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HomeMy WebLinkAboutResolutions - 1987.02.05 - 17973Febri>iry 5th, 1987 Miscellaneous Resolution # 87008 BY PLANNING & BUILDING COMMITTEE, Anne M. Hobart, Chairperson DRAIN COMMISSIONER-- IN RE: RESOLUTION TO APPROVE AUBURN HILLS WATER SUPPLY SYSTEM EXTENSION NO. 3 CONTRACT AND CLINTON-OAKLAND SEWAGE DISPOSAL SYSTEM AUBURN HILLS EXTENSION NO. 2 CONTRACT AND TO AUTHORIZE THE ISSUANCE OF BONDS TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS Mr. Chairperson, Ladies and Gentlemen: WHEREAS, the County of Oakland (the "County") has heretofore established and constructed and acquired the Pontiac Township Water Supply System pursuant to the provisions of Act No. 185, Public Acts of Michigan, 1957, as amended, ("Act 185") and pursuant to the WATER SUPPLY SYSTEM CONTRACT BETWEEN OAKLAND COUNTY AND PONTIAC TOWNSHIP dated as of February 15, 1965; and WHEREAS, the Pontiac Township Water Supply System is now known as the Auburn Hills Water Supply System and it is now necessary to improve, enlarge and extend the Auburn Hills Water Supply System by the acquisition and construction of the hereinafter described Auburn Hills Water Supply System Extension No. 3; and WHEREAS, the County has heretofore established and constructed and acquired the Clinton-Oakland Sewage Disposal System pursuant to Act 185 to serve the Clinton-Oakland Sewage Disposal District, within which district lies a part of the City of Auburn Hills (the "City"); and WHEREAS, it is now necessary to improve, enlarge and extend the Clinton-Oakland Sewage Disposal System by the acquisition and construction of the hereinafter described Clinton-Oakland Sewage Disposal System Auburn Hills Extension No. 2; and WHEREAS, by the terms of Act 342, Public Acts of Michigan, 1939, as amended ("Act 342"), the County and the City are authorized to enter into contracts for the acquisi- tion, construction and financing of the Auburn Hills Water Supply System Extension No. 3 and the Clinton-Oakland Sewage Disposal System Auburn Hills Extension No. 2 consisting of water supply facilities and sewage disposal facilities to serve the City and for the payment of the cost thereof by the City, with interest, and the County is then authorized to issue its bonds to provide the funds necessary therefor; and WHEREAS, there have been submitted to this Board of Commissioners proposed contracts between the County, by and through the County Drain Commissioner, County Agency, party of the first part, and the City, party of the second part, which contracts provide for the acquisition, construction and financing of the Auburn Hills Water Supply System Exten- sion No. 3 (the "water project") and the Clinton-Oakland Sewage Disposal System Auburn Hills Extension No. 2 (the "sewer project") pursuant to Act 342, which contracts are hereinafter set forth in full; and WHEREAS, there have been submitted for approval and adoption by this Board, plans, specifications and estimates of the cost and period of usefulness of the water project and the sewer project; and WHEREAS, the said contracts provide for the issu- ance of bonds by the County to defray the cost of the water project and the sewer project, said bonds to be secured by the contractual obligation of the City to pay to the County -2- amounts sufficient to pay the principal of and interest on the hereinafter authorized bonds and to pay such paying agent fees and other expenses as may be incurred on account of said bonds. THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMIS- SIONERS OF OAKLAND COUNTY, MICHIGAN, as follows: 1. PLANS AND SPECIFICATIONS - ESTIMATES OF PERIOD OF USEFULNESS AND COST. The plans and specifications for the projects and the estimates of $3,130,000 as the cost thereof and of 40 years and upwards as the period of useful- ness thereof, as submitted to this Board of Commissioners be and the same are hereby approved and adopted. 2. APPROVAL OF CONTRACTS. The Auburn Hills Water Supply System Extension No. 3 Contract dated as of January 1, 1987, and the Clinton-Oakland Sewage Disposal System Auburn Hills Extension No. 2 Contract dated as of January 1, 1987, between the County, by and through the County Drain Commissioner, party of the first part, and the City, party of the second part, which contracts have been submitted to this Board of Commissioners, be and the same hereby are approved and adopted, and the County Drain Commissioner is authorized and directed to execute and deliver the same for and on behalf of the County, in as many counterparts as may be deemed advisable, after the contracts have been executed by the appropriate officials of the City. Said contracts read as follows: -3-- AUBURN HILLS WATER SUPPLY SYSTEM EXTENSION NO. 3 CONTRACT THIS CONTRACT, made and entered into as of the first day of January, 1987 by and between the COUNTY OF OAKLAND, a county corporation in the State of Michigan (hereinafter sometimes referred to as the "County"), by and through its Drain Commissioner, County Agency, party of the first part, and the CITY OF AUBURN HILLS, a city located in the County (hereinafter sometimes referred to as the "City"), party of the second part. WITNESSET H: WHEREAS, the County heretofore has established and constructed and acquired the Pontiac Township Water Supply System pursuant to the provisions of Act No. 185, Public Acts of Michigan, 1957, as amended, and pursuant to the WATER SUPPLY SYSTEM CONTRACT BETWEEN OAKLAND COUNTY AND PONTIAC TOWNSHIP, dated February 15, 1965; and WHEREAS, the Pontiac Township Water Supply System is now known as the Auburn Hills Water Supply System and it is necessary to improve, enlarge and extend the Auburn Hills Water Supply System by the acquisition and construction of the hereinafter described water supply facilities; and WHEREAS, pursuant to Act No. 342, Public Acts of Michigan, 1939, as amended (hereinafter sometimes referred to as "Act 342"), the Board of Commissioners of the County, by majority vote of its members-elect, has authorized and directed that there be established a County system of water supply improvements and services to serve the City, said system to be known as the "Auburn Hills Water Supply System Extension No. 3" (hereinafter sometimes referred to as the "County System" or as the "System"), and has designated the Oakland County Drain Commissioner as the County Agency for the System with all powers and duties with respect thereto as are provided by Act 342 (said Drain Commissioner being hereinafter sometimes referred to as the "County Agency"); and WHEREAS, under and subject to the terms of Act 342, the County is authorized, through the County Agency, to acquire and construct the water supply facilities herein- after described as constituting the County System, the County and the City are authorized to enter into a contract for the acquisition and construction of the System by the County and for financing all or part of the cost thereof by the issuance of bonds by the County secured by the pledge of the full faith and credit of the City to pay such cost with interest to the County in installments extending over a period not exceeding forty (40) years and the County is authorized to issue such bonds and to pledge its full faith and credit for the payment of such bonds and the interest thereon; and WHEREAS, there is an urgent need for such water supply facilities to provide water to areas of the City not presently served by the Auburn Hills Water Supply System and thus to promote the health and welfare of the residents thereof, which facilities would likewise benefit the County and its residents, and the parties hereto have concluded that such facilities can be provided and financed most economically and efficiently by the County through the exer- -2- else of the powers conferred by Act 342, and especia Sections 5a, 5b and 5c thereof; and WHEREAS, preliminary plans for the System and estimates of the cost and the period of usefulness of the System have been prepared by Orchard, Hiltz & McCliment, Inc. (hereinafter sometimes referred to as the consulting engineers) and have been submitted to and approved by the Board of Commissioners of the County and the Council of the city and placed on file in the office of the County Agency, said estimates being set forth in Exhibit B hereunto attached; and WHEREAS, in order to provide for the acquisition and construction of the System by the County and the finan- cing of the cost thereof by the issuance of County bonds, and for other related matters, it is necessary for the parties hereto to enter into this contract. THEREFORE, IN CONSIDERATION OF THE PREMISES AND THE COVENANTS OF EACH OTHER, THE PARTIES HERETO AGREE AS FOLLOWS: I. The parties hereto hereby approve and agree to the establishment, acquisition, construction and financing of the Auburn Hills Water Supply System Extension No. 3, as herein provided, under and pursuant to Act 342. The City, by way of compliance with Section 29, Article VII, Michigan Constitution of 1963, consents and agrees to the establish- ment and location of the System within its corporate boundaries and to the use by the County of its streets, highways, alleys, lands, rights-of-way or other public -3- places for the purpose and facilities of the System and any improvements, enlargements and extensions thereof, and the City further agrees that, in order to evidence and effectu- ate the foregoing agreement and consent, it will execute and deliver to the County such grants of easement, right-of-way, license, permit or consent as may be requested by the County. 2. The Auburn Hills Water Supply System Extension No. 3 shall consist of the water supply facilities shown and described on Exhibit A which is hereunto attached and which is hereby made a part hereof, and as are more particularly set forth in the preliminary plans which have been prepared and submitted by the consulting engineers which plans are on file with the County Agency and are hereby approved and adopted. The System shall be acquired and constructed substantially in accordance with the said preliminary plans and in accordance with final plans and specifications to be prepared and submitted by the consulting engineers, but variations therefrom which do not materially change the location, capacity or overall design of the System, and which do not require an increase in the total estimated cost of the System, may be permitted on the authority of the County Agency. Other variations or changes may be made if approved by the County Agency and by resolution of the City Council and if provisions required by paragraph 8 hereof are made for payment or financing of any resulting increase in the total estimated cost. The estimate of cost of the System and the estimate of period of usefulness thereof as set forth in Exhibit B are hereby approved and adopted. -4- 3. The County Agency shall take or cause to be taken all actions required or necessary, in accordance with Act 342, to procure the issuance and sale of bonds by the County, in one or more series, in whatever aggregate princi- pal amount is necessary to defray that part of the total cost of the County System which is in excess of funds avail- able from other sources. Such bonds shall be issued in anticipation of, and be payable primarily from, the payments to be made by the City to the County as provided in this contract and shall be secured secondarily, if so voted by the Board of Commissioners of the County, by the pledge of the full faith and credit of the County, and the said bonds shall be payable in annual maturities the last of which shall be not more than forty years from the date thereof. 4. The County Agency shall proceed to take construction bids for the System and, subject to the sale and delivery of said bonds, enter into construction contracts with the lowest responsive and responsible bidder or bidders, procure from the contractors all necessary and proper bonds and insurance, cause the System to be constructed within a reasonable time and do all other things required by this contract and the laws of the State of Michigan and the United States of America. All certificates for required payments to contractors shall be approved by the consulting engineers before presentation to the County Agency and the latter shall be entitled to rely on such approval in making payment. The County agrees that it will secure, or cause to be secured, and maintained during the period of construction adequate property damage and public liability insurance -5- covering all facilities to be constructed pursuant to this contract. All policies and memorandums of insurance shall provide that the County and the City shall be insured parties thereunder and shall contain a provision requiring that the City be notified at least ten days prior to cancel- lation thereof. One copy of each policy and memorandum of insurance shall be filed with the City. 5. It is understood and agreed by the parties hereto that the System is to serve the City and not the individual property owners and users thereof, unless by special arrangement between the County Agency and the City. The responsibility of requiring connection to and use of the System and/or providing such additional facilities as may be needed shall be that of the City which shall cause to be constructed and maintained, directly or through the County, any such necessary additional facilities. The County shall not be obligated to acquire or construct any facilities other than those designated in paragraph 2 hereof. 6. The City shall pay to the County the total cost of the System (less such funds as may become available from other sources), which total cost for this purpose shall include, in addition to the items of the nature set forth in Exhibit B (represented by the principal amount of the bonds to be issued by the County plus such funds as may become available from other sources), all interest payable by the County on said bonds and all paying agent fees and other expenses and charges (including the County Agency's adminis- trative expenses) which are payable on account of said bonds (such fees, expenses and charges being herein called "bond service charges"). Such payments shall be made to the -6- County in annual installments which shall be due and payable at least thirty days prior to the day of the month specified in the County bonds as the annual principal maturity date thereof. Such an annual installment shall be so paid in each year if any principal and/or non-capitalized interest on said bonds falls due during the twelve-month period beginning on such principal maturity date in said year, and the amount of each installment so due and payable shall be at least sufficient to pay all such principal and/or interest thus falling due and all bond service charges then due and payable. The County Agency, within thirty days after delivery of the County bonds to the purchaser, shall furnish the City Treasurer with a complete schedule of the principal and interest maturities thereon, and the County Agency, at least thirty days before each payment is due to be made by the City, also shall advise the City Treasurer of the amount payable to the County on such date. If the City fails to make any payment to the County when due, the same shall be subject to a penalty of 1% thereof for each month or fraction thereof that such amount remains unpaid after due. Failure of the County Agency to furnish the schedule or give the notice as above required shall not excuse the City from the obligation to make payment when due. Such payments shall be made by the City when due whether or not the System has then been completed or placed in operation. In the event that additional County bonds shall be issued under the authority of this contract to defray a part of the cost of the System, the foregoing obligations shall apply to such part of the cost and to said additional bonds insofar as appropriate thereto. -7- 7. The City may pay in advance any amount payable to the County pursuant to this contract and in that event shall be credited therefor on future-due amounts as may be agreed by the parties hereto. The City also may pay in advance any one or more installments or any part thereof (a) by surrendering to the County any of said County bonds of like principal amount or (b) by paying to the County in cash the principal amount of any County bonds which are subject to redemption prior to maturity plus all interest thereon to the first date upon which such bonds may be called for redemption and all applicable call premiums and bond service charges, and in such event the County Agency shall call said bonds for redemption at the earliest possible date. The installments or parts thereof so prepaid shall be deemed to be the installments or parts thereof falling due in the same calendar year as the maturity dates of the bonds surrendered or called for redemption and bonds so surrendered or redeemed shall be cancelled. 8. In the event that it shall become necessary to increase the estimated cost of the System as hereinbefore stated, or if the actual cost of the system shall exceed the estimated cost, whether as the result of variations or changes permitted to be made in the approved plans or other- wise, then (without execution of any further contract or amendment of this contract) the City Council, by resolution adopted within fifteen days after the receipt of construc- tion bids, may direct that a portion of the System be deleted sufficient to reduce the total cost to an amount which shall not exceed the total estimated cost as herein- before stated by more than 5%, provided that such deletion shall not materially change the general scope, overall -8- design and purpose of the System, or in the absence of the adoption of such a resolution the City shall pay or procure the payment of the increase or excess in cash, or County bonds in an increased or additional amount (upon adoption of an authorizing resolution therefor by the Board of Commis- sioners) shall be issued to defray such increased or excess cost to the extent that funds therefor are not available from other sources: Provided, however, that no such increase or excess shall be approved and no such increased or additional County bonds shall be authorized to be issued, nor shall the County enter into any contract for acquisition or construction of the System or any part thereof or incur any obligation for or pay any item of cost therefor, where the effect thereof would be to cause the total cost of the System to exceed by more than 5% its total estimated cost as hereinbefore stated, unless the City Council previously shall have adopted a resolution approving such increase or excess and agreeing that the same (or such part thereof as is not available from other sources) shall be paid or its payment procured by the City in cash or be defrayed by the issuance of increased or additional County bonds in antici- pation of increased or additional payments agreed to be made by the City to the County in the manner hereinbefore provided: Provided, further, that the adoption of such resolution by the City Council shall not be required prior to or as a condition precedent to the issuance of additional bonds by the County if the County has previously issued or contracted to sell bonds to pay all or part of the cost of the System and the issuance of the additional bonds is necessary (as determined by the County) to pay such increased, additional or excess costs as are essential to completion of the System according to the plans as last -9- approved prior to the time when the previous bonds were issued or contracted to be sold. 9. In the event that the actual cost of the System is less than the total estimated cost, then any surplus available to the County from the sale of County bonds, at the option of the City Council, shall be used to improve, enlarge or extend the System, to apply upon future payments due to the County, to redeem bonds or to purchase bonds on the open market, provided that such surplus shall be used to improve, enlarge or extend the System only if authorized by the Board of Commissioners. Any such surplus, for the purpose of improving, enlarging or extending the System, may be supplemented by cash payments to be made by the City, or such improvements, enlargments or extensions may be financed entirely from such cash payments if author- ized by the City Council. If such surplus is used to redeem or purchase bonds, the same shall be cancelled, and the payments thereafter required to be made by the City to the County shall be reduced so as to reflect the resulting saving of interest and the payment required to be made in the calendar year of the stated maturity of said bonds shall be reduced by the principal amount thereof. 10. Should the City fail for any reason to pay the County at the times specified the amounts herein required to be paid, the City hereby authorizes the State Treasurer or other official charged with the disbursement of unrestricted state funds returnable to the City pursuant to the Michigan constitution to withhold sufficient funds to make up any default or deficiency in funds. If the full faith and credit of the County is pledged for the prompt payment of -10- the principal of and interest on the bonds to be issued by the County and if the County is required to advance any money by reason of such pledge on account of the delinquency of the City, the County Treasurer is hereby authorized to notify the State Treasurer to deduct the amount of money so advanced by the County from any unrestricted moneys in the State Treasurer's possession belonging to the City and to pay such amount to the County. The foregoing shall not operate to limit the County's right to pursue any other legal remedies for the reimbursement of moneys advanced on account of the default of the City. 11. The City, pursuant to the authorization of Section 5a of Act No. 342, hereby pledges its full faith and credit for the prompt and timely payment of its obligations expressed in this contract and each year shall levy a tax in an amount which, taking into consideration estimated delin- quencies in tax collections, will be sufficient to pay its obligations under this contract becoming due before the time of the following year's tax collections: Provided, however, that if at the time of making its annual tax levy the city shall have on hand in cash other funds (including but not limited to funds from special assessments, user charges or connection fees) which have been set aside and pledged or are otherwise available for the payment of such contractual obligations falling due prior to the time of the next tax collection, then the annual tax levy may be reduced by such amount. The City Council each year, at least 90 days prior to the final date provided by law for the making of the annual City tax levy, shall submit to the County Agency a -11- written statement setting forth the amount of its obligations to the County which become due and payable under this contract prior to the time of the next following year's tax collections, the amount of the funds which the City has or will have on hand or to its credit in the hands of the County which have been set aside and pledged for payment of said obligations to the County and the amount of the City taxes next proposed to be levied for the purpose of raising money to meet such obligations. The County Agency shall review such statement promptly and, if he finds that the proposed City tax levy is insufficient, he shall so notify the City Council, and the City hereby covenants and agrees that it thereupon will increase its levy to such extent as may be required by the County Agency. 12. No change in the jurisdiction over any terri- tory in the City shall impair in any manner the obligations of this contract or affect the obligations of the City here- under. In the event that all or any part of the territory of the City is incorporated as a new city or village or is annexed to or becomes a part of the territory of another municipality, the municipality into which such territory is incorporated or to which such territory is annexed shall assume the proper proportionate share of the contractual obligations (including the pledge of full faith and credit) of the City, which proper proportionate share shall be fixed and determined by the County Agency and shall be binding upon all parties concerned unless, within sixty (60) days after such incorporation or annexation becomes effective, the governing body of the municipality into which such territory is incorporated or to which such territory is annexed and the City Council of the City, by mutual agree- -12- ment and with the written approval of the County Agency, shall fix and determine such proper proportionate share. The County Agency, prior to making such determination, shall receive a written recommendation as to the proper propor- tionate share from a committee composed of one representa- tive designated by the City Council of the City, one desig- nated by the governing body of the new municipality or the municipality annexing such territory and one independent registered engineer appointed by the County Agency. Each governmental unit shall appoint its representative within fifteen (15) days after being notified to do so by the County Agency and within a like time the County Agency shall appoint the engineer third member. If any such representa- tive (other than the appointee of the County Agency) is not appointed within the time above provided, then the County Agency may proceed without said recommendation. If the committee shall not make the recommendation within forty- five (45) days after its appointment or within any extension thereof by the County Agency, then the County Agency may proceed without such recommendation. 13. This contract is contingent upon the county issuing its bonds to defray such part of the total estimated cost of the System as is necessary to be financed, which bonds shall be issued under the authorization provided in Sections 5a, 5b and Sc of Act 342. Interest on the bonds may be capitalized and paid from the bond proceeds for a period not exceeding the estimated construction period and one year thereafter. In the event that the bonds are not issued within three years from the date of this contract, then unless this contract is extended by mutual agreement it shall become null and void, except that the City shall pay -13- all engineering, legal and other costs and expenses thereto- fore incurred and shall be entitled to all plans, specifica- tions and other engineering data and materials. 14. Upon completion of the System the County hereby leases the same to the City to operate and maintain the same upon the following terms and conditions: The System shall be used only to serve area in the City unless the area to be served thereby is enlarged by agreement between the City and the County Agency. (b) The City shall maintain the System in good condition and repair and shall employ and supervise qualified and competent employees therefor. (c) The City shall make and collect from the individual users of the System such charges for water supply services as shall be sufficient at least to pay the cost of operating and maintaining the System and to establish a fund for replacements, improvements and major maintenance of the System. In addition, the City may make and collect such charges to individual users as shall be necessary to pay the operating costs of the City and to provide such other funds for water supply purposes as are deemed desirable. The City shall enforce prompt pay- ment of all such charges as the same shall become due, and the receipts from such charges shall be deposited in a separate account or enterprise fund to be established and main- tained by the City. (d) The City shall establish such charges as specified in paragraph (c) to be paid to the City quarterly or more often commencing with the first day of the calendar quarter in which the System is put into opera- tion. The City hereby accepts the lease of the System upon the terms and conditions herein set forth. (a) -14- It is further agreed with respect to the System that at all times during the operation thereof by the City, as lessee, the City will obtain and maintain in effect adequate property damage, public liability and workmen's compensation insurance covering all facilities leased to the City under any contract with the County now or hereafter in effect. All policies and memorandums of insurance shall provide that the County and the City shall be insured parties thereunder and shall contain a provision requiring that the County be notified at least ten days prior to cancellation thereof. One copy of each policy and memor- andum of insurance shall be filed with the County Agency. The City agrees that it will operate the System to serve all premises located within the Auburn Hills Water Supply System Extension No. 3 District shown on Exhibit A. All of such premises shall be served on an equal and ratable basis and no preference shall be given to one area of the District over any other area of the District. The City covenants and agrees to operate the System in a manner which will not affect adversely the exemption of the interest on the County bonds from federal income taxation. 15. The County shall have no obligation or respon- sibility for providing water supply facilities except as herein expressly provided with respect to the acquisition of the System or as otherwise provided by contract. The City shall have the authority and the responsibility to provide such other facilities and shall have the right to expand the facilities of the System by constructing or extending water lines or related facilities, connecting the same to the System and otherwise improving the System. It is expressly -15- agreed, nevertheless, that no such connection (other than individual unit connections) shall be made to the System and no improvements, enlargements or extensions thereof shall be made without first securing a permit therefor from the County Agency. Any such permit may be made conditional upon inspection and approval of new construction by the County Agency. 16. All powers, duties and functions vested by this contract in the County shall be exercised and performed by the County Agency for and on behalf of the County unless otherwise provided by law or in this contract. 17. The parties hereto recognize that the holders from time to time of the bonds to be issued by the County under the provisions of Act 342, and secured by the full faith and credit pledge of the City to the making of its payments as set forth in this contract, will have contrac- tual rights in this contract, and it is therefore covenanted and agreed that so long as any of said bonds shall remain outstanding and unpaid, the provisions of this contract shall not be subject to any alteration or revision which would in any manner adversely affect either the security of the bonds or the prompt payment of principal or interest thereon. The right to make changes in this contract, by amendment, supplemental contracts or otherwise, is neverthe- less reserved insofar as the same do not have such adverse effect. The parties hereto further covenant and agree that they each will comply with their respective duties and obligations under the terms of this contract promptly, at the times and in the manner herein set forth, and will not suffer to be done any act which would in any way impair the -16- contract of said bonds, the security therefor or the prompt payment of principal and interest thereon. It is hereby declared that the terms of this contract and of any amenda- tory or supplemental contract and any contract entered into pursuant hereto, insofar as they pertain to said bonds or to the payment or the security thereof, shall be deemed to be for the benefit of the holders of said bonds. 18. In the event that any one or more of the provisions of this contract shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions hereof, but this contract shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 19. This contract shall become effective upon its execution by each party hereto and the expiration of 45 days after the date of publication of the notice required by Section 5b of Act 342: Provided, however, that if, within the 45-day period, a proper petition is filed with the City Clerk of the City in accordance with the provisions of said Section 5b of Act 342 then this contract shall not become effective until approved by the vote of a majority of the electors of the City qualified to vote and voting thereon at a general or special election. This contract shall termin- ate forty (40) years from the date hereof or on such earlier date as shall be mutually agreed: Provided, however, that it shall not be terminated at any time prior to the payment in full of the principal of and interest on the County bonds together with all bond service charges pertaining to said bonds. This contract may be executed in several counter- -17- parts. The provisions of this contract shall inure to the benefit of and be binding upon the successors and assigns of the parties hereto. IN WITNESS WHEREOF, the parties hereto have caused this contract to be executed and delivered by the under- signed, being duly authorized by the respective governing bodies of such parties, all as of the day and year first above written. CITY OF AUBURN HILLS COUNTY OF OAKLAND By: Mayor By:. By Clerk County Drain Commissioner (County Agency) JAE/09007/0187/AB5/4 -18- CONTRACTED SERVICES - PROJECT DEVELOPMENT Engineering Consulting Engineer Soil Borings Bond Counsel Financial Counsel C.P.A. Report Bond Prospectus Bond Printing Publishing COUNTY SERVICES - PROJECT MANAGEMENT Engineering Administration Right-of-Way (including Legal) Construction Inspection Soil Erosion Permit (Act 347) CONTINGENCY $99,100 3,600 ORCHARD, HILTZ & McCLIMENI, INC By: AUBURN HILLS WATER SUPPLY SYSTEM EXTENSION NO. 3 ESTIMATE OF COST CONTRACTED SERVICES - CONSTRUCTION 20-inch Water Main 16-inch Water Main 12-inch Water Main 20-inch Water Main in Tunnel 12-inch Water Main in Tunnel 16-inch Gate Valve & Well 12-inch Gate Valve & Well Hydrants 5500 L.F. @ $ 55.00 . 3000 L.F. 42.00 . 8500 L.F. 36.00 . 200 L.F. @ 200.00 . 200 L.F. 140.00 = 8 Ea. @ 4300.00 19 Ea. @ 3000.00 = 38 Ea. @ 2500.00 = Total Construction Cost $ 302,500 126,000 306,000 40,000 28,000 34,400 57,000 95,000 $ 988,900 $ 102,700 7,152 6,437 2,235 1,788 394 1,117 $ 49,500 9,900 78,000 54,400 1,750 91,227 TOTAL ESTIMATED PROJECT COST $1,396,000 I hereby estimate the period of usefulness of this facility to be Forty (40) years & upwards. dated: December 2, 1986 EXHIBIT - "B" ORION TOWNSHIP /1 CITY OF PONTIAC AUBURN HILLS WATER SUPPLY SYSTEM EXTENSION NO. 3 OAKLAND COUNTY, MICHIGAN EXHIBIT A "ogee, ORCHARD, HILTZ & McCLIMENT, INC. I ii. comuirrx wawa NES SCHOOLCIAR Row). mom.% eacmGAN ern OM $124.711 CLINTON-OAKLAND SEWAGE DISPOSAL SYSTEM AUBURN HILLS EXTENSION NO. 2 CONTRACT THIS CONTRACT, made and entered into as of the first day of January, 1987 by and between the COUNTY OF OAKLAND, a county corporation in the State of Michigan (hereinafter sometimes referred to as the "County"), by and through its Drain Commissioner, County Agency, party of the first part, and the CITY OF AUBURN HILLS, a city located in the County (hereinafter sometimes referred to as the "City"), party of the second part. WITNESSET H: WHEREAS, the County heretofore has established and constructed and acquired the Clinton-Oakland Sewage Disposal System pursuant to the provisions of Act No. 185, Public Acts of Michigan, 1957, as amended, to serve the Clinton- Oakland Sewage Disposal District, within which district lies part of the City; and WHEREAS, it is necessary to improve, enlarge and extend the Clinton-Oakland Sewage Disposal System by the acquisition and construction of the hereinafter described sewage disposal facilities to serve the City; and WHEREAS, pursuant to Act No. 342, Public Acts of Michigan, 1939, as amended (hereinafter sometimes referred to as "Act 342"), the Board of Commissioners of the County, by majority vote of its members-elect, has authorized and directed that there be established a County system of sewage disposal improvements and services to serve the City, said system to be known as the "Clinton-Oakland Sewage Disposal System Auburn Hills Extension No 2" (hereinafter sometimes referred to as the "County System" or as the "System"), and has designated the Oakland County Drain Commissioner as the County Agency for the System with all powers and duties with respect thereto as are provided by Act 342 (said Drain Commissioner being hereinafter sometimes referred to as the "County Agency"); and WHEREAS, under and subject to the terms of Act 342, the County is authorized, through the County Agency, to acquire and construct the sewage disposal facilities hereinafter described as constituting the County System, the County and the City are authorized to enter into a contract for the acquisition and construction of the System by the County and for financing all or part of the cost thereof by the issuance of bonds by the County secured by the pledge of the full faith and credit of the City to pay such cost with interest to the County in installments extending over a period not exceeding forty (40) years and the County is authorized to issue such bonds and to pledge its full faith and credit for the payment of such bonds and the interest thereon; and WHEREAS, there is an urgent need for such sewage disposal facilities to provide sewage disposal services to areas of the City not presently served by sewage disposal facilities and thus to promote the health and welfare of the residents thereof, which facilities would likewise benefit the County and its residents, and the parties hereto have concluded that such facilities can be provided and financed -2- most economically and efficiently by the County through the exercise of the powers conferred by Act 342, and especially Sections 5a, 5b and 5c thereof; and WHEREAS, preliminary plans for the System and estimates of the cost and the period of usefulness of the System have been prepared by Orchard, Hiltz & McCliment, Inc. (hereinafter sometimes referred to as the consulting engineers) and have been submitted to and approved by the Board of Commissioners of the County and the Council of the City and placed on file in the office of the County Agency, said estimates being set forth in Exhibit B hereunto attached; and WHEREAS, in order to provide for the acquisition and construction of the System by the County and the finan- cing of the cost thereof by the issuance of County bonds, and for other related matters, it is necessary for the parties hereto to enter into this contract. THEREFORE, IN CONSIDERATION OF THE PREMISES AND THE COVENANTS OF EACH OTHER, THE PARTIES HERETO AGREE AS FOLLOWS: 1. The parties hereto hereby approve and agree to the establishment, acquisition, construction and financing of the Clinton-Oakland Sewage Disposal System Auburn Hills Extension No 2, as herein provided, under and pursuant to Act 342. The City, by way of compliance with Section 29, Article VII, Michigan Constitution of 1963, consents and agrees to the establishment and location of the System within its corporate boundaries and to the use by the County -3- of its streets, highways, alleys, lands, rights-of-way or other public places for the purpose and facilities of the System and any improvements, enlargements and extensions thereof, and the City further agrees that, in order to evidence and effectuate the foregoing agreement and consent, it will execute and deliver to the County such grants of easement, right -of -way, license, permit or consent as may be requested by the County. 2. The Clinton-Oakland Sewage Disposal System Auburn Hills Extension No. 2 shall consist of the sewage disposal facilities shown and described on Exhibit A which is hereunto attached and which is hereby made a part hereof, and as are more particularly set forth in the preliminary plans which have been prepared and submitted by the consulting engineers which plans are on file with the County Agency and are hereby approved and adopted. The System shall be acquired and constructed substantially in accordance with the said preliminary plans and in accordance with final plans and specifications to be prepared and submitted by the consulting engineers, but variations therefrom which do not materially change the location, capacity or overall design of the System, and which do not require an increase in the total estimated cost of the System, may be permitted on the authority of the County Agency. Other variations or changes may be made if approved by the County Agency and by resolution of the City Council and if provisions required by paragraph 8 hereof are made for payment or financing of any resulting increase in the total estimated cost. The estimate of cost of the System and the estimate of period of usefulness thereof as set forth in Exhibit B are hereby approved and adopted. -4- 3. The County Agency shall take or cause to be taken all actions required or necessary, in accordance with Act 342, to procure the issuance and sale of bonds by the County, in one or more series, in whatever aggregate princi- pal amount is necessary to defray that part of the total cost of the County System which is in excess of funds avail- able from other sources. Such bonds shall be issued in anticipation of, and be payable primarily from, the payments to be made by the City to the County as provided in this contract and shall be secured secondarily, if so voted by the Board of Commissioners of the County, by the pledge of the full faith and credit of the County, and the said bonds shall be payable in annual maturities the last of which shall be not more than forty years from the date thereof. 4. The County Agency shall proceed to take construction bids for the System and, subject to the sale and delivery of said bonds, enter into construction contracts with the lowest responsive and responsible bidder or bidders, procure from the contractors all necessary and proper bonds and insurance, cause the System to be constructed within a reasonable time and do all other things required by this contract and the laws of the State of Michigan and the United States of America. All certificates for required payments to contractors shall be approved by the consulting engineers before presentation to the County Agency and the latter shall be entitled to rely on such approval in making payment. The County agrees that it will secure, or cause to be secured, and maintained during the period of construction adequate property damage and public liability insurance -5- covering all facilities to be constructed pursuant to this contract. All policies and memorandums of insurance shall provide that the County and the City shall be insured parties thereunder and shall contain a provision requiring that the City be notified at least ten days prior to cancel- lation thereof. One copy of each policy and memorandum of insurance shall be filed with the City. 5. It is understood and agreed by the parties hereto that the System is to serve the City and not the individual property owners and users thereof, unless by special arrangement between the County Agency and the City. The responsibility of requiring connection to and use of the System and/or providing such additional facilities as may be needed shall be that of the City which shall cause to be constructed and maintained, directly or through the County, any such necessary additional facilities. The County shall not be obligated to acquire or construct any facilities other than those designated in paragraph 2 hereof. 6. The City shall pay to the County the total cost of the System (less such funds as may become available from other sources), which total cost for this purpose shall include, in addition to the items of the nature set forth in Exhibit B (represented by the principal amount of the bonds to be issued by the County plus such funds as may become available from other sources), all interest payable by the County on said bonds and all paying agent fees and other expenses and charges (including the County Agency's adminis- trative expenses) which are payable on account of said bonds (such fees, expenses and charges being herein called "bond service charges"). Such payments shall be made to the -6- County in annual installments which shall be due and payable at least thirty days prior to the day of the month specified in the County bonds as the annual principal maturity date thereof. Such an annual installment shall be so paid in each year if any principal and/or non-capitalized interest on said bonds falls due during the twelve-month period beginning on such principal maturity date in said year, and the amount of each installment so due and payable shall be at least sufficient to pay all such principal and/or interest thus falling due and all bond service charges then due and payable. The County Agency, within thirty days after delivery of the County bonds to the purchaser, shall furnish the City Treasurer with a complete schedule of the principal and interest maturities thereon, and the County Agency, at least thirty days before each payment is due to be made by the City, also shall advise the City Treasurer of the amount payable to the County on such date. If the City fails to make any payment to the County when due, the same shall be subject to a penalty of 1% thereof for each month or fraction thereof that such amount remains unpaid after due. Failure of the County Agency to furnish the schedule or give the notice as above required shall not excuse the City from the obligation to make payment when due. Such payments shall be made by the City when due whether or not the System has then been completed or placed in operation. In the event that additional County bonds shall be issued under the authority of this contract to defray a part of the cost of the System, the foregoing obligations shall apply to such part of the cost and to said additional bonds insofar as appropriate thereto. -7- 7. The City may pay in advance any amount payable to the County pursuant to this contract and in that event shall be credited therefor on future-due amounts as may be agreed by the parties hereto. The City also may pay in advance any one or more installments or any part thereof (a) by surrendering to the County any of said County bonds of like principal amount or (b) by paying to the County in cash the principal amount of any County bonds which are subject to redemption prior to maturity plus all interest thereon to the first date upon which such bonds may be called for redemption and all applicable call premiums and bond service charges, and in such event the County Agency shall call said bonds for redemption at the earliest possible date. The installments or parts thereof so prepaid shall be deemed to be the installments or parts thereof falling due in the same calendar year as the maturity dates of the bonds surrendered or called for redemption and bonds so surrendered or redeemed shall be cancelled. 8. In the event that it shall become necessary to increase the estimated cost of the System as hereinbefore stated, or if the actual cost of the system shall exceed the estimated cost, whether as the result of variations or changes permitted to be made in the approved plans or other- wise, then (without execution of any further contract or amendment of this contract) the City Council, by resolution adopted within fifteen days after the receipt of construc- tion bids, may direct that a portion of the System be deleted sufficient to reduce the total cost to an amount which shall not exceed the total estimated cost as herein- before stated by more than 5%, provided that such deletion shall not materially change the general scope, overall -8- design and purpose of the System, or in the absence of the adoption of such a resolution the City shall pay or procure the payment of the increase or excess in cash, or County bonds in an increased or additional amount (upon adoption of an authorizing resolution therefor by the Board of Commis- sioners) shall be issued to defray such increased or excess cost to the extent that funds therefor are not available from other sources: Provided, however, that no such increase or excess shall be approved and no such increased or additional County bonds shall be authorized to be issued, nor shall the County enter into any contract for acquisition or construction of the System or any part thereof or incur any obligation for or pay any item of cost therefor, where the effect thereof would be to cause the total cost of the System to exceed by more than 5% its total estimated cost as hereinbef ore stated, unless the City Council previously shall have adopted a resolution approving such increase or excess and agreeing that the same (or such part thereof as is not available from other sources) shall be paid or its payment procured by the City in cash or be defrayed by the issuance of increased or additional County bonds in antici- pation of increased or additional payments agreed to be made by the City to the County in the manner hereinbef ore provided: Provided, further, that the adoption of such resolution by the City Council shall not be required prior to or as a condition precedent to the issuance of additional bonds by the County if the County has previously issued or contracted to sell bonds to pay all or part of the cost of the System and the issuance of the additional bonds is necessary (as determined by the County) to pay such increased, additional or excess costs as are essential to completion of the System according to the plans as last -9- approved prior to the time when the previous bonds were issued or contracted to be sold. 9. In the event that the actual cost of the System is less than the total estimated cost, then any surplus available to the County from the sale of County bonds, at the option of the City Council, shall be used to improve, enlarge or extend the System, to apply upon future payments due to the County, to redeem bonds or to purchase bonds on the open market, provided that such surplus shall be used to improve, enlarge or extend the System only if authorized by the Board of Commissioners. Any such surplus, for the purpose of improving, enlarging or extending the System, may be supplemented by cash payments to be made by the City, or such improvements, enlargments or extensions may be financed entirely from such cash payments if author- ized by the City Council. If such surplus is used to redeem or purchase bonds, the same shall be cancelled, and the payments thereafter required to be made by the City to the County shall be reduced so as to reflect the resulting saving of interest and the payment required to be made in the calendar year of the stated maturity of said bonds shall be reduced by the principal amount thereof. 10. Should the City fail for any reason to pay the County at the times specified the amounts herein required to be paid, the City hereby authorizes the State Treasurer or other official charged with the disbursement of unrestricted state funds returnable to the City pursuant to the Michigan constitution to withhold sufficient funds to make up any default or deficiency in funds. If the full faith and credit of the County is pledged for the prompt payment of -10- the principal of and interest on the bonds to be issued by the County and if the County is required to advance any money by reason of such pledge on account of the delinquency of the City, the County Treasurer is hereby authorized to notify the State Treasurer to deduct the amount of money so advanced by the County from any unrestricted moneys in the State Treasurer's possession belonging to the City and to pay such amount to the County. The foregoing shall not operate to limit the County's right to pursue any other legal remedies for the reimbursement of moneys advanced on account of the default of the City. 11. The City, pursuant to the authorization of Section 5a of Act No. 342, hereby pledges its full faith and credit for the prompt and timely payment of its obligations expressed in this contract and each year shall levy a tax in an amount which, taking into consideration estimated delin- quencies in tax collections, will be sufficient to pay its obligations under this contract becoming due before the time of the following year's tax collections: Provided, however, that if at the time of making its annual tax levy the City shall have on hand in cash other funds (including but not limited to funds from special assessments, user charges or connection fees) which have been set aside and pledged or are otherwise available for the payment of such contractual obligations falling due prior to the time of the next tax collection, then the annual tax levy may be reduced by such amount. The City Council each year, at least 90 days prior to the final date provided by law for the making of the annual City tax levy, shall submit to the County Agency a -11- written statement setting forth the amount of its obligations to the County which become due and payable under this contract prior to the time of the next following year's tax collections, the amount of the funds which the City has or will have on hand or to its credit in the hands of the County which have been set aside and pledged for payment of said obligations to the County and the amount of the City taxes next proposed to be levied for the purpose of raising money to meet such obligations. The County Agency shall review such statement promptly and, if he finds that the proposed City tax levy is insufficient, he shall so notify the City Council, and the City hereby covenants and agrees that it thereupon will increase its levy to such extent as may be required by the County Agency. 12. No change in the jurisdiction over any terri- tory in the City shall impair in any manner the obligations of this contract or affect the obligations of the City here- under. In the event that all or any part of the territory of the City is incorporated as a new city or village or is annexed to or becomes a part of the territory of another municipality, the municipality into which such territory is incorporated or to which such territory is annexed shall assume the proper proportionate share of the contractual obligations (including the pledge of full faith and credit) of the City, which proper proportionate share shall be fixed and determined by the County Agency and shall be binding upon all parties concerned unless, within sixty (60) days after such incorporation or annexation becomes effective, the governing body of the municipality into which such territory is incorporated or to which such territory is annexed and the City Council of the City, by mutual agree- -12- ment and with the written approval of the County Agency, shall fix and determine such proper proportionate share. The County Agency, prior to making such determination, shall receive a written recommendation as to the proper propor- tionate share from a committee composed of one representa- tive designated by the City Council of the City, one desig- nated by the governing body of the new municipality or the municipality annexing such territory and one independent registered engineer appointed by the County Agency. Each governmental unit shall appoint its representative within fifteen (15) days after being notified to do so by the County Agency and within a like time the County Agency shall appoint the engineer third member. If any such representa- tive (other than the appointee of the County Agency) is not appointed within the time above provided, then the County Agency may proceed without said recommendation. If the committee shall not make the recommendation within forty- five (45) days after its appointment or within any extension thereof by the County Agency, then the county Agency may proceed without such recommendation. 13. This contract is contingent upon the County issuing its bonds to defray such part of the total estimated cost of the System as is necessary to be financed, which bonds shall be issued under the authorization provided in Sections 5a, 5b and Sc of Act 342. Interest on the bonds may be capitalized and paid from the bond proceeds for a period not exceeding the estimated construction period and one year thereafter. In the event that the bonds are not issued within three years from the date of this contract, then unless this contract is extended by mutual agreement it shall become null and void, except that the City shall pay -13- all engineering, legal and other costs and expenses thereto- fore incurred and shall be entitled to all plans, specifica- tions and other engineering data and materials. 14. Upon completion of the System the County hereby leases the same to the City to operate and maintain the same upon the following terms and conditions: (a) The System shall be used only to serve area in the City unless the area to be served thereby is enlarged by agreement between the City and the County Agency. (b) The City shall maintain the System in good condition and repair and shall employ and supervise qualified and competent employees therefor. (c) The City shall not permit the discharge into the System of any sewage in violation of the standards and regulations controlling the discharge of industrial and commercial type waste into the System as said standards and regulations may be promulgated from time to time by the County. (d) The City shall make and collect from the individual users of the System such charges for sewage disposal services as shall be sufficient at least to pay the cost of operating and maintaining the System and to establish a fund for replacements, improvements and major maintenance of the System. In addition, the City may make and collect such charges to individual users as shall be necessary to pay the operating costs of the City and to provide such other funds for sewage disposal purposes as are deemed desirable. The City shall enforce prompt pay- ment of all such charges as the same shall become due, and the receipts from such charges shall be deposited in a separate account or enterprise fund to be established and main- tained by the City. (e) The City shall establish such charges as specified in paragraph (d) to be paid to the City quarterly -14- or more often commencing with the first day of the calendar quarter in which the System is put into opera- tion. (f) The City at all times shall operate, maintain and use the System in such manner as to comply fully and com- pletely with the requirements of the Amended Clinton-Oakland Sewage Disposal System Contract, dated January 11, 1968. The City hereby accepts the lease of the System upon the terms and conditions herein set forth. It is further agreed with respect to the System that at all times during the operation thereof by the City, as lessee, the City will obtain and maintain in effect adequate property damage, public liability and workmen's compensation insurance covering all facilities leased to the City under any contract with the County now or hereafter in effect. All policies and memorandums of insurance shall provide that the County and the City shall be insured parties thereunder and shall contain a provision requiring that the County be notified at least ten days prior to cancellation thereof. One copy of each policy and memor- andum of insurance shall be filed with the County Agency. The City agrees that it will operate the System to serve all premises located within the Clinton-Oakland Sewage Disposal System Auburn Hills Extension No. 2 District shown on Exhibit A. All of such premises shall be served on an equal and ratable basis and no preference shall be given to one area of the District over any other area of the District. The City covenants and agrees to operate the System in a manner which will not affect adversely the exemption of the interest on the County bonds from federal income taxation. -15- 15. The County shall have no obligation or respon- sibility for providing sewage disposal facilities except as herein expressly provided with respect to the acquisition of the System or as otherwise provided by contract. The City shall have the authority and the responsibility to provide such other facilities and shall have the right to expand the facilities of the System by constructing or extending sewers or related facilities, connecting the same to the System and otherwise improving the System. It is expressly agreed, nevertheless, that no such connection (other than individual unit tap-ins) shall be made to the System and no improvements, enlargements or extensions thereof shall be made without first securing a permit therefor from the County Agency. Any such permit may be made conditional upon inspection and approval of new construction by the County Agency. It is further agreed that the System shall be used for collection and conveyance of sanitary sewage only and that the City shall take all action necessary to prevent entry into the System of storm waters and also to prevent entry of sewage or wastes of such a character as to be injurious to the System or to the public health and safety. 16. All powers, duties and functions vested by this contract in the County shall be exercised and performed by the County Agency for and on behalf of the County unless otherwise provided by law or in this contract. 17. The parties hereto recognize that the holders from time to time of the bonds to be issued by the County under the provisions of Act 342, and secured by the full faith and credit pledge of the City to the making of its payments as set forth in this contract, will have contrac- -16- tual rights in this contract, and it is therefore covenanted and agreed that so long as any of said bonds shall remain outstanding and unpaid, the provisions of this contract shall not be subject to any alteration or revision which would in any manner adversely affect either the security of the bonds or the prompt payment of principal or interest thereon. The right to make changes in this contract, by amendment, supplemental contracts or otherwise, is neverthe- less reserved insofar as the same do not have such adverse effect. The parties hereto further covenant and agree that they each will comply with their respective duties and obligations under the terms of this contract promptly, at the times and in the manner herein set forth, and will not suffer to be done any act which would in any way impair the contract of said bonds, the security therefor or the prompt payment of principal and interest thereon. It is hereby declared that the terms of this contract and of any amenda- tory or supplemental contract and any contract entered into pursuant hereto, insofar as they pertain to said bonds or to the payment or the security thereof, shall be deemed to be for the benefit of the holders of said bonds. 18. In the event that any one or more of the provisions of this contract for any reason shall be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions hereof, but this contract shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. -17- 19. This contract shall become effective upon its execution by each party hereto and the expiration of 45 days after the date of publication of the notice required by Section 5b of Act 342: Provided, however, that if, within the 45-day period, a proper petition is filed with the City Clerk of the City in accordance with the provisions of said Section 5b of Act 342 then this contract shall not become effective until approved by the vote of a majority of the electors of the City qualified to vote and voting thereon at a general or special election. This contract shall termin- ate forty (40) years from the date hereof or on such earlier date as shall be mutually agreed: Provided, however, that it shall not be terminated at any time prior to the payment in full of the principal of and interest on the County bonds together with all bond service charges pertaining to said bonds. This contract may be executed in several counter- parts. The provisions of this contract shall inure to the benefit of and be binding upon the successors and assigns of the parties hereto. IN WITNESS WHEREOF, the parties hereto have caused this contract to be executed and delivered by the under- signed, being duly authorized by the respective governing bodies of such parties, all as of the day and year first above written. CITY OF AUBURN HILLS By: Mayor COUNTY OF OAKLAND By: By: Clerk County Drain Commissioner (County Agency) JAZ/09007/0187/AB9/3 -18- AVON TOWNSH it iirrnm BROWNi ROAD SANITARY, =111 : 1 • L •11 t!'t, CITY OF PONTIAC 'br,Tf:rirr• t !II ..11r,, VI t: 1 A IliMD .7-41t I • •-r. ORION TOWNSHIP CLINTON — OAKLAND SEWAGE DISPOSAL SYSTEM AUBURN HILLS EXTENSION NO 2 OAKLAND COUNTY, MICHIGAN EXHIBIT A deep, ORCHARD, HILTZ & McCLIMENT, INC. coNsuertitc mamma #4, "p4,11 SCNOOLCIAir ROAD* LIVONIA, WOMAN ins 4 v" c1L3) sn-int ORCHARD, HILTZ & McCLIMENT„ INC. By: CLINTON-OAKLAND SEWAGE DISPOSAL SYSTEM AUBURN HILLS EXTENSION NO. 2 ESTIMATE OF COST CONTRACTED SERVICES - CONSTRUCTION 24-inch Sanitary Sewer 21-inch Sanitary Sewer 12-inch Sanitary Sewer 10-inch Sanitary Sewer 24-inch Sanitary Sewer in Tunnel 21-inch Sanitary Sewer in Tunnel 6-inch House Lead Sanitary Manholes 6300 L.F. @ $ 60.00 1000 L.F. 52.00 6600 L.F. 38.00 3900 L.F. 32.00 300 L.F. 240.00 400 L.F. 230.00 1300 L.F. 20.00 70 Ea. @ 2500.00 = $ 378,000 52,000 250,800 124,800 72,000 92,000 26,000 175,000 $1,170,600 Total Construction Cost CONTRACTED SERVICES - PROJECT DEVELOPMENT Engineering Consulting Engineer Soil Borings Bond Counsel Financial Counsel C.P.A. Report Bond Prospectus Bond Printing Publishing COUNTY SERVICES - PROJECT MANAGEMENT Engineering Administration Right-of-Way (including Legal) Construction Inspection Soil Erosion Permit (Act 347) CONTINGENCY TOTAL ESTIMATED PROJECT COST $131,500 4,800 $ 136,300 8,848 7,963 2,765 2,212 1,106 1,383 58,530 10,530 149,000 70,200 1,950 112,613 $1,734,000 I hereby estimate the period of usefulness of this facility to be Forty (40) years & upwards. dated: December 2, 1986 EXHIBIT - "B" 3. AUTHORIZATION OF BONDS - PURPOSE. Subsequent to execution of the Contract by the parties thereto, bonds of the County, aggregating the principal sum of Three Million One Hundred Thirty Thousand Dollars ($3,130,000) shall be issued and sold pursuant to the provisions of Act 342, and other applicable statutory provisions, for the purpose of defraying the cost of acquiring and constructing the Auburn Hills Water Supply System Extension No. 3 and the Clinton-Oakland Sewage Disposal System Auburn Hills Exten- sion No. 2. 4. BOND DETAILS. The bonds shall be designated "Oakland County Water Supply and Sewage Disposal Bonds (Auburn Hills 1987 Projects)" shall be dated June 1, 1987; shall be numbered from 1 upwards; shall be fully registered; shall be in the denomination of $5,000 each or any integral multiple thereof not exceeding the aggregate principal amount for each maturity at the option of the purchaser thereof; shall bear interest at a rate or rates not exceed- ing 10% per annum to be determined upon the sale thereof payable on November 1, 1987 and semiannually thereafter on the first days of May and November in each year; and shall mature on November 1 in each year as follows: 1989 $ 25,000 1998 $ 200,000 1990 25,000 1999 225,000 1991 55,000 2000 225,000 1992 75,000 2001 250,000 1993 100,000 2002 250,000 1994 125,000 2003 250,000 1995 150,000 2004 250,000 1996 175,000 2005 275,000 1997 200,000 , 2006 275,000 5. PAYMENT OF PRINCIPAL AND INTEREST. The prin- cipal of and interest on the bonds shall be payable in law- ful money of the United States. Principal shall be payable -4- upon presentation and surrender of the bonds to the bond registrar and paying agent as they severally mature. Inter- est shall be paid to the registered owner of each bond as shown on the registration books at the close of business on the 15th day of the calendar month preceding the month in which the interest payment is due. Interest shall be paid when due by check or draft drawn upon and mailed by the bond registrar and paying agent to the registered owner at the registered address. 6. PRIOR REDEMPTION. Bonds maturing prior to November 1, 1998 shall not be subject to redemption prior to maturity. Bonds maturing on and after November 1, 1998, shall be subject to redemption prior to maturity upon the terms and conditions set forth in the form of bond contained in Section 10 hereof. 7. BOND REGISTRAR AND PAYING AGENT. The County Drain Commissioner shall designate, and may enter into an agreement with, a bond registrar and paying agent for the bonds which shall be a bank or trust company located in the State of Michigan which is qualified to act in such capacity under the laws of the United States of America or the State of Michigan. The County Drain Commissioner may from time to time as required designate a similarly qualified successor bond registrar and paying agent. 8. EXECUTION, AUTHENTICATION AND DELIVERY OF BONDS. The bonds shall be executed in the name of the County by the facsimile signatures of the Chairman of the Board of Commissioners and the County Clerk and authenti- cated by the manual signature of an authorized representa- tive of the bond registrar and paying agent, and the seal of -5- the County (or a facsimile thereof) shall be impressed or imprinted on the bonds. After the bonds have been executed and authenticated for delivery to the original purchaser thereof, they shall be delivered by the County Drain Commis- sioner or the County Treasurer to the purchaser upon receipt of the purchase price. Additional bonds bearing the facsi- mile signatures of the Chairman of the Board of Commis- sioners and the County Clerk and upon which the seal of the County (or a facsimile thereof) is impressed or imprinted may be delivered to the bond registrar and paying agent for authentication and delivery in connection with the exchange or transfer of bonds. The bond registrar and paying agent shall indicate on each bond the date of its authentication. 9. EXCHANGE AND TRANSFER OF BONDS. Any bond, upon surrender thereof to the bond registrar and paying agent with a written instrument of transfer satisfactory to the bond registrar and paying agent duly executed by the registered owner or his duly authorized attorney, at the option of the registered owner thereof, may be exchanged for bonds of any other authorized denominations of the same aggregate principal amount and maturity date and bearing the same rate of interest as the surrendered bond. Each bond shall be transferable only upon the books of the County, which shall be kept for that purpose by the bond registrar and paying agent, upon surrender of such bond together with a written instrument of transfer satisfactory to the bond registrar and paying agent duly executed by the registered owner or his duly authorized attorney. -6- Upon the exchange or transfer of any bond, the bond registrar and paying agent on behalf of the County shall cancel the surrendered bond and shall authenticate and deliver to the transferee a new bond or bonds of any author- ized denomination of the same aggregate principal amount and maturity date and bearing the same rate of interest as the surrendered bond. If, at the time the bond registrar and paying agent authenticates and delivers a new bond pursuant to this section, payment of interest on the bonds is in default, the bond registrar and paying agent shall endorse upon the new bond the following: "Payment of interest on this bond is in default. The last date to which interest has been paid is The County and the bond registrar and paying agent may deem and treat the person in whose name any bond shall be registered upon the books of the County as the absolute owner of such bond, whether such bond shall be overdue or not, for the purpose of receiving payment of the principal of and interest on such bond and for all other purposes, and all payments made to any such registered owner, or upon his order, in accordance with the provisions of Section 5 of this resolution shall be valid and effectual to satisfy and discharge the liability upon such bond to the extent of the sum or sums so paid, and neither the County nor the bond registrar and paying agent shall be affected by any notice to the contrary. The County agrees to indemnify and save the bond registrar and paying agent harmless from and against any and all loss, cost, charge, expense, judgment or liability incurred by it, acting in good faith and without negligence hereunder, in so treating such registered owner. It -7- For every exchange or transfer of bonds, the County or the bond registrar and paying agent may make a charge sufficient to reimburse it for any tax, fee or "other govern- mental charge required to be paid with respect to such exchange or transfer, which sum or sums shall be paid by the person requesting such exchange or transfer as a condition precedent to the exercise of the privilege of making such exchange or transfer. The bond registrar and paying agent shall not be required to transfer or exchange bonds or portions of bonds which have been selected for redemption. 10. FORM OF BONDS. The bonds shall be in substan- tially the following form: UNITED STATES OF AMERICA STATE OF MICHIGAN COUNTY OF OAKLAND OAKLAND COUNTY WATER SUPPLY AND SEWAGE DISPOSAL BOND (Auburn Hills 1987 Projects) INTEREST RATE MATURITY DATE OF ORIGINAL ISSUE CUSIP June 1, 1987 Registered Owner Principal Amount The County of Oakland, State of Michigan, (the "County"), acknowledges itself indebted to, and for value received, hereby promises to pay to the Registered Owner identified above, or registered assigns, the Principal Amount set forth above on the maturity date specified above, unless redeemed prior thereto as hereinafter provided, upon presentation and surrender of this bond at in the City of , Michigan, the bond registrar and paying agent, and to pay to the Registered Owner, as shown on the registration books at the close of business on the 15th day of the calendar month preceding the month in which an interest payment is due, by check or draft drawn upon and mailed by the bond registrar and paying agent by first class mail postage prepaid to the Registered Owner at the registered address, interest on such Principal Amount from the Date of Original Issue or such later date through which interest shall have been paid until the County's obligation with respect to the payment of such Principal Amount is discharged at the rate per annum specified above. Interest is payable on the first days of May and November in each year, commencing on November 1, 1987. Principal and interest are payable in lawful money of the United States of America. This bond is one of a series of bonds aggregating the principal sum of Three Million One Hundred Thirty Thousand Dollars ($3,130,000) issued by the County under and pursuant to and in full conformity with the Constitution and Statutes of Michigan (especially Act No, 342, Public Acts of 1939, as amended) and a bond authorizing resolution adopted by the Board of Commissioners of the County (the "Resolu- tion") for the purpose of defraying the cost of acquiring and constructing the Auburn Hills Water Supply System Extension No. 3 and the Clinton-Oakland Sewage Disposal System Auburn Hills Extension No. 2. The bonds of this series are issued in anticipation of payments to be made by the City of Auburn Hills in the aggregate principal amount of Three Million One Hundred Thirty Thousand Dollars ($3,130,000) pursuant to contracts between the County and -9- the City of Auburn Hills dated as of January 1, 1987. The full faith and credit of the City of Auburn Hills have been pledged to the prompt payment of the foregoing amount and the interest thereon as the same become due. As additional security the full faith and credit of the County are hereby pledged for the prompt payment of the principal of and interest on the bonds of this series. Taxes levied by the City and the County to pay the principal of and interest on the bonds of this series are subject to constitutional tax limitations. This bond is transferable, as provided in the Resolution, only upon the books of the County kept for that purpose by the bond registrar and paying agent, upon the surrender of this bond together with a written instrument of transfer satisfactory to the bond registrar and paying agent duly executed by the registered owner or his attorney duly authorized in writing. Upon the exchange or transfer of this bond a new bond or bonds of any authorized denomina- tion, in the same aggregate principal amount and of the same interest rate and maturity, shall be authenticated and delivered to the transferee in exchange therefor as provided in the Resolution, and upon payment of the charges, if any, therein provided. Bonds so authenticated and delivered shall be in the denomination of $5,000 or any integral multiple thereof not exceeding the aggregate principal amount for each maturity. The bond registrar and paying agent shall not be required to transfer or exchange bonds or portions of bonds which have been selected for redemption. Bonds maturing prior to November 1, 1998, are not subject to redemption prior to maturity. Bonds maturing on and after November 1, 1998, are subject to redemption prior to maturity at the option of the County, in such order as shall be determined by the County, on any one or more inter- est payment dates on and after November 1, 1997. Bonds of a denomination greater than $5,000 may be partially redeemed in the amount of $5,000 or any integral multiple thereof. If less than all of the bonds maturing in any year are to be redeemed, the bonds or portions of bonds to be redeemed shall be selected by lot. The redemption price shall be the par value of the bond or portion of the bond called to be redeemed plus interest to the date fixed for redemption and a premium as follows: 2% of the par value if called for redemption on or after November 1, 1997, but prior to November 1, 1999; 1 1/2% of the par value if called for redemption on or after November 1, 1999, but prior to November 1, 2001; of the par value if called for redemption on or after November 1, 2001, but prior to November 1, 2003; No premium if called for redemption on or after November 1, 2003. 1% -10- Not less than thirty days notice of redemption shall be given to the holders of bonds called to be redeemed by mail to the registered holder at the registered address. Bonds or portions of bonds called for redemption shall not bear interest after the date fixed for redemption, provided funds are on hand with the bond registrar and paying agent to redeem the same. 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 the bonds of this series, existed, have happened and have been performed in due time, form and manner as required by law, and that the total indebtedness of said County, including the series of bonds of which this bond is one, does not exceed any constitutional or statutory limitation. IN WITNESS WHEREOF, the County of Oakland, Michigan, by its Board of Commissioners, has caused this bond to be executed in its name by facsimile signatures of the Chairman of the Board of Commissioners and the County Clerk and its corporate seal (or a facsimile thereof) to be impressed or imprinted hereon. This bond shall not be valid unless the Certificate of Authentication has been manually executed by an authorized representative of the bond regis- trar and paying agent. COUNTY OF OAKLAND (SEAL) By: By: County Clerk Chairman, Board of Commissioners CERTIFICATE OF AUTHENTICATION This bond is one of the bonds described in the within mentioned Resolution. Bond Registrar and Paying Agent By: Authorized Representative AUTHENTICATION DATE: -11- ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto (please print or type name, address and taxpayer identifica- tion number of transferee) the within bond and all rights thereunder and does hereby irrevocably constitute and appoint attorney to transfer the within bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed The signature must be guaranteed by a commercial bank, a trust company or a brokerage firm which is a member of a major stock exchange. 11. SECURITY. The bonds shall be issued in anticipation of payments to be made by the City pursuant to the aforesaid contracts dated as of January 1, 1987. The bonds shall be secured primarily by the full faith and credit pledges made by the City in said contracts with the County pursuant to the authorization contained in Act 342. As additional and secondary security the full faith and credit of the County are pledged for the prompt payment of the principal of and interest on the bonds as the same shall become due. If the City shall fail to make payments to the County which are sufficient to pay the principal of and interest on the bonds as the same shall become due, an amount sufficient to pay the deficiency shall be advanced from the general fund of the County. 12. PRINCIPAL AND INTEREST FUND. There shall be established for the bonds a Principal and Interest Fund which shall be kept in a separate bank account. From the proceeds of the sale of the bonds there shall be set aside in the Principal and Interest Fund any premium and accrued interest received from the purchaser of the bonds at the time of delivery of the same. All payments received from the City pursuant to the contracts are pledged for payment of the principal of and interest on the bonds and expenses incidental thereto and as received shall be placed in the Principal and Interest Fund. 13, CONSTRUCTION FUND. The remainder of the proceeds of the sale of the bonds shall be set aside in a construction fund and used to acquire and construct the projects in accordance with the provisions of the contracts dated January 1, 1987. -13- 14. APPROVAL OF MICHIGAN DEPARTMENT OF TREASURY - EXCEPTION FROM PRIOR APPROVAL. The issuance and sale of the bonds shall be subject to permission being granted therefor by the Department of Treasury of the State of Michigan or an exception from prior approval being granted by the Depart- ment of Treasury and the County Drain Commissioner or County Treasurer are hereby authorized to file with the Department of Treasury a Notice of Intent to Issue an Obligation with respect to the bonds and to pay, upon the filing of said notice, the filing fee of $400. If an exception from prior approval is not granted the County Drain Commissioner shall make application to the Department of Treasury for permis- sion to issue and sell the bonds as provided by the terms of this resolution and for approval of the form of Notice of Sale. 15. SALE, ISSUANCE, DELIVERY, TRANSFER AND EXCHANGE OF BONDS, The County Drain Commissioner is hereby authorized to prescribe the form of notice of sale for the bonds, to sell the bonds at not less than 100% of par plus accrued interest in accordance with the laws of this state and to do all things necessary to effectuate the sale, issu- ance, delivery, transfer and exchange of the bonds in accordance with the provisions of this resolution. 16. TAX COVENANT. The County covenants to comply with all requirements of the Internal Revenue Code of 1986, as amended, necessary to assure that the interest on the bonds will be and will remain exempt from federal income taxation. The County Drain Commissioner and other appro- priate County officials are authorized to do all things -14- necessary (including the making of covenants of the County) to assure that the interest on the bonds will be and will remain exempt from federal income taxation. 17. CONFLICTING RESOLUTIONS. All resolutions and parts of resolutions insofar as they may be in conflict herewith are rescinded. Mr. Chairperson, on behalf of the Planning and Building Committee, T move the adoption of the foregoing resolution. Planning & Building Committee Moved by Hobart supported by Skarritt the resolution be adopted. AYES: Nel jaaff__._._Rejmict,2,ekaad_,_Rowtanckarrittdjjs,ox, Aaron, Calandro, Crake, Doyon, Gosling, Hobart, Jensen, R. Kuhn, S. Kuhn, Lanni, Law, Luxon, McDonald, A. McPherson, R. McPherson, Moffitt. (23) NAYS: ABSENT: one (0) sadde_11, mcConnpli, Page,. A sufficient majority having voted therefor, the resolution was adopted. STATE OF MICHIGAN ) ) SS: COUNTY OF OAKLAND ) I hereby certify that the foregoing is a true and complete copy of a resolution duly adopted by the Board of Commissioners of said County at a regular meeting held on February 5, 1987 resolution is on file in my office. I further certify that notice of said meeting was given in accordance with the provisions of the open meeting act. Cou'hty Clerk County of Oakland , 1987, the original of which JAE/09007/0187/ADO/2