Authorizing Issuance of Revenue Bonds concerning construction of Improvements to Waterworks, not to exceed $2,050,000

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utilities, on an accrual basis, as promulgated by the Government Accounting Standards Board and (ii) the rules, regulations and guidance of the State Board of Accounts. SECTION 18. Rate Covenant. The City, by and through the Board and to the fullest extent permitted by law, shall establish, fix, maintain and collect reasonable and just rates and charges for the use of and the services rendered by the works so that such rates and charges shall produce revenues at least sufficient in each year to provide for the proper Operation and Maintenance (as defined in the Financial Assistance Agreement) of the waterworks, to comply with and satisfy all covenants contained in this ordinance and the Financial Assistance Agreement and to pay obligations of the waterworks and of the City with respect to the waterworks. Such rates and 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 of the waterworks and the requirements of the Sinking Fund. The rates and charges so established shall apply to any and all use of such works by and service rendered to the City, and shall be paid by the City as the charges accrue. So long as any of the 1999 Bonds are outstanding, none of the facilities and services afforded by the works shall be furnished without a reasonable and just charge being made therefor. SECTION 19. Defeasance. If, when the 1999 Bonds or a 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 1999 Bonds or a portion thereof for redemption shall have been given, and the whole amount of the principal, premium, if any, and the interest so due and payable upon such 1999 Bonds or any portion thereof then outstanding shall be paid, or (I) cash, (ii) direct non-callable obligations of (including obligations issued or held in book-entry form on the books of) the U.S. Department of the Treasury, the principal of and the interest on which when due without reinvestment will provide sufficient money, or (iii) any combination of the foregoing, shall be held irrevocably in trust for such purpose, and provision shall also be made for paying all fees and expenses for the payment, then and in that case the 1999 Bonds or such designated portion thereof shall no longer be deemed outstanding or secured by this Ordinance or entitled to the pledge of the Net Revenues. SECTION 20. Additional Bonds. The City reserves the right to issue additional bonds payable out of the Net Revenues ranking on a parity with the 1999 Bonds for the purpose of financing the cost of future additions, extensions and improvements to the works, or after the Prior Bonds are no longer outstanding to provide for a complete orpartial refunding of obligations,subject to the following conditions precedent: (a) The interest on and principal of all bonds payable from the Net Revenues shall have been paid to date in accordance with the terms thereof, and all required payments into the Sinking Fund required by this Ordinance shall have been made. The Reserve Requirement shall be satisfied for the additional Parity Bonds either at the time of delivery of the additional Parity Bonds or over afive-year or shorter period, in a manner which is commensurate with the requirements established in Section 14 of this Ordinance. -21-