HomeMy Public PortalAbout080-2005 - Bond Ordinance - RP&LORDINANCE NO. 80-2005
AN ORDINANCE OF THE CITY OF RICHMOND AUTHORIZING THE ISSUANCE OF ELECTRIC UTILITY REVENUE BONDS FOR THE PURPOSE OF PROVIDING FUNDS TO APPLY ON THE COST OF THE CONSTRUCTION OF CERTAIN
ADDITIONS, EXTENSIONS AND IMPROVEMENTS TO THE MUNICIPAL ELECTRIC UTILITY OF SAID CITY, PROVIDING FOR 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 Richmond (the “City”) now owns and operates a municipal electric utility in said City in accordance with the provisions of Title 8, Article 1.5 of the Indiana Code,
as in effect on the date of delivery of the bonds herein authorized (the “Act”);
WHEREAS, the Common Council of the City now finds that certain additions, extensions and improvements to the electric utility are necessary; and that plans and estimates will be prepared
and filed by the engineers employed by the City for the construction of said additions, extensions and improvements, as more fully described on Exhibit A attached hereto (the “Project”),
which plans and estimates will be approved by all governmental authorities having jurisdiction; and
WHEREAS, the City has obtained engineers’ estimates of the costs for the construction of the Project and will advertise for and receive bids for the Project, which bids will be subject
to the City’s obtaining funds to pay for said Project; that on the basis of said estimates, the cost of the Project, including incidental expenses, is in an amount not to exceed $3,500,000;
and
WHEREAS, the Common Council now finds it is necessary to finance the costs of the Project by the issuance of electric utility revenue bonds in an aggregate principal amount not to exceed
$3,500,000 and, if necessary, bond anticipation notes ("BANS"); and
WHEREAS, the bonds to be issued pursuant to this ordinance will constitute a first charge against the Net Revenues (as hereinafter defined) of the electric utility, and are to be issued
subject to the provisions of the laws of the State of Indiana, including, without limitation, the Act, and the terms and restrictions of this ordinance; and
WHEREAS, the City desires to authorize the issuance of BANs hereunder, if necessary, to provide interim financing for the Project and to authorize the refunding of the BANs, if issued;
and
WHEREAS, the Common Council now finds that all conditions precedent to the adoption of an ordinance authorizing the issuance of said bonds and BANs have been complied with in accordance
with the provisions of the Act; now, therefore,
BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF RICHMOND, INDIANA:
Issuance of Bonds and BANs. The City, being the owner of and engaged in operating a municipal electric utility furnishing the City, its inhabitants and the residents adjacent thereto,
with electric current for public, domestic and industrial uses, now proceed with the Project, the cost of which shall not exceed $3,500,000, plus investment earnings on the BAN and
bond proceeds, without further authorization from the Common Council, and the financing thereof by the issuance of revenue bonds pursuant to and in the manner prescribed by the Act,
which revenue bonds shall be payable solely out of the Net Revenues (herein defined as gross revenues after deduction only for the reasonable expenses of operation, repair and maintenance,
including any payments required under the City’s Power Sales Contract with the Indiana Municipal Power Agency, including any amendments thereto) of said electric utility, including
all additions and improvements thereto and replacements thereof subsequently
constructed or acquired of said electric utility. The terms "municipal electric utility," "electric utility," "utility," "electric utility system," "system," and words of like import
where used in this ordinance shall be construed to mean and include the existing electric utility 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.
That said Project shall be constructed and installed in accordance with the plans and estimates to be prepared by the engineers employed for the Project.
The City shall issue, if necessary, its BANs for the purpose of procuring interim financing to apply on the costs of said Project. The City shall issue its BANs in an amount not to
exceed Three Million Five Hundred Thousand Dollars ($3,500,000) to be designated "Electric Utility Bond Anticipation Notes." The BANs shall be sold at not less than 99.5% of their
par value, shall be numbered consecutively from 1 upward, shall be in multiples of $1 as designated in the purchase agreement for the BANs, shall be dated as of the date of delivery
thereof, and shall bear interest at a rate not to exceed 5% per annum (the exact rate or rates to be determined through bidding or negotiation) payable either (i) at maturity or upon
redemption, or (ii) semiannually on the first day of the month, beginning with the first month which is at least six full months following delivery of the BANs, and semiannually thereafter.
Interest on the BANs is payable from (i) Net Revenues, subject to the prior payment of the bonds and any parity bonds, or (ii) in the case of interest at maturity or upon prepayment,
from proceeds of the bonds. Principal on the BANs will be payable no later than five (5) years from their date of delivery. The BANs are subject to renewal or extension at an interest
rate or rates not to exceed 5% per annum (the exact rate or rates to be determined
through bidding or negotiation). 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 may be paid for in installments.
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 may be payable from (i) the issuance of revenue bonds pursuant to and in the manner prescribed by the Act. The revenue bonds will be payable solely out
of and constitute a first charge against the Net Revenues of the electric utility of the City, including all additions and improvements thereto and replacements thereof subsequently
constructed or acquired.
The City shall issue its revenue bonds designated "Electric Utility Revenue Bonds of 200__" (to be completed with the year of issuance), in an aggregate principal amount not to exceed
Three Million Five Hundred Thousand Dollars ($3,500,000) for the purpose of procuring funds to apply on the funding of the costs of said Project, refunding the BANs, if issued, and
the payment of costs of issuance.
The bonds shall be issued in the denomination of One Thousand Dollars ($1,000) each or integral multiples thereof, numbered consecutively from 1 upward, dated as of the date of delivery
thereof or the first day of the month in with sold, as determined by the Controller, with the advice of the City's financial advisor, and shall bear interest at a rate or rates not
exceeding 6.25% per annum (the exact rate or rates to be determined by bidding), payable semiannually on March 1 and September 1, beginning on September 1, 2006. The bonds shall be
sold at a price not less than 99% of the par value thereof, and shall mature annually or be subject to mandatory sinking fund redemption on March 1, over a term not
exceed 15 years, and in such principal amounts as will achieve as level annual debt service as possible with $1,000 denominations.
Interest on the bonds and BANs shall be calculated according to a 360 day calendar year containing twelve 30 day months.
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 on March 1
in the years as determined by the successful bidder, but in no event later than the final serial maturity of the bonds as established 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.
Registrar and Paying Agent; Book Entry Provisions. The Controller is hereby authorized to contract with a qualified 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 Controller is hereby authorized to enter into such agreements
or understandings with the Registrar on the date of issuance of the bonds, or at any later date until all the bonds mature or are redeemed, as will enable the institution to perform
the services required of registrar and paying agent for the bonds as set forth herein. The Controller 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 Electric Utility Sinking Fund created in Section 13 hereof to pay the principal of and interest on the bonds
and fiscal agency charges.
As to the BANs and as to the bonds, if sold to a purchaser that does not object to such designation, the Controller may be designated the Registrar and Paying Agent and in that case
will be charged with the performance of all of the duties and responsibilities of Registrar and Paying Agent.
The principal of the bonds shall be payable at the principal office of the Paying Agent. All payments of interest on the bonds and all payments of interest and principal on the BANs
shall be paid by check mailed one business day prior to the payment date to the registered owners thereof as of the fifteenth day of the month immediately preceding such interest payment
date ("Record Date"), 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). Payments on the BANs may also be made by wire transfer.
All payments on the bonds and BANs shall be made in any lawful money 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 office of the Registrar by the registered owner thereof 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 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 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 or governmental charges are payable by the person requesting
such transfer or exchange. The City, Registrar and Paying Agent for the bonds may treat and consider the person in whose name such bonds are registered as the absolute owner thereof
for all purposes including for the purpose of receiving payment of, or on account of, the principal thereof and interest due thereon.
Interest on such 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 Record Date and on or before such interest payment date in which case they shall bear interest from such interest payment date, or unless the bonds are authenticated on or
before the Record Date preceding the first interest payment date in which case they shall bear interest from the original date of the bonds until the principal shall be fully paid.
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 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
interest on the bonds pursuant to this ordinance. The City and the Registrar and Paying Agent may treat as and deem the Depository Trust Company or CEDE & CO. to be the absolute bondholder
of each of the bonds for the purpose of (i) payment of the principal of and premium, if any, and interest on such bonds; (ii) giving notices of redemption and other notices permitted
to be given to bondholders with respect to such bonds; (iii) registering transfers with respect to such bonds; (iv) obtaining any consent or other action required or permitted to be
taken of or by bondholders; (v) voting; and (vi) for all other purposes whatsoever. The Paying Agent shall pay all principal of and premium, if any, and interest on the bonds only
to or upon the order of the
Depository Trust Company, and all such payments shall be valid and effective fully to satisfy and discharge the City’s and the Paying Agent’s obligations with respect to principal of
and premium, if any, and interest on the bonds to the extent of the sum or sums so paid. Upon delivery by the Depository Trust Company to the City of written notice to the effect that
the Depository Trust Company has determined to substitute a new nominee in place of CEDE & CO., and subject to the provisions herein with respect to consents, the words "CEDE & CO."
in this ordinance shall refer to such new nominee of the Depository Trust Company. Notwithstanding any other provision hereof to the contrary, so long as any bond is registered in
the name of CEDE & CO., as nominee of the Depository Trust Company, all payments with respect to the principal of and premium, if any, and interest on such bonds and all notices with
respect to such bonds shall be made and given, respectively, to the Depository Trust Company as provided in a representation letter from the City to the Depository Trust Company.
Upon receipt by the City of written notice from the Depository Trust Company to the effect that the Depository Trust Company is unable or unwilling to discharge its responsibilities
and no substitute depository willing to undertake the functions of the Depository Trust Company hereunder 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 a 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.
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.
The BANs may also be issued in book-entry form and in that case all of the provisions set forth in this Section 2 shall apply.
Redemption of BANs and Bonds. The BANs are prepayable by the City, in whole or in part, at any time upon seven days’ notice to the owner of the BANs without any premium.
The bonds of this issue may be issued to permit an optional call on any date after issuance or they may be redeemable at the option of the City no sooner than 7 years after the date
of the delivery of the bonds. In either case, the bonds are redeemable on any date after their first call date, on thirty (30) days’ notice, in whole or in part, in the order of maturity
determined by the City and by lot within a maturity, at face value together with either no premium or a premium not to exceed 2%, plus accrued interest to the date fixed for redemption.
The exact redemption
dates and premium, if any, shall be established by the Controller, with the advice of the City’s financial advisor, prior to the sale of the bonds.
If any bond is issued as a term bond, the Paying Agent shall credit against the mandatory sinking fund requirement for the bonds maturing as term bonds, and corresponding mandatory redemption
obligation, in the order determined by the City, any bonds maturing as term bonds which have previously been redeemed (otherwise than as a result of a previous mandatory redemption
requirement) or delivered to the Registrar for cancellation or purchased for cancellation by the Paying Agent and not theretofore applied as a credit against any redemption obligation.
Each bond maturing as a term bond so delivered or canceled shall be credited by the Paying Agent at 100% of the principal amount thereof against the mandatory sinking fund obligation
on such mandatory sinking fund date, and any excess of such amount shall be credited on future redemption obligations, and the principal amount of the bonds to be redeemed by operation
of the mandatory sinking fund requirement shall be accordingly reduced; provided, however, the Paying Agent shall credit only such bonds maturing as term bonds to the extent received
on or before forty-five (45) days preceding the applicable mandatory redemption date.
If less than an entire maturity is called for redemption at one time, the bonds to be redeemed shall be selected by lot within a maturity by the Registrar. Each One Thousand Dollars
($1,000) principal amount shall be considered a separate bond for purposes of optional and mandatory redemption. If some bonds are to be redeemed by optional 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 mailed to the registered owner not less than thirty (30) days prior to the date fixed for redemption at the address of the registered
owner
as shown on the registration record of the City as of the date which is forty-five (45) days prior to said redemption date, unless such redemption notice is waived by the owner of the
bond or bonds redeemed. The notice shall specify the date and place of redemption and sufficient identification of the bonds called for redemption. The place of redemption may be
determined by the City. Interest on the bonds so called for redemption shall cease on the redemption date fixed in such notice if sufficient funds are available at the place of redemption
to pay the redemption price on the date so named.
Execution. Each of said bonds and BANs shall be executed in the name of the City by the manual or facsimile signature of the Mayor, attested by the manual or facsimile signature of
its Clerk and the seal of the City shall be affixed, imprinted or impressed to or on each of said bonds and BANs manually, by facsimile or any other means; and said 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 said bonds and BANs. In case any officer
whose signature or facsimile signature appears on the bonds or BANs shall cease to be such officer before the delivery of the bonds or BANs, 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 bonds shall also be authenticated by the manual signature of an
authorized representative 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.
Said bonds and BANs 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.
Form of Bonds. The form and tenor of said bonds shall be substantially as follows, with such changes as are necessary, all blanks to be filled in properly prior to delivery thereof:
UNITED STATES OF AMERICA
STATE OF INDIANA COUNTY OF WAYNE
CITY OF RICHMOND
ELECTRIC UTILITY REVENUE BOND OF 200__
Interest Rate
Maturity Date
Original Date
Authentication Date
CUSIP
REGISTERED OWNER:
PRINCIPAL SUM:
The City of Richmond ("City"), in Wayne County, State of Indiana, for value received, hereby promises to pay to the Registered Owner named above ("Registered Owner") or registered assigns,
solely out of the special revenue fund hereinafter referred to, the Principal Sum set forth above ("Principal Sum") on the Maturity Date set forth above (unless this bond is subject
to and shall have been duly called for redemption and payment as provided for herein), and to pay interest hereon until the Principal Sum is paid at the Interest Rate per annum specified
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 ___________________, in which case it shall bear interest from the Original Date, which interest is payable semiannually on March 1 and September 1 beginning
________________, 200__. 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 City 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
immediately 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 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
bond shall be made in any lawful money of the United States of America, which on the dates of such payment, shall be legal tender for the payment of public and private debts.
THE CITY SHALL NOT BE OBLIGATED TO PAY THIS BOND OR THE INTEREST HEREON EXCEPT FROM THE HEREINAFTER DESCRIBED SPECIAL REVENUE 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.
This bond is one of an authorized issue of bonds of the City, of like date, tenor and effect, except as to numbering, interest rates and dates of maturity in the total amount of $_______________;
numbered consecutively from 1 up; issued for the purpose of providing funds to pay the costs of certain additions, extensions and improvements to the municipally owned electric utility
system of the City, [refunding notes issued in anticipation of bonds] and to pay issuance expenses. This bond is issued pursuant to an Ordinance adopted by the Common Council of the
City on the day of , 2005, entitled "An Ordinance of the City of Richmond authorizing the issuance of electric utility revenue bonds
for the purpose of providing funds to apply on the cost of the construction of certain additions, extensions and improvements to the municipal electric utility of said City, providing
for 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 8-1.5 as in effect on the date of delivery of the
bonds of this issue ("Act"), the proceeds of which are to be applied solely to the construction of said additions, extensions and improvements, [refunding said interim notes issued
in anticipation of bonds,] and the incidental expenses incurred in connection therewith.
The City 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)(3) of the Internal Revenue
Code of 1986 relating to the disallowance of 100% of the deduction for interest expense allocable to tax-exempt obligations.
Pursuant to the provisions of the Act and the Ordinance, the principal of and interest on this bond and all other bonds of said issue and any bonds hereafter issued on a parity herewith,
are payable solely from the Electric Utility 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 reasonable expenses of operation, repair and maintenance, including any payments required under the City’s Power Sales Contract with the Indiana Municipal Power Agency,
including any amendments thereto), of the electric utility, including the works authorized by the Ordinance to be acquired and constructed and all additions and improvements thereto
and replacements thereof subsequently constructed or acquired. This bond and the issue of which it is a part constitute a first charge upon the Net Revenues.
The City irrevocably pledges the entire Net Revenues of said electric utility to the prompt payment of the principal and interest on this bond, 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 service rendered by said utility as are
sufficient in each year for the payment of the proper and reasonable expenses of operation, repair and maintenance of said utility, and for the payment of the sums required to be paid
into its Sinking Fund under the provisions of the Ordinance and the Act. In the event 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 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 said works
for payment of (a) the interest on all bonds which by their terms are payable from the revenues of said electric utility, 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 said electric utility, as such principal shall fall due,
and (d) an additional amount as a margin of safety to [create and] maintain the reserve required by the Ordinance. Such required payments shall constitute a first charge upon all the
Net Revenues of said electric utility.
The bonds of this issue maturing on or after March 1, 20__, are redeemable at the option of the City on _________1, 20__, or any date thereafter, on thirty (30) days’ notice, in whole
or in part, in the order of maturity determined by the City and by lot within a maturity, at face value together with the following premiums:
____% if redeemed on ___________ 1, 20__,
or thereafter on or before __________, 20__;
____% if redeemed on _________1, 20__,
or thereafter on or before ___________, 20__;
____% if redeemed on _________ 1, 20__,
or thereafter prior to maturity;
plus in each case accrued interest to the date fixed for redemption.
[The bonds maturing on March 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:
_________ Term Bond
Date Amount
*
*Final Maturity]
If less than an entire maturity is called for redemption at one time, the bonds to be redeemed shall be selected by lot within a maturity by the Registrar. Each One Thousand Dollars
($1,000) principal amount shall be considered a separate bond for purposes of optional [and mandatory] redemption. [If some bonds are to be redeemed by optional 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 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. The notice shall specify the date and place of redemption and sufficient
identification of the bonds called for redemption. The place of redemption may be determined by the City. Interest on the bonds so called for redemption shall cease on the redemption
date fixed in such notice if sufficient funds are available at the place of redemption to pay the redemption price on the date so named.
If this bond shall not be presented for payment or redemption on the date fixed therefor, the City may deposit in trust with its depository bank, an amount sufficient to pay such bond
or the redemption price, as the case may be, and thereafter the registered owner shall look only to the 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 office of the Registrar, by the Registered Owner hereof in person, or by its 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 its 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 or exchanged without cost
to the Registered Owner except for any tax or governmental charges required with respect to the transfer. The City, the Registrar and any 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.
[The bonds shall be initially issued in a 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 OWNER OF THIS BOND, BY THE ACCEPTANCE HEREOF, HEREBY AGREES TO ALL THE TERMS AND PROVISIONS CONTAINED IN THE ORDINANCE. This bond is subject to defeasance prior to payment or redemption
as provided 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 bonds maturing in any one year are issuable only in fully registered form in the denomination of $1,000 or any integral multiple thereof not exceeding the aggregate principal amount
of the bonds maturing in such year.
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.
IN WITNESS WHEREOF, the City of Richmond, in Wayne County, Indiana, has caused this bond to be executed in its corporate name by the manual or facsimile signature of its Mayor, its corporate
seal to be hereunto affixed, imprinted or impressed by any means and attested manually or by facsimile by its Clerk.
CITY OF RICHMOND, INDIANA
(SEAL) By
Mayor
Attest:
Clerk
REGISTRAR’S CERTIFICATE OF AUTHENTICATION
This bond is one of the bonds described in the within-mentioned Ordinance.
, as Registrar
By
Authorized Representative
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto the within 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.
NOTICE: Signature(s) must be guaranteed by an eligible guarantor institution participating in a Securities Transfer Association recognized signature guarantee program.
NOTICE: The signature to this assignment must correspond with the name as it appears on the face of the within bond in every particular, without alteration or enlargement or any change
whatsoever.
Authorization for Preparation and Sale of the BANs and the Bonds. The Controller is hereby authorized and directed to have said bonds and BANs prepared, and the Mayor and Clerk are
hereby authorized and directed to execute and attest said bonds and BANs in the form and manner herein provided. The Controller is hereby authorized and directed to deliver said bonds
and BANs to the purchasers thereof after sale made in accordance with the provisions of this ordinance, provided that at the time of said delivery the Controller shall collect the full
amount which the purchaser has agreed to pay therefor, which amount shall not be less than 99.5% of the par value of the BANs or not less than 99% of the par value of said bonds, as
the case may be, plus accrued interest to the date of delivery. The City may receive payment on the BANs and bonds in installments. The bonds herein authorized, when fully paid for
and delivered to the purchaser, shall be the binding special revenue obligations of the City, payable out of the Net Revenues of the electric utility to be set aside into the Electric
Utility Sinking Fund, as herein provided. The proceeds derived from the sale of said bonds shall be and are hereby set aside for payment of the costs of the Project, the refunding
of the BANs, if issued, and the expenses necessarily incurred in connection with the bonds and BANs. The proper officers
of the City are hereby directed to draw all proper and necessary warrants, and to do whatever acts and things which may be necessary to carry out the provisions of this ordinance.
Sale of Bonds; Award of Bonds. Prior to the sale of said bonds, the Controller shall cause to be published either (i) a notice of bond sale in the Palladium-Item, the only newspaper
published in the City, 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 in the Palladium-Item and the Court & Commercial Record, all in accordance with IC 5 1 11 and IC
5 3 1. A notice or summary notice of sale may also be published in the Court & Commercial Record or in The Bond Buyer in New York, New York. The notice shall state the character and
amount of the bonds, the maximum rates of interest thereon, the terms and conditions upon which bids will be received and the sale made, and such other information as the Controller
and the attorneys employed by the City shall deem advisable, and any summary notice may contain any information deemed so advisable. Said notice shall provide, among other things,
that 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 that 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. The notice may provide, among other things, that each bid shall be accompanied by a certified or cashier’s check or a financial surety bond in the amount
of one percent (1%) of the principal amount of the bonds 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 bonds. 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. (Richmond
Time) on the next business day following the award. 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. No conditional bids or bids for less than 99% of the par value of the bonds will be considered. 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.
The bonds shall be awarded by the Controller to the best bidder who has submitted its bid in accordance with the terms of this ordinance and the notice. 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 to their maturities and deducting therefrom the premium
bid, if any. The right to reject any and all bids is hereby 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.
Financial Records and Accounts; Continuing Disclosure. The 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 said electric utility and all disbursements made therefrom and all transactions
relating to said electric utility. There shall be furnished upon written request, to any owner of the bonds, the most recent audit report of the electric utility prepared by the State
Board of Accounts. Copies of all such statements and reports shall be kept on file in the office of the Clerk. If the bonds or BANs are subject to Rule 15c2-12 of the Securities and
Exchange Commission ("Rule"), the Mayor and the Controller are authorized to execute and deliver a continuing disclosure undertaking agreement in satisfaction of the Rule.
Pledge of Net Revenues. (a) The BANs, if issued, shall be payable from the proceeds of the bonds, and interest on the BANs shall also be payable from Net Revenues, subject to the prior
payment of the bonds and any parity bonds.
The interest on and principal of the bonds issued pursuant to the provisions of this ordinance, and any bonds hereinafter 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.
Construction Account. Any accrued interest and any premium received at the time of delivery of the bonds shall be deposited in the Electric Utility Sinking Fund and credited to the
Bond and Interest Account thereof. The remaining proceeds from the sale of said bonds, to the extent not used to refund BANs, and BAN proceeds shall upon receipt be deposited in a
bank or banks which are legally designated and qualified depositories of the City, in a special account or accounts to be designated as “City of Richmond, Electric Utility Construction
Account.” The funds in each of such special accounts 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. The funds in such special account or accounts and any
income derived from the investment hereof shall be expended only for the purpose of paying the cost of the Project, refunding the BANs, if issued, and the incidental expenses incurred
in connection therewith and with the issuance of the bonds and BANs. Any balance or balances remaining unexpended in such special account or accounts after the completion of the Project,
which are not required to meet unpaid obligations incurred in connection with the construction of the Project, shall either (i) be deposited in the Electric Utility Sinking Fund and
used solely for the purposes of said Fund, or (ii) be used for the same purpose or type of project for which the bonds were issued, all in accordance with IC 5-1-13, as amended.
Use of Revenues. All revenues derived from the operation of the electric utility and from the collection of electric rates and charges shall be segregated and kept separate and apart
from all other funds and accounts of the City. Said revenues shall be deposited into the Operation and Maintenance Fund, the Electric Utility Sinking Fund and the Depreciation Reserve
Fund of the utility in accordance with this ordinance.
Operation and Maintenance Fund. The Operation and Maintenance Fund ("O&M Fund"), is hereby created. All existing accounts of the electric utility designed to pay items such as operation,
repair and maintenance, including purchased power expense, payments to the Indiana Municipal Power Agency, and payment in lieu of taxes paid to the City’s general fund, shall be deemed
a part of the O&M Fund. There shall be credited to the O&M Fund as of the last day of each calendar month a sufficient amount of the revenues of the electric utility so that the balance
in the O&M Fund shall be sufficient to pay the reasonable expenses of operation, repair and maintenance for the next succeeding calendar month. The moneys credited to this O&M Fund
shall be used for the payment of the reasonable operation, repair and maintenance expenses of the electric utility on a day-to-day basis, but none of the moneys in
such O&M Fund shall be used for depreciation, replacements, improvements, extensions or additions. Any balance in the O&M Fund in excess of the expected expenses of operation, repair
and maintenance for the next succeeding month may be transferred to the Electric Utility Sinking Fund if necessary to prevent a default in the payment of principal or interest on the
then outstanding bonds.
Electric Utility Sinking Fund. The Electric Utility Sinking Fund ("Sinking Fund") is hereby created and constitutes the sinking fund for the payment of the principal of and interest
on the bonds. 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 said electric utility
to meet the requirements of the Bond and Interest Account and of the Debt Service Reserve Account hereby created in the Sinking Fund. Such payments shall continue until the balance
in the Bond and Interest Account, plus the balance in the Debt Service Reserve Account, equals the principal of and interest on all of the then outstanding bonds to the final maturity
thereof.
Bond and Interest Account. There shall be credited on the last day of each calendar month to the Bond and Interest Account an amount equal to the sum of at least one-sixth (1/6) of
the interest on and at least one-twelfth (1/12) of the principal of such outstanding bonds which will be payable on the then next succeeding interest and principal payment dates, until
the amount of interest and principal payable on the then next succeeding principal and interest payment dates shall have been so credited. There shall similarly be credited to the
account any amounts necessary to pay the bank fiscal agency charges for paying principal and interest on said 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 bank
fiscal agency sufficient moneys to pay the principal and interest on the due dates thereof together with the amount of bank fiscal agency charges.
Debt Service Reserve Account. The Debt Service Reserve Account ("Reserve Account") is hereby created. On the date of delivery of the bonds, bond proceeds, funds on hand of the electric
utility 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 cause the balance therein to equal the Reserve Requirement or if no deposit is made, the City shall deposit a sum of Net Revenues
into 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 City may fund all or part of the Reserve Account with a debt service reserve surety
bond. The surety bond must be issued by an insurance 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 as protection against default in the payment of principal of and interest on the bonds and any parity bonds, and moneys in the Reserve Account
shall be used to pay current principal and interest on the bonds and any parity 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.
In the event moneys in the Reserve Account are transferred to the Bond and Interest Account to pay interest and principal on the bonds, then such depletion of the balance in the Reserve
Account shall be made up from the next available Net Revenues after the credits into the Bond and Interest Account hereinbefore provided for. Any moneys in the Reserve Account in excess
of the Reserve Requirement shall be transferred to the Depreciation Reserve Fund.
Depreciation Reserve Fund. There is hereby created a special fund designated the Depreciation Reserve Fund (hereafter, "Depreciation Fund"). There shall be deposited into the Depreciation
Fund on or before the last day of each calendar month any excess revenues remaining after making the required deposits into the O&M Fund and the Sinking Fund. The Depreciation Fund
shall be expended in making good depreciation in the property of said electric utility, or applied on the cost of the improvements herein referred to or future replacements, extensions,
additions and improvements to such property. The Depreciation Fund may also be used to pay principal of and interest on the BANs. Funds may also be transferred to the Bond and Interest
Account to prevent a default on all outstanding bonds, or, if necessary, to eliminate any deficiencies in credits to or minimum balance in the Reserve Account of the Sinking Fund or
may be transferred to the O&M Fund to meet unforeseen contingencies in the operation, repair and maintenance of the electric utility.
Maintenance of Accounts. The Sinking Fund shall be deposited in and maintained as a separate account or accounts from all other accounts of the City. The O&M Fund and the Depreciation
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. This section shall not be construed as requiring the City to maintain separate bank accounts. All moneys deposited in said
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 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.
Defeasance of the Bonds. If, when the bonds issued hereunder or any 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 any 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 any 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 issued
hereunder or any designated portion thereof shall no longer be deemed outstanding or entitled to the pledge of the Net Revenues of the City’s electric utility.
Rate Covenant. The City shall by ordinance establish, maintain and collect reasonable and just rates and charges for facilities and services afforded and rendered by said electric utility,
which shall to the extent permitted by law produce sufficient revenues at all times to pay all the legal and other necessary expense incident to the operation of such electric utility,
to include maintenance costs, operating charges, upkeep, repairs, interest charges on bonds or other obligations, to provide the sinking fund and reserve account as herein required
for
the liquidation of bonds or other evidences of indebtedness, to provide adequate funds to be used as working capital, as well as funds for making extensions, additions, improvements
and replacements, and also, for the payment of any taxes that may be assessed against such electric utility, it being the intent and purpose hereof that such charges shall produce an
income sufficient to maintain such electric utility property in a sound physical and financial condition to render adequate and efficient service. So long as any of the bonds herein
authorized 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 electric utility to the City, and all such payments shall be deemed to be revenues of the electric utility. 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 the requirements of the Sinking Fund.
Additional Bond Provisions. (a) 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 revenues of its electric utility ranking on a parity with the bonds authorized by this ordinance for the purpose of financing
the cost of future additions, extensions, and improvements to the electric utility, or to refund obligations, subject to the following conditions:
The interest on and principal of all bonds or other obligations payable from the revenues of the electric utility shall have been paid to date in accordance with the terms thereof and
all credits required to be made to the Sinking Fund and the accounts thereof shall have been made to date.
The Net Revenues of the electric utility in the fiscal year immediately preceding the issuance of any such bonds ranking on a parity with the bonds authorized by this ordinance shall
not be less than one hundred twenty-five percent (125%) of the maximum annual interest and principal requirements of the then outstanding bonds payable from Net Revenues and the additional
parity bonds proposed to be issued; or, prior to the issuance of said parity bonds, the electric rates and charges shall be increased sufficiently so that said increased rates and charges
applied to the previous fiscal year’s operations would have produced Net Revenues for said year equal to not less than one hundred twenty-five percent (125%) of the maximum annual interest
and principal requirements of the then outstanding bonds and the additional parity bonds proposed to be issued. For the purposes of this subsection, the records of the electric utility
shall be analyzed and all showings shall be prepared by a certified public accountant retained by the City for that purpose. The term "Net Revenues" as used in this subsection shall
be construed to mean the revenues remaining after the reasonable expenses of operation, repair and maintenance, including any payments required under any power sales or supply agreement
or agreements, has been paid or provided for, excluding depreciation expense and interest costs on bonds.
The interest on the additional parity bonds shall be payable semiannually on March 1 and September 1, and the principal shall be payable annually on March 1.
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 BANs and the bonds, it is hereby specifically provided as follows:
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 one hundred percent (100%) of the amount of such contracts, to insure the completion of said contracts, in accordance
with their terms, and such contractors shall also be required to carry such employers’ liability and public liability insurance as are required under the laws of the State of Indiana
in the case of public contracts, and shall be governed in all respects by the laws of the State of Indiana relating to public contracts.
The Project shall be constructed under the supervision and subject to the approval of such competent engineer as shall be designated by the City. All estimates for work done or material
furnished shall be examined by the engineer and approved by the City prior to payment therefor.
The City shall at all times maintain its electric utility in good condition and operate the same in an efficient manner and at a reasonable cost.
So long as the BANs and the bonds herein authorized are outstanding, the City shall maintain insurance on the insurable parts of said electric utility of a kind and in an amount such
as would normally be carried by private companies engaged in a similar type of business. All insurance shall be placed with responsible insurance companies qualified to do business
under the laws of the State of Indiana. Insurance proceeds shall be used in replacing the property destroyed or damaged; or if not used for that purpose shall be deposited in the Sinking
Fund. 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.
So long as the BANs and the bonds herein authorized are outstanding, the City shall not mortgage, pledge or otherwise encumber such utility or any part thereof, nor shall it sell, lease
or otherwise dispose of any portion thereof except equipment or property which may become worn out, obsolete or no longer suitable for use in the electric utility.
Except as hereinbefore provided in Section 18, so long as the bonds herein authorized are outstanding, no additional bonds or other obligations pledging any portion of the revenues of
said electric utility shall be authorized, executed or issued by the City except such as shall be made subordinate and junior in all respects to the bonds herein authorized, unless
the bonds herein authorized have been defeased and sufficient funds to effect the retirement have been deposited in accordance with the terms and conditions of said bonds and Section
16 of this ordinance.
The provisions of this ordinance shall constitute a contract by and between the City and the owners of the BANs and the bonds herein authorized, and after the issuance of said BANs or
bonds, this ordinance shall not be repealed or amended in any respect which will adversely affect the rights of the owners of said bonds or BANs, nor shall the Common Council adopt
any law, ordinance or resolution which in any way adversely affects the rights of such owners so long as said BANs or bonds, or the interest thereon, remain unpaid. Excluding the changes
set forth in Section 22(a)-(f), the ordinance may be amended, however, without the consent of bond or BAN owners, if the Common Council determines, in its sole discretion, that such
amendment would not adversely affect the owners of the BANs or bonds.
The provisions of this ordinance shall be construed to create a trust in the proceeds of the sale of the BANs and bonds herein authorized for the uses and purposes herein set forth,
and the owners of the BANs and bonds 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 portion of Net Revenues herein directed to be set apart and paid into the Sinking Fund for the uses
and purposes of said Fund as in this ordinance set forth. The owners of said BANs and bonds shall have all the rights, remedies and privileges set forth under Indiana law in the event
the City shall default in the payment of the interest on or principal of the BANs or bonds, or fail or refuse to fix and collect sufficient rates and charges for said purposes, or shall
fail or refuse to operate and maintain said system and to apply properly the revenues derived from the operation thereof.
Investment of Moneys. (a) The Controller is hereby authorized to invest moneys pursuant to IC 5-1-14-3 and the provisions of this ordinance (subject to applicable requirements of federal
law to insure such yield is the then current market rate) to the extent necessary or advisable to preserve the exclusion from gross income of interest on the BANs and bonds under federal
law.
The Finance Manager of the electric utility shall keep full and accurate records of investment earnings and income from moneys held in the funds and accounts referenced herein. In order
to comply with the provisions of the ordinance, the Finance Manager is hereby authorized and directed to employ consultants or attorneys from time to time to advise the City as to requirements
of federal law to preserve the tax exclusion. The Finance Manager may pay any fees as operation expenses of the electric utility.
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:
The electric utility 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 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 electric utility, 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 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 BANs or bonds, as the case may be.
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.
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.
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 paragraph (a) and (b) above or the private
loan test described in paragraph (c) above during the entire term of the bonds or BANs, as the case may be.
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).
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 or BANs are outstanding which would cause the bonds or BANs to be private activity bonds under the
meaning of Section 141 of the Code.
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 bonds or BANs, as the case may be.
The City represents that:
The bonds and BANs are not private activity bonds as defined in Section 141 of the Code;
The City hereby designates the bonds and BANs as qualified tax-exempt obligations for purposes of Section 265(b) of the Code;
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 either 2005 or 2006 does not exceed $10,000,000; and
The City has not and will not designate more than $10,000,000 of qualified tax-exempt obligations during either 2005 or 2006.
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.
The City represents that it will to rebate any arbitrage profits to the United States in accordance with the Code.
These covenants are based solely on current law in effect and in existence on the date of delivery of the bonds or BANS, as the case may be.
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, anything contained in this ordinance
to the contrary notwithstanding, 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:
An extension of the maturity of the principal of, mandatory sinking fund redemption dates, if any, or interest on any bond issued pursuant to this ordinance; or
A reduction in the principal amount of any bond or the redemption premium or the rate of interest thereon; or
Except as otherwise noted in Section 1 with respect to the BANs, the creation of a lien upon or a pledge of the Net Revenues of the electric utility to the bonds ranking prior to the
pledge thereof created by this ordinance; or
A preference or priority of any bond or bonds issued pursuant to this ordinance over any other bond or bonds issued pursuant to the provisions of this ordinance;
A reduction in the Reserve Requirement; or
A reduction in the aggregate principal amount of the bonds required for consent to such supplemental ordinance.
In the event that the owners of not less than sixty six and two thirds percent (66 2/3%) in aggregate principal amount of the bonds outstanding at the time of adoption of such supplemental
ordinance shall have consented to and approved the adoption thereof by written instrument to be maintained on file in the office of the Clerk of the City, no owner of any bond issued
pursuant to this ordinance shall have any right to object to the adoption of such supplemental ordinance or to object to any of the terms and provisions contained therein or the operation
thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the Common Council of the City from adopting the same, or from taking any action
pursuant to the provisions thereof. Upon the adoption of any supplemental ordinance pursuant to the provisions of this section, this ordinance shall be, and shall be deemed, modified
and amended in accordance therewith, and the respective rights, duties and obligations under this ordinance of the City and all owners of bonds then outstanding, shall thereafter be
determined, exercised and enforced in accordance with this ordinance, subject in all respects to such modifications and amendments. Notwithstanding anything contained in the foregoing
provisions of this ordinance, the rights and obligations of the City and of the owners of the bonds authorized by this ordinance, and the terms and provisions of the bonds and this
ordinance, or any supplemental 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.
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 to a financial
institution, the Indiana Bond Bank, or any other purchaser, pursuant to a Bond Anticipation Note Purchase Agreement ("BAN 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 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.
The Mayor and the Controller are hereby authorized to execute a BAN Purchase Agreement in such form or substance as they shall approve acting upon the advice of counsel. The Mayor,
the Clerk and the Controller 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.
Permitted Non-Compliance 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 BANs and bonds from gross income under federal law ("Tax Exemption") need not be complied with if the City receives an opinion
of bond counsel that compliance with any Tax Section is unnecessary to preserve the Tax Exemption.
Conflicting Ordinances. All ordinances and parts of ordinances in conflict herewith are hereby repealed.
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.
Effective Date. This ordinance shall be in full force and effect from and after its passage by the Common Council and execution by the Mayor.
Adopted on first reading by the Common Council of the City of Richmond, Indiana, this_7th_ day of November_, 2005.
COMMON COUNCIL
CITY OF RICHMOND, INDIANA
S/S Bruce Wissel
Presiding Officer
ATTEST:
S/S Karen Chasteen
Clerk
Adopted on second and final reading by the Common Council of the City of Richmond, Indiana, this 7th day of November , 2005.
COMMON COUNCIL
S/S Bruce Wissel
Presiding Officer
Attest:
S/S Karen Chasteen
Clerk
Presented by me to the Mayor of the City of Richmond, Indiana, on the 22nd day of November, 2005.
S/S Karen Chasteen
Clerk
This ordinance approved and signed by me, the Mayor of the City of Richmond, Indiana, on the 22nd day of November, 2005.
S/S Sarah L. Hutton
Mayor
Exhibit A
RP&L Project Description
09/2005
Highland Road Substation
This project involves the construction of a new 138/69//13.8 kV substation on Highland Road in Richmond. The substation will be constructed to 138 kV standards with a 25 mVA transformer
and four (4) 13.8 kV distribution circuits. The circuits will provide service to the IU East/Ivy Tech Community College campus area, the new Reid Hospital and the existing commercial
and residential load in the northeast area of Richmond. The new circuits will provide greater reliability to the existing customers, as well as the ability to serve the expanding demand
being forecasted for this area.
Johnson St Transformer
This project involves the purchase of a new 138/69//13.8 kV, 41 mVA transformer to replace one of the two existing transformers at Johnson St substation. The transformer being replaced
is a vintage 1954 transformer that is becoming less reliable due to equipment failures and questionable test results. This transformer provides primary service to a large customer
base in the center of Richmond, as well as being an integral back-up source for several other substations in the area.
Whitewater Generation Unit #2 Transformer
This project involves the replacement of the Unit #2 Generator House Power transformer at the Whitewater Generating Station. The transformer being replaced is a 14.2/2.4 kV, 5-mVA transformer
that provides service to the necessary pumps, motors and other equipment needed to operate the Unit #2 generator. The existing transformer has a history of questionable results from
testing the components of the transformer.