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of Accounts. Copies of all such statements and reports shall be kept on file in the office of the <br /> Controller. <br /> SECTION 18. Rate Covenant. The City shall, to the fullest extent permitted by law, <br /> establish, maintain and collect just and equitable rates and charges for the use of and the services <br /> rendered by said Sewage Works,to be paid by the owner of each and every lot,parcel of real estate <br /> or building that is connected with and uses said Sewage Works by or through any part of the <br /> sewage system of the City, or that in any way uses or is served by such Works. Such rates or <br /> charges shall be sufficient in each year for the payment of the proper and reasonable expenses of <br /> operation, repair and maintenance of the Works, for depreciation and improvement, for payments <br /> in lieu of taxes, and for the payment of the sums required to be paid into the Sinking Fund. Such <br /> rates or charges shall, if necessary, be changed and readjusted from time to time so that the <br /> revenues therefrom shall always be sufficient to meet the expenses of operation, repair and <br /> Y p p p <br /> maintenance, depreciation and improvement, and the requirements of the Sinking Fund; and such <br /> rates or charges shall be in an amount sufficient in each year to produce Net Revenues at least <br /> equal to 1.1 times the greater of the average annual debt service on the Prior Bonds,the Refunding <br /> Bonds and all bonds on a parity therewith or the debt service payable during the next succeeding <br /> twelve (12) calendar months on the Prior Bonds, the Refunding Bonds and all bonds on a parity <br /> therewith. For these purposes, the interest rate on variable rate debt shall be assumed to be the <br /> average interest rate thereon in the preceding calendar year. <br /> SECTION 19. Defeasance. If, when the Refunding Bonds or a portion thereof shall <br /> have become due and payable in accordance with their terms or shall have been duly called for <br /> redemption or irrevocable instructions to call the Refunding Bonds or a portion thereof for <br /> redemption shall have been given,and the whole amount of the principal,premium,if any, and the <br /> interest so due and payable upon such Refunding Bonds or any portion thereof then outstanding <br /> shall be paid,or(i) sufficient moneys, (ii) direct non-callable obligations of(including obligations <br /> issued or held in book-entry form on the books of) the United States of America, the principal of <br /> and the interest on which when due without reinvestment will provide sufficient money, or (iii) <br /> any combination of the foregoing,shall be held irrevocably in trust for such purpose,and provision <br /> shall also be made for paying all fees and expenses for the payment, then and in that case the <br /> Refunding Bonds or such designated portion thereof shall no longer be deemed outstanding or <br /> secured by this Ordinance or entitled to the pledge of the Net Revenues. <br /> SECTION 20. Additional Bonds. The City reserves the right to authorize and issue <br /> additional bonds, payable out of the revenue of its Sewage Works, ranking on a parity with the <br /> Refunding Bonds and any outstanding Prior Bonds for the purpose of financing the cost of future <br /> additions, extensions and improvements to the Sewage Works or to provide for a complete or <br /> partial refunding of the Refunding Bonds or other bonds payable out of the revenues of the Sewage <br /> Works, subject to the following conditions: <br /> (a) The interest on and principal of all bonds payable from the revenues of the <br /> Sewage Works shall have been paid to date in accordance with the terms thereof, provided, this <br /> condition shall be deemed satisfied if any required amount is to be provided from the proceeds of <br /> the parity bonds or other funds of the City. <br /> - 17 - <br />