HomeMy WebLinkAbout10963-23-Ordinance Authorizing the Acquisition and Construction of Certain Additions and Improvements to the Municipal Waterworks of the City of South Bend ORDINANCE No .
10963-23
Passed by the Common Council of the City of South Bend, Indiana
August 28, 20 23
&)Attest: X ` City Clerk
Dawn M. Jones
Attest: lE2410A 014 PI President of Common Council
Presented by me to the Mayor of the City of South Bend, Indiana
August 29, 23
20
fr117,00 City Clerk
Dawn M. Jones
Approved and signed by me S ftt•4^h v 1 20 Z
Mayor
BILL NO. 49-23
ORDINANCE NO.
AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND,
INDIANA,AUTHORIZING THE ACQUISITION AND CONSTRUCTION OF
CERTAIN ADDITIONS AND IMPROVEMENTS TO THE MUNICIPAL
WATERWORKS OF THE CITY OF SOUTH BEND, INDIANA; AUTHORIZING THE
ISSUANCE OF ADDITIONAL REVENUE BONDS FOR SUCH PURPOSE IN THE
PRINCIPAL AMOUNT NOT TO EXCEED FORTY-SEVEN MILLION SEVEN
HUNDRED NINETY-ONE THOUSAND DOLLARS ($47,791,000) TO PROVIDE FUNDS
FOR THE PAYMENT OF THE COSTS THEREOF; ADDRESSING OTHER MATTERS
CONNECTED THEREWITH, INCLUDING THE ISSUANCE OF NOTES IN
ANTICIPATION OF BONDS; AND REPEALING ORDINANCES INCONSISTENT
HEREWITH
STATEMENT OF PURPOSE AND INTENT
The City of South Bend, Indiana (the "City") has heretofore established, constructed and
financed a municipal waterworks(the"Waterworks"or the"System")and now owns and operates
said Waterworks pursuant to I.C. 8-1.5, as amended, and other applicable laws (together, the
"Act").
The City's Municipal Waterworks Utility is subject to the authority and regulation of the
Indiana Utility Regulatory Commission ("IURC") and has not withdrawn from the IURC's
authority and regulation.
The Common Council of the City (the "Common Council") finds that certain additions,
improvements and extensions to the Waterworks are necessary; and that plans, specifications and
estimates have been prepared and filed by the engineers employed by the City for the construction
of said additions, improvements and extensions, as more fully described on Exhibit A attached
hereto, and made a part hereof(collectively, the "Project"), which plans and specifications have
been or will be approved by the Common Council and by all governmental authorities having
jurisdiction, and particularly the Indiana Department of Environmental Management. The City
has advertised or will advertise for and receive bids or proposals for the construction of the Project,
which bids or proposals will be subject to the City obtaining funds to pay for the Project. On the
basis of said engineering estimates, the maximum estimated cost of the Project, including
incidental expenses,is in the amount of Forty-Seven Million Seven Hundred Ninety-one Thousand
Dollars ($47,791,000). The Common Council has determined that to provide funds necessary to
pay for a portion of the costs of the Project, it will be necessary for the City to issue waterworks
revenue bonds, in one (1) or more series, in an amount not to exceed Forty-Seven Million Seven
Hundred Ninety-one Thousand Dollars ($47,791,000) and, if necessary, bond anticipation notes
("BANs") in an aggregate amount not to exceed Forty-Seven Million Seven Hundred Ninety-one
Thousand Dollars ($47,791,000).
The City previously submitted a petition to the IURC seeking approval for the adjustment
of the rates and charges of the Waterworks and the issuance of long-term indebtedness and the
IURC issued its order(Cause No.45719),dated January 25,2023 (the"Order"),approving,subject
to the requirements set forth in the Order, the issuance of long-term debt in the amount not to
exceed $47,791,000.
The Common Council finds that there are now outstanding bonds issued on account of the
Waterworks and payable out of the revenues therefrom designated as the "Waterworks Revenue
Bonds of 2009, Series A" dated September 1, 2009 (the "2009A Bonds") originally issued in the
amount of$429,000 authorized by Ordinance No. 9937-09 adopted by the Common Council on
June 8, 2009 (the"Original 2009 Ordinance"), now outstanding in the amount of$196,030.
The Common Council finds that there are also now outstanding bonds issued on account
of the Waterworks and payable out of the revenues therefrom designated as the "Waterworks
Revenue Bonds of 2012" dated June 21, 2012 (the "2012A Bonds"), originally issued in the
amount of$8,300,000 authorized by Ordinance No. 10134-11 adopted by the Common Council
on November 28, 2011 (the"2012A Ordinance"), now outstanding in the amount of$4,685,000.
The Common Council finds that there are also outstanding bonds issued on account of the
Waterworks and payable out of the revenues therefrom designated as the"Waterworks Refunding
Revenue Bonds of 2016" dated December 27, 2016 (the "2016 Bonds"), originally issued in the
amount of$3,300,000 authorized by Ordinance No. 10480-16, adopted by the Common Council
on November 14, 2016 (the"2016 Ordinance"), now outstanding in the amount of$1,220,000.
The Common Council finds that there are also outstanding bonds issued on account of the
Waterworks and payable out of the revenues therefrom designated as the "Amended Waterworks
Revenue Bonds of 2009, Series B" dated November 5, 2019 (the"Amended 2009B Bonds"), (the
2009A, 2012A Bonds, the 2016 Bonds, and the Amended 2009B Bonds, together, the "Prior
Bonds")originally issued and currently outstanding in the amount of$2,814,257 authorized by the
Original 2009 Ordinance as supplemented and amended by Ordinance No. 10659-19 adopted by
the Common Council on July 22, 2019 (the "2019 Amending Ordinance" and with the Original
2009 Ordinance, the "Amended 2009 Ordinance") (the 2012A Ordinance, 2016 Ordinance and
Amended 2009 Ordinance, collectively, the"Prior Ordinances").
The Prior Bonds constitute a first charge upon the Net Revenues (as hereinafter defined).
Other than the Prior Bonds, the City has no outstanding revenue bonds or other pledges of Net
Revenues of the Waterworks.
The Prior Ordinances provide that the City may authorize and issue additional bonds
payable out of the Net Revenues ranking on parity with the Parity Bonds (as hereinafter defined)
for the purpose of financing the cost of future additions, extensions and improvements to the
works, or to provide for a complete or partial refunding of bonds subject to the provisions of the
Prior Ordinances. The conditions precedent to the issuance of additional parity bonds set forth in
the Prior Ordinances, as described above, have been satisfied, subject to approval by the IURC.
The City desires to authorize the issuance of a bond anticipation note or notes hereunder,
if necessary,payable from the proceeds of the revenue bonds authorized herein(the`BANs"), and
to authorize the refunding of said BANs, if issued.
The Common Council now finds that all conditions precedent to the adoption of an
ordinance authorizing the issuance of waterworks revenue bonds on parity with the Prior Bonds
and BANs have been complied with in accordance with the applicable provisions of the Act.
The City may enter into a Financial Assistance Agreement, Funding Agreement, Grant
Agreement,and/or Financial Aid Agreement(substantially in the form of Exhibit B attached hereto
and made a part hereof) ("Financial Assistance Agreement") with the Indiana Finance Authority
(the "Authority") as part of its drinking water loan program, supplemental drinking water and
wastewater assistance program,water infrastructure assistance program and/or water infrastructure
grant program, established and existing pursuant to I.C. § 5-1.2-1 through I.C. § 5-1.2-4, I.C. § 5-
1.2-10. I.C. § 5-1.2-11, I.C. § 5-1.2-14 and/or I.C. § 5-1.2-14.5 (collectively,the"IFA Program"),
pertaining to the Project and the financing of the Project if any Bonds or BANs are sold to the
Authority as part of its IFA Program.
The Common Council understands that for the Project to be permitted to be financed under
the IFA Program, the Common Council must (a) agree to own, operate and maintain the
Waterworks and the Project for the duration of their useful life and (b) represent and warrant to
the Authority that the Common Council has no intent to sell, transfer or lease the waterworks or
the Project for the duration of their useful life.
The City may accept other forms of financial assistance, as and if available, from the IFA
Program.
NOW THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE
CITY OF SOUTH BEND, INDIANA,AS FOLLOWS:
SECTION I. Recitals. The recitals contained in this Ordinance are true and
correct and are incorporated in this Ordinance by this reference.
SECTION II. Authorization of Project. The City shall proceed with the
construction of the Project in accordance with the plans and specifications heretofore prepared and
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filed by the consulting engineers employed by the City, which plans and specifications are by
reference made a part of this Ordinance as fully as if the same were attached hereto and
incorporated herein. Two copies of the plans and specifications are now on file or will be
subsequently placed on file in the office of the Clerk of the City and open for public inspection
pursuant to IC § 36-1-5-4. The cost of construction of the Project to be financed shall not to exceed
the sum of$47,791,000,plus investment earnings on the bond and BAN proceeds,without further
authorization from this Common Council. Where used in this Ordinance,the term "City"shall be
construed also to include any Department, Board, Commission, or Officer or Officers of the
City. The terms "Waterworks," "waterworks," "works," "System," "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 together with all of the real estate, equipment and
appurtenances thereto used in connection therewith, and all extensions, additions, and
improvements thereto and replacements thereof, now or subsequently constructed or acquired
including the works herein acquired and constructed and all additions and improvements thereto
and replacements thereof subsequently constructed or acquired. If the bonds herein authorized
will be sold to the IFA Program, such terms shall also be construed to mean the Drinking Water
System,as defined in the Financial Assistance Agreement to be entered into, in such case,between
the City and the Authority through the IFA Program. The Project shall be constructed in
accordance with the plans and specifications heretofore mentioned,which plans and specifications
are hereby approved. The Project shall be constructed and the bonds and/or BANs herein
authorized shall be issued pursuant to and in accordance with the Act. The City reasonably expects
to reimburse expenditures incurred by the City for the Project with proceeds of the BANs or the
Bonds and this Ordinance constitutes a declaration of Official Intent pursuant to Treasury
Regulation 1.150-2(e) and the provisions of I.C. 5-1-14-6(c).
In the event the bonds herein authorized or the BANs are purchased by the Authority as part of the
IFA Program, on behalf of the City, the Common Council hereby (i) agrees to own, operate and
maintain the waterworks and the Project for the duration of their useful life and(ii)represents and
warrants to the Authority that the Common Council has no intent to sell, transfer or lease the
waterworks or the Project for the duration of their useful life.
SECTION III. Issuance of BANs and Bonds. (a)The City shall issue,if necessary,
its BANs for the purpose of procuring interim financing to apply to the cost of the Project and
capitalized interest, if any. The City shall issue its BANs, in one or more series, in an amount not
to exceed Forty-Seven Million Seven Hundred Ninety-one Thousand Dollars ($47,791,000) to be
designated "Waterworks Revenue Bond Anticipation Notes, Series " (to be completed
with the year in which issued and appropriate series designation, if any). Each series of BANs
shall be numbered consecutively from_R-1 upward (with such blank to be filled in based on the
year of issuance of the BANs), shall be sold at a price not less than 99% of their par value, shall
be in denominations of One Dollar ($1) or integral multiples thereof(or such higher minimum
denomination as the Controller of the City (the "Controller") shall determine prior to the sale of
the BANs and as set forth in the Bond Anticipation Note Agreement(as hereinafter defined)), shall
be dated as of the date of delivery thereof, and shall bear interest at a rate not to exceed 5.00%per
annum (the exact rate or rates to be determined through bidding or negotiation with the purchaser
of the BANs) payable upon maturity. The City may receive payment on the BANs in
installments. Each series of BANs will mature no later than five (5) years after their date of
delivery. The BANs are subject to renewal or extension at an interest rate or rates not to exceed
5.00% per annum (the exact rate or rates to be negotiated with the purchaser of the BANs). The
term of the BANs and all renewal BANs may not exceed five years from the date of delivery of
the initial BANs. The BANs shall be registered in the name of the purchasers
thereof. Notwithstanding anything in this Ordinance to the contrary, any series of BANs issued
hereunder may bear interest that is taxable and included in the gross income of the owners
thereof. If any such BANs are issued on a taxable basis, the designated name shall include the
term"Taxable"as the first word in the designated name.
The BANs shall be issued pursuant to the provisions of IC § 5-1.2-1 through IC § 5-1.2-4,
IC § 5-1.2-10, IC § 5-1.2-14 and/or IC § 5-1.2-14.5 if sold to the Authority or pursuant to the
provisions of I.C. § 5-1-14-5,as amended, and the Act,if sold to a financial institution or any other
purchaser. The principal of and interest on the BANs shall be payable solely from the issuance of
revenue bonds pursuant to and in the manner prescribed by the Act (or, with respect solely to
interest, from a pledge of the Net Revenues). The City may also use other revenues or funds of
the City legally available therefor, if any, including amounts available to the City out of federal or
state funds available for application to the Project, for payment of the principal of the BANs;
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provided, however, that no funds other than proceeds from the issuance and sale of the Bonds, if
and when issued,are pledged to the payment of principal of the BANs. Notwithstanding any other
provision of this Ordinance,if the BANs are sold to a purchaser that so agrees,the City may receive
payment for the BANs in installments, and principal shall not be payable and interest shall not
accrue on the BANs until such principal amount has been advanced pursuant to requests made by
the City to such purchaser. In the event that the total principal amount of the BANs sold to such
purchaser is not advanced to the City, the principal amount of the BANs shall be reduced
accordingly. The revenue bonds will be payable solely out of and constitute a first charge upon
all the Net Revenues of the waterworks of the City, including the works herein acquired and
constructed and all additions and improvements thereto and replacements thereof subsequently
constructed or acquired.
(b)The City shall issue its waterworks revenue bonds,in one or more series,in an aggregate
principal amount not to exceed Forty-Seven Million Seven Hundred Ninety-one Thousand Dollars
($47,791,000)to be designated"Waterworks Revenue Bonds, Series ,"with the blank to be
completed with the year in which issued and the appropriate series designation, if any (the
"Bonds"), for the purpose of procuring funds to be applied to the cost of the Project, the payment
of costs of issuance, refunding the BANs, if issued, capitalized interest, if any, and all other costs
related to the Project.
Each series of Bonds shall be sold at a price of not less than 99% of the par amount of the
Bonds and shall be issued in authorized denominations of One Dollar ($1) each if sold to the
Authority as part of the IFA Program and in the denomination of Five Thousand Dollars ($5,000)
each or integral multiples thereof if sold to another purchaser (or such higher minimum
denomination as the Controller may determine prior to the sale of other Bonds with the advice of
Baker Tilly Municipal Advisors, LLC(the"Municipal Advisor"))if sold to another purchaser, and
any integral multiple thereof not exceeding the aggregate principal amount of the Bonds maturing
in any one (1) year. The Bonds shall be numbered consecutively from R-1 upward (with such
blank to be completed with the year of issuance of the Bonds and the appropriate series
designation, if any), dated as of their date of delivery, and shall bear interest at a rate or rates not
exceeding 5.00% per annum (the exact rate or rates to be determined by negotiation with the IFA
Program, or by bidding, as the case may be),payable semiannually on January 1 and July 1 in each
year, beginning no earlier than January 1, 2024, as determined by the Controller, with the advice
of the Municipal Advisor. The Bonds shall be payable in lawful money of the United States of
America, at the principal office of the Paying Agent (as hereinafter defined). The Bonds shall
mature annually,or shall be subject to mandatory sinking fund redemption if term bonds are issued,
on January 1 of each year, through January 1, 2033, and shall mature semiannually, or shall be
subject to mandatory sinking fund redemption if term bonds are issued, on January 1 and July 1
thereafter, over a period ending no later than January 1, 2048, in such amounts as deemed
appropriate by the Controller, upon the advice of the Municipal Advisor; provided, however, that
any Bonds sold to the Authority as part of its IFA Program shall mature annually on January 1, or
be subject to mandatory sinking fund redemption on January 1 through January 1, 2033, and shall
mature semiannually, or shall be subject to mandatory sinking fund redemption if term bonds are
issued, on January 1 and July 1 thereafter, over a period ending no later than thirty-five(35)years
from the date of issuance of the Bonds, and in such amounts as will allow the City to meet the
coverage and/or amortization requirements of the IFA Program, with such debt service schedules
to be finalized and set forth in the Financial Assistance Agreement. The Bonds will be payable
solely out of and constitute a first charge against the Net Revenues (as hereinafter defined) of the
City's Waterworks, inclusive of System Development Charges (as hereinafter defined), on parity
with the Prior Bonds.
All or a portion of the Bonds may be issued as one or more term bonds, upon election of
the purchaser thereof. Such term bonds shall have a stated maturity or maturities consistent with
the maturity schedule determined in accordance with the preceding paragraph, in the years as
determined by the purchaser thereof, but in no event later than the last serial maturity date of the
Bonds as determined in the preceding paragraph. The term bonds shall be subject to mandatory
sinking fund redemption and final payment(s)at maturity at 100%of the principal amount thereof,
plus accrued interest to the redemption date, on principal payment dates which are hereafter
determined in accordance with the preceding paragraph.
Each series of Bonds shall rank on a parity basis with any other series issued hereunder
and the Prior Bonds for all purposes, including the pledge of Net Revenues under this Ordinance.
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Interest on the Bonds and BANs shall be calculated according to a 360-day calendar year
containing twelve 30-day months (or on the basis of a 365-day year, if required by the Purchaser
of the Bonds).
SECTION IV. Registrar and Paying Agent; Book-entry Provisions. (a) The
Controller is hereby authorized to contract with a qualified financial institution to serve as
Registrar and Paying Agent for the Bonds ("Registrar" or "Paying Agent"). The Registrar is
hereby charged with the responsibility of authenticating the Bonds. The Controller is hereby
authorized to enter into such agreements or understandings with the Registrar as will enable the
institution to perform the services required of a registrar and paying agent. The Controller is
further authorized to pay such fees as the Registrar may charge for the services it provides as
Registrar and Paying Agent, and such fees may be paid from the Waterworks Sinking Fund
established to pay the principal of and interest on the Bonds as fiscal agency charges.
As to the BANs and as to the Bonds, if the purchaser does not object to such designation,
the Controller may serve as Registrar and Paying Agent, and in that case, is hereby charged with
the performance of all duties and responsibilities of Registrar and Paying Agent.
(b) If the BANs or Bonds are sold to the Authority as part of its IFA Program,
the principal of and interest thereon shall be paid by wire transfer to such financial institution if
and as directed by the Authority on the due date of such payment or,if such due date is a day when
financial institutions are not open for business, on the business day immediately after such due
date. So long as the Authority as part of its IFA Program is the owner of the BANs or the Bonds,
such BANs or Bonds shall be presented for payment as directed by the Authority.
(c) If the BANs or Bonds are not sold to the Authority as part of its IFA
Program or if wire transfer payment is not required, the principal of the Bonds and the principal
and interest on the BANs shall be payable at the principal (or designated) corporate trust office of
the Paying Agent. All payments of interest on the Bonds shall be paid by check mailed to the
registered owners thereof, as of the fifteenth day of the month preceding each interest payment
date ("Record Date"), at the addresses as they appear on the registration books kept by the
Registrar or at such other address as is provided to the Paying Agent in writing by such registered
owner on or before such Record Date. If payment of principal or interest is made to a depository,
payment shall be made by wire transfer on the payment date in same-day funds. If the payment
date occurs on a date when financial institutions are not open for business, the wire transfer shall
be made on the next succeeding business day. The Paying Agent shall be instructed to wire transfer
payments by 1:00 p.m. (New York City time) so such payments are received at the depository by
2:30 p.m. (New York City time).
All payments on the Bonds and BANs shall be made in any coin or currency of the United
States of America which, on the date of such payment, shall be legal tender for the payment of
public and private debts.
(d) Each Bond shall be transferable or exchangeable only upon the books of the
City kept for that purpose at the principal (or designated) corporate trust office of the Registrar by
the registered owner in person, or by its 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 its attorney duly authorized in writing, and thereupon a
new fully registered Bond or Bonds in an authorized 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. The costs of such transfer or exchange
shall be borne by the City except for any tax or governmental charge required to be paid with
respect to the transfer or exchange,which taxes or governmental charges are payable by the person
requesting such transfer or exchange. The City, Registrar and Paying Agent for the Bonds may
treat and consider the person in whose name such Bonds are registered as the absolute owner
thereof for all purposes including for the purpose of receiving payment of, or on account of, the
principal thereof and interest due thereon.
(e) The Registrar and Paying Agent may at any time resign as Registrar and
Paying Agent upon giving 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 30 day period 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 registered mail. The
Registrar and Paying Agent may be removed at any time as Registrar and Paying Agent by the
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City, in which event the City may appoint a successor registrar and paying agent. The City shall
notify each registered owner of the Bonds then outstanding by first class mail of the removal of
the Registrar and Paying Agent. Notices to the 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.
Upon the appointment of any successor registrar and paying agent by the City, the
Controller is authorized and directed to enter into such agreements and understandings with such
successor registrar and paying agent as will enable the institution to perform the services required
of a registrar and paying agent for the Bonds. The Controller is further authorized to pay such fees
as the successor registrar and paying agent may charge for the services it provides as registrar and
paying agent, and such fees may be paid from the Waterworks Sinking Fund continued in Section
XV hereof Any predecessor registrar and paying agent shall deliver all of the Bonds and any cash
or investments in its possession with respect thereto, together with the registration books, to the
successor registrar and paying agent.
(f) Interest on all other Bonds shall be payable from the interest payment date
to which interest has been paid next preceding the authentication date of the Bonds unless the
Bonds are authenticated after the Record Date and on or before such interest payment date, in
which case they shall bear interest from such interest payment date, or unless the Bonds are
authenticated on or before the Record Date preceding the first interest payment date, in which case
they shall bear interest from the original date, until the principal shall be fully paid.
(g) The Bonds may be issued in book-entry-only form as one (1) fully
registered Bond per maturity registered in the name of Cede&Co.,as nominee for The Depository
Trust Company, New York, New York ("Depository Trust Company") and have transfers of the
Bonds effected by book-entry on the books of the central depository system ("Book Entry
System"). The Bonds may be initially issued in the form of a separate single authenticated fully
registered Bond for the aggregate principal amount of each separate maturity of the Bonds. In
such case, upon initial issuance, the ownership of such Bonds shall be registered in the register
kept by the Registrar in the name of CEDE & CO., as nominee of the Depository Trust Company.
With respect to the Bonds registered in the register kept by the Registrar in the name of
CEDE & CO., as nominee of the Depository Trust Company, the City and the Paying Agent shall
have no responsibility or obligation to any other holders or owners(including any beneficial owner
("Beneficial Owner"))of the Bonds with respect to(i)the accuracy of the records of the Depository
Trust Company, CEDE & CO., or any Beneficial Owner with respect to ownership questions, (ii)
the delivery to any bondholder (including any Beneficial Owner) or any other person, other than
the Depository Trust Company, of any notice with respect to the Bonds including any notice of
redemption, or(iii) the payment to any bondholder(including any Beneficial Owner) or any other
person, other than the Depository Trust Company, of any amount with respect to the principal of,
or premium, if any, or interest on the Bonds, except as otherwise provided herein.
With respect to Bonds registered in the name of CEDE & CO., the following provisions
shall also apply. No person other than the Depository Trust Company shall receive an
authenticated Bond evidencing an obligation of the City to make payments of the principal of and
premium,if any, and interest on the Bonds pursuant to this Ordinance. The City and the Registrar
and Paying Agent may treat as and deem the Depository Trust Company or CEDE & CO. to be
the absolute bondholder of each of the Bonds for the purpose of(i)payment of the principal of and
premium, if any, and interest on such Bonds; (ii) giving notices of redemption and other notices
permitted to be given to bondholders with respect to such Bonds; (iii) registering transfers with
respect to such Bonds; (iv)obtaining any consent or other action required or permitted to be taken
by or with respect to bondholders; (v) voting; and (vi) for all other purposes whatsoever. The
Paying Agent shall pay all principal of and premium, if any, and interest on the Bonds only to or
upon the order of the Depository Trust Company,and all such payments shall be valid and effective
fully to satisfy and discharge the City's and the Paying Agent's obligations with respect to
principal of and premium, if any, and interest on the Bonds to the extent of the sum or sums so
paid. Upon delivery by the Depository Trust Company to the City of written notice to the effect
that the Depository Trust Company has determined to substitute a new nominee in place of CEDE
& CO., and subject to the provisions herein with respect to consents, the words"CEDE&CO."in
this Ordinance shall refer to such new nominee of the Depository Trust
Company. Notwithstanding any other provision hereof to the contrary, so long as any Bond is
registered in the name of CEDE & CO., as nominee of the Depository Trust Company, all
payments with respect to the principal of and premium, if any, and interest on such Bonds and all
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notices with respect to such Bonds shall be made and given to the Depository Trust Company as
provided in a representation letter from the City to the Depository Trust Company.
Upon receipt by the City of written notice from the Depository Trust Company to the effect
that the Depository Trust Company is unable or unwilling to discharge its responsibilities and if
no substitute depository willing to undertake the functions of the Depository Trust Company
hereunder can be found which is willing and able to undertake such functions upon reasonable and
customary terms, then the Bonds shall no longer be restricted to being registered in the register of
the City kept by the Registrar in the name of CEDE & CO., as nominee of the Depository Trust
Company, but may be registered in whatever name or names the bondholders transferring or
exchanging the Bonds shall designate, in accordance with the provisions of this Ordinance.
If the City determines that it is in the best interest of the bondholders that they be able to
obtain certificates for the fully registered Bonds, the City may notify the Depository Trust
Company and the Registrar, whereupon the Depository Trust Company will notify the Beneficial
Owners of the availability through the Depository Trust Company of certificates for the Bonds. In
such event, the Registrar shall prepare, authenticate, transfer and exchange certificates for the
Bonds as requested by the Depository Trust Company and any Beneficial Owners in appropriate
amounts, and whenever the Depository Trust Company requests the City and the Registrar to do
so, the Registrar and the City will cooperate with the Depository Trust Company by taking
appropriate action after reasonable notice (i) to make available one or more separate certificates
evidencing the fully registered Bonds of any Beneficial Owner's Depository Trust Company
account or (ii) to arrange for another securities depository to maintain custody of certificates for
and evidencing the Bonds.
If the Bonds shall no longer be restricted to being registered in the name of the Depository
Trust Company, the Registrar shall cause the Bonds to be printed in blank in such number as the
Registrar shall determine to be necessary or customary;provided,however,that the Registrar shall
not be required to have such Bonds printed until it shall have received from the City
indemnification for all costs and expenses associated with such printing.
In connection with any notice or other communication to be provided to bondholders by
the City or the Registrar with respect to any consent or other action to be taken by bondholders,
the City or the Registrar, as the case may be, shall establish a record date for such consent or other
action and give the Depository Trust Company notice of such record date not less than fifteen(15)
calendar days in advance of such record date to the extent possible.
So long as the Bonds are registered in the name of the Depository Trust Company or CEDE
& CO. or any substitute nominee, the City and the Registrar and Paying Agent shall be entitled to
request and to rely upon a certificate or other written representation from the Beneficial Owners
of the Bonds or from the Depository Trust Company on behalf of such Beneficial Owners stating
the amount of their respective beneficial ownership interests in the Bonds and setting forth the
consent, advice, direction, demand or vote of the Beneficial Owners as of a record date selected
by the Registrar, to the same extent as if such consent, advice, direction, demand or vote were
made by the bondholders for purposes of this Ordinance,and the City and the Registrar and Paying
Agent shall for such purposes treat the Beneficial Owners as the bondholders. Along with any
such certificate or representation, the Registrar may request the Depository Trust Company to
deliver, or cause to be delivered, to the Registrar a list of all Beneficial Owners of the Bonds,
together with the dollar amount of each Beneficial Owner's interest in the Bonds and the current
addresses of such Beneficial Owners.
Notwithstanding anything contained herein, the City may accept any other forms of
financial assistance, as and if available, from the IFA Program (including without limitation any
forgivable loans,grants or other assistance whether available as an alternative to any BAN or Bond
related provision otherwise provided for herein or as a supplement or addition thereto). If required
by the IFA Program to be eligible for such financial assistance, one or more of the series of the
BANs or Bonds issued hereunder may be issued on a basis such that the payment of the principal
of or interest on (or both) such series of BANs or Bonds is junior and subordinate to the payment
of the principal of and interest on other series of BANs or Bonds issued hereunder (and/or any
other revenue bonds secured by a pledge of Net Revenues, whether now outstanding or hereafter
issued), all as provided by the terms of such series of BANs or Bonds as modified pursuant to this
authorization. Such financial assistance, if any, shall be as provided in the Financial Assistance
Agreement and the BANs or Bonds of each series of BANs or Bonds issued hereunder(including
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any modification made pursuant to the authorization in this paragraph to the form of Bond
otherwise contained herein).
SECTION V. Redemption of Bonds and BANs. (a) On and after the date
specified in the Bond Anticipation Note Agreement,the BANs are prepayable by the City,in whole
or in part, on any date, upon 30 days' notice to the owner of the BANs, with no premium. The
exact redemption features of the BANs shall be determined by the Controller with the advice of
the Municipal Advisor and shall be set out in the Bond Anticipation Note Agreement.
(b) The Bonds may be made redeemable at the option of the City, in whole or
in part, in the order of maturity as determined by the City, and by lot within a maturity, on thirty
(30) days' notice, at face value, with a premium no greater than 2%, plus accrued interest to the
date fixed for redemption. The exact redemption dates and premiums shall be established by the
Controller,with the advice of the Municipal Advisor,prior to the sale of the Bonds;provided, that
Bonds sold to the Authority as part of its IFA Program shall be redeemable not sooner than ten
(10) years after their date of delivery and in inverse order of maturity on at least 60 days' notice;
provided, further, that if the Bonds are sold to the IFA Program and registered in the name of the
Authority, the Bonds shall not be redeemable at the option of the City unless and until consented
to by the Authority.
(c) If any Bond is issued as a term bond, the Paying Agent shall credit against
the mandatory sinking fund requirement for the Bonds maturing as term bonds, and corresponding
mandatory redemption obligation,in the order determined by the City,any Bonds maturing as term
bonds which have previously been redeemed (otherwise than as a result of a previous mandatory
redemption requirement) or delivered to the Registrar for cancellation or purchased for
cancellation by the Paying Agent and not theretofore applied as a credit against any redemption
obligation. Each Bond maturing as a term bond so delivered or cancelled shall be credited by the
Paying Agent at 100% of the principal amount thereof against the mandatory sinking fund
obligation on such mandatory sinking fund date, and any excess of such amount shall be credited
on future redemption obligations, and the principal amount of the Bonds to be redeemed by
operation of the mandatory sinking fund requirement shall be accordingly reduced; provided,
however, the Paying Agent shall credit such Bonds maturing as term bonds only to the extent
received on or before forty-five(45) days preceding the applicable mandatory redemption date.
Each authorized denomination amount of Bonds shall be considered a separate bond for
purposes of optional and mandatory redemption. If less than an entire maturity is called for
redemption at one time,the Bonds to be redeemed shall be selected by lot within a maturity by the
Registrar. If some Bonds are to be redeemed by optional redemption and mandatory sinking fund
redemption on the same date, the Registrar shall select by lot the Bonds for optional redemption
before selecting the Bonds by lot for the mandatory sinking fund redemption.
(d) In either case, notice of redemption shall be given not less than thirty (30)
days prior to the date fixed for redemption unless such redemption notice is waived by the owner
of the Bond or Bonds redeemed. Such notice shall be mailed to the address of the registered owner
as shown on the registration record of the City as of the date which is forty-five (45) prior to such
redemption date; provided, however, that such notice shall be provided at least sixty (60) days in
advance if the Bonds are sold to the Authority as part of the IFA Program, to the registered owner
as shown on the registration record of the City as of the date which is sixty-five(65) days prior to
the redemption date for such Bonds. The notice shall specify the date and place of redemption and
sufficient identification of the Bonds called for redemption. The place of redemption may be
determined by the City. Interest on the Bonds so called for redemption shall cease on the
redemption date fixed in such notice if sufficient funds are available at the place of redemption to
pay the redemption price on the date so named.
SECTION VI. Execution and Negotiability. The Bonds and BANs shall be
executed in the name of the City by the manual or facsimile signature of the Mayor of the City
(the "Mayor") and attested by the manual or facsimile signature of its Clerk, and the seal of the
City shall be affixed, imprinted or impressed to or on each of the Bonds and BANs manually, by
facsimile or any other means; and these officials,by the execution of a Signature and No Litigation
Certificate, shall adopt as and for their own proper signatures the facsimile signatures appearing
on the Bonds or BANs. In case any officer whose signature or facsimile signature appears on the
Bonds or BANs shall cease to be such officer before the delivery of the Bonds or BANs, the
signature of such officer shall nevertheless be valid and sufficient for all purposes the same as if
such officer had remained in office until such delivery.
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The Bonds and BANs shall have all of the qualities and incidents of negotiable instruments
under the laws of the State of Indiana, subject to the provisions for registration herein.
The Bonds shall also 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.
SECTION VII. Form of Bonds. The form and tenor of the Bonds shall be
substantially as follows, all blanks to be filled in properly prior to delivery:
No. R-
UNITED STATES OF AMERICA
STATE OF INDIANA COUNTY OF ST. JOSEPH
CITY OF SOUTH BEND
WATERWORKS REVENUE BOND, SERIES
Interest Maturity Original Authentication
Rate Date Date Date ICUSIPI
REGISTERED OWNER:
PRINCIPAL SUM:
The City of South Bend,in St.Joseph County, State of Indiana("City"),for value received,
hereby promises to pay to the Registered Owner named above or registered assigns, solely out of
the special revenue fund hereinafter referred to, the Principal Sum set forth above, [or so much
thereof as may be advanced from time to time and be outstanding as evidenced by the records of
the registered owner making payment for this bond, or its assigns,] on the [Maturity Date set forth
above] OR [ in the years and in the amounts as set forth on Schedule A
attached hereto] (unless this bond be subject to and be called for redemption prior to maturity as
hereinafter provided), and to pay interest hereon until the Principal Sum shall be fully paid at the
rate per annum stated 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 , 20 , in which case it shall bear interest from the
Original Date, which interest is payable semiannually on the first days of January and July in each
year,beginning on 1,20_. Interest shall be calculated according to a 360-day calendar
year containing twelve 30-day months.
[The principal of and premium,if any, on this 202_Bond is payable at the principal Office
of (the"Registrar"or the"Paying Agent"),in the of
Indiana.] [Principal and] Interest on this 202_ Bond shall be paid by check mailed OR [wire
transfer for deposit to a financial institution as directed by the Indiana Finance Authority (the
"Authority") on the due date or, if such due date is a day when financial institutions are not open
for business, on the business day immediately after such due date] one (1) business day prior to
the interest payment date to the Registered Owner hereof, as of the fifteenth(15th)day of the month
preceding such payment, at the address as it appears on the registration books kept by the Registrar
or at such other address as is provided to the Paying Agent in writing by the registered owner. [If
payment of principal or interest is made to a depository, payment shall be made by wire transfer
on the payment date in same-day funds. If the payment date occurs on a date when financial
institutions are not open for business, the wire transfer shall be made on the next succeeding
business day. The Paying Agent shall wire transfer payments so such payments are received at the
depository by 2:30 p.m. (New York City time).] 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 payment, shall be
legal tender for the payment of public and private debts.
This Bond shall not constitute an indebtedness of the City within the meaning of the
provisions and limitations of the Constitution of the State, and the City shall not be obligated to
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pay this Bond or the interest hereon except from the special fund provided from the Net Revenues
(herein defined as the gross revenues of the System (herein defined as the City's waterworks
system, including all real estate, equipment and appurtenances thereto used in connection
therewith, and all extensions, additions and improvements thereto and replacements thereof, now
or at any time hereafter constructed or acquired) inclusive of System Development Charges (as
defined in the Ordinance) remaining after the payment of the reasonable expense of[Operation
and Maintenance as defined in the Financial Assistance Agreement] OR [operation, repair and
maintenance] of the System).
[Reference is hereby made to the Financial Assistance Agreement ("Financial Assistance
Agreement") between the City and the Authority concerning certain terms and covenants
pertaining to the Waterworks project and the purchase of this Bond as part of the drinking water
loan program established and existing pursuant to IC 5-1.2-1 through IC 5-1.2-4 and IC 5-1.2-10.]
This bond is one of an authorized issue of bonds of the City issued in series of like tenor
and effect, except as to numbering, interest rate, and date of maturity, in the total amount of
Dollars ($ ); numbered consecutively from
_R-1 up;issued for the purpose of providing funds to pay the cost of certain additions, extensions
and improvements to the municipally owned waterworks system of the City, [to refund interim
notes issued in anticipation of the bonds,] to fund a debt service reserve fund, and to pay issuance
expenses. This bond is issued pursuant to an ordinance adopted by the Common Council of the
City on the _ day of , 2023, entitled "AN ORDINANCE OF THE COMMON
COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE
ACQUISITION AND CONSTRUCTION OF CERTAIN ADDITIONS AND IMPROVEMENTS
TO THE MUNICIPAL WATERWORKS OF THE CITY OF SOUTH BEND, INDIANA;
AUTHORIZING THE ISSUANCE OF REVENUE BONDS FOR SUCH PURPOSE IN THE
PRINCIPAL AMOUNT NOT TO EXCEED FORTY-SEVEN MILLION SEVEN HUNDRED
NINETY-ONE THOUSAND DOLLARS ($47,791,000) TO PROVIDE FUNDS FOR THE
PAYMENT OF THE COSTS THEREOF; ADDRESSING OTHER MATTERS CONNECTED
THEREWITH, INCLUDING THE ISSUANCE OF NOTES IN ANTICIPATION OF BONDS;
AND REPEALING ORDINANCES INCONSISTENT HEREWITH" ("Ordinance"), and in
accordance with the provisions of Indiana law, including without limitation Indiana Code 8-1.5 as
in effect on the date of delivery of the bonds of this issue("Act"). Capitalized terms not otherwise
defined herein have the same meanings as ascribed to them in the Ordinance.
Pursuant to the provisions of the Act and the Ordinance, the principal of and interest on
this bond and all other bonds of said issue,the Prior Bonds(as defined in the Ordinance)[including
the Waterworks Revenue Bonds of ,Series ("Series Bonds")] and any
bonds hereafter issued on a parity therewith are payable solely from the Waterworks Sinking Fund
continued by the Ordinance ("Sinking Fund") to be provided from the Net Revenues (defined as
gross revenues after deduction only for the payment of the reasonable expenses of operation,repair
and maintenance and which reasonable expenses of operation,repair and maintenance specifically
do not include any rates or charges in lieu of taxes made and collected by the Waterworks and
transferred to the City in accordance with the Act) of the waterworks of the City, including the
works constructed and acquired with the proceeds of the bonds of this issue, and all additions and
improvements thereto and replacements thereof subsequently constructed or acquired.
The City irrevocably pledges the entire Net Revenues of the waterworks to the prompt
payment of the principal of and interest on the bonds authorized by the Ordinance, of which this
is one, the Parity Bonds and any bonds ranking on a parity therewith, [including the Series
Bonds,] to the extent necessary for that purpose, and covenants that it will cause to be fixed,
maintained and collected such rates and charges for services rendered by the utility as are sufficient
in each year to (i) provide for the payment of the proper and reasonable expenses of[Operation
and Maintenance (as defined in the Financial Assistance Agreement)] OR [operation, repair and
maintenance] of the waterworks, (ii) provide for the payment of the sums required to be paid into
the Sinking Fund under the provisions of the Act and the Ordinance, and (iii) comply with and
satisfy all covenants contained in the Ordinance and any Financial Assistance Agreement. If the
City or the proper officers thereof shall fail or refuse to so fix, maintain and collect such rates or
charges, or if there be a default in the payment of the interest on or principal of this bond, the
owner of this bond shall have all of the rights and remedies provided for under Indiana law.
[The bonds shall be initially issued in a Book Entry System (as defined in the Ordinance).
The provisions of this bond and of the Ordinance are subject in all respects to the provisions of the
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Letter of Representations between the City and DTC, or any substitute agreement, effecting such
Book Entry System.]
The City further covenants that it will set aside and pay into its Sinking Fund monthly, as
available, or more often if necessary, a sufficient amount of the Net Revenues of the works for
payment of(a) the interest on all bonds which by their terms are payable from the revenues of the
waterworks,as such interest shall fall due,(b)the necessary fiscal agency charges for paying bonds
and interest, (c) the principal of all bonds which by their terms are payable from the revenues of
the waterworks, as such principal shall fall due, and(d) an additional amount as a margin of safety
to maintain the debt service reserve required by the Ordinance. Such required payments shall
constitute a first charge against the Net Revenues of said works, on a parity with the Parity Bonds
[and the Series Bonds].
The 202_Bonds maturing on and after , are redeemable at the option of the
City on 1, 20_, or any date thereafter, on thirty (30) days' notice, in whole or in
part, in [inverse/any] order of maturity and by lot within a maturity, at face value, [together with
the following premiums:
% if redeemed on 1, 20 or thereafter
on or before , 20_;
% if redeemed on 1, 20 or thereafter
on or before , 20 ;
% if redeemed on 1, 20_, or thereafter
prior to maturity;]
plus in each case accrued interest to the date fixed for redemption.
[The bonds maturing on 1, 20 are subject to mandatory sinking fund
redemption prior to maturity, at a redemption price equal to the principal amount thereof plus
accrued interest, on the dates and in the amounts set forth below:
Term Bond Term Bond
Date Amount Date Amount
* *
*Final Maturity]
Each Five Thousand Dollar($5,000)principal amount shall be considered a separate bond
for purposes of optional [and mandatory] redemption. If less than an entire maturity is called for
redemption, the bonds to be called shall be selected by lot by the Registrar. [If some bonds are to
be redeemed by optional redemption and mandatory sinking fund redemption on the same date,
the Registrar shall select by lot the bonds for optional redemption before selecting the bonds by
lot for the mandatory sinking fund redemption.]
Notice of redemption shall be mailed to the address of the registered owner as shown on
the registration record of the City, as of the date which is [forty-five (45) days] [sixty-five days]
prior to such redemption date, not less than [thirty (30) days] [sixty (60) days] prior to the date
fixed for redemption. The notice shall specify the date and place of redemption and sufficient
identification of the bonds called for redemption. The place of redemption may be determined by
the City. Interest on the bonds so called for redemption shall cease on the redemption date fixed
in such notice, if sufficient funds are available at the place of redemption to pay the redemption
price on the date so named.
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] [its depository bank] an amount sufficient to
pay such bond or the redemption price, as the case may be, and thereafter the registered owner
shall look only to the funds so deposited in trust with said bank for payment and the City shall
have no further obligation or liability in respect thereto.
This bond is transferable or exchangeable only upon the books of the City kept for that
purpose at the [principal corporate trust] office of the Registrar by the registered owner hereof in
person, or by his attorney duly authorized in writing, upon surrender of this bond together with a
written instrument of transfer or exchange satisfactory to the Registrar duly executed by the
registered owner, or his attorney duly authorized in writing, and thereupon a new fully registered
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bond or bonds in an authorized aggregate principal amount and of the same maturity shall be
executed and delivered in the name of the transferee or transferees or to the registered owner, as
the case may be,in exchange therefor. This bond may be transferred without cost to the registered
owner except for any tax or governmental charge required to be paid with respect to the transfer.
The City, the Registrar, the Paying Agent and any other registrar or paying agent for this bond
may treat and consider the person in whose name this bond is registered as the absolute owner
hereof for all purposes including for the purpose of receiving payment of, or on account of, the
principal hereof and interest due hereon.
This bond is subject to defeasance prior to redemption or payment as provided in the
Ordinance referred to herein. THE OWNER OF THIS BOND, BY THE ACCEPTANCE
HEREOF, HEREBY AGREES TO ALL THE TERMS AND PROVISIONS CONTAINED IN
THE ORDINANCE. The Ordinance may be amended without the consent of the owners of the
bonds as provided in the Ordinance.
The bonds maturing in any one year are issuable only in fully registered form in the
denomination of [One Dollar ($1)] [Five Thousand Dollars ($5,000)] or any integral multiple
thereof.
It is hereby certified and recited that all acts, conditions and things required to be done
precedent to and in the execution,issuance and delivery of this bond have been done and performed
in regular and due form as provided by law.
This bond shall not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been executed by an authorized representative of the Registrar.
IN WITNESS WHEREOF, the City of South Bend, in St. Joseph County, Indiana, has
caused this bond to be executed in its corporate name by the manual or facsimile signature of its
Mayor, its corporate seal to be hereunto affixed, imprinted or impressed by any means and attested
manually or by facsimile by its Clerk.
CITY OF SOUTH BEND, INDIANA
By:
Ma r
[SEAL]
Attest:
(- 37/-))
Clerk
REGISTRAR'S CERTIFICATE OF AUTHENTICATION
This bond is one of the bonds described in the within-mentioned Ordinance.
as Registrar
By:
Authorized Representative
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
this bond and all rights thereunder, and hereby
irrevocably constitutes and appoints , attorney, to
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transfer the within bond on the books kept for the registration thereof with full power of
substitution in the premises.
Dated:
NOTICE: Signature(s)must be guaranteed by an NOTICE: The signature to this assignment must
eligible guarantor institution participating in a correspond with the name as it appears on the
Securities Transfer Association recognized face of the within bond in every particular,
signature guarantee program. without alteration or enlargement or any change
whatsoever.
SECTION VIII. Authorization for Preparation and Sale of the Bonds and BANs;
Official Statement. (a) The Controller is hereby authorized and directed to have the Bonds and
BANs prepared, and the Mayor and Clerk are hereby authorized and directed to execute and attest
the Bonds and BANs in the form and manner provided herein. The Controller is hereby authorized
and directed to deliver the Bonds and BANs to the respective purchasers thereof. At the time of
delivery of the Bonds and BANs,the Controller shall collect the full amount which the respective
purchasers have agreed to pay therefor,which amount shall not be less than 99%of the face amount
of the BANs and not less than 99%of the face value of the Bonds,plus accrued interest to the date
of delivery,if any. The City may receive payment for the BANs or the Bonds in installments. The
Bonds, as and to the extent paid for and delivered to the purchaser, shall be the binding special
revenue obligations of the City payable out of the Net Revenues of the waterworks to be set aside
into the Sinking Fund as herein provided. The proceeds derived from the sale of the Bonds shall
be and are hereby set aside for application to the cost of the Project hereinbefore referred to, the
refunding of the BANs, if issued, and the expenses necessarily incurred in connection with the
BANs and Bonds. The proper officers of the City are hereby directed to sell the Bonds, to draw
all proper and necessary warrants, and to do whatever acts and things which may be necessary to
carry out the provisions of this Ordinance.
(b) As an alternative to public sale, the Controller may negotiate the sale of the
BANs or Bonds to the Authority as part of its IFA Program. The Mayor and the Controller are
hereby authorized to (i) submit an application to the Authority as part of its IFA Program, (ii)
execute a Financial Assistance Agreement with the Authority with terms conforming to this
ordinance, and (iii) sell such BANs or Bonds upon such terms as are acceptable to the Mayor and
the Controller consistent with the terms of this Ordinance. The substantially final form of Financial
Assistance Agreement attached hereto as Exhibit B and incorporated herein by reference is hereby
approved by this Common Council,and the Mayor and Controller are hereby authorized to execute
and deliver the same, and to approve any changes in form or substance to the Financial Assistance
Agreement which are consistent with the terms of this Ordinance, such changes to be conclusively
evidenced by such execution.
(c) The BANs and Bonds(other than BANs and Bonds sold to the Authority as
part of its IFA Program) may, to the extent required by law, be offered and sold pursuant to an
Official Statement with respect to the BANS or Bonds. Distribution of an Official Statement
(preliminary and final) prepared by the Municipal Advisor, on behalf of the City, is hereby
authorized and approved, and the Mayor and Controller are authorized and directed to execute the
Official Statement on behalf of the City in a form consistent with this Ordinance. The Mayor or
the Controller is authorized to designate the preliminary Official Statement as "nearly final" for
purposes of Rule 15c2-12 as promulgated by the Securities and Exchange Commission ("Rule").
In the alternative, the Mayor may obtain an investment letter from the purchaser of the Bonds in a
form satisfactory to the City's attorney and bond counsel.
SECTION IX. Bond Sale Notice. Unless the Bonds are sold to the Authority
pursuant to the IFA Program or Indiana law permits the sale of the Bonds by negotiated sale at the
time of the issuance of the Bonds or any series thereof, the Bonds shall be sold at a competitive
sale. The Controller shall cause to be published a notice of intent to sell in a newspaper published
or of general circulation in the City, and in the Indianapolis Business Journal, a newspaper of
general circulation published in the City of Indianapolis, Indiana, all in accordance with I.C. 5-1-
11 and I.C. 5-3-1. The notice shall state the character and amount of the Bonds,the maximum rate
of interest thereon, 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 shall deem
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advisable. The notice may provide, among other things, that the winning bidder shall submit to
the City a certified or cashier's check (or wire transfer such amount) not later than a time
determined by the City to guarantee performance on the part of the winning bidder. In the event
the successful bidder shall fail or refuse to accept delivery of the Bonds and pay for the same as
soon as the Bonds are ready for delivery, or at the time fixed in the notice of sale,then said check
and the proceeds thereof shall be the property of the City and shall be considered as its liquidated
damages on account of such default. The notice may also provide that bidders for the Bonds will
be required to name the rate or rates of interest which the Bonds are to bear, not exceeding the
maximum rate hereinbefore fixed, and that such interest rate or rates shall be in multiples of one-
eighth(1/8) or one-hundredth(1/100) of one percent(1%). No conditional bid will be considered.
The opinion of Barnes &Thornburg LLP, South Bend, Indiana,bond counsel for the City("Bond
Counsel"), approving the legality of the Bonds, will be furnished to the purchaser at the expense
of the City.
The Bonds shall be awarded by the Controller to the best bidder who has submitted its bid
in accordance with the terms of this Ordinance, I.C. 5-1-11 and the notice. The best bidder will
be the one who offers the lowest net interest cost to the City, to be determined by computing the
total interest on all of the Bonds to their maturities, deducting the premium bid, if any and adding
thereto the discount bid, if any. The right to reject any and all bids shall be reserved. If an
acceptable bid is not received on the date of sale, the sale may be continued from day to day
thereafter without further advertisement for a period of thirty (30) days, during which time no bid
which provides a higher net interest cost to the City than the best bid received at the time of the
advertised sale will be considered.
Notwithstanding anything in this Ordinance to the contrary and in lieu of a competitive
sale of the Bonds pursuant to this Section IX and in the event Indiana law then permits a negotiated
sale of the Bonds or any series thereof, the Mayor and the Controller, upon consultation with the
Municipal Advisor, may determine to provide for the Bonds to be sold through a negotiated sale
in the manner and upon the terms and conditions set forth in a purchase agreement between the
City and an underwriter, bank, financial institution or other purchaser (the "Purchaser") to be
selected by the Mayor and the Controller, at such prices and on such terms as may be determined
at the time of such sale and approved by the Mayor and the Controller. The Mayor and the
Controller are hereby authorized to approve and execute a bond purchase agreement(the"Purchase
Agreement") for the Bonds with the Purchaser,in a form and substance approved by such officers,
such approval to be conclusively evidenced by the execution thereof. Such Purchase Agreement
may set forth the definitive terms and conditions for such sale, but all such terms and conditions
must be consistent with the terms and conditions of this Ordinance, including without limitation,
the interest rate or rates on the Bonds which shall not exceed the maximum rate of interest for the
Bonds authorized pursuant to this Ordinance.
Prior to the delivery of each series of Bonds, the Controller is authorized to investigate,
negotiate and obtain municipal bond insurance, other forms of credit enhancement, and/or credit
ratings on the Bonds. The costs of obtaining any such municipal bond 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 cost of issuance of the Bonds of such
series and shall be paid out of the proceeds of the sale of the Bonds of such series
SECTION X. Financial Records and Accounts; Continuing Disclosure. (a) The
City shall keep proper records and books of account, separate from all of its other records and
accounts, in which complete and correct entries shall be made showing all revenues received on
account of the operation of the waterworks and all disbursements made therefrom and all
transactions relating to the waterworks. Copies of all such statements and reports shall be kept on
file in the office of the Controller.
(b) If any series of Bonds are subject to the Rule, a Continuing Disclosure
Undertaking Agreement ("Disclosure Agreement") for the Bonds is hereby authorized and
approved by the Common Council,and the Mayor or Controller are hereby authorized and directed
to complete, execute and attest the same on behalf of the City. Notwithstanding any other
provisions of this Ordinance, failure of the City to comply with the Disclosure Agreement shall
not be considered an event of default under the Bonds or this Ordinance.
SECTION XI. Use of Proceeds and Costs of Issuance. Any accrued interest
received shall be deposited into the Bond and Interest Account of the Waterworks Sinking Fund
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and used to pay interest on the Bonds. The remaining proceeds from the sale of the Bonds, to the
extent not used to refund BANs, and BAN proceeds shall be deposited in a bank or banks which
are legally designated depositories for the funds of the City, in a special account or accounts to be
designated as"City of South Bend,Waterworks Construction Account"("Construction Account").
All funds deposited to the credit of the Waterworks Sinking Fund or the Construction Account
shall be deposited, held, secured or invested in accordance with the laws of the State of Indiana
relating to the depositing,holding, securing or investing of public funds,including particularly I.C.
5-13, I.C. § 5-1.2-1 through I.C. § 5-1.2-4, I.C. § 5-1.2-10, I.C. § 5-1.2-11, I.C. § 5-1.2-14 and/or
I.C. § 5-1.2-14.5, as amended and supplemented. The funds in the Construction Account shall be
expended only for the purpose of paying the cost of the Project, refunding the BANs, if issued, or
as otherwise required by the Act or for the expenses of issuance of the Bonds. The cost of obtaining
the legal services of Bond Counsel and the services of the Municipal Advisor shall be considered
as a part of the cost of the Project on account of which the Bonds and BANs are issued. Any
balance or balances remaining unexpended in such special account or accounts after completion
of the Project which are not required to meet unpaid obligations incurred in connection with such
Project shall either(1)be paid into the Waterworks Sinking Fund and used solely for the purposes
of said Waterworks Sinking Fund or(2)be used for the same purpose or type of project for which
the Bonds were originally issued, all in accordance with I.C. 5-1-13, as amended and
supplemented. With respect to any BANs or Bonds sold to the Authority as part of its IFA
Program, to the extent that(a) the total principal amount of the BANs or Bonds is not paid by the
purchaser or drawn down by the City, or(b)proceeds remain in the Construction Account and are
not applied to the Project (or any modifications or additions thereto approved by the Authority),
the City shall reduce the principal amount of the remaining Bond maturities to effect such
reduction in amounts which will still achieve the annual debt service as described in Section III(b)
subject to and upon the terms set forth in the Financial Assistance Agreement.
SECTION XII. Pledge of Net Revenues: Payment of Principal and Interest. The
Bonds, and any bonds ranking on a parity therewith, including the Prior Bonds, as to principal,
premium,if any,and interest,shall be payable solely from and are secured by an irrevocable pledge
of and shall constitute a charge upon all the Net Revenues (as defined in the following sentence)
of the works. The term "Net Revenues," as used herein, shall be defined as the gross revenues of
the works, including System Development Charges, after deduction only for the payment of the
reasonable expenses of operation, repair and maintenance of the works, and which reasonable
expenses of operation, repair and maintenance specifically do not include any rates or charges in
lieu of taxes made and collected by the works and transferred to the City in accordance with the
Act (the "PILOT Payment"). The City specifically subordinates its right to receive any PILOT
Payment to the rights of the holders of the Bonds, and any Parity Bonds,including the Prior Bonds,
to receive payment of the principal,premium, if any, and interest,payable on such bonds. PILOT
Payments may be made only if all monthly deposits required by this Ordinance are current and
held as of such dates in the Operation and Maintenance Fund and the Sinking Fund(each as defined
herein). Other than PILOT Payments and normal and regular pro rata payments to the City for
shared expenses charged by the City to its various departments, no moneys derived from the
revenues of the works shall be transferred to the General Fund of the City or be used for any
purpose not connected with the works. For purposes of this ordinance, "System Development
Charges" shall mean the proceeds and balances from any non-recurring charges related to or
associated with the waterworks of the City such as tap fees, subsequent connector fees, capacity
or contribution fees, and other similar one-time charges that are available for deposit under this
ordinance.
SECTION XIII. Revenue Fund. There is hereby continued a fund of the utility
created and designated in the Prior Ordinances as the Revenue Fund (the "Revenue Fund"). All
income and revenues derived from the operation of the works (including System Development
Charges) shall be paid into the Revenue Fund for application as described below. All monies
deposited in the Revenue Fund may be invested in accordance with the provisions of I.C. § 5-13-
9, as amended, and other applicable laws. The Revenue Fund shall be maintained separate and
apart from all other accounts of the City. No monies derived from the revenues of the System shall
be transferred to the General Fund of the City, or be used for any purpose not connected with the
Waterworks, including without limitation Pilot Payments, except as provided by Section XII
hereof.
SECTION XIV. Operation and Maintenance Fund. There is hereby continued a fund
of the utility created and designated in the Prior Ordinances as the Operation and Maintenance
Fund (the "Operation and Maintenance Fund") (also shown on the books of the utility as the
Operating Fund). There shall be transferred from the Revenue Fund and credited to the Operation
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and Maintenance Fund, on the last day of each calendar month, a sufficient amount so that the
balance in this Fund shall be sufficient to pay the expenses of operation, repair and maintenance
for the then next succeeding two (2) calendar months. The moneys credited to this Fund shall be
used for the payment of the reasonable and proper operation, repair and maintenance expenses of
the works on a day-to-day basis, but none of the moneys in the Operation and Maintenance Fund
shall be used for depreciation, replacements, improvements, extensions or additions or transfer of
any PILOT Payment. Any balance in Operation and Maintenance Fund in excess of the expected
expenses of operation, repair and maintenance for the next succeeding two calendar months may
be transferred to the Sinking Fund if necessary to prevent a default in the payment of principal of
or interest on the outstanding bonds of the works, including the Prior Bonds, the Bonds, and any
Parity Bonds.
SECTION XV. Sinking Fund. There is hereby continued a fund of the utility created
and designated in the Prior Ordinances as the Sinking Fund (the "Sinking Fund"), to be used for
the payment of the principal of and interest on bonds which by their terms are payable from the
Net Revenues, and for the payment of any fiscal agency charges in connection with such payment.
The Sinking Fund is divided into two accounts designated as the Bond and Interest Account and
the Debt Service Reserve Account, which are pledged for the purposes set forth below. There
shall be set aside and deposited in the Sinking Fund, as available, and as hereinafter provided, a
sufficient amount of the Net Revenues to meet the requirements of the Bond and Interest Account
(also shown on the books of the utility as the Bond Sinking Fund) and of the Debt Service Reserve
Account. Such payments shall continue until the balance in the Bond and Interest Account, plus
the balance in the Debt Service Reserve Account, equals the amount needed to redeem all of the
then outstanding bonds.
If the Bonds are sold to the Authority as part of its IFA Program, or, the Bonds are not
purchased by the Authority, than so long as the 2009A Bonds are outstanding, the Sinking Fund,
containing the Principal and Interest Account and the Debt Service Reserve Account, and/or the
Construction Account,may be held by a financial institution acceptable to the Authority as part of
its IFA Program, pursuant to terms acceptable to the Authority. If the Sinking Fund and the
accounts therein are held in trust, the City shall transfer the monthly required amounts of Net
Revenues to the Principal and Interest Account and the Debt Service Reserve Account in
accordance with this Section XV, and the financial institution holding such funds in trust shall be
instructed to pay the required payments in accordance with the payment schedules for the City's
outstanding bonds. The Mayor and Controller are hereby authorized to execute and deliver an
agreement with a financial institution to reflect this trust arrangement for the Sinking Fund and/or
the Construction Account. The financial institution selected to serve in this role may also serve as
the Registrar and the Paying Agent for any outstanding bonds of the City.
(a) Principal and Interest Account. After making the credit to the Operation
and Maintenance Fund,there shall be transferred, on the last day of each calendar month, from the
Revenue Fund and credited to the Bond and Interest Account an amount equal to the sum of one-
twelfth (1/12) of the principal and one-sixth (1/6) of the interest on all then outstanding bonds
payable from Net Revenues on the next succeeding principal and interest payment dates, until the
amount so credited shall equal the principal payable during the next succeeding twelve (12)
calendar months and the interest payable during the next succeeding six (6) calendar months
through January 1, 2033. After that an amount equal to the sum of one-sixth(1/6) of the principal
and 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 and
interest payable during the next succeeding six (6) calendar months. There shall similarly be
credited to the account any amount necessary to pay when due the bank fiscal agency charges for
paying principal of and interest on the bonds as the same become payable. The City shall, from
the sums deposited in the Sinking Fund and credited to the Bond and Interest Account, remit
promptly to the bank fiscal agency sufficient moneys to pay the principal and interest on the due
dates thereof together with the amount of bank fiscal agency charges.
In no event shall any part of the Sinking Fund be used in calling Bonds for redemption
prior to their respective maturities, except to the extent that the amount then in the Sinking Fund
exceeds the amount required to pay the Bonds which will mature within a period of twelve (12)
calendar months next following the date of such redemption, together with all interest on Bonds
payable in such period. Any such excess of funds above such required level may also be used in
purchasing outstanding bonds at a price less than the then-applicable redemption price, with the
prior approval of the City. Monies in the Sinking Fund shall not be used for any other purpose
whatsoever except as provided in this Ordinance.
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(b) Debt Service Reserve Account. The 2009A Subaccount in the Debt Service
Reserve Account established pursuant to the 2009 Ordinance for the 2009A Bonds (the "2009A
Subaccount") is hereby continued. In the event the Bonds or any series thereof authorized
hereunder (for purposes of this Section XV such Bonds or series thereof are referred to as the
"2023 Bonds"and the term"Bonds"means the 2023 Bonds issued hereunder and all Parity Bonds)
are sold to the Authority as part of its IFA Program,the 2009A Subaccount shall serve as a reserve
subaccount also for the 2023 Bonds and any Parity Bonds hereafter issued by the City (and as
such, the 2009A Bonds Subaccount shall hereinafter be known as the "Common Reserve
Subaccount"). Upon the issuance of the 2023 Bonds, the City may deposit Bond proceeds, funds
on hand, or a combination thereof into the Common Reserve Subaccount to satisfy the Reserve
Requirement(as defined herein). The Debt Service Reserve Account(excluding any subaccounts
established or continued for any of the Bonds (each, a "Subaccount", and collectively, the
"Subaccounts")) shall constitute the margin for safety and as protection against default in the
payment of principal of and interest on the Bonds (as hereinafter defined) (excluding any Bonds
for which a Subaccount was established or continued),and the moneys in the Debt Service Reserve
Account (excluding any Subaccounts) shall be used to pay current principal and interest on the
Bonds (excluding any Bonds for which a Subaccount was established or continued) to the extent
that moneys in the Bond and Interest Account are insufficient for that purpose. The Common
Reserve Subaccount shall constitute the margin for safety and as protection against default in the
payment of principal of and interest on the 2023 Bonds, the 2009A Bonds, and any Parity Bonds
hereafter issued by the City, and the moneys in such Common Reserve Subaccount shall be used
to pay current principal and interest on the outstanding 2023 Bonds, the 2009A Bonds, or any
Parity Bonds hereafter issued by the City to the extent that moneys in the Bond and Interest
Account are insufficient for that purpose.
(c) No amounts in the Common Reserve Subaccount shall be available to pay
any principal of or interest or redemption premium, if any, on any Bonds, except the 2023 Bonds,
the 2009A Bonds and any Parity Bonds hereafter issued by the City.
(d) No amounts in the Debt Service Reserve Account shall be available to pay
any principal of or interest or redemption premium, if any, on any of the 2023 Bonds, the 2009A
Bonds and any Parity Bonds hereafter issued by the City, except that any amounts in the Common
Reserve Subaccount of the Debt Service Reserve Account shall be available to pay the principal
of or interest or redemption premium, if any, on the 2023 Bonds,the 2009A Bonds,and any Parity
Bonds hereafter issued by the City.
(e) In this Ordinance the term"Parity Bonds"means any and all bonds ranking
on a parity with the 2023 Bonds issued hereunder (including the Prior Bonds) which are (i) now
outstanding or issued in the future by the City on a parity with the 2023 Bonds in accordance with
the restrictions imposed by this Ordinance and (ii) payable from the Net Revenues of the
Waterworks.
(f) In this Ordinance, the term "Reserve Requirement" for the Bonds
(excluding any Bonds for which a Subaccount was established) means the least of: (i) the
maximum annual debt service on the Bonds (excluding any Bonds for which a Subaccount was
established), (ii) 125% of the average annual debt service on the Bonds (excluding any Bonds for
which a Subaccount was established), or (iii) 10% of the proceeds of the Bonds (excluding any
Bonds for which a Subaccount was established); provided, however, that the "Reserve
Requirement"for the Bonds(excluding any Bonds for which a Subaccount was established)which
are sold to the Authority through the IFA Program means the maximum annual debt service on the
Bonds, the Prior Bonds, and any Parity Bonds (excluding any Bonds for which a subaccount was
established). In this Ordinance,the term"Reserve Requirement"for the 2023 Bonds of each series
means the least of: (i) the maximum annual debt service on the 2023 Bonds of such series, (ii)
125% of the average annual debt service on the 2023 Bonds of such Series, or (iii) 10% of the
proceeds of the 2023 Bonds of such series; provided, however, that the "Reserve Requirement"
for the 2023 Bonds of each series which are sold to the Authority through the IFA Program means
the maximum annual debt service on the 2023 Bonds of such series, the 2009A Bonds and any
Parity Bonds hereafter issued by the City.
(g) Subject to Section XV(i) and Section XV(j)below, the City shall maintain
in the Debt Service Reserve Account(excluding any Subaccounts)an amount equal to the Reserve
Requirement for the Bonds (excluding any Bonds for which a Subaccount was established).
Subject to Section XV(h)and Section XV(i)below,the City shall maintain in the Common Reserve
Subaccount of the Debt Service Reserve Account for the 2023 Bonds or each series thereof an
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amount equal to the Reserve Requirement for the 2023 Bonds or such series thereof, the 2009A
Bonds, and any Parity Bonds hereafter issued by the City.
(h) To the extent that the amount in the Debt Service Reserve Account
(excluding any Subaccounts) on the date of the issuance of the 2023 Bonds or any series thereof
is less than the Reserve Requirement for the Bonds (excluding any Bonds for which a Subaccount
was established), that portion of the shortfall which exists as of the date of issuance of the 2023
Bonds or such series thereof shall, at the election of the Mayor and Controller with the advice of
the Municipal Advisor, be deposited into the Debt Service Reserve Account (excluding any
Subaccounts) either (i) in a single payment, to be paid on the date of the issuance of the 2023
Bonds or such series thereof, or (ii) in equal monthly installments, over a period not to exceed
sixty(60)months after the date of issuance of the 2023 Bonds or such series thereof, with the first
installment due and payable on the date of the issuance of the 2023 Bonds or such series thereof,
and the remaining installments payable on the last day of each calendar month, commencing on
the last day of the month in which the 2023 Bonds or such series thereof are issued. To the extent
that the amount on deposit in the Common Reserve Subaccount of the Debt Service Reserve
Account on the date of issuance of the 2023 Bonds or any series thereof is equal to less than the
Reserve Requirement for the Series 2023 Bonds or any series thereof, that portion of the shortfall
which exists as of the date of issuance of the 2023 Bonds or such series thereof shall, at the election
of the Mayor and Controller with the advice of the Municipal Advisor, be deposited into such
Common Reserve Subaccount either(i) in a single payment, to be paid on the date of the issuance
of the 2023 Bonds or such series thereof, or (ii) in equal monthly installments, over a period not
to exceed sixty (60) months after the date of issuance of the 2023 Bonds or such series thereof,
with the first installment due and payable on the date of the issuance of the 2023 Bonds or such
series thereof, and the remaining installments payable on the last day of each calendar month,
commencing on the last day of the month in which the 2023 Bonds or such series thereof are
issued.
(i) To the extent that Parity Bonds are issued subsequent to the issuance of the
2023 Bonds or any series thereof,the additional amounts,if any,which are required to be paid into
the Common Reserve Subaccount to satisfy the Reserve Requirement as a result of the issuance of
such Parity Bonds shall, at the election of the Mayor and Controller with the advice of the
Municipal Advisor, be deposited into the Debt Service Reserve Account either (i) in a single
payment, to be paid on the date of the issuance of such Parity Bonds, or (ii) in equal monthly
installments,over a period not to exceed sixty(60)months after the date of issuance of such Parity
Bonds,with the first installment due and payable on the date of the issuance of such Parity Bonds,
and the remaining installments payable on the last day of each calendar month, commencing on
,the last day of the month in which such Parity Bonds are issued.
(j) Subject to Section XV(h) and Section XV(i) above, any deficiency in the
balance maintained in the Debt Service Reserve Account (excluding any Subaccounts) or any
Subaccounts shall be promptly made up from the next available Net Revenues after credits into
the Bond and Interest Account, on a pro rata basis, calculated by reference to the amount of the
deficiency in the Debt Service Revenue Account (excluding any Subaccounts) and each
Subaccount. Any moneys in the Debt Service Reserve Account (excluding any Subaccount) in
excess of the Reserve Requirement for the Bonds (excluding any Bonds for which a Subaccount
was established) and any moneys in the Common Reserve Subaccount for the 2023 Bonds or any
series thereof, the 2009A Bonds and any Parity Bonds hereafter issued by the City, may be used
for the prepayment of installments of principal, together with interest due thereon, on the then
outstanding Bonds which are then callable or prepayable,or for the purchase of outstanding Bonds
or installments of principal of and interest on the Bonds at a price not exceeding par and accrued
interest, or may be transferred to the Improvement Fund.
(k) As an alternative to holding cash funds in the Debt Service Reserve Account
or any Subaccount, the City, with the advice of the Municipal Advisor and nationally recognized
bond counsel, may satisfy all or any part of its obligation to maintain any amount in the Debt
Service Reserve Account or such Subaccount by depositing a Credit Facility (as defined in the
next sentence)therein(which,for any 2023 Bonds sold to the Authority through the IFA Program,
will require the written consent of the Authority to the deposit of any such Credit Facility),
provided that such deposit does not adversely affect any then existing rating on the Bonds. A
"Credit Facility" is hereby defined as a letter of credit, liquidity facility, insurance policy or
comparable instrument furnished by a bank, insurance company, financial institution or other
entity pursuant to a reimbursement agreement or similar instrument between such entity and the
City. To the extent that any Bonds are insured, and the Credit Facility is not being provided by
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the insurer of such Bonds, such insurance policy shall be subject to the insurer's prior written
consent.
(1) In the event a draw is made against the Credit Facility in the Debt Service
Reserve Account or any Subaccount, the City shall repay the amount of the draw and related
expenses incurred by the issuer(s)of the Credit Facility(the"Credit Facility Issuer")together with
interest thereon at the rate specified in the Credit Facility and/or the related Credit Facility
Agreement (as defined below). The repayment of the draw amount, related expenses and accrued
interest (the "Credit Facility Costs") shall be paid from the funds that would have been set aside
above to replenish the Debt Service Reserve Account or such Subaccount, respectively.
Repayment of the Credit Facility Costs shall commence in the first month following each draw, in
an amount equal to no less than one twelfth(1/12) of the aggregate Credit Facility Costs related to
such draw("Monthly Installments"). Each Monthly Installment shall be deposited by the City into
the Debt Service Reserve Account or such Subaccount, respectively, and then payments shall be
made from the Debt Service Reserve Account or such Subaccount, respectively, to pay Credit
Facility Costs.
(m) If and to the extent cash has been deposited to the Debt Service Reserve
Account or any Subaccount(other than Monthly Installments to pay Credit Facility Costs),all such
cash(or permitted investments)shall be used prior to any drawing under the Credit Facility therein,
and repayment of any Credit Facility Costs shall be made prior to replenishment of any such cash
amounts.
(n) If, in addition to the Credit Facility in the Debt Service Reserve Account or
any Subaccount, any other reserve account substitute instrument ("Additional Credit Facility") is
provided, drawings under the Credit Facility and any such Additional Credit Facility, and
repayment of Credit Facility Costs and reimbursement of amounts due under the Additional Credit
Facility, shall be made on a pro-rata basis (calculated by reference to the maximum amounts
available thereunder) after applying all available cash therein and prior to replenishment of any
such cash draws, respectively.
(o) The City acknowledges that: (i) at the time that the 2009A Bonds were
issued, the City, pursuant to the 2009 Ordinance, continued within the Debt Service Reserve
Account a subaccount for the 2009A Bonds (the "2009A Subaccount"); (ii) except as modified
hereby in the event the 2023 Bonds are sold to the Authority through the IFA Program, such 2009A
Subaccount constitutes the margin for safety and as protection against default in the payment of
principal of and interest on the 2009A Bonds; (iii) except as modified hereby in the event the 2023
Bonds are sold to the Authority through the IFA Program, the moneys in such 2009A Subaccount
shall be used to pay current principal and interest on the 2009A Bonds, to the extent that moneys
in the Bond and Interest Account are insufficient for that purpose; (iv); the 2009A Bonds were
sold to the Authority pursuant to its IFA Program and, pursuant to the 2009 Ordinance, the
"Reserve Requirement" for the 2009A Bonds for which the 2009A Subaccount was established
means the maximum annual debt service on the 2009A Bonds; and (v) each of the provisions in
the 2009A Ordinance pertaining to the 2009A Subaccount remain in full force and effect.
SECTION XVI. Improvement Fund. After meeting the requirements of the
Operation and Maintenance Fund and the Sinking Fund, any excess revenues may be transferred
from the Revenue Fund and credited to the special utility fund hereby continued which was created
and designated in the Prior Ordinances as the "Waterworks Improvement Fund" (the
"Improvement Fund") (also shown on the books of the utility as the Depreciation Fund), and said
Fund shall be used for improvements, replacements, additions and extensions of the works and
transfer of any PILOT Payment; provided however, such PILOT Payment shall be in accordance
with the Act. Moneys in the Improvement Fund shall be transferred to the Sinking Fund if
necessary to prevent a default in the payment of principal of and interest on the then outstanding
bonds or, if necessary, to eliminate any deficiencies in credits to or minimum balance in the Debt
Service Reserve Account of the Sinking Fund, or may be transferred to the Operation and
Maintenance Fund to meet unforeseen contingencies in the operation and maintenance of the
works.
SECTION XVII. Investment of Funds. The Revenue Fund and the Sinking Fund each
shall be deposited in and maintained as a separate bank account or accounts from all other bank
accounts of the City. The Operation and Maintenance Fund and the Improvement Fund may be
maintained in a single bank account or accounts,but such bank account or accounts shall likewise
be maintained separate and apart from the Revenue Fund and the Sinking Fund and all other bank
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accounts of the City (including without limitation any Funds and accounts relative to any other
utility of the City beyond the System). 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 the provisions of I.C. § 5-13-9, I.C. § 5-1.2-1 through I.C. § 5-1.2-
4, I.C. § 5-1.2-10, I.C. § 5-1.2-11, I.C. § 5-1.2-14 and/or I.C. § 5-1.2-14.5 (as applicable), as each
are 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. In no
event shall any of the revenues of the Waterworks be transferred or used for any purpose not
authorized by this Ordinance so long as any of the bonds of the Waterworks issued pursuant to the
provisions of this Ordinance shall be outstanding. Investment income earned on monies in the
funds and accounts established by this Ordinance shall become a part of the funds and accounts
invested and shall be used only as provided in this Ordinance. Nothing in this Section or elsewhere
in this Ordinance shall be construed to require that separate bank accounts be established and
maintained for the Funds and Accounts continued and/or created by this Ordinance except that(a)
the Sinking Fund and Construction Fund shall be maintained as a separate bank account from the
other Funds and Accounts of the Waterworks and (b) the other Funds and Accounts of the
Waterworks shall be maintained as a separate bank account from the other funds and accounts of
the City (including without limitation any Funds and accounts relative to any other utility of the
City beyond the System).
SECTION XVIII. Financial Records and Accounts. The City shall keep proper records
and books of account, separate from all of its other records and accounts, in which complete and
correct entries shall be made showing all revenues received on account of the operation of the
utility and all disbursements made therefrom and all transactions relating to the utility. The City
shall maintain on file the audited financial statements of the utility prepared by the State Board of
Accounts. There shall be furnished, upon written request, to any owner of the Bonds, the most
recent copy of the audited financial statements of the utility prepared by the State Board of
Accounts. Copies of all such statements and reports shall be kept on file in the office of the
Controller. If any BANs or Bonds are sold to the Authority as part of its IFA Program, the City
shall establish and maintain the books and other financial records of the Project (including the
establishment of a separate account or subaccount for the Project) and the waterworks in
accordance with (i) generally accepted governmental accounting standards for utilities, on an
accrued basis, as promulgated by the Government Accounting Standards Board and (ii) the rules,
regulations and guidance of the State Board of Accounts.
SECTION XIX. Rate Covenant. The City, by and through the Board and to the
fullest extent permitted by law, shall establish, fix, maintain and collect reasonable and just rates
and charges for the use of and the services rendered by the works so that such rates and charges
shall produce revenues at least sufficient in each year to (a) pay all the legal and other necessary
expenses incident to the operation of the works, including maintenance costs, operating charges,
upkeep, repairs, and interest charges on bonds or other obligations, including leases; (b)provide a
sinking fund for the liquidation of bonds or other obligations, including leases; (c) provide a debt
service reserve on bonds or other obligations, including leases, as required by the terms of such
obligations;(d)prove adequate money for working capital;(e)provide adequate money for making
extensions and replacements; and (f) provide money for the payment of any taxes that may be
assessed against the works. So long as any of the Bonds are outstanding, none of the facilities and
services afforded by the works shall be furnished without a reasonable and just charge being made
therefor.
SECTION XX. Defeasance. 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 thereof for redemption shall
have been given, and the whole amount of the principal, premium, if any, and the interest so due
and payable upon such Bonds or any portion thereof then outstanding shall be paid, or(i)cash, (ii)
direct non-callable obligations of(including obligations issued or held in book-entry form on the
books of) the U.S. Department of the Treasury, the principal of and the interest on which when
due without reinvestment will provide sufficient money, or(iii) any combination of the foregoing,
shall be held irrevocably in trust for such purpose, and provision shall also be made for paying all
fees and expenses for the payment, then and in that case the Bonds or such designated portion
thereof shall no longer be deemed outstanding or secured by this Ordinance or entitled to the pledge
of the Net Revenues.
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SECTION XXI. Additional Bonds. The City reserves the right to authorize and issue
additional BANs at any time ranking on parity with the BANs. The City also reserves the right to
issue additional bonds payable out of the Net Revenues ranking on a parity with the Bonds for the
purpose of financing the cost of future additions, extensions and improvements to the works, or to
provide for a complete or partial refunding of obligations, subject to the following conditions
precedent:
(a) The interest on and principal of all bonds payable from the Net Revenues
shall have been paid to date in accordance with the terms thereof, and all required payments into
the Sinking Fund required by this Ordinance shall have been made. The Common Reserve
Subaccount shall serve as the reserve for the Parity Bonds, and the Reserve Requirement shall be
satisfied for the Parity Bonds either at the time of delivery of the Parity Bonds or over a five-year
or shorter period,in a manner which is commensurate with the requirements established in Section
XV(i) of this Ordinance.
(b) The Net Revenues in the fiscal year immediately preceding (or the fiscal
year prior to the immediately preceding fiscal year if the additional Parity Bonds close within 90
days of the end of the calendar year) the issuance of any such bonds ranking on a parity with the
Bonds shall be not less than one hundred twenty-five percent (125%) of the maximum annual
principal and interest requirements of the then outstanding bonds (including the Bonds and the
Prior Bonds) and the Parity Bonds proposed to be issued; or, prior to the issuance of the 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 (or the fiscal year prior to the immediately
preceding fiscal year if the additional Parity Bonds closed within 90 days of the end of the calendar
year) would have produced Net Revenues for the year equal to not less than one hundred twenty-
five percent (125%) of the maximum annual principal and interest requirements of the then
outstanding bonds and the Parity Bonds proposed to be issued. For purposes of this subsection,
the records of the works shall be analyzed and all showings shall be prepared by an independent
certified public accountant employed by the City for that purpose. In addition, for purposes of this
subsection, with respect to any Parity Bonds hereafter issued while the Bonds remain outstanding
and owned by the Authority as part of its IFA Program, Net Revenues may not include any
revenues from the System Development Charges unless the Authority provides its consent to
include all or some portion of the System Development Charges as part of the Net Revenues or
otherwise consents to the issuance of such Parity Bonds without satisfying this subsection(b).
(c) To the extent required by law, the issuance of the proposed 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 principal of,or mandatory sinking fund redemption dates for said Parity
Bonds shall be payable annually on January 1 through January 1, 2033, and on January 1 on July
1 thereafter, and the interest shall be payable semi-annually on January 1 and July 1 during the
periods such principal and interest are payable while the Bonds and Prior Bonds are outstanding.
(e) So long as the 2009A Bonds or if the Bonds or any other Parity Bonds are
sold to the Authority through the IFA Program remain then outstanding, (i) the City shall obtain
the consent of the Authority to the issuance of the proposed Parity Bonds; (ii) each of the City and
the Common Council shall have faithfully performed and is in compliance with each of its
obligations, agreements, and covenants contained in the Financial Assistance Agreement and this
Ordinance; and (iii)the City is in compliance with its System permits, except for noncompliance,
the elimination of which is a purpose for which the Parity Bonds, including any refunding bonds,
are issued, so long as such issuance constitutes part of an overall plan to eliminate such
noncompliance.
SECTION XXII. Further Covenants of the City. For the purpose of further
safeguarding the interests of the owners of the Bonds and BANs, it is hereby specifically provided
as follows:
(a) All contracts let by the City in connection with the construction of the
Project shall be let after due advertisement as required by the laws of the State of Indiana, and all
contractors shall be required to furnish surety bonds in an amount equal to 100%of the amount of
such contracts,to insure the completion of said contracts in accordance with their terms, and such
contractors shall also be required to carry such employers' liability and public liability insurance
- 21 -
as is 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 constructed under plans and specifications approved by
a competent engineer designated by the City. All estimates for work done or material furnished
shall first be checked by the engineer and approved by the City.
(c) The City, through the Board, shall at all times maintain the works in good
condition, and operate the same in an efficient manner and at a reasonable cost.
(d) So long as any of the Bonds or BANs are outstanding,the City,through the
Board, shall acquire and maintain insurance coverage, acceptable to the Authority as part of the
IFA Program, on the insurable parts of the Waterworks, of a kind and in an amount such as would
normally be carried by private entities engaged in a similar type of business. All insurance shall
be placed with responsible insurance companies qualified to do business under the laws of the
State of Indiana. As an alternative to maintaining such insurance, the City may maintain a self-
insurance program with catastrophic or similar coverage so long as such program meets the
requirements of any applicable laws or regulations and is maintained in a manner consistent with
programs maintained by similarly situated municipalities. Insurance proceeds or self-insurance
proceeds shall be used in replacing or repairing the Waterworks or, unless the Authority shall
consent to a different use of such proceeds or awards if the 2009A Bonds remain outstanding or
any of the Bonds are sold to or are owned by the Authority as part of its IFA Program, or, if no
bonds are sold to or are owned by the Authority as part of its IFA Program and such proceeds or
awards or if not used for that purpose, shall be treated and applied as Net Revenues.
(e) So long as any of the Bonds or BANs are outstanding, the City shall not
mortgage,pledge or otherwise encumber the works, or any part thereof, and shall not sell, lease or
otherwise dispose of any part of the same, excepting only such machinery, equipment or other
property as may be replaced,or shall no longer be necessary for use in connection with said utility;
provided, the foregoing restrictions shall not apply to the extent approved otherwise in writing by
the owners of all Bonds or BANs then outstanding, including the Authority if the Series 2009A
Bonds are then outstanding or if any of the Bonds or Parity Bonds are sold to the Authority as part
of its IFA Program, and the City receives an opinion of nationally recognized bond counsel to the
effect that the transaction will not cause the interest on the Bonds or BANs to be included in gross
income for federal income tax purposes.
(f) Except as otherwise specifically provided in Section XXI of this Ordinance
and in the Prior Ordinances,so long as any of the BANs or the Bonds are outstanding,no additional
bonds or other obligations pledging any portion of the revenues of the works shall be issued by the
City, except such as shall be made junior and subordinate in all respects to the Bonds, unless all
of the BANs and Bonds are defeased, redeemed or retitled coincidentally with the delivery of such
additional bonds or other obligations. Such subordinate obligations shall be subject to the
provisions of Section XXI(d).
(g) If any Bonds are sold to the Authority as part of its IFA Program or for so
long as the 2009A Bonds remain outstanding and owned by the Authority and, except as otherwise
specifically provided in Section XXI hereof, the City shall not without the prior written consent
of the Authority (i) enter into any lease, contract or agreement or incur any other liabilities in
connection with the Waterworks other than for normal operating expenditures or (ii) borrow any
money (including without limitation any loan from other utilities operated by the City) in
connection with the Waterworks.
(h) The provisions of this Ordinance shall constitute a contract by and between
the City and the owners of the BANs and the Bonds, all the terms of which shall be enforceable
by any such owner by any and all appropriate proceedings in law or in equity. After the issuance
of the BANs or the Bonds and so long as any of the principal thereof or interest or premium, if
any, thereon remains unpaid, except as expressly provided herein, this Ordinance shall not be
repealed,amended,or modified in any respect which,in the determination of the Common Council
in its sole discretion, will materially and adversely affect the rights of such owners, nor shall the
Common Council or any other body of the City adopt any law, ordinance or resolution which, in
the determination of the Common Council in its sole discretion, in any way materially and
adversely affects the rights of such owners. Notwithstanding the foregoing,if any of the BANs or
the Bonds are sold to and owned by the Authority as part of its IFA Program, and for so long as
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the 2009A Bonds remain outstanding and owned by the Authority, the City shall obtain the prior
written consent of the Authority.
(i) The provisions of this Ordinance shall be construed to create a trust in the
proceeds of the sale of the BANs and the Bonds for the uses and purposes herein set forth, and the
owners of the Bonds shall retain a lien on such proceeds until the same are applied in accordance
with the provisions of this Ordinance and the Act. The provisions of this Ordinance shall also be
construed to create a trust in the Net Revenues herein directed to be set apart and paid into the
Sinking Fund for the uses and purposes of that Fund as set forth in this Ordinance. The owners of
the BANs and the Bonds shall have all the rights, remedies and privileges set forth in the Act,
including the right to have a receiver appointed to administer the System, in the event of default
in the payment of the principal of or interest on any of the Bonds. Upon the appointment of such
receiver, the receiver may: (i) charge and collect rates sufficient to provide for the payment of the
expenses of the operation, repair and maintenance of the System and debt service as provided in
the next following clause; (ii) pay the interest on the BANs or the principal of, premium, if any,
and interest on any bonds payable from Net Revenues; and (iii) apply the revenues of the System
in conformity with the Act and this Ordinance.
In addition,any owner of the BANs and the Bonds may,by civil action,protect and enforce
rights granted by the Act or under this Ordinance in connection with any action or duty to be
performed by the City,the Common Council, or any Officer of the City,including the making and
collecting of reasonable and sufficient charges and rates for services provided by the System as
described in this Ordinance.
(j) For purpose of this Section, the term "lease" shall include any lease,
contract, or other instrument conferring a right upon the City to use property in exchange for a
periodic payments made from the revenues of the Waterworks, whether the City intends to cause
such to be, or by its terms (or its intended effects) is to be, (i) payable as rent, (ii) booked as an
expense or an expenditure, or (iii) classified for accounting or other purposes as a capital lease,
financing lease, operating lease, non-appropriation leases, installment purchase agreement or
lease, or otherwise(including any combination thereof).
SECTION XXIII. Amendments With Consent of Bondholders. Subject to the terms
and provisions contained in this section and Sections XXII and XXIV,the owners of not less than
a majority in aggregate principal amount of the Bonds and then outstanding shall have the right,
from time to time, to consent to and approve the adoption by the Common Council of such
ordinance or ordinances supplemental hereto, as shall be deemed necessary or desirable by the
City for the purpose of amending in any particular any of the terms or provisions contained in this
Ordinance, or in any supplemental Ordinance; provided, however, that if the BANs or the Bonds
are sold to the Authority, the City shall obtain the prior written consent of the Authority; and
provided, further nothing herein contained shall permit or be construed as permitting:
(a) An extension of the maturity of the principal of or interest or premium, if
any,on any BAN or Bond or an advancement of the earliest redemption date on any BAN or Bond,
without the consent of the holder of each BAN or Bond so affected; or
(b) A reduction in the principal amount of any BAN or Bond, the redemption
premium, the Reserve Requirement therefor or the rate of interest thereon, or a change in the
monetary medium in which such amounts are payable, without the consent of the holder of each
BAN or Bond so affected; or
(c) The creation of a lien upon or a pledge of the Net Revenues ranking prior
to the pledge thereof created by this Ordinance, without the consent of the holders of all Bonds
then outstanding; or
(d) A preference or priority of any BAN or BANs over any other BAN or BANs
or of any Bond over any other Bond, without the consent of the holders of all Bonds then
outstanding; or
(e) A reduction in the aggregate principal amount of the Bonds required for
consent to such supplemental ordinance, without the consent of the holders of all Bonds then
outstanding.
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If the City shall desire to obtain any such consent, it shall cause the Registrar to mail a
notice, postage prepaid, to the addresses appearing on the Registration Record. Such notice shall
briefly set forth the nature of the proposed supplemental ordinance and shall state that a copy
thereof is on file at the office of the Registrar for inspection by all owners of the Bonds. The
Registrar shall not, however, be subject to any liability to any owners of the Bonds by reason of
its failure to mail such notice,and any such failure shall not affect the validity of such supplemental
ordinance when consented to and approved as herein provided.
Whenever at any time within one year after the date of the mailing of such notice, the City
shall receive any instrument or instruments purporting to be executed by the owners of the Bonds
of not less than a majority in aggregate principal amount of the Bonds then outstanding, which
instrument or instruments shall refer to the proposed supplemental ordinance described in such
notice, and shall specifically consent to and approve the adoption thereof in substantially the form
of the copy thereof referred to in such notice as on file with the Registrar, thereupon, but not
otherwise, the City may adopt such supplemental ordinance in substantially such form, without
liability or responsibility to any owners of the Bonds, whether or not such owners shall have
consented thereto.
No owner of any Bond shall have any right to object to the adoption of such supplemental
ordinance or to object to any of the terms and provisions contained therein or the operation thereof,
or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the
Common Council from adopting the same, or from taking any action pursuant to the provisions
thereof. Upon the adoption of any supplemental ordinance pursuant to the provisions of this
section, this Ordinance shall be, and shall be deemed, modified and amended in accordance
therewith, and the respective rights,duties and obligations under this Ordinance of the City and all
owners of Bonds then outstanding shall thereafter be determined, exercised and enforced in
accordance with this Ordinance, subject in all respects to such modifications and amendments.
Notwithstanding anything contained in the foregoing provisions of this Ordinance, the
rights and obligations of the City and of the owners of the Bonds, and the terms and provisions of
the Bonds and this Ordinance,or any supplemental ordinance,may be modified or amended in any
respect with the consent of the City and the consent of the owners of all the Bonds then outstanding.
SECTION XXIV. Amendments Without Consent of Bondholders. The Common
Council may, from time to time and at any time, and without notice to or consent of the owners of
the Bonds, adopt such ordinances supplemental hereto (which supplemental ordinances shall
thereafter form a part hereof) provided, however, that if the BANs or Bonds are sold to the
Authority, the City shall obtain the prior written consent of the Authority before adopting any
ordinance or ordinances supplemental hereto:
(a) To cure any ambiguity or formal defect or omission in this Ordinance or in
any supplemental ordinance;
(b) To grant to or confer upon the owners of the Bonds any additional rights,
remedies, powers, authority or security that may lawfully be granted to or conferred upon the
owners of the Bonds;
(c) To procure a rating on the Bonds from a nationally recognized securities
rating agency designated in such supplemental ordinance, if such supplemental ordinance, in the
determination of the Common Council in its sole discretion, will not materially and adversely
affect the owners of the Bonds;
(d) To obtain or maintain bond insurance with respect to the Bonds;
(e) To provide for the refunding or advance refunding of the Bonds;
(f) To provide for the issuance of additional bonds as provided in Section XXI
hereof;
(g) To provide for the sale of Bonds to the Authority as described in Section
XXVII hereof; or
(h) To make any other change which, in the determination of the Common
Council in its sole discretion, is not to the material prejudice of the owners of the Bonds.
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SECTION XXV. Tax Matters. This section only applies to any series of Bonds or
BANs issued on a tax-exempt basis for federal income tax purposes. In order to preserve the
exclusion of interest on the Bonds and BANs from gross income for federal income tax purposes
and as an inducement to purchasers of the Bonds, the City represents, covenants and agrees that:
(a) No person or entity, other than the City or another state or local
governmental unit, will use proceeds of the Bonds or BANs or property financed by the Bond or
BAN proceeds other than as a member of the general public. No person or entity other than the
City or another state or local governmental unit will own property financed by Bond or BAN
proceeds or will have actual or beneficial use of such property pursuant to a lease, a management
or incentive payment contract, an arrangement such as take-or-pay or output contract, or any other
type of arrangement that differentiates that person's or entity's use of such property from the use
by the public at large.
(b) No Bond or BAN proceeds will be loaned to any entity or person other than
a state or local governmental unit. No Bond or BAN proceeds will be transferred, directly or
indirectly, or deemed transferred to a non-governmental person in any manner that would in
substance constitute a loan of the Bond or BAN proceeds.
(c) The City will not take any action or fail to take any action with respect to
the Bonds or BANs that would result in the loss of the exclusion from gross income for federal
income tax purposes of interest on the Bonds or BANs pursuant to Section 103 of the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder as applicable to
the Bonds or BANs, including, without limitation, the taking of such action as is necessary to
rebate or cause to be rebated arbitrage profits on Bond or BAN proceeds or other monies treated
as Bond or BAN proceeds to the federal government as provided in Section 148 of the Code, and
will set aside such monies, which may be paid from investment income on funds and accounts
notwithstanding anything else to the contrary herein, in trust for such purposes.
(d) The City will file an information report on Form 8038-G with the Internal
Revenue Service as required by Section 149 of the Code with respect to each series of Bonds or
BANs issued.
(e) The City will not make any investment or do any other act or thing during
the period that any Bond or BAN is outstanding hereunder which would cause any Bond or BAN
to be an "arbitrage bond" within the meaning of Section 148 of the Code and the regulations
thereunder as applicable to the Bonds or BANs.
Notwithstanding any other provisions of this Ordinance, the foregoing covenants and
authorizations(the"Tax Sections")which are designed to preserve the exclusion of interest on the
Bonds or BANs from gross income under federal law(the"Tax Exemption")need not be complied
with to the extent the City receives an opinion of nationally recognized bond counsel that
compliance with such Tax Section is unnecessary to preserve the Tax Exemption.
SECTION XXVI. Issuance of BANs. (a) The City, having satisfied all the statutory
requirements for the issuance of its Bonds,may elect to issue its BAN or BANs pursuant to a Bond
Anticipation Note Purchase Agreement("Bond Anticipation Note Agreement") to be entered into
between the City and the purchaser of the BAN or BANs. The Common Council hereby authorizes
the issuance and execution of the BAN or BANs in lieu of initially issuing the Bonds to provide
interim financing for the Project until permanent financing becomes available. It shall not be
necessary for the City to repeat the procedures for the issuance of its Bonds, as the procedures
followed before the issuance of the BAN or BANs are for all purposes sufficient to authorize the
issuance of the Bonds and the use of the proceeds to repay the BAN or BANs.
(b) The Mayor and the Controller are hereby authorized and directed to execute
a Bond Anticipation Note Agreement(and any amendments made from time to time)in such form
or substance as they shall approve acting upon the advice of counsel. If the BANs are sold to the
Authority through the IFA Program, the Financial Assistance Agreement shall serve as the Bond
Anticipation Note Agreement. The Mayor and the Controller may also take such other actions or
deliver such other certificates as are necessary or desirable in connection with the issuance of the
BANs or the Bonds and the other documents needed for the financing as they deem necessary or
desirable in connection therewith.
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SECTION XXVII. Rate Ordinance. The rates and charges of the works are set forth or
described in Ordinance No. 10797-21 adopted by the Common Council on August 10,2021. Such
ordinance is hereby incorporated by reference as if set forth in full at this place, two copies of
which are on file and available for public inspection in the office of the City Clerk pursuant to I.C.
§36-1-5-4.
SECTION XXVIII. Non-Business Days. If the date of making any payment or the last
date for performance of any act or the exercising of any right, as provided in this Ordinance, shall
be a legal holiday or a day on which banking institutions in the City or the jurisdiction in which
the Registrar or Paying Agent is located are typically closed, such payment may be made or act
performed or right exercised on the next succeeding day not a legal holiday or a day on which such
banking institutions are typically closed, with the same force and effect as if done on the nominal
date provided in this Ordinance, and no interest shall accrue for the period after such nominal date.
SECTION XXIX. No Conflict. The Common Council hereby finds and determines
that the adoption of this Ordinance and the issuance of the Bonds are in compliance with the Prior
Ordinances. The Prior Ordinances shall remain in full force and effect. All ordinances and
resolutions and parts thereof in conflict herewith, except the Prior Ordinances, are to the extent of
such conflict hereby repealed. None of the provisions of this Ordinance shall be construed to
adversely affect the rights of the owners of the Parity Bonds presently outstanding.
SECTION XXX. Severability. If any section, paragraph or provision of this
Ordinance shall be held to be invalid or unenforceable for any reason, the invalidity or
unenforceability of such section, paragraph or provision shall not affect any of the remaining
provisions of this Ordinance.
SECTION XXXI. Interpretation. Unless the context or laws clearly require otherwise,
references herein to statutes or other laws include the same as modified, supplemented or
superseded from time to time.
SECTION XXXII. Effectiveness. This Ordinance shall be in full force and effect from
and after its passage and compliance with the procedures required by law.
SECTION XXXII I. Credit Facility. The Mayor and the Controller,on behalf of the City,
are hereby authorized to obtain a Credit Facility or Additional Credit Facility as set forth in Section
XV herein. The Mayor and the Controller, on behalf of the City, are also authorized to enter into
an agreement with the Credit Facility Issuer for either the Credit Facility or Additional Credit
Facility (the "Credit Facility Agreement") and negotiate the terms of the Credit Facility
Agreement,with the advice of the City's financial advisor and nationally recognized bond counsel.
The Mayor and the Controller, on behalf of the City, are also authorized to execute any and all
other documents required to obtain the Credit Facility. The City hereby agrees that:If the
waterworks fails to pay any Credit Facility Costs in accordance with the requirements set forth
above, the Credit Facility Issuer shall be entitled to exercise any and all remedies available at law
or under the authorized documents other than (i) acceleration of the maturity of the Bonds or (ii)
remedies which would adversely affect the owners of the Bonds.
(b) This Ordinance shall not be discharged and the Bonds defeased until all
Credit Facility Costs owing to the Credit Facility Issuer shall have been paid in full.
(c) The Credit Facility Issuer is granted a security interest (subordinate to that
of the owners of the Bonds) in all revenues and collateral pledged as security for the Bonds, for
the repayment of the Credit Facility Costs.
(d) No additional bonds payable from the Net Revenues will be issued without
the Credit Facility Issuer's prior written consent as long as Credit Facility Costs are past due and
still owing to the Credit Facility Issuer.
(e) This Ordinance shall not be modified or amended, except as provided in
Section XXIV herein, without the prior written consent of the Credit Facility Issuer.
The Credit Facility Issuer shall be provided with written notice of the resignation or removal of
the Registrar and Paying Agent and the appointment of a successor thereto and of the issuance of
additional indebtedness of the City's waterworks at such address as may be specified, from time to
time,by the Credit Facility Issuer.
- 26 -
SECTION XXXI V. Payment on Bonds in the Event of Default. In the event available
moneys are insufficient to pay debt service on the Bonds and any Parity Bonds when due,available
moneys shall be applied, after payment of all costs and expenses associated therewith,to the Bonds
and any Parity Bonds as follows: to the payment to the persons entitled thereto of all unpaid
installments of interest then due on, and the unpaid principal of, the Bonds and any Parity Bonds,
including interest on any past due principal of any Bond or Parity Bond at the rate borne by such
Bond or Parity Bond, in the order of the maturity of the installments of such interest and the due
dates of such principal and, if the amount available shall not be sufficient to pay in full any
particular installment of interest or maturity of principal, then to such payment ratably, according
to the amounts so due, to the persons entitled thereto, without any discrimination or privilege or
any preference of or priority of interest over principal or principal over interest.
During the continuance of any default in the payment of either principal of or interest or
premium on any Bonds or Parity Bonds,no payment shall be made with respect to any subordinate
obligations issued pursuant to Section XXII(f). Moneys available for payment to holders of such
subordinate obligations shall,in the event of an insufficient amount being available to pay all debt
service with respect to the subordinate obligations when due, be applied to the subordinate
obligations in accordance with the sequence and other terms set forth above with respect to
payments regarding Bonds and Parity Bonds unless otherwise provided in the ordinance
authorizing the subordinate obligations.
SECTION XXXV. Actions and Agreements. Each of the Mayor, the Controller, the
Clerk, and any other officer or employee of the City is hereby authorized and directed to execute
any instruments or agreements or take any other actions necessary or desirable to effect the
transactions contemplated by this Ordinance, such necessity or desirability to be conclusively
evidenced by the execution of such instruments or agreements or the taking of such action.
- 27 -
Effective Date. This Ordinance shall be in full force and effect from and after its passage
by the Common Council, approval by the Mayor, and the execution of any procedures required by
applicable law.
SItilL—
Sharon McBride, Council President
South Bend Common Council
Attest:
d': /k)?I(
Dawn M. Jones, MPA, City Cle
Office of the City Clerk
Presented by me, the undersigned Clerk of the City of South Bend, to the Mayor of the City of
South Bend, Indiana on the day of , 2023, at o'clock
. m.
al-'(,Z /22( ,
Z76-e4)
Dawn M. Jones, MPA, City lerk
Office of the City Clerk
)
Approved and signed by me on the 1 Y day of Ye,nhly , 2023, at 3 o'clock
t.m.
Jo s Mueller, Mayor
Ci of South Bend, Indiana
- 28 -
EXHIBIT A
Description of City of South Bend Water Utilities Projects (2023)
The Project consists of the design, acquisition, construction, installation and equipping of
various improvements to the City's waterworks, including without limitation any or all of the
following and related improvements: (i) treatment plant improvements to any or all of the
following: Carriage Hills Well Field, Cleveland North Well Field, Cleveland South Well Field,
Edison Filtration Plant, Erskine Well Field, North Station Filtration Plant, Olive GAC Plant,
Pinhook Filtration Plant and South GAC Plant and (ii) distribution system improvements to any
or all of the following: Fellows Reservoir and Booster Station, Ireland Tank and Booster Station,
Locust Booster Station, SR 23 Booster Station, Topsfield Booster Station, Winterberry Booster
Station, Northwest Elevated Tank, South Wellfield Distribution Main, Lathrop Distribution Main
—Portage to Bendix, 30th Main Replacement(RR Crossing), Green Lawn Main Replacement(RR
Crossing), Douglas Water Main, and various Water Main Extensions/Replacements. The Project
also includes replacement of lead service lines in portions of the City.
A-1
EXHIBIT B
Form of Financial Assistance Agreement
STATE OF INDIANA
DRINKING WATER REVOLVING LOAN PROGRAM
FINANCIAL ASSISTANCE AGREEMENT dated as of this [ day of
20 1 by and between the Indiana Finance Authority(the"Finance Authority"), a body politic and
corporate, not a state agency but an independent instrumentality of the State of Indiana (the
"State") and the City of South Bend, Indiana(the"Participant"), a political subdivision as defined
in I.C. 5-1.2-2-57, operating its water utility under I.C. 8-1.5, witnesseth:
WHEREAS, the State's Drinking Water Revolving Loan Program (the "Drinking Water
SRF Program")has been established in accordance with the federal Safe Drinking Water Act and
any regulations promulgated thereunder, and pursuant to I.C. 5-1.2-10 (the "Drinking Water SRF
Act"),which Drinking Water SRF Act also establishes the drinking water revolving loan fund(the
"Drinking Water SRF Fund"); and
WHEREAS,pursuant to the Drinking Water SRF Act,the State was authorized to fund the
Drinking Water SRF Program with federal capitalization grants, together with required state
matching funds therefor, and to operate the Drinking Water SRF Program, and prior to May 15,
2005 so funded and operated the Drinking Water SRF Program; and
WHEREAS, pursuant to Public Law 235 - 2005, by operation of law and effective May
15, 2005, the Finance Authority has become the successor to the State in all matters related to the
Drinking Water SRF Program (including use and acceptance of federal capitalization grants and
required state matching funds and operation of the Drinking Water SRF Program); and
WHEREAS, the Participant is a duly existing political subdivision of the State, lawfully
empowered to undertake all transactions and execute all documents mentioned or contemplated
herein; and
WHEREAS,the Participant has previously entered into a Financial Assistance Agreement
with the Finance Authority, dated as of September 1, 2009, to borrow money from the Drinking
Water SRF Program, to construct and acquire separate projects as described and defined therein
(the"Prior Agreement"); and
WHEREAS, the Participant has determined to undertake a drinking water system project
(as more fully described herein,the"Project") and to borrow money from the Drinking Water SRF
Program to construct and acquire the Project; and
WHEREAS,the Finance Authority and the Participant desire to set forth the terms of such
financial assistance as hereinafter provided; and
NOW THEREFORE,in consideration of the mutual covenants herein set forth,the Finance
Authority and the Participant agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. The following terms shall, for all purposes of this Agreement,
have the following meaning:
"Agency" shall mean the United States Environmental Protection Agency or its successor.
"Asset Management Program" means programs, plans and documentation (including a
Fiscal Sustainability Plan) that demonstrates that the Participant has the financial, managerial,
technical, and legal capability to operate and maintain its Drinking Water System and which is
consistent with SRF Policy Guidelines including applicable requirements of the Drinking Water
SRF Act.
B-1
"Authorizing Instrument(s)" shall mean the separate trust indenture(s)of the Participant
entered into with a corporate trustee or the detailed resolution(s) or ordinance(s) of the governing
body of the Participant pursuant to which the Bonds are issued in accordance with State law.
"Authorized Representative" shall mean the Controller of the Participant or such other
officer, official, or representative of the Participant duly authorized to act for and on behalf of the
Participant as provided for herein.
"Bond" or "Bonds" shall mean the instrument(s) which evidence(s) the Loan, as
authorized by the Authorizing Instrument and containing the terms set forth in Section 2.02 of this
Agreement.
"Bond Fund" shall mean the separate and segregated fund or account established and
created by the Participant pursuant to the Authorizing Instrument from which payment of the
principal of and interest on the Bonds is required to be made by the Participant.
"Business Day" shall mean any day other than a Saturday, Sunday or State legal holiday
or any other day on which financial institutions in the State are authorized by law to close and to
remain closed.
"Code" shall mean the Internal Revenue Code of 1986, as amended and supplemented
from time to time, together with the regulations related thereto.
"Commission" shall mean the Indiana Utility Regulatory Commission created under I.C.
8-1-1-2 or its successor.
"Construction Fund" shall mean the separate and segregated fund or account established
and created by the Participant pursuant to the Authorizing Instrument to receive proceeds of the
Bonds and from which Eligible Costs of the Project may be paid by the Participant.
"Credit Instrument" means a letter of credit, surety bond, liquidity facility, insurance
policy or comparable instrument furnished by a Credit Provider that is used by the Participant to
meet all or a portion of any debt service reserve requirement securing the Bonds or any other bonds
payable from the revenues of the Drinking Water System, which bonds are on a parity with the
Bonds.
"Credit Provider"means a bank, insurance company, financial institution or other entity
providing a Credit Instrument.
"Department"shall mean the Indiana Department of Environmental Management created
under I.C. 13-13-1-1 or its successor.
"Deposit Agreement" shall mean an agreement between the Participant and the Deposit
Agreement Counterparty in such form as from time to time determined by the Finance Authority
pursuant to which (a) the Participant's Bond Fund (including any reserve account established and
created by the Participant pursuant to the Authorizing Instrument related thereto) shall be held by
such Deposit Agreement Counterparty and available for payment of the Bonds and any other
similar obligations of the Participant that are payable from the Bond Fund regardless whether they
are on a parity basis, (b) such Deposit Agreement Counterparty serves as the paying agent for the
Bonds and any other such similar obligations of the Participant that are payable from the Bond
Fund, and (c) the Participant's Construction Fund may be held by such Deposit Agreement
Counterparty upon any Loan disbursement by the Finance Authority to it from time to time.
"Deposit Agreement Counterparty" shall mean the financial institution that enters into
a Deposit Agreement with the Participant, which financial institution shall be approved by the
Finance Authority and may be replaced by the Finance Authority from time to time.
"Director of Environmental Programs"shall mean the person designated by the Finance
Authority as authorized to act as the Director of Environmental Programs (which designation
includes such Director's assumption of the duties previously assigned to the Drinking Water SRF
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Program Representative and the Drinking Water SRF Program Director) and where not limited,
such person's designee.
"Disbursement Agent" shall mean the party disbursing the Loan to or for the benefit of
the Participant, which shall be the Trustee unless amounts are held in the Construction Fund, in
which case the Disbursement Agent shall thereafter be the Deposit Agreement Counterparty as the
party disbursing amounts that are held in the Construction Fund unless otherwise agreed by the
Finance Authority.
"Disbursement Request" shall mean a request for a disbursement of the Loan made by
an Authorized Representative in such form as the Finance Authority may from time to time
prescribe.
"Drinking Water SRF Fund" shall mean the drinking water revolving loan fund as
established by I.C. 5-1.2-10-2.
"Drinking Water SRF Indenture" shall mean the Fourth Amended and Restated
Drinking Water SRF Trust Indenture, dated as of September 1, 2019 between the Finance
Authority(as successor by operation of law to the State in all matters related to the Drinking Water
SRF Program) and the Trustee, as amended and supplemented from time to time.
"Drinking Water System" shall mean all, or any part of, the system for the provision to
the public of water for human consumption through pipes and other constructed conveyances that:
(1) has at least fifteen(15) service connections; or
(2) regularly serves at least twenty-five (25) individuals;
and as further defined and described in I.C. 13-11-2-177.3 and SRF Policy Guidelines, as amended
and supplemented from time to time.
"Eligible Cost" shall mean and include, whether incurred before or after the date of this
Agreement, all costs which have been incurred and qualify for Financial Assistance, including
engineering, financing and legal costs related thereto.
"Finance Authority" shall mean the Indiana Finance Authority, a body politic and
corporate, not a state agency but an independent instrumentality of the State.
"Finance Authority Bonds" shall mean any Finance Authority State Revolving Fund
Program Bonds or other similar obligations of the Finance Authority issued as a part of the
Drinking Water SRF Program within the meaning of the Drinking Water SRF Indenture.
"Financial Assistance" shall mean the financial assistance authorized by the Safe
Drinking Water Act, including the Loan.
"Fiscal Sustainability Plan" means in connection with a project that provides for the
repair, replacement, or expansion of an existing Drinking Water System, a plan that is consistent
with SRF Policy Guidelines including applicable requirements of the Drinking Water SRF Act and
includes (a) an inventory of critical assets that are a part of the Drinking Water System, (b) an
evaluation of the condition and performance of inventoried assets or asset groupings; (b) a
certification that the Participant has evaluated and will be implementing water and energy
conservation efforts as part of the plan; and(d)a plan for maintaining,repairing,and, as necessary,
replacing the Drinking Water System and a plan for funding such activities.
"Loan" shall mean the purchase of the Bonds by the Finance Authority to finance the
planning, designing, constructing, renovating, improving and expanding of the Participant's
Drinking Water System or refinance an existing debt obligation where such debt was incurred and
building of such systems began after July 1, 1993, but does not mean the provision of other
Financial Assistance.
"Loan Reduction Payment" shall mean in any circumstances where there is a balance
(inclusive of Loan proceeds and any earnings) in the Construction Fund, any action causing such
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balance to be applied to a reduction in the maximum aggregate amount of the Loan outstanding
other than pursuant to regularly scheduled principal payments or optional redemptions applicable
to the Bonds. A Loan Reduction Payment shall not be applicable unless Loan amounts are held in
the Construction Fund.
"Non-Use Close-out Date" shall mean that date which is the earlier of(a)the first date as
of which the full amount of the Loan has been disbursed on a cumulative basis (which shall also
be deemed to have occurred when and if such amounts have been deposited in the Participant's
Construction Fund) or (b) the date as of which the Participant binds itself that no further Loan
disbursements will be made under this Agreement.
"Non-Use Fee" shall mean a fee in an amount determined by the Finance Authority
charged to compensate it for costs and expenses within the Drinking Water SRF Program. Such
amount shall be the greater of (A) the product of the undrawn balance of the Loan on each
applicable Non-Use Assessment Date multiplied by one percent(1%)or(B)One Thousand Dollars
($1,000). Such fee shall apply and be payable under Section 5.09 herein with respect to each Non-
Use Assessment Date until the Non-Use Close-out Date shall occur. A Non-Use Fee shall not be
applicable if the full amount of the Loan has been disbursed and deposited in the Participant's
Construction Fund by the Non-Use Assessment Date.
"Non-Use Assessment Date" shall mean [ 1, 20 1 and the first day of each
sixth (6th) calendar month thereafter unless and until the Non-Use Close-out Date occurs in
advance of any such Non-Use Assessment Date.
"Operation and Maintenance"shall mean the activities required to assure the continuing
dependable and economic function of the Drinking Water System, including maintaining
compliance with primary and secondary drinking water standards, as follows:
(1) Operation shall mean the control and management of the united processes
and equipment which make up the Drinking Water System, including financial and
personnel management, records, reporting, laboratory control, process control, safety and
emergency operation planning and operating activities.
(2) Maintenance shall mean the preservation of the functional integrity and
efficiency of equipment and structures by implementing and maintaining systems of
preventive and corrective maintenance, including replacements.
"Plans and Specifications" shall mean the detailed written descriptions of the work to be
done in undertaking and completing the Project, including the written descriptions of the work to
be performed and the drawings, cross-sections, profiles and the like which show the location,
dimensions and details of the work to be performed.
"Preliminary Engineering Report" shall mean the information submitted by the
Participant that is necessary for the Finance Authority to determine the technical, economic and
environmental adequacy of the proposed Project.
"Project" shall mean the activities or tasks identified and described in Exhibit A to this
Agreement, and incorporated herein, as amended or supplemented by the Participant and
consented to by the Finance Authority, for which the Participant may expend the Loan.
"Purchase Account" shall mean the account by that name created by the Drinking Water
SRF Indenture and held as part of the Drinking Water SRF Fund.
"Safe Drinking Water Act" shall mean the Safe Drinking Water Act, 42 U.S.C. §§ 300f
et seq. and other laws, regulations and guidance supplemental thereto, as amended and
supplemented from time to time including the 2014 Appropriations Act.
"SRF Policy Guidelines" shall mean guidance of general applicability (as from time to
time published, amended and supplemented by the Finance Authority) pertaining to participants
utilizing financial assistance in connection with their projects funded in whole or in part through
the Drinking Water SRF Program.
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•
"State" shall mean the State of Indiana.
"Substantial Completion of Construction" shall mean the day on which the Finance
Authority(or if designated by the Finance Authority,the Department)determines that all but minor
components of the Project have been built, all equipment is operational and the Project is capable
of functioning as designed.
"System Development Charges" shall mean the proceeds and balances from any non-
recurring charges such as tap fees, subsequent connector fees, capacity or contribution fees, and
other similar one-time charges applicable to the Drinking Water System that are available for
deposit under the Authorizing Instrument.
"Trustee" shall mean The Bank of New York Mellon Trust Company, N.A., Indianapolis,
Indiana, in its capacity as trustee or its successor under the Drinking Water SRF Indenture.
"2014 Appropriations Act" shall mean the Consolidated Appropriations Act, 2014 (also
known as H.R. 3457), and other laws, regulations and guidance supplemental thereto (including
the Safe Drinking Water Act), as amended and supplemented from time to time.
(End of Article I)
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ARTICLE II
PURPOSE OF BORROWING AND LOAN TERMS
Section 2.01. Amount; Purpose. The Finance Authority agrees to Loan an amount not
to exceed [ 1 Dollars ($[ 1) in aggregate principal amount
to the Participant as Financial Assistance to pay for the Eligible Costs, as hereinafter described, of
the Project on, and subject to, the terms and conditions contained herein. The Loan shall be used
only to pay the following Eligible Costs: (a) eligible planning services for the production of a
Preliminary Engineering Report ("Planning"), (b) eligible design services for the production of
Plans and Specifications ("Design") and (c) eligible construction costs, including financing and
legal costs ("Construction"). The Loan shall be funded solely from available proceeds of the
Finance Authority Bonds contained in the Purchase Account or from other sources that the Finance
Authority may,in its sole discretion, designate. The Loan is evidenced by the Bonds executed and
delivered by the Participant contemporaneously herewith. The Bonds shall be in fully registered
form, with the Finance Authority registered as the registered owner. So long as the Finance
Authority is the registered owner,the principal of and redemption premium, if any, and interest on
the Bonds shall be paid to the Trustee by a wire transfer referenced as follows: The Bank of New
York,ABA 021 000 018,For Credit to 610026840C,Account Name: South Bend Drinking Water,
Attn: Derick Rush. The Participant agrees to undertake and complete the Project and to receive
and expend the Loan proceeds in accordance with this Agreement.
Section 2.02. The Bonds.
(a) Until paid, the Bonds will bear interest at the per annum rate of[ 1 percent
([ 1%). Such interest shall be calculated on the basis of a 360 day year comprised of twelve
30 day months, and be as provided in I.C. 5-1.2-10-15 and -20. Interest, if any, on the Bonds will
be payable on January 1 and July 1 of each year, commencing [ 1 1, 20[ 1. The Bonds
will be in the aggregate principal amount of[ ' Dollars($[ D. Subject
to Section 2.05 and 2.06 herein, the Bonds will mature on January 1 until January 1, 2033, and
then January and July of each of the years set forth in, and at the principal amount set opposite
each such month and year set forth in the schedule contained in the attached Exhibit B to this
Agreement (which is hereby incorporated by reference); provided, however, notwithstanding the
foregoing or the terms of the Bonds to the contrary,no maturity of Bonds shall extend beyond the
date which is thirty-five (35) years after the date of this Agreement. If the maturity date for any
Bonds is beyond such date, unless otherwise agreed to, such Bonds, together with accrued and
unpaid interest thereon, will be due and payable on such date.
(b) The Bonds will be subject to redemption by the Participant as provided in the
Authorizing Instrument; provided however that in no event shall the Participant exercise any
provision contained in the Authorizing Instrument or the Bonds permitting a redemption of the
Bonds at the option of the Participant unless and until such has been consented by the Authority.
The Loan, and the Bonds evidencing it, will be subject to payment by the Participant as provided
in this Agreement.
(c) The form and other terms of the Bonds will be in conformity with the Authorizing
Instrument.
(d)The additional terms contained in the attached Exhibit D are applicable to this Loan(as
and to the extent set forth in Exhibit D) to the same effect as if such were set forth in this section.
Section 2.03. Disbursement Conditions. Each of the following shall be a condition
precedent to the disbursement of the Loan or any portion thereof(including from the Construction
Fund):
(a) (1) With respect to procurement of professional services related to the Project
to be paid from Loan proceeds, the Participant shall have complied with applicable State
law and SRF Policy Guidelines. Additionally costs related Planning and Design shall only
be Eligible Costs upon compliance with paragraph A of the attached Exhibit D. (2) With
respect to procurement of all other goods and services related to the Project to be paid from
Loan proceeds, the Participant shall have complied with I.C. 36-1-12 and SRF Policy
Guidelines.
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(b) No representation, warranty or covenant of the Participant contained in this
Agreement or in any paper executed and delivered in connection with the transactions
contemplated by this Agreement shall be false or inaccurate in any material respect.
(c) The Participant shall undertake and faithfully perform each of its obligations,
agreements and covenants contained in this Agreement, the Authorizing Instrument and
the Bonds.
(d) There shall be available to the Finance Authority uncommitted funds in an
amount sufficient to satisfy the Finance Authority's obligations hereunder from the
proceeds of Finance Authority Bonds in the Purchase Account or from other sources that
the Finance Authority may, in its sole discretion, designate; provided however, once Loan
proceeds have been deposited in the Construction Fund, such condition shall be deemed
satisfied.
(e) The Participant shall have undertaken all actions necessary to comply with and
satisfy the conditions and requirements for a Loan secured with money made available
from the Drinking Water SRF Fund as set forth in federal and State statutes, rules and
regulations, including I.C. 5-1.2-10, SRF Policy Guidelines, the Safe Drinking Water Act
and 40 C.F.R. Part 35.
(f) Prior to making any Loan disbursement to pay any Construction costs, the
Project shall have been approved by the State's Historical Preservation Officer in a manner
consistent with the policies and practices of the Drinking Water SRF Program (the
"Historical Preservation Approval"). Notwithstanding any provision of this Agreement to
the contrary,in the event a Historical Preservation Approval has not been given within four
(4) months after the date of this Agreement, the Finance Authority may, in its sole
discretion, (i) reduce the aggregate amount of the Loan to the amount then disbursed and
outstanding under this Agreement and(ii)if any amounts are held in the Construction Fund,
require a Loan Reduction Payment pursuant to Section 2.06 herein as if it were a date that
was three(3)years after the dated date of the Bonds. Upon giving notice to the Participant
of such action, no further Loan disbursement(including from the Construction Fund)may
be made under this Agreement unless consented to by the Finance Authority.
(g) In the event the Bonds are payable from rates and charges of the Drinking Water
System and if requested by the Finance Authority, the Participant shall provide evidence
satisfactory to the Finance Authority demonstrating that such rates and charges are at a
level adequate to produce and maintain sufficient net revenue after providing for the proper
Operation and Maintenance of the Drinking Water System, on a proforma basis consistent
with SRF Policy Guidelines, to provide 1.25x coverage on all obligations of the Drinking
Water System (including the Bonds).
Section 2.04. Disbursement Procedures. Loan proceeds (including any held from time
to time in the Construction Fund) shall be disbursed to the Participant by the Disbursement Agent
for actual Eligible Costs incurred with respect to the Project. The Finance Authority may, in its
discretion, cause Loan disbursements to be made (a) directly to the person or entity identified in
the Disbursement Request to whom payment is due, or(b) if advised in writing by the Participant
that I.C. 36-1-12-14 or a similar law applies to the Project, to the Participant for purposes of
collecting retainage, or some combination thereof. Any Loan proceeds in excess of the amount
subject to retainage controlled by the Participant will be immediately remitted to the person or
entity to whom payment is due,no later than three(3) Business Days after receipt or the date such
Loan proceeds are no longer subject to retainage. The Finance Authority may, in its discretion,
cause Loan disbursements to be made from time to time, in whole or in part, to the Participant's
Construction Fund for disbursement consistent with this Agreement. Loan disbursements shall
not be made more frequently than monthly and shall only be made following the submission of a
Disbursement Request to the Finance Authority. Disbursement Requests shall be approved by the
Director of Environmental Programs prior to submission to the Disbursement Agent for a Loan
disbursement. Disbursement Requests shall be numbered sequentially,beginning with the number
1.
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Section 2.05. Effect of Disbursements. Loan disbursements made to or for the benefit
of the Participant shall be deemed to be a purchase of the Bonds in such amounts and with such
maturities as achieves as level debt service as practicable, and with no maturity longer than the
original maturity schedule; provided that any principal payments originally scheduled under
Section 2.02 herein as being due prior to one year after Substantial Completion of Construction
shall first be deemed to be a purchase of the Bonds in order of maturity. The deposit of Loan
proceeds in the Construction Fund shall be deemed to be a purchase of the Bonds. Interest on the
Loan commences on disbursement of the Loan to or for the benefit of the Participant (including
any amounts disbursed to the Construction Fund)by the Finance Authority and the Bonds shall be
deemed to be purchased in the full amount thereof. Each disbursement (including any amounts
disbursed from the Construction Fund) shall be made pursuant to a Disbursement Request. In the
event any Loan disbursement(including any amounts disbursed from the Construction Fund)shall
be made in excess of Eligible Costs, such excess disbursements shall be immediately paid by the
Participant to the Disbursement Agent (and if made from any amounts held in the Construction
Fund, shall be immediately deposited by the Participant into such Construction Fund) and
thereafter may,subject to the terms and conditions set forth in this Agreement,be applied thereafter
to pay Eligible Costs of the Project by the Participant.
Section 2.06. Acknowledgment of Amount of Loan; Final Disbursement. (a) Within
30 days after any request by the Finance Authority from time to time,the Participant shall execute
and deliver to the Finance Authority an acknowledgment in the form prescribed by the Finance
Authority which acknowledges the outstanding principal of and interest on the Bonds. Unless the
Finance Authority consents in writing, no Loan disbursement shall be made more than one year
after Substantial Completion of Construction. After Substantial Completion of Construction,upon
the request of the Finance Authority, the Participant shall replace, at its expense, the Bonds with
substitutes issued pursuant to the Authorizing Instrument to evidence the outstanding principal
under the Loan.
(b) In the event there remains a balance(inclusive of Loan proceeds and any earnings) in
the Construction Fund on the date that is the earlier of(i)one year after Substantial Completion of
Construction or(ii)three(3)years after the dated date of the Bonds(or in either such circumstance,
such later date as the Finance Authority may approve in its discretion), the Participant agrees to
make a Loan Reduction Payment to the Finance Authority within 10 days after any Finance
Authority written demand. Any Loan Reduction Payment shall be applied to pay principal in such
amounts and with such maturities as achieves as level debt service as practicable consistent with
methodology prescribed in the Authorizing Instrument and as originally applied to the Bonds, and
with no maturity longer than the original maturity schedule; provided that any principal payments
originally scheduled under Section 2.02 herein as being due prior to the Loan Reduction Payment
shall be unaffected by such payment. If the Authorizing Instrument permits the Participant to apply
Bond proceeds to pay interest accruing on or before Substantial Completion of Construction, the
Participant may seek to reimburse itself for such interest costs it has paid pursuant to a
Disbursement Request provided. If the Participant fails to make such Loan Reduction Payment by
such date,the Finance Authority and Deposit Agreement Counterparty are authorized to cause any
balance held in the Construction Fund to be so applied without further direction and authorization
from the Participant. Notwithstanding the foregoing, if requested by the Finance Authority, in
lieu of the Participant making a Loan Reduction Payment, the Finance Authority may in its
discretion require the Participant to hold any remaining balance (inclusive of Loan proceeds and
any earnings) in the Construction Fund until such amounts may be applied on the first optional
redemption date applicable to the Bonds,and upon any such request,the Participant agrees to cause
such amounts to be so held and applied on such date.
(End of Article II)
B-8
ARTICLE III
REPRESENTATIONS,WARRANTIES AND COVENANTS
OF THE PARTICIPANT
Section 3.01. Planning, Design and Construction Covenants. The Participant hereby
covenants and agrees with the Finance Authority that the Participant will:
(a) Provide information as requested by the Finance Authority to determine the
need for, or to complete any necessary, environmental review or analysis.
(b) Comply with the procurement procedures and affirmative action requirements
contained in SRF Policy Guidelines in the Planning,Design and Construction of the Project
to the extent that such are to be paid from Loan proceeds.
(c) With respect to prime and first tier contract awards,report minority and women
business enterprise utilization in the Planning, Design and Construction of the Project, to
the extent that such are to be paid from Loan proceeds,by executing and delivering Agency
Form SF 5700-52 to the Finance Authority whenever any agreements or subagreements
are awarded. (These reports must be submitted on regular reporting cycles consistent with
SRF Policy Guidelines commencing after such agreement or subagreement is awarded.)
(d) Comply with all applicable federal, State and local statutes, rules and
regulations relating to the acquisition and construction of the Drinking Water System.
(e) In the event Construction is to be paid from Loan proceeds, prior to an award
of any contract for Construction of the Project, obtain a construction permit from the
Department and receive the written approval of the Finance Authority of the Preliminary
Engineering Report.
(f) Obtain the property rights necessary to construct the Drinking Water System
and, in procuring any such rights comply with federal and State law.
(g) In the event Construction is to be paid from Loan proceeds, comply with the .
federal Davis-Bacon Act, codified at 40 U.S.C. 276a-276a-5 unless separately waived by
the Finance Authority.
(h) In the event Construction is to be paid from Loan proceeds, execute and deliver
to the Finance Authority Agency Form 4700-4 ("Pre-award Compliance Review Report
for Wastewater Treatment Construction Grants") and such other forms as may be required
by the Safe Drinking Water Act or SRF Policy Guidelines.
(i) In the event Construction is to be paid from Loan proceeds, follow guidance
issued by the Finance Authority in procuring contracts for Construction, including (1)
submission to the Finance Authority of Project change orders, (2)obtaining approval from
the Director of Environmental Programs of any Project change order which significantly
changes the scope or Design of the Project or,when taking into account other change orders
and contracts, are reasonably expected to result in expenditures in an amount greater than
the Loan, (3)receiving approval from the Director of Environmental Programs prior to the
award of any contract for Construction and (4) receiving authorization from the Director
of Environmental Programs prior to initiating procurement of Construction of the Project.
(j) In the event Construction is to be paid from Loan proceeds, before awarding
Construction contracts, receive approval of the Director of Environmental Programs for
the user charge system (including any use ordinance and interlocal agreement) associated
with the Project.
(k) In the event Construction is to be paid from Loan proceeds, cause the Project
to be constructed in accordance with the Preliminary Engineering Report and the Plans and
Specifications, using approved contract papers.
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(1) Permit the Finance Authority and its agents to inspect from time to time(1)the
Project, (2)the Drinking Water System and(3)the books and other financial records of the
Drinking Water System, including the inspections described in SRF Policy Guidelines.
Construction contracts shall provide that the Finance Authority or its agents will have
access to the Project and the work related thereto and that the Participant's contractor will
provide proper facilities for such access and inspection. All files and records pertaining to
the Project shall be retained by the Participant for at least six years after Substantial
Completion of Construction.
(m) Upon Substantial Completion of Construction and when requested by the
Finance Authority, provide audited reports to the Finance Authority to permit the Finance
Authority to determine that the Loan proceeds have been used in compliance with this
Agreement.
(n) In the event Construction is to be paid from Loan proceeds, within one year of
Substantial Completion of Construction, consistent with SRF Policy Guidelines, certify to
the Finance Authority that the Project meets performance standards, or if not met, (1)
submit to the Finance Authority(or if directed by the Finance Authority,to the Department)
a corrective action plan and (2) promptly and diligently undertake any corrective action
necessary to bring the Project into compliance with such standards.
(o) In the event Construction is to be paid from Loan proceeds, within one year of
Substantial Completion of Construction,provide as-built plans(if requested by the Finance
Authority)for the Project to the Finance Authority(or if directed by the Finance Authority,
to the Department).
Section 3.02. General Covenants. The Participant hereby covenants and agrees with the
Finance Authority that the Participant will:
(a) Comply with all applicable federal, State and local statutes, rules and
regulations relating to Operation and Maintenance.
(b) (1) Own, operate and maintain the Project and the Drinking Water System for
their useful life, or cause them to be operated and maintained for their useful life; (2) at all
times maintain the Drinking Water System in good condition and operate it in an efficient
manner and at a reasonable cost; and(3)not sell,transfer, lease or otherwise encumber the
Drinking Water System or any portion thereof or any interest therein without the prior
written consent of the Finance Authority
(c) Obtain and maintain the property rights necessary to operate and maintain the
Drinking Water System, and in procuring any such rights, comply with federal and State
law.
(d) Acquire and maintain insurance coverage acceptable to the Finance Authority,
including fidelity bonds, to protect the Drinking Water System and its operations. All
insurance shall be placed with responsible insurance companies qualified to do business
under State law. Insurance proceeds and condemnation awards shall be used to replace or
repair the Drinking Water System unless the Finance Authority consents to a different use
of such proceeds or awards.
(e) Establish and maintain the books and other financial records of the Project
(including the establishment of a separate account or subaccount for the Project) in
accordance with (1) generally accepted governmental accounting principles, as
promulgated by the Government Accounting Standards Board (including GASB No. 34
standards relating to the reporting of infrastructure) and (2) the rules, regulations and
guidance of the State Board of Accounts.
(f) Provide to the Finance Authority and not the Agency (unless specifically
requested by the Agency) such periodic financial and environmental reports as it may
request from time to time, including (1) annual operating and capital budgets and (2) any
and all environmental data related to the Project that is required to be reported.
B-10
Additionally, the Participant shall provide such other information requested or required of
the Finance Authority or the Participant by the Agency.
(g) Provide to the Finance Authority audited financial statements of the Participant
inclusive of the activities of the Drinking Water System, commencing with financial
statements for a calendar year period that ends not more than two (2) years after the date
of this Agreement (and for each calendar year period that ends every two (2) years
thereafter until the Loan has been repaid),which audit(i) shall have been performed by the
Indiana State Board of Accounts or by an independent public accountant and (ii) shall be
submitted to the Finance Authority no later than nine (9) months following the end of the
calendar year period to which such audit pertains.
(h) Continue to update, implement, and maintain an Asset Management Program
(including a Fiscal Sustainability Plan)of the Participant that meets SRF Policy Guidelines
including applicable requirements of the Wastewater SRF Act. The Participant
acknowledges and agrees that its agreement to continue to update,implement,and maintain
an Asset Management Program (including a Fiscal Sustainability Plan) as provided in this
subsection was a condition of the Loan and that the Participant's Asset Management
Program (including a Fiscal Sustainability Plan) was certified prior to the date of
Participant's submission of its Preliminary Engineering Report. Over the term of the Loan,
the Participant further agrees to continue to update, implement and maintain the
Participant's Asset Management Program(including a Fiscal Sustainability Plan)to assure
it has the financial, managerial, technical, and legal capability to operate and maintain its
Treatment Works consistent with SRF Policy Guidelines including applicable
requirements of the Wastewater SRF Act.
(i) Provide notice to the Finance Authority under the circumstances contemplated,
and undertake inspections as required, by SRF Policy Guidelines.
(j) (1) Establish and maintain just and equitable rates and charges for the use of
and the service rendered by the Drinking Water System, to be paid by the owner of each
and every lot,parcel of real estate or building that is connected with and uses the Drinking
Water System, or that in any way uses or is served by the Drinking Water System, (2)
establish,adjust and maintain rates and charges at a level adequate to produce and maintain
sufficient revenue (when determined including user and other charges, fees, income or
revenues available to the Participant, provided that to the extent permitted by law System
Development Charges shall be excluded when determining if such are sufficient)to provide
for the proper Operation and Maintenance of the Drinking Water System, to comply with
and satisfy all covenants contained herein and to pay all obligations of the Drinking Water
System and of the Participant with respect thereto, and (3) if and to the extent Bonds are
payable from property taxes, levy each year a special ad valorem tax upon all property
located in the boundaries of the Participant, to pay all obligations of the Participant with
respect thereto.
(k) If the Bonds are payable from the revenues of the Drinking Water System, not
borrow any money, enter into any contract or agreement or incur any other liabilities in
connection with the Drinking Water System without the prior written consent of the
Finance Authority if such undertaking would involve, commit or use the revenues of the
Drinking Water System; provided that the Participant may authorize and issue additional
obligations,payable out of the revenues of its Drinking Water System, ranking on a parity
with the Bonds for the purpose of financing the cost of future additions, extensions and
improvements to the Drinking Water System, or to refund obligations of the Drinking
Water System, subject to the conditions, if any, in the Authorizing Instrument.
(1) Comply with the Civil Rights Act of 1964, as amended, 42 U.S.C.
Section 2000d et sec., the Age Discrimination Act, as amended, Public Law 94-135,
Section 504 of the Rehabilitation Act of 1973, as amended (including Executive Orders
11914 and 11250), 29 U.S.C. Section 794, Section 13 of the Federal Water Pollution
Control Act Amendments of 1972, Public Law 92-500, Executive Order 11246 regarding
equal employment opportunity, and Executive Orders 11625 and 12138.
B-11
(m) Undertake all actions necessary to investigate all potential, material claims
which the Participant may have against other persons with respect to the Drinking Water
System and the Project and take whatever action is necessary or appropriate to (1)recover
on any actionable, material claims related to the Project or the Planning, Design or
Construction thereof, (2)meet applicable Project performance standards and(3) otherwise
operate the Drinking Water System in accordance with applicable federal, State and local
law.
(n) Not modify, alter, amend, add to or rescind any provision of the Authorizing
Instrument without the prior written consent of the Finance Authority.
(o) In the event the Participant adopts an ordinance or resolution to refund the Bonds,
within 5 days of the adoption of the ordinance or resolution, provide written notice to the
Finance Authority of the refunding. Any refunding of the Bonds shall only be undertaken by
the Participant with the prior written consent of the Finance Authority.
(p) In any year in which total expenditures of Federal financial assistance received
from all sources exceeds $750,000 the Participant shall comply with the Federal Single
Audit Act (SAA) of 1984, as amended by the Federal Single Audit Act Amendments of
1996 (see 2 CFR 200 Subpart F) and have an audit of their use of Federal financial
assistance. The Participant agrees to provide the Finance Authority with a copy of the
SAA audit within 9 months of the audit period.
(q) Inform the Finance Authority of any findings and recommendations pertaining
to the SRF program contained in an audit of 2 CFR 200 Subpart F(a/k/a"Super Circular")
matters in which SRF Federal financial assistance was less than$750,000.
(r) Initiate within 6 months of the audit period corrective actions for those audit
reports with findings and recommendations that impact the SRF financial assistance.
(s) Notwithstanding anything in the Authorizing Instrument related to the Bonds
(or in any authorizing instrument related to any other outstanding bonds payable from the
revenues of the Drinking Water System which are on a parity with the Bonds) to the
contrary, in the event any Credit Provider that has provided a Credit Instrument fails to be
rated on a long term basis at least "A-/A3" by Standard & Poor's Ratings Services, a
Division of the McGraw-Hill Companies, and Moody's Investors Service, Inc., and their
successors(such Credit Instrument,a"Disqualified Instrument"),within 12 months of such
failure(or pursuant to such other schedule as may be approved by the Finance Authority),
the Participant shall cause cash(or a replacement Credit Instrument from a Credit Provider
that is rated on a long term basis at least"AA-/Aa3"by Standard&Poor's Ratings Services,
a Division of the McGraw-Hill Companies, and Moody's Investors Service, Inc., and their
successors)(or some combination thereof)in an aggregate amount equal to the stated credit
available under the Disqualified Instrument(s) to be deposited in the related reserve
account(s) in lieu of such Disqualified Instrument(s). No Disqualified Instrument shall be
included as part of the reserve balance which satisfies any such reserve requirement under
any such authorizing instrument. Nothing in this subsection shall waive or modify
additional requirements contained in any such authorizing instrument (including the
Authorizing Instrument related to the Bonds); the provisions of this subsection and any
such authorizing instrument (including the Authorizing Instrument related to the Bonds)
shall both be required to be met. Unless and until notice shall be given by the Finance
Authority to the Participant, a surety policy issued by MBIA Insurance Corporation or
Financial Guaranty Insurance Company that has been reinsured by National Public Finance
Guarantee Corporation(formerly known as MBIA Insurance Corp. of Illinois) shall not be
treated as a Disqualified Instrument.
(t) (i) comply with Title 40 CFR Part 34 (New Restrictions on Lobbying) and the
Byrd Anti-Lobbying Amendment("Lobbying Restrictions"); (ii)provide certifications and
disclosures related to Lobbying Restrictions in a form and manner as may from time to
time be required by SRF Policy Guidelines or the Safe Drinking Water Act including
without limitation the Lobbying Restrictions; and (iii) pay any applicable civil penalty
required by the Lobbying Restrictions as may be applicable to making a prohibited
expenditure under Title 40 CFR Part 34, or failure to file any required certification or
B-12
lobbying disclosures. The Participant understands and acknowledges that pursuant to such
Lobbying Restrictions, the making of any such prohibited expenditure, or any such failure
to file or disclose, is subject to a civil penalty of not less than $10,000 and not more than
$100,000 for each such expenditure or failure.
(u) Comply with all federal requirements applicable to the Loan (including those
imposed by the 2014 Appropriations Act and related SRF Policy Guidelines) which the
Participant understands includes, among other, requirements that all of the iron and steel
products used in the Project are to be produced in the United States ("American Iron and
Steel Requirement") unless (i) the Participant has requested and obtained a waiver from
the Agency pertaining to the Project or (ii) the Finance Authority has otherwise advised
the Participant in writing that the American Iron and Steel Requirement is not applicable
to the Project.
(v) Comply with all record keeping and reporting requirements under the Safe
Drinking Water Act, including any reports required by a Federal agency or the Finance
Authority such as performance indicators of program deliverables, information on costs
and project progress. The Participant understands that(i) each contract and subcontract
related to the Project is subject to audit by appropriate federal and state entities and
(ii) failure to comply with the Safe Drinking Water Act and this Agreement may be a
default hereunder that results in a repayment of the Loan in advance of the maturity of the
Bonds and/or other remedial actions.
(w) Whenever from time to time requested by the Finance Authority, submit
evidence satisfactory to the Finance Authority demonstrating that the Participant's rates
and charges are at a level adequate to produce and maintain sufficient net revenue after
providing for the proper Operation and Maintenance of the Drinking Water System, on a
proforma basis consistent with SRF Policy Guidelines, to provide 1.25x coverage on all
obligations of the Drinking Water System (including the Bonds) and, in the event the
Participant's rates and charges are insufficient to demonstrate such coverage, then to the
extent permitted by law annually enact an increase in its rates and charges reasonably
designed to be consistent with SRF Policy Guidelines regarding such coverage.
(x) Notwithstanding any provision of the Authorization Instrument to the contrary,
not make any payment in lieu of property taxes from any account of the Drinking Water
System (i) if the Finance Authority provides notice to the Participant that the Finance
Authority has determined in its reasonable discretion that such a transfer adversely affects
the Finance Authority and(ii)more frequently than semiannually if the Authority provides
notice to the Participant so requiring such a limitation on frequency.
(y) Comply with all requirements of this Agreement applicable to the Loan
(including those imposed by the attached Exhibit D).
Section 3.03. Representations and Warranties of the Participant. After due
investigation and inquiry, the Participant hereby represents and warrants to the Finance Authority
that:
(a) The Participant is duly organized and existing under State law, and constitutes
a "political subdivision" within the meaning of I.C. 5-1.2-2-57 and a "participant" within
the meaning of I.C. 5-1.2-2-54. The Project and the Drinking Water System are subject to
I.C. 8-1.5.
(b) The Participant and its Drinking Water System are subject to the jurisdiction
of the Commission under I.C. 8-1-2 or any other applicable law and the Project and the
Bonds are subject to the Commission's review and approval requirements.If the Participant
or its Drinking Water System is subject to the jurisdiction of the Commission under I.C. 8-
1-2 or any other applicable law, the Commission has reviewed and approved the Project
and the issuance of the Bonds and no additional approvals or consents are required to be
obtained from the Commission related thereto.
B-13
(c) The Participant has full power and authority to adopt the Authorizing
Instrument, enter into this Agreement and issue the Bonds and perform its obligations
hereunder and thereunder.
(d) By all required action, the Participant has duly adopted the Authorizing
Instrument and authorized the execution and delivery of this Agreement,the Bonds and all
other papers delivered in connection herewith.
(e) Neither the execution of, nor the consummation of the transaction
contemplated by, this Agreement nor the compliance with the terms and conditions of any
other paper referred to herein,shall conflict with,result in a breach of or constitute a default
under, any indenture, mortgage, lease, agreement or instrument to which the Participant is
a party or by which the Participant or its property, including the Drinking Water System,
is bound or any law, regulation, order, writ, injunction or decree of any court or
governmental agency or instrumentality having jurisdiction.
(f) There is no litigation pending or, to the knowledge of the Participant, upon
investigation, threatened that (1) challenges or questions the validity or binding effect of
this Agreement, the Authorizing Instrument or the Bonds or the authority or ability of the
Participant to execute and deliver this Agreement or the Bonds and perform its obligations
hereunder or thereunder or (2) would, if adversely determined, have a significant adverse
effect on the ability of the Participant to meet its obligations under this Agreement, the
Authorizing Instrument or the Bonds.
(g) The Participant has not at any time failed to pay when due interest or principal
on, and it is not now in default under, any warrant or other evidence of obligation or
indebtedness of the Participant.
(h) All information furnished by the Participant to the Finance Authority or any of
the persons representing the Finance Authority in connection with the Loan or the Project
is accurate and complete in all material respects including compliance with the obligations,
requirements and undertakings imposed upon the Participant pursuant to this Agreement.
(i) The Participant has taken or will take all proceedings required by law to enable
it to issue and sell the Bonds as contemplated by this Agreement.
(j) For any outstanding bonds payable from the revenues of the Drinking Water
System which are on a parity with the Bonds,each Credit Provider,if any,that has provided
a Credit Instrument is at least rated on a long term basis "A-/A3" long term by Standard&
Poor's Ratings Services, a Division of the McGraw-Hill Companies and Moody's Investors
Service, Inc.,and their successors, except as represented and set forth in Exhibit C attached
thereto (and with respect to which true, accurate and complete copies of each such Credit
Instrument have been delivered to the Finance Authority).
Each of the foregoing representations and warranties will be deemed to have been made by
the Participant as of the date of this Agreement and as of the date of any disbursement of Loan
proceeds (including from the Construction Fund). Each of the foregoing representations and
warranties shall survive the Loan disbursements regardless of any investigation or investigations
the Finance Authority may have undertaken.
Section 3.04. Covenants Regarding Assignment. The Participant acknowledges that the
Finance Authority may pledge, sell or assign the Bonds or cause the Bonds to be pledged, sold or
assigned, and certain of its rights related thereto,as permitted pursuant to Section 5.02 herein. The
Participant covenants and agrees to cooperate with and assist in, at its expense, any such
assignment. Within 30 days following a request by the Finance Authority, the Participant
covenants and agrees with the Finance Authority that the Participant will, at its expense, furnish
any information, financial or otherwise, with respect to the Participant, this Agreement, the
Authorizing Instrument and the Bonds and the Drinking Water System as the Finance Authority
reasonably requests in writing to facilitate the sale or assignment of the Bonds.
Section 3.05. Nature of Information. All information furnished by the Participant to the
Finance Authority or any person representing the Finance Authority in connection with the Loan
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or the Project may be furnished to any other person the Finance Authority, in its judgment, deems
necessary or desirable in its operation and administration of the Drinking Water SRF Program.
Section 3.06. Tax Covenants. The Participant hereby covenants that it will not take, or
cause or permit to be taken by it or by any party under its control, or fail to take or cause to permit
to be taken by it or by any party under its control, any action that would result in the loss of the
exclusion from gross income for federal income tax purposes of interest on the Bonds pursuant to
Section 103 of the Code. The Participant further covenants that it will not do any act or thing that
would cause the Bonds to be "private activity bonds" within the meaning of Section 141 of the
Code or"arbitrage bonds"within the meaning of Section 148 of the Code. In furtherance and not
in limitation of the foregoing, the Participant shall take all action necessary and appropriate to
comply with the arbitrage rebate requirements under Section 148 of the Code to the extent
applicable to the Participant or the Bonds, including 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.
Section 3.07. Non-Discrimination Covenant. Pursuant to and with the force and effect
set forth in I.C. 22-9-1-10,the Participant hereby covenants that the Participant, and its contractor
and subcontractor for the Project, shall not discriminate against any employee or applicant for
employment,to be employed in the performance of this Agreement,with respect to the hire,tenure,
terms, conditions or privileges of employment, or any matter directly or indirectly related to
employment, because of race, color, religion, sex, disability, national origin or ancestry.
(End of Article III)
B-15
ARTICLE IV-DEFAULTS
Section 4.01. Remedies. The Finance Authority's obligation to make a disbursement
under the Loan to the Participant hereunder may be terminated at the option of the Finance
Authority, without giving any prior notice to the Participant, in the event: (a) the Participant fails
to undertake or perform in a timely manner any of its agreements, covenants, terms or conditions
set forth herein or in any paper entered into or delivered in connection herewith (including the
Authorizing Instrument); or(b) any representation or warranty made by the Participant as set forth
herein or in any paper entered into or delivered in connection herewith is materially false or
misleading. Any such event shall constitute an event of default and in addition to any other
remedies at law or in equity, the Finance Authority may (x) require a Loan Reduction Payment
pursuant to Section 2.06 herein as if it were a date that was three (3) years after the dated date of
the Bonds, (y) in the event a Deposit Agreement has not previously been entered into related to
the Participant's Bond Fund (including any related reserve), require the Participant to enter into a
Deposit Agreement (or to modify any such previously entered Deposit Agreement) and the
Participant shall enter into (or modify) such an agreement within 5 days after any such demand
and (z) without giving any prior notice, declare the entire outstanding principal amount of the
Loan, together with accrued interest thereon, immediately due and payable.
Section 4.02. Effect of Default. Failure on the part of the Finance Authority in any
instance or under any circumstance to observe or perform fully any obligation assumed by or
imposed upon the Finance Authority by this Agreement or by law shall not make the Finance
Authority liable in damages to the Participant or relieve the Participant from paying any Bond or
fully performing any other obligation required of it under this Agreement or the Authorizing
Instrument; provided, however, that the Participant may have and pursue any and all other
remedies provided by law for compelling performance by the Finance Authority of such obligation
assumed by or imposed upon the Finance Authority. The obligations of the Finance Authority
hereunder do not create a debt or a liability of the Finance Authority or the State under the
constitution of the State or a pledge of the faith or credit of the Finance Authority or the State and
do not directly, indirectly or contingently, obligate the Finance Authority or the State to levy any
form of taxation for the payment thereof or to make any appropriation for their payment. Neither
the Finance Authority or the State, nor any agent, attorney, member or employee of the Finance
Authority or the State shall in any event be liable for damages, if any, for the nonperformance of
any obligation or agreement of any kind whatsoever set forth in this Agreement.
Section 4.03. Defaults under Prior Agreement. The Participant and the Finance
Authority agree that any event of default occurring under the Prior Agreement shall constitute an
event of default under this Agreement. Similarly, the Participant and the Finance Authority agree
that any event of default under this Agreement, or under any subsequent financial assistance
agreement entered into between the Participant and the Finance Authority,shall constitute an event
of default under the Prior Agreement and the subsequent financial assistance agreement, if any, as
the case may be.
(End of Article IV)
B-16
ARTICLE V
MISCELLANEOUS
Section 5.01. Citations. Any reference to a part, provision, section or other reference
description of a federal or State statute, rule or regulation contained herein shall include any
amendments, replacements or supplements to such statutes, rules or regulation as may be made
effective from time to time. Any reference to a Loan disbursement shall include any disbursement
from the Construction Fund. Any use of the term "including"herein shall not be a limitation as to
any provision herein contained but shall mean and include,without limitation,the specific matters
so referenced.
Section 5.02. Assignment. Neither this Agreement, nor the Loan or the proceeds thereof
may be assigned by the Participant without the prior written consent of the Finance Authority and
any attempt at such an assignment without such consent shall be void. The Finance Authority may
at its option sell or assign all or a portion of its rights and obligations under this Agreement, the
Authorizing Instrument, and the Bonds to an agency of the State or to a separate body corporate
and politic of the State or to a trustee under trust instrument to which the Finance Authority, the
State or any assignee is a beneficiary or party. The Finance Authority may at its option pledge or
assign all or a portion of its rights under this Agreement, the Authorizing Instrument, and the
Bonds to any person. The Participant hereby consents to any such pledge or assignment by the
Finance Authority. This Agreement shall be binding upon and inure to the benefit of any permitted
secured party, successor and assign.
Section 5.03. No Waiver. Neither the failure of the Finance Authority nor the delay of
the Finance Authority to exercise any right,power or privilege under this Agreement shall operate
as a waiver thereof,nor shall any single or partial exercise of any right,power or privilege preclude
any other further exercise of any other right,power or privilege.
Section 5.04. Modifications. No change or modification of this Agreement shall be valid
unless the same is in writing and signed by the parties hereto.
Section 5.05. Entire Agreement. This Agreement contains the entire agreement between
the parties hereto and there are no promises, agreements, conditions,undertakings, warranties and
representations, either written or oral, expressed or implied between the parties hereto other than
as herein set forth or as may be made in the Authorizing Instrument and the other papers delivered
in connection herewith. In the event there is a conflict between the terms of this Agreement and
the Authorizing Instrument, the terms of this Agreement shall control. It is expressly understood
and agreed that except as otherwise provided herein this Agreement represents an integration of
any and all prior and contemporaneous promises,agreements,conditions,undertakings,warranties
and representations between the parties hereto.This Agreement shall not be deemed to be a merger
or integration of the existing terms under the Prior Agreement except as expressly set forth in
Section 4.03 herein.
Section 5.06. Execution of Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be executed by the Finance Authority and the
Participant, and all of which shall be regarded for all purposes as one original and shall constitute
one and the same instrument.
Section 5.07. Severability of Invalid Provisions. If any one or more of the covenants or
agreements provided in this Agreement on the part of the Finance Authority or the Participant to
be performed shall be deemed by a court of competent jurisdiction to be contrary to law or cause
the Bonds to be invalid as determined by a court of competent jurisdiction, then such covenant or
covenants or agreement or agreements shall be deemed severable from the remaining covenants
and agreements and waived and shall in no way affect the validity of the other provisions of this
Agreement.
Section 5.08. Notices. All notices hereunder shall be sufficiently given for all purposes
hereunder if in writing and delivered personally or sent or transmitted to the appropriate destination
B-17
as set forth below in the manner provided for herein. Notice to the Finance Authority shall be
addressed to:
Indiana Finance Authority
SRF Programs
100 North Senate, Room 1275
Indianapolis, Indiana 46204
Attention: Director of Environmental Programs
or at such other address(es)or number(s)and to the attention of such other person(s)as the Finance
Authority may designate by notice to the Participant. Notices to the Participant shall be addressed
to:
City of South Bend
City-County Building
227 W. Jefferson Boulevard
South Bend, Indiana 46601
Attention: Controller
or at such other address(es) or number(s) and to the attention of such other person(s) as the
Participant may designate by notice to the Finance Authority. Any notice hereunder shall be
deemed to have been served or given as of(a) the date such notice is personally delivered, (b) three
(3) Business Days after it is mailed U.S. mail, First Class postage prepaid, (c) one (1) Business
Day after it is sent on such terms by Federal Express or similar next-day courier, or (d)the same
day as it is sent by facsimile transmission with telephonic confirmation of receipt by the person to
whom it is sent.
Section 5.09. Expenses. The Participant covenants and agrees to pay (a) the fees, costs
and expenses in connection with making the Loan, including issuing the Bonds and providing the
necessary certificates, documents and opinions required to be delivered therewith; (b) the fees,
costs and expenses in connection with making and administering the Loan; (c) the costs and
expenses of complying with its covenants made herein; and (d) any and all costs and expenses,
including attorneys' fees, incurred by the Finance Authority in connection with the enforcement
of this Agreement, the Authorizing Instrument and the Bonds in the event of the breach by the
Participant of or a default under this Agreement, the Authorizing Instrument or the Bonds.
Notwithstanding clause (b) above, the Participant shall not be obligated to pay any of the fees,
costs and expenses in connection with administering the Loan except as follows: (1) the Finance
Authority may request and the Participant shall promptly pay (no later than the date first above
written), a closing fee in connection with the Loan in an amount determined by the Finance
Authority, but not exceeding $1,000, which may not be paid from a Loan disbursement; (2) the
Finance Authority may request and the Participant shall promptly pay (no later than thirty (30)
days after any request), an annual administrative fee in connection with the Loan in an amount
determined by the Finance Authority, but not exceeding $1,000, which may not be paid from a
Loan disbursement; (3) the Finance Authority may request and the Participant shall promptly pay
(no later than thirty (30) days after any request), a Non-Use Fee in connection with the Loan,
which may not be paid from a Loan disbursement; (4) for so long as the Finance Authority is the
registered owner of the Bonds, at the direction of the Finance Authority, the interest rate on the
Bonds may be adjusted to lower the interest rate on the Bonds, and the difference between the
amount payable as the original rate on the Bonds and the lower rate shall be deemed an additional
administrative fee in connection with the Drinking Water SRF Program; and (5) the Participant
shall only be obligated to pay fees, costs and expenses of the Finance Authority's counsel and
financial advisers in connection with making the Loan up to $10,000, which may be paid from a
Loan disbursement.
Section 5.10. Applicable Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Indiana.
Section 5.11. Term. This Agreement shall terminate at such time as the Participant has
fully met and discharged all of its obligations hereunder, which term may extend beyond the final
payment of the Bonds or provision for the payment of the Bonds pursuant to the Authorizing
Instrument.
B-18
Section 5.12. Non-Collusion. The undersigned attests, subject to the penalties of perjury,
that he/she is an authorized officer or representative of the Participant, that he/she has not,nor has
any other officer or representative of the Participant, directly or indirectly, to the best of the
undersigned's knowledge, entered into or offered to enter into any combination, collusion or
agreement to receive pay, and that the undersigned has not received or paid any sum of money or
other consideration for the execution of this Agreement other than that which appears upon the
face of the agreement or is a payment to lawyers, accountants and engineers by the Participant
related to customary services rendered in connection with the Loan.
Section 5.13. Federal Award Information. The Catalogue of Federal Domestic
Assistance("CFDA")Number for the Authority's Drinking Water SRF Program is 66.468 and the
Federal Agency & Program Name is "US Environmental Protection Agency Capitalization Grant
for Drinking Water State Revolving Funds."
(End of Article V)
[THE REMAINDER OF THIS PAGE HAS
BEEN INTENTIONALLY LEFT BLANK]
B-19
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized officers or officials, all as of the date first above written.
CITY OF SOUTH BEND, INDIANA INDIANA FINANCE AUTHORITY
"Participant" "Finance Authority"
By: By:
James P. McGoff
Printed: Director of Environmental Programs
Title:
Attest:
Signature Page to Financial Assistance Agreement
EXHIBIT A
The Project consists of the following improvements to the Participant's Drinking Water System:
•
•
•
•
[The Project contains components that are GPR Projects, which GPR Projects Expenditures have
been determined and are expected as of the date of this Agreement to be in the amount as set forth
in the Participant's business case or categorical exclusion which is posted at www.srf.in.gov.]
The Project is more fully described in, and shall be in accordance with, the Preliminary
Engineering Report and the Plans and Specifications approved by the Finance Authority (or if
designated by the Finance Authority,the Department).
[End of Exhibit A]
A-I
EXHIBIT B
Principal Payment Schedule for the Bonds
Maturity Date Principal Maturity Date Principal
Amount Amount
01/01/2024 $ 07/01/2043 S
01/01/2025 01/01/2044
01/01/2026 07/01/2044
01/01/2027 01/01/2045
01/01/2028 07/01/2045
01/01/2029 01/01/2046
01/01/2030 07/01/2046
01/01/2031 01/01/2047
01/01/2032 07/01/2047
01/01/2033 01/01/2048
07/01/2033 07/01/2048
01/01/2034 01/01/2049
07/01/2034 07/01/2049
01/01/2035 01/01/2050
07/01/2035 07/01/2050
01/01/2036 01/01/2051
07/01/2036 07/01/2051
01/01/2037 01/01/2052
07/01/2037 07/01/2052
01/01/203 8 01/01/2053
07/01/2038 07/01/2053
01/01/2039 01/01/2054
07/01/2039 07/01/2054
01/01/2040 01/01/2055
07/01/2040 07/01/2055
01/01/2041 01/01/2056
07/01/2041 07/01/2056
01/01/2042 01/01/2057
07/01/2042 07/01/2057
01/01/2043
TOTAL
S
[End of Exhibit B]
B-1
EXHIBIT C
Credit Instrument
Credit Providers rated on a long term basis lower than "A-/A3" long term by Standard &
Poor's Ratings Services, a Division of the McGraw-Hill Companies and Moody's Investors
Service, Inc. are:
• None.
[End of Exhibit C]
C-1
Exhibit D
Additional Terms
A. The following additional terms in this Paragraph A are[NOT]applicable to the Loan:
"Equivalency Project" shall mean a project designated by the Finance Authority as an
"equivalency project" under the Safe Drinking Water Act related to the "US Environmental
Protection Agency Capitalization Grant for Drinking Water State Revolving Funds" for the
federal fiscal year ending September 30, 2022 (or such later federal fiscal year as the Finance
Authority may otherwise designate).
"BIL" shall mean the Bipartisan Infrastructure Law (BIL) (P.L. 117-58), also known as the
"Infrastructure Investment and Jobs Act of 2021"(IIJA), signed into law on November 15,2021.
The Participant understands and acknowledges that the Project has been designated as an
Equivalency Project and is required to meet the related applicable requirements of the Safe
Drinking Water Act.
The Participant further understands and agrees that it is required to comply with all terms of 2
CFR 200.216, Prohibition on certain telecommunication and video surveillance services or
equipment, which among other requirements prohibits the use of Loan proceeds by the
Participant to procure (by means of entering into, extending, or renewing contracts) or obtain
equipment, systems or services that use"covered telecommunications equipment or services"
identified in the regulation as a substantial or essential component of any Drinking Water
System, or as critical technology as part of any Drinking Water System. Such prohibitions
extend to the use of Loan proceeds by the Participant to enter into a contract with an entity that
"uses any equipment, system, or service that uses covered telecommunications equipment or
services" as a substantial or essential component of any Drinking Water System, or as critical
technology as part of any Drinking Water System. The Participant represents and warrants that
it has not procured or obtained from Loan proceeds equipment, systems or services that use
"covered telecommunications equipment or services" identified in the regulation as a
substantial or essential component of any Drinking Water System, or as critical technology as
part of any Drinking Water System.
The Participant further understands and agrees that it shall comply with all federal
requirements applicable to the assistance received(including those imposed by BIL)which the
Participant understands includes, but is not limited to, the following requirements: that all of
the iron and steel,manufactured products, and construction materials used in the Project are to
be produced in the United States("Build America, Buy America Requirements")unless (i)the
Participant has requested and obtained a waiver from the cognizant Agency pertaining to the
Project or the Project is otherwise covered by a general applicability waiver, or (ii) all of the
contributing Agencies have otherwise advised the Participant in writing that the Build
America, Buy America Requirements are not applicable to the Project.
The Participant further understands and agrees that it shall comply with all record keeping and
reporting requirements under all applicable legal authorities, including any reports required by
the Finance Authority or the Agency, such as performance indicators of program deliverables,
information on costs and progress of the Project. The Participant understands that (i) each
contract and subcontract related to the Project is subject to audit by appropriate federal and
state entities and (ii) failure to comply with the applicable legal requirements and this
Agreement may result in a default hereunder that results in a repayment of the Loan in advance
of the maturity of the Bonds,termination and/or repayment of grants, cooperative agreements,
direct assistance or other types of financial assistance, and/or other remedial actions.
The Participant further understands and agrees that it shall comply with (i) Executive Order
14030, regarding Climate-Related Financial Risk and (ii) Executive Order 13690, regarding
Flood Risk Management Standards.
The Participant further understands that the Project is being financed, in whole or in part, with
BIL funds, and shall place a physical sign displaying the official Building a Better America
emblem and Agency logo at the site of the Project.
D-- 1 -
B. The following additional terms in this Paragraph B related to GPR Projects (and the related
defined terms) are[NOT]applicable to the Loan.
"GPR Projects" shall mean Project components that meet the requirement of the
"Green Project Reserve(GPR) Sustainability Incentive Program"consistent with SRF Policy
Guidelines including applicable requirements of the Drinking Water SRF Act.
"GPR Projects Adjustment Fee"shall mean an amount which would equal the gross
additional interest that would have accrued on the Bonds from the date of this Agreement
through their scheduled final maturity, had such Bonds been issued at an interest rate
determined under the Drinking Water SRF Program's interest rate policies and practices using
the final, actual GPR Projects Expenditures (rather than the amount referenced in the
Participant's business case or categorical exclusion posted at www.srf.in.gov), all as
determined by the Finance Authority.
"GPR Projects Expenditures" shall mean those costs and expenses incurred by the
Participant that are part of the Project which are GPR Projects in nature (within the meaning
of the Drinking Water SRF Act) as determined by the Finance Authority, in order for the
Bonds to receive special interest rate treatment under the Drinking Water SRF Program's
interest rate policies and practices.
The Participant understands and acknowledges that a special interest rate has been applied to
the Bonds as a result of a portion of the Project having been identified by the Participant as
being a GPR Projects project. In the event GPR Projects Expenditures are hereafter
determined by the Finance Authority to be less than the amount referenced in the Participant's
business case or categorical exclusion, then the Finance Authority may request and the
Participant shall promptly pay(no later than thirty(30)days after any request),a GPR Projects
Adjustment Fee in connection with the Loan. The Participant shall certify to the Finance
Authority those Loan disbursements it represents to be its GPR Projects Expenditures when
and as required by SRF Policy Guidelines. The Participant understands and acknowledges
that it is required to submit a business case or categorical exclusion documenting GPR
Projects prior to loan closing or if a request is made pursuant to Section 3.02(f) of this
Agreement.
C. The following additional terms in this Paragraph C related to LLR Projects (and the related
defined terms) are[NOT]applicable to the Loan.
"LLR Projects" shall mean Project components that meet the requirement of the
"Lead Line Replacement (LLR) Incentive Program" consistent with SRF Policy Guidelines
including applicable requirements of the Drinking Water SRF Act.
"LLR Projects Adjustment Fee"shall mean an amount which would equal the gross
additional interest that would have accrued on the Bonds from the date of this Agreement
through their scheduled final maturity, had such Bonds been issued at an interest rate
determined under the Drinking Water SRF Program's interest rate policies and practices using
the final, actual LLR Projects Expenditures (rather than the amount referenced in the
Participant's related post-bid and other documents submitted to the Finance Authority), all as
determined by the Finance Authority.
"LLR Projects Expenditures" shall mean those costs and expenses incurred by the
Participant that are part of the Project which are LLR Projects in nature (within the meaning
of the Drinking Water SRF Act) as determined by the Finance Authority, in order for the
Bonds to receive special interest rate treatment under the Drinking Water SRF Program's
interest rate policies and practices.
The Participant understands and acknowledges that a special interest rate has been applied to
the Bonds as a result of a portion of the Project having been identified by the Participant as
being a LLR Projects project. In the event LLR Projects Expenditures are hereafter
determined by the Finance Authority to be less than the amount referenced in the Participant's
related post-bid and other documents submitted to the Finance Authority, then the Finance
Authority may request and the Participant shall promptly pay (no later than thirty (30) days
D-- 2 -
after any request), a LLR Projects Adjustment Fee in connection with the Loan. The
Participant shall certify to the Finance Authority those Loan disbursements it represents to be
its LLR Projects Expenditures when and as required by SRF Policy Guidelines.
[End of Exhibit D]
DMS 21914200v4
D-- 3 -
lobbying disclosures. The Participant understands and acknowledges that pursuant to such
Lobbying Restrictions, the making of any such prohibited expenditure, or any such failure
to file or disclose, is subject to a civil penalty of not less than $10,000 and not more than
$100,000 for each such expenditure or failure.
(u) Comply with all federal requirements applicable to the Loan (including those
imposed by the 2014 Appropriations Act and related SRF Policy Guidelines) which the
Participant understands includes, among other, requirements that all of the iron and steel
products used in the Project are to be produced in the United States ("American Iron and
Steel Requirement") unless (i) the Participant has requested and obtained a waiver from
the Agency pertaining to the Project or (ii) the Finance Authority has otherwise advised
the Participant in writing that the American Iron and Steel Requirement is not applicable
to the Project.
(v) Comply with all record keeping and reporting requirements under the Safe
Drinking Water Act, including any reports required by a Federal agency or the Finance
Authority such as performance indicators of program deliverables, information on costs
and project progress. The Participant understands that (i) each contract and subcontract
related to the Project is subject to audit by appropriate federal and state entities and
(ii) failure to comply with the Safe Drinking Water Act and this Agreement may be a
default hereunder that results in a repayment of the Loan in advance of the maturity of the
Bonds and/or other remedial actions.
(w) Whenever from time to time requested by the Finance Authority, submit
evidence satisfactory to the Finance Authority demonstrating that the Participant's rates
and charges are at a level adequate to produce and maintain sufficient net revenue after
providing for the proper Operation and Maintenance of the Drinking Water System, on a
proforma basis consistent with SRF Policy Guidelines, to provide 1.25x coverage on all
obligations of the Drinking Water System (including the Bonds) and, in the event the
Participant's rates and charges are insufficient to demonstrate such coverage, then to the
extent permitted by law annually enact an increase in its rates and charges reasonably
designed to be consistent with SRF Policy Guidelines regarding such coverage.
(x) Notwithstanding any provision of the Authorization Instrument to the contrary,
not make any payment in lieu of property taxes from any account of the Drinking Water
System (i) if the Finance Authority provides notice to the Participant that the Finance
Authority has determined in its reasonable discretion that such a transfer adversely affects
the Finance Authority and(ii)more frequently than semiannually if the Authority provides
notice to the Participant so requiring such a limitation on frequency.
(y) Comply with all requirements of this Agreement applicable to the Loan
(including those imposed by the attached Exhibit D).
Section 3.03. Representations and Warranties of the Participant. After due
investigation and inquiry, the Participant hereby represents and warrants to the Finance Authority
that:
(a) The Participant is duly organized and existing under State law, and constitutes
a "political subdivision" within the meaning of I.C. 5-1.2-2-57 and a "participant" within
the meaning of I.C. 5-1.2-2-54. The Project and the Drinking Water System are subject to
I.C. 8-1.5.
(b) The Participant and its Drinking Water System are subject to the jurisdiction
of the Commission under I.C. 8-1-2 or any other applicable law and the Project and the
Bonds are subject to the Commission's review and approval requirements.If the Participant
or its Drinking Water System is subject to the jurisdiction of the Commission under I.C. 8-
1-2 or any other applicable law, the Commission has reviewed and approved the Project
and the issuance of the Bonds and no additional approvals or consents are required to be
obtained from the Commission related thereto.
B-13
or the Project may be furnished to any other person the Finance Authority, in its judgment, deems
necessary or desirable in its operation and administration of the Drinking Water SRF Program.
Section 3.06. Tax Covenants. The Participant hereby covenants that it will not take, or
cause or permit to be taken by it or by any party under its control, or fail to take or cause to permit
to be taken by it or by any party under its control, any action that would result in the loss of the
exclusion from gross income for federal income tax purposes of interest on the Bonds pursuant to
Section 103 of the Code. The Participant further covenants that it will not do any act or thing that
would cause the Bonds to be "private activity bonds" within the meaning of Section 141 of the
Code or"arbitrage bonds"within the meaning of Section 148 of the Code. In furtherance and not
in limitation of the foregoing, the Participant shall take all action necessary and appropriate to
comply with the arbitrage rebate requirements under Section 148 of the Code to the extent
applicable to the Participant or the Bonds, including 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.
Section 3.07. Non-Discrimination Covenant. Pursuant to and with the force and effect
set forth in I.C. 22-9-1-10, the Participant hereby covenants that the Participant, and its contractor
and subcontractor for the Project, shall not discriminate against any employee or applicant for
employment,to be employed in the performance of this Agreement,with respect to the hire,tenure,
terms, conditions or privileges of employment, or any matter directly or indirectly related to
employment, because of race, color, religion, sex, disability, national origin or ancestry.
(End of Article III)
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