is hereby ratified and confirmed in accordance with a contract of sale heretofore entered into by the Common Council at a price which rcsults in ;In intcrest cost not in cxcess of six pcr ccnt (62) pcr dnnuIn. colllputed to the IllacuriLy of xtic Con& accordiny to standard tables of bond values; and the officers of the City are hereby authorized and directed to do any and all acts necessary to conclude delivery of the Bonds to said purchaser, upon receipt of the purchase price, as soon after adoption of this Ordinance as is convenient. Section 11. Application of Bond Proceeds. All accrued interest re- ceived from the sale of Bonds shall be deposited in the Sepcial Redemption Fund and applied toward the payment of interest coupons next becoming due and payable after delivery of the Bonds. There shall be deposited in the Special Redemption 24 fund, out of the proceeds from the sale of the Bonds, for the purpose of paying the interest thereon during the period of construction of the System, a sum in an amount equal to at least one year's interest requirements on the Bonds, computed from the date of delivery thereof to the purchaser, which sum shall be used solely for the purpose of paying interest due on the Bonds during the construc- tion period. If the construction of the System, or any part thereof for which Bonds have been issued, is not completed within a twelve (12) month period, the City, if necessary, shall advance such additional sums as may be needed to pay interest on these Bonds until the System is in operation, and the City shall be reimbursed for such advances from earnings of the System when next available. The balance of the proceeds shall be deposited in a special fund by the Treasurer, designated as "Sewerage System Construction fund." Said special fund shall be adequately secured and shall be used solely for the purpose of meeting costs of constructing the System, as more fully described in the preamble hereof. Any balance remaining in said Construction Fund after paying said costs shall be transferred to the Special Redemption Fund for use in payment of principal of or interest on the Bonds. Section 12. Conflicting Ordinances. All ordinances, resolutions, or orders, or parts thereof, heretofore enacted, adopted or entered, in conflict with the provisions of this Ordinance, are hereby repealed and this Ordinance shall be in effect from and after its passage and publication. Passed: , 1968 Recorded; , 1968 Published: , 1968 Mayor Attest: a City Clerk 25 Schedule of Minimum Deposits in Special Redemption Fund Created by Ordinance No. 128 CITY OF MUSKEG0 Total Endinq November 1 For the Year 1969 1970 Interest Principal $18,095.00 18,095.00 518.095.00 .~~, 18,095.00 23,095.00 22,820.00 fl 5,000 5,000 5,000 5,000 5 .ooo la ,095.00 17.820.00 171545.00 17,270.00 16,995.00 22 1545.00 22,270.00 21,995.00 21,720.00 21,445.00 26.170.00 1973 1974 1975 1976 1977 51000 5,000 10,000 16,720.00 16 ~445.00 L i6 1170.00 15,620.00 1978 1979 25;620.00 25,070.00 24.520.00 10,000 10 .ooo 1980 1981 1982 15,070.00 14,520.00 13,970.00 13,420.00 12,870.00 12.045.00 i0;ooo 10,000 10 .ooo 23l970.00 23;420.00 27,870.00 27,045.00 1983 1984 1985 1986 15 1000 15 io00 15,000 llj220.00 10,395.00 9,532.50 26 :220.00 251395.00 24,532.50 28.670.00 1987 1988 1989 15,000 15,000 20,000 20,000 20,000 20,000 20,000 25,000 25,000 8 1670.00 7:520.00 6,370.00 5,220.00 4,060.00 2,900.00 1,450.00 27;520.00 26,370.00 25,220.00 24,060.00 27,900.00 26,450.00 1990 1991 1992 1993 1994 1995 26