Amend & Restating Ordinance #9027-99 Concerning Construction of Improvements to Wworks, amount not to exceed $2,6000,000

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(b) Debt Service Reserve Account. There shall be transferred, on the last day of each calendar month, from the Revenue Fund and credited to the Debt Service Reserve Account equal amounts sufficient to accumulate the Reserve Requirement within five (5) years of the date of delivery of the 2000 Bonds which amount shall constitute an appropriate reserve to facilitate the marketing of the 2000 Bonds, which reserve amount shall equal the lesser of (i) the maximum annual debt service on the 2000 Bonds, (ii) 125% of the average annual debt service on the 2000 Bonds, or (iii) ten percent (10%) of the proceeds of the 2000 Bonds. After this five (5) year period, the City shall maintain the balance in the Debt Service Reserve Account in an amount equal to the Reserve Requirement. For these purposes, "Reserve Requirement" means the lesser of (i) the maximum annual debt service on the 2000 Bonds issued hereunder and any bonds ranking on a parity therewith (including the Prior Bonds) which are now outstanding or issued in the future by the City and which are payable from the net revenues of the waterworks (the "Parity Bonds"), (ii) 125% of the average annual debt service on the 2000 Bonds issued hereunder and any Parity Bonds, or (iii) ten percent (10%) ofthe proceeds ofthe 2000 Bonds issued hereunder and any Parity Bonds. The Debt Service Reserve Account shall constitute the margin for safety and as protection against default in the payment of principal of and interest on the 2000 Bonds and such Parity Bonds and the moneys in the Debt Service Reserve Account shall be used to pay current principal and interest on the 2000 Bonds and such 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 Debt Service Reserve Account shall be promptly made up from the next available Net Revenues after credits into the Bond and Interest Account. Any moneys in the Debt Service Reserve Account in excess of the Reserve Requirement may be used for the prepayment of installments of principal on the then outstanding 2000 Bonds and Parity Bonds which are then callable or prepayable, or for the purchase of outstanding 2000 Bonds or Parity Bonds or installments of principal of the 2000 Bonds or Parity Bonds at a price not exceeding par and accrued interest, or may be transferred to the Improvement Fund. SECTION 15. Improvement Fund. After meeting the requirements ofthe Operation and Maintenance Fund and the Sinking Fund, any excess revenues may be transferred from the Revenue Fund and credited to the special utility fund hereby continued which was created and designated in the Prior Ordinances as the "Waterworks Improvement Fund" (the "Improvement Fund") (also shown on the books of the utility as the Depreciation Fund), and said Fund shall be used for improvements, replacements, additions and extensions of the works. Moneys in the Improvement Fund shall be transferred to the Sinking Fund if necessary to prevent a default in the payment of principal of and interest on the then outstanding bonds or, if necessary, to eliminate any deficiencies in credits to or minimum balance in the Debt Service Reserve Account of the Sinking Fund, or may be transferred to the Operation and Maintenance Fund to meet unforeseen contingencies in the operation and maintenance of the works. SECTION 16. Investment of Funds. The Revenue Fund and the Sinking Fund each shall be deposited in and maintained as a separate bank account or accounts from all other bank accounts of the City. The Operation and Maintenance Fund and the Improvement Fund may be maintained in a single bank account or accounts, but such bank account or accounts shall likewise be maintained separate and apart from the Revenue Fund and all other bank accounts of the City and apart from the Revenue Fund and the Sinking Fund bank accounts. All moneys deposited in the -20-