10-26-09 Common Council Meeting Agenda & Packet

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(c) If the Bonds are sold to the Authority, to the extent that (a) the total principal amount of the Bonds is not paid by the purchaser or drawn down by the pity or (b) proceeds remain in the Construction Account and are not applied to the Project (or any modifications or additions thereto approved by the Department and. the Authority), the City shall reduce the principal amount of the Bonds' maturities to effect such reduction in a manner that will still achieve as level an anm~al debt service as practicable as described in Section III of this Ordinance subject to a:nd upon the terms forth in the Financial Assistance Agreement. Section 6. Subsection (b) of the section of the Bond Ordinance labeled Section XI. Sewa>?e Works Sinking Fund is hereby amended and restated in its entirety and a new subsection (c) shall be added to said Section XI as follows: (b) Debt Service Reserve Account. On the first day of each calendar month, after making the credits to the Bond and Interest Account, there shall be credited from available net revenues to the Debt Service Reserve Account an amount not less than an amount which will produce, in equal monthly installments over a sixty (60) month period, an amount equal to the least of (i) maximum annual debt service on all bonds payable from the net revenues of the Sewage Works, (ii) 125% of the average annual principal and interest payable on all bonds payable from the net revenues of the Sewage Works, or (iii) ten percent (10%) of the proceeds of all bonds payable from the net revenues of the Sewage Works, plus a minor portion thereof as defined in the Internal Revenue Code of 1986, as amended (the "Code") (the "Debt Service Reserve Requirement ). Said credits to the Debt Service Reserve Account shall continue until the balance therein shall equal the Debt Service Reserve Requirement. The Debt Service Reserve Account shall constitute the margin for safety as a protection against default in the payment of principal of and interest on the bonds, and the moneys in the Debt Service Reserve Account shall be used to pay current principal and interest on the bonds to the extent that moneys in the Bond and Interest Account are insufficient for that purpose. In the event moneys in the Debt Service Reserve Account are transferred to the Bond and Interest Account to pay principal and interest on bonds, then such depletion of the balance in the Debt Service Reserve Account shall be made up from the next available net revenues after the credits into the Bond and Interest Account hereinbefore provided for. Any moneys in the Debt Service Reserve Account in excess of the Debt Service Reserve Requirement shall be transferred to the Sewage Works Improvement Fund, and in no event shall such excess moneys be held in the Debt Service Reserve Account. In the event the Bonds are sold to the Authority, notwithstanding the foregoing, the Reserve Requirement shall be the combined maximum annual debt service on the Bonds, any Prior Bonds payable from the Reserve Account, and any parity bonds hereafter issued: In such event, on each December 2 subsequent to the delivery of the Bonds, beginning with the December 2 immediately succeeding completion of the Project, the Controller shall decrease, if necessary, the amount on deposit in the Reserve Account so that the remaining amount on deposit equals the Reserve Requirement, provided that the City shall provide to the Authority fifteen - i2 - BDDB01 5863495v1