65 ILCS 5/ Illinois Municipal Code.

(65 ILCS 5/Art. 11 Div. 130 heading) DIVISION 130. CONSTRUCTION AND PURCHASE OF WATERWORKS

(65 ILCS 5/11-130-1) (from Ch. 24, par. 11-130-1)

Sec. 11-130-1. Any municipality may purchase or construct waterworks or construct improvements to its waterworks as provided in this Division 130.

(Source: Laws 1961, p. 576.)

(65 ILCS 5/11-130-2) (from Ch. 24, par. 11-130-2)

Sec. 11-130-2. The term "waterworks", as used in this Division 130, means and includes a waterworks system in its entirety or any integral part thereof, including mains, hydrants, meters, valves, standpipes, storage tanks, pumping tanks, intakes, wells, impounding reservoirs, or purification plants.

(Source: Laws 1961, p. 576.)

(65 ILCS 5/11-130-3) (from Ch. 24, par. 11-130-3)

Sec. 11-130-3. Whenever the corporate authorities of any municipality determine to purchase or construct waterworks under the provisions of this Division 130, they shall have an estimate made of the cost thereof and, by ordinance, shall provide for the issuance of revenue bonds under the provisions of this Division 130. The ordinance shall set forth a brief description of the contemplated purchase or construction, the estimated cost thereof, the amount, rate of interest, time and place of payment, and other details in connection with the issuance of the bonds. The bonds shall bear interest at not more than the maximum rate authorized by the Bond Authorization Act, as amended at the time of the making of the contract, payable semi-annually, and shall be payable at such times and places not exceeding 20 years from their date as shall be prescribed in the ordinance providing for their issuance. This ordinance shall also declare that a statutory mortgage lien exists upon the property so to be purchased or constructed, fix minimum rates for water to be collected prior to the payment of all of the revenue bonds so issued, and shall pledge the revenue derived from the operation of the waterworks for the purpose of paying those bonds and the interest thereon. This pledge shall definitely fix and determine the amount of revenue which must be set apart and applied to the payment of the principal of and interest on the bonds and the proportion of the balance of the revenue which is to be set aside as a proper and adequate depreciation account. The remainder of the revenue shall be set aside for the reasonable and proper operation and maintenance of the waterworks. The rates to be charged for the services from the waterworks shall be sufficient to provide for the payment of interest upon all bonds and to create a sinking fund to pay the principal thereof as and when the bonds become due, to provide for the operation and maintenance of the system and to provide an adequate depreciation fund.

With respect to instruments for the payment of money issued under this Section either before, on, or after the effective date of this amendatory Act of 1989, it is and always has been the intention of the General Assembly (i) that the Omnibus Bond Acts are and always have been supplementary grants of power to issue instruments in accordance with the Omnibus Bond Acts, regardless of any provision of this Act that may appear to be or to have been more restrictive than those Acts, (ii) that the provisions of this Section are not a limitation on the supplementary authority granted by the Omnibus Bond Acts, and (iii) that instruments issued under this Section within the supplementary authority granted by the Omnibus Bond Acts are not invalid because of any provision of this Act that may appear to be or to have been more restrictive than those Acts.

The amendatory Acts of 1971, 1972 and 1973 are not a limit upon any municipality which is a home rule unit.

(Source: P.A. 86-4.)

(65 ILCS 5/11-130-4) (from Ch. 24, par. 11-130-4)

Sec. 11-130-4. Within 10 days after such an ordinance has been passed it shall be published at least once, with a notice to all persons concerned stating that the ordinance has been adopted in one or more newspapers published in the municipality, or, if no newspaper is published therein, then in one or more newspapers with a general circulation within the municipality. In municipalities with less than 500 population in which no newspaper is published, publication may instead be made by posting a notice in 3 prominent places within the municipality. Such notice shall state that the municipality contemplates the issuance of the bonds described in the ordinance, and that any person interested may appear before the corporate authorities upon a certain date, which shall not be less than 10 days subsequent to the publication or posting of the ordinance and notice, and present protests. At this hearing all objections and suggestions shall be heard, and the corporate authorities shall take such action as they shall deem proper in the premises.

(Source: Laws 1961, p. 576.)

(65 ILCS 5/11-130-5) (from Ch. 24, par. 11-130-5)

Sec. 11-130-5. Bonds provided for in this Division 130 shall be issued in such amounts as may be necessary to provide sufficient funds to pay all costs of the purchase or construction, including engineering, legal, and other expenses, together with interest to a date 6 months subsequent to the estimated date of completion. Bonds issued under this Division 130 are negotiable instruments. They shall be executed by the mayor, or president and by the municipal clerk and shall be sealed with the corporate seal of the municipality. In case any of the officers whose signatures appear on the bonds, or coupons attached thereto, ceases to hold his office before delivery of the bonds, his signature nevertheless shall be valid and sufficient for all purposes the same as if it had remained in office until the delivery of the bonds. The bonds may be sold at not less than 90 cents on the dollar, and the proceeds derived therefrom shall be used exclusively for the purposes for which the bonds were issued. The bonds may be sold at one time or in parcels as funds are needed, but no bond shall be delivered until bids for the construction, or the offer to sell, in the case of a purchase, has been received, or judgment has been entered in the event of a condemnation, and it is apparent that the authorized bonds will pay for the contemplated waterworks.

(Source: Laws 1961, p. 576.)

(65 ILCS 5/11-130-6) (from Ch. 24, par. 11-130-6)

Sec. 11-130-6. Revenue bonds issued under this Division 130 shall be payable solely from the revenue derived from the operation of the waterworks on account of which the bonds were issued. These bonds shall not in any event constitute an indebtedness of the municipality within the meaning of any constitutional or statutory limitation. It shall be plainly stated on the face of each bond that the bond has been issued under this Division 130 and that it does not constitute an indebtedness of the municipality within the meaning of any constitutional or statutory limitation.

(Source: Laws 1961, p. 576.)

(65 ILCS 5/11-130-7) (from Ch. 24, par. 11-130-7)

Sec. 11-130-7. There is hereby created a statutory mortgage lien upon the waterworks so purchased or constructed from the proceeds of the bonds authorized to be issued under this Division 130. This lien exists in favor of the holder of each of the bonds, and in favor of the holder of each of the coupons attached to the bonds. The waterworks shall remain subject to this statutory mortgage lien until the principal and interest of the bonds are paid in full. Any holder of bonds issued under this Division 130, or of any coupons representing interest accrued thereon, may, in a civil action, enforce the statutory mortgage lien hereby created, and may compel the performance of the duties of the officials of the issuing municipality set forth in this Division 130.

If there is a default in the payment of the principal of and/or interest upon any of these bonds, the circuit court in any proper action may appoint a receiver to administer the waterworks on behalf of the municipality with power to charge and collect rates sufficient to provide for the payment of the bonds and interest thereon, and for the payment of the operating expenses and with power to apply the revenue in conformity with this Division 130 and the ordinance providing for the issuance of the bonds.

(Source: P.A. 79-1361.)

(65 ILCS 5/11-130-8) (from Ch. 24, par. 11-130-8)

Sec. 11-130-8. Rates for water fixed precedent to the issuance of bonds shall not be reduced until all of the bonds have been fully paid, and, whenever necessary, may be increased in amounts sufficient to provide for the payment of the bonds, both principal and interest, and to provide proper funds for the depreciation account and operation and maintenance charges.

If any surplus accumulates in the operating and maintenance fund in excess of the cost of maintaining and operating the waterworks during the remainder of the then current fiscal year, and during the next ensuing fiscal year, that excess may be transferred by the corporate authorities either to the depreciation account or to the bond and interest redemption account as the corporate authorities may designate. If any surplus accumulates in the depreciation account over and above that which the corporate authorities find may be necessary for the probable replacements which may be needed during the remainder of the then present fiscal year and the next ensuing fiscal year, that excess may be transferred to the bond and interest redemption account. If any surplus exists in the bond and interest redemption account that surplus shall be applied insofar as possible in the purchase or retirement of outstanding revenue bonds payable from that account, and for that purpose the corporate authorities are hereby authorized to purchase bonds not due in the open market at not more than the fair market value thereof.

(Source: Laws 1961, p. 576.)

(65 ILCS 5/11-130-9) (from Ch. 24, par. 11-130-9)

Sec. 11-130-9. For the purpose of purchasing any waterworks under this Division 130, or for the purpose of purchasing any property necessary therefor, the municipality has the right of eminent domain as provided by the Eminent Domain Act.

(Source: P.A. 94-1055, eff. 1-1-07.)

(65 ILCS 5/11-130-10) (from Ch. 24, par. 11-130-10)

Sec. 11-130-10. Whenever a municipality owns and operates a waterworks system, whether purchased or constructed under this Division 130 or not, and desires to construct improvements thereto, it may issue revenue bonds under this Division 130 to pay for that construction. The procedure for that issuance, including the fixing of rates and the computation of the amount thereof, shall be the same as is provided in this Division 130 for the issuance of bonds for the purchase or construction of waterworks by a municipality, except that in the ordinance declaring the intention to issue the bonds and providing details in connection therewith, the corporate authorities shall find and declare, in addition to the other requirements set out in this Division 130, the value of the then existing waterworks and the value of the property proposed to be constructed. The revenue derived from the waterworks when the contemplated improvements are completed shall be divided according to those 2 values. So much of the revenue as is in proportion to the value of the improvements as distinguished from the value of the previously existing waterworks, as so determined, shall be set aside and used solely for the purpose of paying the revenue bonds issued for the improvements, together with the cost of the operation and the depreciation thereof, and that revenue shall be deemed to be income derived exclusively from the improvements.

(Source: Laws 1961, p. 576.)

(65 ILCS 5/11-130-11) (from Ch. 24, par. 11-130-11)

Sec. 11-130-11. Any municipality issuing revenue bonds under this Division 130 shall install and maintain a proper system of accounts, showing the amount of revenue received and its application. At least once a year the municipality shall have the accounts properly audited by a competent auditor. The report of that audit shall be open for inspection at all proper times to any taxpayer, water-user, or any holder of bonds issued under this Division 130, or to anyone acting for and on behalf of the taxpayer, water-user, or bondholder.

The treasurer of the municipality shall be custodian of the funds derived from income received from waterworks purchased or constructed either in whole or in part under the provisions of this Division 130. He shall give proper bond for the faithful discharge of his duties as such custodian, and this bond shall be fixed and approved by the corporate authorities of the municipality.

All of the funds received as income from waterworks purchased or constructed in whole or in part under the provisions of this Division 130, and all of the funds received from the sale of revenue bonds issued to construct such a waterworks system, shall be kept separate and apart from the other funds of the municipality. The treasurer shall maintain separate accounts in which shall be placed (1) the interest and sinking fund, (2) the depreciation fund and (3) the operating and maintenance fund. He shall also provide for refunding outstanding certificates payable out of water revenue.

(Source: Laws 1961, p. 576.)

(65 ILCS 5/11-130-12) (from Ch. 24, par. 11-130-12)

Sec. 11-130-12. Whenever all of the holders of unpaid water revenue certificates of a particular issue, which were issued prior to July 8, 1927, to pay the cost of constructing waterworks and are payable from the revenue thereof, offer in writing to exchange the certificates for refunding revenue bonds to be issued under this Division 130, the corporate authorities shall receive the certificates, and if found to be properly executed, may adopt an ordinance incorporating therein the offer of the certificate holders. This ordinance shall set forth the determined value of the waterworks as it then exists, the value of as much of the waterworks as was paid for by the issue of certificates, the unpaid portion of which are proposed to be refunded, and the details in connection with the issuance of the refunding revenue bonds in the same manner as is provided for in this Division 130. The ordinance also shall fix the minimum rates to be charged for water and pledge that revenue, if and when the refunding revenue bonds are issued, to pay these refunding revenue bonds. The revenue shall be applied as provided in this Division 130 and particularly in Sections 11-130-8 and 11-130-9.

The amount of the refunding revenue bonds shall not exceed and may be less than the par amount of the certificates to be surrendered and shall not exceed and may be less than the determined value of so much of the waterworks as was paid for by that issue of certificates, less the amount of certificates paid. The ordinance shall be published, or posted, together with a notice of a hearing thereon, and a hearing shall be had thereon, in the same manner as is provided in this Division 130. After such a hearing the refunding revenue bonds specified in the offer may be issued, or a less amount thereof may be issued with the consent of the certificate holders, or the ordinance may be repealed, as the corporate authorities shall determine. If the refunding revenue bonds are issued, the certificates shall be surrendered and cancelled simultaneously therewith. Refunding revenue bonds issued under this Division 130 shall be payable only out of revenue derived from the waterworks as provided in the ordinance and according to the terms of this Division 130. Holders of refunding revenue bonds issued under this Division 130 have rights similar to those of holders of revenue bonds issued under this Division 130, including the power to apply for a receiver to operate the waterworks. The municipality is under the same obligations to the refunding bondholders as it is to holders of revenue bonds issued under this Division 130.

(Source: Laws 1961, p. 576.)