10963-23-Ordinance Authorizing the Acquisition and Construction of Certain Additions and Improvements to the Municipal Waterworks of the City of South Bend

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and used to pay interest on the Bonds. The remaining proceeds from the sale of the Bonds, to the extent not used to refund BANs, and BAN proceeds shall be deposited in a bank or banks which are legally designated depositories for the funds of the City, in a special account or accounts to be designated as"City of South Bend,Waterworks Construction Account"("Construction Account"). All funds deposited to the credit of the Waterworks Sinking Fund or the Construction Account shall be deposited, held, secured or invested in accordance with the laws of the State of Indiana relating to the depositing,holding, securing or investing of public funds,including particularly I.C. 5-13, I.C. § 5-1.2-1 through I.C. § 5-1.2-4, I.C. § 5-1.2-10, I.C. § 5-1.2-11, I.C. § 5-1.2-14 and/or I.C. § 5-1.2-14.5, as amended and supplemented. The funds in the Construction Account shall be expended only for the purpose of paying the cost of the Project, refunding the BANs, if issued, or as otherwise required by the Act or for the expenses of issuance of the Bonds. The cost of obtaining the legal services of Bond Counsel and the services of the Municipal Advisor shall be considered as a part of the cost of the Project on account of which the Bonds and BANs are issued. Any balance or balances remaining unexpended in such special account or accounts after completion of the Project which are not required to meet unpaid obligations incurred in connection with such Project shall either(1)be paid into the Waterworks Sinking Fund and used solely for the purposes of said Waterworks Sinking Fund or(2)be used for the same purpose or type of project for which the Bonds were originally issued, all in accordance with I.C. 5-1-13, as amended and supplemented. With respect to any BANs or Bonds sold to the Authority as part of its IFA Program, to the extent that(a) the total principal amount of the BANs or Bonds is not paid by the purchaser or drawn down by the City, or(b)proceeds remain in the Construction Account and are not applied to the Project (or any modifications or additions thereto approved by the Authority), the City shall reduce the principal amount of the remaining Bond maturities to effect such reduction in amounts which will still achieve the annual debt service as described in Section III(b) subject to and upon the terms set forth in the Financial Assistance Agreement. SECTION XII. Pledge of Net Revenues: Payment of Principal and Interest. The Bonds, and any bonds ranking on a parity therewith, including the Prior Bonds, as to principal, premium,if any,and interest,shall be payable solely from and are secured by an irrevocable pledge of and shall constitute a charge upon all the Net Revenues (as defined in the following sentence) of the works. The term "Net Revenues," as used herein, shall be defined as the gross revenues of the works, including System Development Charges, after deduction only for the payment of the reasonable expenses of operation, repair and maintenance of the works, and which reasonable expenses of operation, repair and maintenance specifically do not include any rates or charges in lieu of taxes made and collected by the works and transferred to the City in accordance with the Act (the "PILOT Payment"). The City specifically subordinates its right to receive any PILOT Payment to the rights of the holders of the Bonds, and any Parity Bonds,including the Prior Bonds, to receive payment of the principal,premium, if any, and interest,payable on such bonds. PILOT Payments may be made only if all monthly deposits required by this Ordinance are current and held as of such dates in the Operation and Maintenance Fund and the Sinking Fund(each as defined herein). Other than PILOT Payments and normal and regular pro rata payments to the City for shared expenses charged by the City to its various departments, no moneys derived from the revenues of the works shall be transferred to the General Fund of the City or be used for any purpose not connected with the works. For purposes of this ordinance, "System Development Charges" shall mean the proceeds and balances from any non-recurring charges related to or associated with the waterworks of the City such as tap fees, subsequent connector fees, capacity or contribution fees, and other similar one-time charges that are available for deposit under this ordinance. SECTION XIII. Revenue Fund. There is hereby continued a fund of the utility created and designated in the Prior Ordinances as the Revenue Fund (the "Revenue Fund"). All income and revenues derived from the operation of the works (including System Development Charges) shall be paid into the Revenue Fund for application as described below. All monies deposited in the Revenue Fund may be invested in accordance with the provisions of I.C. § 5-13- 9, as amended, and other applicable laws. The Revenue Fund shall be maintained separate and apart from all other accounts of the City. No monies derived from the revenues of the System shall be transferred to the General Fund of the City, or be used for any purpose not connected with the Waterworks, including without limitation Pilot Payments, except as provided by Section XII hereof. SECTION XIV. Operation and Maintenance Fund. There is hereby continued a fund of the utility created and designated in the Prior Ordinances as the Operation and Maintenance Fund (the "Operation and Maintenance Fund") (also shown on the books of the utility as the Operating Fund). There shall be transferred from the Revenue Fund and credited to the Operation - 15 -