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HomeMy WebLinkAbout10659-19 Supplemental Bond Ordinance ORDINANCE No . 1065949 Passed by the Common Council of the City of South Bend,Indiana July 22, 20 19 Attest: QA-&-w City Clerk Kar emah N. Fowler Attest: President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana July 22, 19 20 City Clerk Kare mah N. Fowler Jr li, 7r�-� 9 Approved and signed by me `�`� a[� 20 1 -I Mayor BILL NO. 20-19 ORDINANCE NO. 10659-19 AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, SUPPLEMENTING AND AMENDING ORDINANCE NO. 9937-09 FOR THE PURPOSE OF AUTHORIZING THE MODIFICATION OF CERTAIN CONTRACTUAL RIGHTS OF THE CITY, THE EXECUTION AND DELIVERY OF ITS AMENDED WATERWORKS REVENUE BONDS OF 2009, SERIES B, AND APPROVING CERTAIN RELATED MATTERS IN CONNECTION THEREWITH STATEMENT OF PURPOSE AND INTENT The City of South Bend, Indiana (the "City"), has heretofore established, constructed, and currently owns and operates a waterworks system (the "Utility"), pursuant to the provisions of Indiana Code 8-1.5, as amended. On November 19, 2009, the City issued its bonds designated as the "City of South Bend, Indiana, Waterworks Revenue Bonds of 2009, Series B" in the original aggregate principal amount of$5,380,000 (the "Original Bonds"), which are payable from the net revenues of the Utility, in order to provide funds to pay the costs of certain works of improvement to the Utility and to pay incidental charges in connection therewith, all pursuant to Ordinance No. 9937-09 adopted by the Common Council of the City (the "Common Council") on June 8, 2009 (the "Original Ordinance"). These Original Bonds are outstanding in the aggregate principal amount of approximately$3,835,000. Pursuant to the terms of the Original Bonds and the Qualified Entity Purchase Agreement, dated November 11, 2009 (the "Original Purchase Agreement"), by and between the City and the Indiana Bond Bank (the "Bond Bank"), the Original Bonds maturing on or after January 1, 2021, are subject to redemption prior to maturity, at the option of the City, on any date on or after January 1, 2020 (such rights hereinafter referred to as the"Call Rights"). The Bond Bank previously issued its Indiana Bond Bank Special Program Bonds, Series 2009 C-1, dated November 19, 2009, in the aggregate principal amount of $22,235,000 (the "Prior Bond Bank Bonds"), for the purpose, in part, of providing funds to purchase the Original Bonds from the City, and the Bond Bank has authorized and intends to issue one or more series of its Indiana Bond Bank Special Program Refunding Bonds, Series 2019 A, with such further or different series designation as may be determined by the Bond Bank (collectively, the "Refunding Bond Bank Bonds"), for the purpose of refinancing the outstanding Prior Bond Bank Bonds and paying all costs of issuance related thereto, in order to achieve interest cost savings due to favorable market conditions (the"Refunding Program"). As a condition to sharing a portion of the economic benefits associated with the Refunding Program with the City, the Bond Bank has requested that (a)the City modify the Call Rights and evidence the modification of such Call Rights and receipt of such Call Rights Modification Credit (as hereinafter defined) (all in exchange for receiving a portion of the economic benefits associated with the Refunding Program) by executing and delivering its Amended Bonds (as hereinafter defined), and (b) upon the closing on the Refunding Bond Bank Bonds and satisfaction of the other terms and conditions set forth herein, exchanging the Amended Bonds for the outstanding Original Bonds. Pursuant to the terms of the Original Ordinance, the City may grant or confer upon the owners of the Original Bonds any additional benefits, rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the owners of the Original Bonds, or to make any change which, in the judgment of the City, is not to the prejudice of the owners of the Original Bonds. Furthermore, the terms of the Original Ordinance provide that, the City may, from time to time and at any time, without consent of, or notice to, any of the owners of the Original Bonds, amend the Original Ordinance for any purpose if in the judgment of the City such amendment does not adversely affect the interests of the owners of the outstanding Original Bonds. As of the date of filing of this ordinance, the Bond Bank is the registered owner of all of the outstanding Original Bonds, and the City desires to adopt this supplemental ordinance (the "Supplemental Ordinance") in order to supplement and amend the Original Ordinance (the Original Ordinance, as supplemented and amended by this Supplemental Ordinance, collectively, the "Ordinance") for the purpose of authorizing the modification of the Call Rights and the execution and delivery of the Amended Bonds (in order to evidence the modification of such Call Rights), all in consideration for the Bond Bank (a) crediting to the City a portion of the economic benefits associated with the Refunding Program in an amount estimated to be, based upon current market conditions, approximately $1,135,539 (the "Call Rights Modification Credit"), with such Call Rights Modification Credit being in the form of a reduction in one or more payments of debt service on the Original Bonds (which will be evidenced by the Amended Bonds), and (b) returning all of the outstanding Original Bonds to the City. The Common Council has determined that a significant benefit to the City in the amount of the Call Rights Modification Credit will be effected by assisting the Bond Bank in the undertaking of the Refunding Program, and that the modification of the Call Rights and the execution and delivery of the Amended Bonds will not adversely affect the owners of the Original Bonds upon the execution and delivery of the Amended Bonds. The Common Council further finds that all conditions precedent to the adoption of this Supplemental Ordinance have been complied with in accordance with the provisions of Indiana Code 5-1-5 and Indiana Code 8-1.5, each as amended (collectively, the"Act"), to the extent each is applicable hereto. NOW THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS: SECTION I. Authorization of Transaction; Modification of Call Rights. The Common Council hereby determines that (a) the receipt of the Call Rights Modification Credit(in the form described in the recitals hereof) in exchange for the modification of the Call Rights by the City, and (b) the execution and delivery by the City of the Amended Bonds to the Bond Bank in exchange for the outstanding Original Bonds now held by the Bond Bank, in order to evidence the modification of such Call Rights and the receipt of the Call Rights Modification Credit (clauses (a) and (b), collectively, the "Transaction"), is in the best interests of the City and is consistent with and in furtherance of the purposes for which the City was created and exists. Accordingly, the City is hereby authorized to modify the Call Rights and to execute and deliver the Amended Bonds, all in accordance with the terms and conditions of this Supplemental Ordinance. SECTION II. The Amended Bonds. In accordance with the Act and for the purpose of the Transaction, the City shall execute and deliver its amended bonds designated as the "City of South Bend, Indiana, Amended Waterworks Revenue Bonds of 2009, Series B", in an original aggregate principal amount not to exceed the aggregate principal amount of the Original Bonds which are currently outstanding (the "Amended Bonds"), and exchange the Amended Bonds for all of the outstanding Original Bonds. SECTION III. Except where inconsistent with the provisions of this Supplemental Ordinance, the terms and conditions of the Amended Bonds shall be the same as those of the outstanding Original Bonds as provided in the Original Ordinance; provided, however, if requested by the Bond Bank, the Amended Bonds may be issued as one or more term bonds subject to mandatory sinking fund redemption payments. The form of the Amended Bonds shall be substantially in the form set forth in the Original Ordinance, with such conforming changes as shall be necessary to reflect the terms and conditions set forth in this Supplemental Ordinance and in the Amended Purchase Agreement (as defined herein), including the modification of the Call Rights. The Amended Bonds shall be executed and delivered in the same manner and in accordance with the terms and conditions of the Original Ordinance and the Act. SECTION IV. Redemption Provisions of the Amended Bonds. Notwithstanding anything in the Original Ordinance, the Original Purchase Agreement or the Original Bonds to the contrary, (a) if in the best interests of the City as determined by the Controller of the City(the "Controller"), the Call Rights may be modified so that the Amended Bonds shall be subject to redemption at the option of the City on any date on or after the first optional redemption date on the Refunding Bond Bank Bonds (if any), at a redemption price equal to the principal amount 2 thereof so called for redemption plus accrued interest to the date fixed for redemption, or(b) if in the best interests of the City as determined by the Controller, the Call Rights may be waived so that the Amended Bonds shall not be subject to optional redemption prior to maturity. SECTION V. Application of Call Rights Modification Credit. The Common Council hereby agrees that the Call Rights Modification Credit shall be applied to reduce one or more semi-annual debt service payments on the Original Bonds, and that such reductions of one or more semi-annual debt service payments shall be evidenced by the Amended Bonds. Prior to the undertaking of the Refunding Program, the Controller is authorized to select the manner by which the City desires to apply the Call Rights Modification Credit to. the debt service payment(s) on the Amended Bonds, and to notify the Bond Bank, in writing, of such determination. The determination of the manner for applying the Call Rights Modification Credit shall be set forth in a schedule to be attached to the Amended Purchase Agreement (as defined herein). The Common Council of the City hereby further authorizes the Mayor, the City Clerk and/or the Controller to execute all such documents and take such actions as may be necessary or appropriate to effectuate the option selected by the Controller. SECTION VI. Authorized Denominations of Amended Bonds. Notwithstanding anything in the Original Ordinance, the Original Purchase Agreement or the Original Bonds to the contrary, the Amended Bonds shall be executed and delivered in such denominations as shall be requested by the Bond Bank. SECTION VII. The Amended Purchase Agreement. The Qualified Entity Purchase Agreement, in substantially the form attached as Exhibit A hereto and made a part hereof(the "Amended Purchase Agreement"), is hereby approved. The Mayor and the Controller of the City are each hereby authorized and directed to execute the Amended Purchase Agreement, with such changes in form or substance as the officers of the City executing the same may hereafter approve in order to best fulfill the purpose of the Transaction, and with any such approval to be conclusively evidenced by the execution thereof, and to deliver the Amended Purchase Agreement and the Amended Bonds to the Bond Bank. SECTION VIII. Offering Document / Continuing Disclosure Agreement. Use of information concerning the City in any offering materials, including a preliminary official statement, final official statement or private placement memorandum of the Bond Bank (collectively, the "Offering Document") and distributed in connection with the undertaking of the Refunding Program, is hereby authorized, ratified and approved. The Mayor, the City Clerk and the Controller of the City, or their authorized designees, are each hereby authorized and directed to have prepared and delivered to the Bond Bank, an underwriter or a purchaser any information required for such use and further to deem and determine, if necessary, those portions of the Offering Document, if any, relating to the City as near final for purposes of Rule 15c2-12 of the United States Securities and Exchange Commission, as amended (the "SEC Rule"). Further, if necessary, the Mayor and the Controller of the City, or their authorized designees, are each hereby authorized and directed to execute a continuing disclosure agreement, in a form and substance acceptable to the Mayor and the Controller of the City, in order to allow any underwriter of the Refunding Bond Bank Bonds to comply with the SEC Rule if necessary. SECTION IX. Further Actions. The Mayor, the City Clerk and the Controller are each hereby authorized and directed, for and on behalf of the City, to execute, attest and seal all such documents, instruments, certificates, closing papers and other papers and do all such acts and things as may be necessary, desirable or appropriate to effect the Transaction and the Refunding Program and to carry out the purposes of this Supplemental Ordinance and the execution and delivery of the Amended Bonds in accordance with the Ordinance, including, but not limited to, the execution of any certificates, purchase agreements, continuing disclosure agreements or other documents necessary to effect the Transaction and the Refunding Program, and any and all actions, documents, agreements and certificates heretofore taken or executed in connection with the Transaction and the Refunding Program or this Supplemental Ordinance, be, and hereby are, ratified and approved. SECTION X. Construction with Other Ordinances. This Supplemental Ordinance is hereby intended to amend and supplement the Original Ordinance, and to the extent of any inconsistencies or conflicts, if any, between any provision or provisions of this Supplemental Ordinance and the Original Ordinance, the provisions of this Supplemental Ordinance shall be controlling and binding. All ordinances or parts of ordinances, except the Original Ordinance as 3 supplemented and amended by this Supplemental Ordinance, in conflict with the Ordinance are hereby repealed. Unless the context otherwise requires and except as supplemented herein, any references in the Original Ordinance to the Original Bonds shall mean the Amended Bonds and any accounts created and maintained by the City for the benefit of holders of the Original Bonds shall now be maintained, and the funds therein shall now be held, for the benefit of the holders of the Amended Bonds. SECTION XI. Effective Date. This Ordinance shall be in full force and effect from and after its passage by the Common Council and approval y the Mayor. Tim Scotf,'Council President South Bend Common Council Attest: Kar emah N. Fowler, City Clerk Office of the City Clerk Presented by me, the undersignedlerk of the City of South Bend, to the Mayor of the City of South Bend, Indiana on the 02) day ofly , 2019, at ,-' o'clock 1 . m. J eemah N. FovJler, ity Clerk Office of the City Clerk Approved and signed by me on the ,254-1-day of -Ili , 2019, at 3 o'clock f .m. Pete But" tigieg, Ma / City of South Bend, Indiana 1st READING I' vNC2I51 I PUBLIC HEARING 7/as/aoi 9 ti rd READING NOT APPROVED 47/22/9415 REFERRED PASSED toJo C3) 4