(65 ILCS 5/11-137-3) (from Ch. 24, par. 11-137-3)
Sec. 11-137-3. If any municipality is authorized to purchase a waterworks or sewerage system, or both, as provided in Section 11-137-2, and if the system is pledged to secure the payment of bonds, or other written evidences of indebtedness, by a mortgage or trust deed, the corporate authorities of the municipality may direct the municipal clerk or treasurer, by a motion or resolution, to enter the bonds, or the other written evidences of indebtedness on the records of the municipality as an indebtedness against the waterworks or sewerage system only. The corporate authorities shall have all the revenue derived from the operation of the system, and all rents due and payable to the former owners for use of the water and sewerage facilities, and pledged for the payment of the indebtedness, set apart in a separate fund for the payment of the indebtedness as it becomes due and payable, provided the system can be operated and maintained from the current funds of the municipality appropriated therefor.
Nothing contained in this Division 137 affects any lien or renders void any bond, mortgage, or trust deed securing any indebtedness upon the system, or any franchise under which the system is operated, or any contract executed by any person as owner for the construction and installation of the waterworks or sewerage system, or both, prior to the transfer of the system to the municipality as provided in this Division 137. If the municipality neglects or fails to pay the indebtedness as it falls due and if any mortgage or trust deed is foreclosed at the instance of bona fide holders of unpaid bonds or other written evidences of indebtedness, the mortgagee or trustee for those bona fide holders shall be re-invested with all former rights which existed in their behalf by virtue of the franchise and contract which were granted by the municipality, and which were pledged.
(Source: Laws 1961, p. 576.)
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Last modified: February 18, 2015