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HomeMy WebLinkAboutAcquisition and Construction of Extensions and Additions Waterworks authorizing Revenue Bonds to Provide Cost thereofORDINANCE No. 4321 - - -60 Passed by the Common Council of the City of South Bend, Indiana Presented by me to the Mayor of the City of South Bend, 24 Clerk of Common Council Clerk Approved and signed by me May 24, 195.60 06007 MAY 6 '60 PM F I L E D CITY OF SOUTH BEND FREDR G. NOBLE, CLERK ORDINANCE NO. 3aJ_�IS An Ordinance concerning the acquisition and construction of extensions and additions 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 owner of and operates an unencumbered waterworks furnishing the public water 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 Council now finds that said waterworks is in need of certain extensions and additions, and that said extensions and additions are re- quired 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 & Associates, Inc., Consulting Engin- eers of South Bend, Indiana, and Callix E. Miller, Architect - Engineer of South Bend, Indiana, to determine the extensions and additions required and the cost thereof, and has found from bids received on a major portion of the project and from the advice of said engineers that said cost will be in the approximate amount of One Million Nine Hundred Forty Thousand Dollars ($1,940,000.00), including all incidental expenses necessary to be incurred in connection therewith, and has represented to the Council and the Council now finds that, subject to the approval of the Public Service Commission, funds for said project 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 City of South Bend now has outstanding certain revenue bonds payable from the revenues of the water- works designated "Waterworks Revenue Bonds of 1949," issued under date of March 1, 1949, and maturing Fifty Thousand Dollars ($50,000.00) on September 1, 1960, and Ten Thousand Dollars ($10,000.00) on March 1, 1961, and the Council now finds that said bonds maturing September 1, 1960, will have been retired, and said bonds maturing March 1, 1961, will have been duly called for redemption prior to maturity, all prior to the issuance of the revenue bonds to procure funds to pay the cost of said proposed improvements, with the result that there will be no bonds of a prior issie outstanding at the time of issuance of said new bonds; now therefore, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Section 1. That the City of South Bend (hereinafter sometimes referred to as the "City "), being the owner of and engaged in operating unencumbered waterworks supplying the City and its inhabitants with water for public and domestic use, now provide for certain needed extensions and additions to such waterworks and the payment of such extensions and additions from the revenues and receipts of said waterworks pursuant to and in the manner prescribed in Chapter 155 of the Acts of 1929, and the acts amendatory thereof and supplemental thereto (sometimes hereinafter referred to as the "Act "). The terms "waterworks," "water system," and "system" wherever used in this ordinance shall be construed to mean and to include the existing waterworks -2- owned by the City and all extensions, additions and improvements thereto and replacements thereof now or subsequently constructed or acquired. Section 2. Said extensions and additions, consisting of the construction of new wells, for additional water supply and pumping equipment; remodeling and improving an existing pumping station and the construction of an addition thereto; the construction and installation of chlorination and metering control equipment; interconnecting piping and mains; the construction of a new steel water storage reservoir; the construction of feeder water mains and distribution water mains; and miscellaneous equipment, appurtentances and work shall be constructed in accord- ance with the plans and specifications prepared by Clyed E. Williams & Associates, Inc., Consulting Engineers of South Bend, Indiana, and Callix E. Miller, Architect and Engineer of South Bend, Indiana, which plans and specifications are made a part hereof by reference and are hereby approved. The Board of Public Works and Safety is hereby authorized to proceed with the construction and installation of said extensions and additions and to enter into all contracts necessary for such purpose in conformity with the provisions of this ordinance and of said Act, subject however, to the approval of the Public Service Commission for the making of said extensions and additions and the issuance of the required amount of revenue bonds; also, that the principal and interest of the bonds issued on account of such extensions and additions shall be paid solely and exclusively from the revenues of said waterworks system and shall not constitute a general obligation of the City. The Bard of Public Works and Safety is hereby authorized to file or cause -3- to be filed a proper petition with the Public Service Commission 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 extensions, additions, improvements thereto and replacements thereof 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 propor- tion of the gross revenues of said waterworks that shall be paid into the several accounts of said special fund, as provided by said Act, is hereby fixed and determined as follows: (a) Operation and Maintenance Account. Seventy -one per cent (71 %) 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 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 water- works during the calendar, operating or fiscal year then next ensuing. Any excess over,such surplus may be transferred to -4- either the Depreciation Account or the Bond and Interest Redemp- tion Account. (b) Depreciation Account. Ten and Five- tenths per cent (10.5 %) 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. Eighteen and Five- tenths per cent (18.5 %) of the gross revenues of the water- works 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 interest and principal of the bonds issued pursuant to the provisions of this ordinance in accordance with the terms hereof and any bonds ranking on a parity therewith, 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 dur- ing the remainder of the then current calendar, operating or fiscal year, together with the amount of interest on and principal of all the bonds which will become due and payable during the -5- 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 pur- chase of outstanding bonds, or redemption of any bonds redeem- able prior to maturity, at a price not exceeding the then applicable redemption price, if any. 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 contin- uously held and secured or invested as provided by the laws re- lating to the depositing, securing, and holding or investing of public funds, including particularly Chapter 9 of the Acts of 1945. 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. The funds from the operation of the waterworks on hand on the date of issuance of the bonds herein authorized may be applied on the costs of additions and extensions to the waterworks in the event such costs shall exceed the amount now estimated, but if not so used shall be set aside in and credited to the Operation and Maintenance Account or the Depreciation Account, as determined by the Board of Public Works and Safety. M Section 4. For the purpose of procuring funds with which to pay the cost of construction and installation of the extensions and additions 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, and shall be designated as "Waterworks Revenue Ponds of 1960." Said bonds shall be in a principal amount not exceeding One Million Nine hundred Forty Thousand Dollars ($1,940,000.00), in the denomination of One Thousand Dollars ($1;000.00) each, numbered consecutively from 1 up, dated as of the first day of the month in which said bonds are sold, or September 1, 1960, whichever date is the later, and shall bear interest at a rate or rates not exceeding five per cent (5 %) 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 March 1, 1961, and shall be evidenced by coupons attached to said bonds. Both bonds and interest coupons shall be payable at St. Joseph Bank and Trust Company, South Bend, Indiana, in the City of South Bend, Indiana, or at the option of the holder at the City National Bank and Trust Company of Chicago, in the City of 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: -7- $120,000 130,000 135,000 140,000 145 ;000 1 5,000 1 5,000 170,000 180,000 190,000 200,000 210;000 September 1, 1 September 1, 1 September 1, 1 September 1, 1 September 1, 1 September 1, 1 September 1, 1 September 1, 1 September 1, 1 September 1, 1 September 1, 1 September 1, 1 The bonds of this issue shall not be redeemable prior to maturity. Section 5. 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 signa- tures of the 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 re- mained 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 the registered owner 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 6. The form and tenor of said bonds and the interest coupons to be attached thereto, together with the forth of registry endorsement thereon, shall be substantially as follows, all blanks to be filled in properly prior to delivery thereof: No. UNITED STATES OF AMERICA State of Indiana County of St. Joseph • :a n $1,000.00 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 ONE THOUSAND DOLLARS on the first day of September 19 , 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 March 1, 1961, upon presentation and surrender of the annexed coupons as they severally become due. 0 Both principal and interest of this bond are payable in lawful money of the United States of America at the St. Joseph Bank and Trust Company, South Bend, Indiana, in the City of South Bend, Indiana, or at the option of the holder at the City National Bank and Trust Company of Chicago, in the City of Chicago, Illinois. This bond is one of an authorized issue of One Thousand Nine Hundred Forty (1,940) 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 Nine Hundred Forty Thousand Dollars ($1,940,000.00), numbered consecutively from 1 to -1940 inclusive, issued for the purpose of providing funds to pay the cost of extensions and additions to the municipally owned waterworks of said City,.pursuant to an ordinance passed by the Common Council of said City on the day of 1960, entitled "An Ordinance concerning the acquisition and con- struction of extensions and additions 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 first charge upon Eighteen and Five - tenths per cent (18.50 of the gross income and revenues of said waterworks as the same now exist or may here- after 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" which has been duly created by said ordinance. 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 indebtedness of the City within the provisions and limitations of the constitution of the State of Indiana. 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 -10- statutes, including the right to compel the collection of suffic- ient 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 law merchant. This bond may be registered at the office of the City Controller as to prin- cipal 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 on the date fixed therefor, the City may deposit in trust with St. Joseph Bank and Trust Company, South Bend, Indiana, an amount sufficient to pay such bond or interest coupon, as the case.may be, and thereafter 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 attached to be executed by placing thereon the facsimile signatures of said NIa or and City Controller, all as of the first day of 1960. Attest: City Clerk CITY OF SOIITA :fill .i : Countersigned: -11- City Controller (Interest Coupon) Coupon No.� On the , 19-1 the City of South Bend, Indiana, will pay to the bearer at the St. Joseph BanX and Trust Company, South Bend, Indiana, in said City, or at the option of the holder at the City National Bank and Trust Company 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 1960, dated 1, 1960, No. City Controller REGISTRATION ENDORSEMENT This bond can be registered only at the office of the City Controller in the City of South Band, Indiana. No writing hereon except by the City Controller. Date of Registry In Whose Name Registered City Controller -12- 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 Record and the South Bend Tribune, and one time in a newspaper published in the City of Indianapolis, and such other publications as he shall deem 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 (5 %) per annum. Such 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 -13- maturities of the bonds bearing each rate, but all bonds matur- ing on the same date shall bear the same 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 Controller shall be authorized to continue the sale from day to day for a period of thirty (30) days without readvertisement; provided, however, that if said sale be contin- ued no bid shall be accepted which is lower than the highest bid received at the time 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 Ross McCord Ice & Miller, 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 8. In the event it shall be hereafter deter- mined that it is not necessary to issue all of the bonds author- ized by this ordinance, or the Public Service Commission shall not approve the issuance of said total amount of bonds, the -14- 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 ordin- ance 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 exten- sions and additions 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. Section 9. The City reserves the right to authorize and issue additional bonds, payable out of the revenues of the water- works, ranking on a parity with the bonds authorized by this ordinance, for the purpose of financing the cost of future additions, extensions and improvements to the waterworks, subject to the following conditions: (a) The interest on and principal of all bonds payable from the revenues of the waterworks shall have been paid to date in accordance with the terms thereof, and all required payments -15- into the 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 water - works 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 One Hundred Twenty -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 proportion 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 (1250 of the maximum annual interest and principal requirements of the then outstand- ing 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 -16- Interest Redemption Account for said year would have equaled not less than One Hundred Twenty -five per cent (125%) of the maximum annual interest and principal requirements of the then outstanding bonds and the aditional parity bonds proposed to be issued. 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 shall certify that he has no pecuniary interest in the waterworks or improvements thereto other than in the making of said analysis and the preparation of said showings. (c) To the extent required by law, the issuance of the proposed additional parity bonds and any necessary increase in water rates and charges shall have been approved by the Public Service Commission of Indiana, and said Commission shall have certified 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 premium, if any, received at the time of the delivery of the bonds shall be deposited in the Bond and Interest Redemption Account hereinbe- fore created. The remaining proceeds from the sale of the bonds shall be deposited in a bank or banks which are legally designated and qualified depositories for the funds of the City, in a _17- special account or accounts to be designated as "City of South Bend, Waterworks Construction Account." Each of such special accounts shall be deposited, 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. The funds in such special account or accounts shall be expended only for the purpose of paying the cost of the extensions and additions to said water- works as herein authorized, the incidental expense incurred in connection therewith and with the issuance of bonds, and for the payment of interest accruing on the bonds during the period of construction, if required for that purpose. Any balance or balances remaining unexpended in such special account or accounts after the completion of the work, which are not re- quired 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 waterworks and deposited in the special accounts herei.nbefore established and all disbursements made therefrom and all transactions relating to said waterworks. There shall be prepared and furnished, upon written request, to the original purchaser . of the bonds, and to any holder of the bonds not more than ninety (90) days after the close of each annual fiscal period, operating and income statements and balance so sheets of the waterworks, 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 collect reasonable and just rates and charges for the services and facilities afforded by said waterworks which will provide revenues at least sufficient to pay the reasonable and proper cost of the maintenance and oper- ation of the waterworks, to provide a proper and reasonable deprec- iation 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 prin- cipal 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 purpose, shall be charged against the City and shall be paid for as the charges accrue, and the revenue so received shall be deemed to be _ �9_ 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 the Public Service Commission, that it will cause to be maintained at least Two Thousand Five Hundred Seventy -eight (2,578) fire hydrants and will pay to its waterworks department an annual rental of not less than Forty Dollars ($40.00) 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 con- struction bonds running to the City of South Bend, in an amount equal to One Hundred per cent (1000 of the contracts, to insure the completion of such ance with their terms, and such contractors to carry such employer's liability and publ as are required under the laws of the State case of public contracts. -20- amount of such contracts in accord - shall be required Le liability insurance of Indiana in the (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, and Callix E. Miller, Architect- Engineer of South Bend,Indians, now employed by the City, or such 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 water- works in good condition and operate the same in an efficient manner and at a reasonable cost. (d) So long as any of the bonds herein authorized are outstanding, the City shall maintain insurance on the insurable parts of the waterworks of a kind 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 or damaged, or if not needed for that purpose, shall be deposited in the Depreciation Account. (e) So long as any of the bonds herein authorized are outstanding, the City shall not mortgage, pledge or other - wise 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 -21- additional bonds or other obligations pledging any portion of the revenues of said waterworks, except as specifically provided in See. 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 fixed proportion of the revenues of the waterworks herein directed to be set apart and paid into the Bond and Inter- est Redemption Account for the uses and purposes of said account as in this ordinance set forth. (g) The provisions of this ordinance shall constitute a contract by and between the City 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 repealed 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 -22- have all of the rights, remedies and privileges, either expressly set forth in the provisions of Chapter 155 of the Acts of the Indiana General Assembly for the year 1929, and all acts amendatory thereof and supplemental thereto, or implied therein, including the right to compel the collection of sufficient rates and charges to provide for the payment 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. All ordinances and parts of ordinances in conflict herewith are hereby repealed. Section 15, This ordinance shall be in full force and effect from and after its passage. let'& 2nd READING VI/ t, 1, COMMITTEE OF THE WHOLE I V4 0 PUBLIC HEARING S %31W 3rd READING S Jai' 6 J NOT APFMVED REFE44'RED PASSED u -23- APPROVE D BY ............................................ ........................19..... Passed and adopted by the Common Council of the City of South Bend, on the J_3 day of 4 1960. • Attest: l p sL� k'I City Clerk Presented by me to the Mayor of the City of South Bend, on the day of - - - -�Y � 1960, at the hour. of /ig ., o 9 A. M. City Clerk This ordinance approved and signed by me on the day of 1960, at the hour of %Oi /d A M. Mayor -24-