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Notice of Intent to Execute Tax-Supported Contract and of Right to Petition for Referendum Thereon

TO THE TAXPAYERS AND ELECTORS OF
THE CITY OF TAWAS CITY,
IOSCO COUNTY, MICHIGAN:

PLEASE TAKE NOTICE, the City of Tawas City (the “City”) has approved by resolution the execution of a contract (the “Contract”) with the Tawas Utilities Authority (the “Authority”) and the City of East Tawas (“East Tawas”) pursuant to Act No. 233, Public Acts of Michigan, 1955, as amended, which Contract provides, among other things, that the Authority will acquire, construct and install certain improvements to the wastewater treatment plant, consisting of improvements, replacements, and rehabilitation of the headwork system, primary and secondary clarifiers, oxidation ditches, sludge pumping equipment, anaerobic digesters, SCADA systems, building HVAC system, standby generator, and structural, safety and aesthetic upgrades, together with all necessary appurtenances and attachments thereto to service the City and East Tawas and will issue its bonds in the principal amount not to exceed $17,000,000 to finance the cost of the acquisition and construction of such wastewater improvements for the City and East Tawas AND THE CITY WILL PAY TO THE AUTHORITY PURSUANT TO THE CONTRACT THE SUMS NECESSARY TO RETIRE ITS PERCENTAGE SHARE OF THE PRINCIPAL OF AND INTEREST ON SAID BONDS.

CITY’S CONTRACT OBLIGATIONS

It is presently contemplated that the bonds will be in the principal amount of not to exceed $17,000,000, of which the City’s “Local Unit Share” (as that term is defined in the Contract) is initially 50%, payable in not to exceed thirty (30) annual installments, and will bear interest at the rate or rates to be determined at the time of sale to the Michigan Finance Authority but in no event to exceed two and one-eighths percent (2.125%) per annum on the balance of the bonds from time to time remaining unpaid.  The Contract includes the City’s pledge of its limited tax full faith and credit for the prompt and timely payment of the City’s obligations as expressed in the Contract.  THE CITY WILL BE REQUIRED TO LEVY AD VALOREM TAXES WITHIN APPLICABLE CONSTITUTIONAL, STATUTORY AND CHARTER TAX LIMITATIONS ON ALL TAXABLE PROPERTY WITHIN THE CITY TO THE EXTENT NECESSARY TO MAKE THE PAYMENTS REQUIRED TO PAY ITS SHARE OF THE PRINCIPAL OF AND INTEREST ON THE BONDS IF OTHER FUNDS FOR THAT PURPOSE ARE NOT AVAILABLE.  IT IS THE PRESENT INTENT OF THE CITY TO USE REVENUES FROM THE SEWAGE DISPOSAL SYSTEM TO MAKE THE PAYMENTS REQUIRED TO PAY PRINCIPAL OF AND INTEREST ON THE BONDS.

RIGHT OF REFERENDUM

The Contract will become effective and binding upon the City without vote of the electors as permitted by law unless a petition requesting an election on the question of the City entering into the Contract, signed by not less than 10% of the registered electors of the City, is filed with the City Clerk within forty-five (45) days after publication of this notice.  If such petition is filed, the Contract cannot become effective without an approving vote of a majority of electors of the City qualified to vote and voting on the question.  The Contract is on file at the office of the City Clerk.

This notice is given pursuant to the requirements of Section 8 of Act No. 233, Public Acts of Michigan, 1955, as amended.  Further information concerning the details of the Contract and the matters set out in this notice may be secured from the City Clerk’s office.

Michelle Westcott
Clerk, City of Tawas City

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