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HomeMy WebLinkAbout9972-09 Amending ordinance 9672-06 entitled Authorizing the acquistions and installation of certain improvementsORDINANCE No. A Passed by the Common Council of the Ciry of Soutlr Bend, Indiana October 26, Attest: Attest: Presented by me to the Mayor of the City of South Bend, Indiana October 27, 2~9 Ciry Clerk President of Common Council City Clerk Approved and signed by me ~9 October 28, 20~ 9 ~y„~, //~'~ Mayer ORDINANCE NO. ~ ~ 2= ~ AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, FURTHER AMENDING ORDINANCE N0.9672-06 ENTITLED "AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE ACQUISITION AND INSTALLATION OF CERTAIN IMPROVEMENTS TO THE CITY'S SEWAGE WORKS, THE ISSUANCE AND SALE OF ADDITIONAL REVENUE BONDS TO PROVIDE FUNDS FOR THE PAYMENT OF THE COSTS THEREOF, AND THE COLLECTION, SEGREGATION AND DISTRICT OF THE REVENUES OF SUCH SEWAGE WORKS AND OTHER RELATED MATTERS" The Common Council (the "Common Council") of the City of South Bend, Indiana (the "City"), has previously adopted Ordinance No. 9672-06 on April 10, 2006 (the "Original Ordinance"), authorizing the issuance of multiple series of sewage works revenue bonds by the City in an aggregate principal amount not to exceed Fifty-six Million Three Hundred Eighty Thousand and 00/100 Dollars ($56,380,000.00), which Original Ordinance was amended by the Common Council with the adoption of Ordinance No. 9767-07 on June 25, 2007 (the "Amending Ordinance" and with the Original Ordinance, the "Bond Ordinance"). The City has previously issued pursuant to the Bond Ordinance its (i) Sewage Works Revenue Bonds of 2006 on June 6, 2006, in the aggregate principal amount of Seven Million Six Hundred Thirty Thousand and 00/100 Dollars ($7,630,000.00); (ii) Sewage Works Revenue Bonds of 2007 on June 20, 2007, in the aggregate principal amount of Sixteen Million Six Hundred Thousand and 00/100 Dollars ($16,600,000.00); and (iii) Sewage Works Revenue Bonds of 2007 B on December 27, 2007, in the aggregate principal amount of Sixteen Million Five Hundred Fifteen Thousand and 001100 Dollars ($16,515,000.00). The City expects to sell one (1) additional series of sewage works revenue bonds pursuant to the Bond Ordinance in an aggregate principal amount not to exceed Fifteen Million Six Hundred Thirty-five Thousand and 00/100 Dollars ($15,635,000.00). In order to provide for an alternative sale method to achieve greater interest savings on such series of bonds, the Common Council desires to amend the Bond Ordinance to include certain additional provisions to authorize the sale of such series of sewage works revenue bonds to the Indiana Bond Bank (the "Bond Bank"), pursuant to the provisions of Indiana Code 5-1.5, or the Indiana Finance Authority (the "Authority"), pursuant to the provisions of Indiana Code 4-4-11 and Indiana Code 13-18-13. NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS: BDDB01 5863495v1 Section 1. The section of the Bond Ordinance labeled Section III. The Bonds is hereby amended to read as follows: Section III. The Bonds. In accordance with the Act and for the purpose of providing funds with which to pay the costs of the Project, together with all authorized costs relating thereto including the costs of issuance of the Bonds, as hereinafter defined, on account thereof, the City shall issue and sell its sewage works revenue bonds in the aggregate principal amount not to exceed Fifty-six Million Three Hundred Eighty Thousand and 00/100 Dollars ($56,380,000.00). The principal of, redemption premium, if any, and interest on the Bonds shall be payable, on a parity basis with the Prior Bonds, solely out of the Sewage Works Sinking Fund referred to below. The Bonds shall be issued in one (1) or more series designated as the "City of South Bend, Indiana, Sewage Works Revenue Bonds of 200_" (with the blank to be filled in with the year in which each series of bonds are issued, with a letter designation in the event two (2) series of bonds are issued in the same calendar year) (the "Bonds"). The Bonds shall be issued as fully registered bonds in denomination or denominations of Five Thousand Dollars ($5,000) and any integral multiples thereof not exceeding the aggregate principal amount of such Bonds maturing in any one (1) year, or in the event that the Bonds are sold to the Indiana Bond Bank (the "Bond Bank") or to the Indiana Finance Authority (the "Authority") pursuant to Section VIII of this Ordinance, shall be in multiples of One Dollar ($1). The Bonds shall be numbered consecutively from 200 R-1 (with the blank to be filled in with the year in which each series of bonds are issued, with a letter designation in the event two (2) series of bonds are issued in the same calendar year) upward and shall bear interest at a rate not exceeding eight percent (8.0%) per annum (or at the rate provided in the Purchase Agreement (as hereinafter defined) with respect to any series of the Bonds that are sold to the Bank, or as provided in the Financial Assistance Agreement with respect to any series of the Bonds that are sold to the Authority), the exact rate or rates to be determined by bidding or by negotiation with the Bond Bank or the Authority. If determined by public bidding, said interest rate or rates shall be in multiples ofone-eighth (1/8) or one-twentieth (1/20) of one percent (1%); otherwise, said interest rate or rates shall be in multiples of one- hundredth (1/100) of one percent (1%). All Bonds of a series maturing on the same date shall bear the same rate of interest, and the interest rate on Bonds of a series of a given maturity must be at least as great as the interest rate on Bonds of any earlier maturity. Interest on each series of the Bonds shall be calculated on the basis of twelve (12) thirty (30)-day months for a three hundred and sixty (360)-day year and shall be payable semiannually on December 1 and June 1 in each year (each an "Interest Payment Date"), commencing on the first December 1 or June 1, following the original date of the Bonds as determined by the Controller, with the advice of the City's financial advisor and as set forth in the Issuer's Certificate (defined herein) and in the notice of intent to sell bonds for each series of the Bonds until principal is fully paid, or as set forth in the Financial Assistance Agreement to be entered into between -2- BDDBQI 5863495v1 the City and the Authority (the "Financial Assistance Agreement"). The principal of each series of the Bonds shall mature serially and annually on December 1 of each year, over a period ending no later than twenty-two (22) years from the date of issuance of each series of the Bonds, and in the years and amounts to be determined by the Controller with the advice of the City's financial advisor prior to the publication of the notice to intent to sell bonds referred to herein and set forth in the Issuer's Certificate with respect to each series of Bonds; except as otherwise provided in the Financial Assistance Agreement if the Bonds are sold to the Authority, and in the years and amounts to be determined by negotiation with the Bond Bank or the Authority. The Bonds shall bear an original issue date which shall be the date of issuance of the Bonds or the first day of the month in which the Bonds are delivered, as determined by the Controller and set forth in the Issuer's Certificate for each series of Bonds (unless otherwise provided in the Purchase Agreement in the event the Bonds are sold to the Bond Bank or unless otherwise provided in the Financial Assistance Agreement in the event such series of the Bonds is sold to the Authority), and each Bond shall also bear the date of its authentication. Any Bond authenticated on or before the fifteenth (15th) day of the calendar month immediately preceding the first Interest Payment Date, shall pay interest from its original issue date. Any Bond authenticated thereafter shall pay interest from the Interest Payment Date next preceding the date of authentication of such Bond to which interest thereon has been paid or duly provided for, unless such Bond is authenticated after the day which is fifteen (15) days prior to the Interest Payment Date and on or before such Interest Payment Date, in which case interest thereon shall be paid from such Interest Payment Date. In the event that the Bonds are sold to the Authority or any other purchaser who so agrees pursuant to Section VIII of this Ordinance, it is understood that principal shall not be payable and interest shall not accrue on the Bonds until such principal amount has been advanced pursuant to requests made by the City to the Authority or to any such other purchaser, with advances to be allocable to the Bonds in order of maturity. If the Bonds are sold to the Authority, to the extent that (a) the total principal amount of the Bonds is not paid by the purchaser or drawn down by the City or (b) proceeds remain in the Construction Account established under Section X of this Ordinance and are not applied to the Project (or any modifications or additions thereto approved by the Department and the Authority for that portion or portions of the Project funded in whole or in part by Bonds sold to the Authority), the City shall reduce the principal amount of the Bonds' maturities to effect such reduction in a manner that will still achieve as level an annual debt service as practicable as described in this Section III subject to and upon the terms forth in the Financial Assistance Agreement. The Controller is hereby authorized to appoint a registrar and a paying agent for each series of the Bonds (the "Registrar" and the "Paying Agent" and, in both such capacities, the "Registrar and Paying Agent"). The Registrar and Paying BDDBOI 5863495v1 -3- Agent shall be charged with and shall by appropriate agreement undertake the performance of all of the duties and responsibilities customarily associated with each such position, including without limitation the authentication of the Bonds. The Controller is authorized and directed to enter into such agreements and understandings with the Registrar and Paying Agent and any subsequent Registraz and Paying Agent as will enable and facilitate the performance of its duties and responsibilities, and is authorized and directed to pay such fees as the Registrar and Paying Agent may reasonably chazge for its services in such capacity, and such fees maybe paid from the Sewage Works Sinking Fund continued by this Ordinance. If the Bonds or BANs aze registered in the name of the Authority, the Bond Bank or any other purchaser that does not object to such designation, the Controller shall be designated as the Registrar and Paying Agent and shall be charged with the performance of all of the duties and responsibilities of Registrazand Paying Agent. The Registraz and Paying Agent may at any time resign as Registrar and Paying Agent upon giving thirty (30) days' notice in writing to the City and by first-class mail to each registered owner of the Bonds then outstanding, and such resignation will take effect at the end of such thirty (30) days or upon the earlier appointment of a successor Registrar and Paying Agent by the City. Any such notice to the City may be served personally or sent by certified mail. The Registraz and Paying Agent may also be removed at any time as Registraz and Paying Agent by the City, in which event the City may appoint a successor Registrar and Paying Agent. The City shall notify each registered owner of Bonds then outstanding by first-class mail of the removal of the Registrar and Paying Agent. Notices to registered owners of the Bonds shall be deemed to be given when mailed by first-class mail to the addresses of such registered owners as they appear on the registration books kept by the Registraz. Any predecessor Registrar and Paying Agent shall deliver all of the Bonds and cash in its possession with respect thereto, together with the registration books, to the successor Registrar and Paying Agent. The Controller is hereby authorized to act on behalf of the City with regazd to any of the aforementioned actions of the City relating to the resignation or removal of the Registrar and Paying Agent and appointment of a successor Registraz and Paying Agent. If the Bonds aze sold by public bidding, the Bonds shall, in compliance with all applicable laws, be issued and held in book-entry form on the books of the central depository system, The Depository Trust Company, its successors, or any successor central depository system appointed by the City from time to time (the "Clearing Agency"). The City and the Registrar and Paying Agent may, in connection therewith, do or perform or cause to be done or performed any acts or things not adverse to the rights of the holders of the Bonds, as are necessary or appropriate to accomplish or recognize such book-entry form Bonds. During any time that the Bonds are held in book-entry form on the books of a Clearing Agency (1) any such Bond may be registered upon the books -4- BDDBOI 5863495v1 kept by the Registrar and Paying Agent in the name of such Clearing Agency, or any nominee thereof, including CEDE & Co., as nominee of The Depository Trust Company; (2) the Clearing Agency in whose name such Bond is so registered shall be, and the City and the Registraz and Paying Agent may deem and treat such Clearing Agency as, the absolute owner and holder of such Bond for all purposes of this Ordinance, including, without limitation, the receiving of payment of the principal of and interest on such Bond, the receiving of notice, and the giving of consent; (3) neither the City nor the Registrar and Paying Agent shall have any responsibility or obligation hereunder to any direct or indirect participant, within the meaning of Section 17A of the Securities Exchange Act of 1934, as amended, of such Clearing Agency, or any person on behalf of which, or otherwise in respect of which, any such participant holds any interest in any Bond, including, without limitation, any responsibility or obligation hereunder to maintain accurate records of any interest in any Bond or any responsibility or obligation hereunder with respect to the receiving of payment of principal, premium, if any, or interest on any Bond, the receiving of notice, or the giving of consent; (4) the Clearing Agency is not required to present any Bond called for partial redemption prior to receiving payment so long as the Registrar and Paying Agent and the Clearing Agency have agreed to the method for noting such partial redemption; and (5) payment of the principal of and interest on the Bonds maybe made by wire transfer or other method acceptable to the Clearing Agency. If either (i) the City receives notice from the Clearing Agency which is currently the registered owner of the Bonds to the effect that such Clearing Agency is unable or unwilling to dischazge its responsibility as a Clearing Agency for the Bonds or (ii) the City elects to discontinue its use of such Clearing Agency as a Clearing Agency for the Bonds, then the City and the Registrar and Paying Agent each shall do or perform or cause to be done or performed all acts or things, not adverse to the rights of the holders of the Bonds, as aze necessary or appropriate to discontinue use of such Clearing Agency as a Clearing Agency for the Bonds and to transfer the ownership of each of the Bonds to such person or persons, including any other Clearing Agency, as the holder of the Bonds may direct in accordance with this Ordinance. Any expenses of such discontinuance and transfer, including expenses of printing new certificates to evidence the Bonds, shall be paid by the City. During any time that the Bonds aze held in book-entry form on the books of a Clearing Agency, the Registrar and Paying Agent shall be entitled to request and rely upon a certificate or other written representation from the Clearing Agency or any participant or indirect participant with respect to the identity of any beneficial owners of the Bonds as of a record date selected by the Registraz and Paying Agent. For purposes of determining whether the consent, advice, direction or demand of a Registered Owner of the Bonds has been obtained, the Registrar and Paying Agent shall be entitled to treat the beneficial owners of the Bonds as the holders of the Bonds. -5- BDDB01 5863495v1 During any time that the Bonds aze held in book-entry form on the books of a Clearing Agency, the Controller or the Mayor is each authorized to enter into a Blanket Letter of Representations agreement with the Clearing Agency, and the provisions of any such Letter of Representations or any successor agreement shall control on the matters set forth herein. Principal of and any redemption premium on the Bonds shall be payable at the principal corporate trust office of the Paying Agent. Interest on the Bonds shall be paid by check or draft mailed or delivered by the Paying Agent to the registered owner thereof at the address as it appeazs on the registration books kept by the Registraz as of the fifteenth (15th) day of the month immediately preceding the Interest Payment Date or at such other address as may be provided to the Paying Agent in writing by such registered owner. So long as the Clearing Agency or its nominee is the registered owner of the Bonds, interest on, together with the principal of and any redemption premium on, the Bonds will be paid directly to the Clearing Agency by wire transfer in same day funds by the Registraz and Paying Agent. Notwithstanding the foregoing, principal of and interest on the Bonds, if registered in the name of the Authority or the Bond Bank, shall be paid by wire transfer to a financial institution if and as directed by the Authority or Bond Bank, as the case may be, on the due date of such payment or, if such date is a day when financial institutions are not open for business, on the business day immediately preceding such due date. So long as the Authority or the Bond Bank is the registered owner of the Bonds, the Bonds shall be presented for payment as directed by the Authority or the Bond Bank, as applicable. All payments on the Bonds shall be made in any coin or currency of the United States of America which, on the dates of such payments, shall be legal tender for the payment of public or private debt. Each Bond shall be transferable or exchangeable only on the books of the City maintained for such purpose at the principal corporate trust office of the Registraz, by the registered owner thereof in person, or by his or her attorney duly authorized in writing, upon surrender of such Bond together with a written instrument of transfer or exchange satisfactory to the Registraz duly executed by the registered owner or his or her attorney duly authorized in writing, and thereupon a new fully registered Bond or Bonds in the same aggregate principal amount and of the same maturity shall be executed and delivered in the name of the transferee or transferees or the registered owner, as the case maybe, in exchange therefor. Each Bond maybe transferred or exchanged without cost to the registered owner, except for any tax or other governmental charge which may be required to be paid with respect to such transfer or exchange. The Registrar shall not be obligated to make any transfer or exchange of any Bond (i) during the fifteen (15) days immediately preceding an Interest Payment Date or (ii) after the mailing of notice calling such Bond for redemption. The City, the Registraz and the Paying Agent may treat and consider the person in whose name any Bond is registered as the absolute owner thereof for all purposes including the purpose of receiving payment of, or on account of, the principal thereof, and redemption premium, if any, and interest thereon. -6- BDDBOI 5863495v1 In the event any Bond is mutilated, lost, stolen or destroyed, the City may cause to be executed and the Registrar may authenticate a new Bond of like date, maturity, series and denomination as the mutilated, lost, stolen or destroyed Bond, which new Bond shall be marked in a manner to distinguish it from the Bond for which it was issued; provided, that in the case of any mutilated Bond, such mutilated Bond shall first be surrendered to the Registrar, and in the case of any lost, stolen or destroyed Bond there shall be first furnished to the Registrar evidence of such loss, theft or destruction satisfactory to the City and the Registrar, together with indemnity satisfactory to them. In the event that any such mutilated, lost, stolen or destroyed Bond shall have matured or been called for redemption, instead of causing to be issued a duplicate Bond, the Registrar and Paying Agent may pay the same upon surrender of the mutilated Bond or upon satisfactory indemnity and proof of loss, theft or destruction in the case of a lost, stolen or destroyed Bond. The City and the Registrar and Paying Agent may charge the owner of any such Bond with their reasonable fees and expenses in connection with the above. Every substitute Bond issued by reason of any Bond being lost, stolen or destroyed shall, with respect to such Bond, constitute a substitute contractual obligation of the City pursuant to this Ordinance, whether or not the lost, stolen or destroyed Bond shall be found at any time, and shall be entitled to all the benefits of this Ordinance, equally and proportionately with any and all other Bonds duly issued hereunder. In the event that any Bond is not presented for payment or redemption on the date established therefor, the City may deposit intrust with the Paying Agent an amount sufficient to pay such Bond or the redemption price thereof, as appropriate, and thereafter the owner of such Bond shall look only to the funds so deposited in trust with the Paying Agent for payment and the City shall have no further obligation or liability with respect thereto. Section 2. Subsection (a) of the section of the Bond Ordinance labeled Section IV. Redemption of Bonds is hereby amended to read as follows: (a) Optional Redemption. Each series of the Bonds shall be subject to redemption at the option of the City, in whole or in part, upon thirty (30) days written notice, to the registered owner or owners of Bonds to be redeemed, on any December 1 not earlier than ten (10) years from the original date of each series of the Bonds, at a redemption price and in amounts and maturities and in order of maturities determined by the Mayor and the Clerk upon the advice of the City's financial advisor as set forth in a certificate of the City to be executed and attested by the Mayor and the Clerk, respectively, prior to the sale of each series of the Bonds (the "Issuer's Certificate"). Official notice of such redemption shall be mailed by the Registrar and Paying Agent by certified or registered mail at least thirty (30) days and not more than forty-five (45) days (if the Bonds are sold to the Authority or to the Bond Bank, at least 60 days and not more than 90 days) prior to the scheduled redemption date to each of the registered owners of the Bonds called for redemption (unless waived by -7- BDDBOI 5863495v1 any such registered owner) at the address shown on the registration books of the Registrar and Paying Agent, or at such other address as is furnished in writing by such registered owner to the Registrar; provided, however, that failure to give such notice by mailing, or any defect therein, with respect to any Bond shall not affect the validity of the proceedings for the redemption of any other Bonds. The notice shall specify the redemption price, the date and place of redemption, and the registration numbers (and, in case of partial redemption, the respective principal amounts) of the Bonds called for redemption. The place of redemption may be at the principal corporate trust office of the Registrar and Paying Agent or as otherwise determined by the City. Interest on the Bonds (or portions thereof) so called for redemption shall cease to accrue on the redemption date fixed in such notice, if sufficient funds are available at the place of redemption to pay the redemption price on the redemption date and when such Bonds (or portions thereof) are presented for payment. Any Bond redeemed in part may be exchanged for a Bond or Bonds of the same maturity in authorized denominations equal to the remaining principal amount thereof. In addition to the foregoing notice, the City may also direct that further notice of redemption of each series of the Bonds be given, including without limitation and at the option of the City, notice described in paragraph (i) below given by the Registrar and Paying Agent to the parties described in paragraphs (ii) and (iii) below. No defect in any such further notice and no failure to give all or any portion of any such further notice shall in any manner defeat the effectiveness of any call for redemption of Bonds so long as notice thereof is mailed as prescribed above. (i) If so directed by the City, each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (A) the CUSIP numbers of all Bonds being redeemed; (B) the date of issue of the Bonds as originally issued; (C) the rate of interest borne by each Bond being redeemed; (D) the maturity date of each Bond being redeemed; and (E) any other descriptive information needed to identify accurately the Bonds being redeemed. (ii) If so directed by the City, each further notice of redemption shall be sent at least thirty-five (35) days before the redemption date by registered or certified mail or overnight delivery service to all registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the Bonds (such depositories now being The Depository Trust Company ofNew York, New York) and to one or more national information services that disseminate notices of redemption of obligations such as the Bonds (such as Financial Information, Inc.'s Financial Daily Called Bond Service, Kenny Information Service's Called Bond Service, Moody's Municipal and Government News Reports and Standard & Poor's Called Bond Record). (iii) If so directed by the City, each such further notice shall be published one time in The Bond Buyer of New York, New York or, if the -8- BDDBOI 5863495v1 Registrar believes such publication is impractical or unlikely to reach a substantial number of the holders of the Bonds, in some other financial newspaper or j ournal which regularly carries notices of redemption of other obligations similar to the Bonds, such publication to be made at least sixty (60) days prior to the date fixed for redemption. Upon the payment of the redemption price of the Bonds (or portions thereof) being redeemed and if so directed by the City, each check or other transfer of funds issued for such purpose shall bear the CUSIP number identifying, by issue and maturity, the Bonds (or portions thereof) being redeemed with the proceeds of such check or other transfer. Section 3. Subsection (a) of the section of the Bond Ordinance labeled Section VIII. Issuance, Sale and Delivery of the Bonds is amended to read as follows: (a) Generally. The Controller is hereby authorized and directed to have the Bonds prepared, and the Mayor, the Controller and the Clerk are each hereby authorized and directed to execute, and attest as appropriate, the Bonds in the form and manner herein provided. The Controller is hereby authorized and directed to deliver the Bonds to the purchaser or purchasers thereof after sale made and in accordance with the provisions of the Act and this Ordinance, provided that at the time of said delivery the Controller shall collect the full amount which the purchaser or purchasers have agreed to pay therefor, which shall be not less than ninety-eight percent (98%) of the par amount of the series of the Bonds being sold (or such higher percentage of the par value of such series of the Bonds as the Controller, with the advice of the financial advisor of the City, shall determine) plus accrued interest thereon to the date of delivery, if any. The City may receive payment for the Bonds in installments. The proceeds derived from the sale of the Bonds shall be and are hereby set aside for application to the costs of the Project, and including all authorized costs relating thereto, including the costs of issuance of the Bonds. The authorized officers of the City are hereby authorized and directed to draw all proper and necessary warrants and to do whatever other acts and things that may be necessary or appropriate to carry out the provisions of this Ordinance. Section 4. The section of the Bond Ordinance labeled Section VIII. Issuance, Sale and Delivery of the Bonds shall be amended to include new subsections (d) and (e) as follows: (d) Sale to the Indiana Bond Bank. The Bonds may, in the discretion of the Controller, be sold to the Bond Bank. In the event of such determination, Bonds shall be sold to the Bond Bank at a price not less than 97.5% of the par value of the Bonds or such higher percentage of the par value of the Bonds as may be set forth in the Purchase Agreement (defined herein) and in such denomination or denominations as the Bond Bank may request and pursuant to a purchase agreement (the "Purchase Agreement") between the City and the Bond Bank, hereby authorized to be entered into and executed by the Mayor on behalf of the City, and attested by the Clerk, subsequent to the date of the adoption of this -9- BDDBOI 5863495v1 Ordinance. Such Purchase Agreement may set forth the definitive terms and conditions for such sale, but all of such terms and conditions must be consistent with the terms and conditions of this Ordinance, including without limitation, the interest rate or rates on the Bonds which shall not exceed the maximum rate of interest for the Bonds authorized pursuant to this Ordinance. Bonds sold to the Bond Bank shall be accompanied by all documentation required by the Bond Bank pursuant to the provisions of Indiana Code 5-1.5 and the Purchase Agreement, including, without limitation, an approving opinion of nationally recognized bond counsel, certification and guarantee of signatures and certification as to no litigation pending, as of the date of delivery of the Bonds to the Bond Bank, challenging the validity or issuance of the Bonds. in the event the Controller determines to sell the Bonds to the Bond Bank, the submission of an application to the Bond Bank and the entry by the City into the Purchase Agreement and the execution of the Purchase Agreement on behalf of the City by the Mayor in accordance with this Ordinance are hereby authorized approved and ratified. (e) Sale to the Authority. The Bonds may, in the discretion ofthe Controller, based upon the advice of the Financial Advisor, be sold to the Authority. The Board is hereby authorized to submit an application to the wastewater SRF loan program (the "SRF Program") under Indiana Code 4-4-11 and Indiana Code 13-18- 13. As a part of said program, the Financial Assistance Agreement for the Bonds and the Project shall be executed by the City and the Authority. The substantially final form of Financial Assistance Agreement attached as Appendix B hereto and incorporated herein as if set forth in this place is hereby approved by the Common Council, and the Mayor and the Clerk are hereby authorized to execute the same on behalf of the City, and to approve any changes in form or substance to the Financial Assistance Agreement, such approval to be conclusively evidenced by its execution. The Financial Assistance Agreement may set forth the definitive terms and conditions for such sale including the purchase price and interest rate, but all of such terms and conditions must be consistent with the terms and conditions of this Ordinance, including, without limitation, the interest rates on the Bonds which shall not exceed the maximum rate of interest for the Bonds authorized pursuant to this Ordinance. Bonds sold to the Authority shall be accompanied by all documentation required by the Authority pursuant to Indiana Code 4-4-11 and Indiana Code 13-18- 13, and the Financial Assistance Agreement, including, without limitation, an approving opinion of a nationally recognized bond counsel, certification and guarantee of signatures and certification as to no litigation pending, as of the date of delivery of the Bonds to the Authority, challenging the validity or issuance of the Bonds. In the event the Controller determines to sell the Bonds to the Authority, the entry by the City into the Financial Assistance Agreement and the execution of the Financial Assistance Agreement by the Mayor, and, if required, the entry by the City into a purchase agreement or any other agreement with the Authority and the execution thereof by the Mayor, in accordance with this Ordinance are hereby authorized, approved and ratified. -10- BDDBOI 5863495v1 Notwithstanding anything contained herein, the City may accept any other forms of financial assistance, as and if available, from the SRF Program (including without limitation (1) any forgivable loans, grants or other assistance whether available as an alternative to any Bond related provision otherwise provided for herein or as a supplement or addition thereto and (2) one or more series or combination of series of Bonds). If required by the SRF Program to be eligible for such financial assistance, one or more of the series of the Bonds issued hereunder may be issued on a basis such that the payment of the principal of or interest on (or both) such series of Bonds is junior and subordinate to the payment of the principal of and interest on other series of Bonds issued hereunder (and/or any other revenue bonds secured by a pledge of Net Revenues, whether now outstanding or hereafter issued), all as provided by the terms of such series of Bonds as modified pursuant to this authorization. Such financial assistance, if any, shall be as provided in the Financial Assistance Agreement and the Bonds of each series of Bonds issued hereunder (including any modification made pursuant to the authorization in this paragraph to the form of Bond otherwise contained herein). Section 5. The section of the Bond Ordinance labeled Section IX. Disposition of Proceeds of the Bonds; City of South Bend, Sewage Works Construction Account shall be amended to read as follows: Section IX. Disposition of Proceeds of the Bonds; City of South Bend, Sewage Works Construction Account. The proceeds from the sale of each series of the Bonds shall be deposited and applied as follows: (a) The accrued interest and any premium received at the time of delivery of the Bonds or any unused discount shall be deposited in the Sewage Works Sinking Fund continued by this Ordinance. (b) The remaining proceeds from the sale of the Bonds shall be deposited in a bank or banks which are legally qualified depositories for the funds of the City, in the special account to be designated as "City of South Bend, 200 Sewage Works Construction Account" (with the blank to be filled in with the year in which the particular series of Bonds are being sold) (the "Construction Account"). Amounts in the Construction Account shall be expended only for the purpose of paying the costs of the Proj ect, as described in the Ordinance and in the Act, together with all authorized costs relating thereto, including the costs of issuance of the Bonds, and as otherwise permitted or required by the Act. Any balance or balances remaining unexpended in the Construction Account after completion of the Project, which are not required to meet unpaid obligations incurred in connection with the acquisition and installation of the Project, shall be used solely for one or more of the purposes permitted under the provisions of Indiana Code 5-1-13, as amended, or be applied upon the terms set forth in the Financial Assistance Agreement. Pursuant to the Act, the owners of each series of the Bonds shall be entitled to a lien on the proceeds of the respective series of the Bonds until such proceeds are applied as required by this Ordinance and by Indiana law. -11- BDDBOI 5863495v1 (c) If the Bonds are sold to the Authority, to the extent that (a) the total principal amount of the 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 Department and the Authority), the City shall reduce the principal amount of the Bonds' maturities to effect such reduction in a manner that will still achieve as level an annual debt service as practicable as described in Section III of this Ordinance subject to and upon the terms forth in the Financial Assistance Agreement. Section 6. Subsection (b) of the section of the Bond Ordinance labeled Section XI. Sewage Works Sinking Fund is hereby amended and restated in its entirety and a new subsection (c) shall be added to said Section XI as follows: (b) Debt Service Reserve Account. On the first day of each calendar month, after making the credits to the Bond and Interest Account, there shall be credited from available net revenues to the Debt Service Reserve Account an amount not less than an amount which will produce, in equal monthly installments over a sixty (60) month period, an amount equal to the least of (i) maximum annual debt service on all bonds payable from the net revenues of the Sewage Works, (ii) 125% of the average annual principal and interest payable on all bonds payable from the net revenues of the Sewage Works, or (iii) ten percent (10%) of the proceeds of all bonds payable from the net revenues of the Sewage Works, plus a minor portion thereof as defined in the Internal Revenue Code of 1986, as amended (the "Code") (the "Debt Service Reserve Requirement"). Said credits to the Debt Service Reserve Account shall continue until the balance therein shall equal the Debt Service Reserve Requirement. The Debt Service Reserve Account shall constitute the margin for safety as a protection against default in the payment of principal of and interest on the bonds, and the moneys in the Debt Service Reserve Account shall be used to pay current principal and interest on the bonds to the extent that moneys in the Bond and Interest Account are insufficient for that purpose. In the event moneys in the Debt Service Reserve Account are transferred to the Bond and Interest Account to pay principal and interest on bonds, then such depletion of the balance in the Debt Service Reserve Account shall be made up from the next available net revenues after the credits into the Bond and Interest Account hereinbefore provided for. Any moneys in the Debt Service Reserve Account in excess of the Debt Service Reserve Requirement shall be transferred to the Sewage Works Improvement Fund, and in no event shall such excess moneys be held in the Debt Service Reserve Account. In the event the Bonds are sold to the Authority, notwithstanding the foregoing, the Reserve Requirement shall be the combined maximum annual debt service on the Bonds, any Prior Bonds payable from the Reserve Account, and any parity bonds hereafter issued. In such event, on each December 2 subsequent to the delivery of the Bonds, beginning with the December 2 immediately succeeding completion of the Project, the Controller shall decrease, if necessary, the amount on deposit in the Reserve Account so that the remaining amount on deposit equals the Reserve Requirement, provided that the City shall provide to the Authority fifteen -12- BDDBOI 5863495v1 (15) days prior written notice of any such intended transfer from the Reserve Account. In the event additional bonds payable from the Net Revenues of the Sewage Works are hereafter issued on a parity with the Bonds, the Reserve Requirement shall be proportionately increased to equal maximum annual debt service on the Bonds, any Prior Bonds payable from the Reserve Account, and all bonds hereafter issued on a parity therewith; provided, that, if nationally recognized bond counsel is unable to provide an opinion that interest on such proposed additional parity bonds is excludable from gross income for federal income tax purposes as a result of the determination of the Reserve Requirement in the manner provided in this paragraph, then the City may, in order to allow such opinion to be issued, establish a separate reasonably required reserve fund that secures only the proposed parity bonds and shall expressly provide in the authorizing ordinance for such proposed parity bonds that the moneys deposited in the Reserve Account hereby as a margin of safety for the payment of principal of and interest on the Bonds do not secure such proposed parity bonds. The City may at any time and from time to time fund all or any part of the Reserve Account by depositing in the Reserve Account one or more debt service reserve surety bonds or insurance policies (each, a "Reserve Account Credit Instrument"), each of which is issued by an insurance company rated at the time of deposit in the highest rating category by Standard & Poor's Corporation and Moody's Investors Service. As long as any Reserve Account Credit Instrument is in full force and effect, any valuation of the Reserve Account shall treat the maximum amount available under such Reserve Account Credit Instrument as its value. If the Reserve Account Credit Instrument is provided subsequent to the initial cash contribution to the Reserve Fund, and the Bonds are purchased by the Authority, notice of the purchase of the Reserve Account Credit Instrument shall be given to the Authority. Prior to applying any funds held in any debt service reserve accounts securing any obligations payable out of the revenues of the sewage works of the City to the payment of such obligation, the City shall cause all funds held in the Sewage Works Sinking Fund (or any like fund or account from which debt service has been structured to be paid) to be applied in full before any such reserve accounts are so applied. (c) Depository Agreements. The Sinking Fund, containing the Bond and Interest Account and the Reserve Account, and/or the Construction Account may be held by a financial institution acceptable to the Authority, pursuant to terms acceptable to the Authority. If the Sinking Fund and the accounts therein are held in trust, the City shall transfer the monthly required amounts of Net Revenues to the Bond and Interest Account and the Reserve Account, and the financial institution holding such funds in trust shall be instructed to pay the required payments in accordance with the payment schedules for the City's outstanding bonds. The Common Council hereby authorizes the Mayor and Controller to execute and deliver an agreement with a financial institution to reflect this trust arrangement for the Sinking Fund and/or the Construction Account. BDDBOI 5863495v1 -13- Section 7. The section of the Bond Ordinance labeled Section XIII. Books of Record and Accounts shall be amended and restated as follows: Section XIII. Books of Record and Accounts. The City shall keep proper books of record and accounts, separate from all of its other records and accounts, in which completed and correct entries shall be made showing all revenues collected from said works and deposited in said funds, and all disbursements made therefrom on account of the operation of the works, and to meet the requirements of the Sewage Works Sinking Fund, and all other financial transactions relating to said works, including the amounts set aside or credited to the Sinking Fund, the Sewage Works Operation and Maintenance Fund and the Sewage Works Replacement Fund, and the cash balances in each of said funds and accounts described herein as of the close of the preceding fiscal year. There shall be prepared and furnished to the original purchaser or purchasers of the Bonds, and, upon written request, to any owner of the Bonds at the time then outstanding, not more than one hundred twenty (120) days after the close of each fiscal year, complete financial statements of the works, covering the preceding fiscal year, which annual statements shall be certified by the Controller, or by licensed independent public accountants employed for that purpose. Copies of all such statements and reports shall be kept on file in the office of the Controller. Any owner or owners of the Bonds then outstanding shall have the right at all reasonable times to inspect the works and all records, accounts and data of the City relating thereto. Such inspections may be made by representatives duly authorized by written instrument. If the Bonds are sold to the Bond Bank or the Authority, the City shall establish and maintain the books and other financial records of the Project (including the establishment of a separate account or subaccount for the Project) and the Sewage Works in accordance with (i) generally accepted accounting standards for utilities, on an accrual basis, as promulgated by the Government Accounting Standards Board, and (ii) the rules, regulations, and guidance of the State Board of Accounts. Section 8. The section of the Bond Ordinance labeled Section XIV. Rates and Chimes shall be amended to read as follows: Section XIV. Rates and Charges. The City covenants and agrees that it will establish and maintain just and equitable rates or charges for the use of and the services rendered by said works, to be paid by the owner of each and every lot, parcel of real estate or building that is connected with and uses said Sewage Works by or through any part of the sewage works system of the City, or that in any way uses or is served by such sewage works, at a level adequate to produce and maintain sufficient revenue (including user and other charges, fees, income, or revenues available to the City) to provide for the proper Operation and Maintenance (as defined in the Financial Assistance Agreement) of the works, to comply with and satisfy all covenants contained in this Ordinance and the Financial Assistance Agreement, and for the payment of the sums required to be paid into the Sewage Works Sinking Fund by the Act and this Ordinance; and that such rates or charges shall be sufficient in -14- BDDBOI 5863495v1 each year to produce net revenues, as defined in Section XI of this Ordinance, at least equal to 1.25 times the greater of the average annual debt service on the Prior Bonds, the Bonds and all bonds on a parity therewith or the debt service payable during the next succeeding twelve calendaz months on the Prior Bonds, the Bonds and all bonds on a pazity therewith. For these purposes, the interest rate on variable rate debt shall be assumed to be the average interest rate thereon in the preceding calendar yeaz. Such rates or charges shall, if necessary, be changed and readjusted from time to time so that the. revenues therefrom shall always be sufficient to meet the expenses of Operation and Maintenance of the Sewage Works and the requirements of the Sewage Works Sinking Fund. The rates or charges so established shall apply to any and all use of such Sewage Works by and service rendered to the City and all departments thereof and shall be paid no less frequently than semi-annually by the City or the various departments thereof as the chazges accrue. Section 9. The section of the Bond Ordinance labeled Section XVII. Additional Covenants of the City shall be amended and restated as follows: Section XVII. Additional Covenants of the City. For the purpose of further safeguarding the interests of the owners of the Bonds herein authorized, it is specifically provided as follows: (a) All contracts let by the City in connection with the construction of said additions and improvements to the Sewage Works 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 one hundred percent (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 as are required under the laws of the State of Indiana in the case of public contracts, and shall be governed in all respects by the laws of the State of Indiana relating to public contracts. (b) Said additions and improvements shall be constructed under the supervision and subj ect to the approval of the Consulting Engineers or such other competent engineer as shall be designated by the Boazd. All estimates for work done or material furnished shall first be checked by the Consulting Engineers and approved by the Boazd. (c) The City shall at all times maintain its Sewage Works in good condition and operate the same in an efficient manner and at a reasonable cost. (d) So long as any ofthe Bonds herein authorized are outstanding, the City shall maintain insurance coverage (which must be acceptable to the Authority if the Authority owns the Bonds), including fidelity bonds, to protect the -15- BDDBOI 5863495v1 sewage works and its operations on the insurable parts of said Sewage Works of a kind and in an amount such as would normally be carried by private companies engaged in a similar type of business. All insurance shall be placed with responsible insurance companies qualified to do business under the laws of the State of Indiana, provided, however, such insurance requirement may be satisfied, in part or in whole, through the City's self insurance program. In the Bonds are sold to the Authority for participation in the wastewater SRF loan program under Indiana Code 13-18-13, use of the City's self-insurance program to satisfy any of the insurance requirements set forth herein shall be subj ect to the approval of the Authority. Insurance proceeds and condemnation awards shall be used to replace or repair the property, or, if not used for that purpose, shall be treated and applied as net revenues of the sewage works (provided such is consented to by the Authority if the Authority owns the Bonds). (e) So long as any of the Bonds are outstanding, the City shall not mortgage, pledge or otherwise encumber such sewage works, or any part thereof, nor shall it sell, lease or otherwise dispose of any portion thereof except replace equipment which may become worn out or obsolete, without the prior written consent of the Authority if the Bonds are sold to the Authority. (f) If the Bonds are sold to the Authority, the City shall not borrow any money, enter into any contract or agreement or incur any other liabilities in connection with the Sewage Works, other than for normal operating expenditures, without the prior written consent of the Authority if such undertaking would involve, commit, or use the revenues of the Sewage Works. (g) Except as hereinbefore provided in Section XVI hereof, so long as any of the bonds herein authorized are outstanding, no additional bonds or other obligations pledging any portion of the revenues of said Sewage Works shall be authorized, executed or issued by the City except such as shall be made subordinate and junior in all respects to the bonds herein authorized, unless all of the bonds herein authorized are redeemed, retired or defeased pursuant to Section XV hereof coincidentally with the delivery of such additional bonds or other obligations. (h) The City shall take all action or proceedings necessary and proper to require connection of all property where liquid and solid waste, sewage, night soil, or industrial waste is produced with available sanitary sewers. The City shall, insofar as possible, cause all such sanitary sewers to be connected with said Sewage Works. (i) The provisions of this Ordinance shall constitute a contract by and between the City and the owners of the sewage works revenue bonds herein authorized, and after the issuance of said bonds, this Ordinance shall not be repealed or amended in any respect which will adversely affect the rights of the owners of said bonds, nor shall the Common Council adopt any law, ordinance or resolution which in any way adversely affects the rights of such owners so long as any of said bonds or the interest thereon remains unpaid. -16- BDDBOI 5863495v1 (j) The provisions of this Ordinance shall be construed to create a trust in the proceeds of the sale of the bonds herein authorized for the uses and purposes herein set forth, and the owners of the bonds shall retain a lien on such respective proceeds until the same are applied in accordance with the provisions of this Ordinance and of the Act. The provisions of this Ordinance shall also be construed to create a trust in the portion of the net revenues herein directed to be set apart and paid into the Sewage Works Sinking Fund for the uses and purposes of said fund as in this Ordinance set forth. The owner of said bonds shall have all of the rights, remedies and privileges set forth in the provisions of the Act, including the right to have a receiver appointed to administer said Sewage Works in the event of default in the payment or the principal of or interest on any of the bonds herein authorized or in the event of default in respect to any of the provisions of this Ordinance or the Act. The Common Council reserves the right, however, to amend this Ordinance from time to time to preserve the Tax Exemption described in Section XIX hereof without the approval of any owner of the bonds so long as the Common Council certifies that such amendment does not violate subsection (i) of Section XVII; provided, however, that if the Bonds are sold to the Authority, the City shall obtain the prior written consent of the Authority. Section 10. The following shall be added as the last sentence to the section of the Bond Ordinance labeled Section XXI. Supplemental Ordinances: Notwithstanding anything in this Section XXI of this Ordinance, as to any series of Bonds sold to the Authority pursuant to Section VIII of this Ordinance, no supplemental ordinance shall be adopted unless consented to in writing by the Authority. Section 11. The Bond Ordinance is amended to add the form of Financial Assistance Agreement as Appendix B to the Bond Ordinance which is attached hereto as Exhibit A. Section 12. All remaining terms and provisions of the Bond Ordinance remain in full force and effect. ***** -17- BDDBOI 5863495v1 Passed and adopted by the Common Council of the City of South Bend, Indiana, on the ~ day of d ~-~~.~,/ , 2009. ATTEST: City Cl rk COMMON COUNCIL OF THE CITY F SOUTH BEN ,INDIANA Member of the Common Council Presented by me to the Mayor of the City of South Bend, Indiana, on the?.~~ day of Q L~~ , 2009, at '~ 3~ o'clock D , .m. City Cl r ~ Q~,^~ -fZ Approved and signed by me on the day of , 2009, at 2, S~ o'clock m. ~~ Mayor, City of uth Bend, Indiana PU3LIC HEARING ~ c7 -Z-b ~ ~ aS f ~'`" J `~'~ rd READING ~O-LSo --°~ ~~ $ u1~J S~t. ~~ OT APPROVED REFERRED ~ PASS.E,A ~(~-2•~O-`~ ~ cL s S w~ s ~~ BDDBOI 5863495v1 -18- ~ile~ !n Clerk'S Ofifice OC i ~ ~ 20u9 JQljtl vS0 RBEND, Itd. CITY CLERK, TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 82-09 A BILL OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AMENDING ORDINANCE NO. 9672-06 ENTITLED "AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE ACQUISITION, CONSTRUCTION AND INSTALLATION OF CERTAIN IMPROVEMENTS AND EXTENSIONS TO THE CITY'S SEWAGE WORKS, THE ISSUANCE AND SALE OF ADDITIONAL REVENUE BONDS TO PROVIDE FUNDS FOR THE PAYMENT OF THE COSTS THEREOF, THE ISSUANCE AND SALE OF BOND ANTICIPATION NOTES IN ANTICIPATION OF THE ISSUANCE AND SALE OF SUCH BONDS AND THE COLLECTION, SEGREGATION AND DISTRIBUTION OF THE REVENUES OF SUCH SEWAGE WORKS AND OTHER RELATED MATTERS" Respectfully report that they have examined the matter and that in their opinion, this bill is being recommended to the full Council with a favorable recommendation as substituted (see cover letter). Ann Puzzello Chairperson, Committee of the Whole