Loading...
HomeMy WebLinkAboutAutthorizing the acquistion, construction, and installation of certain improvements and extensions to sewage works, the issuance and sale of additional revenue bondsORDINANCE No. es,a~ Passed by the Common Councit of the City of South Bend, Indiana June 22, 19 _~~_ Attest: Attest: Mayor Presented by me to the Mayor of the City of South Bend, Indiana June 23, City Clerk Approved and signed by me June 24, City Clerk President of Common Council 19 98 19 98 ORDINANCE NO. I !' I AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE ACQUISITION, CONSTRUCTION AND INSTALLATION OF CERTAIN IMPROVEMENTS AND EXTENSIONS TO THE CITY'S SEWAGE WORKS, THE ISSUANCE AND SALE OF ADDITIONAL REVENUE BONDS TO PROVIDE FUNDS FOR THE PAYMENT OF THE COSTS THEREOF, AND THE COLLECTION, SEGREGATION AND DISTRIBUTION OF THE REVENUES OF SUCH SEWAGE WORKS AND OTHER RELATED MATTERS STATEMENT OF PURPOSE AND INTENT: The City of South Bend, Indiana (the "City"), owns and operates a sewage works by and through its Board of Public Works (the "Board") for the collection and treatment of sewage and other wastes (the "Sewage Works"), pursuant to the provisions of Indiana Code 36-9-23, as amended (the "Act"). The Board has determined and recommended to the Common Council of the City (the "Common Council") that certain improvements and extensions to the Sewage Works, as described herein, are necessary. As such, the City has employed Greeley and Hansen, consulting engineers (the "Consulting Engineers"), who have prepared and filed plans, specifications, and detailed descriptions and estimates of the costs of the necessary improvements and extensions to the Sewage Works, which plans, specifications, descriptions and estimates, to the extent required by law, have been duly submitted to and approved or will be approved by all governmental authorities having jurisdiction thereover (the improvements and extensions to the Sewage Works as described in the Consulting Engineers' plans and specifications and below are referred to herein as the "Project"), including, without limitation, the Indiana Department of Environmental Management ("Department"). The Common Council finds that the estimates prepared and delivered by the Consulting Engineers with respect to the costs (as defined in Indiana Code 36-9-23-11) of acquisition, construction, and installation of such improvements and extensions to the Sewage Works (as defined in Indiana Code 36-9-1-8, as amended, and in the Act), and including all authorized costs relating thereto, including the costs of issuance of bonds on account of the financing of all or a portion thereof, will be in the estimated amount of Twenty-five Million Eight Hundred Thirty-four Thousand One Hundred Ten Dollars ($25,834,100). The Common Council finds that to provide funds necessary to pay for the costs of the Project, it will be necessary for the City to issue sewage works revenue bonds in an amount not to exceed Twenty-four Million Ninety-Five Thousand Dollars ($24,095,000). Pursuant to Ordinance No. 8359-93, adopted by the Common Council on March 8, 1993 (the "1993 Bond Ordinance"), the City heretofore issued revenue bonds payable from the net revenues of the Sewage Works, designated "Sewage Works Refunding Revenue Bonds of 1993" dated April 1, 1993 (the "1993 Bonds"), outstanding after December 31, 1997, in the amount of $7,600,000, bearing interest at various rates and maturing in various amounts annually on December 1 in the years 1998 to 2008. Section 16 of the 1993 Bond Ordinance permits the issuance additional bonds payable from revenues of the Sewage Works ranking on a parity with the 1993 Bonds for the purpose of financing the costs of future additions, extensions and improvements to the Sewage Works, so long as certain conditions are met. The Common Council now finds that all conditions precedent to the adoption of an ordinance authorizing the issuance of revenue bonds to provide the necessary funds to be applied to the costs of the Project and all authorized costs relating thereto, have been complied with in accordance with the provisions of the Act. Therefore, the Common Council seeks to authorize the issuance of revenue bonds to finance the acquisition, construction, and installation of the Project pursuant to the Act and the sale of one or more series of such revenue bonds to the Indiana Bond Bank (the "Bond Bank") pursuant to the provisions of Indiana Code 5-1.5, the State of Indiana (the "State") pursuant to the provisions of Indiana Code 13-18-13 and 3'L7 IAC 13, or at public sale pursuant to the provisions of Indiana Code 5-1-11, subject to and dependent upon the terms and conditions hereinafter set forth. In conjunction with the issuance of said bonds, the City expects to enter into a Financial Assistance Agreement (as hereinafter defined) with the State, pertaining to the Project and the financing thereof. NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS: -2- ::ODMA\PCDOCS\SBDOCS 1 \ 149473 Section 1. Acquisition Construction, and Installation of the Project. The City, acting by and through the Board and as the owner and operator of the Sewage Works for the collection and treatment of sewage and other wastes, hereby orders, authorizes and directs the Board to acquire any and all necessary property and to proceed with the acquisition, construction, and installation of improvements and extensions to the Sewage Works, pursuant to the Act and in accordance with the plans, specifications and cost estimates heretofore prepared and filed with the Board by the Consulting Engineers, which plans, specifications and cost estimates are hereby adopted and approved and, by reference, incorporated fully into this Ordinance, and two copies of which are now on file in the office of the Board and are open for public inspection. The actions of the Board in connection with the acquisition of any and all necessary property and the acquisition, construction, installation, and financing of such improvements and extensions to the Sewage Works are hereby authorized, approved, ratified and confirmed. Where used in this Ordinance, the term "City" shall be construed also to include any department, board, commission or officer or officers of the City or of any City department, board or commission. The terms "Sewage Works," "sewage works," "works" and similar terms used in this Ordinance shall be construed to mean and include the existing structures and property of the Treatment Works, as defined in the Financial Assistance Agreement, and all enlargements, improvements, extensions and additions thereto, and replacements thereof, now or subsequently constructed or acquired, from the proceeds of the bonds authorized herein or otherwise. Such improvements and extensions shall be constructed and the bonds herein authorized shall be issued pursuant to the provisions of this Ordinance and the Act. Section 2. Description of the Project. The Project consists of the conversion of the upflow clarifier and the modification of the existing final clarifiers; the replacement of the aeration blower engine drive and the influent pump engine drive; the conversion of the sludge blend tank to a thickening tank; modification to four aeration tanks for step feed to provide a capacity of 48 mgd; the addition of a screen and grit building, grit tanks, a locker room, an office and maintenance facilities; the installation of a geographical information system for the purpose of monitoring the operation and maintenance of the collection system; the addition of an anaerobic tank to permit the removal of phosphorus biologically, and the addition of a DAF sludge thickening unit. -3- ::ODMA\PCDOCS\SBDOCS 1 \ 14947\3 The City, acting by and through the Board, shall proceed with the acquisition, construction and installation of the Project and shall enter into all contracts necessary or appropriate for such purpose, in conformity with and subject to the requirements and conditions set forth in this Ordinance and in the Act. Section 3. The 1998 Bonds. In accordance with the Act and for the purpose of providing funds with which to pay the costs of the Project, together with all authorized costs relating thereto including the costs of issuance of the 1998 Bonds, as hereinafter defined, on account thereof, the City shall issue and sell its sewage works revenue bonds in the aggregate principal amount not to exceed Twenty-four Million Ninety-five Thousand Dollars ($24,095,000) (the "1998 Bonds"). The principal of, redemption premium, if any, and interest on the 1998 Bonds shall be payable, on a parity with the 1993 Bonds, solely out of the Sewage Works Sinking Fund referred to below. Any other provisions of this Ordinance to the contrary notwithstanding, the 1998 Bonds shall be issued on a parity with the outstanding 1993 Bonds, and none of the provisions of this Ordinance shall be construed to affect the rights of the holders of the outstanding 1993 Bonds. The Controller of the City (the "Controller") is authorized to employ the firm of Crowe, Chizek and Company, LLP, Indianapolis, Indiana, to perform any and all computations necessary to confirm the preliminary evidence and findings demonstrating compliance with the conditions set forth in the 1993 Bond Ordinance for issuance of additional revenue bonds on parity with the outstanding 1993 Bonds. The City shall not issue the 1998 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 in complete compliance with the conditions set forth in Section 16 of the 1993 Bond Ordinance for the issuance of additional revenue bonds on parity with the outstanding 1993 Bonds. The 1998 Bonds shall be designated as the "City of South Bend, Indiana, Sewage Works Revenue Bonds of 1998". The 1998 Bonds shall be issued as fully registered bonds in denomination or denominations of One Thousand Dollars ($1,000) and any integral multiples thereof not exceeding the aggregate principal amount of such 1998 Bonds maturing in any one (1) year, or in the event that one or more series of the 1998 Bonds are sold to the Bond Bank or to the State pursuant to Section 8 of this Ordinance, shall be in multiples of One Dollar ($1). Each series of 1998 Bonds shall be numbered consecutively from 98R-1 upward and shall bear interest at a rate not -4- ::ODMA\PCDOCS\SBDOCS I \ 149473 exceeding two and nine-tenths percent (2.90%) per annum (the exact rate or rates to be determined by negotiation with the Bond Bank or the State or by bidding). Said interest rate or rates shall be in multiples ofone-eighth (1/8) orone-twentieth (1/20) of one percent (1%). All 1998 Bonds maturing on the same date shall bear the same rate of interest, and the interest rate on 1998 Bonds of a given maturity must be at least as great as the interest rate on 1998 Bonds of any earlier maturity. Interest on the 1998 Bonds shall be calculated on the basis of twelve (12) thirty (30)-day months for a three hundred and sixty (360)-day year and shall be payable semiannually on December 1 and June 1 in each year (each an "Interest Payment Date"), commencing on the first December 1 or June 1, following the original date of the Bonds as determined by the Controller, with the advice of the City's financial advisor, or as set forth in the Financial Assistance Agreement to be entered into between the City and the State (the "Financial Assistance Agreement"), or in the bond sale notice if the 1998 Bonds are sold to any other purchaser, until principal is fully paid. The principal of the 1998 Bonds shall mature serially and annually on December 1 of each year, over a period ending no later than twenty (20) years after substantial completion of the Project, in such amounts that will produce as level annual debt service as practicable, and in the years and amounts to be determined by negotiation with the Bond Bank or the State or by the Controller with the advice of the City's financial advisor. Each series of the 1998 Bonds shall bear an original issue date which shall be the date of issuance of the 1998 Bonds or the first day of the month in which the 1998 Bonds are delivered, as determined by the Controller (unless otherwise provided in the Purchase Agreement, as hereinafter defined, in the event such series of the 1998 Bonds is sold to the Bond Bank or unless otherwise provided in the Purchase Agreement or Financial Assistance Agreement in the event such series of the 1998 Bonds is sold to the State), and each 1998 Bond shall also bear the date of its authentication. Any 1998 Bond authenticated on or before the fifteenth (15th) day of the calendar month immediately preceding the first Interest Payment Date, shall pay interest from its original issue date. Any 1998 Bond authenticated thereafter shall pay interest from the Interest Payment Date next preceding the date of authentication of such 1998 Bond to which interest thereon has been paid or duly provided for, unless such 1998 Bond is authenticated after the day which is fifteen (15) days prior to the Interest Payment Date and on or before such Interest Payment Date, in which case interest thereon shall be paid from such Interest Payment Date. -5- ::ODMA\I'CDOCS\SBDOCS 1\1494'7\3 With respect to any series of 1998 Bonds sold to the State pursuant to Section 8 of this Ordinance, it is understood that principal shall not be payable and interest shall not accrue on such series of 1998 Bonds until such principal amount has been advanced pursuant to requests made by the City to the State, with advances to be allocable to such series of 1998 Bonds in order of maturity. In the event that the total principal amount of the 1998 Bonds of such series is not advanced to the City, the principal amount of such series shall be reduced to effect such reduction in a manner that will still achieve as level annual debt service as practicable in accordance with in this Section 3 of this Ordinance. The Controller is hereby authorized to appoint a registraz and a paying agent for the 1998 Bonds (the "Registrar" and the "Paying Agent" and, in both such capacities, the "Registrar and Paying Agent"). The Registrar and Paying Agent shall be chazged with and shall by appropriate agreement undertake the performance of all of the duties and responsibilities customazily associated with each such position, including without limitation the authentication of the 1998 Bonds. The Controller is authorized and directed to enter into such agreements and understandings with the Registrar and Paying Agent and any subsequent Registrar and Paying Agent as will enable and facilitate the performance of its duties and responsibilities, and is authorized and directed to pay such fees as the Registrar and Paying Agent may reasonably charge for its services in such capacity, and such fees may be paid from the Sewage Works Sinking Fund created under the 1993 Ordinance and continued by this Ordinance. As to the 1998 Bonds, if registered in the name of the State, the Bond Bank or any other purchaser that does not object to such designation, the Controller shall be designated as the Registrar and Paying Agent and shall be chazged with the performance of all of the duties and responsibilities of Registraz and Paying Agent. The Registrar and Paying Agent, if not the Controller, may at any time resign as Registrar and Paying Agent upon giving thirty (30) days' notice in writing to the City and by first- class mail to each registered owner of the 1998 Bonds then outstanding, and such resignation will take effect at the end of such thirty (30) days or upon the eazlier appointment of a successor Registrar and Paying Agent by the City. Any such notice to the City may be served personally or sent by certified mail. The Registraz and Paying Agent may also be removed at any time as Registraz and Paying Agent by the City, in which event the City may appoint a successor Registrar and Paying -6- :ODMA\PCDOCS\SBDOCS 1 \ 14947\3 Agent. The City shall notify each registered owner of 1998 Bonds then outstanding by first-class mail of the removal of the Registrar and Paying Agent. Notices to registered owners of the 1998 Bonds shall be deemed to be given when mailed by first-class mail to the addresses of such registered owners as they appear on the registration books kept by the Registrar. Any predecessor Registrar and Paying Agent shall deliver all of the 1998 Bonds and cash in its possession with respect thereto, together with the registration books, to the successor Registrar and Paying Agent. The Controller is hereby authorized to act on behalf of the City with regard to any of the aforementioned actions of the City relating to the resignation or removal of the Registrar and Paying Agent and appointment of a successor Registrar and Paying Agent. If the 1998 Bonds are not sold to the State or the Bond Bank or if wire transfer payment is not required, the principal of and any redemption premium on the 1998 Bonds shall be payable at the principal corporate trust office of the Paying Agent. Interest on the 1998 Bonds shall be paid by check or draft mailed or delivered by the Paying Agent to the registered owner thereof at the address as it appears on the registration books kept by the Registrar as of the fifteenth (15th) day of the month immediately preceding the Interest Payment Date or at such other address as may be provided to the Paying Agent in writing by such registered owner. Principal of and interest on any series of 1998 Bonds registered in the name of the State or the Bond Bank shall be paid by wire transfer to a financial institution if and as directed by the State on the due date of such payment or, if such date is a day whets financial institutions are not open for business, on the business day immediately preceding such due date. Interest on 1998 bonds sold to the State or Bond Bank to finance Eligible Costs (as defined in the Financial Assistance Agreement) shall be paid from the date which is one (1) year after the date of delivery of the 1998 Bonds. So long as the State or the Bond Bank is the registered owner of the 1998 Bonds, such 1998 Bonds shall be presented for payment as directed by the State or the Bond Bank, as applicable. All payments on the 1998 Bonds shall be made in any coin or currency of the United States of America which, on the dates of such payments, shall be legal tender for the payment of public or private debt. Each 1998 Bond shall be transferable or exchangeable only on the books of the City maintained for such purpose at the principal corporate trust office of the Registrar, by the registered owner thereof in person, or by his or her attorney duly authorized in writing, upon surrender of such 1998 Bond together with a written instrument of transfer or exchange satisfactory to the Registrar -7- ::ODMA\PCDOCS\SBDOCS 1\1494T3 duly executed by the registered owner or his or her attorney duly authorized in writing, and thereupon a new fully registered 1998 Bond or 1998 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 may be, in exchange therefor. Each 1998 Bond may be transferred or exchanged without cost to the registered owner, except for any tax or other governmental charge which may be required to be paid with respect to such transfer or exchange. The Registrar shall not be obligated to make any transfer or exchange of any 1998 Bond (i) during the fifteen (15) days immediately preceding an Interest Payment Date or (ii) after the mailing of notice calling such 1998 Bond for redemption. The City, the Registrar and the Paying Agent may treat and consider the person in whose name any 1998 Bond is registered as the absolute owner thereof for all purposes including the purpose of receiving payment of, or on account of, the principal thereof, and redemption premium, if any, and interest thereon. In the event any 1998 Bond is mutilated, lost, stolen or destroyed, the City may cause to be executed and the Registrar may authenticate a new 1998 Bond of like date, maturity, series and denomination as the mutilated, lost, stolen or destroyed 1998 Bond, which new 1998 Bond shall be marked in a manner to distinguish it from the 1998 Bond for which it was issued; provided, that in the case of any mutilated 1998 Bond, such mutilated 1998 Bond shall first be surrendered to the Registrar, and in the case of any lost, stolen or destroyed 1998 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 that any such mutilated, lost, stolen or destroyed 1998 Bond shall have matured or been called for redemption, instead of causing to be issued a duplicate 1998 Bond, the Registraz and Paying Agent may pay the same upon surrender of the mutilated 1998 Bond or upon satisfactory indemnity and proof of loss, theft or destruction in the case of a Lost, stolen or destroyed 1998 Bond. The City and the Registrar and Paying Agent may charge the owner of any such 1998 Bond with their reasonable fees and expenses in connection with the above. Every substitute 1998 Bond issued by reason of any 1998 Bond being lost, stolen or destroyed shall, with respect to such 1998 Bond, constitute a substitute contractual obligation of the City pursuant to this Ordinance, whether or not the lost, stolen or destroyed 1998 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 1998 Bonds duly issued hereunder. -8- ::ODMA\PCDOCS\SBDOCS 1\14947\3 In the event that any 1998 Bond is not presented for payment or redemption on the date established therefor, the City may deposit in trust with the Paying Agent an amount sufficient to pay such 1998 Bond or the redemption price thereof, as appropriate, and thereafter the owner of such 1998 Bond shall look only to the funds so deposited intrust with the Paying Agent for payment and the City shall have no further obligation or liability with respect thereto. Interest on Bonds sold to the State of Indiana or the Indiana Bond Bank to finance Eligible Costs (as defined in the Financial Assistance Agreement) shall be paid from the date which is two (2) years after the date of delivery of the Bonds. Interest on Bonds issued to finance all other costs which are authenticated on or before the Record date which precedes the first interest payment date shall be paid from their original date. Interest on Bonds authenticated subsequent to the Record Date which proceeds the first interest payment date thereon shall be paid from the interest payment date to which interest has been paid as of the date on which such Bonds are authenticated, unless a Bond is authenticated between the Record Date and the interest payment date in which case the interest shall be paid from such interest payment date. Section 4. Optional Redemption of the 1998 Bonds. The 1998 Bonds shall be subject to redemption at the option of the City, in whole or in part, upon sixty (60) days written notice to the registered owner or owners of 1998 Bonds to be redeemed, on any date on or after December 1, 2008, in inverse order of maturity and by lot within any such maturity or maturities by the Registrar, at a redemption price expressed as a percentage of the principal amount of each 1998 Bond to be redeemed in accordance with the following schedule, plus accrued interest to the redemption date: Redemption Period (Both Dates Inclusive) Redemption Price December 1, 2008, through November 30, 2009 102% December 1, 2009, through November 30, 2010 101% December 1, 2010, and thereafter prior to maturity 100% Official notice of such redemption shall be mailed by the Registrar and Paying Agent by certified or registered mail at least sixty (60) days and not more than ninety (90) days prior to the scheduled redemption date to each of the registered owners of the 1998 Bonds called for redemption -9- ::ODMA\PCDOCS\SBDOCS 1\14947\3 (unless waived by any such registered owner) at the address shown on the registration books of the Registrar and Paying Agent, or at such other address as is furnished in writing by such registered owner to the Registrar; provided, however, that failure to give such notice by mailing, or any defect therein, with respect to any 1998 Bond shall not affect the validity of the proceedings for the redemption of any other 1998 Bonds. The notice shall specify the redemption price, the date and place of redemption, and the registration numbers (and, in case of partial redemption, the respective principal amounts) of the 1998 Bonds called for redemption. The place of redemption may be at the principal corporate trust office of the Registrar and Paying Agent or as otherwise determined by the City. Interest on the 1998 Bonds (or portions thereof) so called for redemption shall cease to accrue on the redemption date fixed in such notice, if sufficient funds are available at the place of redemption to pay the redemption price on the redemption date and when such 1998 Bonds (or portions thereof) are presented for payment. Any 1998 Bond redeemed in part may be exchanged fora 1998 Bond or 1998 Bonds of the same maturity in authorized denominations equal to the remaining principal amount thereof. In addition to the foregoing notice, the City may also direct that further notice of redemption of the 1998 Bonds be given, including without limitation and at the option of the City, notice described in paragraph (a) below given by the Registrar and Paying Agent to the parties described in paragraphs (b) and (c) below. No defect in any such further notice and no failure to give all or any portion of any such further notice shall in any manner defeat the effectiveness of any call for redemption of 1998 Bonds so long as notice thereof is mailed as prescribed above. (a) If so directed by the City, each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (i) the CUSIP numbers of all 1998 Bonds being redeemed; (ii) the date of issue of the 1998 Bonds as originally issued; (iii) the rate of interest borne by each 1998 Bond being redeemed; (iv) the maturity date of each 1998 Bond being redeemed; and (v) any other descriptive information needed to identify accurately the 1998 Bonds being redeemed. (b) If so directed by the City, each further notice of redemption shall be sent at least thirty-five (35) days before the redemption date by registered or certified mail or overnight delivery service to all registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the 1998 Bonds (such -10- :ODMA\PCDOCS\SBDOCS 1 U 494T3 depositories now being The Depository Trust Company of New York, New York, and Philadelphia Depository Trust Company of Philadelphia, Pennsylvania) and to one or more national information services that disseminate notices of redemption of obligations such as the 1998 Bonds (such as Financial Information, Inc.'s Financial Daily Called Bond Service, Kenny Information Service's Called Bond Service, Moody's Municipal and Government News Reports and Standard & Poor's Called Bond Record). (c) If so directed by the City, each such further notice shall be published one time in The Bond Buyer of New York, New York or, if the Registrar believes such publication is impractical or unlikely to reach a substantial number of the holders of the 1998 Bonds, in some other financial newspaper or journal which regularly carries notices of redemption of other obligations similar to the 1998 Bonds, such publication to be made at least sixty (60) days prior to the date fixed for redemption. Upon the payment of the redemption price of the 1998 Bonds (or portions thereof) being redeemed and if so directed by the City, each check or other transfer of funds issued for such purpose shall bear the CUSIP number identifying, by issue and maturity, the 1998 Bonds (or portions thereof) being redeemed with the proceeds of such check or other transfer. Section 5. Execution and Authentication of the 1998 Bonds. The 1998 Bonds shall be executed in the name of the City by the manual or facsimile signature of the Mayor of the City (the "Mayor"), countersigned by the manual or facsimile signature of the Controller and attested by the manual or facsimile signature of the Clerk of the City (the "Clerk"), who shall cause the seal of the City or a facsimile thereof to be affixed to each of the 1998 Bonds. The 1998 Bonds shall be authenticated by the manual signature of the Registrar, and no 1998 Bond shall be valid or become obligatory for any purpose until the certificate of authentication thereon has been so executed. In case any official whose signature appears on any 1998 Bond shall cease to be such official before the delivery of such 1998 Bond, the signature of such official shall nevertheless be valid and sufficient for all purposes, the same as if such official had been in office at the time of such delivery. Subject to the provisions of this Ordinance regarding the registration of the 1998 Bonds, the 1998 Bonds shall be fully negotiable instruments under the laws of the State of Indiana. ec ion 6. Securityand Sources of Payment for the 1998 Bonds. The 1998 Bonds, when fully paid for and delivered to the purchaser thereof as to both principal and interest, shall be -11- ODMA\PCDOCS\SBDOCS 1\14947\3 valid and binding special revenue obligations of the City, payable solely from and secured by an irrevocable pledge of and constituting a charge upon all of the net revenues (herein defined as gross revenues after deduction only for the payment of the reasonable expenses of operation, repair and maintenance) derived from the Sewage Works, including all such net revenues from the existing works, the Project and all additions and improvements thereto and replacements thereof subsequently constructed or acquired, to be set aside into the Sewage Works Sinking Fund as herein provided and shall rank on a parity with the 1993 Bonds. The City shall not be obligated to pay the 1998 Bonds or the interest thereon except from the net revenues of the Sewage Works, and the 1998 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. Section .Form of the 1998 Bonds. The form and tenor of the 1998 Bonds shall be substantially as set forth in Appendix A attached hereto and incorporated herein as if set forth at this place (with all blanks to be filled in properly and all necessary additions and deletions to be made prior to the delivery thereof). Section 8. Issuance, Sale and Delivery of the 1998 Bonds. The Controller is hereby authorized and directed to have the 1998 Bonds prepared, and the Mayor and the Clerk are each hereby authorized and directed to execute, and attest as appropriate, the 1998 Bonds in the form and manner herein provided. The Controller is hereby authorized and directed to deliver the 1998 Bonds to the Treasurer of St. Joseph County, ex officio Treasurer of the City, and shall take her receipt therefor and upon consummation of the sale of said 1998 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 by the Controller, and to deliver the 1998 Bonds to the purchaser and receive the purchaser's receipt for the Series 1998 Bonds. The amount to be certified by the Controller and collected by the Treasurer shall be the full amount which the purchaser or purchasers have agreed to pay therefor, which shall be not less than 99% of the par amount of the 1998 Bonds, plus accrued interest thereon to the date of delivery, if any. If the Treasurer is not available, then the Controller shall deliver the 1998 Bonds to the purchaser and deliver the proceeds to the Treasurer. The Treasurer and the Controller shall then report the proceedings to the Common Council. The City may receive payment for the Bonds in installments. The proceeds derived from the sale of the 1998 -12- ::ODMA\PCDOCS\SBDOCS 1 \ 1494'R3 Bonds shall be and are hereby set aside for application to the costs of the Project, and including all authorized costs relating thereto, including the costs of issuance of the 1998 Bonds. The authorized officers of the City are hereby authorized and directed to draw all proper and necessary warrants and to do whatever other acts and things that may be necessary or appropriate to carry out the provisions of this Ordinance. One or more series of the 1998 Bonds may, in the discretion of the Controller, be sold by public sale. In the event the 1998 Bonds are sold by public sale, prior to the sale of the 1998 Bonds, the Controller shall cause to be published a notice of intent to sell t•,vo times at least one week apart in the South Bend Tribune and the Tri-County News. The notice of such sale or a summary thereof may also be published in The Bond Buyer, a financial journal published in the City and State of New York and/or in other publications, in the discretion of the Controller. The notice must state that any person interested in submitting a bid for the 1998 Bonds may furnish in writing, at the address set forth in the notice, the person's name, address, and telephone number, and that any such person may also furnish a telex number. The notice must also state: (1) the amount of the 1998 Bonds to be offered; (2) the denominations; (3) the dates of maturity; (4) the maximum rate or rates of interest; (5) the place of sale; and (6) the time within which the name, address and telephone number must be furnished, which time must not be less than seven (7) days after the last publication of the notice. Each person so registered shall be notified of the date and time bids will be received not less than riventy-four (24) hours before the date and time of sale. The notification shall be made by telephone at the number furnished by the person, and also by telex if the person furnishes a telex number. Such notice may also include such other information as the Controller shall deem necessary. Such notice shall also provide, among other things, that each bid shall be accompanied by a certified or cashier's check or financial surety bond in an amount equal to one percent (1%) of the principal amount of the 1998 Bonds to guarantee performance on the part of the bidder, and that in the event the successful bidder shall fail or refuse to accept delivery of and pay for the 1998 Bonds as soon as the 1998 Bonds are ready for delivery, or at the time fixed in the notice of intent to sell, then such check or financial surety bond and the proceeds thereof shall become the property of the City and shall be considered as the City's liquidated damages on account of such default. All bids for 1998 Bonds sold at public sale shall be sealed and shall be presented to the Controller at the Controller's office, and the Controller shall continue to receive all bids offered -13- :ODMA\PCDOCS\SBDOCS 1 \ 1494'T3 until the time fixed for the sale of the 1998 Bonds, at which time and place the Controller shall open and consider each bid. Bidders for the 1998 Bonds shall be required to name the rate or rates of interest which the 1998 Bonds are to bear, not exceeding two and nine-tenths percent (2.90%) per annum if the 1998 Bonds are sold to the State pursuant to its SRF Program (as hereinafter defined), or not exceeding eight percent (8%) per annum if sold at public sale or to the Bond Bank. Such interest rate or rates shall be in multiples ofone-eighth (1/8) or one-twentieth (1/20) of one percent (1%). Bids specifying more than one interest rate shall also specify the amount and maturities of the 1998 Bonds bearing each rate, and a111998 Bonds maturing on the same date shall bear the same rate of interest. The interest rate on 1998 Bonds of a given maturity must be at least as great as the interest rate on 1998 Bonds of any earlier maturity. Subject to the provisions set forth below, the Controller shall award the 1998 Bonds to the bidder offering the lowest net interest cost to the City, to be determined by computing the total interest on all of the 1998 Bonds from the date thereof to their maturities and deducting therefrom the premium bid, if any, or adding thereto the amount of any discount. No bid for less than 99% of the par value of the 1998 Bonds (or such higher percentage of the par value of the 1998 Bonds as the Controller, with the advice of the financial advisor to the City, shall determine prior to the publication of the notice of intent to sell), plus accrued interest at the rate or rates named to the date of delivery, will be considered. The Controller shall have full right to reject any and all bids. In the event no acceptable bid is received at the time fixed for the sale of the 1998 Bonds, the Controller shall be authorized to continue to receive bids from day to day thereafter for a period not to exceed thirty (30) days, without readvertising, pursuant to Indiana law. The Controller is hereby authorized to determine, in her discretion, to sell the 1998 Bonds pursuant to the general provisions of Indiana Code 5-1-11 (rather than Section 2(b) thereof), and in the event of such a determination, those portions of this Section 8 which conflict with such provisions shall be deemed inapplicable. One or more series of the 1998 Bonds may, in the discretion of the Controller, be sold to the Bond Bank. In the event of such determination, 1998 Bonds shall be sold to the Bond Bank in such denomination or denominations as the Bond Bank may request, and pursuant to a purchase agreement (the "Purchase Agreement") between the City and the Bond Bank, hereby authorized to be entered into and executed by the Mayor on behalf of the City, and attested by the Clerk, -14- ODMA\I'CDOCS\SBDOCS 1\ 14947\3 subsequent to the date of the adoption of this Ordinance. Such Purchase Agreement may set forth the definitive terms and conditions for such sale, but all of such terms and conditions must be consistent with the terms and conditions of this Ordinance, including without limitation, the interest rate or rates on the 1998 Bonds which shall not exceed the maximum rate of interest for the 1998 Bonds authorized pursuant to this Ordinance. 1998 Bonds sold to the Bond Bank shall be accompanied by all documentation required by the Bond Bank pursuant to the provisions of Indiana Code 5-1.5 and the Purchase Agreement, including, without limitation, an approving opinion of nationally recognized bond counsel, certification and guarantee of signatures and certification as to no litigation pending, as of the date of delivery of the 1998 Bonds to the Bond Bank, challenging the validity or issuance of the 1998 Bonds. In the event the Controller determines. to sell one or more series of the 1998 Bonds to the Bond Bank, the submission of an application to the Bond Bank and the entry by the City into the Purchase Agreement and the execution of the Purchase Agreement on behalf of the City by the Mayor in accordance with this Ordinance are hereby authorized approved and ratified. One or more series of the 1998 Bonds may, in the discretion of the Controller, be sold to the State, including any such sale through the Bond Bank, pursuant to its State Wastewater Revolving Loan Fund Program ("SRF Program"). The Mayor and the Clerk are hereby authorized to submit an application to the State for participation in the SRF Program. As a part of the SRF Program, the Financial Assistance Agreement for the 1998 Bonds and the Project shall be executed by the City and the State. The substantially final form of Financial Assistance Agreement attached as Annendix BB hereto and incorporated herein as if set forth in this place is hereby approved by the Common Council, and the Mayor and the Clerk are hereby authorized to execute the same on behalf of the City, and to approve any changes in form or substance to the Financial Assistance Agreement, such approval to be conclusively evidenced by its execution. The Financial Assistance Agreement may set forth the definitive terms and conditions for such sale including the purchase price and interest rate, but all of such terms and conditions must be consistent with the terms and conditions of this Ordinance, including, without limitation, the interest rates on the 1998 Bonds which shall not exceed the maximum rate of interest for the 1998 Bonds authorized pursuant to this Ordinance. 1998 Bonds sold to the State shall be accompanied by all documentation required by the State pursuant to Indiana Code 13-18-13, 327 IAC 13 and the Financial Assistance Agreement, including, -15- ::ODMA\PCDOCS\SBDOCS 1 \ 14947\3 without limitation, an approving opinion of a nationally recognized bond counsel, certification and guarantee of signatures and certification as to no litigation pending, as of the date of delivery of the 1998 Bonds to the State, challenging the validity or issuance of the 1998 Bonds. In the event the Controller determines to sell one or more series of the 1998 Bonds to the State, the entry by the City into the Financial Assistance Agreement and the execution of the Financial Assistance Agreement by the Mayor, and, if required, the entry by the City into a Purchase Agreement with the Bond Bank and the execution of the Purchase Agreement by the Mayor, in accordance with this Ordinance are hereby authorized, approved and ratified. For purposes of any provision of this Ordinance applicable in the event the 1998 Bonds are owned by the State, such provision shall be equally applicable if any of the 1998 Bonds are owned by the Bond Bank as a part of the SRF Program. Prior to the delivery of the 1998 Bonds, the Mayor, subject to the direction of the Common Council, (i) shall be authorized to investigate, negotiate and obtain bond insurance, other forms of credit enhancement and/or credit ratings on 1998 Bonds and (ii) shall obtain a legal opinion as to the validity of the 1998 Bonds from Baker & Daniels, South Bend, Indiana, bond counsel for the City, with such opinion to be furnished to the purchaser of the 1998 Bonds at the expense of the City. The costs of obtaining any such insurance, other credit enhancement and/or credit ratings, together with bond counsel's fee in preparing and delivering such opinion and in the performance of related services in connection with the issuance, sale and delivery of the 1998 Bonds, shall be considered as a part of the cost of the Project and shall be paid out of the proceeds of the 1998 Bonds. Section 9. Disposition of Proceeds of the 1998 Bonds: Citv of South Bend. 1998 Sewage Works Construction Account. The proceeds from the sale of the 1998 Bonds shall be deposited and applied as follows: (a) The accrued interest and any premium received at the time of delivery of the 1998 Bonds or any unused discount shall be deposited in the Sewage Works Sinking Fund continued by the 1998 Ordinance. (b) The remaining proceeds from the sale of the 1998 Bonds shall be deposited in a bank or banks which are legally qualified depositories for the funds of the City, in the special account to be designated as "City of South Bend, 1998 Sewage Works Construction Account" (the "Construction Account"). Amounts in the Construction Account -16- ::ODMA\PCDOCS\SBDOCS 1 \ 1494'7\3 shall be expended only for the purpose of paying the costs of the Project, as described in the Ordinance and in the Act, together with all authorized costs relating thereto, including the costs of issuance of the 1998 Bonds, and as otherwise permitted or required by the Act. Any balance or balances remaining unexpended in the Construction Account after completion of the Project, which are not required to meet unpaid obligations incurred in connection with the acquisition, construction or installation of the Project, shall be used solely for one or more of the purposes permitted under the provisions of Indiana Code 5-1-13, as amended. Pursuant to the Act, the owners of the 1998 Bonds shall be entitled to a lien on the proceeds of the 1998 Bonds until such proceeds are applied as required by this Ordinance and by Indiana law. With respect to any 1998 Bonds sold to the Bond Bank or the State, to the extent that the total principal amount of the 1998 Bonds is not paid by the purchaser or drawn down by the City, the City shall reduce the principal amounts of the 1998 Bond maturities to effect such reduction in a manner that will still achieve as level annual debt service as practicable pursuant to the provisions of Section 3 of this Ordinance. Section 10. Segrreg_ation and Application of Sewage Works Revenues. 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, created under the 1993 Bond Ordinance and continued hereby, and 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, the principal and interest of all bonds and fiscal agency charges of bank paying agents 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 Operation and Maintenance Fund, created under the 1993 Bond 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 the moneys in such fund shall be used for depreciation, -17- :ODMA\PCDOCS\SBDOCS 1 U 49473 replacements, improvements, extensions or additions. Any balance in said fund in excess of the expected expenses of operation, repair and maintenance for the next succeeding month may be transferred to the Sewage Works Sinking Fund referred to below if necessary to prevent a default in the payment of principal or interest on outstanding bonds. Section 11. Sewage Works Sinking Fund. There shall be deposited from the Revenue Fund into the "Sewage Works Sinking Fund," created under the 1993 Bond 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 chazges in connection with the payment of such bonds and interest thereon, a sufficient amount of the net revenues of said Sewage Works (defined as gross revenues of the sewage works after deduction only for the payment of the reasonable expenses of operation, repair and maintenance) to meet the requirements of the Bond and Interest Account and the Debt Service Reserve Account each created under the 1993 Bond Ordinance and continued hereby, in said Sewage Works 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 of the then outstanding bonds to the final maturity thereof. (a) Bond and Interest Account. Beginning with the first calendar month following the date of issuance of the 1998 Bonds herein authorized, there shall be credited on the first day of each calendaz month to the Bond and Interest Account an amount equal to the sum of one-sixth (1/6) of the interest on all then outstanding bonds payable during the then next succeeding six calendaz months and one-twelfth (1/12) of the principal on all then outstanding bonds payable during the then next succeeding twelve calendar months; provided that such fractional amounts shall be appropriately increased, if necessary, to provide for the first interest and first principal payments. There shall similazly be credited to the account the amount necessazy to pay the bank fiscal agency chazges, if any, for paying principal and interest on the bonds as the same become payable. The City shall, from the sums deposited in the Sewage Works Sinking Fund and credited to the Bond and Interest Account, remit promptly to the bank fiscal agency sufficient moneys to pay the principal and interest on the due dates thereof together with the amount of any bank fiscal agency chazges. -18- ::ODMA\PCDOCS\SBDOCS 1 \ 14947\3 (b) Debt Service Reserve Account. 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 an amount which will produce, in equal monthly installments over atwenty-four (24) month period, an amount 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 net revenues of the Sewage Works, or (iii) ten percent (10%) of the proceeds of all bonds payable from the net revenues of the Sewage Works, plus a minor portion thereof as defined in the Internal Revenue Code of 1986, as amended (the "Code") (the "Debt Service Reserve Requirement"). Said credits to the Debt Service Reserve Account shall continue until the balance therein shall equal the Debt Service 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 the moneys in the Debt Service Reserve Account shall be used to pay current principal 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 the credits into the Bond and Interest Account hereinbefore provided for. Any moneys in the Debt Service Reserve Account in excess of the Debt Service Reserve Requirement shall be transferred to the Sewage Works Improvement Fund, and in no event shall such excess moneys be held in the Debt Service Reserve Account. Section 12. Sewage Works Improvement Fund. On the first day of each calendar month after the 1998 Bonds are issued, after meeting the requirements for operation, repair, and maintenance, and the Sewage Works Sinking Fund, all available net revenues shall be credited to the fund created under the 1993 Bond Ordinance and continued hereby, and designated as the "Sewage Works Improvement Fund". 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 Sewage Works Sinking Fund if necessary to prevent a default in the payment of principal and interest on the then outstanding bonds or if necessary to eliminate any -19- ::ODMA\PCDOCS\SBDOCS ri 14947\3 deficiencies in credits to or minimum balance in the Debt Service Reserve Account of the Sewage Works Sinking Fund. Section 13. Books of Record and Accounts. The City shall keep proper books of record and accounts, separate from all of its other records and accounts, in which completed and correct entries shall be made showing all revenues collected from said works and deposited in said funds, and all disbursements made therefrom on account of the operation of the works, and to meet the requirements of the Sewage Works Sinking Fund, and all other financial transactions relating to said works. There shall be prepared and furnished to the original purchaser of the 1998 Bonds, and, upon written request, to any owner of the 1998 Bonds at the time then outstanding, not more than one hundred twenty (120) days after the close of each fiscal year, complete financial statements of the works, covering the preceding fiscal year, which annual statements shall be certified by the Controller, or by licensed independent public accountants employed for that purpose. Copies of all such statements and reports shall be kept on file in the office of the Controller. Any owner or owners of the 1998 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. If the 1998 Bonds are sold to the Bond Bank or the State, the City shall establish and maintain the books and other financial records of the Project (inchzding the establishment of a separate account or subaccount for the Project) and the Sewage Works in accordance with (i) generally accepted accounting standards for utilities, on an accrual basis, as promulgated by the Government Accounting Standards Board, and (ii) the rules, regulations, and guidance of the State Board of Accounts. Section 14. Rates and Charges. The City covenants and agrees that it will establish and maintain just and equitable rates or charges for the use of and the services rendered by said 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 works system of the City, or that in any way uses or is served by such sewage works, at a level adequate to produce and maintain sufficient revenue (including user and other charges, fees, income, or revenues available to the City) to provide for the proper Operation and Maintenance (as defined in the Financial Assistance Agreement) of the works, to comply with and satisfy all covenants contained -20- ::ODMA\PCDOCS\SBDOCS 1 \ 1494'7\3 in this Ordinance and the Financial Assistance Agreement, and for the payment of the sums required to be paid into the Sewage Works Sinking Fund by the Act and this Ordinance. The City covenants and agrees that it will establish rates and charges in a manner which reflects a customer's fair share of the Sewage Works' capital costs and a customer's proportionate share of Operation and Maintenance. The fair share of the Sewage Works' capital costs shall be determined by the City. The proportionate shaze of Operation and Maintenance shall be based on the actual (or estimated) wastewater flow and loading contributed by a customer in relation to the total wastewater flow and loading contributed by all customers. 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 and Maintenance of the Sewage Works and the requirements of the Sewage Works Sinking Fund. The rates or charges so established shall apply to any and all use of such Sewage Works by and service rendered to the City and all departments thereof and shall be paid by the City as the charges accrue. Section 15. Defeasance. If, when the 1998 Bonds issued hereunder shall have become due and payable in accordance with their terms or shall have been duly called for redemption or irrevocable instructions to call the 1998 Bonds for redemption shall have been given, and the whole amount of the principal and the interest and the premium, if any, so due and payable upon all of the 1998 Bonds then outstanding shall be paid; or (i) sufficient moneys, or (ii) direct obligations of, or obligations the principal of and interest on which aze unconditionally guaranteed by, the United States of America, the principal of and the interest on which when due will provide sufficient moneys, or (iii) time certificates of deposit fully secured as to both principal and interest by obligations of the kind described in (ii) above of a bank or banks the principal of and interest on which when due will provide sufficient moneys, shall be held 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 1998 Bonds 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 also reserves the right to authorize and issue additional bonds, payable out of the net revenues of its Sewage 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 Sewage Works, subject to the following conditions: -21- ::ODMA\PCDOCS\SBDOCS 1\1494T3 (a) All required payments into the Sinking Fund shall have been made in accordance with the provisions of this Ordinance, and the interest on and principal of all bonds payable from the net revenues of the Sewage Works shall have been paid to date in accordance with the terms thereof. (b) The net revenues of the Sewage Works in the fiscal year immediately preceding the issuance of any such bonds ranking on a parity with the bonds authorized by this Ordinance 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 sufficiently so that said increased rates and charges 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 nationally recognized firm of professionals experienced in analyzing financial records of municipal utilities retained by the City for that purpose. (c) The principal of said additional parity bonds shall be payable on December 1 and the interest on said additional parity bonds shall be payable semiannually on December 1 and June 1 in the years in which such principal and interest are payable. (d) If the 1998 Bonds are sold to the Bond Bank or the State, (i) the City has obtained the consent of the State, (ii) the City has faithfully performed and is in compliance with each of its obligations, agreements, and covenants contained in the Financial Assistance Agreement and this Ordinance, and (iii) the City is in compliance with its National Pollutant Discharge Elimination System permits, except for non-compliance, if any, for which the 1998 Bonds are issued, including refunding bonds issued prior to, but part of the overall plan to eliminate such non-compliance. Section 17. Additional Covenants of the Citv. For the purpose of further safeguarding the interests of the owners of the 1998 Bonds herein authorized, it is specifically provided as follows: -22- ODMA\PCDOCS\SBDOCS 1\1494'T3 (a) All contracts let by the City in connection with the construction of said additions and improvements to the Sewage Works shall be let after due advertisement as required by the laws of the State of Indiana, and all contractors shall be required to furnish surety bonds in an amount equal to one hundred percent (100%) of the amount of such contracts, to insure the completion of said contracts in accordance with their terms, and such contractors shall also be required to carry such employers liability and public liability insurance as are required under the laws of the State of Indiana in the case of public contracts, and shall be governed in all respects by the laws of the State of Indiana relating to public contracts. (b) Said additions and improvements shall be constructed under the supervision and subject to the approval of the Consulting Engineers or such other competent engineer as shall be designated by the Board. All estimates for work done or material furnished shall first be checked by the Consulting Engineers and approved by the Board. (c) 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. (d) So long as any of the 1998 Bonds herein authorized are outstanding, the City shall maintain insurance coverage (which must be acceptable to the State if the State owns the 1998 Bonds), including fidelity bonds, to protect the sewage works and its operations on the insurable parts of said Sewage 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. Insurance proceeds and condemnation awards shall be used to replace or repair the properly, or, if not used for that purpose, shall be treated and applied as net revenues of the sewage works (or such use as consented to by the State if the State owns the 1998 Bonds). (e) So long as any of the 1998 Bonds are outstanding, the City shall not mortgage, pledge or otherwise encumber such sewage works, or any part thereof, nor shall it sell, lease or otherwise dispose of any portion thereof except replace equipment which may become worn out or obsolete, without the prior written consent of the State if the 1998 Bonds are sold to the State. -23- ::ODMA\PCDOCS\SBDOCS 1\14947\3 (f) If the 1998 Bonds are sold to the Bond Bank or the State, the City shall not borrow any money, enter into any contract or agreement or incur any other liabilities in connection with the Sewage Works, other than for normal operating expenditures, without the prior written consent of the State if such undertaking would involve, commit, or use the revenues of the Sewage Works. (g) Except as hereinbefore provided in Section 16 hereof, so long as any of the bonds herein authorized are outstanding, no additional bonds or other obligations pledging any portion of the revenues of said Sewage Works shall be authorized, executed or issued by the City except such as shall be made subordinate and junior in all respects to the bonds herein authorized, unless all of the bonds herein authorized are redeemed, retired or defeased pursuant to Section 15 hereof coincidentally with the delivery of such additional bonds or other obligations. (h) 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 said Sewage Works. (i) The provisions of this Ordinance shall constitute a contract by and between the City and the owners of the sewage works revenue bonds herein authorized, and after the issuance of said bonds, this Ordinance shall not be repealed or amended in any respect which will adversely affect the rights of the owners of said 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 remains unpaid. (j) The provisions of this Ordinance shall be construed to create a trust in the proceeds of the sale of the bonds herein authorized for the uses and purposes herein set forth, and the owners of the bonds shall retain a lien on such respective proceeds until the same are applied in accordance with the provisions of this Ordinance and of the Act. 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 Sewage Works Sinking Fund for the uses and purposes of said fund as in this Ordinance set forth. The owner of said bonds shall have all of the rights, remedies and privileges set forth in the provisions of the Act, -24- ODMA\PCDOCS\SBDOCS 1\1494713 including the right to have a receiver appointed to administer said Sewage Works in the event of default in the payment or the principal of or interest on any of the bonds herein authorized or in the event of default in respect to any of the provisions of this Ordinance or the Act. The Common Council reserves the right, however, to amend this Ordinance from time to time to preserve the Tax Exemption described in Section 19 hereof without the approval of any owner of the bonds so long as the Common Council certifies that such amendment does not violate subsection (i) of Section 17; provided, however, that if the 1998 Bonds are sold to the Bond Bank, the City shall obtain the prior written consent of the State. Section 1 Permitted Actions Relating to Preservation of Exclusion of Interest from Federal Gross Income. (a) The Controller is hereby authorized to invest moneys pursuant to the provisions of this Ordinance at a restricted yield (subject to applicable requirements of federal law to insure that any such investment is acquired for fair mazket value) to the extent necessary or advisable to preserve the exclusion from gross income of interest on the 1998 Bonds, or the tax exempt status of interest on the 1998 Bonds, under federal law. (b) The Controller shall keep full and accurate records of investment earnings and income from moneys held in the funds and accounts created or referenced herein. In order to comply with the provisions of this Ordinance, the Controller is hereby authorized and directed to employ consultants or attorneys from time to time to advise the City as to requirements of federal law to preserve the tax exclusion or exemption. Section 19. Tax Covenants. In order to preserve the exclusion of interest on the 1998 Bonds from gross income for federal income tax purposes and as an inducement to purchasers of the 1998 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 1998 Bonds or property financed by the 1998 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 the 1998 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 -25- ::ODMA\PCDOCS\SBDOCS 1 U 49473 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 1998 Bond proceeds will be loaned to any entity or person. No 1998 Bond proceeds will be transferred, directly or indirectly, or deemed transferred to a nongovernmental person in any manner that would in substance constitute a loan of the 1998 Bond proceeds. (c) The City will not take, or cause to permit to be taken by it or by any party under its control, or fail to take or cause or permit to fail to be taken by it or by any party under its control, any action with respect to the 1998 Bonds that would result in the loss of the exclusion from gross income for federal income tax purposes of interest on the 1998 Bonds pursuant to Section 103 of the Code, nor will the City act in any other manner which would adversely affect such exclusion. The City further covenants that it will not make any investment or do any other act or thing during the period that any 1998 Bond is outstanding hereunder which would cause any 1998 Bond to bean "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 1998 Bonds. (d) The City will, to the extent necessary to preserve the exclusion of interest on the 1998 Bonds from gross income for federal income tax purposes, rebate all required arbitrage profits on 1998 Bond proceeds or other moneys treated as 1998 Bond proceeds to the federal government and will set aside such moneys in a Rebate Account to be held by the Controller in trust for such purpose. Section 20. Compliance with Tax Sections. Notwithstanding any other provisions of this Ordinance, the covenants and authorizations contained in this Ordinance ("Tax Sections") which are designed to preserve the tax exempt status of interest on the 1998 Bonds or the exclusion of interest on the 1998 Bonds from gross income under federal law ("Tax Exemption") need not be complied with if the City receives an opinion of nationally recognized bond counsel that any Tax Section is unnecessary to preserve the Tax Exemption. Section 21. Supplemental Ordinances. Subject to the terms and provisions contained in this Section, and not otherwise, the owners of not less than sixty-six and two-thirds percent (66- 2/3%) in aggregate principal amount of the bonds issued pursuant to this Ordinance and then -26- :ODMA\PCDOCS\SBDOCS 1\1494T3 outstanding shall have the right, from time to time, anything contained in this Ordinance to the contrary notwithstanding, to consent 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 if the 1998 Bonds are sold to the Bond Bank or the State, the City shall obtain the prior written consent of the State; and provided, further, that nothing herein contained shall permit or be construed as permitting: (a) An extension of the maturity of the principal of or interest on any bond issued pursuant to this Ordinance; or (b) A reduction in the principal amount of any bond or the redemption premium or the rate of interest thereon; or (c) The creation of a lien upon or a pledge of the net revenues of the sewage works ranking prior to the pledge thereof created by this Ordinance; or (d) A preference or priority of any bond or bonds issued pursuant to this Ordinance over any other bond or bonds issued pursuant to the provisions of this Ordinance; or (e) A reduction in the aggregate principal amount of the bonds required for consent to such supplemental ordinance. The owners of not less than sixty-six and two-thirds percent (66-2/3%) in aggregate principal amount of the bonds outstanding at the time of adoption of such supplemental ordinance shall have consented to and approved the adoption thereof by written instrument to be maintained on file in the office of the Controller of the City. No owner of any bond issued pursuant to this Ordinance 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 bonds issued pursuant to -27- ::ODMA\PCDOCS\SBDOCS 1 \ i 494713 the provisions of this Ordinance then outstanding, shall thereafter be determined, exercised and enforced in accordance with this Ordinance, subject in all respects to such modifications and amendments. Notwithstanding anything contained in the foregoing provisions of this Ordinance, the rights and obligations of the City and of the owners of the bonds authorized by this Ordinance, and the terms and provisions of the 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 bonds issued pursuant to this Ordinance then outstanding. Notwithstanding anything in this Section 21 of this Ordinance, as to any series of 1998 Bonds sold to the State pursuant to Section 8 of this Ordinance, no supplemental ordinance shall be adopted unless consented to in writing by the State. Section 22. Repeal of Conflicting Ordinances.. All ordinances and parts of ordinances in conflict herewith are hereby repealed. Section 23. Rates and Charges. The estimate of rates and charges which will be needed and charged to the general classes of users of property to be served by the Sewage Works in order to provide sufficient moneys to make payments of principal of and interest on the 1998 Bonds, along with the other payments identified in this Ordinance, is set forth in Ordinance No. 7942-88 adopted December 28, 1988. Section 24. Notice of Adoption and Purport of Ordinance. Upon passage of this Ordinance, the Clerk of the City shall immediately cause to be published in accordance with Indiana Code 5-3-1 a notice of the adoption and the purport of this Ordinance in accordance with Section 10 of the Act with respect to the Project. In the event an objecting petition is filed in accordance with Section 12 of the Act, no further proceedings shall be taken by the City relating to the Project until the later of (i) the date on which the court having jurisdiction over such matter confirms the decision of the City to issue bonds relating to the Project, or (ii) if an appeal is taken, the date on which the appropriate court of last resort confirms the decision of the City to issue bonds relating to the Project, except as permitted by Subsection 12(f) of the Act. Section 25. PaXments on Holidavs. 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 and Paying Agent is located are typically closed, such payment may be made or act performed or right -28- ::ODMA\PCDOCS\SBDOCS I \ 14947\3 exercised on the next succeeding day not a legal holiday or a day on which such banking institutions are typically closed, with the same force and effect as if done on the nominal date provided in this Ordinance, and no interest shall accrue for the period after such nominal date. Notwithstanding the foregoing, with respect to any series of 1998 Bonds sold to the State pursuant to Section 8 of this Ordinance, if the date for making any payment is a day when financial institutions are not open for business, such payment shall be made on the business day immediately preceding such payment date. Section 26. Captions. The captions in this Ordinance are inserted only as a matter of convenience and reference, and such captions are not intended and shall not be construed to define, limit, establish, interpret or describe the scope, intent or effect of any provision of this Ordinance. Section 27. Effectiveness. This Ordinance shall be in full force and effect from and after its passage by the Common Council and approval by the Mayor. COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA By: Member of the Common Council 1st READING (p ~~~ PUBLIC HcARING ~p-a~-~~ 3rd r'.i:ADiNG ~_ ~ a _ Cf ttiOT APPROVED REr-~~RED PASSED ~- ~~- ::ODMA\PCDOCS\SBDOCS 1 \ 1494T3 -29- t~~C~ ill ~~£~~~~~ ®~~I~~ ~TVLO#~%1TE~ Jff DUDl: C.11 i \iLC~l~e .fit y. ToS:l'4L~~7 J. COMNIITEE REPORT TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Commitee of the Whole, to whom was referred: BILL NO. 51-98 A BILL OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE ACQUISITION, CONSTRUCTION AND INSTALLATION OF CERTAIN IMPROVEMENTS AND EXTENSIONS TO THE CITY'S SEWAGE WORKS, THE ISSUANCE AND SALE OF ADDITIONAL REVENUE BONDS TO PROVIDE FUNDS FOR THE PAYMENT OF THE COSTS THEREOF, AND THE COLLECTION, SEGREGATION AND DISTRIBUTION OF THE REVENUES OF SUCH SEWAGE WORKS AND OTHER RELATED MATTERS Respectfully report that they have examined the matter and that in their opinion, this bill has been recommended to the Council favorably. John Broden Chairman