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General
obligation bonds. 237. Section
1. The city may borrow money within the
limits of legal indebtedness of the city and issue its general obligation
bonds therefor for the purpose of
*State law references—Bonding
power of municipalities generally, MCL § 117.5, MSA § 5.2084; limitation
of net bonded indebtedness incurred for all public purposes, MCL §
117.4a(l), MSA § 5.2074(1).
paying a part or all of the cost of any general public improvement
authorized by chapter XIV of this charter or by law; and also for the
purpose of paying part or all of that portion of a special assessment
improvement, not exceeding forty (40) per cent of the entire cost of such
improvement, which the council shall have determined that the city shall
pay; and also for the portion of a special assessment to be paid by taxes
levied upon a special assessment improvement district in anticipation of
the collection of such special assessment taxes; and shall pledge the full
faith and credit of the city for the full and punctual payment of such
general obligation bonds; provided that no general obligation bonds,
except special assessment bonds, bond for the city portion of local
improvements not to exceed forty (40) per cent of the cost of such
improvement, refunding bonds and bonds for relief from fire, flood or
calamity or for payment of judgments, shall be issued unless approved by
three-fifths of the electors voting thereon at a general or special
election. At no time shall the bonded indebtedness of the city exceed
eight (8) per centum of the assessed valuation of all real and personal
property in the city; provided, that school bonds, bonds issued to defray
costs of improvements to be paid by special assessments and bonds issued
to defray the cost of purchasing or installing, improving or extending
public utilities which are issued in accordance with section 18 of this
chapter shall not be included in the aforesaid limitation.
State law reference—City authority to borrow money on credit of city
and issue bonds therefor, MCL § 117.4a(l), MSA § 5.2074(1).
Special
assessment bonds.
238.
Section 2. The council shall have authority
to raise money by loan, in anticipation of the receipts from special
assessments, for the purpose of defraying the costs of the improvement for
which the assessment was levied. Bonds or notes may be issued for such
loans which shall not exceed the amount of the assessment for the
completion of the whole work, nor shall such loan be made until after the
special assessment roll shall have been confirmed. The council shall
pledge the faith and credit of the city for the payment of such loan.
State law reference—Authority of
city to borrow and issue bonds thereof in anticipation of the payment of
special assessments, MCL § 117.4(a)(2), MSA § 5.2074(2).
Refunding bonds.
239. Section 3.
The council, when it deems it necessary to extend the
time of payment of bonds falling due, may issue new bonds in the place of
the former bonds, in such manner as merely to change, but not increase the
indebtedness of the city.
State law reference—Refunding bonds, MCL § 136.1 et seq., MSA §
5.3188(28) et seq.
Bonds in case of fire, flood, etc.
240.
Section 4. In case of fire, floods, and
other calamity, the council may borrow, for the relief of the inhabitants
of the city and for the preservation of municipal property, a sum not
exceeding one-quarter of one per centum of the assessed value of all real
and personal property in the city, due in not more than three (3) years.
For any such loan lawfully made, the bonds of the city may be issued,
payable hi equal annual installments.
Resolution for general obligation bonds.
241. Section 5.
Whenever the council shall deem it advisable to borrow
money and issue the general obligation bonds of the city therefor, for any
purpose authorized by this charter or by law, it shall so declare by
resolution, and in said resolution shall set forth a general description
and the full cost of the improvement for which bonds are to be issued and
the definite amount of money to be borrowed and to be evidenced by bonds,
which amount in the case of special assessment bonds shall correspond with
the amounts still unpaid upon each installment of such special assessment
at the tune of the issuance of said bonds. If the bonds are such as to
require the authorization of the electors, said resolution shall fix the
date of the election at which the proposition shall be submitted to the
electors, prescribe the form in which the question shall appear upon the
ballot, and call the election.
Elections—Generally.
242. Section 6.
Except as in this chapter otherwise provided, bond
elections shall be called, held and conducted in the manner provided in
chapter III of this charter relating to elections.
Same—Determination of
results.
243. Section 7.
The determination by the council of the result of any
bond election shall, except for fraud, be final and conclusive for all
purposes, unless court proceedings to contest the validity of proceedings
taken in the matter of the authorization of such bonds prior to and
including such declaration, be instituted within thirty (30) days after
the day of such declaration.
Condition, terms to be determined by council.
244. Section 8.
When any bonds are authorized to be issued by the
qualified electors of the city, the council, by resolution shall provide
for their issuance. In such resolution it shall determine the date of
issuance of such bonds, but such date shall not be prior to the date of
the election at which they were authorized, the date or dates of their
maturity, which shall not exceed thirty (30) years from their date of
issuance; their denominations; their place of payment, which may be
anywhere in the United States; their rate of interest, which shall not
exceed five (5) per centum per annum in amount and which interest shall be
paid semiannually, and their form. Every bond issued by the city shall
contain on its face a statement specifying the object for which it is
issued, and the fund or funds from which such bond and interest thereon
are payable. Bonds issued hereunder shall be coupon bonds. The city may,
at its discretion, reserve the right to pay the bonds before maturity upon
any interest paying date, and if such reserved right be exercised, shall
give notice of redemption by mailing such notice to the last known holder
and also by publication in a newspaper, published in said city, once a
week for three (3) successive weeks prior to the date fixed for
redemption, and if the bond be not then presented, it shall cease to bear
interest from and after the date so fixed for redemption.
Execution
of bonds and coupons.
245. Section 9.
Such bonds shall be signed by the mayor; countersigned
by the city clerk and sealed with the seal of the city. Interest coupons
attached to such bonds shall hear the original or printed or lithographed
signature of the city clerk.
Taxes
and sinking fund for general obligation bonds.
246. Section 10.
In the resolution authorizing the issuance of general
obligation bonds, the council shall make full provision for the levy of an
annual tax upon all the taxable property of the city sufficient to pay the
semiannual interest on such bonds as the same becomes due and a like tax
sufficient to pay the principal of such bonds as it becomes due. Such
taxes shall be assessed and collected in the same manner as other city
taxes; provided that in the case of serial bonds which fall due annually,
the provisions of this section shall not apply. The proceeds of such taxes
shall be deposited by the city treasurer in
a. fund separate from all other moneys,
which fund shall be designated by name in such manner as to identify it
with the bonds, to pay the interest and principal of which such taxes were
levied. The moneys in such sinking fund shall be used only for the purpose
of paying the interest and principal of the particular issue of bonds, to
pay which such taxes were levied.
Sinking
fund for special assessment bonds.
247. Section 11.
The treasurer shall collect the several installments of
any special assessment, together with interest thereon, and shall pay the
proceeds thereof into a fund separate from all other funds and designated
as "Special Assessment Sinking Fund No. ___" (number to correspond with
number of special assessment roll). The moneys in said sinking fund shall
be used only for the purpose of paying the principal and interest of such
special assessment bonds.
Time limit for issuance.
248. Section 12.
All bonds must be issued and delivered to the
purchasers thereof, within three (3) years after the day of the election
at which such bonds were authorized, or in case of bonds not requiring
authorization by the electors, within three (3) years after the date on
which the council determined to issue the same.
Sale at face value required.
249. Section 13.
No bonds issued under the provisions of this charter
shall be sold at a price amounting to less than their face value with
accrued interest thereon to the date of their delivery to the purchaser
thereof. The council shall have no power to make purchasers of any such
bonds allowances for legal expenses, for printing the bonds or for any
other purpose whatsoever, when the total of any such allowances would
result in the city obtaining for such bonds less than the face value
thereof, together with accrued interest to date of delivery.
Handling of proceeds of
bond sale.
250. Section 14.
The proceeds resulting from the sale of any issue of
bonds, including any premium received therefor, shall be deposited in a
fund, separate from all other funds and such proceeds shall be used only
for the purpose for which said bonds were issued. If, after the payment in
full of the cost of the improvement for which such bonds were issued,
there remain any moneys in such special fund, then the treasurer shall
immediately so report to the council and it shall order the treasurer to
transfer all such moneys to the sinking fund established for the payment
of the principal and interest of said bonds.
Power of
council to borrow in anticipation of revenues to pay installments.
251. Section 15.
Should the first semiannual installment of interest
become due before the necessary tax to pay the same has been collected,
the council shall have the power to borrow from the contingent fund and
also, if need be, from the proper general fund, sufficient moneys to pay
such first semiannual installment of interest due on bonds; provided,
however, that all moneys so borrowed shall be returned to the fund or
funds from which borrowed, out of the first proceeds of such interest tax
when collected.
Sinking fund investments.
252. Section 16.
The city treasurer shall deposit the moneys belonging
to any sinking fund in banks in the same manner in which he deposits other
city moneys. The council shall from time to time invest the moneys in any
such sinking fund in general obligation and special assessment bonds of
the city, or in general obligation bonds of any township, school district,
village, city or county of the State of Michigan; or in bonds of the State
of Michigan or of the United States; provided, that no bonds shall be
purchased for any such sinking fund which do not mature prior to the date
of maturity of bonds to pay which such sinking fund was constituted. All
bonds purchased by moneys from any sinking funds shall be placed in such
depository as the council shall by resolution determine. No. bonds shall
be withdrawn from such depository except upon the production of a
certified copy of a resolution of the council directing such withdrawal in
which resolution the names and numbers of the bonds to be withdrawn shall
be specified. The mayor and the city clerk shall accompany the treasurer
whenever such bonds are withdrawn from the depository or coupons clipped
from such bonds.
Balances in sinking funds.
253. Section 17.
If, after the payment in full of the principal and
interest of any issue of bonds, a balance should remain in the sinking
fund established to pay such bonds, the treasurer shall so report to the
council. Such balance shall remain in such sinking fund and may be
invested in the manner herein provided for the investment of moneys in
sinking funds.
Public utility mortgage bonds—Generally.
254. Section 18.
When the city, in accordance with the provisions of
this charter, has been authorized to acquire and operate any public
utility, it may issue mortgage bonds beyond the legal indebtedness limit
of eight (8) per centum as provided in this charter, to help pay the cost
of acquiring such public utility; provided, that such mortgage bonds,
issued beyond said legal indebtedness limit, shall not impose any
liability, either as to the interest or principal, upon the city; but
shall be secured only by the property and revenues of such public utility,
including a franchise stating the terms upon which, in case of
foreclosure, the purchaser may operate the same which franchise shall in
no case extend for a longer period than twenty (20) years from the date of
the sale of such utility and franchise on foreclosure.
Same—Vote of qualified electors.
255. Section 19.
Prior to the issuance of any public utility mortgage
bonds, the council shall submit to the qualified electors of the city, the
proposition of the granting of the franchise mentioned in the preceding
section. Such bonds shall not be issued or such franchise granted unless
approved by the affirmative vote of three-fifths of the qualified electors
voting thereon at the election at which such propositions are submitted.
In the resolution authorizing the issuance of such bonds, the council
shall create a sinking fund into which shall be paid such percentage of
the gross or net earnings of the public utility as may be deemed necessary
and sufficient for the payment of the mortgage bonds at maturity.
Bonds to
satisfy judgment or decree.
256. Section 20.
Whenever any judgment or decree of any court shall be
rendered or decreed against the city and the city shall be unable to meet
the payment of such judgment or decree by reason of the limitation of its
powers of taxation, then and in such case it shall be lawful for the
council to issue the bonds of the city to an amount not exceeding the sum
of such judgment or decree, and the taxed costs arising in the procuring
of such judgment or decree, together with the interest thereon, which
bonds may be made payable at such time and place and at such rate of
interest, not exceeding five (5) per centum per annum, as shall be
prescribed by the council, and such bonds shall be sold and disposed of at
not less than par value, in such manner as may be deemed advisable by the
council.
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