HomeMy Public PortalAbout2001-12 Waterworks Construction0 AMENDED AND RESTATED ORDINANCE NO.
An Amended and Restated Ordinance concerning the construction of certain
additions, extensions and improvements to the waterworks of the City of Greencastle
and the advance refunding by the City of Greencastle of its Waterworks Revenue
Bonds of 1995; authorizing the issuance of waterworks revenue bonds for such
purpose; providing for the collection, segregation and distribution of the revenues of
the waterworks and the safeguarding of the interests of the owners of said bonds,
other matters connected therewith, including the issuance of notes in anticipation of
bonds, and repealing ordinances inconsistent herewith
WHEREAS, the City of Greencastle, Indiana ( "City ") has heretofore established, constructed
and financed a municipal waterworks and now owns and operates the waterworks pursuant to IC 8-
1.5, and other applicable laws; and
WHEREAS, the Common Council of the City now finds that certain improvements and
extensions to said works are necessary; and that preliminary plans, specifications and estimates have
been prepared and filed by the engineers employed by the City for the construction of said
improvements and extensions, as more fully described on Exhibit A attached hereto ( "Project "),
which preliminary plans and specifications have been or will be approved by said Common Council
and by all governmental authorities having jurisdiction; and
WHEREAS, the City has obtained engineer's estimates of the costs for the construction of
said Project and will advertise for and receive bids therefor, which bids will be subject to the City's
obtaining funds to pay for said Project; that on the basis of said estimates, the estimated cost of the
Project, including incidental expenses, is $1,115,000 and the maximum amountto be financed under
this Ordinance, including the refunding of the Refunded Bonds (as hereinafter defined), is
$6,710,521; and
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838519.2
® WHEREAS, the Common Council finds that certain hereinafter described outstanding bonds
of the waterworks should be refunded to obtain a reduction in interest payments to effect a savings
to the City; that the refunding of those outstanding bonds, together with accrued interest and
redemption premium thereon and including all costs related to the refunding cannot be provided for
entirely out of funds of the waterworks now on hand and the refunding should be accomplished by
the issuance of revenue bonds of the waterworks; and
WHEREAS, the Common Council finds that there are now outstanding bonds issued to
finance the construction of improvements and additions to the City's waterworks and payable out of
the revenues therefrom designated "Waterworks Revenue Bonds of 1995," dated August 1, 1995
(" 1995 Bonds "), originally issued in the amount of $4,920,000, now outstanding in the amount of
$4,375,000 and maturing annually over a period ending January 1, 2016, which 1995 Bonds
0 constitute a first charge upon the Net Revenues (as hereinafter defined) of the waterworks; and
WHEREAS, the Common Council finds that the 1995 Bonds ( "Refunded Bonds ") should
be refunded pursuant to the provisions of IC 5 -1 -5 to enable the City to obtain a reduction in interest
payments to effect a savings to the City; and
WHEREAS, the Common Council now finds that there are funds on hand to apply to the
refunding of the Refunded Bonds and the cost of said Project in the amount of $710,521, leaving a
balance of $6,000,000 to be financed by the issuance of waterworks revenue and refunding revenue
bonds in an amount not to exceed Six Million Dollars ($6,000,000), and, if necessary, bond
anticipation notes (the "BANs "); and
•
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838519.2
" W H E R E A S , t h e C i t y d e s i r e s t o a u t h o r i z e t h e i s s u a n c e o f B A N S h e r e u n d e r , i f n e c e s s a r y ,
p a y a b l e s o l e l y f r o m t h e p r o c e e d s o f t h e w a t e r w o r k s r e v e n u e b o n d s i s s u e d t o f i n a n c e t h e
a f o r e m e n t i o n e d c o s t o f t h e P r o j e c t , a n d t o a u t h o r i z e t h e r e f u n d i n g o f s a i d B A N s , i f i s s u e d ; a n d
W H E R E A S , t h e C o m m o n C o u n c i l h a s b e e n a d v i s e d t h a t i t w i l l b e c o s t e f f i c i e n t t o p u r c h a s e
a m u n i c i p a l b o n d i n s u r a n c e p o l i c y ( " M u n i c i p a l B o n d I n s u r a n c e P o l i c y " ) f r o m M B I A I n s u r a n c e
C o r p o r a t i o n ( " M B I A " ) ; a n d
W H E R E A S , t h e C o m m o n C o u n c i l n o w f i n d s t h a t a l l c o n d i t i o n s p r e c e d e n t t o t h e a d o p t i o n
o f a n o r d i n a n c e a u t h o r i z i n g t h e i s s u a n c e o f s a i d b o n d s a n d B A N S h a v e b e e n c o m p l i e d w i t h i n
a c c o r d a n c e w i t h t h e p r o v i s i o n s o f I C 5 - 1 - 5 a n d I C 8 - 1 . 5 a s i n e f f e c t o n t h e d a t e o f t h e d e l i v e r y o f t h e
b o n d s a u t h o r i z e d h e r e i n ( c o l l e c t i v e l y , " A c t " ) ; a n d
N O W T H E R E F O R E , B E I T O R D A I N E D B Y T H E C O M M O N C O U N C I L O F T H E C I T Y
" O F G R E E N C A S T L E , I N D I A N A , T H A T :
S e c . 1 . A u t h o r i z a t i o n o f P r o i e c t a n d R e f u n d i n e T h e C i t y p r o c e e d w i t h t h e P r o j e c t i n
a c c o r d a n c e w i t h t h e c o s t e s t i m a t e s a n d t h e p r e l i m i n a r y p l a n s a n d s p e c i f i c a t i o n s h e r e t o f o r e p r e p a r e d
a n d f i l e d b y t h e c o n s u l t i n g e n g i n e e r s e m p l o y e d b y t h e C i t y , w h i c h c o s t e s t i m a t e s , p r e l i m i n a r y p l a n s
a n d s p e c i f i c a t i o n s a r e b y r e f e r e n c e m a d e a p a r t o f t h i s o r d i n a n c e a s f u l l y a s i f t h e s a m e w e r e a t t a c h e d
h e r e t o a n d i n c o r p o r a t e d h e r e i n a n d t w o c o p i e s o f w h i c h a r e n o w o n f i l e i n t h e o f f i c e o f t h e C l e r k -
T r e a s u r e r o f t h e C i t y a n d a r e o p e n f o r p u b l i c i n s p e c t i o n p u r s u a n t t o I C 3 6 - 1 - 5 - 4 ; t h a t t h e C i t y
p r o c e e d w i t h t h e r e f u n d i n g o f t h e R e f u n d e d B o n d s ; t h a t t h e c o s t o f c o n s t r u c t i o n o f s a i d P r o j e c t a n d
t h e r e f u n d i n g o f t h e R e f u n d e d B o n d s s h a l l n o t e x c e e d t h e s u m o f $ 6 , 0 0 0 , 0 0 0 , p l u s i n v e s t m e n t
e a r n i n g s o n t h e b o n d a n d B A N p r o c e e d s , w i t h o u t f u r t h e r a u t h o r i z a t i o n f r o m t h i s C o m m o n C o u n c i l .
" B a s e d u p o n a r e p o r t o f t h e C i t y ' s f i n a n c i a l a d v i s o r , C r o w e , C h i z e k a n d C o m p a n y , L L P , t h e r e f u n d i n g
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8 3 8 5 1 9 . 2
. will allow the City to obtain a reduction in interest payments to effect a savings to the City. The
terms "waterworks," "waterworks system," "works," "system" and other like terms where used in this
ordinance shall be construed to mean and include the existing waterworks system and all real estate
and equipment used in connection therewith and appurtenances thereto, and all extensions, additions,
and improvements thereto and replacements thereof now or at any time hereafter constructed or
acquired.
Sec. 2. Issuance of BANS and Bonds (a) The City shall issue, if necessary, its BANs for
the purpose of procuring interim financing to apply to the cost of said Project. The City shall issue
its BANS in an amount not to exceed Six Million Dollars ($6,000,000) to be designated "Waterworks
Bond Anticipation Notes." Said BANS shalt be sold at not less than 99% of their par value, shall be
numbered consecutively from 1 upward, shall be in multiples of $1,000, shall be dated as of the date
• of delivery thereof, and shall bear interest at a rate not to exceed 6.5% per annum (the exact rate or
rates to be determined through negotiations with the purchaser of the BANs) payable at maturity or
upon redemption. The BANS will mature no later than 2 years after their date of delivery. The
BANS are subject to renewal or extension at an interest rate or rates not to exceed 6.5% per annum
(the exact rate or rates to be negotiated with the purchaser of the BANS). The term of the BANS and
all renewal BANS may not exceed five years from the date of delivery of the initial BANs. The
BANS shall be registered in the name of the purchasers thereof.
The BANS shall be issued pursuant to IC 5- 1.5 -8 -6.1 if sold to the Indiana Bond Bank or
pursuant to IC 5- 1 -14 -5 if sold to a financial institution or any other purchaser. The principal of and
interest on the BANS shall be payable solely from the issuance of revenue bonds pursuant to and in
S the manner prescribed by the Act. The revenue bonds will be payable solely out of and constitute
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838519.2
" a f i r s t c h a r g e a g a i n s t t h e N e t R e v e n u e s ( h e r e i n d e f i n e d a s g r o s s r e v e n u e s a f t e r d e d u c t i o n o n l y f o r t h e
p a y m e n t o f t h e r e a s o n a b l e e x p e n s e s o f o p e r a t i o n , r e p a i r a n d m a i n t e n a n c e ) o f t h e w a t e r w o r k s o f t h e
C i t y .
( b ) T h e C i t y s h a l l i s s u e i t s b o n d s t o b e d e s i g n a t e d " W a t e r w o r k s R e v e n u e a n d R e f u n d i n g
R e v e n u e B o n d s o f 2 0 0 1 " ( " B o n d s " ) , i n a n a m o u n t n o t t o e x c e e d S i x M i l l i o n D o l l a r s ( $ 6 , 0 0 0 , 0 0 0 )
f o r t h e p u r p o s e o f p r o c u r i n g f u n d s t o b e a p p l i e d o n t h e c o s t o f t h e P r o j e c t , t h e r e f u n d i n g o f t h e
R e f u n d e d B o n d s , t h e r e f u n d i n g o f t h e B A N s , i f i s s u e d , t h e p a y m e n t o f c o s t s o f i s s u a n c e , a n d a l l
o t h e r c o s t s r e l a t e d t o t h e r e f u n d i n g a n d t h e P r o j e c t , i n c l u d i n g a p r e m i u m f o r m u n i c i p a l b o n d
i n s u r a n c e . T h e C i t y s h a l l a p p l y m o n e y s c u r r e n t l y h e l d f o r t h e p a y m e n t o f d e b t s e r v i c e o n t h e
R e f u n d e d B o n d s t o t h e r e f u n d i n g a s p r o v i d e d i n S e c t i o n 9 .
T h e B o n d s s h a l l b e i s s u e d i n t h e d e n o m i n a t i o n o f F i v e T h o u s a n d D o l l a r s ( $ 5 , 0 0 0 ) e a c h o r
" i n t e g r a l m u l t i p l e s t h e r e o f , n u m b e r e d c o n s e c u t i v e l y f r o m 1 u p w a r d , d a t e d a s o f t h e f i r s t d a y o f t h e
m o n t h i n w h i c h t h e y a r e s o l d o r d e l i v e r e d , o r t h e d a t e o f d e l i v e r y , a s d e t e r m i n e d b y t h e C l e r k -
T r e a s u r e r , w i t h t h e a d v i c e o f t h e C i t y ' s f i n a n c i a l a d v i s o r , a n d i n t e r e s t s h a l l b e p a y a b l e s e m i a n n u a l l y
o n J a n u a r y 1 a n d J u l y 1 i n e a c h y e a r , b e g i n n i n g J a n u a r y 1 , 2 0 0 2 . T h e B o n d s s h a l l b e s o l d a t a p r i c e
o f n o t l e s s t h a n 9 9 % o f t h e p a r v a l u e t h e r e o f . T h e B o n d s s h a l l b e p a y a b l e i n l a w f u l m o n e y o f t h e
U n i t e d S t a t e s o f A m e r i c a , a t t h e p r i n c i p a l o f f i c e o f t h e P a y i n g A g e n t ( a s h e r e i n a f t e r d e f i n e d ) a n d
s u c h B o n d s s h a l l b e a r i n t e r e s t a t a r a t e o r r a t e s n o t e x c e e d i n g 6 . 5 % p e r a n n u m ( t h e e x a c t r a t e o r r a t e s
t o b e d e t e r m i n e d b y b i d d i n g ) . T h e B o n d s s h a l l m a t u r e s e m i a n n u a l l y , o r s h a l l b e s u b j e c t t o
m a n d a t o r y s i n k i n g f u n d r e d e m p t i o n i f t e r m b o n d s a r e i s s u e d , o n J a n u a r y 1 a n d J u l y 1 o f e a c h y e a r ,
o v e r a p e r i o d e n d i n g n o t l a t e r t h a n J a n u a r y 1 , 2 0 2 1 , a n d i n s u c h a m o u n t s w h i c h w i l l p r o d u c e a s l e v e l
" a n n u a l d e b t s e r v i c e a s p r a c t i c a b l e w i t h $ 5 , 0 0 0 d e n o m i n a t i o n s .
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8 3 8 5 1 9 . 2
. All or a portion of the Bonds may be issued as one or more term bonds, upon election of the
successful bidder. Such term bonds shall have a stated maturity or maturities of January 1 or July
1, on the dates as determined by the. successful bidder, but in no event later than the last serial
maturity date of the Bonds as determined in accordance with the above paragraph. The term bonds
shall be subject to mandatory sinking fund redemption and final payment(s) at maturity at 100% of
the principal amount thereof, plus accrued interest to the redemption date, on principal payment dates
which are hereinafter determined in accordance with the above paragraph.
Interest on the Bonds and BANS shall be calculated according to a 360 -day calendar year
containing twelve 30 -day months.
Sec. 3. Registrar and Paving Agent Book Entry Provisions; Payments under the Municipal
Bond Insurance Policy The Clerk- Treasurer is hereby authorized to contract with a qualified
• financial institution to serve as Registrar and Paying Agent for the Bonds ('Registrar" or "Paying
Agent'). The Registrar is hereby charged with the responsibility of authenticating the Bonds. The
Clerk- Treasurer is hereby authorized to enter into such agreements or understandings with the
Registrar as will enable the institution to perform the services required of a registrar and paying
agent. The Clerk- Treasurer is further authorized to pay such fees as the Registrar may charge for the
services it provides as Registrar and Paying Agent and such fees may be paid from the Sinking Fund
established to pay the principal of and interest on the Bonds as fiscal agency charges. In the
alternative, the Clerk- Treasurer of the City may serve as Registrar and Paying Agent, as determined
by the Mayor, the Clerk- Treasurer and the successful bidder for the Bonds. As to the BANS, the
Clerk- Treasurer shall serve as Registrar and Paying Agent and is hereby charged with the duties of
• Registrar and Paying Agent.
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838519.2
. The principal of the Bonds and BANs shall be payable at the principal corporate trust office
of the Paying Agent. All payments of interest on the Bonds and BANS shall be paid by check,
mailed one business day prior to the interest payment date to the registered owners thereof as the
names appear as of the fifteenth day of the month preceding the interest payment date and at the
addresses as they appear on the registration books kept by the Registrar or at such other address as
is provided to the Paying Agent in writing by such registered owner. If payment of principal or
interest is made to a depository, payment shall be made by wire transfer on the payment date in
same -day funds. If the payment date occurs on a date when financial institutions are not open for
business, the wire transfer shall be made on the next succeeding business day. The Paying Agent
shall be instructed to wire transfer payments by 1:00 p.m. (New York City time) so such payments
are received at the depository by 2:30 p.m. (New York City time). All payments on the Bonds and
• BANs shall be made in any coin or currency of the United States of America, which on the date of
such payment, shall be legal tender for the payment of public and private debts.
Each Bond shall be 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 in person, or
by its attorney duly authorized in writing, upon surrender of such Bond together with a written
instrument of transfer or exchange satisfactory to the Registrar duly executed by the registered
owner, or its attorney duly authorized in writing, and thereupon anew 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 transferees or the registered owner, as the case may be, in
exchange therefor. The costs of such transfer or exchange shall be borne by the City except for any
• tax or governmental charge required to be paid with respect to the transfer or exchange, which taxes
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838519.2
" o r g o v e r n m e n t a l c h a r g e s a r e p a y a b l e b y t h e p e r s o n r e q u e s t i n g s u c h t r a n s f e r o r e x c h a n g e . T h e C i t y ,
R e g i s t r a r a n d P a y i n g A g e n t f o r t h e B o n d s m a y t r e a t a n d c o n s i d e r t h e p e r s o n i n w h o s e n a m e s u c h
B o n d s a r e r e g i s t e r e d a s t h e a b s o l u t e o w n e r t h e r e o f f o r a l l p u r p o s e s i n c l u d i n g f o r t h e p u r p o s e o f
r e c e i v i n g p a y m e n t o f , o r o n a c c o u n t o f , t h e p r i n c i p a l t h e r e o f a n d i n t e r e s t d u e t h e r e o n .
T h e R e g i s t r a r a n d P a y i n g A g e n t m a y a t a n y t i m e r e s i g n a s R e g i s t r a r a n d P a y i n g A g e n t u p o n
g i v i n g 3 0 d a y s ' n o t i c e i n w r i t i n g t o t h e C i t y a n d b y f i r s t c l a s s m a i l t o e a c h r e g i s t e r e d o w n e r o f t h e
B o n d s t h e n o u t s t a n d i n g , a n d s u c h r e s i g n a t i o n w i l l t a k e e f f e c t a t t h e e n d o f s u c h 3 0 d a y p e r i o d o r
u p o n t h e e a r l i e r a p p o i n t m e n t o f a s u c c e s s o r r e g i s t r a r a n d p a y i n g a g e n t b y t h e C i t y . A n y s u c h n o t i c e
t o t h e C i t y m a y b e s e r v e d p e r s o n a l l y o r s e n t b y r e g i s t e r e d m a i l . T h e R e g i s t r a r a n d P a y i n g A g e n t m a y
b e r e m o v e d a t a n y t i m e a s R e g i s t r a r a n d P a y i n g A g e n t b y t h e C i t y , i n w h i c h e v e n t t h e C i t y m a y
a p p o i n t a s u c c e s s o r r e g i s t r a r a n d p a y i n g a g e n t . T h e C i t y s h a l l n o t i f y e a c h r e g i s t e r e d o w n e r o f t h e
" B o n d s t h e n o u t s t a n d i n g b y f i r s t c l a s s m a i l o f t h e r e m o v a l o f t h e R e g i s t r a r a n d P a y i n g A g e n t . N o t i c e s
t o t h e r e g i s t e r e d o w n e r s o f t h e B o n d s s h a l l b e d e e m e d t o b e g i v e n w h e n m a i l e d b y f i r s t c l a s s m a i l
t o t h e a d d r e s s e s o f s u c h r e g i s t e r e d o w n e r s a s t h e y a p p e a r o n t h e r e g i s t r a t i o n b o o k s k e p t b y t h e
R e g i s t r a r .
U p o n t h e a p p o i n t m e n t o f a n y s u c c e s s o r r e g i s t r a r a n d p a y i n g a g e n t b y t h e C i t y , t h e C l e r k -
T r e a s u r e r i s a u t h o r i z e d a n d d i r e c t e d t o e n t e r i n t o s u c h a g r e e m e n t s a n d u n d e r s t a n d i n g s w i t h s u c h
s u c c e s s o r r e g i s t r a r a n d p a y i n g a g e n t a s w i l l e n a b l e t h e i n s t i t u t i o n t o p e r f o r m t h e s e r v i c e s r e q u i r e d
o f a r e g i s t r a r a n d p a y i n g a g e n t f o r t h e B o n d s . T h e C l e r k - T r e a s u r e r i s f u r t h e r a u t h o r i z e d t o p a y s u c h
f e e s a s t h e s u c c e s s o r r e g i s t r a r a n d p a y i n g a g e n t m a y c h a r g e f o r t h e s e r v i c e s i t p r o v i d e s a s r e g i s t r a r
a n d p a y i n g a g e n t a n d s u c h f e e s m a y b e p a i d f r o m t h e W a t e r w o r k s S i n k i n g F u n d c r e a t e d i n
" S e c t i o n 1 5 h e r e o f A n y p r e d e c e s s o r r e g i s t r a r a n d p a y i n g a g e n t s h a l l d e l i v e r a l l o f t h e B o n d s a n d a n y
8 3 8 5 1 9 . 2
a , cash or investments in its possession with respect thereto, together with the registration books, to the
successor registrar and paying agent.
The City has determined that.it may be beneficial to the City to have the Bonds held by a
central depository system pursuant to an agreement between the City and The Depository Trust
Company, New York, New York ('Depository Trust Company ") and have transfers of the Bonds
effected by book -entry on the books of the central depository system ('Book Entry System "). The
Bonds may be initially issued in the form of a separate single authenticated fully registered Bond for
the aggregate principal amount of each separate maturity of the Bonds. In such case, upon initial
issuance, the ownership of such Bonds shall be registered in the register kept by the Registrar in the
name of CEDE & CO., as nominee of the Depository Trust Company.
With respect to the Bonds registered in the register kept by the Registrar in the name of
e CEDE & CO., as nominee of the Depository Trust Company, the City and the Paying Agent shall
have no responsibility or obligation to any other holders or owners (including any beneficial owner
('Beneficial Owner ")) of the Bonds with respect to (i) the accuracy of the records of the Depository
Trust Company, CEDE & CO., or any Beneficial Owner with respect to ownership questions, (ii)
the delivery to any bondholder (including any Beneficial Owner) or any other person, other than the
Depository Trust Company, of any notice with respect to the Bonds including any notice of
redemption, or (iii) the payment to any bondholder (including any Beneficial Owner) or any other
person, other than the Depository Trust Company, of any amount with respect to the principal of, or
premium, if any, or interest on the Bonds except as otherwise provided herein.
No person other than the Depository Trust Company shall receive an authenticated Bond
• evidencing an obligation of the City to make payments of the principal of and premium, if any, and
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838519.2
" i n t e r e s t o n t h e B o n d s p u r s u a n t t o t h i s o r d i n a n c e . T h e C i t y a n d t h e R e g i s t r a r a n d P a y i n g A g e n t m a y
t r e a t a s a n d d e e m t h e D e p o s i t o r y T r u s t C o m p a n y o r C E D E & C O . t o b e t h e a b s o l u t e b o n d h o l d e r o f
e a c h o f t h e B o n d s f o r t h e p u r p o s e o f ( i ) p a y m e n t o f t h e p r i n c i p a l o f a n d p r e m i u m , i f a n y , a n d i n t e r e s t
o n s u c h B o n d s ; ( i i ) g i v i n g n o t i c e s o f r e d e m p t i o n a n d o t h e r n o t i c e s p e r m i t t e d t o b e g i v e n t o
b o n d h o l d e r s w i t h r e s p e c t t o s u c h B o n d s ; ( i i i ) r e g i s t e r i n g t r a n s f e r s w i t h r e s p e c t t o s u c h B o n d s ; ( i v )
o b t a i n i n g a n y c o n s e n t o r o t h e r a c t i o n r e q u i r e d o r p e r m i t t e d t o b e t a k e n o f o r b y b o n d h o l d e r s ; ( v )
v o t i n g ; a n d ( v i ) f o r a l l o t h e r p u r p o s e s w h a t s o e v e r . T h e P a y i n g A g e n t s h a l l p a y a l l p r i n c i p a l o f a n d
p r e m i u m , i f a n y , a n d i n t e r e s t o n t h e B o n d s o n l y t o o r u p o n t h e o r d e r o f t h e D e p o s i t o r y T r u s t
C o m p a n y , a n d a l l s u c h p a y m e n t s s h a l l b e v a l i d a n d e f f e c t i v e f u l l y t o s a t i s f y a n d d i s c h a r g e t h e C i t y ' s
a n d t h e P a y i n g A g e n t ' s o b l i g a t i o n s w i t h r e s p e c t t o p r i n c i p a l o f a n d p r e m i u m , i f a n y , a n d i n t e r e s t o n
t h e B o n d s t o t h e e x t e n t o f t h e s u m o r s u m s s o p a i d . U p o n d e l i v e r y b y t h e D e p o s i t o r y T r u s t C o m p a n y
" t o t h e C i t y o f w r i t t e n n o t i c e t o t h e e f f e c t t h a t t h e D e p o s i t o r y T r u s t C o m p a n y h a s d e t e r m i n e d t o
s u b s t i t u t e a n e w n o m i n e e i n p l a c e o f C E D E & C O . , a n d s u b j e c t t o t h e p r o v i s i o n s h e r e i n w i t h r e s p e c t
t o c o n s e n t s , t h e w o r d s " C E D E & C O . " i n t h i s o r d i n a n c e s h a l l r e f e r t o s u c h n e w n o m i n e e o f t h e
D e p o s i t o r y T r u s t C o m p a n y . N o t w i t h s t a n d i n g a n y o t h e r p r o v i s i o n h e r e o f t o t h e c o n t r a r y , s o l o n g a s
a n y B o n d i s r e g i s t e r e d i n t h e n a m e o f C E D E & C O . , a s n o m i n e e o f t h e D e p o s i t o r y T r u s t C o m p a n y ,
a l l p a y m e n t s w i t h r e s p e c t t o t h e p r i n c i p a l o f a n d p r e m i u m , i f a n y , a n d i n t e r e s t o n s u c h B o n d s a n d
a l l n o t i c e s w i t h r e s p e c t t o s u c h B o n d s s h a l l b e m a d e a n d g i v e n , r e s p e c t i v e l y , t o t h e D e p o s i t o r y T r u s t
C o m p a n y a s p r o v i d e d i n a r e p r e s e n t a t i o n l e t t e r f r o m t h e C i t y t o t h e D e p o s i t o r y T r u s t C o m p a n y .
U p o n r e c e i p t b y t h e C i t y o f w r i t t e n n o t i c e f r o m t h e D e p o s i t o r y T r u s t C o m p a n y t o t h e e f f e c t
t h a t t h e D e p o s i t o r y T r u s t C o m p a n y i s u n a b l e o r u n w i l l i n g t o d i s c h a r g e i t s r e s p o n s i b i l i t i e s a n d n o
S s u b s t i t u t e d e p o s i t o r y w i l l i n g t o u n d e r t a k e t h e f u n c t i o n s o f t h e D e p o s i t o r y T r u s t C o m p a n y h e r e u n d e r
M [ I 1 M
8 3 8 5 1 9 . 2
® can be found which is willing and able to undertake such functions upon reasonable and customary
terms, then the Bonds shall no longer be restricted to being registered in the register of the City kept
by the Registrar in the name of CEDE & CO., as nominee of the Depository Trust Company, but may
be registered in whatever name or names the bondholders transferring or exchanging the Bonds shall
designate, in accordance with the provisions of this ordinance.
If the City determines that it is in the best interest of the bondholders that they be able to
obtain certificates for the fully registered Bonds, the City may notify the Depository Trust Company
and the Registrar, whereupon the Depository Trust Company will notify the Beneficial Owners of
the availability through the Depository Trust Company of certificates for the Bonds. In such event,
the Registrar shall prepare, authenticate, transfer and exchange certificates for the Bonds as requested
by the Depository Trust Company and any Beneficial Owners in appropriate amounts, and whenever
® the Depository Trust Company requests the City and the Registrar to do so, the Registrar and the City
will cooperate with the Depository Trust Company by taking appropriate action after reasonable
notice (i) to make available one or more separate certificates evidencing the fully registered Bonds
of any Beneficial Owner's Depository Trust Company account or (ii) to arrange for another securities
depository to maintain custody of certificates for and evidencing the Bonds.
If the Bonds shall no longer be restricted to being registered in the name of the Depository
Trust Company, the Registrar shall cause said Bonds to be printed in blank in such number as the
Registrar shall determine to be necessary or customary; provided, however, that the Registrar shall
not be required to have such Bonds printed until it shall have received from the City indemnification
for all costs and expenses associated with such printing.
- 11 -
838519.2
In connection with any notice or other communication to be provided to bondholders by the
City or the Registrar with respect to any consent or other action to be taken by bondholders, the City
or the Registrar, as the case may be, shall establish a record date for such consent or other action and
give the Depository Trust Company notice of such record date not less than fifteen (15) calendar
days in advance of such record date to the extent possible.
So long as said Bonds are registered in the name of the Depository Trust Company or CEDE
& CO. or any substitute nominee, the City and the Registrar and Paying Agent shall be entitled to
request and to rely upon a certificate or other written representation from the Beneficial Owners of
the Bonds or from the Depository Trust Company on behalf of such Beneficial Owners stating the
amount of their respective beneficial ownership interests in the Bonds and setting forth the consent,
advice, direction, demand or vote of the Beneficial Owners as of a record date selected by the
® Registrar and the Depository Trust Company, to the same extent as if such consent, advice, direction,
demand or vote were made by the bondholders for purposes of this ordinance and the City and the
Registrar and Paying Agent shall for such purposes treat the Beneficial Owners as the bondholders.
Along with any such certificate or representation, the Registrar may request the Depository Trust
Company to deliver, or cause to be delivered, to the Registrar a list of all Beneficial Owners of the
Bonds, together with the dollar amount of each Beneficial Owner's interest in the Bonds and the
current addresses of such Beneficial Owners.
Interest on the Bonds shall be payable from the interest payment date to which interest has
been paid next preceding the authentication date of the Bonds unless the Bonds are authenticated
after the fifteenth day of the month preceding an interest payment date and on or before such interest
® payment date in which case they shall bear interest from such interest payment date, or unless the
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838519.2
® Bonds are authenticated on or before the fifteenth day of the month preceding the first interest
payment date, in which case they shall bear interest from the original date until the principal shall
be fully paid.
Payments made by MBIA:
A. In the event that, on the second Business Day, and again on the Business Day, prior
to the payment date on the Bonds, the Paying Agent has not received sufficient moneys to pay all
principal of and interest on the Bonds due on the second following or following, as the case may be,
Business Day, the Paying Agent shall immediately notify MBIA or its designee on the same
Business Day by telephone or telegraph, confirmed in writing by registered or certified mail, of the
amount of the deficiency.
B. If the deficiency is made up in whole or in part prior to or on the payment date, the
40 Paying Agent shall so notify MBIA or its designee.
C. In addition, if the Paying Agent has notice that any bondholder has been required to
disgorge payments of principal or interest on the Bonds to a trustee in bankruptcy or creditors or
others pursuantto a final judgment by a court of competent jurisdiction that such payment constitutes
a voidable preference to such bondholder within the meaning of any applicable bankruptcy laws,
then the Paying Agent shall notify MBIA or its designee of such fact by telephone or telegraphic
notice, confirmed in writing by registered or certified mail.
D. The Paying Agent is hereby irrevocably designated, appointed, directed and
authorized to act as attorney -in -fact for holders of the Bonds as follows:
(i) If and to the extent there is a deficiency in amounts required to pay
interest on the Bonds, the Paying Agent shall (a) execute and deliver to State Street
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838519.2
" B a n k a n d T r u s t C o m p a n y , N . A . , o r i t s s u c c e s s o r s u n d e r t h e M u n i c i p a l B o n d
I n s u r a n c e P o l i c y ( t h e " I n s u r a n c e P a y i n g A g e n t " ) , i n f o r m s a t i s f a c t o r y t o t h e I n s u r a n c e
P a y i n g A g e n t , a n i n s t r u m e n t a p p o i n t i n g M B I A a s a g e n t f o r s u c h h o l d e r s i n a n y l e g a l
p r o c e e d i n g r e l a t e d t o t h e p a y m e n t o f s u c h i n t e r e s t a n d a n a s s i g n m e n t t o M B I A o f t h e
c l a i m s f o r i n t e r e s t t o w h i c h s u c h d e f i c i e n c y r e l a t e s a n d w h i c h a r e p a i d b y M B I A , ( b )
r e c e i v e a s d e s i g n e e o f t h e r e s p e c t i v e h o l d e r s ( a n d n o t a s P a y i n g A g e n t ) i n a c c o r d a n c e
w i t h t h e t e n o r o f t h e M u n i c i p a l B o n d I n s u r a n c e P o l i c y p a y m e n t f r o m t h e I n s u r a n c e
P a y i n g A g e n t w i t h r e s p e c t t o t h e c l a i m s f o r i n t e r e s t s o a s s i g n e d , a n d ( c ) d i s b u r s e t h e
s a m e t o s u c h r e s p e c t i v e h o l d e r s ; a n d
( i i ) I f a n d t o t h e e x t e n t o f a d e f i c i e n c y i n a m o u n t s r e q u i r e d t o p a y
p r i n c i p a l o f t h e B o n d s , t h e P a y i n g A g e n t s h a l l ( a ) e x e c u t e a n d d e l i v e r t o t h e
" I n s u r a n c e P a y i n g A g e n t i n f o r m s a t i s f a c t o r y t o t h e I n s u r a n c e P a y i n g A g e n t a n
i n s t r u m e n t a p p o i n t i n g M B I A a s a g e n t f o r s u c h h o l d e r i n a n y l e g a l p r o c e e d i n g r e l a t i n g
t o t h e p a y m e n t o f s u c h p r i n c i p a l a n d a n a s s i g n m e n t t o M B I A o f a n y o f t h e B o n d s
s u r r e n d e r e d t o t h e I n s u r a n c e P a y i n g A g e n t o f s o m u c h o f t h e p r i n c i p a l a m o u n t
t h e r e o f a s h a s n o t p r e v i o u s l y b e e n p a i d o r f o r w h i c h m o n e y s a r e n o t h e l d b y t h e
P a y i n g A g e n t a n d a v a i l a b l e f o r s u c h p a y m e n t ( b u t s u c h a s s i g n m e n t s h a l l b e d e l i v e r e d
o n l y i f p a y m e n t f r o m t h e I n s u r a n c e P a y i n g A g e n t i s r e c e i v e d ) , ( b ) r e c e i v e a s d e s i g n e e
o f t h e r e s p e c t i v e h o l d e r s ( a n d n o t a s P a y i n g A g e n t ) i n a c c o r d a n c e w i t h t h e t e n o r o f
t h e M u n i c i p a l B o n d I n s u r a n c e P o l i c y p a y m e n t t h e r e f o r f r o m t h e I n s u r a n c e P a y i n g
A g e n t , a n d ( c ) d i s b u r s e t h e s a m e t o s u c h h o l d e r s .
"
I [ !
8 3 8 5 1 9 . 2
E. Payments with respect to claims for interest on and principal of Bonds disbursed by
the Paying Agent from proceeds of the Municipal Bond Insurance Policy shall not be considered to
discharge the obligation of the City with respect to such Bonds, and MBIA shall become the owner
of such unpaid Bonds and claims for the interest in accordance with the tenor of the assignment
made to it under the provisions of this subsection or otherwise.
F. Irrespective of whether any such assignment is executed and delivered, the City and
the Paying Agent hereby agree for the benefit of MBIA that:
(i) They recognize that to the extent MBIA makes payments, directly or
indirectly (as by paying through the Paying Agent), on account of principal of or
interest on the Bonds, MBIA will be subrogated to the rights of such holders to
receive the amount of such principal and interest from the City, with interest thereon
as provided and solely from the sources stated in this ordinance and the Bonds; and
(ii) They will accordingly pay to MBIA the amount of such principal and
interest (including principal and interest recovered under subparagraph (ii) of the first
paragraph of the Municipal Bond Insurance Policy, which principal and interest shall
be deemed past due and not to have been paid), with interest thereon as provided in
this ordinance and the Bonds, but only form the sources and in the manner provided
herein for the payment of principal of and interest on the Bonds to holders, and will
otherwise treat MBIA as the owner of such rights to the amount of such principal and
interest.
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838519.2
" S e c . 4 . R e d e m p t i o n o f B A N S a n d B o n d s ( a ) T h e B A N S a r e p r e p a y a b l e b y t h e C i t y , i n
w h o l e o r i n p a r t , a t a n y t i m e u p o n 7 d a y s ' n o t i c e t o t h e o w n e r o f t h e B A N s w i t h o u t a n y p r e m i u m .
( b ) T h e B o n d s a r e r e d e e m a b l e a t t h e o p t i o n o f t h e C i t y , b u t n o e a r l i e r t h a n t e n ( 1 0 ) y e a r s
a f t e r t h e i r d a t e o f d e l i v e r y , o r a n y d a t e t h e r e a f t e r , o n t h i r t y ( 3 0 ) d a y s ' n o t i c e , i n w h o l e o r i n p a r t , i n
t h e o r d e r o f m a t u r i t y d e t e r m i n e d b y t h e C i t y a n d b y l o t w i t h i n a m a t u r i t y , a t f a c e v a l u e , t o g e t h e r w i t h
a p r e m i u m n o g r e a t e r t h a n 2 % , p l u s a c c r u e d i n t e r e s t t o t h e d a t e o f r e d e m p t i o n . T h e e x a c t
r e d e m p t i o n d a t e s a n d p r e m i u m s , i f a n y , s h a l l b e e s t a b l i s h e d b y t h e M a y o r , w i t h t h e a d v i c e o f t h e
C i t y ' s f i n a n c i a l a d v i s o r p r i o r t o t h e s a l e o f t h e B o n d s .
I f a n y B o n d i s i s s u e d a s a t e r m b o n d , t h e P a y i n g A g e n t s h a l l c r e d i t a g a i n s t t h e m a n d a t o r y
s i n k i n g f u n d r e q u i r e m e n t f o r t h e B o n d s m a t u r i n g a s t e r m b o n d s , a n d c o r r e s p o n d i n g m a n d a t o r y
r e d e m p t i o n o b l i g a t i o n , i n t h e o r d e r d e t e r m i n e d b y t h e C i t y , a n y B o n d s m a t u r i n g a s t e r m b o n d s w h i c h
" h a v e p r e v i o u s l y b e e n r e d e e m e d ( o t h e r w i s e t h a n a s a r e s u l t o f a p r e v i o u s m a n d a t o r y r e d e m p t i o n
r e q u i r e m e n t ) o r d e l i v e r e d t o t h e R e g i s t r a r f o r c a n c e l l a t i o n o r p u r c h a s e d f o r c a n c e l l a t i o n b y t h e
P a y i n g A g e n t a n d n o t t h e r e t o f o r e a p p l i e d a s a c r e d i t a g a i n s t a n y r e d e m p t i o n o b l i g a t i o n . E a c h B o n d
m a t u r i n g a s a t e r m b o n d s o d e l i v e r e d o r c a n c e l l e d s h a l l b e c r e d i t e d b y t h e P a y i n g A g e n t a t 1 0 0 % o f
t h e p r i n c i p a l a m o u n t t h e r e o f a g a i n s t t h e m a n d a t o r y s i n k i n g f u n d o b l i g a t i o n o n s u c h m a n d a t o r y
s i n k i n g f u n d d a t e , a n d a n y e x c e s s o f s u c h a m o u n t s h a l l b e c r e d i t e d o n f u t u r e r e d e m p t i o n o b l i g a t i o n s ,
a n d t h e p r i n c i p a l a m o u n t o f t h e B o n d s t o b e r e d e e m e d b y o p e r a t i o n o f t h e m a n d a t o r y s i n k i n g f u n d
r e q u i r e m e n t s h a l l b e a c c o r d i n g l y r e d u c e d ; p r o v i d e d , h o w e v e r , t h e P a y i n g A g e n t s h a l l c r e d i t o n l y
s u c h B o n d s m a t u r i n g a s t e r n b o n d s t o t h e e x t e n t r e c e i v e d o n o r b e f o r e f o r t y - f i v e ( 4 5 ) d a y s p r e c e d i n g
t h e a p p l i c a b l e m a n d a t o r y r e d e m p t i o n d a t e .
- 1 6 -
8 3 8 5 1 9 . 2
0 Each Five Thousand Dollars ($5,000) principal amount shall be considered a separate Bond
for purposes of optional and mandatory redemption. If less than an entire maturity is called for
redemption, the Bonds to be called shall be selected by lot by the Registrar. If some Bonds are to
be redeemed by optional redemption and mandatory sinking fund redemption on the same date, the
Registrar shall select by lot the Bonds for optional redemption before selecting the Bonds by lot for
the mandatory sinking fund redemption.
In either case, notice of such redemption shall be given at least thirty (30) days prior to the
date fixed for redemption by mail unless the notice is waived by the registered owner of a Bond.
Such notice shall be mailed to the address of the registered owners as shown on the registration
records of the City as of the date which is forty-five (45) days prior to such redemption date. The
notice shall specify the date and place of redemption and sufficient identification of the Bonds called
0 for redemption. The place of redemption shall 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 principal office of the Paying Agent to pay the redemption price on the date so
named. Coincidentally with the payment of the redemption price, the Bonds so called for redemption
shall be surrendered for cancellation.
Sec. 5. Execution and Negotiability Each of the BANS and Bonds shall be executed in the
name of the City by the manual or facsimile signature of the Mayor and attested by the manual or
facsimile signature of its Clerk- Treasurer, and the seal of the City shall be affixed, imprinted or
impressed to or on each of the BANS and Bonds manually, by facsimile or any other means; and
these officials, by the execution of a Signature and No Litigation Certificate, shall adopt as and for
their own proper signatures the facsimile signatures appearing on the Bonds. In case any officer
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838519.2
® whose signature or facsimile signature appears on the Bonds shall cease to be such officer before the
delivery of the Bonds, the signature of such officer shall nevertheless be valid and sufficient for all
purposes the same as if such officer had remained in office until such delivery.
The BANS and Bonds shall have all of the qualities and incidents of negotiable instruments
under the laws of the State of Indiana, subject to the provisions for registration herein.
The Bonds shall also be authenticated by the manual signature of the Registrar, and no Bond
shall be valid or become obligatory for any purpose until the certificate of authentication thereon has
been so executed.
Sec. 6. Form of Bonds The form and tenor of the Bonds shall be substantially as follows,
all blanks to be filled in properly prior to delivery;
UNITED STATES OF AMERICA
•
C�
STATE OF INDIANA
CITY OF GREENCASTLE
WATERWORKS REVENUE AND REFUNDING
REVENUE BOND OF 2001
Interest Maturity Original Authentication
Rate Date Date Date
COUNTY OF PUTNAM
REGISTERED OWNER:
PRINCIPAL SUM:
CUSIP
The City of Greencastle, in Putnam County, State of Indiana, for value received, hereby
promises to pay to the Registered Owner named above or registered assigns, solely out of the special
revenue fund hereinafter referred to, the Principal Sum set forth above on the Maturity Date set forth
-18-
838519.2
® above (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 the interest
payment date to which interest has been paid next preceding the Authentication Date of this bond
unless this bond is authenticated after the fifteenth day of the month preceding an interest payment
date and on or before such interest payment date in which case it shall bear interest from such
interest payment date or unless this bond is authenticated on or before December 15, 2001, in which
case it shall bear interest from the Original Date, until the principal is paid, which interest is payable
semiannually on the first days of January and July in each year, beginning on January 1, 2002,
Interest shall be calculated according to a 360 -day calendar year containing twelve 30 -day months.
The principal of this bond is payable at the principal office of
('Registrar" or 'Paying Agent "), in the of , Indiana. All payments of
interest on this bond shall be paid by check, mailed one business day prior to the interest payment
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. If payment of
principal or interest is made to a depository, payment shall be made by wire transfer on the payment
date in same -day funds. If the payment date occurs on a date when financial institutions are not open
for business, the wire transfer shall be made on the next succeeding business day. The Paying Agent
shall wire transfer payments by 1:00 p.m. (New York City time) so such payments are received at
the depository by 2:30 p.m. (New York City time). 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 bonds shall be initially issued in Book Entry System (as defined in the Ordinance). The
provisions of this bond and of the Ordinance are subject in all respects to the provisions of the Letter
of Representations between the City and The Depository Trust Company, or any substitute
agreement, effecting such Book Entry System.]
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 ISSUE OF WHICH IT IS A PART SHALL IN ANY RESPECT
CONSTITUTE A CORPORATE INDEBTEDNESS OF THE CITY WITHIN THE PROVISIONS
AND LIMITATIONS OF THE CONSTITUTION OF THE STATE OF INDIANA.
The 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 of authentication hereon shall have been executed by an authorized
® representative of the Registrar.
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838519.2
® IN WITNESS WHEREOF, the City of Greencastle, in Putnam 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.
[SEAL]
Attest:
Clerk- Treasurer
CITY OF GREENCASTLE, INDIANA
Mayor
REGISTRAR'S CERTIFICATE OF AUTHENTICATION
e This bond is one of the bonds described in the within- mentioned Ordinance.
as Registrar
Authorized Representative
C
(To be printed on Reverse Side)
This bond is one of an authorized issue of bonds of the City of Greencastle, in the aggregate
amount of Dollars ($ ) ; numbered consecutively
from I up; issued for the purpose of providing funds to be applied on the cost of certain additions,
extensions and improvements to the City's waterworks ( "Project "), [to refund interim notes issued
in anticipation of the bonds,] to advance refund the Refunded Bonds (as defined in the hereinafter
defined Ordinance) and to pay issuance expenses, including a premium for a municipal bond
insurance policy. This bond is issued pursuant to an ordinance adopted by the Common Council of
said City on the _ day of 2001, entitled "An Amended and Restated Ordinance
concerning the construction of certain additions, extensions and improvements to the waterworks
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838519.2
® of the City of Greencastle and the advance refunding by the City of Greencastle of its Waterworks
Revenue Bonds of 1995; authorizing the issuance of waterworks revenue bonds for such purpose;
providing for the collection, segregation and distribution of the revenues of the waterworks and the
safeguarding of the interests of the owners of said bonds, other matters connected therewith,
including the issuance of notes in anticipation of bonds, and repealing ordinances inconsistent
herewith" ( "Ordinance "), and in accordance with the provisions of Indiana law, including without
limitation Indiana Code 5 -1 -5 and Indiana Code 8 -1.5 as in effect on the date of delivery of the bonds
of this issue (hereinafter collectively, "Act "), the proceeds of which bonds are to be applied to the
costs of the Project, the refunding and legal defeasance of the Refunded Bonds[, the payment of
notes issued in anticipation of the bonds] and expenses incurred in connection therewith, including
a premium for a municipal bond insurance policy.
Pursuant to the provisions of the Act and the Ordinance, the principal and interest of this
bond, and any other bonds ranking on a parity therewith, are payable solely from the Waterworks
Sinking Fund created by the Ordinance ( "Sinking Fund ") to be provided from the Net Revenues
(defined as the gross revenues after deduction only for the payment of the reasonable expenses of
operation, repair and maintenance) of the waterworks of the City.
Pursuant to the Ordinance and the Escrow Agreement defined therein, the City of Greencastle
has set aside obligations of the United States of America (purchased from proceeds of the bonds of
this issue and funds on hand of the waterworks), and certain cash in a Trust Account to provide
• payment of principal of and interest and redemption premium on the Refunded Bonds.
The City of Greencastle irrevocably pledges the entire Net Revenues of the waterworks 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, to the extent necessary for that
purpose, 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, repair and maintenance of the waterworks 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 of this
bond, the owner of this bond shall have all of the rights and remedies provided for under Indiana
Law.
The City of Greencastle further covenants that it will set aside and pay into its Sinking Fund
monthly, as available, or more often if necessary, a sufficient amount of the Net Revenues of the
works for payment of (a) the interest on all bonds which by their terms are payable from the revenues
of the waterworks, as such interest shall fall due, (b) the necessary fiscal agency charges for paying
bonds and interest, (c) the principal of all bonds which by their terms are payable from the revenues
of the waterworks, as such principal shall fall due, and (d) an additional amount as a margin of safety
to [create and] maintain the debt service reserve required by the Ordinance. Such required payments
shall constitute a first charge upon all the Net Revenues of the waterworks.
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838519.2
® The bonds maturing on or after 1, _, are redeemable at the option of the
City on 1, or any date thereafter, on thirty days' notice, in whole or in part, in the
order of maturity as determined by the City and by lot within a maturity, at face value, with[out] [any
premium] [the following premiums:]
_% if redeemed on 1, or
thereafter on or before
_% if redeemed on 1, or
thereafter on or before
0% if redeemed on _, or
thereafter prior to maturity;
plus in each case accrued interest to the date of redemption.
[The bonds maturing on 1, are subject to mandatory sinking fund
redemption prior to maturity, at a redemption price equal to the principal amount thereof plus
accrued interest, on the dates and in the amounts set forth below:
Date Amount
*Final Maturity]
Each Five Thousand Dollars ($5,000) principal amount shall be considered a separate bond
for purposes of optional [and mandatory] redemption. If less than an entire maturity is called for
redemption, the bonds to be redeemed shall be selected by lot by the Registrar. [If some bonds are
to be redeemed by optional redemption and mandatory sinking fund redemption on the same date,
the Registrar shall select by lot the bonds for optional redemption before selecting the bonds by lot
for the mandatory sinking fund redemption.]
Notice of such redemption shall be mailed to the address of the registered owner as shown
on the registration records of the City as of the date which is forty-five (45) days prior to such
redemption date not less than thirty (30) 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 ofthe 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.
LJ
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838519.2
® 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 funds
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 transferees or to the registered owner, as the
case may 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 hereon.
This bond is subject to defeasance prior to redemption or payment as provided in the
o 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. 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 of any of the owners of the bonds.
The City of Greencastle has designated the bonds as qualified tax - exempt obligations to
qualify the bonds for the $10,000,000 exception from the provisions of Section 265(b) ofthe Internal
Revenue Code of 1986 relating to the disallowance of 100% of the deduction for interest expense
allocable to tax- exempt obligations.
The bonds maturing in any one year are issuable only in fully registered form in the
denomination of $5,000 or any integral multiple thereof.
STATEMENT OF INSURANCE
MBIA Insurance Corporation (the "Insurer ") has issued a policy containing the following
provisions, such policy being on file at the corporate trust department of
of,
The Insurer, in consideration of the payment of the premium and subject to the terms of this
policy, hereby unconditionally and irrevocably guarantees to any owner, as hereinafter defined, of
838519.2
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the following described obligations, the full and complete payment required to be made by or on
behalf of the Issuer to or its successor (the
"Paying Agent ") of an amount equal to (i) the principal of (either at the stated maturity or by any
advancement of maturity pursuant to a mandatory sinking fund payment) and interest on, the
Obligations (as that term is defined below) as such payments shall become due but shall not be so
paid (except that in the event of any acceleration of the due date of such principal by reason of
mandatory or optional redemption or acceleration resulting from default or otherwise, other than any
advancement of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed
hereby shall be made in such amounts and at such times as such payments of principal would have
been due had there not been any such acceleration); and (ii) the reimbursement of any such payment
which is subsequently recovered from any owner pursuant to a final judgment by a court of
competent jurisdiction that such payment constitutes an avoidable preference to such owner within
the meaning of any applicable bankruptcy law. The amounts referred to in clauses (i) and (ii) of the
preceding sentence shall be referred to herein collectively as the "Insured Amounts." "Obligations"
shall mean:
City of Greencastle, Indiana
Waterworks Revenue and Refunding Revenue Bonds of 2001
Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in
® writing by registered or certified mail, or upon receipt of written notice by registered or certified
mail, by the Insurer from the Paying Agent or any owner of an Obligation the payment of an Insured
Amount for which is then due, that such required payment has not been made, the Insurer on the due
date of such payment or within one business day after receipt of notice of such nonpayment,
whichever is later, will make a deposit of funds, in an account with State Street Bank and Trust
Company, N.A., in New York, New York, or its successor, sufficient for the payment of any such
Insured Amounts which are then due. Upon presentment and surrender of such Obligations or
presentment of such other proof of ownership of the Obligations, together with any appropriate
instruments of assignment to evidence the assignment of the Insured Amounts due on the
Obligations as are paid by the Insurer, and appropriate instruments to effect the appointment of the
Insurer as agent for such owners of the Obligations in any legal proceeding related to payment of
Insured Amounts on the Obligations, such instruments being in a form satisfactory to State Street
Bank and Trust Company, N.A., State Street Bank and Trust Company, N.A. shall disburse to such
owners or the Paying Agent payment of the Insured Amounts due on such Obligations, less any
amount held by the Paying Agent for the payment of such Insured Amounts and legally available
therefor. This policy does not insure against loss of any prepayment premium which may at any time
be payable with respect to any Obligation.
As used herein, the term 'owner" shall mean the registered owner of any Obligation as
indicated in the books maintained by the Paying Agent, the Issuer, or any designee of the Issuer for
such purpose. The term owner shall not include the Issuer or any party whose agreement with the
issuer constitutes the underlying security for the Obligations.
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838519.2
Any service of process on the Insurer may be made to the Insurer at its offices located at 113
King Street, Armonk, New York 10504 and such service of process shall be valid and binding.
This policy is non - cancelable for any reason. The premium on this policy is not refundable
for any reason including the payment. prior to maturity of the Obligations.
MBIA INSURANCE CORPORATION
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:
40 NOTICE: Signature(s) must be guaranteed NOTICE: The signature to this assignment
by an eligible guarantor institution must correspond with the name as it appears on
participating in a Securities Transfer the face of the within bond in every particular,
Association recognized signature guarantee without alteration or enlargement or any change
program. whatsoever.
See. 7. Authorization for Preparation and Sale of the BANS and the Bonds: Escrow
Agreement Official Statement: Municipal Bond Insurance (a) The Clerk- Treasurer is hereby
authorized and directed to have the BANS and the Bonds prepared, and the Mayor and the Clerk-
Treasurer are hereby authorized and directed to execute and attest the BANS and the Bonds in the
form and manner provided herein. If the Bonds issued to refund the Refunded Bonds are sold on a
negotiated basis, the Clerk- Treasurer is hereby authorized and directed to deliver said Bonds to a
purchaser to be selected by either the Mayor, the Clerk - Treasurer, or both, with the advice of the
El
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838519.2
® City's financial advisor ( "Underwriter ") in accordance with a Purchase Contract ( "Purchase
Contract ") between the City and the Underwriter. The Mayor and the Clerk - Treasurer are authorized
to execute the Purchase Contract and deliver said Bonds to the Underwriter so long as their terms
are consistent with this ordinance. Such Purchase Contract shall establish a final principal amount,
purchase price, interest rates, maturity schedule, optional redemption features, and term bond
mandatory redemptions, if any.
(b) The Clerk- Treasurer is hereby authorized and directed to deliver the BANS and the
Bonds to the respective purchasers thereof. At the time of delivery of the BANS and the Bonds, the
Clerk- Treasurer shall collect the full amount which the respective purchasers have agreed to pay
therefor, which amount shall not be less than 99% of the face value of said BANS and not less than
99% of the face value of said Bonds, as the case may be.
® (c) The Clerk - Treasurer is hereby authorized to appoint a financial institution to serve
as escrow trustee ( "Escrow Trustee ") for the Refunded Bonds in accordance with the terns of the
Escrow Agreement, between the City and the Escrow Trustee ( "Escrow Agreement "). The
substantially final form of Escrow Agreement attached hereto is hereby approved by the Common
Council, and the Mayor and the Clerk - Treasurer are hereby authorized and directed to complete,
execute and attest the same on behalf of the City so long as its provisions are consistent with this
ordinance.
(d) The execution, by either the Mayor, the Clerk- Treasurer, the purchaser of the Bonds,
or the City's financial advisor, of a subscription for United States Treasury Obligations -- State and
Local Government Series for investments of proceeds of the Bonds to be held under the Escrow
• Agreement in a manner consistent with this ordinance is hereby approved.
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838519.2
0 (e) Distribution of an Official Statement (preliminary and final) for the Bonds prepared
by Crowe Chizek and Company, LLP, on behalf of the City, is hereby authorized and approved and
the Mayor or the Clerk - Treasurer are authorized and directed to execute the preliminary Official
Statement on behalf of the City in a form consistent with this ordinance. The Mayor or the Clerk-
Treasurer is hereby authorized to designate the Official Statement as "nearly final' for purposes of
Rule 15c2 -12 promulgated by the Securities Exchange Commission.
(f) The Common Council authorizes the purchase of the Municipal Bond Insurance
Policy guaranteeing the payment of the Bonds from MBIA. The cost of obtaining the Municipal
Bond Insurance Policy shall be considered as a part of the cost of the issuance of the Bonds and shall
be paid out of the proceeds of the Bonds or out of other funds of the waterworks system.
Sec. 8. Bond Sale Notice If the Bonds will be sold at a competitive bond sale, prior to the
® sale of said Bonds, the Clerk- Treasurer shall cause to be published either (i) a notice of bond sale
in the Banner- Graphic the only newspaper published in the City of Greencastle, Indiana, two times,
at least one week apart, the first publication made at least fifteen (15) days before the date of the sale
and the second publication being made at least three (3) days before the date of the sale, or (ii) a
notice of intent to sell bonds in the Banner- Graphic and the Court & Commercial Record all in
accordance with IC 5 -1 -11 and IC 5 -3 -1. A notice of sale may also be published one time in the
Court & Commercial Record and a notice of summary notice may also be published in The Bond
Buyer in New York, New York. The notice shall state the character and amount of the Bonds, the
maximum rate or rates of interest thereon, the terms and conditions upon which bids will be received
and the sale made, and such other information as the Clerk- Treasurer and the attorneys employed
by the City shall deem advisable and any summary notice may contain any information deemed so
•
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® advisable. The notice may provide, among other things, that each bid shall be accompanied by a
certified or cashier's check to guarantee performance on the part of the bidder. If a financial surety
bond is used, it must be from an insurance company licensed to issue such bond in the State of
Indiana, and such bond must be submitted to the City prior to the opening of the bids. The financial
surety bond must identify each bidder whose good faith deposit is guaranteed by such financial
surety bond. If the Bonds are awarded to a bidder utilizing a financial surety bond, then that
purchaser is required to submit to the City a certified or cashier's check (or wire transfer such amount
as instructed by the City) not later than 3:30 p.m. (Greencastle time) on the next business day
following the award. If such good faith deposit is not received by that time, the financial surety bond
shall be drawn by the City to satisfy the good faith deposit required. In the event the successful
bidder shall fail or refuse to accept delivery of the Bonds and pay for the same as soon as the Bonds
are ready for delivery, or at the time fixed in the notice of sale, then said check and the proceeds
thereof shall be the property of the City and shall be considered as its liquidated damages on account
of such default. Bidders for said Bonds will be required to name the rate or rates of interest which
the Bonds are to bear, not exceeding the maximum rate hereinbefore fixed, and such interest rate or
rates shall be in multiples of one - eighth (1/8) or one - twentieth (1/20) of one percent (1%). The rate
bid on a maturity shall be equal to or greater than the rate bid on the immediately preceding maturity.
No conditional bid or bid for less than 99% of the face amount of the Bonds will be considered. The
City reserves the right to adjust the maturity schedule based upon the rates bid by the successful
bidder following the sale in order to accomplish as level annual debt service as practicable pursuant
to Section 2(b). The opinion of Ice Miller, bond counsel of Indianapolis, Indiana, approving the
legality of said Bonds will be furnished to the purchaser at the expense of the City.
838519.2
The Bonds shall be awarded by the Clerk- Treasurer to the best bidder who has submitted his
bid in accordance with the terms of this ordinance, IC 5 -1 -11 and the notice of sale. The best bidder
will be the one who offers the lowest net interest cost to the City, to be determined by computing the
total interest on all of the Bonds and adding thereto the discount bid, if any, and deducting the
premium bid, if any. The right to reject any and all bids shall be reserved. If an acceptable bid is
not received on the date of sale, the sale may be continued from day to day thereafter without further
advertisement for a period of thirty (30) days, during which time no bid which provides a higher net
interest cost to the City than the best bid received at the time of the advertised sale will be
considered.
Sec. 9. Use of Proceeds for Project and Costs of Issuance (a) Concurrently with the
delivery of the Bonds, the Clerk - Treasurer shall acquire, with a portion of the proceeds of the Bonds
® and cash on hand, direct obligations of or obligations the principal and interest on which are
unconditionally guaranteed by, the United States of America ( "Government Obligations ") to be used,
together with certain cash from the proceeds of the Bonds and cash on hand as set forth in the
Escrow Agreement, to refund and legally defease the Refunded Bonds all as set forth in the Escrow
Agreement. In order to refund the Refunded Bonds, the Clerk- Treasurer shall deposit Government
Obligations and certain cash with the Escrow Trustee under the Escrow Agreement in an amount
sufficient to provide moneys for the payment of the principal of and interest and redemption
premium on the Refunded Bonds from the date of delivery of the Bonds to July 1, 2003, the earliest
date on which the Refunded Bonds may be called for redemption.
E
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0 The City shall obtain a verification of an accountant as to the sufficiency of the funds
deposited in the "Trust Account under the Escrow Agreement to accomplish said refunding and legal
defeasance of the Refunded Bonds.
(b) The remaining proceeds of the Bonds, after allocating the amount needed to
accomplish the refunding of the Refunded Bonds in accordance with this Section 9 and to the extent
not used to refund BAN s, 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 Greencastle, Waterworks Construction Account" ( "Construction Account "). All funds
deposited to the credit of said Sinking Fund or Construction Account 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 IC 5 -13, as amended and
supplemented. The funds in the Construction Account 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 and
for the remaining expenses of issuance of the Bonds. The cost of obtaining the legal services of Ice
Miller, shall be considered as a part of the cost of the refunding and the Project on account of which
the BANS and Bonds are issued. Any balance or balances remaining unexpended in such special
account or accounts after completion of the Project and the funding of the Trust Account, 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 said 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.
Ld
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® Sec. 10. Accrued Interest The accrued interest received at the time of delivery of the Bonds,
if any, and premium, if any, shall be deposited in the Sinking Fund created in Section 15, to be
credited to the Bond and Interest Account of the Sinking Fund.
Sec. 11. Financial Records and Accounts; Continuing_ Disclosure City shall keep proper
records and books of account, separate from all of its other records and accounts, in which complete
and correct entries shall be made showing all revenues received on account of the operation of the
waterworks and all disbursements made therefrom and all transactions relating to the utility. The
City shall maintain on file the audited financial statements of the utility prepared by the State Board
of Accounts and any owner of the Bonds, upon request, shall be provided with the most recent audit
prepared by the State Board of Accounts or any successor thereto.
The substantially final form of Continuing Disclosure Undertaking Agreement ( "Agreement ")
® attached hereto is hereby approved by the Common Council. If the Bonds are subject to Securities
and Exchange Commission Rule 15c2 -12, the Mayor or the Clerk- Treasurer are hereby authorized
and directed to complete, execute and attest the Agreement on behalf of the City. Notwithstanding
any other provisions of this ordinance, failure of the City to comply with the Agreement shall not
be considered an event of default under the Bonds or this ordinance.
Sec. 12. Pledee of Net Revenues The interest on and the principal of the Bonds issued
pursuant to the provisions of this ordinance, and any bonds hereafter issued on a parity therewith,
shall constitute a first charge on all the Net Revenues, and such Net Revenues are hereby irrevocably
pledged to the payment of the interest on and principal of such Bonds, to the extent necessary for that
purpose.
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838519.2
Sec. 13. Revenue Fund All revenues derived from the operation of the waterworks and
from the collection of water rates and charges shall be deposited in the Revenue Fund, hereby
created, and segregated and deposited as set forth in this ordinance. Of these revenues the proper
and reasonable expenses of operation, repair and maintenance of the works shall be paid, the
principal and interest of all bonds and fiscal agency charges of registrars or paying agents shall be
paid, the reserve shall be funded, and the costs of replacements, extensions, additions and
improvements to the waterworks shall be paid.
Sec. 14. Operation and Maintenance Fund . Moneys heretofore accumulated pursuant to
the ordinance authorizing the Refunded Bonds in an amount equal to the expenses of operation,
repair and maintenance of the waterworks for a two -month period, as calculated by the Clerk -
Treasurer, with the advice of the City's financial advisor, shall be credited to and become a part of
the Operation and Maintenance Fund created hereby as of the date of the legal defeasance of the
Refunded Bonds. On the last day of each calendar month, revenues of the waterworks shall
thereafter be transferred from the Revenue Fund to the Operation and Maintenance Fund. The
balance maintained in this 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 waterworks on a day -to -day basis. Any monies in said Fund may be transferred to
the Waterworks Sinking Fund if necessary to prevent a default in the payment of principal of or
interest on the outstanding bonds of the waterworks.
Sec. 15. Waterworks Sinking Fund (a) There is hereby created a sinking fund for the
is payment of the principal of and interest on revenue bonds which by their terms are payable from the
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W Net Revenues of the waterworks and the payment of any fiscal agency charges in connection with
the payment of bonds, which fund shall be designated the "Waterworks Sinking Fund" (herein,
"Waterworks Sinking Fund" or "Sinking Fund "). There shall be set aside and deposited in the
Sinking Fund, as available, and as hereinafter provided, a sufficient amount of the Net Revenues of
the waterworks to meet the requirements of the Bond and Interest Account and Reserve Account
hereby created in the Sinking Fund. Such payments shall continue until the balances in the Bond and
Interest Account and the Reserve Account, equal the principal of and interest on all of the then
outstanding bonds of the waterworks to their final maturity.
(b) Bond and Interest Account Any moneys heretofore accumulated to pay principal and
interest for the Refunded Bonds shall be credited to and become a part of the Trust Account under
the Escrow Agreement and shall be applied on the first payments made from the Trust Account.
e Beginning as of the date of issuance of the Bonds, there shall be credited on the last day of each
calendar month from the Revenue Fund to the Bond and Interest Account an amount of the Net
Revenues equal to at least one -sixth (1/6) of the interest and at least one -sixth (1/6) of the principal
on all then outstanding bonds payable on the then next succeeding interest and principal payment
date until the amount of interest and principal payable on the then next succeeding interest and
principal payment date 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.
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(c) Reserve Account On the date of delivery of the Bonds, funds on hand of the
waterworks, Bond proceeds or a combination thereof may be deposited into the Reserve Account.
The initial deposit or the balance accumulated in the Reserve Account shall equal but not exceed the
least of (i) the maximum annual debt service on the Bonds, (ii) 125% of the average annual debt
service on the Bonds or (iii) 10% of the proceeds of the Bonds ( "Reserve Requirement "). If the
initial deposit into the Reserve Account does not equal the Reserve Requirement or if no deposit is
made, an amount of Net Revenues shall be credited to the 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 years of
the date of delivery of the Bonds. The Reserve Account may be satisfied with cash, a debt service
reserve surety bond or a combination thereof. The surety bond must be issued by an insurance
It company rated in the highest rating category by Standard & Poor's Corporation and Moody's
Investors Service. The 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 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 Reserve Account shall be made up from the next available Net Revenues
remaining after credits into the Bond and Interest Account. Any moneys in the Reserve Account in
excess of the Reserve Requirement shall either be transferred to the Waterworks Improvement Fund
or be used for the purchase of outstanding bonds or installments of principal of fully registered
bonds.
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Sec. 16. Waterworks Improvement Fund Any excess revenues may be transferred or
credited from the Revenue Fund to a fund designated the "Waterworks Improvement Fund," and said
Fund shall be used for improvements, replacements, additions and extensions of the waterworks or
for any other lawful purpose. As of the date of the legal defeasance of the Refunded Bonds, any
other available and unrestricted moneys of the waterworks not otherwise deposited pursuant to the
terms of this ordinance shall be transferred to the Waterworks Improvement Fund and used for
waterworks capital improvements or for any other lawful purpose. Moneys in the Waterworks
Improvement Fund shall be transferred to the Waterworks 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 deficiencies in credits to or minimum balance in the Reserve Account of the
Waterworks Sinking Fund or may be transferred to the Operation and Maintenance Fund to meet
unforeseen contingencies in the operation, repair and maintenance of the waterworks.
Sec. 17. Investment of Funds The Sinking Fund shall be deposited in and maintained as a
separate account or accounts from all other accounts of the City. The Operation and Maintenance
Fund and the Waterworks Improvement Fund may be maintained in a single account, or accounts,
but such account, or accounts, shall likewise be maintained separate and apart from all other
accounts of the City and apart from the Sinking Fund account or accounts. All moneys deposited
in the accounts shall be deposited, held and secured as public funds in accordance with the public
depository laws of the State of Indiana; provided that moneys therein may be invested in obligations
in accordance with the applicable laws, including particularly Indiana Code, Title 5, Article 13, as
amended or supplemented, and in the event of such investment the income therefrom shall become
a part of the funds invested and shall be used only as provided in this ordinance.
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Sec. 18. Defeasance of the Bonds If, when the Bonds or a portion thereof 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 Bonds or a portion thereof 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 Bonds or a portion thereof then outstanding shall be paid; or (i) sufficient
moneys, or (ii) direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America, the principal of and the interest on
which when due will provide sufficient moneys for such purpose, 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 Bonds or any designated portion thereof issued hereunder shall no longer be
deemed outstanding or entitled to the pledge of the Net Revenues of the City's waterworks.
41 Sec. 19. Rate Covenant The City shall by ordinance establish, maintain and collect just and
equitable rates and charges for facilities and services afforded and rendered by said waterworks,
which shall, to the extent permitted by law, produce sufficient revenues at all times to pay all the
legal and other necessary expenses incident to the operation of such waterworks, to include
maintenance costs, operating charges, upkeep, repairs, depreciation, interest charges, to provide for
payment of the sums to provide a sinking fund for the liquidation of bonds or other obligations and
to provide a debt service reserve for bonds or other obligations, including leases, to provide adequate
funds to be used as working capital, as well as funds for making extensions, additions, and
replacements, and also, for the payment of any taxes that may be assessed against such waterworks,
it being the intent and purpose hereof that such charges shall produce an income sufficient to
maintain such waterworks property in a sound physical and financial condition to render adequate
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and efficient service. So long as any of the Bonds are outstanding, none of the facilities or services
afforded or rendered by said system shall be furnished without a reasonable and just charge being
made therefor. The City shall pay like charges for any and all services rendered by said waterworks
to the City, and all such payments shall be deemed to be revenues of the waterworks. 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 and said
requirements of the Waterworks Sinking Fund.
See. 20. Additional Bond Provisions The City reserves the right to authorize and issue
additional BANS at any time ranking on a parity with the BANS. The City also reserves the right to
authorize and issue additional bonds payable out of the Net Revenues of its waterworks ranking on
a parity with the Bonds for the purpose of financing the cost of future additions, extensions and
0 improvements to its waterworks, or to refund obligations, subject to the following conditions:
(a) The interest on and principal of all bonds or other obligations payable from the Net
Revenues of the waterworks shall have been paid to date in accordance with the terms thereof, and
all credits required to be made into the Waterworks Sinking Fund and the accounts thereof shall have
been made to date.
(b) The amount of Net Revenues of the waterworks in the fiscal year immediately
preceding the issuance of any such bonds ranking on a parity with the Bonds shall be not less than
one hundred twenty -five percent (125 %) of the maximum annual interest and principal requirements
of the then outstanding bonds and the additional parity bonds proposed to be issued; or, prior to the
issuance of the parity bonds the water utility system rates and charges shall be increased sufficiently
® so that said increased rates and charges applied to the previous year's operations would have
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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 all bonds payable from the revenues
of the waterworks, including the additional parity bonds proposed to be issued. For purposes of this
subsection, the records of the waterworks shall be analyzed and all showings prepared by a certified
public accountant employed by the City for that purpose.
(c) The principal, or mandatory sinking fund redemption dates, of the additional parity
bonds shall be payable semiannually on the first days of January and July and the interest on the
additional parity bonds shall be payable semiannually on the first days of January and July.
Sec. 21. Further Covenants of the City; Maintenance, Insurance, Pledge Not to Encumber,
Subordinate Indebtedness. and Contract with Bondholders For the purpose of further safeguarding
the interests of the owners of the Bonds, it is hereby specifically provided as follows:
® (a) All contracts let by the City in connection with the construction of the Project 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 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) The Project shall be constructed under plans and specifications approved by a
competent engineer designated by the City. All estimates for work done or material furnished shall
first be checked by the engineer and approved by the City.
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838519.2
(c) So long as any of the Bonds or BANS are outstanding, the City shall at all times
maintain the waterworks system in good condition, and operate the same in an efficient manner and
at a reasonable cost.
(d) So long as any of the Bonds or BANs are outstanding, the City shall maintain
insurance on the insurable parts of the system, of a kind and in an amount such as is usually 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.
As an alternative to maintaining such insurance, the City may maintain a self - insurance
program with catastrophic or similar coverage so long as such program meets the requirements of
any applicable laws or regulations and is maintained in a manner consistent with programs
maintained by similarly situated municipalities.
All insurance or self - insurance proceeds shall be used either in replacing or restoring the
property destroyed or damaged, or shall be deposited in the Sinking Fund.
(e) So long as any of the Bonds or BANS are outstanding, the City shall not mortgage,
pledge or otherwise encumber the property and plant of its waterworks system, or any part thereof,
and shall not sell, lease or otherwise dispose of any part of the same, excepting only such machinery,
equipment or property which as may become worn out, obsolete or no longer suitable for use in the
waterworks.
(f) Except as otherwise specifically provided in Section 20 of this ordinance, so long as
any of the Bonds are outstanding, no additional bonds or other obligations pledging any portion of
the revenues of the system shall be authorized, issued or executed by the City, except such as shall
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® be made junior and subordinate in all respects to the Bonds, unless all of the Bonds are redeemed
or defeased coincidentally with the delivery of such additional bonds or other obligations.
(g) The provisions of this ordinance shall constitute a contract by and between the City
and the owners of the Bonds and BANS herein authorized, all the terms of which shall be enforceable
by any BAN holder or bondholder by any and all appropriate proceedings in law or in equity. After
the issuance of the Bonds or BANS, this ordinance shall not be repealed, amended or modified in any
respect which will adversely affect the rights or interests of the owners of the Bonds or BANS nor
shall the Common Council or any other body of the City adopt any law, ordinance or resolution in
any way adversely affecting the rights of the holders of the BANS and the Bonds so long as any of
the Bonds or BANS, or the interest thereon, remain outstanding or unpaid. Except in the case of
changes described in Section 22(a) -(f), this ordinance may be amended, however, without the
consent of BAN or bondowners, if the Common Council determines, in its sole discretion, that such
amendment would not adversely affect the owners of the Bonds or BANs
(h) The provisions of this ordinance shall be construed to create a trust in the proceeds
of the sale of the Bonds and BANS herein authorized for the uses and purposes herein set forth, and
the owners of the Bonds and BANS shall retain a lien on such proceeds until the same are applied
in accordance with the provisions of this ordinance and of said governing Act. The provisions of
this ordinance shall also be construed to create a trust in the Net Revenues herein directed to be set
apart and paid into the Sinking Fund for the uses and purposes of that Fund as in this ordinance set
forth. The owners of the Bonds shall have all the rights, remedies and privileges set forth under
Indiana law in the event the City shall fail or refuse to fix and collect sufficient rates and charges,
or shall fail or refuse to operate and maintain said system and to apply properly the revenues derived
838519.2
® from the operation thereof, or if there be a default in the payment of the interest on or principal of
the Bonds.
(i) None of the provisions of this ordinance shall be construed as requiring the
expenditure of any funds of the City derived from any sources other than the proceeds of the Bonds,
the BANS and the operation of the waterworks system.
Sec. 22. Amendments with Consent of Bondholders 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 outstanding shall have the right from time to time, to consent to and approve the adoption by
the Common Council of the City of such ordinance or ordinances supplemental hereto or amendatory
hereof, as shall be deemed necessary or desirable by the City for the purpose of modifying, altering,
® amending, adding to or rescinding in any particular any of the terms or provisions contained in this
ordinance, or in any supplemental ordinance; provided, however, that nothing herein contained shall
permit or be construed as permitting:
(a) An extension of the maturity of the principal of or interest on, or any
mandatory sinking fund redemption date for, 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 revenues or Net Revenues of
the waterworks ranking prior to the pledge thereof created by this ordinance; or
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" ( d ) A p r e f e r e n c e o r p r i o r i t y o f a n y B o n d o r B o n d s i s s u e d p u r s u a n t t o t h i s
o r d i n a n c e o v e r a n y o t h e r B o n d o r B o n d s i s s u e d p u r s u a n t t o t h e p r o v i s i o n s o f t h i s o r d i n a n c e ;
o r
( e ) A r e d u c t i o n i n t h e a g g r e g a t e p r i n c i p a l a m o u n t o f t h e B o n d s r e q u i r e d f o r
c o n s e n t t o s u c h s u p p l e m e n t a l o r d i n a n c e ; o r
( f ) A r e d u c t i o n i n t h e R e s e r v e R e q u i r e m e n t .
I f t h e o w n e r s o f n o t l e s s t h a n s i x t y - s i x a n d t w o - t h i r d s p e r c e n t ( 6 6 2 / 3 % ) i n a g g r e g a t e
p r i n c i p a l a m o u n t o f t h e B o n d s o u t s t a n d i n g a t t h e t i m e o f a d o p t i o n o f s u c h s u p p l e m e n t a l o r d i n a n c e
s h a l l h a v e c o n s e n t e d t o a n d a p p r o v e d t h e a d o p t i o n t h e r e o f b y w r i t t e n i n s t r u m e n t t o b e m a i n t a i n e d
o n f i l e i n t h e o f f i c e o f t h e C l e r k - T r e a s u r e r o f t h e C i t y , n o o w n e r o f a n y B o n d i s s u e d p u r s u a n t t o t h i s
o r d i n a n c e s h a l l h a v e a n y r i g h t t o o b j e c t t o t h e a d o p t i o n o f s u c h s u p p l e m e n t a l o r d i n a n c e o r t o o b j e c t
" t o a n y o f t h e t e r m s a n d p r o v i s i o n s c o n t a i n e d t h e r e i n o r t h e o p e r a t i o n t h e r e o f , o r i n a n y m a n n e r t o
q u e s t i o n t h e p r o p r i e t y o f t h e a d o p t i o n t h e r e o f , o r t o e n j o i n o r r e s t r a i n t h e C o m m o n C o u n c i l o f t h e
C i t y f r o m a d o p t i n g t h e s a m e , o r f r o m t a k i n g a n y a c t i o n p u r s u a n t t o t h e p r o v i s i o n s t h e r e o f . U p o n t h e
a d o p t i o n o f a n y s u p p l e m e n t a l o r d i n a n c e p u r s u a n t t o t h e p r o v i s i o n s o f t h i s s e c t i o n , t h i s o r d i n a n c e
s h a l l b e , a n d s h a l l b e d e e m e d , m o d i f i e d a n d a m e n d e d i n a c c o r d a n c e t h e r e w i t h , a n d t h e r e s p e c t i v e
r i g h t s , d u t i e s a n d o b l i g a t i o n s u n d e r t h i s o r d i n a n c e o f t h e C i t y a n d a l l o w n e r s o f B o n d s t h e n
o u t s t a n d i n g , s h a l l t h e r e a f t e r b e d e t e r m i n e d , e x e r c i s e d a n d e n f o r c e d i n a c c o r d a n c e w i t h t h i s
o r d i n a n c e , s u b j e c t i n a l l r e s p e c t s t o s u c h m o d i f i c a t i o n s a n d a m e n d m e n t s . N o t w i t h s t a n d i n g a n y t h i n g
c o n t a i n e d i n t h e f o r e g o i n g p r o v i s i o n s o f t h i s o r d i n a n c e , t h e r i g h t s a n d o b l i g a t i o n s o f t h e C i t y a n d o f
t h e o w n e r s o f t h e B o n d s a u t h o r i z e d b y t h i s o r d i n a n c e , a n d t h e t e r m s a n d p r o v i s i o n s o f t h e B o n d s a n d
s
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8 3 8 5 1 9 . 2
® this ordinance, or any supplemental or amendatory 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 then outstanding.
Sec. 23. Tax Covenants In order to preserve the exclusion of interest on the Bonds and
BANS from gross income for federal tax purposes under Section 103 of the Internal Revenue Code
of 1986 as existing on the date of issuance of the Bonds or BANS, as the case may be ( "Code ") and
as an inducement to purchasers of the Bonds and BANS, the City represents, covenants and agrees
that:
(a) The waterworks will be available for use by members of the general public. Use by
a member of the general public means use by natural persons not engaged in a trade or business. No
person or entity other than the City or another state or local governmental unit will use more than
10% of the proceeds of the Bonds or BANS, as the case may be, or property financed by the Bond
® or BAN 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 Bond or BAN
proceeds or will have any actual or beneficial use of such property pursuant to a lease, management,
service or incentive payment contract, an arrangement including take -or -pay or other type of output
contracts or any other type of arrangement that conveys other special legal entitlements and
differentiates that person's or entity's use of such property from use by the general public, unless such
uses in the aggregate relate to no more than 10% of the proceeds of the Bonds or BANS, as the case
may be. If the City enters into a management contract for all or a portion of the waterworks, the
terms of the contract will comply with the Regulations and IRS Revenue Procedure 97 -13, as
amended, supplemented or superseded from time to time, so that the contract will not give rise to
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® private business use under the Code and the Regulations unless such use in the aggregate will not
relate to more than 10% of the proceeds of the Bonds or BANS, as the case may be.
(b) No more than 10% of the principal of or interest on the Bonds or BANS is (under the
terms of the Bonds, BANs, this ordinance or any underlying arrangement), directly or indirectly,
secured by an interest in property used or to be used for private business use or payments in respect
of such property, or to be derived from payments (whether or not to the City) in respect of such
property or borrowed money used or to be used for a private business use.
(c) No more than 5 % of the Bond or BAN proceeds will be loaned to any person or entity
other than another state or local governmental unit. No more than 5% of the Bond or BAN 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 Bond or BAN proceeds.
(d) The City reasonably expects, as of the date hereof, that the Bonds and BANs will not
meet either the private business use test described in paragraphs (a) and (b) above or the private loan
test described in paragraph (c) above during the entire term of the Bonds and BANs, as the case may
be.
(e) No more than 5% of the proceeds of the Bonds or BANs will be attributable to private
business use as described in (a) and private security or payments described in (b) attributable to
unrelated or disproportionate private business use. For this purpose, the private business use test is
applied by taking into account only use that is not related to any government use of proceeds of the
issue (Unrelated Use) and use that is related but disproportionate to any governmental use of those
proceeds (Disproportionate Use).
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® (f) The City will not take any action nor fail to take any action with respect to the Bonds
or BANS that would result in the loss of the exclusion from gross income for federal tax purposes
of interest on the Bonds or BANS pursuant to Section 103 of the Code, nor will the City act in any
other manner which would adversely affect such exclusion, and it will not make any investment or
do any other act or thing during the period that the Bonds and BANS are outstanding which would
cause the Bonds or BANS to be private activity bonds under the meaning of Section 141 of the Code.
(g) It shall be not an event of default under this ordinance if the interest on any Bonds
or BANS is not excludable from gross income for federal tax purposes or otherwise pursuant to any
provision of the Code which is not currently in effect and in existence on the date of issuance of the
Bond or BANS, as the case may be.
(h) The City represents that it will rebate any arbitrage profits to the United States in
® accordance with the Code.
(i) The City represents that:
(1) The Bonds and BANs are not private activity bonds as defined in Section 141
of the Code;
(2) The City hereby designates the Bonds and BANS as qualified tax- exempt
obligations for purposes of Section 265(b) of the Code;
(3) The reasonably anticipated amount of qualified tax - exempt obligations
(including qualified 501(c)(3) obligations and tax- exempt leases but excluding other private
activity bonds) which will be issued by the City and all entities subordinate to the City during
2001 does not exceed $10,000,000; and
C]
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® (4) The City has not and will not designate more than $10,000,000 of qualified
tax - exempt obligations during 2001.
Therefore, the Bonds and BANS qualify for the exception in the Code from the disallowance
of 100% of the deduction by financial institutions of interest expense allocable to newly acquired
tax- exempt obligations.
0) These covenants are based solely on current law in effect and in existence on the date
of delivery of the Bond or BANS, as the case may be.
Sec. 24. Issuance of BANS (a) The City, having satisfied all the statutory requirements for
the issuance of its Bonds, may elect to issue its BAN or BANS, pursuant to a Bond Anticipation Note
Purchase Agreement ( "Purchase Agreement ") to be entered into between the City and the purchaser
of the BAN or BANS. The Common Council hereby authorizes the issuance and execution of the
® BAN or BANS in lieu of initially issuing the Bonds to provide interim financing for the Project until
permanent financing becomes available. It shall not be necessary for the City to repeat the
procedures for the issuance of its Bonds, as the procedures followed before the issuance of the BAN
or BANS are for all purposes sufficient to authorize the issuance of the Bonds and the use of the
proceeds to repay the BAN or BANs.
(b) The Mayor and the Clerk- Treasurer are hereby authorized and directed to execute a
E
Purchase Agreement in such form or substance as they shall approve acting upon the advice of
counsel. The Mayor and the Clerk- Treasurer may also take such other actions or deliver such other
certificates as are necessary or desirable in connection with the issuance of the BANs or the Bonds
and the other documents needed for the financing as they deem necessary or desirable in connection
therewith.
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® Sec. 25. Noncompliance with Tax Covenants Notwithstanding any other provisions of this
ordinance, the covenants and authorizations contained in this ordinance ( "Tax Sections ") which are
designed to preserve the exclusion of interest on the Bonds and BANS 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.
Sec. 26. MBIA Requirements As long as the Municipal Bond Insurance Policy is in effect,
the City shall:
(a) Provide to MBIA any notice which is required to be given to any other party pursuant
to this ordinance; all notices required to be given to MBIA hereunder shall be in writing and shall
be sent by registered or certified mail addressed to MBIA Insurance Corporation, 113 King Street,
® Armonk, New York 10504 Attention: Insured Portfolio Management.
(b) Provide to MBIA notice of any amendment to this ordinance permitted by Section
21 hereof which amendment does not require consent of the holders of the Bonds,
(c) Request and receive consent from MBIA prior to amending or supplementing this
ordinance to the extent that the amendment or supplement requires consent of the holders of the
Bonds pursuant to Section 22 hereof,
(d) Send a copy of any amendment to this ordinance to Standard & Poor's Corporation,
provided such amendment requires the consent of MBIA pursuant to this Section 26(c) hereof,
(e) MBIA shall receive notice of the resignation or removal of the Paying Agent and the
appointment of a successor thereto,
11
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838519.2
® (f) MBIA shall receive copies of all notices required to be delivered to bondholders and,
on an annual basis, copies of the City's audited financial statements and annual budget.
(g) If the City shall fail to comply with any provision under this ordinance which
noncompliance shall provide a holder of the Bonds to pursue any available legal remedy against the
City, MBIA, acting alone, shall have the right to direct all remedies. MBIA shall be recognized as
the registered owner of each Bond which it insures for the purposes of exercising all rights and
privileges available to bondholders. In addition, MBIA shall have the same rights as the owners of
the Bonds which it insures to pursue all legal remedies.
Sec. 27. Conflicting Ordinances All ordinances and parts of ordinances in conflict herewith
are hereby repealed; provided, however, that this ordinance shall not be construed as adversely
affecting the rights of the owners of the Refunded Bonds.
® Sec. 28. Headings The headings or titles of the several sections shall be solely for
convenience of reference and shall not affect the meaning, construction or effect of this ordinance.
Sec. 29. Effective Date This ordinance shall be in full force and effect from and after its
passage and execution by the Mayor.
r < 1
L
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838519.2
Passed and adopted by the Common Council of the City of Greencastle this day
of 2001.
A
/"
Clerk- Treasurer
COMMON COUNCIL
- ZCA I
giresg Officer
Presented sby me to the Mayor of the City of Greencastle on the _�' day of
' 2001, at the hour of :4 Vim.
Clerk Treasurer
This ordinance approved and signed by me, the Mayor of the City of Greencastle, on the Ab l
day of _ 4L , 2001, at the hour of S' :� Vim.
Mayor
•
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