05/15/89 Board of Public Works Minutes

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139 REGULAR MEETING MAY 15, 1989 Defeasance of the 1971 bond issue made the 1989 bonds more marketable and removes the lien from the 1971 bond holders. This is accomplished by puting the money into an escrow fund from which bond holders will be paid. It was noted that there was no provision in the 1971 bond issue to redeem the bonds early and therefore the alternative is to put the money into the escrow account. Therefore, Mrs. DeClercq made a motion that the Resolution No. 18-1989 as submitted today be adopted. Mr. Leszczynski seconded the motion which carried, and the following Resolution was adopted: RESOLUTION NO. 18-1989 RESOLUTION OF THE CITY OF SOUTH BEND BOARD OF PUBLIC WORKS APPROVING AN ESCROW TRUSTEE AGREEMENT REGARDING THE SEWAGE WORKS REVENUE BONDS SECOND SERIES, DATED JULY 1, 1971 WHEREAS, the City of South Bend Board of Public Works (the "Board of Public Works") operates the South Bend Waste Water Treatment Plant (the "Plant") and the City of South Bend Sewage Works (the "Sewage Works") pursuant to IC 36-9-23; and WHEREAS, pursuant to Ordinance No. 5298, adopted by the Common Council of the City (the "Common Council") on May 25, 1971 (the 111971 Bond Ordinance"), the City has heretofore issued its Sewage Works Revenue Bonds, Second Series, dated July 1, 1971 (the 111971 Bonds") in the amount of Three Million One Hundred Ninety Thousand Dollars ($3,190,000), payable solely from the revenues of the Sewage Works including the Plant, and presently outstanding in the amount of One Million Two Hundred Five Thousand Dollars ($1,205,000), maturing annually over a period ending on October 1, 1990 and bearing interest at the per annum rate of 6.10% with respect to the 1971 Bonds maturing on October 1, 1989 and at 6.25% with respect to the 1971 Bonds maturing on October 1, 1990; and WHEREAS, pursuant to Ordinance No. 7951-88 (the 111989 Bond Ordinance"), adopted by the Common Council on December 12, 1988, the City has heretofore issued its City of South Bend, Indiana Sewage Works Revenue Bonds of 1989 (the "Series 1989 Bonds") dated February 1, 1989 in the amount of Nine Million Five Hundred Thousand Dollars ($9,500,.000.00) for the purpose of providing funds necessary to pay a portion of the costs of acquiring and constructing certain improvements to the Plant, together with expenses incidental thereto; and WHEREAS, the 1989 Bond Ordinance provides that when the 1971 Bonds shall have matured and all principal and interest payments on said 1971 Bonds have been made, or funds in an amount sufficient to pay when due at maturity the principal of all the 1971 Bonds then outstanding, together with the interest thereon to the date of maturity thereof (the "Defeasance Amount") have been deposited with a financial institution appointed by the City as escrow trustee for purposes of holding the Defeasance Amount in trust for the holders of the 1971 Bonds and making, when due, all required principal and interest payments on said 1971 Bonds, the provisions of Section 12 and 13 of the 1989 Bond Ordinance shall no longer be applicable to the Series 1989 Bonds and the provisions of Sections 14 and 15 of the 1989 Bond Ordinance shall be applicable and in full force and effect for the Series 1989 Bonds and any additional bonds issued pursuant to the provisions of the 1989 Bond Ordinance; and