9534-04 Supplementing and Amending Ordinance No. 8919-98 - the Sewage Works and Issuance of Revenue Bonds and Various matters

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The City entered into a Financial Assistance Agreement with the State of Indiana (the "State"), dated December 30, 1998, with respect to the 1998 Bonds, pursuant to the State's Wastewater Revolving Loan Program (the "Financial Assistance Agreement"). The Outstanding Bonds and the related Prior Bond Ordinances require the establishment of a Debt Service Reserve Account in the Sewage Works Sinking Fund and the funding of a Debt Service Reserve Requirement in order to provide payment in the event such monies in the Bond and Interest Account are insufficient to pay the principal and interest on the Outstanding Bonds when due. As an alternative to holding the Debt Service Reserve Requirement in the Debt Service Reserve Account in cash funds, the 2001 Ordinance and the 2004 Ordinance each include a provision (the "Debt Service Reserve Account Insurance Provision"), which permits the City to purchase one or more Debt Service Reserve Account insurance policy(s), to provide for payment of principal and interest on the Outstanding Bonds in the event that funds in the Bond and Interest Account are insufficient to pay the principal and interest on the Outstanding Bonds when due. The 1998 Ordinance does not include a Debt Service Reserve Account Insurance Provision, and the Council has determined that it is beneficial to the Sewage Works and the owners of the 1998 Bonds to adopt this supplemental ordinance, to supplement and amend the 1998 Ordinance, pursuant to Section 21 of the 1998 Ordinance, to add a Debt Service Reserve Account Insurance Provision to permit the City to substitute one or more insurance policy(s) to provide funds for the Debt Service Reserve Account thereby freeing monies currently held in the Debt Service Reserve Account for use by and improvement of the Sewage Works. The Indiana Bond Bank, the holder of the 1998 Bonds, and the State, have each reviewed this supplemental ordinance and have approved and consented in writing to supplementing and amending the 1998 Bonds and the 1998 Ordinance as provided herein, in accordance with Section 21 of the 1998 Ordinance and Section 3.02(m) of the Financial Assistance Agreement. NOW THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA AS FOLLOWS: SECTION 1. SUPPLEMENT AND AMENDMENT TO 1998 ORDINANCE -SEWAGE WORKS SINKING FUND. Subsection (b) of Section 11 of the 1998 Ordinance, more specifically Ordinance No.8919-98, is hereby supplemented and amended by adding the following paragraphs to such Subsection (b) of Section 11: "As an alternative to holding the Debt Service Reserve Requirement in the Debt Service Reserve Account in cash funds, and if permitted by applicable law and under the terms of all obligations and agreements to which the City is or may become subject, the City may purchase one or more Debt Service Reserve Account insurance policy(s) (the "Reserve Policy") provided by a bank, insurance company, financial institution or other entity ("Reserve Policy Issuer") with a long term debt rating at least equal to the rating category on the 1998 Bonds or additional bonds payable out of the net revenues of the Sewage Works on a parity with the 1998 Bonds ("Parity Bonds"), by the rating agency or agencies then rating the 1998 Bonds and the Parity -2-