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HomeMy WebLinkAbout1999-OR-69ORDINANCE NO. 99-0R-69 AN ORDINANCE TO AMEND ORDINANCE NO. 98-OR-75 CONCERNINQ THE CONSTRUCTION OF ADDITIONS AND IMPROVEMENTS TO THE SEWAGE WORKS OF THE CITY OF JEFFERSONVILLE; AUTHORIZING THE ISSUANCE OF SEWAGE WORKS REVENUE BONDS, FOR SUCH PURPOSE; ADDRESSING OTHER MATTERS CONNECTED THEREWITH, INCLUDING THE ISSUANCE OF NOTES IN ANTICIPATION OF BONDS; AND REPEALING ORDINANCES INCONSISTENT HEREWITH WHEREAS, the City of Jeffersonville, Indiana (the "City") has heretofore established, constructed and financed a municipal sewage works and now owns and operates the sewage works pursuant to I.C. 36-9-23, and other applicable laws; and WHEREAS, the Common Council of the City (the "Common Council") has heretofore passed Ordinance No. 98-OR-75, adopted December 15, 1998 (the "1998 Ordinance") authorizing the issuance of bonds, in one or more series, in an amount not to exceed $15,500,000; and WHEREAS, the City has issued its Sewage Works Revenue Bonds, Series 1998, pursuant to the 1998 Ordinance in the amount of $6,445,000, dated December 1, 1998 (the "1998 Bonds"); and WHEREAS, the City has applied for and received funding from the State's Wastewater Revolving Loan Program (the "SRF Program") as set forth in the 1998 Ordinance; and WHEREAS, the SRF Program has requested certain changes in the language of the 199~ Ordinance, applicable to the bonds not yet issued under the 1998 Ordinance; and WHEREAS, the 1998 Ordinance provides that the Common Council may amend such ordinances if the amendment does not adversely impact the interests of the holders of the 1998 Bonds; and WHEREAS, the Common Council now finds it necessary to amend the 1998 Ordinance to incorporate language consistent with the SRF Program, and further finds that such amendment does not adversely affect the rights of the holders of the 1998 Bonds. NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF JEFFERSONVILLE, INDIANA THAT: Section 1. The 1998 Ordinance is hereby amended to include the following language ant provide for the issuance of the Sewage Works Revenue Bonds, Series 1999 (the "1999 Bonds"). Unless otherwise clear by context in which it is used, each reference to a) "Bond" in the 1998 Ordinance, as amended herein, shall be deemed to refer to the 1998 Bonds and the 1999 Bonds, and b) "bonds" in the 1998 Ordinance, as amended herein, shall be deemed to be a reference to the Senior Bonds, the 1995 Bonds, the 1998 Bonds and the 1999 Bonds. Section 2. Section 2 (b), paragraph one of the 1998 Ordinance, after "Revenue Bonds" delete the language "of 199__"; paragraph two of the 1998 Ordinance is amended by inserting the following language prior to the period (".") "taking into consideration the Senior Bonds, the 1995 Bonds and the 1998 Bonds". The amended Section, in its entirety, shall read: "[2] (b) The City shall issue its "Sewage Works Revenue Bonds, Series _" (the "Bonds"), in one or more series, in an aggregate principal amount not to exceed $15,500,000, in substantially the amounts and maturities as set forth in Exhibit B, for the purpose of procuring funds to be applied to the costs of the Project, and the payment of costs of issuance. The Bonds shall rank on a parity for all purposes with the 1995 Bonds and junior to the Senior Bonds. The Bonds shall be issued in the denomination of One Dollar ($1) each or integral multiples thereof, numbered consecutively from 1 upward, dated as of the first day of the month in which they are sold and interest shall be payable semiarmually on January 1 and July 1 in each year, beginnin~ on January 1 or July 1 following the original date of the Bonds as determined by the Clerk-Treasurer, 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 of Indiana (the "Financial Assistance Agreement"), or in the bond sale notice if the Bonds are sold to any other purchaser. The Bonds shall be sold at a price of not less than 99.0% of par value, unless sold to the Indiana Bond Bank, in which case such price shall not be less than 97.0% of the par value thereof(the "Sale Price"), The Bonds shall be payable in lawful money of the United States of America, at the principal office of the Paying Agenl (as hereinafter defined) and such Bonds shall bear interest at a rate or rates not exceeding 7.5% per annum unless sold to the State of Indiana through the State Revolving Loan Fund, in which case the Bonds shall bear interest at a rate or rates not exceeding 3.9% per annum (the exact rate or rates to be determined by bidding or through negotiations with the State of Indiana or the Indiana Bond Bank). The Bonds will mature, January 1 of each year thereafter over a period ending no later than twenty (20) years after substantial completion of the Project if sold to the State of Indiana, or from January 1, 2000 if sold to the public, in such amounts which will achieve as level debt service as practicable, taking into consideration the Senior Bonds, the 1995 Bonds and the 1998 Bonds. Interest on the BANs and the bonds shall be calculated according to a 360-day calendar yem containing twelve 30-day months. The Bonds of this issue may be issued in the form of term bonds in the amounts and maturities as approved by the Clerk-Treasurer upon advice of the financial advisor. If the term bonds are issued they will be subject to mandatory sinking fund redemption in the years and amounts se' forth elsewhere in the Ordinance." -2- Section 3. Section 2(c) paragraph one, of the 1998 Ordinances is amended by deleting the term "sewage fee revenues"and inserting the term "Net Revenues". The revised Section 2(c), in its entirety, shall read: "[2] (c) The City shall complete the Project from the proceeds of the BANs or Bonds issued by the City, with the principal and interest of the BANs payable from the proceeds of the · ' · ' it " Bonds and the pnnc~pal and mterest on the Bonds payable from Net Revenues received by the C Y. Section 4. Section 6, Form of Bond, of the 1998 Ordinance is amended to add the following Form of Bonds for Series 1999. The additional Form of Bond, in its entirety, shall read: STATE OF INDIANA UNITED STATES OF AMERICA COUNTY OF CLARK CITY OF JEFFERSONVILLE SEWAGE WORKS REVENUE BOND, SERIES 1999 Interest Original Authentication Rate Date Date REGISTERED OWNER: Indiana Bond Bank PRINCIPAL SUM: Dollars ($ The City of Jeffersonville, in Clark County, State of Indiana, for value received, hereb promises to pay to the Registered Owner named above or registered assigns, solely out of the speci; revenue fund hereinafter referred to, the Principal Sum set forth above On January 1 in the years and in the amounts as set forth on Exhibit A, attached hereto or so much thereof as may be advanced from time to time and be outstanding as evidenced by the records of the registered owner making payment for this Bond, or its assigns (unless this bond be subject to and be called for redemption prior to maturity as hereinafter provided), and to pay interest hereon at the Interest Rate per annum stated above from ,.__ which interest is payable semiannually on the first days ot January and July in each year, beginning on July 1,2000. Interest shall be calculated based on a 36~ day year containing twelve 30 days months. The principal of this bond is payable at the principal office of Clerk-Treasurer (the "Registrar", or "Paying Agent"), in the City of Jeffersonville, Indiana. All payments of interest o~ this bond shall be paid by check, mailed one business day pr/or to the interest payment date or, i~ -3- the event ofpurehase by the State of Indiana or the Indiana Bond Bank or such owner in whose nam{ is registered $1,000,000 or more principal mount of the Bonds by wire transfer for deposit to a financial institution as designated by the state of Indiana or the Indiana Bond Bank or such registered owner on the due date or, if such due date is a day when financial institutions are not open for business, on the business day immediately after such due date, to the registered owner hereof as of the fifteenth day of the month preceding such interest payment date at the address as it appears on the registration books kept by the Registrar or at such other address as is provided to the Paying Agent in writing by the registered owner. All payments on the bond shall be made in any coin or currency of the United States of America, which on the dates of such payment, shall be legal tender for the payment of public and private debts. THE CITY SHALL NOT BE OBLIGATED TO PAY THIS BOND OR THE INTEREST HEREON EXCEPT FROM THE HEREINAFTER DESCRIBED SPECIAL FUND, AND NEITHER THIS BOND NOR THE IS SUE 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 terms and provisions of this bond are continued on the reverse side hereof and such terms and provisions shall for all purposes have the same effect as though fully set forth at this place. It is hereby certified and recited that all acts, conditions and things required to be done precedent to and in the execution, issuance and delivery of this bond have been done and performed in regular and due form as provided by law. This bond shall not be valid or become obligatory for any purpose until the certificate ot authentication hereon shall have been executed by an authorized representative of the Registrar. This bond is one of an authorized issue of bonds of the City of Jeffersonville, issued in series o£ like date, tenor and effect, except as to rates of interest and dates of maturity; aggregating Million __ Hundred Thousand Dollars ($. ), numbered consecutively fi'om R-1 upward (the "Bonds"), issued for the purpose of providing funds to be applied on the cost of additions and improvements to the City's sewage works (the "Project") to refund interim notes, if any, issued in anticipation of the Bonds and to pay costs of issuance of the Bonds. This bond is issued pursuant to Ordinance No. 98-OR-75 adopted by the Common Council of said City on the 15th day ot December, 1998, entitled "An Ordinance concerning the construction of additions and improvements to the sewage works of the City of Jeffersonville, authorizing the issuance of Sewage Works Revenue Bonds of 1998, for such purpose; addressing other matters connected therewith, includin~ the issuance of notes in anticipation of bonds; and repealing ordinances inconsistent herewith" as amended by Ordinance No. 99-OR-69, adopted by the Common Council on December 13, 1999 (collectively, the "Ordinance"), and in accordance with the provisions of Indiana law, including without limitation Indiana Code 36-9-23, as amended (the "Act"), the proceeds of which bonds are to be applied to the costs of the Project, the payment of notes issued in anticipation of the bonds, any, and expenses incurred in connection therewith. -4- Reference is hereby made to the Financial Assistance Agreement between the City and th State of Indiana as to certain terms and covenants pertaining to the sewage works project and this Bond (the "Financial Assistance Agreement") Pursuant to the provisions of the Act and the Ordinanqe, the principal of and interest on this bond and all other bonds of said issue, the Senior Bonds (as hereinafter defined), the 1995 Bonds (as hereinafter defined) and any bonds hereafter issued on a parity therewith are payable solely from the Sewage Works Sinking Fund (the "Sinking Fund") continued by the 1995 Ordinance (as defined in the Ordinance) and maintained under the Ordinance to be provided from the Net Revenues (herein defined as the gross revenues of the sewage works of the City remaining after the payment of the reasonable expenses of operation, repair and maintenance) of the sewage works of the City, including all additions and improvements thereto and replacements thereo fsubsequently constructed or acquired. The City irrevocably pledges the entire Net Revenues of the sewage works to the prompt payment of the principal of and interest on the bonds authorized by the Ordinance, of which this is one, and any bonds ranking on a parity therewith, after payment of the Sewage Works Refunding Revenue Bonds of 1990, Series A (the "Series A Bonds"), the Sewage Works Revenue Bonds of 1990, Series B(the "Series B Bonds") and the Sewage Works Revenue Bonds, Series C (the "Series C Bonds") (the Series A Bonds, the Series B Bonds and the Series C Bonds, collectively the "Senior Bonds") and on parity with the Sewage Works Revenue Bonds of 1995 (the "1995 Bonds") issued pursuant to the 1995 Ordinance (as defined in the Ordinance), and covenants that it will cause to be fixed, maintained and collected such rates and charges for services rendered by the utility as are sufficient in each year for the payment of the proper and reasonable expenses of Operation and Maintenance (as defined in the Financial Assistance Agreement) of the sewage works and for the payment of the sums required to be paid into the Sinking Fund under the provisions of the Act and the Ordinance. If the City or the proper officers thereof shall fail or refuse to so fix, maintain and collect such rates or charges, or if there be a default in the payment of the interest on or principal o~ this bond, the owner of this bond shall have all of the rights and remedies provided for in the Act, including the right to have a receiver appointed to administer the works and to charge and collect rates sufficient to provide for the payment of this bond and the interest hereon. The City further covenants that it will set aside and pay into the Sinking Fund a sufficient amount of the Net Revenues of the works for payment of (a) the principal and interest on all bonds which by their terms are payable from the revenues or the sewage works, as such principal and interest shall fall due, (b) the necessary fiscal agency charges for paying bonds and interest, and (c) an additional amount to accumulate and maintain a reserve for the payment of the bonds equal to the Reserve Requirement, which is equal to the least of (i) the maximum annual debt service on the bonds, (ii) 125% of the average annual debt service on the bonds, and (iii) 10% of the stated principal amount of the bonds. Such required payments shall constitute a ftrst charge upon all the Net Revenues of the sewage works. Reference is made to the Ordinance for a more complete statement of the revenues from which and conditions under which this bond is payable, a statemenl of the conditions on which obligations may hereafter be issued on parity with this bond, the manne~ -5- in which the Ordinance may be amended and the general covenants and provisions pursuant to which this bond has been issued. The bonds of this issue maturing on and after January 1,2011 are redeemable at the option of the City on January 1, 2010, or any date thereafter, on sixty (60) days' notice, in whole or in part, in inverse order of maturity and by lot within a maturity, at face value, together with the following premiums: 2% if redeemed on January 1, 2010 or thereafter; on or before December 31, 2010, 1% if redeemed on January 1,2011} or thereafter on or before December 31,2011; 0% if redeemed on January 1, 2012, or thereafter prior to maturity; plus accrued interest to the date fixed for redemption. If less than all of the bonds are called for redemption at one time, the bonds shall be redeemed in inverse order of maturity and by lot within a maturity. Each One Dollar ($1) principal amount shall be considered a separate bond for purposes of redemption. Notice of such redemption shall be mailed to the address of the registered owners of the bonds to be redeemed as shown on the registration records of the City, as of the date which is seventy-five (75) days prior to such redemption date, not less than sixty (60) days prior to the date fixed for redemption unless the notice is waived by the registered owner of this bond. The notice shall specify the date and place of redemption and sufficient identification of the bonds called for redemption. The place of redemption may be determined by the City. Interest on the bonds so called for redemption shall cease 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 date so named. If this bond shall not be presented for payment or redemption on the date fixed therefor, the City may deposit in trust with its depository bank, an amount sufficient to pay such bond or the redemption price, as the case may be, and thereafter the registered owner shall look only to the ftmds so deposited in trust with said bank for payment and the City shall have no further obligation or liability in respect thereto. This bond is transferable or exchangeable only upon the books of the City kept for that purpose at.the principal corporate trust office of the Registrar by the registered owner hereof in person, or by his attorney duly authorized in writing, upon surrender of this bond together with a written instrument of transfer or exchange satisfactory to the Registrar duly executed by the registered owner, or his attorney duly authorized in writing, and thereupon a new fully registered bond or bonds in an authorized aggregate principal amount and of the same maturity, shall be executed and delivered in the name of the transferee or to the registered owner, as the case may -6- be, in exchange therefor. This bond may be transferred without cost to the registered owner except for any tax or governmental charge required to be paid with respect to the transfer. The City, the Registrar, the Paying Agent and any other registrar or paying agent for this bond may treat and consider the person in whose name this bond is registered as the absolute owner hereof for all purposes including for the purpose of receiving payment of, or on account of, the principal hereof and interest due thereon. This bond is subject to defeasance prior to redemption or payment as provided in the Ordinance referred to herein. THE OWNER OF THIS BOND, BY THE ACCEPTANCE HEREOF, HEREBY AGREES TO ALL THE TERMS AND PROVISIONS CONTAINED IN THE ORDINANCE. Under certain circumstances, the Ordinance may be amended without the consent of the owners of the bonds as provided in the Ordinance if the Common Council determines, in its sole discretion, that the amendment shall not adversely affect the rights oi any of the owners of the bonds. The bonds maturing in any one year are issuable only in fully registered form in the denomination of $1 or any integral multiple thereof. -7- 1N WITNESS WHEREOF, the City of Jeffersonville, in Clark County, Indiana, has caused this bond to be executed in its corporate name by the manual or facsimile signature of the Mayor, its corporate seal to be hereunto affixed, imprinted or impressed by any means and attested manually or by facsimile by its Clerk-Treasurer. CITY OF JEFFERSONVILLE, INDIANA By Mayor [SEAL] Attest: Clerk-Treasurer REGISTRAR'S CERTIFICATE OF AUTHENTICATION This bond is one of the bonds described in the within-mentioned Ordinance. as Registrar By Authorized Representative The following abbreviatiOns, when used in the inscription of the face of this bond, shall be construed as through they were written out in full according to applicable laws or regulations: TEN. COM. as tenants in common TEN. ENT. as tenants by the entireties JT. TEN. as joint tenants with right of survivorship and not as tenants in common -8- UNIF. TRAN. MIN. ACT Custodian (Cust.) (Minor) under Uniform Transfer to Minors Act of (State) Additional abbreviations may also be used although not in the above list. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto__ this bond and all rights thereunder, and hereby irrevocably constitutes and appoints , attorney, to transfer the within bond in the books kept for the registration thereof with full power of substitution in the premises. Dated: NOTICE: The Signature to this assignment must correspond with the name as it appears on the face of the within bond in every particular, without alteration or enlargement or any change whatsoever. NOTICE: Signature(s) must be guaranteed by an eligible guarantor participating in a Securities Transfer Association recognized signature guarantee program. [END OF BOND FORM]" Section 5. Section 8, paragraph four, of the 1998 Ordinance is amended to capitalize the word "financing" in the first sentence. -9- Section 6. Section 9, paragraph one, of the 1998 Ordinance is amended by inserting after the term "Reserve Requirement" the following "except for those Bonds sold to the State of Indiana or the Indiana Bond Bank, which such proceeds cannot be used to fund the Reserve Requirement,". The amended section, in its entirety, shall read: "Section 9. Use of Proceeds and Costs of Issuance. The proceeds from the sale of the Bonds, to the extent not used to refund BANs issued pursuant to this Ordinance, or fund the Reserve Requirement, except for those Bonds sold to the State of Indiana or the Indiana Bond Bank, which proceeds cannot be used to fund the Reserve Requirement, and BAN proceeds shall be deposited in a bank or banks which are legally designated depositories for the funds of the City, in a special account or accounts to be designated as "City of Jeffersonville, Sewage Works Construction Fund" (the "Construction Fund") as established in this Ordinance. All funds deposited to the credit of the Sinking Fund (as hereafter defined) or Construction Fund shall be deposited, held, secured or invested in accordance with the laws of the State of Indiana relating to the depositing, holding, securing or investing of public funds, including particularly I C 5-13, and the acts amendatory thereof and supplemental thereto. The funds in the Construction Fund shall be expended only for the purpose of paying the cost of the Project, refunding the BANs, if issued, or as otherwise required by the Act or for the expenses of issuance of the Bonds. Any balance or balances remaining unexpended in such special fund or funds after completion of the Project, which are not required to meet unpaid obligations incurred in connection with such Project, shall either (1) be paid into the Sinking Fund and used solely for the purposes of the Sinking Fund or (2) be used for the same purpose or type of project for which the Bonds were originally issued, all in accordance with IC 5-1-13, as amended and supplemented. With respect to any Bonds sold to the State of Indiana or the Indiana Bond Bank to finance Eligible Costs, to the extent that the total principal amount of the Bonds is not paid by the purchaser or drawn down by the City, the City shall reduce the principal amount of the Bond maturities to effect such reduction in a manner that will still achieve as level an annual debt service as practicable as described in Section 2(b)." Section 7. Section 12, paragraph one, of the 1998 Ordinance is amended by inserting after "Bonds," the following language "after payment of the Senior Bonds and on parity with the Bonds of this issue" and by inserting after the "parity therewith" the language "including the 1995 Bonds". The amended section, in its entirety, shall read: "Section 12. Pledge of Net Revenues. The Bonds, after payment of the Senior Bonds and on parity with the Bonds of this issue and any bonds ranking on a parity therewith, including the 1995 Bonds, as to both principal and interest, shall be payable from and secured by an irrevocable pledge of and shall constitute a charge upon alt the Net Revenues (herein defined as -10- gross revenues after deduction only for the payment of the reasonable expenses of operation, repair and maintenance) of the sewage works of the City. The City shall not be obligated to pay the Bonds or the interest thereon except from the Net Revenues of the works, and the Bonds shall not constitute an indebtedness of the City or any municipal corporation or political subdivision of the State of Indiana within the meaning of the provisions and limitations of the constitution of the State of Indiana." Section 8. Section 13, paragraph one, of the 1998 Ordinance is amended by inserting after "continued" the word "by". The amended section, in its entirety, shall read: "[13] (b) Sewage Works Operation and Maintenance Fund. On the last day of each calendar month, revenues of the sewage works shall be transferred from the Revenue Fund to the Operation and Maintenance Fund continued by the 1995 Ordinance and herein (the "Operation and Maintenance Fund"). The balance maintained in this Operation and Maintenance Fund shall be sufficient to pay the expenses of operation, repair and maintenance for the then next succeeding two (2) calendar months. The moneys credited to this Operation and Maintenance 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 the Operation and Maintenance Fund shall be used for depreciation, replacements, improvements, extensions or additions. Any monies in the Operation and Maintenance Fund may be transferred to the Sewage Works Sinking Fund if necessary to prevent a default in the payment of principal of or interest on the outstanding bonds of the sewage works." Section 9. Section 13(c), paragraph one, of the 1998 Ordinance is amended by inserting after "defined" the language "and hereby continued from the 1995 Ordinance"; insertinl "the" before the words "principal of"; amending paragraph two and three by renumbering subsections (ii) and (iii) as (i) and (ii) respectively,; and amending paragraph three by striking the word "and" before the word "maintained"; inserting the words "and continued" after "maintained"; deleting the word "Bonds" from subsection (i) and inserting "Senior Bonds, the 1995 Bonds, the Bonds and any furore bonds issued on a parity therewith (the "Parity Bonds"); by inserting in subsection (ii) before the word "Bonds" the language "Senior Bonds, the 1995 Bonds, the" and inserting after the word "Bonds" the language "and any Parity Bonds"; and by inserting before the word "bonds" in subsection (iii) the language "Senior Bonds, the 1995 Bonds, the"; capitalizing the word "bonds") and inserting thereafter the language "and any Parit3 Bonds,"; and inserting the word "the" before the term "Reserve Requirement"). The amended section; in its entirety, shall read: "[I 3] (c) Sinking Fund. There is hereby continued a sinking fund, continued from the 1995 Ordinance and herein, for the payment of the principal of and interest on revenue bonds which by their terms are payable from the net revenues of the sewage works and the payment of any fiscal agency charges in connection with the payment of bonds, which fund shall be designated the "Sewage Works Sinking Fund" (herein, "Sewage Works Sinking Fund" or "Sinking Fund"). There shall be set aside and deposited in the Sewage Works Sinking Fund, as -11~ available, and as hereinafter provided, a sufficient mount of the Net Revenues of the sewage works to meet the requirements of the Bond and Interest Account (hereinafter defined and hereby contained from the 1995 Ordinance) and the Debt Service Reserve Account (hereinafter defined and hereby contained from the 1995 Ordinance) in the Sinking Fund. Such payments shall continue until the balances in the Bond and Interest Account and the Debt Service Reserve Account equal to the principal of and interest on all of the then outstanding bonds of the sewage works to their final maturity. (i) Bond and Interest Account. There shall be credited on the last day of each calendar month from the Revenue Fund to the Bond and Interest Account of the Sinking Fund herein established (the "Bond and Interest Account") an amount of the Net Revenues equal to (i) one-sixth (1/6) of the interest of all then outstanding bonds payable on the then next succeeding interest payment date and (ii) at least one-twelfth (1/12) of the principal on all then outstanding bonds payable on the then next succeeding respective interest and principal payment dates until the amount of the interest and principal payable on the next succeeding interest and principal payment dates shall have been so credited. There shall similarly be credited to the account any amount necessary to pay the bank fiscal agency charges for paying interest on outstanding bonds as the same become payable. The City shall, from the sums deposited in the Sinking Fund and credited to the Bond and Interest Account, remit promptly to the registered owner or to the bank fiscal agency sufficient moneys to pay the interest and principal on the due dates thereof together with the amount of bank fiscal agency charges. (ii) Debt Service Reserve Account. Funds representing the margin of safety for the Senior Bonds, the 1995 Bonds and the Bonds, established, maintained and continued pursuant to this Ordinance shall be deposited into the Debt Service Reserve Account of the Sinking Fund (the "Debt Service Reserve Account"). The initial deposit or the balance accumulated in the Debt Service Reserve Account shall not exceed the least of (i) the maximum annual debt service on the Senior Bonds, the 1995 Bonds, the Bonds and any future bonds issued on a parity therewith (the "Parity Bonds"), (ii) 125% of average annual debt service on the Seniox Bonds, the 1995 Bonds the Bonds and any Parity Bonds or (iii) 10% of the stated principal amount of the Senior Bonds, the 1995 Bonds, the Bonds and any Parity Bonds (the "Reserve Requirement"). The balance in the Debt Service Reserve Account, allocable to the bonds, shall never exceed the Reserve Requirement. If the initial balance in the Debt Service Reserve Account is less than the Reserve Requirement, an amount of Net Revenues shall be credited to the Debt Service Reserve Account on the last day of each calendar month until the balance therein equals the Reserve Requirement. The monthly deposits shall be equal in amount and sufficient to accumulate the Reserve Requirement within five (5) years of the date of delivery of the Bonds. The Debt Service Reserve Account shall constitute the margin for safety and 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. Any deficiency in the balance maintained in the Debt Service Reserve Account shall be made up from the next available Net Revenues remaining after credits into the Bond and Interest -12- Account. Any moneys in the Debt Service Reserve Account in excess of the Reserve Requirement shall either be transferred to the Sewage Works Improvement Fund or be used for the purchase of outstanding bonds or installments of principal of fully registered bonds." Section 10. Section 17(d), paragraph one, of the 1998 Ordinance is amended by deleting the language "time." and inserting the following language "a five year or shorter period." the amended section, in its entirety, shall read: "[17] (d) A debt service reserve for the additional parity bonds commensurate with and proportional to the reserve created for the Bonds shall be created and maintained. Such reserve may be funded from bond proceeds or by Net Revenues over a five year or shorter period." Section 11. Section 18 (b), paragraph two, of the 1998 Ordinance is amended by deleting the entire paragraph. Paragraph three is amended by deleting after the word "provides" the language "or self-insurance proceeds"; and delete the sentence beginning with "replacing" and insert the following language "to replace or repair the sewage works unless the State of Indiana consents to a different use of such proceeds or awards." The amended section, in its entirety, shall read: "[18] (b) So long as any of the Bonds and BANs are outstanding, the City shall maintain insurance on the insurable parts of said work, of a kind and in an amount acceptable to the State of Indiana, including fidelity bonds, such as would normally be carried by private corporations 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 shall be used to replace or repair the sewage works unless the State of Indiana consents to a different use of such proceeds or awards." Section 12. Section 27, paragraph one, of the 1998 Ordinance is amended by inserting after the words "following purposes" the following language, "provided, however, that if the Bonds or BANs are sold to the State of Indiana or the Indiana Bond Bank to finance Eligible Costs, the City shall obtain the prior written consent of the State of Indiana". The amended section, in its entirety, shall read: "Section27. Amendment of Ordinance without Consent of Bondholders. The Common Council may, from time to time, and without the consent of bondholders, adopt ordinances supplemental hereto (which supplemental ordinances shall thereafter form a part hereof) for any one or more of the following purposes, provided, however, that if the Bonds or BANs are sold to the State of Indiana or the Indiana Bond Bank to finance Eligible Costs, the City shall obtain the prior written consent of the State of Indiana: -13- (a) To cure any ambiguity or formal defect or omission in this ordinance or in any supplemental ordinance; (b) To grant to or confer upon the owners of the Bonds any additional benefits, rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the owners of the Bonds, or to make any change which, in the judgment of the Common Council, is not to the prejudice of the owners of the Bonds; (c) To modify, amend or supplement this ordinance to permit the qualification of the Bonds for sale under the securities laws of the United States of America or of any of the states of the United States of America or to obtain or maintain bond insurance with respect to payments of principal of and interest on the Bonds; (d) To provide for the refunding or advance refunding of the Bonds; (e) To procure a rating on the Bonds from a nationally recognized securities rating agency designated in such supplemental resolution, if such supplemental resolution will not adversely affect the owners of the Bonds; or (f) Any other purpose which in the judgment of the Common Council does not adversely impact the interests of the owners of the Bonds." Section 13. Effective Date. This Ordinance shall be in full force and effect from and after its passage and signing by the Mayor. -14- Passed and adopted by the Common Council of the City of Jeffersonville, Indiana, this day of December, 1999. COMMON COUNCIL By: "'~-~ ~ Printed: 7_/e,'f2~; ~ / ¢ ,a- Its: Presiding Officer Attest: C. RiChard Spencer; Jr./t~!erk-~.~a~ Presented by me to the Mayor of the City of Jeffersonville, Indiana, this /3~ day of December, 1999 at ff_:_~_~.m. C. Richard Spencer, jr.,~lerK-4~.~easur Signed and approved by me, the Mayor of the City of Jeffersonville, Indiana, this /3~ day of December, 1999 at INDSOI JXG 349154vl -15-