Supporting and Amend Ordinance No. 8318-92, as amended by ordinance 8419-93, Additions and Improvements to Waterworks

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No. 8801-97 adopted by the Council on June 23, 1997 (the "1997 Ordinance"), now outstanding in the amount of $17,465,000. There are also now outstanding bonds issued on account of the works and payable out of the revenues therefrom designated as the "Waterworks Revenue Bonds of 1993," dated November 1, 1993 (the "1993 Bonds"), originally issued in the amount of $5,100,000 authorized by Ordinance No. 8318-92 adopted by the Council on November 23,1992 (the "1992 Ordinance"), as amended by Ordinance No. 8419-93 adopted by the Council on September 27,1993 (the "1993 Ordinance"), now outstanding in the amount of $3,020,000 (the 2000 Bonds, 1997 Bonds and the 1993 Bonds are collectively referred to herein as the "Outstanding Bonds"). The Council has authorized certain "Waterworks Revenue Bonds of 2001" (the "New Bonds," and together with the Outstanding Bonds, the "Bonds") in an original principal amount not to exceed Six Million Dollars ($6,000,000.00) byOrdinance No. 9247-01 adopted by the Council on August 27, 2001 (the "2001 Ordinance") (the 2001 Ordinance, the 2000 Ordinance, the 1999 Ordinance, the 1997 Ordinance, the 1993 Ordinance and the 1992 Ordinance are collectively referred to herein as the "Ordinances"). The 1997 Bonds were insured by the Financial Security Assurance Inc. ("FSA") to provide funds for the payment of the principal and interest on the 1997 Bonds when due and for which the City shall have failed to provide sufficient funds for the payment thereof. The City entered into a Financial Assistance Agreement with the State of Indiana (the "State"), dated June 15, 2000, with respect to the 2000 Bonds, pursuant to the State's Drinking Water Revolving Program (the "Finance Assistance Agreement"). The Outstanding Bonds and the New Bonds and the related Ordinances require the establishment of a Debt Service Reserve Account in the Sinking Fund and the funding of a 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 and the New Bonds when due. The Council has determined that it is beneficial to the City's waterworks and the owners of the Bonds to adopt this supplemental ordinance, to supplement and amend each of the Ordinances, pursuant to (i) Section 24 of the 1992 Ordinance, (ii) Section 23 of the 1997 Ordinance, (iii) Section 23 of the 2000 Ordinance, and (iv) Section 23 of the 2001 Ordinance, and to substitute an insurance policy 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 waterworks. FSA has reviewed this supplemental ordinance and has approved and consented in writing to supplementing and amending the 1997 Bonds and the 1997 Ordinance as provided herein, in accordance with Section B.7. of a certain Insurance Agreement between the City and FSA, dated December 1, 1997. -2-