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HomeMy WebLinkAboutMunicipal Waterworks Revenue Bonds 1 ORDINANCE No. 8318-92 Passed by the Common Council of the City of South Bend, Indiana. November 23, 92 '9 Attest: 't""`"`�" City Clerk IRENE K. GAMMON Attest: President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana— November 24, 92 i9 City Clerk IRENE K. GAMMON Approved and signed by me `� 19 a - z° Mayor X fTr , � a r 3 r.: x.11.:':�► �1 ORDINANCE NO. ?3/1- 9 a AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE ACQUISITION AND CONSTRUCTION OF EXTENSIONS, ADDITIONS AND IMPROVEMENTS TO THE MUNICIPAL WATERWORKS OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE ISSUANCE OF REVENUE BONDS TO PROVIDE FOR THE COSTS THEREOF, AND AUTHORIZING THE COLLECTION, SEGREGATION AND DISTRIBUTION OF THE REVENUES OF SUCH WATERWORKS AND OTHER RELATED MATTERS STATEMENT OF PURPOSE AND INTENT: The City of South Bend, Indiana ("City") , is the owner of and operates an unencumbered waterworks system (the "Waterworks") by and through its Board of Waterworks (the "Board") furnishing the public water supply to the City and its inhabitants pursuant to the provisions of IC 8-1.5, as amended (the "Act") . The Board, at a meeting on November 4, 1992, adopted Resolution No. 1992-10, by which the Board has represented to the Common Council of the City (the "Common Council") and the Common Council has determined that certain extensions, additions and improvements to the Waterworks as described herein, are necessary in order to serve adequately and protect and promote the public health, welfare and property of the inhabitants of the City. Acting on the direction and on the behalf of the Board, engineers employed by the City (the "Engineers") have recommended the extensions, additions and improvements to the Waterworks and have prepared and filed preliminary descriptions, specifications and estimates of the cost of the necessary additions, improvements and extensions to the Waterworks (the "Project") . The Common Council now finds that the Project, as identified in the aforementioned preliminary descriptions and estimates, is necessary for the benefit of the Waterworks and the City and that the estimates prepared and delivered by the Engineers with respect to the cost of construction of the Project, including all incidental and other authorized expenses relating thereto, including the allocable portion of the costs of issuance of bonds on account thereof, will be in the approximate amount of Five Million One Hundred Thousand and 00/100 Dollars ($5, 100, 000.00) . The Common Council further finds that the total cost of the Project cannot be otherwise provided for out of funds of the Waterworks currently available or reasonably anticipated to be available prior to the completion of the Project and that, in order to obtain funds to pay for a portion of the costs of the Project, it will be necessary to issue and sell waterworks revenue bonds, payable solely out of the net revenues of the Waterworks, as hereinafter defined, and not constituting a general obligation of the City. The Common Council desires to authorize issuance of waterworks revenue bonds to finance a portion of the costs of construction of the Project pursuant to the Act and sell such revenue bonds pursuant to the provisions of the Act, subject to and dependent upon the terms and conditions hereinafter set forth. The Common Council recognizes that certain expenditures in connection with the Project and issuance of the Bonds will be incurred by the City and the Board prior to the issuance and delivery of Bonds to finance the Project and the Common Council desires to establish its intention to reimburse such expenditures as may be incurred prior to the issuance of such bonds pursuant to IC 5-1-14-6. NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS: Section 1. Acquisition and Construction of the Project. The City, being the owner of and engaged in operating the Waterworks, hereby orders, authorizes, and directs the Board to acquire any and all necessary property and to proceed with the construction of the Project, pursuant to the Act and in accordance with the plans, specifications, descriptions and estimates heretofore or hereafter prepared at the direction of and filed with the Board prepared by the Engineers or other consulting engineers employed by the City for this purpose and filed with the Board, which are hereby adopted and approved and, by reference, incorporated fully in this Ordinance, and to finance a portion of the costs of the Project through the issuance of waterworks revenue bonds pursuant to and in the manner described by the Act and this Ordinance, which revenue bonds shall be payable solely out of the revenues of the Waterworks in accordance with the Act and this Ordinance. The actions of the Board in connection with the acquisition of any and all necessary property and the construction and financing of the Project are hereby authorized, approved, ratified and confirmed. Where used in this Ordinance, the term "City" shall be construed also to include any department, board (including the Board) , commission, officer, or officers of the City or of any such department, board, or commission. The term "Waterworks, " "waterworks, " "works, " "water system, " "system, " and "waterworks system" and similar terms used in this Ordinance shall be construed to mean and include the existing structures and property of the Waterworks owned by the City and all extensions, additions, and improvements thereto and replacements thereof, now or subsequently constructed or acquired. Section 2. Description of the Project. The Project shall be constructed, installed, and equipped in accordance with the plans provided by the Engineers and the Department of Waterworks. The Project shall consist of the following: relocation of the main office of the Waterworks, improvements to the filtration plant, existing well fields and the distribution system, renovation and replacement, if necessary, of valves throughout the City, supervisory control improvements to the Waterworks system consisting of computerization of system control mechanisms, additions to and renovations of the Olive Street 2 t , • T p Garage, rehabilitation of existing water tanks and repairs to the reservoir. Section 3. Project Subject to Certain Conditions. The City, acting by and through the Board, shall proceed with the construction, installation, and equipping of the Project, and the proper officers of the City and the Board are hereby authorized and directed to carry out the purposes of this Ordinance and to enter into all contracts necessary for such purpose in conformity with and subject to the provisions of the Act and this Ordinance, subject, however, to the condition that the principal of and interest on the revenue bonds issued to finance in part the Project shall be paid solely and exclusively from the revenues of the Waterworks pursuant to the Act and this Ordinance, and shall not constitute a general obligation of the City. Section 4. The Bonds. In accordance with the Act and for the purpose of providing funds with which to pay a portion of the costs of the Project, together with authorized expenses relating thereto, including the costs of issuance of such bonds the City shall issue and sell its waterworks revenue bonds pursuant to the provisions of the Act and this Ordinance, which bonds shall be payable solely from the Waterworks Sinking Fund created hereinbelow (the "Sinking Fund") to be provided from the Net Revenues (herein defined as the gross revenues of the Waterworks of the City remaining after the payment of the reasonable expenses of operation, repair and maintenance) of the Waterworks of the City. The bonds authorized by this Ordinance shall be designated as "City of South Bend, Indiana, Waterworks Revenue Bonds of 1993" (the "Bonds") , shall be issued in the principal amount not to exceed Five Million One Hundred Thousand and 00/100 Dollars ($5, 100, 000. 00) , shall be issued in the denominations of Five Thousand and 00/100 Dollars ($5, 000.00) and any integral multiple thereof not exceeding the aggregate principal amount of the Bonds maturing in any one year, shall be numbered consecutively from 93R-1 upward, and shall bear interest at a rate or rates not exceeding ten percent (10%) . (The exact rate or rates to be determined by bidding) . Interest on the Bonds shall be payable semi-annually on January 1 and July 1 of each year beginning on July 1, 1993 (each an "Interest Payment Date") , and such interest shall be calculated on the basis of twelve (12) thirty (30) -day months for a three hundred and sixty (360) -day year. The Bonds shall mature serially on January 1, in such years, in any case not later than January 1, 2008, and in such annual principal amounts as may be determined by the Board subject to the approval of the Common Council, with such determination evidenced by a resolution of the Board and such approval evidenced by an ordinance of the Common Council, provided, that the terms and conditions of such approval and determination shall be in all cases governed by and consistent with the provisions of this Ordinance. 3 i 1 1 .r i t The Bonds shall bear an original issue date which shall be the first day of the month in which the Bonds are delivered to the purchaser or purchasers thereof, and each Bond shall also bear the date of its authentication. Any Bond authenticated on or before June 15, 1993, shall pay interest from its original issue date. Any Bond authenticated thereafter shall pay interest from the Interest Payment Date next preceding the date of authentication of such Bond to which interest thereon has been paid or duly provided for, unless such Bond is authenticated after the fifteenth (15th) day of the month immediately preceding an Interest Payment Date and on or before such Interest Payment Date, in which case interest thereon shall be paid from such Interest Payment Date. Principal of and redemption premium, if any, on the Bonds shall be payable at the office of the Paying Agent, as defined and described herein. All payments of interest on the Bonds shall be paid by check or draft mailed or delivered one business day prior to such payment date by the Paying Agent to the registered owner thereof at the address as it appears on the registration books kept by the Registrar, as defined and described herein, as of the fifteenth (15th) day of the month immediately preceding the Interest Payment Date or at such other address as may be provided to the Paying Agent in writing by such registered owner. All payments of the Bonds shall be made in any coin or currency of the United States of America which, on the dates of such payments, shall be legal tender for the payment of public and private debts. Section 5. Registrar and Paying Agent. A registrar and a paying agent for the Bonds (the "Registrar" and the "Paying Agent") shall be appointed by the Controller and approved by the Board. The Controller is hereby authorized and directed to formulate and distribute a request for proposals with regard to the services of registrar and paying agent. The Registrar and Paying Agent shall be charged with and shall by appropriate agreement undertake the performance of all of the duties and responsibilities customarily associated with each such position, including without limitation, the authentication of the Bonds. The Controller is further authorized and directed to enter into such agreements and understandings with the Registrar and Paying Agent as will enable and facilitate the performance of its duties and responsibilities, and is authorized and directed to pay such fees as the Registrar and Paying Agent may reasonably charge for its services in such capacity, with such fees to be paid from the Bond and Interest Account as described in this Ordinance. The Registrar and Paying Agent may at any time resign as Registrar and Paying Agent upon giving thirty (30) days' notice in writing to the City and by first-class mail to each registered owner of the Bonds then outstanding, and such resignation will take effect at the end of such thirty (30) days or upon the earlier appointment of a successor Registrar and Paying Agent by the City. Any such notice to the City may be served personally or sent by 4 T � Y r j • l c registered mail. The Registrar and Paying Agent may also 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 Bonds then outstanding by first-class mail of the removal of the Registrar and Paying Agent. Notices to registered owners of the Bonds shall be deemed to be given when mailed by first-class mail to the addresses of such registered owners as they appear on the registration books kept by the Registrar. Any predecessor Registrar and Paying Agent shall deliver all of the Bonds and cash in its possession with respect thereto, together with the registration books, to the successor Registrar and Paying Agent. The Controller is hereby authorized to act on behalf of the City with regard to any of the aforementioned actions of the City relating to the resignation or removal of the Registrar and Paying Agent and appointment of a successor Registrar and Paying Agent. Section 6. Transfer, Exchange, and Non-Presentment of Bonds. Each Bond shall be transferable or exchangeable only on the books of the City maintained for such purpose at the office of the Registrar, by the registered owner thereof in person, or by his or her attorney duly authorized in writing, upon surrender of such Bond together with a written instrument of transfer or exchange satisfactory to the Registrar duly executed by the registered owner or his or her attorney duly authorized in writing, and thereupon a new fully registered Bond or Bonds in the same aggregate principal amount and of the same maturity shall be executed and delivered in the name of the transferee or transferees or the registered owner, as the case may be, in exchange therefor. Each Bond may be transferred or exchanged without cost to the registered owner or his or her attorney duly authorized in writing, except for any tax or other governmental charge which may be required to be paid with respect to such transfer or exchange. The Registrar shall not be obligated to make any transfer or exchange of any Bond (i) during the fifteen (15) days immediately preceding an Interest Payment Date, (ii) during the fifteen (15) days immediately preceding the mailing of a notice of redemption of such Bond to be redeemed, or (iii) after the mailing of notice calling such Bond for redemption. The City, the Registrar and the Paying Agent may treat and consider the person in whose name any Bond is registered as the absolute owner thereof for all purposes including the purpose of receiving payment of, or on account of, the principal thereof, and redemption premium, if any, and interest thereon. In the event any Bond is mutilated, lost, stolen or destroyed, the City may cause to be executed and the Registrar may authenticate a new Bond of like date, maturity, and denomination as the mutilated, lost, stolen or destroyed Bond, which new Bond shall be marked in a manner to distinguish it from the Bond for which it was issued; provided, that in the case of any mutilated Bond, such mutilated Bond shall first be surrendered to the Registrar, and in the case of any lost, stolen or destroyed Bond 5 there shall be first furnished to the Registrar evidence of such loss, theft or destruction satisfactory to the City and the Registrar, together with indemnity satisfactory to them. In the event that any such mutilated, lost, stolen or destroyed Bond shall have matured or been called for redemption, instead of causing to be issued a duplicate Bond, the Registrar and Paying Agent may pay the same upon surrender of the mutilated Bond or upon satisfactory indemnification and proof of loss, theft or destruction in the case of a lost, stolen or destroyed Bond. The City and the Registrar and Paying Agent may charge the owner of any such Bond with their reasonable fees and expenses in connection with the above. Every substitute Bond issued by reason of any Bond being lost, stolen or destroyed shall, with respect to such Bond, constitute a substitute contractual obligation of the City pursuant to this Ordinance, whether or not the lost, stolen or destroyed Bond shall be found at any time, and shall be entitled to all the benefits of this Ordinance, equally and proportionately with any and all other Bonds duly issued hereunder. In the event that any Bond is not presented for payment or redemption on the date established therefor, the City may deposit in trust with the Paying Agent an amount sufficient to pay such Bond or the redemption price thereof, as appropriate, and thereafter the owner of such Bond shall look only to the funds so deposited in trust with the Paying Agent for payment and the City shall have no further obligation or liability with respect thereto. Section 7. Optional Redemption of the Bonds. The Bonds maturing on or after January 1, 2004, shall be redeemable at the option of the City, in whole or in part, on January 1, 2003, or at any time thereafter, in inverse order of maturity, and by lot within any such maturity or maturities by the Registrar, at a redemption price expressed as a percentage of the principal amount of each Bond to be redeemed in accordance with the following schedule, plus accrued interest to the redemption date: Redemption Period (Both Dates Inclusive) Redemption Price January 1, 2003 through December 31, 2003 102% January 1, 2004 through December 31, 2004 101% January 1, 2005 and thereafter prior to maturity 100% Official notice of such redemption shall be mailed by the Registrar and Paying Agent by certified or registered mail at least thirty (30) days and not more than sixty (60) days prior to the scheduled redemption date to each of the registered owners of the Bonds called for redemption (unless waived by any such registered owner) at the address shown on the registration books of the Registrar and Paying Agent, or at such other address as is furnished in writing by such registered owner to the Registrar; provided, however, that failure to give such notice by mailing, or any defect therein, with respect to any Bond shall not affect the validity of the 6 i o proceedings for the redemption of any other Bond. The notice shall specify the redemption price, the date and place of redemption, and the registration numbers (and, in case of partial redemption, the respective principal amounts) of the Bonds called for redemption. The place of redemption may be at the office of the Registrar and Paying Agent or as otherwise determined by the City. Interest on the Bonds (or portions thereof) so called for redemption shall cease to accrue on the redemption date fixed in such notice, if sufficient funds are available at the place of redemption to pay the redemption price on the redemption date and when such Bonds (or portions thereof) are presented for payment. Any Bond redeemed in part may be exchanged for a Bond or Bonds of the same maturity in authorized denominations equal to the remaining principal amount thereof. At the time of payment of the principal of, premium, if any, and interest on any Bonds called for redemption, such Bonds shall be surrendered for cancellation. In addition to the foregoing notice, the City may also direct that further notice of redemption of the Bonds be given, including without limitation and at the option of the City, notice described in paragraph (a) below given by the Registrar and Paying Agent to the parties described in paragraphs (b) and (c) below. No defect in any such further notice and no failure to give all or any portion of any such further notice shall in any manner defeat the effectiveness of any call for redemption of Bonds so long as notice thereof is given as prescribed above. (a) If so directed by the City, each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (i) the CUSIP numbers of all Bonds being redeemed; (ii) the date of issue of the Bonds as originally issued; (iii) the rate of interest borne by each Bond being redeemed; (iv) the maturity date of each Bond being redeemed; and (v) any other descriptive information needed to identify accurately the Bonds being redeemed. (b) If so directed by the City, each further notice of redemption shall be sent at least thirty-five (35) days before the redemption date by registered or certified mail or overnight delivery service to all registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the Bonds (such depositories now being Depository Trust Company of New York, New York, Midwest Securities Trust Company of Chicago, Illinois, Pacific Securities Depository Trust Company of San Francisco, California, and Philadelphia Depository Trust Company of Philadelphia, Pennsylvania) and to one or more national information services that disseminate notices of redemption of obligations such as the Bonds (such as 7 t Financial Information, Inc. 's Financial Daily Called Bond Service, Kenny Information Service's Called Bond Service, Moody's Municipal and Government News Report, and Standard & Poor's Called Bond Record) . (c) If so directed by the City, each such further notice shall be published one time in The Bond Buyer of New York, New York, or, if the Registrar believes such publication is impractical or unlikely to reach a substantial number of the holders of the Bonds, in some other financial newspaper or journal which regularly carries notices of redemption of other obligations similar to the Bonds, with any such publication to be made at least thirty (30) days prior to the date fixed for redemption. Upon the payment of the redemption price of the Bonds (or portions thereof) being redeemed and, if so directed by the City, each check or other transfer of funds issued for such purpose shall bear the CUSIP number identifying, by issue and maturity, the Bonds (or portions thereof) being redeemed with the proceeds of such check or other transfer. Section 8. Execution and Authentication of the Bonds. The Bonds shall be executed in the name of the City by the manual or facsimile signature of the Mayor of the City, countersigned by the manual or facsimile signature of the Controller of the City and shall be attested by the manual or facsimile signature of the Clerk of the City, with the seal of the City or a facsimile thereof to be affixed to each of the Bonds. The Bonds shall be authenticated by the manual signature of the Registrar, and no Bond shall be valid or become obligatory for any purpose until the certificate of authentication thereon has been so executed. In case any official whose signature appears on any Bond shall cease to be such_ official before the delivery of such Bond, the signature of such official shall nevertheless be valid and sufficient for all purposes, the same as if such official had been in office at the time of such delivery. Subject to the provisions of this Ordinance regarding the registration of the Bonds, the Bonds shall be fully negotiable instruments under the laws of the State of Indiana. Section 9. Form of the Bonds. The form and tenor of the Bonds shall be substantially as set forth in Appendix A, attached hereto and incorporated herein as if set forth at this place (with all blanks to be properly completed prior to the preparation of the Bonds) . 8 • t r 1 I • • Section 10. Sale of the Bonds. The Bonds shall be sold at public sale. In no event shall the Bonds be sold at a purchase price of less than ninety-seven percent (97%) of the par value of the Bonds, plus accrued interest thereon, if any, to the date of delivery. The Bonds shall be offered and sold pursuant to an Official Statement with respect to the Bonds (the "Official Statement") , to be made available and distributed in such manner, at such times, for such periods and in such number of copies as may be required pursuant to Rule 15c2-12 promulgated by the United States Securities and Exchange Commission (the "Rule") and any and all applicable rules and regulations of the Municipal Securities Rulemaking Board. The Common Council hereby authorizes the Board (a) on behalf of the City, to designate the Official Statement a "Final Official Statement" for purposes of the Rule, and (b) to enter into such agreements or arrangements as may be necessary or advisable in order to provide for the distribution of a sufficient number of copies of the Official Statement under the Rule; and (c) to employ the firm of Municipal Consultants to serve the City as financial advisor with respect to the Bonds and in connection with the preparation of the Official Statement, all on such terms as may be mutually acceptable to the parties. Prior to the public sale of the Bonds, the Controller shall conduct the sale of the Bonds by publication of either a bond sale notice pursuant to the provisions of paragraph (a) hereof, or a notice of intent to sell bonds pursuant to paragraph (b) hereof. (a) A bond sale notice shall be published two (2) times, at least one (1) week apart, with the first publication made at least fifteen (15) days before the date of such sale and the second publication made at least three (3) days before the date of the sale in the South Bend Tribune and the Tri-County News both published in the County of St. Joseph, Indiana, and the Indianapolis Commercial, a newspaper published in Indianapolis, Indiana, or such other newspapers as may be required pursuant to the Act and Indiana Code 5-1-11. The notice shall state the time and date of sale. (b) A notice of intent to sell bonds shall be published once each week for two weeks in the South Bend Tribune and the Tri-County News, both published in the County of St. Joseph, Indiana, and in the Indianapolis Commercial published in the City of Indianapolis, Indiana, or such other newspapers as may be required pursuant to the Act and Indiana Code 5-1-11 and in such other publications, if any, deemed appropriate in the discretion of the Controller. The notice shall 9 T I , f Y state that any person interested in submitting a bid for the Bonds may furnish in writing, at the address set forth in the notice, the person's name, address and telephone number, and that any such person may also furnish a telex number. The notice must also state the time within which the name, address and telephone number must be furnished, which must not be less than seven (7) days after the last publication of the notice. Any notice, whether a bond sale notice or a notice of intent to sell bonds, shall state further the purpose for which the Bonds are being issued, the total amount, maturities, and denominations thereof, the maximum rate of interest thereon and any limitations as to the number of interest rates and the setting of such rates, the terms and conditions upon which bids will be received and the sale made, and such other information as the Controller and the attorneys employed by the City or by the Board shall deem necessary or advisable. Such notice shall provide, among other things, that each bid shall be accompanied by a certified or cashier's check in the amount equal to one percent (1%) of the principal amount of the Bonds to guarantee performance on the part of the bidder, and that in the event the successful bidder shall fail or refuse to accept delivery of and pay for the Bonds as soon as the Bonds are ready for delivery, or at the time fixed in the notice, then such check and the proceeds thereof shall become the property of the City and shall be considered as the City's liquidated damages on account of such default. All bids for the Bonds shall be sealed and shall be presented to the Controller at the office of the Controller. Bidders for the Bonds shall be required to name the rate or rates of interest which the Bonds are to bear, which rate or rates shall not exceed ten percent (10%) . Such interest rate or rates shall be in multiples of one-eighth (1/8) or one-twentieth (1/20) of one percent (1. 00%) . Bids specifying more than one interest rate shall also specify the amount and maturities of the Bonds bearing each rate. All Bonds maturing on the same date shall bear the same interest rate. The Controller shall award the Bonds to the best bidder who has submitted a bid in accordance with the terms of this Ordinance and the notice. The best bidder will be the one who offers the lowest interest cost to the City, to be determined by computing the total interest on all of the Bonds from the date thereof to their respective maturities and deducting therefrom the premium bid, if any, or adding thereto the amount of any discount. No bid for less than all of the Bonds or for less than ninety- seven percent (97%) of the par value of the Bonds, plus accrued interest to the date of delivery, shall be considered. The City shall have the right to reject any and all bids. In the event an acceptable bid is not received on the date fixed in the notice, the Controller shall be authorized to continue the sale from day to day 10 T t 1 t for' a period of not to exceed thirty (30) days without readvertisement, subject to the requirements of Indiana law. Prior to the delivery of the Bonds, the Controller, subject to the direction of the Board, (i) shall be authorized to investigate and to obtain insurance, other forms of credit enhancement and/or credit ratings on the Bonds, and (ii) shall obtain a legal opinion as to the validity of the Bonds from Baker & Daniels, South Bend, Indiana, bond counsel for the City with respect to the Bonds, with such opinion to be furnished to the purchaser or purchasers of the Bonds at the expense of the City. The costs of obtaining any such insurance, other credit enhancement and/or credit ratings, together with bond counsel's fee in preparing and delivering such opinion and in the performance of related services in connection with the issuance, sale and delivery of the Bonds, shall be considered as a part of the costs of issuance of the Bonds and shall be paid out of the proceeds of the sale of the Bonds. Section 11. Authorization to Sell and Deliver a Lesser Amount of the Bonds. In the event it shall be hereafter determined that it is not necessary to issue all of the Bonds authorized by this Ordinance, the Controller shall be authorized to sell and deliver a lesser amount of Bonds than herein authorized in such maturities as the Controller and the Board may determine. Section 12. Issuance and Delivery of the Bonds. The Controller is hereby authorized and directed to have the Bonds prepared, and the Mayor, Controller and the Clerk of the City (the "Clerk") are each hereby authorized and directed to execute or cause the execution of the Bonds in the form and manner herein provided. The Controller is hereby authorized and directed to deliver the Bonds to the Treasurer of St. Joseph County, ex officio treasurer of the City (the "Treasurer") , and shall take his receipt therefor, and upon the consummation of the sale of the Bonds, the Controller shall certify to the Treasurer the amount which the purchaser or purchasers of the Bonds is or are to pay for the Bonds together with the name and address of the purchaser or purchasers; thereupon, the Treasurer shall be authorized to receive from the purchaser or purchasers the amount so certified from the Controller and to deliver the Bonds to the purchaser or purchasers thereof upon compliance with the requirements established hereunder and under the Act for the sale thereof, and to take the receipt of the purchaser or purchasers for the Bonds. The amount to be certified by the Controller and collected by the Treasurer shall be the full amount which the respective purchaser or purchasers have agreed to pay therefor, which shall be not less than the par, or percentage of par value of the Bonds required to be paid pursuant hereto, plus accrued interest thereon to the date of delivery. If the Treasurer is not available, then the Controller shall deliver the Bonds to the purchaser or purchasers and deliver the proceeds to the Treasurer. The Controller and the Treasurer shall then report the 11 { I r ' r r J r � proceedings to the Common Council. The proceeds derived from the sale of the Bonds shall be and are hereby set aside for the application to the costs of the Project, together with the expenses necessarily incurred in connection therewith, including the expenses incurred in the issuance of the Bonds. Section 13. Security and Sources of Payment for the Bonds. The Bonds, when fully paid for and delivered to the purchaser or purchasers thereof, as to both principal and interest and any bonds hereafter issued on equal parity with the Bonds, shall be the valid and binding special revenue obligations of the City, payable from and secured by an irrevocable pledge of and constituting a charge upon all of the Net Revenues of the Waterworks including all extensions, additions and improvements thereto, and replacements thereof made pursuant to this Ordinance, or subsequently. The proceeds derived from the sale of the Bonds shall be and are hereby set aside for the purpose of the payment of the cost of acquisition, construction and installation of the Project and the expenses necessarily in connection therewith, including the expenses incurred in connection with the issuance and sale of the Bonds. The proper offices of the City are hereby directed to draw all proper and necessary warrants and to do all acts and things which may be necessary to carry out the provisions of the Ordinance. Section 14. Disposition of Proceeds of the Bonds; Waterworks Construction Account. The proceeds from the sale of the Bonds shall be deposited and applied as follows: (a) The accrued interest and premium received at the time of the delivery of the Bonds, if any, shall be deposited in the Bond and Interest Account, as defined and described herein. (b) A portion of the proceeds from the sale of the Bonds may be deposited into the Debt Service Reserve Account defined and described hereinbelow, which amount shall be determined by the Board and approved by the Common Council in the same manner as provided for to determine the final principal amounts of the Bonds set forth in Section 4 herein. In no event shall the amount of proceeds of the Bonds deposited in the Debt Service Reserve Account exceed the Reserve Requirement established for the Bonds in Section 15 herein. (c) The remaining proceeds from the sale of the Bonds shall be deposited in a bank or banks which are legally qualified depositories for the funds of the City, in a special account or accounts to be designated as "City of South Bend, Waterworks Construction Account" (hereafter called the "Construction Account") , and shall be in the custody and control of the Board. Each of such 12 i I I • 1 • 1 special accounts shall be deposited, secured, and held or invested in accordance with the laws of the State of Indiana relating to the depositing, securing, and holding or investing of public funds, including particularly applicable provisions of Indiana Code 5-13-9, as amended. Any interest or income derived from any such investments shall become a part of the moneys in the Fund or Account so invested. Amounts in the Construction Account shall be expended only for the purpose of paying the costs of the Project herein authorized, together with the incidental expenses incurred in connection therewith and the costs of the issuance of the Bonds. Any balance or balances remaining unexpended in the Construction Account after completion of the Project, which are not required to meet unpaid obligations incurred in connection with the construction, installation, and equipping of the Project, shall be used solely for one or more of the purposes permitted under the provisions of IC 5-1-13, as amended. Section 15. Segregation and Application of Revenues; Accounts of Waterworks. The income and revenues of the Waterworks, together with the income and revenues of all extensions, additions, improvements thereto, and replacements thereof made pursuant to this Ordinance, or subsequently, shall be set aside into separate and special funds and accounts created and established herein below, to be used and applied in the maintenance and operation thereof, in establishing an improvement fund, and payment of the principal of all bonds which by their terms are payable from the Net Revenues of the Waterworks, together with the interest thereon. (a) Revenue Fund. All income and revenues of the Waterworks shall be paid into the Revenue Fund hereby created and established (the "Revenue Fund") , which fund shall be maintained separate and apart from all other bank accounts of the City. (b) Operation and Maintenance Fund. There shall be credited on the last day of each calendar month a sufficient amount of the revenues of the Waterworks so that the balance in the Operation and Maintenance Fund hereby created and established (the "Operation and Maintenance 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 the Operation and Maintenance Fund shall be used for the payment of the reasonable and proper operation, repair and maintenance expenses of the Waterworks on a day-to-day basis, but none of the moneys in such Operation and Maintenance Fund shall be used for depreciation, replacements, improvements, extensions or 13 r • ' additions. Any balance in said 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 Waterworks. (c) Waterworks Sinking Fund. There shall be set aside and deposited in the Waterworks Sinking Fund hereby created and established (the "Sinking Fund") for the payment of the principal of and interest on revenue bonds which by their terms are payable from the Net Revenues of the Waterworks, and for the payment of any fiscal agency charges in connection with the payment of bonds and interest, as available, and as hereinafter provided, a sufficient amount of the Net Revenues of said Waterworks to meet the requirements of the Bond and Interest Account and of the Debt Service Reserve Account described herein in said Sinking Fund account. Such payments shall continue until the balance in the Bond and Interest Account, plus the balance in the Debt Service Reserve Account hereinafter described, equals the amount needed to redeem all of the then outstanding bonds. (1) Bond 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 hereby created and established (the "Bond and Interest Account") an amount of the Net Revenues equal to the sum of one-sixth (1/6) of the principal and one-twelfth (1/12) 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 amount necessary to pay the bank fiscal agency charges for paying principal 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. 14 (2) Debt Service Reserve Account. The City shall deposit, if necessary, as a reserve for the Bonds into the Debt Service Reserve Account hereby created and established (the "Debt Service Reserve Account") either revenues of the Waterworks on a monthly basis or funds of the Waterworks now on hand so that the reserve equals the reserve requirement for the Bonds (the "Reserve Requirement") . The Reserve Requirement for the Bonds shall be equal to the lesser of (i) the maximum annual debt service on the Bonds, or (ii) one hundred twenty-five percent (125%) of the average annual principal and interest payable on the Bonds, or (iii) ten percent (10%) of the proceeds of the Bonds (plus a "minor portion" thereof defined and permitted pursuant to the Internal Revenue Code of 1986 as amended and as in effect on the date of delivery of the Bonds (the "Code") ) . If the City deposits revenues into the Debt Service Reserve Account on a monthly basis, the amount of the monthly deposit shall be sufficient to accumulate the Reserve Requirement within five (5) years from the date of delivery of the Bonds. The Debt Service Reserve Account shall constitute the margin for safety and as protection against default in the payment of principal of and interest on the Bonds and the moneys in the Reserve Account shall be used to pay current principal and interest on the Bonds to the extent that moneys in the Bond and Interest Account are insufficient for that purpose. Any deficiency in the balance maintained in the Debt Service Reserve Account shall be promptly made up from the next available Net Revenues remaining after credits into the Bond and Interest Account. In the event moneys in the Debt Service Reserve Account are transferred to the Bond and Interest Account to pay principal and interest on the Bonds, then such depletion of the balance in the Debt Service Reserve Account shall be made up from the next available Net Revenues after the credits into the Bond and Interest Account hereinabove provided for. Any moneys in the Debt Service Reserve Account in excess of the Reserve Requirement may be used for the prepayment of installments of principal on the then outstanding Bonds which are then callable or prepayable, or for the purchase of outstanding Bonds or installments of principal 15 t f y 3 y i y 3 ` • of the Bonds at a price not exceeding par and accrued interest, or may be transferred to the Waterworks Improvement Fund as provided below. However, in no event shall moneys in excess of the Reserve Requirement be held in the Debt Service Reserve Account. (d) Waterworks Improvement Fund. After meeting the requirements of the Operation and Maintenance Fund and the Sinking Fund, any excess revenues may be transferred or credited to the Waterworks Improvement Fund hereby created and established (the "Waterworks Improvement Fund") , and said Fund shall be used for improvements, replacements, additions and extensions of the Waterworks. Moneys in the Waterworks Improvement Fund shall be transferred to the Sinking Fund if necessary to prevent a default in the payment of principal 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 Waterworks. (e) Investment of Funds. The Sinking Fund 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 Waterworks 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 all other bank accounts of the City and apart from the Sinking Fund bank account or 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 16. Proper Books of Records and Accounts. The City shall keep proper books of records and accounts, separate from all of its other records and accounts, in which complete and correct entries shall be made showing all revenues collected from the Waterworks and deposited in the special accounts established or continued pursuant to this Ordinance and all disbursements made therefrom and all transactions relating to the Waterworks. There shall be prepared and furnished, upon written request, to any owner 16 I I I I J of the Bonds at the time then outstanding, not more than ninety (90) days after the close of each fiscal year of the Waterworks, complete operating and income statements of the Waterworks, in reasonable detail covering such fiscal year, which statements shall be certified by the Controller, a certified public accountant retained for the purpose of making an accounting study of the records of the Waterworks or the State Board of Accounts. Copies of all such statements and reports shall at all times be kept on file and available for inspection in the office of the Controller. Any owner of at least five percent (5%) in aggregate principal amount of the then-outstanding Bonds shall have the right at all reasonable times to inspect the Waterworks and the records, accounts and data of the City relating thereto. Section 17. Covenant With Respect to Rates and Charges. 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 Waterworks 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 Waterworks, 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) provide adequate money for working capital; (e) provide adequate money for making extensions and replacements; and (f) provide money for the payment of any taxes that may be assessed against the Waterworks. So long as any of the Bonds are outstanding, none of the facilities and services afforded by the Waterworks shall be furnished without a reasonable and just charge being made therefor. Section 18. Issuance of Completion Bonds. If the proceeds of the Bonds, plus investment earnings thereon, are less than the cost of the Project to be financed hereunder, the City reserves the right to issue additional revenue bonds to provide the amount of the deficit and to provide for completion of the Project including the cost of issuing such additional revenue bonds (the "Completion Bonds") . Unless the context otherwise requires, any such Completion Bonds shall be deemed to be a part of the issue of the Bonds, shall be entitled to payment from the Sinking Fund established herein and shall not be required to satisfy the various requirements for additional bonds imposed pursuant to Section 19 hereof. However, as a precondition to and prior to the adoption of any ordinance authorizing the issuance of any such Completion Bonds, (i) the Engineers or any consulting engineer designated and employed by the City for such purpose shall prepare and submit to the Common Council a certificate setting forth, with respect to the Project, the total amount of work to be completed and the estimated 17 • f ' costs of the completion of such work, and (ii) the Common Council must approve and file such certificate in the office of the Clerk for public inspection. Section 19. Additional Bonds. In addition to the Completion Bonds authorized under Section 18, the City reserves the right to authorize and issue additional bonds, payable out of the revenues of the Waterworks, ranking on a parity with the Bonds authorized by this Ordinance, for the purpose of financing the cost of future additions, extensions and improvements to the Waterworks, subject to the following conditions: (a) The interest on and principal of all bonds payable from the revenues of the Waterworks 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. (b) The Net Revenues of the Waterworks in the fiscal year immediately preceding the issuance of any such bonds ranking on a parity with the bonds authorized by this Ordinance shall be not less than one hundred twenty-five percent (125%) of the maximum annual interest and principal requirements of the then outstanding bonds and the additional parity bonds proposed to be issued; or, prior to the issuance of said 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 maximum annual interest and principal requirements of the then outstanding bonds and the additional parity bonds proposed to be issued. For purposes of this subsection, the records of the Waterworks shall be analyzed and all showings 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. (d) The interest on the additional parity bonds shall be payable semiannually on the first days of January 1 and July 1 and the principal of the bonds shall be payable annually on the first day of January 1 in the years in which both principal and interest are payable. 18 For purposes of this Section 19, the records of the Waterworks shall be analyzed and all showings shall be prepared by an independent certified public accountant retained by the City for that purpose. Section 20. Additional Covenants of the City. For purposes of further safeguarding the interests of the owners of the Bonds, the City additionally covenants, represents and agrees as follows: (a) All construction contracts let by the City in connection with the Project shall be let to responsible contractors who shall be required to furnish construction bonds running to the City in an amount equal to one hundred percent (100%) of the amount of such contracts to insure the completion of such contracts in accordance with their terms, and such contractors shall be required to carry such amounts of employers' liability and public liability insurance as are required under the laws of the State of Indiana in the case of public contracts, and shall be governed in all respects by the laws of the State of Indiana relating to public contracts. (b) The Project shall be contracted for and constructed pursuant to the plans, specifications, descriptions and estimates prepared by the Engineers and constructed under the supervision of such engineers and such other consulting engineers as may be employed by the Board. All estimates for work done and materials furnished shall first be checked by the Department of Waterworks or the Engineers before being approved by the City. (c) The City, through the Board, shall at all times maintain the Waterworks in good condition and operate the Waterworks in an efficient manner and at a reasonable cost. (d) So long as any of the Bonds are outstanding, the City, through the Board, shall maintain insurance on the insurable parts of the Waterworks of a kind and in an amount such as is customarily carried by private companies engaged in a similar type of business. All insurance shall be placed with responsible insurance companies qualified to do business in the State of Indiana. Any insurance proceeds collected shall be used in replacing or repairing the property destroyed or damaged; or if not used for such purpose, shall be treated and applied as Net Revenues of the Waterworks. (e) Except as provided in Section 19 of this Ordinance, so long as any of the Bonds are outstanding, 19 F1 , ' ' no additional bonds or other obligations pledging any portion of the revenues of the Waterworks shall be authorized, executed or issued by the City except as shall be made subordinate and junior in all respects to the Bonds or unless the Bonds are defeased, redeemed and retired coincidentally with the delivery of such additional bonds or other obligations or, as provided in Section 21 hereof, funds sufficient to effect such redemption are available and set aside for such purpose at the time of issuance of such additional bonds or obligations. (f) So long as any of the Bonds are outstanding, the City and the Board shall not mortgage, pledge or otherwise encumber the Waterworks or any part thereof, except as authorized by the laws pursuant to which the Bonds are issued, and shall not sell, lease or otherwise dispose of any portion thereof except such equipment which may become worn out or obsolete, and which shall be replaced. (g) The provisions of this Ordinance shall be construed to create a trust in the proceeds of the sale of the Bonds for the uses and purposes herein set forth and, so long as any of the Bonds are outstanding, the provisions of this Ordinance shall also be construed to create a trust in the Net Revenues of the Waterworks herein directed to be set apart and paid into the Sinking Fund for the uses and purposes of such Fund as set forth in this Ordinance. (h) The provisions of this Ordinance shall constitute a contract by and between the City and the owners of the Bonds, all of the terms of which shall be enforceable at law or in equity, and after the issuance of the Bonds this Ordinance shall not be repealed or amended in any respect which would adversely affect the rights and interests of the owners of the Bonds, and the Common Council and the Board shall not adopt any law, ordinance or resolution which in any way would adversely affect the rights of such owners so long as any of the principal of or interest on the Bonds remains unpaid; provided, that the City shall have the right to amend this Ordinance, under certain circumstances, without notice to or approval by any owners of the Bonds in accordance with Section 24 of this Ordinance. The owners of the Bonds shall have all of the rights, remedies and privileges provided in the Act and under Indiana law, including without limitation the making and collection of reasonable and sufficient rates lawfully established for the use of the services and facilities of the Waterworks, the segregation of the revenues of the 20 ' Waterworks and the application of funds as provided in this Ordinance. Section 21. Defeasance of the Bonds. If, when the 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 Bonds or a portion or portions thereof for redemption shall have been given, and the whole amount of the principal of, redemption premium, if any, on and the interest due and payable on all of the Bonds then outstanding shall be paid; or (i) sufficient moneys, or (ii) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America, the principal of and the interest on which when due will provide sufficient moneys for such purpose, or (iii) time certificates of deposit fully secured as to both principal and interest by obligations of the kind described in clause (ii) above of a bank or banks, the principal of and interest on which when due will provide sufficient moneys for such purpose, shall be held in trust, and provision shall also be made for paying all fees and expenses for the redemption, then and in such event the Bonds shall no longer be deemed outstanding or entitled to the pledge of the revenues of the Waterworks. Section 22 . Tax Covenants. In order to preserve the excludability from gross income of interest on the Bonds under Section 103 of the Code, the City hereby represents, covenants and agrees as follows: (a) No person or entity or any combination thereof, other than the City or any other governmental unit within the meaning of Section 141(b) (6) and Section 150 (a) (2) of the Code ("Governmental Unit") will use proceeds of the Bonds or property financed by such proceeds of the Bonds other than as a member of the general public. No person or entity or any combination thereof other than a Governmental Unit will own property financed out of the proceeds of the Bonds or will have actual or beneficial use of such property pursuant to a lease, a management or incentive payment contract or any other type of arrangement that differentiates that person's or entity's use of such property from the use of such property by the public at large. (b) No Bond proceeds will be lent to any entity or person other than a Governmental Unit. No Bond proceeds will be transferred directly or indirectly, or be deemed transferred, to a person or entity other than a Governmental Unit in a fashion that would in substance constitute a loan of such Bond proceeds. (c) The City will not take, or cause or permit to 21 i be taken by it or by any party under its control, or fail to take or cause or permit to fail to be taken by it or by any party under its control, any action that would result in the loss of the excludability from gross income for federal income tax purposes of interest on the Bonds pursuant to Section 103 of the Code. The City further covenants that it will not make any investment or do any other act or thing during the period that any Bond is outstanding hereunder which would cause any Bond to be an "arbitrage bond" within the meaning of Section 148 of the Code and the regulations applicable thereto as in effect on the date of delivery of the Bonds. In furtherance of the foregoing, the Controller is hereby authorized to invest or to cause to be invested moneys pursuant to the provisions of this Ordinance at a restricted yield, to the extent permitted by and consistent with the provisions for such investments under the Code and to the extent necessary or advisable to preserve the excludability from gross income of interest on the Bonds for federal income tax purposes. (d) With respect to the Bonds, the Controller shall keep full, complete and accurate records of all investment income and other earnings on the amounts held in the funds and accounts created or referred to in this Ordinance. The City and the Board shall further take all actions necessary and appropriate to comply with the arbitrage rebate requirements under Section 148 of the Code to the extent applicable, including, without limitation, accounting for and making provision for the payment of any and all amounts that may be required to be paid to the United States of America from time to time pursuant to Section 148 of the Code. (e) All officers, employees and agents of the City and the Board are hereby authorized and directed to provide certifications of facts and estimates that are material to the reasonable expectations of the City as of the date that the Bonds are issued, and to make covenants on behalf of the City evidencing the City's recognition of and compliance with the covenants and commitments made herein. In particular and without limiting the foregoing, any and all appropriate officers, employees and agents of the City and the Board are authorized to certify and/or enter into covenants on behalf of the City regarding (i) the facts and circumstances and reasonable expectations of the City as of the date that the Bonds are issued and (ii) the representations and covenants made herein by the City regarding the amount and use of the proceeds of the Bonds. 22 (f) The Controller is hereby authorized to employ consultants and attorneys from time to time to advise the City with respect to the requirements under federal law for the continuing preservation of the excludability of interest on the Bonds from gross income for purposes of federal income taxation, as described in this Section 22. Section 23. Waiver of Tax Covenants. Notwithstanding any other provision of this Ordinance, any of the covenants and authorizations contained in Section 22 of this Ordinance (the "Tax Covenants") which are designed to preserve the excludability of interest on the Bonds from gross income for purposes of federal income taxation need not be complied with if the City receives an opinion of nationally recognized bond counsel to the effect that compliance with such Tax Covenant is unnecessary to preserve such excludability of interest. Section 24. Supplemental Ordinances. Without notice to or consent of the owners of the bonds herein authorized, the City may, from time to time and at any time, adopt an ordinance or ordinances supplemental hereto (which supplemental ordinance or ordinances shall thereafter form a part hereof) for any of the following purposes: (a) To cure any ambiguity or formal defect or omission in this Ordinance or in any supplemental ordinance or to make any other change authorized herein; (b) To grant to or confer upon the owners of the bonds herein authorized and any other bonds ranking on a parity with such bonds any additional benefits, rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the owners of the bonds herein authorized or to make any change which, in the judgment of the City, is not to the prejudice of the owners of the bonds herein authorized; (c) To modify, amend or supplement this Ordinance to permit the qualification of the bonds herein authorized for sale under the securities laws of the United States of America or of any of the states of the United States of America or to obtain or maintain bond insurance or other credit enhancement with respect to payments of principal of and interest on bonds herein authorized; (d) To provide for the refunding or advance refunding of the bonds herein authorized; (e) To procure a rating on the bonds herein authorized from a nationally recognized securities rating agency or agencies designated in such supplemental 23 ' ordinance if such supplemental ordinance will not adversely affect the owners of the bonds herein authorized or any other bonds ranking on a parity with such bonds; (f) To accomplish any other purpose which, in the judgment of the City, does not adversely affect the interests of the owners of the Bonds or any other bonds ranking on a parity with such bonds. This Ordinance and the rights and obligations of the City and the owners of the bonds herein authorized may be modified or amended at any time by supplemental ordinances adopted by the City with the consent of the owners of the bonds herein authorized holding sixty-six and two-thirds percent (66 2/3%) in aggregate principal amount of the outstanding bonds herein authorized (exclusive of any such bonds owned by the City) ; provided, however, that no such modification or amendment shall, without the express consent of the owners of the bonds herein authorized, reduce the interest rate or any redemption premium payable thereon, advance the earliest redemption date, extend the maturity or the times for paying interest on any bond or bonds herein authorized, permit a privilege or priority of any bond or bonds herein authorized, permit a privilege or priority of any bond or bonds herein authorized over any other bond or bonds herein authorized, create a lien securing any bonds herein authorized other than a lien ratably securing all of the outstanding bonds herein authorized, change the monetary medium in which principal and interest is payable, or reduce the aggregate principal amount of bonds required for consent required for amendment or modification of this Ordinance. Any act done pursuant to a modification or amendment so consented to shall be binding upon all the owners of the bonds herein authorized and shall not be deemed an infringement of any of the provisions of this Ordinance or of the Act, and may be done and performed as fully and as freely as if expressly permitted by the terms of this Ordinance, and, after such consent relating to such specified matters has been given, no owner shall have any right or interest to object to such action or in any manner to question the propriety thereof or to enjoin or restrain the City or any officer thereof from taking any action pursuant thereto. If the City shall desire to obtain any such consent, it shall cause the Registrar and Paying Agent to mail a notice, postage prepaid, to the respective owners of the Bonds herein authorized at their addresses appearing on the registration books of the Registrar and Paying Agent. 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 and Paying Agent for inspection by all owners of the Bonds herein authorized. The Registrar and Paying Agent shall not, however, be 24 •. ti subject to any liability to any owners of the Bonds herein authorized by reason of its failure to mail the notice described in this Section 24, and any such failure shall not affect the validity of such supplemental ordinance when consented to and approved as provided in this Section 24. Whenever, at any time within one (1) year after the date of the mailing of such notice, the City shall receive an instrument or instruments purporting to be executed by the owners of the Bonds herein authorized of not less than sixty-six and two-thirds percent (66 2/3%) in aggregate principal amount of the bonds herein authorized and then outstanding (exclusive of any such bonds owned by the City) , 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 and Paying Agent thereupon, but not otherwise, the City may adopt such supplemental ordinance in substantially such form, without liability or responsibility to any owners of the Bonds herein authorized, whether or not such owner shall have consented thereto. Upon the adoption of any supplemental ordinance pursuant to the provisions of this Section 23, this Ordinance shall be, and be deemed to be, modified and amended in accordance therewith, and the respective rights, duties and obligations under this Ordinance shall thereafter be determined, exercised and enforced hereunder, subject in all respects to such modifications and amendments. Section 25. Rates and Charges. The estimate of the rates and charges which will be needed and charged to the general classes of users or property to be served by the Waterworks in order to provide sufficient moneys to make payments of principal of and interest on the Bonds and other bonds which by their terms are payable from the revenues of the Waterworks, as described herein, along with the other payments identified in this Ordinance, is set forth in Ordinance No. 8305-92 entitled "AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND ESTABLISHING A NEW SCHEDULE OF RATES AND CHARGES FOR SERVICES RENDERED BY THE CITY OF SOUTH BEND WATER WORKS AND THE AMENDING OF CHAPTER 17, ARTICLE 4, SECTIONS 17-45, 17-46, 17-47, 17-48 OF THE SOUTH BEND MUNICIPAL CODE" adopted by the Common Council on October 12, 1992. Section 26. Payments on Holidays. 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 in which the Registrar and 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 actual date established in 25 1 1P 7 t this Ordinance, and no interest shall accrue for the period after such nominal date. Section 27. Repeal of Other Ordinances. All ordinances in conflict herewith are expressly repealed to the extent of such conflict. Section 28. Reimbursement. The Common Council hereby declares that the City and the Board reasonably expect to reimburse certain expenditures as may be incurred in connection with the Project prior to the issuance of the Bonds, with proceeds of the Bonds, and that no funds from sources other than the Bonds are, or are reasonably expected to be, reserved, allocated on a long-term basis, or otherwise set aside by the City or the Board pursuant to the budgetary or financial policies with respect to the expenditures to be reimbursed, and further the Common Council hereby establishes its intent, pursuant to Indiana Code 5-1-14-6, that the City and the Board be reimbursed for expenditures incurred prior to the issuance of the Bonds by the City in connection with the Project, from the proceeds of the Bonds. Section 29. Captions. The captions in this Ordinance are inserted only as a matter of convenience and reference, and such captions are not intended and shall not be construed to define, limit, establish, interpret or describe the scope, intent or effect of any provision of this Ordinance. Section 30. Effective Date. This Ordinance shall be in full force and effect from and after its passage and approval by the Common Council signing by the Mayor. COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA By: ' U/ Member of 6/ Common Council T agmc1 only to prcvi_ e gp. opportunity for public dI. _ i ots and CctIncl i. action on the issue., rrrompola\sthbend\waterwor.ks\bond.ord;drf;11-4-92 Filed in Clerk's Office //- 9- 92) 26 1st READING " e2.9-9Q NOV - 4i PUBLIC HEARING 3 rd READING //- .013 "9 A NOT APPROVED IRENE GAMMON REFERRED CITY CLERK,SO.BEND,IN. PASSED //- o?. 2-9 APPENDIX A TO THE BOND ORDINANCE FORM OF REGISTERED BOND (Form of Face of Bond) UNITED STATES OF AMERICA STATE OF INDIANA, COUNTY OF ST. JOSEPH CITY OF SOUTH BEND, INDIANA, WATERWORKS REVENUE BOND OF 1993 No. 93R-- Interest Maturity Rate Date Original Authentication Date Date CUSIP % 11 _ 1, 1993 Registered Owner: Principal Amount: The City of South Bend (the "City "), in St. Joseph County, State of Indiana, for value received, hereby promises to pay to the Registered Owner specified above, or registered assigns, upon surrender hereof, solely out of the special revenue fund hereinafter referred to, the Principal Amount stated above on the Maturity Date specified above (unless this bond be subject to and shall have been called for redemption prior to maturity as hereinafter provided), and to pay interest hereon until the Principal Amount is 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 an interest payment 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 June 15, 1993, 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, commencing July 1, 1993. Interest shall be calculated on the basis of twelve (12) thirty - day months for a three hundred sixty -day year. The principal of and premium, if a payable at the principal corporate , in the City of "Registrar" and the "Paying Agent "). Interest by check or draft mailed or delivered by the Registered Owner hereof at the address as registration books of the Registrar as of the ay, on this bone trust office , Indiana hereon will be Paying Agent to it appears on fifteenth day of 3 is of (the paid the the the month immediately preceding the applicable interest payment date or at such other address as is furnished to the Paying Agent in writing by such Registered Owner. All payments on this bond shall be made in any coin or currency of the United States of America which, on the dates of such payments, shall be legal tender for the payment of public and private debts. This bond and the other bonds of this issue, together with the interest payable hereon and thereon, are payable solely from and secured by an irrevocable pledge of and constitute a first charge upon all of the net revenues (defined to be gross revenues after deduction only for the payment of the reasonable expenses of operation, repair and maintenance) derived from the Waterworks of the City, including the existing works, the improvements and extensions acquired or constructed in part out of the proceeds of this bond and the issue of which it is a part, and all additions and improvements thereto and replacements thereof subsequently acquired or constructed. The City shall not be obligated to pay the principal of or interest on this bond except from the special fund, entitled the "Waterworks Sinking Fund" (heretofore created by Ordinance No. adopted , 1992, described herein below) , provided from the net revenues of such Waterworks, and neither this bond nor any of the bonds of the issue of which this bond is a part shall constitute an indebtedness of the City within the meaning of the provisions and limitations of the constitution of the State of Indiana. The City, the Registrar and the Paying Agent may deem and treat the Registered Owner hereof as the absolute owner hereof for the purpose of receiving payment of or on account of principal hereof and the interest due hereon and for all other purposes, and none of the City, the Registrar or the Paying Agent shall be affected by any notice to the contrary. This bond shall not be valid or become obligatory for any purpose or entitled to any security or benefit under the Ordinance herein described unless and until the certificate of authentication hereon shall have been executed by a duly authorized representative of the Registrar. THE TERMS AND PROVISIONS OF THIS BOND ARE CONTINUED ON THE REVERSE SIDE HEREOF AND SUCH TERMS AND PROVISIONS SHALL HAVE THE SAME EFFECT FOR ALL PURPOSES AS THOUGH FULLY SET FORTH AT THIS PLACE. The City hereby certifies, recites and declares that all acts, conditions and things required to be done precedent to and in the preparation, execution, issuance and delivery of this bond have been done and performed in regular and due form as required by law. -2- IN WITNESS WHEREOF, the City of South Bend, in St. Joseph County, State of Indiana, has caused this bond to be executed in its corporate name by the manual or facsimile signature of its Mayor, countersigned by the manual or facsimile signature of its Controller and its corporate seal to be hereunto affixed, imprinted or impressed by any means and attested by the manual or facsimile signature of its City Clerk. By: CITY OF SOUTH BEND Mayor Countersigned: Controller (Seal of the City) ATTEST: City Clerk City of South Bend, Indiana REGISTRAR'S CERTIFICATE OF AUTHENTICATION This bond is one of the City of South Bend, Indiana, Waterworks Revenue Bonds of 1993, described in the within - mentioned Ordinance. as Registrar By: Authorized Representative (Form of Reverse Side of Bond) This bond is one of an authorized issue of bonds of the City of South Bend, Indiana, of like, tenor and effect, except as to numbering, interest rates and date of maturity, in the total amount of and 00/100 Dollars ($ ) numbered from 93R -1 upward, issued for the purpose of providing funds to pay the cost of certain improvements and -3- extensions to the waterworks of the City (the "Waterworks ") and all expenses necessarily incurred in connection with the issuance of such bonds, as authorized by an ordinance adopted by the City Council of the City of South Bend on the day of November, 1992, entitled "AN ORDINANCE AUTHORIZING THE ACQUISITION AND CONSTRUCTION OF EXTENSIONS, ADDITIONS AND IMPROVEMENTS TO THE MUNICIPAL WATERWORKS OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE ISSUANCE AND SALE OF REVENUE BONDS TO PROVIDE FUNDS FOR THE PAYMENT OF THE COSTS THEREOF, AND AUTHORIZING THE COLLECTION, SEGREGATION AND DISTRIBUTION OF THE REVENUES OF SUCH WATERWORKS AND OTHER RELATED MATTERS" (the "Ordinance "), and in strict compliance with the provisions of Indiana Code, Title 8, Article 1.5, and the laws amendatory thereof and supplemental thereto (the "Act "). This bond is issuable only in fully registered form in the denomination of Five Thousand and 00 /100 Dollars ($5,000.00) or any integral multiple thereof not exceeding the aggregate principal amount of the bonds of this issue maturing in any one year. Pursuant to the provisions of the Act and the Ordinance, the principal of and interest on this bond and all other bonds of this issue and any bonds hereafter issued on a parity therewith, are equally and ratably secured by and constitute a first charge upon and are payable solely from the Waterworks Sinking Fund to be provided from the net revenues (herein defined as the gross revenues after deduction only for the payment of the reasonable expenses of operation, repair and maintenance) derived from the Waterworks, including the existing works, the improvements and extensions acquired or constructed in part out of the proceeds of this bond and the issue of which it is a part, and all additions and improvements thereto and replacements thereof subsequently constructed and acquired. This bond does not and shall not constitute an indebtedness of the City within the meaning of the provisions and limitations of the constitution of the State of Indiana, and the City is not and shall not be obligated to pay this bond or the interest thereon except from such special fund provided from such net revenues. The City of South Bend irrevocably pledges the entire net revenues of the Waterworks to the extent necessary for such purposes, to the prompt payment of the principal of and interest on the bonds authorized pursuant to the Ordinance, of which this is one, and any bonds hereafter issued on a parity herewith. The City covenants that it will to the fullest extent permitted by law cause to be fixed, maintained and collected such rates and charges for services rendered by such works as are sufficient in each year to: (a) pay all legal and other necessary expenses incident to the operation of the Waterworks, including maintenance costs, operating charges, upkeep, repairs, depreciation, and interest charges on bonds or other obligations, including leases; (b) make all required -4- deposits into the Waterworks Sinking Fund to provide for the liquidation of bonds or other obligations, including leases; (c) provide a debt service reserve for bonds or other obligations, including leases, as required by the terms of such obligations; (d) provide adequate money for working capital; (e) make all required deposits into the Waterworks Improvement Fund to provide adequate money for making extensions and replacements for the Waterworks; and (f) provide money for the payment of any taxes that may be assessed against the Waterworks. The owner of this bond shall have all of the rights, remedies and privileges provided in the Act, and under Indiana law, including the making and collecting of reasonable and sufficient rates lawfully established for the use of the services and facilities of the Waterworks, the segregation of the revenues of the Waterworks and the application of funds as provided in the Ordinance. The bonds of this issue maturing on or after January 1, 2004, are subject to redemption prior to maturity, at the option of the City, in whole or in part, on January 1, 2003, or at any time thereafter, in inverse order of maturity and by lot within any such maturity or maturities by the Registrar at a redemption price expressed as a percentage of the principal amount of each bond to be redeemed in accordance with the following schedule, plus accrued interest to the date of redemption: Redemption Period (Both Dates Inclusivej Redemption Price January 1, 2003 through December 31, 2003 102% January 1, 2004 through December 31, 2004 101% January 1, 2005 through December 31, 2005 100% Notice of any such redemption identifying the Bonds shall be sent by registered or certified mail to the Registered Owner of this bond not more than sixty (60) and not less than thirty (30) days prior to the date fixed for redemption, unless such notice is waived by the Registered Owner; provided, however, that failure to give such notice by mailing, or any defect therein, with respect to any such bond will not affect the validity of any proceedings for redemption of any other such bonds. The notice shall specify the redemption price, the date and place of redemption, and the registration numbers (and in case of partial redemption, the respective principal amounts) of the bonds called for redemption. Interest on bonds so called for redemption shall cease to accrue on the redemption date fixed in such notice, so long as sufficient funds are available at the place of redemption to pay the redemption price on the redemption date or when presented for payment. -5- Prior to the date fixed for redemption, funds shall be deposited with the Paying Agent to pay, and the Paying Agent is hereby authorized and directed to apply such funds to the payment of the bonds or portions thereof called, together with accrued interest thereon to the redemption date and any required premium. No payment shall be made by the Paying Agent upon any bond or portion thereof called for redemption until such bond shall have been delivered for payment or cancellation or the Registrar shall have received the items required by the Ordinance with respect to any mutilated, lost, stolen or destroyed bond. If this bond shall have become due and payable in accordance with its terms or this bond or a portion hereof shall have been duly called for redemption or irrevocable instructions to call this bond or a portion hereof for redemption shall be given and the whole amount of the principal and the premium, if any, and interest, so due and payable upon this bond or such portion hereof shall be paid, or (i) sufficient moneys, or (ii) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, the principal of and the interest on which when due will provide sufficient moneys for such purpose, or (iii) time certificates of deposit of a bank or banks, fully secured as to both principal and interest by obligations of the kind described in (ii) above, the principal of and interest on which when due will provide sufficient moneys for such purpose, shall be held in trust for such purpose, then and in that case this bond or such portion hereof shall no longer be deemed outstanding, entitled to the pledge of the net revenues of the Waterworks or an obligation of the City. 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 an amount sufficient to pay such bond or the redemption price, as appropriate, and thereafter the Registered Owner shall look only to the funds so deposited in trust with the Paying Agent for payment, and the City shall have no further obligation or liability with respect thereto. All bonds which have been redeemed shall be cancelled and cremated or otherwise destroyed and shall not be reissued and a counterpart of the certificate of cremation or other destruction evidencing such cremation or other destruction shall be furnished by the Registrar to the City; provided, however, that one or more new registered bonds shall be issued for the unredeemed portion of any bond without charge to the holder thereof. Subject to the provisions of the Ordinance regarding the registration of such bonds, this bond and all other bonds of the issue of which this bond is a part are fully negotiable instruments under the laws of the State of Indiana. This bond is transferable or exchangeable only on the books of the City maintained for such purpose at the principal office of the Registrar, by the Registered The Registrar or Paying Agent may at any time resign as registrar or paying agent by giving thirty (30) days' written notice to the City and by first -class mail to the registered owners of 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 or paying agent, as the case may be, by the City. Such notice to the City may be served personally or be sent by registered mail. The Registrar or Paying Agent may be removed at any time as registrar or paying agent by the City, in which event the City may appoint a successor registrar or paying agent, as the case may be. The City shall notify the registered owners of this bond, if then outstanding, by first -class mail of the removal of the Registrar or Paying Agent. Notices to registered owners of bonds shall be deemed to be given when mailed by first -class mail to the addresses of such registered owners as they appear in the registration books kept by the Registrar. In the manner provided in the Ordinance, (a) without notice to or consent of the owners of the Bonds authorized thereunder, including this Bond, the City may, from time to time and at any time, adopt a supplemental ordinance or ordinances for specified purposes, and (b) the Ordinance and the rights and obligations of the City and the owners of the bonds authorized thereunder, including this bond, may (with certain exceptions as stated in the Ordinance) be modified or amended with the consent of the owners of at least sixty -six and two - thirds percent (66 2/3 %) in aggregate principal amount of such bonds exclusive of any such bonds which may be owned by the City. The bonds authorized and issued pursuant to the Ordinance, including this bond, are subject to defeasance prior to redemption or payment as provided in the Ordinance, and the Registered Owner of this bond, by the acceptance hereof, hereby agrees to all the terms and provisions contained in the Ordinance. The following abbreviations, when used in the inscription on the face of the within Bond, shall be construed as though 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 UNIF. GIFT MIN. ACT - Custodian (Cust) (Minor) under Uniform Gifts to Minors Act -8- (State) e I R Additional abbreviations may also be used though not in the list above. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto (insert name and address) 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 appears on the face of the within bond in every particular, without alteration or enlargement or any change whatsoever. Signature Guarantee: NOTICE: Signature(s) must be guaranteed by a broker - dealer or a commercial bank or trust company. (End of Bond Form) rrrompol \sthbend\ waterwor .ks \bondform;drf;11 -4 -92 04 5D111Tl''...8�t� •, d d City of South Bend \; Joseph E. Kernan, Mayor ' 1865 Department of Public Works John E. Leszczynski, Director November 2, 1992 Mr. Stephen Luecke, President South Bend Common Council 4th Floor, County -City Building South Bend, IN 46601 RE: An Ordinance Authorizing the Issuance of Revenue Bonds to Provide for the Costs of Acquistion and Construction of Extensions, Additions, and Improvements to the Municipal Waterworks of the City of South Bend, Indiana. Dear Mr. Luecke: I am attaching for filing an Ordinance authorizing the issuance of revenue bonds to provide for the costs of acquisition and construction of extensions, additions, and improvements to the municipal waterworks of the City of South Bend, Indiana. Your consideration and approval is respectfully requested. Attachment JEB3 /2LUECKE Sincerely, John E. Leszczynski Director County -City Building • South Bend, Indiana 46601 • 219/284 -9251 Engineering Environmental Services Equipment Services Michael Meeks, P.E. John J. Dillon, Ph. D. Phil St. Clair 284 -9251 277 -8515 284 -9316 FAX (219) 284 -9171 FAX (219) 277 -8980 FAX (219) 284 -9007 Transportation Bill Penn 284 -9444 FAX (219) 284 -9007 Water Works Joseph Agostino 284 -9322 ( 11mutturr (To toe fgommou Moumii of top (tits of #out# JI-pnd: Your Committee to whom was referred of the Whole r� T r r LTe% 93 -92 SECOND READING ON A BILL OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE ACQUISITION AND CONSTRUCTION OF EXTENSIONS, ADDITIONS AND IMPROVEMENTS TO THE MUNICIPAL WATERWORKS OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE ISSUANCE OF REVENUE BONDS TO PROVIDE FOR THE COSTS THEREOF, AND AUTHORIZING THE COLLECTION, SEGREGATION AND DISTRIBUTION OF THE REVENUES OF SUCH WATERWORKS AND OTHER RELATED MATTERS. Respectfully report that they have examined the matter and that in their opinion This bill should be recommended to the Council favorable. Ann Puzzello FREE PRESS AQ99.9AD PUBLISHING CO. Chairman