HomeMy WebLinkAbout10134-11 Waterworks Revenue Bonds $8,300,000 ORDINANCE No . 10134-11
Passed by the Common Council of the City of South Bend,Indiana
November 28, 2011
Attest: `— City Clerk
JOHN VOOR E
Attest: President of Common Council
Presented by me to the Mayor of the City of South Bend, Indiana
November 29, 11
20
- City Clerk
JO VO DE
Approved and signed by me N o v em b e r 3 0, 20 11
ORDINANCE NO. I,� � 3���'`
An Ordinance of the Common Council of the City of 5outh Bend, Indiana,
Concerning the Construction of Improvements to the Municipal Waterworks of the
City of South Bend, Indiana; Authorizing the Issuance of Revenue Bonds for such
Purpose in the Principal Amount not to exceed Eight Million Three Hundred
Thousand ($8,300,000); Addressing Other Matters Connected Therewith, Including
the Issuance of Notes in Anticipation of Bonds; and Repealing Ordinances
Inconsistent Herewith
STATEMENT OF PURPOSE AND INTENT
The City of South Bend, Indiana (the "City") has heretofore established, constructed and
financed a municipal waterworks and now owns and operates said works pursuant to I.C. 8-1.5,
as amended, and other applicable laws (together,the"Act").
The City's Municipal Waterworks Utility is subject to the authority and regulation of the
Indiana Utility Regulatory Commission ("IURC") and has not withdrawn from the IURC's
authority and regulation. The City will receive IURC approval prior to issuance of the 2012
Bonds (as hereinafter defined).
The Common Council of the City (the "Council") now finds that certain improvements to
said works are necessary; and that plans, specifications and estimates have been prepared and
filed by the engineers employed by the City for the acquisition and construction of said
improvements (as described more fully on Exhibit A) (the "Project"), which plans and
specifications or other pertinent information have been or in a timely fashion will be submitted to
all government authorities having jurisdiction, particularly the Indiana Department of
Environmental Management ("IDEM"), if and to the extent IDEM approval is required under
Indiana law, and have been or will be approved by the aforesaid government authorities and are
hereby incorporated herein by reference and open for inspection at the office of the clerk of the
City as required by law.
The City has obtained engineer's estimates of the costs for the construction of the Project,
and on the basis of said estimates, the estimated cost of the Project, including incidental
expenses,will not exceed the amount of$8,300,000.
The City's Department of Waterworks has prepared preliminary descriptions,
specifications and estimates of the costs of the Project and, on or about November 21, 2011, the
City's Board of Public Works (the "Board") adopted resolutions whereby they: (i) determined
that the Project and the issuance of bonds to provide financing of the Project, together with
expenses incidental thereto, are necessary and will be of general benefit to the City and its
citizens; (ii) approved the Project and the issuance of the City of South Bend, Indiana
Waterworks Revenue Bonds of 2012, in an aggregate principal amount not to exceed
$8,300,000, subject to approval and praper action by this Common Council, (iii) recommended
to the Council that such bonds be issued, and that the proceeds of such bonds (together with any
investment earnings thereon) be applied to the payment of the costs of the Project, together with
expenses incidental thereto, including expenses in connection with the issuance of such bonds;
and (iv) approved the substantially final form of this ordinance and recommended to the Council
the adoption of this ordinance, which sets forth the terms and conditions of the bonds to be
issued hereunder.
The Council finds that there are not available sufficient funds of the works to construct
the Project, and that revenue bonds shall be issued to pay for costs of the Project, including
incidental expenses.
The Council finds that there are now outstanding bonds issued on account of the works
and payable out of the revenues therefrom designated as the "Waterworks Revenue Bonds of
2009, Series B" dated November 19, 2009 (the "2009B Bonds") originally issued in the amount
of$5,380,000 authorized by Ordinance No. 9937-09 adopted by the Council on June 8, 2009 (the
"2009 Ordinance"), now outstanding in the amount of$5,380,000.
The Council finds that there are now outstanding bonds issued on account of the works
and payable out of the revenues therefrom designated as the "Waterworks Revenue Bonds of
2009, Series A" dated September l, 2009 (the "2009A Bonds") originally issued in the amount
of$429,000 authorized by the 2009 Ordinance, now outstanding in the amount of$429,000.
The Council finds that there are now outstanding bonds issued on account of the works
and payable out of the revenues therefrom designated as the "Waterworks Revenue Bonds of
2006" dated June 1, 2006 (the "2006 Bonds") originally issued in the amount of $4,710,000
authorized by Ordinance No. 9603-OS adopted by the Council on July 25, 2005 (the "2005
Ordinance"), now outstanding in the amount of$4,065,000.
The Council also finds that there are now outstanding bonds issued on account of the
works and payable out of the revenues therefrom designated as the "Waterworks Revenue Bonds
of 2002" dated June 1, 2002 (the "2002 Bonds") originally issued in the amount of$5,580,000
authorized by Ordinance No. 9247-01 adopted by the Council on August 27, 2001 (the "2002
Ordinance"),now outstanding in the amount of$4,210,000.
The Council finds that there are now outstanding bonds issued on account of the works
and payable out of the revenues therefrom designated as the "Waterworks Revenue Bonds of
2000" dated June 12, 2000 (the "2000 Bonds") originally issued in the amount of $2,600,000
authorized by Ordinance No. 9095-00 adopted by the Council on February 28, 2000 (the "2000
Ordinance"), now outstanding in the amount of$1,466,320.
The Council finds that 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 1997" dated December 1, 1997 (the "1997 Bonds") (the 2009B Bonds, the 2009A Bonds,
2006 Bonds, the 2002 Bonds, the 2000 Bonds and the 1997 Bonds together, the "Prior Bonds"),
originally issued in the amount of$22,500,000 authorized by Ordinance No. 8801-97 adopted by
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the Council on June 23, 1997 (the "1997 Ordinance"), now outstanding in the amount of
$2,140,000.
The Council finds that on or about May 28, 2002, the Council adopted Ordinance No.
9328-02 (the "2002 Supplemental Ordinance"), which supplemented and amended the 2002
Ordinance, the 2000 Ordinance and the 1997 Ordinance to permit the City 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. The 2002 Supplemental Ordinance, together with the 2009 Ordinance, the 2005
Ordinance, the 2002 Ordinance, the 2000 Ordinance and the 1997 Ordinance are sometimes
collectively referred to herein as the "Prior Ordinances".
The Council now finds that pursuant to the 2002 Supplemental Ordinance, the City
entered into an Insurance Agreement with Financial Security Assurance Inc. ("FSA"), dated
June 27, 2002 (the "FSA Insurance Agreement"), and pursuant to the FSA Insurance Agreement,
FSA issued its Municipal Bond Debt Service Reserve Insurance Policy No. 29146-R, effective
June 27, 2002 (the"2002 Reserve Insurance Policy").
The 2002 Reserve Insurance Policy covers principal and interest payments on the 1997
Bonds, 2000 Bonds and 2002 Bonds, up to the policy limit stated in the 2002 Reserve Insurance
Policy. The initial policy limit of the 2002 Reserve Insurance Policy was set at$2,332,703.
The Council now finds that pursuant to the 2005 Ordinance, the City entered into an
Insurance Agreement with MBIA Insurance Corporation ("MBIA"), dated June 6, 2006 (the
"MBIA Insurance Agreement"), and pursuant to the MBIA Insurance Agreement, MBIA issued
its Debt Service Reserve Surety Bond No. 48026(2), effective June 6, 2006 (the "2006 Reserve
Insurance Policy").
The 2006 Reserve Insurance Policy covers principal and interest payments on the 2006
Bonds, up to the policy limit stated in the 2006 Reserve Insurance Policy. The initial policy limit
of the 2006 Reserve Insurance Policy was set at$365,826.
The Prior Bonds constitute a first chaxge upon the Net Revenues (as hereinafter defined).
The Prior Ordinances provide that the City may authorize and issue additional bonds
payable out of the Net Revenues ranking on parity with the Parity Bonds (as hereinafter defined)
for the purpose of financing the cost of future additions, extensions and improvements to the
works subject to the provisions of the Prior Ordinances. The conditions precedent to the
issuance of additional parity bonds set forth in the Prior Ordinances, as described above, have
been satisfied, subject to approval by the State of Indiana(the"State").
The City desires to authorize the issuance of a bond anticipation note or notes hereunder,
if necessary, payable from the proceeds of the revenue bonds authorized herein (the "BANs"),
and to authorize the refunding of said BANs, if issued.
The Council now finds that all conditions precedent to the adoption of an ordinance
authorizing the issuance of revenue bonds and BANs have been complied with in accordance
with the applicable provisions of the Act.
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NOW THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE
CITY OF SOUTH BEND, INDIANA, AS FbLLO�VS:
SECTION 1. Proiect. The City shall proceed with the Project in accordance with the
cost estimates, and the plans and specifications heretofore prepared and filed by the consulting
engineers employed by the City, which cost estimates, plans and specifications are hereby
approved and are hereby incorporated by reference as if set forth in full at this place, two copies
of which are on file and available for public inspection in the office of the City Clerk pursuant to
I.C. §36-1-5-4. The actions of the Board taken in connection with the Project are hereby
approved, ratified, and confirmed. The Project shall be constructed and the bonds herein
authorized shall be issued pursuant to and in accordance with the Act. The terms "works" and
"utility" and other like terms where used in this Ordinance shall be construed to mean and
include all structures and property of the City's waterworks utility.
SECTION 2. Authorization of Obligations.
(a) The City shall issue its "Waterworks Revenue Bonds of 2012" or such
other designation as the Executive (as defined below) or the Fiscal Officer (as defined below)
shall determine at the time of issuance of any series of bonds (the "2012 Bonds"), in one or more
series (as designated by the City, a"Series"), in an original principal amount not to exceed Eight
Million Three Hundred Thousand Dollars ($8,300,000) (the "Authorized Amount"), as
negotiable, fully registered bonds, for the purpose of procuring funds to be applied to the costs of
the Project, including without limitation reimbursement of preliminary expenses related thereto
and all incidental expenses incurred in connection therewith(all of which are deemed to be a part
of the Project), and the costs of selling and issuing the 2012 Bonds and funding a debt service
reserve as described herein. The City reasonably expects to reimburse expenditures for the
Project with the proceeds of the 2012 Bonds and this constitutes a declaration of official intent
to reimburse expenditures under Treas. Reg. 1.150-2(e) and Indiana Code 5-1-14-6(c). The 2012
Bonds shall rank on parity for all purposes with the Prior Bonds.
The 2012 Bonds shall be issued in denominations of Five Thousand Dollars
($5,000) or any integral multiple thereof, numbered consecutively from 1 upward, and dated the
date of delivery. The 2012 Bonds shall bear interest at a rate or rates not exceeding eight percent
(8%)per annum, and interest shall be payable semiannually on January 1 and July 1 in each year,
with the beginning date of interest payments being finally determined by the Mayor as the
executive of the City (the "Executive") and the Controller as the fiscal officer of the City, or any
acting, assistant or deputy controller of the City (the "Fiscal Officer"), with the advice of the
City's financial advisor, as evidenced by delivery of the executed initial issue of the 2012 Bonds
to the Registrar for authentication. The 2012 Bonds shall be sold pursuant to I.C. 5-1-11, as
amended. Interest on the BANs and the 2012 Bonds shall be calculated according to a 360-day
calendar year containing twelve 30-day months. The 2012 Bonds shall mature on January 1 of
each year beginning in the year and in such amounts as is deemed appropriate by the Executive
and the Fiscal Officer, with the advice of the City's financial advisor, as evidenced by delivery of
the executed initial issue of the 2012 Bonds to the Registrar for authentication, and over a period
ending not later than 20 years after substantial completion of the Project.
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All or a portion of the 2012 Bonds may be aggregated into and issued as one or
more term bonds. The term bonds wi11 b� subject to rriandatory sinking fund redemption with
sinking fund payments and final maturities corresponding to the serial maturities described
above. Sinking fund payments shall be applied to retire a portion of the term bonds as though it
were a redemption of serial bonds and, if more than one term bond of any maturity is
outstanding, redemption of such maturity shall be made by lot. Sinking fund redemption
payments shall be made in a principal amount equal to such serial maturities, plus accrued
interest to the redemption date, but without premium or penalty. For all purposes of this
Ordinance, such mandatory sinking fund redemption payments shall be deemed to be required
payments of principal which mature on the date of such sinking fund payments. Appropriate
changes shall be made in the definitive form of 2012 Bonds, relative to the form of 2012 Bonds
contained in this Ordinance, to reflect any mandatory sinking fund redemption terms.
(b) The City shall issue, if necessary, BANs for the purpose of procuring
interim financing for the Project. Any such issuance shall be in accord with the provisions of
Section 25 of this Ordinance.
SECTION 3. Pled�e of Net Revenues; Payment of Principal and Interest. The 2012
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 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 2012 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 shall be made not more frequently than semiannually on January 2 and July 2 and 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.
All payments of interest on the 2012 Bonds shall be paid by check mailed one business
day prior to the interest payment date to the registered owners thereof as of the fifteenth (15th)
day of the month preceding the interest payment date (the "Record Date") at the addresses as
they appear on the registration and transfer books of the City kept for that purpose by the
Registrar(the "Re�istration Record") or at such other address as is provided to the Paying Agent
in writing by such registered owner. Each registered owner of$1,000,000 or more in principal
amount of 2012 Bonds shall be entitled to receive interest payments by wire transfer by
providing written wire instructions to the Paying Agent before the Record Date for any payment.
All principal payments and premium payments, if any, on the 2012 Bonds shall be made upon
surrender thereof at the principal office of the Paying Agent, in any U.S. coin or currency which
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on the date of such payment shall be legal tender for the payment of public and private debts, or
in the case of a registered owner of$1,000,000 or more in principal amount of 2012 Bonds, by
wire transfer on the due date upon written direction of such owner provided at least fifteen (15)
days prior to the maturity date or redemption date.
Interest on 2012 Bonds shall be payable from the interest payment date to which interest
has been paid next preceding the authentication date thereof unless such 2012 Bonds are
authenticated after the Record Date for an interest payment date and on or before such interest
payment date in which case they shall bear interest from such interest payment date, or unless
authenticated on or before the Record Date for the first interest payment date, in which case they
shall bear interest from the original date, until the principal shall be fully paid.
SECTION 4. Transfer and Exchange of Bonds. Each 2012 Bond shall be transferable
or exchangeable only upon the Registration Record, by the registered owner thereof in writing,
or by the registered owner's attorney duly authorized in writing, upon surrender of such 2012
Bond together with a written instrument of transfer or exchange satisfactory to the Registrar duly
executed by the registered owner or such attorney, and thereupon a new fully registered 2012
Bond or Bonds in the same aggregate principal amount, and of the same maturity, shall be
executed and delivered in the names of the transferee or transferees or the registered owner, as
the case may be, in exchange therefor. The costs of such transfer or exchange shall be borne by
the City except for any tax or governmental charge required to be paid with respect to the
transfer or exchange, which taxes or governmental charges are payable by the person requesting
such transfer or exchange. The City, the Registrar and the Paying Agent may treat and consider
the persons in whose names such 2012 Bonds are registered as the absolute owners thereof for all
purposes including for the purpose of receiving payment of, or on account of, the principal
thereof and interest and premium, if any, due thereon.
In the event any 2012 Bond is mutilated, lost, stolen or destroyed, the City may execute
and the Registrar may authenticate a new bond of like date, maturity and denomination as that
mutilated, lost, stolen or destroyed, 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 Fiscal Officer and the Registrar, together with indemnity
satisfactory to them. In the event any such bond shall have matured, instead of issuing a
duplicate bond, the City and the Registrar may, upon receiving indemnity satisfactory to them,
pay the same without surrender thereof. The City and the Registrar may charge the owner of
such 2012 Bond with their reasonable fees and expenses in this connection. Any 2012 Bond
issued pursuant to this paragraph shall be deemed an original, substitute contractual obligation of
the City, whether or not the lost, stolen or destroyed 2012 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 2012 Bonds issued hereunder.
SECTION 5. Re�istrar and Paving Agent. The Fiscal Officer is hereby authorized to
appoint a qualified financial institution to serve as Registrax and Paying Agent for the 2012
Bonds (together with any successor, the "Registrax" or"Paying Agent"). The Registrar is hereby
charged with the responsibility of authenticating the 2012 Bonds, and shall keep and maintain
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the Registration Record at its office. The Fiscal Officer is hereby authorized to enter into such
agreements or understandings with such institution as will enable the institution to perform the
services required of a Registrar and Paying Agent. The Fiscal Officer is further authorized to
pay such fees and the institution may charge for the services its provides as Registrar and Paying
Agent and such fees may be paid from the Sinking Fund established to pay the principal of and
interest on the 2012 Bonds as fiscal agency charges.
The Registrar and Paying Agent may at any time resign as Registrar and Paying Agent by
giving thirty (30) days written notice to the City and by first-class mail to each registered owner
of the 2012 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.
Such notice to the City may be served personally or sent by first-class or registered mail. The
Registrar and Paying Agent may be removed at any time as Registrar 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 the 2012 Bonds then outstanding by first-class mail of the
removal of the Registrar and Paying Agent. Notices to the registered owners of the 2012 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 Record. Any predecessor Registrar and Paying Agent
shall deliver all the 2012 Bonds, cash or investments related thereto in its possession and the
Registration Record to the successor Registrar and Paying Agent.
As to the BANs, the Fiscal Officer shall serve as Registrar and Paying Agent and is
hereby charged with the duties of Registrar and Paying Agent.
SECTION 6. Terms of Redemption. The 2012 Bonds may be made redeemable at the
option of the City on thirty (30) days' notice, in whole or in part, in any order of maturities
selected by the City and by lot within a maturity, on dates and with premiums and other terms, as
finally determined by the Executive with the advice of the City's financial advisor, as evidenced
by delivery of the executed initial issue of the 2012 Bonds to the Registrar for authentication.
Notice of redemption shall be mailed by first-class mail to the address of each registered
owner of a 2012 Bond to be redeemed as shown on the Registration Record not more than sixty
(60) days and not less than thirty (30) days prior to the date fixed for redemption except to the
extent such redemption notice is waived by owners of 2012 Bonds redeemed,provided, however,
that failure to give such notice by mailing, or any defect therein, with respect to any 2012 Bond
shall not affect the validity of any proceedings for the redemption of any other 2012 Bonds. The
notice shall specify the date and place of redemption, the redemption price and the CUSIP
numbers of the 2012 Bonds called for redemption. The place of redemption may be determined
by the City. Interest on the 2012 Bonds so called for redemption shall cease 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 date so named, and thereafter, such 2012 Bonds shall no longer be
protected by this Ordinance and shall not be deemed to be outstanding hereunder, and the holders
thereof shall have the right only to receive the redemption price.
All 2012 Bonds which have been redeemed shall be canceled and shall not be reissued;
provided, however, that one or more new registered bonds shall be issued for the unredeemed
portion of any 2012 Bond without charge to the holder thereof.
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No later than the date fixed for redemption, funds shall be deposited with the Paying
Agent or another paying agent to pay, arid such agent is hereby authorized and directed to apply
such funds to the payment of, the 2012 Bonds or portions thereof called for redemption,
including accrued interest thereon to the redemption date. No payment shall be made upon any
2012 Bond or portion thereof called for redemption until such 2012 Bond shall have been
delivered for payment or cancellation or the Registrar shall have received the items required by
this Ordinance with respect to any mutilated, lost, stolen or destroyed bond.
The BANs are prepayable by the City, in whole or in part, at any time upon seven (7)
days' notice to the owner of the BANs, without any premium.
SECTION 7. Execution and Negotiability. The 2012 Bonds shall be signed in the
name of the City by the manual or facsimile signature of the Executive and attested by the
manual or facsimile signature of the City Clerk, who also shall affix the seal of the City manually
or shall have the seal imprinted or impressed thereon by facsimile or other means. In case any
officer whose signature or facsimile signature appears thereon shall cease to be such officer
before the delivery of the 2012 Bonds, such signature shall nevertheless be valid and sufficient
for all purposes as if such officer had remained in office until such delivery.
The 2012 Bonds shall also be authenticated by the manual signature of the Registrar, and
no 2012 Bond shall be valid or become obligatory for any purpose until the certificate of
authentication thereon has been so executed.
The 2012 Bonds shall have all of the qualities and incidents of negotiable instruments
under the laws of the State of Indiana, subject to the provisions for registration herein.
SECTION 8. Authorization for Book-Entrv System. The 2012 Bonds may, in
compliance with all applicable laws, initially 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"), without physical distribution of bonds to the purchasers. The following provisions of
this Section apply in such event.
One definitive 2012 Bond of each maturity shall be delivered to the Clearing Agency (or
its agent) and held in its custody. The City and Registrar may, in connection herewith, do or
perform or cause to be done or performed any acts or things not adverse to the rights of the
holders of the 2012 Bonds as are necessary or appropriate to accomplish or recognize such
book-entry form 2012 Bonds.
During any time that the 2012 Bonds are held in book-entry form on the books of a
Clearing Agency, (1) any such 2012 Bond may be registered upon Registration Record in the
name of such Clearing Agency, or any nominee thereof, including Cede & Co.; (2) the Clearing
Agency in whose name such 2012 Bond is so registered shall be, and the City and the Registrar
and Paying Agent may deem and treat such Clearing Agency as, the absolute owner and holder
of such 2012 Bond for all purposes of this Ordinance, including, without limitation, the receiving
of payment of the principal of and interest and premium, if any, on such 2012 Bond, the
receiving of notice and the giving of consent; (3) neither the City nor the Registrar or Paying
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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 2012 Bond, including, without limitation, any responsibility
or obligation hereunder to maintain accurate records of any interest in any 2012 Bond or any
responsibility or obligation hereunder with respect to the receiving of payment of principal of or
interest or premium, if any, on any 2012 Bond, the receiving of notice or the giving of consent;
and (4) the Clearing Agency is not required to present any 2012 Bond called for partial
redemption, if any, 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.
If either the City receives notice from the Clearing Agency which is currently the
registered owner of the 2012 Bonds to the effect that such Clearing Agency is unable or
unwilling to discharge its responsibility as a Clearing Agency for the 2012 Bonds, or the City
elects to discontinue its use of such Clearing Agency as a Clearing Agency for the 2012 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 2012 Bonds, as are
necessary or appropriate to discontinue use of such Clearing Agency as a Clearing Agency for
the 2012 Bonds and to transfer the ownership of each of the 2012 Bonds to such person or
persons, including any other Clearing Agency, as the holder of the 2012 Bonds may direct in
accordance with this Ordinance. Any expenses of such discontinuance and transfer, including
expenses of printing new certificates to evidence the 2012 Bonds, shall be paid by the City.
During any time that the 2012 Bonds are held in book-entry form on the books of a
Clearing Agency, the Registrar shall be entitled to request and rely upon a certificate or other
written representation from the Cleaxing Agency or any participant or indirect participant with
respect to the identity of any beneficial owner of the 2012 Bonds as of a record date selected by
the Registrar. For purposes of determining whether the consent, advice, direction or demand of a
registered owner of a 2012 Bond has been obtained, the Registrar shall be entitled to treat the
beneficial owners of the 2012 Bonds as the bondholders and any consent, request, direction,
approval, objection or other instrument of such beneficial owner may be obtained in the fashion
described in this Ordinance.
During any time that the 2012 Bonds are held in book-entry form on the books of a
Clearing Agency, the Executive, the Fiscal Officer and/or the Registrar are authorized to execute
and deliver a Letter of Representations agreement with the Clearing Agency, or a Blanket Issuer
Letter of Representations, and the provisions of any such Letter of Representations or any
successor agreement shall control on the matters set forth therein. The Registrar, by accepting
the duties of Registrax under this Ordinance, agrees that it will (i) undertake the duties of agent
required thereby and that those duties to be undertaken by either the agent or the issuer shall be
the responsibility of the Registrar, and (ii) comply with all requirements of the Clearing Agency,
including without limitation same day funds settlement payment procedures. Further, during any
time that the 2012 Bonds are held in book-entry form, the provisions of Section 8 of this
Ordinance shall control over conflicting provisions in any other section of this Ordinance.
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SECTION 9. Form of 2012 Bonds. The form and tenor of the 2012 Bonds shall be
substantially as follows, all blanks to be filled in properly and all necessary additions and
deletions to be made prior to delivery:
R-
UNITED STATES OF AMERICA
STATE OF INDIANA COUNTY OF ST. JOSEPH
CITY OF SOUTH BEND, INDIANA
WATERWORKS REVENUE BOND OF 20[ ]
Interest Maturity Original Authentication
Rate Date Date Date CUSIP No.
, 20_ , 2012 , 2012
IZEGISTERED OWNER:
PRINCIPAL SUM: Dollars ($�
The City of South Bend, in St. Joseph, County, State of Indiana (the "City"), for
value received, hereby promises to pay to the Registered Owner set forth above, solely
out of the special revenue fund hereinafter referred to, the Principal Sum set forth above
on the Maturity Date set forth above (unless this bond be subject to and be called for
redemption prior to maturity as hereafter provided), and to pay interest thereon until the
Principal Sum shall be fully paid at the Interest Rate per annum specified above from the
interest payment date to which interest has been paid next preceding the Authentication
Date of this bond unless this bond is authenticated after the fifteenth day of the month
preceding the interest payment date (the "Record Date") and on or before such interest
payment date in which case it shall bear interest from such interest payment date, or
unless this bond is authenticated on or before , 20_, in which case it
shall bear interest from the Original Date, which interest is payable semiannually on
January 1 and July 1 of each year, beginning on 1, 20_. Interest shall be
calculated on the basis of a 360-day year comprised of twelve 30-day months.
[The principal of and premium, if any, on this bond are payable at the principal
office of (the "Registrar" or "Paying Agent"), in
, Indiana.] All payments of interest on this bond shall be paid by check
mailed one business day prior to the interest payment date to the Registered Owner as of
the Record Date at the address as it appears on the registration books kept by the
Registrar or at such other address as is provided to the Paying Agent in writing by the
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Registered Owner. Each Registered Owner of$1,000,000 or more in principal amount of
bonds shall be entitled to receive interest payments by wire transfer by providing written
wire instructions to the Paying Agent before the Record Date for any payment. All
payments of principal of, and premium, if any, on this bond shall be made upon surrender
thereof at the principal office of the Paying Agent, in any U.S. coin or currency which ori
the date of such payment shall be legal tender for the payment of public and private
debts, or in the case of a Registered Owner of$1,000,000 or more in principal amount of
the Bonds (as hereinafter defined), by wire transfer on the due date upon written direction
of such owner provided at least fifteen (15) days prior to the maturity date or redemption
date.
THE CITY SHALL NOT BE OBLIGATED TO PAY THIS BOND OR THE
1NTEREST HEREON EXCEPT FROM THE HEREINAFTER DESCRIBED SPECIAL
FUND, AND NEITHER THIS BOND NOR THE ISSUE OF WHICH IT IS A PART
SHALL IN ANY RESPECT CONSTITUTE A CORPORATE 1NDEBTEDNESS OF
THE CITY WITHIN THE PROVISIONS AND LIMITATIONS OF THE
CONSTITUTION OF THE STATE OF INDIANA.
It is hereby certified and recited that all acts, conditions and things required to be
done precedent to and in the execution, issuance and delivery of this bond have been
done and performed in regular and due form as provided by law.
This bond shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been executed by an authorized
representative of the Registrax.
This bond is one of an authorized issue of bonds of the City of South Bend,
Indiana, of like date, tenor and effect, except as to denomination, numbering, rates of
interest, redemption terms and dates of maturity, aggregating
Dollars ($ ), numbered
consecutively from 1 upward (the "Bonds"), issued for the purpose of providing funds to
be applied on the cost of improvements to the City's waterworks (the "Project"), to
refund interim notes issued in anticipation of the Bonds, if any, to fund a debt service
reserve, and to pay incidental expenses and costs of issuance of the Bonds. This bond is
issued pursuant to an ordinance adopted by the Common Council of said City on the_
day of , 2012, entitled "An Ordinance of the Common Council of the City of
South Bend, Indiana, Concerning the Construction of Improvements to the Municipal
Waterworks of the City of South Bend, Indiana; Authorizing the Issuance of Revenue
Bonds for such Purpose in the Principal Amount not to exceed Eight Million Three
Hundred Thousand ($8,300,000); Addressing Other Matters Connected Therewith,
Including the Issuance of Notes in Anticipation of Bonds; and Repealing Ordinances
Inconsistent Herewith" (the "Ordinance"), and in accordance with the provisions of
Indiana law, including without limitation Indiana Code 8-1.5, and other applicable laws,
as amended (the "Act"), all as more particularly described in the Ordinance. The owner
of this bond, by the acceptance hereof, agrees to all the terms and provisions contained in
the Ordinance and the Act.
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Pursuant to the provisions of the A�t and the Ordinance, the principal of and
interest on this bond and all other bonds of said issue, the Prior Bonds (as hereinafter
defined), and any bonds hereafter issued on a parity therewith are payable solely from the
Sinking Fund (the "Sinking Fund") maintained under the Ordinance to be provided from
the Net Revenues (defined as the gross revenues of the works 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 City irrevocably pledges the entire Net Revenues of the works to the prompt
payment of the principal of and interest on the Bonds and any bonds ranking on a parity
therewith, including the "Waterworks Revenue Bonds of 2009, Series B dated November
19, 2009 (the "2009B Bonds"), "Waterworks Revenue Bonds of 2009, Series A" dated
September 1, 2009 (the "2009A Bonds"), "Waterworks Revenue Bonds of 2006" dated
June 1, 2006 (the "2006 Bonds"), "Waterworks Revenue Bonds of 2002" dated June 1,
2002 (the "2002 Bonds"),"Waterworks Revenue Bonds of 2000" dated June 12, 2000
(the "2000 Bonds") and the "Waterworks Revenue Bonds of 1997" dated December 1,
1997 (the "1997 Bonds"), (the 2009B Bonds, the 2009A Bonds, the 2006 Bonds, the
2002 Bonds, the 2000 Bonds and the 1997 Bonds together, the "Prior Bonds"), each
authorized by ordinance of the City, to the extent necessary for such purposes, and
covenants that it will establish proper rates and charges for services rendered by the
utility as are sufficient in each yeax for the payment of the proper and reasonable
expenses of operation, repair and maintenance of the works and for the payment of the
sums required to be paid into the Sinking Fund under the provisions of the Act and the
Ordinance. If the City or the proper officers thereof shall fail or refuse to so fix and
collect such rates or charges, or if there be a default in the payment of the interest on or
principal of this bond, the owner of this bond shall have all of the rights and remedies
provided for in the Act.
The City covenants that for so long as the Bonds and any bonds issued on a parity
therewith, including the Prior Bonds, remain outstanding it will set aside and pay into the
Sinking Fund a sufficient amount of the Net Revenues for the payment of (a) the
principal of and interest on all bonds which by their terms are payable from the Net
Revenues, as such principal and interest shall fall due, (b) the necessary fiscal agency
charges for paying bonds and (c) an additional amount to maintain the reserve required
by the Ordinance. Such required payments shall constitute a first charge upon all the Net
Revenues. Reference is made to the Ordinance for a more complete statement of the
' revenues from which and conditions under which this bond is payable, a statement of the
conditions on which obligations may hereafter be issued on parity with this bond, the
manner in which the Ordinance may be amended and the general covenants and
provisions pursuant to which this bond has been issued.
The bonds of this issue maturing on and after January 1, 20_ are redeemable at
the option of the City on January 1, 20_, or any date thereafter, on thirty (30) days'
notice, in whole or in part, in any order of maturities selected by the City and by lot
within a maturity, at 100% of face value, together with the following premiums:
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_%if redeemed on January 1, 20_or thereafter
before January 1, 20_;
_%if redeemed on January 1, 20_or thereafter
before January 1, 20_; and
0% if redeemed on January 1, 20_, or thereafter
prior to maturity;
plus accrued interest to the date fixed for redemption. Each minimum authorized
denomination in principal amount shall be considered a separate bond for purposes of
partial redemption.
Notice of such redemption shall be mailed by first-class mail not more than sixty
(60) days and not less than thirty (30) days prior to the date fixed for redemption to the
address of the registered owner of each bond to be redeemed as shown on the registration
record of the City except to the extent such redemption notice is waived by owners of the
bond or bonds redeemed, 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 any
proceedings for the redemption of any other bonds. The notice shall specify the date and
place of redemption,the redemption price and the CUSIP numbers of the bonds called for
redemption. The place of redemption may be determined by the City. Interest on the
bonds so called for redemption shall cease 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 date so named, and thereafter, such bonds shall no longer be protected by the
Ordinance and shall not be deemed to be outstanding thereunder.
This bond is subject to defeasance prior to payment or redemption as provided in
the Ordinance.
If this bond shall not be presented for payment or redemption on the date fixed
therefor, the City may deposit in trust with the Paying Agent or another paying agent, an
amount sufficient to pay such bond or the redemption price, as the case may be, and
thereafter the Registered Owner shall look only to the funds so deposited in trust for
payment and the City shall have no further obligation or liability in respect thereto.
This bond is transferable or exchangeable only upon the registration record kept
for that purpose at the office of the Registrar by the Registered Owner in person, or by his
attorney duly authorized in writing, upon surrender of this bond together with a written
instrument of transfer or exchange satisfactory to the Registrar duly executed by the
Registered Owner or such attorney, 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
may be, in exchange therefor. This bond may be transferred or exchanged without cost to
the Registered Owner except for any tax or governmental charge required to be paid with
respect to the transfer or exchange. The City, the Registrar, the Paying Agent and any
other registrar or paying agent for this bond may treat and consider the person in whose
name this bond is registered as the absolute owner hereof for all purposes including for
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the purpose of receiving payment of, or on account of, the principal hereof and interest
and premium, if any, due hereon.
The bonds maturing on any maturity date are issuable only in the denomination of
$5,000 or any integral multiple thereof.
A Continuing Disclosure Contract from the City to each registered owner or
holder of any bond, dated as of the date of initial issuance of the Bonds (the "Contract"),
has been executed by the City, a copy of which is available from the City and the terms
of which are incorporated herein by this reference. The Contract contains certain
promises of the City to each registered owner or holder of any Bond, including a promise
to provide certain continuing disclosure. By its payment for and acceptance of this bond,
the registered owner or holder of this bond assents to the Contract and to the exchange of
such payment and acceptance for such promises.
IN WITNESS WHEREOF,the City of South Bend, in St. Joseph County, Indiana,
has caused this bond to be executed in its corporate name by the manual or facsimile
signature of the Mayor, and its corporate seal to be hereunto affixed, imprinted or
impressed by any means and attested manually or by facsimile by its Clerk.
CITY OF SOUTH BEND, INDIANA
By:
Mayor
(SEAL)
ATTEST
Clerk
REGISTRAR'S CERTIFICATE OF AUTHENTICATION
It is hereby certified that this bond is one of the bonds described in the
within-mentioned Ordinance duly authenticated by the Registrar.
,
as Registrar
By
Authorized Representative
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The following abbreviations, when used in the inscription of the face of this bond;
shall be construed as through they were written out in full according to applicable laws or
regulations:
TEN. COM. as tenants in common
TEN. ENT. as tenants by the entireties
JT. TEN. as joint tenants with right of survivorship and not as
tenants in common
i1NIF. TRAN.
MIN. ACT Custodian
(Cust.) (Minor)
under Uniform Transfer to Minors Act of
(State)
Additional abbreviations may also be used although not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto (Please Print or Typewrite Name and Address and Social
Security or Other ldentifying Number) $ principal amount (must be a multiple
of $1,000) of the within bond and all rights thereunder, and hereby irrevocably
constitutes and appoints , attorney to transfer the within bond
on the books kept for the registration thereof with full power of substitution in the
premises.
Dated:
NOTICE: The Signature to this assignment
must correspond with the name as it appeaxs
on the face of the within bond in every
particular, without alteration or enlargement
or any change whatsoever.
Signature Guaranteed:
NOTICE: Signature(s)must be guaranteed
by an eligible guarantor institution participating
in a Securities Transfer Association recognized
signature guarantee program.
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SECTION 10. Sale of Bonds.
(a)(i) The Fiscal Officer shall cause to be published either (i) a notice of sale
once each week for two consecutive weeks in accordance with I.C.§5-3-1-2, in which case the
date fixed for the sale shall not be earlier than fifteen(15) days after the first of such publications
and not earlier than three (3) days after the second of such publications, or (ii) a notice of intent
to sell bonds once each week for two weeks in accordance with I.C. §5-1-11-2 and I.C. §5-3-1-4
and in a newspaper of general circulation published in the State capital, in which case bids may
not be received more than ninety (90) days after the first of such publications. Said sale notice
shall state the time and place of sale, the purpose for which the 2012 Bonds are being issued, the
total amount thereof, the amount and date of each maturity,the maximum rate or rates of interest
thereon, their denominations, the time and place of payment, the terms and conditions upon
which bids will be received and the sale made and such other information as is required by law
or as the Fiscal Officer shall deem necessary. The Fiscal Officer is designated as the officer
responsible for the sale of the 2012 Bonds, and shall provide or cause to be provided all notices
required by law.
All bids for the 2012 Bonds shall be sealed and shall be presented to the Fiscal Officer in
accord with the terms set forth in the sale notice. Bidders for the 2012 Bonds shall be required to
name the rate or rates of interest which the 2012 Bonds are to bear, which shall be the same for
all 2012 Bonds maturing on the same date and the interest rate bid on any maturity of 2012
Bonds must be no less than the interest rate bid on any and all prior maturities, not exceeding
eight percent (8%) per annum, and such interest rate or rates shall be in multiples of one
hundredth of one percent. The Fiscal Officer shall award the 2012 Bonds to the bidder who
offers the lowest interest cost, to be determined by computing the total interest on all the 2012
Bonds to their maturities and deducting therefrom the premium bid, if any, or adding thereto the
amount of the discount, if any. No bid for less than ninety-nine percent(99%) of the par value of
the 2012 Bonds, plus accrued interest, sha11 be considered. The Fiscal Officer may require that
all bids be accompanied by certified or cashier's checks payable to the order of the City, or a
surety bond, in an amount not to exceed one percent of the aggregate principal amount of the
2012 Bonds as a guaranty of the performance of said bid, should it be accepted. In the event no
satisfactory bids are received on the day named in the sale notice, the sale may be continued
from day to day thereafter for a period of thirty (30) days without readvertisement; provided,
however, that if said sale is continued, no bid shall be accepted which offers an interest cost
which is equal to or higher than the best bid received at the time fixed for sale in the bond sale
notice. The Fiscal Officer shall have full right to reject any and all bids.
After the 2012 Bonds have been properly sold and executed, the Fiscal Officer shall
receive from the purchasers payment for the 2012 Bonds and shall provide for delivery of the
2012 Bonds to the purchasers.
(b) The 2012 Bonds, as and to the extent paid for and delivered to the
purchaser shall be the binding special revenue obligations of the City, payable out of the Net
Revenues. The proper officers of the City are hereby directed to sell the 2012 Bonds to the
purchaser, to draw all proper and necessary warrants, and to do whatever acts and things which
may be necessaxy to carry out the provisions of this Ordinance.
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(c) The Executive and the Fiscal Officer each are hereby authorized to deem
final an official statement with respect to the 2012 Bonds, as of its date, in accordance with the
provisions of Rule 15c2-12 of the U.S. Securities and Exchange Commission, as amended (the
"SEC Rule"), subject to completion as permitted by the SEC Rule, and the City further
authorizes the distribution of the deemed final official statement, and the execution, delivery and
distribution of such document as further modified and amended with the approval of the
Executive or the Fiscal Officer in the form of a final official statement.
In order to assist any underwriter of the 2012 Bonds in complying with paragraph (b)(5)
of the SEC Rule by undertaking to make available appropriate disclosure about the City and the
2012 Bonds to participants in the municipal securities market, the City hereby covenants, agrees
and undertakes, in accordance with the SEC Rule, unless excluded from the applicability of the
SEC Rule or otherwise exempted from the provisions of paragraph (b)(5) of the SEC Rule, that it
will comply with and carry out all of the provisions of the continuing disclosure contract.
"Continuing disclosure contract" shall mean that certain continuing disclosure contract executed
by the City and dated the date of issuance of the 2012 Bonds, as originally executed and as it
may be amended from time to time in accordance with the terms thereof. The execution and
delivery by the City of the continuing disclosure contract, and the performance by the City of its
obligations thereunder by or through any employee or agent of the City, are hereby approved,
and the City shall comply with and carry out the terms thereof.
(d) The Fiscal Officer is hereby authorized and directed to obtain a legal
opinion as to the validity of the 2012 Bonds from Barnes & Thornburg LLP, and to furnish such
opinion to the purchasers of the 2012 Bonds or to cause a copy of said legal opinion to be printed
on each 2012 Bond. The cost of such opinion shall be paid out of the proceeds of the 2012
Bonds.
(e) In connection with the sale of the 2012 Bonds, the Executive and the
Fiscal Officer each are authorized to take such actions and to execute and deliver such agreements
and instruments as they deem advisable to obtain a rating and/or to obtain bond insurance for the
2012 Bonds, and the taking of such actions and the execution and delivery of such agreements and
instruments are hereby approved.
SECTION 11. Use of Proceeds. The accrued interest received at the time of delivery of
the 2012 Bonds, if any, and premium, if any, shall be deposited in the Bond and Interest Account
of the Sinking Fund (as hereafter defined) and applied to payments on the 2012 Bonds on the
first interest payment date. An amount of proceeds from the sale of the 2012 Bonds of any
Series equal to the amount described in Section 14(b) will be deposited to the 2012 Subaccount
of the Debt Service Reserve Account for the 2012 Bonds of such Series and applied as described
below. The remaining proceeds from the sale of the 2012 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 2012 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 2012 Bonds, including the premium for any bond
insurance obtained for the 2012 Bonds.
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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 2012 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 2012 Bonds were originally issued, all in accordance
with I.C. 5-1-13, as amended or as otherwise permitted by law.
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. Oneration 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.
� SECTION 14. Sinking Fund. There is hereby continued a fund of the utility created
and designated in the Prior Ordinances as the Sinking Fund (the "Sinking Fund"), to be used for
the payment of the principal of and interest on bonds which by their terms are payable from the
Net Revenues, and for the payment of any fiscal agency charges in connection with such
payment. The Sinking Fund is divided into two accounts designated as the Bond and Interest
Account and the Debt Service Reserve Account, which are pledged for the purposes set forth
below. There shall be set aside and deposited in the Sinking Fund, as available, and as
hereinafter provided, a sufficient amount of the Net Revenues to meet the requirements of the
Bond and Interest Account (also shown on the books of the utility as the Bond Sinking Fund)
and of the Debt Service Reserve Account. Such payments shall continue until the balance in the
Bond and Interest Account, plus the balance in the Debt Service Reserve Account, equals the
amount needed to redeem all of the then outstanding bonds.
(a) Principal and Interest Account. There shall be transferred, on the last day
of each calendar month, from the Revenue Fund and credited to the Bond and Interest Account
an amount equal to the sum of one-twelfth (1/12) of the principal and one-sixth (1/6) of the
interest on all then outstanding bonds payable from Net Revenues on the next succeeding
principal and interest payment dates, until the amount so credited shall equal the principal
payable during the next succeeding twelve (12) calendar months and the interest payable during
the next succeeding six (6) calendar months. There shall similarly be credited to the account any
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amount necessary to pay when due the bank fiscal agency charges for paying principal of and
interest on the bonds as the same become payable. The City shall, from the sums deposited in
the Sinking Fund and credited to the Bond and Interest Account, remit promptly to the bank
fiscal agency sufficient moneys to pay the principal and interest on the due dates thereof together
with the amount of bank fiscal agency charges.
(b) Debt Service Reserve Account. The City may, upon the issuance of the
2012 Bonds of any Series, establish within the Debt Service Reserve Account a subaccount for
the 2012 Bonds of such Series (each, a"2012 Subaccount"). The Debt Service Reserve Account
(excluding any subaccounts established for any of the Bonds (each, a "Subaccount", and
collectively, the "Subaccounts")) shall constitute the margin for safety and as protection against
default in the payment of principal of and interest on the Bonds (as hereinafter defined)
(excluding any Bonds for which a Subaccount was established), and the moneys in the Debt
Service Reserve Account (excluding any Subaccounts) shall be used to pay current principal and
interest on the Bonds (excluding any Bonds for which a Subaccount was established) to the
extent that moneys in the Bond and Interest Account are insufficient for that purpose. The 2012
Subaccount of the Debt Service Reserve Account for the 2012 Bonds of any Series shall
constitute the margin for safety and as protection against default in the payment of principal of
and interest on the 2012 Bonds of such Series, and the moneys in such 2012 Subaccount shall be
used to pay current principal and interest on the 2012 Bonds of such Series to the extent that
moneys in the Bond and Interest Account are insufficient for that purpose.
(c) No amounts in the 2012 Subaccount of the Debt Service Reserve Account
for the 2012 Bonds of any Series shall be available to pay any principal of or interest or
redemption premium, if any, on any Bonds, except the 2012 Bonds of such Series.
(d) No amounts in the Debt Service Reserve Account shall be available to pay
any principal of or interest or redemption premium, if any, on any 2012 Bonds of any Series for
which a 2012 Subaccount was established, except that any amounts in the 2012 Subaccount of
the Debt Service Reserve Account for the 2012 Bonds of any Series shall be available to pay the
principal of or interest or redemption premium, if any, on the 2012 Bonds of such Series.
(e) In this Ordinance the term "Parity Bonds" means any and all bonds
ranking on a parity with the 2012 Bonds issued hereunder (including the Prior Bonds) which are
(i) now outstanding or issued in the future by the City and (ii) which are payable from the net
revenues of the City's waterworks.
(� In this Section 14, the term "Bonds" means the 2012 Bonds issued
hereunder and all Parity Bonds.
(g) In this Ordinance, the term "Reserve Requirement" for the Bonds
(excluding any Bonds for which a Subaccount was established) means the least o£ (i) the
maximum annual debt service on the Bonds (excluding any Bonds for which a Subaccount was
established), (ii) 125% of the average annual debt service on the Bonds (excluding any Bonds for
which a Subaccount was established), or (iii) 10% of the proceeds of the Bonds (excluding any
Bonds for which a Subaccount was established). In this Ordinance, the term "Reserve
Requirement" for the 2012 Bonds of each Series for which a 2012 Subaccount was established
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means the least of: (i) the maximum annual debt service on the 2012 Bonds of such series, (ii)
125% of the average annual debt service on the 2012 Bonds of such Series, or (iii) 10% of the
proceeds of the 2012 Bonds of such Series.
(h) Subject to Section 14(i) and Section 14(j)below, the City shall maintain in
the Debt Service Reserve Account (excluding any Subaccounts) an amount equal to the Reserve
Requirement for the Bonds (excluding any Bonds for which a Subaccount was established).
Subject to Section 14(i) and Section 14(j) below, the City shall maintain in the wol 1 Subaccount
of the Debt Service Reserve Account for the 2012 Bonds of each Series for which a 2012
Subaccount was established an amount equal to the Reserve Requirement for the 2012 Bonds of
such Series.
(i) To the extent that the amount in the Debt Service Reserve Account
(excluding any Subaccounts) on the date of the issuance of the 2012 Bonds of any Series is less
than the Reserve Requirement for the Bonds (excluding any Bonds for which a Subaccount was
established), that portion of the shortfall which exists as of the date of issuance of the 2012
Bonds of such Series shall, at the election of the Executive and Fiscal Officer with the advice of
the City's financial advisor, be deposited into the Debt Service Reserve Account (excluding any
Subaccounts) either (i) in a single payment, to be paid on the date of the issuance of the 2012
Bonds of such Series, or (ii) in equal monthly installments, over a period not to exceed sixty(60)
months after the date of issuance of the 2012 Bonds of such Series, with the first installment due
and payable on the date of the issuance of the 2012 Bonds of such Series, and the remaining
installments payable on the last day of each calendar month, commencing on the last day of the
month in which the 2012 Bonds of such Series are issued. To the extent that the amount in the
2012 Subaccount of the Debt Service Reserve Account for the 2012 Bonds of any Series on the
date of the issuance of the 2012 Bonds of such Series is less than the Reserve Requirement for
the 2012 Bonds of such Series, that portion of the shortfall which exists as of the date of
issuance of the 2012 Bonds of such Series shall, at the election of the Executive and Fiscal
Officer with the advice of the City's financial advisor, be deposited into such 2012 Subaccount
either (i) in a single payment, to be paid on the date of the issuance of the 2012 Bonds of such
Series, or (ii) in equal monthly installments, over a period not to exceed sixty (60) months after
the date of issuance of the 2012 Bonds of such Series, with the first instaliment due and payable
on the date of the issuance of the 2012 Bonds of such Series, and the remaining installments
payable on the last day of each calendar month, commencing on the last day of the month in
which the 2012 Bonds of such Series are issued.
(j) To the extent that additional Parity Bonds are issued subsequent to the
issuance of the 2012 Bonds of any Series, the additional amounts, if any, which are required to
be paid into the Debt Service Reserve Account to satisfy the Reserve Requirement as a result of
the issuance of such additional Parity Bonds shall, at the election of the Executive and Fiscal
Officer with the advice of the City's financial advisor, be deposited into the Debt Service
Reserve Account either (i) in a single payment, to be paid on the date of the issuance of such
additional Parity Bonds, or (ii) in equal monthly installments, over a period not to exceed sixty
(60) months after the date of issuance of such additional Parity Bonds, with the first installment
due and payable on the date of the issuance of such additional Parity Bonds, and the remaining
installments payable on the last day of each calendar month, commencing on the last day of the
month in which such additional Parity Bonds are issued.
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(k) Subject to Sectian 14(i) and Section 14(j) above, any deficiency in the
balance maintained in the Debt Service Reserve Account (excluding any Subaccounts) or any
Subaccounts shall be promptly made up from the next available Net Revenues after credits into
the Bond and Interest Account, on a pro rata basis, calculated by reference to the amount of the
deficiency in the Debt Service Revenue Account (excluding any Subaccounts) and each
Subaccount. Any moneys in the Debt Service Reserve Account (excluding any Subaccount) in
excess of the Reserve Requirement for the Bonds (excluding any Bonds for which a Subaccount
was established), and any moneys in the 2012 Subaccount for the 2012 Bonds of any Series for
which a 2012 Subaccount was established in excess of the Reserve Requirement for the 2012
Bonds of such Series, may be used for the prepayment of installments of principal, together with
interest due thereon, on the then outstanding Bonds which are then callable or prepayable, or for
the purchase of outstanding Bonds or installments of principal of and interest on the Bonds at a
price not exceeding par and accrued interest, or may be transferred to the Improvement Fund.
(1) As an alternative to holding cash funds in the Debt Service Reserve
Account or any Subaccount, the City, with the advice of the City's financial advisor and
nationally recognized bond counsel, may satisfy all or any part of its obligation to maintain any
amount in the Debt Service Reserve Account or such Subaccount by depositing a Credit Facility
(as defined in the next sentence) therein(which, for any 2009 Bonds for which a Subaccount was
established and which were sold to the Indiana Finance Authority through the SRF Program (as
hereafter defined), will require the written consent of the Indiana Finance Authority to the
deposit of any such Credit Facility), provided that such deposit does not adversely affect any
then existing rating on the Bonds. A "Credit Facility" is hereby defined as a letter of credit;
liquidity facility, insurance policy or comparable instrument furnished by a bank, insurance
company, financial institution or other entity pursuant to a reimbursement agreement or similar
instrument between such entity and the City. To the extent that any Bonds are insured, and the
Credit Facility is not being provided by the insurer of such Bonds, such insurance policy shall be
subject to the insurer's prior written consent.
(m) In the event a draw is made against the Credit Facility in the Debt Service
Reserve Account or any Subaccount, the City shall repay the amount of the draw and related
expenses incurred by the issuer(s) of the Credit Facility (the "Credit Facility Issuer") together
with interest thereon at the rate specified in the Credit Facility and/or the related Credit Facility
Agreement (as defined below). The repayment of the draw amount, related expenses and accrued
interest (the "Credit Facility Costs") shall be paid from the funds that would have been set aside
above to replenish the Debt Service Reserve Account or such Subaccount, respectively.
Repayment of the Credit Facility Costs shall commence in the first month following each draw,
in an amount equal to no less than one twelfth (1/12) of the aggregate Credit Facility Costs
related to such draw ("Monthly Installments"). Each Monthly Installment shall be deposited by
the City into the Debt Service Reserve Account or such Subaccount, respectively, and then
payments shall be made from the Debt Service Reserve Account or such Subaccount,
respectively,to pay Credit Facility Costs.
(n) If and to the extent cash has been deposited to the Debt Service Reserve
Account or any Subaccount (other than Monthly Installments to pay Credit Facility Costs), all
such cash (or permitted investments) shall be used prior to any drawing under the Credit Facility
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therein, and repayment of any Credit Facility Costs shall be made prior to replenishment of any
such cash amounts.
(o) If, in addition to the Credit Facility in the Debt Service Reserve Account
or any Subaccount, any other reserve account substitute instrument("Additional Credit Facility")
is provided, drawings under the Credit Facility and any such Additional Credit Facility, and
repayment of Credit Facility Costs and reimbursement of amounts due under the Additional
Credit Facility, shall be made on a pro-rata basis (calculated by reference to the maximum
amounts available thereunder) after applying all available cash therein and prior to replenishment
of any such cash draws, respectively.
(p) Inasmuch as the Reserve Requirement pertaining to the 1997 Bonds, the
2000 Bonds, the 2002 Bonds and the 2006 Bonds is currently being satisfied by the 2002
Reserve Insurance Policy and 2006 Reserve Insurance Policy, the City with the advice of the
City's financial advisor and nationally recognized bond counsel, may satisfy the Reserve
Requirement pertaining to the 2012 Bonds of any Series as follows:
(i) by amending the terms of either the 2002 Reserve Insurance Policy or the
2006 Reserve Insurance Policy to expand the scope of either the 2002
Reserve Insurance Policy or the 2006 Reserve Insurance Policy to include
the 2012 Bonds of such Series, and by adjusting the Policy Limit of the
2002 Reserve Insurance Policy or the 2006 Reserve Insurance Policy
accordingly; or
(ii) by obtaining a sepaxate Additional Credit Facility covering the Reserve
Requirement attributable to the 2012 Bonds of such Series; or
(iii) by funding the Reserve Requirement attributa.ble to the 2012 Bonds of
such Series in cash funds, either (i) in a single payment, to be paid on the
date of the issuance of the 2012 Bonds of such Series, or (ii) in equal
monthly installments, over a period not to exceed sixty (60) months after
the date of issuance of the 2012 Bonds of such Series, with the first
installment due and payable on the date of the issuance of the 2012 Bonds
of such Series, and the remaining installments payable on the last day of
each calendar month, commencing on the last day of the month in which
I the 2012 Bonds of such Series are issued.
(� The City acknowledges that: (i) at the time that the 2009A Bonds were
issued, the City, pursuant to the 2009 Ordinance, established within the Debt Service Reserve
Account a subaccount for the 2009A Bonds (the "2009A Subaccount"); (ii) such 2009A
Subaccount constitutes the margin for safety and as protection against default in the payment of
principal of and interest on the 2009A Bonds; (iii) the moneys in such 2009A Subaccount shall
be used to pay current principal and interest on the 2009A Bonds, to the extent that moneys in
the Bond and Interest Account are insufficient for that purpose; (iv); the 2009A Bonds were sold
to the Indiana Finance Authority pursuant to its Drinking Water Revolving Loan Program (the
"SRF Program") and pursuant to the 2009 Ordinance the "Reserve RequiremenY' for the 2009A
Bonds for which the 2009A Subaccount was establish means the maximum annual debt service
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on the 2009A Bonds; and (v) each of the provisions in the 2009 Ordinance pertaining to the
2009A Subaccount remain in full force and effect.
SECTION 15. Improvement Fund. After meeting the requirements of the Operation
and Maintenance Fund and the Sinking Fund, any excess revenues may be transferred from the
Revenue Fund and credited to the special utility fund hereby continued which was created and
designated in the Prior Ordinances as the "Waterworks Improvement Fund" (the "Improvement
Fund") (also shown on the books of the utility as the Depreciation Fund), and said Fund shall be
used for improvements, replacements, additions and extensions of the works. Moneys in the
Improvement Fund shall be transferred to the Sinking Fund if necessary to prevent a default in
the payment of principal of and interest on the then outstanding bonds or, if necessary, to
eliminate any deficiencies in credits to or minimum balance in the Debt Service Reserve Account
of the Sinking Fund, or may be transferred to the Operation and Maintenance Fund to meet
unforeseen contingencies in the operation and maintenance of the works.
SECTION 16. Investment of Funds. The Revenue Fund and the Sinking Fund each
shall be deposited in and maintained as a separate bank account or accounts from all other bank
accounts of the City. The Operation and Maintenance Fund and the Improvement Fund may be
maintained in a single bank account or accounts, but such bank account or accounts shall
likewise be maintained separate and apart from the Revenue Fund and all other bank accounts of
the City and apart from the Revenue Fund and the Sinking Fund bank accounts. All moneys
deposited in the bank accounts shall be deposited, held and secured as public funds in accordance
with the public depository laws of the State of Indiana; provided, that moneys therein may be
invested in obligations in accordance with the applicable laws, including particularly Indiana
Code, Title 5, Article 13, Chapter 9 as amended or supplemented, and in the event of such
investment the income therefrom shall become a part of the funds invested and shall be used only
as provided in this Ordinance.
SECTION 17. Financial Records and Accounts. The City shall keep proper records
and books of account, separate from all of its other records and accounts, in which complete and
correct entries shall be made showing all revenues received on account of the operation of the
utility and all disbursements made therefrom and all transactions relating to the utility. The City
shall maintain on file the audited financial statements of the utility prepared by the State Board
of Accounts. There shall be furnished, upon written request, to any owner of the 2012 Bonds,
the most recent copy of the audited financial statements of the utility prepared by the State Board
of Accounts. Copies of all such statements and reports shall be kept on file in the office of the
Fiscal Officer.
SECTION 18. Rate Covenant. The City, by and through the Board and to the fullest
extent permitted by law, shall establish, fix, maintain and collect reasonable and just rates and
charges for the use of and the services rendered by the works so that such rates and charges shall
produce revenues at least sufficient in each year to (a) pay all the legal and other necessary
expenses incident to the operation of the works, including maintenance costs, operating charges,
upkeep, repairs, and interest charges on bonds or other obligations, including leases; (b) provide
a sinking fund for the liquidation of bonds or other obligations, including leases; (c) provide a
debt service reserve on bonds or other obligations, including leases, as required by the terms of
such obligations; (d) prove adequate money for working capital; (e) provide adequate money for
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making extensions and replacements; and (� provide money for the payment of any taxes that
may be assessed against the works. So long as any of the 2012 Bonds are outstanding, none of
the facilities and services afforded by the works shall be furnished without a reasonable and just
charge being made therefor.
SECTION 19. Defeasance. If, when the 2012 Bonds or a portion thereof shall have
become due and payable in accordance with their terms or shall have been duly called for
redemption or irrevocable instructions to call the 2012 Bonds or a portion thereof for redemption
shall have been given, and the whole amount of the principal, premium, if any, and the interest
so due and payable upon such 2012 Bonds or any portion thereof then outstanding shall be paid,
or (i) cash, (ii) direct non-callable obligations of(including obligations issued or held in book-
entry form on the books o� the U.S. Department of the Treasury,the principal of and the interest
on which when due without reinvestment will provide sufficient money, or (iii) any combination
of the foregoing, shall be held irrevocably in trust for such purpose, and provision shall also be
made for paying all fees and expenses for the payment, then and in that case the 2012 Bonds or
such designated portion thereof shall no longer be deemed outstanding or secured by this
Ordinance or entitled to the pledge of the Net Revenues.
SECTION 20. Additional Bonds. The City reserves the right to issue additional bonds
payable out of the Net Revenues ranking on a parity with the 2012 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 Reserve Requirement
shall be satisfied for the additional Parity Bonds either at the time of delivery of the additional
Parity Bonds or over a five-yeax or shorter period, in a manner which is commensurate with the
requirements established in Section 14 of this Ordinance.
(b) The Net Revenues in the fiscal year immediately preceding the issuance of
any such bonds ranking on a parity with the 2012 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 2012 Bonds and the Prior Bonds) and the additional Parity
Bonds proposed to be issued; or, prior to the issuance of the additional 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 would have produced Net Revenues for the year equal to not
less than one hundred twenty-five percent (125%) of the m�imum annual principal and interest
requirements of the then outstanding bonds and the additional 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.
(c) To the extent required by law, the issuance of the proposed additional
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.
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(d) The principal of said additional Paxity Bonds shall be payable on
January 1 and the interest shall be payable on January 1 and July 1 during the periods such
principal and interest are payable.
(e) So long as the 2000 Bonds, the 2009A Bonds or any other Parity Bonds
sold to the Indiana Finance Authority through the SRF Program remain outstanding, the City
shall obtain the consent of the Indiana Finance Authority to the issuance of the proposed
additional Parity Bonds.
SECTION 21. Further Covenants of the City. For the purpose of further safeguaxding
the interests of the owners of the 2012 Bonds, it is hereby specifically provided as follows:
(a) The City, through the Board, shall at all times maintain the works in good
condition, and operate the same in an efficient manner and at a reasonable cost.
(b) So long as any of the 2012 Bonds are outstanding, the City, through the
Board, shall maintain insurance on the insurable parts of the works, of a kind and in an amount
such as would normally be carried by private entities 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. As an alternative to maintaining such insurance, the City may
maintain a self-insurance program with catastrophic or similar coverage so long as such program
meets the requirements of any applicable laws or regulations and is maintained in a manner
consistent with programs maintained by similarly situated municipalities. Insurance proceeds or
self-insurance proceeds shall be used in replacing or repairing the property destroyed or
damaged, or if not used for that purpose, shall be treated and applied as Net Revenues.
(c) So long as any of the 2012 Bonds are outstanding, the City shall not
mortgage, pledge or otherwise encumber the works, or any part thereof, and shall not sell, lease
or otherwise dispose of any part of the same, excepting only such machinery, equipment or other
property as may be replaced, or shall no longer be necessary for use in connection with said
utility; provided, the foregoing restrictions shall not apply to the extent approved otherwise in
writing by the owner.s of all 2012 Bonds then outstanding, and the City receives an opinion of
nationally recognized bond counsel to the effect that the transaction will not cause the interest on
the 2012 Bonds to be included in gross income for federal income tax purposes.
(d) Reserved.
(e) Except as otherwise specifically provided in Section 20 of this Ordinance
and in the Prior Ordinances, so long as any of the 2012 Bonds are outstanding, no additional
bonds or other obligations pledging any portion of the revenues of the works shall be issued by
the City, except such as shall be made junior and subordinate in all respects to the 2012 Bonds,
unless all of the 2012 Bonds are defeased,redeemed or retired coincidentally with the delivery of
such additional bonds or other obligations. Such subordinate obligations shall be subject to the
provisions of Section 20(d).
(� The provisions of this Ordinance shall constitute a contract by and
between the City and the owners of the 2012 Bonds, all the terms of which shall be enforceable
by any such owner by any and all appropriate proceedings in law or in equity. After the issuance
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of the 2012 Bonds and so long as any of the principal thereof or interest or premium, if any,
thereon remains unpaid, except as expressly provided herein, this Ordinance shall not be
repealed or amended in any respect which, in the determination of the Council in its sole
discretion, will materially and adversely affect the rights of such owners, nor shall the Council or
any other body of the City adopt any law, ordinance or resolution which, in the determination of
the Council in its sole discretion, in any way materially and adversely affects the rights of such
owners.
(g) The provisions of this Ordinance shall be construed to create a trust in the
proceeds of the sale of the 2012 Bonds for the uses and purposes herein set forth, and the owners
of the 2012 Bonds shall retain a lien on such proceeds until the same are applied in accordance
with the provisions of this Ordinance and the Act. The provisions of this Ordinance shall also be
construed to create a trust in the Net Revenues herein directed to be set apart and paid into the
Sinking Fund for the uses and purposes of that Fund as set forth in this Ordinance. The owners
of the 2012 Bonds shall have all the rights, remedies and privileges set forth in the Act.
(h) 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
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.
(i) The Project shall be constructed under plans and specifications approved
by a competent engineer designated by the City. All estimates for work done or material
furnished shall first be checked by the engineer and approved by the City.
SECTION 22. Amendments With Consent of Bondholders. Subject to the terms and
provisions contained in this section and Sections 21 and 23, the owners of not less than a
majority in aggregate principal amount of the 2012 Bonds and then outstanding shall have the
right, from time to time, to consent to and approve the adoption by the Council of such ordinance
or ordinances supplemental hereto, as shall be deemed necessary or desirable by the City for the
purpose of amending in any particular any of the terms or provisions contained in this Ordinance,
or in any supplemental Ordinance; provided, however, nothing herein contained shall permit or
be construed as permitting:
(a) An extension of the maturity of the principal of or interest or premium, if
any, on any 2012 Bond or an advancement of the earliest redemption date on any 2012 Bond,
without the consent of the holder of each 2012 Bond so affected; or
(b) A reduction in the principal amount of any 2012 Bond, the redemption
premium, the Reserve Requirement therefor or the rate of interest thereon, or a change in the
monetary mediuxn in which such amounts are payable, without the consent of the holder of each
2012 Bond so affected; or
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(c) The creation of a lien upon or a pledge of the Net Revenues ranking prior
to the pledge thereof created by this Ordinance, without the consent of the holders of all 2012
Bonds then outstanding; or
(d) A preference or priority of any 2012 Bond over any other 2012 Bond,
without the consent of the holders of a112012 Bonds then outstanding; or
(e) A reduction in the aggregate principal amount of the 2012 Bonds required
for consent to such supplemental ordinance, without the consent of the holders of a112012 Bonds
then outstanding.
If the City shall desire to obtain any such consent, it shall cause the Registrar to mail a
notice, postage prepaid, to the addresses appearing on the Registration Record. Such notice shall
briefly set forth the nature of the proposed supplemental ordinance and shall state that a copy
thereof is on file at the office of the Registrar for inspection by all owners of the 2012 Bonds.
The Registrar shall not, however, be subject to any liability to any owners of the 2012 Bonds by
reason of its failure to mail such notice, and any such failure shall not affect the validity of such
supplemental ordinance when consented to and approved as herein provided.
Whenever at any time within one year after the date of the mailing of such notice, the
City shall receive any instrument or instruments purporting to be executed by the owners of the
2012 Bonds of not less than a majority in aggregate principal amount of the 2012 Bonds then
outstanding, which instrument or instruments shall refer to the proposed supplemental ordinance
described in such notice, and shall specifically consent to and approve the adoption thereof in
substantially the form of the copy thereof referred to in such notice as on file with the Registrar,
thereupon, but not otherwise, the City may adopt such supplemental ordinance in substantially
such form, without liability or responsibility to any owners of the 2012 Bonds, whether or not
such owners shall have consented thereto.
No owner of any 2012 Bond shall have any right to ob�ect to the adoption of such
supplemental ordinance or to object to any of the terms and provisions contained therein or the
operation thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin
or restrain the Council from adopting the same, or from taking any action pursuant to the
provisions thereof. Upon the adoption of any supplemental ordinance pursuant to the provisions
of his section, this Ordinance sha11 be, and shall be deemed, modified and amended in
accordance therewith, and the respective rights, duties and obligations under this Ordinance of
the City and all owners of 2012 Bonds then outstanding shall thereafter be determined, exercised
and enforced in accordance with this Ordinance, subject in all respects to such modifications and
amendments.
Notwithstanding anything conta.ined in the foregoing provisions of this Ordinance, the
rights and obligations of the City and of the owners of the 2012 Bonds, and the terms and
provisions of the 2012 Bonds and this Ordinance, or any supplemental ordinance, may be
modified or amended in any respect with the consent of the City and the consent of the owners of
all the 2012 Bonds then outstanding.
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SECTION 23. Amendments Without Consent of Bondholders. The Council may,
from time to time and at any time, and without notice to or consent of the owners of the 2012
Bonds, adopt such ordinances supplemental hereto (which supplemental ordinances shall
thereafter form a part hereo�:
(a) To cure any ambiguity or formal defect or omission in this Ordinance or in
any supplemental ordinance;
(b) To grant to or confer upon the owners of the 2012 Bonds any additional
rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon
the owners of the 2012 Bonds;
(c) To procure a rating on the 2012 Bonds from a nationally recognized
securities rating agency designated in such supplemental ordinance, if such supplemental
ordinance, in the determination of the Council in its sole discretion, will not materially and
adversely affect the owners of the 2012 Bonds;
(d) To obtain or maintain bond insurance with respect to the 2012 Bonds;
(e) To provide for the refunding or advance refunding of the 2012 Bonds;
(� To provide for the issuance of additional bonds as provided in Section 20
hereof; or
(g) To make any other change which, in the determination of the Council in
its sole discretion, is not to the material prejudice of the owners of the 2012 Bonds.
SECTION 24. Tax Matters. In order to preserve the exclusion of interest on the 2012
Bonds from gross income for federal income tax purposes and as an inducement to purchasers of
the 2012 Bonds,the City represents, covenants and agrees that:
(a) No person or entity, other than the City or another state or local
governmental unit, will use proceeds of the 2012 Bonds or property financed by the 2012 Bond
proceeds other than as a member of the general public. No person or entity other than the City or
another state or local governmental unit will own property financed by 2012 Bond proceeds or
will have actual or beneficial use of such property pursuant to a lease, a management or incentive
payment contract, an arrangement such as take-or-pay or output contract, or any other type of
arrangement that differentiates that person's or entity's use of such property from the use by the
public at large.
(b) No 2012 Bond proceeds will be loaned to any entity or person other than a
state or local governmental unit. No 2012 Bond proceeds will be transferred, directly or
indirectly, or deemed transferred to a non-governmental person in any ma.nner that would in
substance constitute a loan of the 2012 Bond proceeds.
(c) The City will not take any action or fail to take any action with respect to
the 2012 Bonds that would result in the loss of the exclusion from gross income for federal
income tax purposes of interest on the 2012 Bonds pursuant to Section 103 of the Internal
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Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder as applicable to
the 2012 Bonds, including, without limitation, the taking of such action as is necessary to rebate
or cause to be rebated arbitrage profits on 2012 Bond proceeds or other monies treated as 2012
Bond proceeds to the federal government as provided in Section 148 of the Code, and will set
aside such monies, which may be paid from investment income on funds and accounts
notwithstanding anything else to the contrary herein, in trust for such purposes.
(d) The City will file an information report on Form 8038-G with the Internal
Revenue Service as required by Section 149 of the Code.
(e) The City will not make any investment or do any other act or thing during
the period that any 2012 Bond is outstanding hereunder which would cause any 2012 Bond to be
an "arbitrage bond" within the meaning of Section 148 of the Code and the regulations
thereunder as applicable to the 2012 Bonds.
Notwithstanding any other provisions of this Ordinance, the foregoing covenants and
authorizations (the "Tax Sections") which are designed to preserve the exclusion of interest on
the 2012 Bonds from gross income under federal law (the "Tax Exemption") need not be
complied with to the extent the City receives an opinion of nationally recognized bond counsel
that compliance with such Tax Section is unnecessary to preserve the Tax Exemption.
SECTION 25. Issuance of BANs; Other Actions.
(a) The City, having satisfied all the statutory requirements for the issuance of
the 2012 Bonds, has the authority to elect to issue a bond anticipation note or notes, repayable
from the proceeds received from the sale of the 2012 Bonds (defined herein as the "BANs").
This Council hereby authorizes the issuance and sale of the BANs pursuant to I.C. §5-1-14-5 in
one or more series, ranking on a parity with each other, in original aggregate principal amount
not to exceed Eight Million Three Hundred Thousand Dollars ($8,300,000) to provide interim
financing until permanent financing becomes available and to pay for costs of issuing the BANs,
and the BANs also may fund capitalized interest thereon. The designation of the BANs shall be
"City of South Bend, Indiana Waterworks Bond Anticipation Note of 20 ". The BANs shall be
issued in fully registered form in denominations of Five Thousand Dollars ($5,000), or integral
multiples thereof, shall be originally dated the date of delivery, shall be numbered consecutively
from 1 upward, shall mature not more than five (5) years from the date of issuance, may be
renewed or extended from time to time, over a period not exceeding five (5) years from the date
of the original issuance of the BANs, in accord with I.C. §5-1.1-5, shall be prepayable on seven
(7) days' notice in whole or in part in any authorized denomination without premium or penalty,
shall bear interest at a rate not exceeding eight percent (8%) per annum, and shall be sold at a
discount not exceeding ninety-nine percent(99%) of the principal amount thereof. Interest on the
BANs shall be payable at maturity. It shall not be necessary for the City to repeat the procedures
for the issuance of the 2012 Bonds as the procedures followed before the issuance of the BANs
are for all purposes sufficient to authorize the issuance of the 2012 Bonds and to use proceeds
thereof to repay the BANs.
The principal of the BANs herein authorized is payable solely from proceeds received
from the sale of the 2012 Bonds, and the interest thereon may be paid from such proceeds or
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from the Net Revenues or a combination thereof, and the proceeds received by the City from the
sale of the 2012 Bonds and such Net Revenues are hereby irrevocably pledged to the payment of
the principal of and interest on the BANs. The Executive is hereby authorized to determine the
form of the BANs and to execute the BANs, the Fiscal Officer is hereby authorized to have the
BANs prepared, and to attest to the BANs and affix the seal the City or cause a facsimile of the
seal of the City to be imprinted or impressed on the BANs. The Fiscal Officer is hereby
authorized and directed to obtain the legal opinion as to the validity of the BANs from Barnes &
Thornburg LLP. After the BANs shall have been properly executed, the Fiscal Officer shall be
authorized to receive from the purchaser thereof payment for the BANs and to provide for
delivery of the BANs to the purchaser. The City may receive payment for the BANs in
installments. Proceeds received from the sale of the BANs shall be deposited in the Construction
Fund referred to in Sec. 11 of this Ordinance. The Fiscal Officer is authorized to sell the BANs
to any investor, and to work with the investor to facilitate the sale of the BANs. In any case any
officer whose signature or a facsimile signature appears on the BANs shall cease to be such
officer before delivery of the BANs, such signature shall nevertheless be valid and sufficient for
all purposes as if such officer had remained in office until delivery of the BANs.
Upon execution of the BANs by the Executive and attestation thereof by the City Clerk,
the BANs shall constitute the legal, valid and binding obligations of the City.
No action shall be taken that would impair the exclusion from gross income of interest on
the BANs provided by the Code (as defined in Section 24). In furtherance of the foregoing, the
provisions of Section 24 of this Ordinance shall apply to the BANs in the same manner as they
apply to the 2012 Bonds.
The BANs shall be subject to transfer or exchange in the same manner as the 2012
Bonds, as described in Section 4, and to amendment in the same manner as the 2012 Bonds, as
described in Sections 22 and 23.
The Executive and the Fiscal Officer each are authorized and directed to execute a
purchase agreement with respect to the BANs in such form or substance as they shall approve:
As an alternative to any terms of the BANs set forth above and to the method of sale referred to
above, the Fiscal Officer may negotiate the sale to the Indiana Finance Authority or the Indiana
Bond Bank upon such terms as are acceptable to the Executive and the Fiscal Officer and as are
authorized by law for such sale, and the Executive and the Fiscal Officer each are authorized to
execute a purchase agreement with the Indiana Finance Authority or the Indiana Bond Bank
reflecting such terms.
(b) The Executive and the Fiscal Officer may take such other actions or
deliver such other certificates and documents needed for the Project or the financing as they
deem necessary or desirable in connection therewith.
SECTION 26. Rate Ordinance. The rates and charges of the works are set forth or
described in Ordinance No. 9651-OS adopted by the Council on January 10, 2005. Such
ordinance is hereby incorporated by reference as if set forth in full at this place, two copies of
which are on file and available for public inspection in the office of the City Clerk pursuant to
I.C. §36-1-5-4.
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SECTION 27. Non-Business Days. If the date of making any payment or the last date
for performance of any act or the exercising of any right, as provided in this Ordinance, shall be
a legal holiday or a day on which banking institutions in the City or the jurisdiction in which the
Registrar or Paying Agent is located are typically closed, such payment may be made or act
performed or right exercised on the next succeeding day not a legal holiday or a day on which
such banking institutions are typically closed, with the same force and effect as if done on the
nominal date provided in this Ordinance, and no interest shall accrue for the period after such
nominal date.
SECTION 28. No Conflict. The Council hereby finds and determines that the adoption
of this Ordinance and the issuance of the 2012 Bonds is in compliance with the Prior Ordinances.
The Prior Ordinances shall remain in full force and effect. All ordinances and resolutions and
parts thereof in conflict herewith, except the Prior Ordinances, are to the extent of such conflict
hereby repealed. None of the provisions of this Ordinance shall be construed to adversely affect
the rights of the owners of the Parity Bonds.
SECTION 29. Severability. If any section, paragraph or provision of this Ordinance
shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of
such section, paragraph or provision sha11 not affect any of the remaining provisions of this
Ordinance.
SECTION 30. Interpretation. Unless the context or laws clearly require otherwise,
references herein to statutes or other laws include the same as modified, supplemented or
superseded from time to time.
SECTION 31. Effectiveness. This Ordinance shall be in full force and effect from and
after its passage and compliance with the procedures required by law.
SECTION 32. Credit Facility. The Executive and the Fiscal Officer, on behalf of the
City, are hereby authorized to obtain a Credit Facility or Additional Credit Facility as set forth in
Section 14 herein. The Executive and the Fiscal Officer, on behalf of the City, are also
authorized to enter into an agreement with the Credit Facility Issuer for either the Credit Facility
or Additional Credit Facility (the "Credit Facility Agreement") and negotiate the terms of the
Credit Facility Agreement, with the advice of the City's financial advisor and nationally
recognized bond counsel. The Executive and the Fiscal Officer, on behalf of the City, are also
authorized to execute any and all other documents required to obtain the Credit Facility. The
City hereby agrees that:
(a) If the waterworks fails to pay any Credit Facility Costs in accordance with
the requirements set forth above, the Credit Facility Issuer shall be entitled to exercise any and
all remedies available at law or under the authorized documents other than (i) acceleration of the
maturity of the 2012 Bonds or(ii)remedies which would adversely affect the owners of the 2012
Bonds.
(b) This Ordinance shall not be discharged and the 2012 Bonds defeased until
all Credit Facility Costs owing to the Credit Facility Issuer shall have been paid in full.
- 31 -
(c) The Credit Facility Issuer is granted a security interest (subordinate to that
of the owners of the 2012 Bonds) in all revenues and collateral pledged as security for the 2012
Bonds, for the repayment of the Credit Facility Costs.
(d) No additional bonds payable from the Net Revenues will be issued
without the Credit Facility Issuer's prior written consent as long as Credit Facility Costs are past
due and still owing to the Credit Facility Issuer.
(e) This Ordinance shall not be modified or amended, except as provided in
Section 23 herein, without the prior written consent of the CreditFacility Issuer.
The Credit Facility Issuer shall be provided with written notice of the resignation or removal of
the Registrar and Paying Agent and the appointment of a successor thereto and of the issuance of
additional indebtedness of the City's waterworks at such address as may be specified, from time
to time, by the Credit Facility Issuer.
SECTION 33. Pavment on Bonds in the Event of Default. In the event available
moneys are insufficient to pay debt service on the 2012 Bonds and any Parity Bonds when due;
available moneys shall be applied, after payment of all costs and expenses associated therewith,
to the 2012 Bonds and any Parity Bonds as follows: to the payment to the persons entitled
thereto of all unpaid installments of interest then due on, and the unpaid principal of, the 2012
Bonds and any Parity Bonds, including interest on any past due principal of any 2012 Bond or
Parity Bond at the rate borne by such 2012 Bond or Parity Bond, in the order of the maturity of
the installments of such interest and the due dates of such principal and, if the amount available
shall not be sufficient to pay in full any particular installment of interest or maturity of principal,
then to such payment ratably, according to the amounts so due, to the persons entitled thereto,
without any discrimination or privilege or any preference of or priority of interest over principal
or principal over interest.
During the continuance of any default in the payment of either principal of or interest or
premium on any 2012 Bonds or Parity Bonds, no payment shall be made with respect to any
subordinate obligations issued pursuant to Section 21(e). Moneys available for payment to
holders of such subordinate obligations shall, in the event of an insufficient amount being
available to pay all debt service with respect to the subordinate obligations when due, be applied
to the subordinate obligations in accordance with the sequence and other terms set forth above
with respect to payments regarding 2012 Bonds and Parity Bonds unless otherwise provided in
the ordinance authorizing the subordinate obligations.
SECTION 34. Actions and A�reements. Each of the Executive, the Fiscal Officer and
any other officer or employee of the City is hereby authorized and directed to execute any
instruments or agreements or take any other actions necessary or desirable to effect the
transactions contemplated by this Ordinance, such necessity or desirability to be conclusively
evidenced by the execution of such instruments or agreements or the taking of such action.
- 32 -
PASSED AND ADOPTED by the Common Council of the City of South Bend, Indiana,
this_day of , 2011.
COMMON COUNCIL OF THE
CITY OF SOUTH BEN INDI NA
By: '~ ..__
Member of the Corrimon Council
�
Filed in ������� ��1ce
NOV 0 8 2011
.,.a...,,.�..t. .�
Cllll CL��,����;��RID,IN
1at READ{NG I �—"��—�'�
PUBUC NEARING(,(—�-5-'l�
3 rd READING ��_�-_�'
NOT, APPROVED - 33 -
REfERRED
PASSED ��_����
Exhibit A
PROJECT DESCRIPTION
The Project consists of upgrades, expansions, additions, replacements, extensions and
improvements to the Waterworks, including:
Distribution S, s��
1. Replace water main on South Bend Avenue from Twyckenham Avenue to Eddy Street
2. Replace water main on Ewing Avenue from Locust Road. to Walnut Street
3. Install water main on Bailey Avenue to Burdette Street to supply Legacy Court
4. Install water main to connect South Well field to the South Pressure Zone
5. Install a water main under the railroad tracks on 30th Street
6. Install a new well at the Cleveland Road North well field
7. Modify pressure reducing valves
Other projects
1. Acquire additional automated meter reading meters
2. Acquire hydro-excavation truck for water system repairs
3. Security upgrades to water facilities including technology
Pinhook U�grade
1. Improve chemical feed system
2. Replace filter media for greater filtering capacity
3. Aerator removal and detention tank modification
4. Improve metering applications
5. Replace existing high service pumps and drives
6. Upgrade filter equipment
7. HVAC system renovation
Making any and all additional improvements related to the foregoing.
SBDS02 ABF 425947v5
TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND:
Your Committee of the Whole, to whom was referred:
BILL NO.
70-11 A BILL OF THE COMMON COUNCIL OF THE CITY OF
SOUTH BEND, INDIANA, CONCERNING THE
CONSTRUCTION OF IMPROVEMENTS TO THE
MUNICIPAL WATERWORKS OF THE CITY OF SOUTH
BEND, INDIANA; AUTHORIZING TH ISSUANCE OF
REVENUE BONDS FOR SUCH PURPOSE IN THE
PRINCIPAL AMOUNT NOT TO EXCEED EIGHT MILLION
THREE HUNDRED THOUSAND ($8,300,000);
ADDRESSING OTHER MATTERS CONNECTED
THEREWITH, INCLUDING THE ISSUANCE OF NOTES IN
ANTICIPATION OF BONDS; AND REPEALING
ORDINANCES INCONSISTENT HEREWITH
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.
This bill was heard by the Utilities Committee.
Timothy Rouse
Chairperson, Committee of the Whole
BARNES�LTHORNBURG LLP 600 lst Source Bank Center
100 North Michigan
South Bend,IN 46601-1632 U.S.A.
(574)233-1171
Faac(574)237-1125
Philip J.Faccenda,Jr.
(574)237-1148 www.btlaw.com
philip.faccendaCa?btlaw.com
November 8, 2011
HAND DELIVERED
Mr. John Voorde
Clerk of the City of South Bend
455 County-City Building
227 West Jefferson Boulevard
South Bend, Indiana 46601
Re: City of South Bend, Indiana Waterworks Revenue Bonds of 2012
Dear Mr. Voorde:
Enclosed for filing are multiple copies of the Ordinance for the above-referenced City of
South Bend, Indiana Waterworks Revenue Bonds of 2012 for financing waterworks projects in
the City of South Bend as described in the Ordinance for first reading before the Common
Council on November 14, 2011 and second reading on November 28, 2011. Please return a file-
stamped copy to my attention.
We have also enclosed a Memorandum from Dave Tungate to the Common Council
providing further explanation of the projects to be financed by the Bonds.
Please call me with any questions you may have.
Very truly yours,
BARNES & THORNBURG LLP
��
Philip J. Faccenda, Jr. - ,���
PJF:ske ����� �t'� ������� ���'��'�����
r�Enclosures �
cc: John E. Broden, Esq. (w/enc.) ��v � � �(�';� �
Mr. Gregg D. Zientara(w/enc.) ���
Mr. David E. Tungate (w/enc.) J�������� �.
SBDS02 PFACCENDA 426080v1 �����'°���y���'��� �s�+��Y!�
Atlanta Chicago Delaware Indiana Los Angeles Michigan Minneapolis Ohio Washington,D.C.
x 18e2 x INTER-OFFICE MEMORANDUM
ti�`"" �`�� �,✓`,9 Department of Public Works
�%/��CE�\'° � � .
� �� �, ,,, , ,�A Water Works
N� ;'/ �����
o� �/��r�i���;1���,�,q
�onsH Bti
TO: City Council _
FROM: Dave Tungate
SUBJECT: 2012 Revenue Bonds
DATE: November 8, 2011
The South Bend Water Works plans to issue revenue bonds in the amount of$8.3 million. There
is no rate increase associated with this bond issue. A revenue bond from 1997 will be paid off in
January 2012. We plan to use the money dedicated to the principal and interest payment for the
1997 bonds to pay for the new revenue bonds. There will be no rate increase necessary to pay for
this revenue bond.
The 2012 bond projects can be divided into three categories. One category is distribution system
improvements. These projects will include water main extensions from our water system master
plan, which will allow us to more efficiently move water through our water system. A second
category includes equipment purchases such as automated meter reading water meters, a hydro
excavation truck, and upgraded site security equipment. The third category is an upgrade to the
water treatment capacity at the Pinhook Filtration Plant. This treatment plant has the
infrastructure to produce additional water with minor upgrades. Additional water production
� from Pinhook will allow us to be more flexible with our water production facilities.
Fii�� �r� ���t'�'� �ice
NQV n 8 2011
J�t�W!/qfJR�E
CIT'Y CLERlC,SOUTt��END,IN