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HomeMy WebLinkAboutAuthorizing Issuance and Sale of Bonds to refund Outstanding Refunding Revenue Bonds of 1993ORDINANCE No. Passed by the Common Council of the Ciry of South Bend, Indiana September 24, 01 20 Attest: City Clerk Attest: Presented by me to the Mayor of the Ciry of South Bend, Indiana September 25, Z0 01 President of Common Corcncil City Clerk Approved and signed by me September 26, 20 0l %h~ ~>'~~-~~1-~ Mayor 1 s ORDINANCE NO. ~ 21 ~"~, An Ordinance of the Common Council of the City of South Bend, Indiana Authorizing the Issuance and Sale of Bonds for the Purpose of Refunding Outstanding City of South Bend, Indiana Sewage Works Refunding Revenue Bonds of 1993; and Approving and Authorizing Other Actions in Respect Thereto STATEMENT OF PURPOSE AND INTENT The City of South Bend, Indiana (the "City") has established, constructed and financed a sewage works and now owns and operates said sewage works pursuant to IC 36-9-23, as amended, and other applicable laws. The City has previously issued its bonds authorized by Ordinance No. 7951-88, passed by the Common Council of the City (the "Common Council") on December 12, 1988, and designated as "City of South Bend, Indiana Sewage Works Revenue Bonds of 1988" (the "1988 Bonds"). The 1988 Bonds were advance refunded with the proceeds of bonds authorized by Ordinance No. 8359-93, passed by the Common Council on March 8, 1993, and amended by Ordinance No. 8364-93, passed by the Common Council on March 22, 1993 (collectively, the "1993 Ordinance"), and designated as "City of South Bend, Indiana Sewage Works Refunding Revenue Bonds of 1993," issued in the original amount of $10,080,000, dated April 1, 1993 (the "1993 Bonds"), of which $5,642,500 is currently outstanding. The City has also previously issued its bonds authorized by Ordinance No. 8919-98, passed by the Common Council on June 22,1998 (the "1998 Bond Ordinance"), and designated as "City of South Bend, Indiana Sewage Works Revenue Bonds of 1998," dated December 30, 1998 (the "1998 Bonds"), issued in the original amount of $24,095,000, outstanding in an amount equal to the draw- downs to the date of this Ordinance and any additional draw-downs under the Financial Assistance Agreement, dated December 30, 1998, between the City and the State of Indiana. The 1993 Bonds maturing on or after December 1, 2002 are redeemable prior to maturity at the option of the City on or after December 1, 2001. The City has the power and is authorized by I.C. 5-1-6 (the "Act") to refinance the 1993 Bonds by the issuance of refunding bonds. The Common Council deems it advisable to issue the current refunding bonds authorized by this Ordinance, which refunding bonds are designated as the "City of South Bend, Indiana Sewage Works Refunding Revenue Bonds of 2001" in an original amount not to exceed Six Million Dollars Three Hundred Thousand ($6,300,000) (the "2001 Bonds"), for the purpose of providing together ti with certain other funds on hand relating to the 1993 Bonds, for the payment of (i) the principal amount of the 1993 Bonds, (ii) the interest payable on the 1993 Bonds, (iii) the costs of refunding the 1993 Bonds, and (iv) the costs of issuing the 2001 Bonds authorized hereby (the "Refunding"). The Common Council deems it advisable to escrow certain proceeds of the 2001 Bonds ,and investment income thereon, pursuant to the terms of a refunding escrow agreement (the "Escrow Agreement") to be entered into with Wells Fargo Bank Indiana, N.A., as escrow agent (the "Escrow Agent") to provide for the Refunding of the 1993 Bonds on December 1, 2001. The Common Council finds, based upon information provided to the City by its financial advisors and by Banc One Capital Markets, Inc. (the "Underwriter"), that the Refunding will provide a savings to the City. The Common Council now finds that all conditions precedent to the adoption of this Ordinance. authorizing the issuance of the 2001 Bonds and the Refunding have been complied with in accordance with the provisions of the Act. NOW THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA THAT: SECTION 1. Authorization for Bonds. In order to effect a savings, the City shall issue the 2001 Bonds as herein authorized and proceed with the current refunding of the 1993 Bonds which shall be redeemed in full on December 1, 2001. The terms "sewage works," "works," and other like terms where used in this Ordinance shall be construed to mean and include all structures and property of the City's sewage works utility. SECTION 2. General Terms of Bonds. The City shall issue its sewage works refunding revenue bonds in an amount not to exceed Six Million Three Hundred Thousand Dollars ($6,300,000), to be designated "Sewage Works Refunding Revenue Bonds of 2001," for the purpose of procuring funds to apply to the cost of the Refunding. Such 2001 Bonds shall be signed in the name of the City by the manual or facsimile signatures of the Mayor of the City (the "Manor") and the Controller of the City (the "Controller") and attested by the Clerk of the City (the "Clerk"), who shall affix the seal of the City to each of the 2001 Bonds manually or shall have the seal imprinted or impressed thereon by facsimile or other means. Incase any officer whose signature appears on the 2001 Bonds shall cease to be such officer before the delivery of such 2001 Bonds, such signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in office until delivery thereof. The 2001 Bonds shall also be authenticated by the manual signature of the Registrar (as defined below). Any other provisions of this Ordinance to the contrary notwithstanding, the 2001 Bonds shall be issued on a parity with the outstanding 1998 Bonds, and none of the provisions of this Ordinance shall be construed to affect the rights of the holders of the outstanding 1998 Bonds. The Controller is authorized to employ the firm of Crowe, Chizek and Company, LLP, to perform any and all computations necessary to confirm the preliminary evidence and findings demonstrating compliance with the conditions set forth in the 1998 Bond Ordinance for issuance of additional revenue bonds -2- on parity with the outstanding 1998 Bonds. The City shall not issue the 2001 Bonds without first receiving a certificate from Crowe, Chizek and Company in form and substance satisfactory to the Controller and to the affect that the City and the sewage works are incomplete compliance with the conditions set forth in the 1998 Bond Ordinance for the issuance of additional revenue bonds on parity with the outstanding 1998 Bonds. The 2001 Bonds shall be on a parity with the 1998 Bonds, and shall be sold at a price not less than 99% of the par value thereof (exclusive of original issue discount), shall be issued in fully registered form in denominations of Five Thousand Dollars ($5,000) or any integral multiple thereof, shall be numbered consecutively from R-1 up, shall be originally dated as of the first day of the month in which the 2001 Bonds are sold or as otherwise determined by the Controller, and shall bear interest at a rate or rates not exceeding seven percent (7%) per annum (the exact rate or rates to be determined by negotiation) payable on the first (1st) day of June and December in each year, beginning on June 1, 2002. The 2001 Bonds shall mature serially on December 1 in the years and substantially in accord with the schedule set forth on Exhibit A, with such changes thereto as are approved by the Controller. All payments of interest on the 2001 Bonds shall be paid by check or draft mailed one business day prior to the interest payment date to the registered owners thereof as of the fifteenth (15th) day of the month preceding the interest payment date 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 (as defined below) in writing by such registered owner. All principal payments and premium, if any, on the 2001 Bonds shall be made upon surrender thereof at the principal corporate trust office of the Paying Agent 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. Interest on 2001 Bonds shall be payable from the interest payment date to which interest has been paid next preceding the authentication date thereof unless such 2001 Bonds are authenticated after the fifteenth (15th) day of the month preceding an interest payment date and on or before such interest payment date in which case they shall bear interest from such interest payment date, or unless authenticated on or before the fifteenth (15th) day of the month immediately preceding the first interest payment date, in which case they shall bear interest from the original date, until the principal shall be fully paid. The 2001 Bonds and any bonds ranking on a parity therewith, as to principal, premium and interest, shall be payable from and are hereby secured by an irrevocable pledge of and shall constitute a charge upon all the Net Revenues, herein defined as the gross revenues of the sewage works after deduction only for payment of the reasonable expenses of operation, repair and maintenance but not including depreciation and payments in lieu of taxes (the "Net Revenues"), of the sewage works of the City, which bonds constitute a first charge on said Net Revenues. The City shall not be obligated to pay said bonds or the interest or premium, if any, thereon except from the Net Revenues of the works, and said bonds shall not constitute an indebtedness of the City within the meaning of the provisions and limitations of the constitution of the State of Indiana. -3- Any 2001 Bonds issued under this Ordinance may be initially issued in temporary form exchangeable for definitive bonds. The temporary bonds may be printed, lithographed or typewritten, shall be of such denominations as maybe determined by the Controller, shall be in fully registered form and may contain such reference to any of the provisions of this Ordinance as may be appropriate. If temporary bonds are issued, definitive bonds will be executed and furnished without delay and thereupon the temporary bonds shall be surrendered for cancellation at the principal corporate trust office of the Registrar and the Registrar shall deliver in exchange for such temporary bonds an equal aggregate principal amount of definitive bonds of the same interest rates and maturities. Until so exchanged, the temporary bonds shall be entitled to the same benefits under this Ordinance as definitive bonds issued hereunder. Each 2001 Bond shall be transferable or exchangeable only upon the books of the City kept for that purpose by the Registrar, by the registered owner thereof in person, or by his attorney duly authorized in writing, upon surrender of such 2001 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 bond or bonds in the same aggregate principal amount, and of the same maturity, shall be executed and delivered in the name of the transferee or transferees or the registered owner, as the case maybe, in exchange therefor. The costs of such transfer or exchange shall be borne by the City. The City, Registrar and Paying Agent may treat and consider the persons in whose name such 2001 Bonds are registered as the absolute owners thereof for all purposes including for the purpose of receiving payment of, or on account of, the principal thereof and interest and premium, if any, due thereon. In the event any 2001 Bond is mutilated, lost, stolen or destroyed, the City may execute and the Registrar may authenticate a new bond of like date, maturity and denomination as that mutilated, lost, stolen or destroyed, which new bond shall be marked in a manner to distinguish it from the bond for which it was issued, provided that, in the case of any mutilated bond, such mutilated bond shall first be surrendered to the Registrar, and in the case of any lost, stolen or destroyed bond there shall be first furnished to the Registrar evidence of such loss, theft or destruction satisfactory to the City and the Registrar, together with indemnity satisfactory to them. In the event any such bond shall have matured, instead of issuing a duplicate bond, the City and the Registrar may, upon receiving indemnity satisfactory to them, pay the same without surrender thereof. The City and the Registrar may charge the owner of such 2001 Bond with their reasonable fees and expenses in this connection. Any bond issued pursuant to this paragraph shall be deemed an original, substitute contractual obligation of the City, whether or not the lost, stolen or destroyed 2001 Bond shall be found at any time, and shall be entitled to all the benefits of this Ordinance, equally and proportionately with any and all other 2001 Bonds issued hereunder. SECTION 3. Terms of Redemption. The 2001 Bonds are not subject to redemption prior to maturity. SECTION 4. Appointment of Registrar and Pang Agent. Wells Fargo Bank Indiana, N.A. is hereby appointed to serve as registrar and paying agent for the 2001 Bonds ("Re ig strar" or "Paying "). The Registrar is hereby charged with the responsibility of authenticating the 2001 Bonds, and shall keep and maintain books for the registration and transfer of the 2001 Bonds. The Mayor -4- V is hereby authorized to enter into such agreements or understandings with any institution serving as Registrar and Paying Agent as will enable the institution to perform the services required of the Registrar and Paying Agent. The Controller is authorized to pay such fees as the institution may charge for the services it provides as Registrar and Paying Agent, and such fees may be paid as fiscal agency charges from the Sinking Fund described herein to pay the principal of and interest on the 2001 Bonds. The Registrar and Paying Agent may at any time resign as Registrar and Paying Agent by giving thirty (30) days written notice to the City and by first-class mail to each registered owner of the 2001 Bonds then outstanding, and such resignation will take effect at the end of such thirty (30) days or upon the earlier appointment of a successor Registrar and Paying Agent by the City. Such notice to the City maybe served personally or be sent by registered mail. The Registrar and Paying Agent may be removed at any time as Registrar and Paying Agent by the City, in which event the City~may appoint a successor Registrar and Paying Agent. The City shall notify each registered owner of the 2001 Bonds then outstanding by first-class mail of the removal of the Registrar and Paying Agent. Notices to registered owners of the 2001 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 bond register. Any predecessor Registrar and Paying Agent shall deliver all the 2001 Bonds and cash in its possession and the bond register to the successor Registrar and Paying Agent. At all times, the same entity shall serve as Registrar and as Paying Agent. SECTION 5. Form of Bonds. The form and tenor of the 2001 Bonds, shall be substantially as set forth in Exhibit B, with all blanks to be filled in properly prior to delivery thereof. SECTION 6. Sale of Bonds. The Controller is hereby authorized and directed to have the 2001 Bonds prepared, and the Mayor, Controller and the Clerk are hereby authorized and directed to execute the 2001 Bonds in substantially the form and the manner herein provided. The Controller is hereby authorized and directed to deliver the 2001 Bonds to the Treasurer of St. Joseph County, ex officio Treasurer of the City of South Bend, and shall take his receipt therefor, and upon the consummation of the sale of the 2001 Bonds the Controller shall certify to the Treasurer the amount which the purchaser is to pay for the same together with the name and address of the purchaser; thereupon, the Treasurer shall be authorized to receive from the purchaser the amount so certified from the Controller and to deliver the 2001 Bonds to the purchaser and take the purchaser's receipt for the 2001 Bonds. The amount to be certified by the Controller and collected by the Treasurer shall be the full amount which the purchaser has agreed to pay therefor, which shall be not less than 99% of the face value of the 2001 Bonds (exclusive of original issue discount) plus accrued interest to the date of delivery. If the Treasurer is not available, then the Controller shall deliver the 2001 Bonds to the purchaser and deliver the proceeds to the Treasurer. The Mayor is authorized to enter into a bond purchase agreement in customary form with the Underwriter, as bond purchaser, on behalf of the City. The entry by the City into the purchase contract and the execution of the purchase contract on behalf of the City by the Mayor in accordance with this Ordinance are hereby authorized and approved. -5- The 2001 Bonds, when fully paid for and delivered to the purchasers, shall be the binding special revenue obligations of the City, payable out of the Net Revenues of the City's sewage works to be set aside into the Sinking Fund as herein provided. The Mayor and the Controller each are hereby authorized to deem final an official statement with respect to the 2001 Bonds, as of its date, in accordance with the provisions of Rule 15c2-12 of the U.S. Securities and Exchange Commission, as amended (the "SEC Rule"), subject to completion as permitted by the SEC Rule, and the City further authorizes the distribution of the deemed final official statement, and the execution, delivery and distribution of such document as further modified and amended with the approval of the Mayor or the Controller in the form of a final official statement. In order to assist any underwriter of the 2001 Bonds in complying with paragraph (b)(5) of the SEC Rule by undertaking to make available appropriate disclosure about the City and the 2001 Bonds to participants in the municipal securities market, the City hereby covenants, agrees and undertakes, in accordance with the SEC Rule, unless excluded from the applicability of the SEC Rule or otherwise exempted from the provisions of paragraph (b)(5) of the SEC Rule, that it will comply with and carry out all of the provisions of the continuing disclosure contract. "Continuing disclosure contract" shall mean that certain continuing disclosure contract executed by the City and dated the date of issuance of the 2001 Bonds, as originally executed and as it maybe amended from time to time in accordance with the terms thereof. The execution and delivery by the City of the continuing disclosure contract, and the performance by the City of its obligations thereunder by or through any employee or agent of the City, are hereby approved, and the City shall comply with and carry out the terms thereof. The opinion of Barnes & Thornburg, bond counsel, approving the legality of the 2001 Bonds, will be furnished to the purchasers at the expense of the City. SECTION 7. Use of Bond Proceeds. The proceeds derived from the sale of the 2001 Bonds shall be and are hereby set aside for application on the cost of the Refunding. The proceeds of the 2001 Bonds plus moneys on hand in connection with the Prior Bonds and which are available, if any, together with investment earnings thereon, to carry out the refunding of the Prior Bonds shall be deposited in escrow pursuant to the Escrow Agreement. The balance of the proceeds of the 2001 Bonds shall be used to pay costs of issuance of the 2001 Bonds and other incidental expenses. Accrued interest to the date of delivery shall be deposited in the Debt Service Account of the Sinking Fund described below and used to pay interest on the 2001 Bonds on the first interest payment date. SECTION 8. Approval of Escrow Agreement. The Escrow Agreement shall be in customary form, as approved by the Mayor as evidenced by his signature thereon. The moneys deposited pursuant to the Escrow Agreement to carry out the Refunding shall be held as cash or invested in direct obligations of, or obligations the principal and interest on which are unconditionally guaranteed by, the United States of America, and shall be irrevocably set aside and pledged for such purpose. The Mayor is hereby authorized to enter into the Escrow Agreement and the Controller is hereby authorized to pay the charges for the services of the Escrow Agent. The entry by the City into -6- the Escrow Agreement and the execution of the Escrow Agreement on behalf of the City, and the taking of such other action and the execution of such other instruments as are necessary to effect the Refunding, by the Mayor, Controller, Clerk and Treasurer of St. Joseph County in accordance with this Ordinance, are hereby authorized, approved and ratified. The proper officers of the City are hereby directed to draw all proper and necessary warrants, and to do whatever acts and things may be necessary to carry out the provisions of this Ordinance. The Underwriter is hereby authorized to take such actions as it deems appropriate with the approval of the Controller to carry out the Refunding if finally consummated, including the execution of documents necessary to make subscription to acquire appropriate securities to be held under the Escrow Agreement. SECTION 9. Collection of Revenues• Fundin~peration, Repair and Maintenance. All revenues derived from the operation of the sewage works and from the collection of sewage rates and charges shall be deposited in the Sewage Works Revenue Fund (the "Revenue Fund"), as set forth in the 1998 Ordinance and continued hereby, and such revenues shall be segregated and kept separate and apart from all other funds and bank accounts of the City. Out of said revenues the proper and reasonable expenses of operation, repair and maintenance of the sewage works shall be paid, and the costs of replacements, extensions, additions and improvements shall be paid as hereinafter provided. On the last day of each calendar month there shall be credited from the Revenue Fund to the Sewage Works Operations and Maintenance Fund (the "Operations Fund"), as set forth in the 1998 Ordinance and continued hereby, a sufficient amount of the revenues of the sewage works so that the balance in said fund shall be sufficient to pay the expenses of operation, repair and maintenance for the then next succeeding two calendar months. The moneys credited to this fund shall be used for the payment of the reasonable and proper operation, repair and maintenance expenses of the sewage works on a day-to-day basis, but none of such moneys in such fund shall be used for deprecation, replacements, improvements, extensions or additions. Any balance in the Operations Fund in excess of the expected expenses of operation, repair and maintenance for the then next succeeding month may be transferred to the Sinking Fund referred to below if necessary to prevent a default in payment of principal or interest on outstanding bonds. SECTION 10. Sewage Works Sinking. There shall be deposited from the Revenue Fund into the Sewage Works Sinking Fund (the"Sinking Fund"), as set forth in the 1998 Ordinance and continued hereby, for the payment of the interest on and principal of revenue bonds which by their terms are payable from the revenues of the sewage works, and the payment of any fiscal agency charges in connection with the payment of such bonds and interest thereon, a sufficient amount of the Net Revenues of the sewage works for the payment of to meet the requirements of the Bond and Interest Account and the Debt Service Reserve Account, as set forth in the 1998 Ordinance and continued hereby, in said Sinking Fund. Such payments shall continue until the balance in the Bond and Interest Account, plus the balance in the Debt Service Reserve Account, equals the principal of and interest on all the then outstanding bonds and the final maturity thereof. Beginning with the first calendar month following the date of issuance of the 2001 Bonds herein authorized, there shall be credited on the first day of each calendar month to the Bond and Interest Account an amount equal to the sum of one-sixth (1/6th) of the interest on all then outstanding bonds payable during the next succeeding six calendar months and one-twelfth (1/12th) -7- of the of the principal on all then outstanding bonds payable during the next succeeding twelve calendar months; provided that such fractional amounts shall be appropriately increased, if necessary, to provide for the first interest and principal payments. There shall be similarly credited to the account the amount necessary to pay the bank fiscal agency charges, if any, for paying principal and interest on the bonds as the same become payable. The City shall, from the sums deposited in the Sinking Fund and credited to the Bond and Interest Account, remit promptly to the bank fiscal agency sufficient moneys to pay the principal of and interest on the due dates thereof together with the amount of any bank fiscal agency charges. On the first day of each calendar month after making the credits to the Bond and Interest Account, there shall be credited from available Net Revenues to the Debt Service Reserve Account an amount not less than will produce, in equal monthly installments over atwenty-four (24) month period, an amount (the "Reserve Requirement") equal to the least of (i) maximum annual debt service on all bonds payable from the net revenues of the sewage works, (ii) 125% of the average annual principal and interest payable on all bonds payable from the sewage works, or (iii) 10% of the proceeds of all bonds payable from the sewage works, plus a minor portion thereof as defined in the Internal Revenue Code of 1986, as amended (the Code"). The Reserve Requirement is hereby determined to be reasonable. Said credits to the Debt Service Reserve Account shall continue until the balance therein shall equal the Reserve Requirement. The Debt Service Reserve Account shall constitute the margin for safety as a protection against default in the payment of principal of and interest on the bonds, and moneys in the Debt Service Reserve Account shall be used to pay current principal of and interest on the bonds to the extent that moneys in the Bond and Interest Account are insufficient for that purpose, In the event moneys in the Debt Service Reserve Account are transferred to the Bond and Interest Account to pay principal and interest on bonds, then such depletion of the balance in the Debt Service Reserve Account shall be made up from the next available Net Revenues after credits into the Bond and Interest Account hereinbefore provided for. Any moneys in the Debt Service Reserve Account in excess of the Reserve Requirement shall be transferred to the Sewage Works Improvement Fund referred to below. Amounts held on the date of issuance of the 2001 Bonds in the reserve account for the 1993 Bonds shall be credited to the Debt Service Reserve Account and applied toward the Reserve Requirement, and the remaining amounts then in the reserve account for the 1993 Bonds shall be credited to the Debt Service Reserve Account or deposited to the Escrow Account under the Escrow Agreement, as directed by bond counsel. As an alternative to holding the Reserve Requirement in the Debt Service Reserve Account in cash funds, and if permitted by applicable law and under the terms of all obligations and agreements to which the City is or may become subj ect (including, without limitation, the obligations and agreements pertaining to the 1998 Bonds and any other Parity Bonds), the City may purchase one or more Debt Service Reserve Account insurance policy(s) (the "Reserve Policv") provided by a bank, insurance company, financial institution or other entity ("Reserve Polic, I~") with a long term debt rating at least equal to the rating category on the 2001 Bonds by the rating agency or agencies then rating the 2001 Bonds, to provide for payment of principal and interest on the 2001 Bonds in the event that funds in the Bond and Interest Account are insufficient to pay the principal and interest on the 2001 Bonds when due. The Mayor and the Controller are hereby authorized to obtain such a Reserve Policy, and are authorized to enter into an agreement ("Reserve Policv -8- Agreement") with the Reserve Policy Issuer and to negotiate the terms of the Reserve Policy Agreement pursuant to advice of the City's financial advisor. The Mayor and the Controller are authorized to execute the Reserve Policy Agreement and any and all other documents or instruments required to obtain the Reserve Policy. In the event a draw is made against the Reserve Policy, the City shall repay the amount of the draw and related expenses incurred by the Reserve Policy Issuer together with interest thereon at the rate set forth in the Reserve Policy Agreement. 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 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. If and to the extent cash has been deposited to the Debt Service Reserve Account, all such cash (or permitted investments) shall be used prior to any drawing under the Reserve Policy, and the payment of any Policy Costs under the Reserve Policy shall be made prior to replenishment of any such cash amounts. If, in addition to the Reserve Policy, any other Debt Service 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. The City hereby agrees that: (a) If the sewage works fails to pay any Policy Costs in accordance with the requirements set forth above, the Reserve Policy 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 2001 Bonds or (ii) remedies which would adversely affect the holders of the 2001 Bonds; (b) This Ordinance shall not be discharged and the 2001 Bonds defeased until all Policy Costs owing to the Reserve Policy Issuer shall have been paid in full; (c) The Reserve Policy Issuer is granted a security interest (subordinate to that of the holders of the 2001 Bonds and any Parity Bonds) in all revenues and collateral pledged as security for the 2001 Bonds, for the repayment of the Policy Costs; (d) No additional bonds will be issued without the Reserve Policy Issuer's prior written consent as long as Policy Costs are past due and still owing to the Reserve Policy Issuer; (e) This Ordinance shall not be modified or amended without the prior written consent of the Reserve Policy Issuer; and (f) The Reserve Policy Issuer shall be provided with written notice of the resignation or removal of the Registrar and Paying Agent and the appointment of a -9- successor thereto and of the issuance of additional indebtedness of the City's sewage works at the address specified in the Reserve Policy Agreement. SECTION 11. Sewage Works Improvement Fund. On the first day of each calendar month after the 2001 Bonds are issued, after meeting the requirements for operation, repair, and maintenance and the Sinking Fund, all available net revenues shall be credited to the Sewage Works Improvement Fund as set forth in the 1998 Ordinance and continued hereby. Said fund shall be used for improvements, replacements, additions and extensions of the sewage works. Moneys in the Sewage Works 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. SECTION 12. Investments. The moneys in any of such funds or accounts shall be invested in accordance with the laws of the State of Indiana relating to the depositing, holding, securing or investing of public funds, and in accordance with the arbitrage certificate delivered at the time of delivery of any bonds payable from such funds and accounts. All revenues derived from the operation of the sewage works and from the collection of sewage rates and charges and from the investment of moneys in the funds herein created shall be segregated and kept separate and apart from all other funds and accounts of the City. No moneys derived from the revenues of the sewage works (including investment income) shall be transferred to the general fund of the City or be used for any purpose not connected with the sewage works if such transfer or use would interfere with the flow of funds set forth herein. Investment income from such funds and accounts shall, except as otherwise provided herein, be treated as revenues of the sewage works, and shall be used as provided in this Ordinance. SECTION 13. Books and Records. The City shall keep proper books of records and accounts, separate from all of its other records and accounts, in which complete and correct entries shall be made showing all revenues collected from said works and deposited in said funds, all disbursements made therefrom on account of the operation of the works and to meet the requirements of the Sinking Fund, and all other transactions relating to said works, including the cash balances in each of the funds and accounts described herein as of the close of the preceding fiscal year. Upon written request, there shall be prepared and furnished to the original purchasers of the 2001 Bonds and to any subsequent owner of the bonds at the time then outstanding, not more than four (4) months after the close of each fiscal year, operating income and expense and balance sheet statements of the works, covering the preceding fiscal year, which annual statements shall be certified by the Controller, or the person charged with the duty of auditing the books and records relating to the works, or such statements may be prepared by an independent certified public accountant retained by the City for the purpose of preparing such statements. Copies of all such statements and reports shall be kept on file in the office of the Controller. Any owner or owners of the 2001 Bonds then outstanding shall have the right at all reasonable times to inspect the works and all records, accounts and data of the City relating thereto. Such inspections may be made by representatives duly authorized by written instrument. -10- SECTION 14. Rate Covenant. The City shall, to the fullest extent permitted by law, establish, maintain and collect just and equitable rates and charges for the use of and the services rendered by said sewage works, to be paid by the owner of each and every lot, parcel of real estate or building that is connected with and uses said sewage works by or through any part of the sewage system of the City, or that in any way uses or is served by such works. Such rates or charges shall be sufficient in each year for the payment of the proper and reasonable expenses of operation, repair and maintenance of the works, for depreciation and improvement, and for the payment of the sums required to be paid into the Sinking Fund. Such rates or charges shall, if necessary, be changed and readjusted from time to time so that the revenues therefrom shall always be sufficient to meet the expenses of operation, repair and maintenance, depreciation and improvement, and the requirements of the Sinking Fund. In no event shall the annual gross revenues of the sewage works after payment of the expenses of operation, repair and maintenance (but not including depreciation and payments in lieu of taxes) be less than one hundred and twenty-five percent (125%) of the annual interest and principal requirements of the 2001 Bonds and any additional Bonds issued pursuant to Section 16 hereof. SECTION 15. Defeasance. If, when the 2001 Bonds or any portion thereof shall have become due and payable in accordance with their terms, and the whole amount of the principal, premium, if any, and the interest so due and payable upon such 2001 Bonds or any portion thereof then outstanding shall be paid, or (i) cash, or (ii) direct non-callable obligations of (including obligations issued or held in book entry form on the books of) the Department of the Treasury of the United States of America, and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, and to the extent permitted by Indiana law, Refcorp interest strips, CATS, TIGRS, STRPS, or defeased municipal bonds rated AAA by Standard & Poor's Corporation or Aaa by Moody's Investors Service or AAA by Fitch Investors Service, Inc. (or any combination thereof), the principal of and the interest on which when due without reinvestment will provide sufficient money, or (iii) any combination of the foregoing, shall beheld irrevocably in trust for such purpose, and provision shall also be made for paying all fees and expenses for the redemption, then and in that case the 2001 Bonds or any designated portion thereof issued hereunder shall no longer be deemed outstanding or entitled to the pledge of the Net Revenues of the City's sewage works. SECTION 16. Additional Bonds. The City reserves the right to authorize and issue additional bonds, payable out of the revenue of its sewage works, ranking on a parity with the 2001 Bonds for the purpose of financing the cost of future additions, extensions and improvements to the sewage works or to provide for a complete or partial refunding of the 2001 Bonds or other bonds payable out of the revenues of the sewage works, subject to the following conditions: (a) The interest on and principal of all bonds payable from the revenues of the sewage works shall have been paid to date in accordance with the terms thereof, provided, this condition shall be deemed satisfied if any required amount is to be provided from the proceeds of the parity bonds or other funds of the City. (b) All required deposits to the Sinking Fund shall have been made in accordance with the provisions of the Ordinance. -11- (c) The net operating revenues of the sewage works in the fiscal year immediately preceding the issuance of any such bonds ranking on a parity with the 2001 Bonds shall be not less than one hundred twenty-five percent (125%) of the maximum annual interest and principal requirements of the then outstanding bonds and the additional parity bonds proposed to be issued; or, prior to the issuance of said parity bonds, the sewage rates and charges shall be increased or the service area or customer base shall be expanded sufficiently so that said increased rates and charges and/or volume applied to the previous fiscal year's operations would have produced net revenues for said year equal to not less than one hundred twenty-five percent (125%) of the maximum annual interest and principal requirements of the then outstanding bonds and the additional parity bonds proposed to be issued. For purposes of this subsection, the records of the sewage works shall be analyzed and all showings shall be prepared by a certified public accountant or independent financial advisor employed by the City for that purpose. (d) The principal of the additional parity bonds shall be payable annually on December 1 and the interest shall be payable semiannually on June 1 and December 1 during the periods in which principal and interest are payable. SECTION 17. Additional Covenants of the City. For the purpose of further safeguarding the interests of the holders of the 2001 Bonds, it is specifically provided as follows: (a) The City shall at all times maintain its sewage works in good condition and operate the same in an efficient manner and at a reasonable cost. (b) So long as any of the 2001 Bonds are outstanding, the City shall maintain insurance on the insurable parts of said works of a kind and in an amount such as would normally be carried by private companies 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. In addition to or in lieu of the foregoing, the City may provide for coverage on all or part of the works comparable to that described above through aself-insurance program. Insurance proceeds shall be used in replacing or repairing the property destroyed or damaged; or if not used for that purpose shall be treated and applied as Net Revenues of the works. (c) So long as any of the 2001 Bonds are outstanding, the City shall not mortgage, pledge or otherwise encumber such works, or any part thereof, nor shall it sell, lease or otherwise dispose of any portion thereof except replaced equipment which may become worn out or obsolete or other property not required for proper operation and maintenance of the works. (d) Except as provided in Section 16 hereof, so long as any of the 2001 Bonds are outstanding, no additional bonds or other obligations pledging any portion of the revenues of the sewage works shall be authorized, executed, or issued by the -12- City except such as shall be made subordinate and junior in all respects to the 2001 Bonds, unless all of the 2001 Bonds are redeemed, retired, or defeased coincidentally with the delivery of such additional bonds or other obligations. (e) The City shall take all action or proceedings necessary and proper to require connection of all property where liquid and solid waste, sewage, night soil, or industrial waste is produced with available sanitary sewers. The City shall, insofar as possible, cause all such sanitary sewers to be connected with the sewage works. (f) This Ordinance shall not be repealed or amended in any respect which will adversely affect the rights of the owners of any 2001 Bonds, nor shall the Common Council adopt any law, ordinance or resolution which in any way adversely affects the rights of such owners so long as any of said bonds or the interest thereon remain unpaid. (g) The provisions of this Ordinance shall be construed to create a trust in the proceeds of the sale of the 2001 Bonds for the uses and purposes herein set forth. The provisions of this Ordinance shall also be construed to create a trust in the portion of the Net Revenues herein directed to be set apart and paid into the Sinking Fund and for the uses and purposes of said Fund as set forth in this Ordinance. The owners of the 2001 Bonds shall have all of the rights, remedies and privileges set forth under the Act in the event of default in the payment of the principal of or interest on any of the 2001 Bonds or in the event of default with respect to any of the provisions of this Ordinance or the Act. SECTION 18. Tax Covenants. In order to preserve the exclusion of interest on the 2001 Bonds from gross income for federal income tax purposes and as an inducement to purchasers of the 2001 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 2001 Bonds or property financed by the 2001 Bond proceeds other than as a member of the general public. No person or entity other than the City or another state or local governmental unit will own property financed by 2001 Bond proceeds or will have actual or beneficial use of such property pursuant to a lease, a management or incentive payment contract, an arrangement such as take-or-pay or output contract, or any other type of arrangement that differentiates that person's or entity's use of such property from the use by the public at large. (b) No 2001 Bond proceeds will be loaned to any entity or person other than a state or local governmental unit. No 2001 Bond proceeds will be transferred, directly or indirectly, or deemed transferred to anon-governmental person in any manner that would in substance constitute a loan of the 2001 Bond proceeds. (c) The City will not take any action or fail to take any action with respect to the 2001 Bonds that would result in the loss of the exclusion from gross income for -13- federal income tax purposes of interest on the 2001 Bonds pursuant to Section 103 of the Internal Revenue Code of 1986, as in effect on the date of the issuance of the 2001 Bonds (the "Code"), including, without limitation, the taking of such action as is necessary to rebate or cause to be rebated arbitrage profits on 2001 Bond proceeds or other monies treated as 2001 Bond proceeds to the federal government as provided in Section 148 of the Code, and will set aside such monies, which may be paid from investment income on funds and accounts, in trust for such purposes. (d) The City will file an information report Form 8038-G with the Internal Revenue Service as required by Section 149 of the Code. (e) The City will not make any investment or do any other act or thing during the period that any 2001 Bond is outstanding hereunder which would cause any 2001 Bond to be an "arbitrage bond" within the meaning of Section 148 of the Code and the regulations applicable thereto as in effect on the date of delivery of the 2001 Bonds. The City will not take any action or fail to take any action with respect to the 2001 Bonds that would result in the loss of the exclusion from gross income for federal income tax purposes of interest on the 2001 Bonds pursuant to Section 103 (a) of the Code, and the City will not act in any mariner which would adversely affect such exclusion. Notwithstanding any other provisions of this Ordinance, the foregoing covenants and authorizations (the "Tax Covenants") which are designed to preserve the exclusion of interest on the 2001 Bonds from gross income under federal income tax law (the "Tax Exemption") need not be complied with if the City receives an opinion of nationally recognized bond counsel that any Tax Covenant is unnecessary to preserve the Tax Exemption. SECTION 19. Amendments. Subject to the terms and provisions contained in this section, and not otherwise, the owners of not less than sixty-six and two-thirds per cent (66-2/3%) in aggregate principal amount of the 2001 Bonds then outstanding shall have the right, from time to time, anything contained in this Ordinance to the contrary notwithstanding, toconsent to and approve the adoption by the City of such ordinance or ordinances supplemental hereto as shall be deemed necessary or desirable by the City for the purpose of modifying, altering, amending, adding to or rescinding in any particular any of the terms or provisions contained in this Ordinance, or in any supplemental ordinance; provided, however, that 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 2001 Bond or an advancement of the earliest redemption date on any 2001 Bond; or (b) A reduction in the principal amount of any 2001 Bond or the redemption premium or the rate of interest thereon, or a change in the monetary medium in which such amounts are payable; or -14- (c) The creation of a lien upon or a pledge of the revenues of the sewage works ranking prior to the pledge thereof created by this Ordinance; or (d) A preference or priority of any 2001 Bond or Bonds over any other 2001 Bond or Bonds; or (e) A reduction in the aggregate principal amount of the 2001 Bonds required for consent to such supplemental ordinance. 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 books held by the Registrar. 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 2001 Bonds. The Registrar shall not, however, be subject to any liability to any owners of the 2001 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 2001 Bonds of not less than sixty-six and two-thirds per cent (66-2/3%) in aggregate principal amount of the 2001 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 2001 Bonds, whether or not such owners shall have consented thereto. No owner of any 200.1 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 City or its officers 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 2001 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 2001 Bonds, and the terms and provisions of the 2001 Bonds and this Ordinance, or any supplemental ordinance, may be modified or altered in any respect with the consent of the City and the consent of the owners of all the 2001 Bonds then outstanding. Without notice to or consent of the owners of the 2001 Bonds, the City may, from time to time and at any time, adopt such ordinances supplemental hereto as shall not be inconsistent with the terms and provisions hereof (which supplemental ordinances shall thereafter form a part hereof), -15- 1 (a) to cure any ambiguity or formal defect or omission in this Ordinance or in any supplemental ordinance; or (b) to grant to or confer upon the owners of the 2001 Bonds any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the owners of the 2001 Bonds; or (c) to procure a rating on the 2001 Bonds from a nationally recognized securities rating agency designated in such supplemental ordinance, if such supplemental ordinance will not adversely affect the owners of the 2001 Bonds; or (d) to make any other change which is not to the prejudice of the owners of the 2001 Bonds; or (e) to provide for the refunding or advance refunding of the 2001 Bonds. SECTION 20. Defaults. In the event available moneys hereunder, subject to the restrictions on use of money held under this Ordinance as set forth herein, are insufficient to pay debt service on all bonds payable from the revenues of the sewage works when due, available moneys shall be applied, after payment of all costs and expenses associated therewith, to the 2001 Bonds and any additional bonds issued in accord with Section 16 hereof (together, "Parity Bonds") as follows: First - To the payment to the persons entitled thereto of all installments of interest then due, including interest on any past due principal at the rate borne by such bond, in the order of the maturity of the installments of such interest and, if the amount available shall not be sufficient to pay in full any particular installment, then to such payment ratably, according to the amounts due on such installments, to the persons entitled thereto, without any discrimination or privilege; and Second - To the payment to the persons entitled thereto of the unpaid principal of and premium on any of such bonds which shall have become due either at maturity or pursuant to a call for redemption (other than bonds called for redemption for the payment of which other moneys are held), in the order of their due dates, and, if the amount available shall not be sufficient to pay in the amounts due on any particular date, then to such payment ratably, according to the amount due on such date, to the persons entitled thereto without any discrimination or privilege. During the continuance of any default in the payment of either principal of or interest or premium on any 2001 Bond or other Parity Bond, no payment shall be made with respect to any subordinate and junior bonds issued in accord with Section 17(d) hereof ("Junior Bonds"). Moneys available for payment to holders of Junior Bonds shall, in the event of an insufficient amount being available to pay all debt service with respect to the Junior Bonds when due, be applied to the Junior Bonds in accordance with the sequence and other terms set forth above with respect to payments regarding Parity Bonds unless otherwise provided in the ordinance authorizing the Junior Bonds. -16- SECTION 21. Approval of Official Statement. The distribution of the preliminary official statement with respect to the 2001 Bonds, substantially in the form presented to this meeting, with such changes and modifications as maybe authorized by the Mayor, as evidenced by his signature thereon, is hereby authorized, approved and ratified, and this Council hereby deems final said official statement, as of its date, in accordance with the provisions of Rule 15c2-12 of the Securities and Exchange Commission, subject to completion as permitted by said Rule, and the Common Council further authorizes the distribution of the deemed final official statement, and the execution, delivery and distribution of such document as further modified and amended in the form of a final official statement. SECTION 22. No Conflict. Except as described in Section 27 below, all ordinances and parts of ordinances in conflict herewith are hereby repealed. SECTION 23. 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 24. Bond Insurance. In connection with the sale of the 2001 Bonds, the Mayor, the Controller and the Clerk are each authorized to execute and deliver such agreements and instruments as they deem advisable to secure bond insurance for the 2001 Bonds, and the execution and delivery of such agreements and instruments are hereby approved. The premium, if any, for such bond insurance shall be payable from the proceeds of the 2001 Bonds. SECTION 25. Authorization for Book-Entr~ystem. The 2001 Bonds may, incompliance with all applicable laws, initially be issued and held in book-entry form on the books of the central depository system, The Depository Trust Company, its successors, or any successor central depository system appointed by the City from time to time (the "Clearing Agency"),without physical distribution of bonds to the purchasers. The following provisions of this Section apply in such event. One definitive 2001 Bond of each maturity shall be delivered to the Clearing Agency (or its agent) and held in its custody. The City and Registrar may, in connection herewith, do or perform or cause to be done or performed any acts or things not adverse to the rights of the holders of the 2001 Bonds as are necessary or appropriate to accomplish or recognize such book-entry form 2001 Bonds. During any time that the 2001 Bonds are held inbook-entry form on the books of a Clearing Agency, (1) any such 2001 Bond maybe registered upon Registration Record in the name of such Clearing Agency, or any nominee thereof, including Cede & Co.; (2) the Clearing Agency in whose name such 2001 Bond is so registered shall be, and the City and the Registrar and Paying Agent may deem and treat such Clearing Agency as, the absolute owner and holder of such 2001 Bond for all purposes of this Ordinance, including, without limitation, the receiving of payment of the principal of and interest and premium, if any, on such 2001 Bond, the receiving of notice and the giving of consent; (3) neither the City nor the Registrar or Paying Agent shall have any responsibility or obligation hereunder to any direct or indirect participant, within the meaning of Section 17A of the Securities Exchange Act of 1934, as amended, of such Clearing Agency, or any person on behalf of which, or otherwise in respect of which, any such participant holds any interest in any 2001 Bond, -17- including, without limitation, any responsibility or obligation hereunder to maintain accurate records of any interest in any 2001 Bond or any responsibility or obligation hereunder with respect to the receiving of payment of principal of or interest or premium, if any, on any 2001 Bond, the receiving of notice or the giving of consent; and (4) the Clearing Agency is not required to present any 2001 Bond called for partial redemption, if any, prior to receiving payment so long as the Registrar and Paying Agent and the Clearing Agency have agreed to the method for noting such partial redemption. If either the City receives notice from the Clearing Agency which is currently the registered owner of the 2001 Bonds to the effect that such Clearing Agency is unable or unwilling to discharge its responsibility as a Clearing Agency for the 2001 Bonds, or the City elects to discontinue its use of such Clearing Agency as a Clearing Agency for the 2001 Bonds, then the City and the Registrar and Paying Agent each shall do or perform or cause to be done or performed all acts or things, not adverse to the rights of the holders of the 2001 Bonds, as are necessary or appropriate to discontinue use of such Clearing Agency as a Clearing Agency for the 2001 Bonds and to transfer the ownership of each of the 2001 Bonds to such person or persons, including any other Clearing Agency, as the holder of the 2001 Bonds may direct in accordance with this Ordinance. Any expenses of such discontinuance and transfer, including expenses of printing new certificates to evidence the 2001 Bonds, shall be paid by the City. During any time that the 2001 Bonds are held inbook-entry form on the books of a Clearing Agency, the Registrar shall be entitled to request and rely upon a certificate or other written representation from the Clearing Agency or any participant or indirect participant with respect to the identity of any beneficial owner of the 2001 Bonds as of a record date selected by the Registrar. For purposes of determining whether the consent, advice, direction or demand of a registered owner of a 2001 Bond has been obtained, the Registrar shall be entitled to treat the beneficial owners of the 2001 Bonds as the bondholders and any consent, request, direction, approval, objection or other instrument of such beneficial owner maybe obtained in the fashion described in this Ordinance. During any time that the 2001 Bonds are held inbook-entry form on the books of a Clearing Agency, the Executive, the Fiscal Officer and/or the Registrar are authorized to execute and deliver a Letter of Representations agreement with the Clearing Agency, or a Blanket Issuer Letter of Representations, and the provisions of any such Letter of Representations or any successor agreement shall control on the matters set forth therein. The Registrar, by accepting the duties of Registrar under this Ordinance, agrees that it will (i) undertake the duties of agent required thereby and that those duties to be undertaken by either the agent or the issuer shall be the responsibility of the Registrar, and (ii) comply with all requirements of the Clearing Agency, including without limitation same day funds settlement payment procedures. Further, during any time that the 2001 Bonds are held in book-entry form, the provisions of Section 8 of this Ordinance shall control over conflicting provisions in any other section of this Ordinance. SECTION 26. Holida,}~s, Etc. 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 city 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 -18- 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 27. Effectiveness. This Ordinance shall be in full force and effect from and after its passage, provided, the provisions of the ordinances pursuant to which the 1993 Bonds were issued shall remain in effect and shall supersede the provisions of this Ordinance in the event of any conflict with this Ordinance until such time as the 1993 Bonds are all defeased on paid in full. PASSED AND ADOPTED by the Common Council of the City of South Bend, Indiana, this 2`1 day of S;; ~ , 2001. COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA 1 st R'EADING a "~~'"o~ PUBLIC HEARING ~-Z~ ~~ rd READING Ct, - L`~1-0~ £JOT APPROVED REFERRED PASSED a_Zy-~~ Member of the Common Cou cil -19- LJf~r°t~'tiiJ~. Liu;'" ~r G~CL~t13, BCD. D'~'i~3, 949.. EXHIBIT A Maturity Schedule Interest Year Amount Rate Price C3y. ~ ~,fY C T,dj ks~ha ~n`~L 3:,f ~~._r u:~~..4 Lo~~~ ~~•~~~: ci~~; EXHIBIT B (Form of Bond) UNITED STATES OF AMERICA STATE OF INDIANA COUNTY OF ST. JOSEPH CITY OF SOUTH BEND SEWAGE WORKS REFUNDING REVENUE BOND OF 2001 Interest Maturity Original Authentication Rate Date Date Date CUSIP Registered Owner: Principal Sum: The City of South Bend, in St. Joseph County, State of Indiana, for value received, hereby promises to pay to the Registered Owner set forth above, solely out of the special fund hereinafter referred to, the Principal Sum set forth above on the Maturity Date set forth above (unless this bond is subject to and is called for redemption prior to maturity as hereinafter provided), and to pay interest thereon until the Principal Sum shall be fully paid at the Interest Rate per annum specified above from the interest payment date to which interest has been paid next preceding the Authentication Date of this bond unless this bond is authenticated after the fifteenth day of the month preceding an interest payment date and on or before such interest payment date in which case interest shall be paid from such interest payment date, or unless this bond is authenticated on or before May 15, 2002 in which case it shall bear interest from the Original Date, which interest is payable semi-annually on the first day of June and December of each year, beginning on June 1, 2002. The principal of this bond is payable at the office of Wells Fargo Bank Indiana, N.A., (the "Registrar" or "Paying Agent"), in South Bend, Indiana. All payments of interest on this bond shall be paid by check or draft mailed one business day prior to the interest payment date to the registered owner hereof as of the fifteenth day of the month preceding the interest payment date at the address as it appears on the registration books kept by the Registrar or at such other address as is provided to the Paying Agent in writing by the registered owner. All payments ofprincipal ofthis bond shall be made upon surrender thereof at the principal corporate trust office of the Paying Agent 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. CITY OF SOUTH BEND, INDIANA Mayor By Controller This bond shall not constitute an indebtedness of the City of South Bend within the meaning of the provisions and limitations of the constitution of the State of Indiana, and the City shall not be obligated to pay this bond or the interest thereon except from the special fund provided from the Net Revenues of the City's sewage works utility. The terms and provisions of this bond are continued on the reverse side hereof and such terms and provisions shall for all purposes have the same effect as though fully set forth at this place. It is hereby certified and recited that all acts, conditions and things required to be done precedent to and in the preparation and complete 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 signatures of the Mayor and Controller, its corporate seal to be hereunto affixed, imprinted or impressed by any means and attested manually or by facsimile by its City Clerk. (SEAL OF CITY) By ATTEST: City Clerk (Form of Registrar's Certificate of Authentication) It is hereby certified that this bond is one of the bonds described in the within-mentioned Ordinance duly authenticated by the Registrar. Exhibit B -Page 2 ~ ~r~,~ ~ ° .t: -...,...~..tdo.- .,. a ~~~ ~ :~ ?O~i ~ jt~ ^~ a. .1*~bt: WELLS FARGO BANK INDIANA, N.A. as Registrar Authorized Representative (To be printed on Reverse Side) By This bond is one of an authorized issue of bonds of the City of South Bend, of like original date, tenor and effect, except as to denomination, numbering, interest rates, redemption terms and dates of maturity, in the total amount of Dollars ($ ), numbered from R-1 up, issued for the purpose of providing funds to be applied to the cost of refunding certain maturities of the City's Sewage Works Revenue Bonds of 1993 (the "1993 Bonds") and to pay incidental expenses, as authorized by Ordinance No. adopted by the Common Council of the City of South Bend on the day of , 2001, entitled "AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA AUTHORIZING THE ISSUANCE AND SALE OF BONDS FOR THE PURPOSE OF REFUNDING OUTSTANDING CITY OF SOUTH BEND, INDIANA SEWAGE WORKS REFUNDING REVENUE BONDS OF 1993; AND APPROVING AND AUTHORIZING OTHER ACTIONS IN RESPECT THERETO" (the "Ordinance"), and in strict compliance with the provisions of I.C. 5-1-6 and I.C. 36-9-23 and other applicable laws, as amended (collectively, the "Act"). Pursuant to the provisions of the Act and said Ordinance, the principal of and interest on (i) this bond and all other bonds of this issue, and (ii) all bonds issued by the City pursuant to Ordinance 8919-98, designated "Sewage Works Revenue Bonds of 1998" (the "1998 Bonds"), which 1998 Bonds are on a parity with this bond and all other bonds of this issue, and (iii) all bonds hereafter issued on a parity with this bond and all other bonds of this issue, are payable solely from the Sewage Works Sinking Fund to be provided from the Net Revenues (defined as the gross revenues of the sewage works of the City after deduction only for the payment of the reasonable expenses of operation, repair and maintenance but not including depreciation and payments in lieu of taxes). This bond and the issue of which it is a part, together with the 1998 Bonds and any parity bonds hereafter issued constitute a first charge against said Net Revenues. The City of South Bend irrevocably pledges the entire Net Revenues of said sewage works to the prompt payment of the principal of and interest on the bonds authorized by the Ordinance, of which this is one, and any bonds ranking on a parity therewith (including the 1998 Bonds), to the extent necessary for that purpose, and covenants that it will cause to be fixed, maintained and collected such rates and Exhibit B -Page 3 charges for service rendered by said works as are sufficient in each year for the payment of the proper and reasonable expenses of operation, repair and maintenance of said works, to provide for proper depreciation and for the payment of the sums required to be paid into said Sewage Works Sinking Fund under the provisions of the Ordinance. In the event 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 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 City of South Bend further covenants that it will set aside and pay into its Sewage Works Sinking Fund a sufficient amount of the Net Revenues of said works to (a) pay the principal and interest payments on all bonds payable from the Net Revenues of the sewage works, as such principal and interest shall fall due, and (b) pay the necessary fiscal agency charges for paying all bonds and interest as required by the Ordinance. Such required payments shall constitute a first charge upon all the Net Revenues of said works. The bonds of this issue are not subject to redemption prior to maturity. This bond is subject to defeasance prior to payment as provided in the Ordinance and the owner of this bond, by the acceptance hereof, hereby agrees to all the terms and provisions contained in the Ordinance. This bond is transferable or exchangeable only upon the books of the City kept for that purpose at the office of the Registrar by the Registered Owner in person, or by his attorney duly authorized in writing, upon surrender of this bond together with a written instrument of transfer or exchange satisfactory to the Registrar duly executed by the Registered Owner or his attorney duly authorized in writing, and thereupon a new fully registered bond or bonds in the same aggregate principal amount, and of the same maturity, shall be executed and delivered in the name of the transferee or transferees or the Registered Owner, as the case maybe, in exchange therefor. The City, any registrar and any 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. The bonds maturing in any one year are issuable only in fully registered form in the denomination of $5,000 or any integral multiple thereof not exceeding the aggregate principal amount of the bonds maturing in such year. A Continuing Disclosure Contract from the City to each registered owner or holder of any bond, dated as of the date of initial issuance of the bonds of this issue (the "Contract"), has been executed by the City, a copy of which is available from the City and the terms of which are incorporated herein by this reference. The Contract contains certain promises of the City to each registered owner or holder of this bond Exhibit B -Page 4 ,' and all other bonds of this issue, including a promise to provide certain continuing disclosure. By its payment for and acceptance of this bond, the registered owner or holder of this bond assents to the Contract and to the exchange of such payment and acceptance for such promises. [STATEMENT OF INSURANCE] (Form of Assignment) FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto (Please Print or Typewrite Name and Address) $ principal amount (must be a multiple of $5,000) of the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within bond on the books kept for the registration thereof with full power of substitution in the premises. NOTICE: The signature to this assignment must correspond with the name as it appears on the face of the within bond in every particular, without alteration or enlargement or any change whatsoever. Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by an eligible guarantor institution participating in a Securities Transfer Association recognized signature guarantee program. ~ - ~ ~: ° ~ ~~a~, SBDS02 ABF 230250v7 ~ e: `^ ''` `§.~yr m ~ ~~'~" s<r:w r Exhibit B -Page 5 ~ f; ~ ~ ~ ? ~ ~ i r .f ~ $. ~r~' Y ;` COMMITTEE REPORT TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 92-01 A BILL OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA AUTHORIZING THE ISSUANCE AND SALE OF BONDS FOR THE PURPOSE OF REFUNDING OUTSTANDING CITY OF SOUTH BEND, INDIANA SEWAGE WORKS REFUNDING REVENUE BONDS OF 1993; AND APPROVING AND AUTHORIZING OTHER ACTIONS IN RESPECT THERETO Respectfully report that they have examined the matter and that in their opinion, this bill is being recommended to the full Council with a favorable recommendation. Andrew Udjak Chairman 1316 COUNTY-CITY BUILDING 227 W. JEFFERSON BOULEVARD SOUTH BENDS IND[ANA 46601-1830 PHONE 219/235-9251 Fax 219/235-9171 TDD 219/235-5567 CITY OF SOUTH BEND STEPHEN ,J. LUECKE~ MAYOR DEPARTMENT OF PUBLIC WORKS GARY A. GILOT~ P.E. DIRECTOR OF PUBLIC WORKS September 5, 2001 Ms. Charlotte Pfeifer President, Common Council of the City of South Bend 400 County City Building South Bend, Indiana 46601 Re: Ordinance Authorizing the Issuance of City of South Bend, Indiana Sewage Works Refunding Revenue Bonds of 2001, in an Aggregate Principal Amount Not to Exceed $6,300,000 Dear Ms. Pfeifer: Enclosed is a copy of a proposed Ordinance relating to the issuance of Sewage Works Refunding Revenue Bonds of the City in an aggregate principal amount not to exceed $6,300,000 (the "2001 Bonds"). As is noted more specifically in the Statement of Purpose and Intent at the beginning of the proposed Ordinance, the purpose of the issuance of the 2001 Bonds is to provide for the current refunding of the City of South Bend, Indiana Sewage Works Refunding Revenue Bonds of 1993 (the "1993 Bonds"). The City has been informed by Crowe Chizek & Company, LLP, its financial advisor, and by Banc One Capital Markets, Inc., the underwriter for the 2001 Bonds, that the proposed current refunding of the 1993 Bonds will provide a savings to the City in the approximate amount of $200,000. The proposed 2001 Bonds will be payable solely from the sewage works revenues collected by the City from users of the City's sewage works. The current rates are sufficient to pay the debt service on the proposed 2001 Bonds - no rate increase is required. ENGINEERING ENVIRONMENTAL SERVICES CENTRAL SERVICES CARL LITTRELL, P.E. JOHN J. DILLON~ PH.D. MATT CHLEBOWSKI 219/235-9251 219/277-851 S 219/235-9316 Fax 219/235-9171 Fax 219/277-8980 Fax 219/235-9007 STREETS SAM HENSLEY 219/235-9244 FAx 219/235-9272 WATER WORKS JOHN F. STANCATI 219/235-9322 FAx 219/235-9728 Ms. Charlotte Pfeifer September 5, 2001 Page 2 The enclosed proposed Ordinance is submitted with the request that it be heard on first reading at the Common Council meeting to be held on Monday, September 10, 2001, with the final reading and adoption on Monday, September 24, 2001. I will be the person who will be giving the presentation at the public hearing pertaining to the proposed Ordinance. Should you have any questions, please do not hesitate to call. Sincerely, U W`~ Jo n J. to ,Ph.D. rector, ision of Environmental Services Enclosure cc: Aladean M. DeRose, Chief Assistant City Attorney Alan B. Feldbaum, Barnes & Thornburg, Bond Counsel SBDS02 ABF 231114v1 o-~,~„--..^..-~ ~~~~ ~ w 2.UQi f -~" ~ . u f e ,__.. -"