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HomeMy WebLinkAboutSupporting and Amend Ordinance No. 8318-92, as amended by ordinance 8419-93, Additions and Improvements to WaterworksORDINANCE No. s3~e~~ Passed by the Common Council of the City of South Bend, Indiana May 28, Attest: 20 02 __~ :% I~, Attest: ,~~ ~~~`..~' G/ /~.-~`--~~.~` `~ Presented by me to the Mayor of the City of Soutlt Bend, Indiana ~„r„ ~ 20 ._D2_ City Clerk President of Common Council City Clerk Approved and signed by me June 3, 20 02 ~Gc.e, Mayor • ORDINANCE NO. ~ 3 Z g - ~ ~ AN ORDINANCE SUPPLEMENTING AND AMENDING ORDINANCE NO. 8318-92, AS AMENDED BY ORDINANCE N0.8419-93, CONCERNING THE ACQUISITION AND CONSTRUCTION OF EXTENSIONS, ADDITIONS AND IMPROVEMENTS TO THE WATERWORKS OF THE CITY OF SOUTH BEND AND THE ISSUANCE OF REVENUE BONDS TO PROVIDE THE COST THEREOF; SUPPLEMENTING AND AMENDING ORDINANCE N0.8801-97, CONCERNING THE CONSTRUCTION OF IMPROVEMENTS TO THE WATERWORKS OF THE CITY OF SOUTH BEND AND THE ISSUANCE OF REVENUE BONDS TO PROVIDE THE COST THEREOF; SUPPLEMENTING AND AMENDING ORDINANCE NO. 9027-99, AS AMENDED AND RESTATED BY ORDINANCE N0.9095-00, CONCERNING THE CONSTRUCTION OF IMPROVEMENTS TO THE WATERWORKS OF THE CITY OF SOUTH BEND AND THE ISSUANCE OF REVENUE BONDS TO PROVIDE THE COST THEREOF; AND SUPPLEMENTING AND AMENDING ORDINANCE NO. 9247-O1, CONCERNING THE CONSTRUCTION OF IMPROVEMENTS TO THE WATERWORKS OF THE CITY OF SOUTH BEND AND THE ISSUANCE OF REVENUE BONDS TO PROVIDE THE COST THEREOF; AND THE COLLECTION, SEGREGATION AND DISTRIBUTION OF THE REVENUES OF SAID WATERWORKS, THE SAFEGUARDING OF THE INTERESTS OF THE OWNERS OF SAID BONDS, OTHER MATTERS CONNECTED THEREWITH. STATEMENT OF PURPOSE AND INTENT The City of South Bend, Indiana (the "City") has established, constructed and financed a municipal waterworks, and now owns and operates said waterworks pursuant to I.C. 8-1.5, as amended, and other applicable laws. There are now outstanding bonds issued on account of the works and payable out of the revenues therefrom designated as the "Waterworks Revenue Bonds of 2000," dated June 12, 2000 (the "2000 Bonds"), originally issued in the amount of $2,600,000, authorized by Ordinance No. 9027-99 adopted by the Common Council of the City (the "Council") on August 23,1999 (the "1999 Ordinance"), as amended and restated by Ordinance No. 9095-00 adopted by the Council on February 28, 2000 (the "2000 Ordinance"), now outstanding in the amount of $2, 544,000. There are also now outstanding bonds issued on account of the works and payable out of the revenues therefrom designated as the "Waterworks Revenue Bonds of 1997," dated December 1, 1997 (the "1997 Bonds"), originally issued in the amount of $22,500,000, authorized by Ordinance No. 8801-97 adopted by the Council on June 23, 1997 (the "1997 Ordinance"), now outstanding in the amount of $17,465,000. There are also now outstanding bonds issued on account of the works and payable out of the revenues therefrom designated as the "Waterworks Revenue Bonds of 1993," dated November 1, 1993 (the "1993 Bonds"), originally issued in the amount of $5,100,000 authorized by Ordinance No. 8318-92 adopted by the Council on November 23,1992 (the "1992 Ordinance"), as amended by Ordinance No. 8419-93 adopted by the Council on September 27,1993 (the "1993 Ordinance"), now outstanding in the amount of $3,020,000 (the 2000 Bonds, 1997 Bonds and the 1993 Bonds are collectively referred to herein as the "Outstanding Bonds"). The Council has authorized certain "Waterworks Revenue Bonds of 2001" (the "New Bonds," and together with the Outstanding Bonds, the "Bonds") in an original principal amount not to exceed Six Million Dollars ($6,000,000.00) byOrdinance No. 9247-01 adopted by the Council on August 27, 2001 (the "2001 Ordinance") (the 2001 Ordinance, the 2000 Ordinance, the 1999 Ordinance, the 1997 Ordinance, the 1993 Ordinance and the 1992 Ordinance are collectively referred to herein as the "Ordinances"). The 1997 Bonds were insured by the Financial Security Assurance Inc. ("FSA") to provide funds for the payment of the principal and interest on the 1997 Bonds when due and for which the City shall have failed to provide sufficient funds for the payment thereof. The City entered into a Financial Assistance Agreement with the State of Indiana (the "State"), dated June 15, 2000, with respect to the 2000 Bonds, pursuant to the State's Drinking Water Revolving Program (the "Finance Assistance Agreement"). The Outstanding Bonds and the New Bonds and the related Ordinances require the establishment of a Debt Service Reserve Account in the Sinking Fund and the funding of a Reserve Requirement in order to provide payment in the event such monies in the Bond and Interest Account are insufficient to pay the principal and interest on the Outstanding Bonds and the New Bonds when due. The Council has determined that it is beneficial to the City's waterworks and the owners of the Bonds to adopt this supplemental ordinance, to supplement and amend each of the Ordinances, pursuant to (i) Section 24 of the 1992 Ordinance, (ii) Section 23 of the 1997 Ordinance, (iii) Section 23 of the 2000 Ordinance, and (iv) Section 23 of the 2001 Ordinance, and to substitute an insurance policy to provide funds for the Debt Service Reserve Account thereby freeing monies currently held in the Debt Service Reserve Account for use by and improvement of the waterworks. FSA has reviewed this supplemental ordinance and has approved and consented in writing to supplementing and amending the 1997 Bonds and the 1997 Ordinance as provided herein, in accordance with Section B.7. of a certain Insurance Agreement between the City and FSA, dated December 1, 1997. -2- The State has reviewed this supplemental ordinance and has approved and consented in writing to supplementing and amending the 2000 Bonds and the 2000 Ordinance as provided herein, in accordance with Section 3.02A(c) of the Finance Assistance Agreement: NOW THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BENDS INDIANA AS FOLLOWS: SECTION 1. SUPPLEMENT AND AMENDMENT TO ORDINANCES -SINKING FUND. Section 15 of the 1992 Ordinance, as amended by Section 1 of the 1993 Ordinance, more specifically Ordinance No. 8318-92, as amended by Ordinance No. 8419-93; Section 14 of the 1997 Ordinance, more specifically Ordinance No. 8801-97; Section 14 of the 2000 Ordinance, more specifically Ordinance No. 9095-00; and Section 14 of the 2001 Ordinance, more specifically Ordinance No. 9247-01 are hereby supplemented and amended by adding the following paragraphs to each section: "As an alternative to holding the Reserve Requirement in the Debt Service Reserve Account in cash funds, the City may purchase one or more insurance policies to provide for payment of principal and interest on the Bonds in the event that funds in the Bond and Interest Account are insufficient to pay the principal and interest on the Bonds when due. To the extent that the Bonds are insured, and the insurance policy to be deposited into the Debt Service Reserve Account is not being provided by the insurer of such Bonds, such insurance policy shall be subject to the insurer's prior written consent. In the event a draw is made against the Debt Service Reserve Account insurance policy(s) (the "Reserve Policy") the City shall repay the amount of the draw and related expenses incurred by the issuer(s) of the Reserve Policy (the "Insurer") together with interest thereon at the rate specified in the Reserve Policy and/or the related Reserve Policy Agreement (as defined below). The repayment of the draw amount, related expenses and accrued interest (the "Policy Costs") shall be paid from the funds that would have been set aside above to replenish the Debt Service Reserve Account. Repayment of the Policy 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 Policy Costs related to such draw ("Monthly Installments"). Each Monthly Installment shall be deposited by the City into the Debt Service Reserve Account, and then payments shall be made from the Debt Service Reserve Account to pay Policy Costs. If and to the extent cash has been deposited to the Debt Service Reserve Account (other than Monthly Installments to pay Policy Costs), all such cash (or permitted investments) shall be used prior to any drawing under the Reserve Policy and repayment of any Policy Costs under the Reserve Policy, and repayment of any Policy Costs shall be made prior to replenishment of any such cash amounts. -3- If, in addition to the Reserve Policy, any other reserve account substitute instrument ("Additional Reserve Policy") is provided, drawings under the Reserve Policy and any such Additional Reserve Policy, and repayment of Policy Costs and reimbursement of amounts due under the Additional Reserve Policy, shall be made on a pro-rata basis (calculated by reference to the maximum amounts available thereunder) after applying all available cash in the Debt Service Reserve Account and prior to replenishment of any such cash draws, respectively." SECTION 2. SUPPLEMENT AND AMENDMENT TO ORDINANCES -RESERVE POLICY. The 1992 Ordinance, as amended by the 1993 Ordinance, more specifically Ordinance No. 8318-92, as amended by Ordinance No. 8419-93, new Section 31; the 1997 Ordinance, more specifically Ordinance No. 8801-97, new Section 32; the 2000 Ordinance, more specifically Ordinance No.9095-00, new Section 33; and the 2001 Ordinance, more specifically Ordinance No. 9247-01, new Section 32 are hereby supplemented and amended by adding the following paragraphs to each new section: "Section . Reserve Policy The Mayor and the Controller, on behalf of the City, are hereby authorized to obtain a Reserve Policy as set forth in the section entitled Sinking Fund contained herein. The Mayor and the Controller, on behalf of the City, are also authorized to enter into an agreement with the Insurer (the Reserve Policy Agreement") and negotiate the terms of the Reserve Policy Agreement, with the advice of the City's financial advisor. The Mayor and the Controller, on behalf of the City, are also authorized to execute any and all other documents required to obtain the Reserve Policy. The City hereby agrees that (a) If the waterworks fails to pay any Policy Costs in accordance with the requirements set forth above, the Insurer 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 Bondholders. (b) This Ordinance shall not be discharged and the Bonds defeased until all Policy Costs owing to the Insurer shall have been paid in full. (c) The Insurer is granted a security interest (subordinance to that of the Bondholders) in all revenues and collateral pledged as security for the Bonds, for the repayment of the Policy Costs. (d) No additional bonds will be issued without the Insurer's prior written consent as long as Policy Costs are past due and still owing to the Insurer. (e) This Ordinance shall not be modified or amended without the prior written consent of the Insurer. -4- The Insurer 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 Insurer. SECTION 3. SUPPLEMENT AND AMENDMENT TO 2001 ORDINANCE. The 2001 Ordinance is hereby supplemented and amended as follows: (a) All references in the 2001 Ordinance to "City of South Bend, Indiana, Waterworks Revenue Bonds of 2001" are hereby changed to "City of South Bend, Indiana, Waterworks Revenue Bonds of 2002". (b) AlI references in the 2001 Ordinance to "2001 Bonds" are hereby changed to "2002 Bonds". (c) Section 2(a) of the 2001 Bond Ordinance is hereby changed to provide that (i) interest shall be payable semiannually on January 1 and July 1 in each year, beginning on January 1, 2003 (instead of July 1, 2002); and (ii) the 2001 Bonds shall mature beginning January 1, 2004 (instead of January 1, 2003) and on January 1 of each year thereafter over a period ending not later than January 1, 2023. (d) The reference in the form of bond (Section 9 of the 2001 Ordinance) to "December 15, 2001" is hereby changed to "December 15, 2002". (e) All references in the 2001 Ordinance to the 2001 Bonds being dated, authenticated and/or delivered in 2001 are hereby changed to reflect that such bonds shall be dated, authenticated and/or delivered in 2002. SECTION 4. TERMS AND PROVISIONS OF ORDINANCES. Except as expressly set forth herein, all of the terms and provisions of each of the Ordinances shall remain in full force and effect. SECTION 5. NO CONFLICT. The Council hereby finds and determines that the adoption of this Ordinance is in compliance with each of the Ordinances, and each of the Ordinances shall remain in full force and effect except as otherwise provided in this Ordinance. None of the provisions of this Ordinance shall be construed to prejudice or adversely affect the rights of the owners of any of the Bonds. SECTION 6. 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 7. 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. -5- SECTION 8. EFFECTIVENESS. This Ordinance shall be in full force and effect from and after its passage and compliance with the procedures required by law. PASSED AND ADOPTED by the Common Council of the City of South Bend, Indiana, this 2~"^day of `r~.a~ , 2002. COMMON COUNCIL OF THE CITY OF SOUTH BEND 0'~- 1 st READING S ~ ~3~ PUBLIC HEARING S-~-OL 3 rd READING 5 - Lg- UZ NOT APPROVED REFERRED PASSED S-i-g -OL ci. S ccs s ubs~-~,3: Qs S u~s~~~ s ~bs~~~~ By: ~~.. Ji Member of the Common Co cil -6- Filed In Clerk's Office P9AY 2 ~ 2002 LORl~iTfA J. DUDA CITY CLERK, 80. BEND, IN. COMMITTEE REPORT TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 35-02 PUBLIC HEARING ON A BILL SUPPLEMENTING AND AMENDING ORDINANCE NO. 8318-92, AS AMENDED BY ORDINANCE NO. 8419-93, CONCERNING THE ACQUISITION AND CONSTRUCTION OF EXTENSIONS, ADDITIONS AND IMPROVEMENTS TO THE WATERWORKS OF THE CITY OF SOUTH BEND AND THE ISSUANCE OF REVENUE BONDS TO PROVIDE THE COST THEREOF; SUPPLEMENTING AND AMENDING ORDINANCE NO. 8801-97, CONCERNING THE CONSTRUCTION OF IMPROVEMENTS TO THE WATERWORKS OF THE CITY OF SOUTH BEND AND THE ISSUANCE OF REVENUE BONDS TO PROVIDE THE COST THEREOF; SUPPLEMENTING AND AMENDING ORDINANCE NO. 9027-99, AS AMENDED AND RESTATED BY ORDINANCE NO. 9095-00, CONCERNING THE CONSTRUCTION OF IMPROVEMENTS TO THE WATERWORKS OF THE CITY OF SOUTH BEND AND THE ISSUANCE OF REVENUE BONDS TO PROVIDE THE COST THEREOF; AND SUPPLEMENTING AND AMENDING ORDINANCE NO. 9247-01, CONCERNING THE CONSTRUCTION OF IMPROVEMENTS TO THE WATERWORKS OF THE CITY OF SOUTH BEND AND THE ISSUANCE OF REVENUE BONDS TO PROVIDE THE COST THEREOF; AND THE COLLECTION, SEGREGATION AND THE DISTRIBUTION OF THE REVENUES OF SAID WATERWORKS, THE SAFEGUARDING OF THE INTERESTS OF THE OWNERS OF SAID BONDS, OTHER MATTERS CONNECTED THEREWITH Respectfully report that they have examined the matter and that in their opinion, this bill is being recommended to the full Council with no recommendation due to a lack of quorum. Note: A substitute was brought in at the informal council meeting with the following change: Page 3, Section 1, 1ST paragraph add the last sentence after the words when due, To the extent that the Bonds are insured, and the insurance policy to be deposited into the Debt Service Reserve Account is not being provided by the insurer of such Bonds, such insurance policy shall be subject the insurer's prior written consent. Karl King Chairman