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ORDINANCE NO. 2565
CITY OF MUSKEGON
AN ORDINANCE TO PROVIDE FOR THE ACQUISITION, CONSTRUCTION,
INSTALLATION, FURNISHING AND EQUIPPING OF ADDITIONS AND
IMPROVEMENTS TO THE WATER SUPPLY SYSTEM OF THE CITY; TO
PROVIDE FOR THE ISSUANCE AND SALE OF JUNIOR LIEN REVENUE
BONDS TO PAY THE COST THEREOF; 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 BONDS AND CERTAIN OUTSTANDING BONDS OF THE SYSTEM; TO
PROVIDE FOR THE SEGREGATION AND DISTRIBUTION OF SYSTEM
REVENUES; TO PROVIDE FOR THE RIGHTS OF THE HOLDERS OF THE
BONDS IN ENFORCEMENT THEREOF; TO PRESCRIBE THE FORM OF THE
BONDS; AND TO PROVIDE FOR OTHER MATTERS RELATING TO THE
BONDS AND THE SYSTEM.
THE CITY OF MUSKEGON ORDAINS:
Section 1. Definitions. Whenever used in this Ordinance, except when otherwise indicated
by the context, the following terms shall have the following meanings:
(a) “Act 94” means Act 94, Public Acts of Michigan, 1933, as amended.
(b) “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 Bonds or to be placed into effect before
the time principal or interest on the additional 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 by new customers of the System.
(c) “Authority” means the Michigan Finance Authority or its successor.
(d) “Authorized Officers” means the Mayor, the City Manager, the City Clerk
and the Finance Director of the City.
(e) “Bonds” or “Senior Lien Bonds” means any bonds or series of bonds so
designated and payable from Net Revenues, which are secured by a statutory first lien on
the Net Revenues established by this Ordinance and which are senior and superior in all
respects with respect to the Net Revenues to any Junior Lien Bonds secured by the statutory
second lien on the Net Revenues, together with any additional Bonds of equal standing
thereafter issued.
(f) “City” or “Issuer” means the City of Muskegon, County of Muskegon, State
of Michigan.
(g) ‘“EGLE” means the means the Michigan Department of Environment, Great
Lakes, and Energy, or its successor.
(h) “Engineers” means Prein & Newhof, registered engineers of Grand Rapids,
Michigan.
(i) “Junior Lien Bonds” means the Series 2026 Bonds, the Outstanding Junior
Lien Bonds and any additional bonds of equal standing with the Series 2026 Bonds and the
Outstanding Junior Lien Bonds which are secured by a statutory second lien on the Net
Revenues and are junior and subordinate to the Senior Lien Bonds,
(j) “Outstanding Junior Lien Bonds” means the Series 2004 Bonds, Series
2019 Bonds, Series 2020 Bonds, Series 2022 Bonds, Series 2023 Bonds, the Series 2024
Bonds and the Series 2025 Bonds.
(k) “Outstanding Ordinances” means Ordinance Nos. 2117, 2416, 2436, 2468,
2483, 2505 and 2543 ofthe City.
(1) “Project” means the acquisition, construction, furnishing and equipping of
improvements to the Water Supply System of the City, including distribution system
improvements, replacement of water mains and lead service lines, pump station and water
filtration plant improvements, together with all related appurtenances and attachments.
(m) “Purchase Contract” means the Purchase Contract to be entered into
between the Authority and the City relating to the purchase by the Authority of the Series
2026 Bonds.
(n) “Revenues” and “Net Revenues” shall mean the revenues and net revenues
of the City derived from the operation 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 the Outstanding
Ordinances and this Ordinance.
(0) “Series 2019 Bonds” means the Water Supply System Junior Lien Revenue
Bond, Series 2019, dated August 28, 2019, in the outstanding principal amount of
$1,255,000.
(p) “Series 2020 Bonds” means the Water Supply System Junior Lien Revenue
Bond, Series 2020, dated September 30, 2020, in the outstanding principal amount of
$3,025,000.
(q) “Series 2022 Bonds” means the Series 2022A Bonds and the Series 2022B
Bonds.
(r) “Series 2022A Bonds” means the Water Supply System Junior Lien
Revenue Bond, Series 2022A, dated September 20, 2022, in the outstanding principal
amount of $1,040,000.
(s) “Series 2022B Bonds” means the Water Supply System Junior Lien
Revenue Bond, Series 2022B, dated September 20, 2022, in the outstanding principal
amount of $240,000.
(t) “Series 2023 Bonds” means the Water Supply System Junior Lien Revenue
Bond, Series 2023, dated September 8, 2023, in the outstanding principal amount of
$2,870,000.
(u) “Series 2024 Bonds” means the Water Supply System Junior Lien Revenue
Bond, Series 2024, dated August 28, 2024, in the outstanding principal amount of
$4,820,000.
(v) “Series 2025 Bonds” means the Water Supply System Junior Lien Revenue
Bond, Series 2024, dated September 5, 2025, in the outstanding principal amount of
$11,568,000.
(w) “Series 2026 Bonds” means the Series 2026A Bonds and the Series 2026B
Bonds.
(w) “Series 2026A Bonds” means the Water Supply System Junior Lien
Revenue Bond, Series 2026A, in the principal amount of not to exceed Five Million Dollars
($5,000,000) authorized by this Ordinance.
(x) “Series 2026B Bonds” means the Water Supply System Junior Lien
Revenue Bond, Series 2026B, in the principal amount of not to exceed Five Million Dollars
($5,000,000) authorized by this Ordinance.
(y) “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 or Junior Lien Bonds and the principal and redemption premium, if any,
on the Bonds or Junior Lien 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 of the Bonds or Junior Lien Bonds are to be called
for redemption prior to maturity, irrevocable instructions to call the Bonds for redemption
shall be given to the paying agent.
(z) “Supplemental Agreement” means the supplemental agreement among the
City, the Authority and the EGLE relating to a series of the Series 2026 Bonds.
(aa) “System” means the Water Supply System of the City, including the Project
and all additions, extensions and improvements hereafter acquired.
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 Project in accordance with the
plans and specifications prepared by the Engineers, which plans and specifications are hereby
approved. The Project qualifies for the Drinking Water State Revolving Fund financing program
being administered by the EGLE and the Authority, whereby bonds of the City are sold to the
Authority and bear interest at a fixed rate of not to exceed two percent (2.00%) per annum.
Section 3. Costs: Useful Life. The cost of the Project is estimated to be an amount not to
exceed Ten Million Dollars ($10,000,000), including the payment of incidental expenses as
specified in Section 4 of this Ordinance, which estimate of cost is hereby approved and confirmed.
The period of usefulness of the Project is estimated to be not less than twenty-five (25) years.
Section 4. Payment of Cost; Bonds Authorized. To pay part of the cost of acquiring the
Project, legal, engineering, financial and other expenses incident thereto and incident to the
issuance and sale of the Series 2026 Bonds, the City shall borrow the sum of not to exceed Ten
Million Dollars ($10,000,000), and issue the Series 2026 Bonds therefor pursuant to the provisions
of Act 94. The remaining cost of the Project, if any, shall be defrayed from grant funds and City
funds on hand and legally available for such use.
Except as amended by or expressly provided to the contrary in this Ordinance, all of the
provisions of the Outstanding Ordinances shall apply to the Series 2026 Bonds issued pursuant to
this Ordinance, the same as though each of the provisions were repeated in this Ordinance in detail;
the purpose of this Ordinance being to authorize the issuance of additional revenue bonds of junior
and subordinate standing and priority of lien to any Outstanding Senior Lien Bonds and of equal
standing and priority of lien as to the Net Revenues with the Outstanding Junior Lien Bonds to
finance the cost of acquiring additions, extensions and improvements to the System, additional
bonds of junior and subordinate standing and priority of lien as to any Outstanding Senior Lien
Bonds and of equal standing and priority of lien as to the Outstanding Junior Lien Bonds for such
purpose being authorized by the provisions of the Outstanding Ordinances, upon the conditions
therein stated, which conditions have been fully met.
Section 5. Issuance of Series 2026 Bonds; Details. The Series 2026 Bonds of the City, to
be designated WATER SUPPLY SYSTEM JUNIOR LIEN REVENUE BOND, SERIES 2026A
and WATER SUPPLY SYSTEM JUNIOR LIEN REVENUE BOND, SERIES 2026B are
authorized to be issued in the aggregate principal sum of not to exceed Ten Million Dollars
($10,000,000), or such lesser amount as finally determined by order of the EGLE for the purpose
of paying part of the cost of the Project, including the costs incidental to the issuance, sale and
delivery of the Series 2026 Bonds. The Series 2026A Bond is authorized to be issued in the
aggregate principal sum of not to exceed Five Million Dollars ($5,000,000) and the Series 2026B
Bond is authorized to be issued in the aggregate principal sum of not to exceed Five Million Dollars
($5,000,000). The Series 2026 Bonds shall be Junior Lien Bonds payable out of the Net Revenues,
as set forth more fully in Section 8 hereof, provided that the Series 2026 Bonds shall be subordinate
to the prior lien with respect to the Net Revenues in favor of any Senior Lien Bonds hereafter
issued.
The Series 2026A Bond and the Series 2026B Bond shall each be in the form ofa single
fully-registered, nonconvertible bond of the denomination of the full principal amount thereof,
dated as of the date of delivery, payable in principal installments as finally determined by the order
of the EGLE at the time of sale of each series of the Series 2026 Bonds and approved by the
Authority and an Authorized Officer. Principal installments of the Series 2026A Bond shall be
payable on April 1 of the years 2028 through 2047, inclusive, or such other payment dates as
hereinafter provided. Principal installments of the Series 2026B Bond shall be payable on April 1
of the years 2030 through 2049, inclusive, or such other payment dates as hereinafter provided.
Interest on the Series 2026 Bonds shall be payable on April 1 and October 1 of each year,
commencing April 1, 2027 or on such other interest payment dates as hereinafter provided. Final
determination of the principal amount of and interest on the Series 2026 Bonds and the payment
dates and amounts of principal installments of the Series 2026 Bonds shall be evidenced by
execution of the Purchase Contract and each of the Authorized Officers is authorized and directed
to execute and deliver the Purchase Contract when in final form and to make the determinations
set forth above; provided, however, that the first principal installment shall be due no earlier than
April 1, 2027 and the final principal installment shall be due no later than April 1, 2051 and that
the total principal amount shall not exceed $10,000,000.
The Series 2026 Bonds shall bear interest at a rate of not to exceed two percent (2.00%)
per annum on the par value thereof or such other rate as evidenced by execution of the Purchase
Contract, but in any event not to exceed the maximum rate permitted by law, and any Authorized
Officers as shall be appropriate shall deliver the Series 2026 Bonds in accordance with the delivery
instructions of the Authority.
The principal amount of the Series 2026 Bonds is expected to be drawn down by the City
periodically, and interest on principal amount shall accrue from the date such principal amount is
drawn down by the City.
The Series 2026 Bonds shall not be convertible or exchangeable into more than one fully-
registered bond. Principal of and interest on the Series 2026 Bonds shall be payable as provided
in the Series 2026 Bonds form in this Ordinance.
The Series 2026 Bonds shall be subject to optional redemption by the City with the prior
written approval of the Authority and on such terms as may be required by the Authority.
The Treasurer shall record on the registration books payment by the City of each
installment of principal or interest or both when made and the cancelled checks or other records
evidencing such payments shall be returned to and retained by the Treasurer.
Upon payment by the City of all outstanding principal of and interest on the Series 2026
Bonds, the Authority shall deliver the Series 2026 Bonds to the City for cancellation.
Section 6. Execution of Series 2026 Bonds. The Series 2026 Bonds shall be signed by the
manual or facsimile signature of the Mayor and countersigned by the manual or facsimile signature
of the City Clerk and shall have the corporate seal of the City or facsimile thereof impressed
thereon. The Series 2026 Bonds bearing the manual or facsimile signatures of the Mayor and the
City Clerk sold to the Authority shall require no further authentication.
Section 7. Registration and Transfer. Any Bond or Junior Lien Bond may be transferred
upon the books required to be kept pursuant to this section by the person in whose name it is
registered, in person or by the registered owner’s duly authorized attorney, upon surrender of the
Bond or Junior Lien Bond for cancellation, accompanied by delivery of a duly executed written
instrument of transfer in a form approved by the transfer agent. Whenever any Bond or Junior
Lien Bond shall be surrendered for transfer, the City shall execute and the transfer agent shall
authenticate and deliver a new Bond or Junior Lien Bond, for like aggregate principal amount.
The transfer agent shall require payment by the bondholder requesting the transfer of any tax or
other governmental charge required to be paid with respect to the transfer. The City shall not be
required (i) to issue, register the transfer of or exchange any Bond or Junior Lien Bond during a
period beginning at the opening of business 15 days before the day of the giving of a notice of
redemption of Bonds selected for redemption as described in the form of Series 2026 Bonds
contained in Section 16 of this Ordinance and ending at the close of business on the day of that
giving of notice, or (ii) to register the transfer of or exchange any Bond or Junior Lien Bond so
selected for redemption in whole or in part, except the unredeemed portion of Bonds or Junior
Lien Bonds being redeemed in part. The City shall give the transfer agent notice of call for
redemption at least 20 days prior to the date notice of redemption is to be given.
The transfer agent shall keep or cause to be kept at its principal office sufficient books for
the registration and transfer of the Bonds or Junior Lien Bond, which shall at all times be open to
inspection by the City; and upon presentation for such purpose the transfer agent shall under such
reasonable regulations as it may prescribe transfer or cause to be transferred on the books of the
Bonds or Junior Lien Bond as hereinbefore provided.
If any Bond or Junior Lien Bond shall become mutilated, the City, at the expense of the
holder of the Bond, shall execute, and the transfer agent shall authenticate and deliver, a new Bond
or Junior Lien Bond of like tenor in exchange and substitution for the mutilated Bond or Junior
Lien Bond, upon surrender to the transfer agent of the mutilated Bond or Junior Lien Bond. If any
Bond or Junior Lien Bond issued under this Ordinance shall be lost, destroyed or stolen, evidence
of the loss, destruction or theft may be submitted to the transfer agent and, if this evidence is
satisfactory to both and indemnity satisfactory to the transfer agent shall be given, and if all
requirements of any applicable law including Act 354, Public Acts of Michigan, 1972, as amended
(“Act 354”), being sections 129.131 to 129.135, inclusive, of the Michigan Compiled Laws have
been met, the City, at the expense of the owner, shall execute, and the transfer agent shall thereupon
authenticate and deliver, a new Bond or Junior Lien Bond of like tenor and bearing the statement
required by Act 354, or any applicable law hereafter enacted, in lieu of and in substitution for the
Bond or Junior Lien Bond so lost, destroyed or stolen. If any such Bond or Junior Lien Bond shall
have matured or shall be about to mature, instead of issuing a substitute Bond or Junior Lien Bond
the transfer agent may pay the same without surrender thereof.
Section 8. Payment of Series 2026 Bonds; Security; Priority of Lien. Principal of and
interest on the Series 2026 Bonds shall be payable solely from the Net Revenues, and to secure
such payment, there is hereby recognized the statutory lien upon the whole of the Net Revenues
which shall be a second lien, subject only to the statutory first lien established with respect to the
Senior Lien Bonds, to continue until payment in full of the principal of and interest on all Junior
Lien Bonds payable from the Net Revenues, or, until sufficient cash or Sufficient Government
Obligations have been deposited in trust for payment in full of all Junior Lien Bonds of a series
then outstanding, principal and interest on such Junior Lien Bonds to maturity, or, if called for
redemption, to the date fixed for redemption together with the amount of the redemption premium,
if any. The statutory lien on the Net Revenues created with respect to the Junior Lien Bonds
(including the Series 2026 Bonds) shall at all times be and remain subordinate and inferior to the
pledge of Net Revenues and the statutory first lien thereon authorized to be granted to secure any
Senior Lien Bonds hereafter issued.
Upon deposit of cash or Sufficient Government Obligations, as provided in the previous
sentences, the statutory lien shall be terminated with respect to that series of Bonds or Junior Lien
Bonds, the holders of that series shall have no further rights under this Ordinance except for
payment from the deposited funds, and the Bonds or Junior Lien Bonds of that series shall no
longer be considered to be outstanding under the Outstanding Ordinances or this Ordinance.
Section 9. Bondholders’ Rights; Receiver. The holder or holders of the Bonds or Junior
Lien 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 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, 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 Bonds or the Junior
Lien 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 Bonds and the Junior Lien Bonds shall have all other rights
and remedies given by Act 94 and law, for the payment and enforcement of the Bonds and the
Junior Lien Bonds and the security therefor.
Section 10. Management; Fiscal Year. The operation, repair and management of the
System and the acquisition and construction of the Project shall be under the supervision and
control of the City Commission. The City Commission, in accordance with the relevant provisions
of the City Charter, 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 Commission
may make such rules and regulations as it deems advisable and necessary to assure the efficient
management and operation of the System. The fiscal year of the System shall be the fiscal year of
the City.
Section 11. Rates and Charges. 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.
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, including the City.
Section 13. Fixing and Revising Rates; Rate Covenant. The rates now in effect are
estimated to be 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 provide for the payment of the principal of and interest on the
Bonds and the Junior Lien Bonds as the same become due and payable, and the maintenance of
the reserve therefor and to provide for all other obligations, expenditures and funds for the System
required by law and this Ordinance. In addition, it is agreed that the rates shall be set from time
to time so that there shall be produced each fiscal year Net Revenues in an amount not less than
110% of the principal of and interest on all Bonds coming due in each fiscal year and not less than
100% of the principal of and interest on all Junior Lien Bonds coming due in each fiscal year. The
rates shall be fixed and revised from time to time as may be necessary to produce these amounts,
and it is hereby covenanted and agreed to fix and maintain rates for services furnished by the
System at all times sufficient to provide for the foregoing.
Section 14. Funds and Accounts; Flow of Funds. The funds and accounts established by
the Outstanding Ordinances are hereby continued, the flow of funds established by the Outstanding
Ordinances, is hereby continued, and the applicable sections of the Outstanding Ordinances,
relating to funds and accounts and flow of funds are incorporated herein by reference as if fully
set forth.
Section 15. Bond Proceeds. The proceeds of the sale of the Series 2026 Bonds shall be
deposited in a bank or banks, designated by the City, qualified to act as depository of the proceeds
of sale under the provisions of Act 94, in an account designated 2026 WATER SUPPLY SYSTEM
PROJECT CONSTRUCTION FUND (the “Construction Fund”). Moneys in the Construction
Fund shall be applied solely in payment of the cost of the Project, including any engineering, legal
and other expenses incident thereto and to the financing thereof.
Section 16. Bond Form. The Series 2026 Bonds shall be in substantially the following
form with such changes or completion as necessary or appropriate to give effect to the intent of
this Ordinance and further subject to such modifications which may be required by the Michigan
Attorney General and the Authority and approved by bond counsel:
UNITED STATES OF AMERICA
STATE OF MICHIGAN
COUNTY OF MUSKEGON
CITY OF MUSKEGON
WATER SUPPLY SYSTEM JUNIOR LIEN REVENUE BOND, SERIES 2026[A/B]
REGISTERED OWNER: Michigan Finance Authority
PRINCIPAL AMOUNT: Dollars ($ )
DATE OF ORIGINAL ISSUE: September 3, 2026
The CITY OF MUSKEGON, County of Muskegon, State of Michigan (the “City”), for
value received, hereby promises to pay, but only out of the hereinafter described Net Revenues of
the City’s Water Supply System (hereinafter defined), to the Michigan Finance Authority (the
“Authority”), or registered assigns, the Principal Amount shown above, or such portion thereof as
shall have been advanced to the City pursuant to a Purchase Contract between the City and the
Authority and a Supplemental Agreement by and among the City, the Authority and the State of
Michigan acting through the Department of Environment, Great Lakes, and Energy, in lawful
money of the United States of America, unless prepaid or reduced prior thereto as hereinafter
provided.
During the time funds are being drawn down by the City under this Bond, the Authority
will periodically provide the City a statement showing the amount of principal that has been
advanced and the date of each advance, which statement shall constitute prima facie evidence of
the reported information; provided that no failure on the part of the Authority to provide such a
statement or to reflect a disbursement or the correct amount of a disbursement shall relieve the
City of its obligation to repay the outstanding principal amount actually advanced, all accrued
interest thereon, and any other amount payable with respect thereto in accordance with the terms
of this Bond.
The Principal Amount shall be payable on the dates and in the annual principal installment
amounts set forth on Schedule A attached hereto and made a part hereof, as such Schedule may be
adjusted if less than $ is disbursed to the City or if a portion of the Principal Amount is
prepaid as provided below, with interest on the principal installments from the date each
installment is delivered to the holder hereof until paid at the rate of two percent (2.00%) per annum.
Interest is first payable April 1, 2027 and semiannually thereafter and principal is payable on the
first day of April commencing April 1, 20__ (as identified in the Purchase Contract) and annually
thereafter.
Principal installments of this bond are subject to prepayment by the City prior to maturity
only with the prior written consent of the Authority and on such terms as may be required by the
Authority.
Notwithstanding any other provision of this bond, so long as the Authority is the owner of
this bond, (a) this bond is payable as to principal, premium, if any, and interest at U.S. Bank Trust
Company, National Association or at such other place as shall be designated in writing to the City
by the Authority (the "Authority's Depository"); (b) the City agrees that it will deposit with the
Authority's Depository payments of the principal of, premium, if any, and interest on this bond in
immediately available funds by 12:00 noon at least five business days prior to the date on which
any such payment is due whether by maturity, redemption or otherwise; in the event that the
Authority's Depository has not received the City's deposit by 12:00 noon on the scheduled day, the
City shall immediately pay to the Authority as invoiced by the Authority an amount to recover the
Authority's administrative costs and lost investment earnings attributable to that late payment; and
(c) written notice of any redemption of this bond shall be given by the City and received by the
Authority's Depository at least 40 days prior to the date on which such redemption is to be made.
Additional Interest
In the event of a default in the payment of principal or interest hereon when due, whether
at maturity, by redemption or otherwise, the amount of such default shall bear interest (the
“additional interest”) at a rate equal to the rate of interest which is two percent above the
Authority’s cost of providing funds (as determined by the Authority) to make payment on the
bonds of the Authority issued to provide funds to purchase this bond but in no event in excess of
the maximum rate of interest permitted by law. The additional interest shall continue to accrue
until the Authority has been fully reimbursed for all costs incurred by the Authority (as determined
by the Authority) as a consequence of the City’s default. Such additional interest shall be payable
on the interest payment date following demand of the Authority. In the event that (for reasons
other than the default in the payment of any municipal obligation purchased by the Authority) the
investment of amounts in the reserve account established by the Authority for the bonds of the
Authority issued to provide funds to purchase this bond fails to provide sufficient available funds
(together with any other funds which may be made available for such purpose) to pay the interest
on outstanding bonds of the Authority issued to fund such account, the City shall and hereby agrees
to pay on demand only the City’s pro rata share (as determined by the Authority) of such deficiency
as additional interest on this bond.
For prompt payment of principal and interest on this bond, the City has irrevocably pledged
the revenues of the Water Supply System of the City, including all appurtenances, extensions and
improvements thereto (the “System”), after provision has been made for reasonable and necessary
expenses of operation, maintenance and administration (the “Net Revenues”), and a statutory
second lien thereon is hereby recognized and created, subject to the senior lien of any additional
bonds of the City hereafter issued by the City, as set forth in the Ordinance (hereinafter defined).
The bonds of this issue are of equal standing and priority of lien as to the Net Revenues with the
City’s Water Supply System Junior Lien Revenue Bonds, Series 2019, the City’s Water Supply
System Junior Lien Revenue Bonds, Series 2020, the City’s Water Supply System Junior Lien
Revenue Bonds, Series 2022A, the City’s Water Supply System Junior Lien Revenue Bonds,
Series 2022B, the City’s Water Supply System Junior Lien Revenue Bonds, Series 2023, the City’s
Water Supply System Junior Lien Revenue Bonds, Series 2024 and the City’s Water Supply
System Junior Lien Revenue Bonds, Series 2025 (together, the “Outstanding Junior Lien Bonds”)
and any additional bonds hereafter issued by the City of equal standing and priority with the
Outstanding Junior Lien Bonds. The City has reserved the right to issue such additional Bonds
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which shall be superior and senior in all respects to the bonds of this issue as to the Net Revenues,
or of equal standing and priority of lien as to the Net Revenues.
Purchasers of the bonds of this issue, by their acceptance of the bonds of this issue or a
beneficial ownership interest therein, shall be deemed to have consented to the subordination of
their interest in and lien upon the Net Revenues upon the issuance of senior lien bonds subsequent
to the delivery of the bonds of this issue.
This bond is a single, fully-registered, non-convertible bond in the principal sum indicated
above issued pursuant to Ordinance No. 2565, duly adopted by the City Commission of the City
and the prior ordinances authorizing the issuance of the Outstanding Junior Lien Bonds (together,
the “Ordinances”), 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 part of the cost of acquiring and constructing additions, extensions and
improvements to the System.
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 superior and equal
standing may hereafter be issued and the general covenants and provisions pursuant to which this
bond is issued, reference is made to the above-described Ordinances.
This bond is a self-liquidating bond, payable, both as to principal and interest, solely and
only from the Net Revenues of the System. The principal of and interest on this bond are secured
by the statutory lien hereinbefore mentioned.
The City 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 interest upon and the principal of the bonds of this issue, the Outstanding Junior
Lien Bonds, any additional Bonds, and any additional Junior Lien Bonds, as and when the same
shall become due and payable, and to maintain a bond redemption fund (including a bond reserve
account, if any) 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 Ordinances.
This bond is transferable only upon the books of the City by the registered owner in person
or the registered owner’s attorney duly authorized in writing, upon the surrender of this bond
together with a written instrument of transfer satisfactory to the transfer agent, duly executed by
the registered owner or the registered owner’s attorney duly authorized in writing, and thereupon
a new bond or bonds in the same aggregate principal amount and of the same maturity shall be
issued to the transferee in exchange therefor as provided in the Ordinances, and upon payment of
the charges, if any, therein prescribed.
It is hereby certified and recited that all acts, conditions and things required by law to be
done precedent to and in the issuance of this bond have been done and performed in regular and
due time and form as required by law.
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IN WITNESS WHEREOF, the City of Muskegon, County of Muskegon, State of
Michigan, by its City Commission has caused this bond to be executed with the manual or
facsimile signatures of its Mayor and its City Clerk and the corporate seal of the City to be
impressed or imprinted hereon, all as of the Date of Original Issue.
CITY OF MUSKEGON
By
Mayor
(Seal)
Countersigned:
By
City Clerk
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EGLE Project Number: [7929-0 1a][7929-01b]
EGLE Approved Amt: $
SCHEDULE A
Based on the schedule provided below unless revised as provided in this paragraph, repayment of the
principal of the bond shall be made until the full amount advanced to the City is repaid. In the event the Order of
Approval issued by the Department of Environment, Great Lakes and Energy (the “Order”), approves a principal amount
of assistance less than the amount of the bond delivered to the Authority, the Authority shall only disburse principal
up to the amount stated in the Order. In the event (1) that the payment schedule approved by the City and described
below provides for payment of a total principal amount greater than the amount of assistance approved by the Order
or (2) that less than the principal amount of assistance approved by the Order is disbursed to the City by the Authority,
or (3) that any portion of the principal amount of assistance approved by the Order and disbursed to the City is forgiven
pursuant to the Order, the Authority shall prepare a new payment schedule which shall be effective upon receipt by
the City.
Maturity Date Principal Amount
April 1, 2028
April 1, 2029
April 1, 2030
April 1, 2031
April 1, 2032
April 1, 2033
April 1, 2034
April 1, 2035
April 1, 2036
April 1, 2037
April 1, 2038
April 1, 2039
April 1, 2040
April 1, 2041
April 1, 2042
April 1, 2043
April 1, 2044
April 1, 2045
April 1, 2046
April 1, 2047
Interest on the bond shall accrue on that portion of principal disbursed by the Authority to the City which has
not been forgiven pursuant to the Order from the date such portion is disbursed, until paid, at the rate of 2.00% per
annum, payable April 1, 2027, and semi-annually thereafter.
The City agrees that it will deposit with the Authority’s Depository, or such other place as shall be designated
in writing to the City by the Authority payments of the principal of, premium, if any, and interest on this bond in
immediately available funds by 12:00 noon at least five business days prior to the date on which any such payment is
due whether by maturity, redemption or otherwise. In the event that the Authority’s Depository has not received the
City’s deposit by 12:00 noon on the scheduled day, the City shall immediately pay to the Authority as invoiced by the
Authority an amount to recover the Authority’s administrative costs and lost investment earnings attributable to that
late payment.
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Section 17. Negotiated Sale; Application toEGLE and Authority, Execution of
Documents. The City determines that it is in the best interest of the City to negotiate the sale of
the Series 2026 Bonds to the Authority because the Drinking Water State Revolving Fund
financing programs provide significant interest savings to the City compared to competitive sale
in the municipal bond market and principal forgiveness. The Authorized Officers are hereby
authorized to make application to the Authority and to the EGLE for placement of the Series 2026
Bonds with the Authority. The actions taken by the Authorized Officers with respect to the Series
2026 Bonds prior to the adoption of this Ordinance are ratified and confirmed. The Authorized
Officers are authorized to execute and deliver the Purchase Contract, the Supplemental Agreement
and the Issuer’s Certificate. Any Authorized Officer is further authorized to execute and deliver
such contracts, documents and certificates as are necessary or advisable to qualify the Series 2026
Bonds for the Drinking Water State Revolving Fund. Prior to the delivery of the Series 2026
Bonds to the Authority, any Authorized Officer is hereby authorized to make such changes to the
form of the Series 2026 Bonds contained in Section 16 of this Ordinance as may be necessary to
conform to the requirements of Act 227, Public Acts of Michigan 1985, as amended (“Act 227”),
including, but not limited to changes in the principal maturity and interest payment dates and
references to additional security required by Act 227.
Section 18. Covenant Regarding Tax Exempt Status of the Bonds. The City shall, to the
extent permitted by law, take all actions within its control necessary to maintain the exemption of
the interest on the Series 2026 Bonds from general federal income taxation (as opposed to any
alternative minimum or other indirect taxation) under the Internal Revenue Code of 1986, as
amended (the “Code”), including, but not limited to, actions relating to any required rebate of
arbitrage earnings and the expenditure and investment of Series 2026 Bonds proceeds and moneys
deemed to be Bond proceeds.
Section 19. Approval of Bond Counsel. The representation of the City by Miller, Canfield,
Paddock and Stone, P.L.C. (“Miller Canfield”), as bond counsel is hereby approved,
notwithstanding the representation by Miller Canfield of the Authority in connection with its
financing programs and borrowings.
Section 20. Approval of Bond Details. The Authorized Officers are each hereby
authorized to adjust the final bond details set forth herein to the extent necessary or convenient to
complete the transaction authorized herein, and in pursuance of the foregoing is authorized to
exercise the authority and make the determinations authorized pursuant to Section 7a(1)(c) of Act
94, including but not limited to determinations regarding interest rates, prices, discounts,
maturities, principal amounts, denominations, dates of issuance, interest payment dates,
redemption rights, the place of delivery and payment, and other matters, provided that the principal
amount of Series 2026 Bonds issued shall not exceed the principal amount authorized in this
Ordinance, the interest rate per annum on the Series 2026 Bonds shall not exceed two percent
(2.00%) per annum, and the Series 2026 Bonds shall mature in not more than twenty (20) annual
installments.
Section 21. Savings Clause. All ordinances, resolutions or orders, or part thereof, in
conflict with the provisions of this Ordinance are, to the extent of such conflict, repealed.
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Section 22. Severability; Paragraph Headings; and Conflict. If any section, paragraph,
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 paragraph
headings in this Ordinance are furnished for convenience of reference only and shall not be
considered to be part of this Ordinance.
Section 23. Publication and Recordation. This Ordinance shall be published in full in the
Muskegon Chronicle, a newspaper of general circulation in the City qualified under State law to
publish legal notices, promptly after its adoption, and shall be recorded in the Ordinance Book of
the City and such recording authenticated by the signatures of the Mayor and the City Clerk.
Section 24. Effective Date. This Ordinance shall be effective upon its adoption and
publication.
ADOPTED AND SIGNED THIS 14th day of July, 2026.
Signed. Wor Yobwren—
Mayor
signed.a Qe
‘City Clerk
I HEREBY CERTIFY that the foregoing constitutes a true and complete copy of an Ordinance
duly adopted by the City Commission of the City of Muskegon, County of Muskegon, Michigan,
at a regular meeting held on July 14, 2026, and that the meeting was conducted and public notice
of the meeting was given pursuant to and in full compliance with the Open Meetings Act, being
Act 267, Public Acts of Michigan, 1976, and that the minutes of the meeting were kept and will
be or have been made available as required by the Act.
I further certify that the following Members were present at the meeting: Johnson, Kilgo,
Keener, German, Jackson, Kochin, and St.Clair and that the following Members were absent:
None.
I further certify that Commissioner Kilgo moved for adoption of the Ordinance, and that
the motion was supported by Commissioner Kochin.
I further certify that the following Members voted for adoption of the Ordinance: Kilgo,
Keener, German, Jackson, Kochin, St.Clair, and Johnson and that the following Members voted
against adoption of the Ordinance: None.
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I further certify that the Ordinance has been recorded in the Ordinance Book and that such
recording has been authenticated by the signatures of the Mayor and the City Clerk.
~ City Clerk
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