9937-09 Concerning the Construction of Improvements to the Municipal Waterworks of the City

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Series equal to the amount described in Section 14(b) will be deposited to the Subaccount of the Debt Service Reserve Account for the 2009 Bonds of such Series and applied as described below. The remaining proceeds from the sale of the 2009 Bonds, to the extent not used to refund BANS issued pursuant to this Ordinance, shall be deposited in a fund of the utility hereby created and designated as "City of South Bend, Indiana Waterworks 2009 Bond Construction Fund" (the "Construction Fund"). The proceeds deposited in the Construction Fund, together with all investment earnings thereon, shall be expended only for the purpose of paying the costs of the Project and the costs of selling and issuing the 2009 Bonds, including the premium for any bond insurance obtained for the 2009 Bonds. Any balance remaining in the Construction Fund after the completion of the Project which is not required to meet unpaid obligations incurred in connection therewith and on account of the sale and issuance of the 2009 Bonds shall be paid into the Principal and Interest Account of the Sinking Fund and used solely for the purposes of such Account or used for the same purpose or type of project for which the 2009 Bonds were originally issued, all in accordance with I.C. 5-1-13, as amended or as otherwise permitted by law. With respect to any 2009 Bonds sold to the Indiana Finance Authority, to the extent that (a) the total principal amount of the 2009 Bonds is not paid by the purchaser or drawn down by the City, or (b) proceeds remain in the Construction Fund and are not applied to the Project (or any modifications or additions thereto) approved by IDEM and the Indiana Finance Authority, the City shall reduce the principal amount of the 2009 Bond maturities to effect such reduction in a manner that will still achieve as level annual debt service as practicable as described in Section 2(a). SECTION 12. 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 of the works shall be paid into the Revenue Fund for application as described below. SECTION 13. 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 and Maintenance Fund, on the last day of each calendar month, a sufficient amount so that the balance in this Fund shall be sufficient to pay the expenses of operation, repair and maintenance for the then next succeeding two calendar months. .The moneys credited to this Fund shall be used for the payment of the reasonable and proper operation, repair and maintenance expenses of the works on a day-to-day basis, but none of the moneys in the Operation and Maintenance Fund shall be used for depreciation, replacements, improvements, extensions or additions. Any balance in Operation and Maintenance Fund in excess of the expected expenses of operation, repair and maintenance for the next succeeding two calendar months may be transferred to the Sinking Fund if necessary to prevent a default in the payment of principal of or interest on the outstanding bonds of the works. -20-