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HomeMy WebLinkAboutConcerning Construction and the Installation of Extensions, Additions and Improvements to the WaterworksORDINANCE No. 4801 -65 Passed by the Common Council of the City of South Bend, Presented by me to the Mayor of the City of South Bend, September 28, Zg 65 Clerk of Common Council Clerk DEAL PRESS ORDINANCE NO. 4801 -65 An Ordinance concerning construction and the installation of extensions, additions and improvements to the waterworks owned and operated by the City of South Bend, Indiana; authorizing the issuance of revenue bonds to provide for the cost thereof, and matters connected therewith. WHEREAS, the City of South Bend is 'the comer of and operates an unencumbered waterworks furnishing the public mater supply to said City and its inhabitants; and WHEREAS, the Board of Public Works and Safety, having the management of said waterworks, has determined, and the Common Council now finds, that said waterworks is in need of certain construction and the installation of extensions, additions and improvements in order to adequately serve the inhabitants of the City and in order to protect properly the health, well -being and property of 'the City and its inhabitants; and WHEREAS, the Board of Public Works and Safety has employed Clyde E. Williams S Associates, Inc., Professional Engineers, of South Bend, Indiana to determine construction, installation of extensions, additions and improvements required, and the cost thereof, and has found from bids received and from the advice of said engineers -that 'the cost -thereof will be in the amount of One Million Eight Hundred Ninety -five Thousand Dollars ($1,595,000.00), including all incidental expenses necessary to be incurred in connection therewith and in connection with the issuance of bonds on account thereof, and has represented -to the Council, and the Council now finds, that, subject to the approval of the Public Service Commission of Indiana, funds for said projects may be provided by the issuance and sale of revenue bonds payable solely out of the revenues of said waterworks and not constituting a general obligation of the City; and WHEREAS, the Council finds that the City noow has outstanding certain Waterwor]<s Revenue Bonds of 1960, payable from the revenues of the waterworks, in the amount of One Million Two Hundred Seventy Thousand Dollars ($1,270,000.00) authorized by Ordinance No. 4321 -60 adopted May 23, 1960, as amended by Ordinance No. 4346 -60 adopted November 2, 1960, constituting a first charge upon a fixed -I- proportion of the gross revenues of the waterworks, issued under date of December 1, 1960, bearing interest at the rate of three per cent (3%) and two and three - fourths per cent (2 3 1LE %) per annum, and maturing annually on September 1 over a period ending on September 1, 1972; that under 'the terms and conditions of said bonds the City has -the right 'to issue additional water- works revenue bonds either ranking on a parity with said bonds or junior and subordinate thereto without adversely affecting 'the rights of the holders of the outstanding waterworks revenue bonds, that it is not deemed feasible to undertake to comply with the financial conditions necessary to enable the issuance of additional parity bonds and, accordingly, such additional bonds should be made junior and subordinate -to said waterworks revenue bonds heretofore issued and now outstanding; now therefore, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA: Section 1. That the City of South Bend (hereinafter sometimes referred -to as the "City ") , being the owner of and engaged in operating an unencumbered waterworks system supplying the City and its inhabitants with water for public and domestic use, now provides for certain needed construction and installation of extensions, additions and improvements to such waterworks and the payment for the same from the revenues and receipts of said waterworks pursuant -to and in the manner prescribed in Chanter 155 of the Acts of 1929 and the acts amenda- Cory thereof and supplemental thereto (sometimes hereinafter referred to as the "Ac't- "); provided, however, that the additional revenue bonds authorized by this ordinance shall be junior and subordinate in all -respects -to the bonds designated as "Uaterworks Revenue Bonds of 1960" outstanding in the amount of One Million Two Hundred Seventy Thousand Dollars ($1,270,000.00) and none of the provisions of this ordinance shall. be so construed as 'to affect the rights of -the holders of said outstanding revenue bonds. The terms "waterwworks ", "water system ", and "systera" wherever used in this ordinance shall be construed to mean and to include the existing waterworks owned by the City and all extensions, additions and improvements thereto and replacements thereof now or subsequently constructed or acquired. Section 2. Said construction, consisting of the construction of -two water filtration plants, additional wells and additional transmission mains, - -2- including miscellaneous equipment and appurtenances, shall. be constructed in accordance with the plans and specifications prepared by Clyde E. Williams & Associates, Inc., Professional Engineers, of South Bend, Indiana, which plans and specifications are made a part hereof by reference and are hereby approved. The Board of Public Worhs and Safety is hereby authorized to proceed with the construction, installations, extensions, additions and improvements and to enter into all contracts necessary for such purposes in conformity with the provisions of this ordinance and of said Act-, subject, however, -to the approval of the Public Service Commission of Indiana for Lhe making of the same and the issuance of the required a„iount of revenue bonds; also, that the principal and interest of the bonds issued on account of the same shall be paid solely and exclusively from the revenues of said waterworks system and shall not constitute a general obligation of the City. The Board of Public Works and Safety is hereby authorized to file or cause to be filed a groper petition with the Public Service Commission of Indiana for the purpose of securing the required approval of said Commission. Section 3. Beginning as of the date of issuance of the bonds herein authorized, the income and revenues of the existing waterworks, together with the income of all construction, installations, extensions, additions and improve - menus made pursuant to this ordinance., or subsequently, shall be set aside into a separate and special fund to be used and applied in the maintenance and operation thereof, in establishing a depreciation account, and payment of the principal of and interest on all bonds which by their terms are payable from the revenues of the waterworks. The proportion of the gross revenues of said water- works that shall be paid into the several accounts of said special fund, hereto- fore established by Ordinance No. 432L -60 adopted on May 23, 1960, as amended, as provided by said Act, is hereby fixed and determined as follows: (a) Operation and Maintenance Account. Sixty -five per cent (65 %) of the gross revenues of said waterworks shall be set aside into the Operation and Maintenance Account and shall be used to pay the necessary cost of the reasonable and proper operation and maintenance of the waterworks, including any taxes required to be paid. The sum so set aside for operation and maintenance -3- shall be applied exclusively to that purpose until a surplus shall be accumulated in the Operation and Maintenance Account which shall be equal to the cost of maintaining and operating the waterworks during the remainder of the calendar, operating or fiscal year -then current and the cost of maintaining and operating the waterworks during the calendar, operating or fiscal year then next ensuing. Any excess over such surplus may be transferred to either the Depreciation Account or the Bond and Interest Redemption Account. (b) Depreciation Account Thirteen per cent (13 %) of the gross revenues of said waterworks shall be set aside into the Depreciation Account and shall be expended in making good depreciation in 'the waterworks, or in new construction, extensions or additions to the property of the waterworks. Any accumulations in said Depreciation Account not required for immediate use may be invested in direct obligations of the United States Government, in the manner and to the extent permitted by law, and if so invested the income from such investment shall accrue to -the Depreciation Account. Said account shall not be used for any purpose other than as herein provided. (c) Bond and Interest Redemption Account. Twenty two per cent (220%) of the gross revenues of the waterworks shall, as such revenues are received, be set apart and paid into a special account to be identified as the Bond and Interest Redemption Account. The funds in said account shall be used solely for the purpose of paying the principal and interest of bonds which by their terms are payable from the revenues of the waterworks and in the following order: (1) Paying the interest on and principal of the Ulater- works Revenue Bonds of 1960, issued pursuant to Ordinance No. 4321 -60, as amended, in accordance with the terms thereof; (2) Paying the interest on and principal of 1:he bonds issued pursuant to the provision of this ordinance in accordance with the terms hereof, and any bonds hereafter issued ranking on a parity therewith; and (3) Paying the interest on and principal of any other bonds payable from the revenues of the waterworks; to the extent necessary for that purpose. If and when a surplus shall be created in said Bond and Interest Redemption Account which shall be in excess of the interest on and principal of all the bonds, plus ten per cent (10%), which are payable during the remainder of the then current- calendar, operating or fiscal - LE_ year, together with the amount of interest on and principal of all -the bonds which will become due and payable during the calendar, operating or fiscal year then next ensuing, then any excess over such surplus may be transferred either to the Operation and Maintenance Account or to the Depreciation Account- Any such excess over such surplus may also be used in the purchase of outstanding bonds, or redemption of any bonds redeemable prior to maturity, at a price not exceeding the then applicable redemption price. No further payments need be made into the Bond and Interest Redemption Account when the funds therein equal or exceed the amount of the principal of all the bonds then outstanding and interest thereon to the maturity dates thereof. All of -the funds of said several accounts shall be deposited in lawful depositories of -the City and shall be continuously held and secured or invested as provided by the laws relating to 'the depositing, securing, and holding or investing of public funds, including particularly Chapter 9 of the Acts of 1945, as amended In no event shall any of the revenues of said waterworks be transferred or used for any purpose not authorized by this ordinance so long as any of the bonds issued pursuant to the provisions of this ordinance shall be outstanding. Section 4. For the purpose of procuring Funds with which to pay the cost of construction, installation of extensions, additions and irmrovements to its waterworks, the City shall issue its revenue bonds under and pursuant to the provisions of this ordinance and said Act, which bonds shall be payable only out of the special Bond and Interest Redemption Account herein provided for, subject to the prior servicing of the outstanding "h?aterworks Revenue Bonds of 1960" hereinbefore referred to, in accordance with the terms thereof. The bonds authorized by this ordinance shall be designated as "Waterworks Revenue Bonds of 1966 ". Said bonds shall be in a principal amount not exceeding One Million Eight Hundred FlineLy -five Thousand Dollars ($1,395,000 00), in the denomination of One Thousand Dollars ($1,000.00) each, or Five Thousand Dollars ($5,000.00) each, the denomination to be at the option of the purchaser, numbered consecutively from 1 up, dated as of the first day of the month in which said bonds are sold, and shall bear interest at a rate or rates not exceeding five per -5 -- cent (S %) per annum, the exact rate or rates to be determined by bidding, which interest shall be payable semi - annually on March 1 and September 1 in each year, beginning on September 1, 1966 and shall be evidenced by coupons attached to said bonds. Both bonds and interest coupons shall be payable at the First Bank and Trust Company of South Bend, South Bend, Indiana or at the option of the holder at The First National Bank of Chicago, Chicago, Illinois, in lawful money of the United States of America and said bonds shall mature serially in the amounts and on the dates as follows: $210,000 September 1, 1973 215,000 September 1, 1974 225,000 September 1, 1975 235,000 September 1, 1976 24.5 ,000 September 1, 1977 250,000 September 1, 1975 255,000 September 1, 1979 260,000 September 1, 1950 The bonds of this issue shall be redeemable at the option of the City, in whole or in parr, on March 1, 1971, or any interest payment date thereafter, in their inverse order of maturity and by lot within a maturity, at face value, together with the following premiums: 390 if redeemed on March 1, 1971, or thereafter on or before September 1, 1974; 2% if redeemed on March 1, 1975, or thereafter on or before September l., 1977; 1% if redeemed on March 1, 19 75, or thereaf'rer prior 'to maturity; plus in each case accrued interest to the date fixed for redemption. Notice of such redemption shall be published at least thirty (30) days prior to the date fixed for redemption at least one time in a newspaper of general circulation printed and published in the City of South Bend, Indiana, and a newspaper or financial journal of general circulation published in the City of Indianapolis, Indiana, and a financial journal of general circulation published in the City of New York, New York_ If any of -the bonds so to be redeemed are registered, such notice shall also be mailed to the address of the -registered holder as shown on the registration records of the City. The notice shall specify the date and place of redemption and the numbers of the bonds called for redemption. The place of redemption may be the place of payment named in the bonds, or otherwise as determined by the City. Interest on the bonds so called for redemption shall -6- cease on the redemption date fixed in said notice, if funds are available at the T of redemption to pay the rincipal of and premium and interest on -the bonds so called for redemption, on the date fixed in said notice and thereafter when presented for payment. Coincidentally with the payment of the redemption price, the bonds so called for redemption shall be surrendered for cancellation, 'together with -the unmatured interest coupons appurtenant 'thereto. Section S. Said bonds shall be signed in -the name of the City by the Mayor, countersigned by the City Controller, and attested by the City Clerk, who shall affix -the seal of the City -to each of said bonds. The interest coupons attached to said bonds shall be executed by placing thereon the facsimile signatures of tiie Mayor and City Controller, and said officials, by the signing of said bonds, shall adopt as and for their proper signatures 'the facsimile signatures appearing on said coupons. In case any officer whose signature appears on -the bonds or coupons shall cease to be such officer before the delivery of such bonds., his signature shall nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office until such delivery. Said bonds shall be negotiable by delivery unless registered Upon presentation of the bonds at the office of the City Controller in the City of South Bend, said Controller shall register said bonds as to the principal thereof, without charge or expense to the holder. Such registry shall be noted on -the bonds, after which no transfer thereof will be valid unless made by d-ie registered ocmer in person or by his attorney duly authorized, and similarly noted on the bonds, but said bonds may be discharged from registry by being in like manner transferred to bearer, after which they shall be transferable by delivery, but may be again registered as before. The registration of any bond shall not affect the negotiability of the interest coupons attached thereto, but such coupons shall continue to pass by delivery merely and shall remain payable to bearer. Section u. The form and tenor of said bonds and 'the interest coupons to be attached thereto, together with the form of registry endorsement thereon, shall be substantially as follows, all blanks -to be filled in properly prior to delivery thereof: -7- No UNITED STATES OF AMERICA State of Indiana County of St. Joseph CITY OF SOUTH BEND WATERWORKS REVENUE BOND OF 1966 The City of South Bend, in St. Joseph County, State of Indiana, for value received, hereby promises to pay to bearer, or if this bond be registered then to the registered holder hereof, solely out of the special revenue fund hereinafter referred to, -the principal amount of THOUSAND DOLLARS on the first day of September 19_, (unless this bond be called for prior redemption and payment provided therefor) and to pay interest 'thereon from the date hereof until the principal is paid, at the rate of per cent (_%) per annum, payable semi - annually on the first days of March and September in each year, beginning on September 1, 1966, upon presentation and surrender of the annexed coupons as they severally become due. Both principal and interest of this bond are payable in lawful money of the United States of America at the First Bank and Trust Company of South Bend, South Bend, Indiana, or at the option of the holder at The First National Bank of Chicago, Chicago, Illinois. This bond is one of an authorized issue of ( ) bonds of the City of South Bend, of like date, denomination, tenor and effect, except as to rates of interest and dates of maturity, in the total amount of One Million Eight Hundred Ninety -five Thousand Dollars ($1,895,000) numbered consecutively from 1 to inclusive, issued for the purpose of providing funds to pay the cost of construction and the installation of extensions, additions and improvements to the municipally owned waterworks of said City pursuant to an ordinance passed by the Common Council of said City on the day of September, 1965, entitled "An Ordinance concerning construction ant the installation of extensions, additions and improvements to the waterworks owned and operated by the City of South Bend, Indiana; authorizing the issuance of revenue bonds to provide for the cost thereof, and matters connected therewith ", and in strict compliance with the provisions of the governing statutes, particularly Chapter 155 of the Acts of the General Assembly of the State of Indiana for the year 1929, and all acts amendatory thereof or supplemental thereto. The principal and interest of -this bond and all other bonds of said issue, and any bonds ranking on a parity therewith, are equally and ratably secured by and constitute a charge upon twenty -two per cent (22 %) of the gross income and revenues of said waterworks as the same now exist or may hereafter be improved and extended, which percentage of such income and revenues is to be deposited in a special fund to be known as the "Bond and Interest Redemption Account" heretofore duly created; all subject, however, to the prior payment in accordance with the -terms thereof of -the interest on and principal of certain now outstanding waterworks revenue bonds, issued under date of December 1, 1960 now outstanding in -the principal amount of One Million Two Hundred Seventy Thousand Dollars ($1,270,000.00) bearing interest at the rates of three per cent (3%) and two and three - fourths per cent (2 314%) per annum and maturing annually on September 1 over a period ending on September 1, 1972 authorized by Ordinance No. 11321 -60 adopted May 23, 1960, as amended by Ordinance No. 4346 -60 adopted November 2, 1960. The City shall not be obligated to pay said bonds or the interest thereon except from said special fund, and neither this bond nor the issue of which it is a part shall in any respect constitute a corporate indebted- ness of the City within the provisions and limitations of the constitution of -the State of Indiana. -8- The bonds of -this issue are redeemable at the option of the City, in whole or in part, on March 1, 1971 or any interest payment date thereafter, in inverse order of maturity and by lot within a maturity, at face value, together with the following premiums: three per cent (3%) if redeemed on March 1, 1971, or thereafter on or before September 1, 1974; two per cent (2%) if redeemed on March 1, 1975, or thereafter on or before September 1, 1977; one per cent (ln if redeemed on March 1, 1973, or -thereafter prior to maturity; plus in each case accrued interest to the date fixed for redemption; provided notice of said redemption shall be given at least 'thirty (30) days prior to the redemption date by one publication in a newspaper of general circulation printed and published in the City of South Bend, Indiana and in a newspaper or financial journal published in the City of Indianapolis, Indiana, and in a financial journal of general circulation published in -the City of New York, New York, and a like notice be sent by mail to -the holders of such bonds as are then registered. Interest on the bonds so called for redemption shall cease on the redemption date fixed in said notice, if funds are available at the place of redemption to redeem the bonds when presented. The bonds so redeemed prior to maturity shall be surrendered for cancellation, together with unmatured interest coupons appurtenant thereto. The City covenants that it will, to the fullest extent permitted by law, fix, maintain and collect an aggregate of rates and charges for the services rendered by said waterworks which will be sufficient to pay all costs of operation and maintenance of said waterworks, to provide a proper and adequate depreciation account, and to create and maintain the sinking fund required for -the payment of all revenue bonds which by their terms are payable from the revenues of said waterworks, and that it will, in all other respects, faithfully comply with all of the provisions of -the governing statutes pursuant to which this bond is issued. In the event the City shall make any default in the payment of the principal of or interest on this bond, the holder hereof shall have all of -the rights and remedies provided by the governing statutes, including the right to compel the collection of sufficient rates and charges to provide for the payment of -this bond and the interest hereon. This bond and all other bonds of said issue shall, in the hands of bona fide holders, have all of the qualities of negotiable instruments under the laws of -the State of Indiana. This bond may be registered at the office of the City Controller as to principal only, in the name of the owner, in the manner and with the effect provided in said ordinance, but unless registered shall pass by delivery. The interest coupons attached hereto shall at all times pass by delivery. If any bond or interest coupon shall not be presented for payment or redemption on the date fixed -therefor, the City may deposit in trust with the First Bank and Trust Company of South Bend, South Bend, Indiana, an amount sufficient to pay such bond or interest coupon, as -the case may be, and -there- after the holder shall look only to the funds so deposited in trust with said bank for payment and neither 'the City nor its waterworks shall have any further obligation or liability in respect thereto. It is hereby certified and recited that all acts, conditions and 'things required to be done precedent to and in the execution, issuance and delivery of this bond have been done and performed in regular and due form as provided by law. IN WITNESS WHEREOF, the City of South Bend, in St. Joseph County, State of Indiana, has caused this bond to be signed in its corporate name by its duly elected, qualified and acting Mayor, countersigned by its City Controller, its corporate seal to be hereunto affixed and attested by its duly elected, qualified and acting City Clerk, and the interest coupons hereto M attached to be executed by placing thereon the facsimile signatures of said Mayor and City Controller, all as of the first day of , 1966. CITY OF SOUTH BEND By — Mayor ATTEST: Countersigned: City Clerk City Control (INTEREST COUPON) Coupon No. On , 19_, (unless 'the bond to which this coupon refers is sooner redeemed) the City of South Bend, Indiana, will pay to the bearer at the First Bank and Trust Company of South Bend, South Bend, Irrliana, or at the option of the holder at The First National Bank of Chicago, in the City of Chicago, Illinois, out of its waterworks Bond and Interest Redemption Account, Dollars in lawful money of the United States of America, being 'the interest then due on its Waterworks Revenue Bond of 1966, dated 1, 1966. No. City Controller CITY OF SOUTH BEND By Mayor (Facsimile) REGISTRATION ENDORSEMENT (Facsimile) This bond can be registered only at 'the office of -the City Controller in the City of South Bend, Indiana. No writing hereon except by the City Controller. Date of Registry In Whose Name Registered -10- City Controller Section 7. The City Controller is hereby authorized and directed to have said bonds and coupons prepared, and the Mayor, City Controller and City Clerk are hereby authorized and directed to execute said bonds and the coupons to be attached thereto in the form and manner hereinbefore provided. The City Controller shall sell said bonds at public sale. Prior to the sale of the bonds the Controller shall cause to be published a notice of sale once each week for two weeks in The Tri- County Nevis and the South Bend Tribune, and one time in a newspaper or financial journal published in the City of Indianapolis, and is authorized to publish said notice or a summary thereof in a financial journal published in the City of New York, New York in the event he shall deem it advisable. The date fixed for the sale shall not be earlier than seven (7) days after the last of said publications. The bond sale notice shall state the time and place of sale, the total amount of bonds, the maximum rate of interest thereon, the maturities thereof, the purpose for which the bonds are being issued, 'the terms and conditions on which bids -will be received and the sale made, and shall set out such other information as the Controller, acting on the advice of counsel, shall deem necessary. All bids for said bonds shall be sealed and shall be presented to the Controller at his office. Bidders shall be required to name the rate or rates of interest which the bonds are to bear, not exceeding five per cent (54o) per annwn. Sudz interest rate or rates shall be in multiples of one - eighth (1 /8th) of one per cent (1%), and not more than three different interest rates shall be named by each bidder. Bids specifying more than one interest rate shall also specify the amount and maturities of the bonds bearing each rate, but all bonds maturing on 'the same date shall bear the same single coupon rate. The Controller shall award the bonds to the highest qualified bidder. The highest- bidder shall be the one who offers -the lowest net interest cost to the City, to be determined by computing 'the total interest on all of 'the bonds to their maturities and deducting therefrom the premium bid, if any. No bid for less than 'the par value of said bonds, including accrued interest -to the date of delivery, shall be considered. The Controller shall have the right to reject any and all bids, and in the event no satisfactory bids are received, the -11- Controller shall be authorized to continue the sale from day to day for a period of 'thirty (30) days without readvertisemen't; provided, however, that if said sale be continued no bid shall be accepted which is lower than the highest bid received at the 'Lime fixed for such sale in the bond sale notice. The Controller shall. be authorized to obtain a legal opinion as to -the validity of the bonds from Ice Miller Donadio &< Ryan, Indianapolis, Indiana, acting as bond counsel for the City, and to furnish such opinion to the purchasers of the bonds. The fee of such bond counsel shall be considered as a part of the cost of the project on account of which said bonds are issued and shall be paid out of -the proceeds of said bonds or out of revenues of -the waterworks. Section B. In -the event it shall be hereafter determined that it is not necessary to issue all of the bonds authorized by this ordinance, or the Public Service Commission shall not approve the issuance of said -total amount of bonds, the Controller shall be authorized -to sell and deliver a lesser amount of bonds than herein authorized, in which case the bonds not sold or delivered shall be of -the last maturity or maturities. In such event the amount of the bonds authorized by this ordinance shall be deemed -to be limited accordingly. The bonds herein authorized, when fully paid for and delivered to the purchaser, shall be the binding and special revenue obligations of the City payable out of the income and revenues of the waterworks system of said City according to their tenor and effect, and the proceeds derived from the sale of said bonds shall be and are hereby set aside for the purpose of paying the cost of construction and installation of the aforesaid construction and the installation of extensions, additions and improvements to said waterworks and the expenses necessarily incurred in connection therewith, including the expense incurred in connection with the issuance and sale of the bonds. The proper officers of the City are hereby directed -to draw all proper and necessary warrants, and to do all acts and -things which may be necessary to carry out the provisions of this ordinance. -12- Section 9. The City reserves the right to authorize and issue additional bonds, payable out of the revenues of the waLorworls, ranking on a parity with the bonds authorized by this ordinance, for the purpose of financing -the cost- of future construction, additions, extensions and improvements to the waterworks, subject to -the fol- lowing conditions: (a) The interest on and principal of all bonds payable from the revenues of the waterworks shall have been paid to date in accordance with the terms thereof, and all required payments into -tine Bond and Interest Redemption Account have been made in accordance with the provisions of this ordinance. (b) (1) The amount of gross revenues of the waterworks allocated by Sec. 3(c) of this ordinance to and deposited in the Bond and Interest Redemption Account in the calendar year immediately preceding the issuance of any such additional parity bonds shall be not less than Ono Hundred T.renty -five per cent (125 %) of -the maximum annual interest and principal requirements of the then outstanding bonds and the additional parity bonds proposed to be issued; or (2) prior to -the issuance of said parity bonds, the proportion of the gross revenues allocated to said Bond and Interest Redemption Account shall be increased sufficiently so -that said increased propertion applied to the previous calendar year's gross revenues would have produced revenues in said Bond and Interest Redemption Account for said year equal to not less than One Hundred Twenty -five per cent (125'/0') of -tile mnimuim annual interest and principal requirements of the then outstanding bonds and the additional parity bonds proposed to be issued; or (3) prior to the issuance of said parity bonds, the water rates and charges shall be increased sufficiently and the proportion of gross revenues allocated to said Bond and Interest Redemption Account- increased sufficiently so that said increased water rates and charges applied to the previous calendar year's operations would have produced gross revenues in an amount so that the proportion allocated. -to said Bond and Interest RederapLion Account for said year would have equaled not less -than One Hundred T<oenty -five per cent (125%) of the maximum annual interest and principal requirements of the then outstanding bonds and-die additional parity bonds proposed to be issued. -13- For purposes of this subsection, the records of the waterworks shall be analyzed and all showings shall be prepared by a certified public accountant employed by the City for that purpose, which accountant sliall certify That he has no pecuniary interest in the waterworks or improvements, thereto other than in the malting of said analysis and -the preparation of said showings. (c) The principal of the additional parity bonds sliall be payable annually on September 1 and the interest semi - annually on March 1 and September 1 in 'the years in which principal and interest are payable. (d) To -the extent required by law, the issuance of the proposed additional parity bone's and any necessary increase in water rates and charges shall have been approved by -the Public Service Commission of Indiana, and said Comrission shall have certifi.ed. -that the income and revenues of the waterworks, after providing for operation and maintenance and depreciation, will be sufficient to pay the principal and interest of all bonds payable from the revenues of the waterworks, including -the additional parity bonds proposed to be issued. Section 10. The accrued interest and nre;'aiui, ii any, received at the time of the delivery of the bonds sha11 be denosited in the Bond and Interest Redemption Accour.L hereinbcfore referred to. The remaining proceeds from the sale of the bonds shall be deposited in a ban;: or bans which are legally designated and qualified dopositories for the funds of -the City, in a special account or accounts to be as "Cii'+ of South Bcnd, Waterworks Construction Account ". Each of such special accounts shall lie del Osi Led, secured, held or invested as provided by the laws relating to the depositing, securing, holding or investing of public funds, -including particularly Chapter 9 of the Acts of 1945, as amended. The funds in such special account or accounts shall be expended only for the purpose of Haying the cost of the construction and -the ins'tal.lation of extensions, additions and improvements to said :yater- worncs as herein authorized, the incidental expense incurred in connec'Lion there- with and with the issuance of bonds, and for the payment of interest accruing on the bonds during the period of cons- truction, if required for LhaL purpose. Any balance or balances remaining unexpended in such special account or accounts -].4- after the completion of the work, which are not required to meet unpaid obligations incurred in connection with the construction of the work, shall be deposited in the Bond and Interest Redemption Account. Section 11. 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 water- works and deposited in the special accounts hereinbefore established and all disbursements made therefrom and all transactions relating to said waterworks. There shall be prepared and furnished -to the original purchaser of the bonds, and upon written request, to any holder of the bonds not more than ninety (40) days after the close of each annual fiscal period, operating and income statements and balance sheets of the sviaterworks, in reasonable detail, covering such annual fiscal period, which statements shall be certified by the City Controller or the Auditor of the waterworks. Copies of all such statements and reports shall at all times be kept on file in the office of the City Controller. Any holder of the bonds, or his duly authorized representative, shall have the right- at all reasonable 'times -to inspect the waterworks and records., accounts and data of the City relating thereto. Section 12. The City shall, to the fullest extent permitted by law, establish, maintain and collet" reasonable and just rates and charges for the services and facilities afforded by said waterworks ; ;hich will provide revenues at least sufficient to pav the reasonable and proper cost of the maintenance and operation of the waterworks, to provide a proper and reasonable depreciation account, and to pay the principal of and interest on all bonds which by their -terms are payable from the revenues of the waterworks, as the same become due, and provide, each year, a surplus or margin of not less -than ten per cent (10%) of the principal and interest due in such year. So long as any of the bonds herein authorized are outstanding, none of 'the facilities and services afforded by said waterworks shall be -Furnished without a reasonable and just charge being made therefor. The reasonable value of any facility or service rendered to the City, or to any department, agency or instrumentality thereof, including the use of water for hydrants for fire protection or for any other ,)urpose, shall be charged against the City and shall be paid for as the charges accrue, and the 15- revenue so received shall be deemed to be revenue derived from the operation of the waterworks and shall- be used and. accounted for in the same manner as other revenues derived from the operation of the waterworks. The City covenants to the fullest extent permitted by law, and subject to the approval of Lhe Public Service Commission, that it will cause to be maintained at least TWO Thousand Seven Hundred Seventy -five (2,775) fire hydrants and will pay to its waterworks department an annual rental of not less -than Forty- -four Dollars ($44.00) per hydrant:, which the Council now finds is a reasonable and proper charge therefor. Upon completion of the construction of the work, said minimum number of hydrants shall be maintained, and said rental will be paid by the City to its waterworks department so long as any of the bonds herein authorized are outstanding. Section 13. For the purpose of further safeguarding the interests of the holders of the bonds, it is specifically provided as follows: (a) All construction contracts shall be let to responsible contractors who shall be required to furnish construction bonds running to the City of South Bend, in an amount equal to One Hundred per cent (100%) of the amount of such contracts, to insure the completion of such contracts in accordance with their terms, and such contractors shall be required to carry such employer's liability and public liability insurance as are -required under the laws of the State of Indiana in the case of public contracts. (b) The extensions and additions shall be contracted for and constructed to the approval of Clyde E. Williams & Associates, Inc., Consulting Engineers of South Bend, Indiana, now employed by the City, or suchh other consulting engineers as may hereafter be employed by the City. All estimates for work done and material furnished shall first be checked by the consulting engineers before being approved by the City. (c) The City shall, at all times, maintain said waterworks in good condition and operate the same in an efficient manner and at a reasonable cost. (d) So long as any of the bonds herein authorized are outstanding, the City shall maintain insurance on the insurable parts of the waterworks of a hind and in an amount such as is usually carried by private companies engaged in a similar type of business. All insurance shall be placed with responsible insurance companies qualified to do business in 'the State of Indiana., and any insurance proceeds collected shall. be used in replacing the property destroyed i -15 or damaged, or if not needed for that purpose, shall be deposited in the Depreciation Accoiuit. (e) So long as any of the bonds herein authorized are outstanding, the City shall not mortgage, pledge or otherwise encumber its waterworks or any part thereof, and shall not sell, lease or otherwise dispose of any portion -thereof except such equipment which may become worn out or obsolete, and shall be replaced, and except such real estate which shall no longer be necessary for use:, nor shall. the City execute or issue any additional bonds or other obligations pledging any portion of the revenues of said waterworks, except as specifically provided in Sec. 9 of -this ordinance, unless the same be made subordinate and junior in all respects to the bonds herein authorized, or unless all of the bonds herein authorized are retired and cancelled coincidentally with the delivery of such additional bonds or other obligations. (f) The provisions of this ordinance shall be construed to create a trust in the proceeds derived from the sale of the bonds herein authorized, for the uses and purposes herein set forth, and so long as any of said bonds are outstanding, the provisions of this ordinance shall also, be construed to create a 'trust in the fixes proportion of the revenues of the waterworks herein directed -to be set aoart and raid into the Bond and Interest Redemption Account for the uses and purposes of said account as in this ordinance set: north. (g) The provisions of this ordinance shall. constitute a contract by and between -the Citv and the holders of the bonds herein authorized, all of the terms of which shall be enforceable in law or in equity, and after the issuance of the bonds this ordinance shall not be reneal.ed or amended in any respect which will adversely affect the rights and interests of -the holders of said bonds, nor shall the Common Council of the City adopt any law, ordinance or resolution in any way adversely affecting the rights of such holders so, long as any of -the bonds or the interest -thereon remain unpaid. The holders of the bonds shall have all of the rights, remedies and privileges, either expressly set forth in the provisions of Chanter 155 of the Acts of the Indiana General Assembly for the year 1929, and all acts a;aendatory thereof and supplemental thereto, or implied therein, including the right to compel the collection of sufficient -17- rates and charges to provide for the paymeni of the bonds issued hereunder and the interest thereon. (h) None of the provisions of this ordinance shall be construed as requiring the expenditure of any funds of the City derived from any sources other than the proceeds of said bonds and the revenues derived from the operation of said waterworks system. Section 14. A11 ordinances and parts of ordinances in conflict herewith are hereby repealed; provided., however, that none of the provisions of this ordinance shall be so construed as to repeal or modify the provisions of Ordinance No. 4321 -60, as amended, so as to adversely affect the rights, interests or priorities of the holders of the outstanding Waterworks Revenue Bonds of 1960 issued pursuant 'to said ordinance. Section 15. Th -is ordinance shall be in full force and effect from and after its passage. IN R 2nd REA9ME 9/1'1 / 1, S WAWTTEE Of THE MM PUBLIC HEARRI6 3rd READMO y — G S NOT APPROVED REFERRED PASSED / — )1- .11.4 .}¢6 'S- 711 is- a(, / of the i1 t SEMI 19 AV t FK LED OITY OF SOUTH IM KATHRYN, L KewK Kim Passed and adopted by the Cormnon Council. of -the City of South Bend, on the'7 y o£*T� / , 1-96S. John L. Hunter, Jr , Pre idenc Kash n L. Blough, C- y Cicrl: Presented by me to Lie Mayor of the City of South Bend, on the x8 day of d 1965, at the hour of <:30 O •M. Kat •yn L. Blough, C' Clerl: This ordinance approved and sibnied by Inc on -the day of dew , 1965, at -the hour of 10 =3,0 *..1.1.