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

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COUNTY-CITY BUILDING $OVR-I BEND, INDIANA 46601-1830 CITY OF SOUTH BEND STEPHEN J. LUECKE, MAYOR PHONE 574/ 235-9216 Fnx 574/235-9928 TDD 574/ 235-5567 DEPARTMENT OF ADMINISTRATION AND FINANCE FREDERICK B. OLLETT, III CONTROLLER September 1, 2004 Ms. Karen White President, South Bend Common Council 4`'' Floor, County-City Building South Bend, IN 46601 Re: An Ordinance Amending Ordinance #8919-98 to Authorize Procurement of a Debt Service Reserve Account Insurance Policy in Lieu of Cash Funds Dear Ms. White: The South Bend Common Council has previously authorized the issuance of bonds, which remain outstanding, for capital improvements to the South Bend Sewage Works. Specifically, Indiana Sewage Works Revenue Bonds were issued in the original amount of $24,095,000 dated December 30, 1998 (the 1998 Bonds) pursuant to Ordinance 8919-98. South Bend Sewage Works Refunding Revenue Bonds of 2001 (the 2001 Bonds) were issued in the original amount of $5,240,000 per Ordinance 9270-01. Most recently, Indiana Sewage Works Revenue Bonds have been issued in 2004 in the original amount of $11,425,000 per Ordinance 9523-04 (the 2004 Bonds). All outstanding Bonds and their corresponding Bond Ordinances require the establishment of a Debt Service Reserve Account in the Sewage Works Sinking Fund and the funding of a Debt Service Reserve Requirement in order to provide payment in the event such monies in the Bond and Interest Account are insufficient to pay the principal and interest on the Outstanding Bonds when due. As an alternative to cash funding of the Debt Service Reserve Account, a Debt Service Reserve Account insurance policy can be procured to pay the principal and interest on the Outstanding Bonds if the Bond and Interest Account are insufficient to pay principal and interest on the Outstanding Bonds when due. Both the 2001 Bond Ordinance and the 2004 Bond Ordinance include a provision authorizing a Debt Service Reserve Account insurance policy in lieu of the Debt Service Reserve Account in cash funds. The City's Finance Department has determined that a Debt Reserve Account insurance policy CATHERINE A.HUBBARD-BREAD I.IZROWE THOMAS$KARBEK SUSANWALLACE RoBERTAI.I.EN DIRECTOR DIRECTOR DIRECTOR MANAGER DIRECTOR I"IUMAN RESOURCES CITY FINANCE BUDGETING & FINANCIAL REPORTING BENEFIT'S INFORMATIONTECHNOLOGY