(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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