03-25-13 Agenda & Packet - Laserfiche WebLink

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(c) Reserve Account. (i) For purposes of this Section 14(c), the term "Bonds" means the 2013A Bonds issued hereunder and any and all bonds ranking on a parity with the 2013A Bonds issued hereunder (including the Prior Bonds) which are (i) now outstanding or issued in the future by the City and (ii) which are payable from the Net Revenues of the Sewage Works. (ii) The Reserve Account (excluding any subaccounts established for any of the Bonds (each, a "Subaccount", and collectively, the "Subaccounts")) shall constitute the margin for safety and as protection against default in the payment of principal of and interest on the Bonds (excluding any Bonds for which a Subaccount was established), and the moneys in the Reserve Account (excluding any Subaccounts) shall be used to pay current principal and interest on the Bonds (excluding any Bonds for which a Subaccount was established) to the extent that moneys in the Bond and Interest Account are insufficient for that purpose. (iii) The City may, upon the issuance of the 2013A Bonds, establish within the Reserve Account a subaccount for the 2013A Bonds ("2013A Subaccount"). The 2013A Subaccount shall constitute the margin for safety and as protection against default in the payment of principal of and interest on the 2013A Bonds, and the moneys in such 2013A Subaccount shall be used to pay current principal and interest on the 2013A Bonds to the extent that moneys in the Bond and Interest Account are insufficient for that purpose. (iv) No amounts in the 2013A Subaccount shall be available to pay any principal of or interest or redemption premium, if any, on any Bonds, except the 2013A Bonds. (v) The balance to be maintained in the 2013A Subaccount shall equal but not exceed an amount (the "Reserve Requirement") equal to the least of (i) the maximum annual debt service on the 2013A Bonds, (ii) one hundred twenty-five percent (125%) of average annual debt service on the 2013A Bonds, or (iii) ten percent (10%) of the proceeds of the 2013A Bonds. (vi) If the 2013A Subaccount is established, and the initial deposit into the 2013A Subaccount does not equal the Reserve Requirement, or if no deposit is made, the City shall deposit a sum of Net Revenues into the 2013A Subaccount on the last day of each calendar month until the balance equals the Reserve Requirement. The monthly deposits shall be equal in amount and sufficient to accumulate the Reserve Requirement within five (5) years of the date of delivery of the 2013A Bonds. (vii) Any deficiency in the balance maintained in the 2013A Subaccount shall be made up from the next available Net Revenues remaining after credits into the Bond and Interest Account. Any moneys in the 2013A Subaccount in excess of the Reserve Requirement shall either be transferred to the Sewage Works Improvement Fund(as described herein) or be used for the purchase of outstanding bonds - 13 -