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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SECTION XXI. Additional Bonds. The City reserves the right to authorize and issue additional BANs at any time ranking on parity with the BANs. The City also reserves the right to issue additional bonds payable out of the Net Revenues ranking on a parity with the Bonds for the purpose of financing the cost of future additions, extensions and improvements to the works, or to provide for a complete or partial refunding of obligations, subject to the following conditions precedent: (a) The interest on and principal of all bonds payable from the Net Revenues shall have been paid to date in accordance with the terms thereof, and all required payments into the Sinking Fund required by this Ordinance shall have been made. The Common Reserve Subaccount shall serve as the reserve for the Parity Bonds, and the Reserve Requirement shall be satisfied for the Parity Bonds either at the time of delivery of the Parity Bonds or over a five-year or shorter period,in a manner which is commensurate with the requirements established in Section XV(i) of this Ordinance. (b) The Net Revenues in the fiscal year immediately preceding (or the fiscal year prior to the immediately preceding fiscal year if the additional Parity Bonds close within 90 days of the end of the calendar year) the issuance of any such bonds ranking on a parity with the Bonds shall be not less than one hundred twenty-five percent (125%) of the maximum annual principal and interest requirements of the then outstanding bonds (including the Bonds and the Prior Bonds) and the Parity Bonds proposed to be issued; or, prior to the issuance of the Parity Bonds, the water rates and charges shall be increased sufficiently so that the increased rates and charges applied to the previous fiscal year's operations (or the fiscal year prior to the immediately preceding fiscal year if the additional Parity Bonds closed within 90 days of the end of the calendar year) would have produced Net Revenues for the year equal to not less than one hundred twenty- five percent (125%) of the maximum annual principal and interest requirements of the then outstanding bonds and the Parity Bonds proposed to be issued. For purposes of this subsection, the records of the works shall be analyzed and all showings shall be prepared by an independent certified public accountant employed by the City for that purpose. In addition, for purposes of this subsection, with respect to any Parity Bonds hereafter issued while the Bonds remain outstanding and owned by the Authority as part of its IFA Program, Net Revenues may not include any revenues from the System Development Charges unless the Authority provides its consent to include all or some portion of the System Development Charges as part of the Net Revenues or otherwise consents to the issuance of such Parity Bonds without satisfying this subsection(b). (c) To the extent required by law, the issuance of the proposed Parity Bonds and any necessary increase in water rates and charges shall have been approved by the Indiana Utility Regulatory Commission, or any successor body vested by law with authority to approve bonds and water rates and charges of municipal waterworks. (d) The principal of,or mandatory sinking fund redemption dates for said Parity Bonds shall be payable annually on January 1 through January 1, 2033, and on January 1 on July 1 thereafter, and the interest shall be payable semi-annually on January 1 and July 1 during the periods such principal and interest are payable while the Bonds and Prior Bonds are outstanding. (e) So long as the 2009A Bonds or if the Bonds or any other Parity Bonds are sold to the Authority through the IFA Program remain then outstanding, (i) the City shall obtain the consent of the Authority to the issuance of the proposed Parity Bonds; (ii) each of the City and the Common Council shall have faithfully performed and is in compliance with each of its obligations, agreements, and covenants contained in the Financial Assistance Agreement and this Ordinance; and (iii)the City is in compliance with its System permits, except for noncompliance, the elimination of which is a purpose for which the Parity Bonds, including any refunding bonds, are issued, so long as such issuance constitutes part of an overall plan to eliminate such noncompliance. SECTION XXII. Further Covenants of the City. For the purpose of further safeguarding the interests of the owners of the Bonds and BANs, it is hereby specifically provided as follows: (a) All contracts let by the City in connection with the construction of the Project shall be let after due advertisement as required by the laws of the State of Indiana, and all contractors shall be required to furnish surety bonds in an amount equal to 100%of the amount of such contracts,to insure the completion of said contracts in accordance with their terms, and such contractors shall also be required to carry such employers' liability and public liability insurance - 21 -