05-26-09 Common Council Meeting Agenda & Packet

Home Browse Search

such payment. The Sinking Fund is divided into two accounts designated as the Bond and Interest Account and the Debt Service Reserve Account, which are pledged for the purposes set forth below. There shall be set aside and deposited in the Sinking Fund, as available, and as hereinafter provided, a sufficient amount of the Net Revenues to meet the requirements of the Bond and Interest Account (also shown on the books of the utility as the Bond Sinking Fund) and of the Debt Service Reserve Account. Such payments shall continue until the balance in the Bond and Interest Account, plus the balance in the Debt Service Reserve Account, equals the amount needed to redeem all of the then outstanding bonds. (a) Principal and Interest Account. There shall be transferred, on the last day of each calendar month, from the Revenue Fund and credited to the Bond and Interest Account an amount equal to the sum of one-twelfth (1/12) of the principal and one-sixth (1/6) of the interest on all then outstanding bonds payable from Net Revenues on the next succeeding principal and interest payment dates, until the amount so credited shall equal the principal payable during the next succeeding twelve (12) calendar months and the interest payable during the next succeeding six (6) calendar months. There shall similarly be credited to the account any amount necessary to pay when due the bank fiscal agency charges for paying principal of and interest on the bonds as the same become payable. The City shall, from the sums deposited in the Sinking Fund and credited to the Bond and Interest Account, remit, promptly to the bank fiscal agency sufficient moneys to pay the principal and interest on the due dates thereof together with the amount of bank fiscal agency charges. (b) Debt Service Reserve Account. 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 Bonds (as defined below), 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. (c) In this Ordinance the term "Parity Bonds" means any and all bonds ranking on a parity with the 2009 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 City's waterworks. (d) In this Section 14 the term "Bonds" means the 2009 Bonds issued hereunder and all Parity Bonds. (e) In this Ordinance the term "Reserve Requirement" means the lesser of: (i) the maximum annual debt service on the Bonds, (ii) 125% of the average annual debt service on the Bonds, or (iii) ten percent (10%) of the proceeds of the Bonds. (f) Subject to Section 14(g) and Section 14(h) below, the City shall maintain in the Debt Service Reserve Account in an amount equal to the Reserve Requirement. (g) To the extent that the amount in the Debt Service Reserve Account on the date of the issuance of the 2009 Bonds is less than the Reserve Requirement, that portion of the shortfall which exists as of the date of issuance of the 2009 Bonds shall, at the election of the Executive and Fiscal Officer with the advice of the City's financial advisor, be deposited into the -20-